WWW Aubank In/annual-Report

Ref. No.
: AUSFB/SEC/2019-20/129
Date: 24thJune 2019
Listing Department Department of Corporate Services, The BSE

National Stock Exchange of India Limited, Limited,
Exchange Plaza, Bandra Kurla Complex, Bandra PhirozJeejeebhoy Towers, Dalal Street, Mumbai
(East), Mumbai 400051, Maharashtra. 400001, Maharashtra.
Symbol: AUBANK Scrip Code: 540611
Dear Sir(s),
Sub: Disclosure under SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 - Notice of Annual General Meeting and Annual Report of AU Small Finance Bank
Limited for the FY 2018-19
Pursuant to the applicable provisions of SEBI LODR, we wish to inform that the Twenty
Fourth (24th) Annual General Meeting (“AGM”) of the members of the Bank will be held on
Friday, 26th July, 2019 at 04:00 PM at Suryavanshi Mahal – Ground, Floor, Hotel ITC Rajputana,
Palace Road, Jaipur-302006, Rajasthan, India. We hereby submit a copy of the AGM Notice
and the Annual Report of the Bank for financial year 2018-19.
Further, in terms of Regulation 46 of SEBI LODR, the Annual Report along with the AGM Notice
is also available on the website of the Bank at https://www.aubank.in/annual-report.
The Bank has commenced dispatch of the Notice of 24th AGM and the Annual Report for
FY 2018- 19 to the shareholders from Monday, June 24, 2019.
We request you to take above information on record.
Thanking You,
FOR AU SMALL FINANCE BANK LIMITED
Manmohan Parnami
Company Secretary & Compliance Officer
Growin the right way
SCALABLE
STABLE BANKABLE
INCLUSIVE
GROWTH DIFFERENTIATED
APPROACH
CUSTOMER
CENTRIC TECHNOLOGY
DRIVEN
TEAM
ORIENTED STRONG
GOVERNANCE
WELL
CAPITALISED
2018-19
ANNUAL REPORT
Report Creating value for
contents all stakeholders
Corporate Profile
PRELUDE
02 Growth Attributes STABLE
04 AU Bank DNA 24 AU Journey
06 Product Suite 26 Business Model
PEOPLE
28 Investment Case
08 Growing the 30 Operational Highlights
Nurturing a passionate team of
Right Way 12,623

SCALABLE committed AU bankers.
34 Megatrends
36 Key Performance Indicators
40 Deeper Outreach
44 Digital Footprint
48 Data and Analytics
BANKABLE CUSTOMERS
52 Brand AU Delivering customised solutions to our
54 Customer Centricity
58 Competent Team
60 Financial Inclusion
12
loyal customers.
62 Supporting Communities
MANAGEMENT MESSAGES 66 Risk Management
12 Chairman’s Communiqué 68 Board of Directors
14 Managing Director 72 Leadership Team
and CEO’s Review 74 Key Awards
20 Whole Time Director’s Message 75 Corporate Information
COMMUNITIES
We impacted over
2 lakh
lives through our social and financial
inclusion drives.
Statutory Reports Financial Statements

76 Management SHAREHOLDERS
178 Independent Auditor’s Report
Discussion & Analysis We have reported Total
184 Balance Sheet
94 Board’s Report Shareholder Return (TSR) of
114 Report on Corporate 185 Profit and Loss
Governance
141 Annexures
Account 186 Cash Flow
Statement 188 Schedules 34%
as on 31st March 2019 from our
date of listing 10th July 2017.
244 Notice (Issue price: `358 and closing price
(NSE) as on 31st March 2019: `595.6)
Welcome to AU Small
Finance Bank
In India’s dynamic banking

expanded offerings to 27 products
572
landscape, we are focussed
on remaining nimble with and solutions across key verticals
customer-first, ear-to-the-ground of financing, deposits, insurance,
transaction banking, mutual funds, Touchpoints (322 bank
approach. At AU Small Finance
Bank (AU Bank), we provide business banking and digital branches, 86 banking outlets,
banking. 83 asset centres, 67 Banking
comprehensive banking services
with simplicity and convenience, Correspondents and 14 offices)
serve diverse set of customers and As on 31st March 2019, our
help drive India’s inclusive growth balance sheet size stood
agenda. Headquartered at Jaipur, at
Rajasthan, we are a Fortune India `32,623 crore including total
deposits of `19,422 crore with
500 Company and a Scheduled
Commercial Bank.
15.2 lakh active customer accounts.
We have consistently maintained
a very good asset quality and
543*
We began our journey in 1996 ATMs
a strong capital adequacy.
as Au Financiers and under
Despite being in the investment
the guidelines of the Reserve
mode, we have run our operations
Bank
profitably, delivering strong results
of India (RBI), worked
in all previous quarters, besides
relentlessly for over two decades
distributing dividend every year
as a
since listing.
retail-focussed, customer-centric,
systematically important asset
We are listed on the NSE
1,00,000+
financing Non-Banking Financial Internet and mobile
(AUBANK) and the BSE
Company (NBFC). We catered to banking users
(540611).
the unserved and underserved
Marquee investment institutions
low-and middle-income individuals
such as Temasek Holdings,
and micro/small businesses, before
Nomura and Warburg Pincus
starting of our banking operation
have shown their faith in the AU
AA-/Stable
in April 2017. This transition was a
franchise. Our promoter, MD &
natural progression as it significantly
CEO, Mr. Sanjay Agarwal is ably
complements our strong vintage in
supported by a team of 12,600+ Long-term credit rating
secured retail asset lending, last-
mile distribution and local know-
passionate professionals. from four rating agencies
how, allowing us to serve our (CRISIL Rating, India
A solid foundation and a Ratings, ICRA Ratings and
customers holistically for their
differentiated business model, CARE Ratings)
financial requirements.
deep network, a comprehensive
product suite, strong customer
In the two years since we
service orientation and an
became a bank, we have added *Including 251 ATMs in collaboration with
execution-oriented team RajCOMP Info Services Ltd. (RISL) and
nearly a million new customers,
motivate us to scale new heights Cash Management Services (CMS)
grown
in the new era of value-
distribution to 572 touchpoints and
focussed, agile banking.
Growing the right way
AU Small Finance Bank
Growth Attributes
Strong BALANCE SHEET SIZE (` in crore)
performance 32,623
underpinned by FY 19
quality FY 18
18,833
73%
LOAN ASSETS UNDER (` in crore)

MANAGEMENT (AUM)
24,246
FY 19
16,188
FY 18
50%
ACTIVE LOAN ACCOUNTS (No.)
4,95,209
FY 19
3,58,080
FY 18
38%
DISBURSEMENTS (` in crore)
16,077
FY 19
10,825
FY 18
49%
RETURN ON
Corporate
YIELD ON AUM (%) DEPOSIT ACCOUNTS (No.)
AVERAGE EQUITY (ROAE) (%)
14.3 10,28,726 14.0

FY 19 FY 19 FY 19
14.7 5,31,062 13.7

FY 18 FY 18 FY 18
42 bps 94% 35 bps
Statutory
GROSS NPA (%) COST OF FUNDS (%) NET WORTH (` in crore)
2.0 7.9 3,163

FY 19 FY 19 FY 19
2.0 8.4 2,281

FY 18 FY 18 FY 18
3 bps 54 bps 39%
Financial
NET NPA (%)
NET CAPITAL
(%) (%)
INTEREST MARGIN (NIM) ADEQUACY RATIO (CAR)
1.3 5.5 19.3

FY 19 FY 19 FY 19
1.3 7.0 19.3

FY 18 FY 18 FY 18
2 bps 145
bps
DEPOSITS MOBILISED (` in
crore) RETURN ON AVERAGE (%) CAPITAL (%)
TOTAL ASSET (ROAA) ADEQUACY RATIO – TIER I
19,422 1.5 16.0

FY 19 FY 19 FY 19
7,923 2.0 18.4

FY 18 FY 18 FY 18
145% 56 bps 246 bps

2|
Annual Report 2018-

AU Bank DNA
Bridging aspirations Vision
and achievements To be the world’s most truste
as the epitome of financial in
For over two decades, we have been
relentlessly serving our customers in the
remotest locations of North, West and
Central India and helping them fulfil their
aspirations.
Now, as a modern young bank, we
have further expanded our spectrum
of offerings with a solutions-orientated
attitude. Our comprehensive product
suite supports the financial aspirations
of our customers for their savings,
payments, transactions, borrowings,
investments and insurance requirements.
Our deep local know-how and strong
focus on customer centricity differentiate
us and allow us to empower and
transform the lives of our 12 lakh+
customers.
At AU Bank, financial inclusion goes
beyond providing banking services to the
unreached. We empower our customers’
journeys and believe in ‘Unki jeet mein
hamaari jeet hai’ (We win when they win).
4|
Corporate
Missio
n INTEGRITY
We are fair and
Statutory
consistent in all our
To build one of india’s dealings – employees, NURTURE TALENT AND
largest retail franchise customers, partners or SUCCEED TOGETHER
that is admired for shareholders We nurture talent and
together we are a great team
• Making every customer
feel supreme while
being served
AU
• Aspiring that no Indian
is deprived of banking
WORK HARD AND LOOK
Financial
• Bias for action, FOR DETAILS
dynamism, detail
orientation and
product & process
innovation
Dharm
• Globally respected Willing to go the extra mile in
standards of integrity, everything we do and thoroughly
governance and understand customer needs,
ethics issues, and organisational
a
delivery model
• Being an equal
opportunity
employer, providing
a collaborative and The way we work
rewarding platform
to all its employees Our six guiding pillars of
AU Dharma underpin the
way in which we work and CUSTOMER FOCUS
Fastest growth to If our customers need it,
`1 trillion book size and deliver. Each of these tenets
positively influences us to do we will make it happen
a client base of 10+
million delighted the right things and in the
customers right way.
0% excuses
RESPONSIBLY
ENTREPRENEURIAL
100% ownership and
4|
BIAS FOR ACTION
Urgency in
everything
Growing weway
the right do
Annual Report 2018-

Product Suite
Delivering on customer aspirations
We aspire to be an all-in-one bank for our customers with a wide range of
financial products and services that meet their every need. We are committed to
continuously upgrading our products and solutions in line with the evolving needs
of our customers.
VEHICLE
LOAN COMMERCIAL TRACTOR
VEHICLE LOAN LOAN
HOME
LOAN
CONSUMER
FINANCE
TWO-WHEELER
LOAN SECURED
BUSINESS LOAN
-MSME/SME
GOLD
LOAN AGRI-SME
LOAN
6|
CONSTRUCTION
& BUILDER BUSINESS BANKING, NBFC/HFC/MFI
FINANCE TRADE FINANCE LENDING
& FOREX
Corporate
Statutory
SAVINGS
ACCOUNT CURRENT FIXED & RECURRING
ACCOUNT DEPOSIT
Financial
LOCKER POS MUTUAL
MACHINE FUND
LIFE & HEALTH EXPERIENCE

INSURANCE GENERAL & FIRE
INSURANCE 24X7 BANKING
WITH OUR MOBILE
AND
NET BANKING SERVICES
DOWNLOAD
AND
EXPERIENCE
OUR AU
ABHI APP
6|
Growing the
right way
India’s banking sector is one of the most resilient, firmly
regulated and well-capitalised financial ecosystems. Further, a
population base of 1.3 billion people, Government’s focus on
financial inclusion and a fast emerging digital infrastructure
present stellar growth opportunities therein.
Capitalising on our two-decade

monthly interest pay-outs on centricity, business prudence, risk
rich expertise as an NBFC, we
Savings Account, paperless and management, financial inclusion,
have successfully traversed the
digital customer acquisitions, no digitalisation and profitability.
early days of our banking journey.
‘home branch’ concept, extended
We remain committed to playing
banking hours, no slips for cash Our aim is to be among the first
our part in the nation’s progress
deposits or withdrawal and port of call for our customers
while scaling as a next-generation
no form for Real Time Gross and remain relevant for all their
bank.
Settlement (RTGS) transactions. banking requirements. To achieve
We also expanded our network this, we will make judicious
As a Bank, we began our
and distribution, and extended our investments in the key domains
journey when the economy was
products and services offering. of digital, data and distribution;
transitioning through three key
make our value proposition
reforms: Demonetisation, Goods
In addition, we fortified our superior and stronger, manage
& Services Tax (GST) rollout
systems and processes by investing our risks better and run our
and Insolvency and Bankruptcy
in critical areas of compliance, operations profitably, which will
Code (IBC). Despite the macro
risk management, distribution, allow us to delight our customers,
headwinds, we maintained a
governance and information shareholders, people, regulators
strong momentum in asset lending
technology. For more details on and other stakeholders.
while maintaining stable asset
these initiatives, please refer to
quality. We also gained healthy
our Annual Report of FY 2017-18, We believe, with the macro and
traction in our deposit franchise.
(www.aubank.in/annual-report). micro trending in happy harmony,
However, this is just the beginning,
India is now at a vantage point
and we have a long way to go.
In our second year, we continued for exponential value creation.
to gain newer insights and We hope to enjoy the continued
Our strategy has always been to
experiences. Our efforts were trust of all our stakeholders to
challenge the status quo. As a
anchored on building a Stable, help us grow responsibly and the
new-age bank, we sidestepped
Scalable and Bankable institution. right way.
some of the benchmarked
We maintained our focus
industry processes and features.
on regulations, governance,
We ushered in several unique
compliance, asset quality,
banking innovations, including
customer convenience, customer
Annual Report 2018-

Corporate
Statutory
Stabl
In our journey, we have been able to successfully
navigate through multiple economic cycles and
emerged as a stronger and stable franchise.
Our stability is intertwined with our differentiated
business model and our core guiding principles of
AU Dharma.
See page 22-31
Financial
for more details
Scalabl
Over the years, we have maintained a consistent
performance trajectory, building on our
achievements and fine-tuning our approach with our
experiences. The opportunity landscape is huge and
our business model has the right pivots to grow.
See page 32-49

for more details
Bankabl
Our legacy of two decades is synonymous
with customer centricity, passionate team
work, strong risk management and seasoned
leadership with a hands-on approach, which
make us a bankable Bank.
See page 50-73

for more details
8
Management
Messages
02
01
03
01
02 03
Our business philosophy
We perceive that Data, Our strategy is to match up
continues to be focussed
Digital, Distribution are the to customers’ expectations
on inclusiveness and
most critical cornerstones with a balanced and
progress for all. In a
of value creation which uniform approach.
fast-developing economy
will allow us to deliver Every prospective
with 1.3 billion people,
Delight to our customers. customer, who visits our
the opportunities are
We believe this 4D branches or events or
immense as a large strata
strategy will enable us to via medium of lead or via
of the population remains
build one of the most inbound call centre or
unserved. With some of
trusted retail banking through digital channels
the other banking and
franchise. or even when we visit
non-banking financial
them, expects a uniform
entities grappling with their
Mr. Sanjay Agrawal customer service from
own set of issues, the Managing Director and
us. We are also driving
Chief Executive Officer
stage is well set for us. ourselves to become
the first choice of our
Mr. Mannil Venugopalan
Chairman customers for all their
banking requirements.
Mr. Uttam Tibrewal

Whole Time Director
Chairman’s Communiqué
Building a
future-ready bank
DEAR SHAREHOLDERS,
India continues to be one of the
world’s fastest growing economies.
This is undoubtedly an ‘outlier’
performance, especially when
global growth is to a large extent
overshadowed by weakening financial
market sentiments, China’s gradual
slowdown, volatility in crude prices,
uncertainties around Brexit and trade
tensions between the US and China.
Indian economy witnessed a trend MOMENTUM ACROSS Innovation continues to be the

similar to the global GDP growth OPERATIONS fulcrum of our operations, because
with its real GDP growth slowing ‘differentiation’ begins with
In the second year of
down in second half of FY 2018- reinventing around the changing
operations, we strengthened our
19. needs of customers. We introduced
foundation.
However, GDP growth for the full year new asset products such as business
Despite headwinds of tighter liquidity
was 6.8%. banking, gold loan, home loan, Agri-
conditions, broader slowdown and cost
of funds remaining elevated in second SME, consumer finance and two-
Against this backdrop, we have wheeler loans. As we build scale, we
half of the year, we raised `19,422
successfully completed our second expect to
crore of deposits, clocking a strong
year of operations as an SFB and achieve reasonable size and as a
growth
our business philosophy continues result, an improvement in our returns.
of more than 145% over FY 2017-18.
to be focussed on inclusiveness
We mobilised nearly `4,000 crore of
and progress for all. In a fast-
retail term deposits during FY 2018-19 BANKING FOR NEW INDIA
developing economy with 1.3 billion
and continue to chase more of retail
people, the Our prime objective is to broad base
deposits, savings account and current
opportunities are immense as a large account. However, the systematic our growth and popularise convenient
strata of the population remains growth of banking sector deposit was banking habits so that banking reaches
unserved. With some of the other 9.4% for FY 2018-19. We disbursed the last mile. We are strategically
banking and non-banking financial loans worth more than `16,077 crore expanding our pan-India footprint.
entities grappling with their own set of in FY 2018-19; growing 49% over
issues, the stage is well set for us. FY 2017-18. At the same time, we are building a
strong digital platform, supported by
Moreover, the low but improving During the year under review, we best-in-class technology. Our digital
literacy rates and poor infrastructure, further strengthened our capital team has been beefed up and is
especially in semi-urban and rural adequacy by raising both Tier I building a product position, exploring
India make the availability of various active partnership with sector
capital amounting `1,000 crore
services unequal within the country. leaders, emerging start-ups and
(`475 crore was infused upfront
We have 86 Banking Outlets (BO) and and balance will be infused on and others for various key areas,
67 Business Correspondents (BC), before December 2019) and Tier II including digital payment modes.
taking our banking services to the
capital Bonds for `500 crore through
last mile customers to drive financial institutional investors including mutual
inclusion agenda as our key priority. funds, banks and insurance companies.
Annual Report 2018-

transform the lives of over a million
Your bank is an agile, analytics-driven, customer-centric and humane enterpr
M. Venugopalan
Chairman
Digital Bharat is the next game people with different financial inclusion
changer, which will benefit all initiatives. A large proportion of our branch
sections of the society. We welcome network (over 62%) is in the rural, semi-urban
the government’s announcement in and unbanked regions. Our 28% branches are in
the interim budget to connect as the unbanked rural areas, close to 59% of our
many loan portfolio are of a ticket size below `25 lakh
as 1 lakh villages with digital services and 79% of our lending is for priority sector
within the next five years. loans. These facets of our Bank showcase that
we are not just meeting but also exceeding the
We have a rich legacy of two decades key objectives of an SFB in supporting aspirations
of being a secured asset retail loans of the people close to the bottom of the pyramid.
specialist and our risk management
systems and credit appraisal processes Our strategy of growing the right way is to grow
continue to be amongst the best-in- collectively, responsibly and with a granular
class in the industry. focus on retail. Moreover, with the
government’s thrust towards strengthening the
rural economy, increased awareness and our
PARTICIPATORY BANKING strong engagement with customers in semi-
Since our NBFC days, we have urban and rural India, our core lending
witnessed the challenges faced by landscape continues to grow.
Indians deprived of banking
services and the strong need to To remain at the vanguard of the industry and
include them in the formal to capitalise on the opportunities, we are
economy. In our strengthening our operating efficiencies and
present avatar as an SFB, we following the best practices of corporate
continue to be driven by the same governance.
purpose.
However, besides targeting primarily
the low and middle-income individuals
and micro, small and medium
business customers, we have
expanded
multi-fold and now catering to
different cross sections of
customers from all walks of life.
Over the years, we have helped

12|
AMBASSADORS OF PROSPERITY
Corporate
WeGrowing the right
empower way
our people
byAUproviding them avenues
Small Finance Bank
for continuous learning,
building strong
relationships to achieve
extraordinary milestones.
Our people are true brand
ambassadors who bring
prosperity to the unbanked
population and touch their
lives.
For us, our people are

not just doing a job, but
also helping India
Statutory
prosper.
We are associated with the
Government of India’s skill
development programme,
where the emphasis is to
provide an employment to
the youth of rural and semi-
urban areas. We provide on-
the- job and classroom
training to our employees
for skill development and
career progression.
During the year under

review, our book value per
share increased by 36% to
`108.2 from `79.8 in
Financial
FY 2017-18 and earnings
per share grew by 28% to
`13.2 from `10.3 in the
previous financial year.
Your bank is an agile,

analytics-driven, customer-
centric and humane
enterprise, with a shared
ambition to grow the right
way, bringing prosperity to
all stakeholders.
Before I conclude, I
wish to thank all my
colleagues, Board
Members,
Reserve Bank of India,
SEBI and other regulatory
authorities, management
and the larger
stakeholder fraternity for
their continued guidance
and support.
Warm regards
M. Venugopalan
Chairman
Annual Report 2018-

Managing Director and CEO’s Review
Yesterday. Today. Forever.
I am assured that being a young, energetic, c
Sanjay Agrawal
Managing Director and Chief Executive Officer
DEAR MEMBERS,
a level playing field and we are still from mutual funds and elevation
Namaskar! amazed by it. The euphoria of the in cost of funds. These events once
first year of banking has led us into again revalidated our decision to
“A person who sees a problem is
the second year of stable operations. become a bank. However, for the
a human being;
Like a sapling, your bank is growing overall market in general, situation
a person who finds a solution is steadily and continuously, and my is slowly easing and may take some
a visionary; team and I are focused on building more time to improve.
a strong foundation of a new age
the person who goes out
bank which will be Stable, In the past few quarters our
and does something about it,
Scalable and Bankable. government undertook several key
is a Change Maker.”
reforms and structural changes
Speaking of macros, Indian including implementation of Goods
Enshrining the above words both
economy, post clocking a strong and Services Tax (GST), Insolvency
in spirit and in action, we, at AU
growth of 7.5% in the first half of and Bankruptcy Code (IBC), thrust
Bank, are endeavoring to be the
2018-19, slowed down in the second on digitalisation, empowerment to
change-makers pursuing a
half and for the full year, it grew at National Company Law Tribunal,
mission
6.8% in 2018-19 with etc. This resulted in India improving
to reimagine and simplify banking for
unemployment rate hovering around its ranking in World Bank’s ‘Ease of
all. And, in this journey, year 2018-19
7%. Turbulence hit the financial Doing Business Survey-2019’ by 23
was full of learnings. Amidst the
markets last year as places to climb to 77th place globally.
headwinds, we experienced the
exponential power of the banking non-banking finance companies faced Now, with the new government in
platform. This platform has given us a crisis of confidence which resulted place, we look forward to accelerating
in a liquidity squeeze, redemptions
14|
fruitful discussion at the senior most
Corporate
economic reforms and policies paving levels of RBI on the role of SFBs in
way for sustainable growth of the
economy.
Also, last year there was We reported 58% growth in Total Income to `3,411 in fisc
stringent adherence to
regulations. I must mention, the
country’s regulatory mechanism
is driving a new era of
transparency with a powerful
governance mechanism and I
believe the future belongs to those
Statutory
who will follow these ethos diligently.
Today India is nurturing grounds for

an emerging digital economy. We are
standing at a juncture where digital
technologies are disrupting the way
we bank. It is reshaping traditional
priority sector lending and financial inclusion.
business models and changing
competitive landscape.
The core of India’s growth revolves around
MSMEs, Auto Industry, Housing and
We believe that, with both the macros
Financial Inclusion.
and micros in harmony, India is now
at a vantage point for exponential
MSME sector accounts for ~31% of India’s
economic value creation. World Bank,
GDP and ~40% of exports. It is one of the
in its latest projection has retained
most crucial drivers of growth for our country
the GDP growth estimates for India at
and our
7.5% for the next two years. We are
company too. Last year, we grew our MSME
excited by the growth opportunities
book by 54%. However, of
India presents and are privileged to
the 63 million MSMEs that India has, we have
be a part of the banking system of
served only 0.11 million units as on date. We
India, which is a key catalyst for
look forward to capitalising on the huge
the growth.
opportunity that this sector presents.
Talking of Small Finance Banks
Within Wheels, while off late there has been
(SFBs), they were conceived in line
some slowdown in new vehicle sales, the Used
with our country’s development
Vehicle segment is expected to grow at a higher
agenda as their licensing guidelines
pace.
required 75% lending to Priority
Within Used Vehicle segment, Used Car
Sector, maintenance of 50% loan
segment is growing faster and shifting towards
book below
organised players. We have swiftly realigned this
`25 lakh ticket size and to have over
in our strategy. Our Used Car book grew 46% in
25% branches in rural and unreached
the last year. The Used Car market has crossed
areas. SFBs have made a remarkable
the 4-million-unit mark and is 1.2x the size of
impact since coming into existence
new car market. Compared to its current size of
in 2017. They have swiftly gained
4 million cars/year, Indian Used Car industry is
reasonable scale by garnering a
expected to reach between
combined asset portfolio of `60,238
6.7 to 7.2 million cars annually and will be
crore and a deposit base of `37,500
valued at `50,000 crore by FY 2021-22. Looking
crore as on 31st March 2019.
ahead at the growth trajectory we are excited to
expand
I am happy to inform you that we are
leading the SFB pack. In our pursuit,
we have received guidance and
support from the RBI. In fact, recently
we have had a very constructive and
Annual Report 2018-

Margin of 5.50% in
financial year 2018-19.
Profit After Tax (PAT) for
fiscal 2018-19 was up by
31% to `382 crore as
against `292 crore in 2017-
18.
our reach from existing

0.15 million units to much
more.
We are the second most

populous country of the
world and we are growing
Financial
fast. India’s present
mortgage penetration
hovers around 10% and is
expected to reach 14% by
FY 2021-22.
AU Bank relaunched
housing loans in Q4 of
FY 2017-18. Based on
our extensive experience,
we are poised
to take our share in the
ample market opportunity.
During 2018-19, the Indian

Banks’ deposits grew at
10% to `125.72 lakh crore.
At AU Bank, the deposits
grew by 145% and were at
`19,422 crore at the end of
FY 2018-19. We acquired
nearly 1 million deposit
customers last year.
YEAR UNDER REVIEW

I am pleased to report that
during fiscal 2018-19,
amidst the macro
headwinds enumerated
earlier, we reported 58%
growth in Total Income to
`3,411 in fiscal 2018-19 as
against
`2,155 crore in fiscal 2017-
18. Our Net Interest
Income rose by 43% to
`1,342 crore in financial year 2018-19
compared to `940 crore in
previous financial year. We
reported Net Interest
14|
For financial year 2018-19 Return on

including mutual funds, banks, Stable Outlook’ and our short-
Average Assets (ROAA) was 1.5% and
insurance companies and non- term ratings were reaffirmed at
Return on Average Equity (ROAE) was
banking finance company. ‘A1+’.
14%. Going forward, as cost of funds
sees a further reduction, our deposit
Raising of `1,000 crore from Temasek We endeavour to consistently build
franchise scales up further and new
Holdings, a global investment wealth for our shareholders and in
products get more traction, we expect
company, happened to be our largest accord with our performance, our
an improvement in both our ROAA
primary capital infusion into the Bank. Board has proposed a dividend of
and ROAE from current levels. This fund mobilisation allows us to 7.5% for fiscal 2018-19, a 50%
remain sufficiently capitalised in the increase over previous year.
We clocked a strong growth of near term, as we continue striving
49% in our new loan towards achieving our growth target. In the coming years, our focus will
disbursements resulting in a strong Our `1,913-crore IPO in July 2017 was remain on differentiated business
50% growth in our Assets Under a complete Offer-for-Sale with no model, strong liquidity & capital
Management to infusion in the Bank. adequacy; robust asset quality;
`24,246 crore as against `16,188
fortified phygital banking;
crore in March 2018. Alongside this, I am also pleased to share with you expanding geographic presence
we maintained stable asset quality that during previous fiscal, our long and stringent governance.
and our Gross and Net NPAs were term rating was upgraded to
2.0% and 1.3% respectively, the same ‘AA-/With
level as in FY 2017-18. It was well
supported by our strong collections
and recoveries through the year.
Banking Platform – Limitless Opportunities and Perpetual Journey
We scaled up our deposits franchise
31st March 2017 31st March 2019 Multiplier
to over a million customer accounts
Assets (` in crore) 9,781 32,623 3.3x
and our total deposits rose 145% in
Deposits (` in crore) - 19,422 n.m.
FY 2018-19 closing at `19,422 crore.
Net Worth (` in crore) 1,988 3,163 1.6x
However, due to external headwinds Distribution (Nos.)* 301 558 1.9x
the overall cost of funds remained Customers (Nos.) 2,80,349 15,23,935 5.4x
elevated at 7.9% levels. In last Employees (Nos.) 8,515 12,623 1.5x
quarter, we also made some design
changes with respect to product *For FY 2018-19, 572 including offices
prioritisation for new acquisitions and
redesigned our current delivery and
distribution model.
Being a bank, we maintained healthy

liquidity throughout last year and our We scaled up our deposits franchise to over a million cust
ALM position was also managed well
across all buckets. Also, treasury
external headwinds the overall cost of funds remained el
team generated profits of `7 crore
from the operations.
We maintained a strong total capital

adequacy of 19.3% and our Tier 1
capital adequacy ratio was 16.0%
as on 31st March 2019. During the
previous fiscal, we strengthened
our capital adequacy by raising Tier
I equity capital of `1,000 crore from
Temasek Holdings and Tier II
capital raise of `500 crore via
issuance of unsecured,
subordinated, rated, listed,
redeemable Non-Convertible Bonds
through private placement basis to
institutional investors
Annual Report 2018-

GROWING THE RIGHT WAY to employees across levels; enabling To address the same, we have
Corporate
wealth creation opportunities for renewed our focus on people
An institution’s legacy depends on its
them. management and enhanced our
prudence and credibility.
focus on skill development. As we
After becoming a Bank, the purpose are growing and adding new people,
Prudence is a function of
of living our values and steering our we are swiftly integrating new
Samajhdaari (Sensibility), Zimmedari
passion further assumed a greater team members with our timeless
(Responsibility) and Immandari
importance. I have come to believe guiding principles of AU Dharma and
(Honesty). Credibility comes when
that the banking platform tests all ‘sharpening the saw’ by upskilling and
we delightfully and dutifully serve our
the capabilities of a professional. training our employees.
customers and keep their faith
and trust. From building relationships to
product development, from risk We firmly believe that strategy plays
Statutory
While we are deeply motivated by management to right governance, we a pivotal role in growing in the right
the sheer opportunities around us, are learning every day and they are way. Reckoning this, we recently
as fiduciaries, we are committed to our key assets in our journey. realigned our select seasoned
grow your bank conscientiously and management team members to new
maintain its core fiber, as we scale. Like any other bank, we also strategic roles at the Bank.
faced some challenges around
Therefore, while in Assets, we will attrition. Focus on our 4D Strategy
continue to operate like an NBFC and We perceive that Data, Digital and
stay focused on secured and small Distribution are the most critical
retail loans; in Liabilities, we will aim cornerstones of value creation which
to grow within the cultural framework will allow us to deliver Delight to
of a bank. Our people philosophy is anchored around three aspects –
our customers. We believe this 4D
Financial
value proposition. It nurtures
strategya will
culture
enable usof learning
to build one and gr
It is very important for us to be
able to serve all the needs of our
and building relationships franchise.
to deliver excellence; and chall
of the most trusted retail banking
customers and therefore, on the

banking platform, we introduced Data
several new retail asset products.
Now we have a comprehensive We are building AU as a data driven
portfolio of 27 products and services. bank and data is in the heart of
As these products gain more market everything that we are doing today.
traction and scale, their contribution At the same time, we are excited
to our growth will scale up. by some of the early data-based
outcomes across customer analytics
Living our Values & Passion to (targeted campaigning), employee
Deliver analytics (attrition and productivity)
and risk analytics (early warning signs
Since our inception, we had stayed and asset quality).
focused on building the right
character of our organisation and Moreover, I am pleased to apprise you
have been driven by the core guiding that your bank features amongst one
principles of AU Dharma. of the first few companies in India to
have invested in SAS VIYA – a state-of-
Our people philosophy is anchored art scalable, enterprise-ready machine
around three aspects – Build, Connect learning /artificial intelligence ready
and Re-Imagine. These ethos are the technology tool, a big enabler of our
corner stone of our employee value value creation strategy.
proposition. It nurtures a culture of
learning and growth; collaboration Digital
and building relationships to
Acquire, Engage and Transact are
deliver excellence; and challenges
the core building blocks of our digital
the status-quo. Hence, creating
business strategy.
prosperity for all. Over the past
several years, we have granted ESOPs
16|
We are passionately expanding our

DSAs and Connectors (AU-Value, provided consumer finance loans but
digital offerings and it encompasses
AU Connect), our partnerships with went one step ahead and acted as
fully digital, assisted digital and
phygital solutions around deposits, dealers, etc. Our employee referral pick up center for the customers who
lending, payments and cross-selling. app (AU Business App) has been couldn’t get the goods delivered in
These solutions are targeted around a breakthrough for channelising their remote villages. Our customer is
offering a real time, seamless, cost employee leads and has become paramount to us and if the customer
an important alternate acquisition needs it, we will make it happen.
effective, convenient and omni
channel customised solution to our channel.
customers. Inclusive Growth
Delight
In 2018-19, your bank strengthened The first steps to empower people
Warmth of a relationship and
its digital banking team under the is to create jobs and livelihood.
excellent service delivery are two
leadership of our new Chief of Digital Growth can happen only if we provide
most important products of a
Bank and Digital Strategy. Our select people with credit. In return, it will
bank.
new digital initiatives include propel business generation.
paperless Two-wheeler loans, Tab At NBFC platform too,
based account opening, 24x7 EMIs Customer Focus was one of our Inclusiveness has been in our DNA
payments through website, key AU Dharmas and we have since our inception and it has been a
AU ABHI, etc. always had a customer-centric part of life at AU Bank. Understanding
outlook. our customers’ needs and partnering
Distribution However, being an NBFC we perceived in our borrowers’ success has been
We believe that sustainable our customer just as a ‘Borrower’. our core pursuit over the years.
business growth requires diversified To be honest, the migration of the
business channels. ‘Borrower’ to a ‘Customer’ happened Continuing our legacy, last year, AU
soon after we became a Bank. It has Bank exceeded the requirements of
At AU, we have been able to build and been the most satisfying revelation our key licensing guidelines with 79%
and we take pride in executing our loans to priority sector, 59% of our
leverage different distribution channel
viz. Physical, Digital and Alternate enhanced understanding. loans less than 25 lakh and 28% of
mode. This has been one of our core our branches at rural locations.
strengths and we intend to keep And as we wore the new lenses,
capitalising on this. we sharpened our focus to convert I am honoured to share that your
customer satisfaction into customer bank got an opportunity to
Being a new bank, physical Delight. We believe that a right undertake a number of Financial
distribution formats including combination of Data, Digital and Inclusion initiatives in the remotest
branches act as a strong branding and Distribution will allow us to deliver corners
servicing platform for our customers. Delight to our ‘Customers’ and help of the country including patronising
As we have a go-to-market strategy us differentiate between ordinary and and promoting key schemes of the
for acquisition, our new physical extra-ordinary banking. Government of India, opening of
roll-outs are strategised around high several Basic Savings Bank Deposit
visibility prominent locations with Catching the Imagination of the accounts enabling Direct Benefit
convenient access for serviceability. Customer Transfer (DBT), organising several
We will soon roll-out smaller format financial literacy camps etc.
We have endeavored to catch the
branches requiring lower set-up imagination of our customers and
and operations costs. Besides this, Moreover, to give a further impetus
have been consistently scaling up our
we will also leverage other physical to our corporate social responsibility
customer centric efforts.
formats. For onboarding and and propel focused and meaningful
servicing, the leverage will also contributions, we set up AU
Recognising the need of our rural
come from our Digital and Alternate Foundation last year. We helped
customers for consumer durables
modes like Contact Centers, BCs, our communities with need-based
finance; the Bank came up with
interventions in the domains of
a unique solution to meet their
demands. The rural branches not only
Annual Report 2018-

livelihood enhancement, financial general insurance, health insurance strategies. Lastly, I would like to
Corporate
and digital literacy and sports for and life insurance) will add to our sincerely thank all the unsung heroes.
development. income pools in future. They have been an integral part of
our journey.
We are building a resilient and trusted
WAY FORWARD institution for all citizens, which can If we grow the right way, then we
withstand the test of time; and we are build a brand. If we build a brand,
Ready for the Future
grateful for your support in this then we will be forever!
At the start of our banking grand endeavor. We are well
operations in April 2017, we had positioned to grow sustainably and
aimed to be the fastest bank to will continue to focus on delighting
reach `1 trillion Asset book with a customers, fueled by 4D strategy and
संभव की सीमा जानने
Statutory
10 million customers base. We are AU Dharma to build a bank which will
quite well placed to achieve the
first
last forever.
का केवल एक ही
major milestone of `700 billion asset
book and a customer base of around
Board of Directors तरीका है
We believe that the leadership of
5 million by FY 2022. As we scale up,
an organisation must have diverse
we will leverage our brand outreach,
digital capabilities, local insights,
experiences merging into a common असंभव से भी आगे
goal. As a custodian of trust for all our
balance sheet strength and pricing
power to optimise the risk-return
stakeholders, our Board of Directors िनकल जाना
foster a culture of sound corporate
matrix. At a broad level, we will focus
governance. Time and again we have
Financial
more on product, productivity and
engagement in FY 2019-20.
received guidance and support from
our Board of Directors and I would
चलो आगे बढ़ें
express a sincere thanks to all my
In our core asset products i.e.
present and past Board members for
Wheels and Secured Business Loans, Regards,
their immense contributions in our
we have a strong vintage, our core
journey. Sanjay Agrawal
execution USPs, strong underwriting
and collection machinery, a vast Managing Director and
unserved opportunity landscape
Acknowledgement Chief Executive Officer
and an advantage of the banking It has been a privilege for me to
platform. This should allow us steer this young bank driven by an
to compound our scale while action-oriented team. I would like
maintaining our margins and to thank our Board of Directors
profitability. Our newly introduced for
retail products- Gold Loan, Home their constant guidance and support.
Loan, Two-Wheeler Loan, and I express my humble gratitude to
digital solution-based products– RBI, SEBI, MCA, NSE, BSE, IRDAI,
Personal Loans and Consumer UIDAI, CERSAI, Government of India,
Finance for existing to bank credit information companies,
customers — depositories and other regulatory
hold immense growth potential. authorities for creating an enabling
Our Small & Mid Corporate environment for orderly development
book, which is largely focused & regulation of financial services
on working capital and non-fund sector in India. I am grateful to all
based requirements of Micro and our shareholders, investors, bankers,
Small enterprises, is shaping up vendors, technology service
well. Also, scaling up of third-party providers, partners, customers and
product distribution (mutual Team AU
funds, for partnering in our growth and
18|
Whole Time Director’s Message

Shaped by strength
and stability
DEAR SHAREHOLDERS,
bank, we have successfully navigated pull that helped us expand our
FY 2018-19 marked the second through many economic cycles and, balance sheet ~3.3 times in a short
year of our operations as a over the years, we have been able to span of two years as a bank. We are
bank. build a sustainable growing platform. overwhelmed with the customer
I am pleased to share that, despite Another important feature is our deep confidence and look forward to the
temporary hardships such as rooted leadership, well connected to countless opportunities before us in
tighter liquidity and a general their respective domains, which the coming years.
slowdown enable us to successfully map
in consumer demand, our overall scenarios and take pre-emptive CLOSER LOOK AT OPERATIONS
performance remained measures.
commendable. Consumer demand To remain a trusted custodian of
With our go-to-market approach,
was impacted due to volatile fuel public deposits, to continue to keep
strong customer connect and
prices, weak capital market sentiment the faith of regulators and
diverse range of products, we have
and uncertainties over the impending stakeholders and compliance with the
been able to maintain a robust
general elections. regulatory and policy guidelines, is
growth even in a challenging market
paramount at AU Bank. The message
Despite these challenges, we delivered environment.
is clear across all levels in the Bank
strong financial results. We have
FY 2018-19 was another year of sound that we must adhere to guidelines,
always emphasised on steady and
performance, where we expanded policies, processes and procedures, at
consistent operational performance,
our outreach to nearly 572 all point of time and ensure that we
optimum utilisation of capital and
touchpoints, grew our disbursements are growing the right way. Over 80% of
low cost of funds. We are now one of
by ~49% (to our Savings Accounts opened during
India’s fastest growing SFBs, owing to
`16,077 crore) and, in turn, grew our the year through TAB, became
our strong customer focus, high-
Assets Under Management (AUM) by operational within half an hour of
quality asset and growing liability
50% to `24,246 crore. We achieved a documentation, and it has become a
franchise.
balance sheet size of `32,623 crore. major highlight of our Bank’s success.
Our confidence stems from the It was the power of the Bank’s
fact that first as an NBFC and then platform
as a
We are focussing on the 4D (Data, Digital, Distrib

Besides, using analytics we will develop apps for
Uttam Tibrewal
Whole Time Director
Annual Report 2018-

We are focussing on the 4D (Data, space. We are also putting
to use 360° communication across multiple
Digital, Distribution and Delight),
digital and social media platforms to create
where we are analysing our existing
impactful brand awareness.
data to be able to serve our
customers better. Besides, using
analytics we will develop apps for our CROSS-SELLING IS CRITICAL
customers, which would be delivered
We aspire to grow as a holistic service provider in
to them on the digital platform.
the banking and financial sector. We believe
We are offering some of the best cross-selling will allow us to grow in diverse
asset and liability products in the business segments. For example, we handhold a
industry, and that too within 24 car loan buyer to opt for a Savings Account or an
months of commencement of our insurance policy to build on an existing
operations. relationship. Our teams have comprehensive
Consequently, every month we are knowledge of our products, and we actively
adding on an average 40,000 to 50,000 propose these products to our customers, once
customers. As on 31st March 2019, we we find someone interested.
had 12 lakh+ customers. As we grow the scale and scope of the business,
cross-selling is going to be a very important
CUSTOMER DELIGHT IS PRECIOUS fulcrum of our progress. At present, our Bank
has 27 product offerings for our customers,
Our strategy is to match up to
which have very attractive features. Cross-
customers’ expectations with a
selling also provides our customers a wider
balanced and uniform approach.
brand experience.
Every prospective customer, who
visits our branches or events or via During the year, we introduced the Employee
medium of lead or via inbound call Business Referral (EBR) App, through which our
centre employees can refer any prospective customer to
or through digital channels or even respective team member and on conversion, the
when we visit them, expects a referrer earns an incentive. The EBR model helped
uniform customer service from us. us garner business of around `1090 crore during
We are also driving ourselves to the year under review. Moreover, this has
become the first choice of our elevated the involvement of our people with the
customers for all their banking Bank and is helping them become a complete
requirements. banker.
As a service-oriented business, FUTURE GROWTH PILLARS

the success of a bank depends
on The pillars of our future growth comprise
providing timely and bespoke services. the following:
To deliver best-in-class services to • Gaining momentum in our digital channels
our customers, it is essential that while maintaining balance in ‘phygital’
we understand their expectations channels
and remain honest, agile and true
to our • Sustain our ‘go-to-market’ approach with
overarching mission of building one efficient time management
of India’s largest retail franchises.
DIGITAL EASE
Our focus is to deliver a seamless
omni-channel integrated solution
that will ensure consistent high-level
customer experience across all
channels (website, internet banking,
mobile applications). This will
further ensure that we scale our
operations faster by taking
advantage of technological
development in digital banking
20|
• Remain relevant and
aligned to evolving
customer requirements
Growing the right
by constantly way
learning,
Corporate
reinventing
AU and Bank
Small Finance
challenging the status
quo
• Build a strong artificial
intelligence (AI) and
machine learning
platform for greater
business insights and
smarter decision-
making
• Adherence to the
rules and
regulations
Statutory
applicable on Small
Finance Bank
We aspire to become a
universal bank in the
foreseeable future. We are
on the right path to grow
responsibly and
sustainably to create value
for all our stakeholders.
I express my sincere
thanks to the Reserve Bank
of India (RBI), the Securities
and Exchange Board of
India (SEBI), our Board
members, AU team
Financial
members and all other
stakeholders for
supporting us in our
journey of growth.
Warm Regards
Uttam Tibrewal
Whole Time Director
Annual Report 2018-

Stable
For over two decades, we

have successfully navigated
multiple economic cycles and
have emerged as a stronger
and more stable franchise.
Our differentiated business
model has enabled us to
continuously strengthen our
asset quality and profitability.
Our esteemed investors have
always reposed their faith in our
value-accretive business model
and execution capabilities.
We remain anchored to our AU
Dharma of customer centricity,
hard work and eye for detail,
ownership, nurturing talent,
urgency and integrity.
These attributes have propelled
our growth for more than 20
years in the secured asset
financing business and enabled
us to take the leap on to the
banking platform.
20|
The only small
finance bank with two
decades of secured
retail asset lending
track record High governance
standards
Contiguous
FACETS OF expansion and
STABILITY deeper penetration
Consistent delivery of
robust returns
Trust of esteemed
shareholders
AU Journey
Stable franchise with an
impeccable track record
FY 96
to FY 04 to
FY 03 FY 07 FY 08 FY 09 FY 10
24 years
of an
impeccable Fund Channel NBFC- Asset Finance Company
journey Manager Partner
Bill Vehicle SBL -

discountin Finance MSME*
g and
Expanding vehicle
finance
product
portfolio
Rajasthan Maharashtr Gujarat

a
Contiguous
expansion
HNI@ International
investors Own Motilal Finance
Funding Oswal Corporation
Investors
confidence
*
Micro, Small and Medium Enterprises, ^Small and Medium-sized Enterprises, @High Net-worth Individuals
24|
Corporate
Our Bank thrives on stakeholder trust and service excellence. We have
steadily expanded our capabilities and outreach as a retail-focussed non-
banking finance company and we are now leveraging the power of the
banking platform to touch and transform the lives of millions across the
social spectrum.
Statutory
FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19
Small Finance Bank
Financial
Housing
Finance NBFC SBL –SME^ CA, SA,
Company Financing Construction Deposits,
(Subsidiary), Lockers,
Payments &
Insurance Broking Settlement, third-
(Associate) party products
(Insurance and
Mutual Funds),
Home Loan, Gold
Loan, Consumer
Finance, Business
Banking
Madhya Chhattisgarh Delhi Haryana,

Pradesh, Himachal Pradesh
Punjab
and Goa
Warburg
Pincus Chrys Kedaara Life IP Temasek
Capital Capital Insurance O Holdings
Companies,
HNI’s,
Employees
Annual Report 2018-

Business Model
Stable growth blueprint
RESOURCE MODEL
Capital
We have built a net worth of
`3,163 crore as on 31st March 2019. We
are supported by reputed global and Our approach
domestic investors. Design product offerings
keeping in mind the dual
objectives of customer
Team
convenience and cost
A team that combines high performance and
optimisation
ethical behaviour and are empowered to deliver
exceptional client experiences.
Products
We offer a host of 27 financing, deposit,
insurance, mutual fund, transaction banking and
digital banking products and services.
Distribution
We have created a ‘phygital’ distribution
ecosystem with 572 physical touchpoints and
strong digital franchise, providing exceptional
customer experience at every touchpoint.
Brand
Brand AU has garnered significant brand value
over the last two decades for customer centricity
and trustworthiness.
Local expertise
We have deep insights and understanding of the
local markets as we operate through local talent.
Strong governance framework

Our governance and risk frameworks are
integrated across our operations. This enables
enhanced accountability, effective risk
management, clear performance management,
greater transparency and effective leadership.
Management
Experienced and committed leadership team is Our approach
focussed on consistently growing the Bank. To have a sizable retail deposit
base including CASA and Term
Deposits; to densify in our
existing markets and foray into
newer strong deposit clusters
26|
We aim to create long-term value for a broad range
Corporate
of stakeholders in a sustainable manner.
VALUE CREATED FOR STAKEHOLDERS
governance and ethics

Customers
• Understanding and catering to
the requirements of our
Our approach customers
To remain focussed on • Providing personalised and
core retail segments with comprehensive financial
emphasis on contiguous services offering
deeper expansion in our • Empowering our people to
existing geographies provide an excellent and
consistent
client experience
• Ensuring faster and safer
transactions by accelerating
innovation and digitisation
12 LAKH+
Customers
Employees
• Attracting and retaining
committed people with right
skills and capabilities
• Enabling our people to be agile,
adaptive and relevant in a
rapidly evolving environment
• Encouraging
diversity and inclusion
• Deploying local manpower
from the regions in which we
operate
• Creating an environment of
growth through consistent
training, mentoring
and participation
1,472
New members added
in FY 2018-19
Regulators
• Conducting our business in
a responsible manner
• Adhereing to relevant regulations
and guidelines issued by RBI,
SEBI, National Bank for
Agriculture and Rural
Development (NABARD), National
Housing Bank (NHB) and other
regulators
• Strong internal culture of
Annual Report 2018-

Shareholders and practices Foundation to enhance livelihoods
investors • Exploring more through skill development, improve
Statutory
• Focussing on consistent returns opportunities to financial literacy to bolster
generate financial inclusion and nurturing
• Maintai
shareholder sports talent
ning
the wealth • Undertaking several other
initiatives aimed at
`0.75
resilien
ce of empowering the marginalised
our sections of
Proposed dividend per share
balanc the society by providing potable
for FY 2018-19
Financial
e sheet water, affordable healthcare and
quality education
• Safeguar
Community
ding
value • Accelerating 2 LAKH
with financial inclusion Lives impacted through our
sustainab in the regions in social initiatives and
le which we operate financial inclusion drives
business • Incorporated AU
r
t
a
26|
Investment Case
Stable value proposition
DIFFERENTIATED BUSINESS
MODEL STRONG LIQUIDITY AND ROBUST ASSET QUALITY
CAPITAL ADEQUACY
In assets, our differentiation lies Over the years, we have developed
in small ticket, secured, retail Our Bank has maintained healthy expertise in correctly assessing the
lending for income generation liquidity and comfortable capital repayment capacity and intent of
adequacy, which are commensurate our borrowers. Our underwriting
catering to self-employed and low
with our growth aspiration. practices are strengthened using
& middle-income segments and
For FY 2018-19, our average liquidity best-in-class standard operating
risk-based pricing mechanism.
coverage ratio was comfortably procedures (SOPs), deploying local
As a Bank, we have sharpened
higher than the regulatory sales and collection workforce and
our edge by expanding our retail
requirement of a minimum of in-field investigation, among others.
asset offering for a wide customer
cross-section. 70% for SFBs till December 2018
and 80% from 1st January 2019 The result: our asset quality has
Similarly, our liabilities franchise onwards. Our capital adequacy remained stable, and we are
ratio (CRAR) stood at 19.3% as on improving it further.
is credited with unique first-time
initiatives, including monthly 31st March 2019 (CRAR Tier I:
interest pay-outs on Savings 16.0%
Account, paperless and digital and CRAR Tier II: 3.3%) as against
customer acquisitions, no ‘home the regulatory requirement of 15.0%.
branch’ concept, extended banking
hours, no slips for cash deposits or
(%)
withdrawal and no form for Real
ASSET QUALITY TREND
Time Gross Settlement (RTGS). 36.8 37.6 37.6 37.4
Moreover, we have put in place a
specialised business solution group
to cater to transactional banking
2
2
requirements of our MSME,
business banking and small and
medium enterprise customers.
1
1
1
~52%
Customers are self- Q1 Q2 Q3 Q4
employed (including FY 19
professionals) Gross NPA*Net NPA Provision coverage ratio
*Non-Performing Asset
~97%
Secured Advances to
Total Gross Advances
Annual Report 2018-

LEADERSHIP THROUGH Moreover, we are also
Corporate
DEPOSITS -
GOVERNANCE AND GROWTH leveraging analytics optimally to GEOGRAPHIC DISTRIBUTION (%)
service our
Our Board is constituted customers better, further improving
majority by independent our credit quality and strengthening
14
Directors, ensuring high efficiency across processes.
corporate governance standards. 25
We are led by our Promoter, We are consistently investing to
MD & CEO Mr. Sanjay Agarwal, bolster our digital assets and provide 11
a first-generation entrepreneur. our customers a wide repertoire
of digital services, which are fast,
Our senior leadership team
convenient and secured. Such a 5
possesses rich experience in the 9
strategy enables us to reduce our
banking and financial services
Statutory
cost of aquisition and operations,
sector, which has helped us deliver
expand our reach and increase our 5
value in challenging business
productivity per customer.
conditions as well. 31
11 CONTIGUOUS GEOGRAPHIC
PRESENCE
Rajasthan
Madhya Pradesh
Maharashtra
Delhi
Punjab
Others
Board-level committees, We have adopted a strategy of Gujarat
ensuring good governance contiguous expansion across
practices regions. Our operations are
conducted through 572 touchpoints MARQUEE SHAREHOLDER BASE
spanning 11 states and a union
19 YEARS The strength of our business model
Financial
territory, with significant presence
has attracted several distinguished
in Rajasthan, Gujarat, Maharashtra
Average experience of our and Madhya Pradesh. These regions investors in our journey since
senior managment team inception, including Temasek
offer high-growth opportunities for
banking services. Holdings, Nomura, Warburg Pincus,
IFC, Motilal Oswal, Chrys Capital and
Kedaara Capital, among others.
FORTIFYING ‘PHYGITAL’
BANKING
GROSS AUM -
SHAREHOLDING PATTERN (%)
We understand the power of a GEOGRAPHIC DISTRIBUTION (%)
strong digital bank as it will serve
various customer segments 4 3 2.86 1.73
5.31
providing delightful customer 6
experience in a cost-effective 8.64 32.19
manner. Our digital banking strategy 11
is to achieve an optimal integration
of our physical and digital presence, 49
10.92
thereby managing the dual objective
of investing and profitability of this
vertical. 13
14.59
Our investments in digital
13 23.76
platforms are focussed on four key
areas: lending, deposits, wealth
Rajasthan Delhi Promoter & Promoter Group
management and payments.
Madhya Pradesh Punjab Foreign Portfolio Investors
Within these, we are focussing on
Maharashtra Others
automating some of our existing Foreign Company
Gujarat
processes and products such as Mutual Fund
auto loans, customer on-boarding, Individuals
KYC, and disbursements, among Bodies Corporates
others. Insurance Companies

Others
28|
Operational Highlights
Every quarter takes us ahead
TOTAL BALANCE LOAN ASSETS UNDER

(` in crore) DISBURSEMENTS (` in crore) (` in crore)
SHEET ASSETS MANAGEMENT
17,7
20,2
21,7
24,2
20,9
24,7
27,8
32,6
2,
4,
4,
5,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 19 FY 19 FY 19
1
• Empanelled with India’s largest insurer LIC for
offering our branch banking products at LIC’s pan-
2
• Long-term rating upgraded to CRISIL AA-/Stable from
India offices CRISIL A+/positive and short-term rating re-affirmed
at the highest rating of CRISIL at A1+
• Commenced Public Fund Management System (PFMS)
application to manage public fund distribution • Empanelled BSE, NSE, NCDEX for margin collaterals –
Fixed Deposit Receipt (FDR) and Bank Guarantee
• Launched AU ABHI – the new-age instant
digital savings bank account opening • Expanded deposits footprint with entry into
application ‘Miniratnas’ and ‘Navratnas’
• Made corporate internet banking available for all • Complied with Small Finance Bank (SFB) guidelines
business segment customers on account of non-promoter shareholding (Warburg
Pincus stake reduced to 7%)
• Received ~`1,000 crore equity investment
from Temasek Holdings to fuel ‘phygital’ • Strengthened leadership with the induction of new
growth Chief Treasury Officer, Chief of Digital Bank and
Digital Strategy and the National Credit Manager -
Housing Loan, among others
Annual Report 2018-

Corporate
DEPOSITS (` in crore) NET INTEREST (` in crore) TOTAL (No.)
INCOME CUSTOMERS
10,30,7
11,92,8
13,65,9
15,23,9
Statutory
12,8
14,6
19,4
9,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 19 FY 19 FY 19
Financial
3
• Invested further in digital bank; hired
4
• New loan disbursement IRR inched up by 50bps,
for most key roles
led by a strong uptick in retail assets disbursement
• Added ATM services in 193 locations in collaboration yield at 15.2% in Q4 FY 2018-19 as against 14.5%
with RajCOMP Info Services Ltd. (RISL) and Cash in Q3 FY 2018-19
Management Services (CMS) in Rajasthan as a
• Portfolio IRR was stable at ~14.3%; retail assets
banking partner
continued to be ~82%; vehicle portfolio climbed to
• Raised `500 crore Tier II Capital through over `10,000 crore
private placement of non-convertible bonds
• Mobilised `1,100 crore plus in retail Term Deposits
• Launched a new version of our mobile banking app
30|
Scalable
Over the years, we have
maintained a consistent
performance trajectory, building
on our achievements and
fine-tuning our approach with
our experience and progress.
The result is a growing edifice
of value creation with multiple
synergies.
We have the right pivots to
grow, capitalising on the
industry’s vast opportunity
landscape. Our investments in
products, services, technology,
infrastructure, processes and
talent pool give us a significant
headroom to scale up.
We connect with customers
through various
touchpoints (pan-India
branches,
asset centres, business
correspondents and ATMs).
At the same time, we are
building a digital team for
our next growth phase.
Vast
opportunity
landscape
Building a
future-ready
digital bank
ELEMENTS OF
SCALABILITY Consistent
performance
trajectory
Well-spread and
growing physical
distribution
network
Megatrends
Blue ocean of opportunities
SECTORAL OPPORTUNITY LANDSCAPE
MARKET MARKET SIZE
New vehicles 262 lakh

Vehicles sold in FY 2018-19*
New Passenger Vehicle (PV)

33.77 lakh
New Commercial Vehicle (CV) 10.07 lakh

New two-wheelers
212 lakh
Used car 40 lakh

Vehicles sold in FY 2018-19^
Micro, Small & Medium Enterprises (MSME) 630 lakh

Registered MSMEs as on 31st March 2018#
Gold
20,000 tonnes &
Of gold valued at over `56 lakh crore in India
Housing loan
`7.5 lakh crore st
Overall market size as on 31 March 2018>
`125.58 lakh crore

Deposits Outstanding in schedule commercial banks
as on 31st March 2019<
`11.89 lakh crore
Current Account (CA) Outstanding in schedule commercial banks
`41.15 lakh crore
Savings Account (SA) Outstanding in schedule commercial banks
`72.55 lakh crore
Term Deposit (TD) Outstanding in schedule commercial banks
Source: *Society of Indian Automobile Manufacturers (SIAM), ^ India Bluebook, #The Ministry of Micro, Small and Medium Enterprises,
&
KPMG Report and World Gold Council, >National Housing Bank and <Reserve Bank of India (RBI)
Annual Report 2018-

Corporate
Operating in such a stellar opportunity landscape, we see a larger
role for ourselves in helping facilitate safe, secured and next-
generation banking.
Statutory
NOTES
AU BANK’S RESPONSE
7.4%
CAGR for past 5-years (FY 2014-15 to FY 2018-19)
6.2% • Building a strong digital bank by

CAGR for past 5-years (FY 2014-15 to FY 2018-19) adding best-in-class digital
assets
9.7% • Fortifying our best-in-class

CAGR for past 5-years (FY 2014-15 to FY 2018-19) technology and robust
operational efficiency driving
Financial
better productivity
5.8%
CAGR for past 5-years (FY 2014-15 to FY 2018-19) • Driving proactive use of analytics
in steering better credit decisions,
5.0% customer service and collections,
CAGR for past 5-years (FY 2015-16 to FY 2018-19) higher new customer acquisition,
smoother onboarding process and
`25.80 lakh crore greater cross-selling opportunities
Addressable credit gap • Leveraging our deep credit
capabilities and growing with
`3,10,100 crore strong market insights in the
Projected market growth by 2020 geographies we operate
• Scaling new verticals like gold
4.3 crore loans, home loans, two-wheeler
Shortage of homes loans and consumer finance
• Expanding physical distribution
`37,500 crore
Share of small finance banks (SFBs) at new locations
• Continuing engagement
`1,813 crore with customers to
Share of small finance banks (SFBs) understand their evolving
requirements and cater to
them
`7,232 crore
Share of small finance banks (SFBs) with relevant solutions
• Empowering people with bespoke
`28,454 crore training and tools for offering
Share of small finance banks (SFBs) customised solutions
34|
Key Performance Indicators

Scaling benchmarks
Profit and loss metrics AU Small Finance Bank

Au Financiers
TOTAL INCOME (` in crore)

NET INTEREST INCOME (NII) (` in crore)
Surge
Growth in our total income was driven by rising contribution from growth both in our vintage in Net Interest
business Income
and other (NII)
income growth suppo
streams.
4
9
7
1,
1,
1,
2,
3,
~58% FY 15FY 16FY 17FY 18 FY 19

~43%
FY 15FY 16FY 17FY 18 FY 19 y-o-y growth y-o-y growth
PROFIT AFTER TAX (PAT) (` in crore) EARNINGS PER SHARE (EPS) (`)
Net profit grew on account of rise in business scale and a marginal improvement in cost-to-income ratio.
5
9
1
FY 15FY 16FY 17FY 18FY 19

~31% FY 15FY 16FY 17FY 18FY 19
28%
y-o-y growth y-o-y growth
* PAT is including profit from exceptional items.
Annual Report 2018-

Balance sheet metrics AU Small Finance Bank
Corporate
Au Financiers
NET WORTH (` in crore)

RETURN ON AVERAGE ASSETS (ROAA) (%)
Internal accruals Despite being in the investment mode, we

constitute a significant
1
8
portion of net worth.

1,
1,
2,
3,
Our net worth of

`3,163 crore as on
31st March 2019,
includes capital infusion
of `475 crore received
Statutory
from Temasek Holdings
in Q2 FY 2018-19.
FY 15 FY 16 FY 17 FY 18 FY 19
39% 56 bps
y-o-y growth FY 15FY 16FY 17FY 18FY 19 y-o-y growth
RETURN ON AVERAGE EQUITY (ROAE) (%) CAPITAL ADEQUACY RATIO (%)
Strong
Despite being in the investment mode, we delivered a healthy RoAE of ~14% right in the first Capital
two years of Adequacy,
our bankingsignificantly
operations.abov
1
1
2
Financial
FY 15FY 16FY 17FY 18 FY 19
35 bps FY 15FY 16FY 17FY 18FY 19
y-o-y growth
CAPITAL ADEQUACY RATIO - TIER I (%)
Strong Capital Adequacy, significantly above the statutory requirement

1
of 7.5%. Consumed 240 bps of Tier I capital to drive growth.
FY 15FY 16FY17FY 18FY 19
Note: Above nos./% have been inserted on the basis of latest regrouped/recast/restated nos./% as required.
36|
Key business metrics AU Small Finance Bank

Au Financiers
GROSS AUM (ON AND OFF BOOK) (` in crore)

DISBURSEMENTS (` in crore)
Gross AUM climbs by more than 50%, led strong growth in retail assets. Robust growth in new loan disbursements
10,7
16,1
24,2
10,8
16,0
5,
8,
3,
5,
6,
FY 15FY 16FY 17FY 18 FY 19
50% FY 15FY 16FY 17FY 18 FY 19
49%
y-o-y growth y-o-y growth
Asset quality metrics AU Small Finance Bank

Au Financiers
GROSS NPA (%)

NET NPA (%)
Consistent asset- quality, despite a Stable NPA reflects the Bank’s robust risk-management framework.
challenging environment.
1
FY 15FY 16FY 17FY 18FY 19 FY 15FY 16FY 17FY 18FY 19
Business mix in FY 2018-19

ASSET (%) LIABILITY (%)
1
Retail assets Term Deposits
17 Wheels 21
42 CASA
Small business loans (MSME) Small business loans (SME)
32
Others Retail Assets
Small and
medium corporate 4
Money Market Lending 4 by Treasury
We have a branch deposit base

We are focussed on retail with a diversified portfolio. of `17,079 crore. About ~41%
82 of Term Deposits are non-
79
callable.
Note: Excluding Certificate of Deposits
Annual Report 2018-

Operational metrics
Corporate
AU Small Finance
Bank Au Financiers
COST-TO-INCOME RATIO (%)
Surge in cost- to-income ratio due to bank

transitioning cost, however it declined in Q4 (58.3%)
3
Statutory
334 bps
y-o-y growth
LIVE CUSTOMER ACCOUNTS (No.)
Number of customer accounts has grown across our asset and liability franchises.
Financial
1,523,9
335,6
435,7
556,8
8,89,

71%
y-o-y growth
EMPLOYEE STRENGTH (Nos.)
Added 1,472 new employees.

11,1
12,6
3,
5,
8,

13%
y-o-y growth
Deeper Outreach
Expanding
distribution network
Over the years, we have successfully adopted a strategy of
contiguous expansion across regions. This has enabled us
to grow our footprint across 11 states and Union Territory.
Our long standing track record of serving the unserved
and underserved has yielded strong customer loyalty.
We have followed a contiguous expansion strategy,

enabling enhanced operational efficiency and optimal
turnaround time. Over 62% of our branches are now in
rural and semi-urban areas (Tier 2 to Tier 6).
NEW BRANCH EXPANSION

During the year under review, we received the RBI’s approval for 142 new banking
outlets and identified 27 key locations, including in Mumbai, Delhi and Pune for roll
out in first phase in FY 2019-20.
OUR DEEP DISTRIBUTION OUTREACH ENSURES
1
3
Strong customer
connect Ease of operations
2
Strong referral 4
checks and credit Local employment
assessment generation
v
Annual Report 2018-

GROWING PAN-INDIA PRESENCE
Corporate
CHANDIGARH
PUNJAB
DELHI/NCR
HIMACHAL
PRADESH
UTTAR PRADESH
Statutory
HARYANA
RAJASTHAN
Financial
MADHYA PRADESH
GUJARAT CHHATTISGARH
GOA
MAHARASHTRA
Branch distribution (%)
Metropolitan Urban Semi-urban Rural
12 26 32 30
40|
Total
Rural/ Asset
Metropolitan Urban Semi-urban Rural branches
Unbanke centres
d and BOs
States Tier 1 Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Tier Tier 6
5
Rajasthan 16 23 19 43 21 3 3 - 84 212 31
Madhya Pradesh 5 16 7 9 - - - 1 16 54 9
Gujarat 8 20 4 5 3 - - - 2 42 14
Maharashtra 12 16 6 2 1 - - - 3 40 12
Punjab 1 11 4 2 - - - - 3 21 6
Haryana 1 11 1 1 - - - - 7 21 3
Chhattisgarh 1 4 - - - - - - - 5 2
Delhi/NCR 5 - - - - - - - - 5 5
Himachal Pradesh - 1 - 2 1 - - - - 4 1
Uttar Pradesh 1 1 - - - - - - - 2 -
Chandigarh - 1 - - - - - - - 1 -
Goa - - 1 - - - - - - 1 -
Total 50 104 42 64 26 3 3 1 115 408 83
Branch Distribution 12% 26% 32% 30 100%

%
*322 bank branches; 86 BOs, 83 Asset Centres and 67 BCs. In addition to 292 ATMs, we have commenced operation of 251 ATMs in
collaboration with RajCOMP Info Services Ltd. (RISL)/Cash Management Services (CMS).
OUR TARGET CUSTOMER SEGMENT
Liabilities
Assets
Individuals and Hindu

Individuals and HUF
Undivided Family
Government Organisations, Private Corporates,

Cooperative Banks and Trusts AU Target
Segment
Small and medium business Small, self employed business segment
Annual Report 2018-

WIDENING DISTRIBUTION
Corporate
We are focussing on direct and in-house distribution for business sourcing. We are also developing multiple
alternative channels to broad base our business channels.
MULTI-CHANNEL DISTRIBUTION
DISBURSEMENTS FY 2017-18 (%)

DISBURSEMENTS FY 2018-19 (%)
2 0.1 0.1
6
11
7
2 2
Statutory
19
24
61
66
Sales Executives
Sales Executives
AU Value – Dealerships & equivalent
AU Value – Dealerships & equivalent
Financial
AU Connect – Referrals & equivalent
AU Connect – Referrals & equivalent
Telemarketing
Telemarketing
Employee Cross-sell (including AU BUSINESS mobile application)
Employee Cross-sell (including AU BUSINESS mobile application)
Banking Outlet (BO) & Business Correspondents (BC)
Digital
During FY 2018-19, 4% of our asset & liability business was
42|
Digital Footprint
New-age banking
At AU Bank, we have laid the foundation of a reliable digital presence to serve
various customer segments with speed, precision and safety. Our digital
strategy is to build a future-ready bank, offering omni-channel, convenient
and cost-effective solutions to customers and automate a large part of the
current business processes.
INDIA IS INDIA OPPORTUNITY LANDSCAPE

EMBRACING DIGITAL
41% 3X
With 566 million internet users, India
is the second largest online market,
second only to China (Source: World
Bank). A large proportion of Indians Growth in queries for Rise in queries for
are seeking online banking solutions, Savings Accounts ‘Savings Account interest rate’
as internet users across the country
grew significantly in the last few
years. Digital adoption is now being 2X 2X
propelled by rural India, registering Increase in queries for Surge in queries for
a 35% growth over the past year. ‘online Savings Account Business Loans
Internet users grew by 7% in urban opening’
India, reaching 315 million in 2018.
India is estimated to have over 800
million mobile phone users in 2019
(Source: Statista). 55% 1.5X
Rise in searches for Growth in queries for
SME loans Small Business Loans
60% 61%
Surge in queries for Increase in queries
Home Loans for Personal Loans
(Source: Google Year in Search, 2017)
DIGITAL STRATEGY
We have a three-step digital strategy for our customers.
1. Acquire
2. Engage 3. Transact
We are targeting customers with
We will provide customers We are gradually moving towards
digital marketing campaigns
contextual and convenient services providing an entire bouquet of
conducted through internet or
supported by big data, machine payment options including Unified
mobile banking app. Our customer
learning and artificial intelligence. Payments Interface (UPI), UPI 2.0,
acquisition model is propelled by
Our objective is to integrate our Immediate Payment Service and
a fully digital, assisted digital and
digital offerings with our customers’ Bharat Bill Payment System for a
phygital model.
daily requirements such as travel seamless experience.
booking, cab and food booking, e-
commerce services and other
financial transactions.
Annual Report 2018-

OUR WHOLESOME CUSTOMER ACQUISITION MODEL
Corporate
Fully digital
Statutory
Assisted digital Phygital
Customer completes the
Digital contact centre to assist On-ground sales team to
entire journey on digital
customers facing difficulty complete the digital journey
channels without any
in completing the journey initiated by the customer
assistance from our Bank
with guided instructions through physical presence
for self-fulfilment module
• Hiring the right talent and creating DOWNLOAD AND EXPERIENCE

BOLSTERING THE DIGITAL
an omni-channel experience OUR AU MOBILE APP
PARADIGM
across various touchpoints
• Key products that we are
Financial
• Onboarding people with
offering through the digital
banking, non-banking and
platform are Savings Account,
fintech experience for new-age
Term Deposits, Two-wheeler
banking solutions
Loans, Consumer Finance and
Personal Loans. • Crafting synergies with
We intend to craft delightful existing structures for a
customer journeys through our uniform banking experience
digital footprint.
• Driving a shared vision to be the
best-in-class digital bank
AU BANK’S DIGITAL VALUE PROPOSITION PLAN
Digital Lending
Low cost of acquisition
Digital Strategy
Digital Analytics
Low operating cost
Digital Liabilities
Digital Tech Solutions Better and omni channel
Digital Initiatives customer experience
Digital Payments
Digital Contact Centre Increase productivity
Digital Wealth Management and profitability
Digital Customer Experience
Higher outreach
Digital Customer Service
Digital Marketing
Paperless banking on-the-go
44|
OUR DIGITAL FOOTPRINT
TAB-BASED PAPERLESS ONBOARDING -

(Nos.) INCREASING DEBIT CARD
SAVINGS ACCOUNTS OPENED (Nos.)
PENETRATION
71% 71% 71%

91,5
90,8
88,9
94,8
13,6
15,2
12,8
62%
9,
654,1
574,8
498,1
361,6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 19 FY 19 FY 19
TABTraditional No. of active debit card users

Debit card penetration
DEBIT CARD TRANSACTION ALTERNATE DELIVERY CHANNEL

VOLUME (in ‘000’s) TRANSACTION (` in lakh)
4
1
6
5
1
6
5
6
6
6
1
7
1,
1,
1,
8
Q1Q2Q3Q4 FY 19
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 19 FY 19 FY 19
AU BANK ATM Network Shared Network POS & ECOM transactions Total CBS transaction
Total ADC transaction
~2,400 ~7.7 LAKH

TRANSACTIONS WORTH
POS MACHINES INSTALLED
`120 CRORE IN FY 2018-19
Annual Report 2018-

Corporate
INTERNET & MOBILE BANKING INTERNET & MOBILE
TRANSACTIONS (` in crore) BANKING USERS (Nos.)
17
3,366
13 2,022 2,523
1,634
302,9
10
8
Statutory
227,0
1,
181,9
1,
Q1Q2Q3Q4 FY 19 147,0
Q1Q2Q3Q4 FY 19
8
6
Mobile & Internet Banking transactions No. of Mobile & Internet Banking transactions
Mobile & Internet Banking transactions Avg. No. of Mobile & Internet
Financial
per day Banking transactions per day
CONSUMER FINANCE ONLINE LEAD GENERATION

We have started offering We started an online lead generation and tracking application for our
Consumer Finance through employees.
online (paperless) channels.
We facilitate online sourcing AU BUSINESS APPLICATION FOR LEAD GENERATION IN FY 2018-19
through our technology
partners covering e-commerce
portals. We have signed up
with a partner to improve rural
product availability. We also
have an offline digitally assisted
model at our branches.
46|
Leads converted Value of business
(No.) (` in crore)
Retail assets
Growing the right way 9,884 614.0
Liability business leads 39,891 139.0
AU Smallbanking
Business Finance Bank 376 337.0
Total 50,151 1,090.0
Annual Report 2018-

Data and Analytics
Harnessing the power of data
We are progressively leveraging the abundance of data within our system
and the external world to design products and experiences that are
customised
to their needs.
Business
Consumer
• Monitoring • Improving
and transparency prospect acquision
• Identifying growth areas • Understanding
• Assisting in the consumer
decision- • Enhancing
making consumer experience
• Executing • Realising
seamlessly consumer lifetime value
BENEFITS OF
ANALYTICS ACROSS
THE VALUE CHAIN
Employees Risk
• Recruiting • Identifying risks
• Understanding • Quantifying risks
the workforce • Mitigating risks
• Training and retaining • Safegaurding
• Increasing productivity the organisation
48|
Corporate
STRENGTHENING THE DATA
ANALYTICS INFRASTRUCTURE We foresee data analytics as a Collections and risk analytics
crucial element in our growth
We are building a robust data • Predicting default for early vintage
story, helping us scale in the most
and analytics architecture at the customers through Probability
cost-effective way through:
Bank. We completed Extraction of Default Model
Transformation Loading (ETL) • Acquisition of new customers • Identifying customers with
Statutory
implementation—Oracle Phase I and implementing a faster high/low contact-ability through a
— for faster retrieval of clean data. customer on-boarding process Customer Contact-ability Model
We also adopted an interactive
• Credit decision-making • Recognising customers who are
dashboard—Oracle OBIEE Phase 1—
for automated, interactive, scalable going to pay in a given month
• Customer servicing
and secure dashboards that cater to —current, 1st and 2nd bucket—
• Collections and cross-selling through collection predictability
ever-increasing reporting needs of
the organisation. • Optimising collection allocation,
APPLICATION OF ANALYTICS
based on collectability of customer
We are also preparing for artificial
ACROSS FUNCTIONS
• Pricing of Consumer
intelligence (AI) and machine Business analytics
learning (ML) readiness by Finance based on risks
Financial
• Operating loan origination
implementing SAS VIYA, which will • Simulating collection roll rates,
propensity models for wheels and
enable us to be future-ready for AI/ right up to the 12th bucket
small business loans
ML adoption.
• Using POD and propensity
Human resources analytics
DEVELOPING THE ANALYTICS models to identify the right set • Tracking employee attrition,
TEAM of analysis and prediction
customers for cross-sell campaigns
We are building a team of • Using Roll Rate
professionals to enhance our • Utilising historical data simulator for ACR
forte in customer analytics, risk analysis to align incentive prediction and
analytics, people analytics, policies manpower planning
digital analytics, data distribution with business goals
• Mapping employee performance
and • Identifying the best unbanked to help them grow and
competency. We are recruiting from locations for opening branches contribute to organisational
Tier I engineering and management through location analytics growth
institutions to build a robust team.
• Operating loan application
CAPTURING QUALITY DATA

scorecards and auto-approve
algorithms designed for
wheels, already deployed for
E 50 crore+
We are focussed on quality data Business sourced
capturing at the source and training Consumer Finance through analytics driven
our people on the importance • Identifying and tracking programme in its first
of data. We are building a strong repeat purchase year of operation
culture and conducting awareness
• Profiling customers from
programmes on importance of
various source systems Data is precious.
data, which along with other steps
is helping us lay the foundation for • Recognising key business It is going to last longer than o
quality data analytics. drivers—Product Per Customer
(PPC)—with customer-centric
people, processes and system
business approach
Annual Report 2018-

AU Small Finance Bank Limited
Bankabl
If our customers aspire for
Our business mandate is to
something, we make it happen.
mainstream the financially
We go the extra mile and
disadvantaged. Besides our
work beyond banking hours to
business teams, our CSR arm
reassure our customers that
(AU Foundation) also works
we care, resulting in deeper
for strategic community
customer trust and more
development.
repeat business.
Our comprehensive product
Our teams are our true
portfolio, focus on customer
brand ambassadors who are
convenience, compliance &
hired from communities we
risk management framework
operate in. We are driven by a
and building trust through
dynamic leadership and robust
community, marketing and
governance framework.
CSR initiatives make us a
bankable brand.
Annual Report 2018-19 48|

Corporate
Statutory
Strong brand
prominence in
geographies that we
are present in
Experienced
Financial
and dynamic
team of
bankers
BANKABLE
Robust and PROPOSITION
credible risk
management
Diligently
fulfilling social
commitments
as a
responsible
bank
50| 51
Brand AU
Crafting a reliable brand
Our branding initiatives revolve around showcasing our key brand
attributes that we have nurtured over the years. These attributes
are reliability, equality, transparency, convenience and customer
centricity. We are strengthening our brand salience through various
impactful activities and communication.
MARKETING THROUGH SOCIAL

ENGAGEMENTS
AU Bank marketing connect is a
year-long marketing programme,
which reaches people residing in
the vicinity of our bank branches.
The initiative touches 11 states and
Union Territory where we operate.
The objective of this project is to
build an emotional connect with
customers and provide a platform
for our team to pitch our products
and services. In FY 2018-19, we
reached over 1 lakh customers
through various social engagement
programmes including:
AU Bank SMS Gold Vase Polo

Tournament
We stepped into the polo arena with
Jaipur Polo Season in January 2019.
This was the first time that we tied
up with the renowned SMS Gold
Vase Polo Tournament, which was
renamed as ‘AU Bank SMS Gold Polo Club (RPC), Jaipur. It also presented them with plants; while
Vase’ Polo Tournament. The 8-goal witnessed the participation of our we participated in various plantation
tournament was scheduled in the polo team AU Bank Jaipur Polo Team. drives near different social
second week of January at Rajasthan institutions.
Tree plantation
This programme has a social Other initiatives
message (Green India, Healthy India)
We also conducted Diwali Puja
and encourages tree plantation.
kit distribution, Say No to Plastic
As part of this project, we distributed
programme and retail connect,
over 10,000 saplings in 100+ cities
at various locations.
and villages. We connected with
people in nearby housing societies,
offices, temples, public parks and
52|
ON GROUND ACTIVITIES Garnering eyeballs and
Corporate
mindshare in Indore and
As a bank, we initiated many
Sangrur
on-ground activities like ‘Just-a-
Minute’ and ‘GST Doctor’ activities Following the success of the Jaipur
to target traders; health check-up Marathon, we also enhanced our
camps to reach senior citizens; mall visibility in the Indore Marathon
and society activations; school and and Sangrur Marathon with the
college activities and more to touch message of a healthy life.
different segments of society. One of
the major below-the-line activities Garba at Ahmedabad
was AU Festival Fungama to reach
Garba is one of the biggest festivals
families. Paakhi
Statutory
of Gujarat, which brings a strong
Paakhi is an exclusive programme connect among local communities.
to provide relief to distressed birds AU Bank also participated in one of
in the fierce summers of Rajasthan, the leading Garbas of Ahmedabad,
Delhi, Madhya Pradesh, Gujarat, which was attended by more than
Haryana, Punjab and Maharashtra. one lakh people, including many
We distributed 9,000+ clay utensils social influencers across nine days of
among community members near Navratri festival. This helped us build
our 52 branches and encouraged a strong brand connect and recall.
them to keep water in them for
birds. We associated with shop
BRAND VISIBILITY
owners, corporates, government
Financial
employees, devotees in temples Our focus has been on driving AU
Festival Fungama and households through this Bank visibility at catchment areas
initiative. This programme received of our branches. This has helped
Festival Fungama is a platform for all
appreciation from all quarters. in building a strong brand recall
families residing in an area to come
and build credibility. Society
together and have fun collectively.
AU Bank Jaipur Marathon 2019 gates, ‘no parking boards’,
It also provides us the opportunity
direction
for business development through We have been champions of a
signages, park and temple branding
lead generation. The platform healthy life, and this translated into
were conducted across our core
offers us a chance to educate our title sponsorship of the 10th
markets. To capture the mindshare
prospective customers about edition of AU Bank Jaipur Marathon
of potential customers, co-branded
the benefits of our products and in 2019. The programme witnessed
boards were installed at various
their features. Our trade partners the participation of 52,000+ runners.
The marathon was attended by government offices and mandis,
Future Generali Life Insurance
among others. Branding at key
(FGLI), Maruti, Hyundai and Honda fitness enthusiasts, celebrities and
airports was carried out to build
also participated with us in this dignitaries from different walks of
brand premiumness.
programme. life. Besides, over 1,000 AU Bank
employees ran the marathon.
EVENTS AND SPONSORSHIP
ENGAGEMENTS SOCIAL MEDIA PRESENCE
We regularly participate in
sponsorship engagements and
events across the country to create
brand salience with our customers.
Some of the key initiatives in
FY 2018-19 were:
3 lakh+
Followers
Annual Report 2018-

Customer centricity
Customers bank on us
Our endeavour is to catch the imagination of our customers
and provide them customised solutions. Moreover, our focus is
on delighting customers with a convenient banking experience
throughout their journey with us.
CREATING A STRONG ASSET

BASE BY ‘WOW’ING CUSTOMERS
Enhancing market penetration
with local personnel
Our journey towards delighting
customers begins by understanding
their requirements. Therefore, we
hire local personnel who recognise
customer needs and remain close
to them. This strategy further
encourages repeat business, leads
to referrals and increases collection
efficiency, apart from building
enduring relationships with our
customers.
Delivering customer service in

local languages
Around 400+ seater call centre is
operational for handling all customer
service queries, along with tele-calling,
which is focussed on originations and
collections. The calling services are
offered in English, Hindi and
vernacular languages for ease of
Banking with us.
54|
Corporate
Statutory
Building bonds with dealers branches, we have no deposit
and manufacturers slips and we have reduced forms
to increase convenience of our
We have enduring relationships with
customers.
Financial
vehicle manufacturers and dealers
for benefits of our customers.
Ofering unique features
This facilitates favourable financing
agreements with them that enable We provide monthly interest
us to garner more business and pay-outs on deposits, paperless
simultaneously providing easy and digital customer acquisitions,
access to finance. extended banking hours, Real Time
Gross Settlement (RTGS), among
ENHANCING CUSTOMER others.
CENTRICITY
Showcasing value proposition
of our products and services
We facilitate hassle-free tab-based
account opening, delivering
seamless services to our customers.
Besides, we display our different
products, along with their top
three unique selling propositions,
in our branches. As a result, we
create strong recall value for our
various products and services
among customers for future use or
generated referrals.
Focussing on customer
convenience
We provide true ‘anywhere banking’
and have done away with the
concept of ‘home branch’. We offer
extended banking hours and
‘auto-upgrade’ features. At our
Annual Report 2018-

Fueling hopes
for the gold
Mr. Sharad Savang was a professional body

builder from Indore who had once won the
‘Mr. Indore’ title. However, to make ends meet,
he was forced to start pulling a handcart in
the local cloth market. He earned a meagre
`600 every day and the tedious labour robbed
him of his hard-earned physique. He became
frail and the body building ambition became a
I was a rickshaw puller but a chance meeting with an AU Bank representative changed my life. Th
distant dream.
income has tripled and I can save enough to refocus on my body building dream.
I hope this time I win gold at the national championship.
A chance meeting with a representative of
AU Small Finance Bank turned out to be a
life changing moment for him. He suggested
Sharad to buy a loading vehicle so that both
his earnings and physique could improve.
AU Bank provided him a quick and hassle-free
vehicle loan. Soon, Sharad bought his own
loading vehicle and within two months he
almost tripled his monthly income.
Now Sharad has enough money to send his

children to school, take care of his parents’
health, live a better quality of life and save for
his future too. He is taking the right diet and
is back to rebuilding his body building dream.
He has already won some contests and now
he is preparing to win the gold in national
championshi
56|
Lending wings
Corporate
to passion
Statutory
Mr. Manish Kumar Sharma is a
Kolayat-based event manager and
Financial
photo studio owner. He recognised
the importance of drone technology in
developing his business and wanted to
buy the necessary equipment for it.
Our Kolayat team had approached

Manish to open an account and on
further enquiry realised that he lacked
I owe my success to AU Bank. Getting my loan approved wasto really
adequate funds easy
obtain the and it
drone provided th
camera gear. Besides, Manish was
clueless about the right place from where
to acquire the gadget, as Kolayat does
not offer such products for purchase.
Our team suggested the possibility of

procuring the product online at easy
EMIs. Manish readily agreed. The loan
application was accepted within 15
minutes and the device was delivered to
his doorstep in three working days!
The new gadget helped Manish build his

brand as a leading event manager and
photographer in Kolayat. His satisfaction
with AU Bank is demonstrated in his plan
to purchase a DSLR HD Camera next,
with a loan from AU Bank.
Annual Report 2018-

Competent Team
Wealth of opportunities
At AU Bank, we are committed to empowering our
employees to remain agile, providing opportunities for
continuous learning, building strong relationships and do
even the ordinary things extraordinarily every day.
Our team’s hard work and ideas go

foster enduring relationships to help
12,623
a long way in realising the dreams
and aspirations of everyone who them create value not only for the
is connected to us, whether it is by Bank, but also for the country, society
bringing prosperity to the unbanked and themselves.
Total team size
or touching the lives of communities Reimagine
27,000
in which we operate. Our team is not We have been challenging the
just doing a job, but they are helping status-quo and creating prosperity
transform the nation, because we for all since inception. The way we
believe that there is no greater joy go about doing our Business is not Participants across 19
than creating wealth of opportunities only about Business growth, but
for everyone.
diferent types of trainings
reimagining possibilities for our
conducted in FY 2018-19
At AU Bank, we believe that everyone customers, employees, partners &
has a unique potential and a hidden investors and making an impact.
talent. Which is why we constantly
inspire our employees to discover
their true talents, hone their skills and
achieve perfect their true potential.
THE PEOPLE PHILOSOPHY

AT AU BANK
There are three supporting pillars
of our people philosophy - Build,
Connect and Reimagine
Build
We believe that every individual has
a unique potential and we offer our
people a chance to learn and grow
every day. We are a dynamic and
growing Bank and our Employees
will grow with us.
Connect
Over the past more than two decades,
we have been doing extra ordinary
things and we continue to be like
that. Our belief that the power of
collaboration and relationships is
imperative, and this has helped
deliver excellent Business
outcomes. We connect with our
people and
Build Connect Reimagine
58|
We empower our people to grow REGIONAL LEADERS MEET (RLM) EMPLOYEE RECOGNITION
Corporate
with us. We offer opportunities for PROGRAMME
We have initiated the concept
consistent learning. Today, every
of RLM meet where the leaders Employee recognition programme
member at AU Bank has a unique
(typically influencers in the region) is an integral part of AU Bank.
story to share on how they’ve grown
come together for strategic-level It offers us a chance to recognise
with the organisation.
discussions on how to improve the the performance of our people and
performance of the region. They also reward them—by nominating them
We engage with our people
deliberate on important issues (if for foreign tours to celebrate their
using various methods, including
any), and make action plans for success—building an emotional
townhall meetings, regional meets
business enhancement by outlining connect with them as well. It helps our
and recognition programmes.
a clear set of responsibilities and team feel empowered and motivated.
These platforms allow us to motivate
accountabilities.
Statutory
our team and connect with our people
In FY 2018-19, we organised an event
better. Some of our key employee
RLM enhances collaboration and for 15% of our people to celebrate
engagement activities include:
inter-departmental synergy, along their success and performance in
with better understanding that leads planned programmes at overseas
TOWNHALL MEETINGS
to cross-pollination of ideas and trust locations. The events reinforced our
Townhall meetings promote building to achieve organisational Bank’s performance-driven culture.
awareness among employees about objectives.
new sales & marketing plans, new
customers, sales milestones and new
products & services. It’s a branch-
level initiative where all business
leaders and respective team
Financial
members of the branch gather to
review macro-level performance
numbers, felicitate ‘Employee of the
month’, define future targets and
discuss focus areas of the current
month.
Townhall meetings help us build

trust and cohesiveness as a unit
and develop a channel for effective
communication.
PIVOTAL ROLE IN
EMPLOYMENT GENERATION
EMPLOYEE OWNERSHIP
We offer Stock/Equity Incentive
1,941
Employees have
We are associated with Plans (ESOPs), where we grant
ESOPs as on
the Government of India’s the option of acquiring Equity
31st March 2019
skill development Shares of the Bank at a future
programme for providing date and at a pre-determined
employment price to all our people. The
opportunities to youth in rural best part of the scheme is that
and semi-urban India. This is a all employees, irrespective of
testimony to our responsibility levels, are eligible based on
towards the nation and their performance. We ensure
unwavering focus on touching to make our people a part of
unbanked areas and creating the AU growth story by sharing
employment opportunities for ownership and accountability.
the youth around us.
Annual Report 2018-

Financial Inclusion
Serving the unserved
and underserved
Since our inception, we have steered financial services to the remotest
corners of the markets we serve. Inclusive financing remains at the core of
our purpose, leading us to serve unserved and underserved communities.
Our wide market penetration and

deep understanding of the rural and KEY FINANCIAL INCLUSION HIGHLIGHTS, FY 2018-19
semi-urban economies enable us
to create a platform that facilitates
Financial Inclusion (FI). Over the
~28.43% ~80%
years, we have benefitted over a Branches in UBRs* Assessed
million people with our various FI (including BOs) income cases
initiatives. We have funded micro/
small enterprises, which could not
secure credit due to lack of formal
income documents, credit history and
~79% ~39%
banking services in remote areas. of Gross Customers with
Loan AUM# in no CIBIL history
PSL$
~34,000 ~E 3,400 crore

MUDRA@ loan disbursement
BSBD^ Accounts
*Unbanked Rural Area | ^Basic Savings Bank Deposit |$Priority Sector Lending | @Micro Units Development and Refinance Agency
OUR FINANCIAL INCLUSION CUSTOMER PROFILE
• Drivers
• Hardware and • Educational institutes • Dairy
• Small transport electrical shops
• Carpenter and • Small manufactures
operators
• Fabrication units furniture works and traders
• Kirana shops
• Flour mills • Small restaurants
60|
REACHING THE INTERIORS Additionally, we are patronising EVANGELISING INSTITUTIONAL
Corporate
OF INDIA Pradhan Mantri Jeevan Jyoti Bima BANKING
Yojana (PMJJBY) and issued 650
Most of our branches ~62% are in We organised ~300 financial literacy
policies. We also offer Pradhan
rural, semi-urban and unbanked rural camps, which helped provide
Mantri Suraksha Bima and we will
areas (UBR) areas, with 86 banking comprehensive education regarding
soon launch Atal Pension Yojna.
outlets in UBRs. We have ~4,03,000 the benefits of inclusive banking to
We will also unveil Unified Payments
deposit accounts in these markets, over 23,000 people.
Interface (UPI) and Unstructured
where overall deposits for the year
Supplementary Service Data (USSD)
was recorded at ~`2,200 crore.
We have tied up with RajComp Info gateways.
Services Limited (RISL) for the launch
of up to 1,000 ATMs in the interiors
Statutory
of Rajasthan, of which 251 ATMs have
already commenced operations.
CATERING TO UNSERVED AND

UNDERSERVED CUSTOMERS
We serve customers with limited
or no access to organised finance USING UNIQUE REPLACING THE LOCAL
through our deep understanding of EVALUATION TECHNIQUES SAHUKAR
their needs and a robust local team. FOR FI TARGET CUSTOMERS
We provide loans to borrowers with Our target customers reside in
no/low credit history by analysing In most cases, our customers rural and semi-urban India and
Financial
the business, which enables them to are not formally registered include low and middle-income
grow in the right way. and do not have proper individuals with micro or
income proof. We have devised small businesses. They mostly
Around 59% of our gross loan various unique ways to assess connect with the local sahukar
AUM were of a ticket size below such borrowers, including (money lender) for their
`25 lakh. evaluating their purchase bills, financial requirements, primarily
visiting business premises and because of proximity, minimal
examining the turnover through documentation requirements
STRENGTHENING OUR DIGITAL informal sources, diaries, and fast disbursements of cash.
PRESENCE registers and others. We further The sahukar lends where a
We enabled digital services for our include reviews of guarantors, bank generally avoids, as he is
FI customers. They can now open references, existing customer well informed about everyone’s
accounts at their doorstep with recommendations, along with sources of income and ability to
minimal paperwork for all their general viability of the business repay.
banking requirements. to complete the assessment
of borrowers. The approach By reaching the remotest corners
We facilitate paperless hassle-free allows us to further the financial of India with institutional banking
banking with 80% of our Bank inclusion agenda and bring more services, we seek to serve the
accounts being opened through people into the formal banking underserved and unserved
tablets in rural and semi-urban channel. populace, helping our customers
areas. We also have a Financial stay away from the clutches of
Inclusion app for our Business the moneylender and achieve
Correspondents (BC), which helps their aspirations.
them in cross-selling assets, EMI
collections, cheque drop at their
locations.
Annual Report 2018-

Supporting Communities
A socially responsible bank
We undertake several social initiatives to elevate the
communities in which we operate. To better implement these
projects, AU Foundation, the CSR arm of AU Bank in
FY 2018-19 was registered. We aligned our core competence
and sectoral expertise with the communities’ requirements
and identified key pressing areas for developing our
CSR programmes.
Our livelihood enhancement

programme functions at two
different platforms by delivering skill
development opportunities to
urban and rural marginalised
communities through our training
centres:
• AU Skills Academy
• AU Udhyogini – A Self
Employment Training Centre
AU Skills Academy
AU Skills Academy caters to
youth from the low-income
segment by offering vocational
LIVELIHOOD ENHANCEMENT skilling programmes, along with
Since inception, AU’s philosophy grooming sessions to prepare
has been to facilitate asset-backed them for future professional life.
loans, enabling the borrower to The academy focusses on soft skills
FOCUS AREAS
expand his/her business and create like communication, presentation,
OF AU CSR
wealth for self and others. Over the leadership, teamwork, language
r
years, we have consistently lent proficiency and personality

i
to first-time entrepreneurs and development, which are essential for

youth, who ventured out to holistic development of an individual.
write their entrepreneurial
stories. We inaugurated the first academy
Hence, through our CSR, we wanted in the heart of Jaipur (Ramesh
d Marg,
to follow the same approach and
reach out to people who are willing to C-Scheme) and the second academy is
take up the challenge. coming up at Gopalpura Road, Jaipur.
150+
Youth benefitted from AU
Skills Academy
62|
Corporate
Mangodi Making Workshop 3
Number Jobner area, Jaipur
Skill developed Location
Zari and Embroidery Skill Training of 1 Kanota, Jaipur
Rajasthani Lugdi Making 2 Jobner area, Jaipur
Nursery Rising and 5 Jobner area, Jaipur
Vermicompost Making
Food Processing (Turmeric, 2 Jobner area, Jaipur
Chilli and Coriander)
Statutory
FINANCIAL AND We use nukkad nataks (street
DIGITAL LITERACY plays), one-to-one surveys,
financial awareness campaigns and
Financial
Our primary agenda as an SFB is
puppet shows to deliver these
to enable financial inclusion and
workshops.
build a strong banking and financial
ecosystem for the unbanked and
The objective is to mobilise people
underserved masses. Therefore, our
and deliver information about the
objective is to facilitate easy access to
banking system, various banking
funds for rural Indians, small business
products and social security schemes
units, small and marginal farmers,
AU Udhyogini like the PMSBY, PMJJY and APY.
micro and small industries, and
The camps also show RBI-approved
As the name suggests, this unorganised sector entities.
educational videos and distribute
programme aims at empowering
rural women with self-employment In delivering services to the financial awareness booklets. We also
opportunities. We identify villages underserved and unserved, we support the participants to connect
where a group of women are trained with the banking ecosystem and
witnessed the lack of financial
in an income generating skill clarify their queries on banking
literacy, which impedes their adoption
required in their immediate services.
of formal financial services
geography, along with multiple soft necessitating our focus on financial
skills and business skills. They are The camps have been successful in
literacy.
also taught about market linkage for building trust and confidence towards
formal banking services among
procurement of raw materials and Over the years, we have
villagers.
selling the finished product. The organised financial and digital
objective is to transform them into literacy camps at remote and rural
village-level entrepreneurs with a locations to educate people about
sustainable business model. the basics of banking and
Till March 2019, we had financial products.
organised 13 workshops. We use creative infotainment to make
learning interesting and keep our
audience engaged which encourages
175+ them to select the right banking

products. 23,000+
Women benefitted from AU People benefitted from AU
Udhyogini project. financial literacy camps
Annual Report 2018-

SPORTS FOR DEVELOPMENT
We believe that sport plays a crucial
role in character developement
and providing life lessons. At AU
Foundation, we are helping to bring
out the best in children, from rural
areas, by encouraging them to take
up sports.
AU Sports Village
AU Sports Village is a sports
intervention programme that aims
to bring about a social change in the
rural community. It is a multi-faceted
programme, involving children across
social groups, focussing on diverse
physical, mental and emotional
development.
250+
Children benefitted from
AU sports village
WATER COOLERS
them to improve the quality of
INSTALLATIONS
education in India.
The availability of potable water is
important for national public health. Government of Kerala CM’s
Over the years, we have installed Distress Relief Fund (Kerala
110+ safe water dispensers and Flood in 2018)
chillers in high-density locations in
After the catastrophic floods in Kerala
and around Jaipur.
in 2018, the Bank contributed towards
the CM Relief Fund.
OTHER PROJECTS
Health camps and eye check-up
We have other community
camps
development programmes that
include: We have been associated with
the Shekhawati Agrawal Samaj
Pratham Shiksha in providing affordable and free
Charitable Trust healthcare services to the urban
poor. We collaborate with them to
We financially support the Pratham
organise monthly health and eye
Shiksha Charitable Trust for operating
check-up camps in Jaipur. We sponsor
schools for underprivileged children in
these events, which leads to free
the Jaipur district. The trust focusses
OPD service for eye check-up.
on collecting funds and channelising
64|
Alternative Development three development centres in various
Corporate
Centre (Vikalp Vikas Kendra) Jaipur slums and runs a school and
skill development centre benefitting
The Alternate Development Centre
over 130 children.
(ADC) is a non-profit organisation,
which works for the development
of slum children and adults who
have been devoid of opportunities.
It aims to promote education and
skills, especially among women and
children of slums. Currently, it has
Statutory
OUR IMPLEMENTATION PARTNERS
Partner Objective
Akshaya A not-for-profit organisation that seeks to eliminate classroom hunger by implementing the Mid-Day Meal Scheme
Patra Foundation in government schools and government-aided schools
Ambuja An organisation that implements grassroot-level programmes across India harnessing the power of partnerships
Cement Foundation between communities, government, corporates and non-government organisation to help resolve pressing
community issues and foster prosperity
Round Table India An international friendship organisation, comprising businessmen, entrepreneurs, technocrats and professionals,
Financial
who can rise above personal concerns to seek and serve the larger needs of the community
Gram Chetna Kendra An NGO that recognises the needs of Rajasthan’s rural communities and works towards helping individuals
to overcome their barriers or challenges
Lok Kala A non-profit organisation of Rajasthani folk artists who are engaged in driving financial and digital literacy through
Jagrati Vikas Sansthan nukkad natak, puppet shows, folk songs, folk dances and other forms of unique infotainment
MOHAN Foundation An NGO that encourages organ donation
NUDGE TO MAKE A DIFFERENCE ADDING A SILVER LINING

Asim Kumar completed his graduation with flying Uma Shankar hails from an economically backward
colours in the small town of Dehra. Like most family in Jaipur. He could not pursue his education
small-town youngsters, he dreamt of moving to post his higher secondary examinations and joined
a big city with a white-collar job. After moving to his father as a barber’s assistant due to financial
Jaipur with some friends, Asim got confused about challenges.
how to fulfil his aspirations as he was faced with
several options. He found about AU Skills Academy’s Vocational
Skilling Course and joined it. Before joining the
That is when he came across AU Skills Academy’s course, he used to be a shy young man with weak
programme and enrolled. This programme offered communication skills. After completing the course, his
him abundant skill sets bundled with life skills life turned around as he received a placement with
such as communications, grooming, etiquette, Satin Credit Care Network Limited as a Community
interpersonal skills and many more, which could Service Officer.
enable him to grow both professionally and
personally. He is now helping his family financially and is an
asset to his company as well. Uma Shankar says,
Today, Asim is a confident youngster and says “I can “Discipline and grooming learnt in the academy is
now speak confidently in Hindi as well as English, what makes me different in my organisation and
and this has been my biggest achievement that society as well.”
affects many aspects of my life”.
Annual Report 2018-

Risk Management
Safeguarding our business
At AU Bank, we have developed a three-step risk monitoring process, which
allows us to identify, assess and mitigate existing as well as potential risks
to our Bank. Our risk framework helps us identify existing and potential
risks in the product and processes of the Bank. In the Bank, risk
management is an independent function, which monitors Operational, Market
and Credit risks.
Risk culture
and risk Operational
behaviours risk governance
and policy
Risk appetite
framework Three lines
of defence
model
e
Scenario
analysis Internal
control
framework
Key risk Loss events

indicators
management
Self
assessment
of risk and
control
66|
We have an integrated Risk FRAUD RISK MANAGEMENT that captures all components of
Corporate
Management function, which market risks, including volatility and
We have effective risk management
is independent of business unpredicted movement in the market
framework and Risk Containment
functions and is entrusted with the value of the investments.
Unit (RCU) that is guided by
responsibility of managing Credit
a Board-approved Fraud Risk
Risk, Market Risk, Assets-Liabilities
Management Policy. We have an LIQUIDITY AND MARKET RISK
Management (ALM), Operational
experienced Risk Containment Unit, MANAGEMENT
Risk and Information Security Risk.
which develops anti-fraud measures,
We have set up a Risk The Asset Liability Management
executes surveillance mechanism on
Management Committee at the Committee (ALCO) of our Bank
banking transactions and analyses
highest level of our Bank to oversees the framework for
causal factors of frauds. The unit has
examine risk mitigation policies and identification measurement and
established a robust fraud detection
Statutory
procedures, monitor management of market risk, interest
process and periodically carries out
adherence to various risk parameters, rate risk and liquidity risk in our
various fraud prevention awareness
and set prudential limits for various Bank and ensures compliance with
campaigns for employees as well as
departments. We have maintained established internal and regulatory,
customers. prudential limits. ALM helps in
a conservative approach to risk
management, helping protect strengthening the framework to
customers and investors interest. VIGILANCE RISK ensure that enough liquidity and
By prudently aligning our risk appetite contingency buffer are maintained for
At AU Bank, we have a solid and
to our business strategy, our goal is to the banking business.
transparent vigilance mechanism
deliver sustainable long-term return
that covers each aspect of staff We have put in place an integrated
to shareholders.
accountability. The vigilance team risk management framework
Financial
endeavours to promote integrity, that captures all components of
OPERATIONAL RISK transparency and accountability in market risk, including volatility
MANAGEMENT (ORM) our day-to-day working environment.
and unpredicted movement in
We practise all three types of
Our Bank has a Board- market value of the investments.
vigilance, i.e., Preventive, Detective
delegated committee for Market risk is being managed using
and Punitive.
Operational Risk Management Board-approved investment limits and
(ORMC) to review and advise monitored using different measures
for implementation of measures CREDIT RISK MANAGEMENT that give a detailed picture to the
for risk mitigation. This management of potential gain/losses
All aspects of Credit Risk are
committee reports to Risk for a range of market movement.
governed by the Credit Risk
Management Committee of Board Our Bank has a well-developed
Management Policy managed by the
(RMCB). With a view to have market risk framework comprising
Credit Risk team.
comprehensive view on Operational Board-approved policies and
The Credit Risk unit scope includes
Risks, our Bank follows an integrated governance structure. In our
measuring, assessing and monitoring
risk approach where operational risk Bank, Market Risk management
credit risk within our Bank. We laid
and its monitoring fold into Chief Risk down prudential limits and caps
Officer (CRO) and ORMC. We have
business continuity framework to on various aspects to control the is an independent function, which
ensure the continuity of services in reports to the CRO. There is a
the event of any catastrophic event. magnitude of credit risk. Rigorous risk
clear functional separation in
Our operational risk management reporting and controlling mechanism
Treasury operations among front
is prevalent throughout the
framework is designed with a clear office, mid office and back office.
organisation. Loan Administration and
understanding of various operational We have well defined internal
Monitoring is done through Portfolio
risks faced by our Bank and for our control systems and limit
continuous monitoring disciplined risk Profiling, Early Warning Framework,
governance structure to effectively
Rapid Portfolio Review and Annual
assessment and mitigation measures run our business and ensure
Monitoring of High Value Customers.
have been put in place. compliance with regulatory
We have in place an
guidelines.
integrated risk measurement
framework
Annual Report 2018-

Board of Directors
Delivering industry
knowledge and expertise
68|
Corporate
Statutory
COMMITTEE
Chairman/Member
Mr. M. Venugopalan
1
7 Independent Director (Part-Time) Chairman
Risk Management
Corporate Social 1 2 4 5 7 8 10 11
Responsibility 4 4
2 Mr. Mannil Venugopalan is a
Financial
8 Director with the Company since
Audit 2011. He is a Gold medalist
Review of Classification
of Wilful Defaulters Commerce graduate from University
of Kerala. He has over 49 years of
3 experience in the Banking industry.
9
Stakeholders Mr. Venugopalan has an impeccable
Disciplinary career record spanning four and a
Relationship
half decades.
4 He has worked in various
10 leadership positions across the
Nomination and globe.
Fraud Monitoring
Remuneration Within India, he has worked across
centres in North, South and West
5 India. He was associated with
11 Union Bank of India as ED, Bank of
Customer Service
Management India as Chairman & Managing
Director and was also designated
6 MD & CEO of Federal Bank in May
IT Strategy and Information 2005.
Systems Security
He was awarded with the honorary
fellowship by governing council
Chairman Member
of Indian Institute of Banking and
Finance in 2005. A strong believer
in the principles of corporate
governance, he always carried in
his heart a critical space for his
stakeholders, viz. shareholders,
customers and staff. Hard-work and
passion for excellence in all that
he has been the driving force of his
life all throughout.
Annual Report 2018-

Mr. Krishan Kant Rathi
Ms. Jyoti Narang Mr. Raj Vikash Verma
Independent Director
Independent Director Independent Director
2 3 4 6 7 8 9 10 1 2 4 5 7 9 1 2 3 6 7 8 10 11
Mr. Krishan Kant Rathi is

Ms. Jyoti Ishwar Chandra Narang Mr. Raj Vikash Verma is associated
associated with the Bank as a
is associated with the Bank as with the Bank as a Director since
Director since 2008. He is a
a Director since 2015. She 2018. He has completed his
Commerce graduate from the
has completed her MBA in graduation and post-graduation in
University of Rajasthan, a rank-
Finance with additional Economics from Delhi University
holder Chartered Accountant from
specialisation in Marketing and Master’s degree in Business
the Institute of Chartered
from Faculty of Administration from FMS, Delhi
Accountants of India and Qualified
Management Studies, Delhi, and BA University. He has over 36 years
Company Secretary from The
in Economics from Lady Shriram of experience in the financial
Institute of Company Secretaries of
College, University of Delhi and has sector, particularly in the field of
India.
completed Advanced Management development finance, housing,
He has over 31 years of Programme from Harvard Business mortgage finance and real estate
experience at senior positions at School, USA. sectors.
some of India’s most respected
She is a business leader in the He held the position of Chairman
business houses, Future group
hospitality and services industry with and Managing Director at National
being one
around 39 years of experience and Housing Bank (NHB) and has also
of them. He is a vital asset in the
has strong strategic perspective. headed key positions in Central
management and brings knowledge
Her domain expertise lies in the Registry of Securitisation Asset
and executive competence
understanding of diverse consumer Reconstruction and Security Interest
of a rare kind encompassing
lifestyles, management of human (CERSAI) and was a Whole-time
strategic finance management
capital and the impact of technology Member and Director of Pension
in high growth organisations,
on both distribution and Fund Regulatory and Development
treasury management, mergers,
expansions, joint ventures (JVs), operations. She was the Chief Authority of India (PFRDA).
divestments, financial restructuring Operating Officer for Taj Hotels, a
and fundraising (domestic and group of luxury hotels and a
international), system driven founding member
operations, risk management and of Experience India Society that
acquisitions. created the first global campaign for
marketing India.
70|
Corporate
Statutory
Mr. Narendra Ostawal
Mr. Sanjay Agarwal Mr. Uttam Tibrewal
Additional Director (Non-Executive)
Managing Director & CEO Whole Time Director
1 2 4 6 9 1 2 3 5 7 8 9 10 11 6 8 9 10
Mr. Narendra Ostawal was earlier

Mr. Sanjay Agarwal has been Mr. Uttam Tibrewal is associated
associated with the Bank as
Financial
associated with the Company since as Director of the Bank since
Nominee Director since 2018 and
its inception in 1996 and was first 2008. He is a Commerce graduate
has been appointed as Additional
appointed as Managing Director in from the University of Delhi.
Non-Executive Director in
2008. He is a Commerce graduate
January 2019.
from Government College, Ajmer He has more than 22 years of
and all-India rank holder Chartered experience in the finance industry.
He is a Commerce graduate from
Accountant. He joined as Business Head in 2003
Bengaluru University and an all-India
rank holder Chartered Accountant. and later he was appointed the
He is a first-generation entrepreneur Whole-time Director of the Company
He has also completed postgraduate
and a retail finance business in 2008.
diploma in Business Management
leader with more than 24 years of
from Indian Institute of Management
experience in retail finance, credit His dynamic vision, consistent
(IIM), Bengaluru.
risk management and strategic approach, eye to details, strategic
planning. focus and entrepreneurial skills
He currently serves as the Managing
continue to guide the growth of
the
Director of Warburg Pincus He plays a key role in the Bank’s businesses across markets
India Private Limited (WPIPL). Bank’s strategic & corporate and industry. From designing to
He is engaged with Warburg planning and risk management. implementation, he is known to
Pincus investment advisory His strategic insight, vision and build result-oriented strategies
activities and evaluates execution-oriented approach has for achieving targeted growth and
opportunities in the healthcare and resulted in multi-fold increase in the momentum.
financial services sectors. size of the organisation.
He spearheads strategy and retail
He was awarded with ‘EY business of the Bank and played
Entrepreneur of the year 2018’ an instrumental role in bringing AU
award in financial services category. Bank to its present scale and size.
Annual Report 2018-

Leadership Team
Experienced and enterprising
KEY MANAGEMENT PERSONNEL
Mr. Deepak Jain

Mr. Manmohan Parnami
Chief Financial Officer
Company Secretary
LEADERSHIP TEAM
Mr. Manoj Tibrewal

Mr. Rishi Dhariwal Mr. Bhaskar Karkera Mr. Yogesh Jain
Group Head - HR,
Chief of Secured Business Loans Chief of Wheels Group Head Strategy - Treasury,
Marketing & Distribution
FIG, DCM, Wholesale Liability and
Investor Relation
Mr. Sumit Madan

Mr. Vivek Tripathi Mr. Vijendra Singh Mr. Vimal Jain
Chief of Branch Banking
Chief of Strategy Business Shekhawat Chief of Finance and Accounts
Solutions & Transaction Banking Chief of Operations - Assets
72|
Corporate
Statutory
Mr. Mayank Markanday Mr. Vinay Vaish Mr. Shantanu Prasad Mr. Shekhar Shukla
Financial
Chief Risk Officer
Chief of Credit Risk Chief Treasury Officer Chief of Operations -
Branch Banking
Mr. Pankaj Sharma

Mr. Aalekh Vijayvargiya Mr. Ankur Tripathi Mr. Nitin Gupta
National Business Manager –
National Credit Manager Secured Senior Vice President - Chief Audit Officer
Secured Business Loan (MSME)
Business Loans (MSME) Information Technology
Seasoned and dynamic senior leadership team
Mr. Ashok Khandelwal

Chief Compliance Officer
Annual Report 2018-

Key Awards
Recognised for excellence
EY Award for Mr. Sanjay Agarwal, MD & CEO ‘Entrepreneur of

the year’ in Financial Services category 6th Assocham SMEs Excellence Award for Best MSME
Bank (SFB category)
CNBC Awaaz Rajasthan Ratna Award

ABP BFSI Awards 2018 for Bank with more rural
branch expansion & with leading Financial Inclusion
initiatives
ET Now CSR Leadership Award for ‘Livelihood Creation’ for AU

ET Now CSR Leadership Award for Mr. Akshay Gujar, Lead,
Skills Academy and ‘AU Self Employment Training Centre’
74|

CSR as ‘Young CSR Leader of the Year-2018’
Annual Report 2018-

Corporate Information
Corporate
BOARD OF DIRECTORS
KEY MANAGERIAL PERSONNEL CORPORATE OFFICE
Independent Director (Part-Time)
Mr. Deepak Jain 5th Floor, E- Wing, Kanakia Zillion,
Chief Financial Officer Junction of CST Road & LBS Marg,
Chairman
Kurla (West) Mumbai - 400070,
Mr. Krishna Kant Rathi Mr. Manmohan Parnami Maharashtra
Company Secretary and Compliance
Independent Director
Statutory
Officer
STATUTORY AUDITOR
Ms. Jyoti Narang
Independent Director M/s S.R. Batliboi & Associates LLP
REGISTERED OFFICE
Chartered Accountants
Mr. Raj Vikash Verma 19A, Dhuleshwar Garden, Golf View, Corporate Tower B,
Independent Director Ajmer Road, Jaipur – 302001, Sector 42, Sector Road,
Rajasthan, India, Gurgaon-122002, Haryana
Contact No.: 0141- 4110060
Additional Director (Non-Executive) SECRETARIAL AUDITOR
HEAD OFFICE
Mr. Sanjay Agarwal M/s V. M. & Associates
Managing Director & CEO Bank House, Mile 0, Ajmer Company Secretaries
Financial
Road, Jaipur – 302001, 403, Royal World, S.C.
Mr. Uttam Tibrewal Rajasthan Contact No.: 0141- Road, Jaipur - 302001
Whole Time Director – ED 6660666 Rajasthan
aubank.in aubankindia
investor relations ausmallfinancebank
aubankindia aubankindia
74|
Management Discussion
and Analysis
MACROECONOMIC ENVIRONMENT
On the external front, Reserve Bank of India’s (RBI’s)
Global growth continued its cyclical upswing and remained latest estimate suggests that India’s Current Account
steady in the first half of the previous year. However, the Deficit (CAD) is expected to widen to 2.5% of GDP in FY
pace of growth slowed down in the second half primarily 2018-19 because of higher trade deficit and imports
due to moderating investments, geopolitical uncertainties, growing more than the exports. Though there was
risk aversion and elevated trade tensions. Despite the slippage on the fiscal front too as the target for fiscal
rise in crude prices, inflations across most developed and deficit, set originally at 3.3% was revised upward to 3.4%.
major developing economies remained low. This slowdown However, it is important to highlight that India continues
in economic activity appeared to be synchronised and was to remain firm on meeting its medium-term fiscal deficit
reflected in several downward revisions to the 2019 global targets of 3.0% by FY 2021-22.
growth forecasts. Reckoning the slowdown, most central
banks shifted towards a more accommodative monetary Retail inflation, measured by the Consumer Price Index
policy stance to extend a growth stimulus. In some (CPI), remained moderate and within the RBI’s targeted
economies, fiscal stimuli are being used to support growth. 4% range for most part of FY 2018-19, as higher
Given the interplay of these events, Organisation for agricultural productivity kept food (~46% of CPI) inflation
Economic Co-operation and Development (OECD) projects benign. Wholesale inflation (WPI) too remained in low
that weakness may persists in 2019 and estimates that the single-digits.
real global GDP would grow at a sub-par rate of 3.2% in
2019, from the higher levels of 3.5% in 2018. The moderate inflation scenario prompted the RBI to
return to its ‘neutral’ stance from ‘calibrated tightening’
India, while being the fastest growing economy and (adopted between October 2018 and December 2018).
averaging GDP growth at 7% levels, mirrored a similar The apex bank announced a 25-basis-point cut in the repo
trajectory in the previous fiscal with growth slowing down rate in its last policy review of FY 2018-19 to boost
in the second half. The slowdown was due to a host of economic growth. Liquidity in money markets in general
external and internal factors such as weak industrial shrunk in the second half and the apex bank took suitable
output, led by contraction in manufacturing, capital goods active measures, including Open Market Operations (OMO)
and consumer durables, coupled with subdued urban and introduction of Foreign Exchange (FX) swap auction
and rural demand. Several high frequency indicators such facility for banks, to augment the liquidity.
as growth in manufacturing and capital goods, index of
industrial production (IIP), credit flow to micro, small and India’s strong fundamentals, prudent macroeconomic
medium enterprises and auto sales, among others pointed policy framework, continued focus on reforms, strong
to a slackening urban & rural demand and investment banking and capital markets and a massive base of over
activity. Moreover, an increase in the crude oil (from levels 1.3 billion populous, make it one of the few most resilient
of US$56 per barrel in FY 2017-18 to US$70 per barrel in economies globally. Besides, the present government’s
Financial Year 2018-19) and headwinds in financial sweeping majority in the recent general assembly
markets also impacted the growth momentum in the elections ensures continuity of reforms and growth
second half of the previous fiscal. In fourth quarter, Gross agenda, going forward. However, weakening
Domestic Product (GDP) growth dipped to 5.8%, which led investment activity, probability of El Nino effects on
to real GDP growth for FY 2018-19 coming at a five-year monsoon and uncertain global outlook could impact the
low of 6.8%, further lower from Central Statistics Office’s growth going forward. World Bank, in its latest
(CSO’s) second advanced estimates of 7.0%, released in projection has retained the GDP growth estimates for India
February 2019. However, in the last financial year, India at 7.5% for the next two years.
improved its ranking in World Bank’s Ease of Doing
Business 2019 survey and jumped 23 places to climb to
77th place globally. This has been an outcome of INDIAN BANKING INDUSTRY
government’s focus on reforms, on improving the quality The banking and financial services industry has played
of infrastructure, implementation of key reforms including a pivotal role in supporting the US$2.65 trillion economy
the Insolvency and Bankruptcy Code (IBC), among other to maintain its growth momentum. For Indian Banks,
things. FY 2018-19 was the second consecutive year of double
digit credit growth. As per RBI, in 2019, Banks’ credit rose
Annual Report 2018-

13.1% to `98.18 lakh crore. Private sector
banks recorded over
76|
28% credit growth year-on-year (y-o-y) while public sector simplifying the external commercial borrowing framework
Corporate
banks registered 5.5% growth. Retail loans continued to and relaxing the Facility to Avail Liquidity for Liquidity
be at the forefront of systemic credit growth followed by Coverage Ratio (FALLCR) where RBI allowed banks to use
services. Within the retail segment, the top three products government securities equal to their outstanding credit
were credit cards, housing loans and personal loans. to NBFCs and HFCs, to be used to meet Liquidity
Loans outstanding under credit cards, grew 28.6% y-o-y Coverage Ratio (LCR) requirements.
in FY 2018-19. This was more than double the 13.1% y-o-
y growth recorded by overall bank credit. While higher provisioning due to deteriorating asset quality
had pulled down the banking sector in FY 2017-18, the
Credit growth recovers in FY 2018-19 (%) strong revival in bank credit growth in the first half of FY
2018-19 of private and public sector banks suggests an
Non-food credit 12.3 overall improvement in the health of banks. Credit to
Services 17.8
Statutory
industry, which remained depressed in FY 2017-18, also
Personal 16.4 pointed to an uptick. Stressed assets of scheduled
Agriculture and Allied 7.9 commercial banks (SCBs) began to stabilise, albeit at an
Industry 6.9 elevated level, capital positions were buffered and the
provision coverage ratio improved to 52.4% by end-
Improving credit offtake from the agriculture sector was September 2018 (Source: RBI).
another highlight of the year, though loans to
corporates continued to lag. Lending to Non-Banking Deposits continued to grow at a steady pace across all
Financial Companies (NBFCs) witnessed a mixed trend, banks. Private sector banks continued to lead deposit
though NBFC borrowings grew at a rapid rate till mobilisation. However, deposit growth for public sector
September 2018, but the liquidity squeeze at some banks remained low, amid visible signs of a gradual pick
NBFCs due to asset-liability mismatch reversed the up.
trend. In a bid to address this liquidity squeeze, RBI
introduced a slew of measures such as allowing reduction As on 31st March 2019, growth in deposits lagged the
Financial
in holding period of loans before securitisation by credit growth as deposits grew at 9.4% to `125.59 lakh
NBFCs, allowing banks to provide Partial Credit crore. This was partly a function of the liquidity crisis at
Enhancement to NBFC bonds, increasing single some NBFCs, which brought commercial paper trading to
borrower exposure limits for NBFC lending by banks, a virtual halt. This in turn, resulted in higher demand for
bank loans, widening the gap between credit and deposit
growth.
Credit and deposit trend

40% 83%
Credit (% y-o-y) (LHS) Deposits(% y-o-y) (LHS) Credit to deposit ratio (RHS)
35%
78%
30%
73%
25%
68%
20%
63%
15%
58%
10%
5% 53%
0% 48 %
Annual Report 2018-

-
-
Source: RBI, CME, JM Financial, *Dec’17 and Dec’18 data based on RBI’s fortnightly release
76|
Private banks continued to outpace their public sector

It is expected that RBI will address the liquidity issues and
peers on both credit as well as deposit growth, as many
the foreign inflows should increase because of a stable
public sector banks got tied up with resolving their bad
government. Moreover, there is a scope for interest rates
loans and faced growth restrictions under the Prompt
to come down on the back of growth slowdown, benign
Corrective Action (PCA) framework.
inflation levels and liquidity squeeze.
Interim Union Budget FY 2019-20: Key positives
Proposal Impact on sectors SMALL FINANCE BANKS: UNIQUE, FAST-GROWING
Section 80I-BA extended for one • Positive for affordable Small Finance Banks (SFBs) were introduced by the
year. Under this section, 100% of housing companies RBI to drive financial inclusion for the unbanked and
profits derived from development of underbanked sections of the economy. In the two years of
affordable housing projects is exempt their existence, SFBs have made a remarkable impact and
from taxes. This benefit is applicable gained significant scale with a combined asset portfolio
to projects approved till 31st March size of over `60,238 crore and a deposit base of over
2020
• Positive for `37,500 crore as on March 2019.
Tax Deducted at Source (TDS) limit housing segment
for deduction of tax on rent is SFBs are diligently delivering on the RBI mandate by
increased from `1,80,000 to engaging with customers and offering them a
• Provide tax relief to
`2,40,000 Individual taxpayers with a comprehensive suite of financial products and services
salaried individuals
taxable income of up to `5 lakh will through their sprawling branch network and digital
get full tax rebate and will not be platforms. Moreover, catering to demand for small ticket
required to pay any income tax loans (for 50% of their portfolio) and the priority sector
• Positive for KCC lending
Extension of Kisan Credit Card (KCC) (higher exposure target of 75%) have always been their
business of banks
scheme interest subvention to animal mainstay and core competence. Thus, the opportunity
husbandry and fisheries landscape for SFBs is expanding and the road ahead
• Improve asset quality
Income support for farmers, interest looks bright, presenting a win-win situation for both
on agriculture loans
subvention on loans (for full tenure) customers and SFBs.
to farmers affected by natural
• Positive for MSMEs
calamities
Pension scheme for workers in KEY GROWTH SECTORS
• May propel growth
unorganised sector Auto loans industry/Vehicle loans
in bank deposits
TDS limit on interest earned on
bank/ post office deposits raised In last few years, the opportunities in vehicle financing
from business have expanded beyond the traditional core
`10,000 to `40,000 segment of new vehicles to the used vehicle and refinance
as well. This has been fuelled by multiple factors, including
roll out of new used vehicle dealers by OEMs, emergence
OUTLOOK of
Credit growth is expected to remain strong driven by well-funded online used car dealers offering certification,
the continued momentum in retail loans, a gradual quality, ease of transfer and financing. This has opened a
recovery in private sector capex and the emergence of lot of opportunities for vehicle financers in India. The key
public sector banks out of the PCA framework. trends of both the segments are outlined here under.
Improving economic growth and lower interest rates are
other factors which should propel the growth in the New vehicles – Trends and Opportunities
medium term.
India is one of the biggest automobile markets in the
world. In FY 2018-19, 2.62 crore new vehicles were sold in
The retail and SME segments are likely to fuel loan
India which grew 5% from 2.49 crore vehicles sold in FY
growth, with demand for home loans, car loans and small
2017-18. The five-year CAGR (FY 2014-19) for all vehicles
business loans witnessing higher growth. Besides, growth
sales was 7.4%, reflecting that it is cyclical in nature.
in semi-urban and rural areas is likely to outpace that in
urban areas, which should benefit players with a dominant
presence in those markets.
Annual Report 2018-

Vehicles sales in India
Corporate
Particulars (in Units) FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 5-year CAGR
All vehicles 1,84,23,223 1,97,24,371 2,02,68,971 2,18,63,281 2,49,81,312 2,62,67,783 7.4%
including two-wheelers
y-o-y growth 7% 4% 7% 14% 5%
Source: Society of Automobile Manufacturers of India
However, excluding two-wheelers, sales of new vehicle was 50.85 lakh units in FY 2018-19, which was more than 6.4% from
47.81 lakh units sold in FY 2017-18. The five -year CAGR (FY 2014-19) for new vehicles sales excluding two-wheelers was 7.1%.
Statutory
Particulars (in Units) FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 5-year CAGR
All vehicles 36,16,445 37,48,810 40,13,120 42,73,543 47,81,195 50,85,766 7%
excluding two-wheelers
y-o-y growth 4% 7% 6% 12% 6%
Passenger Vehicle (PVs) 25,03,509 26,01,236 27,89,208 30,47,582 32,88,581 33,77,436 6%
y-o-y growth 4% 7% 9% 8% 3%
Commercial Vehicle (CVs) 6,32,851 6,14,948 6,85,704 7,14,082 10,07,319 10%
y-o-y growth -3% 12% 4% 20% 18%
Three-wheelers 4,80,085 5,32,626 5,38,208 5,11,879 6,35,698 7,01,011 8%
y-o-y growth 11% 1% -5% 24% 10%
Source: Society of Automobile Manufacturers of India
Financial
Indian auto sales witnessed a mixed FY 2018-19, with M&HCV and LCV should continue to witness strong
passenger vehicle (PV) sales growth slowing significantly tailwinds and be aided by improved road infrastructure,
to 2.7%, while commercial vehicle (CV) sales increased by Goods and Services Tax (GST) implementation paving way
17.6% over FY 2017-18. for bigger warehouses, increased e-tailing, last mile
delivery opportunities and migration to newer emission
In FY 2018-19, within the PV segment, the sales of new standards. M&HCV and LCV is expected to grow between
passenger cars and utility vehicle grew just marginally 6-8% and 5-7%, respectively over the next five years.
above 2% whereas the sales of new vans grew by 13.1%,
albeit on a lower base, over the levels of FY 2017-18. Used Vehicle - Cars
Within CV segment, new medium and heavy commercial
vehicles (M&HCVs) sales rose by 14.7% and light According to Indian bluebook, pre-owned car market
commercial vehicles (LCV) grew by 19.5% in FY 2018-19 has grown steadily in FY 2018-19. It has crossed the 4-
over FY 2017-18. million- unit mark and is 1.2x the size of new car market.
The industry is seeing tailwinds post the rationalisation of
The slowdown in new vehicle sales of PVs in the second GST to 12-18% and increased investments across the
half coincided with most NBFCs facing liquidity issue value chain from procurement to retail.
with elevation in their cost of funds. This resulted in rise
in fresh loans yields and higher Loan To Value ratio
(LTV) New car market Pre-owned car market
(in million units) (in million units)
in some cases. However, despite the above, most vehicle
lending NBFCs reported some slowdown with lower
incremental loan spreads.
3
4
3
According to CRISIL Research, new PV sales are expected

to grow at a CAGR of 7-9% over FY 2018-22 and will be
driven by increase in nuclearisation, rise in disposable
income, shorter replacement cycles, launch of newer
models and electric vehicles.
FY 17 FY 19 FY 17 FY 19
Source: Indian bluebook
78|
Indian pre-owned car industry is expected to reach

channel of the pre-owned car market has almost
between
doubled from 10% to 18%, from FY 2010-11 to FY
6.7 to 7.2 million cars annually and will be valued at
2018-19 and is expected to go up to 30% by FY 2020-22.
`50,000 crore by FY 2021-22 from current size of 4 million
cars/year. The growth of the organised channel bodes well for the
banks. Buyers who use the organised channel can be
offered pre-approved loans as majority of the
The growth drivers are as follows:
transactions are below `3 lakh and the ease of finance will
• Migration of two-wheeler owners to pre-owned car encourage buyers to avail loans.
owners and increased composition of value seekers
• Trickle down impact of massive investment of `5,000 MSME LENDING
crore in India’s used car industry in previous four years
MSMEs overview
• Leasing and corporate fleet buyers are expected to
double in the next couple of years Globally, Micro, Small and Medium Enterprises (MSMEs)
are regarded as engines of equitable economic
• Emergence of online market places catapulting development. In India too, they are the backbone of
options for on-line seekers Indian economy. As per the Annual Report FY 2017-18
The banks also have more room to grow in this segment, of Ministry of Micro, Small and Medium Enterprises, in
as this segment is currently underpenetrated with only terms of value, MSMEs accounts for ~45% of the
17% purchases being financed. Market share of the manufacturing output and ~40% of the total exports of
organised India.
OVERVIEW OF MSMES IN INDIA AND AU BANK’S FOCUS SEGMENTS

According to MSMED Act 2006, in India MSMEs are classified under following three subcategories basis the
threshold investment in plant and machinery (for manufacturing enterprises) and investment in equipment (for units in
services)
Nature of activity Micro enterprises Small enterprises Medium enterprises
For manufacturing enterprises investment in plant and machinery <=`25 lakh >`25 lakh >`5 crore
but <= `5 crore but <= `10 crore
For services enterprises investment in equipment <=`10 lakh >`10 lakh >`2 crore
but <= `2 crore but <=`5 crore
According to the Annual Report of the Ministry of MSME of FY 2017-18, India is home to about 63 million MSMEs, of
which about 51% are in rural areas; micro enterprises accounted for 99%.
ACTIVITY WISE NUMBER OF MSMES

(In lakh)
Estimated number of enterprises
Activity category Share (%)
Rural Urban Total
Manufacturing 114.14 82.50 196.65 31
Trade 108.71 121.64 230.35 36
Other Services 102.00 104.85 206.85 33
Electricity* 0.03 0.01 0.03 0
All 324.88 309.00 633.88 100
*Non-captive electricity generation and transmission and distribution by units not registered with the Central Electricity Authority (CEA)
SECTOR-WISE NUMBER OF MSMES

(In lakh)
Sector Micro enterprises Small enterprises Medium enterprises Total Share (%)
Rural 324.09 0.78 0.01 324.88 51
Urban 306.43 2.53 0.04 309.00 49
All 630.52 3.31 0.05 633.88 100
Annual Report 2018-

ACCESS TO CREDIT AND OPPORTUNITIES FOR AU BANK
Corporate
Despite MSMEs’ significant contribution to GDP and ability to generate significant employment, loans to this segment
have grown at a sluggish pace over the past few years, and there exists significant gap in addressable debt demand.
According to International Finance Corporation (IFC), the addressable credit gap of MSMEs in India stands as high as
`25.8 trillion.
Analysis of credit gap

(` trillion)
Analysis of credit gap in MSME space Micro enterprises Small enterprises Medium enterprises Total
Debt demand 11.9 21.65 3.2 36.7
Share of debt supply 3.9 4.8 2.2 10.9
Credit gap 8 16.8 1 25.8
Statutory
Credit Opportunities for Lenders in India’s MSME Space
Loan size
Financial Institutions
Bank/development Organised sectors
Bank/development institutions Corporate entity
institutions More than Organised financials
`25 lakh Cash flow analysis
Financial
• Projects specific loans
Bank/SFBs/ Unorganised sectors
Bank/SFBs/NBFC/
More than NBFC/ Co-op Bank Cash basis accounting
Co-op Bank
`2 lakh—`25 lakh Composite
loan requirements
Non financials
Micro finance MFI
companies • General need of funds
Upto `2 lakh
AU Bank has emerged as one of the leading lenders to MSMEs since 2009 and is perceived as a trusted solution provider
to the sector. With average ticket size around `10-12 lakh, AU Bank has catered to only 0.11 million units as on date and
has a long way to grow in this segment.
Market share shifting from Public Sector Bank to Private Banks and NBFCs
(%)
100 5.9 6.6 7.6

90
80
70 58.6 55.0 48.1
60
50
40
30 26.4 28.3 32.6
20 9.0 10.1 11.6
10 Sep’16 Sep’17 Sep’18
0 Dec’16 Mar’17 Jun’17 Dec’17 Mar’18 Jun’18
NBFCPrivate Share of lender types in MSME segment

PSBOthers
Source: MSME Pulse report, Transunion CIBIL & SIDBI, December 2018
80|
Housing loans
age banks, such as Small Finance Banks (SFBs), are changing
With a population base of over 1.30 billion people, India the game by leveraging their presence in the remotest
ranks 2nd amongst world’s most populous countries. Out of parts, investing in technologies to maximise accessibility
this, rural population constitutes over 70% as nearly 0.93 and offering tailored schemes with flexible tenors.
billion people stay in rural areas. However, there is a
massive shortage of housing in rural areas (around 43.6 Key growth enablers
million homes). Similarly the opportunity in urban areas
• Lower interest rates than unorganised lenders
is of ~18.8 million homes. Moreover, according to latest
industry estimates, India’s mortgage penetration hovers • High under-penetration of gold loans
around 10% and is expected to reach to 14% by FY 2021-22.
With urbanisation and nuclearisation taking place at a • Significant potential to monetise idle gold
rapid pace, clearly more houses are needed. It is expected • Prompt disbursements, minimal documentations and
that by 2030, nearly half of India will be residing in urban flexible repayment options make gold loan an
areas. Existing cities will have to grow beyond their attractive option for short-term loans
boundaries and many new cities will come up.
Consumer durable loans
The Government of India addressed this gap with massive
and unprecedented impetus to the housing sector in the Consumer durable loans remained one of the fastest
past two years, especially in the affordable housing space. growing credit segments in the banking and financial
Under ‘Housing for All’ scheme, 60 million houses are to be services industry, recording almost 30% growth in
built—40 million in rural areas and 20 million in urban FY 2018-19. The government and the industry’s continued
areas by 2022—creating a holistic demand for housing push for digitisation, as well as a higher financial inclusion,
industry. In 2018, the National Urban Housing Fund was will likely keep consumer durable loan growth at
launched with an outlay of `60,000 crore. Simultaneously, elevated levels. With the entry of more NBFCs and new
National Housing Bank (NHB) introduced stricter norms age banks, consumer durable financing received the
around capitalisation and borrowing limits for housing much-needed boost in terms of speed and
finance companies (HFCs). Earlier, government had convenience, with paperless disbursements.
promulgated Real Estate (Regulation and Development)
Act, 2016, strengthening the confidence for prospective ABOUT AU SMALL FINANCE BANK
buyers.
AU Small Finance Bank, a Fortune India 500 Company,
Housing loans has been one of our main stay retail is the only scheduled commercial bank headquartered
asset loan and was relaunched in Q4 of 2018. Through at Jaipur, Rajasthan. We are redefining the banking
our housing loan offering, we aim to help our customers ecosystem in India with enhanced convenience and
in building/buying the most important asset of their life uncomplicated banking experience for our customers.
and on board their entire family with us.
Key highlights
Gold loans • Among the fastest growing banks in India
India’s organised gold loan market is likely to grow to • Extensive ‘phygital’ presence in the regions where we
`3,10,100 crore by 2020, at a three-year CAGR of 13.7% operate
(Source: KPMG). Although gold has been one of the
oldest forms of collaterals for loans, the organised gold • Experienced and highly qualified team
loan segment still has very low penetration. Informal and • Comprehensive portfolio of products and services
unregulated players, including local money lenders control
about 60% of all gold loan transactions and charge • Judicious investments in data, digital and distribution
usurious interest rates due to the lack of formal financing to build a future-ready bank
channels. Of the organised part, PSBs and NBFCs control • Focussed on secured retail lending and customer centricity
nearly 81% given their extensive reach in terms of branch
network. India is the world’s largest consumer of gold • Profitable with stable asset quality
jewellery and possesses over 20,000 tonnes of gold valued • Sound business ethics and strong corporate governance
at over US$800 billion; with rural India holding about 65% standards
of the stock. However, technological advancements and
the entry of new
Annual Report 2018-

CHANNELS OF BANKING
Corporate
Branches, Asset
Business Correspondents
Centres, Offices
& Banking Outlets
Call Centre
Internet Banking
ATMs
Digital Banking
Statutory
Mobile Banking
Phone Banking
Point-of-Sale (POS)
App Banking
Machines
REVISITING FY 2018-19
Financial highlight
Financial
Profit and loss summary
(All figures in ` crore)
FY 2018-19 FY 2017- 18 y-o-y
Income
Interest earned (excluding securitisation and assignment income) 2,796 1,464 91.0%
Interest expended 1,606 827 94.3%
Net Interest Income (excluding securitisation and assignment) 1,190 637 86.7%
Securitisation and assignment income 153 303 -49.7%
Other income 462 388 19.1%
Total net income 1,805 1,329 35.8%
Expenses
Operating expenses
Employee cost 601 425 41.5%
Other operating expenses 481 328 46.9%
Operating profit before provisions and contingencies 722 576 25.3%
Provisions (other than tax) and contingencies 142 133 6.9%
Exceptional items - - 0.0%
Profit before tax 580 443 30.9%
Tax expenses 198 151 31.1%
Profit after tax 382 292 30.7%
Key ratios
(%)
FY 2017- 18
FY 2018-19
Net interest margin (NIM) 5.5 7.0
Net interest income (Excluding income from securitisation and assignment) 4.6 4.5
as a % of average total assets
Total cost to average assets 4.2 5.3
Return on Average Total Assets (ROA) 1.5 2.0
Return on Average Total Equity (ROE) 14.0 13.7
Gross Non-Performing Assets (GNPA) 2.0 2.0
Net Non-Performing Assets (NNPA) 1.3 1.3
82|
Our net interest income (excluding securitisation &

income excluding securitisation/assignment income was
assignment income) grew to `1,190 crore in FY 2018-19
also stable at around 4.8% in the last four quarters.
from `637 crore in FY 2017-18. Securitisation &
assignment income declined to `153 crore in FY 2018-19
from `303 crore in FY 2017-18 as our securitisation & Cost-to-income ratio stood at 60% in FY 2018-19 from
assignment outstanding book is declining over the past 56.7% in FY 2017-18. After peaking in the third quarter at
two years given that we have not done much of 60.7%, the ratio improved to 58.3% for the quarter ended
securitisation/assignment in the last 2 years. Other income 31st March 2019.
was up by 19.1% to `462 crore from `388 crore. Profit After
Tax (PAT) grew by 30.7% to `382 crore from `292 crore. There was a marginal improvement in our Return on
Average Equity (ROAE) to 14% for FY 2018-19 from 13.7%
For the first two quarters of FY 2018-19, average for FY 2017-18. We continue to generate strong
disbursement yield for new loans hovered around 13.2– Return on Average Assets (ROAAs) in our existing
13.4%. However, responding to external market business. However, our branch banking, which is in its
conditions, we increased our rates from the third build-out phase, was a drag on overall ROAA at 1.5% for FY
quarter and the trend continued in the last quarter as 2018-19.
well. In Q4 FY 2018-19, blended disbursement yield for
our new loans was around 14.6–14.7%. As on 31st March Our other asset products (business banking, gold loan,
2019, our full-year yield on our assets under home loan, Agri-SME, consumer durables and two-
management was at ~14.3%. Despite rising cost of wheelers) were introduced in the last few quarters and are
funds in the second half of FY 2018-19, we improved our gradually gaining volumes.
average cost of funds by nearly 50 basis points to 7.9%
as on 31st March 2019. Our spreads at around 6.4% levels As our branch banking and new asset businesses scale, we
were stable in all four quarters. Our net interest expect our ROA to improve driven by higher productivity
and operational efficiency.
Asset and liability composition
(` in crore)
31st March, 2019 31st March, 2018 y-o-y
Liabilities
Capital 292 286 2.3%
Money received against Share Warrants 175 - N.A.
Employees stock options outstanding 43 17 145.4%
Reserves and surplus 2,653 1,978 34.1%
Deposits 19,422 7,923 145.1%
Borrowings 8,613 7,639 12.8%
Other liabilities and provisions 1,424 989 43.9%
Total liabilities 32,623 18,833 73.2%
Assets
Cash and balances with RBI 811 492 64.8%
Balances with banks and money at call and short notice 929 1,269 -26.8%
Investments 7,162 3,051 134.8%
Advances 22,819 13,312 71.4%
Fixed assets 447 386 15.8%
Other assets 455 323 41.0%
Total assets 32,623 18,833 73.2%
Our total balance sheet size grew 73.2% to `32,623 core products and a pickup in newly launched products.
crore as on 31st March 2019 from `18,833 crore as on
31st March 2018.
Our assets under management (AUM) increased to

`24,246 crore as at 31st March 2019 from `16,188
crore as at 31st March 2018, up by 50% y-o-y.
Total net advances grew 71.4% y-o-y to `22,819 crore

from
`13,312 crore, owing to satisfactory performance of our
Annual Report 2018-

Our asset quality remained stable on account of
stringent monitoring and engagement. Gross
NPA and Net NPA stood at 2% and 1.3% as on
31st March 2019 from 2% and 1.3%,
respectively as on 31st March 2018.
Our capital to risk weighted asset ratio

(CRAR) and Tier-I CRAR stood at 19.3% and
16%, respectively as on 31st March 2019 vis-à-
vis 19.3% and 18.4%, respectively as on 31st
March 2018.
84|
BUSINESS REVIEW We offer loans for new, pre-owned vehicles and for
Corporate
refinancing of vehicles across several categories including:
We are among the new entrants in India’s dynamic
(i) multi-utility vehicles (MUVs); (ii) cars; (iii) sports-utility
banking landscape with a steady focus on growing the
vehicles (SUVs); (iv) small commercial vehicles (SCVs);
right way. With over 62% of our branches in rural and
(v) light commercial vehicles (LCVs); (vi) medium-and heavy-
semi-urban areas, we have enhanced focus on
commercial vehicles (M&HCVs); (vii) tractors; (viii) three-
unbanked and underbanked customers at the bottom of
wheelers (TWHs); (ix) two-wheelers (TWs); and (x)
the pyramid to drive financial inclusion.
construction equipments (CEs).
Vertical-wise performance
During FY 2018-19; we launched a slew of initiatives such as:
We have been a retail focussed bank with retail loan
assets comprising over 80% of loan AUM. We also offer • Offered pre-approved loans to existing customers
Statutory
small & mid corporate loan asset products. Both these
• Initiated School Connect programme where we target
segments clocked strong growth in FY 2018-19.
loans for school buses, along with offering a host of
asset and liability products and refinance
Retail assets
• Focussed strategy to tap the used car market in India
For more than two decades, we have been lending
small ticket, secured, retail loans primarily to the • Empanelled tractor dealers for funding exchange vehicles
unbanked and the underbanked self-employed
• Launched a two-wheeler online loan module
population and helping them improve their earnings and
quality of life. Secured business loans – MSME (SBL-MSME)
Within retail assets, vehicle loans, small secured Secured business loans MSME is our second mainstay
business loans to MSME (SBL-MSME) are our two focussed product within retails assets and accounts for ~32% of
Financial
products. our total AUM as on 31st March 2019.
We extend loans to various micro, small and medium
Breakup of retail assets enterprises (MSMEs) primarily for business expansion,
working capital and purchase of equipment. Our typical
(%)
customer base for this segment includes self-employed
Type of retail asset Share in total AUM
individuals with small businesses (annual turnover
Vehicle Loans 42.2%
between
SBL – MSME 31.8%
`40 lakh and `10 crore), having at least a few years of
SBL – SME 3.7%
track record in such businesses, generating cashflows at
Gold Loan, Agri SME, Housing Loan, others 1.7%
high frequency and having limited or no formal
OD Against FD 2.3%
documented income proofs (for example grocery/kirana
Total 81.7%
stores, dairy/ cattle rearing and hotel/restaurants). Such
loans are then secured by immoveable property.
As on 31st March 2019, 59% of our loan portfolio
was upto `25 lakh. Gross AUMs for our SBL-MSME business increased
54% y-o-y to `7,708 crore as on 31st March 2019. SBL-MSME
Vehicle loan disbursements grew 35% y-o-y to `3,691 crore in FY 2018-
19.
Vehicle loans has been our mainstay retail product since
our inception and is the most seasoned book in our
Secured business loans – SME (SBL-SME)
portfolio. As of 31st March 2019, our vehicle loan AUM
recorded a growth of 43% and stood at `10,224 crore We offer business loans to small and medium
comprising 42% of our total AUM. Wheels disbursements enterprises (SMEs) for their expansion, working capital
grew by 52% y-o-y to `6,725 crore in FY 2018-19. and purchase of equipment. Our SME customers have
relatively bigger businesses in terms of turnover and
Within vehicle loans, AU Bank offers one of the widest have more formal documented income proofs. They
product range and extends credit for 2 to 22 wheel include traders, wholesalers, distributors, retailers,
vehicles, for new vehicles as well as used vehicle, for manufacturers and self-employed professionals. Our
personal use as well as commercial use. approach for such customers is to understand their
business loan requirements, estimate business
We have been serving First-Time Buyers (FTBs), First-Time cashflows, appraise documented income proofs and then
Users (FTUs), Small Road Transport Operators (SRTOs) determine their loan eligibility. These loans are secured by
and captive users. Our wheels loans are secured by the immoveable property.
vehicles we finance.
Annual Report 2018-

Gross AUMs for our SBL-SME business marginally
increased to `891 crore as on 31st March 2019 from `871 Business banking
crore a year earlier. We continue to be cautious while Business banking provides fund-based credit facilities such
pursuing new growth opportunities in this segment. as overdraft and cash credit and non-fund based facilities
such as letters of credit and bank guarantees to small and
Agri business loans medium enterprise customers. We have increased
We offer specially designed loans to cover a presence in non-fund based credit facilities, along with
comprehensive set of requirements of all stakeholders trade and remittances. We cater to all segments of
under agri-allied activities and its value chain. While businesses including wholesalers, retailers, traders,
product features and approaches are similar to SBL-SME manufacturers, service providers, contractors, stockist,
loans, we have set up a dedicated team to tap into credit distributors, educational institutes and healthcare
needs of the agriculture and allied value chain such as enterprises. Gross AUMs for our business banking
food processing units, fertiliser/seeds wholesalers and increased 88% year on year to `818 crore as on 31st March
retailers. Gross AUMs for our agri business loans 2019; business banking disbursements grew 82% year on
increased substantially to `244 crore as on 31st March year to `925 crore.
2019 from `33 crore a year earlier; agri business loan
Lending to NBFCs, HFCs and MFIs
disbursements grew more than 4.5 times to `277 crore.
Non-Banking Financial Companies (NBFCs), Housing
Home loans Financial Companies (HFCs), Micro Finance Institutions
(MFIs) and Asset Finance Companies (AFCs) need constant
We provide a complete bouquet of services to
stream of funds for growth and expansion. After
customers to meet their home loan requirements,
completing our journey as an NBFC and witnessing several
catering to self-construction, purchase of flat/house,
credit and business cycles, we have gathered first-hand
extension/ renovation and takeover/top-up. Customers
perspective and experience of their specific needs. With
can easily apply for a loan with branches spread
our customer-centric approach and customised product
across India. Our relationship officers help customers in
suite, we are well prepared to serve them at various
every step of their journey by helping them select the
stages in their business cycles.
right loan mix, calculate a suitable loan EMI and tenure.
We offer home loans from `2 lakh to above `50 lakh for
Our lending in this segment is spread across diverse asset
a maximum 30-year tenure for salaried customers; and
classes with a substantial proportion to asset finance
20 years for self-employed non-income proof/self-
companies (around 60%). Our book has granular
employed income proof profile customers. Gross AUMs
spread across 140+ customers. Over 92% of our
for our home loans business increased to `116 crore as
lending is Term Loans (mostly for two years and
on 31st March 2019 from just `2 crore a year earlier.
above). We have a robust verification methodology
where we check assets, governance practices, capital
Gold loans
and balance sheet strength, and promoter involvement.
We offer instant gold loans across the table at many of our We focus on completely understanding all the above &
bank branches with attractive interest rates and other key parameters and once we are convinced, we
repayment options. We provide a simplified banking start with small ticket size loans and gradually build upon
experience for our gold loan customers and cover it.
complete safety of collaterals with easy documentation
and faster turnaround time (TAT). Gross AUMs for our Gross AUMs for NBFC, HFC, MFI and AFC lending business
gold loans business increased to `49 crore as on 31st increased by 65% to `2,511 crore as on 31st March 2019
March 2019 from `26 crore a year earlier; gold loan from `1,525 crore a year earlier. Responding to macro
disbursements grew 128% year on year to `67 crore. headwinds facing the NBFC sector, we remained
cautious in the second half of the previous fiscal. NBFC,
Small and mid-corporate assets HFC, MFI and AFC lending disbursements grew 27% year
on year to
As on 31st March 2019, small and mid-corporate assets
`2,399 crore in FY 2018-19.
comprised ~17% of gross AUMs. In small and mid-
corporate assets, we cater to small and medium
Real estate group (REG)
enterprises for their business banking, working capital
and trade finance needs. We also service Non-Banking Real estate companies require a constant cash stream,
Financial Companies (NBFCs), Housing Finance right from the under-construction stage to the handover
Companies (HFCs), Micro Finance Institutions (MFIs) for stage to ensure timely delivery of housing or
onward lending and Real Estate Developer for commercial units. At AU Bank, we primarily serve credit
construction finance. requirements of small builders, who operate in affordable
housing segment with smaller projects and target to
complete the project between 18 months to 24 months. In
86|

this vertical, we typically do last
Annual Report 2018-

mile funding towards project completion. Gross AUMs Recurring Deposits. Total deposits grew 145.1% year on
Corporate
for this segment’s lending business rose to `801 crore year to `19,422 crore in FY 2018-19; total number of
as on 31st March 2019 from `779 crore as on 31st March deposit accounts increased 94% y-o-y to 10,28,726.
2018; disbursements in FY 2018-19 were at `440 crore
versus We are driving Savings Account (SA) opening digitally
`481 crore in FY 2017-18. on tablets that offers Aadhar validation through
biometric identification along with a printer. It enables
Liabilities and branch banking our team to seamlessly open an account without any
As a bank, our objective is to be an integral part of our forms, documents or photographs. Currently, over 80%
customers’ life by empowering them with financial of our SAs are being opened every month through
products and services whenever they need. Today, we TABs. We are rolling out Current Account (CA) sourcing
have digitally on tablets as well. We increased thrust on the
Statutory
408 branches (including 86 banking outlets), along with CA segment with a separate specialist team and have
67 business correspondents, 83 asset centres, 14 offices developed a specialised team for government business in
and 543 ATMs across 11 states and a Union Territory. Rajasthan, Punjab and Delhi.
We have an entrenched contiguous distribution franchise
addressing customers across Tier I to Tier VI regions with During the year under review, we focussed significantly
multiple financial products and services. on building a granular retail deposit base. We are also
increasing the share of retail in savings accounts and
We offer an entire bouquet of deposit products, including term deposits.
Current Account, Savings Account, Term Deposits and
Deposit account mix

(` in crore)
Financial year Current Account Savings Account Term Deposits Total deposits
Financial
FY 2017-18 392 1,742 5,790 7,923
FY 2018-19 1,082 2,508 15,832 19,422
Building granular retail deposit base
(Nos.)
Financial year Current Account Savings Account Term Deposits Total deposits
FY 2017-18 22,838 4,50,204 58,020 5,31,062
FY 2018-19 47,783 8,73,031 1,07,912 10,28,726
Our branches cross-sell the entire bouquet of asset

general insurance policies with premiums amounting
products. During FY 2018-19, our branches sourced `810
to `120 crore and 30,229 health insurance policies with
crore of asset products.
premiums amounting to `12 crore.
We are strongly focussing on building new avenues.
Recently, we received the RBI’s approval for 142 new
During FY 2018-19, we did 1,539 trade and remittances
banking outlets. We have identified 27 key locations,
transactions amounting to `425 crore.
including in Mumbai, Delhi and Pune for the first phase.
We provide debit card offerings to our SA customers in
collaboration with Visa and Rupay. We made locker facility
Digital bank
available at 238 branches and marketed lockers during Digital banking plays a pivotal role in delivering banking
FY 2018-19. We successfully installed 2,200 Point-of-Sale services with ease, resulting in superior customer
(POS) machines. satisfaction. As a constantly evolving bank, we have
been investing in our digital banking franchise. Our
We offer a wide basket of third-party products such as digital products and services will enhance customer
mutual funds (including SIPs), life insurance, health convenience and delight and reduce our cost of
insurance, motor insurance, general insurance and fire acquiring customers and operating expenses, expand
insurance. As on 31st March 2019, our mutual fund AUMs our reach and increase our revenue per customer. Our
stood at `42 crore. During FY 2018-19, we sourced 62,792 digital offerings include an instant Savings Account and
life insurance policies with premiums amounting to consumer finance loan.
`132crore; 2,93,337
86|
Instant Savings Account

of `10.55 crore and disbursed `20.24 crore through
We launched a new age instant Savings Account, AU these BOs in FY 2018-19. Aadhaar seeding is a process by
ABHI. One can open an ABHI account by just downloading which Aadhaar numbers of residents are included in the
the AU ABHI App and registering using the Aadhaar service delivery database of the Bank. This is useful for
number, PAN and other minimal details. direct benefits transfer. We seeded ~54,000+ accounts
as on 31st March 2019. We organised more than 300
Savings Account opened via AU Abhi financial literacy camps to provide comprehensive
education regarding the benefits of formal banking to over
FY 2018- FY 2018- FY 2018- FY 2018- 23,000+ people.
19 (Q1) 19 (Q2) 19 (Q3) 19 (Q4)
AU Abhi (Nos.) 219 5,072 5,322 5,313 We intend to launch 1,000 ATMs under at the Atal Seva
Kendra in the interiors of Rajasthan, of which 251 had
Consumer finance loans commenced operations as on 31st March 2019.
We offer consumer finance loans through a fully digital
paperless platform. The entire loan is processed digitally TREASURY MANAGEMENT
either by sales personnel at the point of sale or by
Our treasury department is primarily responsible for asset
customers themselves, thereby reducing operational
liability management (ALM); effective fund planning and
processes and costs. We also offer consumer durable loans
positioning; day-to-day liquidity and fund management;
in partnership with ‘Snapmint’, a digital platform, where
managing statutory reserves in adherence to and
we offer cashless Equal Monthly Instalment (EMI)
compliance of the statutory guidelines and judiciously
options to customers purchasing consumer durables
managing investments and trading portfolio as per
from various online retailers. Consumer finance loan
internal policy framework of the Bank. In addition, risk
disbursements through our digital platform grew from
management is key focus for the Bank whereby market
`8 crore to `16 crore in FY 2018-19.
risk, funding risk, interest rate risk and liquidity related
risks are effectively monitored and managed. The
FINANCIAL INCLUSION Treasury, along with Financial Institutions Group (FIG)
maintains close interface with financial markets and
We drive financial inclusion programmes across the
participants for augmentation of counter-party lines for our
remotest part of the markets that we serve in India. We
Bank’s balance sheet management.
enjoy wide market penetration and have a deep
understanding of our markets, which enable us to
create a platform for fostering financial inclusion. The treasury on a day-to-day basis focusses on fund
management, compliance with regulatory requirements of
At AU Bank, we have benefitted a million plus of Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and
underbanked and unbanked Indians with our financial Liquidity Coverage Ratio (LCR), and managing liquidity and
inclusion initiatives. About 62% of our branches are in interest rate risks. We maintain a portfolio of government
rural, semi-urban and unbanked rural (UBR) areas. We are securities, in line with the regulatory norms governing
participating in various financial inclusion initiatives such the SLR. SLR securities are primarily retained as Held to
as the Pradhan Mantri Jan Yojana, Pradhan Mantri Jeevan Maturity (HTM), while some portions are held as Available
Jyoti Bima Yojana, RuPay cards, Pradhan Mantri Suraksha for Sale (AFS). We concentrate on optimising yield on the
Bima Yojana. overall portfolio while maintaining an appropriate portfolio
duration within the overall risk framework and under the
oversight of our internal policy parameters.
We appointed 86 Banking Outlets (BOs) at 86 unbanked
rural centres. We opened 33,619 accounts with a balance
Increasing proportion of deposits further diversifying the funding profile

Funding sources FY 2018-19 (Q1) FY 2018-19 (Q2) FY 2018-19 (Q3) FY 2018-19 (Q4)
Deposits + borrowings (` in crore) 16,874 20,699 23,508 28,036
Deposits (%) 59.3 62.2 62.4 69.3
Refinance from FIs (%) 22.4 23.2 22.7 18.6
NCDs (%) 14.3 9.6 8.5 6.1
Loans from Banks and NBFC (%) 1.9 1.7 1.2 0.8
Tier II capital (%) 1.5 1.1 3.1 2.6
CBLO*/line of credit/ 0.6 2.2 2.1 2.7
inter-bank/others (%)
Total (%) 100 100 100 100
*Collateralised borrowing and lending obligation
Annual Report 2018-

Cost of funds trend
Corporate
and managed through investments and borrowings in
appropriate buckets.
(In %)
FY 2018-19 (Q1) FY 2018-19 (Q2) FY 2018-19 (Q3) FY 2018-19
(Q4) Debt Capital Market (DCM) Desk
7.9 7.8 7.9 8.0
During FY 2018-19, we started a DCM desk for
investments in short-term and medium-term bonds and
Our incremental cost of funds stood at 7.65% in FY 2018- debentures, enhancing return on funds, as well as to
19 due to tight systemic liquidity. Our cost of deposits create high-quality liquid assets to aid in regulatory LCR.
(excluding certificates of deposit) stood at 7.27%. DCM undertakes investments, origination and trading of
bonds, and works closely with asset managers, insurance
As on 31st March 2019, we maintained Statutory Liquidity companies, other banks and market participants.
Ratio (SLR) investments of `5,061 crore (versus
Statutory
requirement of `4,009 crore) in the form of Update on Financial Institutions Group (FIG)
government securities/ SDLs (held to maturity) and
Financial Institutions Group (FIG) is responsible for
government securities/T-Bills (available for sale). There
managing overall relationships with various financial
was no Mark-to-market (MTM) provision/loss during FY
market participants such as banks, mutual funds,
2018-19 for both SLR and non-SLR portfolio. In FY 2018-
insurance companies, Development Finance Institutions
19, we also maintained a healthy Liquidity Coverage Ratio
(DFI) and multilaterals, as well as associates and
(LCR) of more than 100%, well above the minimum
intermediaries such as credit rating agencies, legal firms
requirement of 70% till December 2018 and 80% from 1st
and stock exchanges. FIG also facilitates the raising of
January 2019. We have built a profitable and high-quality
medium-term/long-term liability for AU Bank depending on
non-SLR investment book of ~`1,070 crore to offset
our funding and ALM position. The group also helps in
negative carry on account of incremental cost of funds to
setting up fund-based and non-fund-based limits with
maintain SLR and LCR.
Financial
various counter parties and market participants.
Our treasury reported a profit of `6.9 crore in FY 2018-19.
During the year under review, we continued to grow our
Liquidity, interest rate and ALM management relationships with banks and financial institutions in
both private and public sectors through mutual
We continue to maintain sufficient liquidity and counterparty limit set up for ensuring various inter-bank
contingency buffer in the wake of volatile markets. We transactions and liquidity management.
have strengthened and diversified our liquidity profile in
view of additional regulatory requirements through a We tied-up with various banks to ensure availability of
mix of long-term deposit mobilisation and rupee trade and remittances products for our clients. We
borrowing in the form of re-finance from various successfully facilitatedinward and outward foreign
domestic financial institutions. currency transactions, including issuances of trade
instruments (letters of credit and bank guarantees) and
The treasury closely works with the internal team and processing of trade payments within the capacity of an
monitors deposit mobilisation and competitive AD-II category bank.
landscape on interest rates to broad base the Bank’s
deposit franchise. The treasury further optimises cost
of funds
to enable branches to mobilise deposits by offering As part of liquidity management measures, we continued
competitive rates of interest, keeping in view the positions are efficiently monitored under the guidance of the Asset
prevailing interest rate scenario. and Liability Management Committee (ALCO)
In FY 2018-19, we established a desk for trading

government bonds and highly rated money market
instruments. We endeavour to generate trading surplus
by prudently taking advantage of interest rate
movements through proprietary positions at appropriate
levels. During the year, the Bank also actively
participated in Open Market Operations (OMO) bond
buying programme of RBI and generated capital gains
from SLR portfolio.
Our portfolios’ asset-liability profiles Structural Liquidity

Statement (SLS) and Interest Rate Sensitivities (IRS)
88|
to enhance our relationship with domestic
Development Financial Institutions (DFI) and
availed
Growinglong-term, low-cost refinance facilities
the right way
under various schemes. This enabled us to
AU Small Finance
continue providingBank
long-term assistance to
various underbanked and underserved
customers in rural and semi-urban locations
and improve ALM in these branches.
CREDIT MANAGEMENT
Credit underwriting is at the core of our
frontline functions and plays an active role in
portfolio building within the accepted risk
appetite limit of the organisation. We have
built a formidable credit team that uses in-
house field investigation techniques to evaluate
and analyse customers’ income and repayment
ability. We have a robust and comprehensive
credit assessment framework as a large
proportion of our customers belong to the
underserved
Annual Report 2018-

segment of the society and are primarily first-time
purchasers of financial products. Collections Approach
We focus on inculcating a practice of proactive collections
We have a separate credit team for each business vertical, rather than reactive collections.
which evaluates prospective customers’ business needs,
identifies expansion plans and analyses their ability to INFORMATION TECHNOLOGY
repay. We have a three-layered system of assessment,
which includes visits by credit officers, relationship Our best-in-class technology enhances customer
officers and business officers to inspect the business and convenience and streamlines operations to reduce
collateral quality. costs. Alongside our transition onto a banking platform,
we underwent a major technology upgradation across
Legal check and organised setup: We have a strong different business lines and implemented modern
central legal team with experience and domain knowledge hardware, software, risk management products and
that facilitates both external and internal legal checks. solutions commensurate to our size. This modern
We conduct two-level checks of title papers and legal infrastructure will support our banking journey for the next
reports and have enlisted legal persons across all few years.
states and branches.
Our core technology stack (CBS) is procured from Oracle
Technical setup: We have a centralised technical team Corporation and our other key systems include customer
with experienced coordinators for both external and relationship management application, treasury application,
internal technical checks. We also have appointed valuers expense management system, compliance and others
across all states and branches. encounter regular upgrades and integration.
Risk Containment Unit (RCU): Our regional RCU teams Our technology infrastructure is a robust yet flexible
conduct a detailed document verification and thorough architecture, which allows us to foster partnership with
check on several parameters before disbursing loans. digital applications of other technology and IT partners.
Post disbursal monitoring: We have put in place a We have strategically aligned our skilled workforce into
post disbursal monitoring process to help maintain three focussed IT sub verticals viz: Build the Bank, Run the
portfolio quality. This also helps our internal and Bank and Govern the Bank to ensure hassle-free banking
external audit teams to ensure adherence to policy and for our customers and growth of our organisation.
improve the documentation process. The monitoring of
working capital limits also falls under post disbursal We will continue to upgrade our technology systems
monitoring and is being conducted regularly for all with automated, digitised and other technology-enabled
working capital products across the Bank. platforms and tools. A greater adoption of our digital
service delivery mechanism and innovative applications will
enable us to be more efficient and customer-friendly.
COLLECTION MANAGEMENT
At AU Bank, collection management is one of the key Information technology is a key tool, which can help us
functions ensuring our stable asset quality. Our in delivering banking services to a broad spectrum of
collection management function is streamlined by key customers. During the year under review, we equipped our
attributes such as geography, delinquency, products branches with paperless and faster customer
and customer repayment history. onboarding processes across products.
We focus on regular customer engagement and emphasise During FY 2018-19, we worked on bringing banking to
Business-to-Employee (B2E) communication. We are the fingertips of our customers by implementing login
focussing on capturing profile data of customers to ensure via fingerprint/PIN on AU Bank’s mobile app. The app
we develop a strong customer database. Our robust MIS was optimised to support multiple payments, scheduled
and reporting ensure regular updates to management. payments, IMPS and other such features.
Over 85% collection is in-house, which enables us to
maintain superior asset quality. We have specialised For our corporate customers, a new ‘Corporate Internet
partners in select metro and micro markets for bucket 1 Banking’ platform was launched. For further empowering
and bucket 2 cases, which is an efficient model to manage our customers, we have integrated our systems with one
efficiency and cost. of the largest payment gateway aggregator, CCAvenue;
integration with other aggregators including Bill Desk is on
90|
the cards. This will help our customers to make As on 31st March 2019, the no. of employees
Corporate
payments to various merchants directly from their bank employed were 12,623.
accounts.
During the year under review, we implemented Rupee

COMPLIANCE
Power, a paperless two-wheeler loan origination system, At AU Bank, compliance starts at the top. Our Board
which enables us to process two-wheeler loans faster. of Directors and Audit Committee are responsible for
overseeing the management of compliance risk and
On one hand, we are focussing on implementing cutting- implementation of the compliance risk management
edge solutions in banking, on the other, we are framework across the organisation.
concentrating on enhancing our systems’ stability and
sustainability. Our disaster readiness has been tested in all Compliance with the policies, rules and regulations are not
Statutory
scenarios to ensure there is no business disruption beyond just the responsibility of the specialist compliance staff, but
the stipulated threshold. is a shared responsibility of all AU Bank employees.
Our business productivity and infrastructure To build a ‘compliance culture’ within the Bank, we
optimisation efforts have resulted in dual network promote awareness of compliance obligations and ethical
connectivity at most of our branches to maximise values across the organisation. The key elements for
business uptime. Error free and rule-based automated building and maintaining a strong compliance culture in the
computation of various banking charges are also live to organisation are as follows:
enhance staff productivity.
Leaders’ engagement: The Board and senior
Serving India’s vision of financial inclusion Aadhar management actively participate, provide direction and
Enabled Payment System (AEPS) on Micro ATMs and vision within the defined compliance and risk
Financial
OFF US Card Transition have been implemented to management framework. We have a well-defined
serve the respective sector. structure where the senior management is involved in
monitoring operations of the Bank on an ongoing basis.
HUMAN RESOURCE We have various Board-level and Board-delegated
committees where the Board members and the senior
AU Bank has built a culture that is the key enabler for management are apprised of the current affairs of AU
progress of our people and enrich their experience of Bank.
working with us.
Policies and procedures: We have a set of well-
We have a well defined HR Structure and processes that documented policies and procedures in place and operate
focus on Talent Acquisition, Performance Mapping and within the framework defined by the regulator and the
Rewards & Recognitions. The focus for all HR Processes policies approved by the Board.
primarily has been around the three facets of Build,
Connect and Reimage. Monitoring: We have a robust monitoring framework in
place. Audit, risk and compliance departments conduct
AU Bank offers the employees a wealth of opportunities regular reviews to ensure that our operations are within
to grow both professionally and personally while engaging
with them consistently. The distinguished performances the defined framework. These functions ensure that we
are recognised under the rewards framework. As a ready operate on the laid down/defined principles, guidelines and
reference, during FY 2018-19, events were organised at policies, thereby reducing risk and uncertainty through the
overseas locations to celebrate the success of our people. establishment of sound governance mechanism and strong
compliance culture. These three functions roll up to the
As part of Employee Connect and Engagement, Audit Committee and Board through managerial hierarchy.
Town Hall meetings and Regional Leaders’ Meet are
regularly conducted. Training: We ensure that employees are educated on our
organisation’s internal policies and external regulations
We are also associated with Government of India’s Skill in a regular and influential way. We have a dedicated
Development Programme for providing employment training department in place, which ensures that key
opportunities for youth in rural & semi-urban India. information is supplied to all our employees. We have
open communication channels as well where employees
Employees are granted ESOPs at AU Bank; this not only can approach various departments and senior
strengthens the pride and ownership but leads to inclusive management officials for guidance and resolution of their
growth for employees and the Bank. queries.
Annual Report 2018-

Technological support: We are a tech-led Bank,
• Our Internal Audit function performs independent
where we significantly rely on systems and technology.
and objective assessments. It monitors adequacy,
Controls are implemented at system levels to ensure
effectiveness and adherence to internal controls,
that all transaction-based requirements/limits are
processes and procedures instituted by the management
adhered to. Systems and applications are used for
and extant regulations
monitoring transactions as well as for ensuring that post
facto controls are in place. • Following RBI’s guidelines, we have adopted a robust
Internal Audit policy, which drives the conduct of risk-
Incident reporting and case management: Incident based internal audit (RBIA) across all auditable entities
reporting and case management is an important aspect of
our compliance programme to ensure that we can track • The audit frequency of auditable units is aligned with the
and address any misconduct. Being aware of non- risk profile of each auditable unit
compliance is half the battle won, when it comes to • As part of audits, internal audit also provides process
mitigating risks. Through regular monitoring programme improvement recommendations to the management and
and system controls, we can identify any the same is tracked/followed up for implementation
misconduct/noncompliance/ violation. We take
appropriate action in all such cases. • As part of meeting management expectations, in
addition to the approved internal audit plan, internal
We believe integrity, ethics and compliance are important, audit also carries out certain management-advised
and it is reiterated to employees through policies and audits based on specific areas/triggers identified and
trainings. Ensuring that we have our finger on the pulse of communicated by the management/senior leadership to
changing laws and regulations helps us proactively steer internal audit
the organisation in accordance with the requirements. • Moreover, the internal audit function conducts self-
Effective technology, and continuous education help assessment of our internal financial controls, adequacy
set a positive and rewarding culture of compliance and operating effectiveness of such controls in terms of
across the Bank. the Companies Act, 2013
Our Audit Committee is appointed by the Board of
INTERNAL CONTROL SYSTEMS Directors and it assists the Board in reviewing auditing and
accounting matters and risks related thereto. It assesses
At AU Bank, our management is the first line of defence
the robustness, adequacy and reliability of our internal
and is primarily responsible for ensuring adequate and
control systems and provides assurance to stakeholders
effective internal control systems. Risk, Compliance and
accordingly.
Internal Audit together form the governance function.
Internal audit is the third line of defence operating SWOT ANALYSIS

independently with functional reporting to the Audit
Committee of the Board. It works in close conjunction with Strengths
Risk and Compliance functions (second line of defence) Our capabilities and resources that enable us to grow
to ensure a strong overall governance mechanism and sustain in the competitive banking landscape:
within the Bank.
• Established as a robust retail-focussed scheduled
To bring in more efficiencies and to eliminate commercial bank with strong brand recognition in the
duplication, Internal Audit and Risk and Compliance markets we operate in
functions leverage each other’s work without
compromising on the independence. This in turn results • Offers a well-balanced product portfolio enabling us to
in better coordination and total assurance on all the penetrate different customer segments and helping us
important areas/processes/ functions of our Bank. diversify our revenue streams
• Extensive phyigital distribution network enabling efficient
• Our Internal Audit department evaluates business and delivery of products and services to customers across
controls risks of all business processes and branches urban, semi-urban and rural (Tier I to VI) centres
to create a risk-based internal audit plan, aligned to
the regulators’ expectations. This risk-based Internal • Strong technology architecture helping efficient and
Audit plan is approved by the Audit Committee seamless operations
• Led by experienced Board of Directors and leadership
team
92|
Weakness • New retail products—gold loan, home loan, two-wheeler
Corporate
loan, agri-SME loan and consumer durable loan—hold
Aspects of the business that needs to be improved to
immense growth potential
minimise risks in our business:
• Scaling of third-party products (mutual funds, general
• Four states (Rajasthan, Madhya Pradesh, Maharashtra insurance, health insurance and life insurance)
and Gujarat) together account for ~80% of our loan
Threats
book
We are identifying potential threats to our business, owing to
• Significant concentration of wheels in total loan assets
evolving macroeconomic factors and consumer perceptions:
Opportunities
• Growing competition intensities from other banks and
We are consistently identifying potential areas where
financial institutions
Statutory
we grow and enhance market and brand prominence:
• With several new banks, fintech companies and existing
• Leveraging technology, along with doorstep servicing banks vying for the same talent pool, nurturing and
would enable us to rapidly gain market share retaining human capital may get difficult
• Significant exposure in underpenetrated regions offers • Volatility in global or domestic economy and political
strong growth potential uncertainty might hamper growth
Financial
Annual Report 2018-

Board’s Report
To
The Members,
AU SMALL FINANCE BANK LIMITED
Your Board of Directors has immense pleasure in presenting the 24 th Annual Report of AU Small Finance Bank Limited
covering the business and key operational highlights of your Bank together with Audited Financial Statements for the
year ended on 31st March 2019.
A. BUSINESS OUTLINE AND FINANCIAL PERFORMANCE HIGHLIGHTS

Financial Performance:
(` in crore)
y-o-y For the year ended
Particulars
Growth (%) 31st March 2018
31st March 2019
Total Income 58.26  3,410.86 2,155.25

Interest Income 2,948.84 1,767.19
Other Income 462.02 388.06
Interest Expenditure 1,606.35 826.73
Operating Expenses (excluding depreciation) 1,020.85 699.36
Profit before Depreciation, Provisions and Tax 24.56  783.66 629.16
Depreciation 61.75 53. 25
Provision for Income Tax 198.32 153.08
Other Provisions and Write-offs 141.78 130.79
Net Profit 30.74  381.81 292.04
Appropriations
73.01
Transfer to Statutory Reserve 95.45
20.50
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 37.80
0.00
Transfer to Capital Reserve 2.76
0.00
Transfer to Investment Fluctuation Reserve 22.12
0.00
Dividend (including tax/cess thereon) pertaining to previous year paid 17.48
during the year 0.50
Dividend (in `) (Per Equity Share) 0.75* 1,365.84
Surplus carried over to Balance Sheet 1,572.03
EPS
(After excluding Exceptional Items not annualised) 10.26
Basic 10.00
13.16
Diluted 12.90
*Proposed Dividend as recommended by the Board of Directors.
i. Key Highlights on Profitability • Net Interest Income grew by `402.02 crore from
`940.46 crore during FY 2017-18 to `1342.48
• Total Profit before Tax was `580.13 crore for
crore during FY 2018-19, with a y-o-y growth of
FY 2018-19 vis-à-vis `443.35 crore for FY 2017-18
42.75%
and Earnings Per Share (EPS) was `13.16
compared to `10.26 last year ii. Key Highlights on Balance Sheet
• Net Profit stood at `381.81 crore for FY 2018-19 • Balance sheet size grew to `32,623 crore as on
vis-à-vis `292.04 crore for FY 2017-18, with y-o-y 31st March 19 vis-à-vis `18,833 crore as on
growth of 30.74% 31st March 18 with y-o-y growth of 73%
• CASA increased by `1456.61 crore to `3590.09
crore during FY 2018-19 from `2,133.49 crore
during FY 2017-18, registering a growth of
94|

68.27%
Annual Report 2018-

• Capital Adequacy Ratio stood at same level, i.e. in line with the Dividend Distribution Policy of the Bank.
Corporate
19.31% as on 31st March 2019 vis-à-vis 19.31 % The Policy is hosted on the website of the Bank and can be
as on 31st March 2018 viewed at www.aubank.in/au-notice-board
iii. Key Highlights on Asset Quality
Closure of Share Transfer Books and Record Date
• The Return on Equity (RoE) stood at 14% and the
for Dividend
Return on Asset (RoA) stood at 1.5%
The Register of Members and the Share Transfer Books of
• Gross NPA and Net NPA remained stable at 2.0%
the Bank will remain closed from 20th July 2019 to 26th July
and 1.3%, respectively, as on 31 st March 2019 as
2019 (both days inclusive) for the purpose of the 24 th AGM
compared to 2.0% and 1.3 %, respectively, as on
of the shareholders of the Bank to be held on 26th July 2019
31st March 2018
and for determining the names of the members who would
iv. Key Operational Highlights be entitled to the dividend, if any, declared by the Bank for
Statutory
• During FY 2018-19, your Bank’s disbursement the financial year ended 31st March 2019. The said
rose to `16,077 crore vis-à-vis `10,825 crore in dividend shall be paid to those members whose names
FY 2017-18, registering an increase of 49%. appear on the Register of Members of the Bank as on 19th
July 2019.
• As on 31st March 2019, your Bank’s distribution
network stood at 322 Branches, 83 Asset Centres, Transfer to the Investor Education and
86 Banking Outlets (BOs) and 67 Business Protection Fund
Correspondents (BCs), 14 Offices and 543 ATMs
spread across 11 States and Union Territory In terms of Sections 124 and 125 of the Companies Act, 2013
(the Act) read with the Investor Education and Protection
• Keeping an objective of making ‘Digital Bank as
Fund Authority (Accounting, Audit, Transfer and Refund)
good as Traditional Bank’, in its second year of
Rules 2016, dividend that remain unpaid or unclaimed
operation, your Bank focussed on enriching the
for a period of seven years from the date of transfer are
‘Customer Phygital Experience’ by creating a
Financial
required to be transferred to the Investors Education and
robust technology platform to create a new age
Protection Fund. There is no unclaimed/unpaid dividend
Digital Banking
liable for transfer to the Investors Education and Protection
Management Discussion & Analysis section covers the Fund for the year under review. The Bank has uploaded
industry overview, financial and operating performance of the details of unclaimed dividend amounts lying with the
the Bank and forms part of this Annual Report. Bank on its website and can be viewed at
https://www.aubank. in/unpaidunclaimed-dividend-
Change in the Nature of Business details
There is no change in the nature of business of the Bank
Branch Banking and Liability Products
for the year under review.
In line with the Government of India’s focus, your Bank is
Dividend committed to increase the reach of formal banking services
across the country and extend banking services to the
Your Board of Directors is pleased to recommend dividend
‘belly of the nation’.
for 2nd consecutive year to reward its shareholders with
7.5% i.e., `0.75/- per equity share on face value of Rupee 10/-
The Branch Banking and Liabilities product suite caters
each for the year 2018-19 (previous year 5% i.e. `0.50/-
to the financial needs of all set of customers, including
per equity share) subject to the approval of the members in
self-employed, salaried individuals, children, women
the 24th Annual General Meeting (AGM). There was no
entrepreneurs, senior citizens, companies, societies,
interim dividend declared during the reporting period.
trusts, educational institutions, hospitals, government
corporations and local bodies among others. Our wide-
The total outgo on account of dividend inclusive of taxes,
ranging product suite includes Savings Account, Current
for FY 2018-19 is `26.43 crore which represents a pay-out
Account, Term Deposit, Locker, Bank Guarantee, Gold
of 6.92% of the Bank’s profit. Loan among others. Through our empanelled partners, we
also provide Point of Sale (POS) for business needs, Life
In terms of Regulation 43A of the Securities and Exchange and Health Insurance, along with Mutual Fund investment
Board of India (SEBI) (Listing Obligations and Disclosure solutions for customers.
Requirements) Regulations, 2015, the Bank adopted
Dividend Distribution Policy and the dividend proposed is Your Bank is steadily building a granular deposits book
based on simple and clear value proposition, competitive
interest rate on deposits, superior customer service and
94|
achieved strong traction in CASA. During the FY 2018-19,

transactions such as cash withdrawal and cash deposit.
Bank expanded its presence to 543 ATMs as on 31st
March, 2019 vis-à-vis 292 ATMs as on previous year end. AU Bank offered a wide range of services through BOs.
Besides opening bank accounts, BOs are also disbursing
loans in rural areas. The BOs can open accounts, conduct
Financial Inclusion
Aadhar-based and card-based deposit and withdrawal
Small Finance Banks were set up with the objective of transactions, non-financial transactions like balance
enhancing financial inclusion and offer banking services in inquiry, mini-statement, etc. and can share leads of all
India by providing a saving vehicle and supplying credit to other AU products via the AU Business App. We
small business units, small and marginal farmers, micro encouraged them and conducted 300 plus literacy camps
and small industries and other unorganised entities at these locations to provide comprehensive education
through high-end technology and low-cost operations. regarding the benefits of formal banking to over 23,000
people. The camps were oraganised via Nukkad Natak to
In the FY 2018-19, your Bank exceeded the benchmark engage rural population to understand benefits of banking
targets prescribed under the licensing conditions and in their local language.
further contributed to Financial Inclusion through
several initiatives. In the FY 2018-19, the unbanked rural BOs have opened
33,619 accounts in these scantily populated areas.
With around 62% of the total branches in Semi-Urban, We focussed not just on account opening in these areas,
Rural and Unbanked Rural areas your Bank expanded but also disbursed loans of `20.24 crore. Over 1,12,264
reach to the hitherto excluded population and even in financial transactions, including cash deposit and cash
Metropolitan and Urban Area. Your Bank opened 4,03,000 withdrawal took place through these BOs.
deposit accounts and mobilised deposit of around `2200
crore from these areas. Your Bank added 16 new Apart from the above, your Bank also contributed towards
Unbanked Rural Branches in its reach, taking the total the government’s novel MUDRA Yojana and opened
Unbanked Rural branch count to 30. Your Bank also has 33,658 BSBD accounts with a deposit of around `12 crore,
86 Banking Outlets (BOs) in Unbanked Rural Areas of issued around 2,61,000 RuPay Cards and disbursed
Rajasthan, Madhya Pradesh, Gujarat, Punjab, Haryana MUDRA Loans to the tune of `3,482 crore in FY 2018-19.
and Maharashtra, which is a low cost alternative for
The Bank also launched Pradhan Mantri Jevan Jyoti Bima
providing banking services to take banking to the last
Yojana in FY 2018-19 and went live on an online module
mile. Banking Outlets not just offer Savings Accounts and and issued 650 policies under this scheme. The Bank also
remittances services but also encourages these outlets to launched Pradhan Mantri Suraksha Bima Yojana and shall
mobilise Term Deposits, Loans, Loan Repayments and soon go live with the Atal Pension Yojana.
other services. Together the BOs and the Unbanked Rural
Branches have opened 47,218 accounts in the Unbanked Retail Assets
Rural areas with a total deposit of `45.80 crore. In addition
to this, the Unbanked Rural Branches and BOs have Your Bank provides a wide range of retail asset products,
disbursed loans to the tune of including Vehicle Loans, Secured Business Loan to Micro,
`39.38 crore through 1,123 cases. Small and Medium Enterprises (MSMEs) and Small &
Medium-sized Enterprises (SMEs), Gold Loan, Agri-SME
The BO Model at AU Small Finance Bank Loan, Consumer Durable Loan, Home Loan and Education
encourages the following: Loan to cater to the entire financial lifecycle needs of
customers. Vehicle Loans and Secured Business Loans
Entrepreneurship: AU Bank has hand-picked dynamic constituted the bulk of the retail loan book and revenues.
individuals to take up the crucial responsibility of BOs
at a village level. Many of these are either engaged in The Bank would remain focussed on core retail segments
small-time employments like retail shops, juice shops, or with emphasis on contiguous deeper expansion in existing
were homemakers etc. These individuals are from nearby geographies and enter new geographies gradually. The Bank
villages, the local area trusts them and they understand would continue to focus on ‘customer delight’ by building
these customers better and are able to persuade them to strong and personalised relationships with retail clients and
use banking. AU Bank identified their entrepreneurial spirit serving their needs with the use of emerging technologies.
and encouraged them to become BOs and act responsibly. We customise our product offerings and features according
Your Bank organised regular training programmes for them to customer’s business needs after assessing the business
to gain a better understanding of the banking business and model of clients. This leads to deeper customer
customers’ needs. engagement in a cost-effective manner. Your Bank’s
operating model is lean, credit processes are robust,
Unbanked rural area empowerment: Areas that technology driven and cost efficient.
had no access to any form of banking, started banking
Annual Report 2018-

During the year, your Bank enriched its bouquet of product in compliance to regulatory requirement of the LCR
Corporate
offerings to its customers through ‘digital guidelines, while keeping the business requirements
empowerment’ by offering financial products and under consideration.
services via an online platform against a new set of
multiple collaterals. The Bank would continue to offer The Bank during the year continued to grow its relationship
and introduce new tailor-made products to service the with both public and private sector banks, by setting
financial needs of customers. up inter-bank limits and transacting in money market
instruments. At the same time, the treasury
Small and Mid-corporate Assets endeavoured to optimise cost of funds by encouraging
branches to mobilise deposits at competitive rate of
The Bank’s Small and Mid-corporate business caters to
interest in line with prevailing interest rates scenario.
the diverse needs of a wide range of corporate
customer segments, including SMEs, Agri-SMEs, Indian
Statutory
corporates, financial institutions, mid-market companies On the treasury systems front, the Bank has well-
established systems and platforms, including the RBI
and real estate businesses. This vertical offers a
platform e-Kuber, Treasury Management System by
comprehensive set of products and services to these
Credence Analytics, Structured Financial Messaging
customers, including term loan, working capital finance,
Systems (SFMS), National Electronic Fund Transfer
trade finance, lease rental discounting and other
(NEFT), Real Time Gross Settlement System (RTGS) and
services including finance to Non-banking Financial
Clearing Corporation of India Limited (CCIL) systems,
Companies (NBFCs), microfinance companies, Housing
which include money market and sovereign bond dealing
Finance Companies (HFCs) and for construction finance.
platforms. The Bank’s Treasury also has in place a robust
primary and secondary Data Centre and Disaster
The disbursements in this segment were `3,764 crore
Recovery Centre, in partnership with external vendors, to
against `2,877 crore in the previous year, registering a
secure the live systems, which are vital to the Bank’s
growth of 31% and Assets under Management stood
Financial
business continuity and Business Continuity Plan (BCP) for
at `4,129 crore, against `2,739 crore in previous year,
any contingency. All systems and platforms are working
registering a growth of 51%.
seamlessly as per the Treasury requirements. The
Treasury has also successfully implemented its BCP for
Under Business Banking, your Bank caters to all segments
any contingency.
of the businesses, including wholesalers, retailers, traders,
manufacturers, service providers, contractors, distributors,
The Treasury department is responsible for managing
educational institutes, healthcare institutes, etc. for
surplus funds by investing in SLR and high-quality Non-
fulfilling working capital needs, including day-to-day
SLR instruments as per the approved regulatory
operations, setting up of new units and business
frameworks and internal policies to get optimum risk
expansion.
adjusted returns. The Treasury has initiated and
maintained a Debt Capital Market (DCM) book in FY 2018-
Treasury
19 for short- and medium-term investments in bonds and
The Treasury Department of the Bank manages asset debentures, thus enhancing return on excess funds as well
liability gaps, fund planning, regulatory liquidity as create High Quality Liquid Assets (HQLA) to aid in
requirements viz Cash Reserve Ratio (CRR), Statutory regulatory LCR. The Treasury has also initiated active
Liquidity Ratio (SLR) and Liquidity Coverage Ratio (LCR) trading in
and investments portfolio
both SLR and Non-SLR of the Bank. The asset-liability Government securities to generate trading profit by
mismatches and interest rate sensitivities of the Bank are Committee. The treasury also successfully maintained appropriate
efficiently tracked through Structural Liquidity Statements liquidity buffers
& Interest Rate Sensitivity and judiciously managed with
various market investments and money market products.
On the other hand, the treasury is also responsible for
managing and optimising the cost of funds for the Bank
through efficient planning and mix of available resources.
The Bank meets its regulatory requirements on CRR

and SLR through efficient liquidity management and
investment in GOI securities, SDLs and T-Bills across
varying maturities. The portfolio durations were efficiently
managed in line with interest rate view and within the
overall risk framework provided in Investment Policy
and under the oversight of the Bank’s Investment
96|
capturing market movements.
Financial Institutions
Growing the right way Group (FIG)
Financial
AU Small Institutions
Finance BankGroup (FIG) managed the
relationship with financial market participants
covering Banks, Mutual Funds, Insurance
Companies, Development Finance
Institutions (DFIs) and Multilaterals, as well
as with associates and intermediaries like credit
rating agencies, legal firms, and stock
exchanges. The Bank enhanced its
relationship with domestic DFIs and availed
long-term, low-cost refinance facilities of
substantial amount under various schemes
for improvement in liquidity position. During
the year, FIG facilitated medium and long-
term liability for the Bank as per requirement
and arranged for the setup of fund based and
non-fund based limits with various counter
parties and market participants.
Annual Report 2018-

To provide cushion in extreme liquidity scenarios, the Bank
AU branches for third party tie-ups, ‘Nodal Account’ for
has been able to secure contingency lines from public and
aggregator and payment partners and ‘Mangalam Vishesh
private sector banks. The Bank has also tied up with
Account’ for letting customers sweepout to FD from their
various banks to ensure availability of trade and remittance
existing current account.
products for its clients and has successfully facilitated
inward and outward foreign currency transactions,
including issuance of trade instruments (Letter of Credit
Technology and Digital Banking
and Bank Guarantees) and processing of trade payments Your Bank’s continued its endeavour to become a digital
within the capacity of AD-II category bank. bank by creating best-in-class customer-centric solutions
and deliver superior customer experience. Leveraging an
The Bank empanelled with all the leading Stock omni-channel approach with a multi-product suite, the
Exchanges of India (i.e., NSE, BSE, MCX and NCDEX) for focus has been to create a trusted and recognised Digital
acceptance of the deposits to be placed by members of the Brand in the banking space.
exchange as margin collateral. This led to new business
avenues for the Bank in terms of deposit mobilisation. • Digital Brand
The purpose of your Bank has been to simplify
Investments
banking for all users. With this core principle for
The Treasury maintained SLR investments in the form building the Digital Brand and in order to create a
of Central and State Government Securities as per sustainable long-term business model, we have been
regulatory requirements of 19% of Net Demand and targeting to use 360° communication plans across
Time Liability (NDTL) within approved policy criteria in multiple digital and social media channels, the
terms of duration and risk profile. objective is to uplift the brand awareness and
consideration scores for your Bank, resulting in positive
Transaction Banking spill-over effects in traditional businesses too.
With innovative thinking and increased ownership, the
Bank remained committed to provide customers with the • Digital Properties
ease of banking and achieved greater convenience During the year, focus of the Bank remained to deliver
through following measures: a seamless omni-channel integrated solution that
ensured consistent high-level customer experience
• No deposit slips across all channels (website, internet banking, mobile
• Simpler customer instruction forms applications and chat bots). The Bank has been working
on state-of-the-art Digital Contact Centre that will be
• Extended banking hours used for higher customer acquisition and better customer
• Seeding of AU Bank account to receive Direct Benefit engagement through innovative models including virtual
Transfer (DBT) benefit Relationship Manager.
• Continuous enhancement in Personal Net Banking and • Digital Products

Mobile Banking
• Digital Assets
• Corporate Net Banking
Digital Asset is being designed with focus to deliver a
• Payment Gateway Integration seamless straight-through-disbursal process across
the various digital modes. Strategic and business
• Technology Support for Business Correspondents
partnerships and social media campaigns is being
• Aadhaar-enabled Payment Services (AEPS) extended to leveraged for customer acquisition. Existing and new-
BCs where AU customers can perform activities such to- bank customers shall apply and get loans through a
as Cash Withdrawal, Cash Deposit, Fund Transfer via well-defined credit and risk evaluation process.
Aadhaar, Balance Enquiry and Mini Statement.
• Digital Liabilities
• Card-based Transactions went live for providing services
to AU customers as well as other bank customers to AU Abhi App (mobile and web version) are being
withdraw cash from BOs/BCs points. deployed by the Bank for Customer acquisition
and faster account opening. Customers can open a
The Bank’s strategy is to become digital bank of choice
Direct Benefit Account (DBT) with Bank and this is an
and focus has been to offer the easy & convenient tech
important technology enabler for increasing the liability
solution to our customers. For this, your Bank started ‘AU
base customers.
Sewadwaar’ for collection of EMI/Insurance premium at
98|
• Digital Partnerships The Bank is using issuer ratings and short-term and long-
term instruments/bank facilities’ ratings that are assigned
Corporate
Leveraging partnerships for optimal customer experience
by the accredited rating agencies (i.e., India Ratings, CARE,
and increasing customer acquisition will be the focus for
CRISIL and ICRA) for its debt instruments. The credit rating
a fully operational Digital Bank. The various
of the Bank was upgraded by CRISIL from ‘A+/Positive’ to
partnerships being looked at are strategic, business and
‘AA-/ Stable’ and by ICRA Ratings from ‘A+/Stable’ to
technology with the objective of offering and facilitating
‘AA-/Stable’, covering debt instruments of the Bank in view
the latest and most competitive products to the
of strong consistent performance quarter to quarter.
customers of the Bank.
Ratings of Debt Instruments
Nature of the Debt Instrument Nature of Term India Ratings CRISIL ICRA CARE
Statutory
Non-convertible Debentures Long Term AA-/Stable AA-/Stable AA-/Stable -
Subordinated Debt/Tier II Bonds Long Term AA-/Stable AA-/Stable AA-/Stable -
Bank Loans Long Term AA-/Stable - AA-/Stable AA-/Stable Certificate of
Deposits Short Term A1+ A1+ - -
Transfer to Reserve
Further, the Bank issued 1,01,04,364 convertible warrants
In terms of applicable RBI regulations, the Bank has
to Camas Investments Pte. Ltd. to apply for, get issued and
transferred the following amounts to various reserves for
allotted 1 (one) equity share of the Bank at a face value
the financial year ended 31st March 2019.
of `10 (Rupees Ten) each (for every Convertible Warrant),
Transfer to Reserves for cash, in one or more tranches, at a price of `692.77
Amount transferred to Amount (` in crore) (Rupees Six Hundred and Ninety Two and Seventy Seven
paisa including a premium of `682.77), aggregating to an
Financial
Statutory Reserve 95.45
Transfer to Special Reserve U/s 36 (1) (Viii) 37.80 amount of `700,00,00,249 (Rupees Seven Hundred Crore
Transfer to Capital Reserve 2.76 and Two Hundred and Forty-Nine) (Warrants Subscription
Transfer to Investment Fluctuation Reserve 22.12 Consideration) within a period of 18 months from the date
of allotment of convertible warrants. The Bank received
partial amount of `175,00,00,063 (Rupees One Hundred
Securities Capital
and Seventy-Five Crore and Sixty-Three only) in respect to
During FY 2018-19, there was no change in the authorised the above convertible warrants.
share capital of the Bank and it stood at `35,00,000,000
(Rupees Three Hundred and Fifty Crore only). The paid-up Your Bank also raised Tier-II capital by issuing 5,000 (Five
capital of the Bank as on 31st March 2019 stood at Thousand) fully paid-up, unsecured, subordinated, rated,
`2,92,35,74,860 (Rupees Two Hundred and Ninety-Two listed, redeemable, non-convertible bonds with face value
Crore Thirty-Five Lakh Seventy-Four Thousand Eight of `10,00,000 (Rupees Ten Lakh Each) aggregating to
Hundred and Sixty only) consisting of 29,23,57,486 equity `500,00,00,000 (Rupees Five Hundred Crore only) being
shares at face value of `10 (Rupees Ten) each. classified as subordinated debt and categorised as Tier-II
capital Bonds under the Basel II framework. The said Bonds
During FY 2018-19, your Bank issued 43,30,441 equity were allotted to leading financial institutions and Banks.
shares at a face value of `10 (Rupees Ten) each, fully
paid-up for cash at an issue price of `692.77 (Rupees Six The Bank added `2,32,34,250 (Rupees Two Crore Thirty
Hundred and Ninety Two and Seventy Seven paisa Two Lakh Thirty Four Thousand Two Hundred Fifty) to the
including premium of `682.77) per equity share, paid-up equity share capital by allotting 23,23,425 equity
aggregating to an amount of `2,99,99,99,612 (Rupees shares of face value of `10 (Rupees Ten) each to employees
Two Hundred and Ninety-Nine Crore Ninety-Nine Lakh on exercise of options under Employee Stock Option
Ninety-Nine Thousand Six Hundred and Twelve only) to Plan 2015 (Plan A and Plan B) and ESOP Scheme 2016
Camas Investments Pte. Ltd. through preferential as per details mentioned below:
allotment.
Annual Report 2018-

Equity Shares allotted on Exercise of ESOPs
ESOP Plan -
Sr. No. Date of Allotment
2015 A ESOP Plan - ESOP Scheme
Total
2015 B 2016
1 14th August 2018 2,87,476 1,85,985 53,220 5,26,681
2 27th September 2018 7,16,465 8,32,353 3,960 1,552,778
3 11th December 2018 56,752 57,077 1,800 1,15,629
4 7th March 2019 2,048 15,299 1,10,990 1,28,337
Total No. of Shares 10,62,741 10,90,714 1,69,970 23,23,425
Employees Stock Option Plan (ESOP)

Based Employee Benefits) Regulations 2014 as amended
Employee Stock Option Schemes, duly approved by the from time to time. In terms of compensation policy of the
shareholders of the Bank enabled the employees to Bank, employees are granted options as part of Annual
participate in the future growth and financial success of Performance Review of their performance and to hire best
the Bank. The Bank provides its employees a platform talent at senior management positions. Several factors
to perform and display their long-term commitment including scale, designation, performance, grades, period
towards future growth of the Bank by way of rewarding of service, the Bank’s performance, criticality of role & their
them through Stock Options. The Employee Stock Option contribution is taken consideration for decision on nos.
Schemes have been devised in accordance with SEBI (Share of ESOPs to be granted to the employees.
The Bank’s shareholders had approved the following Employee Stock Option Schemes:
• EMPLOYEE STOCK OPTION PLAN 2015 - PLAN A

• EMPLOYEE STOCK OPTION PLAN 2015 - PLAN B
• EMPLOYEE STOCK OPTION PLAN 2016
• EMPLOYEE STOCK OPTION PLAN 2018
The details of vesting of various schemes are as follows:
ESOP Schemes Vesting Period
ESOP 2015 – Plan A Vesting Period % of Vesting of Options

1 year from the date of grant or at the time of IPO, 20%
whichever is later
Expiry of 1 year from 1st vesting 30%
Expiry of 2 years from 1st vesting 50%
Total 100%
ESOP 2015 – Plan B Vesting Period % of Vesting of Options
1 year from the date of grant or at the time of IPO 20%
whichever is later
Expiry of 1 year from 1st vesting 30%
Expiry of 2 years from 1st vesting 50%
Total 100%
ESOP 2016 Vesting Period % of Vesting of Options
Options granted under this scheme would vest after 100%
one year but not later than six years from the date of
1st vesting of options
ESOP 2018 Vesting Period
Options granted under this scheme would vest after 100%
one year but not later than six years from the date of
1st vesting of options
100|
Details of Existing ESOP Schemes as on 31St March 2019
Corporate
Particulars ESOP Plan A 2015 ESOP Plan B 2015 ESOP Scheme 2016 ESOP Scheme 2018
Date of Shareholders Approval 31 August 2015

st
31 August 2015
st
10 October 2016
th
07th August 2018
Total No. of Options Approved 38,36,058 49,33,194 21,00,000 49,33,200
Total No. of Options Outstanding at 31,08,020 30,56,541 13,87,321 -
the Beginning of the Period
Total No. of Options Granted - 1,146 86,864 20,13,928*
(during FY 2018-19)
The Pricing Formula/Price in ` 10.11 33.37 140 Market Price Linked
Options Vested (during FY 2018-19) 11,00,018 11,29,510 2,53,538 Nil
Options Exercised (during FY 2018-19) 10,62,741 10,90,714 1,69,970 Nil
Statutory
Total No. of Shares Arising as a Result 10,62,741 10,90,714 1,69,970 Nil
of Exercise of Options
Options Lapsed/Forfeited (during 30,032 43,672 1,99,255 46,980
FY 2018-19) (Available for Re-issue)
Total No. of Options Exercisable at 33,865 37,230 78,142 -
the End of the Year
Total No. of Options Outstanding at 2,015,247 19,23,301 11,04,960 19,66,948*
the End of the Year
Variation in Terms of Options No No No No
Money Realised by Exercise of Options 1,07,44,311.43 3,63,97,126.18 2,37,95,800 Nil
(during FY 2018-19) (in `)
Total No. of Options Granted to Please refer Note 1 Please refer Note 1 Please refer Note 1 Nil
Senior Management Personnel
Financial
(SMPs)
Please refer Note 2 Please refer Note 2 Please refer Note 2 Nil
Any other employee who received
a grant in any one year of options
amounting to 5% or more of options
granted during that year
Nil Nil Nil Nil
Identified employees who are granted
options, during any one year equal
to or exceeding 1% of the issued
capital (excluding outstanding
warrants and conversions) of the
Company at the time of grant
Diluted EPS of the Company after
considering the effect of potential Refer Note 4 -
equity shares on account of
exercise of Options
Impact of the Difference between
the Intrinsic Value of the Options Refer Note 4 -
and the Fair Value of the Options on
Profits and on EPS
Weighted Average Share/Exercise 10.11 33.37 140 No shares
Price of the Shares Exercised during were exercised under
the Year (in `) this scheme during the
year
Weighted Average Fair Values of the Please refer Schedule 18 (7) to Notes to accounts to Audited Financial -
Outstanding Options (in `) Results for FY 2018-19
*10,00,000 ESOPs under ESOP Scheme 2018 were granted to Mr. Uttam Tibrewal, Whole Time Director during the year and the same are subject to RBI approval.
Annual Report 2018-

Note 1
Following are the total no. of stock options that have been granted to the SMPs during the financial year ended
31st March 2019
No. of ESOPs
No. of No. of No. of ESOPs
ESOPs ESOPs
S. No. Name Designation Granted in ESOP Granted in ESOP Granted in ESOP Granted in ESOP
Plan-A 2015 Plan-B 2015 Scheme 2016 Scheme 2018
1 Deepak Jain Chief Financial Officer - - -

5,00,000
2 Manoj Tibrewal Group Head HR, - - - 5,00,000

Marketing & Distribution
3 Ashok Khandelwal Chief Compliance - - - 4,000
Officer
4 Sumit Madan Chief of Branch - - - 15,000
Banking
5 Mayank Markanday Chief Risk - - - 10,000
Officer
6 Rishi Dhariwal Chief of Secured - - - 7,500
Business Loan
7 Vijendra Chief of Operations - Assets - - - 5,000
Singh Shekhawat
8 Yogesh Jain Group Head Strategy - - - - 20,000
Treasury, FIG, DCM,
Wholesale Liability and
Investor Relation
9 Vinay Vaish Chief of Credit Risk - - - 4,000
10 Nitin Gupta Chief Audit Officer - - - 3,000
11 Manmohan Parnami Company Secretary - - - 3,000
12 Amiya Dikshit* Chief Technology Officer - - - 0
*Amiya Dikshit resigned and was relieved during FY 2018-19 and no ESOPs were exercisable during the tenure of his employment.
Note 2
Following are the details of Employees who received a grant in any one year of ESOPs amounting to 5% or more of
ESOPs granted during that year
No. of No. of No. of ESOPs No. of

S. No. Name Designation ESOPs Granted ESOPs Granted Granted in ESOP ESOPs Granted
in ESOP Plan-A in ESOP Plan-B 2016 in ESOP Scheme
2015 2015 2018
1 Uttam Tibrewal Whole Time Director* ---------------------------------------------------------------------------------- 10,00,000

2 Manoj Tibrewal Group Head HR, - - - 5,00,000
Marketing &
Distribution
3 Deepak Jain Chief Financial Officer ---------------------------------------------------------------------------------- 5,00,000
* 10,00,000 ESOPs under ESOP Scheme 2018 were granted to Mr. Uttam Tibrewal, Whole Time Director during the year and the same are
subject to RBI approval.
Note 3
The SEBI has prescribed two methods to account for stock grants: (i) the intrinsic value method and (ii) the fair value
method. The Bank adopts the intrinsic value method to account for the stock options it grants to the employees.
The Bank also calculates the fair value of options at the time of grant, using the Black-Scholes pricing model with the
following assumptions:
Particulars 31st March 2019
Risk-free Interest Rate (%) 7.30% – 8.03%
102|

Expected Life (years) 3 years – 5.5 Years
Expected Volatility (%) 37.28% – 38.39%
Expected Dividend Rate (%) 0%
Annual Report 2018-

Note 4
Corporate
The Bank measures the cost of ESOP using the intrinsic value method. Had the Bank used the fair value model to determine
compensation, its Profit after Tax and EPS as reported would have changed to the amounts indicated below:
(` in crore)
Year Ended Year Ended
Particulars
31st March 2019 31st March 2018
Profit after Tax as Reported 381.81 292.04

Add: ESOP Cost Using Intrinsic Value Method (Net of Tax) 25.11 9.24
Less: ESOP Cost Using Fair Value Method (Net of Tax) 36.38 12.51
Profit after Tax (Adjusted) 370.54 288.77
EPS
Statutory
Basic
- As Reported 13.16 10.26
- Adjusted for ESOP Cost Using Fair Value Method 12.77 10.14
Diluted
- As Reported 12.90 10.00
- Adjusted for ESOP Cost Using Fair Value Method 12.52 9.89
Particulars As on 31st March 2019 As on

31
st
March 2018
Stock Options Outstanding (Gross) 103.75 94.04

44.87 73.76
Deferred Compensation Cost 58.88 20.28
Financial
Outstanding
Stock Options Outstanding (Net)
The Bank has granted 10,00,000 stock options on Your Bank duly received approvals from Stock Exchanges and the
30th August 2018 under Plan D1 and 38,702 and 10,18,758 same were disclosed in compliance of Regulation 30
stock options on 27th October 2017 under Plan A3 and Plan
B5, respectively, to Whole time Director which are pending
for RBI Approval. Accordingly, these options have not been
considered for the purpose of computing the impact of
ESOP fair value on profit before tax.
Re-classification of Certain Persons from the

Promoter Group to Public Category
In pursuance to the Regulation 31A of SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, your Bank re-classified some of its promoter group
i.e., Mr. Niranjan Lal Aggarwal, Mr. Ajay Agarwal, Mr. Ashok
Kumar Agarwal, Mr. Baldev Agarwal, Mr. Dinesh Kumar
Agarwal, Mr. Mahender Kumar Agarwal, Mr. Manoj
Kumar Agarwal, Mr. Srikant Kedia, Mr. Suresh Chand
Kedia, Ms. Anita Aggarwal, Ms. Bina Agarwal, Ms. Chanda
Devi Kedia, Ms. Dropathy Jaipuria, Ms. Pinki Agarwal, Ms.
Sunita Gupta and M/s Natural Fab, who were not directly
or indirectly exercising control over the affairs of the Bank,
to public category. They were neither holding any key
managerial positions or representations of the Board of
Directors in the Bank, nor engaged in any management or
day-to-day affairs and also do not have any right either to
appoint any Director or an ability to control the
management or policy decisions of the Bank in any
manner.
102|
of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
Deposits
Being a banking company, the disclosures
required as per Rule 8 (5) (v) & (vi) of the
Companies (Accounts) Rules, 2014, read with
Sections 73 to 76 of the Companies Act, 2013
are not applicable.
Particulars of Loans, Guarantees and Investments

Pursuant to Section 186 (11) of Companies Act,
2013, loans made, guarantees given or
securities provided or acquisition of securities
by a Banking company are carried out in its
ordinary course of business and are exempted
from disclosure requirement in the Annual
Report. Hence, there is no disclosure being
made herein in this regard.
B. CORPORATE GOVERNANCE
The Report on Corporate Governance for FY
2018-19, along with the certificate issued by
Practicing Company Secretary, CS Mr. Manoj
Maheshwari, confirming the compliance to
applicable requirements related to corporate
governance as stipulated under Chapter IV of
the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 forms part of
this Annual Report as Annexure I.
Board and Board Committees

The Board of Directors holds fiduciary position and is
entrusted with the responsibility to act in the best interests
Annual Report 2018-

of the Bank. The Board at its meetings deliberate and
decide on strategic issues including review of business account the views of the Executive and Non-executive
Directors and assessed the quality, quantity and timeliness
policies, financial matters, discuss on business
of flow of information between the Management and the
performance and other critical matters for the Bank.
Board for effective discharge of their duties.
Committees constituted by the Board focus on specific
areas and take informed decisions within the framework
No sitting fees was paid to the Independent Directors of the
of the delegated authority and responsibility and make Bank for participating in the said meeting.
specific recommendations to the Board on matters
under its purview. Decisions and recommendations of the Independent Woman Director
committees are placed before the Board for consideration
and approval as required. In terms of the provisions of Section 149 of the Companies
Act, 2013 and Regulation 17 (1) (a) of SEBI (Listing
Board Meetings Obligations and Disclosure Requirements), Regulations
2015, your Bank continues to comply with the requirement
During FY 2018-19, seven (7) Board meetings were
and has one Independent Woman Director on its Board.
convened and held, the details of which are given in the
Corporate Governance Report, forms part of this report as
Board of Directors and Key Managerial Personnel
Annexure
I. The intervening gap between the meetings was within The composition of the Board of Directors of the Bank
the period prescribed under the Companies Act, 2013, is in accordance with the Banking Regulation Act, 1949,
Secretarial Standard I and as per SEBI (Listing Obligations & the Companies Act, 2013 and SEBI (Listing Obligations
Disclosure Requirements) Regulations 2015. and Disclosure Requirements) Regulations, 2015. As on
31st March 2019, the Board of Directors comprises seven
Committees of the Board (7) Directors, out of which five (5) are Non-executive
Directors. The Chairman of the Board and three (3) other
The Board places significant reliance on its committees
Directors are Independent (Non-executive Directors)
by delegating responsibilities to assist it in carrying out its
including one
function under its supervision and stewardship. It therefore
(1) Woman Independent Director. All the Directors have
remains crucial that effective linkages are in place between
rich experience and specialised knowledge in sectors
the committees and the Board as a whole.
covering banking, economics, law, finance, accountancy
and other relevant areas.
The Board Committees constitution is in acquiescence of
provisions of the Companies Act, 2013, the relevant rules
Your Bank’s Board consists of professionals who have
made thereunder, SEBI (Listing Obligations and Disclosure
the knowledge and experience required in the banking
Requirements) Regulations, 2015, Banking Regulation Act,
industry. The responsibilities of the Board inter alia include
1949, other guidelines issued by RBI from time to time
formulation of policies, taking new initiatives, performance
and the Articles of Association of the Bank. The details
review, monitoring of plans and pursuing of policies and
of the Board Committees of the Bank are disclosed in
procedures and ensuring that the Bank operates under the
the Corporate Governance Report, which forms part
regulatory framework laid down by the RBI for Banks.
of this report.
The remuneration/sitting fees paid to the Directors
Meetings of Independent Directors
during the year has been disclosed in the Corporate
Your Bank conducted a separate meeting of Independent Governance Report as Annexure I.
Directors consisting of Mr. Mannil Venugopalan,
Mr. Krishan Kant Rathi, Mr. Raj Vikash Verma and The following appointment on the Board was made
Ms. Jyoti Narang as prescribed under SEBI (Listing during the year.
2015 and Section 149(6) of Companies Act, 2013. Appointment of Mr. Narendra Ostawal as
Additional Director (Non-executive)
During the year under review, the Independent Directors
The Board of the Bank, in its meeting held on
of the Bank met on 26th April 2018 without the presence
17th January 2019, appointed Mr. Narendra Ostawal as
of the Non-independent Directors and Members of the
Additional Director (Non-executive) (DIN: 06530414) of the
Senior Management of the Bank.
Bank. Prior to this, he was appointed as a Nominee
Director on behalf of Redwood Investments Ltd., fund
At the said meeting, the Independent Directors of the Bank
advised by Warburg Pincus. Further, no remuneration was
inter alia reviewed the performance of the Non-
paid to Mr. Narendra Ostawal during the period under
independent Directors, the Board as a whole and
review.
reviewed the performance of the Chairman of the
Bank taking into
104|
The details of the brief profile of Mr. Narendra Ostawal is your Bank as defined under section 2 (51) of Companies
Corporate
available on the website of the Bank at www.aubank.in/ Act, 2013. There was no change in composition of Key
about-us/board-directors Managerial Personnel of the Bank.
Declaration of Independence Evaluation of the Directors, the Board and Its

The Bank has received necessary declarations from
Committees
each Independent Director under Section 149(6) and Pursuant to the provisions of the Companies Act, 2013,
149(7) of the Companies Act, 2013 and Regulation 16(1) Regulation 17 (10) and other applicable Regulations of
(b) and Regulation 25(8) of the SEBI (Listing Obligations SEBI (Listing Obligations and Disclosure Requirements)
and Disclosure Requirements) Regulations, 2015 (Listing Regulations 2015 and in consonance with Guidance Note
Regulations), that they meet the criteria of independence on Board Evaluation issued by the SEBI, the Board on the
laid down thereunder. recommendation of the Nomination and Remuneration
Statutory
Committee of the Bank carried out an annual performance
Retirement by Rotation evaluation of the Board as a whole and directors
individually. The Board also carried evaluation of the
In terms of Section 152 of the Companies Act, 2013,
working of its various Committees for the year under
Mr. Uttam Tibrewal, Whole Time Director, shall retire at
the ensuing AGM and being eligible for reappointment, consideration.
offers himself for re-appointment. The Board recommends
The performance evaluation of the Directors was carried
his re-appointment at the ensuing AGM and requisite
out by the entire Board, other than the Director being
information required under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and under evaluated. The performance evaluation of the Chairman
Secretarial Standard - II has been provided with the and the Non-independent Directors were carried out by the
notice of the AGM. Independent Directors. The Nomination and Remuneration
Committee carried out the performance evaluation of all
the Directors of the Bank. The Directors expressed their
Financial
Key Managerial Personnel
satisfaction over the evaluation process.
Mr. Sanjay Agarwal, Managing Director & CEO,
Mr. Uttam Tibrewal, Whole Time Director, Mr. Deepak The Evaluation process covers a structured questionnaire
Jain, Chief Financial Officer and Mr. Manmohan Parnami, for evaluation by Board members and format has been
Company Secretary are Key Managerial Personnel of designed after taking inputs received from the Directors
and process of evaluation has been detailed below:
Board Evaluation Process
Nomination and
Remuneration Committee Meeting of the
Board of Directors
Independent Directors
• Evaluation of Individual Directors
• Evaluation of Non-independent • Evaluation of Board as a whole
Directors
• Evaluation of all Directors
• Evaluation of Board as a whole
• Evaluation of Board Committees
• Evaluation of Chairman of the Bank
Familiarisation Programme for Directors details of the familiarisation programmes imparted

The Bank conducted orientation programme for the
induction of Directors and during the year, programme
organised by reputed institutes were attended by the
Directors covering their roles and responsibility, IT Risks,
cyber security, compliance and other governance aspects
in the Bank. The Corporate Governance Report for
FY 2018-19 contains the requisite information and the
Annual Report 2018-

to Directors. These programmes are also
hosted on the website of the Bank and can be
accessed at www.aubank.in/au-notice-board
Corporate Social Responsibility

In compliance with the provision of Section 135
of the Companies Act, 2013 read with the
Companies (Corporate
104|
Social Responsibility Policy) Rules, 2014, the Bank has set

In today’s disruptive digital environment, it is critical to
up a Corporate Social Responsibility (CSR) Committee.
build a high-quality, robust talent pool with adaptability
skills for the changing needs of the workplace for a
Your Bank thoughtfully spent its CSR funds and selected
sustained competitive advantage and to achieve
few projects post assessment of their sustainable impact
on the society. The primary focus areas were covering the accelerated growth. The Bank has always emphasised on
a knowledge-driven approach for visualising the future and
field of livelihood enhancement, financial & digital literacy
bringing that future to the present. The Bank focussed on
and development of sports. The contribution under CSR
was carried out by AU Foundation through its AU Skill developing the capacity and capability to nurture the
Academy, AU Sports Village and in collaboration with brightest and best quality talent.
specialised implementing agencies. The Bank has devised
long term strategy to take up sustainable projects that Anti-bribery and Anti-corruption Policy
have widespread and long-lasting impact on the society. The Bank adopts a ‘zero-tolerance approach’ to bribery
An overview of the CSR programmes undertaken by the and corruption and is committed to act professionally, fairly
Bank during FY 2018-19 is detailed in the Corporate Social and with integrity in its dealings wherever it operates. The
Responsibility Report as Annexure II. Bank has an Anti-bribery and Anti-Corruption Policy laying
down the principles for carrying out banking business in
The CSR Policy, as recommended by the CSR Committee an honest and ethical manner.
and approved by the Board, is available on the website of
the Bank at www.aubank.in/au-notice-board The Anti-bribery and Anti-corruption Policy as approved
by the Board is available on the website of the Bank at
Social Environmental and Management System www.aubank.in/au-notice-board
The Social Environmental and Management System (SEMS)
is a set of policies, procedures, tools and internal capacity Disclosure under Section 22 of the Sexual
to identify and manage a financial institution’s exposure Harassment of Women at Workplace (Prevention,
to the environmental and social risks of its customers. Prohibition and Redressal) Act, 2013
The Bank endeavours to benchmark itself with the best of The primary objective of the Policy on Prevention and
corporates in India and continued its focus to implement Redressal Against Sexual Harassment is to protect the
Environmental, Social and Governance (ESG) practices. women employees from sexual harassment at the place
The procedures and decision-making process of the SEMS of work. Your Bank constituted an Internal Complaints
are systematically incorporated at each stage of Committee in compliance with the provisions of The
transaction appraisal and monitoring. Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 to review, investigate
Awareness is also created among vendors and customers and take suitable actions on complaints and there is
to comply with applicable social and environmental laws. a Board-level Disciplinary Committee that reviews the
decisions taken by the Internal Complaints Committee.
Human Capital
Your Bank endeavours to provide a conducive workplace The complaints received and the details relating thereto
with best-in-class standards and believes that employees were as follows for the period under review:
Heading Nos.
are the most important assets. To ensure that an effective
and the right resource is acquired, your Bank continuously No. of Complaints Pending at the 1
strengthens and updates its hiring mechanism. Beginning of the Year
No. of Complaints Received and Resolved 1
During FY 2018-19, your Bank expanded its workforce to during the year
12,623 employees as on 31 st March 2019 vis-à-vis 11,151 No. of Complaints Pending at the End of the Year 0
employees as on 31st March 2018.
Extract of Annual Return
Your Bank, through its Human Resource Department,
nurtures its employees through robust learning and Pursuant to Section 134(3)(a) and Section 92(3) of the
development programme. A knowledge-driven approach Companies Act, 2013 read with Rule 12 of the Companies
is followed for designing & organising relevant training (Management and Administration) Rules, 2014, the
programmes to make employees ready for challenges and extract of the Annual Return as on 31st March 2019, in
drive success in their functional roles. the prescribed form MGT-9 forms part of this report
under Annexure VI and is available on the website of the
Bank at https://www.aubank.in/investor-relations.
Annual Report 2018-

Compensation Policy observe any unethical and improper practices or any other
Corporate
alleged wrongful conduct in the Bank. The policy aims at
The objective of the Compensation Policy is to regulate
establishing an efficient vigil mechanism in the Bank to
the appointment and remuneration of Directors (including
quickly spot aberrations and deal with them at the earliest.
Independent Directors), KMP, SMP and other employees
of the Bank according to the criteria formulated by the
The policy devised is aligned to the recommendations of
Nomination and Remuneration Committee of the Board
Protected Disclosure Scheme for Private Sector and Foreign
under the requirement of the Companies Act, 2013 read
Banks, instituted by RBI and in view of amendments in
with applicable Rules and the SEBI (Listing Obligations
SEBI (Prohibition of Insider Trading) Regulations, 2015,
and Disclosure Requirements) Regulations, 2015 and
the said policy has been amended by insertion of clause to
guidelines issued by RBI in this regard.
report instances of leak of Unpublished Price Sensitive
Information.
The key objectives of the Compensation Policy are as follows:
Statutory
The Vigil Mechanism provides a channel to the
• To institutionalise a mechanism for the
employees, Directors and other stakeholders to report
appointment/removal/dismissal of Directors, lay
to the management about unethical behaviour, actual
down selection criteria for appointment of a Director,
or suspected fraud or violation of the Codes of Conduct,
formulate the criteria for determining qualifications,
regulatory requirements, incorrect or misrepresentation of
positive attributes and independence of a Director and
any financial statements and such other matters. The Chief
recommend to the Board
Vigilance Officer of the Bank act as a Special Assistant/
• To formulate the criteria for evaluation of performance of Advisor to the Managing Director (MD & CEO) of the Bank
the Directors on the Board in the discharge of the vigilance functions. He is
responsible for ensuring and promoting a culture of
• To establish standards on compensation/remuneration,
speaking up/raising red flags on matters relating to
including fixed and variable, which are in alignment with
the applicable rules and regulations and are based on breaches/violations of the Bank’s Code of Conduct or any
Financial
the trends, practices of remuneration prevailing in the fraudulent transactions and provides a non-threatening
industry environment to employees to discuss matters relating to
the Bank’s Code of Conduct, suspected unethical
• To define internal guidelines for the payment of behaviour, malpractices, wrongful conduct, frauds,
perquisites to the Directors, Key Managerial Personnels violations of law and questionable accounting or auditing
(KMPs), Senior Management Personnels (SMPs) and other matters, which build trust and transparency in the Bank.
employees of the Bank During the year, no person was denied access to the Audit
Committee or its Chairman to raise his/her concern under
The Compensation Policy is available on the website of the
the Vigil Mechanism.
Bank at www.aubank.in/au-notice-board
The Whistle Blower Policy and Vigil Mechanism as approved
Disclosure on Remuneration
by Board are available on the website of the Bank at
The ratio of the remuneration of each Director to the www.aubank.in/au-notice-board
median employee’s remuneration and other details in
terms of sub section 12 of Section 197 of the Companies Related Party Transactions
Act, 2013 read with Rule 5(1) of the Companies
The Board approved Related Party Transactions and
(Appointment and Remuneration of Managerial Personnel)
Materiality Policy as per the provisions of the Companies
Rules, 2014, form part of this Report and is annexed as
Act, 2013 read with the rules made thereunder and SEBI
Annexure III to this Report.
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, described the related party transactions
The statement containing particulars of employees as
requiring requisite approvals and requirements of
required under Section 197(12) of the Companies Act,
appropriate reporting and disclosure of transactions
2013 read with Rule 5(2) and Rule 5(3) of the Companies
between the Bank and its related parties.
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, forms part of this Report and is annexed as
During FY 2018-19, the Bank has not entered any
Annexure IV to this Report.
materially significant transactions with its Promoters,
Directors, management or relative of the Directors, which
Whistle Blower Policy and Vigil Mechanism
could lead to potential conflict of interest between the
Whistle Blower Policy has been devised with a view to Bank and these parties, other than the transaction entered
provide a mechanism to employees, customer and in the ordinary course of business and the transactions
stakeholders of the Bank to approach the Chief Vigilance entered into by the Bank are on ‘arm’s length basis’. On
Officer and thereafter Disciplinary Committee of the Bank quarterly basis, the Audit Committee of the Bank is
in case they apprised of all specified details of related party
106|
transactions. Hence, pursuant to
Annual Report 2018-

Section 134 (3) (h) of the Companies Act, 2013 read with
Rule 8 (2) of the Companies (Accounts) Rules, 2014, there Material Orders Passed by Regulators or Courts or
are no related party transactions to be reported under Tribunals, and Penalties and Punishment
Section 188 (1) of the Companies Act, 2013, in form AOC- There are no material orders passed by the regulators/
2. The requisite disclosure has been made under Schedule courts/tribunals during FY 2018-19, which would impact
18 of the notes forming part of audited financial the going concern status of the Bank and its future
statements for the year ended 31st March 2019. operations.
The Related Party Transactions and Materiality Policy as The Bank has complied with the applicable requirements
approved by the Board is available on the website of the and no strictures or penalties were imposed on the
Bank at www.aubank.in/au-notice-board Bank by the RBI, Stock Exchanges and SEBI during the
year under review.
Code of Conduct for Directors and SMPs
The Board of Directors of the Bank adopted the Code Material Changes and Commitments, if any,
of Conduct for the Directors and Senior Management Affecting the Financial Position of the Bank
Personnel of the Bank in compliance with Regulation 17(5) There are no material changes affecting the financial
of the SEBI (Listing Obligations and Disclosure position of Bank that have occurred between the end of
Requirements) Regulations, 2015, which sets forth the FY 2018-19 of the Bank to which the financial statements
guiding principles on which Bank’s Board and Senior relate and the date of this Board’s Report.
Management Personnel shall operate and conduct
themselves with stakeholders, including government and Maintenance of Cost Records
regulatory agencies, media, etc.
Being a banking company, the Bank is not required to
In respect of FY 2018-19, all Board members and maintain cost records as per sub-section (1) of Section 148
Senior Management personnel of the Bank have of the Companies Act, 2013.
affirmed the compliance with the code as applicable to
Risk Management Framework
them and a declaration to this effect signed by the
Managing Director & CEO and forms part of the Corporate Robust risk management structure has been devised that
Governance Report as Annexure I. proactively identifies the risks faced by the Bank and helps
in mitigating them. Risk Management Committee (RMCB)
The Bank’s Code of Conduct for Directors and Senior of the Board supervises the risk management functions
Management is available on the website of the Bank at and advises on risk mitigation strategies, thereby bringing
www.aubank.in/au-notice-board a top-down focus to risk management.
Code for Prevention of Insider Trading The Risk Management Department headed by the Chief Risk
Officer administers the risk management functions in the
In compliance with the SEBI (Prohibition of Insider
Bank through dedicated divisions i.e., Credit Risk, Market
Trading) Regulations 2015, the Bank has approved code
Risk, Operational Risk, Fraud Risk and Information
for prohibition of insider trading in the shares of the
Security Risk under the aegis of Board approved risk
Bank, which inter alia, prohibits trading in shares of the
management policies and approval & responsibility
Bank by insiders while in possession of unpublished
delegation matrix.
price sensitive information in relation to the Bank and in
view of amendments in SEBI (Prohibition of Insider
The detailed note on Risk Management is covered under
Trading) Regulations, 2015, requisite amendments were
Management Discussion and Analysis section, which
carried out in the code and effective from 1st April 2019.
forms part of this Annual Report.
Code of Conduct for Employees
The Enterprise Risk Management framework is a layered
Code of Conduct is a comprehensive written code which is structure and broadly consists of the following components
applicable to all employees and lays down the Principles for effective risk management across the Bank.
and standards that govern the activities of the Bank and its
employees to ensure and promote ethical behaviour within (a) Credit Risk Management
the governance framework and attempts to set forth the There is Credit Risk and NPA Management Committee
guiding principles and values on which the Bank’s employees (CRANPAC) which reports to Risk Management
shall operate and conduct its business with its all Committee of the Board. The CRANPAC overseas and
stakeholders including government, regulatory agencies, reviews the credit risk and ensures that Bank’s operations
media and others with whom they are connected or are run as per the credit risk framework laid down by the
interact with. RMCB & Board of the Bank. The CRANPAC is responsible
for formulation of standards for presentation of credit
108|

proposals, financial
Annual Report 2018-

covenants, rating standards and benchmarks, delegation & Information Systems Security Committee. This
of credit approving powers, prudential limits on large committee reviews and monitors IT security infrastructure
Corporate
credit exposures, asset concentration, standards for loan and vigilance over IT related vulnerabilities against
collateral, portfolio management, loan review mechanism, emerging cyber security risks. The Chief Information
risk concentration, risk monitoring and evaluation, Security Officer (CISO) is responsible for monitoring the
provisioning, regulatory and other issues around it. information security risk covering all aspects of data
security for the Bank who reports to Chief Risk Officer
(b) Operational Risk Management (CRO). Cyber Security Operation Center (CSOC) with
Your Bank has in place a Board delegated committee qualified professionals report into CISO for monitoring of
for Operational Risk Management (ORMC) which real-time cyber security incidents.
reports to (RMCB) for review and advise for
implementation of measures for risk mitigation. The (f) Business Continuity Plan
Bank follows an integrated risk approach where Your Bank has put in place a comprehensive Business
operational risks & its monitoring folds into CRO and
Statutory
Continuity Management (BCM) plan, policy and
ORMC. The Bank has business continuity framework to procedures to ensure continuity of critical operations of the
ensure the continuity of services in the event of any Bank in the event of any disaster/incident affecting
catastrophic event. Your Bank’s operational risk business continuity. The Bank’s business continuity
management framework is designed with a clear programme is developed considering the criticality of the
understanding of various operational risks faced by the functions performed and the systems used to minimise
Bank and for its continuous monitoring disciplined risk the operational, financial, legal and other material
assessment & mitigation measures were operating consequences arising from such a disaster and focus is
effectively during the year. on ensuring faster recovery of/ minimizing impact on the IT
systems of the Bank.
(c) Fraud Risk Management
Your Bank has effective fraud risk management framework (g) Cyber Security Management
and Risk Containment Unit (RCU) that is guided by a Technology has drastically changed the banking services,
Financial
Board approved Fraud Risk Management Policy. Fraud products, methods of operation and the way banks
reported in the Bank are apprised to the Audit function. Your Bank has been able to offer more products
Committee and Board and fraud in excess of `1 crore or
to increase customer’s delight and operational efficiency
more are specifically reported and dealt by the SFMC and reduce operational expenses of banking services.
Committee of the Board. Frauds in banks occur when the However, it is equally true that the advent of technology
safeguards are inadequate or the procedural checks are has also made banks vulnerable to cyber-attacks. Cyber
not adhered to, leaving the system/bank vulnerable to security is the combination of technologies, processes and
internal or external perpetrators. The only effective practices designed to protect networks, computers,
defence the Bank can have against frauds is to programmes and data from cyber-attacks, damage or
continuously strengthen its systems, operational unauthorised access. Cyber space is a complex
practices, procedures, controls and review mechanism environment consisting of interactions between people,
so that fraud-prone areas are sanitised against internal software and services, supported by worldwide distribution
and external breaches and these control measures operate of Information and Communication Technology (ICT)
effectively. devices and networks.
To combat growing cyber threats and enhance the resilience

(d) Market Risk, Liquidity and Asset Liability of the banking system to address cyber risks, your Bank
Management systems. There is a dedicated IT Steering and Information Security
Your Bank has a well-developed market risk framework Committee which reports to Board-level IT Strategy
comprising Board-approved policies and established
practices. The Bank has in place an integrated risk
measurement framework that captures all components of
market risks. The Asset Liability Management Committee
(ALCO) of the Bank oversees the framework for
identification, measurement and management of market
risk, interest rate risk and liquidity risk in the Bank and
ensures compliance with established internal and
regulatory prudential limits.
(e) IT Risk Management

Your Bank has established robust information and cyber
security framework for securing its IT infrastructure and
108|
has set up a framework for cyber security in
compliance with the guidelines issued by the
RBI. During
Growing the the
rightyear,
way the Directors and Senior
Management attended the training &
AU Small Finance
certification Bank organised by IDRBT for
programme
awareness about current IT and cyber security
issues.
Statutory Auditors & their report

M/s. S.R. Batliboi & Associates LLP (Firm
Registration No. 101049W/E300004) were
appointed as the Statutory Auditors for a
period of four (4) years by the Members of
the Bank at the (22nd) Twenty Second Annual
General Meeting held on 27 th September 2017,
to hold office from the conclusion of the 22nd
Annual General Meeting till the conclusion of
the 26th Annual General Meeting of the Bank, in
accordance with the provisions of the
Companies Act, 2013.
Annual Report 2018-

The Statutory Auditors have confirmed their eligibility
Senior Management on the quality and effectiveness of the
under Section 141 of the Companies Act, 2013. Further, as
Bank’s internal control, risk management and governance
required under the relevant provisions of SEBI (Listing
systems and processes.
Obligations & Disclosure Requirements) Regulations 2015,
the Statutory Auditors had also confirmed that they had
Proper internal financial controls were in place and were
subjected themselves to the peer review process of the
operating effectively during the year. Further, the statutory
Institute of Chartered Accountants of India (ICAI) and they
auditors have, in compliance with the requirements of the
hold a valid certificate issued by the Peer Review Board of
Companies Act, 2013, issued an opinion with respect to
ICAI and the Board has upon recommendation of the
the adequacy of the internal financial controls over
Audit Committee proposed the ratification of their
financial reporting of the Bank and the operating
appointment as Statutory Auditors for the FY 2019-20, effectiveness of such controls details of which may be
subject to approval of shareholders at the ensuing AGM referred to in the Auditor’s Report attached to the Audited
and the RBI. Financial Statements of FY 2018-19.
There are no qualifications, reservations or adverse
Compliance
remarks made by M/s. S.R. Batliboi & Associates LLP,
Chartered Accountants, Statutory Auditors of the Bank, in Strong compliance & governance culture has been
their report. Further, pursuant to Section 143(12) of the established with the objective to build trust & transparency
Companies Act, 2013, the Statutory Auditors of the Bank among all stakeholders and a dedicated Compliance
have not reported any instances of frauds committed in the Department headed by the Chief Compliance Officer for
Bank by its officers or employees. ensuring regulatory compliance across all businesses and
operations has been setup.
Secretarial Auditors & their report
The Board, Audit Committee & Risk Management
In compliance with the provisions of Section 204 of the
Committee of the Bank oversee the implementation of
Companies Act, 2013 and the Companies (Appointment
the entire compliance framework and risk management
and Remuneration of Managerial Personnel) Rules, 2014,
system across the Bank.
the Board in its meeting dated 26th April 2018 upon
recommendation of the Audit Committee appointed
M/s. V.M. & Associates, Practicing Company Secretaries C. BUSINESS RESPONSIBILITY REPORT
(Registration No. P1984RJ039200) to undertake the
Pursuant to Regulation 34 (2) (f) of SEBI (Listing
Secretarial Audit of the Bank during the financial year
ended 31st March 2019. The Secretarial Audit Report for
2015, a Business Responsibility Report (BRR) is required
FY 2018-19 is annexed herewith as Annexure V.
to be published by the Top 500 listed companies based on
market capitalisation. The BRR describes the initiatives
There were no observations or qualifications made by
taken by the Bank from environmental, social and
the Secretarial Auditor in its Report (except expense on
governance perspective in the format prescribed under
CSR activities below the prescribed limit); justification of
SEBI Circular No. CIR/CFD/CMD/10/2015 and the same is
observation covering reasons for not being able to carry
attached herewith as Annexure VII and placed on the
out CSR expenditure has been provided in the report on
website of the Bank at www.aubank.in/investor-
CSR attached as Annexure II to this Board’s Report.
relations.
Internal Financial Controls System and
their Adequacy D. MANAGEMENT DISCUSSION AND ANALYSIS
Your Bank has an effective internal control system The Management Discussion and Analysis Report for FY
calibrated to the risk appetite of the Bank and aligned to 2018-19 is presented in a separate section forming part of
the scale, size and complexity of its operations. The this Annual Report.
scope and authority of the risk-based internal audit
function is defined in the Internal Audit Policy of the Bank
duly approved by the Board.
E. OTHER STATUTORY DISCLOSURES
Conservation of energy and technology absorption
The audit function essentially validates the compliances of
Your Bank as a responsible organisation established
Bank’s processes and operations with regulatory
and implemented the required systems and processes
guidelines, accounting procedures and the Bank’s own
to conserve energy aligned to its nature of the business.
internal rules and guidelines.
The Bank is using energy efficient cooling systems for
its operations. The distributed cooling system has been
The Internal Audit function provides independent
designed in such a way that if a particular area/room is not
assurance to the Board of Directors, Audit Committee and
110|
in use, the air-conditioning for that particular area is auto landfills and to avoid sending hazardous materials to
Corporate
switched off to conserve energy. In similar ways, those landfills where they can seep into the
energy efficient lighting systems like LEDs have been environment and cause harm.
widely used in offices of the Bank. Your Bank used wide
glass windows to utilise maximum natural lights to The Bank has an efficient way of re-furbishing the slightly
conserve electricity used by the lighting system. old IT systems that can be used by staff who do not
require heavy data processing. Hence, the Bank reduces
Your Bank as part of its digital strategy is focussed the demand for new laptops/desktops despite the
on building an IT architecture in a manner to achieve increase in manpower. In many cases, when an IT
internal natural resource consumption efficiencies and engineer needs a new high end workstation to run
simultaneously minimising the carbon footprint. resource hungry programmes, the old computer is
perfectly adequate for use by someone doing Word
Statutory
Efforts made by the Bank for conservation of energy processing, spreadsheets or other less intensive tasks.
and This hand-me-down method allows two employees to get
absorption of technology have been detailed below: better systems than they had, while requiring the purchase
of only one new machine (thus saving money and avoiding
• Energy-efficient IT hardware unnecessary e-waste).
IT hardware assets used by your Bank comply
with the Environmental Protection Agency’s (EPA’s) Foreign exchange earnings and outgo
Energy Star guidelines for lower power consumption. During the year ended 31st March 2019, there were no
These IT assets include workstation, notebooks, servers, etc. foreign exchange earnings and the foreign exchange outgo
Further, your Bank is using multicore processors in was of `0.46 crore.
servers, which increases processing output without
substantially increasing energy usage. MD & CEO and CFO Certification
Financial
The MD & CEO and the CFO of the Bank have issued
• Digital Solutions
certificate certifying that the financial statements do
Your Bank is leading the digital banking revolution by not contain any materially untrue statements and these
operating ‘Paperless Account Origination’ through a TAB- statements represent a true and fair view of the Bank’s
based system, which has significantly reduced paper affairs. They also certify that no transactions entered
consumptions in the Bank. Under the ‘Go Green into during the year were fraudulent, illegal or violative
Programme’ all printers of the Bank are being configured of the Code of Conduct of the Bank. The certificate of
with both side printing and the size of e-receipts have been MD & CEO and CFO forms part of Annual Report.
reduced to print two slips on a single page. These
initiatives by the Bank have significantly reduced the SEBI (Listing Obligations and Disclosure
overall paper consumption within the Bank. Requirements) Regulations, 2015
During the period under review, the Bank has complied
• Using power management technology and best
with all the mandatory requirements of Regulation 17 to 27
practices
of SEBI (Listing Obligations and Disclosure Requirements)
Your Bank is a pioneer in adopting the latest operating and other applicable Regulations except for Regulation 24,
systems running on Advanced Configuration and Power which is not applicable to the Bank.
Interface (ACPI) enabled systems that incorporate power
saving features that automatically goes on power-saving Accounting Treatment
mode in case the system is idle for a specific time interval.
The Bank has adopted accounting policies that are in line
• Using Cloud-based and virtualised data centre with the accounting standards and financial statements
are prepared in adherence to the accounting policies,
The virtual and Cloud technology based servers are one of accounting standards and applicable provisions of the
the most energy efficient servers in the current technology Companies Act, 2013, SEBI (Listing Obligations and
era and the Bank invested on virtualisation and Cloud- Disclosure Requirements) Regulations 2015 and RBI
based technology to reduce the number of physical Guidelines in this regard.
servers.
Subsidiary and Associate Companies
• Recycling systems and supplies
During the period under review, the Bank does not have
The Bank is following an efficient way of managing aging any subsidiary or associate companies. Hence, Form AOC
IT systems to scale down the load on already overtaxed 1 as
Annual Report 2018-

specified under the Companies Act, 2013 is not
Bank at the end of the financial year and of the profit
applicable
and loss of the Bank for that period
to the Bank for FY 2018-19.
(c) That the Directors had taken proper and sufficient care
Compliance of Secretarial Standards issued by for the maintenance of adequate accounting records
the ICSI in accordance with the provisions of the Companies
Act, 2013 for safeguarding the Bank’s assets and for
The Bank has complied with applicable Secretarial
preventing and detecting fraud and other irregularities;
Standards issued by the Institute of Company Secretaries
of India (ICSI). (d) That the Directors had prepared the annual accounts
on a going concern basis
F. INVESTOR RELATIONS (e) That the Directors had laid down internal financial
controls to be followed by the Bank and that such
Pursuant to the applicable compliance of SEBI (Listing
internal financial controls are adequate and were
operating effectively
2015, the financial results of the Bank on a quarterly basis
are published to the Stock Exchanges. The same were (f) That the Directors had devised proper systems to
also published on the website of the Bank and in leading ensure compliance with the provisions of all applicable
national and vernacular newspapers. The Managing laws and that such systems were adequate and
Director & CEO, Whole Time Director, CFO and Chief of operating effectively
Investor Relations at regular intervals connect with the
Acknowledgment
analysts/ shareholders and respond to the queries from
investors on a quarterly basis. The Board of Directors wish to place on record their
gratitude to the RBI, SEBI, Ministry of Corporate Affairs,
For share transfers, dividend payments and all other Indian Banks’ Association (IBA), Unique Identification
investor-related activities are attended to and processed Authority of India (UIDAI), the Bank’s customers, bankers,
at the office of our Registrars and Share Transfer Agents, shareholders debenture holders, trustees and others for
i.e., Link Intime India Private Limited, contact details of their continued support and faith reposed in the Bank. The
which are provided in the Corporate Governance Report of Directors would also like to thank the BSE Limited, the
the Annual Report. National Stock Exchange of India Limited, National
Securities Depository Limited, Central Depository Services
Board-approved Investor Grievance Redressal Policy lays (India) Limited and the Credit Rating Agencies for their
down the simplified procedure for shareholders to submit continued co-operation.
their queries, concerns and grievances for timely
resolution. Shareholders can email at
The Board also expresses its deep sense of appreciation
investorrelations@aubank.in for any query and can also
visit the Bank’s website for more information at to all employees of the Bank for their strong work ethic,
www.aubank.in. All the investor complaints received excellent performance, professionalism, teamwork,
during the year were resolved and there was no commitment and self-driven approach as key enablers for
investor complaint that was unresolved as on 31st March achieving consistent growth.
2019.
For and on behalf of the Board of Directors
G. DIRECTORS’ RESPONSIBILITY STATEMENT
Your Directors would like to inform that the audited Sanjay Agarwal Uttam Tibrewal
financial statements for the financial year ended 31 st Managing Director & CEO Whole Time Director
March 2019 are in conformity with the requirements of DIN: 00009526 DIN: 01024940
Clause (c) of Sub-section (3) of Section 134 of the
Companies Act, 2013 and hereby confirm: Date: 22nd April 2019
Place: Jaipur
(a) That in the preparation of the annual accounts, CIN: L36911RJ1996PLC011381
the applicable Accounting Standards have been
followed along with proper explanation relating to AU Small Finance Bank Limited
material departures Registered Office: 19-A, Dhuleshwar Garden, Ajmer Road,
Jaipur - 302001
(b) That the Directors had selected such accounting Tel: +91-141-4110060/6660666 | Fax: +91-141-4110090
policies and applied them consistently and made
Email: investorrelations@aubank.in
judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state
of affairs of the
112|
CERTIFICATE ON CORPORATE GOVERNANCE
Corporate
To,
5. We conducted our examination in accordance with the
The Members,
AU Small Finance Bank Limited Guidance Note on Corporate Governance Certificate
and the Guidance Manual on Quality of Audit &
Attestation Services issued by the Institute of
1. We have examined the compliance of conditions of
Company Secretaries of India (“ICSI”).
Corporate Governance of AU Small Finance Bank
Limited (“the Bank”) for the year ended on
Opinion
Statutory
31st March 2019 as stipulated in Regulations 17 to 27
and clauses (b) to (i) of Regulation 46 (2) and other 6. In our opinion and to the best of our information
applicable regulations of Chapter IV pertaining to and according to the explanations given to us and
Corporate Governance and paragraphs C, D and the representation made by the Directors and the
E of Schedule V of the Securities and Exchange management, we certify that the Bank has complied
Board of India (Listing Obligations and Disclosure with the conditions of Corporate Governance as
Requirements) Regulations, 2015 collectively referred stipulated in the above mentioned SEBI Listing
as (SEBI Listing Regulations). Regulations.
Management’s Responsibility for compliance with 7. We further state that such compliance is neither an
the conditions of SEBI Listing Regulations assurance as to the future viability of the Bank nor the
efficiency or effectiveness with which the
2. The compliance with the conditions of Corporate
management has conducted the affairs of the Bank.
Governance is the responsibility of the
Financial
management of Bank, including the preparation
Restriction on use
and maintenance of all relevant supporting records
and documents. This responsibility includes the 8. The certificate is addressed and provided to the
design, implementation and maintenance of internal members of the Bank solely for the purpose to enable
control and procedures to ensure the compliance the Bank to comply with the requirement of the
with the conditions of the Corporate Governance SEBI Listing Regulations and it should not be used
stipulated in SEBI Listing Regulations. by any other person or for any other purpose.
Accordingly, we do not accept or assume any
Auditor’s Responsibility liability or any duty of care for any other purpose or
to any other person to whom this certificate is
3. Our responsibility is limited to examining the
shown or into whose hands it may come without
procedures and implementation thereof, adopted
our prior consent in writing.
by the Bank for ensuring the compliance with the
conditions of the Corporate Governance. It is
neither an audit nor an expression of opinion on the For V. M. & Associates
financial statements of the Bank. Company Secretaries
(ICSI Unique Code P1984RJ039200)
4. We have examined the relevant records and
documents maintained by the Bank for the purposes sd/-
of providing reasonable assurance on the CS Manoj Maheshwari
compliance with the Corporate Governance Partner
requirements by the Bank. Date: April 22, 2019 FCS3355
Place: Jaipur C P No.: 1971
Annual Report 2018-

Annexure
REPORT ON CORPORATE GOVERNANCE
Corporate governance is a system of rules, practices

transparency, accountability and integrity in all its business
and processes by which a company is directed and run.
practices and management.
It is about commitment to values, ethical business conduct
and considering all stakeholder’s interest in the conduct
The Bank and its Directors understand and respect their
of its business.
fiduciary role and responsibility to enhance the long-
Corporate governance is an ethically driven business term interest of its shareholders customers, employees
process that is committed to values aimed at enhancing an and other stakeholders to provide good management, to
organisation’s wealth-generating capacity. This is ensured adopt prudent risk management structure and comply
by taking ethical business decisions and conducting with required standards of capital adequacy, thereby
business with a firm commitment to values, while meeting safeguarding the interest of all stakeholders. The Bank
stakeholders’ expectations. At AU Bank, it is imperative continuously focusses on upgrading the governance
that our affairs are managed in a fair and transparent practices and systems to effectively address the challenges
manner. This is vital to gain and retain the trust of our that are faced by the Bank under an ever-evolving
stakeholders. regulatory environment.
Recently, the Securities and Exchange Board of India (SEBI) YOUR BANK’S INITIATIVE FOR GOOD CORPORATE
has amended, SEBI (Listing Obligations and Disclosure GOVERNANCE
Requirements) Regulations, 2015 (Listing Regulations)
• Appropriate composition, size of the Board and
to bring in additional corporate governance norms.
commitment to adequately discharge its responsibilities
These norms provide for additional disclosures and
and duties
protection of investor rights, including equitable treatment
for minority and foreign shareholders. • Independent verification and assured integrity of financial
reporting
Over the last few decades, Corporate Governance is
• Transparency and independence in the function of the
getting ever increasing importance across the globe.
Board
Systems and policies are required to be upgraded
regularly, to meet the challenges of rapid growth in a • Adequate risk management and internal control
dynamic business environment.
• Codes, policies, process and systems are in place for
sound governance in the Bank
PHILOSOPHY ON CORPORATE GOVERNANCE
• Transparent and timely disclosure that ensure
Your Bank believes in nurturing long-term relationships compliance with all applicable statutory requirements
and encouraging an open dialog with all its key
constituents and build the governance structure based Your Bank adheres to all relevant codes and standards,
on trust for becoming an admired institution. Your and simultaneously provides flexibility and accommodates
Bank’s philosophy of corporate governance is always new approaches and ideas that are beneficial for the long-
aimed at value creation, ensuring integrity and term interest of stakeholders.
transparency in its operations, keeping the interest of all
stakeholders protected in the most inclusive way. The AU Bank always aim at institutionalising accountability,
organisation believes that timely and accurate transparency and equality of treatment for all its
communication with stakeholders enables it to build an stakeholders, as central tenets of good corporate
environment where confidence, trust and mutual governance. The Board is collectively responsible for
respect is continuously enhanced. ensuring that processes are structured to direct the
Bank’s actions, assets and agents to achieve the aim of
The corporate governance mechanism of your Bank is maximisation of stakeholders’ value.
aimed at creating and nurturing a valuable bond with
stakeholders to maximise stakeholders’ value. Your Bank
has conducted itself by adhering to the core values of
114|
AU CORPORATE GOVERNANCE TENETS
Corporate
Your Bank believes in corporate governance beyond regulatory requirements as there exists a fundamental link among
businesses, corporate responsibility and shareholder’s wealth maximisation. The AU Bank Corporate Governance
Tenets are mentioned below.
Statutory
AU CORPORATE GOVERNANCE TENETS
Financial
T
k
BOARD OF DIRECTORS
Non-executive Directors. The Chairman of the Board and
The composition of the Board of Directors of the Bank is three (3) other Directors are Independent including one (1)
in accordance with the Banking Regulations Act, 1949, Woman Independent Director.
Regulation 17 of the Listing Regulations, Companies Act,
2013 and rules made thereunder, the Articles of Seven (7) Board meetings were held during FY 2018-19
Association of the Bank and it consist of eminent on 26th April 2018, 19th May 2018, 07th August 2018,
individuals possessing professionalism, knowledge and 13th October 2018, 29th October 2018, 22nd November 2018
experience in the field of accountancy, economics, and 17th January 2019.
finance, law, small-scale industry and taxation as
required in the banking industry. All Board meetings were held and convened by giving
proper notices and within the stipulated timelines as
The Board of Directors of the Bank has an optimum provided under the Companies Act, 2013, Secretarial
combination of Independent, Non-executive and Executive Standard and other regulatory requirements.
Directors. As on 31 st March 2019, the Board of Directors
comprises seven (7) Directors, out of which five (5) are
Annual Report 2018-

The Bank has a three-layer Corporate Governance structure wherein the Board is provided with strategic inputs and
operational updates by the Board Committees which is further supported by Board delegated committees on operational
and other key matters.
BOARD
BOARD COMMITTEES
Mr. Raj Vikash Verma Ms. Jyoti Narang Mr. Mannil Venugopalan Mr. Krishan Kant Rathi
Chairman Chairman Chairman Chairman
Stakeholders Relationship Committee
Corporate Social Responsibilty Committee
Risk Management Committee Audit Committee
Customer Service Committee Nomination
Review of Classification of Wilful Defaulter and Remuneration Committee
Committee
Disciplinary Committee Special Committee for Fraud MonitoringIT Strategy and Information System Security C
Management Committee
BOARD DELEGATED COMMITTEES
Product(ALCO)
Asset Liability Management Committee Approval Committee Standing Committee on CustomerCommittee
Service for Outsourcing of IT and Financial Servic
Credit Risk and NPA Management Committee
Premises and Procurement Committee
IT Steering and Information Security
Executive
Committee
Committee
Investment Committee Operational Risk Management Credit
Wilful Defaulter Identification Committee Committee
Committee
116|
The names and categories of Directors, their attendance at the Board Meetings held during FY 2018-19 and at the last
Corporate
Annual General Meeting, the number of Directorships and Committee positions held by them in public limited companies
and private limited companies (excluding the Bank) are disclosed below.
Board
No. of Board Number of
Meeting Attendance at No. of Committee
Name of Meetings Directorships No. of
entitled the Last AGM positions held in
Sr.No Director/ Category attended held in Other Equity
to attend held on Other Companies
Chairman during the Companies Shares held
during 7th August 2018 (**)
FY 2018-19 (*)
FY 2018-19
Chairman Member
1 Mr. Mannil Chairman 7 7 Yes 6 Nil 1 Nil
Statutory
Venugopalan -Independent
Director (Non-
executive)
2 Mr. Sanjay Promoter- Managing 7 7 Yes Nil Nil Nil 5,67,66,359
Agarwal Director &
CEO (Executive)
3 Mr. Krishan Independent Director 7 7 Yes 11 Nil 3 94,289
Kant Rathi (Non-executive)
4 Ms. Jyoti Independent Director 7 7 Yes 3 Nil Nil 2,414
Narang (Non-executive)
5 Mr. Uttam Whole Time Director 7 7 Yes Nil Nil Nil 35,44,673
Tibrewal (Executive)
6 Mr. Raj Vikash Independent Director 7 7 Yes 5 Nil Nil Nil
Financial
Verma (Non-executive)
7 Mr. Narendra Additional Director 6 3 No 11 1 2 Nil
Ostawal (Non- executive)
1. Mr. Narendra Ostawal ceased to be the Nominee Director of the Bank w.e.f. closing of business hours on 16th January 2019.
2. Mr. Narendra Ostawal was representing as Nominee Director on behalf of Redwood Investments Ltd. in capacity of Equity Investor.
3. Mr. Narendra Ostawal has been appointed as the Additional Director (Non-executive) by the Board of Directors in their meeting held on
17th January 2019.
4. No inter-se relationship among any of the Directors.
5. None of the Directors belong to promoter and promoter group except for Mr. Sanjay Agarwal.
6. None of the Directors of the Bank were members of more than 10 committees or acted as Chairman of more than 5 committees across all
Public Limited Companies in which they were Directors
7. None of the Directors held directorship in more than 10 Public Limited Companies.
8. None of the Independent Directors of the Bank served as Independent Director in more than seven listed companies.
9. None of the Non-Executive Directors hold any convertible instruments in the Bank.
*
Includes Directorship in foreign companies, private limited companies and Section 8 companies.
**
Chairpersonship and membership of the Audit Committee and the Stakeholders Relationship Committee has been considered.
Details of other Listed Entities of Director(s)

Name of the Director Name of the Listed Entity Category
Mr. Mannil Venugopalan Shreyas Shipping and Logistics Limited Independent Director
Dewan Housing Finance Corporation Limited* Independent Director
Mr. Krishan Kant Rathi Future Consumer Limited Non-executive Director
Aavas Financiers Limited Independent Director
Ms. Jyoti Narang Nil Not Applicable
Mr. Raj Vikash Verma Nil Not Applicable
Mr. Narendra Ostawal Laurus Labs Limited Non-executive Director
Capital First Limited** Non-executive Director
Mr. Sanjay Agarwal Nil Not Applicable
Mr. Uttam Tibrewal Nil Not Applicable
* Mr. Mannil Venugopalan has ceased to be the Director of Dewan Housing Finance Corporation Limited w.e.f 30th March 2019
**Mr. Narendra Ostawal has ceased to be Director of Capital First Limited w.e.f. 18th December 2018
Annual Report 2018-

List of Core Skills/Expertise/Competencies
Identified by the Board of Directors in the Context CRITICAL THEMES FOR REVIEW BY THE BOARD
of Banking Business: The Board deliberates on matters such as business
1. Accountancy strategy, risk, financial results, compliance, customer
service, IT and human resources as covered under the
2. Agriculture and rural economy seven critical themes prescribed by the RBI and the Bank
3. Banking has a Board-approved calendar of review(s) of agendas to
be discussed at the Board and Board Committee(s)
4. Economics meeting in addition to such other matters as deemed
appropriate.
5. Finance
6. Law The Board spends considerable time reviewing the
information provided to them which facilitates informed
7. Small-scale industry
decision-making and effective participation at meetings,
8. Information technology leading to higher Board effectiveness. The Board oversees
the actions and results of the management to ensure that
9. Payment and settlement
the long-term objectives of enhancing shareholders’ value
10. Human resources are met. The Board has the discretion to engage the
services of external experts/advisors as deemed
11. Risk management
appropriate.
12. Business management
13. Co-operation FAMILIARISATION PROGRAMME
In compliance of the Listing Regulations, the Bank
From the above core skills identified by the Bank’s Board, conducts a familiarisation programme for Directors on
your Board members possess requisite skills for carrying regular basis and also nominates Directors to attend
out their duties effectively for the business of the Bank. programmes to familiarise them with their roles, rights,
responsibilities in the Bank, risk management system,
Independent Directors of the Bank have submitted their
technology for effective contribution in the growth of the
annual disclosures/declarations with respect to the criteria
Bank Board members attended programmes organised by
of independence as stipulated under the provisions of the
CAFRAL & IDRBT during the year as part of knowledge
Companies Act, 2013, Listing Regulations and the Banking
sharing and Board effectiveness enhancement initiatives.
Regulation Act, 1949 and the guidelines issued by the RBI
from time to time and confirmed that they are
Details of the familiarisation programme for Directors
independent of the management and meet the criteria of are available on the website of the Bank at
independence laid down thereunder. The declarations www.aubank.in/ au-notice-board
obtained are put forth to the Board of Directors for their
noting.
INDUCTION PROGRAMME FOR NEW DIRECTORS
No Independent Director has resigned during the The new Directors are inducted through one-to-one
period under review. meetings with the Managing Director & CEO and Whole-Time
Director on issues relating to business strategy, regulatory
BOARD PROCEDURE AND FUNCTION environment, business plans and key performance
indicators. They are also provided with information related
The Board of Directors plays a pivotal role in the to the finance and operations of the Bank, organisation
organisation for ensuring transparency in decision-making. structure, duties and responsibilities.
Decisions taken by the Board are based on detailed
discussion and deliberations and the Board members
have the absolute liberty to question and raise an issue for SELECTION AND APPOINTMENT
discussion. Apart from review and consideration of matters The selection for appointment of Directors of the Bank is
referred to under Regulation 17 of the Listing Regulations carried out in accordance with provisions of Companies
read with Part A of Schedule II mentioned therein, the Act, 2013 and relevant rules made thereunder, Banking
Board of Directors also review periodically matters as Regulation Act, 1949, the guidelines issued by RBI, Listing
covered under its calendar of reviews. Regulations and in accordance with Compensation
Policy of the Bank.
118|
The Bank duly adheres to the process and methodology As on 31st March 2019 audit committee comprised six (6)
prescribed by RBI i.e. ‘Fit and Proper’ criteria applicable to Directors as its members, all of them being financially
Corporate
private-sector banks, signing of deed of covenants, which literate and of which four (4) are Independent Directors.
binds the Directors to discharge their responsibilities to The composition of the Committee is in adherence to
the best of their abilities, individually and collectively to provisions of Companies Act, 2013 and Listing
be eligible to be appointed as a Director of a Bank. At Regulations.
the time of their appointment/re-appointment on the
Board, prescribed declarations are obtained from the The committee met five (5) times during the year
Directors and submitted to Nomination and under review on 26th April 2018, 07th August 2018,
Remuneration Committee (NRC) for their review and put 13th October 2018, 29th October 2018 and 17th January 2019.
forth for the noting of the Board on the recommendation
of the NRC. The Board of Directors has formed and approved a
charter for the Audit Committee setting out the roles,
Statutory
NRC reviews the structure, size, composition mix of the responsibilities and functioning of the Committee.
Executive and Non-executive Directors, their background, In addition to adherence to the provisions of the
exposure, industry experience, expertise and other Companies Act, 2013 and Listing Regulations and all other
relevant information and documents of proposed applicable regulatory requirements, the terms of reference
Director(s) before making recommendation to the Board of the Audit Committee is broadly covered by its charter.
for their appointment, re-appointment, remuneration and
assignment of duties. While reviewing potential candidates Its functioning inter alia broadly includes the following:
their knowledge in the field of accountancy, agriculture,
rural economy, banking, co-operation, economics, finance, • Review and approve nature and scope of the internal
law, small-scale industry, information technology, core audit function and ensure it has adequate resources,
industries, infrastructure sector, payment & settlement skills, qualifications and appropriate access to
systems, human resource, risk management, and business information to enable it to perform its function
Financial
management as stipulated under section 10A of effectively
Banking Regulation Act, 1949 is considered by the
Committee. This ensures that people who have relevant • Monitor the reporting of issues identified by internal
specialised knowledge, expertise, practical experience auditors to the management according to the defined
and skills to serve the diverse business interest of the frequencies and ensure that corrective actions are being
Bank are inducted to the Board. undertaken in a timely manner
• Consider major findings of internal quarterly, semi-
BOARD COMMITTEES annual and annual audit reviews and management’s
response; and to promote coordination between the
The Board has constituted various Committees of internal and external auditors and review management
Directors to monitor the activities in accordance with letter(s) and management response to the findings,
Board-approved terms of reference. The Board recommendations of the external auditor(s)
Committees focus on specific areas and take informed
decisions on the specific businesses assigned to them in • Ensure that the Bank properly documents the
the best interest of the Bank. The Committees also identified risks and the related policies and assesses
make specific recommendations to the Board on whether awareness and identification of risks are
various matters whenever required. All observations, percolating to all levels and ascertains that systems
recommendations and decisions of the Committees are are in place for adherence to all regulations
placed before the Board for information or for approval. • Review and monitor compliance function, its policies and
Implementation of Compliance Frameworks of the Bank
The Bank has eleven Board Committees as on
31st March 2019, which are described below: • To recommend the appointment including terms of
appointment and removal of statutory, internal and
1. Audit Committee Secretarial Auditors, fixation of audit fees and also to
approve payment for other services
The Audit Committee has been constituted by the Bank in
terms of provisions of Section 177 of the Companies Act, • To review Annual Long Form Audit Report as prepared
2013 and Regulation 18 of Listing Regulations and is chaired by the Statutory Auditors along with Management
by Independent Director. response.
• To review, with the management, the statement of
uses/application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.) including
statement of deviation, if any
Annual Report 2018-

• Reviewing with the management the annual financial
The Chief Financial Officer (CFO) and Auditors of the Bank
statements and auditor’s report thereon before
are invited to be present in the meeting(s) for responding
submission to the Board for approval, with reference to:
to the observations of the Committee. The Audit
(a) matters required to be included in the Director‘s Committee discusses with the Statutory Auditors, the
Responsibility Statement to be included in the key highlights of the quarterly and annual financial results
Board‘s report in terms of clause (c) of sub-section of the Bank, before recommending the same to the Board
(3) of Section 134 of the Companies Act, 2013 of Directors of the Bank for their approval. The
representatives of the Statutory Auditors have attended the
(b) changes, if any, in accounting policies and practices
meetings of the Audit Committee held during the year for
and reasons for the same
review of the quarterly/ annual financial results of the
(c) major accounting entries involving estimates based Bank. The Audit Committee also discusses with the
on the exercise of judgment by management Statutory Auditors on matters connected with the said
financial results, and other matters without the presence of
(d) significant adjustments made in the financial
any executives of the Bank.
statements arising out of audit findings
(e) compliance with listing and other legal The Company Secretary acts as Secretary to the Committee.
requirements
relating to financial statements The Chairman of the Audit Committee was present in
(f) disclosure of any related party transactions the Annual General Meeting to answer the queries of
the shareholders.
(g) modified opinion(s) in the draft audit report
• Review and scrutinise matters, including the inter- 2. Risk Management Committee
corporate loans and investments
The Bank has formed Risk Management Committee of the
• Perform any other duties and responsibilities expressly Board for assisting the Board to establish a risk culture and
delegated by the Board from time to time and provide the risk governance framework in the organisation. The
Board with such assurance as it may require regarding function of the Committee is to identify management of risk
the reliability of financial information inherent in all the products and services across the Bank
In addition to above, the Audit Committee performs and to ensure that the established risk culture is adopted
across all levels. The responsibilities of the Committee are
all such functions as specified under the provisions
to review compliance of NPA management policy, review
of section 177 of the Companies Act, 2013, relevant
the status of Basel Norms, risk appetite framework, risk
guidelines issued by RBI & Regulation 18 read with part C
of Schedule II of Listing Regulations and all other return profile of the Bank and to ensure that all systems
applicable regulatory requirements. are being implemented in the Bank with adequate security
controls.
All committee meetings were held and convened by
giving proper notices and within the stipulated timelines As on 31st March 2019, composition of the Risk
as provided under the Companies Act, 2013 and other Management Committee comprised five (5) Directors as its
regulatory requirements. members and the committee met four (4) times during the
year under review on 25th April 2018, 06th August 2018, 29th
The particulars of attendance of members at the October 2018 and 16th January 2019.
committee meetings are given as Annexure A of Corporate
Governance Report. Terms of Reference of the Risk Management Committee
inter alia include the following:
Composition of the Audit Committee
• Review, approve/recommend, periodically update
S. No. Name Position policies, strategies and risk management framework and
1 Mr. Krishan Kant Rathi Chairman 2
seek the Board’s approval for the same
Mr. Raj Vikash Verma Member • Ensure that the procedures for identifying, measuring,
3 Mr. Mannil Venugopalan Member monitoring and controlling risks are in place
4 Ms. Jyoti Narang Member
5 Mr. Sanjay Agarwal Member
• Ensure appropriate risk organisation structure with
6 Mr. Narendra Ostawal Member authority and responsibility clearly defined, adequate
staffing and the independence of the Risk
Management function
120|
• Provide appropriate and prompt reporting to the Board The Chief Risk Officer (CRO) of the Bank reports directly
Corporate
of Directors to fulfil the oversight responsibilities of to the Managing Director & CEO of the Bank. The CRO of
the Board of Directors the Bank oversees the risk management function and is
responsible for developing and setting the risk
• Review reports from management concerning:
management framework, developing and maintaining
a) Risk management framework (i.e. principles, policies, systems and processes to identify, approve, measure,
strategies, process and controls) and to ensure that monitor, control and report risks, developing risk controls
the same is being communicated throughout the Bank and mitigation processes and ensuring adherence to the
Risk Appetite established by the Board.
b) Changes in the factors relevant to the projected
strategy, business performance and capital adequacy The CRO of the Bank is independent of the business
lines and is actively involved in key decision-making
Statutory
c) Implications of new and emerging risks, legislative processes. The CRO of the Bank has unfettered access to
or regulatory initiatives and changes, organisational Board members & discusses with the RMCB Committee
change and all other major initiatives members without the presence of other executive
management of the Bank.
• Review reports from management concerning changes
in the factors relevant to the projected strategy, business The particulars of attendance of members at the
performance or capital adequacy committee meetings are given as Annexure A of Corporate
Governance Report.
• Review reports from management concerning
implications of new and emerging risks, legislative or Composition of the Risk Management Committee
regulatory initiatives and changes, organisational change
S. No. Name Position
and major initiatives, in order to monitor them
Financial
1 Mr. Mannil Venugopalan Chairman 2
• Ensure adherence to the extant internal policy guidelines
Mr. Raj Vikash Verma Member
and regulatory guidelines published from time to time
3 Ms. Jyoti Narang Member
• Review performance and set objectives for the Chief 4 Mr. Sanjay Agarwal Member
Risk Officer (CRO) and ensure the CRO has unfettered 5 Mr. Narendra Ostawal Member
access to the Board
• Oversee statutory/regulatory reporting requirements
3. Nomination and Remuneration Committee
related to risk management
(NRC)
• Monitor and review capital adequacy computation with
The NRC has been constituted by the Bank in terms of
an understanding of methodology, systems and data
Provisions of Section 178 of the Companies Act, 2013 and
• Approve the stress testing results/analysis and Regulation 19 read with Part D of Schedule II of Listing
periodically monitor the action plans and corrective Regulations and is chaired by Independent director.
measures in line with internal guidelines
• Monitor and review non-compliance, limit breaches, As on 31st March 2019, the NRC comprised four (4) Directors
audit/regulatory findings and policy exceptions with
as its members, all of them being Non-executive Directors.
respect to risk management as well as frauds and The composition of the Committee is in adherence to
potential losses provisions of Companies Act, 2013 and Listing
• Reviewing and confirming orders/decisions about Regulations.
wilful
defaulters The committee met six (6) times during the year
under review on 25th April 2018, 06th August 2018,
• Oversee the working of the Credit Risk & NPA 30th August 2018, 13th October 2018, 22nd November 2018
Management Committee (CRNPAC) for Retail and Small and 17th January 2019.
& Mid Corporate, Asset and Liability Management
Committee (ALCO) The Board of Directors has formed and approved a charter
• Review and ensure that all systems are being for the NRC setting out the roles, responsibilities and
implemented in the Bank with adequate security functioning of the Committee. In addition to adherence to
controls the provisions of the Companies Act, 2013 and Listing
Regulations the terms of reference of NRC is covered by
• Review information security events and security related its Charter and its functioning broadly inter alia includes
audit items periodically the following:
Annual Report 2018-

• Identifying persons who are qualified to become
prescribing, amending and/or rescinding rules and
Directors and who may be appointed in senior
regulations relating to the administration of the
management in accordance with the criteria laid down
ESOP plans
and recommend to the Board their appointment and
removal The particulars of attendance of member at the
Committee meetings are given as Annexure A of
• Forming criteria for determination of qualifications,
Corporate Governance Report.
positive attributes and independence of Director and
recommend to the Board of Directors a policy relating
Composition of the NRC
to the remuneration of the Directors, Key Managerial
Personnel (KMP) and other employees which is S. No. Name Position
reasonable and sufficient to attract, retain and motivate
quality Directors required to run the Bank
Mr. Mannil Venugopalan Member
• Devising a policy on diversity of Board of Directors 3 Ms. Jyoti Narang Member
4 Mr. Narendra Ostawal Member
• Conduct appropriate due diligence and scrutinise the
declarations made by probable candidates at the time of
Chairman of NRC was present in the Annual General
appointment/re-appointment of Directors of the Board,
Meeting to answer shareholders’ queries.
based upon qualification, expertise, track record,
integrity and ‘Fit & Proper’ criteria
Compensation Policy
• Ensure that the Bank has a detailed succession and
management continuity plan for key positions On the recommendation of NRC, the Board of Directors of
the Bank has formulated Compensation policy in terms
• Assist in defining the performance evaluation criteria
of Section 178 of the Companies Act, 2013, the relevant
for Directors and other Key Management Personnel and
Rules made thereunder, Regulation 19 of the Listing
ensure that relationship of remuneration to performance
Regulations and Guidelines issued by RBI in this
is clear and meets appropriate performance benchmarks
regard, from time to time and has repealed Director
• To carry out evaluation of every Director’s and senior Appointment and Remuneration policy.
management performance of the Bank for every
financial year The policy is annually reviewed by the Board of Directors
in addition to the other amendments that may be required
• Review and oversee the Employee Benefits’ programme
in the policy during the year. The policy is hosted by the
of the Bank, including deferred benefits plans and
Bank on its website and can be accessed through the link
retirement plans
at www.aubank.in/au-notice-board
• Perform any other duties and responsibilities expressly
delegated by the Board from time to time and as driven
Succession Planning
by the Compensation Policy of the Bank
The Bank believes that a sound succession plan for the
• Perform such functions as are required to be
Directors and Senior Management executives is important
performed by the Nomination and Remuneration
to sustain seamless operations and future growth.
Committee (Compensation Committee) under the SEBI
Accordingly, the Bank has put in place the policy for
(Share Based Employee Benefits) Regulations, 2014,
succession planning and the same can be accessed through
including the following:
the link at www.aubank.in/au-notice-board
• Administering the ESOP plans
• Determining the eligibility of employees to Performance Evaluation of Directors
participate under the ESOP plans
The Bank followed objectives-based approach for carrying
• Granting options to eligible employees and out performance evaluation of Directors.
determining the date of grant
Performance evaluation of the Board as a whole, as well
• Determining the number of options to be granted to
as that of its Committees, Independent Directors and Non-
an employee
independent Directors was completed in accordance with
• Determining the exercise price under the ESOP plans the relevant provisions of the Companies Act, 2013
read with relevant rules made thereunder and Listing
• Construing and interpreting the ESOP plans and any
Regulations and in compliance of guidance note issued by
agreements defining the rights and obligations of Bank
SEBI.
and eligible employees under the ESOP plans, and
122|
Performance evaluation is carried out on the basis of 5th January 2017 and Secretarial Standards issued by the
Corporate
criteria and mechanism adopted by the Board of Directors Institute of Company Secretaries of India, Independent
as recommended by the NRC. The said evaluation is Directors of the Bank in their meeting:
carried out on the basis of below parameters:
I. Reviewed the performance of Non-independent
• Performance of Directors was evaluated on the basis Directors and the Board as a whole
of their qualifications, experience, knowledge and
competency, fulfilment of functions, ability to function as II. Evaluated the performance of the Chairperson of
a team, initiatives undertaken, availability and the Bank, taking into account the views of Executive
attendance, commitment, contribution and integrity, Directors and Non-executive Directors
leadership, value creation, governance, impartial
approach and shareholders’ interest III. Assessed the quality, quantity and timeliness of flow
Statutory
• Performance of the Board as a whole, including the of information between the Bank’s management and
structure of the Board, meetings of the Board, functions the Board that is necessary for the Board to
of the Board were reviewed and evaluated effectively and reasonably perform its duties
• Evaluation of performance for Chairman, including

qualifications, experience, knowledge and competency, Remuneration of Executive Directors
fulfilment of functions, initiatives undertaken, Mr. Sanjay Agarwal, Managing Director & CEO of the Bank
attendance, contribution and integrity, effectiveness of and Mr. Uttam Tibrewal, Whole-Time Director of the Bank
leadership, impartial and shareholders’ interest are performing duties of Executive Directors.
• Performance evaluation of Committees include its
mandate, composition and their effectiveness RBI vide its letter dated 21st February 2019 has approved
the remuneration (fixed pay) to be paid to Mr. Sanjay
Financial
The Board evaluation was conducted through Agarwal, Managing Director & CEO and Mr. Uttam
questionnaire having qualitative parameters and feedback Tibrewal, Whole-time Director i.e. Executive Directors of
based on ratings assigned against each parameter. The the Bank.
performance evaluation of Independent Directors of the
Bank is carried out excluding the Director being evaluated, Remuneration paid to the Executive Directors is
Board as a whole and its committees by the Board of recommended by Nomination and Remuneration
Director of the Bank. Committee to the Board, the Board if deems fit, approves
the same and it is subject to shareholder’s approval.
In view of the guidance note on the Board evaluation issued
by the Securities and Exchange Board of India (SEBI) vide The remuneration paid to executive Directors were
circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated within the limits as approved by RBI.
The remuneration paid to Executive Directors is governed by employment agreement executed between the Bank and
Executive Directors.
Details of remuneration paid to Executive Director is enumerated below:

(in `)
S. No. Items Remuneration (p.a.) Remuneration (p.a.)
1 Salary 67,60,464 58,60,596

2 House rent allowance 33,80,232 29,30,304
3 Other allowances
(a) Special Allowance 67,23,858 58,24,002
(b) Transport Allowance 19,200 19,200
(c) Education Allowance 2,400 2,400
(d) Medical Reimbursement 15,000 15,000
Total 1,69,01,154 1,46,51,502
Perquisites
1 Free furnished house Nil Nil
2 Free use of the Bank’s car
-Official purpose Two cars with chauffeur for each One car with chauffeur
-Private use - -
-Servant allowance Reimbursement of servant expenses -
Annual Report 2018-

122|
(in `)
S. No. Items Remuneration (p.a.) Remuneration (p.a.)
3 Provident Fund/Gratuity/Pension
-Provident Fund As applicable to all employees of the As applicable to all employees of the
-Gratuity Bank 23,670 Bank 23,670
3,25,176 2,81,892
4 Travelling and halting allowances On Actuals On Actuals
5 Medical reimbursement Ceiling of one month’s basic salary annually Ceiling of one month’s basic
or three months’ basic salary over 3 years salary annually or three months’
basic
salary over 3 years
6 Other benefits Total of `5,00,00,000 for heath, personal Total of `5,00,00,000 for heath, personal
- Insurance accidental insurance and Group accidental insurance and Group Insurance
Insurance Scheme, together Scheme, together
-Leave Travel Concession For self and family once, a year incurred For self and family once, a year incurred in
in accordance with Company rules. accordance with Company rules.
The Bank has not granted any Stock Options to any

Remuneration of Non-executive Directors
Directors of the Bank except for Mr. Uttam Tibrewal Whole
Time Director of the Bank. Mr. Uttam Tibrewal, Whole The remuneration to the Non-executive Directors is paid in
Time Director of the Bank was granted 63,90,120 ESOPs the form of sitting fees and profit linked commission.
under various Employee Stock Option Schemes of the
Bank. Out of which 24,69,198 options have been vested In pursuance to the guidelines issued by RBI vide
and exercised till 31st March 2019. Further, 39,20,922 Circular No. DBR. No.BC.97/29.67.001/2014-15 dated
options remain unvested as on 31st March 2019. 1st June 2015 on the Compensation of Non-executive
Directors of Private Sector Banks so as to attract and
He was granted 10,00,000 ESOPs under ESOP Scheme retain professional Directors, it is essential that such
2018 during the year at exercise price of `664 which are Directors are appropriately compensated. Accordingly, in
subject to RBI approval. The vesting period shall commence addition to sitting fees, the Bank also pays profit linked
any time after the expiry of one year from the date of the commission to the Non-executive Independent Directors.
grant of the options and could extend up to six years from
the date of first vesting of options subject to RBI approval. The Bank pays sitting fees of `40,000 and `20,000 to Non-
During the year 4,99,500 ESOPs under ESOP Scheme 2015 executive Directors for every Board and Committee
- Plan A & 6,18,577 ESOPs Under ESOP Scheme 2015 - meeting attended respectively. The amount paid to
Plan B were vested and exercised. He was granted 38,702 Independent Director by way of sitting fees and
ESOPs under ESOP Scheme 2015 – Plan A and commission are within the limits prescribed under the
10,18,758 ESOPs Under ESOP Scheme 2015 - Plan B provisions of Companies Act, 2013.
during last financial year at exercise price of `10.11 and
`33.37 each, respectively which are subject to RBI None of the Non-executive Directors have any
approval. Variable Pay for Mr. Sanjay Agarwal for FY pecuniary relationship or transaction with the Bank apart
2017-18 and Mr. Uttam Tibrewal for performance for FY from receiving sitting fee and profit-linked commission.
2016-17 and FY 2017-18 is pending with RBI for its
approval. The details of sitting fees and profit linked
commission paid to Non-executive Directors is
The Bank follows objective-based approach for mentioned as below:
performance evaluation of Executive Directors in view of (in `)
their contribution to the Bank’s overall growth. Variable pay Name of Director Sitting Fees Commission* Total
is decided as a percentage of fixed pay which is
recommended by the NRC on the basis of objective Mr. Mannil Venugopalan 8,20,000 17,00,000 25,20,000
assessment of their performance and in consonance with Mr. Krishan Kant Rathi 9,20,000 10,00,000 19,20,000
RBI guidelines in the matter. Ms. Jyoti Narang 7,60,000 10,00,000 17,60,000 Mr.
Raj Vikash Verma 7,80,000 10,00,000 17,80,000
The tenure of the office of the Managing Director & CEO
*The payment of Profit Linked Commission pertaining to FY 2018-
and Whole Time Director is three years from their 19 Directors is being released post finalisation of Annual Accounts
respective dates of appointments and can be terminated for FY 2018-19 of the Bank.
by either party by giving one month notice in writing.
There is no provision for payment of severance fees.
Annual Report 2018-

4. Stakeholders Relationship Committee • Review and address of matters pertaining to Registrar
Corporate
and Share Transfer Agents, including appointment of
Pursuant to provisions of Section 178 of the Companies
new Registrar and Share Transfer Agent in place of
Act, 2013 and Regulation 20 of Listing Regulations, the Bank
existing one
has a Stakeholders Relationship Committee for resolving
the grievances of the security holders of the Bank, • Perform any other duties and responsibilities expressly
including complaints related to transfer of shares, non- delegated by the Board from time to time
receipt of annual report and others.
The Company Secretary acts as Secretary to the Committee.
As on 31 March 2019 the composition of Stakeholders
st
The particulars of attendance of members at the
Relationship Committee comprised three (3) members and committee meetings are given as Annexure A of Corporate
the Committee met four (4) times during the year under Governance Report.
review on 26th April 2018, 06th August 2018, 29th October
Statutory
Composition of the Stakeholders Relationship
2018 and 17th January 2019.
Committee
The Board has approved Charter for Stakeholders S. No Name Position
Relationship committee setting out roles and
responsibilities of the committee. Terms of reference
1 Mr. Raj Vikash Verma Chairman 2
of the Committee are in adherence to the Provisions as
Mr. Krishan Kant Rathi Member 3
stipulated under Section 178 of the Companies Act 2013
Mr. Sanjay Agarwal Member
and Regulation 20 read with Part D of the Schedule II of
Listing Regulations. Terms of reference are covered in
charter, which inter alia broadly includes the following: Investors Complaints
All shares of the Bank are in dematerialised form. The
• Change in any correspondence details of the Bank has appointed Link Intime India Private Limited as
Financial
shareholder(s) the Registrar and Share transfer agent of the Bank for
carrying out share transfer and other ancillary work related
• Develop and recommend improvements in the investor
thereto.
services initiatives undertaken by the Bank
• Review and address all matters pertaining to Link Intime India Private Limited has appropriate systems
Depositories for dematerialisation of shares of the to ensure that requisite service is provided to investors of
Bank and other matters connected therewith the Bank in accordance with the applicable corporate and
securities laws and within the adopted service standards.
• To oversee the performance of the Registrar and
The performance of the Registrar & Share Transfer
Transfer Agent of the Bank and recommends measures
Agent (RTA) is reviewed by the Stakeholders Relationship
for overall improvement in the quality of investor
committee in every quarterly meeting.
services
• Monitor the shareholding structure of the Bank, including Compliance Officer of the Bank
foreign holding in terms of FDI policy
Mr. Manmohan Parnami, Company Secretary designated
as compliance officer of the Bank.
During the year under review, complaints as stated below were received by the RTA for the period under review:
Number of Number of Number of
S. No Name Complaints received Complaints disposed Complaints remained
during the period of during the period unresolved
1 Non-Receipt of Dividend/Interest/Redemption Warrant NIL NA NA

2 Non-Receipt of Annual Report 1 1 NIL
3 Non-receipt of Refund/Credit of Shares – IPO 3 3 NIL
4 Non-receipt/Non-allotment of shares 1 1 NIL
5 SEBI Scores 4 4 NIL
Total 9 9 NIL
The status of investor correspondence(s)/complaint(s)

All complaints received during the period under review
received and resolved during the year was also tabled at
have been satisfactorily resolved by the Bank.
the meeting(s) of Stakeholders Relationship Committee for
its review and noting.
124|
5. IT Strategy & Information Systems Security

As on 31st March 2019 composition of Corporate
Committee
Social Responsibility Committee comprised five (5)
IT Strategy & Information Systems Security Committee members. The committee met twice (2 times) during
was formed by the Board of Directors of the Bank for the year on 26th April 2018 and 29th October 2018.
facilitating and building an effective IT infrastructure,
governance framework and periodically review the Bank’s The terms of reference of the committee which broadly
IT policy. The Committee further identifies the risks inter-alia include the following:
affecting operations of the Bank and managing it through
Risk Control Matrix, internal controls and ensuring that the • Formulate and recommend to the Board of the Bank a
management has sufficient resources for mitigation of IT Corporate Social Responsibility (CSR) policy, which
and security related risks. shall indicate the activities to be undertaken by the Bank
as per Schedule VII of the Companies Act, 2013
As on 31st March 2019 Composition of IT Strategy &
Information Systems Security Committee comprised four • Recommend the amount of expenditure to be incurred in
(4) members. The committee met four (4) times during the activities provided for the CSR policy
the year under review on 25 th April 2018, 06th August 2018, • Monitor the implementation and effectiveness of the CSR
29th October 2018 and 16th January 2019. policy from time to time
Terms of reference in addition to the regulatory • Perform such other duties with respect to CSR activities
requirements is governed by the charter, which broadly as may be required to be done under any law, statute,
inter alia includes the following: rules, regulations and others enacted by the Government
of India, the Reserve Bank of India or by any other
• Review the IT-related strategy and policy regulatory or statutory body
• Evaluate the investments made into IT infrastructure The particulars of attendance of members at the
to sustain the Bank’s growth Committee meetings are given as Annexure A of
• Implement IT governance infrastructure covering basic
principles of value delivery, IT risk management, IT Composition of the Corporate Social Responsibility
resource management and performance management Committee
• Ensure a governance structure shall be created for IT,

which will include technology and development, IT S. No Name Position
operations, IT assurance and supplier and resource 1 Ms. Jyoti Narang Chairperson
management 2 Mr. Mannil Venugopalan Member
• Review security incidents and corrective action plans 3 Mr. Krishan Kant Rathi Member
4 Mr. Raj Vikash Verma Member
The particulars of attendance of members at the 5 Mr. Sanjay Agarwal Member
Corporate Governance Report. Report on Corporate Social Responsibility is enclosed as
Composition of the IT Strategy & Information Annexure II to the Board’s Report.
Systems Security Committee
7. Customer Service Committee
S. No Name Position
Customer Service Committee is constituted by the Board
of Directors of the Bank to ensure fairness and
Mr. Raj Vikash Verma Member 3
reasonableness in all the dealings with the customers and
Mr. Uttam Tibrewal Member 4
ensuring transparent communication of information
Mr. Narendra Ostawal Member
pertaining to products, services & related procedures and
to resolve customer complaints quickly and empathetically
6. Corporate Social Responsibility Committee and facilitate continuous improvement in quality of the
customer service and to ensure overall customer
Pursuant to the provisions of Section 135 of the satisfaction level.
Companies Act, 2013 Corporate Social Responsibility (CSR)
Committee was constituted and the Board has approved As on 31st March 2019 composition of Customer Service
the Charter of the CSR Committee setting out the committee comprised three (3) members and committee
responsibilities, roles of the Committee. met four (4) times during the year under review on
25th April 2018, 06th August 2018, 29th October 2018 and
16th January 2019.
Annual Report 2018-

Terms of reference in addition to the regulatory The Committee responsibility inter alia includes review
requirements is governed by the charter which broadly and examination of the evidence of wilful default on the
Corporate
inter alia includes the following: part of the borrower, borrowing company and its
Director/ Whole-time Director; and control, manage and
• Review the effectiveness of grievance redressal review wilful defaulters on a Bank-wide basis as
mechanism within the Bank for redressing complaints identified by the Wilful Defaulters Identification
received about services rendered by Business Committee.
Correspondents (BC)
Terms of reference in addition to the regulatory
• Evaluate the trend analysis of customer complaints
requirements is governed by the charter, which broadly
by product categories/channels/BCs and monitor
inter alia includes the following:
improvement plans
• Review and approve comprehensive Deposit Policy and • To review and confirm the order of Wilful Defaulters
Statutory
seek to address issues such as treatment of death of a Identification committee
depositor for operations in such accounts
• Identification of wilful defaulters based on thorough
• Assess Banking Ombudsman awards on a periodic review and examination of the borrower, borrowing
basis, address systemic deficiencies brought out by company and its Director/Whole-time Director
these awards and report cases with delayed
• Identification of critical areas leading to additions of
implementation of more than three months to the
Board with reasons for delay to facilitate necessary wilful defaults and examine evidence of wilful default on
remedial action on priority the part of the Bank’s borrowers
• Review statement of complaints, along with an analysis • Identification of the cause of delay in detection of wilful
of complaints defaults
• Review the performance of ‘Standing Committee for • Issue show cause notice to concerned borrower and
Financial
Customer Services’ and other Sub Committees the Promoter/Whole-time Director and call for their
submissions and after considering their submissions,
• Benchmark review of turnaround time for key products issue an order recording the details and reasons of wilful
offerings and monitoring improvement plans put in place default
The particulars of attendance of members at the • Make recommendations and assist the management to
Committee meetings are given as Annexure A of design mechanisms to improve the process.
• Technical knowledge of the staff and to share leading
Composition of the Customer Service Committee practices to early identify the wilful defaulters
S. No Name Position The particulars of attendance of members at the
1 Ms. Jyoti Narang Chairperson 2
Mr. Mannil Venugopalan Member 3 Mr.
Sanjay Agarwal Member Composition of the Review of Wilful Defaulters
Committee
8. Review of Classification Of Wilful Defaulters S. No Name Position

Committee 1 Mr. Mannil Venugopalan Chairperson
The Committee has been formed by the Board for carrying 2 Mr. Raj Vikash Verma Member
out an independent review, monitoring and follow up of 3 Mr. Krishan Kant Rathi Member
wilful defaults cases of `25 lakh and above, and provide 4 Mr. Sanjay Agarwal Member
guidance to the Audit Department, Recovery 5 Mr. Uttam Tibrewal Member
Department and the relevant members of the
management involved in the credit and recovery
process. 9. Special Committee For Fraud Monitoring
(SFMC)
As on 31st March 2019 Composition of Review of Pursuant to the directives issued by the RBI, the Bank has
classification of Wilful Defaulter Committee comprised five set up and formed Special Committee for Fraud Monitoring
(5) members and the committee met four (4) times (SFMC) for monitoring and follow up on cases amounting
during the year under review on 26th April 2018, 06th August to
2018, 29th October 2018 and 16th January 2019. `1 crore and above. The Committee identifies the systemic
126|
lacunae, if any, that facilitate perpetration of the fraud

and put in place measures to plug the same and also 10. Disciplinary Committee
evaluate existing systems and procedures for fraud The Disciplinary Committee has been formed by the
detection and prevention. Board of Directors of the Bank to achieve the following
key objectives:
As on 31st March 2019 Composition of Special Committee
for Fraud Monitoring (SFMC) comprised five (5) members • Approve the policy on Code of Conduct for
and the committee has met one (1) time during the year employees, recommend the same to the Board and
under review on 25th April 2018. appropriately review as and when required
Terms of reference in addition to the regulatory • Setting up of a transparent mechanism to decide and
requirements is governed by the charter, which broadly resolve complaints from employees and take appropriate
inter alia includes the following: corrective action plan
• Resolution of complaints received by the Bank including
• Monitor and review all frauds of `1 crore and above sexual harassment and enforce disciplinary action
• Identify the system lacunae if any that facilitate against the erring employees
perpetration of the fraud and put in place measures to • Taking appropriate remedial measures to respond to
plug the same any substantiated allegations of a complaint (sexual
• Evaluation of existing systems and procedures for fraud harassment or disciplinary) against an employee
detection and prevention • Promote appropriate working conditions and a safe
• Identify the reasons for delay in detection, if any, in environment for all employees
reporting to top management of the Bank and RBI As on 31st March 2019 Composition of Disciplinary
• Review the efficacy of the remedial action undertaken to Committee comprised five (5) members and the
prevent recurrence of frauds, such as strengthening of Committee has met two (2) times during the year under
internal controls review on 25th April 2018 and 29th October 2018.
• Monitoring progress of police investigation and recovery Terms of reference in addition to the regulatory
position and ensure that staff accountability is examined requirements is governed by the charter, which broadly
at all levels in all fraud cases and staff side action, if inter alia includes the following:
required, is completed quickly without loss of time
• Put in place other measures to strengthen preventive • Maintaining complete confidentiality and protection of
measures against frauds identity of the whistle blowers/complainants.
The particulars of attendance of members at the • Creating awareness of the rights of female employees
Committee meetings are given as Annexure A of with regards to sexual harassment.
Corporate Governance Report. • Take necessary steps to assist the affected person in
Composition of the Special Committee for terms of support and preventive action if the instance
Fraud Monitoring of sexual harassment occurs as a result of an act or
omission by any outsider.
S. No Name Position
• Initiate disciplinary actions such as fine or
1 Mr. Mannil Venugopalan Chairperson 2 suspension or termination against the responsible
Mr. Raj Vikash Verma Member 3 Mr. employee if an improper/unethical act is proved.
Krishan Kant Rathi Member 4 Mr.
Sanjay Agarwal Member 5 Mr. • Review number and nature of complaints received
Uttam Tibrewal Member from the whistle-blowing platform and resolution
status of the same.
Annual Report 2018-

The composition of the committee and particulars of
attendance of members at the committee meeting are • Proposals for credit facilities to the relatives of senior
Corporate
given as Annexure A of Corporate Governance Report. officers of the Bank sanctioned by the appropriate
authority should be reported to the Board through
Management Committee.
Composition of the Disciplinary Committee
• Any company in which any of the relatives of any senior
S. No Name Position
officer of the financing bank holds substantial interest
1 Ms. Jyoti Narang Chairperson 2 or is interested as a director or as a guarantor, such
Mr. Krishan Kant Rathi Member 3 Mr. transaction should also be reported to the Board through
Sanjay Agarwal Member 4 Mr. Management Committee.
Uttam Tibrewal Member 5 Mr.
• Sanction of proposals with exposure of more than `25
Narendra Ostawal Member
lakh to:
Statutory
(i) Any relative of the Chairman/Managing Directors
11. Management Committee or other Directors of the Bank
The Management Committee has been constituted to
(ii) Any relative of the Chairman/Managing Director
consider all matters of credit approvals including sanction
or other directors of other banks
of loans and advances, modifications in terms and
conditions etc. The committee is also responsible for (iii) Any firm in which any of the relatives as
compliance of RBI directives on loans & advances and mentioned in (i) & (ii) above is interested as a
monitoring of credit proposals. The Committee is headed
partner or guarantor
by an Independent Director who shall be chairman of
the committee.
(iv) Any company in which any of the relatives as
mentioned in (i) & (ii) above hold substantial
Financial
As on 31 March 2019 composition of Management
st
interest or is interested as a director or as a
Committee comprised three (3) members and committee
guarantor
has met one (1) time during the year under review on
17th January 2019.
The particulars of attendance of members at the
Terms of reference in addition to the regulatory
requirements is governed by the charter, which broadly
inter alia includes the following:
Composition of the Management Committee
S. No Name Position
• To approve credit facilities `50 crore & above to New
Exposure/Loan to Existing Customers along with 1 Mr. Mannil Venugopalan Chairman
Existing facility. 4 Mr. Raj Vikash Verma Member
5 Mr. Sanjay Agarwal Member
128|
Annexure A
Details of Attendance of members for Committee meetings held during FY 2018-19

Name of Members (Meeting Attended)
Meeting
Mr. Raj Mr.
Name of Committee Held For Mr. Mannil Mr. Krishan Mr. Sanjay Mr. Uttam Ms. Jyoti
Vikash Narendra
FY 2018-19 Venugopalan Kant Rathi Agarwal Tibrewal Narang
Verma Ostawal
Audit Committee 5 5 5 5 NA 5 5 3
Risk Management Committee 4 4 4 4 NA NA 4 2
Nomination and 6 6 6 NA NA 6 NA 4
Remuneration Committee
Stakeholders Relationship 4 4 4 4 NA NA NA 2
Committee
IT Strategy & Information 4 NA 4 4 4 4 4 2
Systems Security Committee
Corporate Social 2 2 2 2 NA 2 2 NA
Responsibility Committee
Customer Service Committee 4 NA NA 4 4 4 4 2
Review of classification of 4 4 4 4 4 NA 4 NA
Wilful Defaulter
Special Committee for 1 1 1 1 1 1 1 NA
Fraud Monitoring (SFMC)
Disciplinary Committee 2 NA 2 2 2 2 NA 2
Management Committee 1 1 NA 1 NA NA 1 NA
Audit Committee
Mr. Narendra Ostawal ceased to be the member of the committee on 16th January 2019 and was re-appointed as a member of the committee
w.e.f. 17th January 2019.
Risk Management Committee
Mr. Narendra Ostawal ceased to be the member of the committee on 16th January 2019 and was re-appointed as a member of the committee
Mr. Krishan Kant Rathi ceased to be a member of the committee w.e.f. 17th January 2019.
Ms. Jyoti Narang was appointed as a member of the committee w.e.f. 17 th January 2019.
Nomination & Remuneration Committee
Mr. Narendra Ostawal ceased to be the member of the committee on 16th January 2019 and was re- appointed as a member of the committee
Stakeholder Relationship Committee
Mr. Narendra Ostawal ceased to be member of the committee w.e.f. 16th January 2019.
Mr. Mannil Venugopalan ceased to be a member and the chairman of the committee w.e.f. 17 th January 2019.
Mr. Raj Vikash Verma was appointed as a member and the chairman of the committee w.e.f. 17th January 2019.
IT Strategy & Information Systems Security Committee
Mr. Sanjay Agarwal ceased to be a member of the committee w.e.f. 17th January 2019.
Ms. Jyoti Narang ceased to be a member of the committee w.e.f. 17th January 2019.
Customer Service Committee
Mr. Narendra Ostawal ceased to be a member of the committee w.e.f. 16 th January 2019.
Mr. Raj Vikash Verma ceased to be a member of the committee w.e.f. 17 th January 2019.
Mr. Uttam Tibrewal ceased to be a member of the committee w.e.f. 17th January 2019.
Mr. Mannil Venugopalan was appointed as a member of the committee w.e.f. 17th January 2019.
Special Committee for Fraud Monitoring
Ms. Jyoti Narang ceased to be a member of the committee w.e.f. 17th January 2019.
Disciplinary Committee
Mr. Krishan Kant Rathi ceased to be the Chairman of the committee w.e.f. 17th January 2019.
Ms. Jyoti Narang was appointed as the Chairman of the committee w.e.f. 17th January 2019.
Annual Report 2018-

GENERAL SHAREHOLDER INFORMATION
Corporate
Financial Year - 1st April, 2018 to 31st March 2019
The details of the location and time of the last three Annual General Meetings are given below:
Year Date & Time Venue Special Resolutions Passed
2015-16 31 August 2016

st
11.00 AM Flexible Room, B-11-E, behind 1. Authorisation to borrow money in excess of paid up
CEG Building Malviya Nagar, capital and free reserves of company U/s 180 (1) (c)
Industrial Area, Malviya of the companies Act, 2013
Nagar, Jaipur – 302017 2. Authorisation to sell, lease or otherwise dispose of
the assets of the Company for such borrowings u/s
Section 180(1)(a) of the Companies Act, 2013;
Statutory
3. Alteration of Existing Articles of
Association of the Company.
2016-17 27 September 2017
th
02:00 PM Suryavanshi Mahal- 1. To confirm/ratify article no. 13(b) of Articles of

Ground floor, ITC Rajputana association of Bank.
Palace Road, Jaipur - 2. To ratify Employee Stock Option scheme 2015 of
302006 AU Small Finance Bank Limited
3. To ratify Employee Stock Option scheme 2016 of
2017-18 07 August 2018
th
03:30 PM 1. To authorise the Board to borrow money in excess of

Chancellor Hall, Hotel paid up capital, free reserves and securities premium
Holiday Inn, Sardar Patel of Bank u/s 180(1)(c) of the Companies Act, 2013
Financial
Marg, 22 Godam Circle, C– 2. To approve issue of securities/bonds/other
Scheme, Jaipur-302001 permissible instruments, in one or more tranches
3. To approve AU Small Finance Bank Limited
Employee Stock Option Scheme 2018
Resolutions passed in the Extraordinary General Meeting (EGM) of the Bank held during the Financial
Year 2018-19, by means of a Special Resolution
During the year under review, Extraordinary General Meeting of the Bank was held on 15th June 2018, wherein the
approval of the Members was sought for the following matters, by means of a special resolution.
Year Date & Time Venue Special Resolutions Passed
2018-19 15 June 2018

th
04:00 PM Bank house, Mile 0, Ajmer Road, Issuance of Equity shares and convertible warrants on
Jaipur - 302001 preferential Basis
POSTAL BALLOT
Companies (Management and Administration) Rules, 2014
During the period under review, no special resolutions has and any other applicable provisions of the Companies Act,
been passed by the Bank through postal Ballot However, 2013, as amended from time to time the Bank has passed
pursuant to the Provisions of Section 108 and Section the following resolution as Ordinary Resolution through
110 of the Companies Act, 2013 read with Rule 22 of the Postal Ballot on 20th October 2018.
Agenda: To reclassify the status of existing Promoter’s Group to Public Shareholders.

No. of Votes in favour No. of Votes against Percentage (%) of votes in favour Percentage (%) of votes against
19,84,83,388 1760 99.9991 0.0009
CS Manoj Maheshwari, Practicing Company Secretary

None of the special resolution proposed to be passed in
(Jaipur), was appointed as the scrutiniser for monitoring
the AGM Notice requires to be conducted through postal
& scrutinising remote e-Voting and postal ballot
ballot.
process of the Bank.
130|
PROCEDURE OF THE POSTAL BALLOT

REGISTERED OFFICE OF BANK
The Postal Ballot procedure followed by the Bank is as
19-A, Dhuleshwar Garden, Ajmer Road,
stipulated under the provisions of Section 108 and Section
Jaipur - 302001, Rajasthan, India
110 of the Companies Act, 2013 read with applicable
Rules and Listing Regulations and the Secretarial
Standards issued by Institute of Company Secretaries of REGISTRAR AND SHARE TRANSFER AGENT &
India. CONNECTIVITY
The Equity Shares of the Bank have been admitted with
Members are provided with the facility to cast their votes
both the depositories: National Securities Depository
through electronic voting (e-Voting) or through postal
Limited (NSDL) and Central Depository Services (India)
ballot. The Board of Directors of the Bank appointed
Limited (CDSL). The Bank has appointed Link Intime India
Scrutiniser for conducting the postal ballot voting process
Pvt. Ltd. as the connectivity agent to provide electronic
in a fair and transparent manner. The Scrutiniser
connectivity interface with National Securities Depository
submits his report to the Chairman or any other Director
Limited (NSDL) and Central Depository Services Limited
as authorised by the Board on this behalf after the
(CDSL) for securities of the Bank.
completion of the scrutiny of the postal ballots (including
e-Voting).
DEBENTURE TRUSTEES
Considering the results, along with report of the Scrutiniser
of the Postal Ballot the resolution is considered approved.
IDBI Trusteeship Services Ltd.
Regd. Office: Asian Building, Ground Floor,
The necessary intimations as required under the 17, R Kamani Marg, Ballard Estate, Mumbai 400001
applicable Listing regulations are submitted to the Stock Phone: +91 22 40807000
Exchanges and post declarations of the results the same Fax: +91 22 66311776
are displayed on website of the Bank & of Registrar and Email: itsl@idbitrustee.com
Share Transfer Agent and displayed at the Registered
Office of the Bank. Catalyst Trusteeship Limited
Regd. Office: GDA House, First Floor,
Plot No. 85 S. No. 94 & 95, Bhusari Colony (Right),
ANNUAL GENERAL MEETING
Kothrud, Pune 411038 IN
Annual General Meeting of the Bank is scheduled to be Phone: +91 22-49220555
held on Friday, 26th July 2019 at Suryavanshi Mahal – Email: compliancectl-mumbai@ctltrustee.com
Ground Floor, ITC Rajputana, Palace Road, Jaipur-302006,
Rajasthan, India at 04:00 p.m.
DETAILS OF REGISTRAR AND SHARE TRANSFER
AGENT
Link Intime India Pvt. Limited
FINANCIAL YEAR
C-101, 1st floor, 247 Park, L.B.S Marg,
The Bank follows the financial year starting from 1st April Vikhroli (West), Mumbai 400083
to 31st March, every year. Maharashtra, India
Tel: +91 22 4918 6200, FAX: +91 22 49186195
Website: www.linkintime.co.in
DATE OF BOOK CLOSURE
Email ID: rnt.helpdesk@linkintime.co.in
20th July 2019 to 26th July 2019 (both days inclusive)
Annual Report 2018-

CREDIT RATING DISCLOSURE
Corporate
Below table covers the Credit Ratings of the Bank as on 31st March 2019
Nature of Debt Instrument Nature of Term India Ratings CRISIL ICRA CARE
Non-Convertible Debentures Long Term AA-/Stable AA-/Stable AA-/Stable -

Subordinated Debt/Tier II Bonds Long Term AA-/Stable AA-/Stable AA-/Stable -
Bank Loans Long Term AA-/Stable - AA-/Stable AA-/Stable Certificate of
Deposits Short Term A1+ A1+ - -
During the year, credit rating of the Bank was upgraded by ICRA & CRISIL from A+/Positive to AA-/Stable, respectively.
ADDRESS FOR CORRESPONDENCES

and Senior Management Personnel of the Bank have
Statutory
The Company Secretary & Compliance Officer,
complied with the said code is annexed to this report.
Registered Office: 19-A, Dhuleshwar Garden, Ajmer Road,
3. Code of Conduct for Prohibition of Insider Trading
Jaipur - 302001
Tel: +91-141-4110060/6660666 | Fax: +91-141-4110090 The Bank has formulated a code for the prohibition of
Email: investorrelations@aubank.in insider trading in the shares of the Bank. The Code of
Conduct - Prohibition of Insider Trading Policy, inter
LISTING ON STOCK EXCHANGE(S) alia, prohibits purchase/sale of shares of the Bank
by designated persons and other connected persons
BSE Limited- SCRIP CODE: 540611
while in possession of unpublished price sensitive
P J Towers, Dalal Street, Fort, Mumbai - 400001 information in relation to the Bank.
National Stock Exchange of India Limited-
Financial
The Code requires designated persons to obtain pre-
SYMBOL: AUBANK clearance from the Compliance Officer for dealing in
the Bank’s securities beyond prescribed threshold
Exchange Plaza, Bandra-Kurla Complex, Bandra (East),
limits. The designated persons are also prohibited
Mumbai - 400 051
from entering contra trades on the floor of the Stock
ISIN: INE949L01017
Exchange(s) and from dealing in securities of the
Bank’s Listed Client Companies during the period(s)
Bank has deposited the annual listing fees to the stock
notified to them.
exchange(s) where the securities of the Bank are listed.
The Bank periodically reviews the efficacy of its
PLANT LOCATION systems, controls and processes to ensure that
access to unpublished price sensitive information
As the Bank is engaged in the business of
relating to its financial results or that of its
banking/financial
securities is on a need to know basis.
services, there is no plant location.
4. Related party Transactions
OTHER DISCLOSURES
All transactions entered into with Related Parties as
1. CEO and CFO Certification defined under the Companies Act, 2013 and
Managing Director & CEO and CFO of the Bank have Regulation 23 of the Listing Regulations, during the
issued a certificate in terms of Regulation 17(8) of financial year, were in the ordinary course of business
and on arm’s length pricing basis and do not attract
the Listing Regulations, certifying that the financial
statements do not contain any materially untrue the provisions of Section 188 of the Companies Act,
statement and these statements represent a true and 2013. There were no materially significant transactions
fair view of the Bank’s affairs. The said certificate is with related parties, during the financial year, which
annexed to the Corporate Governance Report. conflicted with the interest of the Bank. Suitable
disclosure as required by the Accounting Standards
2. Code of Conduct (AS-18) has been made in the notes to the Financial
Statements. The details of the transactions with
The Bank has formulated and adopted Code of related parties, if any, are placed before the Audit
Conduct for Directors and the Senior Management Committee from time to time.
Personnel of the Bank. A certificate issued by the
Managing Director & CEO of the Bank confirming Further, the Board of Directors has formulated a policy
that all the Directors on Related Party Transactions and materiality for
132|
dealing with Related Party Transactions pursuant to

the provisions of the Companies Act, 2013 and Listing 9. Subsidiary Companies
Regulations. The same is displayed on the weblink of During the period under review, the Bank does not
the Bank at www.aubank.in/au-notice-board have any Subsidiary Companies.
5. Penalties 10. Accounting Treatment

No penalties, strictures have been imposed on the The Bank has adopted accounting policies, which are
Bank by the Stock Exchange(s)/SEBI or any other in line with the Accounting Standards and Financials
statutory authorities on matters relating to capital statements are prepared in adherence to the
market during the last three years. accounting policies, Accounting Standards and
applicable provisions of Companies Act, 2013,
6. Whistle Blower policy & Vigil Mechanism Banking Regulation Act, Guidelines issued by
The Whistle Blower Policy has been formulated as Reserve Bank of India and Listing Regulations.
part of corporate governance norms and transparency
where the employees, customers, stakeholders are 11. Means of Communication
encouraged to refer any protected disclosures, which Bank publishes/announces duly reviewed financial
have not been resolved or satisfactorily resolved results on quarterly basis at Stock Exchange(s) and a
within the usual applicable protocols. The employees Press Release sent to leading media publications.
may refer any protected disclosures covering areas The financial results of the Bank are also posted on
such as corruption, misuse of office, criminal offences, the website of the Bank. The Managing Director &
suspected/actual fraud, failure to comply with existing CEO/ WTD & CFO and Chief of Investor Relations at
rules and regulations and acts resulting in financial regular intervals comes on conference call with the
loss/operational risk, loss of reputation and others analysts/ shareholders and responds to the queries
detrimental to customers’ interest/public interest. from investors on quarterly basis. The financial results
During the year, no person was denied access to of the Bank are published in the renowned dailies
the Audit committee or its chairman to raise his/her such as Economic Times, Punjab Kesari and Financial
concern under vigil mechanism. Express. The financial results, presentations and press
releases of the Bank are also hosted on the website of
7. Declaration of Independence the Bank at https://www.aubank.in/investor-
The Independent Directors have confirmed that they relations
meet the criteria of ‘Independence’ as stipulated under
provisions of Section 149 (6) Companies Act, 2013 & Documents like Notices of general meetings, Annual
Regulation 16 (1) (b) of the Listing Regulations. Reports, ECS advises for dividends, etc. are sent to
the shareholders at their e-mail address, as registered
The Terms and Conditions of appointment of with their Depository Participants/Company/Registrar
Independent Directors have been hosted on the & Share Transfer Agents (RTA). This helps prompt
Bank’s website and can be accessed through link at delivery of document, reduce paper consumption,
www.aubank.in/about-us/board-directors save trees and avoid loss of documents in transit.
8. SEBI (LODR) Regulations For share transfers, dividend payments and all
other investor-related activities are attended to and
During the period under review, the Bank has
processed at the office of our Registrars & Share
complied with all the mandatory requirements of
Transfer Agents, i.e. Link Intime India Private Limited,
Regulation 17 to 27 and has also complied with
contact details of the agents are as specified above.
requirement of Schedule V of the of Listing
The Bank has Board approved ‘Investor Grievance
Regulations except for Regulation 24, which is not
Redressal Policy’ which lays down the simplified
applicable to the Bank. Further, the Bank has also
procedure for shareholders to submit their queries,
adopted certain voluntary compliance requirement concerns and grievances and process for timely
as stipulated in Companies Act 2013, Listing resolution. In case of shareholders having any
Regulations and other act, rules, regulations and queries, they can write at
guidelines as applicable on the Bank. investorrelations@aubank.in and for more
information about the Bank, investors can visit the
The Bank has also complied with Regulation 46 of Bank’s website at www.aubank.in
Listing Regulations.
12. Utilisation of Funds
The fund raised during the year, through private
placement of securities has been utilised to meet the
Annual Report 2018-

capital & business requirement while supporting the 14. Dividend Payment
Corporate
growth plans and for other general corporate
The Board of Directors of the Bank at its meeting held
purposes.
on 22nd April 2019 recommended dividend of `0.75/-
per equity shares on face value of `10 per equity
13. Details in relation to the Sexual Harassment
shares subject to approval of members of the Bank in
of Women at Workplace (Prevention,
the 24th Annual General Meeting scheduled on 26th July,
Prohibition and Redressal) Act, 2013
2019. The payment period of dividend if approved by
S. No Particulars Number members will commence from 27th July 2019 and will
a. Number of complaints filed during 1 be completed by 25th August 2019.
the financial year
b. Number of complaints disposed of 1
during the financial year
Statutory
c. Number of complaints pending as on NIL
the end of the financial year
15. Market Price Data

NSE BSE
Month High (`) Low (`) Volume High (`) Low (`) Volume
Apr-18 748.40 615.00 58,60,079 746.95 615.00 5,23,227

May-18 733.00 651.25 26,98,559 731.95 653.80 2,40,452
Jun-18 734.35 650.00 38,81,055 733.60 651.00 5,50,865
Jul-18 693.10 612.05 2,05,03,499 695.15 612.55 60,20,667
Aug-18 745.00 638.00 1,51,06,737 745.00 638.75 2,95,74,809
Financial
Sep-18 735.85 545.05 82,89,566 734.65 546.30 8,45,603
Oct-18 639.95 500.50 1,10,62,391 643.65 502.00 12,90,544
Nov-18 612.40 520.00 87,20,659 610.00 502.00 2,78,630
Dec-18 652.90 566.00 94,90,404 650.90 566.00 3,39,736
Jan-19 668.95 572.10 82,54,601 667.15 574.70 4,07,854
Feb-19 609.85 558.00 27,23,867 608.95 560.00 1,39,221
Mar-19 628.25 541.25 96,29,813 627.00 542.75 5,85,315
134|
COMPARISON TO BROAD -BASED INDICES

AUBANK relative to S&P BSE SENSEX
BSE Index (Share price in `)
40,000
AUBank Sensex 800.00
750.00
38,000
700.00
36,000
650.00
34,000 600.00
550.00
32,000
500.00
30,000
450.00
28,000 400.00
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
AUBANK relative to NIFTY
NSE Index (Share price in `)
12,000
AUBank Nifty 800.00
11,500 750.00
11,000 700.00
10,500 650.00
10,000 600.00
9,500 550.00
9,000 500.00
8,500 450.00
8,000 400.00
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
Distribution of Shareholding as on 31st March 2019

Distribution of shareholding based on nominal value (`) as on 31st March 2019
Number of
S. No Category (No. of Shares) Share amount % of total share
shareholders % of total Total shares
` amount
(
1 1 to 5,000 83,931 96.21 63,70,304 6,37,03,040 2.18
2 5,001 to 10,000 1,662 1.90 11,80,126 1,18,01,260 0.40
3 10,001 to 20,000 651 0.75 9,28,156 92,81,560 0.32
4 20,001 to 30,000 222 0.25 5,48,361 54,83,610 0.19
5 30,001 to 40,000 107 0.12 3,73,628 37,36,280 0.13
6 40,001 to 50,000 73 0.08 3,32,556 33,25,560 0.11
7 50,001 to 1,00,000 183 0.21 13,30,873 1,33,08,730 0.46
8 1,00,001 & above 420 0.48 28,12,93,482 2,81,29,34,820 96.21
Total 87,249 100.00 29,23,57,486 2,92,35,74,860 100.00
Annual Report 2018-

Categories of Shareholders as on 31st March 2019
Corporate
Particulars No. of Shares %
I Promoters & Promoter Group

Sanjay Agarwal 5,67,66,359 19.42%
Shakuntala Agarwal 1,18,20,430 4.04%
Jyoti Agarwal 1,18,18,560 4.04%
Chiranji Lal Agarwal 68,29,321 2.34%
MYS Holdings Private Limited 68,83,722 2.35%
II Other Institution
Mutual Fund 3,19,39,498 10.92%
Financial Institutions/Bank 86,828 0.03%
Insurance Companies 83,50,272 2.86%
Statutory
Foreign Portfolio Investors 6,94,59,585 23.76%
III Other Non-Institution
Body Corporates 1,55,31,829 5.31%
IV Individuals
(i) Individuals holding nominal share capital upto 2 lakh 1,02,07,799 3.49%
(ii) Individuals holding nominal share capital in excess of 2 lakh 1,50,56,625 5.15%
V Trusts 16,272 0.01%
VI Non Resident Indians (Non Repat) 17,10,130 0.58%
Non Resident Indians (Repat) 5,15,444 0.18%
VII Hindu Undivided Family 4,61,334 0.16%
VIII Clearing Members 4,39,238 0.15%
Financial
IX Foreign Nationals 4,26,41,879 14.59%
X Alternative Investment Fund 17,65,547 0.60%
XI NBFCs registered with RBI 56,814 0.02%
Total 29,23,57,486 100%
List of Shareholders holding more than 1% share in the Bank as on 31st March 2019
S. No Name No. of Shares % of Shares
Promoters and Promoter Group

1 Sanjay Agarwal 5,67,66,359 19.42%
2 Shakuntala Agarwal 1,18,20,430 4.04%
3 Jyoti Agarwal 1,18,18,560 4.04%
4 Chiranji Lal Agarwal 68,29,321 2.34%
5 MYS Holdings Private Limited 68,83,722 2.35%
Others
6 Redwood Investment Ltd 2,09,70,794 7.17%
7 Nomura India Investment Fund Mother Fund 1,05,15,631 3.60%
8 Kotak Standard Multicap Fund 1,00,98,256 3.45%
9 SBI Equity Hybrid Fund 1,00,17,785 3.43%
10 Labh Investments Limited 80,87,530 2.77%
11 Ourea Holdings Limited 79,04,427 2.70%
12 Amansa Holdings Private Limited 66,04,110 2.26%
13 International Finance Corporation 56,79,128 1.94%
14 Steadview Capital Mauritius Limited 49,04,244 1.68%
15 HDFC Life Insurance Company Limited 47,08,600 1.61%
16 Motilal Oswal Multicap 35 Fund 46,25,885 1.58%
17 SBI Life Insurance Co. Ltd 44,50,365 1.52%
18 Camas Investments Pte. Ltd. 43,30,441 1.48%
19 Uttam Tibrewal 35,44,673 1.21%
20 Nomura Funds Ireland Public Limited Company- Nomura Funds Ireland - 33,26,369 1.14%
India Equity Fund
21 Motilal Oswal Securities Ltd. 32,93,315 1.13%
136|
18. Outstanding Global Depository Receipts or

Shareholding pattern (%) American Depository Receipts or warrants or
any convertible instruments, conversion date
2.86 1.73 and likely impact on equity
5.31
During FY 2018-19, the Bank does not have any
8.64 32.19 outstanding GDRs/ADRs warrants that were due for
conversion or any other Convertible instruments
having an impact on the equity of the Bank.
10.92 19. Commodity price risk or foreign exchange risk
and hedging activities
During FY 2018-19, the Bank does not undertake
14.59
trading in any commodity. However, the Bank may
23.76
be exposed to commodity price risks of customers
in its capacity as a lender. Bank is operating in India
and
Promoter & Promoter Group Individuals is not directly exposed to foreign exchange risk and
Foreign Portfolio Investors Bodies Corporates hedging activities.
Foreign Company Insurance Companies
Mutual Fund Others 20. Recommendations of the Committees
No instances have been observed where the Board
16. Share Transfer System has not accepted recommendations of any of the
Board committee(s).
The Bank’s shares are traded under compulsory
dematerialised mode and freely tradeable and the
21. Fees paid to Statutory Auditors
entire share transfer process is monitored by the
Registrar and Share Transfer Agent of the Bank. Total fees for services of Statutory Auditors is
A half-yearly certificate of compliance with the share Rupees One crore.
transfer formalities as required under Regulation
40(9) of the Listing Regulations is obtained from the 22. Certificate from Company Secretary in
Company Secretary in Practice and a copy of the Practice
certificate is filed with the Stock Exchanges within the
The Bank has received certificate from V.M.
prescribed time.
& Associates, Practicing Company Secretary, Jaipur that
none of the Directors on the Board of the Bank
17. Dematerialisation of Shares
have been debarred or disqualified from being
All shares of the Bank are held in dematerialised form. appointed or continuing as Directors of companies by
the Board/ Ministry of Corporate Affairs or any such
authority.
23. Status of Compliance of Discretionary Requirements

S. No Discretionary Requirements Status
1 A half yearly declaration of financial performance including

summary of the significant events in the last six months Quarterly as well as half yearly financial results are published
in the newspapers, displayed on website of the Bank as well
may be sent to each household of shareholders
as disseminated to the Stock Exchanges immediately after
Board
2 The Company may appoint separate persons to the post of approval for information of Shareholders and other Stakeholders.
Chairperson and MD & CEO
The Bank has separate positions of a Non-executive (Part-
3 The Internal Auditor may report directly to the
time) Chairman and MD & CEO.
Audit Committee
The Internal Auditor (Chief Audit Officer) report directly to the
Audit Committee.
Annual Report 2018-

CERTIFICATE ON COMPLIANCE WITH THE CODE OF CONDUCT & ETHICS
Corporate
I confirm that Bank has obtained from all the members of the Board and Senior Management Personnel, affirmation that
they have complied with the ‘code of Conduct’ for financial year 2018-19.
Date: 22nd April 2019 Sanjay Agarwal

Place: Jaipur Managing Director & CEO
Statutory
CEO & CFO CERTIFICATION
We, Sanjay Agarwal, Managing Director & CEO and Deepak Jain, Chief Financial Officer, of AU Small Finance Bank Limited
hereby certify that:
a. We have reviewed financial statements and the cash flow statement for the year ended 31 st March 2019 and that to
the best of our knowledge and belief:
Financial
i. These statements do not contain any materially untrue statement or omit any material fact or contain any
statements that might be misleading.
ii. These statements together present a true and fair view of the Bank’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
b. There are to the best of our knowledge and belief, no transactions entered into by the Bank during the year which
are fraudulent, illegal or violative of the Bank’s Code of Conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have
evaluated the effectiveness of internal control systems of the Bank pertaining to financial reporting and have
disclosed to the Auditors and Audit Committee, deficiencies in the design or operation of such internal controls, if
any, of which we are aware and the steps we have taken or proposed to take to rectify these deficiencies.
d. We have indicated, to the Auditors and the Audit Committee:
i. Significant changes in internal control over financial reporting during the year;
ii. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to
the financial statements; and
ii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the
management or an employee having significant role in the Bank’s internal control system over financial reporting.
Yours faithfully
Date: 22nd April 2019 Sanjay Agarwal Deepak Jain

Place: Jaipur Managing Director & CEO Chief Financial Officer
138|
CERTIFICATE UNDER REGULATION 34(3) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE

REQUIREMENTS) REGULATIONS, 2015
To,
The Members,
1. In our opinion and to the best of our information and according to the representation made by the directors of
AU Small Finance Bank Limited (“the Bank”), we certify that none of the directors on the Board of the Bank
have been debarred or disqualified from being appointed or continuing as directors of companies by the
Securities and Exchange Board of India or Ministry of Corporate Affairs or Reserve Bank of India or any such
statutory authority.
2. The certificate is addressed and provided to the members of the Bank solely for the purpose to enable the Bank to
comply with the requirement of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and
it should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any
liability or any duty of care for any other purpose or to any other person to whom this certificate is shown or into
whose hands it may come without our prior consent in writing.
For V. M. & Associates

Company Secretaries
sd/-
CS Manoj Maheshwari
Partner
FCS3355
Date: April 22, 2019 C P No.: 1971
Place: Jaipur
Annual Report 2018-

Annexure II
Corporate
Annual Report on Corporate Social Responsibility (CSR)
[Pursuant to clause (o) of sub-section (3) of section 135 of the Act and Rule 9 of the Companies (Corporate Social
Responsibility) Rules, 2014]
Our CSR Policy
1. A BRIEF OUTLINE OF THE CSR POLICY, INCLUDING OVERVIEW OF PROJECTS OR PROGRAMMES

PROPOSED TO BE UNDERTAKEN AND A REFERENCE TO THE WEB LINK TO THE CSR POLICY AND
PROJECTS OR PROGRAMMES
Statutory
The Corporate Social Responsibility Policy (CSR Policy) of the Bank establishes a framework for compliance with CSR
provisions covering social projects and ensuring the implementation of CSR initiatives in letter and spirit as
specified in Schedule VII of the Companies’ Act, 2013 (excluding the activities pursued in the normal course of business)
and the expenditure thereon.
The Bank continues to focus on undertaking social welfare and sustainable development programmes that has
widespread positive impact on the larger section of society for achieving gradual upliftment of deprived underprivileged
communities in rural, semi-urban and local areas where operations of the Bank are carried out.
During the year, the Bank started realising the long-term strategy on CSR initiatives and set up the trust ‘AU Foundation’,
for driving CSR projects of livelihood enhancement through vocational training, digital and financial literacy, promoting
sporting talent for nationally recognised sports and others. AU Foundation, as a part of its initiatives, dedicated its
Financial
activities towards AU Skills Academy, AU Sports Village and Financial Literacy Camps, among others. AU Foundation
also supported several NGOs for job-oriented camps for women enhancing their livelihood, self-dependence and
empowerment. The Bank continued to thrust on social development initiatives through implementing partners for
carrying out CSR activities during the year. The Bank has also carried out direct initiatives as a part of CSR activities like
installation of water coolers, health and eye check-up camps and promotion of education through various NGOs for
upliftment of children living in slums.
Approach towards CSR

The Bank focusses on Corporate Social Responsibility initiatives to make a meaningful impact on the lives of the
underserved by providing them equal opportunity and support, it promotes woman empowerment, healthcare and
sustainable livelihood. As a financial institution, the Bank believes that it can play an active role in stimulating India’s
socio-economic development.
The Bank’s approach led to the emergence of key priority areas for CSR as mentioned below:
1. Livelihood Enhancement
2. Sports for Development
3. Financial & Digital Literacy
4. Other areas permissible under the applicable CSR provisions
Corporate Social Responsibility policy of the Bank is available at www.aubank.in/au-notice-board
2. COMPOSITION OF CSR COMMITTEE AS ON 31ST MARCH 2019

Ms. Jyoti Narang (Independent Director) Chairman
Mr. Mannil Venugopalan (Independent Director) Member
Mr. Krishan Kant Rathi (Independent Director) Member
Mr. Raj Vikash Verma (Independent Director) Member
Mr. Sanjay Agarwal (Managing Director & CEO) Member
140|
3. AVERAGE NET PROFITS OF THE BANK FOR THE LAST THREE FINANCIAL YEARS: `407.74 Crore
Annual Report 2018-

4. PRESCRIBED CSR EXPENDITURE (2% OF THE AMOUNT AS IN ITEM 3 ABOVE): `8.15 Crore
5. DETAILS OF CSR SPENT DURING THE FINANCIAL YEAR
• Total amount to be spent for the financial year 2018-19 as per the Companies Act, 2013 was `11.10 crore (`8.15 crore + `2.95 crore,
being amount unspent of FY 2017-18)
• Amount spent during the financial year: `4.59 crore
• Amount unspent for the financial year: `6.51 crore
Manner in which the amount is spent during the financial year is detailed below:
Project or Programmes Amount Spent on the Cumulative
Amount outlay
(1) Local Area or other projects or programs expenditure Amount spent directly or
Sr. (2) Specify the state and (budget project subheads: (1(Direct
CSR project or activity identified Sector in which the Project is covered or programme- expenditure on projects up to reporting through Implementing
No district where projects
wise) (` In lakh) period (` In agency
or programme was or programs (2)
undertaken Overheads (` In lakh) lakh)
1 Projects of AU Foundation • Clause (ii): Livelihood Enhancement Jaipur, 265.00 76.50 76.50 Amount spent through
1. AU Skills Academy • Clause (ii): Promoting Education – Rajasthan & Delhi AU Foundation for
2. AU Udhyogini Financial literacy CSR activities as per
3. AU Financial literacy awareness • Clause (vii): Training to promote rural the Schedule VII
4. AU Bank Sports Village sports, nationally recognised sports,
Paralympics sports and Olympics sports
2 Promoting of Education Clause (ii): Promoting education, including Rajasthan & 200.00 159.53 746.93 • Directly
1. Vocational Training special education and employment Maharashtra • Through implementing
2. Financial & Digital Literacy enhancing vocation skills, especially among agencies - Lok Kala Jagrati &
3. Primary Education etc. children, women, elderly, and the differently Vikas Sansthan/Gramodaya
4. Mid-Day Meal programme abled and livelihood enhancement projects; Samajik Sansthan/
Gram Chetna Kendra/
Development initiatives
3 Promoting preventive Clause (i): Eradicating hunger, poverty Rajasthan, Haryana & 150.00 83.57 299.13 • Through implementing
healthcare and malnutrition, promoting healthcare, Maharashtra agencies (Shekhawati
1. Eye and Health Check-up including preventive healthcare and Agarwal Samaj
camps sanitation, including contribution to the Sansthan/Shri Shyam
2. Installation of Water Swachh Bharat Kosh setup by the Central Seva Mahotsav/
purifier and cooler Government for the promotion of sanitation SIDART/Akshaya
and making available safe drinking water Patra Foundation
4 Promotion of sports Clause (vii): Training to promote rural Rajasthan 300.00 72.18 216.80 • Directly
1. Sports for development sports, nationally recognised sports, & Punjab • Through implementing
activities Paralympic sports and Olympic sports agencies
2. Ab Jeetega India Initiative (Round Table India)
3. Round Table India
5 Measures for promoting Clause (iv): Ensuring environmental Rajasthan 40.00 13.72 55.71 Directly
animal welfare and ensuring sustainability, ecological balance, protection & Maharashtra
environment sustainability of flora and fauna, animal welfare
6 Promoting art and culture Clause (v): Art and Culture Bikaner, Jaipur & 50.00 12.40 121.74 • Through implementing
Rajasthan agencies (Lokayan/Hare
Krishna Mission)
7 Donation to recognised fund Clause (viii): Contribution to CM Relief Fund Kerala 49.5 18.24 18.24 Directly
and CM Distress Relief fund & Madhya Pradesh
8 Administrative expenditure Administrative expenditure inclusive of staff 55.50 22.66 34.16 -
salary for execution of CSR activities
1,110.00 458.80
DIRECT INITIATIVES communities, governments and other like-minded
Corporate
corporates and NGOs—for solving the pressing problems
Water coolers
and to foster prosperity in the society.
Access to clean and safe potable water is a matter of
national priority for public health but given the arid climate Their work has spread beyond core villages and by
in vast stretches of Rajasthan clean and safe potable working hand-in-hand with like-minded organisations, it
water is scarce in the state. The Bank is committed to aims to provide a positive impact on unrelenting issues that
provide support to make available safe drinking water to are currently inhibiting India.
areas where it operates. The Bank installed more than
110 safe drinking water dispensers/water coolers in and For the past 25 years, ACF has created significant impact
around Jaipur. by establishing the full-fledged research and monitoring
unit, along with numerous external, independent studies
Statutory
Health camps and eye check up camps that show significant changes in income levels, health
indicators, overall harmony and happiness. The skills
The Bank promotes the cause of good hygiene and
training programmes help the unemployed youth to garner
sanitation practices in the community for underprivileged
employable skills.
and poor people. It has been associated with Shekhawati
Agrawal Samaj in providing affordable and free healthcare
Round Table India
services to the poor. The Bank collaborated with them for
providing financial assistance to organise monthly health The Round Table is internationally a friendship
check up and eye check up camps, along with free OPD organisation, founded in Norwich, England by Louis
services in Jaipur. Marchesi, then a Rotarian in 1927. From a small group of
eight members, today it has grown to 43,000 members
CM Relief Fund (Kerala Flood of 2018) across 52 countries representing every corner of the world.
Round Table came to India in 1957 with the formation of
Financial
During the year under review, the state of Kerala faced
Madras Round Table No. 1 on 14th November 1962 by
extreme distress due to a catastrophic flood and rains.
John Barton with 100 members. Over the past four
For the relief and rehabilitation of the distressed, the Bank
decades, it has grown to become a 2,850-member strong
contributed CSR fund while the staff also contributed for
association. Round Table India has around 200 Tables
the noble cause.
located in 76 cities and towns, comprising businessmen,
entrepreneurs, technocrats and professionals. It consists
DETAILS OF IMPLEMENTING AGENCIES people who can rise above personal concerns to seek
and serve the larger needs of the community.
Akshaya Patra Foundation
The Akshaya Patra Foundation is a not-for-profit Gram Chetna Kendra
organisation headquartered in Bengaluru, India.
Gram Chetna Kendra was formed in 1986 by a group of
The organisation strives to eliminate classroom hunger
socially conscious individuals under the leadership of
by implementing the Mid Day Meal scheme in the
Mr. Om Prakash Sharma. Recognising the immense needs
government schools and government-aided schools.
of Rajasthan’s rural poor, this group decided to combine
Alongside, Akshaya Patra also aims at countering their unique knowledge, talents, skills and experience
malnutrition and supporting the right to education of socio-
economically disadvantaged children. to address the pressing issues facing individuals.
Therefore, in 1989, the organisation was registered as
AU Small Finance Bank is supporting this noble cause a voluntary, non-governmental organisation under the
and helping Akshaya Patra Foundation in Mid-Day meal Societies Registration Act and began formal operations
programme for over 10 years and helping them to serve from their campus which is located in the heart of the
Mid Day Meal programme in several districts of Rajasthan. project area in the village of Khedi Milak.
Ambuja Cement Foundation Lok Kala Jagrati Vikas Sansthan
Established in 1993, Ambuja Cement Foundation (ACF) is Lok Kala Jagrati Vikas Sansthan is a non-profit organisation
a grassroots-level pan-India implementing organisation of Rajasthani lok artists, who are engaged in spreading
that harnesses the power of partnerships—between
142|
financial and digital literacy through plays, puppet shows,

folk songs, folk dances and others. Focus on new projects
Mohan Foundation The Bank set its priority area for CSR projects
covering financial and digital literacy, promotion of
It is a not-for-profit, non-governmental organisation sports and livelihood enhancement for rural
started to promote organ donation in 1997 in Chennai by development, enhancing financial and digital literacy
philanthropists and medical professionals. It has offices for enabling financial inclusion and skill development.
in Chennai, Hyderabad, Delhi-NCR, Chandigarh, Nagpur, The building of long-term capabilities requires detailed
Jaipur, Mumbai and USA. Mohan Foundation was started planning and execution due to which some projects
by a group of like-minded and concerned medical and non- could not be taken up fully, resulting in shortfall of
medical professionals committed to increasing the CSR expenditure.
reach of the Transplantation of Human Organs Act. The
Government of India passed this Act in 1994 to broaden Setting up of AU Foundation
the concept of organ donation and stop commercial
dealings in organs, especially kidneys. It is now possible to To have long-term and widespread impact, the
not only to donate one’s eyes, but also other vital organs Bank has set up ‘AU Foundation’ as a trust to
like the heart, lungs, liver, pancreas and kidneys. channelise its social investments and undertake
CSR activities for addressing the needs of
underprivileged section of society. In coming years,
6. REASON FOR NOT SPENDING 2% OF THE the Bank shall fully realise the potential of in-house
AVERAGE NET PROFIT OF THE LAST CSR team through relevant projects and shall
THREE FINANCIAL YEARS OR ANY PART partner with new credible implementing agencies
THEREOF to incur the CSR expenditure fully.
The Bank has been playing an active role in
community development through establishing AU 7. A RESPONSIBILITY STATEMENT OF THE CSR
Foundation and building strategic partnerships with COMMITTEE THAT THE IMPLEMENTATION
reputed implementation partners for achieving its AND MONITORING OF CSR POLICY IS IN
Corporate Social Responsibility objectives. COMPLIANCE WITH THE CSR OBJECTIVES AND
POLICY OF THE COMPANY
The Bank spent `4.59 crore on CSR Expenditure in
FY 2018-19 and continues to scale many of its CSR Committee hereby confirms that the
existing programmes. During the year under review, implementation and monitoring of CSR Policy is
several new projects were launched for building its in compliance with the CSR objectives and CSR
CSR profile through AU Skill Academy and AU policy of the Bank.
Udhyogini
—a self-employment training centre which benefits For and on behalf of the Board of Directors
youth from low-income segment and provides self- AU SMALL FINANCE BANK LIMITED
employment opportunity for rural women. The
Bank has also identified new opportunities relating to Sanjay Agarwal Jyoti Narang
poverty alleviation, rural development, promotion of Managing Director & CEO Chairman - CSR Committee
financial and digital literacy for enabling financial DIN: 00009526 DIN:00351187
inclusion and skill development.
Date: 22nd April 2019
The Bank was not able to spend the entire prescribed Place: Jaipur
CSR amount of 2% of its average net profits of the
last three financials years due to following reasons
and the measures have been taken in this regard:
Annual Report 2018-

Annexure III
Corporate
The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-
section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014:
Sr. No. Requirements Disclosure

1. Ratio of the remuneration of each Mr. Sanjay Agarwal, MD & CEO 84X
director to the median Mr. Uttam Tibrewal, WTD 72X
remuneration of the employees of Mr. Mannil Venugopalan, Independent Director (Part Time) Chairman 12X
the Bank for the financial year. (The median remuneration does not include amount of perquisites on ESOP
Statutory
Options exercised by the Mr. Uttam Tibrewal during FY 2018-19).
2. The percentage increase in remuneration Name & Designation of Director’s & KMP Increase%/(Decrease)%
of each director, Chief Financial Officer, Mr. Sanjay Agarwal, MD & CEO 14.82%
Chief Executive Officer, Company Secretary, Mr. Uttam Tibrewal, WTD* 14.79%
if any, in the financial year Mr. Mannil Venugopalan, Chairman** 5.70%
Mr. Krishan Kant Rathi, Director** -1.03%
Ms. Jyoti Narang, Director** 12.82%
Mr. Raj Vikash Verma, Director*** 953.25%
Mr. Narendra Ostawal, Director 0.00
Mr. Deepak Jain, CFO**** -18.44%
Mr. Manmohan Parnami, CS**** 6.84%
Financial
*The remuneration for FY 2017-18 and FY 2018-19 does not include amount of perquisites on
ESOP Options exercised during FY 2017-18 and FY 2018-19 respectively to present the figure on
comparable basis.
** Mr. Mannil Venugopalan, Mr. Krishan Kant Rathi, Ms. Jyoti Narang, were paid profit
linked commission & sitting fees during FY 2018-19 for Board and Committee meetings as
considered herein above.
***Mr. Raj Vikash Verma joined Board of the Bank on 30th January 2018 and was paid sitting
fees & profit linked commission during FY 2018-19 whereas for FY 2017-18 period from
30th January 2018 to 31st March 2018 was considered, hence above calculation is reflecting
higher percentage increase.
****The remuneration for FY 2018-19 includes bonus figures for FY 2017-18 but excluding
perquisites on ESOPs exercised by Mr. Deepak Jain - CFO and Mr. Manmohan Parnami - CS for
calculation of percentage increase/decrease.
3. The percentage decrease/increase in the There has been decrease of 11.52% in median remuneration of employees, the
median remuneration of employees in the employees have been taken as on year end and there has been increase in number
financial year. of employees by 1472 during FY 2018-19 over FY 2017-18. Median has been
calculated taking remuneration of employees on comparable basis and the same
has been calculated on annualised basis considering that employees as at year end
worked for whole year.
4. The number of permanent employees on There were 12,623 employees as on 31st March 2019.
the rolls of Bank as on 31st March, 2019.
5. Average percentile increase already There was an average percentile decrease of 2.70% (excluding perquisites on
made in the salaries of employees other ESOP Options Exercised) in FY 2018-19 over FY 2017-18 for employees other than
than the managerial personnel in the last in managerial capacity. For managerial personnel, there were increase of 1.41%
financial year and its comparison with (excluding perquisites on ESOP Options Exercised) in remuneration of managerial
the percentile increase in the managerial personnel on overall basis in FY 2018-19 over FY 2017-18. The decrease in average
remuneration and justification thereof percentile remuneration of employees other than managerial personnel is on
and point out if there are any exceptional account of increase in manpower at junior level and whereas there is marginal
circumstances for increase in the increase in remuneration of managerial personnel.
managerial remuneration.
6. Affirmation that the remuneration is as per Yes, it is confirmed.
the remuneration policy of the Company
144|
General Note:
• KMP’s remuneration have been taken as recorded in Audited Financial Statements of the Bank and same has been
annualised and taken on comparable basis.
• Remuneration includes Fixed pay plus Variable pay paid during the year plus perquisite value as calculated under the
Income Tax Act, 1961 but does not include value of perquisites on ESOP options exercised.
• The Non-executive - Independent Directors received remuneration in the form of sitting fees for attending the each
Board/Committee meetings and in the form of profit linked commission.

Sanjay Agarwal Uttam Tibrewal

DIN: 00009526 DIN: 01024940

Place: Jaipur
Annual Report 2018-

Annexure
DISCLOSURES OF EMPLOYEES PURSUANT TO SUB RULE 2 & 3 OF RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION OF
MANAGERIAL PERSONNEL) RULES, 2014
S. Name of employee Designation Remuneration Nature of Qualifications and Date of commencement Age of The last employment held by The percentage Whether
No. (` In crore) employment experience of the employee; of employment such such employee before joining of equity any such
(contractual/ employee the company shares held by employee is
otherwise) the employee a relative of
in the company any director
within the or manager
meaning of of the
clause (iii) of company and
sub-rule (2) if so, name of
above; and such director
or manager
1 *SANJAY AGARWAL MANAGING DIRECTOR 1.69 Contractual FCA, B. Com, 23 Years Appointed as Managing 48 NA 19.42% No
& CEO Director since 14th February
2008 and last re-appointment
was approved by the
shareholders for a period of 5
years on 31st March 2017 and
subsequently appointment
was approved as MD & CEO
for a period of 3 years by the
RBI w.e.f. 19th April, 2017.
2 *UTTAM TIBREWAL WHOLE TIME DIRECTOR **1.47 Contractual B. Com, 22 Years Appointed as Whole Time 48 NA 1.21% No
Director since 14th February
2008 and last re-appointment
was approved by the
shareholders for a period of 5
years on 31st March 2017 and
subsequently appointment
was approved as Whole
Time Director for a period
of 3 years by the RBI
w.e.f. 19th April, 2017.
3 *DEEPAK JAIN CHIEF FINANCIAL OFFICER ***1.61 Permanent FCA, 21 Years 17th May, 2010 45 M/s Deepak Tarachand 0.36% No
Employee & Associates
(Chartered Accountants)
4 MANOJ TIBREWAL GROUP HEAD- HR, 5.42 Permanent Company Secretary 1st February, 2009 49 Auto Lite (India) Limited 0.48% No
MARKETING & DISTRIBUTION Employee from Institute of
Company Secretaries of
India, 26 years
5 RISHI DHARIWAL CHIEF OF SECURED 3.47 Permanent Postgraduate Programme 15th November, 2013 49 Citibank 0.01% No
BUSINESS LOANS Employee in Management for
Executive from IIM,
Ahmedabad, 26 years
6 BHASKAR VITTAL CHIEF OF WHEELS 1.12 Permanent Bachelor of Engineering 17th January 2017 51 Mahindra and Mahindra 0% No
KARKERA Employee (automobile engineering) Financial Services Limited (Negligible)
from University of
Bombay, 28 Years
7 YOGESH JAIN GROUP HEAD 2.03 Permanent Chartered Accountant 01st April, 2010 39 Panchratna Motels 0.02% No
146|
STRATEGY - TREASURY, Employee from the Institute of and Resorts Private

FIG, DCM, Chartered Accountants of Limited (KGK Group)
WHOLESALE LIABILITY AND India, 12 years
INVESTOR RELATION
Annual Report 2018-

otherwise)
(contractual/ employee the company shares
the held by a relative
employee employee of is
meaning of of the
or manager
8 VIJENDRA CHIEF OF 1.56 Permanent Chartered Accountant 02nd May 2012 37 Religare Enterprise 0.02 % No
SINGH SHEKHAWAT OPERATIONS - ASSETS Employee from the Institute of Limited (formerly
Chartered Accountants of known as Fortis
India, 15 years Securities Limited)
9 SUMIT MADAN CHIEF OF BRANCH BANKING 1.56 Permanent Completed Post Graduate 12th September, 2016 42 Citibank 0.01% No
Employee Diploma in Management
from Lal Bahadur Shastri
Institute of Management,
Delhi, 19 years
10 DAYAKARAN CHIEF OF DIGITAL BANKING 0.58 Permanent Chartered Accountant 06th September, 2018 41 Axis Bank Ltd. 0% No
SRIDHAR AND DIGITAL STRATEGY Employee from the Institute of
of India, Masters in
Management Studies
from University of
Mumbai, 21 Years
11 PRIYAM ALOK CHIEF OF BUSINESS BANKING 1.94 Permanent Master of Business 22nd March, 2016 38 Reliance Broadcast 0.03 % No
Employee from
Administration
Bharathidasan Network Limited
University, 16 Years
12 AMIT MALHOTRA REGIONAL BUSINESS 1.69 Permanent Diploma in Mechanical 05th June, 2007 42 Bikaner Motors 0.02% No
MANAGER - WHEELS Employee Engineering Private Limited
from Rajasthan
University, 23 years
13 PANKAJ SHARMA NATIONAL 1.6 Permanent Master of Business 03rd March, 2012 44 Moneyline 0.01% No
BUSINESS MANAGER – Employee Administration from Credit Limited (IIFL)
SECURED BUSINESS Mohanlal Sukhadia
LOAN (MSME) University, Jaipur, 19 years
14 VIVEK TRIPATHI CHIEF OF STRATEGY BUSINESS 1.51 Permanent Post-graduate diploma 09th April, 2014 41 ICICI Bank Limited 0.02% No
SOLUTIONS AND Employee in management for
TRANSACTION BANKING executives from Indian
Institute of Management
Society, Lucknow and
Masters of Textiles
from University of
Mumbai, 17 Years
15 SHEKHAR SHUKLA CHIEF OF OPERATIONS 1.49 Permanent Chartered Accountant 20th August 2016 50 ICICI Bank Limited 0% No
BRANCH BANKING Employee from the Institute of (Negligible)
Chartered Accountants of
India, 25 years
16 NAVEEN VASHISHT NATIONAL BUSINESS 1.26 Permanent Completed the Senior 06th November 2014 51 Equitas Micro 0% No
MANAGER - WHEELS USED Employee Management Programme Finance Limited (Negligible)
from Indian Institute
of Management,
Kolkata, 27 years
17 VIMAL JAIN CHIEF OF FINANCE 1.26 Permanent Chartered Accountant 16th January 2010 38 GERA Developments 0.01% No
AND ACCOUNTS Employee from the Institute of Private Limited
Chartered Accountants of
India, 14 years
(contractual/ employee the company shares held by employee is
otherwise) the employee a relative of
meaning of of the
or manager
18 AALEKH NATIONAL CREDIT MANAGER 1.13 Permanent Chartered Accountant 14th July 2014 39 India Infoline 0.01% No
VIJAYVARGIYA - SECURED BUSINESS LOAN Employee from the Institute of Housing Limited
(MSME) Chartered Accountants of
India, 17 Years
19 SHANTANU PRASAD CHIEF TREASURY OFFICER 0.78 Permanent B.com & JAIIB, 26 years 13th August, 2018 48 IDBI Bank Ltd. 0.00% No
Employee
20 HEMANT SETHIA SENIOR VICE PRESIDENT 1.24 Permanent CA, CS, Master of 02nd April 2012 37 Credit Analysis and 0.00% No
INVESTOR RELATIONS Employee Business Administration Research Limited
from Bharathidasan
University, 13 Years
21 RAJ KUMAR NATIONAL COLLECTION 1.20 Permanent Master of Arts 18th October, 2001 37 NA 0.01% No
SHARMA MANAGER - WHEELS Employee
22 ANKUR TRIPATHI SENIOR VICE PRESIDENT- 1.10 Permanent Bachelor of Technology 31st March, 2014 35 WKI Solutions 0.01% No
INFORMATION TECHNOLOGY Employee (chemical engineering) Private Limited
from Indian Institute
of Technology,
Bombay, 12 years
23 AMIT GARG REGIONAL BUSINESS 1.07 Permanent Diploma in Mechanical 12th November, 2007 41 Mahindra & 0.01% No
MANAGER - WHEELS Employee Engineering, 20 Years Mahindra Financial
Services Limited
Note: *For KMPs the remuneration as recorded in Audited Financial Statement for FY 2018-19 has been mentioned hereinabove.
** The remuneration of Mr. Uttam Tibrewal- Whole Time Director of the Bank does not include perquisites on ESOPs amounting to `66.99 crore which were exercised during the
period under review.
*** The remuneration of Mr. Deepak Jain- Chief Financial Officer of the Bank does not include perquisites on ESOPs amounting to `9.35 crore which were exercised during the period
under review. For employees other than KMPs mentioned above, the remuneration includes the value of perquisites on ESOPs.


DIN: 00009526 DIN: 01024940
Date: 22nd April, 2019

Place: Jaipur
148|
Annexure V
FORM NO. MR-3
Secretarial Audit Report
For the Financial Year Ended March 31, 2019
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014]
To,
(a) The Securities and Exchange Board of India
The Members,
(Substantial Acquisition of Shares and Takeovers)
Au Small Finance Bank Limited
Regulations, 2011;
19-A, Dhuleshwar Garden,
Jaipur – 302 001 (Rajasthan) (b) The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015;
We have conducted the secretarial audit of the compliance
of applicable statutory provisions and the adherence to (c) The Securities and Exchange Board of India (Issue
good corporate practices by Au Small Finance Bank of Capital and Disclosure Requirements)
Limited (hereinafter called “the Bank”). Secretarial Audit Regulations, 2009 (repealed w.e.f. 9th December,
was conducted in a manner that provided us a reasonable 2018);
basis for evaluating the corporate conducts/statutory (d) The Securities and Exchange Board of India (Issue Of
compliances and expressing our opinion thereon. Capital and Disclosure Requirements) Regulations,
2018 notified on 9th December, 2018;
Based on our verification of the Bank’s books, papers,
(e) The Securities and Exchange Board of India (Share
minute books, forms and returns filed and other records
maintained by the Bank and also the information Based Employee Benefits) Regulations, 2014;
provided by the Bank, its officers, agents and authorised (f) The Securities and Exchange Board of India (Issue
representatives during the conduct of secretarial audit, and Listing of Debt Securities) Regulations, 2008;
we hereby report that in our opinion, the Bank has, during
the audit period covering the Financial Year ended on (g) The Securities and Exchange Board of India
31st March 2019 (‘Audit Period’) complied with the statutory (Registrars to an Issue and Share Transfer Agents)
provisions listed hereunder and also that the Bank has Regulations, 1993 regarding the Companies Act
proper Board-processes and compliance-mechanism and dealing with client;
in place to the extent, in the manner and subject to the (h) The Securities and Exchange Board of India (Delisting
reporting made hereinafter: of Equity Shares) Regulations, 2009; (Not applicable
to the Bank during the Audit Period);
We have examined the books, papers, minute books,
forms and returns filed and other records maintained by (i) The Securities and Exchange Board of India (Buyback
the Bank for the Financial Year ended on March 31, 2019 of Securities) Regulations, 1998 (repealed w.e.f.
according to the provisions of: 11th September, 2018); (Not applicable to the Bank
during the Audit Period);
(i) The Companies Act, 2013 (the Act) and the rules (j) The Securities and Exchange Board of India
made thereunder; (Buyback of Securities) Regulations, 2018 notified
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) on 11th September, 2018; (Not applicable to the
and the rules made thereunder; Bank during the Audit Period);
(iii) The Depositories Act, 1996 and the Regulations and (k) The Securities and Exchange Board of India
Bye-laws framed thereunder; (Listing Obligations and Disclosure Requirements)
Regulations, 2015
(iv) Foreign Exchange Management Act, 1999 and the
rules and regulations made thereunder to the extent of (vi) As confirmed, following other laws are specifically
Foreign Direct Investment, Overseas Direct Investment applicable to the Bank for which the Management
and External Commercial Borrowings; has confirmed that the Bank has devised proper
systems to ensure compliance with the provisions of
(v) The following Regulations and Guidelines prescribed all applicable laws and that such systems are
under the Securities and Exchange Board of India Act, adequate and operating effectively:
1992 (‘SEBI Act’):
Annual Report 2018-

(a) The Reserve Bank of India Act, 1934;
150|
(b) The Banking Regulation Act, 1949 and (including premium of `682.77/-) per Equity Share
Notifications and Circulars issued by the Reserve aggregating to an amount of `299,99,99,612/-
Corporate
Bank India (RBI) from time to time; and (Rupees Two Hundred Ninety Nine Crore Ninety Nine
Lakh Ninety Nine Thousand Six Hundred and Twelve
(c) Guidelines issued by RBI on Small Finance Bank Only) to Camas Investments Pte. Ltd. on a preferential
dated 27th November, 2014 and Operational basis;
Guidelines issued dated 6th October, 2016;
b. Issued and allotted 1,01,04,364 (One Crore One
We have also examined compliance with the applicable Lakh Four Thousand Three Hundred and Sixty
clauses of the following: Four) Convertible Warrants of face value of `10/-
(Rupees Ten Only) each for cash, at an issue price
i. Secretarial Standards issued by The Institute of of `692.77/- (including premium of `682.77/-)
Company Secretaries of India; per Warrant aggregating to an issue amount of
Statutory
`700,00,00,249/- (Rupees Seven Hundred Crore and
ii. The Listing Agreements entered into by the Bank with Two Hundred Forty Nine Only) to Camas Investments
BSE Ltd. and National Stock Exchange of India Limited. Pte. Ltd. on a preferential basis convertible into
equity shares within a period of 18 months. Bank has
During the period under review the Bank has complied with received `175,00,00,063/- (Rupees One Hundred and
the provisions of the Act, Rules, Regulations, Guidelines, Seventy-Five Crore and Sixty-Three Only) on
Standards, etc. mentioned above except expense on CSR allotment of Convertible Warrants;
activities below the prescribed limit.
c. Approved the AU Small Finance Bank Limited -
We further report that Employee Stock Option Scheme 2018 with options
exercisable into not more than 49,33,200 (Forty Nine
The Board of Directors of the Bank is duly constituted
Lakh Thirty Three Thousand Two Hundred) equity
with proper balance of Executive Directors, Non-executive
Financial
shares of the Bank;
Directors and Independent Directors. The changes in the
composition of the Board of Directors that took place
d. Allotted 23,23,425 (Twenty Three Lakh Twenty
during the period under review were carried out in
Three Thousand Four Hundred and Twenty Five)
compliance with the provisions of the Act.
equity shares upon exercise of options by its eligible
employees under its various Employee Stock Option
Adequate notice is given to all Directors to schedule the
Schemes/plans;
Board Meetings, agenda and detailed notes on agenda
were sent at least seven days in advance. Further,
e. Duly passed the resolutions under section 180(1)(c) of
independent director(s) were present at Board Meetings
the Act, read with its applicable rules, as amended for
which were called at shorter notice to transact business
borrowing limits to the extent of `22,000 crore
which were considered urgent by the management in
compliance of Section 173(3) of the Act. A system exists (Rupees Twenty-Two Thousand Crore Only);
for seeking and obtaining further information and
f. Allotted 5,000 (Five Thousand Only) Fully Paid-Up,
clarifications on Unsecured, Subordinated, Rated, Listed, Redeemable,
the agenda items before the meeting and for meaningful Non-Convertible Bonds categorised as Tier II Capital
participation at the meeting. each, fully paid-up for cash, at an issue price of `692.77/-
Majority decision is carried through while the dissenting

members’ views, if any, are captured and recorded as part
of the minutes.
We further report that there are adequate systems and

processes in the Bank commensurate with the size and
operations of the Bank to monitor and ensure compliance
with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Bank

has:
a. Issued and allotted 43,30,441 (Forty-Three Lakh

Thirty Thousand Four Hundred and Forty One) Equity
Shares of face value of `10/- (Rupees Ten Only)
Annual Report 2018-

under the Basel II framework having a face value of
`10,00,000/- (Rupees Ten Lakh only) aggregating up to
`5,00,00,00,000/- (Rupees Five Hundred
Crore Only) on a private placement basis.
Place: Jaipur For V. M. &

Associates Date: April 22, 2019
Company
Secretaries (ICSI Unique Code P1984RJ039200)
CS Manoj
Maheshwari
P
a
r
t
n
e
r
F
C
S
3
3
5
5
C P No. : 1971
Note: This report is to be read with our letter of even

date which is annexed as Annexure A and forms an
integral part of this report.
150|
Annexure A
To,
The Members,
Au Small Finance Bank Limited
19-A, Dhuleshwar Garden
Jaipur – 302 001 (Rajasthan)
Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Bank. Our responsibility is to
express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that
correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a
reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Bank.
4. Where ever required, we have obtained the Management representation about the compliance of laws, rules
and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Bank nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Bank.
Place: Jaipur For V. M. & Associates

Date: April 22, 2019 Company Secretaries
CS Manoj Maheshwari
Partner
FCS 3355
C P No. : 1971
Annual Report 2018-

Annexure VI
Corporate
FORM NO. MGT-9
Extract of Annual Return
As on the financial year ended on 31st March, 2019
{Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the
Companies (Management and Administration) Rules, 2014}
I. REGISTRATION AND OTHER DETAILS

CIN L36911RJ1996PLC011381
Registration Date 10th January, 1996
Statutory
Name of the Company AU SMALL FINANCE BANK LIMITED
Category Company limited by shares
Sub-Category of the Company Non-govt Company (Banking Company)
Address of the Registered office and contact Details 19-A, Dhuleshwar Garden, Ajmer Road, Jaipur - 302001, Rajasthan
Phone no. 0141-4110060
Website: www.aubank.in
Email id: Investorrelations@aubank.in
Whether listed company • Bank’s Equity Shares are listed on National Stock Exchange of India
Ltd. and BSE Ltd.
• Privately Placed Debentures are listed at WDM segment of BSE Ltd.
Name, Address and Contact details of Registrar Link Intime India Pvt. Ltd.
and Share Transfer Agent C 101, 247 Park, L B S Marg, Vikhroli West, Mumbai 400 083 Tel No: +91 22
Financial
49186000 Fax: +91 22 49186060
Email id: rnt.helpdesk@linkintime.co.in
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:
Sr.
No NIC Code of the % to total turnover
Name and description of main products/services
. of the company
Product/
1. Banking Services 64191 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:

Sr. Holding/Subsidiary/
Name and address of the company CIN/GLN
% of shares held Applicable section
No. Associate
Not applicable (The Bank is not having any Holding/Subsidiary/Associate)
152|
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as Percentage of Total Equity)
(i) Category Wise Shareholding
No. of Shares held at the beginning of the year No. of Shares held at the end of the year % of
Category of Share holders % of % of Change
Demat Physical Total Total Demat Physical Total Total During the
Shares Shares FY 2018-19
A. Promoters/Promoter Group*
(1) Indian
a) Individual/HUF 8,65,44,582 - 8,65,44,582 30.29 8,72,34,670 - 8,72,34,670 29.84 (0.45)
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. 68,83,722 - 68,83,722 2.41 68,83,722 - 68,83,722 2.35 (0.06)
e) Banks/FI - - - - - - - - -
f) Any Other - - - - - - - - -
Sub-total (A)(1): 9,34,28,304 - 9,34,28,304 32.70 9,41,18,392 - 9,41,18,392 32.19 (0.51)
(2) Foreign
a) NRIs –Individuals - - - - - - - - -
b) Other–Individuals - - - - - - - - -
c) Bodies Corp. - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) Any Other - - - - - - - - -
Sub-total A.(A)(2): - - - - - - - - -
Total Shareholding
Promoter Group (A)= of Promoters/
(A)(1)+(A)(2) 9,34,28,304 - 9,34,28,304 32.70 9,41,18,392 - 9,41,18,392 32.19 (0.51)
B. Public Shareholding
1. Institutions
a) Mutual Funds 1,82,52,741 - 1,82,52,741 6.38 3,19,39,498 - 3,19,39,498 10.92 4.54
b) Banks/Financial Institutions 63,995 - 63,995 0.02 86,828 - 86,828 0.03 0.01
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture Capital Fund - - - - - - - - -
f) Insurance Companies 1,26,81,602 - 1,26,81,602 4.44 83,50,272 - 83,50,272 2.86 (1.58)
g) FIIs 2,15,249 - 2,15,249 0.08 2,99,741 - 2,99,741 0.10 0.02
h) Foreign Venture Capital Funds - - - - - - - - -
i) Foreign Portfolio Investor 2,09,39,363 - 2,09,39,363 7.33 6,91,59,844 - 6,91,59,844 23.66 16.33
j) Alternate Investment Funds 26,50,277 - 26,50,277 0.93 17,65,547 - 17,65,547 0.60 (0.33)
k) Provident Funds/Pension Funds - - - - - - - - -
l) Others-Trust - - - - - - - - -
Sub-total (B)(1): 5,48,03,227 - 5,48,03,227 19.18 11,16,01,730 - 11,16,01,730 38.17 18.99
2. Non- Institutions - - -
a) Bodies Corp. -
i) Indian 1,27,03,691 - 1,27,03,691 4.45 1,55,31,829 - 1,55,31,829 5.31 0.86
ii) Overseas 8,92,58,529 - 8,92,58,529 31.24 4,26,41,879 - 4,26,41,879 14.59 (16.65)
b) Individual - - -
i) Individual shareholders 1,08,24,365 - 1,08,24,365 3.79 93,60,003 - 93,60,003 3.20 (0.59)
holding nominal share
capital upto `1 lakh
ii) Individual shareholders 2,13,13,154 - 2,13,13,154 7.45 1,59,04,421 - 1,59,04,421 5.44 (2.01)
holding nominal share capital
in excess of `1 lakh
c) NBFCs registered with RBI - - - - 56,814 - 56,814 0.02 -
d) Other (Specify) - - - - - - - - -
Trusts 55,414 - 55,414 0.02 16,272 - 16,272 0.01 (0.01)
Hindu Undivided Family 5,07,787 - 5,07,787 0.18 4,61,334 - 4,61,334 0.16 (0.02)
Non- Resident Indians (Non Repat) 20,22,130 - 20,22,130 0.71 17,10,130 - 17,10,130 0.58 (0.13)
Non- Resident Indians (Repat) 4,80,724 - 4,80,724 0.17 5,15,444 - 5,15,444 0.18 0.01
Clearing Member 3,06,295 - 3,06,295 0.11 4,39,238 - 4,39,238 0.15 0.04
Sub-total (B)(2): 13,74,72,089 - 13,74,72,089 48.12 8,66,37,364 - 8,66,37,364 29.63 (18.49)
Total Public Shareholding 19,22,75,316 - 19,22,75,316 67.30 19,82,39,094 - 19,82,39,094 67.81 0.51
(B)=(B)(1)+ (B)(2)
C. Non-Promoter - Non-Public -
a) Custodian/DR Holder - - - - - - - - -
b) Shares held by Custodian - - - - - - - - -
for GDRs & ADRs
Grand Total (A+B+C) 28,57,03,620 - 28,57,03,620 100.00 29,23,57,486 - 29,23,57,486 100.00 -
Note: All above shares are having face value of `10 each.
*Promoters and Promoter Group includes shareholders post reclassification of Certain Promoter Group to public category.
Annual Report 2018-

(ii) Shareholding of Promoters/Promoter Group:
Corporate
Shareholding at the beginning of the year Shareholding at the end of the year
% Change
% of total % of shares % of shares
Sr. Shareholder’s Name No. of pledged/ % of total pledged/ in the
No shares
Shares of the encumbered to No. of Shares shares of the Shareholding
encumbered to
company company during the year
total shares total shares
1. Sanjay Agarwal 5,59,82,359 19.59 - 5,67,66,359 19.42 - (0.17)

2. Jyoti Agarwal 1,18,18,560 4.14 - 1,18,18,560 4.04 - (0.10)
3. Shakuntala Agarwal 1,18,20,430 4.14 - 1,18,20,430 4.04 - (0.10)
4. Chiranji Lal Agarwal 68,29,321 2.39 - 68,29,321 2.34 2.11 (0.05)
5. MYS Holdings Private Limited 68,83,722 2.41 - 68,83,722 2.35 - (0.06)
Statutory
6. Yuvraj Agarwal - - - - - - -
7. Mallika Agarwal - - - - - - -
Total 9,33,34,392 32.67 - 9,41,18,392 32.19 2.11 (0.48)
Note: During the year Chanda Devi Kedia, Srikant Kedia, Sureshchand Kedia, Ajay Agarwal, Manoj Kumar Agarwal, Niranjan Lal Aggarwal,
Ashok Kumar Agarwal, Baldev Agarwal, Dinesh Kumar Agarwal, Mahender Kumar Agarwal, Anita Aggarwal, Bina Agarwal, Dropathy Jaipuria, Pinki
Agarwal, Sunita Gupta and M/s Natural Fab were reclassified from the category of Promoter Group to Public category. Hence, 91,434 shares held
by them as on 31st March 2018 were not included in shareholding of the promoters/promoter group above.
Variation in terms of percentage shareholding is due to increase in paid up share capital of the Bank on account of allotment of shares during the
year ended 31st March 2019.
(iii) Change in Promoters/Promoter Group Shareholding:
Financial
1. Mr. Sanjay Agarwal
Shareholding at the Cumulative Shareholding
Sr. beginning of the year during the year
Particulars Date
No % of total shares % of total shares
No. of Shares No. of Shares
of the company of the company
At the beginning of the year 5,59,82,359 19.59 5,59,82,359 19.59
Transfer 10th August 2018 7,84,000 0.27 5,67,66,359 19.57
At the end of the year 5,67,66,359 19.42 5,67,66,359 19.42
2. Ms. Jyoti Agarwal

No Particulars Date
% of total shares % of total shares
No. of of the company No. of of the company
Transfer - - - - -
3. Ms. Shakuntala Agarwal

No Particulars Date
Transfer - - - - -
154|
4. Mr. Chiranji Lal Agarwal

No Particulars Date
At the beginning of the year 68,29,321 2.39 68,29,321 2.39
Transfer - - - - -
At the end of the year 68,29,321 2.34 68,29,321 2.34
5. Mys Holdings Private Limited

No Particulars Transfer 10thDate
August 2018 (2,40,00,000) (8.27) 2,09,70,794 7.23
At the end of the year 2,09,70,794 % of total shares
7.17 2,09,70,794 % of total shares
7.17
Transfer - - - - -
Note: During the year Chanda Devi Kedia, Srikant Kedia, Sureshchand Kedia, Ajay Agarwal, Manoj Kumar Agarwal, Niranjan Lal Aggarwal,
Ashok Kumar Agarwal, Baldev Agarwal, Dinesh Kumar Agarwal, Mahender Kumar Agarwal, Anita Aggarwal, Bina Agarwal, Dropathy Jaipuria, Pinki
Agarwal, Sunita Gupta and M/s Natural Fab were reclassified from the category of Promoter Group to Pubic. As on reporting date the said
persons do not fall into Promotor Group category. The variation in terms of percentage is due to increase in paid up share capital of the Bank on
account of allotment of shares during the year ended 31st March 2019.
(iv) Shareholding pattern of top ten Shareholders (other than Directors, Promoters and Holders of
GDRs and ADRs):
1. REDWOOD INVESTMENT LTD
Particulars Date
2. NOMURA INDIA INVESTMENT FUND MOTHER FUND

No Particulars Date
Transfer 04th May 2018 2,00,000 0.07 24,39,955 0.85
Transfer 15th June 2018 (3,10,000) (0.11) 21,29,955 0.75
Transfer 22nd June 2018 (55,000) (0.02) 20,74,955 0.73
Transfer 06th July 2018 (2,97,000) (0.10) 17,77,955 0.61
Transfer 17 August 2018
th
89,50,676 3.08 1,07,28,631 3.69
Transfer 31st August 2018 (1,00,000) (0.03) 1,06,28,631 3.66
Transfer 05th October 2018 2,00,000 0.07 1,08,28,631 3.71
Transfer 07th December 2018 (1,68,000) (0.06) 1,06,60,631 3.65
Transfer 04th January 2019 3,00,000 0.10 1,08,15,631 3.70
Transfer 18th January 2019 (3,00,000) (0.10) 1,05,15,631 3.60
Annual Report 2018-

3. KOTAK STANDARD MULTICAP FUND
Corporate
No Particulars Date
Transfer 13th April 2018 (30,616) (0.01) 5,16,213 0.18
Transfer 27th April 2018 (25,000) (0.01) 4,91,213 0.17
Transfer 11th May 2018 (6,137) (0.00) 4,85,076 0.17
Transfer 01st June 2018 58,637 0.02 5,43,713 0.19
Transfer 30th June 2018 1,00,947 0.03 6,44,660 0.22
Transfer 06th July 2018 4,62,668 0.16 11,07,328 0.38
Transfer 13th July 2018 20,378 0.01 11,27,706 0.39
Statutory
Transfer 20th July 2018 49,00,946 1.69 60,28,652 2.08
Transfer 27th July 2018 9,591 0.00 60,38,243 2.08
th
23,50,006 0.81 83,88,249 2.89
Transfer 14th September 2018 8,299 0.00 83,96,548 2.89
Transfer 21st September 2018 4,789 0.00 84,01,337 2.89
Transfer 28th September 2018 1,05,415 0.04 85,06,752 2.91
Transfer 05th October 2018 1,53,664 0.05 86,60,416 2.96
Transfer 12th October 2018 56,403 0.02 87,16,819 2.98
Transfer 30 November 2018
th
(3,865) (0.00) 92,13,248 3.15
Transfer 07th December 2018 (1,675) (0.00) 92,11,573 3.15
Transfer 14th December 2018 (24,023) (0.01) 91,87,550 3.14
Financial
Transfer 21st December 2018 (49,440) (0.02) 91,38,110 3.13
Transfer 04th January 2019 51,117 0.02 91,89,227 3.14
Transfer 11th January 2019 (35,772) (0.01) 91,53,455 3.13
Transfer 18th January 2019 (20,000) (0.01) 91,33,455 3.13
Transfer 25th January 2019 15,897 0.01 91,49,352 3.13
Transfer 01st February 2019 55,397 0.02 92,04,749 3.15
Transfer 08th February 2019 1,10,534 0.04 93,15,283 3.19
Transfer 15th February 2019 32,570 0.01 93,47,853 3.20
Transfer 01st March 2019 11,962 0.00 93,59,815 3.20
Transfer 08th March 2019 1,13,908 0.04 94,73,723 3.24
Transfer 15th March 2019 (8,765) (0.00) 94,64,958 3.24
Transfer 22nd March 2019 1,85,767 0.06 96,50,725 3.30
Transfer 29th March 2019 4,47,531 0.15 1,00,98,256 3.45
4. SBI EQUITY HYBRID FUND

Particulars Date
Transfer 06th April 2018 (11,10,000) (0.39) 88,09,937 3.08
Transfer 04th May 2018 (51,955) (0.02) 85,15,747 2.98
Transfer 11th May 2018 (4,379) (0.00) 85,11,368 2.98
Transfer 25th May 2018 (28,491) (0.01) 84,82,877 2.97
Transfer 01st June 2018 30,000 0.01 85,12,877 2.98
Transfer 08th June 2018 (2,49,398) (0.09) 82,63,479 2.89
Transfer 15th June 2018 (72,111) (0.03) 81,91,368 2.87
Transfer 29th June 2018 (2,02,624) (0.07) 79,88,744 2.75
Transfer 06th July 2018 (539) (0.00) 79,88,205 2.75
Transfer 13th July 2018 (53,843) (0.02) 79,34,362 2.74
Transfer 20th July 2018 25,00,000 0.86 1,04,34,362 3.60
rd
45,000 0.02 1,04,79,362 3.61
156|
4. SBI EQUITY HYBRID FUND

Transfer 24th August 2018 (3,26,000) (0.11) 1,09,37,362 3.76
Transfer 07th September 2018 5,776 0.00 1,09,43,138 3.77
Transfer 14th September 2018 64,224 0.02 1,10,07,362 3.79
Transfer 09th November 2018 5,575 0.00 1,10,12,937 3.77
Transfer 23rd November 2018 (15,439) (0.01) 1,09,97,498 3.76
Transfer 30th November 2018 (3,26,328) (0.11) 1,06,71,170 3.65
Transfer 25th January 2019 (10,152) (0.00) 1,01,07,785 3.46
Transfer 08th February 2019 (54,249) (0.02) 1,00,53,536 3.44
Transfer 15th February 2019 (5,751) (0.00) 1,00,47,785 3.44
Transfer 15th March 2019 (30,000) (0.01) 1,00,17,785 3.43
5. LABH INVESTMENTS LIMITED

No Particulars Date
Transfer 24th August 2018 (27,00,000) (0.93) 80,87,530 2.78
6. OUREA HOLDINGS LIMITED

No Particulars Date
Transfer 10th August 2018 (28,79,269) (0.99) 79,04,427 2.73
7. AMANSA HOLDINGS PRIVATE LIMITED

No Particulars Date
Transfer 17th August 2018 11,93,495 0.41 57,15,077 1.97
8. INTERNATIONAL FINANCE CORPORATION

No Particulars Date
Transfer 20th July 2018 (1,44,49,163) (4.98) 82,67,346 2.85
Transfer 27th July 2018 (71,82,72) (0.25) 75,49,074 2.60
Transfer 03rd August 2018 (18,69,946) (0.64) 56,79,128 1.96
Annual Report 2018-

9. STEADVIEW CAPITAL MAURITIUS LIMITED
Corporate
No Particulars Date
Transfer 06th April 2018 11,00,000 0.39 24,99,244 0.87
Transfer 15th June 2018 3,25,000 0.11 28,24,244 0.99
Transfer 22nd June 2018 50,000 0.02 28,74,244 1.01
Transfer 17th August 2018 8,00,000 0.28 36,74,244 1.26
Transfer 31st August 2018 9,14,616 0.31 45,88,860 1.58
Statutory
10. HDFC LIFE INSURANCE COMPANY LIMITED

No Particulars Date
At the beginning of the year - - - -
Transfer 20th July 2018 9,51,809 0.33 9,51,809 0.33
Transfer 27th July 2018 8,73,969 0.30 18,25,778 0.63
Transfer 03rd August 2018 2,91,691 0.10 21,17,469 0.73
Financial
Transfer 21st September 2018 1,00,000 0.03 22,17,469 0.76
Transfer 19th October 2018 47 0.00 30,00,596 1.03
Transfer 02nd November 2018 25,144 0.01 31,01,034 1.06
Transfer 16th November 2018 201 0.00 31,01,235 1.06
Transfer 23rd November 2018 (13,361) (0.00) 30,87,874 1.06
Transfer 30th November 2018 (11,968) (0.00) 30,75,906 1.05
Transfer 07th December 2018 75,000 0.03 31,50,906 1.08
Transfer 14th December 2018 6,079 0.00 31,56,985 1.08
Transfer 21st December 2018 (81,002) (0.03) 30,75,983 1.05
Transfer 28th December 2018 1,25,009 0.04 32,00,992 1.10
Transfer 04th January 2019 1,25,357 0.04 33,26,349 1.14
Transfer 11th January 2019 80 0.00 33,26,429 1.14
Transfer 18th January 2019 21 0.00 33,26,450 1.14
Transfer 25th January 2019 2,75,323 0.09 36,01,773 1.23
Transfer 01st February 2019 18,598 0.01 36,20,371 1.24
Transfer 08th February 2019 7,825 0.00 36,28,196 1.24
Transfer 15th February 2019 1,06,474 0.04 37,34,670 1.28
Transfer 22nd February 2019 1,84,513 0.06 39,19,183 1.34
Transfer 01st March 2019 33,464 0.01 39,52,647 1.35
Transfer 15th March 2019 75,154 0.03 42,02,843 1.44
Transfer 22nd March 2019 60,631 0.02 42,63,474 1.46
Note: Variation in terms of percentage shareholding is due to increase in paid up share capital of the Bank on account of allotment of shares
during the year ended 31st March 2019.
158|
(v) Shareholding of Directors and Key Managerial Personnel:

1. Mr. Sanjay Agarwal – Managing Director & CEO
Particulars Date
2. Mr. Uttam Tibrewal - Whole Time Director

No Particulars Date
3. Ms. Jyoti Narang - Independent Director

No Particulars Date
Transfer 06th April 2018 175 0.00 175 0.00
Transfer 28th September 2018 420 0.00 595 0.00
Transfer 29th October 2018 937 0.00 1,532 0.00
Transfer 08th February 2019 169 0.00 1,701 0.00
Transfer 18th February 2019 173 0.00 1,874 0.00
Transfer 25th March 2019 540 0.00 2,414 0.00
At the end of the year 2,414 0.00 2,414 0.00
4. Mr. Krishan Kant Rathi- Independent Director

No Particulars Date
At the beginning of the year 94,289 0.03 94,289 0.03
Transfer - - - - -
5. Mr. Manil Venugopalan - Independent Director (Part Time) Chairman

Shareholding at the
Cumulative Shareholding
No Particulars Date
Transfer - - - - -
At the end of the year - - - -
Annual Report 2018-

6. Mr. Narendra Ostawal - Additional Director (Non-executive)
Corporate
No Particulars Date
Transfer - - - - -
7. Mr. Raj Vikash Verma - Independent Director

Statutory
No Particulars Date
Transfer - - - - -
8. Mr. Deepak Jain - Chief Financial Officer

No Particulars Date
Financial
9. Mr. Manmohan Parnami - Company Secretary

No Particulars Date
At the beginning of the year 55310 0.02 55310 0.02
Transfer 31st May 2018 (228) (0.00) 55,082 0.02
Transfer 01st June 2018 (1,362) (0.00) 53,720 0.02
Transfer 04th June 2018 (1,500) (0.00) 52,220 0.02
Transfer 07th June 2018 (1,000) (0.00) 51,220 0.02
Transfer 14th August 2018 6,597 0.00 57,817 0.02
Transfer 11th December 2018 1,474 0.00 59,291 0.02
Note: Variation in terms of percentage shareholding is due to increase in paid up share capital of the Bank on account of allotment of shares
during the year ended 31st March 2019.
160|
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment:
(` In lakh)
Secured Loans excluding
Unsecured Loans Deposits* Total
deposits
Indebtedness
Indebtedness at the beginning of the financial
year
i) Principal Amount 4,77,660.82 2,86,225.65 7,63,886.47
ii) Interest accrued and due on borrowings 0.00 0.00 0.00
iii) Interest accrued but not due 5,682.64 15,912.51 21,595.15
Total (i+ii+iii) 4,83,343.46 3,02,138.16 0 7,85,481.62
Changes in Indebtedness during the financial year
Addition 10,77,812.11 12,77,436.81 23,55,248.92
Reduction 9,24,975.12 13,32,824.40 22,57,799.52
Net Change 1,52,836.99 -55,387.59 0 97,449.40
Indebtedness at the end of the financial year
i) Principal Amount 6,30,497.81 2,30,838.06 8,61,335.87
ii) Interest due but not paid 0.00 0.00 0.00
iii) Interest accrued but not due 12,292.82 17,231.39 29,524.21
Note : Deposits received by the Bank are in the ordinary course of banking business, which does not amount to deposit in terms of the provisions
of the Companies Act, 2013, hence, not included hereinabove.
VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(` in lakh)
Sl. No Particulars of Remuneration Name of MD/WTD/Manger
Mr. Sanjay Mr. Uttam Total

Agarwal Tibrewal
MD& CEO WTD
1. Gross salary
(a) Salary as per provisions contained in section 17(1) of 169.01 146.51 315.52
the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act,1961
(c) Profits in lieu of salary under section 17(3) Income tax Act,
1961
2. Stock Option (no. of options)* 10,00,000
3. Sweat Equity - - -
4. Commission as % of profit others specify - - -
5. Others please specify - - -
Total (A)@ 169.01 146.51 315.52
Ceiling as per the Act: being 10% of the net profits of the Bank calculated as
per Section 198 of the Companies Act, 2013
*Mr. Uttam Tibrewal, Whole-time Director of the Bank was granted 10,00,000 ESOPs under ESOP Scheme 2018 during the year at exercise price
of `664/- each, which are subject to RBI approval. The remuneration of Mr. Uttam Tibrewal – Whole Time Director of the Bank does not include
perquisites on ESOP amounting to `66.99 crore which were exercised during the period under review.
@The total remuneration consist of basic salary, taxable allowances including special allowance and excluding perquisites on ESOPs. ESOPs
granted to Mr. Uttam Tibrewal, Whole-Time Director during the year which are subject to RBI approval.
Note: Above figures have been taken as recorded in Audited Financial Statement of the Bank.
Annual Report 2018-

B. Remuneration to other directors:
Corporate
(` In lakh)
S. No. Particulars of remuneration Name of Directors
Independent Directors Krishan Kant Mannil Jyoti Raj Vikash Total amount
Rathi Venugopalan Narang Verma
1. • Fee for attending Board/committee meetings 9.20 8.20 7.60 7.80 32.80
• Commission 10.00 17.00 10.00 10.00 47.00
- - - - -
• Others, Please specify
Total (1)* 19.20 25.20 17.60 17.80 79.80
Name of Directors
Other Non-executive Directors Narendra Total amount
Statutory
Ostawal
2. • Fee for attending Board/committee meetings - -

• Commission - -
• Others, Please specify - -
Total (2) - -
Total (B)=(1)+(2) ------------------------------------------------------------------------------------------ 79.80
Total managerial remuneration Note: In terms of provisions of Companies Act, 2013, the remuneration payable
Ceiling as per the Act to directors other than executive directors shall not exceed 1% of the net profit
of the Bank. The remuneration paid to directors was within prescribed limits
during the year.
*`85.91 lakh were recorded as expenditure in books of accounts pertaining to Director sitting fees and profit related commission. Profit Linked
Financial
Commission pertaining to FY 2018-19 is being released to the Independent Directors after the finalisation of Annual Audited Accounts of the
Bank.
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(` in lakh)
Sr. Key Managerial Personnel
Particulars of Remuneration Deepak Manmohan Parnami
No. Total
Jain (CFO) (Company Secretary)
1. Gross Salary 112.35 35.92 148.27
Salary as per provisions contained in Section 17(1) of
the income tax act,1961
Value of perquisites u/s 17(2) Income tax act,1961
Profits in lieu of salary u/s 17(3) Income tax Act,1961
2. Stock Option (no. of options) 5,00,000 3,000 -
3. Sweat Equity - - -
4. Commission - - -
-as a % of profit
-others, specify
5. Others, please specify 48.84 10.70 59.54
(It includes amount of Bonus and arrear appraisal for FY 2017-18)
Total @ 161.20 46.62 207.81
@ The total remuneration consist of basic salary, taxable allowances including special allowance and annual performance linked bonus
and exclusive of perquisites on ESOPs. ESOPs granted during the year have been mentioned hereinabove. The remuneration of Mr. Deepak Jain –
Chief Financial Officer & Mr. Manmohan Parnami - Company Secretary of the Bank does not include perquisites on ESOP amounting to `9.35
crore &
`0.47 crore respectively which were exercised during the period under review.
162|
VII) PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:
Details of penalty/
Section of the punishment/ Authority {RD/ Appeal made,
Type Companies Act Brief description
compounding NCLT/COURT} if any
fees imposed
A. Bank
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. Directors
Penalty - - - - -
C. Others Officers in Default
Penalty - - - - -
Note: There were neither any Penalties levied on the Bank nor any punishment was granted and no compounding of offences was carried out
during the year under Companies Act, 2013, RBI, SEBI and other authorities.


DIN: 00009526 DIN: 01024940

Place: Jaipur
Annual Report 2018-

Annexure VII
Corporate
ANNUAL REPORT ON BUSINESS RESPONSIBILITY
At AU Small Finance Bank (AU Bank), we believe that the

efforts and performance against the principles of Business
organisation is a critical component of the social fabric and
its accountability is extended to all facets of society and Responsibility as defined by Regulation 34(2)(f) of the
Securities and Exchange Board of India (Listing
the environment.
2015, covering topics across environment, social,
We believe that the optimum use of resources is the
governance, and stakeholder perspective.
paramount responsibility of an organisation. The Bank
Statutory
follows Social Environment Management System (SEMS)
practices, which are integral to our business model. AU DHARMA – AU BANK’S APPROACH TO
These practices are well integrated in our systems and BUSINESS RESPONSIBILITY
processes throughout the chain. We are committed
to set the highest benchmark(s) for environment and The Bank conducts business operations in a fair,
sustainability measures in our operations and strive for transparent and accountable manner, which is also backed
by a strong policy framework and an internal Code of
fulfilling our commitment through SEMS. While conducting
Conduct. We have implemented suitable internal controls
our business, we work hard to consistently improve our
& monitoring mechanism to ensure adherence to all our
internal management system, products and services
ethical business practices. We lay special attention on
to make a more positive and meaningful societal and
the fact that even in our day-to-day operations our
environmental impact.
governance framework and predefined business practices
are adhered to without any compromises. Therefore, we
Financial
Our Business Responsibility Report (Report) for
have defined and designed our working practices in the
FY 2018-19 follows the National Voluntary Guidelines on
form of AU Dharma.
Social, Environmental and Economic Responsibilities of
Business, as notified by the Ministry of Corporate Affairs
Our thoughtfully devised ‘AU Dharma’ guides the Bank’s
(MCA). The disclosures made under this report provide
entire team in discharging their everyday duties in a fair
transparent and relevant information on the Bank’s
and professional manner.
AU Dharma – Six Core Guiding Pillars
Work Hard & Look for Details

Willing to go the extra mile in everything we do & thoroughly understand customers
needs, issues, organisational delivery model
Customer Focus
Responsibly Entrepreneurial
If customer needs it we
100% ownership accountability
will make it happen
and 0% excuses
6
pillars of
AU DHARMA
Integrity
We are fair & consistent in all our
Nurture Talent & Succeed Together
We nurture talent & together we are a
dealings-employees, customers
great team working for common goals
partners & shareholders
Bias for Action

Urgency in everything we do
164|
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
1. Corporate Identity Number (CIN) of the Company L36911RJ1996PLC011381

2. Name of the Company AU SMALL FINANCE BANK LIMITED
3. Registered address 19-A, Dhuleshwar Garden, Ajmer Road, Jaipur- 302001 Rajasthan
4. Website www.aubank.in
5. E-mail id investorrela tions@aubank.in
6. Financial Year reported 1st April 2018 to 31st March 2019
7. Sector(s) that the Company is engaged in National Industrial Classification 2008
(industrial activity code-wise) Section K: Financial and Insurance Activities Code: 64191
8. List three key products/services that the Company Being a banking company, it is engaged in banking and financial
manufactures/provides (as in balance sheet) services, including retail banking, Small & Mid-Corporate, Business
Banking, Digital Banking and treasury operations.
• Deposits
• Advances
• Investments & Other liability products
9. Total number of locations where business activity is (a) Number of international locations- NIL
undertaken by the Company (b) Number of national locations – 572 as on 31st March 2019
10. Markets served by the Company Local State National International
X
SECTION B: FINANCIAL DETAILS OF THE COMPANY AS ON 31ST MARCH 2019
1. Paid-up capital `29,23,574,860

2. Total turnover (crore) `3,410.86
3. Total profit after taxes (crore) `381.81
4. Total spending on Corporate Social 1.20%
Responsibility (CSR) as a percentage of
profit after tax (%)
5. List of activities in which expenditure 1. Promotion of sports
in 4 above has been incurred • AU Bank Sports Village is a platform to facilitate physical and emotional
development of the marginalised and disadvantaged children from rural
and slum areas.
• Sports is used as a tool of intervention and incentivising them to learn.
• Construction of sports ground and infrastructure with Round Table India.
2. Promotion of Education through
• AU Skills Academy: Vocational training centre to serve the unemployed youth who
are aspiring to start or to build their career
• AU Self Employment Training Centre: Vocational training workshops for rural
women to get skilled and self-employed
• Financial & Digital Literacy Camps: Spreading awareness about financial and
digital literacy in rural and unbanked geographies through community engagement.
• Other Initiatives: Supported 50 government schools of five districts of Rajasthan in
mid-day meal programme through Akshaya Patra Foundation
• Helping three slum schools with Alternative Development Centre, distribution of
schoolbags and other educational materials in governments schools in the vicinity
of Jaipur and Shahpura
3. Promotion of Preventive Healthcare through
• Organ donation camps with Mohan Foundation, Shekhawati Agarwal Samaj for
eye check-up camps, Khatu Shyam Health Camps at Khatu Shyam, Open Air Gym,
contribution to Pratyek Vyakti Ki Umeed ki Sansthan
• Making available safe drinking water through installation of water coolers at
Jaipur, Shahpura and nearby areas.
4. Promotion of Art & Culture
• Kabir Yatra with Lokayan Sansthan, Promotion of art & culture at Jaipur.
Annual Report 2018-

SECTION C: OTHER DETAILS (AS ON 31ST MARCH 2019)
Corporate
1. Does the Company have any Subsidiary Company/Companies The Bank does not have any subsidiary company
2. Do the Subsidiary Company/Companies participate in the BR Not Applicable
initiatives of the parent company? If yes, then indicate the number of
such subsidiary company(s).
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the No
Company does business with, participate in the BR initiatives of the
Company? If yes, then indicate the percentage of such entity/entities?
[Less than 30%, 30-60%, More than 60%]
SECTION D: BR INFORMATION
Statutory
1. Details of Director/Directors responsible for BR
S. No. Particular Details
a. Details of Director responsible for implementation of the
BR policy/policies
DIN 00009526
Name Mr. Sanjay Agarwal
Designation Managing Director & CEO
b. Details of the BR Head
DIN Number Not Applicable
Name Mr. Sunil Parnami
Financial
Designation Chief of Investor Relations, M&A
Telephone number 022-62490607
E-mail id sunil.parnami@aubank.in
2. Principle-wise (as per National Voluntary Guidelines) BR policy/policies

(a) Details of compliance (Reply in Y/N)
S. No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1. Do you have a policy/policies for Y Y Y Y Y Y N Y Y
2. Has the policy being formulated in consultation with Y Y Y Y Y Y - Y Y
relevant stakeholders?
3. *Does the policy conform to any national/international Y Y Y Y Y Y - Y Y
standards? If yes, specify? (50 words)
4. **Has the policy being approved by the Board? Y Y Y Y Y Y - Y Y
If yes, has it been signed by MD/owner/CEO/appropriate
Board Director?
5. Does the Company have a specified committee of the Board/ Y Y Y Y Y Y - Y Y
Director/Official to oversee the implementation of the policy?
6. Indicate the link for the policy to be viewed online? https://www.aubank.in/au-notice-board
7. Has the policy been formally communicated to all relevant Policies/code that are internal documents of the Bank are
internal and external stakeholders? accessed by employees and the other relevant policies have
been
posted on the Bank website and can be accessed at above link.
8. Does the Company have in-house structure to implement the Y Y Y Y Y Y - Y Y
policy/policies?
9. Does the Company have a grievance redressal Y Y Y Y Y Y - Y Y
mechanism related to the policy/policies to address
stakeholders’ grievances related to the policy/policies?
10. Has the company carried out independent audit/evaluation of Y Y Y Y Y Y - Y Y
the working of this policy by an internal or external agency?
*The policies are developed and aligned to applicable compliance requirements, RBI norms and guidelines, requirements of listing agreement
with stock exchanges, or the Bank’s internal requirements and best practices.
166|
of respective process owner(s).

**The policies are being put up to the Board for approval after signature
(b) If answer to the question at serial number 1 against any principle, is ‘No’, explain why (Tick up to 2 options)
S. No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the principles - - - - - - - - -
2 The Company is not at a stage where it finds itself in a position - - - - - - - - -
to formulate and implement the policies on specified principles
3 The Company does not have financial or human resources - - - - - - - - -
available for the task
4 It is planned to be done within next six months - - - - - - - - -
5 It is planned to be done within the next one year - - - - - - - - -
6 Any other reason (please specify) @Refer below
@The Bank works closely with collective trade and industry associations, while there is no specific policy outlined for this principle and also we do
not take part in any lobbying or policy advocacy.
Principle-wise policies
S.no Business Responsibility Principles Relevant Policies/Code

P1 Ethics, transparency and accountability Fraud Risk Management Policy, Compliance Policy, Risk-based Internal Audit
Policy, Anti-Bribery and Anti-Corruption Policy, Code of Conduct for
Employees, Code of Conduct for Directors and Senior Management Personnel,
Code of Conduct – Prohibition of Insider Trading Policy and Policy on Related
Party Transactions and Materiality
P2 Contribute to sustainability throughout Fair Practice Code for Lenders, MSME Policy Manual, Policy on Business
their lifecycle Correspondents and Social and Environmental Management System
P3 Employee wellbeing Learning & Development Policy, Code of Conduct for Employees, Capacity
Building Policy, Compensation Policy, Whistle Blower Policy & Vigil Mechanism,
Employee Leave Policy and Prevention and Redressal Against Sexual
Harassment Policy
P4 Stakeholder engagement and responsiveness Investor Grievance Redressal Policy, Communications Policy, CSR Policy and
Customer Service Policy
P5 Promote human rights Citizen’s Charter, Charter on Customer Rights and Fair Practices
Code for Lenders
P6 Environment Protection Social and Environmental Management System
P7 Public and regulatory policy The Bank does not have any policy/code for this principle
P8 Corporate social responsibility CSR Policy and Social and Environmental Management System
P9 Customer value Customer Grievance Redressal Policy, Customer Service Policy, Customer
Compensation Policy, Collection of Dues & Repossession of Security,
Charter on Customer Rights and Fair Practice Code for Lenders
3. Governance related to BR
report? How frequently it is published?
(a) Indicate the frequency with which the Board of
Business Responsibility Report is published by
Directors, Committee of the Board or CEO assesses
the Bank annually and is hosted at its website at
the BR performance of the Company? Within three
https://www.aubank.in/disclosures
months, three to six months, annually or more
than one year?
Annual assessment of the SEMS Standards and BR SECTION E: PRINCIPLE-WISE PERFORMANCE
initiatives is presented to the Board and detailed
Principle 1: Ethics, Transparency and
deliberation is conducted on the impact of the BR
Accountability
initiatives and future strategies around it.
We are determined to ensure that our operations are
(b) Does the Company publish a BR or a Sustainability run ethically and transparently across the value chain.
Report? What is the hyperlink for viewing this The Bank’s work culture is built around ‘AU Dharma’ and
the focus is on making employees responsibly
entrepreneurial with ownership.
Annual Report 2018-

The Board of Directors and Senior Management affirm e-mail and 100% of those complaints were resolved
Corporate
annually that they have acted ethically, honestly, diligently satisfactorily; and no complaint was pending as on
and in good faith to protect the Bank’s properties, brand 31st March 2019.
equity and image. They have acted in the Bank’s best
interests and its entire fraternity of stakeholders, while The details of customer complaints are disclosed in
discharging their fiduciary obligations. the schedule no. 18(12) of notes to accounts.
Through its Code of Conduct on Prohibition of Insider Principle 2: Goods and Services that are Safe and
Trading, the Bank endeavours that no person is deriving Contribute to Sustainability Throughout their
any benefit or assisting any other person(s) to derive Lifecycle
any benefit by virtue of having access to or possessing
AU Bank caters to the financial requirements of its
of price sensitive information relating to financial results
customers by providing them finance facilities according
Statutory
or operations of the Bank; or passing it to any other
to their requirements. As a Small Finance Bank, our
person with whom the Bank has business dealings; or
primary focus is to lend for priority sector and cater to
do an act which can have an unusual movement/trend
the requirements of underbanked, unbanked and
in securities trading and may have an impact on the
unserved customer segments. Below are some of the
Bank’s price of the securities.
customers that were provided credit assistance to set up
their businesses and outlines the impact of the Bank’s
While hiring any vendor for providing any material/
operations.
services to the Bank, we ensure that a covenant pertaining
to anti-bribery and anti-corruption is stipulated in the
Raju Bhai – Customer AU BANK
required agreement(s). This binds the service provider(s)
Raju Bhai a progressive farmer who hails from a village
to observe the highest standards of ethics during the
near Ahmedabad had understood that dependence on
supply of services and execution of the transaction and
agriculture alone for livelihood will never be enough to
not to indulge in any corrupt practices. Employees at the
fend for his family. Raju’s life prospered when he showed
Financial
time of their induction and at regular intervals are
courage and took decision against all odds and
imparted classroom trainings & through Human Capital
approached AU. He received due support and the loan was
Management software for orientating them towards
sanctioned under ‘Pradhan Mantri Mudra Yojana’.
ethical business practices and organisation
philosophy around it. For achieving the objective of
this principle, the Bank has adopted the Compliance
Policy, Fraud Risk Management Policy, Anti-Bribery and
Anti-Corruption Policy, Code of Conduct for employees,
Code of Conduct on Prohibition of Insider Trading and
Code of Conduct for Direct Selling Agent among others.
1. Does the policy relating to ethics, bribery and

corruption cover only the Company? Yes/No. Does
it extend to the Group/Joint
Ventures/Suppliers/ Contractors/NGOs/Others?
The Bank’s policy relating to ethics, bribery and
corruption serves as the guiding principles for all
employees of the Bank including Director(s) and
the Bank ensures its compliance in its dealings/
transactions with vendors/service providers & At AU Bank, we extended our support and gave wings to
business correspondents of the Bank. The Bank is his aspirations by catering to his financial requirements,
neither part of any other group; nor has it any joint followed by our swift processing and fast approval process.
ventures/NGOs. Raju Bhai is earning handsome surplus, besides the
income from his agriculture income. He has a well-settled
2. How many stakeholder complaints have been pick-up vehicle business with three vehicles and two
received in the past financial year and what drivers who are paid `8000 each. “Starting this business
percentage was satisfactorily resolved by the was the best decision of my life, for someone who has
management? If so, provide details thereof, in struggled through those droughts as a farmer to
about 50 words or so. someone who now counts the farm income as a bonus, I
The Bank received nine stakeholder complaints in now feel truly empowered,” he says.
FY 2018-19 from scores and other sources viz letter &
168|
Renuka Patel – Customer AU BANK

developments through our financial inclusion agenda.
The journey of Renuka Patel has its own ups and downs.
Our target customer segments are residents of semi-urban
From an employee earning a nominal amount of `15,000
and rural India and include low and middle-income
to the owner of two stitching factories. This story is about
individuals and micro/small businesses and the loans are
empowering an ambitious women entrepreneur who
extended with a bottom-up approach.
turned her ‘employment’ status to ‘owner’.
In FY 2018-19, the Bank disbursed MUDRA loans of `3482
Renuka started working at the age of 40. From being
crore. The Bank opened 33,658 BSBD accounts with a
one of the workers in the stitching and embroidery
balance of `12 crore. For the period under review, the
factory of her husband’s friend Mr. Nayak, she went on
to become a supervisor in a few years. With her hard Bank has issued 2,61,000 RuPay Cards, more than 300
work, Renuka was supervising work in Mr. Nayak’s four financial literacy camps were organised which have
factories; and at times kept advising Mr. Nayak on his benefitted more than 23,000 beneficiaries. Out of total
business expansion plan. Mr. Nayak knew she was number of branches of the Bank 28.43% branches &
ready for her own flight. Therefore, he offered to sell one Banking Outlets are in unbanked area. We have started
of his factories to her and drive her entrepreneurial issuing policies under Pradhan Mantri Suraksha Bima
journey. Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima
Yojana (PMJJBY). We have issued 650 policies under
(PMJJBY) and a few policies under PMSBY and are planning
She approached AU as she knew they supported
to go live with Atal Pension Yojana (APY) in coming year.
entrepreneurs like her. AU has always been a step ahead
when it comes to promoting women empowerment and
entrepreneur(s). Under the Pradhan Mantri Mudra Yojana,
1. List up to three of your products or
we provided her a loan of `4 lakh to start her services whose design has incorporated
entrepreneurial journey in 2017. social or environmental concerns, risks
and/or opportunities.
In the six-month time span, Renuka has set up two Our products and services are designed keeping in
business units, one for stitching and embroidery in Vastral, mind the profile of our customers and their impact on
Ahmedabad and another in the nearby village of Mahijeda environmental concern, risk opportunities around it.
for making cloth bags. Her household income has gone up
substantially in a short span. She is employing more than Product Example – Secured Business Loans to MSME
13 full-time women workers and 5-7 women who work AU Bank has been catering to the underserved, unreached
from their homes in Vastral. and unbanked rural and semi-urban areas for their
financial requirements through the Bank’s swift loan-
“I aspire to employ every housewife (home-maker) in approval process. The Bank has been relentlessly
Vastral so that maximum women become self-reliant.” she supporting these businesses with its collateral backed
beams. loans and has been helping them in growing their
operations. It recognised their potential and supported
them through devising a way to informally assessing
them in the absence of reliable formal data.
In terms of our product suite, we have a full spectrum of
retail loans including vehicles loans, consumer durable
loans, MSMEs, SME and mid-corporate, liability & third
party investments, transaction banking, mobile and
digital banking.
2. For each such product, provide the following

details in respect of resource use (energy,
water, raw material etc.) per unit of product
(optional)
(a) Reduction during sourcing/production/distribution
achieved since the previous year throughout the
value chain?
Financial Inclusion Being in the banking industry, the Bank works towards
While financial inclusion is defined as extending banking reducing its resource consumption substantially.
services to the unreached, at AU it goes beyond. The material used and procured by the Bank primarily
We understand their requirements and partner the comprise paper and grid electricity for which your
borrower’s success “Unki jeet mein hamaari jeet Bank is creating awareness among end users for
hai”. We are determined to foster and nurture inclusive sustainable consumption. In addition, your Bank
Annual Report 2018-

has created a
170|
robust technology platform to build a new age the goods or services we also ensure that quality
Corporate
digital banking ecosystem and it is focussed on of services/products is not compromised and best
efficient use of natural resources and reducing quality products and services should be provided to
carbon footprint in the environment. the customers. AU Bank carefully selects its vendors
keeping in mind development of the local community.
The Bank’s products and processes are directed
towards technology advancement and digitisation of The Bank as part of vendor management process
our banking services in a customer-friendly manner. conducts proper checks before appointing any
The result of the same is visible with customer vendors, consultants/service providers and ensures to
empowerment by providing them Banking with ease, select the best. The Bank’s Code of Conduct
less paperwork with TAB Banking and reduction in enumerates its expectations from vendors/suppliers
waste generation. and partners.
Statutory
(b) Reduction during usage by consumers (energy, AU Bank majorly contributes to the development
water) has been achieved since the previous year of capacity and capability of thousands of smaller
The Bank is adopting sophisticated technology to digitise businesses by providing them easy access to credit
its operations and make products available digitally. and banking services, quite a few of them being
We have witnessed strong growth in the adoption of vendors of AU Bank.
TAB-based account opening, android-based mobile
banking, and internet banking, thus minimising paper 5. Does the Company have a mechanism to
usage. The focus is to deliver a seamless omni-channel recycle products and waste? If yes, what is
integrated solution that will ensure consistent high-level the percentage of recycling of products and
customer experience across all channels website, waste (separately as<5%, 5-10%,>10%). Also,
internet banking, mobile applications, chat bots and it provide details thereof, in about 50 words or
has reduced the customers’ travel time and expenses, so.
Financial
thereby reducing the fuel consumption and carbon
emissions. The above principle description is not applicable for a
banking company and the Bank ensures that
3. Does the Company have procedures in place for applicable e-waste disposal guidelines are followed in
sustainable sourcing (including transportation)? disposal of e-waste originating from its operations.
(a) If yes, what percentage of your inputs was sourced Principle 3: Employee Wellbeing
sustainably? Also, provide details thereof, in about
50 words or so. Employee engagement
Banking being a service-oriented business, sustainable AU Bank duly acknowledges the employee as its assets
sourcing for its products is not substantial. However, and initiatives for continuous engagement programme,
as a responsible corporate citizen, the Bank training and development are undertaken. Several
endeavours to reduce the environmental impact of its behavioural and functional training programmes are
operations. The Bank does not utilise raw conducted on an ongoing basis. Regular trainings are
materials/resources directly, yet in procurements of organised on products and services, behavioural and
electrical equipment leadership development, among others.
ESP star ratings are taking into consideration while Our Human Capital Management tool, an online platform,
procuring products for its branches/offices to AU Bank procures significant items including marketing,
save electricity. promotional, stationery, consumable materials from local SME
vendors. While procuring
As the resources of the Bank are intangible/fungible
in nature adequate and timely measures are being
adopted by the Bank to ensure that its resources
are utilised efficiently and optimally for sustainable
use.
4. Has the Company taken any steps to procure goods

and services from local & small producers,
including communities surrounding their place of
work?
(a) If yes, what steps have been taken to improve
their capacity and capability of local and small
vendors?
Annual Report 2018-

provides role-based ongoing training to
employees. Communication channels have
been augmented to communicate key
achievements, policy and process changes,
project launches, recognitions of success
stories, and policies. Intranet, webcasts,
mailers, posters, video steaming and other
modes to leverage the technology to the extent
possible for cost-effective and timely employee
communication.
AU Bank is an equal opportunity employer

and selects employees purely on merits,
keeping in mind the job requirements,
required skillsets and provides equal
opportunities to all sections of society
irrespective of caste, creed, gender, race,
colour, age, marital status and religion. The
Bank’s operations do not promote any child
labour, forced labour or any form of involuntary
labour and discrimination. Its approach towards
its employees revolved
170|
around the following polices viz., Code of Conduct for

Employees, Maternity Leave policy, Whistle Blower Policy,
Employee Leave Policy, Prevention of Sexual Harassment
Policy and other policies, codes and charter.
The polices, codes and charter are easily accessible to the

Bank employees.
Talent Development
The belief that any institution is only as strong as its
employees is deeply embedded within the AU Bank
work culture and ethos. The Bank invests significantly in
employee development across all verticals. The Bank has
a substantial human capital resource base and hence it
is imperative for the Bank to work harder to align each
employee with the Bank’s Dharma’s. AU Bank continues to
invest in a world-class human capital management system
for its employees to redress their concerns, queries and to Employee Value Proposition
disseminate information. The system also offers e- Banking is a business of trust and to imbibe right values
from top to bottom, the Bank focusses on three guiding
learnings modules for enhancement of employee skillset at
principles of Intelligence, Honesty and Responsibility to be
work, which leads to greater employee satisfaction.
followed by employees at all levels, while dealing internally
The training and development programmes are or with the external world. This has helped us in building
synchronised, where the focus of the training programme and connecting right chords within the organisation.
is on strengthening the skills & knowledge of the
employees; the objective being to make them ready to
undertake higher roles in their growth journey with the
organisation.
With this approach your Bank, supports employees

through learning & development at each stage of their
career path to bolster their morale and productivity.
Through AU connect programme we accustom the new
people with the Bank’s culture, HR policies, compliance
mechanism. Training programmes are organised where
they also get an opportunity to meet the business leaders. Employee Value Proposition
Several training sessions were organised by the Bank by
collaborating with external agencies. Your Bank also
organises various certification programmes wherein they
are updated with Basics of Banking, Compliance, AML,
KYC and other elements of the banking industry.
Health and Safety

Employees are trained to handle emergency situations.
Training is also provided to security personnel to deal with
various other threats and risks. To prepare ourselves
better to react in an emergency, a Fire Safety and
Evacuation drills were conducted periodically at our
offices. During the training, our team practised evacuation,
assembly area procedure and the use of fire extinguishers.
The participants were briefed about the fire impediments,
its detection and suppression, identification and use of
fire-fighting equipment. It is followed by a demonstration
and practice of first-aid, fire-fighting using fire
extinguishers available in offices of the Bank.
Annual Report 2018-

1. Please indicate the total number of Principle 4: Stakeholder Engagement and
Corporate
employees. Responsiveness
The total number of employees as on 31st March 2019 AU Bank regularly and timely engages with all its
were 12,623 employees stakeholders and follows responsive approach to act upon
their valuable feedback. At AU Bank, we have devised a
2. Please indicate the total number of comprehensive and periodic stakeholder engagement
employees hired on framework keeping in the mind the nature, criticality,
temporary/contractual/casual basis. urgency and priority of stakeholder engagement.
38
Investor Grievance Redressal Policy is devised to address
the grievances of the investors and it is ensured that
3. Please indicate the number of permanent
investors’ concerns are duly addressed in time. The Bank
Statutory
women employees. has designed policy on customer rights that protects the
The total number of permanent women basic rights of its customers. It was pertinent for the Bank
employees were 671 to follow the standard banking practices while dealing with
individual customers. The said policy contains the right to
4. Please indicate the number of permanent review, appeal and complaint; to privacy, confidentiality,
employees with disabilities. and to see information related to the service or user.
The total number of permanent employees with 1. Has the Company mapped its internal and
disabilities were 5 external stakeholders? Yes/No
Yes, the Bank has mapped its internal and
5. Do you have an employee association that external stakeholders.
is recognised by management?
Financial
The Bank does not have any association. 2. Out of the above, has the Company identified
the disadvantaged, vulnerable & marginalised
6. What percentage of your permanent stakeholders?
employees is members of this recognised Yes, the Bank has identified the disadvantaged,
employee association? vulnerable and marginalised stakeholders.
As a Small Finance Bank, we are focussing on
Not Applicable.
priority-sector lending.
7. Please indicate the number of complaints 3. Are there any special initiatives taken by the
relating to child labour, forced labour, company to engage with the disadvantaged,
involuntary labour, sexual harassment in vulnerable and marginalised stakeholders? If so,
the last financial year and pending, as on the provide details thereof, in about 50 words or so.
end of the financial year.
No of complaints The Bank as part of CSR initiatives, identified financial
No of complaints
No. Category filed during the
Pending as on literacy as one of its core area and is determined to
end of the reach out to weaker sections, beneficiaries, children
financial year
financial
year
from marginalised socio-economic backgrounds and
1 Child labour/forced NIL NIL the differently abled, ensuring that every person is
labour/involuntary oriented with the basics of banking and no person
2 Sexual harassment 1 0 is deprived from banking services. In addition to
3 Discriminatory NIL NIL this, the Bank through its financial inclusion agenda
employment continues to remain engaged with the unbanked and
underbanked population.
8. What percentage of your undermentioned
employees were given safety & skill up- Principle 5: Businesses Should Respect and
gradation training in the last year? Promote Human Rights.
I. Permanent Employees 92% AU Bank strongly advocates respecting and promoting
II. Permanent Women Employees 91% basic human rights. Besides, the Bank has inherently
III. Causal/Temporary/Contractual Employees 53% adopted an exhaustive compliance mechanism at multiple
IV. Employees with Disabilities 40% levels, which minimises the slightest possibility of any
abuse of the fundamental human-rights principle while
dealing with internal & external stakeholders. The Bank
172|
follows humane
Annual Report 2018-

approach in dealing with internal stakeholder by providing
• Ensuring that activities undertaken by the Bank are
equal employment opportunities to employees from all
walks of life, providing them complete freedom of choice consistent with the applicable requirements outlined in
in associating and expressing themselves at workplace. the Social and Environmental Management System policy.
The Bank does not practice any biased approach in • Reviewing the projects against the applicable
offering its products and services and it has devised fair requirements.
practice code to ensure equanimity in its approach while
• Financing projects that are designed, built and operated
dealing with internal and external stakeholders. Beyond
in accordance with the applicable requirements.
contractual obligations, the Bank ensures that vendors &
service providers rights are duly protected. Initiatives for energy efficiency and carbon footprint
reduction:
1. Does the policy of the Company on human rights a. Virtualisation of windows servers to save power.
cover only the Company or extend to the
b. Fitted capacitors at the chiller end of the HVAC systems
Group/Joint
within office premises and branches.
Ventures/Suppliers/Contractors/NGOs/Others?
The policy is applicable to staff of all the c. Fitted electric saver (timer) at various branches with
branches/regional offices/departments handling banking glow-sign boards to turn off electricity at set times.
operations and related activities. At AU Bank, all d. Set up of APFC capacitors in electric panel
banking and related activities are undertaken in across branches.
compliance of applicable laws. AU Bank does not
promote any abuse/compromise of human rights for all e. Installed LED lights across all offices and branches.
its stakeholders. Customers interest were further f. Use of Video Conferencing (VC) at big offices to
protected with effective implementation of Charter on maximise interactions across the premises without
Customer Rights, Customer Service policy, Customer having to travel between locations, similarly,
Grievance redressal policy and other policies. These conducting recruitment HR interviews through VCs.
policies have been hosted on the website of the Bank
for creating awareness among stakeholders about their g. Designed branch architecture to maximise the use
rights and processes followed by the Bank for its of natural light to the extent possible.
operations.
h. Set a process for double-sided printing as a default
option for printing across locations/offices.
2. How many stakeholder complaints have been
received in the past financial year and what i. Communication is sent to all internal stakeholders
percent was satisfactorily resolved by the on the significance of responsible use of resources at
management ? During the period under review the regular intervals.
Bank has not received any complaint(s) on human
right violation. 1. Does the policy related to Principle 6 cover only
the Company or extends to the Group/Joint
Principle 6: Environment Protection Ventures/Suppliers/Contractors/NGOs/others?
There are several policies that directly and indirectly
The Bank firmly believes that its resources should be focus to ensure adherence of Principle 6.
utilised efficiently, sustainably and optimally. AU Bank
conducts its day-to-day business operations with the The Bank understands its role and while carrying
aim of minimising any harm to the environment. The out its operation, it acts in a socially responsible
Bank is focussed on leveraging the digital innovation in manner to address the environmental concern and
banking to reduce the usage of paper, ensuring efficient continue to enhance the value for the society and in
usage of electric & other resources and better waste the community in which it operates. The Bank, through
management. The Bank’s CSR focus, in line with its CSR its CSR initiatives support initiatives that protect
Policy, also includes environmental sustainability, environment directly and through implementing
wherein the Bank directly or through its implementation partners. Under SEMS management, the Bank
partners, works on several positive initiatives for refrains from financing any activity that is operating
sustainable impact. in contravention of applicable environmental laws.
Through its Social and Environmental Management System,
The Bank endeavours to create awareness among its
the Bank operates in a responsible manner and strives to
vendors, suppliers about the policies that governs the
ensure effective social & environmental management
practices in all activities and services with special focus
on the following:
174|
Bank and the compliance to be ensured in this regard. generated and discharged are within the permissible
Corporate
The Bank also promote vendors to adopt environment limits of laws applicable.
friendly measures in their operations.
7. Number of show cause/legal notices received from
2. Does the Company have strategies/initiatives CPCB/SPCB which are pending (i.e. not resolved to
to address global environmental issues such as satisfaction) as on end of Financial Year.
climate change, global warming, etc.? Y/N. If Nil.
yes, please give hyperlink for web page etc.
No Principle 7 – Businesses, When Engaged in
Influencing Public and Regulatory Policy,
3. Does the Company identify and assess potential Should do so in a Responsible Manner.
environmental risks? Y/N
AU Bank regularly engages with multiple regulatory
Statutory
Yes. The Bank assesses its environmental risk in
agencies, associations, organisations, management
multiple ways. It has implemented social environment
institutes, and others. The Bank also participates in
and management system and a fair practice code,
several thought leadership and brainstorming workshops
which helps the Bank to assess the potential
to upgrade its understanding on all critical matters.
environmental risks in its operations covering loans
Compliance and secretarial function of the Bank keeps
and banking transactions of the customers. Being
disseminating the important RBI, SEBI and other critical
custodian of the public deposits, the Bank continue to
industry and regulatory circulars, updates on a regular
follow a stringent approach in lending & investment
basis to ensure the Bank’s operations are run in
operations, thereby protecting the potential risk in
accordance with regulatory framework.
the sector in which it operates.
In discussion with management requisite
4. Does the Company have any project related to
representations are made at appropriate forum to address
Financial
Clean Development Mechanism? If so, provide
the industrywide issues and issues of common
details thereof, in about 50 words or so. Also, if
importance and thus, develop policies that are beneficial
Yes, whether any environmental compliance
to the Bank as well as its stakeholders.
report is filed?
Being a banking company and nature of operations
1. Is your Company a member of any trade and
comprising financial services, this information is
not applicable.
chamber or association? If Yes, Name only those
major ones that your business deals with:
1. Confederation of Indian Industry (CII)
5. Has the Company undertaken any other initiatives
2. Indian Banks Association (IBA)
on clean technology, energy efficiency, renewable
3. Indian Institute of Banking and Finance (IIBF)
energy, etc. Y/N. If yes, please give hyperlink for
4. Society of Indian Automobile Manufactures (SIAM)
web page etc?
Energy efficiency and conservation is a part of our 5. National Critical Information Infrastructure
business planning. The Bank’s systems and Protection Centre (NCIIPC)
processes are designed in manner to ensure optimum 6. Fixed Income Money Market and Derivatives
energy usage by continuous monitoring of all forms of Association of India (FIMMDA)
energy and augmenting the efficiency of operations.
2. Have you advocated/lobbied through above
The Bank’s branches and offices are designed in a associations for the advancement or
manner to ensure maximum utilisation of day light, improvement of public good?
resulting in reduced consumption of electricity. No.
Moreover, it procures star rated electric
equipments, auto monitors, auto switch timers and Principle 8 – Corporate Social Responsibility
LED lights are installed for cost efficient operations in Inclusive Growth and Equitable Development
the Bank.
The Corporate Social Responsibility Policy (CSR Policy) of
6. Are the emissions/waste generated by the the Bank sets out the broad framework for guidance on
Company within the permissible limits given by the Bank’s CSR activities and long-term approach around
it. The Policy also sets out the principles and the rules that
CPCB/SPCB for the financial year being reported?
need to be adhered to while taking up and implementing
Being a banking company and nature of operations
CSR activities to be undertaken as specified in Schedule
comprising financial services this information is not
substantial. However adequate measures are being VII of the Companies Act, 2013 (excluding the activities
put in place to ensure that emissions and waste pursued in the normal course of business) and the
expenditure thereon.
Annual Report 2018-

The report on Corporate Social Responsibility has been
attached as Annexure II of the Board’s report and can be 4. What is your Company’s direct contribution to
referred for the content to this principle. community development projects amount in INR
and the details of the projects undertaken?
1. Does the Company have specified programmes/ This is covered in detail under the Corporate Social
initiatives/projects in pursuit of the policy related Responsibility report of the Bank forming part of
to Principle 8? If yes details thereof? Annexure II to this Annual Report.
The Bank is committed towards the improvement
of communities and complements it with its efforts 5. Have you taken steps to ensure that this
by focussing on the development activities as per community development initiative is
local and national level priorities. To ensure that its successfully adopted by the community?
initiatives are aligned with the overall CSR objectives, The Bank has undertaken several initiatives
the Bank has identified the following core focus for promoting sustainable community
areas for its CSR: development initiatives.
• Financial Inclusion through Livelihood Enhancement AU Bank is incorporating ways and means to
& Vocational Skill training; permeate the successful adoption of its community
development initiatives and it is adopted positively by
• Sports for Development. community.
• Educating society at large through Financial & Digital
literacy. Principle 9: Businesses Should Engage with and
Provide Value to their Customers and Consumers
The Bank has CSR policy and CSR committee in in a Responsible Manner
place wherein social development programme
projects and priorities are decided and implemented. Customer centricity is one of the key pillars of AU Dharma.
Customers being at the focal point for organisation,
The detailed description is available in the CSR report always have significant impact on the growth of any
section of the annual report. organisation. To provide value to its customers, the Bank
has adopted a robust mechanism and has formed several
2. Are the programmes/projects undertaken through customer-centric policies with an array of basic consumer
in-house team/own foundation/external NGO/ services to redressal mechanism.
government structures/any other organisation?
Programmes are undertaken by the Bank on its own At AU Bank, our mission goes beyond customer servicing
and its foundation i.e. ‘AU Foundation’, along with and we only aim for customer delight and going beyond
other credible implementing agencies. their imagination. The focus has always been on
offering simple, easily accessible, cost-effective
3. Have you done any impact assessment of your technological solution to our valued customers. The
initiative? Bank strives on effective communication of unique
Yes, at periodic intervals, CSR Committee and Board features of its products that cater to the differentiated
of the Bank is presented with progress and impact of requirements of customers through one-on-one meeting
key CSR initiatives undertaken under Schedule VII of with customers, brochures at branches and information
the Companies Act, 2013. CSR initiatives undertaken on the website.
by the Bank is covered under the Corporate Social
Responsibility section of the Annual Report. AU Bank’s deep customer centricity is reflected through its
uniquely designed product features viz. monthly interest
pay-outs, minimal paper work, digital onboarding, true
anywhere banking, and others. Besides, our extended
banking hours, multiple engagement channels including
176|
mobile and digital banking that allow greater freedom, • Key applicable conditions are shared with customers
Corporate
flexibility and choice to our customers. at the time of account opening as MITC (Most
Important Terms & Conditions) and
1. What percentage of customer complaints/
• Any changes are shared via email/SMS/physical
consumer cases are pending as on the end of
communications.
financial year?
For the FY 2018-19, the Bank has resolved 97 3. Is there any case filed by any stakeholder
% of complaints. against the Company regarding unfair trade
practices, irresponsible advertising and/or anti-
2. Does the Company display product information competitive behaviour during the last five years
on the product label, over and above what is and pending as on end of financial year? If so,
mandated as per local laws? Yes/No/N.A. Remarks provide details thereof, in about 50 words or
Statutory
(additional information) so.
As a Bank our products are intangible, thus product No cases are pending as on the end of the financial
label requirement is not applicable to us. We promptly year pertaining to unfair trade practices, irresponsible
communicate all the features, charges, terms and advertising and/or anti-competitive behaviour
conditions for all of products and services to our during the preceding five years.
customers through:
4. Did your Company carry out any consumer
• Detailed on welcome letter/receipts to customers survey/consumer satisfaction trends?
The Bank is exploring agencies for conducting annual
• Display on website, at branches via collaterals and
consumer survey/consumer satisfaction trends.
notice boards;
For the FY 2018-19 the Bank has not conducted any
consumer survey.
Financial
Annual Report 2018-

Independent Auditor’s Report
To accordance with the ‘Code of Ethics’ issued by the Institute
The Members of AU Small Finance Bank Limited of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of
the financial statements under the provisions of the Act
REPORT ON THE AUDIT OF THE FINANCIAL
and the Rules thereunder, and we have fulfilled our
STATEMENTS
other ethical responsibilities in accordance with these
Opinion requirements and the Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and
We have audited the accompanying financial statements of appropriate to provide a basis for our audit opinion on
AU Small Finance Bank Limited (“the Bank”), which
the financial statements.
comprise the Balance sheet as at March 31, 2019, the
Profit and Loss Account, the Cash Flow Statement for the
Key Audit Matters
year then ended, and notes to the financial statements,
including a summary of significant accounting policies and Key audit matters are those matters that, in our
other explanatory information. professional judgment, were of most significance in our
audit of the financial statements for the financial year
In our opinion and to the best of our information and ended March 31, 2019. These matters were addressed in
according to the explanations given to us, the aforesaid the context of our audit of the financial statements as a
financial statements give the information required by whole, and in forming our opinion thereon, and we do
the Banking Regulation Act, 1949 and the Companies not provide a separate opinion on these matters. For each
Act, 2013, as amended (“the Act”) in the manner so matter below, our description of how our audit
required for the banking companies and give a true and addressed the matter is provided in that context.
fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the We have determined the matters described below to be
Bank as at March 31, 2019, its profit and its cash flows the key audit matters to be communicated in our report.
for the year ended on that date. We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the financial
Basis for Opinion statements section of our report, including in relation
to these matters. Accordingly, our audit included the
We conducted our audit of the financial statements in
performance of procedures designed to respond to our
accordance with the Standards on Auditing (SAs), as
assessment of the risks of material misstatement of the
specified under section 143(10) of the Act. Our
financial statements. The results of our audit
responsibilities under those Standards are further
procedures, including the procedures performed to
described in the ‘Auditor’s Responsibilities for the Audit
address the matters below, provide the basis for our
of the Financial Statements’ section of our report. We
audit opinion on the accompanying financial statements.
are independent of the Bank in
178|
Corporate
Key audit matters How our audit addressed the key audit matter
(a) Identification of Non Performing Advances and provisioning for Advances (Refer Schedule 17.4 to the financial statements)
Loans and advances constitute a major portion of the Bank’s • Our audit procedures included considering the Bank’s accounting
assets and the quality of the Bank’s loan portfolio is policies for NPA identification and provisioning and assessing
measured in terms of the proportion of non-performing compliance with the prudential norms prescribed by the
assets (NPAs) to the total loans and advances. As at March RBI (IRAC Norms).
31, 2019, the Bank has reported total gross loans and • Tested the operating effectiveness of the controls (including
advances of ` 22,994 crores (March 31, 2018: ` 13,412 application and IT dependent controls) for appropriate classification
crores), gross non-performing
of loans in the respective asset classes viz., standard, sub-standard,
advances of ` 470 crores (March 31, 2018: ` 270 crores)
doubtful and loss with reference to IRAC norms at every month
and a corresponding provision for non-performing
end.
advances of
` 176 crores (March 31, 2018: ` 100 crores). • Performed test of details to verify whether the provisioning rates
applied for respective asset classes were in accordance with the
Identification and provisioning of NPAs is governed by the
Statutory
Bank’s accounting policies and assessed the reasonableness of
prudential norms prescribed by the Reserve Bank of India
the rates used by the management wherever such rates were
(RBI). These norms prescribe several criteria for a loan to be
higher than the minimum rates prescribed by RBI.
classified as a NPA including overdue aging.
• Performed inquiries with the credit and risk departments to
Given the volume and variety of loans, judgement is involved
ascertain if there were indicators of stress or an occurrence of an
in the application of RBI norms for classification of loans as
event of default in a particular loan account or any product
NPA and in view of the significance of this area to the overall
category which need to be considered as NPA. Examined the
audit of financial statements, it has been considered as a
early warning reports generated by the Bank’s credit team on a
key audit matter.
monthly basis to identify loan accounts with performance issues.
• Considered the special mention accounts (SMA) reports submitted
by the Bank to the RBI’s central repository of information on large
credits (CRILC) to assess whether any accounts from such reporting
Financial
need to be considered as non-performing.
• Tested the Bank’s controls to identify loan accounts of a common
borrower to ensure all facilities availed by a delinquent customer are
classified appropriately. Performed analytical procedures on various
financial and non-financial parameters to test the completeness
of accounts identified as NPA.
• Tested the arithmetical accuracy of computation of
provision for Advances.
(b) IT systems and controls • For testing the IT general controls, application controls and IT
As a newly set-up small finance bank there has been a major dependent manual controls, we included specialized IT auditors
enhancement in the information technology (IT) as part of our audit team. The specialized team also assisted in
infrastructure of the Bank in the previous year. During the testing the accuracy of the information produced by the Bank’s IT
current year, as the IT systems and processes continue to systems.
mature in view of the evolving business and regulatory
• We tested the design and operating effectiveness of the Bank’s IT
landscape, frequent changes in the technology
access controls over the information systems that are critical to
environment have been carried out by the Bank.
financial reporting.
The IT infrastructure is critical for smooth functioning of
• We tested IT general controls (logical access, changes management
the Bank’s business operations as well as for timely and
and aspects of IT operational controls). This included testing
accurate financial reporting. Accordingly, the Bank has
that requests for access to systems were appropriately reviewed
continued to invest in its IT infrastructure in the current year
and authorized.
as well.
• We tested the Bank’s periodic review of access rights. We inspected
Due to the pervasive nature and complexity of the IT
requests of changes to systems for appropriate approval and
environment and considering that several systems and
authorization. We considered the control environment relating to
process have been implemented in recent past, and as a
various interfaces, configuration and other application controls
result the IT control environment may not have matured, it is
identified as key to our audit.
considered a key audit matter.
• In addition to the above, we tested the design and operating
Our areas of audit focus included user access
effectiveness of certain automated controls that were considered as
management, developer access to the production
key internal controls over financial reporting.
environment and changes to the IT environment. These are
key to ensuring IT dependent and application based controls • Where deficiencies were identified, we tested compensating controls
are operating effectively. or performed alternate procedures.
Annual Report 2018-

Information Other than the Financial Statements
and Auditor’s Report Thereon as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern
The Bank’s Board of Directors is responsible for the basis of accounting unless management either intends
other information. The other information comprises to liquidate the Bank or to cease operations, or has no
the information included in the Annual report, but does realistic alternative but to do so.
not include the financial statements and our auditor’s
report thereon. Those Charged with Governance are also responsible for
overseeing the Bank’s financial reporting process.
Our opinion on the financial statements does not cover
the other information and we do not express any form Auditor’s Responsibilities for the Audit of the
of assurance conclusion thereon. Financial Statements
In connection with our audit of the financial statements, Our objectives are to obtain reasonable assurance about
our responsibility is to read the other information and, in whether the financial statements as a whole are free from
doing so, consider whether such other information is material misstatement, whether due to fraud or error,
materially inconsistent with the financial statements or our and to issue an auditor’s report that includes our
knowledge obtained in the audit or otherwise appears to opinion. Reasonable assurance is a high level of
be materially misstated. If, based on the work we have assurance, but is not a guarantee that an audit
performed, we conclude that there is a material conducted in accordance with SAs will always detect a
misstatement of this other information, we are required material misstatement when it exists. Misstatements can
to report that fact. We have nothing to report in this arise from fraud or error and are considered material if,
regard. individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users
Responsibilities of Management and the Board taken on the basis of these financial statements.
of
As part of an audit in accordance with SAs, we exercise
Directors for the Financial Statements
professional judgment and maintain professional
The Bank’s Board of Directors is responsible for the skepticism throughout the audit. We also:
matters stated in section 134(5) of the Act with respect
to the preparation of these financial statements that give • Identify and assess the risks of material misstatement of
a true and fair view of the financial position, financial the financial statements, whether due to fraud or
performance, cash flows of the Bank in accordance with error, design and perform audit procedures responsive
the provisions of Section 29 of the Banking Regulation Act, to those risks, and obtain audit evidence that is
1949, accounting principles generally accepted in India, sufficient and appropriate to provide a basis for our
including the Accounting Standards specified under section opinion. The risk of not detecting a material
133 of the Act read with Rule 7 of the Companies misstatement resulting from fraud is higher than for
(Accounts) Rules, 2014 in so far as they apply to the one resulting from error, as fraud may involve collusion,
Bank provision of section 29 of the Banking Regulation forgery, intentional omissions, misrepresentations, or
Act, 1949 and the circulars, guidelines and directions the override of internal control.
issued by Reserve Bank of India (“RBI”) from time to time.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
This responsibility also includes maintenance of
are appropriate in the circumstances. Under section
adequate accounting records in accordance with the
143(3)(i) of the Act, we are also responsible for
provisions of the Act for safeguarding of the assets of
expressing our opinion on whether the Bank has
the Bank and for preventing and detecting frauds and
adequate internal financial controls system in place
other irregularities; selection and application of
and the operating effectiveness of such controls.
appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the • Evaluate the appropriateness of accounting policies used
design, implementation and maintenance of adequate and the reasonableness of accounting estimates and
internal financial controls, that were operating effectively related disclosures made by management.
for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and • Conclude on the appropriateness of management’s use
presentation of the financial statements that give a true of the going concern basis of accounting and, based on
and fair view and are free from material misstatement, the audit evidence obtained, whether a material
whether due to fraud or error. 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
In preparing the financial statements, management is
material uncertainty
responsible for assessing the Bank’s ability to continue
180|
audit and have found them to be satisfactory;

exists, we are required to draw attention in our auditor’s
report to the related disclosures in the 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 financial statements, including the disclosures,
and whether the 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 financial statements
for the financial year ended March 31, 2019 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.
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 read with the Companies (Accounting
Standards) Rules, 2006 (as amended) specified under
section 133 of the Act, read with the Companies
(Accounts) Rules, 2014.
2. As required sub section (3) of section 30 of the

Banking Regulation Act, 1949 and the appointment
letter dated September 20, 2018, 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
Annual Report 2018-

(1) of the Banking Regulation Act, 1949; and
b. The transactions of the Bank, which
have come to our notice, have
Corporate
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 22 branches for the purpose of
our audit.
3. As required by Section 143(3) of the Act, we report
Statutory
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 Balance Sheet, the Profit and Loss

Account, the Cash Flow Statement
Financial
dealt with by this Report are in
agreement with the books of account;
d. In our opinion, the aforesaid financial

statements comply with the
Companies (Accounting Standards)
Rules, 2006 (as amended) specified
under section 133 of the Act, read
with the Companies (Accounts)
Rules, 2014 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, 2019 taken
on record by the Board of Directors,
none of the directors is disqualified
as on March 31, 2019 from being
appointed as a director in terms of
Section 164 (2) of the Act;
f. With respect to the adequacy of the

internal financial controls over
financial reporting of the Bank with
reference to these financial
statements and the operating
effectiveness of such controls, refer to
our separate Report in “Annexure
1” to this report;
g. In our opinion, the entity being a

banking company, the remuneration
to the whole-time director during the
year ended March 31, 2019 has
been paid by the Bank in accordance
with the provisions of Section 35B
180|
h. With respect to the other matters to be

iii. There were no amounts which were
included in the Auditor’s Report in accordance
required to be transferred to the Investor
with Rule 11 of the Companies (Audit and
Education and Protection Fund by the Bank.
Auditors) Rules, 2014, as amended in our
opinion and to the best of our information and
according to the explanations given to us: For S. R. Batliboi & Associates LLP
i. The Bank has disclosed the impact of Firm’s Registration No.: 101049W/E300004
pending litigations on its financial position in
its financial statements – Refer Note per Amit Kabra
Schedule 12, Schedule 17.I and Schedule 18A Partner
– Note 32 to the financial statements; Membership No.: 094533
ii. The Bank did not have any long-term Place: Jaipur
contracts, including derivative contracts, Date: April 22, 2019
for which there were any material
foreseeable losses;
Annexure 1
to the Independent Auditor’s Report of Even Date on the Financial Statements of AU Small Finance Bank Limited
Report on the Internal Financial Controls under Clause

preparation of reliable financial information, as required
(i) of Sub-section 3 of Section 143 of the Companies Act,
under the Companies Act, 2013.
2013 (the “Act”)
AUDITOR’S RESPONSIBILITY
TO THE MEMBERS OF AU SMALL FINANCE BANK
LIMITED Our responsibility is to express an opinion on the Bank’s
internal financial controls over financial reporting based
We have audited the internal financial controls over
on our audit. We conducted our audit in accordance
financial reporting of AU Small Finance Bank Limited
with the Guidance Note on Audit of Internal Financial
(the “Bank”) as of March 31, 2019 in conjunction with
Controls Over Financial Reporting (the “Guidance Note”)
our audit of the financial statements of the Bank for the
and the Standards on Auditing as specified under section
year ended on that date.
143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both
MANAGEMENT’S RESPONSIBILITY FOR INTERNAL applicable to an audit of Internal Financial Controls and,
FINANCIAL CONTROLS both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require
The Bank’s Management is responsible for establishing
that we comply with ethical requirements and plan and
and maintaining internal financial controls based on the
perform the audit to obtain reasonable assurance about
internal control over financial reporting criteria established
whether adequate internal financial controls over
by the Bank considering the essential components of
financial reporting was established and maintained and if
internal control stated in the Guidance Note on Audit
such controls operated effectively in all material respects.
of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of
Our audit involves performing procedures to obtain
India. These responsibilities include the design,
audit evidence about the adequacy of the internal
implementation and maintenance of adequate internal
financial controls system over financial reporting and their
financial controls that were operating effectively for
operating effectiveness. Our audit of internal financial
ensuring the orderly and efficient conduct of its
controls over financial reporting included obtaining an
business, including adherence to the Bank’s policies, the
understanding of internal financial controls over financial
safeguarding of its assets, the prevention and detection
reporting, assessing the risk that a material weakness
of frauds and errors, the accuracy and completeness of
exists, and testing and evaluating the design and
the accounting records, and the timely
operating effectiveness of
Annual Report 2018-

internal control based on the assessed risk. The INHERENT LIMITATIONS OF INTERNAL FINANCIAL
Corporate
procedures selected depend on the auditor’s judgement, CONTROLS OVER FINANCIAL REPORTING
including the assessment of the risks of material
Because of the inherent limitations of internal financial
misstatement of the financial statements, whether due to
controls over financial reporting, including the possibility
fraud or error.
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur
We believe that the audit evidence we have obtained is
and not be detected. Also, projections of any evaluation
sufficient and appropriate to provide a basis for our
of the internal financial controls over financial reporting
audit opinion on the internal financial controls system
to future periods are subject to the risk that the internal
over financial reporting.
financial control over financial reporting may become
inadequate because of changes in conditions, or that
MEANING OF INTERNAL FINANCIAL CONTROLS the degree of compliance with the policies or
Statutory
OVER FINANCIAL REPORTING procedures may deteriorate.
A company’s internal financial control over financial
reporting is a process designed to provide reasonable OPINION
assurance regarding the reliability of financial reporting
In our opinion, the Bank has, in all material respects,
and the preparation of financial statements for external
an adequate internal financial controls system over
purposes in accordance with generally accepted
financial reporting and such internal financial controls
accounting principles. A company’s internal financial
over financial reporting were operating effectively as at
control over financial reporting includes those policies
March 31, 2019, based on the internal control over
and procedures that (1) pertain to the maintenance
financial reporting criteria established by the Bank
of records that, in reasonable detail, accurately and
considering the essential components of internal control
fairly reflect the transactions and dispositions of the
stated in the Guidance Note on Audit of Internal Financial
Financial
assets of the company;
Controls Over Financial Reporting issued by the Institute of
(2) provide reasonable assurance that transactions are
Chartered Accountants of India.
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted
accounting principles, and that receipts and For S. R. Batliboi & Associates LLP
expenditures of the company are being made only in Chartered Accountants
accordance with authorisations of management and Firm’s Registration No.: 101049W/E300004
directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of per Amit Kabra
unauthorised acquisition, use, or disposition of the Partner
company’s assets that could have a material effect on the Membership No.: 094533
financial statements.
Place: Jaipur
Date: April 22, 2019
182|
Balance Sheet
as at March 31, 2019
(` in ‘000)
As at March 31, 2019 As at
Particulars Schedule
March 31, 2018
CAPITAL & LIABILITIES

Capital 1 29,23,575 28,57,036
Money received against Share Warrants 17,50,000 -
Employees stock options outstanding 4,29,435 1,74,959
Reserves & Surplus 2 2,65,25,899 1,97,79,832
Deposits 3 19,42,24,356 7,92,33,193
Borrowings 4 8,61,33,587 7,63,88,647
Other Liabilities and Provisions 5 1,42,41,113 98,94,060
Total 32,62,27,965 18,83,27,727
ASSETS
Cash and Balances with Reserve Bank of India 6 81,11,424 49,21,236
Balances with banks and Money at Call and Short Notice 7 92,90,510 1,26,90,951
Investments 8 7,16,16,711 3,05,05,944
Advances 9 22,81,87,308 13,31,21,307
Fixed Assets 10 44,70,300 38,60,867
Other Assets 11 45,51,712 32,27,422
Total 32,62,27,965 18,83,27,727
Contingent Liabilities 12 50,21,437 51,60,692
Bills for Collection - -
Significant accounting policies and notes to accounts forming part of 17 & 18
financial statements
The Schedules referred to above form an integral part of the Balance Sheet.
As per our attached Report of even date.
For S. R. Batliboi & Associates LLP For and on behalf of the Board of Directors
Chartered Accountants AU Small Finance Bank Limited
ICAI Firm Registration No.: 101049W/E300004 (Formerly Au Financiers (India) Limited)
Mannil Venugopalan Sanjay Agarwal

(Non-Executive Independent (Managing Director and CEO)
per Amit Kabra Part Time Chairman) DIN: 00009526
Partner DIN: 00255575
Membership No. 094533
Uttam Tibrewal Deepak Jain
(Whole Time Director) (Chief Financial
Officer) DIN: 01024940
Place: Jaipur Manmohan Parnami

Date : April 22, 2019 (Company Secretary)
Annual Report 2018-

Profit and Loss Account
Corporate
for the year ended March 31, 2019
(` in ‘000)
Particulars Schedule
March 31, 2019 March 31, 2018
I. INCOME
Interest earned 13 2,94,88,354 1,76,71,899
Other income 14 46,20,292 38,80,601
Total Income 3,41,08,646
Statutory
2,15,52,500
II. EXPENDITURE
Interest expended 15 1,60,63,512 82,67,285
Operating expenses 16 1,08,26,075 75,26,092
Provisions & contingencies (refer note 9- schedule 18A) 34,00,991 28,38,727
Total Expenditure 3,02,90,578 1,86,32,104
III. PROFIT/LOSS
Net profit/ (loss) for the year 38,18,068
29,20,396
Add: Balance in Profit/Loss Account brought forward from previous year 1,36,58,366
1,16,73,069
Total 1,74,76,434
1,45,93,465
IV. APPROPRIATIONS
Transfer to Statutory Reserves 9,54,517
Financial
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 (refer 7,30,099
3,78,000
schedule 2.III) 2,05,000
Transfer to Capital Reserve
27,616
Transfer to Investment Fluctuation Reserve -
2,21,200
Dividend paid (includes tax on dividend) -
1,74,826
Balance carried over to Balance Sheet -
1,57,20,275
Total 1,36,58,366
1,74,76,434
V. EARNING PER SHARE (refer note 5- schedule 18B) 1,45,93,465
Basic (`) 13.16
Diluted (`) 12.90 10.26
Nominal value per share (`) 10.00 10.00
Significant accounting policies and notes to accounts forming part of 10.00
financial statements 17 & 18
The Schedules referred to above form an integral part of the Profit and Loss Account.


184|
Cash Flow Statement

for the year ended on March 31, 2019
(` in ‘000)
Particulars
March 31, 2019 March 31, 2018
CASH FLOW FROM OPERATING ACTIVITIES

Profit after tax 38,18,068 29,20,396
Add: Provision for tax 19,83,232 15,13,083
Net Profit Before Taxes 58,01,300 44,33,479
Adjustments for :-
Employee Stock Options Expense
3,86,039 1,41,263
Depreciation on Bank’s Property
6,17,546 5,32,456
Amortization of Premium on HTM Investments
Provision for Employee Expenses 1,28,310 57,651
Provision for Non Performing Assets, Standard Assets and Other Provisions (36,861) 95,877
Loss/(Profit) on sale of Fixed Assets 11,29,943 9,31,297
Operating profit before working capital changes 14,428 6,041
Movement in working capital 80,40,705 61,98,064
Decrease/ (Increase) in Investments (other than Subsidiaries, Joint Ventures and Other
HTM Investments) (1,94,30,372) 81,94,119
Increase in Advances
Decrease / (Increase) in Other Assets (9,58,18,346) (6,81,75,428)
(Decrease) / Increase in Deposits (13,77,683) (13,23,416)
Increase/ (Decrease) in Other Liabilities and Provisions
11,49,91,163 7,92,33,193
Cash Flow from/ (used in) Operating Activities
40,02,143 24,62,734
Direct Taxes Paid (Net of refunds)
1,04,07,610 2,65,89,266
Net Cash Flow from/ (used in) Operating Activities (A)
(19,29,840) (15,41,584)
84,77,770 2,50,47,682
Cash Flow From Investing Activities
Purchase of Fixed Assets (12,57,168) (16,49,722)
Proceeds from Sale of Fixed Assets 15,761 8,801
Investments in Subsidiaries/ Joint Ventures - -
Sale of investment in subsidiaries / associate (net of related expenses) - -
Investments in HTM securities (2,18,04,530) (1,72,54,572)
Dividend from Subsidiaries/ Joint Ventures - -
Net cash flow from/ (used in) Investing Activities (B) (2,30,45,937) (1,88,95,493)
Annual Report 2018-

Cash Flow Statement
Corporate
for the year ended on March 31, 2019
(` in ‘000)
Particulars
March 31, 2019 March 31, 2018
CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 97,44,940 51,89,793
Money received on exercise of Stock Options/Issue of Shares 30,70,937 32,523
Money received against Share Warrants 17,50,000 -
Statutory
Share/Debenture Issue Expenses (33,137) (11,875)
Dividend paid (includes tax on dividend) (1,74,826) -
Net cash flow from/ (used in) in Financing Activities (C) 1,43,57,914 52,10,441
Net Increase in Cash And Cash Equivalents (A + B + C) (2,10,253) 1,13,62,630
Cash and Cash Equivalents at the beginning of the year (Refer Note Below) 1,76,12,187 62,49,557
Cash and Cash Equivalents at the end of the year (Refer Note Below) 1,74,01,934 1,76,12,187
Note:
Balance with Banks in India in Fixed Deposit (As per Sch 7 I (i) (b)) 13,29,729 36,86,181
Balance with Banks in India in Current Account (As per Sch 7 I (i) (a)) 60,781 3,55,731
Money at Call and Short Notice in India (as per Sch 7 I (ii)) 79,00,000 86,49,039
Cash in hand (including foreign currency notes) (As per Sch 6 I) 11,59,935 9,24,148
Financial
Balance with RBI in Current Accounts (As per Sch 6 II) 69,51,489 39,97,088
Cash and Cash Equivalents at the end of the year 1,74,01,934 1,76,12,187


186|
Schedules
forming part of the Balance Sheet as at March 31, 2019
SCHEDULE 1 : CAPITAL
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
Authorized shares
35,00,00,000 (P.Y. 35,00,00,000) equity shares of ` 10/- each 35,00,000 35,00,000
Issued Subscribed and paid up capital
I. 28,57,03,620 equity shares of ` 10/- each (March 31, 2018: 28,42,50,906 equity shares) 28,57,036 28,42,509
II. Add: 23,23,425 equity shares of ` 10/- each (March 31, 2018: 14,52,714 equity share) in 23,234 14,527
pursuant to exercise of employee stock option
III. Add: 43,30,441 equity shares of ` 10/- each (March 31, 2018: Nil) in pursuant to 43,305 -
preferential allotment
Total 29,23,575 28,57,036
SCHEDULE 2 : RESERVES AND SURPLUS
(` in ‘000)
Particulars As at March 31, 2019
As at
March 31, 2018
I. Statutory Reserve
Opening Balance* 36,48,985 29,18,886
Additions during the year under the Banking Regulation Act, 1949 9,54,517 7,30,099
Deductions during the year - -
Sub-Total 46,03,502 36,48,985
*Opening balance of Statutory Reserve as at March 31, 2018 represents transfer of twenty percent of net profit after tax in accordance with the
provision of Section 45-IC of Reserve Bank of India Act, 1934 pursuant to NBFC Regulations.
II. Share Premium

Opening Balance 22,67,481 23,79,938
Add: Allotment of equity shares 31,35,961 45,823
Less: Utilised for debenture redemption premium / issue expenses (net of tax) - 1,58,280
Less: Utilised for share issue expenses (net of tax) 33,136 -
Sub-Total 53,70,306 22,67,481
III. Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961
Opening Balance 2,05,000 -
Additions during the year 3,78,000 2,05,000
Sub-Total 5,83,000 2,05,000
IV. Capital Reserve
Opening Balance - -
Additions during the year 27,616 -
Sub-Total 27,616 -
Annual Report 2018-

Schedules
Corporate
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
Investment Fluctuation Reserve
Opening Balance
Additions during the year -- 2,21,200-
Deductions during the year --
Sub-Total 2,21,200-
Balance in Profit and Loss Account
Statutory
Balance in Profit and Loss Account 1,57,20,2751,36,58,366
Sub-Total 1,57,20,2751,36,58,366
Total 2,65,25,8991,97,79,832
SCHEDULE 3 : DEPOSITS
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
Financial
A.I Demand Deposits
(i) From Banks 5,83,330 3,19,779
(ii) From Others 1,02,33,214 35,98,196
Sub-Total 1,08,16,544 39,17,975
A.II Savings Bank Deposits 2,50,84,367 1,74,16,874
A.III Term Deposits
(i) From Banks 3,59,04,650 1,84,40,782
(ii) From Others 12,24,18,795 3,94,57,562
Sub- Total 15,83,23,445 5,78,98,344
Total 19,42,24,356 7,92,33,193
B.I Deposits of branches in India 19,42,24,356 7,92,33,193
B.II Deposits of branches outside India -
-
Total 19,42,24,356
7,92,33,193
SCHEDULE 4 : BORROWINGS
(` in ‘000)
Particulars As at March 31, 2019 As at
March 31, 2018
I. Borrowings in India
(i) Reserve Bank of India 27,50,000 -
(ii) Other Banks 93,47,147 93,33,112
(iii) Other Institutions and Agencies 7,40,36,440 6,70,55,535
Sub-Total 8,61,33,587 7,63,88,647
II. Borrowings outside India - -
Total 8,61,33,587 7,63,88,647
Secured Borrowings other than CBLO and Repo Borrowings included in I above 6,02,99,781 4,77,66,082
Tier II Debt included in I above 72,00,000 27,50,000
Tier II Debt included in II above - -
188|
Schedules
SCHEDULE 5 : OTHER LIABILITIES AND PROVISIONS
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. Bills Payable 3,80,964 5,45,944

II Inter-office adjustments (net) - -
III. Interest Accrued 39,28,987 24,46,418
IV. Provision for Taxation 1,23,378 -
V. Standard Asset provision (refer note 4.6 - schedule 18A) 9,32,063 5,64,000
VI. Others (including Provisions) 88,75,721 63,37,698
Total 1,42,41,113 98,94,060
SCHEDULE 6 : CASH AND BALANCES WITH RESERVE BANK OF INDIA
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. Cash in Hand 11,59,935 9,24,148

(including Foreign Currency Notes - NIL)
II. Balances with Reserve Bank of India
a. in Current Account 69,51,489 39,97,088
b. in Other Account - -
Total 81,11,424 49,21,236
SCHEDULE 7 : BALANCES WITH BANKS & MONEY AT CALL & SHORT NOTICE
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. In India
i) Balances with banks in
(a) Current Accounts 60,781 3,55,731
(b) Other Deposit Accounts 13,29,729 36,86,181
ii) Money at call and short
(a) with Banks 65,00,000
79,00,000
(b) with Other Institutions 21,49,039
-
Sub-Total 92,90,510 1,26,90,951
II. Outside India
i) in Current Accounts - -
ii) in Other Deposit Accounts - -
iii) in Money at Call and Short Notice - -
Sub-Total - -
Total 92,90,510 1,26,90,951
Annual Report 2018-

Schedules
Corporate
SCHEDULE 8 : INVESTMENTS
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. Investments in India in (net of Provision)

i) Government Securities 4,85,77,966 2,23,89,212
Statutory
ii) Other Approved Securities - -
iii) Shares 9,72,054 4,49,764
iv) Debentures and Bonds 52,11,308 11,06,124
v) Subsidiaries and /or Joint Venture - -
vi) Others [Units, Certificate of Deposits (CD), Commercial Paper (CP), 1,68,55,383 65,60,844
Pass Through Certificates (PTC)]
Sub-Total 7,16,16,711 3,05,05,944
II. Investments outside India (net of provision) - -
Total 7,16,16,711 3,05,05,944
SCHEDULE 9 : ADVANCES
(` in ‘000)
Financial
As at As at
Particulars
March 31, 2019 March 31, 2018
A i) Bills Purchased and Discounted 40,132 3,750

ii) Cash Credits Overdrafts and Loans repayable on Demand 2,69,63,986 1,51,08,760
iii) Term loans 20,11,83,190 11,80,08,797
Total 22,81,87,308 13,31,21,307
B i) Secured by Tangible Assets (includes advances against Book debts) 22,10,37,413 12,92,98,131
ii) Covered by Bank / Government Guarantees (includes Advance to Banks) 49,227 3,750
iii) Unsecured 71,00,668 38,19,426
Total 22,81,87,308 13,31,21,307
C. I Advances in India
i) Priority Sectors* 16,18,83,819 9,26,80,087
ii) Public Sector 1,21,199 1,24,681
iii) Banks 34,74,960 3,07,181
iv) Others 6,27,07,330 4,00,09,358
Total 22,81,87,308 13,31,21,307
C. II Advances outside India - -
Total 22,81,87,308 13,31,21,307
*Priority sectors includes ` 5,331.75 crore (previous year : ` 7,806.25 crore), in respect of which the Bank has sold Priority Sector Lending
Certificates (PSLC). During the year ended March 31, 2019, the Bank has bought PSLC amounting ` 7,470.00 crore (previous year : ` Nil), which
is not included in above.
SCHEDULE 10 : FIXED ASSETS

(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. Premises (including Land)

Gross Block
At Cost as on 31st March of the preceding year 96,129 96,129
Additions during the year 4,91,315 -
Sub-Total 5,87,444 96,129
190|
Schedules
SCHEDULE 10 : FIXED ASSETS (CONTD.)

(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
Depreciation
As at 31st March of the preceding year 10,789 9,582
Add: charge during the year 4,662 1,207
Sub-Total 15,451 10,789
Net Block 5,71,993 85,340
II. Other Fixed Assets (including Furniture & Fixtures)
Gross Block
At Cost as on 31st March of the preceding year 45,17,467
5,62,150
Additions during the year 7,49,403
39,91,287
Deductions during the year 88,085
Sub-Total 51,78,785 35,970
Depreciation 45,17,467
As at 31st March of the preceding year 7,99,026
Add: charge during the year 6,12,885 2,88,904
Deductions during the year 57,896 5,31,250
Sub-Total 13,54,015 21,128
Net Block 38,24,770 7,99,026
III. Capital Work in Progress 73,537 37,18,441
Total 44,70,300 57,086
38,60,867
SCHEDULE 11 : OTHER ASSETS

(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
i) Inter-Office Adjustment (Net) - -

ii) Interest Accrued 25,97,211 12,54,340
iii) Tax paid in Advance / Tax Deducted at Sources (Net of Provisions) 1,00,684 1,32,197
iv) Deferred Tax Assets (Net) 1,09,466 1,37,085
v) Advance for expenses 1,04,809 1,05,057
vi) Security Deposits 2,48,225 2,22,212
vii) Others 13,91,317 13,76,531
Total 45,51,712 32,27,422
SCHEDULE 12 : CONTINGENT LIABILITIES
(` in ‘000)
As at As at
Particulars
March 31, 2019 March 31, 2018
I. Claims against the Bank not acknowledged as Debts 4,56,490 3,37,534

II. Guarantees given on behalf of Constituents
a) In India 16,75,157 11,48,324
b) Outside India - -
III. Acceptances Endorsements and Other Obligation 2,42,312 88,382
IV. Other items for which the Bank is Contingently Liable
(a) Credit enhancements provided by the Bank towards assets assignment/securitisation
23,96,530 32,26,228
(b) Capital commitments not provided
1,46,909 2,76,633
(c) Other Guarantees
Annual Report 2018-

1,04,039 83,591
Total 50,21,437 51,60,692
192|
Schedules
Corporate
forming part of the Profit and Loss Account for the Year Ended March 31, 2019
SCHEDULE 13 : INTEREST EARNED
(` in ‘000)
Particulars
March 31, 2019 March 31, 2018
I. Interest / Discount on Advances / Bills 2,34,80,144 1,24,27,687

II. Income on Investments 27,40,873 12,84,550
III. Interest on Balances with RBI and Other Inter-Bank Funds 4,60,699 4,16,664
IV. Others 28,06,638 35,42,998
Statutory
Total 2,94,88,354 1,76,71,899
SCHEDULE 14 : OTHER INCOME
(` in ‘000)
Particulars Year Ended March 31, 2019 Year Ended
March 31, 2018
I. Commission Exchange and Brokerage 31,82,389 16,44,288

II. Profit / (Loss) on sale of Investments (net) 2,21,200 3,82,051
III. Profit / (Loss) on sale of Land Building & Other Assets (net) (14,428) (6,041)
Financial
IV. Income earned by way of Dividends etc. from subsidiaries / associates and / or others in - -
India
V. Miscellaneous Income (refer note 47- schedule 18A) 12,31,131 18,60,303
Total 46,20,292 38,80,601
SCHEDULE 15 : INTEREST EXPENDED

(` in ‘000)
Particulars
March 31, 2019 March 31, 2018
I. Interest on Deposits 89,91,397 15,57,478

II. Interest on Reserve Bank of India /Inter Bank Borrowings 6,69,882 8,82,737
III. Others 64,02,233 58,27,070
Total 1,60,63,512 82,67,285
SCHEDULE 16 : OPERATING EXPENSES
(` in ‘000)
Particulars
March 31, 2019 March 31, 2018
I. Payments to and Provision for Employees 60,11,107 42,48,908

II. Rent Taxes and Lighting 7,47,312 7,99,680
III. Printing and Stationery 95,131 1,07,696
IV. Advertisement and Publicity 2,16,900 1,02,207
V. Depreciation on Bank’s Property 6,17,546 5,32,456
VI. Directors' fees- allowances and exp
8,591 7,902
VII. Auditors’ Fee
VIII.Law charges (incl. Professional Fees) 9,998 9,324
IX. Postages Telegrams Telephones etc. 1,65,040 1,21,618
X. Repairs and Maintenance (include AMC) 2,28,051 1,88,975
XI. Insurance 7,60,513 3,94,729
Annual Report 2018-

XII. Direct marketing expenses (Payout expense) 98,357 28,316
XIII. Travelling & Conveyance 6,87,056 4,01,171
XIV.Other Expenditure 3,39,511 2,48,883
8,40,962 3,34,227
Total 1,08,26,075 75,26,092
192|
Schedules
forming part of the Financial Statements for the year ended March 31, 2019
SCHEDULE 17: BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
1. Background
3. Use of estimates
AU Small Finance Bank Limited (formerly known as Au
The preparation of the financial statements in
Financiers (India) Limited) (“AUSFBL” or “the Company”
conformity with Indian GAAP as applicable to Banks
or “the Bank”) is a public company domiciled in
requires the Management to make estimates and
India and incorporated under the provisions of the
assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities)
and the reported income and expenses for the
The Company had originally obtained its license from
reporting period. The Management believes that
Reserve Bank of India (‘RBI’) to operate as a non-
the estimates used in preparation of the financial
deposit accepting Non-Banking Financial Company
statements are prudent and reasonable. Actual results
(NBFC-ND) on November 7, 2000 vide certificate of
could differ due to these estimates. Any revision in
registration no. B-10-00139.
the accounting estimates is recognized
prospectively in the current and future periods.
The Company has changed its name to AU Small
Finance Bank Limited with effect from April 13,
2017 and commenced its operations as a Small
4. Significant accounting policies
Finance Bank from April 19, 2017 pursuant to the A. Advances
approval received from the Reserve Bank of India (i) Classification
dated December 20, 2016. Advances are classified as performing assets and
non-performing assets (‘NPAs’) in accordance
The Bank is engaged in providing a range of with the RBI guideline on Income Recognition
banking and financial services including retail and Asset Classification (IRAC). Further, NPAs
banking, wholesale banking and treasury operations are classified into sub-standard, doubtful and
and other services. The Bank operates in India only loss assets based on the criteria stipulated by
and does not have presence in any foreign country. RBI. The advances are stated net of specific
provisions made towards NPAs and unrealised
The Bank is governed by the Banking Regulation interest on NPAs. Interest on NPAs is
Act, 1949, banking guidelines issued by RBI on Small transferred to an interest suspense account
Finance Bank 2016, and the Companies Act, 2013. and not recognised in the Profit and Loss
Account until received.
2. Basis of preparation
(ii) Provisioning
The financial statements have been prepared under
Provision for non-performing advances
the historical cost convention and on the accrual
comprising sub-standard, doubtful and loss
basis of accounting, unless otherwise stated and
assets is made at a minimum in accordance
complying with the requirements prescribed under
with the RBI guidelines. In addition, the Bank
the Third Schedule of the Banking Regulation Act,
considers accelerated specific provisioning that is
1949. The accounting and reporting policies of the
based on past experience, evaluation of security
Bank which is used in the preparation of financial
and other related factors. Specific loan loss
statements conform to Generally Accepted Accounting
provision in respect of non-performing advances
Principles in India (Indian GAAP), the guidelines
are charged to the Profit and Loss Account. Any
issued by RBI from time to time, the accounting
recoveries made by the Bank in case of NPAs
standards notified under section 133 of the
written off are recognised in the Profit and Loss
Companies Act 2013, read together with paragraph
Account.
7 of the Companies (Accounts) Rules 2014,
Companies (Accounting Standards) Amendment
Rules, 2016 in so far as they apply to banks. The
accounting policies adopted in the preparation of the
financial statements are consistent with those
followed in the previous year.
Annual Report 2018-

Schedules
Corporate
SCHEDULE 17: BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
The Bank has applied following provisioning rates:

% of provision as per Bank policy
B. Securitisation and transfer of assets
The Bank securitises out its receivables to
Overdue buckets
(Secured) (Unsecured) Special Purpose Vehicles (‘SPVs’) in securitisation
transactions. Such securitised-out receivables
0-90 As mentioned below are de-recognised in the Balance Sheet when
Statutory
91-180 15% 25% they are sold (true sale criteria as defined in
181-364 30% 30% RBI circular being fully met) and consideration
365-455 60% 60% is received by the Bank. In respect of receivable
456-729 60% 100% pools securitised-out, the Bank provides
>729 100% 100% liquidity and credit enhancements, as specified
Loss asset 100% 100% by the rating agencies, in the form of cash
collaterals
The Bank considers a restructured account as one / guarantees and / or by subordination of cash
where the Bank, for economic or legal reasons flows in line with RBI guidelines. The Bank also
relating to the borrower’s financial difficulty, grants acts as a servicing agent for receivable pools
to the borrower concessions that the Bank would securitised-out.
not otherwise consider. Restructuring would
Financial
normally involve modification of terms of the The Bank enters into transactions for transfer of
advances / securities, which would generally standard assets through the direct
include, among others, alteration of repayment assignment of cash flows, which are similar to
period / repayable amount / the amount of asset-backed securitisation transactions
instalments / rate of interest (due to reasons other through the SPV route, except that such
than competitive reasons). Restructured accounts portfolios of receivables are assigned directly
are classified as such by the Bank only upon to the purchaser and are not represented
approval and implementation of the restructuring by Pass Through Certificates (‘PTCs’).
package. Necessary provision for diminution in the
fair value of a restructured account is made and The RBI issued addendum guidelines on
classification thereof is as per the extant RBI securitisation of standard assets vide its circular
guidelines. dated May 7, 2012. Accordingly, the Bank
does not provide liquidity or credit
In accordance with RBI guidelines, the Bank has enhancements on the direct assignment
provided general provision on standard assets at transactions undertaken subsequent to
these guidelines.
levels stipulated by RBI from time to time - direct The Bank amortises any profit received for every
advances to sectors agricultural and SME at 0.25%, individual securitisation or direct assignment
commercial real estate at 1.00%, restructured transaction based on the method prescribed
standard advances progressively to reach 5.00%, in these guidelines.
commercial real estate-residential housing at 0.75%,
housing loans (which have adequate Loan to Value The Bank enters into transactions for the sale
(LTV) ratio as prescribed by RBI) at 0.25% and for or purchase of Priority Sector Lending
other sectors at 0.40%. Provision made against Certificates (PSLCs). In the case of a sale
standard assets in accordance with RBI guidelines as transaction, the Bank sells the fulfilment of
above is disclosed separately under Other Liabilities priority sector obligation and in the case of a
and not netted off against Advances. purchase transaction the Bank buys the
fulfilment of priority sector obligation through
Provision for unhedged Foreign Currency Exposure of the RBI trading platform. There is no transfer
borrowers is made as per the RBI guidelines. of risks or loan assets. The fee received for
the sale of PSLCs
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Schedules
is recorded as ‘Miscellaneous Income’ and the fee

All investments purchase and sale including
paid for purchase of the PSLCs is recorded as
equity shares are recorded under “Settlement
‘Other Expenditure’ in the Profit and Loss Account.
Date” Accounting.
These are amortised on quarterly basis.
(ii) Acquisition cost
The Bank invests in PTCs issued by other SPVs.
The cost of investments is determined on
These are accounted for at the deal value and are
weighted average basis. Broken period interest
classified as investments. The Bank also buys loans
on debt instruments and government securities
through the direct assignment route which are
are considered as a revenue item. The
classified as advances. These are carried at
transaction costs including brokerage,
acquisition cost unless it is more than the face value,
commission, transaction/settlement charges
in which case the premium is amortised over the
etc. paid at the time of acquisition of
tenor of the loans.
investments are recognised in Profit and Loss
Account.
C. Investments
Classification and valuation of the Bank’s Investments
(iii) Transfer between categories
is carried out in accordance with RBI and Fixed
Transfer of investments between categories, if
Income Money Market and Derivatives Association
any are considered in accordance with the extant
(‘FIMMDA’) guidelines issued in this regard from time
RBI guidelines as follows:
to time.
a) Transfer from AFS /HFT to HTM is made at
(i) Classification
the lower of book value or market value at
In accordance with the RBI guidelines on
the time of transfer;
investment classification and valuation,
investments are classified on the date of
b) Transfer from HTM to AFS/HFT is made at
purchase into ‘Held for Trading’ (‘HFT’), ‘Available
acquisition price/book value if originally
for Sale’ (‘AFS’) and ‘Held to Maturity’ (‘HTM’)
placed in HTM at par or at a discount and
categories (hereinafter called “categories”).
at amortised cost if originally placed in
HTM at a premium;
Investments, which the Bank intends to hold
till maturity, are classified as HTM investments.
c) Transfer from AFS to HFT category or vice-
Investments that are held principally for resale
versa is made at book value and the
within a short period, including short sale,
provision for the accumulated depreciation,
are classified as HFT investments. All other
if any, held is transferred to the provisions
investments are classified as AFS investments.
for depreciation against the HFT
securities or vice-versa.
For the purpose of disclosure in the financial
statements, the investments are classified under
(iv) Valuation
six groups (hereinafter called “groups”):
Investments classified under HTM need not be
marked to market and are carried at acquisition
a) Government Securities;
cost, unless it is more than face value, in which
b) Other Approved Securities; case the premium is amortised over the period
remaining maturity by applying constant price
c) Shares;
method (Straight Line Method). Such
d) Debentures and Bonds; amortisation of premium is adjusted against
interest income under the head “Income on
e) Subsidiaries / Joint Ventures; and
investments” as per the RBI guidelines.
f) Other Investments.
Bank recognise any diminution, other than
temporary, in the value of their investment under
HTM category for each investment individually.
Annual Report 2018-

Schedules
Corporate
Investments classified as AFS and HFT are break-up value (without considering ‘revaluation
marked to-market on a periodic basis as per
relevant RBI guidelines. The securities are valued
scrip-wise and any depreciation / appreciation is
aggregated for each category. Net appreciation
in each category, if any, is ignored, while net
depreciation is provided for. The book value of
individual securities is not changed consequent
to the periodic valuation of investments.
Treasury bills, commercial papers and certificates

of deposit are valued at carrying cost including
the pro rata discount accreted for the holding
period.
Quoted investments are valued at traded/

quoted price available on the recognised stock
exchanges, subsidiary general ledger account
transactions, price list of RBI or prices declared
by Financial Benchmark India Pvt. Ltd (‘FIBIL’)
jointly with Fixed Income Money Market and
Derivatives Association (FIMMDA) applicable as
at the balance sheet date. For deriving market
value of unquoted fixed income securities (other
than Central and State Government securities),
yields / mark-up rates (reflecting associate
credit risk) published by the FIMMDA is used.
The market value of unquoted government
securities which are in the nature of Statutory
Liquidity Ratio (‘SLR’) securities included in the
AFS and HFT categories is valued as per rates
published by FIBIL/FIMMDA.
In case of unquoted bonds, debentures and

preference shares where interest / dividend is
received regularly (i.e., not overdue beyond 90
days), the market price is derived based on the
Yield to Maturity (YTM) for Government
Securities as published by Fixed Income Money
Market and Derivatives Association of India
(FIMMDA)/ Financial Benchmark India Pvt. Ltd
(‘FIBIL’) and suitably marked up for credit risk
applicable to the credit rating of the instrument.
The matrix for credit risk mark-up for each
categories and credit ratings along with residual
maturity published by FIMMDA is adopted for this
purpose.
Equity shares for which current quotations are

not available or where the shares are not quoted
on the stock exchanges, should be valued at
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reserves’, if any) which is to be
ascertained from the company’s latest
Growing balance sheet (which should not be
the right way
more than one year prior to the date
AU Smallof
Finance Bank
valuation). In case the latest
balance sheet is not available the
shares are to be valued at ` 1 per
company, as per relevant RBI
Statutory
guidelines.
Investment in mutual fund units are

valued at latest available re-
purchase price or Net Asset Value
(where re-purchase price is not
available) as declared by the Mutual
Fund is respect of each particular
scheme.
In case of funds with a lock-in period,

where repurchase price/ market quote
is not available, Units could be valued
at Net Asset Value (NAV). If NAV is
Financial
not available, then these could be
valued at cost, till the end of the
locking period. Wherever the re-
purchase price is not available, the
Units could be valued at the NAV
of the respective scheme.
Units of Venture Capital Funds (VCF)

held under AFS category are valued
using the Net Asset Value (NAV)
shown by VCF as per the financial
statement. The VCFs are valued based
on the audited results once in a year.
In case the audited financials are not
available for a period beyond 18
months, the investments are valued at
` 1 per VCF.
Net depreciation in the value, if any,

compared to the acquisition cost, in
any of the aforesaid six groups, is
charged to the Profit and Loss
Account. The net appreciation, if any,
in any of the six groups is not
recognised except to the extent of
depreciation already provided. The
valuation of investments includes
securities under repo transactions.
The book value of individual securities
is not changed after the valuation
of investments.
Non-performing investments are

identified and depreciation / provision
are made thereon based on the RBI
guidelines. The depreciation /
provision on such non-performing
investments are not set off against
the appreciation in respect of other
performing securities. Interest on non-
performing investments is not
recognised in the Profit and Loss
Account until received.
Annual Report 2018-

Schedules
(v) Disposal of investments

second leg is recognised as interest income/
Profit / Loss on sale of investments under AFS
expense over the period of the transaction in the
and HFT categories are recognised in the Profit
Profit and Loss Account.
and Loss Account. Profit in respect of
investments sold from HTM category is
included in the Profit on Sale of Investments
D. Transactions involving foreign exchange
and an equivalent amount (net of taxes, if any, Initial recognition
and net of transfer to Statutory Reserves as Transactions in foreign currencies entered into by the
applicable to such profits) is appropriated from Bank are accounted at the exchange rates
the Profit and Loss Appropriation account to prevailing on the date of the transaction or at rates
Capital Reserve account as per RBI guidelines. that closely approximate the rate at the date of the
Loss on sale from HTM will be recognised in the transaction.
Profit and Loss account.
Measurement at the Balance Sheet date
(vi) Investment Fluctuation Reserve Foreign currency monetary items, if any, of the Bank,
As per the RBI circular RBI/2017-18/147 DBR. outstanding at the balance sheet date are restated
No.BP.BC.102/21.04.048/2017-18 dated April 2, at the rates prevailing at the year-end as notified by
2018, to build up adequate reserves to protect Foreign Exchange Dealers Association of India(‘FEDAI’).
against increase in yields in future, the Bank has Non-monetary items of the Bank are carried at
created an Investment Fluctuation Reserve (IFR) historical cost.
to the extent of the lower of following:
Contingent liabilities on account of foreign
a) net profit on sale of investments exchange contracts, currency future contracts,
during the year; guarantees, letters of credit, acceptances and
endorsements are reported at closing rates of
exchange notified by FEDAI as at the Balance Sheet
b) net profit for the year less mandatory
date.
appropriations.
As per the RBI circular, this reserve will be

Treatment of Exchange differences
created until the amount of IFR is at least 2 Exchange differences arising on settlement /
percent of the HFT and AFS portfolio, on a restatement of foreign currency monetary assets and
continuing basis and where feasible this should liabilities of the Bank are recognised as income or
be achieved within a period of three year. expense in the Profit and Loss Account.
(vii) Repo and reverse repo transactions E. Employee Benefits

Employee benefits include provident fund, gratuity
Repurchase (‘repo’) and reverse repurchase
and compensated absences.
(‘reverse repo’) transactions including liquidity
adjustment facility (with RBI) accounted
for as borrowing and lending transactions.
Defined contribution plan:
Accordingly, securities given as collateral under The Bank’s contributions to provident fund are
an agreement to repurchase them are held under considered as defined contribution plan and are
the investments of the Bank and the Bank is charged as an expense as they fall due based on
accruing the coupon/discount on such the amount of contribution required to be made when
securities during the repo period. the services are rendered by the employees.
Also, the Bank value the securities sold under Defined Benefits Plan
repo transactions as per the investment For defined benefit plans in the form of gratuity fund,
classification of the securities. The difference the cost of providing benefits is determined using
between the clean price of the first leg and the Projected Unit Credit method, with actuarial
clean price of the valuations being carried out at each Balance Sheet
date. Actuarial gains and losses are recognised in
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the Profit and Loss Account in the period
in which they
Annual Report 2018-

Schedules
Corporate
occur. Past service cost is recognised immediately

Regulations, 2014. The Schemes provide for grant of
to the extent that the benefits are already vested
options on equity shares to employees of the Bank
while otherwise, it is amortised on a straight-line
to acquire the equity shares of the Bank that vest in a
basis over the average period until the benefits
cliff vesting or in a graded manner and that are to be
become vested. The retirement benefit obligation
Statutory
exercised within a specified period.
recognised in the Balance Sheet represents the
present value of the defined benefit obligation as
In accordance with the Securities and Exchange Board
adjusted for unrecognised past service cost, as
of India (Share Based Employee Benefits)
reduced by the fair value of scheme assets. Any
Regulations, 2014 and the Guidance Note on
asset resulting from this calculation is limited to past
Accounting for Employee Share-based Payments,
service cost, plus the present value of available
issued by The Institute of Chartered Accountants of
refunds and reductions in future contributions to the
India, the cost of equity-settled transactions is
schemes.
measured using the intrinsic value method. The
intrinsic value being the excess, if any, of the fair
Short term Employee benefits
market price of the share under ESOSs over the
The undiscounted amount of short-term employee
exercise price of the option is recognised as deferred
benefits expected to be paid in exchange for the
Financial
employee compensation with a credit to Employee’s
services rendered by employees are recognised
Stock Option (Grant) Outstanding account. The
during the year when the employees render the
deferred employee compensation cost is amortised
service. These benefits include performance incentive
on a straight-line basis over the vesting period of the
and compensated absences which are expected
option. The cumulative expense recognized for equity-
to occur within twelve months after the end of the
settled transactions at each reporting date until the
period in which the employee renders the related
vesting date reflects the extent to which the vesting
service. The cost of such compensated absences is
period has expired and the number of equity
accounted as under:
instruments that are outstanding. The fair market
price is the latest available closing price preceding the
(a) in case of accumulated compensated
date of grant of the option, on the stock exchange on
absences, when employees render the services
which the shares of the Bank are listed.
that increase their entitlement of future
compensated absences; and
The options that do not vest because of failure to
satisfy vesting condition are reversed by a credit to
(b) in case of non-accumulating compensated
employee compensation expense, equal to the
amortised portion
absences, when the absences occur. of value of lapsed portion. In respect of the options
Bank are in accordance with Securities and Exchange Board of
Long term Employee benefits India (Share Based Employee Benefits)
The Bank accrues the liability for compensated
absences based on actuarial valuation as at the
Balance Sheet date conducted by an independent
actuary which includes assumptions about
demographics, early retirement, salary increases,
interest rates and leave utilisation. The net present
value of the Banks’ obligation is determined using the
Projected Unit Credit Method as at the Balance Sheet
date. Actuarial gains/ losses are recognised in the
Profit and Loss Account in the year in which they
arise.
Share based payments

The Employee Stock Option Schemes (ESOSs) of the
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which expire unexercised the balance
standing to the credit of Employee’s Stock
Option
Growing the (Grant)
right way Outstanding accounts is
transferred to Profit & Loss Account.
F. Revenue recognition
i) Interest Income is recognized on a
time proportion accrual basis taking
into account the amount
outstanding and the interest rate
implicit in the underlying agreements.
Income or any other charges on
non-performing assets or on assets
taken in custody for recovery of loan
through disposal of such assets during
the period are recognized only when
realized as per the IRAC norms of
RBI. Any such income recognized
and remaining unrealized, before
the asset became non-performing or
before disposal of assets in custody
of the company, is reversed.
Annual Report 2018-

Schedules
Overdue interest is recognized on realization

b) For transactions done after issuance
basis. Overdue interest is treated to accrue
of RBI circular no. DBOD.No.BP.BC-
on realisation, due to the uncertainty of their
103/21.04.177/2011-12 May 07, 2012.
realisation other than on running accounts where
it is recognised when due. Gains arising on securitisation of assets is
recognised over the tenure of securities
issued by SPV as per guidelines on
ii) Service charges, fees and commission income
securitisation of standard assets issued
are recognised when due except for guarantee
by RBI. Income from excess interest
commission and letter of credit which is
spread is accounted for net of losses when
recognised over the period of the guarantee /
redeemed in cash. Expenditure in respect
letter of credit.
of securitisation (except bank guarantee
fees for credit enhancement) is recognised
iii) Income on discounted instruments are
upfront. Bank guarantee fees for credit
recognised over the tenure of the instrument on
enhancement is amortised over the tenure
a constant yield basis.
of the agreements. Income arising on direct
assignment is recognised over the tenure of
iv) Loan origination income i.e. processing fee and
agreement on accrual basis.
other charges are collected upfront and
recognised at the inception of the loan.
x) Amounts recovered against debts written off in
earlier years and provisions no longer considered
v) All other charges such as cheque return charges,
necessary in the context of the current status
legal charges, seizing charges, etc. are
of the borrower are recognised in the Profit
recognised on realisation basis. These charges
and Loss Account.
are treated to accrue on realisation, due to the
uncertainty of their realisation.
xi) Fees received on sale of Priority Sector Lending
Certificates is recognised on proportionate
vi) Dividend income is recognized on an accrual
basis during the financial year and considered
basis when the right to receive the dividend
as Miscellaneous Income, in accordance with
is established.
the guidelines issued by the RBI.
vii) Interest income on deposits with banks and
G. Accounting for leases
other financial institutions are recognised on a
Operating Leases
time proportion accrual basis taking into
Leases where the lessor effectively retains
account the amount outstanding and the rate
substantially all the risks and benefits of ownership
applicable.
over the lease term is classified as operating leases.
Operating lease rentals are recognised as an
viii) Interest income on investments is recognised
expense on straight-line basis over the lease
on accrual basis.
period in accordance with the AS 19, Leases.
ix) Assignment and Securitisation:
H. Taxation
a) Income on assignment transactions done
Tax expenses comprises of current income tax
prior to RBI circular no. DBOD.No.BP.BC-
and deferred tax.
103/21.04.177/2011-12 May 07, 2012.
In case of assignment of loan assets and
Income tax
related receivables “at par”, income is
Current income-tax is measured at the amount
accounted for by applying the interest rate
expected to be paid to the tax authorities in
implicit in such assigned contracts as
accordance with the Income-tax Act, 1961 enacted in
reduced by Internal Rate of Return (IRR)
India. The tax rates and tax laws used to compute the
committed to the purchaser of loan assets.
amount are those that are enacted or substantively
enacted, at the
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Schedules
Corporate
reporting date. Current income tax relating to items

Provisions are not discounted to their present value
recognised directly in equity is recognised in equity
and are determined based on the best estimate
and not in Profit and Loss Account.
required to settle the obligation at the reporting date.
These estimates are reviewed at each reporting
Deferred taxes
date and adjusted to reflect the current best
Deferred income taxes reflect the impact of timing
estimates.
Statutory
differences between taxable income and accounting
income originating during the current year and
A contingent liability is a possible obligation that
reversal of timing differences for the earlier years.
arises from past events whose existence will be
Deferred tax is measured using the tax rates and
confirmed by the occurrence or non-occurrence of
the tax laws enacted or substantively enacted at
one or more uncertain future events beyond the
the reporting date. Deferred income tax relating to
control of the Bank or a present obligation that is not
items recognised directly in equity is recognised in
recognised because it is not probable that an
equity and not in the Profit and Loss Account.
outflow of resources will be required to settle the
obligation.
Deferred tax liabilities are recognised for all taxable
timing differences. Deferred tax assets are recognised
A contingent liability also arises in extremely rare
for deductible timing differences only to the extent
cases where there is a liability that cannot be
that there is reasonable certainty that sufficient
recognised because it cannot be measured reliably.
Financial
future taxable income will be available against
The Bank does not recognize a contingent liability
which such deferred tax assets can be realized. In
but discloses its existence in the financial statements.
situations where the Bank has unabsorbed
Contingent assets are neither recognised nor
depreciation or carry forward tax losses, all
disclosed in the financial statements.
deferred tax assets are recognised only if there is
virtual certainty supported by convincing evidence
J. Earnings Per Share (EPS)
that they can be realized against future taxable
Basic and diluted earnings per share is computed
profits.
in accordance with Accounting Standard-20 –
Earnings per share.
The carrying cost of the deferred tax assets are
reviewed at each balance sheet date. The Company
Basic earnings per share is calculated by dividing
writes down the carrying amount of a deferred tax
the net profit or loss after tax for the period
asset to the extent that it is no longer reasonably
attributable to equity shareholders by the weighted
certain or virtually certain, as the case may be, that
average number of equity shares outstanding during
sufficient future taxable income will be available
the period. Partly paid equity shares are treated as
against which deferred tax asset can be realised.
a fraction of an equity share to the extent that they
Any such write down is reversed to the extent that
are entitled to participate in dividends relative to a
it becomes reasonably certain or virtually certain,
fully paid equity share during the period.
as the case may be, that sufficient future taxable
income will be available.
For the purpose of calculating diluted earnings per
share, the weighted average number of shares
I. Accounting for provisions, contingent liabilities
outstanding during the period are adjusted for the
and contingent assets
effects of all dilutive potential equity shares.
A provision is recognised when the Company has
a present obligation as a result of past event, it is
K. Cash and Cash Equivalents
probable that an outflow of resources embodying
Cash and Cash equivalents include cash in hand,
economic benefits will be required to settle the
balances with RBI, balances with other banks and
obligation and a reliable estimate can be made of
money at call and short notice.
the amount of the obligation.
L. Fixed Assets
Property, Plant and Equipment/ Software/ Capital
Annual Report 2018-

work-in-progress/ Software under
development,
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Schedules
Depreciation and Impairment

All fixed assets individually costing up to ` 5,000
/- are fully depreciated in the year of installation/
(i) Property, Plant and Equipment (PPE) and
purchase as the management estimates the
software
useful life of such assets as one year.
Property, Plant and Equipment and software
are carried at cost, net of accumulated
Depreciation on assets acquired/sold during
depreciation and accumulated impairment
the period is recognised on a pro-rata basis to
losses, if any. The cost comprises purchase
the Profit and Loss Account from/upto the date
price and directly attributable cost of bringing
of acquisition/sale.
the asset to its working condition for the
intended use.
The residual values, useful lives and methods of
depreciation of property, plant and equipment
Gains or losses arising from derecognition of
are reviewed at each financial period end and
Property, Plant and Equipment are measured
adjusted prospectively, if appropriate.
as the difference between the net disposal
proceeds and the carrying amount of the asset
(iii) Impairment of assets
and are recognised in the Profit and Loss
The carrying amount of assets is reviewed at
Account when the asset is derecognized.
each balance sheet date if there is any
indication of impairment based on
(ii) Depreciation on property, plant and
internal/external factors. An impairment loss is
equipment:
recognised wherever the carrying amount of
Leasehold land is amortised on a straight-line
an asset exceeds its recoverable amount. The
basis over the period of lease.
recoverable amount is the greater of the assets,
net selling price and value in use. In assessing
Depreciation on Property, Plant, Equipment
value in use, the estimated future cash flows
and software is charged on a straight-line basis
are discounted to their present value using a
using the rates arrived at, based on the useful
pre-tax discount rate that reflects current
lives estimated by the management as given
market assessments of the time value of
below. The useful lives have been estimated
money and risks specific to the asset.
by the management based on technical advice
obtained. Determination of useful life of an asset
After impairment, depreciation is provided on
is a matter of judgment and based on various
the revised carrying amount of the asset over
factors such as type and make of an item, its
its remaining useful life.
place and pattern of usage, nature of
technology, obsolescence factors, availability
of spares, etc. and makes a significant impact
(iv) Capital work-in-progress/ Software under
on the useful life of an asset.
development
Costs incurred towards acquisition of assets,
Particulars Useful Life (years) including expenses incurred prior to those
assets being put to use and directly
Premises owned by the Bank 60
attributable to bringing them to their working
Addition to Leased Premises 10
condition are included under “Capital Work in
Furniture and Fixtures 10
Progress”. Capital Work in Progress and
Vehicles 8 Software under development are stated at the
Software 4-7 amount incurred
Computer, Printers, servers and 4-6 up to the date of Balance Sheet.
other office equipment
ATMs 10 M. Segment Reporting
Safe, Locker and locker gate 15 Part A: Business segments
Business segments have been identified and reported
taking into account, the target customer profile,
Annual Report 2018-

the nature of products and services,
the differing
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Schedules
Corporate
risks and returns, the organisation structure, the

(d) Other banking business
internal business reporting system and the guidelines
This segment includes income from para banking
prescribed by RBI. The Bank operates in the
activities such as third party product
following segments:
distribution and the associated costs.
Statutory
(a) Treasury
(e) Unallocated
The treasury segment primarily consists of net
All items which are reckoned at an enterprise
interest earnings from the Bank’s investment
level are classified under this segment. This
portfolio, money market borrowing and lending
includes unallocable assets and liabilities such as
and gains or losses on investment operations.
deferred tax, prepaid expenses, etc.
(b) Retail banking
Segment revenue includes earnings from
The retail banking segment serves retail
customers. Segment result includes revenue
customers through a branch network and other
less interest expense less operating expense
delivery channels. This segment raises deposits
and provisions, if any, for that segment.
from customers and provides loans and other
Segment-wise income and expenses include
services to customers with the help of
Financial
certain allocations. Segment capital employed
specialist product groups. Exposures are
represents the net assets in that segment.
classified under retail banking taking into
account the status of the borrower (orientation
Part B: Geographic segments
criterion), the nature of product, granularity of
The Bank operates in a single geographic
the exposure and the quantum thereof.
segment i.e. domestic.
Revenues of the retail banking segment are
derived from interest earned on retail loans,
fees from services rendered etc. expenses of
N. Share Issue Expenses
this segment primarily comprise interest Share issue expenses are adjusted from Securities
expense on deposits, commission paid to retail Premium Account as permitted by Section 52 of the
assets sales agents infrastructure and premises Companies Act, 2013.
expenses for operating the branch network
and other delivery channels, personnel costs, O. Accounting for Proposed Dividend
other direct overheads and allocated expenses Dividend proposed/ declared including dividend
of specialist product groups, processing distribution tax after the balance sheet date is
units and support groups. accrued in the books of the Bank in the year in which
the dividend is approved by the shareholders as per
(c) Wholesale banking revised Accounting Standard (AS) 4 ‘Contingencies
The wholesalebanking segment providesloans and Events occurring after the Balance sheet date’ as
and transaction services to large corporates, notified by the Ministry of Corporate Affairs through
emerging corporates, public sector units, amendments to Companies (Accounting Standards)
government bodies, financial institutions and Amendment Rules, 2016, dated 30 March 2016.
medium scale enterprises. Revenues of the
wholesale banking segment consist of interest
earned on loans made to customers etc. The
principal expenses of the segment consist of
interest expense on funds borrowed from
external sources, personnel costs, other direct
overheads and allocated expenses of delivery
channels, specialist product groups, processing
units and support groups.
Annual Report 2018-

Schedules
SCHEDULE 18 - NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2019
Amounts in notes forming part of the financial statements for the year ended March 31, 2019 are denominated in rupee
crore to conform to extant RBI guidelines.
A. Disclosures as Laid Down by RBI Circulars

1 Capital Adequacy Ratio
The Capital adequacy ratio (“CAR”) has been computed as per operating guideline for Small Finance Bank in
accordance with RBI Circular No. RBI/2016-17/81DBR. NBD.No.26/16.13.218/2016-17 dated October 6, 2016.
The Bank has followed Basel II standardized approach for credit risk in accordance with the Operating
Guideline issued by the Reserve Bank of India for Small Finance banks. Further, the RBI vide its circular No.
DBR.NBD.No. 4502/16.13.218/2017-18 dated November 8, 2017 has provided an exemption to all small Finance banks
whereby no separate capital charge is prescribed for market risk and operational risk.
The Bank has considered the Upfront Consideration received during the year for share warrant issued and the funds
raised from the issuance of share capital as part of Tier I Capital for the purpose of computation of the Capital
Adequacy Ratio as at March 31, 2019.
The total Capital Adequacy ratio of the Bank at March 31, 2019 is 19.31% (previous year: 19.31%) against the
regulatory requirement of 15.00% as prescribed by RBI.
The Bank has also considered an additional Risk Weight of 25% on assets under lien for its “grandfathered” legacy
borrowings as per instructions received from RBI. The Bank has reduced proposed dividend for computing Capital
Adequacy Ratio at March 31, 2019.
No Capital Conservation Buffer and Counter - Cyclical Capital Buffer is applicable on Small Finance Bank (SFB) as
per operating guidelines issued on SFB by RBI.
The following table set forth, for the year indicated, computation of Capital adequacy:
(` in Crore)
Sr. No. Particulars March 31, 2019 March 31, 2018
(i) Common Equity Tier 1 capital ratio (%) 15.96% 18.42%

(ii) Tier I capital ratio (%) 15.96% 18.42%
(iii) Tier II capital ratio (%) 3.35% 0.89%
(iv) Total Capital Ratio (CRAR) (%) 19.31% 19.31%
(v) Percentage of the shareholding of the Government of India in public sector banks
- -
(vi) Amount of equity capital raised*
482.09 3.25
(vii) Amount of Additional Tier I capital raised; of which
Perpetual Non Cumulative Preference Shares (PNCPS)
Perpetual Debt Instruments (PDI) - -
(viii) Amount of Tier II capital raised; of which - -
Debt capital instruments:
Preferential capital instrument 500.00 -
Shares (PCPS)/Redeemable Non-Cumulative Preference Shares (RNCPS)/Redeemable - -
Cumulative Preference Shares - -
*During the year ended March 31, 2019, the Bank has raised additional equity capital through a preferential allotment of 4,330,441 equity shares
of ` 10 each at an issue price of ` 692.77 per share. Accordingly, the paid-up share capital of the Bank has increased by ` 4.33 Crore and the
reserves of the Bank have increased by ` 295.67 Crore. Also the Bank allotted 10,104,364 convertible warrants, each convertible into one equity
share of the Bank of face value ` 10 each, at an issue price of ` 692.77 per share aggregating to ` 700.00 Crore out of which ` 175.00 Crore
(the “Upfront Consideration”) has been received during the current year against allotment of warrant and the balance of ` 525.00 Crore (the
“Balance Consideration”) shall be received upon allotment of equity shares against such warrants pursuant to exercise of option by the warrant
holder. The warrants are exercisable within 18 months from the date of allotment of warrants upon payment of the Balance Consideration.
Further the Bank allotted 2,323,425 equity shares (previous year: 1,452,714 equity shares) aggregating to face value ` 2.32 crore (previous year: `
1.45 crore) in respect of stock options exercised.
204|
Schedules
Corporate
SCHEDULE 18 - NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,
2019 (CONTD.)
2 Investments
2.1 Detail of Investments
(` in Crore)
Particulars March 31, 2019 March 31, 2018*
Statutory
(1) Value of Investments
(i) Gross Value of Investments
(a) In India 7,161.72 3,051.06
(b) Outside India - -
(ii) Provisions for Depreciation
(a) In India
0.05 0.47
(b) Outside India
(iii) Net Value of Investments - -
(a) In India
(b) Outside India 7,161.67 3,050.59
(2) Movement of provisions held towards depreciation on investments - -
(i) Opening balance
Financial
(ii) Add: Provisions made during the year 0.47 -
(iii) Less: Write off / write back of excess provisions during the year 0.05 0.47
(iv) Closing balance 0.47 -
0.05 0.47
*The Bank has not availed the dispensation provided by RBI circular DBR.No.BP.BC.102/21.04.048/2017-18 dated April 2, 2018 on deferment of
mark to market losses on investments classified as AFS/ HFT, and have provided for any depreciation fully as on March 31, 2018.
2.2 Repo Transactions

Details of repo / reverse repo deals (in face value terms) (Including LAF and TREPS) done during the year ended March 31, 2019
(` in Crore)
Minimum Maximum Daily Average Outstanding as on
Particulars outstanding outstanding outstanding March 31, 2019
during the year during the year during the year
Securities sold under repo:

i. Government securities
a. LAF Repo - 275.00 12.07 275.00
b. Triparty Repo (TREPS) - 268.06 12.43 -
ii. Corporate debt securities - - -
-
Securities purchased under reverse repo:
a. LAF Repo - 575.00 45.19
510.00
b. Triparty Repo (TREPS) - - -
-
ii. Corporate debt securities - - -
-
Annual Report 2018-

Schedules
2019 (CONTD.)
Details of repo / reverse repo deals (in face value terms) (Including LAF and TREPS) done during the year ended March 31, 2018
(` in Crore)
Minimum
Maximum Daily Average Outstanding as on
Particulars outstanding outstanding outstanding March 31, 2018
during the year during the year during the year
Securities sold under repo :

a. LAF Repo - 55.00 1.14 -
b. Triparty Repo (TREPS) - - - -
ii. Corporate debt securities - - - -
Securities purchased under reverse repo :
a. LAF Repo - 575.00 6.76 575.00
b. Triparty Repo (TREPS) - - - -
ii. Corporate debt securities - - - -
2.3 Non-SLR investment portfolio

i) Issuer composition of Non SLR investments
Issuer-wise composition of non-SLR investments as at March 31, 2019:
(` in Crore)
Extent of Private Extent of ‘Below Extent of Extent of
Amount
Sr. No. Issuer Placement Investment Grade’ ‘Unrated’ ‘Unlisted’
Securities Securities* Securities**
1 2 3 4 5 6 7
(i) Public sector undertakings 645.69 447.16 - - -
(ii) Financial institutions 971.03 335.14 - - -
(iii) Banks 33.17 - - - -
(iv) Private corporates 246.74 98.70 - - -
(v) Subsidiaries / Joint Ventures - - - - -
(vi) Others $ 407.29 407.29 - - -
(vii) Provision held (0.05) (0.05) - - -
towards depreciation
Total 2,303.87 1,288.24 - - -
Amounts reported under column 4, 5, 6 and 7 above are not mutually exclusive.
* Excludes investments in equity shares in line with extant RBI guidelines.
** Excludes investments in equity shares, Pass Through Certificates (PTC) and Commercial Paper (CP) in line with extant RBI guidelines.
$ Others include Investment in PTC.
206|
Schedules
Corporate
2019 (CONTD.)
Issuer-wise composition of non-SLR investments as at March 31, 2018:
(` in Crore)
Extent of Private Extent of ‘Below Extent of Extent of
Amount
Sr. No. Issuer Investment Grade’ ‘Unrated’ ‘Unlisted’
Statutory
Placem
Securities Securities* Securities**
1 2 3 4 5 6 7
(i) Public sector undertakings 49.91 - - - -
(ii) Financial institutions 341.23 44.98 - - -
(iii) Banks 235.83 - - - -
(iv) Private corporates 49.54 - - - -
(v) Subsidiaries / Joint Ventures - - - - -
(vi) Others $ 135.32 135.32 - - -
(vii) Provision held (0.16) - - - -
towards depreciation
Total 811.67 180.30 - - -
Financial
Amounts reported under column 4, 5, 6 and 7 above are not mutually exclusive.
* Excludes investments in equity shares in line with extant RBI guidelines.
** Excludes investments in equity shares, Pass Through Certificates (PTC) , Commercial Paper (CP) and Certificate of Deposits (CD) in line with
extant RBI guidelines.
$ Others include Investment in PTC.
ii) Non performing Non-SLR investments

The Bank does not have any Non performing Non-SLR investment as on March 31, 2019 and March 31, 2018.
2.4 Details of investments category - wise (Net of Provision for Depreciation)

The details of investments held under the three categories viz. Held for Trading (HFT), Available for Sale (AFS) and Held to Maturity
(HTM) are as under:
(` in Crore)
As at March 31, 2019 As at March 31, 2018
Particulars
HFT AFS HTM Total HFT AFS HTM Total
Government securities 5.08 965.40 3,887.31 4,857.79 - 519.23 1,719.69 2,238.92

Other approved securities - - - - - - - -
Shares - 97.21 - 97.21 - 44.98 - 44.98
Debentures and bonds - 521.13 - 521.13 - 110.61 - 110.61
Subsidiary/Joint ventures - - - - - - - -
Others* - 1,685.54 - 1,685.54 - 656.08 - 656.08
Total 5.08 3,269.28 3,887.31 7,161.67 - 1,330.90 1,719.69 3,050.59
* Others Investment includes Certificate of Deposits amounting of ` NIL (previous year: ` 149.18 Crore), Commercial Papers of ` 1,278.30
Crore (previous year: ` 371.58 Crore) and PTC of ` 407.29 Crore (previous year: ` 135.32 Crore).
Figures Reported above are Net of Provision (Depreciation/NPI)
Annual Report 2018-

Schedules
2019 (CONTD.)
2.5 Sale and Transfers to / from HTM Category
During the year ended March 31, 2019 and the previous year ended March 31, 2018 the Bank has not sold
and transferred securities to or from HTM category exceeding 5% of the book value of investment held in HTM
category at the beginning of the year. The 5% threshold referred to above does not include onetime transfer of
securities to/ from HTM category with the approval of Board of Directors permitted to be undertaken by banks as
per extant RBI guidelines, sale of securities under pre-announced Open Market Operation (OMO) auction to the
RBI and sale of securities or transfer to AFS / HFT consequent to the reduction of ceiling on SLR securities under
HTM.
3 Derivatives / Exchange traded Interest derivatives / Risk exposures in derivatives

The bank has not entered into any derivative instruments for trading / speculative purposes either in Foreign
Exchange or domestic treasury operations and Bank does not have any Forward Rate Agreement or Interest rate
swaps during the year ended March 31, 2019 and March 31, 2018.
4 Asset Quality
4.1 Movement in NPAs (On fund based portfolio)
(` in Crore)
Particulars March 31, 2019 March 31, 2018
(i) Net NPAs to Net Advances (%) 1.29% 1.27%

(ii) Movement of NPAs (Gross)
Gross NPAs as on 1st April (opening balance) 269.74 124.51
Additions (Fresh NPAs) during the year 447.73 206.25
Sub-total (A) 717.47 330.76
Less:
(i) Upgradations 175.20 42.34
(ii) Recoveries (excluding recoveries made from upgraded accounts) 52.50 12.75
(iii) Technical / Prudential Write-offs - -
(iv) Write-offs other than those under (iii) above 19.63 5.93
Sub-total (B) 247.33 61.02
Gross NPAs as on 31st March (closing balance) (A-B) 470.14 269.74
(iii) Movement of Net NPAs
(a) Opening balance 169.34 80.46
(b) Additions during the year 316.53 134.84
(c) Reductions during the year (191.37)
(45.96)
(d) Closing balance 294.50 169.34
(iv) Movement of provisions for NPAs (excluding provisions on standard assets)
(a) Opening balance 100.40
44.04
(b) Provisions made during the year 131.22
71.41
(c) Write-offs / Write-back of excess provisions (55.98)
(15.05)
(d) Closing balance 175.64
100.40
206|
SCHEDULE
AU 18 -Bank
Small Finance NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2019 (CONTD.)
forming part of the Financial Statements for the year ended March 31,
Schedule
4.2 Disclosure on accounts subjected to restructuring for the year ended March 31, 2019:
(` in Crore, except numbers)
Type of Restructuring
Sr Asset Classification Under CDR Mechanism Under SME Debt Restructuring Mechanism Others Total
No. Sub- Sub- Sub- Sub-
Details Standard Doubtful Loss Total Standard Doubtful Loss Total Standard Doubtful Loss Total Standard Doubtful Loss Total
Standard Standard Standard Standard
1 Restructured No. of
- - - - - - - - - - - 7 1 - 8 - 7 1 - 8
Accounts as on borrowers
April 1 of the FY Amount - - - - - - - - - - - 2.50 0.00 - 2.50 - 2.50 0.00 - 2.50
(opening figures)* outstanding
Provision - - - - - - - - - - - 0.62 0.00 - 0.62 - 0.62 0.00 - 0.62
thereon
2 Fresh restructuring No. of - - - - - - - - - - - - 1 - 1 - - 1 - 1
during the year borrowers
Amount - - - - - - - - - - - - 0.03 - 0.03 - - 0.03 - 0.03
outstanding
Provision - - - - - - - - - - - - 0.02 - 0.02 - - 0.02 - 0.02
thereon
3 Upgradations No. of - - - - - - - - - - - (4) - - (4) - (4) - - (4)
to restructured borrowers
standard category Amount - - - - - - - - - - - (1.45) - - (1.45) - (1.45) - - (1.45)
during the year outstanding
Provision - - - - - - - - - - - (0.39) - - (0.39) - (0.39) - - (0.39)
thereon
4 Restructured No. of - - - - - - - - - - - - - - - - - - -
standard advances borrowers
which cease to Amount - - - - - - - - - - - - - - - - - - -
attract higher outstanding
provisioning and / Provision - - - - - - - - - - - - - - - - - - -
or additional risk thereon
weight at the end
of the year and
hence need not be
shown as
restructured
standard advances
at the beginning
of the next year - - - - - - - - - - - (3) 3 - - - (3) 3 -
5 Downgradations No. of
of restructured borrowers - - - - - - - - - - - (1.05) 1.00 - (0.05) - (1.05) 1.00 - (0.05)
accounts Amount
during the year outstanding - - - - - - - - - - - (0.23) 0.37 - 0.14 - (0.23) 0.37 - 0.14
Provision
thereon - - - - - - - - - - - - - - - - - - -
6 Write-offs of No. of
restructured borrowers - - - - - - - - - - - - - - - - - - -
accounts Amount
during the year outstanding - - - - - - - - - - - - 5 - 5 - - 5 - 5
7 Restructured No. of
Accounts as on borrowers - - - - - - - - - - - 0.00 1.04 - 1.04 - 0.00 1.04 - 1.04
March 31 of the year Amount
(closing figures)* outstanding - - - - - - - - - - - 0.00 0.39 - 0.39 - (0.00) 0.39 - 0.39
Provision
thereon
* Excluding the figures of Standard Restructured Advances which do not attract higher provisioning or risk weight (if applicable).
208|
SCHEDULE 18 - NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2019 (CONTD.)
Annual Report 2018-
Schedule

4.2 Disclosure on accounts subjected to restructuring for the year ended March 31, 2018:
(` in Crore, except numbers)
Type of Restructuring Under CDR Mechanism Under SME Debt Restructuring Mechanism Others Total
Sr
Asset Classification Sub- Sub- Sub- Sub-
No.
Standard Doubtful Loss Total Standard Doubtful Loss Total Standard Doubtful Loss Total Standard Doubtful Loss Total
Details Standard Standard Standard Standard
1 Restructured No. of - - - - - - - - - - - - - - - - - - - -
April 1 of the Amount - - - - - - - - - - - - - - - - - - - -
FY
(opening figures)* outstanding
Provision - - - - - - - - - - - - - - - - - - - -
thereon
2 Fresh restructuring No. of - - - - - - - - - - - 7 1 - 8 - 7 1 - 8
during the year borrowers
Amount - - - - - - - - - - - 2.50 0.00 - 2.50 - 2.50 0.00 - 2.50
outstanding
Provision - - - - - - - - - - - 0.62 0.00 - 0.62 - 0.62 0.00 - 0.62
thereon
3 Upgradations No. of - - - - - - - - - - - - - - - - - - - -
to restructured borrowers
standard category Amount - - - - - - - - - - - - - - - - - - - -
Provision - - - - - - - - - - - - - - - - - - - -
thereon
4 Restructured No. of - - - - - - - - - - - - - - - - - - - -
standard advances borrowers
which cease to Amount - - - - - - - - - - - - - - - - - - - -
attract higher outstanding
provisioning and / Provision - - - - - - - - - - - - - - - - - - - -
or additional risk thereon
weight at the end
of the year and
hence need not be
shown as
restructured
standard advances
at the beginning
of the next year
5 Downgradations No. of - - - - - - - - - - - - - - - - - - - -
of restructured borrowers
accounts Amount - - - - - - - - - - - - - - - - - - - -
Provision - - - - - - - - - - - - - - - - - - - -
thereon
6 Write-offs of No. of - - - - - - - - - - - - - - - - - - - -
restructured borrowers
accounts Amount - - - - - - - - - - - - - - - - - - - -
7 Restructured No. of - - - - - - - - - - - 7 1 - 8 - 7 1 - 8
March 31 of the year Amount - - - - - - - - - - - 2.50 0.00 - 2.50 - 2.50 0.00 - 2.50
(closing figures)* outstanding
Provision - - - - - - - - - - - 0.62 0.00 - 0.62 - 0.62 0.00 - 0.62
thereon
* Excluding the figures of Standard Restructured Advances which do not attract higher provisioning or risk weight (if applicable).
Schedules
Corporate
2019 (CONTD.)
4.3 Details of Financial Assets sold during the year to Securitisation / Reconstruction Companies (SC/RC)
During the year, there was no sale of non-performing financial assets to Securitisation Company / Reconstruction
Company (Previous year Nil).
Statutory
4.4 Details of book value of investment in security receipts (SRs) backed by NPAs
The Bank has not invested in security receipts during the year and previous year.
4.5 Details of non-performing assets purchased/sold

The Bank did not sell / buy non-performing assets during the year and previous year.
4.6 Provisions on Standard Assets

(` in Crore)
Provision towards Standard Assets 93.21 56.40
Financial
5 Business Ratios
i. Interest Income as a percentage to Working Funds 12.02% 13.66%

ii. Non interest income as a percentage to Working Funds 1.88% 3.00%
iii. Operating Profit as a percentage to Working Funds 2.94% 4.45%
iv. Return on Assets 1.48% 2.04%
v. "Business" (deposits plus advances) per employee (` in crore) 2.34 1.10
vi. Profit per employee (` in crore) 0.03 0.03
Definitions of certain items in Business ratios / information:

1. Working funds to be reckoned as average of total assets (excluding accumulated losses, if any) as reported to
Reserve Bank of India in Form X under Section 27 of the Banking Regulation Act, 1949 (Previous Year: The Bank
has received the schedule commercial bank license in the month of November 2017 and after that started reporting
form X. For the period from April 2017 to October 2017 monthly average of total assets have been considered as
working funds).
2. Operating profit = (Interest Income + Other Income – Interest expenses – Operating expenses).
3. Return on Assets has been calculated on average assets.
4. “Business” is the total of average of net advances and deposits (net of inter-bank deposits).
5. Productivity ratios are based on average employee numbers.
The Bank has compiled the data for the purpose of this disclosure from its internal MIS system/reports and has been
furnished by the Management which has been relied upon by the auditors.
210|
Annual Report 2018-
Schedule

6 Asset Liability Management
Maturity pattern of certain items of assets and liabilities
As at March 31, 2019
(` in Crore)
As at March 31, 2018 More

Over 3 Over 6 Over 1 Over 3
31 days than 2
2 to 7 8 to 14 15-30 month & month & year & years & Over 5
Particulars Day 1 & upto 2 months Total
days days days upto 6 upto 1 upto 3 upto 5 years (` in Crore)
months and upto
month year years years
2 to 7 8 to 14 3 months
31 days More than Over 3 Over 6 Over 1 Over 3 Over 5
Deposits
Particulars 45.95
Day 1 691.48 495.99 911.62 1,733.71 2 months1,739.14 2,099.08
month 4,482.04
month 6,955.77
year & 253.52
years & 14.14 19,422.44
15-30 days & upto 2
Advances 8.54 332.72 days
days 168.46 394.94 months 654.47 and 518.75
upto &1,326.14
upto 6 2,736.79
& upto 8,598.92
upto 3 3,632.66
upto 5 4,446.34 22,818.73
Investments 1,048.15 347.44 502.80 465.69 684.38 3 months
602.81 month
677.33 1
1,193.67 years
1,408.25 years
47.88 183.27 7,161.67
year Total
Borrowings 0.73 0.05 327.50 203.29 133.84 100.30 1,150.61 1,492.90 4,028.59 675.55 years
500.00 8,613.36
Foreign - - - - - - - - - - - -
Deposits 18.49 302.95 411.74 95.71 508.24 717.43 820.10 1,456.39 3,470.21 104.33 17.73 7,923.32
Currency assets
Advances 10.82 168.81 211.29 173.13 255.29 325.37 681.36 1,469.13 5,253.29 2,074.70 2,688.94 13,312.13
Foreign - - - - - - - - - - - -
Investments 353.85 168.93 140.94 169.62 218.46 277.47 209.35 346.94 951.22 160.40 53.41 3,050.59
Currency liabilities
Borrowings 326.27 10.15 14.00 90.73 24.07 145.89 901.01 939.23 4,038.21 1,149.30 - 7,638.86
Foreign - - - - - - - - - - -
Currency assets
Foreign - - - - - - - - - - -
Currency liabilities
In computing the above information, certain estimates and assumptions have been made by the Bank’s Management which have been relied upon by the auditors.
Schedules
Corporate
2019 (CONTD.)
7 Exposures
7.1 Exposure to real estate sector
(` in Crore)
Category March 31, 2019 March 31, 2018
Statutory
(a) Direct exposure
(i) Residential Mortgages– 116.35 1.64
Lending fully secured by mortgages on residential property that is or will be occupied by
the borrower or that is rented; (includes Individual housing loans eligible for inclusion
in priority sector advances as at March 31, 2019 ` 78.90 crore and as at March 31,
2018 ` 0.25 crore).
(ii) Commercial Real Estate– 793.69 768.12
Lending secured by mortgages on commercial real estate (office buildings, retail space,
multi purpose commercial premises, multi family residential buildings, multi tenanted
commercial premises, industrial or warehouse space, hotels, land acquisition, development
and construction, etc.). Exposure would also include non fund based (NFB) limits.
Financial
(iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures–
(a) Residential - -
(b) Commercial Real Estate - -
Total (A) 910.04 769.76
(b) Indirect Exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing 394.63 389.58
Finance Companies (HFCs).
Total (B) 394.63 389.58
Total Exposure to Real Estate Sector (A+B) 1,304.67 1,159.34
Of the loans given against the mortgage of any real estate, only those loans have been classified as an exposure to
commercial real estate, the prospects for repayment in respect of which depend primarily on the cash flows generated
by such mortgaged asset.
7.2 Exposure to Capital Market

(` in Crore)
(i) Direct investment in equity shares, convertible bonds, convertible debentures and units of 97.21 44.98
equity oriented mutual funds the corpus of which is not exclusively invested in corporate
debt. -
(ii) Advances against shares / bonds / debentures or other securities or on clean basis to -
individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible
debentures, and units of equity oriented mutual funds.
-
(iii) Advances for any other purposes where shares or convertible bonds or convertible -
debentures
-
or units of equity oriented mutual funds are taken as primary security.
(iv) Advances for any other purposes to the extent secured by the collateral security of 16.12
shares or convertible bonds or convertible debentures or units of equity oriented mutual
funds i.e. where the primary security other than shares / convertible bonds / convertible
debentures / units of equity oriented mutual funds ` does not fully cover the advances. -
(v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of -
stockbrokers and market makers.
212|
Schedules
2019 (CONTD.)
7.2 Exposure to Capital Market (contd.)
(` in Crore)
(vi) Loans sanctioned to corporates against the security of shares / bonds / debentures or - -
other securities or on clean basis for meeting promoter’s contribution to the equity of
new companies in anticipation of raising resources.
(vii) Bridge loans to companies against expected equity flows / issues. - -
(viii) Underwriting commitments taken up by the banks in respect of primary issue of shares - -
or convertible bonds or convertible debentures or units of equity oriented mutual funds.
(ix) Financing to stockbrokers for margin trading. - -
(x) All exposures to Venture Capital Funds (both registered and unregistered). - -
Total Exposure to Capital Market 113.33 44.98
7.3 Details of risk category wise country exposure

The Bank does not have any country risk exposure other than “home country exposures” and accordingly, no provision
is maintained with regard to country risk exposure (previous year Nil).
7.4 Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the bank
During the year ended March 31, 2019 and March 31, 2018, the Bank has not exceeded the prudential credit exposure
limit as prescribed by the Reserve Bank of India in respect of Single Borrower and Group Borrowers.
7.5 Unsecured Advances

The Bank has not extended any advances where the collateral is an intangible asset such as a charge over rights,
licenses, authorisations, etc. (previous year Nil). The unsecured advances of ` 710.07 crore (previous year: ` 381.94
crore) as disclosed in Schedule 9 are without any collateral security.
8 Penalties levied by the RBI

No penalty has been levied on the Bank by RBI during the year ended March 31, 2019 and March 31, 2018.
9 Breakup of “Provisions and Contingencies” recognised in the Profit and Loss Account comprise:
(` in Crore)
Sr
No.
(i) Provision for Non performing advances 75.24 56.35

(ii) Provision for Depreciation on Investments (0.42) 0.47
(iii) Provision for Income Tax 195.56 153.08
(iv) Provision for Deferred Tax 2.76 (1.77)
(v) Non performing Advances written of f 28.47 39.43
(vi) Provision on Standard Advances 36.81 33.57
(vii) Other Provision and Contingencies 1.68 2.74
Total Provisions and Contingencies 340.10 283.87
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
10 Floating provision
(` in Crore)
(a) Opening balance in the floating provisions account - -
Statutory
(b) The quantum of floating provisions made in the accounting year - -
(c) Amount of draw down made during the accounting year - -
(d) Closing balance in the floating provisions account - -
11 Draw down from reserves

There has been no draw down from reserves during the year ended March 31, 2019 and March 31, 2018 other than
those disclosed under Schedule 2.
12 Disclosure for Customer Complaints

(A) Status of Customer Complaints
Financial
No. of complaints pending at the beginning of the year 121 0

No. of complaints received during the year 28911 10448
No. of complaints redressed during the year 28137 10327
No. of complaints pending at the end of the year 895 121
Includes complaints received from Banking Ombudsman (BO) and out of 895 pending complaints, all redressed before Board meeting except
62 complaints.
(B) Status of Awards passed by the Banking Ombudsman (BO)
No. of unimplemented Awards at the beginning of the year Nil Nil

No. of Awards passed by the Banking Ombudsmen during the year Nil Nil
No. of Awards implemented during the year Nil Nil
No. of unimplemented Awards at the end of the year Nil Nil
The above details are as furnished by the Management and relied upon by the Auditors.
13 Disclosure of Letters of Comfort (LoC) issued by the Bank

The Bank has not issued any Letter of Comfort during the period ended March 31, 2019 and March 31, 2018.
14 Provisioning Coverage Ratio

The Provision Coverage Ratio (PCR) (excluding Standard Provision) of the Bank is 37.36% as at March 31, 2019
(previous year: 37.22%).
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Schedules
2019 (CONTD.)
15 Bancassurance Business
Commission, Exchange and Brokerage in Schedule 14 include the following fees earned on Bancassurance business:
(` in Crore)
Nature of Income March 31, 2019 March 31, 2018
Towards selling of life insurance policies 16.03 -

Towards selling of non life insurance policies 9.85 2.00
Towards selling of mutual fund products 0.70 0.13
16 Concentration of deposits, advances, exposures and

NPAs
(i) Concentration of Deposits
(` in Crore)
Total Deposits of twenty largest depositors* 4,854.83 3,242.08

Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 25.00% 40.92%
*Includes certificate of deposits
(ii) Concentration of Advances

(` in Crore)
Total Advances to twenty largest borrowers 1,289.56 1,108.90

Percentage of Advances to twenty largest borrowers to Total Advances of the bank 5.72% 8.34%
Advances comprise credit exposure (funded and non-funded credit limits).

The Bank has compiled the data for the purpose of this disclosure from its internal MIS system which has been relied upon by the auditors.
(iii) Concentration of Exposures

(` in Crore)
Total Exposure to twenty largest borrowers / customers 2,071.66 1,365.57

Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the bank 8.33% 9.68%
on borrowers / customers
Exposures comprise credit exposure (funded and non-funded credit limits) including investment exposure.
The Bank has compiled the data for the purpose of this disclosure from its internal MIS system which has been relied upon by the auditors.
(iv) Concentration of NPAs

(` in Crore)
Total Exposure to top four NPA accounts 26.25 18.30
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
17 Sector wise advances
(` in Crore)
March 31, 2019
Sr. % of Gross NPAs
Statutory
Sector Outstanding Total
No. Gross NPAs to Total Advances
Advances
in that sector
A Priority Sector*
1 Agriculture and allied activities 3,227.80 73.86 2.29%
2 Advances to industries sector eligible as priority sector lending 1,490.30 24.99 1.68%
Engineering 236.90 4.69 1.98%
Gems and Jewellery 248.66 2.03 0.82%
Infrastructure 321.73 2.23 0.69%
3 Services 11,529.05 303.98 2.64%
Transport Operators 2,634.88 78.23 2.97%
Trade 5,090.90 141.40 2.78%
Financial
4 Personal loans** 91.05 - 0.00%
Sub-total (A) 16,338.20 402.83 2.47%
B Non Priority Sector
1 Agriculture and allied activities - - 0.00%
2 Industry 18.06 0.06 0.31%
Engineering 3.42 - 0.00%
Infrastructure 2.86 0.02 0.70%
3 Services 4,175.49 41.93 1.00%
Transport Operators 137.36 5.01 3.65%
Trade 224.64 11.90 5.30%
Non-Banking Financial Companies 2,712.78 - 0.00%
4 Personal loans 2,462.62 25.32 1.03%
Vehicle Loans 1,551.24 19.50 1.26%
Sub-total (B) 6,656.17 67.31 1.01%
Total (A+B) 22,994.37 470.14 2.04%
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Schedules
2019 (CONTD.)
17 Sector wise advances (Contd.)
(` in Crore)
March 31, 2018
Sr. % of Gross NPAs
No. Sector Outstanding Total
Gross NPAs to Total Advances
Advances
in that sector
A Priority Sector*
1 Agriculture and allied activities 1,492.84 45.77 3.07%
2 Advances to industries sector eligible as priority sector lending 599.52 16.75 2.79%
Basic Metal and Metal Products 126.14 1.50 1.19%
3 Services 7,264.76 182.11 2.51%
Transport Operators 1,543.05 43.40 2.81%
Trade 3,617.83 95.87 2.65%
4 Personal loans** 0.25 - 0.00%
Sub-total (A) 9,357.37 244.63 2.61%
B Non Priority Sector
1 Agriculture and allied activities - - 0.00%
2 Industry 8.57 - 0.00%
Gems and Jewellery 6.24 - 0.00%
Basic Metal and Metal Products 0.53 - 0.00%
3 Services 3,050.08 23.39 0.77%
Transport Operators 113.76 2.92 2.57%
Trade 78.03 2.99 3.84%
Non-Banking Financial Companies 1,529.51 - 0.00%
4 Personal loans 996.50 1.72 0.17%
Vehicle Loans 674.51 - 0.00%
Sub-total (B) 4,055.15 25.11 0.62%
Total (A+B) 13,412.52 269.74 2.01%
*Priority sector outstanding total advances includes ` 5,331.75 crore (previous year : ` 7,806.25 crore), in respect of which the Bank has sold
Priority Sector Lending Certificates (PSLC).
During the year ended March 31, 2019, the Bank has bought PSLC amounting ` 7,470.00 crore (previous year : ` Nil), which is not included in
above disclosure.
**Personal loan includes Housing loans.
The Bank has compiled the data for the purpose of this disclosure from its internal MIS system/reports, which has been furnished by the
Management and has been relied upon by the auditors.
18 Technical or prudential write-offs

Technical or prudential write-offs refer to the amount of non-performing assets which are outstanding in the books
of the branches, but have been written-off (fully or partially) at the head office level. The financial accounting systems
of the Bank are integrated and there are no write-offs done by the Bank which remain outstanding in the books of the
branches. Movement in the stock of technically or prudentially written-off accounts is given below:
(` in Crore)
Opening balance of technical / prudential write-offs - -

Technical / Prudential write-offs during the year - -
Sub-total (A) - -
Recoveries made from previously technically / prudentially written-off accounts - -
during the year (B)
Closing balance of technical / prudential write-offs [(A)-(B)] - -
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
19 Overseas assets, NPAs and revenue Management Committee of the Board to
The Bank does not have any overseas branches and ensure balance
hence the disclosure regarding overseas assets, NPAs
and revenue is not applicable (previous Year : Nil).
20 Off Balance Sheet SPVs sponsored

There are no Off-Balance Sheet SPVs sponsored
by the Bank, which need to be consolidated as per
accounting norms.
21 Disclosures on remuneration
A. Qualitative Disclosures:
a) Information relating to the composition and
mandate of the Remuneration Committee:
In compliance of Companies Act 2013, Securities
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
Banking Regulation Act 1949 and other
guidelines as applicable, the Board of Directors
through its Nomination and Remuneration
Committee (NRC) of the Board oversees the
framing, review and implementation of the
Compensation policy of the Bank, on behalf of
the Board. This committee works in co-
ordination with Risk Management Committee of
the Bank, in order to achieve effective alignment
between risk and remuneration. The
Nomination and Remuneration Committee
consist of Non-Executive Directors and
constitution of the committee is as follows:
• Mr. Krishan Kant Rathi - Independent

Director (Chairman)
• Mr. Mannil Venugopalan - Independent
Director
• Ms. Jyoti Narang - Independent Director
• Mr. Narendra Ostawal - Non- Executive
Director
The roles and responsibilities of the
Nomination and Remuneration Committee (NRC)
are as under:
(i) Assist the Board in formulation and

implementation of compensation policy
which will lay down the criteria for
remuneration of Directors, Key Management
Personnel (KMPs) and Senior Management
personnel (SMPs) and other employees
and take inputs from the Risk
218|
between remuneration and risks as
required is in place.
It shall ensure that the mix of cash,
AU Small
equityFinance Bankforms of compensation
Statutory
and other
must be consistent with risk alignment
and objectives of the Bank.
(ii) Lay down the comprehensive criteria for

assessment in terms of qualifications,
positive attributes, independence,
professional experience, track record,
integrity and in view of other parameters
for appointment of Directors, KMPs and
SMPs.
(iii) Develop policies and lay down criteria for
Financial
appointment/removal/reappointment of the
directors of the Board capturing the
statutory and regulatory requirements.
(iv) Assist in defining the performance

evaluation criteria for Directors and other
KMPs and ensure that relationship of
remuneration to performance is clear and
meets appropriate performance
benchmarks.
(v) Ensure that the compensation policy

formulated for remuneration of Directors,
KMPs and SMPs is reasonable and
sufficient to attract, retain and motivate
quality talent required to run the Bank.
(vi) Ensure Bank’s compensation policy provides

a fair and consistent basis for motivating
and rewarding employees appropriately
according to their performance, job
profile, their contribution, skill and
competence and also review
compensation levels of the Bank’s
employees vis-à-vis other banks and the
banking industry in general.
(vii) Ensure that the compensation for

directors, KMPs, SMPs is a mix of fixed &
variable pay and such compensation that
reflects short and long term performance
objectives appropriate to the working
and the goals of the Bank.
Annual Report 2018-

Schedules
2019 (CONTD.)
(viii) Ensure that appropriate procedures are in
(c) granting options to eligible employees and
place to assess Board effectiveness and also
determining the date of grant;
provide the suggestions on governance to
the Board of directors.
(d) determining the number of options to be
granted to an employee;
(ix) Review and oversee the Employee
Benefits program of the Bank including
(e) determining the exercise price under
deferred benefits.
the ESOP plans;
(x) Assessing the integrity, suitability, financial
(f) Formulation of the criteria for determining
position, cross check of any criminal records,
qualifications, positive attributes and
civil actions undertaken, refusal of admission
independence of a Directors and
to or expulsion from professional bodies,
Formulate the criteria for evaluation of
sanctions applied by regulators or similar
performance of all the Directors on the
bodies and previous questionable business
Board, KMPs and SMPs.
practice that are considered for a candidate.
The remuneration process is aligned to Bank’s
b) Information relating to the design and structure of
compensation Policy
remuneration processes and the key features and
objectives of remuneration policy:
c) Description of the ways in which current and
Objectives of Compensation Policy:
future risks are taken into account in the
• Ensure compliance with applicable laws, rules
remuneration processes. It should include the
and regulations as well as ‘Fit and Proper
nature and type of the key measures used to take
criteria’ of directors before their appointment.
account of these risks:
• Establish standards on compensation/ The Key parameters taken into account for the
remuneration including fixed and variable, structuring of remuneration covering fixed pay
which are in alignment with the applicable and variable pay are mentioned below:
rules and regulations and is based on the
trends and practices of remuneration prevailing (i) Risk factors that are significant to the
in the industry. operations of the Bank are taken into
consideration in devising the remuneration
• Retain, motivate and promote talent and to
structure and it is symmetric to
ensure long term sustainability of talented
the risk outcomes.
KMP, SMP and other employees.
• Define internal guidelines for payment of (ii) Compensation pay out is scheduled in
perquisites to the directors and KMP. manner where sensitivity to time horizon
of risks is taken into consideration in the
• Institutionalize a mechanism for the
review process.
appointment/ removal/ resignation/evaluation
of performance of directors.
(iii) Individual performance is reviewed on the
• Perform such functions as are required basis of Key Responsibility Areas (KRAs) and
to be performed by the Nomination and the same is carried out under the annual
Remuneration committee under the SEBI performance review (APR) of the Bank.
(Share Based Employee Benefits) regulations,
2014, including the following: (iv) Industry Benchmarking, inflation and
increase of cost of living.
(a) administering the ESOP plans;
In addition, remuneration process includes
(b) determining the eligibility of employees to
a ‘malus’ and ‘clawback’ option to take
participate under the ESOP plans;
care of any disciplinary issue or future
220|

drop in performance of
individual/ business/ Bank.
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
d) Description of the ways in which the bank seeks
with judicious mix of fixed and variable pay in
to link performance during a performance
measurement period with levels of remuneration: line with industry practices.
Individual performances are assessed in line
For adjusting deferred remuneration before and
with business/ individual delivery of the Key
Statutory
after vesting:
Result Areas (KRAs), top priorities of business
and budgets etc. One of the key factor to be The Bank’s compensation policy provides for
considered for annual performance evaluation is following in the event of negative contributions
the goal sheet built in Human Capital malus arrangement wherein Bank shall
Management Software (HCMS). withhold vesting of amount of deferred
remuneration and clawback arrangement
wherein ED’s shall be liable to return previously
In linking the performance and level of
paid or vested remuneration to the Bank as per
remuneration the job levels, business budgets,
the applicable provisions/ guidelines stipulated
risk factors, achievement of individual KRAs
by RBI.
are taken into consideration for taking decision
in this regard.
Malus: Payment of all or part of amount of
deferred variable pay can be prevented, this shall
e) A discussion of the bank’s policy on deferral
Financial
be applicable in case of:
and vesting of variable remuneration and a
discussion of the bank’s policy and criteria for
(i) Disciplinary Action (at the discretion of the
adjusting deferred remuneration before vesting
Disciplinary Committee) and/ or
and after vesting:
Employees are classified into following three
(ii) Significant drop in performance of
categories for the purpose of remuneration:
Individual/ Business (at the discretion of the
Category I: Whole Time Directors (WTD)/Chief
Nomination & Remuneration Committee).
Executive Officer (CEO)
Category II: Risk Control and Compliance
(iii) Resignation of staff prior to the payment date
Staff Category III: Other Categories of Staff
Clawback: Previously paid or already
Category I
The compensation for all Category 1 employees is vested deferred variable pay may
be recovered under this clause.
This clause will be applicable in case of
Disciplinary
approved by the Nomination and Remuneration Action (at the discretion of the Disciplinary Action
committee & RBI and the variable pay shall not appointed by the Human Capital Management team of
exceed 70% of the fixed pay. the Bank. The remuneration structure of employees
Category II
The compensation shall be subject to several
factors while assessing the remuneration
structure of employees with judicious mix of
fixed and variable pay in line with industry
practices. Key Result Areas (KRAs) of the
executives, risk factors, performance vis-a-vis
targets will be given suitable weightage for
deciding the variable pay and considering
principles laid down under compensation policy.
Category III
The employees of the Bank are being
220|
Committee and approval of the
Nomination & Remuneration
Growing Committee).
the right way

f) Description of the different forms of
variable remuneration (i.e. cash,
shares, ESOPs and other forms) that
the bank utilizes and the rationale for
using these different forms:
The Bank remuneration structure
is Mix of Fixed Pay, Variable Pay &
Deferred compensation
methodology, which is reflective of
the commitment and philosophy of
creating and sharing wealth with
the employees. The Variable pay is
decided considering risk factors, job
profile, level of performance and
industry norms to ensure that
employee morale is high and to
promote consistency in
performance over the time
horizon. The break up of
remuneration is the follows:
Annual Report 2018-

Schedules
2019 (CONTD.)
Fixed Remuneration: It consists of Basic Salary,
g) Total amount of deferred remuneration paid out in
House Rent Allowance, conveyance, other allowances
the financial year.
and perquisites.
Cash - NIL
Variable Remuneration: Variable Remuneration is
ESOPs - 1,308,217 Equity Shares exercised
paid as a percentage of Fixed pay, depending upon
(previous year 888,011 Equity Shares exercised).
the performance of the Employees against set key
responsibility/results areas (KRAs).
h) Breakdown of amount of remuneration awards
for the financial year to show fixed and variable,
Employee Stock Option: ESOPs are being given to the
deferred and non deferred.
Executive Directors, KMPs, SMPs and other employees
Total fixed salary for the year ended March 31,
on the basis of their performance against set KRAs,
2019 - ` 7.26 Crores (previous year ` 5.58 crore).
responsibilities, and vintage with the organization.
Deferred Variable Pay
B. Quantitative Disclosures:
a) Number of meetings held by the Remuneration
ESOPs – 5,47,200 equity shares (previous year
Committee during the financial year and
30,601 equity shares)
remuneration paid to its members.
Variable Pay for Mr. Sanjay Agarwal, MD & CEO of
During year ended March 31, 2019, 6 meetings
` 0.45 Crore for the year FY 2017-18 was
of Nomination and Remuneration committee
approved by Nomination & remuneration
was held. Each Member of the Nomination and
committee & Board which is pending with RBI
Remuneration committee is paid a sitting fee
for its approval and no variable pay is proposed
of
for performance of FY 2018-19.
` 20,000 per meeting attended.
Variable Pay for Mr. Uttam Tibrewal, WTD of
b) Number of employees having received a variable
` 0.91 Crore, ` 0.65 Crore & ` 0.75 Crore for
remuneration award during the financial year.
the year FY 2016-17, FY 2017-18 and FY
1 KMP and 5 Senior Management Personnels 2018-19
as risk takers were paid the variable
was approved by Nomination & remuneration
remuneration during the year.
committee & Board, the approval of the same
from RBI is awaited.
c) Number and total amount of sign-on awards made
during the financial year. – Nil (previous year
Non Deferred variable pay
Nil) Remuneration award paid during for the year
d) Details of guaranteed bonus, if any, paid as ended March 31, 2019 ` 1.50 crore was related
joining to FY 2017-18 and remuneration award for the
/ sign on bonus. – Nil (previous year Nil) FY 2018-19 is pending for approval at
remuneration committee or RBI (previous Year `
e) Details of severance pay, in addition to accrued 2.30 crore was related to FY 2016-17).
benefits, if any. – Nil (previous year Nil)
f) Total amount of outstanding deferred 10,00,000 ESOPs under ESOP Scheme 2018 were
remuneration, split into cash, shares and share- granted to Mr. Uttam Tibrewal, WTD during the
linked instruments and other forms. year FY 2018-19 and the same are subject to RBI
approval, earlier for FY 2017-18 38,702 ESOPs
Cash – Nil ( previous year Nil) under ESOP Scheme 2015 - Plan A & 10,18,758
ESOPs Under ESOP Scheme 2015 - Plan B were
Outstanding ESOPs as at March 31, 2019 granted and approval from RBI is pending.
– 27,56,429 equity shares (previous year
35,82,644 equity shares)
222|
Schedules
Corporate
2019 (CONTD.)
i) Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit and /
or implicit adjustments –
Nil
Statutory
j) Total amount of reductions during the financial year due to ex- post explicit adjustments.–
Nil
k) Total amount of reductions during the financial year due to ex- post implicit adjustments. –
Nil
22 Credit default swaps

The Bank has not transacted in credit default swaps during the period ended March 31, 2019, (previous year: Nil).
23 Intra-Group exposure
The Bank does not have any exposure (advances/investments) within the group, (previous year: Nil).
Financial
24 Transfers to Depositor Education and Awareness Fund (DEAF)
During the year ended March 31, 2019 and March 31, 2018 the Bank was not required to transfer any amount to
Depositor Education and Awareness Fund.
25 Unhedged foreign currency exposure

As of March 31, 2019, there is no unhedged foreign currency exposure, (previous year: Nil).
26 Disclosures relating to Securitisation

(i) Information of assignment/securitisation activity as an originator:
(` in Crore)
Year ended Year ended
Particulars
March 31, 2019 March 31, 2018
Total number of loan assets assigned/securitized (in Nos.) - 20,351

Total book value of loan assets assigned/securitized - 802.30
Sale consideration received for loan assets assigned/securitized - 802.30
Income recognised in Profit and Loss Account (incl. income on MRR) 159.84 302.95
(ii) Information with respect to outstanding credit enhancements and liquidity support:
(` in Crore)
Transactions at PAR Transactions at PREMIUM
Particulars As at As at As at As at
March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
Outstanding credit enhancements (first loss):

Corporate guarantee - - 5.81 5.81
Cash collaterals (placed as bank deposits) 99.75 136.90 0.23 0.23
Outstanding credit enhancements (second loss):
Guarantees provided by banks on behalf of the Bank * 138.27 185.46 - -
Cash collateral placed in lieu of bank guarantee - - - -
Liquidity facility (utilised) 24.43 32.44 - -
Liquidity facility (unutilised) 1.40 2.06 - -
* Cash margins / deposits pledged with the banks, is NIL (previous year ` 1.82 crore), have not been netted off.
222|
Schedules
2019 (CONTD.)
(iii) Disclosure as per RBI guidelines for securitisation transactions:
(` in Crore)
As at As at
Particulars
March 31, 2019 March 31, 2018
No. of SPVs sponsored by the Bank for securitisation transactions (in Nos.) 26 37
Total amount of securitised assets as per books of the SPVs sponsored by the Bank (outstanding 876.74 2,009.10
as on balance sheet date)
Total amount of exposures retained by the Bank to comply with minimum retention
requirement (MRR) as on the date of balance sheet
a) Off balance sheet exposures
First Loss
Others - -
b) On balance sheet exposures - -
First Loss
Others 99.75 136.90
Amount of exposures to securitisation transaction other than MRR 59.35 135.32
a) Off balance sheet exposures
I) Exposure to own securitisations
First Loss
Others (Guarantees provided by banks on behalf of the Bank*)
- -
II) Exposure to Third party securitisations
138.27 185.46
First Loss
Others
b) On balance sheet exposures - -
I) Exposure to own securitisations - -
First Loss
Others (Cash collateral placed in lieu of bank guarantee)
II) Exposure to Third party securitisations - -
First Loss - -
Others
- -
- -
* Cash margins / deposits pledged with the banks, is NIL (previous year ` 1.82 crore), have not been netted off.
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
27 Liquidity Coverage ration (LCR)
i) Quantitative disclosure on Liquidity Coverage Ratio (LCR) for period ended March 31, 2019:
(` in Crore)
Statutory
Quarter ended Quarter ended Quarter ended Quarter ended
March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
Particular
Total Total Total Total Total Total Total Total
Unweighted Weighted Unweighted Weighted Unweighted Weighted Unweighted Weighted
Value Value Value Value Value Value Value Value
(average) (average) (average) (average) (average) (average) (average) (average)
High Quality Liquid Assets
1 Total High Quality
Liquid Assets 3,811.74 3,034.42 2,205.42 1,671.12
(HQLA)
Cash Outflows
2 Retail deposits and deposits
from small business
customers, of which:
760.21 38.01 657.44 32.87 561.97 28.10 456.19 22.81
Financial
(i) Stable deposits
(ii) Less stable deposits 4,380.32 438.03 3,388.19 338.82 2,623.55 262.35 1,987.79 198.78
3 Unsecured wholesale
funding, of which:
(i) Operational deposits (all - - - - - - - -
counterparties)
(ii) Non operational deposits 5,137.36 3,886.14 4,535.92 3,307.09 3,310.51 2,270.90 2,512.27 1,782.26
(all counterparties)
(iii) Unsecured debt 497.05 497.05 214.91 214.91 403.41 403.41 324.33 324.33
4 Secured wholesale funding 16.67 - 19.57 3.30
5 Additional
requirements, of which :
(i) Outflows related to derivative
exposures and other
collateral requirements
(ii) Outflows related to loss of
funding on debt products
(iii) Credit and liquidity facilities
6 Other contractual 423.77 423.77 276.73 276.73 303.81 303.81 270.04 270.04
funding obligations
7 Other contingent 2,145.08 100.23 1,822.23 83.48 1,460.15 66.02 1,316.84 58.87
funding obligations
8 Total Cash Outflows 5,399.90 4,253.90 3,354.16 2,660.39
Cash Inflows
9 Secured lending 45.13 - 65.03 - 43.36 - 26.56 -
(e.g. reverse repos)
10 Inflows from fully 1,518.77 1,340.21 1,465.87 1,303.73 1,405.35 1,260.68 1,167.06 1,029.46
performing exposures
11 Other cash inflows 272.42 136.21 266.62 133.31 223.98 111.99 207.56 103.78
12 Total Cash Inflows 1,476.42 1,437.04 1,372.67 1,133.24
Total Total Total Total
Adjusted Adjusted Adjusted Adjusted
Value Value Value Value
13 Total HQLA 3,811.74 3,034.42 2,205.42 1,671.12
3,923.48 2,816.86 1,981.49 1,527.15
14 Total Net Cash Outflows 97% 108% 111% 109%
15 Liquidity Coverage Ratio (%)
224|
Schedules
2019 (CONTD.)
i) Quantitative disclosure on Liquidity Coverage Ratio (LCR) for period ended March 31, 2018:
(` in Crore)
Quarter ended Quarter ended Quarter ended Quarter ended
March 31, December 31, 2017 September 30, 2017 June 30, 2017
2018
Particular Total Total Total Total Total Total Total Total

Unweighted Weighted Unweighted Weighted Unweighted Weighted Unweighted Weighted
Value Value Value Value Value Value Value Value
(average) (average) (average) (average) (average) (average) (average) (average)
High Quality Liquid Assets
1 Total High Quality 1,327.86 1,181.23 950.62 825.84
Liquid Assets (HQLA)
Cash Outflows
2 Retail deposits and deposits
from small business
customers, of which:
(i) Stable deposits
342.44 17.12 225.24 11.26 114.13 5.71 22.17 1.11
(ii) Less stable deposits
1,474.05 147.41 941.41 94.14 474.98 47.50 78.69 7.87
3 Unsecured wholesale
funding, of which:
(i) Operational deposits (all
- - - - - - - -
counterparties)
(ii) Non operational deposits (all
1,619.08 1,173.70 1,073.82 858.42 704.71 590.53 316.55 207.97
counterparties)
(iii) Unsecured debt 326.22 326.22 341.49 341.49 388.99 388.99 179.41 179.41
4 Secured wholesale funding 16.11 - 23.78 71.88
5 Additional
requirements, of which :
(i) Outflows related to derivative
exposures and other
collateral requirements
(ii) Outflows related to loss of
funding on debt products
(iii) Credit and liquidity facilities
6 Other contractual 280.72 280.72 255.00 255.00 299.24 299.24 255.22 255.22
funding obligations
7 Other contingent 871.81 39.64 431.35 20.59 319.98 15.80 233.98 11.70
funding obligations
8 Total Cash Outflows 2,000.92 1,580.90 1,371.55 735.16
Cash Inflows
9 Secured lending 18.67 - 6.74 - - - - -
(e.g. reverse repos)
10 Inflows from fully
775.83 646.85 868.92 749.08 1,134.76 1,020.56 1,201.28 1,089.72
performing exposures
11 Other cash inflows 187.91 93.95 174.30 87.15 156.71 78.35 180.21 90.11
12 Total Cash Inflows 740.80 836.23 1,098.91 1,179.83
Total Total Total Total
Adjusted Adjusted Adjusted Adjusted
Value Value Value Value
13 Total HQLA 1,327.86 1,181.23 950.62 825.84
14 Total Net Cash Outflows 1,260.11 744.67 342.89 183.78
15 Liquidity Coverage Ratio (%) 105% 159% 277% 449%
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
ii) Qualitative disclosure on Liquidity Coverage Ratio (LCR):
To assess Bank’s resilience in liquidity stress scenario of 30 days with its high-quality liquid assets, Banks need to
compute Liquidity Coverage Ratio (LCR) as per RBI - Basel III Framework on Liquidity Standards. High Ratio signifies
Bank has enough liquid assets which it can use to fulfil its liquidity obligations in acute stress scenario. Ratio to compute
as below
Statutory
Stock of High Quality Liquid Assets
LCR (HQLA) Net Cash Outflows over a 30 days
period
Stock of High Quality Liquid Asset is total funding liquid assets could generate in stress scenario. Net Cash outflows is
the difference as derived by multiplying the outstanding balances of various categories or types of liabilities by the
outflow run-off rates and cash inflows are calculated by multiplying the outstanding balances of various categories of
contractual receivables by the rates at which they are expected to flow in.
Minimum Requirement for Small Finance Banks (as per operating guidelines for Small Finance Banks RBI/2016-17/81
DBR. NBD.No.26/16.13.218/2016-17 dated Oct 06, 2016) is as below:
Till By By By By
Financial
December 31, 2017 January 1, 2018 January 1, 2019 January 1, 2020 January 1, 2021
60% 70% 80% 90% 100%
The Bank has implemented LCR framework and has consistently maintained the LCR percentage well above the
regulatory threshold limit. The average LCR for the quarter ended March 31, 2019 was 97% which is above the
regulatory limit of 80%. For the quarter ended March 31, 2019 HQLA stood at ` 3,812 Crores.
Asset Liability Committee (ALCO) of the Bank is the primary governing body for Liquidity Risk Management, Treasury is
entrusted with the responsibility, under the guidance of the ALCO operationalizing liquidity management within the
Bank. ALM Risk unit independently measures, monitors & report Liquidity Risk as per regulatory & internal guidelines.
In computing the above information, certain estimates and assumptions have been made by the Bank’s
Management which have been relied upon by the auditors.
28 Divergence in the asset classification and provisioning

RBI vide its circular DBR.BP.BC.No.63/21.04.018/2016-17 dated April 18, 2017 and Notification dated 1st April
2019, has directed banks shall make suitable disclosures, if either or both of the following conditions are satisfied:-
(a) the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before
provisions and contingencies for the reference period, and
(b) the additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for
the reference period.
There has been no material divergence observed by RBI for the financial year 2017-18 in respect of the Bank’s
asset classification and provisioning under the extant prudential norms on income recognition asset classification
and provisioning (IRACP) which require such disclosures.
226|
Schedules
2019 (CONTD.)
29 Details of Priority Sector Lending Certificates (PSLCs)
(` in Crore)
For the year ended March 31, 2019 For the year ended March 31, 2018
Type of PSLCs
PSLC bought PSLC sold PSLC bought PSLC sold
Agriculture 1,750.00 275.00 - 542.50

Small and Marginal farmers 1,105.00 600.00 - 645.00
Micro Enterprises - 2,409.75 - 1,807.50
General 4,615.00 2,047.00 - 4,811.25
Total 7,470.00 5,331.75 - 7,806.25
30 Provision pertaining to fraud accounts
(` in Crore)
No. of frauds reported during the year 33 10

Amount involved in fraud 0.64 3.83
Amount involved in fraud net of recoveries / write-offs as at the end of the year 0.28 3.69
Provisions held as at the end of the year 0.28 3.69
Amount of unamortised provision debited from “other reserves” as at the end of the year 0.00 0.00
31 Provision for credit card and debit card reward points

The Bank is not providing any reward points on cards.
32 Description of contingent liabilities
Sr.
Contingent liability* Brief description
No.
1 Claims against the Bank not The Bank is a party to various legal and tax proceedings in the normal course of
acknowledged as debts business. The Bank does not expect the outcome of these proceedings to have a
material adverse effect on the Bank’s financial conditions, results of operations or cash
flows.
2 Guarantees on behalf of constituents As a part of its Banking activities, the Bank issues guarantees on behalf of its customers.
Guarantees generally represent irrevocable assurances that the Bank will make
payments in the event of customer failing to fulfill its financial or performance
obligations.
3 Acceptances, endorsements and These includes: Documentary credit such as letters of obligations, enhance the
other obligations credit standing of the customers of the Bank. Bill rediscounted by the Bank and cash
collateral provided by the Bank on assets which have been securitised.
4 Other items for which the Bank is These includes:
contingently liable a) Credit enhancements in respect of securitised-out loans
b) Contractual payments for Capital commitments
c) Other Guarantees
*Also refer Schedule 12 - Contingent Liabilities
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
33 Corporate social responsibility
(` in Crore)
Gross amount required to be spent by the Bank during the year (including deficit of previous year ) 11.10 7.18
Statutory
Amount spent during the year
On purposes other than construction/acquisition of any asset
Paid in Cash Yet to be Paid in Cash Total
4.59 4.23
- -
4.59 4.23
34 Small and micro industries

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2,
2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have
been no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays
Financial
in such payments. The above is based on the information available with the Bank which has been relied upon
by the auditors.
35 Proposed dividend
The Board of Directors at their meeting proposed a dividend of ` 0.75 per share (previous year ` 0.50 per share),
subject to the approval of the members at the ensuing annual General Meeting. In terms of revised Accounting
Standard (AS) 4 ‘Contingencies and Events occurring after the Balance sheet date’ as notified by the Ministry of
Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, the Bank
has not appropriated proposed dividend (including tax) aggregating ` 26.43 crore (previous year ` 17.22 crore)
from Profit and Loss Account. However, the effect of the proposed dividend has been reckoned in determining
Capital funds in the computation of capital adequacy ratio as at March 31, 2019 and March 31, 2018.
36 Disclosures on the Scheme for Sustainable Structuring of Stressed Assets (S4A) :

The Bank does not have any account under the Scheme for Sustainable Structuring of Stressed Assets (S4A) as on
March 31, 2019, (previous year: Nil).
37 Disclosures on Flexible Structuring of Existing Loans :

The Bank does not have any account under the Scheme Flexible Structuring of Existing Loans as on March 31,
2019, (previous year: Nil).
38 Resolution of Stressed Assets – Revised Framework

The Bank does not have any account for resolution of stressed Assets (Revised framework) as per RBI Circular
RBI/2017-18/131DBR.No.BP.BC.101/21.04.048/2017-18 Loans as on March 31, 2019, (previous year: Nil).
39 Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances

The Bank has not restructured any account as per RBI Circular DBR.No.BP.BC.100/21.04.048/2017-18 dated
February 07, 2018 and DBR.No.BP.BC.108/21.04.048/2017-18 dated June 6, 2018 as on March 31, 2019, (previous
year: Nil).
40 Disclosures on Strategic Debt Restructuring Scheme (SDR):

The Bank does not have any accounts under SDR as on March 31, 2019, (previous year: Nil).
228|
Schedules
2019 (CONTD.)
41 Disclosures on Change in Ownership outside SDR Scheme:

The Bank does not have any account which are currently under the scheme of Change in Ownership Outside SDR
as on March 31, 2019, (previous year: Nil).
42 Disclosures on Change in Ownership of Projects Under Implementation:

The Bank does not have any account which are currently under the scheme of Change in Ownership of Projects
Under Implementation as on March 31, 2019, (previous year: Nil).
43 Details of factoring exposure:

The factoring exposure of the Bank as at March 31, 2019 is Nil, (previous year: Nil).
44 Inter-bank Participation with risk sharing:

During the year the Bank has not entered into inter-bank participation with risk sharing, (previous year: Nil).
45 Investor education and protection fund

There is no amount required to be transferred to Investor Education and Protection Fund by the Bank,
(previous year: Nil).
46 Disclosure on remuneration to Non-Executive Directors

(` in Crore)
Remuneration by way of sitting fees to the Non-Executive Directors for attending meetings of 0.36 0.40
the Board and its committees
Profit related commission to all Non-Executive Directors other than the Chairperson 0.33 0.20
47 Miscellaneous income includes profit on sale of units of mutual fund, recoveries from loans written off, income from
dealing in Priority Sector Lending Certificates (PSLC), marketing support fees etc.
48 Details of payments of audit fees

(` in Crore)
Statutory Audit fees and other releated services* 1.00 0.93

Other Matters - -
Total 1.00 0.93
* Includes out of pocket expenses
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
B. Other Disclosures
1 Fixed Assets as per Schedule 10 relating to purchase of software and system development expenditure which are as follows :
(` in Crore)
Statutory
Gross Block
At cost on 31st March of the preceding year 107.18 3.90
Additions during the year 17.80 103.28
Deductions during the year 0.19 -
Total (a) 124.79 107.18
Depreciation / Amortisation
As at 31st March of the preceding year 17.29 2.48
Charge for the year 16.76 14.81
Deductions during the year 0.19 -
Total (b) 33.86 17.29
Net Value (a-b) 90.93 89.89
Financial
2 Segment reporting
Part A: Business segments:
Segment reporting for the year ended March 31, 2019 and March 31, 2018 is given below:
(` in Crore)
S.
No.
1 Segment revenue
(a) Treasury 403.03 210.29
(b) Retail banking 2,563.88 1,693.59
(c) Wholesale banking 417.37 249.23
(d) Other banking operations 26.58 2.13
(e) Unallocated - -
Income from operations 3,410.86 2,155.24
2 Segment results
(a) Treasury 156.92 105.34
(b) Retail banking 687.13 545.98
(c) Wholesale banking 114.03 70.28
(d) Other banking operations 26.58 2.13
Total Segment results 984.66 723.73
Less: Unallocated expenses 404.53 280.38
Total Profit Before Tax 580.13 443.35
Provision for Tax (Including deferred tax) 198.32
151.31
Total Profit After Tax 381.81
292.04
3 Segment Assets
(a) Treasury 9,079.48
4,713.62
(b) Retail banking 18,840.30
10,884.22
(c) Wholesale banking 4,113.51
2,648.55
(d) Other banking operations 4.40
0.64
(e) Unallocated 585.11
585.74
Total Assets 32,622.80
18,832.77
230|
Schedules
2019 (CONTD.)
2 Segment reporting (Contd.)
(` in Crore)
S.
No.
4 Segment Liabilities
(a) Treasury 4,170.86 2,377.99
(b) Retail banking 12,725.16 8,646.73
(c) Wholesale banking 12,419.25 5,324.53
(d) Other banking operations - -
(e) Unallocated 144.64 202.34
Capital and Other Reserves 3,162.89 2,281.18
Total Liabilities 32,622.80 18,832.77
Part B: Geographic segments

The business of the Bank is in India only. Accordingly, geographical segment is not applicable.
Segmental information is provided as per the MIS/reports available for internal reporting purposes, which includes
certain estimates and assumptions. The methodology adopted in compiling and reporting the above information has
been relied upon by the auditors.
3 Related Party Disclosures:

A. Related Parties :
Key management personnel (KMP) Mr. Sanjay Agarwal, Managing Director and CEO
Mr. Uttam Tibrewal, Whole Time Director
Mr. Deepak Jain, Chief Financial Officer
Mr. Manmohan Parnami, Company Secretary
Enterprises over which KMP / relatives AU Foundation (w.e.f. July 19, 2018)
of KMP have control / significant BIFCO Private Limited
influence Deepak Tarachand HUF
DS Speciality Product
LLP
Durga Automation & Control Private Limited (w.e.f. March 12, 2019)
Durga Bearings (Mumbai) Private Limited
Jyoti Sanjay Family Trust
Khushi Buildhome Private Limited
M Power Micro Finance Private Limited (upto July 19, 2017)
MYS Holdings Private Limited
Namokar Mining Industries LLP
Shivgyan Mines Minerals Private Limited
Shree Dham Mining Industries LLP
Speciality Stones Private Limited
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
3 Related Party Disclosures: (Contd.)
Relatives of KMP Ms. Jyoti Agarwal
Mr. Chiranji Lal Agarwal
Ms. Shakuntala Agarwal
Statutory
Mr. Yuvraj Agarwal
Ms. Mallika Agarwal
Mr. Ajay Agarwal
Ms. Pinki Agarwal
Ms. Pooja Tibrewal
Mr. Devi Prasad Tibrewal
Ms. Geeta Devi Tibrewal
Mr. Vaibhav Tibrewal
Mr. Subhash Tibrewal
Ms. Manju Agarwal
Ms. Uma Bagaria
Ms. Suman Sultania
Financial
Ms. Shweta Jain
Ms. Santosh Jain
Mr. Devansh Jain
Ms. Khushi Jain
Ms. Kavita Goyal
Ms. Sunita Agrawal
Ms Anita Agarwal
Ms.Bhawna Parnami
Ms. Rajkumari Sukhija
Ms. Asmita Parnami
Mr. Mahinder Parnami
Ms. Kavita Sukhija
Ms. Shikha Taneja
B. The Bank’s related parties balances and transactions for the year ended are summarised as follows:
1. Deposits
(` in Crore)
As at March 31, 2019 As at March 31, 2018
Particular Highest balance Highest balance
Closing balance Closing balance during the year
during the year
Key Management Personnel (KMP) 3.26 35.43 3.95 18.24

Relatives of KMP 10.96 26.22 8.47 18.68
Enterprise over which KMP/Relative of KMP have control / 0.22 3.51 0.08 0.38
significant influence
232|
Schedules
2019 (CONTD.)
2. Interest Paid on Deposits
(` in Crore)
Particulars
March 31, 2019 March 31, 2018
Key Management Personnel (KMP) 0.27 0.21

Relatives of KMP 0.63 0.33
Enterprise over which KMP/Relative of KMP have control / significant influence 0.00 -
Income including miscellaneous charges received from all the related parties are less than ` 50,000/- hence not shown separately.
3. Remuneration
(` in Crore)
Particulars
March 31, 2019 March 31, 2018
Mr. Sanjay Agarwal, Managing Director and CEO 1.69 1.47

Mr. Uttam Tibrewal, Executive Director 1.47 1.28
Mr. Deepak Jain, Chief Financial Officer 1.61 1.98
Mr. Manmohan Parnami, Company Secretary 0.47 0.45
Total 5.24 5.18
1. Remuneration paid excludes value of employee stock options exercised during the year.
2. The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are
determined on an actuarial basis for the Bank as a whole.
4. Loans given and repayment

There is no loan related transaction with the related parties during the year (previous year : Nil).
5. Other transaction
(` in Crore)
Name of related party Nature of transactions
March 31, 2019 March 31, 2018
Mr. Uttam Tibrewal Issue of Equity Shares of the Bank 2.57 1.71
Mr. Deepak Jain Issue of Equity Shares of the Bank 0.15 0.10
Mr. Manmohan Parnami Issue of Equity Shares of the Bank 0.02 0.01
Mr. Sanjay Agarwal Personal guarantee on behalf of Bank - 1.05
Mr. Sanjay Agarwal & Mrs. Jyoti Agarwal Personal guarantee on behalf of Bank - 12.60
AU Foundation Donation 0.77 -
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
4 Leases
The Bank has taken various premises under operating lease. The future minimum lease payments are given below:
(` in Crore)
Statutory
Not later than one year 53.36 47.74

Later than one year and not later than five years 215.29 189.44
Later than five years 97.66 140.21
Total 366.31 377.39
The total of minimum lease payments recognized in the Profit and Loss Account for the year 60.01 52.92
Total of future minimum sub-lease payments expected to be received under non- - -
cancellable sub-leases
Sub-lease amounts recognized in the Profit and Loss Account for the year - -
Contingent (usage based) lease payments recognized in the Profit and Loss Account for the year - -
5 Earnings per equity share (AS 20)
Financial
(` in Crore)
Profit/ (loss) after tax (A) 381.81 292.04

Less: Exceptional item - -
Net profit excluding exceptional item (B) 381.81 292.04
Weighted average number of equity shares in calculating basic EPS (C) 29,01,57,123 28,47,69,718
Add: Effect of dilution - Stock option granted to employees 57,92,321 73,39,525
Weighted average number of equity shares in calculating diluted EPS (D) 29,59,49,445 29,21,09,243
Earning per share including exceptional item
Basic (In `) (A / C) 13.16 10.26
Diluted (In `) (A / D) 12.90 10.00
Nominal value per share (In `) 10.00 10.00
Earning per share excluding exceptional item
Basic (In `) (B / C) 13.16 10.26
Diluted (In `) (B / D) 12.90 10.00
Nominal value per share (In `) 10.00 10.00
The dilutive impact is due to options granted to employees by the Bank.
6 Deferred taxes
Other assets include deferred tax asset (net). The break-up of the same is as
follows:
(` in Crore)
Particulars of Asset/ (Liability) March 31, 2019 March 31, 2018
Provision for NPA and general provision on standard assets 39.53 24.50
Expenditure allowed on payment basis 5.33 6.16
Depreciation (17.68) (11.79)
Deduction u/s. 36(1)(viii) of the Income Tax Act, 1961 (20.37) (7.09)
Others 4.14 1.93
Net Deferred Tax Asset 10.95 13.71
234|
Annual Report 2018-
Schedule

7 Accounting for employee share based payments
Stock options
The Bank has provided various share-based payment schemes to its Directors and Employees. The plans in operation are Plan A, Plan
B, Plan C and Plan D. The numerical A1, A2, A3, B1, B2, B3, B4, B5, B6, C1, C2, C3, C4, C5, C6, C7, C8, C9, D1, D2 and D3 represents
different
grants made under these plans. During the year ended March 31, 2019, the following series were in operation:
Particulars Plan A1 Plan A2 Plan A3 Plan B1 Plan B2 Plan B3 Plan B4 Plan B5 Plan B6
Date of grant Aug 31, Aug 23, Oct 27, Aug 31, Aug 23, Nov 11, Jan 24, Oct 27, Aug 6,
2015 2016 2017 2015 2016 2016 2017 2017 2018
Date of Board / Compensation Aug 10, Aug 23, Oct 27, Aug 10, Aug 23, Nov 11, Jan 24, Oct 27, Aug 6,
Committee approval 2015 2016 2017 2015 2016 2016 2017 2017 2018
Number of Options granted 33,38,436 4,18,512 3,61,000 28,62,846 10,92,654 36,000 30,000 42,510 1,146
Method of settlement Equity Equity Equity Equity Equity Equity Equity Equity Equity
Graded vesting period:
1st vesting “12 months from 20% 20% 20% 20% 20% 20% 20% 20% 20%
the date of grant or on the
date of proposed initial public
offer of Bank’s equity shares
whichever is later”
1st vesting “12 months from the NA NA NA NA NA NA NA NA NA
date of grant or one year from
the date of proposed initial public
which ever is later”
1st vesting “12 months from NA NA NA NA NA NA NA NA NA
the date of grant
2nd vesting “On expiry of one year 30% 30% 30% 30% 30% 30% 30% 30% 30%
from the 1st vesting date”
3rd vesting “On expiry of two years 50% 50% 50% 50% 50% 50% 50% 50% 50%
4th vesting “On expiry of 3 years NA NA NA NA NA NA NA NA NA
Exercise period 4 years from the 1st vesting date
Vesting conditions Continuous service
Weighted average remaining 2.28 2.40 3.58 2.28 2.40 2.62 2.82 3.58 4.35
contractual life (years)
Weighted average exercise 10.11 10.11 10.11 33.37 33.37 33.37 33.37 33.37 33.37
price per option (`)
Schedule
7 Accounting for employee share based payments (Contd.)
Particulars Plan C1 Plan C2 Plan C3 Plan C4 Plan C5 Plan C6 Plan C7 Plan C8 Plan C9 Plan D1 Plan D2 Plan D3
Date of grant Nov 11, Jan 24, Feb 22, May 13, Jan 30, Apr 25, Aug 6, Aug 30, Oct 13, Aug 30, Nov 22, Jan 17,
2016 2017 2017 2017 2018 2018 2018 2018 2018 2018 2018 2019
Date of Board / Compensation Nov 11, Jan 24, Feb 22, May 13, Jan 30, Apr 25, Aug 6, Aug 30, Oct 13, Aug 30, Nov 22, Jan 17,
Committee approval 2016 2017 2017 2017 2018 2018 2018 2018 2018 2018 2018 2019
Number of Options granted 11,700 1,85,900 70,700 4,99,800 10,53,901 2,919 5,480 27,600 50,865 18,56,950 1,54,541 2,437
Method of settlement Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity Equity
Graded vesting period:
1st vesting “12 months from NA NA NA NA NA NA NA NA NA NA NA NA
the date of grant or on the
date of proposed initial public
whichever is later”
1st vesting “12 months from 20% 20% 20% 20% 20% 20% 20% 20% 20% NA NA NA
the date of grant or one year
from the date of proposed initial
public offer of Bank’s equity
shares which ever is later”
1st vesting “12 months from NA NA NA NA NA NA NA NA NA 20% 20% 20%
the date of grant
2nd vesting “On expiry of one 30% 30% 30% 30% 20% 20% 20% 20% 20% 20% 20% 20%
year from the 1st vesting date”
3rd vesting “On expiry of two 50% 50% 50% 50% 30% 30% 30% 30% 30% 30% 30% 30%
years from the 1st vesting date”
4th vesting “On expiry of 3 years NA NA NA NA 30% 30% 30% 30% 30% 30% 30% 30%
Exercise period 6 years from the 1st vesting date
Vesting conditions Continuous service
Weighted average remaining 5.28 5.28 5.28 5.28 5.84 6.07 6.36 6.42 6.54 6.42 6.65 6.81
contractual life (years)
Weighted average exercise 140.00 140.00 140.00 140.00 140.00 140.00 140.00 140.00 140.00 664.00 643.00 622.00
price per option (`)
236|
Annual Report 2018-
Schedule

March 31, 2019
Particulars
Plan A1 Plan A2 Plan A3 Plan B1 Plan B2 Plan B3 Plan B4 Plan B5 Plan B6
Options outstanding at the 24,12,210 3,34,810 3,61,000 22,39,418 7,21,813 28,800 24,000 42,510
beginning of the year
Granted during the year - - - - - - - - 1,146
Forfeited during the year - - - - - - - -
Exercised during the year (8,86,587) (1,25,554) (50,600) (8,27,946) (2,49,466) (10,800) - (2,502)
Expired during the year (30,032) - - (20,820) (22,852) - - -
Outstanding at the end of the year 14,95,591.00 2,09,256.00 3,10,400.00 13,90,652.00 4,49,495.00 18,000.00 24,000.00 40,008.00 1,146.00
Exercisable at the end of the year 12,265 - 21,600 6,649 15,581 - 9,000 6,000
March 31, 2019

Particulars
Plan C1 Plan C2 Plan C3 Plan C4 Plan C5 Plan C6 Plan C7 Plan C8 Plan C9 Plan D1 Plan D2 Plan D3
Options outstanding at 9,000 1,70,000 66,200 1,04,200 10,37,921 - - - - - - -
the beginning of the year
Granted during the year - - - - - 2,919 5,480 27,600 50,865 18,56,950 1,54,541 2,437
Forfeited during the year - - - - - - - - - - - -
Exercised during the year (1,800) (27,360) (11,380) (18,440) (1,10,990) - - - - - - -
Expired during the year (2,160) (36,480) (18,660) (21,360) (1,17,595) (1,500) (1,500) - - (39,558) (7,422) -
Outstanding at the 5,040.00 1,06,160.00 36,160.00 64,400.00 8,09,336.00 1,419.00 3,980.00 27,600.00 50,865.00 18,17,392.00 1,47,119.00 2,437.00
end of the year
Exercisable at the - 4,000 - 1,200 72,942 - - - - - - -
end of the year
March 31, 2018

Particulars Plan A1 Plan A2 Plan A3 Plan B1 Plan B2 Plan B3 Plan B4 Plan B5 Plan C1 Plan C2 Plan C3 Plan C4 Plan C5
Options outstanding at 30,19,554 4,18,512 - 28,02,954 10,06,830 36,000 30,000 - 11,700 1,85,900 70,700 - -
the beginning of the year
Granted during the year - - 3,61,000 - - - - 42,510 - - - 4,99,800 10,53,901
Forfeited during the year - - - - - - - - -
Exercised during the year (6,02,220) (83,702) - (5,60,196) (1,93,396) (7,200) (6,000) - - - -
Expired during the year (5,124) - - (3,340) (91,621) - - - (2,700) (15,900) (4,500) (3,95,600) (15,980)
Outstanding at the 24,12,210 3,34,810 3,61,000 22,39,418 7,21,813 28,800 24,000 42,510 9,000 1,70,000 66,200 1,04,200 10,37,921
end of the year
Exercisable at the 683 - - 528 - - - - - - - - -
end of the year
Schedule
Details of stock options granted during the year:
Plan A, B, C and D: The weighted average fair value of stock options granted during the year was ` 633.69 (Plan B6), ` 606.04 (plan C6),
` 563.73 (plan C7), ` 641.42 (plan C8), ` 513.86 (plan C9), ` 362.48 (plan D1), ` 246.28 (plan D2) and ` 306.31 (plan D3)
The Black-Scholes Model has been used for computing the weighted average fair value considering the following:
Plan B6 Plan C6 Plan C7
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Particulars vesting vesting vesting vesting vesting vesting vesting vesting vesting vesting vesting
in FY in FY in FY in FY in FY in FY in FY in FY in FY in FY in FY
2019-20 2020-21 2021-22 2019-20 2020-21 2021-22 2022-23 2019-20 2020-21 2021-22 2022-23
Share price on the date of grant (`) 657.90 657.90 657.90 688.50 688.50 688.50 688.50 657.90 657.90 657.90 657.90
Exercise price (`) 33.37 33.37 33.37 140.00 140.00 140.00 140.00 140.00 140.00 140.00 140.00
Expected volatility (%) 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28%
Life of the options granted (years) 3.00 3.50 4.00 4.00 4.50 5.00 5.50 4.00 4.50 5.00 5.50
Risk-free interest rate (%) 7.87% 7.87% 7.87% 7.80% 7.80% 7.80% 7.80% 7.87% 7.87% 7.87% 7.87%
Expected dividend rate (%) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Fair value of the option (`) 632.38 633.40 634.38 599.39 603.46 607.23 610.99 556.91 561.12 564.89 568.85
Plan C8 Plan C9 Plan D1
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Particulars vesting vesting vesting vesting vesting vesting vesting vesting vesting vesting vesting vesting
in FY in FY in FY in FY in FY in FY in FY in FY in FY in FY in FY in FY
2019-20 2020-21 2021-22 2022-23 2019-20 2020-21 2021-22 2022-23 2019-20 2020-21 2021-22 2022-23
Share price on the date of grant (`) 729.25 729.25 729.25 729.25 617.85 617.85 617.85 617.85 729.25 729.25 729.25 729.25
Exercise price (`) 140.00 140.00 140.00 140.00 140.00 140.00 140.00 140.00 664.00 664.00 664.00 664.00
Expected volatility (%) 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28% 37.28%
Life of the options granted (years) 4.00 4.50 5.00 5.50 4.00 4.50 5.00 5.50 4.00 4.50 5.00 5.50
Risk-free interest rate (%) 8.03% 8.03% 8.03% 8.03% 7.96% 7.96% 7.96% 7.96% 8.03% 8.03% 8.03% 8.03%
Expected dividend rate (%) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Fair value of the option (`) 634.67 638.80 642.66 646.44 507.07 511.17 515.17 518.88 331.17 349.53 368.82 385.66
Plan D2 Plan D3
Tranche
Tranche Tranche Tranche Tranche Tranche Tranche Tranche
Particulars vesting vesting vesting vesting vesting vesting vesting vesting
in FY in FY in FY in FY in FY in FY in FY in FY
2019-20 2020-21 2021-22 2022-23 2019-20 2020-21 2021-22 2022-23
Share price on the date of grant (`) 589.65 589.65 589.65 589.65 648.75 648.75 648.75 648.75
Exercise price (`) 643.00 643.00 643.00 643.00 622.00 622.00 622.00 622.00
Expected volatility (%) 37.28% 37.28% 37.28% 37.28% 38.39% 38.39% 38.39% 38.39%
Life of the options granted (years) 4.00 4.50 5.00 5.50 4.00 4.50 5.00 5.50
238|
Risk-free interest rate (%) 7.64% 7.64% 7.64% 7.64% 7.30% 7.30% 7.30% 7.30%
Expected dividend rate (%) 0% 0% 0% 0% 0% 0% 0% 0%
Fair value of the option (`) 217.75 237.16 252.34 265.31 278.42 296.20 311.55 326.40
Schedules
2019 (CONTD.)
The Bank measures the cost of ESOP using the intrinsic value method. Had the Bank used the fair value model to
determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts
indicated below:
(` in Crore)
Particulars
March 31, 2019 March 31, 2018
Profit after tax as reported 381.81 292.04

Add: ESOP cost using intrinsic value method (net of tax) 25.11 9.24
Less: ESOP cost using fair value method (net of tax) 36.38 12.51
Profit after tax (adjusted) 370.54 288.77
Earnings Per Share
Basic
- As reported 13.16 10.26
- Adjusted for ESOP cost using fair value method 12.77 10.14
Diluted
- As reported 12.90 10.00
- Adjusted for ESOP cost using fair value method 12.52 9.89
(` in Crore)
As at As at
Particulars
March 31, 2019 March 31, 2018
Stock options outstanding (gross) 103.75 94.04

Deferred compensation cost outstanding 44.87 73.76
Stock options outstanding (net) 58.88 20.28
The Bank has granted 10,00,000 stock options on 30th August 2018 under Plan D1 and 38,702 and 10,18,758 stock
options on 27th October 2017 under Plan A3 and Plan B5, respectively, to Whole time Director which are pending for
RBI Approval. Accordingly, these options have not been considered for the purpose of computing the impact of ESOP
fair value on profit before tax. The vesting period for these options will commence only after the RBI approval is
received.
During the year ended March 31, 2018, 360,000 options granted under plan C4 had a different vesting schedule,
however, the options granted expired without any vesting to the grantee as the service conditions were not fulfilled.
Accordingly these options have not been considered for the purpose of computing the impact of ESOP fair value on
profit before tax for the year ended March 31, 2018.
8 Employee benefits
(a) Defined benefit plans
Gratuity
The gratuity plan provides a lumpsum payment to vested employees at retirement or on termination of
employment based on respective employee’s salary and years of employment with the Bank considering the ceiling of
gratuity amount of ` 0.20 crore.
Annual Report 2018-

Schedules
Corporate
2019 (CONTD.)
8 Employee benefits (Contd.)
Reconciliation of opening and closing balance of present value of defined benefit obligation for gratuity benefits
is given below:
Statutory
(` in Crore)
Reconciliation of opening and closing balance of the present value of the defined
benefit obligation
Liability at the beginning of the year 11.60 6.98
Interest cost 0.90 0.52
Current service cost 5.65 4.77
Benefits paid during the year (0.32) (0.15)
Actuarial (gain) / loss on obligation (2.68) (0.52)
Experience adjustment - -
Financial
Assumption change - -
Liability at the end of the year 15.15 11.60
Reconciliation of opening and closing balance of the fair value of the plan assets
Fair value of plan assets at the beginning of the year 0.14 -
Expected return on plan assets 0.18 0.00
Contributions 11.86 0.14
Benefits paid (0.32) -
Actuarial gain / (loss) on plan assets - -
Experience adjustment - -
Assumption change - -
Fair value of plan assets at the end of the year 11.86 0.14
Amount recognised in Balance Sheet
Fair value of plan assets at the end of the year 11.86 0.14
Liability at the end of the year (15.15) (11.60)
Net Asset (included under Schedule 11.VII) / (Liability) (included under Schedule 5.IV) (3.29) (11.46)
Expenses recognised in Profit and Loss Account
Interest cost
0.90 0.52
Current service cost
5.65 4.77
Expected return on plan assets
(0.18) (0.00)
Net actuarial (gain) / loss recognised in the year
(2.68) (0.52)
Net cost
3.69 4.77
Actual return on plan assets
0.18 0.00
Estimated contribution for the next year
3.00 12.20
Assumptions
Discount rate
8.00% per annum 7.75% per annum
Expected return on plan assets
Withdrawal rate
1.00% at all ages 1.00% at all ages
Salary escalation rate
240|
Schedules
2019 (CONTD.)
8 Employee benefits (Contd.)
Experience adjustment
(` in Crore)
Years Ended March 31,
Particulars
2019 2018 2017 2016 2015
Plan assets 11.86 0.14 - - -
Defined benefit obligation 15.15 11.60 6.99 4.64 2.83
Surplus / (deficit) (3.29) (11.46) (6.99) (4.64) (2.83)
Experience adjustment gain / - - - - -
(loss) on plan assets
Experience adjustment (gain) / loss on (2.68) (0.52) 0.18 0.11 (0.07)
plan liabilities
(b) Defined contribution plans

Providend fund
The Bank makes Provident Fund contributions to a defined contribution retirement benefit plans for qualifying
employees. Under the schemes, the bank is required to contribute a specified percentage of the payroll costs to the
Provident Fund Commissioner to fund the benefits.
The Bank recognized ` 14.36 Crore (previous year ` 11.74 Crore) for provident fund contributions in the Profit and Loss
Account. The contributions payable to these plans by the Bank are at rates specified in the rules of the schemes.
(c) Compensated absences

The Bank has provided for compensatory leaves which can be availed and not encashed as per policy of the Bank
as present value obligation of the benefit at related current service cost measured using the Projected Unit Credit
Method on the basis of an actuarial valuation. The Bank has accordingly booked ` 4.49 Crore (previous year ` 5.11
Crore) in the books of accounts for the period.
9 Comparative figures
Figures for the previous year have been regrouped and reclassified wherever necessary to conform to the current
year’s presentation.
Annual Report 2018-

Basel II (Pillar 3) Disclosures
Corporate
As at 31st March 2019
RBI circular DBR.No.BP.BC.4/21.06.201/2015-16 dated 1st July, 2015 on ‘Prudential guideline on Capital Adequacy and
Market Discipline – New Capital Adequacy Framework (NCAF)’ requires banks to make applicable Pillar 3 disclosures.
These disclosures have not been subjected to audit or limited review. These disclosures are available on the Bank’s
website at: https://www.aubank.in/sites/default/files/Pillar-III-31st-March-2019.pdf
Statutory
Financial
242|

CIN: L36911RJ1996PLC011381
Registered Office: 19-A, DHULESHWAR GARDEN, AJMER ROAD,
JAIPUR – 302001, RAJASTHAN
Tel: +91 0141 4110060 | Fax: +91 0141 4110090
E-mail: investorrelations@aubank.in | Website: www.aubank.in
Notice of Annual General Meeting
Notice is hereby given that the Twenty Fourth (24 th) Annual
Meeting till the conclusion of 25th Annual General Meeting,
General Meeting (AGM) of the members of AU SMALL
FINANCE BANK LIMITED (Bank) will be held on Friday, be and is hereby ratified by the Members of the Bank,
26th July 2019 at 04:00 p.m. at Suryavanshi Mahal – subject to approval from Reserve Bank of India and
Ground, Floor, ITC Rajputana, Palace Road, Jaipur-302006, such other regulatory authorities, as may be applicable,
Rajasthan, India to transact the following business: and on such terms and conditions, including
remuneration, as approved by the Board of Directors of
the Bank.”
ORDINARY BUSINESS
ITEM NO. 1: To consider and adopt the Audited Financial SPECIAL BUSINESS
Statements of the Bank for the Financial Year ended
ITEM NO. 5: To appoint Mr. Narendra Ostawal (DIN:
31st March 2019 and the reports of the Board of Directors
06530414) as Director (Non-Executive).
and the Auditors thereon.
To consider and, if thought fit, to pass, the following
ITEM NO. 2: To declare dividend of ` 0.75 per equity
share of ` 10 each for the Financial Year 2018-19. resolution as an Ordinary Resolution:
ITEM NO. 3: To appoint a Director in place of “RESOLVED THAT pursuant to the provisions of Section
Mr. Uttam Tibrewal (DIN: 01024940), who retires by 152, 160 and other applicable provisions, if any, of the
rotation and being eligible, has offered himself for re- Companies Act, 2013 (“Act”) read with the Companies
appointment. (Appointment and Qualification of Directors) Rules,
2014, Securities and Exchange Board of India (Listing
ITEM NO. 4: To ratify the appointment of M/S S.R. BATLIBOI Obligations and Disclosure Requirements) Regulations
& ASSOCIATES LLP, Chartered Accountants (Registration 2015, Section 10A (2A) and other applicable provisions
No. 101049W/E300004) as the Statutory Auditors of the of the Banking Regulation Act, 1949 (including any
Bank. statutory modification(s) or re-enactment(s) thereof for
the time being in force) and the rules, circulars and
To consider and, if thought fit, to pass, the following guidelines issued by the Reserve Bank of India, relevant
resolution as an Ordinary Resolution: provisions of Article of Association of the Bank, any
other applicable laws, and based on the
“RESOLVED THAT pursuant to the applicable provisions, recommendation of Nomination & Remuneration
Committee and the Board of Directors of the Bank,
if any, of the Companies Act, 2013 and the applicable
Mr. Narendra Ostawal (DIN: 06530414), who was
provisions of the Banking Regulation Act, 1949 or re-
appointed as an Additional Director (Non-Executive)
enactment(s) thereof for the time being in force and the
pursuant to the provisions of Section 161 and other
Rules, Circulars and Guidelines issued by the Reserve
Bank of India from time to time and pursuant to the applicable provisions of the Companies Act, 2013 to
resolution passed by the Members at the Twenty Second hold Office up to the date of this AGM and in respect of
Annual General Meeting held on 27th September 2017 whom the Bank has received a notice in writing under
appointing M/S S.R. BATLIBOI & ASSOCIATES LLP, Chartered Section 160 of the Act, proposing his candidature for the
Accountants (Registration No. 101049W/E300004) as office of Director, approval of the Members of the Bank
Statutory Auditors of the Bank to hold office for four (4) be and is hereby accorded to the appointment of Mr.
years from the conclusion of the Twenty Second Annual Narendra Ostawal as a Non-Executive Director of the
General Meeting till the conclusion of the Twenty Sixth Bank to hold office for a term of four (4) years
Annual General Meeting, the appointment of M/S S.R. commencing from 17th January 2019 and whose office
BATLIBOI & ASSOCIATES LLP, Chartered Accountants shall be liable to retire by rotation.
(Firm Registration No. 101049W/E300004), as statutory
auditors to hold office from the conclusion of this Annual RESOLVED FURTHER THAT the Board of Directors of
General the Bank be and is hereby authorised to do all such acts,
Annual Report 2018-

deeds, matters and things as it may consider
necessary
244|
and desirable in connection with or incidental thereto but “RESOLVED THAT pursuant to the provisions of Section
not limited to filing of necessary forms with the Registrar 197 (7) and other applicable provisions, if any, of the
of Companies and delegate all or any of its powers herein Companies Act, 2013 read with the relevant rules made
conferred to any Director(s)/Officer(s) of the Bank, to give thereunder, the relevant provisions of Section 35B
effect to this resolution.” and other applicable provisions, if any, of the Banking
Regulation Act, 1949 (including any statutory
ITEM NO. 6: To approve fees or compensation (profit amendment(s) thereto, modification(s)or re-enactment(s)
linked commission) payable to Non-Executive Directors, thereof, for the time being in force) and the rules,
including Independent Directors. guidelines and circulars issued by the Reserve Bank of
India, from time to time and subject to such other
To consider, and if thought fit, to pass, the following approvals, as may be applicable, approval of the members
Resolution, as an Ordinary Resolution: be and is hereby accorded to revise the annual
compensation (profit linked commission) to ` 25,00,000/-
“RESOLVED THAT pursuant to the provisions of Section 197 (Rupees Twenty Five Lakhs only) payable exclusive of sitting
and other applicable provisions, if any, of the Companies fees, travelling and other out of pocket expenses for
Act, 2013 read with the relevant rules made thereunder, Financial Year 2019-20 and thereafter as applicable to Mr.
Regulation 17 (6) (a) of Securities and Exchange Board of Mannil Venugopalan (DIN:00255575) Independent Director
India (Listing Obligations and Disclosure Requirements) (Part-Time) Chairman of the Bank, subject to approval of
Regulations 2015, the relevant provisions of Section 35B Reserve Bank of India.
and other applicable provisions, if any, of the Banking
Regulation Act, 1949 (including any statutory RESOLVED FURTHER THAT the Board of Directors of
amendment(s) thereto, modification(s)or re-enactment(s) the Bank be and is hereby authorised to execute all
thereof, for the time being in force) and the rules, such documents, instruments and writings as deemed
guidelines and circulars issued by the Reserve Bank of necessary, with the power to settle all questions,
India, from time to time and subject to such other difficulties or doubts that may arise in this regard as it may
approvals, as may be applicable, approval of the members in its sole and absolute discretion deem fit and to do all
be and is hereby accorded to approve fees or such acts, deeds, matters and things as it may consider
compensation (profit linked commission) paid to Non- necessary and desirable and to delegate all or any of its
Executive Directors including Independent Directors not powers herein conferred to any Director(s)/Officer(s) of
exceeding one percent (1%) of net profit of the Bank in the Bank, to give effect to this resolution.”
any Financial Year computed in accordance with Section
198 of the Companies Act, 2013 and considering the ITEM NO. 8: To revise the remuneration payable to
performance of the Bank shall be paid to the Non- Mr. Sanjay Agarwal (DIN 00009526), as the Managing
Executive Directors in such proportion as may be Director & CEO.
determined by the Board of Directors of the Bank from time
to time. To consider, and if thought fit, to pass, the following
Resolution, as an Ordinary Resolution:
RESOLVED FURTHER THAT the Board of Directors of
the Bank be and is hereby authorised to execute all “RESOLVED THAT pursuant to the provisions of Section
such documents, instruments and writings as deemed 196, 197 and other applicable provisions, if any, of the
necessary, with the power to settle all questions, Companies Act, 2013 (‘Act’), read with the relevant rules
difficulties or doubts that may arise in this regard as it may made thereunder and Schedule V of the Companies Act
in its sole and absolute discretion deem fit and to do all 2013, the relevant provisions of Section 35B and other
such acts, deeds, matters and things as it may consider applicable provisions, if any, of the Banking Regulation
necessary and desirable and to delegate all or any of its Act, 1949 (including any statutory amendment(s) thereto,
powers herein conferred to any Director(s)/Officer(s) of modification(s) or re-enactment(s) thereof, for the time
the Bank, to give effect to this resolution.” being in force) and the rules, guidelines and circulars
issued by the Reserve Bank of India, from time to time,
ITEM NO. 7: To revise the compensation (Profit Linked approval of the members of the Bank be and is hereby
Commission) payable to Mr. Mannil Venugopalan accorded to revise the remuneration with 10% increase in
(DIN:00255575), as the Independent Director (Part-Time) fixed pay for Financial Year 2019-20 to be paid to Mr.
Chairman. Sanjay Agarwal, Managing Director & CEO by way of
salary, allowances and perquisites and other amount as
To consider, and if thought fit, to pass, the following detailed herein subject to such terms & conditions as may
Resolution, as an Ordinary Resolution: be approved by Reserve Bank of India in this regard.
Annual Report 2018-

Below is the bifurcation of existing and proposed fixed & variable pay (annually) for Mr. Sanjay Agrawal:
Sr. No. Items Existing (` in lakhs) Proposed (` in lakhs)
1 Salary 67.60 74.38
2 Dearness allowance - -
3 House rent allowance 33.80 37.19
4 Conveyance allowance - -
5 Entertainment allowance - -
6 Other allowances 67.61 74.38
Total 169.01 185.95
Perquisites
2 Free use of bank’s car Two cars with chauffeur for each Two cars with chauffeur for each
-official Purpose - -
-private purpose
3 Servant allowance Reimbursement of servant expenses Reimbursement of servant expenses
4 Variable pay - No variable pay proposed for performance
of the FY 2018-19.
5 Loans - Loan facilities to be provided as per
the Bank’s policy, at the rate of interest
applicable to the other employees.
6 Provident Fund/Gratuity/Pension As applicable to all employees of As applicable to all employees of bank
-Provident fund bank 0.24 0.23
-Gratuity 3.25 3.58
7 Travelling and halting allowances On Actuals On Actuals
8 Medical reimbursement Ceiling of one month’s basic salary Ceiling of one month’s basic salary annually
annually or three months’ basic salary over 3 years
or three months’ basic salary over 3 years
9 Other benefits: Total of ` 5,00,00,000 for health, personal Total of ` 5,00,00,000 for health, personal
- Insurance accidental insurance and Group accidental insurance and Group Insurance
-Leave travel concession For self and family once, a year incurred For self and family once, a year incurred in
in accordance with Company rules. accordance with Company rules.
RESOLVED FURTHER THAT when in any financial year,

the Bank has no profits or its profits are inadequate, the to such modification, relaxation or variation without any
remuneration including the perquisites as aforesaid will be further reference to the members for their approval.
paid to Mr. Sanjay Agarwal in accordance with the
applicable provisions of Schedule V of the Act. RESOLVED FURTHER THAT the Board of Directors of
the Bank be and is hereby authorised to do all deeds,
RESOLVED FURTHER THAT the aggregate of the things, acts as may deemed necessary, in this regard but
remuneration and perquisites as aforesaid in any financial not limited to making correspondences in this regard
year shall not exceed the limit from time to time under with RBI or any other regulatory authority and/or to settle
Section 197, 198 and other applicable provisions of the Act all questions, difficulties or doubts that may arise in this
and Rules made thereunder, read with Schedule V of the regard as it may in its sole and absolute discretion deem
said Act or any statutory modification(s) or re-enactment fit and to delegate all or any of its powers herein conferred
thereof for the time being in force, or otherwise as may be to any Director(s)/Officer(s) of the Bank, to give effect to
permissible under the law. this resolution.”
RESOLVED FURTHER THAT in the event of any statutory ITEM NO. 9: To Revise the remuneration payable to
amendment, modification or relaxation by the Central Mr. Uttam Tibrewal (DIN: 01024940), as the Whole Time
Government to Schedule V of the Act or any other relevant Director.
Statutory enactment(s) thereof in this regard, the Board
of Directors be and are hereby authorised to vary or To consider, and if thought fit, to pass, the following
increase the remuneration, including salary, commission, Resolution as an Ordinary Resolution:
perquisites, allowances etc. within such prescribed limit
or ceiling and the said agreement between the Bank “RESOLVED THAT pursuant to the provisions of Section
and Mr. Sanjay Agarwal, be suitably amended to give 196, 197 and other applicable provisions, of the
effect Companies Act, 2013, if any read with the relevant rules
244|

made thereunder
Annual Report 2018-

and Schedule V of the Companies Act 2013, the relevant with 15% increase in fixed pay for Financial Year 2019-20
provisions of Section 35B and other applicable provisions, and 50% of fixed pay, as variable pay for performance of
if any, of the Banking Regulation Act, 1949 (including Financial Year 2018-19 to be paid to Mr. Uttam Tibrewal,
any statutory amendment(s) thereto, modification(s) or re- Whole-time Director by way of salary, allowances and
enactment(s) thereof, for the time being in force) and the perquisites and other amount as detailed herein as may
rules, guidelines and circulars issued by the Reserve Bank be approved by Reserve Bank of India and subject to such
of India, from time to time, approval of the members of the other compliances/approval as may be required in this
Bank be and is hereby accorded to revise the regard.
remuneration
Below is the bifurcation of existing and proposed fixed & variable pay (annually) for Mr. Uttam Tibrewal:
Sr. No. Items Existing (` in lakhs) Proposed (` in lakhs)

1 Salary 58.61 67.42
2 Dearness allowance - -
3 House rent allowance 29.30 33.71
4 Conveyance allowance -
5 Entertainment allowance -
6 Other allowances 58.61 67.42
Total 146.52 168.55
Perquisites
2 Free use of bank’s One car with chauffeur One car with chauffeur
car
-Official purpose
-Private purpose
3 Servant allowance - Reimbursement of servant expenses
4 Stock options - Employee Stock Options as may be granted
by the Nomination Remuneration Committee/
Board, from time to time subject to approval
of RBI as applicable
5 Variable pay - As approved by the Nomination and
Remuneration Committee/ Board, subject to
approval of RBI as applicable
6 Loans - Loan facilities to be provided as per the
Bank’s policy, at the rate of interest applicable
to the other employees.
7 Provident Fund/ As applicable to all employees of bank. As applicable to all employees of bank
Gratuity/Pension
-Provident fund 0.24 0.23
-Gratuity 2.82 3.24
8 Travelling and On Actuals On Actuals
halting
allowances
9 Medical reimbursement Ceiling of one month's basic salary annually Ceiling of one month's basic salary annually or
or three months' basic salary over 3 years
three months' basic salary over 3 years
10 Other benefits: Total of ` 5,00,00,000 for health, personal Total of ` 5,00,00,000 for health, personal
-Insurance accidental insurance and Group accidental insurance and Group Insurance
-Leave travel concession For self and family once, a year incurred For self and family once, a year incurred in
in accordance with Company rules accordance with Company rules
246|
RESOLVED FURTHER THAT when in any financial year,

Banking Regulation Act, 1949 and rules, guidelines and
the Bank has no profits or its profits are inadequate, the
circulars issued by Reserve Bank of India, from time to
remuneration including the perquisites as aforesaid will
time, the consent of the members of the Bank be and is
be paid to Mr. Uttam Tibrewal in accordance with the
hereby accorded to the Board of Directors of the Bank
applicable provisions of Schedule V of the Act.
(hereinafter called ‘the Board’, which term shall be
deemed to include any Committee thereof, which the
RESOLVED FURTHER THAT the aggregate of the
Board may have constituted or hereinafter constitute to
remuneration and perquisites as aforesaid in any financial
exercise its powers including the powers conferred by
year shall not exceed the limit from time to time under
this resolution and with the power to delegate such
Section 197, 198 and other applicable provisions of the Act
and Rules made thereunder, read with Schedule V of the authority to any person or persons) to borrow for the
purpose of business of the Bank, such sum or sums of
said Act or any statutory modification(s) or re-enactment
thereof for the time being in force, or otherwise as may be monies as they may deem necessary, notwithstanding the
permissible under the law. fact that the monies so borrowed and the monies to be
borrowed from time to time (apart from
RESOLVED FURTHER THAT in the event of any statutory (i) temporary loans obtained from the Bank’s bankers in the
amendment, modification or relaxation by the Central ordinary course of business and (ii) acceptances of
Government to Schedule V to the Companies Act, 2013, deposits of money from public repayable on demand or
or any other relevant Statutory enactment(s) thereof in otherwise and withdrawable by cheque, draft, order or
this regard, the Board of Directors be and are hereby otherwise and/or temporary loans obtained in the
authorised to vary or increase the remuneration, including ordinary course of business from banks, whether in India
salary, commission, perquisites, allowances etc. within or outside India) will exceed the aggregate of the paid up
such prescribed limit or ceiling and the said agreement capital of the Bank, its free reserves and securities
between the company and Mr. Uttam Tibrewal, be suitably premium, provided that the total amount so borrowed
amended to give effect to such modification, relaxation including the money already borrowed and the money
or variation without any further reference to the to be borrowed by the Board in any manner
members for their approval. permissible at any time shall not exceed
` 22,000 crore (Rupees Twenty-Two Thousand crore).
RESOLVED FURTHER THAT the Board of Directors of
the Bank be and is hereby authorised to do all deeds RESOLVED FURTHER THAT the Board of the Bank be and
things acts as may deemed necessary, in this regard but is hereby authorised to do all such acts, deeds and things
not limited to making correspondences in this regard with and to sign all such documents and writings as may be
RBI or any other regulatory authority and/or to settle all necessary, expedient and incidental thereto including
questions, difficulties or doubts that may arise in this delegating its powers under the resolution to give effect
regard as it may in its sole and absolute discretion deem to this resolution and for matters connected therewith or
fit and to do all such acts, deeds, matters and things as it incidental thereto.”
may consider necessary and desirable and to delegate all
or any of its powers herein conferred to any ITEM NO. 11: To issue securities/bonds/other permissible
instruments, in one or more tranches.
Director(s)/Officer(s) of the Bank, to give effect to this
resolution.”
To consider and, if thought fit, to pass the following
resolution as a Special Resolution:
ITEM NO. 10: To authorise Board of Directors to borrow
money in excess of paid up capital, free reserves and
“RESOLVED THAT pursuant to the provisions of Section
securities premium of Bank u/s 180 (1) (c) of the
42, 71, 180 and other applicable provisions, if any, of the
Companies Act, 2013, read with Rule 14 of the Companies
(Prospectus and Allotment of Securities) Rules, 2014 and
To consider and, if thought fit, to pass, the following
the Securities and Exchange Board of India (Issue and
resolution as a Special Resolution:
Listing of Debt Securities) Regulations, 2008, and Securities
and Exchange Board of India (Listing Obligations and
“RESOLVED THAT in supersession of the earlier resolution Disclosure Requirements) Regulations, 2015, as amended
passed by the members of the Bank in the AGM held on and the applicable provisions of the Banking Regulation
07th August 2018 and pursuant to the provisions of Section Act, 1949 (including any statutory amendment(s) thereto or
180 (1) (c) and other applicable provisions, if any, of the
modification(s) or re-enactment(s) thereof for the time
Companies Act, 2013 read with the Companies (Meetings of
being in force) and the rules, circulars and guidelines
Board and its Powers) Rules, 2014 (including any statutory
issued by Reserve Bank of India (RBI), from time to time
modification(s) or re-enactment(s) thereof for the time
and all other relevant provisions of applicable law(s),the
being in force) and as per the applicable provisions of
provisions of the Memorandum and Articles of Association
of the Bank and subject to such other approval(s),
Annual Report 2018-

consent(s), permission(s)
248|
and sanction(s) as may be necessary from the concerned “6J“: The Company may carry out consolidation and re-
statutory or regulatory authority(ies), the approval of the issuance of its debt securities, pursuant to and in terms of
Members of the Bank be and is hereby accorded to the the provisions of Regulation 20A of SEBI (issue and Listing of
Board of Directors (hereinafter referred to as ‘the Board’ Debt Securities) Regulations, 2008, as may be amended,
and which term shall be deemed to include any Committee from time to time.
of the Board or any other persons to whom powers are
delegated by the Board as permitted under the Companies RESOLVED FURTHER THAT the Board of Directors of
Act, 2013) for borrowing/raising funds denominated in Bank be and is hereby authorised to delegate all or any
Indian rupees or any other permitted foreign currency of its powers conferred herein to any Committee or any
by issue of debt securities, including but not limited to Director(s) or officer(s) of the Bank and to do all such
long-term bonds, non-convertible debentures, perpetual acts, deeds, matters and things as it may, in its absolute
debt instruments, Tier I/ Tier II Capital and Bonds or discretion, deem necessary, proper and desirable and to
such other debt securities as may be permitted under settle any question, difficulty or doubt that may arise with
RBI guidelines from time to time, on a private placement regard to the issue of the securities.”
basis and/or for making offers and/or invitations thereof
and/or issue(s)/ issuances thereof, on private Item No. 13: To approve amendments in Employee Stock
placement basis, for a period of one year from the date Option Scheme 2016.
hereof, in one or more tranches and/or series and under
one or more shelf disclosure documents and/or one or To consider and if thought fit, to pass, the following
more letters of offer and on such terms and conditions for resolution as a Special Resolution:
each series/tranches, including the price, coupon,
premium, discount, tenor etc. as deemed fit by the Board, “RESOLVED THAT pursuant to provisions of Section 62 (1)
as per the structure and within the limits permitted by (b) of Companies Act, 2013 and other applicable
RBI, as applicable of an amount not exceeding ` 12,000 provisions, if any, of Companies Act, 2013 read with Rule
crore (Rupees Twelve Thousand Crore) in domestic 12 of the Companies (Share Capital and Debentures)
and/or overseas market within the overall borrowing Rules, 2014 and Securities and Exchange Board of India
limits of the Bank and on such terms and conditions as (Share Based Employee Benefits) Regulations, 2014 and
may be approved by the Board, from time to time. Securities and Exchange Board of India (Listing Obligations
And Disclosure Requirements) Regulations, 2015 (including
RESOLVED FURTHER THAT the Board of Directors of any statutory modification(s), amendments or re-
Bank be and is hereby authorised to delegate all or any enactment(s) thereof for the time being in force) and
of its powers conferred herein to any Committee or any pursuant to the relevant clauses of Articles of Association
Director(s) or officer(s) of the Bank and to do all such of the Bank and such other rules, regulations, notifications,
acts, deeds, matters and things as it may, in its absolute guidelines and laws applicable in this regard, from time to
discretion, deem necessary, proper and desirable and to time, and subject to such approval(s) / consent(s) /
settle any question, difficulty or doubt that may arise with permission(s) / sanction(s), as may be required, from the
regard to the issue of the securities.” appropriate regulatory authorities / institutions / bodies
including but not limited to the Stock Exchanges,
Item No. 12: To alter Article of Association of the Bank. Securities and Exchange Board of India, the Reserve Bank
of India and further subject to such terms and conditions as
To consider and, if thought fit, to pass the following may be prescribed while granting such approval(s) /
resolution as a Special Resolution: consent(s) / permission(s) / sanction(s), and which may be
agreed to and accepted by the Board of Directors
“RESOLVED THAT pursuant to the relevant provisions of (hereinafter referred to as the “Board” which term shall be
the Articles of Association of the Bank, Section 14 and deemed to include any Committee thereof, including the
other applicable provisions of the Companies Act, 2013, if Nomination and Remuneration Committee (“NRC”)
any, and the rules made thereunder, the applicable constituted by the Board, for the time being exercising the
provisions of the Banking Regulation Act, 1949, the rules, powers conferred on the Board by this Resolution),
circulars and guidelines issued by the Reserve Bank of consent of shareholders be and is hereby accorded to
India from time to time (including any amendments, amend/alter the Employee Stock Option Scheme, 2016
statutory modification(s) and/ or re-enactment(s) thereof (“ESOP Scheme 2016”) by deleting the existing clause 5.4
for the time being in force) the insertion of new Article No. of the ESOP Scheme 2016 of the Bank relating to Exercise
6J after Article No. 6 I in the form and manner given below, Price and substituting in place thereof, the following
be and is hereby approved by the Members of the Bank. revised clause
5.4 and that the amended ESOP Scheme, 2016 as submitted
before this meeting be approved and adopted:
248|
Heading Existing Clause Revised Clause

3. A person can act as proxy on behalf of not exceeding
Exercise Price ` Exercise price of options shall be 50 members and holding in aggregate, not more than
140/-
(in `) Per ESOP determined as average of weekly 10% of the total share capital of the Bank carrying
high and low of volume weighted voting rights. A member holding more than ten percent
average price (VWAP) of AU Small
of the total share capital of the Bank carrying voting
Finance Bank Equity Shares on
rights may appoint a single person as proxy provided
the stock exchange having
that such person shall not act as proxy for any other
higher trading volume during the
last twenty-six weeks from the person or shareholder.
day preceding the date of grant.
4. Corporate members intending to send their authorised
RESOLVED FURTHER THAT it is hereby noted that the THE PROXY NEED NOT BE A MEMBER OF THE BANK.
amendments to the ESOP Scheme 2016 are not
prejudicial to the interests of the option holders.
RESOLVED FURTHER THAT for the purpose of giving

effect to the above resolution, the Board be and is
hereby authorized to do all such acts, deeds, matters and
things as may be necessary or expedient in this regard but
not limited delegate power conferred herein to any of the
committee constituted by the Bank or to any Director or
Directors or to any Committee of Directors or to any
Officer or Officers to settle all questions, difficulties or
doubts that may arise in this regard as it may in its sole
and absolute discretion deem fit and to do all such acts,
deeds, matters and to seek such approval/ consent from
the government departments as may be required in this
regard.”
BY THE ORDER OF THE BOARD OF DIRECTORS

FOR AU SMALL FINANCE BANK LIMITED
Sd/-
MANMOHAN PARNAMI
COMPANY SECRETARY
Membership No. F9999
PLACE: JAIPUR
DATE: 22nd April 2019
Registered Office: 19-A, Dhuleshwar
Garden, Ajmer Road, Jaipur - 302001,
Rajasthan Website: www.aubank.in
Tel: +91 0141 4110060
Fax: +91 0141 4110090
E-mail: investorrelations@aubank.in
Notes:
1. An Explanatory Statement pursuant to Section 102(1)

of the Companies Act, 2013 relating to the Special
Business to be transacted at the AGM is annexed
hereto.
2. A MEMBER ENTITLED TO ATTEND AND VOTE AT

THE AGM IS ENTITLED TO APPOINT A PROXY
TO ATTEND AND VOTE ON A POLL IN THE
AGM INSTEAD OF HIMSELF/HERSELF AND
Annual Report 2018-

representatives to attend the meeting are
requested to send a certified copy of the Board
Resolution/Power of Attorney to the Bank,
authorising their representative to attend and
vote on their behalf at the meeting.
5. In case of joint holders attending the meeting,

only such joint holder who is higher in the
order of names will be entitled to vote.
6. The instrument appointing the proxy, duly

completed in all respect, must be deposited at
the Bank’s Registered Office not less than 48
hours before commencement of the meeting. A
proxy form for the AGM is enclosed.
7. Members/Proxies/Authorised Representatives
should bring the duly filled Attendance Slip
enclosed herewith to attend the meeting.
8. The Register of Directors and Key Managerial

Personnel and their shareholding, maintained
under Section 170 and the Register of Contracts
or Arrangements in which the Directors are
interested, maintained under Section 189 of the
Companies Act, 2013 will be available for
inspection by the members at the AGM.
9. The Register of Members and Share Transfer

Books of the Bank will remain closed from
Saturday, 20th July 2019 to Friday, 26 th July 2019
i.e. for seven days (both days inclusive) for the
purpose of AGM.
10. Dividend on Equity shares as recommended by

the Board of Directors for the year ended 31st
March, 2019, if approved at the Meeting, will be
payable to those members who hold shares of
the Bank based on the beneficial ownership
details to be received from National Securities
Depository Limited and Central Depository
Services (India) Limited as at the Friday, 19th July
2019. Your dividend warrant is valid for payment
by the Company’s Bankers for three months from
the date of issue. Thereafter, please contact our
Registrar and Share Transfer Agent, M/s Link
Intime India Pvt. Ltd., C 101, 247 Park, L B S
Marg, Vikhroli West, Mumbai 400 083 Tel No:
+91 22- 49186000 Fax:
+91 22 49186060, Email:
rnt.helpdesk@linkintime.co.in for revalidation of
the warrants.
250|
2018-19 of the Bank is posted on the Bank’s website
11. In order to receive the dividend without loss of time,
all the eligible shareholders holding shares in Demat
mode are requested to update with their respective
Depository Participants, their correct Bank Account
Number, including 9 Digit MICR Code and 11digit
IFSC Code, E-Mail ID and Mobile No(s). This will
facilitate the remittance of the dividend amount as
directed by SEBI in the Bank Account electronically.
Updation of E-mail IDs and Mobile No(s) will enable
sending communication relating to credit of dividend,
un-encashed dividend, etc. Format for updation of
email ID and Bank Account detail is attached as
annexure to this AGM Notice.
12. Members wishing to claim unclaimed dividend

pertaining to FY 2017-18 are requested to correspond
with the Link Intime India Pvt. Ltd. or the Company
Secretary of the Bank, at the Bank’s registered office.
The Bankhasuploaded the details of
unclaimeddividend amounts lying with the Bank on
the website of the Bank
www.aubank.in/unpaidunclaimed-dividend-details
Members are requested to note that dividends, which

are not claimed within seven years from the date
of transfer to the Bank’s Unpaid Dividend Account,
will, as per the provisions of Section 124 of the
Companies Act, 2013 and rules made thereunder, be
transferred to the Investor Education and Protection
Fund. Further, pursuant to the provisions of Section
124(6) of the Act read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer
and Refund) Rules, 2016, as amended (the IEPF Rules),
all shares in respect of which dividend has not been
paid or claimed for seven consecutive years or more
shall be transferred to the demat account of the
Investor Education and Protection Fund authority (IEPF
Authority).
13. With a view to using natural resources responsibly, we

request shareholders to update their email address
with their depository participants to enable the Bank
to send all the communications electronically including
Annual Report, Notices and Circulars, etc.
14. The Annual Report for the financial year 2018-19, the
Notice of the 24th AGM and instructions for e-Voting,
along with the Attendance Slip and Proxy Form,
are being sent by electronic mode to all members
whose email addresses are registered with the
Bank/Depository Participant(s), unless a member
has requested for a physical copy of the documents.
For members who have not registered their email
addresses, physical copies of the documents are
being sent by the permitted mode.
15. Members may also note that the Notice of 24th

AGM and the Annual Report for the financial year
250|

particulars of their bank account maintained in India
i.e. www.aubank.in and at the website of the with complete name,
NSDL at www.evoting.nsdl.com. The physical
copies of the documents will also be available at
the Bank`s registered office for inspection during
the normal business hours between 10 AM to 5
PM on working days up to the date of the AGM.
Members who require communication in
physical form in addition to e-communication or
have any other queries, may please write to us at
investorrelations@aubank.in
16. Brief profile and other additional information

pursuant to Regulation 36 (3) of the SEBI
(Listing Obligations and Disclosure
Requirements) Regulations, 2015 and
Secretarial Standard on General Meetings
(SS-2) issued by The Institute of Company
Secretaries of India, in respect of the Directors
seeking appointment/reappointment at the
AGM, is furnished as annexure to the Notice.
The Directors have furnished
consent/declaration of their appointment/re-
appointment as required under the Companies
Act, 2013 and the Rules made thereunder.
17. The Securities and Exchange Board of India (SEBI)

has mandated the submission of the
Permanent Account Number (PAN) by every
participant in the securities market. Members
holding shares in electronic form are therefore,
requested to submit their PAN to their
Depository Participant(s).
18. Shareholders are requested to tender their

attendance slips at the registration counters at
the venue of the AGM and seek registration
before entering the meeting hall.
The Shareholder needs to furnish the printed

Attendance Slip, along with a valid identity proof
such as the PAN card, passport, AADHAR card
or driving license to enter the AGM venue.
19. Members are requested to:

a) notify the change in address if any, with Pin
Code numbers immediately to the Bank.
b) quote their Regd. Folio Number/DP and Client

ID No. in all their correspondence with the
Bank or its Registrar and Share Transfer
Agent ‘RTA’ i.e. Link Intime India Pvt. Ltd., C
101, 247 Park, L B S Marg, Vikhroli West,
Mumbai 400 083 Tel No: +91 22- 49186000
Fax: +91 22 49186060, Link Intime India
20. Non-Resident Indian Members are requested to

inform Registrar & Share Transfer Agent of the
Bank any change in their residential status on
return to India for permanent settlement,
Annual Report 2018-

branch account type, account number and address of
24. The voting rights of members shall be in proportion to
Bank with pin code number, if not furnished earlier.
their shares in the paid-up equity share capital of the
Members holding shares in electronic form may
Bank as on the cut-off date i.e. Friday, 19th July 2019.
contact their respective Depository Participants for
availing this facility.
Instructions for E-voting are as under:
21. Members desirous of getting any information about
How do I vote electronically using NSDL e-Voting
the accounts and/or operation of the Bank are
system?
requested to write to the Bank at least seven days
before the date of meeting to enable us to keep the
The way to vote electronically on NSDL e-Voting system
information ready at the meeting.
consists of ‘two steps’, which are mentioned below:
22. Voting option
Step 1: Log-in to NSDL e-Voting system at
Voting through Electronic Means www.evoting.nsdl.com
Pursuant to provisions of Section 108 of the
Step 2: Cast your vote electronically on NSDL
Companies Act, 2013 and Rule 20 of the Companies
e-Voting system.
(Management and Administration) Rules, 2014 (as
amended) and Regulation 44 of SEBI (Listing
Details on Step 1 is mentioned below:
2015 and Secretarial Standard on General Meetings
How to Log-in to NSDL e-Voting website?
(SS-2) issued by the Institute of Company Secretaries
1. Visit the e-Voting website of NSDL. Open web browser
of India, the Bank is pleased to provide members
by typing the following URL: www.evoting.nsdl.com
facility to exercise their right to vote at the AGM by
either on a Personal Computer or on a mobile.
electronic means and the business may be transacted
through e-Voting Services.
2. Once the home page of e-Voting system is launched,
click on the icon ‘Login’, which is available under the
The facility of casting the votes by the members using
‘Shareholders’ section.
an electronic voting system from a place other than
venue of the AGM (remote e-voting) will be provided
3. A new screen will open. You will have to enter your
by National Securities Depository Limited (NSDL).
User ID, your Password and a Verification Code
as shown on the screen. Alternatively, if you are
The Bank has approached NSDL for providing remote
registered for NSDL eservices i.e. IDEAS, you can log-in
e-voting services through e-voting platform. In this
at https://eservices.nsdl.com/ with your existing IDEAS
regard, your Demat Account/Folio Number will be
login. Once you log-in to NSDL eservices after using
enrolled by the Bank for your participation in remote e-
your log-in credentials, click on e-Voting and you can
voting on resolutions placed by the Bank on remote e-
proceed to Step 2 i.e. Cast your vote electronically.
Voting system.
4. Your User ID details are given below:
The Notice of the AGM of the Bank inter alia
indicating the process and manner of remote e- Manner of holding shares
i.e. Demat (NSDL or CDSL) Your User ID is:
voting process, along with printed Attendance Slip or Physical
and Proxy Form can be downloaded from
the link https://www.evoting.nsdl.com/ or link a) For Members 8 Character DP ID followed by 8 Digit
www.aubank.in who hold Client ID For example, if your DP ID is
shares in demat IN300*** and Client ID is 12****** then
23. The remote e-voting period commences on Monday, account with NSDL. your user ID is IN300***12******.
22nd July 2019 (9:00 a.m.) and ends on Thursday, b) For Members 16 Digit Beneficiary ID For example, if
25th July 2019 (5:00 p.m.). During this period, who hold your Beneficiary ID is 12**************
shares in demat then your user ID is 12**************
shareholders of the Bank, holding shares either in account with CDSL.
physical form or in dematerialised form, as on the cut- c) For Members EVEN Number followed by Folio
off date of Friday, 19th July 2019, may cast their vote by holding shares Number registered with the company
remote e-voting. The remote e-voting module shall be in Physical Form. For example, if folio number is 001***
disabled by NSDL for voting thereafter. Once the and EVEN is 101456 then user ID
vote on a resolution is cast by the shareholder, the is 101456001***
shareholder shall not be allowed to change it
subsequently.
252|
5. Your password details are given below: Details on Step 2 is given below:
How to cast your vote electronically on NSDL e-Voting
a) If you are already registered for e-Voting, then you system?
can user your existing password to login and cast your 1. After successful login at Step 1, you will be able to
vote. see the Home page of e-Voting. Click on e-Voting.
Then, click on Active Voting Cycles.
b) If you are using NSDL e-Voting system for the first
time, you will need to retrieve the ‘initial password’, 2. After click on Active Voting Cycles, you will be able to
which was communicated to you. Once you retrieve see all the companies ‘EVEN’ in which you are
your ‘initial password’, you need enter the ‘initial holding shares and whose voting cycle is in active
password’ and the system will force you to change status.
your password.
3. Select ‘EVEN NO. 110733’ of Bank for which you
c) How to retrieve your ‘initial password’? wish to cast your vote.
(i) If your email ID is registered in your demat 4. Now you are ready for e-Voting as the Voting
account or with the company, your ‘initial page opens.
password’ is communicated to you on your email
ID. Trace the email sent to you from NSDL from 5. Cast your vote by selecting appropriate options i.e.
your mailbox. Open the email and open the assent or dissent, verify/modify the number of shares
attachment i.e. a .pdf file. Open the .pdf file. The for which you wish to cast your vote and click on
password to open the .pdf file is your 8-digit ‘Submit’ and also ‘Confirm’ when prompted.
client ID for NSDL account, last 8 digits of client
ID for CDSL account or folio number for shares 6. Upon confirmation, the message ‘Vote cast successfully’
held in physical form. The .pdf file contains your will be displayed.
‘User ID’ and your ‘initial password’.
7. You can also take the printout of the votes cast by you
(ii) If your email ID is not registered, your ‘initial by clicking on the print option on the confirmation
password’ is communicated to you on your postal page.
address.
8. Once you confirm your vote on the resolution, you will
6. If you are unable to retrieve or have not received the not be allowed to modify your vote.
‘Initial password’ or have forgotten your password:
General Guidelines for shareholders
a) Click on ‘Forgot User Details/Password?’ (If you are 1 Institutional shareholders (i.e. other than individuals,
holding shares in your demat account with NSDL or HUF, NRI etc.) are required to send scanned copy (PDF/
CDSL) option available on www.evoting.nsdl.com. JPG Format) of the relevant Board Resolution/
Authority letter etc. with attested specimen signature
b) ‘Physical User Reset Password?’ (If you are holding of the duly authorised signatory(ies) who are
shares in physical mode) option available on authorised to vote, to the Scrutiniser by e-mail to
www.evoting.nsdl.com. cs.vmanda@gmail.com with a copy marked to
evoting@nsdl.co.in.
c) If you are still unable to get the password by
aforesaid two options, you can send a request at 2. It is strongly recommended not to share your
evoting@nsdl.co.in mentioning your demat account password with any other person and take utmost care
number/folio number, your PAN, your name and your
to keep your password confidential. Login to the e-
registered address.
Voting website will be disabled upon five unsuccessful
attempts to key in the correct password. In such an
7. After entering your password, tick on Agree to ‘Terms
event, you will need to go through the ‘Forgot User
and Conditions’ by selecting on the check box. Details/Password?’ or ‘Physical User Reset Password?’
option available on www.evoting.nsdl.com to reset
8. Now, you will have to click on ‘Login’ button. the password.
9. After you click on the ‘Login’ button, Home page of e- 3. In case of any queries, you may refer the Frequently
Voting will open. Asked Questions (FAQs) for Shareholders and e-Voting
user manual for Shareholders available at the
download section of www.evoting.nsdl.com or call on
toll free no.:
252|
1800-222-990 or contact Ms. Pallavi Mhatre,

28. The results of voting will be declared and the same
Manager,
along with the Scrutiniser’s Report will be published
NationalSecuritiesDepositoryLtd.,TradeWorld,‘A’Wing,
4th Floor, Kamala Mills Compound, Senapati Bapat on the website of the Bank (www.aubank.in) and the
Marg, Lower Parel, Mumbai – 400 013, at the website of NSDL (www.nsdl.com) immediately after
the declaration of result by the Chairman and the
designated email address:
same will also be communicated to BSE Limited and
pallavid@nsdl.co.in/evoting@nsdl.co.in or at
the National Stock Exchange of India Limited within
telephone no. +91 22 24994545 who will also address
48 hours from the conclusion of the AGM.
the grievances connected with the voting by
electronic means. Members may also write to the
Company Secretary at the email address:
29. Other information:
investorrelations@aubank.in or contact at telephone Any person, who acquires shares of the Bank and
no. 0141-4110060/61. becomes member of the Bank after dispatch of
the notice and holding shares as on cut-off date i.e.
Voting at AGM Friday, 19th July 2019, may obtain the login ID and
password by sending a request at evoting@nsdl.co.in or
The Chairman shall, at the AGM, at the end of
contact Bank’s RTA.
discussion on the resolutions on which voting is to
be held, allow voting with the assistance of
However, if you are already registered with NSDL for
scrutiniser, by use of polling paper/tab voting for all
remote e-Voting then you can use your existing user
those members who are present at the General
ID and password/PIN for casting your vote. If you
Meeting but have not cast their votes by availing the
forgot your password, you can reset your password by
remote e-Voting facility.
using ‘Forgot User Details/Password’ or ‘Physical
User Reset Password?’ option available on
25. Please note the following:
www.evoting.nsdl.com or contact NSDL at the toll free
A member may participate in the AGM even after no.: 1800-222-990.
exercising his right to vote through remote e-Voting
but shall not be allowed to vote again at the AGM. You can also update your mobile number and e-mail
id in the user profile details of the folio which may be
A person, whose name is recorded in the register used for sending future communication(s).
of members or in the register of beneficial owners
maintained by the depositories as on the cut-off 30. The route map of the venue of the AGM is given in the
date Notice.
i.e. Friday, 19th July 2019, only shall be entitled to avail
the facility of remote e-Voting as well as voting at the BY THE ORDER OF THE BOARD OF DIRECTORS
AGM through polling paper/tab voting. FOR AU SMALL FINANCE BANK
LIMITED
26. The Board of Directors have appointed CS Manoj
Maheshwari, Practicing Company Secretary Sd/-
(Membership No. FCS: 3355), as the Scrutiniser to MANMOHAN PARNAMI
scrutinise the polling and remote e-Voting process in COMPANY SECRETARY
a fair and transparent manner. Membership No. F9999
PLACE: JAIPUR
27. The Scrutiniser shall after the conclusion of voting at DATE: 22nd April 2019
the AGM, will submit consolidated scrutiniser’s report Registered Office: 19-A, Dhuleshwar Garden, Ajmer Road,
of the total votes cast in favour or against, if any, to Jaipur - 302001, Rajasthan
the Chairman or a person authorised by him in writing, Website: www.aubank.in
who shall countersign the same and declare results Tel: +91 0141 4110060
(consolidated) within 48 hours from the conclusion of Fax: +91 0141 4110090
the meeting. E-mail: investorrelations@aubank.in
Annual Report 2018-

Explanatory Statement pursuant to the provisions of Section 102(1) of
Companies Act, 2013
The following Statement sets out all material facts relating it would be in the interest of the Bank that Mr. Narendra
to the Special Business mentioned in the above Notice: Ostawal is appointed
ITEM NO. 5
Mr. Narendra Ostawal (DIN:06530414), who was
appointed as an Additional Director of the Bank w.e.f. 17 th
January, 2019 pursuant to the provisions of Section 161(1)
and other applicable provisions of the Companies Act,
2013 (the “Act”), holds office up to the date of this AGM
of the Bank or the last date on which the AGM should have
been held, whichever is earlier and is eligible for
appointment. In terms of Section 160 of the Act, the Bank
has received a notice in writing from a Member signifying
his intention to propose the candidature of Mr. Narendra
Ostawal for the office of Director. The candidature of Mr.
Narendra Ostawal was recommended by the Nomination
and Remuneration Committee (“NRC”) and approved by
Board.
Mr. Narendra Ostawal has furnished consent/declarations

for his appointment as required under the Act and the
Rules made thereunder.
Mr. Narendra Ostawal leads investment evaluation in

the financial services sector for his current employer viz.
Warburg Pincus India Private Limited (“WPIPL”).
He possesses a post graduate diploma in Business

Management from Indian Institute of Management,
Bangalore, Chartered Accountant from ICAI and
Commerce graduate and he is Managing Director of
WPIPL from 1st January 2015 till date. He has 19 years
post Chartered Accountancy experience and 16 years post
MBA experience which includes more than 3 years in
management consulting and 13 years in Investment
management.
Prior to his appointment as Additional Director on the

Board, he was acting as Nominee Director on behalf of
Redwood Investment Limited since 30th January 2018.
The NRC assessed the profile of Mr. Narendra Ostawal and
found him to be ‘fit and proper’ in terms of Reserve
Bank of India’s Circular on ‘Fit and proper’ criteria for
Directors of banks and recommended his appointment
to the Board of Directors. In terms of Sections 152, 160
and other applicable provisions of the Act, the Board of
Directors of the Bank, based on the recommendation of
the NRC having reviewed the profile of Mr. Narendra
Ostawal and found him a person of integrity, having
necessary knowledge, experience, expertise and is of
opinion that he meets the criteria for being appointed as
a Non-Executive Director. Considering his vast expertise
and knowledge in the field of Investment Management,
254|

as a Non-Executive Director on the Board of the
Bank. On appointment, he will be designated as Non-
Executive Director of the Bank to hold office for a
term of four (4) years commencing from 17th January
2019 and whose office shall be liable to retire by
rotation.
Appointment of Mr. Narendra Ostawal is in

compliance with the provisions of Section 10A of the
Banking Regulation Act, 1949. He has requisite
experience/expertise required under Section 10A (2)
of the Banking Regulation Act, 1949.
The brief profile of Mr. Narendra Ostawal, in terms of

the Secretarial Standards on General Meetings (SS-
2) issued by the Institute of Company Secretaries of
India has been provided as annexure to the Notice.
Mr. Narendra Ostawal does not hold any equity
shares of the Bank.
Your Directors, therefore, recommend the

appointment of Mr. Narendra Ostawal (DIN:
06530414) as a Non-Executive Director of the Bank,
liable to retire by rotation, as set forth in Item No. 5 of
this Notice.
No Director other than Mr. Narendra Ostawal

himself or any of the Key Managerial Personnel of
the Bank or their relatives are, directly or indirectly,
concerned or interested in the Resolution set out at
Item No. 5. Further, Mr. Narendra Ostawal is not
related to any Director or Key Managerial Personnel
of the Bank.
ITEM NO. 6
In terms of Regulation 17 (6) (a) of Securities and
Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulation, 2015, the
Board of Directors shall recommend all fees or
compensation (profit linked commission), if any paid
to Non-Executive Directors including Independent
Directors shall require approval of the
Shareholders in general meeting. The requirement
of obtaining approval of shareholders in general
meeting shall not apply to payment of sitting fees to
Non-Executive Directors, if made within the limits
prescribed under the Companies Act, 2013.
In view of the requirement, Board of Directors of the

Bank recommended that fees or compensation (profit
linked commission) to be paid to all Non-Executive
Directors shall not exceed one percent (1%) of net
profit. The Bank has always been in compliance of
above said & RBI regulations in this regard and the
amount shall not exceed the limit prescribed for non-
executive directors.
No Director other than Non-Executive Directors or

any of the Key Managerial Personnel of the Bank or
their relatives
Annual Report 2018-

are, directly or indirectly, concerned or interested in the
it is critical for the Bank to leverage his expertise,
Resolution set out at Item No.6
knowledge and experience. Mr. Agarwal’s achievement in
The Board of Directors recommends the passing of the the financial sector has received numerous recognition. He
Special Resolution as set out in Item No. 6 of the Notice. is recipient of many business awards notably ‘EY
Entrepreneur of the Year 2018’. He is responsible for
ITEM NO. 7 overall strategic planning providing guidance to the
Mr. Mannil Venugopalan was appointed as the executive management team of the Bank and Head of
Departments (HODs) of Treasury, Risk, Audit, Operations,
Independent Director (Part-Time) Chairman of the Bank
Digital Analytics, HR and Distributions among other
with effect from 19th April 2017 vide RBI Letter bearing
departments that reports to him.
Ref. No. DBR. Appt.No.12183/29.44.003/2016-17 dated
13th April 2017 up to a period ending 29th March 2020.
In view of above, the Nomination and Remuneration
Committee (“NRC”), at its meeting held on 22 nd April 2019,
Under the stewardship of Mr. Mannil Venugopalan,
reviewed the remuneration being paid to Mr. Sanjay
the Bank has performed well in all parameters and he
Agarwal as the Managing Director & CEO of the Bank and
has contributed immensely as Chairman of the Board.
recommended a revision in his remuneration, for the
His foresightedness and guidance helped Bank to achieve
approval of the Board.
and maintain standards of governance at all levels.
He brings to the Board his rich experience and insights on
Pursuant to the recommendation of the NRC, the Board of
areas of importance for committees and Board of the Bank.
Directors of the Bank at its meeting held on 22 nd April 2019
approved the revision in the remuneration by way of salary,
In view of this, the Nomination and Remuneration
allowances and perquisites payable to Mr. Sanjay Agarwal
Committee (“NRC”) of the Board, at its meeting held
as the Managing Director & CEO of the Bank, subject to
on 22nd April 2019, reviewed the compensation (profit
the approval of the Shareholders of the Bank and the
linked commission) of Mr. Mannil Venugopalan and
Reserve Bank of India.
recommended a revision in his compensation (profit linked
commission), for the approval of the Board. Pursuant to the
The brief profile of Mr. Sanjay Agarwal, in terms of the
recommendation of the NRC, the Board of Directors of the
Secretarial Standards on General Meetings (SS-2) issued
Bank at its meeting held on 22nd April 2019, approved
by the Institute of Company Secretaries of India has been
the revision in the compensation (profit linked
provided as annexure to the Notice.
commission) payable to Mr. Mannil Venugopalan as the
Chairman of the Bank, subject to the approval of the
No Director and Key Managerial Personnel of the Bank
Shareholders of the Bank and the Reserve Bank of
other than Mr. Sanjay Agarwal himself or their relatives
India.
are, directly or indirectly, concerned or interested in the
Resolution set out at Item No. 8 except to the extent of
The brief profile of Mr. Mannil Venugopalan, in terms
their shareholding in the Bank.
of the Secretarial Standards on General Meetings (SS-2)
issued by the Institute of Company Secretaries of India
Further, Mr. Sanjay Agarwal is not related to any Director
has been provided as annexure to the Notice. Mr. Mannil
or Key Managerial Personnel of the Bank.
Venugopalan does not hold any equity shares of the Bank.
The Board of Directors recommends the passing of the
No Director other than Mr. Mannil Venugopalan himself
Ordinary Resolution as set out in Item No. 8 of the Notice.
or any of the Key Managerial Personnel of the Bank or
their relatives are, directly or indirectly, concerned or
interested in the Resolution set out at Item No. 7. Further,
ITEM NO. 9
During the year ended 31st March 2019, under the
Mr. Mannil Venugopalan is not related to any Director or
leadership of Mr. Uttam Tibrewal, Whole-Time Director,
Key Managerial Personnel of the Bank.
Bank witnessed rapid growth in the retail business with
consistent growth in revenue and profits. Mr. Uttam
Tibrewal has demonstrated his ability to take up higher
Ordinary Resolution as set out in Item No.7 of the Notice.
responsibilities and presently, retail assets and liability
verticals report to him. His dynamic vision, strategic focus,
ITEM NO. 8
and entrepreneurial skills continue to guide the growth of
During the year ended 31st March 2019, under the
the Bank’s businesses.
leadership of Mr. Sanjay Agarwal, Managing Director &
CEO, the Bank has achieved all-round progress in terms
Considering the above, the Nomination and Remuneration
of business growth, profitability, branch expansion, ATM
Committee (“NRC”) at its meeting held on 22nd April 2019
network expansion and improved brand equity of the Bank.
reviewed the remuneration being paid to Mr. Uttam
In a competitive and rapidly changing Banking sector,
Tibrewal
256|
purpose of business activities of the Bank.
as the Whole-Time Director of the Bank and recommended
a revision in his remuneration, for the approval of the
Board.
Pursuant to the recommendation of the NRC, the Board

of Directors of the Bank at its meeting held on 22 nd April
2019, approved the revision in the remuneration by way of
salary, allowance and perquisites payable to Mr. Uttam
Tibrewal as the Whole-time Director of the Bank subject to
the approval of the Shareholders of the Bank and the
Reserve Bank of India.
The brief profile of Mr. Uttam Tibrewal, in terms of the

Secretarial Standards on General Meetings (SS-2) issued
by the Institute of Company Secretaries of India, has been
provided as annexure to this Notice.
No Director and Key Managerial Personnel of the Bank

other than Mr. Uttam Tibrewal himself or their relatives are,
directly or indirectly, financially or otherwise, concerned or
interested in the Resolution set out at Item No. 9 except to
the extent of their shareholding in the Bank.
Further, Mr. Uttam Tibrewal is not related to any Director or

Key Managerial Personnel of the Bank.

Ordinary Resolution at Item No. 9 of the Notice to the
members of the Bank.
ITEM NO. 10
In terms of good asset financing led growth in FY 2018-19
and projected financing needs for FY 2019-20, the Bank
will be required to borrow funds for its business needs.
Also, the Board of Directors of the Bank envisages
requirement of funds in future. As per the provisions of
Section 180(1) (c) of the Companies Act, 2013, the Board can
borrow money subject to the condition that the money to
be borrowed together with the monies already borrowed
by the Bank (apart from deposits of money accepted
from public in the ordinary course of its business,
temporary loans obtained from the Company’s bankers in
the ordinary course of business) shall not exceed the
aggregate, for the time being, of the paid-up share
capital, free reserves and securities premium of Bank,
that is to say, reserves not set apart for any specific
purpose, unless the Shareholders have authorised the
Board to borrow the monies up to some higher limits.
Hence, it is proposed to empower and authorise the Board

of Directors of the Bank to borrow money from any
Financial Institutions (FIs), Foreign Institutional Investors
(FII’s), Bodies Corporate or Business Associates or any
other person or entity etc., in excess of paid up capital,
free reserves and securities premium of the Bank up to a
sum not exceeding
` 22,000 crore (Rupees Twenty Two Thousand Crore) for
the
256|

depending upon the prevailing market conditions.
None of the Director or Key Managerial Personnel
of the Bank or their relatives are, directly or
indirectly, financially or otherwise, concerned or
interested in the Resolution set out at Item No. 10.
The Board of Directors recommends the passing of

the Special Resolution as set out in Item No. 10 of the
Notice.
Item No. 11
Section 42 of the Companies Act, 2013 read with
Rule 14 of the Companies (Prospectus and Allotment
of Securities) Rules, 2014 provides that Bank can issue
securities including non-convertible debentures
(NCDs) on a private placement basis subject to the
condition that the proposed offer of debt securities or
invitation to subscribe to debt securities has been
previously approved by the Shareholders of the Bank,
by means of a special resolution, for each of the
offers or invitations. In case of an offer or invitation
for NCDs, it shall be sufficient if the company passes
a special resolution only once in a year for all offer(s)
or invitation(s) for issue of such NCDs on a private
placement basis, during the period of one year from
the date of passing of the special resolution.
Keeping in view the Bank’s projections in domestic

operations, the Bank may need to raise additional
funds in one or more tranches in Indian as well as
overseas market to maintain the desired capital to
risk weighted assets ratio (CRAR) and to meet the
funds requirements by issue of debt securities
denominated in Indian rupees or any other
permitted foreign currency (including but not limited
to long-term bonds, green bonds, non-convertible
debentures, perpetual debt instruments and Tier I
/ Tier II Capital Bonds or such other debt
securities as may be permitted under RBI
guidelines from time to time), on a private
placement basis and/or for making offers and/or
invitations thereof and /or issue(s)/ issuances
thereof, on a private placement basis, during the
period of one year from the date of passing of the
special resolution.
Considering the above, the Board of Directors of the

Bank at its meeting held on 22 nd April 2019 has
proposed to obtain the consent of the Shareholders
of the Bank for borrowing/raising funds in Indian
currency/ foreign currency by issue of debt
securities in domestic and/ or overseas market, in
one or more tranches as per the structure and
within the limits permitted by the Reserve Bank of
India and other regulatory authorities to eligible
investors of an amount not exceeding `12,000 crore
(Rupees Twelve Thousand Crore), on a private
placement basis during a period of one year from
the date of passing of the special resolution. The
said debt securities would be issued by the Bank in
accordance with the applicable statutory guidelines,
for cash either at par or premium to face value
Annual Report 2018-

None of the Director or and Key Managerial Personnel of
the Bank or their relatives are, directly or indirectly, Item no. 13
financially or otherwise, concerned or interested in the Bank through shareholders’ approval on 10th October
Resolution set out at Item No. 11. 2016 approved an Employee Stock Option Scheme, 2016
(“ESOP 2016”) for creating a pool of 3,50,000 options at a
The Board of Directors recommends the passing of the price of
Special Resolution at Item No. 11 of the Notice to the ` 840/- per option and post approval of Bonus Issue, the price
members of the Bank. and nos. of options were revised proportionately, and
revised Options were 21,00,000 and revised Exercise Price
was ` 140/- per option.
Item No. 12
To comply with the provisions of SEBI circular
The said ESOP Scheme 2016 was subsequently amended on
CIR/IMD/DF-1/67/2017 dated 30th June 2017, the Bank is
24th January 2017 pursuant to the approval of the
required to incorporate enabling provisions in its Articles of
shareholders via postal ballot. The equity shares of the
Association, to carry out any consolidation and re-issuance
Bank were listed on 10th July 2017, thereafter the ESOP
of debt securities, pursuant to and in terms of the
Scheme 2016 was put up to the members for ratification in
provisions of Regulation 20A of SEBI (Issue and Listing of
Debt Securities) Regulations, 2008, as may be amended, the Annual General Meeting held on 27th September 2017
which was duly approved.
from time to time.
Further, Members are hereby informed that total number of
The SEBI circular allows corporates a maximum of 17
options under the ESOP Scheme 2016 were 21 Lakhs out
International Securities Identification Numbers (ISINs)
of which in different tranches, Bank granted 12.35 Lakhs
maturing in any financial year - a maximum of 12 ISINs for
options including options available for reissue and allotted
plain vanilla debt securities and a maximum of 5 ISINs for
1.69 Lakhs equity shares on exercise of options at a price
structured products/ market linked debt securities. If fresh
of ` 140/- each. The total number of options to be granted
issuances maturing in a financial year need to be made in
under ESOP Scheme 2016 on an accumulated basis are
excess of the 17 ISINs permitted in that year then prior
8.65 Lakhs.
issue(s) under one or more of the existing ISINs need to be
reissued.
Below is the summary of Options under ESOP Scheme 2016:
Details of ESOP Scheme 2016
However, to carry out such consolidation and re-issuance Name of Total Nos. of Options granted Balance Options
of debt securities, clause (a) of Regulation 20A of the SEBI Scheme Options till 31st March 2019 available for Allocation
(Issue
and Listing of Debt Securities) Regulations, 2008 requires The Board of Directors recommends the passing of the Special
an Resolution at Item No. 12 of the Notice to the members of the
enabling provision in the Article of Association. Bank.
Pursuant to the terms of the provisions of Section 14

of Companies Act, 2013, any alteration in the Articles of
Association of the Bank requires shareholders’ approval,
by way of a Special Resolution.
Accordingly, the approval of Members is being sought by

way of a Special Resolution as set out at Item No. 12 of this
Notice, authorising for alteration of Articles of Association of
the Bank and consequential insertion of new Article no. 6J
after the Article No. 6I, in the Articles of Association of the
Bank.
A Copy of the Articles of Association with the proposed

changes is available at the registered office of the Bank for
inspection by the Members all working days during normal
business hours from 10 AM to 5 PM, up to the date of AGM.
None of the Director or and Key Managerial Personnel of

the Bank or their relatives are, directly or indirectly,
financially or otherwise, concerned or interested in the
Resolution set out at Item No. 12.
258|

ESOP 2016 21,00,000 12,35,372 8,64,628
The proposal for amendment in the exercise price of

options under ESOP Scheme 2016 is based on the following
rationale:
1. Availability of 8.65 Lakhs options for Grant:

On approval of amendment of Exercise Price of
ESOP Scheme 2016, 8.65 Lakhs options shall be
available for grant over the years excluding the
Options that will be available for re-issue from
total ESOP Pool. Grant in ESOP Pool under ESOP
Scheme 2015 – Plan A & B have been carried out.
At present Bank can grant options under ESOP
Scheme 2016 and 2018.
2. Harmonisation of ESOP Scheme 2016 & ESOP

Scheme 2018: Due to dissimilarity in the
exercise price of ESOP Scheme 2016 and the
ESOP Scheme 2018 which was framed post
listing of the Bank, which is governed by
Securities and Exchange Board of India (Shared
Based Employee Benefits) Regulations, 2014.
The pricing of options under ESOP Scheme
2018 is linked with market price, hence there is
need to bring harmonisation in ESOP Scheme
2016 and ESOP Scheme 2018 in terms of exercise
price.
3. Re-Pricing of Exercise Price under ESOP Scheme 2016:

In order to have a uniformity in the pricing for Options in
Annual Report 2018-

ESOP schemes and considering the quantum of and Remuneration Committee (‘NRC’) in compliance
options that are yet to be granted under ESOP Scheme of Securities and Exchange Board of India (Shared
2016, it is pertinent to revise the exercise price for Based Employee Benefits) Regulations, 2014 with per
options available in ESOP Scheme 2016 as determined option exercisable into equivalent number of Equity
by the Nomination shares.
Disclosures as required under Regulation 6 (2) of Securities and Exchange Board of India (Share Based Employee
Benefits) Regulations, 2014
S.
No Particulars Description
.
1. Brief description of the scheme(s) Total number of options under the ESOP Scheme 2016 was 21 Lakhs out of which
Bank granted 12.35 Lakhs options and 8.65 Lakhs options shall be available for
grant under ESOP Scheme 2016.
2. Total number of options, SARs, shares or 8.65 Lakhs options shall be available for grant under ESOP Scheme
benefits, as the case may be to be granted 2016 excluding the Options that will be available for re-issue from total ESOP Pool.
3. Identification of classes of employees entitled to AU EMPLOYEE STOCK OPTION SCHEME 2016 shall extend to employees of the
participate and be beneficiaries in the scheme(s) Bank as determined by the Nomination and Remuneration Committee(“NRC”). The
scheme shall also be extended to new recruits of the Bank, as may be determined
by NRC from time to time.
4. Requirements of vesting and period of vesting The continuity of employee in the services of the Bank shall be the primary
requirement of the vesting. Options granted under this scheme would vest after
one year but not later than six years from the date of 1st vesting.
5. Maximum period (subject to regulation 18(1) Options granted under this scheme would vest after one year but not later than six
and 24(1) of the regulations, as the case may years from the date of 1st vesting.
be) within which the options / SARs / benefit
shall be vested
6. Exercise price, SAR price, purchase price or Exercise price of options shall be determined as average of weekly high and low of
pricing formula volume weighted average price (VWAP) of AU Small Finance Bank Equity Shares on
the stock exchange having higher trading volume during the last twenty-six weeks
from the day preceding the date of grant.
7. Exercise period and process of exercise The exercise period shall be within 6 years from the date of 1st Vesting date and
employees shall be required to submit their exercise notice electronically/physical
form to the Bank for exercising their options.
8. The appraisal process for determining the The criteria for determining the nos. of Options to be granted to employees decided
eligibility of employees for the scheme(s) on the basis of rating, objective assessment of the performance of employees,
tenure of service, their contribution and proposed role in the Bank.
9. Maximum number of options, SARs, shares, 8.65 Lakhs options shall be available for grant under ESOP Scheme 2016, which is
as the case may be to be issued per employee to be granted by NRC to employees excluding the Options that will be available for
and in aggregate re-issue from total ESOP Pool.
10. Maximum quantum of benefits to be provided As may be decided by Nomination and Remuneration committee of the Board.
per employee under a scheme(s)
11. Whether the scheme(s) is to be implemented The Scheme is administered through a Trust, except corporate action in this regard
and administered directly by the company or including allotment of securities which is to be carried out by the Bank.
through a trust
12. Whether the scheme(s) involves new issue of Both i.e. New issue of shares by Bank and secondary acquisition by the
Trust. shares by the company or secondary acquisition
by the trust or both
13. Amount of loan to be provided for As may be decided by Nomination and Remuneration committee of the Board.
implementation of the scheme(s) by the
company to the trust, its tenure, utilization,
repayment terms, etc.
14. Maximum percentage of secondary acquisition As may be decided by Nomination and Remuneration committee of the Board.
(subject to limits specified under the regulations)
that can be made by the trust for the purposes
of the scheme(s);
258|
Disclosures as required under Regulation 6 (2) of Securities and Exchange Board of India (Share Based Employee
Benefits) Regulations, 2014
S.
No Particulars Description
.
15. Company shall confirm to the accounting The Bank shall confirm to the applicable Accounting Standards, Companies Act,
policies specified in regulation 15 2013 and SEBI guidelines as may be applicable including the disclosure and
accounting policies as specified in the SEBI guidelines and such other guidelines
applicable from time to time shall be complied by the Bank.
16. Method which the company shall use to value The Bank to use one of the applicable methods to value its options and difference
its options or SARs in value of shares and grant price if any shall be amortized and it shall be disclosed
in the Board’s Report. Also the impact of this difference on profits and on Earnings
Per Share (EPS) of the Bank shall be disclosed in the Board’s Report.
17. In case the company opts for expensing of share It is hereby confirmed that the details as required herein will be disclosed in
the based employee benefits using the intrinsic Board’s Report.
value, the difference between the employee
compensation cost so computed and the
employee compensation cost that shall have
been recognized if it had used the fair value,
shall be disclosed in the Directors’ report and
the impact of this difference on profits and on
earnings per share (“EPS”) of the company
shall
also be disclosed in the Directors’ report.’
18. Reference of ‘AU Financiers (India) Limited’ where ever used in the said scheme has been replaced with ‘AU Small Finance Bank
Limited’ (“ Bank”) pursuant to obtaining of banking license and becoming Scheduled Commercial Bank.
19. Exercise form for exercising option has been revised in accordance with format available in online software.
As per Securities and Exchange Board of India (Share

Based Employee Benefits) Regulations, 2014, the BY THE ORDER OF THE BOARD OF DIRECTORS
necessary amendments and variations to the ESOP Scheme FOR AU SMALL FINANCE BANK
2016 need to be approved by the shareholders of the Bank LIMITED
by way of a special resolution and accordingly the same is
being placed before the shareholders for their approval. Sd/-
MANMOHAN PARNAMI
None of the Director or any of the Key Managerial COMPANY SECRETARY
Personnel (KMPs) of the Bank or their relatives are, PLACE: JAIPUR Membership No. F9999
directly
or indirectly, concerned or interested in the Resolution as DATE: 22nd April 2019
Registered Office: 19-A, Dhuleshwar Garden, Ajmer Road,
set out in Item No. 13 except to the extent of ESOP
Jaipur - 302001, Rajasthan
granted to KMPs, if any and to the extent of their
Website: www.aubank.in
shareholding in the Bank.
Tel: +91 0141 4110060/6660666
Fax: +91 0141 4110090
The Board of Directors recommends the passing of special
E-mail: investorrelations@aubank.in
resolution set out in Item No. 13 of the Notice to the
members of the Bank.
Annual Report 2018-

BRIEF PROFILE AND OTHER INFORMATION OF DIRECTORS BEING APPOINTED / RE-APPOINTED / WHOSE
REMUNERATION IS BEING REVISED, AS SET OUT IN THIS NOTICE, IN TERMS OF THE REGULATION
36(3) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND
THE SECRETARIAL STANDARD ON GENERAL MEETINGS (SS-2) ISSUED BY THE INSTITUTE OF THE
COMPANY SECRETARIES OF INDIA.
Annexure to item number 5

Age 41 Years
Date of first appointment on Board 30th January 2018
Qualification Mr. Narendra Ostawal is qualified & experienced professional and possesses a postgraduate
diploma in Business Management from Indian Institute of Management, Bangalore, Chartered
Accountant from ICAI and a Commerce graduate.
Brief Resume including experience Mr. Narendra Ostawal is the Additional Director (Non-Executive) of the Bank.
He is Managing Director of Warburg Pincus India Private Limited (WPIPL) from 1st January
2015 till date. He has 19 years post Chartered Accountancy experience and 16 years
post MBA which includes more than 3 years in management consulting and 13 years in
Investment management.
Prior to his appointment as Additional Director (Non-Executive) on the Board, he was acting
as Nominee Director on behalf of Redwood Investment Limited from 30 th January 2018 to
16th January 2019.
Nature of his expertise in specific Mr. Ostawal has vast experience in the investment evaluation in the financial services sector,
functional areas financial accounting & fund management.
Other Directorship • Warburg Pincus India Private Limited
• Laurus Labs Limited
• D B Power Limited
• DB Power (Madhya Pradesh) Limited
• Diligent Power Private Limited
• Decore Thermal Power Private Limited
• Computer Age Management Services Private Limited
• Sterling Software Private Limited
• Fusion Micro Finance Private Limited
• Indiafirst Life Insurance Company Limited
• Carmel Point Investment India Private Limited
Chairmanship/Membership of
Laurus Labs Limited
Committees in other listed entities in
Chairman - Stakeholder Committee
which position of Director is held
Member - Risk Management Committee
Member - Corporate Social Responsibility Committee
Member - Nomination and Remuneration Committee
Relationship with other Directors,
None
Managers and other Key
Managerial Personnel of the
Company
No. of equity shares held in the Bank Nil
No. of Board meetings attended 3
during the year
Terms and conditions of appointment Proposed Non-Executive Director, liable to retire by rotation and post approval at AGM, he shall
or re-appointment be director for a period of four (4) years from date of appointment, i.e. 17th January 2019.
Compensation sought to be paid Compensation sought to be paid: Nil

Compensation last drawn: Nil
260|

Age 74 Years
Date of first appointment on Board 27th August 2011
Qualification Mr. Mannil Venugopalan holds Bachelor’s degree in Commerce and Certified Associate of the
Indian Institute of Bankers (CAIIB).
Brief Resume including experience Mr. Mannil Venugopalan is the Independent Director (Part-Time) Chairman of the Bank.
He was appointed w.e.f 27th August 2011 as an Additional Director and was appointed as
Non-Executive Director on 26th September 2012. Subsequently, he was designated as
an Independent Director on 30th May 2013 and reappointed as an Independent Director
on 30th March 2015. Pursuant to the RBI approval dated 13th April 2017, his designation
was approved as Independent Director (Part-Time) Chairman of the Bank.
Prior to joining us, he was Managing Director & CEO of Federal Bank, Chairman &
Managing Director of Bank of India, Executive Director of Union Bank of India and held
other leadership positions.
He has over 49 years of experience in the field of Finance and Banking industry.
Nature of his expertise in specific

functional areas Mr. Venugopalan has experience and expertise in banking and financial services.
Other Directorship • LICHFL Asset Management Company Limited
• Shreyas Shipping And Logistics Limited
• Shaolin Trusteeship Private Limited
• Shri Kailash Logistics (Chennai) Limited
• Shivalik Agro Poly Products Limited
• IL&FS Environmental Infrastructure and Services Limited
Chairmanship/Membership of Shreyas Shipping and Logistics Limited
Committees in other listed entities in Member- Audit Committee
Relationship with other Directors, None
Managerial Personnel of the
Company
No. of equity shares held in the Bank Nil

during the year
Terms and conditions of appointment Independent Director (Part-Time) Chairman, not liable to retire by rotation.
or re-appointment
Compensation sought to be paid Compensation Sought to be Paid: Profit linked commission of
` 25,00,000/- (Rupees Twenty Five Lakh only) subject to approval of RBI and
sitting fees for attending the Board & Committee Meetings.
Compensation Last Drawn: Compensation (Profit linked commission
of ` 17,00,000/- (Rupees Seventeen lakh only) as approved by RBI and
sitting fees for attending the Board & Committee Meetings.
Annual Report 2018-

Mr. Sanjay Agarwal
Age 48 Years
Date of first appointment on Board 22nd January, 2003
Qualification Mr. Sanjay Agarwal is Chartered Accountant and holds Bachelor’s degree in Commerce
from the Government College, Ajmer.
Brief Resume including experience Mr. Sanjay Agarwal is the Managing Director & CEO of the Bank. He is Chartered Accountant
and holds Bachelor’s degree in Commerce from the Government College, Ajmer. He has been
associated with the organization since 10th January, 1996 and was first appointed as
Managing Director on 14th February 2008. Subsequently, he was re-appointed as Managing
Director on 14th February 2013. Pursuant to the RBI approval dated 13th April 2017, his
designation was approved as a Managing Director & CEO with effect from 19th April 2017. He
has over 23 years of experience in the Banking and Finance industry.
Nature of his expertise in specific Mr. Agarwal has vast experience in field of Accounting, Financial Services, Credit Risk
functional areas Management, Treasury Management and Strategic planning.
Other Directorship Nil
Chairmanship/Membership of Nil
Managerial
Personnel of the Company
No. of equity shares held in the Bank 5,67,66,359 equity shares i.e. 19.42% of Paid up Share Capital.
during the year
Terms and conditions of appointment Executive Director liable to retire by rotation
or re-appointment
Remuneration sought to be paid Remuneration details sought to be paid: Covered in Item No.8 of the Notice of AGM and is
subject to approval of Reserve Bank of India and members of the Bank.
Remuneration last Drawn: Basis Salary, allowances & other benefits were
` 1.725 Crore p.a. and other perquisites as approved by RBI vide its letter
dated 21st February 2019.

Mr. Uttam Tibrewal – Whole-Time Director
Age 48 Years
Date of first appointment on Board 22nd January, 2005
Qualification Mr. Uttam Tibrewal holds a Bachelor’s degree in Commerce from Delhi University.
Brief Resume including experience Mr. Uttam Tibrewal is the Whole-Time Director of the Bank. He has been associated with
the organization since the year 2003 as Head of Business Operations and was appointed
as Whole-Time Director on 14th February 2008. Subsequently, he was reappointed as
Whole- Time Director on 14th February 2013. Pursuant to the RBI approval dated 13th April
2017, his designation was approved as a Whole-Time Director of the Bank with effect from
19th April 2017. He has over 22 years of experience in the financial services & retail.
Nature of his expertise in specific Mr. Uttam Tibrewal has vast experience in the field financial services, including Financing to
functional areas Small Business covering MSMEs and retail loans.
Other Directorship Nil
Chairmanship/Membership of Nil
Managers and other Key Managerial
Personnel of the Company
No. of equity shares held in the Bank 35,44,673 equity shares i.e. 1.21% of Paid up Share Capital.
during the year
Terms and conditions of appointment Executive Director liable to retire by rotation
or re-appointment
Remuneration sought to be paid Remuneration details sought to be paid: Covered in Item No.9 of the Notice of AGM and is
subject to approval of Reserve Bank of India and members of the Bank.
Remuneration Last Drawn: Basis Salary, allowances & other benefits were ` 1.495 Crore p.a.
and other perquisites as approved by RBI vide its letter dated 21st February 2019.
262|
Route Map of the Venue for Annual General Meeting to be held on
Friday, 26th July 2019 at 04:00 p.m.
ATTENDANCE SLIP
CIN: L36911RJ1996PLC011381
Registered Office: 19 - A, Dhuleshwar Garden, Ajmer Road, Jaipur - 302001, Rajasthan
I hereby record my presence at the 24th ANNUAL GENERAL MEETING (“AGM”) of AU SMALL FINANCE BANK LIMITED on
Friday, 26th July 2019 at the Suryavanshi Mahal – Ground, Floor, ITC Rajputana, Palace Road, Jaipur - 302006,
Rajasthan, India at 04:00 p.m.
Folio No.............................................. DP ID............................................ Client ID................................................................................
Name of Member....................................................................................................................................................................................
Name of Proxy Holder............................................................................................................................................................................
Number of Shares Held..........................................................................................................................................................................
Signature of Member/Proxy
Notes: Members/Proxy holders are requested to produce the attendance slip duly signed for admission to the
Meeting hall.
Note
Form No. MGT-11
Proxy Form
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies
(Management and Administration) Rules, 2014]
CIN: L36911RJ1996PLC011381
Name of the Bank: AU SMALL FINANCE BANK LIMITED
Registered office: 19 – A, Dhuleshwar Garden, Ajmer Road, Jaipur - 302001,
Rajasthan Website: www.aubank.in | E-mail: investorrelations@aubank.in
Name of the member(s):........................................................................................................................................................................

Registered Address:................................................................................................................................................................................
E-mail Id:..................................................................................................................................................................................................
Folio No/Client Id:...................................................................................................................................................................................
DP ID:........................................................................................................................................................................................................
I/We , being the member(s) of AU SMALL FINANCE BANK LIMITED, holding shares of the above-named
Bank, hereby appoint
1. Name:………………………........................................…………………Address:……………………………................……………………………………...
E-mail ID: ………………………......................................…………………Signature….........................................................or failing him
2. Name:…………………………...................................……………………Address:………………………..............…………………………………………….
E-mail ID: ………………………......................................…………………Signature….........................................................or failing him
3. Name:…………………………..................................……………………Address:………………………...............…………………………………………….
E-mail ID: ………………………......................................…………………Signature…………………….........................................………………………
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 24th AGM of the Bank, to be held
on Friday, 26th July 2019 at 04:00 p.m. at Suryavanshi Mahal – Ground, Floor, ITC Rajputana, Palace Road, Jaipur - 302006,
Rajasthan, India and/or at any adjournment thereof in respect of such resolutions as indicated below: -
S. No. Resolution For Against
1. To consider and adopt the Audited Financial Statements of the Bank for the Financial Year ended
31st March 2019 and the reports of the Board of Directors and the Auditors thereon
2. To declare dividend of ` 0.75 per equity share of ` 10 each for the Financial Year 2018-19.
3. To appoint a Director in place of Mr. Uttam Tibrewal (DIN: 01024940), who retires by rotation and
being eligible, has offered himself for re-appointment
4. To ratify the appointment of M/S S.R. BATLIBOI & ASSOCIATES LLP, Chartered Accountants
(Registration No. 101049W/E300004) as the Statutory Auditors of the Bank
5. To appoint Mr. Narendra Ostawal (DIN: 06530414) as a Director (Non-Executive)
6. To approve fees or compensation (profit linked commission) payable to Non-Executive Directors,
including Independent Directors
7. To revise the compensation (Profit Linked Commission) payable to Mr. Mannil Venugopalan
(DIN:00255575), as the Independent Director (Part-Time) Chairman
8. To revise the remuneration payable to Mr. Sanjay Agarwal (DIN 00009526), as the
Managing Director & CEO
9. To revise the remuneration payable to Mr. Uttam Tibrewal (DIN: 01024940), as the
Whole-time Director
10. To authorise Board of Directors to borrow money in excess of paid up capital, free reserves and
securities premium of Bank u/s 180 (1) (c) of the Companies Act, 2013
11. To issue of securities/bonds/other permissible instruments, in one or more tranches
12. To alter Article of Association of the Bank
13. To approve amendments in Employee Stock Option Scheme 2016
Signed this day of 2019

Signature of shareholder Affix
` 1/-
Signature of Proxy Holder(s)
Reven
ue
Notes:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the
Bank addressed to the ‘Company Secretary’, not later than 48 hours before the commencement of the Meeting.
2. A person can act as proxy on behalf of Members up to and not exceeding fifty and holding in the aggregate not
more than ten percent of the total share capital of the Bank carrying voting rights. Further, a Member holding
more than ten percent of the total share capital of the Bank carrying voting rights, may appoint a single person as
proxy and such person shall not act as proxy for any other person or Member.
It is optional to put a (√) in the appropriate column against the Resolutions indicated in the Box. If you leave the
‘For’ or ‘Against’ column blank against any or all Resolutions, your proxy will be entitled to vote in the manner
as he/she thinks appropriate.
Note
Updation Form for Shareholders
UPDATION OF EMAIL ID & BANK ACCOUNT DETAILS

* Updation of contact details: Kindly update your email id and contact details in the below mentioned block.
Email ID:
Tel.No./ Mobile No.
Updation of Bank Details
Name of First/Sole shareholder

Name of the Bank in Full & Branch
Bank A/C No. as appearing on the Cheque leaf
IFSC Code
MICR Code
PAN
I/We hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of
incomplete or incorrect information, I/we would not hold the Registrars and Transfer Agents responsible. I/We undertake
to inform any subsequent changes in the above particulars before the relevant Book closure /Record Date(s).
Place:
Date: Signature of Sole/First Holder
Please attach the photocopy of a Cheque or a blank cancelled Cheque issued by your Bank relating to your above bank
account for verifying the accuracy of the 9 Digit MICR code number/IFSC Code.
Shareholders holding shares in Physical Mode, please Shareholders holding shares in Dematerialised form,
send these details to: please send these details to:
Link Intime India Pvt. Ltd.
C-101, 247 Parks, L.B.S. Marg, Vikhroli (west) The Depository Participant with whom your Demat
Mumbai 400083 Account is maintained
Enclosures:
1. Self-attested copy of PAN Card
2. Self-attested copy of Residence Proof (Any one – Voter ID/Passport/Driving License/ AADHAAR Card)
3. Cancelled Blank Cheque leaf.
4. Signature attestation by Manager of Scheduled Commercial Bank/ AU Small Finance Bank Limited
Note
Notes
Note
Shareholder’s Satisfaction Survey

We at AU Small Finance Bank Limited have always strived to provide the best services to our
investors and customers while maintaining the highest level of Corporate Governance in the
practices followed by the Bank. As a part of our constant endeavour to improve shareholder
service standards, we seek your valuable feedback by filling the questionnaire by scanning
QR Code the QR code or by clicking on this link https://bit.ly/2I9FxGp.
Safe Harbor
This Annual Report contains forward looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements
– written and oral – that we periodically make contain forward looking statements that set out anticipated results based on the management’s plans and assumptions.
We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of
similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although
we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should
known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated,
estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise.
Disclaimer
It must be distinctly understood, that the Reserve Bank of India does not undertake any responsibility for the financial soundness of the Bank or for the correctness of
any of the statements made or opinion expressed in this connection.
Standing strong on our deep roots of wisdom, we are making Corporate
Statutory
Financial
a doorway to the new world of banking. We have the legacy of

24 years, vigour of 2 years and a journey of lifetime... Bank on
AU
Today. Tomorrow. Forever.

REGISTERED OFFICE CORPORATE OFFICE HEAD OFFICE
19-A, Dhuleshwar Garden, Ajmer 5th Floor, E-Wing, Kanakia Zillion, Bank House, Mile 0, Ajmer Road,
Road, Jaipur – 302 001, Rajasthan, Junction of CST and L.B.S. Road, Kurla West, Jaipur – 302001, Rajasthan, India
India Mumbai – 400070, Maharashtra, India
Website: www.aubank.in | Email id: investorrelations@aubank.in | Phone: 0141 4110060/61/6660666

CIN: L36911RJ1996PLC011381

WWW Aubank In/annual-Report

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Right Way 12,623

Statutory Reports Financial Statements

In India’s dynamic banking

AU Small Finance Bank

LOAN ASSETS UNDER (` in crore)

ACTIVE LOAN ACCOUNTS (No.)

14.3 10,28,726 14.0

14.7 5,31,062 13.7

42 bps 94% 35 bps

2.0 7.9 3,163

2.0 8.4 2,281

3 bps 54 bps 39%

1.3 5.5 19.3

1.3 7.0 19.3

19,422 1.5 16.0

7,923 2.0 18.4

145% 56 bps 246 bps

AU Small Finance Bank

Annual Report 2018-

Annual Report 2018-

LIFE & HEALTH EXPERIENCE

AU Small Finance Bank

Capitalising on our two-decade

Annual Report 2018-

See page 22-31

See page 32-49

See page 50-73

Mr. Uttam Tibrewal

AU Small Finance Bank

Indian economy witnessed a trend MOMENTUM ACROSS Innovation continues to be the

Annual Report 2018-

Your bank is an agile, analytics-driven, customer-centric and humane enterpr

Over the years, we have helped

For us, our people are

During the year under

Your bank is an agile,

Annual Report 2018-

I am assured that being a young, energetic, c

AU Small Finance Bank

fruitful discussion at the senior most

Today India is nurturing grounds for

Annual Report 2018-

our reach from existing

We are the second most

During 2018-19, the Indian

YEAR UNDER REVIEW

AU Small Finance Bank

For financial year 2018-19 Return on

Being a bank, we maintained healthy

We maintained a strong total capital

Annual Report 2018-

customers and therefore, on the

AU Small Finance Bank

We are passionately expanding our

Annual Report 2018-

AU Small Finance Bank

Whole Time Director’s Message

We are focussing on the 4D (Data, Digital, Distrib

Annual Report 2018-