Ref. No.: AUSFB/SEC/2019-20/129 Date: 24thJune 2019 Listing Department Department of Corporate Services, National Stock Exchange of India Limited, The BSE Limited, Exchange Plaza, Bandra Kurla Complex, PhirozJeejeebhoy Towers, Bandra (East), Mumbai 400051, Dalal Street, Mumbai 400001, Maharashtra. 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 Growing the right way SCALABLE STABLE BANKABLE INCLUSIVE DIFFERENTIATED GROWTH APPROACH CUSTOMER TECHNOLOGY CENTRIC DRIVEN TEAM STRONG ORIENTED GOVERNANCE WELL CAPITALISED 2018-19 ANNUAL REPORT Report Creating value for contents all stakeholders Corporate Profile PRELUDE STABLE 02 Growth Attributes 24 AU Journey 04 AU Bank DNA 26 Business Model PEOPLE 06 Product Suite 28 Investment Case Nurturing a passionate team of 08 Growing the 30 Operational Highlights 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 lakh+ loyal customers. 62 Supporting Communities 66 Risk Management MANAGEMENT MESSAGES 68 Board of Directors 12 Chairman’s Communiqué 72 Leadership Team 14 Managing Director 74 Key Awards and CEO’s Review 75 Corporate Information 20 Whole Time Director’s Message COMMUNITIES We impacted over 2 lakh lives through our social and financial inclusion drives. Statutory Reports Financial Statements 76 Management 178 Independent Auditor’s Report SHAREHOLDERS Discussion & Analysis 184 Balance Sheet We have reported Total 94 Board’s Report 185 Profit and Loss Account Shareholder Return (TSR) of 114 Report on Corporate 186 Cash Flow Statement Governance 188 Schedules 141 Annexures 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) Corporate Profile Welcome to AU Small Finance Bank In India’s dynamic banking expanded offerings to 27 products landscape, we are focussed and solutions across key verticals Statutory Reports on remaining nimble with of financing, deposits, insurance, 572 customer-first, ear-to-the-ground transaction banking, mutual funds, Touchpoints (322 bank approach. At AU Small Finance business banking and digital branches, 86 banking outlets, Bank (AU Bank), we provide banking. 83 asset centres, 67 Banking comprehensive banking services Correspondents and 14 offices) with simplicity and convenience, As on 31st March 2019, our serve diverse set of customers and balance sheet size stood at help drive India’s inclusive growth `32,623 crore including total agenda. Headquartered at Jaipur, deposits of `19,422 crore with Rajasthan, we are a Fortune India 15.2 lakh active customer accounts. 500 Company and a Scheduled We have consistently maintained Commercial Bank. a very good asset quality and 543* Financial Statements a strong capital adequacy. ATMs We began our journey in 1996 Despite being in the investment as Au Financiers and under the mode, we have run our operations guidelines of the Reserve Bank profitably, delivering strong results of India (RBI), worked relentlessly in all previous quarters, besides for over two decades as a distributing dividend every year retail-focussed, customer-centric, since listing. systematically important asset financing Non-Banking Financial We are listed on the NSE 1,00,000+ Company (NBFC). We catered to (AUBANK) and the BSE (540611). the unserved and underserved Marquee investment institutions Internet and mobile low-and middle-income individuals such as Temasek Holdings, banking users and micro/small businesses, before Nomura and Warburg Pincus starting of our banking operation have shown their faith in the AU 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+ AA-/Stable secured retail asset lending, last-mile passionate professionals. distribution and local know-how, Long-term credit rating allowing us to serve our customers A solid foundation and a from four rating agencies holistically for their financial differentiated business model, (CRISIL Rating, India requirements. deep network, a comprehensive Ratings, ICRA Ratings and product suite, strong customer CARE Ratings) In the two years since we became service orientation and an a bank, we have added nearly a execution-oriented team million new customers, grown motivate us to scale new heights *Including 251 ATMs in collaboration with distribution to 572 touchpoints and in the new era of value-focussed, RajCOMP Info Services Ltd. (RISL) and Cash agile banking. Management Services (CMS) 2|21|1 Growing the right way AU Small Finance Bank Limited Growth Attributes BALANCE SHEET SIZE (` in crore) Strong performance 32,623 underpinned by FY 19 18,833 quality FY 18 73% LOAN ASSETS UNDER ` MANAGEMENT (AUM) ( in crore) 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% Corporate Profile RETURN ON 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 Reports 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 Financial Statements 3 bps 54 bps 39% NET CAPITAL NET NPA (%) (%) (%) 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 RETURN ON AVERAGE CAPITAL ` (%) (%) DEPOSITS MOBILISED ( in crore) 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|3 Growing the right way AU Small Finance Bank Limited AU Bank DNA Bridging aspirations and achievements Vision For over two decades, we have been relentlessly serving our customers in the To be the world’s remotest locations of North, West and most trusted Central India and helping them fulfil their retail bank and aspirations. coveted employer, that is admired Now, as a modern young bank, we as the epitome of have further expanded our spectrum financial inclusion of offerings with a solutions-orientated and economic attitude. Our comprehensive product success, where suite supports the financial aspirations ordinary people of our customers for their savings, do extraordinary payments, transactions, borrowings, things to investments and insurance requirements. transform society Our deep local know-how and strong at large, thereby focus on customer centricity differentiate guaranteeing us and allow us to empower and trust, confidence transform the lives of our 12 lakh+ and customer customers. delight. 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). Annual Report 2018-19 Corporate Profile Mission To build one of india’s INTEGRITY largest retail franchise We are fair and Statutory Reports that is admired for consistent in all our dealings – employees, NURTURE TALENT AND • Making every customer customers, partners or SUCCEED TOGETHER feel supreme while shareholders We nurture talent and being served together we are a great team • Aspiring that no Indian is deprived of banking • Bias for action, dynamism, detail orientation and product Financial Statements WORK HARD AND LOOK & process innovation AU FOR DETAILS Willing to go the extra mile in • Globally respected everything we do and thoroughly standards of integrity, understand customer needs, governance and ethics Dharma issues, and organisational delivery model • Being an equal The way we work opportunity Our six guiding pillars of employer, providing AU Dharma underpin the a collaborative and way in which we work and rewarding platform to deliver. Each of these tenets all its employees positively influences us to do the right things and in the CUSTOMER FOCUS Fastest growth to right way. If our customers need it, `1 trillion book size and a we will make it happen client base of 10+ million delighted customers BIAS FOR ACTION Urgency in everything we do RESPONSIBLY ENTREPRENEURIAL 100% ownership and 0% excuses 4|5 Growing the right way AU Small Finance Bank Limited 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.