Private & Confidential– Not for Circulation (This is a Disclosure Document prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO /GN / 2008/13/127878 dated June 06,2008)
ANDHRABANK (A Government of India Undertaking)
Merchant Banking Division Head Office: Dr.Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad- 500004 Tel.:(040)23252371 Fax.(040)23230883. Website:www.andhrabank.in/ E-mail:[email protected]
PRIVATE PLACEMENT OF SENIOR UNSECURED REDEEMABLE LONG TERM BONDS IN THE NATURE OF DEBENTURES (HEREINAFTER REFERRED TO AS THE “BONDS”) OF RS.10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 500.00 CRORE PLUS RS. 500 CRORE GREEN SHOE OPTION.
TRUSTEE FOR THE BONDHOLDERS REGISTRAR TO THE ISSUE
M/s. IDBI Trusteeship Services Ltd. M/s. MCS Ltd ASIAN BUILDING,GROUND FLOOR, KASHIRAM JAMNADAS BLDG, 17, R.KAMANI MARG, OFFICE NO.21/22, GROUND FLOOR, BALLARD STREET, 5, P.D' MELLO ROAD,(GHADIYAL GODI) MUMBAI– 400001 MUMBAI– 400009. TEL:(022) 66314499 TelNo.(022) 23726252- 55. FAX:(022) 66311776 FaxNo.(022) 23726256.
LEAD ARRANGERS TO THE ISSUE
M/s.Darashaw & Co.Pvt. Ltd, Trust Investment Advisors Pvt. Ltd. Regent Chambers,12th Floor, 109/110,1st Floor, Balrama, Bandra Kurla Complex 208, Nariman Point, Bandra (East), Mumbai-400051 Mumbai– 400021. Tel:(022)66306612. Fax: 91-22-22040031.
202 Maker tower ‘E’ SBI Capital Markets Limited ICICI Securities Primary DealershipLtd, Cuffe Parade Mumbai - 400005 ICICI Centre, H.T. Parekh Marg Tel: (022) 22178300 Churchgate, Mumbai – 400020 Tel: (022) 22882460/70, 22777600 Fax: (022) 22882313/2312
Tipsons Consultancy Services Pvt. Ltd. 401, Sheraton House, Opp. Ketav Petrol Pump, Polytechnic Road, Ambawadi Ahmedabad - 380015 Tel: (079) 30480295, 30427750 Fax: (079) 30480298
TABLE OF CONTENTS
INDEX TITLE
I DEFINITIONS / ABBREVIATIONS
II. DISCLAIMER
III. NAME AND ADDRESS OF REGISTERED /HEAD OFFICE OF THE ISSUER
IV. NAMES AND ADDRESSES OF THE DIRECTORS OF THE ISSUER
V. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS
VI BACKGROUND OF THE BANK VII. BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES VIII. BRANCH NETWORK OF THE BANK IX. DEPOSITS
X. ADVANCES XI. GENERAL DATA ON NON PERFORMING ASSETS
XII. ASSET CLASSIFICATION
XIII GROSS INVESTMENT
XIV. CAPITAL ADEQUACY POSITION OF THE BANK XV. KEY ACCOUNTING RATIO OF THE BANK
XVI. DEFINITION OF KEY RATIOS BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES XVII. INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS INCLUDING CERTAIN MILESTONES OF THE BANK.
XVIII. CAPITAL STRUCTURE
XIX. SHARE CAPITAL HISTORY SINCE NATIONALIZATION IN 1980 XX TOP TEN SHAREHOLDERS
XXI SHAREHOLDING PATTERN
XXII BORROWINGS XXIII SUMMARY TERM SHEET
XXIV TERM OF OFFER
XXV CREDIT RATING AND RATIONALE THEREOF
XXVI NAME OF DEBENTURE TRUSTEE
XXVII STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED
XXVIII DETAILS OF OTHER BORROWINGS XXIX SERVICING BEHAVIOUR OF EXISTING DEBT SECURITIES AND OTHER BORROWINGS
XXX UNDERTAKING REGARDING COMMON FORM OF TRANSFER XXXI MATERIAL EVENT , DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE
XXXII PERMISSION / CONSENT FROM PRIOR CREDITORS
XXXIII MATERIAL CONTRACTS AND AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER
XXXIV DECLARATION
XXXV ANNEXURES- CREDIT RATING LETTERS AND CONSENT LETTERS I. DEFINITIONS/ABBREVIATIONS ALM Asset Liability Management ATM Automated Teller Machine Board/Board of The Board of Directors of ANDHRA BANK or Committee thereof Directors Bonds Senior Unsecured Redeemable Long Term bonds
Book Closure/ The date of closure of register of Bonds for payment of interest and repayment of principal Record Date BSE The Bombay Stock Exchange Limited CAR Capital Adequacy Ratio CRISIL CRISIL Ltd. CAGR Compounded Annual Growth Rate CDSL Central Depository Services(India)Ltd. CDR Corporate Debt Restructuring CRR Cash Reserve Ratio Debt Securities Non-Cumulative debt securities which create or acknowledge indebtedness and include debenture,bonds and such other securities of the Issuer, whether constituting a charge on the assetsoftheIssuerornot,butexcludessecurityreceiptsandsecuritizeddebt instruments Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996,as amended from time to time. DepositoriesAct The Depositories Act, 1996,as amended from time to time Depository Participant A Depository Participant as defined under Depositories Act DesignatedStock National Stock Exchange of India Ltd and, Exchange Bombay Stock Exchange Limited DICGC De posit Insurance and Credit Guarantee Corporation of India Director(s) Di rector(s) of ANDHRABANK unless otherwise mentioned DP Depository Participant ECGC Export Credit Guarantee Corporation of India EPS Earning Per Share FDI Foreign Direct Investment FEDAI Foreign Exchange Dealers Association of India FIs Financial Institutions FIIs Foreign Institutional Investors FinancialYear/FY Period of twelve months period ending March 31, of that particular year GoI Government of India /Central Government HUF Hindu Undivided Family ITSL/Trustee IDBI Trusteeship Services Ltd. Issuer/P&SB/Bank ANDHRA BANK DisclosureDocument Disclosure Document dated August 11, 2014 for Private Placement of Senior Unsecured Redeemable Long Term bonds of Rs. 10,00,000/- each aggregating to Rs. 500 crore with a Green Shoe Option of Rs. 500 crore
I.T.Act The Income Tax Act,1961,as amended from time to time MoF Ministry of Finance NPAs Non Performing Assets NRIs Non Resident Indians NSE National Stock Exchange of India Ltd. NSDL National Securities Depository Ltd. OCBs Overseas Corporate Bodies PAN Permanent Account Number PLR Prime Lending Rate Rs. Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being MCS Ltd.(“MCS”) SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, SEBI T2002he Se curities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992,as amended from time to time SEBI Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD- NRO/GN/2008/13/127878 dated June 06, 2008 SLR Statutory Liquidity Ratio TDS Tax Deducted at Source The Bank/ the Issuer ANDHRA BANK, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The Board The Board of Directors of the Bank The Companies Act The CompaniesAct, 2013 as amended from time to time The Act Banking Companies(Acquisition and Transfer of Undertakings)Act,1980 The Issue/TheOffer/ Private Placement of Senior Unsecured Redeemable Long Term bonds of Rs. 10,00,000/- PrivatePlacement each aggregating to Rs. 500 Crore with a Green Shoe Option of Rs. 500 crore
II. DISCLAIMER
DISCLAIMER OF THE ISSUER This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD- NRO/GN/2008/13/127878 d a te d June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended. This disclosure document does not constitute an offer to public in general to subscribe for or otherwise acquire the Bonds to be issued by Andhra Bank (“Andhra Bank”/ the “Issuer”/ the “Bank”). This Disclosure Document is for the exclusive use of the addressee and it should not be circulated or distributed to third party (ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This Bond Issue is made strictly on private placement basis. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with the offering of this Issue or in relation to the Issuer.
This Disclosure Document is not intended to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the Bonds issued by ANDHRA BANK. This Disclosure Document has been prepared to give general information regarding ANDHRA BANK to parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party may require. ANDHRA BANK believes that the information contained in this Disclosure Document is true and correct as of the date hereof. ANDHRA BANK does not undertake to update this Disclosure Document to reflect subsequent events and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with ANDHRA BANK. However, ANDHRA BANK reserves its right for providing the information at its absolute discretion. ANDHRA BANK accepts no responsibility for statements made in any advertisement or any other material and anyone placing reliance on any other source of information would be doing so at hi s own risk and responsibility.
Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Disclosure Document should be construed as advice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe for the bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental thereto.
This Disclosure Document is not intended for distribution. It is meant for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on private placement Basis and this offer does not constitute a public offer/ invitation.
The Issuer reserves the right to withdraw the private placement of the bond issue prior to the issue closing date(s) in the event of any unforeseen development adversely affecting the economic and regulatory environment or any other force majeure condition including any change in applicable law. In such an event, the Issuer will refund the application money, if any, along with interest payable on such application money, if any.
DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA
This Disclosure Document has not been filed with Securities & Exchange Board of India (“SEBI”). The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document. It is to be distinctly understood that this Disclosure Document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Disclosure Document. The Issue of Bonds being made on private placement basis, filing of this Disclosure Document is not required with SEBI. However SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Disclosure Document.
DISCLAIMER OF THE ARRANGER TO THE ISSUE
It is advised that the Issuer has exercised self due-diligence to ensure complete compliance of prescribed disclosure norms in this Disclosure Document. The role of the Arranger to the Issue in the assignment is confined to marketing and placement of the Bonds on the basis of this Disclosure Document as prepared by the Issuer. The Arranger has neither scrutinized/ vetted nor has done any due-diligence for verification of the contents of this Disclosure Document. The Arranger shall use this Disclosure Document for the purpose of soliciting subscription from a particular class of eligible investors in the Bonds to be issued by the Issuer on private placement basis. It is to be distinctly understood that the aforesaid use of this Disclosure Document by the Arranger should not in any way be deemed or construed that the Disclosure Document has been prepared, cleared, approved or vetted by the Arranger; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. The Arranger or any of its directors, employees, affiliates or representatives does not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this Disclosure Document.
DISCLAIMER OF THE STOCK EXCHANGE
As required, a copy of this Disclosure Document has been submitted to National Stock Exchange of India Limited (hereinafter referred to as “NSE”) and Bombay Stock Exchange Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Disclosure Document with NSE and BSE or hosting the same on its website should not in any way be deemed or construed that the Disclosure Document has been cleared or approved by NSE and BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.
III. NAME AND ADDRESS OF REGISTERED/ HEAD OFFICE OF THE ISSUER
Name of the Issuer : ANDHRA BANK (A Government of India Undertaking)
Registered/ Head Office : Merchant Banking Division, Head Office: Dr. Pattabhi Bhavan, 5-9-11, Saifabad, Hyderabad – 500004. Tel.: (040)23252371 Fax. (040) 23230883. Website: www.andhrabank.in E-mail: [email protected];
IV. NAMES AND ADDRESSES OF THE DIRECTORS OF THE ISSUER The composition of the Board of Directors of the Bank as date of this Disclosure Document is as under
Sr. Name and Designation Age Director of the Address Other Directorships No & DIN bank since 1. Sri C.VR Rajendran 59 13.12.2013 Andhra Bank None Chairman and Dr. Pattabhi Managing Director Bhavan, Head Office, 5-9-11, Saifabad, Hyderabad - 500004 2. Sri S.K Kalra 57 05.10.2012 Andhra Bank None Executive Director Dr. Pattabhi DIN - 01952165 Bhavan, Head Office, 5-9-11, Saifabad, Hyderabad - 500004 3. Sri. Anandrao Vishnu 40 30.09.2013 Director, None Patil Department of Govt of India Nominee Financial Director Services, Ministry of Finance, Govt of India, New Delhi 4. Sri. E.E Karthak 55 13.03.2014 Senior RBI None RBI Nominee Director Officers Flats, Alipore, Kolkata – 700027 5. Sri. Pankaj Chaturvedi 46 23.09.2011 Flat – C-4/Y, 1. Perfect Part-time Non Official Shrishti Business Advisory Director Apartments, Services Pvt Ltd GH-56, Sector (Unlisted Indian DIN - 00003278 -56, Gurgaon,- Company), 122022, Member Haryana
2. Vijayalakshmi Printing Works Pvt Ltd (Unlisted Indian Company), Member
3. FirstServ. Solutions Pvt Ltd
4. Mahavidhya International Pvt Ltd Singapore (Unlisted Foreign Company)
6. Sri. G.R 73 14.03.2012 Old 26, New 1. REPCO Home Sundaravadivel 16, Agasthiar Finance Ltd Shareholder Director Street, (subsidiary of Saligramam, REPCO Bank – DIN - 00353590 Chennai – Govt of India 600093 Enterprise), Director
2. Hindustan Photo Films Manufacturing Company Ltd, Nominee Director of UTI AMC (P) Ltd.
3. Ind Bank Merchant Banking Services Ltd
7. Sri. K. Raghuraman 65 14.03.2012 M-6, 1st Floor, 1. Birla Ericsson Shareholder Director Lajpat Nagar – Optical Ltd, II, Delhi – Director and DIN – 00320507 110024 Member in Audit Committee
2. Nagaarjuna Agrichem Ltd., Director and Member in Audit Committee
3. CanBank Factors Ltd., Director and Chairman in Audit Committee
4. Oriental Carbon and Chemicals Ltd, Director
5. CentBank Financial Services Ltd., Director and Member in Audit Committee
6. Ladderup Financial Services Ltd., Director and Member in Audit Committee
7. Rama Phosphates Ltd., Director and Chairman in Audit Committee.
8. NELCO Limited., Director and Member in Audit Committee
9. Lanco Budhil Hydro Electrical Pvt Ltd., Director and Chairman in Audit
Committee.
8. Sri. Nandlal L Sarda 66 14.03.2012 A-5, Near 1. IDBI Intech Shareholder Director Main Gate, IIT Limited (Member of Powai, the Audit DIN - 00147782 Mumbai – Committee) 400076 2. Clearing Corporation of India (Chairman, IT Committee)
3. Cybertech systems and Software Limited.
9. Sri. N.VR. Reddy 62 15.10.2013 Plot No. 321, None Part-time Non Official MP MLA Director Colony, Road No. 10C, Jublee Hills, Hyderabad – 500033 10. Sri. K Thamaraiselvan 55 25.11.2013 Single Window None Workmen Director Operator-B, Andhra Bank, Porur Branch, Mount Poonamalle High Road, Porur, Chennai - 600016 11. Dr. Naina Sharma 61 12.12.2013 L-4B, None Part-time Non Official Maharani’s Director College, Staff Colony, Near Diggi House, Jaipur - 302004 12. Sri. Amit Goel 53 18.02.2014 B-504, Energy India Part-time Non Official Gulmohar Limited, Director Director Apartments, Plot No – GH- DIN - 00887437 81, Sector – 56, Gurgaon - 122011
V. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS
HIGHLIGHTS OF THE BANK o Total business of Andhra Bank (“the Bank”) increased by 12.8% to ₹.2,52,494 crore as on 31.3.2014 from ₹ 2,23,933 crore as on 31.03.2013.
o Total deposits increased by 14.6% to ₹1,41,845 crore from Rs. 1,23,796 crore
o Low-cost deposits (CASA) increased by 10.8% to Rs. 35,186 crore from Rs.31,759 crore. CASA share in total deposits stood at 24.80%
o Gross bank credit increased by 10.5% to Rs.1,10,649 crore from Rs.1,00,138 crore
o Credit-deposit ratio stood at 78.02% compared to 80.94% during the previous year
o Priority sector advances increased by 19.32% to Rs.41,920 crore i n 2 0 1 4
f r o m R s . 3 5132 C r o r e i n 2 0 1 3 . Priority sector advances constituted 41.47% of adjusted net bank credit (RBI norm: 40%) in the year 2013-14 o Agriculture advances (under priority sector) increased by 23.2% to Rs.20,267 crore as on end of march 2014 as compared to 16451 Crore as on end of March 2013 . Agriculture advances constituted 20.67% of adjusted net bank credit (RBI norm: 18%) as on 31st March 2014. o Advances to micro, small and medium enterprises increased by 8.2% to Rs.18238 crore at the end of March 2014 from Rs. 16863 crore. o The Bank extended financial assistance to 2,21,708 Self-help Groups (SHGs) and the outstanding credit to such groups as on 31.03.2014 was Rs 4,305 crore o FINANCIAL INCLUSION – Coverage of FI Villages All the allotted FI villages having population of above 2000 have since been provided with banking facilities under FI and transactions are in place. As at the end of March 2014, 5.25 Lakh FI customer account (AB Grama Kranthi Saving Bank) were opened with which have built- in overdraft facility of Rs 500/-. Bank has procured KIOSK technology for FI and successfully implemented during 2013-14. All the remaining FI villages under the category of below the 2000 population have been identified for coverage through KIOSK mode. o Lending to retail sector, housing and education remained the focus areas. Retail lending increased by 15.76% to Rs.14,400 crore as on 31.03.2014 from Rs.12.439 crore as on 31.03.2013. o Loans to housing sector increased by 21% to Rs.7,614 crore from Rs.6294 crore o Education loans portfolio stood at 1,511 Crores and registered a growth of 84 Crores from March 2013, against negative growth during the previous year. o On profitability front, Bank’s Operating Profit decreased by -0.3% to Rs.2760.24 crore for the financial year ended March 31, 2014 from Rs.2767.23 crore in the previous financial year. o Net Profit stood at Rs 436 Crore in the financial year 2013-14 from Rs1,289 crore in the financial year 2012-13 o Total Income increased by 12% to Rs.15,630 crore from Rs.13,957 crore, of which non- interest income increased by 27.31% to Rs. 1,333 crore from Rs.1047 crore. o Return on assets (ROA) stood at 0.29% compared to 0.99% in the previous year while net interest margin (NIM) stood at 2.76% compared to 3.21%. o Tangible Net worth of the Bank stood at Rs.8,583 crore and return on average net worth was 5.20 in 2013-14 as compared to 16.91 in the financial year 2012-13 o Earnings per share decreased to Rs.7.67 from Rs.23.04 while book value per share decreased to Rs.145.57 from Rs. 146.11 o Capital adequacy ratio of the Bank under Basel II stood at 11.18% in FY 2013-14 from 11.76% in the year 2012-13 .Capital adequacy ratio under Basel III stood at 10.78% in the FY 2013-14. Gross NPAs (non-performing assets) increased from 3.71% in the previous year to 5.29% in the year 2013-14 while Net NPAs increased from 2.45% in the previous year to 3.11% in the year 2013-14 o The Clientele base of the Bank increased to 17.1 million.
VI. BACKGROUND OF THE BANK
Andhra Bank was founded by Dr.Bhogaraju Pattabhi Sitaramayya. The Bank was registered on 20th November 1923 and commenced operations at Machillipatnam, a port town in Coastal Andhra, on 28th November 1923 with a paid up capital of Rs 1.00 lakh and an authorized capital of Rs 10.00 lakhs. It was nationalized on 15th April, 1980
At the time of nationalization in 1980, Andhra Bank was the largest Private Sector Bank (Source: Second Schedule, Banking Regulation Act, 1949) and had to its credit, implementation of concepts like Lead banking Responsibility & Priority Sector lending.
VII. BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES
The Bank has a wide range of choice of deposits through many different schemes. Some of the main features of its various deposits schemes are detailed as follows:
Our business is principally divided into three main areas; Corporate Financial Services, Retail Financial Services and Agricultural Financial Services.
Our banking operations for corporate and commercial customers include a range of products and services for large corporate customers as well as for small and medium sized businesses. Our loan products include term loans for the acquisition, construction or improvement of assets as well as short term loans, cash credit, export credit and other working capital financing. We also provide credit substitutes such as Letters of Credit and Guarantees. In addition we also provide fee based products and services such as Cash Management services.
As part of our commercial banking business, we provide financial services to Small and Medium Enterprises (SMEs) and Small Scale Industries (SSIs). Our products for these sectors are intended to facilitate the establishment, expansion and modernization of small businesses, including acquiring fixed assets, plant & machinery and meeting working capital needs. We provide flexible security requirements to make credit more accessible to SME and SSI borrowers.
Our Retail Banking Business provides financial products and services to our Retail Customers. We provide Housing, Retail Trade, Automobile, and Consumer, Education and other personal loans and deposit services such as demand, savings and fixed deposits for our customers. In addition, we distribute products such as global debit cards and global credit cards. We also distribute third party products including mutual fund products and General and Life Insurance Policies.
We have also maintained our focus on addressing the needs of Agricultural Customers and offer specialized products and services to the Agricultural Sector. We offer direct financing to farmers for production and investment as well as indirect financing for infrastructure development and credit to suppliers of inputs.
We are committed to facilitating community development. We are a pioneer in SHG – Public Sector Bank linkage programme.
VIII. BRANCH NETWORK OF THE BANK
The Head Office of the Bank is situated at Hyderabad- with 32-zonal offices as on March 31, 2014 scattered in various states controlling the branches. As on March 31, 2014 the Bank has a vast network of 2114-branches and 10 extension counters spread all over India catering to the needs of all sections of society irrespective of their social and economic strata. These branches are manned by a dedicated work force of 20279 personnel.
Geographical distribution of branches as on March 31, 2014 was as under
State/Union territory Number of Offices % share of Total Network of branches (%) Haryana 49 2.32 Himachal Pradesh 4 0.18 Punjab 48 2.27 Rajasthan 27 1.27 Chandigarh 4 0.19 New Delhi 47 2.22 Jammu and Kashmir 2 0.09 Assam 8 0.38 Meghalaya 1 0.05 Tripura 1 0.05 Bihar 18 0.85 Jharkhand 14 0.66 Odisha 138 6.52 Sikkim 1 0.05 West Bengal 39 1.84 Chattisgarh 16 0.76 Madhya Pradesh 27 1.28 Uttar Pradesh 82 3.88 Uttarakhand 10 0.47 Goa 4 0.19 Gujrat 25 1.18 Maharashtra 73 3.45 Dadra Nagar Haveli 1 0.05 Andhra Pradesh 1254 59.32 Karnataka 87 4.12 Kerala 25 1.18 Tamilnadu 106 5.01 Puducherry 3 0.14 Total 2114 100
IX. DEPOSITS (Rs in Crore) As on March 31,2014 March 31,2013 March 31,2012 Deposit ₹ 1,41,845 ₹ 1,23,796 ₹ 1,05,851 Annual growth-Amount ₹ 18,049 ₹ 17,945 ₹ 13,695 Annual growth- Percent (%) 14.60 16.95 14.86 Cost of deposit (%) 7.81 7.87 7.51
Total deposits of the Bank as on March 31, 2012, stood at Rs. 1,05,851 crore. The same was Rs. 92,156 Crore on March 31, 2011 and thus in 2011-12 the growth was Rs. 13,695 crores ( 14.90%)
The category-wise break-up of total deposits during last 5 years is presented below (Rs in Crores) As on March 31,2014 March 31,2013 March 31,2012 Current Deposit ₹ 7493.17 ₹ 7028.63 ₹ 6369.00 Saving Bank Deposit ₹ 27692.78 ₹ 24,730.26 ₹ 21578.29 Term Deposit ₹ 106659.18 ₹ 92036.70 ₹ 77903.92 Total ₹ 141845.13 ₹ 123795.59 ₹ 105851.21
X. ADVANCES (Rs. In Crores) Year Ended March 31, 2014 March 31,2013 March 31,2012 Advances ₹1,07,644.20 ₹ 98,373.30 ₹ 83,222.96 Annual growth amount ₹ 9,270.90 ₹ 15150.34 11787.62
Annual growth (%) 9.42 18.20 16.50
XI. GENERAL DATA ON NON PERFORMING ASSETS The details of Non-Performing Assets of the Bank are furnished in the tables below (Rs. In Crores As on March 31 2014 2013 2012
Gross NPA at the beginning 3714.49 1798.01 995.64 of the year
Addition during the year 2832.35 2741.67 1287.31 Reduction during the year 689.24 825.19 484.94
Upgradation 102.82 148.28 143.14
Cash Recovery 160.45 239.86 102.57
Compromise 163.09 102.80 69.81
Write-off 262.88 334.25 169.42
Gross NPA at the end of the year 5857.60 3714.49 1798.01 Provision 2515.13 1305.31 1042.16 Net NPA at the end of the year 3342.47 2409.18 755.85 Gross NPAs to Gross Advances 5..29 3.71 2.12 (%) Net Advances 107644.20 98373.30 83222.94 Net NPAs 3342.47 2409.18 755.85 Net NPA to Net Advances(%) 3.11 2.45 0.91
XII. ASSET CLASSIFICATION (In Rs Crores) Classification of asset as on 31 March 2014 31 March 2013 31 March 2012 Standard asset 104791.44 96423.25 82885.94
Substandard asset 1734.06 1985.74 1084.16 Doubtful asset 4094.49 1688.53 642.48 Loss Asset 29.05 40.22 71.37 Gross NPA’s 5857.60 3714.49 1798.01 Gross Advances 110649.04 100137.75 84683.95
XIII. GROSS INVESTMENTS (Rs. in crores) As on March 31 2012 2013 2014 Gross investments 29655.77 37795.48 45639.28 SLR Investments 26740.83 33009.51 39347.38 Permanent Investments 26164.89 27469.82 34373.21 Current Investments 3490.88 10325.66 11266.07
Current Investments to SLR Investments (%) 13.05 31.28 28.63 Overseas 9.29 133.77 138.72 Held Till Maturity (HTM) including exempted category 26164.89 27469.82 34373.21 Available For Sale 3489.09 10174.18 11195.99
Held For Trading 1.79 151.48 70.08 % of HTM (including exempted category ) to entire portfolio 88.23 72.68 75.31 % of HTM (excluding exempted category ) to entire portfolio 86.47 69.87 72.52
The break up of net investments (net of depreciation, amortization and NPA provision) for the last five financial years is as under: (Rs in crores) Security Details March 31, 12 March 31, 13 March 31, 14 Government Securities 26727.91 32973.62 39932.36 Other Approved Securities 10.36 8.16 - Shares 212.85 326.42 293.71 Debentures & Bonds 705.97 1338.80 3245.19 Subsidiaries & Joint 199.29 307.27 312.22 Ventures Others 1772.51 2678.12 1573.12 Total 29628.89 37632.39 45356.61
The yield on investments (%) for the last five financial years is given as under: (Rs in crores) As on March 31 2012 2013 2014 Yield including profit on sale of 7.92 8.38 9.00 investments (%)
Yield excluding profit on sale of 7.83 7.97 8.05 investments (%)
XIV. CAPITAL ADEQUACY POSITION OF THE BANK The Capital to Risk Assets Ratio (CRAR) of the Bank as on March 31st, 2014 was 10.78%under Basel III as against the RBI stipulation of 9.00%. Details of capital vis-à-vis risk weighted assets for last three financial years are given as under: (Rs. in crores) As on March 31, 2012 March 31, 2013 March 31, 2014 Capital Funds 11197.2 11899.78 11688 Tier I Capital 7679.39 8625.34 8814.46 Paid up Equity Capital 485.00 559.58 589.61 Less Accumulated loss & DTA 1268.59 1176.15 1043.00
Reserves & Surplus 6919.81 1176.15 1043.00 Total Tier I Capital 7679.39 8625.34 8814.46 Tier II Capital 3517.81 3274.44 2921.07 Revaluation Reserve 0.00 0.00 0.00 General Provisions 96.52 152.98 187.64 Subordinated Debt 1700.00 1660.00 928.00 Investment Fluctuation 0.00 0.00 0.00 Reserve Total Tier II Capital 3517.81 3274.44 2921.07 Total Capital Fund 11197.2 11899.78 11735.52 Risk Weighted Assets 23543.00 31470.50 108083.35 Capital Adequacy Ratio (%) 13.18 11.76 10.78
The Capital Adequacy Ratio (‘CAR’) of the Bank as on March 31, 2014 was 10.78% under Basel – III stipulation of 9 %. Details of capital vis-a-vis risk weighted assets for last three financial years are given Under: (Rs. In Crore) March 31, 2012 March 31, 2013 March 31, 2014
Capital Funds 11197.2 11899.77 11688 Paid up Capital 559.58 559.58 589.61
Reserves & Surplus 6919.81 7881.60 8147.84 Outstanding Amount of - Subordinated Debt Bonds 1820.00 1820.00 1820.00 Innovative Perpetual Bonds 200.00 200.00 200.00 Upper Tier Debt Bonds 1000.00 1000.00 1000.00
CAPITAL ADEQUACY RATIOS (BASEL III)
Amount (Rs in Crores) 31.03.2014
Total Risk Weighted Assets 108345.55 Common Equity Tier I Ratio 8629.01 7.96%
Additional Tier I Ratio 143.29 0.13% Tier II Ratio 2915.70 2.69% Total Capital Ratio (CRAR) 11688.00 10.78%
CAPITAL ADEQUACY RATIOS (BASEL II)
AS PER BASEL II
31.03.2012 31.03.2013 31.03.2014 Total Risk Weighted 84630.01 101189.61 107957.81 Assets (Rs in Crores) Tier I Capital Ratio 9.03 8.52 8.25 Tier II Capital Ratio 4.15 3.24 2.93 Total Capital Ratio 13.18 11.76 11.18 (CRAR)
CAPITAL STRUCTURE UNDER BASEL II
Amount (Rs in Crores) YEAR ENDED 31.03.2012 31.03.2013 31.03.2014 Tier-I Capital 7638.53 8625.33 8908.30 (68.47%) (72.48%) (73.79%)
Tier-II Capital 3517.81 3274.44 3164.33 (31.53%) (27.52%) (26.21%)
Total Capital 11156.34 11899.77 12072.63
XV . KEY ACCOUNTING RATIOS OF THE BANK For the Year ended as on March 31 2012 2013 2014 Earnings per Share (EPS) (Rs.) 24.03 23.04 7.67 Cash Earnings per Share (Rs.) 25.71 24.54 9.25 Book Value per Share/ Net Asset value per Share 126.36 146.11 145.57 Return(Rs.) on Assets (%) 1.19 0.99 0.29 OTHER RATIOS Net NPA to Net Advances Ratio (%) 0.91 2.45 3.11 Interest Income/ Working Funds (%) 10.03 9.88 9.40 Non-Interest Income/ Working Funds (%) 0.76 0.80 0.88
Operating Profit/ Working Funds (%) 2.49 2.12 1.82 Net Profit per Employee (Rs. in lacs) 0.09 0.09 0.02 Capital Adequacy Ratio (%) 13.18 11.76 10.78 Credit/ Deposit Ratio (%) 80.07 80.94 78.02 Interest Spread/ Average Working Funds (%) 3.67 3.21 2.76
Gross Profit/ Average Working Funds (%) 2.49 2.12 1.82
Operating Expenses/ Average Working Funds (%) 1.60 1.56 1.52
Return on Average Net worth (%) 20.67 16.91 5.20
Yield on Advances (%) 12.45 12.02 11.22 Yield on Investments (%) 7.83 7.97 8.05 Cost of Deposits (%) 7.51 7.87 7.81 Cost of Borrowings (%) 7.57 7.30 7.09
Business per Branch (Rs. in crore) 111.24 119.90 119.42 Business per Employee (Rs. in Crore) 11.54 12.22 12.23
XVI. Definitions of Key Ratios: Earnings per Share (EPS) (Rs.) Profit After Tax/ No. of Equity Shares Cash Earnings per Share (Rs.) (Profit After Tax + Depreciation)/ No. of Equity Shares Book Value per Share/ Net Asset value per Networth at year end/ No. of Equity Shares Share (Rs.) Return on Assets (%) Net Profit/ Average Working Funds Net NPA to Net Advances Ratio (%) Net NPAs/ Net Advances Interest Income/ Working Funds (%) Interest Income/ Average Working Funds (Total Average of monthly total assets as per Form X) Non-Interest Income/ Working Funds (%) Non-Interest Income/ Average Working Funds (Total Average of monthly total assets as per Form X) Net Profit/ Working Funds (%) Net Profit/ Average Working Funds (Total Average of monthly Business per Employee (Rs. in lacs) t(Deotapl assosite tse xcasl. per In terForm B aX)nk + Gross Advances)/ No. of Net Profit per Employee (Rs. in lacs) NEmetpl Prooyefit/e sNo . of Employees Capital Adequacy Ratio (%) Tier I Tier I Capital/ Risk Weighted Assets Tier II Tier II Capital/ Risk Weighted Assets Credit/ Deposit Ratio (%) Total Advances/ Total Deposits Interest Spread/ Average Working Funds Net Interest Earned/ Average Working Funds (Total (%) Average Operating Expenses/ Average Working ofOper moantitnhgly toEtxapl easnssesets (Naso pne-rI ntereForms tX )E xpenditure)/ Funds (%) Average Working Funds (Total Average of monthly total assets as Return on Average Net Worth Netper Profit/ (Opening Net Worth + Closing Net Worth)/2 Yield on Advances (%) IFontermre sXt) E arned on Advances/ Average Fortnightly Yield on Investments (%) IAdntevraensct e sE arned on Investments/ Average Fortnightly Cost of Deposits (%) Inteverstmest e Entsxpe nded (Interest paid on Deposits)/ Average Cost of Borrowings (%) InFotertrneistgh ontly DBorreposwitisn gs/ Average Fortnightly Borrowings Business per Branch (Rs.in crore) (Total Deposit excluding interbank + Total Advances)/ No. of Business per Employee (Rs. in crore) (BranchesTotal Dep osit excluding interbank + Total Advances)/ No. of Employees
XVII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS INCLUDING CERTAIN MILESTONES OF THE BANK.
HISTORY SINCE INCORPORATION Andhra Bank was founded by Dr.Bhogaraju Pattabhi Sitaramayya on November 20, 1923 and commenced business on November 28, 1923 with a paid up Capital of Rs.1.00 lakh and an Authorised Capital of Rs.1 million.
PRE NATIONALISATION The Bank commenced business as "The Andhra Bank Ltd" at Machilipatnam, a port town in coastal region of Andhra Pradesh. The Registered and Central Office of the Bank was set up in Machilipatnam, which was the center of the Bank's operation between 1923 and 1963. At the time of its inception, the Bank set aside 50% of its advances for farmers, traders, artisans and craftsmen in rural areas.
POST NATIONALISATION The Bank was nationalised on April 15, 1980. The Bank was one of the first Bank's to launch Credit Card business among the public sector Banks in India in 1981. By 2003, most of the branches of the Bank were computerised. In fiscal 2004, we became one of the first public sector banks to undertake mortgage backed securitisation with the securitisation of 1437 housing loan accounts for an aggregate value of Rs.503.6 million. Additionally, we were one of the first Banks to actively market insurance-linked savings deposits to customers. Our work with over 47,884 Self Help Groups (SHGs) was recognised by the Government of Andhra Pradesh in fiscal 2005, which awarded as the title of "Best Bank" in the State for the 4th year running. We currently have lead bank responsibilities from the RBI in 6 districts v.i.z., Guntur, West Godavari, East Godavari and Srikakulam in Andhra Pradesh and in Ganjam and Gajapati in Orissa. We are the convener of the State Level Bankers Committee in the State of Andhra Pradesh.
Key Milestones Date Event 1923 Establishment of the Bank 1943 Bank attained the status of a Scheduled Bank 1945 Opened first branch outside Andhra Pradesh in Chennai, Tamil Nadu 1964 Amalgamation of Bharat Lakshmi Bank with the Bank 1969 Lead Bank role in 4 districts of Andhra Pradesh and 1 district in Orissa State 1970 Introduced the "Kiddy Bank" deposit scheme to attract children's savings. 1972 Surpassed the Rs. 10.00 million deposit mark 1980 Nationalisation of the Bank 1981 Introduction of Credit Cards by the Bank 1989 Established Andha Pradesh Rural Development Trust and started Andhra Pradesh Institute of Rural 1993 DeFirsvte tlotpmallye ncot amt pRautejarhmisedund braryn ch opened at RP Road branch, Secunderabad 1995 First SSI specialised branch at Hyderabad 1996 First Industrial Finance branch at Hyderabad 1998 Introduction of Kisan Credit Cards 1998 Bank was granted functional autonomy by the GOI 1999 Deposits of the Bank surpassed Rs.1000.00 million 2001 Initial Public Offering of the Bank 2002 Launching of network ATMs 2003 • Achieved 100% branch computerization • ABHFL merged with the Bank 2004 • Securitised Housing Loans worth Rs.500.00 million with the National Housing Bank • Commencement of Cash Management operation. 2005 Business of the Bank surpassed Rs.450.00 billion 2006 • Business of the Bank crossed Rs.550.00 billion • Follow on Public Offer of the Bank 2007 • Business of the Bank surpassed Rs.675.00 billion • Launched AB cash track for collection of corporate clients receivables
2008 • Total business of the Bank crossed Rs.825.00 billion • 100% financial inclusion achieved in the Districts of Srikakulam, Andhra Pradesh and Ganjam district, Orissa state. Andhra Bank along with Bank of Baroda and Legal and General Group PLC of UK, have floated a joint venture, a life insurance company Bank has received permission to open a second overseas representative office located in Jersey city, New Jersey, USA
2009 Received the Best Bank award on 26/11/2009
2010 The bank with a brand value of $134 mn, got listed (at 461) as one of the Top 500 Global Financial Services Brands by UK based Brand Finance co. Received the MSME National Award on 31/08/2010 Won the Banking Excellence Award for the Best Public Sector Bank, instituted by the State Forum of Bankers Club, Kerala on 13/11/2010
2011 Awarded ‘Editorial Board Roll of Honour in the Mid sized Banks Category in the CNBC TV18 Best Bank and Financial Institution Awards for the year 2011 Business of the bank crossed the milestone of Rs 1,90,500 cr
2012 Crossed the milestone of Rs 2,00,000 crore of total business. The presence of the Bank spread to 25 States and 3 Union Territories.
2013 Total business surpassed Rs 2.5 lakh crore mark. Received second best bank award for nurturing the RSETI movement in the Country for the year 2012-13. NIRED, Rajam was honoured as 3rd Best RSETI in the Country for the financial year 2012-13.
XVIII. CAPITAL STRUCTURE (as on March 31, 2014) (Rs. in crores) Particulars Amount 1. SHARE CAPITAL a. Authorised Equity Share Capital 300,00,00,000 Equity Shares of Rs. 10/- each 3000.00 b. Issued Equity Share Capital 58,96,14,903 Equity Shares of Rs. 10/- each 589.61 c. Subscribed & Paid-up Equity Share Capital 58,96,14,903 Equity Shares of Rs. 10/- each 589.61 2. SHARE PREMIUM ACCOUNT 1987.39
XIX. SHARE CAPITAL HISTORY SINCE NATIONALISATION IN 1980
Date of allotment No of Face Issue Consideration Reason of allotment Cumulative Cumulative Shares (In Value Price (In Million) Premium Paid up Million) (In (In Rs) Capital Rs) (Rs in Million) Balance as at 0.10 100 100 Nil Nil Nil 10.00 December 31, 1979 April 15, 1980 1.00 10 10 Nil Nationalisation Nil 10.00 December 31, 1.88 10 10 18.80 Capitalisation of Nil 28.80 1984 Reserves 0.12 10 10 1.20 Contribution to Capital Nil 30.00 by GOI(1) December 31, 9.00 10 10 90.00 Contribution to Capital Nil 120.00 1985 by GOI(1) December 31, 5.00 10 10 50.00 Contribution to Capital Nil 170.00 1986 by GOI(1) March 28,1988 5.00 10 10 50.00 Contribution to Capital Nil 220.00 by GOI(1) March 31,1992 40.00 10 10 400.00 Contribution to Capital Nil 620.00 by GOI(1) March 31, 1993 30.00 10 10 300.00 Contribution to Capital Nil 920.00 by GOI(1) January 1, 1994 150.00 10 10 1500.00 Contribution to Capital Nil 2420.00 by GOI(1) December 1, 1994 108.60 10 10 1086.00 Contribution to Capital Nil 3506.00
by GOI(1) February 16,1995 75.72 10 10 757.20 Contribution to Capital Nil 4263.20 by GOI(1) March 29, 1997 165.00 10 10 1650.00 Contribution to Capital Nil 5913.20 by GOI(1) March 30,1999 (243.37) (10) (10) (2433.70) Adjustment of Nil 3479.50 accumulated losses against capital(2) January 31, 2001 (47.95) (10) (10) (479.50) Return of capital to GOI Nil 3000.00 (3) March 24, 2001 150.00 10 10 1500.00 Initial Public Offer(4) Nil 4500.00 March 27, 2003 (50.00) (10) (10) (500.00) Return of capital to GOI Nil 4000.00 (5) February 03, 2006 85.00 10 90 7650.00 Follow on Public Offer 6800.00 4850.00 (6) March 25, 2011 74.58 10 157.28 11730.00 Allotment to GOI on 17784.20 5595.80 Preferential basis (7) December 21, 30.03 10 66.59 2000.00 Allotment to GOI on 19483.85 5896.15 2013 Preferential basis (8)
Notes:
(1) Contribution of capital by GOI through Recapitalisation Bonds/Special Securities. (2) In terms of approval dated March 26, 1999 issued by the MOF, GOI, the Bank has reconstructed its capital by adjusting the brought forward losses of Rs. 2433.70 million against the paid-up-capital of the Bank. (3) In terms of the permission granted by the MOF letter no. F.No.11/5/2000-BOA dated December 29, 2000, we returned share capital of Rs. 479.50 million to GOI. (4) The Bank offered 150,000,000 equity shares of Rs. 10 each for cash at par for subscription to the public on February 14, 2001. Out of the same 15, 000,000 shares were reserved for permanent employees/working directors of the Bank. (5) In terms of the permission granted by the MOF letter no. F.No.11/5/2000-BOA dated March 27, 2003. We returned share capital of Rs. 500.00 million to GOI. (6) The Bank offered 85,000,000 equity shares of Rs. 10 each for cash at a premium of Rs. 80 per share for subscription to the public during January 16, 2006 to January 20, 2006 and allotted on February 03, 2006. (7) In terms of the notification received from MOF vide letter no. F.No.11/7/2008-BOA dated February 15, 2011 and February 28, 2011, Bank has allotted 74580364 equity shares of Rs. 10 each at a premium of Rs. 147.28 p on preferential basis to GOI. (8) In terms of the notification received from MOF vide letter no. F.No.11/13/2011-BOA dated October 22, 2013, Bank has allotted 30034539 equity shares of Rs. 10 each at a premium of Rs. 56.59 p on preferential basis to GOI.
XX. TOP 10 SHAREHOLDERS (as on 30th June, 2014) NAME OF CONTROLLER/SIGNIFICANT NameSHAREHOLDERS of the shareholder No. of No. of Shares Shareholding Shares Held in Demat in Form % President of India 35,46,14,903 35,46,14,903 60.14 Life Insurance Corporation of India 28248359 28248359 4.79 Morgan Stanley Mauritius Company Ltd 9756828 9756828 1.65 LIC of India Money Plus Growth Fund 6896670 6896670 1.17
Bajaj Allianz Life Insurance Company Limited 5117473 5117473 0.86
HDFC Standard Life Insurance Company Limited 4937541 4937541 0.84
MACQUARIE Emerging Markets Asian Trading PTE Ltd 4672000 4672000 0.79 GMO Emerging Markets Fund 4206789 4206789 0.71 LIC of India Market Plus Growth Fund 3676115 3676115 0.62 NOMURA Singapore Limited 3628000 3628000 0.62
XXI. SHAREHOLDING PATTERN (as on June 30, 2014) Category of Shareholder No. of Total No. of Shares Total No. of Shares Total
Share- held in Shareholding as holders Dematerialized a % of Total No. Form of Shares (A) Shareholding of Promoter and Promoter Group (1) Indian Central Government / 1 354614903 354614903 60.14 State Government(s) (2) Foreign 0 0 0 0 Total shareholding of Promoter and Promoter 1 354614903 354614903 60.14 Group (A) (B) Public Shareholding (1) Institutions Mutual Funds / UTI 39 12086592 12086592 2.05 Financial Institutions / 31 16938440 16938440 2.87 Banks Central Government / 1 5000 5000 0 State Government(s) Insurance Companies 10 44400781 44400781 7.53 Foreign Institutional 108 63918870 63918870 10.84 Investors Sub Total 189 137349683 137349683 23.29 (2) Non-Institutions Bodies Corporate 1946 15633959 15072359 2.65
Individuals
Individual shareholders holding nominal share capital 209866 68772509 53378353 11.66 up to Rs. 1 lakh Individual shareholders holding nominal share capital 378 10565823 10155523 1.79 in excess of Rs. 1 lakh Any Others (Specify) 1699 2678026 2512526 0.45 Trust & Foundation 33 956919 953519 0.16 Non Resident Indians 1659 1697319 1552919 0.29 Overseas Corporate 1 6088 6088 0 Bodies Educational Institutions 3 3300 0 0
Societies 3 14400 0 0
Sub Total 213889 97650317 81118761 16.56 Total Public shareholding 214078 235000000 218468444 39.86 (B) Total (A)+(B) 214079 589614903 573083347 100.00 (C) Shares held by Custodians and against which Depository 0 0 0 0 Receipts have been issued Total (A)+(B)+(C) 214079 589614903 573083347 100.00
XXII. BORROWINGS The borrowings of Bank as on March 31, 2014 stood as follows -
Amount Type of Facility (Rs. In crore)
Demand 27.10 From Banks Deposits
Term Deposits 3.06
Demand 7466.07 From Others Deposits Term Deposits 106656.12
Depositors Saving Banks 27692.78 Deposits Various bondholders Lower Tier 2 1820.00 Bonds Various bondholders Upper Tier 2 1000.00 Bonds Various Basel III 2921.07 Bondholders complaint Tier 2 Bonds / Capital
Various bondholders Perpetual Bonds 200.00
Reserve Bank of India Borrowings 6396..00 Others Borrowings --- Other Institutions & Agencies Borrowings 1702.03 Outside India Borrowings 2067.07 Banks/ Institutions Bills Payable 649.36
The details of the outstanding Debt Bonds as on 30.06.2014: Issue Deemed Tenure Credit Coupon Date of Issue Amount Series Date of (in months) Rating Rate Redemption (Rs. in crores) Allotment (% p.a.) Subordinated 11.01.2008 124 ‘IND AA’ 9.15% 11.05.2018 700.00 Debt Bond s VI by M/s India Issue, F Series Ratings
‘CARE AA’ by M/s CARE Ratings
Subordinated 10.09.2008 120 ‘IND AA’ by 11.00% 10.09.2018 600.00 Debt BondsVII M/s India Issue , G Ratings Series CARE AA’ by M/s CARE Ratings
Subordinated 24.12.2009 120 CARE AA’ 8.55% 24.12.2009 320.00 Debt Bonds by M/s VIII Issue-H CARE Series Ratings
BWR AA+/ Negative Outlook by M/s Brickwork Ratings
Innovative 31.12.2008 Perpetual BWR AA/ 9.50% Perpetual 200.00 Perpetual Debt Negative Bonds Outlook by M/s Brickwork Ratings“ CRISIL AA / Stable by M/s CRISIL Limited
Upper Tier II 25.03.2009 15 years CRISIL 9.30% 25.03.2024 200.00 Bonds, I issue AA/Stable by Series A M/s CRISIL Limited
BWR AA/ Negative Outlook by M/s Brickwork Ratings
Upper Tier II 08.06.2009 15 years CRISIL 8.72% 08.06.2024 520.00 Bonds, II Issue AA/Stable by Series B M/s CRISIL Limited
BWR AA/ Negative Outlook by M/s Brickwork Ratings
Upper Tier II 18.12.2009 15 years BWR AA/ 8.70% 18.12.2024 280.00 Bonds, III Issue Negative Series C Outlook by M/s Brickwork Ratings
CARE AA- by M/s CARE Ratings TOTAL 2820.00
* redeemed on due dates.
All the above borrowings are unsecured. No directors have given any personal guarantee for collaterally securing the borrowings.
XXIII. SUMMARY TERM SHEET Issuer Andhra Bank Type of Instrument Senior Unsecured Redeemable Long Term Bonds
Nature of Instrument Unsecured
Seniority Senior Mode of Issue Private Placement Eligible Investors The following categories of investors may apply for the Bonds, subject to applicable laws and subject to fulfilling their respective investment norms/ rules by submitting all the relevant documents along with the Application Form. a. Mutual Funds; b. Public Financial Institutions as defined under the Companies Act; c. Scheduled Commercial Banks; d. Insurance Companies; e. Provident, Gratuity, Pension and Superannuation Funds; f. Cooperative Banks (District and State Coop. Banks); g. Regional Rural Banks authorised to invest in bonds/debentures; h. Companies, Bodies Corporate authorised to invest in bonds/ debentures; i. Trusts authorised to invest in bonds/debentures; and j. Statutory Corporations/ Undertakings established by Central/ State legislature authorised to invest in bonds/debentures, etc.
Listing National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE). Issue will be listed within 15 days from the deemed date of Allotment. In case of delay in listing, Bank will pay penal interest of 1% p.a. over the coupon rate from the expiry of 20 days from the deemed date of allotment till the listing of such debt securities to the investor.
Credit Rating: CARE : CARE AA+ (Double A Plus) and CRISIL : CRISIL AA+ / Stable Issue Size Rs 500 Cr plus Green shoe option of Rs 500 Crs Option to retain over The amount of over-subscription to be retained will be decided by the Bank Subscription Objects of the Issue Enhancing long term resources for funding infrastructure and affordable housing projects Details of utilization of The resources raised, would be utilized for our business operations and to meet the demand for long term financing. the proceeds Indicative Coupon Rate 9.35% per annum Step Up / Step Down No Step Up or Step Down Option Coupon Rate Coupon Payment Annually Frequency Coupon 9.35 % per annum Coupon Type Fixed Coupon Reset Process N.A. Day Count Basis Actual /Actual Interest on Application Interest at the rate of 9.35 %p.a. (subject to deduction of Income Tax under the Provisions of the Income Tax Act 1961, or any Money * Statutory modification or re-enactment as applicable) will be paid to all the applicants on the Application Money for the Bonds. Such interest shall be paid from the date of realization of cheque (s)/Demand Draft (s) and in case of RTGS/other means of electronic transfer interest shall be paid from the date of receipt of funds to one day prior to the Deemed Date of Allotment.
The interest on Application Money will be computed as per Actual/Actual Day count convention. Such interest would be paid on all the valid applications including the refunds. Where the entire subscription amount has been refunded, the interest on Application Money will be paid along with the refund orders. Where an applicant is allotted lesser number of bonds than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money. Income Tax at Source (TDS) will be deducted at the applicable rate on interest on Application Money.
Default Interest rate As per the extant SEBI Guidelines Tenor 7 years from the Deemed Date of Allotment Redemption Date August 22, 2021 Redemption Amount At par, Rs.10 lakhs per Bond Redemption Premium No premium / discount on redemption / Discount Issue price Rs 10 lakhs per bond Discount at which the N.A. security is issued and effective yield as a result of such discount Put option Date No Put Option Put option Price N.A. Call option Date No Call option. Call option Price N.A. Put Notification Time N.A. Call Notification Time N.A. Face Value Rs 10 lakhs per bond Minimum Application 1 bond and in multiples of 1 bond thereafter. Issue Timing ^ Issue Opening Date August 11, 2014 Issue Closing Date August 22, 2014 Deemed Date of August 22, 2014 Allotment: Issuance mode of the Demat only Instrument Trading mode of the Demat only Instrument Settlement mode of the instrument Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism Depository National Securities Depository Limited and Central Depository Services (India) Limited Business Day Convention “Business Day” shall be a day on which commercial banks are open for business in the city of Hyderabad, Telangana. If any coupon payment date and/or redemption date falls on a day which is not a business day, payment of interest and/or principal amount shall be made on the next business day without liability for making payment of interest for the delayed period.
Record Date For Interest and Redemption payment, record date would be 15 days prior to interest and / or redemption date.
Transaction Issue subscription application form Documents Trustee IDBI Trusteeship Services Ltd (ITSL) has been appointed by the Bank to act as trustees for and on behalf of the bond holders.
Governing Law and The Bonds are governed by and shall be construed in accordance Jurisdiction With the existing laws of India. Any dispute arising thereof shall be Subject to the jurisdiction of High Court of Hyderabad, Telangana.
Basis of Allotment Preference would be given to investors who invest on earlier dates (First come first serve basis).
* Subject to deduction of tax at source, as applicable. ^ The Bank reserves its sole and absolute right to modify (pre-pone/ postpone) the issue opening/ closing without giving any reasons or prior notice. In such a case, investors shall be intimated about the revised time schedule by the Bank. The Bank also reserves the right to keep multiple Deemed Date(s) of Allotment at its sole and absolute discretion without any notice.
XXIV. TERMS OF OFFER (DETAILS OF SENIOR UNSECURED DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)
PRIVATE PLACEMENT OF UNSECURED REDEEMABLE NON-CONVERTIBLE SENIOR UNSECURED BONDS IN THE NATURE OF DEBENTURES OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 500 + Rs 500 Green Shoe CRORE
1. ISSUE SIZE
Andhra Bank (“ANDHRA BANK” or the “Issuer” or the “Bank”) proposes to raise Rs 500 crore with Green Shoe option of Rs 500 crores through issue Senior Unsecured Redeemable Long Term Bonds in the nature of Debentures of face value of Rs.10 lakhs each (“Bonds”) (the “Issue”).
2. ELIGIBILITY TO COME OUT WITH THE ISSUE
The Bank or its promoter has not been restrained or prohibited or debarred by SEBI/ any other Government authority from accessing the securities market or dealing in securities and no such direction or order is in force.
3. REGISTRATION AND GOVERNMENT APPROVALS
The Bank can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by it to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.
4. AUTHORITY FOR THE ISSUE
The present issue of Bonds is being made pursuant to the resolution of the Board of Directors of the Bank, passed at its meeting held on August 02, 2014 and the delegation provided thereunder.
The Bank can issue the Bonds proposed by it in view of the present approvals and no further internal or external permission/ approval(s) is/ are required by it to undertake the proposed activity.
Please refer to RBI/2014-15/103 DBOD.No.BP.BC.6/21.06.201/2014-15 dated July 1, 2014 as well as the Basel II guidelines as contained in the Master Circular DBOD.No.BP.BC. 5/21.06.001/2014-15 dated July 1, 2014 on „Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF)
5. OBJECTS OF THE ISSUE
The proposed issue of Bonds is being made for enhancing long term resources for funding infrastructure and affordable housing projects.
6. UTILISATION OF ISSUE PROCEEDS
The funds being raised by the issuer through the present issue of Bonds are not meant for financing any particular project. The Issuer shall utilize the proceeds of the issue for its regular business activities. The Issuer is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. The Issuer is a Government of India undertaking under the administrative control of Ministry of Finance, Government of India and is managed by professionals under the supervision of the Board of Directors. The management of the Issuer shall ensure that the funds raised via the present issue shall be utilized only towards satisfactory fulfilment of the objects of the issue.
The Issuer undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines/ norms issued by the RBI / SEBI / Stock Exchange(s).
In accordance with the SEBI Debt Regulations, the Issuer undertakes that it shall not utilize the proceeds of the issue for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management. However, the Issuer is a Government of India Undertaking and, as such, it does not have any identifiable „Group Companies or Companies under the Same Management. The issue proceeds shall not be utilized towards full or part consideration for the purchase of any acquisition, including by way of a lease, of any property.
7. MINIMUM SUBSCRIPTION As the current issue of bonds is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Bank shall not be liable to refund the issue subscription (s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.
8. UNDERWRITING
The present Issue of Bonds is not underrwritten.
9. STATUS OF BONDHOLDERS/ SENIORITY OF CLAIM
The Bonds are senior unsecured and long term obligations of the Issuer and, in the event of the winding up of the Issuer, the claims of the holders of the relative Bonds will rank: pari passu along with claims of other uninsured, unsecured creditors of the Bank and senior to (a) the claims for payment of any obligation that, expressly (as permitted under law) or by applicable law, are subordinated to these Bonds, (b) the claims of holders of preference and equity shares of the Issuer and (c) the claims of investors in other instruments eligible for capital status.
10. APPLICABLE RBI GUIDELINES
The present issue of Bonds is being made in pursuance of the RBI provision. Please refer to RBI/2014-15/103 DBOD.No.BP.BC.6/21.06.201/2014-15. The definitions, abbreviations or terms wherever used shall have the same meaning as defined in the RBI circular governing the issue of these bonds.
11. PURCHASE/ FUNDING OF BONDS BY THE BANK
Neither the Bank nor any related party over which the Bank exercises control or significant influence (as defined under relevant Accounting Standards) shall purchase the Bonds, nor would the Bank directly or indirectly fund the purchase of the Bonds. The Bank shall also not grant advances against the security of the Bonds issued by it.
12. FACE VALUE, ISSUE PRICE, EFFECTIVE YIELD FOR INVESTOR
Each Bond has a face value of Rs.10 lakhs and is issued as well as redeemable at par i.e. for Rs.10 lakhs. The Bonds shall be redeemable at par i.e. for Rs 10 lakhs per Bond. Since there is no premium or discount on either issue price or on redemption value of the Bonds, the effective yield for the investors shall be the same as the Coupon Rate on the Bonds.
13. TERMS OF PAYMENT
The full face value of the Bonds applied for is to be paid along with the Application Form. Applicant(s) need to send in the Application Form and the cheque(s)/ demand draft(s)/ RTGS for the full value of Bonds applied for.
Face Value per Bond Minimum Application for Amount Payable on Application per Bond ` 10 Rs 10 lakhs each 10 Bonds and in multiples of 1 Bond thereafter Rs. 10 lakhs
14. DEEMED DATE OF ALLOTMENT
Benefits relating to the Bonds shall be available to the Bondholders from the Deemed Date of Allotment.
ISSUE OF BOND CERTIFICATE(S) Subject to the completion of all statutory formalities within time frame prescribed in the relevant regulations/ act/ rules etc, the initial credit akin to a Letter of Allotment in the Beneficiary Account of the applicant would be replaced with the number of Bonds allotted. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.
DEPOSITORY ARRANGEMENTS The Bank has appointed “MCS Ltd.” [Address: Unit: Andhra Bank, Kashiram Jamnadas Building, Office No. 21/22, Ground Floor 5, P.D Mello Road, (Ghadiyal Godi), Mumbai - 400009; Tel No. (022) - 23726253 - 55; Fax No.022- 23726256; E-mail: [email protected] as Registrars & Transfer Agent for the present Bond Issue.
The Bank shall make necessary depository arrangements with National Securities Depository Ltd. (“NSDL”) and Central Depository Services (India) Ltd. (“CDSL”) for issue and holding of Bonds in dematerialized form. In this context the Bank shall sign two tripartite agreements as under:
Tripartite Agreement between the Bank, NSDL and the Registrar for dematerialization of the Bonds offered under the present Issue.
Tripartite Agreement between the Bank, CDSL and the Registrar for dematerialization of the Bonds offered under the present Issue. Bondholders can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.
PROCEDURE FOR APPLYING FOR DEMAT FACILITY
a. Applicant(s) should have/ open a Beneficiary Account with any Depository Participant of NSDL or CDSL.
b. The applicant(s) must specify their beneficiary account number and depository participants ID in the relevant columns of the Application Form.
c. If incomplete/ incorrect beneficiary account details are given in the Application Form which does not match with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.
d. The Bonds shall be directly credited to the Beneficiary Account as given in the Application Form and after due verification, allotment advice/ refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant‟s Depository Account will be provided to the applicant by the Depository Participant of the applicant.
e. Interest or other benefits with respect to the Bonds would be paid to those bondholders whose names appear on the list of beneficial owners given by the depositories to the Bank as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, the Bank shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Bank. On receiving such intimation, the Bank shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.
f. Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s) only in dematerialized form.
MARKET LOT The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialized form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.
TRADING OF BONDS The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of `10 lakhs each. Trading of Bonds would be permitted in demat mode only in standard denomination of ` 10 lakhs and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trad ing in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nation- wide trading terminal or such other platform as may be specified by SEBI.
MODE OF TRANSFER OF BONDS The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Bank.
Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so, will be governed by the then prevailing guidelines of RBI.
COMMON FORM OF TRANSFER
The Bank undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Disclosure Document.
INTEREST ON APPLICATION MONEY
Interest at the rate of 9.35% p.a. (subject to deduction of Income Tax under the Provisions of the Income Tax Act 1961, or any statutory modification or reenactment as applicable) will be paid to all the applicants on the Application Money for the Bonds. Such interest shall be paid from the date of realization of Demand Draft (s) and in case of RTGS/NEFT other means of electronic transfer interest shall be paid from the date of receipt of funds to one day prior to the Deemed Date of Allotment. The interest on Application Money will be computed as per Actual/Actual Day count convention. Such interest would be paid on all the valid applications including the refunds. Where the entire subscription amount has been refunded, the interest on Application Money will be paid along with the refund orders. Where an applicant is allotted lesser number of bonds than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money. Income Tax at Source (TDS) will be deducted at the applicable rate on interest on Application Money.
INTEREST ON THE BONDS The Bonds shall carry a fixed rate of interest at the Coupon Rate from, and including, the Deemed Date of Allotment up to, but excluding the Redemption Date, payable on the “Coupon Payment Dates”, on the outstanding principal amount of Bonds till Redemption Date, to the holders of Bonds (the “Holders” and each, a “Holder”) as of the relevant Record Date. Interest on Bonds will cease from the Redemption Date in all events.
The Bonds shall not have step-ups or any other incentives to redeem. Further, the Bonds shall not have a credit sensitive coupon feature, i.e. a coupon that is reset periodically based in whole or in part on Banks credit standing.
If any Coupon Payment Date falls on a day which is not a business day (Business Day) being a day on which commercial banks are open for business in the city of Hyderabad, Telangana State), payment of interest will be made on next business day without liability for making payment of interest for the delayed period.
In case of Bonds for which the beneficial owner is not identified by the relevant depository as on the Record Date, the issuer would keep in abeyance the payment of interest and / or other benefits, till such time that the beneficial owner is identified by the depository and other benefits, till such time that the beneficial owner is identified by the depository and conveyed to it, whereupon the interest or benefits shall be paid to the relevant Bond holders within a period of 30 Business Days.
COMPUTATION OF INTEREST Interest for each of the interest periods shall be computed as per Actual/ Actual day count convention on the face value amount of Bonds outstanding at the Coupon Rate rounded off to the nearest Rupee. W here the interest period (start date to end date) includes February 29, interest shall be computed on 366 days -a-year basis, on the face value amount of Bonds outstanding.
RECORD DATE Reference date for payment of interest/ repayment of principal which shall be the date falling 15 days prior to the relevant Interest Payment Date on which interest or the Redemption/ Maturity Date on which the Maturity Amount is due and payable. In the event the Record Date falls on a day which is not a business day, the next business day will be considered as the Record Date.
DEDUCTION OF TAX AT SOURCE Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re -enactment thereof will be deducted at source out of interest payable on Bonds. Interest payable subsequent to the Deemed Date of Allotment of Bonds shall be treated as “Interest on Securities” as per Income Tax Rules. Bondholders desirous of claiming exemption from deduction of income tax at source on the interest payable on Bonds should submit tax exemption certificate/ document, under Section 193 of the Income Tax Act, 1961, if any, with the Registrars, or to such other person(s) at such other address(es) as the Bank may specify from time to time through suitable communication, at least 45 days before the payment becoming due. However, with effective from 01.06.2008, tax is not to be deducted at source under the provisions of section 193 of Income Tax Act, 1961, if the following conditions are satisfied: a. interest is payable on any security issued by a company b. such security is in dematerlized form c. such security is listed on a recognised stock exchange in India
Present issue of Bonds fulfils the above conditions and therefore, no tax would be deducted on the interest payable. However, the Bank shall pursue the provisions as amended from time to time with respect to applicability of TDS at the time of payment of interest on Bonds. Regarding deduction of tax at source and the requisite declaration forms to be submitted, applicants are advised to consult their own tax consultant(s).
PUT & CALL OPTION Put and Call Option is not available to the Bondholder(s).
ADDITIONAL COVENANTS a. DELAY IN LISTING: The Issuer shall complete all formalities and seek listing permission within 15 days from the
Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).
b. REFUSAL OF LISTING: If listing permission is refused before the expiry of the 20 days from the Deemed Date of Allotment, the Issuer shall forthwith repay all monies received from the applicants in pursuance of the Disclosure Document along with penal interest of 1.00% per annum over the Coupon Rate from the expiry of 20 days from the Deemed Date of Allotment. If such monies are not repaid within 8 days after the Issuer becomes liable to repay it (i.e. from the date of refusal or 20 days from the Deemed Date of Allotment, whichever is earlier), then the Issuer and every director of the Issuer who is an officer in default shall, on and from the expiry of 8 days, will be jointly and severally liable to repay the money, with interest at the rate of 15 per cent per annum on application money.
REDEMPTION The Bonds will be redeemed on the expiry of 7 years from the date of deemed allotment i.e., on August 22, 2021
SETTLEMENT/ PAYMENT ON REDEMPTION Payment of interest and repayment of principal shall be made by way of demand draft(s)/ through direct credit by way of RTGS/ NEFT mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Bank as on the Record Date.
The Bonds shall be taken as discharged on payment of the redemption amount by the Bank on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment will be a legal discharge of the liability of the Bank’s towards the Bondholders. On such payment being made, the Bank shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted. The Bank’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Bank will not be liable to pay any interest or compensation from the Redemption Date, on the Bank’s dispatching/ crediting the amount to the Beneficiary (ies) as specified.
EFFECT OF HOLIDAYS Should any of dates defined above or elsewhere in the Disclosure Document, excepting the Deemed Date of Allotment, fall on a Sunday or a Public Holiday, the next working day shall be considered as the effective date(s). In case any Interest Payment Date(s) and/or the Date(s) of Redemption falls on a holiday, interest/ redemption will be paid on the next working day (i.e. a day on which scheduled commercial banks are open for business in Hyderabad).
LIST OF BENFICIAL OWNERS The Bank shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.
SUCCESSION In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Bank will recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s). The Bank shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Bank may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.
Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied with: a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin. Such holding by the NRI will be on a non-repatriation basis.
WHO CAN APPLY The following categories of applicants are eligible to apply for this Issue of Bonds. However, the prospective subscribers must make their own independent evaluation and judgement regarding their eligibility to invest in the Issue. a. Mutual Funds; b. Public Financial Institutions as defined under the Companies Act. c. Scheduled Commercial Banks; d. Insurance Companies; e. Provident Funds, Gratuity Funds, Superannuation Funds and Pension Funds;
f. Co-operative Banks (District and State Coop.Banks); g. Regional Rural Banks authorized to invest in bonds/ debentures; h. Companies and Bodies Corporate authorized to invest in bonds/ debentures; i. Trusts authorized to invest in bonds/ debentures; and j. Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/debentures, etc.
All applicants are required to comply with the relevant regulations/ guidelines applicable to them for investing in the issue of Bonds as per the norms approved by Government of India, Reserve Bank of India or any other statutory body from time to time.
However, out of the aforesaid class of applicants eligible to invest, this Disclosure Document is intended solely for the use of the person to whom it has been sent by the Bank for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities offered herein, and it is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective applicant receiving this Disclosure Document from the Bank).
WHO ARE NOT ELIGIBLE TO APPLY FOR BONDS This Issue is not being offered to the following categories of applicants and any application from such applicants will be deemed an invalid application and rejected: a. Retail investors b. Minor c. Foreign Nationals; d. Persons resident outside India; e. Alternative Investment Funds; f. Overseas Corporate Bodies; g. Partnership firms formed under applicable laws in India in the name of the partners; h. Hindu Undivided Families through Karta; and i. Person ineligible to contract under applicable statutory/ regulatory requirements
DOCUMENTS TO BE PROVIDED BY APPLICANTS Applicants need to submit the certified true copies of the following documents, along-with the Application Form, as applicable:
Memorandum and Articles of Association/ Constitution/ Bye-laws/ Trust Deed; Board Resolution authorizing the investment and containing operating instructions; Power of Attorney/ relevant resolution/ authority to make application; Specimen signatures of the authorized signatories (ink signed), duly certified by an appropriate authority; Government Notification (in case of Primary Co-operative Bank and RRBs); Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax Department; Copy of a cancelled cheque for ECS payments; Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable
MODE OF SUBSCRIPTION / HOW TO APPLY This being a private placement Issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.
Applications complete in all respects must be submitted before the last date indicated in the issue time table or such extended time as decided by the Bank, at any of the designated collection centres, accompanied by the application money by way of cheque(s)/ demand draft(s) drawn on any bank including a co-operative bank which is situated at and is a member of the Bankers‟ clearing house located at a place where the application form is submitted. The original Applications Forms (along with all necessary documents as detailed in this Disclosure Document), pay-in slip and other necessary documents should be sent to the Head Office of the Bank on the same day.
Applications should be for a minimum of 10 Bonds and in multiples of 1 Bond thereafter @ Rs. 10 lakhs per bond. The remittance of application money should be made by electronic transfer of funds through RTGS mechanism for credits in favour of “ANDHRA BANK– INFRA BOND APPLICATION MONEY A/C ISSUE”.
The Details of payment RTGS A/C No 117911100001370 RTGS IFSC CODE ANDB0001179 (Please note that the 5th to 7th letters in the above code are ZERO's) BRANCH ANDHRA BANK, PATTABHI BHAVAN BRANCH, SAIFABAD, HYDERABAD- 500004
Cheque(s), demand draft(s), money orders, postal orders will not be accepted. The Bank assumes no responsibility for any
applications lost in mail. The entire amount of Rs.10 lakhs per Bond is payable on application.
Applications should be for the number of Bonds applied by the Applicant. Applications not completed in the said manner are liable to be rejected. The name of the applicants bank, type of account and account number must be filled in the Application Form. This is required for the applicants own safety and these details will be printed on the refund orders and interest/ redemption warrants.
The applicant or in the case of an application in joint names, each of the applicant, should mention his/her Permanent Account Number (PAN) allotted under the Income-Tax Act, 1971 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the applicant should mention his PAN/GIR No. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant is not assessed to income tax, the applicant shall mention „Not Applicable‟ (stating reasons for non applicability) in the appropriate box provided for the purpose. Application Forms without this information will be considered incomplete and are liable to be rejected.
All applicants are requested to tick the relevant column “Category of Investor” in the Application Form. Public/ Private/ Religious/ Charitable Trusts, Provident Funds and Other Superannuation Trusts and other investors requiring “approved security” status for making investments. For further instructions about how to make an application for applying for the Bonds and procedure for remittance of application money, please refer to the Summary Term Sheet and the Application Form.
FORCE MAJEURE The Bank reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.
APPLICATIONS UNDER POWER OF ATTORNEY A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Bank or to the Registrars or to such other person(s) at such other address(es) as may be specified by the Bank from time to time through a suitable communication.
APPLICATION BY MUTUAL FUNDS In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.
ACKNOWLEDGEMENTS No separate receipts will be issued for the application money. However, the Bankers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application Form.
BASIS OF ALLOCATION Beginning from the issue opening date and until the day immediately prior to the issue closing date, full and firm allotment against all valid applications for the Bonds will be made to applicants on a first-come-first-served basis, subject to the limit of the Issue size, in accordance with applicable laws. If and to the extent, the Issue is fully subscribed prior to the issue closing date, no allotments shall be accepted once the Issue is fully subscribed.
Allotment will be done on “day-priority basis”. In case of oversubscription over and above the issue size, the allotment of such valid applications received on the closing day shall be on pro rata basis to the applicants in the ratio in which they have applied regardless of category of investors. If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in multiples of one Bond (which is the market lot), the decimal would be rounded off to the next higher whole number if that decimal is 0.5 or higher and to the next lower whole number if that decimal is lower than 0.5. All successful applicants on the issue closing date would be allotted the number of Bonds arrived at after such rounding off.
RIGHT TO ACCEPT OR REJECT APPLICATIONS The Bank reserves full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realization of the cheque(s)/ demand drafts(s) till one day prior to the date of refund. The application forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to:
a. Number of bonds applied for is less than the minimum application size; b. Applications exceeding the issue size; c. Bank account details not given;
d. Details for issue of Bonds in electronic/ dematerialized form not given; e. PAN/GIR and IT Circle/W ard/District not given; f. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted;
In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted.
PAN/GIR Number All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1971 and the Income Tax Circle/ W ard/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.
SIGNATURES Signatures should be made in English and in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.
NOMINATION FACILITY As per Section 72 of the Companies Act 2013 only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Bonds shall vest in the event of his death. Non -individuals including holders of Power of Attorney cannot nominate.
RIGHT OF BONDHOLDER(S) Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The Bond(s) shall not confer upon the holders the right to receive notice, or to attend and vote at the General Meeting of the Bank. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first. Besides the above, the Bonds shall be subject to the provisions of the Banking Regulation Act, 1949, as amended, the terms of this Bond Issue and the other terms and conditions as may be incorporated in the Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.
MODIFICATION OF RIGHTS The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Bank where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Bank.
FUTURE BORROWINGS The Bank shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Bank may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.
BOND/ DEBENTURE REDEMPTION RESERVE (“DRR”) The Ministry of Corporate Affairs, Government of India has vide circular no. 11/02/2012-CL-V(A) dated February 11, 2013, clarified that no Debenture Redemption Reserve is required for debentures issued by Banking Companies for both public as well as well as privately placed debentures. The Bank has appointed a trustee to protect the interest of the Bondholders.
NOTICES All notices required to be given by the Bank or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one All India English daily newspaper and one regional language newspaper.
All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Bank or to such persons at such address as may be notified by the Bank from time to time.
JOINT-HOLDERS
Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions contained in the Companies Act 2013.
DISPUTES & GOVERNING LAW The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof will be subject to the jurisdiction of district courts of Hyderabad.
INVESTOR RELATIONS AND GRIEVANCE REDRESSAL
Arrangements have been made to redress investor grievances expeditiously as far as possible, the Bank endeavours to resolve the investor grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at Corporate office of the Bank. All investors are hereby informed that the Bank has appointed a Compliance Officer who may be contracted in case of any pre- issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non- receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Disclosure Document.
CREDIT RATING FOR THE BONDS Other than the credit rating mentioned hereinabove, the Bank has not sought any other credit rating from any other credit rating agency (ies) for the Bonds offered for subscription under the terms of this Disclosure Document.
The above rating is not a recommendation to buy, sell or hold securities and applicants should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency . The rating obtained is subject to revision at any point of time in the future. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc.
Compliance Officer Mr. T. R. Ramabhadran General Manager & Company Secretary ANDHRA BANK Merchant Banking Division Head Office: Dr. Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad – 500004 Tel.: (040)23252371 Fax. (040) 23230883 Website: www.andhrabank.in / E-mail: [email protected]
The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc.
LEAD ARRANGERS TO THE ISSUE
M/s. Darashaw & Co. Pvt. Ltd, Regent Chambers,12th Floor, 208, Nariman Point, Mumbai – 400 021. Tel: (022) 66306612. Fax: 91-22-22040031.
ICICI Securities Primary Dealership Ltd. ICICI Centre, H.T. Parekh Marg, Churchgate, Mumbai- 400020 Tel: (022) 22882460/70, 22777600 Fax : (022) 22882313/2312
SBI Capital Markets Limited 202, Maker Tower ‘E’, Cuffe Parade, Mumbai-400005 Tel: (022) 22178300 Fax: (022) 22188332
Tipsons Consultancy Services Pvt. Ltd. 401, Sheraton House, Opp. Ketav Petrol Pump, Polytechnic Road, Ambawadi Ahmedabad - 380015 Tel: (079) 30480295, 30427750 Fax: (079) 30480298
Trust Investment Advisors Pvt Ltd 109/110, Balrama, Bandra Kurla Complex, Bandra (E), Mumbai- 400051
Registrar to the Issue M/s. MCS Ltd KASHIRAM JAMNADAS BLDG, OFFICE NO.21/22, GROUND FLOOR, 5, P.D'MELLO ROAD, (GHADIYAL GODI) MUMBAI – 400 009. Tel No. (022) 23726252 - 55. Fax No. (022) 23726256.
XXV. CREDIT RATING & RATIONALE THEREOF M/s CARE Ratings vide its letter dated 30.07.2014 has assigned a ‘CARE AA+’ (pronounced as Double A plus) which indicates high degree of safety regarding timely servicing of financial obligations and such instruments carry very low credit risk for an amount of Rs. 1000.00 crore to the present Senior Unsecured Redeemable Long Term Bonds issue of the Bank. A copy of rating letter from is enclosed elsewhere in this Information Memorandum.
M/s CRISIL Ltd. Vide its letter dated 31.07.2014 has assigned a ‘CRISIL AA+/stable (pronounced CRISIL double A plus ratings with Stable Outlook) for an amount of Rs. 1000.00 crore to the present Senior Unsecured Redeemable Long Term Bonds issue of the Bank. Instruments with this rating considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. A copy of rating letter from M/s CRISIL is enclosed elsewhere in this Information Memorandum.
Other than the two credit ratings mentioned hereinabove, the Bank has not sought any other credit rating from any other credit rating agency (ies) for the Bonds offered for subscription under the terms of this Disclosure Document.
The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc.
XXVI. NAME OF DEBENTURE TRUSTEE In accordance with the provisions of Section 117B of the Companies Act, 1956 (1 of 1956) and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bank has appointed IDBI Trusteeship Services Ltd. (ITSL) to act as Trustees (“Trustees”) for and on behalf of the holder(s) of the Bonds. The address and contact details of the Trustees are as under:
IDBI Trusteeship Services Ltd. Registered Office, Asian Building, Ground Floor, 17, R Kamani Marg, Mumbai – 400 001. Tel No. (022) 56311771-3. Fax No. 91-22-56311776. E-mail: [email protected]
A copy of letter dated 11.08.2014 from IDBI Trusteeship Services Ltd. conveying their consent to act as Trustee for the current issue of Bonds is enclosed elsewhere in this Disclosure Document.
The Bank hereby undertakes that a Trust Deed shall be executed by it in favour of the Trustees within three months of the closure of the Issue. The Trust Deed shall contain such clauses as may be prescribed under section 117A of the Companies Act, 1956 and those mentioned in Schedule IV of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further the Trust Deed shall not contain any clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Trustees or the Bank in relation to any rights or interests of the holder(s) of the Bonds, (ii) limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and circulars or guidelines issued by SEBI, (iii) indemnifying the Trustees or the Bank for loss or damage caused by their act of negligence or commission or omission.
The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the Bank to the Trustees on behalf of the Bondholder(s) shall discharge the Bank pro tanto to the Bondholder(s). The Trustees shall protect the interest of the Bondholders in the event of default by the Bank in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Bank. No Bondholder shall be entitled to proceed directly against the Bank unless the Trustees, having become so bound to proceed, fail to do so. In the event of Bank defaulting in payment of interest on Bonds or redemption thereof, any distribution of dividend by the Bank shall require approval of the Trustees.
XXVII. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of National Stock Exchange of India Limited (“NSE”) and Bombay Stock Exchange Limited (“BSE”). The Bank has made an application to NSE and BSE for seeking its in-principle approval for listing of Bonds offered under the terms of this Disclosure Document.
In pursuance of SEBI Debt Regulations, the Bank shall make listing application to NSE within 15 days from the Deemed Date of Allotment of Bonds and seek listing permission within 20 days from the Deemed Date of Allotment of Bonds. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Bank shall pay penal interest of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).
In connection with listing of Bonds with NSE and BSE, the Bank hereby undertakes that:
(a) It shall comply with the conditions of listing as specified in the Listing Agreement for the Bonds;
(b) The credit rating obtained for the Bonds shall be periodically reviewed by the credit rating agency) and any revision in the rating shall be promptly disclosed by the Bank to NSE and BSE;
(c) Any change in credit rating shall be promptly disseminated to the Bondholder(s) in such manner as NSE and BSE may determine from time to time;
(d) The Bank, the Trustees, NSE and BSE shall disseminate all information and reports on the Bonds including compliance reports filed by the Banks and the Trustees regarding the Bonds to the Bondholder(s) and the general public by placing them on their websites;
(e) Trustees shall disclose the information to the Bondholder(s) and the general public by issuing a press release and placing on the websites of the Trustees, the Bank and NSE and BSE, in any of the following events:
(i) Default by Bank to pay interest on the Bonds or redemption amount; (ii) revision of the credit rating assigned to the Bonds.
(f) The Bank shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Bank shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all Qualified Institutional Buyers (“QIBs”) and other existing Bondholder(s) within two working days of their specific request.
XXVIII. DETAILS OF OTHER BORROWINGS (DETAILS DEBT SECURITIES ISSUED IN THE PAST, PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION, HIGHEST TEN HOLDERS OF EACH CLASS OR KIND OF SECURITIES, DEBT EQUITY RATIO)
The details of the outstanding Debt Bonds as on 30.06.2014: Issue Deemed Tenure Credit Coupon Date of Issue Amount Series Date of (in months) Rating Rate Redemption (Rs. in crores) Allotment (% p.a.) Subordinated 11.01.2008 124 ‘IND AA’ 9.15% 11.05.2018 700.00 Debt Bond s VI by M/s India Issue, F Series Ratings
‘CARE AA’ by M/s CARE Ratings
Subordinated 10.09.2008 120 ‘IND AA’ by 11.00% 10.09.2018 600.00 Debt BondsVII M/s India Issue , G Ratings Series CARE AA’ by M/s CARE Ratings
Subordinated 24.12.2009 120 CARE AA’ 8.55% 24.12.2009 320.00 Debt Bonds by M/s VIII Issue-H CARE Series Ratings
BWR AA+/ Negative Outlook by M/s Brickwork Ratings
Innovative 31.12.2008 Perpetual BWR AA/ 9.50% Perpetual 200.00 Perpetual Debt Negative Bonds Outlook by M/s Brickwork Ratings“
CRISIL AA / Stable by M/s CRISIL Limited
Upper Tier II 25.03.2009 15 years CRISIL 9.30% 25.03.2024 200.00 Bonds, I issue AA/Stable by Series A M/s CRISIL Limited
BWR AA/ Negative Outlook by M/s Brickwork Ratings
Upper Tier II 08.06.2009 15 years CRISIL 8.72% 08.06.2024 520.00 Bonds, II Issue AA/Stable by Series B M/s CRISIL Limited
BWR AA/ Negative Outlook by M/s Brickwork Ratings
Upper Tier II 18.12.2009 15 years BWR AA/ 8.70% 18 280.00 Bonds, III Issue Negative .12.2024 Series C Outlook by M/s Brickwork Ratings
CARE AA- by M/s CARE Ratings TOTAL 2820.00
* redeemed on due dates.
All the above borrowings are unsecured. No directors have given any personal guarantee for collaterally securing the borrowings.
2. OTHER BORROWINGS (as on March 31, 2014)
The borrowings of Bank as on March 31, 2014 stood as follows –
Amount Type of Facility (Rs. In crore) Demand 27.10 From Banks Deposits
Term Deposits 3.06
Demand 7466.07 From Others Deposits Term Deposits 106656.12
Depositors Saving Banks 27692.78 Deposits Various bondholders Lower Tier 2 1820.00 Bonds Various bondholders Upper Tier 2 1000.00 Bonds Various Basel III 2921.07 Bondholders complaint Tier 2 Bonds / Capital
Various bondholders Perpetual Bonds 200.00 Reserve Bank of India Borrowings 6396..00 Others Borrowings --- Other Institutions & Agencies Borrowings 1702.03 Outside India Borrowings 2067.07 Banks/ Institutions Bills Payable 649.36
3. HIGHEST 10 HOLDERS OF EACH CLASS AND KIND OF SECURITIES
A. TOP 10 EQUITY SHAREHOLDERS (as on June 30, 2014)
NAME OF CONTROLLER/SIGNIFICANT NameSHAREHOLDERS of the shareholder No. of Shares No. of Shares Shareholding Held in Demat in % Form President of India 35,46,14,903 35,46,14,903 60.14 Life Insurance Corporation of India 28248359 28248359 4.79 Morgan Stanley Mauritius Company Ltd 9756828 9756828 1.65 LIC of India Money Plus Growth Fund 6896670 6896670 1.17 Bajaj Allianz Life Insurance Company Limited 5117473 5117473 0.86 HDFC Standard Life Insurance Company Limited 4937541 4937541 0.84
MACQUARIE Emerging Markets Asian Trading PTE Ltd 4672000 4672000 0.79
GMO Emerging Markets Fund 4206789 4206789 0.71 LIC of India Market Plus Growth Fund 3676115 3676115 0.62 NOMURA Singapore Limited 3628000 3628000 0.62
B. TOP10HOLDERS OF 9.15 %– 2018 SUBORDINATED DEBT BONDS VI Issue (SERIES- F)(ason30.06.2014)
Sr. Name of Bondholder Address Number of % No. Bonds Held Bond holding 1. Standard Chartered Bank, 3rd Floor, C-38/39, G- Block, BKC 1824.00 26.0571 Crescenzo Securities Bandra (East), Mumbai - 400051 Services
2. Coal Mines Provident Fund Police Line, Dhanbad, Jharkhand, - 1050.00 15.0000 Organisation 826001
3. Standard Chartered Bank, 3rd Floor, C-38/39, G- Block, BKC 626.00 8.9429 Crescenzo Securities Bandra (East), Mumbai - 400051 Services
4. Seamens Provident Fund Krupanidhi 3rd Floor, 9 Walchand 378.00 5.4000 Hirachand Marg, Ballard Estate, Mumbai – 400001
5. The Life Insurance Provident Fund No – 1, 3rd Floor, 200.00 2.8571 Corporation of India Finance and Accounts Department, Central office, Yogakshema West Wing, Jeevan Bima Marg, Nariman Point, Mumbai - 400021 6. Andhra Bank Employees C/o Andhra Bank Head Office, Dr. 200.00 2.8571 Pension Fund Pattabhi Bhavan, Saifabad, Hyderabad - 500004
7. National Thermal Power NTPC Bhawan Scope Complex, 193.00 2.7571 Corporation Limited Delhi - 110003 Employees Provident Fund Trust
8. Food Corporation of India Khadya Sadan, 13th Floor, 16/20 180.00 2.5714 CPF Trust Barakhamba Lane, New Delhi - 110001
9. Larsen and Turbo Officers L and T Capital Company Limited, 100.00 1.4286 and Supervisory Staff 3A 1st Floor Laxmi Tower, C 25 G Provident Fund Block, Bandra Kurla Complex, Bandra, Mumbai - 400051
10. GRIDCO pension Trust Finance Wing Room No 321, 100.00 1.4286 Fund Orissa Power Transmission Corporation Ltd, HQRS Office, Janpath Boinagar, Bhubaneshwar - 751022
C. TOP 10 HOLDERS OF 11.00 % - 2018 SUBORDINATED DEBT BONDS VII Issue (SERIES- G)(ason30.06.2014)
Sr. Name of Bondholder Address Number of % No. BondsHeld Bond holding
1. Standard Chartered Bank Crescenzo Securities Services, 3rd 2420.000 40.3333 Floor, C-38/39, G-Block, BKC Bandra (East) Mumbai, India - 400051
2. Coal Mines Provident Fund Police Line, Dhanbad, Jharkhand - 500.000 8.3333 Organisation 826001
3. Andhra Bank Employees C/o Andhra Bank Head Office, Dr. 450.000 7.5000 Pension Fund Pattabhi Bhavan, Saifabad, Hyderabad - 500004
4. Coal Mines Provident Fund State Bank of India, SEC. SER. 300.000 5.0000 Branch EPFO, SEC. Mumbai Main Branch, Building Mumbai Samachar, Marg Fort, Mumbai - 400001
5. NPS Trust A/C SBI Pension C/O SBI Pension Fund Pvt Ltd, No. – 200.000 3.3333 Fund Scheme Central 32, Makers Chambers – III, Nariman Government point, Mumbai - 400021
6. HPGCL Employees Pension HPGCL Urja Bhawan, C-7, Sector – 200.000 3.3333 Fund Trust 6, Panchkula, Haryana - 134109
7. West Bengal State Bidyut Bhaban, 6th Floor, Block A, 200.000 3.3333 Electricity Distribution Bidhannagar, Kolkata - 700091 Company Limited Employees Pension Fund
8. HVPNL Employees Pension Shakti Bhawan, Sector – 6, 150.000 2.5000 Fund Trust Panchkula – 134109, Haryana
9. HVPNL Employees Pension Shakti Bhawan, Sector – 6, 139.000 2.3167 Fund Trust Panchkula – 134109, Haryana
10. Larsen and Turbo Officers L and T Company Limited, 3 A, 1st 120.000 2.0000 and Supervisory Staff Floor, Laxmi Tower, C-25, G Block, Provident Fund Bandra Kurla Complex, Bandra, Mumbai - 400051
D. TOP 10 HOLDERS OF 8.55% - 2019 SUBORDINATED DEBT BONDS VIII Issue (SERIES-H) (ason30.06.2014)
Sr. Name of Bondholder Address Number of % No. Bonds Held Bond holding
1. Standard Chartered Bank Crescenzo Securities Services, 3rd 1700.000 53.1250 Floor, C-38/39, G-Block, BKC Bandra (East) Mumbai, India - 400051
2. Standard Chartered Bank Crescenzo Securities Services, 3rd 1026.000 32.0625 Floor, C-38/39, G-Block, BKC Bandra (East) Mumbai, India - 400051
3. Tamilnad Merchantile Bank 269/2-4, Avvai Shanmugam Salai, 100.000 3.1250 Limited Royapettah, Chennai - 600014
4. Hindusthan Petroleum 17 J Tata Road, P.o Box No. 11041, 100.000 3.1250 Corporation Limited Mumbai - 400020 Provident Fund
5. The Andhra Bank Mithila Complex Bank Street, 50.000 1.5625 Employees Co Operative Hyderabad - 500095 Bank Ltd
6. Life Insurance Corporation Investment Department, 6th Floor, 50.000 1.5625 of India P & GS Fund West Wing, Central Office Yogakshema, Jeevan Bima Marg, Mumbai - 400021
7. Bank of Baroda Baroda House, First Floor, Mandvi 50.000 1.5625 (Employees) Pension Fund Baroda - 390006
8 Standard Chartered Bank, Crescenzo Securities Services, 44.000 1.3750 3rd Floor C-38/39, G-Block, BKC Bandra (East) Mumbai 400051.
9 Trustees Geb’S C P Fund Sardar Patel Vidyut Bhavan Race 40.000 1.250 course, Alkapuri Baroda - 390007
10 Godrej and Boyce MFG CO Pirojshanagar Vikhroli 30.000 .9375 LTD Employees Gratuity Mumbai - 4000079 Fund.
E. TOP 10 HOLDERS OF 9.50% INNOVATIVE PERPETUAL DEBT BONDS (ason 30.06.2014)
NameofBondholder Address Numberof % BondsHeld Bondholding 1. Indian Overseas Bank 762, Anna Salai Central Office, 300.000 15.0000 Employees Pension Fund Chennai - 600002
2. Oriental Bank of Commerce Plot No 5, Instituional Area, Sector 150.000 7.5000 – 32, Gurgaon, Haryana - 122001
3. Indian Airlines Employees Airlines House, 113 Guru Dwara 127.000 6.3500 Provident Fund Rakabganj Road, New Delhi - 110001
4. Union Bank of India C/o ILFS, ILFS House, Plot no 14, 100.000 5.0000 Raheja Vihar, Chandivali, Andheri (E), Mumbai - 400072
5. Indian Bank Corporate Office Treasury Branch 100.000 5.0000 No 254-260, Avvai Shanmugam Salai, Royapettah, Chennai - 600014
6. Bank of India Provident Terminal Benefits Div. H.R Dept, 3rd 100.000 5.0000 Fund Floor, Star House, C-5, G Block, H.O, B.K.C Bandra (E), Mumbai - 400051
7. Canara bank Mumbai Domestic Treasury (Back Office) 100.000 5.0000 Maker, Chamber – III, 7th Floor, Nariman Point, Mumbai - 400021 8 Air India Employees Air india employees provident fund 100.000 5.0000 Provident fund. account old Air Port Santacruz Mumbai – 400 029
9 Indian Overseas Bank Staff 762, Anna Salai, Chennai - 600002 100.000 5.0000 Gratuity Fund
10. HVPNL Employees Pension Shakti Bhawan, Sector – 6, 90.000 4.5000 Fund Trust Panchkula - 134109
F. TOP 10 HOLDERS OF 9.30% - 2024 UPPERTIER II BONDS I Issue (SERIES A) as on 30.06.2014 Sr. NameofBondholder Address Numberof % No. BondsHeld Bondholding
1. Life Insurance Investment Department, 6th Floor, West 2000.000 100.0000 Corporation of India P & Wing, Central Office Yogakshema, GS Fund Jeevan Bima Marg, Mumbai - 400021
G. TOP 10 HOLDERS OF 8.72% – 2024 UPPERTIER II BONDS II Issue (SERIES B) as on 30.06.2014 Sr. NameofBondholder Address Numberof % No. BondsHeld Bondholding
1. Life Insurance Corporation Investment Department, 6th Floor, West 5000.00 96.1538 of India P & GS Fund Wing, Central Office Yogakshema, Jeevan 0 Bima Marg, Mumbai - 400021
2. Andhra Bank Employees C/o Andhra Bank Head Office, Dr. 100.000 1.9231 Provident Fund Pattabhi Bhavan , Saifabad, Hyderabad - 500004
3. Andhra Bank Employees C/o Andhra Bank Head Office, Dr. 100.000 1.9231 Pension Fund Pattabhi Bhavan, Saifabad, Hyderabad - 500004
H. TOP 10 HOLDERS OF 8.70% - 2024 UPPERTIER II BONDS III Issue (SERIES C) as on 30.06.2014 Sr. NameofBondholder Address Numberof % No. BondsHeld Bondholding
1. Life Insurance Investment Department, 6th Floor, West 2000.000 71.4286 Corporation of India P& Wing, Central Office, Yogakshema, GS Fund Jeevan Bima Marg, Mumbai - 400021
2. Life Insuarnace Investment Department, 6th Floor, West 400.000 14.2857 Corporation of India Wing, Central Office, Yogakshema, Jeevan Bima Marg, Mumbai - 400021
3. SBI General Insurance HDFC Bank Limited, Custody Services 250.000 8.9286 Company Limited Lodha – I, Think Techno Campus Building – alpha, 8th Floor, Kanjur Marg, East Mumbai – 400023 4. Andhra Bank Employees C/o Andhra Bank Head Office, Dr. 100.000 3.5714 Pension Fund Pattabhi Bavan , 5-9-11 Saifabad, Hyderabad -500004
5. Coal Mines Pension Fund State Bank of India, SEC. SER. Branch 50.000 1.7857 EPFO Sec., Mumbai Main Branch, Building Mumbai Samachar Marg Fort, Mumbai - 400001
4 PARTICULARS OF DEBT SECURITIES ISSUED (I) FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, (II) AT A PREMIUM OR DISCOUNT, OR (III) IN PURSUANCE OF AN OPTION
The Bank hereby confirms5 that it has not issued any shares or debt securities or agreed to issue any shares or debt securities for consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance of an option since inception.
XXIX. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS
The Bank hereby confirms that:
a) The main constituents of Bank’s borrowings have been in the form of borrowings from RBI, inter- bank borrowings, call money borrowings, term money borrowings, savings bank deposits, current account deposits, term deposits, subordinated bonds, certificate of deposits etc.
b) The Bank has been servicing all its principal and interest liabilities on time and there has been no instance of delay or default since inception.
c) The Bank has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of roll over against any of its borrowings in the past.
XXX.UNDERTAKING REGARDING COMMON FORM OF TRANSFER The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Bank.
The Bank undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Disclosure Document.
XXXI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE The Bank hereby declares that there has been no material event, development or change at the time of issue which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities of the Bank.
XXXII. PERMISSION/ CONSENT FROM PRIOR CREDITORS The proposed issuance of securities is unsecured bonds.
The Bank hereby confirms that it is entitled to raise money through current issue of Bonds without the consent/ permission/ approval from the Bondholders/ Trustees/ Lenders/ other creditors of the Bank. Further the Bonds proposed to be issued under the terms of this Disclosure Document being unsecured and subordinated in nature, there is no requirement for obtaining permission/ consent from the prior creditors for creating second or pari passu charge in favor of Trustees.
XXXIII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS
A. CARE RATING LETTER
B. CARE RATING RATIONALE
C. CRISIL RATING LETTER
D. CRISIL RATING RATIONALE
E. IDBI TRUSTEESHIP LETTER
F. MCS - REGISTRAR'S CONSENT LETTER
G. APPLICATION FORM
ANDHRABANK (A Government of India Undertaking)
APPLICATION FORM FOR SENIOR UNSECURED REDEEMABLE LONG TERM BONDS To, ANDHRABANK, Merchant Banking Division, Head Office, Dr.PattabhiBhavan, 5-9-11, Saifabad, Hyderabad–500004. For Office Use Only Dear Sir, Date of Receipt of Application Having read, understood and agreed to the contents and terms and conditions of Andhra Bank’s Disclosure Document dated / 0 8 / 1 4 August 11, 2014. I/we hereby apply for allotment to me/us, of the undermentioned Bonds (hereinafter referred to as “Bonds”), out of the Private Placement Issue. I/We irrevocably give my/our authority and consent to IDBI Trusteeship Services Ltd., to act as my/our Trustees and for doing such acts and signing such documents as may be necessary to carry out the duties in the said capacity. The amount payable on application as shown below is remitted herewith. I/We note that the Bank is entitled in its sole and absolute discretion to accept or reject this application in whole or in part without assigning any reason whatsoever. I/We confirm that I/we have not received and will not receive any commission or brokerage or any other incentive in any form, directly or indirectly, for subscribing to the Issue. APPLICANT’S DETAILS (PLEASE READ CAREFULLY THE INSTRUCTIONS ON THE NEXT PAGE BEFORE FILLING UP THIS FORM) SOLE/FIRST APPLICANT’S NAME IN FULL SIGNATORY/AUTHORISED SIGNATORY
SECOND APPLICANT’S NAME
THIRD APPLICANT’S NAME
ADDRESS (Do not repeat name)(Post Box No. alone is not sufficient)
TEL FAX PINCODE
S OLE/FIRST APPLICANT CATEGORY (Tickone) INVESTMENT DETAILS †Scheduled Commercial Bank Face Value/Issue Price Rs.10,00,000/-(Rupees Ten Lacs Only) per Bond †Financial Institution Minimum Application 1 Bond and in multiples of 1 Bond thereafter †Insurance Company Tenure 7 years †Primary/State/District/CentralCo-operative Bank Coupon Rate 9.35% p.a. †RegionalRural Bank Interest Payment Annual
†MutualFund Amount payable per Bond(i) Rs.10,00,000/-
†Company/Body Corporate No.of Bonds Applied For(ii) †Provident/Gratuity/Superannuation Fund Total Amount Payable (Rs.)(in fig) (i)x(ii) †Others(please specify)– PAYMENT DETAILS Total Amount Payable UTR No. (Rs. In figures) (Rs. in words) RTGS Dated Name of the Bank
Branch Applicants shall remit their application money through RTGS to ANDHRA BANK- RTGS Account 117911100001370 (IFSC Code. ANDB0001179)
SOLE/FIRST APPLICANT’S BANK DETAILS (Ref. Instructions) INCOME TAX DETAILS (Ref. Instructions) Bank Name Sole/First Applicant Second Applicant Third Applicant Branch P.A,N./G.I.R.NO. Account Number Type of Account †Savings †Current †Others I.T.Circle/ Ward/District No. IFSC Code T O BE FILLED IN ONLY IF THE APPLICANT IS AN INSTITUTION Name of the Authorised Signatory(ies) Designation Signature
1. 1. 2. 2. 3. 3. 4. 4. I/We undertake that the application money against our subscription in the issue as per application form has been remitted from a Bank Account in my / our own name. DETAILS FOR ISSUE OF BONDS IN ELECTRONIC/DEMATERIALISED FORM APPLICANT’S SIGNATURE(S) Depository Name (please tick) †NSDL †CDSL Sole/First Applicant Depository Participant Name DP-ID Number Client-ID Second Applicant
Beneficiary Account Number Name of the Applicant Third Applicant ------*------*------*------*------*------*------*------(TearHere)------*------*------*------*------*------* ------*------ACKNOWLEDGEMENT SLIP ANDHRA BANK (To be filled in by the Applicant) All future communication in connection with this application should be Received from ______Address______addressed to the Registrars: M/s. MCS Ltd., Unit: Andhra Bank, Kashiram ______Jamnadas Building, Office No.21/22, Ground Floor, 5, P.D’ Mello Road (Ghadiyal Godi), Mumbai-400 009. Tel No. (022-23726253 to 55 Fax No.022- an application for ______Bonds vide UTR No. ______credited at 23726256;E-mail id: [email protected]; quoting full name of Sole/First Applicant, Application No., Number of Bonds applied for, Date, Bank and ______Dated ______amounting to Branch where the application was submitted. Rs. ______
INSTRUCTIONS
1. Application forms must be completed in full in BLOCK LETTERS IN ENGLISH. A blank space must be left between two or more parts of the name.
A B C D E L T D
Signatures should be made in English or in any of the Indian languages. Thumb impressions must be attested by an authorised official of a Bank or by a Magistrate/Notary Public under his/her official seal.
2. Application forms duly completed in all respects must be submitted with the Bank.
3. The remittance of application money should be made by electronic transfer of funds through RTGS mechanism for credits as per details given hereunder:
Name of the Banker Andhra Bank Account Name Andhra Bank – Infra Bond Application Money A/c Credit into Current A/c No. 117911100001370 IFSC Code ANDB0001179 Address of the Branch Andhra Bank, Pattabhi Bhavan Branch Saifabad, Hyderabad – 500 004 Narration Application Money for the Bond Issue
4. Cheques, Demand Drafts, Cash, Money Orders, Postal Orders shall not be accepted.
5. As a matter of precaution against possible fraudulent encashment of interest warrants due to loss/misplacement, applicants are requested to mention the full particulars to their bank account, as specified in the Application Form. Interest warrants will then be made out in favour of the bank for credit to the applicant’s account.
6. Receipt of applications shall be acknowledged by the Bank in the “Acknowledgment Slip”, appearing below the Application Form. No separate receipt will be issued.
7. All applicants should mention their Permanent Account Number or the GIR number allotted under Income-Tax Act,1961 and the Income-Tax Circle/ Ward/ District and enclose a copy of the same.
8. The application would be accepted as per the terms of the Scheme outlined in the Disclosure Document for Private Placement dated 11.08.2014.
9. Documents to be provided by applicants: Applicants need to submit the following documentation, along with the application form, as applicable: Memorandum and Articles of Association / Constitutional Documents / Bye-Laws / Trust Deed; Board Resolution authorising the investment and containing operating instructions; Power of Attorney / relevant resolution/ authority to make application; Specimen signatures of the authorised signatories (ink signed), duly certified by an appropriate authority; Government Notification (in case of Primary Cooperative Bank and RRBs); Copy of Permanent Account Number Card (PAN Card) issued by the Income Tax Department; Copy of a cancelled cheque for ECS payments; Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable.