1343128285425.Pdf

TABLE OF CONTENTS <ul style="display: flex;"><li style="flex:1">SECTION I - GENERAL </li><li style="flex:1">1</li></ul>DEFINITIONS AND ABBREVIATIONS............................................................................................................1 OVERSEAS SHAREHOLDERS ..........................................................................................................................6 CURRENCY OF PRESENTATION AND FINANCIAL DATA........................................................................7 FORWARD-LOOKING STATEMENTS.............................................................................................................8 SECTION II - RISK FACTORS SECTION III - INTRODUCTION 9 29 THE ISSUE ..........................................................................................................................................................29 SELECTED FINANCIAL INFORMATION......................................................................................................30 GENERAL INFORMATION..............................................................................................................................33 CAPITAL STRUCTURE.....................................................................................................................................36 OBJECTS OF THE ISSUE..................................................................................................................................41 STATEMENT OF TAX BENEFITS...................................................................................................................43 SECTION IV – ABOUT THE ISSUER OUR MANAGEMENT .......................................................................................................................................50 SECTION V – FINANCIAL INFORMATION 55 50 FINANCIAL STATEMENTS.............................................................................................................................55 STOCK MARKET DATA FOR THE EQUITY SHARES OF THE BANK ....................................................82 FINANCIAL INDEBTEDNESS .........................................................................................................................84 <ul style="display: flex;"><li style="flex:1">SECTION VI – LEGAL AND OTHER INFORMATION </li><li style="flex:1">86 </li></ul>OUTSTANDING LITIGATIONS AND DEFAULTS .......................................................................................86 GOVERNMENT AND OTHER APPROVALS.................................................................................................91 MATERIAL DEVELOPMENTS ........................................................................................................................92 OTHER REGULATORY AND STATUTORY DISCLOSURES.....................................................................93 SECTION VII - OFFERING INFORMATION TERMS OF THE ISSUE ...................................................................................................................................100 SECTION VIII – STATUTORY AND OTHER INFORMATION 130 DECLARATION................................................................................................................................................132 100 SECTION I - GENERAL DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Draft Letter of Offer. Issuer and Industry Related Terms <ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul>Articles/ Articles of Association/ The articles of association of our Bank, as amended from time to time. AoA <ul style="display: flex;"><li style="flex:1">Auditors </li><li style="flex:1">The statutory auditors of our Bank, being M/s Jagannathan & Sarabeswaran, </li></ul>Chartered Accountants. Board/ Board of Directors/ our Board of directors of our Bank or a duly constituted committee thereof, as the context Board may refer to. “CUB” or “our Bank” or “Bank” City Union Bank Limited. or “we” or “us” or “our” Directors/ our Directors Equity Shares Eligible Equity Shareholders CUB ESOS Scheme Directors of our Bank. The equity shares of our Bank of face value ` 1 each. The holders of Equity Shares, as on the Record Date i.e. [●]. Employee stock option scheme of our Bank as approved by our shareholders at the extraordinary general meeting dated April 26, 2008. Memorandum/ Memorandum of The memorandum of association of our Bank, as amended from time to time. Association Registered and Corporate Office The registered and corporate office of our Bank situated at No.149, TSR Big Street, Kumbakonam 612 001, Tamil Nadu. Issue Related Terms and Abbreviations <ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul><ul style="display: flex;"><li style="flex:1">Abridged Letter of Offer </li><li style="flex:1">The abridged letter of offer to be sent to the Eligible Equity Shareholders and made </li></ul>available to Eligible Employees, in accordance with the SEBI Regulations. <ul style="display: flex;"><li style="flex:1">“Allot” </li><li style="flex:1">or </li><li style="flex:1">“Allotment” The allotment of Equity Shares pursuant to the Issue. </li></ul>“Allotted” Allotment Date Application The date on which Allotment is made. Application made during the Issue Opening Date and the Issue Closing Date, whether submitted by way of CAF or in the form of a plain-paper, in case of Eligible Equity Shareholders, or an EAF, in case of Eligible Employees, to subscribe to the Equity Shares issued pursuant to the Issue at the Issue Price including applications by way of the ASBA process. Application Form Application Money The CAF and EAF. The amount payable in respect of the Equity Shares applied for in this Issue at the time of Application pursuant to the Payment Method, being ` [●] per Equity Share, i.e. [●]% of the Issue Price. “ASBA” Supported Amount” <ul style="display: flex;"><li style="flex:1">or </li><li style="flex:1">“Application Application supported by blocked amount i.e., an Application (whether physical or </li></ul>Blocked electronic) for Equity Shares in the Issue, together with an authorization to an SCSB to block the Application Money in the ASBA Account. by <ul style="display: flex;"><li style="flex:1">ASBA Account </li><li style="flex:1">Account maintained by an ASBA Investor with an SCSB which will be blocked by </li></ul>such SCSB to the extent of the Application Money, as specified in the CAF or the plain paper application, in case of Eligible Equity Shareholders, or the EAF, in case of Eligible Employees. <ul style="display: flex;"><li style="flex:1">ASBA Investor </li><li style="flex:1">(i) An Eligible Employee who intends to apply in the Employee Reservation Portion </li></ul>through ASBA; and (ii) an Eligible Equity Shareholder who intends to apply in the Issue through ASBA and: (a) holds the Equity Shares in dematerialized form as on the Record Date and has applied for his Rights Entitlement and/ or additional Equity Shares in dematerialized form; (b) has not renounced his/ her Rights Entitlement in full or in part; (c) is not a Renouncee; and (d) is applying through the ASBA Account. <ul style="display: flex;"><li style="flex:1">Bankers to the Issue </li><li style="flex:1">[●]. </li></ul>1Term or Application Form” Call Description “Composite The application form used by Investors (excluding Eligible Employees) to make an application for Allotment under the Net Issue portion. “CAF” Call notice sent by our Bank to each of the holders of the partly paid-up Equity Shares as on the Call Record Date, for making a payment of Call Money. Aggregate amount payable in respect of the Equity Shares applied for in this Issue at the time of the Call pursuant to the Payment Method, being ` [●], i.e. [●]% of the Issue Price. Call Money <ul style="display: flex;"><li style="flex:1">Call Record Date </li><li style="flex:1">The date fixed by our Bank for the purpose of determining the names of the holders of </li></ul>partly paid-up Equity Shares for the purpose of issuing of the Call. Controlling Branches Designated Branches The branches of the SCSBs which coordinate with the Registrar to the Issue and the <a href="/goto?url=http://www.sebi.gov.in" target="_blank">Stock Exchanges and a list of which is available at http://www.sebi.gov.in. </a>Such branches of the SCSBs which shall collect the CAF or the plain paper application, in case of Eligible Equity Shareholders, or the EAF, in case of Eligible Employees, <a href="/goto?url=http://www.sebi.gov.in" target="_blank">from the ASBA Investors and a list of which is available on http://www.sebi.gov.in. </a>A depository registered with the SEBI under the Depository Regulations. [●]. Depository Designated Stock Exchange <ul style="display: flex;"><li style="flex:1">Draft Letter of Offer </li><li style="flex:1">This draft letter of offer dated July 17, 2012 filed with SEBI and issued by our Bank in </li></ul>accordance with the SEBI Regulations. “Employee Application Form” The application form used by Eligible Employees to make an application for Allotment <ul style="display: flex;"><li style="flex:1">or “EAF” </li><li style="flex:1">under the Employee Reservation Portion. </li></ul><ul style="display: flex;"><li style="flex:1">Eligible Employee </li><li style="flex:1">A permanent and full-time employee of our Bank including a Director of our Bank, </li></ul>whether whole-time or part-time, as on the Record Date, who is an Indian national and is based, working and present in India as on the date of submission of the EAF and who continues to be in such employment till the finalisation of the basis of Allotment in consultation with the Designated Stock Exchange, but excludes persons not eligible under applicable laws, rules, regulations and guidelines. <ul style="display: flex;"><li style="flex:1">Employee Reservation Portion </li><li style="flex:1">Reservation of up to [●] Equity Shares (not exceeding 5% of the post-Issue capital of </li></ul>the Bank) for the Eligible Employees aggregating up to ` 50 crores. Eligible Equity Shareholders, Renouncee(s) and Eligible Employees applying in the Issue. Issue of [●] Equity Shares at Issue Price aggregating up to ` 250 crores to the Eligible Equity Shareholders and Eligible Employees. Investor(s) Issue The Issue comprises of issue of [●] Equity Shares to the Eligible Equity Shareholders in accordance with the Rights Entitlement aggregating up to ` 200 crores and a reservation of up to [●] Equity Shares (not exceeding 5% of the post-Issue capital of the Bank) for the Eligible Employees aggregating up to ` 50 crores. <ul style="display: flex;"><li style="flex:1">[●]. </li><li style="flex:1">Issue Closing Date </li></ul>Issue Opening Date Issue Price [●]. ` [●] per Equity Share. Issue Proceeds Lead Manager Letter of Offer The proceeds raised through the Issue estimated to be ` 250 crores. Edelweiss Financial Services Limited. The letter of offer to be filed with the Stock Exchanges after incorporating the observations received from SEBI on the Draft Letter of Offer. The agreement entered into between us and the Stock Exchanges. The Issue less the Employee Reservation Portion. Listing Agreement Net Issue <ul style="display: flex;"><li style="flex:1">Non-Institutional Investors </li><li style="flex:1">All Investors including sub-accounts of FIIs registered with SEBI, which are foreign </li></ul>corporate or foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Equity Shares for an amount of more than ` 2,00,000. Payment method in respect of the Equity Shares issued pursuant to the Issue, under which the amount payable on Application is ` [●] per Equity Share, and the balance amount of the Issue Price is payable on Call. Payment Method QIBs/ Qualified Institutional Public financial institutions as defined in Section 4A of the Companies Act, FIIs and <ul style="display: flex;"><li style="flex:1">Buyers </li><li style="flex:1">Sub-Accounts (other than Sub-Accounts which are foreign corporates or foreign </li></ul>individuals), VCFs, AIFs, FVCIs, Mutual Funds, multilateral and bilateral financial institutions, scheduled commercial banks, state industrial development corporations, insurance companies registered with the IRDA, provident funds and pension funds with a minimum corpus of ` 25 crores, the National Investment Fund and insurance funds set up and managed by army, navy or air force of the Union of India and insurance funds set up and managed by Department of Posts, India. QFIs/ Investors <ul style="display: flex;"><li style="flex:1">Qualified </li><li style="flex:1">Foreign Non-resident Investors, other than SEBI registered FIIs or sub-accounts or SEBI </li></ul>registered FVCIs, who meet the KYC requirements prescribed by SEBI and are from such jurisdictions outside India (i) which are compliant with Financial Action Task Force (“FATF”) standards and are signatories to the International Organisation of 2<ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul>Securities Commission’s (“IOSCOs”) Multilateral Memorandum of Understanding; (ii) who have opened demat accounts with SEBI registered qualified depositary participants and (iii) where it is not unlawful to make an offer or invitation under the Issue. For further details on QFIs, please refer to SEBI circular number CIR/ IMD/ FII&C/ 13/ 2012 dated June 7, 2012. Record Date Refund Banker(s) [●]. [●]. Registrar/ Registrar to the Issue Karvy Computershare Private Limited. <ul style="display: flex;"><li style="flex:1">Renouncees </li><li style="flex:1">Persons, other than ASBA Investors, who have acquired Rights Entitlements from </li></ul>Eligible Equity Shareholders. Retail Individual Investors Rights Entitlement Investors who have applied for Equity Shares for an amount less than or equal to ` 200,000. [●] Equity Shares that an Eligible Equity Shareholder is entitled to under the Issue for every [●] fully paid up Equity Share(s) held as on the Record Date. Self Certified Syndicate Bank The banks which are registered with SEBI under the Securities and Exchange Board of <ul style="display: flex;"><li style="flex:1">or SCSB </li><li style="flex:1">India (Bankers to an Issue) Regulations, 1994, as amended, and offers services of </li></ul>ASBA, including blocking of bank account and a list of which is available on <a href="/goto?url=http://www.sebi.gov.in" target="_blank">http://www.sebi.gov.in. </a> Split Application Form(s) Stock Exchanges The application form(s) used in case of, (a) renunciation in part by an Eligible Equity Shareholder in favour of one or more Renouncees; or (b) renunciation by an Eligible Equity Shareholder in favour of two or more Renouncees. BSE, NSE and MSE where the Equity Shares are presently listed. Conventional/ General Terms and References to other Entities <ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul><ul style="display: flex;"><li style="flex:1">AIF </li><li style="flex:1">Any fund established or incorporated in India registered with SEBI under the AIF </li></ul>Regulations. <ul style="display: flex;"><li style="flex:1">AIF Regulations </li><li style="flex:1">Securities and Exchange Board of India (Alternative Investment Funds) Regulations, </li></ul>2012. Act/ Companies Act ATM The Companies Act, 1956, as amended from time to time. Automated teller machine. Banking Regulation Act CERA The Banking Regulation Act, 1949, as amended Central Excise Revenue Audit Depositories Act Depository Regulations The Depositories Act, 1996, as amended from time to time. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, as amended from time to time. <ul style="display: flex;"><li style="flex:1">Edelweiss Financial Services Limited. </li><li style="flex:1">Edelweiss </li></ul><ul style="display: flex;"><li style="flex:1">FEMA Regulations </li><li style="flex:1">The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident </li></ul>Outside India) Regulations, 2000 and amendments thereto. Foreign institutional investors registered under the FII Regulations. Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995. FII FII Regulations Financial Year/ Fiscal/ FY FIPB Period of twelve months ended March 31 of that particular year. Foreign Investment Promotion Board. FVCI FVCI Regulations Foreign venture capital investors registered under the FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000 IT Act IT Department Indian GAAP The Income Tax Act, 1961, as amended from time to time. Income Tax Department. Generally Accepted Accounting Principles in India. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time. International Securities Identification Number. Insider Trading Regulations ISIN Merchant Banking Regulations Merchant Banking Rules Mutual Fund Securities and Exchange Board of India (Merchant Banking) Regulations, 1992. Securities and Exchange Board of India (Merchant Banking) Rules, 1992. Mutual fund registered with SEBI under the Mutual Fund Regulations. The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended from time to time. Mutual Fund Regulations <ul style="display: flex;"><li style="flex:1">NRE Account </li><li style="flex:1">Non Resident External Account. </li></ul><ul style="display: flex;"><li style="flex:1">NRO Account </li><li style="flex:1">Non Resident Ordinary Account. </li></ul><ul style="display: flex;"><li style="flex:1">“Non Resident” or “NR” </li><li style="flex:1">Non-resident or person(s) resident outside India, as defined under the FEMA, including </li></ul>FIIs and FVCIs. 3<ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul>“Non Resident Indian” or “NRI” Non Resident Indian, is a person resident outside India, as defined under FEMA and the FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. “Overseas Corporate Body” or A company, partnership, society or other corporate body owned directly or indirectly to <ul style="display: flex;"><li style="flex:1">“OCB” </li><li style="flex:1">the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% </li></ul>of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under the FEMA Regulations and which was in existence on October 3, 2003 and immediately before such date had taken benefits under the general permission granted to OCBs under the FEMA. P/E Ratio RBI Act Price/ Earnings Ratio. The Reserve Bank of India Act, 1934, as amended from time to time. “Re.” or “Rs.” or “INR” or Indian Rupees, the lawful currency of India. “Rupees” or “`” <ul style="display: flex;"><li style="flex:1">SARFAESI Act </li><li style="flex:1">The Securitisation and Reconstruction of Financial Assets and Enforcement of Security </li></ul>Interest Act, 2002, as amended. SEBI Act SEBI ESOP Guidelines The Securities and Exchange Board of India Act 1992, as amended from time to time. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. SEBI Regulations Securities Act Takeover Code The United States Securities Act of 1933, as amended. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended from time to time. United States of America, including the territories or possessions thereof. Venture capital funds registered with SEBI under the VCF Regulations. The Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996, as amended from time to time. U.S./ USA/ United States Venture Capital Funds/ VCF VCF Regulations Abbreviations <ul style="display: flex;"><li style="flex:1">Term </li><li style="flex:1">Description </li></ul><ul style="display: flex;"><li style="flex:1">Annual Financial Inspection. </li><li style="flex:1">AFI </li></ul>AFS AGM AIF Available for sale. Annual general meeting. Alternative Investment Fund registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as amended. <ul style="display: flex;"><li style="flex:1">Asset Liability Management Committee. </li><li style="flex:1">ALCO </li></ul><ul style="display: flex;"><li style="flex:1">AS </li><li style="flex:1">Accounting Standards. </li></ul><ul style="display: flex;"><li style="flex:1">AY </li><li style="flex:1">Assessment Year. </li></ul>Basel I Basel II Basel III Recommendations of the Basel Committee on Banking Supervision dated July 1988 Recommendations of the Basel Committee on Banking Supervision dated June 2004 Recommendations of the Basel Committee on Banking Supervision dated September 2010 <ul style="display: flex;"><li style="flex:1">BSE </li><li style="flex:1">BSE Limited. </li></ul>CAIIB CAGR CDSL CEO Certified Association of Indian Institute of Bankers. Compounded Annual Growth Rate. Central Depository Services (India) Limited. Chief Executive Officer. CRAR CRR Capital-to-Risk Asset Ratio. Cash Reserve Ratio. DEA DIPP DP Department of Economic Affairs, Ministry of Finance, GoI. Department of Industrial Policy and Promotion, Ministry of Commerce, GoI. Depository Participant. DP ID DRI Depository Participant’s Identity. Differential rate of interest. <ul style="display: flex;"><li style="flex:1">ECS </li><li style="flex:1">Electronic Clearing Service. </li></ul>EGM FDI Extraordinary general meeting. Foreign Direct Investment. <ul style="display: flex;"><li style="flex:1">FDI Policy </li><li style="flex:1">Foreign Direct Investment policy, as laid down in the Consolidated FDI Policy, </li></ul>effective from April 10, 2012, issued by DIPP, Ministry of Commerce, GoI. The Foreign Exchange Management Act, 1999 read with rules and regulations promulgated thereunder and any amendments thereto. Generally Accepted Accounting Principles. FEMA GAAP

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