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) ANDHRA BANK (A Government of India Undertaking) Head Office: Dr. Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad - 500004 Tel.: (040)2323001 Extn: 2371; 2388 Fax. (040) 23230883. Website: www.andhrabank.in / E-mail: [email protected]DRAFT DOCUMENT FOR PRIVATE PLACEMENT OF UNSECURED REDEEMABLE NON CONVERTIBLE (UPPER TIER II) BONDS IN THE NATURE OF PROMISSORY NOTES OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 200.00 CRORE TO BE ISSUED BY ANDHRA BANK. 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 – 400 001 MUMBAI – 400 009. TEL: (022) 66314499 Tel No. (022) 23726252 - 56. FAX: (022)66311776 Fax No. (022) 23726255. 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.
Transcript
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)
ANDHRA BANK (A Government of India Undertaking) Head Office: Dr. Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad - 500004 Tel.: (040)2323001 Extn: 2371; 2388 Fax. (040) 23230883. Website: www.andhrabank.in / E-mail: [email protected] DRAFT DOCUMENT FOR PRIVATE PLACEMENT OF UNSECURED REDEEMABLE NON CONVERTIBLE (UPPER TIER II) BONDS IN THE NATURE OF PROMISSORY NOTES OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 200.00 CRORE TO BE ISSUED BY ANDHRA BANK. 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 – 400 001 MUMBAI – 400 009. TEL: (022) 66314499 Tel No. (022) 23726252 - 56. FAX: (022)66311776 Fax No. (022) 23726255. LEAD ARRANGERS TO THE ISSUE
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
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
VII. SUMMARY TERM SHEET
VIII.
TERMS OF OFFER (DETAILS OF 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, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)
IX. CREDIT RATING & RATIONALE THEREOF
X. NAME OF DEBENTURE TRUSTEE
XI. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED
XII.
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)
XIII. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS
XIV. UNDERTAKING REGARDING COMMON FORM OF TRANSFER
XV. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE
XVI. PERMISSION / CONSENT FROM PRIOR CREDITORS
XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER
XVIII. DECLARATION
XIX. ANNEXURES
A. CREDIT RATING LETTER FROM M/S. CRISIL & M/S. BRICKWORK RATIGNS INDIA PVT LTD
B. RATING RATIONALE FROM M/S. CRISIL & M/S. BRICKWORK RATIGNS INDIA PVT LTD
C. CREDIT RATING LETTER FROM M/S. CRISIL & M/S. BRICKWORK RATIGNS INDIA PVT LTD
D. RATING RATIONALE FROM
E. CONSENT LETTER FROM IDBI TRUSTEESHIP SERVICES LTD.
The Board of Directors of ANDHRA BANK or Committee thereof
Bonds Unsecured Non-Cumulative Subordinated Upper Tier II Bonds in the nature of Promissory Notes of Rs. 10,00,000/- each offered through private placement route under the terms of this Disclosure Document
Book Closure/ Record Date
The date of closure of register of Bonds for payment of interest and repayment of principal
Brickwork Brickwork Ratings India Pvt Ltd 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 assets of the Issuer or not, but excludes security receipts and securitized debt instruments
Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time
Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act Designated Stock Exchange
National Stock Exchange of India Ltd.
DICGC Deposit Insurance and Credit Guarantee Corporation of India Director(s) Director(s) of ANDHRA BANK 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 Financial Year/ 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 Disclosure Document Disclosure Document dated December 24, 2008 for Private Placement of Unsecured Non-
Cumulative Subordinated Upper Tier II Bonds in the nature of Promissory Notes of Rs. 10,00,000/- each for cash at par aggregating to Rs. 200.00 crore to be issued by ANDHRA BANK
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,
2002 SEBI The Securities 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 Companies Act, 1956 as amended from time to time The Act Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 The Issue/ The Offer/ Private Placement
Private Placement of Unsecured Non-Cumulative Subordinated Upper Tier II Bonds in the nature of Promissory Notes of Rs. 10,00,000/- each for cash at par aggregating to Rs. 200.00 crore to be issued by ANDHRA BANK
II. DISCLAIMER GENERAL DISCLAIMER 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 dated June 06, 2008. This document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds to be issued by ANDHRA BANK (the “Issuer”/ the “Bank”/ the “Issuer Bank”). The document is for the exclusive use of the Institutions to whom it is delivered and it should not be circulated or distributed to third party (ies). The Bank certifies that the disclosures made in this document are generally adequate and are in conformity with the captioned SEBI Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this 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 document. The issue of Bonds being made on private placement basis, filing of this document is not required with SEBI; however SEBI reserves the right to take up at any point of time, with the Bank, any irregularities or lapses in this document. DISCLAIMER OF THE LEAD ARRANGER It is advised that the Bank has exercised self due-diligence to ensure complete compliance of prescribed disclosure norms in this Disclosure Document. The role of the Lead Arrangers in the assignment is confined to marketing and placement of the bonds on the basis of this Disclosure Document as prepared by the Bank. The Lead Arrangers have neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this Disclosure Document. The Lead Arrangers shall use this document for the purpose of soliciting subscription from qualified institutional investors in the bonds to be issued by the Bank on private placement basis It is to be distinctly understood that the aforesaid use of this document by the Lead Arrangers should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Lead Arrangers; nor do they in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Bank. The Lead Arrangers or any of its directors, employees, affiliates or representatives do 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 document. DISCLAIMER OF THE ISSUER The Issuer confirms that the information contained in this Disclosure Document is true and correct in all material respects and is not misleading in any material respect. All information considered adequate and relevant about the Issue and the Bank has been made available in this Disclosure Document for the use and perusal of the potential investors and no selective or additional information would be available for a section of investors in any manner whatsoever. The Bank accepts no responsibility for statements made otherwise than in this Disclosure Document or any other material issued by or at the instance of the Issuer Bank and anyone placing reliance on any other source of information would be doing so at his/her/their own risk. DISCLAIMER OF THE STOCK EXCHANGE As required, a copy of this Disclosure Document has been submitted to the National Stock Exchange of India Ltd. (hereinafter referred to as “NSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the document with NSE or hosting the same on its website should not in any way be deemed or construed that the document has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this 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 Bank. 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 : Head Office: Dr. Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad - 500004
Tel.: (040)2323001 Extn: 2371; 2388 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:
S No Name Designation Address 01 Shri R.S. Reddy Chairman &
Managing Director Shri R.S. Reddy Chairman & Managing Director Andhra Bank:: Head Office HYDERABAD- 500 004
02 Shri Anil Girotra Executive Director Shri Anil Girotra Executive Director Andhra Bank :: Head Office HYDERABAD- 500 004
03 Smt Madhulika P Sukul Govt. of India Nominee Director
Shri Madhusudan Prasad Director :: Andhra Bank Joint Secretary, Ministry of Finance Department of Economic Affairs North Block NEW DELHI – 110 001
04 Shri B. Maheshwaran RBI Nominee Director Shri B. Maheshwaran Director :: Andhra Bank 6F, Front Block, Saisubodaya Apartments 57/2B, East Coast Road Thiruvanmiyur CHENNAI – 600 041
05 Shri V.H. Ramakrishnan Director Shri V H Ramakrishnan Director :: Andhra Bank Flat No.1005, Block 2 A SMR VINAY CITY Bollaram Road, MIYAPUR HYDERABAD – 500 049
06 Shri Prem Prakash Pareek Director Shri Prem Prakash Pareek Director :: Andhra Bank ‘Gokul’ E-157 Ramesh Marg, C-Scheme JAIPUR – 302 001
08 Shri K. Ramakoteswara Rao Director Shri K. Ramakoteswara Rao
Director :: Andhra Bank Flat No.503, Ashoka Amber Residency Vidyanagar, Hyderabad – 500 044
09 Shri Anup Prakash Garg Director Shri Anup Prakash Garg Director, Andhra Bank Vastu Bhavan (First Floor), 71, Dhar Kothi (Opp. To Progressive School) INDORE – 452 001 (M.P.)
10 Shri T. Ravindranath Director Shri T. Ravindranath Director :: Andhra Bank Services Department Head Office Dr. Pattabhi Bhavan Saifabad Hyderabad – 500 004
11 Shri Shaibal Gupta Director Shri Shaibal Gupta Director :: Andhra Bank Asian Development Research Institute BSIDC Colony Off Boring – Pataliputra Road PATNA – 800 013
12 Shri Rajib Sekhar Sahoo Director Shri Rajib Sekhar Sahoo Director :: Andhra Bank A/42, Nilakantha Nagar Nayapalli BHUBANESWAR – 751 012
V. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS
HIGHLIGHTS OF THE BANK • Total business of Andhra Bank (“the Bank”) increased by 20.5% to Rs.83,993 crore as on 31.3.2008 from
Rs.69,687 crore as on 31.03.2007. • Total deposits increased by 19.3% to Rs.49,437 crore from Rs. 41,454 crore • Low-cost deposits (CASA) increased by 15.9% to Rs.16,594 crore from Rs.14,314 crore. CASA share in total
deposits stood at 33.6% • Gross bank credit increased by 22.4% to Rs.34,557 crore from Rs.28,233 crore • Credit-deposit ratio improved to 70.1% from 68.3% • Priority sector advances increased by 16.4% to Rs.13,298 crore from Rs.11,427 crore. Priority sector
advances constituted 47.1% of adjusted net bank credit (RBI norm: 40%), up from 41.1% in the previous year.
• Agriculture advances (under priority sector) increased by 19.5% to Rs.6,156 crore from Rs.5,150 crore.
Agriculture advances constituted 21.8% of adjusted net bank credit (RBI norm: 18%), up from 18.5%. All productive sectors including agriculture, in tune with the government’s objective, received priority in credit allocation.
• Advances to micro, small and medium enterprises increased by 22.7% to Rs.3,989 crore from Rs. 3,250
crore • The Bank extended finance to 1,48,288 Self-help Groups (SHGs) and the outstanding credit to such groups
as on 31.03.2008 was Rs.1,005 crore • A drive for financial inclusion was initiated by the Bank in the districts of Srikakulam (A.P.) and Ganjam
(Orissa) and 100% financial inclusion was achieved in both the districts. As a related measure, number of mobile ATMs increased to 4 and biometric ATMs increased to 3.
• Lending to retail sector, housing and education remained the focus areas. Retail lending increased by 17.2%
to Rs.7,765 crore as on 31.03.2008 from Rs.6,623 crore as on 31.03.2007. • Loans to housing sector increased by 18.6% to Rs.4,720 crore from Rs.3,980 crore • Educational loan portfolio increased by 29.1% to Rs.1,167 crore from Rs.905 crore • On profitability front, Bank’s Operating Profit increased by 13.5% to Rs.1,057 crore for the financial year
ended March 31, 2008 from Rs.931 crore in the previous financial year. • Net Profit also improved by 7% to Rs.576 crore from Rs.538 crore • Total Income increased by 29.5% to Rs.4,871 crore from Rs.3762 crore, of which non-interest income
increased by 30.1% to Rs.581 crore from Rs.447 crore • Higher income and efficient cost-management helped in bringing down cost-to-income ratio to 47.2% from
50.1% • Return on assets (ROA) stood at 1.16% compared to 1.31% in the previous year while net interest margin
(NIM) stood at 2.86% compared to 3.20%. Decline in ROA and NIM was a general banking phenomenon during 2007-08 due to increased cost of funds and subdued credit demand
• Net worth of the Bank stood at Rs.3,249 crore and return on average net worth improved to 17.97% from
17.78%. • Earning per share increased to Rs. 11.9 from Rs.11.1 while book value per share increased to Rs.67.0 from
Rs.65.1 • The Bank raised tier II capital of Rs.700 crore during the year and including this, capital adequacy ratio of the
Bank improved to 11.61% from 11.33%
• Continued focus on maintaining a healthy asset quality helped in reducing Gross NPAs (non-performing assets) to 1.07% from 1.41% in the previous year while Net NPAs also came down to 0.15% from 0.17%.
• The Clientele base of the Bank increased to 17.1 million.
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 authorised capital of Rs 10.00 lakhs. It was nationalized on 15th April, 1980 At the time of nationalisation 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.
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 specialised 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. During 2007-08 Bank has linked 148288 groups and provided financial assistance to the extent of Rs.1005.17 crores. BRANCH NETWORK OF THE BANK The corporate office of the Bank is situated at Hyderabad- with 16-zonal offices as on March 31, 2008 scattered in various states controlling the branches. As on March 31, 2008 the Bank has a vast network of 1366-branches and -68-extension counters spread all over India catering to the needs to all section of society irrespective of their social and economic strata. These branches are manned by a dedicated work force of 13387 personnel. Geographical distribution of branches as on March 31, 2008 was as under:
State/ Union Territory Number of Offices % share of Total Network of branches (%) Haryana 11 0.81 Punjab 5 0.37 Rajasthan 4 0.29 Chandigarh 4 0.29
Total deposits of the Bank as on March 31, 2008, stood at Rs. 49437 crore. The same was Rs. 41454 Crore on March 31, 2007 and thus in 2007-08 the growth was Rs. 7983 crores ( 19.26%). The category-wise break-up of total deposits during last 5 years is presented below: (Rs. in crores)
As on March 31, 2004
March 31, 2005
March 31, 2006
March 31, 2007
March 31, 2008
Demand Deposits 2219 2558 3085 3662 4410 Savings Bank Deposits 6348 7401 9232 10652 12184 Term Deposits 14373 17592 21605 27140 32843 Total 22941 27551 33922 41454 49437
The details of Non-Performing Assets of the Bank are furnished in the tables below: (Rs. in crores) As on March 31 2004 2005 2006 2007 2008
Gross NPA at the beginning of the year
580.7 615.37 440.93 436.91 397.01
Addition during the year 294.56 150.24 153.26 243.66 201.52 Reduction during the year 259.89 324.68 157.28 283.56 226.1 Upgradation 20.35 77.3 26.94 50.52 27.48 Cash Recovery 55.58 77.33 47.96 75.45 61.81 Compromise 45.64 54.01 34.38 27.49 24.14 Write-off 138.32 116.04 48 130.1 112.67 Gross NPA at the end of the year 615.37 440.93 436.91 397.01 372.43
Provision 493.3 389 381 343.49 318.03 Interest Suspense 0 0 0 0 0 DICGC & ECGC Balance 2 2.96 3.45 6.27 0.7 Net NPA at the end of the year 120.07 48.97 52.46 47.25 53.7
GROSS INVESTMENTS (Rs. in crores) As on March 31 2004 2005 2006 2007 2008 Gross investments 10345.74 10751.61 11611.76 14582.60 14987.95 SLR Investments 8979.99 8397.63 9369.49 11232.65 13175.40 Permanent Investments 1401.04 5625.23 6399.20 9232.88 10734.27 Current Investments 7578.95 2772.40 2970.29 1908.77 2441.11 Current Investments to SLR Investments (%) 84.40 33.01 31.70 16.99 18.53
Overseas 0.00 0.00 0.00 0.00 0.00 Held Till Maturity (HTM) including exempted category 2580.58 6766.42 7336.89 9989.17 11032.95
Available For Sale 7528.59 3898.95 4035.24 4593.43 3954.96 Held For Trading 236.56 86.23 239.62 0.00 0.00 % of HTM (including exempted category ) to entire portfolio 24.94 62.93 63.18 68.50 73.61
% of HTM (excluding exempted category ) to entire portfolio
24.94 62.93 63.18 68.50 73.61
The break up of net investments (net of depreciation, amortization and NPA provision) for the last five financial years is given as under:
Security Details March 31, 04 March 31, 05 March 31, 06 March 31, 07 March 31, 08 Government Securities 8810.14 8777.55 9749.27 11357.02 13086.90 Other Approved Securities
The yield on investments (%) for the last five financial years is given as under:
As on March 31 2004 2005 2006 2007 2008 Yield including profit on sale of investments (%) 12.73 12.27 8.13 7.79 8.27 Yield excluding profit on sale of investments (%) 8.96 8.24 7.37 7.34 7.32
CAPITAL ADEQUACY POSITION OF THE BANK The Capital Adequacy Ratio (“CAR”) of the Bank as on March 31st, 2008 was 11.61% as against the RBI stipulation of 9.00%. Details of capital vis-à-vis risk weighted assets for last five financial years are given as under: (Rs. in crores) As on March 31, 04 March 31, 05 March 31, 06 March 31, 07 March 31, 08 Capital Funds 1778.58 2291.64 3295.71 3565.41 4221.34 Tier I Capital 1059.33 1519.00 2872.19 3141.43 3105.70
Paid up Equity Capital 400.00 400.00 485.00 485.00 485.00 Less Accumulated loss & DTA 5.00 5.00 21.75 14.85 143.59
Reserves & Surplus 664.33 1124.00 2408.94 2671.28 2764.29 Total Tier I Capital 1059.33 1519.00 2872.19 3141.43 3105.70 Tier II Capital 719.26 772.64 423.52 423.98 1115.64 Revaluation Reserve 0.00 0.00 0.00 0.00 0.00 General Provisions 32.00 46.64 96.52 152.98 187.64 Subordinated Debt 299.00 413.00 327.00 271.00 928.00 Investment Fluctuation
Reserve 388.26 313.00 0.00 0.00 0.00
Total Tier II Capital 719.26 772.64 423.52 423.98 1115.64 Total Capital Fund 1778.58 2291.64 3295.71 3565.41 4221.34 Risk Weighted Assets 12968.57 18926.54 23543.00 31470.50 36354.51 Capital Adequacy Ratio (%) 13.71 12.11 14.00 11.33 11.61
KEY ACCOUNTING RATIOS
For the Year ended as on March 31 2004 2005 2006 2007 2008 Earnings per Share (EPS) (Rs.) 11.59 13.00 11.78 11.09 11.87 Cash Earnings per Share (Rs.) 13.11 14.50 11.35 12.24 13.13 Book Value per Share/ Net Asset value per Share (Rs.) 36.31 45.92 59.67 65.08 67.00 Return on Assets (%) 1.72 1.84 1.38 1.31 1.16 OTHER RATIOS Net NPA to Net Advances Ratio (%) 0.93 0.28 0.24 0.17 0.15 Interest Income/ Working Funds (%) 8.83 8.06 7.60 8.08 8.61 Non-Interest Income/ Working Funds (%) 2.69 2.67 1.30 1.09 1.17 Operating Profit/ Working Funds (%) 3.69 3.52 2.18 2.27 2.12 Net Profit per Employee (Rs. in lacs) 3.54 3.97 3.69 4.14 4.30 Capital Adequacy Ratio (%) 13.71 12.11 14.00 11.33 11.61 Tier I 8.17 8.03 12.20 9.98 8.54 Tier II 5.54 4.08 1.80 1.35 3.07 Credit/ Deposit Ratio (%) 58.55 65.18 66.69 68.28 70.07 Interest Spread/ Average Working Funds (%) 3.62 3.79 3.32 3.46 2.85 Gross Profit/ Average Working Funds (%) 3.70 3.52 2.00 2.27 2.12 Operating Expenses/ Average Working Funds (%) 2.62 2.94 2.44 2.27 1.90 Return on Average Net worth (%) 36.10 31.62 20.52 17.78 17.97 Yield on Advances (%) 10.52 9.43 9.26 9.88 10.81 Yield on Investments (%) 8.92 8.14 7.29 7.34 8.27 Cost of Deposits (%) 5.87 4.86 4.86 5.32 6.58 Cost of Borrowings (%) 6.65 5.47 7.14 6.84 7.60 Business per Branch (Rs. in crore) 32.13 38.86 46.33 53.98 61.40 Business per Employee (Rs. in Crore) 277.35 346.25 426.75 536.06 626.53
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 Share (Rs.)
Networth at year end/ No. of Equity Shares
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
total assets as per Form X)
Business per Employee (Rs. in lacs) (Deposit excl. Inter Bank + Gross Advances)/ No. of Employees
Net Profit per Employee (Rs. in lacs) Net Profit/ No. 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 of monthly total assets as per Form X)
Operating Expenses/ Average Working Funds (%)
Operating Expenses (Non-Interest Expenditure)/ Average Working Funds (Total Average of monthly total assets as per Form X)
Return on Average Net Worth Net Profit/ (Opening Net Worth + Closing Net Worth)/2 Yield on Advances (%) Interest Earned on Advances/ Average Fortnightly Advances Yield on Investments (%) Interest Earned on Investments/ Average Fortnightly
Investments Cost of Deposits (%) Interest Expended (Interest paid on Deposits)/ Average
Fortnightly Deposits Cost of Borrowings (%) Interest on Borrowings/ Average Fortnightly Borrowings Business per Branch (Rs.in crore) (Total Deposit excluding interbank + Total Advances)/ No. of
Branches Business per Employee (Rs. in crore) (Total Deposit excluding interbank + Total Advances)/ No. of
Employees
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
Development at Rajahmundry 1993 First totally computerised branch 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 U.K., 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.
CAPITAL STRUCTURE (as on March 31, 2008) (Rs. in crores)
Particulars Amount 1. SHARE CAPITAL a. Authorised Equity Share Capital 150,00,00,000 Equity Shares of Rs. 10/- each 1500.00 b. Issued Equity Share Capital 48,50,00,000 Equity Shares of Rs. 10/- each 485.00 c. Subscribed & Paid-up Equity Share Capital 48,50,00,000 Equity Shares of Rs. 10/- each 485.00 2. SHARE PREMIUM ACCOUNT 828.18
SHARE CAPITAL HISTORY SINCE NATIONALISATION IN 1980 (Rs. in crores) As on Particulars Increase/ (Decrease)
in Share Capital Cumulative
Paid-Up Capital 15.04.80 Paid-up Capital as on the date of Nationalization -- 1.00 31.12.81 Closing Balance as on date -- 1.00 31.12.82 Closing Balance as on date -- 1.00 31.12.83 Closing Balance as on date -- 1.00 31.12.84 Capitalization of Reserves
Infusion of Capital by the Government of India 1.88 0.12
3.00
31.12.85 Infusion of Capital by the Government of India 9.00 12.00 31.12.86 Infusion of Capital by the Government of India 5.00 17.00 31.12.87 Closing Balance as on date -- 17.00 31.03.89 Infusion of Capital by the Government of India 5.00 22.00 31.03.90 Closing Balance as on date -- 22.00 31.03.91 Closing Balance as on date -- 22.00 31.03.92 Infusion of Capital by the Government of India 40.00 62.00 31.03.93 Infusion of Capital by the Government of India 30.00 92.00 01.01.94 Infusion of Capital by the Government of India 150.00 242.00 01.12.94 Infusion of Capital by the Government of India 108.60 350.60 16.02.95 Infusion of Capital by the Government of India 75.72 426.32 31.03.96 Closing Balance as on date -- 426.32 29.03.97 Infusion of Capital by the Government of India 165.00 591.32 31.03.98 Closing Balance as on date -- 591.32 30.03.99 Write off of Accumulated Losses (243.37) 347.95 31.03.00 Closing Balance as on date -- 347.95 31.01.01 Return of Capital to GOI (47.95) 300.00 24.03.01 Initial Public Offer (IPO) 150.00 450.00 31.03.01 Closing Balance as on date -- 450.00 31.03.02 Closing Balance as on date -- 450.00 27.03.03 Return of Capital to GOI (50.00) 400.00 31.03.03 Closing Balance as on date -- 400.00 31.03.04 Closing Balance as on date -- 400.00 31.03.05 Closing Balance as on date -- 400.00 04.02.06 Follow on Public Offer 85.00 485.00 31.03.06 Closing Balance as on date -- 485.00 31.03.07 Closing Balance as on date -- 485.00 31.03.08 Closing Balance as on date -- 485.00
TOP 10 SHAREHOLDERS (as on March 31, 2008)
Sr. No. Name of Shareholder Number of Shares Held % Shareholding 1. Government of India
25,00,00,000 51.55%
2 Genesis Indian Investment Company Limited – General SUB Fund
26262908 5.42
3 Life Insurance Corporation of India 13479545 2.78 4 LIC of India Money Plus 12965559 2.67
5 LIC of India Market Plus 6872793 1.42 6 JF India Fund 6796490 1.40 7 HSBC Global Investment Funds A/c HSBC Global
Investment Funds Mauritius Limited 6526308 1.34
8 Reliance Capital Trustee Co Ltd-Reliance Long term Equity Fund
5858933 1.21
9 California Public Employees’ Retirement system Managed by Genesis Asset Managers LLP
5456490 1.12
10 Sanford C Bernstein and Co. Delaware business Trust-Emerging Markets value series
4503000 0.93
11 Reliance Capital Trustee Co. Ltd A/c Reliance Banking Fund
4417207 0.91
SHAREHOLDING PATTERN (as on March 31, 2008) Sl. No.
Category No. of Holders No. of Shares % to Shares
01 Government of India 1 250000000 51.55 02 General Public 203929 63859030 13.17 03 NRIs / OCBs 610 408072 0.08 04 Private Corporate Bodies 1733 11120708 2.29 05 Mutual Funds & UTI 26 18426721 3.80 06 Banks / Financial Institutions /
Insurance Cos. 42 43171931 8.91
07 Foreign Institutional Investors 64 93794635 19.34 08 Others 1945 4218903 0.86 T O T A L 208350 485000000 100.00
BORROWINGS The borrowings of Bank as on March 31, 2008 stood as (Rs. in crores)
Particulars Amount outstanding
Interest Rate Repayment Date/ Schedule
Demand Deposits from Banks 96.00 0.0% to 0.0% On demand Demand Deposits from Others 4314.00 0.0% to 0.0.% On demand Saving Bank Deposits 12184.00 3.5% to 3.5% On demand Term Deposits from Banks 23.00 ------ On Maturity Term Deposits from Others 32819.00 2.75% to 8.75% On Maturity Borrowings from RBI 0.00 NIL Borrowings from Other Banks 1.20 ------ Borrowings from Other Institutions & Agencies 1.NABARD 2. NHB 3. SIDBI
65.32 40.32 2.23
-------- 107.87
5.5% to 8.5%
7.10% to 13.04% 8% to 12%
5 years to 8 years 5 years to 10 year 4 years to 5 years
Borrowings outside India 481.00 3.74% Less than one year
TOTAL 50026.07 Besides the above, an amount of Rs. 1840.00 crores was outstanding under Unsecured Redeemable Subordinated Bonds as on September 30, 2008, details of which are as under: Issue Series
Deemed Date of Allotment
Tenure (in months)
Credit Rating Coupon Rate (% p.a.)
Date of Redemption
Issue Amount (Rs. in crores)
I * 03.05.1999 87 CARE AA+ 13.60% 03.08.2006 150.00II * 27.05.2000 87 CARE AA+ 11.10% 27.08.2007 65.00III * 01.12.2001 87 CARE AA+ 9.70% 01.03.2009 75.00IV 28.09.2002 87 CARE AA+ 7.75% 28.12.2009 140.00
AA+(ind) by FITCHV 05.01.2005 111 AA+(ind) by FITCH 7.25% 05.04.2014 200.00VI 11.01.2008 124 AA+(ind) by FITCH 9.15% 11.05.2018 700.00VII 10.09.2008 120 AA+(ind) by FITCH
'CARE'AA+' by CARE
11.00% 10.09.2018 600.00
VIII 31.12.2008 Perpetual BWR AA+ by Brickwork
“AA/Stable” by Crisil
9.50% Perpetual 200.00
TOTAL 2130.00* redeemed on due dates. All the above borrowings are unsecured. No directors have given any personal guarantee for collaterally securing the borrowings.
VII. SUMMARY TERM SHEET
Issuer ANDHRA BANK
Issue Size Rs. 200.00 crore
Instrument Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds in the nature of Promissory Notes
Issuance/ Trading In Demat Mode
Credit Rating 'BWR AA+ (High Safety by Brickwork Ratings India Pvt LTd) & ‘AA/Stable’ by CRISIL
Security Unsecured
Face Value Rs.10,00,000/- per Bond
Issue Price At par (Rs.10,00,000/- per Bond)
Redemption Price At par (Rs.10,00,000/- per Bond)
Minimum Subscription 1 Bond and in multiples of 1 Bond thereafter
Tenure 15 years from the deemed date of allotment in case call option is not exercised at the end of 10 years
Put Option None
Call Option The Bank shall have an option for redemption “i.e. Call Option” to redeem the Bonds at par at the end of 10th year and on every interest payment thereafter (exercisable only with RBI approval).
Step Up Option The bond will carry a step up option of 0.50% if the call option is not exercised at the end of the 10th year. The coupon therefore shall go up from 9.30% p.a to 9.80% p.a incase the call option is not exercised
Redemption/ Maturity Bullet Redemption. At par on maturity. The consent of the Reserve Bank of India will be taken before the redemption of bonds on due date or on call option date as required in terms of their guidelines vide their communication DBOD.BP.BC 5/21.01.002/98-99 dated 08.02.1999.
Redemption Date To be decided
Coupon Rate * The bond will bear the Interest rate of 9.30% p.a. till10th year. The rate will be stepped up to 9.80% p.a thereafter, if the call option is not exercised.
Interest Payment Annual (subject to RBI norms)
Interest Payment Date To be decided
Listing Proposed on the Wholesale Debt Market (WDM) Segment of the National Stock Exchange of India Ltd. (NSE)
Trustee IDBI Trusteeship Services Ltd. (ITSL) has been appointed by the Bank to act as Trustees for and on behalf of the holder(s) of the Bonds
Depository National Securities Depository Ltd. and Central Depository Services (India) Ltd.
Registrars MCS Ltd.
Interest on Application Money *
At coupon rate (i.e. @ 9.30% p.a.) from the date of realization of cheque(s)/ demand draft(s)/ RTGS upto one day prior to the Deemed Date of Allotment
Settlement Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through RTGS system
Mode of Subscription Cheque(s)/ demand draft(s) may be drawn in favour of “ANDHRA BANK" and crossed “Account Payee Only” payable at par at designated centers mentioned elsewhere in the Disclosure Document or remittance through RTGS to ANDHRA BANK RTGS Account No. 2150074, IFSC Code ANDB0000241, Branch - Andhra Bank Investments & International Banking, Mumbai
Issue Opens on ^ 20th March 2009
Issue Closes on ^ 23rd March 2009 (with a early close option)
Deemed Date of Allotment ^
25th March 2009
* 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/ pay-in date(s) 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.
VIII. TERMS OF OFFER (DETAILS OF UPPER TIER II 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 UPPER TIER II BONDS IN THE NATURE OF PROMISSORY NOTES OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING TO RS. 200.00 CRORE
Issue Size ANDHRA BANK (the ‘Issuer’ or the “Bank”) proposes to raise upto Rs.200.00 crore through issue of Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds in the nature of Promissory Notes (hereinafter referred to as ”Bonds”) of the face value of Rs. 10,00,000/- each by way of private placement ('the Issue’). Governing Law & Provisions The Bonds offered are subject to provisions of the Companies Act, 1956, Securities Contract Regulation Act, 1956, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, terms of this Disclosure Document, Instructions contained in the Application Form and other terms and conditions as may be incorporated in the Trustee Agreement and Bond Trust Deed. Over and above such terms and conditions, the Bonds shall also be subject to the applicable provisions of the Depositories Act 1996 and the laws as applicable, guidelines, notifications and regulations relating to the allotment & issue of capital and listing of securities issued from time to time by the Government of India (GoI), Reserve Bank of India (RBI), Securities & Exchange Board of India (SEBI), concerned Stock Exchange or any other authorities and other documents that may be executed in respect of the Bonds. Any disputes arising out of this issue will be subject to the exclusive jurisdiction of the district courts of Hyderabad. Authority for the Placement The present private placement of Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds is being made in accordance with extant RBI guidelines vide its circular no. DBOD No. BP.BC. 4/21.01.002/2007-08, dated July 02, 2007 on prudential norms on capital adequacy covering norms for issue of Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds to qualify for inclusion as Tier I capital. The private placement of Bonds under the terms of this Disclosure Document is being made pursuant to the approval given by the Board of Directors of the Bank in their meeting held on 23rd September, 2008 for raising Tier-I Bonds aggregating upto Rs. 200.00 crore. The debt to be raised is within the overall borrowing powers of the Bank. This being a private placement of debt securities, the eligibility norms of SEBI (DIP) Guidelines, 2000 shall not be applicable. Further the Bank, its promoter, its associates and companies with which the directors of the Bank are associated as directors or promoters are not prohibited from accessing the capital market/ debt securities market under any order or directions passed by SEBI. The Bank can undertake the proposed issue of bonds in view of the present approvals and no further approval from any government authority(ies)/ Reserve Bank of India (RBI) is required by the Bank in this connection. Objects of the Issue The proposed issue of Bonds is being made for augmenting Tier I Capital of the Bank for strengthening its Capital Adequacy and for enhancing the long-term resources of the Bank. The expenses of the issue shall be borne by the Bank. RBI has adopted a phased approach to the implementation of the Basel II norms. New capital norms for market risk will be implemented with effect from the year ended March 31, 2009. In order to maintain consistency and harmony with international standards, banks have been advised to adopt the Standardised Approach for credit risk and the Basic Indicator Approach for operational risk with effect from March 31, 2009. The requirements for Tier I capital and total capital adequacy ratios are expected to increase with the proposed implementation of the Basel II standards. With gradual deregulation, banks are now exposed to different types of risks. In view of the dynamic nature of the financial market, banks face various market risks like interest rate risk, liquidity risk, and exchange risk. In respect of lending, they face credit risk which includes default risk and portfolio risk. Banks also face risks like operational risk. In preparation for the adoption of the Basel II accord, banks have already been required by RBI to take active measures in terms of risk management systems, evaluate capital charges including for operational risk and bring about more transparency in financial reporting as part of market discipline. RBI has also moved towards adoption of Risk Based Supervision (RBS) of banks under which the risk profile of the banks will decide their supervisory cycles -a bank with higher risk rating will undergo more frequent supervisory reviews than those with lower risk rating. RBI has also indicated that it will adopt a phased approach to the implementation of the Basel II accord. Implementation of market risk systems and the credit risk and operational risk systems will be completed with effect from March 31, 2009.
RBI is adopting the requirements of Basel II, the international capital adequacy framework for banks. The Bank is in the process of moving towards meeting these guidelines. These requirements will affect the management of the Bank of all three principal categories of risk. In particular, Basel II will introduce minimum capital requirements for market risk and operational risk in addition to the previous requirement of minimum capital only for credit risk. Although the Bank is on schedule to meet the requirements to be implemented and has prepared comprehensive plans, the adoption of these new rules is still an evolving process. Measures have been initiated for switching over to the basic indicator approach for operational risk with effect from March 31, 2009. Capital charge for market risk is computed with effect from March 31, 2005 based on standardised duration method. The Bank expects substantial growth in its business activities and operations in the coming years. The risk-weighted assets of the Bank are expected to increase with rise in business level. The capital requirement will also increase due to Basel II norms. Increase in capital through plough-back of profits alone may not be enough to enable the Bank to maintain sufficient capital adequacy ratio. In this backdrop, the Bank proposes to shore up its capital base through issue of proposed Bonds. Utilization of Issue Proceeds The funds raised through this private placement are not meant for any specific project as such and therefore the proceeds of this Issue shall be utilized for the regular business activities of the Bank. The Bank has to shore up its capital base to match the growth in assets and maintain level of CAR higher than the minimum level prescribed by RBI. The requirement of capital has increased on account of phased convergence to Basel II norms by Reserve Bank of India and growth in credit. The Bank is managed by professionals under the supervision of its Board of Directors. Further, the Bank is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. Therefore, the management shall ensure that the funds raised via this private placement shall be utilized only towards satisfactory fulfillment of the Objects of the Issue. The Bank further confirms that the proceeds of the current issue of Bonds shall not be used 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. 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. Underwriting The present Issue of Bonds on private placement basis has not been underwritten. Nature and Status of Bonds The present private placement of Unsecured Redeemable Non-Convertible Subordinated (Upper Tier-II) Bonds is being made in accordance with extant RBI guidelines vide its circular No. DBOD No. BP.BC. 2/21.01.002/2008-09, dated July 01, 2008 on prudential norms on capital adequacy covering terms and conditions for issue of debt capital Instruments to qualify for inclusion as Upper Tier II Capital.
Face Value, Issue Price, Effective Yield for Investor Each Bond has a face value of Rs. 10,00,000/- and is issued at par i.e. for Rs. 10,00,000/-. 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. Terms of Payment The full face value of the Bonds applied for is to be paid along with the Application Form. Investor(s) need to send in the Application Form and the cheque(s)/ demand draft(s)/ RTGS for the full face value of the Bonds applied for. Face Value per Bond Minimum Application for Amount Payable on Application per Bond Rs. 10,00,000/- 1 Bond and in multiples
of 1 Bond thereafter Rs. 10,00,000/-
Deemed Date of Allotment Interest on Bonds shall accrue to the Bondholder(s) from and including 25th March 2009, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Bank reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date is changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-poned/ postponed) by the Bank at its sole and absolute discretion. Letter(s) of Allotment/ Bond Certificate(s)/ Refund Order(s) Issue of Letter(s) of Allotment
The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL)/ Central Depository Services (India) Ltd. (CDSL)/ Depository Participant will be given initial credit within 15 days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate. Issue of Bond Certificate(s) Subject to the completion of all statutory formalities within 3 months from the Deemed Date of Allotment, or such extended period as may be approved by the appropriate authority(ies), the initial credit akin to a Letter of Allotment in the Beneficiary Account of the investor 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. Depository Arrangements The Bank has appointed “MCS Ltd.” [Address: Sri Venkatesh Bhavan, W-40, Okhla Industrial Area, Phase-II, New Delhi – 110 020; Tel No. (011) 41406149/50/51; Fax No. 91-11-41709881; 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 ANDHRA BANK, MCS Ltd. and National Securities Depository Ltd. for
offering depository option to the investors. • Tripartite Agreement between ANDHRA BANK, MCS Ltd. and Central Depository Services (India) Ltd. for
offering depository option to the investors. Investors can hold the bonds only in dematerialized 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 • The applicant must have at least one beneficiary account with any of the Depository Participants (DPs) of
NSDL or CDSL prior to making the application. • The applicant must necessarily fill in the details (including the beneficiary account number and Depository
Participant’s ID) appearing in the Application Form under the heading ‘Details for Issue of Bonds in Electronic/ Dematerialised Form’.
• Bonds allotted to an applicant will be credited directly to the applicant’s respective Beneficiary Account(s) with the DP.
• For subscribing the bonds, names in the application form should be identical to those appearing in the account details in the depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the depository.
• The Registrars to the Issue will directly send non-transferable allotment advice/refund orders to the applicant.
• If incomplete/ incorrect details are given under the heading ‘Details for Issue of Bonds in Electronic/ Dematerialised Form’ in the application form, it will be deemed to be an incomplete application and the same may be held liable for rejection at the sole discretion of the Bank.
• For allotment of Bonds, the address, nomination details and other details of the applicant as registered with his/her DP shall be used for all correspondence with the applicant. The Applicant is therefore responsible for the correctness of his/her demographic details given in the application form vis-à-vis those with his/her DP. In case the information is incorrect or insufficient, the Issuer would not be liable for losses, if any.
• It may be noted that Bonds being issued in electronic form, the same can be traded only on the Stock Exchanges having electronic connectivity with NSDL or CDSL. National Stock Exchange of India Ltd. where the Bonds of the Bank are proposed to be listed has connectivity with NSDL and CDSL.
• Interest or other benefits would be paid to those Bondholders whose names appear on the list of beneficial owners given by the Depositories to the Bank as on Record Date/ Book Closure Date. In case of those Bonds for which the beneficial owner is not identified by the Depository as on the Record Date/ Book Closure Date, the Bank would keep in abeyance the payment of interest or other benefits, till such time that the beneficial owner is identified by the Depository and conveyed to the Bank, whereupon the interest or benefits will be paid to the beneficiaries, as identified, within a period of 30 days.
Investors may note that pursuant to circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003 issued by SEBI, the Bonds of the Bank would be issued and traded 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 Rs.10 lakhs. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lakhs and such trades shall be cleared and settled in recognized stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be executed and 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 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. 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. 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. Interest on Application Money Interest at the coupon rate (i.e. @ 9.30 per cent per annum) (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, 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 realisation of cheque(s)/ demand draft(s)/ RTGS upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed on an Actual/ Actual day basis. 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. The interest cheque(s)/ demand draft(s) for interest on application money (along with Refund Orders, in case of refund of application money, if any) shall be dispatched by the Bank within 15 days from the Deemed Date of Allotment and the relative interest warrant(s) along with the Refund Order(s), as the case may be, will be dispatched by registered post to the sole/ first applicant, at the sole risk of the applicant. Interest on the Bonds The Bonds shall carry interest at the coupon rate i.e. @ 9.30% p.a. (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof for which a certificate will be issued by the Bank) on the outstanding principal amount of Bonds till the end of 10th year. Interest will be paid annually on 25th March each year. The first interest payment from and including the Deemed Date of Allotment up to but excluding 25th March 2009.shall be made by the Bank on 25th March 2009 Interest on Bonds will cease from the date of final redemption in all events. The second and subsequent interest period (except the last interest period) is defined as the actual number of days in a year as 365 (366 in case of a leap year) between 25th March , and 25th March , including the first date but excluding the last date and so on. If the call is not exercised on 25th March 2019 interest applicable will be 9.80% p.a from 25th March 2019 thereafter including the first date but excluding the last date.
If any interest 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, then payment of interest will be made on the next day that is a business day but without liability for making payment of interest for the intervening period. Computation of Interest Interest for each of the interest periods shall be calculated, on 'actual/ 365 (366 in case of a leap year) days' basis, on the face value of principal outstanding on the Bonds at the coupon rate rounded off to the nearest Rupee.
Record Date The ‘Record Date’ for the Bonds shall be 30 days prior to each interest payment and/ or principal repayment
date (in case of exercise of call option).
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. The investor(s) desirous of claiming exemption from deduction of income tax at source on the interest on application money are required to submit the necessary certificate(s), in duplicate, along with the Application Form in terms of Income Tax rules. Interest payable subsequent to the Deemed Date of Allotment of Bonds will 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, at the Head Office of the Bank, at least 45 days before the payment becoming due. Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s).
Put Option There is no Put Option available to the Bondholder(s).for redeeming the Bonds prior to maturity date. In terms of RBI master circular No. DBOD No. BP.BC. 2/21.01.002/2008-09, dated July 01, 2008 on prudential norms on capital adequacy covering terms and conditions for issue of debt capital Instruments to qualify for inclusion as Upper Tier II Capital, these Bonds shall be fully paid up, unsecured and free of any restrictive clauses.
Call Option The Bank shall have the option of redeeming the Bonds at par, subject to the prior approval of the RBI and in accordance with applicable laws and regulations in effect at the time (relating to, among other things, capital adequacy ratio, replacement capital and interest rate, in whole but not in part, on ……….. 2019 (at the end of 10th year from the Deemed Date of Allotment) at a redemption price equal to the principal amount thereof plus accrued interest.
In case of exercise of Call Option by the Bank, the Bank shall notify its intention to do so through a public notice at least in one All-India English and one regional language daily newspaper in Mumbai, New Delhi, Kolkata and Chennai and/or through notice sent by registered post/ courier to the sole/ first allottee or sole/ first Beneficial Owner of the Bonds at least 30 (thirty) days prior to the due date.
In terms of RBI master circular No. DBOD No. BP.BC. 2/21.01.002/2008-09, dated July 01, 2008 on prudential norms on capital adequacy covering norms for issue of debt capital Instruments to qualify for inclusion as Upper Tier II Capital, Call Option shall be exercised by the Bank only with the prior approval of RBI.
Payment & Settlement Payment on exercise of Call Option will be made by cheque(s)/ warrants(s) in the name of the Bondholder whose name appears on the List of Beneficial owners given by Depository to the Bank as on the Record Date. On the Bank dispatching the redemption warrants to such Beneficiary(ies) by registered post/ courier, the liability of the Bank shall stand extinguished.
The Bonds shall be taken as discharged on payment of the redemption amount by the Bank on exercise of Call Option to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of the liability of the Bank towards the Bondholders. On such payment being made, the Bank will inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant will 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 date of exercise of Call Option in all events. Further the Bank will not be liable to pay any interest or compensation from the date of exercise of Call Option. On the Bank dispatching the amount as specified above in respect of the Bonds, the liability of the Bank shall stand extinguished. Step Up Option We have the option of exercising a step up option of 0.5% p.a that is, increasing the interest rate payable on these Bonds, only during the life of these Bonds and in conjunction with the call option, after the lapse of ten
years from date of the issue of such bonds.
Redemption The Bonds will be redeemed at par on the face value as on 25th March 2024 (at the end of 15 years from the Deemed Date of Allotment). In terms of RBI circular No. DBOD No.BP.BC. 2/21.01.002/2008-09, dated July 01, 2008 on prudential norms on capital adequacy covering norms for issue of debt capital Instruments to qualify for inclusion as Upper Tier II capital, these Bonds are free from any restrictive clauses and shall not be redeemable at the initiative of the holder. Redemption of these Bonds shall be made only with the prior approval of the RBI. Further these Bonds shall be subjected to a lock-in clause in terms of which the Bank shall not be liable to pay principal even at maturity if (i) the Bank’s CRAR is below the minimum regulatory requirement prescribed by RBI, or (ii) the impact of such payment results in Bank’s CRAR falling below or remaining below the minimum regulatory requirement prescribed by RBI. While paying such unpaid principal, Bank shall be allowed to pay compound interest at a rate not exceeding the coupon rate of the relative Bonds, on the outstanding principal.
The Bonds will not carry any obligation for interest or otherwise after the date of redemption. The Bonds held in the dematerialized form shall be taken as discharged on payment of the redemption amount by the Bank on maturity to the registered Bondholders whose name appears in the register of Bondholders on record date. Such payment shall be legal discharge of the liability of the Bank 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.
In case if the principal redemption 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), then the payment due shall be made on the next Business Day together with additional interest for the intervening period. Effect of Holidays Should any of dates defined above or elsewhere in the Disclosure Document, excepting the Deemed Date of Allotment, fall on a Saturday, 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 Beneficial 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 investors may apply for the Bonds, subject to fulfilling their respective investment norms/ rules by submitting all the relevant documents along with the application form.
1. Scheduled Commercial Banks; 2. Financial Institutions; 3. Insurance Companies; 4. Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI); 5. Regional Rural Banks; 6. Mutual Funds; 7. Provident, Gratuity, Superannuation and Pension Funds; 8. Companies, Bodies Corporate authorised to invest in Bonds; 9. Trusts, Individuals, Association of Persons, Societies registered under the applicable laws in India
which are duly authorised to invest in bonds.
Application not to be made by 1. Hindu Undivided Family (neither by the name of the Karta); 2. Partnership Firms or their nominees; 3. Overseas Corporate Bodies (OCBs); 4. Foreign Institutional Investors (FIIs). Although above investors are eligible to apply however only those investors, who are individually addressed through direct communication by the Bank/ Lead Arrangers, are eligible to apply for the Bonds. No other person may apply. Hosting of Disclosure Document on the website of the NSE should not be construed as an offer to issue and the same has been hosted only as it is stipulated by SEBI. Investors should check about their eligibility before making any investment. The applications must be accompanied by certified true copies of (1) Memorandum and Articles of Association/ Constitution/ Bye-laws (2) Resolution authorising investment and containing operating instructions (3) Specimen signatures of authorised signatories and (4) Necessary forms for claiming exemption from deduction of tax at source on the interest income/ interest on application money, wherever applicable.
Application under Power of Attorney or by Limited Companies In case of applications made under a Power of Attorney or by a Limited Company or a Body Corporate or Registered Society or Mutual Fund, and scientific and/or industrial research organizations or Trusts etc, the relevant Power of Attorney or the relevant resolution or authority to make the application, as the case may be, together with the certified true copy thereof along with the certified copy of the Memorandum and Articles of Association and/or Bye-Laws as the case may be must be attached to the Application Form or lodged for scrutiny separately with the photocopy of the Application Form, quoting the serial number of the Application Form and the Bank’s branch where the application has been submitted, at the office of the Registrars to the Issue after submission of the Application Form to the bankers to the issue or any of the designated branches as mentioned on the reverse of the Application Form, failing which the applications are liable to be rejected. Such authority received by the Registrars to the Issue more than 10 days after closure of the subscription list may not be considered.
Mode of Subscription/ How to Apply This being a Private Placement Offer, Investors who are established/ resident in India and who have been addressed through this communication directly only are eligible to apply. All Application Forms, duly completed, together with cheque/ demand draft for the amount payable on application must be delivered before the closing of the issue to the specified branches of ANDHRA BANK, named herein or to the Lead Arrangers to the Issue. Applications should be for a minimum of 1 Bond and in multiples of 1 Bond thereafter. All cheques/ demand drafts should be in favour of “ANDHRA BANK A/C – UPPER TIER II BONDS ISSUE, " and crossed “Account Payee Only”. The entire amount of Rs. 10 lakh (Rs. Ten Lakh only) per Bond is payable on application. Alternatively, investors can remit their application money through RTGS to ANDHRA BANK, RTGS Account. The Details of which are
RTGS A/C No 2150074 RTGS IFSC CODE ANDB0000241 (Please note that the 5th to 8th letters in the above code are ZERO's) BRANCH ANDHRA BANK, INVESTMENTS AND INTERNATIONAL BANKING, MUMBAI
Applications for the Bonds must be in the prescribed form (enclosed) and completed in BLOCK LETTERS in English and as per the instructions contained therein. Applications complete in all respects (along with all necessary documents as detailed in this Disclosure Document) 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 subscription amount 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. Outstation cheque(s)/ Bank draft(s) drawn on Bank(s) not participating in the clearing process at the designated clearing centres will not be accepted. Money orders/ postal orders will also not be accepted. The Bank assumes no responsibility for any applications/ cheques/ demand drafts lost in mail. No separate receipt will be issued for the application money. However, the Bank’s designated collection branches or Arranger(s) receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the Acknowledgment Slip at the bottom of the each Application Form. As a matter of precaution against possible fraudulent encashment of interest warrants/ cheques due to loss/ misplacement, the applicant should furnish the full particulars of his or her bank account (i.e. Account Number, name of the bank and branch) at the appropriate place in the Application Form. Interest warrants will then be made out in favour of the bank for credit to his/ her account so specified and despatched to the investors, who may deposit the same in the said bank.
Right to Accept or Reject Applications The Bank reserves its 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 realisation 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/ dematerialised form not given; PAN/GIR and IT
Circle/Ward/District not given; e. 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, 1961 and the Income Tax Circle/ Ward/ 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 109 A of the Companies Act, 1956, 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 can not nominate.
Bondholder not a Shareholder The bondholders will not be entitled to any of the rights and privileges available to the shareholders. If, however, any resolution affecting the rights attached to the Bonds is placed before the members of the Bank, such resolution will first be placed before the bondholders for their consideration.
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 The Government of India, Ministry of Company Affairs has vide General Circular No. 9/2002 No.6/3/2001-CL.V dated April 18, 2002 clarified that Banks need not create Debenture Redemption Reserve as specified under section 117C of the Companies Act, 1956.
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. Tax Benefits to the Bondholders of the Bank The holder(s) of the Bonds are advised to consider in their own case, the tax implications in respect of subscription to the Bonds after consulting their own tax advisor/ counsel.
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. Compliance Officer Mr. T. R. Ramabhadran Assistant General Manager & Company Secretary ANDHRA BANK Head Office: Dr. Pattabhi Bhavan, 5-9-11 Saifabad, Hyderabad – 500004 Tel.: (040)23252371; 23252388 Fax. (040) 23230883 / 23231634 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
IX. CREDIT RATING & RATIONALE THEREOF BRICKWORK RATINGS INDIA PVT LTD has assigned a ‘BWRAA+’ (pronounced as Double A plus which indicates High Safety) rating for an amount of Rs. 200.00 crore to the present Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds issued by the Bank vide its letter dated 18.11.2008. A copy of rating letter from BRICKWORK RATINGS is enclosed elsewhere in this Information Memorandum.
CRISIL Ltd. has assigned a ‘AA/ Stable’ rating which indicates High Degree of Safety for an amount of Rs. 200.00 crore to the present Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds issued by the Bank vide its letter No. VR/FSR/ANDHRABANK/2008-09/0874 dated 05.11.2008. A copy of rating letter from 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. X. 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 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.
XI. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED The Unsecured Redeemable Non-Convertible (Upper Tier II) Bonds in the nature of Promissory Notes are proposed to be listed on the Wholesale Debt Market (WDM) Segment of the National Stock Exchange of India Ltd. (“NSE”). The Bank has obtained an in-principle approval from the NSE for listing of said Bonds on its Wholesale Debt Market (WDM) Segment. The Bank shall make an application to the NSE to list the Bonds to be issued and allotted under this Disclosure Document and complete all the formalities relating to listing of the Bonds within 70 days from the date of closure of the Issue. If such permission is not granted within 70 days from the date of closure of the Issue or where such permission is refused before the expiry of the 70 days from the closure of the Issue, the Bank shall forthwith repay without interest, all monies received from the applicants in pursuance of the Disclosure Document, and if such money is not repaid within 8 days after the Bank becomes liable to repay it (i.e. from the date of refusal or 70 days from the date of closing of the subscription list, whichever is earlier), then the Bank and every director of the Bank who is an officer in default shall, on and from 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, as prescribed under Section 73 of the Companies Act, 1956. In connection with listing of Bonds with NSE, the Bank hereby undertakes that: (a) It shall comply with conditions of listing of Bonds as may be specified in the Listing Agreement with
NSE. (b) Ratings obtained by the Bank shall be periodically reviewed by the credit rating agencies and any
revision in the rating shall be promptly disclosed by the Bank to NSE. (c) Any change in rating shall be promptly disseminated to the holder(s) of the Bonds in such manner as
NSE may determine from time to time. (d) The Bank, the Trustees and NSE shall disseminate all information and reports on Bonds including
compliance reports filed by the Bank and the Trustees regarding the Bonds to the holder(s) of Bonds and the general public by placing them on their websites.
(e) Trustees shall disclose the information to the holder(s) of the Bonds and the general public by issuing a press release in any of the following events: (i) default by the Bank to pay interest on Bonds or redemption amount; (ii) revision of rating assigned to the Bonds;
(f) The information referred to in para (e) above shall also be placed on the websites of the Trustees, Bank and NSE.
XII. 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)
1. PRIVATE PLACEMENT OF BONDS The Bank has raised Tier II capital by way of private placement of Unsecured Redeemable Non-Convertible Subordinated Tier II Bonds in the nature of Promissory Notes to augment capital adequacy as under:
Issue Series
Deemed Date of Allotment
Amount (Rs. in crores)
Tenure (in months)
Credit Rating Coupon Rate (% p.a.)
Interest Payment
Date of Redemption
I 03.05.1999 150.00 87 CARE AA+ 13.60% Redeemed 03.08.2006 II 27.05.2000 65.00 87 CARE AA+ 11.10% Redeemed 27.08.2007 III 01.12.2001 75.00 87 CARE AA+ 9.70% 1st
December 01.03.2009
IV 28.09.2002 140.00 87 CARE AA+ AA+(ind) by
FITCH
7.75% 29 th September
28.12.2009
V 05.01.2005 200.00 111 AA+(ind) by FITCH
7.25% 5th January
05.04.2014
VI 11.01.2008 700.00 124 AA+(ind) by FITCH
9.15% 11th January
11.05.2018
VII 10.09.2008 600.00 120 AA+(ind) by FITCH &
CARE AA+ by CARE
11.00% 10th September
10.09.2018
VIII 31.12.2008 200.00 Perpetual BWR AA+ by Brickwork
“AA/Stable”
9.50% 31-December
Perpetual
by Crisil TOTAL 2130.00
2. OTHER BORROWINGS (as on March 31, 2008) (Rs in crores) Particulars Amount
outstanding Interest Rate Repayment Date/
Schedule Demand Deposits from Banks 96.00 0.0% to 0.0% On demand Demand Deposits from Others 4314.00 0.0% to 0.0.% On demand Saving Bank Deposits 12184.00 3.5% to 3.5% On demand Term Deposits from Banks 23.00 ------ On Maturity Term Deposits from Others 32819.00 2.75% to 8.75% On Maturity Borrowings from RBI 0.00 NIL Borrowings from Other Banks 1.20 ------ Borrowings from Other Institutions & Agencies 1.NABARD 2. NHB 3. SIDBI
65.32 40.32 2.23
-------- 107.87
5.5% to 8.5%
7.10% to 13.04% 8% to 12%
5 years to 8 years 5 years to 10 year 4 years to 5 years
Borrowings outside India 481.00 3.74% Less than one year
TOTAL 50026.07
3. DEBT EQUITY RATIO Particulars Pre-Issue
(as on September 30, 2008)
Post Issue of Upper Tier II Bonds of Rs. 200.00 crores
Post Issue of Upper Tier II Bonds Rs. 200.00 crores
LOAN FUNDS Subordinated Bonds 1415.00 1615.00 1815.00Other Long Term Borrowings 589.31 589.31 589.31TOTAL 2004.31 2204.31 2404.31 SHAREHOLDERS’ FUNDS Equity Share Capital 485.00 485.00 485.00Reserves & Surplus (excluding Revaluation Reserve)
2764.29 2764.29 2764.29
TOTAL 3249.29 3249.29 3249.29 Long Term Debt/ Equity Ratio 0.62 0.68 0.73
(Rs. in crores)
4. HIGHEST 10 HOLDERS OF EACH CLASS AND KIND OF SECURITIES A. TOP 10 EQUITY SHAREHOLDERS (as on March 31, 2008)
Sr. No. Name of Shareholder Number of Shares Held % Shareholding 1. Government of India 25,00,00,000 51.55 2 Genesis Indian Investment Company Limited –
General SUB Fund 26262908 5.42
3 Life Insurance Corporation of India 13479545 2.78 4 LIC of India Money Plus 12965559 2.67 5 LIC of India Market Plus 6872793 1.42 6 JF India Fund 6796490 1.40 7 HSBC Global Investment Funds A/c HSBC Global
Investment Funds Mauritius Limited 6526308 1.34
8 Reliance Capital Trustee Co Ltd-Reliance Long term Equity Fund
5858933 1.21
9 California Public Employees’ Retirement system Managed by Genesis Asset Managers LLP
5456490 1.12
10 Sanford C Bernstein and Co. Delaware business Trust-Emerging Markets value series
4503000 0.93
11 Reliance Capital Trustee Co. Ltd A/c Reliance Banking Fund
4417207 0.91
B. TOP 10 HOLDERS OF SUBORDINATED TIER II BONDS III Issue (SERIES C) as on 12.12. 2008
Sr. No.
Name of Bondholder Address Number of Bonds Held
% Bondholding
1. Coal Mines Providend Fund
C/o. ICICI Securities Primary Dealership Ltd, ICICI Center, HT Parekh Marg, Church Gate, Mumbai - 400020
2500.00 34.246
2. Saraswat Coop. Bank Ltd Treasury Department, City Ice Bldg, III rd Floor, Perin Nariman Street, Fort, ;Mumbai - 400001
1000.00 13.698
3. Coal Mines Pension Fund State Bank of India Securities Services, Mumbai - 400001
600.00 8.219
4. State Bank of Patiala 7th Floor, SBI, LHO Bldg, Plot C/6, G-Block, Bandra Kurla Complex, Bandra East, Mumbai - 400051
500.00 6.849
5. Allahabad Bank Treasury Branch, Allahabad Bank Bldg III rd floor, 37, Mumbai -400023
500.00 6.849
6. United India Insurance Co. Ltd
24, Whites Road, Chennai - 600014 500.00 6.849
7. State Bank of Hyderabad Shares and Securities Department, Gunfoundry Branch, Hyderabad-001
500.00 6.849
8. The Oriental Insurance Co.Ltd Provident Fund
Oriental House, III rd floor, Adi Marzban Path, Ballard Estate, Mumbai - 400038
400.00 5.479
9. Syndicate Bank Employees Pension Fund
Syndicate Bank, PO Box No.1, Manipal 576104
200.00 2.739
10. Indian Overseas Bank Treasury (Domestic), Central Office, 763, Anna Salai, Chennai-600002
200.00 2.739
C. TOP 10 HOLDERS OF SUBORDINATED TIER II BONDS IV Issue (SERIES-D) (as on 12.12.2008)
Sr. No.
Name of Bondholder Address Number of Bonds Held
% Bondholding
1. Coal Mines Providend Fund
C/o. ICICI Securities Primary Dealership Ltd, ICICI Center, HT Parekh Marg, Church Gate, Mumbai - 400020
7250.00 51.785
2. Coal Mines Pension Fund State Bank of India Securities Services, Mumbai - 400001
9. NATIONAL THERMAL POWER CORPORATION LIMITED EMPLOYEES PROVIDENT FUND TRUST
NTPC BHAWAN SCOPE COMPLEX DELHI 110003
140.000 2.000
10. Union Bank of India C/o ILFS House, Plot No.14, Chandibali, Andheri East, Mumbai - 400072
100.00 1.428
. F. TOP 10 HOLDERS OF SUBORDINATED TIER II BONDS VII Issue (SERIES-G) (as on 12.12.2008)
Sr. No.
Name of Bondholder Address Number of Bonds Held
% Bondholding
1. Central Board of Trustees Emp. Provident Fund
State Bank of India, EPFO Securities, Services Branch, 2nd Floor, Mumba Main Brnch, Samachar Marg, Mumbai – 400 023
970.00 16.166
2. CBT EPF EPF A/c ICICI Prudential AMC Ltd
HDFC Bank Ltd, Custody Services, Trade World A, Wing, GR floor, Kamala Mills Compound, SB Marg, Lower Parel, Mumbai – 400 013
950.00 15.833
3. Coal Mines Provident Fund ICICI Securities Primary Dealership Ltd, ICICI Centre, HT Parek Marg, Churchgate, Mumbai – 400 020
500.00 8.333
4. Andhra Bank Emp. Pension Fund
C/O. Andhra Bank Head Office, Dr.Pattabhi Bhavan 5-9-11, Saifabad, Hyderabad-500004
450.00 7.500
5. Punjab National Bank Deutsche Bank, AG DB House, Hazarimal Somany Marg, Next to Sterling Theatre, Fort, Mumbai – 400 001
300.00 5.000
6. Coal Mines Pension Fund State Bank of India, SEC SER Branch, EPFO Section, EPFO Sec, Mumbai Main Branch Building, Samachar Marg, Fort, Mumbai-400001
300.00 5.000
7. NPS Trustees – SBI Pension Fund Scheme - I
SBI Pension Funds Pvt Ltd, 12th Floor, State bank Bhavan, Madame Cama Road, Mumbai - 400021
5. 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 confirms 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.
XIII. 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. XIV. 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.
XV. 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. XVI. 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. XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE
ISSUER By very nature of its business, the Bank is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Bank. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Bank) which are or may be deemed to be material have been entered into by the Bank. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the Head Office of the Bank between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date. A. MATERIAL CONTRACTS a. Copy of letters appointing Lead Arrangers to the Issue. b. Copy of letter appointing Registrar and Transfer Agents and copy of MoU entered into between the Bank
and the Registrar. c. Copy of letter appointing IDBI Trusteeship Services Ltd. (ITSL) as Trustees to the Bondholders. B. DOCUMENTS a. Memorandum and Articles of Association of the Bank as amended from time to time. b. Board Resolution No. 49 dated 23rd September, 2008 authorizing issue of Bonds offered under terms of
this Disclosure Document.
c. Letter of consent from IDBI Trusteeship Services Ltd. for acting as Trustees for and on behalf of the holder(s) of the Bonds.
d. Letter of consent from MCS Ltd. for acting as Registrars to the Issue. d. Copy of application made to the NSE for grant of in-principle approval for listing of Bonds. e. Letter from NSE conveying its in-principle approval for listing of Bonds. f. Letter from BRICKWORK RATINGS INDIA PVT LTD conveying the credit rating for the Bonds of the Bank
and the rating rationale pertaining thereto. g. Letter from CRISIL conveying the credit rating for the Bonds of the Bank and the rating rationale
pertaining thereto. h. Tripartite Agreement between the Bank, NSDL and MCS Ltd. for issue of Bonds in dematerialised form. i. Tripartite Agreement between the Bank, CDSL and MCS Ltd. for issue of Bonds in dematerialised form. XVIII. DECLARATION It is hereby declared that this Disclosure Document contains full disclosures 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 dated June 06, 2008. The Bank also confirms that this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made, misleading. The Disclosure Document also does not contain any false or misleading statement. The Bank accepts no responsibility for the statement made otherwise than in the Disclosure Document or in any other material issued by or at the instance of the Bank and that any one placing reliance on any other source of information would be doing so at his own risk. Signed by Mr. Jogi Raju, General Manager (Merchant Banking Division (MBD), pursuant to the internal authority as per Office Note No. 666/25/665/220 dated 19.12.2008.
XIX. ANNEXURES
A. CREDIT RATING LETTER FROM BRICKWORK RATINGS INDIA PVT LTD
B. RATING RATIONALE FROM BRICKWORK RATINGS INDIA PVT LTD
C. CREDIT RATING LETTER FROM CRISIL
D. RATING RATIONALE FROM CRISIL
E. CONSENT LETTER FROM IDBI TRUSTEESHIP SERVICES LTD.
ANDHRA BANK (A Government of India Undertaking)
APPLICATION FORM FOR Unsecured Redeemable Non-Convertible (Upper Tier II) BONDS
To, ANDHRA BANK Head Office, Dr.Pattabhi Bhavan, 5-9-11, Saifabad, Hyderabad – 500 004.
Dear Sir,
Having read, understood and agreed to the contents and terms and conditions of Andhra Bank’s Disclosure Document dated December 24, 2008, I/we hereby apply for allotment to me/us, of the under mentioned 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 their 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 PIN CODE SOLE/ FIRST APPLICANT CATEGORY (Tick one) 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 15 years Primary/ State/ District/ Central Co-operative Bank Coupon Rate 9.30% p.a. Regional Rural Bank Interest Payment Annual Mutual Fund 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 Cheque/ Demand Draft No.
(Rs. in figures) (Rs. in words) Dated Drawn on (Name of the Bank) Branch
Applicants can alternatively remit their application money through RTGS to ANDHRA BANK - RTGS Account 2150074 (IFSC Code. ANDB0000241
SOLE/ FIRST APPLICANT’S BANK DETAILS (Ref. Instructions) INCOME TAX DETAILS (Ref. Instructions) Bank Name Sole/ First Applicant Second Applicant Third ApplicantBranch City
P.A,N./ G.I.R. NO.
Account Number Type of Account Savings Current Others
I.T. Circle/ Ward/ District No.
TO 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.
DETAILS FOR ISSUE OF BONDS IN ELECTRONIC/ DEMATERIALISED FORM APPLICANT’S SIGNATURE(S) Depository Name (please tick) NSDL CDSL Depository Participant Name DP-ID Number
Sole/ First Applicant
Client-ID Beneficiary Account Number
Second Applicant
Name of the Applicant
Third Applicant -------------*-------------*-----------*-----------*-------------*------------*-----------*-----------(Tear Here)-----------*-------------*-------------*-----------*-----------*-----------* -------------*------------
ACKNOWLEDGEMENT SLIP ANDHRA BANK (To be filled in by the Applicant) Received from_________________________________________________________________ Address______________________________________________________________________ an application for ___________ Bonds vide Cheque/ Demand Draft No. ___________________ Drawn on_____________________________________________________________________ Dated____________ amounting to Rs. _____________________________________________. Note: Cheque(s) are subject to realisation.
All future communication in connection with this application should be addressed to the Registrars: M/s. MCS Ltd. [Address: Sri Venkatesh Bhavan, W-40 Okhla Industrial Area, Phase-II, New Delhi-110020; Tel No. (011)41406149/51/52; Fax No. 91-11-41709881; E-mail: [email protected]] quoting full name of Sole/ First Applicant, Application No., Number of Bonds applied for, Date, Bank and Branch where the application was submitted and Cheque/ Demand Draft Number and Issuing Bank.
For Office Use Only
Date of Receipt of Application / / 0 8
Date of Clearance of Cheque / / 0 8
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 respective Collecting Banker. Cheque(s)/ Demand Draft(s) should be drawn in favour of “Andhra Bank A/c –Bonds" and crossed “Account Payee Only”. Cheque(s)/ Demand draft(s) may be drawn on any bank including a co-operative bank, which is a member or a sub-member of the Banker’s Clearing House located at Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, New Delhi, Mumbai. 3. Applicants can alternatively remit the application money through RTGS to ANDHRA BANK RTGS Account No. 2150074, IFSC Code ANDB0000241, Branch - Andhra Bank Investments and International Banking, Mumbai. 4. Outstation cheques, cash, money orders, postal orders and stockinvest 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. In case the full particulars are not given, cheques will be issued in the name of the applicant at his/ her risk. 6. Receipt of applications will be acknowledged by the respective Collecting Branch of 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. In case where neither the PAN nor GIR number has been allotted, the fact of non-allotment should be mentioned in the application form in the space provided. 8. The application would be accepted as per the terms of the Scheme outlined in the Disclosure Document for Private Placement dated …………………..
