CITY UNION BANK Directors Report

The Board of Directors is pleased to present the Annual Report on business and operations of the Bank together with the Audited Financial Statements for the Financial Year ended 31st March, 2017.

Financial Highlights (Rs. in crore)




Growth (%)

Share Capital




Reserves & Surplus












Investments (Gross) *




Total Assets / Liabilities




Net Interest Income




Operating Profit




Net Profit




* the figures of the previous year have been regrouped / reclassified wherever necessary.

During the year the Bank earned an operating profit of Rs.994 crore registering an increase of 19% as compared to previous year''''s figure of Rs.833 crore. The net profit of the Bank for the current year was Rs.503 crore as against Rs.445 crore of last year, registering a growth of 13%. The deposits and advances for the current year stood at Rs.30,116 crore and Rs.24,112 crore respectively. The total business stood at Rs.54,228 crore as compared to Rs.48,411 crore of the previous year registering a growth of 12%. The size of the balance sheet as on 31st March, 2017 was Rs.35,271 crore as compared to the previous year position of Rs. 31,804 crore showing an increase of 11%.


The Bank''''s total deposits for the year under review increased by Rs.2,958 crore from Rs.27,158 crore to Rs.30,116 crore registering a growth of 11% over previous year. During the current year CASA increased by Rs.1,506 crore to Rs.7,039 crore from Rs.5,533 crore recording a significant growth of 27% primarily due to the impact of demonetization of higher denomination currencies in November 2016. The cost of deposit of the Bank decreased from 7.62% in the previous year to 6.82% in the current year.


The Gross Advances of the Bank increased by Rs.2,859 crore to Rs.24,112 crore from Rs.21,253 crore, posting a growth of 13%. The yield on advances declined to 12.10% from 12.83% during the financial year due to stiff competition among Banks.

The Gross and Net NPA for the year under review stood at 2.83% and 1.71% respectively as compared to previous year figure of 2.41% and 1.53%.

Priority Sector Advances stood at Rs.11,813.52 crore as at 31st March, 2017 as compared to previous year amount of Rs.10,272 crore. The Bank has achieved 51.57% of Adjusted Net Bank Credit (ANBC) against the regulatory prescription of 40% of ANBC on Priority Sector lending requirements on an average basis as prescribed by RBI. The total agricultural advances stood at Rs.3,707.09 crore as at 31st March, 2017 as against Rs.3,391 crore as on 31stMarch, 2016. The Bank has achieved 18.13% of ANBC against the RBI prescribed level of 18% on an average basis.


Domestic Treasury

The gross investments increased by Rs.254 crore to Rs.7,082 crore as on 31st March, 2017 from Rs.6,828 crore as on 31st March, 2016 registering a growth of 4% and out of this, the investments in Government Bonds alone amounted to Rs.6,698 crore.

During the financial year 2016-17, the yield on Government of India (GOI) securities moved down. The yield on 10 year benchmark security moved from 7.41% to 6.69% on account of rate cut announced by RBI during the first half of the FY During the month of November 2016, it dropped down sharply and touched a low of 6.12% on account of demonetization announced by GOI. The yield reversed its course and rose upto 6.95% during February 2017 after RBI took measures to suck out the excess liquidity and also on change in RBI''''s policy stance from accommodative to neutral .

It is noteworthy to mention that during the year the Bank earned a profit of Rs.108 crore by taking advantage of yield movement on Govt. Securities as compared to Rs.45 crore last year. The average yield on investments declined from 7.45 % in the previous year to 7.23 % in the current financial year.

Forex Treasury

Indian Rupee witnessed swings during the period under review. USD / INR opened at ''''66.26 and closed at ''''64.84 after touching a high of Rs.68.86 during the course of the financial year. Indian Rupee against USD strengthened on the back of inflows in equity and debt markets. The Bank earned an exchange profit of Rs.98 crore compared to Rs.81 crore last year.



Year ended 31st March 2017

Year ended 31st March 2016

Total Income



Total Expenses



Operating Profit



Provisions & Contingencies



Net Profit



Net Interest Income



A total income of Rs.3,658 crore was earned by the Bank as against Rs.3,354 crore posting a growth of 9%. The total expenditure of the Bank increased by 6% to record Rs.2,664 crore as compared to previous year figure of Rs.2,521 crore.

The operating profit increased by Rs.161 crore to Rs.994 crore from Rs.833 crore thereby recording a growth of 19%. The net profit increased from Rs.445 crore to Rs.503 cro re achieving a growth rate of 13%.

The Net Interest Income for the year under review increased by Rs.218 crore from Rs.981 crore to Rs.1,199 crore. The non-interest income of the Bank increased to Rs.484 crore from Rs.410 crore.

The provision for tax for the year increased to Rs.190 crore from Rs.158 crore. The provision for NPA stood at Rs.252 crore vis-a-vis Rs.205 crore last year. The total provisions increased by Rs.103 crore to Rs.491 crore from Rs.388 crore.


The appropriations from net profit were made as under: (Rs. in crore)


Year ended 31st March 2017

Year ended 31st March 2016

Net Profit



Balance of Profit brought forward



Amount available for appropriations



Transfers to

- Statutory Reserve



- Capital Reserve



- General Reserve



- Special Reserve under IT Act, 1961



- Dividend & Dividend Tax



- Balance of Profit carried forward






In accordance with the revised accounting standards AS-4 contingencies and events occurring after the balance sheet date notified by the Ministry of Corporate Affairs on 30th March, 2016, the proposed dividend including corporate dividend tax has not been shown as an appropriation from the Profit and Loss appropriation account as of 31st March, 2017 and consequently not reported the same under Other Liabilities and Provisions as of 31st March, 2017. For computation of Capital Adequacy Ratio as at 31st March, 2017, Bank has adjusted the proposed dividend and tax thereon for determining Capital Funds.


The paid up share capital of the Bank increased from Rs.59.82 crore as on 31st March, 2016 to Rs.60.11 crore as on 31stMarch, 2017. During the period the Bank has allotted 28,73,602 equity shares arising out of the exercise of Employee Stock Options to employees of the Bank pursuant to CUB ESOS Scheme.

The Net worth of the Bank improved to Rs.3,556 crore as on 31st March, 2017 from Rs.3,033 crore as of 31st March, 2016.

Capital Adequacy Ratio:

As per BASEL



Minimum Prescribed CRAR


10.25% (PY. 9.625%)


16.09% (PY. 15.80%)

15.83% (PY. 15.58%)

The concept of Capital Conservation Buffer (CCB) has been newly introduced under BASEL III norms wherein Bank is required to maintain CCB of 2.50% at the end of March 2019 in a phased manner beginning from 31st March, 2016 @ 0.625% in each year up to 31st March, 2019.

During the current financial year i.e., 2017-18, the Bank redeemed the entire Non Convertible Debentures of Rs.10 lakh each issued under private placement route on 30th March, 2007 carrying a coupon rate of interest @10% with tenure of 121 months representing Tier II Capital - Series II totaling Rs.10 crore, that matured on 30th April, 2017.



Your Directors are pleased to recommend a dividend of Rs.0.30 per equity share of face value of Rs.1/- each (previous year Rs.1.20 per equity share) for the year ended 31st March, 2017.


During the month of May 2017, the Board of Directors of your Bank recommended the issue of 1 bonus equity share for every 10 equity shares of face value of Rs.1/- each (1:10) already held by the shareholders on a record date subject to shareholders'''' approval by Postal Ballot. Further as resolved by the Board, the shares allotted to the shareholders pursuant to bonus issue are also eligible to participate in dividend to be declared by the shareholders at the ensuing Annual General Meeting. The dividend payout ratio works out to 4.32% which is in accordance with the Dividend Distribution Policy of the Bank. The Board recommends the dividend for approval by the shareholders at the ensuing Annual General Meeting.


During the financial year the Bank has expanded its branch network by adding 25 more branches and 161 ATM''''s across the country totaling to 550 branches and 1,486 ATM''''s as on 31st March, 2017. The Bank has a major presence in the state of Tamil Nadu and is keen to further enlarge its presence by tapping potential markets, not only in Tamil Nadu but in other states too.



There have been persistent efforts made by the Government of India and the Reserve Bank of India in promoting financial inclusion as one of the important national objectives of the country. In line with the directions issued by the Govt. of India and RBI, the Bank has adopted Financial Inclusion as one of the key business measures to promote social inclusion by serving the un-served and the underserved population.

The Bank, following RBI directions, has covered all the allotted 45 villages having population of over 2.000 and 101 villages having population of over 1.000 and below 2,000 by introducing ICT (Information, Communication & Technology) based services, thus providing efficient and cost-effective banking services in the un-banked and remote villages of the country, paving the way for the inclusive growth. Further, during the year under review, Basic Savings Bank Deposits (BSBD) accounts numbering 1,04,794 were opened and 94,203 biometric smart cards were issued to the beneficiaries. Savings Bank linked overdraft facility, micro insurance products, Electronic Benefit Fund Transfer (EBT) payments have been extended to such account holders.


''''Pradhan Mantri Jan-Dhan Yojana'''' (PMJDY) is a flagship financial inclusion programme of Govt. of India which was launched by our Hon''''ble Prime Minister on 28th August, 2014 across the country. Under this programme the Bank has been allotted 264 wards apart from 146 villages already allotted under the Rural Financial Inclusion scheme. The Bank had conducted survey of all 1,80,211 households in all these 264 wards.

The Bank has opened 85,759 PMJDY accounts as on date through all its branches and Rupay cards were issued for the account holders under the scheme. As the overdraft facility is one of the features under PMJDY scheme, Bank is considering the same based on conditions fixed by IBA to the PMJDY account holders from Rs.1,000 to Rs. 5,000.


This scheme was launched by Hon''''ble Prime Minister, on 9th May, 2015. The scheme provides life insurance cover to people in the age group of 18 - 50 years. Risk cover is available up to 55 years, subject to payment of premium of ''''330/- p.a. Risk coverage is Rs.2 lakh in case of death due to any reason. The Insurance premium for the scheme is auto debited from the bank account of the respective subscriber.

The Bank has a tie up with LIC for this scheme.


This Scheme provides financial cover against personal accident of the subscribers. It is open for the age group between 18 - 70 years at a nominal annual premium of Rs.12/-. Risk cover is Rs.2.00 lakh for death due to accident or full disability and Rs.1.00 lakh for partial disability. The Insurance Premium for the scheme is auto debited from the bank account of the respective subscriber. The Bank is having a tie up with the New India Assurance Co. Ltd for this scheme.


Government of India launched Atal Pension Yojana for the benefit of all citizens especially for the poor and under privileged. Under APY, it is open for the age group between 18-40 years. After completion of 60 years of age, the subscribers will be given guaranteed minimum pension ranging between Rs.1,000 - Rs. 5,000 per month depending upon their contribution.

The enrollment as on 31st March, 2017 in the schemes is 49,369 (PMJJBY),72,460 (PMSBY) and 3,842 (APY) respectively.


The Bank believes lack of financial literacy among rural population is primarily responsible for low penetration of financial services. As a measure, the Bank has given more importance in schools and rural villages where the Bank''''s personnel have personally visited for imparting financial education.

During the reporting cycle, the Bank has conducted such literacy programmes in fourteen (14) villages around Tamil Nadu and twelve (12) meetings in schools. Adequate measures have been taken under this process to impart financial education for the underprivileged sections including educational institutions. Further the Bank has tied up with two agencies viz., Common Wealth Inclusive Growth Foundation and Bharathi Women Development Centre which has engaged the services of 146 Business Correspondents to serve the remote and unbanked regions in Tamilnadu. The villagers were educated about the Indian Banking system, the use of technology, digital products, security aspects etc.


The Bank implemented an Employee Stock Option Scheme ''''CUB ESOS 2008 for grant of stock options to eligible employees of the Bank. The Shareholders of the Bank approved the scheme on 26th April, 2008 at an Extra Ordinary General Meeting of the Bank. The maximum aggregate number of options that may be granted under this scheme is 5,00,00,000. As per the scheme, exercise price of the options shall be decided by the Compensation & Remuneration Committee at the time of issuing stock options. The Bank offers ESOS to its employees which vests over a period of five years from the date of grant of options i.e., 15% options each for first three years and 25% and 30% for fourth and fifth year respectively. Further, the shares are offered at prevailing market prices and no discount is offered. The details of employee stock option are appended hereto as Annexure I.


The Bank has enhanced the focus to drive customer experience and service quality with interventions in back office functions. The Bank has been improving productivity through process simplification, automation and continuous training. The Bank continues its focus on engagement and retention through initiatives that provide a holistic environment where employees get opportunities to realize their potential. Talent management being an integral part of overall performance management process in the bank aims to provide long term, sustained and meaningful careers to employees across the organization. The Bank is committed to developing its capabilities as an organization and as individuals to meet current and future business challenges. The Bank also deputes its employees to various training institutions like SIBSTC, NIBM, CAB, CAFRAL, IDRBT etc. There exists a cordial relationship between the management and the employees. Further, during the reporting cycle the management of the Bank has entered into a pay settlement with CUB Officers'''' Association and CUB Staff Union for the benefit of its employees with attractive pay structure and benefits, at par with Industry peers.

As on 31st March, 2017, the Bank has 4,689 employees, comprising of 54 Executives in top management cadre, 1690 Officers, 2635 Clerks and 310 Subordinate staff as compared to 4,517 employees in the previous year.


In today''''s Banking scenario, Technology plays a pivotal role in managing and fulfilling the growing customer demand. The Bank has been at the forefront of this digital revolution among banks in India.

In the use of Information and Communication Technology (ICT), the Bank has focused upon the following aspects:

1. Bring in advanced products in the area of Automation and Artificial Intelligence: The Bank has been a pioneer in installing ''''CUB Lakshmi'''', First Banking Robot at T. Nagar Branch, Chennai. Currently, the Robot interacts with customers to answer queries. In future, the Robot will handle more tasks.

2. Enhance the service levels and productivity: Customers can now perform a large number of tasks through CUB Net Banking and CUB Mobile Banking, use ATMs for regular transactions and visit e-Lounges in many branches to carry out a number of banking transaction. Through these facilities, 83 % of Customers'''' transactions are now being carried out outside of the branches.

3. Offer new mobile based products such as e Wallet and support the Government in ushering a cashless environment: The Bank has also helped in creating a cashless environment in SASTRA University using smart cards of CUB, which also serves as their ID Card.

4. Be in the forefront on creating a cyber security environment and ensure uninterrupted services to customers.

5. Run an efficient IT operations using Open Source environment and in managing a large network.

A Separate section in this Annual Report has details on the extensive Technological Banking activities carried out by the Bank.


- Best Small sized Bank for FY 2015-16 by Business World - PWC Best Banks'''' Survey 2016.

- Financial Express Best Bank award in the category "Top old Private Sector Bank" for FY. 2015-16.


All Board meetings of the Bank were held in accordance with the Companies Act, 2013, the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and SEBI Listing Regulations, 2015. The meetings were held to discuss and decide on various business policies, strategies and other businesses in the best interests of the Bank.

During the year under report, 15 meetings were duly held. The complete details on such meetings are provided in the Corporate Governance Report as part of this Annual Report.



Pursuant to the approval accorded by the Reserve Bank of India, Dr. N. Kamakodi was appointed as the Managing Director & CEO of the Bank for a period of three years w.e.f., 1st May, 2014 till 30th April, 2017. In view of this, the Board of Directors of the Bank based on the recommendations made by the Nomination Committee and taking into record the continued achievements made by the Bank under the able leadership of Dr. N. Kamakodi, resolved that Dr. N. Kamakodi be re-appointed as the Managing Director & CEO of the Bank for a further term, subject to approval by the RBI under the provisions of Section 35B of the Banking Regulation Act, 1949.

The RBI vide its letter no.DBR.Appt.No.12580/ 08.42.001/2016-17 dt. 24th April, 2017 conveyed its approval for the re-appointment of Dr. N. Kamakodi as the Managing Director & CEO of the Bank for a further period of three years w.e.f., 1st May, 2017 till 30th April, 2020. Further, as per the relevant provisions of Section 196 of the Companies Act, 2013, the re-appointment of Managing / Whole Time Director requires the approval of shareholders. Accordingly, the re-appointment of Dr. N. Kamakodi is being recommended for approval by the shareholders in the Notice calling this Annual General Meeting. The relevant details pursuant to SEBI Listing Regulations 2015 are disclosed separately in such notice.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Bank, Justice (Retd.) S.R. Singharavelu, Non-Executive Director of the Bank, retire by rotation at the ensuing Annual General Meeting of the Bank and being eligible, has offered himself for re-appointment.

Shri. Subramaniam Narayanan, who is having specialized knowledge on Accountancy and Finance, was co-opted as Additional Director on the Board of the Bank on 20th June, 2017 to represent the minority sector, subject to approval by the Reserve Bank of India. In the opinion of the Board, Shri. Subramaniam is a dynamic and competent person who can effectively participate and represent in the Board of our Bank. The Board recommends his appointment as Independent Director on the Board of the Bank for approval by shareholders in the Notice calling this Annual General Meeting. The relevant details of Shri. Subramaniam Narayanan pursuant to SEBI Listing Regulations, 2015 is disclosed separately in such Notice.

Shri. R. Mohan, is currently a Non-Executive Director on the Board of the Bank representing the majority sector Banking, Agriculture and SSI. He was appointed as Non-Executive Director on 28th June, 2014 and at present as per the provisions of Section 149(6) of the Companies Act, 2013 he is eligible to represent the Board as an Independent Director. The Director meets the criteria prescribed therein to become an Independent Director and has furnished a declaration to that effect. Accordingly, the appointment of Shri. R. Mohan as Independent Director is being recommended for approval by the shareholders in the Notice calling this Annual General Meeting. The relevant details of Shri. R. Mohan pursuant to SEBI Listing Regulations, 2015 is disclosed separately in such Notice.


Shri. R.G. Chandramogan retired as an Independent Director from the Board of the Bank on 29th July, 2016, on account of completion of two terms of 8 years each with a prescribed cooling period as per the provisions of Banking Regulation Act ,1949.

This was his second tenure of service on the Board of Bank.

Shri. T. K. Ramkumar retired as Independent Director of the Bank on 10th June, 2017, on account of completion of 8 years tenure as per the provisions of Banking Regulation Act, 1949.

The Board hereby places on record its warm appreciation over the excellent services rendered by Shri. R. G. Chandramogan and Shri. T. K. Ramkumar during their tenure.

Key Managerial Personnel

The following officials of the Bank continue to be the "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013 :





Dr. N. Kamakodi



Shri. V. Ramesh

General Manager - CFO & CS

Declaration by Independent Directors

The Bank has received relevant declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations''''), and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Familiarization Program for Independent Directors

The details of programme for familiarization of Independent Directors with the Bank, their roles, rights and responsibilities in the Bank and related matters are provided separately under the Corporate Governance Report forming part of Annual Report.

Performance Evaluation of the Board

In line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015, there exists a structured criterion as approved by the Nomination committee of the Board for carrying out the performance evaluation of the Board as a whole, its committees as well as Independent Directors.

During the year under review, the Securities and Exchange Board of India (SEBI) has issued a detailed guideline on Board Evaluation to bring more clarity in the evaluation process. Accordingly the criteria were aligned by the Nomination committee to meet the requirements of such guidelines and the necessary evaluations/ review were carried out by the Board / Independent Directors in their separate meeting to determine the effectiveness of the Board, its Committees, Chairman and individual Directors.

Additional information on performance evaluation is given in Corporate Governance section forming part of this report.


Statutory Auditor

M/s. P. Chandrasekar, Chartered Accountants, Bengaluru, the present Statutory Central Auditors, will complete their four (4) years term at the ensuing Annual General meeting (AGM) and accordingly in terms of RBI letter no. DBS.ARS No/08.13.005/2015-16 dt. 9th June, 2016, they will retire at the ensuing AGM. In terms of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors has recommended the appointment of M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as Statutory Central Auditors of the Bank subject to the approval by RBI, to hold office from the conclusion of ensuing AGM on such remuneration to be decided by the Board.

The Bank has received the consent from the proposed Auditor and confirmation to the effect that they are not disqualified to be appointed as Statutory Central Auditors of the Bank in terms of Companies Act, 2013 and the rules made there under. Members are kindly requested to consider and approve the appointment as Statutory Central Auditors of the Bank for FY. 2017-18.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Bank has appointed M/s B.K. Sundaram & Associates, Practicing Company Secretaries, as Secretarial Auditor to conduct the Secretarial Audit of the Bank for the Financial Year 2016-17. The report of Secretarial Auditor ''''Secretarial Audit Report'''' is annexed to this report as Annexure II.


In accordance with Section 134 (5) of the Companies Act, 2013, the Board of Directors of the Bank hereby declares and confirms that:

i) In the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the Profit & Loss of the Bank for that period.

iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

iv) The Directors had prepared the annual accounts on a going concern basis.

v) The Directors had laid down adequate internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

vi) The Directors has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Bank has formulated a Code of Conduct pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, to regulate, monitor and ensure reporting of trading by the employees and other connected persons to comply with the provisions of SEBI Listing Regulations. Such policy is adopted to maintain highest ethical standards in dealing with securities of the Bank by persons to whom it is applicable. The code of conduct and related policy are available in the Bank''''s website (weblink:


There are no material changes and commitments affecting the financial position of the Bank which has occurred between the end of the financial year of the Bank i.e., 31st March, 2017 and the date of Directors Report i.e., 20th June, 2017.


During the year under review, no significant and material orders were passed by the Regulators or courts or tribunals impacting the going concern status and Bank''''s operation in future.


The Bank has adopted a Compensation Policy in accordance with the directives issued by the Reserve Bank of India. The Bank has constituted a Compensation & Remuneration Committee which oversees the framing, implementation and review of the Compensation Policy of the Bank. The Remuneration policy of the Bank is briefed under Corporate Governance Report as part of Annual Report.


The bank has in place an integrated Risk Management framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks.

The details of identification, assessment, mitigations, monitoring and the management of all risks are mentioned in the Management Discussion and Analysis section appended to this Report.


Pursuant to an amendment notification issued by the Securities Exchange Board of India during the year 2016, the Bank has framed a policy on Dividend Distribution taking into account the guidelines prescribed by the Reserve Bank of India on ''''Declaration of Dividend by Scheduled Commercial Banks''''.The same is available at the website of the Bank. (weblink: DistributionPolicy.pdf).


As per SEBI Listing Regulations, 2015, a Business Responsibility Report describing the Bank''''s social, environmental and governance aspects are attached as part of this Annual Report.


Being a Banking company, the disclosures as required pursuant to Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with Section 73 & 74 of the Companies Act, 2013 are not applicable to the Bank.


The Bank has put in place adequate internal financial controls commensurate with the size and scale of operations. The Bank has, in all material aspects, adequate internal control systems over financial reporting and these controls have taken into consideration, the essential components of internal control stated in the guidance note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Such internal financial controls over financial reporting were operating effectively as at the end of the financial year.


Conservation of Energy and Technology Absorption

Considering the nature of activities carried out by the Bank, the provision of Section 134(m) of the Companies Act, 2013 relating to conservation of energy and technology observation do not apply to the Bank.

However every effort is being made to conserve energy. On the technological front, the Bank continues to offer excellent service to its customers by adopting the latest and providing innovative technological solutions. A seperate report on technology is furnished as part of this report.

Foreign Exchange Earnings and Outgo

The Bank continues to encourage country''''s export promotion by lending to exporters and offering them forex transaction facilities.

Employees and Related Disclosures

Disclosures under Section 197 of the Companies Act, 2013

The disclosures pursuant to the provisions of Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished as Annexure III.

During the financial year there are no employee(s) of the Bank who were in receipt of remuneration either employed throughout the financial year or part thereof, was in receipt of remuneration for that year which in the aggregate or as the case may be at a rate which is not less than the limits specified under Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended.

Further, the Bank do not have any employee(s) who was employed throughout the financial year or part thereof and was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate, which in the aggregate, is in excess of that drawn by the Managing Director and holds by himself or along with his spouse and dependent children not less than 2% of equity shares of the Bank.

Disclosure under Section 22 of Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act 2013.

The Bank gives utmost importance towards maintaining and upholding the dignity of each and every women working in the Bank. The Bank has a policy on Prevention of Sexual Harassment at workplace which provides for adequate safeguards and protection for women employees working in the organization. The details of complaints received and disposed under such policy is as follows:

Number of complaints pending as on the beginning of the financial year


Number of complaints filed during the financial year


Number of complaints pending as on the end of the financial year



The Board of Directors of the Bank has adopted a policy on Related Party transactions which is in line with the Companies Act, 2013 and SEBI listing regulations, 2015. There were no significant "Related Party Transactions" of any material, financial & commercial nature with the Bank by the Directors and their relatives that would have potential conflict with the interest of the Bank at large. A detailed policy on the Related Party Transaction is available at the Bank''''s website. (weblink: ts/CUB_Related_Party_Transaction.pdf)


All loans, guarantees or investments made in securities by the Bank are exempt pursuant to the provisions of section 186 (11) of the Companies Act, 2013 and hence does not attract any disclosure required under section 134 (3)(g) of the Companies Act , 2013.


Pursuant to Section 134(3)(a), of the Companies Act, 2013 (the Act), read with Rule 12(1) of Companies (Management & administration) Rules, 2014 the extract of Annual Return in form MGT - 9 as provided under

Sub-section (3) of Section 92 of the Act is appended to this Annual Report as Annexure IV.


In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and the related notifications / circulars / guidelines issued by MCA, the Bank has established a Corporate Social Responsibility (CSR) Committee. The statutory disclosures on the committee composition and a Report on CSR activities undertaken during the year is annexed as Annexure V to this report.


Corporate Governance of the Bank is an ethically driven business process that rests on the fundamental pillar of high ethical values aimed at enhancing organization''''s brand and reputation and to protect the interests of all the stakeholders by taking ethical business decisions. The Bank is committed to achieving the highest standards of Corporate Governance and also adheres to the Corporate Governance requirements set by the Regulators / applicable laws. Accordingly, the Board functions as trustees of the shareholder''''s and seeks to ensure that the long term economic value for its shareholders is achieved while balancing the interest of all the stakeholders.

A separate section on Corporate Governance Standards followed by the Bank and the relevant disclosures, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 and rules made there under are disclosed there at as part of this report.


A detailed Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 is presented as a separate section as part of this Annual Report.


A vigil mechanism has been implemented through the adoption of Whistle Blower Policy with an objective to enable any employee or Director, raise genuine concern or report evidence of activity by the Bank or its employee or Director that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State Laws, rules, regulations and / or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank''''s policies; questionable accounting / audit matters / financial malpractice.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exceptional circumstances.

The Policy has been uploaded on the Bank''''s intranet as well as website (weblink: http://investor.cityunionbank. com/downloads/ Whistleblower%20Policy.pdf).


The Board of Directors of the Bank would like to take this opportunity to thank all the stakeholders and wish to place on record its deep and sincere gratitude to the Reserve Bank of India, NABARD, NHB, IDBI, SIDBI, EXIM BANK, ECGC, DICGC, SEBI, Stock Exchanges, Depositories, Karvy Computershare Pvt. Ltd., Life Insurance Corporation of India, United India Insurance, New India Assurance, Tata Consultancy Services, CCIL, CIBIL, Correspondent Banks, Exchange Houses and other regulatory authorities for their continued support, guidance and co-operation and also, to Shri. R. G. Chandramogan and Shri. T. K. Ramkumar, Independent Directors who retired on account of completion of tenure.

The Board hereby appreciates the dedication and the efforts of all the employees for their resolute support and commitment in pursuit of organizational growth & excellence.

For and on behalf of the Board

Place : Chennai S. Mahalingam

Date : 20th June, 2017 Chairman

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at

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