Uti-leadership Equity Fund OD

UTI-Leadership Equity Fund (UTI-LEF)

2

This offer document sets forth concisely the information about the scheme that a prospective investor ought to knowbefore investing. The offer document should be retained for future reference. The offer document will remain effective fora period of not more than two years from the date of the offer document after which it shall be fully revised and updated.Till the time the offer document is revised and reprinted, for any changes of material nature made to the scheme, anaddendum will be prepared and attached to the offer document. The addendum will also be circulated to the existingunitholders.

The statutory provisions included in this offer document are general and indicative in nature and are neither exhaustivenor any particular investor specific.

The scheme particulars have been prepared in accordance with Securities and Exchange Board of India (MutualFunds) Regulations, 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI).The units offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certifiedthe accuracy or adequacy of the offer document.

1. Nature of Scheme An open-ended equity oriented Scheme.

2. Investment Objective This scheme seeks to generate capital appreciation and/orincome distribution by investing the funds of the scheme instocks that are “Leaders” in their respective industries/sectors/sub-sector.

3. Eligible Investors Open to resident individuals, institutions as well as to NRIs andFIIs.

4. Options Available Growth Option and Dividend Option with Payout andReinvestment facilities.

5. Purchase/Redemption Price During the New Fund Offer period, the units of the fund will besold at face value plus load as applicable.

The Scheme will offer purchase and redemption of units at NAVbased prices on every business day on an ongoing basis,commencing from 28th February 2006.

6. Net Asset Value(NAV) Declaration of NAV on a daily basis.

7. Face Value of Units The face value of a unit is Rs.10/-.

8. Minimum Amount of Initial Investment Minimum initial investment is Rs.5,000/-. Subsequent minimuminvestment under a folio is Rs.1,000/- and in multiples ofRe.1/- thereafter with no upper limit.

9. Expenses Under the Regulations, the Fund is entitled to charge InitialIssue Expenses up to a maximum of 6% of initial resourcesraised under the Scheme. The initial issue expenses over andabove the entry load collected shall be charged to the schemesubject to a maximum of 6% of the initial corpus collected. Anyexpenditure in excess of this shall be borne by the AMC. Theinitial issue expenses would be amortised over a period of 5years and would be included in the NAV.

10. Facilities Available Systematic Investment Plan (SIP) and Automatic Triggerfacilities available.

HIGHLIGHTS


3

II. DUE DILIGENCE CERTIFICATE

Due Diligence Certificate submitted to SEBI forUTI-Leadership Equity Fund

It is confirmed that:

I. The Draft Offer Document forwarded to Securities And Exchange Board of India is in accordance with theSEBI (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.

II. All legal requirements connected with the launching of the scheme as also the guidelines, instructions, etc.issued by the Government and any other competent authority in this behalf, have been duly complied with;

III. The disclosures made in the offer document are true, fair and adequate to enable the investors to make a wellinformed decision regarding investment in the scheme;

IV. All the intermediaries named in the offer document are registered with SEBI and till date such registration isvalid.

Sd/-

Rajesh VermaDate : October 28, 2005 Compliance OfficerPlace : Mumbaia


4

CONTENTS

Item Contents Page No.No.

I. Cover Page 1

II. Due Diligence Certificate 3

III. Definitions 5

IV. Risk factors 6

V. Investment Objectives, Policies, Securities lending & Derivatives 8

VI. Units and Offer 16

VII. Purchase of units 20

VIII. Expenses 23

IX. Transfer/ Pledge/Assignment of units 25

X. Dividend Distribution & Capitalisation 26

XI. Reinvestment of Dividend distributed 27

XII. Redemption of units 27

XIII. Termination/Winding up of the Scheme 29

XIV. Inter-scheme Transfers 30

XV. Associate transactions & borrowings 30

XVI. Corporate investments in schemes of UTI Mutual Fund and investments by theschemes of the Mutual Fund in such corporates. 33

XVII. NAV Determination and valuation of assets 44

XVIII. Accounting Policies 45

XIX Tax treatment of investments 46

XX. Unitholders’ rights & services 48

XXI. Constitution and Management of UTI Mutual Fund 49

XXII. Other service providers for the scheme 58

XXIII. Investors’ grievances redressal 59

XXIV. Penalties, pending litigations, material findings of inspections/ investigations. 60

XXV. Condensed financial information 63


5

III. DEFINITIONSIn the scheme unless the context otherwise requires:

1. “Acceptance date” or “date of acceptance” withreference to an application made by an applicantto the UTI Asset Management Company (UTIAMC) for purchase or redemption of units meansthe day on which the UTI Financial Centres(UFCs)/Registrar after being satisfied that suchapplication is complete in all respects, acceptsthe same.

2. “Accounting Year” of UTI Mutual Fund is from Aprilto March.

3. “Act” means the Securities and Exchange Board ofIndia Act, 1992, as amended or re-enacted from timeto time.

4. “Applicant” means an investor who is eligible toparticipate in the scheme and who is not a minorand shall include the alternate applicant mentionedin the application form.

5. “Alternate applicant” in case of a minor means theparent other than the parent who has made theapplication on behalf of the minor.

6. “AMFI” means Association of Mutual Funds in India.

7. “Asset Management Company/UTI AMC/AMC/Investment Manager” means the UTI AssetManagement Company Private Limited incorporatedunder the Companies Act, 1956 and approved bySEBI to act as the investment manager to theschemes of UTI Mutual Fund.

8. “Body Corporate” or “Corporation” includes acompany incorporated outside India but does notinclude (a) a corporation sole, (b) a co-operativesociety registered under any law relating to co-operat ive societ ies and (c) any other bodycorporate (not being a company as defined in thisAct), which the Central Government may, bynotification in the Official Gazette, specify in thisbehalf.

9. “Business Day” means a day other than ( i )Saturday and Sunday or (ii) a day on which theprincipal stock exchange with reference to whichthe valuation of securities under the scheme isdone is closed, or the Reserve Bank of India orbanks in Mumbai are closed for business, or (iii) aday on which the UTI AMC offices in Mumbairemain closed or (iv) a day on which purchase andredemption/ changeover / switchover of unit issuspended by the Trustee.

10. “Eligible Trust” means - (i) a trust created by or inpursuance of the provisions of any law which is forthe time being in force in any State, or (ii) a trust,the properties of which are vested in a treasurerunder the Charitable Endowments Act 1890 (Act 6of 1890), or (iii) a religious or charitable trust which

is administered or controlled or supervised by orunder the provisions of any law, which is for thetime being in force relating to religious or charitabletrusts or, (iv) any other trust, being an irrevocabletrust, which has been created for the purpose of orin connection with the endowment of any propertyor properties for the benefit or use of the public orany section thereof, or (v) a trust created by a willwhich is valid and has become effective, or (vi) anyother trust, being an irrevocable trust, which hasbeen created by an instrument in writing andincludes `deposi tory’ wi thin the meaning ofClause(e) of Sub-section (1) of Section 2 of TheDepository Act, 1996.

11. “Firm”, “par tner” and “par tnership” have themeanings assigned to them in the Indian PartnershipAct, 1932 (9 of 1932), but the expression partnershall also include any person who being a minor isadmitted to the benefits of the partnership.

12. “Fund Manager” means the manager appointed forthe day-to-day management and administration ofthe scheme.

13. “Investment Management Agreement or IMA” meansthe Investment Management Agreement (IMA) datedDecember 9, 2002, executed between UTI TrusteeCompany Pr ivate Limited and UTI AssetManagement Company Private Limited.

14. “Load” is a charge that may be levied as a percentageof NAV at the time of entry into the Scheme or at thetime of exiting from the Scheme.

15. “Mutual Fund” or “Fund” or “UTIMF” means UTIMutual Fund, a Trust under the Indian Trust Act, 1882registered with SEBI under registration number MF/048/03/01 dated January 14, 2003.

16. “NAV” means Net Asset Value of the Units of theScheme calculated in the manner provided in thisOffer Document and in conformity with the SEBIRegulations as prescribed from time to time.

17. “New Fund Offer or Initial Issue” means offer of theunits of the Scheme during the New Fund OfferPeriod.

18. “Non-Resident Indian (NRI)” shal l have themeaning as defined under Foreign ExchangeManagement (Deposit) Regulations, 2000 (FEMARegulation 2000) framed by Reserve Bank of Indiaunder Foreign Exchange Management Act, 1999(42 of 1999). As per FEMA Regulation 2000, “Non-Resident Indian (NRI)” means a person residentoutside India who is a citizen of India or is a personof Indian origin. A person shall be deemed to bea “person of Indian origin” if he is a citizen of anycountry other than Bangladesh or Pakistan and if(a) he at any time held Indian passport; or (b) heor either of his parents or any of his grand parentswas a citizen of India by virtue of the Constitutionof India or the Citizenship Act, 1955 (57 of 1955);


6

or (c) the person is a spouse of an Indian citizenor a person referred to in sub-clause (a) or (b)herein.

19. “Number of units deemed to be in issue” means theaggregate of the number of units issued and stillremaining outstanding.

20. “Official points of acceptance” - UTI FinancialCentres (UFCs), Offices of the Registrar of theScheme and any other author ised centre asmay be prescribed by UTI AMC from time totime are the off icial points of acceptance ofp u r c h a s e / c h a n g e ove r / sw i t c h ove r a n dredemption applications of the scheme. The cutoff time as mentioned in the offer document willb e a p p l i c a b l e a t t h e s e o f f i c i a l p o i n t s o facceptance.

21. “RBI” means the Reserve Bank of India, constitutedunder the Reserve Bank of India Act, 1934.

22. “Registrar” means a person whose services may beretained by UTI AMC to act as the Registrar underthe scheme, from time to time.

23. “ Regulations” or “SEBI Regulations” mean the SEBI(Mutual Funds) Regulations, 1996 as amended orre-enacted from time to time.

24. “Scheme” means the UTI-Leadership Equity Fund(UTI-LEF).

25. “SEBI” means the Securities and Exchange Boardof India set up under the Securities and ExchangeBoard of India Act, 1992 (15 of 1992).

26. “Society” means a society established under theSocieties Registration Act of 1860 or any othersociety established under any State or Central lawfor the time being in force

27. “Sponsors” are Bank of Baroda, Punjab NationalBank, Life Insurance Corporation of India and StateBank of India;

28. “Time” all time referred to in the offer documentstands for Indian Standard Time.

29. “Trustee” means UTI Trustee Company PrivateLimited, a company incorporated under theCompanies Act, 1956 and approved by SEBI toact as the Trustee to the schemes of UTI MutualFund.

30. “Trust Deed” means the Trust Deed dated December9, 2002 of UTI Mutual Fund

31. “Unit” means one undivided share of the face valueof Rupees ten in the unit capital.

32. “Unit Capital” means the aggregate of the face valueof units issued under the scheme and outstandingfor the time being.

33. “Unitholder” means a person holding units in thescheme of the Mutual Fund.

34. In th is o f fer document , un less the contextotherwise requires, (i) the singular includes theplural and vice versa, (ii) reference to any genderinc ludes a re ference to a l l o ther genders,( i i i ) heading and bold typeface are only forconvenience and shall be ignored for the purposesof interpretation;

IV. RISK FACTORSGeneral Risk Factors:

1. Mutual Funds and securities investments aresubject to market risks and the NAV of the unitsissued under the scheme may go up or downdepending on the factors and forces affecting thecapital markets.

2. Past performance of other scheme(s)/plan(s) ofUTI Mutua l Fund and the Sponsors is notnecessarily an indication of future results. Therecan be no assurance or guarantee that theobjective of the scheme will be achieved.

3. UTI-Leadership Equity Fund is only the name of thescheme and does not in any manner indicate eitherthe quality of the scheme or its future prospects andreturns.

4. Statements/Observations made are subject to thelaws of the land as they exist at any relevant point oftime.

5. Growth, appreciation, dividend and income, if any,referred to in this offer document are subject to thetax laws and other fiscal enactments as they existfrom time to time.

6. The NAVs of the Scheme may be affected bychanges in the general market conditions, factorsand forces affecting capital market, in particular, levelof interest rates, various market related factors andtrading volumes, settlement periods and transferprocedures.

7. Unitholders in the Scheme are not offered anyguaranteed returns.

8. Securities Lending : It is one of the means ofearning additional income for the scheme with alesser degree of risk. The r isk could be in theform of non-availability of ready securities forsale during the period the securities remain lent.The scheme would be exposed to risk throughthe poss ib i l i t y o f de fau l t by the bor rower /i n te r med ia r y i n re tu r n ing the secu r i t i es .However, the risk would be adequately coveredby taking of suitable collateral from the borrowerby the intermediary involved in the process. Thescheme will have a lien on such collateral. It willalso have other suitable checks and controls tominimise any r isk involved in the secur i t ieslending process.


7

9. Investment in overseas market : The success ofinvestment in overseas market depends upon theability of the fund manager to understand conditionsof those markets and analyse the information, whichcould be different from Indian markets. Operationsin foreign markets would be subject to exchangerate fluctuation risk besides the market risks ofthose markets.

10. Trading in derivatives involves certain specificrisks like:

a. Credit Risk: This is the r isk on default bythe counter par ty. This is usually to theextent of difference between actual positionand con t rac ted pos i t i on . Th i s r i sk i ssubstantial ly mit igated where der ivativet ransac t ions happen th rough c lear ingcorporation.

b. Market Risk: Market movement may alsoadversely affect the pricing and settlement ofderivative trades like cash trades.

c. Illiquidity Risk: The r isk that a derivativeproduct may not be sold or purchased at afair pr ice due to lack of l iquidity in themarket.

d. An exposure to der ivat ives can lead tolosses. Success of dealing in derivativesdepends on the ability of the fund managerto cor rec t ly assess the fu tu re marke tmovement and in the event of incorrectassessment, i f any, performance of thescheme could be lower.

e. Interest Rate Swaps (IRSs) and Forward RateAgreements (FRAs) do also have inherentcredit and settlement risks. However, theserisks are substantially less as they are limitedto the interest stream and not the notionalprincipal amount.

f. Par t ic ipat ing in der ivat ives is a highlyspecialised activity and entails greater thanordinary investment risks. Notwithstandingsuch derivatives being used for limited purposeof hedging and portfolio balancing, the overallmarket in these segments could be highlyspeculat ive due to the act ion of otherparticipants in the market.

11. The aggregate value of “illiquid securities” of scheme,which are defined by SEBI as non traded, thinlytraded and unlisted equity shares, shall not exceed15% of the total assets of the scheme and any illiquidsecurities held above 15% of the total assets shallbe assigned zero value.

The proposed aggregate holding of assetsconsidered “illiquid”, could be more than 10% of thevalue of the net assets of the scheme. In normalcourse of business, the scheme would be able to

make payment of redemption proceeds within 10business days, as it would have sufficient exposureto liquid assets.

In case of the need for exiting from such illiquidinstruments in a short period of time, the NAV of thescheme could be impacted adversely.

12. In the event of receipt of inordinately large numberof redemption requests or of a restructuring of theSchemes’ portfolio, there may be delays in theredemption of units.

13. The Sponsors will not be liable to make goodor otherwise be responsible for any loss orshor tfall resulting from the operations of theScheme, beyond the in i t ia l cont r ibut ion o fRs.10,000/- made by them to the corpus of theMutual Fund.

14. As per SEBI circular dated December 12, 2003re f SEBI / IMD/C IRNo.10 /22701 /03 andclarification issued by SEBI vide letter no. SEBI/IMD/CIR No. 1/42529/05 dated June 14, 2005,each scheme should have a minimum of 20investors and no single investor should accountfor more than 25% of the corpus of such scheme.In case of non-fulfilment with the requirementof 20 investors in each calendar quar ter, thescheme shal l be wound up by fol lowing theguidelines prescribed by SEBI and the investor’smoney would be redeemed at applicable NAV.In determining the 25% limit by an investor theaverage net assets of the scheme would becalculated daily and any breach of the 25%holding limit by an investor would be determined.At the end of the quar ter, the average of dailyho ld ing by each such i nves to r wou ld becomputed to determine whether that investor hasbreached the 25% limit over the quar ter. If thereis any breach of limit by any investor over thequar ter, a rebalancing per iod of one monthwould be allowed and thereafter the investor whois in breach of the rule would be given 15 daysnotice to redeem his exposure over the 25% limit.Failure on the par t of the said investor to redeemhis exposure over the 25% l imi t wi th in theaforesaid 15 days would lead to automat icredemption by the Mutual Fund on the applicableNet Asset Value on the 15th day of the noticeperiod.

15. Scheme specific Risk factors

a. The inves tment focus i s on se lec tcompanies/industries/sectors of the marketand hence the portfolio may be concentratedin these companies/sectors/industries. Thismay make the portfolio vulnerable to factorsthat may affect these companies/sectors/industr ies in general thereby leading toincreased volatility in the movement of thescheme’s NAV.


8

b. Investors may note that AMC/Fund Manger’sinvestment decisions may not always beprofitable, even though it is intended togenerate capital appreciation and maximize thereturns by actively investing in equity/ equityrelated securities.

c. The value of the Scheme’s investments, maybe affected generally by factors affectingsecurities markets, such as price and volumevolatility in the capital markets, interest rates,currency exchange rates, changes in policiesof the Government, taxation laws or policies ofany appropriate authority and other politicaland economic developments and closure ofstock exchanges which may have an adversebearing on individual securities, a specificsector or all sectors including equity and debtmarkets. Consequently, the NAV of the Unitsof the Scheme may fluctuate and can go up ordown.

d. Trading volumes, settlement periods andtransfer procedures may restrict the liquidityof the equity and equity related investmentsmade by the Scheme which could cause thescheme to m iss cer ta in inves tmentoppor tunities. Different segments of theIndian f inancial markets have di f ferentsettlement periods and such periods may beex tended s ign i f i can t l y by un fo reseencircumstances leading to delays in receiptof proceeds from sale of securities. Theinability of the Scheme to make intendedsecuri t ies purchases due to sett lementproblems could also cause the Scheme tomiss certain investment opportunities. Bythe same rat ionale, the inabi l i ty to sel lsecurities held in the Scheme’s portfolio dueto the absence of a well developed and liquidsecondary market for debt securities wouldresult, at times, in potential losses to theScheme, in case of a subsequent decline inthe value of securities held in the Scheme’sportfolio.

e. Securities, which are not quoted on the stockexchanges, are inherently illiquid in nature andcarry a larger amount of liquidity risk, incomparison to securities that are listed on theexchanges or offer other exit options to theinvestor, including a put option. Within theregulatory limits, the AMC may choose toinvest in unlisted securities that offer attractiveyields. This may however increase the risk ofthe portfolio.

f. The Scheme may use various derivativeproducts as permitted by the Regulations.Use of derivatives requires an understanding

of not only the underlying instrument but alsoof the derivative itself. Other risks include,the risk of mispricing or improper valuationand the inability of derivatives to correlateperfectly with underlying assets, rates andindices. Usage of derivatives will expose theScheme to cer tain risks inherent to suchderivatives

g. The Scheme may also invest in ADRs /GDRs as permitted by Reserve Bank of Indiaand Securities and Exchange Board of India.To the extent that some par t of the assetsof the Plans may be invested in securitiesdenominated in foreign currencies, theIndian Rupee equivalent of the net assets,distributions and income may be adverselyaffected by the changes in the value ofcer tain foreign currencies relative to theIndian Rupee. The repatriation of capitala lso may be hampered by changes inregulations concerning exchange controls orpol i t ica l c i rcumstances as wel l as theapplication to it of other restr ictions oninvestment.

h. The scheme intends to deploy funds in moneymarket instruments to maintain liquidity. To theextent that some assets/funds are deployedin money market instruments, the scheme willbe subject to credit risk as well as settlementrisk, which might affect the liquidity of thescheme.

i. Different types of securities in which thescheme would invest as given in the offerdocument carry different levels and types ofr isk. Accordingly the scheme’s r isk mayincrease or decrease depending upon itsinvestment pattern. For e.g. corporate bondscarry a higher amount of risk than Governmentsecurities. Further even among corporatebonds, bonds which are AAA rated arecomparatively less risky than bonds which areAA rated.

V. INVESTMENT OBJECTIVES,POLICIES, SECURITIES LENDING

& DERIVATIVES

1. Investment objective:

The investment objective of the scheme is toachieve long-term capital appreciation and/ordividend distribution by investing in stocks that are“Leaders” in their respective industries/sectors/sub-sectors.


9

upto 35% in compan ies tha t a re po tent ia lleaders in order to prof i t f rom the probableu p s i d e p o t e n t i a l i n t h e s t o ck o f t h e s ecompanies.

Subject to the SEBI Regulat ions, the assetallocation pattern indicated above in respectof the entire scheme may change from time tot ime , keep ing i n v i ew mar ke t cond i t i ons ,market oppor tunit ies, appl icable regulat ionsand polit ical and economic factors. It must beclearly understood that the percentages statedabove are only indicat ive and not absolute.These p ropo r t i ons can va r y subs tan t i a l l yd e p e n d i n g u p o n t h e p e r c e p t i o n o f t h eInvestment Manager ; the intention being at alltimes to seek to protect the interests of the Unitho lde rs . Asse t a l l oca t i on pa t te r n may bea l t e r e d fo r s h o r t p e r i o d o n d e fe n s i veconsiderations.

4. Fundamental Attributes:

(a) “Fundamental attributes” in the context of the schemewill be:

(i) Type of Scheme: UTI-Leadership EquityFund is an open-ended equity or ientedscheme.

(ii) Investment objective: Investment objective ofthe scheme as provided under clause V (1)above of this offer document.

(iii) Terms of issue: Provisions in respect ofredemption, fees and expenses as indicatedunder clause VII I (4)(a), VII I (3) & (2)respectively in this offer document.

(b) The Trustee shall ensure that no change in thefundamental attributes of the scheme or the trustor fees and expenses payable or any other changewhich would modify the scheme and affect theinterest of the unitholders, will be carried outunless -

(i) a w r i t t en commun ica t i on abou t t heproposed change is sent to each unitholderand an adver t isement is g iven in oneEnglish daily newspaper having nation-widec i rcu la t ion as wel l as in a newspaperpublished in the language of the regionwhere the Head Office of the Mutual Fundis situated;

(ii) and the unitholders are given an option to exitat the prevailing Net Asset Value without anyexit load.

(c) The Trustee may from time to t ime add to orotherwise amend this scheme. However, anyc h a n g e / a m e n d m e n t / m o d i f i c a t i o n o f t h efundamental attr ibutes of the scheme wil l bemade with the pr ior approval of the SEBI. In

The scheme retains the option to alter the assetallocation for shor t-term periods on defensiveconsiderations.

While no fixed allocation will normally be made forinvestment in money market instruments like CallDeposits, Commercial Papers, Treasury Bills, ShortTerm Deposits etc. the same may be kept to theminimum generally to meet the liquidity needs of theScheme.

3. Investment focus and asset allocation strategy

T h e s c h e m e w i l l p r i m a r i l y i n ve s t i n adiversi f ied por tfol io of leadership stocks i .e.stocks of companies that are leaders in theirindustry/sectors/sub-sectors to achieve longt e r m c a p i t a l a p p r e c i a t i o n ove r t i m e . T h escheme wil l al low the fund manager to pickstocks that are leaders in the i r respect ivecategor ies. A comprehensive l ist of sectors/sub-sectors/ industr ies wi l l be developed bythe AMC based on the framework provided byits in-house research team and agencies l ikeA M F I , C M I E e t c . “ L e a d e r s ” t e n d t o b ecompanies with higher market shares, betteroperating efficiencies, better access to capitala n d s i g n i f i c a n t / s u s t a i n a b l e c o m p e t i t i veadvantages. They tend to give good returnsin an economic upswing and are also able towithstand economic downswings better thanother companies. An industr y or sector thatthe fund manager feels wi l l outperform otherswil l be selected and then leading companieswi th in that industr y /sectors wi l l be p icked.Normally at least 65% of the investments wi l lbe restr icted to the top five leading companiesof an industry/sector/sub-sector in terms ofs a l e s t u r n o v e r / m a r k e t s h a r e / m a r k e tcapi ta l izat ion. The scheme wi l l a lso invest

2. Asset allocation:

Instrument Normal RiskAllocation Pr ofile(% of netassets)

Equity & Equity Related 65 - 100% HighInstruments of “leaders”as stated above

Equity and Equity 0 – 35% HighRelated Instruments ofothers includinginvestments in potentialleaders

Debt* and Money Market 0-10% Low toInstruments including MediumSecuritised debt

* For Debt investments, the fund will invest in companieswhere the paper is rated AA+ and above.


10

r e s p e c t o f o t h e r c h a n g e s / a m e n d m e n t s /modifications not being of fundamental natureand not affecting the interest of the unitholderadversely, SEBI wil l be kept informed. Suchchanges would be intimated to the unitholdersi) as addendum ii) next earliest communicationto the unitholders.

5. Investment Policies:

Subject to SEBI (MFs) Regulations, guidelines oninvestment from time to time:

(a) Investment in the equity shares or equity relatedinstruments of any company shall not exceed morethan 10% of the NAV of the scheme at the time ofinvestment.

(b) The scheme shall not invest more than 5% of itsNAV in the unlisted equity shares or equity relatedinstruments.

(c) The aggregate value of “ill iquid securities” ofscheme, which are def ined by SEBI as nontraded, thinly traded and unlisted equity shares,shall not exceed 15% of the total assets of thescheme and any illiquid securities held above15% of the total assets shall be assigned zerovalue.

The proposed aggregate hold ing of assetsconsidered “illiquid”, could be more than 10% ofthe value of the net assets of the scheme. In normalcourse of business, the scheme would be able tomake payment of redemption proceeds within 10business days, as it would have sufficient exposureto liquid assets.

In case of the need for exiting from such illiquidinstruments in a short period of time, the NAV ofthe scheme could be impacted adversely.

(d) The scheme shall not invest more than 10% ofunits NAV in debt instruments issued by a singleissuer, which are rated not below investmentgrade by a credit rating agency authorised tocarry out such activity by SEBI. Provided thatthis limit shall not be applicable to investmentsin money market instruments and GovernmentSecurities.

(e) Debentures, irrespective of any residual maturityperiod (above or below one year), shall attractthe investment restrictions as applicable for debtinstruments as specif ied under clause 5 (d)above. It is further clarified that the investmentlimits at 5 (d) above are applicable to all debtsecurities, which are issued by public bodies/institutions such as electricity boards, municipalcorporations, state transport corporations etc.guaranteed by either state or central government.

Government securities issued by Central/Stategovernment or on its behalf by RBI are exemptfrom the above investment limits.

(f) No term loans will be advanced by this scheme forany purpose as per SEBI regulation 44(3) of SEBI(Mutual Funds) Regulations 1996.

(g) Pending deployment of funds of the scheme insecurit ies in accordance with the investmentobjective of the scheme as stated above, funds maybe invested in short-term deposits of scheduledcommercial banks.

(h) The Scheme shall not make any investment in anyfund of fund scheme.

(i) UTI Mutual Fund shall buy and sell securities onthe basis of deliveries and shall in all cases ofpurchases, take delivery of relative securities andin all cases of sale, deliver the securities and shallin no case put itself in a position whereby it hasto make shor t sale or carry forward transactionunless allowed by SEBI. However, the schememay also enter into derivatives transactions asmay be permissible under the guidelines issuedby SEBI.

(j) The Mutual Fund under all its schemes takentogether wil l not own more than 10% of anyCompany’s paid up capital carrying voting rights.

(k) (i) Th is scheme may par t i c ipa te in thesecur i t i es lend ing p rogramme, i naccordance with the terms of secur it ieslending scheme announced by SEBI. Theac t i v i t y sha l l be car r ied ou t th roughapproved intermediary.

(ii) The maximum exposure of the scheme to asingle intermediary in the securities lendingprogramme at any point of time would be 10%of the market value of the security class ofthe scheme or such limit as may be specifiedby SEBI.

(iii) If mutual funds are permitted to borrowsecurities, the scheme may, in appropriateci rcumstances borrow secur i t ies inaccordance with SEBI guidelines in thatregard.

(l) UTI MF shall, get the securities purchased by thescheme transferred in the name of the scheme,whenever investments are intended to be of long-term nature.

(m) The scheme may invest in secur it ies issued byoverseas/foreign companies and l isted abroador securit ies issued by Indian Corporates tofo r e i g n / ove r s e a s i nve s t o r s a n d l i s t e d o n


11

fo r e i g n s t o ck ex c h a n g e / s d i r e c t l y bysubscribing to such issues or purchasing themon the foreign stock exchange/s in accordancewith the SEBI/RBI guidel ines issued in thatregard f rom t ime to t ime. The scheme mayinvest in ADR/GDRs upto 10% of the funds ofthe scheme. The scheme shall not invest inforeign securit ised debt.

Depending upon the Fund Manager’s views,the scheme would l ike to seek investmentoppor tun i t i es i n t he ADR/ GDR/Overseasm a r k e t , i n a c c o r d a n c e w i t h g u i d e l i n e sstipulated in this regard by SEBI and RBI fromtime to t ime. Invest ing in overseas marketscould be both rewarding as well as challenging.Under normal circumstances, the Scheme shallnot have an exposure of more than 10% of itsnet assets in fore ign secur i t ies sub ject toregulatory l imits.

The fund manager will consider the risk/rewardratio of the investments in these instruments. Risksmay include fluctuating currency prices, relevantregulations of exchanges/countr ies, f inancialrepor t ing s tandards, l iqu id i ty and po l i t i ca linstability, among others. At the same, thesesecurit ies offer new investment and por tfoliodiversification opportunities into multi–market andmulti–currency products.

UTI Mutual Fund may invest in ADRs/GDRs andforeign securities upto 10% of its net assets ason January 31 of each relevant year e.g. thereference date upto January 30, 2006 will beJanuary 31, 2005 subject to a minimum of US $5mn and a maximum of US $50mn. The incomesecurities can also be of foreign issuer, issuedabroad.

(n) The scheme shall not make any investment in anyunlisted security of an associate or group companyof the sponsors; or any security issued by way ofpr ivate placement by an associate or groupcompany of the sponsors; or the listed securitiesof group companies of the sponsors which is inexcess of 25% of the net assets.

(o) Investment in non-publicly offered debt: Dependingupon the available yield the scheme, may investin non-publicly offered debt securities to the extentto which such investment can be made by thescheme.

(p) Based upon the liquidity needs, the scheme mayinvest in Government of India Securities to theextent to which such investment can be made bythe scheme.

(q) Investment by this scheme in other Mutual Fundschemes will be in accordance with Regulation

44(1), Seventh Schedule of the SEBI (MFs)Regulations as under:

A scheme may invest in another scheme underthe same asset management company or anyother mutual fund without charging any fees,provided that aggregate interscheme investmentmade by a l l schemes under the samemanagement o r in schemes under themanagement of any other asset managementcompany shall not exceed 5% of the net assetvalue of the mutual fund.

Such investment wi l l be consistent with theinvestment objective of the scheme. No investmentmanagement fees will be charged by the AMC onsuch investments.

(r) Benchmark:

S&P CNX Nifty is the benchmark index for UTI-Leadership Equity Fund. The benchmark may bechanged in future if a benchmark better suited tothe investment ob jec t ive o f the scheme isavailable.

(s) Portfolio Turnover Policy

Por tfol io Turnover is defined as the least ofpurchase or sales as a percentage of averagesize of a fund during any specified period of time.As sales and purchases of securities can be madeon daily basis, it would be difficult to estimatewith reasonable level of accuracy the l ikelyturnover in portfolios. There could be instancesof churning of por tfolio to take advantage oftrading opportunity existing in the market. But itwould be difficult to set the target for the portfolioturnover as it would be a function of purchases/redemptions, general market conditions, tradingopportunities, creation of liquidity to meet incomedistribution etc. The portfolio turnover shall betargeted so as to have return maximisation forthe unitholders. At the same time, expenses suchas brokerage and transaction cost shall be keptat low level so that it does not affect the earningsof the scheme.

6. Procedure followed at UTI AMC for takinginvestment decisions:

The investment set-up

The dealing and fund management functions at UTIAMC are segregated into separate & independentfunctions. The broad procedure followed at UTI AMCfor taking investment decisions is summarised asfollows:

(i) The i nves tmen ts o f t he scheme a remanaged by a Fund Manager on a regularbasis. The fund manager constructs theappropr iate por tfol io in the l ight of the


12

scheme objectives, prudential exposurenorms, fund size, tenure of the scheme andthe liquidity required for income distributionconsidering the normal redemption etc. Allthe investment decisions are based onscheme’s investment objectives, internalguidelines, regulatory restrictions etc. Thepo r t fo l i o i s mon i to red based on theresearch inputs, present & expected marketconditions, future outlook on the economy/sectors/individual scrips and fresh inflows/out f lows in the scheme wi th a v iew tooptimise the returns under the scheme. TheFund Manager’s operational strategy andits implementat ion are reviewed by theChief Investment Officer on an ongoingbasis.

(ii) Department of Securities Research is anin te r na l se t -up w i th ana lys ts t rack ingspecific sectors, which provides regularinputs to the fund managers on stocks/industries/sectors, implication of Govt./RBIpolicies and trends in international markets.The fund managers and research analystsinteract regular ly through meetings andpresentations. These inputs are discussedthoroughly in these meetings. The fundmanagers and analysts visit companies toobtain all publicly available information oncompany per fo r mance/ managementperspect ives. The fund managers a lsoattend company presentations as well aspresentations by external research outfits/b rok ing f i r ms on company / indus t r yperformance.

(iii) Pr imary market investments : Theinvestments in Initial Public Offerings andPrivate placements in primary markets arescreened and scrutinised by a separateprimary market team. On the basis of thisteam’s information and research reports, thefund managers give their recommendation onthe proposals keeping in mind the scheme’sinvestment objectives, internal guidelinesand SEBI guidelines. Such proposals areapproved by the Execut ive InvestmentCommittee (EIC).

(iv) Secondary market investments : FundManagers a lso in te rac t w i th researchanalysts and dealers on regular basis. Thefund manage rs a l so have access t oexternal sources of data from analysts,publ i c l y ava i l ab le i n fo r ma t i on abou tcompany / sector etc. The fund managerprepares a strategy paper for the schemeon periodic basis, which is discussed withsen io r managemen t o f UT I AMC. I finvestment proposals exceed the limits laid

down by the internal guidelines the CEO &Managing Director of UTI AMC would alsojoin the EIC as one of its members. Finally,these investment decisions made by theFund Managers are executed by designateddealer.

(v) Inter Scheme Transfers:

The inter-scheme buy and sale transactionsare effected as per the SEBI Regulations.

(vi) Monitoring:

A memorandum to the Board of Directors ofthe Trustee Company is submitted containinga repor t for due diligence on investmentdecisions by UTI AMC for UTI MF schemesfor each quarter.

7. Participating in Derivative Products:

(i) The scheme may use hedging techniquesincluding dealing in derivative products - likefutures and options, warrants, interest rateswaps (IRS), forward rate agreement (FRA)as may be permissible under SEBI (MFs)Regulations.

(ii) The scheme intends to use derivatives onlyfor the pur pose of hedging and/or re-ba lanc ing of the por t fo l io against anyanticipated move in the equity and debtmarkets. A hedge is primarily designed tooffset a loss on a portfolio with a gain in thehedge position.

(iii) The Fund manager may use va r i ousstrategies for trading in derivatives with aview to enhancing returns and taking coveragainst possible fluctuations in the market.One of the strategies could be to use indexfu tu res w i th a v i ew to i nc reas ing /decreasing the overall level of investmentin equities.

(iv) The Fund Manager may sel l the indexforward by taking a short position in indexfutures to save on the cost of outflow offunds or in the event of negative view on themarket.

(v) As per the current norms of UTI AMC, thevalue of derivative contracts outstanding atany point of time will be limited to 25% of thenet assets of the scheme. UTI AMC may infuture revise the limits within the investmentobjective of the scheme.

All the exposure limits are in terms of notionalvalue of the derivative positions. These exposurelimits are specified individually for each categoryof equity derivative position and are as given inthe table below:


13

Derivatives: A derivative instrument, broadly, isa financial contract whose payoff structure isdetermined by the value of an underlying security,index, in terest ra te e tc . Thus a der ivat iveinstrument derives its value from some underlyingvariable.

Derivatives are further classified intoFuturesOptionsSwaps

Futures: A futures contract is a standardizedcontract between two parties where one of theparties commits to sell, and the other to buy, astipulated quantity of a security at an agreed priceon or before a given date in future.

Numerical example to illustrate the risk and thereturn ensuing from trading in Futures:

Let us consider a portfolio of size of Rs. 100 crorehaving the following asset composition:

Equity Rs.90 crore

Cash Rs.10 crore

Beta of Portfolio 1.1

If at any time, the fund manager is not optimisticon the market and/or expects it to decline, he/

she may with a view to immunising the portfoliofrom such a decline, decide to sell index futures.In this case, the ideal value of futures contractsto be sold so as to achieve a perfect hedge wouldbe 1.1(90) equal to Rs.99 crore. Let us supposethe index futures at that time are selling at 4300level. The number of contracts to be sold by thefund manager (assuming a lot size of 50 percon t rac t – Rs.99 c ro re /4300x50 ) i s 4600(rounded off).

At a later date, let us assume that the marketdeclines by 10% and the index future price falls to3900 and the fund manger decides to close out theposition. While due to a 10% fall in the market, thestock portfolio would have declined by 11% i.e.Rs.9.9 crore, the net gain arising from futuresposition will work out to Rs.9.2 crore arrived at asunder:

Purchase price per contract : 50 (4300)Covered Price per contract = 50 (3900)Profit per contract = 50 (400) = 20000Total profit = 4600 (20000) = Rs.9.2 crore

This will reduce the net loss on the hedged portfolioto just Rs.0.7 crore (i.e. 9.9 – 9.2) as against a lossof Rs.9.9 crore had the por t fo l io remainedunhedged.

SR. NO. DERIVATIVE ACTION LIMIT

1 Index futures Buy To the extent of cash / equivalents in the portfolio.Max. limit at 25% of the portfolio.

2 Index futures Sell Up to 25% of equity portion of the fund

3 Index Options – Call Buy To the extent of cash / equivalents in the portfolio.Max. limit at 25% of portfolio

4 Index Options – Call Sell Up to 25% of equity portion of the fund

5 Index Options – Put Buy Up to 25% of equity portion of the fund

6 Index Options – Put Sell To the extent of cash/ equivalents in the portfolio.Max. limit at 25% of the portfolio

7 Stock futures Buy To the extent of cash / equivalents in the portfolio. Max. limitat 25% of portfolio. Per scrip limit at 10% of portfolio.

8 Stock futures Sell To the extent of the particular scrip holding in the portfolio.Per scrip limit 10%.

9 Stock options – Call Buy To the extent of cash/ equivalents in the portfolio. Max. limitat 25% of the portfolio. Per scrip limit at 10% of portfolio.

10 Stock options – Call Sell To the extent of the particular scrip holding in the portfolio.Per scrip limit 10%.

11 Stock options – Put Buy To the extent of the particular scrip holding in the portfolio.Per scrip limit 10%.

12 Stock options – Put Sell To the extent of cash / equivalents in the portfolio. Max. limitat 25% of portfolio. Per scrip limit at 10% of portfolio.


14

The cost which the scheme will have to bear will bethe opportunity cost which will be the interest, in thiscase, on the margin money amount of Rs.9.9 crore(assuming the margin specified by the Exchange is10% of the value of the futures contract) and thebrokerage.

Options:

An option is a derivative instrument which givesits holder (buyer) the right but not the obligationto buy or sell the under lying secur ity at thecontracted price on or before the specified date.The purchase of an option requires an up-frontpayment (premium) to the seller of the option.

There are two basic types of options, call optionand put option.

Call option: A call option gives the buyer of theoption the right but not the obligation to buy a givenquantity of the underlying asset, at a given price(strike price), on or before a given future date.

Put option: A put option gives the buyer of theoption the right but not the obligation to sell a givenquantity of the underlying asset, at a given price(strike price), on or before a given future date.

On expiry of a call option, if the market price of theunderlying asset is lower than the strike price thecall would expire unexercised. Likewise, if, on theexpiry of a put option, the market price of theunderlying asset is higher than that of the strike pricethe put option will expire unexercised.

The buyer/holder of an option can make loss ofnot more that the option premium paid to theseller/writer but the possible gain is unlimited.On the other hand, the option seller/wr iter’smaximum gain is limited to the option premiumcharged by him from the buyer/holder but canmake unlimited loss.

Numerical example to illustrate the risk andreturn ensuing from trading in options.

Selling/Writing a call: Let us consider that afund has stock X in its portfolio, which is quotingat a price of Rs.100 as of today. Now if fundmanager’s target price for the stock X is Rs.120(at which he thinks it is fully valued) in such acase the fund manager may write a call optionon stock X at a str ike pr ice of Rs.120. Thisessentially means that besides selling stock forRs.120 the fund gains additionally in the form ofoption premium (say Rs.2 prevailing at the timeof writing the call). On the negative side if thestock moves up beyond a price of Rs.122 in sucha case the fund will have to deliver/sell the stockloosing out on the upward opportunity (beyondRs.122). The other scenario is that the optionexpires out of the money and the fund will gainthe premium amount.

Buying a Put: If fund manager wants to hedge astock (say quoting at Rs.500), without loosing outon the upward gains that the stock may offer, hemay opt for buying a put option (say for Rs.20 at astrike of Rs.500) instead of selling the stock in thecash market. In such a case the fund manger avoidsa fall in the value of the fund due to any possiblefall in that stock. On the negative side if the marketmoves up the fund looses on the premium. (Rs.20),but continues to be benefited by the appreciation inthe price of the stock.

Pay off from writing a call

Possible price of Gain / OpportunityStock at maturity / Loss on the option

exercise (Rs.) position (Rs.)

80 2

100 2

120 2

130 -8

140 -18

Pay off from buying a put

Possible price of Gain/OpportunityStock at maturity/ Loss on option

exercise (Rs.) position (Rs.)

400 80

450 30

500 -20

550 30

600 80

The above examples are i l lustrative and notexhaust ive. There are var ious poss iblecombinations of strategies, which may be adopted,in a specific situation. The provision for trading inderivatives is an enabling provision and it is notbinding on the Scheme to undertake trading on aday to day basis.

The Fund may use derivative instruments like Stock/Index Futures, Interest Rate Swaps, and ForwardRate Agreements or such other der ivat iveinstruments as may be introduced from time to timefor the purpose of hedging and portfolio balancing,within a permissible limit of 50% of portfolio, whichmay be increased as permitted under the Regulationsand guidelines from time to time.

8 Debt market in India

(i) Debt Instrument Characteristics :

A Debt Instrument is basically an obligation whichthe borrower has to service periodically and generallyhas the following features:


15

Face Value : Stated value of the paper /PrincipalAmount

Coupon : Zero; fixed or floating

Frequency : Semi-annual; annual, sometimesquarterly

Maturity : Bullet, staggered

Redemption : FV ; premium or discount

Options : Call/Put

Issue Price : Par (FV) or premium or discount

A debt instrument comprises of a unique series ofcash flows for each paper, terms of which are decidedat the time of issue. Discounting these cash flows tothe present value at various applicable discount rates(market rates) provides the market price.

(ii) Debt Market Structure :

The Indian Debt market comprises of the MoneyMarket and the Long Term Debt Market.

Money market instruments have a tenor of less thanone year while debt market instruments typicallyhave a tenor of more than one year.

Money market instruments are CommercialPapers (CPs), Cer tif icates of Deposit (CDs),Treasury bills (T-bills), Repos, Inter-bank Callmoney deposit, CBLOs etc. They are mostlydiscounted instruments that are issued at a discountto face value.

Long Term Debt market in India comprises mainlyof two segments viz., the Government securitiesmarket and the corporate securities market.

Government securities includes central, state andlocal issues. The main instruments in this marketare Dated secur it ies (Fixed or Floating) andTreasury bills (Discounted Papers) The CentralGovernment securities are generally issued throughauctions on the basis of ‘Uniform price’ method or‘Multiple price’ method while State Govt. are throughon-tap sales.

Corporate debt segment on the other handincludes bonds/debentures issued by privatecorporates, publ ic sector uni ts (PSUs) anddevelopment financial institutions (DFIs). Thedebentures are rated by a rating agency and basedon the feedback from the market, the issue is pricedaccordingly. The bonds issued may be fixed orfloating. The floating rate debt market has emergedas an active market in the r ising interest ratescenario. Benchmarks range from Overnight ratesor Treasury benchmarks.

Debt derivatives market comprises mainly ofInterest Rate Swaps linked to Overnight benchmarkscalled MIBOR (Mumbai Inter Bank Offered Rate) and

is an active market. Banks and corporate are majorplayers here and of late Mutual Funds have alsostarted hedging their exposures through theseproducts.

Secur i t ised Debt Instruments – Assetsecuritisation is a process of transfer of r iskwhereby commercial or consumer receivables arepooled packaged and sold in the form of financialinstruments. A typical process of assetsecuritisation involves sale of specific Receivablesto a Special Purpose Vehicle (SPV) set up in theform of a trust or a company. The SPV in turn issuesfinancial instruments to investors, which are ratedby an independent credit rating agency. Bank,Corporates, Housing and Finance companiesgenerally issue secur it ised instruments. Theunderlying receivables generally comprise of loansof Commercial Vehicles, Auto and Two wheelerpools, Mortgage pools (residential housing loans),Personal Loan, credi t card and Corporatereceivables.

The instrument, which is issued, includes loans orreceivables maturing only after all receivables arerealized. However depending on timing of underlyingreceivables, the average tenure of the securitizedpaper gives a better indication of the maturity of theinstrument.

(iii) Regulators:

The RBI operates both as the monetary authorityand the debt manager to the government. In its roleas a monetary authority, the RBI participates in themarket through open-market operations as well asthrough Liquidity Adjustment facility (LAF) to regulatethe money supply. It also regulates the bank rateand repo rate, and uses these rates as indirect toolsfor its monetary policy. The RBI as the debt managerissues the securities at the cheapest possible rate.The SEBI regulates the debt instruments listed onthe stock exchanges.

(iv) Market Participants:

Given the large size of the trades, the debt markethas remained predominantly a wholesale market.

Primary Dealers

Primary dealers (PDs) act as underwriters in the primarymarket, and as market makers in the secondary market.

Brokers

Brokers bring together counterparties and negotiate termsof the trade.

Investors

Banks, Insurance Companies, Mutual Funds are importantplayers in the debt market. Other player are Trusts,Provident and pension funds.


16

(v) Types of security issuance and eligible investors:

Issuer Instruments Yields Maturity Investors

Central Dated 5.5%-8% 1-30 years RBI, Banks, Insurance Co, PFs,Government Securities MFs, PDs, Individuals

Central T-Bills 5.0%-5.5% 91/364 days RBI, Banks, Insurance Co, PFs,Government MFs, PDs, Individuals

State Dated Securities 7.0-8.0% 5-13 years Banks, Insurance Co, Provident FundsGovernment

PSUs Bonds 6.5%-7.5% 5-10 years Banks, Insurance Co, PFs, MFs

Corporates Debentures 6.0-8.0% 1-12 years Banks, MFs, Corporates, Individuals

Corporates, Commercial 5.5-6.5% 15 days to 1 yr Banks, MFs, Fin Inst, Corporates,PDs Papers Individuals, FIIs

Banks Certificates of 5.0-7.0% 15 days to 1 yr Banks, Mutual Funds,Deposit Financial Institutions,

Banks Bonds 6.5-8% 5-10 years Banks, Companies, MFs,PDs, Individuals

(vi) Trading Mechanism:

Government Securit ies and Money MarketInstruments.

Negotiated Dealing System (NDS) is an electronicplatform for facilitating dealing and online reportingof transactions. Government Securities (including T-bills), call money, notice/term money, repos in eligiblesecurities, etc. are available for negotiated dealingthrough NDS. Currently G-Sec deals are donetelephonically and reported on NDS.

Corporate Debt-is basically a phone driven marketwhere deals are concluded verbally over recordedlines. The reporting of trade is done on the NSEWholesale Debt Market segment.

VI. UNITS & OFFER1. This scheme shall be called the UTI-Leadership

Equity Fund (UTI-LEF).

2. The scheme is an open-ended equity orientedscheme.

3. The face value of each unit issued under the schemeshall be Rs.10/- and units will be issued in fractionsupto three decimal places.

4. The scheme offers the following options:

a. Growth Option

Ordinarily under this option no dividenddistribution will be made and all accrued andearned income will be ploughed back andreturns will be reflected through growth in theNAV.

b. Dividend Option

Subject to availability of distributable surplusunder the dividend option, dividend will bedistr ibuted at such interval/s as may bedec ided . Under th is Payout andReinvestment facilities are available.

c. Reinvestment facility: Under this facility thedividend distribution in respect of unitholdersunder the Dividend Option (who opt forreinvestment facility) will be re-invested infurther units at the NAV on the record dateless dividend distributed per unit.

In case no op t ion i s ind ica ted in theapplication form, then the default option willbe the growth option.

5. Applicants :

An application for issue of units may be made byany resident or non-resident Indian as well asnon-individuals as indicated below:

(a) a resident individual or a NRI or person ofIndian origin residing abroad either singlyor jointly with another or upto two otherindiv iduals on jo int /anyone or sur v ivorbas i s . An i nd i v i dua l may make anapplication in his personal capacity or inhis capacity as an officer of a Governmentor of a Court,

(b) a parent, step-parent or other lawful guardianon behalf of a resident or a NRI minor. Anapplication cannot be made by an adult andminor jointly,


17

(c) an association of persons or body of individualswhether incorporated or not,

(d) a Hindu Undivided Family both resident andnon-resident,

(e) a body corporate including a company formedunder the Companies Act, 1956 or establishedunder State or Central Law for the time beingin force,

(f) a bank including a scheduled bank, a regionalrural bank, a co-operative bank etc,

(g) an eligible trust including Private Trust beingirrevocable trust and created by an instrumentin writing,

(h) a society as defined under the scheme,

(i) a Financial Institution,

(j) an Army/Navy/Air Force/Paramilitary Fund,

(k) a partnership firm,

(An application by a partnership firm shall bemade by not more than three partners of thefirm and the first named person shall berecognised by UTI AMC for all practicalpurposes as the unitholder. The first namedperson in the application form should either beauthorised by all remaining partners to sign onbehalf of them or the par tnership deedsubmitted by the partnership firm should soprovide.)

(l) FIIs registered with SEBI,

(m) Mutual Funds,

(n) Scient i f ic and Industr ial ResearchOrganisations,

(o) Any other category of investors.

Note: Neither this Offer Document nor the Unitshave been registered in any jurisdiction includingthe United States of America. The distribution ofthis Offer Document in certain jurisdictions may berestricted or subject to registration requirementsand, accordingly, persons who come intopossession of this Offer Document are required toinform themselves about, and to observe any suchrestrictions. No persons receiving a copy of this OfferDocument or any accompanying application form insuch jurisdiction may treat this Offer Document orsuch application form as constituting an invitation tothem to subscribe for Units, nor should they in anyevent use any such application form, unless in therelevant jurisdiction such an invitation could lawfullybe made to them and such application form couldlawfully be used without compliance with anyregistration or other legal requirements. Accordinglythis Offer Document does not constitute an offer orsolicitation by anyone in any jurisdiction in whichsuch offer or solicitation is not lawful or in which the

person making such offer or solicitation is notqualified to do so or to anyone to whom it is unlawfulto make such offer or sol ic i tat ion. I t is theresponsibility of any persons in possession of thisOffer Document and any persons wishing to applyfor Units pursuant to this Offer Document to informthemselves of and to observe, all applicable lawsand Regulations of such relevant jurisdiction.

6. Amount of investment:

(a) Minimum Initial Investment:

Application shall be made for a minimum sumof Rs.5,000/- or such other amount as may bedecided from time to time without any upperlimit.

(b) Subsequent investment under a folio :

Under a folio after the minimum amount of initialinvestment the subsequent minimuminvestment should be Rs.1,000/- and inmultiples of Re. 1/- without any upper limit.

(c) In case of an investment of Rs.50,000/- andabove in the scheme, SEBI has made itmandatory for all the applicants to furnishIncome Tax PAN. An appl icat ion forRs.50,000/- or more without PAN and wheresuch number has been a l lo t ted to theapplicant, will be rejected. Investors arerequired to provide the photocopy (selfattested by the investor) of the PAN cardalong with the appl icat ion form. In theabsence of photocopy of the PAN card, copyof the re fund order issued by the ITdepartment or any communication issued byIT department, wherein PAN of the investoris stated will also be accepted. In case thePAN has not been allotted the same has tobe mentioned in the application form andForm 60/61 has to be submitted by non-holders of PAN. Non residents are exemptedfrom the requirement of PAN and thereforefurnishing of Form 60 is not applicable fornon-residents.

7. Bank account particulars of applicant / member,Electronic Clearing Service (ECS) and directcredit facility

(a) In order to avoid fraudulent encashment ofRedemption cheque/demand draft/DividendDistribution Warrants (DDWs), SEBI has madeit mandatory for unitholders, to furnish theirbank account particulars i.e. nature of account,account number and name and address of thebank branch along with pin code. Theunitholders are also required to furnish the 9digit bank and branch MICR code number inthe application for payment to the bank accountof the unitholder through the various modesas indicated below.


18

(b) The cheques/drafts/DDWs as mentionedabove wil l carry the details of the bankparticulars as given by a unitholder. It isclarified that in the event of non-delivery bythe postal depar tment and/or wrongfulencashment of the said cheques/ drafts/DDWs so mailed, UTI AMC will not at all beliable.

(c) Dividend will be directly sent for credit to theunitholder’s account through ECS where suchfacility is currently available and other centresas and when such facility is made available atthose centres. If, however, the number ofunitholders at any centre are not foundsufficient or for any other reasons it is foundinconvenient to pay through ECS, UTI AMCmay decide to effect the payment by analternate mode like credit to bank account orby issue of Dividend distribution warrants(DDWs) / cheque/draft as may be decidedfrom time to time. Currently, direct credit, ifany, through ECS to the unitholder’s bankaccount is made only if the amount of anysingle instrument does not exceedRs.5,00,000/-.

(d) ECS fac i l i ty is a lso ava i lable to NRIunitholders who have their bank accounts inthe centres where the facility is currentlyavailable or any such other centre as may beadded in future.

(e) Direct Credit facility: This facility can beavailed of by unitholders having accounts withbanks with whom UTI AMC has tied up forparticipating in direct credit. The payment tosuch unitholders will go through the route ofdirect credit to the accounts of the unitholdersmaintained with such banks. The unitholder’saccounts is likely to be credited in one or twodays from the date of processing across thecountry.

8. Minimum target amount to be raised

An amount of Rs.1 crore is targeted to be raisedunder the scheme within the New Fund Offerperiod of the scheme. Over subscription aboveRs.1 crore will be retained in full. If the targetedamount of Rs.1 crore is not subscribed to, UTIAMC shall refund the entire amount collectedunder the scheme by an account payee cheque/refund order or by any other mode of payment asmay be decided by UTI AMC within 42 days fromthe close of the New Fund Offer period of thescheme. In the event of any failure to refund suchamount within 42 days from the close of the NewFund Offer period of the scheme, UTI AMC shallbe liable to pay to the concerned applicant interest@ 15% p.a. or such rate as may be prescribed bySEBI from time to time from the 43rd day of thedate of closure of the New Fund Offer period of

the scheme till the date of despatch of refundorder.

9. Statement of Account:

(a) For each purchase and redemption UTI AMCwill issue a statement of account (SOA)indicating, among other particulars, the dateof acceptance, amount of investment, numberof units issued/ redeemed and the outstandingbalance.

(b) SOA will be a valid evidence of admission ofthe applicant into the scheme. However,where the un i ts are issued subject torealisation of cheque/ draft such issue ofunits will be cancelled if the cheque/ draft isreturned unpaid and treated having not beenissued.

(c) UTI AMC shall endeavour to send the SOAwithin 15 business days from the date ofacceptance of an application but in any case,not later than 30 days therefrom.

(d) The NRI applicant may choose to receive theSOA at his/her Indian/foreign address or atthe address of his/her relative resident inIndia.

(e) UTI AMC shall send the SOA at the addressmentioned in the application form and recordedwith UTI AMC and shall not incur any liabilityfor loss, damage, mis-delivery or non-deliveryof the SOA.

(f) Every un i tho lder w i l l be g iven a fo l ionumber, which will be appearing in SOA forhis initial investment. Fur ther investmentsin the same name(s) and in the same orderwould be registered under the same folio,i f fo l i o number i s men t i oned by t heunitholder.

(g) If a unitholder desires to have a unit certificate(UC) in lieu of SOA the same would be issuedto him within 30 days from the date of receiptof such request.

(h) In case the unit certificate or SOA is mutilated/defaced/lost, UTI AMC may issue a duplicateSOA on receipt of a request to that effect fromthe unitholder on a plain paper or in themanner as may be prescribed from time totime.

10. Switchover :

Unitholders may be permitted to switchover theirinvestment partially or fully to any other scheme/sof UTI MF or vice versa on such terms as may beannounced by UTI AMC from time to time. In caseof partial switchover from one scheme to the otherscheme/s, the condit ion of holding minimuminvestment prescribed under both the schemes hasto be satisfied.


19

11. Book Closure Period/Record Date:

The purchase and redemption of units shall remainopen throughout the year except during bookclosure period/s not exceeding 15 days in a year.Besides, record date/s may be announced ifdividend is distributed.

12. Suspension of Purchase/Redemption:

The Trustee may decide to temporarily suspenddetermination of NAV of the Scheme offered in thisDocument, and consequent ly purchase andredemption of units, in any of the following events:

a) When one or more stock exchanges or markets,which provide basis for valuation for asubstantial portion of the assets of the Schemeare closed otherwise than for ordinary holidays.

b) When, as a result of political, economic ormonetary events or any circumstances outsidethe control of UTI AMC, the disposal of the assetsof the Scheme is not reasonable, or would notreasonably be practicable without beingdetrimental to the interests of the unitholders.

c) In the event of breakdown in the means ofcommunication used for the valuation ofinvestments of the Scheme, without which thevalue of the securities of the Scheme cannotbe accurately calculated.

d) During periods of extreme volatility of markets,which in the opinion of UTI AMC are prejudicialto the interests of the unitholders of the Scheme.

e) In case of natural calamities, strikes, riots andbandhs.

f) In the event of any force majeure or disasterthat effects the normal functioning of the AMCor the Registrar.

g) If so directed by SEBI.

h) The purchase o f un i t s may a lso besuspended if, in the Trustee’s or AMC’sview, increasing the Scheme’s size anyfurther may prove detrimental to the existingunitholders.

In the above eventualities the time limitsindicated above for processing of requests forpurchase and redemption of units will not beapplicable.

The approval of the Board of the AMC andthe Trustee giving details of circumstancesand just i f icat ion for the suspension ofredemptions shall be informed to SEBI inadvance.

13. Automatic Trigger Facility (Not available duringNew Fund Offer period)

a) The following are the four types of TriggerOptions available:

i Value Trigger: As & when the investmentreaches a specified value. For exampleif Rs.10,000/- is invested and themember wants to encash when theinvestment becomes Rs.15,000/-. Thespecified value is Rs.15,000/-.

ii. Appreciation Trigger: On appreciationof capital by an indicated percentage (in whole numbers like 10, 11 etc.). Forexample if an investor invests Rs.10,000/- and wants to encash when the capitalis appreciated by 10% (only appreciationamount) his units will be redeemed at theapplicable redemption price and paid10% of capital appreciation i.e. Rs.1,000/-. He will be paid full redemption valueof his units if he opts for full redemptionof units. Fractions indicated if any will beignored.

iii. Date Trigger: Redemption on anindicated date. For example 30-12-2005.

iv. Stop-loss Trigger : On depreciation ofcapital by an indicated percentage (inwhole numbers like 10, 11 etc.). Forexample i f an investor investsRs.10,000/- and wants to encash whenthe capital is depreciated by 10%, hisful l uni ts wi l l be redeemed at theapplicable redemption price and paid.

b) A separate request for trigger facility has tobe made for each investment in a folio.

c) All Trigger requests will be accepted at UTIFinancial Centres/ Registrars handling thescheme only.

d) Trigger Facility is available to the ‘individual’as well as ‘non-individual’ unitholders uptothe payment value of Rs.10 lakhs per eventper folio (per investor identification number).

e) For fresh applications the trigger will beeffective only after 5 business days from thedate of acceptance in the scheme. Forexisting investors in case of exercising triggerfacility at a later date, trigger facility willbecome operative after a gap of 5 businessdays from the date of receipt of the request.

f) Change / Cancellation of trigger will be effectiveonly after a gap of 5 business days from thedate of receipt of the request.

g) Units under trigger option can be redeemedfully or partially any time. In such event, thetrigger facility will be automatically cancelledand the unitholder will be informed of the same,while sending the redemption cheque.

h) Trigger Facility is not available if the Folio isunder Lien or marked “ STOP ” on the adviceof I.T Authorities / Court or any other reason.


20

i) Once the mandate is given for Automatic TriggerFacility, which involves redemption of units, it willbe treated as full discharge for redemption ofunits, whenever, such opted event takes place.

j) Redemption amount will be paid only to the firstmember as per normal existing practice.

k) The value will be paid by redeeming units at theredemption price prevailing on the day followingthe day of event of trigger in the case of valuetrigger, appreciation trigger and stop-loss triggerand at the redemption price prevailing on thespecified date in the case of date trigger.

l) If the option date as per option (a) (iii) abovehappens to be a holiday, then redemption willbe effected as on the immediate followingbusiness day.

m) Each allotment of Accumulated Income Units(AIUs)/bonus units will be treated as a separateinvestment. Accordingly, a separate Triggerrequest for each allotment has to be made, ifeach AIU/bonus allotment has to be broughtunder Trigger facility.

n) The unitholder holding Unit Certificates has toconvert the unit certificate into Statement ofAccount (SOA) for availing Automatic TriggerFacility. Only after receipt of SOA the requestfor Automatic Trigger Facility can be made.

o) The Automatic Trigger Facility is subject to SEBIRegulations.

p) If the Automatic Trigger selected by theunitholder is not activated and / or implementeddue to reasons which are beyond the controlof UTI AMC, the AMC would not be responsiblefor the same. The AMC may initiate adjustmentsto correct any credit / payment entries orotherwise made in error to a unitholder.

Automatic Trigger Facility is only a facilityextended by the AMC for the convenience ofunitholders and does not form part of thescheme objectives.

The AMC reserves the r ight to amend /terminate this facility at any time, keeping inview business/operational exigencies.

VII. PURCHASE OF UNITS

1. Purchase contract:

(a) The price at which a unit will be sold is hereinafterreferred to as “Purchase Price”.

The contract for purchase of units shall be deemedto have been concluded on the date of acceptanceexcept in case where an application is rejected underclause VII (6) of this offer document.

The purchase price will be arrived at which will be inline with SEBI formula as under: Purchase Price =Applicable NAV *(1 + Purchase Load, if any)

For example:

If the applicable NAV is Rs.10.00, entry load is 2.00percent, then the purchase price will be Rs.10.20.

(b) In respect of all applications for purchase/redemptionreceived and accepted at all Official Point ofacceptance by 3.00 p.m. or such the time as may beprescribed by UTI AMC from time to time on aparticular day the applicable NAV will be that of thesame day. All applications received and acceptedafter 3.00 p.m. or such other time as may beprescribed by UTI AMC from time to time, will begoverned by the NAV of the next business day atMumbai. Accordingly, the application received after3.00 p.m. or such other time as may be prescribedon any business Friday and the applications receivedon Saturdays and Sundays will be at the NAVapplicable for the following Monday. If the followingMonday happens to be a holiday in Mumbai, thenthe NAV applicable for the next business day inMumbai will be applicable.

(c) Non-individual applications along with requireddocuments may be accepted only at UTI FinancialCentres or as may be decided from time to time.

2. For details on Entry Load, please refer SectionVIII (4)

3. Resident applicants – Mode of Payment:

(a) The payment for units by a resident applicanthas to be made either by a cheque or draft orin cash to the extent of amount permissibleunder Income Tax Act or by RBI or by any othermode as may be permitted by UTI AMC.

(b) Cheques / drafts should be drawn on a branchof the bank situated in the city / area of the UTIFinancial Centre/ authorised collection centrewhere the application is tendered / submitted.

(c) The bank draft charges, if any, will have to beborne by the applicant. However for investmentmade from areas where there are no UTIFinancial Centres or Chief RepresentativeCollection Centres/Franchise off ices orauthorised collection centres (where localcheques are accepted), UTI AMC may, if it sodecides, bear draft charges to the extent ofRs.250/- per application or the actual as isprescribed by banks, whichever is lower or suchamount as may be decided by the AMC fromtime to time. The investors have to attach proofof the DD charges paid to a bank (i.e.acknowledgement issued by the bank where DDis purchased). The reimbursement/ adjustmentof DD charges is solely at the discretion of theAMC and in case if it is found that such charges


21

are unreasonably higher than normal marketrates, such charges may not be admissible. Thedraft commission charges will form part ofrecurring expenses of the scheme. However incase of applications received along with localbank draft where the AMC has its FinancialCentre or any other authorised collection centre,bank draft commission will have to be borne bythe investors.

4. NRI applications:

(a) Mode of Payment:

(i) By a rupee draft issued by a bank/exchangehouse abroad on its Indian correspondent bank.

(ii) By a rupee cheque/draft issued out of NREdeposits of the applicant or purchased out ofthe FCNR proceeds or received as a gift fromother NRI out of the donor’s NRE/FCNRdeposits or by a rupee draft purchased by himfrom a bank abroad.

(iii) By a rupee cheque/draft issued out of NROdeposits of the applicant or out of the proceedsof the NRNR/NRSR deposits.

(iv) Nepalese and Bhutanese currencies and cashare not accepted.

Note: Investors may please note that the agent/Chief Representative (CR)/Chief Agent(CA)/Franchise Off ice(FO) of UTI AMC are notpermitted to accept cash. UTI AMC will not beresponsible for such or any other wrong tender.

(b) Submission of applications :

(i) At the NRI branch at Mumbai or DubaiRepresentative Office of UTI AMC or any otherplace/s as may be announced by UTI AMC fromtime to time.

(ii) At any of the Financial Centres of UTI AMC/Franchise office or any other authorisedcollection centre provided applications areaccompanied by a cheque drawn on an NRE /NRO account or by a Rupee draft payable atthe place where the application is submittedand in any other manner as may be prescribed.

In case of NRIs for valid applications receivedwith outstation cheques/ demand drafts notpayable at par at the place where theapplication is received, purchase price of theday on which cheque/demand draft is creditedto the Scheme is applicable.

5. Mode of Payment by FIIs

Investment by FIIs should be through payment bydebit to Special Non-Resident Rupee Accountmaintained with a designated Bank/ authoriseddealer, approved by RBI.

6. Right of UTI AMC to accept or reject applications:

(a) UTI AMC shall have the right to accept and/or toreject at its sole discretion, an application for issueof units under the scheme. An application for issueof units is liable for being rejected under the followingcircumstances which are illustrative in nature:

(i) If an application is received with amount lessthan the minimum prescribed amount ofinvestment;

(ii) If the application has not been signed by thefirst applicant;

(iii) If the application is found to be incomplete inany respect.

(iv) If the bank account particulars as required arenot furnished.

(v) If the applicant is not eligible to invest in thescheme.

(vi) If the cheque/demand draft deposited alongwith the purchase application is rejected andpayment is not received by the AMC.

(vii) If PAN details, as required are not furnished.

(b) Any decision of the AMC about the eligibility orotherwise of a person to make an application underthe scheme shall be final and binding on the applicant.

(c) Refund of application money in a rejected case willbe made without the AMC incurring any liabilitywhatsoever, for interest or any other sum(s) and, atthe cost of the appl icant after the requisi teoperational and other procedural formalities, asprescribed from time to time are complied with.

7. Requirement for admission into the scheme:

(a) An adult, being a parent, step-parent or other lawfulguardian of a minor may hold units and deal withthem on behalf of the minor. Such adult if so requiredshall furnish to the AMC, in such manner as may bespecified, proof of the age of the minor and hiscapacity to hold and deal with units on behalf of theminor. The AMC shall be entitled to act on thestatements made by such adult in the applicationform without any further proof.

(b) The AMC shall be entitled to deal only with the applicantand in the event of his death, the alternate applicantfor all practical purposes and any payment in respectof the units by AMC to the said applicant or the alternateapplicant shall be a good discharge to the AMC.

(c) In the case of non individual applicants such as BodyCorporate, Company, Eligible Institutions, SocietyTrust, Partnership Firm, Banks, etc., no documents/resolution is normally called for, except a declarationin the application itself or separately that “theapplicant is empowered to invest and the signatorieshave necessary authorisation to invest on behalf ofthe applicant.

(d) In the case of non-individual applicants such as BodyCorporate, Company, Eligible Institutions, Society,


22

Trusts, Partnership Firm, Banks, etc., no documents/resolution is normally called for at the time ofredemption, except a declaration in the redemptionapplication itself or separately that “the applicant isempowered to disinvest and signatories havenecessary authorisation to encash units on behalfof the unitholder.”

(e) A firm shall be registered as a unitholder and theSOA shall be made in the name of the firm. In theevent of any change in the constitution of thepartnership firm, the same should be duly intimatedto AMC along with the public notice, if any, issued inthis regard at least within a month from the date ofsuch change in the constitution of the firm.

(f) An individual applying for units in his official capacityshall be issued units in his official name.

8. Units held under false declaration :

(a) Unitholders who come to hold units under a falsedeclaration /certificate shall be liable for having theunitholding cancelled and have their names deletedfrom the register of unitholders.

(b) In such cases the AMC shall have the right to redeemthe outstanding unit holding at par or at NAV,whichever is lower, and deduct therefrom a sum equalto 25% of the redemption price towards penalty.

(c) The AMC will also recover the amount of dividenddistribution, if any, wrongly paid to such persons fromout of the redemption proceeds.

(d) The amount payable to such applicant shall not carryany interest or any other sum irrespective of theperiod it might take to effect the redemption and topay the redemption proceeds.

9. Nomination :

(a) Nomination facility is available to individuals applyingon their own behalf i.e. singly or jointly.

(b) Only one person, resident or NRI, including minors,can be nominated. Nomination can also be in favourof the Central Government, State Government, alocal authority, any person designated by virtue ofhis office or a religious or charitable trust.

(c) Nomination of an NRI is subject to requirements, ifany, prescribed by RBI from time to time.

(d) Nomination can be changed at any time during thecurrency of the investment by the same persons whohave made the nominations.

(e) Unitholder being either parent or lawful guardian onbehalf of a minor and an eligible institution, societies,bodies corporate, HUF, AoPs, BoIs and partnershipfirms shall have no right to make any nomination.

(f) The nominee shall not be a trust (other than a religiousor charitable trust), society, body corporate, partnershipfirm, karta of HUF or power of attorney holder.

(g) On registrat ion of nomination a suitableendorsement shall be made on the statement ofaccount or in the form of a separate letter.

(h) The facility of nomination is available to a unitholderunder SEBI (MFs) Regulations and guidelines issuedby SEBI from time to time.

(i) On cancellation of nominations, the nomination shallstand rescinded.

(j) Where a nomination in respect of any unit has beenmade, the units shall, on the death of the unitholder(s),vest in the nominee and on compliance of necessaryformalities the nominee shall be issued a SOA inrespect of the units so vested subject to any chargeor encumbrance over the said units. Nominee wouldbe able to hold the units provided he is otherwiseeligible to become a member of the scheme.

(k) Where there are two or more unitholders one of whomhas expired the title to units shall vest in the survivingunitholder(s) who may retain the nomination or changeor cancel the same. However, non-expression ofdesire to change or substitute the nominee bysurviving unitholder shall be deemed to be theconsent of surviving unitholder for the existingnomination.

(l) Transmission made by the AMC as aforesaid, shallbe a full discharge to the AMC from all liabilities inrespect of the said units.

10. Systematic Investment Plan (SIP):

Investors should attach the SIP Enrolment Formalong with the Scheme Application Form.

(1) SIP is offered with following Periodicity.

a. Monthly Systematic Investment Plan (MSIP) and

b. Quarterly Systematic Investment Plan (QSIP).

(2) The minimum amount of each investment for SIPis Rs.500/- (for monthly option) and Rs.1,500/-(for quarterly option). Each SIP cheque can beof minimum Rs.500/- or more in multiples ofRs.100/-

(3) The disbursal of SIP cheques could be as under :

Monthly Option Quarterly Option

New investor 1 Cheque of 1 Cheque ofinitial investment initial investment

+ 5 Cheques (Min) + 3 Cheques

Existing unit 6 Cheques (Min) 4 Chequesholder

(4) The first investment cheque could be of any dateand any amount (subject to minimum applicable) andother cheques should be of a uniform date (either


23

This is only an illustrative table and should not inany way be construed as any indication of theperformance of the scheme.

VIII. EXPENSES

1. Initial Issue Expenses

Under the SEBI Regulations, the Mutual Fund isentitled to charge Initial Issue Expenses up to amaximum of 6% of initial resources raised underthe Scheme. The initial issue expenses for theScheme would be amortised over a period of 5years and would be included in the NAV. However,the initial issue expenses over and above the entryload collected shall be charged to the schemesubject to a maximum of 6% of the initial corpuscollected. Any expenditure in excess of this shallbe borne by the AMC. An entry load will be chargedduring the new fund offer for the Scheme which willbe used towards meeting the selling and distributionexpenses as permitted by SEBI (Mutual Funds)Regulations, 1996.

For the information of the investors, the totalexpenses of the Scheme for the new fund offer periodexpressed as a percentage of the aggregate amountexpected to be raised in the New Fund Offer Period,are estimated to be as follows:

1st / 7th / 25th) and uniform amount. However thereshould a gap of minimum-15 days between the 1stInvestment cheque and the subsequent cheques.

(5) The maximum amount for per monthly / quarterlyinstalment (including initial Investment amount)under SIP is Rs. 2 lacs.

(6) Units Allotment: Units will be allotted at NAV basedpurchase price declared on the applicable dates i.e.1st or 7th or 25th of the month. In case the date fallson a non-business day or falls during a book closureperiod, the immediate next business day will be takeninto account for the purpose of determining the price.

(7) Account statement: An account statement will bedispatched to the unitholder normally within 3business days from the date of first transaction / firstcheque realization.

(8) For Systematic Investment Plan (SIP) the exit loadwill be as follows:

Entry Load Exit Load

Nil 2.25 % if withdrawn within two yearsfrom the date of each instalment

(9) The Auto Debit Facility is available as under:

I Auto Debit (Direct Debit) : The Direct DebitFacility is available only with the banks withwhich UTI AMC has tie up for Direct Debit. (AtPresent with UTI Bank Ltd. and ICICI Bank Ltd.)

II Auto Debit (ECS Debit): Currently SIP paymentthrough Electronic Clearing Service (DebitClearing) of the Reserve Bank of India (RBI)is offered only to the investors having bankaccount in select cities.

(10) Investment under SIP is explained by means of thefollowing illustration where the purchase price isassumed.

Description % of theEstimated

Target Amount

Advertising and Marketing 2.75

Commission to Brokers & Agents 2.25

Printing & Dispatch 0.50

Miscellaneous Expenditure 0.50

Total 6.00

Above estimates are based on a corpus of Rs.1crore and would change to the extent assets arelower or higher. The above expenses are subject tochange inter-se and may increase/decrease as peractual and/or any change in regulations.

The initial issue expenses to the extent charged tothe scheme i.e. the permissible 6% of init ialresources raised by the scheme, will be amortisedover a period of five years as permitted under SEBI(Mutual Funds) Regulations, 1996 and would beincluded in the NAV. However the same would notbe included in the NAV for determining theInvestment Management and Trustees Fees. Theabove is as per SEBI Regulat ions includingSchedule VII and X thereof. The same can be furtherillustrated as follows.

Month Amount Purchase No of unitsinvestment invested Rs. Price Rs.* allotted

First 5,000 12.18 410.509

Second 1,000 12.31 81.234

Third 1,000 12.43 80.450

Fourth 1,000 12.20 81.967

Fifth 1,000 11.69 85.543

Sixth 1,000 11.32 88.339

Seventh 1,000 12.95 77.220

Eighth 1,000 13.08 76.452

Ninth 1,000 13.21 75.700

Tenth 1,000 13.05 76.628

Eleventh 1,000 13.49 74.128

Twelfth 1,000 13.62 73.421

* Assumed pricesAverage price = Rs.12.48 per unit


24

Illustration:

UTI-LeadershipEquity Fund

Face Value of Units A 10.00(Rs. Per unit)

Entry load (% of face value) B 2.25

Entry load (Rs. of face value) C 0.225

Issue Price (A+C) D 10.225

Max IPO (Expenses - 6%) E 0.60(A*6%)

IPO expenses to be borne out of F 0.225entry load

IPO expenses to be borne by the G 0.3750scheme (E - F)

Amount available for investment H 9.6250(D - F - G)

Amortisation of IPO expenses I 0.000205per day (Rs. per unit)

Balance IPO expenses carried J 0.3748forward (Rs. per unit) (G - I)

NAV on day one (A-I) K 9.9998*

*Assuming that there is no fluctuation in value of underlyingassets and before accrual of management fees and otherrecurring expenses

(b) Initial issue expenses for past schemes

The initial issue expenses UTI-Thematic Fund launchedin March 2004 were borne by UTI-AMC.

2 Recurring expenses:

(a) The following estimated expenses incurred underthe respective heads wil l be charged to thescheme/s on a recurring basis. The estimate issubject to change inter se as per actual expensesincurred during any year.

Items % of average

daily net assets

Investment Management and 1.25Advisory Fees

Printing, stationary, postage etc. 0.25

Custodial Fees 0.25

Registrars Fees & Processing 0.25Charges including stamp duty,if any

Marketing & Sales Promotion 0.50

Total 2. 50

The purpose of the table is to assist the investor inunderstanding the various costs and expenses thatan investor in the scheme will bear directly orindirectly.

(b) The total annual recurring expenses of the schemeexcluding redemption expenses but including theinvestment management and advisory fees shall besubject to the following limits:

(i) On the first Rs.100 crore of the average dailynet assets of the scheme- 2.50%

(ii) On the next Rs.300 crore of the average dailynet assets of the scheme- 2.25%

(iii) On the next Rs.300 crore of the average dailynet assets of the scheme- 2.00%

(iv) On the balance of the assets of the scheme -1.75%

3. Fees

The Investment management and advisory fees will notexceed the limits specified under clause 2 of regulation52 of SEBI (MFs) Regulations, 1996, namely:

(i) One and quarter of one percent of the daily averagenet assets outstanding in each accounting year forthe scheme as long as the net assets do not exceedRs.100 crores, and

(ii) One percent of the excess amount over Rs.100crores, where net assets so calculated exceedsRs.100 crores.

4. Maximum Applicable Entry and Exit Load

(a) The purchase and redemption pr ices wil l bearrived at which will be in line with SEBI formulaas under:

Purchase Price = Applicable NAV *

(1 + Purchase Load, if any)

Redemption Price = Applicable NAV *

(1 - Exit Load, if any)

The scheme will offer purchase and redemption of unitsat NAV based prices on every business day on an on goingbasis commencing not later than 30 days from the closureof the new fund offer period.

The units will be sold and redeemed on an on-going basisat applicable NAV based prices. As per SEBI regulations,the maximum total transaction expenses of the Schemethat may be levied on the unitholder and expressed as apercentage of the amount of the Scheme’s NAV, areestimated to be as follows :


25

At present, the Fund intends to charge the following load,till subsequently changed:

(i) During New Fund Offer period and continuous offerperiod the following load structure would apply

The redemption price shall not be lower than 93% of NAVand the purchase price shall not be higher than 107% ofthe NAV and the difference between the redemption priceand purchase price shall not exceed 7% of the purchaseprice.

The AMC reserves the right to change/modify entry/exit/switchover load, depending upon the circumstancesprevailing at any given time. A load structure whenintroduced by the AMC may comprise of an entry loadand/or exit load and/or switchover load as may bepermissible under the SEBI Regulations. The load mayalso be changed from time to time and in the case of anexit/redemption load this may be linked to the period ofholding, while in the case of entry load this may be linkedto the amount of investment. The switchover load may bedifferent for different plans and the switchover load may bedifferent from the entry and/or exit load charged forpurchase and /or redemption of units. The load chargedcould also be different as regards the amount/tenor ofinvestment, etc. However, any such change in the loadstructure shall be applicable on prospective investment only.

(b) All loads for the scheme shall be maintained in aseparate account and may be utilised towardsmeeting the selling and distribution expenses. Anysurplus in this account may be credited to thescheme, whenever felt appropriate by the AMC.

(c) Any imposition or enhancement of load in future shallbe applicable on prospective investments only. Atthe time of changing the load structure, the MutualFund shall consider the following measures to avoid

Type of transaction Load upto% of NAV

Maximum Purchase Load 7imposed on sale

Purchase Load, if any, on issueof units in lieu of dividends Nil

Contingent deferred redemption/purchase load Nil

Maximum Redemption load 7

Maximum Switchover/Exchange At applicable entry-fee exit loads for

respective schemes

Application Size Entry Load Exit LoadAs % of NAV As % of NAV

< Rs. 2 crores 2.25 Nil

=> Rs. 2 crores Nil 0.50 % if exitedwithin 6 monthsfrom the date ofallotment#

# Applicable only during New Fund Offer period

complaints from investors about investment in thescheme without knowing the loads:

(i) The addendum detailing the changes shall beattached to the offer documents and abridgedoffer documents. The addendum shall becirculated to all the distributors/brokers so thatthe same can be attached to al l offerdocuments and abridged offer documentsalready in stock. The addendum shall be sentalongwith the communication sent to theunitholders immediately after the changes.

(ii) Arrangements shall be made to display thechanges/modifications in the offer document inthe form of a notice in all the official points ofacceptance and distributors/brokers office.

(iii) The introduction of the exit load alongwith thedetai ls may be stamped in theacknowledgement slip issued to the investorson submission of the application form and shallalso be disclosed in the statement of accountsissued after the introduction of such load.

(iv) Any other measures which the Mutual Fundmay feel necessary.

IX. TRANSFER/PLEDGE/ASSIGNMENT OF UNITS

1. Units issued under UTI-Leadership Equity Fund arenot transferable.

2. However, “Pledge/Assignment of units permittedonly in favour of banks/other f inancialinstitutions as follows :

The unitholders may pledge/assign units in favourof banks/other financial institutions as a security forraising loans. Units can be pledged by completingthe requisite forms/formalities, as may be required,whereupon UTI AMC will record a pledge/charge/lien against units pledged. As long as the units arepledged, the pledgee bank/financial institution willhave complete authority to redeem such units. Thepledger will not be allowed to redeem units sopledged until the bank/financial institution to whichthe units are pledged provides a written authorisationto the AMC that the pledge/charge/lien may beremoved. However if pledged units are received forredemption, from the unitholder, the AMC has a rightto redeem such units.”

3. Further, if a person becomes a holder of units undera scheme by operation of law or due to death,insolvency or winding up of the affairs of unitholderor survivors of a joint holder then subject toproduction of such evidence which in the opinion ofUTI AMC is sufficient, UTI AMC may effect thetransfer if the intended transferee is otherwise eligibleto hold units. Transfer of units in such cases will besubject to compliance of operational requirementsas may be specified by UTI AMC from time to time.


26

X. DIVIDEND DISTRIBUTION& CAPITALISATION

1. The unitholder shall have a choice to join either theGrowth Option or the Dividend Option.

(a) In cases where neither of the options isexercised by the applicant/unitholder at thetime of making his investment or subsequentlyhe will be deemed to be under the GrowthOption and his application will be processedaccordingly.

(b) The provisions of the scheme will apply to boththe options and only where any provision variesdetails thereof will be indicated separately.

(c) NAV of Dividend Option and Growth Option willbe different after the first dividend distribution.

2. Growth option

Ordinarily no dividend distribution will be made underthis option.

All income generated and profits booked will beploughed back and returns shall be reflected throughthe NAV.

3. Dividend Distribution

(a) Dividend distribution, if any, under the schemewil l be made subject to avai labi l i ty ofdistributable surplus and other factors and adecision is taken by the Trustee to makedividend distribution.

(b) There is no assurance or guarantee to theunitholders as to the rate of dividenddistribution.

(c) Though it is the intention of the scheme to makeperiodical dividend distribution, there may beinstances when no dividend distribution couldbe made.

(d) Such of the unitholders whose names appearin the register of unitholders as at the recorddate fixed for each dividend distribution shallbe ent i t led to receive the dividend sodistributed.

(e) Presently, dividend distribution will be madethrough ECS or direct credit to the unitholder’saccount where such facility is available and atother places by issue of a dividend distributionwarrant.

(f) Dividend distribution warrants, when issued,shall have validity for a period of two months,or such other period as may be decided by UTIAMC from time to time.

(g) Despatch of the dividend distribution warrantsor payment through other modes shall be made

not later than 30 days from the date of eachdeclaration/ or within such number of days asmay be prescribed by SEBI. UTI AMC shall notbe bound to pay interest in the event of any ofthe warrant(s) reaching the unitholders afterthe expiry of its validity period or in the eventof that becoming stale.

(h) Dividend Distr ibut ion to NRI and FIIunitholders :

Payment of dividend distribution to NRI and FIIunitholders wil l be made in the mannerindicated under clause XIII (10) and (11)subject to compliance with the requirementsprescribed by RBI from time to time.

4. Capitalisation and issue of bonus units

(a) The Trustee may uti l ise any sums fromreserves, unit premium or any such reservesincluding the amount of distributable surplusesof the scheme for issue of Bonus units.

(b) Bonus units may be issued under the scheme,as may be decided by the Trustee from time totime.

(c) Bonus units, when issued, will be in proportionto the unit holding of the unitholder as on therecord date to be fixed for that purpose.

(d) The Trustee may accordingly makeappropriations and applications of the sumdecided by it to be so capitalised by allotmentand issue of fully paid-up units as bonus units,and generally do all acts and things requiredto give effect thereto.

(e) The bonus units so allotted and issued asaforesaid wi l l as regards r ights andentitlements rank pari passu with the units inexistence on the record date in respect of whichthey are allotted and issued to all intents andpurposes.

(f) Interest created / options exercised by aunitholder on the units under a folio by way ofnomination, if any, will automatically apply tothe bonus units.

(g) Pursuant to allotment of bonus units the NAVof the scheme would fall in proportion to thebonus units allotted and as a result the totalvalue of units held by the unitholder wouldremain the same.

5. Rollover facility

Rollover facility offers a facility to unitholders toredeem entire or a part of their outstanding unitholding and simultaneously investing the entireproceeds or upto face value of units redeemed onthe rollover date at the same NAV in the samescheme. No load will be required to be paid onredemption proceeds to the extent of amount


27

invested under the rollover facility. This facilityenables the unitholders to recognise the capitalappreciat ion as income/gain in their booksperiodically in a tax efficient manner.

XI. REINVESTMENT OF DIVIDENDDISTRIBUTED

1. Unitholders if they so desire, will have facility toreinvest the dividend payable to them, into furtherunits of the scheme.

2. On exercising of such an option the full amount ofsuch dividend payable to any unitholder, afterdeduction of tax, if any, shall be reinvested intofurther units of the scheme at the NAV as on therecord date less dividend per unit declared.

3. The reinvestment, if any, shall be treated asconstructive payment of dividend to the unitholdersas also constructive receipt of payment of the amountby the unitholders.

4. Applicants desiring to opt for the reinvestment ofdividend distribution at the time of joining the schememay indicate the same on the application.

5. The unitholders can also opt for reinvestment ofdividend distribution at a later date by giving asuitable application on a plain paper or by filling upthe prescribed composite service form or in suchother manner as may be prescribed from time to time.

6. Unitholders who have opted for a particular mode ofpayment will continue to receive dividend distributionunder the mode opted for, till such time the mandateis revoked by them in writing within such period asmay be decided by UTI AMC from time to time.

XII. REDEMPTION OF UNITS1. Redemption Price: The redemption price under the

scheme will be arrived at which will be in line withSEBI formula as under:

Redemption Price = Applicable NAV *(1 - Exit Load, if any)

Example: If the applicable NAV is Rs.10.00; and theredemption load is 2 percent then the redemptionprice will be Rs.9.80.

2. For details on exit load, please refer to SectionVIII (4) for details.

3. Operational & other details of Redemption

The contract for redemption shall be deemed tohave been concluded on the date of acceptance ofthe redemption request duly completed in allrespects.

Explanation for ‘duly completed’ - An application willbe considered as duly completed if the sole holder(in the case of single holding) or all the holders (in

the case of joint holdings) or one of the holders (inthe case of anyone or survivor holdings) havesigned the redemption application and havealongwith this submitted the relevant SOA / UnitCertificate/s.

4. Redemptions under the scheme will be openthroughout the year except during the book closureperiod/s not exceeding 15 days in a year or suchperiod as may be decided by SEBI from time totime.

5. Redemption applications can be deposited at allOfficial points of acceptance. UTI AMC may add ordelete any authorised centre. Unitholders have tocompulsorily furnish their bank account details in theapplication for redemption.

6. In respect of all applications for redemption receivedand accepted at all official points of acceptance, by3 p.m. or such other time as may be prescribed bythe AMC from time to time on a particular day theapplicable NAV will be that of the same day. Allapplications received and accepted after 3 p.m. orsuch other time as may be prescribed by the AMCfrom time to time, will be governed by the NAV ofthe next business day. Accordingly, the applicationreceived after 3.00 p.m. or such other time as maybe prescribed on any working Friday and theapplications received on Saturdays and Sundays willbe transacted at the NAV applicable for the followingMonday. If the following Monday happens to be anon-business day in Mumbai, then the NAVapplicable for the next business day wil l beapplicable.

7. Redemption will be effected on receipt of the unitcertificate / Statement of Account alongwith theredemption request slip / composite service form orsuch document duly completed in all respects as maybe prescribed from time to time.

8. Cheque for redemption proceeds shal l bedespatched within 10 business days from the dateof receipt of an application on the redemption slip /composite service form or any such other documentas may be prescribed from time to time at the officialpoints of acceptance which are complete in allrespects. In the event of any delay in despatch ofredemption cheque beyond 10 business days fromthe date of receipt of the redemption application atthe processing centre, UTI AMC shall pay interest@ 15% p.a. or at such rate as may be prescribed bySEBI from the 11th business day to the date ofdespatch.

9. Partial redemption under a folio shall be permittedsubject to the unitholder maintaining the prescribedminimum balance to be reckoned with reference tothe redemption price applicable as on the date ofacceptance of the redemption application. Where thebalance amount so calculated is found to be lessthan the prescribed minimum balance, UTI AMC may


28

compulsorily redeem the entire outstanding holdingof the unitholder without any fresh application forredemption of the balance holding and pay theproceeds to the unitholder.

10. No interest shall, on any account, except under subclause 8 above be payable on the amount ofredemption due to the applicant as prescribed bySEBI.

11. The receipt of the unitholder for any moneys paid tohim in respect of the units indicated in the unitcertificate / SOA shall be a good discharge to theMutual Fund.

12. The cost of remittance or of realisation of cheque ordraft sent by UTI AMC shall be borne by theapplicant.

13. In case of NRI unitholders, redemption proceeds willbe paid in the manner indicated in clause XIII (10).

14. In case of FII’s, redemption proceeds will be paid /remitted depending upon the source of investmentas mentioned in XIII (11).

15. Unitholders desiring redemption of dematerialisedunits should fill in the redemption request form (RRF)available with his Depository Participant (DP) andsubmit it to the DP.

16. Restrictions on purchase and redemption ofunits:

Notwithstanding anything contained in any provisionof the scheme, UTI AMC shall not be under anyobligation to sell or redeem units:

i) If it is not a business day as announced by UTIAMC for this scheme.

ii) During book closure period/s, if any, (notexceeding 15 days in a financial year) whenthe register of unitholders is closed for anypurpose as notified by UTI AMC and

iii) On such days which the Trustee decides not tosell / redeem units as indicated in clause VI(11).

17. Settlement of Claim

(a) In the event of the death of the unitholder, the jointholder(s)/nominee/legal representative of theunitholder may, if he is otherwise eligible for joiningthe scheme as unitholder, be permitted to hold theunits and become a unitholder. In that event a freshSOA will be issued in his name in respect of units sodesired to be held by him subject to his complyingwith the condition of minimum holding and therequired procedure as may be prescribed by UTIAMC from time to time.

(b) If the joint holder/nominee/ legal representative ofthe unitholder is not eligible to join the scheme or hethough eligible, opts for redemption and also in caseswhere no nomination has been made, the claimant

(i.e. joint holder/nominee/legal representative of theunitholder, as the case may be) on surrender of UnitCertificate / the latest SOA or any such otherdocument, as may be prescribed from time to time,issued to the deceased unitholder and on duecompliance with the procedural requirements, asmay be prescribed by UTI AMC for recognition ofsuch claims, he shall be paid redemption proceedsof the units outstanding to the credit of the deceasedunitholder as on the date of such acceptance.

18. Right to limit Redemption:

The Trustees may, in the general interest of theunitholders of the Scheme offered under this OfferDocument and keeping in view the unforeseencircumstances/unusual market conditions, limit thetotal number of units which may be redeemed onany business day to 5% of the total number of unitsthen in issue, or such other percentage as may bedetermined.

Any units, which by virtue of these limitations arenot redeemed on a particular business day, will becarried forward for redemption to the next businessday, in order of receipt by the AMC. Redemption socarried forward will be priced on the basis of theapplicable NAV of the business day on whichredemption is made. Under such circumstances, tothe extent multiple redemption requests are receivedat the same t ime on a single business day,redemptions will be made on a pro-rata basis, basedon the size of each redemption request, the balanceamount being carried forward for redemption to thenext business day (s).

In case a unitholder redeems units soon after makingpurchases the redemption cheque may not bedespatched until sufficient time has elapsed toprovide reasonable assurance that cheques or draftsfor units purchased have been cleared.

The approval of the Board of Directors of the AMCand the Trustees giving details of circumstances andjustification for the restriction of redemption shall alsobe informed to SEBI in advance.

19. Unclaimed Redemption/Dividend Amount:

The unclaimed redemption amounts and dividendamounts may be deployed by the mutual fund in callmoney market or money market instruments and theinvestors who claim these amounts during a periodof 3 years from the due date shall be paid at theprevailing net asset value. After a period of 3 years,this amount will be transferred to a pool account andthe investors can claim the amount at the NAVprevailing at the end of the 3rd year. The incomeearned on such funds will be used for the purposeof investor education. The AMC will make continuousefforts to remind the investors through letters to taketheir unclaimed amounts. Further, the investmentmanagement fee charged by the AMC for managingunclaimed amounts shall not exceed 50 basis points.


29

XIII. TERMINATION/WINDINGUP OF THE SCHEME

1. The winding up/termination of the scheme shall begoverned by SEBI (Mutual Funds) Regulation, 1996.In case of any inconsistency contained in theprovisions of this offer document with the SEBI(Mutual Funds) Regulations, 1996, the SEBI (MF)Regulations shall prevail.

2. UTI-Leadership Equity Fund is an open-endedscheme. The Trustee may, however, terminate/windup the scheme under the following circumstances:

a. on the happening of any event which in theopinion of the Trustee requires the scheme tobe wound up; or

b. if 75% of the unit holders of the schemes passa resolution to the effect that the scheme bewound up; or

c. if the SEBI so directs in the interest of the unitholders of the scheme; or

d. if the outstanding unit holding falls below a limitto be decided by the Trustee.

3. Where the scheme is wound up/terminated inpursuance of sub clause (1) above, The Trustee shallgive notice of the circumstances leading to thewinding up/ termination of the scheme to SEBI andalso in two daily newspapers having circulation allover India and also in a vernacular newspapercirculating in Mumbai before the termination/windingup is effected as st ipulated in SEBI (MFs)Regulations from time to time.

4. On and from the date of advertisement indicatingthe termination/winding up, the AMC shall cease tocarry on any business activities in respect of thescheme and cease to issue, redeem and cancel unitsin the scheme.

5. The Trustee shall call a meeting of the unit holdersof the scheme to consider and pass necessaryresolution by simple majority of the unit holderspresent and voting at the meeting for authorising theTrustees or any other person to take steps fortermination/winding up of the scheme.

6. The Trustee or the person authorised under subclause (4) shall dispose of the assets of thescheme in the best interest of the unit holders ofthe scheme.

7. The proceeds of sale made in pursuance of subclause (5) above, shall, in the first instance be utilisedtowards discharge of such liabilities as are properlydue under the scheme and after making appropriateprovision for meeting the expenses connected withsuch winding up.

8. The balance shall be paid to the unit holders of thescheme in proportion to their respective interest in

the assets of the scheme as on the date when thedecision for winding up/termination was taken.

9. UTI AMC shall pay the redemption value, as earlyas possible but not later than 10 business days afterthe date of duly discharged unit certificate / SOAalongwith the redemption request or any other typeof document as may be prescribed from time to time,duly discharged has been received by it at theprocessing centre and/or other procedural andoperational formalities are complied with. The SOA,the redemption request and other forms, if any, shallbe retained by UTI AMC for cancellation. UTI AMCmay at its discretion dispense with the requirementof calling back the unit certificate/ SOA.

10. Currently redemption / terminal proceeds can be paidto NRI unit holders in the manner indicated below:

a. Where units had been purchased by the unitholders while he was a resident in India or outof funds held in his NRO Account or out ofproceeds from his NRSR/ NRNR deposits, theproceeds can be sent to his bankers in India inrupees for credit to his NRO account.

b. If the investment had been made by the unitholders out of funds in his NRE account or fromproceeds of FCNR deposits or by rupee draftpurchased from a bank / exchange houseoperating abroad or received as gift fromanother NRI out of the donor’s NRE /FCNRaccount or by rupee draft purchased by him/her from a bank abroad, the redemptionproceeds could be credited to his NRE / NROaccount provided he continues to be an NRI atthe time of redemption.

c. In other cases payment will be made in rupeesfor credit to his NRO account.

11. Where units were acquired by an FII out of its specialNon-Resident Rupee Account maintained in Indiathe termination proceeds will be drawn payable tothe same/similar Non-Resident Rupee Accountmaintained in India by the FII.

12. On completion of the winding up/termination, theTrustee shall forward to the SEBI and the unit holdersof the scheme a report on the winding up containingparticulars such as circumstances leading to thewinding up/termination, the steps taken for disposalof assets of the scheme before winding up/termination, expenses of the scheme for winding up/termination, net assets available for distribution tothe unit holders and a certificate from the auditorsof the scheme.

13. Notwithstanding anything contained herein above,the applicability of the provisions of SEBI (MFs)Regulations in respect of disclosures of half yearlyreports and annual report shall continue until windingup/termination is completed or the scheme ceasesto exist.


30

14. After the receipt of the report referred to in item (12)above, if the SEBI is satisfied that all measures forwinding up/termination of the scheme has beencompleted, the scheme shall cease to exist.

XIV. INTER SCHEME TRANSFERS

Transfer of investments from /to the scheme to/fromanother scheme/s/plan/s of UTI Mutual Fund shall be doneonly if-

(a) such transfers are on spot basis and are at theprevailing market price for traded instruments.

Explanation : “spot basis” shall have the samemeaning as specified by the stock exchanges for spottransactions.

(b) the securities so transferred are in conformity withthe investment objective of the scheme/s/ plan/s towhich such transfers are made; and

(c) The Mutual Fund shall not transfer illiquid securitiesfrom/to the scheme to /from other schemes/plans ofthe Mutual Fund. Illiquid securities are defined asnon-traded, thinly traded and unlisted equity shares.

(d) NPAs of other schemes will not be acquired by thescheme.

XV. ASSOCIATE TRANSACTIONS& BORROWINGS

1. Associate Transactions:

a) For the period February 1, 2003 to September30, 2005 -

(i) Underwriting obligation taken by scheme in respectof issues of securities of associate companies – NIL

(ii) Devolvement – NIL

(iii) Subscription in issues lead managed by associatecompany.

For the period April 1, 2005 to September 30, 2005:

Date Name of Co. Instruments Type of issue Amt. Invest. (Crs) Lead Manager

25-04-05 Allahabad Bank Equity Public Issue 28.70 SBI Capital Mkt. Ltd.

28-06-05 Provogue (India) Ltd. Equity Public Issue 1.20 SBI Capital Mkt. Ltd.

22-07-05 Syndicte Bank Equity Public Issue 1.32 SBI Capital Mkt. Ltd.

03-08-05 IDFC Equity Public Issue 16.31 SBI Capital Mkt. Ltd.

20-09-05 Union Bank Tier-II Unsecured Non Private 25.00 UTI Bank Ltd.Convertible Bonds Placement

For the period April 1, 2004 to March 31, 2005:


16-12-04 Bharti Shipyard Ltd. Equity IPO 2.30 SBI Capital Mkt. Ltd.

29-01-05 Dena Bank Equity IPO 10.66 SBI Capital Mkt. Ltd.

04-03-05 Karnataka Bank Equity Rights Issue 0.83 SBI Capital Mkt. Ltd.


10-09-03 UCO Bank Equity IPO 28.92 SBI Capital Mkt. Ltd.

13-09-03 I O B Equity IPO 26.73 SBI Capital Mkt. Ltd.

17-10-03 Vijaya Bank Equity IPO 55.38 SBI Capital Mkt. Ltd.

04-03-04 Bank of Maharashtra Equity IPO 7.99 SBI Capital Mkt. Ltd.

05-03-04 IPCL Equity IPO 9.22 SBI Capital Mkt. Ltd.

17-03-04 Power Trading Corp. Equity IPO 1.68 SBI Capital Mkt. Ltd.

18-03-04 LNG Petronet Equity IPO 10.50 SBI Capital Mkt. Ltd.

For the period February 1, 2003 to March 31, 2004


31

(iv) Subscr iption to any issue of debt on pr ivateplacement basis where the sponsor or its associatecompanies has acted as arranger or manager -NIL

b) All investments by the scheme in any of thesponsor companies or its associate companieswo u l d b e m a d e i n a c c o r d a n c e w i t h t h einvestment objectives and investment patternas described in the offer document. All suchinvestments by the scheme would be made inaccordance wi th the SEBI (Mutua l Funds)R e g u l a t i o n s , 1 9 9 6 . A l l s u c h i n ve s t m e n ttransactions wil l be at the prevail ing marketprices/yields and wil l be carr ied out as normalmarket operations.

Rs. in crores

Market Value of investment 1009.01

AUM of UTI MF 24969.12

Invt. as % to AUM 4.04

Broker Name Business Percentage to Brokerage paid Percentage to total(Rs. in cr.) total business (Rs. in cr.) brokerage

SBI Capital Markets Ltd. 394.63 1.35 0.45 2.16

February 1, 2003 to March 31, 2004.

As on 30th September 2005, no scheme of UTIMutual Fund has invested more than 25% of its netassets in group companies.

d) (i) Total business given to associate brokers andthe percentage of brokerage paid to them forthe period

c) Aggregate market value of investments in sponsorsand group companies of the sponsors (as on 30th

September 2005):

The rate of brokerage paid to them is in line with what is paid to non-associate brokers and the quantum of businessshall be subject to the limits prescribed by SEBI.

(ii) Marketing, purchase and distribution of the units of the Schemes of UTI Mutual Fund. Currently services of PNBGilts Ltd., SBI Capital Markets Ltd. and UTI Technology Services Limited are used for marketing and distributingthe schemes. The AMC shall also ensure that the commission paid to associate brokers for the purchase anddistribution of units is at the same rates offered to the other distributors.

April 1, 2004 to March 31, 2005.



April 1, 2005 to September 30, 2005.



Commission paid to associates for the period February 2003 to March 2004 (unaudited)

Name of the Associate Amt. of commission pd.

P N B GILTS LTD 751804.10

S B I CAPITAL MARKETS LTD 2004025.88

U T I TECHNOLOGY SERVICES LTD 6259.84

TOTAL 2762089.82


32

e) Subject to the Regulations, the Sponsors, the Mutual Funds managed by them, their associates and the AMC mayacquire units of the scheme. The AMC shall not be entitled to charge any fees on its investments in the scheme.

2. Borrowings:

(a) The scheme shall not borrow except to meet temporary liquidity needs of the scheme for the purpose of redemptionof units or payment of interest or dividend to the unitholders.

Provided that the scheme shall not borrow more than 20% of the net assets of the scheme and the duration ofsuch a borrowing shall not exceed a period of six months.

(b) There have been no borrowings by the schemes of UTI Mutual Fund since 1st February 2003.

Commission paid to associates for the period April 2005 to June 2005: (unaudited)



Commission paid to associates for the period April 2004 to March 2005: (unaudited)


P N B GILTS LTD 158509.41


U T I TECHNOLOGY SERVICES LTD 145515.32

TOTAL 4076135.00


33

XVI. CORPORATE INVESTMENTS IN SCHEMES OF UTI MUTUAL FUNDAND INVESTMENTS BY SCHEMES OF THE MUTUAL FUND IN SUCH CORPORATES.

THE DETAILS OF INVESTMENTS MADE IN COMPANIES, WHICH HAVE INVESTED MORE THAN 5% OF THE NAVOF A SCHEME IN TERMS OF REGULATION 25(11) OF SEBI (MFs) REGULATIONS, 1996 AS ON 30TH SEPTEMBER2005 ARE GIVEN HEREUNDER : (UNAUDITED)

ALLAHABAD BANK UTI-Growth Sector Fund - UTI-Unit Scheme - 71 47.18 81.10Brand Value

UTI-Banking Sector Fund UTI-Master Plus Unit Scheme 8.30 16.07

UTI-Mastergrowth 0.00 2.31

UTI-Senior Citizens Unit Plan 18.87 0.00

UTI-Childrens Career Balanced Plan 47.18 47.91

UTI-Retirement Benefit Pension Fund 9.44 9.58

UTI-Balanced Fund 14.16 14.37

UTI-Money Market Fund 9.44 9.58

UTI-Bond Fund 0.00 47.42

UTI-Growth Sector Fund - Services 2.82 0.00

UTI-Unit Scheme 2002 18.87 14.37

UTI-Liquid Cash Plan 560.37 272.87

UTI-Banking Sector Fund 6.96 5.65

UTI-PSU Fund 0.00 0.14

UTI-Liquid Advantage Fund 10.00 0.00

UTI-Floating Rate Fund STP 212.31 105.39

BHARTI TELE-VENTURES LTD. UTI-Liquid Short Term Plan UTI-Unit Scheme - 71 81.72 168.23

UTI-C.R.T.S. 1981 15.33 12.74

UTI-Mastershare Unit Scheme 10.20 47.72

UTI-Equity Fund 56.28 64.80


UTI-Index Select Equity Fund 3.04 3.41

UTI-MNC Fund 4.45 7.33

UTI-Master Index Fund 2.49 1.40

UTI-Growth Sector Fund - Brand Value 4.41 5.09


UTI-Equity Tax Savings Plan 4.64 5.06

UTI-Nifty Index Fund 3.12 1.95

UTI-Variable Investment Scheme 1.45 0.63

UTI-Master Equity Plan Unit Scheme 33.15 53.35

UTI-Sunder 0.23 1.09

UTI-Large Cap Fund 1.36 1.67

UTI-Basic Industries Fund 9.47 6.40

UTI-Growth & Value Fund 4.50 3.74

UTI-Index Advantage Fund (NIFTY) 0.02 0.00

UTI-Index Advantage Fund (SENSEX) 0.01 0.00

UTI-Dynamic Equity Fund 2.52 0.00

Company which has Scheme(s) in which Scheme (s) investment Aggregate cost of Holding as at

invested more than 5% companies have invested in the Company acquisition 30 th September

of the Net Assets more than 5% of the during the 2005 at

net assets applicable period Fair/ Market Value

(Rs. in Crores) (Rs. in Crores)


34

Company which has Scheme(s) in which Scheme (s) investment Aggregate cost of Holding as atinvested more than 5% companies have invested in the Company acquisition 30 th September

of the Net Assets more than 5% of the net during the 2005 atassets applicable period Fair/ Market Value


UTI-MIS Advantage Plan 0.12 0.52

UTI-Opportunities Fund 29.22 0.00

CHENNAI PETROLEUM CORP UTI-Money Market Fund UTI-Mastergrowth 2.42 0.00LTD

UTI-Growth Sector Fund - Petro 3.75 1.34



CMC LTD. UTI-Retirement Benefit Pension Fund 2.18 0.00


UTI-Mid Cap Fund 1.75 0.00

FINOLEX CABLES LTD. UTI-Liquid Short Term Plan UTI-Mastershare Unit Scheme 0.00 6.75

FINOLEX INDUSTRIES LTD. UTI-Liquid Short Term Plan UTI-Retirement Benefit Pension Fund 1.99 1.34


GRASIM INDUSTRIES LTD. UTI FMP - Yearly Series July 05 UTI-Unit Scheme - 71 106.11 127.56

UTI-C.R.T.S. 1981 2.16 0.00


UTI-Master Plus Unit Scheme 0.28 26.43







UTI-Master Value Fund 22.90 23.13





UTI-Mahila Unit scheme 0.00 1.35

UTI-Monthly Income Scheme 2.23 0.00







UTI-Bond Advantage Fund 0.00 3.08






UTI-Dividend Yield Fund 26.43 26.97



35




HCL TECHNOLOGIES LTD. UTI FMP - Yearly Series July 05 UTI-C.R.T.S. 1981 0.97 0.00



UTI-Growth Sector Fund - Software 6.60 12.05



UTI-India Advantage Equity Fund 2.80 2.07


HINDALCO INDUSTRIES LTD. UTI FMP - Yearly Series July 05 UTI-Unit Scheme - 71 10.47 10.36




UTI-Grandmaster Unit Scheme 0.26 0.00












UTI-Children Career Bond Plan 2.09 1.98









HINDUSTAN ZINC LTD. UTI FMP - Yearly Series July 05 UTI-C.R.T.S. 1981 0.18 0.00

ICICI BANK LTD UTI-Floating Rate Fund STP UTI-Unit Scheme - 71 73.42 71.53

UTI-C.R.T.S. 1981 23.60 24.84







UTI-PEF Unit Scheme 1.09 0.00



36














UTI-Liquid Short Term Plan 4.87 3.40











UTI-Fixed Maturity Plan Qrtly Nov04 14.78 0.00

UTI-Fixed Maturity Plan-Yrly Nov04 23.61 9.91

UTI-FMP Yearly Series Feb 05 0.00 1.77

INDUSTRIAL DEVELOPMENT UTI-Liquid Cash Plan UTI-Unit Scheme - 71 5.02 65.85BANK OF INDIA LIMITED.

UTI-C.R.T.S. 1981 0.00 29.41



















37






UTI-FMP QUATERLY DEC2004-I 10.00 0.00

UTI-FMP Yearly Series Feb 05 0.00 1.60

ITC LTD. UTI-Liquid Cash Plan UTI-Unit Scheme - 71 6.46 89.66

UTI-Floating Rate Fund STP UTI-C.R.T.S. 1981 8.12 1.37
























KOCHI REFINIRIES LTD. UTI-Money Market Fund UTI-Growth Sector Fund - Petro 1.25 2.75



MRF LTD. UTI FMP - Yearly Series July 05 UTI-Childrens Career Balanced Plan 4.21 23.65



ORIENTAL BANK OF UTI-Growth Sector Fund - UTI-Unit Scheme - 71 100.00 0.00COMMERCE Brand Value

UTI-Banking Sector Fund UTI-C.R.T.S. 1981 3.00 3.00








38












UTI-Master Equity Plan 1999 0.03 0.00


UTI-Growth Sector Fund - Pharma & 0.38 0.38HealthCare














UTI-GVF-Bonus Plan (terminated) 104.60 0.00


PANATONE FINVEST LTD. UTI-Unit Scheme - 71 4.99 30.04

UTI-C.R.T.S. 1981 4.99 20.03



UTI-Grihalakshmi Unit Plan 4.05 0.00








UTI-Fixed Maturity Plan Qrtly Nov04 3.95 0.00

PRAJ INDUSTRIES LTD. UTI-Liquid Advantage Fund UTI-Basic Industries Fund 4.25 5.64

PUNJAB NATIONAL BANK UTI-Index Select Equity Fund UTI-Unit Scheme - 71 484.10 2.06

UTI-Nifty Index Fund UTI-C.R.T.S. 1981 0.37 0.00

UTI-Banking Sector Fund UTI-Mastershare Unit Scheme 204.46 45.54


39




UTI-Opportunities Fund UTI-Master Plus Unit Scheme 0.78 0.00










UTI-G-Sec-Investment Plan 112.25 0.00














UTI-GVF-Bonus Plan (terminated) 15.97 8.16



RELIANCE INDUSTRIES LTD. UTI-Liquid Cash Plan UTI-Unit Scheme - 71 0.00 152.78

UTI-Floating Rate Fund STP UTI-C.R.T.S. 1981 2.91 30.90

















40























STATE BANK OF BIKANER & UTI-Banking Sector Fund UTI-Unit Scheme - 71 25.00 8.64JAIPUR

UTI-FMP Quarterly January2005 - I 60.00 0.00

STATE BANK OF HYDERABAD UTI-Growth Sector Fund - UTI-Unit Scheme - 71 40.00 15.00Software







UTI-G-SEC STP 20.00 10.00


UTI-Fixed Maturity Plan (QFMP 0804) 1.68 0.00

STATE BANK OF INDIA UTI-Dividend Yield Fund UTI-Unit Scheme - 71 101.70 128.16

UTI-C.R.T.S. 1981 11.79 0.00












41































STATE BANK OF TRAVANCORE UTI-Opportunities Fund UTI-Liquid Cash Plan 50.00 0.00

TATA CONSULTANCY UTI-C.R.T.S. 1981 1.51 0.00SERVICES LTD.
















42














UTI-India Advantage Equity Fund 3.14 3.09






TATA SONS LTD. UTI-Floating Rate Fund STP UTI-Unit Scheme - 71 10.12 35.21







TVS MOTOR COMPANY LTD UTI-Growth Sector Fund - UTI-C.R.T.S. 1981 6.89 6.97Brand Value











UTI-Auto Sector Fund 0.00 1.29


UCO BANK UTI-Liquid Short Term Plan UTI-Childrens Career Balanced Plan 23.00 23.00








43








UTI FMP - Yearly Series July 05 22.50 46.30

ULTRA TECH CEMENT LTD. UTI-Unit Scheme - 71 6.69 14.64

UTI-C.R.T.S. 1981 5.16 0.00

















VIDESH SANCHAR NIGAM UTI-Liquid Cash Plan UTI-Master Index Fund 0.00 0.00LIMITED.

UTI-Floating Rate Fund STP UTI-Nifty Index Fund 0.69 0.30



Justification:

These investments were made in the normal course of day to day operations of the said scheme/s and after considering the fund specific investment objectivesand liquidity needs/availability of the respective Scheme/s.


44

XVII. NAV DETERMINATION& VALUATION OF ASSETS

1. Computation and disclosure of NAV

(a) The Net Asset Value (NAV) of the scheme shall becalculated by determining the value of the scheme’sassets and subtracting therefrom the liabilities of thescheme taking into consideration the accruals andprovisions. NAV shall be declared separately fordifferent options of the Scheme.

(b) The NAV per unit shall be calculated by dividing theNAV of the scheme by the total number of unitsissued and outstanding on the valuation day. TheNAV will be rounded off upto four decimal places.

(c) A valuation day is a day other than (i) Saturday andSunday (ii) a day on which both the stock exchanges(BSE and NSE) and the banks in Mumbai are closed(iii) A day on which the purchase and redemption ofunits is suspended. If any business day in UTI AMC,Mumbai is not a valuation day as defined above thenthe NAV will be calculated on the next valuation dayand the same will be applicable for the previousbusiness day’s transactions including all interveningholidays.

(d) The NAVs shal l be issued to the press forpublication on a daily basis and will also beavai lable on web-si te of UTI Mutual Fund,www.utimf.com and web-site of AMFI namelywww.amfiindia.com

2. Valuation of investments :

I. Equity and Equity related Securities:

a. Traded Securities

When a security is traded on any stockexchange within a period of 30 days (includingthe valuation date) and the aggregate volumeof trade during such period is more than 50,000or if the trade value is greater than Rs.5,00,000the security is treated as traded security. Theseare valued at the closing prices on NSE (BSEin case of UTI MIF scheme and UTI IndexAdvantage Sensex Plan)

b. Non traded / Thinly traded / Unlistedsecurities:

Investments in securities, which have not beentraded on any stock exchange in the aforesaidmanner, are stated at fair value as determinedby UTI AMC in accordance with SEBIRegulations.

In respect of Preference Shares, if any othersecurity issued by the company is classifiedas NPA or if the company has declared nodividend for the last 3 years, such PreferenceShares are valued at ‘NIL’ value.

II. Debt Securities:

a. Traded Securities:

Investment in debentures and bonds are valuedat the closing market rate as on the date ofvaluation and, in its absence, at the latest quoteavailable during a period of fifteen days priorto the valuation date provided there is anindividual trade in that security in marketablelot (presently Rs.5 Crore) on the Principal StockExchange or any other Stock Exchange.

b. Non-traded / Thinly traded Securities:

Investment in non traded / thinly tradedsecurities is valued as under:

i) Rated Debt Securities:

-Debt securities with residual maturity ofgreater than 182 days:

Investment in securities with residual maturityperiod of greater than 182 days are valued atYield to Maturity (YTM) based on the matrixprovided by CRISIL. The yield to maturity ismarked up or down for illiquidity risk, which isdetermined by UTI AMC in accordance withSEBI Regulations.

-Debt securities with residual maturity of upto 182 days:

Investment in debt securities with residualmaturity of up to 182 days are valued as onthe valuation date on the basis of amortisation.

ii) Unrated Debt Securities:

Investments in unrated debt securities arevalued at a discount of 25 percent to face value.Unrated Investments in deep discount bondsare valued at a discount of 25 percent tocarrying cost.

III. Government Securities:

Investment in Government securities are valued as on thevaluation date at the prices released by CRISIL as perSEBI Regulations.

IV. Index / Stoc k Futures :

Investments in Index/ Stock Futures are valued atsettlement price declared by the relevant Stock Exchangeas on the valuation date.

V. Index / Stoc k Options:

Investment in Index/ Stock Options are valued at theclosing premium quote / exercise price declared by therelevant Stock Exchange as on the valuation date.

VI. Money Market Instruments:

Investments in call money, bil ls purchased underrediscounting scheme and short term deposits with banksare valued at cost plus accrual; other money market


45

instruments are valued at the yield at which they arecurrently traded. For this purpose, non-traded instruments,that is instruments not traded for a period of seven days,are valued at cost plus interest accrued till the beginningof the day plus the difference between the redemptionvalue and the cost spread uniformly over the remainingmaturity period of the instruments.

In accordance with the Guidance Note on Accounting forInvestments in the Financial Statement of Mutual Fundsissued by the Institute of Chartered Accountants of India(pursuant to the eleventh schedule to the SEBIRegulations), the net unrealised gain or loss in the valueof investments is determined separately for each categoryof investments.

XVIII. ACCOUNTING POLICIES

A. Basis of Accounting :

The method of accounting is on accrual basis.

B. Investments :

Investments are accounted on trade dates. The holdingcost and profit & loss on sale of investments is computedon ‘weighted average cost’ method.

C. Valuation of In vestments :

Investments are stated at Marked to Market basis and arevalued as under:

1) Equity and Equity related Securities :

(a) Traded Securities

When a security is traded on any stock exchangewithin a period of 30 days (including the valuationdate) and the aggregate volume of trade during suchperiod is more than 50,000 or if the trade value isgreater than Rs.5, 00,000 the security is treated astraded security. These are valued at the closingprices on NSE (BSE in case of UTI Master IndexFund, UTI Variable Investment Scheme, and UTIIndex Advantage Fund (SENSEX).

(b) Non traded / Thinly traded / Unlisted securities:

Investments in securities, which have not beentraded on any stock exchange in the aforesaidmanner, are stated at fair value as determined byUTI AMC in accordance with SEBI Regulations.

2) Debt Securities :

(a) Traded Securities:

Investment in debentures and bonds are valued atthe closing market rate as on the date of Valuationand, in its absence, at the latest quote availableduring a period of fifteen days up to the valuationdate, provided there is an individual trade in thatsecurity in marketable lot (presently Rs.5 Crore) onthe Principal Stock Exchange or any other StockExchange.

(b) Non-traded / Thinly traded / Asset BackedSecurities:

Investment in securities with residual maturity periodof greater than 182 days are valued in good faith onthe basis of valuation guidelines laid down by SEBI.Investment in securities with residual maturity of upto 182 days are valued at the difference betweenredemption value and cost plus accrued interestspread uniformly over the remaining days to maturityof the Security. However, in case of debt securitieswith maturity greater than 182 days at the time ofpurchase, the last valuation price is used instead ofpurchase cost.

3) Government Securities :

Investment in Government securities are valued as on thevaluation date at the prices released by CRISIL, which isan approved agency of Association of Mutual Funds inIndia (AMFI).

4) Future and Options :

(a) Index/ Stock Futures are valued at settlement pricedeclared by the Stock Exchange as on the valuationdate.

(b) Index/ Stock Options are valued at the closingpremium quote / exercise price declared by the StockExchange as on the valuation date.

5) Money Market Instruments :

Traded Treasury Bills are valued at the yield at which theyare traded. Other Money Market Instruments includingnon-traded treasury bills are valued at the differencebetween redemption value and cost plus accrued interestspread uniformly over the remaining days to maturity ofthe instrument.

D. Appreciation / Depreciation, as the case may be, inthe value of the securities at the year end has beencomputed for the scheme, whereby the aggregatemarket value taken together is compared with theaggregate cost of acquisition. If, such net balanceresults in a net depreciation, the same is charged torevenue account, else the net appreciation is creditedto urealised appreciation account.

E. Income Recognition :

(a) Dividend income is accrued on the “ex-dividend”date.

(b) Interest on debenture, asset backed securities andother fixed income investments is recognised asincome on accrual basis.

(c) Profit or loss on sale of investments is recognisedon the trade dates on the basis of weighted averagecost.

F. Equalisation Account :

When units are sold / repurchased, an amount equivalentto the distributable income attributable to the sale /


46

repurchase of units is credited / debited to the IncomeEqualisation Account. The balance in equalisation accountis transferred to revenue account at the end of the year.

G. Unit Premium Reser ve :

Upon issue and redemption of units, the net premium ordiscount to the face value of units is adjusted against theunit premium reserves of the scheme / respective options,after an appropriate portion of the issue proceeds andredemption pay out is credited or debited respectively tothe Equalisation Account.

Unit premium reserve is available for dividend distribution,except to the extent it is represented by unrealisedappreciation in the value of investments.

H. Provisions :

Provision is made in respect of outstanding interest incomeof the period prior to the date on which asset is classifiedas non-performing (NPA). An asset is classified as ‘non-performing’, if the interest and/or principal amount hasnot been received or has remained outstanding for onequarter, i.e., 90 days or more from the day such income/installment has fallen due. The interest and investmentprovision as above is made from the date the asset isclassified as NPA.

Provision is made in respect of dividend, where it remainsoutstanding for more than 120 days from the ex-dividenddate.

I. Load Char ges :

Load collected at the time of issue or repurchase of unitsis retained under a separate account in the schemes booksand is utilised to meet the selling and distribution expensesof the schemes. The balance in load account is shown ascurrent liability and not considered for arriving at the NetAssets Value of the scheme.

J. Deferred Re venue Expenditure :

The initial issue expenses are charged over specifiedperiod as per provision of the scheme.

K. Expenses :

These are accounted for on accrual basis within the limitspecified under regulation 52 of SEBI (Mutual Fund)Regulations.

I. Custodian :

During the period, Stock Holding Corporation of India(SHCIL), HDFC Bank and Citi Bank have providedcustodial services and their fees are accounted for onaccrual basis.

M. Registrar s & Transf er Ag ents :

During the period, UTI Technology Services Limited,Datamatics Financial Services Ltd, M/s Karvy ConsultantsLtd, M/s Computer Age Management Services Ltd haveprovided the Registrar & Transfer Agency services andtheir fees are accounted for on accrual basis.

XIX. TAX TREATMENT OFINVESTMENTS

The disclosures in respect of tax benefits to the MutualFund and the unitholders is in accordance with theprevailing tax laws. The information stated below is basedon UTI Mutual Fund’s understanding of the tax laws andonly for the purposes of providing general information tothe investors of the Scheme. As in the case with anyinvestment there can be no guarantee that the tax positionprevailing at the time of investment in the Scheme willendure indefinitely.

Further statements with regard to tax benefits mentionedherein below are mere expressions of opinion and are notrepresentations of the Mutual Fund to induce any investorto acquire units whether directly from the Mutual Fund orindirectly from any other persons by the secondary marketoperations. Thus the prospective investors should not treatthe contents of this section of the memorandum as advicerelating to legal, taxation, investment or any other matterand are advised to consult his or her own tax consultantwith respect to the specific tax implications arising out ofhis or her participation in the Scheme.

1. Tax benefits/ Consequences to Mutual Fund

UTI Mutual Fund is a Mutual Fund registered with SEBIand as such is eligible for benefits under section 10 (23D)of the Income Tax Act, 1961 (hereinafter referred to as“the Act”) to have its entire income exempt from incometax.

The Mutual Fund will receive income without any deductionof tax at source under the provisions of Section 196(iv) ofthe Act.

2. Tax benefits/ Consequences to Unit holders

A. Tax on income in respect of units

As per the section 10(35) of the Act, income received byinvestors under the schemes of UTI MF is exempt fromincome tax in the hands of the recipient unit holders.

By virtue of proviso to section 115 (R) (2) of the Act, openended equity oriented funds are exempt from incomedistribution tax.

TDS on income of units

As per the provisions of section 194K and section 196Aof the Act where any income is credited or paid on or after1st April 2003 by a Mutual Fund, no tax is required to bededucted at source.

B. Tax on capital gains

i) Long Term Capital Gains

As per section 10(38) of the Act, any income arising fromthe transfer of a long term capital asset being a unit of anEquity Oriented Fund chargeable to securities transactiontax shall not form part of total income therefore, exemptfrom Income Tax. As per Chapter VII of Finance (No. 2)


47

Act, 2004 relating to Securities Transaction Tax (STT), thepresent rate of STT is as under:

Particulars Sale of unit of an equity oriented

fund to the mutual fund

Whether securities Yestransaction tax (STT)is applicable

Who has to pay STT Unit holder

Rate of STT 0.2%*

Tax treatment of long-term Exempt from tax undercapital gain in the hands section 10(38) [long-termof unitholder capital loss if any shall

be ignored]

Tax treatment of short-term Taxable at the rate ofcapital gain in the hands of 10% (+Surcharge +unitholder Educational Cess) under

section 111A

Tax treatment of business One can claim tax rebateincome in the hands of under section 88Eunitholder

Who will collect STT Mutual Fund

*Surcharge : Nil, Education cess : Nil

ii) Short term capital gains

Units held for not more than twelve months preceedingthe date of their transfer are short term capital assets.Capital gains arising from the transfer of short term capitalassets being unit of an open ended equity oriented fundwhich is chargeable to STT shall be liable to income tax@ 10% under section 111 A of the Act. The said tax ratewould be increased by applicable surcharge i.e. @ 10%for Individuals, HUF, AOP, BOI having total income aboveRs.10 Lakhs, @ 10% for firms and domestic company, @2.5% for non-domestic company and @ Nil for Co-operative Society or local authority. The tax and surchargewill be increased by education cess @ 2%.

C. TDS on Capital Gains

1 (i) Resident Investors

As per Central Board of Direct Taxes (‘CBDT’)circular No.715 dated 8th August 1995, in caseof resident unitholders no tax is required to bededucted from capital gains arising at the timeof redemption of the units.

(ii) For Non Resident Investors

Long term capital gains

No tax would be deducted from the proceedspayable to non resident investors from longterm capital gains arising out of redemptionof units of an open ended equity orientedfund.

Short term capital gains

As per Part II of the First Schedule to theFinance Act 2005 (Clause 1 (b) (i) (G)), theMutual Fund is liable to deduct tax @ 10% onshort term capital gains

The TDS will have to be increased by applicablesurcharge and an education cess @ 2 per cent wouldbe charged on amount of tax and surcharge.

2. In the case of a Company

Other than a Domestic Company:

Long term capital gains

No tax would be deducted from the proceeds payableto non resident investors from long term capital gainsarising out of redemption of units of an open endedequity oriented fund.

Short term capital gains

As per Part II of the First Schedule to the FinanceAct 2005 {Clause 2 (b) (viii)}, the Mutual Fund isliable to deduct tax @ 10% on short term capitalgains.

The TDS will have to be increased by applicablesurcharge. Further an education cess @ 2 per centwould be charged on amount of tax and surcharge.

3. FIIs :

In the case of Foreign Institutional Investors (FIIs), no taxwould be deductible at source from the capital gainsarising on redemption of units in view of section 196 D (2)of the Act.

Double Taxation Avoidance Agreement (DTAA):

As per Circular No. 728 dated October 30, 1995 issuedby the CBDT, in the case of remittance to a country withwhich a DTAA is in force, the tax should be deducted atthe rate provided in the Finance Act of the relevant yearor at the rate provided in the DTAA, whichever is morebeneficial to the assessee. In order for the unitholder toobtain the benefit of a lower rate available under a DTAA,the unit holder will be required to provide the Mutual Fundwith a certificate obtained from his Assessing Officerstating his eligibility for the lower rate.

The Authority for Advance Ruling (AAR) has given aruling that Non-Resident Investors (NRIs) from UnitedArab Emirates (UAE) shall have to pay capital gainson their investments in India and the benefit of DTAAcannot be taken since UAE does not have a tax regime.Due to the above Ruling, similar consequences willfollow for NRIs of other countries which do not havetax regime.

D. Short term capital losses:

According to section 94(7) of the Act as amended by theFinance (No. 2) Act, 2004, if any person buys or acquiresunits within a period of three months prior to the recorddate fixed for declaration of dividend or distribution of


48

income and sells or transfers the same within a period ofnine months from such record date, then losses arisingfrom such sale to the extent of income received orreceivable on such units, which are exempt under the Act,will be ignored for the purpose of computing his incomechargeable to tax.

Further, Finance (No. 2) Act, 2004 has inserted sub-section(8) in Section 94 which provides that, where additional unitshave been issued to any person without any payment, on thebasis of existing units held by such person then the loss onsale of original units shall be ignored for the purpose ofcomputing income chargeable to tax, if the original units wereacquired within 3 months prior to the record date fixed forreceipt of additional units and sold within 9 months from suchrecord date. However, the loss so ignored shall be consideredas cost of acquisition of such additional units held on thedate of sale by such person.

E. Value of investment in units under the scheme iscompletely exempt from Wealth Tax.

F. The Gift Tax Act, 1958 has abolished the levy of GiftTax in respect of gifts made on or after 1st October1998. Thus, gifts of units on or after 1st October,1998 are exempt from Gift Tax.

Further, subject to certain exceptions, gifts frompersons exceeding Rs.25,000/- are taxable asincome in the hands of donee on or after 1stSeptember 2004 pursuant to section 2(24)(xiii) ofthe Act read with section 56(2)(v) of the Act.

XX. UNITHOLDERS’ RIGHTS& SERVICES

1. Unitholders under the scheme have a proportionate rightin the beneficial ownership of the assets of the schemeand to the dividend, if any, declared by the scheme.

2. The unitholders have a right to ask the Trustees anyinformation, which may have an adverse bearing ontheir investments, and the Trustees shall be boundto disclose such information to the unitholders.

3. The unitholders have the right to have the SOAissued to them not later than 30 days from the dateof acceptance of their application and unit certificateswithin 30 days from the date of receipt of request forissue of unit certificate in lieu of SOA or as may bedecided by SEBI from time to time.

4. In case of dividend distribution the unitholders havethe right to receive their dividend distr ibutionwarrants within 30 days from the date of declarationof the dividend distribution, if any.

5. The unitholders have the right to have the redemptionproceeds despatched to them within 10 business days(provided the application is complete in all respects)from the date of acceptance of the application at theoffice where the redemption requests are processed.In the event of delay in despatch of redemptionproceeds beyond 10 business days from the date of

acceptance of redemption application at the processingcentre, UTI AMC shall pay interest @ 15 % per annum(or such rate as may be specified by SEBI) from the11th business day till the date of despatch.

6. E-mail communication : Unitholders who have optedto receive documents/communication by e-mail willbe required to download and print the documents/communication after receiving the e-mail from UTIAMC. Should the unitholder experience any difficultyin accessing the electronically delivered documents/communication, the unitholder should advise theRegistrars immediately to enable UTI AMC to sendthe same through alternate means. In case of non-receipt of any such intimation of difficulty within 24hours from receiving the e-mail, it will be regardedas receipt of e-mail by the unitholder.

It is deemed that the unitholder is aware of all thesecur ity r isks including possible third par tyinterception of the documents/communications andcontents of the same becoming known to third parties.

7. An abridged annual report in respect of the schemeshall be mailed to the unitholders not later than sixmonths from the date of closure of the relevantaccounting year and the full annual report shall bemade available for inspection at UTI Tower, Gn Block,Bandra Kurla Complex, Bandra (East), Mumbai - 400051. A copy of the full annual report shall also bemade available to the unitholders on request onpayment of nominal fee, if any.

8. Before expiry of one month from the date of close ofeach half year that is as on 31st March and 30thSeptember UTI Mutual Fund will publish unauditedfinancial results in prescribed format by SEBI in onenational English daily and one Marathi daily. Thesame would also be made available on websites ofUTI Mutual Fund & AMFI.

9. Full portfolio in the prescribed format shall also bedisclosed either by publishing it in the newspapersor by sending to the unitholders within one monthfrom the end of each half-year and it shall also bedisplayed on the website of UTI Mutual Fund.

10. No change in the fundamental attributes of thescheme or the trust or fees and expenses payable orany other change which would modify the schemeand affect the interest of the unitholders, shall becarried out unless, (i) a written communication aboutthe proposed change is sent to each unitholder andan advertisement is given in one English dailynewspaper having nationwide circulation as well asin a newspaper published in the language of the regionwhere the Head Office of the mutual fund is situtated;and (ii) the unitholders are given an option to exit atthe prevailing Net Asset Value without any exit load.

11. Approval of unitholders in specified circumstances -The Trustees shall adopt any of the followingalternative procedures as the Trustee considersappropriate in the circumstances:


49

i) Seeking approval of the unitholders throughpostal ballot. This would entail seeking positiveconsent of the Unitholders on the specificproposal(s) by sending to the Unitholders thenecessary mailers and seeking their consentthrough return post/courier/fax as may bedecided by the Trustee. The Trustee shall laydown detailed guidelines for the actual conductand accomplishment of the postal ballot andannouncement of its results;

ii) Seeking approval of the Unitholders present andvoting at a meeting, to be specif icallysummoned by the Trustee at the appointed day,date, time and venue. A notice convening suchmeeting shall be sent to the Unitholders at least21 days prior to the appointed date setting outthe proposal(s) which would be voted on thesanctioned meeting. The Trustee shall lay downthe detailed guidelines for the actual conductand accomplishment of the voting at a meetingand announcement of its results; and

iii) Seeking approval of the Unitholders throughsuch manner as may be determined by theTrustee from time to time.

12. The unitholders have the r ight to inspect thefollowing documents at UTI Tower, Gn Block, Bandra- Kurla Complex, Bandra (East), Mumbai - 400 051.

i) Copy of the Trust Deed.

ii) Copy of the Investment ManagementAgreement.

iii) Memorandum and Articles of Association ofTrustee.

iv) Memorandum and Articles of Association ofthe AMC.

v) Copy of the Custodian Agreement.

vi) Copy of the MOU with the Registrar andTransfer Agent.

vii) Copy of offer document of UTI-LeadershipEquity Fund.

viii) Copy of SEBI Regulations.

ix) Copy of Indian Trusts Act, 1882.

XXI. CONSTITUTION & MANAGEMENTOF UTI MUTUAL FUND

A: UTI – The Division and Repeal of the Unit Trust ofIndia Act, 1963 (UTI Act)

In terms of The Unit Trust of India (Transfer of Undertakingand Repeal) Act 2002 (hereafter referred to as the Act)the assets and liabilities of erstwhile Unit Trust of Indiahave been bifurcated into two par ts the specifiedunder taking and the specif ied company . The

Administrator of the Specified Undertaking of Unit Trustof India comprises of Unit Scheme 64 and assured returnschemes (most of which have since been converted intotax free bonds, the present investment is guaranteed bythe Govt. of India). The Specified Company has been setup as a Mutual Fund viz. UTI Mutual Fund, comprising ofall net asset value based schemes including the schemementioned in this offer document. UTI Mutual Fund hasbeen structured in accordance with SEBI (Mutual Funds)Regulations, 1996. The UTI Act has been repealed witheffect from 1st February 2003.

B. CONSTITUTION AND OBJECTIVE OF UTIMUTUAL FUND

The UTI Mutual Fund (the Mutual Fund) has beenconstituted as a Trust under the Indian Trust Act,1882 (2 of 1882). The Mutual Fund was registeredwith SEBI on January 14, 2003 under RegistrationCode MF/048/03/01.

The main objective of the Mutual Fund is:

Pooling of capital from the public for collectiveinvestment by way of acquis i t ion, ho ld ing,management, trading or disposal of securities orany other property whatsoever, for the purposeof providing facil it ies for the par ticipation bypersons as beneficiaries in such properties orinvestments and in the profits or income arisingthere from.

C. THE SPONSORS

Three leading public sector banks – Bank of Baroda,Punjab National Bank and State Bank of India andLife Insurance Corporation of India (LIC), the largestpublic financial investment institution and life insurerin India have entered into an agreement with theGovernment of India as Sponsors of the Mutual Fund.

(a) Bank of Baroda:-

Bank of Baroda is a commercial bank performingac t i v i t i es in te r ms o f Bank ing Compan ies(Acquisition and Transfer of undertaking Act 1970)under which the Undertaking of the Bank wastaken over by the Central Government. During theperiod since inception, it has always maintainedits practice of sound value based banking toemerge as one of the premier public sector Banksof the country today. It has a track record ofuninterrupted profits since inception in 1908. Thefinancial strength of the Bank and its long traditiono f e f f i c ien t cus tomer ser v ice a re d rawnsubstantially from the extensive reach of its 2738st rong branch network (as o f 31 .03 .2005)covering almost every State and Union Territoryin the Country. The Bank is also one of the fewInd ian Banks w i th a fo r midable p resenceoverseas with 38 branches. Thus, the total branchnetwork is 2,738 as at 31.03.2005.


50

The financial performance of Bank of Baroda during thelast 3 fiscal years is as under :

(Rupees in crores)

Particulars 2002-2003 2003-2004 2004-2005

Total Income 7359 7866 7736

Total Expenditure 5642 5381 5434

Operating Profit 1717 2485 2302

Profit After Tax 773 967 677

Deposits 66366 72967 81333

Advances 35348 35601 43400

Capital AdequacyRatio 12.65 13.91 12.61

Paid-up Capital 294 294 294

Reserves & Surplus 4093 4836 5333

Networth 4387 5130 5627

Earning Per Share(in Rs.) 26.11 32.97 23.08

Book Valueper Share (in Rs.) 139.36 166.46 183.33

Dividend Paid % 60 65 50

(b) Life Insurance Corporation of India

Life Insurance Corporation of India (LIC) is amongstthe largest insurance companies in the world, with2048 branches and having a Fund size of Rs.-385639.07 crore.

The financial performance of LIC during the last 3fiscal years is as under :

2002-2003 2003-2004 2004-2005

Total Income 80938.49 93088.91 112346.24

Free Reserve 81.93

Net Worth

Capital 5.00 5.00 5.00

Free Reserve 116.75 120.43 –General Reserve 132.19(Shareholders’ Fund)Insurance Reserves 2907.75Fair Value Change 28226.35

TOTAL 121.75 125.43 31271.29

Profit after Tax 496.97 551.81 NA

% of dividend paid 9762%

(Rs. in crores)

Note:

1. The entire capital of Rs.5 crore has been providedby the Central Government in terms of Section 5 ofthe LIC Act, 1956.

2. Earning per Share/Book Value per Share : Notapplicable to the Corporation.

3. % of Dividend paid is equal to 5% of the ValuationSurplus and since the Government holds the entirecapital of Rs.5 crore, the whole dividend is paid to theGovernment under Section 28 of the LIC Act, 1956.

(c) Punjab National Bank

Punjab National Bank is a commercial bankperforming activities in terms of Banking Companies(Acquisition and Transfer of undertaking Act 1970)under which the Undertaking of the Bank was takenover by the Central Government. The main object ofthe bank under the said Act is as below:-

An act to provide for the acquisition and transferof the undertaking of certain banking companies,having regard to their size, resources coverageand organisation, in order to further to control theheights of the economy, to meet progressively andserve better, the needs of the development of theeconomy and to promote the welfare of the people,in conformity with the policy of the State towardssecuring the principles laid down in clause (b) and(c) of Article 39 of the Constitution of India andfor matter connected therewith or incidentaltherein.

As on 31.03.2005 Punjab National Bank has 4022branches, 3 subsidiaries and a deposit size ofRs.103166.89 crores.

The financial performance of the Punjab NationalBank during the last 3 fiscal years is as under :

(Amount Rs. in crores)

Particulars 2002-2003 2003-2004 2004-2005

Total Income 9010.18 9646.57 10135.53

Profit after tax 842.20 1108.69 1410.12

Equity Capital 265.30 265.30 315.30Share Application — — —Money

Free Reserves 3798.90 4425.47 7533.50**excluding revaluationreserve

Net worth 4064.20 4690.77 7848.80

Earning per share 35.79 41.79 52.93

Book value per share 139.63 176.80 248.93

Dividend paid to Govt. 35.00 40.00 30%*

* Subject to RBI approval** Including Share Premium Reserves of Rs.2011.43 cr.

d) State Bank of India: The State Bank of India is thelargest public sector bank in India with 9102 branches inIndia and 54 offices in 28 countries worldwide. In additionto this, SBI also has 16 subsidiaries.


51

The financial performance of State Bank of India for thelast three fiscal years is summarised below:

The sponsors are not responsible nor liable for any lossresulting from the operation of the scheme beyond thecontribution of an amount of Rs.10,000/- made by themtowards setting up of the Mutual Fund.

D. THE TRUSTEE

a) UTI Trustee Company Private Limited a companyincorporated under the Indian Companies Act, 1956will be the first and sole trustee of the Mutual Fundunder the Trust Deed dated December 9, 2002executed between the Sponsors and the TrusteeCompany (the Trustee).

b) Registered office: UTI Tower, Gn Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051.

c) Board of Directors

Particulars 2002-2003 2003-2004 2004-2005

Total Income (Rs. Cr.) 36827 38073 39548

Profit after tax (Rs. Cr.) 3105 3681 4304.52

Equity Capital (Rs. Cr.) 526 526 526

Free Reserves (Rs. Cr.) 16677 19704 23545

Net Worth (Rs. Cr.) 17203 20231 24072

Deposits (Rs. Cr.) 296123 318619 367048

Earning per share (Rs.) 59 69.94 81.79

Book value per share (Rs.) 327 384.40 45.64

Capital Adequacy Ratio (%) 13.50 13.53 12.45

Dividend paid (%) 85% 110% 125%

Name and Address

Shri C Ramachandran,Chairman Former Secretary(Expenditure),Ministry of Finance,Govt. of IndiaAishwarya, 16, ArunachalamRoad, Nawab Gardens,Kotturpuram, Chennai - 85

Shri M P RadhakrishnanFormer Chairman, SBI3/462, I. Street,Kazura Garden,Neelankarai,Chennai - 600 041

Dr.(Mrs.) Kanta AhujaFormer Vice-Chancellor,University of Rajasthan5-Ja-10, Jawahar Nagar,Jaipur 302 004

Other Directorships

(i) Director, RITES Ltd.

(ii) Director, KonkanRaliway CorporationLtd.

(i) Director, NagarjunaFertilizers &Chemicals Ltd.

(ii) Director, Aircell Ltd.(iii) Director, Haldia

Petrochemicals Ltd.

NIL

Shri I D AgarwalSterling Sea Face Building,Flat No.B-604,Dr. Annie Beasant Road,Worli, Mumbai - 400 018.

*Dr. Pritam SinghManagement DevelopmentInstitute,Mehrauli Road, Sukhrali,Gurgaon -122 001Haryana

Name and Address Other Directorships

(i) Director, RaymondLtd.

(ii) Director, WesternIndia Shipyard Ltd.

(i) Director, LocalBoard of ReserveBank of India

(ii) Director, ShippingCorporation of IndiaLtd.,

(iii) Director, ICRA Ltd.(iv) Director, Indian

M e d i c i n e sP h a r m a c e u t i c a l sCorporation Ltd.

(v) Director, HeroHonda Motors Ltd.

*Associate Director

d) Duties and Responsibilities of the Trustee andsubstantial provisions of the Trust Deed

Pursuant to the Trust Deed constituting the MutualFund and the SEBI (Mutual Funds) Regulations,1996 the Trustees have several dut ies andresponsibilities including the following:

(1) The trustees and the Asset Management Company(AMC) shall with the prior approval of SEBI enterinto an investment management agreement.

(2) The investment management agreement shallcontain such clauses as are mentioned in the FourthSchedule and such other clauses as are necessaryfor the purpose of making investments.

(3) The trustees shall have a right to obtain from theAMC such information as is considered necessaryby the trustees.

(4) The trustees shall ensure before the launch of anyscheme that the AMC has;-

(a) systems in place for its back office, dealingroom and accounting;

(b) appointed all key personnel including fundmanager(s) for the scheme(s) and submittedtheir bio-data which shal l contain theeducational qualifications, past experience inthe securities market with the trustees, within15 days of their appointment;

(c) appointed auditors to audit its accounts;

(d) appointed a compliance officer who shall beresponsible for monitoring the compliance ofthe Act, rules and regulations, notifications,guidelines instructions etc issued by SEBI orthe Central Government and for redressal ofinvestors’ grievances;


52

(e) appointed registrars and laid down parametersfor their supervision;

(f) prepared a compliance manual and designedinternal control mechanisms including internalaudit systems;

(g) specified norms for empanelment of brokersand marketing agents.

(5) The trustees shall ensure that an AMC has beendiligent in empanelling the brokers, in monitoringsecurities transactions with brokers and avoidingundue concentration of business with any broker.

(6) The trustees shall ensure that the AMC has notgiven any undue or unfair advantage to anyassociates or dealt with any of the associates ofthe AMC in any manner detrimental to interest ofthe unitholders.

(7) The trustees shall ensure that the transactionsentered into by the AMC are in accordance with theregulations and the scheme.

(8) The trustees shall ensure that the AMC has beenmanaging the mutual fund schemes independentlyof other activities and have taken adequate steps toensure that the interest of investors of one schemeare not being compromised with those of any otherscheme or of other activities of the AMC.

(9) The trustees shall ensure that all the activities ofthe AMC are in accordance with the provisions ofthe regulations.

(10) Where the trustees have reason to believe that theconduct of business of the mutual fund is not inaccordance with the regulations and the scheme theyshall forthwith take such remedial steps as arenecessary by them and shall immediately informSEBI of the violation and the action taken by them.

(11) Each trustee shall file the details of his transactionsof dealing in secur it ies (above Rs.1 lac pertransaction) with the Mutual Fund on a quarterlybasis.

(12) The trustees shall be accountable for, and be thecustodian of, the funds and property of the respectiveschemes and shall hold the same in trust for thebenefit of the unitholders in accordance with theregulations and the provisions of trust deed.

(13) The trustees shall take steps to ensure that thetransactions of the mutual fund are in accordancewith the provisions of the trust deed.

(14) The trustees shall be responsible for the calculationof any income due to be paid to the mutual fund andalso of any income received in the mutual fund forthe holders of the units of any scheme in accordancewith the regulations and the trust deed.

(15) The trustees shall obtain the consent of theunitholders -

(a) whenever required to do so by SEBI in theinterest of the unitholders; or

(b) whenever required to do so on the requisitionmade by three-fourths of the unitholders of anyscheme; or

(c) when the majority of the trustees decide to windup or prematurely redeem the units.

(16) The trustees shall ensure that no change in thefundamental attributes of any scheme or the trustor fees and expenses payable or any otherchange which would modify the scheme andaffects the interest of unitholders, shall be carriedout unless, -

(i) a written communication about the proposedchange is sent to each member and anadvertisement is given in one English dailynewspaper having nationwide circulation aswell as in a newspaper published in thelanguage of the region where the Head Officeof the mutual fund is situated; and

(ii) the unitholders are given an option to exit atthe prevailing Net Asset Value without any exitload.

(17) The trustees shall call for the details of transactionsin securities by the key personnel of the AMC in hisown name or on behalf of the AMC and shall reportto SEBI, as and when required.

(18) The trustees shall quarterly review all transactionscarried out between the mutual funds, AMC and itsassociates.

(19) The trustees shall quarterly review the networth ofthe AMC and in case of any shortfall, ensure thatthe AMC make up for the shortfall as per clause (f)of sub-regulation (1) of regulation 21 of SEBI (MFs)Regulations.

(20) The trustees shall periodically review all servicecontracts such as custody arrangements, transferagency of the securities and satisfy itself that suchcontracts are executed in the interest of theunitholders.

(21) The trustees shall ensure that there is no conflict ofinterest between the manner of deployment of itsnetwor th by the AMC and the interest of theunitholders.

(22) The trustees shall periodically review the investorcomplaints received and the redressal of the sameby the AMC.

(23) The trustees shall abide by the Code of Conduct asspecified in the Fifth Schedule of the SEBI (MutualFunds) Regulations.

(24) The trustees shall furnish to SEBI on a half yearlybasis, -


53

(a) a report on the activities of the mutual fund;

(b) a certificate stating that the trustees havesatisfied themselves that there have been noinstances of self dealing or front running by anyof the trustees, directors and key personnel ofthe AMC;

(c) a certificate to the effect that the AMC hasbeen managing the schemes independently ofany other activities and in case any activitiesof the nature referred to in sub-regulation (2)of regulation 24 have been undertaken by theAMC and has taken adequate steps to ensurethat the interest of the unitholders areprotected.

(25) The independent trustees referred to in sub-regulation (5) of regulation 16 shall give theircomments on the report received from the AMCregarding the investments by the mutual fund in thesecurities of group companies of the sponsors.

(26) Trustees shall exercise due diligence as under:

A. General Due Diligence:

(i) the Trustees shall be discerning in the appointmentof the directors on the Board of the AMC.

(ii) Trustees shall review the desirability of continuanceof the AMC if substantial irregularities are observedin any of the schemes and shall not allow the AMCto float new schemes.

(iii) The trustee shall ensure that the trust property isproperly protected, held and administered byproper persons and by a proper number of suchpersons.

(iv) The trustee shall ensure that all service providersare holding appropriate registrations from SEBI orconcerned regulatory authority.

(v) The Trustees shall arrange for test checks of servicecontracts.

(vi) Trustees shall immediately report to SEBI of anyspecial developments in the mutual fund.

B. Specific Due Diligence:

The Trustees shall:

(i) obtain internal audit reports at regular intervals fromindependent auditors appointed by the Trustees.

(ii) obtain compliance certificates at regular intervalsfrom the AMC.

(iii) hold meeting of trustees more frequently.

(iv) consider the reports of the independent auditor andcompliance reports of AMC at the meetings oftrustees for appropriate action.

(v) maintain records of the decisions of the Trusteesat their meetings and of the minutes of themeetings.

(vi) prescribe and adhere to a code of ethics by theTrustees, AMC and its personnel.

(vii) communicate in wr i t ing to the AMC of thedeficiencies and checking on the rectification ofdeficiencies.

(27) The trustees shall not be held liable for acts donein good faith if they have exercised adequate duediligence honestly.

(28) The independent directors of the trustees or AMCshall pay specific attention to the following, as maybe applicable, namely:-

(i) the Investment Management Agreement andthe compensation paid under the agreement.

(ii) service contracts with affiliates - whether theAMC has charged higher fees than outsidecontractors for the same services.

(iii) selection of the AMC’s independent directors

(iv) securities transactions involving affiliates to theextent such transactions are permitted.

(v) selecting and nominating individuals to fillindependent directors vacancies.

(vi) code of ethics must be designed to preventfraudulent, deceptive or manipulative practicesby insiders in connection with personalsecurities transactions.

(vii) the reasonableness of fees paid to sponsors,AMC and any others for services provided.

(viii) principal underwriting contracts and theirrenewals any service contract with theassociates of the AMC.

(29) In carrying out their responsibilities, each memberof the Board of Directors of Trustee Company shallmaintain arms’ length relationship with othercompanies, or institutions or financial intermediariesor any body corporate with which he may beassociated in any capacity.

(30) No trustee shall participate in the meetings of theBoard of Directors of the Trustee Company or in anydecision making process for any investment in whichhe may be deemed to be interested.

(31) All members of the Board of Directors of the TrusteeCompany shall furnish to SEBI and Trustee Companythe interest which they may have in any othercompany, or institution or financial intermediary orany body corporate by virtue of his position asdirector, partner or with which he may be associatedin any other capacity.

(32) The Trustee shall at no time acquire any asset outof the Trust Property, which involves the assumptionof any liability which is unlimited or results inencumbrance of the Trust Property in any way,except to the extent permitted by the SEBIRegulations.


54

(33) Except with the prior approval of the Trustee andSEBI in writing, the Mutual Fund shall not make orgrant loans or guarantee loans nor shall they carryout at any time any activity in contravention of theSEBI Regulations.

Any addition/modification/deletion in the duties andresponsibilities of the Trustee due to a change inthe SEBI Regulations shall be applicable accordingly.

e) Modifications, Amendments, etc. to the TrustDeed

The Sponsors and the Trustee shall be entitled, by adeed supplemental to the Trust Deed, to modify oralter the provisions of the Trust Deed, in such mannerand to such extent as they may consider in theinterest of and for the purpose of the Trust, butsubject to the approval of SEBI, and unitholders, ifrequired.

f) Meetings

Nine meetings of the Board of Directors of theTrustee Company were held from April 1, 2004 uptoMarch 31, 2005. As per the Trust Deed the Board ofDirectors of the Trustee Company shall, subject tothe requirements under the Regulations, meet atleast once every two months and at least six suchmeetings shall be held every year. The Trustees shallreview the information/reports submitted by the AMCin accordance with the SEBI (MFs) Regulations.

g) Trusteeship Fees

As per the Trust Deed the Trustee shall be paid a feecalculated on such basis and such intervals as setout in the prospectus/offer documents of thescheme(s) framed for the issue of units or as agreedbetween the parties.

E. ASSET MANAGEMENT COMPANY (AMC)

a) UTI Asset Management Company Private Limited isa company incorporated under the Companies Act,1956.

b) Registered office: UTI Tower, Gn Block, Bandra -Kurla Complex, Bandra (East), Mumbai - 400 051.

c) UTI Asset Management Company Private Limitedhas been appointed as the Asset ManagementCompany of the Mutual Fund by the Trustee videInvestment Management Agreement datedDecember 9, 2002 executed between UTI TrusteeCompany Pr ivate Limi ted and UTI AssetManagement Company Private Limited. The AMCwas approved by SEBI to act as the assetmanagement company for UTI Mutual Fund videtheir letter no. MF/BC/PKN/03 dated January 14,2003. Out of the AMC’s total paid-up capital of Rs.10crore, 25% is held by each of the Sponsors. TheAMC will manage the schemes of the Mutual Fundincluding the scheme mentioned in this offerdocument, in accordance with the provisions of theInvestment Management Agreement, the Trust

Deed, the SEBI (Mutual Funds) Regulations andthe objectives of the scheme. UTI AMC has enteredinto a service agreement with the Administrator ofthe Specified Undertaking of Unit Trust of India toprovide back office support for business processesexcluding fund management. UTI AMC has beenregistered as a portfolio manager under the SEBI(Por t fo l io Managers) Regulat ions, 1993 onFebruary 3 2004, for under taking por t fo l iomanagement services. The registration code is PM/INP 000000860.

UTI International Ltd., a 100 % subsidiary of UTIAMC, registered in Guernsey, Channel Islands, actsas manager to offshore funds and markets theseoffshore funds abroad.

UTI Venture Funds Management Co. Ltd., a 100 %subsidiary of UTI AMC, acts as a venture capitalmanager to venture capital schemes.

Systems are in place to ensure that bank andsecurities accounts are segregated and there is noconflict of interest.

UTI AMC is not undertaking any other businessactivities other than those mentioned above.

d) Names of Directors of UTI Asset Management Co.(P) Ltd.


*Dr R H PatilChairman (Non-Executive)401, Sujatha Apt,Parulekar Marg,Dadar (West)Mumbai – 400 028

(i) Chairman – The ClearingCorporation of India Ltd.

(ii) Director – NationalSecurities ClearingCorporation Ltd.

(iii) Director – National StockExchange of India Ltd.

(iv) Director – NSE.IT Ltd

(v) Director – Clear CorpDealing Systems (India)Ltd.

(vi) Director – NationalSecurities & DepositoriesLtd.

(vii) Director – Credit Analysis &Research Ltd.

(viii) Director – SBI CapitalMarkets Ltd.

(ix) Director – CorpBankSecurities Ltd.

(x) Additional Director - UTIBank Ltd.

(xi) Director - India IT Fund Ltd.

(xii) Director - India PharmaFund Ltd.

(xiii) Additional Director - NSDLDatabase ManagementLtd.

(xiv) Member - Advisory Boardof Intuit Consulting Ltd.


55

Director - Central Bank of India.

(i) Independent Director,Torrent PharmaceuticalsLtd.

(ii) Director - NationalCommodity andDerivatives Exchange Ltd.

(iii) Director - NationalCollatoral ManagementService Ltd.

(iv) Amarchand Managaldas &Suresh A. Shroff andCompany - ManagingPartner

(i) Director, Gujarat StateElectricity Corporation Ltd.

(ii) Director, NTC - Delhi,Punjab & Rajasthan

(iii) Director, NTC - Kerala,Karnataka & AndhraPradesh

(iv) Chairman - UTIInternational Ltd.

(i) Non-official director, EximBank.

(ii) Non-official director, J KIndustries.

(iii) Non-official director, BAGFilms

(iv) Director - UTI InternationalLtd.

(v) Vice Chairman - BalRaksha Bharat (Save thechildren - India)

Chairman - Advisory Board onBank, Commercial & FinancialFrauds


*Shri U K Sinha,Managing Director andChief Executive Officer.E-9 Bapu Dham, Central Govt.Officers Quarters,Chanakyapuri,New Delhi - 110 021.

*Shri S H Bhojani,Partner,Amarchand Mangaldas &Suresh A Shroff & Co.Advocates & SolicitorsA-61, Ocean Gold,Twin Tower Lane, Prabhadevi,Mumbai - 400 025.

Shri J S Mathur,Former Dy. Comptroller andAuditor General of IndiaFlat No.7485,Sector B-10, Vasant Kunj,New Delhi - 110 070

Dr. Vinayshil Gautam27, New Campus, IIT,Hauz Khas,New Delhi - 110 016

Shri G P Muniappan141, Vasanth Vihar,RBI Senior Officers Flats,85, Napean Sea Road,Mumbai - 400 006

* Associate Directors

e) Under the SEBI (Mutual Funds) Regulations, 1996,and the IMA executed in accordance with theRegulations, the Asset Management Company hasthe following obligations:

1. To take all reasonable steps and exercise duediligence to ensure that the investment of funds

pertaining to any scheme is not contrary to theprovisions of SEBI (Mutual Funds)Regulations, 1996 and the trust deed.

2. To exercise due diligence and care in all itsinvestment decisions as would be exercisedby other persons engaged in the samebusiness.

3. To be responsible for the acts of commissionsor omissions by its employees or the personswhose services the AMC has procured.

4. To submit to the trustees quarterly reports ofeach year on its activities and the compliancewith SEBI (Mutual Funds) Regulations.

5. The trustees at the request of the AMC mayterminate the assignment of the AMC at anytime:

Provided that such termination shall becomeeffective only after the trustees have acceptedthe termination of assignment andcommunicated their decision in writing to theAMC.

6. Notwithstanding anything contained in anycontract or agreement or termination, the AMCor its directors or other officers shall not beabsolved of liability to the mutual fund for theiracts of commissions or omissions, whileholding such position or office.

7. a) The AMC shall not through any brokerassociated with the sponsors, purchaseor sell securities, which is average of 5%or more of the aggregate purchases andsale of securities made by the mutualfund in all its schemes.

Provided that for the purpose of this sub-regulation, aggregate purchase and saleof securities shall exclude sale anddistribution of units issued by the mutualfund.

Provided further that the aforesaid limitof 5% shall apply for a block of any threemonths.

b) The AMC shall not purchase or sellsecurities through any broker (other thana broker referred to in clause (a) whichis average of 5 % or more of theaggregate purchases and sale ofsecurities made by the mutual fund inall its schemes, unless the AMC hasrecorded in writing the justification forexceeding the limit of 5% and reports ofall such investments are sent to thetrustees on a quarterly basis.

Provided that the aforesaid limit shallapply for a block of three months.


56

8. Not to utilise the services of the sponsors orany of its associates, employees or theirrelatives, for the purpose of any securitiestransaction and distr ibution and sale ofsecurities:

Provided that the AMC may util ise suchservices if disclosure to that effect is madeto the unit holders and the brokerage orcommission paid is also disclosed in thehalf yearly annual accounts of the mutualfund.

9. To f i le with the trustees the detai ls oftransactions in securities by the key personnelof the AMC in their own name or on behalf ofthe AMC and to also report to the SEBI, asand when required by the SEBI.

10. In case the AMC enters into any securitiestransactions with any of its associates, a reportto that effect to be sent to the trustees at itsnext meeting.

11. In case any company has invested more than5 percent of the net asset value of a scheme,the investment made by that scheme or by anyother scheme of the same mutual fund in thatcompany or its subsidiaries to be brought tothe notice of the trustees by the AMC and tobe disclosed in the half yearly and annualaccounts of the respective schemes withjustification for such investment. Provided thatthe latter investment has been made within 1year of the date of the former investmentcalculated on either side.

12. To file with the trustees and the SEBI -

a) Detailed bio-data of all its directors alongwith their interest in other companieswithin fifteen days of their appointment;and

b) Any change in the interests of thedirectors every six months.

c) quarterly report to the trustees givingdetails and adequate justification aboutthe purchase and sale of the securitiesof the group companies of the sponsorsor the asset management company asthe case may be, by the mutual fundduring the said quarter.

13. Each director of the AMC shall file the detailsof his transactions of dealing in securities withthe t rustees on a quar ter ly basis inaccordance with the guidelines issued bySEBI.

14. Not to appoint any person as key personnelwho has been found guilty of any economicoffence or involved in violation of securitieslaws.

15. To appoint registrars and share transfer agentswho are registered with the SEBI.

Provided if the work relating to the transferof units, redemption etc is processed in-house, the charges at competitive marketrates may be debited to the scheme and forrates higher than the competitive marketrates, prior approval of the trustees shall beobtained and reasons of charging higherrates shal l be disc losed in the annualaccounts.

16. To abide by the Code of Conduct as specifiedin the Fifth Schedule of the SEBI Regulations.

The appointment of the AMC can be terminatedby a majority of the trustees or by seventy fivepercent of unitholders of the scheme.

However, any addition/modification/deletion inthe duties and responsibilities of the AMC dueto a change in the SEBI Regulations shall beapplicable accordingly.

f) AMC Fees

UTI AMC shall subject to the ceiling as may beprescribed by the Regulations, be entitled tomanagement and advisory fees at the rate of 1.25%per annum of the weekly average net assetsoutstanding for net assets of Rs.100 crore and atthe rate of 1.00% per annum for the net assets inexcess of Rs.100 crore. Payment of fees to the AMCmay be made either on a weekly, fortnightly ormonthly basis, unless otherwise agreed between theAMC and the Trustee.

F. DETAILS OF KEY PERSONNEL OF UTI AMC

Sr. Name and Age QualificationsNo Designation (in

of the Key yrs)Personnel

Experience

02-06-2002 to 02-11-2005Joint Secretary, Ministry ofFinance, Department ofEconomic Affairs, NorthBlock, New Delhi30-10-2000 to 02-06-2002Joint Secretary, Ministry ofFinance, Banking Division29-06-1998 to 28-10-2000Secretary, Road Constr-uction Department (Bihar -Patna) 04-12-1997 to 07-06-1998 Commissioner,Patna Division, Bihar

Over 22 years of experiencein Investments, Dealing,Fund Accounting,Marketing, HRD, InvestorServicing and alsofunctioned as RegionalHead.

1 Shri U K Sinha 53 M.Sc. LLBManagingDirector andChief ExecutiveOfficer

2. Shri D.S.R. 55 B.Com,Murthy ACA,AMPExecutive (Harvard)Director Dept.of Sales &Marketing,Administrationand HRD


57



Experience

13. Sanjeev Bhasin 35 B.Com.ACAVice President

14. Swati Kulkarni 40 B Com.Vice President MFM, CAIIB-I,

CertificateExamination of

IIB forthe Employees

of UTI

15. Sidharth Dembi 34 BE , MMSVice President

16. Alok Sahoo 29 BE,Assistant Vice PGDMPresident (Finance)

17. Gautami Desai 31 B.E., MMSAssistant VicePresident

18. Chandraprakash 27 B.com., MBAPadiyarAssistant VicePresident

19. Puneet Pal 28 B.com., MBAAssistant VicePresident

20. Rajeev Gupta 42 M Com.,Vice President CAIIB-I,Head - Dealing Certificate

Examination ofIIB for

the Employeesof UTI,

Course inCobol

Language

21. Rakesh Kumar 38 B.ScAssistant Vice (Phy-Honours),President CAIIB-I,

CertificateExamination of

IIB forthe Employees

of UTI,FP (certified

financialplanner),

MFM(Masters InFinancial

Management)

9 years experience in FundsManagement, Por tfolioManagement andInvestment Banking.(external)UTI AMC FundManagement since July2005

In Department ofInternational Finance andFunds Management fromJune 2001 till date. Priorexperience includesResearch and planning (6Years) and FinancialPlanning Cell (1 Year).

Joined UTI in June 1998 andhas worked in the SecuritiesResearch Department tillApril 2005. In Department ofFund Management sinceApril 2005

1 year in UTI OffshoreFunds, 4 years in DomesticFunds Management.

Last 4 years in departmentof Fund Management.Involved in all micro levelfund activities as well as inequity research.Priorexperience of 3 years -worked as an analyst in thecredit rating cell.

Joined UTI in May 2000 andhas worked in Equity/Securities Research for overtwo years and Debt FundManagement for over oneyear. With FundsManagement Equity sinceJune 2004.

4 yrs Experience in MoneyMarket Dealing

12 years in Branch/Marketing, 2 years in FundManagement (2001-2003),2 years in Dealing (since2003)

2 years in Department ofDealing (Non SLR)9 years in Department ofAccounts



Experience

3. Shri A K Sridhar 45 BSc. ACAChief InvestmentOfficer andDepartment ofInternationalFinance

4. Shri F Q Kolman 50 B.Com,Head of CAIIB-I,Operations and CertificateInvestor Service. Examination

of IIBfor the

Employeesof UTI

5. Shri K 51 M.Com,Madhavakumar CAIIB-I,Chief Marketing CertificateOfficer, Internal ExaminationAudit and Risk of IIBManagement for the

Employeesof UTI

6. Shri Rajesh 50 BSc.,Verma MBA, CAIIBComplianceOfficer

7. Shri S C Dikshit, 52 M.A.,President - B.Sc.,Chief Legal L.L.B.Advisor

8. Shri Imtaiyazur 42 ICWA, ICSIRahmanCompanySecretary,Chief FinanceOfficer andDepartment ofHRD.

9. Shri Sumeet 37 BE, PGDMBudhrajaAssistant VicePresidentHead- SecuritiesResearch

10. Shri Amandeep 35 BSc, MBAChopraSenior VicePresident Headof Fixed Income

11. Sanjay Dongre 37 BE, PGDMVice President

12. David Pezarkar 34 B.A.Vice President (Economics),

MMS (Finance)

Has around 17 years ofexperience in investments,equity research & creditratings and fundmanagement of equity andincome schemes andtreasury management.

He has experience in thefollowing departments since1977 - Marketing, InvestorServicing, HRD, Administ-ration, Estate and DataProcessing Back Office.

He has experience in thefollowing departments since1977 - Marketing, Accounts& Resource Management,Policy Planning, InternalAudit and RiskManagement.

Over 23 years in CentralBanking, BankingRegulation and BankingSupervision.

16 years of experience in thelegal affairs of theOrganization.

17 years of experience inthe fields of Finance,Accounts, Taxation,Operations and CompanySecretary works.

3 years in Department ofSecurities Research. Heanalyses the Power,Telecom and consumergoods sectors. 6 years inDepar tment of FundsManagement

4 years in Equity Researchand 7 years in FundsManagement.

Experience in Investmentsand Investment Monitoringfrom Aug 1994 - Apr.98(4 years), 1year in EquityResearch, 1 Year in Dealing.In Department of FundsManagement since July 2000.

4 years in FundManagement - OffshoreEquity Funds (InternationalFinance), 6 years in FundManagement - Debt Funds


58

XXII. OTHER SERVICE PROVIDERSFOR THE SCHEME

1. Custodians

(a) Stock Holding Corporation of India Ltd., situated atMittal Court, B-Wing, Nariman Point, Mumbai – 400021, have been functioning as custodian for all ourschemes and plans as per the agreement enteredinto with them on January 17, 1994.

(b) The custodians are required to take delivery of allsecurities belonging to schemes/funds/plans of UTIMutual Fund and hold them in its custody.

(c) The custodians will deliver the securities only as perinstructions from UTI Mutual Fund and on receipt ofthe consideration.

(d) The custodian shall be generally authorised to attend toall non-discretionary and procedural details for dischargeof normal custodial functions in connection with the sale,purchase, transfer of and other dealings in the securities,other assets held by them as an agent except as mayotherwise be directed by the Mutual Fund.

(e) Custodians shall provide all information, reports orany explanation sought by the Mutual Fund or theauditors of the Fund for the purpose of audit and forphysical verification and reconciliation of securitiesbelonging to the schemes/ funds / plans of UTIMutual fund.

(f) The SEBI registration number of SHCIL is IN/CUS/011

(g) The Custodian will charge fees as per the CustodialAgreement.

2. Auditor:

M/s Haribhakti & Co., Chartered Accountants, 42,Free Press House, 4th Floor, 215, Nariman Point,Mumbai - 400 021 have been appointed as Auditorsof UTI Mutual Fund for the Accounting year 1st April2005 to 31st March 2006.

3. Registrar and transfer agent :

M/s Computer Age Management Services Pvt. Ltd.(CAMS) has been appointed as the Registrars.

(SEBI Registration no. INR000002813)

Processing of applications and after sales serviceswill be handled from the following branch of theRegistrars:A & B Lakshmi Bhavan609 Anna SalaiChennai – 600 006

It has been ensured that the Registrar has adequatecapacity to discharge its responsibilities with regard toprocessing of applications, transfer forms, despatch ofSOAs/unit certificates and dividend distributionwarrants within the time frame prescribed in SEBI (MFs)Regulations and also handle investor complaints.

4. Collecting Banker/ Paying Banker : UTI-Bank Ltd, andor such other banks registered with SEBI may beappointed as the collecting banker(s)/paying banker(s)under the scheme on such terms and conditions asmay be decided by UTI AMC from time to time.

Principal Business Address of the Bank .UTI Bank Ltd.(INB 100000017)Central Office, Maker Tower-F, 13th floorCuffe Parade, Colaba, Mumbai - 400 005

Sr. Name and Age QualificationsNo Designation

of the KeyPersonnel

Experience

6 Years in Equity Dealing.8 years in Internal Audit.

About 7 years inDepartment of InternationalFinance, 1.5 years inDepartment of Dealing

5.5 Years in Primary Dealing

1 ½ yrs in UTI OffshoreFunds.2 ½ yrs in Domestic FundsManagement.

2 Year in Equity Dealing.13 Years in Operation andMarketing.

3 Years in Administrationand Estate Dept.3 Years in Marketing2 Years in Primary Dealing

1 Year in Equity Dealing12 Years Accounts andOperation.

Over 16 years of experiencein the investment relatedarea. Recently joined theDealing Team.

Management of UTI-Leadership Equity Fund:-Shri Sanjay Dongre is the fund manager for UTI - LeadershipEquity Fund

22. K.V.N. Sekar 45 B.Sc, B.GL,Assistant Vice I.C.W.A,President A.C.S,

CAIIB-I,Certificate


the Employeesof UTI

23. Shri Manish 36 B.Sc, M.ScJoshi (Physics),Manager MFM (Masters

In FinancialManagement)

24. Smt Payal Virdi 29 BA(Hons),Manager PGDBM

25. Shri Rajeev 29 BE, MMSRadhakrishnan (Finance)Manager

26. Shri Sanjay 39 B.Com, M.Com,Kumar. I.C.W.A,Manager MBA,

CAIIB-I,Certificate


the Employeesof UTI

27. Shri Jayant 38 B.A. (Honours),Akhaury MBA, PGManager Diploma in

ComputerScience

28. Shri J. Praveen 36 B.Com,Assistant CAIIB-I,Manager Certificate

Examinationof IIBfor the

Employeesof UTI

29. Shri Sunil Patil 37 B.Com,Manager M.Com,

CAIIB-I,Certificate


the Employeesof UTI,MBA


59

XXIII. INVESTORS’ GRIEVANCESREDRESSAL

1. All investors could refer their grievances giving fullparticulars of investment at the following address:

Shri K P GhoshUTI-AMC (P) Ltd.UTI Tower, Gn Block,Bandra - Kurla Complex,Bandra (East),Mumbai - 400 051Tel:5678 6666

2. Investor Complaints redressal record:

(a) Complaints received, redressed and pending forUTI for 01-04-2002 to 31-03-2005 are :

Period Received No of Pending Pending toComplaints TotalRedressed Received

01-04-2002 to31-03-2003

60020 60020 0 Nil

01-04-2003 to31-03-2004

112798 112798 0 Nil

01-04-2004 to

31-03-2005163782 163782 0 Nil

(b) Schemewise details of complaints received,redressed and pending for the period 01/12/2004to 30/11/2005 are given below:

SCHEME NAME RECEIVED REDRESSED PENDING %

UTI - BALANCE FUND (US95) 30 30 0 0.00%

UTI - BOND ADVANTAGE FUND 136 136 0 0.00%

UTI - BOND FUND 567 545 22 3.88%

UTI - CHILDREN CAREERPLAN (BOND) 224 221 3 1.34%

UTI - CHILDREN CAREERPLAN (BALANCE) 3520 3489 31 0.88%

UTI - CRTS 22 22 0 0.00%

UTI - DIVIDEND YIELD FUND 2125 2111 14 0.66%

UTI - DYNAMIC EQUITY FUND 352 349 3 0.85%

UTI - EQUITY FUND (MG'92) 42096 41817 279 0.66%

UTI - ETSP 53 53 0 0.00%

UTI - FIXED MATURITY PLAN 2 2 0 0.00%

UTI - FLOATING RATE FUND 51 51 0 0.00%

UTI - G-SEC FUND 140 134 6 4.29%

UTI - GCGIP 11 11 0 0.00%

UTI - GILT ADVANTAGE FUND 18 18 0 0.00%

UTI - GRANDMASTER 35 32 3 8.57%

UTI - GROWTH & VALUE FUND 613 611 2 0.33%

UTI - GSEC-STP 116 104 12 10.34%

UTI - GSF SOFTWARE 296 286 10 3.38%

UTI - GSF - BRAND VALUE 114 103 11 9.65%

UTI - GSF - PETRO FUND 1055 1020 35 3.32%

UTI - GSF - PHARMA &HEALTH FUND 137 129 8 5.84%

SCHEME NAME RECEIVED REDRESSED PENDING %

UTI - GSF - SERVICE SECTOR 314 292 22 7.01%

UTI - GUP 89 89 0 0.00%

UTI - HUS 1 1 0 0.00%

UTI - INDEX ADVANTAGE FUND 11 11 0 0.00%

UTI - INDEX SELECT FUND 338 338 0 0.00%

UTI - INDIA ADVANTAGEEQUITY FUND 259 258 1 0.39%

UTI - LIQUID ADVANTAGE FUND 4 4 0 0.00%

UTI - LIQUID FUND CASH PLAN 13 13 0 0.00%

UTI - LIQUID FUND SHORTTERM PLAN 7 7 0 0.00%

UTI - MASTER INDEX FUND 5 5 0 0.00%

UTI - MASTER PLUS 15802 15519 283 1.79%

UTI - MASTER VALUE FUND 201 193 8 3.98%

UTI - MASTERGROWTH 663 662 1 0.15%

UTI - MASTERSHARE 3258 3230 28 0.86%

UTI - MEPUS 1075 1073 2 0.19%

UTI - MIS ADVANTAGE PLAN 59 59 0 0.00%

UTI - MNC FUND 676 671 5 0.74%

UTI - MONEY MARKET FUND 17 17 0 0.00%

UTI - MUS 33 33 0 0.00%

UTI - NIFTY INDEX FUND 14 14 0 0.00%

UTI - OPPORTUNITY FUND 344 338 6 1.74%

UTI - PEF UNIT SCHEME 83 80 3 3.61%

UTI - RBP 801 793 8 1.00%

UTI - MONTHLY INCOME SCHEME 1016 959 57 5.61%

UTI - SCUP 560 560 0 0.00%

UTI - THEMATIC - AUTOSECTOR FUND 5 5 0 0.00%

UTI - THEMATIC - BANKINGSECTOR FUND 6 6 0 0.00%

UTI - THEMATIC - BASICINDUSTRIES FUND 10 10 0 0.00%

UTI - THEMATIC - LARGECAP FUND 6 6 0 0.00%

UTI - THEMATIC - MID CAP FUND 3 3 0 0.00%

UTI - THEMATIC - PSU FUND 1 1 0 0.00%

UTI - ULIP 3727 3675 52 1.40%

UTI - US 2002 1140 1127 13 1.14%

UTI - VARIABLEINVESTMENTS SCHEME 105 105 0 0.00%

TOTAL 82359 81431 928 1.13%

Reasons for pending complaints are:

(i) Non-receipt of application/funds from the collectingbanks.

(ii) Incomplete details of the investor in the applicationincluding address, name and signature of theinvestor.

(iii) Change of address of investor not informed/notupdated.


60

(iv) Loss in transit.

(v) Postal delay.

(vi) Non-submission of required documents in case oftransfer/death claims/redemption

(vii) Incomplete details while forwarding the complaints.

(viii) Non-receipt/ Delayed receipt of commission.

(ix) Letters/Documents sent to the wrong off ice/Registrars.

XXIV. PENALTIES, PENDING LITIGATION ORPROCEEDINGS, FINDINGS OF INSPECTIONS OR

INVESTIGATIONS FOR WHICH ACTION MAY HAVEBEEN TAKEN OR IS IN THE PROCESS OF BEING

TAKEN BY ANY REGULATORY AUTHORITY

1. All cases of penalties awarded by SEBI under theSEBI Act or any of its regulations against theSponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacityincluding the Asset Management Company, TrusteeCompany/Board of Trustee or any of the directors orkey personnel (specifically the fund managers) ofthe Asset Management Company and TrusteeCompany. The nature of penalty must be disclosed.For Sponsor and its associates, other than thepenalties as mentioned above, the penalties awardedby any financial regulatory body, including stockexchanges, for defaults in respect of shareholders,debenture holders and depositors should bedisclosed. Additionally, penalties if any awarded forany economic offence and violation of any securitieslaws need to be disclosed.

(a) On December 20, 2001, Bank of Baroda, New Yorkpaid US$13,500 to the U.S. Department of Treasury,Office of Foreign Assets Control (OFAC) towardssettlement to resolve the allegations set forth inOFAC’s Prepenalty Notice dated August 21, 2001.Out of this amount, US$4,500 was contributed byIndo-Zambia Bank Ltd., and the remaining amountwas borne by the branch.

The properties which were the subject matters ofthe Prepenalty Notice were disposed off as under:

(i) On November 27, 2001, Bank of Baroda, NewYork received US$44,945.17 from JP MorganChase Bank, New York, being the amountblocked plus interest. Out of this amount$4,500 was retained by the branch towards thepor t ion of the sett lement amount and$40,495.17 was returned to Indo Zambia BankLimited.

(ii) The amount of US$9,107.41 was returned toBank of Baroda, Zaveri Bazar Branch, Mumbai,in accordance with the authorization receivedfrom the office of Foreign Assets Control, andconfirmed to OFAC vide letter dtd. August 10,1999.

(iii) The amount of US$21,628 was returned toBank of Baroda, Mumbai Main Office, Mumbai,in accordance with authorization received fromthe office of Foreign Assets Control, andconfirmed to OFAC vide letter dtd. December6, 1999.

(b) Penalt ies imposed against Li fe InsuranceCorporation of India (Amount in Rs.):-

For 2003-2004 (Rs. in crore) - Litigation pending beforeIT authorities:

Income-tax Rs.6.78Interest tax R0.17.02Tax on Profit Rs.260.12

(c) A penalty of Rs. 1 lac each has been imposed on LICMutual Fund and Jeevan Bima Sahyog AssetManagement Co. Ltd. for violation of investment normsas per SEBI (Mutual Funds) Regulations, 1996 videadjudication order dated 31/12/2002. The same hasbeen paid of by both LIC Mutual Fund and Jeevan BimaSahyog Asset Management Co. Ltd.

(d) Punjab National Bank had gone public in March 2002and since then no penalty has been imposed by SEBIexcept in three cases of public issue as under:

(i) In public issue of M/s Elvis India Ltd. SEBIimposed a penalty of warning to the bank tobe more careful in future vide its letter dated03.09.2002 because the branch office atAhmedabad, Navrangpura had accepted 40applications with stock invest after closure ofthe issue in January 1995

(ii) In public issue of M/s Dhanlakshmi LeaseFinance Ltd. SEBI vide letter-dated 19.10.2002imposed a penalty of debar to the branch officeat Ahmedabad, Relief Road, for six months forundertaking any bankers to issue businessbecause the branch had accepted applicationsafter closing date of issue in November -December 1995 and failed to maintain properrecords pertaining to the issue.

(iii) In public issue of M/s. Maha Chemicals Ltd.,SEBI imposed 2 months de-authorization of theAhmedabad, Shahibaug branch office videorder dated 10.09.03 effective for 3 weeks fromthe date of the order.

(e) PNB Asset Management Company

SEBI on 29.03.01 imposed a penalty of Rs.2 (two)lacs for violating clause 10 of Regulation 44 (1) ofVII schedule of SEBI (MFs) Regulations, 1996.

1999- 2000- 2001- 2002-2000 2001 2002 2003

1.Penalties under — 45847 85275 578878various statutes

2.Penalty and 414309 151741 22157 74273Interest underIT Act


61

(f) State Bank of India

(i) Securities and Exchange Commission of USAhas concluded that SBI violated Sections 5 (a)and (c) of the Securities Act, by offering andselling securities i.e. Resurgent India Bonds, thatwere not registered with the commission. Hence,it ordered that SBI cease and desist, pursuant toSection 8A of the Securities Act, from committingor causing any violation and any future violationof Sections 5 (a) and (c) of the Securities Act.SBI accepted this Order without admitting ordenying the findings contained in this Order. Nomonetary penalty was involved.

(ii) Bank’s US operations were subjected to a C&DOrder and a Civil Money Penalty of USD 3.75mio to Federal Reserve Bank and FederalDeposit Insurance Corporation and a CivilMonetary Payment of USD 3.75 mio to New YorkState Banking Department without admitting toany of the allegations in the C&D Order.

(iii) In INMB Bank, a subsidiary in Nigeria, CentralBank of Nigeria imposed a penalty of Naira1,100,000 (USD 8730 only) for proceduralirregularities pointed out by them.

(iv) A settlement amount of Euro 163,028.12 waspaid by Frankfurt Branch in the year 2002 infull satisfaction of a notification received fromthe German Regulators alleging exceeding ofexposure norms, which was purely technicalin nature and there was no deliberate violationof any regulatory provisions.

(vi) Bijzondere Opsporing Brigade (BOB), Belgiumregistered a case in 1997 against keypersonnel of SBI, Antwerp branch for allegedviolation of the tax laws of the BelgiumCommission for Banking and Finance. Thecase is presently sub-judice.

(vi) A C & D Order issued against SBI and its USoperations by the US Regulators on 13/11/2001was terminated on 13/10/2004

(vii) INBL, the Bank’s partly owned subsidiary inNigeria, was required to pay N2.5 mio. (Rs.8.25lacs) to National Accounting Standard Board,Nigeria for certain omission in the AnnualReport for the year ending March 2005.

(g) State Bank of Indore

(i) SEBI has warned the Bank to exercise morecare and diligence as a Merchant Banker videtheir letter No. IES/ID3/UN/AJS/9404/2002. dt.29.5.2002 in case of M/s. Saket ExtrusionsLtd.

(ii) Due to default in maintenance of adequateCRR during 1990-91, RBI had levied netpenalty of Rs.95 lacs on the Bank which waspaid in September 2000 / April 2001.

(h) State Bank of Saurashtra

SEBI had undertaken an inquiry on the public issueof M/s. Tirupati Finlease Ltd., Ahmedabad, broughtout during 8.1.96 to 10.1.96, wherein the Bank actedas one of the Bankers to the issue. The subject ofinquiry was suspected acceptance of applicationsby the Bank’s Shahibaug, (Ahmedabad) branch afterthe closure date of the issue. Pursuant to the inquiry,a penalty for suspension of Shahibaug (Ahmedabad)branch from undertaking any Banker to the Issueactivity for a period of three months was imposed,vide SEBI judgement dt. 31.1.2000. The case hassince been closed.

(i) State Bank of Travancore

(i) A penalty of Rs.5 lacs was imposed by RBI onaccount of certain irregularities with respect toopening of accounts and non-monitoring oflarge value cash transactions by the Bank’sChavakad and Mumbai branches and the samewas paid on 19.9.2002.

(ii) Pursuant to a complaint made by ConsumerResearch and Education Centre (CREC),Ahmedabad that Ahmedabad branch of theBank accepted share applications even afterthe stipulated date of closure of the public issueof M/s. Kengold India Ltd. in 1994, RBIconducted a detailed investigation and directedthe Bank not to conduct the business ofaccepting share applications at Ahmedabadbranch till 31st December 1996. Later, onconsideration of the remedial measures takenby the Bank, RBI permitted resumption of thebusiness w.e.f. 1st January 1997.

In April 1996, SEBI called for the explanationof the Bank for the inordinate delay inrealisation of cheques collected for thecaptioned issue. The Bank furnished itsexplanation which was accepted by SEBI. Apetition filed by CREC before the Delhi HighCourt in the matter was dismissed in Sept.1999.

(j) SBI Commercial & International Bank Ltd.

(i) RBI, vide letter No. DBOD No.1722/12.07.059/99 dt. 15.02.99, had observed that the Bankhas defaulted in maintenance of CRR for fourfortnights during the quarter ended March1998. RBI advised the Bank to pay a penaltyof Rs.10,230/, which was paid by the Bank on08.03.99.

(ii) RBI, vide letter No. DBOD No.1725/12.07.059/99 dt. 15.02.99, had observed that the Bankhas defaulted in maintenance of CRR for fourfortnights during the quarter ended June 1998.RBI advised the Bank to pay a penalty ofRs.3,11,664/-, which was paid by the Bank on08.03.99.


62

Further, RBI did not pay the interest on eligibleCRR balances for the above mentioned twoquarters, to the Bank.

(iii) The Enforcement Directorate had issued aShow Cause Notice in March 2000 to one ofthe Bank’s customers as well as to its groupcompanies and an addendum in November2002 to various banks and their respectiveofficers, including SBICI Bank Ltd. The Officeof the Special Director of Enforcement, Govt.of India, Ministry of Finance, Deptt. of Revenue,Mumbai imposed a penalty of Rs.3.5 lacs inSeptember 2003 on the Bank for contraventionof the provisions of Exchange Control Manual /Foreign Exchange Regulation Act, 1973. TheBank preferred an appeal before the AppellateTribunal for Foreign Exchange, New Delhi,against the aforesaid order, who waived the pre-deposit of the penalty amount (in January 2004).

(k) SBI Capital Markets Ltd.

Penalties levied by Stock Exchange for delay insubmission of Margin Certificates, late / non-submission of client data Rs.44,800/- during May,2002 to May, 2005.

2. Any pending mater ial l i t igat ion proceedingsincidental to the business of the Mutual Fund towhich the Sponsor of the Mutual Fund or anycompany associated with the Sponsor in anycapacity including the AMC, Board of Trustees/Trustee Company or any of the directors or keypersonnel is a party. Any pending criminal casesagainst the Sponsor or any company associated withthe sponsor in any capacity including the AMC, Boardof Trustees/Trustee Company or any of the directorsor key personnel.

(i) A Special Leave Petition was filed by theIncome Tax Department before the Hon’bleSupreme Cour t of India against theJudgements and Orders of Hon’ble High Courtof Bombay in the matter of applicability ofInterest Tax, which is pending.

(ii) There are 24criminal cases pending against theUTI MF or key personnel relating to normaloperation of UTI MF such as non-transfer ofunits, non-receipt of unit certificates, non-receipt of redemption proceeds, closure of thescheme/plan or income distribution. Thesecases are not maintainable and judging fromour experience such cases are either dismissedby Courts or withdrawn by the complainant. Inmost of the cases stay has been obtained fromthe High Courts.

(iii) There are two writ petitions pending before theHonourable Bombay High Court against theSEBI and UTI MF arising out of the winding upof UTI Growth & Value Fund – Bonus Plan witheffect from 01.02.2005 in pursuance to circular

dated 12.12.2004 of SEBI seeking prayers interalia, to declare the circular dated 12.12.2003illegal, unenforceable in law, to issue directionsto set aside the decisions to wind up the UTIGrowth & Value Fund – Bonus Plan. Thematters are pending for hearing before theHonourable Court.

(iv) On the basis of their investigation in the matterof investment in The Cyberspace Ltd. made bythe erstwhile UTI, the Central Bureau ofInvest igat ion has ini t iated appropr iateproceedings in the competent court againstShri P.S.Subramanyam (Ex-Chairman), ShriS.K. Basu and Smt. Prema Madhuprasad(officials of UTI AMC) and promoter directorsof The Cyberspace Ltd.

(v) There are 2 criminal cases, 3 suits and 2 writpetitions pending against SBI Capital MarketsLtd. during the last 3 years.

3. Any deficiency in the systems and operations of theSponsor of the Mutual Fund or any companyassociated with the sponsor in any capacity includingthe AMC or the Trustee Company which SEBI hasspecifically advised to be disclosed in the offerdocument, or which has been notified by any otherregulatory agency. -NIL

4. Any enquiry/adjudication proceedings under theSEBI Act and the Regulations made thereunder,that are in progress against the Sponsor of theMutual Fund or any company associated with theSponsor in any capacity including the AMC, Boardof Trustees/Trustee company or any of the Directorsor key personnel of the Asset ManagementCompany.

(a) SEBI has directed Bank of Baroda to refund a sumof Rs. 40,31,018/- together with interest @ 15% p.a.from 25.03.1996 i.e. the day bank allowed withdrawalof the funds by Jaltarang Motels Ltd. in respect offunds collected from Public Issue in terms of orderdated 19.01.2000 issued under Section 11B of SEBIAct. Detailed instructions on the method and mannerof refund to the investors in the public issue are tobe advised by SEBI separately in consultation withthe intermediaries concerned. Bank of Baroda hadpreferred an appeal against the said order to theAppellate Authority. The Appellate Authority namelySecurities Appellate Tribunal has considered andrejected the Bank’s appeal by order dated27.07.2000. The Bank has challenged the order ofthe Appellate Authority in the Mumbai High Courtby filing Appeal No. 2 of 2000 under provisions ofSection 152 of the SEBI Act, 1992. Later, on13.11.2000 the single judge of the Mumbai HighCourt Mr. Justice F. I. Rebello has granted interimrelief of stay of the operation of the orders dated27.07.2000 of Securities Appellate Tribunal and19.01.2000 passed by SEBI and further directed thatthe matter be placed on board for final hearing.


63

(b) At the time of sanctioning credit facilities to TridentSteels Ltd. in the year 1987/89, Bank of Baroda, hadobtained undertaking from the promoters/ directors/major shareholders that they would not dispose offthe shares unless permission is obtained from theBank. Public issue of the Company was leadmanaged by Bank of Baroda in November 1993.SEBI has alleged non disclosure of undertaking of1987/89 given by promoters/ directors/ majorshareholders in the Prospectus by the Lead Managerto the issue. Bank has replied to the notice of SEBI.Inquiry is pending.

(c) Public issue of Kraft Industries Ltd., which came inMay 1995, was lead managed by Bank of Baroda. Itis alleged that the Managing Director and Promoterof the Company did not possess the qualificationsas mentioned in the Prospectus. SEBI has askedfor qualification certificates/ copies from Bank. TheManaging Director of the Company has reportedhaving lost the certificates in transit. Bank has repliedaccordingly to SEBI. Inquiry is pending with SEBI.

(d) In the public issue of M/s. Majestic Industries Ltd. atthe Sector 17 B Chandigarh branch office of PunjabNational Bank SEBI has alleged that issue had notbeen ful ly subscr ibed on the day of closure(10.04.96). There was a delay of 10-12 days inclearance of cheques enclosed with application.SEBI was pleaded that delay in clearance was dueto rush of closing work at the controlling branch. Staffside is initiated and SEBI is requested to close thefile. SEBI issued a show cause notice dated 15.12.04which was replied vide out letter dated 31.12.04.

(e) In Public issue of M/s. Growmore Solvent Ltd. at BO:Navrangpura, Ahmedabad, SEBI alleged that branchnot only issued stock invests but also acceptedapplications subscribing to IPO (1994) and thesewere also used for another company M/s. SaketExtrusions Ltd. SEBI was informed that bank hadalready taken appropriate action against the officer.SEBI vide letter dated 12.03.04 recommended apenalty of debarring the branch from carrying outactivities of Bankers to the Issue for a period of 1month. The branch is already deauthorised by theBank to conduct Merchant Banking Business.

(f) In respect of PNB Capital Services Ltd. (sincemerged with Punjab National Bank), SEBI allegedthat in the issue of M/s. Mefcom Markets Ltd.,erstwhile PNB Caps as lead Manager did notindependently verify the claims of the issuercompany for charging Rs.60/- per share for a shareof Rs.10/- but instead relied upon the statement ofthe company. SEBI proposed warning to erstwhilePNB Caps for the violation. SEBI has been requestedto take lenient view as erstwhile PNB Caps acteddiligently and in compliance with the then existingguidelines of SEBI. Moreover, erstwhile PNB CapitalServices stands merged with PNB. SEBI vide ordersdated 18.2.05 has censured the bank.

(g) State Bank of Patiala

An investigation by SEBI regarding alleged irregularitiesin connection with Rights issue of M/s. Majestic IndustriesLtd. against one of the branches which was designatedto collect applications is under process at present.

(h) SBI Mutual Fund

Apart from the ordinary routine litigation incidentalto the business of the Fund, the following petition /summary suit against the Fund is pending in Courts.

(i) A summary Suit filed by M/s. Morarka FinanceLimited in 1996 is pending in the High Court ofJudicature at Mumbai. The Plaintiff has filedthe suit for recovery of Rs.8.44 lakhs togetherwith interest being the excess price paid bythem in equity buyback transaction relating tothe shares of M/s. Pumpsar Distilleries Ltd.

(ii) A writ petition was filed in 1997 in the HighCourt of Karnataka at Bangalore by an investor,alleging debit of higher expenses resulting insuppression of returns. The Court has directedSEBI to examine the accounts and direct thesponsor and the asset management companyto take necessary remedial action, if needed.

(i) SBI Capital Markets Ltd.

SBI CAP had received a show cause notice dated19.9.02 from SEBI regarding method of acceptanceof open offer in Hindustan Zinc Limited. Pursuant toSBICAP explaining the position to SEBI, a meetingwas held with SEBI Chairman on 20.11.02. Noresponse has been received from SEBI.

XXV CONDENSED FINANCIALINFORMATION

The condensed financial information for the periods01.07.2002 - 31.01.2003, 01.02.2003-31.03.2004 and forthe year ended 31.03.2005 for all the schemes launchedduring the last three years is annexed.

Notwithstanding anything contained in the offer documentthe provisions of the SEBI (Mutual Funds) Regulations,1996 and the Guidelines thereunder shall be applicable.

The Board of Directors of UTI Trustees Company Pvt. Ltd.in its meeting held on September 22, 2005 approved thescheme under this offer document.

For and behalf of the Board of Directors of

UTI Asset Management Company Private Limited

Sd/-(A. K. Sridhar)Chief Investment OfficerPlace: MumbaiDate: 16th December, 2005

Note : The investors may also like to ascertain about anyfurther changes after the date of the offer document fromUTI Financial Centres/ Franchise offices /Authorisedcollection centres/Chief Representatives or Agents.

UT

I-Leadership Equity F

und (UT

I-LEF

)

64

XXV. CONDENSED FINANCIAL INFORMATION

(i) HISTORICAL PER UNIT STATISTICS

Scheme UTI MIS UTI VIS Large Cap Mid Cap Basic Auto Banking PSU$ (12.09.2002) $ (07.11.2002) Fund Fund Industries Sector Sector Fund

$(09.03.04) $(09.03.04) Fund Fund Fund$(09.03.04) $(09.03.04) $(09.03.04) $(09.03.04)

31.01.03 01.02.03- 31.03.05 31.01.03 01.02.03- 31.03.05 31.03.05 31.03.05 31.03.05 31.03.05 31.03.05 31.03.0531.03.04 31.03.04

NAV at the beginning of the year 10.0000 10.0391 12.3498 10 10 10 10 10 10

Income Option - 10.2537 10.4531

Growth Option 10.0000 10.3170 11.5074

Net income per unit 0.25 0.66 0.49 0.02 2.96 2.13 1.48 1.88 0.63 0.96 1.96 0.09

Income Distribution: (%) 0.65 8.9 5.050 - 12.00 12.00 - 10 12 - - -

Transfer to reserves per unit - - - - - - - - - - - -

NAV at the end of the year 10.04 12.3498 12.3411 11.40 13.15 12.20 11.80 12.74 11.23

Income Option 10.2537 10.4531 10.1644

Growth Option 10.3170 11.5074 11.8013

Annualised return (%) 3.17 9.48 6.71 0.40 25.47% 18.58 14 44.21 33.58 18 27.40 12.30(since inception)

Net assets at the end of the 197.56 309.33 375.72 104.03 60.63 54.55 24.19 48.70 147.18 38.10 49.91 27.83period (Rs. Crs)

Ratio of recurring exp. to net 1.52 1.57 1.18 1.93 1.61 2.50 1.77 1.94 1.93 1.81 1.89 1.78assets (%)

CAGR of benchmark index (%) 4.55 14.79 9.75 9.42++ 25.54++ 36.09++ 11.65 66.74 12.62 11.65 26.53 4.22

2.36▲▲ 8.80▲▲ 4.71▲▲


65

SC

HE

ME

UT

I-U

S 2

002

UT

I LI

QU

ID✰✰✰✰ ✰

UT

I LI

QU

ID F

UN

DS

UN

DE

RC

CP

Bon

dU

TI-

G-S

EC

ST

PF

UN

D S

TP

CA

SH

PLA

N$

15.1

1.20

02$(

23.0

6.03

)$(

23.0

6.03

)$(

11.0

7.03

)$(

19.0

1.04

)$(

24.1

1.03

)31

.01.

2003

01.0

2.03

-31

.03.

0501

.02.

03-

31.0

3.05

01.0

2.03

-31

.03.

0501

.02.

03-

31.0

3.05

01.0

2.03

-31

.03.

2005

01.0

2.03

-30

.03.

0531

.03.

0431

.03.

0431

.03.

0431

.03.

0431

.03.

0431

.03.

04

NA

V a

t th

e b

eg

inn

ing

of

the

11

6.1

65

01

78

.79

31

pe

rio

d

Inco

me

Op

tion

-5

.76

00

8.3

31

0.0

01

0.0

62

51

0.0

01

0.0

53

21

0.0

01

0.0

35

51

0.0

01

0.1

56

6

Gro

wth

Op

tion

5.5

50

05

.76

00

8.3

31

0.0

01

0.4

06

21

0.0

01

0.3

59

91

0.0

01

0.0

35

51

0.0

01

0.1

56

7

Mo

nth

ly O

ptio

n1

0.0

70

9

Inco

me

In

stitu

tion

al

10

.06

24

Gro

wth

In

stitu

tion

al

10

.36

22

Mo

nth

ly I

nst

itutio

na

l1

0.1

01

5

We

ekl

y In

stitu

tion

al

10

.06

20

Ne

t in

com

e p

er

un

it0

.09

1.6

01

.21

0.4

0-0

.07

0.1

13

6.4

71

03

.01

21

.59

0.0

00

.12

0.1

70

.31

Inco

me

dis

trib

utio

n (

%)

p.a

.-

--

3.0

53

.25

02

.72

-2

.50

--

-2

.25

Div

id P

lan

3.9

84

5Q

tly D

ivid

Pla

n-

Mth

ly D

ivid

Pla

n4

.00

We

ekl

y D

ivid

In

stit

3.8

75

Mo

nth

ly D

ivid

. In

stn

.4

.00

Da

ily D

ivid

. In

stn

.3

.98

85

Tra

nsf

er

to r

ese

rve

s (i

f a

ny)

--

--

--

--

--

--

-

NA

V a

t th

e e

nd

of

the

pe

rio

d1

78

.79

31

20

7.1

58

8

Inco

me

Op

tion

-8

.33

9.3

51

0.0

62

51

0.1

77

41

0.0

53

21

01

1.5

56

10

.03

55

10

.06

46

10

.15

66

10

.26

5

Gro

wth

Op

tion

5.7

68

.33

9.3

51

0.4

06

21

0.8

85

71

0.3

59

91

08

5.3

63

41

0.0

35

51

0.0

64

61

0.1

56

71

0.4

95

2

Mo

nth

ly O

ptio

n1

0.0

70

91

01

2.5

66

2In

com

e O

ptio

n (

Inst

n)

10

.09

04

10

.06

24

10

13

.72

74

Gro

wth

Op

tion

(In

stn

)1

0.4

09

41

0.3

62

21

08

7.0

11

4M

on

thly

div

ide

nd

(In

stn

)1

0.1

01

51

01

6.9

99

8W

ee

kly

div

ide

nd

(In

stn

)1

0.0

62

01

01

4.8

09

1

An

nua

lise

d r

etu

rn (

%)

3.7

83

4.2

72

4.5

24

.06

4.9

13

.60

4.7

45

3.9

14

1.0

30

.36

0.5

41

.57

3.6

4(s

ince

ince

ptio

n)

Ne

t a

sse

ts e

nd

of

the

pe

rio

d4

67

.19

49

9.8

74

77

.75

67

2.5

25

9.9

03

20

2.7

72

57

2.0

52

47

.25

20

0.4

32

.99

28

.12

95

.42

76

.76

(Rs.

Crs

)

Ra

tio o

f re

curr

ing

exp

. to

ne

t2

.19

1.4

02

.26

0.4

40

.62

0.3

80

.40

0.5

00

.45

0.4

51

.74

0.2

00

.42

ass

ets

(%

)

CA

GR

of

Be

nch

ma

rk in

dex

5.1

63

7.3

02

4.2

43

.16

4.0

63

.16

4.1

45

2.0

74

1.2

90

.85

0.8

62

.02

4.0

2(%

) (s

ince

ince

ptio

n)

Am

t. in

Rs.

$

Da

te o

f la

un

ch,

++

BS

E S

EN

SE

X

▲▲

Co

mp

osi

te B

on

d I

nd

ex.,

All

figu

res

as

on

31

/03

/20

05

are

un

au

dite

d a

nd

th

ere

fore

pro

visi

on

al.

✰ f

ace

va

lue

ch

an

ge

d t

o R

s. 1

00

0/-


66

'05

'04

'03

'05

`04

'05

`04

'05

`04

'05

'05

NA

V a

t the

beg

inni

ng o

f the

yea

r (R

s./U

nit)

Div

iden

d O

ptio

n10

.640

111

.211

210

.325

011

.48

-10

.018

5-

--

--

Mon

thly

Div

iden

d O

ptio

n-

--

--

--

10.1

337

--

-

Gro

wth

Opt

ion

13.8

955

12.2

170

10.3

250

14.0

4-

10.2

814

-10

.133

7-

--

Fle

xi D

ivid

end

Opt

ion

--

--

--

-10

.133

7-

--

Mon

thly

Pay

men

t Opt

ion

--

--

--

-10

.133

7-

--

PF

-Div

iden

d O

ptio

n10

.340

1-

--

--

--

--

PF

-Gro

wth

Opt

ion

10.3

409

--

--

--

--

--

PF

-Pre

scrib

ed D

ate

Aut

o R

edem

ptio

n10

.339

5-

--

--

--

--

-O

ptio

n

PF

-Pre

scrib

ed A

ppre

ciat

ion

Aut

o10

.342

4-

--

--

--

--

-R

edem

ptio

n O

ptio

n

Net

Inco

me

per

unit

(Rs

/ Uni

t)0.

100.

3952

1.68

092.

031.

910.

230.

3306

0.65

0.14

820.

220.

04

Div

iden

d pe

r un

it (R

s.)

2.75

1.75

0.90

25.0

02.

504.

335

0.24

653.

90-

--

Tran

sfer

to R

eser

ves

-1.

403.

65-

1.44

-0.

33-

0.09

--

Ann

ualis

ed R

etur

ns %

(S

ince

ince

ptio

n)10

.64

16.1

918

.34

70.4

540

.40

4.93

2.81

6.71

1.33

2.00

0.35

Ben

chm

ark

Ret

urns

%N

A-

16.2

226

.64

33.3

04.

122.

293.

802.

491.

750.

50

Net

Ass

ets

at th

e en

d of

per

iod

(Rs.

Cr.)

89.8

360

.71

5.50

103.

5469

.25

1027

.25

9.31

32.6

213

9.07

144.

7511

4.33

NA

V a

t the

end

of t

he y

ear

(Rs.

/Uni

t)

Div

iden

d O

ptio

n10

.285

310

.640

111

.211

16.2

611

.48

10.0

599

10.0

185

--

10.1

994

10.0

353

Mon

thly

Div

iden

d (R

einv

estm

ent)

--

--

--

--

--

Opt

ion

(MD

RP

)

Gro

wth

Opt

ion

13.8

084

13.8

955

12.2

170

22.9

314

.04

10.7

944

10.2

814

10.8

745

10.1

325

10.1

999

10.0

353

PF

-Div

iden

d O

ptio

n10

.275

810

.340

1-

--

--

--

-

PF

-Gro

wth

Opt

ion

10.2

759

10.3

409

--

--

--

--

-

PF

-Pre

scrib

ed D

ate

Aut

o R

edem

ptio

n10

.274

910

.339

5-

--

--

--

--

Opt

ion

PF

-Pre

scrib

ed A

ppre

ciat

ion

Aut

o10

.285

710

.342

4-

--

--

--

--

Red

empt

ion

Opt

ion

Mon

thly

Div

iden

d O

ptio

n-

--

--

--

10.4

463

10.1

325

--

Fle

xi D

ivid

end

Opt

ion

--

--

--

-10

.874

810

.132

5-

-

Mon

thly

Pay

men

t Opt

ion

--

--

--

-10

.866

410

.132

5-

-

Rat

io o

f rec

urrin

g ex

pens

e to

net

ass

ets

(%)

1.36

1.50

1.57

2.48

2.50

0.73

0.75

1.74

1.73

0.32

0.20

# sc

hem

es la

unch

ed d

urin

g th

e ye

arA

ll fig

ures

as

on 3

1/03

/200

5 ar

e un

audi

ted

and

ther

efor

e pr

ovis

iona

l.A

bso

lute

re

turn

giv

en

wh

ere

sch

em

es

hav

e n

ot

com

ple

ted

on

e y

ea

r.

SC

HE

ME

SU

TI-

GA

F-L

TP

UT

I-D

EF

UT

I-F

RF

-ST

PU

TI-

MIS

-AP

# U

TI -

FMP

# U

TI -

FMP

YFM

P/1

104

YFM

P/0

205

Dat

e of

Allo

tmen

t21

.01.

0210

.09.

0329

.08.

0316

.12.

03


67

HISTORICAL PER UNIT STATISTICS

Schemes NAV as on Annualised16/11/2005 return since

inception (%)

UTI-MUS 20.8722 16.96

UTI-MIS 12.4302 7.08

UTI-VIS 13.9633 18.97

UTI-US 2002 10.87 25.06

UTI-Liquid Fund

Cash Plan 1122.8641 4.94

Cash Plan Institutional 1125.3671 5.08

Short Term Plan 11.2776 5.13

SUNDER 261.1031 42.27

UTI-G-SEC - STP 10.8643 4.27

UTI CC BOND PLAN 10.5139 2.78




UTI-Auto Sector Fund 15.43 29.25



UTI-GAF-LTP 14.3315 9.87

UTI-DEF 27.81 59.65

UTI-FRF- STP 11.1841 5.17

UTI-MIS-AP 12.1315 10.58

UTI-FMP - (YFMP/1104) # 10.5836 5.84

UTI-FMP - (YFMP/0205) # 10.4171 4.17

UTI-FMP - (YFMP/0705) # 10.1614 1.61

UTI-FMP - (YFMP/0905) # 10.0704 0.70

UTI-Dividend Yield Fund # 11.6700 16.70

UTI-Opportunity Fund # 11.4200 14.20

Schemes NAV as on Annualised16/11/2005 return since

inception (%)

# Simple Avg. Return

CORPORATE OFFICE

UTI Tower, ‘GN’ Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051. Tel: 56786666

UTI FINANCIAL CENTRESWESTERN REGION

Mumbai: (1) Lotus Court Building, 196, Jamshedji Tata Road, Backbay Reclamation, Mumbai-400020, Tel:22024473/4435 (2) UTI Tower, ‘GN’Block, Bandra-Kurla Complex, Bandra (E), Mumbai-400051, Tel:56786666 (3) Unit No.2, Block ‘B’, Opp. JVPD Shopping Centre, Gul Mohar CrossRoad No.9, Andheri (W), Mumbai-400049, Tel:26201995 (4) Shraddha Shopping Arcade, 1st Floor, S.V. Road, Borivali (West), Mumbai-400092,Tel:28980521, (5) Sagar Bonanza, 1st Floor, Khot Lane, Ghatkopar (W), Mumbai-400086, Tel:25162256, (6) A-1, Ground Floor, Delphi OrchardAvenue, Hiranandani Gardens, Powai, Mumbai – 400 076, Tel:55536797, Ahmedabad: UTI House, Near Mithakhali Railway Bridge, Off. AshramRoad, Ahmedabad-380 009, Tel:26583864, Baroda: ‘Meghdhanush’ 4th & 5th Floor, Transpek Circle, Race Course Road, Baroda-390 015, Tel:336962,Bhopal: 1st Floor, Ganga Jamuna Commercial Complex, Plot No. 202, Maharana Pratap Nagar, Zone-1, Scheme 13, Habeeb Ganj, Bhopal-462001, Tel:2558308, Indore: City Centre, 2nd Floor, 570, M.G. Road, Indore-452 001, Tel:2533869, Kalyan: Ground Floor, Jasraj Commercial Complex,Chitroda Nagar, Vallifer Station Road, Kalyan (West)-421 301, Tel:5607981, Kolhapur: Ayodhya Towers, C.S.No.511, KH-1/2, ‘E’ward, DabholkarCorner, Station Road, Kolhapur-416 001, Tel:2657315, Nagpur: Shree Mohini Complex, 3rd Floor, 345, Sardar Vallabhbhai Patel Marg (Kingsway),Nagpur-440 001, Tel:536893, Nasik: Sarda Sankul, 2nd Floor, M.G.Road, Nasik-422001, Tel:2572166, Panaji: E.D.C. House, Ground Floor, Dr.A.B. Road, Panaji, Goa-403 001, Tel:2222472, Pune: (1) Sadashiv Vilas, 3rd Floor, 1183 Fargusson College Road, Shivaji Nagar, Pune-411005,Tel:5535954, (2) City Pride, 1st Floor, Plot No.92/C, D III Block, MIDC, Mumbai-Pune Highway, Chinchwad, Pune-411 019, Tel:56337240, Raipur:Vanijya Bhavan, Sai Nagar, Jail Road, Raipur-492 009, Tel:2551414, Rajkot: Lallubhai Centre, 3rd Floor, Lakhaji Raj Road, Rajkot-360 001, Tel:2235112,Surat: Saifee Bldg., Dutch Road, Nanpura, Surat-395 001, Tel:3474550, Thane: UTI House, Near Thane P&T Office, Opp. Rickshaw Stand, StationRoad, Thane (W)-400 601, Tel:5400905, Vashi: Ground Floor, Indian Institute of Capital Markets (formerly UTI-ICM Building), Plot no.82, Sector 17,Vashi, Navi Mumbai – 400 703. Tel:27893918/2249.

EASTERN REGIONKolkata: (1) 99 Park View Appt., Rash Bihari Avenue, Kolkata - 700 029, (2) 29, Netaji Subhash Chandra Road, Kolkata-700 001, Tel:22434581, (3)AD-55, Salt Lake City, Sector-1, Kolkata-700 064, Bhubaneshwar: OCHC Bldg., 1st & 2nd Floor, 24, Janpath, Kharvela Nagar, Nr. Ram Mandir,Bhubaneshwar-751 001, Tel:2396995, Durgapur: 3rd Administrative Bldg., 2nd Floor, Asansol Durgapur Dev. Authority, City Cebtrem Durgapur-713216, Tel:2546831, Guwahati: Hindustan Bldg., 1st Floor, M.L. Nehru Marg, Panbazar, Guwahati-781001, Tel:521870, Jamshedpur: 1-A, RamMandir Area, Gr. & 2nd Floor, Bistupur, Jamshedpur-831 001, Tel:0657-2756075, Patna: Jeevan Deep Bldg., Gr. & 5th Floor, Exhibiton Road, Patna-800 001, Tel:2235001, Siliguri: Jeevan Deep, Ground Floor, Gurunanak Sarani, Silliguri-734 401, Tel:2536671.

NORTHERN REGIONNew Delhi: (1) Savitri Bhawan, 1st & 2nd Floor, Plot no.3 & 4, Preet Vihar community Centre, Delhi 110092, Tel: 22529374, 22529376 (2) GulabBhavan, 2nd Floor, 6, Bahadurshah Jafar Marg, New Delhi-110 002, Tel:23739492, 23311108 (3) Jeevan Bharati, 13th Floor, Tower II, ConnaughtCircus, New Delhi-110 001, Tel:23731404, 23731403 (4) G-5-10 Aggarwal Cyber Plaza, Netaji Subhash Place, Pitam Pura, Delhi – 110 034,Tel:27351001, (5) G-7, Hemkunt Tower (Modi Tower), 98, Nehru Place (Near Paras Cinema), New Delhi-110 019, Tel:28898128, Agra: GroundFloor, Jeevan Prakash, Sanjay Place, Mahatma Gandhi Marg, Agra-282 002, Tel:2858046, Allahabad: 4, Sardar Patel Marg, 1st Floor Civil Lines,Allahabad-211 001, Tel:2561016, 2561028 Amritsar: 69, Court Road, Amritsar-143001, Tel:564388, Chandigarh: Jeevan Prakash LIC Bldg.,Sector 17-B, Chandigarh-160 017, Tel:703683, Dehradun: 56, Rajpur Road, Hotel Classic International, Dehradun-248 001, Tel:743203, Faridabad:B-614-617, Nehru Ground, NIT, Faridabad-121 001, Tel:5424771, Ghaziabad: 41, Navyug Market, Near Singhani Gate, Ghaziabad-201 001,Tel:4790366, Jaipur: Anand Bhavan, 3rd Floor, Sansar Chandra Marg, Jaipur-302 001, Tel:365212, Jodhpur: Minerva Centre, 1st Floor, StationRoad, Jodhpur-342 001, Tel:2645229, Kanpur: 16/79-E, Civil Lines, Kanpur-208 001, Tel:304278, Lucknow: Regency Plaza Building, 5, ParkRoad, Lucknow-226 001, Tel:2238628/2238598, Ludhiana: Sura Kiran Phase ll, 92, The Mall, Ludhiana-141 001, Tel:441264, Shimla: Flat No. 401,402, 403, 405 Mukesh Apts., Fingask Estate, Near Hotel Sheel Shimla-171 002, Tel:2657803, Varanasi: 1st Floor, D-58/2A- 1, Bhawani Market,Rathyatra, Varanasi-221 001, Tel:358306.

SOUTHERN REGIONChennai: (1) UTI-House, 29, Rajaji Salai, Chennai-600 001, Tel:25243059, (2) W 123, III Avenue, Annanagar, Chennai – 600 040, Tel:55720030, (3)1st Floor, 29, North Usman Road, T Nagar, Chennai-600 017, Tel:55720011/12, Bangalore: (1) Raheja Towers, 26-27, 12th Floor, West Wing,M.G.Road, Bangalore-560 001, Tel:25585382 (2) No.60, Maruthi Plaza, 8th Main, 18th Cross Junction, Malleswaram West, Bangalore-560 055, Tel.: 080-23340672 Cochin: Jeevan Prakash, 5th Floor, M.G. Road, Ernakulam-682 011, Tel:362354, Coimbatore: U R House, 1st Floor, 1056-C,Avinashi Road, Opp. Nilgiris Dept. Stores, Coimbatore-641 018, Tel:2214973/74/75, Hubli: Kalburgi Mansion, 4th Floor, Lamington Road, Hubli-580020, Tel:2363963, Hyderabad: (1) 1st Floor, Surabhi Arcade, 5-1-664, 665, 669, Bank Street, Hyderabad-500 195, Tel:4611095, (2) 6-3-679, FirstFloor, Elite Plaza, Opp. Tanishq, Green Land Road, Punjagutta, Hyderabad-500 082, Tel:040-23417246, (3) 10-99/1, Ground Floor, Sterling GrandCVK, Road No. 3, Next to HDFC Bank, West Marredpally, Secuderabad-500 026, Tel:27711524, Madurai: Tamil Nadu Sarvodaya Sangh Bldg., 108,Thirupparakundram Road, Madurai-625001, Tel:2333765, Mangalore: 1st Floor, Essel Tower, Bunts Hostel Circle, Mangalore-575 003, Tel:2426290,Thiruvananthapuram: Swastik Centre, 3rd Floor, M.G. Road, Thriuvananthapuram-695 001, Tel:331415, Trichy: 104, Salai Road, Woraiyur,Tiruchirapalli-620 003, Tel:2760060, Trichur: 28/700 West Pallithamam Bldg., Karunakaran Nambiar Road, Round North, Trichur-680 020, Tel:331259,Vijaywada: 27-37-156, Bunder Road, Next to Hotel Manorama, Vijaywada-520 002, Tel:571134, Vishakhapatnam: Ratna Arcade, 3rd Floor, 47/15/6, Station Road, Dwarkanagar, Vishakhapatnam 530 016, Tel:748121.

UTI NRI CELLUTI Tower, ‘GN’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai-400 051, Tel:56786064 • Fax 26528175

E-mail: [email protected]

OFFICE OF THE REGISTRARM/s. Computer Age Management Services Pvt. Ltd. (CAMS)

A & B Lakshmi Bhavan, 609 Anna Salai, Chennai - 600 006.

DUBAI REPRESENTATIVE OFFICEPost Box No. 29288, 17, Al Maskan, Karama, Dubai, U.A.E. Tel: 0097-1-4- 3356656 • Fax: 3356636.

BAHRAIN REPRESENTATIVE OFFICE16, Ground Floor, Manama Centre, Post Box 1395, Manama, Bahrain Tel: 00973-17-212410 • Fax: 212415 P

rint

ed b

y A

lco

Cor

pora

tion

Te

l. 2

4983

737/

38

Uti-leadership Equity Fund OD

Documents

Transcript of Uti-leadership Equity Fund OD