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UNIT TRUST OF INDIA Unit Scheme 2002 (US 2002) Offer Document
The Unit Scheme 2002 (US 2002) has been formulated under section 21 of the Unit Trust of India Act 1963 (52 of 1963) by the Board of Trustees of Unit Trust of India (UTI).
This offer document sets forth concisely the information about the scheme that a prospective investor ought to know before investing. The offer document should be retained for future reference. The offer document will remain effective for a 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, an addendum will be prepared and attached to the offer document. The addendum will also be circulated to the existing members.
The statutory provisions included in the offer document are general and indicative in nature and are neither exhaustive nor any particular investor specific.
The scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with the Securities and Exchange Board of India (SEBI). The units offered for public subscription have not been approved or disapproved by the SEBI, nor has the SEBI certified on the accuracy or adequacy of the offer document. UTI functions under the provisions of Unit Trust of India Act, 1963. UTI is not registered with SEBI. However, UTI on a voluntary basis complies with SEBI (Mutual Funds) Regulations, 1996 as amended from time to time.
Objective of the scheme This is an open-end balanced scheme. The scheme aims at providing income distribution/ cumulation of income and capital appreciation over a long term from a prudent portfolio mix of equity and fixed income securities.
Highlights
II. DUE DILIGENCE CERTIFICATE
Due Diligence Certificate submitted to SEBI for Unit Scheme 2002 (US 2002)
It is confirmed that:
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 well informed decision regarding investment in the proposed scheme;
IV. All the intermediaries named in the offer document are registered with SEBI and till date such registration is valid.
Date: __/__/____ M Sebastian Place : Mumbai Compliance Officer
CONTENTS
III. DEFINITIONS In the scheme unless the context otherwise requires:
IV. RISK FACTORS
Scheme specific risk CRISIL Balanced Fund Index will be the benchmark for the scheme. The composition of the Index is Nifty Index 60% Composite Bond Index 40%. Due to asset allocation range defined under the investment pattern (please see clause {V (1) (b)}), the performance of the scheme (NAV) could be at wide variance with the benchmark index.
V. INVESTMENT OBJECTIVES, POLICIES & SECURITIES LENDING
1. Investment Objective
On division of assets from existing US 64, it may happen that asset allocation of US-2002, may not be in line with the investment objective stated above. US 2002 would endeavor to comply with the investment objective stated above within 3 months from the opening of the scheme.
2. Fundamental Attributes (a) "Fundamental attributes" in the context of the scheme will be
(b) Any change in the fundamental attributes of the scheme will be carried out only if:
3. Investment Policies
Subject to SEBI (MFs) Regulations, guidelines on the investment from time to time:
(l) The scheme shall invest not more than 10% of its NAV in the equity shares or equity related instruments of any company. (m) The scheme shall invest not more than 5% of its NAV in the unlisted equity shares or equity related instruments.
(n) CRISIL Balanced Fund Index will be the benchmark for the scheme. The composition of the Index is Nifty Index 60% Composite Bond Index 40%. Due to asset allocation range defined under the investment pattern above {(V (1) (b)}, the performance of the scheme (NAV) could be at wide variance with the benchmark index. (o) Procedure followed at UTI for taking investment decisions:
The Investment setup The dealing and fund management functions at UTI are segregated into separate & independent functions. The broad procedure followed at UTI for taking investment decisions is summarised as follows: (i). The investments of each scheme are managed by a designated Fund Manager on a regular basis. The fund manager constructs the appropriate portfolio in the light of the scheme objectives, prudential exposure norms, fund size, tenure of the scheme, and the liquidity required for income distribution considering the normal repurchases, redemption etc. All the investment decisions are based on scheme�s investment objectives, internal guidelines, regulatory restrictions etc. The portfolio is continuously monitored based on the research inputs, present & expected market conditions, future outlook on the economy/sectors/individual scrips and fresh inflows/outflows in the scheme with a view to optimise the return under the scheme. The Fund Manager's operational strategy and its implementation are reviewed by the Chief Investment Officer on an ongoing basis and by the Asset Management Committee consisting of external eminent persons at regular intervals. (ii). Equity Research Cell (ERC) is an internal set-up with analysts tracking specific sectors, which provides regular inputs to the fund managers on stocks/industries/sectors, implication of Govt./RBI policies and trends in international markets. The fund managers and research analysts interact regularly through meetings and presentations. These inputs are discussed thoroughly in these meetings. The fund managers and equity analysts visit companies to obtain all publicly available information on company performance/management perspectives. The fund managers also attend company presentations as well as presentations by external research outfits / broking firms on company / industry performance. (iii)Primary market investments: The investments in Initial Public Offerings and Private Placements in primary market are screened and scrutinised by a separate primary market team under Department of Dealing. On the basis of this team�s information and research reports, the fund managers give their recommendation on the proposals keeping in mind the schemes� investment objectives, internal guidelines and SEBI guidelines. Such proposals are approved by Primary Market Investment Committee /Chairman / Executive Committee of the Board of Trustees / Board of Trustees. (iv) Secondary market investments : Fund Managers also interact with research analysts of UTI and dealers on regular basis. The fund managers also have access to external sources of data from analysts, publicly available information about company / sector etc. The fund manager prepares a strategy paper for the scheme on periodic basis, which is discussed with senior management of UTI. Investment proposals are referred to senior management of UTI if it exceeds the limits laid down by the internal guidelines. Finally, these investment decisions made by the Fund Managers are executed by dealing department. (v) Inter Scheme Transfers : The inter-scheme buy and sale transactions are effected as per the SEBI (Mutual Funds) Regulations. (vi) There are three Asset Management Committees (AMCs) to review the activities of the three fund management functions. The role of the AMC is to 1. Oversee from time to time that a scheme broadly adheres to its objectives, the guidelines laid down by UTI General Regulations, SEBI (Mutual Funds) regulations and the Prudential Guidelines laid down by UTI Board of Trustees. 2. Review scheme performance regularly and advise fund managers on the future course of action to be adopted. 3. Address other key issues such as product designing, marketing, investor servicing and compliance of the scheme 4. Examine and advise on the taxation and accounting policy related aspects of a scheme 5. Make recommendations to the Executive Committee/Board of Trustees as the AMC may consider necessary. 6. The proceedings of the AMCs are reported in the form of minutes to the Board of Trustees for its information and guidance, at regular intervals.
(p) Portfolio Turnover Portfolio Turnover is defined as the aggregate of Purchases and Sales as a percentage of the corpus of the scheme during a specified period of time. The scheme�s portfolio management style is conducive to low portfolio turnover rate. However, the scheme will take advantage of the opportunities that present themselves from time to time because of the inefficiencies in the securities markets. A high portfolio turnover rate in the equity component of the portfolio may represent arbitrage opportunities that exist for scrips held in the portfolio. The scheme will endeavour to balance the increased cost on account of higher portfolio turnover with the benefits derived therefrom.
(q )Participating in Derivative Products:
Consider a portfolio of the size of Rs. 100 crore having the following asset composition: Equity Rs. 90 crore Cash Rs. 10 crore Beta of Portfolio 1.1 If at any time, the investment manager is not optimistic on the market and/or expects it to decline, he/she may with a view to immunising the portfolio from such decline, decide to sell index futures. In this case, the ideal value of futures contracts to be sold so as to achieve a perfect hedge would be 1.1(90) equal to Rs.99 crore. Supposing that index futures at that time are selling at 4300 level. The number of contracts to be sold by the investment manager (assuming a lot size of 50 per contract - Rs.99 crore/ 4300 x50) will be 4600 (rounded off).
(Sale price per contract: 50(4300) Covered Price per contract = 50 (3900) Profit per contract = 50(400) = 20000 Total Profit = 4600 (20000) = Rs. 9.2 crore The net loss on the hedged portfolio will stand reduced to just Rs. 0.7 crore (i.e Rs.9.9 - Rs.9.2) as against the expected loss of Rs. 9.9 crore had the portfolio having remained unhedged.
The cost which the scheme will have to bear will be the opportunity cost which will be the interest, in this case, on the margin money amount in the case Rs. 9.9 crore (assuming the margin specified by the Exchange is 10% of the value of the futures contract) and the brokerage.
(b) Numerical example to illustrate the risk and return ensuing from trading in debt derivatives: These are customised over the counter products and there is no guarantee that these products will be available on tap. Example: The portfolio has debt securities of Rs 1000000 with duration of 5 years If the fund manager has a view that the interest rates are expected to move up, he may sell 100 no. of 5 year interest rate forward contracts� with a tick size of100 @ Rs 100mailto:100@Rs100 . If the interest rates rise by 1% over one month, the price of the interest forward contracts� would fall to around Rs 95/-, resulting in profit of Rs 50000/- on the forward contracts. Similarly, the erosion in value of portfolio with a duration of 5 years due to rise in the interest rate by 1% would be at around 5% i.e (Rs 100000*.05)=Rs. 50000. Thus the loss in portfolio erosion is set off by profit from futures transaction. At same time, if the interest rates fall, the profit in the portfolio would be offset by the loss on the �interest rate forward contracts�.
(r) Debt market in India
� Maturity � Fixed or on Demand � Coupon - Pre-determined rate of interest or linked to specified benchmark � Pre determined redemption value � Rights of bond holders different from that of shareholders � Secured or unsecured instrument � Debenture Trustees for secured investment � Credit quality of the instrument on basis of rating.
(iii) The various elements of the debt market are:
(iv) The instruments available and the likely yields in this segment are:
VI. UNITS & OFFER
Any residents or NRIs as well as non-individuals as indicated below can make an application for units:
Note: The scheme is not an offer to any resident/citizen of United States of America. No person residing in the United States of America can apply for the units or acquire them.
5. Amount of investment
6. Bank account particulars of applicant / member & Electronic Clearing Service (ECS):
(iii) At his banker in India for safe custody.
8. Periodic Investment Plan (PIP): (a) Members/applicants after making the initial investment of Rs.5000/- can invest minimum of Rs.1000/- and in multiples thereof at monthly/quarterly intervals for a continuous period of atleast 6 months (i.e 6 cheques for monthly and 2 cheques for quarterly). This concept is called rupee cost averaging. (b) Exercise of PIP is subject to the provision of `Termination of the scheme� detailed in this offer document. (c) Investment under the PIP is explained by means of the following illustration. The sale prices indicated in the table are based on assumed NAV on the first day of the corresponding month.
This is only an illustration and should not in any way be construed as any indication of performance of the scheme.
9. Direct payment through employers UTI may enter into arrangements with employers to accept investment under the plan on behalf of/for the benefit of their employees or dependants on such terms as may be announced from time to time. 10. Book Closure Period / Record Date The sale and repurchase of units shall remain open throughout the year except during book closure period/s not exceeding 15 days in a year. Besides, record date/s may be announced for distribution of income. 11. Suspension of Sale and Repurchase of units UTI may decide to temporarily suspend determination of NAV of the Scheme offered in this Document, and consequently sale and repurchase of units, in any of the following events: a) When one or more stock exchanges or markets, which provide basis for valuation for a substantial portion of the assets of the Scheme are closed otherwise than for ordinary holidays. b) When, as a result of political, economic or monetary events or any circumstances outside the control of UTI, the disposal of the assets of the Scheme is not reasonable, or would not reasonably be practicable without being detrimental to the interests of the members. c) In the event of breakdown in the means of communication used for the valuation of investments of the Scheme, without which the value of the securities of the Scheme cannot be accurately calculated. d) During periods of extreme volatility of markets, which in the opinion of UTI are prejudicial to the interests of the members of the Scheme. e) In case of natural calamities, strikes, riots and bandhs. f) In the event of any force majeure or disaster that effects the normal functioning of UTI or the Registrar. g) If so directed by SEBI. h) The sale of units may also be suspended if, in the Trustees view, increasing the Scheme's size any further may prove detrimental to the existing unitholders.
In the above eventualities, the limits indicated in the Offer Document, for processing of requests for sale and repurchase of units will not be applicable. 12. Switchover
Steps are being taken to delist the units of the scheme from all the stock exchanges where it is presently listed as the units of the scheme are available for sale and repurchase throughout the year except during the book closure period/s.
VII. SALE OF UNITS
(a) The price at which a unit will be sold by the UTI is hereinafter referred to as "Sale Price". (b) The sale price of units will not exceed 103% of NAV as at the close of the day on which the application is accepted. Currently sale of units is at NAV. The actual load on sales would be decided by the Trust from time to time. Any change in load will be applicable for prospective investments. The change in load structure would be communicated to investors appropriately. The contract for sale of units by UTI shall be deemed to have been concluded on the date of acceptance except in case application is rejected by UTI under clause VII (4) below. The sale price will be arrived at which will be in line with SEBI formula as under: Sale Price = Applicable NAV *(1 + Sales Load, if any). For example: If the applicable NAV is Rs 10.00; sales/entry load is 2 per cent then the sales price will be Rs 10.20. (c) The sale price will not be higher than 107% of the NAV and the repurchase price will not be lower than 93% of the NAV. The actual load on sales and repurchases would be decided by the Trust from time to time, which shall be within the above limits. (d) The difference between the repurchase price and the sale price of the unit shall not exceed 7% calculated on the sale price or as per the limit prescribed by SEBI from time to time. (e) For sale and repurchase price will be declared daily. (e)In respect of all applications for sale/repurchase received and accepted at UTI branch/UTI Financial Centres (UFCs)/Registrar�s office/authorised collection centres with CMS/any other authorised centre as may be prescribed by UTI from time to time by 2 p.m. or such other time as may be prescribed by UTI from time to time on a particular day the applicable NAV will be that of the same day. All applications received and accepted after 2 p.m. or such other time as may be prescribed by UTI from time to time will be governed by the NAV of the next working day at Mumbai. Accordingly, the application received after 2.00 p.m. or such other time as may be prescribed on any working Friday and the applications received on Saturdays and Sundays will be at the NAV applicable for the following Monday. If the following Monday happens to be a holiday in Mumbai, then the NAV applicable for the next working day in Mumbai will be applicable.
(f) Non-individual applications alongwith required documents will be accepted only at UTI offices or as may be decided from time to time.
2. Resident applicants � Mode of Payment
3. NRI/OCB applications (a) Mode of Payment
Note: Investors may please note that Agents/Chief Agents/Chief Representatives(CRs)/Franchise offices (FOs) of UTI are not permitted to accept cash. UTI will not be responsible for such or any other wrong tender. However, the applicant can deposit cash at the bank account maintained by the CR/FO, in the name of UTI for purchase of units. CR/FO are authorised to issue an acknowledgement based on the original receipt challan issued by the bank concerned.
(b) Submission of applications by NRIs/OCBs
4. Right of UTI to accept or reject applications :
5. Requirement for admission in the scheme:
6. Units held under false declaration:
7. Nomination
III. EXPENSES:
Initial issue expenses for the schemes launched by UTI during the financial year 2001-2002 : No new schemes were launched by UTI during the year 2001-2002. The initial issue expenses of UTI Mahila Unit Scheme the latest scheme launched by UTI were 4.81% of the funds collected.
2. Recurring expenses (a) The following estimated expenses incurred under the respective heads would be charged to the scheme on a recurring basis. The estimate is subject to change inter se as per actual expenses incurred during any year.
3. Contribution to Development Reserve Fund (DRF)
4. Contribution to Staff Welfare fund (SWF) A sum not exceeding 0.10% p.a. of average daily net assets shall be set aside as contribution to the SWF. UTI has instituted the SWF for the welfare of its employees which shall include relief in distress, medical relief, health relief or for similar other purposes.
A Sum equal to 0.65% p.a. of the daily average net assets shall be set aside as contribution to GF. UTI has instituted GF to incur administrative expenses of the Trust which are common in nature and which cannot be related to any scheme directly.
6. Member�s Transaction expenses
IX. TRANSFER/PLEDGE/ASSIGNMENT OF UNITS 1. Units issued under the scheme are transferable/pledgeable/assignable. Units covered by the SOA/MA issued under the scheme will not be transferable except subject to clause IX (3). 2. Pledge/Assignment of units permitted only in favour of banks/other financial institutions: The members may pledge/assign units in favour of banks/other financial institutions as a security for raising loans. Units can be pledged by completing the requisite forms/formalities, as may be required, whereupon UTI will record a pledge/charge/lien against units pledged. As long as the units are pledged, the pledgee bank/financial institution will have complete authority to redeem or transfer such units. In case of units pledged no repurchase/transfer/switchover/changeover will be permitted unless accompanied by the charge release certificate in original, issued by the pledgee. 3. For pledge/assignment of units held in dematerlised form, the members should approach their Depository Participants(DPs). 4. Members who are holding SOA/MA will first have to obtain on a specific request Unit Certificate in lieu of SOA/MA in a manner as approved by UTI from time to time. Unit certificates will be issued within 30 days from the date of receipt of such request on a plain paper. Transfer of units in such cases will be subject to following terms and conditions.
X. INCOME DISTRIBUTION & CAPITALISATION
1. The member shall have a choice to join either the Income option or the Growth option. (a )In cases where neither of the options is exercised by the applicant/member at the time of making his investment or subsequently he will be deemed to be under the Growth Option and his application will be processed accordingly. Further, existing investments under the scheme which are below Rs.5000/- will be considered under the Growth Option only. (b) The provisions of the scheme will apply to both the plans and only where any provision varies details thereof will be indicated separately. (c) NAV of Income option and Growth option will be different after the declaration of first dividend. 2. Income Option
Payment of income distribution to NRI/OCB members will be made in the manner indicated under clause XIII (9) respectively subject to compliance with the requirements prescribed by RBI from time to time.
3. Growth option Ordinarily no income distribution will be made under this option. All income generated and profits booked will be ploughed back and returns shall be reflected through the NAV.
4. Changeover A member may be permitted to change the mode of payment of income distribution from Payout to Reinvestment plan or vice versa. Similarly members may be given an option to changeover from Income to Growth option or vice versa on such terms and conditions as UTI may specify in that regard. Request for any changeover should be submitted in the prescribed Composite Service Form duly signed by all the members under the folio along with the duly discharged latest statement of account (SoA) or as may be decided by UTI from time to time. The changeover between two options will be effected at the NAVs applicable for the respective options.
5. Capitalisation and issue of bonus units under Growth and Income Options
XI. REINVESTMENT OF INCOME DISTRIBUTED
XII. REPURCHASE OF UNITS 1. The repurchase price will be arrived at which will be in line with SEBI formula as under: Repurchase Price = Applicable NAV *(1 - Exit Load, if any) Repurchase will be as follows:
4. Repurchase applications can be deposited at all the branch offices/UFCs/offices of the Registrar of the scheme/Chief Representative Collection Centres or Franchise Offices. The Trust may add or delete any authorised centre. 5. In respect of all applications for repurchase received and accepted at UTI branch / Registrar�s office/authorised collection centres with CMS/ any other authorised centre as may be prescribed by UTI from time to time by 2 p.m. or such other time as may be prescribed by UTI from time to time on a particular day the applicable NAV will be that of the same day. All applications received and accepted after 2 p.m. or such other time as may be prescribed by UTI, from time to time will be governed by the NAV of the next working day at Mumbai. Accordingly, the application received after 2.00 p.m. or such other time as may be prescribed on any working Friday and the applications received on Saturdays and Sundays will be at the NAV applicable for the following Monday. If the following Monday happens to be a holiday in Mumbai, then the NAV applicable for the next working day in Mumbai will be applicable. 6. For applications tendered at the authorised collection centres without CMS or such other authorised collection centres as may be prescribed by UTI from time to time the applicable NAV will be that which is applicable for the date on which such application is received at the Registrars� office, but not beyond the 5th working day (T+5) from the date of receipt (T) of the application at these places. 7. Repurchase will be effected on receipt of the unit certificate/ Membership Advice/ Statement of Account / ADU statement alongwith the repurchase request slip/composite service form or such document duly completed in all respects as may be prescribed by UTI from time to time. 8. Cheque for repurchase proceeds shall be despatched within 10 working days from the date of receipt of an application on the repurchase slip/ composite service form or any such other document as may be prescribed from time to time at the centre where the repurchase requests are processed for requests which are complete in all respects. In the event of any delay in despatch of repurchase cheque beyond 10 working days from the date of receipt of the repurchase application at the centre where repurchase requests are processed, UTI shall pay an interest @ 15% p.a. or at such rate as may be prescribed by SEBI from the 11th working day to the date of despatch. 9. Partial repurchase under a folio has to be for a minimum of Rs.1000/-. Partial repurchase shall be permitted subject to the member maintaining a minimum balance of Rs.5,000/- to be reckoned with reference to the repurchase price applicable as on the date of acceptance of the repurchase application. In case the partial repurchase request of the member is such that the residual balance of units in the folio is below Rs.5000/- the member will be required to revise the repurchase request such that the minimum balance of Rs.5000/- is maintained or the entire outstanding units is repurchased. Units will be repurchased on First-in-First-Out (FIFO) basis and the member's unitholding account will be debited to that extent. 10. No interest shall, on any account, except under sub clause 12 above be payable on the amount of repurchase due to the applicant as prescribed by SEBI.
Notwithstanding anything contained in any provision of the scheme, UTI shall not be under any obligation to sell or repurchase units: (i) on such days on which UTI offices are closed in the State of Maharashtra or such other states where UTI has its offices: and (ii) during the period (not exceeding 15 days in a year) when the register of members of the scheme is closed for any purpose as notified by UTI. (iii) on such days on which UTI decides not to sell/repurchase units as indicated in clause VI (11). 14. Right to limit Redemptions UTI may, in the general interest of the members of the Scheme offered under this Offer Document and keeping in view the unforeseen circumstances/unusual market conditions, limit the total number of units which may be redeemed on any working day to 5% of the total number of units then in issue, or such other percentage as UTI may determine. Any units, which by virtue of these limitations are not redeemed on a particular Working Day, will be carried forward for redemption to the next Working Day, in order of receipt by UTI. Redemption so carried forward will be priced on the basis of the applicable NAV of the Working Day on which redemption is made. Under such circumstances, to the extent multiple redemption requests are received at the same time on a single Working Day, redemptions will be made on a pro-rata basis, based on the size of each redemption request, the balance amount being carried forward for redemption to the next Working Day (s). In case a member redeems units soon after making purchases the redemption cheque may not be despatched until sufficient time has elapsed to provide reasonable assurance that cheques or drafts for units purchased have been cleared. 15. Settlement of claims arising on the death of a member In the event of the death of the unit holder/member, the joint holder(s)/nominee/legal representative of the member may if he is otherwise eligible for joining the scheme as member, be permitted to hold the units and become a member. In that event a fresh SOA /membership advice will be issued in his name in respect of units so desired to be held subject to the condition regarding minimum holding and compliance with the required procedure as may be prescribed by UTI from time to time. If the joint holder/nominee/ legal representative of the member is not eligible to join the scheme or he though eligible, opts for repurchase and also in cases where no nomination is made, the claimant (i.e. joint holder/nominee/legal representative of the member, as the case may be) on surrender of the unit certificate/membership advice/latest SOA of the deceased member and on due compliance with the procedural requirements, as may be prescribed by UTI for recognition of such claims, shall be paid repurchase proceeds of the units outstanding to the credit of the deceased member as on the date of such surrender. TERMINATION OF THE SCHEME
XIV. INTER-SCHEME TRANSFERS
Transfer of investments from /to this scheme to/from other schemes/plans of UTI shall be done only if-
XV. ASSOCIATE TRANSACTIONS & BORROWINGS 1. Associate Transactions: Purchase and sale of securities through UTI Securities Exchange Ltd. during a block of any three months shall not exceed 5% of aggregate purchase and sale of securities under all the schemes of UTI. 2. Units distributed and commission paid to UTI Bank and UTI ISL in the last three years for marketing and distributing schemes
(c) Total business done and the commission paid to our Associate Broker UTI-SEL during the last 3 years. (Amount in Rs. Lacs)
Borrowings: 1. The scheme shall not borrow except to meet temporary liquidity needs of the scheme for the purpose of repurchase, redemption of units or payment of interest or income to the members. Provided that the scheme shall not borrow more than 20% of the net asset of the scheme and the duration of such a borrowing shall not exceed a period of six months.
2. As per section 20 of the Act UTI has the following borrowing powers:
Provided that any amount borrowed under this clause and outstanding at any one time shall not exceed-
2. Valuation of assets (a) Traded investments, except government securities, are valued at the closing market rates on the valuation date and in its absence, the latest available quote within a period of thirty days prior to the valuation date. If no quotes are available for a period of thirty days prior to the valuation date, the same is treated as non-traded investment. When a debt security (other than Government Securities) is not traded on any stock exchange on any particular valuation day, the value at which it was traded on the principal stock exchange or any other stock exchange, as the case may be, on the earliest previous day may be used provided such date is not more than fifteen days prior to valuation date. When a debt security (other than Government Securities) is purchased by way of private placement, the value at which it was bought may be used for a period of fifteen days beginning from the date of purchase. When trading in an equity/equity related security (such as convertible debentures, equity warrants, etc.) in a month is both less than Rs. Five lacs and the total volume is less than fifty thousand shares, it is considered as thinly traded security and valued as per norms set down for non traded equity shares. For example, if the volume of trade is one lac and value is Rs. Four Lacs , the share does not qualify as thinly traded. Also if the volume traded is forty thousand, but the value of trades is Rs. six lacs, the share does not qualify as thinly traded. A debt security (other than Government Securities) shall be considered as a thinly traded security if on the valuation date, there are no individual trades in that security in marketable lots (Currently Rs 5 crore) on the principal stock exchange or any other stock exchange. In order to determine whether the security is thinly traded or not, the volumes traded in all major recognised stock exchanges in India is taken into account. (b) Government securities are valued based on the prices released by an agency suggested by AMFI and for those securities whose prices are not provided by an agency suggested by AMFI the valuation is based on yield curve provided by UTI-Department of Research Policy and Planning. (c) In case of quoted debentures and bonds, the market rate, being cum-interest, the same is adjusted for the interest element if any. (d) Right entitlements for shares are valued at market price reduced by the exercise price payable, further discounted for dividend element, wherever applicable. (e) Unquoted preference shares/cumulative convertible preference shares are taken at cost. (f) Non-traded/thinly traded equity securities are valued on fair valuation basis as per the valuation principles laid down below: (i) Based on the latest available Balance sheet, net worth is calculated as follows: Net worth per share =[share capital + reserves (excluding revaluation reserves)- misc. expenditure and Debit balance in P&L A/c] divided by number of paid up shares. (ii) Average capitalisation rate (P/E ratio) for the industry is taken and discounted by 75%. EPS of the latest audited annual account is considered for this purpose. (iii) The value as per the net worth value per share and the capital earning value calculated as above is averaged and is further discounted by 10 % for illiquidity so as to arrive at the fair value per share. Further, if the value so arrived is higher than the last traded rate within 18 months from valuation date, the last traded rate discounted by 10 % for illiquidity is applied for valuation. (iv) In case an individual non-traded /thinly traded equity security accounts for more than 5% of the total assets of the scheme, an independent valuer is appointed for the valuation of the said security. To determine if a security accounts for more than 5 % of the total assets of the scheme, it shall be valued as per the procedure prescribed for non-traded/thinly traded equity and the proportion which it bears to the total net assets of the scheme to which it belongs shall be compared on the date of valuation. (g) Valuation of Non traded/Thinly traded Debt securities: i) Debt Securities where at the time of purchase the residual maturity is of upto 182 days Debt securities purchased with residual maturity of upto 182 days is valued at cost (including accrued interest till the beginning of the day) plus the difference between the redemption value (inclusive of interest) and the cost spread uniformly over the remaining maturity period of the instrument. ii) Debt Securities where at the time of purchase the residual maturity is of more than 182 days In case of debt securities where the maturity is greater than 182 days at the time of purchase, the last valuation price (i.e. price prevalent on the 183rd day) plus the amortised value upto the date of valuation is used instead of purchase cost as given in the methodology stated at (i) above. iii) Non traded/Thinly Traded investment grade debt securities of over 182 days to maturity are valued on yield to maturity basis considering the rating and duration of the instrument as described below. (a) A risk free benchmark yield is built using the government securities as the base. (b) A matrix of spreads (based on the credit risk) are built for marking up the benchmark yields. (c)The yields so calculated above are Marked-up/Marked-down for liquidity risk. iv) UTI uses the matrix prepared by CRISIL to value its non-traded debt investment. (h) All Non Investment grade performing debt securities is valued at a discount of 25% to the face value. All unrated performing assets are valued on the same line. (i)All Non Government non-performing assets are valued based on the provisioning norms. (j) Valuation of debt securities with put/call options: (i)The securities with call option only is valued at the lower of the value as obtained by valuing the security to final maturity and valuing the security to call option. In case there are multiple call option, the lowest value obtained by valuing to the various call dates and valuing to the maturity date is to be taken as the value of the instrument (ii) Securities with Put option only is valued at the higher of the value as obtained by valuing the security to final maturity and valuing the security to put option. In case there are multiple put options, the highest value obtained by valuing to the various put dates and valuing to the maturity date is taken as the value of the instruments. Securities with both Put and Call option on the same day is deemed to mature on the Put/Call day and is valued accordingly. (k) Unquoted warrants are valued at the market rate of the underlying equity shares discounted for dividend element, if any, and reduced by the exercise price payable. In cases where the exercise price payable is higher than the value so derived, the value of warrants is taken as nil and where the exercise price is not available or the underlying equity is non-traded/unlisted, such warrants are valued at cost. l). Valuation of Convertible Debentures and Bonds (PCD(s) : Partly Convertible debentures, FCD(s): Fully Convertible debentures , OFCD(s) Optionally Convertible debentures) : The convertible debentures as above is broadly classified into �performing assets�(where the servicing by the company is regular) and �non-performing assets�. All convertible NPAs are valued at cost till their conversion into equity and provisions as per the existing norms are made regularly. After conversion, the same shall be valued as �quoted� or unquoted� as the case may be. In respect of debentures (performing) where servicing is regular , the following norms are followed upto their conversion . After conversion the same shall be valued as �quoted� or unquoted� as the case may be. (i) Conversion details available and underlying equity is quoted instrument
(ii) Conversion details available but underlying equity is unquoted instrument
(iii) Conversion details not available : Performing Assets :
(m) Capital Index bonds are valued at closing NSE market rates on the valuation date and in its absence the latest available quote within a period of thirty days prior to the valuation date. If no quotes are available for a period of thirty days prior to the valuation date, the same is valued based on whole sale price index. n) Valuation Norms for unlisted equity shares :- (i) The unlisted shares would be valued at the fair value. The fair value would be computed as the average of net worth per share and capitalised earning per share further discounted by 15 % for illiquidity. Net worth per share would be computed as the lower of : (a) Paid up capital plus free reserves minus intangible assets, deferred revenue expenditure and accumulated losses divided by the no. of paid up shares and (b) Net worth computed in the above manner after including outstanding warrants and options. (ii) Investments in unlisted companies emerging out of demerger would be valued at cost till the first balance sheet is available (within six months from the date of close of the accounting year) or till it is listed whichever is earlier. After the availability of balance sheet and if it still remains unlisted, it will be valued at fair value. If it remains unlisted and if the balance sheet is also not available within the stipulated time then the shares will be valued at zero.
(o) Valuation policies for Money Market instruments :- (i) The money invested in inter bank call market is taken at cost. (ii) The money invested in discount/interest earning instruments is valued at the yield at which the instrument was last traded. For this purpose the latest available quote within a period of two working days, prior to the valuation date is considered. When there are no quotes available in the last two working days, the instrument is valued at cost plus the difference between the face value and the cost, applied uniformly over the remaining maturity of the instrument. (iii) Other money market instruments, including unquoted debentures upto 182 days to maturity are valued at cost plus the difference between the face value and cost, applied uniformly over the remaining maturity of the instrument. (p) Valuation policies for derivatives : (i) The traded derivatives shall be valued at market price in conformity with the stipulations of SEBI (MFs) Regulations as amended from time to time. (ii) The valuation of untraded derivatives shall be done in accordance with the valuation method for untraded investments prescribed in SEBI (MFs) Regulations as amended from time to time.
XVIII. ACCOUNTING POLICIES 1. INCOME RECOGNITION: (a) Dividend income on listed equity shares is recognised on the ex-dividend date. Dividend income on unlisted equity shares is accrued on the date of declaration and dividend income of preference shares is accounted for on receipt basis.
(b) Interest on investments and commitment charges is accounted for on accrual basis. Once an asset is classified as non-performing (NPA), there is no further accrual of income on such assets.
(e) Underwriting commission is recognised as revenue on receipt basis when there is no devolvement. In case of devolvement, the full underwriting commission is reduced from the carrying cost of such investments. (f) Front-end fee on investments in shares and debentures is reduced from the carrying cost of such investments. (g) The difference between purchase price and the maturity value, in respect of zero coupon bonds, deep discount bonds and other long term discounted instruments is treated as income over the remaining life of the instrument on YTM basis. (h) Other income is accounted for on receipt basis. 2. EQUALISATION: In respect of schemes where units are sold/repurchased at NAV related prices, the amount of premium/discount on face value in the respective schemes is apportioned as under: (i) Amount equivalent to distributable income/deficit is credited/charged to revenue. (ii) The balance, if any, is credited/charged to Unit Premium Reserve/General reserve/Revenue appropriation account. 3. EXPENSES: Expenses are accounted for on accrual basis.
4. INVESTMENTS : (a)Investments are stated at cost or written down cost. (b) In case of secondary market transactions, investments are recognised on trade dates. (c) Subscription to primary market issues is accounted as investments, on allotment. (d) Bonus/right entitlements are recognised on ex-bonus/ex-right dates. (e) Investments viz., debenture/bonds, loans and deposits are transferred to current assets on the redemption/due date. (f) The cost of investments includes brokerage, service tax and stamp fees.
5. PROVISIONS AND DEPRECIATION:
Full Provision is made at quarter ends in respect of interest accrued and outstanding until the date the asset is classified as NPA. Full Provision is made in respect of dividend at month ends, where it remains outstanding for more than 120 days from the ex-dividend date/date of declaration of dividend (in case of unquoted shares). (ii) Investment Provision: Both secured and unsecured investments once they are recognised as NPAs are provided for in the manner as stated in the table below.
# As a percentage to the investment (book value)
(b) Principal repayment remaining outstanding on NPA is provided for in full. Provisions for such asset is made individually. Such provisions are not made for other performing assets of the same company.
(c) Write back of existing provisions: (i) In case a company has fully cleared all the arrears of interest, the interest provision to the extent made, is written back in full. (ii) The provision made for the principal amount is written back in the following manner: - (a) Where the provision on principal was made due to the interest defaults only such provision is written back at the end of the 2nd calendar quarter from the date of payment. (b) Where the provision on principal was made due to both interest and instalment defaults such provision is written back to the extent of 50% at the end of the 2nd calendar quarter, and 25% after 3rd calendar quarter and the balance at the end of 4th calendar quarter from the date of payment.
(d) Reclassification of asset: An asset is reclassified as �performing asset� only when the entire interest and/or instalment in default is repaid in full and the asset is serviced regularly over the next two quarters. (e) Provision for Discounted securities (Zero coupon), Deep Discount Bonds (DDB)/ Secured Promissory Notes (SPN), Cumulative Debentures etc.: (i) The assets may be classified as NPA on satisfaction of any two of the following three criteria:
(ii) Investment Provision is made as per the norms at point no. a (ii) above as soon as the asset is classified as NPA. When the rating of a DDB, which is an NPA, is downgraded to `D�, the provisioning will be done in a phased manner as applicable for normal NPA securities. Once the asset is classified as NPA, the interest accrued is also provided for in the full.
(f) Reschedulement of payment of an asset: In case any company defaults either interest or principal amount and UTI has accepted the proposal of revising the schedule payments, then the following norms are adhered to:
(g) Provision for non-performing assets are charged to Revenue Account and the write back of such provisions, if any, is credited to Revenue Account.
6.DEPRECIATION IN THE VALUE OF INVESTMENTS:
The aggregate value of investments as computed in accordance with clause XVII (2) above is compared to the aggregate cost of such investments and the resultant depreciation, if any, is charged/written back to Revenue Account from the year 2001-2002. 7. INCOME DISTRIBUTION : Provision for income distribution on unit capital is made at rates approved by the Board of Trustees. 8. PUBLICATION OF FINANCIAL RESULTS : Before expiry of one month from the date of close of each half year that is as on 31st December and 30th June UTI will publish unaudited financial results in prescribed format by SEBI in one national English daily and one Marathi daily circulating in Mumbai. The same would also be made available on websites of UTI and AMFI. However, if financial year of UTI is changed to April � March the disclosures would be made accordingly.
XIX. TAX TREATMENT OF INVESTMENTS
1. The information stated below is only for the purposes of providing general information to the members of the scheme. As in the case with any investment there can be no guarantee that the tax position prevailing at the time of investment in the scheme will endure indefinitely. In view of the individual nature of the tax consequences, each member is advised to consult his own consultant with respect to the specific tax implications arising out of his participation in the scheme. 2. For the purpose of tax treatment set out herein "Non Resident Indian (NRI)" shall have the meaning as defined under Unit Trust of India Act, 1963 (53 of 1963) (UTI Act). As per the UTI Act, "Non-Resident Indian (NRI)" means non-resident within the meaning of Clause (30) of Section 2 of the Income Tax Act, 1961 (43 of 1961) and a person shall be deemed to be a "person of Indian origin" if he or either of his parents or any of his grand parents howsoever high in degree of ascent, whether on the paternal side or on the maternal side, was born in India, as defined in the Government of India Act, 1935, as originally enacted. 3. The tax treatment as per the taxation laws in force as on the date of this offer document and tax benefits that are available to the investor are as under: (a) Any long term capital gain arising on repurchase of units by residents and also NRIs is subject to treatment indicated under Section 48 and 112 of the Income Tax Act, 1961. Long-term capital gains in respect of units held for more than 12 months is chargeable to tax @20% and 5% surcharge thereon after factoring the benefit of cost inflation index or tax at the rate of 10% and 5% surcharge thereon without indexation, whichever is lower. (b) Any short term capital gain arising on repurchase of units by residents and also NRIs is subject to the provisions of the Income Tax Act, 1961, as amended from time to time. (c) In accordance with Finance Act, 2002 with effect from 1st April 2002, Income tax will have to be paid by the members under the income option. The above amendment is made applicable in relation to Assessment Year 2003-2004. (d) For the Financial Year 2002-2003 Income tax is required to be deducted at source @ 10% + 5% surcharge thereon from the income distribution amount exceeding Rs.2500/- per year in the scheme under section 194K of Income Tax Act, 1961 for residents. (e) Eligible members who desire income distribution without deduction of tax at source may submit the Form 15H in the prescribed form and manner in duplicate if the total income in a financial year is below Rs.50,000/-. (f) Finance Act 2002 has revived the provisions of 196A, so as to provide for deduction of tax at source at the rate of 20% + 5% surcharge thereon from any income paid to a non-resident, not being a company, or to a foreign company, in respect of units of UTI acquired by them through payment from Non-Resident (Ordinary) Account. (g) A maximum amount of deduction of Rs.15,000/- is available under section 80L of the Income Tax Act, 1961. Out of which Rs.12,000/- is allowable from income by way of interest on NSCs, Fixed Deposits, Saving Bank Accounts, deposits under the Post Office (Monthly Income Account) Rules, 1987, dividend from any Indian Company, income received in respect of units of the Unit Trust of India or Mutual Funds etc. (h) The Finance Act, 2001 has inserted a new section 54ED in the Income Tax Act, 1961 to grant exemption to long term Capital Gains arising after 1st April, 2001 on listed securities or units of UTI or Mutual Funds from tax to the extent such Capital Gains are invested (within six months from the date of transfer) in a public issue made by any company. (i) Value of investment in units under the scheme is completely exempt from wealth Tax.
(j) Eligible Trusts Units are approved securities under section 11(2)(b) of the Income Tax Act, 1961. Eligible Trusts investing in units will, therefore, qualify for tax exemption in respect of income and corpus under Sections 11 and 13 of the Income Tax Act, 1961.
XX. MEMBERS� RIGHTS & SERVICES
XXI. CONSTITUTION & MANAGEMENT OF UNIT TRUST OF INDIA
1. Constitution of UTI Unit Trust of India is a statutory corporation constituted under the Act, with a view to encouraging saving and investment and participation in the income, profits and gains accruing to UTI from the acquisition, holding, management and disposal of securities. It started functioning with effect from 1st July, 1964. 2. In terms of the press release issued by the Government of India on 31st August 2002 the following changes are proposed to the structure of UTI: (a) UTI would be divided into two parts: (i) Old protected UTI (UTI-I) comprising of US-64 for which assured repurchase prices have been announced and assured return schemes. It will be managed by Government appointed Administrator and a team of advisers nominated by Government. Government will meet its obligations annually to cover any deficit in UTI-I. (ii) New UTI (UTI-II) comprising of all net asset value based schemes. UTI-II will for the time being be managed by professional Chairman and Board of Trustees and will be disinvested. (b) The operational aspect including but not limited to distribution of assets and liabilities between UTI-I and UTI-II etc., would be worked out by the Ministry of Finance. (c) UTI Act will be repealed through issue of an Ordinance and both UTI-I and UTI-II will be structured as per the SEBI (Mutual Funds) Regulations. 2. Management of UTI (a) Board of Trustees * The Management of the affairs and business of UTI are vested in the Board of Trustees with a full time Chairman appointed by the Government of India. Besides the Board, there is a statutory Executive Committee comprising the Chairman and two other Trustees nominated by the Industrial Development Bank of India. This Committee is competent to deal with any matter within the competence of the Board.
(b) Powers of the Board of Trustees (i) The powers of the Board of Trustees emanate from the Unit Trust of India Act, 1963 and Unit Trust of India General Regulations 1964. The powers are as under: The Act vests the Board the general superintendence, direction and management of the affairs and business of the Trust. It also empowers the Board with all powers to do all such acts and things, in discharge of its functions under the Act, in the interest of the unitholders. The Act empowers the Board to make regulations that are consistent with the Act. It also vests in the Board the power to entrust or delegate functions to the Chairman or Executive Trust. The Board is also empowered to constitute Committees for specific purposes. Within the ambit of its powers the Board can adopt the annual accounts, make decisions in regard to matters such as formation of unit schemes, amendments to existing schemes, allocation of interest and other expenses to various schemes, distribution of income, utilisation of reserve funds etc. and delegation to any officer of the Trust such of its powers and duties as it may consider necessary.
Provided that no fees are payable to a trustee who is an officer of Government or any corporation established by any law for the time in force. Further, as per regulation 30 of UTI General Regulations, 1964 a Trustee / Executive Committee member shall receive a fee of Rs.2000/- for each Board/E.C. meeting, which he attends. Every trustee and member is also reimbursed actual travelling expenses, if any and halting allowance of Rs.280/- every day. (v) Board of Trustees * 1.Shri M Damodaran : Chairman, Unit Trust of India 2. Shri K L Khetarpaul : Executive Director, Reserve Bank of India 3. Shri U K Sinha : Joint Secretary DOEA, GOI 4.Shri P N Shah : Chartered Accountant 5.Shri D T Pai : Former Chairman & Managing Director, Syndicate Bank 6. Shri M R Mayya : Chairman, Interconnected Stock Exchange of India Ltd. 7. Shri S.H.Bhojani : Partner, Amarchand & Mangaldas & Suresh A Shroff & Co, Mumbai 25 8.Shri K Narsimha : Chartered Accountant Murthy 9.Shri Rajendra S : Chartered Accountant Lodha * The addresses and other current directorships of Trustees are as follows: 1. Shri M Damodaran Chairman, Unit Trust of India, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai, 400 020. (i) Chairman & Director - The India Fund, (ii) Chairman & Director -India Access Ltd., (iii) Chairman & Director -The India Infrastructure Fund Ltd., (iv) Chairman & Director - UTIIAS (Mauritius) Ltd., (v) Chairman of Governing Council - UTI Institute of Capital Markets (vi) Chairman & Director - UTI Investment Advisory Services Ltd. (vii) Chairman & Director - The India Media, Internet And Communication Fund Ltd., (viii) Chairman & Director -UTI Investor Services Ltd., (ix) Chairman & Director - UTI Securities Exchange Ltd., (x) Director - UTI Bank Ltd., (xi) Member - Life Insurance Corporation of India (xii) Director - National Stock Exchange of India Ltd., (xiii) Chairman - Infrastructure Leasing & Financial Services Ltd., (xiv) Director - Discount & Finance House of India Ltd. (xv) Director - India Growth Fund 2. Shri K.L.Khetarpaul Executive Director, Reserve Bank Of India, Central Office Building, Mumbai 400 001 3. Shri U K Sinha Joint Secretary ( CM & ECB), Department of Economic Affairs, Ministry of Finance, Government of India, New Delhi � 110001. 4. Shri P N Shah - Shah & Co., Chartered Accountants, Maker Bhavan No. 2, 18, New Marine Lines, Mumbai - 400 020 (i) Non-Executive Director - P I Industries Ltd., (ii)
Non-Executive Director - Secure Meters Ltd., (iii) Non-Executive Director -
Lipi-Data Systems Ltd., 5. Shri D T Pai Former Chairman & Managing Director, Syndicate Bank, Manipal 576 119, Member �Management Committee of Indian Banks� Association 6. Shri M R Mayya Chairman - Interconnected Stock Exchange of India Ltd., Louis Apartment, Flat No. 61, C Wing. Near Portuguese Church, Dadar , Mumbai 400028. (i)Chairman - ISE Securities and Services Ltd. (ii) Chairman � BOB Capital Markets Ltd. (iii) Director � Karnataka Bank Ltd. (iv) Director � UTI Investment Advisory Services Ltd. (v) Member � Rating Committee of the Credit Analysis and Research Ltd. (of IDBI) (vi) Chairman/ Member � Some expert committees set up by SEBI 7. Shri S.H.Bhojani Partner, Amarchand & Mangaldas & Suresh A Shroff & co, Mumbai 25 8. Shri K Narsimha Murthy Chartered Accountant,M/s Srikari Management Consultants Ltd.,Hyderabad (i) Director - IDBI (ii) Director - UTI Bank Ltd., (iii) Chairman - SWIL 9. Shri Rajendra. S. Lodha Chartered Accountant, Lodha & Co. Director: (i) Alfred Herbert (India) Ltd., (ii) Birla Corporation Limited, (iii) Baroda Agents & Trading Co. Pvt. Ltd., (iv) Birla Management Centre Pvt. Ltd., (v) City Holdings Ltd. (Alternate), (vi) East India Investment Co. Pvt. Ltd., (vii) First Capital India Ltd., (viii) Gwalior Webbing Co. Ltd., (ix) Henry F Cockill & Sons Ltd., (x) Hindustan Gum & Chemicals Ltd., (xi) La Cr�me De La Cr�me Services Pvt. Ltd., (xii) Lodha Capital Markets Ltd., (xiii) National Securities Depository Ltd., (xiv) The Oriental Insurance Co. Ltd., (xv) The Punjab Produce & Trading Co. Ltd., (xvi) The Punjab Produce Holdings Ltd. (Formerly Mazbat Holdings Ltd.), (xvii) Swiss India Financial Services Co. Pvt. Ltd., (xviii) Thai Acrylic Fibre Co. Ltd., (xix) Tourism Finance Corpn. of India Ltd., (xx) Terriswood Limited, (xxi) Twenty-First Century Printers Ltd., (xxii) UTI Securities Exchange Ltd., (xxiii) Vindhya Telelinks Limited Committee Member: (i) Federation of Indian Chambers of Commerce And Industry (FICCI), (ii) S. P. Jain Foundation (iii) Birla Medical Research & Education Foundation.
3. Management of US 2002 Shri. Amandeep S Chopra is the Fund Manager Age : 32 years Qualifications and Experience:
5.No. of personnel involved in equity research - 16 people are involved in the equity research and the details of the key personnel in Equity research are as under:
XXII. OTHER SERVICE PROVIDERS FOR THE SCHEME
Stock Holding Corporation of India situated at Mittal Court, B-Wing, Nariman Point, Mumbai � 400021, have been functioning as custodian for all our schemes and plans as per the agreement entered into with them on January 17, 1994. The custodians are required to take delivery of all securities belonging to schemes/funds/plans of UTI and hold them in its custody. The custodians will deliver the securities only as per instructions from UTI and on receipt of the consideration. The custodian shall be generally authorised to attend to all non-discretionary and procedural details for discharge of 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 may otherwise be directed by UTI. Custodians shall provide all information, reports or any explanation sought by UTI or the auditors of UTI for the purpose of audit and for physical verification and reconciliation of securities belonging to the schemes/ funds / plans of UTI. The SEBI registration number of SHCIL is IN/CUS/011 Tariff structure of SHCIL is as under:
There is a maximum cap not exceeding Rs 500/- per transaction in the demat segment of debt transactions.
2. Auditors M/s Batliboi & Purohit, Chartered Accountants, National Insurance Building, 204, D N Road, Fort, Mumbai 400 001 and M/s. K. K. Soni & Company, Chartered Accountants, 130, Sarojini Market, New Delhi, 110023. The auditors of the scheme are appointed by the IDBI and they are subject to change from year to year.
Currently, the processing of applications and after sales services will be handled at the offices of the UTI as may be announced from time to time. UTI has adequate capacity to discharge its responsibilities with regard to processing of applications, despatch of MA/SOA, handling of after sales services within the prescribed time frame and also handling of investor complaints. The charges for processing the transfers in-house are at competitive rates. UTI may at a later date transfer Register & Transfer work to a SEBI registered Registrar for which suitable announcement will be made as and when decided.
Principal Business Address of the Bank.
UTI Bank Ltd. (INB 100000017) Central Office, Maker Tower-F, 13th floor Cuffe Parade, Coloba, Mumbai-400 005
XXIII. INVESTORS� GRIEVANCES REDRESSAL 1. All investors could refer their grievances giving full particulars of investment to concerned Investors' Relation Cell at the following addresses:
2. Investor Complaints redressal record a) Complaints received, redressed and pending for the last three years are:
(b) Schemewise details of complaints received, redressed and pending for the period 01/09/2001 to 31/08/2002 are given below:
Reasons for pending complaints are:
XXIV. PENALTIES, PENDING LITIGATIONS, MATERIAL FINDINGS OF INSPECTIONS/ INVESTIGATIONS 1) Cases of penalties awarded by SEBI under the SEBI Act or any of its regulations or by any stock exchanges (where the units of schemes of UTI are listed) against UTI/Board of Trustees or any of the Trustees or key personnel (specifically the fund managers) - NIL. 2) Any pending material litigation proceedings incidental to the business of UTI where UTI or Board of Trustees or key personnel is a party - (i) An SLP is filed by Income Tax Department before the Hon�ble Supreme Court of India against the Judgement and Order of Hon�ble High Court of Bombay in the matter of applicability of Interest Tax Act and liability of UTI to pay interest tax for the period from accounting year 1991-92 to 1998-99. (ii) UTI has received notices under Wealth Tax Act, 1957 from Income Tax Department calling upon UTI to file returns on net wealth chargeable to tax along with other particulars relating the assessment year 1993-94 to 1999-2000. UTI has been advised that it is not liable to pay any wealth tax in view of the provisions of section 32 of UTI Act. The matter is being contested at the appropriate forum. (iii) 19 Writ Petitions are pending in various High Courts against UTI challenging the validity of the termination of Rajlakshmi Unit Scheme � 1992 by UTI. The Writ Petitions will be contested by UTI in the light of Writ Petitions already dismissed by the other High Courts and ruling given by Hon�ble Supreme Court in favour of UTI in one SLP filed by a unit holder against the Judgement and Order of Hon�ble Rajasthan High Court. (iv)One Writ Petition is pending in High Court of Punjab & Haryana against suspension of sales and repurchase of units of US-64 by UTI. The Writ Petition is being contested by UTI. (v) A Writ Petition has been filed by Shri Arun Kumar Dubey against Unit Trust of India in the High Court of Allahabad, Lucknow Bench praying, inter-alia, that Union of India investigate or conduct a probe into the affairs of the Securities market in relation to Unit Trust of India. (vi)A unit holder has filed a complaint before the Consumer Dispute Redressal Forum, Kanpur against UTI and the Trustees against suspension of sale and repurchase of units of US-64. The case is being defended appropriately. 3) Any pending criminal cases against UTI, Board of Trustees or key personnel (i) There are 31 pending criminal cases against the UTI or key personnel relating to normal operation of UTI such as non-transfer of units, non-receipt of unit certificates, non-receipt of repurchase proceeds or income distribution. These cases are not maintainable and it is experienced that such cases are either dismissed by Courts or withdrawn by the complainant. In most of the cases stay has been obtained from the High Courts. (ii) Investigations are being made by the Central Bureau of Investigation in the matter of investments in Cyberspace Limited made by UTI. In the aforesaid enquiry, the role of Shri P. S. Subramanyam (Ex-Chairman), Late M. M. Kapur, Shri S. K. Basu and Smt. Prema Madhuprasad, officials of UTI are also being investigated. 4) Any deficiency in systems and operations of the UTI which SEBI has specifically advised to be disclosed in the Offer Document, or which has been notified by any other regulatory agency. - NIL XXV. CONDENSED FINANCIAL INFORMATION The condensed financial information for the years1999-2000, 2000-2001 and 2001-2002 for all the schemes launched during the last three years is annexed. Notwithstanding anything contained in the offer document the provisions of the SEBI (Mutual Funds ) Regulations, 1996 and the Guidelines thereunder shall be applicable. The Board of Trustees in its meeting held on 19th September 2002 approved the scheme under this offer document.
For and on behalf of the Board of Trustees of the Unit Trust of India
(A.K.Sridhar) Chief Investment Officer
Place: Mumbai Date: Note: The investors may also like to ascertain about any further changes after the date of the offer document from the offices of UTI/ UTI Bank /Franchise offices /Authorised collection centres/Chief Representatives or Agents.
Updation of Factual Details Factual details in this Offer Document will be updated as per requirement at regular intervals and the updated information will be notified through advertisement / press release besides displayed in our website for the benefit of investing public besides being incorporated in the reprint of the Offer Document. Further Information and Disclosure Any further information/disclosure under the advise/directive of Government, Statutory or Regulatory Authority will be incorporated in the following reprint of the Offer Document in such form and in such manner as may be decided by the Executive Committee. XXV. CONDENSED FINANCIAL INFORMATION (i) HISTORICAL PER UNIT STATISTICS
^ income distribution @9% paid upto 31.03.02 and at 5% from 01.04.02 to 30.06.02 under MIP 99 (II), MIP 2000(second) and MIP 2000(Third) ^^ income distribution @ 9% paid upto 31.03.02 and at 3% from 01.04.02 to 30.06.02 under MIP 2000. ^^^ income distribution @9.75% paid upto 31.03.02 and at 6% from 01.04.02 to 30.06.02 under MIP 2001. & Recurring expenses exceeding the limits prescribed by SEBI are borne by DRF ** Growth Option * Income Option ++ Face value changed from Rs.100/- to Rs.10/- from 16.07.2001. Income distribution @ 10% paid as of 31.12.2001 and @ 5% as of 22.03.2002. HISTORICAL PER UNIT STATISTICS
* NAV as on 16/09/2002 |
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