Dear Members,
We are pleased to present the Directors Report of UTI Asset Management Company Limited (the Company / UTI AMC) along with the Companys audited financial statements for the financial year ended 31st March, 2024.
FINANCIAL PERFORMANCE
The financial statements of the Company were prepared in accordance with Section 129 and 133 and other applicable provisions of the Companies Act, 2013 (the Act) and the Indian Accounting Standards (Ind AS) as notified by Ministry of Corporate Affairs. The below table summarizes the Companys financial performance for the financial year ended 31st March, 2024 as compared to the previous financial year:
(Rs in crore)
| Standalone | Consolidated | |||
| Particulars | As on 31st March, 2024 | As on 31st March, 2023 | As on 31st March, 2024 | As on 31st March, 2023 |
| Revenue from operation | 1,337.31 | 1,091.57 | 1,736.96 | 1,266.86 |
| Other Income | 3.84 | 9.39 | 6.97 | 23.23 |
| Total Income | 1,341.15 | 1,100.96 | 1,743.93 | 1,290.09 |
| Employee Benefit Expenses | 368.35 | 357.28 | 439.33 | 414.53 |
| Other Expenses | 206.84 | 189.85 | 317.76 | 289.94 |
| Total Expenses | 575.19 | 547.13 | 757.09 | 704.47 |
| Profit before tax expense | 765.96 | 553.83 | 986.84 | 585.62 |
| Less: Tax expense (current & deferred) | 165.44 | 129.40 | 184.81 | 145.94 |
| Profit after tax | 600.52 | 424.43 | 802.03 | 439.68 |
| Attributable to owners of the Company | 600.52 | 424.43 | 765.68 | 437.36 |
| Attributable to non-controlling interests | - | - | 36.35 | 2.32 |
| Add / less: Other comprehensive income (Net of tax) | (18.71) | 7.44 | 25.9 | 7.53 |
| Total comprehensive income | 581.81 | 431.87 | 827.93 | 447.21 |
| Attributable to owners of the Company | 581.81 | 431.87 | 791.58 | 444.89 |
| Attributable to non-controlling interests | - | - | 36.35 | 2.32 |
| Balance of retained earnings carried to balance sheet | 3,352.78 | 3,013.94 | 3,851.23 | 3,380.09 |
| Paid-up capital | 127.26 | 126.98 | 127.26 | 126.98 |
| Net worth | 3,685.02 | 3,348.27 | 4,388.17 | 3,867.84 |
OVERVIEW OF OPERATIONS OF THE GROUP
The Company believes that its track record of product innovation, consistency and stable investment performance contributed to the growth of its Asset Under Management (AUM). The overview of operations of the group is as under:
(Rs in crore)
| Particulars | As on 31st March, 2024 | As on 31st March, 2023 | % of change |
| UTI Mutual Fund (UTI MF) | |||
| Quarterly Average Assets Under Management (QAAUM)1 | 2,90,881 | 2,38,791 | 21.81 |
| QAAUM for Equity Schemes | 84,777 | 70,494 | 20.26 |
| QAAUM for Exchange Traded Funds (ETFs) and index funds | 1,15,448 | 82,871 | 39.31 |
| QAAUM for hybrid funds | 25,982 | 24,101 | 26.06 |
| QAAUM for the liquid funds (UTI Liquid Cash Plan and UTI Overnight Fund) | 31,713 | 38,182 | (16.94) |
| QAAUM of Debt Funds | 28,413 | 23,144 | 22.77 |
| Particulars | As on 31st March, 2024 | As on 31st March, 2023 | % of change |
| Portfolio Management Services (PMS) division of UTI AMC | |||
| AUM(2) | 12,25,154 | 10,53,085 | 16.34% |
| AUM of assets managed by Subsidiaries of UTI AMC | |||
| AUM of UTI International Limited (UTI International) | 27,645 | 21,703 | 27.38% |
| AUM of UTI Pension Fund Limited (UTI PFL) formerly known as UTI Retirement Solutions Limited | 3,02,677 | 2,40,709 | 25.74% |
| AUM of UTI Alternatives Private Limited (UTI APL) formerly known as UTI Capital Private Limited | 1,974 | 1,707 | 15.60% |
Notes:
1. The market share of UTI MF is reduced from 5.89% to 5.37 % on QAAUM basis; and
2. Positive growth was mainly due to inflows mandates from EPFO, PLI, ESIC & CMPFO accounts and advisory business.
SCHEMES LAUNCHED DURING THE YEAR
UTI AMC has launched 11 schemes during the FY 2023-24 under equity, debt, hybrid and ETF & Index fund categories. The total AUM collected during the respective NFO periods for these schemes was ~Rs. 2,900 crore. The total AUM of these schemes has grown to Rs. 3,750 crore as on 31st March, 2024. During the financial year, the Company had seeded the product gap with launch of UTI Balanced Advantage Fund which dynamically manages allocation between equity and fixed income driven by an in-house proprietary asset allocation model guided by fundamental and valuation-based factors that determines the net equity allocation for the fund. This was further augmented equity offerings by launch of UTI Innovation Fund in the Thematic Category. To diversify the Companys basket of innovative offerings, the Company has added 3 equity ETFs, 2 fixed income ETFs and 4 smart beta / thematic index funds in this financial year. In the smart beta index fund category, the Company endeavours to bring new and innovative investment solutions for the investors.
While all the UTI Mutual Fund schemes are categorised as defined by the regulator in the actively managed space, the Company is continuously innovating on the passively managed space. Over the last few years, UTI MF has developed an extensive bouquet of Index Fund / ETFs, while maintaining an excellent track record of delivering one of the best tracking error and tracking difference in the industry across all products.
The List of the schemes launched during the FY 2023-24
| Sr. No. | Name of Schemes |
| 1. | UTI Nifty 10 year Benchmark G-Sec ETF |
| 2. | UTI Nifty 5 year Benchmark G-Sec ETF |
| 3. | UTI Nifty IT ETF |
| 4. | UTI Innovation Fund |
| 5. | UTI Nifty Midcap 150 Exchange Traded Fund |
| 6. | UTI Balanced Advantage Fund |
| 7. | UTI S&P BSE Housing Index Fund |
| 8. | UTI Nifty 50 Equal Weight Index Fund |
| 9. | UTI Nifty 500 Value 50 Index Fund |
| 10. | UTI Silver ETF Fund of Fund |
| 11. | UTI Silver Exchange Traded Fund |
CHANGES IN FUNDAMENTAL ATTRIBUTES OF SCHEMES
There was no change in fundamental attributes of any scheme of UTI MF during the FY 2023-24. However, as per SEBI guidelines, the following changes were undertaken in the scheme to comply with Securities and Exchange Board of India (Mutual Funds) regulations, 1996:
(i) Changes in the name of Schemes: The names of 21 schemes were changed to align the same with their respective category names; and
(ii) Change in first tier benchmarks for open ended debt schemes: In order to comply with SEBI guidelines on uniformity in benchmarks of debt oriented mutual fund schemes, the first-tier benchmarks were changed for 9 open ended debt schemes as per the Potential Risk Class matrix published by AMFI.
SHARE CAPITAL
The authorised share capital of the Company is Rs. 2,00,00,00,000 (comprising of 20,00,00,000 equity shares of face value of Rs. 10 each) and there was no change therein during the FY 2023-24.
As on 31st March, 2024, the issued, subscribed and paid-up equity share capital of the Company stood at Rs. 1,27,25,61,740 (comprising of 12,72,56,174 equity shares of the face value of Rs. 1 0 each) as against Rs. 1 ,26,98,36,950 (comprising of
12,69,83,695 equity shares of the face value of Rs. 10 each) at the end of the previous FY 2022-23. The increase in the paid up equity share capital is on account of allotment of 2,72,479 equity shares to the eligible employees who had exercised the stock options under the UTI AMC Employee Stock Option Scheme-2007 (the ESOP Scheme 2007).
The listed equity share capital of the Company as on 31st March, 2024 is Rs. 1,27,25,43,100 (comprising of 12,72,54,310 equity shares of the face value of Rs. 10 each). The difference of Rs. 18,640 between the paid-up equity share capital and the listed equity share capital of the Company was due to the pending listing of 1,864 equity shares allotted under the ESOP Scheme 2007 on 26th March, 2024. The National Stock Exchange of India Limited and BSE Limited have, vide their letters dated 28th March, 2024, listed and admitted the aforesaid equity shares of the Company for trading with effect from 1st April, 2024.
DIVIDEND
The Company has adopted a Dividend Distribution Policy as per regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (the SEBI Listing Regulations). The same is annexed as Annexure-I to this Directors Report and is also available on the Companys website at https://www.utimf.com/amc- shareholders/code-and-policies.
The Board of Directors (the Board) of the Company has recommended dividend of Rs. 24 per equity shares (240% of face value of Rs. 10 each) and an additional special dividend of Rs. 23 per equity share (230% of face value of Rs. 10 each), taking overall dividend to Rs. 47 per equity share (470% of face value of Rs. 10 each) for FY 2023-24.
The Board has recommended the dividend equivalent to 99.60% of the profit after tax of the Company as compared to 65.82% for the previous financial year.
The final dividend shall be paid, subject to the approval of members at the 21st Annual General Meeting (AGM) of the Company to be held on 25th July, 2024, to those members:
(i) whose name appears in the statement of beneficial owners to be furnished by the Depositories in respect of the shares held in dematerialised form as at the closure of business hours on Thursday, the 18th July, 2024; and
(ii) whose name appears as members in the Companys register of members maintained by the Registrar and Share Transfer agent of the Company on Thursday, the 18th July, 2024.
Pursuant to Section 91 of the Act and Regulation 42 of the SEBI Listing Regulations, the register of members and share transfer books of the Company shall remain closed from Friday, the 19th July, 2024 to Thursday, the 25th July, 2024, (both days inclusive) for determining the entitlement of members for dividend, if declared for the FY 2023-24.
The Company has not declared any interim dividend to the members of the Company during the FY 2023-24.
UNCLAIMED DIVIDEND ON SHARES
The details of the unclaimed dividend as on 31st March, 2024 are as under:
(in Rs)
| Sr. No. | Final Dividend for FY | Amount |
| 1. | 2019-20 | 9,03,640.09 |
| 2. | 2020-21 | 8,13,607.00 |
| 3. | 2021-22 | 6,41,081.06 |
| 4. | 2022-23 | 6,73,536.00 |
| Total | 30,31,864.15 |
The unclaimed dividend is mainly on account of non-updation of KYC details in the folios or demat accounts of the concerned members and non-submission of dividend warrants by the concerned members within prescribed timelines.
The details about the unclaimed and unpaid dividend amounts are available on the Companys website at https://www.utimf. com/amc-shareholders/unclaimed-dividend.
TRANSFER TO RESERVES
During the FY 2023-24, no amount was transferred to the general reserves of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company have been prepared in accordance with Ind AS notified under Section 133 of the Act, read together with the Companies (Indian Accounting Standards) Rules, 201 5 (as amended) and forms part of this Annual Report. In accordance with Section 136 of the Act, the Audited Financial Statements, including the Standalone and Consolidated Financial Statements and related information of the Company are available at the Companys website at https://www.utimf.com/amc-shareholders/financial-results and the Audited Financial Statements of each of its Subsidiaries are available on the Companys website at https://www.utimf.com/ amc-shareholders/subsidiaries-financials.
The Board of Directors of the Company reviewed the affairs of Subsidiaries of the Company. Pursuant to the provisions of Section 129 (3) of the Act and the Companies (Accounts) Rules, 2014, the salient features of the Financial Statement of each of the Subsidiaries are set out in the Form AOC-1, which forms part of the Financial Statements section of this Annual Report.
BUSINESS OPERATIONS / PERFORMANCE OF SUBSIDIARIES
As on 31st March, 2024, the Company have 4 (four) direct subsidiaries and 4 (four) step-down subsidiaries. The business operations and performance of subsidiaries are as under:
UTI International Limited:
UTI International Limited (UTI International) is a 100% subsidiary of UTI AMC, was incorporated as the Limited Liability Company under the laws of Guernsey on 30th January, 1996, pursuant to an Act of the Royal Court of the Guernsey Island. UTI International operates from its head office in Guernsey and its branch in London. UTI International has four wholly owned subsidiaries - UTI Investment Management Company (Mauritius) Limited (UTI Mauritius), UTI International (Singapore) Pte. Limited (UTI Singapore), UTI International (France) SAS (UTI France) and UTI Investments America Limited (UTI America). The principle activities of the International Group are the management and marketing of the Mauritius, Cayman and Ireland domiciled offshore funds setup by the erstwhile Unit Trust of India or UTI AMC and its subsidiaries, marketing of the domestic mutual fund schemes of UTI AMC in overseas markets and acting as Manager / Advisor to those entities investing in India through the Foreign Portfolio Investor route. UTI Mauritius acts as an investment manager to Shinsei UTI India Fund (Mauritius) Limited, the UTI Rainbow Fund Limited and UTI Wealth Creator Fund. UTI Singapore acts as investment manager to UTI Spectrum Fund Limited, South African Rand Money Market Fund, UTI Indian Fixed Income Fund Plc, UTI Phoenix Fund SPC, UTI Chronos Fund SPC, UTI India Dynamic Equity Fund, UTI India Balanced Fund, Indian Credit Opportunities Fund Pte. Ltd, UTI India Sovereign Bond UCITS ETF, UTI India Strategic Opportunities Fund VCC, UTI India Strategic Opportunities Fund II VCC, UTI India Innovation Fund and JSS Responsible India Equity Fund. UTI Singapore also acts as sub-manager to Emirates India Equity Fund and KB India Growth Equity Fund.
The consolidated total income of UTI International for FY 202324 was GBP 2,28,76,902 as compared to GBP 94,63,720 for the previous FY 2022-23 and consolidated net profit for FY 2023-24 was GBP 1,00,86,580 as compared to consolidated net loss of GBP 32,91,807 in the previous FY 2022-23.
As of 31st March, 2024, UTI International had total 19 funds with total AUM of US$ 3.32 bn.
UTI Pension Fund Limited:
UTI PFL (formerly known as UTI Retirement Solutions Limited) was incorporated on 14th December, 2007 under the Companies Act, 1956 for managing pension assets under the National Pension System (NPS). It manages the Pension Assets / Funds of Central Government Employees, State Government Employees and the Private Sector NPS Subscribers under the NPS. It started its operations with effect from 1st April, 2008.
The AUM have continuously grown at a rapid pace since its inception i.e. 1st April, 2008. The Companys AUM has grown from Rs. 895 Crores in its year of inception i.e. 2008-09 to Rs. 3,02,677 Crores as on 31st March, 2024. In the FY 2023-24, the UTI PFLs AUM has registered a growth of 25.74% (Previous Year 19.21%) from Rs. 2,40,709 crore as on 31st March, 2023 to Rs. 3,02,677 crore as on 31st March, 2024.
As of date, UTI PFL is one of the three leading Pension Fund Managers of the country capturing, ~26% of the market share under NPS. UTI PFL has a highly qualified and professional fund management team to take care of the investors retirement funds. An equally strong in-house Research Department supports the fund management team in their decision-making process. Consistent Fund Performance since inception a Hallmark of UTI PFL
As a pension fund manager, the company aims to achieve "Consistent Returns with low volatility while focusing on high quality securities (Debt as well as Equity)".
Adhering to this philosophy of investment, the UTI PFL has consistently generated competitive returns since inception under all NPS Schemes managed by it.
The fund performance during the FY 2023-24 has been commendable:
Fund Performance Report Card for FY 2023-24
| Scheme | Central Government | State Government | Scheme E Tier 1 | Scheme C Tier 1 | Scheme G Tier 1 | NPS Lite | APY |
| AUM (Rs in crore) | 98,586 | 1,85,771 | 2,153 | 907 | 1,675 | 1,594 | 11,519 |
| Returns Generated (FY 2023-24) | 12.54% | 12.54% | 37.25% | 8.47% | 9.91% | 12.37% | 12.49% |
| Peer Ranking | 2/3 | 1/3 | 3/10 | 4/10 | 5/10 | 3/4 | 2/3 |
UTI PFL has also grown remarkably on all other fronts such as Growth in Investment Management Fee (IMF), Net Profit After Tax & Net worth of the Company:
(Rs in crore)
| Particulars | FY 2023-24 | FY 2022-23 | Growth % |
| Investment Management Fees | 117.24 | 101.49 | 15.52% |
| Net Profit after Tax (PAT) | 53.84 | 46.47 | 15.86% |
| Net worth of the Company | 187.69 | 133.55 | 40.54% |
UTI PFL has registered itself as a Point of Presence (PoP) with the sole aim of marketing NPS. UTI PFL obtained the PoP License on 20th April, 2022 from PFRDA. The UTI PFL received NOC from SEBI for undertaking activity of PoP on 21st November, 2023.
UTI PFL intends to grow its market share by developing a strong sales and marketing team for NPS. Towards this goal, we target to start from a minimum of 25 locations across the country by June / July 2024 and then further take it to more than 50 locations in next 5 years.
UTI Alternatives Private Limited:
UTI APL (formerly known as UTI Capital Private Limited) was incorporated on 13th May, 2011, under the Companies Act, 1956. It is engaged in the business of managing alternate investment funds.
The total income of UTI APL was Rs. 22.96 crore for the FY 2023-24 as compared to Rs. 1 0.60 crore for the previous FY 2022-23. The net profit was recorded at Rs. 4.28 crore for the FY 2023-24 as against net loss of Rs. 3.29 crore for the previous FY 2022-23.
UTI APL has following funds:
(i) UTI Structured Debt Opportunities Fund I (UTI SDOF I), a Rs. 132 crore private credit fund. As on 31st March, 2024, UTI SDOF I had completed 10 exits out of 11 investments and the fund had returned ~109% of the total funds raised from investors in the form of capital, interest and capital gains.
(ii) UTI Structured Debt Opportunities Fund II (UTI SDOF II), a Rs. 519 crore private credit fund, which had a final close on 31st May, 2023. As on 31st March, 2024, amount drawn down from investors was Rs. 51 7 crore and outstanding investments aggregating Rs. 506 crore in sixteen portfolio companies.
(iii) UTI Structured Debt Opportunities Fund III (UTI SDOF III), a Rs. 433 crore private credit fund, which had a first close on 30th September, 2022. As on 31st March, 2024, amount drawn down from investors was Rs. 312 crore and outstanding investments aggregating Rs. 305 crore in eleven portfolio companies.
(iv) UTI Multi Opportunities Fund I (UTI MOF I), a Rs. 763 crore fund, which had a first close on 31st March, 2022. As on 31st March, 2024, amount drawn down from investors was Rs. 344 crore and outstanding investments aggregating Rs. 318 crore in twelve portfolio companies.
(v) UTI Real Estate Opportunities Fund I (UTI ROF I), a Rs. 127 crore fund, which had a first close on 17th October, 2023. As on 31st March, 2024, amount drawn down from investors was Rs. 2 crore and there is no outstanding investments.
UTI Venture Funds Management Company Private Limited:
UTI Venture Funds Management Company Private Limited (UTI VF) was incorporated on 27th March, 2001 under the Companies Act, 1956. The principle business of UTI VF is to carry on the business of distribution of UTI Mutual Fund products and services through digital or physical channels.
The gross income of UTI VF was Rs. 0.37 crore for the FY 2023-24 as against Rs. 1.25 crore in the previous FY 2022-23. It clocked a net profit of Rs. 0.18 crore for the FY 2023-24 as against Rs. 0.85 crore for the previous FY 2022-23.
As a good corporate governance practice and in order to ensure effective monitoring of operations & performance of subsidiaries, atleast one independent director of UTI AMC has been appointed as director on Board of UTI International, UTI PFL and UTI APL.
All subsidiaries continued to be the subsidiary of the Company during the FY 2023-24.
The Audited financial statements of subsidiaries alongwith directors report & auditors report for the period ended 31st March, 2024 are forming part of the Annual Report, and the same is also available on the Companys website at https:// www.utimf.com/amc-shareholders/subsidiaries-financials.
The Company has a Policy for determining material subsidiary and as per Regulation 46 of the SEBI Listing Regulations, the same is also available on the Companys website at https:// www.utimf.com/amc-shareholders/code-and-policies.
As on 31st March, 2024, the Company has only 1 (one) material subsidiary which is UTI International. The Company has no unlisted Indian material subsidiary.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of loans given, investments made, guarantees given and securities provided, if any, covered under Section 1 86 of the Act are disclosed under Note No. 6, 7 and 8 to the standalone financial statements for the FY 2023-24.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
During the FY 2023-24, the Company has entered into transactions with related parties, as defined under Section 2(76) of the Act read with Companies (Specification of Definitions Details) Rules, 2014 and applicable Accounting Standards, which were in ordinary course of business and on arms length basis.
The Independent Directors of the Audit Committee have reviewed and approved all the related party transactions executed during the FY 2023-24.
The Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy on materiality of Related
Party Transactions and dealing with Related Party Transactions, the Act and the SEBI Listing Regulations. Accordingly, the disclosure of related party transactions in form AOC-2 as required under Section 134(3)(h) and Section 188 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is not applicable.
However, detailed disclosure on related party transactions as per Ind AS 24 inter-alia containing name of the related party alongwith the relationship with the Company and details of the transactions entered into with such related party are disclosed in Note No. 30 of the standalone financial statements as on 31st March, 2024.
In accordance with the provisions of Section 177 and Section 188 of the Act read with rules made thereunder and Regulation 23 of the SEBI Listing Regulations read with circulars and notification issued thereon, the Company has a Policy on materiality of Related Party Transactions and dealing with Related Party Transactions. As per regulation 46 of the SEBI Listing Regulations, the Policy is available on the Companys website at https://www.utimf.com/amc-shareholders/code- and-policies.
AUDITORS
Statutory Auditor
M/s. B S R & Co. LLP, Chartered Accountants (Firm Reg. No. 101248W / W-100022), was appointed as Statutory Auditor of the Company at the 18th AGM held on 28th July, 2021, for a term of 5 years to hold the office from the conclusion of 18th AGM till the conclusion of 23rd AGM of the Company.
The Report provided by the Statutory Auditor on the Financial Statements of the Company is part of this Annual Report. There is no qualification, reservation, adverse remark or disclaimer in the Auditors Report. The Statutory Auditors Report to shareholders for the FY 2023-24 does not contain any modified opinion or qualifications and the observations. The Comments given in the report of the Statutory Auditor read together with Notes to Accounts are self-explanatory and hence, do not call for any further explanation or comments under Section 134(f)(i) of the Act.
Secretarial Auditor
Pursuant to Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board has appointed Vishal N. Manseta, Practicing Company Secretary (Membership No.: ACS 25183 and CP No. 8981) as the secretarial auditor of the Company for a term of 3 financial years from FY 2023-24 to FY 2025- 26.The Secretarial Audit Report of the Company is set out as Annexure-II to this Directors Report which forms part of the Annual Report.
The Secretarial Compliance Report for the financial year ended 31st March, 2024, in relation to compliance of all applicable
SEBI Regulations / circulars / guidelines issued thereunder, pursuant to requirement of Regulation 24A of the SEBI Listing Regulations, is set out as Annexure-II(A) to this Directors Report which forms part of the Annual Report. The Secretarial Compliance Report has been voluntarily disclosed as part of Annual Report as good corporate governance practice.
The Secretarial Audit Report and / or Secretarial Compliance Report does not contain any qualification, reservation, adverse remark or disclaimer.
The Comments given in the report of the Secretarial Auditor are self-explanatory and hence, do not call for any further explanation or comments under Section 134(f)(i) of the Act.
Cost Auditors
As the Company is dealing with financial sector, therefore, disclosure pertaining to maintenance of cost records as specified by the Central Government under Section 148(1) of the Act, is not applicable to the Company.
Internal Auditor
The internal auditor of the Company is M/s. Aneja Associates (Firm Reg. No. 100404W).
Auditor for the Scheme of UTI MF
The statutory auditor for schemes of UTI MF is M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Reg. No. 301003E / E300005) in accordance with the provisions of SEBI Mutual Funds Regulations read with circulars and notification issued thereon.
There was no instance of any fraud which is required to be reported to the Audit Committee or the Board by the statutory auditor or secretarial auditor pursuant to Section 143(12) of the Act.
SECRETARIAL STANDARDS
The Company has complied with the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India, during the FY 2023-24.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has implemented adequate internal financial controls with reference to the financial statements of the Company.
The Company has adopted accounting policies which were in line with the accounting standards prescribed in the Act and the Ind AS as prescribed under Section 133 of the Act and other relevant provisions of the Act, as amended from time to time. There was no change in the accounting policies during the year. The statutory auditor of the Company has reviewed the internal financial controls of the Company and confirmed that the Company has, in all material respects, adequate internal financial controls with reference to the financial statements and such internal financial controls were operating effectively as at 31st March, 2024, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on "Audit of Internal Financial Controls Over Financial Reporting" issued by the Institute of Chartered Accountants of India.
The accounting policies also ensure that uniform accounting treatment is followed by the Company and its subsidiaries. The accounts of subsidiaries are audited by their respective statutory auditor for consolidation.
The Company maintains its books of accounts in SAP (an Enterprise Resource Planning [ERP] system) and has many of its accounting records stored in electronic form, which is backed up periodically. This ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of accounts. The Company has implemented rigid and automated processes to ensure accurate and timely updation of various master data, audit trail etc. in the ERP system.
Pursuant to the Environment, Social and Governance (ESG) initiative, the Company had implemented paperless approval system. All internal approvals are obtained digitally through the Document Management System. All the payments for invoices are processed through this system and each employee has a separate login access.
The Company, while preparing its financial statements, makes judgements and estimates based on sound accounting policies and uses external agencies to verify / validate them as and when appropriate. The basis of such judgements and estimates were also reviewed by the statutory auditor and the Audit Committee. The Audit Committee and Board reviews the financial performance of the Company on quarterly basis.
HUMAN RESOURCES
The Company believes that its employees play a vital role in building a successful organisation. It believes that nurturing peoples capability is the core behind driving business excellence. The Company is committed to maintaining an environment that values the contributions of its people and provides opportunities for their personal and professional growth.
The employees, while performing their duty, deal with various stakeholders viz. clients, other employees, distributors and investors, among others, in a respectful manner. The employees duly comply with / adhere to the Companys Rules, Code of Conduct and any violation in the same is appropriately addressed. The Company demonstrates a commitment to a culture that promotes the highest ethical standards. The employer-employee relation continued to be healthy, cordial and progressive.
Some key focus areas and initiatives taken up during the FY 2023-24 are as under:
(i) Enhance an open, communicative environment across all levels, emphasising recognition based on merit;
(ii) A meticulously devised approach to lateral and campus hiring, coupled with a concerted effort to reshape perceptions, has spurred the cultivation of robust relationships for the Company;
(iii) Implemented structured hiring processes with a strong commitment to promoting diversity;
(iv) To embody Pay for Performance culture & continuously strive to enhance employees skill sets, essential for nurturing a high-performance culture; and
(v) I mplemented wellness programs that promote physical, mental and emotional well-being and regular feedback mechanisms such as performance evaluations, surveys and one-on-one meetings.
At UTI AMC, the talent pool is a prudent mix of all age groups, bringing experience and youthfulness together. This has been pivotal in keeping the Company agile, while being firmly rooted in its legacy of 60+ years. The Company strongly believes that its continuing business excellence is a direct product of how it nurtures the talent and keep them future ready to remain relevant in the changing business scenario. 286 new hirings were completed during the FY 2023-24 catering to human resource requirements of diverse functions within UTI AMC. The Company has a multi generation workforce as under:
| Generation | Number of Employees- Overall | % of Employees- Overall |
| Baby Boomers | 25 | 1.7% |
| Gen X | 730 | 52% |
| Gen Y | 372 | 26.5% |
| Gen Z | 278 | 19.8% |
| Total | 1,405 | 100.00 |
UTI AMC cultural ethos are as under:
(i) A safe working environment free from sexual harassment and discrimination;
(ii) Challenging work assignments and opportunities are provided based on meritocracy; and
(iii) Strict adherence to the Companys rules, code of conduct and above all, ethical standards.
Learning & Development
Continuous learning and development have significantly bolstered competencies across the UTI AMC family. Our approach encompasses a comprehensive 360-degree diagnostic learning model, fostering an environment conducive to growth. From reinforcing domain knowledge to refining behavioural skills, the Company prioritises effective communication channels, both vertically and horizontally, fostering cross-functional collaboration. Regular, detailed assessments throughout the year empower the Companys workforce to deliberate and make necessary adjustments, ensuring optimal productivity in any scenario. At the organisation, the Company places a premium on fostering the growth of the Companys Employees by employing systematic assessments. These assessments allow us to gauge the necessity for training across various competencies.
Throughout the Fiscal Year 2023-24, comprehensive initiatives were undertaken across all sectors, encompassing investment, sales, IT, digitalisation and mandatory compliance modules such as POSH, DE&I, AML, Code of Ethics, Information Security, Whistle Blower and ESG. For the new hires, extensive on-the-job mentoring and regular knowledge-sharing sessions were ensured. With digital transformation spearheading the organisational strategy, employees underwent thorough training to enhance their technological adeptness and facilitate seamless adoption of cloud-based applications.
Conviction
Conviction forms the bedrock of the Companys approach. The Company believes that each employee brings unique strengths, perspectives and potential contributions. This conviction drives to create policies, programs and initiatives that prioritise the well-being, growth and inclusivity of all our Employees.
Empowered Capabilities
Empowerment lies at the heart of effective Human Resource (HR) practices. UTI AMC equips its employees with the tools, resources and opportunities they need to excel. The Company plays a crucial role in identifying and nurturing talent, providing avenues for skill development and fostering a culture of continuous learning and innovation. By empowering employees with the capabilities to succeed, HR catalyses individual and collective growth, ultimately benefitting the organisation as a whole.
United Commitment
Commitment binds HR and employees together in pursuit of shared goals. It is about aligning individual aspirations with organisational objectives and fostering a sense of belonging and loyalty. HR acts as a bridge, ensuring that the needs, concerns and aspirations of employees are heard, understood and addressed. Through transparent communication, collaboration and a genuine commitment to mutual success, HR cultivates a culture of trust, engagement and collective accountability.
Forging the Synergy
The synergy between HR and its employees is a continuous journey of collaboration, adaptation and refinement. By fostering an environment where employees feel valued, respected and empowered, HR lays the foundation for strong and enduring partnerships. Regular feedback mechanisms, mentorship programs and recognition initiatives further strengthen this bond, fostering a culture of appreciation and support.
Particulars of Employees
The total number of employees of the Company as on 31st March, 2024 stood at 1,405 employees. The employee benefit expenses on standalone basis for the FY 2023-24 stood at Rs. 368.35 crore as compared to Rs. 357.28 crore for the FY 2022-23.
Information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Directors Report.
In terms of provisions of Section 136 of the Act, the Annual Report is being sent to shareholders excluding aforementioned information. Such information will be available on the Companys website at www.utimf.com.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity, ethical behaviour, good corporate governance and practices. The Board of the Company has adopted the Whistle Blower Policy (the Policy) in compliance with Section 177 (9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers), Rules, 2014 and Regulation 22 of the SEBI Listing Regulations.
This Policy is to supplement the code of ethics, staff rules, anti-bribery policy and antifraud policy of the Company. Through the Policy, the Company intends to encourage its stakeholders to report matters without the risk of subsequent victimisation, discrimination or disadvantage. The Policy applies to stakeholders including but not limited to individual employee and their representative bodies working for the Company.
The Company is committed to developing a culture where all stakeholders are given opportunity to raise concerns about any actual or potential illegal and unethical act or practice in violation of the laws applicable to the Company. The Whistle Blowing reporting and vigil mechanism set out in the Policy, invites all stakeholders to act responsibly to uphold the reputation of the Company. The Policy aims to provide a mechanism to ensure that concerns are raised, investigated and addressed in the organised way. The Company recognises this mechanism as an important enabling factor in administering good corporate governance practices.
The details related to vigil mechanism / whistle blower policy are provided in the Corporate Governance Report forming part of this Annual Report.
As per Regulation 46 of the SEBI Listing Regulations, the Whistle Blower Policy is also available on the Companys website https://www.utimf.com/amc-shareholders/code-and-policies.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has a Policy on prevention of sexual harassment of women at workplace which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy aims to create an environment at every workplace which is free from sexual harassment and to provide safeguards against false or malicious charges. The Policy has been rigidly implemented within the Company.
The Company has constituted an Internal Complaints Committee (ICC) to enquire into the cases of sexual harassment at workplace.
The Company also conducts the awareness programmes on prevention of sexual harassment on regular basis.
The Company has not received any harassment complaint during the FY 2023-24 and no complaint was pending at the end of the year.
The POSH training of all employees of the Company were conducted during the financial year ended 31st March, 2024.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors
Composition of Board
The Board comprises of 10 (ten) directors, consisting of 6 (six) Independent Directors [including 2 (two) Independent Women Directors], 3 (three) Non-Executive Nominee Directors and 1 (one) Managing Director. The Chairman of the Company is a Non-Executive Independent Director.
Mr. Imtaiyazur Rahman (DIN: 0181 8725) was appointed as the Chief Executive Officer (CEO) of the Company with effect from 13th June, 2020. The shareholders had, at the 19th Annual General Meeting of the Company approved the appointment of Mr. Rahman as Managing Director (MD) with effect from 26th July, 2022 to 12th June, 2024, not liable to retire by rotation. Accordingly, Mr. Rahman was re-designated as the Managing Director & CEO of the Company.
The existing term of Mr. Imtaiyazur Rahman as MD & CEO of the Company was till 12th June, 2024. The Board, based on the recommendation of the Nomination and Remuneration Committee, approved the re-appointment Mr. Imtaiyazur Rahman as MD & CEO of the Company in its meeting held on 30th January, 2024. Subsequently, the Shareholders of the Company at the 7th Extra Ordinary General Meeting held on 7th March, 2024, approved his re-appointment as MD & CEO of the Company for another period of 2 years with effect from 13th June, 2024 to 12th June, 2026.
The Board had appointed Mr. Srivatsa Desikamani (DIN: 10193489) (representative of T. Rowe Price International Ltd) as an Additional Director (Non-Executive Nominee Category) with effect from 9th June, 2023. Subsequently, the shareholders had, at the 20th AGM held on 25th July, 2023, approved the appointment of Mr. Desikamani as Non-Executive Nominee Director, liable to retire by rotation.
Retirement by Rotation
Pursuant to Section 152 of the Act, Mr. Flemming Madsen (DIN: 02904543) will retire by rotation and being eligible, offers himself for re-appointment at the 21st AGM of the Company.
A detailed profile(s) and other related information along with necessary resolutions of Mr. Flemming Madsen, seeking appointment at the 21st AGM as required under Secretarial Standard on General Meetings and Regulation 36 of the SEBI Listing Regulations, is provided in the Notice of the 21st AGM.
Cessation
Mr. Edward Cage Bernard (DIN: 08243277) resigned from the Board of the Company with effect from closure of business hours on 8th June, 2023. The Board acknowledged the valuable contributions made by Mr. Bernard during his tenure on the Board and various committees of the Company.
Disclosure of Disqualification of Directors:
All the directors of the Company have confirmed that they are not disqualified from being appointed as director pursuant to Section 164 of the Act. A certificate that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of Company, by the SEBI, Ministry of Corporate Affairs or any such statutory authority, is annexed to the Corporate Governance Report forming part of this Annual Report.
Key Managerial Personnel
As on 31st March, 2024, the Company has following 3 (three) Key Managerial Personnel (KMP) as defined in Section 2(51) and in compliance with Section 203 of the Act:
- Mr. Imtaiyazur Rahman, Managing Director & Chief Executive Officer;
- Mr. Vinay Lakhotia, Chief Financial Officer; and
- Mr. Arvind Patkar, Company Secretary & Compliance Officer.
During the FY 2023-24 Mr. Surojit Saha ceased to be the Chief Financial Officer and Key Managerial Personnel of the Company due to attaining the retirement age with effect from closure of business hours on 30th September, 2023. The Board had, in its meeting held on 25th July, 2023, appointed Mr. Vinay Lakhotia as Chief Financial Officer of the Company with effect from 1st October, 2023.
DECLARATION OF INDEPENDENCE
The Independent Directors of the Company have submitted declaration of independence, pursuant to Section 149 of the Act and Regulation 1 6(1)(b) of the SEBI Listing Regulations, stating that they have met the criteria of independence as provided therein.
The Board is of the opinion that all the independent directors are persons of integrity, have relevant expertise, experience and fulfil the conditions specified under the Act and the SEBI Listing Regulations and are independent of the management.
All independent directors of the Company are registered in the databank of independent directors in compliance with the provisions of Section 150 of the Act and Rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014.
The independent directors have also complied with the provisions of Rule 6(4) of Companies (Appointment and Qualifications of Directors) Rules, 2014 relating to online proficiency selfassessment test.
The terms and conditions formulated by the Company for appointment of independent directors is available on the Companys website at https://www.utimf.com/amc- shareholders/code-and-policies.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company conducts familiarisation programmes to update the Directors on their roles, responsibilities, rights and duties under the Act and other statutes about the nature of industry in which the Company operates, functioning and performance of the Company.
As per Regulation 46 of the SEBI Listing Regulations the policy and details of familiarisation programme is available on the Companys website at https://www.utimf.com/amc- shareholders/code-and-policies.
NUMBER OF BOARD MEETINGS
9 meetings of Board were conducted during the FY 2023-24 on the following dates:
26th April, 2023, 24th May, 2023, 25th July, 2023, 18th October, 2023*, 19th October, 2023, 29th January, 2024, 30th January, 2024, and 26th March, 2024.
*There were two Board Meetings held on 18th October, 2023 with all the Board Members being present in the meeting.
In addition to the above, the joint meetings of Board of UTI AMC and UTI Trustee Company Private Limited (Trustees of UTI MF) were held on 25th April, 2023 and 26th April, 2023.
In compliance with the provisions of the Act read with the rules and circulars issued thereunder, the SEBI Listing Regulations and Secretarial Standard (SS-1 ) on Meetings of Board of Directors issued by Institute of Company Secretaries of India, the maximum interval between any two meetings of the Board did not exceed 120 days.
The details of composition of the Board and its Committees and details of the meetings held during the FY 2023-24 along with the attendance of the directors therein are disclosed in the Corporate Governance Report forming part of this Annual Report.
BOARD COMMITTEES
In order to strengthen functioning of the Board, the Board of Directors have constituted following Committees as per the requirement of the Act and the SEBI Listing Regulations:
a) Audit Committee;
b) Nomination & Remuneration Committee;
c) Stakeholders Relationship Committee;
d) Risk Management Committee; and
e) Corporate Social Responsibility Committee.
f) As per Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (SEBI Mutual Fund Regulations) the Company has also constituted a Unitholder Protection Committee (UHPC).
Additionally, the Company has constituted the following Committees:
a) Digital Transformation Committee; and
b) ESG Committee.
Details of the Committees, their terms of references, composition and meetings held during the FY 2023-24 alongwith attendance of members of the Committees are provided in the Corporate Governance Report, which forms part of this Annual Report.
NOMINATION & REMUNERATION POLICY
Pursuant to Section 178 of the Act and Regulation 19(4) of the SEBI Listing Regulations, the Company has adopted a Nomination & Remuneration Policy which aims to lay down a framework in relation to nomination and remuneration of directors, KMPs, senior management personnel and other employees.
The details of remuneration paid to executive director and sitting fees paid to non-executive directors have been included in the Corporate Governance report forming part of this Annual Report. The criteria of making payments to non-executive directors has been included in the Nomination & Remuneration Policy and the said policy, as per Regulation 46 of the SEBI listing regulations, is available on the Companys website at https:// www.utimf.com/amc-shareholders/code-and-policies.
AUDIT & SYSTEMS
The Company upholds the belief that internal audit control is an indispensable companion to the governance principle advocating the exercise of management freedom within a framework of checks and balances. The Companys commitment lies in establishing an efficient and effective internal control environment that not only ensures operational efficiency but also safeguards Companys assets.
With a well-established and robust internal audit process, the Company maintains continuous vigilance over the adequacy and effectiveness of the internal control environment. This diligent oversight extends across the Company, ensuring compliance with operational systems, internal policies and regulatory requirements.
DATA PROTECTION AND CYBER SECURITY
The Company recognises the importance of the collection, use and security of users information collected through various sources. The Company has Board approved Information Security Policy, Cyber Security Policy, Data Privacy Policy and Business Continuity Policy which define the rights of the Company / user to use, secure or restrict personal and confidential information of the investors. The Company is committed to securing investors personally identifiable information and has implemented processes and technologies to secure the same.
UTI AMC has a strong cyber security framework wherein cyber risk and its mitigations are monitored by the Technology Advisory Committee, Information Security Executive Committee and Board level Risk Management Committee.
Key areas covered under cyber security include strong adherence to the Board-approved Information and Cyber Security Policy, compliance with SEBI guidelines and adopting industry best practices. The Company maintains a strong cyber security system and has a framework to protect data integrity and privacy.
The Company has increased efforts through sensitisation of employees, customers and other stakeholders on cyber frauds, data privacy etc. by providing information security awareness through training, emailers (related to the latest cyber threats) and conducting phishing campaigns.
The information security objectives are aligned with business objectives with highly resilient business continuity infrastructure and processes. The Company conducts periodic disaster recovery drills to test the infrastructure capabilities to continue the business during any contingency. Furthermore, the Company has obtained specialised cyber-security insurance coverage as well.
Periodic audits were conducted internally as well as through external firms to ensure data security and to conduct the review of the Cyber Security & Cyber Resilience Framework and System Audit in compliance with SEBI guidelines.
CORPORATE SOCIAL RESPONSIBILITY
Business corporations constantly strive to maximise shareholders wealth. However, there is a shift in the shareholders mindset led by social expectations, causing business leaders to revise their strategy by taking into account the economic, social and environmental impacts. The Company gives utmost importance to its Corporate Social Responsibility (CSR) initiatives to operate in an economically, socially and environmentally sustainable manner, while recognising the interests of its stakeholders.
The Company is committed to ensure that its business is conducted according to rigorous ethical, professional and legal standards. The Company recognises that its business activities have direct and indirect impact on the society. The Company strives to integrate its business values and operations in an ethical and transparent manner to demonstrate its commitment to sustainable development and to meet the interests of its stakeholders.
The Company has a Corporate Social Responsibility Policy in compliance with the requirements of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules) read with circulars and notification issued thereon, which inter- alia lays down the, roles and responsibilities of the Board relating to CSR, manner of implementation and monitoring of CSR activities.
The Company has a Board-level CSR Committee and the details of its composition, terms of reference, number of meetings and attendance have been disclosed in the Corporate Governance Report forming part of this Annual Report. The Company also has a management-level CSR Committee to deal with all operational aspects related to CSR in accordance with the framework prescribed in the Policy and the guidance of the CSR Committee of the Board.
Pursuant to the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed as per the annual action plan for the FY 2023-24 have been utilised for the purpose and in the manner as approved / modified by the CSR Committee and Board.
As per Regulation 46 of the SEBI Listing Regulations the Policy is available on the Companys website at https://www.utimf.com/ amc-shareholders/code-and-policies.
The Annual Report on the Companys CSR activities for FY 2023-24 is annexed as Annexure-IIIto this Directors Report.
RISK MANAGEMENT
The Company has established processes and systems to ensure robust enterprise-wide risk management framework. The Risk Management Committee and Board periodically reviews the Companys risk management policies, procedures and processes which include the delegation of investment and financial responsibilities, the establishment of prudential investment norms, the approval & dissemination of guidelines and restrictions, as well as the establishment of counter-party limits. The Board also reviews the performance of funds against the relevant benchmark and competing funds.
The Companys risk management framework includes:
(i) Risk Management Committee: The Committee reviews the overall risk management policies, guidelines and implementation thereof. The meetings of said committee are held on quarterly basis.
(ii) Equity and Debt Steering Committee: The Committee reviews fund performance and strategy reports as well as discuss products strategies and market developments.
(iii) Department of Risk Management: The Department reviews the implementation and governance of risk management framework at the scheme level and at the Company level. The department regularly reviews the portfolio risks, conducts performance attribution of funds vis-a-vis their respective benchmarks and competing funds, tracks the adherence of portfolio characteristics to the respective scheme mandates and computes various portfolio analytics to judge the risk and return indicators over a period of time.
(iv) Investment Committee: Investment Committee meets on a monthly basis to review, among other things, the performance of the funds, top securities transactions and exceptions, if any, to regulatory / internal investment norms or limits.
(v) Executive Risk Management Committee: This Committee, consisting of functional heads, meets on quarterly basis to review the Risk Management Policy, Risk Control Self-Assessment (RCSA) framework, risk appetite framework, crisis management, risk incidents and various other operational risk indicators.
(vi) Technology Advisory Committee: This Committee comprises of Chief Risk Officer, Head of Information Technology, Enterprise Architecture Head, Chief Information Security Officer and External Director. This Committee meets on a quarterly basis to assess and endorse the implementation of the cybersecurity and cyber resilience framework as well as to evaluate current IT and cybersecurity capabilities. The Committee establishes plans to enhance and fortify cybersecurity and cyber resilience measures.
(vii) Information Security Executive Committee: This Committee comprised of the Chief Risk Officer, Head of Information Technology, Enterprise Architecture Head, Chief Information Security Officer and Heads of respective departments. The Committee meets on a quarterly basis to oversee and direct security programs across the organisation. Their responsibilities are to ensure that information assets are adequately protected, initiating programs to maintain information security awareness, enforcing & monitoring information security policies and governance throughout the organisation and continuously improving these processes.
(viii) Department of Internal Audit: The Department of Internal Audit together with the Investment Committee and the Department of Risk Management ensures that the risk related policies, procedures and processes laid down by the Board and the Risk Management Committee are effectively implemented.
Effective risk management is critical to the operation of the Companys business. The Company has adopted various policies and procedures to manage the risks applicable to its business operations, inter-alia, Investment risk, Liquidity risk, Operational risk, Cyber Risk, Market risk, Credit risk and Regulatory risk.
BOARD EVALUATION
Pursuant to Section 178 of the Act and Regulation 17 of the SEBI Listing Regulations, the Company has a Policy for Evaluation of Performance of the Board of Directors. The Policy aims to formulate the procedures and prescribes the criteria to evaluate the performance of the entire Board, its Committees and individual directors as well as to assess and enhance the effectiveness of the Board as a whole. As per Regulation 46 of the SEBI Listing Regulations, the policy is available on the Companys website at https://www.utimf.com/amc- shareholders/code-and-policies.
The Company had engaged an external expert firm to conduct Board evaluation for the FY 2023-24. The performance evaluation was conducted in line with the provisions of the Policy, the Act, the SEBI Listing Regulations and Guidance Note on Board Evaluation dated 5th January, 2017 issued by SEBI and benchmarked with various international practices.
The details on evaluation of performance of Board, its Committees and individual directors are disclosed in the Corporate Governance Report forming part of this Annual Report.
EMPLOYEE STOCK OPTION SCHEME
The Company has an Employee Stock Option Scheme, namely UTI AMC Employee Stock Option Scheme-2007 (ESOP Scheme). The objective of ESOP Scheme 2007 is to reward employees to align individual performance with Companys objectives and drive shareholders value creation, create a culture of ownership among the executives and employees to enhance their commitment to the organisation, to collaborate, attract and retain key talent critical to organisations success. There are no material changes made to the above Scheme.
The details of ESOP Scheme 2007 are as under:
| Particulars | Total |
| No. of Options granted | 89,03,828 |
| No. of Options vested (excluding options that have been exercised) | 22,24,730 |
| No. of Options exercised | 17,92,232 |
| Total number of equity shares that would arise as a result of full exercise of options granted net of cancelled / forfeited / lapsed options | 48,27,951 |
| No. of Options forfeited/lapsed/cancelled | 40,75,877 |
| Money realised by exercise of options (in ) | 60,86,49,712 |
| Total number of options in force | 30,35,719 |
| Variation in terms of options | - |
| The Exercise Price | 728 |
The details of stock options granted during the last three financial years to the employees of the Company and few employees of the subsidiaries are as under:
| Sr. No. | Date of grant | No. of options granted | Face Value (Rs) | Exercise Price (Rs) |
During the FY 2021-22 |
||||
| 1. | 28th July, 2021 | 8,61,350 | 10/- | 923.20/- |
| 2. | 17th January, 2022 | 15,291 | 10/- | 1,079.45/- |
During the FY 2022-23 |
||||
| 3. | 13th September, 2022 | 10,17,243 | 10/- | 816.05/- |
During the FY 2023-24 |
||||
| 4. | - | - | - | - |
The details of stock options granted to KMPs under the ESOP Scheme 2007 are as under:
| Sr. No. | Particulars | Designation | Total options granted |
| 1. | Mr. Imtaiyazur Rahman | Managing Director & Chief Executive Officer | 6,65,393 |
| 2. | Mr. Vinay Lakhotia* | Chief Financial Officer | 49,427 |
| 3. | Mr. Surojit Saha* | Chief Financial Officer | 49,427 |
| 4. | Mr. Arvind Patkar | Company Secretary & Compliance Officer | 6,512 |
*During the FY2023—24, Mr. Surojit Saha ceased to be the Chief Financial Officer and Key Managerial Personnel of the Company due to attaining the retirement age with effect from closure of business hours on 30th September, 2023. The Board had, in its meeting held on 25th July, 2023, appointed Mr. Vinay Lakhotia as Chief Financial Officer of the Company with effect from 1st October, 2023.
During the FY 2023-24, the Company has not granted stock options to employees under the ESOP Scheme 2007 which is equal to or exceeds one percent of the issued share capital of the Company and no employee was granted options amounting to five percent or more of options granted.
The grant was made based on parameters inter-alia including tenure, performance, role and total cost to the Company. The other terms of the aforementioned grants were in line with the options granted under the ESOP Scheme 2007.
The Company had obtained the in-principle approval from stock exchanges for listing of equity shares for grants under the ESOP Scheme 2007. The following equity shares are issued and listed during the previous three financial years:
| Financial Year | Number of equity shares |
| 2023-24 | 2,72,479* |
| 2022-23 | 34,654 |
| 2021-22 | 1,61,787 |
| Total | 4,68,920 |
*1,864 equity shares of the face value of Rs. 10 each allotted under ESOP Scheme 2007 on 28th March, 2024 were listed and admitted for trading on stock exchanges with effect from 1st April, 2024.
The scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the SEBI SBEB & SE Regulations). The disclosures as required under the aforesaid regulations can be accessed on the Companys website at https://www.utimf.com/. The certificate, as required under Regulation 13 of the SEBI SBEB & SE Regulations, from the Secretarial Auditor of the Company certifying that UTI AMC Employee Stock Option Scheme-2007 has been implemented in accordance with the aforesaid regulations will be available for inspection at the 21st AGM of the Company.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Although the Companys core business of fund management services isnt energy-intensive or reliant on specialised technology, it remains vigilant about energy conservation. Wherever feasible, the Company has implemented measures to conserve energy, aligning with its commitment to sustainability.
Recognising the significance of optimising energy usage and conservation, the Company emphasises these aspects in its Business Responsibility and Sustainability Report, forming part of this Annual Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of foreign exchange earnings and outgo are mentioned below:
(Rs in crore)
| Particulars | FY 2023-24 | FY 2022-23 |
| Foreign Exchange Earnings | 15.16 | 13.86 |
| Foreign Exchange Outgo | 13.32 | 12.11 |
The Company spent foreign exchange for payment towards professional fees and foreign business tours.
ANNUAL RETURN
In accordance with the requirements mentioned under Section 134(3)(a) and Section 92(3) of the Act and circulars issued thereon, the Annual Return of the Company for the FY 2023-24 is available on the Companys website at https://www.utimf. com/amc-shareholders/annual-reports.
MANAGEMENTS DISCUSSION AND ANALYSIS SECTION
The Management Discussion and Analysis Section of the Company for the FY 2023-24 forms part of this Annual Report as required under the Act and Regulation 34(2)(e) read with Schedule V of the SEBI Listing Regulations.
CORPORATE GOVERNANCE
The Company is a professionally managed asset management Company, steered by a proficient Board whose expertise spans in diverse fields & supported by a dedicated management team, rich in talent and experience, the Company is steadfast in its commitment to operating within a robust and compliant framework.
In terms of the SEBI Listing Regulations, a separate section titled Corporate Governance Report has been included in this Annual Report.
The Company has obtained a certificate from a Practicing Company Secretary, certifying that the Company has complied with the mandatory requirements as stipulated under the SEBI Listing Regulations and his certificate forms part of the Corporate Governance Report which is forming part of this Annual Report.
ESG INITIATIVES OF THE COMPANY:
In todays rapidly evolving financial landscape, the integration of Environmental, Social and Governance (ESG) principles is no longer a peripheral consideration but a central tenet of business strategy. At UTI AMC, we recognise the critical role we play in driving sustainable economic growth, promoting social equity, and fostering robust governance practices. Our commitment to ESG is embedded into the fabric of our operations, guiding our investment decisions, shaping our corporate culture and informing our engagement with stakeholders. Throughout the past year, we have matured our ESG programmes, confident that our ongoing dedication and enthusiasm for ESG will empower us to cultivate a more vibrant workplace while upholding the trust and respect of our valued employees, customers and partners. As forces of nature and human actions continue to disrupt and reshape the world, we recognise our footprint and acknowledge our responsibility to advocate for the environment, underrepresented and marginalised communities and sound governance practices.
The beginning of FY 2021-22, we started reporting on our ESG performance through the Sustainability Report. As a part of the SEBI mandate, we have been publishing the Business Responsibility and Sustainability Report (BRSR) reflecting various initiatives undertaken at UTI AMC under the nine NGBRC principles. We are incorporating ESG as a major element into all aspects of our business operations, such as responsible investment, employee well-being, community involvement, environmental footprint reduction and risk management. Over the past few years, we have encouraged a gradual shift in our business strategy to embed ESG as a company-wide culture. This modification reflects our goal of promoting value creation within our ecosystem while also considering the welfare of all involved parties.
Environmental
Our environmental impact strategy supports the goals of the Paris Climate Agreement to limit the increase of global temperatures to 1 .5 ?C. Our approach to environmental stewardship is multifaceted, encompassing the reduction of environmental footprint within our own operations, the integration of environmental risk analysis into our investment process and environmental efforts for the community. Operating sustainably: We have improved our energy efficiency by transitioning to larger or better-designed LED bulbs, improving insulation to reduce heat loss, conducting energy audits and monitoring heating through a smart office design (HVAC systems, and use of environment-friendly R-134A refrigerant gas in 2x300 TR chiller plants in the air-conditioning systems). We are proud to receive Green Energy Certificates and reach the milestone of 1 00% renewable energy at our corporate office.
A conscious effort is made to source materials that are both resilient and sustainable for office infrastructure. Our newly purchased furniture, chairs and carpets are manufactured from fully recyclable materials and have green certificate ratings (such as AFRDI Green Tick Certification, LEED Certification, and SCS-EC10.3-2014 v4.1) and Environmental Product Declarations (EPDs). In the reporting year, 20.84% of our total capex was attributed to sustainable sourcing. We have installed a sewage treatment plant with a capacity of 50,000 litres to treat sewage water and make it available for use in air conditioning, gardening and other secondary purposes. This has led to a significant reduction in our water footprint by the said volume. We have implemented waste reduction and recycling processes that involve composting 100% of our wet waste and recycling 100% of our paper and plastic waste at the corporate premises. In the reporting year, we composted of wet waste and recycled of paper and plastic waste. Company wide e-waste is handled by government-authorised vendors as per our recycling policy, in the reporting year 1191.90 Kg was recycled. Furthermore, we have been reducing our environmental footprint through digitisation. A digital Document Management System (DMS) named "UTI E-Way" has been adopted to further the aim of transitioning to a paperless office. We also provide EV charging stations to employees at the corporate office.
Responsible Investment Policy: UTI AMC has adopted a Responsible Investment Policy, demonstrating its commitment to the integration of ESG factors in the investment decisionmaking process. We have also been signatory to the United Nations-Principles for Responsible Investing (UN-PRI) since 2020. As a part of the ESG Integration framework and policy, we consider the following environmental factors for the due diligence of investee companies that help them achieve a low-carbon economy carbon emissions, water stress, toxic waste, biodiversity, financing impact, and clean technology. In November 2023, UTI AMC became a signatory to Climate Action 100 + , and along with other signatories, we have commenced engagements with seven Indian corporate companies that have been recognised as very high carbon emitters. UTI AMC understands the risks of stranded assets for these companies and will engage with them to push for an effective transition and decarbonisation plan (Climate Action 100+ is made up of 700 global investors who are responsible for more than $68 trillion in assets under management across 33 markets).
Environmental efforts for the community: UTI AMC collaborated with Gramin Vikas Vigyan Samiti (GRAVIS) to implement water harvesting techniques and farming interventions in fifteen villages of Jaisalmer and Pokhran block of Jaisalmer (a NITI Aayog Aspirational District) for community development. A total of 15 villages (8 in Jaisalmer block and 7 in Pokhran block), covering a population of about 17,681 people, benefited from this project. Through this project, we have constructed 50 water storage units for domestic consumption and farming needs, 50 farming dykes for greater food security, and 50 Arid Horticulture Units (AHUs) for nutrition and income security. Trainings were conducted for more than 12,544 people on water management, dry land farming, and goat rearing. A community pond has been rejuvenated, and a silvopasture unit (the practice of integrating trees, forage, and the grazing of domesticated animals in a mutually beneficial way) has been established.
Social
As an organisation, we are deeply committed to addressing the needs of all stakeholders, and we view our social capital as an essential contributor to our businesses continuous success. By leveraging the relationships we have formed with our valuable stakeholders, we strive to cater to the needs of the wider community. Our commitment to social responsibility is reflected in our focus on employee well-being, diversity and inclusion, and community impact. We are committed to increase female representation in our workforce which currently stands at 27.74% of our employee strength. In the year ended 31st March 2024, 50-60% of our hires were women. Percentage of women in mid-senior to leadership cadre was 19%.
With an emphasis on our social capital, we have implemented various initiatives for employee well-being. We conducted a physical and mental wellness survey that aimed to understand employee health habits, lifestyle choices, and mental wellbeing. The results of the survey culminated in the organisation of eight physical and mental well-being webinars by experts. To further reinforce our commitment to employee health, we conducted a Health and Wellness Carnival for check-ups (eye check-up, hair & skin examination, dental check-up, BMI and diet consultation) in addition to our biennial mandatory health check-ups for all employees. Recognising the importance of fostering an inclusive and conducive work culture for all employees, UTI AMC undertook the initiative to conduct a Great Place to Work certification survey. This survey served as a pivotal litmus test, providing valuable insights into the organisations current culture and highlighting areas for improvement to better accommodate the needs and expectations of the emerging workforce.
Diversity and inclusion are integral to our corporate ethos. We recognise that diverse teams drive innovation and better decision-making. Within our organisation, we strive to create an inclusive workplace where all employees feel valued and empowered. This includes implementing unbiased recruitment practices, providing equal opportunities for career advancement, and fostering a culture of respect and collaboration. Similarly, we advocate for diversity and inclusion within the companies we invest in, encouraging them to build diverse boards and leadership teams. We have introduced Diversity, Equity, and Inclusion training as an annual refresher course that includes an understanding of conscious and unconscious biases and enrolled six women employees in a programme to transition from mid-senior to a leadership role.
We follow a 360-degree diagnostic learning approach for building a conducive environment, right from strengthening domain knowledge to behavioural skills, encouraging top-down and bottom-up communication mediums, and cross-functional interaction. Throughout the year, trainings were conducted on sales and marketing, digital marketing, human resource practices, corporate governance practices, and compliance. The training helped employees improve productivity and ensure compliance with regulatory provisions and policies of the Company.
We conduct Investor Awareness Programmes (IAPs) across multiple cities for different target audiences. In the reporting year we conducted 414 IAPs. The core objective of these programmes is to create awareness about investment and financial planning among the target audience. We also run social media handles and campaigns to educate investors on various topics ranging from financial planning, goal-based investments, tax savings, the significance of starting early, and retirement, to name a few. In line with our objective of being a socially responsible organisation, we have undertaken various CSR initiatives around health, education, and rural development. Through our initiatives in the reporting year, 28,258 lives were benefitted. Governance
Integrity, transparency and accountability serve as the cornerstones of our corporate governance concept. This mindset is essential for safeguarding the interests of all our stakeholders, boosting investor confidence and enabling the generation of lasting wealth. We have in place an ESG Committee of the Board that provides us with valuable guidance in our ESG journey. We have also adopted a formal stewardship code and voting policy and we have also engaged external experts and rating agencies to provide us with independent inputs to supplement our ESG assessment of the investee companies. Driven by our rich legacy, UTI AMC is committed to raising the bar for governance in the industry.
This year we marked the completion of our first assessment as a signatory to UN PRI. Members of our investment team are undergoing training and certification for responsible investment and this year 3 members of the team completed their certification. We understand that effective decisionmaking, risk management, accountability, and transparency are crucial to our success. With stringent processes in place, we make informed decisions that align with our values and goals, minimising risk while upholding the trust of our diverse stakeholders. Therefore, we remain steadfast in our commitment to transparent governance, ensuring that we maintain the highest standards and exceed expectations.
An effective corporate governance framework, inter-alia, focuses on continuous engagement with its stakeholders, long-term value creation for all its stakeholders, protection of the rights of all stakeholders, independent functioning of the board and its committees from management, transparency and integrity in dealings, fair and timely disclosures, and creating a culture instrumental to both its stakeholders and regulators. These parameters form the bedrock of the Companys sustainable governance practices. We align our governance practices to meet stakeholders aspirations and societal expectations. Our practices architecture is driven by the 3Cs, i.e. Conviction, Capabilities and Commitment. Code of ethics, whistleblowing, anti-money laundering, prevention of sexual harassment, and cyber security trainings are incorporated into our learning and development efforts. We ensure employees undergo this training continuously to build awareness and sensitivity through an annual certification process. Overall completion rate for the training in the reporting year was 99%. In FY 2023-24, we conducted ESG awareness sessions for all the employees (UTI Group) through 24 sessions (12 in-person and 12 virtual) with a 96% participation rate.
Cybersecurity is crucial for UTI AMC in todays digital landscape; hence, we have incorporated best-in-class systems and processes and imparted regular training to employees to enhance its ability to monitor, detect, and respond to data breaches and cyber-attacks effectively. This minimises the potential damage and ensures a more secure environment. The growing trend of digitalisation has encouraged us to develop a methodical client acquisition strategy that has been powered by our digital capabilities while converting users through a straight- through process or in the form of leads that are then reached through call centres, targeted email, remarketing campaigns, etc. In the reporting year, we had zero data breaches. We undertook initiatives such as Zero Trust Network Access (ZTNA)/ VDI, Cyber Liability Insurance, a cyber crisis tabletop exercise related to ransomware, and continuous sensitisation through emailers on threat awareness. The Risk and Compliance teams proactively review and monitor daily, weekly, and monthly regulatory and internal submissions.
The Company prioritises transparency with its customers by furnishing all relevant details through various platforms such as emails, website, apps. The Company actively seeks feedback from customers at different stages, and customer complaints / grievances undergo root cause analysis to enhance service quality. During FY 2023-24, the average net promoter score stood at 94.01%. Subsequently, customers who provided low ratings were contacted to solicit feedback on areas for improvement.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
SEBI has, vide its official gazette notification dated 5th May, 2021 and circular dated 10th May, 2021, mandated the top 1000 listed entities to disclose their performance against the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC) in Business Responsibility & Sustainability Report from the FY 2023-24.
Pursuant to Regulation 34 of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report for the FY 2023-24 forms part of this Annual Report. ESG factors are increasingly becoming important considerations for investors. The BRSR reflects a commitment to sustainable development and responsible business practices, which are crucial for Indias economic growth and societal well-being in the long term.
The Company has issued its sustainability report for the FY 2022-23 with reference to the GRI Standards along with guidance from the Sustainability Accounting Standards Board reporting standards which outlines Companys performance on key ESG parameters integrated in the operations. At UTI AMC, focus on ESG matters underpins the business and is imperative to fulfilling the mission of serving clients responsibly and creating long-term value.
As per Regulation 46 of the SEBI Listing Regulations the Business Responsibility and Sustainability Report is available on the Companys website at https://www.utimf.com/amc- shareholders/annual-reports.
The Sustainability Report is available on the Companys website at https://www.utimf.com/amc-shareholders/code-and-policies.
POSTAL BALLOT
No resolution was passed through Postal Ballot during FY 202324. Further, no resolution is proposed to be passed as special resolution through Postal Ballot as on the date of this Report.
WEBSITE DISCLOSURES
In compliance with the Regulation 46 of the SEBI Listing Regulations, the Company maintains a functioning website where necessary information / disclosures / intimations etc. are disclosed from time to time. The link to the statutory disclosures under the said regulation is- https://www.utimf.com/amc- shareholders/disclosures-under-regulation-46-of-the-lodr.
UTI Mutual Fund Digital platforms for Investors, Distributors and Corporate Portal were revamped this year to offer best-in-class user experience and enhanced features for all users. The UTI MF investor app and web is now equipped with 75+ features and functions for users to explore, evaluate, transact, service and enquire seamlessly. The revamped UTI Buddy App and web has been specially designed to serve as their ultimate solution for onboarding, recommending and managing investments in their clients. Its going to give them an array of exciting and improved features thats going to make it easy for them to manage their business. The Companys Corporate Portal is now teeming with information on our business, our management team, offerings and services that is easily accessible and is presented in an attractive user-friendly manner.
OTHER DISCLOSURES
In terms of the applicable provisions of the Act and the SEBI Listing Regulations, the Company additionally discloses that during the FY 2023-24:
(i) the Company has not accepted any deposit under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014;
(ii) t here was no change in the nature of business of the Company;
(iii) there was no revision in the financial statements or Directors Report of the Company;
(iv) t here was no material change and commitment affecting the financial position of the Company between the end of the FY 2023-24 and the date of this report;
(v) t here was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future;
(vi) t he Company has not issued any shares with differential voting rights;
(vii) the Company has not issued any sweat equity shares;
(viii) the Company has not bought back its shares, pursuant to the provisions of Section 68 of the Act and Rules made thereunder;
(ix) no application has been made under the Insolvency and Bankruptcy Code, hence, the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable;
(x) the Company has not made any one-time settlement with the Banks or Financial Institutions;
(xi) the Company has not failed to implement any corporate action; and
(xii) the Companys securities were not suspended from trading.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) and Section 134(5) of the Act, with respect to Directors Responsibility Statement, it is hereby confirmed that:
(i) in the preparation of the annual accounts for the FY 2023-24, the applicable accounting standards were followed along with proper explanation relating to material departures, if any;
(ii) the accounting policies were selected and applied consistently, judgments and estimates were made so that they are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year i.e. 31st March, 2024 and of the profit and loss of the Company for that period;
(iii) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts were prepared on a going concern basis;
(v) proper internal financial controls were in place and that such financial controls were adequate and were operating effectively; and
(vi) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
ACKNOWLEDGEMENT
The Board extends heartfelt appreciation to the dedicated employees and support staff across the Company and its subsidiaries for their unwavering commitment and hard work. Furthermore, the Board acknowledges with gratitude the invaluable support, co-operation and guidance extended by all stakeholders such as the Securities and Exchange Board of India, Reserve Bank of India, Pension Fund Development and Regulatory Authority, Ministry of Corporate Affairs, Registrar of Companies, Association of Mutual Funds in India, UTI Trustee Company Private Limited, National Securities Depository Limited, Central Depository Services (India) Limited, National Stock Exchange of India Limited, BSE Limited, as well as the Companys sponsors and members.
Additionally, the Board expresses its thanks to UTI MF scheme investors, auditors, custodians, registrar & share transfer agents, banks, distributors and all other service providers for their invaluable support.
| For and on behalf of the | |
| Board of Directors of | |
| UTI Asset Management Company Limited | |
| Date: 20th June, 2024 | Dinesh Kumar Mehrotra |
| Place: Mumbai | Chairman |
| (DIN: 00142711) |
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