AFFLUENCE

Conservation of Energy

Since your Company does not own any manufacturing facility, the above said particulars mentioned in the Companies(Accounts) Rules, 2014are not applicable.

Technology Absorption

Since your Company does not own any manufacturing facility, the above said particulars mentioned in the Companies (Accounts) Rules, 2014 are not applicable.

State of Company’s Affairs - Management Discussion & Analysis

(a)  Domestic Mutual Fund business

As of March 31, 2018 UTI Mutual Fund had 231 schemes in operation with Average Asset Under Management (AAUM) at Rs.1,54,939 crore as against Rs.1,36,810 crore in the previous year.

As of March 31, 2018 there were 231 Schemes/Plans offered by the UTI-MF, out of which 33 were equity funds; 190 were income funds; 2 were liquid funds; and 6 were balanced/hybrid funds. During the period, 6 equity schemes and 34 debt Schemes were launched and the total funds mobilised were Rs.2,061.46 crores and Rs.3,638.75 crores respectively. On the other hand, 38 debt schemes and 1 equity schemes were closed or matured. The total dividend paid out by all the schemes during the financial year 2017-18 was Rs.2249.51 crore.

The objective of the fund management in UTI Mutual Fund  is  to deliver stable and consistent returns in the medium  to long term, with a fairly lower level of volatility compared to the broader market. Rigorous in-house research, a process-based approach to investment management, and a focus on asset allocation and sector selection along with stock selection, are undertaken in the endeavor to consistently remain in the top quartile of the peer group of funds.

(b)  Overseas Funds

The AUM of Funds management by UTI International Ltd. (100% subsidiary of the Company) were Rs.18791 crore as on March 31, 2018 as compared to Rs.21,753.5 crore in the previous year.

(c)  Portfolio Management Services - axel

UTI PMS division had Assets Under Management / Advise amounting to Rs.1,15,853 crore as on March 31, 2018 as compared to Rs.1,01,522 crore in the previous year. UTI PMS has 174 active clients which include High Net worth Individuals, Corporates, Institutions, Government Organizations and Overseas Investors. The PMS Division has been growing well over the last few years and established a good track record in terms of performance and diversification of opportunities. This Division aims to provide its clients with investment solutions commensurate with their risk profiles and their return expectations, using research-based valuation and security selection techniques. PMS offers discretionary and research-based advisory services.

(d)  Investor Reach and Distribution

As on 31st March, 2018, UTI Mutual Fund (UTIMF) had 1.08 crore investor folios. UTIMF has always been proactive in its communication with its investors on announcements, services etc. through various mediums.

New Initiatives

During the year, following initiatives were taken in the area of investor service:

i)     UTI FAMILY facility: The facility called FAMILY (Father and Mother I Love You) was  introduced  by  UTI  MF  first  time  in the Mutual Fund industry. With this facility one can make the investment under Growth option in UTI MIS Advantage Plan, UTI Wealth Builder Fund or UTI Balanced Fund and opt for periodic payments to either of the parents. On registration, the amount (minimum of Rs.1000) as opted by the investor is paid out to the beneficiary parent on the 1st business day of every month.

ii)    Know Your Customer/In Person verification using AADHAAR based biometric verification: Last year, e-KYC using AADHAAR based OTP verification was introduced for UTI MF investors. However, with this process the investor can invest only upto Rs.50,000 per financial year per Mutual Fund.  Subsequently, SEBI allowed KYC without any limit of investment where In Person verification will be completed by the investor using AADHAAR based biometric verification. UTI MF has enabled this facility at all the offices where the devices for carrying out biometric verification are made available. The entire process is a paperless process.

Revamp of UTI MF website: UTI MF has revamped its online portal www.utimf.com where following features are added:

-     Investors can log-in with PAN and OTP in addition to user ID and password

-     Some of the Solution Based schemes meant for children, Retirement solutions etc. have been added for transactions

-     Investors can select multiple schemes for investment and make one single payment using internet banking or debit card or NEFT/RTGS

-     Flexi SIP was introduced where the investors can invest on any day of his choice in any month, for the amount and scheme opted by him/her.

iii)   Introduction of investment through Chatbot: Another investment avenue called “Chatbot” has been introduced through which existing investors can invest in our schemes. Chatbot is accessible exclusively through the Facebook Messenger  via UTI Mutual Fund Facebook page. The investment process is completely paperless.

iv)   Trade mark registration of UTI SMaRT Form : In order to provide ease of investing, single bank mandate form called UTI Single Mandate for Registration and Transaction Form (UTI SMaRT Form) was devised. We have acquired TM registration for UTI SMaRT Form. Once registered, this form can be used by investors for investing through any of the platforms i.e. UTI Buddy, mobile app, UTI MF website or through physical application.

v)    National Pension Scheme :

-     Online PRAN generation  facility  for  National  Pension Scheme (NPS) has been enabled on the website.

-     SIP facility for NPS subscribers has been added.

e. Marketing initiatives during the Financial Year 2017-18

i)     Financial Year 2017-18 saw an on-going impetus on driving Brand thought leadership by leveraging our enhanced digital assets to own the position of seamless and easy digital investment solutions, through #DigiInvest campaign. On the back of an integrated marketing campaign; key metrics for the new web portal improved substantially and Traffic increased by 91%.

ii)    UTI Retail loyalty programme UTI Summit - delivered memorable experiences for over 7700 IFAs. This year Summit qualifiers increased by over 35%. We engaged with IFAs via conference calls, tactical content e-mailers and up sell / crosssell mailers.

iii)   utiswatantra.com continues to be our dedicated website hosting all the Swatantra content created across various platforms. It is actively promoted through all our Investor Education initiatives as one platform which can help with all MF related information. The traffic on the website grew by 212 % over the last Year & build a community of 1,30,657 on the platform.

iv)   We conducted Grand finale of 8th edition of Financial Advisor Awards and launched 9th edition of UTI MF and CNBC TV 18 Financial advisor Awards including forums at beyond metro cities namely Lucknow, Kochi, Vadodara and Patna.

v)    In the current digital landscape, Social Media plays a pivotal role to disseminate relevant content and helps stay in touch with the digital audience. As a brand we currently have handles across Facebook (3.7 million fans), Twitter (19,262 followers), YouTube (6,632 subscribers) and LinkedIn (5,902 followers).

Continuing the organisation’s digital transformation journey; the customer web portal www.utimf.com was revamped and re- launched in Nov 2017. The key objective of the website project is to provide best in class user experience to our investors. The responsive portal is built with the customer at the centre & entailed 4 major steps namely - User Research, Benchmarking and IA, UX and Visual Design, Technology framework and Content Design.

vi)    Content is the only  peg  by  which  a  Brand  today  can  make its presence felt in the Social Medium. To this effect, we have created content across various topics which includes 12 Investor education related content pieces, 15 FM related content pieces, 10 Product related content pieces. These articles are created in the contemporary content formats like Survey, Infographics, listicles, GIF, animated video and low resolution what’s app formats which are popular in the digital medium.

vii)   We are constantly upgrading UTI Buddy app, adding new features to remain competitive in the market. We have included an important feature allowing distributors to recommend to non- smart investors, & this has doubled the monthly transactions taking it to 3000 per month. Also, we have seen an increase of 35%, in UTI Buddy Registrations taking the count to 14927 UTI Buddy registrations, i.e.50% of the active base of IFAs.

viii)  Outbound campaigns from our call centre, initiated for distributors where they are informed about the new NFO and support sought, summit points intimation, Scheme Rollover and Switch over Campaigns for retail investors.

ix)    Customer First Unit launched at Contact Center that tracks timeliness and accuracy of the resolution provided by Karvy and sends SMS update to the investor on the resolution.

x)     CSAT Launched at Contact Center to track investor’s feedback on Resolution, Recommending UTI and Overall Experience.

xi)    New initiatives-

UTI MF Chatbot - We have recently launched the UTI MF Chatbot, which is accessible exclusively through the Facebook Messenger platform via their Facebook page. Using the UTI Chatbot, existing UTI MF investors can easily invest into UTI MF schemes. The UTI Chatbot is also capable of answering basic MF related queries, automatically. We already have around 600 odd users, using the UTI MF Chatbot

-      Based on annual syndicated research findings UTI MF stands at 3rd rank amongst the category

-      During the year, UTI MF won 9 awards for marketing activity, which included amongst others recognition for UTI Summit, UTI Swatantra, Innovation in Mobile technology - UTI MF app and UTI Buddy.

Foreign Exchange Earnings and Outgo:

There were foreign exchange earnings of Rs. 3.50 crore during the year. Your company spent foreign exchange amounting to Rs. 7.98 crore during the year for undertaking foreign business tours, training of employees and payment towards professional fees.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134 (3) (c) and Section 134(5) of the Companies Act, 2013 with respect to Directors’Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the FY 2017-18, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) the accounting policies have been selected and applied consistently and judgments and estimates have been 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 financial year i.e. March 31,2018 and of the profit and loss of the company for that period;

c) the proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of this Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts has been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

To the Members,

We are pleased to present the report on the business and operations of the Company along with Audited Accounts for the year ended March 31, 2018.

(I) Revision of financial statement or Board’s report

There was no revision of Financial Statements or Board’s report during the financial year.

(II) Share Capital

The paid-up share capital of your Company was Rs. 126.79 crore as on 31st March, 2018. The net worth of the Company has increased to Rs.2131 crore as on March 31, 2018 from Rs.1,814 crore as on March 31, 2017.

None of the Directors of the Company hold shares or convertible instruments of the Company as on 31st March, 2018.

(III) Treasury operations

During the year, your Company’s treasury operations continued to remain focused on proactively managing the surplus funds within the well-defined risk management framework. The deployment of surplus funds of the Company is guided by the following parameters:

- Protection of Capital

- Return on Capital

- Capturing the future earning potential

- Minimum target rate of return

(IV) Corporate Governance

A corporate Governance Report along with the compliance report of the statutory auditors on the same is attached as Annexure - I.

Annexure I

CORPORATE GOVERNANCE REPORT FOR THE FINANCIAL YEAR 2017-18

Company’s Philosophy on Corporate Governance

The Company’s activities are carried out in accordance with good corporate practices and the Company is constantly striving to improve them and adopt the best practices. It is firmly believed that good governance practices would ensure efficient conduct of the affairs of the Company and help the Company achieve its goal of maximizing value for all its stakeholders.

The Company has a strong legacy of fair, transparent and ethical governance practices. The Company has adopted a Code of ethics for its employees. It is available on the Company’s intranet site. The Company’s corporate governance philosophy has been further strengthened through Code of Conduct for Prevention of Insider Trading, as also the Code of Corporate Disclosure Practices. The Code of Conduct for the Board of Directors and the senior management of the Company named as ‘Ground Rules & Code of Ethics’ was adopted by the Board at their meeting held on 28th April, 2008. The Company has in place an Information Security Policy that ensures proper utilisation of IT resources.

Board of Directors

The Board of Directors of the Company presently consists of Managing Director and 8 Non-Executive Directors.

The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships / Memberships held by them in other public companies is given below. Other directorships do not include alternate directorships, directorships of private limited companies, Section 25 companies and of companies incorporated outside India.

@ Appointed with effect from 11th April, 2017

* Resigned with effect from 26th April, 2017

$ Resigned with effect from 27th March, 2018

# Completed his term as on 13th August, 2018

** Resigned with effect from 16th August, 2018

5 Board Meetings were held during the year and the gap between two meetings did not exceed 120 days. The dates on which the Board Meetings were held are as follows:

April 26, 2017; July 19, 2017, August 23, 2017; October 25, 2017; and January 18, 2018.

None of the Non-Executive Directors have any material pecuniary relationship or transactions with the Company.

Remuneration of Directors

The remuneration paid or payable to the Directors for the year ended 31st March, 2018 is detailed below:

Note:-

i) Sitting fees include fees paid for the meetings of the Board of Directors, Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, CSR Committee and Independent Directors.

ii) No sitting fees was paid to Mr Leo Puri, Mr. James S. Riepe and Mr. Flemming Madsen.

Stakeholders Relationship Committee cum Share Allotment Committee:

A Stakeholders Relationship Committee cum Share Allotment Committee was constituted by the Board at their Meeting held on 22nd July, 2014. The terms of reference of the Committee are:

- To consider and resolve the grievances of security holders of the company

- To approve transfer of equity shares and other securities, if any, of the company

- Any other matter as may be assigned by the Board of Directors.

- To review the ESOP application data and approve the allotment of equity shares to the employees of UTIAMC who have exercised their

options in accordance with the terms and conditions as prescribed under ESOP Scheme 2007.

The composition is as under:

* Nominated with effect from 29th January, 2018 and completed his term as MD as on 13th August, 2018

@ Resigned as Director on 27th March, 2018

$ Nominated with effect from 5th April, 2018

General Body Meetings

a) Details of last three annual general meetings are given below:

One Special Resolution was passed at the Annual General Meeting held on 20th August, 2015 for approving the proposal for issue of “Preferential issue of equity shares” to M/s T Rowe Price International Ltd.

a) Extra Ordinary General Meeting

No Extra Ordinary General Meeting was held during the year. No special resolution was passed through postal ballot.

Disclosures

There were no instances of non-compliance on any matter related to the capital markets during the financial year 2017-18. Further reference is also invited to the following paragraphs of ‘Notes to Accounts’ which also form an integral part of this report.

a) Significant Accounting policies;

b) Share Capital, Reserves and Surplus and provisions;

c) Related party transactions;

d) Managerial Remuneration.

Means of Communication

UTI AMC recognizes communication as a key element of the overall corporate Governance framework and therefore emphasizes continues, efficient and relevant communication to all external constituents.

(V) Human Resources

UTI AMC Ltd. believes that the key to building an Organization is it’s Employees and nurturing people capability is the core of driving business excellence. As an Organization, we are committed to maintaining an environment that values their contributions and provides opportunities for personal and professional growth. UTI AMC ended the year with a workforce strength of 1240 Employees.

Each and every Employee is expected to work with all stakeholders viz. clients, other employees, distributors, investors etc. in a respectful manner. Each Employee is expected to strictly follow your Company’s Rules, Code of Conduct and any violation is appropriately addressed.

Your Company demonstrates a commitment to a culture that promotes the highest ethical standards. Employee Relations in the Organization continued to be healthy, cordial and progressive.

UTI AMC recognizes its responsibility and continues to strive to provide a safe working environment for its employees, free from sexual harassment and discrimination. Your Company also has a Policy on Prevention of Sexual Harassment which is reviewed by the Internal Complaints Committee (ICC) at regular intervals. There are no pending complaints and no fresh complaints have been received at the end of the year.

During the Financial Year 2017-18, some key focus areas and initiatives taken up were -

Promote Performance Culture and Reinforce Meritocracy -

We have a Performance Management System that is very transparent, objective and strength of our System. The Performance Management System aligns Organization goals with key objectives. Role based scorecards at the Employee level coupled with Managerial feedback provide clarity and support to help Employees excel. Development of our Employees, recognizing and rewarding their performance is of prime importance to us. The primary objective of our Performance Management System is to drive a high performance culture.

Promoting changed Mindsets

We need to change our mindset and our actions to enable us sustain and keep leading in the AMC industry which is very competitive.

HR Digitization

We are in the process of completing the adoption of our new HRMS System. This will help us be in line with the latest technology trends and have a platform that is more interactive, user friendly and one that integrates various HR functions and processes. This will enhance our ability to manage employees in a more flexible, agile and customized manner. In addition, we have also taken up an initiative that will impact our service delivery and payroll data quality.

Employee Engagement

We strive to strengthen our connect with Employees. We also conducted an employee survey to understand various aspects of their experience UTI AMC also conducts several employee engagement events, both at local and national levels. With the objective of encouraging an atmosphere of fun, camaraderie and to provide our Employees a platform to showcase their talent and creativity, participation activities around three broad themes - Social, Culture and Sports were organized.

Employee Recognition

During the Financial Year 2017-18, a recognition program - ‘Achievers Club’ has been recently developed to recognize and Excellence at UTI AMC and in turn create a ‘Culture of Appreciation’. There are Spot Rewards for immediate gratification and instant recognition. There are separate category of awards for the ‘Best Sales Team’ and ‘Best Fund Manager’. Reporting Managers can nominate their team members for ‘Employee of the Quarter’ award.

Learning & Development

An extensive bouquet of training programmes have been delivered covering on-boarding, functional and behavioural training. The on-boarding training ensures that new Employees are trained comprehensively and equipped with necessary know how required for the role. Functional training programs enable skill development, regular updates and build expertise. We focus on role specific learning plan and ensure effective use of blended learning methods.

Looking Ahead

We look forward to a stronger focus on meritocracy, change management, increase efficiencies and build and effective Organization. HR principles and policies will be further sharpened. We will retain, develop and continue to attract talent with requisite skills to help shape a better UTI AMC Ltd. and foster employee engagement, productivity and motivation.

(VI) Auditors

1) Statutory Auditors

M/s S. Bhandari & Co. Chartered Accountants will retire as Auditors of the Company at the conclusion of the Fifteenth Annual General Meeting. The Statutory Auditors of the Company would be appointed by the Comptroller and Auditor General of India in accordance with the provisions of the Companies Act, 2013.

2) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr Vishal N Manseta, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is enclosed as Annexure IV.

(VII) Acknowledgement

We acknowledge the valuable support, co-operation and guidance received from the Government of India, Securities and Exchange Board of India, Reserve Bank of India, sponsors of your Company and the Association of Mutual Funds in India. We are also thankful to our shareholders, investors of UTIMF schemes, Auditors, Custodians, Registrar and Transfer Agents, Banks, Distributors and all other service providers for their valued support. We would also like to thank the employees for their commitment, collaboration and partnership demonstrated by them during the year. Your Directors also wish to place on record their appreciation of the contribution made by business partners / associates at all levels.