UTI-I's FY04 audit delayed

The statutory audit of the Special Undertaking of the Unit Trust of India ( SUUTI), referred to as UTI-I, for 2003-04 has been delayed by more than a year leading to concerns expressed by the finance ministry.

According to a official source, the delay has been mainly on account of reconciliation problem of residual accounts such as staff welfare fund of erstwhile UTI and unclaimed amount of unitholders.

In response to a query sent by Business standard, SUUTI officials clarified, "The statutory audit for 2003-04 has since been completed and will be placed before the board of advisors in the first week of September 2005.

The response also said unclaimed amount comprising unclaimed redemption proceeds and unclaimed dividend works out to less than Rs 500 crore as on April 1, 2004 .

The said unclaimed amount is being treated as liabilities in the balance-sheet. Staff welfare fund, which belongs to SUUTI, is valued at Rs 161 crore in July 2005.

Explaining unclaimed deposits, the response stated that whenever a cheque / warrant is issued for payment of dividend / redemption in favour of a unit-holder but not encashed by him, the same is termed as unclaimed.

Another matter that raises concern is the government's assistance to meet the shortfall arising out of the old monthly income plans for 2003-04.

In response to a query as to how the government's assistance has been estimated in absence of an audit , SUUTI replied that the basis of government assistance in respect of old monthly income plans was estimated as the difference between the committed assured repurchase and the actual market value of the assets (NAV) at the time of maturity of the said schemes.

Further the faxed reply also clarified that valuation and shortfall were audited by external chartered accountants at the time of maturity.

Pursuant to the Unit Trust of India Act 2002, UTI was bifurcated from February 1,2003 into two distinct entities - The specified undertaking of Unit Trust of India and UTI Mutual fund. All assured return schemes have been transferred and vested with SUUTI.