b) Contingent liabilities
1. Liability in respect of units disposed off but in dispute - amount
indeterminate.
2. The contingent liabilities in respect of claims lodged against the
Corporation by ex-employees/pensioners (28 cases) are to the extent of Rs. 1357.22
lakh (approx.) not acknowledged. In addition to above there are 16 court
cases/appeals filed by the employees/ex-employees/pensioners against which
amount is indeterminate.
Further, there is contingent liability amounting to Rs. 89.32 lakh in respect
of claims lodged by Loanees/Auction purchasers. The corporation is generally
unable to reasonably estimate possible loss for proceedings or disputes other than
estimated, including where parties have not claimed an amount of damages. There
is uncertainty as to the outcome of pending appeals or legal cases pending at any
stage.
A sum of Rs.224.08 lakh Shown in Other Assets Schedule ‘J’ - Other Current
Assets’ deposited with Income Tax Department against demand for Financial Years
1980-81 to 1982-83 and the Corporation has filed appeals before Hon’ble High Court
against the orders of Income Tax department. Since the matter is sub-juice, no
provision against this amount has been provided in the books of accounts.
The Income Tax Department has raised demand of Rs. 58.97 crore u/s
271 (1 )(c) and 147 r.w.s.144 in respect of assessment year 2013-14, 2014-15 and
2015-16. The Corporation has filed appeals against these demands and the same
are pending with CIT(A)/ITAT. The Corporation has deposited a sum of Rs.40.00
lakh and Income Tax department adjusted Income Tax refund of Rs.85,74,740/- of
FY 2021-22 and FY 2022-23 against the above demand during the financial year
2023-24.
3. The sale tax assessment for the financial year 2007-08 was also completed
and an additional demand of Rs.60.01 lakh was raised. The Corporation filed
appeal before the Court of Jt. ETC(A), Ambala against the above demand. The case
was remanded back to Assessing Authority, Panchkula for fresh decision vide orders
dt. 19.03.2013 of appellate authority. The fresh decision of sale tax department is
still awaited. The Sale Tax number was surrendered on 05.12.2014 and the sale tax
returns were filed till FY 2014-15 and no assessment is pending.
c) The Corporation has recommended to the State Government for its winding up/
liquidation u/s 45 of SFCs Act 1951 and the winding up process of the Corporation has been
initiated by the State Govt, vide Memo No.49/30/2016-1 IB-I dt.21.08.2018. The State Govt,
has appointed Managing Director HSIIDC as Nodal Officer for completing the formalities of
winding up.
The Board of Directors of the Corporation in its meeting held on 22.07.2019 had
constituted a Committee under the chairmanship of the Director of Industries a Commerce,
Haryana to give its recommendations regarding steps/ modalities regarding winding up of
the Corporation considering legal/ financial aspect and to give detailed modalities/ steps
for liquidating all the assets (including loan assets) and liabilities (including court cases) of
the Corporation. A total of three meetings of the Committee were held on 17.09.2019,
26.09.2019 a 14.10.2019.
The Board of Directors of the Corporation in its meeting held on 11.02.2022
reconstituted the Committee for winding up as under :
1. Managing Director, HSIIDC Chairman
2. Director of I&C Haryana Member
3. Nominee from Finance Deptt., Haryana Member
First meeting of Winding up Committee was held on 16.12.2022 at 12.30 P.M. in the
Office of MD, HSIIDC, Sector- 6, Panchkula under the Chairmanship of MD, HSIIDC.
The State Govt., Haryana (being Promoter) has decided to delist the shares of the
Corporation from BSE. In furtherance to that, a request for relaxation from detailed
procedure of delisting pursuant to Regulation 42 of SEBI (Delisting of Equity Shares)
Regulations, 2021 has been filed by Industries Deptt., Haryana with SEBI vide Letter dated
11.02.2022 which has been accepted by SEBI vide letter dt.27.09.2023 subject to
fulfillment of certain conditions.
In furtherance to the decision of the Board in its 359th Meeting held on 16.02.2024;
HSIIDC has appointed M/s VC Corporate Advisor, Kolkata, as Merchant Banker for the
purpose of delisting of shares of Haryana Financial Corporation from BSE Ltd. as per the
direction of the SEBI.
Further, the Board of Directors in its 359th meeting held on 16.02.2024 resolved to
constitute a Committee of Directors comprising of Smt. Radhika Singh, Joint Secy/Finance,
Shri Piyush Bhargava, GM/SIDBI, Shri M.K. Chopra and Managing Directors/HFC for finalizing
the modalities for determination of the price of shares as well as the valuation of the
Assets of the Corporation. Corporation has appointed Merchant Banker for delisting of the
shares of the Corporation. As advised by Merchant Banker, a tender has been floated by
HSUDC to appoint Registered Valuer for valuation of HFC shares.
d) No amount towards deferred tax asset/liability is outstanding in the books of
accounts of the Corporation. The Corporation has stopped fresh sanctions since May, 2010
and is under winding up. In such circumstances it is not feasible to create any deferred tax
asset/liability for the current financial year.
e) The value of primary and collateral securities of all the Loan & Advances as on the
date of the balance sheet is not re-assessed. However, adequate provision against non¬
performing assets (NPAs) has been made in the books of accounts as on 31.03.2025 as per
the provisioning norms of SIDBI.
f) Loans and Advances are categorized on the basis of guidelines received from SIDBI
as Standard, Sub-Standard, Doubtful and Loss Assets and provisioning has been made as
under:-
Provisioning of Rs.6.28 lakh has been made against Non-performing/Loss loan assets during
the year and shown in Schedule ‘D’- Provisions.
g) As per guidelines issued by SIDBI, provision towards diminution in the value of
investments in respect of listed & Un-listed shares is required to be made which is to the
extent of Rs.421.81 lakh upto 31.03.2025 against which the Corporation has already made
provision of Rs.423.17 lakh upto 31.03.2024 and a provision of Rs.1.36 lakh has been
written back during the year as shown in Schedule ‘D’- Provisions. An investment is
classified as Held to Maturity, available for sale or Held for trading at the time of its
purchase but no such classification was done earlier in respect of investment.
h) The State Government has appointed Corporation as agent for disbursement of its
various subsidies, seed money and agency loans. Unutilized amount of Rs.23.28 lakh
against various subsidies and balance amount of Seed Money Agency/RIS amounting to
Rs.87.31 lakh has been shown under the sub head “(b) (1) & (2) State Govt. Funds (As an
Agency)” of Schedule ‘C’ - Other Current Liabilities.
i) Sundry Deposits under Schedule ‘C’ - Other Current Liabilities amounting to
Rs. 1122.50 lakh includes a sum of Rs. 1066.10 lakh in case of M/s Surendra Enterprises Pvt.
Ltd., Rewari a joint financing case with Haryana State Industrial and Infrastructure
Development Corporation Ltd. (HSIIDC). The unit was auctioned for Rs.1095 lakh on
14.06.2012 to M/s Balaji Enterprises (AP) on deferred payment basis. Out of sale amount of
Rs.1095 lakh, down payment of Rs.273.75 lakh i.e. 25% received from auction purchaser
(AP) and a new loan account of Rs.821.25 lakh (75% of auction price) in the name of the AP
under the head Loans and Advances was opened. The AP paid a sum of Rs.678.20 lakh
(including interest and down payment) to the Corporation and defaulted in further
repayment. Corporation repossessed the unit and decided to forfeit the above amount.
Against the above action of the Corporation, the AP filed a suit against the Corporation in
the Court of Civil Judge (JD), Rewari. The AP also raised the issue of shortage of land area.
The suit of the AP was dismissed vide orders dt.04.07.2018. Now as per orders
dt.18.08.2021 of Hon’ble Supreme Court of India, the case titled Balaji Enterprises V/s HFC
has been restored to its original number in Distt. Court Rewari and is pending. Keeping in
view the above circumstances, the proper accounting entries are yet to be passed and
amount is still kept in Sundry Deposit A/c. Further, out of Rs.1095 lakh, a sum of Rs.28.90
lakh was paid to HSIIDC being a joint financing case and the balance amount of Rs.1066.10
lakh is kept in sundry.
j) Earnest Money amounting to Rs.1,00,50,000/- shown under Schedule ‘C’ - Other
Current Liabilities is the amount of earnest money received against e-auction of primary
security held on 14.11.2019 in case of M/s Devi Dayal Castings Pvt. Ltd., Gurgaon. Principal
and Misc. expenses outstanding in this case have been prudentially written off in financial
year 2014-15 with retaining the Recovery rights. The borrower filed a contempt petition in
the Hon ble Supreme Court and also a stay application against e-auction. Vide orders
dt. 13.12.2019, the Hon’ble Supreme Court of India directed the Corporation not to take any
coercive steps and hence the auction could not be finalized. Now the Hon’ble Supreme
Court of India has dismissed the contempt petition vide order dt.07.04.2025. Further,
action in pursuance to orders of Hon’ble Supreme Court of India is being taken.
During the last financial year the Corporation had auctioned its building at Karnal
for Rs.297 lakh. The auction purchaser had deposited 25% of auctioned amount i.e. Rs.74
lakh and the same was kept in earnest money account. Now, the balance 75% of payment
of Rs.222 lakh is received during the current financial year. The relevant entries have been
passed during the current financial year. The transaction has resulted in profit on sale of
assets amounting to Rs.290.97 lakh. A tax of Rs.64.00 lakh (advance tax TDS) has been
deposited by the Corporation which is shown in Schedule ‘J’ - Other Current Assets.
The Corporation had also sold collateral security in c/o of M/s Panj Rattan Food,
Sirsa for Rs.33 lakh during the last financial year and 25% of auctioned amount i.e Rs.8 lakh
was kept in earnest money account. Full payment against sale of property has been
received and sale deed has been executed during the current financial year. The relevant
accounting entries have been passed by crediting Bad Debts Recovered account, Misc.
Expenses account and Interest Income account by debiting Earnest Money account.
k) Borrowers’ Imprest amounting to Rs. 10,42,950/- shown under Schedule ‘C’ - Other
Current Liabilities is the amount received from the parties at the time adjustment of loan
account for payment of pending bills (legal fee, security charges etc.) to be submitted by
the respective agencies. The balance excess amount, if any after the adjustment of above
expenses is refunded to the parties.
0 Claims Recoverable under Schedule ‘J’- Other Current Assets amounting to
Rs.40,64,093/-, includes a sum of Rs.22,09,712/- recoverable in case of M/s S.K.Wood
Products, Yamuna Nagar. In this case the collateral security was sold to Sh.S.K.Saini and
Sh. Robin Saini (auction purchasers) for Rs.24.30 lakh on 23.08.07 and credited to the loan
account of the loanee. Later on Auction Purchasers filed writ petition in the Hon’ble
Punjab a Haryana High Court, Chandigarh seeking relief that the property purchased by
them had no access and the Corporation may provide the access to the auctioned land or
refund the amount. The case was decided by Hon’ble Punjab a Haryana High Court,
Chandigarh and the Hon’ble Court directed the Corporation to refund the amount along
with interest. Accordingly the Corporation refunded a sum of Rs.38,01,285/- including
interest to the auction purchaser by debiting Claim Recoverable Account as the loan
account of loanee M/s S.K.Wood Products has already been adjusted.
The Corporation again auctioned the above property at a price of Rs.56.00 lakh.
The auction purchaser deposited an amount of Rs. 16.00 lakh and failed to deposit the
remaining amount. The received amount of Rs. 16.00 lakh was forfeited and credited to
claims recoverable account. % Auction purchaser filed a case against the Corporation which
was decided in favour of auction purchaser. An appeal was filed against the above orders
before the higher Court and same has been decided on 10.08.2023 in favour of the
Corporation. Now the recoverable amount in the above case is Rs.22,09,712/- including
Rs.8,427/- debited subsequently towards expenses. File has been put up for taking legal
opinion from the advocate to proceed further. ,
m) The Corporation is maintaining Fixed Assets Purchase register where all items of
fixed assets are entered with date, amount of purchase and its location. Mostly the fixed
asset item is purchased on the request of the particular division/branch and after the
purchase of the item, the same is under the control of that particular division/branch. As
the purchases are of meager amount, no separate physical verification is being done by the
Corporation.
n) Advance Against Expenses under Schedule ‘J’- Other Current Assets includes a sum
of Rs.0.54 lakh given for purchase of Stamp Paper by Panipat branch office in July 2015 for
executing sale deed. However, sale deed could not be executed on these stamp papers.
The Corporation has started action for recovering the above amount.
Further, Security Deposits under Schedule ‘J’- Other Current Assets includes a sum
of Rs.0.30 lakh pertaining to telegram services etc. The Corporation is finding the details
to recover the amount.
o) The Corporate building of the Corporation at Panchkula was leased out to UHBVN,
Panchkula in the financial year 2008-09. UHBVN, Panchkula shifted to its own premises and
vacated the office building in the month of October, 2022. The Corporation leased out the
Conference Room at First Floor, and complete 2nd and 3rd Floor of the said building to
Haryana Parivar Pehchan Authority, Panchkula (HPPA) at a monthly rent of Rs. 15,08,792/-
plus GST extra w.e.f. December, 2022. The Corporation issued demand of the rent from
December, 2022 to December, 2023 amounting to Rs.2,31,44,873/- (Rs.1,96,14,296/- plus
Rs.35,30,577/- as GST shown under the head Rent and GST due but not received in
Schedule ‘J’- Other Current Assets) from HPPA, Panchkula. HPPA, Panchkula remitted a
sum of Rs.1,63,38,757/- to HFC as rent including GST of Rs.24,92,253/- on 11.12.2024.
Corporation is pursuing HPPA for payment of balance rent of Rs.68,06,116/- including GST.
Balance receivable rent is shown in the books of accounts as ‘Rent Due but not received’.
The Corporation has already deposited GST amounting to Rs.35,30,577/- with the GST
Authorities as it was a statutory liability of the Corporation and would have attracted
penalty from the GST Authorities.
•
p) The Board of Directors of the Corporation, in the year 2011 decided to transfer the
Corporate Building to Haryana State Industrial Infrastructure Development Corporation
(HSIIDC) at a price of Rs 2750.88 Lakh This decision has been duly approved by the State
Government vide letter dated 13/05/2013.
The corporation has handed over physical possession of the property i.e Land &
Building to HSIIDC on 03.01.2024 after receipt of full amount and sale of Land & Building
has been accounted for in last year. However, Sale deed is yet to be executed for the
same.
q) As per the books and records of the Corporation, the Paid-up Share Capital of the
State Govt, to the Corporation is Rs.202,01,16,500/-i.e Rs.202.01 crores, whereas the Share
Capital by the State Govt, as per Finance accounts is mentioned as Rs.204.22 crores,
resulting difference of Rs.2.21 crores. The Corporation has requested to provide year-wise
details of investments by the State Govt, as no investment has been made by the State
Govt, after 2014, however the same is subject to reconciliation.
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