Notes to Accounts of Haryana Financial Corporation

Mar 31, 2015

1. Contingent liabilities

2. Liability in respect of units disposed off but in dispute - amount indeterminate.

3. The contingent liabilities in respect of claims lodged against the Corporation by ex-employees/pensbners and other claims (20 cases) are to the extent of Rs.8.90 crore (approx.) not acknowledged. In addition to above there are 13 court cases/appeals filed by the employees/ex-employees against which amount is indeterminate.

4. Sale Tax assessments for the financial years 2004-05,2005-06, 2006-07 & 2007-08 have been completed by the Assessing Authority, Panchkula & Sales TaxA/AT liability for these financial years has been assessed at Rs. 124.41 lakh. As the Corporation has filed appeals with higher authority the above liability of Rs.124.41 lakh has not been provided in the accounts against these orders. There is no pending demand in Sales Tax/VAT for the subsequent years.

5. SIDBI vide their lettter dated 10.01.2011 approved one time settlement of outstanding refinance amount of Rs.181.68 crore at Rs.130 crore with no further interest (outstanding and future) to be paid withir three years. The Corporation has paid the entire OTS amount of Rs. 130.00 crore to SIDBI. The last installmen of Rs.10.33crore was paid during the current financial year. The Corporation also paid a sum of Rs.5,12,255/- to SIDBI towards interest on the defaulted amount for the defaulted period as per OTS. The Corporation ha; taken the principal waiver Refinance amount Rs.51.68 crore during the current financial year as its income.

6. The Corporation appointed IFCI Ltd. to study the pros, and cons, of merger/winding up of the Corporation The report of the financial consultant was deliberated by the Board of Directors of the Corporation (BoD) in it; meeting held on 10.07.2012. BoD/HFC decided to complete the process of sale of properties owned by the Corporation/settlement of liabilities by 31.03.15 and deploy the surplus staff to other departments. The Corporatioi has disposed off its two properties (Faridabad and Delhi) during the current financial year and income has been recognized as Profit on Sale of Assets of Rs. 9.06 crore. There is outstanding advance of Rs. 37.24 crore from HSIIDC as on 31.03.2015 against other properties at Panchkula (Residential flats and Corporate building). All the liabilities towards borrowings of the Corporation have been settled during the current financial year. The Corporatioi has also initiated steps for the deployment of surplus staff and got 22 employees deployed in Haryane Government / Haryana Government Undertaking through Surplus Staff Cell of Haryana. Due to the abov< facts, the Corporation has not created a provision of Deferred Tax liability.

7. No amount towards deferred tax asset is outstanding in the books of accounts of the Corporation. The Corporatioi has not sanctioned any advance since 2010. In such circumstances it is not feasible to create any deferred ta liability for the current financial year.

8. Subvention amounting to Rs.7,17,53,106/- is receivable from State Govt, for payment of the minimur guaranteed dividend for the financial years 1996-97 to 2000-01 (upto 05.09.2000) against the guarantee givei by the State Govt, under Section 6 read with Section 35 of the State Financial Corporations Act, 1951 for whic claim has been lodged with the State Govt. Against above,the Corporation has since paid Rs. 1,65,56,484/- to th retail investors/others from its own sources, the said amount has been shown under the head - Dividend Pai (adjustable against subvention to be received from State Govt.) in Schedule 'K' - Other Current Assets'. The State Govt.guarantee has been withdrawn w.e.f. 06.09.2000 as per SFCs ( Amendment ) Act, 2000 and thereafter no dividend has been provided / declared.

9. The value of primary and collateral securities of all the Loans and Advances as on the date of Balanc sheet is not re-assessed. However, adequate provision against non-performing assets (NPAs) has been mad in the books of accounts as on 31.03.2015 as per the provisioning norms of SIDBI.

10. The Corporation had advanced loans (prior to 01.04.2001) in the name of various equipment supplier to lessees for purchase of Leasing Equipments. In some of the cases, the lessees have not submitted bills an other documents against purchase of these equipments. The entire outstanding amount of Rs. 5,71,48,124/ of Loans for Leasing Equipment (advance) and Rs. 2,74,73,338/- of Vehicle Sub Leasing has been prudential written off during the year.

11. 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 to the extent of Rs. 3.94 crore upto 31.03.2015 against which the Corporation has already made provision of Rs. 4.18 crore upto 31.03.2014. Therefore, provision of Rs. 0.24 crore has been written back during the year which has been shown in Schedule 'E' - Provisions.

12. depreciated on Capital Recovery Method.The leased assets financed by the Corporation belong to the period prior to 01 04.2001, hence the equipment leasing has not been classified as Loans and Advances as per the Accounting Standard (AS-19) because it is applicable only on the leasing activities done after 01.04.2001.

13. The State Govt, has appointed Corporation as agent for disbursement of its various subsidies, seed money and agency loans. Unutilized amount against various subsidies has been shown under the sub head "(b)(1) State Govt. Funds (As an Agency)" of Schedule 'D' - Other Current Liabilities. Liabilities towards State Govt, against Agency & Seed Money Loans have been shown against '(b)(2)' under the said sub head.The balance of Agency and Seed Money loans has been shown in Schedule 'K' - Other Current Assets. The amount of interest accrued in these loans is credited to respective interest account under Other Liabilities and debited to relevant loan account as the amount so received from the borrowers on this account is payable to the State Government.

14. Sundry Deposits under Schedule 'D' - Other Current Liabilities include a sum of Rs.1095 lakh being the sale price in case of M/s Surendera Enterprises Pvt. Ltd., Rewari, a joint financing case with Haryana State Industrial and Infrastructure Development Corporation Ltd. ( HSIIDC ). A new loan account of Rs. 821.25 lakh in the name of auction purchaser namely M/s Balaji Enterprises under the head Loan & Advances was opened after receipt of Rs. 273.75 lakh i.e. 25% of the sale amount. Being joint financing case, the sale proceeds are yet to be shared between HFC and HSIIDC on pro-rata.

15. Claim Recoverable under Schedule 'K' - Other Assets includes a sum of Rs. 38,09,712/- ( Rupees thirty eight lakh nine thousand seven hundred twelve only ) recoverable in case of M/s S.K. Wood Products, Yamunanagar. 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 23.08.2007. Later on Auction Purchasers filed writ petition in the Hon'ble Punjab & 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 with the directions to the Corporation to refund the amount alongwith interest. Accordingly the Corporation refunded a sum of Rs. 38,01,285/- 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 and received Rs. 14.00 lakh upto 30.04.2015.

16. Disclosure requirements under the RBI guidelines dated 7th July, 1999 on forward rate agreements under Interest Rate Swaps NIL

17. Figures have been rounded off to the nearest rupee and wherever necessary figures for the previous year hav* been rearranged/regrouped in order to make it in conformity with current year's figures.

18. Schedules 'A' to 'S' form integral part of the Balance Sheet and Profit & Loss Account.

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Mar 31, 2013

A. 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 and other claims (13 cases) are to the extent of Rs.5.31 crore (approx.) not acknowledged. In addition to above, there are 18 court cases/appeals filed by the emp!oyees/ex-employees against which amount is indeterminate.

3 As per MoU signed by the Corporation with SIDBI on 25th March 2004 and renewed on 7th August, 2009, certain benefits,relief and concessions were provided by SIDBI to the Corporation which as per terms of the MoU can ipso-facto be withdrawn at the sole discretion of SIDBI in the event of non-compliance of terms and conditions of this MoU. There shall be a liability of Rs.1384 35 lakh upto 31.05.2010, if the reliefs/concessions so given by the SIDBI are withdrawn. Further in view of One-time Settlement of outstanding refinance by SIDBI as discussed in note C belov., tie provision of accrued interest we.f. 01.06.2010 onwards has not been made during the current financiai year.

4 A demand of Rs.1.39 crore (approx.) (after adjusting the refund of Rs. 1.10 crore against assessment year 2005-06 and Rs. 0.20 crore against assessment year 2011-12 ) has been raised by the Income Tax Department for the FY 1981 - 82 and 1982 - 83 on account of excess amount refunded by Income Tax D ,d: '' , -nt in the earlier years against which appeals are pending with ITAT.

5 Sale Tax assessments for the financiai years 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09 has been completed by the Assessing Authority, Panchkula & Sales TaxA/AT liability for these financial years has been assessed at Rs. 125.45 lakh. As the Corporation has filed appeals with higher authority so the above liability of Rs. 125.45 lakh has not been provided in the accounts against these orders.

B. SIDBI vide their lettter dated 10.01.2011 has approved one time settlement of outstanding refh™nce amount of 181.68 crore at Rs. 130 crore with no further interest (outstanding and future) to be paid within three years subject to the condition that in the event of default(s) in the payment of OTS dues, SIDBI shall have right to reverse the waiver of dues as envisaged under OTS and restore the original liability. Keeping in view the above OTS, no provision of accrued interest we.f 01 06.2010 onwards has been made during the current financial year. The effect of principal waiver of Rs.51.68 crore has accordingly been not given in the books of accounts and the same shall be given in the year of final payment as per OTS. Against the total OTS amount of Rs. 130.00 crore, the Corporation has paid Rs. 86.67 crore upto 31.03.13 being the 2/3rd of the total OTS amount. There is a State Government Guarantee against refinance of Rs. 105.00 crore in favour of SIDBI which is outstanding as on date as the same shall be extinguished when the entire payment of SIDBI is squared.

C. The Corporation appointed IFCI Ltd. to study the pros, and cons, of merger/winding up of the Corporation. The report of the financial consultant was deliberated by the Board of Directors of the Corporation in its meeting held on 10.07.2012 and decided to complete the process of sale of properties owned by the Corporation / settlement of liabilities by 31.03.2015 and deploy the surplus staff to other departments. The Board of Directors of the Corporation as well State Govt., Haryana has approved transfer of three properties of the Corporation to HSIIDC for Rs.46.45 crore ( against which Corporation has received Rs. 17.00 crore as token money upto 31.03.2013). The Corporation has also initiated steps for the deployment of surplus staff and got seven class IV employees deployed in Haryana Govt, through Surplus Staff Cell of Haryana.

D. Subvention amounting to Rs. 7,17,53,106/- is receivable from State Govt, for payment of the minimum guaranteed dividend for the period of financial years 1996-97 to 2000-01 (upto 05.09.2000) against the guarantee given by the State Govt, under Section 6 read with Section 35 of the State Financial Corporations Act, 1951 for which claim has been lodged with the State Govt.. Against above.the Corporation has since paid Rs. 1,65,56,484/- to the retail investors/others from its own sources. The said amount has been shown under the head - Dividend Paid (adjustable against subvention to be received from State Govt.) in ''Schedule ''K'' - Other Assets''. The State Govt, guarantee has been withdrawn w.e.f. 06.09.2000 as per SFCs (Amendment) Act, 2000 and thereafter no dividend has been provided / declared.

E. The value of primary and collateral securities of all the Loans and Advances as on the date of Balance sheet is not re-assessed. However, adequate provision against non-performing assets (NPAs) has been made in the books of accounts as on 31.03.2013 as per the provisioning norms of SIDBI.

F. The Corporation advanced loans in the name of various equipment suppliers to lessees for purchase of Leasing Equipments. In some of the cases, the lessees have not submitted bills and other documents against purchase of these equipments. A sum of Rs. 5,71,48,124/- is still outstanding in this regard as on 31.03.2013 which has been shown under the head " Loans for Leasing Equipments (Advance)" in Schedule - ''I'' - ''Loans and Advances''. The Corporation has already initiated necessary action for recovery of this amount.

G. As per guidelines issued by SIDBI, provision towards diminution in the value of investments of Rs.2.94 crore in respect of listed shares and 71.31 crore in respect of unlisted shares, totalling to 74.25 crore is required to be made upto 31.03.2013 against which the Corporation has already made provision of 74.41 crore upto 31.03.2012. Therefore, provision of 70.16 crore has been written back during the yearwhich has been shown in Schedule ''F'' - Provisions.

H. Amount of 7 3,37,92,102/- shown as Building - Office under Schedule''J''- Fixed Assets includes 768,06,312/- paid and 730,88,000/- to be paid by the Corporation against allotment of 4 suites in HUDCO Place, Andrews Ganj, New Delhi by Government of Haryana. The Board of Directors of the Corporation in its meeting held on 22.12.2011 has decided to transfer these suits to HSIIDC along with Corporate office building at Plot No. 6, Sector 6, Panchkula and 59 Flats at Housing Board Complex, Sector 14, Panchkula. The Corporation has received 7 17.00 crore as token money against these properties. The possession of thesesuits has been handed over to HSIIDC.

I. The Leasing Assets under Schedule ''J'' - Fixed Assets, have been depreciated on Capital Recovery Method.The leased assets financed by the Corporation belong to the period prior to 01.04.2001, hence the equipment leasing has not been classified as Loans and Advances as per the Accounting Standard (AS-19) because it is applicable only on the leasing activities done after 01.04.2001.

J. The State Govt, has appointed Corporation as agent for disbursement of its various subsidies, seed money and agency loans. Unutilized amount against various subsidies has been shown under the sub head "(b)(1) State Govt. Funds (As An Agency)" of Schedule ''E'' - Other Liabilities. Liabilities towards State Govt. against Agency & Seed Money Loans have been shown against ''(b)(2)'' under the said sub head.The balance of Agency and seed Money loans have been shown in Schedule ''K'' - Other Assets. The amount of interest accrued in these loans is credited to respective interest account under Other Liabilities and debited to relevant loan account as the amount so received from the borrowers on this account is payable to the State Government.

K. Sundry Deposits include a sum of 71095 Lakh being the sale price in case of M/s Surindera Enterprises Pvt. Ltd., Rewari, a joint financing case with Haryana State Industrial and Infrastructure Development Corporation Ltd.(HSIIDC). A new account for the same amount in the name of Auction purchaser namely M/s Balaji Enterprises under the head Loan & Advances has been opened. The auction purchaser has deposited 25% i.e. 7 273.75 lakh of the bid amount. As per the practice, the entire sale proceeds are credited into the original borrowers account after receipt of 25% of the sale amount and execution of agreement to sell. As per direction of the Hon''ble Supreme Court in this case, sale of unit was subject to final adjudication of pending writ petition in Hon''ble Punjab & Haryana High Court. As the petition pending in the Hon''ble Punjab & Harayan High Court was nor finalized till 31.03.2013,the sale amount of 71095 lakh has been shown under the head Sundry Deposits'' account. The sale proceed is to be shared between HFC and HSIIDC.

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Mar 31, 2012

1. Contingent liabilities

i) Liability in respect of units disposed off but in dispute - amount indeterminate.

ii) The contingent liabilities in respect of claims lodged against the Corporation by ex-employees/pensioners and other claims ( 16 cases ) are to the extent of Rs.5.53 crore (approx.) not acknowledged In addition to above there are 25 court cases/appeals filed by the employees/ex-employees against which amount is indeterminate.

(iii) As per Moll signed by the Corporation with SIDBI on 25th March 2004 and renewed on 7th August, 2009, certain benefits, relief and concessions were provided by SIDBI, to the Corporation which as per terms of the MoU can ipso-facto be withdrawn at the sole discretion of SIDBI in the event of non-compliance of terms and conditions of this MoU. There shall be a liability of Rs. 1384.35 lacs upto 31.05.2010, if the reliefs/concessions so given by the SIDBI are withdrawn. Further in view of One-time Settlement of outstanding refinance by SIDBI as discussed in note 3 below, the provision of accrued interest w.e.f. 01.06.2010 onwards has not been made during the current financial year.

(iv) A demand of Rs.1 59 crore (approx.) (after adjusting the refund of Rs. 1.10 crore against assessment year 2005- 06) has been raised by the income Tax Department for the AYs 1981- 82 and 1982- 83 on account of excess amount refunded by income tax department in the earlier years against which appeals are pending with ITAT.

(v) Sale Tax assessments for the financial years 2004-05, 2005-06, 2006-07 & 2007-08 has been completed by the Assessing Authority, Panchkula & sales tax/VAT liability for these financial years has been assessed atRs.119.41 lacs. As the Corporation has filed appeals with higher authority so the above liability ofRs.119.41 lacs has not been provided in the accounts against these orders.

(vi) Gratuity to staff is covered under the Group Gratuity Scheme of Life Insurance Corporation of India. The Board of Directors in its meeting held on 22.12.2011 has approved the enhancement of gratuity limit payable to staff ( w.e.f. 01-04-09 ) from 3.50 lakh to Rs. 10.00 lakh. However, provision for shortfall on account of enhanced gratuity limit amounting to Rs.3.11 crore as per actuarial valuation of Life Insurance Corporation of India (LIC) has not been provided in the books of account, as the same is yet to be approved by State Government.

2. SIDBI vide their lettter dated 10.01.2011 has approved one time settlement of outstanding refinance amount of Rs.181.68 crore at Rs. 130 crore with no further interest ( outstanding and future ) to be paid within three years subject to the condition that in the event of default(s) in the payment of OTS dues, SIDBI shall have right to reverse the waiver of dues as envisaged under OTS and restore the original liability, including the State Government Gaurantee. Keeping in view the above OTS, no provision of accrued interest w.e.f. 01.06.2010 onwards has been made during the current financial year. The effect of principal waiver (Rs.51.68 crore) has not been given in the books of account and the effect of waiver shall be made in the year of final payment as per OTS, as the waiver is linked with the payment of OTS amount to be paid within a period of three years. Against the total OTS amount of Rs. 130 crore, the Corporation has paid Rs. 43.33 crore upto 31.03.12 being the 1/3rd of the total OTS amount. During the Financial year 2012-13 the Corporation has also paid Rs.5.00 crore to SIDBI.

3. The report of the financial consultant namely IFCI Ltd. appointed by the Corporation to study the pros, and cons, of merger/winding up of the Corporation has been received. After considering the report of the financial consultant , the Board of Directors of the Corporation in its meeting held on 10 - 07 - 2012 has decided to complete the process of sale of properties/settlement of liabilities by 31- 03 - 2015. The Board of directors of the Corporation as well State Govt., Haryana have approved transfer of three properties of the Corporation to HSIIDC for Rs. 46.45 crore and disposal of other properties of the Corporation through open auction. The Corporation has requested the respective agencies ( HUDA/Housing Board etc.) for necessary permission for transfer / sale of properties. The steps in this direction are being taken by the Corporation.

4. Subvention amounting to Rs. 7,17,53,106 is receivable from State Govt, for payment of the minimum guaranteed dividend for the period of financial years 1996-97 to 2000-01 (upto 05.09.2000) against the guarantee given by the State Govt, under Section 6 read with Section 35 of the State Financial Corporations Act, 1951 for which claim has been lodged with the State Govt.. Against above, the Corporation has since paid Rs. 1,65,56,484 to the retail investors/others from its own sources. The said amount has been shown under the head - Dividend Paid (adjustable against subvention to be received from State Govt.) in ‘Schedule ‘K'' - Other Assets''. The State Govt, guarantee has been withdrawn w.e.f. 06.09.2000 as per SFCs (Amendment) Act, 2000 and thereafter no dividend has been provided / declared.

5. The value of primary and collateral securities of all the Loans and Advances as on the date of Balance sheet is not re-assessed. However, adequate provision against non-performing assets (NPAs) has been made in the books of accounts as on 31.03.2012 as per the provisioning norms of SIDBI.

6. The Corporation advanced loans in the name of various equipment suppliers to lessees for purchase of Leasing Equipments. In some of the cases, the lessees have not submitted bills and other documents against purchase of these equipments. A sum of Rs. 5,71,48,124/- is still outstanding in this regard as on 31.03.2012 which has been shown under the head “ Loans for Leasing Equipments (Advance)'''' in Schedule - T - ‘Loans and Advances''. The Corporation has already initiated necessary action for recovery of this amount.

Corporation has made additional provision of Rs.0.01 crore against standard assets and has written back excess provision ofRs. 1.59 crore against Non-performing loan assets during the Year.

Provision on Leasing Portfolio has been provided at 100 percent of the portfolio. No additional provision has been made during the year, as the provision of Rs.13.96 crore has already been provided upto 31.03.11.

7. As per guidelines issued by SIDBI, provision towards diminution in the value of investments of Rs.3.10 crore in respect of listed shares and Rs.1.31 crore in respect of unlisted shares, totalling toRs.4.41 crore is required to be made upto 31.03.2012 against which the Corporation has already made provision of Rs.4.43 crore upto 31.03.2011. Therefore, provision of Rs.0.02 crore has been written back during the year which has been shown in Schedule ‘F'' - Provisions.

8. Amount of Rs.3,74,17,846/- shown as Building-Office under Schedule ‘ J ''- Fixed Assets includes Rs.68,06,312/- paid andRs.30,88,000/- to be paid by the Corporation against allotment of 4 suites in HUDCO Place, Andrews Ganj, New Delhi. Though the physical possession of the same is with Corporation, but title documents in this regard are yet to be executed in favour of the Corporation.

9. The Leasing Assets under Schedule ''J'' - Fixed Assets, have been depreciated on Capital Recovery Method. The leased assets financed by the Corporation belong to the period prior to 01.04.2001, hence the equipment leasing has not been classified as Loans and Advances as per the Accounting Standard (AS-19) because it is applicable only on the leasing activities done after 01.04.2001.

10. The State Govt, has appointed Corporation as agent for disbursement of its various subsidies, seed money and agency loans. Unutilized amount against various subsidies has been shown under the sub head “(b)(1) State Govt. Funds (As An Agency)" of Schedule ''E'' - Other Liabilities. Liabilities towards State Govt, against Agency & Seed Money Loans have been shown against ''(b)(2)'' under the said sub head.The balance of Agency and seed Money loans have been shown in Schedule ‘K'' - Other Assets. The amount of interest accrued in these loans is credited to respective interest account under Other Liabilities and debited to relevant loan account as the amount so received from the borrowers on this account is payable to the State Govt. These are outstanding since long and are subject to confirmation by the State Government.

11. During the year the Corporation has received State Government guarantee in respect of SLR Bonds already issued (61st series to 67th series). As on 31.03.2012 a sum of Rs. 15.00 crore is outstanding against 65th to 67th series of SLR Bonds.

12. During the financial year 2007-08, the Corporation created deferred tax assets amounting to Rs. 33.50 crore on the basis of timing difference in depreciation and long term capital loss and a part of above amount was set off against the profits earned during the year 2008-2009. During financial year 2010-11, the Corporation decided to stop fresh operational activities and a financial consultant was also appointed to study the pros, and cons, of merger/ winding up of the Corporation. The Comptroller & Auditor of General of India (CAG) in its Separate Audit Report (SAR) for the financial year 2010-11 observed that deferred tax assets were overstated and accumulated losses were understood by Rs. 30.80 crore. The Corporation while giving the comments on the above report, agreed to reverse the entries of deferred tax assets after the final decision on winding up/merger of the Corporation is taken by the Corporation / State Government Keeping in view the above facts the outstanding amount of deferred tax assets ofRs.30.80 crore has been reversed by debiting the profit and loss account during the year.

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Mar 31, 2010

1. Contingent liabilities

i) Liability in respect of units disposed off but in dispute - amount indeterminate.

ii) Claims lodged against the Corporation by ex-employees/pensioners and other claims not acknowledged as debts - amount indeterminate.

iii) State Govt, guarantee in respect of 58th to 67th series of SLR Bonds issued by Corporation during the period from 27.06.2000 to 24.03.2003, is awaited. As on 31.03.2010 amount of Rs. 40.85 crore is outstanding against these bonds. The guarantee fee is leviable in respect of 62nd to 67th Series of SLR Bonds issued by the Corporation against which Rs. 26.85 crores is outstanding as on 31.03.2010.The Corporation has already made request to the State Government to waive off the guarantee fee on the guarantee to be provided against these bonds. The liability, if the State Government declines the request of the Corporation for waiver of guarantee fee against these bonds will be to the tune of Rs. 53.70 lacs.

(iv) As per MoU signed by the Corporation with SIDBI on 25th day of March 2004 and renewed on 7th day of August, 2009, certain benefits, relief and concessions were provided by SIDBI, to the Corporation which as per terms of the MoU can ipso-facto be withdrawn at the sole discretion of SIDBI in the event of non-compliance of terms and conditions of this MoU. There shall be a liability of Rs. 1355.04 lacs upto 31.03.2010, if the reliefs/ concessions so given by the SIDBI are withdrawn.

(v) There will be a liability of Rs. 4.62 crore (approx.), in case the Corporation approves the revision of payscale of its employees on the basis of the report of 6th pay commission.

(vi) A demand of Rs. 8.35 crore (approx.) was raised by the Income Tax Department on account of penalty for the AY 2005 - 06. The Corporation filed an appeal before ITAT and the same has been decided in favour of the Corporation. However an amount of Rs. 1.00 crore has been deposited in view of order of ITAT and kept in Claims Recoverable account.

(vii) A demand of Rs. 2.69 crore (approx.) has been raised by the Income Tax Department for the AYs1980-81, 1981- 82 and 1982- 83 on account of excess amount refunded by Income Tax department in the earlier years against which appeals have been filed with CIT(A), the appeals are yet to be fixed by CIT(A).

(viii) Sale Tax assessments for the financial years 2004-05, 2005-06 & 2006-07 has been completed by the Assessing Authority, Panchkula & sales taxA/AT liability for these financial years has been assessed at Rs. 64.40 lacs. As the Corporation has filed appeals with higher authority so the above liability of Rs. 64.40 lacs has not been provided in the accounts against these orders.

2. Subvention amounting to Rs. 7,17,53,106 is receivable from State Govt, for payment of the minimum guaranteed dividend for the period of financial years 1996-97 to 2000-01 (upto 05.09.2000) against the guarantee given by the State Govt, under Section 6 read with Section 35 of the State Financial Corporations Act, 1951 for which claim has been lodged with the State Govt.. Against above, the Corporation has since paid Rs. 1,65,56,484 to the retail investors/others from its own sources. The said amount has been shown under the head - Dividend Paid (adjustable against subvention to be received from State Govt.) in Schedule K - Other Assets. The State Govt, guarantee has been withdrawn w.e.f. 06.09.2000 as per SFCs (Amendment) Act, 2000 and thereafter no dividend has been provided / declared.

3. The loans were fully secured at the time of disbursement. The diminution in value of securities, as on the date of balance sheet is indeterminate. The impact of any dilution in the value of security is taken into account at the time of sale of such securities.

4. The Corporation advanced loans in the name of various equipment suppliers to lessees for purchase of Leasing Equipments. In some of the cases, the lessees have not submitted bills and other documents against purchase of these equipments. A sum of Rs. 5,71,48,124/- is still outstanding in this regard as on 31.03.2010 which has been shown under the head " Loans for Leasing Equipments (Advance)" in Schedule - I - Loans and Advances. The Corporation has already initiated necessary action for recovery of this amount.

5. As per guidelines issued by SIDBI, provision towards diminution in the value of investments of Rs.3.38 crore in respect of listed shares and Rs. 1.47 crore in respect of unlisted shares, totalling to Rs. 4.85 crore is required to be made upto 31.03.2010 against which the Corporation has already made provision of Rs. 5.17 crore upto 31.03.2009. Therefore, excess provision of Rs. 0.32 crore has been written back during the year which has been shown in Schedule F - Provisions.

6. i) The Corporation had purchased 59 flats of various categories at Housing Board Complex, Sector 14, Panchkula and made the full and final payment. During the current financial year, Conveyance Deed of all flats stand executed and registered.

ii) Amount of Rs. 4,47,50,956/- shown as Building-Office under Schedule J- Fixed Assets includes Rs. 68,06,312/- paid and Rs. 30,88,000/- to be paid by the Corporation against allotment of 4 suites in HUDCO Place, Andrews Ganj, New Delhi. Though the physical possession of the same is with Corporation, but title documents in this regard is yet to be executed in favour of the Corporation.

iii) A sum of Rs. 10,47,938 as Advance for purchase of plot shown in Schedule K-Other Assets is the amount paid to HSIIDC for purchase of plot at Manesar, Gurgaon. The allotment of the plot was made by HSIIDC but the same was not accepted by the Corporation and it was requested to give some other plot inplace of said plot which is not suitable to the corporation. The matter is under consideration with HSIIDC.

7 The Leasing Assets under Schedule J - Fixed Assets, have been depreciated on Capital Recovery Method. The leased assets financed by the Corporation belongs to the period prior to 01.04.2001, hence the equipment leasing has not been classified as Loans and Advances as per the Accounting Standard (AS-19) because it is applicable only on the leasing activities done after 01.04.2001.

8. The State Govt, has appointed Corporation as agent for disbursement of its various subsidies and seed money and agency loans. Unutilized amount against various subsidies has been shown under the sub head "(b)(1) State Govt. Funds (as an Agency)" of Schedule E - Other Liabilities. Liabilities towards State Govt, against Agency & Saed Money Loans have been shown against (b)(2) under the said sub head.The balance of Agency and seed Money loans have been shown in Schedule K - Other Assets. The amount of interest accrued in these loans is credited to respective interest account under Other Liabilities and debited to relevant loan account as the amount so received from the borrowers on this account is payable to the State Govt. These are outstanding since long and are subject to confirmation by the State Government.

9. During the current financial year, the Corporation has operating loss to the tune of Rs. 15.06 crore. Due to said loss the amount of Deferred Tax Asset may increase from Rs. 30.80 crore in the previous year to Rs. 36 crore during the current year but the same has not been provided in the books of accounts for the current financial year as the Corporation does not foresee any profits in the coming financial years due to precarious financial position.

10. Share Capital

During the year, the Corporation received a sum of Rs. 144.80 lacs in two instalments from the State Govt. towards increase in the share Capital Account. Against the first installment of Rs. 90.50 lacs (received in September, 2009), 9,05,000 shares of Rs. 10/- each (face value) have been allotted to the State Government. The second installment of Rs. 54.30 lacs received on 31.03.2010 has been kept under Share Application Money (pending allotment).

During the year 2007-08 and 2008-09, the Corporation made an investment of Rs. 145.00 crore by purchasing shares of Haryana Power Generation Corporation Ltd. (HPGCL). These funds were provided by the State Government towards share capital of the Corporation for further investment in the Share Capital of HPGCL.

11. Figures have been rounded off to the nearest rupee and wherever necessary figures for the previous year have been rearranged/regrouped in order to make it in conformity with current years figures.

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Mar 31, 2000

1. The outstanding balances in loan accounts as on 31.3.2000 are subject to confirmation.

2. Memorandum loan accounts on mercantile basis are continued to be maintained for the Management Information System.

3. Income Tax Assessments have been completed upto the Assessment year 1999-2000. The Corporation has filed appeals against the additions made in various assessment orders with the competent appellate authorities. No provision has been made in the Profit & Loss account for additional tax demanded. It shall be accounted for in the year in which the issue is finally decided. There is no undisputed amount of income tax payable.

4. Wealth Tax & Interest Tax returns have been filed upto the assessment year 2000-2001 and Sales Tax return has been filed for the financial year 1999-2000. A demand of Rs. 18,936/- of sales tax and Rs. 11,33,810/- of interest tax has been paid and an appeal has been preferred with higher authorities. There is no undisputed amount of interest tax, wealth tax and sales tax payable.

5. Minimum guaranteed dividend for the year amounting to Rs. 194.22 lacs has been provided for in the books. As per regulation 67 of General Regulations, Corporation is required to pay dividend only from the date on which shares become fully paid. As such dividend has been provided only on those shares which are fully paid as on 31.3.2000.

6. Since sufficient profits are not available as per SFCs Act 1951 for payment of dividend for the financial year 1999- 2000, the same has to be paid against subvention to be received from State Government. As such corporation is not liable to pay dividend tax for this financial year. The matter of subvention is under consideration of the State Government and till date no amount has been received by the Corporation.

7. Balance in the banks include the amount of Short Term Deposits of Rs. 26.47 crores.

8. Rs. 4,49,186/- in State Bank of India current account remained unreconciled.

9. Loans were fully secured at the time of disbursements. The decrease in value of securities as on the date of balance sheet is not ascertainable, however, where the securities have been disposed off by the Corporation, such loans amounting to Rs. 16.30 crores including Rs. 1.04 crores being other uncovered assets have been classified as loss assets. All the loans have been classified as per new health code definition.

10. A sum of Rs.1,53,58,344/- recovered by official Liquidator was taken towards recovery being share of the Corporation during the year 1992-93 by crediting to respective borrowers accounts, to the extent of amount outstanding towards principal loan and misc. expenses. Out of this, Rs. 1,32,94,642/- is yet to be received.

11. The share certificates for Rs. 1253.81 lacs of capital issued to State Govt, partly by conversion of loans in lieu of share capital and interest and dividend payable shall be issued after the receipt of the notification by the state Government under sections 4 & 6 of the SFCs Act, 1951.

12. Rs. 5,961/- being the dividend which remained unclaimed and relates prior to 31.03.1995 has been transferred to General Reserve Account.

13. The Corporation floated 56th services of SLR bonds to the extent of Rs.3600 lacs during the year 1998-1999. The State Govt, guarantee against these bonds has not been received as yet.

14. Investments are valued at cost. However, as per RBI guidelines the listed shares valued at current market rate show a diminution to the extent of Rs.545.06 lacs and unlisted shares show a diminution to the extent of Rs.272.27 lacs. Investment being long term, the diminution in value of shares has not been charged to profit and loss account.

15 Figures have been rounded off to the nearest rupee and wherever necessary figures for the previous year have been rearranged /regrouped in order to make it in conformity with current years figures.

16. Schedules A to S form an integral part of the Balance Sheet.