The Members,
Haryana Financial Corporation Chandigarh
Report on the Financial Statements
We have audited the accompanying financial statements of Haryana Financial Corporation
(HFC), which comprise of the Balance Sheet as at 31st March,2023 and the Statement
of Profit and Loss and Cash Flow statement for the year then ended and notes to the
financial statements, including a summary of the significant accounting policies and other
explanatory information.
1. Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing. Our
responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Corporation in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with the ethical requirements that
are relevant to our audit of the financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
2. Managements responsibility for the Financial Statements
The Corporations Management is responsible for the preparation and presentation of
these Financial Statements that give a true and fair view of the financial position,
financial performance and the cash flows of the Corporation in accordance with the
accounting standards and principles generally accepted in India and as per the
requirements of Small Industries Development Bank of India. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the act for safeguarding the assets of the Corporation and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting
policies. making judgements and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that ware
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
3. Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with the Standards on Auditing issued by Institute
of Chartered Accountants of India and provisions of section 37 of the State Financial
Corporations Act 1951 as amended by SFCs (Amendment) Act 2000. Those Standards require
that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedure selected depend upon the
auditors judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial control relevant to the Corporations preparation of
the financial statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Corporation has in place an adequate internal
financial controls system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by management as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our Audit opinion on the financial statements. Our objectives are to
obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors
report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these
financial statements.
4. Emphasis of Matter
We draw attention to the Paragraph B of Schedule -Q (Notes on Accounts) in regard to
Contingent Liabilities as under :
a) Note no. B(l) regarding contingent liability in respect of units disposed off but in
dispute-amount indeterminate.
b) Note no. B (2) regarding Liability in respect of claim lodged against the
corporation by ex-employees/pensioners to the extent of RsA.42 crores (approx.) not
acknowledged and other court cases lappeals filed by the employees/ex-employees/pensioners
against which amount is indeterminate.
There is a Contingent liability amounting to RS.123.49 lacs in respect of claims lodged
by Loaneesl Auction purchasers. The Corporation is generally unable to reasonably estimate
possible loss for proceedings or disputes other than estimated.
Other Current Assets includes Rs.224.08 lacs deposited with Income Tax department
against demand for Financial years 1980-81 to 1982-83 and the corporation has filed
appeals (separately for each year) before Honble Punjab and Haryana high Court. The
matter is sub-judice, no provision against this amount has been made in the books of
account.
c) Note no. M of Schedule -Q (Notes on Accounts) which discloses that the corporation
has maintained Fixed Assets Purchase register, where all items of fixed assets are
entered. Further as the purchases are of meager amount, no separate physical verification
of fixed assets is being done by the corporation.
Our opinion is not modified in respect of these matter.
5. Information other than the Financial Statements and Auditors Report thereon
The Corporations Board of Directors and Management is responsible for the preparation
of the other information. The other information comprises the information included in the
Corporations Annual Report but does not include the financial statements and our
auditors r9}ort, thereon. Our opinion on the financial statements does not cover the
other information and we do not ~ form of assurance conclusion thereon. " fed ~
In connection with our audit of the financial statements, our responsibility is to read
the other information and in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained during the
course of our audit or otherwise appears to be materially misstated. If. based on the work
we have performed, we conclude that there is a material misstatement of this other
information, we are required to report the fact and we have nothing to report in this
regard.
6. Material Uncertainty Related to Going Concern
In preparing the financial statements, management is responsible for assessing the
Corporations ability to continue as a going concern, disclosing, as applicable. matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Corporation or to cease operations. or has no realistic
alternative but to do so. The Board of Directors are also responsible for overseeing the
corporations financial reporting process.
We draw attention to the Paragraph C of Schedule -Q (Notes on Accounts) which
discloses that the Corporation has recommended to the State Govt. for winding
up/liquidation uls 45 of SFCs Act, 1951. Further the State Govt. has appointed Managing
Director HSIIDC as Nodal Officer for completing the formalities of winding up. The Board
of Directors constituted a committee under the chairmanship of Director of Industries
& Commerce, Haryana for the winding up purpose and the committee is now reconstituted
under the Chairmanship of Managing Director, HSIIDC. Further the State Govt. has decided
to delist the shares of the Corporation from Bombay Stock Exchange (BSE) and request for
relaxation from detailed procedure of delisting of shares was made with SEBI. The SEBI has
granted relaxations from applicability of certain provisions of Delisting Regulations,2021
subject to fulfillment of certain conditions. The Board has further requested HSIIDC to
take further action for hiring of Merchant banker for deli sting of equity shares of HFC
from Bombay Stock Exchange (BSE) in accordance with the SEBI delisting guidelines.
These events, conditions and matters indicate that a material uncertainty exists that
may cast significant doubt on the Corporations ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
7. Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the Act
in the manner so required and give a true & fair view in conformity with the
accounting principles laid down by SIDBI for SFCs and generally accepted in India: a) In
the case of the Balance Sheet, of the state of affairs of the Corporation as at 31st
March, 2023. b) In the case of the Statement of Profit & Loss Account, of the Profit
of the Corporation for the year ended on that date, and c) In the case of the Cash Flow
Statement of the cash flows for the year ended on that date.
8. Report on Other Legal and Regulatory Requirements
On the basis of our audit subject to Notes on Accounts as contained in Schedule
"Q", we report that:
a) We have sought & obtained all the information and explanations which to the best
to our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts as required by law have been kept by the
Corporation so far as it appears from our examination of those books and proper returns
adequate for the purpose of our audit have been received from Branches.
c) The Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement
dealt with by this Report are in agreement with the books of accounts and with the returns
received from the Branches.
d) In our opinion the aforesaid Balance Sheet, Statement of Profit & Loss and Cash
Flow Statements comply with the Accounting Standards and guide lines issued by SIDBI for
SFCs from time to time.
e) The transactions of the Corporation that have come to our notice have been within
the powers of the Corporation.
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