Haryana Fin. Co. Management Discussions

i) Term Lending Institution

You are aware that the Haryana Financial Corporation was established under the State Financial Corporations Act, 1951 as a State level development financial institution to provide financial assistance to the industrial units and for other activities as per section 25 of the SFCs Act, 1951 relating thereto to the small scalesectors set up in the State of Haryana in the year 1967. ii) Risks, Threats and Concerns

Risk means uncertainties about events and their outcomes that could have a material impact on the performance and projections of the Corporation. The risk is inherent in every business. We have already informed to the shareholders in the previous report that with the reforms of the financial sector, the traditional area have been entered into by new entrants i.e. Banks and Non- Banking Financial Companies ( NBFCs) who have access to cheap source of funds. Accordingly, the Corporation was facing stiff competition from NBFCs and Banks. In view of the above, the Corporation could not withstand the competition from these institutions due to operational limitations and accordingly stopped fresh business/ sanction of the loans since May, 2010.

It was already informed to the shareholders in the previous Annual General Meetings that the proposal for liquidation/winding up of the Corporation has been forwarded to the State Govt. and the State Govt. has appointed MD, HSIIDC as the Nodal Officer for commencing and completing the liquidation proceedings.

In addition to above, there are a number of suit filed cases (pension, arrears of 6th pay commission to staff and other staff/borrowers cases) pending in the courts which will also affect its profitability. iii) Corporations Performance

You are aware that the Corporations main thrust is now recovery of its loans especially the bad debts. The Corporation introduced new One Time Settlement Schemes during the year to effect recovery from NPAs. The schemes were valid upto 31.03.2022. During the year a sum of Rs. 0.77 lakh has been recovered. iv) Opportunities/Resources

You are aware that the Corporation has since repaid entire outstanding refinance under settlement to SIDBI. As already informed the Corporation has also repaid all the bonds series due from time to time. So, there is no outstanding loans against the Corporation or say debt free Corporation. There is no interest liability in this regard.

The Corporation has a number of NPA cases. There are opportunities that some of them may come under settlement scheme which tantamounts to recovery for the Corporation. v) Internal Control System

The Corporation is under winding up process. Therefore, due to paucity of staff, the internal audit is limited to only certain payments above specified amount. vi) Human Resources

With the retirement of the staff, the staff strength has been reduced from 24 as on 31.03.2021 to 19 as on 31.03.2022. The Corporation is making its efforts to reduce the administrative burden and at the same time motivate the existing staff and get support from them to discharge their responsibilities.

Certain statements made in the “Management Discussion and Analysis Report” might be considered forward looking. These statements are subject to certain risks and actual result may differ.