1. Contingent liabilities
i) Liability in respect of units disposed off but in dispute - amount
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terms of the MoU can ipso-facto be withdrawn at the sole discretion of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the reliefs/concessions so given by the SIDBI are withdrawn.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
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
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