Haryana Financial Corporation (**HFC**) is a state-level financial institution established under the **State Financial Corporations (SFCs) Act, 1951**. As a **Public Sector Company**, it is predominantly owned by the **Government of Haryana**, which holds a **97.28%** stake. Unlike standard Indian corporations, HFC does not operate under the **Companies Act, 2013**. Instead, its operations and legal existence are governed by the statutory framework of the **SFCs Act, 1951**. While the entity is listed on the **BSE Ltd**, the **SEBI (Listing Obligations and Disclosure Requirements) Regulations** apply only to a limited extent, often creating a regulatory gap between standard listing requirements and the Corporation’s statutory mandate. **Management Structure:** * **Board of Directors:** Management is vested in a Board constituted under **Section 10 of the SFCs Act**. This includes a **Managing Director** and a **Chairman** (Non-Executive) nominated by the State Government. * **Representation:** The Board includes nominees from the **Government of Haryana**, **SIDBI**, and various **Banks/Insurance Companies**. Two positions are reserved for **Elected Directors** representing public shareholders. * **Oversight:** The **Audit Committee** consists of **three Non-Executive Directors** (including **two Independent Directors**). Financial oversight regarding income recognition and asset classification follows **SIDBI guidelines**. * **Compliance:** All directors must provide a certificate of fidelity and secrecy under **Section 40 of the SFCs Act**. --- ### **Terminal Strategy: Winding Up and Asset Liquidation** The Corporation has transitioned from an active financial provider to a terminal entity. Having ceased fresh loan sanctions in **May 2010** due to an inability to compete with commercial banks, the Corporation has formally recommended its own **winding up/liquidation** to the State Government under **Section 45 of the SFCs Act**. **The Liquidation Framework:** * **Nodal Oversight:** The Managing Director of the **Haryana State Industrial Infrastructure Development Corporation (HSIIDC)** serves as the **Nodal Officer** to finalize winding-up formalities. * **Winding-up Committee:** Reconstituted on **February 11, 2022**, this committee includes the MD of HSIIDC, the Director of Industries & Commerce, and a nominee from the State Finance Department. * **Operational Status:** Current activities are limited to the settlement of outstanding obligations, recovery of bad debts, and management of existing assets. While the entity is winding down, its financial and salary systems remain **computerized**. --- ### **Delisting and Shareholder Exit Process** The Promoter (Government of Haryana) is actively pursuing the delisting of HFC’s equity shares from the **BSE Ltd**. This process is governed by **Regulation 42 of the SEBI (Delisting of Equity Shares) Regulations, 2021**. | Milestone | Status / Detail | | :--- | :--- | | **Regulatory Relief** | **SEBI** granted relaxation from detailed delisting procedures on **September 27, 2023**. | | **Execution Agency** | **M/s VC Corporate Advisor, Kolkata** has been appointed as the Merchant Banker. | | **Valuation** | A **Valuation Committee** (est. **February 16, 2024**) is finalizing share pricing and asset valuation. | | **Trading History** | There has been **no trading activity** in HFC shares for over **10 years**. | --- ### **Financial Performance and Solvency Profile** HFC has successfully transitioned to a **debt-free** status. It has repaid all refinance obligations to **SIDBI** and redeemed all due bond series. The current financial focus is on maximizing "Other Income" through asset monetization. **Comparative Financial Summary:** | Metric | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | | **Loan Sanctions/Disbursements** | **0** | **0** | | **Recoveries** | **Rs. 0.96 crore** | **Rs. 0.52 crore** | | **Other Income** | **Rs. 30.19 crore** | **Rs. 1.77 crore** | | **Net Profit / (Loss)** | **Rs. 25.30 crore** | **(Rs. 0.20 crore)** | | **Accumulated Losses** | **Rs. 59.60 crore** | **Rs. 85.32 crore** | **Key Financial Developments:** * **Real Estate Monetization:** The Corporation sold its **Corporate Building in Panchkula** to HSIIDC for **Rs. 27.51 crore**, generating a one-time profit of **Rs. 26.43 crore** in FY 2023-24. * **Rental Revenue:** Portions of the building are leased to the **Haryana Parivar Pehchan Authority (HPPA)** for **Rs. 15.08 lakh per month**. HFC is currently pursuing a recovery of **Rs. 68.06 lakh** in outstanding rent from HPPA. * **Dividend Settlement:** In **February 2026**, HFC paid **Rs. 5.17 crore** (totaling **Rs. 5.62 crore** including interest/adjustments) to the State Government to settle minimum guaranteed dividends for the period **1996-97 to 2000-01**. * **Capital Base:** As of September 2023, the **Paid-up Equity Share Capital** stands at **Rs. 207.66 crore**, supported by **Reserves and Surplus** of **Rs. 16.58 crore**. --- ### **Asset Quality and Geographic Footprint** The Corporation no longer maintains manufacturing units or extensive physical infrastructure. Its presence is concentrated in three administrative hubs: 1. **Head Office:** Chandigarh (Sector 17-C) 2. **Branch Offices:** Gurgaon and Panipat **Asset Management:** * **NPA Recovery:** Recovery is pursued through case-to-case settlements. **Rs. 42.00 lakh** was recovered from NPA cases in the most recent fiscal cycle. * **Valuation Policy:** General valuation of loan assets is no longer performed; however, **mortgaged assets** are valued individually at the time of sale or settlement. * **Audit Discrepancy:** Auditors noted an overstatement of **Other Current Assets** by **Rs. 13.71 lakh** due to accounting errors related to the **M/s S.K. Wood Products** case. --- ### **Risk Factors and Contingent Liabilities** Investors should note that HFC is no longer a **"Going Concern."** Auditors consistently include an **Emphasis of Matter** regarding the Corporation's liquidation status. **Legal and Tax Uncertainties:** | Category | Estimated Liability / Status | | :--- | :--- | | **Income Tax Disputes** | **Rs. 58.97 crore** (AY 2013-14 to 2015-16) under appeal; **Rs. 3.48 crore** already deposited against various demands. | | **Employee Claims** | **Rs. 13.57 crore** across **28 cases** involving pension and 6th Pay Commission arrears. | | **Sales Tax Demand** | **Rs. 60.01 lakh** for FY 2007-08; currently remanded to the Assessing Authority. | | **Litigation Deposits** | **Rs. 10.66 crore** held in sundry deposits for the **Balaji Enterprises** case (District Court, Rewari). | | **Earnest Money Disputes** | **Rs. 1.005 crore** held for **Devi Dayal Castings**; e-auction currently stayed by the **Supreme Court**. | **Operational Risks:** * **Regulatory Penalties:** The **BSE** has levied penalties for non-compliance with **Regulation 33 (Quarterly Results)**. HFC has contested these, citing its unique statutory status and ongoing liquidation. * **Staffing Shortages:** A freeze on hiring has led to a **paucity of staff**, hindering the Corporation’s ability to meet rigorous SEBI filing timelines. * **Asset Stagnation:** No deferred tax assets/liabilities are being created, and the value of primary securities for remaining loans has not been re-assessed, potentially masking further asset erosion.