To the Members
Your Directors have pleasure in submitting their Annual Report together with theAudited Financial Statements for the year ended on 31st March 2017.
Before going into the performance highlights of the Corporation economic scenario ofthe country in brief is taken stock of as under :-
1. Economy Scenario:
India has emerged as the fastest growing major economy in the world as per the CentralStatistics Organization (CSO) and International Monetary Fund (IMF). The improvement inIndias economic fundamentals has accelerated in the year 2015 with the combinedimpact of strong Government reforms Reserve Bank of Indias inflation focussupported by benign global commodity prices. Interest rates are in the decline owing tounder-control inflation decrease in crude oil prices weak credit growth and majorGovernment reforms like focus on areas like e-governance ease of doing business labourreforms fuel price de-control the Make in India movement etc. IndiasGross Domestic Product (GDP) grew 7.2 per cent during 2014-15 7.9 per cent during 2015-16and 7.1 per cent during 2016-17. Against the backdrop of robust macro-economic stabilitythe year was marked by two major domestic policy developments the passage ofConstitutional amendment paving the way for implementing the transformational Goods andServices Tax (GST) and the action to demonetization of high denomination bank notes of '1000 and ' 500 with effect from November 8 2016 in order to eliminate black money and thegrowing menace of fake Indian currency notes thereby creating opportunities forimprovement in economic growth. Demonetization is expected to have a positive impact onthe Indian economy which will help foster a clean and digitized economy in the long run.The GST will create a common Indian market improve tax compliance and governance andboost investment and growth.
According to the research note by Morgan Stanley growth is likely to inflect higheraccelerating by almost one percentage point over the next three quarters. It also expectsgrowth to pick up from the second quarter of FY 2017-18 and accelerate by almost a fullpercentage point to 7.9 per cent by December 2017 from the current run rate of seven percent.
2. Financial Performance :
During the year under report Corporation concentrated on recovery of dues only as inthe previous years. Recovery process was affected badly due to recent developments in thecountry. Interest income earned by the Corporation for the year under report reducedsubstantially and stood at ' 3.18 crore as against ' 11.67 crore reported a year ago.Interest earned on deposits stood at ' 9.04 crore compared to ' 9.16 crore in the previousyear. Other income including provisions written back against NPA diminution in value ofinvestment etc. stood at ' 5.85 crore during the year 2016-17 as against ' 14.66 crore inthe previous year. Total income of the year under report stood at ' 18.07 croreregistering a decline of 49.08% over ' 35.49 crore reported in the previous year.Corporations total expenditure for the year under report reduced by ' 5.23 crore andstood at ' 135.25 crore as against ' 140.48 crore reported in the previous year. The lossof Corporation for the year under report stood at ' 117.18 crore as against ' 104.99 crorein the corresponding period of last year. In view of mounting loss your Directors refrainfrom declaring dividend for the year under report.
3. Borrowings :
Corporation owes its borrowings to Government of Gujarat and during the year underreport no borrowing was resorted to. Corporations borrowings remained static at '661.68 crore for the year under reference.
4. Recovery :
Corporation has discontinued main activities of sanction and disbursement since lastone and half decades. With the passage of time almost all good loan accounts have beenclosed or settled. Recovery from left out units is a herculean task. Recognizing thedifficulties Corporation revitalized its machinery for concentrating on sticky loanaccounts. As a step in this direction various One Time Settlement schemes for differenttypes of loans were in force in the year under reference. However the efforts could notyield desired results. Recovery of dues for the year under reference declined sharply andstood at ' 7.02 crore as against ' 16.86 crore reported in the previous year.
5. Human Resource :
The staff strength of the Corporation stood 61 on the last day of the year under reportas against 66 in the previous year. The break up staff strength is as under
|Sr. No. ||Category ||Total |
|1 ||A Grade officers ||7 |
|2 ||B Grade employees ||45 |
|3 ||C Grade employees ||9 |
| ||Total ||61 |
Out of 61 staff two employees are loan service and 19 employees are on deputation withother Government departments. The staff available at the disposal of the Corporationtherefore stood at 40 spread over three Regional Offices and Head Office.
6. Corporate Governance :
The Corporation has in place the SEBI regulations pertaining to Corporate Governancesubject to exemptions available under the said Regulations. Management Discussion andAnalysis Report Corporate Governance Report Certificate regarding compliance ofconditions of Corporate Governance and declaration by Managing Director that the Board ofDirectors and Senior Management Personnel have complied with the Code of Conduct areannexed hereto and form part of this Report. The details of various Committees and theirfunctions form part of the Corporate Governance Report.
7. Auditors :
M/s. Manubhai & Shah LLP Auditors of the Corporation have submitted theirIndependent Auditors Report on the financial statements of the Corporation for theyear ended 31st March 2017. The Report contains qualifications which along withmanagements views are given in Addendum forming part of the Annual Report.
The said Auditors were appointed for the last three years. Pursuant to Section 37 ofthe State Financial Corporations Act 1951 and in terms of confirmation ofeligibility of Auditors by Reserve Bank of India they are eligible for re-appointment fora further term of one year. On the recommendation of the Audit Committee the Board ofDirectors recommends their re-appointment.
8. Board of Directors :
During the year under reference Shri PK Taneja IAS the then Additional ChiefSecretary to Government Industries & Mines Department joined the Board of yourCorporation as Managing Director on 18th October 2016 relieving Shri Arvind Agarwal IASof the additional charge. On his appointment as Chairman by SIDBI Mumbai vide letterdated
5.12.2016 Shri PK Taneja IAS continued as Chairman & Managing Director since
5.12.2016. SIDBI Mumbai vide letter dated 25.7.2016 nominated Shri Pramod KumarVijayvargia Deputy General Manager SIDBI Ahmedabad as Director on the Board of theCorporation in place of Shri Ajit Nath Jha. Pursuant to SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 brief resume of the Directors joined duringthe year under reference is furnished in the Corporate Governance Report attached to thisReport.
The Board places on record its appreciation for the valuable guidance support andcounsel received from Shri Arvind Agarwal IAS and Shri Ajit Nath Jha during deliberationsof the Board.
As a subsequent development Government of Gujarat in General Administration Departmentvide order dated 29th April 2017 ordered that Industries Commissioner Gandhinagar shallalso function as Ex-Officio Managing Director of the Corporation. Accordingly Smt. MamtaVerma IAS Industries Commissioner and a Director on the Board of the Corporation assumedthe charge of the post of Managing Director on 16th May 2017. Brief resume of theManaging Director has already been included as a part of Corporate Governance Report forthe financial year 2015-16.
9. Directors Responsibility Statement :
The Directors based on the representations received from the Operations Departmentsand to the best of their knowledge and ability hereby confirm that :
1. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Corporation at the end of the financial year ended 31stMarch 2017 and of the profit and loss of the Corporation for that period;
3. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the regulatory provisions for safeguarding theassets of the Corporation and for preventing and detecting fraud and other irregularities;
4. the annual accounts for the year ended 31st March 2017 has been prepared on a goingconcern basis
5. they have laid down internal financial controls to be followed by the Corporationand that such internal financial controls are adequate and were operating effectivelyduring the year ended 31st March 2017; and
6. Proper systems have been devised to ensure compliance with the provisions allapplicable laws and that such systems were adequate and operating effectively during theyear ended 31st March 2017.
10. Acknowledgement :
Your Directors express their sincere thanks and appreciation to the Government ofGujarat for its continuous support and guidance. The Board also places on record itsgrateful appreciation to the co-operation received from Industries & Mines DepartmentFinance Department RBI SIDBI Mumbai and Ahmedabad offices commercial banks and variousother agencies. Your Directors thank the stakeholders and customers for their continuedsupport. The Board also takes this opportunity to appreciate the dedication and commitmentof all employees.
| ||For and on behalf of the Board of Directors |
|Place : Gandhinagar ||(Mamta Verma ias) |
|Date : 26-05-2017 ||Managing Director |