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Gujarat State Financial Corporation.

BSE: 532160 Sector: Financials
BSE 00:00 | 03 Dec 7.20 -0.29






NSE 05:30 | 01 Jan Gujarat State Financial Corporation
OPEN 7.12
VOLUME 12195
52-Week high 10.42
52-Week low 1.44
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.12
CLOSE 7.49
VOLUME 12195
52-Week high 10.42
52-Week low 1.44
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat State Financial Corporation. (GUJSTATFIN) - Director Report

Company director report

To the Members

The Board of Directors is pleased to place before you the 61st Annual Reportof the Corporation along with the audited Balance Sheet as at March 31 2021 theStatement of Profit and Loss and the Cash Flow Statement for the year ended March 312021.

1. Economic Scenario:

Global economy: The COVID-19 pandemic has led to a severe global recession withdifferential impacts within and across countries. The contraction in 2020 was very suddenand deep compared to previous global crises even as the policy response in many countrieswas swift and sizable. Global output declined about three times as much as during theglobal financial crisis in half the time. The pandemic crisis also stands out for itsdifferential impacts across sectors and countries complex channels of transmission andhigh uncertainty about the recovery path given that it depends on the fate of the virusitself. World Economic Outlook April 2021 published by IMF indicated that global economicgrowth is projected to grow at six per cent in 2021 after an estimated contraction of 3.3per cent in 2020. The Global upturn was led by manufacturing with rising production acrossinvestment intermediate and consumer goods industries. Business services witnessedexpansion led by surging financial services sector whereas consumer service providerscontracted for the thirteenth successive month. There are concerns due to COVID-19 relatedfresh lockdowns and depressed demand in a few major economies.

Indian economy: The provisional estimates of annual national income 2020-21releasedby the National Statistical Office (NSO) on May 31 2021 estimated that Real GDP or GrossDomestic Product (GDP) at constant (2011-12) prices in the year 2020-21 is estimated toattain a level of Rs.135.13 lakh crore. The growth in GDP during 2020-21 is estimated toshrink by 7.3 per cent against 4 per cent growth reported in the previous year. Grossvalue added (GVA) grew 3.7 per cent in real terms in the March quarter showing asequential pick up. For the full financial year GVA fell 6.2 per cent slightly betterthan the earlier assessment of 6.5 per cent contraction. The average CPI inflation in FY2020-21 recorded an uptick to 6.2 per cent from 4.8 per cent in FY 2019- 20. The averageWPI inflation eased to 1.2 per cent in FY 2020-21 from 1.7 per cent in FY 2019-20. Themeasures taken by the Government to contain spread of the Covid-19 pandemic have had animpact on the economic activities. The indicators such as improvement in capacityutilization in manufacturing turnover of business for the firms in the servicesparticularly in the IT services and infrastructure sectors bank credit and GST revenuedid point to V shaped economic recovery. However the revival of economic activities wasaffected at the fag-end of the year with the advent of second wave of Covid-19 which poseda downside risk to economic activity in the first quarter of FY 2021-22. However thereare reasons to expect a muted economic impact as compared to the first wave. With theprediction of a normal monsoon food-grain production is expected to be in comfortablezone. It is expected that the Indian economy is poised to build back better and strongerby strong revival in investment growth and a massive boost to infrastructure and capitalexpenditure.

2. Financial results:

The COVID-19 pandemic has impacted the performance of the Corporation adverselyparticularly due to lockdown for the first two months of the year and restricted mobility.During the year under reference interest income earned by the Corporation declinedsharply and stood at Rs.0.43 crore as against Rs.2.13 crore reported in the previous year.Due to downward trend in rates of interest interest on deposits earned for the year underreference also reduced marginally to Rs.10.54 crore compared to Rs.11.03 crore earned ayear ago. Write back of NPA provision no longer required almost halved during the yearunder reference to Rs.2.84 crore as against Rs.5.97 crore wrote back in the previous year.Other income including diminution in the value of investments written back stood atRs.0.63 crore compared to Rs.0.31 crore reported in the previous year. Total income of theCorporation declined by 25.71 per cent to Rs.14.43 crore during the year under referencecompared to Rs.19.43 crore reported in the previous year.

Interest on borrowings for the year under reference increased marginally to Rs.131.89crore as against Rs.129.99 crore in the previous year. Premium of Rs.64.05 lakh paid tocover increased ceiling limit on gratuity liability inflated employees cost to Rs.3.19crore during the year under reference compared to Rs.2.99 crore reported in the previousyear. Other expenses decreased by 29.04% and stood at Rs.1.94 crore as against Rs.2.73crore registered in the last year. Total expenditure for the year under report remainedalmost flat at Rs.137.35 crore as against Rs.136.87 crore reported a year ago. Loss forthe year under reference increased to Rs.122.92 crore compared to Rs.117.44 croreregistered in the previous year. The accumulated loss of Rs.2927.65 crore as on March 312021 was carried forward to Balance Sheet. Keeping in view the loss incurred by theCorporation no dividend is recommended for the year under reference.

3. Borrowings:

During the year under report Corporation's borrowings from Government of Gujaratremained static at Rs.661.68 crore. No external borrowing has been resorted to by theCorporation during the year.

4. Recovery:

Corporation is engaged in recovery of dues for the last two decades disbanding sanctionand disbursement owing to its inability to obtain concessional finance and other relatedconstraints. On account of uncertainties arising from Covid-19 pandemic which has resultedinto lockdown and restricted movement recovery operation was impacted adversely. Evenafter continuing liberal One Time Settlement Schemes recovery performance was dismal andCorporation recovered an amount of Rs.3.53 crore during the year under reference asagainst Rs.7.95 crore recovered in the previous year.

5. Human Resource:

During the year under report the staff strength of the Corporation reduced to 38 from42 reported in the previous year. The break-up of staff strength is as under:-

Sr. No. Category Total
1 ‘A' Grade officers 3
2 ‘B' Grade employees 29
3 ‘C' Grade employees 6
Total 38

Of the total staff strength of 38 two employees are on loan service and 13 are ondeputation with other Government departments. The effective staff strength of theCorporation thus stood at 23 spread over three Regional Offices and Head Office.

6. Corporate Governance:

The Corporation has been ensuring transparency fairness and accountability in all itsdealings. The detailed Corporate Governance Report and the certificate regardingcompliance of corporate governance are forming part of the Annual Report.

Management Discussion and Analysis Report and declaration by Managing Director that theBoard of Directors and Senior Management Personnel have complied with the Code of Conductalso form part of Annual Report.

7. Auditors:

M/s. Priyam M Shah & Associates Chartered Accountants (FRN/Mem. No. 118421W) werere-appointed for the third term as the statutory auditors of the Corporation to holdoffice from the conclusion of 60th Annual General Meeting till the conclusionof ensuing Annual General Meeting by the members at the AGM held on 25thSeptember 2020 pursuant to 37 (1) of SFCs Act 1951. An auditor can be continued for fouryears subject to the condition that the appointment shall be made on yearly basis afterobtaining confirmation of eligibility and suitability from RBI. M/s. Priyam R Shah &Associates Chartered Accountants are completing three years of statutory audit onconclusion of ensuing Annual General Meeting. They being eligible for re-appointment andReserve Bank of India confirmed their eligibility and suitability of re-appointmentproposal to re-appoint the said auditors for the fourth and last term as recommended bythe Board is being placed before the shareholders at the ensuing Annual General Meetingfor consideration.

The statutory auditors have submitted Independent Auditor's Report on the financialstatements of the Corporation for the year ended 31st March 2021 whichcontains qualifications. Qualifications and the comments thereon are given in Addendum tothis Report and also form part of the Annual Report.

8. Board of Directors:

During the year under reference Government in Finance Department vide office orderdated 6th October 2020 nominated Smt. Ankita R Christian Financial Advisor(I&M) as a Director on the Board of Directors of the Corporation in place of ShriKamleshbhai K Patel. Pursuant to SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 brief resume of Director joined the Board of Directors during the yearunder report is furnished in the Corporate Governance Report forming part of the AnnualReport.

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 2021 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 2021 has been preparedon a going concern 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 2021; and

6. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively during theyear ended 31st March 2021.

10. Acknowledgement:

The Board of Directors expresses its deep sense of gratitude to Government of IndiaMinistry of Finance Department of Financial Services Government of Gujarat and itsvarious departments Small Industries Development Bank of India Mumbai and Ahmedabadoffices Reserve Bank of India SEBI and BSE Ltd. The Board also places on record itsappreciation to the commendable services rendered by Shri Kamleshbhai K Patel as Directoras well as Member of Audit Committee and Chairman of Stakeholders Relationship Committee.

The Board also thanks the stakeholders valued customers and well-wishers for theirgoodwill patronage and support. Finally the Board places on record its appreciation forthe dedicated services rendered by the staff at all levels.

For and on behalf of the Board of Directors
Place : Gandhinagar (Rahul Gupta IAS)
Date : 30-06-2021 Managing Director