To the Members,
The Board of Directors is pleased to place before you the 63rd Annual Report
of the Corporation containing audited Balance Sheet as at March 31, 2023, Statement of
Profit and Loss, Cash Flow Statement and other financial statements for the year ended
March 31, 2023.
1. Economic Scenario:
Global Economy: Global economic activity remained resilient in the year under
reference amidst the persistence of inflation at elevated levels, turmoil in the banking
system in some advanced economies, tight financial conditions and lingering geopolitical
hostilities. In its April 2023 update of the World Economic Outlook (WEO), the IMF has
attempted to clear the path of uncertainty. It has projected global growth to decline from
3.4 per cent in 2022 to 2.8 per cent in 2023. The slowing of global growth, accompanied by
pressures from deglobalisation and supply chain disruptions, has also moderated global
trade. Weakening external demand, spillovers from the banking crisis in some advanced
economies, volatile capital flows and debt distress in certain vulnerable economies weigh
on growth prospects.
Domestic Economy: FY23 has been strong for Indias economy despite the tailwind of
the pandemic and the headwind of the geo-political conflict intertwining to escalate
global economic uncertainty. The Second Advance Estimates (SAE) released by the National
Statistical Office on February 28, 2023 placed Indias real Gross Domestic Product (GDP)
growth at 7.00 per cent in 2022-23 which indicates the resilience of the Indian economy.
However, the downside risks such as rising crude oil prices, adverse weather conditions
and the global banking crisis outweigh the upside potential in GDP growth in the FY
2023-24 which is projected to be 6.5 per cent. The renewed thrust for capital expenditure
is expected to provide impetus to Indias economic growth. Consumer Price Index (CPI) for
the full year rose from 5.5 per cent in FY 22 to 6.7 per cent in FY 23, much lower in the
second half of FY 23 at 6.1 per cent compared to 7.2 per cent in the first half. The
easing of international commodity prices, the promptness of measures taken by the
Government and monetary tightening by the Reserve Bank of India have helped to rein in
domestic inflation. Notably, the RBI sees CIP inflation declining to 5.2 per cent in the
full year of FY24, lower than the 5.5 per cent attained in FY22. With the April 2023
update of the WEO projecting India to be the fastest growing economy in FY 24, it is
likely to be strengthened by even more robust stability in the macro-economic variables.
2. Financial results:
Corporation financial performance for the financial year ended March 31, 2023 is
summarized below:
|
|
(Rs. in lakh) |
Particulars |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Interest on Loans and Advances |
55.13 |
85.11 |
Interest on deposits |
959.43 |
944.99 |
Other income (including exceptional items) |
421.72 |
82.96 |
Total income |
1,436.28 |
1,113.06 |
Interest on Borrowings |
13,562.34 |
13,373.91 |
Employees cost |
226.85 |
328.22 |
Other expenses |
161.98 |
191.71 |
Total Expenditure |
13,951.17 |
13,893.84 |
Loss for the year under reference |
12,514.89 |
12,780.77 |
Accumulated loss carried forward |
3,18,060.98 |
3,05,546.08 |
3. Performance:
During the year under reference, interest on Loans and Advances decreased by Rs.29.98
lakh and stood at Rs.55.13 lakh compared to Rs.85.11 lakh reported in the previous year.
Nevertheless, other income, including non-cash items, increased by 34.36 per cent at
Rs.1,381.15 lakh during the year under reference as against Rs.1,027.95 lakh reported a
year ago. Higher rates of interest on deposits compared to previous year and increased
write back of provision against NPA led to increase in other income. Total income for the
year under reference stood at Rs.1,436.28 lakh, an increase of 29.03 per cent over
Rs.1,113.06 lakh reported in the previous year.
Interest on loans granted by the Government for the year under reference increased
marginally and stood at Rs.13,562.34 lakh as against Rs.13,373.91 lakh reported a year
ago. Employees cost for the year under reference stood at Rs.226.85 lakh, a reduction of
30.88 per cent over Rs.328.22 lakh reported in the previous year. Total expenditure for
the year under report increased marginally and stood at Rs.13,951.17 lakh as against
Rs.13,893.84 lakh reported a year back. Loss for the year under reference stood at
Rs.12,514.89 lakh as against Rs.12,780.77 lakh registered in the previous year. The
accumulated loss of Rs.3,18,060.98 lakh as on March 31, 2023 (previous year Rs.3,05,546.08
lakh) was carried forward to Balance Sheet.
4. Borrowings:
During the year under reference, Corporation has not resorted borrowings. Borrowings
from Government of Gujarat remained statistic at Rs.66,168.43 lakh.
5. Recovery:
Entire business of the Corporation is revolved around recovery of dues only since last
two decades. Corporation continued to extend liberal One Time Settlement Schemes to
attract loanee units to come forward and settle the dues. During the year under reference,
Corporation received Rs.293.00 lakh from GIIC Ltd towards sale proceeds realized from
joint financing units, Rs.124.23 lakh from Office of Official Liquidator as liquidation
settlement of assisted units and recovered Rs.104.06 lakh from loanees in the normal
course by way of OTS or otherwise. Aggregate recovery for the year under reference stood
at Rs.521.29 lakh as against Rs.160.79 lakh reported a year ago.
6. Human Resource:
During the year under report, the staff strength of the Corporation reduced to 24 from
30 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 |
17 |
3 ‘C Grade employees |
4 |
Total |
24 |
Of the total staff strength of 24, one employee is on loan service and 8 are on
deputation with other Government departments. The effective staff strength of the
Corporation, thus, stood at 16 spread over three Regional Offices and Head Office.
7. Corporate Governance:
The Corporation has been ensuring transparency, fairness and accountability in all its
dealings. The detailed Corporate Governance Report containing all relevant information and
the certificate regarding compliance of corporate governance are forming part of the
Annual Report. The qualifications contained in para 2 of the Certificate of compliance
with the conditions of Corporate Governance Regulations are dealt with in "Other
Disclosures" in para 10 of the Report on Corporate Governance for FY 2022-23 forming
part of the Annual Report.
Management Discussion and Analysis Report and declaration by Managing Director that the
Board of Directors and Senior Management Personnel have complied with the Code of Conduct
also form part of Annual Report.
8. Auditors:
M/s. Pankaj R Shah & Associates, Chartered Accountants (FRN No. 107361W), are
appointed for the first term as the statutory auditors of the Corporation to hold office
from the conclusion of 62nd Annual General Meeting till the conclusion of
ensuing Annual General Meeting by the members at the AGM held on 29th July,
2022 pursuant to 37 (1) of SFCs Act, 1951. Since an auditor can be continued for four
years as per Reserve Bank of India norms, Corporation requested Reserve Bank of India to
confirm their eligibility and suitability for re-appointment for the second term. RBI,
vide letter dated April 18, 2023, confirmed their eligibility for appointment. Proposal to
appoint the said auditors for the second term as recommended by the Board is being placed
before the shareholders at the ensuing Annual General Meeting for consideration.
M/s. Pankaj R Shah & Associates, Chartered Accountants, statutory auditors have
submitted Independent Auditors Report on the financial statements of the Corporation for
the year ended March 31, 2023 which contains qualifications. Qualifications being
reiteration of previous years, it along with comments thereon is given in Addendum to this
Report and also form part of the Annual Report.
9. Board of Directors:
The following are the changes in chronological order in the Directorate during the
financial year ended March 31, 2023:
a. Shri Sanjay Gupta, General Manager, Regional Office, Ahmedabad of Small
Industries Development Bank of India assumed office of Director on April 12, 2022 as
second nominee of SIDBI on the Board of Directors of the Corporation pursuant to his
nomination vide letter dated 6th April, 2022 by SIDBI.
b. Government in Industries & Mines Department, vide Notification dated April
26, 2022, nominated Ms. Leenaben D Katdare, Deputy Manager, GIIC Ltd and officiating as
Officer- on-Special Duty with Industries & Mines Department, as a Director on the
Board of Directors of the Corporation in place of Ms. Ardra Agarwal, IAS. Ms. Leenaben D
Katdare assumed office on April 27, 2022.
c. Small Industries Development Bank of India, vide letter dated September 16, 2022
nominated Shri Raj Kumar, IAS, the then Additional Chief Secretary, Industries & Mines
Department as Chairman on the Board of Directors of the Corporation in place of Dr. Rajiv
Kumar Gupta, IAS (Retd.). Accordingly, Shri Raj Kumar, IAS assumed the position of
Chairman of the Board of Directors of the Corporation with effect from September 21, 2022.
However, on his relinquishing the charge of Additional Chief Secretary to Industries &
Mines Department, Shri Raj Kumar, IAS submitted resignation vide letter dated January 31,
2023. Pursuant to Section 11 (1) read with Section 14 of SFCs Act, 1951, the resignation
tendered was forwarded to the nominating authority for doing the needful. Nomination of
his successor is awaited.
d. Shri Akash Pawar, Deputy General Manager and Branch in-charge of Ahmedabad
Branch of Small Industries Development Bank of India assumed office as Director on
November 21, 2022 succeeding Shri C.V. Arun Kumar pursuant to his nomination by SIDBI,
Mumbai, vide letter dated November 10, 2022.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
brief resume of Directors joined on the Board of Directors during the year under report as
well as those who joined the Board after the close of the year under reference is
furnished in the Corporate Governance Report, forming part of the Annual Report.
10. Directors Responsibility Statement
The Directors, based on the representations received from the Operations Departments
and to the best of their knowledge and ability, hereby confirm that:
1. in the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
2. they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Corporation at the end of the financial year ended March
31, 2023 and of the profit and loss of the Corporation for that period;
3. they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the regulatory provisions for safeguarding the
assets of the Corporation and for preventing and detecting fraud and other irregularities;
4. the annual accounts for the year ended March 31, 2023 has been prepared on a going
concern basis,
5. they have laid down internal financial controls to be followed by the Corporation
and that such internal financial controls are adequate and were operating effectively
during the year ended March 31, 2023; and
6. proper systems have been devised to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively during the
year ended March 31, 2023.
11. Acknowledgement:
The Board of Directors is pleased to place of record its gratitude to Government of
India, Ministry of Finance, Department of Financial Services, Government of Gujarat and
its various departments, Small Industries Development Bank of India, Mumbai and Ahmedabad
offices, Reserve Bank of India, SEBI and BSE Ltd for their continuous support and
guidance. The Board gratefully acknowledges its appreciation to the commendable services
rendered and guidance provided by Dr. Rajiv Kumar Gupta, IAS (Retd.) as Chairman, Ms.
Ardra Agarwal, IAS and Shri C.V. Arun Kumar in their roles as Directors of the
Corporation. The Board is also pleased to place on record its gratitude to the
stakeholders, valued customers and well-wishers for their goodwill, patronage and support.
Finally, the Board also appreciates the dedicated services rendered by the staff at all
levels.
|
For and on behalf of the Board of Directors, |
Place : Gandhinagar |
(Sandip J. Sagale) |
Date : 22-05-2023 |
Managing Director |
+91-9892691696
