Gujarat State Financial Corporation Management Discussions

1. (a) Industry structure and developments:

Gujarat State Financial Corporation is a statutory Corporation established by Government Gujarat pursuant to Section 3 (1) of State Financial Corporations Act, 1951 as a State development financial institution to provide medium and long term credit to small medium scale industrial undertakings in the State of Gujarat and Union Territories of and Nagar Haveli. Corporation played a pivotal role in industrial development of the by extending financial assistance to SMEs. With the passage of time and particularly financial reforms. Corporations fortune dwindled and could not withstand stiff competition from Banks and other financial institutions. Corporation was forced to discontinue its activities of sanction and disbursement from FY 2001-02 and concentrating on recovery dues since then.

(b) Opportunities and Threats

SFCs were helping to decentralize economic development and have created employment opportunities by assisting first generation entrepreneurs, artisans, SSI units etc. There is dearth in opportunities for an organization like GSFC to prosper. Though the Corporation has the potential to serve the MSME sector from close quarters, adverse financial position and its inability to raise cheap funds prevented it from carrying out its main operations sanction and disbursement.

(c) Segment-wise performance:

Corporation is engaged in the business of recovery of dues and allied matters for the more than two decades. All activities of the Corporation revolve around the said business. During the year under report, Corporation recovered an amount of 2.12 crore against 5.59 crore recovered in the previous year.

(d) Outlook:

Corporation is not contemplating to start its main activities in the near future. Available machinery is deployed for recovery of dues.

(e) Risks and concerns:

Risk is an inherent part of business and the Corporation not free from various associated with the business. Its utmost concern is how to effect recovery from sticky Non Performing assets. Recovery of dues is expected to diminish from year to year considering the nature of loan assets available with the Corporation.

(f) Internal control system and their adequacy:

Corporations internal control system provides for budgetary control and cost monitoring system. Corporation engaged services of an external firm of Chartered Accountants internal audit so as to provide timely information to management. Regular management reviews are undertaken to ensure conformity with targets. The internal control system of Corporation is adequate commensurate with the size of the Corporation.

(g) Financial Performance:

(Rs.in crore)

Particulars	Year ended
	31/03/2025	31/03/2024
Total Income	17.25	21.49
Interest expenses	139.34	137.48
Other expenses	3.04	2.99
Loss before depreciation & tax	125.14	118.98

Particulars	Year ended
	31/03/2025	31/03/2024
Depreciation	0.20	0.23
Loss before tax	125.34	119.21
Loss after depreciation & tax	125.34	119.21
Balance carried over to balance sheet	(3,425.16)	(3,299.82)

(h) Material developments in Human Resources:

There is no reportable material development in human resources during the year under reference. Corporations staff strength, including employees on deputation, reduced to 12 as on 31^st March, 2025 compared to 16 reported in the previous year.

(i) Details of significant changes in key financial ratios:

No significant change in key financial the financial ratios during the year under report as compared to immediately preceding financial year.

2. Cautionary statement:

Statements in the Management Discussion and Analysis describing the Corporations objective, projections, estimates and expectations may be "forward looking" within the meaning of applicable laws or regulations. Actual results may differ from those expressed or implied.