Gujarat State Financial Corporation Management Discussions.

(1) Industry structure and development:

Gujarat State Financial Corporation is established under the State Financial Corporations Act, 1951 as a State level development financial institution to provide medium and long term credit to small and medium scale industrial undertakings in the State of Gujarat and Union Territories of Dadra and Nagar Haveli. Since establishment, Corporation has played pivotal role in industrial development of the State. However, as a result of liberalized financial and economic policies, Banks and other NBFCs, who have access to cheap funds, started catering to the requirements of MSMEs vigorously. Corporation could not source adequate funds particularly after FY 2002-03 which impacted its operations. Since FY 2001-02, Corporation discontinued activities related to sanction and disbursement and concentrating on recovery of dues from loanees.

(2) Opportunities and Threats

The State of Gujarat is progressing well in industrial arena and it creates vast opportunities for the Corporation to cater to the requirement of MSMEs. However, keeping in view the present status of the Corporation, it is not in a position to re-start its main operational activities in the near future and hence could not tap the opportunities available.

With the discontinuance of main activities, Corporation has deployed its entire machinery towards recovery of dues. Almost all good accounts have been settled and Corporation is now left with sticky and inactive accounts. Recovery from such accounts which are Non-Performing Assets is an uphill task for the Corporation.

(3) Segment-wise performance:

Since Corporation is not providing any services other than engaged in recovery of dues, segment-wise performance is not attempted.

(4) Outlook:

Keeping in view the present state of affairs, Corporation does not visualize starting its main activities in the near future. Available machinery is deployed for recovery of dues. Endeavour is to reduce loss by curtailing expenditure to the maximum extent so as to keep afloat the organization.

(5) Risks and concerns:

Corporation is not above the general risks that are associated with an organization. Recovery from NPAs not backed by security is a matter of concern to the Corporation. To mitigate the difficulties and to attract defaulters, Corporation devised and implemented One Time Settlement Schemes for different categories of loanees. Recovery of dues is, therefore, a matter of concern to the Corporation.

(6) Internal control system and their adequacy:

The Corporation has proper and adequate system of internal controls proportionate to its size and business. Corporation engaged services of an external firm of Chartered Accountants for internal audit so as to provide timely information to management. The internal control system of the Corporation is designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability.

(7) Financial Performance:

(Rs. in Crore)


Year ended

31/03/2018 31/03/2017
Total Income 17.98 18.07
Interest expenses 125.98 123.67
Other expenses 7.53 11.58
Loss before depreciation & tax 115.06 116.65
Depreciation 0.47 0.53
Loss before tax 115.53 117.18
Loss after depreciation & tax 115.53 117.18
Balance carried over to balance sheet (2,572.43) (2,456.91)

(8) Material developments in Human Resources:

During the year under reference, there was no reportable material development in human resources or industrial relations front. Corporations staff strength remained at 55 as on 31st March, 2018 as against 61 reported in the previous year.

(9) 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.