| (01) All Government guaranteed bonds have been redeemed and proposal
for vacation of guarantees are submitted to administrative department.
Since there was no Government guaranteed bonds during the previous
year, no guarantee fee is payable during the year under report.
However, Corporation is in default of guarantee fee of Rs.
35,60,39,833/- (Previous year Rs. 35,60,39,833/-).
(02) While writing off principal amount as bad debts in certain cases,
the value of securities available has not been ascertained and deducted
from the principal amount. The sale proceeds of the securities will be
accounted as bad debts recovered under the head "Other Income" as and
when the amounts are realized.
During the year under review, the Corporation has recovered an amount
of Rs. 10,71,944/-/- [Previous year (Rs. 50,79,234-)] towards Bad Debts
written off.
(03) CONTINGENT LIABILITIES :
Contingent liabilities are not recognized as there is no present
obligation as a result of past events and it is probable that there
will be an outflow of resources. However, contingent liabilities are
disclosed as under :
(i) Claims in Civil suits against Corporation not acknowledged as debt
estimated to Rs. 202.85 lacs (previous year Rs. 202.85 lacs).
(ii) GIIC has claimed Rs. 33,75,000/- towards rent expenses payable in
respect of share of Mumbai Office and Mumbai Guest House upto 31st
March, 2004 whereas Corporation has made a claim of Rs. 51,70,056/-
from GIIC on account of occupation of GSFC's office premises at Rajkot.
Both the claims are yet to be resolved and hence neither income nor
expense has been recognized in the accounts.
(iii) Details of Income Tax disputes against which appeals have been
preferred are given below. The quantum of disputed tax liability is not
ascertainable.
(a) Appeals pending before CIT (Appeals)
(04) DETAILS OF PENDING RECONCILIATION :
(i) In some of the cases, the balances as per the General Ledger are
not tallied with the respective subsidiary ledgers. Some accounts also
show odd balances.
(ii) The outstanding balance of current liabilities/ non current
liabilities including the other liabilities and other assets are
subject to confirmation and adjustment, if any.
(iii) Unpaid expenses of Rs. 91,58,513/- (Previous year Rs.
91,08,794/-) stands un- reconciled.
(iv) The Staff Advance interest accumulation of Rs. 2,03,37,025/- is
un-reconciled with individual ledger balances (Previous year Rs.
2,35,35,986/-).
(v) The difference in Sales Tax deferment Deemed loan between
Subsidiary Ledger and General Ledger stands un-reconciled.
(05) The figures of previous year have been regrouped and rearranged
wherever necessary to make them comparable with figures of the current
year.
(06) The Corporation has made provision as per the prudential norms
prescribed by SIDBI on the principal outstanding and other expenses
incurred and shown as receivables. The provision made is subject to
the note no. B-4 regarding non reconciliation of general ledger
balances as per the subsidiary ledger. During the year under reference,
all loan accounts are treated as doubtful for more than three years or
loss assets. Accordingly, 100% provision has been made. Corporation has
written back provision of NPA to the extent of Rs. 8,85,02,220/- in the
current year (Previous year Rs. 15,90,48,860/-).
(07) Corporation's operations are solely in the Financial Service
Industry including Investment Operation. As interest income accounts
for nearly 95% of Corporation's total revenue, separate segment
reporting as per Accounting Standard-17 is not considered necessary.
(08) Board of Directors at its meeting held on 3.10.2012 decided to
recommend to Government of Gujarat to make the loan of Rs. 621.37
crores as interest free from 1.7.2012. A proposal has been submitted to
Government through Industries & Mines Department and decision is
awaited. Till then, interest on Government loan is charged to Statement
of Profit & Loss on simple interest basis from 1.7.2012.
(09) Corporation has been making specific provision @ 100% of
outstanding principal and other expenses on ascertained bad debts in
earlier years. Due to clubbing of accounts, no separate provision for
ascertained bad debts has been made.
(10) Corporation sold out furniture and fixtures and realized an amount
of Rs. 32,31,450/-. Since the assets sold out could not be identified
from the Fixed Assets Register maintained, Capital Work-in-Progress of
earlier years shown in the account has been appropriated and loss on
sale of furniture of Rs. 8,21,659/- has been accounted for in the
Statement of Profit and Loss.
(11) Corporation has sold Baroda Office building and received sale
consideration of Rs.92.00 lakh and possession of the premises was
handed over to the purchaser. Pending execution of sale deed, the
amount is carried forward in the books and no depreciation is provided
on the same during the year.
(12) Financial Corporations are established to financing medium and
small scale industries as Regional Development Banks for accelerating
the industrial growth in States. SFCs are created in pursuance to
Entry No. 43 of the Union List by Parliament as a special Act. GSFC,
being body corporate established under SFCs Act, 1951, remedial
measures available to companies under SICA like rehabilitation,
revival, takeover of management etc., are not available to the
Corporation. The Corporation has suffered immense losses till date.
However, it is continuing its recovery functions. The Government has
been moved to make the loan advanced to the Corporation interest-free,
which is under consideration. Inview of the above, it is the view of
the Corporation that preparing accounts on "going concern" assumption
is appropriate.
|