(12) PROVISION:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources even though the amount cannot be determined with certainty and represents only a best estimate in the light of available information. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
B. NOTES ON ACCOUNTS:
(01) All Government guaranteed bonds have been redeemed and Government in Industries & Mines Department, vide Resolution No. PRC/102015/1126/P dated 07-10-2021, vacated the Government Guarantee of ? 43,299.00 lakh thereby making nil outstanding guarantee amount. However, Corporation is in default of guarantee fee of ? 35,60,39,833/- (Previous year ? 35,60,39,833/-) to Government of Gujarat.
(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 amount is realized.
During the year under review, Corporation recovered an amount of ? 4,23,164/-(previous year? 36,93,510/-) from Bad Debts written off.
(03) CONTINGENT LAIBILITES:
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) During the year under reference, BSE Ltd imposed aggregate fine of ? 46,17,340/-(previous year ? 49,14,700/-) for non-compliance with the provisions contained in SEBI (LODR) Regulations, 2015 as under:-
Since Corporation has represented to appropriate authorities for amendments in SFCs Act, 1951 as advised by SEBI vide letter dated December 20, 2021 and waiver of fine to BSE Ltd, fine imposed has been recognized as contingent liability.
(ii) Details of Income Tax disputes against which appeals have been preferred are given below. The quantum of disputed tax liability is not ascertainable.
Additional disclosures:-
(a) Availing Vivad se Vishvas Scheme:-
Pursuant to Corporation availing of the Vivad se Vishvas Scheme introduced by the Income Tax Department in respect of demand raised for Assessment Year 2000-01, Income Tax Department issued Form No. on 27th May, 2021. Vide order giving effect to the Scheme dated 11.01.2023, refund of ? 24,79,448/- is still awaited.
(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.
(ii) The outstanding balance of borrowings, other liabilities and provisions and other assets are subject to confirmation and adjustment, if any.
(iii) 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 the figures of the current year.
(06) 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 excess provision of ? 2,70,80,411/- in the current year and shown separately in the Statement of Profit and Loss (Previous year ? 3,61,88,318/-).
(07) Corporation’s operations are solely in the Financial Service Industry including Investment Operation. As majority of Corporation’s total revenue consists of interest income, 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 ? 621,36,80,000/- as interest free from 1.7.2012. A proposal dated 17th October, 2012has been submitted to Government through Industries & Mines Department and decision is awaited. Since then, interest on Government loan is charged to Statement of Profit & Loss on simple interest basis from 1.7.2012. Further, penal interest @ 2 per cent is also being charged to Statement of Profit & Loss on delayed payment of interest.
(09) 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 as statutory Corporations pursuant 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 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. Corporation, being a statutory body, thus prepares accounts on “going concern” assumption and it is appropriate under the aforesaid circumstances.
(10) Disclosure related to Prior Period Items:
(i) During the year under reference, Corporation withdrawn an amount of ? 2,19,79,134/- from “Reserves for Bad and Doubtful Debts” against bad debts written off out of which ? 17,00,000/- pertaining to FY 2022-23.
Basic and diluted earnings per share are computed in accordance with Accounting Standard 20 - Earnings per share. Basic and diluted earnings per share are calculated by dividing the net loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
GENERAL DISCLOSURE:-
(i) During the year under reference, bad debts written off amounting to ? 202.79 lakh was transferred to “Reserve for Bad and Doubtful Debts” resulting into said Reserve as well as expenditure is reduced to that extent.
(ii) Corporation, while acting as an agency to Sales Tax Department, Government of Gujarat, had sanctioned loans being the amount of sales tax payable by loanee units to Sales Tax Department (part of loans and advances depicted under Note 7) and created a liability for the same amount under the head “Long Term Borrowings” (Note 3). The amount recovered from the loanee units is paid to Sales Tax Department. Though the Corporation was only an agency for sanctioning of the loans, it has made provision for NPA of '31.49 crore on the said loan on a conservative basis.
Signatories to Notes “1” to “15”
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS,
(M.R. Malpani) (Raveendran Nair) (Naresh Babuta) (Leena D Katdare)(Sandip J Sagale, IAS) Executive Officer Secretary (Board) Director Director Managing Director
(Accounts)
As per our Report of even date FOR PANKAJ R SHAH & ASSOCIATES CHARTERED ACCOUNTANTS ICAI Firm Reg. No. : 107361W
NILESH SHAH PARTNER
Membership No. 107414
PLACE: AHMEDABAD PLACE: GANDHINAGAR
DATE: 28/05/2024 DATE: 28/05/2024
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