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) Details of Income Tax disputes against which appeals have been preferred are given below. The quantum of disputed tax liability is not ascertainable.
(a)
Pending before Income Tax Appellate Tribunal:
Assessment Year
Particulars
2013-14
Appeal No. 1931/A/16 -Addition u/s 2 (24)(x) read with Section 36 (1)(va)
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, it is ascertained that refund amount of ?24,79,448/- was adjusted against demands of previous years.
(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 ? 60,95,878/-in the year under reference and shown separately in the Statement of Profit and Loss (Previous year ?1,90,86,523/-).
(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, 2012 was submitted to Government through Industries & Mines Department. In response to letter dated January 18, 2025 received from Government in Industries & Mines Department in the matter, latest position of the Corporation has been submitted vide letter dated 04-02-2025. Further information called for by Industries & Mines Department vide letter dated September 22, 2025 was furnished vide letters dated December 18, 2025 and January 22, 2026. More information called for by Industries & Mines Department vide February 09, 2026 is being collated and furnished. Awaiting final decision on the issue, since 1.7.2012, interest on Government loan is charged to Statement of Profit & Loss on simple interest basis. 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) During the year under reference, Corporation withdrawn an amount of ?34,33,893/-(previous year ?32,34,161/-) from “Reserves for Bad and Doubtful Debts” against bad debts written off.
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) 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 Rs.31.49 crore on the said loan on a conservative basis.