To the Members,
 
 The Directors present the 52nd Annual Report of the Corporation
 together with the audited statements of Accounts for the year ended
 31st March 2012.
 
 1.0 Economy :
 
 The developments over the last year in major economies of the world
 have not been encouraging. The global economy witnessed fresh spells of
 crisis during 2011 12 with domestic business and consumer confdence
 dampening on the back of deepening sovereign debt crisis in Europe. The
 crisis percolated into Indian economy and growth in India is moderating
 more than expected earlier. The infation, though moderated in last
 quarter, remained sticky and stood at 6.9% in March 2012. Average
 infation for fscal 2012 was 8.8% as compared to 9.5% in fscal 2011.
 During April March 2011 12, Index of Industrial Production (IIP) growth
 was 2.8% as compared to 8.2% during April March 2010 11. The Indian
 economy saw moderation in economic activity during fscal 2012,
 following domestic macroeconomic conditions of high interest rates and
 slowdown in investments. The overall growth of GDP at factor cost at
 constant prices, as per Advanced Estimates, is estimated at 6.9% in
 2011 12 as compared to the revised growth of 8.4% during 2010 11. The
 growth in real GDP is placed at 6.1% in the third quarter of 2011 12.
 Weakening industrial growth and global economic situation has adversely
 affected the growth of Indian economy.
 
 2.0 Operational Results/Financial Highlights :
 
 Since last more than one decade, Corporation is solely concentrating on
 recovery of dues. In order to boost recovery, Corporation has extended
 the validity of various One Time Settlement schemes upto 31.3.2012.
 During the year under reference, aggregate recovery of the Corporation
 stood at Rs. 31.69 crore as against Rs. 38.35 crore during the last
 fnancial year 2010 11.
 
 During the year under report, the total income of the Corporation
 including exceptional items stood atRs. 56.71 crore as against Rs. 64.21
 crore during the last year. The total expenditure for the period under
 reference came to Rs. 265.63 crore whereas the same for the last year was
 Rs. 221.12 crore. Corporation recorded a net loss ofRs. 208.92 crore during
 the year under report as against Rs. 156.91 crore in the previous year.
 The accumulated loss of the Corporation as on 31st March, 2012 stood at
 Rs. 1913.97 crore.
 
 Corporation redeemed bonds guaranteed by the State Government totaling
 face value of Rs. 2.95 crore during the year under report besides meeting
 liability of Public Sector Bonds amounting to Rs. 1.92 crore. The
 outstanding Government guaranteed bonds as on 31/03/2012 stood at Rs.
 1.25 crore as against Rs. 4.20 crore at the end of previous year.
 
 3.0 Resources :
 
 Corporation is receiving active support of Government of Gujarat by way
 of budgetary allocation of funds to meet its liabilities. During the
 year under report, Corporation has received loan of Rs. 4.20 crore from
 Government of Gujarat.
 
 4.0 Recovery :
 
 During the year 2011 12, total recovery of the Corporation amounted to
 Rs. 31.69 crore as againstRs. 38.35 crore during FY 2010 11.
 
 5.0 Human Resource :
 
 During the year under reference, keeping in pace with the requirement,
 Corporation attempted to recast the organization structure. Under the
 organization structure approved and implemented during the year, the
 Regional Offce is manned by an offcer who has been designated
 functionally as Regional Manager inspite of the cadre in which he
 belongs supported by ministerial staff designated functionally. As for
 Head Offce, the number of departments has been pruned down to six by
 way of merger of various departments. Each restructured department at
 Head Offce is headed by an offcer known as Executive Offcer supported
 by Junior Executive Offcer and other ministerial staff.  There was an
 attrition of 5 personnel during the year due to retirement, resignation
 etc.  The total staff strength as on 31/03/2012 is as under:
 
 1.     Grade ''A'' Offcers                            08
 
 2.     Grade ''B'' offcers                            95
 
 3.     Grade ''C employees                           26
 
                     Total                          129
 
 Out of 129 employees, 45 staff are on deputation/loan service to other
 offces of the Government.
 
 6.0 Audit :
 
 As recommended by RBI under the provisions of Section 37 (I) of the
 SFCs Act, 1951 and approved by the members in the 51st Annual General
 Meeting, M/s. Mahendra N Shah & Co., Chartered Accountants, Ahmedabad,
 were re appointed as Statutory Auditors to conduct audit of the Books
 of Accounts of the Corporation for FY 2011 12. They, being eligible,
 have given their consent to continue to act as Auditors of the
 Corporation for FY 2012 13. RBI has also confrmed their eligibility for
 re appointment. Members are requested to consider their re appointment
 as Statutory Auditors of the Corporation for the current year 2012 13.
 
 7.0 Board of Directors :
 
 During the course of the fnancial year 2011 12, Shri DN Pandey, IAS,
 Commissioner (Public Sector Enterprises) & Ex offcio Secretary, Finance
 Department, Govt. of Gujarat was nominated on the Board of the
 Corporation with effect from 17.9.2011 in place of Shri CL Meena, IAS.
 
 The Board of Directors places on record their appreciation and thanks
 for the valuable services rendered by Shri CL Meena, IAS, during his
 tenure as Director of the Corporation.
 
 8.0 Corporate Governance :
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, Management Discussion and Analysis Report, Corporate
 Governance Report and Certifcate regarding compliance of conditions of
 Corporate Governance are annexed hereto and form part of the Annual
 Report.
 
 9.0 Directors'' Responsibility Statement :
 
 Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
 1956, the Board of Directors, based on the representations received
 from the Accounts Department, hereby confrms that :
 
 1.  In the preparation of the annual accounts for the year ended 31st
 March 2012, the applicable accounting standards have been followed
 along with proper explanation relating to material departures, if any.
 
 2.  Such accounting policies as mentioned in Note 16 of the Annual
 Accounts have been selected and applied consistently and judgments and
 estimates that are reasonable and prudent are made so as to give a true
 and fair view of the state of affairs of the Corporation at the end of
 the fnancial year ended 31st March 2012 and of the loss of the
 Corporation for that year.
 
 3.  Proper and suffcient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act 1956 for safeguarding the assets of the Corporation and
 for preventing and detecting fraud and other irregularities.
 
 4.  The annual accounts for the year ended 31st March 2012 has been
 prepared on a going concern basis.
 
 10.0 Acknowledgement :
 
 The Board of Directors gratefully acknowledge the valuable advice and
 support extended by various Ministries of the Government of Gujarat,
 particularly the Finance Department and Industries & Mines Department
 and Small Industries Development Bank of India and its offce at
 Ahmedabad. The Board thanks various Banks for extending their support
 and co operation.
 
 Your Directors also convey their gratitude to the shareholders of the
 Corporation for the confdence reposed by them in the Corporation. The
 Board also commends the hard work and dedicated efforts put in by the
 employees of the Corporation.
 
                                        For and on behalf of the Board
 
 
 Place : Gandhinagar                           (Arvind Agarwal)
 
 Date : 03/08/2012                             Managing Director