To the Members,

The Board of Directors is pleased to place before you the 66 th Annual Report of the Corporation containing audited Balance Sheet as at March 31, 2026, Statement of Profit and Loss, Cash Flow Statement and other financial statements for the year ended March 31, 2026.

1. Financial results:

A snapshot of the performance highlights of GSFC for FY 2025-26 and FY 2024-25 is given as below:

(Rs. in lakh)

2. Performance: During the year under reference, Corporation earned interest income of 14.32 lakh, an increase of 3.69 per cent over 13.81 lakh reported in the previous year. Interest on deposits increased by 6.40 per cent to 1,615.49 lakh compared to 1,512.03 lakh reported a year ago. Other income, including non-cash items, for the year under reference stood at 14.36 lakh as against 198.87 lakh reported in the previous year. Total income for the FY 2025-26 was 1,644.17 lakh as against 1,724.71 lakh reported in the previous year.

Interest on borrowings for the year under reference stood at 14,119.81 lakh, an increase of 1.33 per cent over 13,933.95 lakh reported a year ago. Employees cost for the year under reference decreased to 98.74 lakh compared to 112.61 lakh reported in FY 2024-25. Total expenditure for the year under report registered a marginal increase and stood at 14,373.09 lakh over 14,258.71 lakh reported a year back. Loss for the FY 2025-26 stood at 12,728.91 lakh, an increase of 1.56 per cent over 12,534.01 lakh registered in the previous year. The accumulated loss carried over to Balance Sheet stood at 3,55,244.73 lakh as against 3,42,515.82 lakh reported in the previous year.

3. Borrowings : Corporation has not resorted to borrowings during the year under reference. Aggregate principal borrowings from Government of Gujarat remained statistic at 66,168.43 lakh as on March 31, 2026.

4. Recovery: Corporation made a recovery 83.04 lakh in the Financial Year 2025-26 as against 212.29 lakh recovered a year ago.

5. Human Resource: During the year under report, the staff strength of the Corporation reduced to 10 from 12 reported in the previous year. The break-up of staff strength is as under:-

Of the total staff strength of 10, four employees are on deputation with other Government departments. The effective staff strength of the Corporation reduced to 6 spread over three Regional Offices and Head Office.

6. Corporate Governance: Corporation has put in place governance practices as required by SEBI (LODR) Regulations, 2015 and other applicable provisions in such a manner and to the extent that the same is not inconsistent with the provisions of State Financial Corporations Act, 1951 and the Regulations made thereunder. The qualifications contained in para 2 of the Certificate of compliance with the conditions of Corporate Governance Regulations are dealt with in " Other Disclosures " in para 10 of the Report on Corporate Governance for FY 2025-26 forming part of the Annual Report. Management Discussion and Analysis and declaration by Managing Director that the Board of Directors and Senior Management Personnel have complied with the Code of Conduct also form part of Annual Report.

7. Auditors: Pursuant to Section 37 of the State Financial Corporations Act, 1951, the shareholders at its Annual General Meeting held on 30 th July, 2025 had re-appointed M/s. Pankaj R Shah & Associates, Chartered Accountants (FRN No. 107361W), for the fourth term as the statutory auditors of the Corporation to hold office from the conclusion of 65 th Annual General Meeting till the conclusion of ensuing Annual General Meeting. As per RBI guidelines, in the normal course, an audit firm may continue for a term of four years in one spell. Hence the present statutory auditors are ineligible for re-appointment for FY 2026-27. From the list furnished by Reserve Bank of India, Corporation selected M/s. J.H. Mehta & Co., CAs, Ahmedabad and requested RBI to confirm their eligibility and suitability for appointment as statutory auditors for the first term for FY 2026-27. RBI, vide email dated April 13, 2026, confirmed their eligibility and suitability for appointment. Proposal to appoint the said firm as statutory auditors for the first term as reviewed by the Audit Committee and recommended by the Board of Directors is being placed before the shareholders at the ensuing Annual General Meeting for consideration.

Existing statutory auditors, M/s. Pankaj R Shah & Associates, Chartered Accountants, have submitted Independent Auditors ' Report on the financial statements of the Corporation for the year ended March 31, 2026 which contains two qualifications, both reiteration of previous years. Said qualifications along with comments thereon of the management are given in Addendum to this Report and also form part of the Annual Report.

8. Board of Directors: During the year under reference, Life Insurance Corporation of India, Mumbai, vide letter dated May 19, 2025, nominated Shri Daiya P.L., Senior Divisional Manager of its Gandhinagar DO as a Director on the Board of Directors of the Corporation in place of Shri Madhukar M Asthana. Shri Daiya P.L. assumed office of Director of the Corporation on May 22, 2025. No other change was effected in the Board of Directors during the year under reference.

9. Directors ' Responsibility Statement

The Directors, based on the representations received from the Operations Departments and to the best of their knowledge and ability, hereby confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Corporation at the end of the financial year ended March 31, 2026 and of the profit and loss of the Corporation for that period;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the regulatory provisions for safeguarding the assets of the Corporation and for preventing and detecting fraud and other irregularities;

4. the annual accounts for the year ended March 31, 2026 has been prepared on a going concern basis,

5. they have laid down internal financial controls to be followed by the Corporation and that such internal financial controls are adequate and were operating effectively during the year ended March 31, 2026; and

6. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended March 31, 2026.

10. Acknowledgement: The Board acknowledges with gratitude the valuable and timely advice, guidance and support received from Government of Gujarat and its various departments. The Board thanks Reserve Bank of India and Small Industries Development Bank of India, Lucknow, Mumbai and Ahmedabad offices for extending their support and cooperation. The Board also acknowledges with thanks the commendable services rendered and guidance provided by Shri Madhukar M Asthana during his association with the Corporation as a Director. The Board also thanks the stakeholders, valued customers, well-wishers, SEBI, BSE Ltd, CDSL and NSDL for their goodwill, patronage and support. Finally, the Board places on records its deep appreciation of the valuable contribution by the staff at all levels. For and on behalf of the Board of Directors,