Gilada Finance & Investments Ltd

To,

The Members,

The Board of Directors is pleased to present the 30^thAnnual Report of Gilada Finance and Investments Limited together with the audited financial statements for the year ended 31^stMarch 2024.

1. FINANCIAL PERFORMANCE OF THE COMPANY:

The Board’s Report shall be prepared based on the standalone financial statements of the company.

2. STATE OF THE COMPANY'S AFFAIRS:

During the year under review, your Company has successfully grown its AUM to Rs.29.55 crores from Rs.19.31 crores as compared to the previous year. The revenues from operations increased to Rs. 6.25 Crores during the financial year 2023-24 as against Rs. 4.33 Crores during the previous year. The net profit after tax improved to Rs. 1.70 Crores as compared to Rs. 1.51 Crores in the previous year.

The Company will continue its focus on Business loans to Small & Medium Enterprises (SMEs), Mortgage loans, Working capital loans and Vehicle loans. The Company has its presence in the State of Karnataka through Branches in Bangalore, Gulbarga, Sindagi and Bidar. The Company plans to grow its Loan portfolio by increasing the productivity and with the existing infrastructure. It has also got term loans from a Public Sector Bank, Cooperative Bank, Credit Co-operative Society and Non-Banking Financial Company.

3. SHARE CAPITAL:

The paid up equity share capital of the company as on 31^st March 2024 was Rs. 7.02 Crores

There was no public issue, rights issue, or preferential issue, etc. during the year under review. The Company has not issued shares with differential voting rights or sweat equity shares.

The Authorized Share Capital of the Company is Rs. 10 Crores/- (Rupees Ten Crores only) divided into 2 Crore (Two Crore only) Equity Shares of Rs.5/- (Rupees Five) each.

4. TRANSFER TO RESERVES:

Your Company has transferred a sum of Rs. 34.69 lakhs to Statutory Reserve as required under the Reserve Bank of India Act, 1934. The Company has not transferred any amount to General Reserve during the year under review.

5. DIVIDEND:

With the view to conserve resources, your Directors are unable to declare any dividend for the year under review.

The unclaimed/ unpaid dividend of Rs. 31,912is pertaining to the financial year 2017-18.

6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT i.e. AFTER 31^st MARCH, 2024 BEFORE DATE OF SIGNATURE OF DIRECTORS' REPORT:

There have been no material changes and commitments that affect the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report except the changes mentioned below:

a) Appointment of Internal Auditor

M/s. Devraj Chauhan and Associates has been appointed as an Internal Auditor of the Company for the Financial Year 2024-25. The same is approved by the members in the Audit Committee meeting held on 24^th May, 2024.

b) Appointment of Secretarial Auditor

M/s. Sand and Associates has been appointed as Secretarial Auditor of the Company for the Financial Year 2024-25. The same is approved by the Board of Directors in the Board meeting held on 24^th May, 2024.

7. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There has been no change in the business of the Company during the year under review.

8. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR ALONG WITH REASONS:

The Company has no subsidiaries and associate Company. Further during the year under review the Company has not entered into any joint ventures agreement with any other Company.

9. RBI GUIDELINES:

The Company fulfills all the norms and standards applicable to NBFCs as set out by Reserve Bank of India (RBI). Your Company is well capitalized and has a capital adequacy ratio of62.84%as against the 15% norm prescribed by the Regulator for NBFCs. This high CRAR will enable the Company to increase its loan volumes by resorting to higher leveraging of debt.

10. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL DURING THE YEAR:

(i) Mrs. Bindu Rajgopal Gilada(DIN: 00392976) retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for reappointment.

11. NUMBER OF BOARD & COMMITTEE MEETINGS:

During the year Five (5) Board Meetings, Four(4) Audit Committee Meetings, Two (2) Nomination and Remuneration Committee Meetings, one (1)Stakeholders Relationship Committee Meeting and One (1) Independent Directors Meeting were convened and held, the details of which are furnished in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

12. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUALDIRECTORS:

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and individual Directors, including the Chairman of the Company. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January, 2017.

For evaluating the Board as a whole, views were sought from the Directors on various aspects of the Board’s functioning such as degree of fulfilment of key responsibilities, Board Structure and composition, establishment, delineation of responsibilities to various committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the management.

Similarly, views from the Directors were also sought on performance of individual Directors covering various aspects such as attendance and contribution at the Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and promoting effective relationships and open communication, communicating effectively with all stakeholders and motivating and providing guidance to the Executive Director.

Areas on which the Committees of the Board were assessed included degree of fulfilment of key responsibilities, adequacy of Committee composition, effectiveness of meetings, Committee dynamics and quality of relationship of the Committee with the Board and the Management.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of individual Directors.

13. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT, IF ANY:

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149 (6).

Mr. K V Prabhakar, has been appointed as an Independent Director for another term of 5 years in the Annual General Meeting held on 30^th September, 2022. He has successfully qualified the Online Proficiency Self-assessment test for Independent Director’s Databank on April 14, 2020 as per IICA (Indian Institute of Corporate Affairs) in compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Mr. D N Gopal, has been appointed as an Independent Director for a term of 5 years in the Annual General Meeting held on 30^th September, 2021.He has successfully qualified the Online Proficiency Self-assessment test for Independent Director’s Databank on September 04, 2020 as per IICA (Indian Institute of Corporate Affairs) in compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Mr. Om Prakash Asava, has been appointed as an Independent Director for a term of 5 years in the Extraordinary General Meeting held on 18^thMarch, 2022. He has successfully qualified the Online Proficiency Self-assessment test for Independent Director’s Databank on February 03,2022as per IICA (Indian Institute of Corporate Affairs) in compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

14. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUBSECTION (3) OF SECTION 178:

The Nomination and Remuneration Committee develops the competency requirements of the Board based on the industry and the strategy of the Company, conducts a gap analysis and recommends the reconstitution of the Board, as and when required. It also recommends to the Board, the appointment of Directors having good personal and professional reputation and conducts reference checks and due diligence of all Directors before recommending them to the Board. Besides the above, the Nomination and Remuneration Committee ensures that the new Directors are familiarized with the operations of the Company and endeavors to provide relevant training to the Directors.

In accordance with the provisions of Section 178 of the Act, the Board of Directors have adopted a Policy on Remuneration for the Directors, key managerial personnel and other employees.

The Remuneration Policy for Directors, Key Managerial Personnel ("KMP”) and all other employees is aligned to the philosophy on the commitment of fostering a culture of leadership with trust. The Remuneration Policy aims to ensure that the level and composition of the remuneration of the Directors, KMP and all other employees is reasonable and sufficient to attract, retain and motivate them to successfully run the Company.

Salient features of the Remuneration Policy, inter aliaincludes

• Remuneration in the form of Sitting Fees and Commission to be paid to Independent Directors and Non-Independent Non-Executive Directors, in accordance with the provisions of the Actand as recommended by the Nomination and Remuneration Committee;

• Remuneration to Managing Director / Executive Directors / KMP and all other employees is reasonable and sufficient to attract, retain and motivate them to run the Company successfully and retain talented and qualified individuals suitable for their roles, in accordance with the defined terms of remuneration mix or composition; and

• No remuneration would be payable to Directors for services rendered in any other capacity unless the services are of a professional nature and the Nomination and Remuneration Committee is of the opinion that the Director possesses requisite qualification for the practice of the profession and approval of the Central Government has been received, if required, for paying the same.

The Remuneration Policy of the Company are made available on the Company’s website at www. giladafinance. com

15. PARTICULARS OF EMPLOYEE AND RELATED DISCLOSURE

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) have been appended as an Annexure III to this Annual Report.

16. STATUTORY AUDITORS:

The Statutory Auditor of your Company, M/s BENNUR NAGARAJA & CO, Chartered Accountants ,Bangalore were appointed for a term of 5 (Five) consecutive years at the 27^thAnnual General Meeting (AGM) held on 30^thSeptember, 2021 to hold office till the conclusion of the 32^ndAnnual General Meeting of the Company to be held in the year 2026.

The Auditors’ Report for the financial year ended 31^st March, 2024 on the financial statements of the Company is a part of this Annual Report.

The observations made in the Auditor’s Report of M/s. BENNUR NAGARAJA & CO, Chartered Accountants, read together with relevant notes thereon, are self-explanatory and hence do not call for any comments.

17. DETAILS IN RESPECT OF THE FRAUDS REPORTED BY THE AUDITOR UNDER SUB SECTION 12 OF SECTION 143 :

There were no instances of fraud reported by the auditors during the year.

18. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

A. By the Auditor

B. By the Secretarial Auditor

19. A DISCLOSURE, AS TO WHETHER MAINTENANCE OF COST RECORDS AS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013, IS REQUIRED BY THE COMPANY AND ACCORDINGLY SUCH ACCOUNTS AND RECORDS ARE MADE AND MAINTAINED:

In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules,

2014, the Company is exempt from requirements of cost audit.

20. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed CS Varun Nashine, Practicing Company Secretary (Membership No. 49574), to undertake the Secretarial Audit of the Company, for FY 2023-24. The Secretarial Audit Report, in the prescribed Form No. MR-3, is annexed as Annexure ‘III’.

21. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Board has adopted policies and procedures for ensuring the orderly and efficiently conduct of its business, including adherence to the Company’s policies, the safe guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and timely disclosure of financial disclosures.

22. VIGIL MECHANISM:

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy is uploaded on the website of the Company at www.giladafinance.com/wp-content/uploads/2023/04/Vigil-Mechnaism-Policy.pdf.

23. COMMITTEES FORMED

A) Audit Committee

In compliance with Section 177(8) of the Companies Act, 2013 the details regarding Audit Committee is provided under Corporate Governance Report which forms part of Annual Report.

There was no instance during FY’24, where the Board had not accepted any recommendation of the Audit Committee.

B) Nomination and Remuneration Committee

In compliance with Section 178(1) of the Companies Act 2013 the company has constituted the Nomination and Remuneration Committee the details regarding the same is provided under Corporate Governance Report which forms the part of Annual Report.

C) Stakeholder Relationship Committee

In compliance with Section 178(5) of the Companies Act 2103 the company has constituted the Stakeholder Relationship Committee the details regarding the same is provided under Corporate Governance Report which forms the part of Annual Report

24. CREDIT RATING

ACUITE Rating and Research has assigned a ACUITE BB Stable rating to the long-term facilities of your Company during the reported Financial Year. The total Quantum Rated is 5.00 Crores. This rating is applicable to facilities having a tenure of more than one year. The Credit Rating received is uploaded on the website of the Company at https: / / www. giladafinance. com / credit-rating /.

25. LISTING OF SHARES

The equity shares of the Company are listed on the Bombay Stock Exchange (BSE). The listing fee for the year 2023-24 has already been paid to the credit of the Stock Exchange.

26. RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.

The Internal Auditor evaluates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Asset Liability Risk Management and IT Strategy and Steering Committee oversees the Risk Management and reports to the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status from time to time.

The Policy is updated on the website of the company at https: / /www.giladafinance.com/wp- content/uploads / 2024/05 / RISK-MANAGEMENT-POLICY.pdf.

27. ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the website of the Company at

https: / /www.giladafinance.com/annual-returns/.

28. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

There are no significant and material orders passed by the Regulators or Courts or Tribunal impacting the going concern status and company’s operations in future.

29. DETAILS OF DEPOSITS:

The details relating to deposits, covered under Chapter V of the Act and in term of the disclosure required under section 134(3) read with rule 8(5) of the Companies (Accounts) Rules, 2014, it is hereby stated that:

During the year, the company has not accepted from the public any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Accepting of Deposits) Rules, 2014. Further as the company has not accepted any deposits from the public, the Company is not required to comply with the directions issued by the Reserve Bank of India under Non-Banking Financial Companies (Reserve Bank) Directions, 1998 with respect to public deposits.

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Pursuant to Section 186(11) (a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers)Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non-Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantees have not been disclosed in this Report. The details of the Investments of the Company are furnished under Note 4 of Notes forming part of the Financial Statements for the year ended 31st March, 2024.

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/arrangement/transactions entered by the Company during FY2023-24 with related parties were incompliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained for all related party transactions which are foreseen and of repetitive nature. Pursuant to the said omnibus approval, details of transaction entered into is also reviewed by the Audit Committee on a quarterly basis.

All contracts/ arrangements/ transactions entered into by the Company during the financial year with the Related Parties are at arm’s length basis and in the ordinary course of business.

A Statement containing the details of material contracts or arrangements or transactions with Related Parties on anarm’s length basis with respect to transactions as required under Section 188(1) of the Act, in the prescribed Form No.AOC-2, is attached as Annexurell .

Further, details of Related Party Transactions as required to be disclosed by Ind AS- 24 on "Related Party Disclosures” specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, are given in the Note 11in heading B- Notes on Accounts to the financial statements.

32. CERTIFICATE ON CORPORATE GOVERNANCE REPORT:

Pursuant to the SEBI Listing Regulations, 2015, a separate chapter titled Corporate Governance has been included in this Annual Report as Annexure IV.

The Certificate from the Statutory Auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.

33. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report forms part of this Annual Report for the year ended 31^stMarch, 2024, has been provided in Annexure- V in this Annual Report.

34. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

In order to prevent sexual harassment of women at work place a new act, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment. The policy is available on the website of the Company at https: / /www.giladafinance.com/wp-

content/uploads/2023/06/POSH-POLICY.pdf.

35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Conservation of energy

(b) Technology absorption

(c) Foreign exchange earnings and Outgo

36. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The criteria for setting up Corporate Social Responsibility as prescribed by the notification issued by the Ministry of Corporate Affairs dated 27^th February 2014 read with section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are presently not applicable to the Company.

37. DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors’ Responsibility Statement referred to in Sub-clause (c) of Clause (3) of SubSection (5) of Section 134 of the Companies Act, 2013, shall state that:?

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

(b) the directors had 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 company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

38. SECRETARIAL STANDARDS:

The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

39. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2023-24.

40. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

This clause is not applicable to our Company.

41. ACKNOWLEDGEMENTS:

The continued co-operation and support of its loyal customers has enabled the Company to make every effort in understanding their unique needs. Our employees at all levels, have been core to our existence and their hard work, cooperation and support is helping us as a Company face all challenges. Our Company is always grateful for their efforts. The flagbearers of fair play and regulations, which includes the regulatory authorities, the esteemed league of bankers, financial institutions, rating agencies, stock exchanges and depositories, auditors, legal advisors, consultants and other stakeholders have all played a

vital role in instilling transparency and good governance. The Company deeply acknowledges their support and guidance.