Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of M/s GaladaFinance Limited (the Company) which comprises the Balance Sheet as at 31stMarch 2022 the Statement of Profit and Loss (including Other Comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as the standalone financial statements).In our opinion and to the best of our information and according to the explanations givento us the aforesaid standalone financial statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2022 the profit/loss andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
We do not have any key audit matters that needs to be communicated in our report.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the standalone financial statements and our auditor'sreport thereon. Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon. Ouropinion on the standalone financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we are required to report that fact. We have nothing to reportin this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
x Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
x Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
x Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
x Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
x Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
c) The Balance Sheet the Statement of Profit and Loss including Other Comprehensiveincome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account and with the returns receivedfrom the branches not visited by us.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch2022 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report inAnnexure A.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
(i) The Company does not have any pending litigations which would impact its standalonefinancial position.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
(iv) (a) The Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity (Intermediaries) with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany (Ultimate Beneficiaries) or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity (FundingParties) with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party(Ultimate Beneficiaries) or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.
2. As required by the Companies (Auditor's Report) Order 2020 (the Order)issued by the Central Government in terms of Section 143(11) of the Act we give in AnnexureB a statement on the matters specified in paragraphs 3 and 4 of the Order.
For SURESHKUMAR & CO.
Firm Regn No : 004273S
SURESH KUMAR B
Membership No : 028376
Place : Chennai
Date : 28th May 2022
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' section of our report to the members of M/s Galada Finance Limited of evendate.)
Report on the Internal Financial Controls over Financial Reporting under clause(i) ofSub-section 3 of Section 143 of the Companies Act 2013(the Act)
We have audited the internal financial controls over financial reporting of M/sGalada Finance Limited (the Company) as of 31st March 2022 in conjunctionwith our audit of the standalone Ind AS financial statements of the company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management are responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) and the Standards on Auditing specified under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company: and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For SURESHKUMAR & CO.
Firm Regn No : 004273S
SURESH KUMAR B
Membership No : 028376
Place : Chennai
Date : 28th May 2022
UDIN : 22028376AKBVEV7866
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the members of M/s Galada Finance Limited of evendate.)
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:
1. a. (A) The company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipments.
(B) The company has maintained proper records showing full particulars of intangibleassets.
b. The Property Plant and Equipments of the Company have been physically verified bythe management at reasonable intervals and as informed no material discrepancies werenoticed on such verification.
c. The title deeds of all the immoveable properties (other than properties where thecompany is the lessee and the lease agreements are duly executed in favor of the lessee)are held in the name of the company.
d. The company has not revalued its Property Plant and Equipments or intangible assetsduring the year.
e. No proceedings have been initiated or are pending against the company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder.
2. a. The Company does not have any inventory and hence reporting under clause 3(ii)(a)of the Order is not applicable.
b. The company has not been sanctioned working capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets and hence reporting under clause 3(ii)(b) of the Order is not applicable.
(a) The Company's principal business is to give loans. Hence the provisions inparagraph 3(iii)(a) of the Order are not applicable to the Company.
(b) The investments made guarantees provided security given and the terms andconditions of the grant of all loans and advances in the nature of loans and guaranteesprovided are not prejudicial to the company's interest.
(c) In respect of loans and advances in the nature of loans the schedule of repaymentof principal and payment of interest has been stipulated by the company. The repayments orreceipts are regular. Considering that the Company is a Non-Banking Financial Companyengaged in the business of granting loans the instances where there are delays ordefaults in repayment of principal and/ or interest and in respect of which the Companyhas recognized necessary provisions in accordance with the principles of Indian AccountingStandards (Ind AS) and the guidelines issued by the Reserve Bank of India(RBI) for Income Recognition and Asset Classification.
(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the details of amount overdue for more thanninety days are as follows:
|No. of Cases ||Principal amount overdue (in Lakhs) ||Interest Amount Overdue (in Lakhs) ||Total Overdue (In lakhs) ||Remarks |
|98 ||124.82 Lakhs ||14.42 lakhs ||139.24 lakhs ||According to the information and explanation given to us reasonable steps have been taken by the Company for recovery of principal amount and interest. |
(e) The Company's principal business is to give loans. Hence the provisions stated inparagraph 3(iii)(e) of the Order are not applicable to the Company.
(f) The company has not granted any loans or advances in the nature of loans eitherrepayable on demand or without specifying any terms or period of repayment during theyear. No loans were granted to the promoters during the year.
3. The Company has complied with the provisions of Section 185 and 186 of the CompaniesAct 2013 in respect of loans investments guarantees and securities.
4. The company has not accepted deposits or amounts which are deemed to be depositsduring the year which are in compliance with the directives issued by the Reserve Bank ofIndia and the provisions of section 73 to 76 of the Companies Act 2013 and the rulesframed there under.
5. The Central Government has not prescribed the maintenance of cost records undersubsection (1) of Section 148 of the Companies Act 2013 in respect of the activitiescarried on by the company.
6. (a) The company is regular in depositing undisputed statutory dues including Goodsand Service Tax Provident Fund Employee's State Insurance income-tax sales-taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues to the appropriate authorities.
According to the information and explanation given to us no undisputed amounts payablein respect of Goods and Service Tax Provident Fund Employee's State Insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand any other statutory dues were outstanding as on the last day of the financial yearfor a period of more than six months from the date they became payable.
(b) There are no dues of Goods and Service Tax Income Tax Provident Fund Employee'sState Insurance sales-tax service tax duty of customs duty of excise value added taxcess and any other statutory dues outstanding on account of any disputes.
7. There were no transactions relating to previously unrecorded income that have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961).
8. a. The company has not defaulted in repayment of loans or other borrowings or in thepayment of interest thereon to any lenders.
b. The company has not been declared a willful defaulter by any bank or financialinstitution or other lender.
c. The Company has not taken any term loan during the year and hence reporting underclause 3(ix)(c) of the Order is not applicable.
d. No funds raised on short term basis have been utilized for long term purposes.
e. The company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.
f. The company has not raised any loans during the year on the pledge of securitiesheld in its subsidiaries joint ventures or associate companies.
9. a. The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.
b. The company has not made any preferential allotment or private placement of sharesor convertible debentures (fully partially or optionally convertible) during the year.
10. a. According to the information and explanations given to us no material fraud bythe company or on the company has been noticed or reported during the year.
b. No report under sub-section (12) of section 143 of the Companies Act has been filedby the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government.
c. We have taken into consideration the whistle blower complaints received by theCompany during the year while determining the nature timing and extent of our auditprocedures.
11. The Company is not a Nidhi company. Accordingly Paragraph 3 (xii) of the Order isnot applicable to the Company.
12. According to the information and explanations given to us and based on ourexamination of the record of the company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.
13. a. The company has an internal audit system commensurate with the size and natureof its business.
b. We have considered the reports of the Internal Auditors for the period under auditin determining the nature timing and extent of our audit procedures.
14. The Company has not entered into any non-cash transactions with its directors orpersons connected with its directors.
15. a. The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934 as Non-Banking Institution as a Deposit takingSystemically Important (NBFC-ND-SI) Company.
b. In our opinion and according to the information and explanations given to us theCompany has obtained Certificate of Registration from RBI for conducting activitiesrelating to Non-banking financing activities.
c. The company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the provisions stated in paragraph3(xvi)(c) of the Order are not applicable to the Company.
d. The Group does not have any CIC as part of the Group.
16. The company has incurred cash loss of Rs. 17.79 Lakhs during the financial year andhas not incurred any cash loss during the immediately preceding financial year.
17. There has been no resignation of the statutory auditors of the Company during theyear.
18. On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements our knowledge of the Board of Directors and management plans we areof the opinion that no material uncertainty exists as on the date of the audit report thatcompany is capable of meeting its liabilities existing at the date of balance sheet as andwhen they fall due within a period of one year from the balance sheet date. We howeverstate that this is not an assurance as to the future viability of the Company. We furtherstate that our reporting is based on the facts up to the date of the audit report and weneither give any guarantee nor any assurance that all liabilities falling due within aperiod of one year from the balance sheet date will get discharged by the Company as andwhen they fall due.
19. a. There are no unspent amounts towards Corporate Social Responsibility (CSR)other than with respect to the ongoing projects requiring a transfer to a Fund specifiedin Schedule VII to the Companies Act in compliance with second proviso to sub-section (5)of Section 135 of the said Act.
b. There were no amounts remaining unspent under sub-section (5) of section 135 of theCompanies Act pursuant to any ongoing projects.
20. The company is not required to prepare consolidated financial statement. Thereforethe provisions of Clause (xxi) of paragraph 3 of the order are not applicable to theCompany.
For SURESHKUMAR & CO.
Firm Regn No : 004273S
SURESH KUMAR B
Membership No : 028376
Place : Chennai
Date : 28th May 2022
UDIN : 22028376AKBVEV7866