Galada Finance Ltd Management Discussions

The Management has taken up detailed discussion of the risk factors related to our Company in specific andindustry in general and attempts to lay down the impact of the same on the companys performance. Please findreproduced hereunder a summary of Managements Disc

1. The growth rate of NBFCs largely builds upon the ability to develop brand name for its financial products which compete the Industry.

We believe that promoting and positioning our brand is necessary for achieving recognition of our services. Brand promotion activities may not yield increased revenues and even if they do, increased revenues may not offset the expenses we incur in brand building. If we fail to promote our brand, our business, financial condition and result of operation could be affected

2. Our business is vulnerable to interest rate risk. Changes in interest rate may affect our income from operation and adversely affect our financial performance and profitability.

In our NBFC business, we are exposed to the risk of higher interest rates. If the yield on our Companys interest -earning assets does not increase at the same time or to the same extent as our cost of funds, or our cost of funds does not decline at the same time or to the same extent as the yield on its interest earning assets, our net interest income and net interest margin would be adversely impacted. This could have a material adverse effect on the financial performance.

3. Our Company may experience delays in enforcing the collateral when borrowers default on their obligations, which will result in failure to recover the expected value of collateral and affect our financial performance

Our Company may not be able to realize the full value of the collateral as a result of delays in bankruptcy and foreclosure proceedings, inability to foreclose, defects in the title of collateral, fraudulent transfers by borrowers and other factors which includes legislative changes and judicial pronouncements. The inability to recover the expected value of collateral could expose our Company to losses, which will have impact on business and financial performance

4. If our company fails attract and retain key employees, our operation could be affected.

The Company believes that human resource is most important element for success of any organization. The company takes every step to promote feeling of belongingness among its employees and maintains a separate Human Resource department to care of concerns and well being of employees. The staffturnover in the company is considerably less as compared to the industry. In any case, skilled and/ortrained manpower is available in the market. It has a strong Culture & Corporate Core Values

5. The changes in the regulations that govern our Company could cause the business to suffer

NBFCs in India are regulated by the RBI. Any changes in the regulatory framework will affect the profitability of our business and our future financial performance

6. We may require additional funds to satisfy our capital needs, which we may not able to procure.

We may need to raise additional capital from time to time, which we may not able to procure. The Company may not be able to raise adequate funds on attractive terms and conditions, which could havean adverse effect on our results of operations

7. Our business is dependent on the financial performance of the market and financial policy of the Government; it also depends upon the RBI point of view of the interest rates for public and business class at large.

8. Our business is subject to regulation by several authorities, which could have an adverse effect on our business and our results of operations. We are outsourcing entire Financial and Corporate Advisory. We are being in the field of professional services unable to market our products in an aggressive fashion.