Rajath Finance Ltd

To,

The Members,

Rajath Finance Limited,

Your Directors are pleased to present their 36^th Annual Report for the financial year ended on 31^st March, 2021.

FINANCIAL RESULTS:

Your Company's performance for the year ended on 31^st March, 2021, is summarized as under:

(Amt. in Rs.)

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK :

During the year under review, your Company's revenue from operation has decreased from Rs. 42,00,910/- for previous F.Y. 2019-20 to Rs. 37,46,214/- in reporting year. Due to consistent efforts of the management, Employee benefit expenses and other expenses of the company decreased during the year under report as compared to previous financial year 2019-20. Other expenses of the company have been decreased due to decrease in travelling expenses of the company to the major extent during the reporting year. Employee benefit expenses and other expenses of the company is Rs. 6,19,307/- and Rs. 23,79,890 respectively, as compared to Financial year 2019-20 was Rs. 6,68,154/- and Rs. 42,80,584 respectively. Further, during the year under report company has reported net profit of Rs. 1,73,737/- as compared to loss of Rs. 7,69,800 during the previous financial year. Management has been trying to improve the performance of the Company.

DECLARATION OF DIVIDEND & TRANSFER OF AMOUNT TO RESERVES:

In order to conserve resources for operational purposes, your Directors do not recommend any dividend.

Further, no amount has been transferred to general reserves in the Financial Year 2020-21.

SHARE CAPITAL:

The paid-up Equity Share Capital of the company as on March 31, 2021 was Rs. 4,00,00,000 divided into 40,00,000 equity shares of Rs. 10/- each. During the year under Report, the Company has not issued any shares or any convertible instruments.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 134 (3) (a) of Companies Act, 2013, Form MGT 9 [as specified in Section 92(3) read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014] the extract of Annual Return for the Financial Year 2020-21 is enclosed with this report as Annexure-I.

The Extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act shall be hosted on the website of the company viz. http:// rajathfinance.in/annual-report-36th

BOARD MEETINGS AND INDEPENDENT DIRECTOR'S MEETING:

The Board of Directors of the Company respectively met seven times on 28/05/2020, 30/07/2020, 02/09/2020, 30/09/2020, 31/10/2020, 26/11/2020 and 11/02/2021 during the financial year 2020-21.

Further, the Independent Directors meeting was held on 11/02/2021 to review the performance of non-independent directors and the Board as a whole, taking into account the views of executive directors and non-executive directors and assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

BOARD'S RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, the Directors based on the information and representations received from the operating management confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from the same;

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

c) the directors have taken proper and sufficient care to the best of their knowledge and ability 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 have prepared the annual accounts on a going concern basis; and

e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

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

DECLARATION (OF INDEPENDENCE) BY INDEPENDENT DIRECTORS:

The Company has received declarations from each Independent Director under section 149 (7) of the Companies Act, 2013 that he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013.

The Company has the practice to take the declaration of independence from all Independent Directors on his appointment/ re-appointment and also in first meeting of the Board of Directors every year. All these Directors are abiding to intimate to the Board about any change in their status of independence in the very next board meeting after such change.

RATIO OF REMUNARATION OF EACH DIRECTOR TO THE MEDIAN REMUNARATION OF THE EMPLOYEES OF THE COMPANY FOR THE FINANCIAL YEAR 2019-20:

The information required pursuant to section 197 (12) read with Rule 5 (1) (i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of ratio of remuneration of each director to the median remuneration of the employee of the Company for the financial year 2020-21 will be made available for inspection at its registered office of the Company during the working hours for a period of twenty one days before the date of Annual General Meeting of the company pursuant to Section 136 of the Companies Act, 2013 and members, if any interested in obtaining the details thereof, shall make specific request to the officer of the Company in this regard.

COMPANY'S POLICY ON DIRECTORS APPOINTMENT, NOMINATION, REMUNERATION AND FORMAL EVALUATION:

Pursuant to provisions of Section 178 (1) of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection, nomination, appointment and remuneration of Directors suitably containing the criteria determining qualifications, positive attributes and independence of a Director.

FORMAL ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Shareholders Grievance committee.

STATUTORY AUDITOR AND AUDITORS' REPORT:

Members are already aware that company has appointed M/S. A. D. Vyas & Co., Chartered Accountants and a peer reviewed firm [FRN 113588W] as a statutory auditor of the company, in the annual general meeting held in the year 2019 (for the financial year 2018-19) to hold office till the conclusion of Annual General Meeting to be held in the year 2024 (for financial year 2023-24).

The Auditors' Report does not contain any qualification, reservation or adverse remark AND the Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not require any further comment thereon.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

The Board has appointed CS Nayna Pratik Lunker, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021 is annexed herewith as Annexure II.

• Observation by Secretarial Auditor

1. The Secretarial Auditor has pointed out that the Board has not appointed new Independent Directors after expiry of terms of existing Independent Directors.

Reply by Board of Directors: Board of Directors of the Company assures for appointment of new Independent Directors at the earliest.

2. The Secretarial Auditor has observed about the non-appointment of Chief Financial Officer, Company Secretary and Internal Auditor in the Company and as a result of nonappointment of required Key Managerial Personnel Company fails to comply Rule 25A of Companies (Incorporation) Rules, 2014 and as on 31^st March, 2021 the Company's status was 'Active Non-Compliant', as it had not filed Form 22A with the Registrar.

Reply by Board of Directors: The delay in the appointments has been occurred due to weak financial position of the Company. However, the management is assuring that the Company will soon proceed for the appointment of the required KMPs in terms of the provisions of the Companies Act, 2013. The Company had already appointed Wholetime Company Secretary w.e.f 08^th April, 2021.

3. The Secretarial Auditor has reported that some compliance under applicable regulations of LoDR have been submitted to the BSE after due date and Stock exchange had levied the fine for such delay in compliance as well as for nonappointment of Company Secretary in terms of Regulation 6(1) of SEBI (LODR) Regulations, 2015.

Reply by Board of Directors: Company had paid fine levied by the Stock Exchange for the delayed compliance of Regulation 6(1) of the SEBI (LODR), 2015. Further, in compliance of Regulation 6(1), company had appointed whole-time Company Secretary w.e.f 08^th April, 2021. Company has also applied for the waiver of fine levied by the Stock Exchange and pending for reply from the Stock Exchange. The Board of Directors of the Company ensures for the timely compliances of applicable SEBI Regulations in the future.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS MADE:

During the year under report, the Company has not granted any loan or provided any guarantee or made any investment exceeding the limits as specified in Section 186 (2) of the Companies Act, 2013. Hence no approval from the shareholders in this regard was required.

PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES:

The Company has not entered into any contract or arrangement with related party which was not at arms' length requiring approval of shareholders in the general meeting as required under section 188 of the Companies Act, 2013. The Audit Committee reviews all the transactions with related party on quarterly basis and recommends the same to the Board for their approval. The details regarding of contracts/arrangement with related parties are disclosed in the AOC-2 is attached herewith as Annexure-III

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, every company with a net worth of Rs. 500 Crores or more OR an annual turnover of Rs.1000 Crores or more OR with a net profit of Rs. 5 Crores or more, during immediately preceding financial year is required to constitute a CSR Committee. At present, the Company is not required to constitute a CSR Committee in this regards as none of the above referred limits have been triggered.

BOARD OF DIRECTORS:

During the year under review there was no change in the composition of the Board of Directors of the Company.

In terms of Section 152 (6) of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Bhavdeep V. Vala, Director (DIN: 00153775) retires by rotation and being eligible, has offered himself for re-appointment. The Board recommends the same for your approval.

As on 31^st March, 2021, Composition of Board of Directors was as follows:

Company had appointed Mrs. Dea Vachhani [M. No. A26801] as a Company Secretary and Compliance Officer of the Company w.e.f 08th April, 2021.

AUDIT COMMITTEE: The Company is having an adequate Audit Committee comprising of following Directors:

Audit Committee of the company respectively met four times during the year on 28^th May, 2020, 30^th July, 2020, 31^st October, 2020 and 11^th February, 2021. During the year under report, all the recommendations of the Audit Committee were duly considered.

NOMINATION AND REMUNERATION COMMITTEE:

The Company is having an adequate Nomination and Remuneration Committee comprising of following Directors:

Nomination and Remuneration Committee of the company met once during the year under report on 28^th May, 2020. During the year under report, all the recommendations of the Committee were duly considered.

SHAREHOLDERS GRIEVANCE COMMITTEE:

The Company is having a Shareholder Grievance Committee comprising of following Directors:

Shareholders Grievance Committee of the company met once during the year under report on 31^st October, 2020. During the year under report, all the recommendations of the Committee were duly considered.

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

The Company has not taken any significant step for conservation of energy during the year under Report. However, your Company has been increasingly using information technology in its operations and promotes conservation of resources. Further, during the year under review, there was no foreign earning or expenditure in the Company.

PARTICULARS OF EMPLOYEES:

There are no employees in the Company drawing remuneration of more than Rs. 8,50,000/- per month or Rs.1,02,00,000/- per annum, as prescribed in Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE :

Provisions relating to Corporate Governance as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to our company. However, company has filed with stock exchange certificate regarding non-applicability of Corporate Governance requirements from a Practising Company Secretary for every quarter during the year under report. However, in pursuance of applicable provisions of the Companies Act, 2013, the Company has constituted the Audit Committee, Stakeholder Grievances Committee, and Nomination & Remuneration Committee.

SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES:

As on 31^st March, 2021, the Company doesn't have any Subsidiary, Joint Venture or Associate Companies.

INTERNAL FINANCIAL CONTROLS:

The Company has adequate internal financial controls with reference to financial statements. During the year under report, no reportable material weakness was observed.

VIGIL MECHANISM:

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report their genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.rajathfinance.com

PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:

The company has in place a policy for prevention, prohibition and redressal of Sexual Harassment at workplace. Appropriate mechanisms are in place for protection against sexual harassment and right to work with dignity.

During the year under review, the company has not received any complaints regarding this matter and there were no suits filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

OTHER DISCLOSURES :

• Your Company has not invited/ accepted any Deposits under the provisions of Section 73 of the Companies Act, 2013 and the Rules made there under.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

• There have been no instances of any revision in the Board's Report or the financial statement, hence disclosure under Section 131(1) of the Act.

• The Company has not paid any commission to any of its Directors and hence, provision of disclosure of commission paid to any Director as mentioned in Section 197(14) is not applicable.

• The Company has not issued any shares to any employee, under any specific scheme, and hence, disclosures under Section 67(3) are not required to be made.

• No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

• The Company is not required to get its cost records audited for the financial year 2020-21. ACKNOWLEDGEMENT :

Your directors put on record their whole hearted gratitude to bankers, employees of the Company for their sincere efforts for the Company.