1.2.18 Provisions, Contingent liabilities, Contingent assets and Commitments:

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liability is disclosed in the case of:

1. A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

2. A present obligation arising from the past events, when no reliable estimate is possible;

3. A possible obligation arising from the past events, unless the probability of outflow of resources is remote.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

1.2.19 Earnings per share

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

1.2.20 Use of estimates and judgments

The presentation of the financial statements are in conformity with the Ind AS which requires the management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management’s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The following are significant management judgments in applying the accounting policies of the Company that have a significant effect on the financial statements.

Recognition of deferred tax assets The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company’s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

Classification of assets and liabilities into current and non-current

The management classifies the assets and liabilities into current and non-current categories based on the operating cycle of the respective business / projects.

Impairment of assets

In assessing impairment, management estimates the recoverable amounts of each asset or CGU (in case of non-financial assets) based on expected future cash flows and uses an estimated interest rate to discount them. Estimation relates to assumptions about future cash flows and the determination of a suitable discount rate.

Useful lives of depreciable / amortisable assets (Property, plant and equipment, intangible assets and investment property)

Management reviews its estimate of the useful lives of depreciable / amortisable assets at each reporting date, based on the expected usage of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the usage of certain assets.

Defined benefit obligation (DBO)

The cost of defined benefit gratuity plan and the present value of the gratuity obligation along with leave salary are determined using actuarial valuations. An actuarial valuation involves making various assumptions such as standard rates of inflation, mortality, discount rate, attrition rates and anticipation of future salary increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Share based payments

Estimating fair value for share based payment requires determination of the most appropriate valuation model. The estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them.

Fair value measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument /assets. Management bases its assumptions on observable data as far as possible but this may not always be available. In that case management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

1.2.21 Statement of cash flows

Cash flow are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals of accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and finance activities of the Company are segregated.

1.2.22 Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that

the transaction to sell the asset or transfer the liability takes place either:

1. In the principal market for the asset or liability, or

2. In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

1. Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or Liabilities.

2. Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

3. Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

External valuers are involved for valuation of significant assets, such as unquoted financial assets. Involvement of external valuers is decided upon annually by the Valuation Committee after discussion with and approval by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. Valuers are normally rotated every three years. The management decides, after discussions with the Company’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company’s accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation.

The management, in conjunction with the Company’s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

d Terms / Rights attached to each classes of shares

Terms / Rights attached to Equity shares

The Company has only one class of equity shares with voting rights having a par value of Re 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend.

The Board of Directors, have recommended a Dividend for the financial year ended on 31/03/2024 @ 10% (i.e. ' 1/-) per equity share (Previous Year - ' 1/-) to the equity shareholders. The Dividend will be paid after the approval of shareholders at ensuing Annual General Meeting. The date of book closure/ record date for the entitlement of such dividend and Annual General Meeting shall be decided and informed in due course of time.

I n the event of liquidation of the Company, the shareholders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Description of the nature and purpose of each reserve within equity is as follows:

a) Capital reserve: Capital Reserves are mainly the reserves created during business combination for the gain on bargain purchase.

b) Securities Premium Reserve: Securities premium reserve is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs, etc.

c) Share Based Payment Reserve: This reserve is created by debiting the statement of profit and loss account with the value of share options granted to the employees by the Company. Once shares are issued by the Company, the amount in this reserve will be transferred to Share capital, Securities premium or retained earnings

d) Retained earnings: Retained earnings represents undistributed profits of the company

e) Other comprehensive income:

(i) The company has elected to recognise changes in the fair value of investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI equity investments within equity.

(ii) Remeasurements of defined benefit liability comprises of actuarial gains and losses.

NOTE: 32 EARNINGS PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

(ii) Defined Benefit Plan:

A) The Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees. The scheme provides for payment as under:

i) On normal retirement / early retirement / withdrawal / resignation:

As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On death in service:

As per the provisions of the Payment of Gratuity Act, 1972 without any vesting period.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31, 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date:

c) Adoption of Ind AS 116

The Company has adopted Ind AS 116, effective annual reporting period beginning from April 1, 2019 using the modified retrospective method with the cumulative effect of initially applying the Standard, recognised on the date of initial application (April 1, 2019).

On transition, the Company carried out a test of lease liability measured at the present value of the remaining lease payments. Based on the analysis of the management, the board is of the opinion that there is no significant impact of the application of provision on the financial statements of the company, considering the nature, amount and tenure of the lease agreements. Hence no recognition of the Right of use assets and corresponding Lease liabilities and provision for Interest cost on lease liabilities and Depreciation on right of use assets are made by the company. Lease rentals paid by the company are recognised under the head "Other Expenses” under Note No 30 in the notes to the financial statements and Security Deposits are recognised as ""Other Non-Current Financial Assets”” under Note No 5 in the notes to the financial statements.

NOTE: 36 FAIR VALUE DISCLOSURES

1. Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values (Key inputs for valuation techniques) :

1. Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on Stock Exchange (Level 1)

2. Forward contracts : Forward exchange rate is taken from Foreign Exchange Dealers Association of India (FEDAI) (Level 1)

3. Valuation techniques and significant unobservable inputs: Not applicable (Level 3)

Transfers between Levels 1 and 2

There were no transfer from Level 1 to Level 2 or vice versa in any of the reporting periods.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

Credit risk ;

Liquidity risk ; and Market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

The Company does not have higher concentration of credit risks to a single customer.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Board of Directors has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed half yearly. Any sales exceeding those limits require approval from the Board of Directors.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics as follow:

Receivable from Exchange (Unsecured) : There are no historical loss incurred in respect of Receivable from exchange. Entire exposure/receivable as at each reporting period is received and settled within 7 days from reporting period. Therefore, no ECL is recognised in respect of receivable from exchange.

Receivable from Brokerage and depository : Company has large number of customer base with shared credit risk characteristics. As per policy of the Company, trade receivable to the extent not covered by collateral (i.e. unsecured trade receivable) is considered as default and are fully written off as bad debt against respective trade receivables and the amount of loss is recognised in the Statement of Profit and Loss. Subsequent recoveries of amounts previously written off are credited to the income statement as bad debts recovered. Trade receivable of the company are of short duration with credit period ranging up to maximum 30 days. In case of delay in collection, the Company has right to charges interest (commonly referred as delayed payment charges) on overdue amount for the overdue period. However, in case of receivable from depository, the Company doesn’t have right to charge interest. Though credit period given to customer in respect of receivable from depository is very short, generally there is significant delay in ultimate collection. The Company has computed expected credit loss due to significant delay in collection. Incremental borrowing rate is considered as effective interest rate on these trade receivable for the purpose of computing time value loss.

Receivables from margin trading facility : In accordance with Ind AS 109, the Company applies expected credit loss model (ECL) for measurement and recognition of impairment loss. The expected credit loss is a product of exposure at default (EAD), probability of default (PD) and Loss given default (LGD). The financial assets have been segmented into three stages based on the risk profiles, primarily based on past due. Company has large number of customer base with shared credit risk characteristics. Receivables against margin trading facilities are secured by collaterals. As per policy of the Company, Receivables against Margin trade facilities to the extent not covered by collateral (i.e. unsecured portion) is considered as default and are fully written off as bad debt against respective loan receivables and the

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk and interest rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

Currency risk

The Company is not exposed to any currency risk on account of its borrowings, other payables and receivables in foreign currency. All dealings are done in domestic markets by the company. The functional currency of the Company is Indian Rupee.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing finacial instruments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing financial instruments will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

Company’s interest rate risk arises from borrowings and fixed income financial instruments. Borrowings issued at fixed rates exposes to fair value interest rate risk. The interest rate profile of the Company’s interest-bearing financial instruments as reported to the management of the Company is as follows.

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable-rate instruments

The company does not have any financial assets or financial liabilities bearing floating interest rates. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

NOTE : 37 CAPITAL MANAGEMENT

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total borrowings, comprising interest-bearing loans and borrowings less cash and cash equivalents. Adjusted equity comprises all components of equity.

NOTE: 38 RELATED PARTY RELATIONSHIPS, TRANSACTIONS AND BALANCES A Nature of relationship

I Subsidiary Companies

1 Monarch Networth Finserve Private Limited

2 Monarch Networth Investment Advisors Private Limited

3 Monarch Networth Capital IFSC Pvt Ltd

4 Monarch Networth Money Changers Private Limited (ceased to be a subsidiary w.e.f quarter ended 30^th September 2023)

II Associate Companies

1 Networth Financial Services Ltd (ceased to be an associate w.e.f quarter ended 30^th September 2023)

III Enterprises overwhich Directors / Promotor / KMP and their relatives exercise significant influence

1 Premjayanti Properties

2 Monarch Infra Ventures

3 Krone Investments

4 Vibrant Investments

5 Mahaveer Equibiz

6 Monarch Comtrade Private Limited

The company has taken suitable legal action for recovering deposits of ' 40 lakhs (previous year ' 40 lakhs) for premises at Bangalore and ' 300 lakhs (previous year ' 300 lakhs) for premises at Nariman Point- Mumbai. The management expects favorable order for the same, hence no provisions have been made thereof.

NOTE : 41

The company has taken suitable legal action for recovering debts of ' 239 lakhs (previous year ' 239 lakhs) for fraudulent transaction done by client in the year 2008-09. SEBI has passed the interim order withholding the payout which is kept with Bombay Stock Exchange till completion of investigation. The management expects favorable order for the same, hence no provisions have been made thereof.

NOTE : 43

The Company has an informal process of obtaining confirmations from the vendors to record whether they are covered under Micro, Small and Medium Enterprise Development Act 2006 as well as they have filed required memorandum with prescribed authority. Based on and to the extent of the information received by the Company from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and relied upon by the auditors, the relevant particulars as at the year end are furnished below:

NOTE : 48

The Company has carried out Impairment test on its Fixed Assets as on the date of Balance Sheet and the management is of the opinion that there is no asset for which provision of impairment is required to be made as per applicable Indian Accounting Standard.

NOTE : 49

Balance of Receivables and Payables, including Trade Receivables, loans, deposits & advances given as well as taken, payable to vendors, etc, are subject to confirmation and consequent reconciliation and adjustments, if any. Hence, the effect thereof, on Profit/ Loss, Assets and Liabilities, if any, is not ascertainable, which may be considerable. As per the opinion of the Board, there will be no substantial impact on their reconciliation with their balance confirmations as on the reporting date.

NOTE : 50

All Property, Plant and Equipment were physically verified by the management of the of the company in accordance with a planned program of verifying them once in three years. As per the opinion of the Board, there will be no substantial impact on their reconciliation with their physical verification as on the reporting date.

NOTE :51

In the opinion of the board, the current assets, loans and advances are approximately of the value state, if realized in ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE : 52

Events Occurring After the Balance Sheet Date

To the best of knowledge of the management, there are no events occurring after the Balance Sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance Sheet Date that requires adjustment to the Assets or Liabilities of the Company.

The Company provides for the use by its subsidiaries certain facilities like use of premises infrastructure and other facilities / services and the same are termed as ‘Shared Services’. The cost of such Shared Services are recovered from subsidiaries either on actual basis or on reasonable management estimates which are constantly refined in the light of additional knowledge gained relevant to such estimation.

NOTE: 56

Corporate social responsibility

Pursuant to the application of Section 135 of the Act and the Rules framed thereunder, the Company has constituted the CSR committee during the year. The company is required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years as per the activities which are specified in Schedule VII of the Act and the Company has decided to spend the amount by way of contribution to a Trust . The disclosure as required by the Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities issued by the Institute of Chartered Accounts of India are as follows:

NOTE : 57

Employee Stock Option Plan

The Monarch Networth Capital Limited Employees Stock Options Scheme - 2021 was approved by the Board of Directors and Shareholders of the Company on June 18, 2021 and July 20, 2021 respectively. The Scheme is implemented through a trust route in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI Regulations”) with an objective to motivate, retain and provide additional deferred rewards to the employees who contribute to the growth and profitability of the company and further to create a sense of ownership and participation amongst the employees to share the value they create for the company in the years to come.

Accordingly during the year 2022-23, 5,00,000 ESOPs equivalent to equal number of Equity Shares were offered and granted to eligible employees under the said scheme, presently 4,69,000 ESOPs are outstanding under the scheme . Details of the same are given below:

NOTE : 61

Revenue From Contract With Customers

The Company derives revenue primarily from the Share Broking Business. Its other major revenue sources are

Portfolio Management Services and Interest Income

Disaggregate revenue information

1. The table below presents disaggregate revenues from contracts with customers for the year ended March 31, 2024 and March 31, 2023. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by market and other economic factors.

Nature of Services

(a) Stock Broking services - Income from services rendered as a broker is recognised upon rendering of the services, in accordance with the terms of contract. This includes Brokerage, Demat Services, Late Payment Charges income & Interest Income from Margin Funding

(b) Other operating revenues - This includes revenue generated from Merchant Banking services, Financial Products Distribution, Financial Advisory Services, etc incurred by the company in the normal course of operations during the year.

3. Nature, Timing of satisfaction of the performance obligation on and significant payment terms.

(i) Income from services rendered as a broker is recognised upon rendering of the services.

(ii) Fees for subscription on based services are received periodically but are recognised as earned on a prorata basis over the term of the contract.

(iii) Commissions from distribution of financial products are recognised upon allotment of the securities to the applicant or as the case may be, on issue of the insurance policy to the applicant.

(iv) I nterest is earned on delayed payments from clients and amounts funded to them as well as term deposits with banks.

(v) Interest income is recognised on a time proportion basis taking into account the amount outstanding from customers or on the financial instrument and the rate applicable.

(vi) Income from services rendered on behalf of depository is recognised upon rendering of the services, in accordance with the terms of contract.

The above services are point in time in nature, and no performance obligation remains once the transaction is executed. Fees for subscription on based services are received periodically but are recognised as earned on a pro-rata basis over the term of the contract, and are over the period in nature.

NOTE : 63

Monarch Alternative Investment Fund

A. MNCL Capital Compounder Funds

Monarch Networth Capital Ltd, being the Investment Manager and Sponsor of Monarch AIF (Alternative Investment Fund) - Category III, a SEBI registered fund as defined under Securities Exchange Board of India (Alternative Investment Funds) Regulations, 2012, has invested a sum of ' 5 Crores in a scheme of Monarch AIF i.e. MNCL CAPITAL COMPOUNDER FUND (‘the Fund’) for a period of 3 years (which can be extended by upto 2 years). MNCL CAPITAL COMPOUNDER FUND is a Category 3 long only AIF Equity fund which is launched by Monarch AIF.

Key Features of the fund are as follows:

- | MNCL Capital Compounder Fund’ is a close ended scheme of the Trust and is offering through a

private placement Class A Units, Class B Units, Class C Units and such other Class(es) /Subclass(es) of Units as the Investment Manager may decide from time to time for subscription aggregating to ' 100,00,00,000 (Indian Rupees One Hundred Crores) with a green shoe option of up to ' 50,00,00,000 (Indian Rupees Fifty Crores). The Fund is a scheme of an Indian trust set-up under the Indian Trusts Act, 1882 and is registered with SEBI as a Category III AIF under the Regulations and would be operated in compliance with other Applicable Laws.

- Sponsor’s Contribution by MNCL : As per the terms of The Sponsor/Investment Manager shall commit an amount equivalent to 5% (five percent) of the Corpus or ' 10,00,00,000 (Rupees Ten Crore), whichever is lower, and shall maintain a continuing interest in the Fund in accordance with the Regulations.

- ‘ Beacon Trusteeship Limited’ shall act as the Trustee to the Trust. The Trustee shall have all powers in respect of the property of the Trust, including power to manage the same, which would be delegated to the Investment Manager in terms of the Investment Management Agreement. The Trustee shall not interfere with the actions of the Investment Manager so long as the actions are within the powers of the Investment Manager.

- Commitment Period : The Commitment Period for the Fund shall commence from the date of execution of Contribution Agreement on 28-09-2020 and shall end on the expiry of 3 (three) months from the Final Closing that may be extended for a further period up to 3 (three) months by the Investment Manager. During which the Capital Commitments can be drawn down upon issuance of a Drawdown Notice to the Contributors.

- Lock-in Period : Lock-in Period means the period commencing from the date of signing of the respective Contribution Agreement till the expiry of 18 (eighteen) months from the date of last Drawdown or the date of Final Closing, whichever is later. To clarify, no exit of any Units shall be allowed during the Lock-in Period, except at the discretion of the Investment Manager.

- Management Fee : Pursuant to the Investment Management Agreement, the Investment Manager will be entitled to receive Management Fee, that will accrue and commence from the date of First Closing and shall be chargeable on annual basis in arrears in respect of Class A Units and Class C Units. The Management Fee shall be charged up to 0.5% (zero point five percent) p.a. on the NAV (calculated at the beginning of each year) of Class A Units and Class C Units. No Management Fee shall be payable with respect to the holders of Class B Units. The Revenue from Management Fees is disclosed under "Note: 20 : Revenue from operations”.

- Performance Fee : The Investment Manager will establish and maintain an account for the Fund. The Fund’s account will contain separate capital accounts (each a "Capital Account”) in order to separately track the Net Asset Value of each Contributor’s Units in the Fund. The Investment Manager shall charge performance fee ("Performance Fee”) based on the performance of each Capital Account at the rate of 15% (fifteen percent) p.a. of all the profits after deducting Fund Expenses (except Performance Fee), reserves, provisions/withholdings, (in case the profits are higher than the Hurdle Rate of Return) from the holders of Class A Units and Class C Units, on annual basis at the end of financial year or shorter period in certain circumstances as listed out in the Contribution Agreements viz. in case of exit etc. The Performance Fee shall be charged at the end of each year on an annual basis. The Revenue from performance Fees is disclosed under "Note: 20 : Revenue from operations”.

- Hurdle Rate of Return : The hurdle rate of return shall be the compounded rate of return of an INR based calculation of 10% (pre-Tax) on an annualized basis.

- Set-up Cost : The Investment Manager will charge one-time Set-up Cost from the holders of Class A Units and Class C Units at actuals subject to a limit of up to 0.5% (zero point five percent) of the aggregate Capital Commitments by the holders of Class A Units and Class C Units. The Investment Manager may, in its discretion reduce/waive the Set-Up Cost payable by an Investor. No Set-up Cost shall be payable with respect to the holders of Class B Units.

B. MNCL Capital Compounder Fund - I

Monarch Networth Capital Ltd, being the Investment Manager and Sponsor of Monarch AIF (Alternative Investment Fund) - Category III, a SEBI registered fund as defined under Securities Exchange Board of India (Alternative Investment Funds) Regulations, 2012, has invested a sum of ' 10 Crores in a scheme of Monarch AIF i.e. MNCL CAPITAL COMPOUNDER FUND - I (‘the Fund’) for a period of 3 years (which can be extended by upto 2 years). MNCL CAPITAL COMPOUNDER FUND - I is a Category 3 long only AIF Equity fund which is launched by Monarch AIF.

Key Features of the fund are as follows:

- ‘ MNCL Capital Compounder Fund - I’ is the second close ended scheme of the Trust and is offering through a private placement Class A Units, Class B Units, Class C Units and such other Class(es) / Subclass(es) of Units as the Investment Manager may decide from time to time for subscription aggregating to ' 250,00,00,000 (Indian Rupees Two Hundred Fifty Crores) with a green shoe option of up to ' 2,00,00,00,000 (Indian Rupees Two Hundred Crores). The Fund is a scheme of an Indian trust set-up under the Indian Trusts Act, 1882 and is registered with SEBI as a Category III AIF under the Regulations and would be operated in compliance with other Applicable Laws.

- Sponsor’s Contribution by MNCL : As per the terms of The Sponsor/Investment Manager shall commit an amount equivalent to 5% (five percent) of the Corpus or ' 10,00,00,000 (Rupees Ten Crore), whichever is lower, and shall maintain a continuing interest in the Fund in accordance with the Regulations.

- ‘ Beacon Trusteeship Limited’ shall act as the Trustee to the Trust. The Trustee shall have all powers in respect of the property of the Trust, including power to manage the same, which would be delegated to the Investment Manager in terms of the Investment Management Agreement. The Trustee shall not interfere with the actions of the Investment Manager so long as the actions are within the powers of the Investment Management Agreement and conform to the Regulations and the objectives of the Trust and the Fund.

- Commitment Period : The First Closing of the Fund shall be held within a period of 6 (six) months from the date of receipt of confirmation from SEBI for launch of the Fund, subject to the Fund receiving Capital Commitments of at least INR 20,00,00,000 (Indian Rupees Twenty Crores) or any other higher amount as decided by the Investment Manager in accordance with the Regulations. The Investment Manager may extend the First Closing by a period of up to 3 (three) months at its sole discretion. The Investment Manager has the discretion to hold one or more Subsequent Closings. The Final Closing shall be held on or before the expiry of 12 (twelve) months from the First Closing. The Investment Manager may extend the Final Closing by up to 3 (three) months at its sole discretion, pursuant to which admission of investors as Contributors in the Fund shall stand finalised.

- Lock-in Period : Units issued to Contributors shall be locked in till the expiry of 18 (Eighteen) months from the date of allotment of Units ("Lock-in Period”). No redemptions will be allowed during the Lock-in Period.

- Management Fee : Pursuant to the Investment Management Agreement, The Management Fee shall be chargeable at the rate of upto 1% (One Percent) p.a. in respect of Class A Units and Class C Units, payable at the end of each year (or at such intervals as determined by the Investment Manager and as stated in the Contribution Agreement) on the NAV (before taking into account the Fund Expenses, Performance Fees and Tax liabilities) calculated at the start of every year on the relevant Valuation Day. No Management Fee shall be payable with respect to the holders of Class B Units. The Revenue from Management Fees is disclosed under "Note: 20 : Revenue from operations”.

- Performance Fee : The Investment Manager shall charge a Performance Fee to the holders of Class A Units and Class C Units at the rate of 15% p.a. of the incremental Pre-Tax NAV of Class A Units and Class C Units (over and above the Hurdle Rate of Return) during a Determination Period. The Performance fees will be increased by any applicable GST and other statutory charges payable thereon. This fee will be charged by the Investment Manager directly to the relevant Contributors or to the Fund. The Investment Manager, in its sole discretion, may waive or reduce the Performance Fee for a particular Contributor /Class / Subclass of Units. There shall be no Performance Fee payable with respect to Class B Units. The Revenue from performance Fees is disclosed under "Note: 20 : Revenue from operations”.

- Hurdle Rate of Return : The Hurdle Rate of Return applicable to Class A Units and Class C Units shall be 10% (ten percent) in Indian Rupee terms. The Hurdle Rate of Return shall not be applicable with respect to holders of Class B Units.

- Set-up Cost : The Investment Manager will not charge any Set-up Cost from any unit holders.

NOTE : 64

Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

The Company do not have any benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

NOTE : 65 Wilful Defaulter

The Company is not declared as wilful defaulter by any bank or financial Institution or other lender.

NOTE : 66

Misutilisation of Bank Borrowing

In the opinion of the management of the company, to the best of its knowledge and belief, the company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.

NOTE : 67

Disclosure of transactions with struck off companies

The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

NOTE : 68

Compliance with approved Scheme(s) of Arrangements

No Scheme of Arrangements has been approved by/ pending with the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the year as well as previous year

NOTE : 69 Undisclosed Income

The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

NOTE : 70

Compliance with number of layers of companies

The compliance of number of layers of companies, prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017, are not applicable to the company.

NOTE : 71

Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the current financial year and any of the previous financial years.

NOTE : 72

Security of current assets against borrowings

Quarterly statements of current assets filed with banks and financial institutions for fund borrowed from those banks and financial institutions on the basis of security of current assets are in agreement with the books of account.

NOTE : 73

Utilisation of Borrowed funds and share premium:

(A) During the year, the company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries)

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(B) During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party(Ultimate Beneficiaries)

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries NOTE : 74

Registration of charges or satisfaction of charges with Registrar of Companies (ROC)

The Company do not have any charges or satisfaction of charges which is yet to be registered with ROC during the Financial Year, except

- During earlier years, the company has availed credit facilities from State Bank of Saurashtra, (now State Bank of India), which has been fully repaid in earlier years. However, the said charge against the Charge ID-10081290 is still disclosed as Open Charge in the records of Registrar of Companies (ROC). The management of the company is in the process of filing of satisfaction of the said charge with ROC, Although it is only a procedural requirement, since the said loan is already fully repaid. "

NOTE : 75 Ratios

Additional regulatory information required under (WB)(xvi) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in broking business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

NOTE : 79

These financial statements are presented in Indian Rupees (INR), which is also its functional currency and all values are rounded to the nearest lakhs, except when otherwise indicated. The amounts which are less than ' 0.01 Lakhs are shown as '0.00 Lakhs.

NOTE : 80

Previous year’s figures have been regrouped or reclassified wherever necessary.

As per our Report of even date For and on behalf of the Board

Monarch Networth Capital Limited CIN: L65920GJ1993PLC120014

For PAREKH SHAH & LODHA Vaibhav Shah Manju Bafna

Chartered Accountants (Managing Director) (Whole-Time Director)

(Firm Reg. No. 107487W ) Din:00572666 Din: 01459885

Amit Saklecha Gaurav Bhandari Nitesh Tanwar

(Partner) (Chief Executive Officer) (Company Secretary)

M.No. 401133 Membership No: F10181

UDIN: 24401133BKADTP3300

Place : Mumbai Place : Mumbai Place : Mumbai

Date: May 24, 2024 Date: May 24, 2024 Date: May 24, 2024