Munoth Financial Services Ltd Management Discussions

(MD &A) Industry Structure and developments:

The BSE benchmark Sensex and National Stock Exchanges Nifty 50 have given stellar returns to investors in the financial year 2023-24. The Nifty 50 index surged by 26.8% during FY24 against a decline of 8.2% during FY23. Additionally, 30-share Sensex has soared around 25% in FY24. The exemplary performance of the Indian stock market compared to the world and emerging markets over the years can be primarily attributed to Indias resilience to global geo-political and economic shocks, its solid and stable domestic macroeconomic outlook, and the strength of the domestic investor base.

Opportunities & Threats

Technological advancements and regulatory measures have fuelled a remarkable surge in retail investor participation in the capital market. Further, significant interest from domestic and global investors in the Indian stock market as an attractive investment destination and sustained IPO (initial public offering) activity placed the Indian market fifth in the world by market capitalisation in FY24..The company seeks opportunities in capital market and the volatility in the stock indices in the financial year under review represents both an opportunity as well as challenge to the company and the business is also affected by the sentiments prevailed in the stock markets and the company is empanelled with banks and insurance companies to cater to institutional broking business.

The recessionary trends visible in some parts of the globe cannot be isolated. The market participants will have to build resilience to withstand the onslaught of spillover risks and set appropriate risk appetite and risk governance systems to withstand in a highly uncertain business world.

Segment- wise product performance

The Companys business activities are all related to capital market segment and can be considered as single segment company

Concerns, Risk and outlook

Indias key challenges are selling from FIIs, a high-interest rate, elevated inflation, and slowing earnings growth and most of the issues are getting factored into the prices. If the cautiousness continues in the short-term, it can be presumed that the worst is over, limiting further price corrections though valuation moderate Markets smaller size, lesser liquidity and lack of established legal, political, business and social frame works to support securities markets are the risks associated with capital market The Indian stock markets outlook for current financial year seems promising, with a bullish market expected, growth in emerging sectors, a boost in infrastructure development, an increase in IPOs, and greater foreign investments.

Adequacy of Internal Controls:

The Company follows an extensive internal control system to ensure that prudential business policies are followed regularly in managing existing clientele and developing new business contacts. The Company ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines. The Audit committee reviews the adequacy of internal control system on regular basis

Financial Performance:

REVIEW OF BUSINESS OPERATIONS:

During the financial year 2023-24, the Companys total revenue has increased to INR 105.89 lakhs from INR 50.72 lakhs in the previous financial year.

The Company has made a profit of INR 18.90 Lakhs in the current financial year as against a loss of INR 23.12 Lakhs in the last financial year.

Stock Broking:

Income from stock broking operations has increased to INR 37.79 Lakhs from INR 30.10 Lakhs in the previous financial year.

The Company provides institutional broking business and is empanelled with public sector banksand insurance companies.

Depository participant:

As a Depository Participant the company offers facilities to both institutional and retail investors to maintain their investments in securities in electronic form. Income from Depository operations has increased to INR 5.59 Lakhs from INR 5.35 Lakhs in the previous financial year.

Merchant Banking & Portfolio Management Services:

The Company continues to provide PMS services under both discretionary and non discretionary basis.

The Companys MBD division is providing valuation services in accordance with the requirement of the various acts/statutory requirements.

Income from Merchant Banking & Portfolio advisory services has decreased to INR 5.88 Lakhs as against INR 8.50 Lakhs in the previous year.

FUTURE PROSPECTS

The company will continue to focus on Investment Banking, Portfolio Advisory services and Institutional Broking business.

Human Resource Development:

The Company has a team of able and experienced professionals and the Company considers that the main strength is its human resources, who create a climate to suit its growth and excellence.

Cautionary Statement

Statements in the Management Discussion and Analysis regarding the Companys objectives, estimates and expectations are within the scope of applicable laws and regulations. Actual performance might differ from those either expressed or implied.

Form No. MR-3 SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2024

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To, The Members,

Munoth Financial Services Limited

I/We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by MUNOTH FINANCIAL SERVICES LIMITED (hereinafter called the company). Secretarial Audit was conducted in a manner that provided me/us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my/our verification of the Company books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I/We hereby report that in my/our opinion, the company has, during the audit period covering the financial year ended on March 31, 2024 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I/we have examined the books, papers, minute books, forms and returns filed and other records maintained by (“the Company”) for the financial year ended on March 31, 2024 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (e) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (h) The Securities and Exchange Board of India (Delisting of Equity Shares) regulations, 2009; and (i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

I/we have also examined compliance with the applicable clauses of the following: (i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; I/we have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) The Listing Agreements entered into by the Company with BSE.

I/we further report that, based on the information provided by the company, its officers and authorised representatives during the conduct of audit, and also on review of quarterly compliance reports submitted by the officers, in my opinion, adequate systems and processes and control mechanism exists in the Company to monitor and ensure compliance with other applicable laws such as labour laws, etc.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. The Company has appointed secretarial auditor as per the secretarial standards issued by The Institute of Company Secretaries of India.

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Mr. Jaswant Munoth is reappointed as Managing Director of the Company for a period of two years effective from 20th June 2023 to 19th June 2025 on the terms and conditions as may be agreed up on between the Board of Directors and Mr. Jaswant Munoth.

Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

I/we further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I/we further report that during the audit period the company has not issued /carried out (i) Public/Right/Preferential issue of shares / debentures/sweat equity, etc. (ii) Redemption / buy-back of securities

(iii) Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013 (iv) Merger / amalgamation / reconstruction, etc.

(v) Foreign technical collaborations.

I further report that during the audit period, there were no other specific events/ actions in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc, having a major bearing on the Companys affairs.