Risk Management Policies of Bonanza Portfolio Ltd.

The following document describes the risk management policy followed by Bonanza. Please read it carefully as it pertains to your trading activity. The policy is applicable to all the segments of Bonanza Portfolio Limited & Bonanza Commodity Brokers Private Limited.

Background:

Bonanza Portfolio Ltd. is a registered stock broker of The National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange (BSE). All these exchanges follow online trading systems and have a settlement system of T+1 in Capital Market segment and T+1 in derivatives segment for Daily mark to market & Final settlement (including Currency Derivatives). Bonanza is using both the ODIN software (as provided by Financial Technologies Ltd.) / XTS – Software and also has inhouse developed Mobile App “Bigul” for trading in Capital Market and Derivatives segment.

Bonanza’s group companies are licensed broking entities in the Commodities market as well and are also registered/ licensed Depository Participants. Therefore, there is a need to consider the risk management issues on two fronts viz. meeting the requirements of the Regulators / Stock Exchanges on risk containment issues and setting its own operational guidelines with proper parameters to combat various risk related issues like regulatory risks, market risks, client risks, employee risks etc.

Further, the risk management processes are designed to ensure that the senior management periodically/continuously receives relevant information and is also updated on various issues, both regulatory as well as operational, required to understand and mitigate the risks.

It shall be noted that the policies and procedures envisaged in this document are subject to changes from time to time, depending upon our internal risk management framework, market conditions and external environment.

Major Functions of RMS:

• Allocating exposure to the clients’ trading account as per their funds & securities and enabling the clients to trade seamlessly within their available funds and securities.
• Monitoring of orders and trades by clients. Checking of order rejections and increasing exposure, whenever required or sought for.
• Continuously monitoring the MTM profit / loss incurred out of non-settled trades, comparing the actual margin requirements of clients and the Total Margin available for clients on a one-to-one basis and initiating remedial actions, wherever required
• Trigging the SMS alert to client's on MTM loss reaching a particular % of the total deposit of each client available with us. Decision taking with regard to squaring off positions on account of MTM loss or Margin shortfalls or any other reasons that may come across,
• Benchmarking Margin v/s Exposure of client.
• Risk management in relation to all the trading activities for Clients is handled by RMS & Surveillance Dept.

A. Client ‘Funds’ computation:

Bonanza allocates exposure limits to its clients against the “Funds” brought in by them and lying in the credit of such Client in the Books of Bonanza.

Net Funds of the Client.

The different components of the “Funds” acceptable to Bonanza for this purpose are:

• Cash deposit (i.e., by way of cheques/NEFT/RTGS/UPI etc tendered by the client in favour of Bonanza and cleared by the bank).
• Client may get the instant limit during market Hour's to pay the fund to BONANZA through payment gateway: - ATOM/Razor Pay / UPI / NEFT / RTGS with authorised Selected Banks which is available with said gateway.
• Credit balance of the clients with Bonanza

Net Deposit of the Client.

• Net Funds of the Clients, Plus
• Value of Pledge Securities after applicable haircut.

Percentage of Hair Cut to be applied on the Value of the “Securities”:

Bonanza has prescribed a policy for effecting a margin (generally referred to as the “haircut”) on various components of the “Funds” brought in by a client to avail Exposure limits as well as to meet Exchange or Market determined Margins while trading on the Derivative market segments. However, the RMS department will have the powers to impose any changes or modification, to the said percentages as per market scenario, Volumes of the scrip, market capitalization of the scrip, volatility, and keeping view of SEBI or exchange circulars/ prescriptions. Haircut will be modified from time to time by RMS Department after taking records of the scrip on the parameter mentioned below.

• If exchange haircut for a particular scrip is up to 49%, then we take an additional 10% haircut over exchange haircut
• If exchange haircut for a particular scrip is 50% to 79%, then we take an additional 15% haircut over exchange haircut
• If exchange haircut for a particular scrip is more than 79%, then we take 100% haircut for that scrip.

Further, the Deposit / Value against the Pledge securities is governed by Script wise limit assigned by SEBI / Exchanges for the client, trading member and Clearing member.

B. Exposure Limits

Cash Market segment

Clients can place orders in two products: -

• Margin / MIS
• Delivery / CNC (Cash and Carry)

Margin Trade for other than Illiquid Script’s: - While the Exchanges has different margin for each scrip based on the volatile of the scrip. However Generally, as a thumb rule, it has been decided that a client shall be granted an intraday exposure upto 4 times of the net value of his Net Deposits after the imposition of the Margins/ Haircut in securities for trading in cash segment across all exchanges for trading in the Cash markets.

Delivery Trades: - A client shall be given exposure 1 times of his Net Funds for buying in cash segment across all exchanges of the Net Fund balance in the account of the client.

Credit For Sale: - Client is allowed to purchase, Upto 100% of the value of the shares sold as delivery, the other share/s except the script's that he has sold in other words Re-purchase of the delivery share sold is not allowed. If the Client has sold pledged Share. Limit against sales sold will not be allowed.

When you sell shares from your demat account, the system gives you a default trading limit of ₹2 lacs on the same day (T Day)

Derivatives market segment (Equity, Currency and Commodities)

Clients can place orders in two products in the Derivatives segment:

• Intraday / MIS
• Carry forward / NRML

Intraday Trades: - After implementation of Peak margin guidelines, a client shall be given margin limit of only 1 times of his Net Deposit for trading in the equity derivative segments across all exchanges.

Carry-forward Trades: - Client shall be given margin limit of only 1 times of his Net Deposit for trading in the equity derivative segments across all exchanges .100 % Upfront margin (SPAN+ELM) is required from the client before placing the order.

Derivative expiry week delivery margins: -On the Derivative Expiry week Delivery margins shall be levied/Physically marking, no fresh positions in carry forward product will be allowed in the Stock's Future & options current expiry contract, clients will only be allowed to square off their existing positions.

Delivery on F&O expiry: -If there are in any net outstanding position of the future of the share along with net outstanding ITM/OTM call & puts resulting in net delivery position as delivery buy or delivery sell by the client, we will check the for delivery buy for the clear funds with us of the client and for delivery sell the delivery in hand in the DP account with the client with bonanza .If it is supported it will be permitted otherwise it will be marked as “Do not exercise”.

50-50 cash component of the margin by the client: - As per the recent regulatory guideline client should have minimum 50% cash component of his derivative margin used including peak margin. In case of any shortfall of the cash component of the margin the same shall attract interest @ .04% per day on the cash component shortfall amount.

Margin/Intraday Square-Off: -

As Currency Derivative segment are squared up after 4.45 pm & Commodity Derivative are squared up after 11.20 pm.

Further, the RMS department also has the discretion to reduce / change the exposure in any or all of the segments for a particular client, or any segment or all segments as a whole, with or without any prior information in extra ordinary situations.

C. Demat Securities in Bonanza’s Beneficiary A/c of each Client:

• With POA in favour of Bonanza and
• Without POA / DDPI

a) Clients With POA/DDPI in favour of BONANZA- Bonanza shall do the EPI/PAYIN of the shares sold by the clients whose POA/DDPI of the bonanza.

b) Clients without POA/DDPI With EDIS Registration: - Bonanza Provides the facility of linking such client of their Demat A/C (Both in NSDL & CDSL) with us. After such linking by the client, the client can sell these shares through EDIS system under which such shares sold are blocked by the DP in the beneficiary account of the client. Pay-in of such EDIS blocked sale transaction is done by Bonanza. No additional upfront margin for such sale is required from the clients.

c) Clients without POA/DDPI Without EDIS Registration: - In such cases full upfront margin is to be available with bonanza before placing any order. The clients have to ensure himself the EPI/Pay-in in time to avoid any Auction.

D. Mark-to-Market (MTM) Loss

If a client’s position begins to incur an MTM loss, the following steps will be initiated:

• 50% MTM Loss: An SMS alert will be sent to the Client.
• Subsequent Loss Alerts: Additional alerts will be triggered for every 10% increase in MTM loss thereafter.
• 90% MTM Loss: The position may be auto squared-off depending on the Client’s available margin and fund status.
• Risk Control: If necessary, the admin team reserves the right to square off the position to prevent further loss.

Important Notes:

• Upon receiving an alert, it is the Client’s responsibility to either add funds or reduce the position to manage risk.
• Any profit or loss arising from the trade will be solely borne by the Client.

For the purpose of calculating M2M loss, the threshold limit is on the basis of Net Deposit available at the start of the trading day any additions less any payments during the day.

Alert / Warning Messages: System generated alert messages shall be sent to clients on their mark to market loss reaching 50% & for every 10% increase in MTM loss thereafter. Messages are sent on the registered mobile number of the clients. subject to available of connectivity of the vendor Further, any position being squared off by RMS dept., appropriate information shall be sent to the clients.

E. Refusal of Order in less liquid scrips / contracts:

Bonanza restricts clients from trading in less liquid scrips like ASM/GSM/IRP (list of which is released by the exchanges also). Bonanza can restrict trading of those scrips also where it deems fit that trading in these shares will lead to price manipulation or creating artificial volumes.

For the risk mitigation purpose, RMS dept. shall review such list on regular basis to decide to allow or restrict trading in any scrip / contract. The list is decided after considering the market scenario, Volume, Open positions, market capitalization, etc.

F. Trading on the Newly Listed securities:

Trading in newly listed shares are subject to the high market risks and rate fluctuations; the chances of higher volatility are more. The dealing in newly listed shares will be allowed considering the applicable margin to be 100%.

G. Policy on Handling of Client's Unpaid Securities

1. Purpose

This Policy outlines the manner in which Bonanza Portfolio Limited ("Trading Member") shall handle securities purchased by clients where the purchase consideration remains unpaid.

The Policy has been framed in accordance with the Securities and Exchange Board of India (SEBI) Circular no. HO/38/11/(9)2026-MIRSD-POD/I/15382/2026 dated July 03, 2026 on Handling of Client's Unpaid Securities by Trading Members and the operational guidelines issued by Stock Exchanges and Depositories.

The objective of this policy is to:

• Protect client interests.
• Ensure transparency in handling unpaid securities.
• Comply with applicable SEBI regulations.
• Define timelines for pledge creation, release, invocation, and liquidation.

2. Scope

This policy shall apply to:

• All delivery-based securities transactions executed through Bigul or Bonanza Portfolio Limited.
• Securities where the client has not fulfilled the payment obligation within the prescribed timeline.

3. Definitions

Unpaid Securities

Securities purchased by the client for which the purchase consideration has not been fully received by the Company.

CUSPA

Client Unpaid Securities Pledgee Account maintained by Bonanza Portfolio Limited for creating auto-pledge over unpaid securities.

Payout Date

The date on which securities are credited to the client's demat account pursuant to settlement by the Clearing Corporation.

4. Process for Handling Unpaid Securities

Step 1 – Credit of Securities

Upon settlement, securities shall be credited directly to the client's demat account.

Immediately after such credit, an automatic pledge shall be created in favour of the Bonanza Portfolio LTD's Client Unpaid Securities Pledgee Account (CUSPA).

No separate authorization or instruction from the client shall be required for creation of this pledge.

Step 2 – Client Communication

Immediately after creation of the pledge, we shall communicate to client through SMS and/or Email:

• Outstanding payment obligation.
• Securities under pledge.
• Due date for payment.
• Broker's right to invoke and liquidate pledged securities in case of non-payment.

5. Timeline for Payment

Clients shall clear the outstanding payment obligation within a maximum period of five (5) trading days from the payout date, in accordance with applicable SEBI regulations.

The broker reserves the right to invoke the pledge and liquidate unpaid securities if the payment obligation is not met within the prescribed timeline.

6. Daily Review of Pledged Securities

During the unpaid period, the Risk Management Team shall review pledged securities on a daily basis considering:

• Outstanding ledger balance.
• Client's overall margin obligations.
• Market value of pledged securities.
• Other risk parameters prescribed by the Exchange.

Where the value of pledged securities exceeds the required amount, the broker shall release the excess pledge on or before the next trading day.

7. Trading Exposure

Unpaid securities pledged under CUSPA shall not be considered for granting additional trading exposure or limits to the client.

8. Release of Pledge

The broker shall release the pledge in any of the following situations:

A. Full Payment

Immediately upon receipt and realization of the client's outstanding payment obligation.

B. Excess Pledge

Where the pledged value exceeds the required security after daily review, the excess pledge shall be released on or before the next trading day.

C. Auto Release

Where neither invocation nor release is initiated within the prescribed regulatory timeline, the Depository shall automatically release the pledge at the end of the sixth trading day after payout.

9. Invocation and Liquidation

If the client fails to fulfil the payment obligation within the prescribed timeline:

The Broker may:

• Invoke the pledge.
• Liquidate such quantity of pledged securities as may be required to recover:
  • Outstanding purchase consideration
  • Statutory levies

Prior to invocation and liquidation, reasonable notice shall be provided to the client through SMS and/or Email on T+4 Day.

After adjustment of dues, any surplus amount shall be credited to the client's ledger.

10. Timeline for Handling Unpaid Securities

11. Exceptional Circumstances

The Company may seek extension of the pledge in exceptional circumstances, including but not limited to:

• Lower circuit with only sellers.
• Trading suspension.
• Surveillance restrictions.
• Unforeseen circumstances.

Such request shall:

• be made before 6 PM on 5th Trading Day
• be communicated to the client.

12. Restrictions

Securities pledged in favour of CUSPA:

• shall not be pledged to Banks or NBFCs;
• shall not be transferred for raising funds;

13. Client Responsibilities

Clients are expected to:

• Maintain sufficient funds before settlement.
• Monitor their ledger obligations regularly.
• Read communications sent by the broker.
• Clear outstanding dues within prescribed timelines.

Failure to do so may result in invocation of pledge and liquidation of securities.

14. Communication Matrix

15. Client Grievance Redressal

Clients may contact the Customer Support Team for any clarification relating to unpaid securities, pledge creation, release, invocation, or liquidation.

If the grievance remains unresolved, the client may escalate the matter through the Grievance Redressal Mechanism available on the website.

16. Review of Policy

This Policy shall be reviewed periodically or whenever required due to changes in SEBI regulations, Stock Exchange guidelines, or Depository requirements.

H. Value of collateral v/s. Debit Balance

As per Bonanza’s existing policy, debit balance of all clients is maintained at 70% of the value of the collateral provided to Bonanza. However, on reaching 70% or above, the client is required to clear the debit balance or infuse more collateral / Funds. If at any moment the debit reaches 80% of the collateral value, the RMS Department may liquidate the collateral.

Please note that interest is not charged on margin against collateral. However, if the Bigul has funded cash component of margin required in FNO segment, Bigul will charge client an interest of 0.04% per day on the peek cash margin funded. e.g- Total approved collateral value Rs.1,00,000/- Margine utilised- Rs. 1,00,000/-

Required cash -50% of Rs.1,00,000/- = Rs.50,000/-.

Ledger balance – Rs. 25,000/-

Cash Short-Rs.25,000/-

Interest for the day – Rs.10/-

B- If the pledge security is cash equivalent (attached list of cash equivalents securities) the same can be utilise for both cash and collateral as per exchange circular and no interest would be charged on cash component of utilised margin.

As per the Exposure policy of Bonanza, it is decided that clients shall not be allow to carry debit balances more than 5 days. If the debit balance continues on T+5th day, the clients’ collateral to the extent of debit balance may be liquidated by the RMS Department. However, after this period of 5 days, company may not allowed Client to take up any fresh positions unless T+5 debit amount is liquidated on FIFO basis. This policy is followed to ensure that the clients do not carry the debit balances (covered by the Collateral with Bonanza) on regular basis. The shares purchased by client & remaining unpaid may be kept by Bonanza in CUSA a/c (Client Unpaid Securities Account) which will be transferred to client account of receipt of payment or will be sold and payin done if debit balance not liquidated by the client within T+5 day

I. Client Intimation / Alert Process:

Clients will be pre-intimated on T+5 day about their ageing debit balance and that their collateral can be liquidating against ageing debit balances through SMS on their registered mobile number.

J. Haircut Policy:

Effective immediately, the following haircut structure will apply to Exchange-approved shares based on their corresponding Exchange VAR:

Exchange VAR up to 49%

• Additional haircut of 7% (reduced from 10%)

Exchange VAR between 50% and 79%

• Additional haircut of 12% (reduced from 15%)

Exchange VAR above 79%

• 100% haircut will be applied

Note: This policy is applicable only to Exchange-approved shares.
Unapproved shares will continue to be treated in the same manner as before (i.e., 100% haircut)

Display of Communication via Mobile App/Website

Please note that, in the normal course of business, notifications regarding corporate actions, important communications related to clients’ trading accounts, outstanding positions and their expiry, margin calls, any other important communication in accordance with SEBI/Exchange(s) circulars, and any notifications received from the Exchange or Depository pertaining to trading activity etc., will be displayed through the Mobile App/Website. Such notifications shall be deemed to have been formally communicated to the Client’s registered mobile number and/or email ID. Accordingly, we request all Clients to regularly review and carefully read every communication displayed on the Mobile App/Website to stay informed and avoid any interruptions to their trading activity, including potential trading halts.

Short Selling Policy on Non-FO Scripts

At Bigul, short selling in Non-FO scripts is strictly prohibited. This policy ensures compliance with exchange regulations and helps prevent triggering compliance alerts.

AMO Order:

An After-Market Order (AMO) is an instruction to buy or sell securities outside regular trading hours, such as late in the evening or early in the morning. Since the exchange is closed, The Trading Member queues the order and pushes it to the exchange as soon as the market opens the next trading session.

AMO Order Timings as follows :