COMPENSATION STRUCTURE & COMMISSION
DISCLOSURE

1. PURPOSE & REGULATORY POSITIONING

1.1 Purpose

This Policy explains the compensation structure followed by STCNET Private
Limited for eligible Promoters / Referrers.

This Policy is intended to:

• disclose how commission is calculated;
• disclose when commission may arise;
• clarify that commission is linked only to eligible completed product/service
  sales;
• prohibit recruitment-based, pyramid-style, money-circulation, positional,
  or non-sale-linked compensation;
• prevent misleading income claims;
• provide consumers, Promoters / Referrers, and regulators with a clear
  understanding of STCNET’s compensation model.

This Policy is a public disclosure document and must be read together with the
No Income Guarantee Disclaimer, Promoter / Referrer Code of Conduct, and
Consumer Protection (Direct Selling) Compliance Statement.

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1.2 Legal Basis

This Policy is framed with reference to applicable Indian law and recognised
direct-selling compliance standards, including:

1.3 Foundational Principle

STCNET follows a Product Sale First business philosophy.

No product sale means no commission.

No commission, income, incentive, benefit, or payout arises merely from:

• joining;
• registration;
• enrolment;
• referral alone;
• recruitment;
• network size;

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• position;
• rank;
• timing of entry;
• sponsor placement; or
• creation of a downline.

Commission, where applicable, is linked only to eligible completed
product/service sales and remains subject to this Policy, Company verification,
return/refund adjustment, statutory deduction, compliance review, and
applicable law.

2. DEFINITIONS

For the purpose of this Policy:

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3. CORE STRUCTURAL PRINCIPLES

3.1 Sale-Only Causality

Commission eligibility arises only from eligible completed sales of products or
services.

The following have zero independent income value:

• joining;
• registration;
• participation;
• continuation;
• referral alone;
• recommendation alone;

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• placement;
• lineage depth;
• network size;
• headcount;
• position;
• rank;
• title;
• timing of entry.

The governing rule is:

No Sale, No Commission.

3.2 Capped Distribution Structure (2×10)

STCNET’s Compensation Plan operates under a capped 2×10 structure.

This means:

• the structure is finite;
• the maximum depth is ten levels;
• commission does not expand beyond ten levels;
• there is no roll-up;
• there is no compression;
• there is no spillover commission;
• there is no matching bonus;
• there is no rank bonus;
• there is no pool bonus;
• there is no hidden bonus layer;
• there is no compounding or multiplier.

The structure has no standalone income value. It becomes relevant only when an
eligible product/service sale occurs.

3.3 Commission Percentage Table

The maximum commission allocation shall be as follows:

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Maximum Commission on Net Sales

The total commission payout can never exceed 2.00% of Net Sales Value for an
eligible sale.

3.4 Hard Cap on Total Payout

The total distributable commission is strictly capped at 2.00% of Net Sales Value.

No multiplier, accelerator, override, bonus layer, rank benefit, matching bonus,
leadership bonus, pool, reward, or enhancement is permitted unless the
Company formally amends this Policy in compliance with applicable law.

No oral statement, presentation, message, video, social media post, or unofficial
explanation can override this hard cap.

3.5 No Recruitment-Linked Remuneration

STCNET does not reward:

• recruitment;
• enrolment;
• headcount growth;

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• team size;
• network depth;
• timing of entry;
• rank;
• hierarchy;
• joining activity;
• sponsor activity without sale.

Introducing another participant does not, by itself, create any right to
commission.

3.6 No Ranks, Titles, or Status-Based Income

The Compensation Plan does not create ranks, titles, badges, designations,
leadership levels, pin levels, or status-based income.

No Promoter / Referrer receives preferential commission merely because of
seniority, tenure, influence, network size, or perceived leadership.

4. COMMISSION POOL CREATION & DISTRIBUTION

4.1 Commission Pool Creation

Upon occurrence of an Eligible Sale, the Company may create a commission
provision up to 2.00% of Net Sales Value.

Commission is not finally payable until the transaction clears the applicable
return, refund, cancellation, fraud, compliance, KYC, and payout-review checks.

4.2 Distribution Mechanism

The commission pool may be distributed across eligible Promoters / Referrers
strictly within the 2×10 capped structure.

Eligibility depends on:

• occurrence of an Eligible Sale;
• product/service commission eligibility;

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• valid referral attribution;
• existence within the defined ten-level structure;
• active and valid Promoter / Referrer status;
• completed KYC, where required;
• compliance with Company policies;
• absence of suspension, termination, fraud, manipulation, or material
  breach;
• statutory deduction and payout eligibility requirements.

4.3 No Entitlement Without Sale

No person becomes entitled to commission merely because they:

• register;
• join;
• refer;
• sponsor;
• create a downline;
• hold a position;
• invite another person;
• share a link;
• attend training;
• explain the business model;
• promote STCNET without an eligible sale.

A valid sale event is the minimum foundation for commission consideration.

4.4 Single-Path Allocation

Each eligible sale creates only:

• one commission pool;
• one allocation path;
• one defined sequence up to Level 10.

A single sale shall not create multiple earning paths, duplicate payouts, stacking,
circular commission, or hidden geometric expansion.

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4.5 Unpaid, Ineligible, or Undistributed Amounts

Any part of the 2.00% commission pool that is not payable due to ineligibility,
absence of eligible participants, invalid attribution, breach, reversal, fraud,
termination, or structural limitation shall be treated as Company Retained / Not
Payable.

Such amount shall not be rolled up, compressed, redistributed, transferred, or
paid to any other level.

The accounting and tax treatment of any such amount shall be determined by the
Company in accordance with applicable law and professional advice.

5. COMMISSION ELIGIBILITY RULES

5.1 Qualifying Sale Criteria

Commission eligibility arises only when all of the following conditions are
satisfied:

• a bona fide consumer places an order;
• the Company accepts the order;
• payment is successfully received by the Company;
• the product or service is commission-eligible;
• the referral attribution is valid;
• the transaction is not cancelled, returned, refunded, reversed, fraudulent,
  artificial, manipulated, or non-compliant;
• the applicable return/refund/cancellation review period is cleared;
• the Promoter / Referrer is eligible under Company policy;
• KYC and payout requirements are completed, where applicable.

Failure of any condition may nullify or suspend commission eligibility.

5.2 Commission Base

Commission is computed only on Net Sales Value.

Commission is not computed on:
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• GST or any tax;
• delivery charges;
• logistics charges;
• convenience fees;
• handling charges;
• packaging charges;
• payment gateway charges;
• insurance charges;
• discounts not recovered;
• refunds;
• cancelled order value;
• returned order value;
• chargebacks;
• penalties;
• wallet loading;
• pass-through or ancillary amounts.

5.3 Product Eligibility

For STCNET’s Direct Selling / Referral Programme, a product or service shall be
treated as commission-eligible only where STCNET has the required ownership,
holding, licence, authorisation, or other legally defensible written commercial
right under applicable law and Company policy.

Products that are not commission-eligible may still be sold through STCNET’s e-
commerce platform as ordinary retail products, but they shall not generate
Promoter / Referrer commission.

The Company may maintain an internal Product Authorisation & Commission
Eligibility Register for this purpose.

5.4 Self-Purchase Neutrality

Self-purchase by a Promoter / Referrer is treated as a consumer transaction only.

Self-purchase does not, by itself, create commission entitlement.

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No Promoter / Referrer may represent self-purchase, family purchase, proxy
purchase, bulk purchase, circular purchase, or artificial purchase as a method of
earning commission.

The Company may exclude, reverse, block, review, or investigate any transaction
suspected to involve self-purchase manipulation, proxy ordering, artificial
volume creation, inventory loading, or commission abuse.

6. COMMISSION REVERSAL & ADJUSTMENT

6.1 Automatic Reversal

Commission linked to cancelled, returned, refunded, reversed, fraudulent, non-
compliant, chargeback, duplicate, artificial, or manipulated transactions is
subject to reversal or adjustment.

6.2 Recovery Mechanism

Where commission has already been credited or paid, the Company may, in
accordance with applicable law and Company policy:

• adjust future payouts;
• debit the internal wallet ledger;
• reverse unpaid commission;
• recover excess or wrongly paid amounts;
• withhold payouts pending investigation;
• take enforcement action in cases of fraud, manipulation, mis-selling, or
  policy breach.

6.3 Reversal Review

The Company shall maintain appropriate transaction records and audit trails for
commission reversal.

Any Promoter / Referrer disputing a reversal may raise a grievance through the
official grievance mechanism with supporting documents.

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The Company’s decision after review shall be binding unless modified by the
Company, a competent authority, or applicable legal process.

7. MONTHLY COMPUTATION & PAYOUT CYCLE

7.1 Computation Period

Commissions are ordinarily computed on a calendar-month basis.

7.2 Adjustments

All commission calculations are subject to adjustment for:

• returns;
• cancellations;
• refunds;
• chargebacks;
• payment failures;
• fraud checks;
• KYC status;
• tax deductions;
• policy violations;
• product eligibility;
• referral attribution errors;
• compliance review.

7.3 Payout Timeline

Subject to KYC completion, statutory deductions, bank/payment processing,
return/refund review, compliance checks, and absence of investigation or
dispute, net eligible commission for a calendar month shall ordinarily be
processed on or before the 28th day of the immediately succeeding calendar
month.

This timeline may be extended where required due to regulatory reasons,
bank/payment delays, unresolved disputes, fraud review, system issues, force
majeure, or any other lawful reason.

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7.4 Withholding

The Company may withhold, freeze, suspend, delay, reverse, or reject
commission where:

• a complaint is pending;
• KYC is incomplete;
• bank details are invalid;
• statutory compliance is pending;
• fraud or manipulation is suspected;
• return/refund/cancellation review is pending;
• the Promoter / Referrer is suspended or terminated;
• a legal or regulatory requirement applies;
• a policy breach is under investigation;
• payout would violate Company policy or applicable law.

8. ACCOUNTING & RECORD TREATMENT

8.1 Commission Records

The Company shall maintain records of commission computation, payout,
reversal, withholding, and adjustment in accordance with applicable law and
internal accounting controls.

8.2 Provision and Adjustment

The Company may create, adjust, reverse, or write back commission provisions in
its books in accordance with applicable accounting standards, tax law, GST law,
professional advice, and Company policy.

8.3 No Public Tax Representation

Nothing in this Policy shall be treated as tax, GST, accounting, legal, or financial
advice to any Promoter / Referrer, consumer, or third party.

Each person is responsible for their own tax, accounting, and legal compliance.
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9. TAX TREATMENT

9.1 Statutory Deductions

Commission payouts are subject to applicable statutory deductions, including
TDS, where applicable.

The Company may require PAN, bank details, KYC documents, declaration forms,
invoices, or other records required for lawful payout and tax compliance.

9.2 Individual Responsibility

Each Promoter / Referrer is responsible for their own income-tax, GST,
accounting, invoicing, return filing, and other statutory compliance, where
applicable.

The Company does not provide personal tax advice.

Promoters / Referrers should consult their own tax advisor for their individual
tax obligations.

10. DISCLOSURE & TRANSPARENCY

10.1 Public Disclosure

This Policy is publicly available on the STCNET website for consumers, Promoters
/ Referrers, regulators, and other stakeholders.

10.2 Promoter / Referrer Obligation

Promoters / Referrers must refer prospects, consumers, and participants only to
official Company disclosures.

They shall not reinterpret, simplify, exaggerate, modify, translate inaccurately, or
privately explain the compensation structure in a manner inconsistent with this
Policy.

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10.3 Misrepresentation Prohibited

Silence, omission, selective explanation, exaggerated statement, income
projection, unofficial chart, misleading screenshot, or incomplete explanation
may constitute misrepresentation.

Misrepresentation is subject to enforcement under the Promoter / Referrer
Code of Conduct.

10.4 Past Earnings Disclaimer

Past earnings, examples, illustrations, or success stories, if shared by the
Company, are for informational purposes only and shall not be construed as a
promise, guarantee, assurance, or prediction of future earnings.

Results vary and depend on actual eligible product/service sales, individual effort,
consumer demand, lawful conduct, and compliance with Company policies.

11. PROHIBITED PRACTICES

11.1 Absolute Prohibitions

The following are strictly prohibited:

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11.2 Blood-Relation Restriction / Anti-Stacking Rule

To reduce artificial placement, proxy participation, commission manipulation,
and family stacking, no Promoter / Referrer may introduce, place, sponsor,
control, or indirectly benefit from any immediate blood relative, close relative,
spouse, dependent, or financially controlled family member within Levels 1, 2, 3,
or 4 of their referral lineage.

Such relatives may participate only from Level 5 onward, without preferential
treatment and subject to Company policy, genuine independent participation,
KYC verification, and compliance review.

Proxy, benami, nominee, financially controlled, or indirect circumvention of this
rule constitutes a material breach.

Violation may result in:

• disqualification;
• commission reversal;
• commission forfeiture where lawful;
• suspension;
• termination;
• restructuring or nullification of affected lineage;
• permanent blacklisting;
• regulatory reporting where required.

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11.3 Consequences of Prohibited Practices

Violation of prohibited practices may result in:

• immediate suspension;
• investigation;
• freezing of payout;
• termination of Promoter / Referrer status;
• forfeiture or reversal of unpaid / wrongly paid commission where lawful;
• permanent blacklisting;
• reporting to competent authorities where required;
• civil, criminal, or other legal action where appropriate.

12. AUDIT, MONITORING & ENFORCEMENT

12.1 Audit Rights

The Company may audit sales patterns, commission flows, referral activity,
account behaviour, KYC records, transaction records, payout records, and
Promoter / Referrer conduct.

12.2 Monitoring

The Company may monitor:

• sales patterns;
• referral activity;
• commission eligibility;
• policy compliance;
• suspicious transactions;
• self-purchase manipulation;
• family-stacking risks;
• fake orders;
• duplicate accounts;
• refund/return abuse;
• payout anomalies;
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• misleading public claims;
• any suspected manipulation or breach.

12.3 Enforcement

Violations may result in:

• warning;
• retraining;
• correction notice;
• suspension;
• withholding of commission;
• freezing of payout;
• reversal of commission;
• termination;
• blacklisting;
• regulatory reporting where required;
• legal action where appropriate.

12.4 Compliance-First Approach

STCNET’s enforcement approach is compliance-first, consumer-protection-first,
and audit-integrity-first.

No revenue target, network growth objective, or commercial convenience shall
override consumer protection, lawful conduct, or regulatory compliance.

13. RELATED POLICIES

This Policy should be read together with:

1. Legal Entity & Statutory Disclosures

2. Consumer Protection (Direct Selling) Compliance Statement

3. Promoter / Referrer Code of Conduct

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4. Grievance Redressal & Consumer Complaints

5. Returns, Refunds & Cancellation

6. Pricing, Payments & Charges

7. Shipping, Delivery & Fulfilment

8. Privacy Policy

9. Terms & Conditions (Website Use)

10. Product / Service Regulatory Disclosures

11. Cookie & Tracking Consent Policy

12. No Income Guarantee Disclaimer

13. Compliance Index & Statutory Mapping

14. POLICY UPDATES

This Policy may be amended, revised, or updated from time to time to reflect
changes in applicable law, regulatory requirements, compensation structure,
internal compliance practices, technology systems, audit controls, or business
operations.

The latest version published on the STCNET website shall prevail.

End of Policy #4 – Compensation Structure & Commission Disclosure

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