Sobhagya Mercantile Ltd Directors Report

To,

The Members,

Sobhagya Mercantile Limited

The Board of Directors hereby present the report of the business and operations of your Company (‘the Company or ‘Sobhagya) along with the Audited Financial Statements for the financial year (F.Y.) ended 31st March, 2026.

1. Financial Summary/Highlights:

The highlights of the standalone performance of the Company during the fiscal year are given hereunder:

(Rupees in Lakhs)

Particulars	F.Y.2025-26	F.Y.2024-25
Total Income	23509.59	16040.73
Less: Total Expenses	20238.56	13,656.60
Profit/(Loss) before tax	3271.03	2384.12
Less: Tax Expenses	1067.16	831.04
Profit/(Loss) after tax	2203.87	1553.08
Add: Other comprehensive Income, net of tax	6.96	5.04
Profit/Loss and other comprehensive income during the year	2210.83	1558.12

2. Overview & State of the Companys Affairs:

During the year under review, the Company achieved a total income of Rs. 23509.59 Lakhs and a profit of Rs. 2210.83 Lakhs, reflecting an increase from the previous years income of Rs. 7468.86 Lakhs and profit of Rs. 652.71 Lakhs. The Company remains focused on improving its profitability and operational performance in the coming years through strategic initiatives, operational efficiencies and a comprehensive approach towards sustainable and long-term growth.

3. Dividend:

The Board of Directors does not recommend any dividend on equity share capital for the financial year 2025-26.

4. Transfer to Reserves:

The company has not transferred any amount to reserves during the year under review.

5. Material Changes & Commitment affecting the Financial Position of the Company:

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year as on 31^st March, 2026 and the date of this report, except that the Company has received Environmental Clearance (EC) from the Ministry of Environment, Forest and Climate Change (MOEF&CC) vide File /letter no. IA-J-11015/45/2023-IA-II(M) dated 07th August, 2026 for Marki Mangli IV Coal Mine for the production capacity of 0.2 MTPA within the ML Area of 201.69 ha. located in District- Yavatmal, Maharashtra.

During The Year 2025-26:

The Board of Directors at their meeting held on 01^st November, 2025, approved the change in the Registered Office of the Company from "B- 61, Floor 6, Plot No 210, B Wing, Mittal Tower, Free Press Journal Marg, Nariman Point, Mumbai- 400021, Maharashtra, India" to "U.N.-1916, 19th Floor, One Lodha Place, Senapati Bapat Marg, Lower Parel, Mumbai - 400013, Maharashtra, India within the local limits of Mumbai city.

6. Significant & Material Orders passed by the Regulators or Courts or Tribunals:

No significant or material orders have been passed against the Company by the Regulators, Courts or Tribunals, which impacts the going concern status and the Companys operations in future.

7. Transfer of Un-claimed Dividend/Shares to Investor Education and Protection Fund:

There is no such amount of Un-paid or Unclaimed Dividend/Shares to be transferred to Investor and Education and Protection Fund for the financial year ended 31st March 2026.

8. Revision of Financial Statements:

There was no revision of the financial statements for the year under review.

9. Change in the nature of business, if any:

There was no change in the nature of business during the year under review.

10. Deposits from Public:

Your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

11. Subsidiaries, Associates and Joint Ventures:

The Company has no subsidiary, associate or joint venture as at 31st March, 2026.

However, during the year under review, the Board of Directors of the Company has approved certain proposals relating to the incorporation of a Special Purpose Vehicle (SPV) in the form of a Private Limited Company (Subsidiary), investment in promoter group SPVs out of the funds received pursuant to the preferential issue of convertible warrants into equity shares (Associates) and participation in the tender in the name & style of Adyal L.I.S. JV (Joint Venture). The actual incorporation of Subsidiary and receipt of work order by the Joint Venture took place subsequent to 31^st March, 2026. The details are as under:

a) Incorporation of Subsidiary:

During the year under review, the Board of Directors of the Company, at their meeting held on 14^th November, 2025, approved the incorporation of a Special Purpose Vehicle (SPV) in the form of a Private Limited Company as consortium of ‘Sobhagya Mercantile Limited and Caliber Mining and Logistics Limited in terms of the requirement of Letter of Award bearing (TENDER ID:2025_MMD-45645_1 dated 16-07-2025), for project improvement to ‘Obtaining Composite License, Prospecting, Preparation of Geological Report, Mining Plan approval & other Statutory permission & Land acquisition, Drilling, excavation, transportation, supply of the Mineral as MDO and sale of the mineral on revenue sharing basis with AMDCL (The Assam Mineral Development Corporation Limited) from the block, Vadakhol Asoli Ni, Cr, Co & other Associated Mineral Block, Maharashtra under the Proposed name ‘Vadakhol Asoli Mining Private Limited.

Accordingly, the Company incorporated Vadakhol Asoli Mining Private Limited as its subsidiary on 25^th April, 2026 by subscribing 60% equity shares.

The subsidiary has been incorporated under the provisions of the Companies Act, 2013, having its registered office situated at Nagpur, Maharashtra. The Certificate of Incorporation was issued by the Ministry of Corporate Affairs, Government of India, on 25th April, 2026.

Consequently, Vadakhol Asoli Mining Private Limited became a Subsidiary of the Company with effect from 25th April, 2026.

b) Acquisition of Shares in Associate Companies:

The Company acquired 65,47,619 equity shares, representing 30.33% of the total shareholding in Nag Ham 182 Highway Private Limited for an aggregate consideration of 6,54,76,190.00 till 14^th August 2026.

Further, the Company acquired 50,13,695 equity shares, representing 30.33% of the total shareholding in Nag Ham 183 Highway Private Limited for an aggregate consideration of 5,01,36,950.00 till 14^th August 2026.

The aforesaid investments were made out of the funds received pursuant to the preferential issue of convertible warrants into equity shares, in accordance with the objects specified in the Notice of the Extra-Ordinary General Meeting of the Company held on 02nd February, 2026 and 20th April, 2026, respectively.

Consequently, Nag Ham 182 Highway Private Limited and Nag Ham 183 Highway Private Limited became associates of the Company with effect from the respective dates of acquisition.

c) Joint Venture:

During the year under review, the Board of Directors of the Company, at their meeting held on 23rd December, 2025, approved the proposal to submit the tender for the work of Construction of Adyal Lift Irrigation Scheme under Gosikhurd Project, Tal. Bramhapuri, Dist. Chandrapur, invited by Vidarbha Irrigation Development Corporation (Government of Maharashtra) through Executive Engineer, Gosikhurd Right Bank Canal Division, Bramhapuri, vide e- Tender Notice No.07/2025- 26 and Online Tender ID: 2025_CEWRD_1262369_1.

The Company entered into a memorandum of understanding for Joint Venture Agreement as a Member (40%) with S. S. Fabricators & Manufacturers Private Limited (60%) in the name & style of Adyal L.I.S. JV and submitted all the bid documents required under the tender.

M/s. Adyal L.I.S. JV received work order from Vidarbha Irrigation Development Corporation, Nagpur Office of Executive Engineer, Gosikhurd Right Bank Canal Division, Bramhapuri vide Letter No. 1370/GRBC/TC/2026 dated 09th June, 2026 and Agreement No. B-1/05/DL/ 2026-2027 for Construction of Adyal Lift Irrigation Scheme under Gosikhurd Project, Tal. Bramhapuri, Dist. Chandrapur.

The above joint venture has been registered as a Partnership Firm under the Indian Partnership Act, 1932 on 24th July, 2026.

12. Selection and Procedure for Nomination and Appointment of directors:

The Company has a Nomination and Remuneration Committee (‘NRC) which is responsible for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.

The NRC makes recommendations to the Board with regard to the appointment of new Directors and Key Managerial Personnel (‘KMP) and Senior Management. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis, including each time a directors appointment or reappointment is required. The NRC is also responsible for reviewing the profiles of potential candidates vis-a-vis the required competencies; undertake a reference and due diligence and meeting of potential candidates prior to making recommendations of their nomination to the Board.

The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.

13. Criteria for determining Qualifications, Positive Attributes and Independence of a director:

In terms of the provisions of Section 178(3) of the Companies Act 2013 (‘the Act), and Regulation 19 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘Listing Regulations), the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

Positive Attributes - Apart from the duties of Directors as prescribed in the Act, the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

Independence - A director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations.

14. Independent Directors Familiarization Programmes:

The familiarization program aims to provide the Independent Directors with the scenario within the Companys business activity, the socioeconomic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant development so as to enable them to take well-informed decisions in timely manner. The familiarization programme also seeks to update the Directors on the roles, responsibilities, rights and duties under the Companies Act, 2013 and other statutes.

The policy on Companys familiarization programme for Independent Directors is hosted on your Companys website and its web link is www.sobhagyaltd.com.

15. Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and under Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the Board of Directors has undertaken an annual evaluation of its own performance, performance of its various Committees and individual Directors. The manner in which the evaluation has been carried out, has been explained in the Corporate Governance Report of the Company which forms an integral part of this Annual Report.

16. Managerial Remuneration and Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure - I and annexed to the Directors Report.

Particulars of employees drawing remuneration in excess of limits prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

There are no employees drawing remuneration of Rupees One Crore and Two Lakhs or more per annum if employed throughout the financial year or Rupees Eight Lakh and Fifty Thousand per month if employed for part of the financial year or draws remuneration in excess of Managing Director or Whole time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

17. Number of Board Meetings:

During the year, twelve (12) meetings of the Board of Directors of the Company were held on:

Year 2025-26
16/5/2025	5/1/2026
14/8/2025	13/2/2026
17/9/2025	11/3/2026
26/9/2025	23/3/2026
1/11/2025	27/3/2026
14/11/2025	-
23/12/2025	-

The details of the meetings are furnished in the Corporate Governance Report of the Company which forms an integral part of this Annual Report.

18. Statutory Committees of the Board:

Currently, the Board has four Committees namely, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee and the Corporate Social Responsibility Committee.

The detailed information with regard to the composition of Board and its Committee(s) and their respective meetings etc. are stated in the Corporate Governance Report of the Company which forms an integral part of this Annual Report.

19. Directors and Key Managerial Personnel:

Re-appointment of Managing Director:

Mr. Shrikant Mitesh Bhangdiya (DIN- 02628216) was re-appointed as Managing Director of the Company, for a further term of five consecutive years with effect from 05th December, 2025 to 04th December, 2030 (both days inclusive), approved by the Board of Directors at their meeting held on 14th August, 2025 and subsequently by the Members/ Shareholders of the Company in the 41st Annual General Meeting held on Monday, 29th September, 2025 at 11.00 am by way of special resolution.

Director Liable to Retire by Rotation:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Sonal Kirtikumar Bhangdiya (DIN: 03416775), Nonexecutive Non-Independent Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Appointment of Non-Executive NonIndependent Director:

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 14th August, 2026, have approved and recommended to the members of the Company, the appointment of Mrs. Aarti Shrikant Bhangdiya (DIN: 03407301) as Non-executive Non Independent Director of the Company, liable to retire by rotation, with effect from 14th August, 2026.

The resolutions seeking Members approval for the appointment form part of the Notice. The details of the Director being recommended for appointment are contained in the accompanying Notice of the 42nd Annual General Meeting.

Key Managerial Personnel:

Pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act,2013 read with the Rules framed thereunder, Mr. Shrikant Mitesh Bhangdiya, Managing Director, Mr. Anil Ramrao Khawale, Chief Financial Officer and Ms. Shalinee Singh, Company Secretary and Compliance Officer are the Key Managerial Personnel (‘KMP) of the Company as on 31st March 2026.

20. Related Party Transactions:

All related party transactions that were entered into during the financial year were on arms length basis and in the ordinary course of business. In line with the requirements of the Companies Act, 2013 and amendment to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Related Party Transactions have been approved by the

Audit Committee and reviewed by it on a periodic basis. The Related Party transactions effected during the financial year are disclosed in the notes to the Financial Statements, forming part of this Annual Report. The policy on Related Party Transactions as approved by the Board is available on the Companys website at the link

https://www.sobhagvaltd.com/pdf/policv/Relate d%20party%20transactions%20policy.pdf .

The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure - II to this report.

Further, the members approved the material related party transaction(s) with MKS Constro- Venture Private Limited for an aggregate value of up to Rs.250 crores, for the financial year

2025- 26 by passing Ordinary Resolution through postal ballot, only by voting through electronic means (‘remote e-Voting) on Friday,20th June, 2025.

The members approved the material related party transaction(s) with MKS Constro-Venture Private Limited for an aggregate value not exceeding (i)Rs. 300 crores for Sale of goods and services, and (ii) Rs. 75 crores for Advancing Loan, up to an aggregate maximum limit of Rs. 375 crores for the financial year

2026- 27 by passing Ordinary Resolution through postal ballot, only by voting through electronic means (‘remote e-Voting) on Friday, 03rd July, 2026.

21. Statutory Auditors:

M/s. Joshi & Shah, Chartered Accountants, Mumbai (Firm Registration No. 144627W)

were re-appointed as Statutory Auditors of the Company at the 41st Annual General Meeting (‘AGM) of the Company held on 29th September, 2025, to hold office for a second term of five consecutive years from the conclusion of the 41st AGM till the conclusion of the 46th AGM of the Company.

The report given by the Auditors on the financial statements of the Company is a part of the Annual Report.

The Auditors have not expressed a qualified opinion in their Audit Report for financial year ended 31st March, 2026.

The Statutory Auditors of the Company have not reported any instances of fraud as specified under Section 143(12) of the Companies Act, 2013.

22. Internal Auditors:

Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board and its Powers) Rules, 2014; M/s. Ashish Mittal & Associates, Chartered Accountants (Firm Registration No. 019185C), Nagpur, were appointed as Internal Auditors of the Company for the financial year 2025-26.

23. Cost Auditor:

The Company is required to prepare and maintain the cost accounts and cost records pursuant to Section 148 (1) of the Act, read with rules made thereunder.

The Board of Directors of the Company at their meeting held on 02^nd September, 2026, on the on the recommendation of the Audit Committee, approved the appointment of M/s L M A & Associates, Cost Accountants, Bhandara (Firm

Registration No. 04014) as the Cost Auditor of the Company for conducting the audit of the cost accounting records of the Company for the financial year 2026-27, at a remuneration of Rs. 55,000/- (Rupees Fifty-Five Thousand only) plus applicable taxes and reimbursement of out- of-pocket expenses.

The Company has received from the Cost Auditor, inter alia, confirmation regarding their eligibility and consent for appointment as Cost Auditor of the Company and that they are not disqualified from being appointed as Cost Auditor under the applicable provisions of the Act and the rules made thereunder.

In accordance with the provisions of Section 148 of the Act and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditor is required to be ratified by the Members of the Company.

Accordingly, an Ordinary Resolution, for ratification of remuneration payable to the Cost Auditor for the F.Y. 2026-27, forms part of the Notice of the ensuing AGM.

24. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 (‘the Act) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘Listing Regulations), on approval of the Members of the Company at the 41^st Annual General Meeting held on 29^th September, 2025, M/s PDTS & Associates, Company Secretaries (Firm Registration No. P2025MH104400), Nagpur, were appointed as

as Secretarial Auditors of the Company for a term of 5 (Five) consecutive years, commencing from F.Y. 2025-26 to the F.Y. 2029-30.

Pursuant to Regulation 24A of the Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from the Secretarial Auditors on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under.

25. Audit Reports:

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made, if any —

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the financial year ended 31st March, 2026 and has noted that the same does not have any reservation, qualification or adverse remarks. However, the Board decided to further strengthen the existing system and procedures to meet all kinds of challenges and growth in the market expected in view of the rapid global challenges.

The Auditors Report annexed with this Annual Report, does not contain any qualification, reservation or adverse remarks.

(b) Secretarial Audit Report:

The Secretarial Audit was carried out by M/s PDTS & Associates, Company Secretaries (Firm Registration No. P2025MH104400), Nagpur, for the financial year ended 31st March, 2026. The Report given by the Secretarial Auditors, is annexed herewith as Annexure - III and forms integral part of this Report.

The observations and comments given by the Secretarial Auditors in their report are selfexplanatory and do not require any further explanation or comments under Section 134 of the Companies Act, 2013.

26. Fraud Reporting:

During the Financial Year 2025-26, the Statutory Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3) (ca) of the Companies Act, 2013.

27. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information as required under Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided hereunder:

A. Conservation of Energy:

Your Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption, adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

1. Foreign Exchange Earnings: Nil

2. Foreign Exchange Outgo: Nil

28. Management Discussion and Analysis Report:

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached, which forms part of this Annual Report.

29. Risk Management Policy:

The Board of Directors has developed risk management policy so as to identify elements of risk in different areas of operations and to take necessary actions to mitigate the risks. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis. The policy is available on the Companys website at www.sobhagyaltd.com.

30. Corporate Governance:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015(‘Listing Regulation) are complied with.

As per Regulation 34(3) Read with Schedule V of the Listing Regulations, a Report on Corporate Governance along with certificate from Practicing Company Secretary confirming the Compliance of the condition of Corporate Governance as stipulated in the Listing Regulations, is annexed and forms an integral part of this Annual report.

31. Code of Conduct for Prevention of Insider Trading:

In compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, the Company has formulated and adopted the revised Code of Conduct to regulate, monitor and report trading by designated persons in Listed or Proposed to be

Listed Securities of the Company. The object of the Code is to set up framework, rules and procedures to be followed, and disclosures to be made while dealing with shares of the Company. The code has been formulated to protect the interest of shareholders at large and to prevent misuse of any unpublished price sensitive information (‘UPSI) and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Persons, Employees and their immediate relatives and to maintain the highest ethical standards of dealing in Companys securities.

The Company has also adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in line with the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 and Policy and procedure for Inquiry into leak or suspected leak of UPSI. Code of conduct for the prevention of insider trading is available on the Companys website www.sobhagyaltd.com.

32. Annual Return:

The Annual Return pursuant to the provision of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at www.sobhagyaltd.com.

33. Stock Exchang

The Companys equity shares are listed on BSE Limited. The Annual Listing Fees for the financial year 2025-26 and 2026-27 have been paid to the Exchange.

34. Share Capital:

During the year under review, there was no change in the Authorised Share Capital of the

Company. The Authorized Share Capital of the company stood at Rs. 200,000,000/- (Rupees Twenty Crores Only) divided into 20,000,000 (Two Crores) Equity Shares of Rs. 10/- (Rupees Ten Only) each.

During the year under review, the Issued, Subscribed, and Paid-up Equity Share Capital of the Company increased from Rs.8,40,00,000 (Rupees Eight Crores and Forty Lakhs only) divided into 84,00,000 (Eighty-Four Lakhs) Equity Shares of Rs. 10 (Rupees Ten Only) each to Rs. 9,74,85,000 (Rupees Nine Crores Seventy- Four Lakhs Eighty -Five Thousand only) divided into 97,48,500 (Ninety-Seven Lakhs Forty-Eight Thousand Five Hundred) Equity Shares of Rs. 10 (Rupees Ten Only) each. This aforesaid increase in the Paid-up Equity Share Capital was pursuant to the allotment of equity shares upon conversion of convertible warrants issued on a preferential basis to non-promoters on 11^th March 2026, and 27^th March, 2026.

Subsequent to the end of the financial year, the paid-up equity share capital further increased to Rs. 10,39,90,000 (Rupees Ten Crores Thirty- Nine Lakhs Ninety Thousand only) divided into 1,03,99,000 (One Crore Three Lakhs Ninety- Nine Thousand) Equity Shares of Rs. 10 (Rupees Ten Only) each, pursuant to the further allotment of equity shares upon conversion of convertible warrants issued on a preferential basis to non-promoters on 13^th July, 2026.

35. Declaration of Independence:

The Company has received declarations from all the Independent Directors of the Company under section 149(7) of the Companies Act, , 2013, confirming that they meet with criteria of independence as prescribed under section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) read with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors:

The Board of Directors is of the opinion that the integrity, expertise and experience (including proficiency) of the Independent Directors are satisfactory.

36. Policy on Directors Appointment and Remuneration and other details:

The Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel (‘KMP), senior management personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 134(3) of the Companies Act, 2013, the nomination and remuneration policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available on the Companys website at

37. Directors Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: -

(a) in the preparation of the annual accounts for the financial year ended 31st March 2026, the applicable accounting standards and schedule III of the Companies Act, 2013 have been followed along with proper explanation relating to material departures, if any;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as on 31st March 2026 and the profit of the Company for the financial year ended 31st March 2026; a)proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) proper systems to ensure compliance with the provisions of all applicable laws were followed and that such systems were adequate and operating effectively.

38. Vigil Mechanism/Whistle Blower Policy:

The Company has adopted Whistle Blower policy/Vigil Mechanism. The details of establishment of such mechanism are provided in the Report on Corporate Governance which forms an integral part of this Annual Report and also available on the website of the Company at https://www.sobhagvaltd.com/pdf/policv/Whistl e%20blower%20policy.pdf

39. Employee Stock Option Scheme:

The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is required.

40. Corporate Social Responsibility:

The brief outline of the Corporate Social Responsibility (‘CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out as Annexure - IV to this report in the format prescribed in the Companies (CSR Policy) Rules, 2014. For other details regarding the CSR Committee, refer to the Corporate Governance Report, which is a part of this Annual Report. The CSR policy is available on the website of the Company at

41. Secretarial Standards:

The company is in compliance with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

42. Insurance:

The properties and assets of your Company are adequately insured.

43. Particulars of Loans, Guarantees and Investments under section 186 of the Companies Act, 2013:

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

44. Internal Financial Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to management policies and also on promoting compliance of ethical and well- defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the Management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also review the internal control systems along with the Management and the Internal Auditors. The internal audit is conducted at the Company and covers all key areas. All audit observations and follow up actions are discussed with the Management and also with the Statutory Auditors and are consistently reviewed by the Audit Committee.

45. Prevention of sexual harassment at Workplace:

The Company has adopted a Policy on Prevention, Prohibition, and Redressal of Sexual Harassment at workplace.

This is in line with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH Act) and the Rules made thereunder. A Committee has been set up to redress complaints received regarding Sexual harassments. During the year under review, there were no Complaints pertaining to sexual harassment.

46. Compliance with the provisions of the Maternity Benefit Act, 1961

During the year under review, the Company has complied with the provisions of the Maternity Benefit Act, 1961, and the rules made thereunder, as amended from time to time. All eligible women employees are provided maternity leave and other benefits in accordance with the applicable provisions of the Maternity Benefit Act, 1961.

47. The Details of the difference between the amount of the Valuation done at the time of One-Time Settlement and the Valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

48. The Details of an application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the Financial Year.

During the year under review, the Company has not made or received any application under the Insolvency and Bankruptcy Code, 2016 and there is no proceeding pending under the said Code.

49. A) Issue of Convertible Warrants on preferential allotment basis on 05^th January, 2026

During the year under review, the Board of Directors of the Company at their meeting held on 05th January, 2026, approved the issue and allotment of 26,49,500 Convertible Warrants at an issue price of Rs. 674.49/- each (Convertible into Equity Shares having Face Value of Rs. 10/- each at a Premium of Rs. 664.49/- each) aggregating to the amount of Rs. 178,70,61,255/- to Non-Promoters on a Preferential Basis towards raising of additional capital by the Company pursuant to Section 42, 62 of the Companies Act, 2013 and as per the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018 (‘SEBI (ICDR) Regulations, 2018). The approval of the Members of the Company was duly obtained at the Extra-Ordinary General Meeting held on 02nd February, 2026. The Company subsequently received the letter the letter dated 24th February, 2026 from BSE Limited granting in-principle approval for the proposed issue.

Pursuant to the aforesaid approval, the Board of Directors of the Company at their meeting held on 11th March, 2026 approved allotment of 13,48,500 Convertible Warrants of Face Value of Rs 10/- each at a premium of Rs. 664.49/- each to Non Promoters on preferential basis . Further, the Board approved allotment of 3,00,000 Equity Shares of Face value of Rs. 10/- (Rupees Ten only) each at a premium of Rs. 664.49/- each on simultaneous conversion of warrants into Equity Shares consequent to receipt of 100 % consideration amount from one of the allottee namely Dovetail India Fund-Class 22. The Company obtained the listing approval on 01st April, 2026 and trading approval on 10th April, 2026 from BSE Limited for 3,00,000 Equity Shares of Rs. 10/- each to be issued at a premium of Rs. 664.49/-.

The Board of Directors of Sobhagya Mercantile Limited at their Meeting held on 27th March, 2026 approved the allotment of 10,48,500 Equity Shares of Face Value Rs. 10/- each at a premium of Rs. 664.49/- each to Non Promoter pursuant to conversion of Convertible Warrants which were issued and allotted on Preferential basis on 11th March, 2026. The Company obtained the listing approval from BSE Limited on 21st April, 2026 and trading approval on 05th May, 2026 for 10,48,500 Equity Shares of Rs. 10/- each to be issued at a premium of Rs. 664.49/-.

The proceeds received from the aforesaid issue have been utilised for the objects stated in the Explanatory Statement to the Notice of the Extra-Ordinary General Meeting held on 02nd February, 2026.

49. B) Issue of Convertible Warrants on preferential allotment basis on 23^rd March, 2026

The Board of the Directors of the Company at their meeting held on 23rd March, 2026 approved the issue and allotment of 13,01,000 Convertible Warrants at an issue price of Rs. 674.49/- each (Convertible into Equity Shares having Face Value of Rs. 10/ each at a Premium of Rs. 664.49/- each) aggregating to the amount of Rs. 87,75,11,490/- to Non-Promoters on a Preferential Basis towards raising of additional capital by the Company pursuant to Section 42, 62 of the Companies Act, 2013 and as per the SEBI (Issue of Capital and Disclosure Requirement) Regulation, 2018 (‘SEBI (ICDR) Regulations, 2018). The approval of the Members of the Company was duly obtained at the Extra-Ordinary General Meeting held on 20th April, 2026. The Company subsequently received the letter dated 20th May, 2026 from BSE Limited granting in-principle approval for the proposed issue.

Pursuant to the aforesaid approval, the Board of Directors of the Company at their meeting held on 03rd June, 2026 approved allotment of 13,01,000 (Thirteen Lakhs One Thousand) Convertible Warrants of Face Value of f 10/- (Rupees Ten Only) each at an Issue Price of 674.49/- each (including premium of f 664.49/- each amounting to Rs. 87,75,11,490/- (Rupees Eighty-Seven Crore Seventy-Five Lakh Eleven Thousand Four Hundred and Ninety only) to Non-Promoters on Preferential Allotment basis. The Board of Directors of the Company at their Meeting held on13th July, 2026 approved the allotment of 6,50,500 Equity Shares of Face Value Rs. 10/- each at a premium of Rs. 664.49/- each to Non Promoter pursuant to conversion of Convertible Warrants which were issued and allotted on Preferential basis on 03rd June, 2026. The Company obtained the listing approval from BSE Limited on 04^th August, 2026 and trading approval on 12^th August, 2026 for 650500 Equity Shares of Rs. 10.00/- each to be issued at a premium of Rs. 664.49/-

The proceeds received from the aforesaid issue have been utilised for the objects stated in the Explanatory Statement to the Notice of the Extra-Ordinary General Meeting held on 20th April, 2026.

50. Green Initiative:

In the line with the ‘Green initiative, the Company has affected electronic delivery of the Annual Report 2025- 26 are sent to all members whose email addresses are registered with Depository Participants/ M/s Purva Sharegistry (I) Private Limited (Companys Registrar and Share Transfer Agent). Your Company would encourage other Members also to register themselves for receiving Annual Report in electronic form.

51. Other Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

52. Appreciation & Acknowledgement:

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thank the employees at all levels, for their contribution towards the growth of the Company.

Your Directors also wish to place on record their appreciation for business constituents, banks and other financial institutions and shareholders of the Company for their continued support for the growth of the Company.

For and on behalf of the Board of Directors of
Sobhagya Mercantile Limited
Sd/-	Sd/-
Shrikant Bhangdiya	Sonal Bhangdiya
Managing Director	Director
(DIN: 02628216)	(DIN: 03416775)
Place : Mumbai
Date: 14th August, 2026