Soma Textiles & Industries Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENT:

The Company was historically engaged in the manufacturing of cotton yarn, denim fabrics, shirtings and garments. However, pursuant to the directions issued by the Honble Gujarat High Court for closure of polluting industries in and around Ahmedabad, which were subsequently upheld by the Honble Supreme Court of India, the Company discontinued its core manufacturing operations.

In order to sustain business continuity, preserve shareholder value and leverage its industry experience, the Company strategically diversified into the trading of cotton and cotton yarn with effect from November 2022. This transition reflected the Companys adaptive approach towards changing regulatory and business conditions while continuing its presence within the textile value chain. Accordingly, up to the quarter ended September 2025, the Company was primarily engaged in the trading of cotton and cotton yarn and identified “Textile” as its reportable primary business segment.

Further, pursuant to the Share Purchase Agreement (“SPA”) dated July 09, 2025 executed amongst Shri Surendra Kumar Somany, Surendra Kumar Somany HUF, Shri Arvind Kumar Somany, Arvind Kumar Somany HUF, Shri Prasann Somany and Sarvopari Investments Private Limited (collectively referred to as the “Sellers/Promoters and members of the Promoter Group”) and Roadway Solutions India Infra Limited, Shri Ameet Harjinder Gadhoke and Smt. Teja Ranade Gadhoke (collectively referred to as the “Purchasers/Transferees”), the Company received requests for transfer of 2,47,68,058 equity shares representing 74.98% of the paid-up equity share capital of the Company from the promoter shareholders and members of the Promoter Group for consideration and approval of the Board.

Consequent to the aforesaid change in management and control of the Company, the business operations were restructured. Accordingly, with effect from the quarter ended December 2025, the Company commenced operations in the infrastructure sector, primarily involving execution of highway and road construction projects, which became the sole reportable primary business segment of the Company.

The Indian infrastructure sector continues to remain one of the key focus areas for economic development. Increased Government emphasis on highways, roads, urban connectivity and public infrastructure development is expected to generate sustained opportunities for companies operating in this sector. Continued investments in transportation infrastructure, public-private partnership initiatives and budgetary allocations towards road development are expected to support long-term growth prospects.

The Company has commenced execution of road construction and allied projects received from its Holding Company/ group entities. The management believes that diversification into infrastructure-related activities will provide opportunities for operational growth, business stability and long-term value creation.

2. OPPORTUNITIES AND THREATS

Opportunities

• Increased Government expenditure on roads, highways and infrastructure development projects.

• Growing demand for transportation, urban connectivity and public infrastructure.

• Opportunity to leverage business support and project pipeline from the Holding Company/group entities.

• Scope for gradual expansion into allied infrastructure and civil construction activities.

• Diversification of business operations and revenue streams.

• Development of operational capabilities and project execution expertise in the infrastructure sector.

• Long-term growth opportunities arising from continued investments in infrastructure development.

Threats

• Intense competition in the infrastructure and construction industry.

• Fluctuation in prices of key construction materials such as steel, cement, bitumen and fuel.

• Delays in regulatory approvals, project execution and realization of payments.

• High working capital requirements and cost overruns in infrastructure projects.

• Dependence on availability of skilled labour, subcontractors and supply chain resources.

• Exposure to adverse weather conditions and site execution risks.

• Operational and execution challenges associated with transition into a new line of business.

• Risks arising from economic slowdown, policy changes and regulatory developments affecting the infrastructure sector.

3. SEGMENT-WISE PERFORMANCE

During the financial year 2025-26, the Company did not undertake significant textile manufacturing activities. Up to the quarter ended September 2025, the Company was primarily engaged in trading of cotton and cotton yarn under the textile segment.

Consequent to the change in management and restructuring of business operations, the Company commenced infrastructure-related activities with effect from the quarter ended December 2025, primarily involving execution of road construction and allied projects. Accordingly, the infrastructure business became the sole reportable primary business segment of the Company.

As the Company is presently in the transition phase of business operations, the financial and operational performance during the year may not be directly comparable with previous years.

The management continues to evaluate opportunities for strengthening the Companys operational capabilities and expanding its presence in the infrastructure sector.

4. OUTLOOK

The management remains cautiously optimistic regarding the future prospects of the infrastructure business. Continued Government focus on development of roads, highways, urban connectivity and public infrastructure is expected to support growth opportunities in the sector over the medium and long term.

The Company intends to strengthen its project execution capabilities, improve operational efficiency and develop technical expertise in road construction and allied infrastructure activities. The support and business association with the Holding Company/group entities is expected to facilitate gradual expansion of operations and enhancement of operational capabilities.

The management believes that diversification into infrastructure-related activities may provide long-term business stability and alternative avenues for revenue generation and growth.

However, the infrastructure sector is capital intensive and exposed to various execution and operational risks, including fluctuations in raw material prices, delays in project execution and working capital constraints. Accordingly, the Company intends to continue adopting a prudent and disciplined approach towards project selection, cost management and financial planning.

5. RISKS AND CONCERNS

The Company is exposed to various risks associated with the infrastructure and construction sector, including:

• Delays in project execution and completion.

• Cost overruns and escalation in project costs.

• Volatility in prices of raw materials such as steel, cement, bitumen and fuel.

• High working capital requirements and liquidity management challenges.

• Contractual, legal and regulatory compliance risks.

• Dependence on availability of skilled labour, subcontractors and other resources.

• Operational disruptions arising from adverse weather conditions and site-related challenges.

• Competitive market conditions and pressure on margins.

• Risks associated with transition into a new line of business and operational stabilization.

The Company continuously reviews and strengthens its risk management framework and undertakes appropriate mitigation measures to minimise the impact of such risks on its operations and financial performance.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the size and nature of its operations. The internal control framework is designed to ensure safeguarding of assets, proper recording and reporting of transactions, reliability of financial reporting, operational efficiency and compliance with applicable laws and regulations.

The Company continuously reviews and strengthens its internal control systems to align with evolving business requirements and operational needs. The management periodically evaluates the effectiveness of such controls and undertakes necessary corrective and preventive measures wherever required.

7. HUMAN RESOURCES

The Company recognizes that its employees and workforce are important contributors to its growth and operational performance. During the transition into infrastructure-related activities, the Company has focused on developing appropriate technical and operational capabilities aligned with its new business operations.

During the year under review, the Company implemented a Voluntary Retirement Scheme (VRS) and successfully reached compensation settlements with the majority of its permanent employees. The Company places on record its sincere appreciation for the valuable contribution, dedication and support extended by its workforce over the years.

I ndustrial relations during the year remained cordial. The Company remains committed to maintaining a positive, transparent and respectful work environment.

8. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company during the year reflects the transition in its business operations from textile manufacturing/trading activities to infrastructure-related operations, primarily involving execution of road construction projects.

Since the Company is in the initial stage of establishing and stabilizing its presence in the infrastructure segment, the operational and financial results during the year may not be directly comparable with previous periods and may undergo fluctuations during the stabilization phase.

The management remains focused on efficient resource utilization, effective cost management, strengthening operational capabilities and gradual improvement in overall operational performance.

9. CAUTIONARY STATEMENT

Statements in this “Management Discussion and Analysis” describing the Companys objectives, projections, estimates, expectations or predictions may constitute “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including, but not limited to, economic conditions, Government policies, regulatory developments, market demand, price fluctuations, competitive conditions and other incidental factors and risks beyond the control of the Company.

	On behalf of the Board
Date: 12.06.2026	(TEJA RANADE GADHOKE)
Place: Pune	Chairman