Sonaselection India Ltd Directors Report

To,

The Members,

Your directors are pleased in presenting their Third Directors Report on the business and operations of your Company together with the Audited Financial Statements and the Auditors Report of your Company for the financial year ended, 31 st March, 2025.

The summarized financial results for the year ended 31 st March, 2025 are as under: -

FINANCIAL SUMMARY

(Amount in Rs. in Lakhs)

Particulars	2024-2025	2023-2024
Total Revenue	31677.94	12130.97
Profit / Loss before depreciation and Tax	4349.05	2366.05
Less:- Depreciation	1731.36	679.70
Profit/Loss before Tax	2617.69	1686.35
Less-Current year tax	461.74	296.87
MAT Credit Entitlement	(132.07)	(14.32)
Deferred Tax	249.63	157.46
Profit/ Loss for the year	2038.39	1246.34

STATE OF COMPANY S AFFAIRS / FINANCIAL PERFORMANCE

The Performance of your Company during F.Y 2024-2025 is given above.

The Company has closed its books of account with a profit of Rs. 2038.39 Lakhs for the financial year ended 31.03.2025 as compared to the Profit of Rs. 1246.34 Lakhs for the financial year ended 31.03.2024.

OPERATIONAL PERFORMANCE

During the year under review, the Company has delivered a remarkable operational and financial performance, marked by significant milestones and robust growth across key parameters:

Advanced Plant Operationalization : Successfully completed the setup and operationalization of a state-of-the-art cotton fabric processing plant in July 2024, equipped with the most advanced technology in the industry.

Capacity Expansion : Enhanced processing capacity to 68.70 lakh meters per month from 45.00 lakh meters per month , representing a substantial growth of 52% .

Fabrics Division: Commenced the Fabrics Division , enabling direct sale of in-house manufactured fabrics, thereby expanding the Company s value chain and market presence.

Revenue Growth : Achieved a robust revenue increase to 316.07 crore , as against 121.09 crore in the previous year an impressive growth of 161% .

EBITDA Improvement : Operating profit (EBITDA) improved significantly to 58.53 crore from 28.39 crore , reflecting a growth of 106% on the back of higher capacity utilization and better product mix.

Profitability : Profit after Tax (PAT) rose to 20.38 crore , compared to 12.46 crore in the previous year, marking a growth of 64% .

Cash Accruals : Strengthened cash flows with cash accruals at 40.19 crore , nearly doubling from 20.82 crore in the previous year, a growth of 93% .

Credit Rating : In recognition of the Company s strengthened financial position and operational performance, CRISIL, one of India s leading rating agencies, assigned a BBB Stable rating to the Company.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the year.

CHANGE IN THE REGISTERED OFFICE OF THE COMPANY

There was no change in the registered office of the Company during the financial year 2024-25. After the closure of the financial year, the registered office of the Company was shifted to 18 KM Stone, Chittorgarh Road, Hamirgarh, Bhilwara 311025 with effect from 12th May, 2025.

DIVIDEND

As the Company has not made adequate profits during the year, the Directors of your Company do not recommend any dividend for the financial year ended March 31, 2025.

CAPITAL STRUCTURE

During the year under consideration, the capital structure of the Company has been changed as under:

Authorized Share Capital:

The Company has increased its Authorized Share Capital from Rs. 3,25,00,000.00 to Rs. 22,00,00,000.00 in the Extra Ordinary General Meeting held on 21.08.2024. At the end of the Financial year, the Authorized Share Capital of the Company is Rs. 22,00,00,000 (Rupees Twenty-Two Crore) divided into 2,20,00,000 (Two Crore Twenty Lakh) Equity Shares of Rs. 10/- (Rupees Ten) each.

Subscribed and Paid up Capital: i. The company has allotted 1,24,00,000 Equity Shares as Bonus Shares to the existing Shareholders in the ratio of 4:1 (Four Bonus shares for One existing share). ii. The company has issued and allotted 3,74,145 Equity shares of Rs. 10/- each to the identified persons on Preferential basis at issue price of Rs. 147/- (Rupees One Hundred Forty Seven) per share.

At the end of the F.Y. 2024-2025, the Paid-up Share capital of the Company was Rs. 15,87,41,450/- (Fifteen Crore Eighty-Seven Lakh Forty-One Thousand Four Hundred and Fifty only) divided into 1,58,74,145 (One Crore Fifty-Eight Lakh Seventy-Four Thousand One Hundred and Forty-Five) Equity Shares of Rs. 10/- each.

During the Financial Year 2024-25, the company has also issued 96,608 Compulsorily Convertible Debentures (CCD) at the Issue Price of 735/- per CCD to the identified persons on preferential basis. These CCDs shall be convertible into equity shares as per terms and conditions approved by the shareholders in the EGM dated 02.09.2024.

During the year under review, the company has also passed the special resolution for issue of Optionally Convertible Debentures (OCSs), but the Board of Directors , in its meeting held on 25.10.2024, has abandoned the said resolution and no action has been taken by the Board in this regard.

EXTRACT OF ANNUAL RETURN

As required under Section 134(3)(a) of the Act, the Annual Return for the financial year ended on 31st March 2025 in Form MGT-7 pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 is put on the Companys website and can be accessed at https://sonaselection.com

HOLDING/SUBSIDIARY/ASSOCIATE COMPANIES

The Company has no Holding/Subsidiary or Associate companies during the year under review.

AMOUNT TRANSFERED TO RESERVES

Your directors do not propose to carry any reserve during the financial year ended March 31, 2025. However, the amount of Securities Premium Account for Rs. 1236.00 Lakhs and Amount of Surplus of profits for Rs. 4.00 Lakhs have been utilized for the issue of fully paid up Bonus Shares to the existing shareholders.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company s Board comprises of the following directors: -

Sr. No	DIN	Name	Designation	Category	Date of Appointment
1	00104156	Uma Nuwal	Whole-Time Director	Promoter	11/02/2022
2	01474313	Harshil Nuwal	Managing Director	Promoter	11/02/2022
3	00104154	Subhash Chandra Nuwal	Non-executive Director	Promoter	11/02/2022
4	08921365	Aditi Kakhani	Additional Director	Independent	18/01/2025
5	10048774	Kanhaiya Lal Acharya	Additional	Independent	18/01/2025
			Director

Mr. Harshil Nuwal has been appointed as the Managing Director of the Company with effect from 03.02.2025. Mrs. Uma Nuwal has been appointed as the Whole-Time Director of the Company with effect from 03.02.2025.

Mrs. Aditi Kakhani and Mr. Kanhaiya Lal Acharya have been appointed as Independent Directors of the company w.e.f 18.01.2025.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015. The Board is of the opinion that Independent Directors of the Company fulfil the conditions of independence specified in the Act and the SEBI (LODR) Regulations and that they are independent of the management.

During the year under review, the company has appointed Mr. Harish Sharma as Company Secretary and Compliance Officer with effect from 25.10.2024 and Mr. Ramesh Chandra Vyas as Chief Financial Officer of the Company with effect from 03.02.2025.

MEETINGS OF THE BOARD OF DIRECTORS

The Board met 16 (Sixteen) times during the financial year 2024-25 i.e., on 07.05.2024, 27.05.2024, 05.06.2024, 27.06.2024, 27.07.2024, 31.07.2024, 23.08.2024, 02.09.2024, 16.09.2024, 25.10.2024, 12.11.2024, 23.11.2024, 18.01.2025, 03.02.2025, 19.03.2025 and 29.03.2025. The necessary quorum were present for all the meetings. The intervening period between the Board Meetings were well within the maximum time between the two meetings prescribed under section 173 of the Companies Act, 2013.

The annual calendar of meetings is broadly determined at the beginning of each year. The details of the meetings held during the year are as under:

	Board Meetings		Attendance
S. No.	Date of Meeting	Total Number of directors as on the date of meeting	Number of directors attended	% of attendance
1.	07-05-2024	3	3	100
2.	27-05-2024	3	3	100
3.	05-06-2024	3	3	100
4.	27-06-2024	3	3	100
5.	27-07-2024	3	3	100
6.	31-07-2024	3	3	100
7.	23-08-2024	3	3	100
8.	02-09-2024	3	3	100
9.	16-09-2024	3	3	100
10.	25-10-2024	3	3	100
11.	12-11-2024	3	3	100
12.	23-11-2024	3	3	100
13.	18-01-2025	3	3	100
14.	03-02-2025	5	5	100
15.	19-03-2025	5	5	100
16.	29-03-2025	5	5	100

COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY

The Board of Directors has constituted the following Committees :

AUDIT COMMITTEE

Your Company has a duly constituted Audit Committee, the composition and charter of which are in line with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Board has constituted the Audit Committee on 18.01.2025. The composition of the Audit Committee is as follows:

Name of Member	Designation in Committee	Category/Position in Company
Mr. Kanhaiya Lal Acharya	Chairperson	Independent Director
Mrs. Aditi Kakhani	Member	Independent Director
Mr. Subhash Chandra Nuwal	Member	Non-executive Director

During the year under review, one meeting of the Audit committee was held on 24.01.2025 and all the members were present in that meeting.

NOMINATION & REMUNERATION COMMITTEE ( " NRC " )

Pursuant to the provisions of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has duly constituted a Nomination and Remuneration Committee on 18.01.2025.

The composition of the Nomination and Remuneration Committee is as follows:

Name of Member	Designation in Committee	Category/Position in Company
Mrs. Aditi Kakhani	Chairperson	Independent Director
Mr. Kanhaiya Lal Acharya	Member	Independent Director
Mr. Subhash Chandra Nuwal	Member	Non-executive Director

During the year under review, one meeting of the Nomination and Remuneration Committee was held on 03.02.2025 and all the members were present in that meeting. The committee has also formulated the Nomination and Remuneration Policy which specified for the criteria for determining qualifications, positive attributes, and independence of a director for identifying the persons or key managerial personnel for appointment and remuneration.

The Committee has recommended to the Board for appointment and remuneration of Mr. Harshil Nuwal as Managing Director and Mrs. Uma Nuwal as Whole-time Director. The NRC Committee has also recommended the appointment of Chief Financial Officer.

During the year under review, all the recommendations made by the Nomination and Remuneration Committee were accepted by the Board.

MEETINGS OF THE MEMBERS

The 2 nd Annual General Meeting of the Company for the financial year 2023-2024 was held on 30/09/2024 at the Registered Office of the Company.

During the financial year 2024-25, the Company convened three (3) Extra-Ordinary General Meetings on 21st August 2024, 2nd September 2024, and 11th November 2024, to transact the businesses as set out in the respective notices of the meetings.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under review, the company has not given any loan or provide guarantees/security or made investments, which covered under section 186 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report, except the conversion of Compulsorily Convertible Debentures (CCD) in to Equity Shares of the Company as per terms and conditions.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR

TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY S OPERATION IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunals which affect the going concern status and future operation of the Company.

PARTICULARS OF CONTRACTS OR ARRANGMENTS MADE WITH THE RELATED PARTIES

During the year, the Company entered into transactions with Related Parties which fall within the purview of Section 188 of the Companies Act, 2013. The particulars of such contracts/arrangements are disclosed in Form AOC 2 and annexed herewith as Annexure 1 to this Report.

DISCLOSURE OF REMUNERATION OF EMPLOYEES COVERED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

In accordance with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the details of the top ten employees of the Company in terms of remuneration drawn during the year are provided in Annexure 5 to this Report.

NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, there is no Subsidiary, Joint Venture or Associate Company.

DEPOSITS

The Company has not accepted any deposits under the applicable provisions of the Companies Act, 2013 and the rules framed there under.

STATUTORY AUDITORS AND AUDITORS REPORT

At the First Annual General Meeting held on September 29, 2023, M/s Pokharna Somani & Associates, Chartered Accountants, Bhilwara (Firm Registration No. 011535C), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 6th Annual General Meeting of the Company.

There is no qualification, reservation or adverse remarks or disclaimer made by the Auditors in their report.

FRAUD S REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE

CENTRAL GOVERNMENT U/S 143(12)

There were no frauds reported by the any of the auditors under section 143(12) of Companies Act, 2013 during their course of audit for the financial year 2024-2025.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors has appointed M/s K. C. Moondra & Associates, Practicing Cost Accountants, as Cost Auditors of the Company for the financial year 2025-26, at a remuneration of 35,000/-, subject to ratification by the members. Accordingly, a resolution seeking members approval for ratification of the remuneration payable to the Cost Auditors forms part of the Notice of the Annual General Meeting.

INTERNAL AUDITORS

Pursuant to Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Board of Directors has appointed CA Manish Kumar Jindal (PAN: ABBPJ8803E, Membership No.: 057009) as the Internal Auditor of the Company to undertake the Internal Audit for the financial year 2025-26. The role of the Internal Auditor includes, but is not limited to, reviewing internal audit observations and monitoring the implementation of corrective actions required, reviewing various policies, and ensuring their proper implementation.

The suggestions of the Internal Auditor were reviewed, and necessary corrective and preventive actions were taken in consultation with the Audit Committee. The Internal Auditor conducts the internal audit of the functions and operations of the Company and reports to the Audit Committee and the Board from time to time.

SECRETARIAL AUDITORS

During the year under review, the provisions relating to Secretarial Audit were applicable to the Company and the Board of Directors has appointed M/s. R K Jain & Associates, Practicing Company Secretary of the Company for the Financial Year 2024-25.

As per the Regulation 24A of the SEBI (LODR) Regulations, 2015 as amended, the company is required to appoint Secretarial Auditors for a period of Five years in the General Meeting of the Members. The Board of Directors recommends to appoint M/s. R K Jain & Associates, Practicing Company Secretary as Secretarial Auditors from the FY 2025-26 to FY 2029-30 and the item is proposed in the Notice of this AGM.

The Report of Secretarial Auditors is annexed as Annexure-4 . The observations, adverse remarks made in the Secretarial Audit Reports were of procedural errors and inadvertent errors/mistakes in the filling and filing of the various Forms with MCA and the management of the company has taken the corrective measures and submit some of the Forms to MCA to rectify the errors/ mistakes.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has adopted a policy for prevention of sexual harassment at the workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)

Act, 2013 ( " POSH Act " ). An Internal Complaints Committee ( " ICC " ) has been duly constituted as per the provisions of the POSH Act to redress complaints regarding sexual harassment at the workplace.

During the financial year under review, the Company has complied with all the provisions of the POSH Act and the rules framed thereunder. Further details are as follow:

a. Number of complaints of Sexual Harassment received in the Year	0
b. Number of Complaints disposed-off during the year	NA
c. Number of cases pending for more than ninety days	NA

BANKRUPTACY CODE 2016

During the financial year under review, there were no application/s made or proceeding were pending in the name of the company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the Financial year under review, there were no One Time Settlement of Loans taken from Banks and Financial institutions.

SECRETARIAL STANDARDS

The Company has Complied with the applicable Secretarial Standards (as amended from time to time) on meetings of the Board of Directors and Meeting of Shareholders (EGM/AGM) i.e. SS-1 and SS-2 issued by The Institute of Company Secretaries of India and approved by Central Government under section 118(10) of the Companies Act, 2013.

INTERNAL CONTROL SYSTEMS

The Company s internal control systems are adequate and commensurate with the nature and size of the

Company and it ensures:

Timely and accurate financial reporting in accordance with applicable accounting standards.

Optimum utilization, efficient monitoring, timely maintenance and safety of its assets.

Compliance with applicable laws, regulations and management policies.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 3 .

LIQUIDITY

Your Company maintains sufficient cash to meet our strategic objectives. We clearly understand that the liquidity in the Balance Sheet is to ensure balance between earning adequate returns and the need to cover financial and business risks. Liquidity also enables your Company to position itself for quick responses to market dynamics.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013, the total CSR liability of the Company for the Financial Year 2024-25 was 19.27 lakhs. During the year, the Company has spent 19.58 lakhs towards various social and welfare initiatives aligned with the activities prescribed under Schedule VII of the Act.

A brief outline of the CSR Policy of the Company, along with the details of initiatives undertaken during the year, is annexed to the Directors Report as Annexure 2 .

STATEMENT SHOWING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, it is hereby confirmed: a) That in the preparation of the annual accounts for the period ended 31.03.2025, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) That 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 the Company at the end of the financial year and the loss of the Company for the period ended 31.03.2025;

c) That the Directors had taken proper and sufficient care 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) That the Directors had prepared the annual accounts on a going concern basis and

e) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels. Your Board also wishes to place on record its appreciation for the services rendered by its auditor, consultants business partners, Bankers, Service Providers as well as regulatory and government authorities for extending support and placing their faith and trust on the Board.

For and on behalf of the Board of Directors

Sonaselection India Limited

Date 08.09.2025	Harshil Nuwal	Subhash Chandra Nuwal
Place Bhilwara	Managing Director	Director
	DIN 01474313	DIN - 00104156