DEAR MEMBERS

Your Directors have pleasure in presenting 32nd Annual Report for the financial year 2022-23 along with Audited Balance Sheet and the Statement of Profit and Loss Account for the year ended on March 31, 2023.

FINANCIAL RESULTS

The financial performance of your Company for the year ended March 31, 2023 is summarized below: (Rs. in lakhs)

DIVIDEND

Your Directors do not recommend any Dividend for the year under review.

All the unclaimed / unpaid dividends lying with the Company are transferred to Investor Education Protection Fund. There was no amount required to be transferred to IEPF during the Financial Year.

RESERVES

No amount has been proposed to carry to Reserves.

PRODUCTS & BUSINESS

The Company's main business is of manufacturing Adhesives tapes and Speciality adhesives and emulsions.

CODE OF CONDUCT

All Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the year 202223. A declaration to this effect as required under regulation 26(3) read with Schedule V (D) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 ("Listing Regulations"), from the Managing Director of the Company is given below to this report.

A Declaration signed by the Managing Director is given below:

I hereby confirm that:

The Company has obtained from all the members of the Board and senior management, affirmation that they have complied with Code of Conduct and ethics for the Director and Senior Management in respect of the Financial Year 2022-23.

Sandeep Arora

DIN:00176939

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In accordance with the provisions of the Companies Act, 2013 ("the Act") and the Articles of Association of the Company, Mrs. Mridu Arora, Director (DIN: 07260461) is liable to retire by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting.

The Independent Directors of your Company have submitted a declaration confirming that each of them meets the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Director during the year.

The Composition of the Board and KMP as on date is as under:

(1) Mr. Nitin Rane - Non-executive Independent Director (Chairman)

(2) Mr. Sandeep M. Arora - Managing Director (KMP)

(3) Mrs. Mridu Arora - Non-executive Director

(4) Mr. Manish Nanda - Non-executive Independent Director

(5) Mr. Ajeet Singh - Chief Financial Officer (KMP)

(6) Ms. Anuradha Dubey - Company Secretary (KMP)

The following policies of the Company are put up on the Website of the Company at the web link https://sonal.co.in/investor- relations/policy-conduct/

a) Policy for selection of Directors and determining Directors independence; and

b) Remuneration Policy for Directors, Key Managerial Personnel and other employees.

VARIOUS COMMITTEES OF THE BOARD AND THEIR COMPOSITIONS

NUMBER OF MEETINGS OF THE BOARD

During the FY 2022-23, seven meetings of the Board of Directors were held.

BOARD EVALUATION

The Board of Directors has carried out an Annual Performance Evaluation for all Board Members as well as the working of the Board and its Committees pursuant to the provision of Act and Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. The same was discussed in the Board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and there are no material departures from the same;

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 the Company as at March 31, 2023 and of the Profit / Loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https:// sonal.co.in/investor-relations/general-meeting/

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

STATUORY AUDITORS

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. M C Asawa & CO, Chartered Accountant (Firm Registration No: 008041C) were appointed as the Statutory Auditors for a period of five years from the conclusion of 29th Annual General Meeting till the conclusion of the 34th Annual General Meeting to be held in the year 2025.

The Auditors' Report to the Members on the Accounts of the Company for the year ended March 31, 2023 is a part of the Annual Report and does not have any qualification/adverse remarks.

Reporting of Frauds

During the year under review, the Auditors have not reported any instance of fraud committed in the Company by its Officers or Employees to the Audit Committee under section 143 (12) of the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Prashant Diwan, Company Secretary in Whole-Time Practice, to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report given by the Secretarial Auditor is annexed to this Board Report as Annexure I. The Secretarial Audit Report is qualified.

Justification to Secretarial Audit Report qualification is as under:

In respect of observation that in one instance the Company was unable to delivered/sent letters of confirmation as per SEBI's operational guidelines, for execution of Transmission received during the financial year ended 31st March, 2023 within the prescribed time from the respective date of lodgment.

It is clarified that Company complied with all the provisions of the Acts, Guidelines, Standards, regulations etc except in one such instance for a particular transmission of shares there was a delay of few days in sending the signed letters to our RTA due to some logistic constraints.

COST RECORDS

The Cost Records as prescribed under sub-section (1) of section 148 of the Companies Act, 2013 are maintained. DEPOSITS

During the year, the Company has not accepted any Deposits from the Public. The Company has taken a loan from the Director of the Company amounting to Rs. 105.00 Lakhs and the same was repaid. The details are mentioned in the Note 35 of the Financial Statements. The Company has taken a declaration from the Director while accepting the loan that the amount is given out of his own funds and not acquired from others.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not given any loans and guarantee or made any investments in other bodies corporate during the year. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All Related Parties Transactions entered by the Company during the Financial Year 2022-23 were in the ordinary course of business and on an arm's length pricing basis. The details of Related Parties Transactions are given in Note 35 in Notes to Accounts of the Financial Statements for the year ended March 31, 2023.

The Related Party Transactions policy as approved by the Board of Directors is disclosed on the Company's website at the web link https://sonal.co.in/investor-relations/policy-conduct/

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any Subsidiary, Joint Venture and Associate Company.

The Company is Associate of Sonal Impex Limited.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure II to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The particulars of employees required to be furnished pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure III to this Report. However, as per the provisions of Section 136 of the Act, the Annual Report is being sent to all Members of the Company.

During the year under review, none of the employees of the Company was in receipt of remuneration aggregating Rs. 1,02,00,000/- or more per annum, if employed throughout the year or Rs. 8,50,000/- or more per month, in case employed for part of the year. Hence, there are no particulars to be annexed to this report as required under sub-rules 2 and 3 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The Company is committed to good Corporate Governance in line with Listing Regulation. However, since the Net worth and paid up capital of the Company is below Rs. 25 Crores and Rs. 10 Crores respectively the Regulation 27 and Para C, D and E of Schedule V of the Listing Regulations are not applicable and hence Corporate Governance Report does not forms part of the Annual Report.

MANAGEMENT DISCUSSIONS AND ANALYSIS

Pursuant to Regulation 34 read with Schedule V of the Listing Regulations, a brief note on Management Discussions and Analysis of the results for the year under review is given in Annexure IV which forms part of the Directors' Report.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR)

The Board of Directors has approved the CSR policy which is available on the Company's website (www.sonal.co.in). The CSR Report as per Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments thereto, is attached as Annexure V which forms part of the Directors' Report.

VIGIL MECHANISM

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Regulations, includes an Ethics & Compliance Task Force comprising Senior Executives of the Company. Protected disclosures can be made by a Whistle Blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

The Policy on vigil mechanism and whistle blower policy is available on the Company's website at web link https://sonal.co.in/ investor-relations/policy-conduct/

SECRETARIAL STANDARDS

The applicable Secretarial Standards, i.e. SS-1 and SS-2 relating to 'Meetings of Board of Directors' and 'General Meeting' respectively, as issued by the Institute of Company Secretaries of India (ICSI), have been duly complied by your Company.

SEXUAL HARASSMENT

The Company has complied and constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 except for appointment of a Member in the Committee who is amongst NGO/associations. Further, during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

GENERAL

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. The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence is very minimal.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

3. There were no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.

4. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof - Not applicable

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank all employees of the Company for their hard work, dedication and commitment and appreciate the co-operation received from the Bankers and other Government authorities during the year under review.