DEAR MEMBERS

Your directors have pleasure in presenting 34th Annual Report for the financial year 2024-25 along with Audited Financial

Statements for the year ended on March 31, 2025.

The financial performance of your Company for the year ended March 31, 2025 is summarized below:

(Rs. in lakhs)

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 due for transfer to IEPF during the Financial Year.

No amount has been proposed to be carried to Reserves during the year.

The Company is engaged in the manufacture of adhesive tapes, specialty adhesives, and emulsions.

All Board Members and Senior Management Personnel have affirmed

25. 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.

Declaration by the Managing Director:

I hereby confirm that the Company has obtained from all the members of the Board and senior management an affirmation that they have complied with Code of Conduct and ethics for the Director and Senior Management in respect of the financial year 2024-25. Sd/-Sandeep Arora Managing Director DIN: 00176939

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, has offered herself for re-appointment at the ensuing Annual General Meeting.

The Independent Directors of the Company have submitted declarations 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. There has been no change in circumstances affecting their status as Independent Directors during the year.

Mr. Nitin Rane, Independent Director, will cease to hold office as an Independent Director of the Company w.e.f. September

25, 2025 (the date of the Annual General Meeting), upon completion of his tenure.

The Board of Directors has appointed Mr. Vipul Desai (DIN: 02074877) as an Additional Director of the Company, designated as an Independent Director, effective August 12, 2025, subject to the approval of the Members. Mr. Vipul Desai has submitted a declaration confirmingthat he meets the independence criteria under Section 149(6) of the Act and Regulation 16(1)(b) of the

Listing Regulations. The Board recommends his appointment as an Independent Director for a term of three (3) consecutive years commencing from August 12, 2025, up to August 11, 2028.

The Board affirms that all Independent Directors appointed during the financial year have demonstrated the highest standards of integrityqualifications,and relevant industry experience (including proficiency) as possess the requisite expertise, mandated under the Companies Act, 2013, and the Listing Regulations.

The Composition of the Board and KMP as on financial year end is as under:

The following policies are available on the Company's website at 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.

The Meetings held during the financial year 2024-25 are as under:

The composition of the various committees of the Board as on March 31, 2025, is as under:

The Board of Directors has carried out the annual performance evaluation of the Board, its committees, and individual Directors pursuant to the provisions of the Companies Act and Listing Regulations.

The evaluation of the Board was conducted after obtaining inputs from all Directors, based on parameters such as Board composition, structure, effectiveness of processes, quality of information, and overall functioning.

The performance of the Committees was evaluated on the basis of their composition, frequency and effectiveness of meetings, and overall contribution to governance.

The Nomination & Remuneration Committee (NRC) also reviewed the performance of individual Directors, considering factors such as preparedness, meaningful participation, and constructive contributions in Board and Committee meetings. The Chairman was evaluated separately on key aspects of his leadership role.

In a separate meeting of Independent Directors, the performance of the Non-Independent Directors, the Board as a whole, and the Chairman was assessed. The outcome of this evaluation was subsequently discussed at the Board Meeting, ensuring a comprehensive review.

Your Directors confirm that: a) In the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards have been followed and there are no material departures; b) The Directors have selected and consistently applied appropriate accounting policies, making judgments and estimates that are reasonable and prudent, to give a true and fair view of the state of affairs of the Company as at March 31, 2025, and of its profit/loss for the year then ended; 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 such controls are adequate and operating effectively; and f) The Directors have devised proper systems to ensure compliance with all applicable laws and such systems are adequate and operating effectively.

The Annual Return of the Company as on March 31, 2025, in Form MGT-7, prepared in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the Company's website at https:// sonal.co.in/investor-relations/general-meeting/

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

At the 29th Annual General Meeting held on December 26, 2020, M/s M C Asawa & Co., Chartered Accountants (Firm

Registration No: 008041C), were appointed as the Statutory Auditors of the Company to hold office for a term of five to the conclusion of the 34th AGM to be held in 2025.

Accordingly, their tenure will expire at the ensuing AGM. Based on the recommendation of the Audit Committee, the Board proposes the appointment of M/s Haziyani & Associates (FRN: 030087C), Chartered Accountants, as the Statutory Auditors of the Company for a period of five consecutive financial years, from FY 2025-26 to FY 2029-30, i.e., from the conclusion of the

34th AGM until the conclusion of the 39th AGM to be held in 2030.

M/s Haziyani & Associates is a peer-reviewed firm certificateconfirming that their appointment, if and has furnished approved, will be in compliance with the requirements of Section 141 of the Companies Act, 2013. The Board recommends their appointment.

The Auditors' Report for FY 2024-25 forms part of this Annual Report and contains no qualifications or adverse remarks

During the year under review, the Statutory Auditors have not reported any instance of fraud under Section 143(12) of the Companies Act, 2013.

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 2024-25.

The Secretarial Audit Report given by the Secretarial Auditor is annexed to this Board Report as Annexure I. The Secretarial

Audit Report is unqualified.

The Company maintains cost records as required under Section 148(1) of the Companies Act, 2013. Further, M/s S K Agarwal

& Associates (FRN: 100322) has been appointed as the Cost Auditors for FY 2024-25.

During the year under review, the Company has neither accepted nor renewed any public deposits nor has it received any loan from Directors or their relatives.

The details as required under Chapter V of the Act are as follows:

The Company has not given any loans or guarantee nor has it made any investments in other bodies corporate and persons during the year.

All Related Parties Transactions entered by the Company during the Financial Year 2024-25 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 39 in Notes to Accounts of the Financial Statements for the year ended March 31, 2025. There is no material related party transaction hence disclosure in Form AOC-2 is not applicable.

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

The Company does not have any Subsidiary, Joint Venture, or Associate Company. The Company is an Associate of Sonal Impex Limited.

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.

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.

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 form part of this Annual Report.

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.

The provisions of Section 135 of the Act regarding Corporate Social Responsibility are not applicable to the Company as the Company is not falling under the said parameters.

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

The Company affirms that no Director or employee has been denied access to the Chairman of the Audit Committee and 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/

The applicable Secretarial Standards, namely SS-1 on Meetings of the Board of Directors and SS-2 on General Meetings, issued by the Institute of Company Secretaries of India (ICSI), have been duly complied with by your Company.

The Company has complied and constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The details of instances are given here under:

The number of employees as on the closure of financial year ended 31/03/2025 are as under:

The Company has complied with the provisions relating to the Maternity BenefitAct 1961

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

4. There was no issuance of equity shares with differential rights regarding dividend, voting, or otherwise, and no issuance of shares under the Employees Stock Option Scheme as per the provisions of Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.

5. There was no issuance of shares (including sweat equity shares) to employees of the Company under any scheme.

6. No voting rights were exercised in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Companies Act, 2013.

Your directors place on record their sincere appreciation for the dedication and hard work of all employees. The Board also acknowledges the support and co-operation received from its Bankers, Government authorities, customers, suppliers, and stakeholders during the year under review.