DEAR MEMBERS

Your Directors have pleasure in presenting the 35^th Annual Report for the financial year 2025-26 along with Audited Financial

Statements for the year ended on March 31, 2026.

The financial performance of your Company for the year ended March 31, 2026 is summarized below: (Rs. in lakhs)

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

In view to conserve reserves, your directors do not recommend any Dividend for the year under review.

All unclaimed and unpaid dividend amounts relating to the dividends declared by the Company have been duly transferred to the Investor Education and Protection Fund (IEPF) in accordance with the applicable provisions of law. As no dividend has been declared by the Company subsequent thereto, no amount became due for transfer to the IEPF during the financial year

2025-26.

No amount has been proposed to carry to Reserves.

There was no change in the nature of business carried on by the Company during the financial year under review.

All Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the year 2025-26. A declaration to this effect as required under regulation 26(3) read with Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 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 membersoftheBoardandseniormanagement,affirmationthat they have complied with Code of Conduct and ethics for the Director and Senior Management in respect of the Financial Year 2025-26.

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

The members of the Company at the Annual General Meeting held on September 28, 2022, had re-appointed Mr. Sandeep Arora as Managing Director of the Company for a further period of three years i.e. from June 01, 2023 to May 31, 2026. The existing tenure of Mr. Sandeep Arora as Managing Director of the Company expired on May 31, 2026. The Board of Directors on recommendation of Nomination and Remuneration Committee and subject to approval of the Members reappointed Mr.

Sandeep Arora as Managing Director of the Company for a further period of three years with effect from June 01, 2026 to

May 31, 2029 on the terms and conditions as set out in AGM Notice subject to approval of the Members by way of Special Resolution at the ensuing Annual General Meeting.

The Board of Directors affirmsthat the Independent Director appointed during the financial year have demonstrated the highest standards of integrity and possess the requisite expertise, qualifications, and relevant industry experience (including the proficiency) as required under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the Independent Directors have submitted declarations under Section 149(7) confirming that they meet the criteria of independence specified under Section 149(6).

The Changes in the composition of the Board and KMP during the financial year are as under:

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.

The Board and the Committee Meetings held during the financial year 2025-26 are as under:

The Composition of the various committees of the Board and their composition as on financial year end is as under:

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 were also discussed.

Your Directors state that: a) In the preparation of the Annual Accounts for the year ended March 31, 2026, 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, 2026 and of the Profit / Loss of the Company for the year ended on that date;

14 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 financial statements 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.

The Annual Return of the Company as on 31^st March, 2026 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/

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.

At the 34th Annual General Meeting held on September 25, 2025, M/s Haziyani & Associates (FRN: 030087C), Chartered

Accountant, were appointed as the Statutory Auditor of the Company to hold office for a term of 5 years till the conclusion of the 39th Annual General Meeting of the Company to be held in the year 2030.

Auditors' Report

The Auditors' Report to the Members on the Accounts of the Company for the year ended March 31, 2026 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.

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 2025-26.

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 is required to maintain cost records as specified by the Central Government under sub-section (1) of section

148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained.

Further, Company has also appointed Cost Auditor M/s. S K Agarwal & Associates (FRN: 100322) for the financial year 2026-

27 pursuant to provisions of Companies Act, 2013.

During the year under review, the Company has neither accepted nor renewed deposits within the meaning of Chapter V of the Companies Act, 2013.

The details relating to deposits, covered under Chapter V of the Act is given hereunder:

The Company has made an investment in 50,000 Equity Shares amounting to Rs. 5,00,000 of Model Coop Bank Limited pursuant to finance arrangement. The investment was within the purview of Section 186 of the Companies Act, 2013.

The Company has not given any loans and guarantee or made any investments in other bodies corporate and persons during the year.

All Related Parties Transactions entered by the Company during the Financial Year 2025-26 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 41 in Notes to Accounts of the Financial Statements for the year ended March 31, 2026. 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 the web link 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 Company of Sonal Impex Limited.

There were no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

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 maintaining the highest standards of Corporate Governance in line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). However, pursuant to Regulation 15(2) of the SEBI Listing Regulations, the provisions of Regulation 27 and Paras C, D and E of Schedule V relating to Corporate Governance are not applicable to the Company, as its paid-up equity share capital and net worth as on the last day of the previous financial year were below 10 crore and 25 crore, respectively. Accordingly, the 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 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/

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.

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 31/03/2026 are as under:

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

1. The Company has appropriate systems in place to identify, evaluate and mitigate business risks commensurate with the size and nature of its operations. In view of the size and scale of operations, constitution of a separate Risk Management Committee is not applicable. the Regulators or Courts or Tribunals which impact the going concern 2. Nosignificant 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 Debentures) 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 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.