Sangal Papers Ltd Directors Report

To the Members,

Your directors have pleasure in presenting the 46th Annual Report of Sangal Papers Limited together with the Audited Financial Statements of the Company for the financial year ended 31 March 2026.

COMPANY OVERVIEW

Sangal Papers Limited (the Company) was incorporated in the year 1980 and is engaged in the manufacturing of newsprint, writing and printing paper, kraft paper, and a wide range of colored and speciality paper catering to both domestic and international markets. The Companys products are designed to meet the diverse and evolving requirements of its customers while maintaining consistent quality and operational excellence.

The Company firmly believes that its employees are its greatest strength and remains committed to safeguarding their health, safety, and well-being. It continues to pursue sustainable growth by creating long-term value for all stakeholders through operational efficiency, technological advancement, environmental responsibility, and sound corporate governance practices.

FINANCIAL HIGHLIGHTS

The summarized financial performance of the Company for the financial year ended 31 March 2026 is presented below:

Details of financials as per IND AS: (Rs. in Lakhs)

Particulars	Financial Year (2024-25)	Financial Year (2025-26)	% Increase / % Decrease (-)
Revenue from Operations	18,027.07	17,933.91	-0.52%
Add: Other Income	63.67	84.99	33.49%
Total Income of the Company	18,090.74	18,018.90	-0.40%
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	845.03	751.45	-11.07%
Less: Depreciation / Amortization / Impairment	191.87	200.87	4.69%
Profit before Finance Costs, Exceptional items and Tax Expense	653.16	550.58	-15.71%
Less: Finance Costs	253.07	219.36	-13.32%
Profit before Exceptional items and Tax Expense	400.09	331.22	-17.21%
Profit before Tax Expense	400.09	331.22	-17.21%
Less: Tax Expense (Current & Deferred)	117.51	94.48	-19.60%
Profit for the year (1)	282.58	236.74	-16.22%
Add: Other Comprehensive Income (2)	-3.90	2.21	-156.67%
Total Comprehensive Income (1+2)	278.68	238.95	-14.26%
Add: Balance of profit/loss for earlier years	3,976.30	4,254.98	7.01%
Add: Revaluation Reserve	48.56	48.56	0.00%
Balance carried forward	4,303.54	4,542.49	5.55%

OPERATIONAL REVIEW AND FUTURE PROSPECTS

A summary of your Companys primary operational indicators is presented below: (Rs. in Lakhs)

Particulars	Financial Year (2024-25)	Financial Year (2025-26)	% Increase / % Decrease (-)
Revenue from Operations	18,027.07	17,933.91	-0.52%
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	845.03	751.45	-11.07%
Profit before Tax Expense	400.09	331.22	-17.21%
Profit for the year	282.58	236.74	-16.22%

During the financial year under review, the global business environment remained challenging due to geopolitical uncertainties, the imposition of import tariffs in certain international markets, persistent supply chain disruptions, inflationary pressures on key raw materials and logistics costs, and volatility in foreign exchange rates. Despite these external challenges, the Company demonstrated resilience by maintaining stable operational performance.

Revenue from Operations stood at ^17,933.91 lakhs as compared with ^18,027.07 lakhs in the previous financial year, representing only a marginal decline of 0.52%. The revenue was also impacted by a planned shutdown of approximately one month for the installation and commissioning of the new 4.5 MW high-efficiency co-generation turbine and the modernization of key plant and machinery.

The challenging business environment, coupled with higher input costs and foreign exchange fluctuations, affected the Companys profitability during the year. Consequently, the Profit after Tax for the financial year stood at ^236.74 lakhs, compared with ^282.58 lakhs in the previous year.

To mitigate these challenges, the Company continued to adopt a balanced procurement strategy by sourcing both imported and domestic raw materials while maximizing the utilization of locally available agro-based fuel, particularly rice husk, for captive power generation. This strategy has enabled the Company to optimize manufacturing costs while reducing dependence on conventional sources of energy.

The Company successfully completed a significant modernization and capacity expansion program during March 2026 through the replacement of its existing 3 MW turbine with a new 4.5 MW high-efficiency co-generation turbine, along with the upgradation of key manufacturing equipment. Consequently, the Companys installed production capacity has increased from 33,000 Metric Tons (MT) per annum to 66,000 Metric Tons (MT) per annum.

As the expanded facilities commenced commercial operations towards the end of the financial year, their full operational and financial benefits were not reflected in the financial results for FY 2025-26. The Board is confident that the enhanced production capacity, improved operational efficiencies, and lower energy costs will contribute positively to the Companys financial performance in the coming years, subject to prevailing market conditions.

SHARE CAPITAL

The Authorized, Issued, Subscribed and Paid-up Share Capital of the Company as on 31 March 2026 is as under:

Particulars	No of Shares	Face value per share (in Rs.)	Amount (in Rs.)
Authorized Share Capital	70,00,000	10	7,00,00,000
Issued, subscribed and paid- up equity share capital	13,07,260	10	1,30,72,600

During the financial year under review, there was no change in the Authorized, Issued, Subscribed or Paid-up Share Capital of the Company.

DIVIDEND

With a view to conserving financial resources for future growth, modernization, and capacity expansion, your directors do not recommend any dividend for the financial year ended 31 March 2026.

CHANGE IN THE NATURE OF BUSINESS

During the financial year under review, there was no change in the nature of the Companys business. The Company continues to operate in a single business segment, namely the manufacturing of paper and paper products. However, the Company has strengthened its manufacturing capabilities through strategic investments in modernization and capacity enhancement.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes or commitments affecting the financial position of the Company between the end of the financial year, i.e., 31 March 2026, and the date of this Report.

STATE OF THE COMPANY

During the financial year under review:

1. The Company continued to operate in a single business segment, namely the manufacturing of paper and paper products.

2. There was no change in the status of the Company.

3. There was no change in the financial year of the Company.

4. The Company incurred capital expenditure of approximately ^10.68 crore towards the installation of a 4.5 MW co-generation turbine and the modernization and upgradation of plant and machinery.

5. The above investment has resulted in modernization and expansion of the Companys manufacturing facilities.

6. There were no acquisitions, mergers, amalgamations, or restructuring transactions during the year.

CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents as at 31 March 2026 stood at ^198.15 lakhs. The Company continues to maintain a prudent working capital management policy by closely monitoring receivables, inventories, and other working capital parameters to ensure adequate liquidity and operational efficiency.

EARNINGS PER SHARE (EPS)

Particulars	2025-2026(In Rs.)	2024-2025(In Rs.)	% Increase/ decrease (-)
Earnings per share(EPS)	18.11	21.62	-16.23%

The Earnings Per Share (EPS) for the financial year stood at ^18.11 as against ^21.62 in the previous financial year. INSURANCE

All the properties and assets of the Company, including buildings, plant and machinery, inventories, stores, and other insurable assets, are adequately insured against major risks such as fire, earthquake, burglary, terrorism, and other applicable risks. The Company periodically reviews its insurance coverage to ensure that its assets are adequately protected.

DEPOSITS

During the financial year under review, the Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, no amount of principal or interest on public deposits was outstanding as on 31 March 2026.

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CREDIT RATING

The Company has not obtained an external credit rating for the financial year ended March 31, 2026, as its aggregate outstanding bank borrowings fall below the statutory threshold requiring mandatory credit assessment.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are disclosed in the Notes forming part of the Financial Statements.

During the financial year under review, the Company did not grant any loan or provide any guarantee requiring disclosure under Section 186 of the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is an integral part of this Annual Report and provides a detailed review of the Companys business environment, industry outlook, operational performance, opportunities, risks, and future prospects.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has established adequate internal financial controls commensurate with the size, scale, and complexity of its operations.

The Internal Audit function operates independently and reports functionally to the Chairman of the Audit Committee and administratively to the Managing Director. The scope, authority, and responsibilities of the Internal Audit function are defined in the Internal Audit Charter.

The Internal Audit Department periodically reviews the adequacy and effectiveness of the Companys internal control systems, compliance with applicable laws and regulations, adherence to established policies and procedures, and the reliability of financial reporting.

The audit observations, together with management responses and corrective actions, are regularly placed before the Audit Committee. The Committee reviews the effectiveness of internal controls and monitors the implementation of recommendations to strengthen the overall control environment.

The Board is of the opinion that the Company has adequate internal financial controls with reference to the Financial Statements and that such controls are operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Section 135 of the Companies Act, 2013, concerning Corporate Social Responsibility were not attracted to the Company during the financial year 2025-26, as the Company did not meet the statutory thresholds of net worth, turnover, or net profit specified therein. Consequently, the calculation of the average net profit for the preceding three financial years yielded a Nil CSR obligation, and no CSR expenditure was required to be incurred.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There were no unpaid or unclaimed dividends or corresponding equity shares required to be transferred to the Investor Education and Protection Fund (IEPF) during the financial year ended 31 March 2026, in accordance with the provisions of Section 125 of the Companies Act, 2013 and the applicable Rules made thereunder.

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

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished below:

A. Conservation of Energy

The Company continues to focus on energy conservation through continuous process improvements, modernization of equipment, and optimum utilization of renewable energy resources.

The Company operates Renewable Energy Captive Power Plants (CPPs), which significantly reduce dependence on grid power, lower electricity costs, enhance energy security, and contribute towards environmental sustainability by reducing carbon emissions.

The Companys captive power generation is primarily based on rice husk, an agro-based renewable fuel, which substantially reduces the carbon footprint compared to conventional fossil fuels.

The key benefits of the Captive Power Plant include:

• Reduction in electricity cost.

• Reliable and uninterrupted power supply.

• Improved environmental sustainability.

• Enhanced energy independence.

• Better operational efficiency and support under various Government initiatives promoting renewable energy.

During the year, the Company successfully commissioned a new 4.5 MW high-efficiency co-generation turbine, replacing the existing 3 MW turbine, thereby increasing the installed manufacturing capacity to 66,000 MT per annum.

Since the project was commissioned during March 2026, the full operational and financial benefits are expected to accrue during FY 2026-27.

The paper industry is energy intensive, and the Company remains committed to reducing energy consumption through continuous technological improvements and adoption of energy-efficient practices across its manufacturing facilities.

The following initiatives were undertaken during the year:

Electrical Energy

• Installation and operation of energy-efficient pumps for ETP, STP, water supply and fire protection systems.

• Extensive use of LED lighting across manufacturing units and office premises.

• Process optimization and operational control to minimize energy consumption.

• Installation of Variable Frequency Drives (VFDs) and other energy-efficient electrical equipment.

• Continuous monitoring of specific energy consumption to improve operational efficiency.

Although the benefits of these measures cannot be quantified precisely in monetary terms, they have contributed to improved operational efficiency and reduced energy consumption.

Water Conservation

The Company has implemented several water conservation measures, including:

• Rainwater harvesting and groundwater recharge.

• Replacement of underground water pipelines with above-ground pipelines to minimize leakages.

• Treatment and reuse of wastewater through an efficient Effluent Treatment Plant (ETP).

B. Technology Absorption

The Companys products are manufactured using its own in-house technical expertise and established manufacturing processes. No foreign technology was imported or absorbed during the financial year.

The Company continues to undertake continuous in-house research and development aimed at improving product quality, enhancing production efficiency, reducing environmental impact, and promoting sustainable manufacturing practices.

C. Foreign Exchange Earnings and Outgo Imports and Expenditure in Foreign Exchange

Details relating to imports of raw materials, capital goods and stores & spare parts are provided in Note No. 36 to the Financial Statements.

Value of Imports (C.I.F.) Value in respect of (Rs. in lakhs)

Particulars	As at 31.03.2025	As at 31.03.2026
(a) Raw materials	1494.71	853.06
(b) Capital goods	18.91	-
(c) Stores & spare parts	33.41	10.56

Foreign Exchange Earnings and Outgo

Foreign exchange earnings from exports during the financial year are summarized below:

Particulars	For the year ended on 31/03/2026	For the year ended on 31/03/2025	% Increase/decrease (-)
Earning in Foreign Currency on account of export of goods	2024.00	1533.57	31.98%

The Companys exports extend to Gulf, European, Asian, and other countries all over the world. During the year under review, the Company recorded an increase of 31.98% in export earnings. Detailed information regarding foreign exchange earnings and outgo is provided under Note No. 36 of the Notes to Financial Statements for the financial year ended March 31, 2026.

DEVELOPMENTS IN INDUSTRIAL RELATIONS AND HUMAN RESOURCES

Human resources are the key drivers of success for our organization, and the Company remains dedicated to cultivating a safe, progressive, and rewarding work environment. Operating in a labor-intensive segment of the paper manufacturing industry, we are committed to maintaining a workplace culture that attracts, develops, and retains top talent. During the year under review, industrial relations remained cordial and harmonious across all levels of the organization. As of March 31, 2026, the Company had 213 permanent employees on its rolls.

CORPORATE GOVERNANCE REPORT

Conforming to the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate and detailed Report on Corporate Governance forms an integral part of this Directors Report. A Certificate from the statutory auditors of the Company confirming compliance with the conditions of Corporate Governance is also attached as an Annexure to the report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company maintains a policy of zero tolerance toward sexual harassment at the workplace and is committed to providing a safe and secure work environment. In line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the rules framed thereunder, the Company has constituted the Internal Committee (IC) at its workplaces to address and redress any complaints received.

Pursuant to Section 134 of the Companies Act, 2013, read with Rule 8(5)(x) of the Companies (Accounts) Rules, 2014, the summary of complaints received and disposed of during the Calendar Year ended December 31, 2025, and the Financial Year ended March 31, 2026, is detailed below:

• Number of complaints pending at the beginning of the year: Nil

• Number of complaints received during the year: Nil

• Number of complaints disposed of during the year: Nil

• Number of complaints pending at the end of the year: Nil

DIRECTORS CESSATION, RETIREMENT, APPOINTMENT AND RE-APPOINTMENT

Pursuant to the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. Tanmay Sangal (DIN: 01297057), Non-Executive Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment for shareholder approval.

Similarly, Mr. Vinayak Sangal (DIN: 06833351), Non-Executive Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment for shareholder approval.

The tenure of Mr. Himanshu Sangal (DIN: 00091324) as Managing Director expired on March 31, 2026. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved his reappointment for a further term of 5 (five) years effective from April 1, 2026, up to March 31, 2031. Prior shareholder approval for this re-appointment was obtained at the 45th AGM held on September 26, 2025.

The tenure of Mr. Amit Sangal (DIN: 00091486) as Whole-Time Director expired on March 31, 2026. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors approved his reappointment for a further term of 5 (five) years effective from April 1, 2026, up to March 31, 2031. Prior shareholder approval for this re-appointment was obtained at the 45th AGM held on September 26, 2025.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Company maintains an optimum combination of Executive, Non-Executive, and Independent Directors on its Board, ensuring a balance of industry expertise, deep business insights, and functional specialization.

• Board of Directors:

o Mr. Sapan Sodhi (Chairman & Independent Non-Executive Director) o Mr. Himanshu Sangal (Managing Director) o Mr. Amit Sangal (Whole-Time Director cum CFO) o Mr. Tanmay Sangal (Non-Executive Director) o Mr. Vinayak Sangal (Non-Executive Director) o Mrs. Vartika Malik (Independent Non-Executive Women Director)

• Key Managerial Personnel (KMPs):

o Mr. Himanshu Sangal (Managing Director)

o Mr. Amit Sangal (Whole-Time Director & Chief Financial Officer)

o Mr. Anant Vats (Company Secretary & Compliance Officer, Membership No. F-5575)

BOARD EVALUATION

In accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the provisions of the Companies Act, 2013, the Board has carried out a formal annual evaluation of its own performance, its collective committees (Audit, Nomination and Remuneration, and Stakeholders Relationship Committees), and individual directors. The performance evaluation criteria, parameters, and structured framework used for this exercise are explained in detail within the Corporate Governance Report.

DIRECTORS APPOINTMENT AND REMUNERATION POLICY

Pursuant to Section 178(3) of the Companies Act, 2013, and SEBI Listing Regulations, the Board has adopted a comprehensive policy for the selection, appointment, and remuneration of Directors and Senior Management personnel. This policy sets out the criteria for determining qualifications, positive attributes, and independence. The complete policy details are disclosed in the Corporate Governance Report and are accessible on the website of the Company at www.sangalpapers.com.

INDEPENDENT DIRECTORS AND THEIR DECLARATIONS

Mr. Sapan Sodhi (DIN: 10178992) and Mrs. Vartika Malik (DIN: 00687839) were appointed as Independent Directors by the shareholders at the 43rd AGM held on August 24, 2023, for a term of 5 consecutive years up to the conclusion of the 48th AGM.

The Company has received explicit annual declarations from both Independent Directors under Section 149(7) of the Companies Act, 2013, confirming that they meet all criteria of independence as stipulated under Section 149(6) of the Act and Regulation 25 of the SEBI (LODR) Regulations, 2015.

FAMILIARIZATION PROGRAM AND INDEPENDENT DIRECTORS MEETING

During the financial year under review, a separate meeting of the Independent Directors was held to evaluate the performance of the non-independent directors, the Board as a whole, and the flow of information. Additionally, the Company conducts regular familiarization and orientation programs for its directors to keep them updated on industry trends, business models, and regulatory updates. The performance framework and details of these training programs are available in the Corporate Governance Report and on the corporate website (www.sangalpapers.com).

BOARD DIVERSITY

The Company recognizes the commercial and strategic value of a highly diverse Board. We firmly believe that a diverse boardroom brings a variety of perspectives, skills, geographical insights, age brackets, gender inclusion, and corporate knowledge that helps the Company sustain its long-term competitive advantage.

MEETINGS OF BOARD OF DIRECTORS AND ITS COMMITTEES

BOARD OF DIRECTORS MEETING

No of Meetings	Date of Meeting	Total No. of Directors	Directors present	Directors on leave of absence
1.	12/04/2025	6	6	NIL
2.	30/05/2025	6	6	NIL
3.	26/06/2025	6	6	NIL
4.	24/07/2025	6	5	1
5.	13/08/2025	6	6	NIL
6	14/11/2025	6	6	NIL
7	13/02/2026	6	6	NIL

AUDIT COMMITTEE MEETING

No. of Meetings	Date of Meeting	Total No. of Directors	Directors present	Directors on leave of absence
1.	30/05/2025	3	3	NIL
2.	13/08/2025	3	3	NIL
3.	14/11/2025	3	3	NIL
4.	13/02/2026	3	3	NIL

NOMINATION AND REMUNERATION COMMITTEE MEETING

No. of Meetings	Date of Meeting	Total No. of Directors	Directors present	Directors on leave of absence
1.	13/08/2025	3	3	NIL

STAKEHOLDERS RELATIONSHIP COMMITTEE MEETING

No. of Meetings	Date of Meeting	Total No. of Directors	Directors present	Directors on leave of absence
1.	14/11/2025	3	3	NIL

All the meetings were held in accordance with the applicable provisions of the Companies Act, 2013 and Rules made there under. The details of which are given in the Corporate Governance Report. The maximum interval between any two meeting of the Board of Directors and the Audit Committee, did not exceed 120 days, as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDIT COMMITTEE RECOMMENDATIONS

During the year, all the recommendations of Audit Committee were reviewed and approved by the Board of Directors, if any.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNAL

There are no significant or material orders passed by regulators, courts, statutory tribunals, or stock exchanges impacting the going concern status of the Company or its future business operations.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the operating management, confirm that:

• Accounting Standards: In the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

• Accounting Policies: They have selected such accounting policies and applied them consistently, making 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 of the profit of the Company for that period;

• Safeguarding Assets: They have 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;

• Going Concern: They have prepared the annual accounts on a going concern basis;

• Internal Financial Controls: They 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

• Compliance Systems: They have devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems are adequate and operating effectively.

INTERNAL FINANCIAL CONTROL SYSTEM

The Companys Internal Financial Control System is designed to ensure the risk-managed effectiveness and efficiency of corporate operations, accurate financial reporting, and strict compliance with applicable laws and regulations. The Company has adopted structured policies and procedures to ensure the orderly conduct of its business, including adherence to Company policies, safeguarding corporate assets, preventing and detecting fraud and errors, maintaining accounting accuracy, and completing timely financial disclosures.

RELATED PARTY TRANSACTIONS

All transactions with related parties during FY 2025-26 were in the ordinary course of business and on an arms length basis. No transactions were entered into on a non-arms length basis. Arrangements involving an office or place of profit exceeded the statutory threshold of ^2.50 Lakhs per month and are classified as material. Prior approval for these transactions was obtained from members via Special Resolutions. Details of these material arms length arrangements are disclosed in Section II of Form AOC-2, annexed as Annexure-I.

SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture, or Associate Company. Consequently, statements in Form AOC-1 are not required to be attached to this report.

CODE OF CONDUCT

The Board of Directors has adopted a unified Code of Conduct applicable to all Board members and Senior Management personnel. The Company maintains a policy of Zero Tolerance against bribery, corruption, and unethical trade practices. The framework, formally known as the Code of Business Conduct, is hosted on the Companys website at sangalpapers.com.

The Code establishes standard business operating practices, emphasizing integrity, workplace professionalism, and transparent stakeholder interaction. All Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the financial year 2025-26.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013, and Regulation 22 of the SEBI (LODR) Regulations, 2015, the Company has established a Whistle Blower Policy and Vigil Mechanism framework for Directors and employees. This mechanism provides a secure avenue to report genuine concerns, financial regularities, or unethical conduct without

fear of retaliation or victimization. The details of the policy are outlined within the Corporate Governance Report and are available on the website of the Company at www.sangalpapers.com.

STATUTORY AUDITORS

In terms of Section 139 of the Companies Act, 2013, and the rules framed thereunder, M/s Raj Viyom & Co. (formerly known as M/s Raj Sandhya & Co.), Chartered Accountants, were appointed as the Statutory Auditors of the Company by the shareholders at the 42nd Annual General Meeting for a second consecutive term of 5 (five) years. They continue to hold office from the conclusion of the 42nd AGM until the conclusion of the 47th AGM to be held in the calendar year 2027.

AUDITORS REPORT AND FRAUD DISCLOSURES

• Statutory Audit Observations: The Statutory Auditors Report for the financial year ended March 31, 2026, does not contain any qualifications, reservations, adverse remarks, or disclaimers. The notes accompanying the financial statements are self-explanatory and require no further explanation under Section 134 of the Act.

• Reporting of Fraud by Auditors: During the financial year under review, no instances of fraud committed against the Company by its officers or employees were reported by the Statutory Auditors, Cost Auditors, or Secretarial Auditors under Section 143(12) of the Companies Act, 2013. Hence, no disclosures are required under Section 134(3)(ca) of the Act.

COST AUDIT

Pursuant to Section 148 of the Companies Act, 2013, Mr. S. R. Kapur, Cost Accountant (Membership No. M-4926; Address: A-16 (G.F.), Ansal Courtyard, Bye Pass Road, Modipuram Crossing, Meerut, UP-250001), was appointed by the Board as the Cost Auditor to conduct the audit of the Companys cost records for the financial year ended March 31, 2026. The Board has further re-appointed them as Cost Auditors for the succeeding financial year 2026-27, subject to the ratification of their remuneration by shareholders at the ensuing AGM.

SECRETARIAL AUDITOR AND COMPLIANCE REPORTS

M/s. D.K. Gupta & Co., Practicing Company Secretaries (FCS No. 5226, CP No. 3599), continues as the Secretarial Auditor following the 5-year tenure appointment approved at the 45th AGM (covering financial years 2025-26 to 2029-30). The Secretarial Auditor has issued the Secretarial Audit Report (Form MR-3), the Annual Secretarial Compliance Report, and a certificate confirming that no Director is debarred or disqualified by SEBI/MCA.

These reports contained observations regarding a 5-day technical delay due to an inadvertent clerical error in submitting the correct June 2025 quarterly XBRL files under Regulation 27(2) and Regulation 13(3) of SEBI (LODR) Regulations, 2015. This resulted in BSE base penalties of ^10,000 and ^5,000 respectively (plus applicable GST, totaling ^11,800 and ^5,900), which were fully paid via UTR No. INB/NEFT/AXODH14011010469/bse limited/ICICI BANK LIMITED dated 20th May 2026. The Secretarial Auditor also noted temporary website accessibility issues due to a technical restoration process, which was reported to the BSE on 6th May 2026 and 22nd May 2026. All reports are annexed to this Boards Report.

Boards Explanation on Auditors Observations:

• Filing Delays: The original quarterly submissions were uploaded on time on July 9, 2025. However, due to an inadvertent clerical error, previous quarter XBRL files were attached to the portal. Correct files were

uploaded immediately upon BSE notification on August 4, 2025. Payment was completed on May 20, 2026, and data cross-verification protocols have been reinforced to eliminate future attachment errors.

• Website Accessibility: Due to unforeseen technical difficulties, the official corporate website (www.sangalpapers.com) underwent a structural restoration process, causing historic data to be temporarily unavailable. The exchange was duly informed on May 6, 2026, and May 22, 2026. All missed data, documents, and previously disclosed filings have since been fully restored and updated on the website prior to the issuance of the Secretarial Audit Report.

PREVENTION OF INSIDER TRADING:

In January 2015, SEBI notified the SEBI (Prohibition of Insider Trading) Regulations, 2015 with various amendments Pursuant thereto, the Company has formulated and adopted a Code of practice for fair disclosure of unpublished price sensitive information and Code of Conduct. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees are in compliance with the Code and the same has been informed under Code of Conduct section of this report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR:

The Company has neither made any application nor any proceeding pending under Insolvency and Bankruptcy Code, 2016 during the financial year 2025-26.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTION:

The Company has not made any one-time settlement during the financial year 2025-26 with Banks or Financial Institution.

DISCLOSURE OF CERTAIN TYPE OF AGREEMENTS BINDING ON THE COMAPNY

Pursuant to Clause 5A of Para A of Part A of Schedule III of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015, that the Company/ Board did not received any information (mentioned in Clause 5A of Para A of Part A of Schedule III of SEBI listing regulation) during the relevant financial year from its Shareholders, Promoters, Promoter Group Entities, Related Parties, Directors, Key Managerial Personnel, Employees of the Company or of its holding, subsidiary or associate company, among themselves or with the listed entity or with a third party, solely or jointly, which, either directly or indirectly or potentially or whose purpose and effect is to, impact the management or control of the listed entity or impose any restriction or create any liability upon the listed entity and also any rescission, amendment or alteration of such agreements thereto, whether or not the listed entity is a party to such agreements.

ANNUAL RETURN

Annual Return in Form MGT-7 is available in the website of the Company www.sangalpapers.com

PARTICULARS OF EMPLOYEES

The provisions of Rule 5 (2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (include any modification or amendment thereof, if any) requiring particulars of the employees in receipt of remuneration in excess of Rupees One Crore and Two Lakh per year and Rupees Eight lakh Fifty Thousand per month only to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rupees One Crore and Two Lakh per year and Rupees Eight lakh Fifty Thousand per month during the financial year 2025-2026.

The information required under section 197 (12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as Annexure -II .

ACKNOWLEDGEMENT:

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistant.

For and on Behalf of Board of Directors For Sangal Papers Limited

Date:13.08.2026	Amit Sangal	Himanshu Sangal
Place: Mawana	Whole Time Director/CFO	Managing Director
	DIN-00091486	DIN -00091324