Sonal Adhesives Ltd Auditor Reports

To The Members of Sonal Adhesives Limited

Report on the Audit of the Standalone IND AS Financial Statements

Opinion

I have audited the accompanying standalone IND AS financial statements of Sonal Adhesives Limited, (‘the Company), which comprise the Balance Sheet as at 31 Mar 2025, the Statement of Profit and Loss (including Other Comprehensive Income), Cash Flow Statement and Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information.

In my opinion and to the best of my information and according to the explanations given to me, the aforesaid standalone IND

AS financial statements give the information required by the Companies Act, 2013 (the ‘Act) in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including Indian Accounting Standards(‘Ind AS) specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2025, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis of Opinion

I conducted my audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. My responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to my audit of the provisions of the Companies Act, 2013 and the Rules thereunder, and I have fulfilled my other financial ethical responsibilities in accordance with these requirements and the Code of Ethics. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Key Audit Matters

Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

I have determined the matters described below to be the key audit matters to be communicated in my report.

a) Revenue recognition from sale of goods	Our audit procedures included the following:
The Company recognizes revenues when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. In determining the sales price, the Company considers the effects of rebates and discounts (variable consideration). The terms of arrangements in case of domestic and exports sales, including the timing of transfer of control, the nature of discount and rebates arrangements, delivery specifications and other contractual and commercial terms, are relevant factors in determining the timing and value of revenue to be recognized.	Assessed the appropriateness of the Companys revenue recognition accounting policies, including those relating to rebates and trade discounts by comparing with the applicable accounting standard – Ind AS 115 ("Revenue from Contracts with Customers");
	Evaluated the design, implementation and tested the operating effectiveness of the relevant key controls with respect to revenue recognition including general information and technology control environment, key IT application controls over recognition of revenue.
	Performed substantive testing including analytical procedures on selected samples of revenue transactions recorded during the year by testing the underlying documents including contracts, invoices, goods dispatch notes, shipping documents and customer receipts, wherever applicable.
	Understood and evaluated the Companys process for recording of the accruals for discounts and rebates and ongoing incentive schemes and on a test basis, verified the year-end provisions made in respect of such schemes.
The Company considers revenue as a key performance measure which could create an incentive for overstatement revenue.	Performed analytical review procedures on revenue recognised during the year to identify any unusual variances.
	On a sample basis, performed balance confirmation and alternative procedures, where required, for the balance outstanding as on March 31, 2025.
Owing to the volume of sales transactions spread across various locations and geographies along with varied terms of contracts with customers, there is a risk of revenue being recognized before control is transferred.	Tested a select sample of revenue transactions recorded before the financial year end date to determine whether the revenue has been recognised in the appropriate financial period and in accordance with the applicable contractual terms with the relevant customer.
a) Revenue recognition from sale of goods
Based on above, revenue recognition has been considered as a key audit matter for the current years audit.	Tested manual journal entries posted to revenue to identify any unusual items.
	Assessed the appropriateness of disclosures in the financial statements in respect of revenue recognition in accordance with the applicable requirements.
b) Contingencies Note No. 32 to the standalone IND AS Financial Statements which inter-alia describes the uncertainty related to the outcome of the Certain Tax Litigation against the Company	Our audit procedures included and were not limited to the following:
	Tested the design, implementation and operating effectiveness of the controls established by the Company in the process of evaluation of litigation matters.
	Assessed the managements position through discussions with the in- house legal expert and external legal opinions obtained by the Company (where considered necessary) on both, the probability of success in the aforesaid cases, and the magnitude of any potential loss.
	Discussed with the management on the developments in respect of these litigations during the year ended 31st March 2025 till the date of approval of the financial statements.
	Reviewed the disclosures made by the Company in the financial statements.
	Obtained Management representation letter on the assessment of these matters.

Information other than the Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and my auditors report thereon.

My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is no material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Responsibility of Management for the Standalone IND AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the

Act") with respect to the preparation and presentation of these standalone IND AS financial statements that give a true and fair view of the financial position, financial performance equity of the Company in accordance with the accounting principles generally accepted in India, including the Accounting

Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone IND

AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the companys financial reporting process

Auditors Responsibility

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free misstatement, whether due to fraud or error, and to issue an auditors report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, I am also responsible for explaining my opinion on whether the

Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists relatedtoeventsorconditionsthatmaycastsignificantdoubt on the Companys ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial Statements may be influenced. factors in (i) planning the scope of our audit work and in evaluating the results of my work; and (ii) to evaluate the effect of any identified misstatements in the standalone Financial Statements.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

I am independent of the Company in accordance with the ethical requirements that are relevant to our audit of the Standalone

Financial Statements and I have fulfilled my other ethical responsibilities in accordance with these requirements.

Report on other legal and regulatory requirements i. As required by The Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of subsection(11) of section 143 of the Act, I give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the said order. ii. As required by section 143(3) of the Companies Act 2013, based on my audit I report to the extent applicable that: a. As described in the Basis of Opinion Paragraph, I was able to obtain all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit; b. In my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books; c. The Company has no branches hence, the provisions of section 143(3)(c) is not applicable. d. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of

Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account; e. Except for the effects of the matter described in the Basis for Qualified Matter paragraphs in my opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of theAct; f. There are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the company.

26 g. On the basis of written representations received from the directors as on 31st March, 2025, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2025, from being appointed as a director in terms of Section 164(2) of the Act. h. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to separate report in "Annexure B", i. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. j. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of my information and according to the explanations given to me: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone IND AS financial statements- Refer Note 32 to the standalone IND AS financial statements; ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses, iii. The amounts which were required to be transferred to the Investor Education and Protection Fund by the Company have been transferred. iv. 1. The management has represented that, to the best of its knowledge and belief, as disclosed in note no. 40(d) to the accounts, No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Holding Company or its subsidiary companies and joint venture company incorporated in India or

provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

2. The management has represented, that, to the best of its knowledge and belief, as disclosed in note no. 40(e) to the accounts, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

3. Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of rule 11(e) as provided under clause (1) and (2) contain any material misstatement. v. The company has neither declared nor paid any dividend during the year. Hence, reporting the compliance with section 123 of the Act is not applicable. vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account for the financial year ended March 31, 2025, which has a feature of recording audit trail (edit log) facility and the same has been operative throughout the year for all relevant transactions recorded in the software systems. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with. vii. The audit trail has been preserved by the Company as per the statutory requirements for record retention.

	M. C. Asawa & Co.
	Chartered Accountants
	FRN: 008041C
	Mukund Sarda
Place: Khopoli	Proprietor
Date: 29th May, 2025	M. No. 163405

ANNEXURE- A TO THE INDEPENDENT AUDITORS REPORT

The annexure referred to my Independent Auditors Report to the members of the company on the standalone IND AS financial statements for the year ended 31^st March 2025, I report that:

1. Details of tangible and intangible assets

1. The company has maintained proper records showing full particulars, including quantitative details and situation of tangible and intangible assets.

2. Fixed assets have been physically verified by the management at reasonable intervals. I have been informed that no material discrepancies were noticed on such verification.

3. Whether the material discrepancies, if any, noticed on physical verification have been accounted for in the books of accounts.

4. According to the information and explanations given to me and on the basis of my examination of the records of the Company, all the title deeds of immovable properties are held in the name of the Company, except properties which are leased by the company with duly executed lease agreements in the companys favour.

5. No revaluation has been done by the company of its property, plant and equipment (including the right of use assets) or intangible assets or both during the year.

6. No proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

2. Details of inventory and working capital

1. As explained to me, the inventory of the company has been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on physical verification.

2. The company, during any point of time of the year has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets

3. As company has no sanctioned working capital, there are no quarterly returns or statements filed by the company with financial institutions or banks. Thus, this clause is not

3. Details of investments, any guarantee or security or advances or loans given

1. As per the information and explanations given to me and the records produced before me for my verification, the Company has not granted unsecured loan to companies, firms, LLPs or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, clause 3 (iii) (a) & (b) of the Order is not applicable to the Company.

4. Compliance in respect of a loan to directors

1. The company has not given any loans to directors or any other person in whom the director is interested, or made any investments.

5. Compliance in respect of deposits accepted

1. The company has not accepted deposits or deemed deposits, compliance with the provisions prescribed for accepting deposits under section 73 to 76 of the Companies Act, 2013 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6. Maintenance of Cost Records

1. As per the information and explanations provided to us, the Company has maintained cost records as prescribed by the Central Government under Section 148(1) of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014.

2. Based on the information made available, we further report that cost audit is applicable to the Company, and a qualified cost auditor has been duly appointed and the cost audit has been conducted in accordance with the applicable provisions of the said Rules.

7. Deposit of statutory liabilities

1. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Goods & Service Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.

2. There were no undisputed amounts payables in respect of Provident Fund, Employees State Insurance, Income-tax, Goods & Service Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2025 for a period of more than six months from the date they became payable

3. The Company has no disputed statutory dues pending to be deposited as on 31st March 2025 in respect of provident fund, employees state insurance, income tax, good and service tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it except for the following statutory dues:

Sr. No.	Name Of Statute	Nature of Dues	Period to Which Amount Relates	Forum Where Dispute is Pending	Amounts
1	GST	ITC dispute and Interest & Penalty	01/07/2017 to 31/03/2022	GST Appellate Tribunal	20,78,869.00*

8. Unrecorded income

1. Any transactions which are not recorded in the accounts have not been disclosed or surrendered before the tax authorities as income during the year.

9. Default in repayment of borrowings

1. The company has not made any default in the repayment of loans to banks, government, debenture-holders, etc. then the amount and period of default.

2. The company has not been declared a wilful defaulter by any bank or financial institution or any other .

3. Term loans have been used for the object for which they were obtained.

4. The company has not used funds raised for a short term basis for long term purposes.

5. The company has not raised any money from any person or entity for the account of or to pay the obligations of its associates, subsidiaries or joint ventures.

6. The company has not raised any loans during the year by pledging securities held in their subsidiaries, joint ventures or associate companies.

10. Funds raised and utilisation

1. The company has not raised any funds from a public offer (equity or debt capital) during the year. Thus, this clause is not applicable.

11. Fraud and whistle-blower complaints

1. There has not been any fraud by the company or any fraud done on the company. Thus, this clause is not applicable.

12. Compliance by a Nidhi

1. This clause is not applicable since the company is not a NIDHI company.

13. Compliance on transactions with related parties

1. Transactions with related parties are in accordance with the provisions of section 177 & 188.

2. Details of the same have been disclosed in the standalone IND AS financial statements.

14. Internal audit system

1. The company has an internal audit system in accordance with its size and business activities.

2. The reports of the internal auditors have been considered by the statutory auditor.

1. Non-cash transactions

2. The company has not undertaken non-cash transactions with their directors or other persons connected to the directors, the restrictions imposed are complied with.

15. Registration under Section 45-IA of RBI Act, 1934

1. The company is not required get registration u/s 45-IA of RBI Act, 1934. Thus, this clause is not applicable.

16. Cash losses

1. The company has not incurred any cash losses in the financial year.

17. Resignation of statutory auditors

1. During the year, there has not been any resignation of statutory auditors.

18. Material uncertainty

1. There is no existence of any material uncertainty on the date of the audit report on an evaluation of: – The ageing report, financial ratios and expected dates of realisation of financial assets and payment of financial liabilities, any other information accompanying the financial statements, the auditors knowledge of the Board of Directors and management plans. – In our opinion the company can meet its the liabilities which exist as at the balance sheet date when such liabilities are due in the future.

19. Transfer to fund specified under Schedule VII of Companies Act, 2013

1. This clause is not applicable in the current financial Year.

20. Qualifications or adverse auditor remarks in other group companies

1. There have not been any qualifications or adverse remarks in the audit reports issued by the respective auditors in case of companies included in the consolidated financial statements, to indicate the details of the companies and the paragraph numbers of the respective CARO reports containing the qualifications or adverse remarks.

	M. C. Asawa & Co.
	Chartered Accountants
	FRN: 008041C
	Mukund Sarda
Place: Khopoli	Proprietor
Date: 29th May, 2025	M. No. 163405

Annexure - B to the Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

I have audited the internal financial controls over financial reporting of Sonal Adhesives Limited ("the Company") as of 31 March 2025 in conjunction with my audit of the standalone financial statements date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuringefficientconduct of its business, including the orderly and adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

My responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on my audit. I conducted audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial

Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

My audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My audit of internal financial controls over financial reporting obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the Companys internal financial controls system over financial reporting

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in the degree of compliance with the policies or procedures may deteriorate.

Opinion

In my opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2025, based on the reporting criteria established by the Company considering the essential components of internal internalcontroloverfinancial control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	M. C. Asawa & Co.
	Chartered Accountants
	FRN: 008041C
	Mukund Sarda
Place: Khopoli	Proprietor
Date: 29th May, 2025	M. No. 163405