Ganesh,
The LDAP connection is not required for Solution Manager. It's completely optional. The purpose for it is to allow Active Directory to be your user account repository for Solution Manager (and/or other SAP systems) instead of using the ABAP user store, which is the default. You would only do this if you currently use, or plan to use, Active Directory as the user store for your whole SAP landscape. You wouldn't normally do this just for Solution Manager and not for your ERP system, for instance.
Using LDAP and AD for your user strategy is a key decision point when planning your landscape strategy. It's not something you do lightly. You will need to work with your landscape architects and/or project team and overall IT strategists to determine if this is a fit for your organization.
So, the bottom line is it is not mandatory at all. We don't do it here.
We do have some LDAP synchronization between AD and ERP, but we did not extend the AD schema in any way, and we don't use AD to store the SAP user accounts. We just synchronize things like email addresses and organizational data back and forth between AD and the user masters and employee records in ERP. For that, we only needed an AD service account, no schema extension.
Regards,
Matt