Dear Members,

The Board of Directors of your Company hereby presents the 71^st report on the business and operations of your Company along with the audited financial statements for the Financial Year ended 31^st March 2025.

The Financial Statements include:

1. Standalone Financial Statements of the Company (Akzo Nobel India Limited); and

2. Consolidated Financial Statements of the Group including the operational results of ICI India Research and Technology Centre Private Limited, which is a subsidiary of the Company.

The highlights of the performance during the financial year under Report are:

(Rs. million)

* before exceptional items

The ratios computed above do not include assets and liabilities classified as held for sale.

Akzo Nobel India continued to deliver yet another strong performance in 2024-25 with new highs in absolute performance across revenue (surpassing 4,000 Cr), gross margin and EBIT from operations. In tandem with topline, we continued to deliver double-digit profitability for the sixth year in a row. Our sustained performance is a testament to our resilient business model and strategic priorities.

In our Decorative Paints business, muted demand conditions and heightened competitive pressures persisted during the year. Despite these challenging conditions, the business saw good uptick in Premium, adjacencies and Projects business. The business focused on addressing portfolio gaps in Mass & Economy categories, increasing our reach in lower tier towns and improving customer experience through digitization and automation.

Our Coatings business has been growing strongly over the past two years in the backdrop of a robust business environment. Performance was built around technology, sustainable products and strong alliances with participation in marquee projects. Our Performance Coatings find applications in Naval ships, Data Centres, Electric Vehicles and beverage cans.

While driving market share as a primary objective and sustaining profitability, your Company has been working on strategies to gain market share in the hyper-competitive environment across our Automotive & Specialty Coatings business.

Driving brand strength and distribution with innovation, color expertise and thought leadership being our objectives, our costs are aligned with growth initiatives and revenue, translating into stable profitability. During the year, we invested in supply chain and efficiencies, brand building, employee benefits and growth projects.

To maintain our competitive edge, we continue to leverage global R&D and technologies, ensuring a steady stream of innovative products tailored specifically for the Indian market. Our commitment to innovation remains unwavering as we strive to bring differentiated and value-added solutions to meet the evolving needs of our consumers.

Your Company has been following a Dividend Distribution Policy (as approved by the Board) while distributing profits to its shareholders and creating wealth for them over the years. In compliance with the requirements under Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Dividend Distribution Policy is available on the Company's website and can be accessed at https://akzonobel. co.in/pdf/policy/Dividend-Distribution-Policy.pdf.

Your Board of Directors, at its meeting held on 7^th November 2024, approved an interim dividend of Rs. 70/- per equity share commemorating the completion of 70 years of your Company's operations in India. This dividend was paid by the Company by December 2024 to those shareholders whose names were appearing in the Register of Members as on 20^th November 2024, being the Record Date for the aforesaid interim dividend. Your Directors are pleased to recommend a Final Dividend of Rs. 30/- per equity share for the Financial Year ended 31^st March 2025 in addition to the aforesaid interim dividend paid during the said Financial Year 2024-25. The Final Dividend, once approved by the Members at the ensuing 71^st Annual General Meeting (as scheduled on 4^th August 2025) would result in appropriation of Rs. 1,366 million (inclusive of TDS) and the same will be paid to those Members whose names appear in the Register of Members as on Friday, 25^th July 2025 (Record Date). The total dividend for the Financial Year 2024-25, including the proposed Final Dividend, thus amounts to Rs. 100/- per equity share.

Pursuant to the provisions of the Income-tax Act 1961, the dividend income is taxable in the hands of the Shareholders and the Company is required to deduct tax at source from such dividend at the prescribed rates. A communication providing detailed information and instructions with respect to tax on the Final Dividend for the Financial Year ended 31^st March 2025 is being sent separately to the Shareholders. Your Company shall, accordingly, deduct tax, as applicable, before making the said dividend payments.

Details of dividend paid by the Company earlier and not claimed so far are provided in the Corporate Governance Report appended to the Board's Report.

Details of equity shares of the Company lying in Unclaimed Suspense Account, as on 31^st March 2025, as per the provisions of Regulations 34 and 39 read with Schedule V(F) of Listing Regulations, are provided in the Corporate Governance Report forming part of the Board's Report.

Your Directors do not propose to transfer any amount to the general reserves and the entire amount of profit for the year forms part of the ‘Retained Earnings'.

The Paints industry's prospects are intricately connected to the overall growth of the country's economy. India's huge population, positive demographics, increasing urbanisation, increasing disposable income, recovering automative industry, and the government's push on infrastructure development are some of the factors which are, directly and indirectly, driving the demand of paints (both decorative and coatings products) in India.

On the flip side, fluctuations in raw material prices and stringent environmental regulations regarding volatile organic compounds (VOC) are likely to hamper the market's growth. The use of nanotechnology in the paints and coatings industry and the rising demand for eco-friendly paints are expected to offer various market growth opportunities in the near future.

By focusing on innovation, customer-centric strategies, and leveraging its strengths, your Company is well-positioned to capitalize on the anticipated growth opportunities and overcome potential challenges.

During the Financial Year under Report, AkzoNobel N.V., the ultimate holding/promoter company of your Company ("ANNV") had:

(i) in October 2024, announced the conduction of its portfolio review with initial focus on Deco South Asia. The strategic review of the portfolio is being conducted in order to redeploy capital towards growing ANNV's core coatings businesses. As per the announcement, the initial focus would be on the decorative paints' positions in South Asia where the Company has a premium, highly profitable position with a strong track record of growth. The review would be exploring various strategic options ranging from partnerships or joint ventures through to mergers or divestments; and

(ii) in January 2025, offered the Company to explore sale of its Powder Coatings Business and International Research Centre (R&D) operations of the Company by way of slump sale on a going concern basis to ANNV and purchase of ANNV's Decorative Paints Intellectual Property Rights in India, Nepal, Bhutan and Bangladesh by the Company. For the purpose of housing the aforesaid powder coatings business and international research centre operations, ANNV, on 4^th March 2025, incorporated its (indirect) 100% Wholly Owned Subsidiary (WOS) wherein the Coatings business and R&D operations of the Company as aforesaid would be transferred by way of a slump sale on going concern basis. The transfer of the aforesaid businesses and acquisition of the intellectual property rights will be subject to necessary adjustments, as may be required, prior to/on the closing date, i.e. by the 31^st December 2025, in accordance with the terms and conditions as specified in the respective Business Transfer Agreements ("BTAs") and the Intellectual Property Sale and Transfer Agreement ("IPSTA"). Execution of the BTAs and IPSTA is conditional upon the remaining approval from the Supervisory Board of ANNV. Your Company would receive the final consideration (as approved by the shareholders of the Company) for such slump sales and payment for acquisition after the aforesaid execution of BTAs and IPSTA. There was no business in the WOS as of 31^st March 2025.

In August 2022, as part of entity restructuring plan, the Board of Directors and members of Company's subsidiary namely ICI India Research and Technology Centre ("ICI R&T") approved the proposal to convert itself into a Private Limited Company from Section 8 Company Limited by Guarantee. Pursuant to that, the Regional Director granted its approval (vide letter dated 10^th May 2024) for conversion of ICI R&T into other than Section 8 Company and approved the change of name of the Company as ICI India Research and Technology Centre Private Limited after aforesaid conversion. Subsequently, the Company was granted the fresh certificate of incorporation (dated 22^nd August 2024) as a private company limited by shares from the earlier private company limited by guarantee. Reference in this regard can be from Note No 5.1 of the Financial Statements forming part of this Annual Report.

Thereafter, on 31^st March 2025, your Company invested in 12,50,000 equity shares of Re. 1/- each of ICI R&T by subscribing to the Rights Issue of ICI R&T, thereby making it a 99.99% subsidiary of your Company.

Pursuant to Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is not required to appoint any Independent Director to its aforesaid subsidiary company.

Financial Statements of the aforesaid unlisted subsidiary company were reviewed by the Audit Committee of the Company pursuant to Regulation 24(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Minutes of their Board Meetings as well as statements of all significant transactions, if any, of the said unlisted subsidiary Company are placed before the Board for their review pursuant to Regulation 24(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to Section 129(3) read with Rule 5 of the Companies (Accounts) Rules, 2014, and other applicable provisions, if any, of the Companies Act 2013 ("the Act"), a statement containing salient features of the financial statement of the subsidiary of the Company viz. ICI India Research and Technology Centre Private Limited (in Form AOC-1) forms part of this Annual Report. The Consolidated Financial Statements presented in this Annual Report include the financial results of the aforesaid subsidiary pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

In accordance with Section 136 of the Act, the financial statements of the subsidiary are available for inspection by the members of the Company at the registered office of the Company during business hours on all days up to the date of the 71^st Annual General Meeting (‘AGM') of the Company. If required, Members are requested to email a request for obtaining a copy of the said financial statements at investor.india@akzonobel.com so that the necessary arrangements can be made at the registered office of the Company. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached to this Report are also available on the website of the Company at www.akzonobel.co.in.

The paid-up share capital of the Company as on 31^st March 2025 was Rs. 455.40 million comprising 45.54 million equity shares of Rs.10/- each (Previous year Rs. 455.40 million comprising 45.54 million equity shares of Rs.10/- each).

During the year under review, the following changes took place in the Board of Directors of the Company:

(i) Mr. Amit Jain completed his tenure as Independent Director of the Company with effect from the close of business hours on 13^th August 2024. The Board of Directors of the Company took note of the completion of tenure of Mr. Amit Jain as an Independent Director of the Company as aforesaid by placing on record its sincere appreciation for the valuable contributions made by Mr. Amit Jain as an Independent Director of the Company.

(ii) Ms. Smriti Rekha Vijay resigned as an Independent Director of the Company with effect from the close of business hours on 22^nd November 2024 on account of her health conditions. She confirmed that there was no other material reason for her said resignation. The Board of Directors of your Company, in its meeting held on 22^nd November 2024, placed on record its sincere appreciation for the valuable contributions made by Ms. Vijay during her tenure as an Independent Director of the Company.

(iii) The Board of Directors of the Company, at its Meeting held on 1^st August 2024 appointed Ms. Namrata Kaul (DIN: 00994532) as an Independent Director (Woman Director) of the Company for a period of 3 (Three) years effective 5^th August 2024 to 4^th August 2027 (both days inclusive). The appointment of Ms. Namrata Kaul as an Independent Director has been approved by the Members of the Company on 12^th September 2024, by way of postal ballot. Ms. Namrata Kaul (aged 60 years) is a career banker with extensive experience of more than 37 years across Treasury, Corporate Banking, Debt Capital markets, and Corporate Finance in India, Asia and the UK with Deutsche Bank and ANZ Grindlays Bank. She has a strong history of leadership, managing and leading diverse teams, mentoring and managing conflict, working collaboratively across multiple business verticals. She is currently an Advisor and Independent Director on several corporate boards across industrial B2B, healthcare and financial services sectors ranging from renewable energy, electrical equipment and medical devices to NBFCs and asset management companies. In her last role, she served as Managing Director and Corporate Bank Head at Deutsche Bank. She holds a Post Graduate Diploma (Business, Banking, Insurance & Management) from Indian Institute of Management, Ahmedabad and B.Com. from University of Delhi.

(iv) The Board of Directors of the Company, at its Meeting held on 22^nd November 2024 appointed Mr. Anil Chaudhry (DIN: 03213517) as an Independent Director of the Company for a period of 3 (Three) years effective 22^nd November 2024 to 21^st November 2027 (both days inclusive). The appointment of Mr. Anil Chaudhry as an Independent Director has been approved by the Members of the Company on 2^nd January 2025, by way of postal ballot. Mr. Anil Chaudhry (aged 63 years) has over 40 years of experience, and has held global leadership roles across management, operations, sales, strategy, and business development, working from both Europe and India. Anil was the Founding CEO & Managing Director of Schneider Electric India Pvt. Ltd. (SEIPL). He has been recognized with many rewards and recognitions by Industry, Professional Independent Institutes and Governments Bodies for his work, especially in the field of Economic Development, Sustainability, Diversity, Energy Transition and Equity. Anil has published and presented numerous technical and concept papers at various national and international seminars for application of digital technology, automation & IoT for energy management and efficiency for smart infrastructure and smart cities. He is determined to setup new benchmarks for the usage of innovative techniques to provide world class solutions & services to customers and is extremely passionate towards promoting diversity & inclusion and has championed initiatives throughout his career towards this. By qualification, Anil is an engineering graduate (BE) from Thapar Institute of Engineering & Technology, Patiala, India, and had pursued Executive Management Programs from Harvard Business School, Stanford Business School and INSEAD.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Krishna Rallapalli (DIN: 03384607) is due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment.

The Board recommends his re-appointment.

During the year under review, pursuant to the Board's approval, the Registered Office of your Company got shifted within the local limits of Kolkata (West Bengal) from Geetanjali Apartment, 1^st Floor, 8B, Middleton Street, Kolkata – 700071 (West Bengal) to 801A, South City Business Park, 770, Anandapur, Eastern Metropolitan Bypass, Near Fortis Hospital, Kolkata – 700107 (West Bengal), with effect from 30^th October 2024.

During the year under review, your Company, on 5^th September 2024, had commenced commercial production of the powder coating products from its plant at Gwalior, Madhya Pradesh, India, with an installed production capacity of 5,166 T per annum (original installed production capacity) which can be expanded basis future demand. Further, this commercial production is aimed at supporting capacity expansion considering the service level need of the powder coating market demand of the Company mainly in North and Eastern India. An amount of H 1,050 million (approx.) is the Investment of the Company towards the aforesaid, and the same has been funded through internal accruals.

Your Company efficiently managed working capital and generated cash from operations of Rs. 4,761 million during the year under review. Your Company had NIL borrowings as at the end of Financial Year 2024-25. Your Company's debt equity ratio was 4.7 as at 31^st March 2025.

Capital expenditure incurred during the year aggregated to Rs. 1,065 million.

During the year, your Company has not invited, accepted, or renewed any fixed deposits from the public and accordingly, there is no principal or interest outstanding in respect thereof.

In terms of the SEBI Listing Regulations, the Management Discussion and Analysis Report is appended to this Annual Report.

Your Company is committed to maintain the highest standards of Corporate Governance and has complied with the Corporate Governance requirements as per the SEBI Listing Regulations. A separate report on Corporate Governance as stipulated under the SEBI Listing Regulations along with a Certificate of Compliance from the Statutory Auditors, forms part of this Annual Report.

As required under the provisions of the Companies Act, 2013, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee on 16.05.2014. In view of the changes in the Board of Directors of the Company during the year under review, the CSR Committee was reconstituted by the Board of Directors on 26^th November 2024. The current composition of the CSR Committee is mentioned in this Annual Report. The CSR Committee has formulated the CSR Policy and has recommended the activities to be undertaken by the Company as specified under Schedule VII of the Companies Act, 2013. The details about the meetings of the CSR Committee and CSR activities undertaken by the Company during the financial year under review is mentioned separately in this Annual Report.