Akzo Nobel India Ltd

Dear Members,

The Board of Directors of your Company hereby presents the 70^th report on the business and operations of your Company along with the audited financial statements for the Financial Year ended 31^st March 2024.

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, on which the Company exercises effective control.

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

(H million)

Akzo Nobel India Limited ("the Company" or "your Company") achieved yet another record performance in FY 2023-24 with new highs in absolute performance across revenue, gross margin, EBIT from operations and PAT. Supported by benign raw material costs, your Company continued to deliver double-digit profitability for the Fifth (5^th) year in a row as a testament to its resilient business model and strategic priorities.

Growth in your Company's Decorative Paints business vertical was driven mainly by product launches (with innovative advancements in our Dulux Professional range) in urban markets, and a thriving projects business. Your Company continued to focus on building brands, winning logos, distribution, and growing its Mass & Economy portfolio. Despite increasing competitive intensity, your Company continued making strides in its market share in the Premium product portfolio and adjacencies.

The business performance of your Company's Coatings vertical was built around technology, sustainable products and strong alliances. Supported by a conducive business environment, the infrastructure, power and automotive industries remained the major demand drivers in this business vertical.

To maintain its competitive edge, your Company continued to leverage global R&D and technologies thus ensuring a steady stream of innovative products tailored specifically for the Indian market and consumer preferences and choices.

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 6^th February 2024, approved an interim dividend of H 50/- per equity share. This dividend was paid by the Company by 4^th March 2024 to those shareholders whose names were appearing in the Register of Members as on 16^th February 2024, being the Record Date for the aforesaid interim dividend. Your Directors are pleased to recommend a Final Dividend of H 25/- per equity share for the Financial Year ended 31^st March 2024 in addition to the aforesaid interim dividend paid during the said Financial Year 2023-24. The Final Dividend, once approved by the Members at the ensuing 70^th Annual General Meeting (as scheduled on 1^st August 2024), will be paid to those Members whose names appear in the Register of Members as on 25^th July 2024 (Record Date). The total dividend for the Financial Year 2023-24, including the proposed Final Dividend, thus amounts to H 75/- 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 2024 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 2024, 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.

During the Financial Year under Report, there was no amount transferred to the Reserves.

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.

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, an application was submitted with the jurisdictional Regional Director, Ministry of Corporate Affairs for such conversion. 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. Reference in this regard can be from Note No. 5.1 of the Financial Statements forming part of this Annual Report.

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 (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 70^th 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 2024 was H 455.40 million comprising 45.54 million equity shares of H10/- each (Previous year H 455.40 million comprising 45.54 million equity shares of H 10/- each).

Paints & Coatings industry in India encompasses a diverse range of products and applications, catering to architectural and industrial sectors. With a strong emphasis on aesthetics, protection, and sustainability, this industry plays a crucial role in enhancing the visual appeal and longevity of surfaces across these sectors.

As per the Indian Paints Association, the paints & coatings industry in India is estimated to be US$ 8.5 billion in value and 6.3 million MTPA by volume comprising the architectural sector, which accounts for nearly 70% of the paint industry and is the largest segment, while industrial segment accounts for 30% of the total consumption.

The paints market is being driven by technological advancements, sustainability and changing regulations. Innovations in paint formulations, increasing efficiency in manufacturing through digitalization and greater focus on waste reduction and reduced carbon footprints were some of the trends witnessed during the year under Report.

The coatings market is driven by expected GDP growth, increasing per capita income, urbanization, and sustainability focus, thus poised for a 6% CAGR from 2022 to 2026. Government initiatives, including a US$ 500 million Electric Vehicle Policy, aim to bolster local manufacturing and position India as a premier EV manufacturing hub. The automotive sector experienced an encouraging volume growth driven by the migration to electric vehicles (EV) and battery pack localization.

Higher disposable income, rapid urbanization and evolving customer lifestyle preferences are boosting consumerism and thereby demand for Decorative Paints. The growth in Indian manufacturing, mobility and infrastructure is spurring investments in the Industrial Coatings sector led by powder coatings which is undergoing the fastest growth across India.

To cater to this rising demand, market players are investing in capacity and network expansion, accentuated by the presence of new players in the paints & coatings industry.

Your Company's Decorative Paints business offers a wide variety of products for every situation and surface spreading across paints, lacquers and varnishes as well as supplying a range of tinting machines, color concepts and training initiatives to the building, infrastructure and renovation industry.

Although there was some headwind in the later part of the year under Report leading to demand constraints and price corrections, the long term fundamentals for the industry remain strong owing to rising urbanization, infrastructure development and increased government spending on affordable housing.

For your Company, the year under Report was characterized by innovative product offerings in the existing lines and upgrades with propositions that not only provided customer delight but also sustainability benefits. We also worked on filling portfolio gaps, bringing innovative solutions across categories and price points. Distribution expansion supported our growth journey with presence in over 5,000 towns.

A fresh coat of paint renews more than just walls! At Dulux, we know that it goes beyond... to empowering people to flourish through colours. That's why we are delighted to win the award, a true validation of the trust that consumer have on our quality, backed by centuries of expertise and innovation.

For 70 years, Dulux brand's reputation is built on superior quality and innovation. Taking this further is Dulux Assurance^TM Warranty Program, our commitment to back unmatched quality with an unbeatable warranty.

The extensive warranty program covers 17 Dulux products across home interior and exteriors including the Dulux Aquatech range of waterproofing solutions with warranty coverage on applicable products going up to 15 years, making it truly ‘A Coat of Trust in Every Stroke'.

Powered with the Rain Shield Technology, this premium acrylic exterior emulsion is specially developed for high humidity and rainfall areas. It provides protection against fungal and algae attacks, and comes with a 7-year warranty.

Powered by the advanced Spectrum universal tinting machine, the complete range of Sadolin PU range of premium wood coatings by Dulux is reimagining wood finishes. Our woodcare portfolio now enhances the overall customer value proposition with more than 2,000 high-opacity intense colours, available in both matte and gloss finishes.

Our debut affordable acrylic distemper introduced in the Dulux Professional range combines superior coverage with anti-chalking properties. Packed with international quality pigments that give a fresh matte finish to project interiors, it is available in over 3,000 shades.

An industry first 12-in-1 value proposition, this high-gloss enamel interior and exterior paint gives a luxurious, ultra-rich gloss finish to metal and wooden surfaces. Its PU (Polyurethane) reinforced Dura-Tough technology delivers superior anti-rust, anti-yellowing, anti-fungal, anti-bacterial benefits with enhanced durability due to longer lasting colours, high gloss retention, smooth finish, superior opacity, superior coverage, and superior adhesion of paint film.

With the new Silicon Technology, this upgrade delivers enhanced superior whiteness and opacity, features that aim to further drive consumer upgrades and conversion in the entry level premium emulsion.

The Dulux Weathershield Alkali Bloc Primer, upgraded with PU technology, now offers 10x higher water-resistance compared to regular primers. Dulux Weathershield Prime coat acrylic primer was launched with anti-alkalinity properties.

In projects, our Dulux Weathershield range was expanded to cater the entry level premium exterior emulsions. Boosted with the Silicon Technology, the product comes with a 6-year warranty.

Delivering cutting-edge coating solutions to a variety of industries, Automotive and Specialty Coatings (‘ASC') offerings comprises of Automotive OEM Coatings, Consumer Electronics Coatings, Vehicle Refinishes (VR) and Specialty Coatings.

In light of the 12.5% growth in the Indian automobile industry with an all-time high sales in passenger vehicles segment, ASC business, therefore, had a strong year of performance supported by body shop wins, distribution expansion and strong brand performances.

Our premium vehicle refinish (VR) business secured annual business tie-ups for over 200 OEM Authorized Bodyshops, thereby building on our sustained growth in this business.

With a strong growth ambition in the Indian market, we invested in our market expansion strategy with an improved distribution model. Currently we are working with 45 distributors across India to serve demand in new geographies.

Our powder coatings offerings are delivering protective, stylish and sustainable solutions to a range of markets, including Architectural, Automotive, General Trade Coaters, Industrial and Functional areas.

Backed by our renowned brands like Interpon, Resicoat, etc., this business aims to achieve a 50% reduction in absolute carbon emissions by 2030 throughout its entire value chain, driven by innovative powder production techniques featuring zero volatile organic compounds (VOCs), 100% overspray reclamation, and low cure times leading to reduced energy consumption and enhanced output.

During the year under Report, our powder coatings offerings demonstrated exceptional performance amidst stiff competition which led to a double-digit volume growth. Additionally, we have expanded our presence in the architecture sector thus leaving a lasting imprint in Tier 2 and 3 cities particularly in increasing awareness of our warranty-grade offerings, thereby strengthening our foothold in this critical sector.

Both the Industrial and Consumer sectors have experienced growth with notable momentum observed in categories such as geyser, fan coating, and AC coatings owing to technological advancements, urbanization, rising incomes, and ever evolving consumer preferences.

We prioritize innovation to ensure our customers maintain a competitive advantage, consistently delivering exceptional results that keep them ahead of the curve. Our bonded technology has demonstrated remarkable performance in FY 2023-24, delivering double-digit volume growth across businesses. Backed by the history around Interpon Futura helping architects to bring their creations to life as well as our market-leading design and research teams, it has led to a new Futura collection providing modern buildings with a range of wonderful colors and beautiful finishes to deliver an aura of aesthetics and energy.

Our Resicoat EL series and Interpon A6000 range offer a comprehensive product range catering to the changing electric vehicle trends in India, thus gaining significant market traction during the year under Report.

The Switch-to-Powder project, especially within the automotive sector, has experienced significant adoption, particularly in applications like fuel tanks.

Interpon Low E, polyester powder coatings, cures efficiently, needing lower temperatures (150?C) or 25% faster curing at 180?C, reducing energy consumption and emissions, boosting productivity.

Interpon D3020, our latest hyper durable powder coating for architectural aluminium delivers required film thickness in a single coat compared to three-coat liquid paints, has minimal product waste in the most challenging environments while eliminating the need for a primer.

To further enhance customer engagement, we launched My Interpon Portal. This platform offers round-the-clock access to our powder coatings range, facilitating effortless product discovery, comparison, and seamless ordering for our valued clientele.

Interpon has received an Environmental Product Declaration (EPD) for a third time, delivering key improvements since 2017 such as reduction in relative energy consumption (T/T of production) by 28% & Overall relative waste (T/T of production) by 44%. Total non-reusable waste to landfill has decreased by 90% since 2017.

This business is about protecting and beautifying assets, both in and out of water. Through our flagship ‘International' brand, Marine & Protective Coatings find applications in a variety of high end-industries including Oil & Gas, Power, Infrastructure projects and Wind Energy.

Marine market has been quite strong with accelerating momentum in New Build segment across various shipyards in

India and dry dock orders globally. The coastal and fisheries markets have also seen robust demand with customers preferring our high-performance solutions.

Protective coatings market is poised to grow between 8-10% for next few years with infrastructure, power and export markets leading the way. Our fireproofing solutions for Oil & Gas and Infrastructure market, coupled with increased investment in Wind Energy (for both towers and blades), have started showing strong demand which we were able to cater to from our proven products over the years. The market is shifting towards sustainable coatings, low VOC-emitting paint solutions, and water-based paints and we are committed to developing new technologies that support our customers in a sustainable manner.

International HullCare:

Our International HullCare products and services combine high-performance hull coating technology, cutting-edge remote operating vehicle inspection, and big data performance monitoring with proven hull cleaning techniques aligned with industry standards - resulting in the industry's most environmentally sustainable hull management package to date.

Interbond 1202 Universal Primer

This breakthrough offering under our International range of protective coatings (now protects one of India's upcoming LNG project) is powered by the High Heat Technology. Designed for insulated and uninsulated applications, including cryogenic requirements, it delivers superior protection in extremes of temperature ranging from -165^OC to 650^OC.

Serving the buildings and infrastructure industries and consumer goods, our Industrial Coatings business includes Coil and Extrusion Coatings, Packaging Coatings, and Wood Finishes and Adhesives and provide high performance coating solutions to building construction & infrastructure industry for roofings, building structures, aluminium composite panels and Domestic Appliances as well as innovative coating solution & inks for metal packaging industries for niche segments including (but not limited to) Food, Caps & Closures, Aerosol & Decorative cans.

The coated steel market supports growth of infrastructure under Goverment of India initiatives for Airports, Smart Cities & Metro Rail projects and growth of Extrusion & ACP Coatings in facades, door & window panels & other high-end infrastructure.

In the coming years, demand for coil coatings is expected to remain robust owing to ambitious Government initiatives of PLI (Production Linked Incentives) with an outlay of H 6,000 Cr to promote manufacturing of speciality steel and adjustment in basic custom duty to enhance competitiveness of India's steel sector.

Within our packaging coatings, the BPANI range of segment continued to grow due to more countries choosing safer and sustainable solutions for food packaging.

The Company has implemented internal control systems that are tailored to the nature, scale and complexity of its business operations. Our robust internal control framework allows us to stay ahead of evolving challenges and changing risk profiles, thus enabling us to achieve predictable and desired outcomes. We have established necessary policies and procedures to safeguard assets, prevent and detect frauds/errors, to ensure the orderly and efficient conduct of our business.

These Internal Financial Controls are designed at both the entity and process levels in accordance with the requirements of the Companies Act, 2013. Regular testing and review of the internal control systems are conducted at specified intervals, covering major processes across our offices and manufacturing sites. The effectiveness of these internal financial controls is assured through management reviews, self-assessment, and independent testing by the Statutory Auditors of the Company. Any audit observations and subsequent actions are reported to the Audit Committee, which evaluates the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations, including those related to strengthening the Company's risk management policies, processes and systems.

Your Company is dedicated to upholding the highest standards of ethics and compliance throughout its business processes. We utilize robust 3^rd party IT tools to drive and enforce compliance across its operations. As required under the listing regulations, the Board of Directors reviews the compliance report on quarterly basis pertaining to all applicable laws for the entity apart from the review by the Risk Management Committee.

Further, the Risk Management Committee is entrusted with the responsibility of monitoring the execution of the risk management plan and providing updates to the Board on a regular basis.

Risk management plays a crucial role in corporate governance and strategy development. We recognize that risk assessment and mitigation are ongoing processes that must adapt to the evolving risk and legal landscape, encompassing short-term, medium-term, and long-term challenges.

At AkzoNobel, we believe that implementing systemic risk management practices is essential for effectively navigating towards our business objectives and ensuring sustainable growth in a volatile, uncertain and complex environment.

We understand the importance of operating within the dynamics of the paints industry and taking calculated risks to maintain our competitive edge in the market. Our responsible management teams and functional experts identify risks which are followed by formulation of appropriate and timely mitigation planning and actions.

Through our risk management framework, we strive to provide reasonable assurance that our business objectives can be achieved and our obligations to various stakeholders can be fulfilled. The Board oversees the implementation of risk mitigation measures for key risks, as identified by the Risk Management Committee which meets at least twice a year. Additionally, the Audit Committee provides oversight in the realm of financial risks and controls.

Company's policy on Risk Management is available on Company website www.akzonobel.co.in and can be accessed from https://akzonobel.co.in/pdf/policy/ RiskManagementPolicy.pdf.

Our success as an organisation depends on our ability to identify risks and exploit opportunities around our business and the markets we operate in. Listed below are some of the opportunities before your Company.

Your company is working with a greater focus on differentiated and wholesome solutions to mitigate the threats due to continuously shifting consumer preferences and changes in competitive landscape over the last few years.

At AkzoNobel India, we recognize that diversity, equity and inclusion (DE&I) are not just buzzwords but fundamental pillars of a thriving workplace culture. As we reflect on the past year, we are proud to reaffirm our unwavering commitment to fostering a diverse and inclusive environment where every individual feels valued, respected, and empowered to bring their authentic selves to work. We firmly believe that embracing diversity in all its forms – be it in race, gender, ethnicity, age, sexual orientation, or background – not only enriches our workforce but also drives innovation, creativity, and organizational success. In terms of our journey towards greater inclusivity, we remain dedicated to championing diversity as a cornerstone of our corporate ethos and a catalyst for positive change within our organization and beyond.

The AkzoNobel India DE&I journey commenced with a systematic business led approach in terms of benchmarking our DE&I initiatives vis-?-vis the industry status quo.

The focus has been on Building confidence through various Diversity & Inclusion focused initiatives including Role Model Series (Role Model series is a combination of introspective connects, peer learning and coaching from senior female leaders within AkzoNobel), Women in Manufacturing workshop, Focused

Group Discussions with female employees across Manufacturing, Sales & Marketing as well as R& D teams.

Our Inclusivity initiative and mentoring platform Proud Parents was launched in 2023 with the intention to raise awareness and create platforms to colleagues on their journey as parents, carers and guardians.

- Communicate Your Personal Brand with Marketing Head

- Rising above the Glass Ceiling - Personal Career Journey: WIN NL Agile Transformation & Digital Innovation Manager

Exclusive sessions and month-long activities carried out in March'24 for Women's Day including:

- Gamechanger speaker series,

- Fireside chat with Senior Leadership

Manager Sensitization workshops for People Managers across the year:

a) Women's Wellness Symposium: Sessions conducted on topics such as Breast Cancer awareness, Menopause, Legal Rights of Women In India, Embracing Self Care for employees and their family members.

b) (Prevention Against Sexual Harassment – POSH) Awareness Session: Session for all India employee base in October 2023. Around 200+ employees across India attended the session.

D&I Awareness Week: a) Sessions conducted with Senior Leadership on D&I Sensitivity Building training with employees across the organization.

b) Coffee Connect session series conducted to connect with female employees across sites on harnessing their unique potential through sharing stories about their own experiences and giving/ getting advice through the extended female network.

c) Talent Acquisition and Diversity Focus: In the realm of talent acquisition, our efforts have been steadfastly directed towards fostering diversity within our workforce. Throughout the year, we have prioritized the recruitment of diverse talent, particularly through our Sales trainee program in Tier 2/3 cities. This initiative not only aims to tap into talent pools beyond traditional urban centers but also reflects our commitment to promoting diversity across geographical boundaries.

Additionally, we've placed a special emphasis on supporting individuals through our Returning to Work – Mothers Program. By providing opportunities for mothers to reenter the workforce, we are not only championing gender diversity but also enabling the professional growth and development of individuals who bring invaluable experience and perspectives to our team.

Furthermore, inclusivity has been at the forefront of our hiring practices. We've proactively sought to create a more inclusive workforce practices through recruitment of differently-abled individuals and members of the LGBTQ community.

Our workplace principles of Employee Engagement revolve around the 4 Cs – Care, Connect, Capability, and Culture. We encourage transparent communication within and across teams in the organization - ensuring that everyone is aligned towards common objectives.

In our steadfast commitment to delivering a holistic employee engagement experience, we have endeavored to enrich the lives of our workforce through a multifaceted approach encompassing partnership building, technological innovation, and creative internal communication platforms.

Our aim has been to foster stronger connections across the organization while enhancing employee wellness and engagement.

Throughout the year, we have established robust engagement and recognition platforms to celebrate the diverse talents and contributions of our employees. These initiatives include:

During the year under Report, we launched a brand-new employee engagement platform called Voices which was designed to make sure that everyone's opinion is listened to and valued in order to create a better work environment where everyone can thrive. Voices, thus, provided a platform for impactful feedback towards:

- Empowering colleagues to drive the change they want to see;

- Helping teams to identify key areas for improvement and take ownership of their own work environment; and

Enabling AkzoNobel to hear employees' suggestions, ideas and honest feedbackFinancial Wellness Sessions: Both in-person and virtual sessions were conducted organization-wide to provide valuable insights and resources for improving financial well-being.

AkzoNobel Talks Sessions: These sessions served as a platform for internal talent to showcase their expertise and share knowledge and insights with their colleagues, enriching our collective learning experience.

Fitness & Weight Loss Challenge: National fitness challenges spanning over two months, including subsections such as Planks, Push-Ups, and Bodyweight Squats, followed by a 45-day Mega Weight Loss Challenge, promoting physical well-being and healthy lifestyle choices.

Mental Health Awareness Week: External speaker sessions were organized to raise awareness and facilitate discussions around mental health, underscoring our commitment to supporting the holistic well-being of our employees.

National Quiz - Q for Qurious: An engaging activity involving the participation of over 500 employees over three months, stimulating intellectual curiosity and fostering camaraderie among our teams.

Flying Colors Awards: Throughout the year, we have proudly celebrated and rewarded exceptional talent within our organization through our Flying Colors Awards program. These quarterly, half yearly and annual awards celebrate the outstanding performance and contributions of individuals and teams across various departments.

Special Initiatives: We also organized events such as World Environment Day celebrations and a World Photography Contest, providing avenues for creative expression and reinforcing our dedication to environmental sustainability and artistic endeavors.

These initiatives not only underscore our commitment to nurturing a supportive and inclusive work environment but also highlight our dedication to promoting employee well-being and fostering a culture of continuous learning and growth.

In 2023-24, we launched our new talent management framework globally. We believe in an experience-based talent management approach. This year, the framework was rolled out across all senior managers. Going forward, the framework will be extended to all the manager roles in the organization. We also have our employees participating in a Rock It 2.0 program which is a regional talent development program for senior managers. This is a 9-month talent development program adopting a blended approach, the program aims to develop and prepare emerging talent for expanded roles and responsibilities with focus on leadership, business acumen and collaboration.

For Integrated Supply Chain, we undertook initiatives like We Lead 2.0. catering to our diverse manufacturing, supply chain and logistics workforce by conducting an assessment centre along with local actions and training programs at the site level focused on building the managerial capability.

We have an adequate succession planning mechanism for the critical and identified positions in the respective functions to ensure business continuity and engage high potential talent.

The sales function also witnessed a string of initiatives like Gurukul, aimed at creating a strong bench of Full-time frontline salespeople while engaging potential contingent workforce to give suitable opportunities with us. Another program Elevate, aimed at engaging high potential frontlines sales staff and building their readiness level to take up a managerial role in set time.

Trainings, both on the job and classroom, saw investment from the Company in form of Catalyst program wherein employees were empowered to upskill and reskill themselves changing to the dynamic work environment.

We designed our learning and development framework according to our learning formula of 70:20:10. The most effective way to learn and develop a new skill or behaviour is to apply and practice on the job in real life situations. In 2023-24, we provided a total of 12,231 training hours to employees equipping them with skills and knowledge necessary to excel in their roles and contribute to the success of our organization with primary focus on developing manager as a coach program and generic skills training.

The list of programs attended by employees – Face to face and instructor-led – are as follows:

1. Leadership essentials

2. Coaching at AkzoNobel Program

3. Courageous conversation at AkzoNobel

4. Effective communication skills

5. Business partner trusted advisor

6. Diversity and inclusion sessions on moments that matter, unconscious bias, gender, LGBTQIA+

Performance reviews were conducted for all employees. Annual Compensation Process for all employees was completed effectively as per the guidelines.

The Nomination and Remuneration Policy relating to the Directors and Key Managerial Personnel (‘KMP'), as formulated by the Nomination and Remuneration Committee (‘NRC') and approved by the Board of Directors, inter alia, stipulates the criteria for board diversity, appointment and remuneration of Directors and KMPs which include determination of qualifications, positive attributes, independence of a director, reviewing succession plans, evaluation of Board performance, etc. The terms of reference of the Nomination and Remuneration Committee is outlined in the Corporate Governance section Annexure I ( to this Report).

The NRC Terms of Reference cum Policy is available on Company's website at https://akzonobel.co.in/pdf/policy/ NRC-Terms-of-Reference-Policy.pdf

Information required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this Report. However, in terms of the provisions of Section 136 of the Act, the Annual Report is being sent to members excluding the aforementioned information. Any member interested in obtaining such particulars, may inspect the same at the registered office of the Company by writing an email to investor.india@ akzonobel.com. The disclosures below are made in terms of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended:

* ceased to be a director and consequently the Chairman of the Company effective 16^th November 2023 ^# appointed/designated as the Chairman & Managing Director of the Company effective 16^th November 2023 ^$ appointed as a Wholetime Director of the Company effective 16^th November 2023 ^% ceased to be the Company Secretary of the Company effective 8^th July 2023 ^{^} appointed as the Company Secretary & Compliance Officer of the Company effective 24^th August 2023 ^@ calculated on annualised basis

It is hereby affirmed that the remuneration to managerial personnel referred to above is as per the Nomination and Remuneration Policy of the Company.

1. The aforesaid details are calculated on the basis of remuneration paid for the financial year 2023-24.

2. Median remuneration in the Company (Base Salary) for all its employees was H 0.96 million for the financial year 2023-24.

3. Remuneration to Directors includes sitting fees paid to them for the financial year 2023-24.

4. Remuneration to Directors is within the overall limits approved by the shareholders.

Maintaining high standards of Corporate Governance has been fundamental to the business of your Company since its inception. In compliance with Regulation 34 read with Schedule V of the Listing Regulations, a Report on Corporate Governance for the year under review is presented in a separate section as Annexure I to this Annual Report.

Your Company has a robust mechanism to evaluate the performance of all Board members. A detailed disclosure regarding the parameters and process of Board evaluation, along with the outcomes, has been provided in the Report on Corporate Governance.

Your Company has a Vigil Mechanism / Whistle Blower Policy, which lays down the process to convey genuine concerns and seek resolution towards the same without fear of retaliation. The Policy requires the Investigation team of AkzoNobel to investigate such incidents, when reported, in an impartial manner and take appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is your Company's Policy to ensure that no complainant is victimised or harassed for bringing such incidents to the attention of your Company, and to keep the information disclosed during the investigation as confidential. The implementation of the Vigil Mechanism / Whistle Blower Policy is overseen by the Audit Committee and no employee was denied access to the Committee during the year under review.

A detailed update on the functioning of the Vigil Mechanism / Whistle Blower Policy has been provided in the Report on Corporate Governance. The Policy is available on the company's website www.akzonobel.co.in and can be accessed from https:// akzonobel.co.in/pdf/policy/Whistle_Blower_Policy_Jan2.pdf.

Sustainability is considered as a fundamental driver of value by the Board of your Company. We strongly believe that integrating the creation of societal value into our corporate strategy not only fosters innovation but also ensures sustainable growth for all stakeholders.

Our focus is on providing pioneering paints and coatings that not only protect the world today but also safeguard it for generations to come. Furthermore, our sustainable business approach aligns with the global agenda outlined in the United Nations Sustainable Development Goals (SDGs).

We are committed to pursuing economic growth while minimizing our ecological footprint and maximizing our positive social impact. This commitment forms the foundation of our company's purpose, brands, core principles, and employee value proposition. It serves as a catalyst for growth, innovation, and productivity.

Company's policy on Sustainability is available on Company website www.akzonobel.co.in and can be accessed from https:// akzonobel.co.in/pdf/policy/Sustainability-Policy.pdf

As per the SEBI Circulars, effective from the financial year 2022-23, reporting/disclosure under BRSR is mandatory for the top 1,000 listed companies by market capitalisation and disclosure under BRSR Core is mandatory from the financial year 2023-24. Accordingly, the requisite disclosure in the revised format under BRSR Core for the financial year 2023-24 is annexed to this report as Annexure II-A.

Your Company fully understands its role and responsibilities when it comes to society and contributing to the communities in which it operates. This forms an integral part of its sustainability agenda. Your Company engages with people and partners with various like-minded organizations, corporates, government bodies, NGOs, self-help groups, Govt.-backed projects, in order to support deserving and sustainable projects and causes within CSR realm. The CSR agenda of your Company is based on economic development through pillars of skill building, education and community healthcare and is governed by the CSR Policy of the Company read with Schedule VII to the Act and monitored by the CSR Committee and Board.

As part of this initiative, during the year under Report, your Company has 5 skill training centres (2 recognized by National Skill Development Corporation as International Training Centres) as AkzoNobel Paint Academy (‘APA') in four States of India offering skill training to youth in Decorative Paints and Vehicle Refinish. Similarly, in partnership with like-minded corporates, voluntary bodies and Govt., your Company also contributes in 9 more skill training centres across India. Post the training, these youth are supported in gaining employment basis learned skill sets.

1) Skill Training

As a part of Diversity & Inclusion initiative, APA has put special focus on disadvantaged groups and sections of society to bridge inequality. The following initiatives have been taken in this regard during the year under Report:

Women empowerment programme for self-employment of rural women under which 1,729 women have been trained in Decorative Paints and linked with employment as painters

conducted deco training for 459 youth at Assam and Manipur as livelihood rehabilitation for youth who has recovered from drug addiction

Partnered with Thane Central Prison for rehabilitation programme for prison inmates (156 men and women) by providing vocational skill training in paint application

Initiated three Kaushal Vahan (Skills on Wheels) in Tamil Nadu, Bengal and Assam providing upskill training to more than 2,000 painters.

Your Company received appreciation letter from Superintendent of Police, Thane Central Prison for undertaking vocational skill training of prison inmates and facilitating their rehabilitation in society.

2) Education

Your Company is committed towards all round educational development of underprivileged children in India. Our flagship education project named ‘Parivartan' (meaning "Progressive Change"), as implemented in six States during the year under Report, was instrumental in transforming the lives of more than 7,900 children by using education as a medium. In this project, we provided a three-tier program comprising the following including digital literacy to the children and youth:

a) Early childhood education to children from 2-6 years

b) Non-formal education to out-of-school children to bring them back to formal school c) Remedial education to under privileged children to improve their grades and stop them from dropping out of school

During the year under Report, your Company also received an appreciation letter from Deputy Commissioner; Bengaluru Rural District for CSR initiatives taken in the area of education.

3) Community HealthCare

Your Company, in partnership with Government Health Departments, provided preventive and curative health care to more than 60,000 villagers around Bengaluru (Karnataka) and in Bhind (Madhya Pradesh) through our Community HealthCare Project via tele-medicine. This Project is equipped with latest technology like Artificial Intelligence (AI) to detect diseases and provide access to specialized diagnostic services at their doorsteps.

During the year under Report, several specialised health awareness and screening camps were organised (including that for breast cancer) to raise awareness amongst these villagers regarding importance of health care. Under this Project, your Company also provided health care for the painter community and their family members under our the banner ‘Arogya Sakha' (health's best friend) thus providing access to specialist doctors through tele-medicine for more than 1.5 million beneficiaries

During the year under Report, your Company partnered with Ma Foundation to provide low cost nutritious food for underprivileged families in Gurgaon. It also donated mechanised wheel chairs to specially- abled in Bhind district of Madhya Pradesh for which it received appreciation letter from the District Collector.

Your Company continues to use its research and development base to bring to consumers new products with improved performance features and for special applications. The details of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required under section 134(3) (m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure III to this report.

Our digitalization initiative acts as a means to maintain competitiveness and leverage emerging technologies which, in turn, has brought about transformative changes in our business cycle, resulting in factory automation, advanced analytics, and improved customer experiences. We are also using Advanced Planning Transformation (APT) tool to optimize our supply chain, enabling enhanced connectivity and improving demand and supply planning which has ultimately led to higher service levels, reduced inventory, and cost savings.

Automation and advanced analytics has been playing a pivotal role in achieving our Distribution 2.0 goals. Our tailored replenishment tool enhances demand management, optimizes stock tracking, and ensures efficient network management, guaranteeing product availability even in remote locations.

We are focused on implementing smart factory initiatives to enhance manufacturing competitiveness. By incorporating Internet of Things (IoT) technologies, we are improving production efficiencies, enabling predictive debottlenecking, and enhancing safety measures across our sites.

Through collaborative efforts of AkzoNobel experts and winners of the Paint the Future India startup challenge, we are transforming the Dulux experience for Indian paint consumers through our innovative digital solutions.

We have a portal on Overall Equipment Effectiveness (OEE) for our critical equipment in our manufacturing facilities which help us drive the efficiency improvement. Also we have installed Automated Guided Vehicles (AGV) in 2 of our manufacturing facilities as part of automation and the implementation of Automated Storage and Retrieval System (ASRS) is in progress in Gwalior facility.

We have online OEE portal for our critical equipments in our manufacturing facilities which help us drive the efficiency improvement. Also, we have installed AGVs in two of our manufacturing facilities as part of automation and the implementation of ASRS is in progress in Gwalior facility.

To ensure compliance with the AkzoNobel Code of Conduct, industrial hygiene and occupational health standards, Insider Trading policy, and statutory requirements, we have been established utilizing digital assurance and compliance platforms

The Company has implemented a comprehensive Prevention of Sexual Harassment at Workplace Policy pursuant to the Sexual Harassment at Women at Workplace (Prevention, Prohibition and Redressal) Act, 2023 ("POSH Act"). This inclusive policy addresses governance mechanisms and prevention measures for the women employees. It is accessible on the Company's website at www.akzonobel.co.in/corporate-governance. php#policy. The policy aims to prevent and discourage sexual harassment, outlining procedures for resolution and settlement. The Company has established an Internal Complaints Committee in compliance with the POSH Act. Awareness workshops and programs are conducted throughout the organization to promote understanding and prevent sexual harassment. Two complaints were reported during FY 2023-24 and both of which stands disposed off as on 31^st March 2024, and further disclosures in this regard can be found in the Corporate Governance Report.

The Company's Policy on Related Party Transactions (RPTs) can be found on the company's website at www.akzonobel.co.in/pdf/ policy/Related_Party_Transactions_Policy.pdf.

This Policy ensures proper reporting, approval, and disclosure processes for all transactions between the Company and Related Parties.

All Related Party Transactions, along with any material modifications, are reviewed and approved by the Audit Committee including by way of grant of omnibus approval within the Related Party Transactions Policy framework for repetitive transactions in the ordinary course of business and at arm's length.

Independent review by a reputable accounting firm is conducted for these Related Party Transactions including aspects of ordinary course of business and at arms' length to ensure compliance with the applicable provisions under the Companies Act, 2013 and the Listing Regulations.

During the period under Report, all the related party transactions were conducted in the Ordinary Course of Business and at Arm's Length basis. No Material Related Party Transactions, as per the Board's materiality threshold, were entered into by the Company. No materially significant related party transactions were made with the Promoters, Directors, and/or Key Management Personnel that could potentially conflict with the Company's interests at large.

Please refer Note no. 34 in the Financial Statements for related party disclosures in accordance with IND AS 24. In compliance with Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, a statement of contracts/arrangements with related parties, including certain arm's length transactions, are disclosed in Form AOC–2, which is included in this report.

There are no loans given or guarantees issued that are covered under Section 186 of the Act read with the Rules made thereunder. Details of investments made under the said Section are covered in Note 5.1 of the Financial Statements for the year under Report.

M/s Price Waterhouse Chartered Accountants LLP continue as the Statutory Auditors of the Company and shall hold office till conclusion of the Annual General Meeting to be held in 2026 and they have confirmed that they duly fulfil the requirements under applicable laws and regulations to continue as the Auditors of the Company.

The Statutory Auditor's report does not contain any qualifications, reservations, or adverse remarks or disclaimer except two factual reporting which are self explanatory.

In terms of Section 204 of the Act, Secretarial Audit was conducted for the financial year 2023-24 by M/s A K Labh & Co., Company Secretaries, Kolkata. Their report is appended to the Board's Report, and it does not contain any qualification, reservation or adverse remarks.

The Board has re-appointed M/s A K Labh & Co., Company Secretaries, Kolkata to conduct Secretarial Audit for the financial year 2024-25.

Additionally, in compliance with Regulation 24A of the Listing Regulations, the Secretarial Compliance Report for the Financial Year 2023-24 was received from M/s. A. K Labh & Co., Company Secretaries. This report pertains to the Company's adherence to the Securities and Exchange Board of India Act, 1992, the Securities Contracts (Regulation) Act, 1956, and the Rules, Regulations, Circulars, and Guidelines issued thereunder, as applicable.

The Secretarial Compliance Report is available on the Company's website and can be accessed at the following weblink: https:// akzonobel.co.in/investors.php#scr

In terms of Section 148 of the Companies Act 2013, Cost Audit was conducted for the year 2023-24 by M/s Chandra Wadhwa & Co., New Delhi. The Cost Audit report for the year 2022-23 was filed with MCA within the stipulated time.

The Board has re-appointed M/s Chandra Wadhwa & Co., New Delhi as the Cost Auditors for conducting Cost Audit for the financial year 2024-25, whose remuneration is subject to ratification by the shareholders at the forthcoming AGM.

The Cost Accounts and records as required under Section 148(1) of the Act are duly maintained by the Company and audited by the Cost Auditors.

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended, the Annual Return of the Company is available on the website of the Company at www.akzonobel. co.in, and can be accessed from www.akzonobel.co.in/ investors.php#anr.

The Board composition has undergone changes since the last Board's report. Mr. Oscar Wezenbeek ceased to be the director and consequently the Chairman of the Company effective 16^th November 2023 whereas Mr. Rohit Ghanshyamdas Totla has been appointed as the Wholetime Director of the Company effective 16^th November 2023 and such appointment got subsequently approved by the shareholders of the Company on 11^th January 2024. Also, Mr. Rajiv Rajgopal has been reappointed as the Managing Director of the Company effective 1^st November 2023 which was subsequently approved by the shareholders of the Company for a period of 5 years effective 1^st November 2023. Subsequently, Mr. Rajiv Rajgopal has been appointed/designated as the Chairman and Managing Director of the Company effective 16^th November 2023.

Mr. Rohit Ghanshyam Totla will retire by rotation at the upcoming 70^th Annual General Meeting (AGM) and has offered himself for re-appointment. The AGM Notice includes the appointment of Mr. Rohit Ghanshyamdas Totla, along with their profiles as required by Listing Regulations.

Mrs. Harshi Rastogi ceased to be the Company Secretary of the Company effective 8^th July 2023 and Mr. Rajiv L. Jha has joined as the Company Secretary and Compliance Officer of the Company effective 24^th August 2023.

Mr. Rajiv Rajgopal, Chairman & Managing Director, Mr. Krishna Rallapalli, Wholetime Director and CFO, and Mr. Rajiv L Jha, Company Secretary, serve as the whole-time Key Managerial Personnel of the Company under Section 203 of the Act.

The terms of reference and composition of all the

Committees of the Board has been provided in the Corporate Governance Report.

There were 5 (Five) Board Meetings held during the year under review. The Board Meeting Dates and the attendance of the Directors at the meetings have been provided in the Corporate Governance Report.

As required under section 134(5) of the Act, the Directors confirm that:

a) in the preparation of the annual accounts for the year ended 31^st March 2024, the applicable Indian accounting standards have been followed and with proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgements 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 your Company for that period;

c) the Directors 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;

d) the Directors have prepared the annual accounts 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 were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Most Trusted Brand of India 2024: Our decorative paints brand Dulux was recognized with ‘Most Trusted Brands of India' award for the second straight year, a strong validation of the trust Indian consumers repose on the superior quality Dulux products and services, innovation and customer service.

(Manufacturing Sector): We have been honoured to jointly win the Gold Award for ‘Excellence in Business Responsibility and Sustainable Reporting - Mid Cap (Manufacturing Sector)' in the third edition of Institute of Chartered Accountants of India's Sustainability Reporting Awards 2022-23. This recognition underscores our continued commitment towards business responsibility and sustainability initiatives in India.

Your Directors state that no disclosure or reporting is required in respect of the following items, as there were no transactions on these items during the year under review:

1. The Company has issued only one class of equity shares with equal voting rights.

2. The Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

3. The Chairman/Managing Director or Whole time Director/s of the Company did not receive any remuneration or commission from any other company belonging to AkzoNobel Group or associate companies.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals, which could impact the going concern status of your Company and its future operations.

5. There has been no change in the nature of business of your Company during the financial year under report.

6. There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.

7. Your Company did not accept any public deposit within the meaning of the Companies (Acceptance of Deposits) Rules, 2014 and accordingly, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

8. Your Company has complied with the applicable Secretarial Standards, issued by The Institute of Company Secretaries of India from time to time and for the time being in force.

9. Your Company has neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 with any Tribunals.

10. Your Company has not made any one-time settlement against loans taken from the Banks or Financial Institutions.

11. Independent Directors have confirmed that they meet the criteria of independence in terms of Section 149(6) of the Companies Act, 2013.

12. No fraud has been detected during the year under report. None of the auditors of the Company has reported any fraud in the Company during the year under report.

Some of the statements in this report, describing your Company's objectives and expectations expressed in good faith, may constitute ‘forward-looking statements' within the meaning of applicable laws and regulations and may involve risks and uncertainties. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

All amounts in this report and annexures thereto are in Rupees (‘H') million, unless specified otherwise.

The Directors express deep appreciation to the employees of your Company for their hard work and dedication. They also acknowledge the parent company's valuable contributions in technology and marketing, enabling improved products and customer satisfaction. The Board appreciates the ongoing support and cooperation from its suppliers, distributors, retailers, investors, bankers, government authorities, regulatory bodies, stock exchanges, business partners, and other stakeholders.