Akzo Nobel India Ltd Management Discussions

Industry structure and developments

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

The decorative paints sector, accounting for 70% to 75% of paint demand, faces heightened competitive activity, slowdown in consumption and market consolidation, which has led to increase in capital expenditure, dealer networks, and ad spending. However, long-term fundamentals of the industry remain intact, supported by urbanization, project completions and government spending on housing and infrastructure, and shorter repainting cycles.

Industrial paint represents the remaining 25% to 30% of total paint demand, mainly coming from the automotive industry, as well as sectors like oil and gas, marine, and electronics.

Business performance

Decorative paints

Decorative paints, which include interior and exterior paints, enamels, and varnishes, play a crucial role in enhancing the appearance and protecting surfaces in residential, commercial, and industrial buildings.

Your Companys Decorative Paints business offers a wide variety of essential products for every situation and surface, including paints, lacquers and varnishes. The business also supplies a range of tinting machines, color concepts and training initiatives to the building and renovation industry.

Although this year remained challenging for the industry due to muted demand and competitive pressures, long term fundamentals remain strong on the back of rising urbanization, infrastructure development and increased government spending on affordable housing.

Distribution expansion supported our growth journey with presence in over 6,000 towns.

The year was characterized by product launches and upgrades with propositions that not only enhanced customer delight but also delivered sustainability benefits across categories and price points:

Dulux Velvet Touch Eterna marks foray into uber-luxury interior emulsions

Four decades since introducing luxury in the Indian decorative paints industry with its flagship Dulux Velvet Touch range of interior emulsions, AkzoNobel redefined uber-luxury with Dulux Velvet Touch Eterna. Its advanced PU technology results in dust-resistance, the TruColor+ technology with antioxidants delivers a signature rich sheen finish and goodness of tea tree oil ensures no paint smell. Superior peace of mind is also provided for 10 years through the Dulux Assurance^TM Warranty Program.

Introduced Dulux SuperClean 3 in 1 MarkResistance - Indias first scuff mark resistant premium interior emulsion was introduced. This highly washable, premium interior emulsion comes with anti-bacterial properties and scuff resistance to prevent marks from household items.

Dulux SuperClean, our premium interior emulsion was renovated with High Bind Technology, delivering smooth, high-sheen finish and excellent washability for long-lasting, easy-to-maintain walls.

Dulux Weathershield Protect Dustproof with new Dust Shield technology unlocked new value of dust resistance in addition to the existing benefits of algae resistance, aesthetic sheen retention and 6-year warranty for lasting exterior performance.

In waterproofing, Dulux Aquatech DampProtect 2in1 with AquaProtect technology was launched for both walls and roofs, providing up to 8 years of reliable protection from moisture, dampness and seepage.

In enamels, the upgraded Dulux PU Enamel 12-in-1 delivers durable metal and wood finishes with superior gloss, anti-rust, anti-fungal, and anti-yellowing benefits, in more than 3,000 shades.

Launch of new Dulux Promise Freedom with advanced Latex Technology made upgrading from distemper to a more durable entry-level interior and exterior emulsion at affordable price point. It delivers longer-lasting protection with three key benefits: enhanced whiteness, improved coverage, and a smoother finish.

Dulux Professional M900 Premium Gloss Enamel marked the Companys debut enamel offering in the projects segment. This high-sheen, multi-surface gloss offers exceptional gloss retention, washability and exceptional resistance to wear-and-tear making it ideal for high-traffic surfaces and project exteriors exposed to demanding conditions.

Dulux Weathershield TR E2000 was upgraded with Ultra Defence Technology and PU technology to deliver 15-year protection with superior dirt resistance and comes in 3000+ colour options —strengthening our Super Premium Exterior portfolio in projects.

Within distempers, we introduced Dulux Promise Smart Choice Acrylic Distemper with smoother matte finish, better hiding and choice of more than 2,000 tintable shades at an economical price point.

While increasing our presence, we are also equally invested in transforming the retail experience for Dulux paints consumers. The first set of Dulux experiential stores inaugurated in seven states (Haryana, Punjab, Bihar, West Bengal, Gujarat and Uttar Pradesh) and Union Territory of Chandigarh are offering personalized consultations, product guidance and colour inspiration to visualization.

Marine & protective coatings

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 end-industries including Oil & Gas, Power, Infrastructure projects and Wind Energy.

The Marine business reported strong growth in the marine industry led by global drydocks and robust growth in the coastal and fisheries market. Opportunities in New Build market were conducive with many shipyards getting ready to make more in India to cater to domestic need. The business also enjoys long standing relations with the Indian Navy. During the year, three Indian Naval Ships, officially commissioned by Shri Narendra Modi, Honble Prime Minister of India, were coated by our anti-corrosive and anti-fouling marine coating solutions.

Protective business experienced double digit growth in all key segments – power, infrastructure, oil & gas and mining. Increased capex in the infrastructure segment and Governments push for renewable energy has seen increased demand in the segment which is catered by our world-class products.

Chartek? ONE is our latest single-coat, mesh-free epoxy passive fire protection innovation. It offers simplified application over assets in the energy sector by maximizing efficiency, streamlining installation process and enhancing health and safety. It provides excellent durability, three hours of fire resistance across a wide operating temperature range, and combined protection against corrosion and cryogenic conditions.

Our technology leadership positions also demonstrated strength and high performance in very aggressive environments. Case in point, our Protective Coatings — including Ceilcote 380, Enviroline 376F60, Intershield 300, Intersleek 731 & Intersleek 1001 — that protect Indias biggest nuclear power project.

The rise of electronic management services industry in India is yet another tailwind for our protective coatings business growth. As India steadily emerges as a hub for data infrastructure in the Asia Pacific Region, our PFP solutions like Interchar 1190, Interchar 1260 and Interchar 1290 are being increasingly supplied to semi-conductor facilities in India. We are also part of the transformative expansion which is happening in not only the major airports but redevelopment of airports in tier-2 and tier-3 cities by supplying our world class products for both anti corrosive and fireproofing requirements.

Powder coatings

AkzoNobels powder coatings brands — Interpon and Resicoat — delivered strong growth during the year, driven by industrial and consumer segment performance. To better serve market demand in North and Central India, the company also began commercial production of powder coatings from its new capacity in Gwalior plant.

In 2024-25, domestic appliance coatings saw significant growth, supported by technological advancements, rising incomes, and changing consumer needs. The rollout of 5G infrastructure further spurred demand for powder coatings in telecom equipment manufacturing. Demand for office and industrial spaces also showed a strong rebound. This resurgence accelerated growth in architectural coatings, further strengthened by rising preference for 15 and 25-year warranty-grade powders and continued market leadership in bonded metallic finishes—key drivers of AkzoNobels premium product dominance.

Interpon A3000, AkzoNobels revolutionary single-layer powder coating for motorcycles, a first-of-its-kind in India, was launched for the key Indian market. Similarly, the prestigious Underwriters Laboratories (UL) flame retardant certification opened new opportunities for Resicoat Electric Insulation range in the growing electric vehicle market, where the demand for more sustainable and high-performance coatings for electrical insulation is surging.

Going full throttle with Interpon A3000 – our first single layer powder coating for two-wheelers; AkzoNobel is giving motorcycle manufacturers and their suppliers the perfect combination of sustainability, durability and style for their modern designs, while accelerating their efficiency gains.

Our Interpon Low-E powder coatings range that allows curing at just 160?C with up to 20% reduced energy consumption leading to productivity increase by up to 25%, and it now comes with Eco+ services including energy audits, process optimization, and the energy calculator, empowering customers across industries to effectively reduce their carbon footprint while improving operational efficiency.

Looking ahead, Indias powder coatings market is projected to grow at a 6.4% CAGR from 2024 to 2026, supported by GDP growth, urbanization, and the global sustainability agenda.

Automotive and specialty coatings

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

As per SIAM (Society of Indian Automobile Manufacturers), the Indian automobile industry grew 7.3% in 2024-25 led by utility vehicles and EVs. Performance for the ASC business was supported by bodyshop wins, distribution expansion and strong brand performances. In the refinish segment, new launches such as Sikkens body fillers and Wanda ready mix shades were well received, while auto segment benefited from share gains. Government initiatives towards sustainable mobility and PLIs (Production Linked Incentives) and improved access to vehicle financing are expected to also support demand going forward.

Vehicle refinish gets even more simplified for bodyshops with the new Wanda ready-mixed shades

A key innovation launched this year in the mid-market segment was Wanda Eazy RM Basecoat, a ready-mixed basecoat system in 16 shades. The fast drying ready-mixed formula is designed for consistent colour accuracy, easy spray-ability with quick flash-off time, making it a practical choice for achieving OEM-quality solid, metallic and pearl refinishes with ease and efficiency.

Coating a more sustainable future of mobility, we also became the exclusive supplier of automotive interior coatings (automotive plastic) for two new premium electric vehicle models launched by one of Indias leading automotive companies during 2024-25. In addition, we began commercial supplies of our newly developed Low VOC coatings for door trims and switch shades for the leading car manufacturer.

Industrial coatings

Serving the buildings and infrastructure industries, consumer goods, the Industrial Coatings (ICO) business includes Coil and Extrusion Coatings, Packaging Coatings, and Wood Finishes and Adhesives.

Coil & Extrusion Coatings provide high performance coating solutions to building construction & infrastructure industry for roofings, building structures, aluminum composite panels segments and Domestic Appliances segments. While muted Coil market demand prevailed in the earlier part of the year, the latter half saw a sharp recovery in demand across markets. The revival of the capital expenditure (Capex) cycle is providing a strong boost to the Coil Coatings business. This segment is benefiting from Indias expanding infrastructure and manufacturing sectors and is expected to grow in line with the GDP. The Appliance segment also showed promising growth, with increasing demand contributing positively to our performance.

On the Packaging Coatings side, we are witnessing strong interest in Bisphenol-A non-intent (BPANI) products, driven by changing regulations in Europe. Additionally, the demand for UV LED-curable inks is on the rise due to their energy efficiency and sustainability benefits.

During the year, ICO launched multiple new products, all developed with customer needs at the core, reinforcing our commitment to innovation and market responsiveness.

In Coil Coatings, Primer-less Top-Coat, our latest roofing solution developed in collaboration with TATA BlueScope Steel, received robust market response on launch. In Packaging Coatings, AquaprimeTM 250, a water-dilutable external can coating and AqualureTM 900, an internal spray lacquer received approvals from leading beverage brands.

Internal control systems

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 ever evolving 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 Companys internal control environment and monitors the implementation of audit recommendations, including those related to strengthening the Companys risk management policies, processes and systems.

Your Company is dedicated to its commitment of 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.

Risks and opportunities

(a) risks and concerns

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.

Companys 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.

Risk description and mitigation

Risk	Risk description	Mitigation
Strategic Review Internal: Business	Business is encountering challenges in both retaining and attracting Customers, Vendors & Employees	Strengthen relationships with customers, vendors, and employees by/through:
		Customers: Transparent Communication about the developments and how they may benefit. Enhance. Customer Experience by delivering exceptional service and personalized interactions to build trust and loyalty.
		Vendors: Engaging in regular, open dialogues with vendors to understand mutual goals and address concerns promptly.
		Employees: Investing in Employee Development by providing trainings and career advancement opportunities.
		Providing employee retention plan and awards.
Occupational hazard Internal; Operational	Manufacturing processes have inherent risks of injury and occupational hazards in the form of exposure to harmful materials/waste	Strict adherence to Companys HSES Policy.
		Continuous awareness and training sessions with employees.
		Periodic risk assessments.
Cyber security External; Operational	The risk of significant business disruption and/ or inadequate recovery following a cybersecurity attack, leading to potential loss of sensitive information, intellectual property, financial or reputational damage.	Established an Information and Cybersecurity Management System (ISMS) with a risk-based security framework.
		Established and Implemented Security Operating Centre (SOC) for real time monitoring of (cyber) security risks.
		Continuous reinforcement of cybersecurity culture by providing mandatory training and awareness session.
		Security assessments & continuous monitoring of infrastructure capacity.
		Utilizing updated Information and Cybersecurity Policies framework.
Statutory Compliances External; Compliance	The local regulatory environment is continually evolving leading to considerable increase in regulatory scrutiny as well as stakeholders expectations vis-?-vis Compliances. We recognize that non-compliance with applicable laws and regulations poses a threat to our financial and reputational standing.	The Company has zero tolerance policy against non- compliance.
		Review of all applicable compliances through a third-party compliance tool.
		Periodic compliance status reported to the Board of Directors as per SEBI LODR.
		Focused Talent Acquisition Strategy.
Attract and retain Talent Internal; Operational	Challenges in attracting and retaining talent due to market competition and the fast-evolving business environment.	Retention Rewards for Critical and Key Talents
		Transparent Communication & Employee Engagement.
Loss of market share External; Operational	Risk of competition & new entrants disrupting certain segments/market share.	Strengthen attractiveness by making dealer profitability competitive while increasing investment behind Dulux brands.
	Digital disruption by competition and new entrants.	Accelerating numeric reach/ post penetration across identified geographies.
		Intensifying participation in adjacent growth categories
Data privacy & Information Security Internal; IM	Failure to protect personal data and comply with data privacy internal rules and external regulations could risk companies in terms of financial penalties, operational inefficiencies, intervention by regulators and reputational loss.	Continuous actions to be embedded in working processes.
		Security operations monitoring.
		Privacy by design when implementing new solutions.

b) Opportunities and threats

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.

Opportunity	Opportunity	Actions
Growing in Channels for the future	With the advent of technology- enabled distribution models, there has been a hyper fragmentation of channels. Accelerated growth of e-Commerce and Q-Commerce has brought about a huge opportunity to tap into these channels and drive business growth.	Several new initiatives have been launched which include:
Increasing market reach	Growth and market penetration by maintaining and enhancing market share and expanding into adjacent segments	Digitalisation through e-commerce initiatives Expansion of geographic presence by:
		Launches/re-launches of products and continued investment in innovation.
		Media Campaigns
		Expansion of Waterproofing range
Digital Transformation	Opportunities arising from rapidly emerging digital technologies present a chance to make meaningful interventions and develop capabilities across the value chain redefining the way we do business with a focus on customer experience to build long term relationships.	Investing time and resources to develop compelling content and presence across various social media platforms for the consumers.
		For further details, please refer to the section on ‘Information Technology /Digitalisation.

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.

Human resources

Diversity and inclusion initiatives

Over the past year, our organization has continued to advance its commitment to building a diverse, inclusive, and equitable workplace. Through a series of impactful programs and initiatives, we created platforms for open dialogue, empowerment, and representation across our workforce.

Our commitment to social impact was reflected in a meaningful initiative led by the Women Inspired Network (WIN). Titled "Hygiene First, Health Always" and held at PMC Saraswati Prathamik Vidyalay in Pune, the program aimed to empower young girls through education on crucial health and hygiene topics.

Further, as part of our Global WIN network, we had specific events focused around Women in Sales and Women in IT.

Building on our Global WIN networks focus, these events fostered crucial conversations around opportunities and challenges for women in these fields. We celebrated International Womens Day and International Mens Day across our locations, recognizing the unique contributions of all employees and encouraging thoughtful conversations around equity, inclusion, and respect. The highlight of the Womens Day celebration was an engaging session on leadership, personal development, and achieving balance between professional and personal priorities. For International Mens Day the discussions were centered around mental well-being, with a special focus on creating awareness and support around mens health. A panel discussion on mens wellness was organized, encouraging open dialogue on mental health, emotional resilience, and the importance of seeking support—helping break stigma and promote holistic well-being for all employees.

Additionally, Womens Coffee Connect sessions were held across multiple locations, creating supportive, informal spaces for women to network, exchange experiences, and foster stronger peer relationships. There were specific sessions focusing on "Wellbeing for Women" which focused on improving womens health and sense of wellbeing. These gatherings promoted inclusion, peer mentorship, and a sense of community.

As part of our infrastructure initiatives, we inaugurated a dedicated WIN room at our Bangalore manufacturing facility. This thoughtfully designed space demonstrates our ongoing commitment to creating inclusive environments that support the privacy, comfort, and well-being of our women employees.

In talent acquisition, we have prioritized the recruitment of diverse talent, particularly through our Sales trainee program in Tier 2/3 cities.

Through these collective efforts, we continue to cultivate a workplace where diversity is celebrated, inclusion is practiced daily, and every employee feels empowered to contribute and thrive.

As an organization we truly believe and work towards creating an inclusive environment for our employees and providing equal opportunities to shape a high-performance culture where people grow, collaborate, feel included, adapt quickly, and deliver with pride on our promises.

Employee engagement:

Our employee engagement initiative is centred on the premise of shaping a positive and inclusive workplace, leadership and employee engagement, and extending well-being and support to our employees.

Our commitment to ethics, inclusion, and recognition is embedded in programs like WIN India Network, POSH & Speak Up. Fun at Work initiatives, including Q for Qurious, Regional Sports Events and Festival Celebrations, foster team spirit and engagement. Regular Festival Celebrations and Employee Birthday recognitions help build a warm and connected workplace culture.

Leadership accessibility and transparent communication are enabled through CEO Town Halls HR Open House. Career growth is supported by HR Career Caf? and One-on-One Connects, while AkzoNobel Talks and Learning Caf? drive peer learning and collaboration.

We continuously invest in employee recognition through structured programs such as Flying Colours which is our flagship program for Rewards & Recognition to recognize exemplary performance by individuals and teams across various award categories including Achiever of the Year, MD Award, Best Team of the Quarter/ Year. Spot Awards are also given out for instant appreciation of outstanding performance. Initiatives like Kaizen encourage continuous improvement by inviting employee suggestions for process enhancements. Best Performance or Volume Out Celebrations highlight team achievements and milestones.

Our employee engagement platform, Voices, launched in 2023, drives actionable insights through our annual employee pulse survey. In India, the 2024 survey achieved an 96% participation rate across all employee lifecycle stages, allowing us to identify strengths, improvement areas, and monitor trends to foster a better work environment.

The employee engagement focus for FY 24-25 was Go-local. We had region specific employee engagement initiatives with our emphasis on collaboration and team spirit being reflected in

Team-building Activities, Picnics, Family Days, and Cricket Tournaments/Sports Events.

Awareness Sessions were conducted on health, safety, policies, and other important topics, reinforcing a culture of responsibility and knowledge-sharing.

We also emphasize participative leadership through initiatives that involve employees in management participation, fostering ownership, innovation, and trust at all levels.

A holistic Total Well-being Strategy integrates EAP, free health check-up camps, and medical insurance were established. Blood donation drives were organized across locations with 235 employees participating in the initiative. Financial literacy programs like Wealth Wisdom were organized to ensure financial wellness of the employees.

Talent development:

Talent Management took a centre stage in our HR agenda for 2024. As part of our Talent Management Rebuild agenda, all employees in managerial grades underwent the 9 box talent assessment initiative which helps the organization in identifying high-potential talent, tailoring development plans, and making informed succession planning decisions.

Within Integrated Supply Chain, GIMT (Grow India Manufacturing Talent) program, a Hi-Potential talent developmental program was being implemented to develop leadership capability within ISC. It was launched in 2023 and continued to develop further in 2024.

The off-roll talent development program ‘Gurukul continued its strong trajectory with the launch of Gurukul 2.0. This focused learning intervention aimed to significantly boost frontline capability, product expertise, and overall execution excellence. AkzoNobel globally launched the AkzoNobel Expectations initiative, which was designed to guide how employees, especially leaders, conduct their work. Launched in February 2024, these expectations focus on six key areas:

AkzoNobel expectations

1 ^{Focus on customers} Understanding and driving^: customer impact.

2 ^{Drive performance:} Delivering results through clear objectives and adaptability.

3 ^Simplify: Making processes easier for customers^: and colleagues.

4 ^{Foster accountability:} Taking responsibility for commitments and results.

5 ^{Build a bias for action:} Making informed decisions quickly.

6 ^Engage: Building trust and collaborating positively with others.

These expectations are being integrated into performance management processes and are expected to be demonstrated by all employees.

Training & development:

At AkzoNobel, our Learning & Development efforts in 2024–25 were shaped by the 70:20:10 model, which emphasizes experiential learning, peer interactions, and formal training. Across functions, we delivered 175 impactful learning sessions, providing 3,400 man-hours of training to strengthen both technical and behavioural capabilities. Key focus areas included the Manager as a Coach program and a strong emphasis on generic skills development.

Among the wide range of topics covered, notable trainings included:

‘Effective Managerial Conversations and ‘Courageous Conversations	‘Talent Management for People Managers	‘Project Management Essentials (Virtual) and ‘Process Management Improvement (Modules 1–6)
– empowering leaders to engage with empathy and clarity.	– building awareness and capability to manage performance and potential effectively.	– strengthening project delivery and process excellence.
‘Finance for Non-Financials	‘Xara Inspiration Sessions (AI)	‘D&I: Inclusive & Respectful Workplace and ‘Anti-Bribery and Corruption
– demystifying financial concepts for broader employee understanding.	– introducing employees to emerging technologies and future- focused thinking.	– reinforcing our commitment to compliance and an ethical workplace culture.

These programs were designed not just to upskill employees but also to align their development with business priorities, fostering a culture of continuous learning and performance, thereby creating a high- performance team with adequate empowerment and decision making.

Nomination and remuneration policy

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 Companys 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:

Name	Status	(i) Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2024-25	(ii) Percentage increase in remuneration during 2024-25 over 2023-24
Rajiv Rajgopal	Chairman & Managing Director	45.19	22% increase in base salary based on Industry benchmarking
Krishna Rallapalli	Wholetime Director and CFO	18.16	8% increase in base salary based on Industry benchmarking
Rohit Ghanshyamdas Totla$	Wholetime Director	25.29	15% increase in base salary based on Industry benchmarking
Amit Jain*	Independent Director	N.A.	N.A.
Hemant Sahai	Independent Director	2.91	Increase in amount of sitting fees effective 1st August 2024 and due to more no. of meetings during the year.
Smriti Rekha Vijay#	Independent Director	N.A.	N.A.
Namrata Kaul%	Independent Director	N.A.	N.A.
Anil Chaudhry$	Independent Director	N.A.	N.A.
Rajiv L. Jha^	Company Secretary & Compliance Officer	7.23	10.17% increase in base salary based on Industry benchmarking

* ceased to be an Independent Director of the Company on expiry of his term of office (effective 13^th August 2024, close of business hours)

s^# resigned from the Independent Directorship of the Company on account of health challenges (effective 22^nd November 2024)

% appointed as an Independent Director of the Company effective 5^th August 2024

$ appointed as an Independent Director of the Company effective 22^nd November 2024

Description	Remark
iii. Percentage increase in the median remuneration of employees in the financial year	8.22%
iv. Number of permanent employees on the rolls of the Company	1,577 as on 31st March 2025
v. Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration	Average increase in base salary of non- managerial personnel was 6.28% which is considered in line with the prevailing market conditions and other relevant factors.

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

Notes:

1. The aforesaid details are calculated on the basis of remuneration paid for the financial year 2024-25

2. Median remuneration in the Company (Base Salary) for all its employees was H 1.04 million for the financial year 2024-25.

3. Remuneration to Directors includes sitting fees paid to them for the financial year 2024-25.

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

Corporate governance

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.

Board evaluation

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.

Vigil mechanism / whistle blower policy

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 shall remain intact. It is your Companys Policy to ensure that no complainant is victimised or harassed for bringing such incidents to the attention of your Company or the Chairman/Chairperson of Audit Committee, 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 companys website www.akzonobel.co.in and can be accessed from https://akzonobel.co.in/pdf/policy/Whistle_Blower_Policy.pdf.

Sustainability

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.

In order to remain the best in class on Sustainability and Governance by adopting various ESG initiatives to build a better tomorrow, 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 companys purpose, brands, core principles, and employee value proposition. It continues to serve as a catalyst for growth, innovation, and productivity.

Companys 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 For the information summarised in Annexure II-A to this report, the criteria used is the "BRSR Core" (mandatory since FY 2023-24), which is a subset of the BRSR, consisting of a set of Key Performance Indicators ("KPIs")/ metrics under Nine Environmental, Social and Governance ("ESG") attributes, as per the format of BRSR Core specified in Annexure 17A read with the format of BRSR and the guidance note given in Annexure 16 and 17, respectively, of the SEBI Master Circular SEBI/HO/CFD/ PoD2/CIR/P/0155 dated November 11, 2024, and the ‘Industry Standards on Reporting of BRSR Core issued by SEBI vide circular SEBI/HO/CFDPoD- 1/P/CIR/2024/177 dated December 20, 2024 (collectively referred to as the "SEBI Circulars").

Corporate social responsibility

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 non-governmental organizations, corporates, government bodies, NGOs, self-help groups, Govt.-backed projects, in order to support sustainable projects and causes within its CSR realm. The CSR agenda of your Company is based on economic development through the broad 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.

Community healthcare

(Arogya Disha and Arogya Sakha)

Your company has provided preventive and curative healthcare facilities to community through Arogya Disha and Arogya Sakha projects. Arogya Disha operates 5 community healthcare e-clinics which provide OPD facility along with tests and medicine. The centres have benefited around 15,000 individuals this year. Arogya Sakah is a Tele consultation clinic which provides on call OPD consultation to painter community across India. Over 6,000 individuals from 5 States of India availed the facility in the year.

• 21,000 OPD provided in the year through Arogya Disha and Arogya Sakha.

• 98 Kids diagnosed with retinoblastoma were supported with drugs, diagnostics, surgery and prosthesis & implants. Another 133 kids supported with non-formal education.

• Karnataka State Health Department has provided Appreciation Letter for providing healthcare support to community through the community healthcare clinic and tele clinic.

• Community Healthcare project completed its 5 years of service and provided healthcare services to more than 90K people during the period.

Parivartan project

Parivartan (Change) project has been supporting more than 7,000 kids from their elementary education to higher secondary education. The project is running in partnership with government schools, Anganwadi centres and local communities in Bengaluru (Karnataka), Hyderabad (Telangana), Mohali (Punjab), Navi Mumbai (Maharashtra), Gwalior (Madya Pradesh) and Gurugram (Haryana). The project has been providing enabling and interactive environments for the kids. Further self-defence training has been included at Gwalior and Gurgaon centres where 200 girl children benefitted in the year.

• Project operational in 25 government schools and 6 special centres in community.

Celebrating half a decade of Project Parivartan in Mohali in partnership with the Department of School Education (Govt. of Punjab), Akzo Nobel India gifted a new dose of joy to nearly 750 children of two Government High Schools. Eight inspiring wall murals were created with nearly 700 liters of Dulux paint. Benefitting over 2,000 children annually in the district, Project Parivartan is not only enabling academic enrichment but going beyond to unlock holistic development and access to quality healthcare for the children and their families

Skill Development

Your company has been instrumental in promoting skill development, employability skilling and entrepreneurship development in youth and women. Skilling has been provided through paint academies, partnership, Deco Kaushal Vahan (Skill Van) and community based training. Indradhanush project provides opportunity to bring entrepreneur skill of women in life.

• More than 3,700 trainings provided in the year which includes 200 prison inmates and 154 drug addiction rehabilitated youth.

• Two new Kaushal Vahans for Deco and Vehicle Refinish taining launched at Uttar Pradesh and Rajasthan. In 2024-25, Deco Kaushal Vahan upskilled 2,000 painters while the VR Vahan has upskilled 360 painters.

• Indradhanush Project footprint now covers more than 2,000 villages across India through 683 NCPOs.

• 3,000+ rural women painters and entrepreneurs increase their income by 20-25% (Average women NCPOs profit has increased by H 1,000-1,500/- month).

The additional income has improved their socio-economic condition significantly.

• The project reached the milestone of 1,000 women-led stores in December 2024.

• Appreciation letter received from Maharashtra Prison Department for our livelihood rehabilitation for prison inmates.

Awards

Your Company has been recognised with various excellence in CSR projects award.

• has received Certificate of Achievement at 2^nd NorthEast CSR Award 2024 organised by TISS (Guwahati) for providing Skill training to youth rehabilitated from drug use.

• has received 2024 CII CII-ITC Sustainability Award-significant excellence in CSR Domain.

• is in final jury round of FICCI CSR Award 2024 (Skill Training Category).

With the power of our paint, Project Indradhanush is driving a more sustainable livelihood-linked future for women in rural India. Over 3,100 women micro-entrepreneurs across 940 villages in seven states of India have carved out new careers as skilled professional painters and paint entrepreneurs. For many like 40-year-old Avanti Bai, a seasonal agricultural labourer in Ratlam district, Project Indradhanush means a new sense of confidence in their abilities and financial empowerment for their families. Its also going beyond to paint a more equitable future for the Indian paints and coatings industry.

Conservation of energy, technology absorption and forex earnings and outgo

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.

Information technology/digitalisation

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 and at the same time driving productivity. 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 have 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.

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 at 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 utilizing digital assurance and compliance platforms.

Policy against sexual harassment

The Company has implemented a comprehensive Prevention of Sexual Harassment at Workplace Policy pursuant to the Sexual Harassment of 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 Companys 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 Internal Complaints Committee as constituted in compliance with the POSH Act is functioning properly. Awareness workshops and programs are conducted throughout the organization to promote understanding and prevent sexual harassment.

Two complaints were reported during FY 2024-25 which stands disposed off as on 31^st March 2025, and further disclosures in this regard can be found in the Corporate Governance Report.

Related Party Transactions (RPTs)

The Companys Policy on Related Party Transactions (RPTs) can be found on the companys 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 arms 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:

(a) all the related party transactions were conducted in the Ordinary Course of Business and at Arms Length basis.

(b) No Material Related Party Transactions, as per the Boards materiality threshold, were entered into by the Company except with the prior approvals of the Audit Committee and the shareholders of the Company, as the case may be.

(c) No materially significant related party transactions were entered into with the Promoters, Directors, and/or Key Management Personnel that could potentially conflict with the Companys 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 arms length transactions, are disclosed in Form AOC–2, which is included in this report.

Particulars of loans, guarantees or investments

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 No 5.1 of the Financial Statements for the year under Report.

Auditors & audit report

Statutory auditors

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 the year 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 Auditors report does not contain any qualifications, reservations, or adverse remarks or disclaimer except two factual reporting which are self-explanatory.

Secretarial auditors

In terms of Section 204 of the Act, Secretarial Audit was conducted for the financial year 2024-25 by M/s A K Labh & Co., Company Secretaries, Kolkata. Their report is appended to the Boards Report, and it does not contain any qualification, reservation or adverse remarks.

Pursuant to the Regulation 24A of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Third Amendment Regulations, 2024, a listed company needs to appoint a Secretarial Auditor in the Annual General Meeting for a period not exceeding five years at a time. Accordingly, it was decided by the Audit Committee and Board to recommend the appointment of the existing Secretarial Auditor M/s A K Labh & Co., Company Secretaries, Kolkata, as the Secretarial Auditor of the Company for a period of 5 (Five) years for approval of the shareholders at the ensuing 71^st Annual General Meeting to conduct the Secretarial Audit of the Company commencing from the financial year 2025-26 till the financial year 2029-30 and his appointment shall remain valid till the Annual General Meeting to be held in the year 2030. Written consent of the Secretarial Auditor and confirmation to the effect that they are eligible and not disqualified to be appointed as the Secretarial Auditor of the Company in the terms of the provisions of the Listing Regulations, the Companies Act, 2013 and the rules made thereunder, has been received.

Additionally, in compliance with Regulation 24A of the Listing Regulations, the Secretarial Compliance Report for the Financial Year 2024-25 was received from M/s. A. K Labh & Co., Company Secretaries. This report pertains to the Companys 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 Companys website and can be accessed at the following weblink: https:// akzonobel.co.in/investors.php#scr

Cost auditors

In terms of Section 148 of the Companies Act 2013, Cost Audit was conducted for the year 2024-25 by M/s Chandra Wadhwa & Co., New Delhi. The Cost Audit report for the year 2023-24 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 2025-26, whose remuneration is subject to ratification by the shareholders at the forthcoming AGM.

Cost records

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.

Annual return

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.

Directors & key management personnel

The Board composition has undergone changes since the last Boards report. Mr. Amit Jain and Ms. Smriti Rekha Vijay ceased to be the independent directors of the Company effective 13^th August 2024 (end of business hours) and 22^nd November 2024, respectively, whereas Ms. Namrata Kaul and Mr. Anil Chaudhry had been appointed as the Independent Directors of the Company for a period of 3 (three) years each, effective 5^th August 2024 and 22^nd November 2024, respectively and such appointments got subsequently approved by the shareholders of the Company on 12^th September 2024, and 2^nd January 2025, respectively.

Mr. Krishna Rallapalli will retire by rotation at the upcoming 71^st Annual General Meeting (AGM) and has offered himself for re-appointment. The AGM Notice includes the appointment of Mr. Krishna Rallapalli, along with his brief profile as required by Listing Regulations.

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

Committees of the board

The terms of reference and composition of all the Committees of the Board has been provided in the Corporate Governance Report.

Board meetings

There were 10 (Ten) 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.

Directors responsibility statement

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 2025, 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.

General

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 / subsidiary 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 except to the extent disclosed in the Annual 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 for the Board of Directors and General Meetings (SS-1 and SS-2), 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.

Cautionary statement

Some of the statements in this report, describing your Companys 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 (‘Rs.) million, unless specified otherwise.

Acknowledgements

We thank our shareholders, our suppliers, distributors, retailers, and business partners whose continuous support and feedback helps us gain a deeper insight into the evolving needs and newer market trends, fuelling innovation and enhanced product portfolio and empowering us to stay ahead of the curve in terms of premiumisation of product. We express deep appreciation to the employees of your Company for their hard work, commitment and dedication. We also acknowledge our parent companys valuable contributions in technology and marketing, enabling improved and innovative products and enhanced customer satisfaction. We sincerely appreciate the regulatory and government authorities, bankers, stock exchanges, depositories, auditors, legal advisors, and consultants and other stakeholders. Your relentless dedication to foster a fair and ethical business environment and responsible business practices drives integrity, accountability and transparency across our business operations.

For and On behalf of the Board of Directors	Rajiv Rajgopal
Place: Gurugram	Chairman & Managing Director
Date: 14th May 2025	DIN: 06685599