Akzo Nobel India Ltd

Walt Disney

Rounding-off the momentous 70^th anniversary in India, your Company's record performance ahead-of-industry culminated in sustained market share gains in a highly competitive environment. We introduced game-changing sustainable innovations across paints and coatings, invested in digitization, augmented capacity and automation in efficient operations, fostered engagement and capacity building of our high-performance teams, progressed on sustainability ambitions and empowered communities with societal initiatives; all this while investing in strategic initiatives for future growth. Precisely why, Akzo Nobel India is ‘Catapulting to win in India'.

Recent Reserve Bank of India's estimate of 6.5% real GDP growth for the financial year 2024-25 depicts the Indian economy's core strength, stability and opportunity, especially in a challenging global economic landscape.

Strongly co-related to the country's GDP growth, the Indian paint and coatings industry also traversed many uncertainties during the year. Although broad-based demand in key industrial and construction sectors acted as a tailwind for B2B businesses, softness in private consumption and increasing competitive intensity tested resilience in retail markets.

This complex operating environment, in turn, only strengthened Akzo Nobel India's resolve to play to its strategic strengths, drive performance and ultimately deliver results. Your Company successfully maximised on strategic opportunities across businesses, doubled its focus on customers and increased productivity with prudent cost management.

When it comes to protecting and beautifying surfaces across India, your Company's paints and coatings can be found almost everywhere — from homes to the built environment, steel coils to solar windmills, automobiles on land to the gigantic naval ships on the high seas, and from complex environments like offshore oil & gas and nuclear energy projects to everyday beverage cans.

With a strong innovation focus across decorative paints and coatings businesses, we introduced differentiated and more sustainable products and services offering significant value-addition to our customers.

In decorative paints, we continued to invest in our power brands such as Dulux Velvet Touch, Dulux Weathershield, Dulux Aquatech, Sadolin and Dulux Promise with a focus to be the gold standard of quality. Building on these, our three-pronged approach – of strengthening play in accretive super-luxury segments of choice, upgraded marquee offerings in premium and high-growth adjacencies, and addressing portfolio gaps in mass and economy– augured well for us.

Dulux Velvet Touch Eterna with Tru Color+ technology redefined uber-luxury inside homes. New Dulux Weathershield Protect Dust Proof unlocked dirt resistance in home exteriors. We stepped into the Economy+ segment with Dulux Promise Freedom, introduced India's first scuff mark resistant interior emulsion in retail, as well as our debut enamel offering for project customers.

Innovation expertise also strengthened our play in Coatings.

We unveiled Interpon A3000, a revolutionary single-layer powder coating developed with a key focus on the Indian motorcycle industry. In automotive and specialty coatings, our latest ready mix basecoat system supports body shops in achieving OEM-quality finishes with ease and efficiency. Collaborations with leading B2B customers in coil coatings and automotive OEMs further strengthened our market position. Aligned with global shifts, your Company actively tapped on the demand opportunities in sunrise sectors such as Electronic Management Services, Renewable Energy, and Electric Vehicles (EV), positioning ourselves for sustainable growth

We unveiled Interpon A3000, a revolutionary single-layer powder coating developed with a key focus on the Indian motorcycle industry. In automotive and specialty coatings, our latest ready mix basecoat system supports body shops in achieving OEM-quality finishes with ease and efficiency. Collaborations with leading B2B customers in coil coatings and automotive OEMs further strengthened our market position.

Aligned with global shifts, your Company actively tapped on the demand opportunities in sunrise sectors such as Electronic Management Services, Renewable Energy, and Electric Vehicles (EV),positioning ourselves for sustainable growth.

In 2024-25, your Company invested in multiple strategic initiatives – such as the fully integrated end-to-end lead management system – to drive future growth across core businesses.

Capex investments during the year were majorly directed towards improving our own processes and developing solutions to meet our customers' needs in more sustainable ways.

To serve the growing demand for powder coatings in Northern and Eastern India, H 1,050 million was invested towards expanding capacity at Gwalior Powder Coatings facility.

In decorative paints, Acotone, the next generation of universal tinting system was introduced. This game-changing colourant is a true win-win – bringing even more vibrant and opaque range of colours to customers, reducing SKU complexity at every point of sale, while significantly reducing VOC emissions. Within our operations as well, investments were made on renewable energy and energy management systems.

Overall, through a strategic alignment of innovation, operational excellence, and market expansion, we achieved our fourth consecutive year of record performance.

Your Company set new benchmarks across all key financial metrics — revenue, gross margins, EBIT from operations, and Profit After Tax (PAT). For the first time, topline surpassed the H 4,000 crore mark as a paint and coatings company. Strategic investments aligned with growth initiatives and revenue, resulted in stable double-digit profitability for the sixth consecutive year.

While growing profitably, we were also mindful of conducting business in a safe, responsible and sustainable manner, as evident by our actions. 70% of our raw materials were sustainably procured. We achieved 89% material circularity. Renewable energy contribution to total energy consumption crossed 50% for the first time. AkzoNobel extended its partnership with Ecovadis and Together for Sustainability (TfS) to build and improve its' suppliers' sustainability practices.

As a responsible corporate citizen, our CSR initiatives under the three critical pillars of impact – Vocational Skill Training, Education and Community Healthcare – continued to positively impact thousands of individuals. Project Indradhanush empowered over 3,100 women across 940 villages in seven states, transforming them into skilled painters and entrepreneurs.

Our Let's Colour initiative revitalized three high-altitude villages in the Spiti Valley, including Komic – the world's highest motorable village. More than 10,500 liters of Dulux Weathershield exterior emulsion now protects 100 homes, schools, and cultural landmarks from extreme conditions. The purposeful transformation of over 300,000 sq feet area is also helping preserve the centuries old Buddhist spiritual and cultural tapestry of the Spiti valley. While we take pride in our societal impact during the year, we also recognize that there is always more to be done. Hence, our commitment to empowerment remains steadfast.

Reflecting your Company's sustained record performance and acknowledging the continued trust of our shareholders, the Board has recommended a final dividend of H 30/- per share, taking the recommended total dividend for financial year 2024-25 to H 100/- per share

During the year, we were pleased to welcome Ms. Namrata Kaul and Mr. Anil Chaudhry as Independent Directors to our Board. Each of them brings a wealth of experience, and we are confident that their diverse perspectives will further enhance the Board's effectiveness and strategic oversight.

Here, on behalf of our Board and management team, I also want to place on record sincere appreciation to the previously serving Independent Directors - Mr. Amit Jain and Ms. Smriti Rekha Vijay. Their valued contributions have been instrumental in strengthening our corporate governance framework and long-term strategy.

In October 2024, AkzoNobel N.V., the ultimate holding/promoter company of Akzo Nobel India announced a strategic portfolio review for its decorative paints business in South Asia, with a particular focus on India. For AkzoNobel N.V., this review represented a key step towards focussing its portfolio on positions of differentiating scale in its core coatings portfolio.

In January 2025, the parent also requested your Company's Board of Directors to begin exploratory steps towards –

(i) a potential divestment of the Powder coatings business and International Research Center in India to a separate indirect wholly owned subsidiary of AkzoNobel N.V., and

(ii) a potential acquisition of Intellectual Properties of Decorative Paints by Akzo Nobel India. Your approval on the above resolutions also shows your confidence in the proposed outcome.

These proposed transactions aim to create separate entities for our liquid and powder coatings in India. This will position Akzo Nobel India as a more focused liquid paint and coatings business, which is fully brand and technology independent in its' core Decorative Paints business. Once completed, a clear roadmap for sustained growth and ultimately value creation will follow.

In these times, the resilience of our people and partners has been our anchor. The unwavering support from our global parent company, combined with the passion for paint of our people, ensured that it was business as usual. This, alongside the commitment of our suppliers, distributors, dealers, and retailers, and the trust of our valued customers, empowered your Company to outperform the market today, while investing in a brighter future.

The outlook for the Indian economy is promising in 2025–26. An expected revival in consumption demand, increased incomes post Budget, premiumisation trend, and strong industrial demand will act as tailwinds, even as competitive intensity is expected to play out in the short term.

Your Company has a clear strategy, a sharp focus on achieving differentiated scale in its core businesses, customer-centricity, and a proven track record of market outperformance. Investments in strategic initiatives like the new Lead Management System (a unified, data-driven platform designed to maximise demand pull) and innovative services like the Dulux Maestro program (offering comprehensive, end-to-end business support exclusively to architects and interior designers in 40 Indian cities) further mine new growth avenues for your Company.

As we ‘Catapult to Win in India', we look forward to your continued support.

Chairman