The Directors of your Company are pleased to present the 105^th Annual Report and the Audited Financial Statements (Standalone and Consolidated) for the year ended 31^st March, 2025 (‘year under review/FY 2024-25'). The section on Management Discussion and Analysis includes a review of the financial performance of the Company: Financial Highlights of the Company's standalone financial results, key financial ratios, and the dividend recommended by the Directors. It also includes the particulars of the subsidiaries of the Company including overseas subsidiaries and their performance during the year under review.

1. Management Discussion and Analysis

INTRODUCTION

Kansai Nerolac Paints Limited (referred to as 'KNPL,' 'the Company,' or 'We'), established in 1920, is a subsidiary of Kansai Paint Co., Ltd., Japan. In addition to our primary operations in India, we have established a presence in Nepal, Sri Lanka, and Bangladesh through a combination of strategic acquisitions and joint ventures. As one of the largest manufacturers of paints and coatings in India, we have established a strong leadership position in the decorative and industrial coatings sector. The Company continues to lead the automotive and powder coating segments and commands a significant market share in performance coatings backed by deep technical expertise and longstanding industry partnerships. In the decorative segment, we are recognised as the third-largest paint manufacturer in India. Our strong market position is driven by sustained investments in intellectual and human capital, complemented by access to advanced global technologies. This enables us to deliver differentiated, environmentally responsible, and innovation-led solutions, tailored to the evolving needs of Indian consumers.

As a trusted name in the industry, KNPL is committed to designing solutions that protect, inspire, and touch lives every day Our painting solutions provide 'Beauty and Protection' to a wide array of applications, including decorative paints (interior and exterior, wood coating, construction chemicals, tile adhesives), automotive coatings (for 2,3, and 4-wheelers, electric vehicles, commercial vehicles, and tractors), emerging segments (underbody coatings, alloy wheels, and seam sealers), consumer durables (fans, microwaves, refrigerators,

washing machines), personal items (hair clips, artificial jewellery), and transportation infrastructure (bridges, metro rail). This commitment is encapsulated in our belief that 'There is a little bit of Nerolac in everybody's life.'

At KNPL, we remain firmly committed to our purpose of transforming spaces and enriching lives by offering high-quality paints that enhance everyday environments and make a positive contribution to the world around us. Guided by innovation and a relentless pursuit of excellence, we strive to deliver solutions that not only inspire and protect but also leave a meaningful, lasting impact on our stakeholders and the communities we serve.

As we look ahead to FY 2025-26, we remain firmly focussed on building upon the momentum of recent years to further reinforce our market position. This continued drive is rooted in our long-standing commitment to innovation and customer-centricity: principles that have consistently defined our journey and underpinned our success over the decades. This year, the competitive landscape has undergone a marked shift, presenting us with both new challenges and emerging opportunities. Throughout this period of change, we have remained focussed on meeting evolving customer expectations. This continued emphasis has enabled us to launch products that directly address consumer needs, enhance engagement through better service delivery and reinforce our position in the market

Industry Progress

InFY 2024-25, the Indian paints industry demonstrated resilience in the face of subdued demand and intensifying competitive pressures. Rural demand remained muted for much of the year, with signs of recovery emerging towards Q3. The entry of new players into the market further intensified competition, prompting more aggressive pricing strategies. Additionally, an extended monsoon season impacted demand during the second quarter, affecting both retail and project sales.

The automotive coatings segment recorded healthy growth, driven largely by the launch of new passenger vehicle models. Meanwhile, industrial coatings experienced stable demand, supported by ongoing infrastructure development and government-led stimulus measures. Demand in the performance coatings segment was primarily driven by strong growth in

high-performance protective coatings, particularly within the oil and gas sector. Powder coatings saw subdued demand while general industrial paints registered healthy traction, especially in applications related to pre-engineered buildings and other industrial products.

The industry's focus on premiumisation has continued to strengthen, supported by increased investments in innovation and responsiveness to evolving consumer preferences. This strategic shift highlights the sector's adaptability and sustained commitment to long-term growth.

FINANCIALS

FINANCIAL HIGHLIGHTS

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A summary of KNPL's standalone financial results for the year ended 31^st March, 2025

(FY 2024-25) compared to the standalone financial results for the previous year, FY 2023-24, is as follows:

Revenue from operations for the year aggregated to ' 7,496.71 Crores as compared to ' 7,393.30 Crores for the previous year, reflecting a growth of 1.4%.

While average crude oil prices declined compared to the previous year, the impact was partially offset by currency depreciation during the same period. As a result overall raw material prices remained largely stable throughout the year. We continued our efforts to control overheads, wth all departments working on their tasks and achieving positive results.

PBDIT for the year stood at ' 974.13 Crores, registering a decline from ' 1,022.88 Crores in the previous year, reflecting a degrowth of 4.8%. On the other hand, other income rose to ' 142.06 Crores, a notable increase from ' 93.11 Crores recorded in the previous year. During the year, the Company sold its factory land and building at Lower Parel, Mumbai and a gain of ' 665.4 Crores was accounted. Due to the continued losses incurred by our subsidiaries in Sri Lanka and Bangladesh, the Company has recognised an impairment loss of ' 186.25 Crores in the year. The net amount of ' 479.19 Crores is shown as an exceptional item.

PBT for the year stood at ' 907.42 Crores, marginally lower than ' 923.57 Crores (before exceptional items) in the previous year, reflecting a degrowth of 1.7%. PAT declined to ' 1,021.24 Crores from ' 1,182.87 Crores in the previous year, marking a degrowth of 13.7%.

Return on net worth (excluding exceptional items) for the year is 11.3% as compared to 13.4%.

During the year, KNPL did not accept any deposits covered under Chapter V of the Companies Act, 2013. There are no significant or material orders passed by any regulators, courts, or tribunals against us that could impact our going concern status or our operations in the future.

There has been no change in the nature of our business during the year. Additionally, there have been no material changes or commitments affecting our financial position that occurred between the end of the financial year to which the financial statements relate and the date of this report

DIVIDEND

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The Board has recommended dividend of 375% (' 3.75 per share) including special dividend of 125% (' 1.25 per share) for the financial year ended 31^st March, 2025. This compared with a final dividend of 375% (' 3.75 per share) including special dividend of 125% (' 1.25 per share) declared last year.

SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS

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In accordance with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Board has approved a policy for determining material subsidiaries. The policy is available on the website of KNPL at www.nerolac.com. Further, based on this policy we do not have any material subsidiaries.

Indian Subsidiary

Nerofix Private Limited^)

The Company's turnover was recorded at ' 125.33 Crores, compared to ' 132.8 Crores the previous year. The Company recorded a loss of ' 15.26 Crores, compared to ' 2.74 Crores in the previous year. Strategic initiatives have also been taken to revamp the business.

The consolidated financial statements of KNPL, as of 31^st March, 2025, are prepared in accordance with applicable accounting standards and form a part of this report. All subsidiaries of the Company as of 31 ^st March, 2025, have been considered in the preparation of consolidated financial statements. Additionally a separate statement in Form AOC-1, highlighting the key features of the financial statements of the Company's subsidiaries, is included in this report Furthermore, the Annual Audited Financial Statements of all KNPL subsidiaries are available on the Company's website at www.nerolac.com.

PAINT AND NEW PRODUCT LAUNCHES

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Value Creation at Every Step

In the reporting year, we remained firmly committed to our strategic growth agenda and strengthening our position as a market leader. Under the Paint category, we continued to emphasise unique product offerings that enhance our market presence. We also introduced the Wow Whites range (Whitest of White), across both interior and exterior emulsions that provides best-in-class whiteness along with 15% more coverage.

As part of our efforts to strengthen the exterior product portfolio, we launched Excel No Dust an acrylic emulsion paint designed to deliver superior performance. We further expanded this range wth the introduction of Nerolac Excel Mica Marble Stretch and Sheen NXT, a highly durable, water-based, high-performance exterior paint. Additional launches in this category included Neu Latex Exterior White and Nerolac Suraksha Primer, broadening our offerings to meet varied customer needs.

In the Interior Range, we launched the Nerolac Beauty Gold Washable NXT and Impressions Sheen Emulsion, which provides a radiant sheen and smooth finish. The other new products in the interior range are Kansai Select Shikisai and Neu Latex Interior White.

These product introductions not only strengthen our portfolio but also reaffirm our commitment to delivering high-quality differentiated solutions that align with evolving customer expectations.

Consumer

Services-1

The NxtGen Painting Service Programme continued to offer a seamless, digitally enabled experience through its streamlined, end-to-end processes designed for ease and efficiency This year, we continued to uphold our commitment to delivering exceptional value by connecting homeowners with trained professionals and offering affordable solutions that significantly enhance customer satisfaction.

Our strong growth and adaptability are reflected in the continued expansion of our painting services, now spanning over 250 cities across the country and serving over 25,000 customers.

Through the expansion of our Contractor Service across diverse geographies, we have built strong partnerships with trained contractors who serve as trusted contributors within their local communities. This approach not only enables us to provide our customers with cost-effective painting solutions but also fosters a sense of trust and reliability

Superior Retail

Experience-1

We have enhanced customer experience through our NxtGen Premium Shoppe concepts customised to meet retailer requirements. These platforms provide a solution based comprehensive approach to home renovation including repair, waterproofing and painting. A based colour recommendations, an industry first, basis existing furnishings and furniture is the unique feature across all our format.

As of FY 2024-25, we have increased our Nerolac NxtGen Shoppe outlets to 100 and Shop in Shop outlets to 200 across the country

®Influencer Engagement Programme

Pragati Programme for Painters

Our Painter Loyalty Programme, Pragati, is a key element of our strategy to drive engagement and derive higher share of wallet from the painting contractor segment. Our focus is on capability building and skill development in this set of key influencers that impact the final delivery of the finished product We trained over 80,000 painters in paint application through classroom and hands-on sessions, further enhancing their skills and expertise. This year, through our existing programmes of Shop Meets and Expos we upskilled our existing loyalists as well as built awareness of the KNPL range of products and services across key markets. The entire engagement for this category is driven by our digital app called ‘Pragati', which established the foundation for our Painter Training Academies. Additionally, we utlised artificial intelligence to gain insights into painters' purchasing behaviours, leading to product recommendations from our side that meet their specific needs. This personalised approach not only improved the painter experience but also boosted sales.

Illuminati Programme for Architects and Interior Designers

At KNPL, we recognise the indispensable role of architects and interior designers in shaping our environment, crafting spaces that were both functional and visually captivating.

Over the past two years, we successfully engaged with 8,000 professionals across the country cultivating trust and loyalty through our Lunch & Learn presentations. To further support their creative process, we provided colour consultancy services and ensured that our shade palettes were seamlessly integrated into their 3D design rendering software.

We also actively participated in leading exhibitions, such as FOAD Delhi and Mumbai, providing a platform to showcase our diverse offerings, engage meaningfully with the design community, and stay attuned to emerging market trends. All these strategic initiatives have enabled us to grow our brand awareness and brand equity among this set of future influencers.

Industrial Business Overview

India is experiencing significant investment in infrastructure development which in turn is driving demand for industrial paints. Simultaneously, as one of the largest automotive markets globally, the country is witnessing rapid growth in the sector, fuelled by rising domestic demand for passenger vehicles and a surge in vehicle exports to international markets.

The powder coating segment experienced steady growth, primarily driven by demand from the white goods and electrical appliances sectors. The liquid coatings market saw significant expansion, fuelled by the increasing adoption of high-performance coatings that cater to specialised industrial applications.

The industrial paints business caters to a large variety of industrial customers like automotive OEMs, auto refinish body shops, general industrial customers and high-performance coatings users such as oil and gas, chemical plants, power plants, and infrastructure companies.

Technological advancements played a crucial role in shaping the industrial paints market, with innovations in application techniques and product formulations. Our state-of-the-art R&D centre has been instrumental in solidifying our leadership position within the industry

As we navigate this vibrant landscape, we remain committed to innovation and excellence, ensuring that we continue to meet the demands of a rapidly evolving industry.

6 Passenger

Vehicles-,

The passenger vehicle segment recorded good growth during the year, driven by rising demand across both urban and rural markets. In line with this growth and evolving consumer needs, we have consistently been introducing new, high-functionality products within this segment.

Furthermore, we remain committed to sustainability by offering solutions that support energy conservation and optimise paint usage, reinforcing our focus on technological innovation and operational efficiency

TwoWheeler -1

The 2-wheeler segment experienced good growth in FY 2024-25. This can be attributed to increased demand for newly launched variants from manufacturers and a heightened consumer focus on EVs, across both urban and rural markets.

The rise in demand for two-wheelers has led to an increased need for paints and coatings. In response, KNPL has introduced a range of innovative solutions in FY 2024-25 to strengthen its competitive position in this dynamic market.

For 2-wheelers, we have prioritised solutions that deliver a superior gloss finish. Our Special PU clear product is engineered to provide an exceptional finish and anti-stain properties.

Overall, we remain dedicated to meeting the evolving needs of the 2-wheeler market through continuous innovation and a focus on quality, reinforcing our position as one of the leaders in the industry.

Commercial Vehicles

and Tractors-1

The commercial vehicles segment experienced subdued demand during the year. In response to specific industry needs, KNPL introduced a high-performance casting sealer for tractors, offering superior corrosion resistance. Engineered to withstand harsh conditions, particularly during puddling operations involving fertilisers, this solution helps prevent paint peeling and enhances long-term durability.

@ Electric

Vehicles (EVs)-,

Amid growing emphasis on environmental sustainability, the EV segment has witnessed significant growth across all categories of mobility. As a market leader in automotive coatings, we have strategically enhanced our presence in this segment, successfully maintaining a strong market share and leadership position in the EV sector.

In the reporting year, we achieved remarkable growth in the electric 2-wheeler segment, accompanied by a similar upward trajectory in the electric 3-wheeler space. By leveraging advanced technologies such as our Super Durable Topcoat and a range of energy-efficient solutions, we remained focussed on effectively addressing the evolving needs of this fast-growing market

Powder

Coating -1

In FY 2024-25, the Company achieved modest growth in the powder coating segment, due to the demand from white goods and electrical appliances. The segment continues to cater to diverse industries, including rebar, pipe coating, alloy wheels, and construction equipment, with a focus on delivering premium solutions. Customers are also transitioning from liquid paints to environmentally friendly (zero VOC) powder coatings.

At KNPL, we also focussed on innovation and premium offerings to meet evolving customer needs, including the introduction of pigmented primer-cum-basecoats to enhance both performance and aesthetics. Additionally, we launched breakthrough product to deliver one-shot matt black finishes wthout the need for a matting agent. Another key innovation was Monocoat metallic coatings for 4W ancillary applications.

Liquid

Coating -1

The liquid coatings segment at KNPL sustained its growth momentum in FY 2024-25, supported by strong performance in high-performance coatings, driven by increased infrastructure activity and rising demand for durable, high-quality solutions.

During this period, we witnessed strong growth in the premium segment driven by demand from oil & gas and heavy engineering segments. We also focussed on enhancing our product range with an emphasis on the premium segment.

Technologically, we remain well-eguipped to navigate the evolving market landscape, ensuring our continued success in delivering cutting-edge solutions to our customers.

Research & Development (R&D)

OVERVIEW

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In recent years, we have maintained our position as one of the leaders in the coatings industry The Company's R&D team is dedicated to creating innovative solutions that address the evolving needs of our customers while aligning with our sustainability objectives. During the year, we successfully filed 24 patents related to paint composition and the processes involved in paint preparation.

A notable achievement was the introduction of groundbreaking technologies that meet the stringent requirements of the industry KNPL has excelled in automotive coatings, achieving significant success by implementing technologies that reduce resource consumption and energy usage. We have engineered high-performance products that are entirely free of heavy metals, ensuring both superior functionality and adherence to stringent environmental regulations.

In our performance coatings business, we introduced advanced, application-specific solutions, including a high-performance coating system developed for semi high-speed railway coaches. These innovations reflect our ongoing commitment to addressing critical industry challenges through targeted technological advancement. Our R&D team continues to work closely wth value chain partners, wth a strong focus on value engineering, localisation, and mitigating supply-side risks.

Collaboration with Kansai Paint, Japan, Kansai Paint Group Companies

Over the years, we have maintained our technological leadership in the industrial coatings sector by consistently staying ahead of competition. Our partnership with Kansai Paint Co., Ltd. (KPJ), a prominent global leader wth extensive experience in technology design and development, has been instrumental in this endeavour. Through close collaboration with KPJ, we have successfully developed customised paint and resin formulations specifically tailored to meet the needs of Indian customers.

Among our notable innovations are tin-free cathodic electrodeposition (CED) coatings and stoving primers for 4-wheeler body applications, along wth several other products that excel in both aesthetics and functional performance. KPJ also brings deep insights into emerging global colour trends and extends robust technical support to our clients in India, leveraging its rich international expertise to add significant value across engagements. Furthermore, KNPL also collaborates wth KPJ Group companies worldwide to deliver differentiated technologies to Indian customers across a diverse range of end-user industries, including industrial coatings, coil coatings, auto refinish, and decorative paints.

Key Developments in Decorative Paints

Aligned with our Paint strategy, which focusses on delivering products with distinct, value-added features, our R&D team has made meaningful progress in developing innovative solutions tailored to evolving customer needs. During the year, we further strengthened our portfolio with several strategic product introductions.

We launched Kansai Select Shikisai, inspired by the natural beauty of stones, which offers a sophisticated matte finish embodying elegance and luxury.

Additionally, our Wow White Range features superior whiteness and provides 15% greater coverage. In the wood coating category, we launched Nerolac Wonderwood Gloria NXT, an offering that stands out for its high-gloss finish and superior resistance to scratches and stains. These advancements underscore our commitment to innovation and our responsiveness to the evolving preferences of our customers.

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Key Developments in Automotive Segment

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Passenger Vehicles Segment

m

The Company has made significant strides in the passenger vehicles segment, wth the launch of innovative low flash off compact 3C-1B system for roof painting. This solution offers a range of sustainability benefits, including the elimination of one baking cycle, resulting in energy conservation, and a low film build that enables reduced paint consumption.

Additionally, we introduced Everlast Matt clear coat for one of the country's leading passenger vehicle manufacturers. The product offers superior workability and enhances functional performance.

J

Two-Wheeler Segment

In the 2-wheeler segment, we have introduced several noteworthy products that cater to the evolving needs of the market These innovative products stand out as a vibrant two-coat shade developed in Monocoat for excellent workability. Our versatile low-bake product suitable for both metal and plastic substrates, further expands application possibilities. Furthermore, our economical soluton for the general OEM market, provides high-quality performance at a compettive price. These innovations reflect KNPL's commitment to meeting the specific requirements of the 2-wheeler industry

J

Commercial Vehicles Segment

m

In the commercial vehicles segment, the Company introduced several key products that enhance performance and durability Our castng sealer provides excellent corrosion resistance, making it ideal for harsh environments encountered in commercial applicatons. Our high-solid paint recognised for its exceptional durability, is suitable for demanding commercial uses.In addition to it, the combination of Texture Primer and Topcoat offers a unique textured finish enhancing aesthetic appeal and ensuring robust protecton. These developments highlight KNPL's commitment to innovation and quality in the commercial vehicles sector.

A

Key Developments in Performance Coating Segment

In the performance coatings segment, we have introduced several impressive products that enhance durability and functionality. In coil coating application, we have introduced a highly resilient product capable of withstanding QUV test conditions. Additionally the newy introduced products offer exceptional flexbility on high-thickness substrates. Additionally the Antidust Lacquer is perfect for electrical appliances, maintaining a sleek matte finish.

These advancements solidifies KNPL's commitment to sustainability and customer satisfaction within the performance coatings sector for FY 2024-25. We have launched special high build epoxy paint for the highly humid areas and jetties in the tidal zone application.

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Key Developments in Powder Coatings

In the powder coatings segment, we have made significant advancements by introducing innovative products that cater to diverse market needs. Notably we developed a new pigmented primer-cum-basecoat specifically designed for alloy wheels, enhancing both performance and aesthetics. We also introduced a specialised anti-static coating technology tailored for ESD applications. These new products exemplify our commitment to innovation and quality reinforcing KNPL's position as a trusted provider of powder coating solutions in the market

A

Key Developments in Coil Coatings

With regard to coil coatngs, we have developed a high-build system engineered for enhanced durability and longevity specifically suited for applications such as puff panels used in high-rise buildings, airports, and similar infrastructure. This innovative product is suitable for both domestc and international markets, addressing the increasing demand for coated metals in infrastructure development and construction projects.

A

Key Developments in Auto Refinish

In FY 2024-25, we launched an Economy Range Product crafted as an affordable alternative in the automotive refinish segment, delivering consistent results where cost-efficiency matters.

Supply

Chain

The supply chain landscape continues to undergo rapid shifts, shaped by geopolitical uncertainties, crude oil price volatility, foreign exchange fluctuations, and import-related logistical constraints. AtKNPL, we view these disruptions not as setbacks, but as catalysts, driving us to strengthen our supply chain resilience through proactive innovation and strategic adaptation. Over the years, our supply chain has remained a critical pillar of our competitive edge, enabling us to uphold the highest standards of quality and deliver reliable customer service. Our extensive network comprises nine owned manufacturing facilities that produce our products using materials and services from over 500 key suppliers. We efficiently reached dealers and distributors nationwide, through a robust distribution system of 114 depots and 7 RDCs.

At KNPL, our long-term performance and brand value are deeply anchored in the strength and agility of our supply chain. To meet these objectives, we place strong emphasis on close collaboration and foster trusted, mutually rewarding partnerships across our supply chain ecosystem. Our Annual Suppliers Conference enables us to engage with all our suppliers, recognise their excellence, and foster open communication.

We also recognise the importance of inclusive growth among all our stakeholders. During FY 2024-25, approxmately 20% of our input materials were sourced from MSMEs, supporting inclusive growth initiatives. Additionally, to promote local sourcing, 75% of our input material was sourced within India. Furthermore, to engage our suppliers in our commitment to sustainability, we initiated a ‘Value Chain Sustainability' programme. This includes training many of our suppliers on climate change awareness and greenhouse gas (GHG) inventorisation. As a proactive step, KNPL has begun engaging with suppliers on emissions management.

The end-to-end digital transformation of our supply chain, coupled with purpose-led partnerships, will enable us to create a future-fit supply chain that is resilient, efficient, and sustainable.

Information

Technology

In recent years, we have made substantial enhancements to our information technology capabilities across all operational functions by deploying a suite of new applications. Our IT ecosystem extends seamlessly to both internal and external stakeholders, with customised solutions developed specifically for dealers, painters, architects, interior designers, and our frontline sales teams. While managing a diverse array of applications, KNPL is committed to upholding the highest standards | of security, as an essential and non-negotiable component of our operations. We utilise state-of-the-art tools and processes to safeguard our intellectual property and IT infrastructure. Through advanced threat monitoring and prevention measures overseen by the Corporate Information Security Steering Committee, we are committed to ensuring the early detection and mitigation of cyber threats across the Company.

Furthermore, we have made cybersecurity training mandatory for all the employees to keep them aware ofpotential threats and security concerns. We routinely disseminate cybersecurity awareness materials to employees, offering practical guidance on digital security best practices, spam and fraud prevention, safe usage of Al tools, and other key aspects of cyber hygiene. These initiatives collectively ensure that we are well-prepared to face future challenges, safeguard our valuable information, and support our continuous growth.

I We are making significant progress on our digital ecosystem, including transforming our IT landscape by digitalising our operations. This is being done through the implementation of the latest technologies in core processes, supply chain, and procurement among others.

Innovation

(AVINYA) -,

Building on the success of previous years, we launched two innovation seasons, each targeting specific strategic agendas aligned with our organisational goals.

In addition to promoting innovation, we have prioritised culture building among employees through cross-functional participation, training, and developmentinitiatives.

By continuing to promote a collaborative environment for idea generation and execution, our AVINYA platform empowers employees to take ownership of their innovations, driving success and positioning the Company for future growth.

Employee

Well-being -,

At KNPL, we remain steadfast in our commitment to enhancing the well-being of our employees, recognising them as the cornerstone of organisational success. One of the key initiatives in this regard is the Wellness Corner App, which serves as a comprehensive platform for both physical and mental well-being.

Through our Wellness Wednesday Sessions, we consistently raise awareness among employees around mental and physical health, productivity, emotional intelligence, and work-life balance. Additionally our monthly newsletter, ‘Impressions,' features Nerolites' sharing their experiences in maintaining a healthy lifestyle.

These initiatives reflect our unwavering dedication to creating a supportive and thriving workplace environment where employees feel valued, empowered, and inspired to excel.

Capability

Building

Our initiative, TAJ 2.0 (Tap-Abhyaas-Jap), exemplifies our dedication to nurturing leadership potential. By collaborating with world-class organisations, this programme is aimed at building a strong leadership pipeline. Additionally, through Abhyaas, new joinees are introduced to all our products. For our sales front-liners, we rolled out Advanced Sales Training modules, while at the managerial level, our ‘Lead with Impact' programme continued to strengthen leadership capabilities. We also leveraged the Percipio digital learning platform to promote self-directed learning and upskilling. In addition, we expanded our capability-building initiatives by training employees on Enterprise Risk Management (ERM) and the nine principles of BRSR, reinforcing our commitment to sound corporate governance practices. Through these diverse programmes spanning all employee levels, we reaffirm our commitment to individual growth and organisational excellence.

Employee

Connect-1

At KNPL, we emphasise on cultivating strong relationships with employees through a variety ofengagementinitiatives.

To recognise and celebrate employee contributions, the Company has implemented the 'Titan ' recognition system. This initiative allows employees to acknowledge their peers, for achievements. Our engagement initiative, Life@Nerolac, embodies the spirit of community and collaboration by platform, enabling employees to share updates, ideas, and accolades, fostering a cohesive and engaged workforce.

We have also established robust employee communication platforms such as the MD's Townhall, MD Samvaad, Coffee with HR, Works Manager Address sessions, and the Annual Learning Conference.

Throughout the year, the Company actively celebrates cultural and festive occasions across its plants, head office, R&D centres, and depots. On International Women's Day we established the Women Impact Network (WIN), an employee-led resource group aimed at empowering women within the Company.

Through these thoughtfully designed programmes, we reaffirm our commitment to creating an engaging workplace where employees feel valued and connected.

Nurturing

Talent

KNPL emphasises on nurturing talent to align individual aspirations with organisational objectives. A cornerstone of this talent development strategy is the Campus Collaboration Programme, designed to attract exceptional talent from premier management and technical institutes across the country The Gurukul programme offers summer training opportunities, while the Aarambh Campus Programme facilitates the seamless transition of trainees into full-fledged Nerolites into roles such as management trainee, graduate engineer trainee, technical trainee, and sales trainee based on their qualifications.

Environment, Social and Governance

At KNPL, the concept of material issues involves identifying and prioritising key concerns that significantly influence our capacity to generate value for stakeholders. These material issues are considered critical, given their potential to significantly influence our commercial sustainability social relevance, and the strength of our stakeholder relationships. By recognising and addressing these material issues, we aim to proactively manage our impact enhance our resilience, and uphold our commitment to creating sustainable value for all stakeholders.

Opportunities and Threats

Information for this section can be found in the ‘Opportunities and Threats' section under the Corporate Overview section.

Risks and Concerns

Information for this section can be found in the ‘Risks and Concerns' section under the Corporate Overview section.

Outlook

TheIndian paintsindustryis anticipated to experience modest growth in FY 2025-26, driven by favourable macroeconomic conditions, rising urbanisation, and increased construction andinfrastructure development activities. This growth can also be attributed to decent demand in both the decorative and industrial segments. In the decorative segment, growth will be supported by higher disposable incomes, premiumisation trends, a rising consumer preference for eco-friendly products, and government initiatives such as the Housing for All programme and the Smart Cities Mission. The industrial segment is also projected to maintain healthy momentum, bolstered by automotive production and significant infrastructure expansion.

Competition within the industry is intensifying, with the entry of new players challenging the market share of established companies. This is paving the way for increased investment, innovation, and enhanced distribution networks. While the sector may continue to face challenges related to raw material price fluctuations and margin pressures, companies are expected to mitigate these risks through product innovation, digitalisation, and a strong focus on sustainability. Overall, the Indian paints industry is well-positioned for sustained growth in FY 2025-26, supported by resilient demand drivers, a growing consumer base, and an evolving competitive landscape.

Internal Control Systems and their Adequacy

Our internal control systems are designed to monitor and manage our day-to-day operations efficiently. These systems ensure compliance with numerous concepts, regulations, and norms, adhering to methodology requirements. To enhance our internal control mechanisms, we have implemented an Internal Financial Control system in compliance with the provisions of Section 134(5)(e) of The Companies Act, 2013. This system provides the Board of Directors with additional oversight capabilities. The implementation of these systems follows the framework outlined in the Guidance Note on Audit of Internal Financial Controls in Financial Reporting issued by The Institute of Chartered Accountants of India, aimed at addressing KNPL's operational and financial risks. Moreover, our systems undergo testing by statutory auditors using automated techniques.

( _ ^

Control Efficiency

Index and Robust

Control Index-1

The CEI and RCI remain integral to the Company's strategy for assessing internal audit effectiveness.

We measure our control mechanisms against industry benchmarks to maintain efficient operations. Our internal audit programme focusses on determining gaps in control design, policy design, control or process deviations, IT systems, and regulatory compliance. Additionally, our internal audit programme evaluates the potential for automation in control processes and we leverage audit results to enhance the Company's internal controls.

Compliances-1

KNPL has developed a dashboard to monitor key legislative changes notified by various government authorities, which are then tracked by the Management for requirements and implementation. The Company tracks and ensures regulatory compliance online through the Legatrix system. The system is updated regularly with all the changes in compliance as they occur. The online tracking and tracing of completion help ensure strict adherence to regulations. In addition, the Company tracks any legal cases through the Roznama System.

V_)

Cautionary

Statement

Statements in the Management Discussion and Analysis section of this report describing the Company's objectives, estimates, and expectations may be ‘forward-looking statements' within the meaning of the applicable laws and regulations. The actual results might differ materially from those either expressed or implied.

2. Directors’ Responsibility Statement

As stipulated under the provisions contained in Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, (“the Act”), the Board of Directors to the best of its knowledge and belief and according to the information and explanations obtained by it, hereby state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. the directors have selected such accounting policies and applied them consistently and made judgments 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 the Company for that period;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts of the Company on a going concern basis;

v. the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

3. New Projects

During the financial year, the Company has:

1. completed Greenfield manufacturing project at Atchutapuram, Andhra Pradesh (Vizag Plant) and production has commenced;

2. started capacity enhancement of industrial Alkyd and Polyester Resin at Sayakha Plant and of Acrylic Resin at Bawal Plant, to meet the increased automotive paint demand;

3. commenced automotive paint capacity addition project at Sayakha Plant, to meet the future demand of Original Equipment Manufacturers (OEMs);

4. completed and put in operation, captive wind turbine project for Sayakha Plant; and

5. initiated offsite Solar power plant project for Bawal Plant, to optimise the power cost.

4. Land Monetisation

In the previous financial year, the Board of Directors of the Company had approved a proposal for sale of the Company's land parcels at Lower Parel, Mumbai, together with building

thereon to Aethon Developers Private Limited (hereinafter referred to as Aethon Developers), for an aggregate consideration of ? 726 Crores. Accordingly, the Company entered into an Agreement for Sale with Aethon Developers. The sale was subject to completion of certain procedures and approvals as were necessary in this regard.

As a part of the procedures, on 30th September, 2024, the Company entered into a Deed of Conveyance with the Bombay Zoroastrian Jashan Committee, the Lessor, for acquiring the ownership and title of one of the land parcels of which the Company was the Lessee, by purchase of the revisionary rights for a consideration of ? 48 Crores.

After completion of the procedures and approvals as required for the sale, on 24th October, 2024, the Company entered into definitive agreements for conveyance/assignment of lease with Aethon Developers for an aggregate consideration of ? 726 Crores.

5. Directors

Mr. Hitoshi Nishibayashi (holding Director Identification Number 03169150), Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting (“AGM”) of the Company. He is not seeking re-appointment due to health reasons and shall retire as a Director of the Company at the AGM on 30th June, 2025. The Board placed on record its sincere appreciation and gratitude for the services rendered by Mr. Nishibayashi during his association with the Company.

In terms of the provisions of the Act and the Articles of Association of the Company, Mr. Takashi Tomioka (holding Director Identification Number 08736654), Non-Executive Director, is liable to retire by rotation at the ensuing AGM of the Company and being eligible, offers himself for re-appointment.

Mr. Hirokazu Kotera (holding Director Identification Number 10707431) has been appointed as a Whole-time Director designated as the Executive Director of the Company for a term of 3 (three) years commencing from 1st August, 2024 and ending on 31st July, 2027 (both days inclusive). The Shareholders approved the terms of appointment, vide Postal Ballot, on 26th September, 2024.

For the period from 1st August, 2024 to 31st March, 2025, Mr. Kotera has received a remuneration of ? 51.95 Lakhs from Kansai Paint Co. Ltd., Japan (“KPJ”) as a General Manager in KPJ.

Mr. Uday S. Bhansali (holding Director Identification Number 00363902) has been appointed as an Independent Director of the Company to hold office for a term of 5 (five) years commencing from 6th November, 2024 and ending on 5th November, 2029 (both days inclusive). The Shareholders approved his appointment, vide Postal Ballot, on 8th January, 2025.

Mr. P P Shah (holding Director Identification Number 00066242) retired upon completion of his second term of office as an Independent Director and consequently, ceased to be a Director and Chairman of the Company, from close

of business on 29th January, 2025. The Board placed on record its sincere appreciation and gratitude for the valuable contribution made by Mr. Shah, during his association with the Company.

Mr. Bhaskar Bhat (holding Director Identification Number 00148778), Independent Director has been appointed as the Chairman of the Company with effect from 30th January, 2025.

Mr. Anuj Jain (holding Director Identification Number 08091524), Managing Director, took an early retirement from the services of the Company at the close of business on 31st March, 2025. The Board placed on record its sincere appreciation and gratitude for the valuable contribution made by Mr. Jain, during his association with the Company.

Mr. Pravin D. Chaudhari (holding Director Identification Number 02171823) has been appointed as the Managing Director of the Company for a term of 3 (three) years commencing from 1st April, 2025 and ending on 31st March, 2028 (both days inclusive). The Shareholders approved the terms of appointment, vide Postal Ballot, on 18th April, 2025. As Mr. Chaudhari is not a resident of India as per the requirements of Schedule V of the Act, approval of the Central Government has been sought for the appointment of Mr. Chaudhari as the Managing Director of the Company.

Pursuant to 161(1) of the Act, read with the Articles of Association of the Company, the Board of Directors of the Company, on recommendation of the Nomination and Remuneration Committee, appointed Mr. Gen Yokota (holding Director Identification Number 11084786) as an Additional Director and Non-Executive Director of the Company with effect from 6th May, 2025, subject to the approval of the Shareholders. The Board, while appointing Mr. Yokota considered his technical knowledge and rich experience in the field of research along with the skills, capabilities and proficiency required for the role.

None of the Directors are disqualified as on 31st March, 2025 from being appointed as a Director under Section 164 of the Act.

All the Independent Directors on the Board have given a declaration of their independence to the Company as required under Section 149(6) of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”). In the opinion of the Board, all the Independent Directors possess integrity, relevant expertise and experience, including proficiency required to be an Independent Director of the Company. They fulfill the conditions of independence as specified in the Act and SEBI Listing Regulations, comply with the Code for Independent Directors as prescribed in Schedule IV of the Act and are independent of the Management.

The Company has a Code of Conduct for Directors and Senior Management. All the Directors and members of Senior Management have confirmed compliance with the Code.

Details with respect to the composition of the Board, the meetings of the Board held during the year and the attendance of the Directors thereat have been provided separately in the Annual Report, as a part of the Report on Corporate Governance.

6. Key Managerial Personnel

Mr. Anuj Jain, Managing Director, took an early retirement from the services of the Company at the close of business on 31st March, 2025.

Mr. Pravin D. Chaudhari has been appointed as the Managing Director of the Company with effect from 1st April, 2025.

In terms of Section 203 of the Act, the Company has the following Key Managerial Personnel: Mr. Pravin D. Chaudhari, Managing Director, Mr. P D. Pai, Chief Financial Officer and Mr. G. T Govindarajan, Company Secretary.

7. Meetings of the Board

The Board met 6 (six) times during the financial year ended 31st March, 2025. The meeting details are provided separately in the Annual Report, as a part of the Report on Corporate Governance. The maximum time gap between any two meetings did not exceed 120 days, as prescribed in the Act and SEBI Listing Regulations.

8. Board Evaluation

In terms of the applicable provisions of the Act and SEBI Listing Regulations, the Nomination and Remuneration Committee and Board of Directors have approved a framework which lays down a structured approach, guidelines and processes to be adopted for carrying out evaluation of the performance of the Directors, the Board as a whole and its Committees. The criteria are broadly based on the Guidance Note on Board Evaluation, issued by the Securities and Exchange Board of India.

Detailed questionnaires covering various parameters relevant for the evaluation are circulated to the Directors. The feedback received from the Directors is discussed at the meetings of Independent Directors, Nomination and Remuneration Committee and Board.

For the year under review, the Board carried out the evaluation of its own performance, its Committees and individual Directors. Evaluation results as collated and presented, were noted by the Independent Directors, Nomination and Remuneration Committee and Board.

9. Particulars on the Committees of the Board

The details with regard to the composition of the Committees of the Board and the number of meetings held during the year of such Committees, as required under the SEBI Listing Regulations, is separately provided in the Annual Report, as part of the Report on Corporate Governance.

10. Audit Committee

In terms of the provisions of Regulation 18 of the SEBI Listing Regulations read with Section 177 of the Act, the constitution of Audit Committee as on 31st March, 2025 is as follows:

(c) monitor the CSR Policy of the Company from time to time.

During the financial year ended 31st March 2025, 2 (two) meetings of CSR Committee were held on 25th November, 2024 and 20th March, 2025 which were attended by all members of the Committee.

The Board on recommendation of the CSR Committee has framed a CSR Policy and the same is available on the website of the Company at https://www.nerolac.com/ financial/policies.html.

The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, including a brief outline of the Company's CSR Policy, is annexed to this Report as Annexure 1.

12. Risk Management Policy

The Company has identified the risk areas in its operations along with its probability and severity, department wise. An effective Risk Management Framework is put in place in the Company in order to analyze, control and mitigate risk. Risk profiling is also put in place for all the areas of operations in the Company and well integrated in the business cycle. The various risks to which the Company is exposed are disclosed as a part of Management Discussion and Analysis, hereinabove.

The Risk Management Framework of the Company comprises of Risk Management Committee and the Risk Officer.

In terms of the provisions of Regulation 21 of the SEBI Listing Regulations, the constitution of Risk Management Committee as on 31st March, 2025 is as follows:

a Ms. Sonia Singh has been appointed as the Chairperson of the Risk Management Committee with effect from 30th January, 2025.

# Mr. Uday S. Bhansali and Mr. Hirokazu Kotera have been appointed as the members of the Risk Management Committee with effect from 30th January, 2025.

* Mr. Anuj Jain ceased to be a member of the Risk Management Committee consequent to his early retirement at the close of business on 31st March, 2025.

• The Non-Executive Independent Directors are paid commission within the ceiling of 1% of net profits of the Company as specified in Section 197 of the Act. The commission payable to Non-Executive Independent Directors is decided by the Board, on recommendation of the Nomination and Remuneration Committee, based on a number of factors including number of Board and Committee meetings attended, individual contribution thereat etc. The Non-Executive Independent Directors are also paid sitting fees for attending the meetings of the Board or Committee thereof within the limits prescribed under the Act.

• The objective of the policy is to have a compensation framework that will reward and retain talent.

• The remuneration will be such as to ensure that the correlation of remuneration to performance is clear and meets appropriate performance benchmarks.

• Remuneration to Key Managerial Personnel, Senior Management and other employees will involve a balance between fixed and variable pay reflecting short and long term performance objectives of the employees in line with the working of the Company and its goals.

• The short and long term performance objectives cover amongst various aspects industry performance, customer performance, overall economic environment, financial performance and performance on Environment, Social and Governance objectives.

• For Directors, the Performance Pay will be linked to achievement of Business Plan (achievement of short-term and long-term business objective).

• For Heads of Department, the Performance Pay will be linked to achievement of functional plan which is derived from the business plan. The functional plan includes both, short-term and long-term objectives.

• For other management personnel, the Performance Pay will be linked to achievement of individual set objectives and part of this will also be linked to overall Company performance.

The Remuneration Policy is also available on the website of the Company at https://www.nerolac.com/financial/policies.html.

14. Vigil Mechanism - Whistle Blower Policy

The Company, pursuant to Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, has a Whistle Blower Policy to report genuine concerns and grievances. The Policy provides adequate safeguards against victimisation of persons who use the Whistle Blower mechanism. The Policy also provides for direct access to the Chairman of the Audit Committee.

Details with respect to implementation of the Whistle Blower Policy are separately disclosed in the Annual Report, as a part of the Report on Corporate Governance. The Policy is also available on the website of the Company at https://www.nerolac.com/financial/policies.html.

15. Dividend Distribution Policy

The Dividend Distribution Policy of the Company has been formulated to ensure compliance with the provisions of Regulation 43A of the SEBI Listing Regulations. The Dividend Distribution Policy is also available on the website of the Company at https://www.nerolac.com/financial/policies.html.

The declaration of dividend by the Company is in compliance with its Dividend Distribution Policy.

16. Prevention of Sexual Harassment at workplace

In line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”), the Company has adopted a Policy on Appropriate Social Conduct at Workplace. The Policy is applicable to all employees and non-employees including business associates, vendors, trainees etc.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the POSH Act to redress complaints received on sexual harassment as well as other forms of verbal, physical, written or visual harassment.

During the year under review, three complaints of sexual harassment was received and resolved as per the provisions of the POSH Act.

17. Related Party Transactions

The Company has in place a Policy on dealing with Related Party Transactions and on Materiality of Related Party Transactions which is available on the website of the Company at https://www.nerolac.com/financial/policies.html. In terms of the same, a statement in summary form of transactions with related parties in the ordinary course of business and on arm's length basis is periodically placed before the Audit Committee for its review. Omnibus approval was obtained for transactions which were repetitive in nature. Transactions entered into pursuant to omnibus approval were placed before the Audit Committee for its review during the year. Related party transactions have been disclosed in Note no. 38 to the Standalone Financial Statements.

In terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all related party transactions that were entered into, during the year under review, were in the ordinary course of business of the Company and on arm's length basis. There were no material related party transactions during the year. Accordingly, Form AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8

of the Companies (Accounts) Rules, 2014, for disclosure of details of related party transactions, which are “not at arm's length basis” and also which are “material and at arm's length basis”, is not provided as an annexure to this Report as it is not applicable.

18. Particulars of Loans, Guarantees or Investments under Section 186 of the Act

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, are separately disclosed in the Annual Report, as a part of the Notes to the Financial Statements.

19. Particulars regarding Employees Remuneration

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure 2.

20. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

The statement giving the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required in terms of Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure 3.

21. Corporate Governance

The Company is in full compliance with the requirements and disclosures that have to be made in terms of the requirements of Corporate Governance specified in the SEBI Listing Regulations.

In terms of the provisions of Schedule V(C) of the SEBI Listing Regulations, a detailed Report on Corporate Governance forms part of the Annual Report. Further, a Certificate from the Statutory Auditors of the Company confirming compliance with the requirements of Corporate Governance as specified in the SEBI Listing Regulations is provided together with the Report on Corporate Governance, the same shall be considered to be an annexure to this Report.

22. Business Responsibility and Sustainability Report

The Business Responsibility and Sustainability Report as required in terms of the provisions of Regulation 34(2)(f) of the SEBI Listing Regulations, separately forms part of the Annual Report.

23. Share Capital

The paid-up Equity Share Capital as at 31st March, 2025 stood at ? 80.84 Crores.

During the year under review, the Company allotted 65,300 Equity Shares of Re. 1 each pursuant to exercise of Restricted Stock Units (“RSUs”) granted under the Kansai Nerolac Paints Limited - Restricted Stock Unit Plan, 2022 (“RSU Plan 2022”).

Further, after 31st March, 2025, the Company allotted 45,799 Equity Shares of Re. 1 each pursuant to exercise of RSUs granted under the RSU Plan 2022.

During the year under review, the Company has not issued any convertible securities or shares with differential voting rights or sweat equity shares or warrants.

24. Restricted Stock Unit Plan

The Company introduced the Kansai Nerolac Paints Limited - Restricted Stock Unit Plan 2022 (“RSU Plan 2022”) in terms of the approval of the Shareholders vide Postal Ballot on 25th October, 2022, to attract, retain, motivate its employees and improve performance of the Company for ensuring sustained growth.

During the financial year 2024-25, there has been no change in the RSU Plan 2022. The RSU Plan 2022 is available on the Company's website at https://www.nerolac.com/investors/ restricted-stock-units.html.

Information as required under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB & SE Regulations”) 2021 has been uploaded on the Company's website at https://www.nerolac.com/investors/financial-results.html and is annexed to this Report as Annexure 4.

The certificate from the Secretarial Auditor, certifying that the RSU Plan 2022 has been implemented in accordance with SEBI SBEB & SE Regulations and in accordance with the Special Resolution passed by the Members of the Company through Postal Ballot on 25th October, 2022 and 15th June 2023, will be available for inspection of the Shareholders through electronic mode. Shareholders may write to the Company at agm@nerolac.com in that regard, by mentioning “Request for Inspection” in the subject of the e-mail.

25. Details of Unclaimed Suspense Account

Details pertaining to Unclaimed Suspense Account of the Company are separately provided in the Annual Report, as part of the Report on Corporate Governance.

26. Investor Education and Protection Fund (“IEPF”)

Transfer of Unclaimed Dividend to IEPF

During the year under review, dividend amounting to ? 34.21 Lakhs that had not been claimed by the Shareholders for the year ended 31st March, 2017, was transferred to the credit of IEPF as required under Sections 124 and 125 of the Act.

Unclaimed dividend as on 31st March, 2025

As on 31st March, 2025, dividend amounting to ? 2.46 Crores has not been claimed by Shareholders of the Company.

Shareholders are required to lodge their claims with the Registrar and Share Transfer Agents of the Company i.e. MUFG Intime India Private Limited (formerly Link Intime India Private Limited), for unclaimed dividend.

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended), the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 31st March, 2024, on the website of the Company at www.nerolac.com. The same are also available with the Ministry of Corporate Affairs.

Transfer of Equity Shares

As required under Section 124 of the Act, 23,101 Equity Shares, in respect of which dividend has not been claimed by the Shareholders for 7 (seven) consecutive years or more, have been transferred by the Company to the IEPF Authority during the financial year 2024-25.

Details of such Equity Shares transferred have been uploaded on the website of the Company at www.nerolac.com. The same are also available with the Ministry of Corporate Affairs.

Nodal Officer

The Company has appointed Mr. G. T. Govindarajan, Company Secretary, as the Nodal Officer for the purpose of verification of claims filed with the Company in terms of IEPF Rules and for co-ordination with the IEPF Authority. The said details are also available on the website of the Company at www.nerolac.com.

27. Statutory Auditors

At the 104th AGM of the Company, the Shareholders had approved the re-appointment of S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E / E300003) as the Statutory Auditors of the Company, to hold office for a second term of 5 (five) consecutive years from the conclusion of the 104th AGM until the conclusion of the 109th AGM of the Company, in terms of the applicable provisions of Section 139(1) of the Act read with the Companies (Audit and Auditors) Rules, 2014. Details of the remuneration paid to S R B C & CO LLP, Chartered Accountants, Statutory Auditors, during the financial year 2024-25 are disclosed in the Financial Statements of Company, which forms part of the Annual Report.

The Auditors' Report on the Financial Statements (Standalone and Consolidated) of the Company for the year under review, is clean and there are no qualifications in the said Report. Also, no frauds in terms of the provisions of Section 143(12) of the Act have been reported by the Auditors in their Report for the year under review.

The Notes to the Financial Statements (Standalone and Consolidated) are self-explanatory and do not call for any further comments.

28. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, the Company had appointed JHR & Associates, Company Secretaries, as the Secretarial Auditor for the year under review, to conduct the Secretarial Audit of the Company. The Secretarial Audit Report for the year under review issued by the Secretarial Auditor is annexed to this Report as Annexure 5. There is no qualification or adverse remark in their Report.

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Further, in terms of Regulation 24A of the SEBI Listing Regulations, as amended with effect from 13th December, 2024, the Board has appointed JHR & Associates, Company Secretaries, (Firm registration no. P2015MH059200) as the Secretarial Auditor of the Company for a term of 5 (five) consecutive years commencing from 1st April, 2025 to 31st March, 2030, subject to the approval of the Shareholders at the ensuing 105th AGM. The Company is seeking the approval of the Shareholders for appointment of JHR & Associates, Company Secretaries, as the Secretarial Auditors of the Company, vide Item no. 6 of the Notice of 105th AGM.

JHR & Associates, a peer reviewed firm, was established in 2017 by a team of experienced professionals. Prior to this, the founding partners had been active in the industry since 1996 under the name J.H. Ranade & Associates. The firm specializes in various areas including core-secretarial compliance, FEMA regulations, due diligence, secretarial audits, corporate governance, mergers and acquisitions, charge management and XBRL services.

The Company has obtained a written consent for such appointment along with a certificate from JHR & Associates confirming that they are not disqualified from being appointed as Secretarial Auditor of the Company.

29. Cost Audit

The Company has maintained cost records as specified by the Central Government under Section 148(1) of the Act. Further, the Company had appointed D. C. Dave & Co., Cost Accountants (Registration No. 000611), as the Cost Auditor to conduct an audit of its cost accounting records for the financial year 2023-24, pertaining to products of the Company as required by the law. The Cost Audit Report submitted by the Cost Auditor for the financial year 2023-24 was clean and there was no qualification in their Report. The same was duly filed with Ministry of Corporate Affairs.

The Company had re-appointed D.C. Dave & Co., Cost Accountants, as the Cost Auditor for the financial year 2024-25 and the Cost Audit Report when submitted by them, will be duly filed with the Ministry of Corporate Affairs.

Further, the Company has re-appointed D.C. Dave & Co., Cost Accountants, as the Cost Auditor for the financial year 2025-26, to conduct an audit of its cost accounting records pertaining to the products of the Company as required by the law, at a remuneration of ? 4,00,000 plus GST and reimbursement of out-of-pocket expenses. The Company is seeking the approval of the Shareholders by means of ratification, for the remuneration to be paid to D. C. Dave & Co., Cost Accountants, vide Item no. 5 of the Notice of 105th AGM.

The eligibility and consent letter from D. C. Dave & Co., Cost Accountants, has been received to the effect that their appointment as Cost Auditor, if made, would be in accordance with the provisions of the Act and Rules framed thereunder.

30. General Disclosure

1. During the year under review, there was no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.

2. During the year under review, there were no instances of onetime settlement with any Banks or Financial Institutions.

31. General Shareholder Information

General Shareholder Information is given as Item no. 12 of the Report on Corporate Governance forming part of the Annual Report.

32. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March, 2025 is available on the website of the Company at https://www.nerolac.com/ investors/annual-return.html.

33. Acknowledgements

Your Directors wish to express their grateful appreciation for the co-operation and continued support received from customers, promoter company, collaborators, vendors, investors, shareholders, financial institutions, banks, regulatory authorities and the society at large during the year.

We also place on record our appreciation for the contribution made by our employees at all levels and for their commitment, hard work and support.