DIRECTORS' REPORT

The Directors of your Company are pleased to present the 106^th Annual Report and the Audited Financial Statements (Standalone and
Consolidated) for the year ended 31^st March, 2026 (‘reporting year'/year under review'/FY 2025-26'). 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 Company's subsidiaries, including overseas subsidiaries and their performance during the year under review

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 and Bangladesh
through strategic acquisitions and joint ventures. As one of the
largest manufacturers of paints and coatings in India, we have
established a strong 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, passion is more than emotion; it is the driving force
behind everything we do. It fuels high performance, sparks
innovation, and pushes us to raise the bar every single day
Here, ambition is encouraged, effort is recognised, and growth
is purposefully designed. With clear pathways for progression,
learning, and leadership, passion here takes colour, shape,
and impact.

As we look ahead to FY 2026-27, we remain committed to
building on the strong foundation established in recent years.
Guided by our core values of innovation, integrity and customer
centricity, we aim to deepen our relations with our stakeholders
while maintaining a disciplined approach to growth. We will
continue to enhance our product offerings, improve service
quality and drive operational efficiencies, with the objective of
creating sustainable value for all our stakeholders.

Industry Progress

FY 2025-26 was characterised by a mixed operating
environment for the Indian paints and coatings industry
The year was shaped by multiple external factors, such as
geopolitical conflicts, the onset and exit of the monsoon, GST
cuts, infrastructure growth, and consumer demographics.

During the year under review, the demand for decorative
paints, especially in the North region, was affected by the Indo-
Pak conflict As the year progressed, the painting cycle was
affected by the early onset and prolonged monsoon. However,
rural demand remained relatively stable throughout the year,
while urban demand showed an uptick. Also, demand during
the festive period was subdued due to a shorter Diwali season;
however, a recovery was observed in the latter part of the year.
Overall, the Decorative segment continued to face near-term
pressures, even as underlying demand drivers remained intact.

For the automotive industry the second half of the year saw
a decisive upshift as GST 2.0 improved affordability lifted
sentiment and triggered momentum, which was further
bolstered by the festve season. Demand momentum
remained robust across all major sub-segments. The
Passenger Vehicle segment delivered good growth, reflecting
sustained consumer demand and new model launches. The
two-wheeler and Three-wheeler segments also recorded
strong growth, whereas the Commercial Vehicle segment
witnessed strong double-digit growth.

The Performance Coatngs segment demonstrated
resilience and healthy growth during the year. Infrastructure
development across railways, roads, airports, and power
projects contnued to augur well for the industry driving
demand for high-end and premium coatings. General
industrial coatings witnessed healthy demand while the
Powder Coatings segment maintained stable demand.

In summary FY 2025-26 was a year of measured progress
for the paints industry While the year was marked by
short-term challenges, it was supported by strong
fundamentals, infrastructure investments, healthy demand in
the automotve sector, and a sustained shift towards premium
and performance-driven solutions.

Financials

Highlights

A summary of KNPL's standalone financial results for the year ended 31^st March, 2026 (FY 2025-26), compared to the standalone
financial results for the previous year, FY 2024-25, is as follows:

Revenue from operations for the year aggregated to
'7,739.23 Crores, compared to ' 7,496.71 Crores in the previous
year, reflecting 3.2% growth. Athough average crude oil prices
declined during the year, currency depreciation partially offset
the impact. Consequently overall raw material prices remained
largely stable throughout the year.

Meanwhile, we continued our efforts to control overheads, wth
all departments contributing positively towards this objective.
PBDIT for the year stood at ' 986.22 Crores, compared to
' 974.13 Crores in the previous year, refecting 1.2% growth. In
addition, other income increased to ' 152.46 Crores from
' 142.06 Crores recorded in the previous year.

THE FOLLOWING EXCEPTIONAL ITEMS WERE
RECORDED DURING THE YEAR:

♦ Provision for impairment of long-term investment, loan, trade
receivables, and financial guarantees, after considering
past performance and prevailing economic and market
conditions, amounted to ' 5.76 Crores

♦ Additional employee benefit cost of ' 44.72 Crores was
recognised based on actuarial valuation following
implementation of the Wage Code

¥ Loss arising from the fire incident at the warehouse located in
Ghaziabad, Uttar Pradesh, amounted to ' 10.22 Crores

PBT for the year stood at ' 898.91 Crores, marginally lower than
' 907.42 Crores reported in the previous year before exceptional
items, reflecting a degrowth of 0.9%. PAT declined to
' 619.85 Crores from ' 1,021.24 Crores in the previous year,
marking a degrowth of 39.3%. Return on net worth, excluding
exceptional items, stood at 10.3% compared to 11.3% in the
previous year.

During the year, KNPL did not accept any deposits covered
under Chapter V of the Companies Act, 2013. Furthermore, no
material orders were passed by regulators, courts, or tribunals
that could affect our going concern status or future operations.
There was also no change in the nature of our business during
the year. Additionally, no material changes or commitments
affecting our financial position occurred between the end of the
financial year and the date of this report.

Dividend

The Board has recommended dividend of 250% (' 2.50 per share) for the financial year ended 31^st March, 2026. Last year, the
Company declared a final dividend of 375% (' 3.75 per share), including a special dividend of 125% (' 1.25 per share).

Subsidiaries and Consolidated Financial Statements

In accordance with the provisions of tine 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 wwwnerolac.com. Further, based on this policy we do not have any material subsidiaries.

The consolidated financial statements of KNPL as of 31^st March, 2026, have been prepared in accordance with applicable accounting
standards and form part of this Report All subsidiaries of the Company as of 31^st March, 2026 have been considered while preparing
the consolidated financial statements. Further, a separate statement in Form AOC-1, highlighting the key features of the financial
statements of the Company's subsidiaries, forms part of this Report

The Annual Audited Financial Statements of all KNPL subsidiaries are available on the Company's website at
wwwnerolac.com

Indian Subsidiary

The turnover of Nerofx Private Limited stood at
' 163.89 Crores, compared to ' 125.23 Crores in the
previous year. Nerofix Private Limited recorded a loss of
' 7.64 Crores against ' 15.26 Crores in the previous year. At
the same time, strategic initiatives were undertaken to
revamp the business.

The Board of Directors of Nerofix Private Limited and Kansai
Nerolac Paints Limited approved the Scheme of
Amalgamation (‘‘Scheme”) of Nerofx Private Limited
(Transferor Company), Company's wholly owned subsidiary
with the Company (Transferee Company), subject to
requisite approvals including approval from National
Company Law Tribunal, Mumbai Bench (“NCLT”). The
appointed date for the Scheme is 1^st April, 2025.

NCLT vide its order dated 6^th January 2026, directed
convening of a meeting of the Equity Shareholders of the
Company Accordingly a NCLT convened Shareholders
Meeting was held on 27^th February 2026 through Video
Conferencing / Other Audio Visual Means, wherein the
shareholders approved the Scheme wth requisite majority

Overseas Subsidiaries

During the year, the turnover of KNP Japan Private Limited, our
subsidiary in Nepal, rose to ' 76.12 Crores, up from
' 69.43 Crores in the previous year. PAT stood at ' 6.01 Crores,
as compared to ' 5.97 Crores in the previous year.

Kansai Nerolac Paints (Bangladesh) Limited, our subsidiary in
Bangladesh, registered a turnover of ' 91.25 Crores for the
year, as compared to ' 143.18 Crores in the previous year. The
Company incurred a loss of ' 27.55 Crores during the year,
compared to a loss of ' 30.95 Crores in the previous year.

The Board of Directors of the Company approved sale of the
Company's entire stake of 60% of the total equity share
capital of Kansai Paints Lanka (Private) Limited, the
Company's subsidiary in Sri Lanka, to Atire (Private) Limited,
a Sri Lankan entity. The total consideration received by the
Company is LKR 18,00,000 (approxmately ' 5,25,000).

The accounts of Kansai Paints Lanka (Private) Limited,

Sri Lankan subsidiary, have been consolidated till
16^th December, 2025, when it ceased to be a subsidiary of the
Company

Segment-Wise Performance

We have only one segment of activity namely ‘paints,' in accor¬
dance with the definition of ‘Segment' covered under the Indian
Accounting Standards (Ind AS) 108 on Operating Segments. The
performance of the Company is discussed in this report

Decorative Business

Overview

In FY 2025-26, we carried forward our century-long legacy of
excellence, offering painting solutions that seamlessly combine
aesthetics with durability We continued to strengthen our bond
of trust with customers.

During the year, we enriched our portfolio wth 15 new decorative
products. These launches were thoughtfully developed to deliver
distinctive value by combining aesthetics with performance,
further strengthening our position as a trusted solutions provider.

With the objective of delivering professional painting services
through timely execution, tailored colour guidance, and
dedicated supervision, we expanded our Nerolac NxtGen
Painting services to 250 towns.

In the new business segment, the Construction Chemical and
Waterproofing segment demonstrated a very strong growth.
The Project business continued its growth momentum from
the previous year and maintained a strong growth as well. We
continued to provide superior retail experience through our
Nerolac NxtGen Shopee, Shop-in-Shop outlets and Paint
zones. Our Illuminati Programme also witnessed an increased
participation from architects and interior designers. This was
driven by focused engagement efforts and participation in
various exhibitions and seminars.

New Product Launches

Value Creation at
Every Step

During the year under review we remained focused on building
a competitive advantage by expanding our product portfolio and
responding effectively to evolving market requirements. Under
the Paint category we continued to emphasise unique product
offerings that enhance our market presence. Our newly developed
product, Nerolac Excel Everlast 20, offers a 20-year performance
warranty superior crack-bridging ability and anti-carbonation
properties.

In the Interior range, we launched Nerolac Beauty Gold Washable ,
featuring anti-bacterial and stain-resistant properties and 1.25x
better washability. We also introduced Nerolac Beauty Little Master
Super, an economical product that offers a smooth and pleasing
matt finish.

In an effort to provide superior products in our Exterior range, we
launched Nerolac Mica Marble Stretch and Sheen WOW, which
provide 15% more coverage, crack-bridging ability and excellent
dirt pickup resistance, while Nerolac Excel Sheen comes with
superior algae resistance and up to 5°C surface temperature
reduction.

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

Superior Retail
Experience

We remain committed to elevating the retail experience for our
consumers through our NxtGen Premium Shoppe ‘Sapphire' and
‘Ruby'. These experiential platforms provide a one-stop solution
for all surfaces in consumers' homes, offering an immersive
environment where consumers can view, compare, and feel
actual paint finishes, wood coatings & waterproofing solutions,
enabling more informed and confident decision-making. In
addition, trained experts at these outlets offer personalised
colour consultations and need-based product recommendations
to further enrich the consumer journey

As of FY 2025-26, our retail footprint stood at 150 Nerolac
NxtGen Shoppe outlets and 250 Shop in Shop outlets across
the country strengthening our presence and accessibility

During the year, we further enhanced our market reach by
introducing ‘Paint Zones', a new initiative aimed at increasing
visibility and driving growth for small-sized retailers. As of the
end of FY 2025-26, we have reached 250 touchpoints through
Paint Zones.

Influencer Engagement
Programme

PRAGATI PROGRAMME FOR PAINTERS

Our Painter Loyalty Programme, Pragati, remains a key element
of the Company's strategy to enhance engagement within the
Painting Contractor segment. The programme emphasises
capability building and skill development among this important
group of influencers who play a critical role in the final quality of
product application.

During the year, the Company continued to implement multi¬
modal training initiatives, combining classroom-based sessions
with training delivered through mobile mini vans. Through these
efforts, over 1,00,000 painters were trained in paint application
techniques, thereby strengthening their technical skills and
professional expertise. The training programmes focused
on decorative, wood, and designer finishes. In addition, the
Company leveraged its existing Shop Meet programmes to
upskill its loyal painters while simultaneously creating awareness
of the KNPL range of products and services across key markets.
These initiatives contributed to deeper engagement and stronger
brand advocacy within the painter community

Painter engagement is supported by the digital Pragati
application. During FY 2025-26, the application was upgraded

to deliver a faster, smoother and more seamless user
experience. The Company also utilised artificial intelligence to
generate insights into painter purchasing behaviour, enabling
personalised product recommendations aligned with specific
requirements. This approach enhanced the overall painter
experience and supported improved sales outcomes.

ILLUMINATI PROGRAMME FOR ARCHITECTS AND
INTERIOR DESIGNERS

At KNPL, we acknowledge the important role architects and
interior designers play in shaping functional and aesthetically
compelling environments. Over the years, we have successfully
engaged with more than 12,000 professionals across India,
fostering strong relationships and long-term trust through our
Lunch & Learn presentations. To support their creative and
technical requirements, we offered colour consultancy services
and ensured seamless integration of our shade palettes into their
3D design and rendering software, with AD services available
across 45 cities.

In addition, we actively participated in prominent industry
exhibitions, such as FOAD in Delhi and Mumbai, providing a
platform to showcase our diverse product portfolio, strengthen
engagement with the design community and stay aligned
with emerging trends and preferences. Complementing these
initiatives, a nationwide engagement programme featuring a
value-added incentive further enhanced participation and brand
recall among professionals. Collectively these strategic efforts
have significantly strengthened brand awareness and brand
equity among architects and interior designers, who continue to
serve as key future influencers for the organisation.

Growth Businesses

Wood

Coating

During the year, we sustained our positive performance in the
Wood Coating segment driven by growth in the premium category
Our strategic collaboration with ICRO Coatings continued to
be a catalyst for success, enabling the introduction of globally
acclaimed products. This has significantly accelerated our market
expansion in North India and strengthened our competitive edge.

Our neWy launched product, Nerolac Wonderwood RTU - ‘O'
series, covers a complete range of finishes, including glossy
satin, matt, and dead matt The range offers fast drying, good
scratch resistance, and ready-to-use formulatons.

Our Premium Wood Coatings Contractor Loyalty programmes
have played a pivotal role in deepening engagement wth
our contractor community By recognising and celebrating
their contribution, we are nurturing relationships built on trust,
partnership, and shared growth.

With a robust product pipeline, a strengthened partner ecosystem,
and rising acceptance of premium wood solutions, the business is
well poised for sustained growth in the coming year.

Construction Chemicals
and Waterproofing

During the year under review, both Construction Chemicals and
Waterproofing businesses demonstrated very strong growth.
Significant efforts were undertaken to benchmark and enhance
products, enabling the Company to offer a comprehensive
portfolio of construction chemical products aligned with leading
industry standards.

Key product categories, such as Tile Settng and Admixtures,
contributed positively to performance, with both segments
experiencing rapid scale-up. In addition, flooring remains a
category with visible activity The Construction Chemicals
business delivered sturdy performance, and focused initiatives
are underway to further strengthen the operating structure,
enabling profitable and sustainable scalability

Our newy launched product, Nerolac Perma No Damp Super,
provides an exterior waterproof coatng for roofs, terraces, and
walls with up to 10°C surface temperature resistance. Nerolac
Perma R POXY 2K provides high compressive strength, excellent
stain resistance, and waterproofing properties.

Marketing and
Branding

This year, KNPL's Projects Business continued to build on
its strong growth trajectory Our strategic priorities remained
centred on strengthening our presence across key customer
segments, expanding our geographic reach, and enhancing
both operational and on-ground engagement capabilities, as
we continued to consolidate our position in the Builder (Fresh
Painting) segment while driving growth in the CHS (Repainting)
segment and the Government sector

Employee engagement and capability development remained
key priorities during the year A focused project sales conference
was conducted to align teams with strategic objectives, promote
cross-functional collaboration and recognise performance
excellence. The initiative reinforced shared purpose, motvaton
and organisational alignment. We also conducted Contractor
Engagement Meets across the country bringing together
over 1,000 of our loyal and influential contractors. These
meets deepened our ecosystem relationships, strengthened
partnerships, encouraged knowledge sharing, and reinforced
KNPL's commitment to supporting contractor growth and
capability building.

We also strengthened our portfolio by expanding the Super
Series with new products that meet evolving project needs,
enhancing our value to builders, contractors, CHS customers,
and Government stakeholders.

Together, these initiatives have strengthened our market
presence and reinforced our commitment to driving sustained
growth in the Projects Business. During the year under review
we also undertook several marquee projects, including the
Jharkhand High Court, Vidhan Sabha, and Raipur

The Company continued to emphasise effective, consistent
communication with customers through targeted marketing
campaigns and media outreach. Social media platforms such
as Instagram, Facebook and LinkedIn were actively leveraged
to share product information, key initiatives and achievements,
thereby enhancing brand visibility and customer engagement

During the year, the iconic Nerolac jingle was reintroduced
througha high-impact multi-channel media campaign, refreshed
to reflect evolving consumer preferences while retaining its
nostalgic appeal. In addition, the Company launched its first
digital video commercial for NxtGen Painting Services across
multiple regional languages.

Additionally, the Company's marketing and media initiatives
received significant recognition across leading industry forums
during FY 2025-26. The ‘Dukaan it Yourself campaign, executed
during the Mahakumbh, garnered 26 prestigious awards in FY
2025-26, underscoring the creativity effectiveness and impact
of the Company's brand-building efforts.

Industrial Business
Overview

India is witnessing sustained investments in infrastructure
development, which continue to drive demand for industrial
paints. As one of the world's largest automotive markets, the
country is experiencing strong growth, supported by rising
domestic passenger vehicle consumption andincreasing
vehicle exports to international markets.

The industrial paints business caters to a diverse customer
base, including automotive OEMs, auto refinish body
shops, general industrial manufacturers, and users of high
performance coatings across sectors such as oil & gas,
chemical processing, power generation, and infrastructure.

During the year, the Powder Coatings segment recorded
decent growth, primarily led by demand from the Auto
Ancillary and Furniture segments. The Liquid Coatings
market registered strong growth, driven by the growing
adoption of high performance coatings designed for
specialised industrial applications.

Technological advancements continued to play a pivotal
role in shaping the industrial paints market, with innovations
in product formulations and application technologies.
Our state-of-the-art R&D centre has been instrumental
in strengthening our capabilities and reinforcing our
leadership position in the industry.

As we operate in this dynamic and evolving environment,
we remain firmly committed to innovation, quality and
operational excellence, ensuring we can meet the changing
requirements of the industrial coatings market

Automotive Business

Overview

Building on an already strong foundation in the Automotve
segment the Company further strengthened its market
leadership during the year by gaining market share and
reinforcing its positon as a market leader. This performance
was driven by a focused strategy centred on developing
technologically advanced products and accelerating the
adoption of sustainable technologies, closely aligned with the
rapidly evolving requirements of customers and OEMs.

During the year, our performance in the Passenger Vehicle
segment witnessed healthy growth, while the 2-Wheeler and
3-Wheeler segments also witnessed strong growth. In contrast
to the previous year, the Commercial Vehicle segment also
demonstrated a very strong double-digit growth. Furthermore,
the Auto Refinish segment also demonstrated good growth,
primarily driven by premium products, outlining customers' shift
towards premium offerings.

Overall, the Automotive segment delivered a robust performance
during the year, supported by broad-based growth across
key sub-segments. The Company's focus on innovation,
premiumisaton, and sustainable technologies, combined with its
ability to respond proactively to evolving customer requirements,
has further strengthened its leadership position. With a strong
product pipeline, deep customer relationships, and sustained
emphasis on technology-led solutions, the Company remains
well-positioned to leverage emerging opportunities and drive
long-term, profitable growth in the Automotive segment

New Segment

During the year, the Company emphasised targeted initiatives in
segments such as alloy wheels, underbody coatings, and seam
sealers in the automotive industry.

The Aloy Wheels segment recorded very strong growth during
the year, reflecting an increasing market share. We aim to
sustain this momentum by introducing advanced technologies
aligned with evolving market requirements and by contnuing to
focus on enhancing market share. Additionally, the Underbody
Coatings segment also delivered good growth, while the Seam
Sealers segment registered decent progress during the year. To
further support our growth in these segments, we are focusing
on rapidly increasing our capacity and enhancing our presence
by reaching more customers.

With continued emphasis on advanced technologies and market
expansion, these segments are well-positioned to support
sustainable growth and enhance long-term value creation.

Two-wheeler and
Three-wheeler

During the year, the Two-wheeler and Three-wheeler segments
recorded solid growth, supported by GST-led affordability, low
interest rates, improved access to financing, and a broadening
product portfolio. The rising demand in this segment has
increased the need for paints and coatings, and the Company
remains committed to meeting this demand to further strengthen
its market position. In response to evolving customer needs,
the segment witnessed the development of new products
tailored to diverse application requirements, with a focus
on enhanced functionality and superior finishes, including
high-gloss, improved hardness, and anti-corrosive properties.
The Company also introduced environmentally friendly solutions
during the year, emphasising efficient resource utilisation and
reduced energy consumption, in line with its sustainability
objectives.

Electric Vehicles
(EVs)

Amid the increasing emphasis on environmental sustainability
the Electric Vehicle (EV) segment continued to witness significant
growth across all mobility categories. As a market leader in
automotive coatings, the Company strategically strengthened
its presence in this segment, to maintain a strong market share
and reinforce its leadership position. During the reportng
year, the Company recorded strong growth in the Electric
Two-wheeler segment, supported by a similar upward trend in
Electric Three-wheelers, while the Electric Passenger Vehicle
segment also demonstrated remarkable growth. Leveraging
advanced technologies such as Super Durable Topcoats and
a suite of energy-efficient solutions, the Company remained
focused on effectively addressing the evolving requirements of
this rapidly expanding market

Auto Refinish

During FY 2025-26, the Auto Refinish segment delivered decent
growth, primarily driven by premium products, reflecting a clear
shift in customer preference towards higher-value offerings. We
continued to strengthen our presence in A class body shops,
reinforcing our positioning in the premium end of the market
The industry-wide transition from solvent-based to water-based
systems gained further momentum during the year, and we
remained well aligned to this trend through our portfolio. Our
continued partnerships in the Bus Body segment supported
steady volumes, while focused training and awareness sessions
enhanced engagement, improving product awareness and
adoption.

Product development efforts during the year were centred
on high-solids coats that deliver superior gloss, faster drying
characteristcs, and improved standability, enabling better
productvity and finish quality for customers. These initatives
collectively supported growth, premiumisation and long-term
sustainability of the Auto Refinish business

Performance Coating

Business Overview

During FY 2025-26, the Performance Coating division delivered
strong performance, with positive contributions from all segments.
This momentum was supported by an uptick in government-led
infrastructure development projects, which drove increased
demand for high-quality, premium-grade coating solutions. The
general industries segment recorded strong growth during the
year, reflecting sustained demand across applications. The
High-performance Coatng business experienced good growth,
driven by the Premium segment The Powder Coating business
also achieved decent growth, while the Coil Coating business
demonstrated a very strong double-digit growth. Overall, the
broad-based growth across sub-segments underscores the
resilience and strength of the Performance Coating portfolio.

Powder

Coating

The Powder Coating segment witnessed decent growth during
the FY 2025-26, backed by stable demand from Auto Ancillary,
Electrical Appliances and Furniture segments. The Powder
Coating segment continued to cater to various segments such as
white goods, rebars, pipe coatings and construction equipment.

During FY 2025-26, we expanded our product portfolio with
several impactful new launches focused on premium performance
and emerging application needs. Key introductions included low
bake and fast cure powder coatings to enhance productvity and
energy efficiency, super-durable and high scratch resistance
products for demanding applications, and heat resistant coatings
suitable for specialised industrial use. We also advanced liquid
to powder conversion solutions, particularly for the Two-wheeler
segment supportng sustainability and cost efficiency. In additon,
new architectural finishes, specialised coatings for alloy wheels,
pipelines, and flame resistant applications further strengthened
our position across high-growth and value-added segments.

Liquid

Coating

The Liquid Coating segment in FY 2025-26 demonstrated strong
performance, with all subsegments contributing positively.
The High-performance Coatings segment was backed by
performance in Industrial applications and Oil & Gas segment

The General Industries Coating segment was supported by very
strong performance in Construction equipment and Helmets,
while segments such as Drums and Barrels and Agricultural
equipment also contributed positively.

During FY 2025-26, the Liquid Coatings segment introduced new
products offering advanced functional performance, including
high-temperature resistance, thermal insulation and enhanced
corrosion protection, with applications spanning locomotive
spare parts and consumer durables.

Going forward, we will continue focus on expanding our presence
in high performance and infrastructure-led applications,
supported by continued innovation in sustainable, value-added
solutions to drive long-term profitable growth.

Research and Development (R&D)

Overview

Research & Development remains a critical pillar of the
Company's long-term strategy, supporting innovation,
competitiveness and sustainable growth across Decorative,
Automotive and Industrial coatings. The Company's R&D
efforts are focused on developing differentiated products and
technologies that respond to evolving customer requirements,
regulatory standards and environmental considerations.

In the Decorative Coatings segment, R&D initiatives continue to
emphasise enhanced performance, durability and application
efficiency while incorporating features that address changing
consumer preferences. The Automotive Coatings portfolio is
focused on continuous technological advancement to improve
coating performance, process efficiency, and resource
optimisation, in line with the stringent quality and environmental
norms of the automotive industry.

Within Industrial coatings, the Company is focused on
developing application-specific solutions to meet the diverse
and demanding requirements of infrastructure, engineering, and
other industrial end-use segments.

Overall, the Company's R&D organisation plays a vital role in
strengthening its technology base, driving innovation across
businesses and reinforcing its position as a solutions-oriented
coatings provider.

COLLABORATION WITH KANSAI PAINT CO., LTD
AND KANSAI PAINT GROUP COMPANIES

Over the years, the Company has sustained its technological
leadership in the Industrial Coatings segment by consistently
outpacing competitive benchmarks. A key enabler of this
strength has been the strategic partnership with Kansai Paint
Co., Ltd. (KPJ), a globally recognised leader with extensive
expertise in technology design and development. Through
close and continuous collaboration with KPJ, the Company has
developed customised paint and resin formulations tailored to
the specific requirements of the Indian market

Key innovations include the development of tin-free Cathodic
Electro Deposition (CED) coatings and stoving primers for
four-wheeler body applications, as well as several solutons that
deliver superior aesthetic appeal and functional performance.
KPJ also contributes valuable insights into emerging global
colour trends and provides robust technical support to
customers in India, drawing on its international experience and
capabilites.

In addition, the Company collaborates with Kansai Group entties
worldwide to introduce differentiated technologies across a wide
range of end-user segments. This includes industrial coatings,
coil coatings, automotve refinish and decorative paints, thereby
enhancing value delivery to customers.

Key Developments in
Decorative Paints

Aligned with the Paint strategy, which emphasises
differentiated and value-added offerings, the Company's R&D
initiatives continued to focus on innovation-driven by evolving
customer needs. During the year under review the Decorative
Paints portfolio was further strengthened with the introduction of
15 new products.

In the Interior segment product development efforts focused
on solutions offering extended warranties, smoother, more
aesthetically pleasing finishes, antibacterial properties,
enhanced washability, and improved stain resistance. In the
Exterior segment, innovations focused on algae-resistant
coatings with lower surface temperatures and superior dirt
resistance, enhancing performance and durability Some of the
key offerings introduced during the year were Excel Everlast 20,
Nerolac Excel Sheen, and Beauty Gold Washable Plus.

These initiatives further strengthen the Company's decorative
paints portfolio and reinforce its commitment to delivering
high-performance, differentiated solutions that align with
changing consumer preferences.

Key Developments in the
Automotive Segment

Passenger Vehicles
Segment

During the year under review, we advanced our passenger
vehicle coatings portfolio by introducing high-impact solutions to
enhance aesthetics, performance, and application efficiency Our
new offerings focused on enhancing finishes and functionality
while prioritising environmental sustainability

During the year, we also expanded our product portfolio by
introducing several advanced coating solutions, reinforcing our
focus on innovation and sustainability We developed an Energy-
efficient Wet-on-wet System that enables significant energy
savings and enhances process efficiency. A Primer has been
engineered to deliver high durability and superior corrosion
resistance, meeting the evolving performance requirements of
automotive applications.

These product introductions underscore our commitment to
delivering high-performance, value-driven solutions aligned with
industry needs.

Commercial Vehicles
Segment

During the year under review, we remained focused on
advancing innovation, sustainability and product performance
by developing coating solutions aligned with evolving customer
requirements, operational efficiency and environmental
considerations.

For the Commercial Vehicle segment, we launched several new
products designed to improve performance and operational
efficiency The Super Low-Bake Colour Coating offers improved
weathering performance and energy-efficient curing, supporting
both durability and sustainability objectives. The Anti-corrosive
Sealer for castings has also been developed to deliver superior
anticorrosive protection, thereby extending the service life. In
addition, the Clear Adhesion Promoter ensures strong inter-coat
adhesion without impacting the visual appearance, enhancing
overall coating integrity

These product innovations reinforce our commitment to delivering
high-quality technologically advanced solutions aligned with
customer expectations and industry standards.

Key Developments in
Auto Refinish

In the Auto Refinish segment, we are observing a notable
shift towards sustainable products, with demand rising for
water-based solutions over traditional solvent-based ones.
During the year, we advanced our Auto Refinish Coatings
portfolio by developing high-impact products.

Key developments included cost-effective, high-solid,
clear coats delivering superior gloss and clarity as well as
fast-drying PU systems offering good gloss. The portfolio
was further strengthened with solutions that offer improved
sandability and easier application, effectively catering to retail
refinish customers.

These innovations reinforce our focus on delivering efficient, high
quality solutions in the Auto Refinish segment

Key Developments in
the Performance Coating
Segment

KEY DEVELOPMENTS IN POWDER COATINGS

During the year, we continued to focus on innovation, operational
efficiency and our presence across diverse application
segments by introducing advanced coatng solutions tailored to
evolving market needs.

In line with these focus areas, we introduced several new
products to enhance performance and process efficiency The
Low-Bake One-Shot Matt Powders enable energy-efficient,
low-temperature curing while supporting faster throughput The
Fusion Bonded Epoxy Topcoat has been developed as a coating
system for pipe applicatons. Additionally coatngs designed for
furniture and consumer durables deliver high scratch resistance,
ensuring improved durability and long-lasting aesthetics.

These product innovatons underscore our commitment to
delivering high-performance, application-specific solutons
that align with evolving customer requirements and industry
standards.

KEY DEVELOPMENTS IN LIQUID COATINGS

In FY 2025-26, we contnued to drive innovation and sustainability
through our Liquid Coatings portfolio by developing advanced
coating solutions focused on regulatory compliance, enhanced
performance, and improved safety across diverse applications.

As part of these efforts, the Company introduced a range of new
products designed to address evolving market and environmental
requirements. The Highly Flexble RoHS-compliant Coil Coating
has been engineered to withstand severe forming operations
while offering strong anti-peeling properties, ensuring durability
and compliance with global standards. The High-Performance
Outdoor Coatng System delivers long-term UV resistance along
with improved gloss retention, maintaining aesthetic appeal
under harsh environmental conditions. Additionally the Thermal
Insulation Coatng is designed to reduce surface temperature
and enhance touch safety thereby improving user comfort and
operational safety.

These innovatons reaffirm the Company's commitment to
delivering high-performance, sustainable, and customer-centric
coating solutions.

Supply Chain

The global supply chain environment continues to evolve amid
persistent geopolitical uncertainties, volatility in crude oil prices,
foreign exchange fluctuations, and challenges related to imports
and logistics. These factors have underscored the importance of
agility and resilience in supply chain management. At KNPL, we
perceive such disruptions not merely as risks but as opportunities
to strengthen our operating model through proactive planning,
continuous innovation, and strategic adaptation.

Our supply chain has consistently remained a core component
of our competitive advantage, enabling us to maintain high
standards of quality operational efficiency and dependable
customer service. The Company operates through an extensive
network of nine owned manufacturing facilities, supported
by a supplier base of over 500 key suppliers that provide raw
materials, components, and services. Finished products are
distributed efficiently across the country through a robust
network comprising 112 depots and 8 Regional Distribution
Centres (RDCs), ensuring optimal market reach and service
continuity

Furthermore, we have implemented an SAP-enabled digital
platform to advance supplier identification, onboarding and
digitisation of the procurement process. We have also deployed
a logistics management system across our operating locations
to digitise and optimise logistics operations.

To strengthen collaboration and engagement with its supply
chain partners, the Company conducts an Annual Supplier
Conference as a key engagement platform. The conference
enables meaningful interaction wth suppliers, facilitates
networking, and provides an opportunity to communicate the
Company’s strategic priorities and future roadmap.

During the financial year, we strengthened supplier engagement
by conducting structured training and awareness programmes to
align supply chain partners with our sustainability expectations.
This training was focused on the Supplier Code of Conduct and
BRSR principles, covering social responsibility, environmental
stewardship and ethical conduct. During the year, 100
suppliers were assessed using the ESG Self-Assessment to
evaluate practices in environmental management, energy and
emissions, water and waste management occupational health
and safety, human rights, and governance standards. These
initiatives undertaken during the year reinforce responsible
sourcing and support the integration of sustainable practices
across the supply chain.

We also recognise the importance of inclusive growth among all
our stakeholders. During F Y 2025-26, approximately 22% of our
input materials were sourced from MSMEs, supporting inclusive

growth initiatives. Additionally to promote local sourcing, 77% of
our input materials were sourced in India.

Overall, our supply chain strategy remains firmly focused on
building resilience, enhancing digital capabilities, fostering
responsible sourcing, and strengthening long-term partnerships
across the value chain. By combining operational excellence,
sustainability integration, inclusive growth, and continuous
engagement with our suppliers, we are well positioned to
navigate external uncertainties, enhance stakeholder value, and
support the Company's long-term growth and competitiveness.

Information Technology

KNPL continues to enhance its digital capabilities as a key
enabler of operational efficiency scalability and stakeholder
engagement. During the year, we successfully completed
our transition to SAP S/4HANA establishing a robust and
future ready digital foundation. Our digitally enabled platforms
facilitate seamless engagement with key stakeholders, including
painters, dealers, architects, interior designers, and sales
teams, enhancing service delivery and generating actionable
insights. In addition, we have an employee portal that supports
organisation-wide learning, communication, engagement, and
recognition.

Alongside digital transformation, the Company emphasises
cybersecurity and information security governance.
Comprehensive security measures, controls, and monitoring
mechanisms have been implemented to protect digital assets,
safeguard stakeholder data, ensure system integrity, and
support business continuity amid increasing cyber risks.
Additionally, we have made cybersecurity training mandatory

for all employees within the organisation. We also regularly
communicate cybersecurity awareness tips to all our employees.

In parallel, the Company has initiated efforts to build basic A
capabilities to improve employee productivity and promote
smarter ways of working. Structured training programmes
are being conducted to build foundational A awareness and
skills. Going forward, KNPL will continue to evaluate selective
A-led opportunities with a focus on operational efficiency and
measurable benefits.

Through sustained investments in digital platforms, cybersecurity
and emerging technologies, the Company remains committed to
building a resilient, trusted, and future-ready organisation.

People

At KNPL, our people remain at the heart of our growth and
transformation. Life at KNPL is defined by pride, belonging, and
purpose: qualities that inspire every NEROLITE to bring their
best selves to work. This year, we rolled out our Employee Value
Proposition, ‘Where your passion takes colour', reflecting
our belief that our people's passion is at the heart of everything
we do.

As of FY 2025-26, KNPL is powered by 3,804 dedicated
NEROLITEs, who proudly embody this ethos in all they do. We
remain committed to their holistic development consistently
translating this promise into meaningful actions. By prioritising
health, safety and overall well-being, and fostering a diverse,
equitable, and inclusive environment, we ensure that individuals
from all backgrounds feel respected, valued, and empowered
to thrive.

Employee

Well-being

Employee well-being continues to be a cornerstone of our people
strategy Recognising that our employees are fundamental
to organisational success, we have strengthened wellness
initiatives to support both physical and mental health.

The Advantage Club App serves as a comprehensive
platform offering resources, activities, and support for holistic
well-being. Wellness Wednesday Sessions build awareness on
critical themes such as mental health, emotional intelligence,
productivity, and work-life balance. Our monthly newsletter
showcases stories from NEROLITEs about their personal
journeys towards healthier lifestyles in our ‘Wellness Club'
column.

These efforts underscore our commitment to creating a
supportive workplace where employees feel encouraged,
empowered, and inspired to perform at their best.

Capability

Building

Capability building continued to be a key focus area, with
emphasis on strengthening skills, leadership capability and
learning agility across the organisation. During the year, the
Company implemented a range of targeted learning initiatives
covering professional readiness, sales excellence, product
and application knowledge, digital enablement, ESG and
risk awareness, business communication and leadership
development. These structured programmes supported
continuous learning, enhanced workforce effectiveness and
enabled the organisation to respond effectively to evolving
business and market needs. We also launched Shiksha Product
training for employees covering product features, advantages
and benchmarking. Additionally, the newly launched ‘20-20
with Nerolac’ learning series is designed to create awareness
of initiatives in the decorative function and product categories,
helping employees to connect and close knowledge gaps.

Nurturing

Talent

Building strong and meaningful connections with employees
remains a priority, fostered through a wide range of engagement
and communication initiatives that nurture a participative and
collaborative culture.

The Titan Recognition Programme allows employees to
celebrate each other's achievements and contributions,
reinforcing a culture of appreciation. During the year, we
also introduced the Annual Excellence Awards to recognise
outstanding individual and team contributions, celebrating
sustained performance, innovation, collaboration, and alignment
wth organisational values, thereby reinforcing a merit-based,
high-performance culture.

The Life@Nerolac platform further strengthens community
spirit by enabling employees to share ideas, updates, and
accomplishments. Transparent, two-way communication is
encouraged through forums such as the HR Connects, Reach
Programme, Works Manager Address sessions, and the
Annual Learning Conference. In addition, cultural and festive
celebrations across Plants, the Head Office, R&D centres, and
depots bring the KNPL family together, creating a vibrant and
inclusive workplace atmosphere.

We also have the Women's Impact Network (WIN), an employee
resource group that fosters an inclusive environment for women
to thrive professionally and personally In addition, the WTW
Engagement Survey provides valuable insights into employee
sentiment, enabling KNPL to continuously enhance workplace
practices and strengthen trust.

Through these thoughtfully curated programmes, we reinforce
our dedication to building an engaging, inclusive, and
people-centric workplace where every employee feels valued
and connected.

KNPL emphasises building and nurturing young professionals
as key enablers of long-term growth. Its talent acquisition
approach is aligned with organisational objectives and
supported by digitised, transparent hiring processes that
enhance efficiency and candidate experience. Fresh talent
is sourced through structured campus collaborations and
internship programmes, while Graduate Engineer Trainee
and Management Trainee initiatives provide early-career
professionals with cross-functional exposure and development
opportunities. The Gurukul Programme offers summer training
opportunities, while the Aarambh Campus Programme facilitates
the seamless transition of trainees into full-fledged Nerolites.
These efforts reinforce a strong talent pipeline, promote internal
capability building and foster a diverse, inclusive and future
ready workforce.

Innovation

(AVINYA)

The Company continues to actively harness ideas generated
through its innovation initiatives, with a strong focus during
the year on disciplined implementation and benefit tracking.
Identified ideas were systematically monitored for progress
and outcomes, ensuring that innovation efforts translated
into measurable business impact while fostering a culture
of accountability, continuous improvement and value-driven
innovation.

In addition, inventory control emerged as a key theme during the
year. Employee-led ideas under this focus area were carefully
evaluated, and selected ideas were implemented. Thus,
contributing to improved efficiency and a strengthened cash
conversion cycle.

Community Development

At KNPL, Corporate Social Responsibility (CSR) is not merely
a statutory obligation, but an integral part of our business
philosophy We firmly believe that responsible conduct and
meaningful social contribution are central to sustainable value
creation, enabling us to act as a catalyst for positive change in
the communities we serve. Our focused and sustained social
interventions reflect our commitment to inclusive growth and
responsible citizenship and align closely with the United Nations
Sustainable Development Goals (UN SDGs). During FY 2025-26,
KNPL continued to advance its CSR journey through impactful
programmes spanning livelihood and skill development,
preventive healthcare and sanitation, education promotion,
environmental sustainability, and rural and community
development. Through these initiatives, the Company positively
touched the lives of over 1,00,000 beneficiaries, reinforcing
its commitment to long-term social development and shared
prosperity

Under its CSR initiatives, one of the innovative projects undertaken
by KNPL is Project Swayam, a seven-month capacity-building
programme aimed at empowering rural women entrepreneurs in
Chiplun. The initiative supported 25 women through a structured
15-session curriculum focused on business skills, digital literacy
financial awareness, and branding, enabling them to transition
into entrepreneurship. The programme delivered tangible
outcomes, including rapid adoption of digital payment platforms
such as UPI and WhatsApp Business, and facilitated access
to institutional finance, wth one participant securing a CMEGP
loan of ' 8 Lakhs. To ensure long-term impact, the project has
institutionalised a women-led consortium and peer-mentorship
framework, fostering a self-sustaining ecosystem for rural
livelihoods and economic empowerment

Overall, KNPL's CSR initiatives reflect a long-term commitment
to inclusive development and community empowerment.
By creating scalable and sustainable models, the Company
continues to contribute meaningfully to social progress while
strengthening the foundations for resilient and self-reliant
communites.

Environment, Social and
Governance

At KNPL, the identification and prioritisation of material issues
form a critical part of our sustainability and value creation
framework. Material issues are matters that significantly
influence the Company's ability to create long-term value for its
stakeholders and are considered critical due to their potential
impact on business sustainability, social responsibility, and
stakeholder relationships.

By systematically recognising and addressing these material
issues, the Company seeks to proactively manage risks and
opportunities, enhance organisational resilience, and reinforce
its commitment to sustainable and responsible value creation.
Based on this assessment KNPL has identified five key material
issues, namely:: Decarbonisation, Resource Use, Quality of Life,
Diversity and Governance.

Outlook

For FY 2026-27, the outlook for the Indian paints and coatings
industry remains positive, supported by structural growth
drivers. Continuedinvestmentsininfrastructure across railways,
roads, airports, power, and urban development are expected to
sustain demand for industrial and performance coatings. Also,
the automotive sector is likely to maintain healthy momentum.

In the Decorative Paints segment, demand is expected to
improve wth a more normalised monsoon cycle, steady rural
consumption, and a gradual recovery in urban demand. Rising
disposable incomes, ongoing premiumisaton, and increasing
consumer preference for eco-friendly and value-added products
are anticipated to further support growth. Government initiatives,
such as housing and urban development programmes, are also
expected to provide an impetus to demand.

While the industry may continue to face near-term challenges
from raw material price volatility, currency movements, and
an increasingly competitive landscape, we aim to mitigate
these risks through product innovation, premium offerings,
digitalisation, and a sustained focus on sustainability Overall,
the paint industry is well positioned to deliver steady sustainable
growth in the coming year, supported by resilient demand drivers,
infrastructure expansion, and evolving customer preferences.

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 wth 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, to
address KNPL’s operational and financial risks. Moreover,
our systems undergo testing by statutory auditors using
automated technigues.

Control Efficiency Index
and Robust Control Index

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 focuses on identifying
gaps in control and policy design, control and process deviations,
IT systems, and regulatory compliance. Additionally our internal
audit programme evaluates opportunities to automate control
processes, and we leverage audit findings to enhance the
Company's internal controls.

Compliances

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 to reflect all compliance changes 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.

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.

Awards and
Recognition

Sustainability -

Carbon Disclosure Project (CDP)

Rated ‘B' in both Climate Change and Water Security in the CDP 2025 Cycle

Dow Jones Sustainability Index (DJSI)

Ranked within the top 12 percentile in the Chemical Industry Group in the
S&P Global Large-Midcap ESG Index 2025

EcoVadis

Awarded the Bronze Medal in the EcoVadis Assessment 2026, ranking among the top
18% of companies assessed

Confederation of Indian Industry (CII)

The Sayakha Plant team received the Gold Award at the CII National Excellence
Practice Competition for presenting the Fresh Water Reduction Green Initiative

Tamil Nadu Climate Change Mission

The Hosur Plant received the Corporate Biodiversity Award for contribution towards
biodiversity conservation under the ‘Biodiversity Inside the Campus' category

Customers -

Toyota Kirloskar Motors Private Limited

Awarded the Best Raw Material Supplier Award by Toyota Kirloskar Motors Private Limited for
FY 2025-26

Honda Motorcycle and Scooter India

Received the Excellence Award in the Paint Category from Honda Motorcycle and Scooter India

TAFE

Awarded the Best Supplier Award by TAFE in recognition of outstanding delivery performance

Wheels India Limited

The Hosur Plant team received the Gold Award at the 11^th Supplier Kaizen Competition
hosted by Wheels India Limited

CIE

Recognised by CIE Automotive India Ltd. at the 4^th CIE India Suppliers Conference for excellence in ESG initiatives

Manufacturing -

India Manufacturing Excellence Award (IMEA)

The Jainpur Plant received the Platinum Award for Future Ready Factory of the
Year at the Frost & Sullivan India Manufacturing Excellence Awards (IMEA) 2025

Confederation of Indian Industry (CII)

The Hosur Plant received the Gold Award for ‘Best Organisation in Overall EHS Practices' at the 7^th CII National
EHS Competition 2026

The Bawal Plant received the Gold Award at the 21^st CII National 3M Competition for its case study on Muda
Elimination

The Sayakha Plant received the Platinum Award at the 3^rd National 5S Competition organised by CII

The Sayakha Plant received the Gold Award in the Renewable Energy and Energy Saving category at the CII
National Excellence Competition

The Sayakha Plant received the Gold Award at the 8^th CII IQ National Safety Practice Competition
The Lote Plant received the Gold Award at the National Maintenance Circle Competition organised by CII

Quality Circle Forum of India (QCFI)

The Bawal Plant received two Gold Awards in the Kaizen category for Quality Improvement and Productivity
Improvement projects from the Quality Circle Forum of India, Delhi Chapter

The Hosur Plant received the Gold Award in the Alied Concepts category at the 10^th Chapter Convention on
Quality Concepts (CCQC)

The Sayakha Plant received the Gold Award at the 13^th Annual Convention for Quality Concepts for its case study
on Productivity and Skill Enhancement

Earned 26 Awards across multiple prestigious platforms for the ‘Dukaan it Yourself
campaign executed during the Mahakumbh

Goafest

Received 12 awards at Goafest, comprising 1 Grand Prix, 3 Gold, 2 Silver and 6 Bronze awards

Kyoorius Creative Awards 2025

Received 7 Baby Blue Elephant awards

Dragons of Asia

Received 6 awards at the Dragons of Asia Marketing Awards, including the Gold Dragon for Business-to-business
Marketing, the Silver Dragon for Market Discipline and 4 Black Dragon awards

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. t he 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. t he 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 ended 31st March, 2026:

1. the Company has completed the Brownfield
manufacturing project at Jainpur Plant and the
production of Water Based Paint has commenced;

2. the captive offsite Solar power plant project for Lote
Plant has been completed;

3. a second Captive Wind Turbine in Gujarat, for
Sayakha Plant has been completed;

4. the 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, are progressing well;

5. the automotive paint capacity addition project at Sayakha
Plant, to meet the future demand of Original Equipment
Manufacturers (OEMs), is progressing well; and

6. the offsite Solar power plant project for Bawal Plant, to
optimise the power cost, is progressing well.

4. Directors

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. 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 up to and ending on
31st March, 2028 (both days inclusive). The approval of the
Shareholders of the Company and the Central Government
for the appointment of Mr. Chaudhari as the Managing
Director of the Company have been received.

Mr. Gen Yokota (holding Director Identification Number
11084786) had been appointed as a Non-Executive
Director of the Company with effect from 6th May, 2025. The
Shareholders approved his appointment at the 105th AGM
of the Company held on 30th June, 2025.

Mr. Hitoshi Nishibayashi (holding Director Identification
Number 03169150), Non-Executive Director, liable to retire
by rotation at the 105th Annual General Meeting (“AGM”)
of the Company did not seek re-appointment due to health
reasons. He retired as a Non-Executive Director of the
Company 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.
Mr. Hirokazu Kotera (holding Director Identification Number
10707431) has resigned as the Executive Director of the
Company, on the directions of the Promoter Company,
Kansai Paint Co., Ltd., Japan (“KPJ”), which had nominated
Mr. Kotera as a Director on the Board of the Company.
The Board placed on record its sincere appreciation and
gratitude for the services rendered by Mr. Kotera during his
association with the Company.

For the period from 1st April, 2025 to 31st March, 2026,
Mr. Chaudhari and Mr. Kotera received a remuneration of
? 96.50 Lakhs and ? 92.18 Lakhs respectively, from KPJ for
their association with KPJ.

None of the Directors of the Company are disqualified as on
31st March, 2026 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.

5. Key Managerial Personnel

Mr. P. D. Pai, Chief Financial Officer, retired from the
services of the Company with effect from the close of
business on 31st July, 2025. The Board placed on record
its sincere appreciation and gratitude for the valuable
contribution made by Mr. Pai, during his association with
the Company.

The Board of Directors of the Company, on recommendation
of the Audit Committee and Nomination and Remuneration
Committee, has appointed Mr. Yash Ahuja as the
Chief Financial Officer of the Company with effect from
1st August, 2025.

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

6. Meetings of the Board

The Board met 10 (ten) times during the financial year
ended 31st March, 2026. 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.

7. 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.

8. 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 the Committees, as required under the
SEBI Listing Regulations, is separately provided in the Annual
Report, as part of the Report on Corporate Governance.

9. 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, 2026
is as follows:

The recommendations made by the Audit Committee to the
Board, from time to time during the year under review, have
been accepted by the Board. Other details with respect to
the Audit Committee such as its terms of reference, meetings
and attendance thereat are separately provided in the Annual
Report, as a part of the Report on Corporate Governance.

10. Corporate Social Responsibility

In terms of Section 135 of the Act, the constitution of the
Corporate Social Responsibility (“CSR”) Committee as on
31st March, 2026 is as follows:

* Mr. Pravin D. Chaudhari has been appointed as a member of the
CSR Committee with effect from 1st April, 2025.

The functions of the CSR Committee are to:

(a) formulate and recommend to the Board, a CSR Policy
which shall indicate the activities to be undertaken
by the Company in areas or subject, specified in
Schedule VII of the Act;

(b) recommend the amount of expenditure to be incurred
on the activities referred to in clause (a); and

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

During the financial year ended 31st March 2026, 2 (two)
meetings of CSR Committee were held on
25th November, 2025 and 26th March, 2026 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 athttps://www.nerolac.com/
investors/policies.html.

The Company had appointed Soulace Consulting Pvt.
Ltd. to undertake impact assessment for its CSR program
- Advanced Open Training for Painters. The CSR Impact
Assessment Report is available on the Company's website
at https://www.nerolac.com/investors/financial-results.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 and executive summary of CSR Impact
Assessment Report, is annexed to this Report as Annexure 1.

11. 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 analyse, control and mitigate
risk. Risk profiling is also put in place for all the areas of
operations in the Company and are 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, 2026 is as follows:

* Mr. Hirokazu Kotera ceased to be a member of the Risk
Management Committee consequent to his resignation from the
services of the Company with effect from the close of business on
31st March, 2026.

@ Mr. Pravin D. Chaudhari has been appointed as a Member of
the Risk Management Committee with effect from 1st April, 2025.

# Mr. Yash Ahuja has been appointed as a member and Chief
Risk Officer of the Risk Management Committee with effect from
1st August, 2025.

Mr. P D. Pai ceased to be a member and Chief Risk Officer
of the Risk Management Committee consequent to his
retirement at the close of business on 31st July, 2025.

12. Remuneration Policy

The Board of Directors has adopted a policy which deals with

(i) criteria for determining qualifications, positive attributes

and independence of Director and (ii) remuneration for

Directors, Key Managerial Personnel and other employees

(“Remuneration Policy”).

The features of the Remuneration Policy are as follows:

• The Company, while constituting the Board shall
draw members with appropriate skills, experience
and knowledge from diverse fields such as finance,
law, management, sales, marketing, architecture,
administration, research, corporate governance,
operations or other disciplines related to the Company's
business. There shall be no discrimination on the
basis of gender, race, ethnicity and nationality while
determining the board composition.

• A Director shall be a person of integrity, who possesses
relevant expertise and experience. He shall uphold ethical
standards of integrity and probity and act objectively
and constructively. He shall exercise his responsibilities
in a bona-fide manner in the interest of the Company;
devote sufficient time and attention to his professional
obligations for informed and balanced decision making;
and assist the Company in implementing the best
corporate governance practices.

• An Independent Director should meet the requirements
of the Act and SEBI Listing Regulations, concerning
independence of directors. The Company shall
also obtain certification of independence from the
Independent Director in accordance with the Act and
SEBI Listing Regulations.

• The remuneration paid to Whole-time Directors is
subject to the limits laid down under Section 197 and
Schedule V to the Act and in accordance with the
terms of appointment approved by the Shareholders
of the Company. The remuneration of the Whole-time
Directors is determined by the Nomination and
Remuneration Committee based on factors such as the
Company's performance and performance/track record
of the Whole-time Directors. The remuneration consists
of Salary, Commission, Company's contribution to
Provident Fund and Superannuation Fund, House Rent
Allowance (HRA), Leave Travel Allowance (LTA) and
other perquisites and allowances in accordance with
the rules of the Company, applicable from time to time.

• 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 athttps://www.nerolac.com/investors/policies.html.

13. 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 vigil mechanism
are separately disclosed in the Annual Report, as a part of
the Report on Corporate Governance. The Whistle Blower
Policy is also available on the website of the Company at
https://www.nerolac.com/investors/policies.html.

14. 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 athttps://www.nerolac.com/investors/policies.html.
The declaration of dividend by the Company is in compliance
with its Dividend Distribution Policy.

15. 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, two complaints of sexual
harassment were received and resolved as per the provisions
of the POSH Act. There was no case which was pending for
more than 90 (ninety) days.

16. 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 athttps://www.nerolac.com/investors/
policies.html. The Audit Committee reviews this Policy
periodically as required under Regulation 23 of the SEBI
Listing Regulations. In terms of the Policy, a statement in
summary form of transactions with related parties in the
ordinary course of business and on arm's length basis is
also periodically placed before the Audit Committee for its
review. Omnibus approval was obtained for the proposed
related party 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 entered during financial year
2025-26 have been disclosed in Note no. 39 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 financial year 2025-26. 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. 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.

22. Share Capital

The paid-up Equity Share Capital as at 31st March, 2026
stood at ? 80.87 Crores.

During the year under review, the Company allotted
2,13,393 Equity Shares of ? 1 each pursuant to exercise
of Restricted Stock Units granted under the Kansai Nerolac
Paints Limited - Restricted Stock Unit 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.

23. 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 2025-26, there has been no
change in the RSU Plan 2022. The RSU Plan 2022 is
available on the Company's website athttps://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 atagm@nerolac.com in that regard,
by mentioning “Request for Inspection” in the subject of
the e-mail.

24. 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.

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

Transfer of Unclaimed Dividend to IEPF

During the year under review, dividend amounting to
? 31.93 Lakhs that had not been claimed by the Shareholders
for the year ended 31st March, 2018, was transferred to the
credit of IEPF as required under Sections 124 and 125 of the Act.

Unclaimed dividend as on 31st March, 2026

The IEPF Authority had requested companies to carry
out a special outreach campaign “Saksham Niveshak”
from 28th July, 2025 to 6th November, 2025 and from
1st April, 2026 to 9th July, 2026, to reach out to shareholders
whose dividend remain unpaid/unclaimed. The Company
encourages its Shareholders to claim their unclaimed
dividends by updating their KYC details (viz., PAN, Bank
account details, contact details, choice of nomination,
specimen signature).

As on 31st March, 2026, dividend amounting to f 2.41 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, 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, 2025, on the website of the
Company athttps://www.nerolac.com/financial/shareholders.html.

Transfer of Equity Shares

As required under Section 124 of the Act, 65,365 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 2025-26.

Details of such Equity Shares due for transfer to IEPF Authority, in
financial year 2026-27 have been uploaded on the website
of the Company athttps://www.nerolac.com/financial/
shareholders.html.

Nodal Officer

Mr. G. T Govindarajan, Company Secretary, is 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.

26. 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
2025-26 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.

27. Secretarial Auditors

In terms of Regulation 24A of the SEBI Listing Regulations,
the Shareholders at the 105th AGM of the Company, had
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,
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 Secretarial Auditors have confirmed that they have
subjected themselves to the peer review process of Institute
of Company Secretaries of India (ICSI) and hold valid
certificate issued by the Peer Review Board of the ICSI.
Further, JHR & Associates have confirmed that they are not
disqualified from being Secretarial Auditor of the Company.

28. 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 2024-25, pertaining to products of the
Company as required by the law. The Cost Audit Report
submitted by the Cost Auditor for the financial year 2024-25
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 2025-26 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 2026-27,
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 f 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. 4 of the Notice of 106th 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.

29. General Disclosure

During the year under review:

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

2. t here was no application made or proceeding pending
under the Insolvency and Bankruptcy Code, 2016;

3. there were no instances of onetime settlement with any
Banks or Financial Institutions; and

4. the Company has complied with the provisions relating to
the Maternity Benefits Act, 1961.

30. General Shareholder Information

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

31. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the
Act, the Annual Return as on 31st March, 2026 is available
on the website of the Company athttps://www.nerolac.com/
investors/annual-return.html.

32. 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.

For and on behalf of the Board
Bhaskar Bhat

Mumbai, 6th May, 2026 Chairman