Akzo Nobel India : AGM 2021 Transcript

"AkzoNobel India Limited Annual General Meeting"

August 13, 2021

MANAGEMENT: MR. OSCAR WEZENBEEK - CHAIRMAN & NON-

EXECUTIVE DIRECTOR, AZKONOBEL INDIA LIMITED

MR. AMIT JAIN - NON-EXECUTIVEDIRECTOR,

AZKONOBEL INDIA LIMITED

MR. HEMANT SAHAI - INDEPENDENT DIRECTOR &

CHAIRPERSON OF STAKEHOLDERS RELATIONSHIP

COMMITTEE, AKZONOBEL INDIA LIMITED

MS. SMRITI REKHA VIJAY - INDEPENDENT DIRECTOR

• CHAIRPERSON OF AUDIT COMMITTEE AND

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE,

AKZONOBEL INDIA LIMITED

MR. RAJIV RAJGOPAL - MANAGING DIRECTOR,

AZKONOBEL INDIA LIMITED

MR. LAKSHAY KATARIA - WHOLE-TIMEDIRECTOR &

CFO, AKZONOBEL INDIA LIMITED

MS. HARSHI RASTOGI - COMPANY SECRETARY AND

COMPLIANCE OFFICER, AKZONOBEL INDIA LIMITED

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	AkzoNobel India Limited
	August 13, 2021
Moderator:	Dear shareholders, good afternoon and a warm welcome to you all to the 67th Annual General
	Meeting of AkzoNobel India Limited through video conferencing or other audio visual means.
	As a reminder for the smooth conduct of the meeting, the members will be in the mute mode and
	audio and video will be opened for speaker shareholders to speak at the AGM as per the
	preregistration. Please note that as per the requirements, the proceedings of the annual general
	meeting will be recorded and available on the website of the Company. I now request Mr. Oscar
	Wezenbeek - Chairman, AkzoNobel India Limited joining us from Singapore to kindly initiate
	the proceedings of the 2021 AGM.
Oscar Wezenbeek:	Distinguished shareholders, it is now 2:30 p.m. I find that a quorum is present, so I call this
	meeting to order. On behalf of the board, I welcome all of you to the 67th Annual General
	Meeting of your Company.
	Let me now introduce my fellow board members who are participating in this AGM through
	video conferencing and other audio-visual means. Joining us from the corporate office at
	Gurugram is your Company's Managing Director - Mr. Rajiv Rajgopal; Mr. Lakshay Kataria,
	your Company's - Whole-time Director and CFO is also attending the AGM from our Corporate
	Office at Gurugram. Let me also welcome Mr. Amit Jain - Non-Executive Director, Chairman
	of Nomination and Remuneration Committee and Risk Management Committee who joins us
	from Gurugram and I also take this opportunity to thank him for navigating the Company since
	the past 4 years as the Chairman. With his exemplary leadership, Amit has led your Company's
	transformation to the more efficient, effective and future ready Azko Nobel India of today. It is
	truly my honor to build further on the strong foundation set by you, Amit. Over to you.
Amit Jain:	Thank you, Oscar for that very generous introduction and first and foremost I want to take this
	opportunity of expressing my deepest gratitude to our shareholders for their unstinted support to
	me and the board during my years as a Chairman of AkzoNobel India. It has been truly wonderful
	to have had the opportunity of serving our shareholders and I also want to hand over the baton
	to a more worthy successor and Oscar I have known you now for the last 12 years as the
	colleague and later on as a colleague on the board. So, I have got huge confidence over the last
	few years where we have served both together that there can't be safer pair of hands to lead
	AkzoNobel into the future. For all our shareholders, Mr. Oscar recently has got more than 13
	years of experience in the AkzoNobel across pretty much all our major businesses and most
	recently as he has been serving before, as he is seeing Oscar as he has steered the Southeast Asia
	and the South Asia business to greater heights and we are truly blessed to have a person like him
	to share the board of your Company. So, while I am stepping down as Chairman, thanks to my
	affiliation, my emotional bond with AkzoNobel and the board of directors, I have agreed to
	continue as a Non-Executive Director and I just want to take this opportunity of reaching out to
	all our shareholders and requesting them to give the same support to Oscar Wezenbeek and our
	entire board as you have done for my tenure. So, thank you very much once again.
Oscar Wezenbeek:	Thank you Amit and truly very big shoes, I will try to fill to the best of my abilities but thank
	you very much. To continue may I now introduce Mr. Hemant Sahai - Independent Director and

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AkzoNobel India Limited

August 13, 2021

Chairperson of Stakeholders Relationship Committee and Hemant is attending our AGM from his residence in Gurugram. Ms. Smriti Rekha Vijay - Independent Director and Chairperson of Audit Committee and Corporate Social Responsibility Committee is attending the meeting from here residence in Mumbai. Also joining us is Ms. Harshi Rastogi - Company Secretary and Compliance Officer of your Company and she is attending the meeting from the Corporate Office of the Company at Gurugram.

May I take this opportunity to express gratitude to our former directors, Mr. Arvind Uppal and Mr. Rahul Bhatnagar for their invaluable insights and contributions over the years in building and growing AkzoNobel India to what it is today. As our board member for decade, Mr. Uppal has been an astute strategist and let me also thank Mr. Bhatnagar for his dedication to hold best practices in corporate governance during his tenure as an independent director with us. The (Inaudible)05:41 announcement earlier this month, Mr. Lakshay Kataria - Chief Financial Officer and Whole-time Director of the Company has expressed his desire to leave the services of the Company by the end of September 2021 to pursue an external opportunity. An update regarding appointment of his successor will be intimated in due course. Lakshay, my personal thanks to you. He has been pivotal in leading our transformation journey and co-steering the business to achieve the profitability ambition with professionalism and diligence and we truly wish him all the best for successful future and he has promised by the way that he always will paint his house with Dulux. I also oblige the participation of our partners and authorized representatives of the Statutory Auditors, Price Waterhouse Chartered Accountant LLP, the Secretarial Auditors M/s A K Labh & Company and Cost Auditors M/s Chandra Wadhwa & Company in this meeting. Please note all statutory registrars are available during the AGM for inspection at the NSDL website.

Before starting the form of business, however, I would like to share a few opening remarks. Dear shareholders, I have truly great pleasure in welcoming you to the 67th annual general meeting of your Company and it truly pains me I cannot be with you in person. The world as we know it is still battling with COVID-19 pandemic and a lot has changed into what we tend to call a new normal from the lockdowns and unlocks to the world's most ambitious vaccination drive and the way right now. This humanitarian crisis is tested in unprecedented ways. Several of us and many of you on this call as well and the shareholders we have seen family members suffer physically, emotionally always during this pandemic crisis. We also have the pain of losing family members including and our sincere heartfelt apologies and well wishes are with you all and condolences of course as with you with this horrible pandemic and especially for those of you who have seen loved ones passed away during this horrible pandemic. At the same time, we pray for all of us for the safety and health as we move forward in this journey. It is now actually the second year in a row that we miss the warmth of the face-to-face Company and interaction with you. Fortunately, the technology has been a great enabler and we are truly delighted that at least through these means we are now able to welcome our valued shareholder to the AGM from the safety of their homes and I truly look forward to hearing a few during this AGM.

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AkzoNobel India Limited

August 13, 2021

Esteemed shareholders, the Company's accounts for the year ended March 31st, 2021, has already been circulated to you and our business performance continued to be very resilient in times of this pandemic, but gives me greater happiness, still AzkoNobel's continuous efforts in the area of sustainability and supporting our communities during these very difficult times. Looking back of course 2021 was truly unprecedented year of all forms. The pandemic saw economic activity contract across the board, intermittent lockdowns, sharp fluctuations in raw materials, availability, prices and movements brought further challenges to businesses and impeded the pace of revival. The first half of the year saw customer spending on discretionary sectors nosedive as retail demand shifted to essential buying during wave one of the pandemic. Strong monetary measures and policy actions including as Atmanirbhar Bharat Abhiyan announced in the first half year did support economy bounce back in the second half of the year, however, the sharp declines could not be reversed by the recovery and India recorded its first technical economic recession since 1998 with GDP contracting sharply by 7.3% last year. The estimated 50,000 crores of worth paint and coating industry with interface to both discretionary expense and infrastructure growth faced the challenging business environment, particularly in the first half of the fiscal year.

As the nation came out of COVID 2.0 renewed restrictions have slowed economic recovery that was scaling momentum by last fiscal end. However, the RBI expects the economic activities to improve into the second half and has projected 9.5% GDP growth for the current fiscal year while keeping in consideration the current inflection in inflation and rise in its national commodities and crude prices. Rapid vaccination is likely to further support sustainable revival in business and consumer confidence. Overall growth in 2021-2022 will be likely a story of two halves with economic activity picking up rapidly in the second half.

Dear friends, looking in hindsight I can confidently say that unprecedented times call for equally unprecedented measures. 2020-2021 was also the first year of the new mid-term grow and deliver strategy. Your Company navigated through the multitude of challenges in the new normal to balance growth with improved profitability. We honored new growth opportunities to grow and deliver by focusing on the four sectors that is people, customers and operations, cash and cost while continuing to prioritize the health and safety of our stakeholders. Witnessing good (Inaudible)12:17 were exciting innovations that strengthen the core propositions in categories across paint and coating businesses. As pioneers in the paint industry, we introduced the looks assurance in industry first of its kind promise to our Dulux customers and has reinforced customer's trust in our quality. Under the grow aspect of our strategy, our new economy offerings promised smart choice in interior exterior emulsion in Aquatech in water proofing has positioned us well in the top growth segments of the market. Parallelly our plethora of coating gives surfaces a personality like the ability to believe corrosion protection from aggressive environments, harness solar energy and transforms spaces with color. The things our products can do will surprise you whether they are applied to boards, buildings, cars, planes, firms, walls or wood, your Company has always been on the forefront in terms of leveraging technology for business and lockdowns accelerated our digital journey. This year, we continue to invest in artificial

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AkzoNobel India Limited

August 13, 2021

intelligence, advanced analytics, robotic process automation technologies to create immense customer experiences and aid in organization of productivity during the pandemic.

Esteemed shareholders, the Company's accounts for the year ended March 31st, 2021, have already been circulated to you. This year, we continue to build on our solid foundation of operational excellence to create long-term value for our people and our customers. Despite the pandemic, our two rounds of dividends were a humble token of appreciation for shareholders space and support of you all through this pandemic. In 2020-2021, our revenue from operations stood at Rs. 24,240 million, a decline of 9%. H1 of the full year, the Company's revenue declined by 36%, but in the second half, it actually grew at 90%, truly unprecedented times. Our EBITDA at Rs. 2652 million declined by 12% due to lower volumes, however, more significant was the ability and the fact that your Company delivered double digit return on sales of 11% for the second consecutive fiscal year.

Equally encouraging was that despite the uncertainties are bound, are operating working capital as percentage to revenue also improved further and reflect in our operating cash flows, noteworthy that your Company remains comfortably on liquidity front with cash of Rs. 7339 as on the 31st of March 2021. And what it gives me great happiness is that during all this, our business performance in AkzoNobel sustainability efforts continue to improve. In keeping with the commitment to support local communities during COVID-19, our people planet paint approach is integrated in everything we do. Raising to the challenge AkzoNobel India launched several initiative to help its people and communities to deal with the outbreak of the health pandemic. Your Company's COVID-19 India taskforce provided medical, financial and psychological support to our stakeholders. The visit at facilitated employees with tele medicines and online doctor consultations and as the nation unlocked, Dulux protect initiatives supported painters and contractors with safe return to their workplace. COVID-19 helpline and telemedicine project gave over 1.5 million painter families access to specialize doctor's vaccination counseling and treatment. As daily cases cross the 4 lakh your Company partnered with government bodies and organization and donated 55 oxygen concentrators to help augment emergency health support to role community across 5 states and its employees.

Children are truly the future of India, but the reality is that COVID-19 has changed the learning landscape, under our protect project Parivartan, 100 safety digital tablets have empowered more underprivileged school children impacted by school closures with equal access to e-education. Striving to reduce the impact on the planet are significant value chain reforms are reducing carbon emissions, VOCs and waste while increasing recycling and renewable energy contribution. Our 2030 ambitions are to achieve 50% reduction in carbon emissions and to increase our renewable electricity usage to 100%. As we look at as pioneers in bringing surface to life, this is a good chance, you are only ever a few meters away for one of our products. In fact, our world class portfolio brand is trusted by customers around the world. Our visionary approach means we constantly embrace new ideas to keep up at the forefront of the industry is what you expect from the more sustainable coatings Company. Progressing into 2021-2022, India is an important market within Southeast and South Asia for AkzoNobel's global operation.

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