Your Directors are pleased to present their report and financial statements (standalone and consolidated) for the financial year ended 31^st March 2025.

Highlights of the Financial Performance and State of Company's Affair

Note: The figures stated above are as per the standalone financial statements.

Dividends

The Board of Directors (the "Board") of your Company have recommended a final dividend of ?10.00 per equity share of face value of ?1.00 each, amounting to ?9,641.6 million for the financial year ended 31^st March 2025 for approval of the members at the ensuing 66^th Annual General Meeting ("AGM") of your Company ("66^th AGM"). During the financial year ended 31^st March 2025, first and second interim dividends of ?2.75 and ?14.25 per equity share of face value of ?1.00 each, paid on and from 6^th August 2024 and 27^th February 2025, respectively. The total dividend for the financial year, including the proposed final dividend, amounts to ?27.00 per equity share, leading to a total dividend payout of ?26,032.3 million for the year.

The two interim dividends paid during the financial year ended 31^st March 2025 and the final dividend recommended for the financial year ended 31^st March 2025

is in accordance with the Dividend Distribution Policy of your Company. The said Policy is available on the website of your Company at https://www.nestle.in/investors/policies.

Subsidiary, Joint Venture and Associate companies

As on 31^st March 2025, your Company did not have any subsidiary company.

The Board of your Company at its meeting held on 25^th April 2024, approved the execution of a definitive Joint Venture Agreement ("JV Agreement") to establish a joint venture between the Company and Dr. Reddy's Laboratories Limited ("DRL") to bring together the well-known global range of nutritional health solutions as well as vitamins, minerals and health supplements of Nestle Health Science with the nutraceutical portfolio, strong and established commercial strengths of DRL. This collaboration sought to enable both the partners to expand their complementary nutraceutical portfolio across key categories such as metabolic health, hospital nutrition, healthy ageing, general wellness, women's health, and child nutrition, serving consumers across India and Nepal. As part of this arrangement, your Company acquired 49,000 equity shares of ?10.00 each in "Dr. Reddy's and Nestle Health Science Limited" (formerly Dr. Reddy's Nutraceuticals Limited) ("JV Company") from DRL on 24^th July 2024. Further, your Company has subscribed to 705,551,000 equity shares of ?10.00 each at par, through a Rights Issue of the JV Company. Following this acquisition, the shareholding structure of the JV Company remains unchanged, with your Company holding 49% equity (comprising 705,600,000 equity shares of ?10.00 each) and DRL holding 51% equity (comprising 734,400,000 equity shares of ?10.00 each).

Your Company has also executed a Business Transfer Agreement ("BTA") with the JV Company for the slump sale of its medical nutrition and nutraceuticals ("NHSc") business to the JV Company effective from 1^st August 2024, for a lump sum consideration of ?2,189 million. The said consideration was at an arm's length basis and adjusted for net working capital transferred, subject to withholding of applicable taxes/ payment of tax deducted at source.

Pursuant to the JV Agreement dated 25^th April 2024, the funds raised by the JV Company through the Rights Issue were utilized to, inter-alia, acquire respective nutritional health solutions businesses and/or other resources from the Company and DRL and for general corporate purposes, including meeting the working capital requirements of the JV Company.

The Company has obtained a certificate from the Statutory Auditors certifying that the Company is in compliance with the FEMA Regulations with respect to the downstream investment made in the JV Company.

A statement providing details of performance and salient features of the financial statements of the associate/ joint venture company, as per Section 129(3) of the Act, is provided under Note no. 49 of the consolidated financial statements, Note no. 5 and 7A of standalone financial statements and therefore not repeated in this Report to avoid duplication.

Slump Sale of Nestle Business Services Division

The Board of your Company, at its meeting held on 7^th February 2024, approved the slump sale of Nestle Business Services ('NBS') Division of your Company to Purina PetCare India Private Limited (subsequently name changed to Nestle Business Services India Private Limited and hereafter referred as "NBS Entity"), related party, being a 100% subsidiary of Nestle S.A., for an aggregate consideration of ?798 million. The said consideration was at an arm's length basis and adjusted for net working capital transferred by your Company as on 30^th June 2024. This transaction was effective from 1^st July 2024.

NBS Division predominantly provided captive services to your Company across four End-to-End Services (Order to Cash, Source to Pay, Record to Report and Hire to Retire) which helps your Company in driving operational efficiency, cost optimization, effective decision-making through data analytics, enhancing customer service, and accelerating automation of various scalable processes across your Company's value chain (hereinafter "NBS Services"). As per the Business Transfer Agreement signed between your Company and NBS Entity, after the transfer of NBS Division, your Company continues to receive the NBS Services at an arm's length basis under a service agreement. The above transaction has no significant impact on the Company.

Launch of NESPRESSO

The Board of your Company, at its meeting held on 25^th April 2024, approved the launch of NESPRESSO, the pioneer in premium coffee with its range of exclusive coffees. The NESPRESSO coffees and machines are available in both original and professional systems, to serve domestic and professional consumers. On 6^th March 2025, the first NESPRESSO Boutique was inaugurated in Delhi, marking a significant milestone in our retail expansion. The new boutique offers coffee enthusiasts an immersive experience, showcasing NESPRESSO's iconic range of high-quality coffees and state-of-the-art machines. Consumers can explore and savor a variety of coffee blends, receive personalized recommendations from trained coffee specialists, and learn about NESPRESSO's commitment to sustainability. Additionally, NESPRESSO products will be made accessible across India through leading e-commerce platforms, ensuring wider reach and convenience for coffee lovers nationwide.

Your Company and NESPRESSO S.A. have appointed M/s. Thakral Innovations Pvt. Ltd. as the official distribution partner in India covering the full range of NESPRESSO coffee products across all channels.

NESPRESSO focuses on high-quality beans through the NESPRESSO AAA Sustainable Quality Program, which was co-created in collaboration with the Rainforest Alliance in 2003. The program now includes over 157,000 coffee farmers across 18 countries. Around 600 NESPRESSO agronomists work directly with farmers, providing training and resources to improve coffee quality, farm productivity and sustainability. By selling high quality coffee to NESPRESSO, the farmers receive a premium which could improve their income and a more secure livelihood. Over 93% of coffee is sourced sustainably through the NESPRESSO AAA Sustainable Quality Program. NESPRESSO has been sourcing high quality green coffee from India since 2011 and works directly with around 1,800 coffee farmers in the country.

NESPRESSO - a certified B Corp - plays a pivotal role in driving coffee innovation, discovering unparalleled coffee blends, formulating new recipes, and offering a premium coffee experience for consumers. All NESPRESSO coffees are manufactured in high quality, state of the art manufacturing factories in Switzerland and exported to Nestle markets worldwide.

Greenfield and Brownfield Projects

Consistent with the growth in the business and operations, the Company plans to carry out capital expenditure to increase the capacities, productivity, investment in the new product lines and sustainability initiatives across all its existing factory locations at Moga, Nanjangud, Samalkha, Sanand, Tahliwal, Pantnagar, Choladi, Ponda and Bicholim which is estimated at around ?50,000 million in the coming years. The increase in capacities is planned in all business categories with the intensity being higher in foods, chocolates and beverages. Some of the productivity improvement initiatives include expansion in utilities, digitalization of shop floors to enhance operator autonomy, cutting edge process technology & high throughput lines, end-of-line automation with high-speed case packers & robotic industrial palletizers. Some of the investment in the sustainability initiatives includes installation of anaerobic bio digesters and biomass boilers across the factories.

During the year under review, your Company has added a new KitKat production line at its Sanand Factory in Gujarat with a capital expenditure of approximately ?11,000 million. Additionally, at Nanjangud Factory, your Company has replaced the existing coffee Egron 1 manufacturing line with new Egron 3 line as the existing line outlived its useful life involving a capital expenditure of approximately ?6,592 million.

Your Company is setting up a food processing unit at Mundaamba, Block - Jankia in the district of Khordha (Odisha) with an investment of approximately ?9,000 million. The foundation stone was laid down for the factory in April 2025 and the project implementation is in progress. The facility will focus on manufacturing products from the Company's Foods portfolio, specifically prepared dishes and cooking aids. This is slated to be your Company's tenth factory and first in the eastern part of the country.

Material Changes and Commitments

There have been no material changes and commitments affecting the financial position of your Company which occurred between the end of the financial year ended 31^st March 2025 to which the financial statements related to and date of this report.

There has been no change in the nature of the business of your Company.

Amount transferred to Reserves

The Board of your Company do not propose to transfer any amount to the reserves.

Contribution to the Exchequer

Your Company over the years has been enabling significant contribution to various taxes.

During the financial year ended 31^st March 2025, your Company through its businesses, enabled tax collections at Central and State level close to ?55.0 billion, in aggregate.

Exports

During the financial year ended 31^st March 2025, your Company's export business expanded its footprints to Maldives and Papua New Guinea, offering diverse range of confectionery SKUs. While MAGGI noodles was introduced in new markets in the Middle East and South Africa NESTLE MUNCH, NESCAFE SUNRISE, MAGGI Masala-Ae-Magic were extended to new markets in the United States and the United Arab Emirates.

Business Development

During the financial year ended 31^st March 2025, Powdered and Liquid Beverages was the largest growth contributor, with high double-digit growth. NESCAFE strengthened its leadership position by gaining market share and bringing more than 5.1 million households into the coffee category. NESCAFE Ready-to-Drink cold coffee range, one of the fastest growing segments globally, expanded its new range to India this year. Driven by cold coffee consumption among Gen Z and Millennials, it is creating entirely new coffee-drinking occasions. Confectionery grew at a high single-digit pace both in value and volume driven by KITKAT. India is the second largest market for the brand globally. Prepared Dishes and Cooking Aids posted mid-single-digit growth with MAGGI returning to volume growth and MAGGI Masala-Ae-Magic consistently demonstrating good growth. India continued to be the largest market worldwide for MAGGI.

Milk Products and Nutrition was backed by launches. By reinforcing our commitment to offer nutritious choices to consumers through meaningful innovations, we achieved our ambition of introducing new CERELAC variants with no refined sugar. CEREGROW variant with no refined sugar too was launched this financial year and the early response is encouraging.

The Petcare business reported high double-digit growth - the highest ever, since its integration into the Nestle India business. PURINA FELIX and FRISKIES cat food brands achieved high growth. PURINA PRO PLAN dog food continued to be well-received by pet owners. Out-of-Home (OOH) business delivered strong double-digit growth and emerged as one of our fastest growing businesses.

NESPRESSO's first boutique in India in New Delhi, was opened during the financial year ended 31^st March 2025. Penetration, premiumization and innovation combined with disciplined resource allocation have been key in driving growth. Since 2015, your Company has recalibrated and re-energised its product portfolio, by launching over 150 new products contributing 7% of sales. To serve the consumers, your Company has an omni-channel approach, and this implies that the brands are available at locations and channels that are

most convenient for consumers. One such channel is e-commerce, which continued in its growth trajectory, propelled by the rapid expansion of Quick Commerce, contributing to 8.5% of domestic sales, in this financial year ended 31^st March 2025.

Your Company remained committed to its RUrban journey. It strengthened its route to market through a comprehensive RUrban strategy focused on five key pillars: Infrastructure, Product Portfolio, Visibility, Consumer Connect, and Technology.

Your Company is investing approximately ?65,000 million between 2020 and 2025 to develop new capabilities and capacity. This not only demonstrates the strong demand for its products but also its commitment to manufacture in India and 'Make in India'. The Odisha factory, your Company's 10^th citadel of growth, is being set up with an initial investment of approximately ?9,000 million, in its first phase, to manufacture products from the foods (Prepared Dishes and Cooking Aids) portfolio. Your Company benefits from the Nestle Group's R&D network, new processes and technologies, technical and non-technical assistance including training and sustainable manufacturing practices under the General License Agreements.

The spectre of climate change is rapidly intensifying, demanding swift action. We have increased our reliance on renewable energy, implemented sustainable logistics practices, minimized waste. We continue to promote circular economy and have transitioned to sustainable packaging. Our supply chain resilience is being strengthened. Through regenerative agricultural practices greenhouse gas emissions are being reduced. We work closely with farmers and suppliers to source raw materials responsibly. One noteworthy endeavor in environmental sustainability is our proprietary technology called 'Zer'Eau' in Moga and Samalkha factories. Here water extracted from milk procured by the factories is recycled to reduce groundwater consumption every year by around 20%.

In line with the commitment to society, your Company has positively impacted the lives of over 16 million beneficiaries through initiatives that align with the UN's Sustainable Development Goals. These include rural development, education, nutrition awareness, environmental initiatives, livelihood enhancement, feeding support programs, and water and sanitation improvements.

Milk Products and Nutrition portfolio

During the year, Milk Products and Nutrition portfolio contributed 37.9% to sales backed by new launches. This year, your Company reinforced its commitment to offer nutritious choices to consumers through meaningful innovations. For more details on this section, refer to page number 20, which forms an integral part of this Report.

Prepared Dishes and Cooking Aids portfolio

The Prepared Dishes and Cooking Aids business registered satisfactory growth and contributed 31.4% to sales. This business continued to recruit new households, increase distribution reach aided by impactful campaigns, targeted innovations and attractive consumer activations. For more details on this section, refer to page number 24, which forms an integral part of this Report.

Confectionery portfolio

The Confectionery portfolio displayed satisfactory growth despite category challenges of high-cost inflation. This growth was attributed to unlocking the penetration opportunity, innovating with a focus on premiumization and enhancing the quantity and quality of our distribution network. The confectionery portfolio contributed 16.9% to sales. For more details on this section, refer to page number 30, which forms an integral part of this Report.

Powdered and Liquid Beverages portfolio

The Powdered and Liquid Beverages portfolio has achieved robust growth and contributed 13.8% to sales. This growth was driven by a focused and consistent strategy aimed at recruitment and enhancing the relevance of the coffee category. For more details on this section, refer to page number 32, which forms an integral part of this Report.

Nestle Professional - Out-of-Home business

The Out-of-Home business reported strong growth and was propelled by relevant innovations and premiumization across categories. For more details on this section, refer to page number 34, which forms an integral part of this Report.

Sales

During the period under review, your Company ma de significant progress in increasing its reach, particularly in RUrban markets, through enhanced distribution infrastructure and leveraging technology. For more details on this section, refer to page number 18, which forms an integral part of this Report.

Building Robust Digital, Data and IT Capabilities

Your Company continued to strengthen its comprehensive digital infrastructure. The team emphasized innovation, artificial intelligence, and smart improvements that enhanced the experience for your Company's employees, users, and customers. This helped in achieving excellence across functions and businesses. For more details on this section, refer to page number 36, which forms an integral part of this Report.

People

Your Company continued to focus on upskilling and empowering youth and creating opportunities for persons with disabilities to build a dynamic, empathetic, and inclusive workforce. Several initiatives and policies were institutionalized to ensure holistic growth for the existing and future workforce. For more details on this section, refer to page number 46, which forms an integral part of this Report.

Supply Chain

Your Company continued to build a stronger and more resilient and agile supply chain network through collaboration with a strong network of partners and remained nimble and resilient in the wake of a dynamic ecosystem. For more details on this section, refer to page number 50, which forms an integral part of this Report.

Environment Sustainability

During the period under review, your Company progressed steadily on its environmental commitments and reduced its emissions, water usage, waste water generation and energy usage per ton of production. Its Sustainability Task Forces managed to steer operations in a sustainable way. For more details on this section, refer to page number 54, which forms an integral part of this Report.

Management Analysis Global Economy

The year was defined by significant global and domestic challenges, shaped by geopolitical tensions, persistent inflation, volatile foreign exchange, and elevated interest rates. Key global developments—such as the US Federal Reserve's rate cut cycle, China's stimulus measures, and uncertainties surrounding the US economic & trade policies (including tariffs)contributed to heightened market volatility.

A particularly concerning trend was the slowdown in global manufacturing, with Europe and parts of Asia experiencing notable declines. Supply chain disruptions and weak external demand further compounded these pressures, highlighting vulnerabilities in global trade and production dynamics.

Indian Economy

India continues to demonstrate steady economic growth, with a projected real GDP increase of 6.4% in FY25-closely aligning with the decadal average. Aggregate demand remains strong, with private final consumption expenditure expected to rise by 7.3%, fueled primarily by a rural demand rebound. The agriculture sector is also set for recovery, with growth projected at 3.8% in FY25.

Despite this positive trajectory, sluggish manufacturing growth remains a challenge, affecting job creation and hindering India's ambitions as a global manufacturing hub. Addressing unemployment requires targeted policy interventions to harness India's demographic dividend, ensuring sustainable economic expansion.

Unlike many developed economies reliant on global trade, India's economic momentum is largely driven by domestic consumption and strategic government spending, providing a cushion against international volatility. Additionally, the reduction of headline inflation to a seven-month low of 3.6% in February 2025-particularly in essential food categories-is expected to enhance consumer purchasing power and sustain demand. FMCG Sector: Navigating Change and Seizing Opportunities

The FMCG sector is the fourth-largest in India, contributing approximately 3% to GDP and employing around 3 million people. In 2024, the industry faced challenges due to persistent inflationary pressures, leading to shifts in consumption patterns.

Quick commerce is reshaping India's grocery landscape, becoming a go-to choice for urban shoppers. Reports indicate that 31% of urban Indians now depend on quick commerce platforms for primary grocery shopping, with an additional 39% using them for top-up purchases-highlighting the growing demand for speed and convenience.

Brands are increasingly adopting premiumization and value-driven strategies, creating high-perceived value products tailored to discerning consumers. A strong emphasis on nutrition is driving innovation in millet-based and fortified foods. To remain competitive, brands must expand their portfolios by integrating science with nutrition-offering wholesome food options, plant-based proteins, healthy snacks, and products designed for healthy aging.

Sustainability is emerging as a crucial factor in consumer decision-making. Consumers are increasingly gravitating toward brands that demonstrate environmental and social responsibility. Companies that prioritize sustainable sourcing, regenerative agricultural practices, eco-friendly packaging, carbon footprint reduction, and investment in social initiatives are well-positioned to gain a competitive edge in the evolving marketplace. India's Consumer Landscape: A Market in Transformation India's FMCG market spans 496 million consumers-35% in urban centers and 65% in villages. As consumption patterns shift, five distinct generations shape demand, each with unique values, preferences, and spending power. Legacy brands continue to connect generations, reinforcing loyalty.

India's demographic dividend is a key advantage, with Gen Z leading consumption trends, followed closely by Millennials

Beyond the youth-driven economy, India's aging population is also expanding, with over 10% of its citizens now classified as elderly. By 2050, UNFPA forecasts that one in five individuals in India will be seniors. This "silver generation," especially in urban markets, is an emerging consumer force-challenging outdated stereotypes and prioritizing personal wellbeing and quality living.

The evolving consumer landscape presents a dynamic market opportunity. With rising aspirations across both urban and rural India, Gen Z's spending power, and a growing elderly population keen to invest in themselves, India's FMCG sector is primed for transformation. Technological Evolution: AI Reshaping the Future We stand at the threshold of a transformative technological era, where Artificial Intelligence (AI) and Generative AI are driving unprecedented innovation. India, a global hub of AI talent, contributes 16% to the worldwide AI workforce-reinforcing its role in shaping the future.

The integration of AI unlocks immense potential, fostering value creation through education, upskilling, and a forward-thinking, inclusive AI vision. Within the FMCG sector, AI-powered real-time analytics enhances sourcing, customer engagement, supply chain efficiency, product development, logistics, sales, pricing, distribution, and personalized shopping experiences-fundamentally reshaping business strategies and operations.

Directors Responsibility Statement

The Directors state that:

a)    in the preparation of the annual accounts for the financial year ended 31^st March 2025, the applicable accounting standards have been followed and no material departures have been made from the same;

b)    they 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 your Company as at 31^st March 2025 and of the profits of your Company for that period;

c)    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (the "Act") for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d)    they have prepared the annual accounts on a going concern basis;

e)    they have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively; and

f)    they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors and Key Managerial Personnel

The Board had, based on the recommendation of the Nomination and Remuneration Committee ("NRC"), at its meeting held on 5^th April 2024 appointed Ms. Suneeta Reddy (DIN: 00001873) as an Additional Director and Independent Non-Executive Director of the Company with effect from 5^th April 2024 for a term of five consecutive years i.e. upto 4^th April 2029, which was subsequently approved by the members of the Company, vide resolution passed through Postal Ballot on 17^th May 2024.

Mr. Rajya Vardhan Kanoria (DIN: 00003792), retired as an Independent Non-Executive Director of your Company with effect from the close of business hours on 12^th May 2024 after completion of his second term of five consecutive years. Your Directors wish to place on record appreciation for the immense contribution made by Mr. Kanoria during his tenure as an Independent Non-Executive Director of your Company.

The Board had, based on the recommendation of the NRC, at its meeting held on 12^th June 2024 appointed Mr. Sidharth Kumar Birla (DIN: 00004213) as an Additional Director and Independent Non-Executive Director with effect from 12^th June 2024, to hold office for a term of five consecutive years i.e. upto 11^th June 2029, which was subsequently approved by the members at the 65^th AGM of your Company held on 8^th July 2024.

Mr. Suresh Narayanan (DIN: 07246738) will retire as Chairman and Managing Director of the Company with effect from the close of business hours on 31^st July 2025. The Board places on record its appreciation and gratitude for the contribution and impact made by Mr. Narayanan during his tenure as the Chairman and Managing Director of your Company.

Pursuant to intimation by Nestle S.A. and under Article 106 and 118A of the Articles of Association of your Company, the Board had, on the recommendation of the NRC, at its meeting held on 17^th October 2024 recommended appointment of Mr. Manish Tiwary (DIN: 02572830) as a Non-Retiring Director and Managing Director ('Key Managerial Personnel') with effect from 1^st August 2025, for a term of five consecutive years, to the members for their approval at the ensuing 66^th AGM. As part of the transition plan approved by

financial year ended 31^st March 2025, the non-executive directors of your Company had no pecuniary relationship or transactions with your Company, other than sitting fee, commission and reimbursement of expenses, if any. Further, during the financial year ended 31^st March 2025, the Company has not received any amount from the directors of the Company.

Brief resume, nature of expertise in specific functional areas, disclosure of relationships between directors inter-se, details of directorship held in other companies, membership of committees of the Board along with listed entities from where they resigned in the past three years, shareholding in the Company held by the directors proposed to be appointed/ re-appointed at the 66^th AGM, is provided in the Notice of the 66^th AGM.

Pursuant to the provisions of Section 203 of the Act, Mr. Suresh Narayanan, Chairman and Managing Director, Ms. Svetlana Boldina, Executive Director -Finance & Control and CFO, and Mr. Pramod Kumar Rai, Company Secretary are the Key Managerial Personnel of your Company as on 31^st March 2025.

The NRC had adopted principles for identification of key managerial personnel, senior management including the executive directors which are based on "The Nestle Management and Leadership Principles" and "Nestle Leadership Framework". Nomination and Remuneration (NR) Policy of your Company includes criteria for determining qualifications, positive attributes and independence of a director. The NR Policy relating to the remuneration of directors, key managerial personnel, senior management and other employees is framed with the object of attracting, retaining and motivating talent which is required to run your Company successfully. The same is also available on the website of your Company at https://www.nestle.in/investors/policies.

An annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors and the details of manner of performance evaluation of Directors, Board and its Committees are available in the Corporate Governance Report, which forms an integral part of this Report.

Familiarization Programme for Directors

Your Company conducts a structured orientation programme for the Independent Non-Executive Directors on the Board. As part of this programme, Senior Management along with their second line of managers provides comprehensive presentations covering the Company's business operations, budgets, the roles, rights, and responsibilities of Directors, the nature of the industry in which the Company operates, its business model and competitive landscape. To further facilitate an in-depth understanding of the operations, the Company also organizes visits to its manufacturing facilities.

The details of familiarization programmes imparted to the Directors are available on the website of your Company at https://www.nestle.in/about-us/our-leadership-team.

Corporate Social Responsibility

During the financial year ended 31^st March 2025, the Corporate Social Responsibility ("CSR") Committee was re-constituted as Ms. Suneeta Reddy, Independent Non-Executive Director, was appointed as a Member and Chairperson of the CSR Committee with effect from 5^th April 2024 in place of Dr. Swati A. Piramal, who ceased to be a Member and Chairperson of the CSR Committee with effect from the close of business hours on 31^st March 2024, upon completion of her second term of five consecutive years as an Independent Non-Executive Director of your Company.

As on 31^st March 2025, the CSR Committee comprised of Ms. Suneeta Reddy as Chairperson and Mr. Suresh Narayanan, Ms. Svetlana Boldina and Ms. Anjali Bansal, as Members.

The terms of reference of the CSR Committee are provided in the Corporate Governance Report, which forms an integral part of this Report. Your Company has also formulated a CSR Policy, which is available on the website of your Company at https://www.nestle.in/investors/policies. Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended ("CSR Rules") is annexed as Annexure - 2 and forms an integral part of this Report.

In terms of Section 135 of the Act read with CSR Rules, your Company had, during the financial year ended 31^st March 2025, spent over two percent of the average net profits of your Company during the three immediately preceding financial years in accordance with the CSR Policy and the Annual Action Plan approved by the Board, from time to time on the recommendation of the CSR Committee.

Due to the extension of the previous financial year to a period of fifteen months (i.e. period from January 2023 to March 2024), the excess amount spent on the CSR activities, over and above the budget approved by the Board in the previous financial year, was carried forward and set off with the CSR amount spent during the financial year ended 31^st March 2025.

In addition to the above, your Company has been implementing societal activities since many decades under the umbrella of "Creating Shared Value" which have not been reckoned for arriving at the spends as per CSR Rules.

Your Company's CSR activity expands across nutrition awareness, water and sanitation, rural development and environment. Details of some of the salient features

of the CSR Policy and CSR initiatives like empowering communities, improving lives through Project Jagriti, empowering youth for a healthier future through Nestle Healthy Kids Programme, igniting young minds with experiential learning through Project Jigyasa a part of Nestle Healthy Kids Programme, building a brighter future in rural Haryana through Project Vriddhi, strengthening street food safety through Project Serve Safe Food, clean environment with emphasis on waste management through Project Hilldaari, clean water and sanitation facilities through Project Clean Drinking Water and other projects on disaster management, are given from page number 40 to 45 which forms an integral part of the Annual Report.

Business Responsibility and Sustainability Report

Your Company does business that delivers long-term shareholder value and benefits to the society. Your Company continues to focus on its commitments which are aligned with national priorities and United Nations Sustainable Development Goals.

Your Company aims to make safe, tasty and sustainable food, that is nutritious, accessible and affordable, minimizing its impact on the resources, contributing to a future in which they are available for generations to come; boosting the well-being of the communities and enabling a just transition to regenerative practices; and creating a positive business environment and empowering your Company's employees to make sustainable business decisions.

In terms of Regulation 34 of the Listing Regulations read with relevant SEBI Circulars, reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report" ('BRSR'). The BRSR seeks disclosure on the performance of your Company against nine principles of the "National Guidelines on Responsible Business Conduct" ('NGRBCs').

Further, under the BRSR Core, which is a sub-set of BRSR, consisting of a set of Key Performance Indicators (KPIs)/ metrics under nine ESG attributes, new KPIs have been identified for assurance such as job creation in small towns, open-ness of business, gross wages paid to women etc. Also, for better global comparability, intensity ratios based on revenue adjusted for Purchasing Power Parity (PPP) have been included. Your Company had taken reasonable assurance on BRSR Core by a third-party Independent Assurance provider viz. Grant Thornton Bharat LLP.

Your Company has published the BRSR and Assurance Report on BRSR Core for the financial year ended 31^st March 2025, which are annexed as Annexure - 3A and Annexure - 3B, and forms an integral part of this Report.

for ratification of remuneration of the Cost Auditors by the members has been set out in the Notice of the ensuing 66^th AGM of your Company.

The Cost Audit Report issued during the financial year ended 31^st March 2025, does not contain any qualification, reservation, adverse remark or disclaimer and the Cost Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

Secretarial Auditors and Secretarial Audit Report

In terms of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, on the recommendation of the Audit Committee, the Board appointed M/s. S. N. Ananthasubramanian & Co., Company Secretaries (Firm Registration Number - P1991MH040400) as the Secretarial Auditors of your Company for the financial year ended 31^st March 2025, who carried out the Secretarial Audit for the financial year ended 31^st March 2025. The Report given by the Secretarial Auditors is annexed as Annexure - 4 and forms an integral part of this Report. The Secretarial Audit Report is self-explanatory and does not call for any comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the financial year ended 31^st March 2025, the Secretarial Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

In terms of Regulation 24A of the Listing Regulations, with effect from 1^st April 2025, your Company is required to appoint a Practicing Company Secretary for not more than one term of five consecutive years or a firm of Practicing Company Secretaries for not more than two terms of five consecutive years, as a Secretarial Auditor, with the approval of the members at its AGM and such Secretarial Auditor must be a peer reviewed company secretary and should not have incurred any of the disqualifications as specified under the Listing Regulations. Further, as per the said Regulation, any association of the individual or the firm as the Secretarial Auditors of the Company before 31^st March 2025 shall not be considered for the purpose of calculating the tenure of the Secretarial Auditors.

Taking into account the above    requirements,

the Board, on the recommendation of the Audit Committee, has approved the appointment of M/s. S. N. Ananthasubramanian & Co., Company Secretaries (Firm Registration Number -P1991MH040400) as the Secretarial Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of 66^th AGM till the conclusion of 71^st AGM to be held in the year 2030, covering the period

from the financial year ending 31^st March 2026 till the financial year ending 31^st March 2030, subject to the approval of the members at the ensuing 66^th AGM of your Company. The recommendation followed a detailed evaluation of proposals received by the Company and consideration of factors such as technical capabilities, independence, industry experience, subject matter expertise, profile of audit partners and team, quality of audit practices, and past association with the Company.

Your Company has received a written consent from the Secretarial Auditors that the appointment, if approved, will be in accordance with the applicable provisions of the Listing Regulations, Act and rules framed thereunder. Further, the Secretarial Auditors have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of your Company.

Secretarial Standards

During the financial year ended 31^st March 2025, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

Meetings of the Board

Nine meetings of the Board of your Company were held during the financial year ended 31^st March 2025. The particulars of the meetings held and attendance of the Directors in the meetings are detailed in the Corporate Governance Report, which is annexed as Annexure - 1 and forms an integral part of this Report. The certificate issued by Company Secretary in Practice is enclosed with the Corporate Governance Report.

Annual Return

In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of your Company is available on the website of your Company at the web-link https://www. nestle.in/investors/stockandfinancials/annualreturns.

Details of Loans, Guarantee and Investments

The particulars of loans, guarantee and investments have been disclosed in Note no. 7, 8 and 11 to the standalone financial statements.

Related Party Transactions

Your Company has formulated a policy on materiality of related party transactions and on manner of dealing with related party transactions ('RPT Policy') including clear thresholds limits as approved by the Board. During the period under review, based on the recommendation of the Audit Committee, the Board has approved amendments to the RPT Policy at its meeting held on 31^st January 2025.

The updated RPT Policy is available on the website of your Company at https://www.nestle.in/investors/policies. The Board of your Company has approved the criteria to grant omnibus approval by the Audit Committee within the overall framework of the RPT Policy on related party transactions. All members of the Audit Committee are Independent Non-Executive Directors.

All related party transactions and subsequent material modifications are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for related party transactions on a quarterly basis for transactions which are of a repetitive nature and/or entered in the ordinary course of business and are at an arm's length basis. Your Company has obtained a report from a reputed accounting firm, providing fairness opinion on the arm's length nature of pricing policies adopted by the Company across various categories of related party transactions.

All related party transactions entered during the financial year ended 31^st March 2025 were in ordinary course of the business and at an arm's length basis. In terms of the Act and Rules framed thereunder read with the Listing Regulations, no material related party transactions, i.e. transaction with a related party exceeding rupees one thousand crore or ten percent of the annual consolidated turnover, as per the last Audited Financial Statements of your Company whichever is lower, were entered during the financial year ended 31^st March 2025 by your Company. Accordingly, the disclosure of related party transactions as required under Section 134 (3) (h) of the Companies Act, 2013 ("the Act"), in Form AOC-2 is not applicable. Members may refer to Note no. 41 to the standalone financial statements which sets out related party disclosures pursuant to IND AS-24.

During the financial year ended 31^st March 2025, pursuant to the Listing Regulations and other applicable provisions of the Act and Rules framed thereunder, Board of your Company had recommended a proposal to the members of the Company by way of an Ordinary Resolution through postal ballot for the payment of general licence fees (royalty) by your Company to Societe des Produits Nestle S.A. ('the Licensor'), being a related party, at the rate not exceeding 5.25%, net of taxes, of the net sales of the products sold by your Company as per the terms and conditions of the existing General Licence Agreements ("GLAs"), payable in a staggered manner over the period of five years by making an increase of 0.15% per annum over the current general license fees (royalty) of 4.5% per annum effective from 1^st July 2024, notwithstanding that the transaction(s) involving payments to the Licensor with respect to general licence fees (royalty), during any financial year including any part thereof, is considered material related party transaction(s) being in excess of the limits specified under Regulation 23 (1A) and

other applicable provisions of the Listing Regulations at any time. Based on the Scrutinizer's Report dated 17^th May 2024, the Company Secretary and Compliance Officer, duly authorised by the Chairman and Managing Director, declared that the Ordinary Resolution, as contained in the Postal Ballot Notice dated 5^th April 2024 put to vote by means of postal ballot through e-voting, was not passed with requisite majority on 17^th May 2024.

Respecting the decision of the members and request received from the Licensor and feedback from other stakeholders, the Board of your Company with only the Independent Directors voting and the Executive Directors recusing, approved continuation of payment of general licence fees (royalty) at the current rate of 4.5%, net of taxes, of the net sales of the products sold by the Company as per the terms and conditions of the GLAs, notwithstanding that such payment of general licence fees (royalty) considered material related party transaction under Regulation 23 (1A) of the Listing Regulations effective from 8^th July 2024, which was subsequently approved by the members of the Company at the 65^th AGM held on 8^th July 2024.

During the financial year ended 31^st March 2025, there was no subsequent material modification in the terms and conditions of GLAs, as defined by the Audit Committee and specified in the RPT Policy.

Risk Management

Your Company has developed and implemented a Risk Management Policy and in the opinion of the Board, during the financial year ended 31^st March 2025, there were no elements of risk identified which may threaten the existence of your Company.

The Board of your Company evaluates the risk management systems periodically and takes into account any recommendation(s) of the Risk Management and Sustainability Initiatives ("RMSI") Committee and the Audit Committee. The RMSI Committee periodically reviews the Risk Management Policy formulated by the Company and the risk assessment and minimization procedures.

During the financial year ended 31^st March 2025, the RMSI Committee was re-constituted and Ms. Suneeta Reddy, Independent Non-Executive Director was appointed as a Member of the RMSI Committee with effect from 5^th April 2024 in place of Dr. Swati A. Piramal, who ceased to be a Member of the RMSI Committee with effect from the close of business hours on 31^st March 2024, upon completion of her second term of five consecutive years as an Independent Non-Executive Director of your Company.

As on 31^st March 2025, the RMSI Committee comprised of Mr. Suresh Narayanan as Chairman and

Mr. PR Ramesh, Ms. Anjali Bansal, Ms. Svetlana Boldina and Ms. Suneeta Reddy as Members. Further, Mr. Suresh Narayanan ceased to be Chairman and Ms. Svetlana Boldina ceased to be Member of RMSI Committee with effect from the close of business hours on 31^st March 2025 and Mr. Sidharth Kumar Birla has been appointed as a Member and Chairman of the RMSI Committee with effect from 1^st April 2025.

Complaint filed in Hon'ble National Consumer Dispute Redressal Commission

The Union of India, Department of Consumer Affairs in 2015 had filed a complaint before the Hon'ble National Consumer Dispute Redressal Commission ('NCDRC') on the allegation that by selling MAGGI Noodles in the past, your Company had indulged in unfair trade practice, sold defective and hazardous goods to the public. Complaint sought compensation of ?2,845.5 million and punitive damages of ?3,554.1 million. Your Company had challenged the complaint. The NCDRC vide its Order dated 2^nd April 2024 had dismissed the Complaint in favour of your Company.

Internal Financial Controls and their adequacy

The Directors had laid down internal financial controls to be followed by your Company and such policies and procedures adopted by your Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee oversees the internal financial control systems periodically.

Code of Conduct for Prevention of Insider Trading

As per the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"), your Company has adopted a "Code of Conduct for Prevention of Insider Trading in Securities" (the "Code") and "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("UPSI")".

All the Directors, employees and third parties such as auditors, consultants etc., who could have access to UPSI related to the Company, are governed by the Code. The trading window is closed as per the PIT Regulations during the time of declaration of financial results and occurrence of any material events as per the Code. Mr. Pramod Kumar Rai is the Compliance Officer under the Code.

Audit Committee

During the financial year ended 31^st March 2025, the Audit Committee was re-constituted and the Board of your Company, at its meeting held on 5^th April 2024, appointed Ms. Anjali Bansal as a Member of the Audit Committee with effect from 5^th April 2024, thereafter, the Audit Committee comprised of Mr. PR Ramesh as Chairman, and Mr. Rajya Vardhan Kanoria, Ms. Alpana Parida and Ms. Anjali Bansal as Members of the Committee, all Independent Non-Executive Directors.

Further, on 12^th June 2024, the Board re-constituted the Audit Committee and Mr. Sidharth Kumar Birla, Independent Non-Executive Director was appointed as a Member of Audit Committee effective from 12^th June 2024 in place of Mr. Rajya Vardhan Kanoria, who ceased to be a Member of the Audit Committee with effect from the close of business hours on 12^th May 2024, upon completion of his second term of five consecutive years as Independent Non-Executive Director of your Company.

As on 31^st March 2025, the Audit Committee comprised of Mr. PR Ramesh as Chairman, Ms. Alpana Parida, Ms. Anjali Bansal and Mr. Sidharth Kumar Birla as members of the Audit Committee, all Independent Non-Executive Directors.

The powers and roles of the Audit Committee are included in the Corporate Governance Report, which forms an integral part of this Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Vigil Mechanism of your Company is governed by significant documents "The Nestle Corporate Business Principles", "The Nestle Management and Leadership Principles", "Nestle India Code of Business Conduct" and "Nestle India Vigil Mechanism/Whistle-blower Policy". The documents are available on the website of your Company at https://www.nestle.in/investors/policies. The Code/ Policy provides for adequate safeguards against victimization of director(s)/ employee(s) who avails the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. It is affirmed that no person has been denied access to the Audit Committee.

Your Company as part of establishment of Vigil Mechanism provides an independent third party operated free phone, mobile application and web-based platform namely, "SpeakUp", to all internal and external stakeholders including directors and employees with a dedicated

communication channel for reporting potential instances of non-compliance with the Nestle Corporate Business Principles or for reporting, on a confidential basis, any practices or actions believed to be inappropriate or illegal under the Nestle India Code of Business Conduct. Details of the "SpeakUp" portal, is available on the website of your Company at https://www.nestle.com/aboutus/ businessprinciples/report-your-concerns.

Further, your Company has appointed Ombudsman for Infant Code, under which employees can report Infant Code violations directly to the Ombudsman, with adequate safeguard to protect the employee reporting.

Your Company sensitizes the availability of the above Vigil Mechanism and Ombudsman for Infant Code from time to time to the stakeholders.

Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for the financial year ended 31^st March 2025, in relation to the conservation of energy; technology absorption; and foreign exchange earnings and outgo is annexed as Annexure - 5 and forms an integral part of this Report.

Information regarding employees and related disclosures

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ('Rules'), is annexed as Annexure - 6 and forms an integral part of this Report. As per second proviso to Section 136 (1) of the Act and second proviso of Rule 5 of the Rules, the Report and Financial Statements are being sent to the members of the Company excluding the statement of particulars of employees under Rule 5 (2) of the Rules. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of your Company or at the email address investor@in.nestle.com.

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"), as amended, from time to time, your Company has a robust mechanism in place to redress complaints reported under it. Your Company has complied with provisions relating to the constitution of Internal Committee ("IC") under POSH at all factories and office locations. Each IC comprises of internal members and external member who has an extensive experience in this field. During the financial

year ended 31^st March 2025, four (4) cases of sexual harassment were reported, which were investigated and resolved as per the provisions of the POSH. Your Company has in place a policy on prevention, prohibition and redressal of Sexual Harassment at workplace and the same is available on the website of your Company at https://www.nestle.in/investors/policies.

During the financial year ended 31^st March 2025, initiatives were undertaken to demonstrate your Company's zero tolerance philosophy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication material which are also made easily accessible. In addition, online workshops were also conducted for the employees to enhance awareness and knowledge of other biases that may influence thinking and actions by running the unconscious bias session.

Investor Education and Protection Fund

Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") read with the relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund ("IEPF"), constituted by the Central Government. In terms of the IEPF Rules, during the financial year ended 31^st March 2025, your Company had transferred ?7,464,682.00, ?3,119,100.00 and ?5,259,309.00 to the IEPF, being the unpaid and unclaimed dividend amount pertaining to Final Dividend 2016 & First Interim Dividend 2017, Second Interim Dividend 2017 and Third Interim Dividend 2017, respectively.

Pursuant to the provisions of IEPF Rules, all shares in respect of which any dividend which has not been paid or claimed for seven consecutive years shall be transferred by the Company to the designated Demat Account of the IEPF Authority ('IEPF Account') within a period of thirty days of such shares becoming due to be transferred to the IEPF Account. Accordingly, during the financial year ended 31^st March 2025, your Company had transferred 63,380 equity shares of face value of ?1.00 each, 79,740 equity shares of face value of ?1.00 each, and 32,910 equity shares of face value of ?1.00 each, on which the Final Dividend 2016 & First Interim Dividend 2017, Second Interim Dividend 2017 and Third Interim Dividend 2017, respectively, remained unpaid or unclaimed for seven consecutive years, to the IEPF account, after following the prescribed procedure.

Details of dividends that are due for transfer to IEPF for the next 7 (seven) years on their respective due dates, are available on the website of the Company at https://www. nestle.in/investors/stockandfinancials/dividends.

Mr. Pramod Kumar Rai, Company Secretary and Compliance Officer of the Company acts as the Nodal Officer in accordance with the provisions of IEPF Rules.

Credit Rating

Your Company has been given AAA credit rating for its bank credit facilities by CRISIL. It is the highest rating and indicates a stable outlook for your Company. The rating reflects that your Company has serviced its financial obligations on time. As regards the short-term facility provided by the bank, your Company has been given the credit rating of A1+. The rating reflects strong degree of safety and lowest credit risk.

General

During the financial year ended 31^st March 2025, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) deposits covered under Chapter V of the Act; (b) issue of equity shares with differential rights as to dividend, voting or otherwise;

(c)    issue of shares (including sweat equity shares) to employees of the Company under any scheme;

(d)    raising of funds through preferential allotment or qualified institutions placement; (e) other changes in the share capital of the Company; (f) significant or material order passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future; (g) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016; and (h) instance of one-time settlement with any bank or financial institution.

Trade Relations

Your Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and the unstinting efforts of the employees have enabled your Company to remain at the forefront of the industry.

Your Company continued to receive co-operation and support from the distributors, retailers, stockist, suppliers and others associated with your Company as its value chain partners. Your Directors wish to place on record their appreciation for the same and your Company will continue in its endeavour to build and nurture strong links with trade, based on mutuality, fairness, respect and co-operation with each other and consistent with consumer interest.

Appreciation

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas of its operations as well as the efficient utilization of your Company's resources for sustainable and profitable growth.

Your Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by each and every employee, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible. Your Directors look forward to the long-term future with confidence.