Your Directors are pleased to present their report and the
Company's audited financial statements for the financial
year ended 31^st March 2026.

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

* Financial year 2023-24 comprised 15 months period from 1^st January 2023
to 31^st March 2024, hence the figures are not comparable.
However, previous year 2023-24 ratios have been annualised to
make it comparable.

Share Capital - refer Note 16 of financial statement on equity share capital.

Note 2: The figures stated above are as per standalone financial statements.
*Financial year 2023-24 comprised 15 months period from 1^st January
2023 to 31^st March 2024 hence, the figures are not comparable.

Dividends

The Board of Directors (the "Board") of your Company
have recommended a final dividend of h5/- per
equity share of face value of h1/- each, amounting
to h9,641.6 million for the financial year ended
31^st March 2026 for approval ofthe members at the ensuing
67^th Annual General Meeting ("AGM") of your Company.
During the financial year ended 31^st March 2026, an
interim dividend of h7/- per equity share of face value
of h1/- each, was paid on and from 26^th February 2026.
The total dividend for the financial year, including the
proposed final dividend, amounts to h12/- per equity
share, leading to a total dividend payout of h23,139.8
million for the financial year.

The interim dividend paid during the financial
year ended 31^st March 2026 and the final dividend

recommended for the financial year ended 31^st March
2026 is in accordance with the Dividend Distribution
Policy of your Company. The said Policy is available on
the website of your Company athttps://www.nestle.in/
investors/policies.

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 2026,
your Company through its businesses, enabled
tax collections at Central and State level close to
H47 billion, in aggregate.

Subsidiary, Joint Venture and Associate companies

As on 31^st March 2026, your Company did not have any
subsidiary company. The Board of your Company at its
meeting held on 25^th April 2024, executed a definitive Joint
Venture Agreement ("JV Agreement") to establish a joint
venture called "Dr. Reddy's and Nestle Health Science
Limited" (formerly Dr. Reddy's Nutraceuticals Limited)
["JV Company"] 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 and 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.

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.

The consolidated financial statements presented in this
annual report include financial results of the associate/
joint venture companies. A separate statement providing
details of performance and salient features of the
financial statements of subsidiary, associate, joint venture
companies, as per Section 129(3) of the Companies Act,
2013 ("the Act") read with Rule 5 of the Companies
(Accounts) Rules, 2014 and its contribution to the overall
performance of the Company is provided under Note
no. 48 of the consolidated financial statements and
Annexure to the consolidated financial statements on
page no. 193, and therefore not repeated in this Report
to avoid duplication.

Share Capital

As approved by the members at the Extraordinary
General Meeting of the Company held on
24^th July 2025, the Authorised Share Capital of the
Company was increased from H1,000,000,000/- (Rupees
one hundred crore only) divided into 1,000,000,000
(one hundred crore) equity shares of face value of
H1/- (Rupee one only) each to h2,000,000,000/- (Rupees
two hundred crore only) divided into 2,000,000,000
(two hundred crore) equity shares of face value of
H1/- (Rupee one only) each and consequently,
Clause V of the Memorandum of Association of the
Company stands altered.

Effective 11^th August, 2025, the issued, subscribed and
paid-up equity share capital of the Company stands
increased from ?964,157,160/- (Rupees ninety six crore
forty one lakh fifty seven thousand one hundred and
sixty only) divided into 964,157,160 equity shares of face
value of H1/- (Rupee one only) each to h1,928,314,320/-
(Rupees one hundred and ninety two crore eighty three
lakh fourteen thousand three hundred and twenty only)
divided into 1,928,314,320 (One hundred and ninety two
crore eighty three lakh fourteen thousand three hundred
and twenty) equity shares of face value of H1/- (Rupee one
only) each, following the allotment of 964,157,160 equity
shares of face value of H1/- (Rupee one only) each as fully
paid-up bonus equity shares, in the ratio of 1:1, i.e., one
(1) fully paid-up equity share of face value of H1/- (Rupee
one only) each for every one (1) existing fully paid-up
equity share of face value of H1/- (Rupee one only) each,
to those eligible members of the Company whose name
appeared in the Register of Members/ Beneficial Owners
as on the Record Date i.e., 8^th August 2025.

These bonus equity shares were issued by capitalising
H964.2 million from retained earnings of the Company,
out of the H8,374.3 million that was reclassified from
the General Reserve and credited to the Retained
Earnings during the financial year ended 31^st March 2024,
in accordance with the Scheme of Arrangement
("Scheme") sanctioned by National Company Law
Tribunal, Delhi Bench ("Hon'ble NCLT"), vide its order
dated 15^th September 2023 and which became effective
from 19^th October 2023 ("the NCLT Order"). In terms
of the Scheme, the aforesaid amount reclassified to
Retained Earnings represents accumulated profits of
the Company and is available for distribution to the
members, from time to time, at the discretion of the
Board of Directors, in such manner, quantum and at
such time as the Board may decide, subject to applicable
regulatory, fiscal and other relevant considerations,
including payment of applicable taxes. A copy of the
NCLT Order and the Scheme is available on the website
of the Company athttps://www.nestle.in/sites/g/files/
pydnoa451/files/2023-09/Final%20Intimation%20
NCLT%20QRDER%2015.09.2023%20Scheme%20of%20
Arrangement%20signed.pdf.

Material changes and Commitments

There have been no material changes and commitments
affecting the financial position of your Company which
have occurred between the end of the financial year
ended 31^st March 2026 to which the financial statements
relate and the date of this report.

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

Exports

During the financial year ended 31^st March 2026, your
Company expanded exports business to new markets,
including the Maldives and Papua New Guinea, taking
the export footprint to 28 countries through 127 million
equivalent consumer units. NESCAFE Sunrise was
introduced in the UAE, Saudi Arabia, Singapore and New
Zealand, and NESCAFE Bulk exports commenced to the
UAE for use in 3-in-1 offerings for sale in GCC member
countries. MAGGI Masala-Ae-Magic seasoning mix was
expanded in the UK, US and UAE; the KITKAT range
was launched in Singapore; and Milkmaid Doypack was
introduced in Sri Lanka.

Business Development

During the financial year ended 31^st March 2026, your
Company remained focused on the fundamentals and
executed with resilience, delivering 14.9% sales growth
alongside strong market share gains.

Your Company's power brands have strengthened their
positions. MAGGI Noodles consistently maintained
market leadership, while KITKAT and NESCAFE
accelerated market share gains.

Product Group Performance

Confectionery recorded high double-digit growth in both
value and volume, underpinned by strong underlying
transaction growth across powerhouse brands.
Momentum was supported by increased distribution,
enhanced freshness through the visicoolers programme
and a sustained innovation pipeline. Key launches and
portfolio actions included KITKAT Pops; MILKYBAR
Butterscotch tablets; MUNCH MAX Crunchies; and
further premiumisation of the KITKAT portfolio with
Salted Caramel and Hazelnut.

Powdered and Liquid Beverages delivered another
year of high double-digit growth, driven by increased
coffee penetration, accelerated premiumisation
and deeper category relevance across consumer
segments, supported by strong brand equity and an
expanded footprint. Performance was anchored by
sustained double-digit growth in the coffee portfolio,
supported by a clear strategy focused on penetration

and premiumisation across both ends of the spectrum.
The Ready-to-Drink ("RTD") journey accelerated with
innovative Vietnamese Latte and Iced Cappuccino
variants, reinforcing RTD as a key pillar of future growth.
NESPRESSO continued its growth trajectory with the
opening of its second boutique in India (Gurugram),
which has resonated well with coffee connoisseurs.

Prepared Dishes and Cooking Aids delivered strong,
volume-driven growth, supported by engagement with
urban consumers and expanded rural reach, resulting
in gains in market share and penetration. Focused
innovations (including 'Double Masala' and the expanded
'Spicy Range') and increased media investments behind
core brands helped sustain and accelerate growth
momentum. Pet food, which is part of the Prepared
Dishes and Cooking Aids, reported high double-digit
growth, driven by a strong innovation pipeline to
expand penetration and trials, wider distribution and a
sharper focus on building deeper bonds between pets
and pet parents.

Milk Products and Nutrition demonstrated resilience,
delivering steady growth. Your Company expanded
portfolio accessibility and value by introducing new and
larger pack sizes to meet evolving consumer needs.
Everyday Dairy Whitener continued to strengthen the
portfolio, with strong reach in South and East India.
The science-led Infant Nutrition proposition was
advanced with NAN ExcellaPro (5 HMOs probiotics);
the CERELAC No Refined Sugar range was expanded;
and the toddler portfolio was strengthened through
differentiated, multi-channel communication.

During the financial year ended 31^st March 2026, your
Company strengthened its business development
agenda by widening the growth funnel across channels,
geographies and adjacencies. This was delivered
through sharper customer acquisition and activation,
targeted expansion in high-potential outlets, and
deeper engagement with key customers and ecosystem
partners—while staying anchored to consumer-led
innovation and disciplined execution.

All major channels recorded strong double-digit growth,
supported by improved execution, partner collaboration
and technology-enabled replenishment.

Nestle Professional (Out-of-Home) delivered sustained,
penetration-led, volume-driven growth, reinforcing
its position as one of your Company's fastest-growing
businesses. India remained the largest market for Nestle's
Out-of-Home business in the Asia, Oceania and Africa
zone (excluding China). Growth was supported by strong
customer acquisition, innovation and premiumisation,
including the expansion of the beverage portfolio with
NESCAFE Duo Gusto (hot and cold offerings) and the
introduction of low and zero-sugar beverage options.

Recipe-led innovations included MAGGI Coconut Milk
powder expansion into coastal cuisines and emerging
cafe and bakery applications for MILKMAID.

Your Company continued to execute an omni-channel
strategy aligned to the evolving retail ecosystem, scaling
e-commerce and quick commerce, strengthening
modern trade and chain pharmacy, and sustaining
growth through general trade across semi-urban
and rural markets.

Priorities remained focused on improving in-stock
availability, reducing lead times and enhancing
execution consistency through sharper channel-wise
assortment and pack roles, closer partner collaboration
and technology-enabled replenishment.

Growth momentum continued, led by strong Quick
Commerce performance-driven by improved availability,
a curated platform-specific pack portfolio across
relevant categories, targeted on and off-platform
media interventions, and strong festive participation
throughout the year.

Organized Trade delivered double-digit growth across
key categories, led by impactful in-store activations,
improved visibility and continued store expansion.

Rural Expansion and Execution

In rural markets, your Company strengthened its
route-to-market and accelerated reach expansion
through a focused approach anchored on infrastructure,
product portfolio, technology, visibility, consumer
communication and people. This integrated approach
delivered a strong scale-up in reach across geographies
supporting the highest reach increase among industry
peers, driven primarily by rural markets expanding
presence to ~216,000 villages and sharpening the focus
from adding outlets to improving coverage effectiveness
and execution quality.

Nutrition, Health and Wellness

Innovation and renovation are integral to Nestle's
Nutrition, Health and Wellness (NHW) strategy. Your
Company continues to make steady progress in reducing
salt, added sugar and fat content across its portfolio.
Your Company believes that all foods can have a role in a
balanced diet, alongside vegetables, fruits, dairy, pulses
and whole grains.

Your Company continues to strengthen the nutritional
profile of its product portfolio by leveraging its deep
expertise in nutrition, science and product development.

Nestle S.A. through its R&D capabilities plays a critical
role in this innovation and renovation agenda, enabling
science-led reformulation, new product development
and continuous improvement of nutritional profiles
while safeguarding taste, quality and safety standards

and offering more options to its consumers that are
contemporary, nutritious and in line with local taste
and preferences.

Your Company provides clear nutrition information
and guidance to consumers through platforms such
as AskNestle, promoting balanced and informed
consumption. AskNestle was launched in 2019 and
since then over 92 million visits have been recorded on
the website for nutritional information, over 717,000 meal
plans have been generated and over 10.7 million access
sessions to expert articles have been made.

Furthermore, your Company voluntarily includes on its
front of pack Guideline Daily Amount (GDA) labelling that
provides consumers transparent nutrition information in
the context of a reference portion for energy and other
key defined nutrients in relation to their daily needs.

People

At the heart of delivering these priorities are our people
creating an environment where they are empowered to
act fast, stay focused and remain flexible, and where
bolder, bigger and better innovations can thrive. Your
Company is strengthening capabilities to leverage
technology, shift people's time to higher-value work
and deliver greater impact. Our people remain central to
the business, bringing creativity and judgment to serve
consumers and customers.

Societal Initiatives and Creating Shared Value

True to its commitment to making a meaningful impact,
your Company continued to advance societal initiatives
strengthening rural development, education and
livelihood enhancement, scaling feeding programmes,
and improving water and sanitation.

Guided by its purpose, your Company continued to
create shared value by serving consumers responsibly.
Across Nestle India, teams advanced the Good
for Planet roadmap through robust governance
and rigorous execution advancing responsible
sourcing, accelerating packaging improvements,
strengthening water stewardship, and progressing
resource-efficient factories.

Commodity Outlook

Coffee prices continue to trend lower, supported by a
favourable crop in Vietnam and the forthcoming crop
in Brazil. Cocoa prices remain subdued, reflecting
improved supply and moderated demand. Sugar prices
remain stable. Edible oil prices are firm and have moved
higher in line with global crude oil prices, supported
by increased diversion to biodiesel. Wheat has been
affected by unseasonal rains in April, resulting in a
delayed harvest and lower quantity and quality. Milk
prices have firmed and are expected to remain elevated
through the summer lean season.

Goods and Services Tax (GST)

The amendments in the rates announced by the
Government of India was a positive step for consumers.
It stimulated consumption, drove affordability and
contribute to the overall growth of the FMCG sector and
the economy. Your Company worked closely with its
partners, distributors, wholesalers, and retailers, to pass
on the benefits of the revised GST rates across product
groups to consumers. This helped contain some of the
commodity inflationary impacts from consumer pricing
perspective. Your Company has managed the transition
efficiently and are currently well placed.

Management Analysis
Global Economy

During the financial year ended 31^st March 2026, the
global economy was resilient but uneven—an important
backdrop for FMCG demand, input costs, and execution
across modern and general trade. Services-led growth
alongside a softer goods cycle translated into mixed
category momentum, with value-seeking behaviour and
smaller pack sizes more evident where real incomes
were under pressure. The IMF World Economic Outlook
(October 2025) projected global growth moderating from
3.2% (2025) to 3.1% (2026); the WEO Update (January
2026) revised the outlook slightly higher to 3.3% (2026)
and 3.2% (2027), consistent with continued but uneven
disinflation. For FMCG, this typically supports relative
volume resilience in essential categories, while keeping
discretionary and premium segments more sensitive
to price architecture, promotions, and channel mix.
Cost conditions remained two-speed: easing headline
inflation helped in some markets, but energy and food
volatility and periodic shipping and freight disruption
continued to create episodic pressure on commodities,
packaging, and logistics costs. McKinsey's Economic
conditions outlook (March 2026) highlighted a sharp
increase in perceived geopolitical risk (72% vs 51%
in December 2025) and the re-emergence of energy
prices among top risks, raising the probability of sudden
moves in resin, fuel, and freight costs and sharpening
price-versus-margin trade-offs.

Indian Economic Overview

The financial year ended 31^st March 2026 witnessed
steady economic expansion and improving real income
conditions. As referenced in the Economic Survey
2025-26 (citing the First Advance Estimates), real GDP
growth is placed at ~7.4%, while private consumption's
share in GDP rose to 61.5% (highest since 2011-12).

Growth conditions reflected a mix of supportive domestic
demand, continued public capex, and resilient services
activity, with near-term momentum influenced by food
prices and monsoon outcomes. Private consumption
remained a key driver, while investment activity and

government spending continued to shape aggregate
demand. External conditions (global growth, commodity
prices and trade flows) remained an important source of
both upside and downside risk.

Inflation moderated during the year, supporting
household purchasing power. The Economic Survey
2025-26 notes average retail inflation (CPI) of about 1.7%
during April-December 2025; however, food inflation
remained the key source of near-term volatility. Rural
conditions and agriculture remained macro-relevant
given their linkages to food inflation, rural incomes
and consumption. Policy support to agriculture and
allied activities continued through income transfers
(PM-KISAN), wider institutional credit and crop insurance
(PMFBY), alongside investments in irrigation, rural roads,
storage and agri-logistics. Procurement/ MSP operations
helped anchor price expectations for key crops. For the
broader economy, the key watch-outs are monsoon and
crop outcomes, food inflation pass-through, and the
resulting effects on rural demand and inflation dynamics.

Public capital expenditure and ongoing infrastructure
build-out continued to support medium-term growth
prospects. Improvements in roads, logistics and
connectivity can reduce freight and inventory costs,
raise productivity and improve market integration
across regions. Over time, these effects can help crowd
in private investment, deepen supply chains, and
strengthen the economy's capacity to absorb demand
without generating sustained inflationary pressures.

Digital adoption continued to reshape economic activity.
Wider use of UPI and deeper connectivity supported
payments efficiency, greater financial inclusion and
continued formalisation, while enabling faster adoption
of digital commerce and data-driven supply chains
across sectors.

The policy focus on ease of doing business continued.
Budget 2025-26 announced an Investment Friendliness
Index of States to encourage state-level improvements in
the business environment.

Key watch-outs for the financial year 2025-26 include
monsoon and food-price dynamics (and their inflation
pass-through), global growth and commodity-price
volatility, the pace of private investment and credit
conditions, and the consistency of fiscal-capex execution.

Indian FMCG and Food & Beverages Sector

The Indian FMCG and food & beverages sector operated
in a more balanced demand environment during the
financial year ended 31^st March 2026, compared to
the preceding period of elevated inflation. Growth was
supported by gradual recovery in real incomes, resilient
demand in staple and everyday consumption categories,
and continued consumer preference for health, hygiene,
convenience and value-led offerings. Demand trends

remained mixed across cohorts, with premiumisation
in select urban segments coexisting with value-seeking
behaviour in more price-sensitive markets, reinforcing
the importance of appropriate price-pack architecture
and portfolio discipline.

General trade remained the largest channel, while modern
trade, e-commerce and quick commerce continued
to gain relevance, particularly in urban markets. At the
same time, the food processing ecosystem continued
to benefit from improving infrastructure, formalisation
and policy support, supporting the medium-term
growth opportunity for branded and value-added food
categories. Input-cost conditions remained mixed, with
moderation in headline inflation partly offset by volatility
in food commodities and energy-linked inputs. The
sector also remained sensitive to agricultural output,
climate and monsoon variability, logistics efficiency, and
evolving food safety and compliance requirements.

Food Processing Sector

India's food processing sector remained an important
part of the broader consumption, agriculture and
manufacturing landscape during the financial year
2025-26. The sector continued to benefit from India's
large agricultural base, rising urbanisation, growing
demand for convenience and value-added foods,
and increasing consumer preference for branded
and packaged products. Structural drivers such as
formalisation, improving cold-chain and logistics
infrastructure, and rising focus on food quality and
safety continued to support the long-term opportunity
across categories.

Government initiatives aimed at strengthening processing
infrastructure, cold chain, formalisation and manufacturing
capability continued to support the sector. Export
opportunities, investment activity and growing consumer
demand for safer, higher-quality and more convenient
food offerings reinforced the medium-term opportunity.
At the same time, the sector remained sensitive to
agricultural output, commodity-price movements, climate
and monsoon variability, logistics efficiency, and evolving
food safety, labelling and compliance requirements.

Directors Responsibility Statement

The Directors state that:

a) in the preparation of the annual accounts for the
financial year ended 31^st March 2026, 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 2026 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 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

Pursuant to the intimation received from Nestle S.A. and
in accordance with Article 106 and 118A of the Articles
of Association of your Company, the Board of Directors,
on the recommendation of the Nomination and
Remuneration Committee ("NRC"), at its meeting held
on 17^th October 2024, recommended to the members
the appointment of Mr. Manish Tiwary (DIN: 02572830)
as a Non-Retiring Director and Managing Director
('Key Managerial Personnel') of the Company for a term
of five consecutive years, effective from 1^st August 2025
up to 31^st July 2030. The members of the Company
approved the said appointment by way of an ordinary
resolution passed at the 66^th Annual General Meeting
held on 26^th June 2025. As part of the transition plan
approved by the Board, Mr. Manish Tiwary joined the
Company on 1^st February 2025 as a Managing Director
(Designate) and was appointed as a Key Managerial
Personnel of the Company with effect from 24^th April 2025.
He assumed responsibilities as Managing
Director effective from 1^st August 2025. Further,
the Board of Directors, at its meeting held on
24^th July 2025, appointed Mr. Manish Tiwary as the
Chairman of Board of the Company with effect from
1^st August 2025. Mr. Manish Tiwary fulfils the criteria
prescribed under the Nomination and Remuneration Policy
of the Company, including in respect of qualifications,
experience, expertise, proficiency and integrity.

The Board of Directors, based on the recommendation
of the NRC, at its meeting held on 24^th April 2025 and
after considering eligibility, extensive knowledge, skills,
experience, time commitment, availability, attendance
and contributions in Board and Committee Meetings,
and annual performance evaluation reports, approved
the re-appointment of Mr. Prathivadibhayankara
Rajagopalan Ramesh (DIN: 01915274) as an Independent
Non-Executive Director of the Company with effect

from 1^st July 2025, for a second term of five consecutive
years i.e., upto 30^th June 2030. The said re-appointment
was subsequently approved by the members by way of
a special resolution passed at the 66^th Annual General
Meeting held on 26^th June 2025.

Mr. Suresh Narayanan (DIN: 07246738), retired as
Chairman and Managing Director of your Company on
31^st July 2025. During his tenure, he provided exemplary
leadership, successfully steering the Company through
the MAGGI crisis of 2015, restoring consumer trust,
reinforcing the Company's reputation for quality and
safety and delivering sustained growth and market
expansion. The Board places on record its sincere
appreciation for his exemplary leadership, significant
contributions and dedicated service to the Company.

The Board of Directors, based on the recommendation
of the NRC, through a resolution passed by circulation
on 20^th November 2025 appointed Mr. Mandeep Singh
Chhatwal (DIN: 11387157) as an Additional Director
and Non-Executive Director of the Company with
effect from 1^st January 2026, which was subsequently
approved by the members of the Company by way of
an ordinary resolution passed through Postal Ballot on
13^th March 2026.

Ms. Svetlana Boldina (DIN: 10044338), relinquished
her office as a Whole-time Director, designated as
Executive Director - Finance & Control and Chief
Financial Officer, of your Company with effect from
31^st January 2026, consequent to her taking up a new
assignment with a Nestle Affiliate. The Board places on
record its sincere appreciation for Ms. Boldina's valuable
contributions during her tenure as a Whole-time Director
of the Company.

The Board of Directors had, on the recommendation
of the NRC, at its meeting held on 30^th January 2026
approved the appointment of Mr. Edouard Dominique
Jean Mac Nab ("Mr. Edouard Mac Nab") (DIN: 11511070)
as an Additional Director and Whole-time Director of the
Company, designated as Executive Director - Finance
& Control and Chief Financial Officer, with effect from
1^st March 2026, to hold office for a term of five consecutive
years i.e., upto 28^th February 2031. The said appointment
was approved by the members of the Company by way
of an ordinary resolution passed through Postal Ballot on
13^th March 2026.

Mr. Satish Srinivasan (DIN: 10173407), will retire as a
Whole-time Director, designated as Executive
Director - Technical, of the Company with effect from
31^st May 2026. The Board places on record its sincere
appreciation for his significant contributions and dedicated
service to the Company.

The Board of Directors, on the recommendation of
the NRC, at its meeting held on 30^th January 2026,

recommended the appointment of Mr. Jagdeep Singh
Marahar (DIN: 09121056) as a Whole-time Director
of the Company, designated as Executive Director -
Technical of the Company for a term of five consecutive
years, effective from 1^st June 2026 up to 31^st May 2031.
The Board, in order to facilitate seamless transition,
designated Mr. Jagdeep Singh Marahar as Head -
Technical (Key Managerial Personnel) of the Company
effective from 1^st May 2026. The said appointment was
approved by the members of the Company by way of
an ordinary resolution passed through Postal Ballot on
13^th March 2026.

Mr. Mandeep Singh Chhatwal (DIN: 11387157),
Non-Executive Director of your Company, retires by
rotation at the ensuing 67^th AGM and, being eligible, has
offered himself for re-appointment. A resolution seeking
the approval of the members for his re-appointment
forms part of the Notice convening the 67^th AGM.

During the financial year ended 31^st March 2026, none of
the Directors resigned from the Company.

All the Independent Non-Executive Directors of your
Company have submitted the declaration confirming
that they meet the criteria of independence as
prescribed under the Act along with Rules framed
thereunder and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015
("Listing Regulations"), they have complied with the
Code for Independent Directors prescribed under
Schedule IV to the Act, and are not disqualified
from continuing as Independent Non-Executive
Directors. The Board has taken on record the said
declarations submitted by Independent Non-Executive
Directors after undertaking due assessment of the
veracity of the same. The Board is of the opinion that
the Independent Non-Executive Directors of your
Company including those appointed/ re-appointed
during the financial year ended 31^st March 2026,
possess requisite qualifications, expertise and
experience (including the proficiency) and they hold
highest standards of integrity. The Independent
Non-Executive Directors of your Company have confirmed
compliance of relevant provisions of Rule 6 of the
Companies (Appointment and Qualification of Directors)
Rules, 2014. During the financial year ended 31^st March
2026, the Independent Non-Executive Directors of your
Company had no pecuniary relationship or transactions
with your Company, other than sitting fees, commission
and reimbursement of expenses, if any.

During the financial year ended 31^st March 2026,
the Company has not received any amount from the
Directors of the Company.

Pursuant to the provisions of Section 203 of the Act,
Mr. Manish Tiwary, Chairman and Managing Director,
Mr. Edouard Mac Nab, Executive Director - Finance &

Control and CFO and Mr. Pramod Kumar Rai, Company
Secretary and Head of Governance & Compliance, are
the Key Managerial Personnel of your Company as on
31^st March 2026.

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
athttps://www.nestle.in/investors/policies. There has
been no change in the NR Policy of the Company during
the financial year ended 31^st March 2026.

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 has in place a structured familiarisation
programme for its Independent Non-Executive Directors.
As part of such programme, the Directors are apprised,
inter-alia, of the Company's business operations,
strategic and business plans, budgets, roles, rights, and
responsibilities of Directors, industry dynamics, business
model and competitive landscape, through business
presentations by the senior management. The Company
also organizes visits to its manufacturing facilities and
certain research and development centres forming part
of the Nestle global R&D network, to enable the Directors
to gain a deeper understanding of its operations.

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

Corporate Social Responsibility

During the financial year ended 31^st March 2026, the
CSR Committee was re-constituted. Mr. Manish Tiwary,
Chairman and Managing Director and Mr. Edouard
Mac Nab, Executive Director - Finance & Control
and Chief Financial Officer, were appointed as
Members of the CSR Committee with effect from
1^st August 2025 and 1^st March 2026, respectively,
in place of Mr. Suresh Narayanan and
Ms. Svetlana Boldina, who ceased to be Members of
the CSR Committee with effect from 31^st July 2025 and
31^st January 2026, respectively.

As on 31^st March 2026, the CSR Committee
comprised Ms. Suneeta Reddy as Chairperson and
Mr. Manish Tiwary, Ms. Anjali Bansal and

Mr. Edouard Mac Nab as Members.

The terms of reference of the CSR Committee are
provided in the Corporate Governance Report,
which forms an integral part of this Annual 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. The 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, during the financial year ended
31^st March 2026, has spent more than 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 of Directors, from time to time, on the
recommendation of the CSR Committee.

In addition, your Company has been undertaking
societal initiatives for several decades under the
umbrella of "Creating Shared Value", which have not
been considered for the purpose of computing the CSR
expenditure under the CSR Rules.

Your Company's CSR initiatives focus on key areas
such as nutrition awareness, water and sanitation, rural
development, and the environment. During the financial
year ended 31^st March 2026, your Company undertook
various projects, inter-alia, in the areas of nutrition,
health and breastfeeding awareness programmes;
plastic waste management awareness initiatives; access
to hands-on science education; establishing school
libraries; providing clean drinking water and sanitation
facilities; livelihood enhancement for street food vendors;
feeding programmes; and village adoption initiatives
aimed at sustainable development. The Company has
implemented these initiatives in collaboration with
credible non-governmental organisations ("NGOs"),
implementing partners, and relevant authorities across
various States in India. Details of the salient features
of the CSR Policy and CSR projects undertaken during
the year are provided on pages 34 to 37 and forms an
integral part of this Report.

Business Responsibility and Sustainability
Report

Your Company conducts its business in a manner that
delivers long-term shareholder value while contributing
to societal well-being. Your Company continues to focus
on its commitments aligned with national priorities and
the United Nations Sustainable Development Goals.

Your Company aims to provide safe, high quality and
sustainable food that is nutritious, accessible and
affordable, while minimizing its impact on natural
resources, contributing to a future in which they are
available for generations to come; boosting the well-being
of the communities. It is equally committed to enhancing
the well-being of communities, enabling a transition
towards regenerative practices, fostering 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, disclosures on
Environment, Social and Governance ("ESG") parameters
are prescribed through the Business Responsibility
and Sustainability Report ("BRSR"). The BRSR requires
disclosure of the Company's performance against nine
principles of the "National Guidelines on Responsible
Business Conduct" ("NGRBCs").

Further, the BRSR Core, being a sub-set of BRSR
comprising key performance indicators (KPIs) across
nine ESG attributes, has prescribed additional matrices
for assurances, including, job creation in small towns,
openness of business and gross wages paid to women.
In addition, for better global comparability, intensity
ratios based on revenue adjusted for Purchasing Power
Parity (PPP) have been included. Your Company had
obtained reasonable assurance on the BRSR Core
from a third-party Independent Assurance provider,
M/s. S. R. Batliboi & Co. LLP.

Your Company has published the BRSR and the
Assurance Report on the BRSR Core for the financial
year ended 31^st March 2026, which are annexed as
Annexure - 3A and Annexure - 3B, respectively, and
forms an integral part of this Report.

The Risk Management and Sustainability Initiatives
Committee, inter-alia, reviews the sustainability initiatives
in accordance with its terms of reference on a
periodic basis.

Statutory Auditors and Auditors' Report

In terms of Section 139 of the Act, read with the Companies
(Audit and Auditors) Rules, 2014, the members of the
Company at the 63^rd AGM of the Company held on
12^th April 2022 approved the appointment of
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants
(ICAI Registration No.: 301003E/E300005) ['M/s. SRB'],
as the Statutory Auditors of the Company for a term of
five consecutive years i.e., from the conclusion of the
63^rd AGM till the conclusion of the 68^th AGM.

The Reports given by M/s. SRB on the standalone and
consolidated Financial Statements of your Company
for the financial year ended 31^st March 2026 ("Financial
Statements") forms part of the Annual Report. The
notes on the Financial Statements referred to in the

Auditor's Report are self-explanatory and do not call
for any further comments. The Auditor's Report does
not contain any qualification, reservation, adverse
remark or disclaimer. During the financial year ended
31^st March 2026, the Auditors have not reported any
matter under Section 143(12) of the Act, accordingly,
no details are required to be disclosed under Section
134(3)(ca) of the Act.

Cost Auditors and Cost Accounts

In terms of Section 148(1) of the Act, your Company
is required to maintain cost records in respect of
milk powder products as specified by the Central
Government. Accordingly, your Company has been
maintaining such cost records in compliance with the
applicable provisions. Pursuant to Section 148 of the
Act read with Companies (Cost Records and Audit)
Rules, 2014, the Audit Committee, at its meeting held on
21^st April 2026, recommended the appointment of
M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi
(Registration No. 000019) and the Board of Directors, at
its meeting held on 21^st April 2026, appointed them as the
Cost Auditors of your Company, to conduct the cost audit
of milk powder products manufactured by the Company
falling under the relevant Customs Tariff Act (Heading
0402) for the financial year ending 31^st March 2027.

The Cost Auditors have given their written consent
confirming that their appointment is in accordance with
the applicable provisions of the Act and Rules framed
thereunder. The Cost Auditors have further confirmed
that they are not disqualified from being appointed
as the Cost Auditors of your Company for the said
financial year. The remuneration of Cost Auditors
has been approved by the Board of Directors on
the recommendation of the Audit Committee. In
the opinion of the Directors, considering the limited
scope of the audit, the proposed remuneration
payable to the Cost Auditors is reasonable and
fair and commensurate with the scope of work.
In accordance with the provisions of the Act and
the Rules framed thereunder, a resolution seeking
ratification of the remuneration payable to the Cost
Auditors forms part of the Notice of the ensuing 67^th
AGM of your Company.

The Cost Audit Report issued for the financial year ended
31^st March 2026 does not contain any qualification,
reservation, adverse remark or disclaimer, the Cost
Auditors have not reported any matter under Section
143(12) of the Act, accordingly, no details are 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, and on the recommendation of
the Audit Committee, the Board of Directors appointed
M/s. S. N. Ananthasubramanian & Co., Company
Secretaries (Firm Registration Number - P1991MH040400)
as the Secretarial Auditors of your Company for a term of
five consecutive years. The Secretarial Auditors carried
out the Secretarial Audit for the financial year ended
31^st March 2026. The Secretarial Audit Report 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 further comments. The Secretarial Audit
Report does not contain any qualification, reservation,
adverse remark or disclaimer. During the financial year
ended 31^st March 2026, the Secretarial Auditors have
not reported any matter under Section 143(12) of the Act,
accordingly, no details are required to be disclosed under
Section 134(3)(ca) of the Act.

In terms of Regulation 24A of the Listing Regulations,
the members of the Company at the 66^th AGM held
on 26^th June 2025, on the recommendation of the
Board of Directors and its Audit Committee, 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. The said
appointment is effective from the conclusion of the
66^th Annual General Meeting until the conclusion of the
71^st Annual General Meeting to be held in the year 2030,
covering the financial years from 2025-26 to 2029-30.
M/s. S. N. Ananthasubramanian & Co. has confirmed
that they are not disqualified from continuing as the
Secretarial Auditors of the Company.

Secretarial Standards

During the financial year ended 31^st March 2026, your
Company has complied with the 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

Six meetings of the Board of Directors of your
Company were held during the financial year ended
31^st March 2026. The details of the Board meetings held
and attendance of the Directors thereat are provided in
the Corporate Governance Report, which is annexed as
Annexure - 1 and forms an integral part of this Report. A
certificate from the Secretarial Auditors of the Company
confirming compliance with the conditions of Corporate
Governance, as stipulated under the Listing Regulations,
is annexed thereto.

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 athttps://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 and 8 to the
standalone financial statements, which forms part of
this Annual Report.

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"), which,
inter-alia, prescribes clear thresholds limits, as approved
by the Board of Directors. The RPT Policy is available
on the website of your Company athttps://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. All members of the Audit Committee are
Independent Non-Executive Directors.

All related party transactions, including any subsequent
material modifications, are placed before the Audit
Committee for its review and approval. Prior omnibus
approval is obtained for related party transactions of
a repetitive nature and/ or transactions entered into in
the ordinary course of business and on an arm's length
basis, on a quarterly basis. Your Company has obtained
a report from a reputed accounting firm, providing
a fairness opinion on the arm's length nature of the
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 2026 were in the ordinary course
of the business and on an arm's length basis. In terms
of the Act and the Rules framed thereunder read with
the Listing Regulations, your Company did not enter
into any material related party transactions during the
financial year ended 31^st March 2026. Accordingly, the
disclosure of related party transactions in Form AOC-2,
as required under Section 134(3)(h) of the Act, 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 2026, there
was no material modification in the terms and conditions
of General Licence Agreements ("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 of

Directors, no element of risk was identified during the
financial year ended 31^st March 2026 that may threaten
the existence of your Company.

The Board of Directors of your Company evaluates
the risk management systems and sustainability
initiatives periodically and takes into account any
recommendation(s) of the Risk Management and
Sustainability Initiatives ("RMSI") Committee and the
Audit Committee. The RMSI Committee provides
oversight for the identification, monitoring and
mitigation of material risks, and supports management
in responding to evolving market and stakeholder
expectations. It periodically reviews the Risk
Management Policy formulated by the Company and
the risk assessment and minimization procedures and
sustainability initiatives of the Company.

During the financial year ended

31^st March 2026, the RMSI Committee was re-constituted.
Mr. Sidharth Kumar Birla, Independent Non-Executive
Director, was appointed as the Chairman of the RMSI
Committee with effect from 1^st April 2025, in place of
Mr. Suresh Narayanan, who ceased to be Chairman of
the RMSI Committee on 31^st March 2025 and continued
as a Member thereof. Also, Mr. Manish Tiwary, Chairman
and Managing Director, was appointed as a Member of
the RMSI Committee with effect from 1^st August 2025, in
place of Mr. Suresh Narayanan, who ceased as Member
of the RMSI Committee on 31^st July 2025.

As on 31^st March 2026, the RMSI Committee
comprised Mr. Sidharth Kumar Birla as Chairman and
Mr. Manish Tiwary, Mr. PR Ramesh, Ms. Anjali Bansal and
Ms. Suneeta Reddy as Members.

Risks and Opportunities

The sector continues to offer significant long-term
opportunities, supported by favourable demographics, rising
urbanisation, premiumisation in select segments and the
growing relevance of modern trade, e-commerce and quick
commerce. At the same time, the sector remains exposed
to commodity volatility, uneven rural recovery, climate and
monsoon variability, competitive intensity, evolving food
safety and labelling requirements, and rapid channel shifts.

Your Company is committed to creating long-term
value for stakeholders through sustainable growth
and enhanced resource efficiency. In line with this
commitment, key business risks and opportunities
are systematically identified, assessed and managed
on an ongoing basis to strengthen resilience and
support timely decision-making. Mitigation actions are
monitored periodically, and the Risk Management and
Sustainability Initiatives (RMSI) Committee reviews
progress periodically to provide oversight and guidance
on implementation and monitoring of mitigation actions
and responding to evolving business conditions.

Risks

Economic fluctuations and supply chain
disruptions

Macroeconomic volatility may adversely impact
consumer sentiment and discretionary spending,
potentially shifting demand toward value offerings and
necessitating timely adjustments.

Your Company manages inflationary and commodity-
price risks through a structured procurement and
cost-management framework, including continuous
monitoring of relevant indices, early identification of cost
trends, and efficiency initiatives across the value chain.
Focused cost-optimization programmes further enhance
resilience during periods of elevated input cost inflation.
Supply chain disruptions may arise from economic
slowdowns, inflation, currency volatility, geopolitical
developments, and natural disasters, and can affect raw
material availability, labour capacity and logistics costs.

Your Company's supply chain strategy is designed to
enhance resilience and agility, supported by strong
partnerships and technology enablement across
the value chain. These capabilities are continuously
strengthened to mitigate disruption risk, safeguard
operations and support sustainable growth.

Evolving consumer preferences

Consumer preferences continue to evolve due to
demographic shifts, global food trends and changing
consumption habits influenced by digital and social
media platforms. Demand for quality and convenience
is rising across metropolitan markets as well as smaller
towns and villages, with increasing expectations for
availability and ease of access.

Rising aspirations in both urban and rural markets are
elevating expectations for speed, convenience and a
seamless purchasing experience. Any delay in responding
to these shifts may impact competitiveness and growth.

In response, your Company continues to strengthen
its core brands and accelerate innovation aligned with
evolving consumer needs. Data analytics and consumer
research are leveraged to deepen insights and translate
them into products that address diverse taste profiles
and dietary preferences across geographies.

To enhance accessibility, your Company is expanding
its presence in underpenetrated small towns and large
villages, thereby broadening reach and strengthening
market penetration.

Food safety and quality

Food safety and product quality are fundamental
to maintaining consumer trust and protecting your
Company's reputation. In a competitive environment,
any lapse may have a disproportionate impact on brand
equity and consumer loyalty.

Your Company prioritizes consumer safety through
a comprehensive quality assurance framework, with
stringent controls applied across the value chain—from
raw material sourcing and manufacturing to finished
goods—to ensure consistent quality and compliance
with applicable standards.

A strong culture of quality and accountability is reinforced
through defined standards, training programmes
and ongoing engagement with employees and
relevant third parties, supporting ownership of quality
across operations.

A dedicated consumer complaint redressal mechanism
is in place to monitor and address food safety and
quality concerns in a timely manner, thereby reinforcing
consumer confidence and supporting consistent delivery
of high-quality products.

Environmental risk

The FMCG sector is exposed to climate-related
risks, including variability in monsoon patterns, yield
uncertainty and volatility in raw material prices. Such
risks may affect agricultural incomes, consumer demand
and trade dynamics, thereby increasing exposure to
environmental variability.

Your Company monitors its environmental footprint and
implements initiatives to reduce associated impacts. A
structured tracking framework supports measurement
of progress and continuous refinement of interventions,
while the RMSI Committee provides oversight of
compliance and sustainability execution.

To strengthen sustainability governance, your Company
has constituted a Sustainability Governance Council
chaired by the Chairman and Managing Director. The
Council comprises members of the Management
Committee and task-force leaders responsible for priority
sustainability programmes across five pillars: sustainable
sourcing; sustainable packaging; manufacturing and
logistics; brands, recipes and portfolio; and advocacy
and communication.

Cybersecurity and AI

Your Company's increasing reliance on digital platforms,
connected operations and third-party ecosystems
exposes it to cybersecurity threats, including unauthorized
access, malware, ransomware, data leakage and service
disruption. A significant incident could adversely affect
business continuity, financial performance, regulatory
compliance and stakeholder confidence.

The accelerated adoption of AI introduces additional
risk considerations, such as data privacy and protection,
model bias and integrity, vulnerabilities arising from
automated decision-making, and emerging threats
including prompt injection and deepfakes. These risks
may impact the reliability of outputs, the protection of

sensitive information and your Company's reputation if
not appropriately governed.

To mitigate these risks, your Company maintains
a cybersecurity and data governance framework
comprising preventive and detective controls, periodic
risk assessments, monitoring and incident response
processes, and employee awareness programmes. Your
Company also strengthens third-party risk management
and adopts a governance approach for AI use cases,
including appropriate data handling, access controls and
oversight to support responsible deployment.

Opportunities

Demographic trends and portfolio innovation

Favourable demographics, a young population and
evolving consumer aspirations continue to create
incremental growth opportunities for the FMCG
sector. Rising demand for health, convenience, taste,
nutrition and value-led propositions is expanding the
opportunity across multiple categories. Your Company
is strengthening innovation as a core strategic lever
through investments in its brands, targeted product
launches aligned to evolving demand, and continued
efforts to enhance the nutritional profile of its portfolio.
Leveraging science and nutrition-led capabilities, your
Company develops food solutions intended to meet the
needs of diverse consumer cohorts, including younger
and older populations.

Rural expansion and distribution strengthening

Rural India remains a meaningful long-term growth
opportunity, supported by low category penetration
in several segments, improving physical and digital
connectivity, and rising access to branded products. As
rural consumption gradually broadens, the opportunity
lies not only in deeper reach but also in building
relevance through appropriate packs, price points and
execution. This can support household penetration and
sustainable growth over time. Your Company continues
to strengthen distribution, affordability and execution
to deepen rural reach, improve availability and serve
evolving consumption needs across underpenetrated
markets. Technology and data analytics support the
generation of actionable insights and enable faster, more
decentralized and better-informed decision-making

Urban growth through channel and occasion
expansion

Rapid urbanization, rising disposable incomes and
evolving lifestyles are strengthening demand for
convenient, health-oriented and premium offerings in
metropolitan markets. Expansion of modern trade and
e-commerce is improving product discovery, availability
and personalization, while out-of-home occasions
continue to grow with increasing mobility and social

consumption. These trends provide an opportunity for
your Company to accelerate innovation, strengthen brand
salience and expand penetration in key urban channels.
These shifts are also enabling sharper channel-specific
portfolios, improved visibility and faster routes to market.

Premiumization and value-added categories

Premiumisation and value-added categories continue
to offer opportunities for category development and
mix improvement. As consumer needs become more
differentiated, there is increasing headroom for products
that offer superior experience, convenience, quality,
nutrition or specialised benefits. At the same time, the
opportunity remains strongest when supported by a
balanced portfolio that spans both mainstream and
premium segments.

Out-of-home consumption and on-the-go demand

Out-of-home consumption and on-the-go occasions
represents a meaningful growth opportunity, supported
by urbanization, lifestyle shifts and evolving consumption
habits. As consumers spend more time commuting,
travelling and socializing, demand for convenient,
high-quality on the go food and beverage options is
expected to increase. Your Company is well positioned
to capture this opportunity through offerings designed
for on-the-go consumption, premium out-of-home
experiences and impulse occasions. Continued
expansion in this segment may further strengthen
brand salience, consumer engagement, penetration and
incremental consumption

Exports and international market development

Exports provide an incremental growth opportunity,
supported by India's manufacturing base, improving food
processing capabilities and growing demand for branded
Indian products in international markets. Over time, this
can help companies diversify their market base, improve
capacity utilisation and extend brand presence beyond
domestic markets. Government support and access to
new geographies may further strengthen this opportunity.

AI-enabled efficiency and responsible adoption

AI and digital tools can support productivity across
forecasting, sourcing, manufacturing, supply
chain, revenue growth management and consumer
engagement. These capabilities can improve decision¬
making, strengthen execution and support better
resource allocation across the value chain. Over time,
responsible adoption can become an important enabler
of both efficiency and agility.

People productivity through AI-enabled
upskilling

Technology-enabled upskilling can improve productivity,
reduce time spent on routine tasks and enable teams
to focus on higher-value work. This also supports

faster learning, stronger cross-functional collaboration
and better use of data and digital tools in everyday
decision-making.

Talent development and future-ready capabilities

Your Company continues to invest in talent and future-
ready capabilities through skilling, upskilling and cross¬
functional development. Building these capabilities
remains important to support innovation, strengthen
execution and ensure the organisation remains agile in a
rapidly evolving operating environment.

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

In terms of 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 Directors, employees and connected persons, including
third parties such as auditors, consultants etc., who may
have access to UPSI pertaining to the Company, are
governed by the Code. The trading window is, inter-alia,
closed during the period of declaration of financial results
and occurrence of any material events, in accordance with
the PIT Regulations and the Code. To reinforce adherence
to the PIT Regulations, awareness sessions were organized
and informative e-mails were circulated from time to time
to Designated Persons to promote a strong compliance
culture. Mr. Pramod Kumar Rai, Company Secretary and
Head of Governance & Compliance, is designated as
the Compliance Officer of the Company under the PIT
Regulations and the Code.

Audit Committee

During the financial year ended 31^st March 2026, there
was no change in composition of the Audit Committee.

As on 31^st March 2026, the Audit Committee
comprised of Mr. PR Ramesh as Chairman and
Ms. Alpana Parida, Ms. Anjali Bansal and
Mr. Sidharth Kumar Birla as Members, all being
Independent Non-Executive Directors.

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

Vigil Mechanism

The Vigil Mechanism of your Company is governed by
significant documents, namely, the "Nestle Corporate
Business Principles", "The Nestle Management and
Leadership Principles", the "Nestle India Code of Business
Conduct" and the "Nestle India Vigil Mechanism/
Whistle-blower Policy". These documents are available
on the website of your Company athttps://www.nestle.
in/investors/policies. The Code/ Policy provides for
adequate safeguards against victimization of Directors
and employees who avail the mechanism and enables
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 provides an independent third party
operated toll-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 to
report potential instances of non-compliance with the
Nestle Corporate Business Principles or any practices
or actions believed to be inappropriate or illegal under
the Nestle India Code of Business Conduct, on a
confidential basis. The "SpeakUp Platform" can be
accessed through the website of the Company at
https://www.nestle.com/about/how-we-do-business/
report-compliance-concerns. Mr. Pramod Kumar
Rai, Company Secretary and Head of Governance &
Compliance, acts as the Nodal Officer of the Company
for overseeing and monitoring the Vigil Mechanism.

Further, your Company has appointed an Ombudsman
under the Infant Milk Substitutes Code ("Infant Code"),
enabling employees to report Infant Code-related
concerns directly, with adequate safeguards to protect
the identity of the reporting individual.

Your Company periodically sensitizes stakeholders about
the availability and use of the Vigil Mechanism and the
Ombudsman framework.

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

The 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 2026, relating
to 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 e-mail addressinvestor@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
internal members and an external member who has an
extensive experience in this field. During the financial
year under review, four (4) cases of sexual harassment
were reported, all of which were investigated & resolved
as per the provisions of the POSH, and no case remained
pending for more than ninety days. 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 athttps://
www.nestle.in/investors/policies.

During the financial year ended 31^st March 2026, 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 2026, your Company had transferred

H5,861,760.00, h2,985,360.00 and H7,334,950.00 to the
IEPF, being the unpaid and unclaimed dividend amount
pertaining to Final Dividend 2017 & First Interim Dividend
2018, Second Interim Dividend 2018 and Third Interim
Dividend 2018, 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 2026, your Company had transferred
177,390 equity shares of face value h1/- each, on which
the dividend(s) 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 seven (7) years on their respective due dates,
are available on the website of the Company athttps://
www.nestle.in/investors/stockandfinancials/dividends.
Mr. Pramod Kumar Rai, Company Secretary and Head of
Governance & Compliance, acts as the Nodal Officer of the
Company, in accordance with the provisions of IEPF Rules.

Credit Rating

Your Company has been awarded 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 awarded
the credit rating of A1 . The rating reflects strong degree of
safety and lowest credit risk.

Confirmation under the Maternity Benefit Act,
1961

During the financial year ended 31^st March 2026, your
Company was in compliance with the provisions relating
to the Maternity Benefit Act, 1961, as amended.

Other Disclosures

During the financial year ended 31^st March 2026,
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) issue of debentures/ bonds/ warrants/ convertible/
non-convertible securities; (e) raising of funds through
preferential allotment or qualified institutional placement;
(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.

On behalf of the Board of Directors
Manish Tiwary

Date: 21^st April 2026 Chairman and Managing

Place: Gurugram, Haryana Director

1

In accordance with the 'Ind AS 33 - Earnings Per Share; the figures
of Earnings Per Share for previous periods presented have been
restated to give effect to the allotment of the bonus equity shares.

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