To the Members of Akzo Nobel India Limited
Report on the Audit of the Standalone Financial StatementsOpinion
1. We have audited the accompanying Standalone Financial Statements of Akzo Nobel India Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2025, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including material accounting policy information and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in
the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2025, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Key audit matter
A. Revenue recognition including variable consideration
[Refer to Note 18 (Revenue from operations) to the Standalone Financial Statements]
The Company recognises revenue when control of the goods is transferred to the customer at an amount that reflects the net consideration, which the Company expects to receive for those goods from customers. The sales arrangements are voluminous and in determining the sales price, the Company considers the effects of variable consideration, which requires estimation, leading to complexities and application of significant effort and judgment.
Considering these significant judgements, estimates and the risk associated with revenue recognition, the matter has been determined to be a key audit matter.
B. Assessment of ongoing income tax and indirect tax litigations
[Refer to Note 27(b) (Contingent liabilities), Note 7 [Noncurrent tax assets (net)] and Note 13 (Provisions) to the Standalone Financial Statements]
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the
Act. Our responsibilities under those Standards are further described in the “Auditor's Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
How our audit addressed the key audit matter
Our audit procedures included the following:
• Obtained an understanding of the process and internal financial controls designed and implemented by the management and tested the design and operating effectiveness of relevant internal financial controls;
• We tested sales of goods transactions on a sample basis,
by comparing the underlying sales invoices, sales orders and dispatch documents to assess whether revenue was recognised appropriately.
• We assessed the underlying assumptions and estimates used for determination of variable consideration.
• We tested rebates and discounts provided to the customers on a sample basis, comparing the same with underlying approvals and terms of the contracts and schemes offered to customers.
• We assessed the adequacy of the disclosures made in the Standalone Financial Statements in respect of revenue recognition.
Our procedures included the following:
• Obtained an understanding of the process and internal financial controls designed and implemented by the management and tested the design and operating effectiveness of relevant internal financial controls;
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Key audit matter
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How our audit addressed the key audit matter
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As at 31 March 2025, the Company is subjected to a
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Obtained an understanding of the tax litigations through
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number of significant income tax litigations relating to
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enquiry with the management, including the significant
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disallowance of expenses, transfer pricing adjustments
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developments, additions and settlements during the year
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etc. and indirect tax litigations relating to various indirect
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and subsequent to the year-end;
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tax statutes (together referred to as “tax litigations”). These
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Inspected demand notices received from the tax authorities
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matters are in appeal before various judicial forums.
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and evaluated the Company's response to those matters;
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The eventual outcome of tax litigations is uncertain and
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Obtained independent confirmations from the Company's
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the positions taken by the management are based on the
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external tax experts including the status of the significant
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application of significant judgement and estimation. The
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tax litigations, their views regarding the likely outcome and
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assessment of the tax matters requires application and interpretation of tax laws and reference to applicable judicial
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magnitude of the potential exposure;
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pronouncements.
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Involved specialists to evaluate the management's assessment on the likely outcome and potential
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Based on management judgement and advice from external
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magnitude on complex or significant tax matters as
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legal and tax consultants and considering the merits of the case, the Company has recognised provisions wherever
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considered necessary; and
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required and for the balance matters, where the outflow of
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Assessed the adequacy of the Company's disclosures in
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economic resources is not probable, the tax litigations have
been disclosed as contingent liabilities in the Standalone Financial Statements unless the possibility of outflow of resources is considered to be remote.
We identified this matter as a key audit matter as the ultimate outcome of matters is uncertain and the positions taken by the management are based on the application of significant judgement, related legal advice including those relating to interpretation of laws and regulations.
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respect of tax litigations.
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C. Appropriateness of the classification and valuation of
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Our procedures included the following:
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disposal groups held for sale
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Obtained an understanding of management's process
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[Refer to Note 9.1 (Assets classified as held for sale
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around identifying and classifying assets/ disposal groups
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and Liabilities relating to assets classified as held for
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as held for sale.
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sale) to the Standalone Financial Statements]
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Evaluated appropriateness of the classification
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During the year, the Company announced its intention to
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of the disposal groups based on the criteria set
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sell its Powder Coatings Business and the International
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forth in Ind AS 105.
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Research Center (together, the “disposal groups”) as a going concern, which have been classified as “Assets classified as held for sale and Liabilities relating to assets classified as held for sale” in accordance with Ind AS
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Perused the approval of the Audit Committee and Board of Directors of the Company and read the minutes of their meetings.
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105 ‘Non-current Assets Held for Sale and Discontinued
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Inspected the Company's correspondence (i.e., binding
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Operations' as at 31 March 2025.
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offers etc. for the sale of respective disposal groups) with
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As at 31 March 2025, the carrying amount of these assets
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the potential buyer.
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was H 3,293 million, representing approximately 11% of
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Evaluated management's assessment of whether the
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the total assets of the Company and the carrying amount
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disposal groups held for sale were measured at the lower of
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of these liabilities was H 811 million, representing 5% of the total liabilities of the Company.
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the carrying amount and fair value less cost to sell.
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Perused the valuation report obtained by the management
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The classification and valuation of disposal groups in
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from a valuation expert (“management's expert”) and
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accordance with Ind AS 105 was considered to be a key
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evaluated the independence, competence, capabilities and
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audit matter because of the complexities involved and significant management judgement, including in respect
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objectivity of the management's expert.
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of assessment of the likelihood of shareholders' approval
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Evaluated the appropriateness of the basis for
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for the proposed disposals, determination of the dates of
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management's determination of the fair value less costs
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classification of the non-current assets as held for sale and
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to sell, including assessing the methodology used
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the valuation of the disposal groups at the lower of carrying
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by management's expert and corroborating the key
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amount and fair value less costs to sell.
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assumptions, with the involvement of our valuation expert, wherever considered necessary.
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Assessed the adequacy of the disclosures in the Standalone
Financial Statements.
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Other Information
5. The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Standalone Financial Statements and our auditor's report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged With Governance for the Standalone Financial Statements
6. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the Standalone Financial Statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
9. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and
content of the Standalone Financial Statements,
including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor's Report) Order,
2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended). Further, in the absence of sufficient appropriate audit evidence, we are unable to verify whether the backup of books of account and other books and papers maintained in electronic mode has been maintained on a daily basis on servers physically located in India during the period 1 April 2024 to 25 March 2025.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of
Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2025, taken
on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025, from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 14(b) above on reporting under Section 143(3)(b) and paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
(g) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,
2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 27 to the Standalone Financial Statements;
ii. The Company was not required to recognise a provision as at 31 March 2025 under the
applicable law or Indian Accounting Standards, as it does not have any material foreseeable losses on long-term contracts. The Company did not have any long-term derivative contracts as at 31 March 2025.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that,
to the best of its knowledge and belief, as disclosed in Note 38(vi) to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding,
under sub-clause (a) and (b) contain any material misstatement.
whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38(vi) to the financial statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 38(vi) to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38(vi) to the financial statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused
us to believe that the representations
v. The dividend declared and paid by the Company during the year is in compliance with Section 123 of the Act.
vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software, except that (a) the audit trail at the application level is not maintained in case of modification by certain users with specific access and (b) the audit log of modification at the database level does not contain pre-modified values and the changes made by certain users. During the course of performing our procedures, other than the aforesaid instances of audit trail not maintained where the question of our commenting does not arise, we did not notice any instance of audit trail feature being tampered with. Further, the audit trail, to the extent maintained in the prior year, has been preserved by the Company as per the statutory requirements for record retention.
15. The Company has paid/ provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Amitesh Dutta
Partner
Place: Gurugram Membership Number: 058507
Date: 14 May 2025 UDIN: 25058507BMOCAU6115
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