DRAFT LETTER OF OFFER

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This Letter of Offer is being sent to you as a registered Equity Shareholder(s) of Akzo Nobel India Limited, as on the Record Date in accordance with Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998, as amended. If you require any clarifications about the action to be taken, you may consult your stock broker or your investment consultant or the Manager to the Buyback (ICICI Securities Limited) or the Registrar to the Buyback (C B Management Services (P) Ltd.)

AKZO NOBEL INDIA LIMITED Registered Office: Geetanjali Apartment, 1st Floor, 8B, Middleton Street, Kolkata 700 071, India. Tel. No.: +91 33 2226 7462, Fax No.: +91 33 2227 7925 | E-mail: investor.india@akzonobel.com

Corporate Office: DLF Cyber Terraces, Building No 5, Tower A, 20th Floor, Cyber City, DLF Phase III, Gurgaon 122 002, India | Tel. No.: +91 124 254 0400, Fax No.: +91 124 254 0849

Contact Person: Mr. R. Guha, Company Secretary, Tel. No.: +91 124 254 0400, Fax No.: +91 124 254 0849, E-mail: r.guha@akzonobel.com

Cash offer to Buyback up to maximum of 13,00,000 fully paid-up Equity Shares of Rs.10 each, at a price of Rs. 920 (Rupees Nine Hundred and Twenty only) per share for an aggregate maximum amount of Rs.1,19,60,00,000 (Rupees One hundred nineteen crores and sixty lakh only) which represents 8.7% of the aggregate of Company’s paid-up Equity Share capital and Free Reserves as on March 31, 2012, through the Tender Offer process, on a proportionate basis. The Shares proposed to be bought back constitute 3.5% of issued, subscribed and paid up Equity Capital of the Company. This Letter of Offer is being sent to the Equity Shareholder(s) / Beneficial Owner(s) of Equity Shares of the Company as on the Record Date i.e. June 08, 2012. The payment of consideration shall be made through NECS (subject to availability of all information for crediting the funds), demand drafts / pay order, or similar instruments payable at par at all the centers where the Company is accepting applications. The Buyback Offer is pursuant to Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 for the time being in force including any statutory modifications and amendments from time to time including SEBI (Buy-back of Securities) (Amendment) Regulations, 2012 as well as in accordance with provisions of Sections 77A, 77AA and 77B and all other applicable provisions, if any, of the Companies Act, 1956, as amended (the “Act”) and in accordance with the provisions contained in the Article 3A of the Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary, from time to time from statutory authorities including but not limited to Securities and Exchange Board of India, Stock Exchanges, Reserve Bank of India, etc. A copy of the Public Announcement dated May 23, 2012 issued on May 23, 2012 and this Letter of Offer (including the Form of Acceptance-cum-Acknowledgement) is expected to be available at the SEBI website (www.sebi.gov.in). The Form of Acceptance-cum-Acknowledgement is enclosed together with this document. Equity Shareholders are advised to refer to Clause 17 on Details of the Statutory Approvals and Clause 21 on Note on Taxation before tendering their Shares in the Buyback.

BUYBACK OPENS ON: JUNE 22, 2012 (FRIDAY) BUYBACK CLOSES ON: JULY 05, 2012 (THURSDAY)

LAST DATE / TIME OF RECEIPT OF COMPLETED APPLICATION FORMS: 5PM, JULY 05, 2012 (THURSDAY) MANAGER TO THE BUYBACK REGISTRAR TO THE BUYBACK

ICICI Securities Limited ICICI Centre, H.T. Parekh Marg, Churchgate, Mumbai – 400 020, Maharashtra, India Tel No.: +91 22 2288 2460 Fax No.: +91 22 2282 6580 Email: akzonobel.buyback@icicisecurities.com SEBI Registration Number: INM000011179 Validity Period: Valid till July 08, 2013 Contact Person : Mr. Amit Joshi / Mr. Vishal Kanjani

C B Management Services (P) Limited P-22 Bondel Road Kolkata 700019, West Bengal, India Tel No.: +91 33 40116700 Fax No.: +91 33 40116739 Email : akzobuyback@cbmsl.com SEBI Registration Number: INR000003324 Validity Period: Currently Pending Renewal with SEBI* Contact Person : Mr. Shankar Ghosh

* C B Management Services (P) Limited has made an application on May 13, 2011 with SEBI for renewal of its certificate of registration which was valid until August 15, 2011. SEBI has, by its letter dated February 03, 2012, communicated to C B Management Services (P) Limited that as it has filed the renewal application three months before the expiry of registration in compliance with SEBI Circular No. SEBI/MIRSD/DR-2/SRP/Cir-2/2005 dated January 4, 2005, it can continue to carry on activities as registered intermediary after expiry till SEBI advises otherwise. Till the date of this Draft Letter of Offer, the Registrar to the Buyback has not received any other communication from SEBI in this regard.

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TABLE OF CONTENTS

Sr. No. Particulars Page No. 1. SCHEDULE OF ACTIVITIES 3 2. DEFINITION OF KEY TERMS 3 3. DISCLAIMER CLAUSE 4 4. TEXT OF THE RESOLUTION PASSED AT THE BOARD MEETING 5 5. DETAILS OF THE PUBLIC ANNOUNCEMENT 8 6. DETAILS OF THE BUYBACK 9 7. AUTHORITY FOR THE BUYBACK 9 8. NECESSITY OF THE BUYBACK 10 9. MANAGEMENT DISCUSSION AND ANALYSIS OF THE LIKELY IMPACT OF

BUYBACK ON THE COMPANY 10

10. BASIS OF CALCULATING THE BUYBACK PRICE 11 11. SOURCES OF FUNDS FOR THE BUYBACK 11 12. DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT DEPOSITED THEREIN 11 13. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN 12 14. BRIEF INFORMATION OF THE COMPANY 13 15. FINANCIAL INFORMATION ABOUT THE COMPANY 17 16. STOCK MARKET DATA 18 17. DETAILS OF THE STATUTORY APPROVALS 19 18. DETAILS OF THE REGISTRAR TO THE BUYBACK AND COLLECTION CENTRES 20 19. PROCESS AND METHODOLOGY FOR THE BUYBACK 21 20. PROCEDURE FOR TENDER OFFER AND SETTLEMENT 24 21. NOTE ON TAXATION 28 22. DECLARATION BY THE BOARD OF DIRECTORS 33 23. AUDITOR’S CERTIFICATE 34 24. DOCUMENTS FOR INSPECTION 34 25. DETAILS OF THE COMPLIANCE OFFICER 35 26. DETAILS OF THE REMEDIES AVAILABLE TO THE SHAREHOLDERS / BENEFICIAL

OWNERS 35

27. DETAILS OF INVESTOR SERVICE CENTRES 35 28. DETAILS OF THE MANAGER TO THE BUYBACK 36 29. DECLARATION BY THE DIRECTORS REGARDING AUTHENTICITY OF THE

INFORMATION IN THE OFFER DOCUMENT 37

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1. SCHEDULE OF ACTIVITIES

Activity Day Date Date of Board Meeting approving the Buyback Monday May 21, 2012 Date of Public Announcement for Buyback Wednesday May 23, 2012 Record Date for determining the Entitlement and the names of Eligible Shareholders Friday June 08, 2012 Buyback opens on / Date of Opening of Buyback Friday June 22, 2012 Buyback closes on / Date of Closing of Buyback Thursday July 05, 2012 Last date of verification Monday July 16, 2012 Last date of intimation regarding acceptance / non- acceptance of tendered Shares Monday July 16, 2012 Last date of dispatch of consideration / share certificate(s) / demat instruction(s) Monday July 16, 2012 Last date of Extinguishment of Shares Monday July 23, 2012 2. DEFINITION OF KEY TERMS Acceptance Acceptance of Equity Shares, tendered by Eligible Persons in the Buyback process Act The Companies Act, 1956, as amended Additional Shares / Additional Equity Shares

Additional Equity Shares tendered by an Eligible Person over and above the Buyback Entitlement of such Shareholder; Calculated as the difference between the number of Shares actually tendered by an Eligible Person and the number of Shares, as per his Buyback Entitlement

Akzo Nobel India Limited / Company / the Company

Akzo Nobel India Limited

Authorized Committee Committee for Banking and Other Authorities of the Board of Directors of Akzo Nobel India Limited, authorized for the purposes of the Buyback

Board Board of Directors of the Company, or the Authorized Committee for the purpose of the Buyback

BSE / Bombay Stock Exchange BSE Limited Buyback Entitlement The number of Equity Shares that a Shareholder is entitled to tender in the Buyback Offer,

based on the number of Equity Shares held by that Shareholder, on the Record date and the Ratio of Buyback applicable in the category, in which such Shareholder belongs to

Buyback Offer / Buyback / Offer Offer by Akzo Nobel India Limited to buy back up to maximum of 13,00,000 fully paid-up Equity Shares of face value of Rs. 10 each at a price of Rs. 920 per Equity Share from the Equity Shareholders of the Company through Tender Offer process, on a proportionate basis

CDSL Central Depository Services (India) Limited DLOF/ Draft Letter of Offer/ Draft Offer Letter

Draft Letter of Offer

DP Depository Participant Eligible Person (s) Person(s) eligible to participate in the Buyback Offer and would mean all Equity

Shareholders / Beneficial Owner(s) of Equity Shares of the Company as on Record Date i.e. June 08, 2012

Equity Shares / Shares Fully paid up Equity Shares of face value of Rs. 10 each of Akzo Nobel India Limited Escrow Account The Escrow Account opened with ICICI Bank Form / Tender Form Form of Acceptance–cum–Acknowledgement ICICI Securities Limited / ICICI Securities / Manager to the Buyback

ICICI Securities Limited

Letter of Offer / LoF / Offer Document

Letter of Offer

Non-Resident Shareholders Includes Non-Resident Indians (NRI), Foreign Institutional Investors (FII) and erstwhile Overseas Corporate Bodies (OCB)

NECS National Electronic Clearing Services

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NSDL National Securities Depository Limited NSE / National Stock Exchange National Stock Exchange of India Limited Offer Price / Buyback Price Price at which Equity Shares will be bought back from the Shareholders i.e Rs. 920 per

fully paid up Equity Share, payable in cash Offer Size / Buyback Size Number of Equity Shares proposed to be bought back (i.e. 13,00,000 Equity Shares of Rs.

10 each) multiplied by the Offer Price (i.e. Rs. 920 per Equity Share) aggregating to Rs.1,19,60,00,000 (Rupees One hundred nineteen crores and sixty lakh rupees only)

PA / Public Announcement Public Announcement regarding the Buyback dated May 23, 2012 issued in Business Standard (English newspaper), Business Standard (Hindi newspaper) and Aajkaal (Bengali newspaper) on May 23, 2012

Persons in Control Promoters, Promoter Group, the Directors of the Promoter and Persons Acting in concert, including such persons as have been disclosed under the filings made by the Company from time to time under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, (“SEBI Takeover Regulations”)

RBI Reserve Bank of India Record Date The date for the purpose of determining the entitlement and the names of the

Shareholders, to whom the Letter of Offer and Tender Offer Form will be sent i.e. June 08, 2012

Registrar to the Offer / Registrar to the Buyback

C B Management Services (P) Limited

Regulations / SEBI Regulations / SEBI Buyback Regulations / Buyback Regulations

The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, for the time being in force including any statutory modifications and amendments from time to time including Securities and Exchange Board of India (Buy-back of Securities) (Amendment) Regulations, 2012

SEBI The Securities and Exchange Board of India Small Shareholder A Shareholder, who holds Shares whose market value, on the basis of closing price on the

recognized stock exchange registering the highest trading volume, as on Record Date i.e. June 08, 2012, is not more than two lakh rupees.

Stock Exchanges BSE and NSE 3. DISCLAIMER CLAUSE As required, a copy of this Letter of Offer has been submitted to the Securities and Exchange Board of India (SEBI). It is to be distinctly understood that submission of the Letter of Offer to SEBI should not, in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI, does not take any responsibility either for the financial soundness of the Company to meet the buy back commitments or for the correctness of the statements made or opinions expressed in the offer document. The Manager to the Buyback, M/s. ICICI Securities Limited has certified that the disclosures made in the Offer Document are generally adequate and are in conformity with the provisions of Companies Act, 1956 and SEBI (Buy Back of Securities) Regulations, 1998, as amended. This requirement is to facilitate investors to take an informed decision for tendering their Shares in the Buyback. It should also be clearly understood that while the Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the Offer Document, the Manager to the Buyback is expected to exercise due diligence to ensure that the Company discharges its duty adequately in this behalf and towards this purpose, the Manager to the Buyback, M/s. ICICI Securities Limited has furnished to SEBI a Due Diligence Certificate dated May 30, 2012, in accordance with SEBI (Buyback of Securities) Regulations, 1998, as amended which reads as follows: “We have examined various documents and materials contained in the annexure to this letter, as part of the due-diligence carried out by us in connection with the finalization of the Public Announcement and the Letter of Offer. On the basis of such examination and the discussions with the Company, we hereby state that:

- The Public Announcement and the Letter of Offer are in conformity with the documents, materials and papers relevant to the Buyback offer;

- All the legal requirements connected with the said offer including SEBI (Buyback of Securities) Regulations, 1998, as amended, have been duly complied with

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- The disclosures in the Public Announcement and the Letter of Offer are, to the best of our knowledge, true, fair and adequate in all material respects for the shareholders of the Company to make a well informed decision in respect of the captioned Buyback offer.

- Funds used for buy back shall be as per the provisions of the Companies Act.” The filing of Offer Document with SEBI, does not, however, absolve the Company from any liabilities under the provisions of the Companies Act, 1956, as amended or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed Buyback. Promoters / Directors declare and confirm that no information / material likely to have a bearing on the decision of investors has been suppressed / withheld and / or incorporated in the manner that would amount to mis-statement / misrepresentation and in the event of it transpiring at any point of time that any information / material has been suppressed / withheld and / or amounts to a mis-statement/ mis-representation, the Promoters / Directors and the Company shall be liable for penalty in terms of the provisions of the Companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998, as amended. Promoters / Directors also declare and confirm that funds borrowed from Banks and Financial Institutions will not be used for the Buyback. 4. TEXT OF THE RESOLUTION PASSED AT THE BOARD MEETING The Buy Back through a tender offer has been duly authorised by the resolution passed by the Board of Directors of the Company at their meeting held on May 21, 2012. The Extracts of the Minutes of the Board Meeting held at Gurgaon are as follows: “RESOLVED THAT pursuant to the provisions of Article 3A of the Articles of Association of the Company and in accordance with the provisions of Sections 77A, 77AA, 77B and all other applicable provisions, if any, of the Companies Act, 1956 (“Act”) and the provisions contained in the Securities and Exchange Board of India (Buy-back of Securities) Regulations 1998 (“Buyback Regulations”) (including the amendments made through the SEBI (Buy-back of Securities) (Amendment) Regulations, 2012, and any statutory modification(s) or re-enactment of the Act or Rules framed thereunder from time to time or Buy-back Regulations, for the time being in force) as also such other approvals, permissions and sanctions of Securities and Exchange Board of India (“SEBI”) and / or other authorities, institutions or bodies (“the appropriate authorities”), as may be necessary and subject to such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as "the Board" which expression shall be deemed to include the “Committee For Banking and Other Authorities of the Board” which the Board has authorized to exercise its powers, including the powers conferred by this resolution), the consent be and is hereby accorded to purchase by way of buy-back offer up to 13,00,000 fully paid-up Equity Shares of Rs. 10 each of the Company constituting approximately 3.5% of the fully paid-up Equity Share capital of the Company at a price of Rs. 920/- (Rupees Nine hundred and twenty only) per equity share payable in cash for an aggregate amount of Rs. 1,196 million (Rupees One thousand one hundred and ninety six million only) being 8.7% of the fully paid-up Equity Share capital and free reserves as per the audited accounts of the Company for the financial year ended March 31, 2012 through the Tender Offer mechanism (hereinafter referred to as "the Buyback"); RESOLVED FURTHER that the Company may implement the Buy-back of up to 8.7% of its paid-up Equity Capital and free reserves of the Company as per the approval granted by way of this resolution under proviso to section 77A (2)(b) of the Companies Act, 1956, and in accordance with the SEBI Buyback Regulations. RESOLVED FURTHER that as required by Regulation 6 of the SEBI Buyback Regulations, the Company may buyback Equity Shares from the existing shareholders on a proportionate basis, provided fifteen percent of the number of Shares which the Company proposes to buy back or number of Shares entitled as per the shareholding of small shareholders, whichever is higher, shall be reserved for the small shareholders, as defined in the SEBI Buyback Regulations.

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RESOLVED FURTHER that the proposed Buyback be implemented from the existing shareholders other than those who are Promoters, Promoters Group and Persons Acting in concert (such shareholders herein after collectively as “Persons in Control”) that persons in control will be such persons as have been disclosed under the filings made by the Company from time to time under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations 1997 (“SEBI Takeover Regulations”) as the Board may consider appropriate, from out of its free reserves and/or Share Premium Account and/or cash balances and/ or internal accruals and/or such other sources or by such mechanisms as may be permitted by Law, and on such terms and conditions as the Board may decide from time to time, and in the absolute discretion of the Board, as it may deem fit. RESOLVED FURTHER that confirmation is hereby made by the Board of Directors that:

• All Equity Shares of the Company are fully paid up;

• that the aggregate amount of the Buy-back i.e. Rs. 1,196 million, does not exceed 10% of the total paid-up capital and free reserves as per the audited balance sheet as on March 31, 2012;

• that the number of Shares proposed to be purchased under the Buy-back i.e. 13,00,000 Equity Shares, does not

exceed 25% of the total number of Shares in the paid-up Equity Capital as per the audited balance sheet as on March 31, 2012;

• That there are no defaults subsisting in the repayment of Deposits, redemption of debentures or Preference Shares or

repayment of term loans to any financial institutions or banks;

• that the debt equity ratio of the Company after the buy-back will be well within the limit of 2:1 as prescribed under the Act.

RESOLVED FURTHER that as required by Clause (x) of Part A of Schedule II under Regulation 5(1) of the SEBI Buyback Regulations, the Board hereby confirms that based on such full inquiry conducted into the affairs and prospects of the Company, and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Act, the Board of Directors has formed an opinion that:

• Immediately following the date of the Board meeting held on May 21, 2012, there are no grounds on which the Company can be found unable to pay its debts;

• As regards the Company’s prospects for the year immediately following the date of the Board meeting held on May 21,

2012, and having regard to the Board’s intention with respect to the Management of Company’s business during that year and to the amount and character of the financial resources which will in the Board’s view be available to the Company during that year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date; and

• In forming an opinion as aforesaid, the Board of Directors have taken into account the liabilities, as if the Company

were being wound up under the provisions of the Act (including prospective and contingent liabilities) RESOLVED FURTHER that the buyback is being proposed in keeping with the Company’s desire to enhance overall shareholders value and the buyback would lead to reduction in total number of Equity Shares.

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RESOLVED FURTHER that the powers of the Board in respect of buyback be and is hereby delegated to the Committee For Banking and Other Authorities (‘CFBOA’) comprising of Mr. Amit Jain, Managing Director, Mr. Partha Sarathi Basu, Wholetime Director and the CFBOA be authorized to take all necessary actions for executing the actions relating to the Buyback as above. RESOLVED FURTHER that the CFBOA be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion deem necessary, expedient, usual or proper, including but not limited to finalizing the terms of buyback like the aggregate amount to be utilized for the buyback including the price and the number of Shares to be bought back within the statutory limits, the mechanism for the buyback, the timeframe for completion of the buyback, Escrow arrangements, opening Bank accounts for this purpose and authorizing persons to operate the said account, appointment of Merchant Bankers, Brokers, Escrow Agents, Registrars, Solicitors, Depository Participants, Scrutinizer, Compliance Officer and such other intermediaries / agencies for the implementation of the Buyback and carry out incidental documentation and to prepare applications and submit to the Appropriate Authorities for their requisite approvals as also to initiate all necessary actions for the preparation and issue of various documents including public announcement, letter of offer, declaration of solvency, extinguishment of Shares and certificate of extinguishment required to be filed in connection with the Buyback on behalf of the Board. RESOLVED FURTHER that the CFBOA be and is hereby authorized to affix the Common Seal of the Company on relevant documents required to be executed for the buyback of Shares in the presence of both the Directors who shall sign the same and countersigned by Mr. Rajasekaran Guha, Company Secretary. RESOLVED FURTHER that the CFBOA be and is hereby authorized to delegate all or any of the authorities conferred on it to any Officer(s) / Authorized Signatory(ies) of the Company. RESOLVED FURTHER that Mr. Rajasekaran Guha, Company Secretary be and is hereby appointed as the Compliance Officer for the Buyback. RESOLVED FURTHER that for the purpose of giving effect to this resolution the CFBOA is hereby authorized to give such directions as may be necessary or desirable and to settle any questions or difficulties whatsoever that may arise in relation to the Buyback. RESOLVED FURTHER that the buyback is subject to:

• the buyback not causing the Company to be in violation of the conditions for continuous listing prescribed in terms of Clause-40A of the Listing Agreement between the Company and the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE and together with BSE, the “Stock Exchanges”) i.e. maintaining the minimum public shareholding at 25%;

• the Equity Shares that may be bought back do not exceed the maximum number of Shares permissible;

• the aggregate consideration payable pursuant to the buyback not exceeding the Offer size ; and

• complying with the statutory and regulatory timelines in respect of the buyback, on the terms and conditions as may be

decided by the Board and in such manner as prescribed under the Act and / or the Regulations and any other applicable Laws.

RESOLVED FURTHER that the Company shall not Buyback the locked-in Equity Shares, if any and non-transferable Equity Shares, if any till the pendency of the lock-in or till the Equity Shares become transferable.

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RESOLVED FURTHER that Buyback from shareholders who are persons resident outside India including the Foreign Institutional Investors, Overseas Corporate Bodies, shall be subject to such approvals as required including approvals from Reserve Bank of India under Foreign Exchange Management Act, 1999 and the Rules and Regulations framed thereunder. RESOLVED FURTHER that as per the provisions of Section 77A (8) of the Act, the Company will not issue fresh Equity Shares within a period of 6 months after the completion of the buy-back except by way of bonus Shares or Shares issued in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of Preference Shares or debentures into Equity Shares. RESOLVED FURTHER that nothing contained herein shall confer any right on any shareholder to offer and / or any obligation on the Company or the Board or the CFBOA to buyback any Shares and / or impair any power of the Company or the Board or the CFBOA to terminate any process in relation to such buyback, if so permissible by Law. RESOLVED FURTHER that the Company does maintain a register of securities bought back wherein details of Equity Shares bought back, consideration paid for the Equity Shares bought back, date of cancellation of Equity Shares and date of extinguishing and physically destroying of Equity Shares and such other particulars as may be prescribed, shall be entered and that the Company Secretary of the Company be and is hereby authorised to authenticate the entries made in the said register. RESOLVED FURTHER that any Director and the Company Secretary be and are hereby severally authorized to send the necessary intimations to the Stock Exchanges in regards to this resolution, as may be required under the listing agreements” The CFBOA which is the Authorized Committee for the Buyback in its meeting held on May 21, 2012 at Gurgaon, after the Board meeting, initiated necessary actions / steps for the purpose of the Buyback and passed the following resolutions: “RESOLVED THAT the Public Announcement in respect of buy-back by the Company up to 13,00,000 fully paid-up Equity Shares of Rs. 10 each of the Company constituting 3.5% of the fully paid-up Equity Share capital of the Company at a price of Rs. 920/- (Rupees Nine hundred and twenty only) per equity share payable in cash for an aggregate amount of Rs. 1,196 million (Rupees One thousand one hundred and ninety six million only) through the Tender Offer method (the Buyback), in the form attached hereto, has been taken on record and is hereby approved. RESOLVED FURTHER THAT ICICI Securities Limited be and is hereby appointed as the Manager to the Buyback, on the terms as set out in their engagement letter dated May 18, 2012, placed before the meeting be and is hereby approved and Mr. R Guha, Company Secretary is authorized to accept the same. RESOLVED FURTHER THAT C B Management Services Private Limited, Kolkata, the Registrar and Transfer Agents of the Company, be designated as Registrar for the Buyback. RESOLVED FURTHER THAT the Company Secretary is hereby authorized to send the necessary intimations to the Stock Exchanges in regards to this resolution, as may be required under the listing agreements.” 5. DETAILS OF THE PUBLIC ANNOUNCEMENT As per Regulation 8(1) of the SEBI Buyback Regulations, the Company has made a Public Announcement dated May 23, 2012 for the Buyback of Equity Shares in Business Standard (English newspaper), Business Standard (Hindi newspaper) and Aajkaal (Bengali newspaper) on May 23, 2012, within two working days from the date of resolution of the Board meeting approving the Buyback, on May 21, 2012.

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6. DETAILS OF THE BUYBACK Akzo Nobel India has announced the Buyback of up to maximum of 13,00,000 fully paid up Equity Shares of Rs.10 each of the Company, from the Existing Shareholder(s) / Beneficial Owner(s) of Equity Shares of the Company through the Tender Offer process in accordance with Sections 77A, 77AA, 77B and other applicable provisions of the Act and the SEBI Buyback Regulations at a price of Rs. 920 per share (Rupees Nine hundred and twenty only) payable in cash for an aggregate maximum amount of Rs.1,19,60,00,000 (Rupees One hundred nineteen crores and sixty lakh only). The Buyback Size represents 8.7% of the aggregate of the Company’s paid-up Equity Share Capital and free reserves as on March 31, 2012 which stands at Rs. 137580 lakhs. At the Buyback Price of Rs. 920 per fully paid-up Equity Share, the Company shall buy back 13,00,000 fully paid-up Equity Shares of Rs.10 each representing 3.5% of the total paid up Equity Capital. The Company will adopt the tender offer route for the purpose of Buyback. None of the Persons in Control of the Company intends to tender their Shares in the Buyback and will not transact in the Shares of the Company during the period of the Buyback. The particulars of the Equity Shares of the Company held by the Persons in Control of the Company, as on the date of this Draft Letter of Offer is given below:

Promoters and Promoter Group Imperial Chemical Industries Limited, UK 21,967,544 Equity Shares Akzo Nobel Coatings International B.V. 8,626,649 Equity Shares* Akzo Nobel Chemicals International B.V. 2,439,847 Equity Shares* Akzo Nobel (C) Holdings B.V. 291 Equity Shares* Panter BV 5 Equity Shares* Directors of the Promoter Nil Equity Shares Other Directors of the Company Nil Equity Shares Total Shareholding of Persons in Control 33,034,336 Equity Shares* Total Outstanding Shares of the Company 47,960,314 Equity Shares* % Shareholding of Persons in Control of the Company 68.88 %*

* This is as per Share allotment resolution passed in the Board Meeting dated May 21, 2012. Necessary formalities in connection with credit of Shares to the

respective demat accounts or issue of share certificates, as the case may be, is currently in process.

The Company confirms that one of the Promoters (Imperial Chemical Industries Limited, UK) purchased total 11,91,331 Shares (3.23% of the Equity Share capital on the day of this purchase) during six months preceding May 21, 2012, being the date of Board Meeting approving the Buyback. This purchase was completed through an off-market transaction on January 31, 2012 at a price of Rs. 855 per Equity Share. Other than as disclosed above, none of the Promoters, Promoter Group, Directors of the Promoter or Persons who are in control of the Company have purchased or sold Shares of the Company during 12 months preceding May 21, 2012, being the date of Board Meeting approving the Buyback. Further, the Persons in Control have not purchased any Equity Shares of the Company from the date of Board Meeting till the date of this Draft Letter of Offer. Assuming response to the Buyback is to the extent of 100% (Full Acceptance), the aggregate shareholding of the Persons in Control, post Buyback will increase to 70.80% of the post Buyback Equity Share Capital of the Company. Post Buyback, the non-promoter shareholding of the Company will not fall below the minimum level required as per the listing conditions / agreement. 7. AUTHORITY FOR THE BUYBACK Pursuant to Section 77A, 77AA and 77B and other applicable provisions of the Act, the SEBI Buyback Regulations and in terms of Article 3A of the Articles of Association of the Company, the Buyback through a tender offer route has been duly authorized by

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the resolution passed by the Board of Directors of the Company at their meeting held on May 21, 2012, and the Authorized Committee has initiated necessary actions / steps for the purposes of the Buyback in its meeting held on May 21, 2012, post the Board meeting approving the Buyback. 8. NECESSITY OF THE BUYBACK The Board of Directors of the Company is of the view that the proposed Buyback will help the Company achieve the following objectives: (a) Optimize returns to shareholders; and (b) Enhance overall shareholders value. The above objectives will be achieved by returning part of surplus cash back to Shareholders through the Buyback process. This may lead to reduction in outstanding Shares, improvement in Earnings Per Share and enhanced return on invested capital. The Buyback will not in any manner impair the ability of the Company to pursue growth opportunities or meet its cash requirements for business operations. 9. MANAGEMENT DISCUSSION AND ANALYSIS AND THE LIKELY IMPACT OF BUYBACK ON THE

COMPANY 1. The Buyback is not likely to cause any material impact on the profitability / earnings of the Company except a reduction in the

investment income, which the Company could have otherwise earned. For the year ended March 31, 2012 total investment income earned by the Company was Rs. 9,666 lakhs. Assuming there is full response to the Buyback, the funds deployed by the Company towards the Buyback would be Rs. 11,960 lakhs. This shall impact the investment income earned by the Company, on account of reduced amount of funds available for making investments.

2. The Buyback is expected to result in overall enhancement of the shareholders’ value and will not in any manner impair the ability of the Company to pursue growth opportunities or meet its cash requirements for business operations.

3. The Persons in Control of the Company will not offer Shares held by them under the Buyback. The Buyback of Shares will not result in a change in control or otherwise affect the existing management structure of the Company.

4. Assuming response to the Buyback is to the extent of 100% (Full Acceptance), the aggregate shareholding of the Persons in Control, post Buyback will increase to 70.80% from 68.88% pre Buyback, and the aggregate shareholding of the Public in the Company shall reduce to 29.20% post Buyback from 31.12% pre Buyback.

5. Consequent to the Buyback and based on the number of Shares bought back from the non-resident shareholders, foreign institutional investors, Indian financial institutions, banks, mutual funds and the public including other bodies corporate, the shareholding pattern of the Company would undergo a change.

6. The debt-equity ratio post Buyback will be compliant with the permissible limit of 2:1 prescribed by the Act, even if the response to the Buyback is to the extent of 100% (Full Acceptance).

7. Subject to the provisions of the Act, the Company will not issue fresh Shares during the period from the date of the Public Announcement up to six months after completion of the Buyback, save and except to the extent required to in Clause 6 - Details of the Buyback.

8. The Persons in Control of the Company shall not deal in the Shares of the Company during the period of the Buyback. 9. The Company shall not issue bonus Shares during the period of the Buyback. 10. Salient financial parameters consequent to the Buyback based on the Latest audited results as on March 31, 2012 are

as under: Parameters Pre-Buyback* Post-Buyback* Networth (excluding revaluation reserves) (Rs. lakhs) 143,951 132,121 Return on Networth (excluding revaluation reserves) (%) 15.96% 16.74%

11

Earnings per Share (Rs.) 42.08 43.25 Book Value per Share (Rs.) 300.15 283.16 P / E as per the latest audited financial results** 20.99 20.42 Total Debt / Equity Ratio 0.00 0.00

* Pre and Post Buyback Calculations are based on financial numbers as on March 31,2012

** P/E Ratio based on the market price as on May 23, 2012 i.e. Rs. 883.40 (NSE)

The post Buyback numbers are calculated by reducing the net worth by the proposed buyback amount (assuming full acceptance) without factoring any

impact on the profit & loss account

10. BASIS OF CALCULATING THE BUYBACK PRICE The Buyback price of Rs. 920 per Equity Share has been arrived at after considering the present stock market conditions, trends in the market price of Equity Shares of the Company, Company’s book value as on March 31, 2012 and the possible impact of the Buyback on the Earnings Per Share (EPS) and financial ratios of the Company and other relevant considerations. 1. The average closing market price of the Equity Shares of the Company two weeks prior to the date of the Board Meeting on

May 21, 2012 was Rs. 845.30 on BSE and Rs. 845.71on NSE. The Buyback Price of Rs. 920 amounts to a premium of 8.84% and 8.78% to the average closing market price two weeks prior to the date of the Board Meeting, on BSE and NSE respectively.

2. The closing market price of the Equity Shares as on the date of intimation of the date of the Board Meeting for considering the Buyback to the stock exchanges was Rs. 879.15 on BSE and Rs. 879.75 on NSE. The Buyback Price of Rs. 920 amounts to a premium of 4.65% and 4.58% to the closing market price as on the date of intimation of the date of the Board Meeting, on BSE and NSE respectively.

3. The Buyback price offers a premium of 207% over the Company’s Book Value per share of Rs. 300.15 as at March 31, 2012 4. The EPS of the Company pre-Buyback as on March 31, 2012 is Rs. 42.08 which will increase to Rs. 43.25 post Buyback

assuming full acceptance of the Buyback. (please refer clause 9.10) 5. The Return of Networth of the Company pre Buyback as on March 31, 2012 is 15.96% which will increase to 16.74% post

Buyback assuming full acceptance of the Buyback (please refer clause 9.10)

11. SOURCES OF FUNDS FOR THE BUYBACK 1. Assuming full acceptance, the funds that would be employed by the Company for the purpose of the Buyback would be Rs.

Rs.1,19,60,00,000 (Rupees One hundred nineteen crores and sixty lakh only) 2. The Buyback Size of Rs. 11,960 lakhs represents 8.7% of the aggregate of the paid up Equity Share Capital and free reserves

of the Company as at March 31, 2012. 3. The maximum number of Shares to be bought back in the Buyback is 13,00,000 Equity Shares. The number of Shares to be

bought back would constitute approximately 3.5% of Equity capital of the Company, as on March 31, 2012. 4. The Shares shall be bought back at a price of Rs. 920 per Equity Share. 5. The funds for the Buyback will be available from the current surplus and / or cash balances and / or internal accruals of the

Company. The Company does not propose raising debt for buying back Shares. However, the Company may continue to borrow funds in the ordinary course of its business. The cost of financing the Buyback would result in a reduction in the investment income, which the Company could have otherwise earned on the funds deployed in liquid and other assets.

12. DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT DEPOSITED THEREIN 1. In accordance with Regulation 10 of the SEBI Buyback Regulations, an Escrow agreement has been entered into among the

Company, ICICI Securities Limited and ICICI Bank (“the Escrow Agent”) through its branch at Nariman Point on Wednesday May 29, 2012 and in accordance with the same the Company has opened an escrow account in the name and style “AKZO

NOBEL INDIA LIMITED BUYBACK ESC AC” bearing account number 000405100861 in the form of cash deposit of a sum of Rs. 26,96,00,000 (Rupees Twenty six crores and ninety six lakhs Only) (“Escrow Amount”), and ICICI Securities Limited (Manager to the Buyback) has been empowered to operate the Escrow Account in accordance with the Regulations.

2. Based on the resolution of the Authorized Committee dated May 29, 2012 in this regard, and other facts / documents, M/s Shareef & Associates, Chartered Accountants, located at 1604, Suiwalan, Darya Ganj, New Delhi - 110002 Tel. 011 - 23252265, Proprietor Mr. MSA Khan, Membership Number: 80323 have certified, vide their letter dated May 29, 2012 that the Company has made firm financing arrangements for fulfilling the obligations under the Buyback. The Manager to the Buyback having regard to the above confirms that firm arrangements for fulfilling the obligations under the Buyback are in place.

13. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN 1. The present capital structure is as follows:

Rs. in Lakhs Parameters Pre-Buyback Authorised Share Capital 12,66,90,000 Equity Shares of Rs.10 each

12669

2. Assuming response to the Buyback is to the extent of 100% (Full Acceptance), the paid-up Equity Share Capital of the

Company pre-Buyback and post-Buyback would be as follows: Rs. in Lakhs

Particulars Pre-Buyback Post-Buyback Paid-Up Equity Share Capital Rs. 4796 lakhs comprising of 47,960,314

fully paid-up Equity Shares of Rs. 10 each Rs. 4666 lakhs comprising of 46,660,314 fully paid-up Equity Shares of Rs. 10 each

3. There are no partly paid up Shares or outstanding convertible instruments or Preferential Shares as on the date of the Public

Announcement. 4. The shareholding pattern of the Company pre-Buyback, taken as on May 23, 2012 (the date of Public Announcement), as well

as the post Buyback Shareholding, are as shown below:

Category of Shareholder No. of Shares Pre - Buyback*

% to the existing Equity Share capital

No. of Shares -Post Buyback#

% to the existing Equity Share capital

Shareholding of Promoter / Promoter Group / Directors of the Promoters (“Persons in Control of the Company”)

33,034,336 68.88 % 33,034,336 70.80 %

Shareholding of the Non Promoter(s):

14,925,978 31.12 %

Foreign Investors (including Non Resident Indians / FIIs/ Foreign Nationals/ Foreign Corporate Bodies

564,145 1.18 %

Financial Institutions /Banks & Mutual Funds/ Insurance Co.

6,385,874 13.31 %

Others (Individuals, Bodies Corporate, Employees, etc.)

7,975,959 16.63 %

13,625,978

29.20 %

Total 47,960,314 100.00 % 46,660,314 100.00 %

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* This is as per Share allotment resolution passed in the Board Meeting dated May 21, 2012. Necessary formalities in connection with credit of Shares to the

respective demat accounts or issue of share certificates, as the case may be, is currently in process.

# Assuming full acceptance of Equity Shares in the Buyback

5. The Buyback will be implemented from the existing shareholders, other than Persons in Control of the Company. None of the

Persons in Control of the Company intends to tender their Shares in the proposed Buyback and will not transact in the Shares of the Company during the period of the Buyback.

6. There is no pending scheme of amalgamation or compromise or arrangement pursuant to any provisions of the Act. 7. During the last 3 years from the date of this Draft Letter of Offer, the Company had bought back and extinguished 13,85,338

Shares through the market buyback (out of which 13,85,022 Shares were bought back and extinguished between April 01, 2009 till the closure of the Buyback), the public announcement for which was made on January 30, 2009, and the Closure of the Buyback was completed on December 18, 2009 (“Last Buyback”).

14. BRIEF INFORMATION OF THE COMPANY The Company is mainly in the business of manufacturing and marketing paints and specialty chemicals. The Company has

about 1700 employees on its rolls, with its manufacturing sites, business and sales offices and distribution network spanning across various locations within the country.

1. The History

• The Company, under ICI Group, commenced its operations in India in 1911 when Brunner Mond & Co, one of the four

companies that combined in 1926 to form ICI in UK, opened a trading office in Calcutta to sell alkalis and dyes. In 1923, it became Brunner Mond & Co (India) and in 1929, the name was changed to Imperial Chemical Industries (India) Ltd. This was followed by a period of sustained expansion, diversification and growth.

• The Company was formed in 1954 as Indian Explosives Ltd promoted jointly by ICI PLC and the Government of India. The Company’s name was changed to IEL Limited in 1985 and was again changed to ICI India Limited in 1989. The Government of India’s holding in the Company became nil on October 24, 2003.

• The Company sponsored, along with the other subsidiary companies of ICI PLC in India, the establishment of ICI Research and Technology Centre in Thane in 1976.

2. Consolidation and Restructuring • In 1984, three other group companies of ICI PLC in India, viz., The Alkali and Chemical Corporation of India Ltd,

Chemicals and Fibres India Limited and Crescent Dyes and Chemicals Limited merged with the Company in order to better utilize the synergies of the ICI Group and operate an enriched portfolio of business ranging from Paints, Rubber Chemicals, Water Treatment chemicals, Pharmaceuticals, Agrochemicals, Seeds, Fibres and Surfactants, apart from Explosives, Fertilisers and Catalysts.

• Nalco Chemicals India Ltd was formed in 1987 with Nalco Chemical Company USA and the Company, each holding 40% of the equity, to take over the Company’s Water Treatment chemicals Business, with the balance held by general public. The first phase of ICI India's restructuring was completed in 1993 with the divestment of seeds, fibres and fertilizers businesses, while the agrochemicals business was transferred to a joint venture with Zeneca Limited of UK in 1995.

• In 1996, a joint venture between Initiating Explosives Systems India Ltd. (IES) and The Ensign-Bickford Company of the USA was established for the manufacture of Initiating Explosives Systems. While the new paints plant and polyurethanes systems house were commissioned at Thane in 1997, another Paints plant was commissioned at Mohali near

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Chandigarh and the Uniqema Innovation Centre opened at Thane in the following year. In 1997, the Company acquired a Nitrocellulose manufacturing facility at Valsad (Gujarat).

• In 1998, the Company exited from its joint ventures with Nalco Chemical Company, USA and Zeneca, UK, as part of its restructuring exercise.

• In line with ICI India's strategic objective, the Polyurethanes business was sold to the Huntsman Group of USA in 2001.The Motors and Industrial Paints business was transferred to a Joint Venture with Berger Paints India Limited, also in 2001, from which the Company exited in 2002.

• The Explosives business of the Company together with the interest in IES, was transferred to Indian Explosives Limited, a joint venture between the Company and Orica Investments Pty Ltd., Australia in 1999. The Company has exited from the joint venture in late 2003.

• Trading in National Starch Adhesives products commenced in 1999, followed by the commissioning of a plant at Thane in 2000. The Company has acquired controlling interest during 2006 in Polyinks Limited, Hyderabad, which manufactures Hot Melt Adhesives. After a period of sustained growth, the Adhesives business (including the Company’s holding in Polyinks Limited) was divested in 2008, to Henkel Group. The Starch business of the Company was sold to the Corn Products Group of USA, in December 2010.

• The flavours and fragrances business was taken over as a joint venture (with ICI India holding a majority stake) with Hindustan Lever Limited and Quest International B.V. in 2001. The share holding of Hindustan Lever Limited was bought over by the Company in May 2006. The Company has exited from this business in March 2007 by the sale of its shareholding to Givaudan Group.

• In 2002, the Pharmaceuticals business of the Company was divested to Nicholas Piramal India Limited, and the Catalyst business of the Company has been divested to Johnson Matthey Group, UK.

• The Nitrocellulose and Trading businesses were divested in 2004 to Nitrex Chemicals India Ltd • The Rubber Chemicals business was divested to an affiliate of PMC Group International, USA in December 2005 • In early 2007, the Uniqema business was divested to Croda Group of UK and the Advanced Refinish Paints Business

(2K) was divested to an affiliate of the PPG Industries, USA. On 2nd January 2008, Akzo Nobel NV became owner of the entire Equity Share capital of Imperial Chemical Industries Ltd.,

the holding Company of ICI India Limited, through a scheme of arrangement under section 425 of the UK Companies Act 1985. The name of the Company has been changed to its present name of Akzo Nobel India Limited in February 2010. The businesses currently in the portfolio of the Company are Paints and Specialty Chemicals.

In 2012, under the scheme of amalgamation sanctioned by the High Courts of Karnataka, Mumbai and Calcutta, Akzo Nobel

Car Refinishes India Private Limited, Akzo Nobel Coatings India Private Limited, and Akzo Nobel Chemicals (India) Limited were amalgamated with the Company, with effect from May 18, 2012. The appointed date for the merger was April 01, 2011.

3. Capital Build-up of the Equity Share Capital:

S. No Date of Allotment

/(Extinguishment) of Shares

No. of Equity Shares Issued /

(Extinguished) of Face Value of Rs.

10 each

Reasons of Allotment /(Extinguishment)

Cumulative Equity Share Capital in

Rs.

1. August 12, 1954 20,00,000 On Incorporation 2,00,00,000 2. March 21, 1959 10,00,000 Additional share issue 3,00,00,000 3. March 30,1965 4,30,000 Public Issue 3,43,00,000

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4. August 31, 1966 13,72,000 Bonus Issue 4,80,20,000 5. December 29, 1967 1,66,80,000 Rights & Public issue 21,48,20,000 6. February 20, 1978 71,60,667 Bonus Issue 28,64,26,670 7. June 23, 1978 3,41,000 Rights Issue 28,98,36,670 8. October 01, 1982 29,68,824 Part Conversion of Debentures 31,95,24,910 9. July 16, 1984 89,18,121 Allotment on amalgamation 40,87,06,120 10. August 25, 2007 to July

10, 2008 (26,50,943) Extinguishment Pursuant to Buyback

announced on July 26, 2007 38,21,96,690

11. March 05, 2009 to November 30, 2009

(13,85,338) Extinguishment Pursuant to Buyback announced on January 30, 2009

36,83,43,310

12. May 21, 2012 1,11,25,983 Allotment pursuant to merger 47,96,03,140 4. The Details of the Board of Directors of the Company are as follows:

Name and Age Designation Qualifications and

Occupation

Date of Appointment/

Reappointment

Other Directorships in Indian companies on the date of the Public Announcement

Mr. Nihal Kaviratne 68 years

Chairman BA- Economics

March 30, 2009 / July 22, 2011

1. GlaxoSmithKline Pharmaceuticals India Ltd : Non-Executive Director

2. DBS Group Holdings Limited : Non-Executive Director

3. DBS Bank Limited : Non-Executive Director

Mr. Amit Jain 48 Years

Managing Director MBA June 01, 2009 / July 16, 2009

1. ICI India Research & Technology Centre : Non-Executive Director

2. Navya Advisors Pvt Ltd : Non-Executive Director

Mr. Partha Sarathi Basu 46 Years

Wholetime Director

ACMA, DBF, BLP (IIMC)

November 01, 2010

ICI India Research & Technology Centre : Non-Executive Director

Dr. Sanjiv Misra 65 Years

Independent Director

PhD May 14, 2010 / July 22, 2010

Bombay Stock Exchange Limited : Non-Executive Director

Mr. Arvind Uppal 50 Years

Independent Director

BE, MBA April 01, 2011 / July 22, 2011

Whirlpool of India Limited : Chairman and Managing Director

Mr. R Gopalakrishnan 66 Years

Independent Director

BE May 16, 1999 / July 22, 2010

1. Rallis India Ltd : Non Executive Chairman 2. Tata AutoComp Systems Ltd : Non Executive Chairman 3. Tata Chemicals Ltd : Non Executive Vice Chairman 4. Tata Sons Ltd : Non Executive Director 5. Tata Power Co. Ltd : Non Executive Director 6. Tata Technologies Ltd : Non Executive Director 7. Castrol India Limited : Non Executive Director 8. ABP Pvt Ltd : Non Executive Director 9. Advinus Therapeutics Pvt Ltd : Non Executive Chairman 10. Metahelix Life Sciences Pvt Ltd : Non Executive Chairman

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11. Dhaanya Seeds Pvt Ltd -Non Executive Chairman

Ms. R S Karnad 59 Years

Independent Director

LLB & PG in Economics

August 01, 2003 / July 22, 2011

1. Bosch Limited : Non Executive Director 2. Credit Information Bureau (India)

Limited : Non Executive Director 3. GRUH Finance Limited : Non Executive

Director 4. HDFC Limited : Managing Director 5. HDFC Asset Management Company

Ltd : Non Executive Director 6. HDFC Bank Limited : Non-Executive

Director 7. HDFC ERGO General Insurance Co

Ltd : Non Executive Director 8. HDFC Property Ventures Limited: Non

Executive Chairperson 9. HDFC Standard Life Insurance Co. Ltd :

Non Executive Director 10. Indraprastha Medical Corporation

Limited: Non Executive Director 11. EIH Limited : Non Executive Director 12. HDFC Sales Pvt Ltd : Non Executive

Chairperson 13. Feedback Ventures Pvt Ltd : Non

Executive Director 14. G4S Corporate Services (India) Pvt Ltd :

Non Executive Director 15. Value and Budget Housing Corpn (I) P

Ltd : Non Executive Director 16. Credila Financial Services Pvt Ltd : Non Executive Chairperson 17. Lafarge India Pvt Ltd : Non Executive Director 18. HDFC Education & Dev. Services Pvt Ltd : Non Executive Chairperson

Mr. Graeme Armstrong 49 Years

Director PhD April 01, 2011 / July 22, 2011

ICI India Research & Technology Centre : Non Executive Chairman

Ms. Sucheta Govil 48 Years

Alternate Director MBA April 01, 2011 Nil

5. The details of changes in the Board of Directors during the last 3 years from the date of this Draft Letter of Offer are as under:

Name Appointment / Resignation Effective Date Reasons

Mr. Rajiv Jain Resignation May 31, 2009 Retirement Mr. Amit Jain Appointment June 01, 2009 Appointed as Managing Director Mr. A J Britt Resignation June 30, 2009 Resignation Mr. M V Subbiah Resignation June 19, 2009 Resignation Mr. M R Rajaram Resignation October 31, 2009 Resignation Ms. Kerris Bright Resignation April 29, 2010 Resignation Dr. Sanjiv Misra Appointment May 14, 2010 Appointed as a Non-Executive Director

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Mr. Aditya Narayan Resignation October 01, 2010 Retirement Mr. Partha Sarathi Basu Appointment November 01, 2010 Appointed as Wholetime Director Mr. Graeme Armstrong Appointment April 01, 2011 Appointed as a Non-Executive Director Ms. Sucheta Govil Appointment April 01, 2011 Appointed as an Alternate Director to Mr.

Graeme Armstrong Mr. Arvind Uppal Appointment April 01, 2011 Appointed as a Non-Executive Director

None of the Directors / Promoters / Promoter Group / Group Companies / People in Control of the Company are concerned or interested either directly or indirectly in the Buyback. The Persons in Control have consented not to participate in the Buyback. Consequent to the Buyback and depending upon the response to the Buyback offer, the holding of promoters would increase from the pre-Buyback Shareholding of 68.88% to a maximum post-Buyback Shareholding of 70.80%, (assuming that all the 13,00,000 Shares are bought back in the proposed Buyback offer). The Buyback will not result in change in control or otherwise affect the existing management structure of the Company. 15. FINANCIAL INFORMATION ABOUT THE COMPANY The salient financial information of the Company, as extracted from the audited results for the last three financial years is detailed below:

(Rs. in lakhs) For the year ended on March 31, Key Financials 2012

(Audited) 2011

(Audited) 2010

(Audited) Net Sales 194,251 108,759 93,853 Other Income 15,683 8,381 10,227 Total Income 209,934 117,140 104,080 Total Expense (excluding Interest, Depreciation, Tax and Exceptional Items) 181,329 96,377 82,098 Interest Expense / (Income) 306 2,266 139 Depreciation 3,663 2,166 2,124 Exceptional Items@ - 1128 - Profit Before Tax 24,635 21,991 19,997 Provision for Tax 4,457 4,326 4,071 Profit After Tax 20,178 17,665 15,926 Equity Dividend (including dividend tax) 11,148 7,705 6,872 Paid-up Equity Share Capital 4,796 3,684 3,684 Reserve & Surplus excluding revaluation reserves 1,39,155 1,05,324 95,380 Net worth excluding revaluation reserves 1,43,951 1,09,008 99,064 Loan Funds - Secured Loans - - - - Unsecured Loans - - - @Details of Exceptional Items: (Rs. in lakhs) Particulars March 31, 2012

(Audited) March 31, 2011

(Audited) March 31, 2010

(Audited) Profit on sale of National Starch Business 1,128 - TOTAL 1,128 -

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Key Ratios For the year ended March 31, 2012

(Audited)

For the year ended March 31, 2011

(Audited)

For the year ended March 31, 2010

(Audited) Earnings per Share – Basic (Rs.) 42.08 47.94 42.59 Book value per Share (Rs.) 300.15 295.94 264.84 Return on Net Worth excluding revaluation reserves (%) 15.96% 16.98% 16.47% Debt / Equity Ratio 0.0 0.0 0.0

The key ratios have been computed as below:

Key Ratios Basis

Earnings per Share – Basic (Rs.) Net Profit attributable to equity shareholders / Weighted average number of Shares outstanding during the year

Book value per Share (Rs.) (Paid up Equity Share Capital + Free Reserves and Surplus) / No of Equity Shares subscribed

Return on Net Worth excluding revaluation reserves ( % ) Net Profit After Tax / Average Net Worth excluding revaluation reserves Debt-Equity Ratio Total Debt / Net Worth The Company shall comply with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, wherever and if applicable. The Company hereby declares that it has complied with Section 77A (2) (c), (d), 77B (1) 77B (2) of the Companies Act, 1956, as amended and will comply with Regulation 23 of the SEBI Buyback Regulations, as and when applicable. 16. STOCK MARKET DATA The Company’s Shares are listed on the BSE and NSE. The high, low and average market prices in preceding three financial years (April to March periods) and the monthly high, low and average market prices for the six months preceding the date of Public Announcement from November 1, 2011 to May 22, 2012 and the corresponding volumes on BSE and NSE are as follows: BSE

Period High (Rs.)

Date of High

No. of Shares

traded on that date Low (Rs)

Date of Low

No. of Shares

traded on that date

Average Price#

Total Volume

traded in the period

April 1, 2009 to March 31, 2010* 679.80 22-Jan-10 80,597 430.00 13-Apr-09 778 557.80 786,890 April 1, 2010 to March 31, 2011 970.00 21-Sep-10 36,119 570.00 5-May-10 607 766.45 3,017,727 April 1, 2011 to March 31, 2012 1,045.00 28-Jul-11 17,713 693.25 19-Dec-11 4,529 862.67 1,783,041

November 1, 2011 to November 30, 2011 880.95 8-Nov-11 6,832 809.35 30-Nov-11 1,301 837.80 70,724 December 1, 2011 to December 31, 2011 819.00 1-Dec-11 826 693.25 19-Dec-11 4,529 773.27 29,011

January 1, 2012 to January 31, 2012 884.95 12-Jan-12 259,757 766.25 6-Jan-12 278 799.21 286,645 February 1, 2012 to February 29, 2012 948.00 3-Feb-12 144,821 789.95 1-Feb-12 2,594 832.81 327,316

March 1, 2012 to March 31, 2012 870.00 5-Mar-12 46,008 790.00 30-Mar-12 1,609 809.43 127,896 April 1, 2012 to April 30, 2012 884.00 12-Apr-12 10,856 805.05 2-Apr-12 550 841.66 70,352 May 1, 2012 to May 22, 2012 919.95 18-May-12 25,259 829.4 7-May-12 786 847.62 100,622

(Source:www.bseindia.com)

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NSE

Period High (Rs.)

Date of High

No. of Shares

traded on that date

Low (Rs)

Date of Low

No. of Shares

traded on that date

Average Price#

Total Volume

traded in the period

April 1, 2009 to March 31, 2010* 678.00 18-Jan-10 4,326 420.00 19-May-09 5,396 558.25 3,052,983 April 1, 2010 to March 31, 2011 970.00 21-Sep-10 55,740 565.00 5-May-10 2,139 766.60 4,682,860 April 1, 2011 to March 31, 2012 1,044.00 28-Jul-11 30,466 699.00 19-Dec-11 5,501 862.52 5,235,628

November 1, 2011 to November 30, 2011 877.65 14-Nov-11 7,588 803.40 22-Nov-11 76,478 839.53 422,085 December 1, 2011 to December 31, 2011 825.00 1-Dec-11 2,481 699.00 19-Dec-11 5,501 771.44 201,703

January 1, 2012 to January 31, 2012 897.40 12-Jan-12 1,049,366 765.00 6-Jan-12 1,412 798.30 1,155,893 February 1, 2012 to February 29, 2012 945.00 3-Feb-12 217,647 791.95 1-Feb-12 11,354 831.73 1,091,268

March 1, 2012 to March 31, 2012 834.00 19-Mar-12 20,784 800.05 30-Mar-12 5,412 809.78 142,648 April 1, 2012 to April 30, 2012 886.00 12-Apr-12 16,991 805.55 2-Apr-12 2,003 842.24 163,119 May 1, 2012 to May 22, 2012 915.95 18-May-12 67,505 831.00 7-May-12 2,484 848.54 214,453

(Source:www.nseindia.com) # Arithmetic average of Closing prices of all trading days during the said period

* During this period the Company, through market purchase process, bought back and extinguished 13,85,022 Equity Shares pursuant to Buyback announced on January 30, 2009

The closing market price of the Equity Shares of the Company: - As on May 18, 2012, i.e. the trading day before May 21, 2012, being the date of Board Meeting approving the Buyback

was Rs. 879.15 per Equity Share on BSE and Rs. 879.75 per Equity Share on NSE - As on May 21, 2012, i.e. the date of Board Meeting approving the Buyback was Rs. 863.25 per Equity share on BSE

and Rs. 863.25 per Equity share on NSE - As on May 22, 2012, i.e. the day immediately after May 21, 2012, being the date of Board Meeting approving the

Buyback was Rs. 877.55 per Equity Share on BSE and Rs. 878.40 per Equity Share on NSE - As on May 23, 2012, i.e. the date of Public Announcement was issued, was Rs. 880.90 per Equity Share on BSE and

Rs. 883.40 per Equity Share on NSE 17. DETAILS OF THE STATUTORY APPROVALS 1. The Buyback is subject to the receipt of approval from the Reserve Bank of India (“RBI”) if any, for acquiring Shares validly

tendered in the Buyback from Non-Resident Indians (“NRI”) and erstwhile Overseas Corporate Bodies (“OCB”). The Company will make necessary applications to the RBI to obtain the requisite approvals on behalf of these shareholders in respect of whom such prior RBI approval as may be required, if any. The Company will have the right to make payment to the shareholders in respect of whom no prior RBI approval is required and not accept Shares from the shareholders in respect of whom prior RBI approval is required in the event the aforesaid RBI approval is refused.

2. In case of delay in receipt of the RBI approval, the Company has the option to make payment to the shareholders in respect of whom no RBI approval is required who have validly tendered their Shares in the Buyback as per the basis of acceptance (if any). After the receipt of RBI approval, the payment shall be made to the shareholders in respect of whom prior RBI approval is required.

3. As of date, there is no other statutory or regulatory approval required to implement the Buyback, other than that indicated above. If any statutory or regulatory approval becomes applicable subsequently, the Buyback will be subject to such statutory or regulatory approvals. In the event that the receipt of the statutory / regulatory approvals are delayed, changes to the proposed timetable, if any, shall be intimated to the Stock Exchanges, and hence made available for the benefit of Shareholders, .

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18. DETAILS OF REGISTRAR TO THE BUYBACK AND COLLECTION CENTRES

REGISTRAR TO THE BUY BACK: C B Management Services (P) Limited Unit: Akzo Nobel Buyback Address: P-22 Bondel Road, Kolkata 700019, West Bengal, India Tel No.: +91 33 40116700 Fax No.: +91 33 40116739 Email : akzobuyback@cbmsl.com Contact Person : Mr Shankar Ghosh Shareholders residing at a location where there is no collection centre should send the Tender Offer Form and relevant documents to the Registrar to the Buyback by mode mentioned herein to their office in Kolkata at the above mentioned address. Collection Centres: The tender forms can be submitted any working day during the period of the Offer i.e. June 22, 2012 (Friday) to July 05, 2012 (Thursday), except Sundays & Public Holidays, at collection centres between 10.00 AM to 05.00 PM:

S. No. Place Address Contact Person

E-mail Address of the Contact

Person Telephone No. and

Fax No. Mode of Delivery

1. Mumbai

Taurus Stock Broking Pvt.Ltd 305 & 306, Sapphire Arcade,

M G Road, Rajawadi, Ghatkopar(East)

Mumbai – 400 077

Mr. Yogesh Doshi taurusstock@ vsnl.net

Ph: (022) 2102 4272/ 2102 7400

Fax: (022) 2102 1004 Hand Delivery

2. Ahmedabad

M/s V K Moondra 201, Sarap

Opp. Navjeevan Press Ashram Road

Ahmedabad – 380 014

Mr. V.K. Moondra Mr. Vinit Moondra

vk_moondra @rediffmail.com

Ph: (079)2754 0550/ 2754 1569

Fax: (079) 27540550 Mobile

No.09825303998 (VK Moondra)

Mobile No.09970064148 (Vinit Moondra)

Hand Delivery

3. Chennai

Strides Financial Services Arihant Plaza, 1st Floor, 84-85, Wall Tax Road, Park Town, Above SBI,

Chennai – 600 003.

Mr. Dilip M Surana dilipmsurana @gmail.com

Ph: (044) 25350312/ 25350313

Mobile No.09840278351

09382578351

Hand Delivery

4. Kolkata CB Management Services

(P) Ltd. P-22, Bondel Road Kolkata – 700 019

Mr. Chandra Sekhar Deb

akzobuyback@cbmsl.com

Ph : (033) 4011-6700 Fax : (033) 4011-6739

Hand Delivery / Registered Post /

Courier

5. Noida ADC Legal Services Pvt.Ltd

A-105, Sector-63, Noida, Gautam Budh Nagar

Pin 201 301

Mr. Deepak Kapoor

sarita.khatri@adclegal.in

Ph: (0120) 4259653 Fax:(0120)4350065 Hand Delivery

6. Jaipur B-5, Jaipur Tower Opp. Akashvani

M.I. Road,Jaipur – 302 001

Mr. Pravin Saraswat / Mr. Sandip Manek

indu123@ hotmail.com

Mobile No: 09829063908 Hand Delivery

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Note: Shareholders may also send the tender form by registered post acknowledgement due to Registrar to Buyback Offer i.e. C B Management Services (P) Limited, by superscribing the envelope as “AKZO NOBEL BUYBACK”. The tender form should reach Registrar to Buyback Offer before 05.00 PM on July 05, 2012 (Thursday), failing which the same will be rejected. 19. PROCESS AND METHODOLOGY FOR THE BUYBACK 1. The Company proposes to buyback up to maximum of 13,00,000 fully paid up Equity Shares of Rs. 10 each, from the Existing

Shareholder(s) / Beneficial owner(s) of Equity Shares of the Company through the Tender Offer Route in accordance with Sections 77A, 77AA, 77B and other applicable provisions of the Companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998, as amended, at a price of Rs. 920 per Share payable in cash for an aggregate amount of Rs.1,19,60,00,000 (Rupees One hundred nineteen crores and sixty lakh only). The Buyback size represents 8.7% of the paid-up Equity Share Capital and free reserves of the Company as on March 31, 2012. The maximum number of Equity Shares proposed to be bought back is 13,00,000 Equity Shares of Rs. 10 each, being 3.5% of the total paid up Equity Capital of the Company.

2. The Promoters / Promoter Group / Directors of the Promoters / Persons in Control do not intend to offer any Equity Shares under the proposed Buyback. The aggregate shareholding of the Persons in Control is 33,034,336 Equity Shares of Rs. 10 each out of total 47,960,314 Equity Shares of Rs. 10 each i.e. 68.88% of the existing Equity Share capital of the Company. Assuming response to the Buy Back is to the extent of 100% (Full Acceptance), the aggregate shareholding of the Persons in Control post Buyback will increase to 70.80% of the post Buy Back Equity Share capital of the Company.

3. Record Date and Ratio of Buyback as per the entitlement in each Category: • The Authorized Committee in its meeting held on May 28, 2012 announced June 08, 2012 as Record Date for the purpose

of determining the entitlement and the names of the shareholders, who are eligible to participate in the proposed Buyback Offer.

• The Shares to be bought back as a part of this offer is divided in to two categories (a) Reserved category for Small Shareholders, and (b) The General Category for other shareholders

• As defined in the SEBI Buyback Regulations, Small Shareholder includes a shareholder, who holds Shares whose market value, on the basis of closing price on the recognized stock exchange registering the highest trading volume, as on Record Date, is not more than two lakh rupees. As on Record Date, the closing price on [ ], (the recognized stock exchange registering the highest trading volume on that date), was Rs. [ ].

• Based on the above definition, there are [ ] Small Shareholders in the Company with aggregate shareholding of [ ] Shares, as on Record Date, which constitutes [ ] % of the outstanding number of Equity Shares of the Company and [ ] % of the number of Equity Shares which the Company proposes to buyback as a part of this Offer.

• Based on the above and in accordance with regulation 6 of the Buyback Regulations, 15% (fifteen percent) of the number of Equity Shares which the Company proposes to Buyback as part of this Offer i.e. 15% of 13,00,000 Equity Shares amounting to 1,95,000 Equity Shares have been reserved for Small Shareholders (“Reserved Buyback Size for Small Shareholders”).

• Accordingly, General Category for Other Shareholders shall consist of 11,05,000 Shares (“Balance Buyback Size”). • Based on the above entitlements, the ratio of Buyback for both categories is decided as below:

Category of Shareholders Ratio of Buyback

Reserved category for Small Shareholders [ ] Equity Shares out of every [ ] fully paid-up Equity

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Shares held on the Record Date

General category of other shareholders [ ] Equity Shares out of every [ ] fully paid-up Equity Shares held on the Record Date

• Fractional Entitlements:

a. Reserved category for Small Shareholders: For Equity Shares proposed to be bought back by the Company under this offer, if the number of Shares held by any of the Small Shareholders in the Reserved Category is less than [ ] Equity Shares or is not in multiple of [ ], the fractional entitlement of such Small Shareholders shall be ignored for computation of their entitlement to tender Shares in Buyback Offer. On account of ignoring the fractional entitlement, those Small Shareholders who are entitled to tender zero Equity Shares in the Buyback Offer will be dispatched a Form of Acceptance-cum-Acknowledgement with zero entitlement. Such Small Shareholders are entitled to tender additional Equity Shares as part of the Buyback Offer. Such Small Shareholders will be given preference in the Acceptance of one Equity Share, if such Small Shareholders have tendered for additional Equity Shares as part of the Buyback offer. b. General Category of other Shareholders:

For Equity Shares proposed to be bought back under this offer, if the shareholding of any of the Equity Shareholders in General category is not in multiple of [ ], the fractional entitlement of such Equity Shareholders shall be ignored for computation of entitlement in Buyback Offer.

4. Basis of Acceptance of Shares validly tendered in the Reserved Category for Small Shareholders:

Subject to the provisions contained in the Letter of Offer, the Company will accept the Equity Shares tendered in the Buyback Offer by the Small Shareholders in the Reserved Category in the following order of priority: 1. Full Acceptance of Equity Shares from Small Shareholders in the Reserved Category who have validly tendered their

Shares, to the extent of their Buyback Entitlement, or the number of Shares tendered by them whichever is less. 2. Post the acceptance as described in Clause 19.4.1 above, in case there are any Shares left to be bought back in the

Reserved Category for Small Shareholders, the Small Shareholders who were entitled to tender zero Shares (on account of ignoring the fractional entitlement), and have tendered additional Shares as part of the Buyback offer, shall be given preference and one share each from the Additional Shares applied by these Small Shareholders shall be bought back in the Reserved Category.

3. Post the acceptance as described in Clauses 19.4.1 and 19.4.2 above, in case there are any Shares left to be bought back in the Reserved Category, the Additional Equity Shares tendered by the Small Shareholders over and above their Buyback Entitlement, shall be accepted in proportion of the Additional Shares tendered by them and the acceptances per shareholder shall be made in accordance with the Regulations, i.e. valid acceptances per shareholder shall be equal to the Additional Shares validly tendered by the Shareholder divided by the total Additional Shares validly tendered and multiplied by the total Pending number of Shares to be accepted in Reserved Category. For the purpose of this calculation, the Additional Shares taken into account for such Small Shareholders, from whom one Share has been accepted in accordance with Clauses 19.4.2 above, shall be reduced by one.

4. Adjustment for fractional results in case of proportionate acceptance, as described in Clause 19.4.3 above: • For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in

the multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the fraction would be rounded off to the next higher integer.

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• For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in the multiple of 1 and the fractional acceptance is less than 0.50, then the fraction shall be ignored.

5. Basis of Acceptance of Shares validly tendered in the General Category for Other Shareholders:

Subject to the provisions contained in the Letter of Offer, the Company will accept the Equity Shares tendered in the Buyback Offer by the Other Shareholders in the General Category in the following order of priority:

1. Full Acceptance of Equity Shares from Other Shareholders in the General Category who have validly tendered their Shares, to the extent of their Buyback Entitlement, or the number of Shares tendered by them whichever is less.

2. Post the acceptance as described in Clause 19.5.1 above, in case there are any Shares left to be bought back in the General Category, the Additional Equity Shares tendered by the Other Shareholders over and above their Buyback Entitlement, shall be accepted in proportion of the Additional Shares tendered by them and the acceptances per shareholder shall be made in accordance with the Regulations, i.e. valid acceptances per shareholder shall be equal to the Additional Shares validly tendered by the Shareholder divided by the total Additional Shares validly tendered and multiplied by the total Pending number of Shares to be accepted in General Category.

3. Adjustment for fractional results in case of proportionate acceptance, as described in Clause 19.5.2 above: • For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in

the multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the fraction would be rounded off to the next higher integer.

• For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in the multiple of 1 and the fractional acceptance is less than 0.50, then the fraction shall be ignored.

6. Basis of Acceptance of Shares between Categories

1. In case there are any Shares left to be bought back in one category (“Partially filled Category”) after acceptance in accordance with the above described methodology for both the Categories, and there are Additional unaccepted validly tendered Shares in the second Category, then the Additional Shares in the second Category shall be accepted proportionately i.e. valid acceptances per shareholder shall be equal to the Additional outstanding Shares validly tendered by a shareholder in the second Category divided by the total Additional outstanding Shares validly tendered in the second Category and multiplied by the total Pending number of Shares to be bought back in the Partially filled Category.

2. If the Partially filled Category is the General Category for Other Shareholders and the second Category is the Reserved Category for Small Shareholders, then for the purpose of this calculation, the Additional Shares tendered by such Small Shareholders, from whom one Share has been accepted in accordance with Clause 19.4.2, shall be reduced by one.

3. Adjustment for fraction results in case of proportionate acceptance, as defined in Clause 19.6.1 above: • For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in the

multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the fraction would be rounded off to the next higher integer.

• For any shareholder, if the number of Additional Shares to be accepted, calculated on a proportionate basis is not in the multiple of 1 and the fractional acceptance is less than 0.50, then the fraction shall be ignored.

7. For avoidance of doubt, it is clarified that the Shares accepted under the Buyback from each Shareholder, in accordance with

Clause 19.3, 19.4, 19.5 and 19.6 above, shall not exceed the number of Shares tendered by the respective Shareholder.

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20. PROCEDURE FOR TENDER OFFER AND SETTLEMENT 1. The Buyback is open to all Eligible Person(s). 2. The Company shall comply with Regulation 19(5) of the Regulations which states that the Company shall not buyback the

locked-in Shares and non-transferrable Shares till the pendency of the lock-in or till the Shares become transferrable. 3. The Company proposes to effect the Buyback through a tender offer, on a proportionate basis. A Letter of Offer (“LoF”) and

Form of Acceptance-cum-Acknowledgement (“Form”), outlining the terms of the Buyback as well as the detailed disclosures as specified in the Regulations, will be mailed to shareholders of the Company whose names appear on the register of members of the Company, or who are beneficial owners of Shares as per the records of National Securities Depository Limited / Central Depository Services (India) Limited, on the Record Date.

4. The Buyback shall be open for the period as shown in the proposed timeline. Shareholders who propose to tender in the Buyback must ensure that their Form(s), along with the requisite documents, reach the collection centers before 5.00 p.m. on the date of closure of the Buyback. Shareholders must also ensure that the credit of dematerialized Shares in the Company Depository Account must take place before 5:00 pm on the date of closure of the Buyback.

5. A Letter of Offer and Form of Acceptance-cum-Acknowledgement, outlining the terms of the Buyback as well as the detailed disclosures as specified in the Regulations, will be mailed to shareholders of the Company whose names appear on the register of members of the Company, or who are beneficial owners of Shares as per the records of National Securities Depository Limited / Central Depository Services (India) Limited, on the Record Date. The LoF will be sent to shareholders so as to reach them before the date of opening of the Buyback.

6. The Company will consider all the Shares validly tendered for the Buyback by shareholders, for acceptance under the Buyback.

7. Shareholders may submit the Form duly signed (by all shareholders in case the Shares are in joint names) at the specified Collection Centres along with the share certificate(s) / copy of DP instruction slip and other relevant documents as specified in the Letter of Offer. Each shareholder should submit only one Form irrespective of the number of folios he/she holds. Multiple applications tendered by any shareholder shall be liable to be rejected. Also, multiple tenders from the same depository account or same registered folio shall also be liable to be rejected.

8. Shareholders may offer for Buyback their full holding or any part of their holding of Shares of the Company, as they desire. 9. No single offeror can tender Equity Shares more than the total number of Equity Shares proposed to be bought back and

any Form wherein the number of Equity Shares offered by a shareholder exceeds the total number of Shares to be bought back will be rejected.

10. The Company will not accept any Equity Shares offered for buyback which are under lock-in or where there exists any restraint order of a Court for transfer / disposal/ sale or where loss of share certificates has been notified to the Company or where the title to the Shares is under dispute or otherwise not clear or where any other restraint subsists.

11. Where the Form is signed under Power of Attorney or by Authorized Signatory(ies) on behalf of a Company / body corporate, the Power of Attorney/Signing Authority along with the specimen signatures must have been previously registered with the Company. The registration serial number of such documents should be mentioned below the relevant signature. Where the relevant document is not so registered, a copy of the same duly certified by a Notary / Gazetted Officer should be enclosed with the Form.

12. In case one or more of the joint holders is deceased, the Form must be signed by all surviving holder(s) and submitted along with a certified or attested true copy of the Death Certificate(s). If the sole shareholder is deceased, the Form must be signed by the legal representatives of the deceased and submitted along with the certified or attested true copy of Probate / Letters of Administration / Succession Certificate and all other relevant documentation while tendering their Shares for the Buyback.

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13. Where a joint shareholder is deceased, the Shares will be consolidated with the Shares, if any, held and tendered by the surviving shareholder(s) for the purpose of reckoning the aggregate number of Shares to be bought back from the surviving shareholders.

14. In case of any lacunae and / or defect, incomplete information, late receipt or modifications in the documents / Forms submitted, the Form(s) are liable to be rejected.

15. All the shareholders should provide all relevant documents, which are necessary to ensure transferability of the Shares in respect of which the Form is being sent. Such documents may include (but not be limited to): - No objection certificate from any lender, if the Shares in respect of which the Form is sent, were under any charge, lien

or encumbrance. - Duly attested Power of Attorney, if any person other than the shareholder has signed the Form. - In case of companies, the necessary certified corporate authorizations (including Board and/or general meeting

resolutions). 16. It is mandatory for the shareholders to indicate the bank account where consideration will be payable at the appropriate

place in the Form. 17. Non-receipt of the LoF by, or accidental omission to dispatch the LoF to any person who is eligible to receive the Offer, shall

not invalidate the Offer in any way. 18. In case of non-receipt of the LoF / Form:

a. In case the Shares are in dematerialized form: A shareholder may send an application in writing on plain paper stating name, address, number of Shares held Client ID number, DP Name/ID, beneficiary account number, number of Equity Shares tendered for the Buyback, bank account particulars for the payment of Buyback consideration etc. enclosing a photocopy of the delivery instruction in “Off-market” duly acknowledged by the DP, in favour of the depository account (details as per Clause 21.19 and other necessary documents. Shareholders must ensure that their Form(s), along with the requisite documents, reach the collection centers before 5 pm on the date of closure of the Buyback. Shareholders must also ensure that credit of dematerialized Shares in the Company Depository Account must take place before 5:00 pm on the date of closure of the Buyback.

b. In case the Shares are in physical form: A registered shareholder may send an application in writing on a plain paper signed by all shareholders stating name, address, folio number, number of Equity Shares held, certificate number, number of Equity Shares tendered for the Buyback and the distinctive numbers thereof, bank account particulars for payment of consideration, etc. enclosing the original share certificate(s), copy of shareholders PAN card and other necessary documents. Shareholders must ensure that their Form(s), along with the requisite documents, reach the collection centers before 5 pm on the date of closure of the Buyback.

19. For Shares held in the dematerialised form: The Company has designated a Depository account named “Akzo Nobel India Limited” with Standard Chartered Securities (India) Limited, in NSDL (‘Company Depository Account’). The beneficial owners are required to execute an off-market trade by submitting the Delivery Instructions for debiting his/her beneficiary account with their concerned Depository Participant (“DP”). The date of execution entered in the delivery instruction should be on or after the date of opening of the Buyback and on or before the last date of submission of the Form to the collection centers or on or before mailing the Form to the Registrar to the Buyback as the case may be, but not later than 5.00 p.m. on the date of closure of the Buyback. A photocopy of the Delivery Instructions or counterfoil of the Delivery Instructions duly acknowledged by the DP shall be attached to the Form while submitting the same. The beneficial owner may note that the Delivery Instructions to be made to their Depository Participant should be in the “Off-market trade” mode, and as per the details provided below:

DP Name Standard Chartered Securities (India) Limited

DP ID Number IN300360

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Beneficiary Account Name AKZO NOBEL INDIA LIMITED

Beneficiary Account Number / Client ID 22172876

Market Off - Market

Execution Date On or before July 05, 2012

Please note that the aforementioned account shall be closed at 5:00 p.m. on the date of closure of the Buyback. Beneficial owners are requested to ensure the credit of their Shares to the aforementioned account before the closure of the aforementioned account.

20. Shareholders having their beneficiary account in CDSL will have to use inter-depository instructions slip for the purpose of crediting their Shares in favour of the Company Depository Account. The ISIN of the Company is INE133A01011.

21. If the Registrar to the Buyback does not receive the documents listed in the LoF by 5.00 p.m. on the date of closure of the Buyback, then, notwithstanding the credit of the Shares in the Company Depository Account, the Buyback will be deemed to have been rejected by such shareholder and the Shares tendered by such shareholder will be returned to such shareholder not later than July 16, 2012 by way of a credit to the shareholder’s depository account. Conversely, if the Shares are not credited to the Company Depository Account by 5 pm on the date of closure of the Buyback, then, notwithstanding the receipt of the documents listed above by the Registrar to the Buyback by or before 5 pm on the date of closure of the Buyback, the Buyback Offer will be deemed to have been rejected by such shareholder.

22. In the event, that any Shares have to be returned to the shareholders and if the returned Shares are not credited to the shareholder’s beneficiary account for any reason whatsoever, the said Shares will be rematerialized and kept in physical form with the Company in trust for the shareholders until the Company receives specific directions from the shareholders with regard to these Shares.

23. The Company shall accept / return the tendered shares from the Eligible Persons in the following manner: • In case all the Shares tendered for the Buyback are accepted by the Company, then the delivery instruction given by

the shareholders to their DPs will be acted upon and consideration will be paid to the concerned shareholder as specified earlier on.

• In case all the Shares tendered for the Buyback are not accepted by the Company, then the Shares held in dematerialized form, to the extent not accepted for the Buyback will be returned to the beneficial owner to the credit of the beneficial owner’s depository account with their respective DP as per details furnished by the beneficial owner in the Form / as per those received electronically from the shareholder’s DP, under intimation to the first named beneficial owner by Registered Post or UCP. The Shares shall be transferred not later than July 16, 2012. In the event that there is a conflict between the details provided in the Form and those received electronically from the shareholder’s DP, the details received electronically shall prevail. However, the Shares so received are liable to be rejected and returned to the account as per the details provided electronically by the shareholder’s DP.

24. For Shares held in the Physical form, by Registered Shareholders a. Registered shareholders holding Shares in physical form are required to enclose a copy of the PAN card, the original

share certificate(s) and valid equity share transfer form(s) (for purpose of signature verifications)duly signed by the transferor (by all the equity shareholders in case the Shares are in joint names, with the names filled up in the same order in which they hold Shares in the Company) as per the specimen signatures lodged with the Company and duly witnessed at the appropriate place, while submitting the Form(s).

b. Shares held in physical form to the extent not accepted for Buyback will be returned to the beneficial owner after suitable sub-division, if any, in order to facilitate acceptance of share certificates tendered by them, through Registered Post or UPC, at the shareholders’ sole risk

c. If the Registrar to the Buyback does not receive the documents listed above by 5 pm on the date of closure of the Buyback, then, notwithstanding the receipt of the share certificates and valid transfer deeds as may be applicable, the

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Buyback offer will be deemed to have been rejected by such shareholder and the share certificates and valid transfer deeds shall be returned to such shareholder not later than July 16, 2012. Conversely, if the share certificates and valid transfer deeds as may be applicable are not received by the Registrar to the Buyback by 5 pm on the date of closure of the Buyback, then, notwithstanding the receipt of the documents listed above by the Registrar to the Buyback by or before 5 pm on the date of closure of the Buyback, the Buyback Offer will be deemed to have been rejected by such shareholder.

25. For Shares held by Non-resident shareholders a. Non-resident shareholders (excluding FII) should also enclose a copy of the permission received by them from RBI if

applicable, to acquire the Shares held by them in the Company. b. In case the Shares are held on repatriation basis, the non-resident shareholder should obtain and enclose a letter from

its authorized dealer/bank confirming that at the time of acquiring the said Shares, payment for the same was made by the non-resident shareholder from the appropriate account as specified by RBI in its approval. In case the non-resident shareholder is not in a position to produce the said certificate, the Shares would be deemed to have been acquired on non-repatriation basis and in that case the holder shall submit a consent letter addressed to the Company, allowing the Company to make the payment on a non-repatriation basis in respect of the valid Shares accepted under the Buyback.

If any of the above stated documents, as applicable, are not enclosed along with the Form, the Shares tendered under the Buyback are liable to be rejected.

26. Settlement Procedure: Subject to Clause 17 of the LoF, the Company will pay the consideration to the shareholders in respect of the Shares bought back within seven working days of closing of the Buyback i.e July 16, 2012, in accordance with the Regulations.

1) The payment of consideration for accepted applications shall be made by the Company to the sole / first shareholder, the details of which are recorded with the Company / DP as applicable. Payment shall be made electronically through NECS (subject to availability of all information for crediting the funds), Direct Credit, Real Time Gross Settlement, National Electronic Fund Transfer, other modes as may be opted in the Form. For physical cases/all other cases other than above through Demand drafts / Pay Order/ similar instruments payable at par at all the centres where the Company is accepting applications and centres where the Company would have to open collection centres if it were carrying out a public issue of a size equal to the Buyback Size / at places where the address of the shareholder is registered and the same shall be drawn in the name of the first named person in case of joint shareholders. In the event that the amount payable to a tenderer exceeds Rs.1,500, the instrument for such payment shall be sent by registered post.

2) In order to avail NECS, shareholders holding Shares in physical form are requested to submit the NECS mandate form duly filled in and signed while submitting the Form if the same has not been submitted earlier to the Company / Registrar & Share Transfer Agents or there is a change in Bank details. Shareholders holding Shares in dematerialized form are requested to instruct their respective DP regarding bank accounts in which they wish to receive consideration before the close of the Buyback. The Company / Registrar & Share Transfer Agents will not act on any direct request received from shareholders holding Shares in dematerialized form for change / deletion of such bank details.

3) The payment to the shareholders would be done through various electronic modes including but not restricted to the below in the following order of preference as may be applicable.

o National Electronic Clearing System (‘NECS’) - By NECS for Applicants having a bank account at the designated centers. This mode of payment of consideration amount would be subject to availability of complete bank account details including the MICR code, IFSC code, bank account number, bank name and branch name as appearing on a cheque leaf, from the Depositories. Payment would be done through NECS for Shareholders having an account at any of the designated centres. The payment through NECS is

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mandatory for Shareholders having a bank account at any of the designated centres, except where the Shareholder, being eligible, opts to receive payment through direct credit or RTGS.

o Direct Credit - Shareholders having bank accounts with the Escrow Agent, as mentioned in the Tender Form, shall be eligible to receive payments through direct credit. Charges, if any, levied by the Escrow Agent for the same would be borne by the Company.

o Real Time Gross Settlement (RTGS) - Shareholders having a bank account at any of the RBI mandated centers and whose amount exceeds Rs. 2 Lakhs, have the option to receive the payment through RTGS. Such eligible Shareholders who indicate their preference to receive payment through RTGS are required to provide the IFSC code in the Form of Acceptance-cum-acknowledgement form. In the event the same is not provided, payment shall be made through NECS/other modes. Charges, if any, levied by the Escrow Agent for the same would be borne by the Company. Charges, if any, levied by the Shareholder’s bank receiving the credit would be borne by the Shareholder.

4) National Electronic Fund Transfer (‘NEFT’) - Payment shall be undertaken through NEFT wherever the Shareholder’s bank has been assigned the Indian Financial System Code (‘IFSC’), which can be linked to a MICR, if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment, duly mapped with MICR numbers. Wherever the Shareholders have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment will be made to the Shareholder through this method. The process flow in respect of payments by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational feasibility, cost and process efficiency. In the event that NEFT is not operationally feasible, the payment would be made through any one of the other modes as discussed above.

5) All Shareholders are requested to determine the tax implications of Buyback and are advised to consult their tax advisors for the treatment that may be given by their respective assessing officers in their case, and the appropriate course of action that they should take.

6) The Shares lying to the credit of the Company Depository Account will be extinguished in the manner specified in the Regulations.

7) All documents sent by shareholders and all remittances to shareholders will be at their own risk. Shareholders are advised to adequately safeguard their interests in this regard.

21. NOTE ON TAXATION Based on the opinion obtained by the Company, request you to kindly note the following:

1.0 Shares can be classified under the following two categories:

• Shares held as investment (Taxable under the head “Capital Gains”)

• Shares held as stock-in-trade (Taxable under the head “Business Income”) 1.1 Based on the provisions of the Act, shareholders can be classified under the following categories:

a. Resident shareholders being - Individuals, HUF, AOP and BOI - Others

b. Non resident shareholders being - Non-Resident Indians (NRIs) - Foreign Institutional Investors (FIIs)

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- Others Company Other than Company

2.0 SHARES HELD AS INVESTMENT: 2.1 Capital Gains on buyback of share are governed by the provisions of section 46A of the Act. As per the provisions of

section 46A, buyback of shares would attract capital gains in the hands of shareholders subject to the provisions of section 48 of the Act.

2.2.0 Resident Shareholders: 2.2.1 For Individuals, HUF, AOP and BOI, Long Term Capital Gains (LTCG) is taxable at lower of following:

• @ 20% (with indexation)

• @ 10% (without indexation)

For Individuals, HUF, AOP and BOI, Short Term Capital Gains (STCG) is taxable at applicable slab rates.

2.2.2 In any other case of persons except those mentioned in 2.2.1 above, LTCG would be taxable at lower of following:

• @ 20% (with indexation)

• @ 10% (without indexation)

Further, STCG in these cases would be taxable @ 30%. 2.2.3 In addition, surcharge at the rate of 5% is leviable in case of companies if the total income exceeds Rs. 1 crore. Education Cess at the rate of 2% and Secondary and Higher Education Cess at the rate of 1% is leviable in all cases. 2.3.0 Non-resident shareholders: 2.3.1 For NRIs, LTCG would be leviable under 115E of the Act at the rate of 10% (without indexation benefit). However, for

section 115E to apply, it is imperative that the transaction is in foreign currency. STCG would be taxable at slab rates. In case the transaction is not in foreign currency, then the provisions of section 115E would not apply. In such cases LTCG would be taxable @ 20% (after indexation) or 10% (without indexation), whichever is lower. It may further be stated that for the purpose of computation of LTCG, the benefit of basic exemption limit would not be allowed in case of NRIs. Further, STCG would be taxed at slab rates.

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2.3.2 In case of FIIs, both LTCG and STCG would be taxable in accordance 115AD of the Act at the rate of 10% and 30%

respectively.

It may further be noted that for FIIs, both first as well as second proviso to section 48 of the Act would not apply.

2.3.3 In case of Foreign Companies, LTCG1 would be taxable @ 20% (without indexation) where transaction is in foreign currency. However, if transaction is not in foreign currency, then benefit of indexation would apply in case of LTCG and tax would be calculated at lower of 20% (with indexation) and 10% (without indexation). Further, STCG would be taxable @ 40%.

2.3.4 In case of all non-resident assesses except those mentioned in 2.3.1, 2.3.2 and 2.3.3 above, LTCG would be taxable

@ 20% (without indexation) where transaction is in foreign currency. However, if transaction is not in foreign currency, then benefit of indexation would apply in case of LTCG and tax would be calculated at lower of 20% (with indexation) and 10% (without indexation). STCG would be taxable as per the slab rates or maximum marginal rate as applicable.

2.3.5 In addition, surcharge at the rate of 2% is leviable in case of foreign companies if the total income exceeds Rs. 1

crore. Education Cess at the rate of 2% and Secondary and Higher Education Cess at the rate of 1% is leviable in all cases. 3.0 SHARES HELD AS STOCK IN TRADE: 3.1 If the shares are held as stock in trade by any of the shareholders, then the gains would be characterised as business

income. In such a case, the provisions of section 46A of the Act would not apply. 3.2 For resident individuals, HUF,AOP, BOI, profits would be taxable at slab rates.

3.3 For resident persons other than individuals, HUF, AOP, BOI profits would be taxable at the rate of 30% 3.4 No benefit of indexation by virtue of period of holding would be available in any case. 3.5 For non-residents, taxability of profits as business income would be subject to beneficial provisions of applicable

Double Taxation Avoidance Agreements (DTAA). 3.6 In case no DTAA provisions are applicable, then for non-resident individuals, HUF, AOP, BOI, profits would be taxable at slab rates and in case of foreign companies, profits would be taxed in India at the rate of 40%.

 

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3.7 Surcharge would be applicable in case of domestic companies @ 5% and in case of foreign companies @ 2% in case

the total income exceeds Rs. 1 Crore. Education Cess @ 2% and Secondary and Higher Education Cess @ 1% would be applicable in all cases. 4.0 Notes 4.1 In the case of non-resident shareholders, first proviso to section 48 would apply only in case the transactions are in

foreign currency. 4.2 There are conflicting views on the applicability of second proviso of section 112 (beneficial rate of 10% when

indexation is not applied) in case where first proviso to section 48 is applicable. We understand that the matter is sub-judice:

In Favour

• Mcleod Russel India Limited (AAR No. 763 of 2007)

• Timken France SAS (AAR No. 739 of 2006) Against

• Basf Aktiengesellschaft –vs.- Deputy DIT (2006) 293 ITR 001 (Mum-Tri)

• Cairn UK Holdings Ltd (AAR No. 950 of 2010)

4.3 All the above rates (especially for non-residents) are to be read subject to the provisions of section 206AA of the Act. 5.0 WITHHOLDING TAX: 5.1 Tax to be deducted in case of non resident shareholders including NRIs

5.1.1 As per the provisions of section 195(1) of the Act, any person responsible for paying to a non-resident any sum

chargeable to tax is required to deduct tax at the prescribed rate (including applicable surcharge and education cess). 5.1.2 The consideration payable under the buyback offer would be chargeable to tax as capital gains or business profits, as

the case may be. Accordingly, the purchaser shall deduct tax at the prescribed rate (including applicable surcharge and education cess) on the gross consideration payable to the non resident shareholders based on the information requested and submitted along with the Tender Form.

5.1.3 In case of any ambiguity, incomplete or conflicting information or information not being provided to the purchaser by the non resident shareholders, the tax shall be deducted at the maximum rate prescribed for such non resident shareholder.

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5.1.4 If the non resident shareholders require the purchaser not to deduct tax or to deduct tax at a lower rate or on a lower

amount for any reason, they would need to obtain a certificate from the Income Tax authorities either under section 195(3) or under section 197 of the Act, and submit the same to purchaser while submitting the Tender Form. In absence of such certificate from the Income Tax authorities, the purchaser shall deduct tax on gross consideration at the prescribed rate of tax.

5.1.5 In case where non resident shareholder is the tax resident of a country which has entered into a Tax Treaty with India,

it may be possible for the non resident shareholder to avail the beneficial provisions, if any, under the Tax Treaty. If the non resident shareholder opts to avail the beneficial provisions as per Tax Treaty, a certificate from the tax authorities, of the country of which such person is the tax resident, certifying the tax residence of such person needs to be provided to the purchaser along with the Tender Form. In absence of such certificate, the purchaser shall deduct the tax as per clauses 1.1.1 to 1.1.4 above.

5.1.6 In case of an individual non – resident shareholder, who is either a citizen of India or a person of Indian Origin, who has acquired equity shares of the purchaser in convertible foreign exchange and has also held such shares for at least twelve months prior to the date of tender offer for purchase of such shares the applicable rate of tax deduction at source would be 10.30% on entire consideration payable to such shareholder.

5.2 Withholding tax implication for Foreign Institutional Investor (‘FII’) 5.2.1 As per the provisions of Section 196D(2) of the Act, no deduction of tax at source shall be made from any income by

way of capital gains arising from the transfer of securities referred to in section 115AD payable to a FII as defined in section 115AD of the IT Act.

5.2.2 Foreign Institutional Investor should certify the nature of its income arising from the sale of shares (whether capital

gains or business profits). In absence of certification to the effect that the income from sale of shares is in the nature of capital gains, the purchaser shall deduct tax at the prescribed rate under the Act, on the gross consideration payable. Should FII submit a Certificate from the Income Tax authorities along with the Tender Form indicating the amount or rate of tax to be deducted, the Purchaser shall deduct tax in accordance with the same.

5.2.3 In the absence of FII Certificate to the effect that their income from transfer of shares is in the nature of capital gains,

the purchaser will deduct tax at the rate applicable to the category to which such FII belongs on the entire consideration payable to such FII.

5.3 Tax to be deducted in case of Resident shareholders 5.3.1 In absence of any specific provision under the Act, purchaser shall not deduct tax on the consideration payable to

resident shareholders for acquisition of shares. 5.4 Other Information

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5.4.1 Non-resident Shareholders (including FII) are required to submit their Permanent Account Number (“PAN”) for income-tax purposes. In case of Non – Residents (including FII), if PAN is not submitted or is invalid or does not belong to the shareholder, purchaser will arrange to deduct tax at the rate of 20% (twenty percent) or at the rate in force or at the rate specified in the relevant provisions of the Act, whichever is higher in accordance with provisions of Section 206AA of the Act.

5.4.2 Under any circumstances, the purchaser will not accept any request from any shareholder for non deduction of tax at

source or deduction of tax at lower rate on the basis of any self computation / computation by any tax consultant of capital gain and tax payable thereon.

5.4.3 The purchaser shall issue a certificate in the prescribed form to the shareholders (resident and non resident) who have

been paid the consideration after deducting of tax on the same certifying the amount of tax deducted and other prescribed particulars.

5.4.4 For the purpose of computing the tax deduction at source, shareholders who wish to tender their shares must submit

the information as required along with the Tender Form. 5.4.5 The tax deducted under this buyback offer is not the final liability of the shareholders or in no way discharge the

obligation of shareholders to disclose the amount received in pursuant to this offer. 5.4.6 SHAREHOLDERS ARE ADVISED TO CONSULT THEIR TAX ADVISORS FOR THE TREATMENT THAT MAY BE

GIVEN BY THEIR RESPECTIVE ASSESSING OFFICERS IN THEIR CASE, AND THE APPROPRIATE COURSE OF ACTION THAT THEY SHOULD TAKE. THE PURCHASER DOES NOT ACCEPT ANY RESPONSIBILITY FOR THE ACCURACY OR OTHERWISE OF SUCH ADVICE.

5.4.7 THE TAX RATE AND OTHER PROVISIONS MAY UNDERGO CHANGES.

22. DECLARATION BY THE BOARD OF DIRECTORS Declaration as required under clause (ix) and clause (x) of Part A of Schedule II to the Regulations, as under: 1. The Board of Directors of the Company confirms that there are no defaults subsisting in the repayment of deposits,

redemption of debentures or Preference Shares or repayment of term loans to any financial institutions or banks. 2. The Board of Directors of the Company hereby confirms that based on such full inquiry conducted into the affairs and

prospects of the Company, and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Act, the Board of Directors has formed an opinion that: - Immediately following the date of the Board meeting held on May 21, 2012, there are no grounds on which the

Company can be found unable to pay its debts; - As regards the Company’s prospects for the year immediately following the date of the Board meeting held on May 21,

2012, and having regard to the Board’s intention with respect to the Management of Company’s business during that year, and to the amount and character of the financial resources which will in the Board’s view be available to the Company during that year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date; and

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- In forming an opinion as aforesaid, the Board of Directors have taken into account the liabilities, as if the Company were being wound up under the provisions of the Act (including prospective and contingent liabilities)

This declaration is made and issued under the authority of the Board in terms of the resolution passed at the meeting held on May 21, 2012. For and on behalf of the Board of Directors of Akzo Nobel India Limited

Sd/- Sd/- Sd/-

Amit Jain Managing Director

Partha Sarathi Basu Whole Time Director

R Guha Company Secretary

23. AUDITORS CERTIFICATE The text of the report dated May 23, 2012 received from M/s B S R & Associates, Chartered Accountants, the statutory auditors of the Company addressed to the Board of Directors of the Company is reproduced below: We have been informed that the Board of Directors in their meeting held on 21 May 2012 have decided to buy-back Company’s Shares as allowed under Section 77A of the Companies Act, 1956. In this connection, we confirm as under:-

(i) We have inquired into the state of affairs of the Company in relation to its accounts for the year ended March 31, 2012, which were taken on record by the Board of Directors in the meeting held on 21 May 2012 and audited by us.

(ii) The amount of permissible capital payment towards buy-back of Equity Shares in question as ascertained below, has been properly determined in accordance with Section 77 A(2)(c) of the Companies Act, 1956:

(Rs. in million) Particulars As at March 31, 2012

Paid up equity share capital as on 31 March 2012 (36,834,331 Equity Shares of Rs. 10 each, fully paid-up)

368

“Free Reserves” (excluding capital, capital redemption and revaluation reserves) as on 31 March 2012 [as defined in Section 77A read with explanation (b) of Section 372A of the Companies Act, 1956]

13,390

Total 13,758 Maximum amount permitted for buy-back i.e. 10% of the total paid-up Equity Share capital and free reserves

1,375

(iii) Based on the representations made by the Company and other information and explanations given to us, which to the best of our knowledge and belief were necessary for this purpose, we report that the Board of Directors in their meeting held on 21 May 2012 have formed their opinion, as specified in clause (x) of Part A of Schedule II of the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, on reasonable grounds that the Company will not, having regard to its state of affairs, be rendered insolvent within a period of one year from that date.

24. DOCUMENTS FOR INSPECTION Copies of the following documents will be available for inspection at the Registered Office of the Company at Geetanjali Apartment, 1st Floor, 8B, Middleton Street, Kolkata 700 071 between 10 a.m. and 5.00 p.m. on all working days (Monday to Friday) during the offer period: 1. Certificate of Incorporation of Akzo Nobel India Limited 2. Memorandum and Articles of Association of Akzo Nobel India Limited 3. Annual report of Akzo Nobel India Limited for the years 2008-09, 2009-10, 2010-11 and audit report as for the year

ended March 31, 2012 4. Copy of Escrow Agreement dated May 30. 2012 between ICICI Securities Limited, ICICI Bank and Akzo Nobel India Limited

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5. Certificate from M/s Shareef & Associates, Chartered Accountants dated May 29, 2012 certifying that the Company has made firm financing arrangements for fulfilling the obligations under the Buyback, in accordance with the Regulations

6. Copy of the Certificate dated May 23, 2012 received from the statutory auditors of the Company M/s B S R & Associates, in terms of clause (xi) of Part A to Schedule II of the Buyback Regulations

7. Copy of resolution passed by the Board of Directors at their meeting held on May 21, 2012 approving the Buyback and Copy of resolution passed by the Authorized Committee for the Buyback in its meeting held on May 21, 2012, following the Board meeting

8. Copy of Declaration of solvency and an affidavit verifying the same as per Form 4A of the Companies (Central Governments) General Rules and Forms, 1956

9. Copy of Public Announcement dated May 23, 2012 published in the newspapers on May 23, 2012 regarding Buyback of Equity Shares.

10. Opinion on taxation from M/s. Pricewaterhouse Coopers Pvt. Ltd., dated May 30, 2012. 25. DETAILS OF THE COMPLIANCE OFFICER Mr. R. Guha, Company Secretary, Akzo Nobel India Limited DLF Cyber Terraces, Building No 5, Tower A, 20th Floor, Cyber City, DLF Phase III, Gurgaon 122 002, India Tel. No.: +91 124 254 0400, Fax No.: +91 124 254 0849, E-mail: r.guha@akzonobel.comInvestor may contact the Compliance Officer for any clarification or to address their grievances, if any, during office hours i.e. 9 am. to 5 pm. on all working days except holidays. 26. DETAILS OF THE REMEDIES AVAILABLE TO THE SHAREHOLDERS/ BENEFICIAL OWNERS 1. In case of any grievances relating to the Buyback (i.e.: non-receipt of Buyback consideration, Share certificate, demat credit,

etc.) the investor can approach the Compliance Officer for redressal. 2. If the Company makes any default in complying with the provisions of Section 77A of the Act or any rules made there-under,

or any regulation made under clause (f) of sub-section (2) of Section 77A, the Company or any officer of the Company who is in default shall be punishable with imprisonment for a term and its limit, or with a fine and its limit or with both in terms of the Act.

3. The address of the concerned office of the Registrar of Companies is as follows:

Office of the Registrar of Companies, West Bengal Ministry of Corporate Affairs Nizam Palace, 2nd M S O Building, 2nd Floor 234/4, A J C Bose Road, Kolkata 700 020

27. DETAILS OF INVESTOR SERVICE CENTRES In case of any query, the shareholders may contact the Registrar & Transfer Agent on any day during the Offer period, except Saturday, Sunday and Public holidays between 10 AM and 4 PM at the following address:

C B Management Services (P) Ltd

P-22, Bondel Road, Kolkata 700 019

Contact Person: Mr Shankar Ghosh

Tel No.: +91 33 40116700, Fax No.: +91 33 40116739, Email: akzobuyback@cbmsl.com

28. DETAILS OF THE MANAGER TO THE BUYBACK The Company has appointed the following as Manager to the Buyback

ICICI Securities Ltd ICICI Centre, H.T. Parekh Marg, Churchgate, Mumbai – 400 020 Tel No.: +91 22 2288 2460 Fax No.: +91 22 2282 6580, E-mail: akzonobel.buyback@icicisecurities.com, Contact Person: Amit Joshi / Vishal Kanjani SEBI Registration Number: INM000011179 Validity Period: Valid till July 08, 2013

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29. DECLARATION BY THE DIRECTORS REGARDING AUTHENTICITY OF THE INFORMATION IN THE DRAFT LETTER OF OFFER

As per Regulation 19(1)(a) of the Buyback Regulations, the Directors of the Company accept full and final responsibility for the information contained in this Draft Letter of Offer. The Letter of Offer is issued under the authority of the Board through Resolutions passed by the Board of Directors of the Company at their meeting held on May 21, 2012 For and on behalf of the Board of Directors of Akzo Nobel India Limited

Sd/- Sd/- Sd/-

Amit Jain Managing Director

Partha Sarathi Basu Whole Time Director

R Guha Company Secretary

Place: Gurgaon

Date: May 30, 2012