3M India Ltd

To the Members of 3M India Limited,

Your Directors are pleased to present the Thirty Seventh (37th) Annual Report of the Company. The Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2024 are prepared in compliance with the applicable provisions of the Companies Act, 2013 including Indian Accounting Standards. The audited Standalone and Consolidated Financial Statements together with the Auditors' Report thereon form a part of the Annual Report.

FINANCIAL HIGHLIGHTS - STANDALONE AND CONSOLIDATED

(Rs in lakhs)

DIVIDEND

The Board is pleased to recommend a dividend of Rs. 685/- per equity share (final dividend of Rs. 160/- per equity share and special dividend of Rs. 525/- per equity share) at its meeting held on May 28, 2024. This payment is subject to the approval of the Members in the ensuing Annual General Meeting of the Company. The dividend will be paid to all those equity shareholders of the Company whose names appear in the Register of Members and whose names appear as beneficial owners as per the beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited as on record date fixed for this purpose.

The Board of Directors approved the Dividend Distribution Policy on February 9, 2017 in terms of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015. The Policy is available at https:// www.3mindia. in/3M/en_IN/company-in/about-3m/financial-facts-local/ and the same is annexed as "Annexure J", which forms part of this report.

Transfer of dividend to the Investor Education and Protection Fund, if any: NA

TRANSFER TO RESERVES

The Company does not propose to transfer any amounts to general reserves.

STATE OF COMPANY'S AFFAIRS

India's economy remained stable and demonstrated robust recovery across all sectors, despite facing challenges from global macro-economic conditions. Despite headwinds such as supply chain constraints, rising inflation, and energy costs, among other factors, the Company continued to create value for all stakeholders through strong performance, achieving growth in both topline and bottomline. This performance was made possible by several enabling external factors, coupled with a sharp focus on addressing customer issues, managing costs and prioritising tasks.

Strong growth in automobile and industrial market segments

India's automotive industry plays a crucial role in both the country's GDP and manufacturing sector. Furthermore, the increasing uptake of electric vehicles has created avenues for the Company to introduce innovative products and solutions. Alongside, the Company's offerings in the automotive value chain encompass a range of solutions, including adhesives, abrasives, and products tailored for the automotive aftermarket segments. Demonstrating the commitment to growth, the Company expanded the presence across diverse segments of the broader industrial market.

Increased Government spending on infrastructure projects

The heightened capital expenditure allocations in the Government's budget, aimed at modernising roads, railways, developing regional airports, and undertaking key infrastructure projects, have presented growth opportunities for the Company. Specifically, these initiatives have bolstered demand for the Company's transportation safety solutions as well as commercial and industrial offerings.

Attractive policy initiatives for emerging sectors

The government's policy initiatives, particularly the Product Linked Incentive (PLI) schemes, aimed at investing in growing sectors like mobile phones, electronics manufacturing, and defense, have positively influenced the manufacturing ecosystem. The Company has strategically aligned with key manufacturing firms by supplying materials, thereby contributing to the promotion of manufacturing activities.

Growth in modern trade and e-commerce channels

During the fiscal year, there was a notable improvement in domestic consumption, which significantly fueled the expansion of modern trade and ecommerce channels. This uptick in consumption played a pivotal role in boosting the penetration of various consumer products from the Company's home improvement and cleaning portfolio, consequently driving market share forward.

Discipline in operational execution

The Company successfully maintained a stable cash position and effectively managed costs across all facets of the business. To mitigate the impact of inflation, we implemented strategic price adjustments and proactively streamlined costs to navigate other constraints throughout the year.

Managing supply chain and raw material

During FY 23-24, the Company's sourcing operations continued to monitor the markets and optimised the costs across the goods and services, including raw materials procured.

On a standalone basis, the Company's revenue from operations increased by 5.18% at Rs. 392,676.43 lakhs for the financial year ended March 31, 2024 compared to Rs. 373,344.21 lakhs in the previous financial year. The Profit before Interest and Depreciation is Rs. 77,334.19 lakhs compared to Rs. 62,401.29 lakhs for the previous financial year. Profit before Tax is Rs. 71,830.60 lakhs compared to Rs. 56,079.61 lakhs for the previous financial year. The operating margin for the current year is 19.36% compared to 16.43% for the previous financial year. Total Comprehensive Income is Rs. 53,500.82 lakhs compared to Rs. 41,658.80 lakhs for the previous financial year. Export Sales is Rs. 1,562.08 lakhs for the financial year ended March 31, 2024 compared to Rs. 2,188.81 lakhs in the previous financial year, a decrease of 28.63% due to lower demand in the global market.

On a standalone basis, the Safety and Industrial business increased by 1.53%; Transportation business increased by 5.70%; Health Care business increased by 14.51%; and Consumer business increased by 4.46%.

The Earnings Per Share (Basic and Diluted) of the Company for FY 23-24 was Rs. 476.05 per share as compared to Rs. 369.41 per share in the previous financial year, with an increase of 28.87%. Detailed analysis of the performance has been discussed in the Management's Discussion and Analysis Section of the Annual Report.

Portfolio Management

On April 1, 2024, 3M Company, USA completed the planned spinoff of its Health Care business, formally launching Solventum Corporation as an independent company. As disclosed in the Company's Stock Exchange filing dated April 1, 2024, the Company will be an exclusive licensed manufacturer and reseller as well as independent distributor for Solventum's healthcare products in India.

Scheme of Arrangement between the Company and 3M Electro & Communication India Private Limited

The Board of Directors of the Company and of 3M Electro & Communication India Private Limited (3M E&C), wholly owned subsidiary of the Company at their Meetings held on September 17, 2021 had approved the Scheme of Amalgamation of 3M E&C with the Company under Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme of Amalgamation of 3M E&C with the Company has been filed with Hon'ble National Company Law Tribunal (NCLT) to amalgamate the wholly owned subsidiary. Hon'ble National Company Law Tribunal, Chennai, vide its order dated August 25, 2023, has sanctioned the aforesaid scheme. As on date of approval of financial statements, the Scheme is pending with Hon'ble National Company Law Tribunal, Bengaluru for Orders.

Information Technology

The Company operates an Information Security Management System (ISMS), centered at the Head Office, St. Paul, USA which is certified to the requirements of ISO/ IEC 27001:2013 and has continued to meet the certification requirements since 2014. In 2022, we added ISO/IEC 27017:2015 requirements for cloud services. Enhancing and optimising cybersecurity protection continues to remain one of the top priorities. The Company conducts monthly social engineering simulation assessments for all users globally to increase their knowledge on how to identify and report phishing attempts. Training is delivered to employees worldwide on an annual basis to mitigate human-based cybersecurity risk. Awareness efforts include relevant communications disseminated on various channels to promote a secure culture within 3M. Other frameworks include NIST CSF (The National Institute of Standards and Technologies, Cybersecurity Framework) which is a crossindustry standardised framework that several organisations use to manage their cybersecurity programmes. NIST CSF provides a common language and lifecycle approach to understand, manage and express cybersecurity risks. It helps identify and prioritise actions to reduce risk and aligns policy, business and technology approaches to manage that risk. The cybersecurity landscape is constantly evolving and new threats and challenges emerge. The Company consistently reviews and re-evaluates its capabilities to identify and respond to these threats.

Supply Chain

Global transportation which improved considerably till Q3' FY 23-24, faced headwinds due to geopolitical tensions in Red Sea region during Q4' FY23-24, impacting shipping timelines and freight, needing continued vigilance and planning to migrate risk associated with rea sea transit routes.

Contribution to Exchequer

During FY 23-24, the Company paid various taxes on account of its business/operation viz., CGST, IGST, Direct Taxes and Customs Duty amounting to Rs. 130,333 lakhs in aggregate.

Investments

Capital Investments during FY 23-24 was Rs. 3,133.33 lakhs (Net of capital work-in-progress and capital advances) (PY 22-23: Rs. 6,009.47 lakhs).

INFORMATION ON THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THE SUBSIDIARIES/ ASSOCIATES/JOINT VENTURE

In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statement of the Subsidiary Company in Form AOC-1 is provided as "Annexure K", which forms part of this report.

3M Electro & Communication India Private Limited (3M E&C)

During the year under review, the revenue from operations of 3M E&C increased to Rs. 33,631.55 lakhs compared to Rs. 28,525.29 lakhs in FY 22-23. The Profit before tax for FY 23-24 was Rs. 6,290.82 lakhs as against Rs. 4,682.33 lakhs in FY 22-23. The Profit after tax for FY 23- 24 was Rs. 4,714.51 lakhs as against Rs. 3,505.66 lakhs in FY 22-23. The Total Comprehensive Income was Rs. 4,707.54 lakhs for FY 23-24 as against Rs. 3,502.20 lakhs in FY 22-23.

In accordance with the third proviso to Section 136(1) of the Companies Act, 2013, the Audited Financial Statements of the Subsidiary Company for FY 23-24 have been placed on the website of the Company https://www.3mindia.in/3M/ en_IN/company-in/about-3m/ financial-facts-local/.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and/or commitments affecting the financial position of the Company since the close of the financial year and till the date of this report.

CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report is annexed herewith as "Annexure A", which forms part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDER INFORMATION

A separate Report on Corporate Governance in terms of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "Listing Regulations") along with a Certificate from a Practicing Company Secretary regarding compliance to the conditions stipulated under Chapter IV of the Listing Regulations is provided as "Annexure B", which forms part of this report.

BUSINESS RESPONSIBILITYANDSUSTAINABILITY REPORT

A separate section on Business Responsibility and Sustainability Report (BRSR) is annexed as "Annexure C" and forms a part of this report as required under Regulation 34(2)(f) of the Listing Regulations.

SHARE CAPITAL EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS

The Company has only one class of Share, i.e. Equity Share with a face value of Rs. 10/- each. The Authorised/Issued/ Subscribed and fully Paid-up Share Capital as at March 31, 2024 is Rs. 112,650,700 (divided into 1,12,65,070 Equity Shares of Rs. 10/- each).

During the year under review, the Company has not issued Equity Shares nor Shares with differential voting rights nor granted Stock Options nor Sweat Equity.

LISTING WITH STOCK EXCHANGES

The Company has to date paid the requisite listing fee to the National Stock Exchange of India Limited and BSE Limited where the Company's Equity Shares are listed.

Appointment and Re-appointment:

The following appointment and re-appointment were made during the financial year till the date of the report:

• Mr. Amit Laroya (DIN: 00098933) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The details of Mr. Amit Laroya are provided in the Notice of the Annual General Meeting. The Board of Directors recommends his re-appointment.

• The Board of Directors of the Company, on recommendation of the Nomination and Remuneration Committee, at its meeting held on May 28,2024 has appointed, Mr. Narumanchi Venkata Sivakumar (DIN: 03534101) as an Additional Director in the category Non-Executive Independent Director of the Company with effect from July 15, 2024. Pursuant to provisions of Regulation 17(1C) of Listing Regulations the approval of Members for the appointment of Mr. NV Sivakumar to the Board is being sought at the 37th Annual General Meeting of the Company.

Resignation:

As also indicated in the last year's Annual Report, Mr. James Ernest Falteisek (DIN: 08792857) resigned as a Director of the Company from the close of India business hours of May 30, 2023 consequent upon his retirement from the 3M Group. The Board places on record its appreciation for the contributions made by him to the progress of the Company during his tenure as Director of the Company.

KEY MANAGERIAL PERSONNEL (KMP)

As at the financial year ended March 31, 2024, Mr. Ramesh Ramadurai, Managing Director, Ms. Vidya Sarathy, Whole-time Director and Chief Financial Officer and Mr. Pratap Rudra Bhuvanagiri, Company Secretary and Compliance Officer, were the Key Managerial Personnel of the Company.

DECLARATIONS FROM INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director of the Company under the provisions of Section 149(7) of the Companies Act, 2013, that they meet the criteria of Independence laid down under the provisions of Section 149(6) of the Companies Act, 2013 read with Listing Regulations. All the Independent

Directors have also confirmed under Regulation 16(b) of SEBI (LODR) Regulations, 2015 that they are not NonIndependent Director of another Company on the Board of which any Non- Independent Director of the listed entity is an Independent Director.

DETAILS OF BOARD AND COMMITTEE MEETINGS DURING THE FINANCIAL YEAR

During FY 23-24, Seven (7) Meetings of the Board were held. The Company has Five (5) Board Committees. The composition and number of Meetings attended by each Director/Committee Member are furnished in the Corporate Governance Report.

COMPOSITION OF AUDIT COMMITTEE

As on the financial year ended March 31, 2024, the Audit Committee of the Company consisted of Three (3) Non-Executive Independent Directors and One (1) NonExecutive Director and all of them have financial and accounting knowledge. The Members of the Committee as on March 31, 2024, are Mr. Biren Gabhawala (Chairman), Mr. Bharat D. Shah, Ms. Radhika Rajan and Ms. Yun Jin. The Committee comprises majority of Independent Director. The Board has accepted all the recommendations made by the Audit Committee during the year under review.

NOMINATION AND REMUNERATION COMMITTEE POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Policy for the selection and appointment of Directors, Senior Management and other employees and their remuneration. The Policy is available at https://www.3mindia.in/3M/en_IN/company- in/about-3m/financial-facts-local/.

The composition, criteria for selection of Directors and the terms of reference of the Nomination and Remuneration Committee is stated in the Corporate Governance Report.

ANNUAL BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and Directors pursuant to the requirements of the Companies Act, 2013, Listing Regulations and as per the Guidance Note issued by SEBI. Further, the Independent Directors, at their separate meeting held during the year, reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

DETAILS OF REMUNERATION OF DIRECTORS

Disclosure pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as "Annexure D", which forms part of this report.

REMUNERATION RECEIVED BY MANAGING/ WHOLE TIME DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY

During the year under review, no Commission or Remuneration was paid to the Executive Directors from Holding/ Subsidiary Companies.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of the knowledge and belief and according to the information and explanations obtained, your Directors state in terms of Section 134 (5) of the Companies Act, 2013 (the Act):

(a) that in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(b) that they had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended on that date.

(c) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) that they had prepared the annual financial statements on a going concern basis.

(e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company's Internal controls are aligned with 3M Global's internal control over financial reporting which is based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Controls — Integrated Framework (2013). This framework essentially has two elements: (1) structures, policies and guidelines designed to achieve efficiency and effectiveness in operations and compliance with laws and regulations and (2) an assurance function provided by Internal Audit.

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

The Company has in place adequate systems of internal controls commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use or losses, executing transactions with proper authorisation and ensuring compliance of corporate policies.

The Company, through its own Corporate Internal Audit Department, carries out periodic audits to cover all the offices, factories and key areas of business segments based on the plan approved by the Audit Committee and bring out any deviation to internal controls procedures. The Internal Auditor functionally reports to the Audit Committee and administratively to the Managing Director. The observations arising out of audit are periodically reviewed and compliance ensured. The summary of the Internal Audit observations and status of the implementation is submitted to the Audit Committee of the Board of Director. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board.

DISCLOSURE REGARDING FRAUDS

During the year under review, there were no frauds reported by the Auditor to the Audit Committee or to the Board.

DEPOSITS

During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any Loans, provided any guarantees or made any Investments covered under Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All Related Party Transactions (RPTs) which were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. All RPTs are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseeable and repetitive in nature. A statement exhibiting details of all actual RPTs versus the approval is placed before the Audit Committee for approval on a quarterly basis. A Policy on RPTs as approved by the Board is available at https:// www.3mindia.in/3M/en_IN/company-in/about-3m/ financial-facts-local/.

The Company being a part of 3M conglomerate, has rights to carry out the business within India and accordingly, has access to the Group's synergies, state of the art products and technologies, competencies and "3M" brand name which are very critical and essential to carry out its business operations more efficiently in an increasingly globalised and competitive scenario. As a part of its regular business, the Company purchases, avails/renders services from/to 3M Company, USA and/or its group companies at arm's length basis. None of the Directors and the Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.

The RPTs are necessary, normal to business and play a significant role in the Company's business operations and also form an integral part of the Company's business. An analysis of all the RPTs entered into and by the Company and the basis of charge was undertaken through a third- party professional firm.

The Company had obtained the approval of the Members through postal ballot notice dated November 9, 2022 for material related party transactions with 3M Company, USA and 3M Innovation Singapore Pte Ltd effective December 22, 2022 for the period of 1 year. The Company obtained the approval of the Members at the 36th Annual General Meeting held on August 25, 2023 for material related party transactions with 3M Innovation Singapore Pte Ltd for the period of 1 year i.e., upto the ensuing 37th Annual General meeting. Through postal ballot notice dated September 29, 2023, the Company obtained approval of Members for material related party transactions with 3M Company, USA on November 4, 2023 to be valid for a period of 1 year.

The Company proposes to seek approval of the Members for material related party transactions to be entered by the Company with 3M Company, USA and 3M Innovation Singapore Pte Ltd at the 37th Annual General Meeting, commencing from the date of Members' approval at the 37th Annual General Meeting to the 38th Annual General Meeting. The estimated/proposed RPTs are in the Ordinary and normal course of business and on Arms' Length basis and accordingly the Board recommends the Ordinary Resolution set forth in the Notice for the approval of the Member.

Details of the related party transactions as required under Section 134(3)(h) read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure E", which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to supporting communities in India through education, community and environmental programmes, with a focus on underrepresented and underserved communities. The Company helps build sustainable communities through strategic CSR investments and partnerships around the geographical areas of operation. Programmes are implemented in accordance with the activities listed under Schedule VII of the Companies Act, 2013. During FY 23-24, more than 60% of the CSR funds were allocated and spent towards education programmes, 27% on community programmes and 8% on environmental initiatives. The main project interventions under each of the focus areas have been highlighted below:

EDUCATION:

As a science-based company, 3M is motivated to support equitable pathways to science and technology education. During FY 23-24, the Company implemented a STEM Scholarships programme for undergraduate girls, expanded the existing STEM education programme to Government schools in other locations and continued to support the education of girl students in rural areas.

1. Project Nanhi Kali: Educating the Girl Child:

The Company has been supporting the Girl Child Education initiative in partnership with K.C. Mahindra Trust since 2018. In FY 23-24, the Company continued to invest in the education of 2861 girls under the Project Nanhi Kali initiative, in 189 Academic Support Centers in the rural blocks of Ambegaon and Khed in Pune District, Maharashtra. Over the years, the programme has introduced several interventions to improve learning levels and increase the confidence of the students to pursue higher education. Digital learning aids were introduced which has enhanced learning outcomes. Life skills and physical education curriculum were introduced to provide all round learning to the students.

During the year, approximately 450 hours of training was provided to each girl in the project and 50 hours of training to every Community Associate.

To encourage an interest in sports, Project Nanhi Kali conducts the annual Toofaan Games at the village, district and National levels across all the Academic Support Centers in India. 9 Nanhi Kalis supported by the programme were selected to participate at the National level of the Games with one girl bagging a gold medal, and another girl winning a bronze medal in the 50m race.

The retention rate is an important metric to ensure the programme helps the girls stay in school and complete their education. The overall retention rate for the year was 91%.

Each year, the number of students appearing for the 10th standard examination has been on the rise. During FY 23-24, 171 girls appeared for the exam in March 2024.

The Company also felicitates the graduates of the programme every year to motivate the students to pursue higher education. Last year, the Company felicitated 93 graduates out of the 139 students who completed Class 10. Most of the graduates passed with distinction. Two students (scoring 91% and 81%) received the Mahindra All India Talent Scholarship.

This programme has ensured that the 2861 girls committed for funding continue their education and are not taken out of schools to send off to work in the fields or engage in housework or sibling care. The parents are motivated to see their girls shine in school and are supportive of their higher education, which is a promising outcome of this long standing initiative.

2. 3M Wonder Tinkering Labs Programme to encourage and promote Science:

During FY 23-24, the Company continued to invest in the Wonder Tinkering Lab initiative initiated in FY 2223. The programme was formally launched in 2023 at Pune. In partnership with Learning Links Foundation, this programme is currently running in 10 Government schools in Shirur district, in rural parts of Pune. The programme was introduced to bridge the learning gap, ignite curiosity and a passion for science, technology, engineering and maths. The pedagogy is imparted through a skill building approach inculcating some of the 21st century skills like collaboration, design thinking, problem solving and critical thinking. Presented as an after-school programme, students are encouraged to identify local problems, apply learnings from the sessions and use the tinkering lab as a space to develop innovative solutions. Students receive mentorship through an innovation coach who acts a guide. The tinkering lab or studio is also equipped with DIY tinkering kits that are fun learning aids, introducing students to the world of sensors, electronics, circuits and 3D printing technologies.

During the year, the programme was expanded to Bangalore, with Tinkering Labs set up at 10 schools in Anekal, close to the Company's manufacturing site in Electronics city. Together, both interventions are impacting close to 6000 students. In March, the Pune programme completed one year of implementation, culminating with a Science Fair that showcased various prototypes developed by students from all the 10 schools. The winning projects were selected through an inter school competition, demonstrating how science is applied to real world problems faced in the communities.

3. STEM Scholarship programme for Girls:

During FY 23-24, The Company strengthened its commitment to STEM education by introducing a new programme to provide economic empowerment to academically brilliant girls from underprivileged backgrounds through scholarships.

With its focus on emerging STEM fields, like healthcare, AI, Data Science, Computer Science, Electronics, Material Science and Biotechnology, the programme aims to increase the number of women in STEM fields, thereby contributing to a more diverse and innovative workforce. Through internships and job opportunities at the Company, the project can actively contribute to increasing the representation of women scholars in STEM fields.

COMMUNITY:

Community initiatives include interventions addressing specific community needs related to health, infrastructure, skilling and livelihood in underserved communities, in and around the geographical areas of operation or the Company's response to natural disasters.

Smile on Wheels: Providing diagnostic and preventive healthcare access to rural communities:

During FY 23-24, the Company continued to support the Mobile Primary Healthcare programme in partnership with Smile Foundation in some of the aspirational districts. This multi-year programme has completed more two years of operations at four locations, Siddharthnagar in Uttar Pradesh, Balangir in Odisha, Goalpara in Assam and Ranjangaon in Maharashtra. The vans provide preventive, promotive and curative healthcare facilities to underserved communities in the villages in these districts.

The vans average over 6,000+ patient consultations every month and have covered about 163,012 beneficiaries since operations began in September 2021. During FY 23-24, a total of 60,357 beneficiaries benefitted from the programme at all four locations.

ENVIRONMENT:

Our environment commitments extend to our communities through interventions to promote water conservation in water-stressed areas and transitioning to renewables in rural areas. We are working with local communities to promote water recycling and conservation since our manufacturing sites are located in water stressed regions. Ultimately, we aim to help these communities build and manage their own water efforts in the future.

Community Water resilience:

The Company operates in a water-stressed area in Ranjangaon, Pune. During FY 23-24, the Company initiated a pilot project to establish a multi-year water conservation and management programme in the village of Kendur and other neighboring hamlets. Surface water plays an important role in the regulation of groundwater and provides scope for various hydrological activities. Sustainable management and development of soil and water resources contribute to tangible groundwater supply and arrest further degradation of soils. A series of watershed interventions were undertaken during the year, to put in place infrastructure to conserve and harvest rainwater during the monsoons and help the local communities build and manage their own water efforts in the future. All these activities aim to influence agricultural production by developing enhanced irrigation due to water level elevation in the aquifers. The potential impact of this initiative will benefit more than 1000 households and a population of 4800+ people residing in this area.

The Annual Report on CSR activities is annexed herewith as "Annexure F", which forms part of this report.

DETAILS OF REMUNERATION OF EMPLOYEES

Pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing details of the top Ten (10) employees in terms of remuneration drawn during the financial year and other employees of the Company employed throughout the year and employees employed for part of the year who were in receipt of remuneration of Rs. 1.02 crores or more per annum and Rs. 8.50 lakhs or more per month respectively is annexed herewith as "Annexure G", which forms part of this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 is annexed as "Annexure H", which forms part of this report.

RISK MANAGEMENT POLICY

The Company has a Risk Management Policy pursuant to the requirements of Listing Regulations. The details of the Risk Management Committee and its terms of reference are set out in the Corporate Governance Report forming a part of the Board's Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant and material orders passed during FY 23-24 by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has an effective vigil mechanism by way of the Business Conduct Concern Reporting Policy (Whistle Blower Policy) for upholding 3M's Code of Conduct. The details of the said Policy are stated in the Corporate Governance Report and also available at https://www.3mindia.in/3M/ en_IN/company-in/about-3m/financial-facts-local/. During the year, the Company reached out to employees through e-learning modules to create greater awareness with respect to Fair Competition and Anti-Bribery and Corruption. This has helped in achieving a high level of engagement and compliance among the employees.

STATUTORY AUDITOR

Messrs. BSR & Co. LLP, Chartered Accountants, Bengaluru (ICAI Firm Registration No. 101248W/W-100022) were re-appointed as the Statutory Auditor of the Company at the 34th Annual General Meeting held on August 26, 2021 to hold office for a second term of five (5) years i.e. from the conclusion of the 34th Annual General Meeting till the conclusion of the 39th Annual General Meeting to be held in the year 2026.

COST AUDIT

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company in respect of the products covered under the said rules are required to be audited by a Cost Accountant. Accordingly, the Board of Directors of the Company at its Meeting held on May 28, 2024 on the recommendation of the Audit Committee, approved the re-appointment of Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (Firm Registration No. 000065), to conduct the audit of the cost records of the Company for FY 24-25 at a remuneration of Rs. 575,000/- (Rupees Five lakhs Seventy-Five Thousand only) plus taxes as applicable and out of pocket expenses at actuals.

The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm's length relationship with the Company.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members at the General Meeting for their ratification. Accordingly, a resolution seeking ratification of the remuneration payable to Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru is included in the Notice convening the Annual General Meeting.

For the financial year ended March 31, 2023, the Cost Audit Report submitted by Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, was filed with the Ministry of Corporate Affairs, well within the due/extended date. Messrs. Rao, Murthy & Associates, has confirmed the cost records for the financial year ended March 31, 2023 are free from any disqualifications as specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Parameshwar G. Bhat, Company Secretary in practice (FCS: 8860, CP: 11004) to undertake the Secretarial Audit of the Company for FY 2324. The Report of the Secretarial Audit Report is annexed herewith as "Annexure I", which forms part of this report.

The Company had undertaken an audit for FY 23-24 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report has been submitted to the stock exchanges within 60 days of the end of the financial year-.

EXPLANATIONS IN RESPONSE TO AUDITORS' QUALIFICATIONS

During the year under review, there were no qualifications, reservations or adverse remarks made by the Statutory Auditors / Secretarial Auditor in their respective Reports.

COMPLIANCE WITH SECRETARIAL STANDARDS

During FY 23-24, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft of the Annual Return in Form MGT 7 of the Company for the financial year ended March 31, 2024 is uploaded on the website of the Company and can be accessed at https:// www.3mindia .in/3M/en_IN/company-in/about-3m/ financial-facts-local/.

DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has a Prevention of Sexual Harrasment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is available on the website of the Company https://www.3mindia.in/3M/en_IN/ company-in/about-3m/financial-facts-local/. Internal Complaints Committees (ICC) have been set up to redress complaints received regarding sexual harassment.

Status of Complaints during FY 23-24:

1. Number of complaints of sexual harassment received During FY 23-24: Nil

2. Number of complaints disposed off during FY 23-24: NA

3. Number of cases pending at the end of the financial year: Nil

4. Number of workshops or awareness programmes carried out: 3 (Three)

5. Remedial measures taken by the Company:

• A mandatory interactive virtual training session was conducted for employees on "Sexual Harassment at the Workplace". This session reinforced the understanding of what constitutes sexual harassment, complaint process and behavioral do's and don'ts at the workplace.

• In-depth capacity building training was conducted for all Internal Committee member

• Train the Trainer session was conducted for all Internal Committee members. This session equipped participants with the knowledge & resources to conduct general awareness sessions at their respective locations.

HUMAN RESOURCES

During FY 23-24, the Company undertook many initiatives to increase organisational capability and productivity to be value driven and future ready. As on March 31, 2024, the Company had an employee strength of 1,033 personnel.

OTHER DISCLOSURES

During the financial year under review, the Company:

1. has not bought its own Shares nor has it given any loan to the employees (including KMPs) of the Company for purchase of the Company's Shares.

2. has not issued any Shares to trustees for the benefit of employees.

3. there was no revision in the Financial Statements.

ENVIRONMENT, HEALTH AND SAFETY

The people who work in the Company's sites and live in the communities where the Company operates deserve nothing less than world-class environment, health, and safety performance - and the Company's goal is to improve the safety and well-being of everyone touched by 3M. The Company is committed to environment, health and safety improvements throughout our operations and products. The Company's highest priority is the safety of our employees and the public. The responsibility extends to the environment in and around our operations through robust environmental management systems, conservation and efficient use of resources and ensuring that pollution is prevented at source.

The Company has three (3) manufacturing plants operating in India. All three plants have Environmental Management Systems (EMS) certified to the ISO 14001: 2015 environmental management systems standard and ISO 45001:2018 for Occupational Health and Safety Management System. We continue to be guided by our global Responsible Operations framework, comprising of Core Safety, Environment, Process Hazard Management, Industrial Hygiene, Occupational Health and Wellbeing elements which provides consistency and structure for implementing programmes and helps us be proactive to mitigate the risks.

1. RESPONSIBLE OPERATIONS DRIVING EHS CULTURE ACTIVATION

Driving Responsible operations was one of the key aspects which 3M took global implementation in 2023. Responsible Operations expands the Company's approach to EHS through a focus on seven core elements. Impacting these seven elements was necessary to reduce injuries and incidents and drive right behaviors to set forth EHS performance to world class. The Seven focus areas were,

a. Leadership, Behavior and Accountability

b. Standards and Systems

c. Employee Training and engagement

d. Design Control and Maintenance

e. Infrastructure and technology use

f. Governance and Compliance

g. Organisation Staffing model.

The path of EHS excellence through Responsible Operations is attained, with factory's draw up a EHS Facility Plan focusing on three key areas,

a. Leadership Behavior & Accountability:

b. Standards & Systems

c. Employee Training & Engagement

The Company is committed to managing risks responsibly. The Company has refined its management system focusing on Leadership, Behavior and Accountability as the corner stones to drive Responsible operations.

2. EHS MANAGEMENT STANDARDS AND SYSTEMS

The 3M Environment, Health, and Safety Management Standard (EHS-MS) provides the basis to address EHS risks and compliance obligations applicable to all workers and their 3M operations. 3M locations and workers understand, manage, and mitigate their EHS risks and comply with all applicable 3M and government requirements. The EHS-MS was developed to provide a standard system to manage these requirements. All manufacturing, including the research & development, locations maintain a EHS self-assessment of the elements that apply to the operations and workers.

Technology is important in achieving excellence and EHS is no exception to this. Some of the Systems and tool to enable EHS management programme implementation are:

• CAMMS: A portal which is customised to 3M requirements to track and monitor all applicable EHS compliance and legal obligations.

• EHS 360: Used for documenting, reporting, investigating and action item tracking related to workplace incidents, potential hazards or near miss events.

• EHS Global Audits: All the three plants have successfully completed 3M's EHS Global Audits based on the complexity of the site, without any primary audit finding.

• Guarding and Prioritization (GAP): The Guarding Assessment and Prioritization (GAP) tool was implemented at all the Company Sites, this provides a systematic method for assessing risk to workers from machine hazards. All the Company Facilities implemented GAP tool to analyze the risk posed from machine operations and budget was set apart to improve the guarding of the machines.

• Management of Change (MoC): Revised MOC was implemented at the Company Sites which went online to track all the changes made at facilities, processes, materials, equipment, procedures and/or utility. This helps to ensure changes do not inadvertently introduce new hazards or unknowingly increase the risk of existing hazards.

To mitigate Environmental Risk following systems are utilised in the Company.

• Environmental Inventory Toolkit: EIT is a set of tools and templates to maintain a consistent inventory of foundational manufacturing process and equipment information, specifically Process Flow Diagrams (PFD) and Equipment Inventory (EI) to enable various EHS related programmes.

• Pollution Prevention Pays (3P): The Pollution Prevention Pays (3P) Program began in 3M, USA in 1975 with the goal of eliminating or reducing sources of pollution in 3M products and processes. The programme has been recognised the world over for its innovation in environmental management by focusing on pollution prevention, rather than pollution control.

3. CORE SAFETY

Zero Lost Time Injury is a key metric to uphold the safety performance. All manufacturing sites were able to maintain Zero Lost time injuries during the year due to continuous focus on preventive actions, EHS Element ownership through leaders with representation from supervisors and technical associates alike. Applicable Core Safety programmes at the Company sites are Static Management, Machine Guarding, Electrical Safety, powered industrial vehicle, fire protection and prevention, vehicle safety, Lock out and Tag out, Hoist systems for overhead material handling, work at height, confined space entry, flammable liquid handling and storage etc, Also certain campaigns were run with aim of improving the safe work behaviors and minimising the risk of injuries those were

We strongly believe that, Safety Starts with every individual, while the

• Behavior of every individual defines the culture of the organisation.

• All accidents and injuries are preventable.

• Everyone in organisation is accountable for the safety performance

Some Safety initiatives in 2023 to promulgate Safetyin workplaces are as follows:

a. EHS Culture excellence through See and Act

Initiatives of behavioral-based safety improvements through ‘See & Act' programme continued in 2023. These EHS walkthroughs enables us to strengthen the safety culture. The focus is not just the identification of Unsafe Acts and Conditions but to understand the root cause of their occurrence. The Company has a resolution rate of above 80% of problems identified through the SEE & ACT programme.

b. EHS Commitment

The EHS Commitments are a simple way to describe 3M's key environment, health, and safety expectations based on 3M's Code of Conduct, Policies, and Standards. There is a shared responsibility for EHS and to keep each other safe. Safety Always campaign was implemented across all facilities Worker safety, health, and wellbeing are important to 3M. The initiative focused on simple acts of behavior correction. Since the launch of Safety Always we have seen reduction in Slip-trip and fall. Safety is each worker's responsibility. The Company strives to continuously improve performance and foster a safety culture that engages entire workforce to help prevent incidents, injuries, and occupational illnesses.

c. Recognitions:

The Company's facility in Electronic City, Bangalore has received a State Level Recognition from Department of Factories, Boilers, Industrial Safety and Health, Government of Karnataka under the Large category industries for the following two categories,

1. The Manufacturing facility has secured Third Place in State Level Safety Award

2. An Advanced Technical Associate from EHS Department has been recognised with "Best Worker Award", he has secured Second place.

Team was awarded with this prestigious honor as part of National Safety Day celebration from the regulatory body. The Company was also invited to present the "3M's EHS Culture activation journey" to all the industry leaders at the same event.

4. ENVIRONMENT

The Company follows the Environmental Management programme framework which comprises of 18 elements mainly focusing on Air Quality, Water Quality, Land Management, Waste management all these are tracked through Environmental target database.

a. Air Quality Management:

The purpose is to identify the requirements necessary to minimise the impact to air quality/ atmosphere by having right programmes with sufficient resources in place, following are some of the programmes for Air quality at our sites.

• Air Emission Control Operation and Maintenance

• Air Emission Reduction Program (AERP)

• Greenhouse Gas Management

• Refrigerant Management

• Thermal Oxidizer Optimisation

b. Water Quality:

The Company embraces commitment to water conservation for our own operations, following a Global Water Stewardship Standard. 3M operations worldwide manage their water resources through compliance with regulatory requirements, conservation, and reuse, reporting water usage internally as well complying with the law of the land. Water framework focuses on the following,

• Water Management Standard (WMS)

• Stormwater Management

• Wastewater Emission Control Operation and Maintenance

• Wastewater Management

c. Land Management

Ensuring operations do not impact the land and to prevent possible contaminations 3M globally has deployed the following programmes and the Company sites too adhere and excel in them-

• Aqueous Film Forming Foam (AFFF) management

• Asbestos management

• Sewer management

• Spill and release prevention

• Underground and Aboveground Storage Tanks

d. Waste management

The Company practices waste minimisation whenever practical to reduce the volume and hazards of waste materials generated. All 3M locations are required to manage all returned, recycled, and waste materials from the time of generation until reused, recycled, treated, or disposed. The programme encompasses all the Onsite Waste Management & Offsite Waste Management Processes including but not restricted to Activities, Processes Products & Services. The Waste management programme encompasses the following,

• Waste collection, Storage, Disposal,

• Waste Identification, Characterisation and Documentation

• Identification of applicable regulations and requirements & ensuring compliance

• Compliance with 3M Environment policies, standards, guidelines and procedures

• Proper handling, labelling, and storage of wastes

• Preparation of waste transportation documents, necessary approvals and Record keeping

• Training programmes

• Audit and Approval of Waste Management Companies

• Ensuring Contracts and Agreements for waste disposal are in place with agencies

Projects taken up in 2023- 24 for Environmental management are as follows:

• Preprocessing of Liquid and solid Hazardous wastes (20% of total wastes)

• At source Hazardous waste reduction in Non Woven Maker stream. Resulting in reduction of 10 MT Hazardous wastes per month.

• Water Management improvements to attain Net Water Balance to achieve "Zero Liquid Discharge (ZLD) facility.

• MEE (Multiple Effect Evaporator, MEE) with capacity 10 CMD installed for RO rejects with recycling option.

e. Industrial hygiene

Industrial hygiene is process referring to the recognition and evaluation of the occupational health hazard at workplace. The Company has competent industrial hygienist at each site work in very close collaboration of 3M corporate team to priorities monitoring of the health-related issues at individual sites and schedules monitoring accordingly.

• Year 2023 has been very fruitful in terms of critically evaluate such various hazardous ranging from chemical exposure to physical hazards like noise, heat, and illumination and ergonomic.

• Proactive Preventive approach of 3M Team at regional facility has able to replace some manual activity into mechanicalised at certain sections, Improvements in ventilation system for more comfortable to workforce.

• Team effort of the 3M Ahmedabad team adopted latest technology of drum filling in close loop filtering and transferring of highly viscous material for the EMD liquids operations has reduced exposure to workforce and introduction of contemporary sleeve hood has minimised risk of exposure to flammable vapor.

5. ERGONOMICS

3M applies ergonomics risk assessment tools globally for the identification and assessment of ergonomics risk in the industrial environment. Ergonomics addresses the interaction between employees and their workplaces. The successful application of ergonomics promotes worker health and well-being, improve quality, increase production, lower turnover, and reduce human error by providing employees with appropriate tools, workstations, and environments. All the 3 sites have completed ergonomics risk reduction project to meet corporate requirement.

6. HEALTH AND WELLNESS EFFORTS

3M believes in the philosophy that "your health matters as much as your work". 3M is about collaboration as well as innovation, especially when it comes to employee's health. In 2023 there were several initiatives that promoted aspects of health & wellness of employees at the factories: Elaborative Medical Surveillance Programme was provided: -

• At all sites Vision test was conducted

• At Ranjangaon site, Audiogram in calibrated audiometry booth for Noise Conservation areas was conducted.

• At Ranjangaon site, Skin evaluation, Complete Eye test and Chest X-ray are done to rule out Tuberculosis as a part of Pre-Employment Medical Check Up for new hires to Microbiology Lab.

• At all sites a medical checkup is done for Food Handlers

• A health checkup of the Emergency Response Team members at Bangalore site. Employee cab drivers are provided with Vision and hearing check up.

AWARDS AND RECOGNITION

• Global Recognition: 3M brand is globally recognised for innovation, quality and trust. It featured on Interbrand's top 100 list of global best brands in 2022. Over the years, the 3M Group has received several global accolades and recognition, further highlighting the trust it commands. Below is a selection of recognitions received in 2023:

- Among Top 50 Most Innovative Companies globally, by Boston Consulting Group.

- One of Top 50 World's Most Admired Companies, by Fortune

- One of the World's Best Companies of 2023, named by Times

- The 2023 World's Most Ethical Companies Honouree List, by Ethisphere.

• Bioprocessing Excellence Award: Based on voting from the biopharma community, the Company was awarded for Bioprocessing Excellence Award for India, 2023.

• Corporate Social Responsibility: The Ranjangaon Industrial Association recognised the Company for contributions to local communities through the implementation of multiple CSR programmes including the solar-powered health center infrastructure initiative in Shirur Taluk, Ranjangaon.

• Customer Recognition: The Company's Automotive & Aerospace Solutions Division received the "Overall Supply Cost Development Delivery Quality Best Supplier Award" and "Special Recognition Award" from its customers. The Company has also been recognised by key automotive customers for achieving Quality targets.

• Manufacturing Excellence: The Company's manufacturing site at Electronics City, Bengaluru received recognition from The Department of Factories, Boilers, Industrial Safety and Health, Government of Karnataka.

• The Department of Factories, Boilers, Industrial Safety and Health, Government of Karnataka awarded an employee with the "Best Worker Award". This state-level recognition is the highest honor bestowed on manufacturing workers for their focus on safety at the workplace.

• The Company's Chief Financial Officer was recognised as "CFO for the Year 2023" by UBS Forum.

• The Company's General Counsel was recognised as one of the "Top 100 General Counsels" in India by BW Legal World General Counsel Conclave 2023 and has been included in the "Legal 500 GC Power list" for India, 2023.

Over the year, the Company employees received internal accolades for excellence in sales, marketing, technical and support functions, winning recognition from 3M Company, as well as Business and Area level awards.

ACKNOWLEDGEMENT

Your Directors thank and acknowledge with gratitude the co-operation, assistance and support received from the Central Government, State Governments of Karnataka, Maharashtra and Gujarat, Bankers, Shareholders, Dealers, Vendors, Promoters of the Company and all other Stakeholders.

The Directors also wish to place on record their sincere appreciation and gratitude towards the contribution made by every employee