3M India Ltd Directors Report.

To the Members of 3M India Limited,

Your Directors have pleasure in presenting the Thirty Forth (34th) Annual Report of the Company. The Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2021 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 part of the Annual Report.

FINANCIAL HIGHLIGHTS - Standalone and Consolidated (Rs. in Lakhs)

Standalone

Consolidated

Particulars Year ended March 31, 2021 Year ended March 31, 2020 % age increase / decrease (-) Year ended March 31, 2021 Year ended March 31, 2020 % age increase / decrease (-)
Revenue from Operations 242,036.39 276,487.73 -12.46% 260,483.14 298,655.09 -12.78%
Of which -Export Sales 2,497.17 2,210.14 12.99% 2,658.32 2,409.49 10.33%
Other Income, net 2,686.77 4,158.32 -35.39% 2,473.73 4,589.56 -46.10%
Total Income 244,723.16 280,646.05 -12.80% 262,956.87 303,244.65 -13.29%
Less: Expenditure 218,268.32 242,506.93 -10.00% 234,534.71 253,688.61 -7.55%
Profit before Interest and Depreciation 26,454.84 38,139.12 -30.64% 28,422.16 49,556.04 -43.65%
Less: Finance costs 243.22 361.11 -32.65% 245.41 366.21 -32.99%
Less: Depreciation and amortization expense 5,967.54 5,737.70 4.01% 6,184.59 5,933.25 4.24%
Profit before Taxation 20,244.08 32,040.31 -36.82% 21,992.16 43,256.58 -49.16%
Less: Tax expense 5,313.99 10,143.06 -47.61% 5,754.51 11,039.66 -47.87%
Profit for the year 14,930.09 21,897.25 -31.82% 16,237.65 32,216.92 -52.96%
Items that will not be re-classified subsequently to profit or loss (255.40) (374.23) -31.75% (292.01) (413.22) -29.33%
Total Comprehensive income for the year 14,674.69 21,523.02 -31.82% 15,945.64 31,803.70 -53.25%

DIVIDEND

Your 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 was uploaded at https://www.3mindia. in/3M/en-IN/company-in/about-3m/financial-facts-local/and the same is also annexed herewith as "Annexure J".

The Company remains invested in India and the areas of investment opportunity highlighted in prior years continue to hold good. Just when the Indian economy slowly started to limp back to recovery after the impact of the recent COVID-19 pandemic during the last financial year 2020-21, resurgence of the COVID-19 pandemic second wave is slowing down our entire country and it remains to be seen how far it will affect Indian economy and the growth prospects. The Company remains responsible to our shareholders in the Company to maintain a strong Balance Sheet during these uncertain times. For these reasons, the Company has decided to conserve and retain the earnings and is not proposing a Dividend.

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

As it has been decided to conserve and retain the earnings and, your Board does not propose to transfer any amounts to reserves.

STATE OF COMPANYS AFFAIRS

In an uncertain environment, your Company focused on fighting the pandemic from all angles, providing customers with innovative solutions, and improving operational execution. During the year under review, as the pandemic continued to evolve, the Industrial Production Index (IPI) and several end markets experienced sharp decline

driven by COVID-19 related headwinds. At the same time, the demand from healthcare, personal protection, home improvement and cleaning remained strong. In an extremely challenging environment, your Company declined from FY 19-20 while maintaining stable cash position. Your Company was able to leverage its strengths in wide product portfolio and breadth of technology solutions to take advantage of the emerging trends in end markets.

Discipline in operational execution

Your Company maintained a stable cash position and managed cost across all aspects of the business keeping employee costs low.

Momentum with eCommerce

Your Company captured the sharp momentum in eCommerce, with solutions and new SKUs for homes and commercial spaces, in line with attractive trends from end markets.

Enhanced manufacturing to meet demand

The demand for respirators and masks led to increased manufacturing capacity at your Companys manufacturing facilities in Pune. With increasing demand for disinfectants and cleaning products, your Company also executed new manufacturing projects to locally manufacture hand-sanitizers, certain types of disinfectants, and BS-VI compliant emission control materials.

Emerging opportunities in new market segments

New market trends in personal safety, vehicle safety, homecare and cleaning and automotive electrification have opened up new product solutions in the areas of vehicle interior cleaning for the aftermarket segment, road safety products, wound care, and bio pharma purification. Your Company also aligned with key Government construction and infrastructure projects as the countrys economy opened up after lockdown.

Leveraging Virtual

Your Company leveraged the potential of virtual with focused learning and education initiatives for various customer segments to support new business opportunities.

Supporting our communities to fight the pandemic

During the pandemic, your Company effectively collaborated in a timely manner to provide much needed support to various migrant communities in the form of cooked food, dry rations, and others. During the peak of the first wave of COVID, your Company also supported several district hospitals across major cities with medical equipment to augment their capacity. In addition, partnerships with multiple agencies enabled the execution of a national food and essential kits distribution program amongst vulnerable communities.

The breadth of technologies and product portfolio and an engaged and committed workforce continues to remain essential to remain resilient during uncertain times. Your Company continues to leverage these strengths to position itself for sustainable growth.

The Company has considered internal and external sources of information as of the date of approval of the financial results in determining the possible impact, if any, of the resurgence of the COVID-19 pandemic on the carrying amounts of its trade receivables, inventories, financial and non-financial assets. The Company has used the principle of prudence in applying judgements and making estimates. Based on this evaluation, the Company does not expect any material impact on its financial results. However, the eventual outcome of impact of Covid-19 pandemic may be different from those estimated as on the date of approval of these financial results.

The Company on a standalone basis declined by 12.46% at Rs. 242,036.39 Lakhs for the financial year ended March 31, 2021 compared to Rs. 276,487.73 Lakhs in the previous financial year. The Profit before Interest and Depreciation is Rs. 26,454.84 Lakhs compared to Rs. 38,139.12 Lakhs for the previous financial year. Profit before Tax is Rs. 20,244.08 Lakhs compared to Rs. 32,040.31 Lakhs for the previous financial year. The operating margin for the current year is 10.81% compared to 13.59% for the previous financial year. Total Comprehensive Income is Rs. 14,674.69 Lakhs compared to Rs. 21,523.02 Lakhs for the previous financial year. Economic slowdown due to Covid-19 affected the topline growth and bottom-line. Export Sales is Rs. 2,497.17 Lakhs for the financial year ended March 31,2021 compared to Rs. 2,210.14 Lakhs in the previous financial year, an increase of 12.99%, due to demand in the global market.

The Company delivered broad-based growth across most of our end markets in the Jan-Mar 2021 quarter, sustaining the sequential improvements since FY Q2 2020-21. Due to the strong demand rebound as well as supply chain interruptions, the Company experienced cost pressures in raw materials and logistics costs. Notwithstanding, our teams worked hard to ensure that we maintained our service levels to customers. During the Jan- Mar quarter, we also announced actions to consolidate our manufacturing footprint in Pune, which will improve our operational efficiencies and customer service.

On a standalone basis, the Safety and Industrial business declined by 6.86%; Transportation business declined by 14.05%; Health Care business declined by 30.24%; and Consumer business declined by 2.13%.

The EPS (Basic and Diluted) of the Company for the financial year 2020-21 was Rs. 132.53 per Share as compared to Rs. 194.38 per Share in the previous financial year, a decrease of 31.82%. Detailed analysis of the performance has been discussed in the Managements Discussion and Analysis Section of the Annual Report.

Portfolio Management: Last year, in June 2020, the Company had announced the intention to exit printed graphics (also called decals) business that used to sell to the 2W and 4W automotive OEMs. This was part of Transportation and Electronics portfolio. This portfolio represented well below 5% of our total company sales. The Company would like to inform that the business exit was completed with good transition support to our customers. The VRS scheme was also successfully implemented. We would like to thank our employees who were part of this business for several years for their contributions as well as our customers.

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

The Board of Directors of the Company and 3M Electro & Communication India Private Limited (3M E&C) at their Meetings held on 13 November 2019 had approved the Scheme of Amalgamation of 3M E&C with the Company under Section 233 of the Companies Act. 2013. The Appointed Date fixed under the Scheme was 1 April 2019. The Company sought approvals from Members and Creditors under Section 233(1)(b) of the Companies Act, 2013 by Special Resolutions through Postal Ballot notice dated January 21, 2020. The results of the voting by Postal Ballot were announced on February 28, 2020.

Based on the opinion from external Legal Counsel, the Company has made an application during the month of October 2020 with the jurisdictional Regional Director of the Ministry of Corporate Affairs seeking approval of the Scheme. Additional information sought by the Regional Director has been submitted and the Company is awaiting updates from the office of the Regional Director.

Shifting of Corporate Office

3M India corporate headquarters situated at UB City, Bangalore, was at the end of lease period, with legal requirement to provide six months notice to all the landlords. This office measured 102,088 sft. across 8 floors in Concorde Block. Due to the CoVID19 pandemic and subsequent to lock-down from March 2020, this office was largely vacant with only security and housekeeping staff present. Moving into a co-shared office space was proposed to the global Headquarters. The US Real Estate team, meanwhile, was searching for a ‘Future of the Workspace template in a post COVID world and were enthusiastic about the proposal and approval was attained in record time. A large multifunctional team was formed in November 2020 to address multiple aspects of exiting UB City in a smooth process. The Company is proud to report that from May 1,2021,3M India shifted its corporate office to the co-shared space at WeWork, in Bangalore.

Information Technology

Your Company operates an Information Security Management System (ISMS), mainly centered in the Head Office, St. Paul, USA, is certified to the requirements of ISO/IEC 27001:2013 and continue to meet the certification requirements since 2014. Enhancing and optimizing cybersecurity protection continue to be one of top priorities. A new SaaS security awareness tool with advanced features was deployed. This includes monthly phishing campaigns to all users globally, and monthly security awareness communication and training features. Yearly programme on renewing and testing the cybersecurity incident response process continued to ensure currency and adequacy. NIST CSF - The National Institute of Standards and Technologies, Cybersecurity Framework: provides a common language and lifecycle approach for understanding, managing, and expressing cybersecurity risks. It helps identify and prioritize actions for reducing risk, and helps align policy, business, and technology approaches to managing that risk. Your Company has also deployed Unified Threat Management, commonly abbreviated as UTM that provides multiple security features and services in a single device or service on the network, protecting users from security threats in a simplified way. UTM includes functions such as anti-virus, anti-spam, content filtering, and web filtering. 3M

Information Technology support team has been able to provide best of the IT Support during the second wave spread of COVID-19 across the Country by enabling Work from Home solution in terms of Connectivity, End User support and have a seam less IT Continuity Plan without affecting business operations of the Company.

Supply Chain

• Year 2020 was challenging year with pandemic crippling the supply chain routes, your Company ensured that all the Customer orders are catered in the fastest manner while working around the logistics challenges;

• Market slow down impacted the working capital which rose to a high in June 2020 impacting the cash reserves, accordingly actions were initiated to stagger the purchases, collaborative planning, parameter management which led to working capital coming down by December 2020; and

• Re-alignment of Supply Chain Planning function with Asia Centre of Excellence(COE) wherein business group wise alignment was made with dedicated resources; India benefiting through best practices deployment and regional teams support.

Contribution to Exchequer

During the financial year 2020-21, the Company has paid various taxes on account of its business/operation viz., CGST, IGST, Direct Taxes and Customs Duty amounting to Rs. 791.57 crores in aggregate.

Investments

Capital Investments during the financial year 2020-21 is Rs. 4,041.72 Lakhs (Net of capital work-in-progress and capital advances) (PY 2019-20: Rs. 1,983.52 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 L" to this report.

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

During the year under review, the revenue from operations of 3M E&C decreased to Rs.18,451.93 Lakhs in the financial year 2020-21 compared to Rs. 22,221.45 Lakhs in financial year 2019-20. The Profit before tax for the financial year 2020-21 is Rs.1,748.08 Lakhs as against Rs. 3,226.27 Lakhs in the financial year 2019-20. The Profit after tax for the financial year 2020-21 is Rs. 1,307.56 Lakhs as against Rs. 2,329.67 Lakhs in the financial year 2019-20. The Total Comprehensive Income is Rs. 1,270.95 Lakhs for the financial year 2020-21 as against Rs. 2,290.68 Lakhs for the last financial year.

Highlights of 3M E&C

• Government focus and its clear intentions to drive Sustainability and Make in India provide us with clear mega trends which presented the Company with the opportunity in EV and MHH segments.

• In EV space the industry declined by 20% compared to FY20 and main reason being 2W and 3W EV drop. The Indian OEMs continues to be leader in PV EV. Auto Electrification remains a strong focus area for us and we are taking the Big 3M approach to introduce Value added solutions with OEMs in the area of Battery Thermal Management, Improvement of Life and safety of Batteries and Heads up Display solutions.

• In the year 2020, Indias smartphone shipments reached over 150 million units and around a similar number for the feature phones. The government cleared 16 proposals from domestic and international companies entailing investment of11,000 crore under the PLI scheme to manufacture mobile phones worth 10.5 lakh crore over the next five years. This brought in investments from almost all large mobile OEMs and their contract manufacturers. However, due to travel restrictions, their tiers could not commence production as planned. The Company, which has long been in the forefront as a material supplier to this segment globally, with continued close engagement has been and will continue to facilitate supply chain movement to the tier suppliers to enable more local content.

In accordance with the third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report and Financial Statements of the Subsidiary Company for the financial year 2020-21 have also 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".

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 Certificate from a Practising Company Secretary regarding compliance to the conditions stipulated under Chapter IV of the Listing Regulations is annexed as "Annexure B".

BUSINESS RESPONSIBILITY REPORT

A separate Section on Business Responsibility is annexed as "Annexure C" and forms part of this Annual 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 Authorized/Issued/ Subscribed and fully Paid-up Share Capital as at March 31,2021 is Rs. 11,26,50,700 (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 paid the Annual Listing Fees for the financial year 2021-22 to National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) where the Companys Equity Shares are listed.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment and Re-appointment:

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

• Based on the recommendations of the Nomination and Remuneration Committee and performance evaluation carried out, the Board at its Meeting held on February 10, 2021 approved the re-appointment of Ms. Radhika Govind Rajan (holding DIN: 00499485) as a Non-Executive Independent Director for a second term of Five (5) years with effect from May 27, 2021. The Members of the Company have approved her re-appointment by way of a Special Resolution through Postal Ballot Notice dated February 10, 2021. The results of the voting by Postal Ballot were announced on March 26, 2021.

• Based on the recommendations of the Nomination and Remuneration Committee, the Board at its Meeting held on August 13, 2020 had appointed Ms. Mamta Janak Gore (holding DIN: 08792863) as an Additional Director and Whole-time Director (designated as Whole-time Director and Chief Financial Officer) of the Company for a period of Three (3) years with effect from September 01, 2020 to August 31, 2023 (categorized as Executive Non- Independent Director). The Members of the Company have approved her appointment by way of an Ordinary Resolutions through Postal Ballot Notice dated February 10, 2021. The results of the voting by Postal Ballot were announced on March 26, 2021.

• Based on the recommendations of the Nomination and Remuneration Committee, the Board at its Meeting held on August 13, 2020 had appointed Mr. James Ernest Falteisek (holding DIN: 08792857) as an Additional Director (categorized as Non-Executive Non- Independent Director) of the Company with effect from September 01,2020. The Members of the Company have approved his appointment by way of an Ordinary Resolution through Postal Ballot Notice dated February 10, 2021. The results of the voting by Postal Ballot were announced on March 26, 2021.

• Mr. Jongho Lee (holding DIN: 06720950) will retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment. The details of Mr. Jongho Lee are exhibited in the Explanatory Statement to the Notice of the Annual General Meeting. The Board of Directors recommends his re-appointment.

• Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board at its Meeting held on May 28, 2021 has appointed Ms. Vidya Sarathy as Chief Financial Officer and also as Key Managerial Personal of the Company with effect from June 1,2021.

Resignation and Retirement:

The following mentioned details are resignation and retirement were received during the financial year end until the date of the report:

• Ms. Sadhana Kaul (holding DIN: 02589934), Non-Executive Non-Independent Director resigned as Director of the Company from the closing hours of May 05, 2020, as she had decided to pursue her career outside of 3M Group. The Board places on record its appreciation for the contributions made by her to the progress of the Company during her tenure as Director.

• Mr. B.V. Shankaranarayana Rao (holding DIN:00044840), Whole-time Director of the Company superannuated from the Company from the closing hours of May 13, 2020 after a long association of 30 years of service with the Company. The Board places on record its appreciation for the contributions made by him to the progress of the Company during his tenure as Chief Financial Officer and as a Director.

• Ms. Mamta Janak Gore (holding DIN: 0008792863), Whole-time Director and Chief Financial Officer (CFO) of the Company resigned as Whole-time Director and CFO from the closing hours of May 31, 2021 consequent upon taking up higher role within 3M Group with effect from June 1,2021. However, she continues to be a NonExecutive Director of the Company with effect from June 1,2021. The Board places on record its appreciation for the contributions made by her to the progress of the Company during her tenure as Chief Financial Officer and as Whole-time Director of the Company.

As at the financial year ended March 31,2021, Mr. Ramesh Ramadurai, Managing Director, Ms. Mamta Janak Gore, Whole- time Director and Chief Financial Officer and Mr. V. Srinivasan, Company Secretary and Compliance Officer, are the Key Managerial Personnel of the Company.

DECLARATION 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 their 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 the financial year ended March 31,2021, Four (4) Meetings of the Board were held. The Company has Five (5) Board Committees. The date, composition and number of Meetings attended by each Director/Committee Member along with other Committee Meetings details are furnished in the Corporate Governance Report. All the Board/ Committee meetings for the FY 2020-21 were held through video conferencing/other audio visual means.

COMPOSITION OF AUDIT COMMITTEE

As on the financial year ended March 31,2021, the Audit Committee of the Company consisted of Three (3) NonExecutive Independent Directors and One (1) Non-Executive Director and all of them have financial and accounting knowledge. The Members of the Committee are Mr. Biren Gabhawala (Chairman), Mr. Bharat Shah, Ms. Radhika Rajan, and Mr. Jongho Lee. 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 selection and appointment of Directors, Senior Management and for other employees and their remuneration. The same has been disclosed on the website 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 exclusive 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".

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 their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

(a) that in the preparation of the annual financial statements for the Financial Year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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 31,2021 and of the profit of the Company for the year ended on that date;

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

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and operating effectively;

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Companys Internal controls is aligned to Global 3Ms internal control over financial reporting which are based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Controls — Integrated Framework (2013). The internal controls framework essentially has two elements viz., (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 adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys 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 unauthorized use or losses, executing transactions with proper authorization 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 Directors. 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. except for the investments made during the financial year 2018-19 for the acquisition of all the outstanding shares of 3M Electro & Communication India Private Limited for Rs. 58,470 Lakhs.

RELATED PARTY TRANSACTIONS (RPTs)

All RPTs which were entered in to, during the financial year were on an arms 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 uploaded on the Companys website 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 Groups 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 globalized 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 arms 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, play a significant role in the Companys business operations and also form integral part of the Companys business. An analysis of all the RPTs entered into/by the Company and the basis of charge was undertaken through a third-party professional firm.

The Company has already taken approval of the Members for all material RPTs for the estimated transactions for Three (3) financial years starting from April 1, 2020 to March 31, 2023 at the Annual General Meeting held on August 26, 2020. Form No. AOC-2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure E".

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects under the focus areas of Education and Community. The Company prioritized its CSR allocations for FY 20-21 with greater focus on COVID related relief and support initiatives to meet the emerging and medium-long term impact of COVID-19. These projects have been selected, initiated, and implemented in accordance with the activities under Schedule VII of the Companies Act, 2013.

EDUCATION:

In FY 20-21, the Company supported a variety of education initiatives to help children across age groups with learning support, digital learning aids and opportunities to continue their learning as schools were disrupted due to the pandemic.

1. School Readiness Program (Anganwadi):

The Company continued to support the School Readiness (Born Learning) initiative in partnership with United Way of Bengaluru to transform Anganwadis under the ICDS program of Government of India to ensure well rounded development of children under the age of 6. This is a national program covering 130 centers and is improving the lives of over 15,000 children below the age of 6 years. Year 2 intervention to support 40 Anganwadi center activities at S. R. Nagar and Jigani Bangalore, Mumbai and Kolkata included activities to maintain the centers as per COVID guidelines, support the Anganwadi staff with virtual trainings, early child learning materials, community mobilization and training and capacity building activities. This program is working towards achieving the Sustainable Development Goal (SDGs) 4 to ensure inclusive and equitable quality education and promotion of lifelong learning opportunities for all.

2. Project Nanhi Kali: Educating the Girl Child:

The Company continued to sponsor the education of 2861 girl students in partnership with K.C. Mahindra Trust under Project Nanhi Kali. During FY 20-21, the program provided additional academic support to girl students from primary and secondary schools in the rural district of Ambegaon in Pune. Due to the pandemic, schools were shut and the after school academic support centers had to be discontinued during the lockdown. To ensure the girls stayed in touch with learning, tutors continued to keep in touch with the girl students via home visits and virtual sessions. Community centers re-opened in September 2020 on a rotational basis where stringent COVID-19 safety and hygiene protocols were followed. A personalized adaptive learning software called Mindspark was introduced via digital tablets and browser versions to help the students continue their learning digitally. The digital curriculum covered English, Math and the local language for girls from Grade 1-10 and science from Grade 6-10. Tutors were trained on the new software to facilitate learning and conduct assessments. A professionally designed sports curriculum was also integrated into the programme. All the girl students received new school bags with stationery items, pullover, raincoat and feminine hygiene material. As a result of these interventions, the program was able to ensure at least 81-83% average attendance amongst the girl students and maintain a high level of performance in foundational subjects i.e. 76% average marks in both English and the local language and 70% average marks in Math.

3. 3M-CII Young Innovators Challenge Awards Program:

During FY 20-21, the Company successfully completed the 7th edition of the Young Innovators Challenge in partnership with the Confederation of Indian Industry (CII). This program annually recognizes young innovators under 30 years of age with grants, recognition, and access to networks for their innovative ideas to impact society. The theme for the year was inclusive ideas for a resilient India which received over 2500 applications compared to 800+ last year. Due to the pandemic, the end-to-end process from inviting applications, screening submissions to selecting the winners was done virtually. Virtual events, webinars and multiple coaching sessions served as a catalyst to raise the quality of participation. The felicitation of the winners was done virtually at the CII India Innovation Summit which was held virtually last year. The winning ideas demonstrated young peoples ability to design innovative models and addressed many of the UN Sustainable Development Goals (SDGs) like Good Health and Well Being, Decent Work and Economic Growth, Zero Hunger and Reduced Inequalities.

4. District Library Program:

The Company initiated the district library program in partnership with United Way of Bengaluru as a part of its post COVID initiatives to build resilience in our communities. The program supports the Govt. of Karnatakas initiative to set up informal learning spaces in gram panchayat libraries. Due the pandemic, rural children have not had access to schools and learning has been disrupted. The objective of this initiative is to help build a reading habit amongst rural children by using both books and digital reading options. The program supports the setting up of 992 gram panchayat libraries across 5 districts in the state (Bangalore Rural, Mandya, Tumkur, Chikkaballapura and Ramanagara) Safe and hygienic spaces such as community halls, anganwadi centres, school rooms, arali- kattes etc. will be equipped with physical books and digital infrastructure including computers/laptop, Wi-Fi hotspots LCD projector and screens. The program is expected to impact over 6 lakh children in the age group of 6-14 years, including children with special needs.

COMMUNITY:

In FY 20-21, the Company focused on community initiatives to strengthen healthcare infrastructure in the communities and also skill community health workers on health and hygiene practices.

1. Project Pahal: Skill Development of Community Healthcare Workers:

In line with the Governments priorities towards preventive and promotive health, in 2018, the Company joined a consortium of various organizations including GE Healthcare, USAID, Hindustan Latex Family Planning Promotion Trust (HLFPPT) to participate in a skilling initiative to empower women community health workers. In FY 2020-21, the Company continued to support the last phase of the skilling program which helped to successfully meet the milestone of training 4400 women Community Health Workers across Uttar Pradesh and Rajasthan in health and hygiene practices focused on material and childcare. When the pandemic broke out last year, Govt. of India relied on the efforts of Community Health Workers, largely women to support Govt. healthcare initiatives especially around on how to curb the spread of infection in communities. The last leg of community health workers was trained virtually last year with a special COVID module. In December, a virtual closing event was organized with all partners of the program. As a knowledge partner, 3M brought in expertise in infection control and hygiene. The end line findings showed an increase in overall awareness of health and hygiene practices and health seeking behaviour amongst the communities.

2. Partnership with Sri Shankara Cancer Foundation Hospital to support Bone marrow transplant lab:

In FY 20-21, the Company, made a grant to the Sri Shankara Cancer Foundation Hospital, Bangalore towards a range of medical equipment to support the new Bone Marrow Transplant lab at the hospital. The Bone Marrow Transplant lab will be able to provide this essential life-saving treatment at a much lower cost than normal operations and provide international standard treatment to patients in India, especially amongst the poorer sections of society. The Sri Shankara Cancer Foundations work includes research and development to reduce the number of cancer patients in urban and rural areas through prevention, early detection and awareness.

3. Providing diagnostic and preventive healthcare access to remote communities:

The Company committed to fund the Smile on Wheels Mobile Healthcare Vans initiative implemented by Smile Foundation to provide access to diagnostic and preventive healthcare to underprivileged populations in 4 aspirational districts Siddharthnagar in Uttar Pradesh, Gaya in Bihar, Goalpara in Assam, and Balangir in Odisha. These districts were identified for their limited accessibility to Primary Health Care Services. Due to COVID-19, the existing Government healthcare delivery system has been overburdened. Each van will travel to the communities to provide preventive, promotive & curative services at their doorsteps. The vans will provide free OPD services medicines, identify, and refer symptomatic COVID-19 patients to govt. facilities, capacity building of Project Staff, create awareness on preventive practices and promote important Govt. healthcare initiatives. The vans will collectively provide approximately 156,000 treatments to the target group population over a span of 39 Months.

COVID RELIEF INITIATIVES

During the pandemic, the Companys community response towards COVID-19 was directed at programs that helped address the emerging needs of the communities. The Company deployed a number of programs to address the various challenges that arose as the pandemic evolved. During the lockdown, the Company deployed a cooked food and dry rations program to support stranded migrant workers near its manufacturing sites in Pune. As the impact of the lockdown worsened with several migrant populations losing their livelihood, the Company worked with multiple NGOs - Smile Foundation, Barefoot College and Bal Utsav to implement a national food security program to support vulnerable communities with a food and essentials kit across Bihar, Rajasthan, Karnataka, Assam, Tripura, Telangana and Gujarat. The Company also facilitated the implementation of a grant of USD 300,000 from 3Mgives with United Way India to support Govt. COVID hospitals and health departments in hotspot cities with critical medical equipment as the cases peaked during September-October last year.

The Annual Report on CSR activities is annexed herewith as "Annexure F".

DETAILS OF REMUNERATION OF EMPLOYEES

Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement showing details of 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."

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".

RISK MANAGEMENT POLICY

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has an effective vigil mechanism by way of Business Conduct Concern Reporting Policy (Whistle Blower Policy) for upholding 3Ms Code of Conduct. The details of the said Policy are stated in the Corporate Governance Report and also available on the website of the Company 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 for creating greater awareness with respect to its Fair Competition Directive and Anti-Bribery and Corruption Directive. This has helped in achieving a high level of engagement and compliance among the employees.

STATUTORY AUDITOR

The Company at its 29th Annual General Meeting (AGM) held on August 5, 2016 had appointed Messrs. BSR & Co. LLP, Chartered Accountants, Bengaluru (ICAI Firm Registration No. 101248W/W-100022) as the Statutory Auditors for a term of Five (5) consecutive years from the conclusion of the 29th AGM to the conclusion of the 34th AGM subject to ratification of their appointment by the Members every year. The requirement of seeking ratification of the members for continuance of their appointment has been withdrawn consequent upon the changes made by the Companies (Amendment) Act, 2017 with effect from May 7, 2018.

The first term of the appointment of Statutory Auditors expires at the conclusion of 34th AGM. Accordingly, in terms of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the present Statutory Auditors of the Company, Messrs. BSR & Co. LLP would hold office until the conclusion of the ensuing AGM. They have expressed their willingness to be reappointed for a further term.

In terms of the provisions of Section 139(2)(b) of the Companies Act, 2013, an Audit Firm can be appointed for two terms of five consecutive years each. The Board of Directors at its meeting held on February 10, 2021, after considering the recommendations of the Audit Committee, had recommended the re-appointment of Messrs. BSR & Co. LLP., as the Statutory Auditors of the Company, for approval of the Members, to hold office for a period of Five (5) consecutive years, from the conclusion of the ensuing 34th AGM until the conclusion of 39th AGM to be held in the calendar year 2026. Messrs. BSR & Co. LLP., has submitted their confirmation to the effect that they continue to satisfy the criteria provided in Section 141 of the Companies Act, 2013 and that their appointment is within the limits prescribed under Section 141(3)(g) of the Act.

Members are requested to consider and approve the re-appointment of Messrs. BSR & Co LLP as the Statutory Auditors of the Company, to hold office for a period of Five (5) consecutive years, from the conclusion of the ensuing 34th AGM until the conclusion of 39th AGM and to fix their remuneration.

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, 2021 on the recommendation of the Audit Committee, approved re-appointment of Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (ICAI Firm Registration No. 000065), to conduct the audit of the cost records of the Company for the financial year 2021-22 at a remuneration of Rs. 475,000/- (Rupees Four 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 arms 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 AGM.

Disclosure on Cost Audit: For the financial year ended March 31, 2020, the Cost Audit Report submitted by Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, was filed with the Ministry of Corporate Affairs on September 8, 2020 vide SRN: R54066907, well within the due/extended date. Messrs. Rao, Murthy & Associates, has confirmed the cost records for the financial year ended March 31, 2020 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 appointed CS Parameshwar G. Bhat, Company Secretary in practice (FCS:8860, CP:11004) to undertake the Secretarial Audit of the Company for the financial year 2020-21. The Report of the Secretarial Audit Report is annexed herewith as "Annexure I

SEBI vide its Circular no. CIR/CFD/CMD1/27/2019 dated February 8, 2019 has mandated all the Listed entities having its Equity Shares Listed on the Stock Exchange(s) to obtain the Annual Secretarial Compliance Report in the prescribed format from a Practising Company Secretary from the financial year ended March 31, 2019 onwards and the Report should be submitted to the concerned Stock Exchanges within 60 days from the end of the financial year and be included in the Annual Report. The Annual Secretarial Compliance Report from CS Vijayakrishna K T is annexed herewith as "Annexure I-1 " which will be filed with the Stock exchanges within the prescribed time limit.

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 the financial year 2020-21, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed as "Annexure K". In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft Annual Return in Form MGT 7 for the FY 2020-21 of the Company is available on the website of the Company at the link: 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 in place a Policy against Sexual Harassment at workplace in line with the requirement of 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 the FY2020-21:

1. Number of complaints of sexual harassment received in the financial year (April 1,2020 to March 31,2021): Two

2. Number of complaints disposed off during the financial year: Two

3. Number of cases pending for more than 90 days: NA

4. Number of workshops or awareness programmes carried out in connection with sexual harassment: Two

5. Remedial measures taken by the Company: Training & awareness, launching communication campaign in Q2 2021. These programs were specifically towards POSH regulations. Apart from this, we also cover POSH as a topic during new-employee onboarding programs

HUMAN RESOURCES

During the financial year, the Company took many initiatives to increase organizational capability and productivity to be value driven and future ready. As at March 31,2021, the Company had employee strength of 1,146 personnel.

OTHER DISCLOSURES

During the financial year under review, the Company:

a. has not bought its own Shares nor has given any loan to the employees (including KMPs) of the Company for purchase of the Companys Shares, and,

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

c. there was no revision in the Financial Statements.

ENVIRONMENT, HEALTH AND SAFETY

Global health and safety issues are prevalent in workplaces around the world. Creative innovation, technology, education, and collaboration are all critical if we are to tackle these human health and workplace safety concerns.

3M India Limited as a Company rooted in scientific exploration and the belief that every problem has a solution. Our success depends on interactions with many functions and at many levels, and a common understanding of the roles and responsibilities of all involved. We also embrace this commitment for our own operations, and to that end, will continue to take steps to protect our most important asset - 3M employees.

ENVIRONMENT

The Company has three (3) Manufacturing Plants in operation in India and all three plants have Environmental Management Systems certified to new ISO 14001: 2015 standard.

We at 3M are continuing to step up our leadership toward a more sustainable future - in our own operations, and in solutions for our customers. Sustainability is at the core of what we do at 3M. We are committed to improving our business, our planet, and every life.

3Ms strategies for sustainable development encompass the pursuit of customer satisfaction and commercial success within a framework of environmental, social, and economic values. We are committed to complying with all applicable environmental requirements worldwide. Beyond compliance, the company continues to make significant investments to reduce the environmental footprint of our operations; and our products with sustainable attributes help customers reduce their environmental footprint and help to meet their Sustainability goals. Always, 3M believes environmental policy and regulations should be guided by science-based decision making.

3Ms commitment

The challenges we must tackle for a sustainable future dont always follow clear rules or methods, but we know science can help tackle them. We are looking at ways to build purpose into leadership and talent development across the company, to recognize business opportunities that help the Company to grow while addressing societal issues. We cut across industries and silos to collaborate with suppliers, customers, and communities by working together toward building a more resilient world.

Raw materials: As more resources are consumed by an ever-growing population, it is imperative that product design and manufacturing processes consider the ecological impact during life and after end-of-life. 3Ms edge begins with our well established safe ecological practices. Today, this is manifest in improved raw material usage, recyclable and sustainable innovations that we are empowering lives with.

Sustainability target for the Manufacturing plants were to reduce the Waste, Water and Energy w.r.t to 2015 Baseline numbers,

Waste generated at Plants is majorly sent for co processing in cement kilns thereby reducing the carbon footprint of the sites.

• Waste: Global target for waste has been Reduce manufacturing waste by an additional 10%, indexed to sales by 2025 compared to 2015 baseline. Efforts are made to reduce the waste generation at source. 3M Waste (NWI/ Quality Rejections/Production Waste) being used as alternate fuel in cement Industry This has helped 3M minimize the incineration process and maximize the co processing. This has enabled 3M to reduce the carbon footprint by 400MT of CO2 so far year. Waste is co-processed; it does not exist in the environment anymore and becomes part of Cement.

Waste generation reduction by 13.2%

•> Water: Water usage is being monitored with meters and pressure gauges, the drop in pressure gauges readings indicate water leakage which are attended immediately to prevent wastages. The treated wastewater is reused in the restrooms and in gardening. Reduced flowrate nozzles are put for taps in rest rooms to ensure prudent usage of precious resource.

Water consumption reduced by 48.1%.

• Energy & climate: Climate change is here to stay unless we drastically alter consumption and adopt renewable alternate sources to power our needs and answer those of our customers. 3M is proactively partnering with customers to understand needs and answering them by employing 3M technology that promotes energy conservation, are greener and contribute to lower emissions.

Energy Consumption reduced by 26.1%

• Renewable Energy: Also 2 of the manufacturing plants are utilizing 26% share of its energy consumption through renewable energy.

As part of World Environmental day initiative, the plants have taken up various environmental awareness programs including tree plantation in plants as well as public location. All plants have sewage/wastewater treatment plants and the treated water is recycled for cooling tower make and horticulture within the facilities.

The Company also embraces this commitment for its own operations, and to that end, 3M has a Water Stewardship Standard. 3M operations manage their water resources through compliance with regulatory requirements, conservation, and reuse, and reporting of water usage internally as well complying with law of the land requirement. Water resources include water intake, effluent water discharge and rainwater. All 3M locations have an effective Environmental management System (EMS) which includes the following elements like evaluating internal and external factors (e.g. new processes, regulatory changes, community water issues) that may impact the facilitys current or future water management requirements and consideration of water conservation projects and practices as part of environmental footprint minimization efforts. Our responsibility begins at our manufacturing plants - from the way we save this scarce resource, to stringent manufacturing processes that strive to reduce consumption. If any facility falls under water stressed location (with an annual water use equal to or greater than 1,000 cubic meters) is required to understand its water use pattern, associated business risks and impact - and to work with local water resources to understand potential impacts on the surrounding area. Identified sites are also required to do water conservation planning, outlining current and future water conservation efforts.

The Company has undertaken various measures to ensure this precious resource is utilized with utmost care. All these efforts have helped the Company reduce the water consumption by 53% (KL/MT of production) compared to baseline of 2015 water sustainability goals.

• Raw water use reduction by replacing old pipelines. This is done by identifying the pressure difference though the gauges.

• Underground hydrant network of pipelines which had corroded and was difficult to trace to correct leakages have been brought above ground at all plants to eliminate the root cause.

• Increased Water meters monitoring at each source on a daily basis

• Effluent Treatment Plant is separated from the sewage treatment plant and treated sewage water has been used for gardening and replacing fresh water

• Drive conducted to identify and arrest leakages and leakage prone network. Remote taps plugged where frequent vigilance is not available.

• At few plants we have installed an online Ozonator for water disinfection for safe handling by gardeners

• We practice "Zero water Discharge", where treated water is utilized for inhouse garden and for other utilities.

• Drip irrigation lines added in the garden area which eliminate conventional flooding & better utilize available water quantity

• Water usage is monitored with meters and pressure gauges. Drop in pressure gauge readings indicate water leakage which are addressed to prevent wastage.

• Reduced flowrate nozzles are put for taps in rest rooms to ensure prudent usage of water.

SAFETY SYSTEMS

Your Company continues to reinforce our commitment to leadership in safety and health. All three manufacturing plants have migrated to ISO 45001, a standard for management systems of occupational health and Safety with a goal to reduce the occupational injuries and diseases, including promoting and protecting physical and mental health. 3M India continues to forge ahead with our commitment to leadership in safety and health. Like in the prior year, 3M Corporation recognized CEO EHS award for Pimpri manufacturing facility, Bangalore plant received the prestigious Certificate of Commitment from Confederation of India Industries CII 2020, Four Star Rating.

At 3M India We strongly believe that, Safety Starts with every individual, while the behavior of every individual defines the culture of the organization.

All accidents and injuries are preventable

Everyone in organization is accountable for the safety performance

Safety and Health metrics are driven rigorously through tier level meetings which starts with Safety observations. Each plant has qualified Safety Officer and the representation of Employees at Plant safety committees includes both management and shop-floor employees and the meetings are chaired by the Plant manager. The High hazard activities (HHA) that are carried out at sites are driven through Risk and Prioritization (RAP) review approach. Hierarchy of controls focus firstly on elimination of the hazard followed by substitution, engineering controls and finally PPE with management along with management oversight and STOP work initiates ensures our employees perform the job in the safest possible manner. In addition to EHS risk analysis, we have a crisis plan for every single 3M plant. Although we hope to never use our Crisis Management Plans, its critically important that we have them in place, keep them up to date, and drill often to make sure everyone understands what to do should an emergency occur. We care about the safety of our people and communities around the world.

Your Company also deployed the EHS Cultural Excellence program rolled out by 3M Corporate. Leadership interaction and engagement with workers is a critical aspect of enhancing the culture of an organization. Through applying the 3M Execution Model and Manufacturing Excellence Principles in routine interactions with our workers, the intended outcome is a safer, healthier, happier, more trusting workforce. It is strongly believed that listening to our workers, focusing conversations towards high hazard activities and situations, and ensuring appropriate follow-up to concerns raised will ultimately result in reduced significant injuries and events. Safety in 3M is in the DNA.

The year 2020 also made a mark for new EHS Self-Assessment roll out at all manufacturing units which is required to be implemented by global 3M locations.

The 3M Environment, Health and Safety (EHS) Management Standard (EHS-MS) provides the basis to address EHS risks and compliance obligations applicable to all workers and their 3M operations. All 3M locations and workers must understand, manage, and mitigate their EHS risks and comply with all applicable 3M and government requirements. This approach utilizes a well-developed self-assessment process that is categorized into multiple elements addressing various areas and standards related to safety and health. 3M utilizes a variety of tools to manage risks from hazards in the workplace. Weve used specialized tools successfully for a number of years in the areas of process safety, industrial hygiene, and ergonomics. Each of these disciplines uses a risk management approach to categorize hazard levels and define appropriate levels of control.

The other EHS framework programs which 3M follows are Ergonomics, Industrial hygiene, Process hazard management (PHM), Ventilation programs, Static Management plan, Combustible dust management, Safety trainings, Health and Wellness Programs which enables us to ensure better and safe work environment to all our employees.

All manufacturing units in India also embraced the Compliance & Audit Management & Metrics System (CAMMS) to comply with the regulatory requirements of the states and also of the EHS Management System of 3M.

All these efforts translate into the EHS metrics being achieved and notably there has been ZERO Lost Time injuries at any of the three manufacturing sites during this period under consideration.

HEALTH AND WELLNESS EFFORTS

Your Company 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 employees health. Thats why we offer employees and their family with resources and services to support your holistic health: physical, mental, and emotional.

1. Your Company committed to support its employees throughout the pandemic, we made collaboration with a third party for COVID 19 health package to support employees with 24 X 7 telehealth services to all employees and their families and also for Contingent workers. Home quarantine program of active surveillance, at home RTPCR sample collection, Home Care Kit dispatch during Lockdowns, Ambulance to support medical emergencies, hospital bed availability check, door delivery of medicines.

2. COVID Prevention Ambassadors were trained to ensure ideal behaviors are implement and ensure Zero Close Contact at Workplace.

3. Influenza flu Immunization drive was conducted throughout the organization in collaboration with HR Benefits team.

4. Hepatitis B Vaccination has been imparted to all the ERT emergency response team members in 3M India Sites.

5. Respiratory Program was implemented throughout the organization for employees with detailed Electronic Respiratory Medical Evaluation (ere), Respiratory Fit Test (RFT) and online training to ensure they understand the use and care of respirators during pandemic. Fit testing activity was done across 42 cities during pandemic through a third-party service provider.

LEADERSHIP FOR COVID-19

Customer expectation shifted since COVID-19, the Company relies on scientific analysis and recommendations on how to prevent COVID-19 spread in your plant when making team-based decisions on the health and safety of its employees. The promotion of ZERO CLOSE CONTACT Concepts through leadership was crucial and was carried out in letter and spirit throughout the organization. 3M India adopted the leadership top down approach which motivated and strengthened a positive culture during this pandemic journey through foresight and proper planning. Like personal adversity builds character, a crisis enhances the bonding of team and culture within the company when leaders do the right thing. This type of leadership shows "respect for every individual," which is the first guiding principle for Operational Excellence that yields a high performing culture with long-term profits.

In the 2020, As the pandemic situation continued to evolve across India and the world, it became all the more important to keep its facilities safe from COVID. While we care for others, protecting our key asset is main, the 3M employee. 3M Corporate had foresight and devised a pandemic preparedness plan for implantation at all facilities. Project Zero was initiated as an effort to prevent the spread of COVID-19, with a goal of Zero work colleagues identified as close contacts of confirmed COVID-19 cases. Winning Behaviors with GROW Inside Out Coaching was extensively used for Breakthrough Performance in our EHS Culture. The EHS Culture excellence model of See and Act was used to drive the ideal behaviors during Pandemic through Project Zero GROW model. Technology is important in achieving excellence and EHS is no exception to this.

3M Corporate developed an online platforms where all the protocols pertaining to COVID-19 management were put in one place for all the 3M subsidiaries to follow, this gave 3M India an upper hand in preparing the facilities in line with global prevailing control systems for mitigating the risk of COVID-19.

3M believes in the hierarchy of controls which we always follow when it comes to safety and Pandemic was no different:

• At 3M India for conducting high quality EHS Leadership interactions with workers, capturing these discussions in the See & Act tool in EHS 360.

• Power BI is extensively used for Trend charts of EHS, giving more time for EHS engineers to be on shopfloor.

• A virtual platform was created to learn from best practices in other 3M subsidiaries.

• When the facilities were about to reopen we ensured Return to Work Protocols were implement through use of technology, Various Skype and Microsoft team broadcasts sessions were held on weekends to ensure employees families trained on the protective measures one needs to take during covid-19 while at home and outside. It was important this message has to reach people who do not use laptops, so, links were created, and employees were reached through every available social media platform.

• An Online mobile application was developed to perform the daily self-assessment by the employees with all controls of data privacy in place, we call it 3M SPANDAN. Where employees, who come to any 3M India facilities take the Self-assessment check on a daily basis and obtain a Visual Health Code. Health code shall indicate to the 3M management the list of employees who will be arriving to work on that day. It will also indicate the employees who will be working from home based on the self-assessment results. This helps us in identifying any high-risk employee and appropriate control measures are initiated.

AWARDS AND RECOGNITION

• Your Company was featured in Forbes India publications "Ultimate 120" list which honoured companies and individuals who took the lead and performed under challenging conditions due to COVID-19.

• 3M Indias coating technology (3M™ Scotchkote™ Poly-Tech Exp-RG 700 Solar Heat Reflective Coating) was honoured as amongst Fast Companys World Changing Ideas of 2020.

• Two women leaders from your Company were recognized by external bodies for their professional achievements. The Companys CFO was recognized as the Best Woman CFO 2020 at the 4th edition of Businessworld Best CFO Summit & Awards for outstanding performance and leadership. The Companys General Counsel, was awarded the Women in Law excellence award 2021, instituted by the Legal Era, Legal Media Group which recognizes leadership, innovation, and achievements of women lawyers.

• The Companys local product packaging designs for 3M™ Conspicuity tape, Command Hook promotional pack & Scotch-Brite broom were recognized for the Indiastar Packaging Awards, a national award for excellence in packaging, instituted by the Indian Institute of Packaging.

• Your Companys Bangalore Electronics City plant was recognized by CII (Confederation of Indian Industry) with a 4 Star Rating for its commitment to EHS Practices and was awarded with the "Certificate of Commitment" for the year 2020. This award category considered industries that excel in EHS practices and its implementation.

• The Companys Ranjangaon Plant received the CEO EHS Award, the highest honour across 3M for manufacturing sites that demonstrate performance excellence in environment, health, and safety.

• The Company has been recognized by key automotive customers for quality excellence through FY 20-21.

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 Stake holders.

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

every employee of the Company.

On behalf of the Board of Directors

Ramesh Ramadurai Mamta Janak Gore
Managing Director Whole-time Director &
Place : Bengaluru DIN:07109252 Place : Dubai Chief Financial Officer
Date : May 28, 2021 Date : May 28, 2021 DIN:08792863