3M India AR 2005

3M India Limited
(formerly Birla 3M Limited)
BOARD OF DIRECTORS
DIRECTORS Mr. Yashovardhan Birla Chairman
Mr. Bert O’Donoghue Managing Director
Mr. Thomas P. Spencer Director
Ms. Mary B. McCormick Director
Dr. Carlisle S. Boyce Director
Mr. B.S. Iyer Director
Mr. D.J. Balaji Rao Director
Mr. Amit Mukherjee Director
Mr. B.V. Shankaranarayana Rao Director
ALTERNATE DIRECTOR Mr. Brad C. Sweet Alternate to Mr. Thomas P. Spencer
COMPANY SECRETARY Mr. K. Ramesh Chandra
AUDIT COMMITTEE Mr. B.S. Iyer Chairman

MEMBERS Mr. D.J. Balaji Rao
Mr. Amit Mukherjee
Mr. Thomas P. Spencer
Ms. Mary B. McCormick
SHAREHOLDERS’ Mr. D.J. Balaji Rao Chairman

GRIEVANCE COMMITTEE Mr. B.S. Iyer
Mr. Amit Mukherjee
Mr. Yashovardhan Birla
Mr. Bert O’Donoghue
BANKERS Bank of America

BNP Paribas
Canara Bank
Citibank N. A.
Corporation Bank
Deutsche Bank
Hongkong & Shanghai Banking Corporation Limited
ICICI Bank Limited
State Bank of India
Vijaya Bank
HDFC Bank
AUDITORS M/s. Lovelock & Lewes, Chartered Accountants
LEGAL ADVISORS J. Sagar Associates

Advocates & Solicitors
4121/B, 19 ‘A’ Main, 6th Cross
HAL II Stage Extention, Bangalore - 560 038
SHARE TRANSFER AGENTS Karvy Computershare Pvt. Ltd.

46, Avenue Ford
Street No. 1, Banjara Hills
Hyderabad - 500 034
Tel: 040-23420816 / 824
Fax: 040-23420814
WEBSITE www.3m.com/intl/in
INVESTORS QUERIES 3mindia.investorhelpdesk@mmm.com
innovate, grow, deliver 1

3M India Limited
Corporate Office
Raheja Paramount
138, Residency Road
Bangalore - 560 025
Tel : 080 - 22231414
Fax : 080 - 22231450
Registered Office
Plot No. 48-51, Electronics City
Hosur Road
Bangalore - 560 100
Tel : 080 - 28520203
Fax : 080 - 28520576
2 innovate, grow, deliver

3M India Limited
Vision
S To be the most innovative
enterprise and the preferred
supplier
Values
S Satisfy customers with superior
quality value and service.
S Provide investors an attractive

return through sustained quality
growth.
S Respect our social and physical

environment.
3M Performance
S Be a company employees are
proud to be part of. Initiatives
S Six Sigma
S 3M Acceleration
S Sourcing effectiveness
S eProductivity
S Indirect Cost Control

3M India Limited
MESSAGE FROM THE CHAIRMAN
o
The year ended December 31, 2005 was indeed a momentous one for us. Our
Company witnessed excellent growth on the top & bottom line & is well ahead of the
industry average in terms of growth. I am delighted with our performance.
For Companies, scaling up is vital for longevity and prosperity. The growth it
generates feeds customer demand for stronger, more stable partners, who consistently
deliver value at competitive costs. Strong growth permits companies to build their brand
and human capital, to seize market share, to amortize costs on sales, administration
and R&D, not to mention financial stability as I always believe, 3M’s drive to scale-up
will come from it’s innovative and diverse product line and most certainly, our ability to
offer long-term value to our customers.
Our strong product base coupled with a sound business model, is fortified by a
leadership that leads by example. A leadership that rolls up its sleeves and dives into the
details, be it project reviews or scoping customer needs or for that matter motivating their
teams. I thank them for leading 3M India so well and I am confident of their ability to
lead our company to an even stronger & greater future.
Finally, I believe that such strong results are a product of a dedicated, committed
& hard-working team. I thank them for their stellar performance and I exhort them to
continue to foster their culture of excellence, while sticking to the highest ethical standards.
Defining a vision of the future, far ahead of where we stand today, is essential to
unlock the imagination and passion of people. We need to internalise each facet of this
vision, see where we are found wanting, and systematically address each shortcoming.
Once the vision becomes part of our bloodstream, growth is automatic & a certainty.
Yas hovar
arddhan BBir
ir
irlla

3M India Limited
MESSAGE FROM THE MANAGING DIRECTOR
o
The people at 3M India are committed to delivering solutions to our customers problems, using innovative 3M technologies
and products, growing faster than the economy we serve and delivering strong results. In 2005, they continued to transform the way
we operate, achieving several new milestones – both financial and in other key areas of operating performance.
I am delighted to report to you that your Company registered a top line growth of 45.4% over 2004, way above industry
averages. We posted another all-time high in earnings growth of 50.4%. Our results were driven primarily by a combination of solid
top-line growth and continued improvements in operational efficiency. In addition, cost-reduction projects related to our corporate
initiatives had a direct impact on our bottom line. Needless to say, the very core of our raison d’etre are our customers – working
closely with them, creating and sustaining customer loyalty has contributed significantly to our results.
A rejuvenated culture of accountability is reinforcing the delivery of broad-based business results and all of our businesses
contributed to our sales and profit growth in 2005.
We enter 2006 with strong momentum, confident in our ability to sustain double-digit earnings growth both this year and
longer-term. We’re delivering strong results by leading change and leveraging the power inherent in the 3M business model. A culture of
customer-inspired innovation is at the core of this business model. Our people apply multiple technologies to a broad spectrum of markets,
and they continue to transform the process of innovation – from idea creation to successful product commercialization – by making better
choices and at a faster pace. We have substantially reduced cycle time – the number of months it takes for a qualified product idea to go
from concept to successful commercialization. That means sales start earlier and add up more quickly.
Six Sigma is 3M’s overarching initiative, and it continues to drive growth, reduce costs and increase cash flow in 3M businesses
around the world. It has become deeply embedded in every function and business. Simply put, it’s now the way we work. A key way in which
we use Six Sigma tools is “Six Sigma with Our Customers” projects - these joint projects produce a relationship with customers that
transcends that of the traditional role of a product supplier. We come to be appreciated as a valued business partner, as well.
Achieving results ethically is a cornerstone of the 3M culture. Close to two decades of operating with honesty and integrity has
earned the company trust from customers, respect and credibility, and dedication from our employees. Our reputation is an incalcu-
lable asset and a source of pride for 3Mers in India. We recognize that good reputations are much more easily lost than won, and we’re
fully committed to protecting our reputation for straightforward, ethical behavior.
The impressive results that your Company has delivered would not have been possible without the yeoman contribution of all
employees, channel partners and outsource partners who work day and night to execute and deliver the vision of the company. I a m
sure all of you will join me in complimenting them for putting in extraordinary work to achieve wonderful results.
I am exceptionally proud of the 3M employees in India and what they have achieved. Not only am I proud of the business
results but also the way that they have displayed their humanity by contributing from their own pockets to support the Prime
Minister’s Disaster Fund at the time of the recent terrible earthquake in Northern India. Your Company had a contribution
matching scheme and the employees really stepped up. This group of employees are the equal of any group of 3M employees globally.
As we move forward, we will start to increase our investments in India to create an infrastructure to enable continued
growth that is well in excess of the economic growth of the country.
Finally, I would like to thank your Board of Directors. Their leadership and advice to me and our team is invaluable.
As I look to the future, I sincerely believe that our best years are ahead of us.
Bert O’Donoghue
o
3M India Limited
REPORT OF THE DIRECTORS

Your Directors have pleasure in presenting their Report and the reasonable and prudent so as to give a true and fair view of
Audited Accounts for the year ended December 31, 2005. the state of affairs of the Company for the year ended
December 31, 2005 and of the profit of the Company for that
Financial Results
period;
(Rs. in lakhs)
iii) We have taken proper and sufficient care for the maintenance
For the year For the year of adequate accounting records in accordance with the
ended ended provisions of this Act, for safeguarding the assets of the
December 31, December 31, Company and for preventing and detecting fraud and other
2005 2004 irregularities;
1. Net Sales including iv) We have prepared the financial statements for the year ended
other Income 38,306.05 25,973.74 December 31, 2005 on a going concern basis.
2. Exports included in PARTICULARS OF CONSERVATION OF ENERGY,
the above 645.90 36.87 RESEARCH AND DEVELOPMENT, TECHNOLOGY
3. Total Expenditure 31,560.01 21,320.50 ABSORPTION AND FOREIGN EXCHANGE EARNINGS
4. Interest 14.68 21.11 AND OUTGO
5. Profit after Interest Report required to be made pursuant to Clause (e) of Sub-section
but before Depreciation (1) of Section 217 of the Companies Act, 1956 read with the
and Taxation (1-3-4) 6,731.36 4,632.13 Companies (Disclosure of Particulars in the Report of Board of
6. Depreciation 673.06 528.01 Directors) Rules, 1988 and forming part of the Director’s Report is
given in Annexure B of this report.
7. Provision for Taxation 2,216.53 1,550.55
8. Profit after Taxation 3,841.77 2,553.57 Directors
Mr. Lee M. Kennedy resigned as Managing Director on August 31,
Sales and Earnings 2005 and in his place, Mr. Bert O’Donoghue was appointed as
During the year, all business segments performed well, which Managing Director. Dr. Paul Rosso resigned as Director on October
resulted in local sales growth of 45.4 % over the previous year. 26, 2005 and in his place, Dr. Carlisle Boyce was appointed as a
Profit after Taxation grew by 50.4 %. Director.
Dividend The Board of Directors places on record their sincere appreciation
to Mr. Lee M. Kennedy and Dr. Paul Ross for their contribution.
In view of the on-going investment and further expansion, it is decided
to retain the earnings. Hence, no dividend is recommended. Mr. B. S. Iyer and Dr. Carlisle Boyce are retiring by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves
Personnel for re-election / appointment.
The Board wishes to place on record its appreciation to all Auditors
employees in the Company, for their sustained efforts and immense
contributions to the high level of performance and growth that your M/s. Lovelock & Lewes, Chartered Accountants retire and are eligible
Company has achieved during the year. for re-appointment.
The Annual Report and Accounts are being sent to all shareholders of Acknowledgement
the Company without the statement of particulars of employees Under Your Directors wish to place on record their sincere appreciation
Section 217 (2A) of the Companies Act, 1956 read with (Particulars of for the assistance and support extended by customers, bankers, and
Employees) Rules, 1975. Any Shareholder interested in obtaining a vendors.
copy of the said statement may request for a copy in writing, to the
Managing Director at the Registered Office of the Company. Your Directors also wish to place on record their sincere
appreciation for the valuable contribution, efforts and the spirit of
Directors’ Responsibility dedication shown by all employees.
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
Directors confirm that : On behalf of the Board of Directors
i) In the preparation of annual accounts, the applicable accounting Bert O’Donoghue
standards have been followed along with proper explanation Managing Director
relating to material departures;
ii) We have selected such accounting policies and applied them Place : Bangalore B.V. Shankaranarayana Rao
consistently and made judgements and estimates that are Date : February 20, 2006 Director

3M India Limited
Additional information to be furnished u/s 217 (1)(e) of the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988.
1. Conservation of Energy
Installation of 100 nos of T5 lamps for the new converting area resulted in reduction of power consumption.
Installation of variable frequency drives in the A/C and ventilation arrangement of the Trolley condition area VFD’s will
vary the speed of the Motor depending upon the requirement and at least 20% saving is expected to the connected
load of 15 KW of the motors at AHU’s.
The above measures in conservation of energy resulted in annual savings of Rs 3.6 lakhs.
2. Technology Absorption and Research & Development
1. Specific areas in which Research & • Consumer Markets – Wipes

Development carried out by the Company • Automotive After Markets – Formulations
• Corrosion Protection Products – Epoxy Powders,
• Abrasives
2. Benefits derived as a result of the • New applications developed to improve customers process
above Research & Development • Cost effective solutions to bring down the total cost of
applications and products
• Patent application filed
3. Future plan of action Support product application development and localise

products in areas of Corrosion Protection, Automotive
Aftermarkets, Abrasives, Polymers - Plastic and Rubber
processing
4. Expenditure on Research & Development (Rs.in Lakhs)

a) Capital Nil
b) Recurring 15.60
c) Total 15.60
d) Total Research & Development expenditure
as a percentage of total turnover 0.04 %
3. Foreign Exchange Earnings or Outgo
During the year, the Foreign Exchange earnings were Rs.676.68 lakhs and Foreign Exchange Outgo was Rs. 1055.89 lakhs.
On behalf of the Board of Directors
Place : Bangalore Bert O’Donoghue B.V. Shankaranarayana Rao

Date : February 20, 2006 Managing Director Director

3M India Limited
Investors are cautioned that this discussion contains statements that Company sources its requirement of materials both for
involve risks and uncertainties. Words like anticipate, believe, estimate, manufacturing & trading from its 3M Affiliates around the
intend, will & expect and other similar expressions are intended to globe as the products are technologically advanced.
identify such forward looking statements. The Company assumes no
Major portion of the revenue comes from traded goods which
responsibility to publicly amend, modify or revise any forward looking
3M has technological advantage worldwide. Few of our power
statements, on the basis of any subsequent developments, information
brands are Scotchkote, Scotchtint, Micropore, Thinsulate,
or events. Besides, the Company cannot guarantee that these
Post-it ®, Filtrete™, Scotch®.
assumptions and expectations are accurate or will be realized and
actual results, performance or achievements could thus differ materially b) Opportunities and Threats
from those projected in any such forward looking statements.
2005 was another encouraging year for the Indian economy.
The continued stability at home contributed to the favourable
MANAGEMENT DISCUSSION AND business environment.
ANALYSIS
We believe that our ability to compete will depend on a
The Company has a wide spectrum of products to cater to the number of factors beyond our control which include
requirements of Industrial, Automotive, Healthcare, Consumer &
Office Markets, etc., to name a few. • currency exchange fluctuations
a) Industry Structure and Developments • the price at which our competitors offer their
products and services and
The Company sales excluding exports grew by 46.4 % over
previous year. • to the extent to which our competitors respond to
the customer’s needs
The Company continues its focus on Industrial Segments, its
technological advantage of products and expertise. Your We strongly believe in our Brand Equity.
c) Segment-wise or product-wise performance

INDUSTRIAL MARKETS
3M ’s Industrial business segment represents some of our original businesses, such as tape, coated and non-woven abrasives, and specialty
adhesives. As industrial brands are continuously transformed through technological innovation, this business segment also aptly represents
3M innovations at work. Our Industrial market now offers the broadest line of products for markets in automotive,aerospace and automotive
after markets. Product applications range from grinding, surface conditioning and super abrasives to packaging systems.
Rs. in lakhs
31.12.05 31.12.04
Financial Highlights for the year Segment Revenue 6,456.68 4,781.80
ended December 31, 2005 Profit before Interest & Tax 1,388.86 1,003.14
Capital Employed 1,361.93 1,133.52
Highlights • Strong growth in the construction components segment where specialty
tapes are used for various applications like curtain walling, glazing and panel
attachment applications in elevators.
• Growth in metal fabrication segment where our abrasives products are used
for MS and SS fabrication applications.
• Steady and sustained growth in the AOEM and auto parts segments where
our specialty tapes and abrasives are used for various applications in the
manufacture of automobiles, motorcycles and various auto components.

3M India Limited
AUTOMOTIVE & SPECIALTY MATERIALS MARKETS

Corrosion Protection Products offer high quality high durability coatings for the pipelines which are used for transporting crude oil /
natural gas fromexploration area like oil fields to refineries.
Specialty Materials represents some of the very advanced technological products to automotive / oil & gas and industrial segments
which add tremendous value to our customers in auto components manufacturing industry.
Design & sell engineered products for the automotive OEM industry. Provide productivity enhancing solutions for the automotive
aftermarkets in car repair and in enhancing appearance of cars through a wide range of car care treatments and accessories
Rs. in lakhs
31.12.05 31.12.04
ended December 31, 2005 Profit before Interest & Tax 1,741.33 1,195.98
Highlights • Oil exploration projects, auto components have progressed during the second half of the
year resulted in significant growth. Several initiatives have been implemented to improve
productivity and growth for corrosion protection products and specialty materials in the
coming years depends largely on theautomotive industry performance and implementation
of oil exploration projects.
• Recorded good growth in the automotive OEM business for both designed
and engineered products.
HEALTH CARE MARKETS

Health Care businesses provide innovative products, services and technologies that help improve people’s health and well being in the
Hospitals and Dental clinics. 3M India holds leading position in a broad array of market segments – in medical, surgical and dental
products and also provides technologies for other health care manufacturers.
Rs. in Lakhs
31.12.05 31.12.04

ended December 31, 2005 Profit before Interest & Tax 335.08 274.98
Highlights • 3M has been working relentlessly with customers in imparting education on hospital /
dental practices and protocol development / compliance across the country.
• Over 40,000 programmes were conducted by marketing, technical and international
speaker programs in the hospital, dental and dairy industry. We worked with customers
and helped set-up local chapters of nurses clubs, infection control societies, etc., in
major cities.
• The launch of a new nanotechnology product Z350 was well received by dentists and
will lead to faster growth. Faster penetration in cleaning and disinfection products and
dressings helped growth in the medical business in 2005. The launch of orthodontic
products in 2005 will accelerate growth.
• Six sigma projects undertaken with some leading customers have helped improved
efficiency for the customers and have helped improved relationships and business for
3M with these customers.

3M India Limited
TRAFFIC AND SAFETY MARKETS

Products that enhance worker, public and vehicle safety as well as Corporate image around the world make up this business segment.
Major product lines include advanced reflective materials for traffic and personal safety; graphic films, hardware, software, inks and
toners for large-format identity and advertising graphics; respirators & hearing protection products for worker safety, library security
systems & computer filter screens for eye protection.
Rs. in Lakhs
31.12.05 31.12.04
ended December 31, 2005 Profit before Interest & Tax 1,621.54 970.47
Highlights • Expansion of the road network at the national and state levels resulted in increased
demand for the Company’s reflective sheeting products for traffic signage.
• The Company’s reflective sheeting has been approved for use in the prestigious,
Mumbai Metropolitan Regional Development Authority (MMRDA) road projects.
• The Company’s commercial graphics division supplied commercial fascia signage material
(vinyl and flexible substrate) to several large national Corporate identity re-imaging
Programs.
• During the year, the Company’s occupational health & environment safety
division bagged contracts for supply from some of the largest public and private sector
companies in the country and has strengthened its leadership position.
• The Company’s security system division supplied state of the art passport readers to
the 4 large international airports in the country thereby helping them in speedy
clearance at the immigration counters at the airports.
CONSUMER & OFFICE MARKETS, CONSTRUCTION MARKETS

Supplying an array of products that help keep homes cleaner, offices organized and buildings maintained, this business segment features some
of the world ’s best-known brands, from Scotch® to Scotch-Brite® and Post-it ®.
Rs. in Lakhs
31.12.05 31.12.04

ended December 31, 2005 Profit before Interest & Tax 566.35 451.13
Capital Employed 946.22 792.78
Highlights • Multi-packs (save Rs. 6/-) was launched and has received very good response.
Engaged the customers through enhanced interactions.
• Engaged the office target segment to show case the product range.
• Client – Architect meet were held in key metros to share best practices from around
the world, with the key target audience.
OTHERS
Rs. in Lakhs
31.12.05 31.12.04
Financial Highlights for the year Segment Revenue 671.40 69.86

ended December 31, 2005 Profit before Interest & Tax 101.95 (19.25)
Capital Employed - 13.71

3M India Limited
d) Outlook g) Developments in Human Resources / Industrial

Relations
India is one of the fastest growing global economies. The
fastest growth is projected for the developing nations like As on 31 st December 2005, 3M India had 532 full time
India and China, where the robust economic growth employees on its rolls, a net increase of 76 from the previous
accompanies the increase in all areas of an industry, which is year. While the new employee base has been a good mix of
expected in the years to come, The Company’s long term professionals from all functions, the largest pool is from the
competitive position, particularly given the capital-intensive Sales and Marketing function. More than 55 years after
and commodity based nature of the industry, is closely McKnight laid out the basic management principle for 3M, the
associated with the Company’s ability to invest in projects Company upholds the belief that it is only through empowering
that provide adequate financial returns and to manage and encouraging employee initiative that the Company can
operating expenses effectively. achieve its accelerated growth targets.
Forward looking statements are based on certain 3M continues to offer employees an environment of high
assumptions and expectations of the future events that are ethical standards, performance orientation, growth and
subject to risks and uncertainties. Actual future results and development. The Company’s well-defined performance
trends may differ materially from historical results, depending management system incorporates an objective process for
on variety of factors. assessment of contribution, while also ensuring that employee
rewards are in alignment with the Company’s achievements.
e) Risks and concerns
To ensure that leadership development remains a key focus
Risk is an integral part of any business venture and we are no area, the Company has been organizing leadership programs
exception to it. The risks faced by us are both internal and for its new supervisors. “Leadership Attributes” is a salient
external in nature. While the internal risk relates to litigations, feature of the performance assessment system – equally
disputes, terms of financing, dependence on suppliers and applicable to all employee levels of 3M.
vendors and certain management related issues and the external
2005 has been a year marked with initiatives to recognize,
ones include risks in the nature of government policy, innovations,
reward and motivate employees. We anticipate that the pace
significant changes in laws applicable to the Company.
of these initiatives will gain further momentum in 2006.
The Company continuously monitors business and operations
risk through business process re-engineering and reviewing. On behalf of the Board of Directors
All key functions and divisions are independently responsible
to monitor risk associated within their respective areas of
operations such as production, treasury, insurance, legal and Bert O’Donoghue
other issues like health, safety and environment. The Company Managing Director
is also exposed to financial risks in the form of foreign exchange
Place : Bangalore B.V. Shankaranarayana Rao
fluctuations and interest rates variations.
Date : February 20, 2006 Director
f) Internal control systems and their adequacy
The Company has a robust system of internal control to allow
optimal use & protection of assets, facilitate accurate and
timely compilation of financial statements and management
reports & ensure compliance with statutory laws, regulations
& Company policies. The Company also has an extensive
budgetary control mechanism whereby the Management
regularly reviews actual performance with reference to the
budgets and forecasts.
The Corporate Audit Group functionally reports to the Audit
Committee and administratively to the Managing Director.
The Audit Committee periodically reviews the audit plans,
audit observations of both internal and external audits, risk
assessment and adequacy of internal controls. The Company
has developed adequate internal control systems
commensurate to its size and nature of its business.
Reports of the Internal Auditor are submitted to the
Management and Audit Committee. The Statutory Auditors
also review their findings with the Senior Management and
the Audit Committee.

3M India Limited
REPORT ON CORPORATE GOVERNANCE

The Board of Directors is pleased to present a report on the The Company’s philosophy on Corporate Governance is to
compliance of Corporate Governance requirements as per the Listing endeavour to ensure :
Agreements with the Stock Exchanges. - that systems and procedures which monitor compliance
The revised Clause 49 of the Listing Agreements is effective from with laws, rules and regulations are in place in each area
1st January 2006. However, with a view to comply with spirit of the law, of its business
the Company had already put in place a majority of the requirements and - that relevant information regarding the Company and its
the implementation of remaining requirements have been put in process. operations are disclosed, disseminated and easily available
The following paragraphs along with management discussion and to its stakeholders, and
analysis of financial condition, results and operations of the Company, - that the Board of Directors are kept fully informed of
furnished in the Company’s Annual Report provide the compliance
position in regard to the revised Clause 49 and the initiatives taken • all material developments in the Company
by the Company towards meeting the same. • the risks in its business and its operations
Company’s Philosophy on Corporate Governance Code of Conduct
3M India Limited’s philosophy of Corporate Governance stems from The Company’s Board has laid down a code of conduct for all Board
its belief that the Company’s business strategy and plans should be Members and Senior Management of the Company. The code of
consistent with the welfare of all its stakeholders, including the conduct is available on the website of the Company,
society at large. Good Corporate Governance practices enable a www.3M.com/intl/in.
Company to attract financial and human capital and leverage these
resources to maximize long-term shareholder value, while
preserving the interest of all the stakeholders.
Board of Directors
The Board of Directors of the Company, is headed by the Non-Executive Chairman and renowned industrialist, Mr. Yashovardhan Birla. The
Board of the Company comprises of proper blend of Executive, Non-Executive and the Independent Directors, with professional background
and experience in Business and Industry, Finance & Law. The details of Board composition, their other directorships / committee memberships
and shareholding in the Company, as of December 31, 2005 are appended below :
Whether Promoter, No. of outside No. of Board No. of shares
Executive, or Directorships Committees of Other held
Director Non-Executive / held * companies in which a
Independent Member #
Mr. Yashovardhan Birla (a) Non-Executive 6 2 ( 1 as Chairman) -

(Promoter) (Indian Promoter Group)
Mr. Bert O’Donoghue (b) Executive Nil Nil -
(Managing Director) (Promoter Group)
Ms. Mary McCormick Non-Executive Nil Nil -
(Promoter Group)
Mr. Thomas P. Spencer Non-Executive Nil Nil -
(Promoter Group)
Dr. Carlisle S. Boyce Non-Executive Nil Nil -
(Promoter Group)
Mr. B.S. Iyer Non-Executive & Nil Nil -
(Chairman, Audit Committee) Independent
Mr. Amit Mukherjee Non-Executive & 1 Nil -
Independent
Mr. D.J. Balaji Rao Non-Executive & 7 8 (of which, Chairman -
(Chairman - Shareholders Independent in 3 Committees)
Grievance Committee)
Mr. Brad C. Sweet ** Non-Executive Nil Nil -
(Promoter Group)
Mr. B. V. Shankaranarayana Rao Executive Nil Nil 600
(Whole-Time Director) (Promoter Group)
The tenure of each Independent Director has not exceeded the maximum of nine years. The Independent Directors satisfy the criteria
prescribed under the revised Listing Agreements.
* Excludes alternate directorship, directorship in foreign companies and private companies, which are neither a subsidiary nor a holding Company of a
public Company.
# Excludes committees other than Audit Committee, Shareholders / Investors Grievance Committee and companies other than public limited companies.
(a) Nominee of Shearson Investment and Trading Company Limited
(b) Nominee of 3M Company, USA
** Alternate Director to Mr. Thomas P. Spencer

3M India Limited
BOARD MEETINGS & AGM

During the year 2005, four Board Meetings were held, the dates being February 25, 2005, April 29, 2005, July 29, 2005 and October 26, 2005.
The last AGM was held on April 29, 2005.
The composition of the Board of Directors as on December 31, 2005 and details of attendance of each Director at the Board Meetings
and AGM are given below :
Director No. of Board Whether attended
Meetings attended last AGM
Mr. Yashovardhan Birla - No
Mr. Bert O’Donoghue @ 1 No
Mr. B. V. Shankaranarayana Rao 4 Yes
Ms. Mary McCormick 1 No
Mr. Thomas P. Spencer - No
Mr. B.S. Iyer 4 Yes
Mr. Amit Mukherjee 3 Yes
Mr. D.J. Balaji Rao 4 Yes
Dr. Carlisle S. Boyce # 1 No
Mr. Brad C. Sweet - No
(Alternate to Mr. Thomas P. Spencer)
@ Appointed as Managing Director, effective 1st September 2005
# Appointed as a Director on October 26, 2005
Mr. Lee M. Kennedy * 3 Yes
Dr. Paul Rosso ** - No
* Resigned on 31st August 2005
** Resigned on October 26, 2005
BOARD COMMITTEES - Matters required to be included in the Director’s

Responsibility Statement to be included in the Board’s
The Board has constituted the following Committees of Directors:
report in terms of clause (2AA) of Section 217 of
a) Audit Committee : the Companies Act, 1956.
The Audit Committee of the Company is functioning in - Changes, if any, in accounting policies and practices
accordance with the requirements of Section 292A of the and reasons for the same.
Companies Act and the Listing Agreements. There has been - Major accounting entries involving estimates based
no change in the composition of Audit Committee during the
on the exercise of judgment by Management.
year. As per the guidelines set out in the Listing Agreements,
the scope delegated to the Audit Committee by the Board, - Significant adjustments made in the financial
inter-alia, include the mandatory functions viz., review the statements arising out of audit findings.
report on Management Discussion and Analysis, significant - Compliance with listing and other legal requirements
Related Party Transactions, Management Letters issued by relating to financial statements.
the Statutory Auditors, Internal Audit Reports and Internal
Control Systems, overseeing financial reporting processes, - Disclosure of any related party transactions.
reviewing with the Management the financial statements, - Qualifications in the draft audit report.
accounting policies and practices and discussion with Internal
• Reviewing, with the Management, the quarterly financial
Auditors on any significant findings, financial and risk statements before submission to the Board for approval.
management policies.
• Reviewing, with the Management, performance of
The functions of the Audit Committee include the following: Statutory and Internal Auditors, adequacy of the internal
• Oversight of the Company’s financial reporting process control systems.
and the disclosure of its financial information to ensure • Reviewing the adequacy of internal audit function, if any,
that the financial statement is correct, sufficient and including the structure of the internal audit depart-
credible. ment, staffing and seniority of the official heading the
• Recommending to the Board, the appointment, re- department, reporting structure coverage and frequency
appointment and, if required, the replacement or removal of internal audit.
of the Statutory Auditors and the fixation of audit fees. • Discussion with Internal Auditors any significant findings
• Approval of payment to Statutory Auditors for any other and follow-up there on.
services rendered by them. • Reviewing the findings of any internal investigations by the
• Reviewing, with the management, the annual financial Internal Auditors into matters where there is suspected fraud
statements before submission to the Board for approval, or irregularity or a failure of internal control systems of
with particular reference to: a material nature and reporting the matter to the Board.

3M India Limited
• Discussion with Statutory Auditors before the audit Mr. B.S. Iyer is the Chairman of the Audit Committee. The
commences, about the nature and scope of audit as well Company Secretary acts as the Secretary to the Committee.
as post-audit discussion to ascertain any area of concern. All the members of the Audit Committee are financially literate
• To look into the reasons for substantial defaults in the and Mr. B. S. Iyer, Chairman, is a person with financial
payment to the depositors, debenture holders, expertise. He is in the Senior Management of a large reputed
shareholders (in case of non-payment of declared Listed Company and is also its Company Secretary.
dividends) and creditors.
At the invitation of the Committee, the Internal Auditor, the
• Carrying out any other function as is mentioned in the Managing Director, the Head of Finance, Head of Legal
terms of reference of the Audit Committee. Department & Statutory Auditors attend the Audit Committee
The Audit Committee is empowered, pursuant to its terms of meetings, to answer and clarify the queries that are raised at
reference, to: the Committee meetings.
• Investigate any activity within its terms of reference and The Company has an Internal Audit department, which carries
to seek any information it requires from any employee. out independent periodic reviews. The prime objective of
• Obtain legal or other independent professional advice such audits is to evaluate the functioning and quality of internal
and to secure the attendance of outsiders with relevant controls and provides assurance of its adequacy and
experience and expertise, when considered necessary. effectiveness. The scope of internal audit covers a wide variety
The Company has systems and procedures in place to ensure that of operational and financial matters and includes a follow-up
the Audit Committee mandatorily reviews: review of corrective actions agreed for implementation. The
adequacy of the internal control system as well as the report
• Management discussion and analysis of financial condition
of the internal audit is reviewed by the Audit Committee of
and results of operations.
the Board of Directors. In addition, an audit by Global Internal
• Statement of significant related party transactions (as Audit team of 3M Group, in accordance with 3M Group charter
defined by the Audit Committee), submitted by for internal audit, is also conducted.
Management.
There were no transactions of exceptional nature that
• Management letters / letters of internal control
weaknesses issued by the Statutory Auditors. required the specific attention of the Audit Committee.
• Internal audit reports relating to internal control b) Remuneration to Directors :

weaknesses.
The Company has currently two Executive Directors in
• The appointment, removal and terms of remuneration of Mr. Bert O ’Donoghue, Managing Director and Mr. B. V.
the Internal Auditor. Shankaranarayana Rao – Whole Time Director. Mr. Bert
The Audit Committee is also presented with the following information O’Donoghue took over as Managing Director w.e.f.
on related party transactions (whenever applicable) : 1st September 2005 from Mr.Lee M. Kennedy. The terms of
appointment of the Executive Directors are fixed by the Board
• A statement in summary form of transactions with related and approved by the Shareholders. The Non-Executive
parties in the ordinary course of business. Directors do not draw from the Company any remuneration
• Details of material individual transactions with related other than sitting fees. The Company has not constituted a
parties, which are not in the normal course of business. separate Remuneration Committee. None of the Non-Executive
Directors have any pecuniary relationship with the Company.
• Details of material individual transactions with related
parties or others, which are not on an arm’s length basis The terms of appointment and remuneration to Mr. Bert
along with management’s justification for the same. O’Donoghue, Managing Director and Mr. B. V.
During the year under review, four meetings of the Audit Committee Shankaranarayana Rao, Whole-time Director are governed
were held, February 25, 2005, April 29, 2005, July 29, 2005 and by the letters issued to the respective individuals on the basis
October 26, 2005. and within the terms approved by the Board.
The composition of the Audit Committee as at 31st December 2005 The remuneration approved by the Board to the new Managing
(all Non-Executive) and the attendance of the members at the Audit Director is within the ambit and limits of Schedule XIII. The
Committee Meetings held during the year are as follows: Company has approached the Central Government for
approving the Managing Director appointment and the
No. of Audit Committee shareholders’ approval is being sought at the ensuing Annual
Director
meetings attended General Meeting.
Mr. Thomas P. Spencer - Brief terms of remuneration to Mr. Bert O’ Donoghue
Ms. Mary B. McCormick 1 are as under :
Mr. B.S. Iyer 4 Term :
Mr. D. J. Balaji Rao 4
September 1, 2005 till August 31, 2010
Mr. Amit Mukherjee 3
Salary including allowances, incentive and perquisites :
Salary / Allowances – salary and allowances not exceeding
Rs. 10 Million per annum.

3M India Limited
Perquisites - The value of the perquisites shall not exceed Salary including allowances, incentive and perquisites :
Rs. 5 Million per annum and nature of perquisites is as given below:
Total value of salary & perquisites not exceeding Rs. 45 lakhs
a. Fully furnished company leased house. All the lease per annum or Rs.3.75 lakhs per month. Within the said limits,
provisions will be as per the rules and regulations of the the exact payment of remuneration shall be decided by the
leased accommodation Policy of the Company. Managing Director and communicated to Mr. B.V.
Shankaranarayana Rao from time to time.
b. Reimbursement of telephone rentals and the actual
business telephone calls. All charges for long distance Benefits / Perquisites :
personal calls will be borne by the individual. The perquisites would be mainly in the form of furnished
house or House Rent Allowance in lieu of the accommodation,
c. Company car with chauffer primarily for official use. The
with such other amenities and facilities as may be required
car will be fully maintained by the Company.
from time to time for security and upkeep, telephone at
Benefits / Perquisites : residence, electricity, security guard, medical facilities and
other facilities available to the Senior Management personnel
Additional perquisites, not included in the overall perquisites as per rules of the Company.
ceiling of Rs. 5 Million per annum
Others - Payment / remittance towards retiral benefits like
a. Children’s Education Allowance subject to a maximum Provident Fund, Superannuation, Gratuity, etc. shall be
of Rs.5,000/- per child per month for two Children, according to the Company’s Policy for Senior Management
studying in or outside India will be payable. and applicable statutory provisions from time to time.
However, the above statutory payments shall not be included
b. Passage money for children studying outside India / family for computation of Managerial Remuneration to the extent
staying abroad once in a year by economy class or once in they are not in excess of the limits prescribed under the
two years by first class from the place of their study / stay Income Tax Act, 1961.
abroad, if they are not residing with the Managing Director.
The perquisites for this purpose shall be valued as per Income
c. Leave Travel Concession : Return passage for self and family Tax Act, 1961, wherever applicable, and in the absence of any
as per the rules of the Company, once in a year, if the leave provisions in the said Act, the perquisites shall be valued at
is to be spent outside India. He will be eligible for leave actuals.
travel facility to home town for self and family twice a year.
Other terms of employment shall be on the same lines as
Brief terms of remuneration to Mr. B. V. applicable to the Senior Executives of the Company as per
Shankaranarayana Rao are as under : Policy of the Company.
Term : The contract of service of Mr. B. V. Shankaranarayana Rao is

terminable with a notice period of 90 days on either side.
April 1, 2004 till March 31, 2007
Details of remuneration paid to Executive Directors during the year 2005:

In Rupees
Period Salaries & Cost value of benefits Total
Name and Designation Allowances as per Indian Income
Tax Act, 1961
Mr. Lee M. Kennedy 1st January, 2005 -
(Managing Director) 31st August, 2005 62,58,626 16,06,516 78,65,142
st
Mr. Bert O’Donoghue 1 September 2005 -
(Managing Director) 31st December, 2005 30,00,800 11,88,885 41,89,685
Mr. B.V. Shankaranarayana Rao 1st January, 2005 -
(Whole-Time Director) 31st December, 2005 33,94,056 9,22,914 43,16,970
Presently, the Company does not have a scheme for grant of stock options either to the Executive Directors or to other employees.
Sitting Fees
Sitting fees paid to the Non-Executive Directors during the year 2005 are given below :
Board Meeting Committee Meetings Total
Director (Rs.) (Rs.) (Rs.)
Mr. Yashovardhan Birla - - -
Mr. B.S. Iyer 80,000 160,000 240,000
Mr. Amit Mukherjee 60,000 120,000 180,000
Mr. D.J. Balaji Rao 80,000 160,000 240,000
Dr. Paul Rosso, Ms. Mary McCormick, Mr. Thomas P. Spencer, Dr. Carlisle Boyce and Mr.Brad C. Sweet waived payment of sitting fees.

3M India Limited
SPECIFIC DISCLOSURE Compliance Officer. Information / declaration as required under

the said Rules are obtained from the Directors / Employees.
Related party transactions
Whistle-Blower policy
Disclosures on materially significant related party transactions :
• The Company has not implemented a Whistle-Blower policy.
• The Company sources major portion of its raw materials and
traded goods for sale from the parent Company, 3M Company, CEO / CFO certification
USA and its associated business enterprises. However, the
contracts entered for the above purpose are at arms length • The revised clause 49 of the Listing Agreement is with effect
basis and have no potential conflict with the interest of the from 1st January 2006 and hence the certificate from CEO/CFO
Company at large. is not provided to the Shareholders in the Annual Report for
the financial year ending December 31,2005.
• The details of the related party transactions are furnished in
Notes to Accounts, in accordance with the Accounting Standard OTHER DISCLOSURES
18. They are also approved by the Audit Committee. Mandatory requirements
• There were no financial or commercial transaction of material The Company has complied with all mandatory requirements.
nature with the Directors, Senior Management, their relatives
that had potential conflict with the interest of the Company at Non-Mandatory Requirements
large. The Company has a Non-Executive Chairman and his expenses are
Disclosure of Accounting Treatment reimbursed. However, no separate Chairman office is maintained
at the Company’s expense.
• There were no deviation from the Accounting Standards as
prescribed by the Institute of Chartered Accountants of India. The Non-Executive Directors are given adequate knowledge and
exposure on the Company’s business environment through
Risk Management
periodical presentations by the Company Business Heads.
• The Company has identified various risks and suggested
c) Shareholders’ / Investors’ Grievance Committee :
procedure to mitigate the same. The Audit Committee and the
Board have reviewed the same. When new risks are identified, The composition of the Shareholders’ Grievance Committee
the same would be then assessed, controls designed, put in as at 31st December 2005 and the attendance of the members at
place and enforced within a fixed timeframe, as set. the Shareholders’ Grievance Committee Meeting held during
the year are as follows:
Subsidiary Companies
• The Company does not have any subsidiaries. No. of Shareholders’
Director Grievance Committee
Capital Issues Meetings attended
• The Company has not made any capital issues during the year Mr. D. J. Balaji Rao 4
2005.
Mr. Yashovardhan Birla -
Management Discussion and Analysis Mr. Lee M. Kennedy * 3
• A detailed report on Management Discussion and Analysis of Mr. Bert O’Donoghue ** 1
financial condition, results and operations of the Company, as Mr. B. S. Iyer 4
approved by the Audit Committee is annexed to the Company’s Mr. Amit Mukherjee 3
Annual Report.
* Resigned as on 31st August 2005
Audit Qualifications ** Appointed as member of the Committee on October 26, 2005
• There were no qualifications by the Auditors in their report
for the previous financial year ended December 31, 2004. Mr. D. J. Balaji Rao, Non-Executive and Independent Director is the
Chairman of the Committee and Mr. K. Ramesh Chandra, Company
Regulatory compliance by the Company Secretary is the Compliance Officer of the Company.
• The Company has complied with all the requirements of The Shareholders’ Grievance Committee is authorised to :
regulatory authorities. No penalties/strictures were imposed
on the Company by Stock Exchanges or SEBI or any Statutory 1. Monitor the system of share transfer, transmission, sub
Authority on any matter related to capital market during the division & consolidation of share certificates and issue of
last three years. The Board has taken on record a compliance duplicate certificates.
report submitted by the Company’s Legal Counsel in this regard. 2. Deal with all investor related issues including redressal of
The Company is in the process of implementing a more complaints from shareholders relating to transfer of shares,
exhaustive internal system in this regard. non-receipt of balance sheet, etc.
Code for prevention of Insider Trading practices 3. To delegate such powers to Company’s officers, as may be
• The Company has established a code of conduct for Insider Trading necessary including powers to approve transfers,
as required under the Prohibition of Insider Trading Rules, 2003 transmissions, authenticate share certificates and to take other
(‘Rules’) and Mr. K Ramesh Chandra, Company Secretary is the actions in relation to Shareholder related matters.

3M India Limited
The Company through its Registrar and Share Transfer Agents has Postal Ballot
resolved most of the investor grievances / correspondence within a
During the year 2005, there was no business, which had to be
period of 7 days from the date of their receipt except in cases that
conducted through a postal ballot. At present, the Company does not
are constrained by disputes or legal impediments. However, the
have any resolution to be decided by the Members by Postal Ballot.
number of these cases are not material.
The Statistics of Shareholders Complaints received / redressed, Following are the details of the special resolutions passed by the
during the year 2005, is furnished below : Shareholders at the last three General Meetings :
No. of the Complaints relating to Non- Date of passing Subject matter

receipt of dividend warrants, Redemption /
22nd April 2004 Delisting from
Interest warrants, Annual Reports, Share 22
Delhi Stock Exchange
certificates, endorsement stickers & others,
received during the year 22nd April 2004 Re-appointment of
No. of Shareholders complaints resolved Mr. Lee M. Kennedy as
22 Managing Director
during the year
No. of pending share transfers as on
Nil Means of communication :
December 31, 2005
Quarterly financial results, including the half year results are
General Body Meeting published in Business Line (All India Edition) and Udayawani
Location and time where last three General Body Meetings were held : (Bangalore Edition). The annual audited accounts are likewise
published. The half-yearly report is not separately sent to each
Date Meeting Location Time household of the shareholders. In accordance with the listing
th
29 April 2003 AGM Hotel Leela Palace regulations, the Company’s audited and unaudited quarterly / half
23, Kodihalli, Airport Road yearly / annual results are also posted in the SEBI’s website under
Bangalore – 560 008 10.00 a.m. EDIFAR (Electronic Data Information Filing And Retrieval System).
22nd April 2004 AGM Hotel Leela Palace The Company’s financial results are also displayed in the Company’s
23, Kodihalli, Airport Road website, www.3M.com/intl.in
Bangalore – 560 008 10.00 a.m. The Management Discussion and Analysis report on the Company’s
29th April 2005 AGM Hotel Leela Palace activities during the year is published as part of the Company’s
23, Kodihalli, Airport Road Annual Report. This report has been placed to the Company’s Audit
Bangalore – 560 008 10.00 a.m. Committee.
General Shareholder information :
April 24, 2006

The Leela Palace,
Annual General Meeting 2006 No.23, Kodihalli,
Airport Road,
Bangalore - 560 008
Time 10.00 a.m.
Financial Calendar :
a) Date of Book Closure April 17, 2006 - April 24, 2006 (Both days inclusive)
b) Dividend payment date N. A.
c) Financial Results Third / Fourth week of April 2006 - Unaudited Results for the quarter ended March 2006.
Third / Fourth week of July 2006 - Unaudited Results for April / June 2006 and half year
results for Jan - June 2006.
Third / Fourth week of October 2006 - Unaudited Results for the quarter ended September 2006.
Third / Fourth week of February 2007 - Audited Results for the year ended December 31, 2006.
d) Listing on Stock Exchanges The National Stock Exchange Limited, Mumbai (Code - 3MIndia)
Bombay Stock Exchange Limited, Mumbai (Code - 523395)
The Calcutta Stock Exchange Association, Calcutta (Code - 12027) *
* applied for voluntary delisting. Final Certificate of delisting is yet to be received.

The Company has paid annual listing fees, as prescribed, to The National Stock Exchange Limited and Bombay Stock Exchange Limited, Mumbai
for the financial year, 2005 - 2006.

3M India Limited
Stock Price Data :
Year / Month Bombay Stock Exchange (BSE) National Stock Exchange (NSE)
(in Rs.) (in Rs.)
High Low High Low

Jan 05 597.00 510.00 590.00 512.10
Feb 05 630.00 546.20 648.00 531.00
Mar 05 568.95 485.00 551.00 483.15
Apr 05 567.00 504.20 553.00 464.10
May 05 782.80 550.00 780.00 562.00
Jun 05 724.50 592.00 776.95 608.30
Jul 05 910.00 608.20 905.00 622.80
Aug 05 849.00 778.00 840.00 782.75
Sept 05 999.00 800.00 990.00 780.05
Oct 05 888.00 696.00 890.00 681.00
Nov 05 809.00 705.20 810.00 721.00
Dec 05 939.00 769.00 925.00 761.00
Stock Performance :
BSE Sensex Vs. 3M Share Price
(Monthly Closing Price)
1000 1000
900
800 8000
700
600 6000
500
400 4000
300
200 2000
100
0 0
05 05 05 r0
5 05 05 l0
5 05 05 05 05 05
n
Fe
b ar Ap ay un Ju g
Se
p ct ov ec
Ja M M J Au O N D
Sensex 3M India
Crisil Index : Not applicable
Registrar & Share Transfer Agents :

Share registration and other investor related activities are carried out by our Registrar and Transfer Agents, M/s. Karvy Computershare
Private Limited for both Physical and Demat securities. Their address is appended below :
Karvy Computershare Private Limited
46, Avenue Ford, Street No. 1, Banjara Hills, Hyderabad - 500 034
Tel: 040-23420816 / 824 Fax: 040-23420814
E-mail : mailmanager@karvy.com Contact person : Mr. K. Subba Reddy
Share Transfer System :
Shares sent for transfer in physical form are registered and despatched within 15 days of receipt of the documents, if documents are found to
be in order. Shares under objection are returned within 15 days.
Monitoring of Share Transfers and other investor related matters are dealt with by the Shareholders’ Grievance Committee. The Company’s Registrars,
M/s. Karvy Computershare Private Limited process the share transfers in respect of physical securities on a fortnightly basis and the processed transfers
are approved by the authorized Executives of the Company also on a fortnightly basis.
All requests for dematerialization of shares, which are in order are processed within 15 days and the confirmation is given to the respective
depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

3M India Limited
DEMATERIALISATION OF SHARES AND LIQUIDITY

22.2 % of the total equity capital was held in dematerialised form with National Securities Depository Limited (NSDL) / Central Depository Services (India)
Limited (CDSL) as on December 31, 2005. Trading in Dematerialization form was effective from June 26, 2000.
Outstanding GDRs/Warrants, Convertible Bonds, conversion date and likely impact on equity: Not applicable
Distribution of Shareholding as on December 31, 2005
Range of Shares No of Shareholders % to total Shareholders No of Shares held % age to Total Shares
1 to 500 8,227 95.26 683,803 6.07
501 to 1000 196 2.27 155,054 1.38
1001 to 2000 86 1.00 129,686 1.15
2001 to 3000 56 0.65 141,576 1.26
3001 to 4000 19 0.22 65,390 0.58
4001 to 5000 6 0.07 27,352 0.24
5001 to 10000 24 0.28 173,654 1.54
10001 and above 22 0.25 9,888,555 87.78
Total 8636 100.00 11,265,070 100.00
Shareholding Pattern as at December 31, 2005

Category No of Shares Held Percentage of
Shareholding
A Promoter’s holding
1 Promoter’s
Indian Promoters 810,900 7.20
Foreign Promoters 8,562,000 76.00
2 Persons acting in concert - -
Sub Total: 9,372,900 83.20
B Non-Promoters holding
3 Institutional Investors
a Mutual Funds and UTI 35,341 0.31
b Banks, Financial Institutions,
Insurance Companies (Central / State Govt., Institutions,
non Government Institutions) 80 0.00
c FIIs - -
Sub Total 35,421 0.31
4 Others
a Private Corporate Bodies 445,455 3.95
b Indian Public 1,349,373 11.98
c NRIs/OCBs 60,849 0.54
d Any Other
- Trusts 1,072 0.01
Sub Total 1,856,749 16.48
Total 11,265,070 100.00
Plant Locations : Offices and address for communication :

Registered Office :
Plot No. 48-51, Electronics City, Hosur Road, Bangalore – 560 100
173/2, Madivala, Bandapura, Anekal Taluk, Bangalore – 562 106 Plot No. 48-51, Electronics City, Hosur Road, Bangalore - 560 100
Plot No.8, Moraiya Industrial Area; Tal Sanand, Corporate Office :
Sarkhej Bavla Highway, Ahmedabad –382 213 Raheja Paramount, 138, Residency Road, Bangalore - 560 025
On behalf of the Board of Directors
Place : Bangalore Bert O’Donoghue B.V. Shankaranarayana Rao

Date : February 20, 2006 Managing Director Director

3M India Limited
AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE

GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT(S)
To the Members of 3M India Limited

We have reviewed the implementation of Corporate Governance
produced by 3M India Limited during the year ended
31st December, 2005, with the relevant records and documents
maintained by the Company, furnished to us for our review and on
the Corporate Governance as approved by the Board of Directors.
The compliance of conditions of corporate governance is the
responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on
the financial statement of the Company.
We further state that such compliance is neither an assurance as to
the further viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
On the basis of our review and according to the information and
explanations given to us, in our opinion, the conditions of Corporate
Governance as stipulated in Clause 49 of the listing agreement(s)
which the Stock Exchange(s) have been complied with in all material
respect by the Company.
Usha A Narayanan
Partner
Membership Number 23997
For and on behalf of
Place : Bangalore Lovelock & Lewes
Date : February 20, 2006 Chartered Accountants

3M India Limited
AUDITORS’ REPORT TO THE MEMBERS OF 3M INDIA LIMITED (FORMERLY BIRLA 3M LIMITED)
1. We have audited the attached Balance Sheet of 3M India (f) In our opinion and to the best of our information and
Limited (formerly Birla 3M Limited) as at December 31, 2005, according to the explanations given to us, the said financial
and the related Profit and Loss Account and Cash Flow statements together with the notes thereon and attached
Statement for the year ended on that date annexed thereto, thereto give in the prescribed manner the information
which we have signed under reference to this report. These required by the Act and give a true and fair view in
financial statements are the responsibility of the company’s conformity with the accounting principles generally
management. Our responsibility is to express an opinion on accepted in India:
these financial statements based on our audit.
(i) in the case of the Balance Sheet, of the state of affairs
2. We conducted our audit in accordance with the auditing of the company as at December 31, 2005;
standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable (ii) in the case of the Profit and Loss Account, of the
assurance about whether the financial statements are free of profit for the year ended on that date; and
material misstatement. An audit includes examining, on a test (iii) in the case of the Cash Flow Statement, of the cash
basis, evidence supporting the amounts and disclosures in flows for the year ended on that date.
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial Usha A Narayanan
statement presentation. We believe that our audit provides a Partner
reasonable basis for our opinion. Membership Number 23997
3. As required by the Companies (Auditor’s Report) Order, 2003, For and on behalf of
as amended by the Companies (Auditor’s Report) (Amendment) Place : Bangalore Lovelock & Lewes
Order, 2004, issued by the Central Government of India in Date : February 20, 2006 Chartered Accountants
terms of sub-section (4A) of Section 227 of ‘The Companies
Act, 1956’ of India (the ‘Act’) and on the basis of such checks of
the books and records of the company as we considered
appropriate and according to the information and explanations
given to us, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report that:
(a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by
law have been kept by the company so far as appears
from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in agree
ment with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account
and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in sub-
section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from
the Directors, as on December 31, 2005 and taken on
record by the Board of Directors, none of the Directors
is disqualified as on December 31, 2005 from being
appointed as a Director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;

3M India Limited
ANNEXURE TO AUDITORS’ REPORT
Referred to in paragraph 3 of the Auditors’ Report of even date to 5. (a) In our opinion and according to the information and
the members of 3M India Limited (formerly Birla 3M Limited) on the explanations given to us, the particulars of contracts or
financial statements for the period ended December, 31, 2005 arrangements referred to in Section 301 of the Act have
been entered in the register required to be maintained
1. (a) The company is maintaining proper records showing full
under that section.
particulars including quantitative details and situation of
fixed assets. (b) In our opinion and according to the information and
explanations given to us, the transactions made in
(b) The fixed assets are physically verified by the management
pursuance of such contracts or arrangements and
according to a phased programme designed to cover all
exceeding the value of Rupees Five Lakhs in respect of any
the items over a period of three years, which in our
party during the year, have been made at prices which are
opinion, is reasonable having regard to the size of the
reasonable having regard to the prevailing market prices
company and the nature of its assets. Pursuant to the
at the relevant time.
programme, a portion of the fixed assets has been
physically verified by the management during the year and 6. The company has not accepted any deposits from the public
no material discrepancies between the book records and within the meaning of Sections 58A and 58AA of the Act and
the physical inventory have been noticed. the rules framed there under.
(c) In our opinion and according to the information and 7. In our opinion, the company has an internal audit system
explanations given to us, a substantial part of fixed assets commensurate with its size and nature of its business.
has not been disposed off by the company during the year.
8. The Central Government of India has not prescribed the
2. (a) The inventory including stocks with third parties has been maintenance of cost records under clause (d) of sub-section
physically verified by the management during the year. In (1) of Section 209 of the Act for any of the products of the
respect of inventory lying with third parties, these have company.
substantially been confirmed by them. In our opinion, the
9. (a) According to the information and explanations given to us
frequency of verification is reasonable.
and the records of the company examined by us, in our
(b) In our opinion, the procedures of physical verification of opinion, the company is generally regular in depositing
inventory followed by the management are reasonable undisputed statutory dues including investor education
and adequate in relation to the size of the company and and protection fund, employees’ state insurance, income
the nature of its business. tax, wealth tax, service tax, customs duty, excise duty and
other material statutory dues as applicable with the
(c) On the basis of our examination of the inventory records,
appropriate authorities.
in our opinion, the company is maintaining proper records
of inventory. The discrepancies noticed on physical (b) According to the information and explanations given to us
verification of inventory as compared to book records and the records of the company examined by us, there are
were not material. no dues of income tax, sales tax, wealth tax, service tax,
customs duty, excise duty and cess which have not been
3. (a) The company has not granted any loans, secured or
deposited on account of any dispute except for amount
unsecured, to companies, firms or other parties covered
claimed under show cause notice as detailed below:
in the register maintained under Section 301 of the Act
and therefore paragraphs iii(b), iii(c) and iii(d) of the Order, Name of Nature of Amount Period to Forum
are not applicable. the Statute Dues Rs. which the where the
(b) The company has not taken any loans secured or unsecured, amount dispute is
from companies, firms or other parties covered in the register relates pending
maintained under Section 301 of the Act and therefore Customs Act, Customs 3,119,000 1993 Commissioner
paragraphs iii(f) and iii(g) of the Order, are not applicable. 1962 Duty Matter of Customs
4. In our opinion and according to the information and explanations The Employees Employees 1,940,000 1997 Deputy
given to us, having regard to the explanation that certain items State Insurance State Director
purchased are of special nature for which suitable alternative Act, 1948 Insurance
sources do not exist for obtaining comparative quotations, there matter
is an adequate internal control system commensurate with the
size of the company and the nature of its business for the purchase 10. The company has not accumulated losses as at December 31,
of inventory, fixed assets and for the sale of goods and services.
2005 and it has not incurred any cash losses in the financial
Further, on the basis of our examination of the books and records
year ended on that date or in the immediately preceding
of the company, and according to the information and explanations
financial year.
given to us, we have neither come across nor have been informed
of any continuing failure to correct major weaknesses in the
aforesaid internal control system.

3M India Limited
11. In our opinion, and according to the information and

explanations given to us, the company has not given any
guarantee for loans taken by others from banks or financial
institutions during the year except in respect of a guarantee
given on behalf of a third party in an earlier year, for which the
company is carrying a provision of Rs.12,000,000 as the
recovery of related dues are not certain.
12. On the basis of an overall examination of the balance sheet of the
company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-
term basis which have been used for long-term investment.
13. During the course of our examination of the books and
records of the company, carried out in accordance with the
generally accepted auditing practices in India, and according
to the information and explanations given to us, we have
neither come across any instance of fraud on or by the
company, noticed or reported during the year, nor have we
been informed of such case by the management.
14. The other clauses, xi, xii, xiii, xiv, xvi, xviii, xix and xx of
paragraph 4 of the Companies (Auditor’s Report) Order 2003,
as amended by the Companies (Auditor’s Report) (Amendment)
Order, 2004, are not applicable in the case of the company for
the current year, since in our opinion there is no matter which
arises to be reported in the aforesaid order.
Usha A Narayanan
Partner
Membership Number 23997

Place : Bangalore Lovelock & Lewes
Date : February 20, 2006 Chartered Accountants

3M India Limited
BALANCE SHEET AS AT DECEMBER 31, 2005

Schedule As at 31.12.2005 As at 31.12.2004
Number Rs. Rs.
SOURCES OF FUNDS :
1. Shareholders’ Funds :
Share Capital 1 112,650,700 112,650,700
Reserves & Surplus 2 1,621,414,810 1,237,237,940
2. Loan Funds :
Secured Loans 3 - -
Unsecured Loans 4 - -
3. Net Deferred Tax Liability - 2,863,865
[Schedule 15, Note 17(b)]
1,734,065,510 1,352,752,505
APPLICATION OF FUNDS :
1. Fixed Assets :
Gross Block 5 701,261,487 663,325,878
Less: Depreciation 410,816,523 353,177,193
Net Block 290,444,964 310,148,685
Capital work-in-progress 2,866,538 11,122,248
2. Investments 6 - 16,000
3. Net Deferred Tax Asset 12,486,997 -
[Schedule 15, Note 17(b)]
4. Current Assets, Loans and Advances :
Inventories 7 601,544,384 402,165,570
Sundry Debtors 8 499,880,606 296,798,019
Cash and Bank Balances 9 762,014,155 618,097,308
Loans and Advances 10 338,238,422 258,197,439
2,201,677,567 1,575,258,336
Less: Current Liabilities and Provisions : 11
Current Liabilities 710,478,649 499,414,782
Provisions 62,931,907 44,377,982
773,410,556 543,792,764
Net Current Assets 1,428,267,011 1,031,465,572
1,734,065,510 1,352,752,505
Notes to accounts 15
The Schedules referred to above form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our For and on behalf of the Board
report of even date
Usha A Narayanan Bert O’ Donoghue B. V. Shankaranarayana Rao K. Ramesh Chandra

Partner Managing Director Director Company Secretary
Membership No. : 23997
Lovelock & Lewes
Chartered Accountants
Place : Bangalore
Date : February 20, 2006

3M India Limited
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2005
Schedule For the year ended For the year ended
Number 31.12.2005 31.12.2004
Rs. Rs.
INCOME :
Sales 4,029,457,944 2,712,258,968
Less: Excise Duty 230,639,389 139,762,609
3,798,818,555 2,572,496,359
Other income 12 31,786,183 24,878,025
3,830,604,738 2,597,374,384
EXPENDITURE :
Finished Goods purchased (traded) 1,203,926,577 933,189,771
Manufacturing, administrative and selling expenses 13 2,062,675,464 1,278,224,302
Depreciation 67,306,310 52,800,908
(Increase) / Decrease in inventories 14 (109,133,077) (77,252,585)
3,224,775,274 2,186,962,396
Profit before Taxation 605,829,464 410,411,988

Taxation for the year
- Current Tax [Schedule 15, Note 17(a)] 222,000,000 163,500,000
- Deferred Tax [Schedule 15, Note 17(b)] (15,350,862) (8,444,775)
- Fringe Benefit Tax 15,003,456 -
Profit after Taxation 384,176,870 255,356,763

Balance in Profit & Loss Account brought forward 1,139,022,940 883,666,177
Balance Transferred to Balance Sheet 1,523,199,810 1,139,022,940
Earnings Per Share - Basic and Diluted 34.10 22.67

(Schedule 15, Note 19)
Notes to accounts 15
The Schedules referred to above form an integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our For and on behalf of the Board
report of even date

Lovelock & Lewes
Place : Bangalore

3M India Limited
SCHEDULES TO ACCOUNTS
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 1:
SHARE CAPITAL
Authorised :
11,265,070 Equity Shares of Rs. 10 each 112,650,700 112,650,700
Issued, subscribed and fully paid up
11,265,070 Equity Shares of Rs. 10 each
Of the above 8,562,000 equity shares (Previous year - 8,562,000 equity
shares) are held by 3M Company, USA 112,650,700 112,650,700
112,650,700 112,650,700
SCHEDULE 2:
RESERVES AND SURPLUS
a. Capital Reserves 2,000,000 2,000,000

(State Investment Subsidy received from the Government of Karnataka)
b. Share Premium Account 94,990,000 94,990,000
c. Investment Allowance Reserve (utilised) 1,225,000 1,225,000
d. Surplus, being balance in Profit and Loss Account 1,523,199,810 1,139,022,940
1,621,414,810 1,237,237,940
SCHEDULE 3:
SECURED LOANS
Packing Credit/Cash Credit Account from banks - -

(Secured by first charge by way of hypothecation of all finished goods,
work-in-progress, raw materials, traded goods, stores,
book debts and all other movable assets)
- -
SCHEDULE 4:
UNSECURED LOANS - -
- -

SCHEDULE 5
FIXED ASSETS [Schedule 15, Note 1 (B) and (C)]
GROSS BLOCK - AT COST DEPRECIATION/AMORTISATION NET BLOCK
PARTICULARS As at Additions Deletions As at Upto For the year Sales/ Upto As at As at

31.12.2004 for the year for the year 31.12.2005 31.12.2004 adjustment 31.12.2005 31.12.2005 31.12.2004
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Freehold Land 7,806,562 - - 7,806,562 - - - - 7,806,562 7,806,562
Leasehold Land 27,854,456 - - 27,854,456 - - - - 27,854,456 27,854,456

(Refer Note (a) below)
Goodwill 57,202,270 2,814,900 - 60,017,170 51,861,816 8,155,354 - 60,017,170 - 5,340,454
Factory Building 61,848,245 876,982 - 62,725,227 17,237,666 2,073,171 - 19,310,837 43,414,390 44,610,579
Leasehold Improvements 33,425,600 132,083 - 33,557,683 17,907,390 7,092,313 - 24,999,703 8,557,980 15,518,210
(Refer Note (b) below)
Plant and Machinery 274,561,049 25,322,506 - 299,883,555 126,770,931 23,020,961 - 149,791,892 150,091,663 147,790,118
Data Processing Equipments 87,543,251 10,457,660 - 98,000,911 78,052,207 10,040,772 - 88,092,979 9,907,932 9,491,044
and Software
Furniture, Fixtures and

Office Equipments 106,551,914 7,998,458 (5,701,965) 108,848,407 55,540,812 16,197,579 (5,701,965) 66,036,426 42,811,981 51,011,102
(Refer Note (b) below)
Vehicles 6,532,531 - (3,965,015) 2,567,516 5,806,371 726,160 (3,965,015) 2,567,516 - 726,160
663,325,878 47,602,589 (9,666,980) 701,261,487 353,177,193 67,306,310 (9,666,980) 410,816,523 290,444,964 310,148,685
innovate, grow, deliver
Previous year 550,744,724 112,869,736 (288,582) 663,325,878 300,664,867 52,800,908 (288,582) 353,177,193 310,148,685 250,079,856
3M India Limited
Note
a) Leasehold land represents amount paid to Maharashtra Industrial Development Corporation for land to be purchased on 95 years lease, for which compliance with certain conditions as
mentioned in the License Agreement and registration is pending as on date.
b) Current year depreciation includes additional depreciation of Rs. 6,942,289 on account of management reassessment of remaining estimated useful life of Leasehold Improvements and
Furniture & Fixtures.
27
3M India Limited
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 6:
INVESTMENTS (NON-TRADE UNQUOTED)
At Cost
Long Term
In Government Securities:
Indira Vikas Patra - 500
National Savings Certificate - 15,500
(Lodged with Government departments)
- 16,000
SCHEDULE 7:
INVENTORIES
(Lower of cost and net realisable value)
a) Stock in Trade
- Raw Materials 237,292,076 152,838,718
(including in-transit Rs.49,195,668 previous year Rs.20,753,228)
- Packing Materials 11,138,983 5,463,182
- Work-in-Progress 20,972,615 13,982,465
- Finished Goods 79,817,694 57,424,633
- Traded Goods 252,033,385 172,283,519
(including in-transit Rs. 73,793,501 previous year Rs.31,129,843)
b) Stores & Spares 289,631 173,053
601,544,384 402,165,570
SCHEDULE 8:
SUNDRY DEBTORS
(Secured)
Over six months: 3,712,091 2,530,181
Others 24,098,298 9,877,021
(Unsecured)
Over six months:
- considered good 5,734,301 1,043,357
- considered doubtful 70,046,986 64,276,486
Others
- considered good 466,335,916 283,347,460
569,927,592 361,074,505
Less: Provision for doubtful debts 70,046,986 64,276,486
499,880,606 296,798,019

3M India Limited
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 9:
CASH AND BANK BALANCES
a) Cash and Cheques on hand 19,402,424 10,097,488

b) With Scheduled Banks:
- Current Accounts 137,290,046 67,678,135
- Deposit Account * 605,000,000 540,000,000
- Margin Money Account ** 321,685 321,685
* Includes Rs 10,200,000 under lien 742,611,731 607,999,820
(Previous Year - Rs. 4,680,000)
** Held against guarantees issued
762,014,155 618,097,308
SCHEDULE 10:
LOANS AND ADVANCES
(Unsecured, considered good unless otherwise stated)

Advances recoverable in cash or in kind or for value 131,977,176 103,174,649
to be received (*)
Advance payment of Income Tax 20,488,206 3,401,646
[Net of provision Rs. 776,586,723 (Previous year :
Rs. 643,586,723)]
Deposits with Government departments and others 138,057,420 131,781,095
Balances with excise and customs authorities 55,886,905 28,011,334
346,409,707 266,368,724
Less: Provision for doubtful advances 8,171,285 8,171,285
338,238,422 258,197,439
* Includes doubtful advances of Rs. 8,171,285
(Previous year. - Rs. 8,171,285)

3M India Limited
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 11:
CURRENT LIABILITIES
AND PROVISIONS
a) Current Liabilities:
Sundry creditors for goods,
expenses and services
i) Total Outstanding dues of
small scale industrial
undertaking(s); and 2,931,260 2,293,362
{The above information has
been compiled to the extent
these could be identified as
small scale units on the basis
of the information available
with the Company
[Schedule 15 Note 12 (a)]}
ii) Total outstanding dues to
creditors other than small
scale industrial
undertaking(s) 614,084,981 617,016,241 412,456,624 414,749,986
Advance from customers/
distributors 51,788,588 41,535,524
Investor Education and
Protection fund - 864,456
Unclaimed debenture and
accrued interest thereof 2,509,324 2,509,324 3,239,186 4,103,642
Other Current Liabilities 39,164,496 39,025,630
710,478,649 499,414,782
b) Provisions:
Taxation (Fringe Benefit Tax) 15,003,456 -
Gratuity (Schedule 15, Note 13) 14,677,411 10,502,468
Leave Encashment 11,051,040 6,975,514
Sales Tax (Schedule 15, Note 18) 10,200,000 14,900,000
Other trade Payable
(Schedule 15, Note 18) 12,000,000 12,000,000
62,931,907 44,377,982
773,410,556 543,792,764

3M India Limited
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 12:
OTHER INCOME
Interest (Gross, tax deducted at source Rs.6,725,775, Previous year Rs.4,061,379) 30,141,040 21,867,959
Commission - 116,027
Profit on Sale of Assets 1,645,143 15,000
Foreign exchange gain - net - 2,879,039
31,786,183 24,878,025
SCHEDULE 13:
MANUFACTURING, ADMINISTRATIVE AND SELLING EXPENSES
Raw materials consumed 872,328,381 435,319,088

Stores, spares consumed and small tools written off 33,874,268 16,530,752
Packing materials consumed 49,670,885 33,335,984
Excise Duty 18,433,773 11,109,712
Power, fuel and water 28,542,287 20,387,938
Salaries, wages and bonus 340,903,378 253,000,411
Contribution to Provident and other funds 43,178,652 27,674,962
Provision for retiring gratuities (Schedule 15, Note 13) 4,174,943 4,531,904
Staff welfare expenses 68,778,561 40,253,110
Rent 52,010,751 39,670,369
Rates and taxes 17,778,657 9,494,116
Repairs
- Building 6,064,284 5,472,555
- Plant and machinery 8,086,282 5,150,253
- Others 6,974,197 5,599,129
Telephone, telex and postage 20,201,175 16,173,722
Travel and conveyance 80,740,928 63,468,909
Insurance 11,414,867 8,878,519
Legal and professional charges 8,810,578 7,254,544
Lease rentals (Schedule 15, Note 16) 33,365,573 23,398,359
Advertisement and sales promotion 139,171,661 102,403,729
Corporate Management Fees 72,592,873 44,364,262
Auditors Remuneration (Schedule 15, Note 5) 2,902,632 2,687,633
Interest to others 1,468,469 2,110,810
Bank charges 5,335,745 3,922,435
Directors’ sitting fees 660,000 525,000
Bad debts written off 7,934,145 56,934
Provision for doubtful debts 5,770,500 14,382,287
Commission on sales 22,982,879 9,164,429
Foreign exchange loss - net 1,100,701 -
Freight outward (net) 22,044,414 11,008,346
Miscellaneous expenses 75,379,025 60,894,101
2,062,675,464 1,278,224,302

3M India Limited
ended ended
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 14:
(INCREASE)/DECREASE IN INVENTORIES
Opening Stock
Work-in-progress 13,982,465 9,212,106
Finished goods 57,424,633 35,282,223
Traded goods 172,283,519 121,943,703
243,690,617 166,438,032
Less : Closing Stock
Work-in-progress 20,972,615 13,982,465
Finished goods 79,817,694 57,424,633
Traded goods 252,033,385 172,283,519
352,823,694 243,690,617
(Increase)/Decrease in Inventories (109,133,077) (77,252,585)

3M India Limited
SCHEDULE 15 : The costs are, in general, ascertained as under:

NOTES TO ACCOUNTS Raw Materials :
1 Statement On Significant Accounting Policies First in first out method based on actual cost
A Basis of preparation of accounts Traded goods :
The accounts have been prepared to comply in all First in first out method based on actual cost. Goods lying at
material aspects with Generally Accepted Accounting bonded warehouse are valued inclusive of customs duty.
Principles in India, the Accounting Standards issued by Stock in transit is valued excluding customs duty.
the Institute of Chartered Accountants of India and the Finished goods and Work in Progress :
relevant provisions of the Companies Act, 1956.
Material cost on weighted average method plus labour and
B Fixed assets appropriate overheads and wherever applicable, excise duty.
Fixed assets are stated at original cost less accumulated Provision for obsolescence is made wherever considered
depreciation. Cost includes invoice price and wherever necessary based on the age of the stocks.
applicable, freight, duties and taxes, related interest on
F Sundry Debtors and Loans & Advances
specific borrowings upto the date of acquisition /
installation and expenses incidental to acquisition and Sundry Debtors and Loans & Advances are stated after
installation. Operating Software is capitalised along with making adequate provision for doubtful balances.
fixed assets. Application softwares are amortised based
G Retirement / Post Retirement Benefits
on management estimation of useful life.
C Depreciation and amortisation The Gratuity liability is funded with the Life
Insurance Corporation of India. The charge to profit
Depreciation on fixed assets other than leasehold and loss account comprises of contribution to fund
improvements and Goodwill is provided on straight and estimated amount determined by the Company
line method at the following rates specified which are in accordance with the Payment of Gratuity Act, 1972.
equal to or higher than the principal rates specified in
Schedule XIV to the Companies Act, 1956: The Company makes contribution to the Superannuation
Scheme administered by the Life Insurance Corporation
Per Annum of India based on a specified percentage of eligible
employees salary. The Company’s obligation to the scheme
Building 3.34%
is restricted to the contributions to the scheme.
Plant and Machinery 10.00%
The Company makes monthly contribution as per the
Data Processing Equipments applicable statute for Provident Fund and charges off the
and Software 20.00% to 33.33% same to the profit and loss account.
Office Equipment 20.00% Provision is made for value of unutilised leave due to
Furniture & Fixtures 6.67% employees at the end of the year on the basis of actuarial
valuation.
Vehicles 6.67%
Leasehold improvements are amortised over the period H Revenue Recognition
of lease. [Schedule 5, Note (b)] Sales are recognised when goods are despatched
Goodwill purchased in earlier years is amortised over a in accordance with the terms of sale and are recorded
period of 5 years. Goodwill purchased subsequent to April net of sales returns, trade discount, rebates and sales tax
1, 2004 is evaluated based on impairment test annually. collected but includes excise duty, wherever applicable.
Interest and other income is accounted for on accrual
D Investments basis except items of non recurring nature which are
accounted when received.
Long-term investments are stated at cost. Decline in value
of long-term investments, other than temporary, is I Expenditure
provided for. Current investments are stated at lower of
cost or market value. Expenses are accounted for, on accrual basis and
provision is made for all known losses and liabilities.
E Inventories
Excise duty and customs duty are accrued on the
Inventories are valued at lower of cost and net realisable goods lying in the bonded warehouse at the year end.
value except in case of stores and spares which are
valued at cost. Revenue expenditure on Research and Development is

3M India Limited
NOTES TO ACCOUNTS
charged against the profit of the year in which it is incurred. L Taxation
Capital expenditure on research and development is shown
as an addition to fixed assets. Provision is made for income tax annually based on the tax
liability computed after considering tax allowances and
J Foreign Currency Translations exemptions.
Transactions arising in foreign currency during the year are Deferred tax is recognised on timing differences between the
converted at rates closely approximating those ruling at the accounting income and the taxable income for the year and
transaction date or at the forward contract rates as the case may quantified using the tax rates and laws enacted or substantively
be. The exchange differences arising out of the translation of the enacted as on the balance sheet date.
foreign currency liability incurred for acquisition of fixed assets
are adjusted to the cost of fixed assets. Current assets and Deferred tax assets are recognised and carried forward to
liabilities in foreign currency are converted at the year end the extent that there is a reasonable certainity that sufficient
exchange rates and the resultant loss or gain is dealt with in the future taxable income will be available against which such
profit and loss account. In case of forward contracts, the difference deferred tax assets can be realised.
between the forward rate and exchange rate on the date of M Provisions
transaction is recognised as income/expense over the life of the
contract. Provisions are recognised when the Company has a present
obligation as a result of past events, it is probable that an
K Operating Leases outflow of resources will be required to settle the obligation,
A lease is classified as an Operating Lease, if it does not and a reliable estimate of the amount can be made. Where the
transfer substantially all the risks and rewards incident to Company expects a provision to be reimbursed, the
ownership. Lease rentals are charged to Profit and Loss reimbursement is recognised as a separate asset but only
Account on accrual basis. when reimbursement is virtually certain.

3M India Limited
NOTES TO ACCOUNTS
ended ended
31.12.2005 31.12.2004
Rs. Rs.
2 Contingent Liabilities not provided for :
a) Guarantees:
- issued by Company’s Bankers 13,676,114 15,299,790
- issued by Company on behalf of others - 12,170,165
b) Letter of credit opened by banks for purchase of raw materials 4,349,832 2,020,579
c) Claims against the Company not acknowledged as debts:
- Customs Demands 3,119,000 3,119,000
- Excise duty matters - 24,098,782
- Pending Sales Tax matters 24,408,315 24,342,960
- Employees State Insurance claim 1,940,000 1,940,000
3 Capital expenditure commitments
(net of advances) 6,439,156 2,524,527
4 Quantitative Information in respect of goods manufactured and traded by the Company:

A. Particulars of Capacity and Production:
Licensed Installed Production
Class of Goods Unit Capacity Capacity *
Self Adhesive Labels Nos NA 40,000,000 32,591,382

(40,000,000) (28,015,522)
Epoxy Resin Kgs NA 2,300,000 1,344,313
(2,300,000) (79,104)
Paper & Paper Tapes Nos NA 15,000,000 12,421,107
(15,000,000) (11,085,849)
Paint Polishes Nos NA 1,000,000 974,940
(1,000,000) (36,532,666)
Abrasive Nos NA 50,000,000 47,032,204
(50,000,000) (36,532,666)
Note : Figures in brackets relate to the Previous year

* Installed capacity is as certified by the Management and relied upon by the Auditors without verification as this is a technical matter

3M India Limited
NOTES TO ACCOUNTS
B. Particulars of Opening and Closing Stock of Stocks in Trade *:
Class of Goods Unit Opening Stock Closing Stock

Quantity Value Quantity Value
Rs. Rs.
Manufactured
Self Adhesive Labels Nos 2,161,191 13,914,947 2,796,173 22,566,824
(1,214,421) (12,237,878) (2,161,191) (13,914,947)
Surgical & Dental Products Nos - - - -
- - - -
Epoxy Resin Kgs 42,815 6,149,535 41,224 5,969,042
- - (42,815) (6,149,535)
Paper & Paper Tapes Nos 727,993 6,271,481 1,663,565 20,468,269
(441,657) (6,290,597) (727,993) (6,271,481)
Paint Polishes Nos 90,536 3,746,701 123,643 3,730,535
(41,466) (1,871,037) (90,536) (3,746,701)
Abrasive Nos 3,792,276 12,785,824 5,678,377 22,555,796
(2,424,659) (8,765,257) (3,792,276) (12,785,824)
Others (individually less Nos - 14,556,145 - 4,527,228
than 10% of the total stock) - (6,117,454) - (14,556,145)
57,424,633 79,817,694
(35,282,223) (57,424,633)
Traded
Self Adhesive Labels Nos 13,738 32,395,831 8,266 48,068,852
(85,642) (26,338,096) (13,738) (32,395,831)
Surgical & Dental Products Nos 152,541 50,066,400 258,441 85,957,541
(132,508) (46,371,058) (152,541) (50,066,400)
Paint Polishes Nos 716,422 12,226,696 1,412,674 29,881,636
(1,632,173) (16,296,596) (716,422) (12,226,696)
Abrasive Nos 217,777 17,116,061 752,098 30,819,625
(606,950) (10,362,110) (217,777) (17,116,061)
Others (individually less Nos - 60,478,531 - 57,305,731
than 10% of the total stock) - (22,575,843) - (60,478,531)
172,283,519 252,033,385
(121,943,703) (172,283,519)
Note: Figures in brackets relate to the Previous year
* includes products which are non standard having various sizes and measurement

3M India Limited
NOTES TO ACCOUNTS
C. Particulars of Turnover* :
Class of Goods Unit Turnover

Quantity Value
Rs.
Self Adhesive Labels Nos 36,561,036 1,188,204,710

(27,446,030) (719,607,088)
Surgical & Dental Products Nos 1,246,746 511,242,076
(1,731,496) (409,916,144)
Epoxy Resin Kgs 1,345,904 207,533,284
(36,289) (4,997,076)
Paper & Paper Tapes Nos 11,485,535 256,479,764
(11,385,079) (220,813,794)
Paint Polishes Nos 12,183,498 291,913,305
(10,409,106) (220,610,849)
Abrasive Nos 50,373,632 641,923,128
(41,268,457) (500,860,878)
Others (individually less than 10% of the total Nos - 701,522,288
turnover) - (495,690,530)
3,798,818,555
(2,572,496,359)
D. Particulars of Purchase of Traded Goods* :
Class of Goods Unit Quantity Value

Rs.
Self Adhesive Labels Nos 4,599,164 213,527,807

(299,062) (163,419,334)
Surgcial & Dental Products Nos 1,352,646 282,428,414

(1,751,529) (241,710,587)
Paint Polishes Nos 11,937,917 146,531,212

(8,547,228) (124,077,539)
Abrasive Nos 5,761,850 148,336,234

(2,420,835) (92,223,999)
Others (individually less than 10% of total purchase traded goods) Nos - 413,102,910
- (311,758,312)
1,203,926,577
(933,189,771)
Note: Figures in brackets relate to the Previous year

* includes products which are non standard having various sizes and measurement

3M India Limited
NOTES TO ACCOUNTS
ended ended
31.12.2005 31.12.2004
Rs. Rs.
5 Auditors Remuneration (inclusive of service tax)

- Audit fees 1,559,330 1,559,330
- Certification and other services 1,294,850 1,088,570
- Reimbursement of expenses 48,452 39,733
6 Value of imports on C.I.F basis:
(excluding Goods in transit)
- Raw Materials 758,938,525 409,392,323
- Traded Goods 831,064,747 649,406,925
- Stores and Spares 677,062 736,936
- Capital Goods 11,943,446 80,004,774
7 Expenditure in Foreign Currency :
- Travelling Expenses 16,640,192 10,753,712
- Others (net of tax) 88,948,553 14,527,854
8 Raw Materials Consumed :
Class of Goods Unit Quantity Value Quantity Value

Rs Rs
Abrasive LY 5,845 8,209,906 3,277 3,351,792

Inks GL 20,390 25,758,949 13,925 13,583,656
Tapes LM 586,306 36,079,784 130,234 27,499,928
RL 807 5,490,189 671 5,883,303
Polishers GL 1,229 5,792,771 9,088 5,292,222
Coated Abrasive RL 3,134 9,337,783 2,429 54,589,247
Epoxy Kgs 840,246 100,679,712 51,214 4,722,951
Paper Sheets EA 4,726 7,877,713 2,893 5,363,590
Coaters GL 1,079 15,725,062 1,086 17,972,696
Kgs 10,311 8,202,244 5,292 4,337,714
Films LY 10,91,508 225,486,217 567,250 99,563,728
RL 12,876 50,429,884 6,941 22,275,126
Others (individually less than 10%
of the total raw materials consumed) 303,258,167 170,883,135
872,328,381 435,319,088

3M India Limited
NOTES TO ACCOUNTS
ended ended
31.12.2005 31.12.2004
Rs. Rs.
% Value % Value
9 Value of Imported and Indigenous
Raw Materials and Stores and Spares consumed :
(As certified by the Management)
Raw Materials
- Imported 92% 802,389,897 89% 385,712,879
- Indigenous 8% 69,938,484 11% 49,606,209
100% 872,328,381 100% 435,319,088
Stores & Spares
- Imported 3% 848,444 6% 1,004,531
- Indigenous 97% 33,025,824 94% 15,526,221
100% 33,874,268 100% 16,530,752
10 Earnings in Foreign Exchange :
- Export of goods calculated on FOB basis 64,589,514 3,466,216
- Freight and Insurance on exports 3,078,440 221,248
11 Research and Development Expenses : 1,560,630 1,339,859
12 a) The total outstanding dues to small scale industrial undertakings for more than 30 days as at December 31, 2005 is
Rs.1,680,531 (Previous year: Nil)
Adhesive Specialities
AF Industrial Stores
Allied System
Apeksha Tools
Armour Plast P Ltd
Asian Packaging
Bangalore Dry Ice and Gas Co
Cosmopack Industries
Image Labels P Ltd
Indus Spray
Mech Plast Industries
Pragati Printers
Superchem Industries
Note: The above is on the basis of information to the extent provided by the Suppliers to the Company, which has
been relied upon by the Auditors.
b) The Company has not made any provision for warranty considering that the Company can claim the warranty cost
from the original supplier.
c) The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce, while granting permission for
import of capital goods on concessional import duty under the Export Promotion Capital Goods (EPCG) Scheme,
has stipulated an export obligation aggregating to Rs. 193,675,663 for the Company, to be fulfilled over a period of
8 years. During the year ended December 31, 2005, the Company has fulfilled total export obligation amounting to
Rs. 130,012,950 (Previous Year: Nil) and cumulatively total export sales of Rs. 130,012,950 (Previous year : Nil)
13 The total future liability for retiring gratuity payable in accordance with Payment of Gratuity Act, 1972 is estimated by
the Company as on December 31, 2005 at Rs. 31,040,000 (Previous year: Rs. 21,313,000). Having regard to the amount
available with the Gratuity Fund administered by the Life Insurance Corporation of India and the balance amount of
Rs. 14,677,411 (Previous year: Rs. 10,502,468) has been fully provided.

3M India Limited
NOTES TO ACCOUNTS
ended ended
31.12.2005 31.12.2004
Rs. Rs.
14 a) Managerial Remuneration *
Salary and Allowances 12,653,482 10,850,484
Contribution to provident and other funds 439,314 360,024
Estimated value of benefits 3,279,001 2,986,338
16,371,797 14,196,846
b) Computation of profit in accordance with Section 198(1) read
with Section 309(5) of the Companies Act, 1956 for calculation
of Managerial Remuneration:
Profit before taxation (as per books) 605,829,464 410,411,988
Add : 1) Managerial Remuneration 16,371,797 14,196,846

2) Depreciation charged in the accounts 67,306,310 52,800,908
3) Provision for doubtful debts 5,770,500 14,382,287
4) Directors sitting fees 660,000 525,000
90,108,607 81,905,041
695,938,071 492,317,029
Less : Depreciation as per Section 350 of the Companies Act, 1956 67,306,310 52,800,908
Profit as per Section 198 of the Companies Act, 1956 628,631,761 439,516,121
10% of the above (Previous year: 10%) 62,863,176 43,951,612
Remuneration paid during the year 16,371,797 14,196,846
* Mr. Bert O’ Donoghue was appointed as Managing Director
on September 1, 2005 and the Company has applied for approval from
Central Government with respect to residential status as per
Part I (e) of Schedule XIII of The Companies Act, 1956 and the
approval is awaited. The above said appointment is subject to approval
from Shareholders in the ensuing Annual General Meeting.

3M India Limited
NOTES TO ACCOUNTS
15. Related Party Transactions
(A) Summary of the monetary value of the transactions with the related parties are as follows:
Holding Fellow Key

Company Subsidiary Management
[B(i)] Companies Personnel Total
[B(ii)] [C]
Rs. Rs. Rs. Rs.
I. Expenses:
Purchase of Materials 805,352,858 453,987,224 - 1,259,340,082
(561,583,441) (316,365,738) - (877,949,179)
Sales promotion expenses 396,481 141,532 - 538,013
(1,194,035) (652,238) - (1,846,273)
Remuneration to Directors - - 16,371,797 16,371,797
- - (14,196,846) (14,196,846)
Other Services - 72,740,050 - 72,740,050
- (44,364,262) - (44,364,262)
II. Income
Sale of Goods 49,830,450 17,314,206 - 67,144,656
- (6,984,964) - (6,984,964)
III. Purchase of Capital Goods - - - -
(67,464,858) - - (67,464,858)
IV. Balances
Advances Received 76,675,093 - - 76,675,093
(76,675,093) - - (76,675,093)
Outstanding Receivables 47,484,212 13,113,980 - 60,598,192
- (3,309,701) - (3,309,701)
Outstanding Payables 129,000,071 109,500,593 - 238,500,664
(70,511,073) (87,734,447) - (158,245,520)
Note: Figures in brackets represents Previous year.

3M India Limited
NOTES TO ACCOUNTS
(B) Names of related parties and description of the relationship:
(i). Parties where control exists
Holding Company 3M Company, St Paul, USA
(ii). Fellow Subsidiary Companies: 3M Singapore Pte Ltd

3M Australia Pty Ltd
3M Do Brazil Ltd
3M Belgium N.V.S.A.
3M China
3M Colombia
3M UK Plc-Bedford
3M France
3M Sante
3M Hongkong Ltd
3M Deutschland GmbH
3M Italia Spa
3M Indonesia Kbyt
3M Korea Ltd
3M Malayasia Sdn Berhad
3M Filterate B V
3M Ecc Europa B V
3M New Zealand Ltd
3M Spain
3M Philippines Inc
3M Thailand Ltd
Sumitomo 3M Ltd
3M Taiwan Ltd
3M Sweden
3M Argentina S.A.C.I.F.I.
3M Canada
3M South Africa
3M Lanka Pvt Ltd
3M Espe Dental Ag
Pouyet SA, 3M Telecommunications
3M Mexico SA De CV
3M Sanvetec
3M Sanayi De
3M Unitek
3M Ait Ltd
3M Gulf
3M Electro & Communication India Private Limited

3M India Limited
NOTES TO ACCOUNTS
(C) Key Management Personnel
Directors of the Company during the year Mr. Yashovardhan Birla
Mr. Bert O’ Donoghue
Mr. Thomas P. Spencer
Ms. Mary B. McCormick
Dr. Carlisle S. Boyce
Mr. B.S.Iyer
Mr. D. J. Balaji Rao
Mr. Amit Mukherjee
Mr. B.V. Shankaranarayana Rao
Mr. Lee M. Kennedy
Dr. Paul Rosso
Mr. Brad C. Sweet
Note:
i. None of the relatives of the Directors of the Company have any interest in any companies, firms, body corporate with
which transactions have been entered into during the year.
ii. The above information has been determined to the extent such parties have been identified on the basis of information
provided by the Company, which has been relied upon by the Auditors.
16 Assets taken on lease
Assets aggregating to Rs. 122,252,920 (Previous year: Rs.85,595,929) have been acquired on operating lease. The
Company has entered into operating lease arrangement for factory premises and amenities in respect of Corrosion
Protection Product Plant at Ahmedabad which have a non cancellable period of 5 years with a rent escalation of 15% per
annum and with a renewal option after the lease term. The agreements provide for premature termination by lessee,
after the non cancellable period through notice period of 6 months.
The obligation for future rentals in respect of such assets and factory premises under non cancellable operating leases
are as follows:
ended ended
31.12.2005 31.12.2004
Rs. Rs.
Minimum lease payments during the year charged to profit and loss account 33,365,573 23,398,359
Minimum lease payments not later than one year 28,692,459 21,188,823
Minimum lease payments later than one year but not later than five years 38,058,933 27,831,791
17 Taxation
a) The tax year for the Company being March 31, the provision for taxation for the year is the aggregate of the
provision made for the 3 months ending March 31, 2005 and the provision based on the figures for the remaining 9
months upto December 31, 2005. The ultimate tax liability will be determined on the basis of the figures for the
period April 1, 2005 to March 31, 2006.

3M India Limited
NOTES TO ACCOUNTS
b) Net Deferred Tax Asset/(Liability) as on December 31, 2005 amounting to Rs.12,486,997 [Previous year : Rs. (2,863,865)]
has been arrived at as follows:
ended ended
31.12.2005 31.12.2004
Rs. Rs.
i Deferred Tax Assets arising from:
Expenses charged in financial statement but allowable as deduction in
future years under the Income Tax Act, 1961 towards provision for
doubtful debts, gratuity, disallowance under Section 43B, leave wages, etc. 36,923,354 33,017,081
ii Deferred Tax Liabilities arising from:
Difference between carrying amount of fixed assets in the financial
statements and for Income Tax purpose (24,436,357) (35,880,946)
Net Deferred Tax Asset/(liability) taken to Balance Sheet 12,486,997 (2,863,865)
Net Deferred Tax(Credit)/Debit for the year (15,350,862) (8,444,775)
The tax impact for the above purpose has been arrived by applying a tax rate of 33.66% (Previous year : 36.5925%) being the prevailing tax
rate for Indian Companies under Income Tax Act, 1961.
18 In accordance with Accounting Standard -29 on Provisions, Contingent Liabilities and Contingent Assets, issued by the
Institute of Chartered Accountants of India, certain classes of liabilities have been identified as provision and accordingly
regrouped separately as under:
Sl No Particulars As at Additions Reversals As at

December 31, 2004 December 31, 2005
1 Sales Tax 14,900,000 - 4,700,000 10,200,000

2 Other Trade Payables 12,000,000 - - 12,000,000
26,900,000 - 4,700,000 22,200,000
The Company sets up and maintains provisions for other trade payables when a reasonable estimate can be made. These
provisions are made based on estimates made by the Management that are reviewed periodically and involve quick settlements not
exceeding a period of two-three years in most cases.
19 Earnings Per Share (EPS)

ended ended
31.12.2005 31.12.2004
Profit after Taxation 384,176,870 255,356,763

Basic/Weighted average number of Equity Shares of Rs 10 each 11,265,070 11,265,070
Basic and Diluted Earnings Per Share 34.10 22.67

3M India Limited
NOTES TO ACCOUNTS
For the year ended For the year ended
31.12.2005 31.12.2004
Rs Rs
20 Segment Report :
Segment Revenue (Net Sale / Income)
a Industrial Markets 645,668,408 478,180,349
b Automotive and Specialty Materials Markets 1,352,357,766 831,648,971
c Health Care Markets 550,106,610 443,745,779
d Traffic and Safety Markets 680,662,184 438,642,841
e Consumer and Office, Construction Markets 502,883,587 373,293,455
f Others * 67,140,000 6,984,964
Total Segment Revenue 3,798,818,555 2,572,496,359
Less: Inter segment revenue - -
Net Sales / Income from Operations 3,798,818,555 2,572,496,359
Segment Results (Profit before interest and tax)
b Automotive and Specialty Materials Markets 174,133,156 119,598,366
f Others 10,195,000 (1,924,669)
Total Segment Results 575,511,748 387,644,773
Less: Interest expense 1,468,469 2,110,810
Add: Other un-allocable income net off unallocable expenditure 31,786,185 24,878,025
Total Profit Before Taxation 605,829,464 410,411,988
Capital Employed (Segment Assets-Segment Liabilities)
b Automotive and Specialty Materials Markets 583,905,751 474,937,845
f Others - 1,370,856
Total Capital Employed in Segments 1,079,120,575 904,402,206
Add: Unallocable corporate assets less corporate liabilities 654,944,935 445,486,434
Total Capital Employed by the Company 1,734,065,510 1,349,888,640
* includes;
Domestic Sales/ Income 2,550,486 3,297,500
Export Sales 64,589,514 3,687,464
Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisation
structure as well as the differential risks and returns of these segments.
Segment revenue, results and capital employed figures include the respective amounts identifiable to each of the segments and also
amounts allocated on a reasonable basis. Other unallocable expenditure includes expenses incurred on common services provided to
the segments which are not directly identifiable to the individual segments as well as expenses incurred at a corporate level which relate
to the Company as a whole.
The Company operates mainly to the needs of domestic market and export turnover is not significant in context of total turnover.
Accordingly, there are no reportable geographical segments.
21 The Company has changed its name from Birla 3M Limited to 3M India Limited with effect from December 18, 2002 and
has obtained a fresh certificate of incorporation for the changed name from Registrar of Companies.
22 Previous year’s figures have been regrouped / reclassified wherever necessary to conform to current year classification.
FOR AND ON BEHALF OF THE BOARD
Place : Bangalore Bert O’ Donoghue B. V. Shankaranarayana Rao K. Ramesh Chandra

Date : February 20, 2006 Managing Director Director Company Secretary

3M India Limited
CASH FLOW STATEMENT FOR THE PERIOD ENDED DECEMBER 31, 2005
For the year ended For the year ended
31.12.2005 31.12.2004
Rs. Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Profit Before Taxation 605,829,464 410,411,988
Adjusted for
Depreciation 67,306,310 52,800,908
Provision for doubtful debts 5,770,500 14,382,287
Foreign Exchange Loss/(Gain) 238,858 (494,725)
(Profit) / Loss on sale of Fixed Assets - Net (1,645,143) (15,000)
Investments 16,000 -
Interest received (30,141,040) (21,867,959)
Interest paid 1,468,469 2,110,810
Operating Profit Before Working Capital Changes 648,843,419 457,328,308
Adjusted for
(Increase)/ Decrease in Inventories (199,378,814) (162,435,442)
(Increase)/ Decrease in Debtors (208,853,087) (20,183,411)
(Increase)/ Decrease in Loans and Advances (60,494,248) (27,413,425)
Increase/ (Decrease) in Current Liabilities and Provisions 214,375,477 141,813,442
Cash Generated From Operations 394,492,747 389,109,472
Interest Paid (1,468,469) (2,110,810)
Direct Taxes paid (239,086,560) (174,205,925)
Interest Received 27,680,865 18,799,377
NET CASH FLOW FROM OPERATING ACTIVITIES 181,618,583 231,592,115
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (39,346,879) (113,057,033)
Sale of Fixed Assets 1,645,143 15,000
NET CASH USED IN INVESTING ACTIVITIES (37,701,736) (113,042,033)
CASH FLOW FROM FINANCING ACTIVITIES - -
NET CASH USED IN FINANCING ACTIVITIES
NET (DECREASE) /INCREASE IN CASH AND CASH EQUIVALENTS 143,916,847 118,550,082
CASH AND CASH EQUIVALENTS
Opening Balance
Cash and Cheques on hand 10,097,488 14,352,024
With Scheduled Bank
- in Current Accounts 67,678,135 44,600,451
- in Deposit Account 540,000,000 440,000,000
- in Margin Money Account 321,685 594,751
TOTAL 618,097,308 499,547,226
Closing Balance
Cash and Cheques on hand 19,402,424 10,097,488
With Scheduled Bank
- in Current Accounts (Net of effects of exchange rate differences) 137,290,046 67,678,135
- in Deposit Account 605,000,000 540,000,000
- in Margin Money Account 321,685 321,685
TOTAL 762,014,155 618,097,308
Notes: 1 Figures in brackets represents outflow.
2 The Cash Flow Statement has been prepared in accordance with the requirement of Accounting Standard 3
“Cash Flow Statement” issued by Institute of Chartered Accountants of India.
3 Previous year’s figures have been regrouped wherever necessary.
This is the Cash Flow Statement referred to in our For and on behalf of the Board
report of even date
Lovelock & Lewes
Place : Bangalore

3M India Limited
Information pursuant to Part IV of Schedule VI to the Companies Act, 1956
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. Registration Details
Registration No. 13543 State Code 08
Balance Sheet Date 31 12 2005
Date Month Year
II. Capital raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
NIL NIL
Bonus Issue Private Placement
NIL NIL
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities 1734066 Total Assets * 1734066
Sources of Funds
Paid-up Capital 112651 Reserves & Surplus 1621415
Secured Loans 0 Unsecured Loans 0

Application of Funds
Net Fixed Assets ** 293312 Investments 0
Net Current Assets 1428267
Net Deffered Tax Assets 12487
* Net of current liabilities and provisions
** Includes capital work-in-progress
IV. Performance of Company (Amount in Rs. Thousands)

Turnover 3830605 Total Expenditure 3224775
Profit / (Loss) Before Tax 605829 Profit / (Loss) After Tax 384177
Earning per Share (in Rs.) 34.10 Dividend Rate (%) 0
V. Generic Names of Three Principal Products / Services of Company(as per monetary terms)
Item Code. No. (ITC Code) 68052090
Product Description COATED ABRASIVES
Product Description MASKING TAPES

Product Description PRESSURE SENSITIVE TAPES
Signature to Schedules 1 to 15
FOR AND ON BEHALF OF THE BOARD
Place : Bangalore Bert O’ Donoghue B. V. Shankaranarayana Rao K. Ramesh Chandra

Date : February 20, 2006 Managing Director Director Company Secretary

3M India AR 2005

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3M India Limited

(formerly Birla 3M Limited)

ALTERNATE DIRECTOR Mr. Brad C. Sweet Alternate to Mr. Thomas P. Spencer

COMPANY SECRETARY Mr. K. Ramesh Chandra

AUDIT COMMITTEE Mr. B.S. Iyer Chairman

SHAREHOLDERS’ Mr. D.J. Balaji Rao Chairman

BANKERS Bank of America

AUDITORS M/s. Lovelock & Lewes, Chartered Accountants

LEGAL ADVISORS J. Sagar Associates

SHARE TRANSFER AGENTS Karvy Computershare Pvt. Ltd.

INVESTORS QUERIES 3mindia.investorhelpdesk@mmm.com

innovate, grow, deliver 1

2 innovate, grow, deliver

S Provide investors an attractive

S Respect our social and physical

S Indirect Cost Control

innovate, grow, deliver 3

MESSAGE FROM THE CHAIRMAN

4 innovate, grow, deliver

MESSAGE FROM THE MANAGING DIRECTOR

REPORT OF THE DIRECTORS

6 innovate, grow, deliver

2. Technology Absorption and Research & Development

1. Specific areas in which Research & • Consumer Markets – Wipes

3. Future plan of action Support product application development and localise

4. Expenditure on Research & Development (Rs.in Lakhs)

On behalf of the Board of Directors

Place : Bangalore Bert O’Donoghue B.V. Shankaranarayana Rao

innovate, grow, deliver 7

c) Segment-wise or product-wise performance

8 innovate, grow, deliver

AUTOMOTIVE & SPECIALTY MATERIALS MARKETS

HEALTH CARE MARKETS

Financial Highlights for the year Segment Revenue 5,501.07 4,437.46

innovate, grow, deliver 9

TRAFFIC AND SAFETY MARKETS

CONSUMER & OFFICE MARKETS, CONSTRUCTION MARKETS

Financial Highlights for the year Segment Revenue 5,028.84 3,732.92

Financial Highlights for the year Segment Revenue 671.40 69.86

10 innovate, grow, deliver

d) Outlook g) Developments in Human Resources / Industrial

innovate, grow, deliver 11

REPORT ON CORPORATE GOVERNANCE

Mr. Yashovardhan Birla (a) Non-Executive 6 2 ( 1 as Chairman) -

12 innovate, grow, deliver

BOARD MEETINGS & AGM

BOARD COMMITTEES - Matters required to be included in the Director’s

innovate, grow, deliver 13

• Internal audit reports relating to internal control b) Remuneration to Directors :

14 innovate, grow, deliver

Term : The contract of service of Mr. B. V. Shankaranarayana Rao is

Details of remuneration paid to Executive Directors during the year 2005:

innovate, grow, deliver 15

SPECIFIC DISCLOSURE Compliance Officer. Information / declaration as required under

16 innovate, grow, deliver

No. of the Complaints relating to Non- Date of passing Subject matter

General Shareholder information :

April 24, 2006

* applied for voluntary delisting. Final Certificate of delisting is yet to be received.

innovate, grow, deliver 17

Stock Price Data :

High Low High Low

Crisil Index : Not applicable

Registrar & Share Transfer Agents :