To the Members of 3M India Limited
Your Directors have pleasure in presenting the Thirtieth (30th) Annual Report of theCompany together with the Audited Financial Statements for the Financial Year ended March31 2017.
Indian Accounting Standards (Ind AS):
The Company's Financial Statements for the year ended March 31 2017 are prepared inaccordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules2015. The adoption of Ind AS was carried out in accordance with Ind AS 101 using April 12015 as the transition date. Ind AS 101 requires that all Ind AS standards andinterpretations that are effective for the interim Ind AS consolidated financialstatements for the year ended March 31 2017 be applied consistently and retrospectivelyfor all fiscal years presented. All applicable Ind AS have been applied consistently andretrospectively wherever required. The resulting difference between the carrying amountsof the assets and liabilities in the consolidated financial statements under both Ind ASand Indian GAAP as of the transition date have been recognized directly in equity at thetransition date. Following are the working results as per Ind AS:
(Rs. in Lakhs)
|Particulars ||Year ended March 312017 ||Year ended March 312016 ||%age |
| ||(Audited) ||(Audited) ||Decrease(-) |
|Revenue from Operations ||245784.93 ||222375.81 ||+10.53% |
|Of which - Export Sales ||2863.03 ||4715.80 ||-39.29% |
|Other Income net ||4946.63 ||1783.31 ||+177.38% |
|Total Income ||250731.56 ||224159.12 ||+11.85% |
|Less: Expenditure ||208907.67 ||188731.21 ||+10.69% |
|Profit before Interest and Depreciation ||41823.89 ||35427.91 ||+18.05% |
|Less: Finance costs ||227.19 ||224.86 ||+1.04% |
|Less: Depreciation and amortization expense ||4674.74 ||4892.83 ||-4.46% |
|Profit before Taxation ||36921.96 ||30310.21 ||+21.81% |
|Less: Tax expense ||12846.22 ||10834.05 ||+18.57% |
|Profit for the year ||24075.74 ||19476.16 ||+23.62% |
|Items that will not be re-classified subsequently to profit or loss ||(244.23) ||(59.59) ||+309.85% |
|Total Comprehensive income for the year ||23831.51 ||19416.57 ||+22.74% |
The Board of Directors approved the Dividend Distribution Policy on February 9 2017 interms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. ThePolicy is uploaded http://solutions.3mindia.co.in/wps/portal/3M/en_IN/about-3M/information/corporate/financial-facts/summary/ and the same is also annexed herewith as "AnnexureL".
A healthy cash position in a high interest economy is seen as prudent and necessary tofund growth. The Company remains bullish on investments and growth expectations in Indiaand anticipates substantial manpower CAPEX and promotional investments required tosupport growth aspirations. The Company is focused on its growth plan with a long termobjective and is in the process of implementing a number of initiatives and projects. As aresult it has been decided to conserve and retain the earnings and therefore notpropose dividend or transfer any amounts to reserves.
Transfer of dividend to the Investor Education and Protection Fund if any: NA
TRANSFER TO RESERVES
As it has been decided to conserve and retain the earnings and therefore your Boarddoes not propose to transfer any amounts to reserves.
STATE OF COMPANY'S AFFAIRS
Your Company maintained a strong and consistent performance both topline and bottomline in the FY 2016-17 while mitigating the impact in the marketplace from the recentdemonetization drive. Your Company continued to focus on improving productivity whiledriving growth and competitive share. The main theme of our performance in this financialyear was strengthening the agility in our business whether it was within our processes inthe way we responded to our customers or in the way we pursued emerging growthopportunities. Business agility was reflected across our key initiatives which contributedto our growth and performance in this financial year.
> Stepping up our play in nation-building initiatives: We aligned with manyof the national initiatives around development of infrastructure such as urbandevelopment airports roadways mass rapid transportation railways municipalcorporations and defence.
> Market & Segment Growth: We gained from strong performances in keygrowth market segments such as automotive & automotive aftermarket safety healthcareand small & medium enterprises reflecting positive market trends.
> Leveraging our diverse portfolio with customer-facing models: We developednewer business models driven by larger play in industrial healthcare and consumer marketswhile expanding our consumer base through ecommerce.
> Managing our health of business and cash flow: We brought in razor sharpfocus on driving our performance around key enterprise critical parameters (profitabilitysales productivity and cash flow) aligned with the priorities of our Corporation's drivetowards efficient growth.
> Entering new geographies to expand our relevance: We expanded our presenceand reach into Eastern and North Eastern States with focused business execution plans fordeeper penetration.
Building a growth mindset was integral to executing the above five steps while keepingour employees engaged and energized. This guided us to go after bigger bolder and smarteropportunities in India.
The Company registered an overall turnover growth of 10.53% at Rs. 245784.93 Lakhsfor the financial year ended March 31 2017 compared to Rs. 222375.81 Lakhs in theprevious year. The Profit before Interest and Depreciation was at Rs. 41823.89 Lakhscompared to Rs. 35427.91 for the previous year. Profit before Tax was at Rs. 36921.96Lakhs compared to Rs. 30310.21 Lakhs for the last year. The operating margin for thecurrent year was at 16.68% compared to 15.80% for the previous year. Total ComprehensiveIncome was at Rs. 23831.51 Lakhs compared to Rs. 19416.57 Lakhs for the previous year.Portfolio prioritization operational productivity and lower material costs increased theprofitability at all levels for the year under review. Export Sales was at Rs.2863.03Lakhs for the year ended March 31 2017 compared to Rs. 4715.80 Lakhs in the previousyear a decrease of 39.29% due to weakness in global oil and gas scenario which lead toproject delays.
The Industrial business grew by 9.91%; Health Care business grew by 15.37%: Safety andGraphics business grew by 14.46%; Consumer business grew by 10.56% and Energy businessgrew by 4.68%.
The EPS (Basic and Diluted) of the Company for the year 2016-17 was Rs. 213.72 pershare as compared to Rs. 172.89 per share in the previous year a growth of 23.62%.Detailed analysis of the performance has been discussed in the Management's Discussion andAnalysis Section of the Annual Report.
The Government of India has announced the introduction of GST in the country mostlikely with effect from July 1 2017. The Company has taken necessary steps to ensuresmooth transition to GST regime. The Company has internally formed GST core committee& various sub committees representing all the stakeholders in this tax reform. The GSTimplementation preparedness actions are initiated and monitored on regular intervals. YourCompany is taking all the efforts to ensure smooth migration into GST regime with nobusiness interruptions.
CONTRIBUTION TO EXCHEQUER:
During the financial year 2016-17 the Company through its business contributed tovarious taxes viz. VAT TDS Sales Tax State Excise Excise CENVAT and Customs close toRs. 50222 Lakhs in aggregate.
Capital Investments during the year 2016-17 were at Rs. 1386.61 Lakhs (Net of capitalwork-in-progress and capital advances) (2015-16: Rs. 1060.38 Lakhs).
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and/or commitments affecting the financial positionof the Company since the close of the financial year and till the date of this report.
CHANGE IN THE NATURE OF BUSINESS
There were no changes in the nature of business during the year under review .
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report is annexed herewith as "AnnexureA".
CORPORATE GOVERNANCE AND SHAREHOLDER INFORMATION
A separate Report on Corporate Governance in terms of Regulation 34 of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred as "Listing Regulations") along with Certificate fromPractising Company Secretary regarding compliance to the Conditions stipulated underChapter IV of the Listing Regulations is annexed as "Annexure B".
BUSINESS RESPONSIBILITY REPORT
A separate Section on Business Responsibility is annexed as "Annexure C"and forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 .
EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS
The Company has only one class of share i.e. equity share with a face value of Rs.10/- each. The Authorized/Issued/Subscribed and fully paid-up Capital as at March 31 2017was Rs. 112650700 (divided into 11265070 equity shares of Rs. 10/- each).
During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.
LISTING WITH STOCK EXCHANGES
The Company has paid the Annual Listing Fees for the year 2017-2018 to National StockExchange of India Limited (NSE) and BSE Limited (BSE) where the Company's equity sharesare listed.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
At the Meeting of the Board held on February 9 2017 based on the recommendation ofthe Nomination and Remuneration Committee Mr. B.V. Shankaranarayana Rao(DIN: 00044840)has been re-appointed for a further period from April 1 2017 to May 13 2020 (till thedate of his superannuation's Whole-time Director of the Company. The details of Mr. Raoare exhibited in the Explanatory Statement to the Notice of the Annual General Meeting.The Board of Directors recommends his re-appointment.
Mr. Manuel B Pardo(DIN: 07125832) resigned as Director of the Company with effect fromMay 26 2017 due to his appointment as Director -International Finance for IndustrialBusiness in St. Paul USA. The Board expresses its appreciation of the contributions madeby Mr. Pardo during his tenure as Director of the Company.
The Board at their meeting held on May 26 2017 appointed Mr. Jong Ho Lee (DIN:06720950) as Additional Director of the Company categorized as Non-Executive Directorfrom May 26 2017. The details of Mr. Jong Ho Lee are furnished in the ExplanatoryStatement to the Notice of the Annual General Meeting pursuant to Section 102 of theCompanies Act 2013. The Board recommends his appointment.
Mr. Amit Laroya(DIN: 00098933) Non-Executive Non-Independent Director will retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. The details of Mr. Laroya are exhibited in the Explanatory Statement tothe Notice of the Annual General Meeting. The Board of Directors recommends hisre-appointment.
As at the financial year ended March 31 2017 Ms. Debarati Sen Managing Director Mr.B.V. Shankaranarayana Rao Whole-time Director Mr. Panagiotis Goulakos (Panos) ChiefFinancial Officer and Mr. V. Srinivasan Company Secretary and Compliance Officer are theKey Managerial Personnel of the Company.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Directors of theCompany under Section 149(7) of the Companies Act 2013 that they meet the criteria oftheir Independence laid down in Section 149(6) of the Companies Act 2013 read withListing Regulations. The same is annexed herewith as "Annexure D".
DETAILS OF BOARD AND COMMITTEE MEETINGS DURING THE YEAR
During the financial year ended March 31 2017 four (4) Meetings of the Board wereheld. The date and number of Meetings attended by each Director / Committee Member alongwith other Committee Meetings details are given in the Corporate Governance Report.
COMPOSITION OF AUDIT COMMITTEE
As at the financial year ending March 31 2017 the Audit Committee of the Companyconsisted of three (3) Non-Executive Independent Directors and one (1) Non-ExecutiveDirector and all of them have financial and accounting knowledge. The members of theCommittee are Mr. Biren Gabhawala (Chairman) Mr. Bharat Shah Ms. Radhika Rajan (from May27 2016) and Mr. Manuel B Pardo. The Board has accepted all the recommendations of theAudit Committee during the year under review.
Mr. Jongho Lee has been appointed as a member of the Audit Committee in place of Mr.Manuel B Pardo with effect from May 26 2017.
NOMINATION AND REMUNERATION COMMITTEE POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and forother employees and their remuneration. The same has been disclosed in the website athttp://solutions.3mindia.co.in/wps/portal/3M/en_IN/about-3M/information/corporate/financial-facts/summary/.The composition criteria for selection of Directors and the terms of reference of theNomination and Remuneration Committee is stated in the Corporate Governance Report.
ANNUAL BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 Listing Regulations and as perthe Guidance Note issued by SEBI in January 2017 the Board has carried out an annualperformance evaluation of its own performance its Committee and the Directorsindividually. The manner in which the evaluation has been carried out has been explainedin the Corporate Governance Report.
DETAILS OF REMUNERATION OF DIRECTORS
Disclosure pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed herewith as "Annexure E".
REMUNERATION RECEIVED BY MANAGING / WHOLE TIME DIRECTOR FROM HOLDING OR SUBSIDIARYCOMPANY
During the year under review no Commission or Remuneration was paid to the ExecutiveDirectors from Holding / Subsidiary Companies.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013:
(a) that in the preparation of the annual financial statements for the Financial Yearended March 31 2017 the applicable accounting standards have been followed along withproper explanation relating to material departures if any;
(b) that such accounting policies as mentioned in Notes to the Financial Statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2017 and of the profit of the Company for the year ended onthat date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and operating effectively;
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
3M globally is aligned to Company's internal control over financial reporting based onthe framework established by the Committee of Sponsoring Organizations of the TreadwayCommission(COSO) in Internal Control Integrated Framework (2013). The internalcontrol framework essentially has two elements viz. (1) structures policies andguidelines designed to achieve efficiency and effectiveness in operations and compliancewith laws and regulations and (2) an assurance function provided by Internal Audit.
The Directors had laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthorized useor losses executing transactions with proper authorization and ensuring compliance ofcorporate policies.
The Company through its own Corporate Internal Audit Department carries out periodicaudits to cover all the offices factories and key areas of business segments based on theplan approved by the Audit Committee and bring out any deviation to internal controlprocedures. The observations arising out of audit are periodically reviewed and complianceensured. The summary of the Internal Audit observations and status of the implementationis submitted to the Audit Committee of the Board of Directors. The status ofimplementation of the recommendations is reviewed by the Committee on a regular basis andconcerns if any are reported to the Board.
DISCLOSURE REGARDING FRAUDS
During the year under review there were no frauds reported by the Auditor to the AuditCommittee or to the Board.
INFORMATION ON THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES /ASSOCIATES/ JOINT VENTURE
The Company does not have any Subsidiaries/Associates/Joint Venture.
During the year under review the Company has neither accepted nor renewed any depositsfrom public within the meaning of Section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any Loan provided anyguarantees or made any Investments covered under Section 186 of the Companies Act 2013.
RELATED PARTY TRANSACTIONS (RPTs)
All Related Party Transactions (RPTs) that were entered into during the financial yearwere on an arm's length basis and were in the ordinary course of business. All RPTs areplaced before the Audit Committee for approval. Prior omnibus approval of the AuditCommittee is obtained on a yearly basis for the transactions which are foreseeable andrepetitive in nature. A statement giving details of all actual RPTs versus the approval isplaced before the Audit Committee for approval on a quarterly basis. The policy on RPTs asapproved by the Board is uploaded on the Company's website at http://solutions.3mindia.co.in/wps/portal/3M/en_IN/about-3M/information/corporate/financial-facts/summary/.
The Company being a part of 3M conglomerate has rights to carry out the businesswithin India and accordingly has access to Group's synergies state of the art productsand technologies competencies and "3M" brand name which are very critical andessential to carry out its business operations more efficiently in an increasinglyglobalized and competitive scenario. As a part of its regular business the Companypurchases avails/renders services from/to 3M Company USA and / or its group companies atarm's length basis.
As per the provisions of the Companies Act 2013 and Listing Regulations all RPTsrequire approval of the members by an ordinary resolution. Based on past trend thetransactions are likely to exceed 10% of the annual turnover of the Company as per thelast Audited Financial Statements of the Company and may exceed the materiality thresholdas prescribed under the provisions of Listing Regulations. Thus in terms of ListingRegulations these transactions would require approval of the members.
The RPTs are necessary normal to business play a significant role in the Company'sbusiness operations and also form integral part of the Company's business. An analysis ofall the RPTs entered into / by the Company and the basis of charge was undertaken througha
third party professional firm. Accordingly the Board recommends for the approval ofthe members in terms of the provisions of Listing Regulations.
The Company proposes to seek the approval of the Shareholders for all material RPTs forthe estimated/proposed transactions for three financial years from April 1 2017 to March31 2020 and for the excess of the limits approved by the shareholders at the AnnualGeneral Meeting held on 5th August 2016 of the transactions for the financial year2016-17.The excess value of the RPTs are in the ordinary and normal course of business andon Arms' Length basis and accordingly the Board recommends the Ordinary Resolution setforth in the Notice for the ratification / approval of the Members. Form No. AOC-2pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule 8(2) of TheCompanies (Accounts) Rules 2014 is annexed herewith as "Annexure F".
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under Corporate Social Responsibility (CSR) the Company hasundertaken projects in the areas of Education Social Innovation Women Empowerment andSustainability. These projects are in accordance with Schedule VII to the Companies Act2013.
Education: The Company worked with NGO partners to inculcate the spiritof inquiry and innovative thinking among underprivileged children. Your Company works withthe Agastya Foundation on the Mobile Science Lab initiative which helps disseminatescientific practical knowledge to 100 Government schools in 2 states in India (Karnatakaand Maharashtra) sparking curiosity among 20000+ children.
Social Innovation: As a way to contribute to the innovation eco-system inthe country the Company supports young innovators in the age group of 18 to 30 years withan Incubation Fund and Awards Program jointly with the Confederation of Indian Industries(CII). The program identifies unique innovations that can help solve social challenges inIndia. The award winners are offered grants by the Company to pursue their projects anddevelop prototypes for further development.
Women Empowerment: The Company's vision is to help develop leadershipskills to empower underprivileged women though entrepreneurship and local governance. TheCompany works with two reputed NGOs in Bangalore to deliver a skills development programwhich is equipping more than 150 young women with the necessary skills to make thememployable.
Sustainability: In line with the overall objective of 3M India's CSRinitiative which is to engage in outcome-based corporate social responsibility programsthat will impact and enrich the communities around the Company's areas of operation andto implement the parent Corporation 3M Company's global sustainable strategy 3M Indiawill support self -sustaining models to address the environmental & socialsustainability needs of local communities.
The Annual Report on CSR activities is annexed herewith as "Annexure G"including the reasons for not spending the full amount for the year 2016-17.
DETAILS OF REMUNERATION OF EMPLOYEES
Pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(2) & (3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014statement showing details of top ten employees in terms of remuneration drawn during theyear and other employees of the Company employed throughout the year and employeesemployed for part of the year who were in receipt of remuneration of Rs. 1.02 Crores ormore per annum and Rs. 80 Lakhs or more per month respectively is annexed herewith as "AnnexureH."
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8(3) of The Companies (Accounts) Rules 2014 is annexed as "AnnexureI".
RISK MANAGEMENT POLICY
The Company has a Risk Management Policy pursuant to the requirements of ListingRegulations. The details of Committee and its terms of reference are set out in theCorporate Governance Report forming part of the Board's Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed during the year by the Regulators/ Courts which would impact the going concern status of the Company and its futureoperations.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has an effective vigil mechanism by way of Business Conduct ConcernReporting Policy (Whistleblower Policy) for upholding 3M's Code of Conduct. The details ofthe said Policy are stated in the Corporate Governance Report and also available on thewebsite of the Companyhttp://solutions.3mindia.co.in/wps/portal/3M/en_IN/about-3M/information/corporate/financial-facts/summary/.
Messrs. BSR & Co. LLP Chartered Accountants Bengaluru (ICAI Firm Registration No.101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold officefor a period of five (5) years from the conclusion of the 29th Annual General Meetingsubject to ratification of the appointment by the members at every subsequent AnnualGeneral Meeting. The Company is in receipt of a confirmation from the Auditors thatinter-alia they are not disqualified for appointment under Section 141 and otherprovisions of the Act Chartered Accountants Act 1949 or the Rules and Regulations madethereunder. Accordingly proposal for ratification of appointment of Statutory Auditorshas been included in the Notice convening the Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedMr. Vijayakrishna K.T Company Secretary in Practice to undertake the Secretarial Audit ofthe Company for the financial year 2016-17. The Report of the Secretarial Audit Report isannexed herewith as "Annexure J".
EXPLANATIONS IN RESPONSE TO AUDITORS' QUALIFICATIONS
During the year under review there were no qualifications reservations or adverseremarks made by the Statutory Auditor / Secretarial Auditor in their respective Reports.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS-2) Secretarial Standards issued by The Institute of Company Secretaries ofIndia (ICSI).
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure K".
DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
1. Number of complaints of sexual harassment received in the year(April 1 2016 tomarch 31 2017): 1
2. Number of complaints disposed off during the year: 1
3. Number of cases pending for more than 90 days: Nil
4. Number of workshops or awareness programmes carried out in connection with sexualharassment:
Three (3) in addition online modules are being assigned to new joinees.
5. Remedial measures taken by the Company: Respondent left the Company afterinvestigation counselling was done for both the parties.
During the year the Company took many initiatives to increase organizationalcapability and productivity so as to be value driven and future-ready. As at March 312017 the Company had employee strength of 1373 personnel.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the cost audit records maintained by the Company inrespect of the products covered under the said rules are required to be audited by a CostAccountant. Accordingly the Board of Directors of the Company at its meeting held on May26 2017 on the recommendation of the Audit Committee approved re-appointment of Messrs.Rao Murthy & Associates Cost Accountants Bengaluru (holding Registration No.000065) to conduct the audit of the cost records of the Company for the financial yearended March 31 2018 on an remuneration of Rs. 430000/- plus taxes as applicable and outof pocket expenses at actuals. The Audit Committee has also received a certificate fromthe Cost Auditor certifying their independence and arm's length relationship with theCompany.
As required under the Companies Act 2013 the remuneration payable to the Cost Auditoris required to be placed before the Members in a General Meeting for their ratification.Accordingly a resolution seeking ratification of the remuneration payable to Messrs. RaoMurthy & Associates Cost Accountants Bengaluru is included in the Notice conveningthe Annual General Meeting.
Disclosure on Cost Audit: For the financial year ending March 31 2016 the duedate of filing the Cost Audit Report submitted by Messrs. Rao Murthy & AssociatesCost Accountants Bengaluru was September 27 2016 and the same was filed with theMinistry of Corporate Affairs on August 31 2016 vide SRN G10337053.
During the year under review the Company:
a. has not bought its own shares nor has given any loan to the employees (includingKMPs) of the Company for purchase of the Company shares and
b. has not issued any shares to trustees for benefit of employees.
ENVIRONMENT HEALTH AND SAFETY
Compliance with relevant regulations and 3M Global Environmental Health and Safetypolicies is an integral part of the Company's operating philosophy and the Company standscommitted to continually improve on these objectives. There was a considerable focus onimproving Environment Health and Safety during the period under review by the Company.
Environment: The Company has three (3) Manufacturing Plants in operation in India.All three (3) plants have Environmental Management Systems certified to ISO 14001: 2004.The Company is presently pursuing the implementation of new ISO 14001: 2015 standards. Allplants have sewage / waste water treatment plants and the treated water is recycled forhorticulture with in the facilities. The plants have set up various measures to reducereuse and recycle the water where ever possible and there by bringing down the specificwater consumption. Various energy conservation measures have also helped in reducing thespecific energy consumption and thereby reducing the carbon foot prints. The Company'sRanjangaon plant facility has installed 500KWp roof top solar power plant in a bid toincrease the share of renewable energy usage and thereby reducing carbon foot prints. Theplants have also installed rain water harvesting systems to divert the rain water forground water recharging. With the approval from local Pollution Control Boards plantshave now started sending non-hazardous waste to cement companies to generate energyinstead of in-house incineration and thereby reducing overall carbon foot prints by savingthe part of the coal consumption of cement plants as well reducing fuel used to incineratethe material in house. As part of World Environmental day initiative the plants havetaken up various environmental awareness programs including tree plantation in plants aswell as public location.
Health and Safety: All three (3) manufacturing plants have health and safetymanagement systems certified to OHSAS 18001: 2007. All plants have dedicated safetyofficers supported by Corporate EHS. Plant Safety Committees which include shop flooremployees and chaired by Plant managers are in place and meet regularly to review issuesimpacting plant safety and employees health. High risk operations are controlled throughthe hierarchy of controls identified through 3M's risk prioritization matrix initiative.Key measures like conducting training programs on various health and safety issuesincluding dealing with epidemics ergonomics industrial hygiene process safetymanagement machine guarding work safety road safety first-aid manual handling etc.have been implemented. Regular health checkup of the plant employees is carried out. Everyyear plants celebrate safety month in March and conduct various safety awareness programslike safety quiz drawing competition slogan and hazard identification competition. Allplants have full- fledged emergency communication and management systems including firealarms fire hydrants and fire sprinklers. Regular mock drills are conducted to check theadequacy and preparedness of these systems. The plants have a well-equipped first aidrooms to attend to immediate medical needs. During this period under consideration therewere no lost time accidents across three plants. All three plants have received 3M CEOSafety Awards for completing two years without any lost time accident.
AWARDS AND RECOGNITION
The Company was recognized as one of the Best Healthcare Brands in 2016 by theEconomic Times (ET) publication. It was recognized for its contribution to the healthcareindustry and strong brand presence in the Medical Device & Equipment segment. BestHealthcare Brands is an initiative from the Economic Times (ET) Best Brands Initiative toexclusively recognize the contributions made by healthcare brands in India.
3M Car Care was awarded the Franchisor of the Year 2016 by Franchise IndiaAsia's largest franchise solutions Company. The award recognized Car Detailing as a uniquecategory which is representative of the growing interest and penetration of a categorythat 3M Car Care has successfully created over the years in India.
The Scotch-Brite Twister Mop an innovation in the home cleaning categorydeveloped in 3M India research lab was awarded the global Red Dot Product Design Awardfor its innovative wringing mechanism durable materials used and the comfort itguarantees. The Red Dot award is one of the most coveted design awards in the world.
The Company was recognized by Honda Motorcycles & Scooters India for the NewPart Development Award (2016-17) recognizing the Company's deep customer engagementthrough innovation.
The Company's Electronics City Plant was recognized by the Confederation ofIndian Industry (CII) in their Kaizen competition for the South Region. Two projects fromthe Electronics City plant won the 3rd place in the Associate category and the"Double Star Award" in the Supervisors Category respectively.
The Electronics City plant received 3M Corporate recognition for quality andmanufacturing excellence with global awards for two projects - One for quality achievementand one for process technology excellence.
The Company's plants at Electronics City Ranjangaon and Ahmedabad received 3MCorporation's CEO Health & Safety award for completing 2 years without any lost timeinjury.
The Company also received accolades for excellence in marketing innovation andsupport functions with several regional awards.
Your Directors wish to thank and acknowledge with gratitude the co-operationassistance and support received from the Central Government State Governments ofKarnataka Maharashtra and Gujarat Bankers Shareholders Dealers Vendors Promoters ofthe Company and all other stake holders.
The Directors also wish to place on record their sincere appreciation and gratitudetowards the contribution made by every employee of the Company.
| ||On behalf of the Board of Directors |
| ||Debarati Sen ||B.V. Shankaranarayana Rao |
|Place : Bengaluru ||Managing Director ||Whole-time Director |
|Date : May 26 2017 ||DIN:07521172 ||DIN: 00044840 |