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    O S e d t o Life.” p Ap l i > r o w i n g . G Bigger, bolder, smarter. Report Annual 015 2014 - 2


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    Contents Introduction Message from the Chairman Message from the Managing Director Ten Year Financial Highlights 16 Board of Directors 18 Notice to the Members 25 Report of the Directors 40 Annexure to the Report of the Directors 48 Independent Auditors’ Report 98 Annexure to the Independent Auditors’ Report 100 Balance Sheet 104 Statementof Profit and Loss 105 Cash Flow Statement 106 Notes to the Financial Statements 108 Proxy Form 134 Registered Office: Plot Nos. 48-51, Electronics City, Hosur Road, Bengaluru - 560100 « Tel: +91 80 2852 0203 e Fax: +91 80 2852 0576 Corporate Office: Concorde Block, UB City, 24, Vittal Mallya Road, Bengaluru - 560001 « Tel: +91 80 2223 1414 e Fax: +91 80 2223 1450


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    Growing by... Marketinsights. Local Innovation. Energising people. Embracing inclusion...


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    g out to the J | ses with solutions that enhancing our local manufacturing & sality innovation that empowers


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    È ...with our customers a a the heart of ENELL we do.


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    Leadership Speak. B.S. Iyar, Chairman __A positive outlook. Improving economic environment. Nen Twoule like to congratulate tha. encouraging economic. employees of 3M India who have. ‘anvironmentsince the A newleadership took over ‘excellent performanceduring the FY. AS BO14-15. Good potential for volume Government's growihwithout sacrificing prafitebility AA ‘augura wallfor the coming years. growth oriented COSTeeeneaoe Lanvalso happy to inform that your astablish India'srightful placa at tha global stage has brought about an overall Company has embarkedonits journey positive outtaok. Today, India's GDP is expected to touch a growth rate of7.8% eeeRE (source: Economic Survey of Incia) in the TOI CO estimatad 7.4%(source: Economic Survay of India) growthin 2014-15,a claer involves employees across the Improvement fram the sub 5% performance during the FY 2013-14, organization. In line with the core brandphilosophyof innovation, 3M OOO ee) has identified three strategic pillars for etenAneeeutoncg RoseNieead growth of 5,25% accompanied by > substantial increase in arofitability by 192% Education, Social Innovation and overthe previous year. The operating margin for the current year vias at 117% ON compared to 7.4% for the Inst year. Productvity-led growth was the msin theme: driving the Initiatives of your Company in theyear underreview. 3M India's ES performance was marked by a shift in focus te high margin produats with high the non-executive Chairman of your profitability, the realignmentof internal initistives and businesses, the building of Company, l'mgrateful forthe winning praduct portfolios, an Improvement af sales and RAD productivity and an. opportunity to guide the 3M India CORE O2 leadership on its productivity-led growth path. congratulate lo anti The Government's national initiatives such as "Makein India” launchedto boost '3M India team for delivering a manufacturing offers huge opportunities to growin businesses such as industrial, superlative performanceand wish automotive aftermarket and abrasives. Expanding geographical reschby focusing themgreat sucoassin their pursuit of ellaeed SO businessessuch assafety and graphics and healthcare. Portfolios such as next phase of growth. personal safety producis were able to grow by capitalizing on the needfor the mall & medium industry toestablish better safety standardsin factories, Local CORO ernreeerrteneterrrel) small hospitals in tier 2 and 3 cities and towns, Your Company ie alsa leveraging current ecommerce platforms to make availsble products as diverseas cleaning tools and do-it-yourself ear care products. Inall these examples of success, your Companycontinussto draw from tha strength of the SM brand that promises to Pee ieneeae EEcheecaeels


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    Amit Laroya, Managing Director Productivity. Driving Growtt Towards a bigger, bolder, smarter futu Wellive ina constantly.changing and vehicles with retro-reflective tapes Driving a culture of excellence,diversity, challenging economic environment Eee | inclusion and empathy and confranting this reality he ereee encouragod us to adapt and find! ble to capture the untapped potential of O smarter waysto sustain and grow our the small snd medium industry byhelping A business. raise safety and manufactilring stendardi CO wii the SM brand otitrowetion: The e During tha yea EN) AS Leadership Ferum launehod in the FY 2013- Eno Innovation exgirtie andintroduced PREEe solutions:such adaylighting tubuler eee en O EO AS Ne ea strangthening of leadership skill among eee ee vehicles and new sleaning tools for homes. women the orgenizetion. SM India also SO ea Isunched ta Carporsta Social like to share our growth story by. CIINT OS highlighing a four themes that haver Company brand name of Embrace to ensble emy determined our succsss butalsoput in amployaes to contrito tha community place e cultural hence in she way wo wil To cnorgizo our workforco, we underlooica Ate operata as company going forward. significantinitiative to driva a mindsetfor ON eterrt Social Innovation ard Weren Driving « produétivity-ted growth mindset eneee ee ae Empowermentend shrough cur inlistives tha voices al aur employeas were callated we hops o rita mindsto take ar new “To comen made eoncered elfoes wo to enículero a bold aspiration to become Ben Es TOea argin portfolios and exiting certain Etoplas the customer TI eae whion were no longer eligned A Ten REEEEfor to tha goals of tha company. The ttsr direction o our 5 yaarstrategic aoeeee retorted prioritization theme was alsoextended to ctive of drivirg volume growby. PER PER Darien expending ourrelevance te sur end ee aepeers and Ee eee Crete nd the aaceisaf he compary lo onsare Dar that they were working towards reducing vidallc to mens our numeros coste and alsine tho overall profiabiity af Hamessing new opportunities for growth A ee continue 1o contribute and be partnersin results ctsome ofthe initiatives we had put Tha napro-srewth polleiar of tha Een in plece such as centrelizing our customer [ERGET facing operations inte the Business initiative ard cha growing ecommerce 14 ko thanic our Crairmany Mr. B.S ly ESena DEN and guídancein tking See BEener te ION Peeeet Ee ce NN CO Dee eeeFERIEN solutions, For instance, we were able to 1hnext phase of growth with a re- pstabliss relationships with most of the big TA De players in tho cesminerce spaceto sell cur corsumarand ratal raro of proguctsto Thark you ‘Our busivess graups were able ta adapt to ensure avallasity across the country, Ths entEed eeeaeee) nou: business modela to cello Sur rerai Pee tan ed EN pradust portfolio in contpiculy tapes. productportal that can make city Ita hievad huge sales as we recponded to irore comfortable and ranageable. AS 5


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    Growing by marketinsights. Car Care Decoding the market pulse by creating targeted Enabling the shift solutionsin the key areas ofretail, construction, a to a new culture, through portfolio prioritisation has been the key to the D-I-Y way. converting emerging challenges and market driven x trendsto tangible growth. > M's deep insightinto skill based manufacturing and upcoming government mandates has paved the way for smarter opportunities towards growth. Healthcare Taking healthca Growing a healthiar nation meant digging doop into the healthcare system t0 ‘promote patiant safaty and infostion ‘controlpracticesat levels where its needed most, Improving patient outcomes ‘ay providing better hygiene through our local products to primary, secondaryand ‘tertiary care centers and nursing hemes hes ‘effectively enhanced patientsafety and directed dector and nursing time t0 key Patient needs in growing towns and cities. offerings, wide praduct range and localis st availability have been enabling thase enterprises to upgradetheir


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    Manufacturing Enhancing persona safety andh India O Infrastructure Government mandates given visibility. Staying abreast of government policies andbeing a keypartofthe AOEMsupply chain meant 3M's conspicuity tapes readily enabling regulation of India’s dismal road safety as and when the laws Kicked-in. BM is making this mammoth mandate a reality by education ofall stakeholders, ‘active participation with AGEMs and market driven programs that drive deeper penetration.


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    Fusionee EpoxyCo: Today. AM's eating technalooy anables safe transport and delivery of flood water. Water so that communities who stoadin ausuesto parch thirst, now have surplus,


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    Reflectivity. Lighting spaces, greening the world and the bottomline. Taking nature's blessing to light indeors was a special challengefor our. technalogista. Ihe result s Tubular Daylight Guidance System (TOGS) a revolutionary lighting systemthot delivers total daylight Without UV ana zero power: TDGS is enabled by thepatented roo! mounting storm working in tandem avith SMP Entancad Specular Retective Film ard ShDRLP Film. At current costs, the tam ie designato payback within Y Acoustics and Non-wovens Making silence golden. sly reading into tre unlenown ternary of acoustics was enabled by our expertisein nen Wovens and materialsciences, When a heme- grown Auto OEM came up with trechallenge of centralino bring to § SWISH is the patented Double Wall Decoupler Tunasla Noisa Treatment Solution harrar tnat gous closest to the course ofnoise tosilence it Bending marketinsight. So squeaky clean floors don’t break your back. Understancing uniquely na n Hor cleaning habits required breaking coun marketinsight to Us as — Im Joveerro permi comlataiy in-house designed, catarted, mace for India produet tat takes the sweat out of mopping.


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    Growing by energising people. Focusing on customer-centric growth meant empowering ourpeople with the rightattitude to transform ‘me’to the powerof“us”. This mantra drives a high performanceculture that forms the launchpad for a new generation of 3M go- getters whobelievein taking their world along. Strategic growth, Wom crowd-sourced leading tomorrow from employees. by standing up today. A collective aspirationfor the Cultivating leadership,stretching ‘company was crowd-sourced from inclusion and breaking gender interaction with 3Mars across the barriors, tho AM India Women's country, whereinit emerged that the Leadership Forum (WLF) continues to commoncausewas ‘putting our sow the rightspirit of inclusive customers at the heart of everything growth at our workplace. WLF sims to we do’ create a corporate climate that The Aspiration: "We will create a hamesses the leadership qualities of BIGGER,BOLDER, SMARTER the women’s workforceto aid growth company thatinspires every 3Merto andhasinfluenced policy changes. place our customers at the heart of and thehiring of more women into the everything wo do. organisation. direction for strategic growth over the next 5 years. 10


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    Meeting expectations Cultural by putting diversity customersfirst. that unites. od ble a pale of san cu Wat bal, e jad, ab ca La yrpac¡bono epl aetna a bat of lg wd Putting theright tools in place, so we Celebrating diversity and spreading ‘can meet and surpass customer an inclusive culture in the organisation has bs through the "I'm In” campaign. The confluence of in-depth customer aim is to be a collective of happy knowledge, people, processes and individuals that work togetherto. systems enables a better business further growth. A company where experience with 3M. every employeeis a proud part of the. AM family, where theindividualis heard, respectedand included. 1


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    Growing by embracing inclusion. aM embarked on a journey towards being a responsible corporate in India by sowing the seeds ofsocial empathythat will impactinclusive growth. Making our people aware of the powerof their Individual empathy, understanding the context and the nocassity for increased sacial responsi defined what, how and where we begin makingi@l difference to the world wecall ours. A3M India CSR meo Creating a better wor The 'Embrace? platform unitos the key SAIEV— Education,Social Innovation and Women’s Empowermentundera single umbrella. 12


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    nitiative Pe ne BEEERSEINER CRAMERDESTE en re Kennen halt ee Women’s Empowerment Initiative eeEURER pride by empowering women from. vulnerable sections with the rightskill eon ‘sccial change. This initiative makes womentheflag bearers ofinclusive developmentthrough vocational training. basic computar training and A euere ‘associationwith NGOs, Social Innovation Initiative Innavation that impacte society where lst relevantis nurtured through incubationsided by therighi corporate mentoring. 3M'sspirit ofinnovation aime to drive theright ideas forward BER commercialsupport and eventual execution.


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    Volunteerin g. For holistic | growth. Leadership, compassion and the spirit of volunteering marks a year where 3Mers embarked on a journey within so wecould empowerothers to forge ahead, Embrace — 3M's CSR initiative in India actively engages employees to contribute to the betterment of our world and enables them to do so with 2 working days of CSRvolunteering time. Whetheritis volunteering technical expertise, knowledge or leadership = each of theseroles. make 3Mers stand up, stand out and grow as westrive for the development of the world outside.


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    LS vrat Educating with an innovative spark. Empawering young women, Mobile Science Lab Skills & Leadership Initiative Development Initiative This outreach program benetts 100 This initiative imparts government-run primary schools and development as the key to empower 40,000 children(nthefirst yes) in the women in the vulnerable age group o vicinity of IM India’s Electronics City 16 to 22 yoars, Tho aventual im is to and Ranjangson plants. The program make1,500 economically independent uses a Mobil Science Lab concepto individuale.Skills sre imparted through impart learning through models that NGOpartners and employee Spark innovative thinking. Vocational training, language, basic computer knowledge and self-defense are oart of the Encouraging young innovators. Student Challenge Award In quest for innovative ideas among the youth, the first pan-India challenge was conducted and three winning ideas fal ing underthe categoriesof Sustainability, infrastructure and Healthcare received grants to develop prototypes. This îs è yearon-yenr initiative to identity and mantor young innovatorsin India. 15


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    Ten Year Financial Highlights 12 months ended (January to December) ERE 40,295 54,049 64,670 78,008 1,1740 109,409 147.128 Total Income 25,974 38,306 51,058 61,905 75,240 1; 10,679 120,241 1,41,037 Profit Before Depraciation, Interest 4,653 6,746 BAN 1,280 9,862 15,825 16,644. 12.832 & Tax (PBITDA) Profit Before Tax (PBT) 4,104 6,058 7.797 10,663 9,102 14,087 14,806 8,61 Profit After Tax (PAT) 2,554 3842 5,042 6,768 5745 9,284 9,881 8477 Net Fixed Assets 3218 2,933 4,432 9,742 14,332 18,102 25,952 31,967 Share Capital 1,127 1127 1127 wer 1,127 1427 4187 14127 Reserves & Surplus 12,372 16,214 21,256 27,204 33,649 42,933 52,813 59,291 Net Worth 13,499 17,341 22,383 28,030 34,776 44,059 53,940 60,417. Retained Earnings 2,554 3,842 5,042 6,768 5,745 9,284 9,881 8477 Employee costto sales 12.65 12.03 213 12.38 1274 1175 12.68 13.18 Net Deferred Tax Asset (29) 125 304 433 si 827 640 440 Capital Investment 1:81 293 2146 5,957 5416 5,473 10,233 9,568 Ratio Analysis PBT to Total Income (%) 15.80 15.81 15.27 17.22 12.10 1278 1231 5.81 PATto Total Income (%) 9.83 10.03 9.88 10.93 7.84 839 822 459 Return on Networth (RONW)(%) 18.92 22.16 22.59 2331 16.52 2107 18.32 10.72 Return on Capital Employed (%) 30.40 34.94 34,83 36.73 2617 3197 27.45 15,91 Return onEquity(%) 18,92 22.16 22.53 2831 16.52 2107 18.92 10.72 EPS 2267 34.10 4476 60.08 51.00 32.1 Br 8750 No. ofshareholders 8772 8,636 8,375 8,548 870 Ehul 9145 9,490 Notes/Glossary: * Soles before Excise duty charged. RONW=PAT/ Networth Previous year/period'sfigures have been regrauped/ reclassified RetumonCapi 1. Employed(%)=FBT/Capital employed wherever necessary to ensure uniformity. Return on Eouity=PAT/Networth Net worth=Shere Capitalt Reserves & Surplus i2000 Profit After Tax (PAT) 10.000 EE 2.000 6702 ilil il 5.000 4000 d I I 2008 zooowon © ‘Des pen Bus Net Worth I] 50500 44058 >iIa En iL 16


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    (tras 165,250 181809 192,790 158,463 185,178 caso RA zor Bon Tare Ben en Hoe 10,934 38,90 Profit Before Depreciation, Interest & Tax Pen (PBITDA) a zi 79,645 an 80,772 16.000 naso esse in 13088 10,834 en ear ese zoo a ams zon Zot zome MeBet mok Profit Before Tax (PBT) ‘ease At stab) maar HOG poz een son aros = \ 7500 oso ‘aie ste ann 2000 ont Hert wong Tate Ees oe Sa Reserves &Surplus an 3 70,006 o Ba ra moos 0000 mon 0 eos 17


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    Board of Directors Mr. Sameer Agarwal Chief Financial Officer (from Agril1, 2054) Mr. ¥. Srinivasan Company Secretary & Comaliance Officer Audit Committee Mr. 8.8. tyer Chairman (up to August , 2014) = Me. Biren Gathawala Chairman (from August5, 2014) wr. Ol abaRao Member (up te August 4, 2014) B.S. Iyer Mr. Pravbiakar Member {up to March27, 20%6) {from August , 2014) Mr. Ippacratis Vrohidis Member (up 22 August 1,2014} Chairman, Non-Executive and IM. Sharat D Shah Member from March 28, 2015) Indepensient Director Mr. Manuel B Perdo Member (from March 28, 2015) Sharehalders'/Investors’ Grievance Committee, (up to May 29, 2014) (disschvee Mr. Did. Balai Rue Cha Me. 8.§,lyer Member Mr. 8.C. Prat Member Me. Amit Larays Member Stakeholders Relationship Commit — (from May 20, 2014) in Gabhawala Me. Da Balaji ae Chairman (up to August 4, 2010) (from August 5, 2014) Mr. 8. S. yer Not Executive and Chairman{Irom August 5, 2014) Independent Dirsctor Mr.8.C: Prabhokar Memberlupo March 27, 2015) A Mr. Biren Gashawala Membar (from Auguet 5, 2014) Mr. Bharat D Shah Member from March 28, 201 Nor. Art Laroya Membar Corporate Social Responsibility Committee (from Agril18, 2019) Mr. 8.6. Pranhakar (Chairman {up te March 27, 2015) Mr. Bharat Shah Chairman {from March 28, 2015) wr. Art Laroye Member Me. 8.¥. Shankerar: Membar Mr. Ramesh Ramadurai Member (from March 28,2015) Albert ©. Wang Non-Execul Je Director Nomination and Remunoration Committee (from May29, 2014) Mr. D.C. Prathokar Chairman {up te March 27, 2015) [SD Mu. lan D Sl luisa{Inni Mili 28, 2015) Mi. Da. Balaji Rao Member (upto August 4, 2014) (We. dren Gathawala Member from August 5, 2014) Me. Albert © Wang Member "Mr. Ippoeratis Vrohidie Membar un te August 1,2014} Mrs. Sedhane Kaul Member from August 5, 2014) Ramesh Ramadurai (fram March 27, 2015) Non-Executive Director 18


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    ECO BNP Paribos Cont SANT N mites Amit Laroya Managing Director The Hong Auditors Messrs. Loveloc Charterad Acc SthFloor, Toxar "DT, Tha Milia, ENdees Bangaluru - 560008 Registrar 8 Transfer Agent IS Bharat D Shah rom March 27, 2015) bowl Nanskramgada, Nun Exeeutive and Pus Independent Director Eyderahad - 500008 Listing on Stock Exchanges India Liited (NSE) IS Sadhana Kaul Non-Executive Director Website: OS Corporate Office, ET 2 en wa A ER Bengaluru- 560001 Manuel B Pardo B. V. Shankaranarayana Rao {from March 27. 20°5) Wholetime Director ManExecalivo Diroctor 19


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    Together. Towards c


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    EC) IA Behaviours W 3M's Code of Conduct 21


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    Science. Applied to Life.”


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    3M INDIA LIMITED CIN: L31300KA1987PLC013543 Registered Office: Plot Nos. 48-51, Electronic City, Hosur Road, Bengaluru – 560100 Phone: 080-22231414, Fax: 080-2223 1450, email id:3mindia.investorshelpdesk@mmm.com, website: www.3m.com/in NOTICE TO THE MEMBERS NOTICE is hereby given that the Twenty Eighth (28th) Annual General Meeting of the Company will be held at 11.00 A.M. on Tuesday, the 4th August 2015 at The Grand Ball Room, Hotel Chancery Pavilion, 135, Residency Road, Bengaluru – 560 025, to transact the following business: ORDINARY BUSINESS: 1. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that the Financial Statements of the Company including Audited Balance Sheet as at March 31, 2015, the Statement of Profit and Loss of the Company for the year ended as on that date together with the Auditors' Report thereon and the Report of the Board of Directors including Secretarial Audit Report covering the same period be are hereby received, considered and adopted." 2. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that Mr. Albert C Wang (DIN-05234667), a Director, who retires by rotation at this Annual General Meeting, and being eligible for re-appointment,be and is hereby re-appointed as a Director of the Company." 3. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof), Messrs. Lovelock & Lewes., Chartered Accountants, Bengaluru, holding ICAI Firm Registration No.301056E,who have offered themselves for re-appointment and have confirmed their eligibility to be appointed as Auditors, in terms of provisions of Section 141 of the Companies Act, 2013 and Rule 4 of the Companies (Audit and Auditors) Rules, 2014, be and are hereby appointed as Auditors of the Company for the financial year ending March 31, 2016 and for the financial year ending March 31, 2017 and to hold office from the conclusion of this(28th)Annual General Meeting(AGM)till the conclusion of the 30th Annual General Meeting of the Company to be held in the year 2017, subject to ratification of their appointments by the Members at every Annual General Meeting held after this Annual General Meeting on such remuneration as may be agreed upon by the Board of Directors and Auditors, in addition to service tax and re- imbursement of out of pocket expenses incurred by them in connection with the audit of Accounts of the Company." SPECIAL BUSINESS: 4. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. B.S. Iyer (DIN-00138425), Director of the Company, in respect of whom the Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office from March 27, 2015 to March 31, 2016." 5. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Biren Gabhawala( DIN-03091772), Director of the Company, in respect of whom the Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office from August 5, 2014 to August 4, 2019." 25


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    NOTICE TO THE MEMBERS 3M India Limited 6. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Bharat D Shah (DIN-00136969), Director of the Company, in respect of whom the Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013 from a Member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office from March 27, 2015 to March 26, 2020." 7. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that in accordance with applicable provisions of the Companies Act ,2013 and the Rules made there under(including any statutory modification(s) or re-enactment thereof), Mr. Ramesh Ramadurai, (DIN-02589934), who was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on March 27, 2015, effective from March 27, 2015, in terms of Section 161(1) of the Companies Act, 2013 and Article 115 of the Articles of Association of the Company and whose term of office expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013 from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company whose period of office shall be liable to determination by retirement of Directors by rotation." 8. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that in accordance with applicable provisions of the Companies Act ,2013 and the Rules made there under(including any statutory modification(s) or re-enactment thereof), Mr. Manuel D Pardo, (DIN-07125832), who was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on March 27, 2015, effective from March 27, 2015, in terms of Section 161(1) of the Companies Act, 2013 and Article 115 of the Articles of Association of the Company and whose term of office expires at this Annual General Meeting and in respect of whom the Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013 from a member proposing her candidature for the office of Director, be and is hereby appointed as a Director of the Company whose period of office shall be liable to determination by retirement of Directors by rotation." 9. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an ordinary resolution: "RESOLVED that pursuant to the provisions of Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications(s) or re-enactment thereof for the time being in force), the remuneration payable during the Financial Year 2015-16 to Messrs. Rao, Murthy & Associates, Bengaluru (holding ICAI Registration No. 000065), Cost Auditors, appointed by the Board of Directors of the Company to conduct the audit of the cost records of the Company for the Financial year 2015-16 amounting to Rs. 400,000/-(Rupees Four Lakhs) as also the payment of service tax as applicable and re-imbursement of out of pocket expenses incurred by them in connection with the audit of cost records for the products covered as per the Companies (Cost Records and Audit) Rules, 2014, dated December 31, 2014 issued by the Ministry of Corporate Affairs be and is hereby ratified and confirmed." 10. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a special resolution: “RESOLVED that pursuant to provisions of Revised Clause 49(VII) of the Listing Agreement, entered into with the Stock Exchanges (including any statutory modification(s) or amendments or re-enactment thereof for the time being in force), approval of the members be and is hereby accorded to the Material Related Party transactions entered into and carried out in ordinary course of business and at arm's length price with 3M Company, USA(Parent Company), a 'Related party' as defined under Section 2(76) of the Companies Act, 2013 and Clause 49(VII) of the Listing Agreement: 26


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    NOTICE TO THE MEMBERS 3M India Limited Rs. in crores Sl. Actual value of Transactions Nature of Transactions No. for the Financial Year 2014-15 INCOME 1. Income from Contract Research 21.42 2. Sale of Goods 2.55 3. Re-charge of expenses received 4.21 Total 28.18 EXPENDITURE 1. Purchases of Materials 264.51 2. Royalty 19.70 3. Re-charge of expenses paid 0.36 4. Corporate Management Fee 57.73 Total 342.30 RESOLVED further that the Board of Directors be and are hereby authorized to do all such acts, deeds or things, as may be necessary and expedient, to give effect to the aforesaid resolutions.” 11. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a special resolution: “RESOLVED that pursuant to provisions of Revised Clause 49(VII) of the Listing Agreement, entered into with the Stock Exchanges (including any statutory modification(s) or amendments or re-enactment thereof for the time being in force), approval of the members be and is hereby accorded to the Material Related Party transactions estimated / to be entered into and to be carried out in ordinary course of business and at arm's length price with 3M Company, USA (Parent Company), a 'Related party' as defined under Section 2(76) of the Companies Act, 2013 and Clause 49(VII) of the Listing Agreement: Rs. in crores Sl. Estimated value of Transactions Nature of Transactions No. for the Financial Year 2015-16 INCOME 1. Income from Contract Research 31.69 2. Sale of Goods 1.72 3. Re-charge of expenses received 21.00 Total 54.41 EXPENDITURE 1. Purchases of Materials 390.37 2. Royalty 22.25 3. Re-charge of expenses paid 0.90 4. Corporate Management Fee 66.36 Total 479.88 By Order of the Board V. Srinivasan Place: Bengaluru Company Secretary Date : May 29, 2015 ACS-16430 27


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    NOTICE TO THE MEMBERS 3M India Limited NOTES: (1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY / PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND SUCH PROXY / PROXIES NEED NOT BE A MEMBER OF THE COMPANY. A PERSON CAN ACT AS PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY (50) AND HOLDING IN THE AGGREGATE NOT MORE THAN TEN (10) PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY. THE INSTRUMENT OF PROXY IN ORDER TO BE EFFECTIVE MUST BE DEPOSITED/LODGED AT THE REGISTERED / CORPORATE OFFICE OF THE COMPANY DULY COMPLETED AND SIGNED NOT LATER THAN 48 HOURS BEFORE THE TIME FIXED FOR HOLDING THE MEETING. A PROXY FORM IS SENT HEREWITH. PROXIES SUBMITTED ON BEHALF OF THE COMPANIES, SOCIETIES ETC., MUST BE SUPPORTED BY AN APPROPRIATE RESOLUTION/AUTHORITY, AS APPLICABLE. (2) Explanatory statement pursuant to Section 102 of the Companies Act, 2013, in respect of Special Business is annexed hereto. (3) The Register of Members and the share transfer books of the Company will remain closed from July 29, 2015 (Wednesday) to August4, 2015 (Tuesday), both days inclusive. (4) The shares of the Company are mandated by the Securities and Exchange Board of India for trading in dematerialized form by all investors. Members holding shares in physical form are advised to dematerialize their shares to avoid the risks associated with the physical holding of such share certificates.The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant insecurities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company's Registrar and Transfer Agent. (5) The Registrar and Transfer Agent;Karvy Computer Share Private Limited, Karvy Selenium Tower-B, Plot Nos. 31 & 32, Financial District, Gachibowli, Nanakramguda, Serilingampally, Hyderabad- 500 008 is handling registry work in respect of shares held both in physical form and in electronic/demat form. (6) Members are requested to bring their copy of the Annual Report and the Attendance Slip to the Annual General Meeting. ONLY MEMBERS/ PROXIES WILL BE ADMITTED INTO THE HALL FOR THE MEETING. (7) Members may refer Additional Information on Directors recommended for appointment / re-appointment under clause 49 of the Listing Agreement. (8) Members holding shares in electronic form are requested to register their e-mail address with their respective depository participants and members holding shares in Physical form are requested to register their e-mail address with the Company's Registrar and Transfer Agents and participate in the "Green initiative" launched by the Ministry of Corporate Affairs in future. As per rule 3 of Companies (Management & Administration) Rules, 2014, Register of Members of all the Company's now should have additional details pertaining to e-mail, PAN / CIN, UID, Occupation, Status, Nationality. We request all the Members of the Company to update their details with their respective depository participants in case of shares held in electronic form and with the Company's Registrar and Transfer Agents in the case of physical holding immediately. (9) Members holding shares in physical form are requested to notify to the Company's Registrar and Transfer Agent of any change in their address and update their Bank account details. Members holding shares in electronic form are requested to notify any change of address and update bank account details to their respective depository participants directly. (10) Pursuant to Section 72 of the Companies Act, 2013, shareholders holding shares in physical form may file nomination in the prescribed Form SH-13 with the Company's Registrar and Transfer Agent. In respect of shares held in electronic / demat form, the nomination form may be filed with the respective Depository Participant. (11) Electronic copy of the Notice of the 28th Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent to all the members whose email IDs are registered with the Company/Depository Participants(s) for communication purposes unless any member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the Notice of the 28th Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with Attendance Slip and Proxy Form is being sent in the permitted mode. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection during normal business hours on all working days except Saturdays, up to and including the date of the Meeting. 28


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    NOTICE TO THE MEMBERS 3M India Limited (12) VOTING THROUGH ELECTRONIC VOTING SYSTEM(REMOTE E-VOTING): Pursuant to Section 108 of Companies Act, 2013 read with Rule 20 of Companies (Management and Administration) Rules, 2014, the Company is pleased to provide the facility to Members to exercise their right to vote by electronic means. The Members, whose names appear in the Register of Members / list of Beneficial Owners as on July 28, 2015 (Tuesday) i.e. the date prior to the commencement of Book closure date are entitled to vote on the Resolution set forth in this Notice. The remote e-voting period will commence at 9 A.M. on July 31, 2015(Friday) to 5.00 P.M. on August 3, 2015 (Monday).It is hereby clarified that it is not mandatory for a member to vote using the remote e-voting facility, and a member may avail of the facility at his/her/it discretion, subject to compliance with the instructions prescribed below. The Company has engaged the services of Karvy Computershare Private Limited (Karvy) for facilitating remote e- voting for the Annual General Meeting. The Members desiring to vote through remote e-voting mode may refer to the detailed procedure on e-voting given hereinafter. INSTRUCTION FOR REMOTE E-VOTING (a) To use the following URL for remote e-voting: From Karvy website : https://evoting.karvy.com (b) Shareholders of the Company holding shares either in physical form or in dematerialized form, as on the record date, may cast their vote electronically. (c) Enter the login credentials [i.e., user id and password mentioned in the Notice of the AGM]. The Event No+ Folio No/DP ID-Client ID will be your user ID. (d) After entering the details appropriately, click on LOGIN. (e) You will reach the Password change menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case (e-z), one numeric value (0-9) and a special character(@,#,$ ). The system will prompt you to change your password and update any contact details like mobile, email etc. on first login. You may also enter the secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. (f) You need to login again with the new credentials. (g) On successful login, the system will prompt you to select the EVENT i.e., 3M India Limited and click on SUBMIT. (h) Now you are ready for e-voting as "Cast Vote" page opens. On the voting page, the number of shares as held by the shareholder as on July 28, 2015, (Tuesday) will appear. If you desire to cast all the votes assenting/dissenting to the Resolution, then enter all shares and click FOR / AGAINST as the case may be. You are not required to cast all your votes in the same manner. You may also choose the option ABSTAIN in case you wish to abstain from voting (i) Shareholders holding multiple folios / demat account shall choose the voting process separately for each folios / demat account. (j) Cast your vote by selecting an appropriate option and click on SUBMIT. A confirmation box will be displayed. Click OK to confirm else CANCEL to modify. Once you confirm, you will not be allowed to modify your vote. During the voting period, shareholders can login any number of times till they have voted on the resolution. (k) Once the vote on the resolution is cast by the shareholder, he shall not be allowed to change it subsequently. (l) The Companies (Management and Administration) Amendment Rules, 2015 provides that the electronic voting period shall close at 5.00 p.m. on the date preceding the date of the AGM. Accordingly the Portal will be open for voting from: 9 A.M. on July 31, 2015 (Friday) to 5.00P.M. on August 3, 2015 (Monday). The e-voting module shall be disabled by Karvy at 5.00 p.m on the same day. During this period shareholders' of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of July 28, 2015(Tuesday), may cast their vote electronically. Once the vote on a resolution is cast by the shareholder, the shareholder shall not be allowed to change it subsequently. (m) In case of any queries, you may refer the Frequently Asked Questions (FAQs) for shareholders and e-voting User Manual for shareholders available at the download section of https://evoting.karvy.com or contact Mr. Varghese P.A of Karvy Computershare Pvt. Ltd. at 040-67161503 OR at Tel No. 1800 345 4001 (toll free). (n) The Company has appointed Mr.Vijayakrishna K.T, Practicing Company Secretary, who in the opinion of the Board is a duly qualified person, as a Scrutinizer who will collate the electronic voting process in a fair and transparent manner: provided that the scrutinizer so appointed may take assistance of a person who is not in employment of the Company and who is well-versed with the electronic voting system. 29


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    NOTICE TO THE MEMBERS 3M India Limited (o) The voting rights of the shareholders shall be in proportion to their shares of the paid-up equity share capital of the Company as on the cut-off date of July 28, 2015, (Tuesday). (p) The Members, whose names appear in the Register of Members / list of Beneficial Owners as on Tuesday, July 28, 2015, are entitled to vote on the Resolutions set forth in this Notice. (q) Any person, who acquires shares of the Company and becomes member of the Company after dispatch of the Annual Report and holding shares as of the cut-off date i.e. July 28, 2015 may obtain the login ID and password by sending an email to evoting@karvy.com/rajeev.kr@karvy.com, by mentioning their Folio No./DP ID and Client ID No. Else, if your Mobile number is registered against Folio No./DP ID-Client ID, the member may send SMS:MYEPWD <space> Event Number + Folio or DP ID Client ID to +91 9212993399. Example for NSDL :MYEPWD <SPACE> IN12345612345678 Example for CDSL :MYEPWD <SPACE> 1402345612345678 Example for PHYSICAL :MYEPWD <SPACE> XXX1234567 However, if you are already registered with Karvy for remote e-voting then you can use your existing user ID and password for casting your vote. If e-mail or mobile number of the member is registered against Folio No./DP ID Client ID, then on the home page of https://evoting.karvy.com, the member may click "forgot password" and enter Folio No. or DP ID Client ID and PAN to generate as password. (r) A member may participate in the meeting even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the meeting. (s) Voting at AGM: The members who have not cast their vote by remote e-voting can exercise their voting rights at the AGM. The Company will make arrangements of ballot papers in this regards at the AGM Venue. (t) The scrutinizer shall, immediately after the conclusion of voting at the General Meeting, first count the votes cast at the meeting, thereafter unblock the votes cast through remote e-voting in the presence of at least two(2) witnesses not in the employment of the Company and make not later than three(3) days of conclusion of the meeting a consolidated scrutinizer's report of the total votes cast in favor or against, if any, to the Chairman or a person authorized by him in writing who shall countersign the same. (u) The results declared along with the report of the scrutinizer shall be placed on the website of the Company www.3m.com/in and on https://evoting.karvy.com immediately after the result is declared by the Chairman. The Company shall, simultaneously, forward the results to the stock exchanges where the shares are listed. (v) In case of joint shareholders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote. (w) Institutional members (i.e., other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution / Authority letter etc., to the Scrutinizer through e-mail at vijaykt@vjkt.in, with a copy marked to varghese@karvy.com . File naming convention should be 'Corporate Name EVENT NO.' The documents should reach the Scrutinizer on or before the close of working hours on August 3, 2015 (Monday). (x) In case a Member receives physical copy of the Notice of AGM (for members whose email IDs are not registered with the Company/Depository Participant(s) or requesting physical copy) in the permitted mode: (i) Initial password as below is given in the attendance slip for the AGM EVEN USER ID PASSWORD (Electronic Voting Sequence Number) XXXXXXX XXXXXXX XXXXXXXXX (ii) Please follow all steps from Sl. No. (12)(c) to (12)(j) above to cast your vote. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / RE-APPOINTMENT UNDER CLAUSE 49 OF THE LISTING AGREEMENT: Item No.2 In terms of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013, for the purpose of determining the Directors liable to retire by rotation, the Independent Directors shall not be included in the total number of Directors of the Company. Mr. Albert C Wang, Non-Executive Director, shall accordingly retire at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. A Brief profile of Mr. Albert C Wang, nature of his expertise in specific functional areas, names of companies in which he hold directorships, memberships of the Board's Committees, shareholding in the Company and relationships between Directors inter-se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), are exhibited below. 30


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    NOTICE TO THE MEMBERS 3M India Limited Mr. Albert C Wang (DIN- 05234667):Mr. Albert Wang, 47, joined 3M Company in January 2012 as General Counsel, Asia Pacific and is based out of Shanghai, China. Prior to joining 3M, Mr. Albert Wang was Legal Director for Dell Inc. from 2001-2012 leading their legal affairs efforts for Greater China as well as regionally (Asia Pacific) for their Public & Large Enterprise business unit. He began practicing law with the New York-based international law firm of Coudert Brothers, with postings in Hong Kong (1993-1998) and Shanghai (1998-2001).There, his practice was focused on foreign direct investment and mergers and acquisitions, representing a wide array of multinational corporations and global financial institutions across a broad range of industry sectors. Mr. Albert Wang graduated in 1990 from Colgate University with a Bachelor of Arts degree in Political Science. He earned his Juris Doctor degree from The George Washington University National Law Center in 1993. He is a member of the New York State Bar, the American Chamber of Commerce in Shanghai and the U.S. China Business Council. He was appointed as a Non-Executive Director of the Company from March 12, 2012. He is a Member of the Nomination and Remuneration Committee of the Company. Mr. Albert is not related to any other Directors of the Company. Mr. Albert Wang is not a Director in any other Company in India /outside India. He does not hold by himself or for any other person on a beneficial basis, any shares in the Company. Accordingly, the Board recommends his re-appointment. Except Mr. Albert Wang, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in Item No. 2. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing agreement with the Stock Exchange. Appointment of other Directors (Item Nos. 4 to 8) For the details pertaining to Mr. B.S. Iyer, Mr. Biren Gabhawala, Mr. Bharat D Shah, Mr. Ramesh Ramadurai and Mr. Manuel B Pardo, please refer to the below Explanatory Statement in respect of the Special Business set out at Item Nos. 4 to 8 of the Notice of Annual General Meeting pursuant to Section 102 of the Companies Act, 2013. EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013. Following Explanatory Statements are furnished in respect of Special Business: Item 4 Mr. B.S. Iyer is a Non-Executive Independent Director and has held position from December 26, 2001. His period in office was liable to determination by retirement of Directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956. Section 149 (10) of the Companies Act, 2013 provides that an Independent Director shall hold office for a term of up to five consecutive years on the Board. Further, Section 149 (13) of the Companies Act, 2013 states that the provisions relating to retirement of directors by rotation shall not apply to the appointment of Independent Directors. Further, the Ministry of Corporate Affairs, Government of India, by a notification, has clarified that if a company intends to appoint existing Independent Directors as Independent Directors under the Act, such appointment must be made expressly within one year from 1st April, 2014. The Company has complied with the provisions of the Companies Act, 2013 and the notification of the Ministry of Corporate Affairs by appointing Mr. B.S. Iyer as an Independent Director under Section 149 of the Companies Act, 2013, subject to approval of the Members. In view of the above, it is now placed before the Members for the approval to appoint Mr. B.S. Iyer as an Independent Director under Section 149 and other applicable provisions of the Companies Act, 2013 and the Rules made there under read with Clause 49 of the Listing Agreement. The Nomination & Remuneration Committee of the Company at its meeting held on March 27, 2015 has recommended the appointment of Mr. B.S. Iyer as an Independent Director under Section 149 of the Companies Act, 2013 from March 27, 2015 to March 31, 2016. The Company has received notice in writing from a Member along with the deposit of Rs. 1,00,000/- proposing the candidature of Mr. B.S. Iyer for the office of Director of the Company. The Company has received from Mr. B.S. Iyer - (i) consent in writing to act as director in Form DIR 2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules,2014, (ii) intimation in Form DIR 8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he is not disqualified under sub-section (2) of Section 164 of the Companies Act, 2013, confirming his eligibility for such appointment, and (iii) a declaration to the effect that he meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. In the opinion of the Board, Mr. B.S. Iyer fulfills the conditions of his appointment as Independent Director as specified in the Companies Act, 2013, Rules made there under and the Listing Agreement and is Independent of the Management. 31


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    NOTICE TO THE MEMBERS 3M India Limited A Brief profile of Mr. B.S. Iyer, nature of his expertise in specific functional areas, names of companies in which he hold directorships, memberships of the Board's Committees, shareholding in the Company and relationships between directors inter- se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), is given below. Copy of the draft letters of appointment of the proposed Director as Independent Director setting out the terms and conditions are available for inspection by Members at the Corporate Office of the Company and the same has been disclosed in the website of the Company. Mr. B.S. Iyer (DIN-00138425): Mr. B.S. Iyer, 65, is a Post Graduate in Commerce and Post Graduate in Law from the University of Bombay, holds a Diploma in Management Accounting, Member of the All India Management Association and is a Fellow Member of the Institute of Company Secretaries of India. Mr. Iyer held senior positions, responsible for Corporate Legal affairs for over 30 years. He retired as Vice President -Legal and Company Secretary of Bosch Limited. He is a Corporate Legal Resource person for several MNCs and Indian companies. He was appointed as a Director of the Company from December 26, 2001 and as Chairman of the Board from the conclusion of the Annual General Meeting held on August 4, 2014. Names of other companies/firms in which Mr. B.S. Iyer hold/held office as Director/Partner: Nil Names of Committees/Chairmanships held details of Mr. Iyer is given below (as per Clause 49(II) (D) (2) : Membership of Committee Chairmanship of Committees Name of the Company Audit Stakeholder's Audit Stakeholder's Relationship Relationship 3M India Limited PP P He holds 35 shares in the Company as a second shareholder (first shareholder being his wife).He is not related to any other Directors of the Company. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Mr. B.S. Iyer as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. B.S. Iyer as an Independent Director, for the approval by the members of the Company. Except Mr. B.S. Iyer, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. 4. This Explanatory Statement may be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange. Item 5 Mr. Biren Gabhawala is a Non-Executive Independent Director of the Company. He was appointed as an Additional Director of the Company by the Board of Directors with effect from August 5, 2014, pursuant to provisions of Section 161 of the Companies Act, 2013 and the Articles of Association of the Company and holds office up to the date of ensuing Annual General Meeting. Section 149 (10) of the Companies Act, 2013 provides that an Independent Director shall hold office for a term of up to five consecutive years on the Board. Further, Section 149 (13) of the Companies Act, 2013 states that the provisions relating to retirement of Directors by rotation shall not apply to the appointment of Independent Directors. Further, in view of the above, it is proposed to appoint Mr. Biren Gabhawala as an Independent Director under Section 149 and other applicable provisions of the Companies Act, 2013 and the Rules made there under read with Clause 49 of the Listing Agreement. The Nomination & Remuneration Committee of the Company at its meeting held on August 1, 2014 has recommended the appointment of Mr. Biren Gabhawala as an Independent Director under Section 149 of the Companies Act, 2013 from August 5, 2014 to August 4, 2019. The Company has received notice in writing from a Member along with the deposit of Rs. 1,00,000/- proposing the candidature of Mr. Biren Gabhawala for the office of Director of the Company. The Company has received from Mr. Biren Gabhawala – (i) consent in writing to act as director in Form DIR 2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules, 2014, (ii) intimation in Form DIR 8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he is not disqualified under sub-section (2) of Section 164 of the Companies Act, 2013, confirming his eligibility for such appointment, and (iii) a declaration to the effect that he meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. 32


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    NOTICE TO THE MEMBERS 3M India Limited In the opinion of the Board, Mr. Biren Gabhawala fulfills the conditions of his appointment as Independent Director as specified in the Companies Act, 2013, Rules made there under and the Listing Agreement and is Independent of the Management. A Brief profile of Mr.Biren Gabhawala, nature of his expertise in specific functional areas, names of companies in which he hold directorships, memberships of the Board's Committees, shareholding in the Company and relationships between directors inter- se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), is given below. Copy of the draft letters of appointment of the proposed Director as Independent Director setting out the terms and conditions are available for inspection by Members at the Corporate Office of the Company and the same has been disclosed in the website of the Company. Mr. Biren Gabhawala, (DIN- 03091772): Mr. Biren Gabhawala, 50, was appointed to the Board of the company as an Additional Director from August 5, 2014. He holds a Bachelor's degree in Commerce from University of Mumbai and is a qualified Chartered Accountant and fellow member of Institute of Chartered Accountants of India. He is into practice for last 26 years. He is a Senior Partner of Messrs. C. M. Gabhawala & Co. Chartered Accountants and specializes in Direct and Indirect Taxation, FEMA, International Taxation, Mergers, and Acquisitions. Names of other companies/firms in which Mr. Biren Gabhawala hold/held office as Director/Partner is given below: - eClerx Services Limited, Director Names of Committees/Chairmanships held by Mr. Biren Gabhawala is given below (as per Clause 49(II) (D) (2) : Membership of Committee Chairmanship of Committees Name of the Company Audit Stakeholder's Audit Stakeholder's Relationship Relationship 3M India Limited PPP eClerx Services Limited PPP Mr. Biren Gabhawala does not hold by himself or for any other person on a beneficial basis, any shares in the Company. He is not related to any other Directors of the Company. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Mr. Biren Gabhawala as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Biren Gabhawala as an Independent Director, for the approval by the members of the Company. Except Mr. Biren Gabhawala, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. 5. This Explanatory Statement may be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange. Item 6 Mr. Bharat D Shah is a Non-Executive Independent Director of the Company. He was appointed as an Additional Director of the Company by the Board of Directors with effect from March 27, 2015, pursuant to provisions of Section 161 of the Companies Act, 2013 and the Articles of Association of the Company and holds office up to the date of ensuing Annual General Meeting. Section 149 (10) of the Companies Act, 2013 provides that an Independent Director shall hold office for a term of up to five consecutive years on theBoard. Further, Section 149 (13) of the Companies Act, 2013 states that the provisions relating to retirement of Directors by rotation shall not apply to the appointment of Independent Directors. Further, in view of the above, it is proposed to appoint Mr. Bharat D Shah as an Independent Director under Section 149 and other applicable provisions of the Companies Act, 2013 and the Rules made there under read with Clause 49 of the Listing Agreement. The Nomination & Remuneration Committee of the Company at its meeting held on March 27, 2015 has recommended the appointment of Mr. Bharat Shah as an Independent Director under Section 149 of the Companies Act, 2013 from March 27, 2015 to March 26, 2020. The Company has received notice in writing from a Member along with the deposit of Rs. 1,00,000/- proposing the candidature of Mr. Shah for the office of Director of the Company. The Company has received from Mr. Bharat Shah – (i) consent in writing to act as director in Form DIR 2 pursuant to Rule 8 of Companies (Appointment & Qualification of Directors) Rules, 2014, (ii) intimation in Form DIR 8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he is not disqualified under sub-section (2) of Section 164 of the Companies Act, 2013, confirming his eligibility for such appointment, and (iii) a declaration to the effect that he meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. 33


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    NOTICE TO THE MEMBERS 3M India Limited A Brief profile of Mr. Bharat Shah, nature of his expertise in specific functional areas, names of companies in which he hold directorships, memberships of the Board's Committees, shareholding in the Company and relationships between directors inter- se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), is given below. Copy of the draft letters of appointment of the proposed Director as Independent Director setting out the terms and conditions are available for inspection by Members at the Corporate Office of the Company and the same has been disclosed in the website of the Company. Mr. Bharat D Shah, (DIN- 00136969): Mr. Bharat D Shah, 68, was appointed to the Board of the Company as an Additional Director from March 27, 2015. Mr. Bharat Shah has extensive experience and expertise in the field of banking, finance and securities market. He has been one of the founder members of HDFC Bank Limited and has played a key role in the establishment and consistent growth of the Bank. He is also on the Board of various prominent companies. Before joining the Financial Sector, he worked with Technova, Bradma and Pyrene in London. He has also worked with Leading MNCs viz., Thomas Cook, Citibank and with UBS. Mr. Bharat Shah is the Chairman of HDFC Securities Limited. He has his Bachelor's in Science Degree from the University of Mumbai and also holds a Degree in Applied Chemistry with special reference to metal finishing from Borough Polytechnic, London. Names of other companies/firms in which Mr. Bharat Shah hold/held office as Director/Partner is given below: - Atlas Documentary Facilitators Company Private Limited, Director - Faering Capital Trustee Company Private Limited, Director - HDFC Securities Limited, Chairman - Hexaware Technologies Limited, Director - Hill Properties Limited, Director - IDFC Alternatives Limited, Director - Salisbury Investments Private Limited, Director - Strides Arcolab Limited, Director - AGS Transact Technologies Limited, Director - India Transact Services Limited, Director Names of Committees/Chairmanships held by Mr. Bharat Shah is given below (as per Clause 49(II) (D) (2) : Membership of Committee Chairmanship of Committees Name of the Company Audit Stakeholder's Audit Stakeholder's Relationship Relationship 3M India Limited PP eClerx Services Limited P IDFC Alternatives Limited P Mr. Bharat Shah does not hold by himself or for any other person on a beneficial basis, any shares in the Company. He is not related to any other Directors of the Company. The Board considers that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Mr. Bharat Shah as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Bharat Shah as an Independent Director, for the approval by the members of the Company. Except Mr. Bharat D Shah, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. 6. This Explanatory Statement may be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange. Item 7 Mr. Ramesh Ramadurai is a Non-Executive Director of the Company. Based on the nomination from 3M Company, USA, the Nomination & Remuneration Committee of the Company at its meeting held on March 27, 2015 has recommended the appointment of Mr. Ramesh Ramadurai as a Director of the Company. The Board of Directors at their meeting held on March 27, 2015, appointed Mr. Ramesh Ramadurai as a Non-Executive Director of the Company from March 27, 2015, pursuant to provisions of Section 161 of the Companies Act, 2013 and the Articles of Association of the Company and holds office up to the date of ensuing Annual General Meeting. The Company has received notice in writing from a Member along with the deposit of Rs. 1,00,000/- proposing the candidature of Mr. Ramesh Ramadurai for the office of Director of the Company. 34


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    NOTICE TO THE MEMBERS 3M India Limited Mr. Ramesh Ramadurai does not hold by himself or for any other person on a beneficial basis, any shares in the Company. He is not related to any other Directors of the Company. He is neither a director nor a member in any other company registered in India/ outside India. He was appointed as a member of the CSR Committee of the Company from March 28, 2015. A Brief profile of Mr. Ramesh Ramadurai, nature of his expertise in specific functional areas is given below: Mr. Ramesh Ramadurai, (DIN- 07109252): Mr.Ramesh Ramadurai, 53, was appointed as Business Director for 3M Industrial Business in July 2014 and is based out of Shanghai responsible for the entire Asia Pacific Area. Prior to this role, Mr. Ramesh Ramadurai served as Managing Director of 3M Philippines from August 2011 until June 2014, based in Manila. He Joined 3M India in 1989 as Sales Engineer and held positions as Country Business Leader in Industrial Business and Electro & Telecommunications. He was seconded to Global Headquarters in St Paul, USA, and worked as Market Segment Manager in Industrial Business, as Global Business Manager for a line of Industrial Tapes, and as International Business Manager for 3M's Packaging, Masking and Specialty Tapes businesses. Prior to 3M, Mr. Ramesh Ramadurai worked for a year as a Production Engineer at an Offshore Oil Production facility, and for about 3 years in a business planning and development role at an automotive parts and motorcycle manufacturer. Mr. Ramesh Ramadurai holds MBA from the Indian Institute of Management in Calcutta and is a Bachelor of Technology in Chemical Engineering from the Indian Institute of Technology, Kanpur. He was appointed as a Non-Executive Director of the Company from March 27, 2015. The Board considers that the appointment of Mr. Ramesh Ramadurai as a Director of the Company would be of immense benefit to the Company. Accordingly, the Board of Directors recommends his appointment as a Director of the Company whose period of office is liable to determination by retirement of Directors by rotation. Except Mr. Ramesh Ramadurai, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No.7. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange. Item 8 Mr. Manuel B Pardo is a Non-Executive Director of the Company. Based on the nomination from 3M Company, USA, the Nomination & Remuneration Committee of the Company at its meeting held on March 27, 2015 has recommended the appointment of Mr. Manuel Pardo as a Director of the Company. The Board of Directors at their meeting held on March 27, 2015, appointed Mr. Manuel Pardo as a Non-Executive Director of the Company from March 27, 2015, pursuant to provisions of Section 161 of the Companies Act, 2013 and the Articles of Association of the Company and holds office up to the date of ensuing Annual General Meeting. The Company has received notice in writing from a Member along with the deposit of Rs. 1,00,000/- proposing the candidature of Mr. Manuel Pardo for the office of Director of the Company. Mr. Manuel Pardo does not hold by himself or for any other person on a beneficial basis, any shares in the Company. He is not related to any other Directors of the Company. He is neither a director nor a member in any other company registered in India/ outside India. He was appointed as a member of the Audit Committee of the Company from March 28, 2015. A Brief profile of Mr. Manuel Pardo, nature of his expertise in specific functional areas is given below: Mr. Manuel B Pardo, (DIN- 07125832): Mr. Manuel B. Pardo, 53, was named Finance Director - Asia based out of Hong Kong in August 2014. A 15-year veteran of 3M, he served as Industrial Adhesives and Tapes Division Finance Manager of 3M U.S, since 2009. Mr. Manuel Pardo joined 3M in 2000, worked in Business Finance, IT, Sourcing and also as Legal Manager in 3M Colombia. He has worked with various 3M divisions and lead Latin America Finance division. He is a certified Six Sigma Master Black Belt - Finance for Latin America and Canada. A native of Colombia, Mr. Manuel Pardo had first-hand experience with economies in various stages of development. Throughout his career he developed practical expertise with managing successfully operations during currency fluctuations and devaluations. Prior to joining 3M, Mr. Manuel Pardo had broad experience in the Oil Industry, Agribusiness, Pension Funds and Banking. Mr. Manuel Pardo earned a Master Degree in International Management, University of St. Thomas, St. Paul, Minnesota in 1991, and has a Bachelor degree in Business with finance concentration from a very well known Colombian University. He was appointed as a Non-Executive Director of the Company from March 27, 2015. The Board considers that the appointment of Mr. Manuel Pardo as a Director of the Company would be of immense benefit to the Company. Accordingly, the Board of Directors recommends his appointment as a Director of the Company whose period of office is liable to determination by retirement of Directors by rotation. 35


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    NOTICE TO THE MEMBERS 3M India Limited Except Mr. Manuel B Pardo, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No.8. This Explanatory Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement with the Stock Exchange. Item 9 The Board of Directors of the Company at its meeting held on May 29, 2015 had on the recommendation of the Audit Committee, approved the re-appointment and remuneration of Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, (holding Registration No. 000065), to the products covered as per the Companies (Cost Records and Audit) Rules, 2014, dated December 31, 2014 issued by the Ministry of Corporate Affairs on an remuneration of Rs. 400,000/- plus service tax as applicable and out of pocket expenses at actuals. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is to be ratified by the Members of the Company. Accordingly, the Members are requested to ratify the remuneration payable to the Cost Auditors during the year 2015-16 as set out in the Resolution for the aforesaid services to be rendered by them. None of the Directors, Key Managerial Personnel of the Company and their relatives, is in any way concerned or interested or otherwise, in the resolution set out at Item No.9. Item 10 The Company is the flagship listed Company of 3M Company, USA in India. 3M Company, USA holds 75% equity stake in the Company. 3M Company, USA is a diversified technology company with a global presence in the following businesses: Industrial; Safety and Graphics; Electronics and Energy; Health Care; and Consumer. 3M is among the leading manufacturers of products for many of the markets it serves. Most 3M products involve expertise in product development, manufacturing and marketing, and are subject to competition from products manufactured and sold by other technologically oriented companies. 3M India Limited manages its operations in five (5) operating business segments: Industrial; Safety and Graphics; Energy; Health Care; and Consumer. 3M's five business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. The Company has three Manufacturing Plants and a nationwide sales and branch network in India. The Company being a part of 3M conglomerate, has exclusive / sole rights to carry out the Group's business within India and accordingly, has access to Group's synergies, state of art products and technologies, competencies and "3M" brand name which are very critical and essential to carry out its business operations more efficiently in an increasingly globalized and competitive scenario. As a part of its regular business, the Company purchases, avails/renders services from/to 3M Company, USA at arm's length basis. The Audit Committee at the meeting held on May 29, 2014 has reviewed and after due consideration, accorded omnibus approval for the transactions mentioned in the Item No. 10 of the Notice for the year 2014-15. An analysis of all the Related Party Transactions(RPTs) entered into/by the Company during the year 2014-15 and the basis of charge was undertaken through a third party professional firm. The Audit Committee upon review of such analysis, is of the view that all these RPTs by the Company are at Arm's Length basis. 3M Company, USA is a Holding Company(Promoter) of the Company and is a "Related Party" as per the definition under Section 2(76) of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with the stock exchanges. The Securities and Exchange Board of India (SEBI) vide Circular No. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014 and CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 has amended Clause 49 (VII) of the Equity Listing Agreement with effect from October 1, 2014.Under the said amendment, all Related Party Transactions(RPTs) shall require approval of the shareholders by a special resolution. The said amendment further provides definition of the term "Material" as follows: “A transaction with a related party shall be considered material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual turnover as per the last audited financial statements of the company.” As per the said provisions of Clause 49, based on past trend, the transactions as described hereunder are likely to exceed 10% of 36


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    NOTICE TO THE MEMBERS 3M India Limited the annual turnover of the Company(2013-14) as per the last audited financial statements of the Company and exceed the materiality threshold as prescribed under Clause 49. Thus, in terms of Clause 49, these transactions would require the approval of the members by way of a Special Resolution. As per Clause 49(VII) of the Listing Agreement, all entities falling under the definition of related parties shall abstain from voting on the resolution and accordingly, the promoters will not vote on Item No. 10. Particulars Information Name of the Related party 3M Company, USA Nature of relationship Holding Company (Parent)of the Company Name of Director(s) or key Managerial personnel who is None except Mr. Albert C Wang, Mrs. Sadhana Kaul, Mr. related, if any, Manuel B Pardo, Mr. Ramesh Ramadurai, Mr. Amit Laroya and Mr. B.V. Shankaranarayana Rao (being Nominees of 3M Company, USA on the Board of the Company) Nature and Particulars of transactions with 3M Company, Income from Contract Research,Sale of Goods, Purchases of USA (“RPTs”) Materials, Royalty, Re-charge of expenses paid and received and Corporate Management Fee. These transactions are in the ordinary course of business and are on an arm’s length basis. Material terms of the contracts/arrangements/ Terms and Conditions for the transaction are in ordinary course transactions of business and on arm's length basis, which is same for the entire 3M Companies throughout the world. Details are given in Annexure G to the Report of the Directors. Duration of these RPTs have been continued from These transactions have been undertaken since inception of the past the Company from time to time depending on needs of business. The value of each type of RPTs in the last two years This information forms part of the notes to the audited financial statements for the FY 2014 -15 Estimated Monetary value of such RPTs For the FY 2014-15, the value of such RPTs are provided in the Notice at item No.10 and in the notes to the audited financial statements for the FY 2014-15 Whether the transactions have been approved by the Yes, the proposed RPTs are in accordance with the RPTs Policy Audit Committee of the Company. Any other Information relevant or important for the None. Members to make a decision on the proposed transactions. The proposed RPTs are in ordinary and normal course of business and on Arms' Length basis and play a significant role in the Company's business operations and accordingly the Board recommends the Special resolution set forth in item No.10 of the Notice for the approval of the Members in terms of Clause 49(VII)(E) of the Listing Agreement. None of the Directors or Key managerial Personnel of the Company except Mr. Albert C Wang, Mrs. Sadhana Kaul, Mr. Manuel B Pardo, Mr. Ramesh Ramadurai, Mr. Amit Laroya and Mr. B.V. Shankaranarayana Rao (being Nominees of 3M Company, USA on the Board of the Company) and their relatives may be deemed to be concerned or interested, directly or indirectly, in this Resolution. The Members' approval is solicited for the resolution at Item No.10 of the accompanying Notice as Special Resolution. Your Board recommends the Resolution for your approval. Item 11 The Company is the flagship listed Company of 3M Company, USA in India. 3M Company, USA holds 75% equity stake in the Company. 3M Company, USA is a diversified technology company with a global presence in the following businesses: Industrial; Safety and Graphics; Electronics and Energy; Health Care; and Consumer. 3M is among the leading manufacturers of products for many of the markets it serves. Most 3M products involve expertise in product development, manufacturing and marketing and are subject to competition from products manufactured and sold by other technologically oriented companies. 3M India Limited manages its operations in five (5) operating business segments: Industrial; Safety and Graphics; Energy; Health Care; and Consumer. 3M's five business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. The Company has three Manufacturing Plants and a nationwide sales and branch network in India. 37


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    NOTICE TO THE MEMBERS 3M India Limited The Company being a part of 3M conglomerate, has exclusive / sole rights to carry out the Group's business within India and accordingly, has access to Group's synergies, state of art products and technologies, competencies and “3M” brand name which are very critical and essential to carry out its business operations more efficiently in an increasingly globalized and competitive scenario. As a part of its regular business, the Company purchases, avails/renders services from/to 3M Company, USA at arm's length basis. The Audit Committee at the meeting held on March 27, 2015 has reviewed and after due consideration, accorded omnibus approval for the estimated value transactions mentioned in the Item No. 11 of the Notice for the year 2015-16 (estimated) . An analysis of all the Related Party Transactions(RPTs) estimated / to be entered into by the Company during the year for the year 2015-16(estimated) and the basis of charge was undertaken through a third party professional firm. The Audit Committee upon review of such analysis, is of the view that all these RPTs by the Company are at Arm's Length basis. 3M Company, USA is a Holding Company (Promoter) of the Company and is a “Related Party” as per the definition under Section 2(76) of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered into with the stock exchanges. The Securities and Exchange Board of India (SEBI) vide Circular No. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014 and CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 has amended Clause 49 (VII) of the Equity Listing Agreement with effect from October 1, 2014.Under the said amendment, all Related Party Transactions (RPTs) shall require approval of the shareholders by a special resolution. The said amendment further provides definition of the term “Material” as follows: “A transaction with a related party shall be considered material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual turnover as per the last audited financial statements of the company.” As per the said provisions of Clause 49, based on past trend, the transactions as described hereunder are likely to exceed 10% of the annual turnover of the Company as per the last audited financial statements of the Company(2014-15) and may exceed the materiality threshold as prescribed under Clause 49. Thus, in terms of Clause 49, these transactions would require the approval of the members by way of a Special Resolution. As per Clause 49(VII) of the Listing Agreement, all entities falling under the definition of related parties shall abstain from voting on the resolution and accordingly, the promoters will not vote on Item No.10. Particulars Information Name of the Related party 3M Company, USA Nature ofrelationship Holding Company (Parent)of the Company Name of Director(s) or key Managerial personnel who None except Mr. Albert C Wang, Mrs. Sadhana Kaul, Mr. Manuel is related, if any, B Pardo, Mr. Ramesh Ramadurai, Mr. Amit Laroya and Mr. B.V. Shankaranarayana Rao (being Nominees of 3M Company, USA on the Board of the Company) Nature and Particulars of transactions with 3M Income from Contract Research, Sale of Goods, Purchases of Company, USA (“RPTs”) Materials, Royalty, Re-charge of expenses paid and received and Corporate Management Fee. These transactions are in the ordinary course of business and are on an arm's length basis. Material terms of the contracts/arrangements Terms and Conditions for the transaction are in ordinary course /transactions of business and on arm's length basis, which is same for the entire 3M Companies throughout the world. Details are given in Annexure G to the Report of the Directors. Duration of these RPTs have been continued from the These transactions have been undertaken since inception of the past Company from time to time depending on needs of business. The value of each type of RPTs in the last two years This information forms part of the notes to the audited financial statements for the FY 2014-15 Estimated Monetary value of such RPTs The Company adopts April-March as its financial year. Accordingly, the current financial year FY 2015-16 has just begun for the Company. Considering the business phenomenon being dynamic, and given the fact that the Company is seeking the approval of the Members in midst of the current financial year, the Company expects the level of transactions for the year 2015- 16 with 3M Company, USA to be above the Materiality threshold as prescribed under Clause 49 of the Listing Agreement. 38


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    NOTICE TO THE MEMBERS 3M India Limited Particulars Information Whether the transactions have been approved by the Yes, the proposed RPTs are in accordance with the RPTs Policy of Audit Committee the Company. Any other Information relevant or important for the None. Members to make a decision on the proposed transactions. The proposed RPTs are in ordinary and normal course of business and on Arms' Length basis and play a significant role in the Company's business operations and accordingly the Board recommends the Special resolution set forth in item No.11 of the Notice for the approval of the Members in terms of Clause 49(VII)(E) of the Listing Agreement. None of the Directors or Key Managerial Personnel of the Company except Mr. Albert C Wang, Mrs. Sadhana Kaul, Mr. Manuel B Pardo, Mr. Ramesh Ramadurai, Mr. Amit Laroya and Mr. B.V. Shankaranarayana Rao (being Nominees of 3M Company, USA on the Board of the Company) and their relatives may be deemed to be concerned or interested, directly or indirectly, in this Resolution. The Members' approval is solicited for the resolution at Item No.11 of the accompanying Notice as Special Resolution. Your Board recommends the Resolution for your approval. Place: Bengaluru By Order of the Board Date : May 29, 2015 V. Srinivasan Company Secretary ACS-16430 39


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    REPORT OF THE DIRECTORS 3M India Limited To the Members of 3M India Limited, Your Directors have pleasure in presenting to you their 28thAnnual Report of the Company with the Audited Accounts for the year ended March 31, 2015. Your Company is presenting the Report for the year 2014-15 as prescribed under Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, with provisions relating to, and matters to be contained in the Board's Report. FINANCIAL RESULTS / PERFORMANCE AND STATE OF AFFAIRS Following are the working results:(Rs. in Lakhs) For the year ended For the year ended %age March 31,2015 March 31,2014 Increase(+)/ Particulars (12 Months) (12 Months) Decrease(-) (Audited) (Audited) Total Income(excluding excise duty) 185,477.60 176,228.57 +5.25 Of which - Export Sales 3,942.92 2,902.31 +35.85 - Other Income 1,447.84 1,994.29 27.40- Less : Expenditure 163,718.62 163,144.31 +0.35 Profit before Interest and Depreciation 21,758.98 13,084.26 +66.30 Less : Interest 342.27 1,417.17 -75.85 Less : Depreciation 4,960.49 4,760.40 +4.20 Profit before Taxation 16,456.22 6,906.69 +138.26 Less: Provision for Taxation 5,622.06 2,607.67 +115.60 Profit after Taxation 10,834.16 4,299.02 +152.01 Your Company commenced the year 2014 with prudence and caution, realigning initiatives and businesses to adapt to the reduced vibrancy of the Indian economy. Your Company continues to repose faith in the fundamentals and strong potential of the economy. Close monitoring by the Reserve Bank of India, softening of commodity prices and new initiatives by the Government seem to have helped in mitigating general inflation though food inflation remained at higher levels. For most part of the year the external environment continued to lack buoyancy while manufacturing sector recovery was at a modest pace. The Company continues to make active efforts to reach its products to consumers. The focus during the year was to improve availability in a sustained manner in the secondary and tertiary towns. During the year, your Company continued to improve the planning process and the productivity of the sales force. Your Company is optimistic that the economy will recover and return to a higher growth trajectory that is in keeping with its true potential. All initiatives from the new Government indicate increased focus on reviving economic growth by redefining policies, “Make in India” to revive Manufacturing sector along with attracting Foreign investment, improving administration and infusing investments to create a robust infrastructure for economic activity. The political stability, the increased engagement with other countries, FDI liberalization in Railways and Defence and reform oriented initiatives in mining and Direct Benefit Transfer reflect the change underway. Your Directors' are satisfied that in the economic environment that prevailed during the year, your Company has kept its sight on the strategy to consistently deliver long term sustainable, productivity led profitable growth. Your Company has a strong leadership team which continues to focus on reinforcing the fundamentals of growth drivers and further improve operational efficiencies and rationalization of products portfolio. 40


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    REPORT OF THE DIRECTORS 3M India Limited In 2014, the Company focused on building winning portfolios, improving Sales and R&D productivity, reducing material cost and an overall sharper execution discipline. This resulted in a substantial increase in profitability. The Business Services group took over key customer facing activities that led to overall superior service standards. The Supply Chain of your Company continued leveraging economies of scale and ensured supply of quality materials and services at competitive prices. During the year, your Company also continued to develop local raw materials for business and continues to work to develop alternate vendors to reduce risks and deliver savings. Your Company created an empowered Lean Six Sigma (LSS) team which executed high impact growth, cost and cash programs to improve the overall efficiency of our core processes. The Company continues to benefit from its access to the 3M Group Research and Development and technical expertise, as well as the best practices available from the global network. Your Company achieved the following impactful business wins during the year under reference: INDUSTRIAL- (i) Industrial Retail business reached out to 10000 retailers selling our core industrial products, (ii) Industrial Adhesives and Tapes Division won an initial order of Fire Protection Products (FPP) for a high rise under construction building by a leading builder, (iii) Won Paint Replacement Film business at leading Original Equipment Manufacturers (OEMs) in Automotive Division, (iv) Won tenders from leading public sector oil companies in Advanced Materials Division. HEALTHCARE - (i) Won share for dressing products in leading corporate hospitals, (ii) Successfully renewed large contracts for locally manufactured products across the country, (iii) Successfully expanded e-commerce business including large number of orders from dentists, (iv) Improved direct presence in 200 small cities by expanding hospital coverage. CONSUMER - (i) Initiated product availability through e-commerce in the Home care division, (ii) Successfully placed high end mops at leading modern trade accounts. SAFETY & GRAPHICS - (i) Won tenders for matting from metro rail corporations, (ii) Expanded our direct reach to more than 3000 Small, Medium Enterprises (SMEs) in prioritized clusters, (iii) Continued to win business from Banking Financial Services Industry (BFSI) sector for signage and branding programs. ENERGY - (i) New win in large diameter pipeline coating opportunity with Scotchkote™ Fusion Bonded Epoxy powder, (ii) Won an order for locaters and markers from a major defence contractor. The Company registered an overall turnover growth of 5.25% at Rs. 185,477.60 Lakhs for the financial year ended March 31, 2015 compared to Rs. 176,228.57 Lakhs in the previous year. The Profit before Interest and Depreciation was at Rs. 21,758.98 Lakhs compared to Rs. 13,084.26 Lakhs for the previous year. The operating margin for the current year was at 11.73% compared to 7.42% for the last year. Profit before Tax was at Rs. 16,456.22 Lakhs compared to Rs. 6,906.69 Lakhs for the previous year. Profit after taxation was at Rs. 10,834.16 Lakhs compared to Rs. 4,299.02 Lakhs for the previous year. Lower material cost and interest, portfolio prioritization and expense productivity increased the profitability at all levels for the year under review. Export Sales was at Rs. 3,942.92 Lakhs for the year ended March 31, 2015 compared to Rs. 2,902.31 Lakhs in the previous year, an increase of 35.85%. The Industrial business grew by 6.69%; Health Care business grew by 16.69%: Safety and Graphics business grew by 8.13%; Consumer business grew by 8.26% and Energy business de-grew by 35.73%. The EPS (Basic and Diluted) of the Company for the year 2014-15 was Rs. 96.17 per share as compared to Rs. 38.16 per share in the previous year 2013-14. Detailed analysis of the performance has been discussed in the Management's Discussion and Analysis Section of the Annual Report. MATERIAL CHANGES AND COMMITMENTS There were no material changes and commitments which occurred, affecting the financial position of the Company between March 31, 2015 and the date on which this report has been signed. 41


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    REPORT OF THE DIRECTORS 3M India Limited CHANGE IN THE NATURE OF BUSINESS There were no changes in the nature of business during the year under review as prescribed in Rule 8(ii) of the Companies (Accounts) Rules, 2014. DIVIDEND AND TRANSFER TO RESERVES While significant progress has been made in driving profitability improvement in 2014 through portfolio actions, sustainable profitable volume growth remains an area of concern. This would need focused investment in improving our go to market models, enhanced branding as well as expenditure on consumer insights to drive new profitable products. As a result, it has been decided to conserve and retain the earnings and, therefore will not propose to carry to any Reserves during the year under review. CAPITAL INVESTMENTS Capital Investments during the year 2014-15 was at Rs. 1,471.70 Lakhs (Net of capital work-in-progress and capital advances) (2013-14: Rs. 4,758.98 Lakhs). MANAGEMENT DISCUSSION AND ANALYSIS A Management Discussion and Analysis Report is annexed herewith as "Annexure A". CORPORATE GOVERNANCE AND SHAREHOLDER INFORMATION A separate report on Corporate Governance along with a Certificate from a Practising Company Secretary regarding compliance to the Conditions stipulated under Clause 49 of the Listing agreement is annexed as "Annexure B". DETAILS OF BOARD MEETINGS DURING THE YEAR 2014-15 During the financial year April 01, 2014 to March 31, 2015, six (6) Meetings of the Board were held; on April 18, 2014, May 29, 2014, August 01, 2014, November 13, 2014, January 29, 2015 and March 27, 2015. The details of other committee meetings during the year 2014-15 are given in the Corporate Governance Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Ippocratis Vrohidis and Mr. Ashish Khandpur resigned with effect from August 1, 2014 as Non- Executive Directors' ? consequent upon taking up higher responsibilities within 3M Global. The Board of Directors at its meeting held on August 1, 2014 appointed Mr. Biren Gabhawala as an Additional Director ? categorized as Independent Director of the Company effective from August 5, 2014 for a period of five consecutive years, subject to the approval of the Members of the Company at the ensuing Annual General Meeting. As stated in the last year report, Mr. D.J. Balaji Rao, Chairman, Non-Executive Independent Director of the Company did not to ? seek re-appointment owing to his other commitments and retired as a Director at the conclusion of the General Meeting of the Company held on August 4, 2014. The Board elected Mr. B.S. Iyer, Non-Executive Independent Director as Chairman of the Board with effect from the conclusion of the Annual General Meeting of the Company held on August 4, 2014.The Board of Directors welcomes Mr. B.S. Iyer as new Chairman of the Board. Section 149 (10) of the Companies Act, 2013 provides that an Independent Director shall hold office for a term of up to five ? consecutive years on the Board. Further, Section 149 (13) of the Companies Act, 2013 states that the provisions relating to retirement of Directors by rotation shall not apply to the appointment of Independent Directors. Further, the Ministry of Corporate Affairs, Government of India, by a notification, has clarified that if a Company intends to appoint existing Independent Directors as Independent Directors under the Act, such appointment must be made expressly within one year from 1st April, 2014. At the Meeting held on March 27, 2015, the Company has complied with the provisions of the Companies Act, 2013 and the notification of the Ministry of Corporate Affairs, by appointing Mr. B.S. Iyer as an Independent Director under Section 149 of the Companies Act, 2013, from March 27, 2015 to March 31, 2016, subject to approval of the Members at this ensuing General Meeting of the Company. Mr. B.C. Prabhakar, Non-Executive, Independent Director of the Company, after serving the Board of the Company for more ? than eight (8) years, resigned with effect from the closing hours of March 27, 2015 due to his pre-occupation and other commitments. The Board of Directors at its meeting held on March 27, 2015: ? (i) Appointed Mr. Bharat D Shah as an Additional Director categorized as Independent Director of the Company effective from March 27, 2015 for a period of five (5) consecutive years, subject to the approval of the Members of the Company at the ensuing Annual General Meeting. 42


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    REPORT OF THE DIRECTORS 3M India Limited (ii) Appointed Mr. Ramesh Ramadurai and Mr. Manuel B Pardo as Additional Directors categorized as Non-Executive Directors of the Company effective from March 27, 2015 and they hold office up to the date of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The Board expresses its appreciation for the contributions and services rendered by Mr. Ippocratis Vrohidis and Mr. A s h i s h Khandpur during their tenure as Directors of the Company. The Board expresses its deep appreciation for the valuable contributions and services made by Mr. B.C. Prabhakar during his tenure as Director from December 2006 and as Chairman/Member of Committees of the Board to the progress of the Company. The Board of Directors welcomes Mr. Biren Gabhawala, Mr. Bharat D Shah, Mr. Ramesh Ramadurai and Mr. Manuel B Pardo to the Board. With effect from April 01, 2014, inter-alia, provisions of section 149 of Companies Act, 2013, has been brought into force. In terms of the said section read with section 152(6) of the Act, the provisions of retirement by rotation are not applicable to Independent Directors. Therefore, the Directors to retire by rotation have been ascertained on the date of this Notice and accordingly, Mr. Albert C Wang, Non-Independent Non-Executive Director will retire at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.The details of Mr. Albert C Wang are given in the Explanatory Statement set out at Item No. 2 of the Notice to the Annual General Meeting. The Board of Directors recommends his re-appointment. The details of Mr. B.S. Iyer, Mr. Biren Gabhawala, Mr. Bharat D Shah, Mr. Ramesh Ramadurai and Mr. Manuel B Pardo are given in the Explanatory Statement in respect of the Special Business set out at Item Nos. 4 to 8 of the Notice of Annual General Meeting pursuant to Section 102 of the Companies Act, 2013. The Board of Directors recommends their respective Appointments. Mr. Amit Laroya, Managing Director, Mr. B.V. Shankaranarayana Rao, Whole-time Director, Mr. Sameer Agarwal, Chief Financial Officer and Mr. V. Srinivasan, Company Secretary & Compliance Officer and Treasurer are Key Managerial Personnels of the Company during the period under report. COMPOSITION OF AUDIT COMMITTEE As on March 31, 2015, the Audit Committee of the Company consists of three (3) Non-Executive Independent Directors and one (1) Non-Executive Director and all of them have financial and accounting knowledge. The members of the Committee are Mr. Biren Gabhawala, Mr. B. S. Iyer (Chairman up to August 4, 2014), Mr. Bharat Shah and Mr. Manuel B Pardo. Mr. Biren Gabhawala is the Chairman of the Audit Committee from August 5, 2014. The Board has accepted the recommendations of the Audit Committee during the year under review. NOMINATION AND REMUNERATION COMMITTEE POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and for other employees and their remuneration. The same has been disclosed in the website at http://solutions.3mindia.co.in/wps/portal/3M/en_IN/about-3M/information/corporate/financial- facts/summary/.The Composition, criterial for selection of Directors and the Terms of Reference of the Nomination and Remuneration Committee is stated in the Corporate Governance Report. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has also established an effective vigil mechanism by way of this Business Conduct Concern Reporting Policy (Whistle blower Policy) for upholding 3M's Code of Conduct The details of the Policy is stated in the Corporate Governance Report and also posted on the website of the Company http://solutions.3mindia.co.in/wps/portal/3M/en_IN/about- 3M/information/corporate/financial-facts/summary/. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY The Company's management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. 3M globally is aligned to Company's internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission(COSO) in Internal Control — Integrated Framework (2013). The Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies. The Company, through its own Corporate Internal Audit Department, carries out periodic audits to cover all the offices, factories and key areas of business segments based on the plan approved by the Audit Committee and bring out any deviation to internal control procedures. The Internal Auditor functionally reports to the Audit Committee and administratively to the Managing Director. The observations arising out of audit 43


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    REPORT OF THE DIRECTORS 3M India Limited are periodically reviewed and compliance ensured. The summary of the Internal Audit observations and status of the implementation is submitted to the Audit Committee of the Board of Directors. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c)of the Companies Act, 2013: (a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; (c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the annual financial statements have been prepared on a going concern basis; (e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. INFORMATION ON THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURE: The Company does not have any Subsidiaries/Associates/Joint Venture. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as “Annexure C ”. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Vijayakrishna K.T, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as “Annexure D”. There were no qualifications by the Company Secretary in Practice in his Secretarial Audit report for the year ended March 31, 2015. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Information on Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as “Annexure E”. DEPOSITS During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS During the year under review, the Company has not given any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013. RISK MANAGEMENT POLICY The Company has framed a Risk management Policy which was approved by the Board pursuant to the requirement of Clause 49 of the Listing Agreement. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. 44


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    REPORT OF THE DIRECTORS 3M India Limited CORPORATE SOCIAL RESPONSIBILITY As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Innovation and Women Empowerment. These projects are in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith as “Annexure F ” including the reasons for not spending the full amount for the year 2014-15. RELATED PARTY TRANSACTIONS (RPTs) All Related Party Transactions (RPTs) that were entered into during the financial year were on an Arm's Length Basis and were in the Ordinary Course of Business. All RPTs are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The p o l i c y o n R P Ts a s a p p r o v e d b y t h e B o a r d i s u p l o a d e d o n t h e C o m p a n y ' s w e b s i t e a t 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 exclusive / sole rights to carry out the Group's business within India and accordingly, has access to Group's synergies, state of art products and technologies, competencies and “3M” brand name which are very critical and essential to carry out its business operations more efficiently in an increasingly globalized and competitive scenario. As a part of its regular business, the Company purchases, avails/renders services from/to 3M Company, USA at arm's length basis. The Securities and Exchange Board of India (SEBI) vide Circular No. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014 and CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 has amended Clause 49 (VII) of the Equity Listing Agreement with effect from October 1, 2014.Under the said amendment, all RPTs shall require approval of the shareholders by a special resolution. The said amendment further provides definition of the term “Material” as follows: “A transaction with a related party shall be considered material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual turnover as per the last audited financial statements of the company.” As per the said provisions of Clause 49, based on past trend, the transactions with 3M Company, USA(Holding Company) are likely to exceed 10% of the annual turnover of the Company as per the last audited financial statements of the Company and may exceed the materiality threshold as prescribed under Clause 49. Thus, in terms of Clause 49, these transactions would require the approval of the members. The RPTs are necessary, normal to business, plays a significant role in the Company's business operations and also forms integral part of the Company's business. An analysis of all the RPTs entered into / by the Company and the basis of charge was undertaken through a third party professional firm. Accordingly, the Board recommends for the approval of the Members in terms of Clause 49(VII) (E) of the Listing Agreement. The Form No. AOC-2 is annexed herewith as “Annexure G”. ANNUAL BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, its Committee's and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. EMPLOYEE REMUNERATION AND DETAILS OF CERTAIN EMPLOYEES Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5(1)(2)&(3) of the Companies (Appointment & Remuneration) Rules, 2014, details / disclosures of Ratio of Remuneration to each Director to the median employee's remuneration is annexed herewith as “Annexure H”. As at March 31, 2015, the Company had employee strength of 1,461 personnel. Pursuant to section 197(12) of the Companies Act, 2013 and Rule 5(1) (2)&(3) of the Companies (Appointment & Remuneration) Rules, 2014,the Statement showing details of employees of the Company throughout the year and employees employed for part of the year who were in receipt of remuneration of Rs. 60 Lakhs or more per annum / Rs. 5 Lakhs or more per month is annexed herewith as “Annexure I.” DECLARATION FROM INDEPENDENT DIRECTORS The Company has received necessary declaration from each Independent Director of the Company viz., from Mr. B.S. Iyer, Mr. Biren Gabhawala and Mr. Bharat D Shah under Section 149(7) of the Companies Act, 2013, that they meet the criteria of their Independence laid down in Section 149(6) of the Companies Act, 2013. The same is annexed herewith as “Annexure J”. 45


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    REPORT OF THE DIRECTORS 3M India Limited STATUTORY AUDITORS Messrs. Lovelock & Lewes, Chartered Accountants, Statutory Auditors of the Company, Bengaluru, having Registration No. 301056E retire at the ensuing Annual General Meeting and are eligible for re-appointment.They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. COST AUDIT Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, dated December 31, 2014 issued by Ministry of Corporate Affairs (MCA), the cost audit records maintained by the Company in respect of the products covered as per the above dated notification issued by MCA is required to be audited by an Cost Accountant. Accordingly, the Board of Directors of the Company at its meeting held on May 29, 2015 had on the recommendation of the Audit Committee, approved the re-appointment and remuneration 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 year ended March 31, 2016 on an remuneration of Rs. 400,000/- plus service tax as applicable and out of pocket expenses at actuals. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking Member's ratification for the remuneration payable to Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru is included in the Notice convening the Annual General Meeting. Disclosure on cost audit: For the financial year ending March 31, 2014, the due date of filing the Cost Audit Report submitted by Messrs. Rao, Murthy & Associates, Cost Accountants, Bengaluru, was September 27, 2014 and the same was filed with the Ministry of Corporate Affairs on September 26, 2014. OTHER DISCLOSURES ∞ The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-2015: No of complaints received: NIL No of complaints disposed off: NIL ∞ There were no qualifications by the Auditors in their report forming part of this financials for the year ended March 31, 2015. ∞ During the year under review, the Company has not bought its own shares nor has given any loan to the employees (including KMPs) of the Company for purchase of the Company shares. ∞ During the year under review, no Commission or Remuneration was paid to the Executive Directors from Holding / Subsidiary Companies. ∞ During July 2012 the Company had obtained recognition for its R&D Lab facility in Bengaluru from Department of Scientific Research (DSIR) which was valid till March 31, 2015. In the light of no major Capex plan for this R&D lab facility in the coming years coupled with no significant tax benefits that can be availed by the company by renewing the recognition for further period , the Company has opted not to renew the DSIR recognition beyond March 31, 2015. LISTING WITH STOCK EXCHANGES The Company has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed. 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, 2015 was Rs. 11,26,50,700 (divided into 1,12,65,070 equity shares of Rs. 10 each).During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. ENVIRONMENT, HEALTH AND SAFETY Compliance with relevant regulations and 3M Global Environmental , Health and Safety policies is an integral part of the Company's operating philosophy and the company stands committed to continually improve on these objectives. There was a considerable focus on improving Environment, Health and Safety during the period under review by the Company. 46


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    REPORT OF THE DIRECTORS 3M India Limited 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 continuously endeavors to improve on environmental management to minimize the environmental impacts. All plants have sewage / waste water treatment plants and the treated water is recycled for horticulture with in the facilities. The plants have set up various measures to reduce and reuse water where ever possible. The plants have also installed rain water harvesting systems to divert the rain water for ground water recharging. With the approval from local Pollution Control Boards, the plants have now started sending industrial waste to local cement companies to generate energy instead of in-house incineration and thereby reducing overall carbon foot prints by saving the part of the coal consumption of cement plants. Every year, as part of World Environmental day initiative, the plants take up various environmental awareness programs including tree plantation in plants as well as public places. Health and Safety: All three (3) manufacturing plants have health and safety management systems certified to OHSAS 18001: 2007. All plants have dedicated safety officers. Plant Safety committees, which include shop floor employees and chaired by Plant managers, are also in place and meet regularly to review issues impacting plant safety and employees health. High risk operations are controlled through the hierarchy of controls identified through 3M's risk prioritization matrix initiative. Key measures like conducting training programs on various health and safety issues including dealing with epidemics, ergonomics, industrial hygiene, process safety management, machine guarding, work safety, road safety, first-aid, manual handling etc. have been implemented. Regular health checkup of the plant employees is carried out. Every year plants celebrate safety month in March and conduct various safety awareness programs like safety quiz, drawing competition, slogan and hazard identification competition. All plants have full-fledged emergency communication and management systems including fire alarms, fire hydrants and fire sprinklers. Regular mock drills are conducted to check the adequacy and preparedness of these systems. The plants have a well-equipped first aid rooms to attend to immediate medical needs. In Sept 2014, Electronic city, Bengaluru and Ahmedabad plants received certificate of appreciation from National Safety Council of India for the strong safety record. AWARDS AND RECOGNITION ?3M India's Infection Prevention Division was awarded the prestigious Sterilization Services - Business Leadership Award at the Hospital Management Conference & CIMS Healthcare Awards instituted by UBM Medica at Mumbai. The award re-iterates. 3M Healthcare leadership in the Sterilization Assurance and Monitoring segment and recognizes the efforts 3M has invested in training & educating customers and upgrading healthcare practices across the country. ?The Company's Electronics City plant received the 2014 Supplier Quality Excellence award from General Motors. This global award from General Motors recognizes the best suppliers around the world who fulfill the company's most stringent quality requirements. This is another feather in the cap for 3M India's manufacturing capability & quality with recognition from one of the top automotive companies in the world. ?Two 3M products for the retail market - 'Scotch® Magic Tape Donut dispenser pack' and '3M Auto Speciality products - DIY' recently won the Indiastar 2014 award instituted by Indian Institute of Packaging for excellence in packaging design. The Indiastar win qualifies these products for entry into the Asiastar and Worldstar packaging design awards. This is the second time that 3M India has participated and won such an award. Our packaging designs competed with a record 552 entries that were received this year. ?The Company's'Bengaluru and Ahmedabad Plants received the "Certificate of Appreciation" from the National Safety Council of India for demonstrating consistent safety performance during the period 2010 to 2012. ?Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) recognized 3M India as one of its top 6 suppliers who have helped the automotive company succeed in 2014-15. The certificate of appreciation from Honda acknowledged 3M India's excellent performance in meeting delivery targets during the year 2014-15. In addition recognition also came from Honda Cars India for 100 % delivery performance during the period December 2014- March 2015. ?3M India's Commercial Graphics Division won “Emerging Partner of the Year Award 2014” from top restaurant franchisee Company Yum Brands. ?3M India's plant in Ahmedabad received prestigious recognition from the CEO of 3M Corporation, USA for completing 730 days consecutively without a lost time injury or illness incident. ACKNOWLEDGEMENT The Board wishes to place on record its appreciation to all employees in the Company, for their sustained efforts and immense contributions to the good levels of performance and growth that your Company has achieved during the year. The Board also acknowledges the continued support and co-operation received from 3M Company, USA. The Directors express their gratitude to the Central Government and the State Governments of Karnataka, Maharashtra and Gujarat for the support given to the Company. The Directors also thank all customers, dealers, suppliers, banks, members and others connected with the business of the Company for their co-operation. On behalf of the Board of Directors Amit Laroya B.V. Shankaranarayana Rao Place: Bengaluru Managing Director Whole-time Director Date: May 29, 2015 DIN:00098933 DIN: 00044840 47


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    ANNEXURE 'A ' TO REPORT OF THE DIRECTORS 3M India Limited MANAGEMENT DISCUSSION AND ANALYSIS REPORT ________________________________________________________________________ Cautionary Statement: Members and Investors are cautioned that the discussion in this section of the Annual Report may contain statements that involve risks and uncertainties. Forward-looking statements mentioned may involve risks and uncertainties that could cause results to differ materially from those projected. Consequently, actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no obligation to update or revise any forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. ___________________________________________________________________________________________________________ THE COMPANY The Company is the flagship listed Company of 3M Company, USA in India. 3M Company, USA holds 75% equity stake in the Company and is a diversified technology and science company with a global presence in the following businesses: Industrial; Health Care; Consumer; Safety and Graphics; and Energy and is among the leading manufacturers of products for many of the markets it serves. Most of its products involve expertise in product development, manufacturing and marketing, and are subject to competition from products manufactured and sold by other technologically oriented companies. The Company has manufacturing facilities in India at Ahmedabad, Bengaluru, Pune and has a R&D Center in Bengaluru. As at March 31, 2015, the Company had employee strength of 1,461 personnel. The Company managed its operations in five (5) operating business segments: Industrial; Health Care; Consumer; Safety and Graphics; and Energy. The Company's five business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. These segments have worldwide responsibility for virtually all 3M product lines. 3M products are sold through numerous distribution channels, including directly to users and through numerous wholesalers, retailers, converters, distributors and dealers in a wide variety of trades in many countries around the world. The Management of the Company believes that the confidence of wholesalers, retailers, converters, distributors and dealers in 3M and its products is a confidence developed through long association with skilled marketing and sales representatives and has contributed significantly to 3M India's growth and its position in the marketplace. GLOBAL ECONOMIC OVERVIEW Global growth is projected to reach 3.5% in 2015, compared to 3.4% in 2014. There is a divergence in the composition of growth, with advanced economies growing at 2.4% in 2015 versus 1.8% in 2014, and emerging market and developing economies growing at 4.3% in 2015 versus 4.6% in 2014. The growth is moderate and uneven, owing to complex forces shaping the world economy as explained ahead. The legacies from both the financial crisis and the Euro crisis are still highly visible across several countries leading to high debt and slowdown in spending. Potential growth is declining in both advanced and developing economies. Decline in oil prices is leading to a large reallocation of real income from net oil exporters to net oil importers. This is leading to an increase in spending in oil importing countries, while for oil exporters, this is leading to declining financial resources. The exchange rate movements, including the appreciation of dollar and the depreciation of Yen and Euro are also effecting exports and imports across countries. INDIA ECONOMIC OVERVIEW India has emerged with an encouraging economic outlook, amidst the mood of pessimism and uncertainties that overcome a number of advanced and emerging economies. India's GDP growth is expected to touch 7.8% in the year ending March 2016, up from the estimated 7.4% growth in 2014-15. Going ahead, it is slated to average 8% growth year on year. Notwithstanding the revised GDP estimates, the balance of evidence counsels in favour of viewing India as a recovering rather than surging economy. India's IIP is currently seeing low growth. In March, Industrial production grew 2.1% year on year, the weakest in five months, as consumer goods output contracted again after a short-lived recovery in February. On a positive side, investment goods output continues to expand, as businesses are scaling up production on anticipation of stronger demand as the economy gathers pace. The improving investment sentiment along with lower inflation should help rebound investment activity, likely pushing India's overall growth. Rupee depreciation continues, but is slower compared to peers. 48

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