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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 is the flagship listed Company of 3M Company, USA in India. 3M Company, USA holds 74.99% 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 technology, 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 the Corporate Office and Customer Innovation Center (R&D Center) in Bengaluru. As at March 31, 2019, the Company had employee strength of 1377 personnel. The Company managed its operations in five (5) operating business segments: Industrial: Health Care: Consumer: Safety and Graphics: and Energy. The Companys 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.
3M products are sold through numerous distribution channels, including directly to users via 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 of 3M and its products has been developed through long association skilled marketing & sales teams and this confidence has contributed significantly to 3M Indias growth and its position in the marketplace.
Global Economic Overview
Global economy continues to moderate as the recovery in trade and manufacturing activity loses steam. Trade tensions continue to stay elevated. Borrowing costs for emerging markets & developing economies have increased. A strengthening US dollar heightened financial market volatility. Fluctuating energy prices have led to global growth contracting to 3.0% in 2018 vs 3.1% the year before. The Global economy is expected to further contract to 2.9% in 2019 with bulk of the growth coming in from Asian markets.
India Economic Overview
India economy grew 7.2% in 2018 and is expected to grow at 7% in 2019. Growth is led by consumption & investment. India is expected to continue growing at 6.5-7% over next 5+ years. Manufacturing & Automotive sectors are in the midst of severe headwinds. However, Consumer, Health Care, Infra markets are performing strongly. India IIP was pegged at 5.2% in 2018. 2019 is seeing the IIP go down to 4.4%. Core Sector slow down, followed by falling prices is a concern in the near term. Inflation has been hovering around the 2-3% mark - well below the RBI mandate of 4-5%
Some of the key trends in the market are;
> Continued consumption trend: With the increasing income in the middle class, we are also seeing a larger use of life style products with Indian consumers.
> Increased focus on sustainability: We are seeing a rising focus in the government as well as greater awareness among consumers on green consumption practices, air & water quality, reducing the carbon footprint & single use plastics, etc.
> Emerging digital go-to-market-models: Ecommerce and digital go-to-market strategies are helping companies better target their customers, make themselves more relevant and also expand their reach more efficiently into Tier II & III towns.
> Increased FDI in India: Several industries have benefitted from initiatives like the Make in India campaign, especially Electronics, Automobiles, Defence and SME sectors. Increased manufacturing in India is also helping improve the Tier I and Tier II supply market in India.
> Increased spending on urban infrastructure: City Infrastructure will continue to stay in focus to meet the needs of rapid urbanization and quality of life
> National Health Care: The Govt has taken several measure towards providing quality healthcare access to all citizens. Although initial days, the policy will see its maturing over the coming months before the healthcare dream is realized.
RESULTS OF THE OPERATIONS OF THE COMPANY
The Company on a standalone basis registered an overall turnover growth of 8.85% at Rs. 280,875.97 Lakhs for the financial year ended March 31, 2019 compared to Rs. 258,039.60 Lakhs in the previous financial year. The Profit before Interest and Depreciation is Rs. 54,042.78 Lakhs compared to Rs. 52,342.69 for the previous financial year. Profit before Tax is Rs. 49,745.93 Lakhs compared to Rs. 47,968.30 Lakhs for the previous financial year. The operating margin for the current year is 19.02% compared to 19.95% for the previous financial year. Total Comprehensive Income is Rs. 32,286.31 Lakhs compared to Rs. 31,027.31 Lakhs for the previous financial year. Portfolio prioritization, operational productivity and lower material costs increased the profitability at all levels for the financial year under review. Export Sales is Rs. 2,696.81 Lakhs for the financial year ended March 31, 2019 compared to Rs. 1,627.92 Lakhs in the previous financial year, an increase of 65.66%, due to increase in demand in global market.
The other income is Rs. 3,283.16 Lakhs for the financial year 2018-19 compared to Rs. 4,361.54 Lakhs for the previous financial year 2017-18.
Cost of Goods sold:
The % of cost of raw material consumed as against sales for the financial year 2018-19 is higher by 0.66% at 52.32% as against 51.66% for the previous financial year 2017-18, due to product mix and increase in foreign currency exchange rate.
Employee Benefits Expense:
Employee cost as a % of sales for the year 2018-19 stood at 10.59 % (previous financial year was 12.35%) at Rs. 30,106.15 Lakhs (previous financial year: Rs. 32,407.88 Lakhs). Sales per employee have improved by 7.19% to Rs.206.36 Lakhs (no. of employees 1,377) in the current financial year 2018-19 from Rs. 192.52 Lakhs (no. of employees 1,363) for the previous financial year 2017-18.
The interest cost for the financial year 2018-19 is Rs.109.18 Lakhs compared to Rs. 194.07 Lakhs in the previous financial year 2017-18. The interest cost is on account of lease rentals of vehicles and office equipment.
The Company earned Rs. 2,685.21 Lakhs on the surplus during the financial year 2018-19 when compared to Rs. 3,585.56 Lakhs during the financial year 2017-18 by keeping the funds in deposits with the Banks.
Earnings per Share (EPS):
The EPS (Basic and Diluted) of the Company for the financial year 2018-19 was Rs. 286.72 per share as compared to Rs. 275.66 per share in the previous financial year, a growth of 4.01%.
The Authorized/Issued/Subscribed and Paid-up Capital as at March 31, 2019 is Rs. 11,26,50,700 (divided into 1,12,65,070 equity shares of Rs. 10 each). During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.
Reserves & Surplus:
Entire profit of Rs. 32,286.31 Lakhs is retained in profit and loss account for the year ended March 31, 2019. The Reserves & Surplus is Rs. 184,826.52 Lakhs including the current financial year retained profit.
The total shareholder funds increased to Rs. 185,953.03 Lakhs as at March 31, 2019 from Rs. 153,666.72 Lakhs as of the previous financial year 2017-18 end, representing a growth of 21.01% mainly because of retained profits of the current year.
The depreciation charge for the current year is higher at Rs. 4,187.67 Lakhs as against a charge of Rs. 4,180.32 Lakhs of previous financial year 2017-18 due to new investments.
Fixed Assets-Capital Expenditure:
The gross Fixed Assets as at March 31, 2019 was Rs. 43,145.90 Lakhs as compared to Rs. 41,093.61 Lakhs of previous financial year 2017-18. Capital Investments during the year 2018-19 were at Rs. 3,084.21 Lakhs (Net of capital work-in-progress and capital advances) (2017-18: Rs. 1,641.10 Lakhs) an increase of 87.93% year on year.
Inventory as at March 31, 2019 amounted to Rs. 37,918.19 Lakhs as against Rs. 34,728.93 Lakhs of previous financial year 2017-18. The inventory ratio has decreased to 89 days as at March 31, 2019 from 91 days of previous financial year 2017-18.
Trade Receivables as at March 31, 2019 amounted to Rs. 54,613.88 Lakhs as against Rs. 52,963.65 Lakhs of previous financial year 201718. The debtors turnover ratio is 70 days (previous financial year: 66 days).
Cash and Bank balances:
The total balance of cash and bank balances as at March 31, 2019 was Rs. 47,039.04 Lakhs as compared to Rs. 78,931.24 Lakhs as at March 31, 2018.
Current Ratio: 2.48 Debt Equity Ratio: 0.73%
Overall analysis of the profit and loss (Standalone):
Year Ended March 31, 2019
Year Ended March 31, 2018
|Rs. in Lakhs||%||Rs. in Lakhs||%|
|Revenue from operations||280,875.97||98.84||258,039.60||98.34|
|Other income, net||3,283.16||1.16||4,361.54||1.66|
|Cost of Materials consumed||86,741.34||30.53||81,163.29||30.93|
|Purchases of stock-in-trade||63,315.23||22.28||53,970.94||20.57|
|Changes in inventories of finished goods, work-in-progress and stock-in -trade||(1,387.67)||(0.49)||(1,999.10)||(0.76)|
|Employee benefits expense||30,106.15||10.59||32,407.88||12.35|
|Profit before Finance costs and Depreciation||54,042.78||19.02||52,342.69||19.95|
|Depreciation and amortization expense||4,187.67||1.47||4,180.32||1.59|
|Profit before Tax||49,745.93||17.51||47,968.30||18.28|
|Profit for the year||32,299.08||11.37||31,053.56||11.83|
|Items that will not be reclassified subsequently to profit or loss||(12.77)||(0.01)||(26.25)||(0.01)|
|Total comprehensive income for the year||32,286.31||11.36||31,027.31||11.82|
Segment wise performance:
The Industrial business grew by 4.90%; Health Care business grew by 6.60%: Safety and Graphics business grew by 7.91%; Consumer business grew by 11.22% and Energy business grew by 36.01%.
(A) INDUSTRIAL BUSINESS:
The Industrial segment serves a broad range of markets, such as automotive original equipment manufacturer (OEM) and automotive aftermarket (auto body shops and retail), electronics, appliance, paper and printing, packaging, food and beverage, and construction. Industrial products include tapes, a wide variety of coated, non-woven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, closure systems for personal hygiene products, acoustic systems products, and components and products that are used in the manufacture, repair and maintenance of automotive, marine, aircraft and specialty vehicles. Major industrial products include vinyl, polyester, foil and specialty industrial tapes and adhesives; Scotch Masking Tape, Scotch Filament Tape and Scotch Packaging Tape; packaging equipment; 3M VHB Bonding Tapes; conductive, low surface energy, sealants, hot melt, spray and structural adhesives; reclosable fasteners; label materials for durable goods; and coated, nonwoven and microstructured surfacefinishing and grinding abrasives for the industrial market. Other industrial products include fluoroelastomers for seals, tubes and gaskets in engines.
Major transportation products include insulation components, including Thinsulate Acoustic Insulation and components for catalytic converters; functional and decorative graphics; abrasion-resistant films; adhesives; sealants; masking tapes; fasteners and tapes for attaching nameplates, trim, moldings, interior panels and carpeting; coated, nonwoven and microstructured finishing and grinding abrasives; structural adhesives; and other specialty materials. In addition, 3M provides paint finishing and detailing products, including a complete system of cleaners, dressings, polishes, waxes and other products.
Rs. in lakhs
|12 Months Ended 31.03.19||12 Months Ended 31.03.18|
|Financial Highlights||Profit Before Interest & Tax||19,540.02||19,917.21|
|Highlights|| Automotive & Aerospace division had a turbulent year marked by automotive build slowdown across PV & 2W segments and rising dealership inventories because of change in regulations (Emissions & ABS), rising interest rates, insurance and fuel costs and natural calamities like the floods in Kerala and Kodagu.|
| The OEM segments (Autocare and Collision Repair) of Automotive Aftermarket Division saw a healthy growth primarily due to new product sales and new customer acquisitions despite the challenges faced because of passenger car sales slow-down.|
| Industrial Adhesive and Tapes Division continued their focus on Passive Fire Portfolio, driving relevance in Construction and strengthened Converter Business Model, increasing penetration in Transportation & Metal working market.|
| The Abrasive Systems Division have reached out to more end customers with their productivity improvement solutions which has reduced lead times, improved output quality, controlled cost per component etc., spanning sectors like Automotive, Auto Comp., Metal Fabrication, Cutting tools, Gear grinding, Aerospace, Windmill segments etc. The Sales team has been equipped with digital tools (3M Sales Aid) to prove & implement Value added processes for productivity improvement.|
| The Company gained share in the Advanced Materials markets with its differentiated offerings from polymer solutions like Polymer Processing Additives for packaging industry, Engineered Specialty Additives for oil and gas industry and friction shims for automotive industry from its ceramics portfolio.|
| Industrial & Safety Market Center made significant strides in the year by driving channel sales growth through a sharp focus on Key Accounts & Long-Tail customers.|
(B) HEALTH CARE BUSINESS:
Our Health Care business segment serves markets that include large multi-specialty hospitals and small clinics, dental and orthodontic practitioners, processed food manufacturers and pharmaceutical companies. Our offerings include medical and surgical supplies, medical devices, skin & wound care and infection prevention products & solutions, drug delivery systems, dental and orthodontic products and food safety products.
Rs. in lakhs
|12 Months Ended 31.03.19||12 Months Ended 31.03.18|
|Financial Highlights||Segment Revenue||42,705.35||40,062.92|
|Profit Before Interest & Tax||8,429.73||7,779.21|
|Highlights|| 3M Healthcare continues to help emerging hospitals adhere to standards and guidelines that enable them to get accreditation and certification to meet NABH standards with a seamless, cost effective and end-to-end solution.|
| Focused Market development through an online education platform with local and regional content to drive market expansion and demand generation.|
| 3M Healthcare has been continuing efforts in digital space. Sales through e-commerce for both medical and dental products have gained traction and we are seeing continued year on year growth.|
| Improving coverage efficiency through restructured organization structure.|
(C) SAFETY AND GRAPHICS BUSINESS:
The Safety & Graphics business serves a broad range of markets that serve to increase the safety, security & productivity of people & improves facility design, aesthetics, hygiene, etc. Major product offerings include personal protection products; traffic safety & security products, border security solutions; public safety & identity management solutions; commercial graphics sheeting & systems; architectural surface & lighting solutions; cleaning & protection products for commercial establishments, etc Personal protection products include maintenance-free & reusable respirators, personal protective equipment, head & face protection, body protection, hearing protection & protective eyewear. In traffic safety & security, 3M provides reflective sheeting used on highway signs, vehicle license plates, construction work-zone devices, pavement marking systems, electronic surveillance products, films that protect against counterfeiting & reflective materials that are widely used on apparel, footwear & accessories, enhancing visibility in low-light situations. Traffic safety & security also provides remote people-monitoring technologies used for offender-monitoring applications. The portfolio also includes RFID tracking technologies & Automatic Number Plate Recognition (ANPR). Major commercial graphics products include films, inks, digital signage systems & related products used to produce graphics for vehicles, signs & interior surfaces. Other products include spill-control sorbents; nonwoven abrasive materials for floor maintenance & commercial cleaning; floor matting, housekeeping chemicals, etc.
Rs. in lakhs
|12 Months Ended 31.03.19||12 Months Ended 31.03.18|
|Financial Highlights||Segment Revenue||71,318.68||66,091.17|
|Profit Before Interest & Tax||8,808.37||8,507.45|
|Highlights|| Government continues its efforts to invest heavily in transport infrastructure, specifically - National Highways, Expressways, Rural roads and several Industrial corridors. However, the Indian roads are not considered very safe as we contribute to almost 10% of global fatalities. Transportation Safety Division has been working closely with all stakeholders to reverse this trend. The division continues its growth path in the road safety space with many of its technological products such as Signages & Roadway materials using retro-reflective technology - Overhead signs, Cautionary & mandatory signs, Vehicle Marking Tapes, Solar RPMs, Flexible median markers, Delineators, Road pavement markers, etc. help promote safety on the Indian roads. The division continues to invest heavily in education & awareness of several road safety solutions to key stake holders by way of night demos, training programs including participation in both domestic and International trade shows.|
|Highlights|| Significant penetration has been made with cutting edge solutions for Smart Cities in the areas of urban mobility with Smart Variable Message Signs. The Smart Variable Message Signs provide real time, contextual & automated information to motorists & allow a host of smart sensors to be integrated into a single platform allowing better information dissemination, disaster management & traffic enforcement.|
| Personal Safety Division continues to drive education on the proper selection and usage of Personal Protection Equipment across all segments requiring attention for occupational health and safety. Pharmaceutical, Automotive, General Engineering and Chemical and several other sectors provide an opportunity for significant growth to the division. The division continues to increase its penetration into the SME segment through various awareness and contact programs and other onsite SME activation Programs. Divisions launch of Fall Protection products, Self- Contained Breathing Apparatus and other products provide further opportunity for growth with newer segments like Fire services.|
| In a bid to raise awareness among the Labour force on the importance of safety measures and proper equipment in the workplace, the Audhyogik Suraksha Rath (mobile industrial safety training van, in association with the Directorate General, Factory Advice Service & Labour Institutes (DGFASLI), Ministry of Labour and Employment) has so far trained close to 1 Lac Workers and visited close to 700 Industries. Over the next three years, the vans will cover one million industrial workers, raising awareness on industrial safety and health through training programs with the message: Safety First.|
| One of the major causes of deaths is falling from heights, and to train and raise awareness 3M has also launched 2 dedicated Training Vehicles for training workers on Fall Protection.|
| The division has signed an MOU with the Chest Foundation of India to establish a mutual collaboration that seeks to explore opportunities and provide awareness programs to the medical professionals in India.|
| Our Personal Safety Division also made significant contributions through awareness building and helping citizens get appropriate respirators during air quality concerns in several cities during the winter months.|
| Commercial Solutions Division (CSD) through their graphics and architectural market portfolios and cleaning workplace safety portfolio is focused on bringing change to every brand and every customer by creating unique "Brand experience" with the visual impact that it creates with its products and services. Several segments such as Retail, Banking, Hospitality, Railways, Metro rail, Airports, Commercial Offices, IT and ITES, Hotel, Restaurant and Catering (HORECA), Oil and Gas etc., found several solutions from Commercial Solutions division which helped them create a unique brand experience for their consumers. Some of the big brands of our country have gone ahead in refreshing their brand logo and outlet appearances in recent quarters which seen usage of CSD solutions.|
| Right from graphics to cleaning and work place solutions, this division is trying to touch every life. The division saw a lot of success in retail & office refurbishment, railway new trains & interior refresh, car personalization and styling along with new projects of outlet expansion banking and oil & gas segments.|
| CSD has also seen growth from geographical penetration to new territories and expansion of graphics manufacturers network across growing cities. Division continues to focus and invest heavily in training and educating end customers, dealers, applicators, graphics manufacturers through series of expertise delivery programs in these growing cities.|
(D) CONSUMER BUSINESS:
The Consumer segment serves markets that include consumer retail, modern trade, office retail and other emerging retail channels. The products in this segment include office supply products, stationery products, home care products and protective material products. Major consumer products include Scotch brand products, such as Scotch Magic Tape and Scotch Glue Stick; Post-it Products, such as Post-it Flags, Post-it Note Pads and Dispensers; home care products, including Scotch-Brite Scour Pads, Scotch-Brite Scrub Sponges, Scotch-Brite Microfiber Cloth products.
|12 Months Ended 31.03.19||12 Months Ended 31.03.18|
|Financial Highlights||Segment Revenue||30,348.57||27,286.70|
|Profit Before Interest & Tax||5,510.35||4,796.84|
|Highlights|| Focus on driving scouring business with new product launch of Silver Sparks and multi-pack drive in Modern Trade.|
| Launch of Command range of products in Modern Trade.|
| Launch of innovative products like Scotch-Brite Broom, Microfiber cloth and a range of household tapes including wall-safe tapes and student tape.|
| Focus on Air Quality products like respirators and AC Filters to address the air quality issues that Indian consumers face both in outdoor and indoor.|
| Continued growth in the office supplies channels with Post-it & Scotch range of products aimed at office workforce segment.|
| Accelerated growth in Modern Trade by partnering with Key Modern Trade customers for categories in Home Care, Stationery and Command range of products.|
| Distribution expansion program aimed at increasing availability of Home Care range of products in Tier B&C towns through partnership with wholesalers across the country.|
| Partnered with adjacent category & household brands for cross promotional activities thereby expanding household reach for our products.|
| Continued investment in the brands viz "Scotch-Brite", Post-It, Scotch and Command through various brand building activities in Mass Media, Digital Media and in Point of Sales.|
| Accelerated sales through ecommerce channel with focus on product portfolio, good digital content and on-line demand generation programs.|
(E) ENERGY BUSINESS:
Infrastructure Protection Products Division of 3M offers a comprehensive array of products that ensure effective protection against corrosion for a variety of installations and structures. While 3M Scotchkote Fusion Bonded Epoxy Powders and Scotchkote Liquid Epoxy Coatings offer protection for steel pipelines, associated fittings and structures used in the oil, gas, water, industrial and construction markets, the range of 3M Scotchcast Powder Resins are ideal for OEM electrical insulation applications. 3M Dynatel Locators combine simple interfaces, large backlit high-resolution graphics, excellent balance and ergonomics with precision locating capabilities to quickly and accurately identify underground assets.
In Renewable Energy 3M is helping to transform the fields of Generation & Conservation of Energy. 3M supports solar & wind energy initiatives through product solutions such as films, tapes, coatings, encapsulants and adhesives that help reduce the cost of energy generation. For energy conservation and management needs of customers we provide affordable window film technology that ensures effective health and environment protection.
Rs. in lakhs
|12 Months Ended 31.03.19||12 Months Ended 31.03.18|
|Financial Highlights||Segment Revenue||21,051.37||15,477.61|
|Profit Before Interest & Tax||3,735.95||2,354.96|
|Highlights|| The corrosion protection business had a strong year because of execution of large oil& gas and water pipeline projects.|
| The year witnessed a strong growth of 3M locator and marker sales as they were used for asset management while implementation of telecom projects.|
OPPORTUNITIES AND THREATS
3Ms globally competitive cost positions and well-crafted business strategies have enabled it to retain its leading market positions. Your Company strongly believes in the 3M brand equity and its ability to provide its customers with innovative solutions. Global campaigns and brand building continue to benefit our business in India.
The Company is operating in a highly competitive market which may exert pressure both on the top line as well as the bottom line of the Company. The Companys products involve expertise in product development, manufacturing and marketing and are subject to competition from products manufactured and sold by other technologically oriented companies both within India and outside India. In addition, rupee depreciation, fluctuating oil & high commodity prices remain key challenges needing focused attention.
RISKS AND CONCERNS
Provided below are cautionary statements of what we believe to be the most important risk factors applicable to the Company. External market headwinds specifically in manufacturing, automotive and infrastructure.
The impact of increase in duties on the products of the Company and consequent increase in the cost of goods sold.
The Companys results are affected by competitive conditions and changes in customer preferences.
The Companys growth objectives are largely dependent on the timing and market acceptance of its new product offerings, including its ability to continually renew its pipeline of new products and to bring those products to market.
Prices of inputs are expected to rise significantly. Whilst the Company continues to pursue cost reduction initiatives, increase in price of input materials and rupee depreciation could impact the Companys profitability to the extent that the same are not absorbed by the market through price increases and/or could have a negative impact on the demand in the domestic market.
The operations are subject to risk arising from fluctuations in exchange rates with reference to currencies in which the Company transacts.
The Companys future results may be affected if the Company generates fewer productivity improvements than estimated. The outcome of contingencies, such as legal and regulatory proceedings.
The effects of changes in tax, and other laws and regulations and market uncertainties.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
All key functions and divisions of the Company are independently responsible to monitor risks associated with in their respective areas of operations such as production, supply chain, marketing, finance, accounting, treasury, legal and other areas like health, safety and environment. The Company has identified various risks through an internal self-assessment compliance checklist and has laid out necessary procedures to mitigate the same.
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 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.
DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
In the year 2018, the Company further strengthened our development framework involving learning for Supervisors, Hi Potentials and Employees.
For the people leaders, the Company has put in place a workshop series called India People Leader Journeys with a curriculum for supervisors based on their roles and experience levels. The workshop series for New Leaders, Evolving Leaders and Experienced leaders is a blend of content that enables supervisors to be better equipped to lead people in todays environment, while also keeping in mind global 3M priorities. Some highlights were programs called Your Leadership Experience and Insights Discovery for our experienced leaders. Nearly 115 of our supervisors across regions were part of workshops which we believe will be a powerful input to their leadership journeys.
Arts-An Inspiration for Excellence was another initiative launched to help our leaders learn from excellence in diverse fields. The Company had the honour of hosting and learning from talks by theatre doyen Ms. Arundhati Nag and award-winning danseuse, Ms. Malavika Sarukkai as part of our learning programs.
In addition to Spark, 3Ms learning platform for Hi Potential employees, about a 100 Hi Potentials were part of Strength finder workshops to better appreciate their strengths and how such strengths can be leveraged at work. XChange, our inter corporate program for the best of our Hi Potentials also progressed as per plan with strong action plans emerging from the 5-month learning intervention.
The Master Class learning series was launched in 2018 to teach employees specialized areas that could help them perform their jobs better. Some examples of these workshop series were Finance, Design Thinking and Storytelling workshops for 220+ employees.
As part of strengthening employee experience for the new comers, the Company has significantly changed the onboarding processes. Major change included having employees join at Corporate Office on fixed days of the month while also revamping our Feel@Home program (New employee orientation program). At the Feel@Home program the new employees learn about the Big 3M, Our History and Culture, interact with the senior leaders and teach back their learnings through an engaging competition.
The plant employees were part of workshops called Associates Contributing Together. These workshops facilitated by plant HR involved interesting activities to build learning agility and cross-line collaboration for customer wins.
During festive season last October, HR organization engaged ~1100 employees across regions and plants on development themes connecting to Growth and Transformation. This initiative further reinforces the various learning options available to employees while also interacting with leaders on people development.
Empowering employees to be owners of their own learning, 3Ms Develop U platform was further refreshed with updated competency models, employee sign up options for virtual trainings and leadership messages. Our virtual learning calendar gives employees the option of signing up for learning modules in quick bytes at their location, at their convenient time slots.
3Ms Coaching program continues to help leaders navigate through accelerated business growth while the 3M Asia Mentoring Program has helped employees connect with and learn from experienced leaders across 3M.
Employees Relations (ER):
The financial year 2018-2019 has been a year of improvement and positive change on the Industrial Relations (IR) front. The 3M philosophy on IR has always been direct engagement and communication with the organization which stands stronger today. The year went smooth without any unwanted ER/IR instances or man-days loss.
Continued to focus on the Proactive ER strategy firmed on Connect, Communicate and Collaborate theme. The Company has strengthened systems to reinforce the culture of respect and fairness. Leaders understand concerns proactively and communicated our philosophy regularly through multiple platforms from time to time.
Some additional actions put in place:
1. As part of robust Employee Engagement framework, the Company has focused on Involvement of Shop floor employees in the Corporate Social Responsibility projects.
2. The Company is taking the IR / ER focus a level higher with a structured employee relations plan - a key element of our growth strategy.
3. An entire plan touching Communication, employee development, career progression and supervisor development has been established. The 3M practice of connecting with families of our shop floor teams continues to be a great look-forward.
4. Processes to address grievances while maintaining a fair and firm stance on discipline is also being worked on.
These plans will be further strengthened through 2019.
HR Business Partner (HRBP):
HR Business Partners were aligned to businesses and supported employee engagement programs (Build.Develop.Engage) across businesses and functions. These included Critical Talent mapping of all employees and ensuring right employee life cycle actions were being taken in a timely manner.
HR and other functions were available to engage with and train employees on various processes apart from being available for them on a one on one basis to clear any personal issues they may need support for.
Specific, targeted retention plans were put together and rolled out for certain Functions and Businesses where retention was below expected levels. These plans included training of supervisors, engagement activities and coaching among others.
Meanwhile the team was also actively involved in Organization Design and restructuring activities to ensure talent was placed in the most productive positions and structures supported business needs.
|On behalf of the Board of Directors|
|Debarati Sen||B.V. Shankaranarayana Rao|
|Place : Bengaluru||Managing Director||Whole-time Director|
|Date : May 28, 2019||DIN:07521172||DIN:00044840|