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BOARD OF DIRECTORS
DIRECTORS Mr. Yashovardhan Birla Chairman
Mr. Bert O’Donoghue Managing Director
Mr. Thomas P. Spencer Director
Ms. Mary B. McCormick Director
Dr. Carlisle S. Boyce Director
Mr. B.S. Iyer Director
Mr. D.J. Balaji Rao Director
Mr. Amit Mukherjee Director
Mr. B.V. Shankaranarayana Rao Director
WEBSITE www.3m.com/intl/in
Corporate Office
Raheja Paramount
138, Residency Road
Bangalore - 560 025
Tel : 080 - 22231414
Fax : 080 - 22231450
Registered Office
Plot No. 48-51, Electronics City
Hosur Road
Bangalore - 560 100
Tel : 080 - 28520203
Fax : 080 - 28520576
Vision
S To be the most innovative
enterprise and the preferred
supplier
Values
S Satisfy customers with superior
quality value and service.
S 3M Acceleration
S Sourcing effectiveness
S eProductivity
o
The year ended December 31, 2005 was indeed a momentous one for us. Our
Company witnessed excellent growth on the top & bottom line & is well ahead of the
industry average in terms of growth. I am delighted with our performance.
For Companies, scaling up is vital for longevity and prosperity. The growth it
generates feeds customer demand for stronger, more stable partners, who consistently
deliver value at competitive costs. Strong growth permits companies to build their brand
and human capital, to seize market share, to amortize costs on sales, administration
and R&D, not to mention financial stability as I always believe, 3M’s drive to scale-up
will come from it’s innovative and diverse product line and most certainly, our ability to
offer long-term value to our customers.
Our strong product base coupled with a sound business model, is fortified by a
leadership that leads by example. A leadership that rolls up its sleeves and dives into the
details, be it project reviews or scoping customer needs or for that matter motivating their
teams. I thank them for leading 3M India so well and I am confident of their ability to
lead our company to an even stronger & greater future.
Finally, I believe that such strong results are a product of a dedicated, committed
& hard-working team. I thank them for their stellar performance and I exhort them to
continue to foster their culture of excellence, while sticking to the highest ethical standards.
Defining a vision of the future, far ahead of where we stand today, is essential to
unlock the imagination and passion of people. We need to internalise each facet of this
vision, see where we are found wanting, and systematically address each shortcoming.
Once the vision becomes part of our bloodstream, growth is automatic & a certainty.
Yas hovar
arddhan BBir
ir
irlla
o
The people at 3M India are committed to delivering solutions to our customers problems, using innovative 3M technologies
and products, growing faster than the economy we serve and delivering strong results. In 2005, they continued to transform the way
we operate, achieving several new milestones – both financial and in other key areas of operating performance.
I am delighted to report to you that your Company registered a top line growth of 45.4% over 2004, way above industry
averages. We posted another all-time high in earnings growth of 50.4%. Our results were driven primarily by a combination of solid
top-line growth and continued improvements in operational efficiency. In addition, cost-reduction projects related to our corporate
initiatives had a direct impact on our bottom line. Needless to say, the very core of our raison d’etre are our customers – working
closely with them, creating and sustaining customer loyalty has contributed significantly to our results.
A rejuvenated culture of accountability is reinforcing the delivery of broad-based business results and all of our businesses
contributed to our sales and profit growth in 2005.
We enter 2006 with strong momentum, confident in our ability to sustain double-digit earnings growth both this year and
longer-term. We’re delivering strong results by leading change and leveraging the power inherent in the 3M business model. A culture of
customer-inspired innovation is at the core of this business model. Our people apply multiple technologies to a broad spectrum of markets,
and they continue to transform the process of innovation – from idea creation to successful product commercialization – by making better
choices and at a faster pace. We have substantially reduced cycle time – the number of months it takes for a qualified product idea to go
from concept to successful commercialization. That means sales start earlier and add up more quickly.
Six Sigma is 3M’s overarching initiative, and it continues to drive growth, reduce costs and increase cash flow in 3M businesses
around the world. It has become deeply embedded in every function and business. Simply put, it’s now the way we work. A key way in which
we use Six Sigma tools is “Six Sigma with Our Customers” projects - these joint projects produce a relationship with customers that
transcends that of the traditional role of a product supplier. We come to be appreciated as a valued business partner, as well.
Achieving results ethically is a cornerstone of the 3M culture. Close to two decades of operating with honesty and integrity has
earned the company trust from customers, respect and credibility, and dedication from our employees. Our reputation is an incalcu-
lable asset and a source of pride for 3Mers in India. We recognize that good reputations are much more easily lost than won, and we’re
fully committed to protecting our reputation for straightforward, ethical behavior.
The impressive results that your Company has delivered would not have been possible without the yeoman contribution of all
employees, channel partners and outsource partners who work day and night to execute and deliver the vision of the company. I a m
sure all of you will join me in complimenting them for putting in extraordinary work to achieve wonderful results.
I am exceptionally proud of the 3M employees in India and what they have achieved. Not only am I proud of the business
results but also the way that they have displayed their humanity by contributing from their own pockets to support the Prime
Minister’s Disaster Fund at the time of the recent terrible earthquake in Northern India. Your Company had a contribution
matching scheme and the employees really stepped up. This group of employees are the equal of any group of 3M employees globally.
As we move forward, we will start to increase our investments in India to create an infrastructure to enable continued
growth that is well in excess of the economic growth of the country.
Finally, I would like to thank your Board of Directors. Their leadership and advice to me and our team is invaluable.
As I look to the future, I sincerely believe that our best years are ahead of us.
Bert O’Donoghue
o
innovate, grow, deliver 5
3M India Limited
(formerly Birla 3M Limited)
Additional information to be furnished u/s 217 (1)(e) of the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988.
1. Conservation of Energy
Installation of 100 nos of T5 lamps for the new converting area resulted in reduction of power consumption.
Installation of variable frequency drives in the A/C and ventilation arrangement of the Trolley condition area VFD’s will
vary the speed of the Motor depending upon the requirement and at least 20% saving is expected to the connected
load of 15 KW of the motors at AHU’s.
The above measures in conservation of energy resulted in annual savings of Rs 3.6 lakhs.
2. Benefits derived as a result of the • New applications developed to improve customers process
above Research & Development • Cost effective solutions to bring down the total cost of
applications and products
• Patent application filed
Investors are cautioned that this discussion contains statements that Company sources its requirement of materials both for
involve risks and uncertainties. Words like anticipate, believe, estimate, manufacturing & trading from its 3M Affiliates around the
intend, will & expect and other similar expressions are intended to globe as the products are technologically advanced.
identify such forward looking statements. The Company assumes no
Major portion of the revenue comes from traded goods which
responsibility to publicly amend, modify or revise any forward looking
3M has technological advantage worldwide. Few of our power
statements, on the basis of any subsequent developments, information
brands are Scotchkote, Scotchtint, Micropore, Thinsulate,
or events. Besides, the Company cannot guarantee that these
Post-it ®, Filtrete™, Scotch®.
assumptions and expectations are accurate or will be realized and
actual results, performance or achievements could thus differ materially b) Opportunities and Threats
from those projected in any such forward looking statements.
2005 was another encouraging year for the Indian economy.
The continued stability at home contributed to the favourable
MANAGEMENT DISCUSSION AND business environment.
ANALYSIS
We believe that our ability to compete will depend on a
The Company has a wide spectrum of products to cater to the number of factors beyond our control which include
requirements of Industrial, Automotive, Healthcare, Consumer &
Office Markets, etc., to name a few. • currency exchange fluctuations
a) Industry Structure and Developments • the price at which our competitors offer their
products and services and
The Company sales excluding exports grew by 46.4 % over
previous year. • to the extent to which our competitors respond to
the customer’s needs
The Company continues its focus on Industrial Segments, its
technological advantage of products and expertise. Your We strongly believe in our Brand Equity.
Rs. in lakhs
31.12.05 31.12.04
Financial Highlights for the year Segment Revenue 13,523.58 8,316.49
ended December 31, 2005 Profit before Interest & Tax 1,741.33 1,195.98
Capital Employed 5,839.06 4,749.38
Highlights • Oil exploration projects, auto components have progressed during the second half of the
year resulted in significant growth. Several initiatives have been implemented to improve
productivity and growth for corrosion protection products and specialty materials in the
coming years depends largely on theautomotive industry performance and implementation
of oil exploration projects.
• Recorded good growth in the automotive OEM business for both designed
and engineered products.
Highlights • 3M has been working relentlessly with customers in imparting education on hospital /
dental practices and protocol development / compliance across the country.
• Over 40,000 programmes were conducted by marketing, technical and international
speaker programs in the hospital, dental and dairy industry. We worked with customers
and helped set-up local chapters of nurses clubs, infection control societies, etc., in
major cities.
• The launch of a new nanotechnology product Z350 was well received by dentists and
will lead to faster growth. Faster penetration in cleaning and disinfection products and
dressings helped growth in the medical business in 2005. The launch of orthodontic
products in 2005 will accelerate growth.
• Six sigma projects undertaken with some leading customers have helped improved
efficiency for the customers and have helped improved relationships and business for
3M with these customers.
31.12.05 31.12.04
Financial Highlights for the year Segment Revenue 6,806.62 4,386.43
ended December 31, 2005 Profit before Interest & Tax 1,621.54 970.47
Capital Employed 1,363.54 1,217.65
Highlights • Expansion of the road network at the national and state levels resulted in increased
demand for the Company’s reflective sheeting products for traffic signage.
• The Company’s reflective sheeting has been approved for use in the prestigious,
Mumbai Metropolitan Regional Development Authority (MMRDA) road projects.
• The Company’s commercial graphics division supplied commercial fascia signage material
(vinyl and flexible substrate) to several large national Corporate identity re-imaging
Programs.
• During the year, the Company’s occupational health & environment safety
division bagged contracts for supply from some of the largest public and private sector
companies in the country and has strengthened its leadership position.
• The Company’s security system division supplied state of the art passport readers to
the 4 large international airports in the country thereby helping them in speedy
clearance at the immigration counters at the airports.
31.12.05 31.12.04
OTHERS
Rs. in Lakhs
31.12.05 31.12.04
Board of Directors
The Board of Directors of the Company, is headed by the Non-Executive Chairman and renowned industrialist, Mr. Yashovardhan Birla. The
Board of the Company comprises of proper blend of Executive, Non-Executive and the Independent Directors, with professional background
and experience in Business and Industry, Finance & Law. The details of Board composition, their other directorships / committee memberships
and shareholding in the Company, as of December 31, 2005 are appended below :
Whether Promoter, No. of outside No. of Board No. of shares
Executive, or Directorships Committees of Other held
Director Non-Executive / held * companies in which a
Independent Member #
• Discussion with Statutory Auditors before the audit Mr. B.S. Iyer is the Chairman of the Audit Committee. The
commences, about the nature and scope of audit as well Company Secretary acts as the Secretary to the Committee.
as post-audit discussion to ascertain any area of concern. All the members of the Audit Committee are financially literate
• To look into the reasons for substantial defaults in the and Mr. B. S. Iyer, Chairman, is a person with financial
payment to the depositors, debenture holders, expertise. He is in the Senior Management of a large reputed
shareholders (in case of non-payment of declared Listed Company and is also its Company Secretary.
dividends) and creditors.
At the invitation of the Committee, the Internal Auditor, the
• Carrying out any other function as is mentioned in the Managing Director, the Head of Finance, Head of Legal
terms of reference of the Audit Committee. Department & Statutory Auditors attend the Audit Committee
The Audit Committee is empowered, pursuant to its terms of meetings, to answer and clarify the queries that are raised at
reference, to: the Committee meetings.
• Investigate any activity within its terms of reference and The Company has an Internal Audit department, which carries
to seek any information it requires from any employee. out independent periodic reviews. The prime objective of
• Obtain legal or other independent professional advice such audits is to evaluate the functioning and quality of internal
and to secure the attendance of outsiders with relevant controls and provides assurance of its adequacy and
experience and expertise, when considered necessary. effectiveness. The scope of internal audit covers a wide variety
The Company has systems and procedures in place to ensure that of operational and financial matters and includes a follow-up
the Audit Committee mandatorily reviews: review of corrective actions agreed for implementation. The
adequacy of the internal control system as well as the report
• Management discussion and analysis of financial condition
of the internal audit is reviewed by the Audit Committee of
and results of operations.
the Board of Directors. In addition, an audit by Global Internal
• Statement of significant related party transactions (as Audit team of 3M Group, in accordance with 3M Group charter
defined by the Audit Committee), submitted by for internal audit, is also conducted.
Management.
There were no transactions of exceptional nature that
• Management letters / letters of internal control
weaknesses issued by the Statutory Auditors. required the specific attention of the Audit Committee.
Perquisites - The value of the perquisites shall not exceed Salary including allowances, incentive and perquisites :
Rs. 5 Million per annum and nature of perquisites is as given below:
Total value of salary & perquisites not exceeding Rs. 45 lakhs
a. Fully furnished company leased house. All the lease per annum or Rs.3.75 lakhs per month. Within the said limits,
provisions will be as per the rules and regulations of the the exact payment of remuneration shall be decided by the
leased accommodation Policy of the Company. Managing Director and communicated to Mr. B.V.
Shankaranarayana Rao from time to time.
b. Reimbursement of telephone rentals and the actual
business telephone calls. All charges for long distance Benefits / Perquisites :
personal calls will be borne by the individual. The perquisites would be mainly in the form of furnished
house or House Rent Allowance in lieu of the accommodation,
c. Company car with chauffer primarily for official use. The
with such other amenities and facilities as may be required
car will be fully maintained by the Company.
from time to time for security and upkeep, telephone at
Benefits / Perquisites : residence, electricity, security guard, medical facilities and
other facilities available to the Senior Management personnel
Additional perquisites, not included in the overall perquisites as per rules of the Company.
ceiling of Rs. 5 Million per annum
Others - Payment / remittance towards retiral benefits like
a. Children’s Education Allowance subject to a maximum Provident Fund, Superannuation, Gratuity, etc. shall be
of Rs.5,000/- per child per month for two Children, according to the Company’s Policy for Senior Management
studying in or outside India will be payable. and applicable statutory provisions from time to time.
However, the above statutory payments shall not be included
b. Passage money for children studying outside India / family for computation of Managerial Remuneration to the extent
staying abroad once in a year by economy class or once in they are not in excess of the limits prescribed under the
two years by first class from the place of their study / stay Income Tax Act, 1961.
abroad, if they are not residing with the Managing Director.
The perquisites for this purpose shall be valued as per Income
c. Leave Travel Concession : Return passage for self and family Tax Act, 1961, wherever applicable, and in the absence of any
as per the rules of the Company, once in a year, if the leave provisions in the said Act, the perquisites shall be valued at
is to be spent outside India. He will be eligible for leave actuals.
travel facility to home town for self and family twice a year.
Other terms of employment shall be on the same lines as
Brief terms of remuneration to Mr. B. V. applicable to the Senior Executives of the Company as per
Shankaranarayana Rao are as under : Policy of the Company.
The Company through its Registrar and Share Transfer Agents has Postal Ballot
resolved most of the investor grievances / correspondence within a
During the year 2005, there was no business, which had to be
period of 7 days from the date of their receipt except in cases that
conducted through a postal ballot. At present, the Company does not
are constrained by disputes or legal impediments. However, the
have any resolution to be decided by the Members by Postal Ballot.
number of these cases are not material.
The Statistics of Shareholders Complaints received / redressed, Following are the details of the special resolutions passed by the
during the year 2005, is furnished below : Shareholders at the last three General Meetings :
Year / Month Bombay Stock Exchange (BSE) National Stock Exchange (NSE)
(in Rs.) (in Rs.)
Stock Performance :
BSE Sensex Vs. 3M Share Price
(Monthly Closing Price)
1000 1000
900
800 8000
700
600 6000
500
400 4000
300
200 2000
100
0 0
05 05 05 r0
5 05 05 l0
5 05 05 05 05 05
n
Fe
b ar Ap ay un Ju g
Se
p ct ov ec
Ja M M J Au O N D
Sensex 3M India
Range of Shares No of Shareholders % to total Shareholders No of Shares held % age to Total Shares
1 to 500 8,227 95.26 683,803 6.07
501 to 1000 196 2.27 155,054 1.38
1001 to 2000 86 1.00 129,686 1.15
2001 to 3000 56 0.65 141,576 1.26
3001 to 4000 19 0.22 65,390 0.58
4001 to 5000 6 0.07 27,352 0.24
5001 to 10000 24 0.28 173,654 1.54
10001 and above 22 0.25 9,888,555 87.78
Total 8636 100.00 11,265,070 100.00
Usha A Narayanan
Partner
Membership Number 23997
For and on behalf of
Place : Bangalore Lovelock & Lewes
Date : February 20, 2006 Chartered Accountants
1. We have audited the attached Balance Sheet of 3M India (f) In our opinion and to the best of our information and
Limited (formerly Birla 3M Limited) as at December 31, 2005, according to the explanations given to us, the said financial
and the related Profit and Loss Account and Cash Flow statements together with the notes thereon and attached
Statement for the year ended on that date annexed thereto, thereto give in the prescribed manner the information
which we have signed under reference to this report. These required by the Act and give a true and fair view in
financial statements are the responsibility of the company’s conformity with the accounting principles generally
management. Our responsibility is to express an opinion on accepted in India:
these financial statements based on our audit.
(i) in the case of the Balance Sheet, of the state of affairs
2. We conducted our audit in accordance with the auditing of the company as at December 31, 2005;
standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable (ii) in the case of the Profit and Loss Account, of the
assurance about whether the financial statements are free of profit for the year ended on that date; and
material misstatement. An audit includes examining, on a test (iii) in the case of the Cash Flow Statement, of the cash
basis, evidence supporting the amounts and disclosures in flows for the year ended on that date.
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial Usha A Narayanan
statement presentation. We believe that our audit provides a Partner
reasonable basis for our opinion. Membership Number 23997
3. As required by the Companies (Auditor’s Report) Order, 2003, For and on behalf of
as amended by the Companies (Auditor’s Report) (Amendment) Place : Bangalore Lovelock & Lewes
Order, 2004, issued by the Central Government of India in Date : February 20, 2006 Chartered Accountants
terms of sub-section (4A) of Section 227 of ‘The Companies
Act, 1956’ of India (the ‘Act’) and on the basis of such checks of
the books and records of the company as we considered
appropriate and according to the information and explanations
given to us, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report that:
(a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by
law have been kept by the company so far as appears
from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in agree
ment with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account
and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in sub-
section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from
the Directors, as on December 31, 2005 and taken on
record by the Board of Directors, none of the Directors
is disqualified as on December 31, 2005 from being
appointed as a Director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
Referred to in paragraph 3 of the Auditors’ Report of even date to 5. (a) In our opinion and according to the information and
the members of 3M India Limited (formerly Birla 3M Limited) on the explanations given to us, the particulars of contracts or
financial statements for the period ended December, 31, 2005 arrangements referred to in Section 301 of the Act have
been entered in the register required to be maintained
1. (a) The company is maintaining proper records showing full
under that section.
particulars including quantitative details and situation of
fixed assets. (b) In our opinion and according to the information and
explanations given to us, the transactions made in
(b) The fixed assets are physically verified by the management
pursuance of such contracts or arrangements and
according to a phased programme designed to cover all
exceeding the value of Rupees Five Lakhs in respect of any
the items over a period of three years, which in our
party during the year, have been made at prices which are
opinion, is reasonable having regard to the size of the
reasonable having regard to the prevailing market prices
company and the nature of its assets. Pursuant to the
at the relevant time.
programme, a portion of the fixed assets has been
physically verified by the management during the year and 6. The company has not accepted any deposits from the public
no material discrepancies between the book records and within the meaning of Sections 58A and 58AA of the Act and
the physical inventory have been noticed. the rules framed there under.
(c) In our opinion and according to the information and 7. In our opinion, the company has an internal audit system
explanations given to us, a substantial part of fixed assets commensurate with its size and nature of its business.
has not been disposed off by the company during the year.
8. The Central Government of India has not prescribed the
2. (a) The inventory including stocks with third parties has been maintenance of cost records under clause (d) of sub-section
physically verified by the management during the year. In (1) of Section 209 of the Act for any of the products of the
respect of inventory lying with third parties, these have company.
substantially been confirmed by them. In our opinion, the
9. (a) According to the information and explanations given to us
frequency of verification is reasonable.
and the records of the company examined by us, in our
(b) In our opinion, the procedures of physical verification of opinion, the company is generally regular in depositing
inventory followed by the management are reasonable undisputed statutory dues including investor education
and adequate in relation to the size of the company and and protection fund, employees’ state insurance, income
the nature of its business. tax, wealth tax, service tax, customs duty, excise duty and
other material statutory dues as applicable with the
(c) On the basis of our examination of the inventory records,
appropriate authorities.
in our opinion, the company is maintaining proper records
of inventory. The discrepancies noticed on physical (b) According to the information and explanations given to us
verification of inventory as compared to book records and the records of the company examined by us, there are
were not material. no dues of income tax, sales tax, wealth tax, service tax,
customs duty, excise duty and cess which have not been
3. (a) The company has not granted any loans, secured or
deposited on account of any dispute except for amount
unsecured, to companies, firms or other parties covered
claimed under show cause notice as detailed below:
in the register maintained under Section 301 of the Act
and therefore paragraphs iii(b), iii(c) and iii(d) of the Order, Name of Nature of Amount Period to Forum
are not applicable. the Statute Dues Rs. which the where the
(b) The company has not taken any loans secured or unsecured, amount dispute is
from companies, firms or other parties covered in the register relates pending
maintained under Section 301 of the Act and therefore Customs Act, Customs 3,119,000 1993 Commissioner
paragraphs iii(f) and iii(g) of the Order, are not applicable. 1962 Duty Matter of Customs
4. In our opinion and according to the information and explanations The Employees Employees 1,940,000 1997 Deputy
given to us, having regard to the explanation that certain items State Insurance State Director
purchased are of special nature for which suitable alternative Act, 1948 Insurance
sources do not exist for obtaining comparative quotations, there matter
is an adequate internal control system commensurate with the
size of the company and the nature of its business for the purchase 10. The company has not accumulated losses as at December 31,
of inventory, fixed assets and for the sale of goods and services.
2005 and it has not incurred any cash losses in the financial
Further, on the basis of our examination of the books and records
year ended on that date or in the immediately preceding
of the company, and according to the information and explanations
financial year.
given to us, we have neither come across nor have been informed
of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
Usha A Narayanan
Partner
Membership Number 23997
SOURCES OF FUNDS :
1. Shareholders’ Funds :
Share Capital 1 112,650,700 112,650,700
Reserves & Surplus 2 1,621,414,810 1,237,237,940
2. Loan Funds :
Secured Loans 3 - -
Unsecured Loans 4 - -
3. Net Deferred Tax Liability - 2,863,865
[Schedule 15, Note 17(b)]
1,734,065,510 1,352,752,505
APPLICATION OF FUNDS :
1. Fixed Assets :
Gross Block 5 701,261,487 663,325,878
Less: Depreciation 410,816,523 353,177,193
Net Block 290,444,964 310,148,685
Capital work-in-progress 2,866,538 11,122,248
2. Investments 6 - 16,000
3. Net Deferred Tax Asset 12,486,997 -
[Schedule 15, Note 17(b)]
4. Current Assets, Loans and Advances :
Inventories 7 601,544,384 402,165,570
Sundry Debtors 8 499,880,606 296,798,019
Cash and Bank Balances 9 762,014,155 618,097,308
Loans and Advances 10 338,238,422 258,197,439
2,201,677,567 1,575,258,336
Less: Current Liabilities and Provisions : 11
Current Liabilities 710,478,649 499,414,782
Provisions 62,931,907 44,377,982
773,410,556 543,792,764
Net Current Assets 1,428,267,011 1,031,465,572
1,734,065,510 1,352,752,505
Notes to accounts 15
The Schedules referred to above form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our For and on behalf of the Board
report of even date
Place : Bangalore
Date : February 20, 2006
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2005
Schedule For the year ended For the year ended
Number 31.12.2005 31.12.2004
Rs. Rs.
INCOME :
Sales 4,029,457,944 2,712,258,968
Less: Excise Duty 230,639,389 139,762,609
3,798,818,555 2,572,496,359
3,830,604,738 2,597,374,384
EXPENDITURE :
Finished Goods purchased (traded) 1,203,926,577 933,189,771
Manufacturing, administrative and selling expenses 13 2,062,675,464 1,278,224,302
Depreciation 67,306,310 52,800,908
(Increase) / Decrease in inventories 14 (109,133,077) (77,252,585)
3,224,775,274 2,186,962,396
Notes to accounts 15
The Schedules referred to above form an integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our For and on behalf of the Board
report of even date
Place : Bangalore
Date : February 20, 2006
SCHEDULES TO ACCOUNTS
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 1:
SHARE CAPITAL
Authorised :
11,265,070 Equity Shares of Rs. 10 each 112,650,700 112,650,700
Issued, subscribed and fully paid up
11,265,070 Equity Shares of Rs. 10 each
Of the above 8,562,000 equity shares (Previous year - 8,562,000 equity
shares) are held by 3M Company, USA 112,650,700 112,650,700
112,650,700 112,650,700
SCHEDULE 2:
SCHEDULE 3:
SECURED LOANS
SCHEDULE 4:
UNSECURED LOANS - -
- -
SCHEDULE 5
Factory Building 61,848,245 876,982 - 62,725,227 17,237,666 2,073,171 - 19,310,837 43,414,390 44,610,579
Leasehold Improvements 33,425,600 132,083 - 33,557,683 17,907,390 7,092,313 - 24,999,703 8,557,980 15,518,210
(Refer Note (b) below)
Plant and Machinery 274,561,049 25,322,506 - 299,883,555 126,770,931 23,020,961 - 149,791,892 150,091,663 147,790,118
Data Processing Equipments 87,543,251 10,457,660 - 98,000,911 78,052,207 10,040,772 - 88,092,979 9,907,932 9,491,044
and Software
663,325,878 47,602,589 (9,666,980) 701,261,487 353,177,193 67,306,310 (9,666,980) 410,816,523 290,444,964 310,148,685
innovate, grow, deliver
Previous year 550,744,724 112,869,736 (288,582) 663,325,878 300,664,867 52,800,908 (288,582) 353,177,193 310,148,685 250,079,856
3M India Limited
(formerly Birla 3M Limited)
Note
a) Leasehold land represents amount paid to Maharashtra Industrial Development Corporation for land to be purchased on 95 years lease, for which compliance with certain conditions as
mentioned in the License Agreement and registration is pending as on date.
b) Current year depreciation includes additional depreciation of Rs. 6,942,289 on account of management reassessment of remaining estimated useful life of Leasehold Improvements and
Furniture & Fixtures.
27
3M India Limited
(formerly Birla 3M Limited)
SCHEDULES TO ACCOUNTS
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 6:
INVESTMENTS (NON-TRADE UNQUOTED)
At Cost
Long Term
In Government Securities:
Indira Vikas Patra - 500
National Savings Certificate - 15,500
(Lodged with Government departments)
- 16,000
SCHEDULE 7:
INVENTORIES
(Lower of cost and net realisable value)
a) Stock in Trade
- Raw Materials 237,292,076 152,838,718
(including in-transit Rs.49,195,668 previous year Rs.20,753,228)
- Packing Materials 11,138,983 5,463,182
- Work-in-Progress 20,972,615 13,982,465
- Finished Goods 79,817,694 57,424,633
- Traded Goods 252,033,385 172,283,519
(including in-transit Rs. 73,793,501 previous year Rs.31,129,843)
b) Stores & Spares 289,631 173,053
601,544,384 402,165,570
SCHEDULE 8:
SUNDRY DEBTORS
(Secured)
Over six months: 3,712,091 2,530,181
Others 24,098,298 9,877,021
(Unsecured)
Over six months:
- considered good 5,734,301 1,043,357
- considered doubtful 70,046,986 64,276,486
Others
- considered good 466,335,916 283,347,460
569,927,592 361,074,505
Less: Provision for doubtful debts 70,046,986 64,276,486
499,880,606 296,798,019
SCHEDULES TO ACCOUNTS
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 9:
CASH AND BANK BALANCES
SCHEDULE 10:
LOANS AND ADVANCES
SCHEDULES TO ACCOUNTS
As at As at
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 11:
CURRENT LIABILITIES
AND PROVISIONS
a) Current Liabilities:
Sundry creditors for goods,
expenses and services
i) Total Outstanding dues of
small scale industrial
undertaking(s); and 2,931,260 2,293,362
{The above information has
been compiled to the extent
these could be identified as
small scale units on the basis
of the information available
with the Company
[Schedule 15 Note 12 (a)]}
ii) Total outstanding dues to
creditors other than small
scale industrial
undertaking(s) 614,084,981 617,016,241 412,456,624 414,749,986
Advance from customers/
distributors 51,788,588 41,535,524
Investor Education and
Protection fund - 864,456
Unclaimed debenture and
accrued interest thereof 2,509,324 2,509,324 3,239,186 4,103,642
Other Current Liabilities 39,164,496 39,025,630
710,478,649 499,414,782
b) Provisions:
Taxation (Fringe Benefit Tax) 15,003,456 -
Gratuity (Schedule 15, Note 13) 14,677,411 10,502,468
Leave Encashment 11,051,040 6,975,514
Sales Tax (Schedule 15, Note 18) 10,200,000 14,900,000
Other trade Payable
(Schedule 15, Note 18) 12,000,000 12,000,000
62,931,907 44,377,982
773,410,556 543,792,764
SCHEDULES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 12:
OTHER INCOME
Interest (Gross, tax deducted at source Rs.6,725,775, Previous year Rs.4,061,379) 30,141,040 21,867,959
Commission - 116,027
Profit on Sale of Assets 1,645,143 15,000
Foreign exchange gain - net - 2,879,039
31,786,183 24,878,025
SCHEDULE 13:
MANUFACTURING, ADMINISTRATIVE AND SELLING EXPENSES
SCHEDULES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
SCHEDULE 14:
(INCREASE)/DECREASE IN INVENTORIES
Opening Stock
Work-in-progress 13,982,465 9,212,106
Finished goods 57,424,633 35,282,223
Traded goods 172,283,519 121,943,703
243,690,617 166,438,032
Less : Closing Stock
Work-in-progress 20,972,615 13,982,465
Finished goods 79,817,694 57,424,633
Traded goods 252,033,385 172,283,519
352,823,694 243,690,617
(Increase)/Decrease in Inventories (109,133,077) (77,252,585)
SCHEDULES TO ACCOUNTS
1 Statement On Significant Accounting Policies First in first out method based on actual cost
The accounts have been prepared to comply in all First in first out method based on actual cost. Goods lying at
material aspects with Generally Accepted Accounting bonded warehouse are valued inclusive of customs duty.
Principles in India, the Accounting Standards issued by Stock in transit is valued excluding customs duty.
the Institute of Chartered Accountants of India and the Finished goods and Work in Progress :
relevant provisions of the Companies Act, 1956.
Material cost on weighted average method plus labour and
B Fixed assets appropriate overheads and wherever applicable, excise duty.
Fixed assets are stated at original cost less accumulated Provision for obsolescence is made wherever considered
depreciation. Cost includes invoice price and wherever necessary based on the age of the stocks.
applicable, freight, duties and taxes, related interest on
F Sundry Debtors and Loans & Advances
specific borrowings upto the date of acquisition /
installation and expenses incidental to acquisition and Sundry Debtors and Loans & Advances are stated after
installation. Operating Software is capitalised along with making adequate provision for doubtful balances.
fixed assets. Application softwares are amortised based
G Retirement / Post Retirement Benefits
on management estimation of useful life.
C Depreciation and amortisation The Gratuity liability is funded with the Life
Insurance Corporation of India. The charge to profit
Depreciation on fixed assets other than leasehold and loss account comprises of contribution to fund
improvements and Goodwill is provided on straight and estimated amount determined by the Company
line method at the following rates specified which are in accordance with the Payment of Gratuity Act, 1972.
equal to or higher than the principal rates specified in
Schedule XIV to the Companies Act, 1956: The Company makes contribution to the Superannuation
Scheme administered by the Life Insurance Corporation
Per Annum of India based on a specified percentage of eligible
employees salary. The Company’s obligation to the scheme
Building 3.34%
is restricted to the contributions to the scheme.
Plant and Machinery 10.00%
The Company makes monthly contribution as per the
Data Processing Equipments applicable statute for Provident Fund and charges off the
and Software 20.00% to 33.33% same to the profit and loss account.
Office Equipment 20.00% Provision is made for value of unutilised leave due to
Furniture & Fixtures 6.67% employees at the end of the year on the basis of actuarial
valuation.
Vehicles 6.67%
Leasehold improvements are amortised over the period H Revenue Recognition
of lease. [Schedule 5, Note (b)] Sales are recognised when goods are despatched
Goodwill purchased in earlier years is amortised over a in accordance with the terms of sale and are recorded
period of 5 years. Goodwill purchased subsequent to April net of sales returns, trade discount, rebates and sales tax
1, 2004 is evaluated based on impairment test annually. collected but includes excise duty, wherever applicable.
Interest and other income is accounted for on accrual
D Investments basis except items of non recurring nature which are
accounted when received.
Long-term investments are stated at cost. Decline in value
of long-term investments, other than temporary, is I Expenditure
provided for. Current investments are stated at lower of
cost or market value. Expenses are accounted for, on accrual basis and
provision is made for all known losses and liabilities.
E Inventories
Excise duty and customs duty are accrued on the
Inventories are valued at lower of cost and net realisable goods lying in the bonded warehouse at the year end.
value except in case of stores and spares which are
valued at cost. Revenue expenditure on Research and Development is
NOTES TO ACCOUNTS
charged against the profit of the year in which it is incurred. L Taxation
Capital expenditure on research and development is shown
as an addition to fixed assets. Provision is made for income tax annually based on the tax
liability computed after considering tax allowances and
J Foreign Currency Translations exemptions.
Transactions arising in foreign currency during the year are Deferred tax is recognised on timing differences between the
converted at rates closely approximating those ruling at the accounting income and the taxable income for the year and
transaction date or at the forward contract rates as the case may quantified using the tax rates and laws enacted or substantively
be. The exchange differences arising out of the translation of the enacted as on the balance sheet date.
foreign currency liability incurred for acquisition of fixed assets
are adjusted to the cost of fixed assets. Current assets and Deferred tax assets are recognised and carried forward to
liabilities in foreign currency are converted at the year end the extent that there is a reasonable certainity that sufficient
exchange rates and the resultant loss or gain is dealt with in the future taxable income will be available against which such
profit and loss account. In case of forward contracts, the difference deferred tax assets can be realised.
between the forward rate and exchange rate on the date of M Provisions
transaction is recognised as income/expense over the life of the
contract. Provisions are recognised when the Company has a present
obligation as a result of past events, it is probable that an
K Operating Leases outflow of resources will be required to settle the obligation,
A lease is classified as an Operating Lease, if it does not and a reliable estimate of the amount can be made. Where the
transfer substantially all the risks and rewards incident to Company expects a provision to be reimbursed, the
ownership. Lease rentals are charged to Profit and Loss reimbursement is recognised as a separate asset but only
Account on accrual basis. when reimbursement is virtually certain.
NOTES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
2 Contingent Liabilities not provided for :
a) Guarantees:
- issued by Company’s Bankers 13,676,114 15,299,790
- issued by Company on behalf of others - 12,170,165
b) Letter of credit opened by banks for purchase of raw materials 4,349,832 2,020,579
c) Claims against the Company not acknowledged as debts:
- Customs Demands 3,119,000 3,119,000
- Excise duty matters - 24,098,782
- Pending Sales Tax matters 24,408,315 24,342,960
- Employees State Insurance claim 1,940,000 1,940,000
3 Capital expenditure commitments
(net of advances) 6,439,156 2,524,527
NOTES TO ACCOUNTS
B. Particulars of Opening and Closing Stock of Stocks in Trade *:
NOTES TO ACCOUNTS
C. Particulars of Turnover* :
Others (individually less than 10% of total purchase traded goods) Nos - 413,102,910
- (311,758,312)
1,203,926,577
(933,189,771)
NOTES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
NOTES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
% Value % Value
9 Value of Imported and Indigenous
Raw Materials and Stores and Spares consumed :
(As certified by the Management)
Raw Materials
- Imported 92% 802,389,897 89% 385,712,879
- Indigenous 8% 69,938,484 11% 49,606,209
100% 872,328,381 100% 435,319,088
Stores & Spares
- Imported 3% 848,444 6% 1,004,531
- Indigenous 97% 33,025,824 94% 15,526,221
100% 33,874,268 100% 16,530,752
10 Earnings in Foreign Exchange :
- Export of goods calculated on FOB basis 64,589,514 3,466,216
- Freight and Insurance on exports 3,078,440 221,248
11 Research and Development Expenses : 1,560,630 1,339,859
12 a) The total outstanding dues to small scale industrial undertakings for more than 30 days as at December 31, 2005 is
Rs.1,680,531 (Previous year: Nil)
Adhesive Specialities
AF Industrial Stores
Allied System
Apeksha Tools
Armour Plast P Ltd
Asian Packaging
Bangalore Dry Ice and Gas Co
Cosmopack Industries
Image Labels P Ltd
Indus Spray
Mech Plast Industries
Pragati Printers
Superchem Industries
Note: The above is on the basis of information to the extent provided by the Suppliers to the Company, which has
been relied upon by the Auditors.
b) The Company has not made any provision for warranty considering that the Company can claim the warranty cost
from the original supplier.
c) The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce, while granting permission for
import of capital goods on concessional import duty under the Export Promotion Capital Goods (EPCG) Scheme,
has stipulated an export obligation aggregating to Rs. 193,675,663 for the Company, to be fulfilled over a period of
8 years. During the year ended December 31, 2005, the Company has fulfilled total export obligation amounting to
Rs. 130,012,950 (Previous Year: Nil) and cumulatively total export sales of Rs. 130,012,950 (Previous year : Nil)
13 The total future liability for retiring gratuity payable in accordance with Payment of Gratuity Act, 1972 is estimated by
the Company as on December 31, 2005 at Rs. 31,040,000 (Previous year: Rs. 21,313,000). Having regard to the amount
available with the Gratuity Fund administered by the Life Insurance Corporation of India and the balance amount of
Rs. 14,677,411 (Previous year: Rs. 10,502,468) has been fully provided.
NOTES TO ACCOUNTS
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
14 a) Managerial Remuneration *
Salary and Allowances 12,653,482 10,850,484
Contribution to provident and other funds 439,314 360,024
Estimated value of benefits 3,279,001 2,986,338
16,371,797 14,196,846
b) Computation of profit in accordance with Section 198(1) read
with Section 309(5) of the Companies Act, 1956 for calculation
of Managerial Remuneration:
NOTES TO ACCOUNTS
15. Related Party Transactions
(A) Summary of the monetary value of the transactions with the related parties are as follows:
I. Expenses:
Purchase of Materials 805,352,858 453,987,224 - 1,259,340,082
(561,583,441) (316,365,738) - (877,949,179)
Sales promotion expenses 396,481 141,532 - 538,013
(1,194,035) (652,238) - (1,846,273)
Remuneration to Directors - - 16,371,797 16,371,797
- - (14,196,846) (14,196,846)
Other Services - 72,740,050 - 72,740,050
- (44,364,262) - (44,364,262)
II. Income
Sale of Goods 49,830,450 17,314,206 - 67,144,656
- (6,984,964) - (6,984,964)
III. Purchase of Capital Goods - - - -
(67,464,858) - - (67,464,858)
IV. Balances
Advances Received 76,675,093 - - 76,675,093
(76,675,093) - - (76,675,093)
Outstanding Receivables 47,484,212 13,113,980 - 60,598,192
- (3,309,701) - (3,309,701)
Outstanding Payables 129,000,071 109,500,593 - 238,500,664
(70,511,073) (87,734,447) - (158,245,520)
NOTES TO ACCOUNTS
(B) Names of related parties and description of the relationship:
(i). Parties where control exists
Holding Company 3M Company, St Paul, USA
NOTES TO ACCOUNTS
(C) Key Management Personnel
Directors of the Company during the year Mr. Yashovardhan Birla
Mr. Bert O’ Donoghue
Mr. Thomas P. Spencer
Ms. Mary B. McCormick
Dr. Carlisle S. Boyce
Mr. B.S.Iyer
Mr. D. J. Balaji Rao
Mr. Amit Mukherjee
Mr. B.V. Shankaranarayana Rao
Mr. Lee M. Kennedy
Dr. Paul Rosso
Mr. Brad C. Sweet
Note:
i. None of the relatives of the Directors of the Company have any interest in any companies, firms, body corporate with
which transactions have been entered into during the year.
ii. The above information has been determined to the extent such parties have been identified on the basis of information
provided by the Company, which has been relied upon by the Auditors.
16 Assets taken on lease
Assets aggregating to Rs. 122,252,920 (Previous year: Rs.85,595,929) have been acquired on operating lease. The
Company has entered into operating lease arrangement for factory premises and amenities in respect of Corrosion
Protection Product Plant at Ahmedabad which have a non cancellable period of 5 years with a rent escalation of 15% per
annum and with a renewal option after the lease term. The agreements provide for premature termination by lessee,
after the non cancellable period through notice period of 6 months.
The obligation for future rentals in respect of such assets and factory premises under non cancellable operating leases
are as follows:
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
Minimum lease payments during the year charged to profit and loss account 33,365,573 23,398,359
Minimum lease payments not later than one year 28,692,459 21,188,823
Minimum lease payments later than one year but not later than five years 38,058,933 27,831,791
17 Taxation
a) The tax year for the Company being March 31, the provision for taxation for the year is the aggregate of the
provision made for the 3 months ending March 31, 2005 and the provision based on the figures for the remaining 9
months upto December 31, 2005. The ultimate tax liability will be determined on the basis of the figures for the
period April 1, 2005 to March 31, 2006.
NOTES TO ACCOUNTS
b) Net Deferred Tax Asset/(Liability) as on December 31, 2005 amounting to Rs.12,486,997 [Previous year : Rs. (2,863,865)]
has been arrived at as follows:
For the year For the year
ended ended
31.12.2005 31.12.2004
Rs. Rs.
i Deferred Tax Assets arising from:
Expenses charged in financial statement but allowable as deduction in
future years under the Income Tax Act, 1961 towards provision for
doubtful debts, gratuity, disallowance under Section 43B, leave wages, etc. 36,923,354 33,017,081
ii Deferred Tax Liabilities arising from:
Difference between carrying amount of fixed assets in the financial
statements and for Income Tax purpose (24,436,357) (35,880,946)
Net Deferred Tax Asset/(liability) taken to Balance Sheet 12,486,997 (2,863,865)
Net Deferred Tax(Credit)/Debit for the year (15,350,862) (8,444,775)
The tax impact for the above purpose has been arrived by applying a tax rate of 33.66% (Previous year : 36.5925%) being the prevailing tax
rate for Indian Companies under Income Tax Act, 1961.
18 In accordance with Accounting Standard -29 on Provisions, Contingent Liabilities and Contingent Assets, issued by the
Institute of Chartered Accountants of India, certain classes of liabilities have been identified as provision and accordingly
regrouped separately as under:
The Company sets up and maintains provisions for other trade payables when a reasonable estimate can be made. These
provisions are made based on estimates made by the Management that are reviewed periodically and involve quick settlements not
exceeding a period of two-three years in most cases.
NOTES TO ACCOUNTS
For the year ended For the year ended
31.12.2005 31.12.2004
Rs Rs
20 Segment Report :
Segment Revenue (Net Sale / Income)
a Industrial Markets 645,668,408 478,180,349
b Automotive and Specialty Materials Markets 1,352,357,766 831,648,971
c Health Care Markets 550,106,610 443,745,779
d Traffic and Safety Markets 680,662,184 438,642,841
e Consumer and Office, Construction Markets 502,883,587 373,293,455
f Others * 67,140,000 6,984,964
Total Segment Revenue 3,798,818,555 2,572,496,359
Less: Inter segment revenue - -
Net Sales / Income from Operations 3,798,818,555 2,572,496,359
Segment Results (Profit before interest and tax)
a Industrial Markets 138,886,252 100,313,775
b Automotive and Specialty Materials Markets 174,133,156 119,598,366
c Health Care Markets 33,508,486 27,497,638
d Traffic and Safety Markets 162,153,566 97,046,965
e Consumer and Office, Construction Markets 56,635,288 45,112,698
f Others 10,195,000 (1,924,669)
Total Segment Results 575,511,748 387,644,773
Less: Interest expense 1,468,469 2,110,810
Add: Other un-allocable income net off unallocable expenditure 31,786,185 24,878,025
Total Profit Before Taxation 605,829,464 410,411,988
Capital Employed (Segment Assets-Segment Liabilities)
a Industrial Markets 136,193,421 113,351,384
b Automotive and Specialty Materials Markets 583,905,751 474,937,845
c Health Care Markets 128,046,171 113,699,426
d Traffic and Safety Markets 136,353,510 121,765,001
e Consumer and Office, Construction Markets 94,621,722 79,277,694
f Others - 1,370,856
Total Capital Employed in Segments 1,079,120,575 904,402,206
Add: Unallocable corporate assets less corporate liabilities 654,944,935 445,486,434
Total Capital Employed by the Company 1,734,065,510 1,349,888,640
* includes;
Domestic Sales/ Income 2,550,486 3,297,500
Export Sales 64,589,514 3,687,464
Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the organisation
structure as well as the differential risks and returns of these segments.
Segment revenue, results and capital employed figures include the respective amounts identifiable to each of the segments and also
amounts allocated on a reasonable basis. Other unallocable expenditure includes expenses incurred on common services provided to
the segments which are not directly identifiable to the individual segments as well as expenses incurred at a corporate level which relate
to the Company as a whole.
The Company operates mainly to the needs of domestic market and export turnover is not significant in context of total turnover.
Accordingly, there are no reportable geographical segments.
21 The Company has changed its name from Birla 3M Limited to 3M India Limited with effect from December 18, 2002 and
has obtained a fresh certificate of incorporation for the changed name from Registrar of Companies.
22 Previous year’s figures have been regrouped / reclassified wherever necessary to conform to current year classification.
CASH FLOW STATEMENT FOR THE PERIOD ENDED DECEMBER 31, 2005
For the year ended For the year ended
31.12.2005 31.12.2004
Rs. Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Profit Before Taxation 605,829,464 410,411,988
Adjusted for
Depreciation 67,306,310 52,800,908
Provision for doubtful debts 5,770,500 14,382,287
Foreign Exchange Loss/(Gain) 238,858 (494,725)
(Profit) / Loss on sale of Fixed Assets - Net (1,645,143) (15,000)
Investments 16,000 -
Interest received (30,141,040) (21,867,959)
Interest paid 1,468,469 2,110,810
Operating Profit Before Working Capital Changes 648,843,419 457,328,308
Adjusted for
(Increase)/ Decrease in Inventories (199,378,814) (162,435,442)
(Increase)/ Decrease in Debtors (208,853,087) (20,183,411)
(Increase)/ Decrease in Loans and Advances (60,494,248) (27,413,425)
Increase/ (Decrease) in Current Liabilities and Provisions 214,375,477 141,813,442
Cash Generated From Operations 394,492,747 389,109,472
Interest Paid (1,468,469) (2,110,810)
Direct Taxes paid (239,086,560) (174,205,925)
Interest Received 27,680,865 18,799,377
NET CASH FLOW FROM OPERATING ACTIVITIES 181,618,583 231,592,115
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (39,346,879) (113,057,033)
Sale of Fixed Assets 1,645,143 15,000
NET CASH USED IN INVESTING ACTIVITIES (37,701,736) (113,042,033)
CASH FLOW FROM FINANCING ACTIVITIES - -
NET CASH USED IN FINANCING ACTIVITIES
NET (DECREASE) /INCREASE IN CASH AND CASH EQUIVALENTS 143,916,847 118,550,082
CASH AND CASH EQUIVALENTS
Opening Balance
Cash and Cheques on hand 10,097,488 14,352,024
With Scheduled Bank
- in Current Accounts 67,678,135 44,600,451
- in Deposit Account 540,000,000 440,000,000
- in Margin Money Account 321,685 594,751
TOTAL 618,097,308 499,547,226
Closing Balance
Cash and Cheques on hand 19,402,424 10,097,488
With Scheduled Bank
- in Current Accounts (Net of effects of exchange rate differences) 137,290,046 67,678,135
- in Deposit Account 605,000,000 540,000,000
- in Margin Money Account 321,685 321,685
TOTAL 762,014,155 618,097,308
Notes: 1 Figures in brackets represents outflow.
2 The Cash Flow Statement has been prepared in accordance with the requirement of Accounting Standard 3
“Cash Flow Statement” issued by Institute of Chartered Accountants of India.
3 Previous year’s figures have been regrouped wherever necessary.
This is the Cash Flow Statement referred to in our For and on behalf of the Board
report of even date
Usha A Narayanan Bert O’ Donoghue B. V. Shankaranarayana Rao K. Ramesh Chandra
Partner Managing Director Director Company Secretary
Membership No. : 23997
For and on behalf of
Lovelock & Lewes
Chartered Accountants
Place : Bangalore
Date : February 20, 2006
I. Registration Details
Registration No. 13543 State Code 08
Balance Sheet Date 31 12 2005
Date Month Year
II. Capital raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
NIL NIL
Bonus Issue Private Placement
NIL NIL
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities 1734066 Total Assets * 1734066
Sources of Funds
Paid-up Capital 112651 Reserves & Surplus 1621415
Signature to Schedules 1 to 15
FOR AND ON BEHALF OF THE BOARD