Registered number: M Ireland Limited. Annual report and financial statements for the year ended 31 December 2010

Transcription

1 Registered number: Annual report and financial statements for the year ended 31 December 2010

2 Annual report and financial statements for the year ended 31 December 2010 Contents Directors' report Independent auditors' report Profit and loss account Balance sheet Pages

3 1 Directors' report for the year ended 31 December 2010 The directors present their report and the audited financial statements of the company for the year ended 31 December Business review and principal activity The principal activity of the company is the marketing of a range of coated materials and other related products and services. These include abrasives, adhesives, cleaning materials, tapes, reflective materials, personal safety and office stationery products. Also it serves markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, and health information systems. Despite the downturn in the global economy the company recorded a 38.7% gross margin and 11.9% operating profit. The company was incorporated on 5 December 2008 and was formerly known as Haxton Limited. All trade and assets were transferred from 3M United Kingdom Public Limited Company on 1 51 March Business environment The company operates across many segments in the industrial, consumer and healthcare markets. Although a significant proportion of 3M's revenues are derived from the public sector, levels of expenditure have largely been maintained in this area. The global downturn impacted on the level of business but, during the year, there were signs of stabilisation, if not recovery in many markets. The company will continue to focus on markets rooted within the Ireland economy, such as the industrial and security markets, focusing on providing quality products that can help improve customers' levels of productivity. The company is also well positioned to respond to increasing customer demand for environmentally sustainable operations. Strategy The company's main focus is to deliver continued growth in revenue and returns in the growing and rooted segments in Ireland. This will be achieved through organic growth in the core businesses, adjacent markets and new markets. This overall strategy has several elements: Maintaining and growing market share in the core businesses; Achieving a balanced business portfolio; Investing in new market spaces; A continued commitment to our core competency of new product development with increased speed and agility in bringing these new products to market; Continued operational excellence, particularly in our manufacturing, supply chain and customer service operations; and The ongoing up-skilling of our organisation, aiming for world class standards in our technical, sales and marketing communities.

4 2 Directors' report Outlook The main priorities for 2011 are: Maintaining sustainable, profitable growth Increasing market share Driving operational excellence in marketing and the supply chain Improving productivity in our support functions Enhancing sales and marketing performance Improving our new product introduction programme Improving gross margins. Financial risk management The company's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. In order to ensure stability of cash out flows and hence manage interest rate risk, the company has a policy of obtaining any necessary funding from within the 3M group and interest is chargeable at the LIBOR rate. Price risk The company is exposed to commodity price risk as a result of its operations. The company's Sourcing Department negotiates fixed price contracts whenever feasible. The company has no direct exposure to equity securities price risk as it holds no listed or other equity investments. Credit risk The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the directors. The Customer Financial Services Department notify the directors of any concerns regarding the financial stability of customers. Liquidity risk The company obtains any necessary finance from within the 3M group. Interest is chargeable at the LIBOR rate. Interest rate cash flow risk The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances and intergroup loans, all of which earn interest at a variable rate. The company has a policy of obtaining debt finance from within the 3M group and operates a cash pooling policy on company cash balances. This policy is considered appropriate, given the size and nature of the company's operations

5 3 Directors' report Results and dividends The profit and loss account for the year is set out on page 9. There have been no interim dividends paid (2009: nil). No final dividend (2009: nil) is proposed Research and development The company has a strong commitment to research and development, the cost of which is mainly borne by the ultimate parent company, 3M Company, USA. Market value of land and buildings The freehold and leasehold land and buildings are specific to the company's operations and it is not considered significant to the shareholders to put a market value on these assets. Directors The directors of the company at 31 December 2010, all of whom have been directors for the year ended on that date and up to the date of signing the financial statements, unless otherwise stated, are listed below: K Brownlee (resigned 29April 2011) C Pikett P Knowles D Gray (appointed 29April 2011) Directors' and secretary's interests The beneficial interests, including the interests of spouses and minor children, of the directors and secretary in office at 31 December 2010 in the share capital of the company's immediate parent company, 3M United Kingdom Public Limited Company were as follows: K Brownlee C Pikett P Knowles Ordinary Shares of 1.00 each in 3M United Kingdom Public Limited Company 31 December 2010

6 4 Directors' report Directors' and secretary's interests (continued) The directors and secretary and their families have the following interests in the shares of the other group companies at 31 December 2010: K Brownlee C Pikett P Knowles K Brownlee C Pikett P Knowles Shares Options in 3M Company 31 December January ,972 15,731 14,855 10, Ordinary shares of $0.01 each in 3M Company 31 December January The directors and secretary and their families had no other interests in the shares of the company or any other group company at 31 December Charitable contributions Charitable contributions paid during the year amounted to 3,581 (2009: 31,004) for environmental, educational and relief of suffering purposes. The company did not make any political donations in the year (2009: nil). Employment policy lt is the policy of the company that disabled people shall be considered for all job vacancies and subsequent career and promotion opportunities on the basis of their aptitudes and abilities. The company continues to assist with the retraining and rehabilitation of staff who become disabled whilst in the company's employment. Additionally, it is the policy of the company that there shall be no unjustifiable discrimination in any aspect of employment on the grounds of race, colour, religion, national origin, gender or marital status.

7 5 Directors' report Employee involvement The company continues to attach great importance to the quality of its communications with all employees. Employees are provided with information about the performance of the company through regular management briefing notes. More specific issues are communicated by means of corporate or divisional publications and videos. Regular consultation takes place with employees concerning work methods and organisation so that their views can be taken into account in all matters which may affect their interests. The company encourages involvement of employees in the company's performance by offering schemes such as General Employee Stock Purchase Plan, Management Stock Option Plan, performance related pay and annual incentive programmes. Creditor payment policy The company is a registered supporter of the Better Payment Practice Group's 'Better Payment Practice Code' to which it subscribes when dealing with the majority of its trade creditors. Copies of the Better Payment Practice Group's code are available from the Department of Trade and Industry. For other suppliers, the company's policy is to: (a) (b) (c) settle the terms of payment with those suppliers when agreeing the terms of each transaction; ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and pay in accordance with its contractual and other legal obligations. The payment policy applies to all payments to creditors for revenue and capital supplies of goods and services without exception. The company's average creditor payment year at 31 December 2010 was 62 days ( days). Statement of directors' responsibilities in respect of the Annual Report and the financial statements The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable Irish law and generally accepted accounting practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Irish company law requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

8 6 Directors' report Statement of directors' responsibilities in respect of the Annual Report and the financial statements (continued) The directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper books of account, which disclose with reasonable accuracy at any time financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and Irish Statute comprising the Companies Acts, 1963 to They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Books of account The measures taken by the directors to secure compliance with the company's obligation to keep proper books of account are the use of appropriate systems and procedures and employment of competent persons. The books of account are kept at 3M Centre, Cain Road, Bracknell, Berkshire RG 12 8HT. Independent auditors The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office in accordance with Section 160(2) of the Companies Act, On behalf of the Board ~ C Pikett 21 September 2011

9 7 Independent auditors' report to the members of 3M Ireland Limited We have audited the financial statements on pages 9 to 28. These financial statements have been prepared under the accounting policies set out in the statement of accounting policies on pages 11 to 14. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Directors' Report and the financial statements in accordance with applicable Irish law and the accounting standards issued by the Accounting Standards Board and published by The Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the Statement of Directors' Responsibilities on page 5. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the company's members as a body in accordance with Section 193 of the Companies Act, 1990 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to We state whether we have obtained all the information and explanations we consider necessary for the purposes of our audit and whether the financial statements are in agreement with the books of account. We also report to you our opinion as to: whether the company has kept proper books of account; whether the directors' report is consistent with the financial statements; and whether at the balance sheet date there existed a financial situation which may require the company to convene an extraordinary general meeting; such a financial situation may exist if the net assets of the company, as stated in the balance sheet, are not more than half of its called-up share capital. We also report to you if, in our opinion, any information specified by law regarding directors' remuneration and directors' transactions is not disclosed and, where practicable, include such information in our report. We read the directors' report and consider the implications for our report if we become aware of any apparent misstatements within it.

10 Independent auditors' report to the members of 3M Ireland Limited (continued) Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. lt also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements: give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the company's affairs as at 31 December 2010 and of its profit for the year then ended; and have been properly prepared in accordance with the requirements of the Companies Acts, 1963 to We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The financial statements are in agreement with the books of account. In our opinion the information given in the directors' report on pages 1 to 6 is consistent with the financial statements. The net assets of the company, as stated in the balance sheet on page 10 are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2010 a financial situation which under Section 40 (1) of the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the company. 8 PricewaterhouseCoopers up Chartered Accountants and Registered Auditors Reading

11 10 Balance sheet as at 31 December 2010 Fixed assets Intangible assets Tangible assets Current assets Stock Debtors: Amounts falling due within one year Debtors: Amounts falling due after more than one year Cash at bank and in hand Creditors -Amounts falling due w ithin one year Net current liabilities Total assets less current liabilities Provisions for liabilities and charges Net assets Capital and reserves Called up share capital Profit and loss account Other reserve Total shareholders' funds On behalf of the board Notes '000 '000 2,359 2,788 4,681 5,001 7,040 7, ,154 14, ,553 1,184 22,862 15,988 (26,382) (23,389) (3,520) (7,401) 3, (359) (291) 3, ,891 (141) , C Pikett 21 September 2011 DGray

12 9 Profit and loss account for the year ended 31 December Total Total Notes '000 '000 Tu mover 4,5 29,818 25,365 Cost of sales 2 (18,285) (14,554) Gross profit 11,533 10,811 Net operating expenses 2 (7,996) (7,202) Exceptional items 3 (3,200) Operating profit 6 3, Interest receivable and similar income Profit on ordinary activities before taxation 3, Tax on profit on ordinary activities 10 (550) (565) Profit I (Loss) for the financial year 20,21 3,032 (141) There are no material differences between the profit on ordinary activities before taxation and the profit I (loss) for the financial year stated above and their historical cost equivalents. The company has no recognised gains and losses other than those included in the profit and loss account, and therefore no separate statement of total recognised gains and losses has been prepared. On behalf of the board C Pikett 21 September 2011 DGray

13 11 for the year ended 31 December Accounting policies The significant accounting policies adopted by the company are as follows: Basis of preparation These financial statements have been prepared in accordance with applicable accounting standards in Ireland and Irish Statute comprising the Companies Act, 1963 to Accounting standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Going Concern The accounts have been prepared on a going concern basis, despite the company being in a net current liability position. This is due to amounts owed to group undertakings which are not expected to be recalled within the next 12 months. Historical cost convention The financial statements are prepared under the historical cost convention, modified by the revaluation of certain land and buildings. Consolidated financial statements The company is included in the full consolidation of the financial statements of its ultimate parent, 3M Company. In accordance with the provisions of the European Communities (Companies: Group Accounts) Regulations 1992, group financial statements have not been prepared. Related party transactions The company is a wholly owned subsidiary of 3M Company. Transactions with 3M Company and other wholly owned subsidiary companies are not disclosed as the company has taken advantage of the exemption available under FRS 8 "Related Party Disclosures" from disclosing such transactions. Cash flows is a wholly owned subsidiary of 3M Company. The financial statements of 3M Company include a consolidated cash flow statement which includes those of the company and its subsidiaries. Consequently, in accordance with FRS 1 (Revised 1996) 'Cash Flow Statements', the company is exempt from preparing a cash flow statement.

14 12 1 Accounting policies (continued) Goodwill Goodwill arising on consolidation represents the excess of the fair value of the consideration given over the fair value of the identifiable net assets acquired. Under the accounting standard FRS 1 0 'Goodwill and Intangible Assets', goodwill arising on acquisitions has been capitalised and is being amortised through the profit and loss account on a straight line basis over its estimated economic life, usually ten years. The company evaluates the carrying value of goodwill in each financial year to determine if there has been an impairment in value. The impairment reviews are performed by the directors on an annual basis. Tangible fixed assets Certain fixed assets are stated at a valuation made by professional valuers on the transfer of the assets from 3M United Kingdom Public Limited Company. The company has adopted the option within the transitional arrangements of FRS 15 'Tangible Fixed Assets' to retain the book values of fixed assets at their previously revalued amounts. The cost of other tangible fixed assets is their purchase cost, together with any incidental expenses of acquisition. Tangible fixed assets are stated at historic purchase costs less accumulated depreciation. Depreciation is calculated so as to write off the cost of tangible fixed assets, less their estimated residual values, on a straight line basis over the expected useful economic lives of the assets concerned. The principal estimated lives used for this purpose are: Freehold /leasehold buildings Plant and machinery Fixtures and fittings Years Depreciation is not provided in respect of freehold land. Impairment reviews are conducted only where there is an indication that assets are impaired, in accordance with FRS 11. Where impairments are identified, the carrying amount of the asset is immediately written down to recoverable amount, being the higher of value in use and net realisable value). The impairment loss is recognised in the profit and loss account. Turnover Turnover, which excludes value added tax and trade discounts, represents the invoiced value of goods and services supplied. Revenue is recognised on delivery of the product or service or once all risks and rewards have passed to the customer. Maintenance income is deferred to the future years to which it relates.

15 13 1 Accounting policies (continued) Turnover (continued) The company recognises turnover from sales of software licenses to end-users or resellers upon persuasive evidence of an arrangement, delivery of the software and determination that collection of a fixed or determinable fee is reasonably assured. When the fees for software upgrades and enhancements, maintenance, consulting and training are bundled with the license fee, they are unbundled using the company's objective evidence of the fair value of the elements represented by the company's customary pricing for each element in separate transactions. If evidence of fair value exists for all undelivered elements and there is no such evidence of fair value established for delivered elements, turnover is first allocated to the elements where fair value has been established and the residual amount is allocated to the delivered elements. If evidence of fair value for any undelivered element of the arrangement does not exist all turnover from the arrangement is deferred until such time that evidence of fair value exists or undelivered elements of the arrangement are delivered. If the arrangement includes acceptance criteria, turnover is not recognised until the company can objectively demonstrate that the software or service can meet the acceptance criteria, or the acceptance year lapses, whichever is earlier. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. A net deferred tax asset is recognised as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely then not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on an undiscounted basis. Stock and work in progress Stock and work in progress are stated at the lower of cost and net realisable value. In general cost is determined on a first in first out basis and includes transport and handling costs. Net realisable value is the price at which stock can be sold in the normal course of business after allowing for the costs of realisation and, where appropriate, the costs of conversion from their existing state to a finished condition. Where necessary, provision is made for obsolete, slow moving and defective stock.

16 14 1 Accounting policies (continued) Foreign currencies Transactions denominated in foreign currencies are translated into euros at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into euros at the rate of exchange ruling at the balance sheet date. All foreign exchange differences are taken to the profit and loss account in the year in which they arise. Dividends Interim dividends are recognised when they are paid. Final dividends are recognised when the company has declared them in a general meeting. Provisions Provisions are recognised when the company has a present obligation as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Share-based payments The ultimate parent company, 3M Company, operates an equity-settled, share-based compensation plan. Certain employees of the company are awarded options over the shares in the ultimate parent. The fair value of the employee services received in exchange for these grants of options is recognised as an expense over the vesting year, with a corresponding increase in Other Reserves (representing a capital contribution by the parent). The total amount to be expensed over the vesting year is determined by reference to the fair value of the options granted, excluding the impact of any nonmarket vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the company revises its estimates of the number of options that are expected to vest. lt recognises the impact of the revision to original estimates, if any, in the profit and loss account, with a corresponding adjustment to Other Reserves. In accordance with FRS 20, fair value calculations have only been made in respect of share options awarded after 7 November 2002 that remained unvested at 1 January For all other options, the company recognises within Other Reserves the potential recharge from the ultimate parent company for the cost of options outstanding at the year end (based upon the difference between the option exercise prices and the market value at the year end). Movements in the underlying potential recharge are reflected in the profit and loss account for the year. Upon exercise, 3M Company makes a recharge to the company in respect of share options granted to the company's employees. When incurred, these intercompany charges are offset in Other Reserves against the relevant capital contribution. If the amount of the intercompany charge exceeds the original capital contribution, that excess is treated as a distribution from the company to its ultimate parent.

17 15 1 Accounting policies (continued) Deferred income Revenue is recognised when it is realised or realisable, earned and meets the following criteria: Persuasive evidence of an economic arrangement exists The price between the seller and the buyer is substantially fixed or determinable. Delivery has occurred or services have been rendered. Physical destruction, damage, or theft of the merchandise would not change the buyer's obligation to the seller. In other words, the risks and rewards of ownership have passed to the buyer No significant obligations exist for the seller to help the buyer resell the merchandise. Collectability is reasonably assured. The seller has received full payment, or the buyer is indebted to the seller and the indebtedness is not contingent on the resale of the merchandise. A reasonable estimate can be made of the amount of future returns. Any revenue not meeting these criteria would be deferred Operating leases Costs in respect of operating leases are charged to the profit and loss account on a straight line basis over the lease term. 2 Net operating expenses Total Total '000 '000 Turnover 29,818 25,365 Cost of sales (18,285) {14,554) Gross profit 11,533 10,811 Distribution costs (5,447) (4,477) Administrative expenses (3,045) (2,839) Total operating expenses (8,492) (7,316) Charged to group undertakings Total net operating expenses (7,996) (7,202) Exceptional items (3,200) Operating profit 3,

18 16 3 Exceptional Items During 2009 the company recorded an exceptional operating expense of 3,200,000 in respect of the impairment of goodwill in Cuno Ireland Limited. See note 11 for further details. 4 Segmental Analysis by Geographical Area The United Kingdom and Ireland is the geographical origin and destination of all sales. 5 Segmental Analysis by Class of Business The analysis by class of business of the company's turnover is set out below: Turnover 2010 '000 Consumer and Office 1,319 Safety, Security and Protection 3,977 Display and Graphics 2,045 Electra and Communications 4,995 Industrial and Transportation 8,256 Healthcare 9,226 29, '000 1,156 4,425 1,514 4,067 6,701 7,502 25,365

19 17 6 Operating profit Operating profit is stated after charging/( crediting): Wages and salaries Severance Social security costs Other pension costs - defined contribution (note 18) Share based payment - fair value of employee services Share based payment- movement in potential recharge to ultimate parent in respect of options not being fair valued Staff costs Profit on disposal of fixed assets Amortisation of intangible fixed assets (note 11) Depreciation of tangible fixed assets- owned (note 12) Operating lease charges Exceptional items Foreign exchange gain '000 '000 3,201 2, (2) ,333 3,347 (26) (3) ,200 (280) (153) Services provided by the company's auditor and network finns During the year the company obtained the following services from the company's auditor at costs as detailed below: Payable to PricewaterhouseCoopers LLP and network finns: Audit services : fees payable for the audit of the company 2010 ' ' Non-audit services: Services relating to taxation Total services

20 18 7 Directors' emoluments Aggregate emoluments and benefits (excluding gains on exercise of share options) 2010 ' ' The emoluments of K Brownlee and C Pikett are paid by 3M United Kingdom Public Limited Company (a sister company) and they are deemed to be wholly attributed to services to that company. One director is accruing benefits under the money purchase scheme (2009: one). Two directors exercised share options in the ultimate parent company during the year (2009: none). 8 Employee information The average monthly number of persons (including executive directors) employed by the company during the year was: By activity Distribution and selling Administration 9 Interest receivable and similar income Number Number '000 '000 Interest receivable on loans to group undertakings Total interest receivable and similar income Tax on profit on ordinary activities Current tax: Corporation tax on profits for the year Total current tax Deferred tax: Origination and reversal of timing differences Adjustment in respect of previous years Total deferred tax (note 17) Tax on profit on ordinary activities '000 ' (8) (24) (51) (8) (75)

21 19 10 Tax on profit on ordinary activities (continued) The tax assessed for the year is higher (2009: higher) than the standard rate of corporation tax in Ireland of 12.5%. The differences are explained below: '000 '000 Profit on ordinary activities before tax Profit on ordinary activities before tax multiplied by standard rate of corporation tax in Ireland of 12.5% (2009:12.5%) Effects of: Amounts not deductible for tax purposes Accelerated capital allowances and other timing differences Current tax charge for the year 3, Intangible assets Cost At 1 January 2010 At 31 December 2010 Accumulated amortisation At 1 January 2010 Charge for the year At 31 December 2010 Net book amount At 31 December 2010 At 31 December 2009 Purchased Goodwill '000 6,908 6,908 4, ,549 2,359 2,788 In 2006, 3M United Kingdom Public Limited Company purchased the trade and certain assets and liabilities of Cuno Ireland Limited. This purchase was accounted for as an acquisition and transferred to on incorporation. The goodwill arising on this acquisition is being amortised on a straight line basis over 1 0 years.

22 20 12 Tangible assets Land and Plant and Fixtures Total Buildings Machinery and Fittin s '000 '000 '000 '000 Cost At 1 January , ,217 Additions 7 7 Disposals (108) (108) At 31 December , ,116 Accumulated depreciation At 1 January Charge for the year Disposals (83) (83) At 31 December Net book amount at 31 December , ,681 Net book amount at 31 December , , Stock '000 '000 Finished goods and goods for resale Debtors '000 '000 Amounts falling due within one year: Trade debtors 4,675 4,550 Amounts owed by group undertakings 15,113 9,629 Other debtors 4 4 Recoverable Corporation Tax Prepa~ments ,154 14,729 Amounts falling due after more than one year: Deferred tax {see note 17l Total debtors 20,237 14,804 Amounts owed by group undertakings bear interest at the LIBOR rate.

23 21 15 Creditors - Amounts falling due within one year Trade creditors Amounts owed to group undertakings Other taxation and social security Other creditors Corporation tax Accruals and deferred income 2010 ' , , ' , ,389 Amounts owed to group undertakings are unsecured, interest free and repayable on demand. 16 Provisions for liabilities and charges At 1 January 2010 Charged to the profit and loss account Utilised in the year At 31 December 2010 Dilapidation costs ' (12) 359 This is a provision for dilapidation costs on leased buildings. This provision is expected to be utilised within the next year.

24 22 17 Deferred tax The deferred tax asset recognised in the financial statements is as follows: Excess of depreciation over capital allowances Share options provision Other short-term timing differences Total deferred tax asset At 1 January Deferred tax credit in profit and loss account At 31 December '000 (5) (28) (50) (83) (75) (8) (83) The directors believe it is appropriate to recognise the deferred tax assets of 83,000 as there will be sufficient future profits to utilise the provision. 18 Pension and similar obligations The company established a defined contribution scheme to provide benefits to employees. Defined contribution scheme The cost of contributions paid by the company to the defined contribution scheme during the year amounts to 553,000 (2009: 356,000). 19 Called up share capital Authorised, allotted, called up and fully paid 50,000 ordinary shares of 1 each '000 ' ,000 shares were issued at par value on 5 December 2008, following incorporation of the company.

25 23 20 Reserves Profit and loss Other Reserve Reserve '000 '000 At 1 January 2010 (141) 188 Profit for the financial year 3,032 Share based payment: services provided 32 At 31 December , Reconciliation of movement in total shareholders' funds Profit I (loss) for the financial year Share capital Increase in other reserves (note 22) Net addition to shareholders' funds Opening shareholders' funds Closing shareholders' funds 2010 '000 3, , , '000 (141) Share-based payments The parent company issues Management Stock Ownership Plan (MSOP) options to eligible employees annually in May. Under the plan, the parent company has principally issued stock options to management employees that are granted at market value on the date of grant. In addition to grants to management employees, the company makes other minor stock options grants to employees, for which vesting terms and option lives are not substantially different, and also makes minor grants of restricted stock units and other stock-based grants. The period varies from one to three years with an expiration date of 1 0 years from the date of the grant. There were 8 participants in the plan with outstanding options at 31 December 2010 (2009: 6). Exercise of an option is subject to continued employment.

26 24 22 Share-based payments (continued) A reconciliation of option movements over the year to 31 December 2010 is shown below: Outstanding at the start of the year 15, Weighted Number of Weighted Average Number of Average Exercise Options Exercise Price Options Price Granted 2, ,039 Cancelled (400) Exercised {1,280) (400) Outstanding at end of the year 16, ,239 $ $ Exercisable at end of the year 12, , The weighted average fair value of options granted in the year was $37,505 (2009: $15,652). For options outstanding at the end of the year, the range of exercise prices and weighted average remaining contractual life are as follows: 31 December 2010: Oetions Outstanding Oetions Exercisable Weighted Weighted Weighted average average average Weighted remaining exercise remaining average contractual price contractual exercise life life price Range of exercise Number Months $ Number Months $ rices $ $ , $ $ , , $ $ , , $ $ , , $ $ , , ,232 12,840

27 25 22 Share-based payments (continued) 31 December 2009: Oetions Outstanding Oetions Exercisable Weighted Weighted Weighted average average average Weighted remaining exercise remaining average contractual price contractual exercise life life price Range of exercise Number Months $ Number Months $ rices $ $ , $ $ , , $ $ , , $ $ , , $ $ , , $ $ , , ,239 13,211 The weighted average share price during the year for options exercised over the year was $56.62 (2009: $43.35). The total charge for the year relating to employee share based payment plans for which fair value accounting is being applied was 21, 106 (2009: 83,504), all of which related to equitysettled share based payment transactions. Options were valued using the Black-Scholes option-pricing model. No performance conditions were included in the fair value calculations. The fair value per options granted and the assumptions used in the calculation are as follows: Share price at grant date $78.72 $ $87.35 Exercise price $78.72 $ $87.35 Number of employees 3 5 Shares under option 2,273 16,039 Vesting year (years) 3 3 Expected volatility 25.5% 30.3% Option life (years) Expected life (months) Risk free rate 2.8% 2.2% Expected dividend yield 2.5% 2.3% Fair value per option $16.50 $ $19.83

28 26 22 Share-based payments (continued) Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a year. For the 2010 annual grant date, the company estimated the expected volatility based upon the average of the most recent one year volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life volatility of 3M Company's shares, and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants and assuming that options outstanding are exercised at the midpoint of the future remaining term. The risk free rate of return is the average return on zero-coupon US Treasury bonds. Within accruals is an amount of 74,552 (2009: 76,354) associated with National Insurance provision relating to unapproved share options. Restricted stock units Beginning in 2007, the 3M Group began reducing the number of traditional stock options granted under its long-term incentive compensation plan by reducing the number of employees eligible to receive annual grants and by shifting a portion of the annual grant away from traditional stock options primarily to restricted stock units. The following table summarises the MSOP restricted stock and restricted stock unit activity during the year ended 31 December 2010: Weighted Number of Weighted average stock units average Number of exercise exercise stock units price price $ $ Outstanding at the start of the year 1, Granted , Cancelled Exercised {144~ Outstanding at end of the year 1, , Exercisable at end of the ~ear The weighted average fair value of stock units granted in the year was $39,754 (2009: $16,287).

29 27 22 Share-based payments (continued) 31 December 2010 Range of exercise rices $ $54.99 $70.00-$74.99 $ $79.99 Stock units outstanding Weighted average Weighted remaining average contractual exercise life price Number Months $ ,397 Stock units exercisable Weighted average Weighted remaining average contractual exercise life price Number Months $ 31 December 2009: Stock units outstanding Stock units exercisable Weighted average remaining contractual life Weighted average exercise price Weighted average remaining contractual life Weighted average exercise price Range of exercise prices Number Months $ Number Months $ $ $ $70.00-$ $ $ ,036

30 28 22 Share-based payments (continued) The total charge for the year relating to stock unit employee share based payment plans for which fair value accounting is being applied was 13,279 (2009: 27,763), all of which related to equity-settled share based payment transactions. Options were valued using the Black-Scholes option-pricing model. No performance conditions were included in the fair value calculations. The fair value per options granted and the assumptions used in the calculation are as follows: Weighted average share price at grant date Weighted average exercise price Number of employees Shares under option Vesting year (years) Option life (years) Expected life (months) Fair value per option 2010 $78.72 $ $ $ $79.51 $54.11-$ , $ $ Subsequent events There were no subsequent events affecting the company since the year end. 25 Ultimate and immediate parent companies is a wholly owned subsidiary of 3M United Kingdom Public Limited Company, a company incorporated in the United Kingdom. The directors regard 3M Company, a company incorporated in the United States of America, as the ultimate parent company and controlling party. This is the largest, and also the smallest, group of which the company is a member and for which group financial statements are prepared. Copies of the consolidated financial statements of the ultimate parent company may be obtained from 3M Investor Relations, 3M Center, Building 225-SN-04 St Paul, MN , USA. Financial statements of certain of the US and UK companies are also available on the internet at The company has taken advantage of the exemption allowed by FRS 8 Related Party Disclosures' from disclosing transactions with other group companies that are also wholly owned by 3M Company. 26 Approval of financial statements These financial statements were approved by the directors on 21 September 2011