Home  »  Company  »  Castrol India  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Castrol India Ltd.

Dec 31, 2016

b. Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 5/- per share (2015 : Rs. 5/- per share). Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approvals of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees.

During the year ended December 31, 2016, the Board declared an amount of Rs. 4.50 (2015 : Rs. 4.00) per share as interim dividend which was distributed to equity shareholders. The amount of interim dividend distributed to equity shareholders was Rs. 222.55 crores (2015 : Rs. 197.82 crores). In addition, the Board has also declared a Special Dividend of Rs. 2.00 per share (2015 : Nil). The amount of Special Dividend to be distributed to equity shareholders is Rs. 98.91 crores (2015 : Rs. Nil). The Board has also proposed a final dividend of Rs. 4.50 (2015 : Rs. 5.00) for distribution to equity shareholders. The amount of final proposed dividend to be distributed to equity shareholders shall be Rs. 222.55 crores (2015 : Rs. 247.28 crores). All dividends aggregating to Rs. 11.00 per share (2015 : Rs. 9.00 per share).

I n the event of the Company being liquidated, since the equity shares of the Company are fully paid-up, there would be no additional liability on the shareholders of the Company. However, post settlement of the liabilities of the Company, the surplus, if any, would be distributed amongst the shareholders in proportion to the number of shares held by each one of them.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

1. Employee benefits

Defined contribution plan Amounts recognised as an expense

Contribution to Provident and Other Funds'' in Note 18 includes Rs. 2.92 crores (2015 : Rs. 3.23 crores) for Pension Fund, ESIC and Labour Welfare Fund. Note 19 includes ‘Insurance'' Rs. 1.51 crores (2015 : Rs. 1.83 crores) for Medical Insurance benefits and post retrial medical benefit scheme. Salaries, wages and bonus in Note 18 includes Rs. 2.01 crores (2015 : Rs. 2.11 crores) for Share match.

The company has incurred redundancy cost of Rs. 3.24 crores (2015 : Rs. 4.82 crores) due to the re-organisation activity, this is included in ‘Employee benefits expense'' - Note 18.

General description of defined benefit plan Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, retirement or death, whichever is earlier. The benefit vests after five years of continuous service.

Provident fund

The Provident Fund (administered by a trust) is a defined benefit scheme whereby the Company deposits amounts determined as a fixed percentage of basic pay to the fund every month. The actuary has provided a valuation and determined the fund assets and obligations as at December 31, 2016. Further, it has been determined that the yield on the investments of the trust is adequate to meet the obligation towards the payment of the interest rate notified by the Government.

2. Employee benefits (contd.)

Pension benefit to past employees

Under the Company''s pension scheme, certain categories of employees, on retirement, are eligible for monthly differential pension which is accounted for on an actuarial basis as on the Balance Sheet date.

Amounts recognised as an expense

Defined benefit plan

Gratuity in note 18 includes gratuity cost of Rs. 3.37 crores (2015 : Rs. 6.44 crores). Contribution to Provident and other funds in note 18 includes Rs. 2.92 crores (2015 : Rs. 6.06 crores) for Provident fund. Salaries, wages and bonus in note 18 includes pension benefit to past employees, Rs. 0.20 crore (2015 : Rs. 0.20 crore).

Basis used to determine expected rate of return on assets:

Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 6.80% (2015 : 8.05%).

3. Leases

Operating Lease: Company as lessee

Office premises, residential flats, motor cars and equipments are obtained on operating lease. The lease terms range from one year to four years and are renewable at the option of the Company.

4. Segment information

The business segment has been considered as the primary segment.

The Company has integrated its organisation structure with respect to its automotive and non-automotive business considering that the synergies, risks and returns associated with business operations are not predominantly distinct. The Company has aligned its internal financial reporting system in line with the new organisation structure. As a result the Company''s business segment consists of a single segment of “Lubricants” w.e.f. January 1, 2016 in terms of Accounting Standard -17.

During the previous year the Company was organised into two business segments, Automotive and Non-Automotive.

The above business segments have been identified considering:

- The customers

- The differing risks and returns

- The organisation structure

- The internal financial reporting system

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

* The Company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received.

5. Capitalisation of expenditure

During the year, the Company has capitalised the following expenses which is attributable to the construction activity in general and included in the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amount capitalised by the Company.

6. Related party disclosures as required under AS-18, “Related Party Disclosures”, are given below:

A. Name of the related party and nature of relationship where control exists:

(a) Holding Companies Castrol Limited, U.K. (Holding Company of Castrol India Limited)

Burmah Castrol PLC (Holding Company of Castrol Limited, U.K.)

BP PLC (Holding Company of Burmah Castrol PLC), Ultimate Holding Company

B. Name of the related party and nature of relationship where transaction have taken place during the year:

(a) Fellow Subsidiaries AsPac Lubricants (Malaysia) Sdn. Bhd. BP Korea Limited (where transaction exists)

BP (China) Industrial Lubricants Limited BP Lubricants USA Inc.

BP Australia Pty Limited BP Marine Limited

BP Business Service Centre Asia BP Mauritius Limited

BP Castrol Lubricants (Malaysia) Sdn. Bhd. BP Middle East (Auto and Marine Lubes)

BP - Castrol (Thailand) Limited BP Petrolleri Anonim Sirketi

BP Corporation North America Inc. BP S.A. Pty Oil Hq

BP Europa SE BP Shipping Limited

BP Europa SE BP Belgium BP Singapore Pte. Limited

BP Europa SE Zweigniederlassung - BP BP Southern Africa Proprietary Limited Austria

BP Exploration (Alpha) Limited Castrol (Shenzhen) Company Limited

BP France Castrol Australia Pty Limited

BP India Services Private Limited Castrol Industrial North America Inc.

BP International Limited Lubricants UK Limited

BP Italia SPA PT Castrol Indonesia

BP Japan K.K.

(b) Key management personnel Omer Dormen Managing Director (w.e.f. 12.10.2015)

(where transaction exists)

Rashmi Joshi Director Finance Jayanta Chatterjee Director Supply Chain

Ravi Kirpalani Managing Director (up to 11.10.2015) & thereafter Executive Director (up to 31.12.2015)

7. The Company has received an order from Maharashtra Sales Tax Department for the financial year 2009-10, 2007-08 and 2010-11 demanding Rs. 255.00 crores, Rs. 306.00 crores and Rs. 264.00 crores respectively towards sales tax (including interest). The demand pertains to sale of goods made by the Company in the states other than Maharashtra, where applicable taxes have been paid as per the provisions of law. Also the movement of goods from Maharashtra was not pursuant to any contract/order from customers in other states hence the understanding of operations/systems recorded in the assessment orders are not factually correct. The Company''s tax payment methodology in respect of the goods sold is adequately supported by robust legal grounds/ precedents and in Company''s opinion the said demand is unjustified. The Company has filed the appeal against these orders. The management believes that the findings in the orders are not sustainable and that the Company has a strong case based on the facts of the matter. The Company does not expect any liability on account of the order received from Maharashtra Sales Tax Department. Hence, the Company has not made any provision for any liability in this regard in the current financial statements.

8. Previous year figures

The Company has reclassified previous year figures to conform to this year''s classification.


Dec 31, 2014

A. Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 5/- per share (2013: Rs. 10/- per share). Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approvals of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees.

During the year ended December 31, 2014, the amount of per share interim dividend recognised as distribution to equity shareholders was Rs. 3.50 (2013 : Rs. 3.50). The amount of interim dividend distributed to equity shareholders is Rs. 173.10 crores (2013 : Rs. 173.10 crores). In addition, the Company has also proposed a per share final dividend recognised as distribution to equity shareholders of Rs. 4.00 (2013 : Rs. 3.50). The amount of final proposed dividend distributed to equity shareholders is Rs. 197.82 crores (2013 : Rs. 173.10 crores). Both dividends aggregating to Rs. 7.50 per share (2013 : Rs. 7.00 per share).

In the event of the Company being liquidated, since the equity shares of the Company are fully paid-up, there would be no additional liability on the shareholders of the Company. However, post settlement of the liabilities of the Company, the surplus, if any, would be distributed amongst the shareholders in proportion to the number of shares held by each one of them.

1.1.a Exceptional item

During the year ended December 31, 2013, the Company completed the sale of two of its non-operating plants. The resulting gain of Rs. 22.80 crores has been disclosed as an exceptional item.

2. Employee benefits

Defined contribution plan Amounts recognised as an expense

Contribution to Provident and Other Funds'' in Note 18 includes Rs. 3.35 crores (2013 : Rs. 3.23 crores) for Pension Fund, ESIC and Labour Welfare Fund. Note 19 includes ''Insurance'' Rs. 1.62 crores (2013 : Rs. 1.31 crores) for Medical Insurance benefits and post retiral medical benefit scheme. Salaries, wages and bonus in Note 18 includes Rs. 2.34 crores (2013 : Rs. 2.30 crores) for Sharematch.

General description of defined benefit plan Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, retirement or death, whichever is earlier. The benefit vests after five years of continuous service.

Provident fund

The Provident Fund (administered by a trust) is a defined benefit scheme whereby the Company deposits amounts determined as a fixed percentage of basic pay to the fund every month. The actuary has provided a valuation and determined the fund assets and obligations as at December 31, 2014. Further, it has been determined that the yield on the investments of the trust is adequate to meet the obligation towards the payment of the interest rate notified by the government.

Survivor protection scheme

Till 2012, the Company provided an exgratia payment to the employee''s family/survivors over and above any survivor benefits payable to the employee under the retirement schemes, in the unfortunate event of an employee''s death whilst in service. In 2013, the Company has terminated the said plan and taken a life cover for all its employees.

Pension benefit to past employees

under the Company''s pension scheme, certain categories of employees, on retirement, are eligible for monthly differential pension which is accounted for on an actuarial basis as on the Balance Sheet date.

Amounts recognised as an expense

Defined benefit plan

Gratuity in note 18 includes gratuity cost of Rs. 4.45 crores (2013 : Rs. 4.34 crores). Contribution to provident and other funds in note 18 includes Rs. 1.53 crores (2013 : Rs. 6.97 crores) for provident fund. Salaries, wages and bonus in note 18 includes survivor protection (death benefit), pension benefit to past employees, Rs. 0.13 crore (2013 : Rs. (0.13) crore).

Basis used to determine expected rate of return on assets:

Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 8.20% (2013 : 9.30%)

3. Segment information

The business segment has been considered as the primary segment. The Company is organised into two business segments, Automotive and Non-Automotive.

The above business segments have been identified considering:

- The customers

- The differing risks and returns

- The organisation structure

- The internal financial reporting system

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

4. Contingent liabilities & commitments

As at As at December 31, 2014 December 31, 2013 Rupees in Crores Rupees in Crores

(a) Contingent liabilities

(1) Excise/sales tax/service tax demands made by the authorities, in respect of which appeals have been filed [refer note (a) below] 27.68 16.77

(2) Claims against the Company not acknowledged as debts estimated at:

— In respect of third parties - miscellaneous 1.16 0.98

(A) 28.84 17.75

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 17.06 7.33

(2) Long-term advertisement contracts 21.18 44.61

(B) 38.24 51.94

Total (A B) 67.08 69.69

Notes:

(a) The management does not expect these claim to succeed. Accordingly no provision for contingent liability has been recognised in the financial statements.

(b) A shareholder of the Company had filed a public interest petition in the Delhi High Court interalia challenging the allotment of 3,537,862 equity shares on preferential basis to Castrol Limited, UK. The said petition has been dismissed by the Delhi High Court on January 11, 2005. However, the shareholder has gone to appeal by way of a special leave petition to the Supreme Court of India. The appeal has been admitted but no interim relief has been granted. The matter has to-date not come up for hearing.

5. Capitalisation of expenditure

During the year, the Company has capitalised the following expenses which is attributable to the construction activity in general and included in the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amount capitalised by the Company.

6. Related party disclosures as required under AS-18, "Related Party Disclosures", are given below:

A. Name of the related party and nature of relationship where control exist:

(a) Holding Companies Castrol Limited, u.K. (Holding Company of Castrol India Limited)

Burmah Castrol PLC (Holding Company of Castrol Limited, u.K.)

BP PLC (Holding Company of Burmah Castrol PLC), ultimate Holding Company

B. Name of the related party and nature of relationship where transaction have taken place during the year:

(a) Fellow Subsidiaries

(where transaction exists)

AsPac Lubricants (Malaysia) Sdn. Bhd BP Lubricants uSA Inc

BP - Castrol (Thailand) Limited BP Marine Limited

BP (China) Industrial Lubricants Limited BP Mauritius Limited

BP Asia Pacific (Malaysia) Sdn. Bhd BP Middle East (Auto And Marine Lubes)

BP Australia Pty Limited BP Middle East Llc

BP Castrol K.K. BP Oil Belgium - Lubesco

BP Corporation North America Inc BP Oil International Ltd.

BP Europa SE BP Petrolleri Anonim Sirketi

BP Europa SE - BP Belgium (Branch) BP Products North America Inc

BP Europa SE Zweigniederlassung - BP BP Singapore Pte. Limited

Austria

BP Exploration (Alpha) Limited BP Southern Africa (Proprietary) Limited

BP Exploration Operating Company BP Taiwan Marketing Limited

Limited

BP France Castrol (China) Limited

BP France SA Branch Office (Trading as Castrol (Shenzhen) Company Limited BP Middle East)

BP India Services Private Limited Castrol (Shenzhen) Company Limited -

Shanghai Pudong

BP International Limited Castrol BP Petco Limited Liability Company

BP Italia SpA Castrol Industrial North America Inc

BP Japan K.K. Castrol Philippines, Inc

BP Korea Limited Lubricants uK Limited

(b) Key management personnel (where transaction exists)

Ravi Kirpalani Managing Director

Rashmi Joshi Executive Director (w.e.f. from 01.08.2013)

Sujit Vaidya Executive Director (up to 17.05.2013)

Jayanta Chatterjee Executive Director (w.e.f. from 30.10.2014) Bijay Kamath Executive Director (up to 31.07.2013)

7. Forward contracts and unhedged foreign currency exposures:

8. Previous year figures

The Company has reclassified previous year figures to conform to this year''s classification.


Dec 31, 2013

1. Corporate information

Castrol India Limited (the ''Company'') is a public limited company domiciled in India and incorporated under the provisions of the Compares Act, 1956. The Company is engaged in the business of manufacturing & marketing of Automotive, Non-Automotive Lubricants and related services.

2. Employee benefits

Defined contribution plan Amounts recognised as an expense

Contribution to Provident and Other Funds'' in note 18 includes Rs. 3.23 crores (2012 : Rs. 3.90 crores) for Pension Fund, ESiC and Labour Welfare Fund. Note 19 includes ''Insurance'' Rs. 1.31 crores (2012 : Rs. 1.31 crores) for Medical Insurance benefits and post retiral medical benefit scheme. Salaries, wages and bonus in note 18 includes Rs. 2.30 crores (2012 : Rs. 1.32 crores) for Sharematch.

General description of defined benefit plan Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, retirement or death, whichever is earlier. The benefit vests after five years of continuous service.

Provident fund

The Provident Fund (administered by a trust) is a defined benefit scheme whereby the Company deposits amounts determined as a fixed percentage of basic pay to the fund every month. The actuary has provided a valuation and determined the fund assets and obligations as at December 31, 2013. Further, it has been determined that the yield on the investments of the trust is adequate to meet the obligation towards the payment of the interest rate notified by the government.

Survivor protection scheme

Till 2012, the Company provided an excreta payment to the employees'' family/survivors over and above any survivor benefits payable to the employee under the retirement schemes, in the unfortunate event of an employee''s death whilst in service. In 2013, the Company has terminated the said plan and taken a life cover for all its employees.

Pension benefit to past employees

Under the Company''s pension scheme, certain categories of employees, on retirement, are eligible for monthly differential pension which is accounted for, on an actuarial basis as on the Balance Sheet date.

Amounts recognised as an expense Defined benefit plan

Gratuity in note 18 includes gratuity cost of Rs. 4.34 crores (2012 : Rs. 3.50 crores). Contribution to provident and other funds in note 18 includes Rs. 6.97 crores (2012 : Rs. 2.26 crores) for provident fund. Salaries, wages and bonus in note 18 includes survivor protection (death benefit), pension benefit to past employees, Rs. (0.13) crores (2012 : Rs. 0.13 crores).

Basis used to determine expected rate of return on assets:

Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 9.30% (2012 : 8.00%).

3. Segment information

The business segment has been considered as the primary segment. The Company is organised into two business segments, Automotive and Non-Automotive.

The above business segments have been identified considering:

- The customers

- The differing risks and returns

- The organisation structure

- The internal financial reporting system

Segment revenue, results, assets and liabilities have been accounted for, on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

4. Contingent liabilities & commitments

As at As at December 31, 2013 December 31, 2012 Rupees in Crores Rupees in Crores

(a) Contingent liabilities

(1) Excise/sales tax demands made by the authorities, in respect of which appeals have been filed [refer note (a) below] 16.77 22.22

(2) Claims against the Company not acknowledged as debts estimated at:

- In respect of third parties - miscellaneous 0.98 1.85

(A) 17.75 24.07

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 7.33 7.58

(2) Long-term advertisement contracts 44.61 47.44

(B) 51.94 55.02

Total (A B) 69.69 79.09

Notes:

(a) The management does not expect these claims to succeed. Accordingly, no provision for contingent liability has been recognised in the financial statements.

(b) A shareholder of the Company had filed a public interest petition in the Delhi High Court interalia challenging the allotment of 3,537,862 equity shares on preferential basis to Castrol Limited, U.K. The said petition has been dismissed by the Delhi High Court on January 11, 2005. However, the shareholder has gone to appeal by way of a special leave petition to the Supreme Court of India. The appeal has been admitted but no interim relief has been granted. The matter has to-date not come up for hearing.

5. Capitalisation of expenditure

During the year, the Company has capitalised the following expenses which are attributable to the construction activity in general and included in the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amount capitalised by the Company.

6. For part of the current year and as at the balance sheet date, the Company did not have a full time Company Secretary. This vacancy has been filled subsequent to the balance sheet date. During the period of vacancy, the Company had taken adequate measures to fill up the vacancy and to ensure the regulatory and legal compliances.

7. Previous year figures

The Company has reclassified previous year figures to conform to this year''s classification.


Dec 31, 2012

1. Corporate information

Castrol India Limited (the ''Company'') is a public limited company domiciled in India and incorporated under the provisions of the Companies Act 1956. The Company is engaged in the business of manufacturing & marketing of Automotive, Non-Automotive Lubricants and related services.

1.1. Basis of preparation of accounts:

The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India, mandatory accounting standards notifed under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared under the historical cost convention on an accrual basis, except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies applied by the Company are consistent with those used in the previous year.

All the assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and time between the acquisition of assets for processing and their realisation in cash or cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classifcation of assets and liabilities.

a. Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees.

During the year ended December 31, 2012, the amount of per share interim dividend recognised as distribution to equity shareholders was Rs. 7.00 (2011 : Rs. 7.00). The amount of interim dividend distributed to equity shareholders is Rs. 173.10 crores (2011 : Rs. 173.10 crores). In addition, the Company has also proposed a per share fnal dividend recognised as distribution to equity shareholders of Rs. 3.50 (2011 : Rs. 8.00). The amount of fnal proposed dividend distributed to equity shareholders is Rs. 173.10 crores (2011 : Rs. 197.82 crores). Both dividends aggregating to Rs. 10.50 per share (2011 : Rs. 15.00 per share). The said fnal dividend is on the enhanced paid up share capital post issue of bonus shares in the ratio of 1:1.

In the event of the Company being liquidated, since the equity shares of the Company are fully paid-up, there would be no additional liability on the shareholders of the Company. However, post settlement of the liabilities of the Company, the surplus, if any, would be distributed amongst the shareholders in proportion to the number of shares held by each one of them.

Notes:

(a) Deposits with original maturity of more than 3 months can be withdrawn by the Company at any point at a very short notice and without penalty on the principal amount.

(b) These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities.

(b) Excise duty on sales amounting to Rs. 484.52 crores (2011 : Rs. 445.96 crores) has been reduced from sales in Statement of Proft and Loss and excise duty on increase/(decrease) in stock amounting to Rs. 3.78 crores (2011 : Rs. 0.31 crore) has been considered as (income)/expense in note 17.3 of the fnancial statements.

2. Employee benefts

Defned contribution plan

Amounts recognised as an expense

Contribution to Provident and Other Funds in note 18 includes Rs. 3.90 crores (2011 : Rs. 4.17 crores) for Pension Fund, ESIC and Labour Welfare Fund. Note 19 includes ''Insurance'' Rs. 1.31 crores (2011 : Rs. 1.45 crores) for Medical Insurance Benefts and Post Retiral Medical Beneft Scheme. Salaries, wages and bonus in note 18 includes Rs. 1.32 crores (2011 : Rs. 1.04 crores) for Sharematch.

General description of defned beneft plan Gratuity

The Company operates gratuity plan wherein every employee is entitled to the beneft equivalent to ffteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, retirement or death, whichever is earlier. The beneft vests after fve years of continuous service.

Provident fund

The Company manages provident fund plan through a provident fund trust for its employees which is permitted under The Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notifed by the provident fund authority. The contribution by employer and employees, together with interest, are payable at the time of separation from service or retirement, whichever is earlier. The beneft under this plan vests immediately on rendering of service.

Survivor protection scheme

The Company provides an exgratia payment to the employee''s family/survivors over and above any survivor benefts payable to the employee under the retirement schemes, in the unfortunate event of an employee''s death whilst in service.

Pension beneft to past employees

Under the Company''s pension scheme, certain categories of employees, on retirement, are eligible for monthly differential pension which is accounted for on an actuarial basis as on the Balance Sheet date.

Amounts recognised as an expense

Defned beneft plan

Gratuity in note 18 includes gratuity cost of Rs. 3.50 crores (2011 : Rs. 3.19 crores) [net of recoveries of Rs. nil (2011 : Rs. 0.03 crore) towards employees on secondment from group companies]. Contribution to provident and other funds in

note 18 includes Rs. 2.26 crores (2011 : Rs. 2.43 crores) for provident fund. Salaries, wages and bonus in note 18 includes survivor protection (death beneft), pension beneft to past employees, Rs. 0.13 crores (2011 : Rs. 0.05 crores).

Basis used to determine expected rate of return on assets:

The major portion of the assets are invested in debt instruments. Expected rate of return on investments for all defned beneft plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 8.00% (2011 : 8.00%).

Notes:

(a) The Company has made provisions for known litigation cases and pending assessments in respect of taxes, duties and other levies, the outfow of which would depend on the cessation of the respective events.

(b) A shareholder of the Company had fled a public interest petition in the Delhi High Court interalia challenging the allotment of 3,537,862 equity shares on preferential basis to Castrol Limited, U.K. The said petition has been dismissed by the Delhi High Court on January 11, 2005. However, the shareholder has gone to appeal by way of a special leave petition to the Supreme Court of India. The appeal has been admitted but no interim relief has been granted. The matter has to-date not come up for hearing.

3. Previous year fgures

Till the year ended December 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956 for preparation and presentation of its fnancial statements. During the year ended December 31, 2012, the Revised Schedule VI notifed under the Companies Act,1956 has become applicable to the Company. The Company has reclassifed previous year fgures to conform to this year''s classifcation.


Dec 31, 2010

1. The Company has allotted bonus shares on 13th April, 2010 in the ratio of one equity share for every one equity share of Rs. 10/- each held in the Company on the Record Date. The Basic and Diluted EPS has been calculated for all periods presented after taking into account the bonus issue.

2. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs. 7.47 Crores (2009 : Rs. 2.41 Crores).

3. Contingent Liabilities not provided for in the accounts :

31st December, 31st December, 2010 2009 Rupees Rupees in Crores in Crores

(a) Guarantees and Counter Guarantees given by the Company 34.45 6.68

(b) Excise/Sales Tax Demands made by the authorities, in respect of which appeals have been filed 19.81 18.07

(c) Claims against the Company not acknowledged as debts estimated at :

(i) Income Tax - 1.17

(ii) In respect of Third Parties - Miscellaneous 1.63 1.43

Future cash outflows in respect of (b) above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

4. (a) The Company had received in prior years, show cause notices from Excise Authorities in respect of input and Finished Goods stock differences at some of its plants aggregating to Rs. 18.30 Crores (2009 : Rs. 18.30 Crores). There have been three orders in favour of the Company though department has filed appeals against two of them. The orders were passed upholding the Companys contention that the stock differences have been almost fully reconciled/explained. The pending demands on account of stock differences aggregate to Rs. 4.66 Crores (2009 : Rs. 4.96 Crores) including the amounts involved in the cases where department has filed appeals. Considering that favourable orders have been received setting out a ratio that minor differences are condonable, the demands at other plants are also likely to be eventually dropped. The Company has also obtained legal opinions which concur with this view. However, as a matter of abundant caution, the Company has upto date made a provision of Rs. 0.47 Crore and payments of Rs. 1.40 Crores relating to excise cases of stock differences as on 31st December, 2010.

(b) Certain disputed demand notices relating to Indirect Taxes amounting to Rs. 106.74 Crores (2009 : Rs. 100.50 Crores) have neither been considered as contingent liabilities nor acknowledged as claims, based on expert legal opinions obtained/ internal assessment. The Company is of the view that the possibility of the demands materialising is remote.

5. A shareholder of the Company had filed a Public Interest Petition in the Delhi High Court interalia challenging the allotment of 3,537,862 equity shares on Preferential basis to Castrol Ltd., UK. The said Petition has been dismissed by the Delhi High Court on 11th January, 2005. However, the Shareholder has gone to appeal by way of a Special Leave Petition to the Supreme Court of India. The Appeal has been admitted but no interim relief has been granted.

6. Segment Information :

The business segment has been considered as the primary segment. The Company is organised into two business segments, Automotive & Non-Automotive.

The above business segments have been identified considering :

- The customers

- The differing risks and returns

- The organisation structure

- The internal financial reporting system

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

7. Employee Benefits :

General Description of Defined Benefit Plan

Gratuity

The Company operates Gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

Provident Fund

The Company manages Provident Fund plan through a Provident Fund Trust for its employees which is permitted under The Employees Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the Provident Fund Authority. The contribution by employer and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

The benefit under this plan vests immediately on rendering of service.

Survivor Protection Scheme

The Company provides an exgratia payment to the employees family/survivors over and above any survivor benefits payable to the employee under the retirement schemes, in the unfortunate event of an employee dying whilst in service.

A. Amounts recognised as an expense : (i) Defined Benefit Plan

Gratuity in Schedule J includes gratuity cost of Rs. 4.77 Crores (2009 : Rs. 0.91 Crore) (net of recoveries of Rs. 0.21 Crore (2009 : Nil) towards employees on secondment from group companies). Contribution to Provident and Other Funds in Schedule J includes Rs. 3.93 Crores (2009 : Rs. 2.93 Crores) for Provident Fund. Salaries, wages and bonus in Schedule J includes Leave encashment, survivor protection (death benefit), pension benefit to past employees, Rs. 0.15 Crore (2009 : Rs. 0.36 Crore).

(ii) Defined Contribution Plan

Contribution to Provident and Other Funds in Schedule J includes Rs. 4.90 Crores (2009 : Rs. 4.63 Crores) for Pension Fund, ESIC and Labour Welfare Fund and Insurance includes Rs. 1.15 Crores (2009 : Rs. 0.81 Crore) for Medical Insurance benefits and post retiral medical benefit scheme. Salaries, wages and bonus in Schedule J includes Rs. 0.93 Crore (2009 : Rs. 1.09 Crores) for Share Match.

B. Basis used to determine expected rate of return on assets :

The major portion of the assets are invested in debt instruments. Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 8% (2009 : 8%).

8. Related Party Disclosures :

A. Name of the related party and nature of relationship where control exists :

(a) Holding Companies

Castrol Ltd., U.K. (Holding Company of Castrol India Ltd.)

Burmah Castrol Holdings Ltd. (Holding Company of Castrol Ltd., U.K.)

BP PLC (Holding Company of Burmah Castrol Holdings Ltd.)

(b) Other Related Parties

(where transaction exists)

Arabian Prod. & Marketing Lub. Co. Ltd.

Aspac Lubricants (Malaysia) Sdn Bhd

Aspac Lubricants Malaysia

BP China Aspac HKD Lub.

BP France

BP (China) Industrial Lubricants Ltd.

BP Alternative Energy International Ltd.

BP Australia Pty Ltd.

BP Castrol (Thailand) Ltd.

BP Castrol KK

BP Castrol Lubricants (Malaysia) SDN

BP China Holding Ltd.

BP Corporation NA Inc.

BP Egypt Company

BP Egypt Oil (335 GUPCO)

BP Energy India Pvt. Ltd.

BP Europa SE

BP Europa SE - BP Belgium (Branch)

BP Exploration (Alpha) Ltd. - CBM India

BP Exploration (Alpha) Ltd.

BP Exploration (In Salah) Ltd.

BP France SA Branch Office

(Trading as BP Middle East) BP India Services Pvt. Ltd. BP International Ltd. BP Italia SPA

BP Japan KK BP Korea Limited BP Lub. Shanghai SIBU BP Lubricants USA, Inc. BP Marine Ltd. BP Mauritius Ltd. BP Middle East BP Oil Head Office BP Oil International Ltd. BP Oil UK Ltd. BP Shipping Ltd. BP Singapore - LSC Regional BP Singapore Marine BP Singapore Pte. Ltd. BP Singapore Spec Ind. Lubes BP South Africa BP South West Pacific Limited BP S. W. Pacific OAZ BP Southern Africa (Proprietary) Limited BP Turkiya OEU BPOI - 1ST HO Costs BPSA Lubes

Burmah Castrol Australia PTY Ltd. Castrol (Shenzhen) Co. Ltd. Castrol (Shenzhen) Company Ltd. (Shanghai Branch)

(b) Other Related Parties (where transaction exists) (Contd.)

Castrol (UK) Ltd.

Castrol Australia Pte. Ltd.

Castrol Austria AG

Castrol Austria GmbH

Castrol BP Petco Ltd.

Castrol BP Petco Limited Liability Company

Castrol Industrial North America Inc.

Castrol Ltd. UK.

Castrol Offshore

Castrol Pakistan Private Ltd.

Deutsche BP

Deutsche BP AG

First Energy India Limited

Lubricants UK Ltd.

Nordic Lubricants AB

Nordic Lubricants AS

Premier Lubes Aspac Ltd.

Premier Lubricants (S) Pte. Ltd.

PT Castrol Indonesia

Tata BP Solar India Ltd.

(c) Associates (where transaction exists)

Castrol India Ltd. Employees Provident Fund Castrol India Ltd. Staff Pension Fund Castrol India Ltd. Employees Gratuity Fund

(d) Key Management Personnel (where transaction exists)

N. K. Kshatriya Managing Director Upto 8th May, 2009

R. Kirpalani Director-Automotive From 8th May, 2009

& Chief Operating

Officer

A. S. Ramchander Executive Director Upto 30th April, 2009

A. P. Mehta Executive Director Upto 15th November, 2010

S. Vaidya Executive Director From 16th November, 2010

S. Malekar Executive Director From 1 st May, 2008

15. Research and Development expenses amounting to Rs. 8.02 Crores (Net) (2009 : Rs. 8.26 Crores) are included under relevant heads of expense.

9. Previous years figures have been regrouped wherever necessary.


Dec 31, 2009

1. The Company had entered into transactions for rendering of services and secondment of personnel with two private limited companies incorporated in India which are a part of the BP group of companies worldwide. The said agreements attracted the provisions of Section 297 of the Companies Act, 1956 as there were common Directors between the Company and the two private limited companies. The Company is applications to the Regional Director (Ministry of Corporate Affairs) for necessary approvals. The Regional Director (Ministry of Corporate Affairs) has sought clarifications and requested the Company to make fresh applications with additional information. The Company has made fresh applications in relation to both the private limited companies to the Regional Director (Ministry of Corporate Affairs) and is currently awaiting approval.

2. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs. 2.41 Crores (2008 : Rs. 2.08 Crores).

3. Contingent Liabilities not provided for in the accounts :

31st December, 31st December, 2009 2008 Rupees Rupees in Crores in Crores

(a) Counter Guarantees given to Banks 6.68 5.67

(b) Excise/Sales Tax Demands made by the Authorities, in respect of which appeals have been filed 18.07 10.46

(c) Claims against the Company not acknowledged as debts estimated at ;

(i) Income Tax 1.17 --

(ii) In respect of Third Parties - Miscellaneous 1.43 1.23

4. (a) The Company had received in prior years, show cause notices from Excise Authorities in respect of input and Finished Goods stock differences at some of its plants aggregating to Rs. 18.30 Crores (2008 ; Rs. 18.30 Crores). There have been three orders in favour of the Company though department has filed appeals against two of them. The orders were passed upholding the Companys contention that the stock differences have been almost fully reconciled/explained. The pending demands on account of stock differences aggregate to Rs. 4.96 Crores (2008 : Rs. 7.87 Crores) including the amounts involved in the cases where department has filed appeals. Considering that favourable orders have been received setting out a ratio that minor differences are condonable, the demands at other plants are also likely to be eventually dropped. The Company has also obtained legal opinions which concur with this view. However, as a matter of abundant caution, the Company has upto date made a provision of Rs. 0.47 Crore and payments of Rs. 1.70 Crores relating to Excise cases of stock differences as on 31st December, 2009.

(b) Certain disputed demand notices relating to Indirect Taxes amounting to Rs. 100.50 Crores (2008 : Rs. 95.32 Crores) have neither been considered as contingent liabilities nor acknowledged as claims, based on expert legal opinions obtained/ internal assessment. Further, the Company has been consistent in adopting the policy of assessing risks as set out in their health check report from reputed Tax Advisors. The Company is of the view that the possibility of the demands materialising is remote.

5. A shareholder of the Company had filed a Public Interest Petition in the Delhi High Court interalia challenging the allotment of 3,537,862 equity shares on Preferential basis to Castrol Ltd., U.K. The said Petition has been dismissed by the Delhi High Court on 11th January, 2005. However, the Shareholder has gone to appeal by way of a Special Leave Petition to the Supreme Court of India. The Appeal has been admitted but no interim relief has been granted.

6. Segment Information :

The business segment has been considered as the primary segment. The Company is organised into two business segments,

Automotive & Non-Automotive.

The above business segments have been identified considerihg :

- The customers

- The differing risks and returns

- The organisation structure

- The internal financial reporting system

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

7. Employee Benefits :

General Description of Defined Benefit Plan

Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

Provident Fund

The Company manages Provident Fund plan through a Provident Fund Trust for its employees which is permitted under The Employees Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the Provident Fund Authority. The contribution by employer and employee, together with interest, are payable at the time of separation from service or retirement, whichever is earlier.

The benefit under this plan vests immediately on rendering of service.

Survivor Protection Scheme

The Company provides an exgratia payment to the employees family/survivors over and above any survivor benefits payable to the employee under the retirement schemes, in the unfortunate event of an employee dying whilst in service.

A. Amounts recognised as an expense :

(i) Defined Benefit Plan

Gratuity in Schedule K includes gratuity cost of Rs. 0.91 Crore (2008 : Rs. 4.47 Crores, 2007 : Rs. 3.14 Crores) (net of recoveries of Rs- 0.28 Crore towards employees on secondment from group companies). Contribution to Provident and Other Funds in Schedule K includes Rs. 2.93 Crores (2008 : Rs. 2.18 Crores, 2007 : Rs. 3.33 Crores) (net of recoveries of Rs. 0.19 Crore towards employees on secondment from group companies) for Provident Fund.

Salaries, wages and bonus in Schedule K includes Leave encashment, survivor protection (death benefit), pension benefit to past employees, credit of Rs. 0.36 Crore (2008 : Rs. 1.79 Crores, 2007 : Rs. 2.50 Crores).

(ii) Defined Contribution Plan

Contribution to Provident and Other Funds in Schedule K includes Rs. 4.63 Crores (2008 : Rs. 4.74 Crores, 2007 : Rs. 4.30 Crores) for Pension Fund, ESIC and Labour Welfare Fund and Insurance includes Rs. 0.81 Crore (2008 : Rs. 0.73 Crore, 2007 : Rs. 0.71 Crore) for Medical Insurance benefits and post retiral medical benefit scheme. Salaries, wages and bonus in Schedule K includes Rs. 1.09 Crores (2008 : Rs. 1.05 Crores, 2007 : Rs. 1.03 Crores) for Share Match.

B. Basis used to determine expected rate of return on assets :

The major portion of the assets are invested in debt instruments. Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 8% (2008 : 7.50%, 2007 : 7.50%).

8. Related Party Disclosures :

A. Name of the related party and nature of relationship where control exists :

(a) Holding Companies

Castrol Ltd., U.K. (Holding Company of Castrol India Ltd.)

Burmah Castrol Holdings Ltd. (Holding Company of Castrol Ltd., U.K.)

BP PLC (Holding Company of Burmah Castrol Holdings Ltd.)

(b) Subsidiary

None

(c) Fellow Subsidiaries with which the Company has transactions.

Air BP Lub. Sales Office

Arabian Prod. & Marketing Lub. Co. Ltd.

ASPAC Lubricants (Malaysia) Sdn Bhd

Aspac Lubricants Malaysia

ASPAC Oil (Thailand) Ltd.

Aspac Oil Korea

BP China Aspac HKD Lub.

BP (China) Industrial Lubricants Ltd.

BP Alternative Energy Ltd.

BP Alternative Energy International Ltd.

BP Australia Pty. Ltd.

BP Belgium NV/SA

BP Belgium - LUBESCO

BP Castrol KK

BP Castrol (Thailand) Ltd.

BP Castrol Lubricants (Malaysia) SDN

BP China Holding Ltd.

BP Corporation NA Inc.

BP Egypt Company

BP Egypt Oil (335 GUPCO)

BP Energy India Pvt. Ltd.

BP Exploration (Alpha) Ltd.

BP Exploration (IN SALAH) Ltd.

BP France

BP India Services Pvt. Ltd.

BP International Ltd.

BP Italia SPA

BP Japan KK

BP Korea Ltd.

BP Lub Shanghai SIBU

BP Lubricants USA, Inc.

BP Marine Ltd.

BP Maritime Services (ISLE OF MAN) Ltd.

BP Maritime Services Singapore Pte. Ltd.

BP Mauritius Ltd.

BP Middle East

BP Oil France

BP Oil Head office

BP Oil International Ltd.

BP Oil UK Ltd.

BP Sharjah Oil Co.

BP Shipping Ltd.

BP Singapore - LSC Regional

(c) Fellow Subsidiaries with which the Company has transactions (Contd.)

BP Singapore Lubes

BP Singapore Marine

BP Singapore Pte. Ltd.

BP Singapore Spec Ind. Lubes

BP South Africa

BP South West Pacific Ltd.

BP Turkiya OEU

BPOI - 1ST HO Costs

BPSA Lubes

Burmah Oil GMBH

Castrol (UK) Ltd.

Castrol Australia Pte. Ltd.

Castrol Austria AG

Castrol Austria GMBH

Castrol BP Petco Ltd.

Castrol Industrial North America Inc.

Castrol Industries GMBH Castrol Italiana Castrol Ltd. UK. Castrol Offshore Castrol Shenzhen Co. Ltd. Castrol Switzerland Deutsche BP Deutsche BP AG First Energy India Ltd. Lubricants UK Ltd. Nordic Lubricants AB Nordic Lubricants AS Premier Lube M ILS Premier Lubes Aspac Ltd. Premier Lubricants (S) Pte. Ltd. PT Castrol Indonesia

(d) Associates

Castrol India Ltd. Employees Provident Fund Castrol India Ltd. Staff Pension Fund Castrol India Ltd. Employees Gratuity Fund

(e) Key Management Personnel

N. K. Kshatriya Managing Director Upto 8th May, 2009

R. Kirpalani Chief Operating From 8th May, 2009 Officer

A. S. Ramchander Executive Director Upto 30th April, 2009 A. P. Mehta Executive Director

S. Malekar Executive Director From 1 st May, 2008

(g) (i) Consumption includes adjustments for shortage/excess, etc. and the effects of reduction of inventory to realisable value.

(ii) Quantities of turnover, consumption, production, opening and closing stocks of additives and chemicals are made up of Kilolitres and Metric Tons, but the constituent units of measurement of the items have not been separately identified and indicated.

(iii) As the Company manufactures and trades, the information required by Clause 3(ii) (a) of Schedule VI Part II of the Companies Act, 1956 is interpreted to require total amounts to be disclosed in respect of opening stock, closing stock and purchases of traded items.

9. Previous years figures have been regrouped wherever necessary.

Find IFSC