Dec 31, 2022
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Castrol India Limited ("the Company"), which comprise the Balance Sheet as at December 31, 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flows Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at December 31, 2022, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the financial statements of the current period. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. We have determined the matter described below to be the key audit matter to be communicated in our report:
The Company has material indirect tax litigations which involve significant judgment to determine the outcome of the matters into probable, possible and remote.
Refer note 12, 25(i)(a) & 25(ii) to the financial statements.
Principal audit procedures:
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as under:
⢠Obtained a detailed understanding of the Company''s process and controls with respect to assessment of possible outcome of indirect tax litigations.
⢠Evaluated the design of the controls relating to assessment of probability of outcome, estimates of the timing and the amount of the outflows, and appropriate reporting by the management and testing implementation and operating effectiveness of the key controls.
⢠Performed following procedures on samples selected:
- Understood the matters by reading the correspondence/communications and made corroborative enquiries with appropriate level of management personnel including status update, expectation of outcomes with the basis, and the future course of action contemplated by the Company and perusing legal opinions, where applicable, obtained by the management.
- Evaluated the evidences supporting the judgement of the management about possible outcome and the reasonableness of the estimates. We involved our internal tax experts in assessing the nature and amount of the tax exposures and assessed management''s conclusions on whether exposures are probable, possible, or remote.
⢠Evaluated appropriateness and adequacy of disclosures in the financial statements.
The Company''s Board of Directors is responsible for the other information. The other information comprises the Management Discussion and Analysis, Director''s Report including annexures, Business Responsibility Report, Corporate Governance and Information for Shareholders, but does not include the financial statements and our auditor''s report thereon.
⢠Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
⢠In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
⢠If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
⢠Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the financial statements.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by Section 143(3) of the Act, based on our audit, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except that we have been represented by the management that the Company is in process of complying with the requirement of maintaining server(s) physically located in India for back-up of books of account on a daily basis as required pursuant to amendment in Companies (Accounts) Rules, 2014 on August 5, 2022 - refer note 35 to the financial statements.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flows Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on December 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) We refer paragraph 1(b) above relating to our observation on the maintenance of accounts and other matters connected therewith.
i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except when disputes relating to ownership of the underlying shares are unresolved - refer note 11 to the financial statements.
iv. (a) The Management has represented that, to the best of it''s knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of it''s knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. As stated in note 9(b) to the financial statements:
(a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
(b) The interim dividend declared and paid by the Company during the year and until the date of this report is in accordance with section 123 of the Companies Act 2013.
(c) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants
Firm''s Registration No. 117366W/W-100018
Samir R. Shah
Partner
Membership No. 101708
UDIN: 23101708BGYJAQ6688
Place: Mumbai
Date: 13 February 2023
Dec 31, 2018
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Castrol India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st December, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143 (11) of the Act.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st December, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st December, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanation given to us, the remuneration paid by the Company to its directors is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements (refer note no. 25 to the Ind AS financial statements).
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. The Company has transferred the amounts required to be transferred to the Investor Education and Protection Fund within due dates except for Rs 0.09 Crores for the reasons described in note 11 to the financial statements.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Castrol India Limited (âthe Companyâ) as of 31st December, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st December, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the Institute of Chartered Accountants of India.
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date]
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, no fixed assets were physically verified by the Management during the year
(c) According to the information and explanations given to us and the records examined by us and based on the examination of registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and acquired buildings which are freehold, are held in the name of the Company as at the balance sheet date except as follows:
Rs. in Crore
No. of Cases |
Asset Category |
Gross Block as at 31st December 2018 |
Net Block as at 31st December 2018 |
Remarks |
1 |
Freehold Land |
0.01 |
0.01 |
The deed of conveyance is in the erstwhile |
located at |
name of the Company and the mutation of |
|||
Mehsana |
the name is pending. |
In respect of land taken on lease, the lease agreements are in the name of the Company except as follows:
Rs. in Crore
No. of Cases |
Asset Category |
Gross Block as at 31st December 2018 |
Net Block as at 31st December 2018 |
Remarks |
2 |
Leasehold Land located at Patalganga |
0.29 |
0.28 |
The lease deed is in the erstwhile name of the Company, |
2. As explained to us, the inventories (other than Goods in Transit) were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on such physical verification.
3. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act.
4. The Company has not granted any loans, made investments or provide guarantees and hence reporting under clause (iv) of the order is not applicable.
5. According to the information and explanations given to us, the Company has not accepted any public deposits. Accordingly, the provisions of clause (v) of the Order are not applicable to the Company
6. The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under sub-section (1) of Section 148 of the Act, in respect of manufacture of lubricants and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7. According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employee State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Goods and Services Tax, Cess and other material statutory dues, as applicable, with the appropriate authorities except in case of tax deducted at source reported in clause (b) below.
(b) There are no undisputed amounts payable in respect of the above statutory dues outstanding as at 31st December, 2018 for a period of more than six months from the date they became payable, except as follows.
Name of Statute |
Nature of Dues |
Amount (Rs.) |
Period to which the Amount Relates |
Due date |
Date of Payment |
The Income Tax Act. 1961 |
Tax deducted at source |
0.64 crores |
March-2018 |
30th April, 2018 |
Unpaid |
(c) Details of Income tax, Sales tax, Service tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on 31st December, 2018 on account of disputes are given below:
Rs. in Crore
Name of |
Nature of Dues |
Forum where |
Period to |
Total |
Amount |
Amount |
Statute |
dispute is pending |
which the Amount Relates |
Disputed dues |
paid |
unpaid |
|
Central Excise |
Disputes relating |
Commissioner |
1990-2018 |
19.33 |
0.55 |
18.78 |
Act, 1944 |
to Excise Duty & Service Tax. |
Commissioner (A) |
2001-2009 |
1.91 |
0.03 |
1.88 |
Tribunal |
1994 - 2006 |
91.78 |
4.69 |
87.09 |
||
High Court |
1999-2002 |
8.43 |
- |
8.43 |
||
Supreme Court |
1998-1999 |
0.40 |
0.20 |
0.20 |
||
Local Sales Tax |
Disputes relating to |
Commissioner |
2000-2016 |
43.79 |
13.19 |
30.60 |
Act, VAT Act and |
Local Sales Tax, VAT Act and CST Act. |
Appellate Authority |
1994-2016 |
15.45 |
7.11 |
8.34 |
Tax Act |
Central Sales Tax Appellate Authority (CSTAA) |
2007-2008 & 2009-2010 to 2011-2012 |
1,300.44 |
1,300.44 |
||
Tribunal |
1999-2014 |
1,598.02 |
3.46 |
1594.56 |
||
High Court |
1999-2000 |
0.23 |
- |
0.23 |
||
The Income Tax |
IT matters under |
Commissioner of |
2006-2008 and |
1.99 |
- |
1.99 |
Act, 1961 |
dispute |
Income Tax |
2010-2011 |
|||
Income Tax Appellate |
2003-04 and |
2.64 |
- |
2.64 |
||
Tribunal |
2005-2006 |
8. The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence, reporting under clause (viii) of the Order is not applicable to the Company.
9. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans. Hence, reporting under clause (ix) of the Order is not applicable to the Company.
10. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year
11. In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi Company and hence, reporting under clause (xii) of the Order is not applicable to the Company.
13. In our opinion and according to the information and explanations given to us the Company is in compliance with Sections 177 and 188 of the Act where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
14. During the year, the Company has not made any preferential allotment or private placement of the shares or fully or partly convertible debentures. Hence, reporting under clause (xiv) of the Order is not applicable to the Company.
15. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
16. The Company is not required to be registered under Section 45 I of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No. 1 17366W / W-100018)
Samir R. Shah
(Partner)
(Membership No. 101708)
Place : Mumbai
Date : 30th January, 2019
Dec 31, 2016
INDEPENDENT AUDITORSâ REPORT
To,
The Members of Castrol India Limited Report on the Financial Statements
We have audited the accompanying financial statements of Castrol India Limited (âthe Companyâ), which comprise the Balance Sheet as at December 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at December 31, 2016, its profit, and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) I n our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors as on December 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on December 31,
2016, from being appointed as a director in terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 6, 7, 26 and 35 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties, other than self-constructed buildings, included in fixed assets are held in the name of the Company except for the cases below:
(Rs. Crores)
No. of cases |
Asset category |
Gross block as at December 31, 2016 |
Net block as at december 31, 2016 |
Remarks |
1 |
Freehold land |
0.01 |
0.01 |
The deed of conveyance is in the erstwhile name of the Company and the mutation of the name is pending. |
1 |
Leasehold land |
0.43 |
0.28 |
The lease deed is in the erstwhile name of the Company. |
1 |
Leasehold land |
0.49 |
0.09 |
There is a letter from Mumbai Port Trust addressed to the Company which defines the contractual framework between the Company and Mumbai Port Trust. There is no lease deed. |
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at various dates and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made, guarantees and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, related to the manufacture of lubricants, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the Statute |
Nature of Dues |
Amount (Rs. Crores) |
Period to which amount relates |
Forum where dispute is pending |
Local Sales Tax Act, VAT Act and Central Sales Tax Act |
Tax, Interest and Penalty |
895.20 |
1987 to 2016 |
Assistant/Deputy/ Additional/Joint/Special, Provisional Board/ Commissioner, Tribunal & High Court. |
Central Excise Act, 1944 |
Duty and Penalty |
27.58 |
1987 to 2016 |
Assistant/Deputy/ Additional/Joint Commissioner, Commissioner (A), CESTAT, High Court & Supreme Court. |
Customs Act, 1962 |
Duty and Interest |
2.83 |
1997 to 2006 |
Tribunal |
Service Tax, Chapter V of the Finance Act, 1994 |
Tax and Penalty |
142.11 |
1997 to 2016 |
Assistant/Deputy/ Additional/Joint Commissioner, Commissioner (A), CESTAT & High Court. |
The Income Tax Act, 1961 |
Tax and Interest |
6.97 |
Assessment years 2002-03, 2004-05, 2005-06, 2006-07, 2011-12 and 2013-14 |
Deputy Commissioner of Income Tax, Commissioner of Income Tax (A), ITAT, HC |
(viii) The Company did not have any outstanding loans or borrowing dues in respect of a financial institution or bank or to government or dues to debenture holders during the year.
(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer/further public offer/debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) I n our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 to the Independent Auditorsâ Report of even date on the Financial Statements of Castrol India Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the Internal Financial Controls over Financial Reporting of Castrol India Limited (âthe Companyâ) as of December 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs Internal Financial Controls over Financial Reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at December 31, 2016, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E / E300003
per Dolphy DâSouza
Partner
Membership Number: 38730
Place : Mumbai
Date : February 21, 2017
Dec 31, 2014
We have audited the accompanying financial statements of Castrol India
Limited ("the Company"), which comprise the Balance Sheet as at
December 31,2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the
Act"), read with General Circular 8/2014 dated 4 April 2014 issued by
the Ministry of Corporate Affairs. This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances
but not for the purpose of expressing an opinion on the effectiveness
of the entity''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that
the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act, 1956 ("the Act") in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit/loss
for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("the Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956, read with General Circular
8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written representations received from the directors
as on December 31,2014 under section 164(2) of the Companies Act, 2013,
and taken on record by the Board of Directors, none of the directors is
disqualified as on December 31, 2014, from being appointed as a
director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956, provisions of which are consistent with those
under section 164(2) of the Companies Act, 2013.
Annexure referred to in paragraph of audit report on Other Legal and
Regulatory Requirements of even date Re: Castrol India Limited (''the
Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a)-(d) According to the information and explanations given to
us, the Company has not granted any loans, secured or unsecured to
companies, firms or other parties (determined in the manner stated in
clause (v) below) covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly, the provisions of clause
4(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
(e)-(g) According to information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956 (determined in the manner stated in
clause (v) below). Accordingly, the provisions of clause 4(iii) (e) to
(g) of the Order are not applicable to the Company and hence not
commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered. In evaluating the parties to be covered under section
301, only contracts or arrangements upto March 31,2014 (being the last
day up to which this section was applicable to the Company) were
considered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except in respect of certain transactions, where because of the unique
and specialized nature of the items involved and absence of any
comparable prices, we are unable to comment whether the transactions
were made at the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 for the period upto March 31,2014 (the Companies Act, 1956
and relevant section has been replaced by the Companies Act, 2013
effective April 1, 2014), related to the manufacture of Lubricating
Oils and Greases and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance,
income-tax, wealth-tax, service tax, sales-tax, customs duty, excise
duty, cess and other undisputed statutory dues were outstanding, at the
year end, for a period of more than six months from the date they
became payable.
(c) According to the records of the Company, the dues outstanding of
income tax, sales-tax, wealth- tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dues Amount
(Rs. Crores)
Local Sales Tax Act, Tax, Interest and Penalty 91.68
VAT Act and Central
Sales Tax Act
Central Excise Act, Duty and Penalty 26.16
1944
Customs Act, 1962 Duty and Interest 2.83
Service Tax, Tax and Penalty 113.76
Chapter V of the
Finance Act, 1994
The Income Tax Act, Tax and Interest 1.16
1961
Name of Statute Period to which Forum where dispute is
amount relates pending
Local Sales Tax Act,
VAT Act and Central
Sales Tax Act 1987 to 2014 Assistant/Deputy/
Additional/Joint/Special,
Revisional Board/
Commissioner, Tribunal,
High Court.
Central Excise Act,
1944 1987 to 2014 Assistant/Deputy/
Additional/Joint
Commissioner,
Commissioner (A), CESTAT,
High Court & Supreme
Court.
Customs Act, 1962 1997 to 2006 Tribunal
Service Tax, 1997 to 2014 Assistant/Deputy/
Additional/Joint
Commissioner,
Commissioner (A), CESTAT,
High Court.
Chapter V of the
Finance Act, 1994
The Income Tax Act,
1961 Assessment Deputy Commissioner of
years 2000-2001, Income Tax, Commissioner
of
2008- 2009 and Income Tax (A) & ITAT
2009- 2010
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank. The Company has
no outstanding dues in respect of financial institution or debenture
holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) I n our opinion, the Company is not a chit fund or a
nidhi/mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) I n our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report)
Order, 2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) The Company did not have any term loans outstanding during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet and cash flow statement of
the Company, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956 for the period
upto March 31, 2014 (the Companies Act, 1956 and the relevant sections
has been replaced by the Companies Act, 2013 effective April 1,2014).
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
per Dolphy D''souza
Partner
Membership Number: 38730
Place : Mumbai
Date : February 25, 2015
Dec 31, 2013
We have audited the accompanying financial statements of Castrol India
Limited (''the Company''), which comprise the Balance Sheet as at
December 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act 1956 read with
General Circular 15/2013 dated 13th September 2013, issued by the
Ministry of Corporate Affairs! in respect of Section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness on the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act, 1956 (''the Act'') in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date. Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with General Circular
15/2013 dated 13th September 2013, issued by the Ministry of Corporate
Affairs, in respect of Section 133 of the Companies Act, 2013;
(e) On the basis of written representations received from the directors
as on December 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on December 31, 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956.
Annexure referred to in paragraph of audit report on Other Legal and
Regulatory Requirements of even date
Re: Castrol India Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a)-(d) According to the information and explanations given to
us, the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4(iii) (a) to (d) of the Order are not applicable
to the Company and hence not commented upon.
(e)-(g) According to information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, the provisions of clause
4(iii) (e) to (g) of the Order are not applicable 10 the Company and
hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under Section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except in respect of certain transactions, where because of the unique
and specialized nature of the items involved and absence of any
comparable prices, we are unable to comment whether the transactions
were made at the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1 )(d) of the Companies
Act, 1956, related to the manufacture of Lubricating Oils and Greases
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dues Amount Period to
which Forum where
dispute is
(Rs.
Crores) amount
relates pending
Local Sales
Tax Act, Tax, Interest
and Penalty 121.23 1987 to
2013 Assistant/Deputy/
VAT Act and
Central Additional/
Joint/Special,
Sales Tax Act Revisional Board/
Commissioner,
Tribunal & High
Court.
Central Excise
Act, Duty and
Penalty 20.76 1987 to
2013 Assistant/Deputy/
1944 Additional/
Joint
Commissioner,
Commissioner
(A), CESTAT,
High Court &
Supreme Court.
Customs Act,
1962 Duty and
Interest 2.83 1997 to
2006 Tribunal
Service Tax, Tax and
Penalty 119.42 1997 to
2013 Assistant/
Deputy/
Chapter V of the Additional/
Joint
Commissioner,
Finance Act,
1994 Commissioner
(A), CESTAT &
High Court.
The Income
Tax Act, Tax and
Interest 1.16 Assessment Deputy
Commissioner of
1961 years
2000-2001, Income Tax,
Commissioner of
2008-2009
and Income Tax (A)
& ITAT
2009-2010
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank. The Company has
no outstanding dues in respect of financial institution or debenture
holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) The Company did not have any term loans outstanding during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet and cash flow statement of
the Company, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) To the best of our knowledge, and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company, has been noticed or reported during the year.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
per Dolphy D''souza
Partner
Membership Number: 38730
Place : Mumbai
Date : February 17, 2014
Dec 31, 2012
1. We have audited the attached Balance Sheet of Castrol India limited
as at December 31, 2012 and also the Statement of proft and loss and
the Cash Flow Statement for the year ended on that date annexed
thereto. these fnancial statements are the responsibility of the
Company''s management. our responsibility is to express an opinion on
these fnancial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
fnancial statements are free of material misstatement. an audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the fnancial statements. an audit also includes
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall fnancial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. as required by the Companies (auditor''s report) order, 2003 (as
amended) (''the order'') issued by the Central Government of India in
terms of sub-section (4a) of Section 227 of the Companies act, 1956, we
enclose in the annexure a statement on the matters specifed in
paragraphs 4 and 5 of the said order.
4. Further to our comments in the annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. the Balance Sheet, Statement of proft and loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the Balance Sheet, Statement of proft and loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies act, 1956.
v. on the basis of the written representations received from the
directors, as on December 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualifed as on
December 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2012;
b) in the case of the Statement of proft and loss, of the proft for the
year ended on that date; and
c) in the case of Cash Flow Statement, of the cash fows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
re: Castrol India Limited (''the Company'')
(i) (a) the Company has maintained proper records showing full
particulars, including quantitative details and situation of fxed
assets.
(b) all fxed assets have not been physically verifed by the management
during the year but there is a regular programme of verifcation which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. no material discrepancies were noticed on
such verifcation.
(c) there was no substantial disposal of fxed assets during the year.
(ii) (a) the management has conducted physical verifcation of inventory
at reasonable intervals during the year.
(b) the procedures of physical verifcation of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) the Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verifcation.
(iii) (a) according to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, frms or other parties covered in the register maintained
under Section 301 of the Companies act, 1956. accordingly, the
provisions of clause 4(iii) (a) to (d) of the order are not applicable
to the Company and hence not commented upon.
(e) according to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, frms or
other parties covered in the register maintained under Section 301 of
the Companies act, 1956. accordingly, the provisions of clause 4(iii)
(e) to (g) of the order are not applicable to the Company and hence not
commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fxed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) according to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies act, 1956 that
need to be entered into the register maintained under Section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees fve lakhs have been
entered into during the fnancial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except in respect of certain transactions, where because of the unique
and specialized nature of the items involved and absence of any
comparable prices, we are unable to comment whether the transactions
were made at the prevailing market prices at the relevant time.
(vi) the Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
act, 1956, related to the manufacture of lubricating oils and Greases
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
(ix) (a) the Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) according to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) according to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dues Amount
(Rs. Crores)
local Sales tax act, tax, Interest and penalty 107.68
Vat act and Central
Sales tax act
Central excise act, Duty and penalty 22.91
1944
Customs act, 1962 Duty and Interest 2.83
Service tax, tax and penalty 93.51
Chapter V of the
Finance act, 1994
Name of Statute Period to which Forum where dispute is
amount relates pending
Local Sales Tax Act,
VAT Act and Central
Sales Tax Act 1987 to 2011 assistant/Deputy/
additional/Joint/Special,
revisional Board/
Commissioner, tribunal &
High Court.
Central Excise Act,
1944 1987 to 2012 assistant/Deputy/
additional/Joint
Commissioner, Commissioner
(a), CESTAT, High Court &
the Supreme Court.
Customs Act, 1962 1997 to 2006 tribunal
Service Tax Chapter V
of the Finance Act,
1994 1997 to 2012 assistant/Deputy/
additional/Joint
Commissioner, Commissioner
(a), CESTAT & High Court.
(x) the Company has no accumulated losses at the end of the fnancial
year and it has not incurred cash losses in the current and immediately
preceding fnancial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank. the Company has
no outstanding dues in respect of fnancial institution or debenture
holders.
(xii) according to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
beneft fund/society. therefore, the provisions of clause 4(xiii) of the
Companies (auditor''s report) order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. accordingly, the
provisions of clause 4(xiv) of the Companies (auditor''s report) order,
2003 (as amended) are not applicable to the Company.
(xv) according to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or fnancial institutions.
(xvi) the Company did not have any term loans outstanding during the
year.
(xvii) according to the information and explanations given to us and on
an overall examination of the balance sheet and cash fow statement of
the Company, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) the Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies act, 1956.
(xix) the Company did not have any outstanding debentures during the
year.
(xx) the Company has not raised any money through public issue during
the year. therefore, the provisions of clause 4(xx) of the Companies
(auditor''s report) order, 2003 (as amended) are not applicable to the
Company.
(xxi) We have been informed that there has been an instance of
misappropriation of inventory by transporter and contractors amounting
to rs. 468,867 and one instance of wrongful over claiming of expenses
by an employee amounting to rs. 5,150. the Company has taken
appropriate action against the concerned transporter, contractors and
employee.
For S. r. Batliboi & Co.
Firm registration no.: 301003e
Chartered accountants
per ravi Bansal
partner
Membership no.: 49365
place : Mumbai
Date : February 27, 2013
Dec 31, 2009
1. We have audited the attached Balance Sheet of Castrol India Limited
as at December 31, 2009 and also the Profit and Loss Account and the
cash flow statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. Without qualifying our opinion, we draw attention to Note No. 2 of
schedule M to the financials statements regarding approval of the
Central Government in respect of certain transactions for the rendering
of services to the parties covered under Section 297 of the Companies
Act, 1956 for the period upto December 31, 2008, which the Company has
applied for and is pending approval from the authorities. Our Audit
report for the year ended December 31, 2008 also included a Emphasis of
Matter in respect of the same.
4. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
5. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on December 31, 2009, and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
December 31, 2009 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
(a) in the case of the balance sheet, of the state of affairs of the
Company as at December 31, 2009;
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 4 of our report of even date Re:
Castrol India Limited (the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed to us, no
material discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) As informed to us, the Company has not granted any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
Accordingly, provisions of clause 4(iii) (b), (c) and (d) of the
Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
(e) As informed to us, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, provisions of clause 4(iii) (f) and (g) of the Companies
(Auditors Report) Order, 2003 (as amended) are not applicable to the
Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
Company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time except in
respect of certain transactions, where because of the unique and
specialized nature of the items involved and absence of any comparable
prices, we are unable to comment whether the transactions were made at
the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1 )(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, or employees state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess have generally been regularly deposited with the
appropriate authorities. Further, since the Central Government has till
date not prescribed the amount of cess payable under Section 441 A of
the Companies Act, 1956, we are not in a position to comment upon the
regularity or otherwise of the Company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income tax, sales-tax, wealth-tax, service tax, customs duty excise
duty and cess on account of anv dispute, are as follows:
Name of Statute Nature of Dispute Amount
(Rs. Crores)
Local Sales Tax Act, Non-submission of declaration 85.37
VAT Act and Central forms, disallowance of set-off claim,
Sales Tax Act disputes about classification/rate of
tax, disallowance of credit notes and
rebates.
Central Excise Act, Valuation including admissibility 35.75
1944 of discounts/deductions [PME] in
provisional assessments, Modvat/
Cenvat Credit, Classification, Stock
differences and Other Miscellaneous
Issues.
Customs Act, 1962 Dispute regarding basis to levy 2.83
duty - whether on invoice quantity
or actual quantity unloaded in shore
tank and on demurrage, duty on FG
imports on account of royalty.
Service Tax, Service tax on Royalty, on storage27.11
Chapter V of the tanks, objections to credit of service
Finance Act, 1994 tax availed and credit of service tax
on secondary freight.
Name of the Statue Period to which Forum where dispute is
amount relates pending
Local Sales Tax Act,
VAT Act and Central
Sales Tax Act 1987 to 2009 Assistant/Deputy Commissioner,
Tribunal, High Court.
Central Excise Act,
1944 1987 to 2009 Assistant/Deputy Commissioner,
Commissioner (A), CESTAT,
High Court & Supreme Court.
Customs Act, 1962 1997 to 2008 Tribunal.
Service Tax,
Chapter V of the
Finance Act, 1994 1997 to 2009 Assistant/Deputy Commissioner,
Commissioner (A), CESTAT,
High Court.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank. The Company has
no outstanding dues in respect of financial institution or debenture
holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In respect of dealing/trading in shares, securities, debentures
and other investments, in our opinion and according to the information
and explanations given to us, proper records have been maintained of
the transactions and contracts and timely entries have been made
therein. The shares, securities, debentures and other investments have
been held by the Company, in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) The Company did not have any term loans outstanding during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet and cash flow statement of
the Company, we report that no funds raised on short-term basis have
been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through public issue during
the year. Accordingly, the provisions of clause 4(xx) of the Companies
(Auditors Report) Order, 2003 (as amended) are not applicable to the
Company.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no material fraud on or by the Company has been noticed or
reported during the course of our audit.
For S. R. Batliboi & Co.
Chartered Accountants
per Hemal Shah
Partner
Membership No.: 42650
Place : Mumbai
Date : February 18, 2010