Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Board of Directors
Directors Directors
R. Gopalakrishnan R. Elston-Green
P. Hughes A. S. Ramchander
A. K. Jhawar
D. S. Parekh
L. Freese – Alternate to P. Hughes
Bankers
Deutsche Bank
HDFC Bank Ltd.
The Hongkong & Shanghai Banking Corporation Ltd.
State Bank of India
Auditors
S. R. Batliboi & Co.
Registered Office
Technopolis Knowledge Park
Mahakali Caves Road, Andheri (East)
Mumbai 400 093
Share Department
Tata Share Registry Limited
Unit: Castrol India Limited
Army & Navy Building
148, M. G. Road, Mumbai 400 001.
1
Financials
Castrol India Limited
FINANCIAL HIGHLIGHTS
Year 2004 2003 2002 2001 2000 1999
Rupees in Crores
Sales 1523.21 1360.51 1338.95 1357.36 1237.81 1195.55
Exceptional Items:
VRS Expenses – Plant closure 3.72 — — — — —
Impairment of Fixed Assets – Plant closure 3.55 — — — — —
Profit Before Taxation 195.29 204.36 230.31 153.42 163.88 256.08
Rupees
Earning per Share * 10.31 11.11 12.37 8.77 10.88 16.55
14
Directors’ Report
Castrol India Limited
REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31ST DECEMBER, 2004
The Directors have pleasure in presenting their Report and Statement of Accounts for the year ended
31st December, 2004.
For the year ended For the year ended
31st December, 2004 31st December, 2003
(Rupees in Crores) (Rupees in Crores)
FINANCIAL RESULTS
Gross Profit before Depreciation, Exceptional Items & Tax 227.44 218.67
Deducting therefrom:
Depreciation 24.88 14.31
Exceptional Items:
(i) Voluntary Retirement Scheme expenses – Plant closure 3.72 —
(ii) Impairment of Fixed Assets – Plant closure 3.55 —
Provision for Tax 68.73 63.35
Deferred Tax (0.90) 3.63
Adding thereto:
Balance as per last Balance Sheet brought forward 18.71 13.41
Tax on Dividend:
Interim 6.46 6.34
Final 6.87 6.73
Education Cess on Tax on Final Dividend 2003 0.13 —
Transfer to General Reserve 14.00 17.00
Balance carried forward 16.70 18.71
146.17 150.79
15
Directors’ Report
Castrol India Limited
FIXED DEPOSITS
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, a There were no fixed deposits outstanding and
Management Discussion and Analysis Report and a unclaimed as on 31st December, 2004.
16
Directors’ Report
Castrol India Limited
17
Directors’ Report
Castrol India Limited
2. Soft starter for high capacity motors. (c) Impact of measures at (a) and (b) above for
3. Putting up of 200 Energy Efficient tube lights. reduction of energy consumption and
consequent impact on the cost of production of
Patalganga goods:
1. Won the National Energy Conservation The measures mentioned in (a) above have led to
Awards 2004, Certificate of Merit, in savings in fuel & electricity of approximately
Petrochemical Sector from Bureau of Energy Rs. 10 lacs per annum.
Efficiency.
2. Installed and commissioned two nos. of TECHNOLOGY ABSORPTION
Compact Pressure Powered Condensate 1. During the year, in line with BP’s policies, greater
Pumps. emphasis was placed on implementing best
3. Installed and commissioned Solar Hot Water practices on Health Safety Security and
Systems of 1500 LPD and 2 X 300 LPD Environmental (HSSE) management. Pre and post
Capacity for Canteen. HSSE audits were conducted at Wadala by the
4. Fifty Nos. conventional tube lights replaced by HSSE experts in the U.K. to provide assurance that
Energy Efficient tube lights. none of the HSSE elements and related operating
practices at Wadala were having “red” traffic light.
5. Ten Nos. of old inefficient pumps replaced by
Apart from this, your Company’s ISO : 14001
Efficient Pumps.
Environment Management Systems certification
6. Modification of Induction Sealing Machines to was also re-validated.
reduce power consumption.
2. Your Company’s registration as a Research &
7. 35 KVAR Capacitor installed on output line of
Development Center with Department of Scientific
the transformer reduce losses.
& Industrial Research, Ministry of Science &
8. Modification of condensate return lines to the Technology, Government of India, has been
boiler house. renewed for the next three years, until March 2007.
Silvassa 3. Your Company continued its focus on
Quality Assurance in product design and
1. Timers introduced in Emergency lighting
operationalization.
system to prevent them from switching on
during day time. 4. A special Product Integrity audit team highlighted
and closed gaps between product claims and
2. Reprogrammed palletizer and transfer
performance.
conveyors from continuous mode to operate
on demand. 5. Cost re-engineering of various high volume product
3. Timer operated drain valve installed on the brands like CRB Plus and BP VMG resulted in cost
Dryer outlet instead of continuous blowing of of goods saving of the order of Rs. 5 crores per
air. annum. Work was completed during the year for
development of fuel efficient automotive gear oil
(b) Additional investments and proposals, if formulation and its benefit mapping, in combination
any, being implemented for reduction of with fuel efficient engine oil. The combination
consumption of energy: product offer is likely to hit the market during the
None in particular. 1st Quarter of 2005.
18
Directors’ Report
Castrol India Limited
6. The Technology Center at Wadala has developed a 1956 read with Companies (Particulars of Employees)
novel technique of using radioactive engine Rules, 1975 as amended is enclosed in this Report.
cylinders to measure the engine wear, on line. This
technique offers great possibilities for creating and AUDITORS
demonstrating the differential benefits of our The Shareholders of the Company are requested
product technology, vis-à-vis competition. The to appoint Auditors and to fix their remuneration.
equipment is installed and operated in a German M/s. S. R. Batliboi & Co., Chartered Accountants, the
laboratory. retiring Auditors have furnished to the Company the
required certificate under Section 224(1B) of the
7. A master plan for infrastructure development to
Companies Act, 1956 and are therefore eligible for
modernize the Technology Center has been
re-appointment as Auditors of the Company.
developed and approved. Some preliminary work
on the project was initiated during the year and the
entire master plan for reconstruction of PERSONNEL
administrative block and laboratories will be The Board wishes to place on record its sincere
completed in the year 2005. appreciation of the efforts put in by the Company’s
workers, staff and executives for achieving excellent
FOREIGN EXCHANGE EARNINGS AND OUTGO results under difficult conditions.
1. Activities relating to Export
DISTRIBUTORS, BANKERS AND OTHER BUSINESS
There were no significant exports by the Company ASSOCIATES
during the year.
The Board also wishes to thank its Distributors,
Bankers and other business associates for their support
2. Earnings and Outgo
during the year.
Members are requested to refer to note Nos. 17 to
19 of Schedule M forming part of the Balance Sheet
and Profit and Loss Account for the year ended
31st December, 2004. On behalf of the Board of Directors
N. K. Kshatriya R. Elston-Green A. S. Ramchander
PARTICULARS OF EMPLOYEES Managing Director Finance Director Director - Automotive
19
Directors’ Report
Castrol India Limited
Vehicle growth across all segments has been very good Competition from the Public Sector companies is
during 2004 but the lubricant demand has not grown growing with the PSUs increasing their focus and
proportionately. New engine and lubricant technology investment in brand building and marketing activities.
has resulted in lower requirement and longer usage life However, with a well planned strategy and innovative
of the lubricants. For example, the new generation marketing, your Company has maintained its leadership
4-stroke motorcycles consume about 15% lesser position in the retail automotive segment.
20
Directors’ Report
Castrol India Limited
21
Directors’ Report
Castrol India Limited
There is an increasing acceptance within the industries leading truck manufacturer in the country and intensive
towards value added products and services. Your marketing activity.
Company with its vast international solutions and Your Company also launched a new range of ancillary
services experience can add value to the emerging products viz. Brake fluids, gear oils and greases under
customer base. This in turn will add to the profitability of the umbrella of Castrol Protector Series. This has given
your Company. increased focus to these ancillary products both from
the trade and our workshop customers.
Threats
The BP lubricant brand continued to focus on marketing
Price undercutting by small regional competitors and
and field activity in 2004. The consumer testimonial
the tendency of Public Sector players to absorb the high
campaign communicated through mass media was
raw material costs to gain competitive advantage, can
supported by on-ground activity and an intensive
put pressure on our margins and market share.
consumer contact programme targeted at increasing
trials and off-take. This focus resulted in increased
(c) Segment-wise/Product-wise performance
brand awareness, trials and volumes. The BP brand
I. Automotive ended the year with a growth of 24%.
Your Company’s automotive business performance Two-wheeler lubricant sales continued to grow at a rate
saw a significant growth during 2004. At around 5% faster than the market, driven by sales of our 4-stroke
volume growth, your Company grew at twice the motorcycle engine oils – Activ 4T and Power 1. Rahul
estimated market growth rate. Further, your Company Dravid, India’s cricket Vice-Captain continues to be
was able to raise the unit realization by over 6% the brand ambassador for your Company and the
resulting in a net turnover growth of over 11%. two-wheeler brands successfully leveraged this
The communication of your Company’s flagship brand – association through a series of communication
CRB Plus, was refreshed with the ‘Sukhiram– messages and on-ground promotional activities.
Dukhiram’ campaign which communicated the Innovative marketing activity including ‘Cricket Clinics’
importance of using the right brand of oil for a truck. The conducted by Rahul Dravid, have paid rich dividends in
new tag line “CRB nahi daloge to mehenga padega” building long enduring relationships with our
explained the price premium of CRB Plus on the basis consumers.
of superior value proposition.
The focus in the passenger car segment continued to
With the revival in the agricultural segment, your be on Partnership Programmes with large OEMs like
Company actively reached out to farmers through Maruti and Tata Motors.
tractor clinics and special promotional offers. Our The Institutional business segment grew volumes
partnership agreements with leading tractor significantly due to the setting up of a focused sales
manufacturers like Mahindra & Mahindra and Escorts team, new customer offers and a growing market.
enabled us to further leverage our strength in this Here again, our strong partnerships with key OEMs
market. like L&T, JCB and Hitachi, enabled us to grow our
business.
The Castrol new gen truck engine oil range consisting of
CRB Turbo, RX Super Max and RX Super Plus showed During 2004, a foray was made into the ‘revenue
a strong growth in 2004. This was mainly due to good beyond lubes’ segment with the launch of a motorcycle
market growth, our alliance with Tata Motors – the service offering named ‘Castrol BikeZone’. The Castrol
22
Directors’ Report
Castrol India Limited
franchised two-wheeler workshops are currently being Company an opportunity to leverage its market
piloted in Chennai and Bangalore and will be taken to leadership position in the passenger car engine oil
other centers in India shortly. segment. Your Company’s focus continues to be on the
Franchised Workshop segment where it has strong
II. Non-Automotive partnerships with leading OEMs.
2004 was a good year for Industrial Lubricants and Mass media coupled with innovative on-ground
Services Division with sales showing a growth of 11% activities continue to spearhead your Company’s efforts
versus 2003. Your Company’s market share in the in the two-wheeler segment. A new campaign called
Industrial segment increased by 1.5% during this ‘‘Bikes ki nayi bhasha’’ has been launched nationally
period. Our new Customer Relationship Management and has been well accepted by consumers, mechanics
tool – ‘Platinum’ – has enabled us to improve our and trade.
customer facing touch time and allows us to measure
The road transport sector and freight market continue to
customer profitability with key accounts. This tool has
look up on the back of a good economic performance.
been very effectively used for making strategic
The favorable monsoon in 2004 is also expected to
intervention in improving our value added customer
positively impact the performance in the tractor
offers. This live database has also helped us in
segment. Your Company has recently relaunched the
engagement and communication within and outside the
Castrol CRB Plus brand sharply focusing the
organization.
communication on the agri and tractor segment. A new
Athena, a knowledge portal, to provide orientation campaign aimed at farmers has been created with the
programme for new recruits, segment training modules tagline “Mehenti itna, aap jitna”. This has touched a
and tracking learning process, was also launched. chord with the consumers and we expect to strengthen
50% of our channel partners were accredited for the brand’s bond with the farmers.
ISO-9001-2000 which tremendously helped to improve
Your Company will also continue to focus on creating
the operational efficiency.
and strengthening sustainable partnerships with OEMs
Innovative training modules titled ‘Castrol Professional and channel owners. This will help increase penetration
Way’, were also launched for all our channel partners. in the workshop segment and also create a barrier to
This equipped them to understand customer entry for the unorganized sector in lubricants.
requirements and make suitable customer offers.
After a long period of time, your Company’s products
Your Company’s effort on the initiative to reduce the are once again being sold through the fuel forecourts of
working capital invested in the business through the private players like Reliance and Essar. This has
project ‘Cash is here’, has paid off. There has been a opened up a new business opportunity for your
marked reduction in the Receivables as also the stock Company.
levels during the year under review.
Competitive pressures will continue with more focus
being laid by the PSUs on their fuel and lubricant
(d) Outlook
marketing and brand building activities.
I. Automotive
The growth trend in the personal mobility segment II. Non-Automotive
is expected to continue. Passenger car manufacturers The Indian economy has performed creditably in the
continue to launch newer, international standard recent past and this has been reflected by the growth in
vehicles on a regular basis and this offers your the Industrial sector as well as the performance of the
23
Directors’ Report
Castrol India Limited
Industrial business of your Company. However, the assurance that transactions are executed with
aggressive pricing strategy adopted by competition, management authorization and that they are recorded
continues to impact margins. To counter this, your in all material respects to permit preparation of financial
Company continues to offer innovative, value added statements in conformity with established accounting
customer offers to targeted segments. principles and that the assets of your Company are
adequately safe-guarded against significant misuse or
In addition, Castrol is sharply focusing all its efforts on
loss. An independent internal audit function is an
profitable customer segments and undertaking process
important element of your Company’s internal control
fitness and pricing projects which are designed to
system. The internal control systems are supplemented
improve the bottom line even under difficult trading
through an extensive internal audit programme and
conditions.
periodic review by Management and Audit Committee.
With Indian manufacturing sector positioning itself as a
possible and credible outsourcing destination, we (g) Discussion on Financial Performance with
believe that the Industrial growth and by inference, the respect to Operational Performance
Industrial lubricant business, will grow faster in the next Your Company has achieved both volume (up 6%) and
three years. unit sales realization (up 6%) growth in 2004 which in
turn has resulted in a healthy 12% growth in gross
(e) Risks and Concerns sales. This growth is well above our estimate of the
I. Automotive market growth. On the other hand, raw material costs
Increasing base oil price continues to put pressure on also increased significantly for the second consecutive
margins and is a major cause of concern for your year, which negated much of this top line growth. We
Company. Whilst we have been able to convince our continue to increase the investment in our brands, but
consumers and customers about the inevitability of have sought to minimize increases in other overheads.
increasing prices in the past, it may be difficult to Before exceptional items, the Profit Before Tax (PBT)
continue doing so. With many competitors pursuing a increased by 4%, however after exceptional items,
volume share growth objective, our volume growth plan headline PBT declined by 4%. This was due to a
may be at some risk. change in estimation of useful life of assets and costs
relating to our Ballabgarh plant closure. With reference
II. Non-Automotive to working capital, the value of inventories has risen
The Industrial lubricant market continues to be solely due to the increase in raw material costs.
dominated by the Public Sector companies with Outstanding debtors has been maintained at 2003
integrated base oil supplies which allows them the levels despite the increase in product prices. This has
flexibility of aggressive pricing. Continued price been achieved through well implemented cash
undercutting by the unorganized sector poses a further collection efficiencies.
risk to delivery.
(h) Health, Safety, Security & Environment
(f) Internal control systems and their adequacy Your Company lays great emphasis on Health, Safety,
Your Company maintains an adequate and effective Security and Environment (HSSE) which is one of its
internal control system commensurate with its size and Brand Values.
complexity. We believe that these internal control Road transport continues to be our greatest challenge
systems provide, among other things, a reasonable and your Company has taken a number of initiatives to
24
Directors’ Report
Castrol India Limited
propagate road safety not just amongst its own staff but encourages and further develops functional excellence
amongst contractors and society at large. During the within your Company. In keeping with the functional
year under review, there was a reduction in fatalities excellence theme, there was a lot of focus on
and injuries compared to previous year. There was one understanding functional capability and developing
third party fatality in a contractor road accident where functional competency frameworks.
we had material influence. During the year under review, development of
During 2004, we launched the Driving Safety Standards leadership capability in the organization continued to be
which are being implemented from 1st January, 2005. the key focus. A number of training initiatives directed
This should improve our road safety in 2005 and towards people development like Leadership
beyond. Your Company also implemented an programmes for First level and Senior level leaders and
aggressive programme to upgrade staff as well as Assessment centers for development of Leadership
transport operators’ vehicles to a higher safety Potential were undertaken during the year. Our talent
standard. Driving Safety programmes were also continues to be recognized within the BP group and this
introduced to our contractors and over 3000 heavy duty year too, we saw several of our Senior Managers being
truck drivers were given training in defensive driving. seconded to assignments in other parts of the BP Group
The increased focus on safety in our Plants resulted in worldwide.
improved safety records at all our Plants. Whilst your Following a review of our manufacturing operations,
Company’s Tondiarpet and Patalganga Plants it was decided to close down our Ballabgarh Plant near
successfully completed seven years without any Days New Delhi. A voluntary retirement scheme
Away from Work Cases (DAFWCs), the Paharpur Plant was announced in the Plant in November 2004.
completed five years without a DAFWC. 11 executives and 32 workmen opted for voluntary
In recognition of your Company’s efforts towards retirement.
environment protection and energy conservation, the Our relations with our employees continued to remain
Company’s Patalganga Plant was awarded the cordial during the year. The total number of people
National Energy Conservation Award 2004 – Certificate employed in the Company as on 31st December 2004
of Merit, in the Petrochemicals sector. was 891.
align the organization to the new lubricants global Managing Director Finance Director Director - Automotive
25
Directors’ Report
Castrol India Limited
26
Directors’ Report
Castrol India Limited
All Directors except Mr. C. D’Mello & Mr. R. Pisharody, 3. Audit Committee
who were Directors of the Company on 5th May, 2004, (a) Terms of Reference
attended the Annual General Meeting held on the said
i. To investigate any activity within its terms of
date.
reference.
(c) Number of other Companies or Committees the ii. To seek information from any employee.
Director is a Director/Member/Chairman of: iii. To obtain outside legal or other professional advice.
Name of the Director(s) Number of other Number of iv. To secure attendance of outsiders with relevant
Companies Committees expertise, if it considers necessary.
(excluding (other than
Private Castrol India) It may be clarified that the role of the Audit Committee
Companies) in which includes matters specified under Clause 49 of the
in which Director Member Listing Agreement entered into between the Company
(excluding Alternate/
Nominee
and The Stock Exchange, Mumbai, on which the
Director) Company’s shares are listed.
Mr. S. M. Datta 12 (1) 9 (2)
Mr. N. K. Kshatriya — — (b) Composition, name of members and
Mr. R. Elston-Green — — Chairperson
Mr. A. K. Jhawar 2 1 As on 31st December, 2004, the Audit Committee
Mr. R. Gopalakrishnan 12 (3) 10 (4) comprised of 3 Non-Executive Directors viz.
Mr. P. Hughes — — Mr. D. S. Parekh, Mr. R. Gopalakrishnan and
Mr. D. S. Parekh 13 (5) 9 (6) Mr. P. Hughes with the Head-Internal Audit being a
Mr. R. A. Savoor 5 (7) 5 (8) Permanent Invitee to the Committee and the Company
Mr. L. Freese 1 — Secretary being the Secretary of the Committee.
1. Includes 3 Companies in which Chairman Mr. D. S. Parekh the Chairman of the Committee and
2. Includes 4 Committees in which Chairman Mr. R. Gopalakrishnan, Member are Independent
3. Includes 1 Company in which Chairman Directors on the Committee whereas Mr. P. Hughes is a
4. Includes 5 Committees in which Chairman Nominee Director of Castrol Ltd., U.K.
5. Includes 7 Companies in which Chairman
6. Includes 5 Committees in which Chairman
(c) Meetings and attendance during the year
7. Includes 1 Company in which Chairman
8. Includes 1 Committee in which Chairman 4 meetings were held during the financial year
1st January, 2004 to 31st December, 2004. The
(d) Number of Board Meetings held and the dates
attendance of each Member of the Committee is given
of the Board Meeting
below:
4 Board Meetings were held during the financial year
No. of % of total Meetings
1st January, 2004 to 31st December, 2004. The dates
Meetings attended during the
on which the said meetings were held are given below: attended tenure as a Director
30th January, 2004 Mr. D. S. Parekh 4 100
30th April, 2004 Mr. R. Gopalakrishnan 4 100
23rd July, 2004 Mr. P. Hughes or his Alternate 3 75
Mr. L. Freese
21st October, 2004
27
Directors’ Report
Castrol India Limited
28
Directors’ Report
Castrol India Limited
ii. Non-Wholetime Director(s) (d) Number of complaints : All the Complaints have been
not solved to the resolved to the satisfaction of
Sitting Fees Commission satisfaction of the Complainants except for
(Rs.) (Rs.)
shareholders disputed cases and sub-judice
matters which would be solved
Mr. S. M. Datta 75,000 7,50,000
after the matter is duly
disposed by the Court.
Mr. R. Gopalakrishnan 85,000 6,00,000
(e) Number of pending : 7 transfers were pending at
Mr. D. S. Parekh 60,000 6,00,000 share transfers the close of the financial year.
at the close of
Mr. R. A. Savoor 70,000 6,00,000 the financial year
With effect from 1st April, 2004 the Company had 6A. General Body Meetings
increased the sitting fees payable to the Non-Executive (a) Location and time where last three AGMs
Independent Directors from Rs. 5000/- to Rs. 10,000/- were held
for each Board/Committee Meeting attended by them.
Location Date Time
(i) Yashwantrao Chavan : 5.5.2004 11.00 a.m.
5. Transfer & Shareholders’/Investors’ Grievance Pratishthan Auditorium
Committee Y.B. Chawan Centre
Gen. Jagannath Bhosle
As on 31st December, 2004, the Transfer and
Marg, Next to Sachivalaya
Shareholders’/Investors’ Grievance Committee Gymkhana, Mumbai 400 021
comprised of Mr. S. M. Datta, Chairman, (ii) Birla Matushri Sabhagar : 19.6.2003 3.00 p.m.
Mr. N. K. Kshatriya, Mr. R. Elston-Green and 19, Marine Lines
Mr. R. A. Savoor. The Company Secretary is the Mumbai 400 020
Secretary of the Committee. (iii) Birla Matushri Sabhagar : 5.8.2002 3.00 p.m.
19, Marine Lines,
(a) Name of the : Mr. S. M. Datta Mumbai 400 020
Non-Executive Director (b) Whether any Special : No
heading the Committee Resolutions were put
through Postal Ballot
(b) Name and Designation : Mr. A. H. Mody last year
of Compliance Officer Company Secretary & Details of voting pattern : Not Applicable
Head – Legal (c) Persons who conducted : Not Applicable
the Postal Ballot exercise
(c) No. of Shareholders : 7 complaints were (d) Are polls proposed to be : No resolutions
complaints received received from Stock conducted through Postal requiring postal ballot
during the financial Exchange/Investor Ballot this year for matters as required
year Associations/Securities and under Clause 4 of the
Exchange Board of India Companies (Passing of
(SEBI)/Department of Resolutions by Postal
Company Affairs and were Ballot) Rules, 2001
reported to the Transfer and have been placed for
Shareholders’/Investors’ Shareholders’
Grievance Committee in terms approval at the
of Circular No. 1 (96-97) Meeting.
dated 25.7.96 of SEBI. (e) Procedure for Postal Ballot : Not Applicable
29
Directors’ Report
Castrol India Limited
30
Directors’ Report
Castrol India Limited
}
7. Disclosure 9. General Shareholder Information
(a) Disclosures on materially significant (a) AGM : Tuesday,
None Date, Time and Venue 19th April, 2005,
related party transactions that may
at 2.00 p.m., at
have potential conflict with the Birla Matushri Sabhagar,
interests of Company at large. 19 Marine Lines,
Mumbai 400 020.
}
(b) Details of non-compliance by the
(b) Financial Year : (i) January 2005 to
company, penalties, strictures None in December 2005.
imposed on the company by Stock the last
(ii) First Quarter 2005.
Exchange or SEBI or any statutory three Results – 3rd/4th week
authority, on any matter related to years of April 2005.
capital markets, during the last (iii) Half yearly Results
three years. 2005 – 3rd/4th week
of July 2005.
8. Means of Communication (iv) Third Quarter 2005
(a) Half-yearly report sent : No, as the results of the Results – 3rd/4th week
to each household of Company are published in of October 2005.
shareholders the Newspapers all over (v) Results for the year
India ending 31st December,
2005 – January/
(b) Quarterly results : (i) Times of India – February, 2006.
Newspapers in which Mumbai, Delhi, Pune,
(c) Date of Book closure : 29th March, 2005 to
results are normally Ahmedabad, Lucknow,
19th April, 2005
published in Patna, Bangalore,
(both days inclusive).
Hyderabad & Kolkata
editions in English (d) Dividend Payment date(s) : Interim – 16th August, 2004
Final – on or after
(ii) Maharashtra Times – 19th April, 2005.
Mumbai edition in (e) Listing on Stock : The Company has paid the
Marathi Exchange, Mumbai listing fees for the period
1st April, 2004 to
(iii) Navbharat Times –
31st March, 2005.
New Delhi edition in
Hindi (f) (i) Stock Code – : 870
Physical
Any website, where : Yes – www.castrol.co.in
(ii) Demat ISIN Number : INE 172A01019
displayed for NSDL & CDSL
Whether it also displays : Yes (g) Market price Data: : Please See Annexure I of
official news releases High/Low during each this Report.
month in last financial
The presentations made : No
year
to institutional investors or
to the analysts (h) Stock Performance in : Please See Annexure II of
comparison to this Report.
(c) Whether MD&A is a part : Yes. Part of the Directors’ Broad-based indices
of the Annual Report Report as Annexure ‘A’ such as BSE Sensex,
or not CRISIL
31
Directors’ Report
Castrol India Limited
(i) Registrar and Transfer : Tata Share Registry (m) Outstanding GDRs/ : The Company has not
Agents Limited, ADRs/Warrants or any issued any GDRs/ADRs/
Army and Navy Building, Convertible instruments, Warrants or any
148, M.G. Road, conversion date and likely Convertible instruments.
Mumbai 400 001. impact on equity
32
Directors’ Report
Castrol India Limited
33
Directors’ Report
Castrol India Limited
Annexure II
34
Directors’ Report
Castrol India Limited
AUDITORS’ CERTIFICATE
To The Members of Castrol India Limited We state that no investor grievance is pending for a
We have examined the compliance of conditions of period exceeding one month against the Company as
Corporate Governance by Castrol India Limited, for per the records maintained by the Share Registrars and
the year ended December 31, 2004 as stipulated in reviewed by the Shareholders’/Investors’ Grievance
Clause 49 of the Listing Agreement of the said Committee.
Company with the Stock Exchange. We further state that such compliance is neither an
assurance as to the future viability of the Company
The compliance of conditions of Corporate Governance
nor the efficiency or effectiveness with which the
is the responsibility of the management. Our
management has conducted the affairs of the
examination was limited to procedures and
Company.
implementation thereof, adopted by the Company for
ensuring the compliance of the conditions of the
Corporate Governance. It is neither an audit nor an
expression of opinion on the financial statements of the For S.R. BATLIBOI & CO.
Company. Chartered Accountants
per Hemal Shah
In our opinion and to the best of our information and
Partner
according to the explanations given to us, we certify
Membership No. : 42650
that the Company has complied with the conditions of
Corporate Governance as stipulated in the above- Mumbai,
mentioned Listing Agreement. Dated: 8th March, 2005.
35
Directors’ Report
Castrol India Limited
Sr. No. Category No. of shareholders No. of shares held % to paid-up capital
36
Auditors’ Report
Castrol India Limited
Auditors’ Report
37
Auditors’ Report
Castrol India Limited
(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.
(b) 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.
(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.
(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 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) 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, custom 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.
38
Auditors’ Report
Castrol India Limited
(c) According to the records of the Company, the dues outstanding of income tax, sales tax, wealth tax,
service tax, custom duty, excise duty and cess on account of any dispute, are as follows:
Name of the statute Nature of dispute Amount Period to which Forum where dispute is pending
(Rs. in Crores) the amount relates
Central Sales Tax Non submission of declaration 18.67 1987 to 2003 Assistant Commissioner, Deputy
Act & Local Sales forms, Disallowance of Set off Commissioner, Tribunal and
Tax Act claim, Classification dispute, High Court.
Rate dispute, Disallowance of
credit notes and rebates and
Other dues.
Central Excise Act, Valuation, Modvat Credit, Stock 41.31 1990 to 2004 Deputy Commissioner, Additional
1944 Differences, Classification, Commissioner, Commissioner,
Provisional Assessments and Joint Commissioner,
Other Issues. Commissioner (Appeals),
CEGAT and Supreme Court.
Customs Act, 1962 Valuation 0.08 1998 Assistant Commissioner
Service Tax under Service Tax on Royalty and 7.50 1997 to 2004 Deputy Commissioner, Additional
the Finance Act, Service Tax on rented tanks. Commissioner and Commissioner.
1994
(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 a financial institution,
bank 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 respect of dealing/trading in securities, 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 securities 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 a 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 material fraud on or by the Company has been noticed or reported during the course of our audit.
For S. R. BATLIBOI & COMPANY
Chartered Accountants
per Hemal Shah
Partner
Membership No. : 42650
Mumbai
Dated: January 17, 2005
39
Balance Sheet
Castrol India Limited
2004 2003
Schedule Rupees Rupees Rupees
in Crores in Crores in Crores
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital A 123.64 123.64
Reserves and Surplus B 236.43 224.44
360.07 348.08
Loan Funds C
Unsecured Loans 3.72 4.20
APPLICATION OF FUNDS
Fixed Assets E
Gross Block 249.79 247.23
Less: Depreciation 100.89 79.58
Less: Impairment of Fixed Assets 3.79 0.24
Notes on Accounts M
The schedules referred to herein form an integral part of the Balance Sheet.
As per our report of even date S. M. DATTA Chairman N. K. KSHATRIYA Managing Director
For S. R. BATLIBOI & COMPANY
Chartered Accountants Executive Directors
40
Profit & Loss Account
Castrol India Limited
Profit and Loss Account for the year ended 31st December, 2004
2004 2003
Schedule Rupees Rupees Rupees
in Crores in Crores in Crores
INCOME
Sales [Net of rebates Rs. 41.94 Crores (2003 : Rs. 38.50 Crores)] 1523.21 1360.51
Less: Excise Duty 218.09 189.36
Net Sales 1305.12 1171.15
Other Income I 22.09 19.14
Total Income 1327.21 1190.29
EXPENDITURE
Cost of Materials J 777.02 669.72
Operating and Other Expenses K 319.88 299.33
Interest L 2.87 2.57
Depreciation (Refer Note 3 of Schedule M) 24.88 14.31
Total Expenditure 1124.65 985.93
APPROPRIATION TO:
Interim Dividend 49.46 49.46
Tax on Interim Dividend 6.46 6.34
Proposed Final Dividend 52.55 52.55
Tax on Proposed Final Dividend 6.87 6.73
Education Cess on Tax on Final Dividend 2003 0.13 —
General Reserve 14.00 17.00
Balance carried forward 16.70 18.71
146.17 150.79
Earning per share (Basic & Diluted) (Face value of Rs. 10/-) 10.31 11.11
Notes on Accounts M
The schedules referred to herein form an integral part of the Profit and Loss Account.
As per our report of even date S. M. DATTA Chairman N. K. KSHATRIYA Managing Director
For S. R. BATLIBOI & COMPANY
Chartered Accountants Executive Directors
41
Schedules
Castrol India Limited
SCHEDULE A
2004 2003
Rupees Rupees
in Crores in Crores
SHARE CAPITAL
Authorised
124,000,000 (2003 : 124,000,000) Equity Shares of Rs. 10/- each 124.00 124.00
Notes:
1. Includes 87,687,455 (2003 : 87,687,455) Equity Shares of Rs. 10/- each held by Castrol Ltd., U.K., the Holding Company.
(Also refer Note 7 of Schedule M).
2. Includes 116,353,318 (2003 : 116,353,318) Equity Shares allotted as fully paid up Bonus Shares by capitalisation of Share Premium/
General Reserve.
SCHEDULE B
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
42
Schedules
Castrol India Limited
SCHEDULE C
2004 2003
Rupees Rupees
in Crores in Crores
LOAN FUNDS
UNSECURED LOANS
SCHEDULE D
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
Deferred Tax Assets and Liabilities are attributable to the following items:
Liabilities
Depreciation 27.09 29.89
Less: Assets
Provision for Doubtful Debts 1.15 2.88
Voluntary Retirement Scheme Expenses 3.25 3.65
Accrual for expenses (Including Leave Encashment)
allowable only on payment 4.48 4.22
43
Schedules
Castrol India Limited
SCHEDULE E
FIXED ASSETS Rupees in Crores
Leasehold
Land (1) 0.92 — — 0.92 0.28 0.02 — 0.30 — 0.62 0.64
Buildings (2) 66.92 0.48 0.08 67.32 12.00 2.64 0.02 14.62 — 52.70 54.92
Plant &
Machinery 145.56 7.47 3.09 149.94 58.73 16.48 2.07 73.14 3.79 73.01 86.59
Plant &
Machinery
Intangibles 2.45 — — 2.45 0.44 0.69 — 1.13 — 1.32 2.01
Furniture,
Fixtures
and Office
Equipments 23.37 0.91 2.50 21.78 7.50 4.72 1.01 11.21 — 10.57 15.87
Motor
Vehicles 1.22 — 0.63 0.59 0.63 0.33 0.47 0.49 — 0.10 0.59
247.23 8.86 6.30 249.79 79.58 24.88 3.57 100.89 3.79 145.11 167.41
Previous Year 251.39 13.55 17.71 247.23 72.97 14.31 7.70 79.58 0.24
Refer Notes 1(b), 3 and 4 of Schedule M relating to Fixed Assets, Depreciation and Impairment.
Notes :
(1) Cost includes Rs. 0.49 Crore (2003 : Rs. 0.49 Crore) for which execution of Land Lease agreement in respect of plots in Mumbai is in progress.
(2) Comprises of cost of premises including shares of paid up value of Rs. 0.01 Crore (2003 : Rs. 0.02 Crore) in Co-operative Societies.
(3) Land & Building, Plant & Machinery and Furniture & Fixtures at Ballabgarh and Hosakote plants and Company owned Office Premises in Mumbai are retired
from active use and held for disposal. Accordingly these assets are carried at lower of cost and net realisable value. The Net Book Value of such assets as at
December 31, 2004 is Rs. 14.24 Crores (2003 : Rs. 7.88 Crores).
44
Schedules
Castrol India Limited
SCHEDULE F
2004 2003
Rupees Rupees
in Crores in Crores
LONG TERM
Quoted:
Government Securities * [Matured Face Value Rs. 0.01 Crore (2003 : Rs. 0.01 Crore)] 0.02 0.02
30,100 (2003 : 30,100) – 6.75% Tax Free Bonds (US 64) of Unit Trust of India of Rs. 100/- each 0.30 0.30
[Market Value Rs. 0.31 Crore (2003 : Rs. 0.34 Crore)]
CURRENT
Unquoted:
Government Treasury bills [Face Value Rs. 130.00 Crores (2003 : Rs. 86.19 Crores)] 128.59 84.46
In Subsidiary Company
Nil (2003 : 1,000) Equity Shares of Rs. 10/- each fully paid in
Indrol Chemicals & Specialities Private Limited (Refer Note 16 of Schedule M) — 0.01
128.91 84.79
45
Schedules
Castrol India Limited
SCHEDULE G
2004 2003
Rupees Rupees
in Crores in Crores
Sundry Debtors @
Secured 3.98 5.00
Unsecured, considered good
Exceeding six months 2.17 2.73
Others 125.11 123.52
Unsecured, considered doubtful (Exceeding six months) 3.14 8.02
134.40 139.27
Less: Provision for Doubtful Debts 3.14 8.02
131.26 131.25
@ Includes amount due from Companies under same management Rs. 9.78 Crores
(2003 : Rs. 6.21 Crores), list of which as identified by management.
46
Schedules
Castrol India Limited
SCHEDULE G — (Contd.)
2004 2003
Rupees Rupees
in Crores in Crores
Note: Amounts due from Directors of the Company Rs. 0.19 Crore (2003 : Rs. 0.21 Crore) and maximum amount due from Directors of the
Company at any time during the year Rs. 0.22 Crore (2003 : Rs. 0.22 Crore).
SCHEDULE H
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors (Refer Note 14 of Schedule M) 189.32 184.09
Advances from Customers 1.62 1.77
Interest accrued and not due on Loans/Deposits 0.10 —
Amount retained for taxation liability of Castrol Ltd., U.K. 0.92 1.05
Investor Education and Protection Fund shall be credited
by the following amount (Refer Note below)
Unclaimed Dividends 5.06 5.29
197.02 192.20
Provisions
Provision for Indirect Taxation 11.66 8.21
Provision for Current Taxation (Net of Advance Tax) 14.90 2.76
Proposed Final Dividend 52.55 52.55
Tax on Proposed Final Dividend 6.87 6.73
85.98 70.25
283.00 262.45
Note: There is no amount due and outstanding as at Balance Sheet date to be credited to Investor Education and Protection Fund.
47
Schedules
Castrol India Limited
Schedules forming part of the Profit and Loss Account for the year ended 31st December, 2004
SCHEDULE I
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
OTHER INCOME
Interest (Gross)
From Current Investments (Non trade) 0.02 0.01
On Bank Deposits 0.06 0.42
On Income Tax Refund 2.87 0.72
Others [Tax deducted at source Rs. 0.01 Crore
(2003 : Rs. 0.09 Crore)] 0.75 0.71
3.70 1.86
SCHEDULE J
2004 2003
Rupees Rupees
in Crores in Crores
COST OF MATERIALS
Opening Stock
Raw Materials and Packages 73.21 57.43
Traded Items 7.53 8.65
80.74 66.08
Add: Purchases 787.99 698.70
868.73 764.78
Less: Closing Stock
Raw Materials and Packages 87.86 73.21
Traded Items 6.26 7.53
94.12 80.74
774.61 684.04
(Increase)/Decrease in Stock of Finished Products:
Opening Stock 73.72 57.24
Closing Stock 70.71 73.72
3.01 (16.48)
Excise Duty on account of Increase/(Decrease) in Stock of Finished Products (0.60) 2.16
777.02 669.72
Note: Purchases include foreign exchange difference on imports — Gain Rs. 0.57 Crore (2003 : Gain Rs. 0.55 Crore)
48
Schedules
Castrol India Limited
Schedules forming part of the Profit and Loss Account for the year ended 31st December, 2004
SCHEDULE K
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
OPERATING AND OTHER EXPENSES
Salaries, Wages and Bonus [Refer Note 1(e) of Schedule M] 46.12 47.01
Performance Linked Incentive to Wholetime Directors 0.43 0.58
Contribution to Provident and Pension Funds
[Refer Note 1(e) of Schedule M] 5.88 6.33
Gratuity [Refer Note 1(e) of Schedule M] 5.29 3.08
Staff Welfare Expenses 7.43 8.02
65.15 65.02
Rent 12.08 10.46
Rates & Taxes 1.67 1.68
Power & Fuel 3.46 3.44
Stores & Consumables 1.14 1.32
Freight & Forwarding Charges 47.56 40.54
Insurance 2.37 2.40
Repairs & Maintenance – Land & Building 1.97 2.48
Repairs & Maintenance – Plant & Machinery 2.33 2.65
Repairs & Maintenance – Others 4.16 3.92
Bad Debts Written Off 5.20 6.24
Processing & Filling Charges 21.72 20.64
Non-recovered Taxes 12.06 8.47
Advertisement & Sales Promotion 60.00 54.33
Stock Point Operating Charges 10.36 9.63
Loss on Disposal/Write Off of Fixed Assets (Net) — 3.16
Directors’ Sitting Fees 0.03 0.02
Voluntary Retirement Scheme Expenses [Refer Note 1(i) of Schedule M] 0.51 0.72
Commission to Resident Non-Wholetime Indian Directors 0.26 0.26
Royalty 21.70 22.71
Sales Promotion Fee 13.34 8.19
Travelling Expenses 12.60 10.41
Miscellaneous Expenses (Refer Note 13 of Schedule M) (Net) 20.21 20.64
319.88 299.33
SCHEDULE L
2004 2003
Rupees Rupees
in Crores in Crores
INTEREST
To Banks 2.26 2.27
On Others 0.61 0.30
2.87 2.57
49
Schedules
Castrol India Limited
SCHEDULE M
NOTES ON ACCOUNTS
1. Accounting Policies :
(a) Basis of Preparation of Accounts :
The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the
Indian Accounting Standards and the relevant provisions of the Companies Act, 1956. The Financial Statements have
been prepared under the historical cost convention on an accrual basis.
(h) Taxation :
(i) Provision for Current Income Tax is made in accordance with the Income Tax Act, 1961.
(ii) Deferred Tax is recognised, subject to the considerations of prudence, on timing differences, being the difference
between taxable income and accounting income that originate in one period and are capable of reversal in one or
more subsequent periods.
(iii) The tax year for the Company being the year ending 31st March, the provision for taxation for the year is the
aggregate of the provision made for the three months ended 31st March, 2004 and the provision based on the
figures for the remaining nine months upto 31st December, 2004, the ultimate tax liability of which will be
determined on the basis of the figures for the period 1st April, 2004 to 31st March, 2005.
(i) Voluntary Retirement Scheme Expenses are fully written off to the Profit and Loss Account in the year in which they
accrue.
2. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for
Rs. 2.53 Crores (2003 : Rs. 2.37 Crores).
50
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
3. In view of recent trends in declining useful lives of assets e.g. due to the rate of change in digital technology, the Company has
considered it prudent to conduct a broad review of the remaining estimated useful lives of all its Fixed Assets. As a result the
Company has reduced the estimated useful life and correspondingly increased the rate of depreciation for certain categories of
assets, which are given below : (These Assets were depreciated till 2003 at rates prescribed under Schedule XIV to the
Companies Act, 1956)
51
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
8. Segment Information :
The business segment has been considered as the primary segment. The Company is organised into two business segments,
Automotive & Non Automotive.
The above business segments have been identified considering :
— The customers
— The differing risks and returns
— The organisation structure
— The internal financial reporting system
Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating
activities of the segment and amounts allocated on a reasonable basis.
Rupees in Crores
Revenue
Net Sales/Income from
Operations 1111.69 193.43 — 1305.12 1001.48 169.67 — 1171.15
Results
Segment Results 194.58 20.45 — 215.03 197.00 18.74 — 215.74
Unallocable Expenditure
net of Unallocable Income — — 9.60 9.60 — — 8.81 8.81
Exceptional Items
(Refer Note 4 of Schedule M) — — 7.27 7.27 — — — —
Interest — — 2.87 2.87 — — 2.57 2.57
Profit Before Taxation — — — 195.29 — — — 204.36
Provision For Current Taxation — — — 68.73 — — — 63.35
Deferred Taxation — — — (0.90) — — — 3.63
Profit After Taxation — — — 127.46 — — — 137.38
Other Information
Segment Assets 400.35 106.01 158.28 664.64 412.08 108.72 112.24 633.04
Segment Liabilities 183.07 20.05 101.45 304.57 179.17 15.29 90.50 284.96
Capital Expenditure
(Including Capital
Work-in-progress) 8.37 1.55 — 9.92 12.25 0.68 — 12.93
Depreciation
(Refer Note 3 of Schedule M) 20.59 4.29 — 24.88 10.23 4.08 — 14.31
Impairment of Fixed Assets 3.00 0.55 — 3.55 0.20 0.04 — 0.24
Geographical Segment
Revenue
India 1304.48 1170.99
Outside India 0.64 0.16
1305.12 1171.15
Assets
India 659.15 628.57
Outside India 5.49 4.47
664.64 633.04
Capital Expenditure
(including Capital
Work-in-Progress)
India 9.92 12.93
Outside India — —
9.92 12.93
52
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
(b) Subsidiary Indrol Chemicals & Specialities Private Limited
(c) Fellow Air BP Lubricants BP Mauritius Ltd. Castrol Industrial North America Inc.
Subsidiaries Aspac Oil (Thailand) Ltd. BP Middle East Castrol Industrie GMBH
with which the Aspac Oil Korea BP Oil International Ltd. Castrol International Ltd.
Company has BP Asia Pacific Pte Ltd. BP Oil New Zealand Castrol Italiana SPA
transactions BP Chemicals (Malaysia) BP Oil UK Ltd. Castrol Offshore
BP Chemicals Ltd. BP Petrolleri A.S Castrol PGO UK
BP China BP Shipping Ltd. Castrol SAME
BP Corporation NA Inc. BP Singapore - Lubes Castrol South Africa
BP Exploration (IN DJAZAIR) Ltd. BP Singapore PTE Ltd. Castrol (UK) Ltd.
BP Exploration (IN Salah) Ltd. BP Singapore Spec Ind Lubes Deutsche BP Aktiengesellschaft
BP Gas & Power-Head Office BP Southern Africa Freight Systems Co. Ltd.
BP Gas Marketing Ltd. Burmah Oil Deutschland Lubricants Belgium
BP India Ltd. Burmah Oil TECH’ GMBH Lubricants UK Corporate
BP India Services Pvt. Ltd. Castrol Australia PTY Ltd. Lubricants UK Ltd.
BP International Holdings Oil. Castrol Belgium PT Castrol Indonesia
BP International Ltd. Castrol China Ltd. Tata BP Solar India Ltd.
BP Japan KK Castrol France S A
Purchase of Materials/
Finished Goods — — — — 69.85 — — — — 42.02
Sale of Goods — — — — 2.44 — — — — 0.83
Receiving of Services — — — — 4.28 — — — — 4.87
Rendering of Services &
Deputation of Employees — — — — 17.34 0.06 — — — 10.89
Commission Income — — — — 0.99 — — — — 0.87
Contribution to Funds — — 11.11 — — — — 9.27 — —
Dividend 72.34 — — — 0.11 72.34 — — — 0.11
Dividend Received — — — — — — 0.39 — — —
Royalty 21.70 — — — — 22.71 — — — —
Amounts Payable 57.26 — — — 8.40 60.09 — — — 2.61
Amounts Receivable — — — — 9.79 0.06 — — — 6.15
Remuneration to
Managing Directors — — — 1.27 — — — — 1.13 —
Remuneration to
Executive Directors — — — 1.91 — — — — 2.47 —
Loan Outstanding — — — 0.19 — 0.65 — — 0.20 —
Recovery of Loan &
Interest thereon — — — 0.01 — — — — 0.01 —
C. The information given above, have been reckoned on the basis of information available with the Company.
53
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
10. Operating Lease for assets taken on lease after 1st April, 2001.
31st December, 31st December,
2004 2003
Rupees Rupees
in Crores in Crores
(a) Total of future minimum lease payments
(i) Not later than one year 11.35 9.58
(ii) Later than one year and not later than five years 10.26 15.20
(iii) Later than five years — —
(b) Lease payments recognised in the Profit and Loss account 12.08 10.46
11. Information given under Clause 3(i)(a), 3(ii), 4-C, 4-D of Part II of Schedule VI to the Companies Act, 1956.
31st December, 2004 31st December, 2003
Quantity Value Quantity Value
(KLs/MTs) Rupees (KLs/MTs) Rupees
in Crores in Crores
54
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
31st December, 2004 31st December, 2003
Quantity Value Quantity Value
(KLs/MTs) Rupees (KLs/MTs) Rupees
in Crores in Crores
(c) Opening and Closing Stock of Goods produced :
Manufactured Grades :
Lubricating Oils and Greases
Opening Stock 15868 73.72 13648 57.24
Closing Stock [Excluding
shortages/losses – 612 KLs/MTs
(2003 : 538 KLs/MTs)] 14106 70.71 15868 73.72
(d) Traded Items :
Opening Stock 436 7.53 647 8.65
Purchases 569 10.14 1170 15.14
Closing Stock 382 6.26 436 7.53
(e) Licensed and Installed Capacity :
(i) Licensed Capacity — Not applicable as per legal advice
(ii) Installed Capacity
(Technically evaluated as certified
by the Management and accepted
by Auditors) (Per Year on a single
shift basis)
31st December, 31st December,
2004 2003
(KLs/MTs) (KLs/MTs)
For production of Lubricating Oils, Greases, Brake Fluids,
at Patalganga, Kolkata, Chennai, Ballabgarh and Silvassa. 165764 165764
(f) Production of Lubricating Oils, Greases, etc.
[Including processing done by third parties 15899 KLs/MTs (2003 : 15306 KLs/MTs)] 222433 213217
(g) (i) The relevant information regarding turnover, production, opening and closing stocks is given only in aggregate and no
detailed break-up thereof is given as the items are too numerous to be conveniently grouped.
(ii) Consumption includes adjustments for shortage/excess, etc. and the effects of reduction of inventory to realisable
value.
(iii) Quantities of turnover, consumption, production, opening and closing stocks of additives and chemicals are made up
of Kilolitres and Metric Tons, but the constituent units of measurement of the items have not been separately
identified and indicated.
(iv) As the Company manufactures and trades, the information required by Clause 3(ii)(a) of Schedule VI Part II to the
Companies Act, 1956 is interpreted to require total amounts to be disclosed in respect of opening stock, closing stock
and purchases of traded items.
31st December, 31st December,
2004 2003
Rupees Rupees
in Crores in Crores
12. Directors’ emoluments :
Total Remuneration (excluding sitting fees) [Refer (b) and (c) below] 3.43 3.85
Includes :
(i) Salary and Allowances 1.76 2.00
(ii) Contribution to Provident and other funds 0.30 0.38
(iii) Estimated Value of perquisites * 0.68 0.63
(iv) Performance Linked Incentive to Wholetime Directors 0.43 0.58
(v) Commission to Resident Non-Wholetime Indian Directors [Refer (c) below] 0.26 0.26
55
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
31st December, 31st December,
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
(a) Computation of profit in accordance with
Section 309(5) of the Companies Act, 1956 :
Profit before Taxation as per Profit and Loss Account 195.29 204.36
Add: Depreciation as per Profit and Loss Account 24.88 14.31
Voluntary Retirement Scheme Expenses 0.51 0.72
Exceptional Items - Voluntary Retirement Scheme Expenses -
Plant closure 3.72 —
Exceptional Items - Impairment of Fixed Assets - Plant closure 3.55 —
Directors’ Remuneration 3.43 3.85
Directors’ Sitting Fees 0.03 0.02
36.12 18.90
231.41 223.26
Less: Depreciation u/s 350 of the Companies Act, 1956 13.27 13.69
Profit on sale of Investments (Net) 3.90 6.93
Wealth Tax 0.16 0.21
Excess Provision for Doubtful Debts written back 4.88 3.97
22.21 24.80
Profit under Section 309(5) of the Companies Act, 1956 209.20 198.46
14. The Company owes to following Small Scale Industrial Undertakings sums outstanding for more than 30 days :
ABCD Drums & Barrels Industries. Ole Fine Organics Royal Castor Products Pvt. Ltd.
Amantech Chemicals Pvt. Ltd. Pax Enterprises Shah Packwell Industries
Central Oil Industries R. G. Desai Industries Suru Chemicals & Pharmaceuticals Pvt. Ltd.
Himatex Corporation R. K. Metal & Plastics Pvt. Ltd. Vibha Chem Products Pvt. Ltd.
Makwell Plasticizers Pvt. Ltd. Raj Lubricants (Madras) Ltd.
The information regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been
identified on the basis of information available with the Company. This has been relied upon by the auditors.
15. Research and Development expenses amounting to Rs. 7.50 Crores (2003 : Rs. 6.01 Crores) are included under relevant heads
of expense.
56
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
16. The Directors of Indrol Chemicals & Specialties Private Limited, a wholly owned Subsidiary Company, had Resolved to put the
Company in voluntary winding up. A final meeting of the Members of the Company was called by the Liquidator and the paid up
capital refunded to the Parent Company. An application has been made to the Official Liquidator to formally wind up the
Company.
31st December, 31st December,
2004 2003
Rupees Rupees
in Crores in Crores
17. C.I.F. Value of Imports :
Raw Materials 308.47 245.87
Capital Goods 0.66 0.81
20. Details of Dividend remitted during the year, to Two (2003 – Two) non-resident shareholders are as follows :
31st December, 31st December,
2004 2003
Dividend in respect No. of Rupees Rupees
of the year ended Shares in Crores in Crores
31-12-2002 (Final) 87822929 — 37.33
31-12-2002 (Special) 87822929 — 72.45
31-12-2003 (Interim) 87822929 — 35.13
31-12-2003 (Final) 87822929 37.33 —
31-12-2004 (Interim) 87822929 35.13 —
22. Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956.
I. Registration Details
Registration No. 2 1 3 5 9 State Code 1 1
57
Schedules
Castrol India Limited
SCHEDULE M (Contd.)
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
6 6 4 2 0 9 9 6 6 4 2 0 9 9
Sources of Funds:
Paid up Capital Reserves & Surplus
1 2 3 6 4 0 3 2 3 6 4 3 7 6
Application of Funds:
Net Fixed Assets Investments
1 4 9 7 7 2 1 1 2 8 9 1 1 5
Accumulated Losses
—
Product Description L U B R I C A T I N G O I L S
Executive Directors
58
Cash Flow
Castrol India Limited
Cash Flow Statement for the year ended 31st December, 2004
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
A. CASH FLOW FROM OPERATING ACTIVITIES
Adjustments for:
Adjustments for:
59
Cash Flow
Castrol India Limited
2004 2003
Rupees Rupees Rupees
in Crores in Crores in Crores
Notes: (1) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting
Standard-3 on Cash Flow Statement issued by The Institute of Chartered Accountants of India.
As per our report of even date S. M. DATTA Chairman N. K. KSHATRIYA Managing Director
For S. R. BATLIBOI & COMPANY
Chartered Accountants Executive Directors
60