Castrol - Annual Report - 2015

Castrol India Limited
Annual Report 2015
Unleashing
the Power of
Corporate
information
Board of Directors Bankers
Mr. S. M. Datta Deutsche Bank
Chairman
HDFC Bank Ltd.
Mr. R. Gopalakrishnan
Independent Director
The Hong Kong & Shanghai Banking Corporation Ltd.
Mr. Uday Khanna State Bank of India

Independent Director Citibank N.A.
Mr. Ralph Hewins DBS Bank Ltd.
Nominee Director
J P Morgan Chase Bank N.A.
Mr. Peter Weidner
Nominee Director
Registered Office
Mr. Sashi Mukundan
Nominee Director Technopolis Knowledge Park
Mahakali Caves Road,
Mr. Omer Dormen
Managing Director Chakala, Andheri (East),
Mumbai 400 093, INDIA.
Ms. Rashmi Joshi
Director - Finance (Chief Financial Officer) CIN: L23200MH1979PLC021359
Mr. Jayanta Chatterjee Telephone: 022-6698 4100
Director - Supply Chain
Website: www.castrol.co.in
Mr. Sandeep Deshmukh
Company Secretary Registrar & Share Transfer Agents
TSR Darashaw Limited
Auditors Unit: Castrol India Limited
6-10, Haji Moosa Patrawala Industrial Estate,
M/s. SRBC & Co. LLP
20, Dr. E. Moses Road, Mahalaxmi,
Chartered Accountants
Mumbai 400 011, INDIA.
Telephone: 022-6656 8484
Website: [email protected]
CONTENTS
Financial Highlights 10 Board’s Report 13 Management Discussion & Analysis Report 44
Corporate Governance Report 55 Business Responsibility Report 68 Auditors’ Report 78 Balance Sheet 82
Statement of Profit and Loss 83 Cash Flow Statement 84 Notes to Financial Statements 86
01
BOARD OF
DIRECTORS
Seated (l to r): Peter Weidner, Nominee Director; S. M. Datta, Chairman; R. Gopalakrishnan, Independent Director;
Rashmi Joshi, Director - Finance (Chief Financial Officer)
Standing (l to r): Ralph Hewins, Nominee Director; Omer Dormen, Managing Director; Jayanta Chatterjee, Director - Supply Chain;
Uday Khanna, Independent Director; Sashi Mukundan, Nominee Director
02
COUNTRY
LEADERSHIP TEAM
Top row: K S Kumar, Vice President - Human Resources; Omer Dormen, Managing Director;
Jayanta Chatterjee, Director - Supply Chain; Rashmi Joshi, Director - Finance (Chief Financial Officer)
Middle row: Soma Ghosh, Vice President - Marketing; Pawan Sabharwal, Vice President - Industrial & Heavy Duty;
Rajeev Govil, Vice President - Workshop & OEM Sales; Sunil Aima, Vice President - Sales
Bottom row: Pankaj Singh, General Manager - HSSE; Siddharth Shetty, Managing Counsel;
Dilnaz Anklesaria, Associate Vice President - Corporate Communications; Ashish Gondal, Technology Manager (interim)
03
Unleashing
the Power of
BRANDS
Strong branding at retail outlets to promote Castrol MAGNATEC - which gives instant
protection to the engine from the moment it starts
Interactive Castrol MAGNATEC

Professional brand corner with
demo kit deployed at Maruti
Suzuki dealerships highlighting
brand benefits
Online campaign to promote Castrol EDGE which gives engines the

strength to push the boundaries of performance
Castrol MAGNATEC Mobile Unit

mechanic outreach programme aimed at
updating mechanics on latest lubricant
Castrol MAGNATEC Stop-Start, specially developed for city stop-start driving technology
04
Unleashing
the Power of
BRANDS
Castrol Activ’s ‘Cling On To The Cup’ campaign took all of India virtually to the ICC Cricket
World Cup Australia & New Zealand 2015
Castrol Actibonds in action at the

stadium
Castrol Bike Guru

App for independent
workshop owners - a
Castrol Activ Ashwamedh van - an smart way to run their
initiative to reach out to consumers business more effectively
and mechanics in rural markets
Consumers immersed in a virtual
reality experience of Castrol Activ in
the Ashwamedh van Launch advertisement for Castrol Activ Scooter
05
Unleashing
the Power of
BRANDS
Castrol Vecton RX Fuel Saver 10W-40 with System5 TechnologyTM is

specifically engineered to deliver extended drain interval and reduced Castrol Vecton RX Fuel Saver 10W-40 engine oil is
emission, along with increased fuel efficiency used exclusively in Tata Prima T1 Racing trucks
Castrol Vecton-on-Wheels van used to educate

customers about Castrol Vecton with System5
Castrol CRB Turbo Plus offers 35% better engine wear protection TechnologyTM
Castrol CRB Multi is suitable for different types of engines including trucks, tractors,
jeeps and DG sets
Castrol Engine Expert explains the

unique benefits of Castrol CRB
Turbo+
06
Unleashing
the Power of
RELATIONSHIPS
Castrol India signed local supplier contract with

Volkswagen NSC. Seen in picture (l to r) Berndt
Buchmann, Director Group Service, Volkswagen Naveen Gupta (on right), owner of Express Roadways, receiving the
Group Sales India; Thierry Lespiaucq, MD, Best Transporter Award from Eugene Tan, Regional Supply Chain
Volkswagen Group Sales India; Omer Dormen, Director, Asia & Pacific, Castrol, at the Castrol India Annual Logistics
MD, Castrol India and Ruchi Kaushal, Global Offer Contractors’ Meet
Development Manager-FWS, Castrol
Seen in picture (l to r): Gurpreet Bhatia, former VP-B2B Sales, Castrol

Gurpreet Bhatia, former VP-B2B Sales, Castrol India India; Stuart Oliver, race driver Castrol Vecton; Ravi Pisharody, ED,
(extreme left) and Bharat Anikhindi, National Key Accounts Tata Motors, CVBU; Ravi Kirpalani, former MD, Castrol India; Sanjeev
Manager, OEM and Modern Trade, Castrol India (extreme Garg, VP & Head Customer Care, Tata Motors, CVBU and Sanjeev
right) receiving Certificate of Appreciation from John Deere Kaul, Regional Key Account Director, Asia & Pacific, Castrol, at the
Equipment India Pvt. Ltd. launch of the Castrol VECTON RX Fuel Saver 10W-40 diesel engine oil
SkillFest - a skill development programme run jointly by Tata

Motors and Castrol India, went global last year with participants Castrol India and Tata Motors teams celebrating 30 years
from 28 countries of a winning partnership
07
Unleashing
the Power of
RESPONSIBILITY
Local technicians getting practical training on two-wheeler Group discussion with local women in Silvassa to
servicing under Castrol’s Eklavya programme (Aimed at understand community needs under Castrol’s Ekjut
strengthening of skills development in the automotive and programme (Community development)
industrial sectors, with a focus on technology)
Distribution of medical and basic health care kits in a flood-affected village near Chennai under Castrol’s Ehsaas programme (Humanitarian aid)
Round table session to understand road safety issues in association with Americares India Foundation under Castrol’s Ehtiyat programme
(Collaborating for safer mobility)
08
Unleashing
the Power of
RECOGNITION
Castrol India bagged the India Star Award 2014-15 for excellence in packaging for the Castrol CRB Mini Truck
Shelf Ready Display Pack and Castrol Activ Anti-counterfeit Scooter Oil Cap with Pull up Pourer
JSW Steel Limited awarded Castrol as the Castrol India’s Patalganga Plant was a finalist at the BP Helios Awards 2015
Best Onsite Operations Team for Safety. in the Safety category. Seen in picture (l to r): Pradeep Betrabet, Operations
Castrol fluid technician M Nagaraj was Manager - Patalganga Plant; Manish Kamat, General Manager - Patalganga
acknowledged as Best Safety Person for 2015 Plant and Jayanta Chatterjee, Director Supply Chain, Castrol India
Castrol India’s Silvassa Plant won the Gold Award in the Bharat Agrawal (on right), Treasury Manager, Castrol India,
petrochemical sector, for outstanding achievement in Safety was awarded the Adam Smith Award by UK-based Treasury
Management at the 14th Annual Greentech Safety Awards Today Group, in the ‘Rising Star’ category
09
annual report 2015 FINANCIAL HIGHLIGHTS
COST OF MATERIALS AND SALES PER LITRE SALES

225 4500 219 225
205 209 204
199.6 197.7 197 196
200 191 200
186.1
176.2 4000 3907
175 3779 175
164.1 3664
3593
143.3 3500 3425 150
(Volume in Mln. Litres)

150
130.8
(Rs. in Crores)
(Rs. per Litre)
3135 125
125
3000
99.0
100 89.4 90.9 100
83.8 2683
81.4
75 63.2 2500 75
54.7
50 50
2000
25 25
0 1500 0
2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015
Cost of Materials per Litre Sales per Litre Sales Value Sales Volume
UTILISATION OF INCOME
2015 2014
Profit After Tax Cost of Materials Profit After Tax Cost of Materials
18% 48% 14% 57%
Tax Expenses
7%
Tax Expenses
10%
Other
Expenses*
Other 7%
Expenses*
9% Freight and
Forwarding Charges
Freight and
3%
Forwarding Charges
3% Advertisement and
Advertisement and Employee Benefits Employee Benefits
Sales Promotion
Sales Promotion Expense Expense
7%
7% 5% 5%
* Other expenses are net of interest income.
10
PROFIT AND EFFECTIVE TAX RATE

1050 34.7 35.3 36
34.3
33.7 33.2
33.0 32.9 947
900
30
739 745 733

750
692 24
654
615
600 593
(Rs. in Crores)
(% of PBT)
490 509 18
481 475
447
450
381
12
300
6
150
0 0
2009 2010 2011 2012 2013 2014 2015
Profit Before Depreciation, Interest and Tax Profit After Tax Effective Tax Rate
RETURN ON NET WORTH* DIVIDEND AND EARNING PER SHARE*

1200 115 120 14
12.4
105
1050 12
94
83 90 10.3
900 9.9 9.7 9.6
79 10
(Return on Net Worth %)
76 9.1 9.0
71 73 75
(Rs. in Crores)
(Rs. per share)
750 700 7.7

8 7.5 7.5 7.5
627 60 7.0 7.0
624
579 6.3
600
524 536 6
485 45
450
30 4
300
15
2
150 0
2009 2010 2011 2012 2013 2014 2015 0
2009 2010 2011 2012 2013 2014 2015
Average Net Worth Return on Net Worth
Dividend per Share Earning per Share
* Computed on average Net Worth during each year Special Dividend of Rs. 2.50 per Share
* Dividend and earning per equity share for all years have been
re-calculated after considering the effect of bonus shares in 2010
and 2012.
11
Particulars 2015 2014 2013 2012 2011 2010 2009
Rupees in Crores
Revenue from Operations (Gross) 3,791.42 3,918.62 3,677.50 3,605.38 3,439.23 3,146.88 2,695.05
Less: Excise Duty 493.39 526.29 497.88 484.52 445.96 403.97 367.04
Revenue from Operations (Net) 3,298.03 3,392.33 3,179.62 3,120.86 2,993.27 2,742.91 2,328.01
Other Income 52.58 16.06 35.06 30.84 21.66 5.42 7.42
Cost of Materials consumed 1,600.79 1,937.50 1,788.47 1,824.27 1,694.49 1,384.67 1,123.78
Employee Benefits and Other Expenses 802.36 738.11 703.67 673.67 628.90 625.00 619.05
Earnings before Interest, Tax, Depreciation,

Amortisation and Exceptional Item 947.46 732.78 722.54 653.76 691.54 738.66 592.60
Exceptional Item — — 22.80 — — — —
Earnings before Interest, Tax, Depreciation and

Amortisation (EBITDA) 947.46 732.78 745.34 653.76 691.54 738.66 592.60
Depreciation and Amortisation Expense 38.97 36.13 30.45 26.64 25.11 24.33 27.18
Finance Costs 0.83 2.38 1.71 2.14 1.91 2.42 3.45
Interest Income 43.29 32.04 48.58 41.34 51.43 25.93 18.83
Profit Before Taxation 950.95 726.31 761.76 666.32 715.95 737.84 580.80
Current Taxation 323.80 260.60 241.06 227.78 255.44 251.09 206.83
Deferred Taxation 11.89 (8.85) 12.13 (8.85) (19.13) (2.49) (7.80)
Fringe Benefit Tax — — — — — — 0.71
Short/(excess) Provision of Tax relating to

earlier years — — — — (1.39) (1.07) —
Profit After Taxation 615.26 474.56 508.57 447.39 481.03 490.31 381.06
Dividend 445.10 370.92 346.20 346.20 370.92 370.92 309.10
Net Fixed Assets 185.25 187.74 175.33 157.08 141.82 133.92 134.69
Investments — — — — — — 0.52
Net Assets 575.61 496.78 751.42 649.23 604.20 553.50 495.00
Share Capital 247.28 247.28 494.56 494.56 247.28 247.28 123.64
Reserves & Surplus 328.33 249.50 256.86 154.67 356.92 306.22 371.36
Net Worth 575.61 496.78 751.42 649.23 604.20 553.50 495.00
Deferred Tax Assets (Net) 49.92 61.81 52.96 65.09 56.24 37.11 34.62
Rupees
Earning per Share* 12.44 9.60 10.28 9.05 9.73 9.92 7.71
Dividend per Share* 9.00 7.50 7.00 7.00 7.50 7.50 ‡ 6.25
Book Value per Share* 11.64 10.04 15.19 13.13 12.22 11.19 10.01
* After considering adjustments for issue of bonus shares in 2010 and 2012.
‡ Includes Special Dividend of Rs. 2.50 per share (Adjusted for issue of bonus shares in 2010 & 2012 i.e. Rs. 10 per share, Pre-Bonus).
12
annual report 2015
BOARD’S REPORT
To the Members,
Your Company’s Directors are pleased to present the 38th Annual Report of the Company, along with Audited
Financial Statements for the year ended 31st December 2015.
1. FINANCIAL RESULTS
For the year ended For the year ended

Particulars 31st December, 2015 31st December, 2014
(Rupees in crores) (Rupees in crores)
Profit before Depreciation, Exceptional Items & Tax 947.46 732.78
Interest Income (Net of Finance Cost) 42.46 29.66
Profit before Depreciation & Tax 989.92 762.44
Depreciation & Amortisation 38.97 36.13
Tax Expenses
Current Tax 323.80 260.60
Deferred Tax 11.89 (8.85)
Profit after Tax 615.26 474.56

Adding thereto:
Balance as per last Balance Sheet brought forward 87.50 94.86
Profit available for Appropriation 702.76 569.42
The appropriations are:
Dividend
Interim 197.82 173.10
Final 247.28 197.82
Tax on Dividend
Interim 40.27 29.42
Final 50.34 39.55
Tax on Capital Reduction — 42.03
Transfer to General Reserves 0.72 —
Net surplus in the Statement of Profit & Loss 166.33 87.50
702.76 569.42
13
annual report 2015
BOARD’S REPORT
2. PERFORMANCE 4. SUPPLY CHAIN

Net revenues from operations of the Company Your Company’s supply chain strategy continued
have decreased by about 3% over the previous to focus on five pillars –
year to Rs. 3,298 crores, mainly due to drop in
volumes in commercial vehicle segment. The sales (1) Contemporary, differentiated and competitive
volumes declined by 2% over the previous year customer service, (2) Premium quality – a
although personal mobility segment witnessed a source of enhanced customer experience,
good growth. Costs of materials were lower by (3) Supply chain capabilities – assets & resources
about 17% over the previous year to Rs. 1,601 to support growth, (4) Consistent processes,
crores due to drop in input costs. Despite the and (5) Generating value for business through
challenging economic environment, reduction in efficiency initiatives. Health, Safety, Security and
input cost and focus on personal mobility and Environment, along with the Ethics and Values
better product mix helped the Company to improve formed the core of the five pillars.
its unit gross margin and gross profit. Operating
and other expenses increased by about Rs. 67
The Safety agenda continued to be driven
crores as compared to the previous year. Profit strongly across the plants and the product delivery
before Tax increased by about 31% over previous interfaces, and included strong input measures.
year to Rs. 951 crores. Tax rate for the current year Driver safety was led in a big way through
has remained at nearly the same level as that of “Family Connect” programs across the metro
the previous year. Profit After Tax increased by cities of Mumbai and Kolkata covering a healthy
30% over the previous year to Rs. 615.2 crores. percentage of heavy vehicle drivers. Within the
plants, Control of Work (CoW) guidelines and
The Company’s performance has been discussed Operating Management System (OMS) processes
in detail in ‘Management Discussion & Analysis continued to be strengthened. As a part of the
Report’. safe control and monitoring mechanism, Safety
The Company does not have any subsidiary or Observations continued to be recorded, and
associate or joint venture company. proactively actioned.
3. DIVIDEND
Patalganga plant achieved ISO/TS 16949:2009
during the year making it the second OEM ready
Your Directors are pleased to recommend a final
plant after Silvassa. Significant strides were made
dividend of Rs. 5.00 per equity share of Rs. 5/-
in Quality with end-to-end process interventions
each, for the year ended 31st December 2015. The
leading to 60% reduction in quality complaints
interim dividend of Rs. 4.00 per equity share was
against 2014. Strong inspection programs at
paid in August 2015.
supplier level, incoming and in process stage,

The Final Dividend, subject to approval of continuous engagements with packaging suppliers
members, will be paid within statutory period, and assessing packaging supplier through a
to the members whose names appear in the SMART score card helped in 50% reduction of
Register of Members, as per book closure. pack related complaints against 2014.
The total dividend for the financial year,
including proposed Final Dividend, amounts to Q-Standard — an end-to-end quality management
Rs. 9.00 per equity share (180% on paid-up equity system defining quality checks at each stage of
share capital) (Previous year Rs. 7.50 per equity manufacturing process right from incoming raw
share) and the same will absorb Rs. 445.10 crores material to dispatch of finished goods is now in
(Previous year Rs. 370.92 crores). place across all the manufacturing locations.
14
annual report 2015
BOARD’S REPORT

Customer Service and product availability time Director until 31st December 2015 to assist
continue to be key priorities for supply chain. in smooth transition of his responsibilities to the
They were driven by anticipating demand changes newly appointed Managing Director. Your Board
and variability proactively, and continuous places on record its appreciation for outstanding
improvement in order fulfilment processes. Due to contribution made by Mr. Ravi Kirpalani during his
various initiatives undertaken in demand & supply tenure as the Managing Director of the Company
planning, distribution and logistics, there was an and in various other capacities previously.
overall improvement of 7% in the Service Levels
Mr. Omer Dormen was appointed as Additional
(In ‘Full On Time’ indicator) and 10% in Stock
Director and Managing Director effective 12th
availability. The improvements in customer service
October 2015. His appointment as a Managing
were fully supported by plant production reliability
Director is valid for three (3) years subject to the
and raw materials and packaging suppliers.
approval of the Shareholders of the Company and
Your supply chain team, in tandem with the larger Central Government.
organisation continues to innovate and manufacture

In accordance with the provisions of the Act
New Products for customers and OEM partners
and the Articles of Association of the Company,
in your own plant. In 2015, your Company
Ms. Rashmi Joshi and Mr. Jayanta Chatterjee,
introduced new products like Castrol CRB Multi,
Directors of the Company, retire by rotation at the
Castrol CRB Turbo Plus, Castrol Vecton CI4+,
ensuing Annual General Meeting and being eligible
Castrol Magnatec Professional OE 5W20.
have offered themselves for re-appointment.

Throughout the year, there was strong focus
The Independent Directors of the Company have
on generating value through standardisation,
given the certificate of independence to your
simplification and efficiency measures. Some
Company stating that they meet the criteria of
key efficiency measures driven were: bringing
independence as mentioned under Section 149(6)
very competitive base oil supplier in east which
of the Companies Act, 2013.
resulted into higher quality and service at low
cost, optimising formulation & product sourcing, Mr. Omer Dormen, Managing Director, Ms. Rashmi
elimination of slow moving and obsolete stocks Joshi, Director Finance (CFO) and Mr. Sandeep
systematically through the year and reducing Deshmukh, Company Secretary are the Key
logistics cost by using higher capacity trucks. Managerial Personal and there is no change in the
The packaging across multiple products were same in the year except that Mr. Omer Dormen
standardised, helping your organisation be more replaced Mr. Ravi Kirpalani as Managing Director
efficient and responsive. as explained above.
To support integrity and growth operations, your 6. BOARD EVALUATION

organisation continued to invest in projects and

The Nomination and Remuneration Committee
initiatives to make the operations robust for future.
of the Company approved Board Performance
The total capital investment across multiple supply
Evaluation Policy during the year, which was
chain projects for 2015 was about Rs. 25 crores.
adopted by the Board of Directors. The Policy
provides for evaluation of the Board, the
5.
DIRECTORS AND KEY MANAGERIAL
Committees of the Board and individual Directors,
PERSONNEL
including the Chairman of the Board. The Policy
Mr. Ravi Kirpalani resigned as Managing Director provides that evaluation of the performance of
of the Company with effect from 11th October 2015. the Board as a whole; Board Committees and
Mr. Kirpalani continued with the Board as Whole- Directors shall be carried out on an annual basis.
15
annual report 2015
BOARD’S REPORT
The Company has appointed a reputed agency 7.

POLICY ON DIRECTORS’ APPOINTMENT,
that engages with the Chairman of the Board and REMUNERATION, ETC
Chairman of the Nomination and Remuneration
The “Remuneration Policy of Directors, KMPs
Committee in respect of the evaluation process. and other employees” and policy on Directors
The agency prepared an independent report which Appointment and Board Diversity is given as
was used for discussion in the meeting and giving Annexure I & II.
appropriate feedback to the Board/Committees/
Directors.
8. BOARD AND COMMITTEES
During the year, evaluation cycle was completed A calendar of meetings is prepared and circulated
by the Company which included the Evaluation in advance to the Directors. The Board met five
of the Board as a whole, Board Committees and (5) times during the year, the details of which
Directors. The Evaluation process focused on are given in the Corporate Governance Report
various aspects of the Board and Committees that forms part of this Annual Report. The
functioning such as composition of the Board intervening gap between the meetings was
and Committees, experience and competencies, within the period prescribed under the Companies
performance of specific duties and obligations, Act, 2013 and SEBI (Listing Obligations and
governance issues etc. A separate exercise Disclosure Requirements) Regulations, 2015.
was carried out to evaluate the performance of The details of Audit Committee and CSR
individual Directors on parameters such as Committee have been given in the Report on the
attendance, contribution and exercise independent Corporate Governance.
judgment.
9. CORPORATE GOVERNANCE

The results of the Evaluation of the Board
Your Company is part of BP group which is known
and Committees were shared with the Board
globally for the best standards of governance and
and respective Committees. The Chairman of
business ethics. Your Company has put in place
the Board had individual discussions with each
governance practices as prevalent globally. The
member of the Board to discuss the performance
Corporate Governance Report and the Auditors’
feedback based on self-appraisal and peer
Certificate regarding compliance of conditions
review. The Nominations Committee Chairman
of Corporate Governance are made part of the
discussed the performance review with the Board
Annual Report.
Chairman.
The Independent Directors met on 5th November 10. CORPORATE SOCIAL RESPONSIBILITY
2015 to review performance evaluation of
Your Company recognises the need and
non-independent directors and the Board of importance of a focused and inclusive social
Directors and also of the Chairman taking into and economic development, especially of the
account views of executive directors and non- industries and communities within which it
executive directors. operates. Your Company seeks to build open and
constructive relationships with all its stakeholders.

Based on the outcome of the evaluation, the We want them to benefit from our presence
Board and Committees have agreed on various and this is set out in our Code of Conduct and
action points, which would result each Director, our values. Over the last hundred years of the
Committees and Board playing more meaningful Company’s presence in India, Castrol India’s CSR
role to increase shareholder value. activities have evolved from charitable giving to a
16
annual report 2015
BOARD’S REPORT
strategic CSR programme, working in collaboration 11. DIRECTORS’ RESPONSIBILITY STATEMENT

with key stakeholders. Going forward, your Pursuant to the requirement under Sections 134(3)
Company aims to build on this foundation as we (c) of the Companies Act, 2013, with respect to the
develop a CSR programme that aligns business Directors’ Responsibilities Statement, it is hereby
risks and opportunities with the national agenda confirmed:
of development priorities to meet the needs and
aspirations of the populace. (a)
in the preparation of the annual accounts
for the year ended 31st December 2015, the

Corporate Social Responsibility Committee applicable accounting standards read with
recommended and the Board approved CSR requirements set out under Schedule III to
Policy in line with the requirements of Section 135 the Act, have been followed and there are no
of the Companies Act, 2013. material departures from the same;

Your Company aims to provide a safer and (b) the Directors have selected such accounting
better quality of life for the communities it policies and applied them consistently and
serves, whilst ensuring the long-term sustainability made judgements and estimates that are
of the Company’s operations in the relevant reasonable and prudent so as to give a true
industries where it operates. In alignment with and fair view of the state of affairs of the
our core skills and vision of building a safer and Company as at 31st December 2015 and of
better quality of life, underpinned by our focus the profit of the Company for the year ended
on progressive technology and in line with the on that date;
aspirations of the country’s youth, the Company
(c) the Directors have taken proper and sufficient
intends to focus on:
care for the maintenance of adequate
i. Skill development with a focus on technology accounting records in accordance with the
targeting unorganised two-wheeler mechanics provisions of the Act for safeguarding the
assets of the Company and for preventing and
ii.
Collaborating for a safer environment for detecting fraud and other irregularities;
mobility
(d)
the Directors have prepared the annual
iii. Community Development in areas of operation
accounts on a ‘going concern’ basis;
and presence
(e) the Directors have laid down internal financial
iv. Humanitarian aid
controls to be followed by the Company
v. Catering to the growing demand for lubricants and that such internal financial controls are
in the country in an environmentally adequate and are operating effectively; and
responsible manner
(f) the Directors have devised proper systems to
The Corporate Social Responsibility Policy which ensure compliance with the provisions of all
is available on the website of the Company at applicable laws and that such systems are
http://www.castrol.com/en_in/india/about-us/csr. adequate and operating effectively.
html.
12.
RISK MANAGEMENT AND ADEQUACY OF

The Annual Report on our CSR activities is INTERNAL FINANCIAL CONTROLS
annexed herewith marked as Annexure-III.
The Board of Directors of your Company has,
Also, the Business Responsibility Report contains on recommendation of the Risk Management
the information on work done on CSR front. Committee framed and adopted a policy on Risk
17
annual report 2015
BOARD’S REPORT
Management of the Company. The details of which Business and done on Arm’s Length basis.
are given in the Corporate Governance Report No Material Related Party Transactions were
that forms part of this Annual Report. entered during the year by your Company.
Accordingly, the disclosure of Related Party

Your Company maintains an adequate and
Transactions as required under Section 134(3)(h)
effective Internal Control System commensurate
of the Companies Act, 2013 in Form AOC 2 is not
with its size and complexity. Internal control
applicable.
systems provide, among other things, a
reasonable assurance that transactions are
In conformity with the requirements of the
executed with Management authorisation and Companies Act, 2013 read with SEBI Listing
that they are recorded in all material respects Regulations, the policy to deal with Related
to permit preparation of financial statements in Party Transactions was formulated which is also
conformity with established accounting principles available on Company’s website at http://www.
and that the assets of your Company are castrol.com/en_in/india/about-us/financials/other-
adequately safe-guarded against significant misuse financial-documents-policies.html
or loss. An independent Internal Audit function is
an important element of your Company’s internal 14. DEPOSITS
control system. The internal control system is

Your Company has not accepted any fixed
supplemented through an extensive internal audit
deposits under Chapter V of Companies Act,
programme and periodic review by Management
2013, during this financial year and as such, no
and Audit Committee.
amount on account of principal or interest on

The Company has in place adequate Internal deposits from public was outstanding as on 31st
Financial Controls with reference to Financial December 2015. The Company has no deposit
Statements. During the year, such controls were which is not in compliance with the provisions
tested and no reportable material weaknesses in of Chapter V of the Companies Act, 2013 and
the design or operation were observed. as the Companies (Acceptance of Deposit)
Rules, 2014.
13. RELATED PARTY TRANSACTIONS
15.
PARTICULARS OF LOANS GIVEN,

The Audit Committee reviews the policy from INVESTMENTS MADE, GUARANTEES GIVEN
time to time and also reviews all the AND SECURITIES PROVIDED
Related Transactions, to ensure that the same
Particulars of loans, guarantees and investments
are in line with the provisions of Law and Policy.
made by the Company pursuant to Section 186 of
The Committee approves the Related Party
the Companies Act, 2013 are given in the notes to
Transactions and wherever it is not possible to
the Financial Accounts forms part of the Annual
estimate the value, approves limit for financial
Report.
year, based on best estimates. All Related Party
Transactions are reviewed by an independent 16.
CONSERVATION OF ENERGY, TECHNOLOGY
accounting firm to establish compliance with law ABSORPTION, RESEARCH & DEVELOPMENT
and limits approved. None of the transactions (R&D) AND FOREIGN EXCHANGE EARNING
approved in the financial year breached Arm’s AND OUTGO
length and ordinary course criteria and those are
The particulars relating to conservation of Energy,
within materiality threshold.
Technology Absorption, Foreign Exchange

All the Related Party Transactions entered Earnings and Outgo, as required to be disclosed
during the year were in ordinary course of the under the Act, are provided as Annexure – IV.
18
annual report 2015
BOARD’S REPORT
17. MATERIAL CHANGES OCCURRED AFTER END 20. PARTICULARS OF EMPLOYEES

OF FINANCIAL YEAR
Disclosures with respect to the remuneration
Except as disclosed elsewhere in this report, no of Directors and employees as required under
material changes and commitments which could Section 197 of Companies Act, 2013 and Rule 5 (1)
affect the Company’s financial position have Companies (Appointment and Remuneration of
occurred between the end of the financial year of Managerial Personnel) Rules, 2014 has been
the Company and date of this report. annexed to this report as Annexure VII.

Details of employee remuneration as required
18. AUDITORS
under provisions of Section 197 of the Companies
M/s. SRBC & Co. LLP, Chartered Accountants, Act, 2013 and Rule 5(2) & 5(3) of Companies
retire and are eligible for re-appointment as (Appointment and Remuneration of Managerial
Auditors from the conclusion of this Annual General Personnel) Rules, 2014 forms part of this Report.
Meeting until the conclusion of the next Annual As per the provisions of Section 136 of the Act,
General Meeting. They have confirmed their the Report and Accounts are being sent to the
eligibility to the effect that their re-appointment, if shareholders of the Company and others entitled
made, would be within the prescribed limits under thereto, excluding the statement on particulars of
the Act and that they are not disqualified for re- employees. The Copies of said Statements are
appointment. The Report given by the Auditors available at the Registered Office of the Company
on the financial statements of the Company is during working hours before 21 days of the Annual
part of the Annual Report. There has been no General Meeting. Any members interested in
qualification, reservation or adverse remark given obtaining such details may write to the Secretarial
by the Auditors in their Report. Department at the Registered Office of the
Company.

M/s. Kishore Bhatia & Co., Cost Accountants
carried out the cost audit for applicable business 21.
PREVENTION OF SEXUAL HARASSMENT AT
segment. It is proposed to re-appoint them as Cost WORKPLACE
Auditors for the Financial Year 2016.
Your Company firmly believes in providing a safe,
supportive and friendly workplace environment – a
The Board had appointed M/s. S. N. Anantha- workplace where our Values come to life through
subramanian & Co., Company Secretaries in the underlying behaviours. Positive workplace
Whole-time Practice, to carry out Secretarial environment and a great employee experience are
Audit under the provisions of Section 204 of the integral parts of our culture. Your Company believe
Companies Act, 2013 for the financial year 2015. in providing and ensuring a workplace free from
The Secretarial Audit report is annexed to this discrimination and harassment based on gender.
Report marked as Annexure-V. There are no Your Company educates its employees as to what
qualifications, reservations or adverse remarks in may constitute sexual harassment and in the event
the report given by Secretarial Auditors. of any occurrence of an incident constituting sexual
harassment your Company provide the mechanism
19. EXTRACT OF THE ANNUAL RETURN to seek recourse and redressal to the concerned
individual subjected to sexual harassment.

The details forming part of the extract of the
Annual Return in Form MGT-9 as per provisions of
Your Company has a Sexual Harassment –
Companies Act, 2013 and rules thereto is annexed Prevention and Grievance Handling Policy in
to this report as Annexure VI. place to provide clarity around the process to raise
19
annual report 2015
BOARD’S REPORT
such a grievance and how the grievance will be 3. Neither the Managing Director nor the Whole-
investigated and resolved. An Internal Complaints time Directors of the Company receive any
Committee has been constituted in line with remuneration or commission from any of its
the Sexual Harassment of Women at Workplace subsidiaries.
(Prevention, Prohibition and Redressal) Act, 2013.
4. No significant or material orders were passed
During the year there was one complaint of sexual by the Regulators or Courts or Tribunals
harassment that was reported which was reviewed which impact the going concern status and
by the Internal Complaints Committee. Pursuant to Company’s operations in future.
the review, disciplinary action of termination was
taken against the employee accused of sexual 24. ACKNOWLEDGEMENT
harassment.
The Board wishes to place on record its sincere
appreciation of the efforts put in by the Company’s
22. VIGIL MECHANISM
employees for achieving encouraging results under
The Company has very strong whistle blower
difficult conditions. The Board also wishes to thank
policy viz. ‘Open Talk’. All employees of the
its members, distributors, vendors, customers,
Company have access to the Chairman of the
bankers, government and all other business
Audit Committee in case they want to report
associates for their support during the year.
any concern. The Policy on Vigil Mechanism and
Whistle Blower Policy is discussed in the Corporate
Governance Report.
23. GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting
is required in respect of the following items as
there were no transactions on these items during
On behalf of the Board of Directors
the year under review:
1. Issue of Equity Shares with differential rights

as to dividend, voting or otherwise. Omer Dormen Rashmi Joshi
Managing Director Director Finance &
2.
Issue of Shares (including Sweat Equity DIN: 07282001 Chief Financial Officer
Shares) to employees of the Company under DIN: 06641898
any scheme. The Company has not resorted
to any Buy Back of its shares during the year Mumbai
under review. 24th February 2016
20
annual report 2015
BOARD’S REPORT
Annexure I 4.
While formulating this Policy, the Committee
has considered that the Policy should help
Policy on Remuneration of Directors, Key to –
Managerial Personnel (KMP) and Senior i. Attract highly competent human resources to
Management Employees sustain and grow the Company’s business;
The Board has adopted a policy viz. “Policy on
ii.
Build a performance culture by aligning
Remuneration of Directors, Key Managerial Personnel
performance of individuals with the business
(KMPs) and Senior Management employees”. This
objectives of the Company;
policy shall act as a guideline for “Nomination and
Remuneration Committee” (the Committee) on matters iii.
Level and composition of remuneration is
relating to remuneration of Directors, KMPs and reasonable and sufficient to attract, retain
Senior Management employees. This policy has been and motivate Directors, KMPs and Senior
prepared pursuant to the provisions of Section 178(3) executives, of the quality required to run the
of the Companies Act, 2013 (“Act”), SEBI Listing Company successfully; and
Regulations and is subject to the provisions of the law
iv. Relationship of remuneration to performance
as amended from time to time. Extracts of the Policy
is clear and meets appropriate performance
are as under:
benchmarks.
1. Implementation
5.
Remuneration for Independent Directors and
The Committee is responsible for recommending
Non-Independent Non-Executive Directors (NED)
this Policy to the Board.
The remuneration should be sufficient to attract,
2. Review of the Policy motivate and retain world-class, non-executive

The Board is responsible for approving and talent. Remuneration practice should be consistent
overseeing implementation of this Policy and the with recognised best practice standards for
same will be reviewed and reassessed by the Chairman and NED remuneration. The aggregate
Committee as and when required and appropriate. annual remuneration payable to the NEDs is
Recommendations shall be made to the Board to determined by shareholder resolution, subject to
update this Policy based on changes that may be the limits of Law. The Non-Executive Directors
brought about due to any regulatory amendments nominated by Promoters are not entitled to receive
or otherwise. any remuneration.

Implementation of this Policy shall be the a.
Directors Sitting Fees – The NEDs are
responsibility of the Company Secretary who shall entitled to sitting fees as determined by the
advise the Board from time to time. All the terms Board from time to time for attending Board/
like Director, Managing Director, KMP, Independent Committee meetings thereof in accordance
Director, Remuneration, Committee shall have with the provisions of Act. Sitting fees amount
the same meaning as assigned under Companies may be subject to review on a periodic
Act, 2013. basis, as required. Within the parameters
prescribed by law, the payment of sitting fees
3. Policy Statement
will be recommended by the Committee and
In order to attract and retain best talent, who approved by the Board.
has the potential to drive the growth and
enhance shareholder value, it is essential to b.
Profit-linked Commission – The profit-linked
adopt comprehensive compensation policy commission shall be paid to the NEDs
which is synchronised with the industry trends. within the monetary limit approved by the
The remuneration of Directors, KMP and all shareholders of the Company subject to the
other employees shall be based on competency, same not exceeding 1% of the net profits of
contribution and commitment demonstrated by the Company computed as per the applicable
them towards the Company. provisions of the Act. Amount of Commission
21
annual report 2015
BOARD’S REPORT
would be determined considering the overall • Informed judgement: There are

performance of the Company, attendance at the quantitative and qualitative assessments
meetings of Board / Committees, Membership / of performance with the Committee
Chairmanship of Committees and contribution making informed judgement within a
by the respective NEDs. The Committee will framework approved by shareholders.
recommend to the Board, the quantum of • air treatment: Total overall pay takes
F
commission for each Director based upon the account of both the external market
outcome of the evaluation process. and Company conditions to achieve a
balanced, ‘fair’ outcome.
NEDs are supported through the Company
Secretary’s office. This support includes B.
The aim of this policy is to ensure that
assistance with travel and transport, security Executive Directors are remunerated in a way
advice (when needed) and administrative that reflects the Company’s long-term strategy.
services. NEDs shall be issued letters of Consistent with this, a high proportion of
appointment that recognise that, their service Directors’ total potential remuneration has
is at the discretion of shareholders. been, and will be, strongly linked to the
Company’s long-term performance. Salaries

The quantum and structure of the Chairman’s will normally be set in the home currency
remuneration is set by the Board based upon of the Director and reviewed annually.
a recommendation from the Nominations Remuneration shall comprise of two broad
Committee. The Chairman is not involved in components; fixed and variable. Fixed portion
setting his own remuneration. The Chairman’s comprises of Base pay and perquisites and
office is not maintained by the Company variable pay termed as Performance Linked
however he is provided administrative support Bonus (PLB) comprises of a pre-determined
and all reasonable travelling, communication maximum compensation that can be paid
and other expenses incurred in carrying out at the end of the performance year. Entire
his duties are reimbursed. remuneration shall be paid as per the contract
approved by the Board and terms approved
6.
Remuneration for Managing Director (MD)/ by shareholders, as under:
Executive Directors (EDs)/KMPs and Senior
i. ixed Component – This includes Salary
F
employees
and other perquisites/benefits. This
A.
The remuneration policy for the Managing provides base-level fixed remuneration
Director (MD)/Executive Directors (EDs)/ to reflect the scale and dynamics of
KMPs and Senior employees shall be guided the business and to be competitive with
by five key principles. the external market. Basic/fixed salary
is provided to all employees to ensure
• inked to strategy: A substantial
L that there is a steady income in line with
proportion of remuneration is linked to their skills and experience. In addition to
success in implementing the Company’s the basic/fixed salary, the Company may
strategy. provide employees with certain perquisites,
• erformance related: The major part
P allowances and benefits to enable a
of total remuneration varies with certain level of lifestyle and to offer scope
performance, with the largest elements for savings and tax optimisation, where
being share based, further aligning with possible. The Company may also provide
shareholders’ interests. all employees with a social security net
(subject to limits) by covering medical
• ong term: The structure of pay is
L expenses and hospitalisation through
designed to reflect the long-term nature reimbursements or insurance cover and
of Castrol’s business and the significance accidental death and dismemberment
of safety and environmental risks. through personal accident insurance.
22
annual report 2015
BOARD’S REPORT
ii. Performance Linked Bonus (PLB) – The iii.

Where an existing employee is promoted
specific amount payable to the MD/ to the Board, the Company will honour all
EDs would be based on performance existing contractual commitments including
as evaluated by the Board. It provides a any outstanding share awards or pension
variable level of remuneration dependent entitlements.
on short-term performance against the
annual plan. Total overall Bonus is based iv. Where an individual is relocating in order to
on performance relative to measures and take up the role, the Company may provide
targets reflected in the annual plan, which certain one-off benefits such as reasonable
in turn reflects Company’s strategy. relocation expenses, accommodation for a
period following appointment and assistance
iii.
Retirals in the form of contribution with visa applications or other immigration
to Provident Fund, Superannuation issues and ongoing arrangements such as
and Gratuity be paid as per statutory tax equalisation, annual flights home, and
requirements. housing allowance.
iv.
Based on the organisational need for
v.
Where an individual would be forfeiting
retaining high performing employees
valuable remuneration in order to join
and also those who are playing critical
the Company, the Committee may award
roles, from time to time, certain retention
appropriate compensation based on evidence.
features may be rolled out as part of the
overall compensation package. These
In making/revising remuneration package,
may take form of Retention Bonuses, the Committee would balance shareholder
group Share Value Plan etc. expectations, current best practice and the
requirements of any new recruit.
C. A
nnual Compensation Review – The
compensation review year will be financial 8.
The Committee may recommend to the Board,
year. The annual compensation review, as a changes in remuneration terms of Directors, Key
part of the performance management system Managerial Personnel or Senior Management
cycle, shall be guided by Industry/business Personnel subject to the provisions of the Act and
outlook, employee differentiation based on applicable Group policies, regulations of Service,
individual performance rating achieved during Code of Ethics and Principles of legal compliance
the applicable performance year. framed and adopted by the Company from time to
time. The Directors and Key Managerial Personnel /
7.
While determining Remuneration, the Senior Management Personnel shall superannuate
Committee shall take into account – as per the applicable provisions of the regulation
i.
Salary level of new director/employee is and prevailing policy of the Company. The Board
competitive, relative to the peer group. of Directors will have the discretion to retain the
Executive Director, Key Managerial Personnel
ii.
Variable remuneration is awarded within the and Senior Management Personnel in the same
parameters, and is subject to a requirement of position/remuneration or revised remuneration
continued service and corporate performance after attaining the age of superannuation, for
condition. organisational development reasons.
23
annual report 2015
BOARD’S REPORT
Annexure II A. Policy on Appointment of Directors

a.
In accordance with Company’s Articles of
Policy on Appointment of Directors Association, the Board determines, from
The Board has adopted a policy viz. “Policy on time to time, the size of the Board and
Appointment of Directors, Independence of Directors may fill any vacancies that occur between
and Board Diversity” and it shall act as guideline on shareholder meetings. The Committee
matters relating to appointment of the Directors. This periodically evaluates and makes
Policy shall act as a guideline for “Nomination and recommendations to the Board concerning
Remuneration Committee” (Committee) in determining the appropriate size of the Board based upon
qualifications, positive attributes, independence of a the needs of the Board. The Board currently
Directors relating to the appointment/re-appointment of believes that the Board’s optimum size is
Directors. The Policy has been prepared pursuant to between 8 and 12 members.
the provisions of Section 178(3) of the Companies Act,
2013 (“Act”), SEBI Listing Regulations and is subject b.
Appointment of a Director will be based
to the provisions of the law as amended from time to on the outcome of a proper planning. The
time. Extracts of the Policy pertaining to Appointment Committee shall consider the standards of
of Directors are as under: qualification, expertise and experience of the
candidates for appointment as Director and
1. Implementation accordingly recommend to the Board his/her
The Committee is responsible for recommending appointment. The Committee will assess skill-
the Policy to the Board. sets, the Board needs have for the industry
the Company operates in and also in view of
2. Review of the Policy Group corporate philosophy and governance

The Board is responsible for approving and standards.
overseeing implementation of this Policy and the
c. The Committee shall request reference from
same will be reviewed and reassessed by the
BP Group for a candidate having relevant
Committee as and when required and appropriate.
experience or from external consultants or
Recommendations shall be made to the Board to
any other source as deemed appropriate by
update this Policy based on changes that may be
the Committee.
brought about due to any regulatory amendments
or otherwise. d.
For inducting Directors, the Committee

Implementation of this Policy shall be the members shall personally meet the potential
responsibility of the Company Secretary who shall candidate and assess suitability of the
advise the Board from time to time. All the terms candidate for the role in view of Castrol values
like Director, Managing Director, KMP, Independent and standards of governance.
Director, Remuneration, Committee shall have
e. The Committee shall recommend appointment
the same meaning as assigned under Companies
of the shortlisted candidate for directorship to
Act, 2013.
the Board for its consideration. The Committee
shall also recommend compensation that can
3. This policy has the following three parts –
be paid to a Director, commensurate to the
A. Policy on Appointment of Directors; industry norms and position.
B. Policy on Independence of Directors; and
f.
If position of a Director suddenly becomes
C. Board Diversity Policy vacant by unanticipated occurrence of any
24
annual report 2015
BOARD’S REPORT
event, the Committee shall meet at the earliest c.

Information Technology — The
opportunity to discuss succession and fill such candidate should have fair
vacancy. understanding of information
technology, e-commerce or digital
g. Criteria for selection marketing and also of regulatory
i.
The candidate should be of the highest framework in which the industry
ethical character and share the values operates.
of Castrol as reflected in the Code of
iv.
The candidate should be of the highest
Conduct and Corporate Governance
moral and ethical character. The candidate
principles. Board candidate should
must exhibit independence, objectivity and
have reputations, both personal and
be capable of serving as a representative
professional, consistent with the image
of the stockholder.
and reputation of Castrol.
v. The candidate should have the personal
ii.
The candidate should be highly
qualities to be able to make a substantial
accomplished in its respective field, with
active contribution to Board deliberations.
superior credentials and recognition.
These qualities include intelligence, self-
iii. In recognition of the fact that the foundation assuredness, a high ethical standard,
of the Company is in lubricants industry, inter-personal skills, independence,
the Board should prefer person who has courage, and willingness to ask the
relevant experience. A candidate should difficult questions, communication skills
have extensive and relevant leadership and commitment.
experience including understanding of
vi.
The candidate must be willing to
the complex challenges of enterprise
commit, as well as have, sufficient time
leadership. International experience
available to discharge the duties of Board
will in many cases be considered a
membership and should not have any
significant positive characteristic in a
prohibited interlocking relationships.
Board candidate’s profile. An ideal Board
candidate will have gained this experience In considering candidates for election to the Board
in one or more of the settings outlined of Directors, the Board should constantly be
below. striving to achieve the diversity of the communities
in which the Company operates. The Committee
a.
Business — The candidate is or has
shall work with the Board to determine the
been the Chief Executive Officer,
appropriate characteristics, skills and experience
Chief Operating Officer or other
for the Board as a whole and its individual
major operating or staff officer of a
members with the objective of having a Board
major corporation, with a background
with diverse backgrounds and experience as per
in marketing/ finance/ business
Diversity Policy of the Company.
operations/strategic management.
b.
Industry — The candidate has B. Policy on Independence of Directors
experience in the fast-moving
For the Independent Directors, the Committee
consumer goods (FMCG) industry / shall assess the Independence of Directors at the
automobile industry or other time of appointment/re-appointment and the Board
complementary field. shall assess the same annually as per the ‘Policy
25
annual report 2015
BOARD’S REPORT
on Independence of Directors’. The Board shall re- (ii) is or has been an employee or proprietor
assess determinations of independence when any or a partner, in any of the three financial
new interests or relationships are disclosed by a years immediately preceding the financial
Director. An Independent Director in relation to a year in which he is proposed to be
Company, means a director other than a Managing appointed, of —
Director or a Whole-time Director or a Nominee
(A)
a firm of auditors or Company
Director —
secretaries in practice or cost auditors
of the Company or its holding,
a. who, in the opinion of the Board, is a person
subsidiary or associate company; or
of integrity and possesses relevant expertise
and experience; (B)
any legal or a consulting firm that
has or had any transaction with the
b. (i)
who is or was not a promoter of the Company, its holding, subsidiary or
Company or its holding, subsidiary or associate company amounting to ten
associate Company; per cent or more of the gross turnover
of such firm;
(ii) who is not related to promoters or directors
in the Company, its holding, subsidiary or (iii) holds together with his relatives two per
associate Company; cent or more of the total voting power of
the Company; or
c.
who has or had no pecuniary relationship
(iv)
is a Chief Executive or Director, by
with the Company, its holding, subsidiary
whatever name called, of any non-profit
or associate Company, or their promoters,
organisation that receives twenty-five
or directors, during the two immediately
per cent or more of its receipts from the
preceding two financial years or during the
Company, any of its promoters, directors
current financial year;
or its holding, subsidiary or associate
d. none of whose relatives has or had pecuniary company or that holds two per cent or
relationship or transaction with the Company, more of the total voting power of the
its holding, subsidiary or associate Company Company; or
or their promoters, or directors, amounting to (v)
is a material supplier, service provider
two per cent or more of its gross turnover or or customer or a lessor of lessee of the
total income or fifty lakh rupees or such higher Company.
amount as may be prescribed, whichever is
lower, during the three immediately preceding f. shall possess such other qualifications as may
financial years or during the current financial be prescribed from time to time, under the
year; Companies Act, 2013.
g. who is not less than 21 years of age.

e. who, neither himself nor any of his relatives—
(i)
holds or has held the position of a key
The Independent Directors shall abide by the
managerial personnel or is or has been “Code for Independent Directors” as specified in
employee of the Company or its holding, Schedule IV to the Companies Act, 2013. This is
subsidiary or associate company in any policy is subject to the provisions of Companies
of the three financial years immediately Act, 2013 and Listing Regulations issued by
preceding the financial year in which he Securities and Exchange Board of India (SEBI)
is proposed to be appointed; from time to time and the Policy is framed to define
26
annual report 2015
BOARD’S REPORT
the criteria that will be used by the Nomination and The Board recognises the benefits that diversity,
Remuneration Committee/Board to assess the including gender brings to the Board. In considering
independence of Directors of the Company. the composition of the Board, directors will be
mindful of:
C. Board Diversity Policy
• Diversity: ensuring the Board and the
1.
The Board Diversity Policy aims to set out the
Company reflects the global communities in
approach to achieve diversity on the Board of
which it works;
Directors of the Company. Building a diverse
and inclusive culture is integral to the success • Inclusiveness: creating an environment
of Company. Ethnicity, age and gender diversity, where all board members, employees and
underpinned by meritocracy are areas of strategic business partners are valued and can give of
focus for the employee base and the same their best;
principle is applied to the composition of Board.
• Meritocracy: ensuring that Board appointments
2. Policy Statement are made on the basis of merit alone
The Board of Directors shall comprise of Directors
having expertise in different areas/fields like The Board delegates the search and nomination
Strategic Planning, Finance, Sales, Engineering of new directors to the Nomination Committee.
or as may be considered appropriate. In designing When considering the nomination of new directors,
the Board’s composition, Board diversity shall not the Committee will evaluate the balance of skills,
be limited to gender, age, cultural and educational knowledge and experience on the Board in order
background, ethnicity, professional experience, to identify the capabilities desirable for a particular
skills and knowledge. The Board shall have atleast appointment. Such evaluations will also consider
one Board member who has accounting or related the diversity the individual brings to the overall
financial management expertise and atleast one Board and will aim to ensure as diverse a mix as
woman Director. possible.
27
annual report 2015
BOARD’S REPORT
Annexure III non-governmental organisations (NGOs) and

government departments. Based on stakeholder
Annual Report on Corporate Social Responsibility response, partner experience and contribution
Activities to agenda the project is accordingly up-scaled
(Pursuant to Section 135 of the Companies Act, 2013) or redesigned. Encouraged by the response
the portfolio continues to grow with expanding
1. A brief outline of the Company's CSR policy, partnerships and investments.
including overview of projects or programs
proposed to be undertaken and a reference to The Company’s CSR Policy for 2015 can be viewed
the web-link to the CSR policy and projects or at http://www.castrol.com/en_in/india/about-us/csr.html
programs. 2. The Composition of the CSR Committee
The Company aspires to be a trusted partner, • Mr. R Gopalakrishnan (Chairperson)
continuously engaging with our stakeholders. • Mr. Sashi Mukundan
Through our CSR programmes aimed at
skill enhancement, safe mobility community • Mr. Omer Dormen
development and humanitarian aid, we strive to • Ms. Rashmi Joshi
contribute to a safer and better quality of life. • Mr. Jayanta Chatterjee
In alignment with our core skills and vision of 3.
Average net profit of the Company for last
engaging with our stakeholders to contribute to three financial years
a safer and better quality of life, the Company Rs. 711.76 crores
intends to focus on:
4. Prescribed CSR Expenditure (two per cent of
I.
klavya: Strengthening skills in the automotive
E
the amount as in item 3 above)
and industrial sectors, with a focus on
technology targeting un-organised two- Rs. 14.23 crores
wheeler mechanics 5. Details of CSR spent during the financial year.
II. Ehtiyat: Collaborating for safer mobility
a. Total amount to be spent for the financial year:
III. Ekjut: Community Development in areas of
Rs.14.23 crores
operation and presence
IV. Ehsaas: Humanitarian aid b. Amount unspent, if any: Rs. 3.75 crores
The Company follows an approach of initiating pilot c. Manner in which the amount spent during the
projects to test on-ground relevance with leading financial year is detailed below.
Sr. CSR project or Sector in which Projects or Amount outlay Amount spent Cumulative Amount spent:
No. activity identified the project is programs (1) (budget) project on the projects expenditure up Direct or through
covered Local area or or programs or programs, to date reporting implementing
other (2) Specify wise (INR) Subheads: (INR) period (INR) Agency (IA)
the State and
district where
1 Eklavya: Livelihood Tamil Nadu, 33,121,932 33,121,932 33,121,932 IA – Social
Strengthening enhancement Karnataka, Empowerment
skills in the Andhra Pradesh, & Economic
automotive and West Bengal and Development
industrial sectors, Delhi Society, Sambhav
with a focus Foundation, GM
on technology RV Foundation,
targeting Ambuja Cement
un-organised Foundation,
two-wheeler Academy of
mechanics Gandhian Studies,
CIE Initiatives,
International
Centre for
Entrepreneurship
and Career
Development.
2 Ehtiyat : Promoting Mumbai 51,000,000 51,000,000 51,000,000 IA — Americares
Collaborating for education and India Foundation,
safer mobility employment United Way of
enhancing Mumbai.
vocation skills
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annual report 2015
BOARD’S REPORT
Sr. CSR project or Sector in which Projects or Amount outlay Amount spent Cumulative Amount spent:
No. activity identified the project is programs (1) (budget) project on the projects expenditure up Direct or through
covered Local area or or programs or programs, to date reporting implementing
other (2) Specify wise (INR) Subheads: (INR) period (INR) Agency (IA)
the State and
district where
3 Ekjut : Community Multiple elements Silvassa, 10,677,500 10,677,500 10,677,500 IA — Americares
Development in Patalganga, India Foundation,
areas of operation Paharpur and Ambuja Cement
and presence Mumbai Foundation,
St. Jude’s India
Childcare Centre,
Habitat for
Humanity India,
United Way of
Mumbai.
4 Ehsaas : Promoting health Chennai and 5,020,000 5,020,000 5,020,000 IA — Charities
Humanitarian care; eradicating Cuddalore in Aid Foundation
hunger; sanitation Tamil Nadu India, Americares
and making India Foundation.
available safe
drinking water
5 Administrative 4,990,502 4,990,502 4,990,502 Direct
Overheads
Total 104,809,934 104,809,934 104,809,934
6. In case the Company has failed to spend the CSR vision of aspiring to be a trusted partner
two per cent, of the average net profit of the while striving to contribute to a safer and better
last three financial years or any part thereof, quality of life.
the Company shall provide the reasons for not
spending the amount in its Board Report.
Our four-pronged focus area approach,
governance structure and efforts are designed

There were several challenges to establish a
to deliver mutually set out objectives with our
sustainable CSR model, that would complaint with
partners. Ensuring an active oversight and
the requirement of the Companies Act put in place
guidance of the company’s CSR investments are
CSR team and identification of right projects. In
a key responsibility of the Board and are therefore
spite of these challenges, the Company conducted
taken up with regularity and rigor.
various CSR activities in collaboration with key
stakeholders in a responsible and accountable
We look forward to working together with our
manner. This was possible only because of peers, the government and civil society towards
creating of a strong foundation and adopting an nation building.
informed approach while the Company initiated
a series of fresh pilots in 2015. The Company
could not entirely consume the allocated CSR
Budget, given the Company’s Agenda to utilise the
funds in justifiable, sustainable and measurable
activities. Therefore, a sum of Rs. 3.75 crores
remained unspent from the CSR budget of
2015. Going forward it is proposed to strengthen
engagement with various stakeholders and ramp On behalf of the Board of Directors
up the CSR spend.
7.
A responsibility statement of the CSR
Committee that the implementation and Omer Dormen R. Gopalakrishnan
monitoring of CSR Policy is in compliance with Managing Director Chairman, CSR Committee
CSR objectives and Policy of the Company. DIN: 07282001 DIN: 00027858
The CIL Board and CSR Committee are whole- Mumbai
heartedly committed to fulfilling the Company’s 24th February 2016
29
annual report 2015
BOARD’S REPORT
Annexure IV (b)
Additional investments and proposals, if
any, being implemented for reduction of
Particulars of Conservation of Energy, Technology consumption of energy
Absorption, Research & Development (R&D) and
Foreign Exchange Earning and Outgo required Usage of LED lights in all passible areas of the
under the Companies (Accounts) Rule, 2014 plant to reduce power consumption and increase
lux level.
Conservation of Energy
(c)
Impact of Measures at (a) and (b) above
(a) Energy conservation measures taken for reduction of energy consumption and
• aintaining power factor resulting in reduced
M consequent impact on the cost of production
reactive power consumption and energy bill of goods
The improvement measures continue to support

• Integration of cooling water circulation
efficient use of energy and optimization in the
pump with SCADA system to optimise pump
production per unit cost.
running
• Use of Invertor type air condition to optimize Technology Absorption

power consumption and voltage level 1.
Your Company continued to derive sustainable
optimisation and installation of energy efficient benefits from its India Technology Centre
air compressor located in Mumbai for the first half of 2015. Your
Company’s Technology Centre was located at
• Usage of battery operated forklifts
Wadala, Mumbai. In June 2015, a leak in the fuel
• eriodic air leakage audits and addressing
P pipeline in the neighbourhood led to a fire incident
identified leak points outside the Company’s Technology Centre at
Wadala. All the Company personnel and security
• Replacement of CFL lamp to LED lamp for staff were evacuated safely and the facility was
shop floor and streetlights shut down. Subsequently, a decision was taken to
close the site in order to eliminate any potential
• imes for the Canteen air conditioners, which
T
risk of injury to people and damage to property
are converted to SIP
in future. The business continuity plan enabled
• Provided new aluminium cladding insulation to the team to relocate and utilise the facility at
on hot oil circulation pipe lines for reducing other BP location to ensure continued support.
heat loss This was another year where your Company’s
product development capability helped the
• Improving boiler efficiency, resulting in lower business meet pressing consumer needs, partner
consumption of furnace oil closely with its customers and leverage strengths
of its global affiliates to meet the needs of the local
• Usage of jet mixers in blender for reducing the
market.
batch cycle time
• ontinue rationalisation of certain blending

C 2. In the year under review, your Company continued
operations for a few products with reduced its investment in a world-class two-wheeler oil
temperature, to reduce energy consumption product development team, to support the needs
of the domestic and global market. To enable this
• Increasing awareness level amongst the team in its work, your Company continued re-
work force for various energy conservation installation of laboratory instruments for efficient
measures at the plant level continuation of research work at the new temporary
30
annual report 2015
BOARD’S REPORT
laboratory facility. In addition to internal facility, 7. Another major milestone that was achieved in the
your Company has funded to use laboratory year 2015 was the renewal of the ISO 14001 and
facilities at other international research institutes. 9001:2008 certification for the India Technology
This has helped us develop product differentiation Centre and TS16949 for the India Technology
and hastens the product development cycle. Centre as a remote site. Both these certifications
are effectively a license-to-operate today for a
3.
In 2015, your Company focused on optimising reputed organisation such as your Company.
current formulation in the personal mobility market The ISO 9001:2008 assures the management of
space through value engineering. In 2015, your your Company that the operations of the Centre
Company also focused on the Indian passenger continue to be streamlined and efficient. The ISO
car market to develop a fuel efficient, durable 14001 certification is a mark of your Company’s
SAE 5W-30/0W - 20 covering range of Gasoline commitment to the customer and shareholder
and Diesel engines oils for future emission to be environmentally responsible and to adopt
requirements. sustainable business practices.
4. In India, considering the demand for higher quality Research & Development (R&D)
oil due to tougher emission quality standard and
uptake of European parc, your Company launched (A)
Specific areas in respect of which R&D was
Castrol Vecton CI4+ with system 5 technology carried out:
and CRB Turbo Plus Durashield booster after (i) ew product launches with stronger consumer
N
extensively trials in local vehicles. benefit:
Following brands were re-launched during the
5.
In 2015, a number of initiatives were taken in
year with strong consumer benefits viz.:
Industrial product range. Your Company focused on
the localisation of Clearedge 6519 and Almaredge a. CRB Turbo Plus with Durashield booster
61 FF to drive the growth in soluble metalworking
b. Vecton RX Fuel Saver 10W-40
fluids for Auto and Machine Manufacturing
customers. These products have successfully c. Vecton CI4+ with system 5 Technology
delivered differentiated benefits to the customers
at competitive cost. Your Company launched d. Mid flash rust preventives
Mid Flash Rust Preventive to meet the new
norms of tube industry and customer’s (ii) N
ew products and offers for Original Equipment
requirements on reduced costs. The product Manufacturers (OEM’s):
was developed keeping our technology ahead of

Your Company has been successful in
competition and targeting significant growth in the
launching two transmissions long drain oils
market place.
for a leading truck manufacturer TATA Motors:
Axle Extended drain GL-5 80W-140 and
6.
Towards building capability within to sell the Manual Extended drain GL-4 80W-90 oils.
technologically superior products developed
by your Company, it had invested in a “Liquid
(iii) Driving efficiencies:
Engineering Centre” (LEC) a few years ago. This
year your Company supported Tata Motors “Skill- An initiative was taken during the year to
Fest” in creating interactives and quizzes for ensure that your Company availed of the
competency development on lubricant technology. maximum efficiencies by localizing imported
Your Company upgraded the learning centres at products. This will also ensure a strong
Maruti Suzuki India Ltd. and Tata Motors. security of supply in case of any crisis.
31
annual report 2015
BOARD’S REPORT
(B) Benefits derived as a result of R&D FOREIGN EXCHANGE EARNING AND OUTGO
Based on the R&D activities mentioned above 1. Activities relating to Export

being implemented, your Company was able to here were no significant exports by the Company
T
further strengthen it’s connect with consumers and during the year. However, some quantities of the
the OEM’s. It also helped your Company in forging products were exported to China, Thailand &
new partnerships with OEM’s and demonstrating Saudi Arabia.
its technical superiority.
2. Earning and Outgo
(C) Future plan of action
Financial Year 2015
Innovation is a journey and your Company is well Rs. in crores
placed to ensure that it continues to maintain a Foreign Exchange
strong track record in this field. Your Company Earnings 15.63
will continue its focus on generating fuel efficient Foreign Exchange Outgo 209.55
products for its consumers, strengthening its
synthetic technology based portfolio, introduction
of green environmentally friendly lubricant products On behalf of the Board of Directors
and working on the state-of-the-art technologies of
modelling to fast track product development cycles. Omer Dormen Rashmi Joshi
(D) Expenditure on R&D (Rs. in crores) DIN: 07282001 Chief Financial Officer
Capital 1.01 DIN: 06641898

Recurring 14.77
Mumbai,
Total 15.78
24th February 2016
32
annual report 2015
BOARD’S REPORT
Annexure V iii. The Depositories Act, 1996 and the Regulations

and Bye-laws framed thereunder;
Secretarial Audit Report
iv.
Foreign Exchange Management Act, 1999 and
For the Financial Year ended 31st December, 2015
the rules and regulations made thereunder to the
[Pursuant to section 204(1) of the Companies Act, extent of Foreign Direct Investment, Overseas
2013 and rule No. 9 of the Companies (Appointment Direct Investment and External Commercial
and Remuneration Personnel) Rules, 2014] Borrowings;
To, v.
The following Regulations and Guidelines
The Members, prescribed under the Securities and Exchange
Castrol India Limited Board of India Act, 1992 (‘SEBI Act'):
CIN L23200MH1979PLC021359 a.
The Securities and Exchange Board of
Technopolis Knowledge Park, India (Substantial Acquisition of Shares and
Mahakali Caves Road, Takeovers) Regulations, 2011;
Chakala, Andheri (East),
Mumbai-400 093 b. The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations,
1992 (upto 14th May 2015) and Securities
We have conducted the Secretarial Audit of the and Exchange Board of India (Prohibition of
compliance of applicable statutory provisions and the Insider Trading) Regulations, 2015 (effective
adherence to good corporate practices by Castrol 15th May 2015);
India Limited (hereinafter called the Company) for the
c. The Securities and Exchange Board of India
year ended 31st December 2015. Secretarial Audit was
(Issue of Capital and Disclosure Requirements)
conducted in a manner that provided us a reasonable
Regulations, 2009 — Not Applicable as the
basis for evaluating the corporate conducts/statutory
Company has not issued further capital during
compliances and expressing our opinion thereon.
the financial year under review;
Based on our verification of the Company's books, d. The Securities and Exchange Board of India
papers, minute books, forms and returns filed and (Employee Stock Option Scheme and Employee
other records maintained by the Company and also Stock Purchase Scheme) Guidelines, 1999/
the information provided by the Company, its officers, Securities and Exchange Board of India (Share
agents and authorized representatives during the Based Employee Benefits) Regulations, 2014
conduct of secretarial audit, we hereby report that in (effective 28th October 2014) — Not Applicable
our opinion, the Company has, during the audit period as the Company has not issued any shares/
covering the financial year ended 31st December 2015, options to directors employees under the
complied with the statutory provisions listed hereunder said Guidelines/Regulations during the period
and also that the Company has proper Board- under review;
processes and compliance-mechanism in place to
the extent, in the manner and subject to the reporting e.
The Securities and Exchange Board of India
made hereinafter: (Issue and Listing of Debt Securities) Regulations,
2008 — Not Applicable as the Company has
We have examined the books, papers, minute books, not issued and listed debt securities during the
forms and returns filed and other records maintained financial year under review;
by the Company for the financial year ended on
f. The Securities and Exchange Board of India
31st December 2015 according to the provisions of:
(Registrars to an Issue and Share Transfer
i. The Companies Act, 2013 (the Act), the Companies Agents) Regulations, 1993 regarding the
Act, 1956 and the rules made thereunder; Companies Act and dealing with client — Not
Applicable as the Company is not registered
ii.
The Securities Contracts (Regulation) Act, 1956 as Registrar to Issue and Share Transfer
('SCRA') and the rules made thereunder; Agent during the financial year under review;
33
annual report 2015
BOARD’S REPORT
g. The Securities and Exchange Board of India Adequate notice is given to all Directors to

(Delisting of Equity Shares) Regulations, schedule the Board Meetings, agenda and
2009 — Not Applicable as the Company has detailed notes on agenda were sent atleast seven
not delisted/propose to delist its equity shares days in advance, and a system exists for seeking
from any stock exchange during the financial and obtaining further information and clarifications
year under review; and on the agenda items before the meeting and for
meaningful participation at the meeting.
h. The Securities and Exchange Board of India
(Buyback of Securities) Regulations, 1998 Majority decision is carried through, while the

— Not Applicable as the Company has not dissenting members' views, if any, are captured
bought back/propose to buy-back any of its and recorded as part of the minutes.
securities during the financial year under
We further report that based on review of compliance
review.
mechanism established by the Company and on the
vi.
The management has identified and confirmed basis of the Compliance Certificate(s) issued by the
the following law as specifically applicable to the Company Secretary and taken on record by the Board
Company: of Directors at their meeting(s), we are of the opinion
that there are adequate systems and processes in
The Petroleum Act, 1934 and Rules made

place in the Company which is commensurate with
thereunder.
the size and operations of the Company to monitor

We have also examined compliance with the and ensure compliance with applicable laws, rules,
applicable clauses of the following: regulations and guidelines:
(i) Secretarial Standards with regard to Meeting As informed, the Company has responded

of Board of Directors (SS-1) and General appropriately to notices received from various
Meetings (SS-2) issued by The Institute of statutory/regulatory authorities including initiating
Company Secretaries of India and made actions for corrective measures, wherever found
effective 1st July 2015; necessary.
(ii)
The Listing Agreements entered into by the We further report that during the audit period there
Company with BSE Limited and National Stock were no specific events/actions having a major bearing
Exchange of India Limited and SEBI (Listing on Company's affairs in pursuance of the above —
Obligations and Disclosure Requirements), referred laws, rules, regulations, guidelines, standards,
2015 made effective 1st December 2015. etc., referred to above.
During the period under review the Company has
complied with the provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc. mentioned
above. For S. N. ANANTHASUBRAMANIAN & CO.
Company Secretaries
We further report that:
Firm Registration No. P1991MH040400
The Board of Directors of the Company

is duly constituted with proper balance of
Executive Directors, Non-Executive Directors S. N. Ananthasubramanian
and Independent Directors. The changes in the Partner
composition of the Board of Directors that took C.P No: 1774
place during the period under review were carried Date : 18th February 2016
out in compliance with the provisions of the Act. Place : Thane
34
annual report 2015
BOARD’S REPORT
Annexure VI
Extract of Annual Return as on the Financial Year ended on 31st December 2015
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
i. CIN L23200MH1979PL021359
ii. Registration Date 31.05.1979
iii. Name of the Company Castrol India Limited
iv. Category / Sub-Category of the Company Public company/ Limited by shares
v. Address of the Registered office and Technopolis Knowledge Park,

contact details Mahakali Caves Road, Andheri (East),
Mumbai-400 093
Tel: 022-66984100
Fax: 022-66984101
vi. Whether listed company Yes
vii. Name, Address and contact details of M/s. TSR Darshaw Limited
Registrar and Transfer Agent, if any. 6-10 Haji Moosa Patrawala Industrial Estate,
20 Dr. E. Moses Road, Mahalakshmi,
Mumbai 400 011
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of the company shall be stated:
Sr. Name and Description of main NIC Code of the Product/ % to total turnover of the
No. products / services service Company
1 Coke and refined petroleum 192 99.68%

products
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
Sr. Name and Address CIN/GLN Holding/ Subsidiary/ % of shares Applicable

No. of the Company Associate held Section
1. Castrol Limited Not Applicable Holding 70.92 2(46)
35
annual report 2015
BOARD’S REPORT
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i. Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change
during the
Demat Physical Total % of Total Demat Physical Total % of Total
year
Shares Shares
A. Promoter
1) Indian
a) Individual / HUF 0 0 0 0.00 0 0 0 0.00 0
b) Central Govt. 0 0 0 0.00 0 0 0 0.00 0
c) State Govt.(s) 0 0 0 0.00 0 0 0 0.00 0
d) Bodies Corp 0 0 0 0.00 0 0 0 0.00 0
e) Banks / FI 0 0 0 0.00 0 0 0 0.00 0
f) Any Other 0 0 0 0.00 0 0 0 0.00 0
Sub-total (A)(1):
2) Foreign
g) NRIs – Individuals 0 0 0 0.00 0 0 0 0.00 0
h) Other – Individuals 0 0 0 0.00 0 0 0 0.00 0
i) Bodies Corp. 35,12,91,716 0 35,12,91,716 71.03 35,12,91,716 0 35,12,91,716 71.03 0
j) Banks / FI 0 0 0 0.00 0 0 0 0.00 0
k) Any Other 0 0 0 0.00 0 0 0 0.00 0
Sub-total (A)(2): 35,12,91,716 0 35,12,91,716 71.03 35,12,91,716 0 35,12,91,716 71.03 0
Total shareholding of Promoter
and Promoter Group (A) 35,12,91,716 0 35,12,91,716 71.03 35,12,91,716 0 35,12,91,716 71.03 0
B. Public Shareholding
1. Institutions
a) Mutual Funds 57,65,055 9,486 57,74,541 1.17 91,93,604 9,306 92,02,910 1.86 0.69
b) Banks / FI 3,85,993 18,258 4,04,251 0.08 10,80,276 18,258 10,98,534 0.22 0.14
c) Central Govt 0 0 0 0.00 0 0 0 0.00 0
d) State Govt(s) 0 0 0 0.00 0 0 0 0.00 0
e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0
f) Insurance Companies 2,79,46,620 0 2,79,46,620 5.65 2,72,64,374 0 2,72,64,374 5.51 (0.14)
g) FIIs 3,55,38,167 2,480 3,55,40,647 7.19 2,44,14,720 2,480 2,44,17,200 4.94 (2.25)
h)
Foreign Venture Capital 0 0 0 0.00 0 0 0 0.00 0
Funds
i) Others (specify) 0 0 0 0.00 0 0 0 0.00 0
j) Foreign Portfolio Investment
(Corporate) 8,19,818 0 8,19,818 0.17 66,21,402 0 66,21,402 1.34 1.17
Sub-total (B)(1) 7,04,55,653 30,224 7,04,85,877 14.25 6,85,74,376 30,044 6,86,04,420 13.87 (0.38)
2. Non Institutions
a) Bodies Corp.
(i) Indian 65,46,210 41,508 65,87,718 1.33 73,64,815 41,108 74,05,923 1.50 0.17
(ii) Overseas 0 4,000 4,000 0.00 0 4,000 4,000 0.00 0.00
b) Individuals
(i)
Individual shareholders
holding nominal share
capital upto Rs. 1 lakh 4,87,84,281 90,07,243 5,77,91,524 11.69 4,99,08,067 82,86,199 5,81,94,266 11.77 0.08
(ii)
Individual shareholders
holding nominal share
capital in excess of
Rs 1 lakh 77,54,851 6,45,506 84,00,357 1.70 85,87,867 4,73,000 90,60,867 1.83 .13
c) Others (Specify) 0 0 0 0.00 0 0 0 0.00 0
Sub-total (B)(2) 6,30,85,342 96,98,257 7,27,83,599 14.72 6,58,60,749 88,04,307 7,46,65,056 15.10 0.38
Total Public Shareholding (B)=(B)
(1)+ (B)(2) 13,35,40,995 97,28,481 14,32,69,476 28.97 13,44,35,125 88,34,351 14,32,69,476 28.97 0.00
Total (A) + (B) 48,48,32,711 97,28,481 49,45,61,192 100.00 48,57,26,841 88,34,351 49,45,61,192 100.00
C. Shares held by Custodian for
GDRs & ADRs 0 0 0 0.00 0 0 0 0.00 0.00
Grand Total (A+B+C) 48,48,32,711 97,28,481 49,45,61,192 100.00 48,57,26,841 88,34,351 49,45,61,192 100.00
36
annual report 2015
BOARD’S REPORT
ii. Shareholding of Promoters
Shareholding at the beginning of the year Shareholding at the end of the year % change
in share-
No. of Shares % of total % of Shares No. of Shares % of total % of Shares
holding
Sr. No Shareholder’s Name Shares Pledged/ Shares Pledged /
during the
of the encumbered of the encumbered
year
Company to total Company to total
shares shares
1. Castrol Ltd. 35,07,49,820 70.92 0 35,07,49,820 70.92 0 0
2. BP Mauritius Ltd. 5,41,896 0.11 0 5,41,896 0.11 0 0
Total 35,12,91,716 71.03 0 3,51,29,176 71.03 0 0
iii. Change in Promoters’ Shareholding (please specify, if there is no change)
Sr. No Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of shares % of total shares No. of shares % of total shares
of the Company of the Company
At the beginning of the year
Date wise Increase/Decrease in Promoters
Share-holding during the year specifying the
There is no change in promoters holding
reasons for increase/decrease (e.g. allotment/
transfer/bonus/ sweat equity etc):
At the end of the year
iv. S
hareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and
ADRs) as on 31st December 2015:
Shareholding Cumulative Shareholding

Sr. during the year
Name of Shareholders
No No. of Shares % of total Shares No. of Shares % of total Shares
1. LIC of India Child Fortune Plus Balanced Fund
At the beginning of the year 2,26,90,333 4.59 2,26,90,333 4.59
Bought during the year 26,78,636 0.54 2,53,68,969 5.13
Sold during the year 25,35,367 0.51 2,28,33,602 4.62
At the end of the year 2,28,33,602 4.62 2,28,33,602 4.62
2. Aberdeen Global Indian Equity Limited
At the beginning of the year 70,00,000 1.42 70,00,000 1.42
Bought during the year 0 0.00 70,00,000 1.42
Sold during the year 12,00,000 0.24 58,00,000 1.18
At the end of the year 58,00,000 1.18 58,00,000 1.18
3. Aberdeen Global-Asian Smaller Companies Fund
4. Reliance Capital Trustee Co. Ltd.
A/c Reliance equity Opportunities Fund
Bought during the year 12,77,600 0.26 34,87,101 0.71
37
annual report 2015
BOARD’S REPORT
iv. S
hareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and
ADRs) as on 31st December 2015: (Contd.)
Shareholding Cumulative Shareholding

Sr. during the year
Name of Shareholders
No No. of Shares % of total Shares No. of Shares % of total Shares
5. General Insurance Corporation of India
6. Matthews India Fund
Sold during the year 0 0.43 21,39,063 0.43
7. Vanguard Emerging Markets Stock Index Fund, A series
Of Vanguard International Equity Index Fund
Bought during the year 25,239 0.00 24,31,022 0.49
8. SBI Life Insurance Co. Ltd
9. Aberdeen Global – Emerging Markets Smaller
Companies Fund
10. Nomura India Investment Fund, Mother Fund
11. Aberdeen Emerging Markets Smaller Companies Fund
A Series of the Aberdeen Institutional Commingled
Funds, LIC
12. Icici Prudential Long Term Equity Fund (Tax Saving)
At the beginning of the year 0 0.00 0 0.00
Sold during the year 35,200 0.01 16,40,031 0.33
Note: The above information is based on the weekly beneficiary position received from Depositories.
38
annual report 2015
BOARD’S REPORT
v. Shareholding of Directors and Key Managerial Personnel:

Shareholding at the beginning Cumulative Shareholding
of the year 01-01-2014 during the year
Sr. No. Name of the Directors / KMP
No. of Shares % of total Shares No. of Shares % of total Shares
1 Susim Mukul Datta
At the beginning of the year 28,236* 0.00 28,236 0.00
Bought during the year 0 0.00 0 0.00
Sold during the year 0 0.00 0 0.00
At the end of the year 28,236 0.00 28,236 0.00
2 Uday Chander Khanna
At the end of the year 800 0.00 800 0.00
3 R Gopalakrishnan
4 Ravi Moti Kirpalani
5 Sashi Mukundan
6 Peter Weidner
7 Ralph Hewins
8 Rashmi Joshi
9 Jayanta Chatterjee
10 Omer Dormen
11 Sandeep Deshmukh
*Mr. Datta hold 5,000 shares in individual capacity and holds 23,236 shares jointly with his relatives.
39
annual report 2015
BOARD’S REPORT
V. INDEBTEDNESS

The Company had no indebtedness with respect to Secured or Unsecured Loans or Deposits as on
31st December 2015
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager
Sr. Particulars of Remuneration Name of MD/WTD/ Manager Total
No. Amount
Mr. Ravi Ms. Rashmi Mr. Omer Mr. Jayanta

Kirpalani Joshi Dormen Chatterjee
1. Gross salary
(a)
Salary as per provisions contained in
Section 17(1) of the Income-tax Act, 1961 1,62,47,373 1,17,63,572 97,10,717 1,18,90,226 4,96,11,888
(b)
Value of perquisites u/s 17(2) Income-tax
Act, 1961 64,20,986 14,54,503 14,06,165 11,98,915 1,04,80,568
(c) Profits in lieu of salary under Section 17(3)

Income-tax Act, 1961 23,25,871 10,63,297 3,62,622 12,03,168 47,54,958
2. Stock Option 0 0 0 0 0
3. Sweat Equity 0 0 0 0 0
4. Commission 0 0 0 0 0
5. Others, please specify 0 0 0 0 0
Total (A) 2,49,94,229 1,42,81,372 1,14,79,504 1,42,92,309 6,50,47,414
Ceiling as per the Act Rs. 94,97,30,000 (Being 10% of Net profits of the Company calculated as per
Section 198 of the Companies Act, 2013)
B. Remuneration to other Directors

Name of MD/WTD/ Manager
Sr. Total
Particulars of Remuneration Mr. S.M. Datta Mr. R. Gopalakrisnan Mr. Uday
No. Amount
Khanna
1. Independent Directors
• Fee for attending board committee meetings 9,50,000 7,50,000 5,50,000 22,50,000
• Commission 10,00,000 8,00,000 8,00,000 20,00,000
Total (1) 19,50,000 15,50,000 13,50,000 48,50,000
2. Other Non-Executive Directors
• Fee for attending board committee meetings 0 0 0 0
• Commission 0 0 0 0
Total (2) 0 0 0 0
Total (B)=(1+2) 19,50,000 15,50,000 13,50,000 48,50,000
Total Remuneration Total (A) + (B) 6,98,97,414
Ceiling as per the Act Rs. 9,49,73,000 (Being 1% of Net profits of the Company calculated as per
Section 198 of the Companies Act, 2013)
Overall Ceiling as per the Act Rs. 1,04,47,03,000 (Being 11% of Net profits of the Company calculated as
per Section 198 of the Companies Act, 2013)
40
annual report 2015
BOARD’S REPORT
C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD
Sl. No. Particulars of Remuneration Key Managerial Personnel

Sandeep Deshmukh
Company Secretary
1. Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 75,84,347
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 49,227
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 7,89,584
2. Stock Option 0
3. Sweat Equity 0
4. Commission 0
5. Others, please specify 0

Total 84,23,158
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

There were no penalties / punishment / compounding of offences for breach of any section of Companies Act
against the Company or its Directors or other officers in default, if any, during the year.
Omer Dormen Rashmi Joshi

DIN: 07282001 Chief Financial Officer
DIN: 06641898

Mumbai
24th February 2016
41
annual report 2015
BOARD’S REPORT
Annexure VII
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12)

OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(i) Ratio of the remuneration of each Director to the median remuneration of the Employees of the
Company for the financial year 2015, the percentage increase in remuneration of Chief Executive Officer,
Chief Financial Officer and other Executive Director and Company Secretary during the financial year
2015.
Sr. Name of Director/KMP Designation Remuneration % increase in Ratio of
No. and Designation of Director/KMP Remuneration in the remuneration of
for FY 2015 Financial Year 2015 each Director/
(Rs. in crore) to median
remuneration of
employees
1. Mr. Omer Dormen** Managing Director 1.148 # ##
2. Mr. Ravi Kirpalani** Whole-time Director 2.499 7% 18.58
3. Ms. Rashmi Joshi** Director – Finance 1.428 7% 10.62
4. Mr. Jayanta Chatterjee Director – Supply Chain 1.429 ### 10.63
5. Mr. S. M. Datta* Independent Director — — —
6. Mr. Uday Khanna* Independent Director — — —
7. Mr. R. Gopalakrishnan* Independent Director — — —
8. Mr. Sashi Mukundan Non-Executive Director — — —
9. Mr. Ralph Hewin Non-Executive Director — — —
10. Mr. Peter Weidner Non-Executive Director — — —
11. Mr. Sandeep Deshmukh** Company Secretary 0.842 19% 6.26
* The Non-Executive Independent Directors of the Company are entitled for sitting fee and commission as per the statutory provisions and within
the limits approved by the shareholders. The details of remuneration of Non-Executive Independent Directors are provided in the Corporate
Governance Report.
** KMP’s (Mr. Ravi Kirpalani was Managing Director and KMP upto 11th October 2015 and Mr. Omer Dormen was appointed as Managing Director
and KMP from 12th October 2015)
# Details not given as Mr. Omer Dormen was not Director in Financial Year 2014
## Details not given as Mr. Omer Dormen was Director only for part of the financial year 2015 i.e. w.e.f. 12th October 2015
### Details not given as Mr. Jayanta Chatterjee was a Director only for the part of the year in 2014 i.e. w.e.f. 30th October 2014
(ii) Other details:

Permanent employees on the rolls of Company as on 31st December 2015 753
The median remuneration of employees of the Company during the financial year Rs. 1,345,104
% increase in the median remuneration of employees in the financial year 7%
(iii) Relationship between average increase in remuneration and company performance:

The Profit before Tax for the financial year 2015 increased by 31% whereas the increase in median remuneration
was 7%. The average increase in median remuneration was in line with the reward policy of the Company.
The annual compensation review, as a part of the performance management system cycle, is also guided
by industry/business outlook, employee differentiation based on individual performance rating achieved
during the year. While determining remuneration, the Company takes into account, if the salary level is
competitive, relative to the peer group and variable remuneration is awarded against measurable performance
parameters.
42
annual report 2015
BOARD’S REPORT
(iv)
Comparison of Remuneration of the Key Managerial Personnel against the performance of the
Company:
The Company’s Profit Before Tax increased by 31% in FY 2015 to Rs. 950.9 crores from Rs. 726.3 crores
in 2014. Total Remuneration of Key Managerial Personnel increased by Rs. 0.41 crore (9.4%) from Rs. 4.36
crores in 2014 to Rs. 4.77 crores in 2015. The Company’s remuneration policy for the Key Managerial Personal
is covered in a separate annexure to the Board’s Report.
(v)
Variations in the market capitalisation of the Company: The market capitalisation as on 31st December
2015 was Rs. 21,855 crores (Rs. 24,797 crores as on 31st December 2014). Price Earnings Ratio of
the Company was 35.45 as at 31st December 2015 (52.2 as 31st December 2014). Share price as on
31st December 2015 was Rs. 441.9 per share of Rs. 5 each. The Company had made offer for sale to public
in 1983 of shares of Rs. 10 each at a price of Rs. 19 per share.
(vi) Average percentage increase made in the salaries of employees other than the managerial personnel in the
financial year 2015 was 7.1% whereas the increase in the managerial remuneration for the same financial
year was 9.4%. Increase in salary is based on remuneration policy/reward philosophy.
(vii) The key parameters for the variable component of remuneration availed by the Directors are considered by
the Board of Directors based on the recommendations of the Nomination and Remuneration Committee. A
high proportion of Directors’ total potential remuneration is strongly linked to the Company’s performance.
Variable pay/Performance Linked Bonus (PLB) comprises of a pre-determined maximum compensation that
can be paid at the end of the performance year. It provides a variable level of remuneration dependent on
short-term performance against the annual plan. Total overall Bonus is based on performance relative to
measures and targets reflected in the annual plan, which in turn reflects Company’s strategy.
(viii) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but
receive remuneration in excess of the highest paid Director during the year – Not Applicable.
(ix) The remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other
Employees as recommended by the Nominations Committee and approved by the Board from time to time.

DIN: 06641898

Mumbai
24th February 2016
43
annual report 2015
MANAGEMENT DISCUSSION & ANALYSIS REPORT
MANAGEMENT DISCUSSION & ANALYSIS REPORT companies. This in turn drives the consumption of
Pursuant to Regulation 34 of the SEBI Listing marine lubricants. The installed base of off-shore rigs
Agreement, a Management Discussion & Analysis along the coast-line of India and their up-time drive
Report covering segment-wise performance and demand for Energy lubricants.
outlook is given below:
Supply drivers: Lubricants are manufactured by
blending baseoils and additives, with baseoil being
(A) Industry structure and developments – 2015
the main component. Majority of the lubricants
Your Company operates across all three major market use mineral baseoil although there has been a
sectors of the lubricants industry – Automotive, significant growth in demand for premium lubricants in
Industrial and Marine & Energy applications. Your automotive and industrial segments which use
Company along with the Indian national oil companies synthetic baseoils.
lead the overall lubricants industry contributing
approximately 55% of the market in terms of volumes. India is a net baseoil deficit market and also many
Another 20% of the market, by volume, is accounted additives used in lubricants are manufactured
for by other multinationals which are mostly integrated outside India. This necessitates large-scale imports
oil companies and the rest of the market is constituted of baseoil and additives and thus also exposes
by numerous smaller players, largely local in nature. lubricants businesses to fluctuations in foreign
There are over 30 established players in this industry, exchange rates. While the Rupee continued to
making it very competitive. The market for automotive depreciate through most of 2015, mineral baseoil
applications, where your Company has established prices have dropped following the decline in the crude
a well-entrenched position over the years, is the oil prices.
predominant one amongst the three sectors within the
lubricant industry. Major industry developments
After a challenging business environment in 2014,
Demand drivers: India is an important market for the
GDP growth in 2015 has been a robust 7.3% and
lubricant industry world-wide, contributing to 6% of
inflation rate has been 5.8% through the year. The
global automotive lubricants demand and over 4% of
lubricant industry has seen a favourable cost of
industrial lubricants demand.
goods environment for the year due to the prevailing
Lubricant market demand is impacted directly by crude pricing and supply situation all through
the economic activity in India. Demand for automotive the year.
lubricants is driven largely by the dual forces of
Automotive sector
growth in vehicle population and the extent of use of
these vehicles. ‘Automotive lubricants’ is a collective Vehicle sales grew by 2% in the year 2015 compared
term to describe the vehicle-fluids requirements to the previous year. With respect to sales in the
of two-wheelers, passenger cars and commercial previous year, commercial vehicle sales increased
vehicles. by 7% overall, with Heavy Commercial Vehicle sales
growing by 30%, while Light Commercial Vehicle
The demand for lubricants in the Industrial sector is sales declined by 5%, and Tractor sales declined by
primarily driven by industrial production. The Index 18%. Passenger car sales increased by a healthy
of Industrial Production (IIP) has been observed to 8%, while two-wheeler sales grew only marginally
have a strong correlation to consumption demand for by 0.7%.
industrial lubricants in India.
Other longer term macro-trends in the industry
In case of Marine applications, global and local ship remained largely unchanged. The choice of lubricant
movements are the drivers of its demand. Large-scale and its specification plays a key role in enabling Original
global movement of goods happens predominantly Equipment Manufacturers (OEMs) to comply with
by sea and demand for shipping services drives tightening regulations on tail-pipe emissions and to meet
fleet utilization rates and freight rates for shipping demands for lower cost of operations. This places onus
44
annual report 2015
on the lubricant industry to respond with new products Non-automotive sectors

that are able to cope with the increasing sophistication Industrial lubricants
of these modern vehicles. These improved lubricants,
Industrial production, measured by the IIP, has shown
typically synthetic in nature, are also able to maintain
only modest improvement during 2015. Most of the key
their physio-chemical and performance properties for a
industrial sectors faced slower than expected local and
longer period of usage than earlier generation lubricants
global demand during the year.
thereby lengthening oil drain intervals. However, this
has an impact on structural demand in the industry As economic reforms continue to gain momentum,
as lubricant consumption decreases while per unit India’s manufacturing sector performance is likely
cost and price realization increases. Therefore, other to return to a sustained growth phase during 2016.
drivers remaining unchanged, the growth in demand India’s growth is also likely to accelerate towards
for lubricants is expected to lag vehicle population its high long-run potential with a major new national
growth rate in the foreseeable future. programme – ‘Make in India’, which is designed
to facilitate investment, foster innovation and drive
Two-wheelers: In the two-wheeler industry, gearless manufacturing in the country. To realize the full
scooters seem to be gaining popularity with consumers potential, progress on domestic reforms, roll out of
over the past few years. Scooter sales continued to national Goods and Services Tax (GST) and renewed
grow, clocking 13% growth in 2015 and this helped focus on manufacturing sector can be transformational
the industry offset somewhat the decline in motorcycle and significantly improve the competitiveness of Indian
sales (-3.6%). This has translated into an increase of manufacturing firms.
9% in two-wheeler population in the country and a
similar growth in demand for two-wheeler oils. Marine and Energy lubricants
Globally, the shipping industry is still passing through
With an increasing number of two-wheelers being
one of its worst phases in several decades. The Indian
sold into the smaller towns and villages over the
shipping industry has followed the global pattern
past decade, an estimated 50% of the two-wheeler
to a large extent, where global trade had grown
population resides in rural India today. However, in
12.6% during 2010 before slowing down to 2.81%
2015, weak monsoons have affected farm output and
in 2015.
consequently rural incomes have declined, impacting
demand for two-wheelers. The ban on iron ore export from India and changes in
taxation structure of coal exporting countries, coupled
Passenger cars: Passenger car sales posted a strong with high cost of funding and trade sanctions against
growth of 8% in 2015. The year witnessed an 8% certain countries, have exacerbated the problems of
increase in passenger car population due to higher the Indian shipping business.
sales in last few years. This has, in turn, increased
demand for car engine oils, which got slightly offset However, the Central Government’s push to de-
by the shift to higher quality, synthetic lubricants, that bottleneck infrastructure projects has improved
provide longer drain intervals in these cars. prospects, with global trade growth estimate pegged
at 3.9% in 2016.
Commercial vehicles: The vehicle parc for Heavy
& Medium Commercial Vehicles and Micro-Light Oil prices plummeted to below $40 and as a result, rig
Commercial Vehicles grew by 5% and 3% respectively utilization declined throughout the year with day rates
while Tractor vehicle sales declined by 18% in 2015. following suit. Early contract terminations, particularly
Off-road vehicle sales and utilization have also seen for floating rigs (semi submersibles and drill-ships),
a reversal of trend. Positive sentiment by the new have become more commonplace than at any other
Government did not immediately lead to a positive time in history and delivery dates for rigs under
change in the market in 2015; liquidity continued to be construction continue to be delayed. Spending by oil
a challenge for key Building and Construction players companies fell by 20% in 2015 and a further 11% drop
due to stalled projects. has been forecast for 2016.
45
annual report 2015
Impact of foreign exchange, crude oil and raw (B) Market behaviour and outlook
material prices GDP growth has been higher in 2015 than it was for
The year 2015 posed different challenges on account 2014, at 7.3%, but falling marginally short of planned
of baseoils, forex and crude. It started favorably on rate of 7.7%. Consumer Inflation has been at 5.8% in
back of falling crude in late 2014 which resulted into 2015, negating to some extent the favourable impact of
decline in baseoil prices but Rupee depreciation higher GDP growth in the year. Consumer sentiment is
continued to diminish the potential value throughout expected to be marked by higher levels of optimism than
the year. Overall business environment was very before, given that we have a stable majority government.
volatile especially during later part of first half with
firming crude, seasonal demand of baseoil and Automotive sector
Rupee depreciation which resulted into high input The outlook for the automotive sector in 2016 has
cost. In contrast, most part of second half witnessed been examined closely by your Company through the
unprecedented falling crude prices which pulled the three broad dimensions of demand drivers, distribution
baseoil prices down. channels and competitive activity.
These market dynamics continued to challenge your 1. Demand drivers

Company through the year.
The key drivers of demand growth in each segment
The following graph indicates the trend of crude prices where your Company operates are explained below:
and Rupee/USD for the year 2015.
Two-wheelers: The two-wheeler population is expected
Crude
Brent Crude and Forex Trend - 2015 Forex to grow by 7% during 2016 and is expected to drive
$ bbl US$ vs. `
70 68 the demand for two-wheeler lubricants. Rural segment
will be leading the growth in motorcycle sales in India.
60 66
The scooter oils sub-category has done very well in
2015 and is expected to continue the momentum of
growth in coming years due to surge in demand for
50 64
gearless scooters.
40 62 Passenger cars: Passenger car population is also

expected to grow by 7% in 2016 over the previous year
30 60
while car sales are expected to be a key growth driver
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
– likely to grow at 5% compared to 2015. In spite of the
Crude Price Forex
strong trend of increasing oil drain intervals and use
Additives and Chemicals prices stayed largely stable of higher quality lubricants, passenger car engine oil
to soft but benefits were wiped out by Rupee industry is expected to grow by 7% in 2016.
depreciation. Polymer and steel prices too followed Commercial vehicles: Overall, commercial vehicle
declining trend in 2015 which together contributed in population is expected to grow by circa 5% in 2016.
reduction of input cost in these categories. However, lubricants demand for this category is expected
However, in highly uncertain and challenging business to be static as a result of longer oil drain intervals with
environment, your Company continued generating the improvement in the quality of the lubricants.
value for its investors through strategic sourcing, value
Your Company expects lubricant demand growth in
improvement initiatives, extensive focus on service and
Micro-Light Commercial Vehicle segment parallel to
continuous monitoring of costs.
the growth in the vehicle sales; and in the Construction
Your Company worked determinedly on a best and off-highway OEM sectors as a result of revival in
value purchase model and value-based inventory the infrastructure investments whilst the demand for
management, keeping a close watch on cash-costs lubricants for old generation commercial vehicles is
and working capital. expected to continue to decline.
46
annual report 2015
Your Company expects lubricant demand for tractor oils which enables its sales force to customize offers to
to remain flat as the oil drain intervals become longer dealers or through the use of GPS technology to reach
despite an increase in area under sowing and improved out to smaller dealers and workshops in urban India.
price realization benefitting the agriculture economy.
3. Competitive activity
2. Channels of distribution The competitive situation remains largely unchanged
Castrol products are distributed through 370 with all major international lubricant players present
Distributors who service approximately 80000 in the market. Television remains the most popular
customers. We are also leveraging our distribution medium for reaching out to consumers with brand
network to reach Castrol Bike points, Castrol Car Care messages across the automotive sector, with different
and Pit stops. Castrol authorized service associates players dominating different categories. Your Company
and Independent workshops in the two-wheeler continues to be one of the leading brands in the
segment. Urban sub-distributors have been appointed retail automotive sector, followed by the public sector
for last mile connectivity whilst Castrol sub-distributors brands. In the urban retail automotive segment,
reach additional outlets in rural markets. The Castrol against a background of strong competitive action,
Engine Experts Club (CEEC) programme, a mobile your Company has seen a slight reduction in overall
based platform to reach to 35,000 independent vehicle market share from 22.8% in 2014 to 22.4% in 2015.
mechanics across commercial vehicles, motorcycles However, in our key focus categories i.e. passenger
and passenger car segment was backed up by physical cars, motorcycles and scooter segments, there has
visits through Distributor resources. This distribution been strong growth in market shares in 2015.
network reaches out to 53% of retail universe (trade
bazaar outlets) and 7.5% influencers (Independent Non-automotive sector
Workshops). Further, we are servicing over 3000 key Industrial lubricants
accounts through our Distributors and Business to With economic reforms gaining momentum, India’s
Business (B2B) Sales team. long term prospects for growth remain optimistic. ‘Make
in India’ programme is expected to drive the growth
In recent years, demand for premium products have
of manufacturing sector including some key industrial
seen an upward trend especially in urban India
sectors like automobile manufacturing, automotive
whilst rural consumers have also begun to make
components and machinery manufacturing.
their presence felt with higher levels of consumption
demand for the category. The composition of dealer Lower fuel prices and stable interest rates, in particular,
types within the retail channel continues to evolve are expected to drive the demand for cars and two-
as government investment in the rural economy has wheelers and hence automotive manufacturing, in 2016.
seen a rapid rise in the disposable incomes of rural
households leading to increasing economic activity in Marine and Energy lubricants
small towns and villages. The marine industry continues to operate in a very
challenging environment. During 2015, many Indian
Your Company has yet again pioneered the shipping and ship management companies increased
development of effective and efficient distribution scrapping and sale of vessels, with several going
networks to harness this opportunity. Over the last bankrupt. This, and the lower utilization rates of fleets,
two years, innovations in the route-to-market have led higher lay-ups and the adoption of slow steaming, has
to exponential growth in business from small towns led to a drop in the volumes of marine business.
and rural India. In urban markets, your Company’s
focus has been on improving the customer service by Ratings agencies expect muted global trade growth
providing increasing levels of reliable service and more and the economic slowdown in emerging markets to
relevant customer oriented loyalty programmes. Your exacerbate overcapacity, leading to declining and volatile
Company has, as in the past, stayed at the cutting freight rates. But performance will vary across the
edge of technology to service customers better – be segments, with dry-bulk and container shipping under
it through usage of Personal Digital Assistants (PDAs) pressure, while tanker and LNG shipping fare better.
47
annual report 2015
China’s slower growth and economic transition will c. Partnerships with Original Equipment
pose particularly significant risks for the shipping Manufacturers (OEMs): Building strong partnerships
sector due to its key role in global trade, accounting with key OEMs across vehicle types is a significant
for two-thirds of global iron ore imports and 20% of opportunity for your Company. The need of the hour
world coal imports. is not only to join hands for business but also for
technology development to address the total cost
The Energy lubricants sub-sector witnessed significant of ownership challenge faced by OEMs. Despite
turmoil in 2015 resulting in withholding future infrastructural challenges, international automotive
investments in 2015 and will continue to see similar OEMs continue to increase activity and commitment to
impact on activities and expansion in exploration and operate in India.
drilling even in 2016.
Stronger emission norms and demand for fuel
(C) Opportunities and threats efficiency is driving OEMs to keep developing new
engine technology at a faster pace. These factors will
Automotive sector result in a demand for lubricants with very specific
(i) Opportunities physico-chemical and performance properties.
a. First Time Users (FTUs) of personal mobility:
d. Micro-Light Commercial Vehicles (MLCVs): The
With higher share of domestic private consumption and
MLCV segment has emerged as a robust last mile
household income distribution moving from pyramid
connectivity option and the vehicle population in this
to diamond structure, Indian households have higher
segment is growing at a healthy pace. Although the
disposable incomes. This in turn has given significant
segment has been moderately impacted by economic
boost to personal mobility through two-wheelers
downturn, it is still underpenetrated and offers good
and four-wheelers. The first time users of personal
opportunities.
mobility are young, more tech savvy and require
reliable solutions to ensure the upkeep of their prized (ii) Threats
investments. This requires product and marketing
(a) Economic uncertainty: With the world becoming
communications to bring the new consumer segments
more and more interconnected, events in any part of the
on board.
globe could have repercussions on other geographies
Two-way engagement media, prominently digital and as well. Although we are witnessing a downward spiral
social media, are emerging as strong alternatives to in crude prices, the trend might change in late 2016. The
communicate with these FTUs. The next two points Indian Rupee has shown moderate volatility throughout
detail out the further opportunities in the personal 2015 and this trend is likely to continue in 2016.
mobility space.
(b) Competitive activity: Competition in the Indian
b. Two-wheelers in small towns and emergence of lubricant market is intense and is likely to remain so
gearless scooters: With increasing rural incomes and in the foreseeable future. Most international players
better sources of finance, the macro trend of growth have identified India as a focus market. The industry
of two-wheeler sales in rural markets is expected to has also witnessed a trend of some OEMs introducing
continue. lubricants under their own brand name, further
impacting the competitive landscape.
Already, 50% of two-wheelers are sold in the small
towns and villages. Providing reliable supply of engine Non-automotive sector
oils in these geographies is a sizeable opportunity. (i) Opportunities
The share of gearless scooters in two-wheeler sales Industrial lubricants
has also consistently risen over time, with increasing The industrial output growth in 2016 is likely to be
number of women drivers. Tapping this emerging better than recent past. Your Company’s inherent focus
category is a material opportunity. on customers from core segments i.e. automotive
48
annual report 2015
manufacturing, automotive components, machinery (D) Performance of segments and categories

manufacturing and metals, amongst other segments,
I. Automotive lubricants
would ensure superior performance in 2016 led by
volume growth. Overview
Your Company continued to deliver a strong
Marine and Energy lubricants performance across the truck, passenger car and
State owned oil and natural gas companies have plans two-wheeler oil categories in the year 2015, driven
to double the gas production from current levels in next by performance of its Power Brands – Castrol Activ,
four to five years thus keeping a positive long term Castrol Power1, Castrol GTX, Castrol MAGNATEC,
outlook for offshore drilling sector. Castrol EDGE, Castrol CRB Turbo and Castrol
VECTON. The Castrol brand continued to pioneer and
Central Government has proposed to develop sixteen drive the syntheticization of the category in response
new ports projects with focus on port connectivity to demands from vehicle manufacturers (OEMs) for
and development of inland waterways to improve the better performing and environment-friendly products,
capacity for the transportation of goods. This will be an while also selectively making a play in the mid-
emerging opportunity in coastal trans-shipments and price segment in certain categories. Your Company
inland waterways shipment in India. continued its close association with its Key Strategic
OEM partners, especially Maruti Suzuki, Volkswagen
Central Government is aiming to raise cargo and group, Tata Motors, Ford and JCB.
passenger movement through waterways from the
Your Company also continued to invest in building
current 5% to 30% in the next 15 years. This means
relations with key retail channel partners through the
that there will be demand for more coastal ships,
highly successful Anmol Ratn programme during the
barges and passenger vessels. The government
course of the year 2015. Castrol Engine Experts Club
initiatives like ‘Jal Vikas Marg’ and ‘Sagarmala’ projects
has been successful in endearing brand Castrol further
will enhance transportation through inland waterways
to mechanics, who are key influencers in the choice of
considering the recent approval for the development of
oil and who are the primary handlers of lubricants.
101 waterways across the country.
There were however, significant challenges that your
Company encountered in the Heavy Duty category,
(ii) Threats
which caters to large fleets, mining, and building &
Industrial lubricants construction equipment applications. This is due to
While the Indian manufacturing industry is expected to the twin effects of lowered economic activity in this
do better in 2016, increasing pressure on competitive category and rising input costs for the industry.
pricing may pose some challenge.
The following sub-sections of the Management
Marine and Energy lubricants Discussion & Analysis Report detail out the performance
In short to mid-term, Energy companies may reduce of each category within automotive lubricants.
their capex and put field development plans on hold
Personal Mobility
as oil prices fall. This may in turn negatively affect the
energy lubricants demand. In addition, competition Two-wheeler oils: The two-wheeler oils segment
may become aggressive on pricing of marine comprises engine oils for four-stroke and two-stroke
lubricants given the softening of crude and emerging engines that power motorcycles and scooters. Oils for
opportunities for sector. four-stroke motorcycle engines dominate the category
currently, while the gearless scooter segment is
The number of rigs under contract has fallen growing rapidly. Castrol operates in this space through
in the past year and indications are that a three product brands – Castrol Activ, Castrol POWER1
continued decline is probable, continuing into 2016 and Castrol Go!. Castrol has a special offering for
as well. gearless scooters – Castrol Activ Scooter. Castrol Bike
49
annual report 2015
Points are stock-and-sell independent two-wheeler brands – Castrol GTX, Castrol MAGNATEC and
workshops and are a key driver of growth for your Castrol EDGE. Passenger car oils sell through two
Company in this category. major channels in the after-market – retail channel and
The two-wheeler segment was the key growth driver the stock-and-sell independent workshops.
of your Company’s performance in 2015 and delivered
The year 2015 witnessed a turnaround in the passenger
strong volume and value growth. This reflected in
cars industry in India. The PCO Retail market
gain of 70 basis points in the volume share as per
experienced volume growth. Your Company continued
Nielsen Retail Audit, indicating superior performance
driving synthetic products, focusing on key metro cities
versus category. Castrol Activ continued to dominate
through 360 degree marketing and activation plans
the category on television advertising as well as digital
aimed at growing market share.
media. Your Company leveraged sponsorship of ICC
by giving an opportunity to the whole of India to be a The lead brand, Castrol MAGNATEC STOP-START,
part of the ICC Cricket World Cup Australia and New which has been developed specifically to protect
Zealand 2015 through an innovative online campaign. against damage caused by driving in dense traffic,
Castrol got cricketing legend Anil Kumble, Sanjay stop-start conditions, was driven through outdoor,
Manjrekar and well-known cricket commentator radio and digital platforms and performed well in the
Harsha Bhogle together on a Google Hangout to market place.
discuss how today’s passionate cricket fan demands
to be in the middle of all the cricketing action and is Your Company continued to educate mechanics about
no longer satisfied with being on the sidelines. Fans special requirements of modern engines and explain
were encouraged to participate in digital contests built why Castrol MAGNATEC is the right solution for these
around the brand proposition of ‘Cling On’ and the lucky engines. This has helped build brand equity amongst
winners were featured on LED boards in the cricket mechanics who are key influencers for this category.
stadiums, thus being a part of the cricketing action,
reaching millions of households through television. Passenger Car Oils in OEM Franchised Workshops
Through media and sponsorship activation, the brand (PCO FWs): The PCO Franchised Workshop segment
continued to have robust brand equity, the strongest in consists of engine oils and drive-line oils. OEM
the category. approvals and strong grassroots relationships with
Franchise Workshops of OEMs are the business
Your Company continued to build Castrol Activ Scooter drivers for this segment. Working in close co-operation
brand, a product customized for gearless scooters, with OEM partners, global and local, your Company
through advertising and mechanic education. has embarked on a journey to cater to this specialized
Castrol Power1 continued to engage young, passionate channel through a dedicated range of products called
bikers, on digital platform. The social community – the Castrol Professional series. Through a combination
‘Castrol Biking’, – is 1.6 million strong, with fans sharing of variants – Castrol MAGNATEC Professional, Castrol
their passion for biking on the platform. The ‘Castrol GTX Professional and Castrol EDGE Professional,
Power Biking’ app connects passionate bikers, helps your Company caters to the engine oil requirement
them plan biking trips and find Castrol Bike Points on of franchise workshops of Maruti Suzuki, Ford, the
the way, for their vehicle servicing needs. Volkswagen group, Jaguar-Land Rover, Tata Motors
and other OEMs.
Your Company continued to expand its service network
of Castrol Bike Points to provide consumers access to
Castrol Champions League: This is a dedicated
servicing their motorcycles using the best of Castrol
Service Advisor advocacy programme run across key
products.
Maruti Suzuki Franchised Workshops. Your Company
Passenger Car Oils in the After-Market (PCO reached out to end consumers through these Service
Retail): Passenger Car Oils portfolio comprises engine Advisors who interact directly with car owners and are
oils for cars and utility vehicles and brake-fluids. Your able to explain the benefits of the Castrol Professional
Company caters to this segment with three product range to them.
50
annual report 2015
Growth in Maruti Suzuki Franchised Workshops: c. New products launched to leverage growing
Through a combination of key account acquisitions segments in 2014 and 2015 namely Castrol CRB
and gaining share in existing accounts, your Company Mini Truck, Castrol VECTON and Castrol CRB
delivered a significant volume growth in the Maruti Turbo Plus, have been very well received in the
Suzuki network. The Castrol Champions League was market.
a key enabler in delivering this outcome.
II. Non-automotive lubricants
Growth in European OEM segment: Through
Industrial lubricants
exclusive tie-ups and aggressive account retention
programmes, your Company tapped into the rapid The year 2015 was a very successful year for Castrol’s
growth in population of European cars in the country Industrial business as it delivered good growth in
and delivered 20% growth in volumes in this segment margins despite tough external environment and strong
during the year. competition. The India industrial business has been
one of the fastest growing businesses within Castrol
Commercial Vehicle Oils (CVO) businesses worldwide. Your Company increased its
Commercial vehicle oils category comprises lubricant share of business in key customer accounts and also
applications for small and large trucks, farm equipment won new prestigious accounts by providing superior
and specialized products for the Heavy Duty segment. technology and better customer service.
In product terms, it comprises engine oils for new and Marine and Energy lubricants
old generation commercial vehicles, hydraulic oils and
Your Company continues to focus on customer
the ‘Specialty Products’ range. ‘Specialty products’
intimacy and provides products and services that
is an umbrella term representing essential vehicle
are best-in-class in this segment. Introduction of
fluids other than engine oils; such as drive-line oils,
environment friendly biodegradable lubricants for stern
greases and coolants. Castrol CRB is the oldest and
tube and value added services like fleet optimiser
best known brand in this segment, participating in the
and Scavenge drain analysis (SDA) were embraced
agri-sector and old-generation Medium and Heavy
by marine customers. It is also in advanced stages
Commercial Vehicles with Castrol CRB Plus and in
to launch a unique chemistry product for use in low
the new generation commercial vehicles segment with
sulphur environment, which has a state of art ash
Castrol CRB Turbo. Castrol RX Super leads the play
control technology. In addition, your Company will also
for your Company in the mid-price segment in truck
continue to focus its efforts to bring in more efficiency
applications along with Castrol CRB Multi which was a
in its operations and concentrate on value driven and
new entrant in 2015.
profitable customers to maintain its value and thought
The year 2015 continued to pose a challenging market leadership position in the Marine segment.
environment resulting in marginal decline in lubricants
Your Company has maintained its leadership position
for New Generation truck segment and severe decline
in the offshore drilling segment during the year under
in old generation commercial vehicles. While overall
review, by focusing its efforts on value offers despite
performance was impacted by the unfavourable
minimal drilling activity in the segment. Introduction
economic conditions and poor monsoon, mentioned
of environment friendly biodegradable lubricants to
below are some of the highlights of the business during
offshore drilling sector was welcomed by the major
the period under review:
drillers in the country. As drilling moves into deeper
a. Your Company further broad-based its participation seas, your Company will maintain its focus on value
in the mid-tier price segment in trucks with the and specialist offers such as sub-sea solutions, to
launch of Castrol CRB Multi. further consolidate its market share in the offshore
drilling segment.
b. Your Company launched two new products in the
fast growing CI4 segment; both these products, (E) Risks and concerns
Castrol VECTON and Castrol CRB Turbo Plus The economic growth still remains inconsistent with
have been received very well in the market. stressed balance sheets of banks and corporates posing
51
annual report 2015
challenge to growth and hence lubricants consumption Considering the demand for higher quality oils due to
and demand. This may impact your Company’s tougher emission quality standards, your Company
performance during 2016. The aggressive pricing launched Castrol Vecton CI4+ with system 5 technology
strategy by local as well as international competition, in and Castrol CRB Turbo Plus with Durashield booster™
an attempt to gain market share, and commoditization after extensive trials in local vehicles.
of products in the premium segments, will have an
In 2015, a number of technology initiatives were
impact on overall industry margin. The economy is to be
taken in the Industrial product range. Your Company
watched cautiously for revival signs in some key sectors.
focused on the localization of Castrol Clearedge 6519
In addition, forex uncertainty may also have adverse
and Castrol Almaredge 61 FF to drive the growth
impact on cost of goods despite crude softening.
in soluble metalworking fluids for automotive and
Employee attrition could result in loss of knowledge machine manufacturing segments. These products
and business disruption, which may impact your have successfully delivered differentiated benefits
Company’s ability to support its growth agenda. to customers at competitive cost. Your Company
Safety and product integrity continue to be focus areas launched mid-flash Rust Preventive to meet the new
for your Company. Given the extremely challenging norms of tube industry and customer requirements on
road conditions in India, road safety is an area of reduced costs. The product was developed keeping
particular concern for your Company as it moves its the technology ahead of competition and targeting
goods and people across the country. significant growth in the market place.
Your Company has put together a plan to address Another major milestone achieved during the year
the impact of the identified risks and put in place the was the renewal of the ISO 14001, 9001:2008 and
necessary monitoring and mitigation actions. TS16949 certifications for the India Technology Centre.
The ISO 9001:2008 assured the management of your
(F) Technology Company that the operations of the Centre continue
Your Company continued to derive sustainable benefits to be streamlined and efficient even after the activities
from its India Technology Centre located in Mumbai were shifted to an alternate location at the Company’s
until the first half of 2015. Following a safety incident Silvassa Plant. The ISO 14001 certification is a mark
outside the Technology Centre and a subsequent re- of your Company’s commitment to the customer and
evaluation of the risk scenarios in and around the site, shareholders to be environmentally responsible and to
it was decided to shut down the Wadala site in June, adopt sustainable business practices.
2015. Following this move, the technology activities
which were being undertaken at the India Technology (G) Internal control risks and their adequacy
Centre have been shifted to alternate locations within Your Company maintains an adequate and effective
and outside India to ensure continued support to the Internal Control system commensurate with its size
business without disruption. and complexity. We believe that these internal control
systems provide, among other things, a reasonable
During the year, your Company’s product development
assurance that transactions are executed with
capability helped the business meet pressing consumer
management authorization and that they are recorded
needs, partner closely with its customers and leverage
in all material respects to permit preparation of financial
strengths of its global affiliates to meet the needs of
statements in conformity with established accounting
the local market.
principles and that the assets of your Company are
Your Company focused on optimizing current adequately safe-guarded against significant misuse
formulation in the personal mobility segment through or loss. An independent Internal Audit function is
value engineering. Your Company also focused on the an important element of your Company’s internal
Indian passenger car market to develop a range of control system. The internal control system is
fuel efficient, durable SAE 5W-30 and 0W-20 engine supplemented through an extensive internal audit
oils, for gasoline and diesel applications to meet future programme and periodic review by Management and
emission requirements. the Audit committee.
52
annual report 2015
(H) Health, safety, security and environment bring in efficiency and thereby reduce the carbon foot
(HSSE) print along with reduction in road related safety risk.
Your Company has been fully committed to comply
Road Safety continues to be the prime focus area for
with all applicable laws and requirements and
your Company with many initiatives undertaken to ensure
maintains highest standards of Occupational Health,
everyone goes home safe every day. The Company has
Safety & Environment. This is also spelt in the HSSE
continued to engage the driving community in the flagship
policy which uniformly applies to every member of the
community outreach programme ‘Family Connect’ which
workforce which includes employees and others who
is organized in different parts of the country throughout
work for us (contractors, audit agencies, suppliers,
the year. Sales employees who drive for business drove
NGOs, etc.). Safety and Environmental Performance
more than five million kilometers without any severe
has been integral to the business performance of your
accident, keeping focus on safety at all times. Your
Company and it continues to focus on the goal: ‘no
Company has also reached out in various communities,
accidents, no harm to people and no damage to the
educational institutions and other industries, taking a
environment’.
lead in promoting awareness on Road Safety.
Your Company ensures safe, systematic, reliable
and environmentally friendly operations through its (I) Developments in human resources
Operating Management System (OMS). All three management
blending plants of the Company are certified to the Values & behaviours and employee value proposition
Environment Management System (ISO 14001:2004)
People are a key resource for your Company. During
and Occupational Health & Safety Management
the year under review, the focus was on building
System (OHSAS 18001: 2007). Your Company is also
the One Castrol organization which sharpens the
certified for ISO 9001:2008 (Quality Management
focus on efficiency and simplification with a view to
System Standard). Compliance to these systems
ensuring alignment to the overall business strategy
has been certified by internationally recognized and
and readiness to achieve your Company’s 2020 Vision.
accredited bodies. Regular internal and external audits
help to continually improve the process and make Your One of the key focus areas during 2015 was employee
Company more efficient. Your Company is also helping engagement and talent management, leveraging the One
the environment by improving the fuel efficiency of the Castrol reorganization to provide career opportunities
engines and hence helping to conserve precious fossil and support the realization of people potential.
fuels. Patalganga Plant was a finalist for its efforts on
safety, at the BP Helios Awards in 2015 which is a Group Your Company has continued to actively drive values
level recognition of activities strongly demonstrating and behaviors through an inclusive process of dialogue
BP values (Safety, Respect, Excellence, Courage, One and articulation of your Company’s Values & Behaviours,
Team). Your Company was also recognized by various with a special focus on ‘Respect’ at the workplace.
external agencies like National Safety Council and
Your Company has continued on its journey to build a
Greentech Foundation for the work done in the area of
diverse and inclusive workforce during the year 2015.
Safety & Environment.
As part of entry level talent programmes (Graduate
Initiatives to mitigate possible safety and environmental and Sales Trainee programmes), – we have increased
risks and reduce environment footprint are in place. All our gender diversity to 50% and have successfully
efforts are taken to minimize energy consumption, water focused on diverse lateral hires in frontline sales roles.
consumption and waste generation from manufacturing
operations viz. optimizing the manufacturing batch Reward and Recognition
sizes, maximizing the use of natural lighting, use of LED Your Company continues to focus on recognition through
and energy efficient lighting, regular water monitoring the Castrol STAR Club Awards. This programme is
and audits and many other environment management based on bringing your Company’s values to life and
programmes. Your Company is also committed to lays emphasis on recognition rather than reward. There
regularly work on logistics process optimization to are five categories of awards based on each Value –
53
annual report 2015
Safety, Respect, Excellence, Courage and One Team. The total number of people employed in your Company
The recognition acknowledges the demonstration of your as on 31st December 2015, including factory workmen,
Company’s values and behaviours at the work place. was 763.
Control and compliance (J) Discussion on financial performance with

In order to further strengthen controls on all the respect to operational performance
processes, in 2015, the entire Human Resources and Your Company delivered a strong Gross Profit growth
payroll processes were mapped and documented with of 17% in 2015 over 2014, due to lower material cost
Workflows and Internal Control Templates (ICT). Key and sustained selling price, although volumes declined
controls were put in place and monitored to provide due to weak demand in commercial vehicles and heavy
assertions to the Management on design and operating duty segment.
effectiveness of these processes. Further design
and effectiveness were checked and found to be in Cost of sales declined during 2015 by 17% over the
good order. previous year primarily due to lower baseoil prices. Your
Company managed to sustain the selling price due to
During the year 2015, your Company continued its high its focus on delivery in personal mobility segments and
degree of compliance with employment legislations by sale of premium product mix.
conducting Gap analysis in many of its locations and
took actions to close gaps in all locations audited. It Operating and other expenses increased by Rs. 67
also improved two-tier compliance monitoring system crores as compared to 2014 due to investment in
comprising of quarterly compliance checklist and a safety, people, brands, Corporate Social Responsibility
self-assessment checklist (for monthly reporting) which (CSR) and business growth opportunities.
enabled improving and sustaining the compliance The Profit After Tax (PAT) has increased by Rs. 140.7
culture in your Company. crores and is at Rs. 615.3 crores compared to 2014
mainly due to higher gross profit and a write back of
Employee relations at Plants
provision no longer required.
Your Company has a contemporary employee relations
scenario with a participative culture, receptive to With the drop in crude oil prices, the input costs for
technical upgradation, at the Plants. 2016 are expected to be slightly lower than 2015
cost. However, the Indian Rupee is yet to show signs
There continued to be a harmonious employee of stabilizing against US Dollar. While there is an
relations environment at all three Plants and the overall optimism in the economy, the industrial and
Technology Centre, throughout the implementation of economic growth has been slow compared to the
Capex projects, and other initiatives. The Plants have expectations. This may continue to put pressure on your
also acquired accreditations like TS 16949, making Company’s margins.
them OEM ready. During the pendency of settlement
negotiations, there has been no loss of productivity at The Management is confident that your Company,
the Paharpur Plant, nor at the Patalganga Plant where with its strong brands, enduring relationships with key
negotiations are in progress. stakeholders and commitment of its staff, will continue
to sustain its strong performance during the year 2016.
The engagement and communication with the
workmen through initiatives like the Plant Performance On behalf of the Board of Directors
reviews, leadership team interactions and town halls,
have been appreciated by them. The care and concern
for the health and well-being of the employees and Managing Director Director Finance &
their families, through financial assistance, workshops
and family engagements have been exemplary. The
DIN: 06641898
strength of the employee relations at the Plants is also
indicative by the absence of unionization of contractual Mumbai
labour, which is prevalent in the neighbouring industries. Dated: 24th February, 2016
54
annual report 2015
REPORT ON CORPORATE GOVERNANCE
REPORT ON CORPORATE GOVERNANCE are fundamental drivers of sustainable business

performance.
[Pursuant to Part C of Schedule V the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2. Board of Directors
2015 “Listing Regulations”]
Composition and Category
The Board of Directors of the Company comprises
1. Brief Statement on Company’s Philosophy on
of an optimum combination of Executive and
Code of Governance
Non-Executive Directors, which is in conformity
Good governance practices stem from the value with the SEBI (Listing Obligations and Disclosure
system and philosophy of the organisation and at Requirement) Regulation, 2015. As of the year ended
Castrol we are committed to optimise shareholder 31st December 2015, the Board consisted of 10
returns, governance processes and an entrepreneurial, Directors comprising of Four Executive Directors, Three
performance focused conducive work environment. Non-Executive Directors nominated by Castrol Limited,
UK as provided under the Articles of Association
The Board is collectively responsible to ensure that of the Company and Three Independent Directors.
Corporate Governance processes are structured The increase in number of Directors on the Board is
to direct the Company’s actions, assets and agents due to succession plan for the position of the Managing
to achieve this purpose, while complying with the Director. The Chairman of the Board is a Non-Executive
Code of Governance. The Company’s policies covers Independent Director. None of the Directors of your
aspects such as ethical conduct, health, safety and Company is related to each other.
the environment; control and finance; commitment to
employees; and relationships as rooted in the BP’s During the year, Mr. Ravi Kirpalani, stepped
Governance Principle. Key aspects of the Company’s down as the Managing Director with effect from
Governance Processes are: 11th October 2015 and as a Whole-time Director with
effect from 31st December 2015 and as such he has
• lear statements of Board Processes and the
C
ceased to be Director of the Company.
Board’s relationship with Executive Management.
• framework of prudent and effective controls

A Appointment and Tenure
which enable risks to be assessed and mitigated. The Directors of the Company are appointed by
members at the General Meetings and two-third
• et the Company’s values and standards and
S directors, other than Independent Directors retire by
ensure that obligations to shareholders and rotation pursuant to the provisions of the Companies
others are understood and fulfilled. The Board Act, 2013. The Executive Directors on the Board serve
recognises that in conducting its business, the in accordance with the terms of their contract of service
Company should be responsive to other relevant with the Company.
constituencies.
Board Independence
• eview and where appropriate determine the long
R
term strategy and the annual plan for the Company Based on the confirmation/disclosures received
based on proposals made by the Management, for from the Directors and on evaluation of the
achieving the Company’s purpose. relationships disclosed, all the Non-Executive –
Independent Directors including the Chairman are
The values of the Company i.e. Safety, Respect, independent in terms of Listing Agreement/SEBI
Excellence, Courage and One Team have been (Listing and Obligation Disclosure Requirement),
embedded in its way of working. These values Regulation, 2015.
55
annual report 2015
The composition of the Board, Directorships/ Committee positions in other Companies as on 31st December 2015,
number of meetings held and attended during the year are as follows:
Name of Director Designation Board Meetings Other Memberships of Board

Attendance at
during the year Directorships Committee of other
last AGM
(including Companies
Castrol India
Held Attended Member Chairperson
Limited)
Mr. S. M. Datta* Chairman 5 5 Yes 12 7 1
Mr. R. Gopalakrishnan* Non-Executive Director 5 4 Yes 6 1 1
Mr. Uday Khanna* Non-Executive Director 5 5 Yes 10 4 2
Mr. Sashi Mukundan Non-Executive Director 5 4 Yes 2 None None
Mr. Ralph Hewins Non-Executive Director 5 4 Yes 1 None None
Mr. Peter Weidner Non-Executive Director 5 5 Yes 1 None None
Mr. Ravi Kirpalani** Whole-time Director 5 5 Yes 2 None None
Mr. Omer Dormen *** Managing Director 5 1 Not Applicable 1 None None
Ms. Rashmi Joshi Whole-time Director 5 5 Yes 1 None None
Mr. Jayanta Chatterjee*** Whole-time Director 5 5 Yes 1 None None
* Independent Directors
** Ceased as Director from 31st December 2015 (Worked as Managing Director upto 11th October 2015 and as Whole-time Director from
12th October 2015 to 31st December 2015)
*** Appointed with effect from 12th October 2015.
Note:
1. ‘Other Directorships’ exclude directorships in Foreign Companies. “Other Board Committees Membership” include memberships of Audit Committees
and Stakeholder Relationship Committees of Public Limited Companies only.
2. None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees across all Companies in
which they are Directors.
3. None of the Directors on the Board is related to each other.
4. During the financial year, total five (5) Board Meetings were held on 25th February 2015, 14th May 2015, 29th July 2015, 17th August 2015 and
5th November 2015 respectively.
5. Mr. S. M. Datta (in individual capacity and as a joint holder) holds 28,236 shares, while Mr. Uday Khanna holds 800 shares of the Company. No other
non-executive director holds any shares in the Company. The Company has not issued any convertible securities.
Board Meetings Process During the year, the Independent Directors of the
The notice of Board Meeting is given well in advance Company met separately without the presence of
to all the Directors. Usually, meetings of the Board other Directors or management representatives on
are held in Mumbai. The Agenda and Pre-reads are 5th November 2015 to review the performance of
circulated well in advance before each meeting to all the Non-Independent Directors; the Board & the
Directors for facilitating effective discussion and decision Chairperson of the Company and to assess the quality,
making. Considerable time is spent by the Directors on quantity and timeliness of flow of information between
discussion and deliberations at the Board Meetings. the Company management and the Board. All the
Independent Directors attended the meeting.
The Company Secretary is responsible for collation,
review and distribution of all papers submitted to the In addition to these formal meetings, interactions
Board and Committees thereof for consideration. outside the Board meetings also take place between
The Company Secretary is also responsible for the Chairman and Independent Directors.
preparation of the Agenda and convening of the
Board and Committee meetings. The Company Directors’ Induction and Familiarization
Secretary attends all the Meetings of the Board and its The Board members are provided with necessary
Committees, advises/assures the Board on Compliance documents/brochures, reports and internal policies
and Governance principles and ensures appropriate to enable them to familiarise with the Company’s
recording of minutes of the meetings. procedures and practices. Periodic presentations
56
annual report 2015
are made at the Board and Committee Meetings, on 3. is/her ability to monitor the performance of
H
business and performance updates of the Company, management and satisfy himself/herself with
global business environment, business strategy and integrity of the financial controls and systems in
risks involved. place, etc.
Independent Directors and Executive Directors are 4. Independent Directors performance is evaluated
issued Letters of Appointment setting out in detail, also based on his/her help in bringing an
the terms of appointment, duties, responsibilities and independent judgment to bear on the Board’s
expected time commitments. The induction process deliberations especially on issues of strategy,
for Non-Executive Independent Directors include performance, risk management, resources, key
interactive sessions with Management Committee appointments and standards of conduct and his/her
members, Business and Functional Heads, visit to ability to bring an objective view in the evaluation
market/plant, etc. of the performance of the board and management.
The Independent Directors, from time to time request

3. Committees of the Board
management to provide detailed understanding of any
specific project, activity or process of the Company. The The Board Committees are set up to carry out
management provides such information and training clearly defined roles which are considered to be
either at the meeting of Board of Directors or otherwise. performed by members of the Board, as a part of
good governance practice. Minutes of proceedings of
Web link giving the details of familiarization programme Committee meetings are circulated to the Directors and
imparted to independent directors http//www.castrol. placed before Board Meetings for noting. The Board
com/en_in/india/about-us/financials/other-financials- has currently established the following statutory and
document-policies.html non-statutory Committees:
Board Evaluation
(A) Audit Committee
The Nomination and Remuneration Committee specified
The members of the Audit Committee have wide
down the evaluation criteria for performance evaluation
exposure and knowledge in area of finance and
of Directors, Board and its Committees. The Board is
accounting. The terms of reference of the Audit
committed for evaluating its own performance as a
Committee have been in line with Regulation 18 of
Board and individual performance of Directors, in order
SEBI Listing Obligations and Disclosure Requirement,
to identify strengths and areas in which it may improve
Regulations, 2015 and Section 177 of the Companies
functioning. Further, overall effectiveness of the Board
Act, 2013. The Audit Committee, inter alia, provides
shall be measured to decide the appointments, re-
reassurance to the Board on the existence of an
appointments of directors. The details of annual Board
effective internal control environment.
Evaluation process for Directors have been provided in
the Board’s Report. (a) T
he terms of reference of the Committee are briefly
described below:
Following are the major criteria applied for performance
evaluation — 1. versight of the Company’s financial reporting
O
process and the disclosure of its financial
1. ttendance and contribution at Board and
A
information.
Committee meetings and application of his/her
expertise, leadership qualities and knowledge to 2. ecommending to the Board, the appointment,
R
give overall strategic direction for enhancing the re-appointment and, if required, the
shareholder value. replacement or removal of the statutory
auditor and the fixation of audit fees.
2. is/her ability to create a performance culture that
H
drives value creation and a high quality of debate 3. eviewing and monitoring the
R auditor’s
with robust and probing discussions. independence and performance.
57
annual report 2015
4. ecommending to the Board, the appointment

R as special invitees. The cost auditors attend the
and remuneration of Cost Auditor. Audit Committee Meeting where cost audit reports
5. Approval of payment to statutory auditors for are discussed. The Company Secretary of the
any other services rendered by the statutory Company acts as the Secretary to the Committee.
auditors During the financial year ended 31st December
6. eviewing, with the management, the annual
R 2015 total of five (5) Audit Committee meetings
financial statements and quarterly financial were held on 25th February 2015, 14th May 2015,
statements 29th July 2015, 17th August 2015 and 5th November
7. eviewing with the management, performance
R 2015. The Attendance of each member of the
of internal auditors and adequacy of the internal Committee is given below:
control systems.
Name Designation No. of No. of
8. eviewing the adequacy of internal audit
R Meetings Meetings
function, if any, including the structure of held attended
the internal audit department, staffing and Mr. Uday Khanna Chairman 5 5
frequency of internal audit. Mr. S. M. Datta Member 5 5
9. iscussing with internal auditors any significant
D Mr. R. Gopalakrishnan Member 5 4
findings and follow-up thereon. Mr. Ralph Hewins Member 5 4
10. R
eviewing the findings of any internal
investigations by the internal auditors into (B) Nomination and Remuneration Committee
matters where there is suspected fraud or In terms of Section 178(1) of the Companies Act,
irregularity or a failure of internal control 2013 and Regulation 19 of SEBI Listing Obligation
systems of a material nature and reporting and Disclosure Requirement), Regulation, 2015, the
the matter to the Board. Nomination and Remuneration Committee (“NRC”).
11. D
iscussion with statutory auditors before the
audit commences. The role of Nomination and Remuneration Committee
in brief is as follows:
12. T
o look into the reasons for substantial defaults
in the payment to the depositors, debenture 1. Identify persons who are qualified to become
holders, shareholders (in case of non-payment directors and who may be appointed in senior
of declared dividends) and creditors. management in accordance with the criteria laid
13. T
o review the functioning of the Whistle Blower down, recommend to the Board their appointment/
mechanism. removal.
14. A
pproval or any subsequent modification of 2. Carry out evaluation of every director’s performance.
transactions of the Company with related 3. Devising a policy on Board diversity.
parties.
4. ormulate criteria for determining qualifications,
F
15. T
o evaluate internal financial controls and risk
positive attributes and independence of a director
managements systems.
and recommend to the Board a policy relating to
16. Approval of appointment of CFO.
the remuneration for the directors, key managerial
(b) T
he Audit Committee comprises of four (4) personnel and other employees.
members viz. Mr. S. M. Datta, Mr. R. Gopalakrishnan,
NRC comprises of the following members viz.
Mr. Uday Khanna and Mr. Ralph Hewins. Mr. Uday
Mr. R. Gopalakrishnan, Independent Director;
Khanna, is the Chairman of the Committee.
Mr. S. M. Datta, Independent Director; Mr. Ralph Hewins
(c) T
he meetings of Audit Committee are also Non-Executive Director; and Mr. Peter Weidner, Non-
attended by Managing Director, CFO, Managing Executive Director. The Nomination and Remuneration
Counsel, Statutory Auditors and Internal Auditors Committee is chaired by Mr. R. Gopalakrishnan.
58
annual report 2015
The Company has adopted Nomination and Directors other than payment of sitting fees to them
Remuneration Policy.The Nomination and Remuneration for attending Board and Committee meetings and
Policy is in compliance with all applicable provisions of Commission as approved by members for their
the Companies Act, 2013, particularly Section 178 read invaluable services to the Company.
together with the applicable rules thereto and Regulation
19(4) of SEBI (Listing Obligation and Disclosure (b) Details of Remuneration paid to Directors
Requirement), Regulation, 2015. The Policy is designed The Executive Directors are paid Salary and
to attract and retain best talent, who has the potential Performance Linked Bonus, which is calculated,
to drive the growth and enhance shareholder value, it is based on pre-determined parameters of performance.
essential to adopt comprehensive compensation policy The Independent Directors are paid sitting fees and
which is in synchronisation with the industry trends. The commission as determined by the Board from time to
Remuneration Policy is annexed to the Board’s Report. time. Other Non-Executive Directors do not receive any
remuneration including sitting fees. Sitting fees to the
The Company has also adopted a Board Diversity Policy
Independent Directors is being paid as permissible under
which is based on the principle that the Company’s
Rule 4 of the Companies (Appointment & Remuneration
Board of Directors should have a balance of skills,
of Managerial Personnel) Rules, 2014.
experience and diversity of perspectives appropriate to
the Company’s business. The Company recognizes that
Criteria of making payments to Non-Executive Directors
a Board composed of appropriately qualified people with
is disclosed in the Policy-Payment Non-Executive
a broad spectrum of experience relevant to the business
Director and the same is available on http://www.castrol.
is important for effective corporate governance and
com/en_in/india/about-us/financials/other-financial-
sustained commercial success of the Company. The
documents-policies.html
Company aims to achieve a sustainable and balanced
development by building a diverse and inclusive culture.
Details of remuneration of Executive Directors for
The Board Diversity Policy is annexed to the Board’s
the financial year ended 31st December 2015 is as
Report.
under:
Four (4) Committee meetings were held during the year (Rs.)
ended 31st December 2015 on 25th February 2015, Name of Director Basic Perquisites Retiral Performance Total
Salary Benefits based
29th July 2015, 17th August 2015 and 5th November 2015. incentives**
The Chairperson of the Committee attended the Annual Mr. Ravi Kirpalani 1,12,42,769 96,54,651 23,25,871 50,04,604 2,49,94,229
General Meeting.
Ms. Rashmi Joshi 96,54,651 14,54,503 10,63,297 21,08,921 1,42,81,372
The details of attendance of each member of the Mr. Jayanta Chatterjee 96,06,040 11,98,915 12,03,168 22,84,186 1,42,92,309
Committee is as follows: Mr. Omer Dormen* 97,10,717 14,06,165 3,62,622 0 1,14,79,504
Name of Director Designation No. of No. of * w.e.f. – 12th October 2015

Meetings Meetings ** Performance based incentive for year 2014 paid in the year 2015.
held attended Notes-
Mr. R. Gopalakrishnan Chairman 4 3 a. The key parameters for the performance based pay/ variable component of
remuneration availed by the directors are considered by the Board of Directors
Mr. S. M. Datta Member 4 4 based on the recommendations of the Nomination and Remuneration
Mr. Ralph Hewins Member 4 3 Committee. Variable pay/Performance Linked Bonus (PLB) is dependent on
short-term performance against the annual plan. Total overall Bonus is based
Mr. Peter Weidner Member 4 4
on performance relative to measures and targets reflected in the annual plan,
which in turn reflects Company’s strategy.
Remuneration of Directors b. The agreement with Whole-time Director/Managing Director is normally done
for 3 to 5 years. Further, either party to the agreement is entitled to terminate
(a)
Pecuniary Relationship of Non-Executive the Agreement by giving not less than six months’ notice in writing to the other
party.
Directors
c. Presently, the Company does not have a scheme for grant of stock options
The Company has no pecuniary relationship or
to its employees. However, the management staff is entitled to the Shares of
transaction with its Non-Executive & Independent BP plc under the BP Share-match scheme as in force.
59
annual report 2015
Details of remuneration of Non-Executive Directors for Joshi and Mr. Jayanta Chatterjee as members.
the financial year ended 31st December 2015: The Company Secretary acts as the Secretary
(Rs.)
to the Committee. Mr. Ravi Kirpalani ceased
to be a member of the Committee with effect
Name of Director Commission Sitting Fees Total
from 5th November 2015. Mr. Omer Dormen and
Mr. S. M. Datta 10,00,000 9,50,000 19,50,000
Mr. Jayanta Chatterjee were appointed as members of
Mr. R. Gopalakrishnan 8,00,000 7,50,000 15,50,000
the Committee with effect from 6th November 2015.
Mr. Uday Khanna 8,00,000 5,50,000 13,50,000
During the year ended 31st December 2015 Four
(4) meetings of the Committee were held on
(C) Stakeholders’ Relationship Committee
25th February 2015, 29th July 2015, 17th August 2015
(a) S
takeholders’ Relationship Committee has been and 5th November 2015.
constituted to monitor and review investors’
grievances. It comprises of Mr. S. M. Datta, The details of attendance of each member of the
Mr. Omer Dormen and Ms. Rashmi Joshi. Committee is as follows:
Mr. S. M. Datta is the Chairman of the Committee. Name of Director Designation No. of No. of
Mr. Ravi Kirpalani ceased to be a member of the Meetings Meetings
held attended
Committee and Mr. Omer Dormen was appointed
Mr. R. Goplakrishnan Chairman 4 3
as a member of the Committee with effect from
Mr. Ravi Kirpalani Member 4 4
6th November 2015.
Mr. Sashi Mukundan Member 4 3
(b) M
r. Sandeep Deshmukh, Company Secretary, is the Ms. Rashmi Joshi Member 4 4
Compliance Officer for redressal of Shareholder’s/ Mr. Jayanta Chatterjee Member 4 0
Investor’s complaints. Mr. Omer Dormen Member 4 0
During the year ended 31st December 2015 Four (4) Please refer to the Board’s Report and its annexures
Committee meetings were held on 25th February 2015, for details regarding CSR activities and related details.
14th May 2015 29th July 2015 and 5th November 2015
(E) Risk Management Committee
and all members attended the Meeting.
The Risk Management Committee comprises of
(c) to (e) Details of Shareholders’ / Investors’ Complaints. Mr. Omer Dormen, as the Chairman of the Committee
During the Financial Year ended 31st December 2015, and other members viz. Ms. Rashmi Joshi, Director,
20 complaints were received from the shareholders. All Mr. Jayanta Chatterjee, Director, Mr. Pawan Sabharwal
except three complaints have been redressed to the and Mr. Siddharth Shetty. Mr. Ravi Kirpalani ceased
satisfaction of the shareholders as on 31st December to be a member of the Committee with effect from
2015. The complaints relate to non-receipt of annual 5th November 2015. Mr. Omer Dormen was appointed
report, dividend, share transfers, etc. as Chairman of the Committee with effect from
6th November 2015. The Company Secretary acts as the
Opening as on 1st January 2015 0 Secretary to the Committee.
Received During the year 20 During the year ended 31st December 2015
Resolved during 17 Four (4) meetings of the Committee were held
Closing 3 on 11th February 2015, 4th May 2015, 21st July 2015 and
15th October 2015.
(D)
Corporate Social Responsibility (CSR)
Committee Internal Controls and Risk Management
The Corporate Social Responsibility Committee The Company has laid down internal financial
comprises of Mr. R. Gopalakrishnan as Chairman, controls framework through a combination of Entity level
Mr. Sashi Mukundan, Mr. Omer Dormen, Ms. Rashmi controls, Process level controls and IT General controls
60
annual report 2015
inter-alia to ensure orderly and efficient conduct of The Code, covers health, safety and the environment;
business, including adherence to the Company’s our people, our partners and suppliers, governments
policies and procedures, accuracy and completeness and communities; and protecting Company’s assets.
of accounting records and timely preparation and Each section contains key principles, basic rules and
reporting of reliable financial statements/ information, advice on where to find further information. A new
safeguarding of assets, prevention and detection of section, ‘Living our Code’, is designed to help people
frauds and errors. make decisions when faced with dilemmas where there
are no clear rules to follow. The Code also includes key
The evaluation of these internal financial controls was
points from new BP standards related to anti-bribery
done through the internal audit process, established
and corruption, anti-money laundering, competition and
within the Company and also through appointing
antitrust law and trade sanctions. BP Code of Conduct
professional firm to carry out such tests by way of
is available on Company’s website at http://www.castrol.
systematic annual internal audit program. Based on
com/content/dam/castrolcountry/en_in/About%20Us/
the review of these reported evaluations, the directors
Financials/Code-of-Conduct.pdf
confirm that, for the preparation of financial accounts
for the year ended December 2015, the applicable
5. General Body Meetings
Accounting Standards have been followed and the
design of the internal financial controls were found (a) and (b) Location and time where last three AGMs
to be adequate & that no significant deficiencies were were held
noticed. Location Date Time Special
Resolution
During the year, on the recommendation of the Audit
Committee, the Board of Directors appointed KPMG as 1. Birla Matushri : 14.05.2015 3.30 p.m. Remuneration to
Sabhagar, Marine Non-Executive
the Internal Auditor of the Company.
Lines, Directors in
Mumbai 400 020 aggregate not
4. Affirmation and Disclosure exceeding 1% of
the Net Profit.
• here were no materially financial or commercial
T
transaction, between the Company and members 2. Birla Matushri : 13.05.2014 3.30 p.m. For appointments
of the Management Committee that may have a Sabhagar, Marine of Mr. Ravi
Lines, Kirpalani as
potential conflict with the interest of the Company Mumbai 400 020 Managing Director
at large. and Ms. Rashmi
Joshi as a Whole-
• All details relating to financial and commercial time Director of
transactions where Directors may have a pecuniary the Company.
interest are provided to the Board and the interested
3. Y. B. Chavan 26.04.2013 3.30 p.m. For appointment of
Directors neither participate in the discussion nor Centre, General Mr. Bijay Kamath
vote on such matters. Jagannath as a Whole-time
Bhosale Marg, Director of the
Next to Sachivalya Company.
Code of Conduct
Gymkhana,
The Company is governed by BP Code of Conduct Mumbai 400 021
which sets the standard we all work to. It is aligned with
our values, group standards and legal requirements, (c) Resolutions passed through postal ballots
and clarifies the ethics and compliance expectations uring the year, a Special Resolution for
D
for everyone who works with the Company. The Code appointment of Mr. Jayanta Chatterjee as the
reflects a value-based approach, where rules are not Wholetime Director designated as Director –
stated explicitly and everyday business decisions will be Supply Chain, of the Company with effect from
guided by our values. The Code was simplified during 30th October 2014 was passed by the Shareholders
the last year for ease of understanding and application. of the Company through Postal Ballot.
61
annual report 2015
Details of Voting pattern were as under: (c) T

hese results are also made available on the
Description of Resolution Votes in favour of Votes against website of the Company http://www.castrol.com/
the resolution the resolution
en_in/india/about-us/financials/financial-results.
No. of % of Votes No. of % of Valid
Votes in favour Votes Votes
html. The website also displays vital information
against relating to the Company and its performance,
Appointment of
Mr. Jayanta Chatterjee as
39,90,91,014 99.96 1,55,159 0.04 official press releases and presentation to analysts.
the Wholetime Director
designated as Director- (d) T
he Quarterly Results, Shareholding Pattern and
Supply Chain, of the
Company with effect from all other corporate communication to the Stock
30th October 2014
Exchanges are filed through NSE Electronic
(d)
The Company appointed Mr. B. V. Dholakia of Application Processing System (NEAPS) and BSE
Dholakia & Associates, LLP, Practising Company Listing Centre, for dissemination on their respective
Secretary, as the Scrutinizer for conducting the websites.
Postal Ballot process in a fair and transparent (e) N
o presentation has been made to institutional
manner. investors or to the analysts during the year under
(e)
There is no proposal to conduct any business review.
through Postal Ballot.
(f) During the conduct of the Postal Ballot, the Company 7. General Shareholder Information
had in terms of Clause 35B of the Listing Agreement (a) Annual General Meeting
provided e-voting facility to its shareholders to cast
their votes electronically through the NSDL e-voting Date : Thursday, 5th May 2016
platform. Postal ballot forms and business reply
Time 3.30 p.m.
envelopes were sent to shareholders to enable them
to cast their vote in writing on the postal ballot. The Venue : Birla Matushri Sabhagar, Marine Lines,
Company also published a notice in the newspaper Mumbai 400 020
declaring the details of completion of dispatch
and other requirements as mandated under the Book Closure Dates: Friday, 29th April 2016 to
Companies Act, 2013 and applicable Rules. The Thursday, 5th May 2016 (both days inclusive). The said
scrutinizer submitted his report to the Chairman, book closure is for payment of dividend.
after completion of the scrutiny and the results of
(b) Financial Year:- Calendar year 1st January to 31st
voting by posting ballot were then announced by
December. The Company has obtained the approval
the Chairman/ Authorised offices. The voting results
from the Company Law Board vide Order No.19 of
were sent to the Stock Exchanges and displayed
2015 dated 23rd April 2015 to follow different financial
on the Company’s website. The date of declaration
i.e. other than April to March financial year.
of the results by the Company is deemed to be the
date of passing of the resolutions. Tentative calendar for financial year ending
31st December 2016
6. Means of Communication to Shareholders The tentative dates of meeting of Board of Directors
The Company regularly interacts with shareholders for consideration of quarterly financial results for the
through multiple channels of communication such financial year ending 31st December, 2016 are as
as results announcement, annual report, media follows:
releases, Company’s website and subject specific
First Quarter Results May 2016
communications.
Second Quarter and Half Yearly Result July 2016
(a) and (b) The quarterly, half yearly and annual results
Third Qaurter Results October 2016
of the Company’s performance are published in leading
Fourth Quarter and Annual Results February 2017
newspapers such as Business Standard and Sakal.
62
annual report 2015
(c) Dividend Payment Date: Payment of Listing Fees

he Board of Directors at their meeting held on
T Annual listing fee for the year 2015-16 has been paid by
24th February 2016, recommended a Final Dividend the Company to BSE and NSE.
of Rs. 5.00 per equity share of face value of Rs. 5/-
each, for the financial year ended 31st December (e) Stock Code
2015. Together with the Interim Dividend of
BSE Limited 500870
Rs. 4.00 per equity share paid on 20th August 2015,
the total dividend for the year works out to Rs. 9.00 National Stock Exchange of India Limited CASTROLIND
per equity share of face value of Rs. 5/- each. Final
Dividend, if approved by Members, will be paid on or ISIN INE172A01027
after 25th May 2016.

(f) Market Price Data
Due Dates for transfer of Unclaimed Dividend to
Monthly high and low quotation of shares traded on BSE
IEPF:
and NSE during the Financial Year 2015
Year Dividend Date of Due for
Declaration transfer to IEPF MONTHS BSE NSE
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

2008 Final 27.09.2009 01.06.2016
January 2015 530.75 471.45 529.95 472.00
2009 Interim 27.07.2009 30.08.2016
February 2015 501.45 460.00 501.85 460.00
2009 Final 30.04.2010 03.06.2017
March 2015 517.90 458.30 518.35 459.35
2010 Interim 15.07.2010 18.08.2017
April 2015 492.00 438.50 489.00 439.00
2010 Final 27.06.2011 31.07.2018 May 2015 491.10 440.45 491.80 439.70
2011 Interim 11.08.2011 15.09.2018 June 2015 482.40 416.80 481.95 415.35
2011 Final 16.04.2012 20.05.2019 July 2015 513.15 427.90 513.80 427.15
2012 Interim 16.07.2012 19.08.2019 August 2015 508.40 429.00 508.65 429.15
September 2015 446.95 415.50 447.25 415.00
2012 Final 26.04.2013 30.05.2020
October 2015 475.30 431.25 474.35 432.50
2013 Interim 01.08.2013 03.10.2020
November 2015 464.30 426.80 464.35 426.25
2013 Final 13.05.2014 15.06.2021
December 2015 456.50 415.00 455.95 415.00
2014 Interim 31.07.2014 02.09.2021
2014 Final 14.05.2015 16.06.2022 (g) Stock Performance in comparison to the BSE
2015 Interim 29.07.2015 30.08.2022
Sensex, and NSE Nifty
120
110
100
(d) Listing 90
80
Listing on Stock Exchanges — Equity Shares
70
BSE Limited (BSE) 60
50
Phiroze Jeejeebhoy Towers,
40
Dalal Street, Mumbai 400 001 30
20
National Stock Exchange of India Limited (NSE) 10
0
‘‘Exchange Plaza”, Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bandra-Kurla Complex, Months - Year 2015
Castrol BSE Sensex
Bandra (E), Mumbai 400 051
63
annual report 2015
120
(j) Distribution of shareholding by size class as on
110 31st December 2015
100
90 No. of No. of No. of % of
80
Shares held shares shareholders shareholders
70 Upto 500 94,76,674 77,385 79.32
60
501-1000 59,06,749 7,854 8.05
50
40
1001-2000 74,98,515 5,059 5.18
30 2001-3000 50,65,568 2,046 2.10
20 3001-4000 4,680,936 1,312 1.34
10
4001-5000 35,64,910 784 0.80
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5001-10000 1,39,41,096 2,005 2.05
Months - Year 2015
10001 and above 44,44,26,744 1,130 1.16
Castrol Nifty
Total 49,45,61,192 97,573 100.00
Distribution of shareholding by ownership as on

(h) The Registrar and Share Transfer Agents of the 31st December 2015
Company is TSR Darashaw Limited. Sr. Category No. of No. of % of
Address for Correspondence (Registrar and Share No. Shareholders Shares the total
held Paid up
Transfer Agent) Capital
TSR Darashaw Limited i Foreign Company 1 5,41,896 0.11
6-10 Haji Moosa Patrawala Industrial Estate, ii Foreign 1 35,07,49,820 70.92
20 Dr. E. Moses Road, Mahalakshmi, Collaborator
Mumbai 400 011 iii Foreign 93 3,10,38,602 6.28
Institutional
Tel: +91-22-6656 8484 Investors
Fax: +91-22-6656 8494 iv Overseas Bodies 2 4,000 0.00
Email: [email protected] Corporate
v Non-Resident 1,744 17,32,619 0.35
Individuals
(i) Share Transfer System
vi Public Financial 13 2,7268,346 5.51
All Shares sent for transfer in the physical form are Institutions
registered by the Registrar and Share Transfer Agents vii Indian Mutual 69 91,98,398 1.86
as per the terms of the Listing Agreements. Request for Funds
viii (a) Nationalised 22 10,06,489 0.20
transfer and transmissions are approved by the Share
Banks
Transfer Agent under the authority granted by the Board. (b) Other Banks 47 92,045 0.02
Shares under objection are returned within two weeks. ix Domestic 1,620 74,05,923 1.50
Companies
All requests for dematerialisation of shares are
x Resident 93,958 6,54,93,478 13.24
processed and the confirmation is given to the respective Individuals
depositories i.e. National Securities Depository Limited xi Directors & 3 29,036 0.01
(NSDL) and Central Depository Services Limited Relatives
(CDSL) within 15 days. Total 97,573 49,45,61,192 100.00
(k) As on 31st December 2015, about 98.21% of the

Paid-up Share Capital has been dematerialised. Trading
in Equity Shares of the Company is permitted only in
dematerialised form. Promoter’s holding is held in
dematerialised form.
64
annual report 2015
(l) Outstanding GDRs/ADRs/Warrants or any (d) The Company has complied with all mandatory items
convertible instruments, conversion date and of the clause 49 of the Listing Agreement as applicable
likely impact on equity till 30th November 2015 and Listing Regulations from
The Company has not issued any GDRs/ADRs/ 1-12-2015 onwards. The Company has executed the
Warrants or any convertible instruments. fresh agreement with the BSE and NSE as required
under the newly enacted Listing Regulation.
(m) Plant Locations
The Company’s plants are located at Patalganga in 9. Non-Mandatory Requirements
Maharashtra; Paharpur in West Bengal and at Silvassa A. The Board
(Union Territory).
The Chairman of the Board does not maintain a
(n) Address for Correspondence (other than Chairman’s office at the Company’s expense. However,
queries relating to shares) the Company from time to time reimburses the expenses
Castrol India Limited in relation to the Chairman’s office in connection with
Technopolis Knowledge Park, Mahakali Caves Road, performance of his duties as the Chairman of the
Andheri (East), Mumbai 400 093 Company.
B. Shareholder Rights – Half yearly results

8. Other Disclosures
As the Company’s half yearly results are published in
(a)
Disclosures on materially significant related
English newspapers having a circulation all over India
party transactions having potential conflict.
and in a Marathi newspaper (having a circulation in
In line with the requirements of the Companies Act, Mumbai), the same are not sent to the shareholders of
2013 and Equity Listing Agreement, your Company the Company but hosted on the website of the Company.
has formulated a Policy on Related Party Transactions
which is also available on Company’s website at http:// C. Audit Qualification
www.castrol.com/en_in/india/about-us/financials/other- There are no qualifications contained in the Audit Report.
financial-documents-policies.html. The Policy intends to
D. Separate Posts of Chairman and CEO/Managing
ensure that proper reporting, approval and disclosure
Director
processes are in place for all transactions between the
Company and Related Parties. There were no related The Posts of Chairman and Managing Director are
party transactions that may have potential conflict with separate.
the interest of the Company at large. E. Reporting of Internal Auditors
(b) Disclosure of Pending Cases/Instances of Non- The Internal Auditors of the Company report to the Audit
Compliance Committee and make detailed presentation at quarterly
There were no non-compliances by the Company and meetings.
no instances of penalties and strictures imposed on the
Web Links
Company by the Stock Exchanges or SEBI or any other
F. The Company has no subsidiary and hence there
statutory authority on any matter related to the capital
is no need to frame any policy for determining “material”
market during the last three years.
subsidiary.
(c) Whistle Blower Policy/Vigil Mechanism
G. The Company is not dealing in commodity and
The Company has a robust whistle-blower which also
hence disclosure relating to commodity price risks and
apply to all group of companies of the BP Group,
commodity hedging activities.
worldwide, which is called “Open Talk’’. The employees
are encouraged to raise any of their concerns by way of H. There is no Non-Compliance of any requirement of
whistle-blowing and the employees have access to the Corporate Governance Report of sub-para (2) to (10) of
Audit Committee Chairman. the Part C of Schedule V of the Listing Regulations.
65
annual report 2015
CODE OF CONDUCT DECLARATION

In accordance with Listing Regulations executed with the BSE Limited and the National Stock Exchange of India
Limited, I, Omer Dormen in my capacity as the Managing Director of the Company hereby confirm that all members
of the Board of Directors and Senior Management Personnel of the Company have affirmed their compliance for the
financial year 2015 with the Company’s Code of Conduct.
Omer Dormen
Managing Director
DIN: 07282001
Mumbai
Dated: 24th February, 2016
Auditors’ Certificate
To, Corporate Governance as stipulated in the provisions

The Members of Castrol India Limited as specified in Chapter IV of Securities and Exchange
Board of India (Listing Obligations and Disclosure
We have examined the compliance of conditions of Requirements) Regulations, 2015 pursuant to the Listing
corporate governance by Castrol India Limited, for the Agreement of the said Company with stock exchanges.
year ended on December 31, 2015 as stipulated in We further state that such compliance is neither an
Chapter IV of Securities and Exchange Board of India assurance as to the future viability of the Company nor
(Listing Obligations and Disclosure Requirements) the efficiency or effectiveness with which management
Regulations, 2015 pursuant to the Listing Agreement of has conducted the affairs of the Company.
the said Company with stock exchanges.
The compliance of conditions of corporate governance
is the responsibility of the management. Our examination For S R B C & Co. LLP
was limited to procedures and implementation thereof, Chartered Accountants
adopted by the Company for ensuring the compliance ICAI Firm Registration No. 324982E
of the Corporate Governance. It is neither an audit nor
an expression of opinion of the financial statements of per Dolphy D’souza
the Company. Partner
In our opinion and to the best of our information and Membership No.: 38730
according to the explanations given to us, we certify Place: Mumbai,
that the Company has complied with the conditions of Dated: 24th February, 2016
66
annual report 2015
CEO-CFO CERTIFICATE
To,
The Board of Directors Castrol India Limited,
We, the undersigned, in our respective capacities as (d) W

e have indicated, based on our most recent
Managing Director (Chief Executive Officer) and Director evaluation, wherever applicable, to the Auditors and
Finance (Chief Financial Officer) of Castrol India Limited Audit Committee:
(“the Company”), to the best of our knowledge and belief
certify that: (i) significant changes, if any, in the internal control
over financial reporting during the year;
(a) W
e have reviewed the financial statements and the
cash flow statement for the financial year ended (ii) s ignificant changes, if any, in the accounting
31st December 2015 and based on our knowledge policies made during the year and that the
and belief, we state that: same has been disclosed in the notes to the
financial statements; and
(i) these statements do not contain any materially
untrue statement or omit any material fact (iii) instances of significant fraud of which we have
or contain any statements that might be become aware and the involvement therein, if
misleading. any, of the management or an employee having
(ii) these statements together present a true and significant role in the Company’s internal
fair view of the Company’s affairs and are control system over financial reporting.
in compliance with the existing accounting
standards, applicable laws and regulations.
(b) W
e further state that to the best of our knowledge
and belief, there are no transactions entered into by
the Company during the year, which are fraudulent,
illegal or violative of the Company’s Code of
Conduct. On behalf of the Board of Directors
(c) W
e are responsible for establishing and maintaining
internal controls and for evaluating the effectiveness
of the same over the financial reporting of the Omer Dormen Rashmi Joshi
Company and have disclosed to the Auditors and
the Audit Committee, deficiencies in the design or
DIN: 06641898
operation of internal controls, if any, of which we are
aware and the steps we have taken or propose to Mumbai
take to rectify these deficiencies. 24th February 2016
67
annual report 2015 BUSINESS RESPONSIBILITY REPORT
Section A: General information about the Company

Sr. No. Particulars Information
1. Corporate Identity Number (CIN) of the Company L23200MH1979PLC021359
2. Name of the Company Castrol India Limited
3. Registered Address Technopolis Knowledge Park,
Mahakali Caves Road, Chakala,
Andheri (East), Mumbai–400 093.
4. Website www.castrol.co.in
5. E-mail id [email protected]
6. Financial Year Reported January 1, 2015 – December 31, 2015
7. Sector(s) that the Company is engaged in 2 7 1 0 0 0 . 6 1 – Lubricating oils
(industrial activity code-wise)
8. List three key products/services that the Company Lubricating oils
manufactures/provides (as in balance sheet):
9. Total number of locations where business activity is • N umber of International Locations (Provide
undertaken by the Company details of major 5): None
• Number of National Locations: 8
 Corporate Office – 1
 Regional Offices – 4
 Plants – 3
10. Markets served by the Company – Local/State/ National
National/International
Section B: Financial details of the Company

Sr. No. Particulars Information
1. Paid up Capital (INR) Rs. 247.28 crores
2. Total Turnover (INR) Rs. 3,285.3 crores
3. Total profit after taxes (INR) Rs. 615.26 crores
4. Total Spending on Corporate 1.47% (Rs. 10.48 crores)
Social Responsibility (CSR)
as percentage of profit after
tax (%)
5. List of activities in which CSR agenda rests on 4 main pillars of Investment
expenditure in 4 above has a. Eklavya (Rs. 3.31 crores): Skills development with a focus
been incurred: on technology targeting unorganized two-wheeler mechanics in
Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Mumbai and
Delhi. Total Mechanics trained in 2015: 2100
b. Ehtiyat (Road safety – Rs. 5.10 crores) – collaborating for safer
mobility for making Mumbai roads safer. The focus is on training on
defensive driving and first aid of public transport system drivers and
creating greater awareness among two-wheeler users in Mumbai.
c. Ekjut (Community Development - Rs. 1.07 crores) – as a responsible
corporate citizen working with local communities third party needs
assessment studies have been conducted at all plant locations.
Then activities are aligned with the ‘Swachh Bharat’ campaign
initiatives around improved sanitation to reduce open defecation
have been undertaken in Silvassa.
d. Ehsaas (Humanitarian Aid – Rs. 0.50 crores) – humanitarian aid for
relief for the flood- affected communities of Chennai and Cuddalore.
68
Section C: Other Details
1. Does the Company have any Subsidiary Company/Companies?
The Company does not have any Subsidiary Company.
2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company?

If yes, then indicate the number of such subsidiary company(s).
Not Applicable.
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with,
participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/
entities? [Less than 30%, 30-60%, More than 60%]
The Code of Conduct is applicable to all the business entities who do business with the Company.
The business associates however do not directly participate in Business Responsibility initiatives of the
Company.
Section D: BR Information
Details of Director/Directors responsible for BR
(a) Details of the Director/Directors responsible for implementation of the BR policy/policies:
Particulars Details
DIN Number 07282001 06641898
Name Mr. Omer Dormen Ms. Rashmi Joshi
Designation Managing Director Director – Finance
(b) Details of the BR head:

Sr. No. Particulars Details
1. DIN Number (if applicable) 07282001 06641898
2. Name Mr. Omer Dormen Ms. Rashmi Joshi
3. Designation Managing Director Director – Finance
4. Telephone number 91-22-66984100
5. E-mail id [email protected]
69
2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)

2a. Details of Compliance (Reply Y/N)
Sr. No. Questions P P P P P P P P P
1 2 3 4 5 6 7 8 9
Customer Responsibility
Equitable Development
Employees’ well-being
Stakeholders’ Welfare
Regulatory Policy
Business Ethics
Human Rights
Sustainability
Environment
1. Do you have a policy/policies for.... Y Y Y Y Y Y Y Y Y
2. Has the policy being formulated in consultation
Y Y Y Y Y Y Y Y Y
with the relevant stakeholders?
3. Does the policy conform to any national / Majority of the Company policies are aligned with
international standards? If yes, specify? BP group policies which incorporate the global
(50 words) best practices. The Company is an ISO 9001
Company and the manufacturing locations are
14001 and 18001 certified.
4. Has the policy being approved by the Board? Y Y Y Y Y Y Y Y Y
If yes, has it been signed by MD/Owner/CEO/ The Code of Conduct and the other frameworks
appropriate Board Director? adopted by the parent company BP, globally have
been adopted by the Company.
5. Does the Company have a specified committee
of the Board/Director/Official to oversee the Y Y Y Y Y Y Y Y Y
implementation of the policy?
6. Indicate the link for the policy to be http://www.castrol.com/content/dam/
viewed online? castrolcountry/en_in/About%20Us/Financials/
COC-BOARD-SR-MGT.pdf
7. Has the policy been formally communicated to all
Y Y Y Y Y Y Y Y Y
relevant internal and external stakeholders?
8. Does the Company have in-house structure to
Y Y Y Y Y Y Y Y Y
implement the policy/policies?
9. Does the Company have a grievance redressal
mechanism related to the policy/policies to address
Y Y Y Y Y Y Y Y Y
stakeholders’ grievances related to the policy/
policies?
10. Has the Company carried out independent audit/
evaluation of the working of this policy by an Y Y Y Y Y Y Y Y Y
internal or external agency?
70
2b. If answer to Sr. No. 1 against any principle, is ‘No’, please explain why:
(Tick up to 2 options)
Sr. No. Questions P P P P P P P P P
1 2 3 4 5 6 7 8 9
1. The Company has not understood the Principles NA NA NA NA NA NA NA NA NA
2. The Company is not at a stage where it finds
itself in a position to formulate and implement the NA NA NA NA NA NA NA NA NA
policies on specified principles
3. The Company does not have financial or
NA NA NA NA NA NA NA NA NA
manpower resources available for the task
4. It is planned to be done within next 6 months NA NA NA NA NA NA NA NA NA
5. It is planned to be done within next 1 year NA NA NA NA NA NA NA NA NA
6. Any other reason (please specify) NA NA NA NA NA NA NA NA NA
3. Governance related to BR
• Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess
the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year.
The Board of Directors of the Company assesses various initiatives forming part of the BR performance of
the Company at least once a year.
• Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this
report? How frequently it is published?
The Company publishes the information on BR in the Annual Report of the Company. The hyperlink to view
the Annual Report is: www.castrol.co.in
Section E: Principle-wise performance

Principle 1
Who the Code of Conduct applies to
Policy relating to ethics, bribery and corruption
The Code applies to every employee of your Company
Code of Conduct and the endeavor is to extend this Code to all its
Your Company’s Code of Conduct (also referred contractors and business partners. Where feasible,
to as the ‘Code’) outlines its commitment to ethical your Company seeks a contractual commitment from
standards and compliance with applicable local laws. its contractors and business partners to comply and
The Code is based on your Company’s values and work in line with the Code. Where your Company has
clarifies the ethics and compliance expectations for the right to do so, it may consider terminating contracts
everyone who works for the Company. The Code where a contractor has not complied with the obligations
includes sections on operating safely, responsibly or not renewing a contract where a contractor has acted
& reliably; its people; its business partners; the in a manner that is not consistent with your Company’s
governments and communities your Company works values or the Code. Your Company rigorously follows
with and its assets and financial integrity. The Code takes ethical business decisions, ensuring the actions of
into account key points from your Company’s internal all its employees, vendors, business partners and
standards related to anti-bribery and corruption, anti- customers are consistent with the law. Your Company
money laundering, competition and anti-trust law and collaborates closely with all stakeholders in order to
trade sanctions. Your Company conducts due diligence initiate and foster fair business practices in all spheres
on all its vendors and customers in accordance with of business to create and sustain an ethical and
these policies. transparent environment.
71
Certifying the Code Both our raw material sourcing and finished good
Each year, your Company engages its employees distribution are optimized with a view to reduce
in Code of Conduct certification. It is embedded in the distance travelled and environmental impact.
the annual performance contract of all employees to We have brought efficiency in our raw material bulk
comply with the Code and to create an environment tanker operations by increasing our tanker capacities
where people can confidently raise concerns without wherein our current fleet comprises of about 40%
fear of reprisal. higher capacity tankers and we have also reduced the
numbers of tankers by approximately 30%.
During the year there were no complaints from the
Your Company has taken various energy efficiency
Stakeholders.
measures at its plants, including:
Fostering a ‘speak up’ culture
• U
sing energy efficient technology like solar and
Your Company is committed to providing an open LED lights to reduce energy consumption.
environment where its employees, contractors and
• U
sing fuel additive with furnace oil to obtain
other stakeholders are comfortable speaking up
best fuel efficiency Boiler condensate recovery
whenever they have a question about our code of
and maintenance resulting in lower furnace oil
conduct or think that law, regulations or the Code, may
consumption.
have been breached. All stakeholders are encouraged
to raise concerns with your Company’s management • Optimizing power and utility operations.
team or BP’s global helpline. • R
ecycling treated water from effluent treatment plant
which is now being used for sanitation, resulting in
There was one Complaint of sexual harassment during
reduction of fresh water consumption.
the year, which was resolved appropriately by the duly
constituted Committee. • Improve boiler efficiency through optimized running
of blend operation, reduce power consumption
by improving power factor and reduce water
Principle 2
consumption through various initiatives.
Businesses should provide goods and services
We do source our packaging materials locally. To ensure
that are safe and contribute to sustainability
we develop these vendors to our quality requirements;
throughout their life cycle
we conduct regular quality checks and audits. The
Your Company has ISO certificates of 9001:2008, findings of these are communicated through learning
14001 and ISO/TS 16949:2009. Your Company opportunities for them to improve their overall systems.
has launched several products throughout 2015 in
commercial vehicles space, with superior products
and benefits to consumers. We launched Castrol Principle 3
VECTON RX Fuel Saver which provides upto 3% Businesses should promote the well-being of all
fuel saving to consumers. In a depleting natural employees
resources scenario, this product aims to bring in higher
The Company’s approach for managing its core asset
efficiency in commercial vehicles thus leading to
i.e. its people, is founded on the following beliefs:
lower fuel consumption. The product is endorsed
by Tata Motors for use in its Commercial Vehicles. 1. People’s safety is our first priority
Another product, Castrol VECTON with System 5 2. Castrol grows best by growing its own people
technology, had proven credentials of providing upto
3. Our people have potential – we need to develop it
20% longer drain in of highway vehicles. In passenger
car segment, we developed and introduced SAE 4. Diversity matters – so does inclusion
5W-30 Fuel Efficient oil for a major passenger car 5. We need the best talent – and need to meet the
manufacturer in India. expectations of the best talent.
72
In our constant endeavor to be a contemporaneous an attempt to adopt to lesson learned. The same
organisation, we review our policies and benchmark driving standards are used while dealing with
them against the best in class to ensure that your contractors engaged in transporting raw material
Company’s agenda on employee well-being and and finished goods. All permanent and contract
engagement is serviced effectively. Your Company employees are given safety training during the
gets feedback from its employees through an annual year.
survey conducted globally. The last survey indicated
that overall employee engagement score for your Your Company has been steadily progressing in
Company was in the top quartile indicating very implementing BP’s Global Operating Management
good engagement. Harmonious and cordial industrial System (OMS) to continuously improve the delivery
relations are prevalent in all the 3 plants. of safe, responsible and reliable operations. The
OMS has helped your Company to manage
The total headcount as on 31st December 2015, 763 four key elements of operating – People, Plant,
of which 97 are permanent women employees. Your Processes and Performance, effectively.
Company has 173 employees working on a contractual/
temporary basis. Your Company does not have any Your Company has been regularly providing annual
employees with permanent disability. There is workers’ preventive health checks for all employees at its
trade union active mainly in plants and approximately own cost. Further, to enable employees manage
25% of permanent employees are members of this work-life balance and related stress, if any,
trade union. your Company has taken several initiatives,
including:
In summary, your Company’s people agenda is focused
• mployee Well-being Program: Employee
E
on the following principles:
Well-being Program is a personal, confidential
1. Health & Safety: HSSE (Health, Safety, Security and professional counseling service for
and Environment) is at the heart of everything that employees and their family members provided
your Company does and is a key enabler of its by professional consultants through telephone,
business strategy. Your Company is committed email, face to face in English and in Regional
to the goal of ‘No accidents, no injury to people languages provided 24 x 7 x 365.
and no damage to the environment’. Our HSSE
strategy is designed around following three key • gile Working: A core component of your
A
elements: Company’s Diversity and Inclusion ambition,
agile working encompasses a wide range
• Having safe and healthy employees
of working options that enables employees
• Being a responsible operator to work flexibly at full potential. Part-time
• nsuring our products and services can be
E working, job-share, homeworking and flexible
trusted hours are some options granted under this
initiative.

Your Company empowers and thus expects
every employee to be a safety leader; our safety • areer Break and Maternity/Paternity
C
leadership pledge being – “I commit to lead all Leave: These benefits are available to
in safety, so that all employees go home safely employees of your Company irrespective of
every day. This is more important to us than the level that they operate at.
anything else that we do”. Road safety continues
to be a focus area for your Company and thus all • orkplace facilities: At all offices and
W
professional drivers undergo a rigorous defensive facilities of your Company, attention is paid
driver training and all road safety related incidents, to ergonomics to ensure a comfortable work
howsoever minor, are reported and investigated in environment.
73
Leadership
2. Development: Building both, • rogramme on Water, Sanitation and Hygiene
P
people and functional capability is one of the key including construction of toilets in Silvassa
elements of our investment in people. Last year, • rovision of immediate relief materials including
P
your Company took concrete steps to embed BP’s food baskets; utensils, tents, blankets to those
global leadership framework that requires leaders affected by floods in Tamil Nadu
to demonstrate capabilities in managing culture,
• ngaging with the public transport system
E
performance, talent and development. This was
drivers in Mumbai for defensive driving and first
done through webinars on People book, managing
aid responder trainings to make Mumbai roads
change and other key HR processes.
safer
Diversity and Inclusion: Our Business Resource
3.
• Scientific mapping of the needs and opportunities
Groups (BRGs) are grassroots, employee-initiated
across all Castrol manufacturing plant locations
and employee-driven groups and share a common
goal of making BP more inclusive through
delivering our Diversity & Inclusion (D&I) Ambition. Principle 5
All BRGs are run by employees, for employees, Businesses should respect and promote Human
supported by our D&I team and in some cases Rights
a global steering committee. Typically BRGs
focus on recruitment, retention, development and A formal Human Right’s policy was launched in 2014
enhancing BP’s brand. Eg of BRG in India is BP which applies to every employee. This policy contains
WIN (Women’s International Network). following seven key principles:
• The Company conducts its business in a manner

Principle 4
that respects the rights and dignity of all people,
Businesses should respect the interests of, and complying with all legal requirements.
be responsive towards all stakeholders, especially
those who are disadvantaged, vulnerable and • The Company respects internationally recognized
marginalized human rights, as set out in the International Bill
of Human Rights and the International Labour
Your Company recognizes the need and importance
Organization’s declaration on Fundamental
of a focused and inclusive social and economic
Principles and Rights at Work.
development, especially in the communities within which
we operate. We seek to build open and constructive • he Company recognizes its responsibility to
T
relationships with all our stakeholders. Towards this respect human rights and avoid complicity in
end your Company has identified and is responsive to human rights abuses, as stated in the UN Guiding
the needs of all its stakeholders, especially those who Principles on Business and Human Rights.
are disadvantaged, vulnerable and marginalized.
• he Company treats everyone who works for us,
T
Be it the unorganized, footloose two-wheeler
fairly and without discrimination. The employees,
mechanics seen operating from under the shade of
agency staff and suppliers are entitled to work in
trees with minimal tools or the communities it operates
an environment and under conditions that respect
within – especially those around its manufacturing
their rights and dignity.
plants in Silvassa, Patalganga and Paharpur or those
affected by natural disasters such as devastating • he Company respects freedom of association.
T
floods as in the case of parts of Tamil Nadu. As part Where its employees wish to be represented by
of this engagement your Company undertook several trade unions or works councils, the Company will
interventions in 2015, a few of which are listed below: cooperate in good faith with the bodies that its
• raining of two-wheeler technicians across parts of
T employees collectively choose to represent them
Tamil Nadu, Karnataka, Andhra Pradesh within the appropriate national legal frameworks.
74
• he Company respects the rights of people

T Initiatives to mitigate possible environmental risks and
in communities impacted by its activities. The reduce environment footprint are in place. All efforts
Company will seek to identify adverse human are taken to minimise energy consumption, water
rights impact and take appropriate steps to avoid, consumption and waste generation from manufacturing
minimize and/or mitigate them. operations viz. optimising the manufacturing batch
sizes, maximising the use of natural lighting, use of
• he Company will seek to make contractual
T
LED & energy efficient lighting, regular water monitoring
commitments with suppliers with a view to
and audits and many other environment management
encourage them to adhere to the same principles.
programs. Your Company is also committed to regularly
The policy applies to every employee. Your Company’s work on logistics process optimization to bring in
employees, contractors, suppliers and business efficiency and thereby reduce the carbon footprint
partners are entitled to work in an environment and along with reduction in road related safety risk. Your
under conditions that respect their rights and dignity. Company’s environment performance has also been
recognised and appreciated by various organisations.
Your Company has not received any show cause/legal
Principle 6 notices from CPCB/SPCB.
Business should respect, protect, and make efforts
to restore the environment Principle 7
Your Company has been fully committed to comply with Businesses, when engaged in influencing public
all applicable laws and requirements and maintains and regulatory policy, should do so in a responsible
highest standards of Occupational Health, Safety & manner
Environment. This is also spelt in the policy which
uniformly applies to every member of the workforce The Code of Conduct of your Company provides that
which includes employees and others who work for the Company does not directly take part in political
us (contractors, audit agencies, suppliers, NGOs, etc) activity, but it could engage in policy debate in various
during the time they are engaged in our work. Safety ways including lobbying, on subjects of legitimate
and Environmental Performance has been integral to concern to your Company, its staff and the communities
the business performance of your Company and it in which it operates. This is done in a highly regulated
continues to focus on the goal: ‘no accidents, no injury manner by authorised people.
to people and no damage to the environment’.
Your Company does not take part directly in party
Your Company ensures safe, systematic, reliable political activity. Your Company does not make any
and environmentally friendly operations through its political contributions – either in cash or in kind.
Operating Management System. All three blending Your Company aims to engage constructively with
plants of the Company are certified for the Environment Governments everywhere it operates, as well as to
Management System (ISO 14001:2004) and build constructive relationships with the media.
Occupational Health & Safety Management System
(OHSAS 18001: 2007). Your Company is also certified Your Company complies with all laws and regulations
for ISO 9001:2008 (Quality Management System that prohibit bribery and corruption, and ensure
Standard). Compliance to these systems has been that its suppliers, contractors and joint venture
certified by internationally recognized and accredited partners, if any do the same. All business partners who
bodies. Regular internal and external audits help to represent or act on behalf of your Company are asked
continually improve the process and make us more to comply with applicable bribery and corruption laws.
efficient. Your Company is also helping the environment Where appropriate, they are required to show that
by improving the fuel efficiency of the engines and they have appropriate programmes in place to prevent
hence leading to saving the precious fossil fuels. bribery.
75
Your Company is represented in many industry and • E

kjut: Community Development in areas of operation
business Associations which work in the relevant and presence
areas, including:
• Ehsaas: Humanitarian aid
• Federation of Indian Chambers of Commerce and
In 2015, in partnership with leading non-governmental
Industry (FICCI)
organizations (NGOs) your Company continued to
• Bombay Chamber of Commerce & Industry invest in build India’s social capital through its focus
• The Advertising Standards Council of India areas. Your Company has trained more than 2500
two-wheeler mechanics to ensure they do not lose out
• All India Management Association due to lack of skills in the face of constantly evolving
automotive technology. Your Company is committed
Principle 8 in aligning with the Clean India campaign by working
Businesses should support inclusive growth and towards eradicating open defecation in neighborhoods
equitable development of Silvassa; promoting safer driving practices among
the public transport system drivers in Mumbai; or
In line with its business strategy and growth aspirations,
incubating start-ups in one of the country’s leading
your Company recognizes the need and importance
incubators at IIM Ahmedabad. The gamut of activities
of a focused and inclusive social and economic
and partnerships has been wide yet focused.
development, especially in the communities within
which your Company operates. Your Company seek to With the objectives of creating a sustainable and
build open and constructive relationships with all the meaningful impact – one that is relevant to local needs
stakeholders. In furtherance of this, your Company’s and aligned with your Company’s agenda – all activities
Corporate Social Responsibility (CSR) Policy have been supported by third party monitoring and
articulates the vision and guidelines for achieving evaluation processes to ensure flagging of mid-course
these objectives. corrections that may be required and helping your
Company stay on track.
The Policy applies to all CSR activities of your Company
in India and is underpinned and guided at all times by With a social investment of more than INR 10 crore
the Code of Conduct. in 2015 alone, the CSR portfolio focuses on creating
an enabling environment with active participation of
CSR Mission and objectives: Castrol India Limited
local stakeholders, key to ensuring sustainability of
aspires to be a trusted partner, continuously engaging
interventions.
with our stakeholders. Through our CSR programmes
aimed at skill enhancement, safe mobility community
development and humanitarian aid, we strive to principle 9
contribute to a safer and better quality of life. Over Businesses should engage with and provide value
the last hundred years of the Company’s presence in to their customers and consumers in a responsible
India, CIL has conducted various activities working in manner
collaboration with key stakeholders in a responsible
and accountable manner. Your Company is in the business of meeting the needs
of its customers and consumers in an efficient and
In alignment with our core skills and vision of engaging compelling manner. The products are developed basis
with our stakeholders to contribute to a safer and better insights gained from regular consumer and customer
quality of life, your Company focuses on: interactions and structured research projects.
• E
klavya: Strengthening skills in the automotive and
Your Company continuously monitors the trends
industrial sectors, with a focus on technology
in automotive and manufacturing industries and
• Ehtiyat: Collaborating for safer mobility develops products and offers that create maximum
76
value for its consumers. In 2015 we launched a channel specific needs and offers. Your Company
product brand variant in Castrol VECTON which regularly tracks customer satisfaction scores in different
can provide upto 3% fuel saving to consumers. This channels and our distributors and takes conscious
product is endorsed by Tata Motors (The largest steps to improve the scores by taking appropriate
OEM in Commercial Vehicles space) for use in Tata actions.
Trucks. We have also launched Castrol CRB Turbo+ to
support the requirements of newer trucks and provide Regular audits are conducted at our plants to ensure
longer engine life to the engine of new trucks. We also product and formulation compliance. Your Company
continued its efforts in strengthening Castrol CRB has resolved 92.8% of quality complaints within 21
Mini-Truck brand and educating mini-truck consumers working days as against a Key Performance Indicators
on using the right engine oil for better protection (KPI) of 90%. Your Company has resolved 100% of the
against heat. quality incidents reported at Level G. Level G incidents
are product that causes a field issue or failure with
We have worked jointly with major commercial vehicle single customer. Your Company mentions information
OEM, which has dominant share of around 45% of such as product benefits to the consumer, technology
market share in trucks in India to create an efficient used in the product, etc. in addition to the mandatory
unique differentiated product for the Trucks. This 1st information on the product label.
ever OEM approved Fuel Efficient engine oil for truck
is designed to increase the fuel efficiency by 3%,
which will save substantial amounts of diesel as well
as operating costs for these trucks. Castrol Vecton RX
Fuel Saver has the potential to save almost Rs.40,000
per annum for a truck which travels about 100,000 kms
during a year. Castrol Vecton RX Fuel Saver 10W-40 On behalf of the Board of Directors
diesel engine oil was launched in June, 2015 on the
sidelines of the first day of the T1 Prima Truck racing
Championship at the Buddh International Circuit, Omer Dormen Rashmi Joshi
Greater Noida.) Managing Director Director – Finance &
Your Company has organized its business in different DIN: 06641898
channels — retail, franchise and independent Mumbai
workshop, industrial and heavy duty keeping in mind 24th February 2016
77
annual report 2015 INDEPENDENT AUDITORS’ REPORT
Independent Auditors’ Report
To,
The Members of Castrol India Limited
Report on 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, 2015, 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

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies
Act, 2013 (“the Act”) 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 control 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.
Auditor’s 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 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 financial control relevant to the Company’s preparation of the
financial statements that give a true and fair view in order to design audit procedures that are appropriate in
the circumstances but not for the purpose of expressing an opinion on whether the Company has in place
an adequate internal financial controls system over financial reporting and the effectiveness of such controls.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company’s 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, 2015, its profit, and its cash flows for the year ended on that date.
78
Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2015 (“the Order”) issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 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) In 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, 2015, and
taken on record by the Board of Directors, none of the directors is disqualified as on December 31,
2015, from being appointed as a director in terms of section 164 (2) of the Act;
(f) 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, 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.
For S R B C & CO LLP

ICAI Firm Registration Number: 324982E
per Dolphy D’Souza
Partner
Membership Number: 38730
Place : Mumbai
Date : February 24, 2016
79
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.
(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) 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 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) 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) 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 lubricating oils and greases, 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, employees’ state insurance, income-tax, sales-tax, wealth-tax,
service tax, customs duty, excise duty, value added tax, 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, employees’ state insurance, income-tax, wealth-tax, service tax,
sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues
were outstanding, at the year end, for a period of more than six months from the date they
became payable.
80
(c) According to the information and explanations given to us, there are no dues of income tax,
sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been
deposited on account of any dispute, except for the dues outstanding of value added tax as
stated below:
Name of the Nature of Dues Amount Period to which Forum where dispute is
Statute (Rs. Crores) amount relates pending
Local Sales Tax Act, Tax, Interest and Penalty 297.13 1987 to 2015 Assistant/Deputy/
Vat Act and Central Additional/Joint/Special,
Sales Tax Act Revisional Board/
Commissioner, Tribunal,
High Court.
Central Excise Act, Duty and Penalty 30.41 1987 to 2014 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 123.69 1997 to 2015 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
(d) According to the information and explanations given to us, the amount required to be transferred
to investor education and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund
within time.
(viii) 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.
(ix) 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 bank. The
Company has no outstanding dues in respect of financial institution or debenture holders.
(x) 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.
(xi) The Company did not have any term loans outstanding during the year.
(xii) 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.

ICAI Firm Registration Number: 324982E
per Dolphy D’Souza
Partner
Membership Number: 38730
Place : Mumbai
Date : February 24, 2016
81
annual report 2015 BALANCE SHEET
Balance Sheet as at December 31, 2015
Particulars Note No. As at As at

December 31, 2015 December 31, 2014
Rupees in Crores Rupees in Crores
EQUITY AND LIABILITIES
Shareholders' funds
Share capital 3 247.28 247.28
Reserves and surplus 4 328.33 249.50
575.61 496.78
Non-current liabilities
Other long-term liabilities 5 12.30 11.03
Long-term provisions 6 2.64 2.64
14.94 13.67
Current liabilities
Trade payables
Micro and small enterprises 7 4.13 6.12
Other than micro and small enterprises 7 545.26 532.13
Other current liabilities 7 148.50 137.66
Short-term provisions 6 373.18 305.79
1,071.07 981.70
TOTAL 1,661.62 1,492.15
ASSETS
Non-current assets
Fixed assets
Tangible assets 8 140.21 162.21
Intangible assets 8 8.63 9.86
Capital work-in-progress 36.41 15.67
Deferred tax assets (net) 9 49.92 61.81
Long-term loans and advances 10 93.24 85.03
328.41 334.58
Current assets
Inventories 11 304.58 365.47
Trade receivables 12 236.46 271.50
Cash and bank balances 13 696.50 431.45
Short-term loans and advances 10 88.97 86.52
Other current assets 14 6.70 2.63
1,333.21 1,157.57
TOTAL 1,661.62 1,492.15
Summary of significant accounting policies 2
The accompanying notes are an integral part of the financial statements.
As per our report of even date For and on behalf of Board of Directors
Chartered Accountants S. M. DATTA DIN No. : 00032812 Chairman
ICAI Firm Registration No. : 324982E
Omer Dormen DIN No. : 07282001 Managing Director
RASHMI Joshi DIN No. : 06641898 Director Finance (CFO)
Jayanta Chatterjee DIN No. : 06986918 Director Supply Chain
}
per Dolphy D’Souza SANDEEP Deshmukh R. Gopalakrishnan DIN No. : 00027858
Partner Company Secretary RALPH Hewins DIN No. : 02895504
Membership No. : 38730 ACS No. : 10946 SASHI Mukundan DIN No. : 02519725 Non-Executive Directors
UDAY Khanna DIN No. : 00079129
PETER Weidner DIN No. : 03620389
Place: Mumbai Place: Mumbai

February 24, 2016 February 24, 2016
82
annual report 2015 STATEMENT OF PROFIT AND LOSS
Statement of Profit and Loss for the year ended December 31, 2015
Particulars Note No. For the year ended For the year ended
Income
Revenue from operations (gross) 15 3,791.42 3,918.62
Less: Excise duty 493.39 526.29
Revenue from operations (net) 3,298.03 3,392.33

Other income 16.1 52.58 16.06
Total revenue 3,350.61 3,408.39
Expenses
Cost of materials consumed 17.1 1,388.38 1,760.46
Purchase of traded goods 17.2 197.60 160.23
(Increase)/decrease in inventories 17.3 14.81 16.81
Employee benefits expense 18 176.59 161.56
Other expenses 19 625.77 576.55
Total expenses 2,403.15 2,675.61
Earnings before interest, tax, depreciation and amortisation

(EBITDA) 947.46 732.78
Depreciation and amortisation expense 20 38.97 36.13
Finance costs 21 0.83 2.38
Interest income 16.2 43.29 32.04
Profit before tax 950.95 726.31

Tax expenses
Current tax 323.80 260.60
Deferred tax 11.89 (8.85)
Total tax expenses 335.69 251.75
Profit for the year 615.26 474.56
Nominal value of share (Rs.) 5.00 5.00

Earnings per equity share – Basic & Diluted (Rs.) 22 12.44 9.60
Summary of significant accounting policies 2
The accompanying notes are an integral part of the financial statements.
}

83
annual report 2015 CASH FLOW STATEMENT
Cash Flow Statement for the year ended December 31, 2015
Particulars As at As at
Cash Flow from Operating Activities
Net profit before tax 950.95 726.31
Adjustment to reconcile profit before tax to net cash flows:
Depreciation and amortisation expenses 38.97 36.13
Loss/(gain) on disposal/write off of fixed assets (net) 5.86 0.95
Provision for doubtful advances (net) 0.33 0.40
Provision for doubtful debts (net) 1.34 2.14
Unrealised foreign exchange (gain)/loss (0.09) 0.29
Finance costs 0.83 2.38
Interest income (43.29) (32.04)
Operating profit before working capital changes 954.90 736.56
Movements in working capital:
Decrease/(increase) in inventories 60.89 8.54
Decrease/(increase) in trade receivables 33.70 (36.40)
Decrease/(increase) in short-term loans & advances (2.45) (0.08)
Decrease/(increase) in long-term loans & advances (2.41) (0.69)
Increase/(decrease) in other long-term liabilities 1.27 0.20
Increase/(decrease) in other current liabilities 6.96 21.37
Increase/(decrease) in long-term provisions – 0.16
Increase/(decrease) in trade payables 11.14 65.42
Increase/(decrease) in short-term provisions 3.67 (0.50)
Cash generated from/(used in) operations 1,067.67 794.58
Direct taxes paid (net of refunds) (327.66) (246.98)
Net Cash Flow from/(used in) Operating Activities (A) 740.01 547.60
Cash Flow from Investing Activities

Purchase of fixed assets, including CWIP (37.88) (50.65)
Proceeds from sale of fixed assets 0.92 0.28
Maturity of margin deposits – 0.26
Interest received 39.22 36.37
Net Cash Flow from/(used in) Investing Activities (B) 2.26 (13.74)
84
annual report 2015 CASH FLOW STATEMENT
Cash Flow Statement for the year ended December 31, 2015 (contd.)
Cash Flow from Financing Activities
Dividend paid (395.64) (346.20)
Dividend tax paid (80.54) (58.84)
Dividend tax paid on account of capital reduction – (42.03)
Interest paid (1.04) (2.28)
Payment on account of capital reduction – (247.28)
Net Cash Flow from/(used in) Financing Activities (C) (477.22) (696.63)
Net Increase/(decrease) in Cash and Cash Equivalents (A+B+C) 265.05 (162.77)
Cash and cash equivalents at the beginning of the year 431.45 594.22
Cash and Cash Equivalents at the end of the year 696.50 431.45
Components of Cash and Cash Equivalents
Cash on hand 0.02 0.02
Balance with banks:
On current accounts 15.14 6.91
Deposits with original maturity of less than 3 months 33.31 188.60
Deposits with original maturity of more than 3 months but less than
12 months 638.04 226.54
Unclaimed dividend account [note (b) below] 9.99 9.38
Total Cash and Cash Equivalents (note 13) 696.50 431.45
Notes:
(a) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on
Cash Flow Statement as Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(b) The Company can utilise these balances only towards settlement of unclaimed dividend.
(c) Previous year’s figures have been regrouped wherever necessary.
}

85
annual report 2015 NOTES
Notes to the Financial Statements for the year ended December 31, 2015
1. Corporate information
Castrol India Limited (the ‘Company’) is a public limited company domiciled in India. The Company is engaged in the business of
manufacturing & marketing of Automotive, Non-Automotive Lubricants and related services.
1.1. Basis of preparation of accounts:

The Financial Statements of the Company have been prepared in accordance with the generally accepted accounting
principles in India (Indian GAAP). The Company has prepared these Financial Statements to comply in all material respects
with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the
Companies (Accounts) Rules, 2014. The Financial Statements have been prepared on an accrual basis and under the historical
cost convention.
The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year except as
explained below.
2. Significant accounting policies

a. Change in the accounting policy during the year
Useful lives / depreciation rates
Till the year ended December 31, 2014, depreciation rates prescribed under Schedule XIV were treated as minimum
rates and the Company was not allowed to charge depreciation at lower rates even if such lower rates were justified by
the estimated useful life of the asset. Schedule II to the Companies Act, 2013 prescribes useful lives for fixed assets
which, in many cases, are different from lives prescribed under the erstwhile Schedule XIV. However, Schedule II allows
companies to use higher/lower useful lives and residual values if such useful lives and residual values can be technically
supported and justification for difference is disclosed in the Financial Statements. Pursuant to provisions of Schedule II
of the Companies Act, 2013, becoming applicable to the Company w.e.f. January 1, 2015, the Company has reviewed
and where necessary, revised estimates of useful life of fixed assets, either as per the lives indicated by Schedule II or
assessed by management. Accordingly, an additional charge of Rs. 0.52 crore, being the carrying amount of fixed assets as
of January 1, 2015 with no remaining useful life (as revised) as of that date is recognised and included in the depreciation
and amortisation expenses. Had this change in the useful life of the fixed assets not been made, depreciation for the year
ended December 31, 2015 would have been lower by Rs. 1.62 crores and Profit Before Tax would have been higher by
Rs. 1.62 crores.
b. Use of estimates
The preparation of Financial Statements in conformity with Indian GAAP requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent
liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these
estimates are based upon management’s best knowledge of current events and actions, actual results could differ from
these estimates.
c. Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and impairment provision. The cost comprises of the
purchase price (Net of Cenvat and VAT credit wherever applicable) and any attributable cost of bringing the assets to its
working condition for its intended use.
d. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
e. Depreciation and amortisation
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful
lives estimated by the management. The Company has used the following useful life to provide depreciation on its
fixed assets.
86
2. Significant accounting policies (contd.)
Asset description Useful life as per management
Residential and office building 25 years
Factory building 30 years
Plant & machinery 10 years to 21 years
Moulds 4 years
Furniture & fixtures 10 years
Office equipments 5 years
Computers 4 years
Vehicles 4 years
Workshop equipments [refer note (i) below] 2 years to 4 years
Equipment and boards with dealers 3 years
Computer software 4 years
Due to application of Schedule II of the Companies Act, 2013 with effect from January 1, 2015 management has reassessed
the useful life based on the internal/external technical assessment of usage pattern of assets. The useful lives in respect of
the below assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013,
which are as under:
Assets description Present useful life Useful life under Schedule II
Residential and office buildings 25 years 60 years
Plant and machinery 10 years to 21 years 15 years
Computers and other IT assets 4 years 3 Years
(i) Workshop equipments provided against sales agreements are depreciated over the standard period of agreement.
(ii) Lease-hold land and Lease-hold improvements are being amortised on a straight-line basis over the period of lease.
(iii) Assets individually costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.
f. Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on
internal/external factor. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable
amount. The recoverable amount is the greater of an asset’s or cash generating unit’s net selling price and it’s value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and risks specific to the asset.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A
previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the
carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual
depreciation if there was no impairment.
g. Leases
Where the Company is lessee
Operating lease
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are
classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss
on a straight-line basis over the lease term.
87
h. Inventories
(i) Raw materials, packing materials, traded items and finished goods are valued at lower of weighted average cost
and net realisable value. Cost of finished goods includes material and packaging cost, proportion of manufacturing
overheads based on normal operating capacity and excise duty. Custom duty on stock lying in bonded warehouses
is included in cost. Cost of traded items includes cost of purchase and other cost incurred in bringing the inventories
to the present location and condition.
(ii) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.
(iii) Due allowances are made in respect of slow moving, non-moving and obsolete inventory based on estimates made
by management.
i. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured.
Sale of goods
Sales are recognised when goods are supplied and are recorded net of rebates and Sales Tax/Value Added Tax (VAT) and
inclusive of excise duty. The Company collects Sales Taxes and VAT on behalf of the Government and, therefore, these are
not economic benefits flowing to the Company. Hence, they are excluded from revenue.
Income from services
Income from service rendered is recognised based on the terms of the agreements as and when services are rendered
and are net of service tax (wherever applicable).
Interest
Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
j. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand, fixed deposits with
banks which are short term, highly liquid investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
k. Retirement and other employee benefits
Long term employee benefits
Defined contribution plans
Company’s contributions paid/payable during the year to Company’s Pension Fund, ESIC and Labour Welfare Fund, Medical
Insurance Benefits, Post Retiral Medical Benefit Scheme and Sharematch are recognised in the Statement of Profit and
Loss, when an employee rendered the related service.
If the contribution payable to the scheme for service received before the Balance Sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already paid.
If the contribution already paid exceeds the contribution due for services received before the Balance Sheet date, then
excess is recognised as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment
or a cash refund.
Defined benefit plans
Company’s liabilities towards gratuity, survivor protection (death benefit), pension benefit to past employees are actuarially
determined using the projected unit credit method, at each year-end, which considers each period of service as giving rise
88
to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services
in relation to benefits mentioned above are recognised on a straight-line basis over the average period until the amended
benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as
income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate
that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency
and terms of the Government Securities are consistent with the currency and estimated terms of the defined benefit
obligation.
Provident fund
The Company administers employees provident fund benefits through a trust, whereby amounts determined at a fixed
percentage of basic salaries of the employees are deposited to the trust every month. The benefit vests upon commencement
of the employment. The interest rate payable by the trust to the beneficiaries every year is notified by the government and
the Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and
the notified interest rate. The Company has obtained actuarial valuation of the plan as at the Balance Sheet date.
Retirement and other employee benefits
Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per
projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the Statement of Profit and
Loss and are not deferred.
Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and
Loss of the year in which the related service is rendered.
Voluntary Retirement Scheme expenses are fully charged to the Statement of Profit and Loss in the year in which
they accrue.
l. Foreign currency transactions
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction. All monetary assets
and liabilities as at the Balance Sheet date, are reinstated at the applicable exchange rates prevailing on that date. All
exchange differences arising on transactions, are charged to Statement of Profit and Loss. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date
of the transaction.
m. Derivative instruments
The Company uses foreign currency forward contracts to hedge foreign currency risk arising from future transactions in
respect of which firm commitments are made or which are highly probable forecast transactions. The Company designates
these forward contracts in a hedging relationship by applying the hedge accounting principles of AS-30, Financial
Instruments: Recognition and Measurement.
The Company uses foreign currency forward contracts as hedges of its exposure to foreign currency risk in forecasted
transactions and firm commitments.
In accordance with the recognition and measurement principles set out in AS-30, gains/losses on mark to market of
derivative financial instruments are recognised in the Statement of Profit and Loss. Gains and losses arising on account of
rollover/cancellation of forward contracts are recognised as income/expense of the period in which such rollover/cancellation
takes place.
n. Income taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet
date. Deferred tax is recognised at the Balance Sheet date, subject to the considerations of prudence, on timing differences,
89
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.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be realised.
The tax year for the Company being the year ending March 31, the provision for taxation for the year is aggregate of the
provision made for the three months ended on March 31, 2015 and the provision for the remaining period of nine months
ending on December 31, 2015. The provision for the remaining period of nine months has been arrived at by applying the
effective tax rate of the financial year 2015-16 to Profit Before Tax of the said period.
At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred
tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future
taxable income will be available against which such deferred tax assets can be realised.
o. Provisions
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that
an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
Provisions are not discounted to its present value and are determined based on management estimate required to settle
the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current
best estimates.
p. Segment reporting
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and
presenting the Financial Statements of the Company as a whole. The Company’s operating businesses are organised and
managed separately according to the nature of products and services provided. The analysis of geographical segments is
based on the areas in which major operating divisions of the Company operate. Revenues and expenses directly attributable
to segments are reported under each reportable segment. Revenue and expenses, which relate to the Company as a whole
and are not allocable to segments on a reasonable basis, have been included under “Unallocable”.
q. Earning per share
Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders
(after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue; bonus
element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the
purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.
r. Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation
that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A
contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot
be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the Financial
Statements.
s. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to
present earnings before interest expense, tax, depreciation and amortisation (EBITDA) as a separate line item on the face
of the Statement of the Profit and Loss. In its measurement, the Company doesn’t include depreciation, impairment and
amortisation expenses, finance costs, interest income and tax expenses.
90
3. Share capital
As at As at
Authorised shares
990,000,000 equity shares of Rs. 5/- each (2014 : 990,000,000 equity shares

of Rs. 5/- each) 495.00 495.00
495.00 495.00
Issued, subscribed and fully paid-up shares

494,561,192 equity shares of Rs. 5/- each (2014 : 494,561,192 equity shares

of Rs. 5/- each) 247.28 247.28
247.28 247.28
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting year:
Equity shares As at As at
No. of Rupees No. of Rupees
Shares in Crores Shares in Crores
Reduction in fully paid-up face value of equity shares [refer
note (i) below] – – – 247.28
Outstanding at the end of the year 494,561,192 247.28 494,561,192 247.28
Note (i) P
ursuant to the scheme of reduction of share capital u/s 100 to 105 of the Companies Act, 1956 as approved by
the shareholders and Hon’ble High Court of Bombay, the Company has reduced the fully paid-up face value of
equity shares from Rs. 10/- per share to Rs. 5/- per share effective January 20, 2014. Consequently, the Company
has paid Rs. 5/- per share on March 10, 2014 to the shareholders as per the record date of March 3, 2014.
b. Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 5/- per share (2014 : Rs. 5/- per share). Each
holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to
the approvals of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in
Indian Rupees.
During the year ended December 31, 2015, the amount of per share interim dividend recognised as distribution to
equity shareholders was Rs. 4.00 (2014 : Rs. 3.50). The amount of interim dividends distributed to equity shareholders is
Rs. 197.82 crores (2014 : Rs. 173.10 crores). In addition, the Company has also proposed a per share final dividend
recognised as distribution to equity shareholders of Rs. 5.00 (2014 : Rs. 4.00). The amount of final proposed dividend
distributed to equity shareholders is Rs. 247.28 crores (2014 : Rs. 197.82 crores). Both dividends aggregating to Rs. 9.00
per share (2014 : Rs. 7.50 per share).
In the event of the Company being liquidated, since the equity shares of the Company are fully paid-up, there would be
no additional liability on the shareholders of the Company. However, post settlement of the liabilities of the Company, the
surplus, if any, would be distributed amongst the shareholders in proportion to the number of shares held by each one
of them.
c. Equity shares in the Company held by its holding/ultimate holding company and/or their subsidiaries/associates
are as below:
As at As at
Castrol Limited, U.K. 350,749,820 (2014 : 350,749,820) equity shares of
Rs. 5/- each (2014 : Rs. 5/- each) fully paid (holding company) 175.37 175.37
BP Mauritius Limited 541,896 (2014 : 541,896) equity shares of Rs. 5/- each
(2014 : Rs. 5/- each) fully paid (subsidiary of ultimate holding company) 0.27 0.27
91
3. Share capital (contd.)
d. Aggregate number of bonus shares issued, for consideration other than cash during the period of five years
immediately preceding the reporting date:
As at As at
No. of Shares No. of Shares
Equity shares allotted as fully paid bonus shares by capitalisation of

general reserve 370,920,894 370,920,894
e. Details of shareholders holding more than 5% shares in the Company are as below:
As at As at
No. of % holding No. of % holding
Shares in the class Shares in the class
Equity shares of Rs. 5/- each (2014 : Rs. 5/- each) fully
paid-up Castrol Limited, U.K. 350,749,820 70.92% 350,749,820 70.92%
As per records of the Company, including its register of shareholders/members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
4. Reserves and surplus

As at As at
Capital reserve 13.62 13.62
General reserve
Balance as per the last financial statements 148.38 148.38
Closing balance 148.38 148.38
Surplus/(deficit) in the Statement of Profit and Loss
Balance as per last financial statements 87.50 94.86
Less: Appropriations
Interim dividend on equity shares

[amount per share Rs. 4.00 (2014 : Rs. 3.50)] 197.82 173.10
Tax on interim dividend 40.27 29.42
Proposed final dividend on equity shares

[amount per share Rs. 5.00 (2014 : Rs. 4.00)] 247.28 197.82
Tax on final dividend 50.34 39.55
Tax on final dividend – 2014 0.72 –
Tax on capital reduction payment – 42.03
Total appropriations 536.43 481.92
Net surplus in the Statement of Profit and Loss 166.33 87.50
Total reserves and surplus 328.33 249.50
92
5. Other long-term liabilities

As at As at
Employee benefits payable 12.24 11.02

Deposit from customers 0.06 0.01
12.30 11.03
6. Provisions
Long-term Short-term
As at As at As at As at
December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Rupees in Crores Rupees in Crores Rupees in Crores Rupees in Crores
Provision for employee benefits

Provision for company pension plan 1.36 1.41 0.15 0.15
Provision for leave benefits 1.28 1.23 0.11 0.13
2.64 2.64 0.26 0.28
Other provisions
Provision for tax (net of advance tax) – – 35.63 32.16
Provision for indirect taxes
[refer note (a) below] – – 38.06 34.37
Provision for litigations – – 1.61 1.61
Provision for proposed final dividend – – 247.28 197.82
Provision for tax on proposed final
dividend – – 50.34 39.55
– – 372.92 305.51
2.64 2.64 373.18 305.79
Notes:
(a) Movement in provision for indirect taxes:
Excise, customs Sales tax Excise, customs Sales tax
and service tax and VAT and service tax and VAT
Balance as at January 1 6.62 27.75 6.15 30.31

Addition during the year 0.86 4.94 0.61 1.93
Reversed/paid during the year 0.30 1.81 0.14 4.49
Balance as at December 31 7.18 30.88 6.62 27.75
Total 38.06 34.37
(b) The Company has made provisions for known litigation cases and pending assessments in respect of taxes, duties and
other levies, the outflow of which would depend on cessation of respective events.
93
7. Trade payables and other current liabilities

Current
As at As at
Trade payables
Micro and small enterprises 4.13 6.12
Other than micro and small enterprises 545.26 532.13
549.39 538.25
(Refer note 27 for details of dues to micro and small enterprises)
Other current liabilities
Capex payables 15.13 10.95
Interest accrued and dues on deposit from customers 0.44 0.65
Advance from customers 3.15 3.74
Unpaid dividend [refer note (a) below] 9.99 9.38
Deposit from customers 13.94 11.09
Forward contract payable 0.29 0.02
Statutory dues 70.10 76.32
Employee benefits payable 35.46 25.51
148.50 137.66
697.89 675.91
Note (a)
There are no amounts due for payment to the Investor Education & Protection fund under Section 125 of the Companies Act, 2013
as at the year end.
8. Tangible and Intangible assets

Rupees in Crores
Intangible
Tangible assets
assets
Freehold Leasehold Leasehold Building Plant & Furniture Office Motor Total Computer
land land Improvements [refer note (b)] machinery & fixture equipment vehicles tangible software
[refer note (a)] assets
Cost or valuation
As at January 1, 2014 3.92 0.92 31.49 49.07 175.87 56.49 12.30 0.88 330.94 5.63
Additions – – 7.17 1.79 28.61 16.28 1.08 – 54.93 11.04
Disposals – – 0.46 0.18 23.09 2.18 0.44 – 26.35 –
As at December 31, 2014 3.92 0.92 38.20 50.68 181.39 70.59 12.94 0.88 359.52 16.67
Additions – – – 3.55 12.99 4.09 0.28 – 20.91 1.61
Disposals – – – – 6.79 0.13 0.28 – 7.20 –
As at December 31, 2015 3.92 0.92 38.20 54.23 187.59 74.55 12.94 0.88 373.23 18.28
Depreciation
As at January 1, 2014 – 0.48 17.44 18.97 107.64 36.04 6.22 0.56 187.35 5.39
Charge for the year – 0.02 3.59 2.00 15.33 12.58 1.18 0.01 34.71 1.42
Disposals – – 0.03 0.05 22.44 2.14 0.40 – 25.06 –
As at December 31, 2014 – 0.50 21.00 20.92 100.53 46.48 7.00 0.57 197.00 6.81
Charge for the year – 0.03 – 6.24 14.62 12.06 3.18 – 36.13 2.84
Disposals – – – – 6.22 0.09 0.26 – 6.57 –
As at December 31, 2015 – 0.53 21.00 27.16 108.93 58.45 9.92 0.57 226.56 9.65
Impairment Loss
As at January 1, 2014 – – – – 0.06 – – 0.31 0.37 –
Disposals – – – – 0.06 – – – 0.06 –
Reclassification – – – – – – – – – –
As at December 31, 2014 – – – – – – – 0.31 0.31 –
Additions – – – 5.06 1.04 0.05 – – 6.15 –
Disposals – – – – – – – – – –
Reclassification – – – – – – – – – –
As at December 31, 2015 – – – 5.06 1.04 0.05 – 0.31 6.46 –
Net Block
As at December 31, 2014 3.92 0.42 17.20 29.76 80.86 24.11 5.94 – 162.21 9.86
As at December 31, 2015 3.92 0.39 17.20 22.01 77.62 16.05 3.02 – 140.21 8.63
Notes:
(a) Cost includes Rs. 0.49 crore (2014 : Rs. 0.49 crore) for which execution of land lease agreement in respect of plots in Mumbai is in progress.
(b) Comprises of cost of premises including shares of paid-up value of Rs. 0.01 crore (2014 : Rs. 0.01 crore) in co-operative societies.
94
9. Deferred tax assets (net)

Non-current
As at As at
Deferred tax asset

Impact of expenditure charged to the Statement of Profit and Loss in the
current year but allowed for tax purposes on payment basis 35.84 53.49
Provision for doubtful debts 10.22 7.86
Fixed assets: Impact of difference between tax depreciation and depreciation/
amortisation charge for the financial reporting 3.86 0.46
Deferred tax assets 49.92 61.81
10. Loans and advances

(Unsecured, considered good unless

otherwise stated) Non-current Current
Capital advances 2.45 3.65 – –

Security deposit 9.80 9.72 1.20 0.48
(A) 12.25 13.37 1.20 0.48

Advances recoverable in cash or kind 17.93 28.89 51.17 54.40
Less: Provision for doubtful advances 6.50 19.47 1.41 2.20
(B) 11.43 9.42 49.76 52.20

Other loans and advances
Advance income-tax (net of provisions) 32.59 25.26 – –
Forward contract receivable – – 0.03 0.56
Prepaid expenses 0.93 1.19 2.47 2.87
Loans to employees [refer note (a) below] 1.15 1.49 0.73 0.60
Balance with statutory/government authorities 34.89 34.30 34.78 29.81
(C) 69.56 62.24 38.01 33.84
Total (A+B+C) 93.24 85.03 88.97 86.52
Note (a) :
Loans to employees include loans and advances due by directors or other officers etc.
Non-current Current
Dues from executive director – 0.12 0.12 0.01

(As a part of service condition extended
to all its eligible employees)
95
11. Inventories (lower of cost and net realisable value)

Current
As at As at
Raw materials [includes stock in transit Rs. 6.26 crores

(2014 : Rs. 12.62 crores)] 130.20 168.61
Packing materials 1.91 6.49
Stores and consumables – 1.46
Finished goods 124.19 147.02
Traded goods [including stock in transit Rs. 7.86 crores

(2014 : Rs. 6.48 crores)] 48.28 41.89
304.58 365.47
12. Trade receivables

Current
As at As at
Unsecured, considered good unless stated otherwise
Outstanding for a period exceeding six months from the date

they are due for payment
Secured, considered good – –
Unsecured, considered good 0.27 0.07
Doubtful 7.57 6.24
7.84 6.31
Less: Provision for doubtful receivables 7.57 6.24
(A) 0.27 0.07
Other receivables
Secured, considered good 7.84 9.14
Unsecured, considered good 228.35 262.29
Doubtful 1.20 1.78
237.39 273.21
Less: Provision for doubtful receivables 1.20 1.78
(B) 236.19 271.43
Total (A+B) 236.46 271.50
96
13. Cash and bank balances

Current
As at As at
Cash and cash equivalents
Cash on hand 0.02 0.02
Balance with banks
On current accounts 15.14 6.91

Deposits with original maturity of less than 3 months 33.31 188.60
Deposits with original maturity of more than 3 months but less than
12 months [refer note (a) below] 638.04 226.54

Unclaimed dividend account [refer note (b) below] 9.99 9.38
Total 696.50 431.45
Notes:
(a) Deposits with original maturity of more than 3 months can be withdrawn by the Company at any point at a very short notice
and without penalty on the principal amount.
(b) These balances are available for use only towards settlement of corresponding unpaid dividend liabilities.
14. Other current assets

Unsecured, considered good unless
stated otherwise
Current
As at As at
Interest accrued on deposits 6.70 2.63
6.70 2.63
97
15. Revenue from operations

Revenue from operations
ale of products [net of rebates Rs. 215.26 crores (2014 : Rs. 162.77
S
crores) refer note (a) below]
Finished goods 3,469.75 3,671.07
Traded goods 308.97 236.01
Other operating revenue

Commission, royalty and service income 8.16 7.37
Scrap sale 4.54 4.17
Revenue from operations (gross) 3,791.42 3,918.62

Less: Excise duty [refer note (b) below] 493.39 526.29
Revenue from operations (net) 3,298.03 3,392.33
Notes:
(a) Detail of products sold
Finished goods sold
Lubricating oils and greases 3,469.75 3,671.07
3,469.75 3,671.07
Traded goods sold

Lubricating oils and greases 308.97 236.01
308.97 236.01
3,778.72 3,907.08
(b) Excise duty on sales amounting to Rs. 493.39 crores (2014 : Rs. 526.29 crores) has been reduced from sales in Statement
of Profit and Loss and excise duty on increase/(decrease) in stock amounting to Rs. (1.63) crores (2014 : Rs. (2.20) crores)
has been considered as (income)/expense in note 17.3 of the financial statement.
16.1 Other income For the year ended For the year ended
Excess accruals written back 31.28 0.36

Debts written off in earlier years, realised 0.05 –
Exchange difference (net) 3.12 –
Miscellaneous income 18.13 15.70
52.58 16.06
16.2 Interest income

Interest income
From bank deposits 40.91 30.77
Others 2.38 1.27
43.29 32.04
98
17.1 Cost of materials consumed

Raw materials and packing materials consumed [refer note (a) below]
Inventory at the beginning of the year 175.10 164.70
Add: Purchases during the year 1,345.39 1,770.86
1,520.49 1,935.56
Less: Inventory at the end of the year [refer note (b) below] 132.11 175.10
Total raw materials and packing materials consumed 1,388.38 1,760.46
Notes:
(a) Details of raw materials and packing materials consumed
Base oil 738.19 1,051.05
Additives and chemicals 462.86 504.14
Packing materials (individual items each being less than 10% of
the total) 187.33 205.27
Total raw materials and packing materials consumed 1,388.38 1,760.46
(b) Details of raw materials and Packing materials at the end of the year
Base oil 72.38 105.35
Additives and chemicals 57.82 63.26
Packing materials (individual items each being less than 10% of
the total) 1.91 6.49
Total raw materials and packing materials at the end of the year 132.11 175.10
17.2 Purchase of traded goods

197.60 160.23
17.3 (Increase)/decrease in inventories of finished/traded goods

Inventories at the end of the year
Traded goods [refer note (a) below] 48.28 41.89
Finished goods [refer note (a) below] 124.19 147.02
172.47 188.91
Inventories at the beginning of the year

Traded goods 41.89 46.44
Finished goods 147.02 161.48
188.91 207.92
Less: Excise duty on account of increase/(decrease) in stock of finished products (1.63) (2.20)
14.81 16.81
Note:
(a) Details of traded and finished goods at the end of the year:
Traded goods
48.28 41.89
Finished goods
124.19 147.02
99
18. Employee benefits expense

Salaries, wages and bonus [refer note 28] 145.17 141.75
Contribution to provident and other funds 10.57 5.77
Gratuity expense 6.44 4.45
Staff welfare expenses 9.59 9.58
Redundancy cost 4.82 0.01
176.59 161.56
19. Other expenses

Rent 17.11 16.49
Rates and taxes 18.69 14.24
Power and fuel 4.84 5.29
Stores and consumables 2.32 0.95
Freight and forwarding charges 100.72 104.46
Insurance 3.54 3.17
Repairs and maintenance
Land and buildings 4.14 4.11
Plant and equipment 3.84 4.30
Others 17.95 14.16
Bad debts written off 0.59 0.23
Provision for doubtful debts 0.75 1.91
Provision for doubtful advance 0.33 0.40
Processing and filling charges 8.61 10.45
Advertising and sales promotion 129.14 120.09
Stock point operating charges 26.13 24.75
Loss on disposal/write off of fixed assets (net) 5.86 0.95
Director sitting fees 0.23 0.07
Commission to resident non-whole time Indian directors 0.26 0.26
Royalty 93.09 73.19
Sales promotion fees 110.58 113.23
Travelling expenses 9.60 10.41
Legal and professional fees 36.29 31.54
Payment to auditors [refer note (i) below] 1.05 1.12
Exchange difference (net) – 4.19
Loss on forward contract (including provision for MTM) 0.80 1.14
Corporate social responsibility [refer note (ii) below] 10.48 –
Miscellaneous expenses 18.83 15.45
625.77 576.55
Notes:
(i) Payment to auditor (excluding service tax)
As auditor:
Audit fee 0.58 0.63
Tax accounts and tax audit fees 0.21 0.25
Limited review 0.16 0.16
In other capacity:
Certification fees 0.05 0.06
Reimbursement of expenses 0.05 0.02
1.05 1.12
(ii) Corporate Social Responsibility Activities
(a) Amount required to be spent by the Company during the year. 14.24 –
(b) Amount spent during the year (on purpose other than construction/ 10.48 # * –
acquisition of assets controlled by the Company)
# The above expenditure includes contribution to funds, expenses through
registered trusts/registered society or company established under Section
8 of the Companies Act, 2013 and direct expenses by the Company.
* including payables 8.35 –
100
20. Depreciation and amortisation expense

Depreciation of tangible assets 36.13 34.71
Amortisation of intangible assets 2.84 1.42
38.97 36.13
21. Finance costs

Interest others 0.83 2.38
0.83 2.38
22. Earnings per share (EPS)

No. of Shares No. of Shares

Weighted average number of equity shares in calculating Basic and Diluted EPS 494,561,192 494,561,192
Basic and diluted earnings per share (Rs.) 12.44 9.60
Nominal value per share (Rs.) 5.00 5.00
23. Employee benefits

Defined contribution plan
Amounts recognised as an expense
Contribution to Provident and Other Funds’ in Note 18 includes Rs. 3.23 crores (2014 : Rs. 3.35 crores) for Pension Fund, ESIC
and Labour Welfare Fund. Note 19 includes ‘Insurance’ Rs. 1.83 crores (2014 : Rs. 1.62 crores) for Medical Insurance benefits
and post retiral medical benefit scheme. Salaries, wages and bonus in Note 18 includes Rs. 2.11 crores (2014 : Rs. 2.34 crores)
for Sharematch.
The Company has incurred redundancy cost Rs. 4.82 crores (2014 : 0.01 crore) due to the re-organisation activity, this is included
in ‘Employee benefits expense’ – Note 18.
General description of defined benefit plan
Gratuity
The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary
last drawn for each completed year of service depending on the date of joining. The same is payable on termination of service,
retirement or death, whichever is earlier. The benefit vests after five years of continuous service.
Provident fund
The Provident Fund (administered by a trust) is a defined benefit scheme whereby the Company deposits amounts determined as
a fixed percentage of basic pay to the fund every month. The actuary has provided a valuation and determined the fund assets and
obligations as at December 31, 2015. Further, it has been determined that the yield on the investments of the trust is adequate
to meet the obligation towards the payment of the interest rate notified by the government.
Plan obligation (125.89) (114.14)
Plan assets at fair value 126.89 116.16
Asset/(liability) recognised in the Balance Sheet 1.00 2.02
101
23. Employee benefits (contd.)

Pension benefit to past employees
Under the Company’s pension scheme, certain categories of employees, on retirement, are eligible for monthly differential pension
which is accounted for on an actuarial basis as on the Balance Sheet date.
Amounts recognised as an expense
Defined benefit plan
Gratuity in note 18 includes gratuity cost of Rs. 6.44 crores (2014 : Rs. 4.45 crores). Contribution to provident and other funds
in note 18 includes Rs. 6.06 crores (2014 : Rs. 1.53 crores) for provident fund. Salaries, wages and bonus in note 18 includes
pension benefit to past employees, Rs. 0.20 crore (2014 : Rs. 0.13 crore).
Rupees in Crores
As at December 31, 2015 As at December 31, 2014
Gratuity Pension Gratuity Pension
benefit benefit
Particulars (Funded) (Non- (Funded) (Non-
funded) funded)
Change in the present value of the defined benefit obligation and fair
value of plan assets:
Obligation at period beginning 35.42 1.56 29.31 1.57
Current service cost 2.40 – 1.97 –
Interest cost 2.67 – 2.59 –
Actuarial (gain)/loss due to change in assumptions 0.36 0.09 2.27 0.13
Experience (gain)/loss on plan liability 3.68 – 1.63 –
Benefits paid (5.64) (0.15) (2.35) (0.14)
Obligation at period end 38.89 1.50 35.42 1.56
Change in plan assets

Plan assets at period beginning, at fair value 31.18 – 26.64 –
Expected return on plan assets 2.45 – 2.46 –
Experience (gain)/loss on plan assets 0.16 – 1.51 –
Contributions by employer 3.01 – 2.92 –
Benefits paid (5.64) – (2.35) –
Plan Assets at period end, at fair value 31.16 – 31.18 –
Change in the present value of the defined benefit obligation and fair
value of plan assets:
Fair value of plan assets at the end of the period 31.16 – 31.18 –
Present value of the defined benefit obligation at the end of the period (38.89) (1.50) (35.42) (1.56)
Asset/(liability) recognised in the Balance Sheet (7.73) (1.50) (4.24) (1.56)
Expense for the year

Current service cost 2.40 – 1.97 –
Interest cost on benefit obligation 2.67 – 2.59 –
Expected return on plan assets (2.45) – (2.46) –
Net actuarial (gain)/loss recognised in the year 3.82 0.09 2.35 0.13
Net cost 6.44 0.09 4.45 0.13
Actual return on plan assets 1.97 – 2.32 –

Estimated contribution to be made in next annual year 5.37 – 3.65 –
Basis used to determine expected rate of return on assets:

Expected rate of return on investments for all defined benefit plans is determined based on the assessment made by the Company
at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with
the estimated incremental investments to be made during the year. Expected rate of return on plan assets is 8.05% (2014 : 8.20%)
102
23. Employee benefits (contd.)

Assumptions Gratuity Pension Gratuity Pension
benefit benefit
Discount rate 8.05% 8.05% 8.20% 8.20%
Employee turnover Executives: – Executives: –
upto 35 years – 15% p.a. upto 35 years – 15% p.a.
thereafter – 10% p.a. thereafter – 10% p.a.
Expats & Workers – 1% p.a. Expats & Workers – 1% p.a.
Mortality Indian Indian Indian Indian
Assured Assured Assured Assured
Lives Lives Lives Lives
Mortality Mortality Mortality Mortality
(2006-08) (2006-08) (2006-08) (2006-08)
Ultimate Ultimate Ultimate Ultimate
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion, and other
relevant factors, such as supply and demand in the employment market.
The composition of plan assets

Particulars
Gratuity Provident fund Gratuity Provident fund
Debt instruments 98% 98% 95% 84%
Others 2% 2% 5% 16%
100% 100% 100% 100%
Amount for the current and previous periods are as follows:

Rupees in Crores
Gratuity Survivor Pension Gratuity Survivor Pension
protection benefit protection benefit
Particulars
(Funded) (Non- (Non- (Funded) (Non- (Non-
funded) funded) funded) funded)
Experience (gain)/loss on
plan liability 3.68 – 0.09 1.63 – 0.13
Fair value of plan assets
at the end of the period 31.16 – – 31.18 – –
Present value of the
defined benefit obligation
at the end of the period (38.89) – (1.50) (35.42) – (1.56)
Asset/(liability) recognised
in the Balance Sheet (7.73) – (1.50) (4.24) – (1.56)
Rupees in Crores
As at December 31, 2013 As at December 31, 2012 As at December 31, 2011
Gratuity Survivor Pension Gratuity Survivor Pension Gratuity Survivor Pension
Particulars protection benefit protection benefit protection benefit
(Funded) (Non- (Non- (Funded) (Non- (Non- (Funded) (Non- (Non-
funded) funded) funded) funded) funded) funded)
Experience (gain)/loss on
plan liability 2.92 (0.19) 0.06 2.38 0.05 0.08 1.86 – –
Fair value of plan assets
at the end of the period 26.64 – – 26.43 – – 23.81 – –
Present value of the
defined benefit obligation
at the end of the period (29.31) – (1.57) (27.48) (0.19) (1.67) (23.82) (0.17) (1.77)
Asset/(liability) recognised
in the Balance Sheet (2.67) – (1.57) (1.05) (0.19) (1.67) (0.01) (0.17) (1.77)
103
24. Leases
Operating Lease: Company as lessee
ffice premises, residential flats, motor cars and equipments are obtained on operating lease. The lease terms range from one
O
year to four years and are renewable at the option of the Company.
The specified disclosure in respect of these leases is given below:

Charged to Statement of Profit and Loss 16.41 15.64
Future minimum rentals payable under non-cancellable operating leases are

as follows:
Within one year 14.48 11.79
After one year but not more than five years 8.39 2.72
More than five years – –
22.87 14.51
25. Segment information

The business segment has been considered as the primary segment. The Company is organised into two business segments,
Automotive and Non-Automotive.
The above business segments have been identified considering:
– The customers
– The differing risks and returns
– The organisation structure
– The internal financial reporting system
Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities
of the segment and amounts allocated on a reasonable basis.
Business segment:
Rupees in Crores
Automotive Non-Automotive Unallocated Total
For the year ended December 31, 2015

Revenue
Revenue from operations (net) 2,887.85 410.18 – 3,298.03
Results
Segment results 818.27 91.50 – 909.77
Unallocable income net of unallocable (expenditure) – – 42.01 42.01
Finance costs – – 0.83 0.83
Profit before tax 950.95
Less: Provision for current tax 323.80
Less: Provision for deferred tax 11.89
Profit after tax 615.26
Other information
As at December 31, 2015
Segment assets 698.86 177.05 785.71 1,661.62
Segment liabilities 671.93 68.00 346.08 1,086.01
Capital expenditure (including capital work-in-progress) 40.73 2.53 – 43.26
Depreciation/amortisation for the year 37.35 1.62 – 38.97
104
25. Segment information (contd.)

Rupees in Crores
Geographical segment:
Revenue
India 3,295.28
Outside India 2.75
3,298.03
Assets
India 1,653.31
Outside India 8.31
1,661.62
Capital expenditure (including capital work-in-progress)
India 43.26
Outside India –
43.26
Business segment: Rupees in Crores

Revenue
Revenue from operations (net) 2,953.75 438.58 – 3,392.33
Results
Segment results 617.38 77.63 – 695.01
Unallocable income net of unallocable (expenditure) – – 33.68 33.68
Finance costs – – 2.38 2.38
Profit before tax 726.31
Less: Provision for current tax 260.60
Less: Provision for deferred tax (8.85)
Profit after tax 474.56
Other information
Segment assets 781.59 188.54 522.02 1,492.15
Segment liabilities 641.10 75.35 278.92 995.37
Capital expenditure (including capital work-in-progress) 48.33 1.44 – 49.77
Depreciation/amortisation for the year 34.72 1.41 – 36.13
Geographical segment:
Revenue
India 3,388.40
Outside India 3.93
3,392.33
Assets
India 1,489.10
Outside India 3.05
1,492.15
Capital expenditure (including capital work-in-progress)
India 49.77
Outside India –
49.77
105
26. Contingent liabilities & commitments

As at As at
(a) Contingent liabilities

(1) Excise/sales tax/service tax demands made by the authorities,
in respect of which appeals have been filed [refer note (a) below] 26.91 27.68
(2) Claims against the Company not acknowledged as debts
estimated at:
— In respect of third parties – miscellaneous 1.22 1.16
(A) 28.13 28.84
(b) Commitments
(1) Estimated amount of contracts remaining to be executed on
capital account and not provided for (net of advances) 3.87 17.06
(2) Long-term advertisement contracts – 21.18
(B) 3.87 38.24
Total (A + B) 32.00 67.08
Note:
(a) The management does not expect these claims to succeed. Accordingly no provision for contingent liability has been recognised
in the financial statements.
27. Details of dues to micro and small enterprises as defined under the Micro and Small
Enterprise Development (MSMED) Act, 2006*
As at As at
a. The principal amount and the interest due thereon remaining unpaid to
any supplier as at the end of each accounting year
– Principal amount due to micro and small enterprises 4.13 6.12
– Interest due on above – –
b. The amount of interest paid by the buyer in terms of Section 16 of the
Micro and Small Enterprise Development Act, 2006, along with the
amounts of the payment made to the supplier beyond the appointed day
during each accounting year. – –
c. The amount of interest due and payable for the period of delay in making
payment (which have been paid but beyond the appointed day during
the year) but without adding the interest specified under Micro and Small
Enterprise Development Act, 2006. – –
d. The amount of interest accrued and remaining unpaid at the end of each
accounting year. – –
e. The amount of further interest remaining due and payable even in the
succeeding years, until such date when the interest dues as above are
actually paid to the small enterprise for the purpose of disallowance as a
deductible expenditure under Section 23 of Micro and Small Enterprise
Development Act, 2006. – –
* The Company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development
Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received.
106
28. Capitalisation of expenditure

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

Salaries, wages and bonus [refer note 18] – 0.40

Travelling expenses [refer note 19] – 0.62
29. Related party disclosures as required under AS-18, “Related Party Disclosures”, are
given below:
A. Name of the related party and nature of relationship where control exist:
(a) Holding Companies Castrol Limited, U.K. (Holding Company of Castrol India Limited)
Burmah Castrol PLC (Holding Company of Castrol Limited, U.K.)
BP PLC (Holding Company of Burmah Castrol PLC), Ultimate Holding Company
B. Name of the related party and nature of relationship where transaction have taken place during the year:
(a) Fellow Subsidiaries AsPac Lubricants (Malaysia) Sdn. Bhd BP Korea Limited
(where transaction exists)
BP – Castrol (Thailand) Limited BP Lubricants USA Inc
BP (China) Industrial Lubricants Limited BP Marine Limited
BP Asia Pacific (Malaysia) Sdn. Bhd BP Mauritius Limited
BP Australia Pty Limited BP Middle East LLC (Auto and Marine
Lubes)
BP Castrol K.K. BP Oil International Limited
BP Corporation North America Inc BP Petrolleri Anonim Sirketi
BP Europa SE BP Products North America Inc
BP Europa SE – BP Belgium (Branch) BP Singapore Pte. Limited
BP Europa SE Zweigniederlassung – BP BP Taiwan Marketing Limited
Austria
BP Exploration (Alpha) Limited (India BP Thailand
branch)
BP France Castrol (China) Limited
BP France SA Branch Office (Trading as Castrol (Shenzhen) Company Limited
BP Middle East)
BP India Services Private Limited Castrol BP Petco Limited Liability Company
BP International Limited Castrol Industrial North America Inc
BP Italia SpA Lubricants UK Limited
BP Japan K.K.
(b) Key management personnel Omer Dormen Managing Director (w.e.f. 12.10.2015)
(where transaction exists)
Rashmi Joshi Director Finance (CFO)
Jayanta Chatterjee Director Supply Chain (w.e.f. from 30.10.2014)
Ravi Kirpalani Managing Director (up to 11.10.2015) & thereafter Executive Director
107
29.
Related party disclosures as required under AS-18, “Related Party Disclosures”, are
given below: (contd.)
B. Transactions with related parties (contd.)
Nature of December 31, 2015 December 31, 2014
Relationship Rupees in Crores Rupees in Crores
Purchase of materials/traded goods

BP Europa SE Fellow subsidiary 14.75 21.72
BP Europa SE – BP Belgium (Branch) Fellow subsidiary 19.43 19.45
Castrol Industrial North America Inc Fellow subsidiary 15.61 17.86
Others Fellow subsidiaries 18.10 15.72
Total 67.89 74.75
Sale of goods & related expenses

BP (China) Industrial Lubricants Limited Fellow subsidiary 1.11 0.71
BP – Castrol (Thailand) Limited Fellow subsidiary 0.35 0.15
Castrol (Shenzhen) Company Limited Fellow subsidiary 1.05 0.79
Others Fellow subsidiaries – 0.17
Total 2.51 1.82
Receiving of services
BP Singapore Pte Limited Fellow subsidiary 1.33 12.18
BP International Limited Fellow subsidiary 10.70 6.45
Lubricants UK Limited Fellow subsidiary 11.56 8.74
Total 24.29 28.01
Rendering of services & deputation of

employees
Castrol Limited, U.K. Holding company 6.49 3.13
BP International Limited Fellow subsidiary 4.34 4.46
BP India Services Private Limited Fellow subsidiary 8.53 8.17
Total 27.41 21.36
Commission income
BP Marine Limited Fellow subsidiary 2.62 2.27
Total 2.62 2.27
Transfer in/transfer out

BP International Limited Fellow subsidiary – 4.50
BP Corporation North America Inc Fellow subsidiary – (4.50)
Payment on account of capital reduction

Castrol Limited, U.K. Holding company – 175.37
Others Fellow subsidiary – 0.27
Total – 175.64
108
29.
Related party disclosures as required under AS-18, “Related Party Disclosures”, are
given below: (contd.)
B. Transactions with related parties (contd.)
Relationship Rupees in Crores Rupees in Crores
Dividend
Others Fellow subsidiary 0.49 0.41
Total 316.16 263.47
Royalty expense
Total 93.09 73.19
Recovery of loan & interest thereon

Ravi Kirpalani Key management
personnel 0.01 0.01
Total 0.01 0.01
As at As at
Balance as at year ended Relationship Rupees in Crores Rupees in Crores
Amounts payable
Total 290.50 240.50
Amounts receivable
BP India Services Private Limited Fellow subsidiary 0.57 0.82
BP Marine Limited Fellow subsidiary 0.02 0.61
BP Singapore Pte Limited Fellow subsidiary 0.04 0.84
Total 9.30 4.12
Remuneration to executive directors paid/

payable
Omer Dormen Key management
personnel 1.61 –
Rashmi Joshi Key management
personnel 1.55 1.39
personnel 4.55 2.44
Jayanta Chatterjee Key management
personnel 1.57 0.31
Total 9.28 4.14
Loan outstanding
personnel 0.12 0.13
Total 0.12 0.13
109
30. Forward contracts and unhedged foreign currency exposures:

30.1 Forward contracts outstanding as at the Balance Sheet date
As at As at
No. of buy contracts relating to firm commitments 9 25
Foreign currency – USD 4,640,000 13,343,000
Rs. crores 30.84 85.04
30.2 Foreign currency exposures which are not hedged as at the Balance Sheet date
Particulars USD EURO GBP CNY SGD AUD JPY CHF
December 31, 2015
Trade payables – Foreign currency 7,485,274 1,823,993 1,140,345 – 114,604 105,294 – –
Trade payables – Rs. crores 49.63 13.22 11.24 – 0.54 0.51 – –
Trade receivables – Foreign currency 820,830 – – – – – – –
Trade receivables – Rs. crores 5.45 – – – – – – –
Loans and advances given – Foreign currency 2,690,215 206,319 – – – – – 8,700
Loans and advances given – Rs. crores 17.85 1.50 – – – – – 0.06
December 31, 2014
Trade payables – Foreign currency 15,312,765 828,062 630,234 14,300 141,884 – 3,930,587 –
Trade payables – Rs. crores 96.99 6.38 6.21 0.01 0.68 – 0.21 –
Trade receivables – Foreign currency 213,733 – – – – – – –
Trade receivables – Rs. crores 1.35 – – – – – – –
Loans and advances given – Foreign currency 1,629,723 40,123 31,759 – – – – –
Loans and advances given – Rs. crores 10.31 0.31 0.31 – – – – –
31. C.I.F. value of imports

Raw materials 659.93 828.57
Capital goods 24.05 13.13
32. Expenditure in foreign currency (on accrual basis)

Travelling expenses 0.73 0.52
Imports of goods for resale 64.61 92.31
Royalty (gross) [tax deducted at source Rs. 8.56 crores
(2014 : Rs. 7.80 crores)] 93.09 73.19
Advertisement and sales promotion 0.19 7.96
Sales promotion fees 3.92 9.32
Others (net of tax, where applicable) 47.01 22.08
33. Earnings in foreign currency (on accrual basis)

Supplies to foreign vessels 2.82 3.83
Commission 2.62 2.27
FOB value of goods exported 2.29 2.79
Energy supplies 0.46 1.14
Others 7.44 3.89
110
34. Imported and Indigenous raw materials, packing materials, components and spare parts
consumed
Rupees % of Total Rupees % of Total
in Crores in Crores
Imported:
Base oil 536.43 38.64 699.04 39.71
Additive and chemicals 221.38 15.95 245.55 13.95
Indigenous:
Base oil 201.76 14.53 352.01 20.00
Additive and chemicals 241.48 17.39 258.59 14.69
Packages 187.33 13.49 205.27 11.66
1,388.38 100.00 1,760.46 100.00
35. he Company has received an order from Maharashtra Sales Tax Department for the financial year 2009-10, demanding Rs. 255.00
T
crores towards sales tax (including interest). The demand pertains to sale of goods made by the Company in the states other
than Maharashtra, where applicable taxes have been paid as per the provisions of law. The Company’s tax payment methodology
in respect of the goods sold is adequately supported by robust legal grounds/precedents and in the Company’s opinion the said
demand is unjustified. The Company has filed the appeal against the order.
36. r. Omer Dormen was appointed as the Managing Director of the Company by the Board of Directors at its meeting held on
M
August 17, 2015 with effect from October 12, 2015, subject to the approval of shareholders. The appointment is also subject
to the approval of Central Government as Mr. Omer Dormen is a non-resident as per Schedule V of the Companies Act, 2013.
The Company has applied to the Central Government to approve the appointment and is expecting to receive the approval in
due course.
37.
Details of dividend/capital reduction remitted during the year, to two (2014 – two)
non-resident shareholders are as follows:
As at As at
Dividend in respect December 31, 2015 December 31, 2014
of the year ended No. of Shares Rupees in Crores Rupees in Crores
31-12-2013 (Final) 351,291,716 – 122.95

31-12-2014 (Interim) 351,291,716 – 122.95
31-12-2014 (Capital reduction) 351,291,716 – 175.65
31-12-2014 (Final) 351,291,716 140.52 –
31-12-2015 (Interim) 351,291,716 140.52 –
38.
Previous year figures
The Company has reclassified previous year figures to conform to this year’s classification.
}

111
annual report 2015
Route Map to the AGM Venue
112
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Castrol India Limited

Annual Report 2015

Mr. Uday Khanna State Bank of India

Interactive Castrol MAGNATEC

Online campaign to promote Castrol EDGE which gives engines the

Castrol MAGNATEC Mobile Unit

Castrol Actibonds in action at the

Castrol Bike Guru

Castrol Vecton RX Fuel Saver 10W-40 with System5 TechnologyTM is

Castrol Vecton-on-Wheels van used to educate

Castrol Engine Expert explains the

Castrol India signed local supplier contract with

Seen in picture (l to r): Gurpreet Bhatia, former VP-B2B Sales, Castrol

SkillFest - a skill development programme run jointly by Tata

COST OF MATERIALS AND SALES PER LITRE SALES

(Volume in Mln. Litres)

PROFIT AND EFFECTIVE TAX RATE

739 745 733

RETURN ON NET WORTH* DIVIDEND AND EARNING PER SHARE*

(Rs. per share)

750 700 7.7

Particulars 2015 2014 2013 2012 2011 2010 2009

Other Income 52.58 16.06 35.06 30.84 21.66 5.42 7.42

Earnings before Interest, Tax, Depreciation,

Exceptional Item — — 22.80 — — — —

Earnings before Interest, Tax, Depreciation and

Finance Costs 0.83 2.38 1.71 2.14 1.91 2.42 3.45

Interest Income 43.29 32.04 48.58 41.34 51.43 25.93 18.83

Current Taxation 323.80 260.60 241.06 227.78 255.44 251.09 206.83

Deferred Taxation 11.89 (8.85) 12.13 (8.85) (19.13) (2.49) (7.80)

Fringe Benefit Tax — — — — — — 0.71

Short/(excess) Provision of Tax relating to

Dividend 445.10 370.92 346.20 346.20 370.92 370.92 309.10

Net Assets 575.61 496.78 751.42 649.23 604.20 553.50 495.00

Share Capital 247.28 247.28 494.56 494.56 247.28 247.28 123.64

Net Worth 575.61 496.78 751.42 649.23 604.20 553.50 495.00

For the year ended For the year ended

Profit before Depreciation, Exceptional Items & Tax 947.46 732.78

Interest Income (Net of Finance Cost) 42.46 29.66

Profit before Depreciation & Tax 989.92 762.44

Depreciation & Amortisation 38.97 36.13

Current Tax 323.80 260.60

Deferred Tax 11.89 (8.85)

Profit after Tax 615.26 474.56

Balance as per last Balance Sheet brought forward 87.50 94.86

Profit available for Appropriation 702.76 569.42

The appropriations are:

Interim 197.82 173.10

Final 247.28 197.82

Interim 40.27 29.42

Final 50.34 39.55

Tax on Capital Reduction — 42.03

Transfer to General Reserves 0.72 —

Net surplus in the Statement of Profit & Loss 166.33 87.50

2. PERFORMANCE 4. SUPPLY CHAIN

To support integrity and growth operations, your 6. BOARD EVALUATION

The Company has appointed a reputed agency 7. 

strategic CSR programme, working in collaboration 11. DIRECTORS’ RESPONSIBILITY STATEMENT

17. MATERIAL CHANGES OCCURRED AFTER END 20. PARTICULARS OF EMPLOYEES

To support integrity and growth operations, your 6. BOARD EVALUATION

The Company has appointed a reputed agency 7.

strategic CSR programme, working in collaboration 11. DIRECTORS’ RESPONSIBILITY STATEMENT

17. MATERIAL CHANGES OCCURRED AFTER END 20. PARTICULARS OF EMPLOYEES

1. Issue of Equity Shares with differential rights

would be determined considering the overall • Informed judgement: There are

ii. Performance Linked Bonus (PLB) – The iii.

event, the Committee shall meet at the earliest c.

The improvement measures continue to support

• Use of Invertor type air condition to optimize Technology Absorption

• ontinue rationalisation of certain blending

Based on the R&D activities mentioned above 1. Activities relating to Export

Annexure V iii. The Depositories Act, 1996 and the Regulations

(c) Profits in lieu of salary under Section 17(3)

• framework of prudent and effective controls

4. ecommending to the Board, the appointment