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Castrol India Ltd.

BSE: 500870 Sector: Industrials
NSE: CASTROLIND ISIN Code: INE172A01027
BSE 11:47 | 21 Jun 168.60 -0.60
(-0.35%)
OPEN

168.55

HIGH

169.30

LOW

168.10

NSE 11:39 | 21 Jun 168.65 -0.80
(-0.47%)
OPEN

169.65

HIGH

170.25

LOW

168.00

OPEN 168.55
PREVIOUS CLOSE 169.20
VOLUME 12415
52-Week high 214.43
52-Week low 161.75
P/E 24.69
Mkt Cap.(Rs cr) 16,677
Buy Price 168.40
Buy Qty 177.00
Sell Price 168.55
Sell Qty 3.00
OPEN 168.55
CLOSE 169.20
VOLUME 12415
52-Week high 214.43
52-Week low 161.75
P/E 24.69
Mkt Cap.(Rs cr) 16,677
Buy Price 168.40
Buy Qty 177.00
Sell Price 168.55
Sell Qty 3.00

Castrol India Ltd. (CASTROLIND) - Auditors Report

Company auditors report

To

The Members of Castrol India Limited Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Castrol IndiaLimited ("the Company") which comprise the Balance Sheet as at 31stDecember 2017 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st December 2017 and its profit total comprehensive income its cashflows and the changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31stDecember 2016 and the transition date opening balance sheet as at 1st January2016 prepared in accordance with Ind AS included in these Ind AS financial statements havebeen audited by the predecessor auditor. The report of the predecessor auditor on thecomparative financial information and the said opening balance sheet dated 6thSeptember 2017 expressed an unmodified opinion.

Our opinion on the financial statements and our report on Other Legal and RegulatoryRequirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stDecember 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st December 2017 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements (refer note no. 25 to the Ind AS financialstatements).

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. The Company has transferred the amounts required to be transferred to the InvestorEducation and Protection Fund within 7 days and 9 days from the dues dates except forcases where disputes relating to ownership of the underlying shares have remainedunresolved. (refer note no. 11 to the Ind AS financial statements).

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

Samir R. Shah

Partner

(Membership No. 101708)

Place : Mumbai

Date : February 6 2018

Report on Internal Financial Controls Over Financial Reporting

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of CastrolIndia Limited ("the Company") as of 31st December 2017 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st December 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

Samir R. Shah

Partner

(Membership No. 101708)

Place : Mumbai

Date : February 6 2018

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements" Section of our report of even date]

1. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified during the year bythe Management according to a phased program designed to cover all the items over a periodof two years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the Management during the year. According to the information andexplanations given to us by the Management no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of registered sale deed / transfer deed/ conveyancedeed provided to us we report that the title deeds comprising all the immovableproperties of land and acquired buildings which are freehold are held in the name of theCompany as at the balance sheet date except as follows: Rs. in Crores

No. of Cases Asset Category Gross Block as at December 31 2017 Net Block as at December 31 2017 Remarks
1 Freehold Land located at Mehsana 0.01 0.01 The deed of conveyance is in the erstwhile name of the Company and the mutation of the name is pending.

In respect of land taken on lease the lease agreements are in the name of the Companyexcept as follows: Rs. in Crores

No. of Cases Asset Category Gross Block as at December 31 2017 Net Block as at December 31 2017 Remarks
2 Leasehold Land located at Patalganga 0.29 0.28 The lease deed is in the erstwhile name of the Company.

2. As explained to us the inventories (other than Good in Transit) were physicallyverified during the year by the Management at reasonable intervals and no materialdiscrepancies were noticed on such physical verification.

3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act.

4. The Company has not granted any loans made investments or provide guarantees andhence reporting under clause (iv) of the order is not applicable.

5. According to the information and explanations given to us the Company has notaccepted any public deposits. Accordingly the provisions of clause (v) of the Order arenot applicable to the Company.

6. The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Act. We have broadly reviewed the cost records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub-section (1) of Section 148 of the Act inrespect of manufacture of lubricants and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

7. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employee State Insurance Income Tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Goods and Service Tax Cess and other materialstatutory dues as applicable with the appropriate authorities except in case of taxdeducted at source reported in clause (b) below.

(b) There are no undisputed amounts payable in respect of the above statutory duesoutstanding as at 31st December 2017 for a period of more than sixmonths from the date they became payable except as follows.

Name of the Statute Nature of Dues Amount (Rs. in Crores) Period to which Amount Relates Due date Date of Payment
The Income Tax Act 1961 Tax deducted at source 0.13 March-2015 30th April 2015 Unpaid
1.17 March-2017 30th April 2017 Unpaid

(c) Details of Income tax Sales tax Service tax Customs Duty Excise Duty and ValueAdded Tax which have not been deposited as on 31st December 2017 on account ofdisputes are given below: Rs. in Crores

Name of Statute Nature of Dues Forum where dispute is pending Period to which the Amount Relates Total disputed dues Amount paid Amount unpaid
Central Excise Act 1944 Duty and Penalty Commissioner 1990-2016 12.49 0.73 11.77
Duty and Penalty Commissioner (A) 2001-2009 0.28 0.02 0.26
Duty and Penalty Tribunal 1987-2013 15.97 1.78 14.19
Duty and Penalty High Court 1999-2002 0.15 0.15
Duty and Penalty Supreme Court 1998-1999 0.40 0.20 0.20
Custom Act 1962 Duty Assistant Commissioner 2015 1.56 1.56
Duty Tribunal 1997 to 2006 1.58 1.58
Service Tax Rules 1994 Tax and Penalty Commissioner 2005-2017 45.34 1.57 43.77
Tax and Penalty Commissioner (A) 2007-2015 1.95 0.16 1.79
Tax and Penalty Tribunal 2005-2013 97.72 1.09 96.63
Tax and Penalty High Court 1997-2016 8.28 8.28
Local Sales Tax Act VAT Act and Central Sales Tax Act Tax Interest and Penalty Commissioner 1999-2016 47.06 17.19 29.87
Tax Interest and Penalty Tribunal 1994-2014 20.07 10.32 9.75
Tax Interest and Penalty High Court 1997-2002 0.45 0.06 0.39
Tax and Interest Central Sales Tax Appellate Authority (CSTAA) 2009-2010 255.50 255.50
The Income Tax Act 1961 Tax and Interest Income Tax Appellate Tribunal 2004-05 and 2006-07 2.64 2.64
Tax and Interest Commission of Income Tax 2011-12 0.08 0.08

8. The Company has not taken any loans or borrowings from financial institutions banksand government or has not issued any debentures. Hence reporting under clause (viii) ofthe Order is not applicable to the Company.

9. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans. Hence reporting under clause (ix) ofthe Order is not applicable to the Company.

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable to the Company.

13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the Ind AS financial statements etc. as required by the applicableaccounting standards.

14. During the year the Company has not made any preferential allotment or privateplacement of the shares or fully or partly convertible debentures. Hence reporting underclause (xiv) of the Order is not applicable to the Company.

15. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them and hence provisions of Section 192 of the Actare not applicable to the Company.

16. The Company is not required to be registered under Section 45 IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

Samir R. Shah

Partner

(Membership No. 101708)

Place : Mumbai

Date : February 6 2018