MIRA
INFORM REPORT
|
Report Date : |
06.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
CASTROL INDIA LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Date of
Incorporation : |
31.05.1979 |
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Com. Reg. No.: |
11-021359 |
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Capital
Investment / Paid-up Capital : |
Rs.4945.600 Millions |
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CIN No.: [Company Identification
No.] |
L23200MH1979PLC021359 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
MUMC03626A |
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PAN No.: [Permanent Account No.] |
AAACC4481E |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturing and Marketing of Automotive, Non-Automotive Lubricants and Related Services. |
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No. of Employees
: |
839 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (62) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 25900000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having a good track
record. Financial position of the company appears to be strong. Performance capability
is high. Liquidity position is good. There appears no external borrowing. However, trade relations are reported to be fair. Business is active.
Payments are reported to be regular and as per commitment. The company can be considered for normal business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office : |
Technopolis Knowledge Park, Mahakali Caves Road, Andheri (East), Mumbai
– 400093, Maharashtra, India |
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Tel. No.: |
91-22-66984100/ 23632511/ 23632512/ 23632513 |
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Fax No.: |
91-22-56984101 |
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E-Mail : |
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Website : |
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Factory 1: |
A-8/A-14 MIDC, Patalganga Industrial Area, P.O. Rasayani, Raigad-410207,
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Tel No.: |
91-2192-250654 |
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Fax No.: |
91-2192-250171 |
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Factory 2: |
Survey No. 374/2, Village Saily, Saily-Rakholi Road, Dadra and Nagar
Haveli-396230, U.T |
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Tel No.: |
91-260-2640141 |
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Fax No.: |
91-260-2640139 |
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Factory 3: |
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Tel No.: |
91-33-24393527 |
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Fax No.: |
91-33-24397011 |
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Factory 4: |
23/7, Mathura Road, Ballabhgarh - 121004, Faridabad, Haryana,
India |
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Tel No.: |
91-129-2309101 |
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Fax No.: |
91-129-2309112 |
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R and D Centre: |
B.P.T Plot No. 2023, New |
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Tel No.: |
91-22-24171950 |
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Fax No.: |
91-22-24150070 |
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Warehouses : |
White House, P. B. No. 16172, 91, Walkeshwar Road, Mumbai – 400 006,
Maharashtra, India |
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Tel. No.: |
91-22-23635447/ 23636555/ 23636562/ 23636563/ 23637569/ 23637590/
23637591/ 23637592/ 23637594/ 23637595/ 23632511 |
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Fax No.: |
91-22-23631335/ 23637003/ 23619578/ 23635447/ 23688837 |
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Region Office: |
Located at:
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DIRECTORS
AS ON: 31.03.2012
|
Name : |
Mr. S. M. Datta |
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Designation : |
Chairman |
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Name : |
Mr. R. Gopalakrishnan |
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Designation : |
Director |
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Name : |
Mr. R. Hewins |
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Designation : |
Director |
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Name : |
Mr. U. Khanna |
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Designation : |
Director |
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Name : |
Mr. S. Mukundan |
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Designation : |
Director |
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Name : |
Mr. P. Weidner |
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Designation : |
Director |
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Name : |
Mr. A. Moore |
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Designation : |
Director-Alternate to R. Hewins |
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Name : |
Mr. S. Vaidya |
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Designation : |
Director |
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Name : |
Mr. B. Kamath |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. R. Kirpalani |
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Designation : |
Chief Operating Officer |
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Name : |
Mr. A. H.
Mody |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON: 31.03.2013
|
Category
of Shareholders |
No. of Shares |
Percentage of Holding |
|
(A)
Shareholding of Promoter and Promoter Group |
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|
(1) Indian |
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|
351291716 |
71.03 |
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|
351291716 |
71.03 |
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Total shareholding
of Promoter and Promoter Group (A) |
351291716 |
71.03 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
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|
3388687 |
0.69 |
|
|
109997 |
0.02 |
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|
24726841 |
5.00 |
|
|
44481380 |
8.99 |
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|
72706905 |
14.70 |
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|
|
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|
5102670 |
1.03 |
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|
|
|
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|
47417316 |
9.59 |
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|
18038585 |
3.65 |
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|
4000 |
0.00 |
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|
4000 |
0.00 |
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|
70562571 |
14.27 |
|
Total Public
shareholding (B) |
143269476 |
28.97 |
|
Total (A)+(B) |
494561192 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
494561192 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Marketing of Automotive, Non-Automotive Lubricants and Related Services. |
GENERAL INFORMATION
|
No. of Employees : |
839 (Approximately) |
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|
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Bankers : |
· Deutsche Bank · HDFC Bank Limited · The Hongkong and Shanghai Banking Corporation Limited · State Bank of India · Citibank N.A. · DBS Bank Limited · J P Morgan Chase Bank N.A. |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
S. R. Batliboi and Company Chartered Accountants |
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Address : |
14th Floor, The Ruby, 29 Senapati Bapat Marg, Dadar (West),
Mumbai-400028, |
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Solicitors and
Advocates : |
· Crawford Bayley and Company · Dhru and Company · Udwadia Udeshi and Argus Partners |
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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 |
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Fellow Subsidiaries
: |
· Arabian Production and Marketing · Lubricants Company · AsPac Lubricants (Malaysia) Sdn. Bhd · BP Asia Pacific (Malaysia) Sdn. Bhd · BP Australia Pty Limited · BP – Castrol (Thailand) Limited · BP (China) Industrial Lubricants Limited · BP Corporation North America Inc · BP Europa SE · BP Europa SE – BP Belgium (Branch) · BP France · BP France SA Branch Office (Trading as BP Middle East) · BP India Services Private Limited · BP International Limited · BP Italia SpA · BP Japan K.K. · BP Korea Limited · BP Lubricants USA Inc · BP Marine Limited · BP Mauritius Limited · BP Oil International Limited · BP Products North America Inc · BP Singapore Pte. Limited · BP Southern Africa (Proprietary) Limited · Burmah Castrol Australia PTY Limited · Castrol BP Petco Limited · Castrol Industrial North America Inc · Castrol Limited · Castrol Pakistan Private Limited · Castrol Philippines, Inc. · Castrol (Shenzhen) Company Limited · Castrol (Shenzhen) Company Limited · Shanghai Pudong Branch · Lubricants UK Limited · Tata BP Solar India Limited (up to · 28.06.2012) |
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Associates : |
· Castrol India Limited Employees’ Provident Fund · Castrol India Limited Staff Pension Fund · Castrol India Limited Employees’ Gratuity Fund |
CAPITAL STRUCTURE
AS ON: 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
495000000 |
Equity Shares |
Rs.10/- each |
Rs.4950.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
494561192 |
Equity Shares |
Rs.10/- each |
Rs.4945.600 Millions |
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|
a. Reconciliation of
the shares outstanding at the beginning and at the end of the reporting year:
|
Equity shares |
As at December 31, 2012 |
|
|
|
No. of Shares |
Rs. In Millions |
|
At the beginning of the year |
247280596 |
2472.800 |
|
Bonus shares issued during the year |
247280596 |
2472.800 |
|
Outstanding at the
end of the year |
494561192 |
4945.600 |
Note (i) The Company has allotted bonus shares on September 6, 2012 in the ratio of one equity share for every one equity share of Rs. 10/- each held in the Company on the record date.
b. Terms/rights
attached to equity shares:
The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees.
During the year ended December 31, 2012, the amount of per share interim dividend recognised as distribution to equity shareholders was Rs. 7.00 (2011: Rs. 7.00). The amount of interim dividend distributed to equity shareholders is Rs. 1731.000 Millions (2011: Rs. 1731.000 Millions). In addition, the Company has also proposed a per share final dividend recognised as distribution to equity shareholders of Rs. 3.50 (2011: Rs. 8.00). The amount of final proposed dividend distributed to equity shareholders is Rs. 1731.000 Millions (2011: Rs. 1978.200 Millions). Both dividends aggregating to Rs. 10.50 per share (2011: Rs. 15.00 per share). The said final dividend is on the enhanced paid up share capital post issue of bonus shares in the ratio of 1:1.
In the event of the Company being liquidated, since the equity shares of the Company are fully paid-up, there would be no additional liability on the shareholders of the Company. However, post settlement of the liabilities of the Company, the surplus, if any, would be distributed amongst the shareholders in proportion to the number of shares held by each one of them.
c. Equity shares in
the Company held by its holding/ultimate holding company and/or their
subsidiaries/associates are as below:
(Rs. In Millions)
|
|
As at December 31, 2012 |
|
Castrol Limited, U.K. 350749820 (2011 : 175374910) equity shares of Rs. 10/- each fully paid (holding company) |
3507.500 |
|
BP Mauritius Limited 541896 (2011 : 270948) equity shares of Rs. 10/- each fully paid (subsidiary of ultimate holding company) |
5.400 |
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 December 31, 2012 |
|
Equity shares allotted as fully paid bonus shares by capitalisation of general reserve |
370920894 |
e. Details of
shareholder holding more than 5% shares in the Company are as below:
|
Equity shares |
As at December 31, 2012 |
|
|
|
No. of Shares |
% holding in the class |
|
Equity shares of Rs. 10/- each fully paid up Castrol Limited, U.K. |
350749820 |
70.92% |
As per 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.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
4945.600 |
2472.800 |
2472.800 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1546.700 |
3569.200 |
3062.200 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
6492.300 |
6042.000 |
5535.000 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
0.000 |
0.0.000 |
5535.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1261.200 |
1125.200 |
1203.200 |
|
|
Capital work-in-progress |
309.600 |
293.000 |
165.700 |
|
|
|
|
|
|
|
|
INVESTMENT |
0.000 |
0.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
650.900 |
562.400 |
371.100 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3157.600
|
3009.200 |
2442.000
|
|
|
Sundry Debtors |
2196.300
|
2189.500 |
1784.300
|
|
|
Cash & Bank Balances |
5745.900
|
5490.000 |
6192.600
|
|
|
Other Current Assets |
145.500
|
85.100 |
50.600
|
|
|
Loans & Advances |
1328.700
|
1173.800 |
1017.500
|
|
Total
Current Assets |
12574.000
|
11947.600 |
11487.000 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
4366.300
|
3960.900 |
4320.800
|
|
|
Other Current Liabilities |
1268.700
|
1120.000 |
627.800
|
|
|
Provisions |
2668.400
|
2805.300 |
2743.400
|
|
Total
Current Liabilities |
8303.400
|
7886.200 |
7692.000 |
|
|
Net Current Assets |
4270.600
|
4061.400 |
3795.000
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6492.300 |
6042.000 |
5535.000 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
31208.600 |
29932.700 |
27347.600 |
|
|
|
Other Income |
721.800 |
730.900 |
395.000 |
|
|
|
TOTAL (A) |
31930.400 |
30663.600 |
27742.600 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of materials consumed |
16894.400 |
15954.800 |
|
|
|
|
Purchase of traded goods |
1468.300 |
1258.200 |
|
|
|
|
(Increase)/decrease in inventories |
(120.000) |
(268.100) |
|
|
|
|
Employee benefits expense |
1284.000 |
1159.000 |
|
|
|
|
Other expenses |
5455.800 |
5132.300 |
|
|
|
|
TOTAL (B) |
6739.800 |
6291.300 |
55485.200 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
6947.900 |
7427.400 |
7645.900 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
18.300 |
16.800 |
24.200 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
6929.600 |
7410.600 |
7621.700 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
266.400 |
251.100 |
243.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
6663.200 |
7159.500 |
7378.400 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
2189.300 |
2349.200 |
2475.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
4473.900 |
4810.300 |
4903.100 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
432.400 |
406.500 |
311.800 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Interim Dividend |
1731.000 |
1731.000 |
1731.000 |
|
|
|
Final Dividend |
1731.000 |
1978.200 |
1978.200 |
|
|
|
Interim |
280.800 |
280.800 |
287.500 |
|
|
|
Final |
280.800 |
320.900 |
328.600 |
|
|
|
Final – 2010 |
0.000 |
(7.600) |
0.000 |
|
|
|
Transfer to General Reserve |
447.400 |
481.100 |
490.300 |
|
|
|
Tax on Proposed Special Dividend |
0.000 |
0.000 |
(4.800) |
|
|
|
Tax on Final Dividend 2009 |
0.000 |
0.000 |
(2.400) |
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
435.300 |
432.400 |
406.500 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Suppliers to Foreign Vessels |
98.400 |
133.200 |
108.300 |
|
|
|
Commission |
52.100 |
73.500 |
45.600 |
|
|
|
FOB value of goods exported |
48.100 |
49.100 |
19.600 |
|
|
|
Energy supplies |
12.200 |
0.000 |
0.000 |
|
|
TOTAL EARNINGS |
210.800 |
255.800 |
173.500 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
7731.900 |
7776.700 |
5482.900 |
|
|
|
Capital Goods |
58.300 |
65.800 |
36.300 |
|
|
TOTAL IMPORTS |
7790.200 |
7842.500 |
5519.200 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
9.05 |
9.73 |
19.83 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 1st
Quarter |
30.09.2012 2nd
Quarter |
31.12.2012 3rd
Quarter |
31.03.2013 4th
Quater |
|
|
UnAudited |
UnAudited |
UnAudited |
UnAudited |
|
Net Sales |
8544.000 |
7213.000 |
7609.000 |
7847.000 |
|
Total Expenditure |
6819.000 |
5998.000 |
5915.000 |
6130.000 |
|
PBIDT (Excl OI) |
1725.000 |
1215.000 |
1694.000 |
1717.000 |
|
Other Income |
131.000 |
130.000 |
152.000 |
212.000 |
|
Operating Profit |
1856.000 |
1345.000 |
1846.000 |
1929.000 |
|
Interest |
3.000 |
1.000 |
10.000 |
5.000 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
1853.000 |
1344.000 |
1836.000 |
1924.000 |
|
Depreciation |
60.000 |
66.000 |
80.000 |
71.000 |
|
Profit Before Tax |
1793.000 |
1278.000 |
1756.000 |
1853.000 |
|
Tax |
584.000 |
421.000 |
577.000 |
610.000 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
1209.000 |
857.000 |
1179.000 |
1243.000 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
1209.000 |
857.000 |
1179.000 |
1243.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
14.01 |
15.69 |
17.67
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
21.35 |
23.92 |
26.98
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
48.16 |
54.77 |
58.14
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
1.03 |
1.18 |
1.33
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.00 |
0.00 |
0.00
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.51 |
1.52 |
1.49
|
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info
Agents |
Available in Report
(Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
No |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
-- |
|
14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm / promoter involved in |
-- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
No |
|
25] |
Conduct of the banking account |
-- |
|
26] |
Buyer visit details |
-- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
Yes |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
No |
PERFORMANCE
Sales realizations have increased by 5% over the previous year to Rs. 35930.000 Millions mainly due to an increase in unit sales realizations. However the sales volumes have declined by 2% over the pervious year.
Costs of materials have increased by 8% over the previous year to Rs. 18240.000 Millions mainly driven by the devaluation of Indian Rupee against US Dollar.
]
Despite increasing cost pressures and lower volumes, pro-active margin management strategy helped the Company to maintain its Gross Profit and Unit Gross Profits.
Operating and other expenses increased by Rs. 450.000 Millions as compared to 2011 as the Company continued to invest in its brands, business growth opportunities and people.
Profit before tax decreased by 7% over previous year to Rs. 6663.000 Millions.
Tax rate for the current year has remained at nearly the same level as that of the previous year. Profit after tax decreased by 7% over the previous year to Rs. 4474.000 Millions.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure
and developments – 2012
The lubricant industry in India is broadly divided into three major market sectors: Automotive, Industrial and Marine and Energy applications. The industry is led by four major players (Castrol India Limited, Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited) who together contribute to approximately 55% of the market in terms of volumes. Another 20% of the market is accounted for by multinational companies such as TotalFinaElf, Shell, Gulf Oil and Tidewater oil, amongst others. Numerous other players, largely local in nature, operate in the balance 25% of the market, leading to a very competitive market scenario.
The Indian automotive industry was characterized by a slowdown in growth in 2012. While the year started on a robust note, the second half witnessed a decelerating trend in vehicle sales, exacerbated by high inflation and interest rates. This cut across all the key segments in which Castrol offers lubricant products and services, including commercial vehicles, tractors, off road vehicles, passenger cars and two-wheelers.
Commercial vehicles, tractors and off road vehicles: Weak transporter sentiment, weighed down by rising fuel prices, high interest rates, inflation and higher vehicle prices, had an adverse impact on medium/ heavy commercial vehicle (MHCV) sales. Finance availability and freight rates were the other triggers.
The micro light commercial vehicle (MLCV) segment however continued to grow. Delayed monsoon and drought in major States decelerated tractor off take. Off road vehicles growth was impacted by slowdown/ stalling of key infrastructure related projects and also by policies pertaining to mining sector.
Passenger cars and two-wheelers: Domestic passenger car sales have grown in 2012, but on a low base. This has been abetted by discounts offered by original equipment manufacturers (OEMs) on a recurring basis through the year. The growth has been led by sharp increase in off take of utility vehicles. Post a few high growth years, the two-wheeler industry experienced a modest growth in 2012.
MAJOR INDUSTRY
DEVELOPMENTS
Economic Conditions
Low growth of the Indian Economy: India’s GDP grew at 5% during 2012; the performance in the second half of the year lagging considerably behind the first half. The projected industrial growth was only 0.7%. This slowdown was triggered in part by persistent high inflation that constrained the Reserve Bank of India to retain high interest rates and also by the sharp devaluation of the Indian Rupee. The growth was further weighed down by stalling of mining projects and delays in infrastructure projects.
Delayed monsoon: Apart from the high inflation and interest rates, the delayed monsoon led to low agricultural growth (1.8%) and a significant slowdown in the services sector (6.6%) in 2012.
Hike in fuel prices: Both petrol and diesel prices increased in the range of Rs. 9-10 per litre in 2012; the percentage increase being much higher for diesel, given the lower base price. Price hike in diesel impacted profitability of the commercial vehicle industry, which in turn, had an adverse effect on lubricant consumption in this category.
Crude oil, base oil
and additives
The year 2012 witnessed pressure on input raw materials due to high crude prices coupled with devaluation of Indian rupee against the US Dollar. Both these factors impacted the prices of base oils, performance additives and chemicals, which resulted in higher input cost.
The Company worked decisively on cost effective ‘bought out’ model and value based inventory management, keeping an eye on cash costs and working capital without impacting service levels.
Crude prices reflected the volatile trend especially in first half of the year and after reaching a high of US $126 in March 2012, settled down at an average of US $110 from July 2012 and remained at this level throughout the year, amid geopolitical tensions in Middle East countries.
The initial demand growth for base oils, seen in major markets of Asia and Pacific region, underpinned by the strong crude prices during the first half of 2012, drove up base oil prices by 5% from end 2011. However, overall economic slowdown across the globe since June 2012 impacted base oil consumption and markets were oversupplied. This pushed down prices starting from July 2012 and the trend continued for rest of the year but the full benefit of this reduction was not felt due to consistent crude prices at around US $110.
In a
business environment which was very challenging and unpredictable, the Company
continued providing value to its consumers through strategic sourcing, value
improvement initiatives, extensive focus on service and continuous monitoring.
The Company worked decisively on cost effective ‘bought out’ model and value based inventory management, keeping an eye on cash costs and working capital without impacting service levels.
MARKET BEHAVIOUR AND
OUTLOOK
Automotive lubricants
business outlook
The urban retail automotive segment of the Indian lubricant industry witnessed a small de-growth in volume terms in 2012 while it grew marginally in value terms, during the same period. Tighter fuel specifications, combined with growing demand for more sophisticated motor vehicles, are driving a gradual shift towards higher quality transport lubricants and longer drain intervals, leading to lower lubricants consumption per vehicle and slower growth in overall engine oil demand.
The outlook for the automotive lubricants segment is explained through the three broad dimensions of growth drivers, channels of distribution and competitive activity.
Growth drivers: The key drivers of growth in each segment where the Company operates are explained below:
Commercial vehicle lubricants: Demand for lubricants was more or less stagnant in the medium and heavy commercial vehicle (MHCV) segments, reflecting a slowdown in economic activity and lengthening oil drain intervals resulting from the same.
Commercial vehicle lubricants demand is projected to exhibit muted growth in 2013. This will be driven by vehicle population expansion. However, the volume impact of the growth will be tempered by a continuing shift to higher quality lubricants and longer oil drain intervals.
In the MHCV segment, demand is likely to be under pressure in spite of superior offerings from Tata Motors, Ashok Leyland and Bharat Benz, which have fuelled anticipation in the category. Sales of light commercial vehicles (LCVs) however, are expected to grow in double digit in the near future.
Tractor lubricants: Delayed monsoons resulted in low agricultural growth, thereby adversely impacting overall growth in lubricant consumption for tractors. Going forward, the performance of this segment is contingent on the revival in agricultural growth. Normal monsoon in 2013 should help the tractor business as well as rural vehicle growth.
Off road vehicle lubricants: Demand declined in the off road vehicle segment, reflecting a slowdown in infrastructure sector. Implementation of several projects was delayed during the year leading to lower off take in this sector. Ban on mining activity in some States further impacted demand.
Off road vehicle lubricant demand is projected to remain soft in the short term. However, policy initiatives, including formation of the National Investment Board (NIB) and easing of financing norms, once implemented, should improve infrastructure development activity. Hence the sector is likely to witness moderate growth in the medium term. Several OEMs have announced projects to expand manufacturing capacity to meet long term growth in this sector.
Passenger car lubricants: The market for passenger car lubricants showed a marginal decline in 2012. This reflects lengthening oil drain intervals among the existing car population. The movement towards superior low viscosity lubricants continued during the year.
In 2013, the passenger car lubricants market is likely to be driven by the growth in diesel cars and utility vehicles. The movement towards synthetic lubricants and lengthening oil drain intervals is expected to continue. This is likely to impact value realization favourably. Volume growth will be subject to reversal in the economic slowdown and faster growth in car sales.
Two-wheeler lubricants: The two-wheeler lubricants market was the growth driver for the automotive lubricants category in 2012. However, growth levels were lower compared to those in previous years.
In 2013, they expect the two-wheeler lubricants segment to continue on its growth path, given that OEMs are all geared up to tap two key opportunity areas – rural and scooters. There is a real opportunity to drive two-wheeler sales in rural areas where the ownership of two-wheelers is in less than 15% of households. In addition, scooters are driving growth in the two-wheeler segment as opposed to conventional motorcycles. The emergence of women scooter owners / riders presents a new segment opportunity for differentiated products.
Channels of distribution: Retail remains the dominant sales channel for automotive lubricants. However, OEM dealerships and authorized workshops are becoming increasingly important due to higher retention period for vehicle servicing at the OEM authorized workshops.
Since the growth in number of authorized workshops continues to lag the growth in vehicle population, the small independent workshops have also been witnessing a rapid pace of growth. The historically dominant sales channels, like petrol stations, continue to decline and are no longer a dominant channel for the industry. This trend is expected to continue.
The Company has pioneered new channels of distribution viz. Castrol Bike Points and Castrol Pitstops – service centres with amplified Castrol branding. The footprint for the same has been expanded considerably year on year.
Competitive activity
The competitive situation remains largely unchanged with all major international lubricant players having been present in the market for several years now. The Company continues to be the leading brand in the retail automotive sector, followed by the public sector brands. However, few players have been competing aggressively with lower prices and higher sales promotion to gain market share. In the urban retail automotive segment, the Company has witnessed an improvement in share movement compared to 2011, registering a moderate increase in volume share in a highly challenging year. This growth has been led by the offerings for new generation trucks, tractors and passenger cars.
Non-automotive
lubricants business outlook
Industrial production, measured by the Index of Industrial Production (IIP), slowed down significantly and was expected to grow by 0.7% during 2012 – the lowest since 2005-06. This was driven by a decline in mining (-1.4%) and a low growth in manufacturing. Power generation however grew by 4.5%.
Slow implementation of investment projects led to supply constraints, particularly in the mining segment and pulled down the industry growth. Rising inflation, coupled with high interest rates, dampened consumer sentiment in 2012 and they witnessed a slowdown in consumer spending for high value white goods and automobiles.
Industrial output is poised to improve slightly with respect to production in 2013. Inflation has started easing and will continue to do so. The manufacturing sector, the single largest contributor to industrial production, is set to see a restrained improvement in its performance in 2013.
The marine industry continues operating in a very challenging period. In 2012, many Indian shipping companies and ship management companies saw a scrapping and sale of vessels. The Company continues to focus on customer intimacy and provide best in class products and services. However, they have seen drop in volumes in marine business due to much lower utilization of vessels, higher lay ups and slow steaming in operations. Various estimations on marine industry peg the recovery to 2014 or 2015 when the demand and supply of vessels to cargo will correct to a level which will push up the current prevailing charter rates.
SEGMENT-WISE /
PRODUCT-WISE PERFORMANCE
Automotive lubricants
business performance
In a challenging competitive and cost environment, the Company delivered a top line growth of 6% in the automotive business during the year 2012. However, increased cost of material, mainly on account of Indian Rupee devaluation against US Dollar, and additional investment in brands, innovation, business growth opportunities and staff costs, impacted the operating profit of the Company\ which declined by 1%.
(i) Launches / re-launches to bring a live distinctive propositions: During 2012, the Company refreshed and re\ launched several of its brands including Castrol CRB Plus and Castrol CRB Turbo with Durashield™ Boosters, Castrol Activ with Actibond™ molecules and Castrol Magnatec with its proposition of ‘Instant protection from the moment you start the car’. Castrol RX series was also re-launched with an improved portfolio and customer value proposition. The Company also re-launched its BP lubricant brand with superior ‘Cleanguard’ technology.
(ii) Improved availability: In 2012, the Company mounted a major rural thrust and appointed over 680 new rural sub-distributors. In addition, there was a focus on independent workshops for cars and two-wheelers. Through these initiatives, the Company managed to increase its customer base by 8,000 outlets.
(iii) Improved advocacy: One of the most valuable assets of the Company is the strong relationship it enjoys with its trade partners. The Anmol Ratn dealer loyalty programme has been a huge success, enabling the Company to connect strongly with its core dealers. In addition, the Company launched a number of influencer advocacy programmes like Castrol Smiles, which enabled us to build stronger relationships with mechanics.
(iv) Stronger OEM partnerships: The Company continues to strengthen its relationships with all its key OEM partners like Ford, VW Group, BMW, Tata Motors, JCB, Telcon and Komatsu. The Company demonstrated its technology leadership by conducting a technology day at Ford and setting up learning centres on site at VW and Tata Motors. The Company also demonstrated its safety leadership position by signing a Memorandum of Understanding with Tata Motors to develop and deliver training modules on workshop safety. Focusing on the environment, the Company launched a ‘green’ offer by installing lubricant dispensing equipment at all BMW workshops, significantly reducing supply of plastic packs.
(v) Building on line communities: With the increasing need to reach consumers across multiple touch points, the Company has established a strong presence in social media. On line initiatives linked to the ‘Grand India Roadtrip’ and ‘Ride to MotoGP,’ helped build a strong connect with a growing breed of bikers.
(vi) Leveraging new touch points through cricket: In 2012, the Company leveraged its sponsorship as the official Performance Partner of the International Cricket Council through the ICCTwenty20 World Cup. This association, especially with its flagship brands like Castrol Activ and Castrol Magnatec, has helped build a strong connect with consumers, especially first time vehicle owners.
Non-automotive
lubricants business performance
The non-automotive part of the business was affected by the slowdown in the Industrial, Marine and Building and Construction segments and a tight money market. In 2012, the revenues of the segment were down by 8%.
In this challenging, competitive environment, the Company has created an eco-system to offer holistic solutions to address its customers’ demand for enhancing productivity. The Company has renewed its strategic alliance with ACE Micromatic Group – the largest CNC machine tool manufacturer in India. The Company continues to reach out to its customers through participation in Industry seminars, conferences and trade shows, specific to its target segments.
Linked to productivity enhancement, the Company is now successfully running compatible chemistry lubricants in automobile companies in India. This enables sustainable manufacturing performance while driving out waste costs for its customers.
The Company continues to consolidate its position as the leading supplier of technologically superior and value delivering metal working fluids and high performance lubricants.
The Company has maintained its leadership position in the offshore drilling segment in 2012 by focusing its efforts on value offers despite minimal drilling activity. However, as companies in India continue to hunt for oil and gas reserves, they expect some momentum in this segment in 2013 and onwards. The Company will maintain its focus on value and specialist offers, such as subsea solutions, to further consolidate its market share in the offshore drilling segment.
CONTINGENT
LIABILITIES
(Rs. In Millions)
|
Particular |
31.03.2012 |
31.03.2011 |
|
Excise/sales tax demands made by the authorities, in respect of which appeals have been filed |
222.200 |
219.00 |
|
Claims against the Company not acknowledged as debts estimated at : In respect of third parties – miscellaneous |
18.500 |
16.900 |
Notes:
(a) 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 the cessation of the respective events.
FIXED ASSETS
Tangible Assets
· Freehold Land
· Leasehold Land
· Plant and Machinery
· Building
· Furniture and Fixture
· Office Equipment
· Motor Vehicles
Intangible Assets
· Computer Software
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.56.42 |
|
|
1 |
Rs.86.54 |
|
Euro |
1 |
Rs.73.86 |
INFORMATION DETAILS
|
Report Prepared
by : |
SDA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
62 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.