MIRA INFORM REPORT

Report Date :

23.08.2014

IDENTIFICATION DETAILS

Name :	CASTROL INDIA LIMITED
Registered Office :	Technopolis Knowledge Park, Mahakali Caves Road, Andheri (East), Mumbai – 400093, Maharashtra
Country :	India
Financials (as on) :	31.12.2013
Date of Incorporation :	31.05.1979
Com. Reg. No.:	11-021359
Capital Investment / Paid-up Capital :	Rs.4945.600 Millions
CIN No.: [Company Identification No.]	L23200MH1979PLC021359
TAN No.: [Tax Deduction & Collection Account No.]	MUMC03626A
PAN No.: [Permanent Account No.]	AAACC4481E
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing and marketing of Automotive, Non-Automotive Lubricants and related services.
No. of Employees :	Information declined by the management

RATING & COMMENTS

MIRA’s Rating :

A (65)

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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is an established company having a fine track. Financial position of the company seems to be sound. Trade relations are reported as fair. Business is active. Payment terms are reported to be regular and as per commitments. The company can be considered normal for 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.

INDIAN ECONOMIC OVERVIEW

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

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 31-03-2014.

INFORMATION DENIED

Management Non Co-Operative (91-22-66984100)

LOCATIONS

Registered Office :	Technopolis Knowledge Park, Mahakali Caves Road, Andheri (East), Mumbai – 400093, Maharashtra, India
Tel. No.:	91-22-66984100/ 23632511/ 23632512/ 23632513
Fax No.:	91-22-56984101
E-Mail :	info@castrol.co.in sumit.tyagi@castrol.com aspi.mody@castrol.com rashmi.joshi@castrol.com sandeep.deshmukh@se1.bp.com
Website :	http://www.castrol.com

DIRECTORS

As on: 31.12.2013

Name :	Mr. S. M. Datta
Designation :	Chairman
Name :	Mr. Ravi Kirpalani
Designation :	Managing Director
Name :	Mr. R. Gopalakrishnan
Designation :	Non-Executive Director
Name :	Mr. Uday Khanna
Designation :	Non-Executive Director
Name :	Mr. Ralph Hewins
Designation :	Non-Executive Director
Name :	Mr. Peter Weidner
Designation :	Non-Executive Director
Name :	Mr. Sashi Mukundan
Designation :	Non-Executive Director
Name :	Ms. Rashmi Joshi
Designation :	Director - Finance

KEY EXECUTIVES

Name :	Mr. Sandeep Deshmukh
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 30.06.2014

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	351291716	71.03
Sub Total	351291716	71.03
Total shareholding of Promoter and Promoter Group (A)	351291716	71.03
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	920602	0.19
Financial Institutions / Banks	318154	0.06
Insurance Companies	26440412	5.35
Foreign Institutional Investors	40485840	8.19
Sub Total	68165008	13.78
(2) Non-Institutions
Bodies Corporate	6802748	1.38
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	59663416	12.06
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	8634304	1.75
Any Others (Specify)	4000	0.00
Foreign Corporate Bodies	4000	0.00
Sub Total	75104468	15.19
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
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	494561192	0.00

Shareholding belonging to the category "Promoter and Promoter Group"

Sl.No.	Name of the Shareholder	Details of Shares held		Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital
		No. of Shares held	As a % of grand total (A)+(B)+(C)
1	Castrol Limited	35,07,49,820	70.92	70.92
2	BP Mauritius Limited	5,41,896	0.11	0.11
	Total	35,12,91,716	71.03	71.03

Shareholding belonging to the category "Public" and holding more than 1% of the Total No. of Shares

Sl. No.	Name of the Shareholder	No. of Shares held	Shares as % of Total No. of Shares	Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital
1	Aberdeen Global Indian Equity Fund Mauritius Limited	8445122	1.71	1.71
2	Life Insurance Corporation of India	20859631	4.22	4.22
3	Aberdeen Global Asian Smaller Companies Fund	7095738	1.43	1.43
	Total	36400491	7.36	7.36

BUSINESS DETAILS

Line of Business :

Manufacturing and marketing of Automotive, Non-Automotive Lubricants and related services.

GENERAL INFORMATION

No. of Employees :	Information declined by the management
Bankers :	· Deutsche Bank · HDFC Bank Limited · The Hong Kong and Shanghai Banking Corporation Limited · State Bank of India · Citibank N.A. · DBS Bank Limited · J P Morgan Chase Bank N.A.
Facilities :	--

Banking Relations :	--
Auditors :
Name :	S. R. Batliboi and Company LLP Chartered Accountants
Address :	29, senapati Bapat Marg, Dadar (West), Mumbai – 400028, Maharashtra, India
Tel. No.:	91-22-61920000
Fax No.:	91-22-61921000
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
Fellow Subsidiaries (where transaction exists) :	· Arabian Production and Marketing Lubricants Company · AsPac Lubricants (Malaysia) Sdn. Bhd · BP – Castrol (Thailand) Limited · BP (China) Industrial Lubricants Limited · BP Asia Pacific (Malaysia) Sdn. Bhd · BP Australia Pty Limited · BP Corporation North America Inc · BP Europa SE · BP Europa SE – BP Belgium (Branch) · BP Exploration (Alpha) Limited · BP Exploration Operating Company Limited · 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 · BP Taiwan Marketing Limited · Burmah Castrol Australia PTY Limited · Castrol (Shenzhen) Company Limited · Castrol (Shenzhen) Company Limited Shanghai Pudong Branch · Castrol BP Petco Limited Liability Company · Castrol Industrial North America Inc · Castrol Philippines, Inc. · Lubricants UK Limited · Tata BP Solar India Limited (up to 28.06.2012)

CAPITAL STRUCTURE

As on: 31.12.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
495000000	Equity Shares	Rs.10/- each	Rs.4950.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
494561192	Equity Shares	Rs.10/- each	Rs.4945.600 Millions

Reconciliation of the shares outstanding at the beginning and at the end of the reporting year:

Equity shares	As at December 31, 2013
	No. of Shares	Rs. In Millions
At the beginning of the year	494,561,192	4945.600
Bonus shares issued during the year [refer note (i) below]	--	--
Outstanding at the end of the year	494,561,192	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 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, 2013, the amount of per share interim dividend recognised as distribution to equity shareholders was Rs. 3.50 (2012 : Rs. 7.00). The amount of interim dividend distributed to equity shareholders is Rs. 1731.000 Millions (2012 : Rs. 173.10 Millions). In addition, the Company has also proposed a per share final dividend recognised as distribution to equity shareholders of Rs. 3.50 (2012 : Rs. 3.50). The amount of final proposed dividend distributed to equity shareholders is Rs. 1731.000 Millions (2012 : Rs. 1731.000 Millions). Both dividends aggregating to Rs. 7.00 per share (2012 : Rs. 10.50 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 December 31, 2013 Rs. In Millions
Castrol Limited, U.K. 350,749,820 (2012 : 350,749,820) equity shares of Rs. 10/- each fully paid (holding company)	3507.500
BP Mauritius Limited 541,896 (2012 : 541,896) 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, 2013 No. of Shares
Equity shares allotted as fully paid bonus shares by capitalisation of general reserve	370,920,894

e. Details of shareholder holding more than 5% shares in the Company are as below:

Equity shares	As at December 31, 2013
	No. of Shares	% holding in the class
Equity shares of Rs. 10/- each fully paid-up.
Castrol Limited, U.K	350,749,820	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.

f. Pursuant to the scheme of reduction of share capital u/s 100 to 105 of the Companies Act, 1956 as approved by the shareholders and the Hon’ble High Court of Bombay, the Company will reduce the fully paid-up face value of equity shares from Rs. 10 per share to Rs. 5 per share effective from January 20, 2014. Consequently, the Company will pay Rs. 5 per share to the shareholders in the due course of time.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.12.2013	31.12.2012	31.12.2011
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	4945.600	4945.600	2472.800
(b) Reserves & Surplus	2568.600	1546.700	3569.200
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	7514.200	6492.300	6042.000
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Trade Payables	0.000	0.000	33.600
(d) Other long term liabilities	108.300	82.900	90.600
(e) long-term provisions	24.800	34.300	34.200
Total Non-current Liabilities (3)	133.100	117.200	158.400
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	4728.300	4366.300	3927.300
(c) Other current liabilities	1209.500	1185.800	1029.400
(d) Short-term provisions	2565.000	2634.100	2771.100
Total Current Liabilities (4)	8502.800	8186.200	7727.800
TOTAL	16150.100	14795.700	13928.200
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1432.200	1250.700	1108.300
(ii) Intangible Assets	2.400	10.500	16.900
(iii) Capital work-in-progress	318.700	309.600	293.000
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	529.600	650.900	562.400
(d) Long-term Loan and Advances	875.900	848.500	683.200
(e) Other Non-current assets	0.000	2.600	0.000
Total Non-Current Assets	3158.800	3072.800	2663.800
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	3740.100	3157.600	3009.200
(c) Trade receivables	2372.400	2166.200	2189.500
(d) Cash and cash equivalents	5942.200	5745.900	5490.000
(e) Short-term loans and advances	864.400	510.300	490.600
(f) Other current assets	72.200	142.900	85.100
Total Current Assets	12991.300	11722.900	11264.400
TOTAL	16150.100	14795.700	13928.200

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.12.2013	31.12.2012	31.12.2011
	SALES
	Income	31796.200	31208.600	29932.700
	Other Income	836.400	721.800	730.900
	TOTAL (A)	32632.600	31930.400	30663.600
Less	EXPENSES
	Cost of Materials Consumed	16814.200	16894.400	15954.800
	Purchases of traded goods	1384.700	1468.300	1258.200
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(314.200)	(120.000)	(268.100)
	Employees benefits expense	1459.700	1284.000	1159.000
	Other expenses	5577.000	5452.700	5132.300
	Exceptional Item	-228.000	0.000	0.000
	TOTAL (B)	24693.400	24979.400	23236.200
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)	7939.200	6951.000	7427.400
Less	FINANCIAL EXPENSES (D)	17.100	21.400	251.100
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)	7922.100	6929.600	7176.300
Less/ Add	DEPRECIATION/ AMORTISATION (F)	304.500	266.400	16.800
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)	7617.600	6663.200	7159.500
Less	TAX (I)	2531.900	2189.300	2349.200
	PROFIT/ (LOSS) AFTER TAX (G-I) (J)	5085.700	4473.900	4810.300
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD	435.300	432.400	406.500
Less	APPROPRIATIONS
	Interim Dividend	1731.000	1731.000	1731.000
	Final Dividend	1731.000	1731.000	1978.200
	Interim	294.200	280.800	280.800
	Final	294.200	280.800	320.900
	Final - 2012	13.400	0.000	-7.600
	Transfer to General Reserve	508.600	447.400	481.100
	BALANCE CARRIED TO THE B/S	948.600	435.300	432.400
	EARNINGS IN FOREIGN CURRENCY
	Supplies to foreign vessels	37.800	98.400	133.200
	Commission	46.700	52.100	73.500
	FOB value of goods exported	32.000	48.100	49.100
	Energy supplies	16.500	12.200	0.000
	Others	30.800	25.500	0.000
	TOTAL EARNINGS	163.800	236.300	255.800
	IMPORTS
	Raw Materials	7587.900	7731.900	7776.700
	Capital Goods	66.300	58.300	65.800
	TOTAL IMPORTS	7654.200	7790.200	7842.500
	Earnings / (Loss) Per Share (Rs.)	10.28	9.05	9.73

KEY RATIOS

PARTICULARS		31.12.2013	31.12.2012	31.12.2011
PAT / Total Income	(%)	15.58	14.01	15.69
Net Profit Margin (PBT/Sales)	(%)	23.96	21.35	23.92
Return on Total Assets (PBT/Total Assets}	(%)	49.78	48.16	54.77
Return on Investment (ROI) (PBT/Networth)		1.01	1.03	1.18
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		1.53	1.43	1.46

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.12.2011	31.12.2012	31.12.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	2472.800	4945.600	4945.600
Reserves & Surplus	3569.200	1546.700	2568.600
Net worth	6042.000	6492.300	7514.200
long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.12.2011	31.12.2012	31.12.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	29932.700	31208.600	31796.200
		4.263	1.883

NET PROFIT MARGIN

Net Profit Margin	31.12.2011	31.12.2012	31.12.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	29932.700	31208.600	31796.200
Profit	4810.300	4473.900	5085.700
	16.07%	14.34%	15.99%

LOCAL AGENCY FURTHER INFORMATION

CURRENT MATURITIES OF LONG-TERM DEBT DETAILS – NOT AVAILABLE

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	No
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	Yes
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

LITIGATION DETAILS
Lodging No:-	STRL/71/2013	Failing Date:-	28/11/2013	Reg. No.:-	STR/13/2014	Reg. Date:-	25/02/2014
Petitioner:-	THE COMMISSIONER OF SALES TAX, MAHARASHTRA		Respondent:-	M/S CASTROL INDIA LTD-
Petn.Adv:-	GOVT PLEADER (0)
District:-	MUMBAI
Bench:-	DIVISION		Category:-	SALES TAX REFERENCES
Status:-	Pre-Admission
Act:-	Code of civil Procedure 1908

PERFORMANCE

Sales realisations of the Company have increased by about 2% over the previous year to Rs. 36640.000 Millions, mainly due to an increase in unit sales realizations. However, the sales volumes have declined by 3% over the previous year. Costs of materials have decreased by about 2% over the previous year to Rs. 17880.000 Millions. Despite the challenging economic environment, a pro-active margin management strategy helped the Company to improve its unit gross margin and gross profit. Operating and other expenses increased by about Rs. 340.000 Millions as compared to the previous year mainly due to inflation. Profit Before Tax increased by about 14% over previous year to Rs. 7620.000 Millions.

Tax rate for the current year has remained at nearly the same level as that of the previous year. Profit after tax increased by 14% over the previous year to Rs. 5090.000 Millions.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry structure and developments – 2013

The Company operates across all three major market sectors of the lubricant industry – Automotive, Industrial and Marine and Energy.

The overall industry is led by the Company and Indian national oil companies, who contribute to approximately 55% of the market in terms of volumes. Another 20% of the market, by volume, is accounted for by private multinationals that are mostly integrated oil companies and the rest of the market is constituted by numerous smaller players, largely local in nature. There are over 30 established players in the Indian lubricant industry, making it very competitive. The market for automotive applications, where the Company has earned a wellentrenched position over the years, is the predominant one amongst the three sectors within the lubricant industry.

Demand drivers: India is an important market for the lubricant industry worldwide, contributing to over 5.5% of global automotive lubricant demand and over 4% of industrial lubricant demand.

Demand for automotive lubricants is driven by the dual forces of growth in vehicle population and the extent of use of these vehicles.

The demand for lubricants in the Industrial sector is primarily driven by industrial production. The Index of Industrial Production (IIP) has been observed to have a strong correlation to consumption demand for industrial lubricants in India.

In case of Marine applications, global and local ship movements are the drivers of demand. Large-scale global movement of goods happens predominantly by sea. This demand for shipping services drives fleet utilization and freight rates for shipping companies, in turn driving consumption of marine lubricants. With Energy lubricants, the installed base of off-shore rigs along the coast-line of India and their up-time, drive demand for such products.

Supply drivers: Lubricants are manufactured by blending base oils and additives, with base oil being the main component. India is a net base oil deficit market and many additives used in lubricants are sourced from outside India. This necessitates largescale import of raw materials and thus also exposes lubricant businesses to fluctuations in foreign exchange rates.

Major industry developments

The year 2013 was a challenging business environment due to the twin effects of a slower GDP growth rate of around 4.7% and relatively high inflation rates prevailing through the year. In addition, the lubricant industry faced many other strong headwinds from demand and supply drivers alike during the year.

Automotive sector

Vehicle sales in India grew by 1.7% in the year 2013 compared to the previous year. With respect to sales in the previous year, commercial vehicle sales declined by 15%, passenger car and utility vehicle sales declined by 8%, while two-wheeler sales grew by 4%. In addition, the slowing down of the economic growth translated into weakening of goods movement across the country and also a slowing down of infrastructure projects. This has had a direct impact on lubricant consumption in the commercial vehicle sector and other business-to-business segments.

The choice of lubricant and its specification plays a key role in enabling Original Equipment Manufacturers (OEMs) to comply with tightening regulations on tail-pipe emissions and to meet demands for lower cost of operations. This places onus on the lubricant industry to respond with products that are able to cope with the increasing sophistication of these modern vehicles. These improved products, typically ‘synthetic’ lubricants, are also able to maintain their physicochemical and performance properties for a longer period of usage than earlier generation lubricants, thus lengthening oil drain intervals.

This has had an impact on structural demand in the industry. Lubricant volume consumption for the same rate of use decreases while per unit cost and price realization increases. Therefore, other drivers remaining unchanged, the growth in demand for lubricants is expected to lag vehicle population growth rate in the foreseeable future.

Commercial vehicles

Trucks: The medium and heavy commercial vehicle (M and HCV) population in India grew by circa 2%, while the micro-light commercial vehicles grew by 22% during 2013. Continuing weak transporter sentiment due to higher interest rates, vehicle and fuel prices and weaker freight rates, continued to adversely impact M and HCV usage in 2013. The Company estimates that this has resulted in a circa 5% decline in consumption of truck engine oils.

Tractors: Tractor sales have experienced 15% growth in 2013 over previous year, on the back of a good monsoon and better price realization for the Rabi crop in large agriculture-driven states. As a result, tractor population in India is estimated to have increased by 6% during the year.

Off-road vehicles: Off-road vehicle sales and utilization were also negatively impacted by the slowing down of many material infrastructure-related projects and due to the bottle-necks in the mining sector.

Non-automotive sectors

Industrial lubricants

The year 2013 was one of unprecedented challenges for some of the key industrial sectors and for the Indian economy alike. Industrial activity remained subdued for most of the year, reflecting a flat growth in aggregate output. Industrial output measured by the Index of Industrial Production (IIP), has grown by circa 0.6% in 2013. This was the lowest growth recorded for the index in more than a decade. This is believed to have been triggered by sustained inflation, higher raw material prices and lower demand for consumer durables and capital goods. All of the above has had a knock-on effect on sectors such as automobile manufacturing, machinery manufacturing and fabricated metal goods (FMG) industries, causing a decline in their respective outputs.

This has impacted the overall demand for Industrial lubricants which remained flat during the year.

Marine and Energy lubricants

Global shipping industry is still passing through one of its worst phases in several decades. The Indian shipping industry has followed the global pattern to a large extent, where global trade had grown 12.6% in 2010, before slowing down to 3.2% in 2012.

The ban on iron ore export from India, changes in tax structure of coal exporting countries and high cost of funding have exacerbated the problems of the Indian shipping business.

During 2013, many Indian shipping and ship management companies increased scrapping or sale of vessels, with several companies turning delinquent.

Market behaviour and outlook

GDP growth rate is expected to have bottomed out in 2013 and to average slightly higher in 2014 than it was for 2013. The Wholesale Price Index for inflation is expected to increase marginally from the average of 5.5% in 2013 to about 6.3%. Consumer sentiment is expected to be muted, especially in the first half of 2014.

Automotive sector

The outlook for the automotive sector has been examined closely by the Company through the three broad dimensions of demand drivers, distribution channels and competitive activity.

Non-automotive sector

Industrial lubricants

The manufacturing activity is expected to gather momentum during 2014, owing to a pick-up in the domestic demand and likely growth in exports. Improved rural income due to good agricultural output and an improvement in consumer sentiment in the urban areas are expected to generate higher demand. Besides, the investment demand is also expected to show a gradual improvement. Some of the key Industrial sectors like automobiles, metals, machinery manufacturing and cement are expected to capitalize on the higher demand and record better growth during 2014.

Marine and Energy lubricants

Decisions on policy changes are under discussion within the Oil and Gas Ministry and with other key stakeholders. Policy decisions and investments in this sector would be a significant stimulus to the Energy lubricants sub-sector.

Performance of segments and categories

I. Automotive lubricants

Overview

The Company delivered a strong performance across the personal mobility segments of two-wheelers and passenger car oils in the year 2013, driven by performance of its Power Brands – Castrol Activ, Castrol Power1, Castrol GTX and Castrol Magnatec. The strong head-winds in the commercial vehicle oils segment, impacted the Company’s performance in this category. This was offset to some extent through new product introductions and a play in the mid-price segment.

There were also significant challenges that the Company encountered in the Heavy Duty category which caters to large fleets, mining, and building and construction equipment applications. This is due to the twin effects of lowered economic activity in this category and rising input costs for the industry.

The Castrol brand continued to pioneer and drive the movement towards synthetics in response to the demands from vehicle manufacturers (OEMs) for better performing and environment-friendly products, while also selectively making a play in the midprice segment in certain categories. The Company continued its close association with its OEM partners, especially Maruti Suzuki, Jaguar Land Rover, BMW, Ford and the Volkswagen group and introduced coengineered products with Tata Motors during the year.

The Company also further deepened relations with key retail channel partners through the highly successful Anmol Ratn programme. The Castrol Engine Experts Club was launched during the second half of 2013 to further endear brand Castrol to mechanics, who are key influencers in the choice of oil and who are the primary handlers of lubricants in many categories.

The following sub-sections of the report detail out the performance of each category within automotive lubricants.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2014

(Rs. In Millions)

Particular	Quarter Ended
	31.03.2014
	(Unaudited)
Income from operations
Sales/Income from Operations	9446.000
Less: Excise duty	1295.000
Net Sales/Income from Operations	8151.000
Other operating income	19.000
Total Income	8170.000
Expenditure
Changes in inventories of finished goods, work in progress and stock in trade	(69.000)
Cost of materials consumed	4587.000
Purchase of stock in trade	364.000
Employee benefits expenses	391.000
Depreciation and amortization expenses	84.000
Other expenses
Advertisement and Sales Promotion	621.000
Carriage, Insurance and Freight	265.000
Other Expenditure	549.000
Total Expenses	6792.000
Profit/ (Loss) from Operations before Other Income, Interest and Exceptional Items (1-2)	1378.000
Other Income	156.000
Profit/ (Loss) from ordinary activities before finance costs and Exceptional Items (3+4)	1534.000
Finance Cost (net)	4.000
Profit/ (Loss) from ordinary activities after finance costs and but before Exceptional Items (5-6)	1530.000
Exceptional Items	-
Profit/ (Loss) from ordinary activities before tax (7+8)	1530.000
Tax Expense	528.000
Profit/ (Loss) from ordinary activities after tax (9-10)	1002.000
Paid-up Equity Share Capital (Face Value per share Re.10)	2473.000
Earnings Per Share – (Before Extraordinary Items)
Basic and Diluted	2.03
PARTICULARS OF SHAREHOLDING
Public Shareholding
-Number of Shares	143269476
- Percentage of Shareholding	28.97%
Promoters and Promoter Group Shareholding
a) Pledged/Encumbered
- Number of Shares	NIL
- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	NA
- Percentage of Shares (as a % of the Total Share Capital of the Company)	NA
b) Non Encumbered
- Number of Shares	351291716
- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100.00%
- Percentage of Shares (as a % of the Total Share Capital of the Company)	71.03%

SEGMENT-WISE DETAILS OF REVENUE, RESULT AND CAPITAL EMPLOYED UNDER CLAUSE 41 OF THE LISTING AGREEMENT

(Rs. In Millions)

Sr. No.	Particular	Quarter Ended
		31.03.2014
		(Unaudited)
1.	Segment Revenue
	Automotive	7197.000
	Non Automotive	973.000
	Total	8170.000
2.	Segment Result
	Automotive	1254.000
	Non Automotive	145.000
	Total	1399.000
	Un-allocable income net of Unallocated (Expenditure)	135.000
	Finance Charges	4.000
	Profit from ordinary activities before tax (Including Exceptional items)	1530.000
3.	Segment Capital Employed
	Automotive	2504.000
	Non Automotive	1028.000
	Add: Unallocable Assets less liabilities	2091.000
	Total capital employed	5623.00

Particulars	Quarter Ended 31.03.2014
Pending at the beginning of the quarter	Nil
Received during the quarter	5
Disposed of during the quarter	3
Remaining unresolved at the end of the quarter	2

Notes:

1. The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on May 13, 2014.

2. The above results have been subjected to "Limited Review" by the Statutory Auditors of the Company.

3. Tax Expenses include Current Tax and Deferred Tax.

4. The figures for the quarter ended December 31, 2013 are the balancing figures between the audited figures in respect of the full financial year ended December 31, 2013 and the published year to date figures up to the third quarter ended September 30, 2013.

5. Pursuant to the scheme of reduction of share capital under sections 100 to 105 of the Companies Act, 1956, as approved by the shareholders and Hon'ble High Court of Bombay, the fully paid-up face value of Equity Shares was reduced from Rs. 10/-per share to Rs. 5/- per share, effective from January 20, 2014. Consequently, the balance of Rs. 5/- per share was paid during the current quarter, to the eligible shareholders as per the record date of March 03, 2014.

6. Previous period's figures have been regrouped wherever necessary.

CONTINGENT LIABILITIES

(Rs. In Millions)

Particular	31.12.2013	31.12.2012
Excise/sales tax demands made by the authorities, in respect of which appeals have been filed	167.700	222.200
Claims against the Company not acknowledged as debts estimated at : In respect of third parties – miscellaneous	9.800	18.500

FIXED ASSETS

Tangible assets

· Freehold land

· Leasehold land

· Building

· Plant and machinery

· 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, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records 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.60.44
UK Pound	1	Rs.100.24
Euro	1	Rs.80.35

INFORMATION DETAILS

Information Gathered by :	SVA
Analysis Done by :	RAS
Report Prepared by :	VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	YES
--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		65

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	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.