Castrol India : Making Tomorrow Bigger - Annual Report 2021 pdf / 2.2 MB

Castrol India Limited

44th Annual Report

January - December 2021

MAKING

TOMORROW

BIGGER

Castrol India Limited	Annual Report 2021 - Overview

CORPORATE INFORMATION

Board of Directors

1. Gopalakrishnan
   Independent Director & Chairman

Uday Khanna

Independent Director

Sangeeta Talwar

Independent Director

Rakesh Makhija

Independent Director

Sashi Mukundan

Nominee Director

A S Ramchander

Nominee Director

Udayan Sen

Nominee Director

Sandeep Sangwan

Managing Director

Deepesh Baxi

Chief Financial Officer &

Wholetime Director

Mayank Pandey

Wholetime Director

(w.e.f. 9 August 2021)

COMPANY SECRETARY & COMPLIANCE OFFICER

Hemangi Ghag

auditors

Deloitte Haskins & Sells LLP.

Chartered Accountants

Bankers

Deutsche Bank

HDFC Bank Ltd.

The Hongkong and Shanghai Banking Corporation Ltd.

State Bank of India

Citibank N.A.

DBS Bank Ltd.

J P Morgan Chase Bank N.A. Standard Chartered Bank

Registered Office

1st Floor, Technopolis Knowledge Park,

Mahakali Caves Road,

Andheri (East),

Mumbai - 400 093

CIN: L23200MH1979PLC021359

Tel: [phone]

Fax: [phone]

[e-mail]

www.castrol.co.in

Registrar and

Transfer Agent

Link Intime India Private Limited

C-101, 247 Park,

LBS Marg, Vikhroli (West),

Mumbai - 400 083

Tel: [phone]

Fax: [phone]

Toll-free number: 1800 1020 878

[e-mail]

www.linkintime.co.in

CONTENTS

OVERVIEW		REPORTS		FINANCIALS
Message from Managing Director	01	Management discussion and	14	Balance sheet	88
Board of Directors	02	analysis report		Statement of profit and loss	89
Leadership team	06	Financial highlights	23	Cash flow statement	90
Our response to COVID-19	07	Board's report	25	Notes to financial statements	93
Accelerating digital transformation	09	Corporate governance report	50
Powerful brands	11	Business responsibility report	66	Notice for Annual	133
Awards and accolades	13	Auditor's report	80	General Meeting

Castrol India Limited	Annual Report 2021 - Overview

MESSAGE FROM THE MANAGING DIRECTOR

Dear Shareholders,

The continued onslaught of COVID-19 made 2021 a uniquely challenging year. India was hit hard by the second wave of the pandemic in March 2021, which also affected your Company's 2Q performance. Overall, the year was marked by rising inputs costs and supply chain bottlenecks, which put pressure on our margins.

Despite these challenges, the Castrol India team demonstrated remarkable resilience and delivered its highest-ever revenue till date of Rs. 4,192 Crores in 2021, marking a growth of 40% over 2020. Further, we delivered strong volumes in 2021 bringing back our market share to 2019 pre-pandemic levels.

What did your Company do differently in 2021? We leveraged multiple growth opportunities through the expansion of independent workshops, launch of premium branded products, and introduction of new formats such as the Castrol Auto Service centers and Castrol Express Oil Change outlets. We not only invested in our brands, but we also strengthened our service & maintenance offerings to customers and scaled up adjacencies in the automotive aftermarket.

In 2021, we implemented the single biggest change to our B2C sales model in over twenty years by introducing a new route- to-market approach. This was aimed at bringing in higher sales force efficiency, enhancing productivity and digitalizing our business processes to make our operations more agile.

As industry leaders in the lubricants space, Castrol India is continuously evolving to be future-ready. In 2021, your Company was one of the first players in India to launch new products with BS-VI ready technology for both passenger cars and commercial vehicles. To cater to the rapidly growing electric vehicle (EV) segment, we are exploring options with two-wheeler EV manufacturers for developing EV fluids. At the same time, we continue to supply EV fluids to two leading passenger car OEMs in India. We are also supporting India's growing EV eco-system by collaborating with existing and new partners.

2021 saw your Company get external recognition for safety, quality, regulatory compliance, consistent delivery, and performance. Castrol India was conferred with the 'Ramp Up Agility' award by a leading OEM for enabling supply continuity for its ICE & Electric Car manufacturing operations. Further, the Castrol plant at Paharpur was awarded by the Indian Chamber of Commerce with its prestigious National Occupational Health & Safety Awards for 2021.

Advancing our sustainability agenda in India, we introduced targeted interventions in our operations, packaging, and distribution, with a focus on saving waste, reducing carbon, and improving people's lives. On the social front, our engagement with truck drivers and independent auto mechanics over the years, including our recent efforts to bring COVID-19 awareness, and community vaccination drives, helped us forge an even stronger bond with them. Your Company's efforts were acknowledged by the British Business Group, Delhi, who awarded us with the 2021 'Excellence in CSR award' for our programmes: Castrol Eklavya and Castrol Sarathi Mitra.

All these achievements reflect the power and salience of the Castrol brand and the relentless hard work of the Castrol India team. We delivered these results while looking after our people, enabling vaccination for our employees & contractors, and ensuring that everyone was safe and well during testing times. With vaccination rates going up in India and the economic environment moving towards normalcy, we remain confident of the long-term growth opportunities for Castrol India.

I sincerely thank all our employees, shareholders, distributors, customers, and wider stakeholders for their continued trust and support. We will continue to strengthen our business by exploring avenues for future growth and offering sustained value and returns to our shareholders and the wider society.

Sandeep Sangwan

Managing Director,

Castrol India Limited

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Castrol India Limited	Annual Report 2021 - Overview

BOARD OF DIRECTORS

1. Gopalakrishnan Chairman

R. Gopalakrishnan (Gopal) is an Independent Director & Non-Executive Chairman for Castrol India Limited. He is also an Independent Director for the Press Trust of India (PTI). He brings with him an extensive corporate experience of nearly 55 years, of which 31 years were with Hindustan Lever Limited (HLL) / Unilever and 18 years with the Tata Group. He has a rich experience of over 34 years of serving across the boards of several companies.

Notable roles that Mr. Gopalakrishnan has held in his corporate career include that of

Chairman of Unilever Arabia, based in Jeddah and Managing Director of Brooke Bond

Lipton India, based in Bengaluru. He has also served as the Vice Chairman of HLL and

Executive Director of Tata Sons Limited and other Tata companies.

He is passionate about mentoring start-ups and enjoys mentoring corporate managers through his talks and writing. He is actively engaged in motivational speaking and has delivered over 100 keynotes in India and abroad. Mr. Gopalakrishnan is also a prolific management writer and has authored 17 books and penned several newspaper columns and discourses on a variety of corporate topics.

He studied Physics at St. Xavier's College, Kolkata and did his Engineering from the Indian Institute of Technology (IIT), Kharagpur. Later, he completed an Advanced Management Program at the Harvard Business School, USA.

Uday Khanna

Independent Director

Uday Khanna is a Chartered Accountant and an Independent Director on the board of

Castrol India Limited.

Mr. Khanna has served as the Managing Director & CEO of Lafarge India from July 2005 to July 2011. He had joined the Lafarge Group at its headquarters in Paris in June 2003 as Senior Vice President for Group Strategy. Prior to that, he worked for almost 30 years with Hindustan Lever Limited / Unilever in a variety of financial, commercial, and general management roles both in India and international markets.

His last role at Unilever was as Senior Vice President, Finance, Unilever Asia, based in

Singapore. Mr. Khanna has earlier been on the Board of Hindustan Unilever Limited as Director Exports, after having served as Financial Controller and Treasurer of the company. He also worked as Vice Chairman of Lever Brothers in Nigeria and General Auditor for Unilever North America based in the USA and as Non-Executive Chairman of Bata India Limited.

Mr. Khanna has been the President of the Indo-French Chamber of Commerce & Industry from 2008 to 2009, and the President of the Bombay Chamber of Commerce & Industry from 2012 to 2013.

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Castrol India Limited	Annual Report 2021 - Overview

BOARD OF DIRECTORS

Sangeeta Talwar

Independent Director

Sangeeta Talwar is an Independent Director on the board of Castrol India Limited. In a career spanning 30+ years, Mrs. Talwar has worked for several large corporations in Europe, America, and Asia. She brings with her multi-disciplinary experience across Marketing, Sales, Human Resources and General Management.

During her early years with Nestlé India, she helped craft, create, launch, and establish

Maggi Noodles. She went on to hold several senior roles at Nestlé including Regional

Sales Head, Vice President Human Resources and Marketing Director. She also worked at

Nestlé's global headquarters in Switzerland as a Strategic Advisor.

After Nestlé, she joined Mattel India as the CEO & Managing Director. Subsequently, she moved to Tata Tea as an Executive Director and was appointed as President South Asia for the consolidated Tata Global Beverages. During her tenure, Tata Tea became the largest tea brand in India and also won international acclaim for its 'Jaago Re' campaign.

Mrs. Talwar also worked in the social sector as the Managing Director of NDDB Dairy Services and spearheaded the design and establishment of an innovative business model for creating sustainable livelihood for dairy farmers in rural India.

She is the recipient of several distinctions including, 'Business Today 30 Most Powerful Women in Indian Business'. She now serves as an Independent Director on the boards of several large companies in sectors such as FMCG, Fashion, Energy, Education and Automobiles. She is a qualified Leadership Coach and is a passionate speaker on Diversity.

She holds a graduate degree in Economics and an MBA from the Indian Institute of Management (IIM), Kolkata. She has also completed an Executive Program from the Wharton School, USA.

Rakesh Makhija

Independent Director

Rakesh Makhija is an Independent Director on the board of Castrol India Limited. He also serves as an Independent Director on the Board of Axis Bank Limited (since 2015) and as the Non-Executive Chairman of Axis Bank since July 2019. Mr. Makhija also serves on the Board of A.TREDS Limited.

During his career spanning over four decades, Mr. Makhija has been an active contributor to the Industrial and Technology sectors, both internationally and in India. Mr. Makhija has held several top management positions within the SKF Group. He was the President for the Industrial market (Strategic industries) and a member of the SKF Group executive committee, based in Gothenburg, Sweden.

Prior to that, Mr. Makhija was President of SKF Asia with overall responsibility for China and India, based out of Shanghai. He served as the Managing Director of SKF India from 2002 to 2009. He was the recipient of the prestigious 'CNBC Business leader award for Talent Management' in 2007.

Before joining SKF, Mr. Makhija was the CEO & Managing Director of Tata Honeywell Limited. He was subsequently appointed as the Country Manager & Managing Director of Honeywell International, with responsibility for South Asia. Prior to Honeywell, Mr. Makhija worked with Kinetics Technology International BV (now Technip), a process engineering and contracting company in the Netherlands for over eight years.

Mr. Makhija is a Chemical Engineer from the Indian Institute of Technology (IIT), Delhi.

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