Castrol India Ltd

To the Shareholders,

The Board of Directors ('Board') of your Company is pleased to present the Forty Seventh Annual Report of Castrol India Limited ('Castrol' or 'Company') for the financial year ended 31 December 2024 ('year under review' or 'the year' or 'FY24').

In compliance with the applicable provisions of the Companies Act, 2013, (including any statutory modification(s) or re-enactment(s) thereof, for time being in force) ('Act') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('the SEBI Listing Regulations'), this report covers the financial results and other developments during the financial year ended 31 December 2024 and upto the date of the Board meeting held on 3 February 2025 to approve this report, in respect of Castrol India Limited.

1. Financial Results

The Company's financial performance for the financial year ended 31 December 2024 is summarized below:

2. Business Performance

Revenue from operations of the Company has increased by 6% mainly on account of volume increase and strategic price interventions. Costs of materials were higher by about 4% over the previous year mainly due to incremental volumes, and adverse forex, offset by cost optimization and operational efficiencies. Operating and Other expenses increased by 128 Crore as compared to the previous year on account of investment in people, safety, brand and business growth opportunities. Profit before tax increased by 6% over previous year to 1,258 Crore. The Company's performance has been discussed in detail in the 'Management Discussion and Analysis Report'. The Company does not have any subsidiary or associate or joint venture company. There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the year and date of this report. Further, there has been no change in the nature of business of the Company.

Reserves

There is no amount proposed to be transferred to the reserves.

Changes in Share Capital

During the year under review, there was no change in the paid-up share capital of the Company.

3. Returns to Investors (Dividend)

The Board of Directors of the Company has approved and adopted the Dividend Distribution Policy in line with Regulation 43A of the SEBI Listing Regulations. The policy is uploaded on the website of the Company at https://www.castrol.com/content/dam/castrol/ country-sites-new/en_?n/?nd?a/home/documents/ ?nvestors/div?dend_d?str?but?on_pol?cy.pdf.

The Board at its meeting held on 3 February 2025 has recommended a Final dividend of '9.5 per share (190%) of the face value of '5 each (which includes a Special dividend of '4.5 per share), for the financial year ended 31 December 2024 (2023: Final dividend was '4.50 per share) subject to the approval of shareholders at the ensuing Annual General Meeting of the Company. The Board also declared Interim dividend of '3.50 per share for the financial year ended 31 December 2024 on 30 July 2024 (2023: Interim dividend was '3.00 per share).

The dividend payout for the year under review is in accordance with the Company's policy to pay sustainable dividend linked to long-term growth objectives of the Company to be met by internal cash accruals.

4. Unclaimed Dividend

Pursuant to applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), all unpaid / unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund ('IEPF' or 'Fund') established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/unclaimed account. Further, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

In accordance with the IEPF Rules, the Company had sent individual notices and also advertised in the newspapers seeking action from the shareholders who have not claimed their dividends for seven consecutive years or more.

Thereafter, the Company has transferred such unpaid or unclaimed dividends, the details of which are given below:

Further, the Company has transferred 2,37,555 equity shares to the demat account of IEPF during the year under review.

The shareholders/claimants whose shares or unclaimed dividend, have been transferred to the IEPF, may claim the shares or apply for refund from the IEPF Authority, by following the procedure prescribed in the IEPF Rules. The shareholders may request the Company for the issue of an Entitlement Letter by submitting all the required documents, before making an application to the IEPF Authority.

During the year 2025, the Company will transfer following unclaimed dividend and the underlying shares to IEPF, within statutory timelines:

The shareholders are requested to ensure that they claim the dividends and shares referred above, before they are transferred to the said Fund. The details of the other unclaimed dividends that are due to be transferred to IEPF, in coming years are provided in the report on Corporate Governance.

The Company has appointed a Nodal Officer under the provisions of the Rules, the details of which are available on the website at https://www.castrol. com/en_?n/?nd?a/home/investors/contact-us.html. Further the Company has also appointed Deputy Nodal Officer for verification of claim(s) and other activities.

Details of shares in respect of which dividend has not been claimed, are provided on website of the

Company at https://www.castrol.com/en_in/india/ home/investors/statement-of-unclaimed-dividend- and-shares.html. The shareholders are encouraged to verify their records and claim their dividends of all the earlier seven years, if not claimed.

5. Supply Chain

The key priorities for supply chain have been: a) enable topline growth - improve customer experience & resilience, supporting margin expansion; b) contribute to bottom line - by reducing cost of operations & focusing on product cost competitiveness, improving productivity of people and assets and c) be responsible - by reducing manufacturing energy intensity, emissions and virgin plastic footprint. The Company continues to focus on the same along with strong input bias on compliant operations, delivering expected product quality and safety mindset, consistent focus on Sales & Operations Planning (S&OP) process. New product introduction with digital transformation as a key lever has helped the team support the customer demand and fulfil business growth ambitions.

The logistics operations continue to maintain an exemplary safety record, with zero reportable accidents. The focus on cost competitiveness, digital transformation and service excellence has led to significant measurable outcomes. These efforts have enabled the business to maintain cost stability in an increasingly inflationary environment, demonstrating a commitment to operational excellence without compromise.

Manufacturing at Castrol continues to be a key enabler for business in its endeavor to service customer optimally. The operational efficiencies across the manufacturing plants have delivered a breakout performance in this year. The plants have also made great progress on the sustainability agenda with alternative energy sourcing, ambient temperature blending, energy efficiency and water consumption optimization projects. People have been at the core of the manufacturing progress, and the Capability Building and Total Employee Involvement program have helped substantially in improving productivity and cost management.

6. Directors and Key Managerial Personnel

As on 31 December 2024, the Board comprised three Executive Directors, three Non-Executive Independent Directors and two Non-Executive Non- Independent Directors.

The following changes have taken place in the Directors and Key Managerial personnel during the year under review and up to the date of this report:

Mr. R. Gopalakrishnan (DIN: 00 027858) completed his second term as an Independent Director and ceased to be Director and Chairperson of the Board, effective close of business hours on 30 September 2024. Mr. Rakesh Makhija (DIN: 00117692), Independent Director was appointed as the Chairperson of the Board with effect from

I October 2024.

Mr. Uday Khanna (DIN: 00079129) completed his second term as an Independent Director, and ceased to be Director effective close of business hours on 30 September 2024. Ms. Satyavati Berera (DIN: 05002709) was appointed as an Independent Director of the Company for a period of five (5) years from 1 October 2024 to 30 September 2029. Her appointment was approved by the shareholders through postal ballot which concluded on 12 October 2024. Ms. Berera was appointed as Chairperson of the Audit Committee effective 1 October 2024.

Ms. Nicola Buck (DIN: 09785756) and Mr. Sashi Mukundan (DIN: 02519725) ceased to be the Nominee Directors effective close of business hours on

II June 2024 and 31 October 2024, respectively, following withdrawal of their nomination by Castrol Limited (UK). Mr. Kartikeya Dube (DIN: 00929373), was appointed as the Nominee Director with effect from 30 July 2024, pursuant to the nomination received from Castrol Limited (UK). His appointment was approved by the shareholders through postal ballot which concluded on 12 October 2024.

Mr. Udayan Sen (DIN: 02083527) shall cease to be the Nominee Director, effective close of business hours on 28 February 2025, following withdrawal of nomination by Castrol Limited (UK). Ms. Nisha Trivedi (DIN: 10937145), was appointed as the Nominee Director of the Company, with effect from 3 February 2025, pursuant to nomination received from Castrol Limited (UK). The said appointment is subject to approval of the shareholders at the ensuing 47^th Annual General Meeting ('AGM').

Mr. Sandeep Sangwan (DIN: 08617717) stepped down as the Managing Director, effective close of business hours on 31 October 2024, to pursue another role within bp. Mr. Kedar Lele (DIN: 06969319) was appointed as the new Managing Director, in succession to Mr. Sandeep Sangwan, for a term of five years, from 1 November 2024 to 31 October 2029.

The said appointment was approved by the shareholders through postal ballot which concluded on 12 October 2024.

Mr. Mayank Pandey (DIN: 09274832) ceased to be a Wholetime Director, effective close of business hours on 30 July 2024, to pursue another role within bp.

Mr. Deepesh Baxi (DIN: 02509800) shall cease to be the Chief Financial Officer & Wholetime Director, effective close of business hours on 13 March 2025, following his resignation from the services of the Company.

The Board and Management express their deepest gratitude to Mr. R Gopalakrishnan, Mr. Uday Khanna, Mr. Sashi Mukundan, Ms. Nicola Buck, Mr. Udayan Sen, Mr. Sandeep Sangwan, Mr. Deepesh Baxi and Mr. Mayank Pandey for their guidance, consistent value creation, and direction to the Company during their association with the Company.

In accordance with the provisions of the Act, Mr. Saugata Basuray (DIN: 09522239), Wholetime Director of the Company, shall retire by rotation at the ensuing 47^th Annual General Meeting, and being eligible has offered himself for re-appointment. Based on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on 3 February 2025, has recommended his re-appointment at the AGM.

Mr. Siddharth Shetty, Managing Counsel, was re-appointed as Key Managerial Personnel with effect from 3 May 2024.

Details of the Directors proposed to be appointed/re-appointed at the ensuing 47^th Annual General Meeting of the Company, as required under Regulation 36(3) of the SEBI Listing Regulations and SS - 2 (Secretarial Standards on General Meetings), are provided at the end of the Notice convening the 47^th Annual General Meeting.

The Independent Directors of the Company have certified their independence to the Board, stating that they meet the criteria for independence as mentioned under Section 149(6) of the Act. There was no change in the composition of the Board of Directors and Key Managerial Personnel during the year under review, except as stated.

The Board is of the opinion that the Independent Directors of the Company have fulfilled the conditions as specified in SEBI Listing Regulations, are independent of the management, possess requisite qualifications, experience, proficiency and expertise

in the fields of finance, people management, strategy, auditing, tax and risk advisory services, banking and they hold highest standards of integrity.

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs ('IICA') as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

7. Policy on Nomination, Independence, Remuneration, Diversity and Evaluation

The Policy on Nomination, Independence, Remuneration, Diversity and Evaluation, approved by the Nomination and Remuneration Committee and adopted by the Board of Directors of the Company, is annexed as Annexure I to this report of the Board to the shareholders. During the year under review, the policy was amended to align with the amendment in law. This policy is also available on the website of the Company at https://www.castrol.com/content/ dam/castrol/country-sites-new/en_?n/?nd?a/home/ documents/investors/nrc_pol?cy_c?l_2018.pdf.

8. Board Evaluation

The Policy on Nomination, Independence, Remuneration, Diversity and Evaluation ('Policy') adopted by the Board of Directors provides for evaluation of the Board, the Committees of the Board and individual Directors, including the Chairperson of the Board. The Policy provides that evaluation of the performance of the Board as a whole and the Board Committees and individual Directors shall be carried out annually.

The Board, in consultation with its Nomination and Remuneration Committee, has formulated a framework containing, ?nter-alia, the criteria for annual performance evaluation process of Board, Committees and individual Directors.

The annual performance evaluation was conducted in accordance with the framework and each board member completed a confidential online questionnaire, sharing vital feedback and identified areas that showed scope for improvement.

The Independent Directors discussed the results of the performance evaluation at their meeting held on 3 February 2025. The overall outcome of the performance evaluation was positive with the Board identifying key areas for focus going forward and improving the effectiveness of discussions at the meetings. This will include inter alia dedicating more time on the Company's business and strategy, reviewing key issues if any having potential material

impact on the Company and devoting more time by engagements beyond board meetings.

9. Board and Committees

The Board met six times during the year, details of which are given in the Corporate Governance Report that forms part of this annual report. Additionally, a strategy meeting was held in Feb 2024 and Sept 2024. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations. During the year under review, the Board has accepted the recommendations of the Audit Committee. Details of all the Committees of the Board have been given in the Corporate Governance Report.

10. Corporate Governance

The Company has put in place governance practices as prevalent globally. The Corporate Governance Report and the Auditor's Certificate regarding compliance of conditions of Corporate Governance are made part of the annual report.

11. Corporate Social Responsibility

At Castrol, we believe that we have a responsibility to bring enduring positive value to communities we work with. In line with our core theme to keep India moving, we have and will continue to build enduring and engaging relationships with key stakeholders in the mobility sector.

Truck drivers and mechanics are two key stakeholders who play a significant role in keeping the wheels of this sector moving. Truck drivers carry the majority of freight traffic in the country while mechanics service one of the largest automotive markets in the world. However, their skills, livelihood opportunities and socio-economic conditions need more focus.

At Castrol, we are committed to making a positive impact in the lives of truck drivers and mechanics by preparing them to face today's reality and leverage tomorrow's opportunity. In line with this vision, the Company focusses on two key flagship CSR programmes:

• Programme for holistic development of truck drivers - Castrol Sarathi Mitra ^•

• Programme for mechanics with an aim to strengthen skills development in automotive and industrial sectors, with a focus on technology - Castrol Eklavya

Additionally, Castrol continues to support community development initiatives around areas of operations and presence. The Company, from time to time, supports humanitarian aid activities in India, by providing relief and rehabilitation to people impacted by natural disasters.

The Corporate Social Responsibility Policy is available on the website of the Company at https://www. castrol.com/content/dam/castrol/country-sites- new/en_?n/?nd?a/home/documents/about-castrol/ cil-csr-policy-2021.pdf. The annual report on CSR activities is annexed to this report as Annexure II.

12. Directors' Responsibility Statement

Pursuant to the requirement under Sections 134(3)(c) and 134(5) of the Act, with respect to the Directors' Responsibility Statement, it is hereby confirmed:

a. In the preparation of the annual accounts for the year ended 31 December 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. The directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31 December 2024 and of the profit of the Company for the year ended on that date;

c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The directors have prepared the annual accounts on a 'going concern' basis;

e. The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are efficient and operating effectively.

The aforesaid statement has also been reviewed and confirmed by the Audit Committee of the Board of Directors of the Company.

13. Risk Management and Adequacy of interna! Financial Controls

The Company has set up a Risk Management Committee and has adopted a Risk Management Policy, the details of which are given in the Corporate Governance Report that forms part of this annual report.

The Company maintains an adequate and effective internal control system commensurate with its size and complexity. We believe that these internal control systems provide, among other things, a reasonable assurance that transactions are executed with management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of the Company are adequately safe guarded against significant misuse or loss. An independent internal audit function is an important element of the Company's internal control system. The internal control system is supplemented through an extensive internal audit programme and periodic review by management and Audit Committee.

The Company has in place, adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

14. Related Party Transactions

The Company has adopted a Related Party Transactions Policy. The Audit Committee reviews this policy periodically and also reviews and approves all related party transactions, to ensure that the same are in line with the provisions of applicable laws and the Policy.

The Committee approves the related party transactions and wherever it is not possible to estimate the value, approves limit for the financial year, based on best estimates. All related party transactions are reviewed by an independent accounting firm to establish compliance with policy and limits approved.

All related party transactions entered during the year were in the ordinary course of the business and on arm's length basis. No material related party transactions were entered into during the year by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act, in Form AOC-2 is not applicable to the Company.

In conformity with the requirements of the Act, read with the SEBI Listing Regulations, the Policy to deal with related party transactions is also available on Company's website at https://www.castrol.com/ content/dam/castrol/country-sites-new/en_?n/ india/home/documents/investors/rpt-policy.pdf.

15. Deposits

The Company has not accepted any deposits under Chapter V of the Act during the financial year and as such, no amount on account of principal or interest on deposits from public is outstanding as on 31 December 2024.

16. Particulars of Loans given, investments made, Guarantees given and Securities provided

Pursuant to Section 186 of the Companies Act, 2013 and Schedule V to the SEBI Listing Regulations, disclosure on particulars relating to Loans, Guarantees and Investments are provided as part of the financial statements in Note No. 4.6.

17. Conservation of Energy, Technology Absorption, Research & Development (R&D) and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided as Annexure iii.

18. Material Changes occurred after end of Financial Year

No material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

19. Auditors

Statutory Auditor

The shareholders at the 44^th Annual General Meeting held on 8 June 2022, approved the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, for a second term of 5 (five) years to hold office till the conclusion of 49^th Annual General Meeting of the Company.

The statutory auditors have confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the statutory auditor. The report given by the statutory auditor on the financial statements of the Company forms part of the annual report. There is no qualification, reservation, adverse remark or disclaimer given by the statutory auditor in their report.

Cost Auditor

M/s. Kishore Bhatia & Associates, Cost Accountants, carried out the cost audit for the Company for the year under review. They have been re-appointed as cost auditors for the financial year ending 31 December 2025. A remuneration of '4,50,000/- (Rupees Four Lakh Fifty Thousand only) plus applicable taxes and out of pocket expenses has been fixed for the cost auditors subject to the ratification of such fees by the shareholders at the 47^th AGM. Accordingly, the matter relating to ratification of the remuneration payable to the cost auditors for the financial year ending 31 December 2025 is placed at the 47^th AGM. The Company has maintained cost records as specified under sub-section (1) of Section 148 of the Companies Act, 2013 and the same shall be audited by the cost auditor i.e. M/s. Kishore Bhatia & Associates, Cost Accountants for the financial year 2025.

Secretaria! Auditor

The Board had appointed M/s. S. N. Ananthasubramanian & Co., Company Secretaries in Whole-time Practice, to carry out secretarial audit under the provisions of Section 204 of the Act, for the financial year ended 31 December 2024. The secretarial auditor's report to the shareholders does not contain any qualification and is annexed to this report marked as Annexure IV.

20. Compliance with Secretaria! Standards on Board and Genera! Meetings

During the financial year, the Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

21. Particulars of Employees

Disclosures with respect to the remuneration of directors and employees as required under Section 197 of the Act, and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been annexed to this report as Annexure V.

Details of employee remuneration as required under provisions of Section 197 of the Act, and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms a part of this report. As per the provisions of Section 136 of the Act, the report and financial statements are being sent to the shareholders of the Company and others entitled thereto, excluding the statement on particulars of employees.

Copies of said statement are available at the registered office of the Company during the designated working hours from 21 days before the Annual General Meeting. Any shareholder interested in obtaining such details may write to the corporate secretarial department at the registered office of the Company.

22. Prevention of Sexual Harassment at Workplace

The Company firmly believes in providing a safe, supportive and friendly workplace environment - a workplace where our values come to life through the supporting behaviors. Positive workplace environment and a great employee experience are integral part of our culture. The Company continues to take various measures to ensure a workplace free from discrimination and harassment based on gender.

The Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment. The Company has created the framework for individuals to seek recourse and redressal to instances of sexual harassment.

During the year, the Company conducted various training and sensitization sessions on prevention of sexual harassment at workplace for its employees, workmen and others at various locations. The said sessions were facilitated by an external trainer.

The Company has a Sexual Harassment Prevention and Grievance Handling at the Workplace Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year, no complaint of sexual harassment was reported.

23. Vigil Mechanism

The Company has a very strong whistle blower policy viz. 'Open Talk'. The Whistle blowers also have direct access to the Chairperson of the Audit Committee in case they wish to report any concern. The Company has provided a dedicated email id for reporting such concerns. All cases registered under Whistle Blower Policy of your Company are reported to and are subject to the review by the Audit Committee.

24. Annual Return

The annual return of the Company as required under the Companies Act, 2013 will be available on the website of the Company at https://www.castrol. com/en_?n/?nd?a/home/investors/general-meet?ng. html.

25. General Disclosures

The Directors state that no disclosure or reporting is required in respect of the following items as there were no such transactions during the year under review:

1. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

2. Issue of Equity Shares (including Sweat Equity Shares) to employees of the Company, under any scheme.

3. The Company has not resorted to any buy back of its Equity Shares during the year under review.

4. The Company does not have any subsidiaries. Hence, neither the Managing Director nor the Wholetime Directors of your Company received any remuneration or commission during the year, from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operations in future.

6. No fraud has been reported by auditors under subsection (12) of section 143.

7. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof - Not Applicable.

8. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year - Not Applicable.

26. Acknowledgement

The Board wishes to place on record its sincere appreciation of the efforts put in by the Company's employees for achieving encouraging results. The Board also wishes to thank the shareholders, distributors, vendors, customers, bankers, government and all other business associates for their support during the year.