1.  We have audited the attached Balance Sheet of Castrol India Limited
 as at December 31, 2011 and also the profit and Loss Account and the
 Cash Flow Statement for the year ended on that date annexed thereto.
 these financial statements are the responsibility of the Company''s
 management. our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) (''the Order'') issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
 enclose in the Annexure a statement on the matters specified in
 paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii.  In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 iii. The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 iv.  In our opinion, the balance sheet, profit and loss account and
 cash flow statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956.
 
 v.  On the basis of the written representations received from the
 directors, as on December 31, 2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 December 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
 
 vi.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India;
 
 a) in the case of the balance sheet, of the state of affairs of the
 Company as at December 31, 2011;
 
 b) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 Castrol India Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) there was no substantial disposal of fixed assets during the year.
 
 (ii) (a) the management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) the procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) the Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) according to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Companies act, 1956.  accordingly, the
 provisions of clause 4(iii) (a) to (d) of the order are not applicable
 to the Company and hence not commented upon.
 
 (e) according to information and explanations given to us, the Company
 has not taken any loans, secured or unsecured, from companies, firms or
 other parties covered in the register maintained under Section 301 of
 the Companies act, 1956. accordingly, the provisions of clause 4(iii)
 (e) to (g) of the order are not applicable to the Company and hence not
 commented upon.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness or continuing failure to correct any major weakness in
 the internal control system of the Company in respect of these areas.
 
 (v) (a) according to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in Section 301 of the Companies act, 1956 that
 need to be entered into the register maintained under Section 301 have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of rupees five lakhs have been
 entered into during the financial year at prices which are reasonable
 having regard to the prevailing market prices at the relevant time
 except in respect of certain transactions, where because of the unique
 and specialized nature of the items involved and absence of any
 comparable prices, we are unable to comment whether the transactions
 were made at the prevailing market prices at the relevant time.
 
 (vi) the Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956, related to the manufacture of Lubricating Oils and Greases
 and are of the opinion that prima facie, the prescribed accounts and
 records have been made and maintained.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty, cess and other material statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance,
 income-tax, wealth-tax, service tax, sales-tax, customs duty, excise
 duty, cess and other undisputed statutory dues were outstanding, at the
 year end, for a period of more than six months from the date they
 became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
 Name of Statute    Nature of 
                    Dues       Amount    Period to which   Forum where
                                                           dispute is
                              (Rs. 
                               Crores)   amount relates    pending
 
 Local Sales
 Tax Act,           Tax, 
                    Interest 
                    and 
                    Penalty    122.13     1987 to 2010     Assistant/
                                                           Deputy/
 VAT Act and 
 Central                                                   Additional/
                                                           Joint/Special,
 Sales Tax
 Act                                                       Revisional 
                                                           Board/
                                                           Commissioner,
                                                           Tribunal, 
                                                           High Court.
 
 Central 
 Excise 
 Act,              Duty and 
                   Penalty      30.41     1987 to 2011     Assistant/
                                                           Deputy/
 1944                                                      Additional/
                                                           Joint 
                                                           Commissioner,
                                                           Commissioner 
                                                           (A), CESTAT,
                                                           High Court 
                                                           & Supreme 
                                                           Court.
 
 Customs 
 Act, 1962         Duty and 
                   Interest     2.83      1997 to 2006     Tribunal
 
 Service 
 Tax,              Tax and 
                   Penalty      67.66     1997 to 2011     Assistant/Deputy/
 Chapter V 
 of the                                                    Additional/
                                                           Joint 
                                                           Commissioner,
 Finance 
 Act, 
 1994                                                      Commissioner 
                                                          (A), CESTAT,
                                                           High Court.
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to bank. The Company has
 no outstanding dues in respect of financial institution or debenture
 holders.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditor''s Report) Order, 2003 (as amended) are not
 applicable to the Company.
 
 (xiv) In respect of dealing/trading in shares, securities, debentures
 and other investments, in our opinion and according to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein. The shares, securities, debentures and other investments have
 been held by the Company, in its own name.
 
 (xv) according to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) the Company did not have any term loans outstanding during the
 year.
 
 (xvii) according to the information and explanations given to us and on
 an overall examination of the balance sheet and cash flow statement of
 the Company, we report that no funds raised on short-term basis have
 been used for long-term investment.
 
 (xviii) the Company has not made any preferential allotment of shares
 during the year to parties or companies covered in the register
 maintained under Section 301 of the Companies act, 1956.
 
 (xix) the Company did not have any outstanding debentures during the
 year.
 
 (xx) the Company has not raised any money through public issue during
 the year. therefore, the provisions of clause 4(xx) of the Companies
 (auditor''s report) order, 2003 (as amended) are not applicable to the
 Company.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 For S. R. Batliboi & Co.
 
 Firm Registration No.: 301003E
 
 Chartered accountants
 
 per Ravi Bansal
 
 Partner
 
 Membership No.: 49365
 
 Place : Mumbai
 
 Date : February 13, 2012