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Directors Report of Chennai Petroleum Corporation Ltd.

Mar 31, 2023

On behalf of the Board of Directors of your Company, I am pleased to present the 57^th Annual Report and the 1^st Integrated Annual Report on the working of your Company, together with the Audited Statement of Standalone and Consolidated Accounts, Auditors'' Report and the Report of the Comptroller & Auditor General of India on the Standalone and Consolidated Accounts for the year ended March 31, 2023.

PERFORMANCE REVIEW

Financials (Standalone and Consolidated)

The summary of the Standalone and Consolidated Financial Statements are as under:

(Rs. in crore)
Particulars	Standalone		Consolidated
Particulars	2022-23	2021-22	2022-23	2021-22
Gross Turnover	90801	60402	90801	60402
Profit Before Finance Cost, Depreciation and Tax	5712	2748	5703	2741
Finance Cost	330	412	330	412
Depreciation, Amortisation and Impairment	573	504	573	504
Profit Before Tax ( before Share of Profit of Joint Ventures)	4809	1832	4800	1825
Share of Profit of Joint Ventures	-	-	6	16
Profit Before tax	4809	1832	4806	1841
Tax Provision	1275	490	1275	489
Profit After tax	3534	1342	3531	1352

The book value per share of your Company as on 31.03.2023 increased significantly to Rs.421.79 as compared to Rs.187.38 as on 31^st March, 2022.

Value Addition

The value addition during the year 2022-23 witnessed a steep increase at Rs.6797 Crore as compared to Rs.3835 Crore in the previous year.

Digital India Initiatives

Your company has achieved 100% digital transactions during the financial year 2022-23.

Contribution to Exchequer

Your Company has been regularly contributing to both State and Central Exchequers in the form of duties and taxes. The details are as under:

(Rs Crore)
Particulars	2022-23	2021-22
Central Exchequer	16453	18124
State Exchequer	1275	798
Total	17728	18922

Analysis of Profitability

The Company posted the highest ever Profit Before Tax of Rs.4809 Crore (higher by 162%) and Profit After Tax (PAT) of Rs.3534 Crore.

This excellent financial performance is due to stellar operating performance with highest ever Crude throughput of 11.316 MMT and focussed improvement on reliability coupled with feed optimization which enabled secondary unit to surpass the previous best. This was also supported by robust margin which prevailed in the international market during the FY 2022-23.

The GRMs thereby increased from US $8.85/bbl in 2021-22 to US$ 11.91/bbl in 2022-23.

Highlights

â¢ During the FY 2022-23 your Company recorded an all-time high turnover of Rs.90801 Crore, Profit Before Tax (PBT) of Rs.4809 Crore and Profit After Tax (PAT) of Rs.3534 Crore.

â¢ Recommended highest ever dividend of 270% on the paid up Equity Share Capital of the company.

â¢ Nil comments from C&AG for FY 2022-23 - 19^th year in succession

Issue of securities / change in share capital

During the year 2022-23, there is no change in the share capital of the company. No securities were issued during the year.

Dividend

Article 114 of the Articles of Association and Guidelines on Capital Restructuring of Central Public Sector Enterprises dated 27^th May, 2016 issued by the Ministry of Finance, Department of Investment and Public Asset Management (DIPAM), Government of India together constitute the Dividend Distribution Policy of the Company and the same is hosted on the website of the Company under the link https:// www.cpcl.co.in/Policies/2018/dividend%20distribution%20 policy.pdf

Our Board has recommended a Dividend of 6.65% on the paid up outstanding preference share capital of the Company, representing Rs.0.665 per preference share amounting to Rs.33.25 crore for the year 2022-23. Considering the all-time high profits earned by the company during FY 2022-23, the Board has recommended a dividend of 270% on paid-up Equity Share Capital of the Company amounting to Rs.27/-per share as on 31.03.2023 amounting to Rs.402 Crore.

Book Value and Reserves and Surplus

There has been significant accretion to the reserves of the Company due to enhanced profitability. The reserves and surplus as on 31^st March, 2023 more than doubled to Rs.6132.05 crore as compared to Rs.2641.32 crore as on 31^st March, 2022.

Capex

Your Company has incurred Capital Expenditure of Rs.654.06 crore for the year 2022-23 as compared to Rs.647.77 crore in the previous year 2021-22.

Public Deposit Scheme

Your Company has not accepted any public deposit during the year 2022-23 and no public deposit was outstanding as on 31^st March, 2023.

Credit Rating

The companyâs financial prudence is reflected in the strong credit ratings assigned by the Credit Rating agencies. The details of Credit Ratings are as under:

Transfer of Unclaimed Dividend to IEPF

No dividend amount / shares is required to be transferred to the Investor Education & Protection Fund (IEPF) as per Section-124 of the Companies Act, 2013 during the year 2022-23, as no dividend was declared in view of the losses for the FY 2014-15.

INSTRUMENT	RATING AGENCY	RATING
Short term borrowings /	CRISIL & ICRA	AAA
PCFC (including BG)
Commercial Papers	CRISIL & ICRA	A1
Debentures	CRISIL & ICRA	AAA

OPERATIONAL PERFORMANCE:

PHYSICAL:

CRUDE OIL throughput (in Thousand Metric Tonnes(TMT)	2022-23	2021-22
Imported	9373	7208
Indigenous	1943	1832
Total Throughput	11316	9040
PRODUCTION (in TMT)
Light Ends	2587	2178
Middle Distillates	6217	4842
Lube Base Stock	236	195
Wax	28	23
Heavy Ends	1487	1134
Intermediates differential	(19)	88
Other Inputs	(270)	(328)
Fuel & Loss	1049	909
Total Output	11316	9040
Distillate Yield	76.0	74.9
Fuel and Loss (%)	9.06	9.71
(TMT = Thousand Metric Tonnes)

Operational Performance

Your Company achieved a throughput of 11.316 MMT in 2022-23 as against MoU target of 10.73 MMT and surpassed Name plate capacity of 10.5 MMTPA for the first time and achieved the highest ever crude processing as against the previous best of 10.289 MMTPA in 2017-18. The distillates yield achieved for 2022-23 was 76.0% as compared to 74.9% in 2021-22.

The Energy Intensity Index (EII) recorded was the lowest ever at 89.2 against the previous best of 96.2 in the year 2021-22. The specific energy consumption recorded was the lowest ever at 74.2 against the previous lowest of 81.4 in the year 2019-20 and achieved Perform Achieve and Trade (PAT) cycle -VI target of 76.8. The operational availability during the year was 98.9% against the target of 97%. Fuel & Loss was lower at 9.06 % as compared to 9.71% in the previous year.

Your Company clocked the highest ever Once Through Hydro Cracker Unit (OHCU) throughput of 2,372 TMT against the previous best of 2,307 TMT in 2019-20. Delayed Coker unit (DCU) achieved highest ever throughput of 1975 TMT surpassing previous best of 1405 TMT in 2019-20.

Your Company clocked the highest ever production and dispatch in respect of the following:

		Production in TMT			Despatch in TMT
Product	Production Quantity in 2022-23	Previous best Quantity	Previous best year	Despatch Quantity in 2022-23	Previous best Quantity	Previous best year
Naphtha	976	815	2019-20	1015	856	2019-20
Hexane	28.4	26.7	2021-22	27.8	26.6	2021-22
Motor Spirit (MS)	1142	1107	2017-18	1150	1121	2016-17
Mineral Turpentine Oil (MTO)	31.4	8.1	2021-22	31.4	8.1	2021-22
Aviation Turbine Fuel (ATF)	1039	1016	2019-20	1023	996	2019-20
High Speed Diesel (HSD)	5041	4677	2018-19	5065	4404	2018-19
Petcoke	539	414	2019-20	562	409	2019-20
Sulphur	129	99	2019-20	128	99	2019-20

Some of the other highlights of Operational Performance

during the year are as under:

â¢ Successfully processed five new crudes viz., Tupi from Brazil; Kole from Cameroon; Urals from Russia; Sokol from Russia and ESPO from Russia.

â¢ Highest ever monthly Mineral Turpentine Oil (MTO) dispatch of 5.8 TMT in Janâ23 surpassing the previous best of 4.8TMT (Sepâ22).

â¢ Highest ever monthly Fluidised Catalytic Cracking Unit (FCCU) throughput of 96.6 TMT in Janâ23 surpassing the previous best of 95.8 TMT in Marâ22.

â¢ Highest ever Lube Oil Base Stock (LOBS) production and dispatch of 236 TMT and 241 TMT respectively, in the last ten years.

â¢ Highest ever monthly Once Through Hydro Cracker Unit (OHCU) throughput at 227 TMT in Mayâ22 which surpassing the previous best of 222 TMT (Marâ22).

â¢ Highest ever monthly throughput of Delayed Coker Unit (DCU) at 198 TMT in Mayâ22 surpassing the previous best of 183 TMT (Marâ22).

â¢ Highest ever Hexane production and dispatch at 3.1 TMT in Aprâ22 surpassing the previous best of 2.8 TMT (Julyâ21).

â¢ Successfully produced and supplied 39.7 MT of JP-7(Jet Fuel) to Defence Research and Development Organisation (DRDO) during Octâ22.

â¢ Successfully produced and dispatched new product LSHS (Premium) during Febâ23.

â¢ First time export of Naphtha co-loading with Paradip Refinery during Junâ22.

â¢ Exported higher parcel size of Naphtha (55 TMT parcel) directly from Chennai port during Julâ22 (Double berthing).

â¢ Successfully completed HSD Export parcel of 40 TMT to M/s. Ceypetco, Sri Lanka in Mayâ22.

MOU PERFORMANCE

Your Company has received âExcellentâ rating for its performance during FY2021-22 with respect to the MoU signed with its holding Company, Indian Oil Corporation Limited (IOCL). Further, your company had signed MoU with IOCL for FY 2022-23, as per the guidelines issued by the Department of Public Enterprises (DPE), which shall be evaluated in due course of time.

MARKETING

Indian Oil Corporation Ltd., the holding company, markets a majority of fuel products and Petroleum, Oil and Lubricants (POL) produced by your Company.

Apart from the above, the details of sale of products through direct marketing by your company during 2022-23 as compared to the previous year 2021-2022 are given below:

PRODUCT	SALE QTY (IN MT)
PRODUCT	2022-23	2021-22
A: Downstream Products
Linear Alkyl Benzene Feed Stock (LABFS)	68065 77141
Butene Methyl Ethyl Ketone Feed Stock (MEKFS)	19325 19802
Propylene	34706 34068
Poly Butene Feed Stock (PBFS) Lean PBFS	10311 11695
B: Other Products
Paraffin Wax	28909	23494
Hexane	22762	21876
Sulphur	125168	81125
Pet-Coke	562308	349349
Mineral Turpentine Oil (MTO)	31390	8159
Furnace Oil	4007	4030
TOTAL	906951	630739

During the year, your company achieved substantial growth in the sale of products like Propylene, Paraffin wax, FG Hexane, MTO through proactive marketing initiatives and also achieved highest ever sale of FG Hexane, MTO & Sulphur during 2022-23. Direct sale of products recorded an increase of about 44 %, from 631 TMT in 2021-2022 to 907 TMT during 2022-2023.

RESEARCH & DEVELOPMENT (R&D)

Your Companyâs R&D plays a pivotal role in providing support to refinery operations.

During the year various studies were carried out as under:

â¢ Evaluation of lube potential for various crude mixes (3 Nos.) through pilot plant aromatic extraction studies and lab scale dewaxing studies

â¢ Hydro-treatment of Heavy Coker Gas Oil (HCGO) to evaluate its suitability as feedstock for Fluidised Catalytic Cracking Unit (FCCU)

â¢ Evaluation of FCC GDS unitâs suitability for processing of Heavy Naphtha

â¢ Feasibility of paint grade MTO production out of syn. Naphtha from Diesel Hydro-Treating Unit (DHDT).

PROJECTS

Your Company achieved a capex of Rs.654.06 crore, during

the year.

MAJOR COMPLETED PROJECTS

Fuel Quality Upgradation Project:

During the year, as part of Fuel Quality Upgradation project, your company had commissioned the new Sulphur Recovery Block consisting of SWS (Sour Water Stripper), ARU (Amine Regeneration Unit) and SRU (Sulphur Recovery Unit).

OTHER COMPLETED PROJECTS

I. Roof Top Solar System in Plant & Non-Plant Area Buildings

Installation of Roof top solar system in plant and non-plant area buildings with total capacity of 915 KW completed and commissioned in all locations.

PROJECTS UNDER IMPLEMENTATION:

Pharma Grade Hexane Production at Manali Refinery:

Your company is envisaging production of Pharma Grade Hexane in the Isomerization Unit. The objective of the revamp is to replace existing conventional column internals with Divided Wall Column (DWC) Trays and internals followed by Benzene saturation reactor for production of 35000 MTPA Pharma Grade Hexane.

The estimated cost of the project is Rs.67.15 Cr (net of GST Credit) and is expected to be completed in FY 2023-24.

Cauvery Basin Refinery & Petrochemicals Ltd. (CBRPL) Project:

Your company along with Indian Oil Corporation Limited (IOCL) in Joint Venture Mode is setting up a new grass root refinery of 9 MMTPA capacity with petrochemical facilities at Nagapattinam, Tamil Nadu. The new refinery will be set up in an area of about 1300 acres, out of which 618 acres is already owned by your company and the balance land is under advanced stage of acquisition. This new refinery will produce Petrol and Diesel of Bharat Stage-VI specifications and Polypropylene as a value added product.

Joint Venture Company(JVC), Cauvery Basin Refinery and Petrochemicals Limited (CBRPL) was incorporated on 06-Jan-2023 between IOCL, CPCL & other seed equity investors.

Contract had been awarded to all 4 EPCM consultants. M/s KPMG was also lined up as Ownerâs Project Management Consultant (OPMC). Engineering and Procurement activities are in progress. Tenders for all Lump Sum Turn Key (LSTK) and Build Own & Operate (BOO) contracts are ready for award and tenders for all critical equipment were already floated. Site enabling works viz., Site grading, Construction power & Construction water works are gathering momentum at site.

Roadshows were conducted at site pertaining to opportunities that are available for all major Stakeholders of the Project. Roadshows also acted as a channel to reach out to the broader local community, spreading a message of possible socio-economic benefits emanating from the project. Local suppliers of land, utilities, soil, sand, aggregates, and other materials also attended the event to gain insight into potential opportunities. The event saw massive participation not only from large partners and multinational companies across India but also from local and regional players.

FUTURE PROJECTS

Group II/III LOBS Projects

Your company is planning to implement a project for production of Group II/III Lube Oil Base Stocks. First stage approval for the project has been received. Pre-project activities such as preparation of BDEP for Process Units and Detailed Feasibility Report (DFR) have been completed. Application for obtaining Environment Clearance has been filed with MoEFCC.

INFORMATION TECHNOLOGY

Your Company has undertaken the following initiatives during the year:

â¢ Implemented the first of its kind Bulk Voice Messaging system to Emergency Fire Coordinators.

â¢ Critical perimeter firewall replaced with best-in-class appliance with next Generation features.

â¢ Endpoint Detection and Response (EDR) agent installed in all desktops for Artificial Intelligence (AI) based threat detection and response.

â¢ IT security Audit of all critical IT assets carried out through CERT-In empanelled agency.

HEALTH, SAFETY AND ENVIRONMENT

Health

Your Company strives to achieve highest standards of excellence in providing health care to its employees including contract workers by ensuring a safe work environment and effective monitoring of various hazards in the refinery.

Various health promotion programs were conducted for the wellbeing of the employees, as under:

â¢ Webinar on Healthy Lungs and Common Gynecological Issues

Safety

Your Company adheres to the highest standards of safety while carrying out its operations.

Total Accident free days and fire free days achieved as on 31.03.2023 are 1281 and 1153 respectively. The significant safety initiatives undertaken during the year include the following

â¢ Onsite Emergency Mock Drills including rescue from height scenario and a Night Hour Onsite Mock Drill conducted at Manali Refinery as per Emergency Response and Disaster Management Plan.

â¢ Monthly Mock drills with different scenarios to check the preparedness of systems and healthiness of the equipments.

â¢ As a part of Behaviour Based Safety implementation, training programs were arranged.

â¢ Emergency Voice Call facility was developed to intimate all Coordinators and Top Management about the Emergency in the plant, if any.

â¢ Offsite Emergency Mock drill conducted at Madras Fertilizers Limited on 22^nd June 2022 on behalf of Manali cluster of industries , under the Chairmanship of Thiru M.Sivaguru Prabakaran, IAS, Regional Dy. Commissioner (North), Greater Chennai Corporation. Your Company played a major role in the activities related to Offsite mock drill.

â¢ Near Miss Incidents (NMI) Liquidation Committees were formed for follow up and ensure closure of pending NMIs and for suggesting mitigation measures for the pending

NMIs. Number of Fire Incidents and Injuries have come down drastically due to the focus given on liquidation of Critical NMIs in particular.

â¢ Inherent Fire Retardant (IFR) suits were made compulsory for all Employees and workers before entering into plant. IFR suits are issued to eligible employees in this regard.

â¢ Pressure Fed Fuel Fire Training (PFFFT) was imparted to 5 batches of Airports Authority of India (AAI) employees covering 103 personnel.

â¢ Live Fire Drill Trainings for IOCL Employees - 97 Employees were covered in the three programs that were conducted in Juneâ22, Sepâ22, and Marâ23.

â¢ 11^th External Safety Audit (ESA) by OISD in October 2022

â¢ Internal Safety Audit in September 2022.

â¢ Pre Commissioning Safety Audit of BS-VI SRU between 04.08.22 & 05.08.22 by OISD.

â¢ Safety audit by the PESO approved third party agency viz., M/s. Hubert Enviro Care Systems Pvt Ltd (HECS) as per PESO guidelines in Marâ23.

The recommendations of both internal and external safety audits are being implemented in time bound manner with regular monitoring during the monthly Central Safety Committee meeting.

The Parliamentary Committee visited your Manali Refinery in Septâ22 to review the Emergency Response and Disaster Management Plan (ERDMP) in CPCL and appreciated the efforts taken by the CPCL team.

Environment

Your Company is committed to protect the environment in which it operates and is complying all the statutory requirements with respect to Environment such as Environment Protection Act, MINAS, NAAQM standards, etc.

Several Environmental initiatives undertaken during the year are as under:

â¢ Azadi Ka Amrit Mahotsav (AKAM) was celebrated with Tree Plantation drive on 08.06.2022. 500 saplings were planted in Amullaivoyal area near Manali where Green Belt is already developed.

â¢ Towards creating awareness among public to avoid single use plastic, distribution of cotton bags to Tamilnadu Government was carried out.

â¢ World Environment Day (WED) was celebrated with the theme âSolutions to Plastic Pollutionâ on 5^th June 2023.

â¢ 500 Nos of Miyawaki saplings planted in LPG Plant covering 0.05 acre of land in August 2022.

â¢ Leak Detection and Repair Programme (LDAR) was conducted in December 2022

â¢ 915.3 KW solar panel installed in Manali Refinery during FY 2022-23

â¢ Your company has been certified for Energy Management System (ISO 50001) in March 2023.

In recognition of efforts taken by the company, your company was awarded the Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH award for excellence in Industrial Disaster Risk Management in Feb-2023 by Federation of Indian chambers of Commerce (FICCI).

ENERGY CONSERVATION

Your company lays utmost emphasis on optimum usage of energy by implementing several energy conservation measures.

During the year, your company achieved an Specific Energy Consumption (MBN) and Energy Intensity Index (EII) of 74.2 and 89.2 (Best achieved) respectively as against 82.6 and 96.5 in 2021-22. 28 numbers of energy conservation measures were implemented successfully during the year 2022-23. This resulted in energy savings of 14516 Standard Refinery Fuel Tonne (SRFT) per annum which is approximately 0.13% reduction in F&L. The details of energy conservation measures are given in Annexure I. Furnace Efficiency Audit was conducted by CHT External Auditors as part of SAKSHAM 2023. Furnace efficiency has increased to 84.7% in 2023 survey from 78.9% in 2020 survey.

Oil & Gas Conservation Fortnight (SAKSHAM 2023) with the theme âEnergy Conservation towards Net Zeroâ was observed from 24^th April to 8^th May 2023 as per the directives of Ministry of Petroleum and Natural Gas (MoP&NG) to create awareness among the masses about conservation of Oil and Gas.

Cyclothon was conducted for Chennai Public at CPCL Polytechnic College at Manali.

RELIABILITY IMPROVEMENT INITIATIVES

Your company has taken several measures to ensure reliability of its refinery operations which are as under:

Cyber Security

â¢ To reinforce the Operational Technology (OT) system, M/s E&Y (Ernst & Young LLC) was awarded the contract for OT

Cyber security audit. Audit commenced since April 2023 and is under progress.

â¢ Procurement of Hardware and Software for OT cyber security (Dedicated OT Network creation) initiated.

â¢ To ensure reliable operation of power system, Cogen and Captive Power Plantâs (CPP) Programmable Logic Controller (PLC) are being replaced with state-of-art PLC Control systems.

HUMAN RESOURCES

Your Company believes that human resource pool has to play an important role in the emerging competitive scenario. Accordingly, several initiatives have been taken for the growth and development of employees to face future challenges.

Manpower Details:

The committed workforce of 1466 continued to perform their duties, despite challenges posed by COVID-19 to fuel the country. The total number of employees as on 31^st March, 2023 was 1466 comprising of 753 Executives and 713 Nonexecutives.

New Initiatives:

The following initiatives were taken up by your Company during the year 2022-23

â¢ Competency Development Program was conducted for our employees in Grade D and above by premier institute viz. XLRI, Jamshedpur on all eight competencies (Operational, Customer, Content, Talent, Relationship, Business Result, Change and Strategic) and Mentorship.

â¢ The Company provides comprehensive welfare facilities to its employees to take care of their health, efficiency, economic betterment, etc., and to enable them to give their best at the workplace. The Company supports participative culture in the management of the enterprise and has adopted a consultative approach with collectives, establishing a harmonious relationship for industrial peace, thereby leading to higher productivity.

â¢ The Company engaged apprentices under various categories like Trade/ Technician/ Graduate. The apprentices were imparted practical inputs with a structured monitoring and assessment methodology.

Learning & Development:

During the year 2022-23, your company has achieved 3.21 Average Training Man-Days against the target of 2.5 Man-Days. 259 Training programmes have been conducted and 1236 employees have attended the training.

â¢ Core Course Module I Training on âRefinery Operationsâ conducted for 15 Supervisory Employees from 23^rd May 2022 to 27^th May 2022 at Refinery Engineering School of Training (RESOT).

â¢ 11 days Mid-Career training for Officers with experience of more than 10 years conducted from 29^th September

2022 to 11^th October 2022, covering 10 Supervisory employees.

â¢ Behavior Based Safety Training Programme conducted for 108 employees on 30^th January 2023 and 31^st January

2023 at RESOT & HRD Centre.

â¢ Strategic Leadership Competency Development Program (CDP) , Business Result Leadership CDP and Mentorship Programs were conducted for employees in Grade D, E, F & G for six days by XLRI at RESOT. 24 Supervisory employees have attended the training.

â¢ Core Course Module III Training on âInstrumentation and Electrical Maintenanceâ was conducted for 18 Supervisory Employees.

â¢ Competency Development and Mentorship programs conducted for employees in Grade C & D. 17 Supervisory employees attended the training.

â¢ Following activities are completed under the Learning Management System (LMS):

- Training Need Assessment conducted for Supervisory Employees. 664 Employees attended the assessment in LMS platform.

- Individual Development Plan (IDP) prepared for the Supervisory Employees based on their performance in Training Need Assessment.

- Training Calendar prepared for the Financial Year April 2023 to March 2024.

Reservation in respect of SC/ST/OBC/PWD:

Your Company is complying with the Presidential Directives and various instructions of the Government relating to the welfare of the SC / ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-Servicemen / EWS (Economically Weaker Section). Rosters are maintained as per the directives and are regularly inspected by the Liaison Officer(s) of the Company as well as the Liaison Officer of the Government of India to ensure proper compliance.

Out of the total manpower, there were 300 SC employees and 50 ST employees as on 31^st March, 2023, constituting 20.46% and 3.41% of the total manpower respectively.

In accordance with the Presidential Directive, the details of representation of SCs/STs/OBCs in the prescribed proforma are attached as Annexure II.

Your Company is implementing the provisions of the Rights of Persons with Disabilities Act, 2016 by way of 4% reservation for physically challenged and disabled persons. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process in line with the Government guidelines.

Compliance with Prevention of Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013.

Your Company is committed to prevention of sexual harassment of women at the workplace and takes prompt action in the event of reporting of such incidents. In this regard, an Internal Complaints Committee has been constituted to deal with sexual harassment complaints and conduct enquiries, if any. Further, a hand-book on Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 released by the Ministry of Women and Child Development, Government of India, has been uploaded on the intranet to sensitize all employees about the provisions of the Act. Regular workshops were organized, especially for women employees to bring awareness about their rights and facilities at the workplace emphasizing the provisions of the Act. There were no complaints of sexual harassment during the year.

Women Empowerment:

Your Company is committed to diversity and inclusiveness and focusses on women development & gender equality. As on 31^st March, 2023, 76 women employees are on the rolls of the Company, of whom 61 are in the supervisory cadre and 15 are in non-supervisory cadre, constituting 8.10% of the total supervisory employees and 2.10% of the total nonsupervisory employees.

Management has conducted meeting with the representatives of Women Cell to encourage the well-being of women employees.

International Womenâs Day was celebrated on 08.03.2023. Special Invitee Dr.A.Sadhana Rajkumar, spoke on the importance of nutrition and proper diet for better health and mental and physical development of women.

Corporate Social Responsibility (CSR) & Sustainable Development (SD):

Your Company continuously undertakes Corporate Social Responsibility initiatives that cater to the urgent and essential needs of the local community.

As per your companyâs Corporate Social Responsibility (CSR) Vision âStrive for Educated, Healthy, Economically Developed and Environmentally Protected community around the Refineriesâ, the CSR activities are carried out in

the thrust areas which includes providing safe drinking water, health care, sanitation, education, employment, enhancing vocational skills, empowerment of women and environmental sustainability.

To achieve your companyâs CSR vision, CSR projects are designed with the aim to positively impact economic and social conditions of the communities in which it operates, to make efforts towards self-sustainability of CSR projects and to take initiatives on environmental sustainability.

The CSR Policy of the Company can be accessed on the website of the Company under the link https://www.cpcl. co.in/policies

As the average of Net Profits for the preceding three financial years was negative, there was no mandate to spend amount towards CSR for the year 2022-23. Despite this, to sustain the ongoing CSR projects, your company had spent a sum of Rs. 604.13 Lakhs.

A detailed report on CSR activities as per the provisions of Companies Act 2013 along with CSR highlights during the year is attached (Annexure-III).

Corporate Environment Responsibility (CER):

During the year, the following activity was carried out under CER:

â¢ Contributed for Green Tamil Nadu Mission, to Government of Tamilnadu for planting trees to increase the green cover in the State from 24% to 33%.

VIGILANCE

The vigilance department of your company continues to pursue and lay great emphasis on preventive vigilance measures.

During the year, various system improvement measures, such as âAlert generation from SAP system about pending returnable materials to higher authorities to ensure return of outstanding materialsâ, âElimination of restrictive conditions in PQ (Pre-Qualification) Criteria to increase competitionâ etc., have been incorporated.

In line with CVC''s guidelines, notice inviting tenders, tender documents and details of purchase orders and contracts awarded, including those awarded on nomination basis are hosted on the Companyâs Website.

As per the guidelines of Central Vigilance Commission a separate audit on âIntegrity of Automated Systemsâ in the Organization was done by a duly constituted Committee and the areas vulnerable for cybercrimes/frauds and other malpractices were identified. The recommendations given by the Committee to overcome the vulnerability have been implemented.

Your Company is committed to redress the Vigilance complaints in time and a provision is made available in CPCLâs website to lodge online complaints with Vigilance.

Your company has implemented the Integrity Pact (IP) as per the guidelines of the Central Vigilance Commission. Periodical meetings with Independent External Monitors (IEMs) are also being held by the Management once in every Quarter to review Integrity Pact implementation status and other relevant issues.

To increase Vigilance awareness, training programs on âPreventive Vigilance & PIDPI Complaint Handling Systemâ for newly joined Engineers and for the serving employees who have completed more than 15 years of service were organized.

Vigilance Awareness Week 2022 was observed from 31^stOctober, 2022 to 6^th November, 2022 with the theme -âCorruption Free India for a Developed Nationâ.

There were no pending disciplinary proceedings or prosecution cases as on 31^st March, 2023

PUBLIC GRIEVANCES

Your Company is committed to redress the public grievances on time. Contact details of Public Grievance Officer are displayed on the website of the Company under the link https://www.cpcl.co.in/connect/citizen-charter/public-grievance. During the year 2022-23, 14 public grievances were received and disposed of in time.

CORPORATE GOVERNANCE

A separate section on Corporate Governance forms part of this Integrated Annual Report, in line with the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015 and DPE Guidelines on Corporate Governance.

The certificate received from the Auditors of the Company regarding compliance of conditions of corporate governance, as required under SEBI (LODR) Regulations 2015 as well as compliance with the guidelines on corporate governance issued by the Department of Public Enterprises, Government of India, is annexed and forms part of this Report (Annexure-IV).

MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT

As required under SEBI (LODR) Regulations 2015, Managementâs Discussion and Analysis Report is annexed and forms part of the Integrated Annual Report (Annexure-V).

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with SEBI (LODR) Regulations 2015, the Business Responsibility and Sustainability Report, forms part of the Integrated Annual Report and is being hosted in the website of the company.

AUDIT COMMITTEE

The composition of the Committee as on 31^st March, 2023 is as under:

â¢ Mr.Ravi Kumar Rungta- Independent Director - Chairman

â¢ Dr.C.K.Shivanna, Independent Director - Member

â¢ Mr.Deepak Srivastava - Government Nominee Director - Member

Director (Finance), CPCL is the permanent invitee.

The recommendations of the Audit Committee during the year were accepted by the Board.

CODE OF CONDUCT

The Board of Directors of your Company has formulated a code of conduct for the Directors and Senior Management Personnel, which was circulated to all concerned and hosted on the Companyâs website. The code can be accessed at http://www.cpcl.co.in/codeofconduct. The Directors and Senior Management Personnel have affirmed compliance with the Code of conduct and the same was informed to the Board at the meeting held on 2704.2023.

RISK MANAGEMENT

Your Company has a well-documented Risk Assessment and Management Policy and constituted a Risk Management Committee.

The composition of Risk Management Committee as on 31.03.2023 are as under:

â¢ Mr.Arvind Kumar, Managing Director - Chairman of the Committee

â¢ Mr.S.Krishnan, Director (Operations) - Member

â¢ Mr.H.Shankar, Director (Technical) - Member

â¢ Mr.Rohit Kumar Agrawala, Director (Finance) - Member

â¢ Mr.Ravi Kumar Rungta, Independent Director - Member

â¢ Ms.Sukla Mistry, Nominee Director, IOCL - Member

The Action Taken Report on the Risk Management Policy for the Financial Year 2022-23 containing the mitigation measures on various High, Medium and Low risks were reviewed by the Risk Management Committee on 26.04.2023 and by Audit Committee and Board on 27.04.2023.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate systems of internal controls and documented procedures covering all financial and operating functions commensurate with the size of the Company and the nature of its business to provide reasonable assurance with regard to maintaining proper accounting controls, monitoring economy & efficiency of operations, protecting assets from unauthorized use or losses and ensuring reliability of financial and operational information.

Your Company has an Internal Audit Department headed by a Deputy General Manager with a mix of qualified professionals to carry out extensive audits throughout the year. Internal audit plans are reviewed by the Audit Committee.

The Statutory Auditors, in their report dated 27.04.2023, opined that the Company has in all material respects, adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2023 based on internal control over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

REMUNERATION TO AUDITORS

M/s. G.M.Kapadia & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company for the financial year 2022-23 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.0.21 crore towards statutory audit fees in addition to out-of-pocket expenses, if any, and applicable GST.

There are no qualifications in the Statutory Auditors report dated 27.04.2023 on the annual accounts for the financial year 2022-23.

Comptroller and Auditor General of India (C&AG) Audit Supplementary Audit of Financial Statements:

The Standalone and Consolidated Financial Statement for the Financial Year ended March 31, 2023, were submitted to the C&AG for supplementary audit. The C&AG have conducted supplementary audit. No action is pending w.r.t financial statements for FY 2022-23. CAG Report is forming part of Annual Report 22-23.

C&AG paras from other audits:

In addition to the supplementary audit of the financial statements mentioned above, the C&AG conducts audits of various nature including Compliance audit, Thematic audit, etc. As on March 31, 2023, there are 12 pending audit paras on various subjects, for which replies were furnished.

COST AUDITORS

M/s. Vivekanandan Unni & Associates, Cost Accountants, Chennai were appointed as the Cost Auditor of the Company for the Financial Year 2022-23 at the remuneration of Rs. 2,75,000/- plus applicable taxes and out of pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company subject to ratification by the shareholders in the Annual General Meeting.

The cost audit for the year 2021-22 was carried out and the cost audit report was filed with the Ministry of Corporate Affairs in the prescribed form within the stipulated time period. The cost audit report for the year 2022-23 would also be filed within the stipulated time.

SECRETARIAL AUDIT

Your Company has appointed M/s. A.K. Jain & Associates as the Secretarial Auditors, for the year 2022-23.

The Secretarial Audit Report for the year 2022-23 confirms that the Company has complied with all the applicable provisions of the Companies Act 2013 and the rules made thereunder and other applicable acts, rules, guidelines, applicable secretarial standards, etc. and the findings are as under:

i) Non-appointment of minimum Independent Directors-Reg. 17.

ii) The Nomination and Remuneration Committee was not having 2/3^rd Independent Directors - Reg. 19.

iii) The Stakeholders Relationship Committee did not have an Independent Director as its member for the period 01.11.2022 till 30.03.2023 as required under Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

It is clarified as under:

1) CPCL being a Government Company under the administrative control of Ministry of Petroleum and Natural Gas, the power to appoint Directors, including independent Directors, vests with the Government of India. The appointment of additional Independent Directors is under the consideration of Government of India.

2) As and when additional independent directors are appointed by Government of India, the Nomination and Remuneration Committee will be reconstituted to ensure compliance with minimum 2/3^rd independent directors.

3) The Stakeholders Relationship Committee has been reconstituted with the induction of one independent director on 31.03.2023

The report, duly certified by a Practicing Company Secretary, is attached as Annexure-VI to this Report.

Government of India, as per applicable guidelines. The above is in line with the exemption provided to Government Companies by the Ministry of Corporate Affairs.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

One separate meeting of Independent Directors (6^th) was held on 04.06.2022

REPORTING OF FRAUDS BY AUDITORS

The Auditors in their report for the year have not reported any instance of fraud committed by the officers/employees of the Company

PUBLIC PROCUREMENT POLICY FOR MSMEâs

The details of the actual values of total procurements of materials and services (total value excluding Crude, Gas, Power & License Fee) by your company during the financial year 2022-23 as against the target fixed by the Government of India are given below:

S.N	Details	Value of procurements Rs. Crore (excluding Crude, Gas, Power & License Fees)	% age target achieved	Target set by the Govt.
1	Total value of procurements	955.50
2	Procurements from MSEs (General, Reserved SC/ST & Women)	372.25	38.96%	25%
3	Procurements exclusively from Reserved SC/ST MSEs	57.83	6.05%	4%
4	Procurements exclusively from Women owned MSEs	2.11	0.22%	3%

â¢ During the year 2022-23, nine Vendor Development Programmes were conducted by CPCL for the benefit / development of the MSEs. Two exclusive programmes (development meets) were conducted by CPCL for the benefit of Reserved SC/ST MSEs and Women owned MSEs in association with the officials from the CII, MSME-Development Institute, National SC-ST Hub Office-Government of India. During these programmes, the procedure followed by CPCL for vendor registration, benefits and purchase preference extended to the MSEs, details of materials & services which can be procured from the MSEs were explained in detail to the MSMEâs.

â¢ Your Company participated in the MSME Connect 2023 - a Vendor Development Program cum Exhibition of Products on 3^rd and 4^th March 2023 organized by MSME Development and Facilitation Office, Chennai and Facilitating MSMEâs (FaME)TN, a MSME Department of Government of Tamil Nadu at Guindy Industrial Estate, Chennai. CPCL set up an exclusive stall to showcase the procurement requirements from MSE segment to the prospective vendors who participated in the meet.

Procurements through the GeM Platform:

The procurement through the GeM portal accounted for 57.57% (Rs.550.07 Crore) of the total procurements (Rs.955.50 Crore) during the year 2022-23.

MSEs procurements target for FY 2023-24:

Your Company has earmarked 25% of total procurements to be made from the MSEs for the FY:2023-24 in accordance to the PPP for MSEs Order 2012 of the Government of India. Out of this 25% target, 4% is earmarked for procurements from

Reserved SC/ST MSEs and 3% is earmarked for procurements from Women owned MSEs.

Awards and Recognition:

In recognition of your Companyâs performance of exceeding the mandated targets with respect to procurement from MSMEâs, your company has been awarded the MSME Ecosystem Awards under âExcellence in MSE Procurement categoryâ instituted by FICCI-CMSME on 05.12.2022 and âCertificate of Appreciationâ for highest procurement in SC/ ST Category MSEs from Ministry of MSME on 18.11.2022.

â¢ Your Company received the Certificate of Appreciation for the highest procurement amongst Mini Ratna Central Public Sector Enterprises (CPSEs) from SC-ST category under Micro, Small, Enterprises (MSEs) during the financial year 2021-22 from the Ministry of MSME. The Certificate of Appreciation was presented at the CPSE Conclave on Public Procurement Policy at Vigyan Bhavan, New Delhi on 18.11.2022. The Conclave was inaugurated by Mr.Bhanu Pratap Singh Verma, Honâble Minister of State for Micro Small Medium Enterprises.

The details of contracts or arrangements with related parties referred to under Section 188 (1) of the Companies Act, 2013 in the prescribed Form AOC-2 are attached as Annexure -VII of the Report.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

Statutory details on Energy Conservation and Technology Absorption, R&D Activities and Foreign Exchange Earnings and Outgo, as required under the Companies Act, 2013 and the Rules prescribed thereunder are given in the Annexure-I and form part of this Report.

PARTICULARS OF EMPLOYEES

The provisions of Section 134(3)(e) of the Act are not applicable to a Government Company. Consequently, details on Companyâs policy on Directorsâ appointment and other matters as required under Section 178 (3) of the Act, are not provided.

Similarly, Section 197 of the Act is not applicable to a Government Company. Consequently, there is no requirement of disclosure of the ratio of the remuneration of each Director to the median employeeâs remuneration and other such details, including the statement showing the names and other particulars of every employee of the Company, who if employed throughout / part of the financial year, was in receipt of remuneration in excess of the limits set out in the rules, are not provided in terms of Section 197 (12) of the Act read with Rule 5 (1) / (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The following changes have occurred in the Board of the Company:

1) The tenure of Mr. Amitabh Mathur and Mr. Myneni Narayana Rao, Independent Directors were completed on 29.07.2022. The tenure of Mrs. Sobhana Surendran, Independent Director was completed on 31.10.2022.

2) Mr. Rohit Kumar Agrawala has been appointed as Director (Finance) effective 01.03.2023 consequent to the superannuation of Mr. Rajeev Ailawadi on 28.02.2023.

3) Mr. K.Surendaran has been appointed as Independent Director effective 27.03.2023.

JOINT VENTURES

Indian Additives Limited (IAL):

Your Company has a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) in the year 1989 for manufacture of lube additives components and packages. The share capital of IAL is Rs.23.67 crore. CPCL and Chevron hold 50% each in the share capital of IAL.

The Revenue from Operations of IAL is Rs.1196 crore during the year 2022-23, as against Rs.866.74 crore in the previous year. The Profit after Tax for the year 2022-23 was lower at Rs.11.13 crore because of higher input cost as against Rs.31.70 crore in the previous year. No dividend was recommended by the Board of IAL for the financial year 2022-23.

National Aromatics and Petrochemicals Corporation Limited (AROCHEM):

Your Company has another Joint Venture with M/s. Southern Petrochemicals Industries Corporation Ltd. (SPIC) in the year 1989 for manufacture of PTA, Paraxylene, Orthoxylene and Benzene. The share capital of AROCHEM is Rs.0.05 crore. CPCL and SPIC hold 50% each in the share capital of AROCHEM. Since the JV is not operational, the investments have been fully provided for diminution in value.

Cauvery Basin Refinery and Petrochemicals Limited (CBRPL):

Cauvery Basin Refinery and Petrochemicals Limited (CBRPL) was incorporated on 06-Jan-23 between IOCL, CPCL & other seed equity investors., for implementing a new grass root refinery of 9 MMTPA capacity with petrochemical facilities at Nagapattinam, Tamil Nadu. The new refinery will be set up in an area of about 1300 acres, out of which 618 acres is already owned by your company and the balance land is under advanced stage of acquisition. This new refinery will produce Petrol and Diesel of Bharat Stage-VI specifications and Polypropylene as a value added product. Contract had been awarded to all 4 EPCM consultants. Site grading, Construction power & Construction water works are gathering momentum at site.

RELATED PARTY TRANSACTIONS (RPTs)

A policy on material RPTs was framed in line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations 2015, which can be accessed on the Company website at the link https://www.cpcl.co.in/Policies. Your Company has undertaken transactions with related parties during the year, which are in the ordinary course of business. As per the RPT Policy, approval of Audit Committee has been obtained for all RPTs. During the year, there were no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Notes to the Annual Accounts.

Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year.

Your Company being a Government Company, the power to appoint Directors (including Independent Directors) vests with Government of India. The Directors are appointed by following a process as per laid down guidelines. In the opinion of the Board, the Independent Directors have requisite expertise and experience.

INDEPENDENT DIRECTORS

A separate meeting of Independent Directors was held during the year as per the provisions of the Companies Act and SEBI LODR.

BOARD MEETINGS

During the year, Eight meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders were passed by the regulators or courts or tribunals that impact the going concern status and the Companyâs operations in future.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The provisions of Section 134(3)(p) of the Companies Act, 2013, require a listed entity to include a statement indicating the manner of formal evaluation of performance of the Board, its Committees and of individual Directors. However, the said provisions are exempt for Government Companies as the performance evaluation of the Directors is carried out by the administrative ministry, i.e., Ministry of Petroleum and Natural Gas (MoP&NG), as per laid-down evaluation methodology.

DETAILS OF LOANS / INVESTMENTS / GUARANTEES

Your Company has not provided Loans/Guarantees/Security to any person, body corporate or joint venture during the year.

ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the Annual Return is being hosted on the Companyâs website and can be accessed from the link: https://cpcl.co.in/ investors/financials/statutory-disclosure/.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) the Companies Act, 2013 with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) t he Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

iii) t he Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended 31^st March, 2023, on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

vi) t he Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

RIGHT TO INFORMATION

Your Company complies with The Right to Information Act, 2005. In accordance with the provisions of the RTI Act, necessary disclosures have been made on the website of the Company under the link https://www.cpcl.co.in/connect/ citizen-charter/right-to-information/.

During the year, a total of 160 requests were received and 148 requests were disposed off. The pending 12 requests were disposed off subsequently within time.

OFFICIAL LANGUAGE POLICY

Your Company complies with the directives issued by the Official Language Department, Ministry of Home Affairs, Government of India from time to time to increase the progressive use of Hindi.

The Official Language Implementation Committee meeting of your Company was conducted every quarter under the Chairmanship of the Managing Director to review the implementation of Official Language Policy in the Company.

The First Sub-Committee of Parliament on Official Language inspected your Company on 21.5.2022. The Committee held discussions on the implementation of Official Language Policy with our Managing Director. Director(Finance), Director(Technical), CVO and Hindi Officer attended the meeting. The Joint Secretary (Gen & Admin), MOP&NG and

Deputy Director, Official Language, MOP&NG participated on behalf of MOP&NG. The Committee appreciated the work done by your Company with regard to the implementation of Hindi in your Company and extended special thanks for organizing the committee meeting very well.

Your Company celebrated Hindi Day on 28.09.2022. As a part of the Celebration, Hindi Singing and Hindi Essay competitions were held for employees. Our Managing Director presided over the functions and distributed prizes to the winners of the competitions. The CVO, CGMs, GMs, DGMs, Officers and other Employees participated in the celebration.

Your Company received Third Prize for excellent implementation of Official Language for the year 2021-22 at a meeting of Town Official Language Implementation Committee (PSU) Chennai held on 07.12.2022.

ACKNOWLEDGEMENT

Your Board of Directors sincerely appreciate the co-operation and support of all the employees for the stellar performance of the company during the year 2022-23.

Your Board of Directors extend their profound thanks to the Government of India, particularly the Ministry of Petroleum & Natural Gas, other ministries, the Government of Tamil Nadu, Indian Oil Corporation Ltd., Naftiran Intertrade Company Ltd., Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, and Other Regulatory and Statutory Authorities.

Your Directors express their gratitude to all the stakeholders for their support and confidence reposed by them on the Company.

Your Directors also place on record their appreciation of the valuable contributions made by Mr.Myneni Narayana Rao, Mr. Amitabh Mathur, Mrs.Sobhana Surendran and Mr. Rajeev Ailawadi during their tenure on the Board.

For and on behalf of the Board (S.M.VAIDYA)

Place:Chennai NON-EXECUTIVE CHAIRMAN

Date: 05.072023 DIN - 06995642

Mar 31, 2022

On behalf of the Board of Directors of your Company, I am pleased to present the 56^th Annual Report on the working of your Company, together with the audited statement of Standalone and Consolidated Accounts, Auditors'' Report and the Report of the Comptroller and Auditor General of India on the accounts for the year ended March 31, 2022.

PERFORMANCE REVIEW

Financials (Standalone and Consolidated)

The summary of the Standalone and Consolidated Financial Results are as under:					(H in Crore)
Particulars	Standalone			Consolidated
Particulars	2021-22		2020-21	2021-22	2020-21

Gross Turnover	60402	41814		60402	41814
Profit Before Finance Cost, Depreciation and Tax	2748	2119		2742	2113
Finance Cost	412	375		412	375
Depreciation, Amortisation and Impairment	504	467		504	467
Profit Before Tax ( before Share of Profit of Joint Ventures)	1832	1277		1826	1271
Share of Profit of Joint Ventures	-	-		16	25
Profit Before tax	1832		1277	1841	1296
Tax Provision	489	1039		489	1039
Profit After tax	1342	238		1352	257

Analysis of Profitability

The Company posted substantial higher Profit Before Tax of H 1,832 crore higher by 43%. Pursuant to the option of moving to new taxation regime, the taxation was lower at H 489 crore. The Profit After Tax (PAT) hence was significantly higher at H 1,342 crore as against H 238 crore in the previous year.

The above was achieved in the backdrop of continuing Covid/ Omicron threat, particularly in the first half of the year and major shutdown for maintenance in part of second and third quarter of the year.

The robust operations post shut down and higher cracks contributed significantly to the improved performance. The GRMs thereby increased from US $7.14/bbl in 2020-21 to US$ 8.85/bbl in 2021-22 .

Highlights

â¢ During the FY 2021-22 your Company recorded an alltime high turnover of H 60,402 Crore, PBT of H 1,832 Crore and PAT of H 1,342 Crore.

â¢ ''Nil'' comments received from C&AG for the financial year 2021-22 - 18^th year in succession.

â¢ Issued H 775 Crore 3 years Bonds @ a coupon of 5.44% during June-2021 and listed in NSE and BSE.

â¢ Eligibility certificate received from SIPCOT for an incentive from the Government of Tamil Nadu for our RESID up-gradation project.

Issue of Securities /Changes in Share Capital

During the year 2021-22, there is no change in the share capital of the Company. Your Company allotted 7,750 Unsecured, Non -Cumulative, Convertible, Redeemable, Taxable Debentures (SERIES II - 2022) of H 10,00,000/- each aggregating to sum of H 775/- Crores with an interest of 5.44% p.a. This was done in pursuance of strategy to take advantage of lower rates in the markets and also to balance the borrowing portfolio.

Dividend

Article 114 of the Articles of Association and Guidelines on Capital Restructuring of Central Public Sector Enterprises dated 27^th May, 2016 issued by the Ministry of Finance, Department of Investment and Public Management (DIPAM), Government of India together constitute the Dividend Distribution Policy of the Company and the same is hosted on the website of the Company under the link https://www.cpcl.co.in/ Policies/2018/dividend%20distribution%20policv.pdf

Our Board has recommended a Dividend of 6.65% on the paid up outstanding preference share capital of the Company, representing H 0.665 per preference share amounting to H 33.25 crore for the year 2021-22. This will be paid along

with arrears of previous years of H 105.76 crore. The Board has recommended a dividend of 20% on paid-up Equity Share Capital of the Company as on 31.03.2022 amounting to H 2.00/- per equity share.

Book Value and Reserves and Surplus

There has been significant accretion to the reserves of the Company due to enhanced profitability. The reserves and surplus as on 31^st March, 2022 more than doubled to H 2,641.32 Crore as compared to H 1,275.66 Crore as on 31^st March, 2021.

The book value per share of your Company as on 31.03.2022 increased significantly to H 187.38 as compared to H 95.67 as on 31^st March, 2021.

Value Addition

The value addition during the year 2021-22 witnessed a steep increase at H 3,835 crore as compared to H 2,947 crore in the previous year.

Digital India Initiative

Your Company has achieved 100% digital transactions during the financial year 2021-22. The Company provides QR code based payment facility for its customers and integrated online receipt facility.

Contribution to Exchequer

Your Company has regularly been contributing to both state and Central exchequers in the form of duties and taxes. The details are as under:

(J in Crore)
Particulars	2021-22	2020-21
Central Exchequer	18124	19720
State Exchequer	798	485
Total	18922	20205

Capex

CPCL has incurred capital expenditure for the year 2021-22 of H 634.90 Crore as compared to H 583.13 Crore in the previous year 2020-21.

Public Deposit Scheme

Your Company has not accepted any public deposits during the year 2021-22 and no public deposit was outstanding as on 31^st March, 2022.

Share Value
The highest and lowest market value of the Company''s shares
quoted in the stock exchanges for the period 1^st			April, 2021 to
31^st March, 2022 are as under:
Stock Exchange	High	Low
NSE	H 151.80		H 93.00
BSE	H 151.80		H 93.00
Credit Rating
The Company''s financial prudence is reflected			in the strong
credit ratings assigned by the credit rating agencies. The
details of credit ratings are as under:
INSTRUMENT	RATING AGENCY	RATING
Short term	CRISIL,CARE and		AAA
borrowings / PCFC	ICRA
(including BG) Commercial Papers	CRISIL and ICRA		A1
Debentures	CRISIL,CARE and ICRA		AAA

Transfer of Unclaimed Dividend to IEPF

No dividend amount / shares is required to be transferred to the Investor Education and Protection Fund (IEPF) as per Section-124 of the Companies Act, 2013 during the year 202122, as no dividend was declared in view of the losses for the FY 2013-14.

OPERATIONAL PERFORMANCE
PHYSICAL
CRUDE OIL THRUPUT (in TMT)	2021-22	2020-21
Imported	7208	6388
Indigenous	1833	1855
Total Throughput	9040	8243
PRODUCTION (in TMT) Light Ends	2178	2043
Middle Distillates	4842	4454
Lube Base Stock	195	152
Wax	23	19
Heavy Ends	1134	985
Intermediates differential	88	(58)
Other Inputs	(328)	(260)
Fuel and Loss	909	908
Total Output	9040	8243
Distillate Yield	74.9	76.4
(TMT = Thousand Metric Tonnes)

Operational Performance

Your Company achieved a throughput of 9.040 MMTPA in 202122 as compared to 8.243 MMTPA in the previous year. Crude throughput was lower due to product containment because of lower product demand on account of Covid-19 pandemic in Q1 and Refinery-III M & I shutdown in Q2. In spite of challenges faced due to Covid-19, your Company, through its dedicated employees ensured operations of the refinery in extremely difficult and challenging conditions. Refinery operations were sustained and supply of LPG, MS, and HSD was ensured to the market.

Your Company clocked the highest ever production in respect

of the following despite challenges on Covid:

â¢ Hexane - Production of 26.7 TMT against previous best of 22.5 TMT in 2020-21.

â¢ HSD BS VI - Production of 3,935 TMT against previous best of 3,736 TMT in 2020-21.

Some of the other highlights of operational performance

during the year are as under:

â¢ The distillates yield achieved for FY 2021-22 was 74.9% as compared to 76.4% in 2020-21.

â¢ The Energy Intensity Index (EII) for FY 2021-22 was 96.2 as compared to 102.3 in the year 2020-21.

â¢ The specific energy consumption achieved for FY 202122 was 82.6 as compared to 86.5 in the year 2020-21.

â¢ Operational availability during the year was 96.5% as compared to 92.6 % in the previous year.

â¢ Fuel and Loss was lower at 9.7 wt % as compared to 10.7 wt % in the previous year.

â¢ Exported BS-VI HSD (Flashpoint: 55Â°C) in Jun''21 and subsequently two more parcels were exported in Jul''21 and Dec''21, through IOC-BD to Bangladesh.

â¢ Produced new value added product MTO and product sales commenced from Jun''21 onwards. Achieved the highest MTO dispatch of 2.33 TMT in Dec''21.

â¢ Successfully processed two new crude Bonga from Nigeria (TAN: 0.6) and Sapinhoa (high N²) from Brazil. This is the first crude processed by CPCL from Latin American Region.

â¢ Post completion of Refinery III M&I shutdown, all crude and secondary unit T''puts were maximised (CDU combined T''put increased to 10% above design, OHCU T''put raised to 10% over design and FCCU T''put at 38% over design).

â¢ Higher RLNG consumption of 283.2 TMT for FY 2021-22 against previous best of 260.4 TMT in 2020-21.

MOU PERFORMANCE

The rating received from DPE for the year 2020-21 is ''Very

Good''. Your Company had signed an MoU with Indian

Oil Corporation Ltd., the holding Company, setting the

performance parameters and targets for the year 2021-22, as per the guidelines issued by the Department of Public Enterprises (DPE).

MARKETING

Indian Oil Corporation Ltd., the holding company, markets a majority of fuel products and POL produced by your Company.

The details of sale of products through direct marketing by your Company during 2021-22 as compared to the previous year 2020-2021 are given below:

PRODUCT	SALE QTY (IN MT)
PRODUCT	2021-22 \|	2020-21
A: Downstream Products Linear Alkyl Benzene Feed	77141	77965
Stock (LABFS) Butene Methy1 Ethyl Ketone	19802	20391
Feed Stock (MEKFS) Propylene	34068	32404
Poly Butene Feed Stock	11695	12385
(PBFS) Lean PBFS B: Other Products Paraffin Wax	23494	19420
Hexane	21876	23304
Sulphur	81125	77091
Petcoke	349349	303084
Mineral Turpentine Oil (MTO)	8159	0
Furnace Oil	4030	3570
TOTAL	630739	569614

During the year, your Company achieved substantial growth in the sale of products like Propylene, Paraffin wax, Petcoke and Sulphur through proactive marketing initiatives. Direct sale of products recorded an increase of about 11 %, from 570 TMT in 2020-2021 to 631 TMT during 2021-2022 in spite of Covid-19 pandemic situation.

RESEARCH AND DEVELOPMENT (R&D)

Your Company''s R&D plays a pivotal role in providing support to refinery operations.

During the year various studies were carried out as under:

â¢ Reduction of aromatic content in hydrocracker kerosene to meet rocket propellant requirement;

â¢ Hydrotreatment of deasphalted oil to improve the process of Bright Neutral Lube Oil Base Stock production;

â¢ Production of Light Neutral Lube Oil Base Stock from Unconverted Oil by dewaxing process.

PROJECTS

Your Company pursues projects that enhance product quality and meet operational necessities. Your Company achieved a capex of H 634.90 crore, during the year.

COMPLETED PROJECTS

RLNG Project

During the year, all balance units such as Boiler IV & V, HGU 205 were converted and commissioned. Secretary, MoPNG inaugurated HGU 205 in Oct 2021.

Fuel Quality Upgradation Project

During the year, as part of Fuel Quality Upgradation project, your Company has commissioned the new Instrument Air Compressor, associated dryer units and Demountable Flare.

Other Projects

To improve operational reliability and to increase the storage of raw water capacity of the refinery, your Company has completed installation and commissioning of booster pumps and laying of pipelines to receive TTRO water of CMWSSB at 4.0 MGR reservoir in Sep 2021.

PROJECTS UNDER IMPLEMENTATION

Pharma Grade Hexane Production at Manali Refinery

Your Company is envisaging production of Pharma Grade Hexane in the Isomerisation Unit. BDEP has been completed and the EPCM contract has been awarded for proceeding with project implementation. The estimated cost of the project is H 43.53 Crore and the anticipated completion is by Jul 2023. The physical progress is 35.1 % as of 31.05.22.

CBR 9 MMTPA Project

Your Company is setting up a new grassroot refinery of 9 MMTPA capacity at Nagapattinam, in JV mode with IOCL and other strategic partners. The new refinery will be set up in an area of about 1,300 acres. This new refinery will produce Petrol and Diesel of Bharat Stage-VI specifications and Polypropylene as a value added product, at a Project cost of H 31,580 Crore. Further investment of about H 4,000 Crore will flow into the project from other stakeholders on ''Build Own and Operate'' (BOO) basis.

AH consultants have been lined up and detailed engineering and tendering activities are in progress. Site enabling works have also commenced. In addition to the existing 618 acres of land, acquisition of a further 606 acres from Government of Tamil Nadu is in advanced stage. The project is expected to be completed by June 2025.

FUTURE PROJECTS

Group II LOBS Project

Your Company is planning to implement a project for production of Group II Lube Oil Base Stocks. First stage approval for the project has been obtained. Pre-project activities such as selection of licensors, Environment studies and selection of EPCM consultant are in progress.

INFORMATION TECHNOLOGY

Your Company has implemented the Digital initiatives for Inspection Modules and Internal Safety Audit System during the year.

HEALTH, SAFETY AND ENVIRONMENT

RESPONDING TO CHALLENGES OF COVID-19

Your Company continued to follow Covid-19 related protocols which were implemented as per the guidance of MOH&FW and Health Ministry of Tamil Nadu. Medical Support was rendered to all employees, and stakeholder during the Covid-19 pandemic waves. Vaccination drive was carried out for all employees, their family members, Indco-serve, CISF, Apprentices and contract workers.

This was instrumental in successfully completing Covid-19 free M&I shutdown 2021 without a single case of Covid-19 positive reporting, amidst the pandemic.

Your Company maintained its initiatives even after easing of Covid-19 by extending assistance to various stakeholders as under:

Strengthening the Health care Infrastructure:

â¢ Supported the Central and state governments by setting up 6 PSA Oxygen Plants in 4 government hospitals, 2 each in Kerala and Karnataka to improve the health care infrastructure, tackle the second wave of pandemic and to avert the oxygen shortage.

Support to Government

â¢ Supported the Covid Warriors such as police personnel of Mamallapuram sub division by averting social gathering in this World Heritage Monument and sustain the livelihood of the people dependent on tourism.

â¢ Supported the Government of Tamil Nadu under the Namakku Naame Thittam in developing the Chennai City Clean and Green in setting up of Water Fountain at MMDA Park, Mathur and 200 ft road lorry parking yard.

â¢ Supported the Additional Principal Chief Conservator of Forest and Director, Arignar Anna Zoological Park (AAZP) in constructing a toilet block (opposite to Ostrich enclosure) for the use of the public to upkeep hygiene and sanitation.

Community support

â¢ Distributed 7500 Kg rice packets of boiled rice to the North Chennai people.

â¢ Distributed relief materials such as groceries to support the livelihood of 837 North Chennai people affected due to flood devastation.

â¢ Information, Education and Communication (IEC) related to Covid-19 in the form of awareness talk and distribution of pamphlets and reusable fabric cloth face mask for the rural village community people in Ramanathapuram and Nagapattinam District of Tamil Nadu.

â¢ Provided Nutritious Meals and distributed school bags to the special children studying in the National Institute for Empowerment of Persons with Multiple Disabilities (NIEPMD) on account of International Day for Persons with Disabilities.

Health

Various health promotion programmes were conducted for the wellbeing of the employees, as under:

â¢ ''AH about covid-19, Vaccination and Third wave (future)''

by eminent specialist attended by 170 employees/retired employees.

â¢ Webinar on ''Ergonomic principles in preventing Neck and Back pain'' attended by around 75 employees.

â¢ ''First Aid and Mental Health'' and ''Woman Health and family welfare issue'' Awareness programmes for CISF and their family members attended by 100 CISF personnel.

â¢ Seven training programmes on ''Occupational Hazards and First Aid'' were conducted and attended by around 350 Employees

Voluntary Blood Donation Camp held at Occupational Health Services at CPCL for Dr. Rajiv Gandhi Government General Hospital, Chennai. Sixty employees including Managing Director contributed to the noble cause by donating blood on this occasion.

Safety

Your Company remains committed to the highest standards of safety and ensures utmost care and concern for the safety of its employees and refinery installations while carrying out its operations.

Total accident free days and fire free days achieved as on 31.03.2022 are 916 and 788, respectively.

Significant safety initiatives undertaken during the year include the following:

â¢ Emergency Response and Disaster Management Plan (ERDMP) Manual of CPCL Manali Refinery and CPCL LPG bottling plants certified with validity up to September, 2024 and March, 2026 respectively in line with the latest PNGRB Regulations.

â¢ Onsite Emergency Mock Drills conducted at Manali Refinery as per Emergency Response and Disaster Management Plan.

â¢ Monthly Mock Drills conducted with different scenarios to check preparedness of our systems and healthiness of equipments.

â¢ As a part of Behaviour Based Safety implementation, training programmes were arranged for 215 employees in the financial year. Thereafter, Behaviour Based Safety Portal was developed in CPCL Intranet for tracking the effective implementation.

â¢ Ref-III major shutdown jobs completed without any incidents. Round the clock safety surveillance was ensured.

â¢ Inherent Fire Retardant (IFR) suits made compulsory for all employees and workers before entering into plant. IFR suits are issued to eligible employees in this regard.

â¢ Radar speed guns were purchased and installed at 4 locations in the refinery for round the clock vehicle speed monitoring. Recordings and Data are being collected.

â¢ Vertigo model installed at the refinery to test worker''s height phobia before assigning him to work at height.

Safety Audits conducted during the year were as under:

â¢ PNGRB - T4S audit for LPG bottling plant between 14^thMarch, 2022 to 16^th March, 2022

â¢ Pre-commissioning safety audit of Hydrogen Unit under RLNG Revamp Project on 30^th September 2021 by OISD.

â¢ Safety audit as per PESO guidelines, on 10^th March, 2022 through PESO authorized agency.

â¢ LOTO system audit was conducted.

â¢ Audit of the entire refinery structures was done to identify weak/corroded structures and unsafe ladders/platforms/ railings.

The recommendations of both internal and external safety audits are being implemented in time bound manner with regular monitoring during the monthly Central Safety Committee meeting.

Environment

Your Company continues to demonstrate its concern for environment protection by devoting considerable resources

to comply with the applicable rules and regulations, by undertaking several initiatives.

During the year, Energy Management System (ISO 50001) is being implemented and as part of EnMS. Energy Policy was framed.

During the year your Company retrofitted two boilers, one Gas Turbine and one Hydrogen Reformers for using RLNG, a cleaner fuel compared to Fuel Oil/ Naphtha.

In recognition of the Company''s efforts in the areas of environmental protection, your Company was conferred with an award under the category ''Usage of Secondary Treated Water for Industrial Use for the year 2021'' during Virtual Water Conclave and Awards 2021 organised by FICCI (Federation of Indian Chambers of Commerce and Industry), Tamil Nadu Council supported by Municipal Administration and Water Supply Department, Government of Tamil Nadu, for best utilisation of Secondary Treated City Sewage Water of 15 MLD on continuous basis to produce Industrial water (Demineralised plant feed water that is RO water) through Tertiary Treatment Plant at CPCL since 1990.

ENERGY CONSERVATION

Your Company continues to give focused attention to energy conservation and makes consistent efforts to monitor and optimise energy usage.

During the year, your Company achieved an MBN and Energy Intensity Index (EII) of 82.6 and 96.5 (Best achieved) respectively as against 86.5 and 104.5 in 2020-21. Eleven energy conservation measures were implemented successfully during the year 2021-22. This resulted in energy savings of 42,810 Standard Refinery Fuel Tonne (SRFT) per annum

which is approximately 0.43% reduction in F&L. The details of energy conservation measures are given in Annexure I. Mandatory Energy Audit (MEA) by PCRA was carried out from 2^nd to 18^th August, 2021.

As per the M/s Solomon Associates Benchmarking Study 2020, the overall performance of your Company was better when compared to the previous year, as one quartile improvement was observed in most of the Performance Indicators. Solomon opined that EII (Energy Intensity Index) of your Company is on improving trend w.r.t process unit utilisation and FCCU performance was well appreciated by Solomon.

RELIABILITY IMPROVEMENT INITIATIVES

1) Remote Monitoring of BHEL Gas Turbines by M/s BG-GTS, ROC Hyderabad.

Your Company as part of its reliability improvement, implemented its first predictive analytics system by remote monitoring services of GT through M/s. BG-GTS (BHEL GE Gas Turbine Services). Accordingly, GT''s are currently equipped with 24X7 remote monitoring services of M/s. BG-GTS with predictive analytics feature. Real time data of GT''s is being transferred securely through dedicated BSNL leased line to BG-GTS - RMD center at Hyderabad.

2) Upgrade of Critical Control Systems.

The obsolete control systems (DCS, PLC, SCADA and AntiSurge) in critical units in Refinery-III were replaced during M&I shutdown. All the new control systems are state of the art systems with advanced diagnostics and enhanced safety features, thereby ensuring reliability.

3) Medical Oxygen during Covid-19 - Second Wave.

During the second wave of Covid-19, to bridge the gap of oxygen demand, O₂ produced as a By-product in N₂O₂ unit was supplied to cater medical needs of Covid-19 patients. The R&D centre was re-structured as makeshift hospital to treat patients with medical grade oxygen. Necessary analysers and instruments were procured to ensure 99.9% pure medical oxygen was supplied un-interruptedly to the hospital.

4) Ultrasound predictive maintenance technology.

Your Company has used ultrasound analysis , a predictive maintenance (PdM) tool for monitoring the condition of bearings, cavitation detection in pumps, leak detection, mechanical inspection, electrical Inspection, electric arc flash detection, steam trap maintenance, and valve testing, to improve reliability of both electrical and rotating assets.

HUMAN RESOURCES

Your Company believes in holistic and meaningful employee engagement and the development of its human resources. Integrated HR practices through focused recruitment, career path and learning and development contributed to the future readiness of the workforce. Your Company has a structured and robust succession planning framework for the identification and development of talent for the leadership pipeline.

Manpower Details:

The strong, dedicated and resilient workforce of 1,486 continued to perform their duties, despite challenges posed by

Covid-19 to fuel the country. The total number of employees as on 31^st March, 2022 includes 753 Executives and 733 Nonexecutives.

New Initiatives

The following initiatives were taken up by your Company during the year 2021-22:

â¢ Competency Development Programme conducted in premier institutes such as XLRI and IIM, Kozhikode on Relationship Leadership, Business Result Leadership and Operational Leadership.

â¢ Comprehensive welfare facilities provided to employees to take care of their health, efficiency, economic betterment, and so on, and to enable them to give their best at the workplace.

â¢ Supports participative culture in the management of the enterprise and has adopted a consultative approach with collectives, establishing a harmonious relationship for industrial peace, thereby leading to higher productivity.

â¢ E-Learning Modules: During the year four (04) new modules such as Heater Operation, Protection of CPCL Electrical Equipment, Reservation for SC/ST/OBC in Service and CDA Rules and Standing Orders were rolled out for employees.

â¢ During the Covid-19 pandemic, your Company took several initiatives to ensure the safety and well-being of the employees as well as its frontline workers engaged with its business partners.

â¢ Engaged apprentices under various categories like Trade/ Technician/ Graduate. The apprentices were imparted practical inputs with a structured monitoring and assessment methodology.

Training: Learning and Development

Your Company''s strong leadership development philosophy is based on the belief that an empowered individual utilises opportunities and rises above others to take complete ownership of a task and makes significant differences. Your Company has made significant progress on this front, to develop flagship programmes that encourage leadership skills at all levels. Different types of training programmes have been formulated for employees at different levels, based on their roles in the organisation.

During the year 2021-22, your Company has achieved 2.89 Average Training Man days against the target of 2.5 Man days. 160 webinar training programmes have been conducted and 1,198 employees have attended.

Other initiatives in the areas of Training are as under:

â¢ Conducted seven batches of Simulator training (5 days'' programme).

â¢ Relationship Leadership Competency Development Programme conducted by XLRI in 4 batches (2 days per batch) for employees in Grades C, D, E, F and G.

â¢ Business Result Leadership Competency Development Programme conducted by IIM, Kozhikode in 2 batches (2 days per batch) for employees in Grades D, E and F.

â¢ Operational Leadership Competency Development Programme conducted by IIM, Kozhikode during February 2022 (2 days) for Grade C.

â¢ Change Leadership Competency Development Programme conducted by IIM, Kozhikode during February 2022 (2 days) for Grade C.

â¢ 11 days mid-career training for officers having experience of more than 10 years was conducted in 2 batches during December, 2021 and February, 2022.

â¢ Learning Management System was developed and the same is in the implementation phase.

Reservation in respect of SC/ST/OBC/PWD

Your Company has been following the Presidential Directives and various instructions of the Government relating to the welfare of the SC / ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-Servicemen / EWS (Economically Weaker Section). Rosters are maintained as per the directives and are regularly inspected by the Liaison Officer(s) of the Company as well as the Liaison Officer of the Government of India to ensure proper compliance.

Out of the total manpower, there were 321 SC employees (previous year: 346) and 48 ST employees (previous year: 49) as on 31^st March, 2022, constituting 21.60% and 3.23% of the total manpower respectively.

In accordance with the Presidential Directive, the details of representation of SCs/STs/OBCs in the prescribed proforma are attached as Annexure II.

Compliance with Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013

Women Empowerment:

Your Company gives special focus to the various facets of women development plans and programmes. As on 31^st March, 2022, 79 women employees are on the rolls of the Company, of whom 59 are in the supervisory cadre and 20 are in nonsupervisory cadre, constituting 7.83% of the total supervisory employees and 2.73%of the total non-supervisory employees.

Two meetings with the representatives of Women Cell were conducted to encourage the well-being of women employees.

International Women''s Day was celebrated on 08.03.2022 at Crowne Plaza, Chennai. Chief Guest Tmt I. S. Mercy Ramya, IAS, Joint Commissioner, Commercial Tax Department and Special Invitee Brahma Kumari Sister. Kowsalya, RajYoga Teacher shared their experience on women empowerment.

Corporate Social Responsibility (CSR) and Sustainable Development (SD):

Your Company''s CSR activities focus on improving the lives of the poor and the needy. The thrust areas of CSR activities include safe drinking water, health care , sanitation, education, employment enhancing vocational skills, empowerment of women and economically and socially backward groups, environment sustainability and so on. The CSR activities are predominantly undertaken in the vicinity of the Company''s installations to improve the quality of life of the communities including the marginalised groups such as SC/ST/OBC and the disabled. The CSR Policy of the Company can be accessed on the website of the Company under the link https://www.cpcl. co.in/policies.

As the average of Net Profits for the preceding three years was negative, there was no mandate to spend amount towards CSR for the year 2021-22. Despite this, to sustain the ongoing CSR projects, CPCL had spent a sum of H 806.23 lakhs, of which H 12.54 lakhs was spent on health care CSR activities in Muttam near the Cauvery Basin Refinery.

A detailed report on CSR activities as per the provisions of Companies Act, 2013 along with CSR highlights during the year is attached (Annexure-III).

Corporate Environment Responsibility (CER):

During the year, the following activities were carried out under CER:

â¢ Running of 2 Community Health Care centres at Manali and Thirunalai in Chennai providing free primary health care for poor people.

â¢ Supported the Central and state governments in augmenting the supply of medical grade oxygen to hospitals and other institutions giving Covid care to patients by procurement of oxygen concentrators and oxygen cylinders.

â¢ Supported the District Administration of Nagapattinam with one unit of mobile X-ray unit with Computed Radiography Machines, UPS and additional cassettes for Covid designated Government Hospital in Nagapattinam District.

â¢ Supported the District Administration of Nagapattinam in Environment Management in the form of Avenue Plantation, plantation in community areas and solid waste management in Nagapattinam district.

VIGILANCE

Vigilance Department of your Company ensures maintenance of the highest level of integrity throughout the Organisation and continues to vigorously pursue and lay emphasis on preventive vigilance measures. Vigilance department is functioning not just as an investigating agency for punitive action but takes proactive and participative measures, to propagate the concept of ''Vigilance for Corporate Growth'' with a special emphasis on establishing transparent systems and procedures.

During the year, various system improvement measures, such as ''developing a computerized system for issue of tools to contractors from Maintenance Tool Room, to enable easy tracking and return of tools'' have been incorporated. In line with CVC''s guidelines, notice inviting tenders, tender documents and details of purchase orders and contracts awarded, including those awarded on nomination basis are

hosted on the Company''s website. As per the guidelines of Central Vigilance Commission a separate audit on ''Integrity of Automated Systems'' in the organisation has been done to identify vulnerability for cyber crimes/frauds and other malpractices and recommendations to be taken to overcome the same. The audit recommendations are being taken up for implementation.

Your Company is committed to redress the vigilance complaints in time and a provision is made available in CPCL''s website to lodge the complaints.

Your Company has implemented the Integrity Pact (IP) as per the guidelines of the Central Vigilance Commission. AH tenders with an estimated value of H 75 Lakhs and above are covered by Integrity Pact. Periodical meetings with Independent External Monitors (IEMs) are also being held by the Management once in every quarter.

To increase vigilance awareness, training programmes on ''Preventive Vigilance and PIDPI Complaint Handling System'' for newly joined Engineers and for the employees who have completed 15 years of service were organised.

Vigilance Awareness Week (VAW) was observed from 26^th October, 2021 to 1^st November, 2021 on the theme ''Independent India @ 75 : Self Reliance With Integrity''.

There were no pending disciplinary proceedings or prosecution cases as on 31^st March, 2022.

PUBLIC GRIEVANCES

Your Company always ensures timely redressal of the public grievances on time. Contact details of Public Grievance Officer are displayed on the website of the Company under the link https://www.cpcl.co.in/connect/citizen-charter/public-grievance. During the year 2021-22, 10 public grievances were received and disposed of in time.

CORPORATE GOVERNANCE

A separate section on Corporate Governance forms part of this Annual Report, in line with the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015 and DPE Guidelines on Corporate Governance.

The certificate received from the Auditors of the Company regarding compliance of conditions of corporate governance, as required under SEBI (LODR) Regulations, 2015 as well as compliance with the guidelines on corporate governance issued by the Department of Public Enterprises, Government of India, is annexed and forms part of this Report (Annexure-IV).

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

As required under SEBI (LODR) Regulations, 2015, Management''s Discussion and Analysis Report is annexed and forms part of the Annual Report - (Annexure-V).

BUSINESS RESPONSIBILITY REPORT

In accordance with SEBI (LODR) Regulations, 2015, the Business Responsibility Report covering initiatives taken with regard to environmental, social and governance perspective prepared, forms part of the Annual Report.-Annexure-VI.

AUDIT COMMITTEE

The composition of the Committee as on 31^st March, 2022 is as under:

â¢ Mr. Myneni Narayana Rao- Independent Director-Chairman

â¢ Mr. Amitabh Mathur-Independent Director- Member

â¢ Mr. Deepak Srivastava - Government Nominee Director-Member

Director (Finance) is the permanent invitee.

The recommendations of the Audit Committee during the year were accepted by the Board.

CODE OF CONDUCT

The Board of Directors of your Company has formulated a code of conduct for the Directors and Senior Management Personnel, which was circulated to all concerned and hosted on the Company''s website. The code can be accessed at http://www.cpcl.co.in/code of conduct. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct and the same was informed to the Board at the meeting held on 27.04.2022.

RISK MANAGEMENT

Your Company has a well-documented Risk Assessment and Management Policy and constituted a Risk Management Committee.

The composition of Risk Management Committee as on

31.03.2022 are as under:

â¢ Mr.Arvind Kumar, Managing Director - Chairman of the Committee

â¢ Mr.Rajeev Ailawadi, Director (Finance) - Member

â¢ Mr.S.Krishnan, Director (Operations) - Member

â¢ Mr.H.Shankar, Director (Technical) - Member

â¢ Mr.Myneni Narayana Rao, Independent Director - Member

â¢ Ms.Sukla Mistry , Director (Refineries), IOCL - Member

The Action Taken Report on the Risk Management Policy for the Financial Year 2021-22 containing the mitigation measures on various High, Medium and Low risks were reviewed by the Risk Management Committee, Audit Committee and the Board at the meeting held on 27.04.2022.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate systems of internal controls and documented procedures covering all financial and operating functions commensurate with the size of the Company and the nature of its business to provide reasonable assurance with regard to maintaining proper accounting controls, monitoring economy and efficiency of operations, protecting assets from unauthorized use or losses and ensuring reliability of financial and operational information.

The Statutory Auditors, in their report dated 27.04.2022, opined that the Company has in all material respects adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2022 based on internal control over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

REMUNERATION TO AUDITORS

M/s. Padmanabhan, Ramani and Ramanujam, Chartered Accountants, were appointed as Statutory Auditors of the Company for the financial year 2021-22 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of H 0.21 crore towards statutory audit fees in addition to out-of-pocket expenses, if any, and applicable GST.

There are no qualifications in the Statutory Auditors report dated 27.04.2022 on the annual accounts for the financial year 2021-22.

COST AUDITORS

M/s. Vivekanandan Unni and Associates, Cost Accountants, Chennai were appointed as the Cost Auditor of the Company for the Financial Year 2021-22 at the remuneration of

H 2,75,000/- plus applicable taxes and out-of-pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company subject to ratification by the shareholders in the Annual General Meeting.

The cost audit for the year 2020-21 was carried out and the cost audit report was filed with the Ministry of Corporate Affairs in the prescribed form within the stipulated time period. The cost audit report for the year 2021-22 would also be filed within the stipulated time.

SECRETARIAL AUDIT

Your Company has appointed M/s.A.K.Jain and Associates as the Secretarial Auditors, for the year 2021-22. This is the third year of appointment.

The Secretarial Audit Report for the year 2021-22 confirms that the Company has complied with all the applicable provisions of the Companies Act, 2013 and the rules made thereunder and other applicable acts, rules, guidelines, applicable secretarial standards, etc. and the findings are as under:

i) Non-appointment of minimum Independent Directors-Reg 17.

ii) The Nomination and Remuneration Committee has been reconstituted on 27.04.2022 with 2/3^rd Independent Directors in line with (SEBI LODR) which was effective from 01.01.2022- Reg.19.

iii) During the year under review the Risk Management Committee has met once on 28.04.2021 and the second meeting was held on 27.04.2022. The gap between two meetings is more than 180 days-Reg.21.

It is clarified as under:

i) The appointment of additional Independent Directors is under the consideration of the Government of India.

ii) The Company has complied with the Regulation 19 on

27.04.2022 within 30 days from the end of the quarter ended 31.03.2022. as per the Standard Operating Procedure of Stock Exchange.

iii) In view of the need to review the Action Taken Report on the risks related to financials after the closure of Accounts for the FY 2021-22, the second meeting was held on

27.04.2022 , with the gap of more than 180 days.

The report, duly certified by a Practicing Company Secretary, is attached as Annexure-VII to this Report.

In view thereof, the terms of reference of Nomination and Remuneration Committee do not include the terms provided under the Companies Act, 2013. The performance evaluation of all directors, excluding directors representing Naftiran Intertrade Company, one of the promoters of the Company, is carried out by the Administrative Ministry (MoPNG), Government of India, as per applicable guidelines. The above is in line with the exemption provided to Government Companies by the Ministry of Corporate Affairs.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

One separate meeting of Independent Directors (4^th) was held on 26.11.2021

REPORTING OF FRAUDS BY AUDITORS

The Auditors in their report for the year have not reported any instance of fraud committed by the officers/employees of the Company.

The share capital of IAL is H 23.67 crore. CPCL and Chevron hold 50% each in the share capital of IAL.

The Revenue from Operations of IAL is H 866.74 crore during the year 2021-22, as against H 699.42 crore in the previous year. The Profit after Tax for the year 2021-22 was H 31.70 crore as against H 51.15 crore in the previous year. The Board of IAL has recommended a dividend of 67% for the financial year 2021-22.

National Aromatics and Petrochemicals Corporation Limited (AROCHEM):

Your Company has another Joint Venture with M/s. Southern Petrochemicals Industries Corporation Ltd. (SPIC) in the year 1989 for manufacture of PTA, Paraxylene, Orthoxylene and Benzene. The share capital of AROCHEM is H 0.05 crore. CPCL and SPIC hold 50% each in the share capital of AROCHEM. Since the JV is not operational, the investments have been fully provided for diminution in value.

PUBLIC PROCUREMENT POLICY FOR MSMEs

The details of the actual values of total procurements of materials and services (total value of products excluding Crude, Gas, Power and License Fee) by your company during the financial year 2021-22 as against the target fixed by the Government of India are given below:

Sl. No.	Details	Value of procurements J Crores (excluding Crude, Gas, Power and License Fees)	% age target achieved	Target set by the Government
1	Total value of procurements	655.06
2	Procurements from MSEs (General, Reserved SC/ ST & Women)	339.53	51.83%	25%
3	Procurements from Reserved SC/ST MSEs	58.06	8.86%	4%
4	Procurements from Women MSEs	8.99	1.37%	3%

MSEs procurements target for FY:2022-23

Your Company has earmarked 25% of total procurements to be made from the MSEs for the FY:2022-23 in accordance to the PPP for MSEs Order 2012 of the Government of India. Out of this 25% target, 4% is earmarked for procurements from Reserved SC/ST MSEs and 3% is earmarked for procurements from Women owned MSEs.

Procurement from GeM Platform

Procurement from GeM portal accounted for 38.87% of the total procurement during the year 2021-22 as against the GoI target of 25%.

During the year, 4,931 tonnes of scrap were sold through E-auction fetching H 20.27 Crore.

During the year, three meetings were held with SC / ST and general vendors for increasing participation in the procurement process. Your Company also participated in the other MSE Vendor development meets conducted by other organisations.

JOINT VENTURES

Indian Additives Limited (IAL):

Your Company has a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) in the year 1989 for manufacture of lube additives components and packages.

RELATED PARTY TRANSACTIONS (RPTs)

A policy on material RPTs was framed in line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations 2015, which can be accessed on the Company website at the link https://www.cpcl.co.in/PoHcies. Your Company has undertaken transactions with related parties during the year, which are in the ordinary course of business. As per the RPT Policy, approval of Audit Committee has been obtained for all RPTs. During the year, there were no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Notes to the Annual Accounts.

The details of contracts or arrangements with related parties referred to under Section 188 (1) of the Companies Act, 2013 in the prescribed Form AOC-2 are attached as Annexure -VIII of the report.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

PARTICULARS OF EMPLOYEES

The provisions of Section 134(3)(e) of the Act are not applicable to a Government Company. Consequently, details on Company''s policy on Directors'' appointment and other matters as required under Section 178 (3) of the Act, are not provided.

Similarly, Section 197 of the Act is also exempt for a Government Company. Consequently, there is no requirement of disclosure of the ratio of the remuneration of each Director to the median employee''s remuneration and other such details, including the statement showing the names and other particulars of every employee of the Company, who if employed throughout / part of the financial year, was in receipt of remuneration in excess of the limits set out in the rules are not provided in terms of Section 197 (12) of the Act read with Rule 5 (1) / (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The following changes have occurred in the Board of the Company:

1) The tenure of Mr. D. Duraiganesan, Independent Director, was completed on 13.08.2021

2) Mr.Arvind Kumar has been appointed as the Managing Director effective 27.08.2021

3) Ms.Sukla Mistry has been appointed as a Director representing, IOCL on the Board of CPCL effective 16.11.2021, in place of Mr. Manoj Sharma .

4) Mr.Ravi Kumar Rungta and Dr. C.K. Shivanna have been appointed as Independent Directors by the Ministry of Petroleum and Natural Gas, Government of India , on the the Board of CPCL effective 16.11.2021

5) Mr. Deepak Srivastava, Deputy Secretary, Ministry of Petroleum and Natural Gas, Government of India has been appointed as Government Director on the Board of CPCL effective 10.08.2021 in place of Mr. Sukh Ram Meena.

Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year.

INDEPENDENT DIRECTORS

The Company received the Certificate of Independence from the Independent Directors confirming that they meet the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013, and SEBI (LODR). The Independent Directors have confirmed that they have registered with the database maintained by the Institute of Corporate Affairs (IICA) under the Ministry of Corporate Affairs. The Company being a Government Company, the power to appoint Directors (including Independent Directors) vests with the Government of India. The Directors are appointed by following a process as per laid down guidelines. In the opinion of the Board, the Independent Directors have the requisite expertise and experience. A separate meeting of Independent Directors was held during the year as per provisions.

BOARD MEETINGS

During the year, six meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders were passed by the regulators or courts or tribunals that impact the going concern status and the Company''s operations in future.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The provisions of Section 134(3)(p) of the Companies Act, 2013, require a listed entity to include a statement indicating the manner of formal evaluation of performance of the Board, its Committees and of individual Directors. However, the said provisions are exempt for Government Companies as the performance evaluation of the Directors is carried out by the Administrative Ministry, such as the Ministry of Petroleum and Natural Gas (MoPNG), as per [aid-down evaluation methodology.

DETAILS OF LOANS / INVESTMENTS / GUARANTEES

Your Company has not provided Loans/Guarantees/Security to any person, body corporate or joint venture during the year.

ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the Annual Return is being hosted on the Company''s website and can be accessed from the [ink: https://www.cpcl.co.in/ investors/financials/statutorv-disclosures/

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) the

Companies Act, 2013 with respect to Directors'' Responsibility

Statement, it is hereby confirmed that

i) In the preparation of the annual accounts for the financial year ended March 31, 2022, the app[icab[e accounting standards have been followed and that there are no material departures from the same;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

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

iv) The Directors have prepared the annua[ accounts for the financial year ended 31^st March, 2022, on a going concern basis;

v) The Directors have [aid down internal financial controls to be fo[[owed by the Company and that such interna[ financia[ contro[s are adequate and operating effective[y.

vi) The Directors have devised proper systems to ensure comp[iance with the provisions of a[[ app[icab[e [aws and such systems are adequate and operating effective[y.

RIGHT TO INFORMATION

A total of 95 requests, 2 first appeals were received and responded during the year. There were no second appeals during the year.

OFFICIAL LANGUAGE POLICY

The directives issued by the Official Language Department, Ministry of Home Affairs, Government of India from time to time were complied with in your Company being a CPSU.

The Official Language Implementation Committee meeting of your Company was conducted online every quarter under the Chairmanship of the Managing Director to review the implementation of Official Language Policy in the Company.

Hindi classes were conducted on line for the benefit of employees. Hindi exams were conducted by Hindi Teaching Scheme for the employees in Manali Refinery in November, 2021.

Hindi workshops on the Official Language Policy of the Government of India and its implementation in the Company and Hindi Grammar were conducted for the benefit of employees.

Your Company celebrated Hindi Day on 14.09.2021 online. As a part of the celebration, Hindi essay competition was held for employees of Region A&B and Region C. Hindi calligraphy competition was conducted for employees of ''C'' Region. Functional Directors, MD, CVO, CGMs, DGMs, officers and employees participated in the celebration. Prizes were distributed to the winners of the competitions.

Special prize was awarded to your Company during the 9^thTOLIC Meeting on 15.12.2021 for publishing House Magazine in Hindi as a part of Implementation of official language in the Company during the year 2020-21. The award was received by the Chief General Manager (HR) i/c from the Chairman, Port Trust & Kamarajar Port Limited in the presence of Executive Director (South), FCI and Chairman TOLIC (PSU), Chennai. Your Company received the third prize in Hindi Singing Competition-Inter PSU, Chennai, held as a part of TOLIC competitions.

Your Directors are grateful to all the stakeholders for their support and confidence reposed by them on the Company.

Your Directors also place on record their appreciation of the valuable contributions made by Mr. Duraiganesan, Mr. Sukh Ram Meena and Mr. Manoj Sharma during their tenure on the Board.

For and on behalf of the Board (S.M.VAIDYA)

Place: New Delhi Chairman

Date: 19.07.2022 DIN - 06995642

ACKNOWLEDGEMENT

Your Board of Directors acknowledge with sincere appreciation the unstinted support and co-operation of all the employees in ensuring continued refinery operations during the Covid-19 pandemic.

Your Board of Directors would like to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, other Ministries, the Government of Tamil Nadu, Indian Oil Corporation Ltd., Naftiran Intertrade Company Ltd., Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, and other regulatory and statutory authorities.

Mar 31, 2018

To the Valued Shareholders of Chennai Petroleum,

On behalf of the Board of Directors of your Company, it is my proud privilege to report another year of landmark performance of your Company and to present the 52^nd Annual Report on the working of your Company, together with the Audited Statement of Accounts, Auditorsâ Report and the Report of the Comptroller & Auditor General of India on the Accounts for the year ended March 31, 2018.

PERFORMANCE REVIEW

FINANCIALS:

Your Company has prepared the financial statements in line with the provisions of the Companies Act 2013 and the Ind AS Accounting Standards issued by the Institute of Chartered Accountants of India.

Financials (Standalone and Consolidated)

The highlights of the Standalone and Consolidated Financial Results are as under:

(Rs. in crore)

Particulars	Standalone		Consolidated
Particulars	2017-18	2016-17	2017-18	2016-17
Gross Turnover	44135	40586	44136	40586
Profit Before Finance Cost, Depreciation and Tax	2124	1978	2118	1972
Finance Cost	321	273	321	273
Depreciation, Amortisation and Impairment	345	340	345	340
Profit Before Tax (before Share of Profit of Joint Ventures)	1458	1365	1452	1359
Share of Profit of Joint Ventures	-	-	20	27
Profit Before tax	1458	1365	1472	1386
Tax Expense	545	335	545	335
Profit After tax	913	1030	927	1051
Less: Appropriations
Dividend on Equity Shares	313	60	313	60
Corporate Dividend Tax	64	12	65	13
Capital Redemption Reserve	200	200	200	200
Debenture Redemption Reserve	50	50	50	50
Retained Earnings	286	708	299	728

The highlights of Standalone Financial Performance during the year 2017-18:

The year 2017-18 was another remarkable year for the Company and the performance highlights are as under:

- The Companyâs turnover registered an increase of 9% at Rs. 44,135 crore, as compared to Rs. 40,586 crore in the previous year, on account of increase in both the quantity of products sold and price variation.

- The Profit Before Tax clocked at Rs. 1,458 crore in the current year was the second highest since inception, registering an increase of 7% as compared to Rs. 1,365 crore in the previous year.

- However, the Profit After Tax was lower at Rs. 913 crore in the current year, as compared to Rs. 1,030 crore in the previous year, mainly on account of recognition of Deferred Tax Assets in respect of balance carry-forward losses in full in FY 2016-17.

- The Gross Refining Margin in the current year marginally rose to $ 6.42/bbl as compared to $ 6.05/bbl in the previous year.

Dividend

The Board recommended a Preference Dividend of 6.65% payable to Indian Oil Corporation Ltd., the holding Company, as per the terms and conditions of the offer document, on the paid-up Preference Share Capital of the Company for the financial year 2017-18, which amounts to Rs. 0.665 per preference share, and the same has been accounted for as part of Finance Cost in line with Ind AS requirements.

Based on the financial performance, the Board is pleased to recommend for approval of the members a dividend of 185% for 2017-18 (Rs.18.50 per equity share). The dividend on equity shares would entail a cash outgo of Rs.331.57 crore, including dividend distribution tax.

Partial Redemption of Preference Shares

The Board of Directors of the Company at the meeting held on 5^th April, 2018, has accorded approval for the partial redemption of non-convertible cumulative redeemable preference shares to the extent of Rs.500 Crores, out of the total outstanding amount of Rs.1,000 Crores. Accordingly, in terms of the issue, offer for partial redemption of nonconvertible cumulative redeemable preference shares to the extent of Rs.500 Crores, was made to Indian Oil Corporation Limited. Based on the acceptance of the offer by IndianOil, the same has been remitted to Indian Oil Corporation Limited subsequently on 6^th June, 2018.

Unsubscribed Share Capital

The Board of Directors of the Company at its meeting held on 5^th April, 2018, accorded approval, subject to the approval of the shareholders of the Company in the General Meeting, for the following:

- For cancellation of unsubscribed equity share capital of Rs.20,86,89,000, consisting of 2,08,68,900 equity shares of Rs.10/- each, comprising partial subscription to the Rights Issue made by the Company in 1984 by the Government of India and non-subscription by Amoco India Inc. to the Rights Issue made by the company in 1984;

- For cancellation of 2,19,700 forfeited equity shares of Rs.10/- each totalling Rs.21,97,000/- (1,87,900 equity shares forfeited on 26.9.2003 and 31,800 equity shares forfeited on 26.10.2006)

Book Value

The book value per share of your Company improved considerably from Rs.222.54 as on 31^st March, 2017 to Rs.258.98 as on 31^st March, 2018, registering an increasing of 16%.

(in Rs.)

Stock Exchange	High	Low
NSE	480.50	310.50
BSE	477.10	310.80

Reserves and Surplus

The Reserves and Surplus as on 31^st March, 2018 increased to Rs. 3,707.49 crore as compared to Rs.3,164.80 crore as on 31^st March, 2017.

Value Addition

The value addition during the year 2017-18 improved to Rs. 2,953 crore as compared to Rs. 2,805 crore in the previous year.

Digital India Initiative

In line with the directives of the Government of India, your Company is taking initiatives to identify opportunities for implementation of new digital technologies to improve the efficiency and safety of its operations. These include facilitating and conducting several camps for opening of bank accounts for contract workmen through State Bank of India and Punjab National Bank, thereby achieving 100% bank account opening for around 6,000 contract labourers of CPCL and convening meetings to create awareness and encourage payments through digital means among all stakeholders

Your Company registered 77,407 digital transactions during the financial year 2017-18, surpassing the target set by Ministry of Petroleum and Natural Gas as part of the Digital India campaign.

Contribution to Exchequer

Your Company has been making significant contributions to both State and Central Exchequers in the form of duties and taxes. The details are as under:

(Rs. in crore)

Particulars	2017-18	2016-17
Central Exchequer	12,571	13,270
State Exchequer	714	436
Total	13,285	13,706

Public Deposit Scheme

Your Company has not accepted any public deposits during the year 2017-18 and no public deposit was outstanding as on 31^st March, 2018.

Transition to GST

Your Company has ensured smooth transition to the Goods and Services Tax (GST) regime with effect from 1^st July, 2017 and achieved 100% registration of its vendors and contractors. A GST Outreach Programme was conducted on 5^th July, 2017 at Chennai for the benefit of contractors, vendors and various other service-providers.

The total contribution to the exchequer towards GST for the period 1^st July, 2017 to 31^st March, 2018 was Rs. 1,064.16 crore.

However, since Motor Sprit (petrol), High Speed Diesel and Aviation Turbine Fuel continued to be outside the purview of GST, under-recoveries on account of restrictions in availing of input tax credit proportionately are being borne by the Company.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred the required amount to the Investor Education & Protection Fund(IEPF) as per Section-124 of the Companies Act, 2013 within the stipulated time.

The Ministry of Corporate Affairs (MCA), Government of India, had notified the Investor Education & Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2015 in September 2016 and further amended them by a notification dated 26^th Oct., 2017 providing for the transfer of the Equity Shares to IEPF in respect of those dividend amounts that remained unclaimed for seven consecutive years or more, on or before 30^th November, 2017. In line with the above, the Company has transferred 3,03,281 equity shares of Rs.10/- each in respect of shareholders whose dividend has remained unclaimed for seven consecutive years from the financial year 2009-2010, to the Investor Education Protection Fund on 28^th November, 2017.

PHYSICAL:

CRUDE OIL THRUPUT (in TMT)	2017-18	2016- 17
Imported	8,660	8,092
Indigenous	2,129	2164
Total Thruput	10,789	10,256

PRODUCTION (in TMT)
Light Ends	2,261	2,186
Middle Distillates	5,660	5,290
Lube Base Stock	169	160
Wax	24	21
Heavy Ends	1,634	1,748
Intermediates differential	32	(41)
Other Inputs	(28)	(47)
Fuel & Loss	1037	938
Total Output	10,789	10,256
Distillate Yield	73.2	72.6

(TMT = Thousand Metric Tonnes)

Operational Performance

Your Company achieved the highest ever crude oil throughput of 10.789 million metric tonnes per annum (MMTPA) during the year 2017-18 as against the previous best of 10.779 MMTPA during 2014-15. The distillates yield was the highest ever at 73.2% as against the previous best of 72.6% in 2016-17. The Energy Intensity Index (EII) recorded the lowest at 100.7 against the previous lowest of 101.3 in the year 2016-17. Your Company has achieved the MoU targets for all these physical parameters.

Your Company clocked the highest ever Once-thru Hydro Cracker Unit (OHCU) throughput of 2,164 TMT as against the previous best of 2,007 TMT in 2013-14. The Fluidised Catalytic Cracking Unit (FCCU) throughput achieved was also the highest at 1,084 TMT as against the previous best of 1,075 TMT in 2014-15.

Production of Motor Spirit was the highest at 1,107 TMT in 2017-18 as against the previous best of 1,105 TMT in 2016-17. HSD production (including raw diesel) also recorded the highest at 4,599 TMT as against the previous best of4,474 TMT in 2014-15.

During the year, Manali Refinery achieved a crude oil throughput of 10,289 TMT, which surpassed the previous yearâs figure of 9,725 TMT. The distillates yield during the year was also higher at 72.3 wt.% as compared to 71.6 wt.% in the previous year. Fuel & Loss was higher at 9.7 wt.% as compared to 9.3 wt.% in the previous year. During the year, Cauvery Basin Refinery achieved a crude oil throughput of 500 TMT as compared to the previous yearâs figure of 531 TMT. The distillate yield during the year was at 79.1 wt% as compared to 78.2 wt% in the previous year. Natural gas processed in 2017-18 was 73.1 TMT, as compared to the previous yearâs figure of 72 TMT. Fuel & Loss was at 4.6 wt.% as compared to 4.2 wt.% in the previous year.

Your Company processed two new low-sulphur crude oil grades (Okono from Nigeria and Madanam indigenous grade), which were added to the regular basket.

MoU PERFORMANCE

Your Company had signed an MoU with Indian Oil Corporation Limited, the holding Company, setting the performance parameters and targets for the year 2017-18, as per the guidelines issued by the Department of Public Enterprises (DPE). Your Company has scored âExcellentâ rating from DPE in respect of the MOU for the year 2016-17.

MARKETING

M/s. Indian Oil Corporation Limited, the holding company, markets a majority of the fuel products produced by your Company.

The details of sales of products by your Company through direct marketing during 2017-18 as compared to the previous year are tabled below:

PRODUCT	SALE QTY (IN MT)
PRODUCT	2017-18	2016-17
A: Downstream Products
Naphtha	194178	209411
LABFS	64445	58112
Butene (MEKFS)	19940	16167
Propylene	30130	26056
PBFS ( LPBFS)	11969	9382
B: Other Products
Paraffin Wax	21654	23223
Hexane	3171	3554
Micro Crystalline Wax(MCW)	214	0
Sulphur	39423	36765
Petcoke	60373	0
TOTAL	445497	382670

During the year, direct sale of products recorded an increase of 16.5%, from 382 TMT to 445 TMT

Yet another feature during the year was the production and marketing of Micro Crystalline Wax (MCW), an import substitute product. Sale of Petcoke, another new product, commenced in December 2017. Direct marketing of Fuel Oil (FO) to Indian Additives Limited through a dedicated line was also commenced during the year.

Your Company was conferred with two prestigious awards by the Federation of Indian Export Organisations (FIEO) for outstanding performance in exports. They were âTop Exporter - Southern Region Export Excellence Awardsâ in the Public Sector category for the years 2015-16 (Silver) and 2016-17 (Gold).

RESEARCH & DEVELOPMENT (R&D)

Your Company continues to lay greater emphasis on building in-house R&D capabilities and provide technical inputs and support to refinery operations for optimum utilisation of facilities and feedstock.

The major R&D projects undertaken during the year were:

- Pilot plant studies to develop catalyst for producing missile fuel and JP-10 in association with Indian Institute of Technology, Madras.

- Bio-lab for growth of micro algae culture.

- Fifty litres of low-aromatic and ultra-low Sulphur Jet Fuel (JP-7) for air breathing engine applications of DRDO.

- Lab-scale studies to convert Reduced Crude Oil (RCO) from Cauvery Basin Refinery (CBR) to low-sulfur, low-viscosity premium grade Fuel Oil.

- De-waxing studies using 100% Un-Converted Oil (UCO) and UCO Light Neutral (LN) distillate blends to produce premium grade Lube Oil Base Stock (LOBS).

PROJECTS

Your Company pursues projects that enhance product quality, meet operational necessities and help upgrade environmental standards. Your Company achieved Plan and Non-plan expenditure of Rs. 931.92 crore and Rs. 88.40 crore respectively, totaling Rs.1,020.32 crore, during the year.

Resid Upgradation Project

Your Company has successfully implemented the Resid Upgradation Project comprising mainly of new secondary processing units like Delayed Coker Unit (DCU), Sulphur Recovery Unit (SRU) and Revamp of Once through Hydrocracker Unit (OHCU), at a cost of Rs. 3,110 crore. This project was implemented to increase distillate yield and maximise the processing of high-sulphur, heavy crudes. The DCU has been commissioned in November 2017 and dispatch of Petcoke commenced. This will add significantly to the profitability of the refinery.

The unit was dedicated to the nation by the Honâble Minister for Petroleum & Natural Gas, Skill Development & Entrepreneurship in February 2018. The new Cooling Tower, DM plant and SRU were also commissioned in June 2017, December 2017 and March 2018 respectively.

Diesel Hydro-Desulphurisation (DHDS) unit Revamp Project:

Your Company has successfully revamped the existing DHDS unit at Manali Refinery from 1.80 MMTPA to 2.34 MMTPA capacity at a cost of Rs. 310 crore; this has enabled production of diesel meeting Bharat Stage IV (BS-IV) quality norms. The revamped unit was commissioned in February 2018.

Ongoing Projects

The Company has undertaken the following projects for enhancing reliability and upgrading quality.

New Crude Oil Pipeline

Your Company is implementing a new 42-inch diameter crude oil pipeline to replace the existing 30-inch pipeline from Chennai Port to Manali Refinery. The project, estimated to cost Rs. 258 crore with state-of-the art safety features, is slated for commissioning during the current year.

BS-VI Auto Fuels Quality Project

As a part of BS-VI auto fuels quality project, your Company is revamping the existing diesel hydro-treating (DHDT) unit to increase its capacity from 1.8 to 2.4 MMTPA along with a new Sulphur Recovery Unit. A new 0.6 MMTPA capacity FCC gasoline desulphurisation unit with associated facilities is also being installed to comply with the directives of the Government of India for supply of diesel and petrol meeting BS-VI quality norms with effect from 1^st April 2020. The estimated cost of the project is Rs. 1,858 crore.

All the major equipment have been ordered and construction is in progress. The project is expected to be mechanically completed by Sept. 2019.

Regassified LNG (R-LNG) Project

Your Company proposes to implement an R-LNG Project at an estimated cost of Rs. 421 crore. This project will use R-LNG as feed in the Hydrogen Generation Units and as fuel in Hydrogen Reformer, Gas Turbines, Utility Boilers & Process Heaters. A Project Management Consultant has been engaged. The project is expected to be mechanically completed in phases from November 2018 onwards. Significant benefits are envisaged on commissioning of this project.

Cauvery Basin Refinery

Future Projects

Your Company has obtained in-principle approval to set up a 9.0 MMTPA refinery at CBR, Nagapattinam, at an estimated cost of Rs. 27,460.74 crore (Â±30% accuracy), for meeting the future energy needs of Tamil Nadu. A detailed feasibility study is being carried out by M/s. Engineers India Limited.

INFORMATION TECHNOLOGY

Your Company has taken several steps to assimilate advances in information technology to upgrade existing systems. Major initiatives undertaken during the year include the following:

- Developed and implemented the new weigh-bridge system software for migration from the existing Jay Instruments and Systems Pvt Ltd (JISL) system to Rice Lake system, which included additional features for sale of new product Petcoke

- Established network connectivity to mounded bullet control room, new Sulfur Recovery Unit (SRU) control room, SRU operator cabin and SRU sub-station. Also established fibre connectivity to new weigh-bridges at DCU plant.

- IT security audit carried out by Standardisation Testing and Quality Certification (STQC)

- Based on the directives of the Government of India, Information Security Policy was reviewed and a new IT policy was framed in line with the changes happening in the IT field.

HEALTH, SAFETY AND ENVIRONMENT

Health

Your Company lays utmost emphasis on prevention of work-related health hazards and provision of adequate medical services to the employees. Towards achieving this end, your Company constantly monitors the hazards that could affect the health of the workers and ensures that the same are within acceptable levels.

As part of health surveillance, 95% of the employees underwent annual health check-up. Contract employees scheduled to work at heights and in confined spaces were ensured of their physical fitness to do their respective jobs.

Timely action was taken on all medical emergencies, both illnesses and injuries, and the cases referred to hospitals for appropriate measures. Health awareness and screening programs were conducted at Occupational Health Services (OHS) for employees and contract workers.

Safety

Your Company remained committed to the highest standards of safety and evinced utmost concern for the safety of its employees and refinery assets while carrying out its operations. Ensuring safe working conditions is one of the avowed objectives of your Company and continuous efforts are on to further bolster its safety record.

Major initiatives on safety management undertaken during the year include the following:

- Fire-fighting capabilities were augmented by procuring one foam-nurser of 16,000 litres capacity at a cost of Rs. 130 lakhs.

- Audits were done to ensure 100% usage of spark arrestors approved by the Petroleum and Explosives Safety Organisation (PESO) for all vehicles, including bitumen trucks, contractorsâ vehicles and transport cabs entering the refinery.

- Internal safety audits were carried out by in-house multidisciplinary teams and their recommendations were implemented in a time-bound manner; Pre-commissioning safety audits were carried out by OISD teams for the Resid DCU, SRU plants and revamped DHDS units; External safety audit was carried out by a five-member OISD team during the first week of Feb.â18 and an action plan was drawn to implement its recommendations.

- On-site emergency mock-drills were conducted at Manali Refinery in October 2017 and February 2018. Monthly mock-drills were conducted by creating different emergency scenarios.

Environment

Your Company continues to demonstrate its concern for environment protection by devoting considerable resources to meet the applicable environmental norms and regulations, by undertaking several initiatives.

Key initiatives taken for environment protection include the following:

- Connection of emission parameters of all the heaters, boilers and gas turbines to CPCB and TNPCB since October 2017.

- Connection of effluent parameters and web camera of Zero Liquid Discharge (ZLD) to Central Pollution Control Board (CPCB) and Tamilnadu Pollution Control Board (TNPCB) since July 2017.

- Continuous real-time data transfer to both CPCB and TNPCB.

- Leak Detection and Repair (LDAR) programme carried out on a regular basis as per the environment rules.

- In Cauvery Basin Refinery, online stack monitoring system, ambient air quality monitoring system and online Effluent Treatment Plant (ETP) monitoring system are in operation. Online data connectivity to the State Pollution Control Board / Central Pollution Control Board from these three systems is being complied with. Greenhouse gas emission inventorisation is being carried out every year.

ENERGY CONSERVATION

Your Company continues to give focussed attention to energy conservation and makes persistent efforts to monitor and optimise energy usage.

Significant energy conservation measures implemented by your Company during the year resulted in an estimated savings of about 11,000 Standard Refinery Fuel Ton (SRFT)/annum, representing about 0.11% savings on Fuel & Loss. The details of energy conservation measures are given in Annexure I.

In recognition of your Companyâs efforts to minimise energy consumption, your Company has been adjudged the winner for âBoilers and Furnaces Efficiencyâ under Group-II Category (Fired Duty 500-1000 MM Kcal per hour) by the Center for High Technology, Ministry of Petroleum and Natural Gas. The Award was given at the 21^st Refinery Technology Meet (RTM) held at Visakhapatnam on April 20^th, 2017.

RELIABILITY IMPROVEMENT INITIATIVES

In order to ensure stable and safe operations, your Company has undertaken major initiatives to improve reliability of equipment, processes and product quality. Significant among them are the following:

- Naphtha and High Sulfur Diesel (HSD) fuel control valves reassigned to dedicated modules from the earlier single module system for facilitating uninterrupted fuel supply to Gas Turbine (GT) and to prevent shutdown.

- Reduction of regeneration downtime by replacing 40 Programmable Logic Controller (PLC)-based sequence valves, in new Demineralisation (DM) plant,

- Installation of dedicated spare pump for vacuum bottom service in CDU 1.

- Upgradation of Refinery-3 Distributed Control System(DCS) operating system from Centum CS 3000 to Centum VP with Windows 7 platform for cyber security compliance.

- Implementation of auto sequence in Safety Integrity Level (SIL) 3 safety PLC for improving the reliability of Ref 1 & 2 Instrument air system.

HUMAN RESOURCES

Your Company believes that its human resource pool has a vital role to play in the emerging competitive scenario in the industry. Accordingly, many initiatives have been taken for the development and growth of the employees to face future challenges.

The total manpower of your Company as on 31^st March, 2018 was 1,709, comprising 832 supervisors and 877 non-supervisors (1,645 as on 31^st March, 2017, comprising 805 supervisors and 840 non-supervisors).

During the year, a Memorandum of Settlement under Section 12 (3) of the Industrial Disputes Act 1947 on work-related items/facilities (Long Term Settlement-II) was signed between management and the recognised union on 2^nd August, 2017. Active participation of Functional Directors in meetings with the Employeesâ Union, Officers Association and other welfare bodies on various occasions helped promote a cordial industrial relations climate.

Your Company gives utmost importance to training & development of its employees. During the year 2017-18, an overall performance of 2.56 average training man-days per employee were achieved, with training programmes on Talent Management and Career Progression for executives. Eligible employees were also nominated for various internal management development programmes, general programmes and programmes on Operations and Maintenance, besides to various external training programmes.

Your Company has been meticulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC and Persons with Disabilities. Out of the total manpower, there were 394 SC employees (previous year: 392) and 42 ST employees (previous year: 38) as on 31^st March, 2018, constituting 23.05% and 2.45% of the total manpower respectively.

The statistics relating to representation of SCs/STs/OBCs in the prescribed proforma as on 1^st Jan. 2018 is given in Annexure-II.

COMPLIANCE WITH SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

Your Company is committed to prevention of sexual harassment of women at the workplace and takes prompt action in the event of reporting of such incidents. In this regard, an Internal Complaints Committee has been constituted to deal with sexual harassment complaints and conduct enquiries, if any. Further, a hand-book on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 released by the Ministry of Women and Child Development, Government of India, has been uploaded on the intranet to sensitise all employees about the provisions of the Act. There were no complaints of sexual harassment during the year.

WOMEN EMPOWERMENT

Your Company gives special focus to the various facets of women development plans and programmes. As on 31^st March, 2018, 87 women employees are on the rolls of the Company, of whom 51 are in the supervisory cadre and 36 are in non-supervisory cadre, constituting 6.12% of the total supervisory employees and 4.10% of the total non-supervisory employees.

International Womenâs Day 2018 was celebrated by the women employees of CPCL on 8^th March, 2018 with the theme âFace Adversity, Walk Dauntlessâ. One of the women employees won the Women Achievers Award at the Indian Women Convention 2017.

CORPORATE SOCIAL RESPONSIBILITY (CSR) & SUSTAINABLE DEVELOPMENT (SD)

Your Companyâs CSR activities focus on improving the lives of the poor and needy. The thrust areas of Corporate Social Responsibility (CSR) activities, inter alia, include safe drinking water, healthcare & sanitation, education & employment enhancing vocational skills, empowering women & socially/economically backward groups, environment sustainability, etc. The programmes are undertaken predominantly in the vicinity of the Companyâs major installations/establishments to improve the quality of life of the communities, which include marginalised groups such as SCs, STs, OBCs and disabled.

During the year, your Company has spent an all-time high amount of Rs. 918.18 lakhs towards community development activities. Of this, an amount of Rs.123.22 lakhs has been spent on various CSR activities by Cauvery Basin Refinery. An amount of Rs. 446.79 lakhs out of the total budget, constituting 48.66%, has been spent on activities under Swachh Bharat Abhiyan, as against the requirement of 33% as per DPE guidelines.

The CSR Policy of the Company can be accessed at the website of the Company at the link http://www.cpcl.co.in/CorporateGovernance.

A detailed report on CSR activities as per the provisions of Companies Act 2013 along with CSR highlights during the year are attached as Annexure- III.

The Company also published a report on Corporate Sustainability for the year 2016-17 and the same is available at the link https://www.cpcl.co.in/corporategovernance

In recognition of its various CSR initiatives, your Company was conferred the Humanitarian Award sponsored by Thakkar Bapa Vidyalaya Samithi by Shri M. Venkaiah Naidu, Honâble Vice President of India.

VIGILANCE

The Vigilance Department of your Company has been focussing its attention on streamlining systems and procedures on a continuous basis and conducting periodical inspections.

Several training programmes were organised for the benefit of employees, highlighting the importance of public procurement, preventive vigilance, compliance with guidelines, systems and procedures, etc., aimed at capacity building and bridging the knowledge gap of the personnel with the help of case studies.

Vigilance Awareness Week-2017 was organised from 30 October, 2017 to 4 November, 2017 with the theme âMy Vision - Corruption-free India.â A compendium of CVC guidelines on tenders and contracts was compiled and released for the benefit of all stakeholders.

There are no pending vigilance cases as on 31^st May 2018.

PUBLIC GRIEVANCES

Your Company always ensures timely redressal of public grievances. Contact details of Public Grievance Officer are displayed on the website of the Company under the link https://www.cpcl.co.in/grievances.

During the year 2017-18, six public grievances were received and disposed of in time.

CORPORATE GOVERNANCE

In line with the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015 and DPE Guidelines on Corporate Governance, a separate section on Corporate Governance forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under SEBI (LODR) Regulations 2015 is annexed and forms part of the Annual Report (Annexure-V).

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report covering initiatives taken with regard to Environmental, Social and Governance perspective prepared in accordance with SEBI (LODR) Regulations 2015 forms part of the Annual Report- Annexure-VI.

AUDIT COMMITTEE

The composition of the Committee as on 31^st March, 2018 is as under:

- Mr. Mrutunjay Sahoo, Independent Director - Chairman.

- Dr. P.B Lohiya, Independent Director , Member

- Mrs. Perin Devi, Government Director, Member Director (Finance) is the permanent invitee.

The recommendations of the Audit Committee during the year were accepted by the Board.

CODE OF CONDUCT

The Board of Directors of your Company has formulated a code of conduct for the Directors and senior management personnel, which was circulated to all concerned and hosted on the companyâs website. The code can be accessed at http://www.cpcl.co.in/code of conduct. The Directors and senior management personnel have affirmed compliance with the code of conduct and the same was informed to the Board at the meeting held on 10^th May 2018.

RISK MANAGEMENT

Your Company has a documented Risk Assessment and Management Policy. The Committee constituted for this purpose identified the risks applicable to the Company, both internal and external, suggested risk mitigation measures and formulated the Risk Management Policy.

The Action Taken Report on the Risk Management Policy for the year 2017-18 was reviewed by the Audit Committee and the Board at the meeting held on 27.06.2018.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate internal financial controls for ensuring the efficient conduct of its business in adherence with laid-down policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, which is commensurate with the size of the Company and the nature of its business to protect its interests of the Company.

The Statutory Auditors, in their report dated 10^th May 2018, have opined that the Company has in all material respects adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2018 based on internal control over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

REMUNERATION TO AUDITORS

M/s. R Subramanian & Company LLP, Chennai and M/s. S Viswanathan LLP, Chennai, were appointed as Joint Statutory Auditors of the Company for the financial year 2017-18 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.18 lakhs towards statutory audit fees (Rs. 9.00 lakh to each of the Joint Statutory Auditors) in addition to out-of-pocket expenses, if any, and applicable GST.

There are no qualifications in the Statutory Auditors report dated 10^th May, 2018 on the annual accounts for the financial year 2017-18.

COST AUDITORS

M/s. M Krishnaswamy & Associates, Cost Accountants, Chennai, were appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2017-18 at a total remuneration of Rs. 2,00,000/- p.a. plus applicable taxes and out-of-pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company subject to ratification by the shareholders in the Annual General Meeting.

The cost audit for the year 2016-17 was carried out and the cost audit report was filed with the Ministry of Corporate Affairs in the prescribed form within the stipulated time period. The cost audit report for the year 2017-18 would also be filed within the stipulated time.

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2017-18 confirms that the Company has complied with all the applicable provisions of the Companies Act 2013 and the rules made thereunder and other applicable acts, rules, guidelines, applicable secretarial standards, etc., except the clause relating to appointment of Independent Directors.

The appointment of additional Independent Directors is under the consideration of the Government of India.

One separate meeting of Independent Directors was held on 11^th Oct, 2017.

The report, duly certified by a Practicing Company Secretary, is attached as Annexure- VII to this Report.

Your Company being a Government Company, the selection and appointment of Directors, their terms of appointment and the remuneration payable to them, are decided by the Government of India as per applicable guidelines and not by the Board of Directors. In view thereof, the terms of reference of Nomination and Remuneration Committee do not include the terms provided under the Companies Act, 2013. The performance evaluation of all directors, excluding directors representing Naftiran Intertrade Company, one of the promoters of the company, is carried out by the Administrative Ministry (MoP&NG), Government of India, as per applicable guidelines. The above is in line with the exemption provided to Government Companies by the Ministry of Corporate Affairs.

PUBLIC PROCUREMENT POLICY FOR MSMEs

Your Company complied with the Public Procurement Policy for Micro Small and Medium Enterprises (MSME) as per the directives of the Government of India by achieving a target of 23.3% of the total procurement / service, excluding crude oil and natural gas, which is higher than the 20% target set for annual procurement from Micro and Small Enterprises (MSE). 0.68% was achieved against the sub-target of 4% for procurement earmarked for enterprises owned by SC/ST entrepreneurs and the remaining 3.32% of 4% was achieved by way of procurement from other micro and small enterprises in line with the policy.

Several initiatives were undertaken to identify the entrepreneurs for procurement of goods and services from MSEs owned by SC/ST enterprises by way of conducting vendor development programmes.

JOINTVENTURES

Indian Additives Limited (IAL):

Your Company has a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) in the year 1989 for manufacture of lube additives components and packages. The share capital of IAL is Rs. 23.66 crore. CPCL and Chevron hold 50% each in the share capital of IAL.

IAL achieved a turnover of Rs. 639.46 crore during the year 2017-18, as against Rs. 643.45 crore in the previous year. The Profit After Tax for the year 2017-18 was Rs. 39.33 crore as against Rs. 55.27 crore in the previous year. The Board of IAL has recommended a dividend of 50% for the financial year 2017.18.

National Aromatics and Petrochemicals Corporation Limited (AROCHEM):

Your Company has another Joint Venture with M/s. Southern Petrochemicals Industries Corporation Ltd. (SPIC) in the year 1989 for manufacture of PTA, Paraxylene, Orthoxylene and Benzene. The share capital of AROCHEM is Rs. 5 lakh. CPCL and SPIC hold 50% each in the share capital of AROCHEM. Consolidation in respect of financials of this JV Company has not been incorporated in the preparation of Consolidated Financial Statements since this JV is not operational. The investments have been fully provided for diminution in value.

RELATED PARTY TRANSACTIONS (RPTs)

In line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations 2015, a policy on material RPTs was framed, which can be accessed on the website at the link https://www.cpcl.co.in/Policies. Your Company has undertaken transactions with related parties during the year. These transactions are in the ordinary course of business and on arms length basis. As per the RPT Policy, approval of Audit Committee has been obtained for all RPTs. During the year, there were no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Notes to the Annual Accounts.

REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

PARTICULARS OF EMPLOYEES

As per the provisions of Section 197 of the Companies Act 2013 and the Rules made thereunder, Government Companies are exempted from inclusion in the Directorsâ Report the statement of particulars of employees drawing remuneration in excess of the limits specified under the Act and Rules notified thereunder.

BOARD OF DIRECTORS

The following changes have occurred in the Board of the Company:

1. Ms. Perin Devi, Director, Ministry of Petroleum and Natural Gas, Government of India has been appointed as Government Director on the Board of CPCL in place of Mr.K.M.Mahesh based on the communication No.C-31033/1/2016-CA/FTS:42979 dated 24.11.2017 received from Ministry of Petroleum and Natural Gas, Government of India, effective 24.11.2017. With this appointment, CPCL has complied with the requirement of appointment of 1 Woman Director.

2. Mr. Gautam Roy, the then Managing Director, was holding the additional charge of the post of Director (Operations) based on the communication from Ministry of Petroleum and Natural Gas vide letter dated 30.06.2017 and 20.09.2017, from 01.07.2017 to 29.01.2018 after superannuation of Mr. S. Venkataramana on 30.06.2017. Mr. G. Aravindan has been appointed as Director (Operations) effective 30.01.2018.

3. Mr. S.N.Pandey has been appointed as Managing Director effective 01.02.2018, in place of Mr.Gautam Roy, who superannuated on 31.01.2018.

4. Mr. B.V.Rama Gopal, Director (Refineries), IOCL, has been appointed as a Director at the Board meeting held on 05.04.2018 in place of Mr.S.M.Vaidya.

5. Mr. S.Krishna Prasad, the then Director (Finance) superannuated on 31.01.2018. Mr. Rajeev Ailawadi has been appointed as Director (Finance) effective 08.05.2018. Mr. S.N.Pandey, Managing Director, was holding the additional charge of Director (Finance) from 01.02.2018 till 07.05.2018.

BOARD MEETINGS

During the year, seven meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders were passed by the regulators or courts or tribunals that impact the going concern status and the Companyâs operations in future.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The provisions of Section 134 (3) (p) require a listed entity to include a statement indicating the manner of formal evaluation of performance of the Board, its Committees and of individual Directors. However, the said provisions are exempt for Government Companies as the performance evaluation of Directors is carried out by the Administrative Ministry, i.e., Ministry of Petroleum and Natural Gas (MoP&NG), as per laid-down evaluation methodology.

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The provisions of Section 134 (3) (e) regarding the policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Sec 178(3) are exempted for Government Companies.

VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Company framed a whistle-blower policy wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees, to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any such complaint is reviewed by the Competent Authority or Chairman of the Audit Committee. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. No employee has been denied access to the Audit Committee. The policy on Vigil Mechanism / Whistle-Blower can be accessed on the Companyâs website at the link https://www.cpcl.co.in/Policies.

During the year, no complaint has been received under the Whistle-Blower Policy.

DETAILS OF LOANS / INVESTMENTS / GUARANTEES

Your Company has not provided Loans / Guarantees / Security to any person, body corporate or joint venture during the year.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the extract of Annual Return for the financial year ended 31^st March, 2018 in the prescribed form MGT-9 is attached at Annexure-VIII to this report.

COMPLAINCE WITH SECRETARIAL STANDARDS

Your Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directorsâ Responsibility Statement, it is hereby confirmed that

i) in the preparation of the annual accounts for the financial year ended March 31^st, 2018, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended 31^st March, 2018, on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

RIGHT TO INFORMATION

Your Company complies with The Right to Information Act, 2005. In accordance with the provisions of the RTI Act, necessary disclosures have been made on the website of the company.

During the year, 152 applications under the RTI Act were received and responded in time.

OFFICIAL LANGUAGE POLICY

Your Company continues to take constant efforts to effectively implement the provisions of the Official Language Act and Rules to ensure improvised use of Hindi in its day-to-day functioning. The Official Language Implementation Committee meets periodically to review the progress of usage of Hindi in the Company.

The First Sub-Committee of Committee of Parliament on Official Language held discussions with the officials of the Company on 17^th Feb, 2018, on issues related to Official Language.

ACKNOWLEDGEMENT

Your Board of Directors take this opportunity to place on record their sincere appreciation of the commitment, initiative and hard work put in by the members of the CPCL family.

Your Board of Directors gratefully acknowledge the support, cooperation and guidance extended by the Government of India, particularly the Ministry of Petroleum & Natural Gas, other ministries, the Government of Tamil Nadu, Indian Oil Corporation Ltd., Naftiran Intertrade Company Ltd., Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, and other regulatory and statutory authorities.

Your Directors are thankful to all its stakeholders, including bankers, customers, contractors, vendors, etc., for the continued confidence reposed by them on the company.

Your Directors also place on record their appreciation of the valuable contributions made by other Directors, viz., Mr. Gautam Roy, Mr. S.Krishna Prasad, Mr. S.Venkataramana, Mr. K.M.Mahesh and Mr. S.M.Vaidya during their tenure on the Board.

For and on behalf of the Board

(Sanjiv Singh)

Chairman

DIN: 05280701

Place: New Delhi

Date: 14.07.2018

Mar 31, 2017

DIRECTORSâ REPORT 2016-2017

To the Shareholders of Chennai Petroleum,

On behalf of the Board of Directors of your Company, it gives me great pleasure to report yet another year of exemplary performance of your Company and to present the 51st Annual Report on the working of your Company, together with the Audited Statement of Accounts, Auditors'' Report and the Report of the Comptroller & Auditor General of India on the Accounts for the year ended March 31,2017.

PERFORMANCE REVIEW

FINANCIALS:

The Company has prepared the financial statements in line with the provisions of the Companies Act 2013 and the Ind AS Accounting Standards issued by the Institute of Chartered Accountants of India.

The highlights of Standalone & Consolidated financial results are as under: (Rs, in crore)

Particulars	Standalone		Consolidated
Particulars	2016-17	2015-16	2016-17	2015-16
Gross Turnover	40586	34953	40586	34953
Profit before Interest, Depreciation and Tax	1978	1385	1972	1378
Interest	273	352	273	352
Depreciation, Amortization and Impairment	340	274	340	274
Profit / (Loss) before Tax	1365	759	1359	752
Share of Profit of Joint Ventures	-	-	27	26
Profit / (Loss) before Tax	1365	759	1386	778
Tax Expense
Current Tax	308	17	308	17
Deferred Tax	27	-	27	-
Profit /(Loss) for the year (after tax) - A	1030	742	1051	761
Other Comprehensive Income (after tax)- B	(6)	(2)	(6)	(2)
Total Comprehensive Income (Comprising profit/(loss) and other comprehensive income for the year) - A B	1024	740	1045	759
Value Added	2805	2078	2832	2104

Compliance with Ind AS

Your Company has prepared the financial statements as per the requirements of IndAS as stipulated under Section 133 of the Companies Act, 2013 read with the relevant rules there under. These financial statements have been prepared in accordance with IndAS for the first time, being mandatory from 1 st April 2016 and the previous year''s figures have been accordingly restated.

Highlights of Standalone Financial Performance during the year 2016-17:

The year 2016-17 was a hallmark year for the Company and the highlights are as under

- The turnover registered an increase of 16% at Rs. 40,586 crore, as compared to Rs. 34,953 crore in the previous year, on account of increase in both the quantity of products sold and price variation.

- The Company registered its second highest Profit Before Tax since inception at Rs. 1,365 crore in the current year with an increase of 80% as compared to Rs. 759 crore in the previous year.

- The Total Comprehensive Income witnessed a steep increase of 38% at Rs. 1,024 crore as compared to Rs.740 crore in the previous year.

- The Gross Refining Margin in the current year rose to $ 6.05/bbl as compared to $5.27/bbl in the previous year. Dividend

The Board recommended a Preference dividend of 6.65% payable to Indian Oil Corporation Ltd., the holding Company, as per the terms and conditions of the offer document, on the paid-up Preference Share Capital of the Company for the financial year 2016-17, which amounts to Rs. 0.665 per preference share, and the same has been accounted for as part of Finance Cost in line with Ind AS requirements.

In view of the excellent financial performance, your Board is happy to recommend a dividend of 210% on Equity Share Capital for the financial year 2016-17 amounting to Rs. 21 /- per equity share, which is the highest ever.

Book Value

The book value per share of your Company improved significantly from Rs. 158.58 as on 31st March, 2016 to Rs. 222.54 as on 31st March, 2017, registering an increasing of 40%.

Reserves and Surplus

The Reserves and Surplus as on 31st March, 2017 were noticeably higher at Rs. 3,164.81 crore as compared to Rs. 2,212.43 crore as on 31st March, 2016.

Value Addition

The value addition during the year improved to Rs. 2,805 crore as compared to Rs. 2,078 crore in the previous year. Digital India Initiative

Your Company continuously monitors the promotion of payments through digital means to achieve a cashless campus and endeavors to extend the necessary support to all its stakeholders in achieving the objectives of the Government of India for moving towards a cashless economy. In this regard, the company has implemented a 100% e-payment and e-collection system through digital means for all its stakeholders, viz., employees, vendors, contractors, service providers, etc. In addition, awareness camps were also conducted for the CISF personnel who are providing security to our Refinery at Manali and their families, students of the CPCL Polytechnic College, family members of CPCL employees at the township in CPCL CBR Refinery, women contract laborers, etc.

During the year, through constant persuasion and campaigns, your Company has ensured opening of bank accounts by all contract workmen.

Contribution to Exchequer

Your Company has consistently been the largest contributor in Tamil Nadu to both State and Central Exchequer in the form of duties and taxes. The details are as under:

in crore

Particulars	2016-17	2015-16
Central Exchequer	13,270	8,882
State Exchequer	436	444
Total	13,706	9,326

In recognition of its contribution towards revenue and industrial growth, your Company was awarded the Highest Tax Payer Award 2015-16 by the Central Excise Department for being the top assessee in the Chennai Zone.

Public Deposit Scheme

Your Company has not accepted any public deposits during the year 2016-17 and no public deposit was outstanding as on 31st March, 2017.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 124 of the Companies Act, 2013 within the stipulated time.

PHYSICAL:

CRUDE OIL THRUPUT (in TMT)	2016-17	2015-16
Imported	8,092	7,243
Indigenous	2,164	2,401
Total crude	10,256	9,644

PRODUCTION (in TMT)
Light Ends	2,158	2,093
Middle Distillates	5,290	4,899
Lube Base Stock	160	188
Wax	21	21
Heavy Ends	1,730	1,554
Intermediates	(41)	(13)
Fuel & Loss	938	902
Total output	10,256	9,644
Distillate Yield	72.6	72.5

(TMT = Thousand Metric Tonnes)

Operational Performance

Your Company achieved a throughput of 10.256 million metric tonnes per annum (MMTPA) during the year 2016-17 and exceeded the MoU target of 10.250 MMTPA after a gap of seven years despite the impact of Cyclone Vardah. The distillates yield was the highest ever at 72.6% as against the previous best of 72.5% in 2015-16. The Fuel & Loss for the year was lower at 9.1 wt.% as compared to 9.3 wt.% in the last year. The Energy Intensity Index (Ell) was the lowest at 101.3 against the previous lowest of 101.9 in the year 2014-15.

Your Company successfully completed OHCU revamp shutdown in February 2017, improving its capability of handling coker streams and enhancing its capacity. The MS production was the highest at 1,105 TMT as against the previous best of 1,050 TMT in 2014-15; the isomer ate production was the highest at 166 TMT as against the previous best of 135 TMT achieved in 2011-12.

During the year, Manali Refinery achieved a crude oil throughput of 9,725 TMT in 2016-17 as compared to the previous year''s figure of 9,100 TMT. It processed one new crude E.A. blend (Low-Sulphur category) from Nigeria, which was added to the regular basket.

During the year, Cauvery Basin Refinery achieved a crude oil throughput of 530.8 TMT in 2016-17 as compared to the previous year''s figure of 543.6 TMT. The distillate yield during the year was at 78.2 wt% as compared to 79.3 wt% in the previous year. Natural gas processed in 2016-17 was 72.0 TMT, as compared to the previous year''s figure of 79.2 TMT. Fuel & Loss was at 4.2 wt.% as compared to 4.0 wt.% in the previous year.

During the severe Cyclone Vardah on 12th December 2016, which hit Chennai directly, your Company''s employees have shown great courage and commitment in ensuring safe operations of major units and utility systems. Subsequently, the affected units were restarted within the shortest possible time and product supply to the market was maintained.

The Central Pollution Control Board (CPCB) has directed your Company to establish on-line connectivity of stack emission data to CPCB immediately, similar to the one existing with TNPCB since 2015. Your Company initiated immediate action and completed the job by 8th May 2017 and intimated compliance to CPCB.

MoU PERFORMANCE

Your Company signed an MoU with Indian Oil Corporation Limited, the holding Company, setting the performance parameters and targets for the year 2016-17, as per the guidelines issued by the Department of Public Enterprises (DPE). Your Company has received âVery Good'' rating from DPE in respect of the MOU for the year 2015-16.

MARKETING

M/s.Indian Oil Corporation Limited, the holding company, markets a majority of the fuel products produced by your Company.

The details of sales of major products through direct marketing by your Company during 2016-17 over the previous year are tabled below:

_[Figures in TMT

S.No.	Product	2016-17	2015-16
1	LABFS	58.11	54.05
2	Paraffin Wax	23.22	20.08
3	Naphtha	209.41	180.31

During the year, 29 new customers were registered for supply of food grade hexane, propylene, sulphur and paraffin wax. Four customer meets were conducted during the year at various locations.

During the year, fresh agreements were signed with Indian Additives Ltd. and Kothari Petrochemicals Ltd. for sale of fuel oil and lean Poly Butylene Feedstockâs respectively.

In recognition of its contribution to exports, your Company was conferred with the Export Excellence Award for the year 2014 under "Top Exporter in Southern Region" in Gold category by Federation of Indian Exports Organization (FIEO).

RESEARCH AND DEVELOPMENT (R&D)

Your Company''s R&D Centre attaches importance for continuous up gradation of technologies, building R&D capabilities and expertise in various areas of refinery operations.

The R&D policy of your Company lays emphasis on providing technological inputs to meet the corporate objective of technical excellence in all aspects of refinery operations; promoting indigenous technologies for refinery processes in association with national laboratories/academic institutions; and developing new products and upgrading the quality of the existing petroleum products.

Major R&D projects undertaken during the year include the following:

- Project on "Development of Low-aromatic and Ultra Low-Sulphur Jet Fuel for Air Breathing Engine Applications (JP-7)"

- Development of an eco-friendly, low-cost synthetic process for production of exotetra-hydrodicy clopentadiene (JP-10)

- Development of Naphtha Isomerisation Catalyst Process (lab-scale)

- Renewable crude and liquid hydrocarbon fuels from algae to bio-crude. The project was initiated after obtaining approvals from Scientific Advisory Committee (SAC) on Hydrocarbons of the Ministry of Petroleum & Natural Gas.

PROJECTS

Your Company lays emphasis on conceiving, developing and implementing projects keeping in view operational necessities. Project schedules and costs are being monitored regularly to ensure effective and timely implementation. Your Company achieved Plan and Non-plan expenditure of Rs. 1,134 crore and Rs. 135 crore respectively, totaling Rs. 1,269 crore during the year.

ONGOING PROJECTS

As a part of its growth strategy, the Company has undertaken the following projects aimed at capacity expansion, value addition, reliability improvement and quality Up-gradation.

Manali Refinery Resid Up gradation Project

Your Company is implementing the Resid Up gradation Project at an estimated cost of Rs. 3,110 Crore to increase distillate yield and maximize the processing of high-sulphur, heavy crudes. The project consists of new secondary processing units like Delayed Coker Unit (DCU), Sulphur Recovery Unit, Revamp of Once-through Hydrocracker Unit (OHCU) and addition of associated utilities and offsite facilities. The revamp of OHCU has been completed and commissioned during March 2017. The DCU has been mechanically completed during February 2017 and other associated utilities Offsite facilities are under various stages of construction/commissioning.

New Crude Oil Pipeline

A new crude oil pipeline with additional safety features from Chennai Port to Manali Refinery, as a replacement for the existing 30-inch pipeline, is under implementation at an estimated cost of Rs. 258 crore. The project is expected to be mechanically completed by February 2018.

Diesel Hydrodesulphurization (DHDS) unit Revamp Project:

In order to enable production of entire diesel from Manali Refinery meet BS-IV quality norms, your Company is revamping the existing DHDS unit from 1.80 MMTPA to 2.34 MMTPA at an estimated cost of Rs. 367 crore. All major equipment, including a new reactor, have been received and erected.

BS-VI Auto Fuels Quality Project:

As per the directives of the Government of India, the entire production of diesel from CPCL, along with other refineries in the rest of the country, has to meet BS-VI quality norms with effect from 1 st April 2020.

For complying with the requirement of BS-VI diesel norms, the existing Diesel Hydro-treating (DHDT) unit is being revamped to increase the capacity from 1.8 to 2.4 MMTPA along with a new Sulphur Recovery Unit and other associated facilities. Further, to meet the requirement of BS-VI petrol norms, installation of a new FCC Gasoline Desulphurization unit with a capacity of 0.6 MMTPA along with other associated facilities is under implementation. The project is expected to be mechanically completed by June 2019.

Cauvery Basin Refinery

Completed Project:

A 150 KW rooftop grid-connected solar power plant was successfully installed at the control room and substation-1 building of Crude Distillation Unit.

Ongoing Project:

To enable direct coastal loading of diesel from Cauvery Basin Refinery (CBR), provision of new diesel storage tanks of 2x10 tkl (thousand kilolitres) capacity, coastal loading pumps and associated pipelines is nearing completion.

PROPOSED PROJECTS:

Re-Gasified Liquefied Natural Gas (R-LNG):

It is proposed to replace Naphtha and Fuel Oil with RLNG to be supplied by IOCL. This will require revamping Hydrogen Generation Units (HGU), Modifications in Gas Turbines (GT) and Boilers. The project is expected to be mechanically completed from December 2019 onwards.

Refinery Expansion Project at CBR

Your Company is examining the feasibility of a new 9-MMTPA Refinery Expansion Project at CBR. Pre-feasibility study for the same was carried out through M/s. Engineers India Ltd.

INFORMATION TECHNOLOGY

Your Company firmly believes that information technology is integral to all facets of its operations to sustain growth and profitability. During the year, and IT Asset Management System has been implemented to classify IT assets based on the criticality and to maintain an IT asset register. In order to strengthen cyber-security, a new log server for auditing was installed and CCTV camera surveillance was provided at the Manali Data Centre.

HEALTH, SAFETY AND ENVIRONMENT

Health

Your Company endeavors to achieve best standards of excellence in the healthcare of its workers and has an Occupational Health Services Centre, with the latest equipment manned by qualified professionals.

The OHS Centre is the first to be set up in the oil industry and acts as a resource centre for providing professional and technical assistance to other industries. It is manned round-the-clock with two life-support ambulances to manage all medical emergencies.

As part of health surveillance, a majority of the employees underwent comprehensive medical examination. In addition, the health of the contract workers, security personnel and canteen workers was checked as per the statutory requirements.

Health awareness programmes were also conducted for the benefit of the employees. During the year, occupational hygiene surveys were carried out at Manali and CBR as per schedule to evaluate employees'' exposure to noise, heat, light and chemical hazards.

Safety

Your Company continuously strives to attain all-round improvement in its safety performance by adhering to the best safety standards and demonstrating its concern not only for the safety of its employees but also that of its contractors, customers and the community at large.

Significant safety initiatives undertaken during theyear include the following:

- Replacement of old fire tender with a new one.

- Provision of automatic rim-seal fire detection and protection system for all Class-A large-scale floating-roof storage tanks in Manali and CBR Refineries.

- Inspection of usage of spark arrestors approved by Petroleum and Explosives Safety Organization (PESO) for all vehicles, including bitumen trucks, contractors'' vehicles and transport cabs entering the refinery.

- Speed checkof vehicles inside the refinery using âradar speed-gunâ to monitor and maintain speed limits.

- Safety Audits: Third-party occupational health & safety audit carried out by M/s. Bureau Veritas Certification India Private Ltd., Chennai; pre-commissioning safety audits by OISD teams for the revamped OHCU plant and DCU-Resid Project; first comprehensive safety audit by PESO.

Onsite emergency mock-drills were conducted at Manali Refinery in September 2016 and February 2017. Monthly mock-drills conducted with creation of different scenarios.

Environment

Environment protection and ecological balance continues to remain one of the avowed objectives of your Company. Significant environmental initiatives undertaken during the year include the following:

- Proposal for online connectivity of the balance stacks and effluent analyzers to TNPCB & CPCB initiated.

- Emergency Response and Disaster Management Planning (ERDMP) re-certification audit carried out by Disaster Management Institute, Bhopal, in line with the guidelines of MoP&NG.

- Leak Detection and Repair (LDAR) programme carried out on a regular basis as per the environment rules.

* Online stack monitoring station, ambient air quality monitoring system and online ETP monitoring system are in operation at Cauvery Basin Refinery. Online data connectivity to State Pollution Control Board / Central Pollution Control Board from continuous ambient air quality monitoring Stations is being complied with.

* Secondary seals have been provided in Class-A petroleum storage tanks in Cauvery Basin Refinery to reduce fugitive emissions.

In recognition of its efforts in environment preservation, CBR was bestowed with âGreen Award'' for industries from TNPCB for the year 2014 in June 2016, for the second consecutive year.

ENERGY CONSERVATION

Your Company accords utmost priority to various energy conservation measures besides monitoring and analyzing fuel consumption and optimizing plant operations on a regular basis.

Major energy conservation measures implemented by your Company during the year resulted in an estimated savings of about 14,000 SRFT/annum. The details of energy conservation measures are given in Annexure I.

In recognition of its efforts to minimize energy consumption, your Company has been awarded the OGCF-2016 Award for Furnace/Boiler Efficiency by the Centre for High Technology.

RELIABILITY IMPROVEMENT INITIATIVES

Major initiatives were undertaken at Manali Refinery during the year to ensure reliability of equipment, processes and product quality, chief among them being:

- Successful implementation of the recommendations of ââSpecial Task Force Reliability Committee," which improved the operating factor of N2/02 plant, resulting in savings in liquid Nitrogen procurement.

* Successful execution of Logics modification in DCS software for the PSA system, resulting in safeguarding the Hydrogen Reformer from possible tripping during changeover from 12-bed operation to 10-bed operation.

- Execution of major overhaul of all three Make-up Gas Compressors at OHCU, including replacement of third-stage cylinder, resulting in improvement in availability and reliability of compressors.

- Successful re-routing of 30-inch crude oil receipt line from Chennai port to Manali Refinery for a length of about 1.2 kms for accommodating fourth railway line near Tiruvottiyur, without affecting crude oil receipt and additional demurrage.

* Up gradation of fire-water piping for a length of 4 km completed, reducing fire-water leaks and improving the reliability of FW network.

- Intelligent pigging of 20-inch crude oil receipt line from CPCL oil jetty to CBR carried out for the first time ever. HUMAN RESOURCES

The CPCL family has a firm foundation of discipline and productive work culture with highly motivated employees, which has enabled your Company to turnaround and scale new peaks of performance during the year.

The total manpower of your Company as on 31st March 2017 was 1,645, comprising 805 supervisors and 840 non-supervisors (1,637 as on 31st March 2016, comprising of 804 supervisors and 833 non-supervisors).

During the year, three Communication Meetings were conducted with collectives by Functional Directors and Managing Director to facilitate information-sharing.

Your Company continuously undertakes training and development initiatives to enable its employees realize their full potential and give their best. During the year 2016-17, the Company achieved an overall performance of 2.1 training man-days by organizing technical training, soft skills and health improvement programmes for the benefit of the employees. During the year, 1,946 employees were nominated for 79 internal programmes on Operations, Maintenance, Management Development and other topics, and 345 employees were nominated for various programmes on functional areas conducted by external agencies.

Your Company has been following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC and Persons with Disabilities. Out of the total manpower, there were 392 SC employees (previous year: 399) and 38 ST employees (previous year 37) as on 31st March 2017 constituting 23.83% and 2.31% of the total manpower respectively.

The statistics relating to representation of SCs/STs/OBCs in the prescribed preformed as on 1 st Jan. 2017 is given in Annexure-ll.

Your Company is implementing the provisions of the Disabilities Act 1995 by way of 3% reservation for physically challenged and disabled persons. In line with the provisions, two backlog vacancies were cleared through a special recruitment drive. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process in line with Government guidelines.

COMPLIANCE WITH SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL)ACT 2013

Your Company gives utmost importance to prevention of sexual harassment of women at workplace. There is an Internal Complaints Committee to handle sexual harassment complaints and conduct enquiries, if any, in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. There were no complaints of sexual harassment during the year.

Sensitization programme on the Act was conducted for women employees on 24.08.2016.

WOMEN EMPOWERMENT:

Your Company endeavors to provide equal opportunity for women in employment. As on 31.03.2017,86 women employees are on the rolls of the Company, of whom 46 are in the supervisory grade and 40 are in non-supervisory grade, constituting 5.71% of the total supervisory employees and 4.76% of the total non-supervisory employees.

Recognizing the efforts in the area of women empowerment, Women In Public Sector (WIPS), a forum under the aegis of the Standing Conference of Public Enterprises (SCOPE) awarded your Company the Best Enterprises Award for the year 2016 under Mini Ratna category.

CORPORATE SOCIAL RESPONSIBILITY (CSR) & SUSTAINABLE DEVELOPMENT (SD)

Your Company firmly believes in the concept of inclusive development and rightly aligns its objectives and business goals by looking beyond financial considerations while discharging its social obligations.

The CSR and Sustainable Development activities of your Company focus on education, health, sanitation and community initiatives. Even though the Company was not mandatorily required to incur any expenditure on CSR during 2016-17 in view of losses suffered in the past, a sum of Rs.l 87.51 lakh was spent during the year 2016-17 on various CSR & SD projects and initiatives under broad categories like health, education, skill development, etc.

Your Company has been in the forefront in playing the role of a responsible corporate citizen. In December 2016, when Chennai city was battered by Cyclone Vardah, sarees, sewing machines, tri-cycles for the disabled, brass iron boxes, etc., valuing Rs.3.71 lakh were distributed among the poor and needy dwelling in the neighborhood of Manali Refinery. CBR contributed a sum of Rs.l lakh to the District Collector, Nagapattinam towards purchase of lifebuoys and lifejackets.

The CSR Policy of the Company can be accessed at the website of the Company under the link http://www.cpcl.co.in/policies.

A detailed report on CSR activities as per the provisions of the Companies Act, 2013 along with CSR Highlights during theyear are attached at Annexure-lll to the report.

The company also published a report on Corporate Sustainability for the year 2015-16 and the same is available in the link https://www.cpcl.co.in/corporategovernance.

Significant measures undertaken in the areas of sustainable development include the following:

- Installation of a 20-KW solar power plant on the roof-top of the Corporate Office building in Teynampet, Chennai.

- Installation of a 150-KW grid-connected roof-top solar power plant at CBR Control Room and Substation-1.

VIGILANCE

The Vigilance Department of your Company is headed by the Chief Vigilance Officer who has been appointed on deputation by the Central Vigilance Commission. Your Company continues to vigorously pursue and lay greater emphasis on preventive vigilance measures. Vigilance Department assists the management in promoting transparency, accountability, integrity and honesty amongst employees.

Integrity Pact has been implemented as per the guidelines of the Government. The threshold limit was reduced to Rs.l crore, so as to enhance coverage of contracts under Integrity Pact.

PUBLIC GRIEVANCES

Your Company gives importance to timely redressal of public grievances. Contact details of Public Grievance Officer are displayed on the website of the Company, under the link https://www.cpcl.co.in/grievances. During the year 2016-17, nine public grievances were received and disposed off in time.

CORPORATE GOVERNANCE

In line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and DPE Guidelines on Corporate Governance, a separate section on Corporate Governance forms part of this Annual Report.

The Certificate received from the Auditors of the Company regarding compliance of conditions of corporate governance, as required under SEBI (LODR) Regulations 2015 as well as compliance with the guidelines on corporate governance issued by the Department of Public Enterprises, Government of India, is annexed and forms part of this Report (Annexure-IV)-

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under SEBI (LODR) Regulations 2015 is annexed and forms part of the Annual Report (Annexure-V).

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report covering initiatives taken with regard to Environment, Social and Governance perspective prepared in accordance with SEBI (LODR) Regulations 2015 forms part of the Annual Report-Annexure-VI.

AUDIT COMMITTEE

The composition of the Committee as on 31.3.2017 is as under:

- Mr. Mrutunjay Sahoo, Independent Director - Chairman.

- Dr. PB. Lohiya, Independent Director, Member

- Mr. K.M. Mahesh, Government Director, Member Director (Finance) is a permanent invitee.

The recommendations of the Audit Committee during the year were accepted by the Board.

CODEOFCONDUCT

The Board of Directors of your Company has formulated a code of conduct for the Directors and Senior Management Personnel, which was circulated to all concerned and hosted on the company''s website. The code can be accessed at http://www.cpcl.co.in/codeofconduct. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct and the same was informed to the Board at the meeting held on 15th May 2017.

RISK MANAGEMENT

Your Company has a documented Risk Assessment and Management Policy. The Committee constituted for this purpose identified the risks applicable to the Company, both internal and external, suggested risk minimization measures and formulated the Risk Management Policy.

The Action Taken Report on the Risk Management Policy for the year 2016-17 was reviewed by the Audit Committee and the Board at the Meeting held on 15th May 2017.

INTERNAL FINANCIAL CONTROLS

Your Company has adequate Internal Financial Controls for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, which is commensurate with the size of the Company and the nature of its business to protect the interests of the Company.

Your Company has an Internal Audit Department with qualified professionals to carry out audits covering various areas of operations. Internal audit plans are reviewed by the Audit Committee. The Statutory Auditors, in their report dated 15th May 2017, have opined that the Company has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2017 based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

REMUNERATION TO AUDITORS

M/s. R Subramanian & Company LLP, Chennai and M/s. S Viswanathan LLP, Chennai, were appointed as Joint Statutory Auditors of the Company for the financial year 2016-17 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.l 6 Lakhs p.a. (Rs. 8.00 Lakhs to each of the Joint Statutory Auditors) in addition to out-of-pocket expenses, if any, and applicable service tax.

There are no qualifications in the Statutory Auditors report dated 15.05.2017 on the annual accounts for the financial year 2016-17.

COST AUDITORS

M/s. M Krishnaswamy & Associates, Cost Accountants, Chennai, was appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2016-17 at a total remuneration of Rs. 2,00,000/- p.a. plus applicable taxes and out-of-pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company subject to ratification by the shareholders in the Annual General Meeting.

The cost audit for the year 2015-16 was carried out and the cost audit report was filed with the Ministry of Corporate Affairs in the prescribed form within the stipulated time period. The cost audit report for the year 2016-17 would also be filed within the stipulated time.

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2016-17 confirms that the Company has complied with all the applicable provisions of the Companies Act 2013 and the rules made there under and other applicable acts, rules, guidelines, standards, etc., except the clause relating to appointment of Independent Directors, including one woman Director, separate meeting of independent directors and composition of Nomination and Remuneration Committee.

Two Independent Directors were appointed on 23rd February 2017 based on the communication from the Government of India.

The Nomination and Remuneration Committee has been reconstituted with the induction of two Independent Directors on 10th April 2017. Effective that date, the Company is complying with this requirement.

The appointment of additional Independent Directors, including one woman Director is under the consideration of the Government of India. The requirement relating to a separate meeting of Independent Directors will be complied with from the financial year 2017-18.

The report, duly certified by a Practicing Company Secretary, is attached as Annexure- VII to this Report.

Your Company being a Government Company, the selection and appointment of Directors, their terms of appointment and the remuneration payable to them, are decided by the Government of India as per applicable guidelines and not by the Board of Directors. In view thereof, the terms of reference of Nomination & Remuneration Committee do not include the terms provided under the Companies Act, 2013. The performance evaluation of all directors, excluding directors representing Naftiran Intertrade Company, one of the promoters of the company, is carried out by the Administrative Ministry (MoP&NG), Government of India, as per applicable guidelines. The above is in line with the exemption provided to Government Companies by the Ministry of Corporate Affairs.

PUBLIC PROCUREMENT POLICY FOR MSMEs

Your Company complied with the Public Procurement Policy for MSMEs as per the directives of the Government of India by achieving a target of 34%, which is higher than the 20% target set for annual procurement from MSEs. The sub-target of 4% for procurement earmarked for enterprises owned by SC/ST entrepreneurs was met by way of procurement from other micro and small enterprises in line with the policy.

Your Company has also undertaken various initiatives to identify the entrepreneurs for procurement of goods and services from MSEs owned by SC/ST enterprises byway of conducting vendor development programmes, seeking list of SC/ST entrepreneurs from State Government, etc.

JOINT VENTURES

Indian Additives Limited (IAL):

Your Company entered into a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) in the year 1989 for manufacture of lube additives components and packages. The share capital of IAL is Rs.23.66 crore. CPCL and Chevron hold 50% each in the share capital of IAL.

IAL achieved a turnover of Rs.642.41 crore during the year 2016-17, as against Rs. 650.28 Crore in the previous year. The Total Comprehensive Income for 2016-17 was Rs. 55.27 Crore as against Rs.51.10 Crore in the previous year. The Board of IAL has recommended a dividend of 50% for the financial year 2016-17.

National Aromatics and Petrochemicals Corporation Limited (AROCHEM):

Your Company entered into a Joint Venture with M/s. Southern Petrochemicals Industries Corporation Ltd. (SPIC) in the year 1989 for manufacture of PTA, Paraxylene, Orthoxylene and Benzene. The share capital of AROCHEM is Rs. 5 lakh. CPCL and SPIC hold 50% each in the share capital of AROCHEM. Consolidation in respect of financials of this JV Company has not been incorporated in the preparation of Consolidated Financial Statements since this JV is not operational. The investments have been fully provided for diminution in value.

RELATED PARTYTRANSACTIONS (RPTs)

In line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations 2015, a policy on material RPTs was framed, which can be accessed on the website of the company at link https://www.cpcl.co.in/policies. Your Company has undertaken transactions with related parties during the year. These transactions are in the ordinary course of business and on arms length basis. As per the RPT Policy, approval of Audit Committee has been obtained for all RPTs. During the year, there was no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Notes to the Annual Accounts.

REPORTON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under the Companies Act, 2013 and the Rules prescribed there under are given in the Annexure-I and form part of this Report.

PARTICULARS OF EMPLOYEES

As per the provisions of Section 197 of the Companies Act 2013 and the Rules made there under, Government Companies are exempted from inclusion in the Directors'' Report the statement of particulars of employees drawing remuneration in excess of the limits specified under the Act and Rules notified there under.

BOARD OF DIRECTORS

The following changes have occurred in the Board of the Company

1. The tenure of Mr. G. Ramaswamy, Independent Director, was completed on 08.10.2016.

2. Mr. Mrutunjay Sahoo, IAS, and Dr. PB. Lohiya have been appointed as Non-Official Independent Directors on 23.02.2017, based on the communication from Government of India, Ministry of Petroleum and Natural Gas.

3. Mr. Mohammed Bagher Dakhili has been appointed as Director on 23.01.2017 in place of Mr. Yasin Rezazadeh based on the communication from Naftiran Intertrade Company Ltd., Tehran, Iran.

4. Mr. Farzad Bahrami has been appointed as a Director on 23.02.2017, in place of Mr. Alireza Zamani based on the communication from Naftiran Intertrade Company Ltd.,Tehran, Iran.

5. The tenure of Mr. B Ashok, Chairman, was completed on 31.05.2017.

Your Directors take this opportunity to place on record the excellent services and guidance rendered by him during his tenure as Chairman. Your Directors take pride in stating that his guidance and contribution on various aspects steered CPCL to show resounding physical and financial performance during the year and also to come out of BIFR reporting.

6. Mr. S.M. Vaidya, ED (Operations), IOCL has been appointed as a Director at the Board Meeting held on 23rd June 2017.

7. Mr. Sanjiv Singh has been appointed as the Non-Executive Chairman by the Ministry of Petroleum and Natural Gas effective 16.06.2017.

8. Mr. S. Venkataramana, Director (Operations) ceased to be a director on attaining the age of super-annotation on 30.06.2017. Mr. Gautam Roy, Managing Director is holding the additional charge of the post of Director (Operations) effective 01.07.2017, in terms of the letter dated 30.06.2017 from Ministry of Petroleum and Natural Gas, Government of India.

The Company received Certificates of Independence from Mr. Mrutunjay Sahoo, IAS, and Dr. P.B.Lohiya, Independent Directors, confirming that they meet the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013 and SEBI (LODR) 2015. Two Independent Directors have been appointed on 23.02.2017 and the requirement relating to a separate meeting of Independent Directors will be complied with from the financial year 2017-18.

During the year, five meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report.

No significant or material orders were passed by the Regulators or Courts or tribunals that impact the going concern status and company''s operation in future.

VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Company framed a whistle-blower policy wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees, to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any such complaint is reviewed by the Competent Authority or Chairman of the Audit Committee. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. No employee has been denied access to the Audit Committee. The policy on Vigil Mechanism / Whistle-Blower can be accessed on the Company''s website at the link https://www.cpcl.co.in/policies.

During the year, no complaint has been received under the Whistle-Blower Policy.

DETAILS OF LOANS / INVESTMENTS/GUARANTEES

Your Company has not provided Loans / Guarantees / Security to any person, body corporate or joint venture during the year.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the extract of Annual Return for the financial year ended 31st March, 2017 in the prescribed form MGT-9 is attached at Annexure-VIII to this report.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended 31st March, 2017, on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

RIGHT TO INFORMATION

Your Company complies with The Right to Information Act, 2005. In accordance with the provisions of the RTI Act, necessary disclosures have been made on the website of the company.

During the year, 48 applications under the RTI Act were received and responded in time.

OFFICIAL LANGUAGE POLICY

Concomitant with the policy of the Government of India for Official Language Implementation, your Company endeavors to promote the progressive use of Hindi in official work. The Official Language Implementation Committee meets every quarter to review, discuss and provide guidance for effective implementation of the Official Language Policy in the Company.

STATUS OF BIFR REPORTING

With the increase in net worth to Rs. 3,361 crore as on 31st March 2016, your Company is out of reporting requirement to BIFR from 1 st April 2016. Formal communication was sent to BIFR in October 2016 in this regard. The net worth as on 31st March 2017 was Rs. 4,314 crore, including preference share capital.

ACKNOWLEDGEMENT

Your Board of Directors acknowledge with sincere appreciation the unstinted support, cooperation and sincere efforts of all the employees who have contributed to the excellent performance of the company.

Your Board of Directors also extend their profound thanks to the Government of India, particularly the Ministry of Petroleum & Natural Gas, other ministries, the Government of Tamil Nadu, Indian Oil Corporation Ltd, Naftiran Intertrade Company Ltd., Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, as well as regulatory and statutory authorities for their continued cooperation, guidance and support.

The Board would like to express its gratitude to all its stakeholders, including bankers, customers, contractors, vendors, etc., for their continued support and confidence reposed in the Company.

Your Directors also place on record their appreciation of the services rendered by other directors, viz., Mr. G Ramaswamy, Mr. Yasin Rezazadeh, Mr. Alireza Zamani and Mr. S. Venkataramana during theirtenure.

For and on behalf of the Board

(Sanjiv Singh)

Place: New Delhi Chairman

Date: 20-07-2017 DIN:05280701

Mar 31, 2015

Dear Members,

On behalf of the Board of Directors of your Company, it is my privilege to present the 49th Annual Report on the working of your Company, together with the Audited Statement of Accounts, Auditors' Report and the Report of the Comptroller & Auditor General of India on the Accounts for the year ended March 31, 2015.

PERFORMANCE REVIEW

Physical

CRUDE THRUPUT ( in TMT) 2014-15 2013-14

Imported 8451 8777

Indigenous 2331 1847

Total 10782 10624

PRODUCTION (in TMT) 2014-15 2013-14

Light Ends 2153 2269

Middle Distillates 5636 5317

Lube Base Stocks 201 141

Wax 25 23

Heavy Ends 1840 1948

Intermediates 12 11

Others (20) (18)

Fuel & Loss 935 933

Total 10782 10624

Financial (Rs. in Crore)

2014-15 2013-14

Gross Turnover 47877.82 53923.70

Profit before Interest,

Depreciation and Tax (112.54) 626.58

Interest 403.73 567.97

Depreciation and Amortization 226.12 389.58

Profit/(Loss) before Tax (742.39) (330.96)

Provision for Taxation

- Income Tax (Net) - (23.42) [Pertaining to earlier years)

- Deferred Tax - (3.69)

- Deferred Tax (Prior period item) (703.40) -

Profit / (Loss) after Tax (38.99) (303.85)

Value Added 466.40 1283.15

Highlights of Financial Performance during the year 2014-15 :

The Financial performance in the last quarter of the financial year was positive due to better operating performance coupled with stable crude and product prices resulting in higher operating profits. Despite achieving highest ever crude throughput in FY 2014-15, the decline in turnover was due to steep fall in crude and product prices from October 2014 mainly due to supply glut in the international market. As a result, the profitability was impacted significantly during the year due to inventory losses. The company posted a Profit/ (loss) before tax of Rs. (742.39) crore. However, the Profit/ (Loss) after tax was lower at Rs. (38.99) crore consequent to recognition of deferred tax asset in the current year in respect of carry forward business loss and unabsorbed depreciation to the extent of deferred tax liability of Rs. 703.40 crore accounted in previous years in line with the opinion received by the company from the Institute of Chartered Accountants of India.

Dividend

The Board of Directors of the Company has not recommended any dividend for the year 2014-15 due to loss.

Book Value

The book value per share of your Company was Rs. 111.15 as on 31.03.2015 as compared to Rs. 115.67 as on 31.03.2014.

Reserves and Surplus

The Reserves and Surplus as on March 31, 2015 was Rs. 1506.07crore as compared to Rs. 1573.44 crore as on March 31, 2014.

Value Addition

The value addition during the year was Rs. 466.40 crore as compared to Rs. 1283.15 crore in the previous year.

Contribution to Ex-Chequer

The details are as under:

( Rs. in Crore )

Particulars 2014-15 2013-14

Central Exchequer 6250.41 4827.87

State Exchequer 472.44 567.44

Total 6722.85 5395.31

Public Deposit Scheme

Your Company has not accepted any public deposits during the year 2014-15 and no public deposit was outstanding as on 31.03.2015.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred to the Investor Education and Protection Fund the required amount as per the Companies Act, within the stipulated time.

Operational Performance

The total thruput of the company during the year was 10782 TMT as compared to 10624 TMT in the previous year. The distillates yield was the highest at 72.1% as against the previous best of 71.4% in 2013-14. The Fuel and Loss for the year was the lowest at 8.65% as compared to 8.78% in the last year.

Manali Refinery achieved the highest ever crude thruput of 10,251 TMT as compared to the previous best of 10065 TMT in 2013-14. Fluidised Catalytic Cracking Unit (FCCU) achieved the highest throughput of 1075 TMT as against the previous best of 1065 TMT in FY 2013-14. The thruput of Continuous Catalytic Reforming Unit (CCRU) was the highest at 389 TMT as against the previous best of 359 TMT in 2013-14. Similarly, the thruput of Diesel Hydro treating Unit (DHDT) was the highest at 2186 TMT. The NMP Lube Extraction Unit also registered the highest thruput of 425 TMT as against the previous best of 390 TMT in 2003-04. The Energy Index for Manali Refinery was also the lowest at 62.3 MBTU/ BBL/NRGF as against the previous best of 62.5 MBTU/BBL/NRGF in 2013-14.Production of Propylene, MS and HSD in Manali Refinery also surpassed the highest levels at 37 TMT, 1050 TMT and 4474 TMT respectively.

Manali refinery processed two new crudes viz., DAS crude from Abu Dhabi and Brass River from Nigeria. By processing these new crudes, the Company realized the benefit of adding new crudes to the basket.

During the year, Cauvery Basin Refinery achieved a crude thruput of 531 TMT and received the award for achieving highest crude volume from Marg Karaikal Port. The Fuel & Loss was lower at 4.08 wt% as compared to 4.76 wt % in the previous year.

MoU PERFORMANCE

Your Company signed a MoU incorporating performance parameters with Indian Oil Corporation Limited, the holding Company, for the year 2014-15, as per the guidelines issued by the Department of Public Enterprises (DPE).

MARKETING

Majority of the fuel products produced by CPCL are being marketed by M/s.Indian Oil Corporation Limited.

The details of sales achieved by direct marketing during 2014-15 over previous year are tabled below:

(Figures. in TMT)

S. No. Product 2014-15 2013-14

1 PBFS 8.86 7.64

2 MEKFS 10.95 8.19

3 Propylene 37.10 35.64

Around 11 new customers were registered during the year for supply of Food Grade.Hexane, Sulphur and Paraffin wax. Four Customer Meets were conducted at various locations for Wax, Sulphur and other direct customers. Agreement was entered into with Cetex Petrochemicals Limited for a period of4 years for supply of 6000 MT per annum of MEKFS.

PROJECTS

Completed Projects

New MS, Naphtha and Slop Tanks

In order to accommodate increased production of MS and Naphtha, one Naphtha and one MS tank, each of 10,000 KL capacity was constructed and commissioned in October 2014. Further, in order to handle slops more effectively, a new storage tank of 10,000 KL capacity was completed and commissioned in November 2014.

Construction of 4 MG Reservoir

As part of the Resid Upgradation Project enabling job, a new reservoir of 4 MGR was constructed and commissioned.

Projects at Cauvery Basin Refinery

Installation of 2 Crude oil storage tanks of 10,500 KL each is being implemented at an estimated cost of Rs. 25 Crore. The project has been mechanically completed in July 2015.

ONGOING PROJECTS

As a part of growth strategy, the Company has undertaken following projects aimed at capacity expansion, value addition and quality Upgradation.

Mounded Bullets

Currently the LPG, Propylene and Propane are stored in Horton Spheres and Butylene is stored in above ground bullets. As a risk reduction measure & also to provide intrinsically passive and safe environment and to eliminate BLEVE (Boiling Liquid Expanding Vapor Explosion) of LPG and petro chemical products, mounded bullet storage facility is under implementation at an outlay of Rs. 279 crore.

The project is mechanically completed in March 2015.

Resid Upgradation Project

In order to maximize the distillates yield of the Manali Refinery and increase the percentage of High Sulphur Crude processing, the Company is implementing a Resid Upgradation Project at an estimated cost of Rs. 3110 Crore. This project involves installation of Delayed Coker Unit and Revamp of existing Hydro Cracker Unit along with other associated facilities. Construction of major units like Delayed Coker Unit (DCU) and Sulphur Recovery Unit (SRU) are in progress. Other Utilities and Offsite packages have also started. The scheduled mechanical completion date of the project has been revised from December 2015 to July 2016 on account of delay in obtaining clearance from Ministry of Environment & Forests, resulting in re-tendering for certain contracts and change in scope and configuration of certain OSBL systems.

New Crude Oil Pipeline

Activities are initiated to replace the existing 45 year old Crude oil pipeline running from Chennai Port to Manali Refinery with a New Crude oil Pipeline with state-of-the-art technology and safety features, to ensure reliable and faster crude transfer to refinery at a cost of Rs. 257.87 crore. The new pipeline is aligned along the berm of Ennore Manali Road Improvement Project. The Coastal Regulatory Zone (CRZ) clearance from Ministry of Environment & Forests was received in January 2014. Clearance from Ministry of Road Transport and Highways (MORTH) has been obtained on 4th Apr 2015, followed by Petroleum and Explosives Safety Organisation (PESO) approval on 11th May 2015 The project is scheduled for completion by end November 2016.

FUTURE PROJECTS

BS- IV compliance - DHDS Revamp:

As per the Auto Fuel Vision and Policy 2025 of Government of India, 100% BS-IV quality fuels have to be supplied by the refineries from April 2017 and 100% BS-V/VI quality fuels from April 2020. To comply with this directive, the existing Diesel Hydro-desulphurisation Unit (DHDS) is proposed to be revamped from 1.8 MMTPA to 2.34 MMTPA to ensure 100% BS-IV production from the Manali Refinery. After the revamp, the DHDS unit will be able to produce hydro treated diesel with less than 10 ppm sulphur.

The feasibility report of this project (BSIV) is under preparation with a target to commission by 31st March 2017.

INDIAN ADDITIVES LIMITED

Your Company has only one Joint Venture viz., Indian Additives Limited (IAL), with Chevron Chemical Company (now Chevron Oronite Company), which was formed in the year 1989 for the manufacturing of Lube Additives. IAL achieved a turnover of Rs. 587.62 crore during the year 2014-15, as against Rs. 589.52 Crore in the previous year. The Profit after Tax for 2014-15 was Rs. 23.52 Crore as against Rs. 24.95 Crore in the previous year. The Board of IAL has recommended a dividend of 50% for the financial year 2014-2015.

INFORMATION TECHNOLOGY

Your company has taken rapid strides towards Green IT by focusing on the concept of paperless office with the successful implementation and processing of various employee claim in Employee Enterprise Portal system . In order to strengthen the IT security the Load Balancer was implemented which enables balancing of two ISP providers and automatic routing of internet services (Mail and Internet Services) with security features.

During the year, web-based On-line suggestion scheme, Tender Grievances System, centralized timesheet process for refinery locations (CBR) were introduced.

The website of your company was made user friendly by enabling screen reader access for persons with disabilities and the website is being updated regularly with news and events including Swachh Bharath activities.

RESEARCH AND DEVELOPMENT (R&D)

Your company's R&D policy lays emphasis on supporting refinery operations by providing technological inputs to meet the corporate objective of technical excellence in all aspects of refinery operations, promoting indigenous technologies for refinery processes in association with National Laboratories/ Academic institutions and developing new products and upgrade the quality of the existing petroleum products.

Formulation of Aromatic, Naphthenic and Paraffinic type Rubber Process Oils from refinery streams were carried out. Further, studies were carried out using effluent water stream as medium for growth of algae and the algae grown in effluent water was further converted to Biocrudes and studied by Hydrothermal liquefaction process.

Studies were carried out for the feasibility of using DHDS unit for Hydrotreating of VGO using commercial catalysts to ascertain whether the Hydrotreated VGO could be used as additional feed for FCC unit meeting the Gasoline sulfur requirements. In addition, the feasibility of producing Microcrystalline wax from BN Slack wax was studied using Lab de-oiling set up and based on that, a trial run was successfully conducted in the Wax plant for the production of Micro Crystalline Wax.

Your company has filed a patent on "Processing and distillation techniques for algal biocrude to produce drop-in biofuels". A paper on " Biocrude Production from Microalgae and characterization of TBP distillates of Algal biocrude blended with Petrocrude" was presented in the International Refining and Petrochemicals Conference held in Verona Italy in June 2014.

SAFETY PERFORMANCE

Safety Management System at CPCL aims at enhancing safety performance by promoting safety awareness and maintaining excellent standards for safety of people, plant and environment. Safety systems and procedures have been made mandatory for all employees and contractors including visitors. Inherent Safe Design aspects are considered in the initial stage itself and utmost importance given for strict safety compliance.

During the year, one old foam Tender has been replaced and new one put into service. As per the OISD norms, provision of automatic rim seal fire detection and protection system for large size floating roof tanks job is in progress. Radiography awareness program was conducted for employees by inviting experts from Indira Gandhi Centre for Atomic Research (IGCAR) Kalpakkam.

Onsite Emergency Mock Drills were conducted twice at Manali Refinery. Joint Director & Dy Director, Industrial Safety & Health witnessed the drills. Job Safety Analysis was carried out for all critical jobs.

Off site emergency preparedness mock drill was conducted in CBR in December 2014. NSPC audit of Chidmbaranar Oil Jetty was completed by Tamilnadu Maritime Board in October 2014 and by National Hydrographic Office in November 2014.

In recognition of your company's efforts in adhering to the best safety practices, Manali Refinery received the prestigious State Safety Award (First Prize) under Chemical Industries Category during December 2012 from the Government of Tamilnadu in November 2014. Cauvery Basin Refinery was bestowed with the Safety Appreciation Award from National Safety Council- TN Chapter for 2012 and also the Prashansa Patra for the assessment period 2010-2012 from National Safety Council, Mumbai, in October 2014.

ENVIRONMENTAL PERFORMANCE

Your Company recognizes the impact of industrial operations on environment & believes that commitment to environment protection is fundamental to the company's values which ensure sustainable development. Therefore, your company's development plan encompasses a variety of schemes towards minimizing the impact of Refining operations on Environment.

Bench scale study for treated water quality improvement and Fire water quality improvement were completed at IIT, Madras and CLRI, Chennai respectively. As part of solid waste management, new sludge pit and two bio remediation pits were completed.

In Cauvery Basin Refinery, Green House Emission Survey was conducted.

Significant initiatives taken in the area of air pollution control include the following:

* Continuous operation of Volatile Organic Compounds (VOC) Adsorption system in ETP II to reduce VOC emission.

* Continuous efforts to reduce Greenhouse Gases (GHG) emissions by energy efficiency improvement, alternate energy generation & by Leak Detection and Repair Program(LDAR)

* Real time data transfer to State Pollution Control Board from Continuous Ambient Air Quality Monitoring Stations

* Use of Low NOx Burners to reduce NOx emission from major heaters

* Finalization of advanced wastewater treatment to maximize reclamation of Refinery waste water.

* Adoption of in-situ sludge treatment for Crude oil tank bottom sludge to reduce sludge generation in tank

In recognition of the unique measures undertaken for the preservation of environment, the Cauvery Basin Refinery was awarded the Green Award for industries by TamilNadu Pollution Control Board in June 2014, for the year 2013-14.

ENERGY CONSERVATION

Your Company continues its efforts to implement various measures aimed at reducing the energy consumption and achieving energy conservation, which are expected to yield a saving to the extent of 12500 SRFT/ annum. Your company has achieved the lowest ever energy index of 63.0 MBN.

The following Energy Conservation measures were taken up in 2014-15:

* FCCU oxygen enrichment Oxygen rich stream from N202 plant was routed to FCCU resulting in stopping of one auxiliary air compressor.

* High pressure hydrogen from Diesel Hydro-Treater (DHDT) was routed to Wax HiFi resulting in stopping of hydrogen make up compressor to wax plant.

* CCR off gas was routed to OHCU/DHDT as make up gas thereby reducing hydrogen generation through Naphtha steam reforming.

* Steam trap management of entire refinery to minimize steam loss.

The details of proposals implemented for energy conservation are given in Annexure IV.

In appreciation of its energy conservation measures, your Company was awarded the second prize by Centre for High Technology (CHT) for Furnaces / Boilers insulation efficiency in the Refinery Technology Meet held at Chennai in November 2014.

QUALITY MANAGEMENT - TPM / ISO

Your company by practicing TPM carried out various improvements in energy, equipment reliability and quality. During the year, first surveillance audit was carried out for Safety, Health, Environmental and Quality Integrated Management System (SHEQ IMS). The CISF of Manali Refinery was certified for QMS 9001:2008 and it is the first in Indian Refineries to get certification on Quality Management Standard.

HUMAN RESOURCES

Your Company regards its employees as one of the key drivers of growth by providing a congenial work environment.

The total manpower of your Company as on 31st March 2015 was 1628, comprising of 744 supervisors and 884 non-supervisors (1688 as on 31st March 2014, comprising of 778 supervisors and 910 non-supervisors).

During the year, to promote cordial industrial relations climate, the Functional Management conducted 9 meetings with the Office Bearers of Union and Officers Association on various occasions. Further, 11 structured communication meetings with Office bearers of Welfare Associations were conducted. Memorandum of Settlement under section 18(1) and 2(p) of the Industrial Disputes Act 1947 on work related Allowance/facilities, Cafeteria approach and on Career Progression Policy for workmen was signed between Management and recognized union.

Further, during the year, communication meetings with the Functional Management were conducted wherein physical and financial performances of the Company were discussed. Suggestion for productivity and profitability improvements were received from the employees.

Your Company has been taking continuous effort for developing its human resources by organizing training programs for employees at all levels. During the year, 2.5 Man-days per employee for training was achieved meeting the target and in total 4120 Man-days training were provided to employees in various training programs. In order to develop the technical knowledge, the Core course Program was conducted at Refinery Engineering School of Training (RESOT) for Supervisory employees.

Training Programs on Leadership Development including Risk Management were conducted. In addition to the formal training, programmes aimed at developing the technical and non-technical skills of the employees, innovative programs on physical and mental health of the employees like yoga, meditation, etc were also conducted.

Your Company has been meticulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and differently abled persons. Out of the total manpower, there were 396 SC employees (previous year: 414) and 37 ST employees (previous year: 38) as on 31.03.2015 constituting 24.32% and 2.27% of the total manpower respectively.

The reports relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2015 is given in the Annexure - I.

Your Company is implementing the provisions of the Disabilities Act 1995 by way of 3% reservation for differently abled persons. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process.

Your Company is committed towards prevention of sexual harassment of women at workplace and takes prompt action in the event of reporting of such incidents. In this regard, an Internal Complaints Committee has been constituted to deal with sexual harassment complaints and conduct enquiries, if any. There were no complaints of sexual harassment during the year.

WELFARE OF WOMEN

Your Company firmly believes that women employees play a pivotal role in the human capital profile of the Company. As on 31.03.2015, 88 women employees are on the rolls of the Company, of whom 42 are in the Supervisory Grade and 46 are in Non supervisory Grade, constituting 5.65% of the total Supervisory employees and 5.20% of the total Non-supervisory employees respectively. International Women's Day 2015 was celebrated by the women employees of CPCL on 9th of March 2015 with the theme "Make it happen"

CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY DEVELOPMENT

Corporate Social Responsibility is one of the pivotal functions of your Company .The Company sees itself as an integral part of society and is conscious of its responsibilities towards betterment of quality of life of the communities at large.

The CSR Policy of the Company can be accessed at the website of the Company under the link http://www.cpcLco.in/corporate_information-cor_governance.htm.

The CSR&SD activities mainly focus on Health, Education, Women Empowerment, Skill Development, and Environment Protection & Renewable Sources of Energy for ensuring sustainable development of the society to which it belongs. Even though the company has incurred an average net loss during the preceding three financial years, an amount of Rs. 116.58 lakhs was spent during the year 2014-15 for various CSR&SD Projects and initiatives.

A detailed report on CSR activities as per the provisions of the Companies Act, 2013 alongwith CSR Highlights during the year are attached at Annexure - II to the report.

OCCUPATIONAL HEALTH SERVICES (OHS) CENTRE

Your Company's Occupational Health Services (OHS) Centre is dedicated to prevention of illness and injuries amongst all the employees and is well equipped with the best of the infrastructures to handle any eventuality.

All possible hazards in the work place were monitored as per the established hygiene monitoring schedule, to ensure a congenial work environment and the hazards were within the acceptable levels. The health surveillance was carried out and about 90% of the employees working in the hazardous area underwent the annual health check up. In addition, the contract workers who were to work at heights and confined spaces were screened for physical fitness before they were posted to the jobs.

Various programs were organized to promote wellness and create awareness of illness for the employees.

PUBLIC GRIEVANCES

Your Company is committed to provide prompt response to public grievances and a Grievance redressal system is in place. Details and contact number of Public Grievance Officer are displayed in the website of the Company, viz. www.cpcl.co.in. As on 31.03.2015, there were no complaints pending.

CORPORATE GOVERNANCE

In line with the provisions of Clause 49 of the Listing Agreement and DPE Guidelines on Corporate Governance, a separate section on Corporate Governance forms part of this Annual Report.

AUDIT COMMITTEE

The Composition of the Committee as on 31.3.2015 is as under:

* Mr. G.Ramaswamy Independent Director - Chairman.

* Mr. S.Krishna Prasad, Director (Finance) -Member

* Ms. Perin Devi, Government Director- Member

* Mr. Yasin Rezazadeh, Director -NICO - Member

The recommendations of the Audit Committee during the year were accepted by the Board.

Being a Government Company, the company has requested Ministry of Petroleum and Natural Gas, Government of India, to consider appointment of minimum one additional independent director immediately to comply with the quorum requirement of minimum two independent directors.

SECRETARIAL AUDIT

The Secretarial Audit Report for the year 2014-15 confirms that the company has complied with all the applicable provisions of the Companies Act 2013 and the rules made there under and other applicable acts, rules, guidelines, standards etc. except the clause relating to appointment of Independent Directors. The appointment of additional independent directors is under the consideration of Government of India.

The report, duly certified by a practising Company Secretary, is attached as Annexure - III to the Report.

Your Company being a Government Company, the selection and appointment of Directors, terms of appointment and the remuneration payable to Directors is decided by the Government of India as per the Government guidelines and not by the Board of Directors. In view thereof, the Company has not reconstituted its Remuneration Committee to include the terms provided under the Companies Act, 2013. The performance evaluation of the directors other than directors representing Naftiran Inter trade Company, one of the promoters of the company, is carried out by the Administrative Ministry (MoP&NG), Government of India as per applicable Government guidelines.

CODE OF CONDUCT

The Board of Directors of your Company has enunciated a code of conduct for the Directors and Senior Management Personnel, which has been circulated to all concerned and has also been hosted on the company's website. The code can be accessed at http://www.cpcl.co.in/code_conduct.htm. The Directors and Senior Management Personnel have affirmed compliance with the code of conduct.

RISK MANAGEMENT POLICY

To ensure alignment of Risk Management system with the corporate and operational objective and to improve upon the existing procedure, the Executive Committee of the company at its 246th Meeting held on 26.04.2011 constituted a Committee comprising of officials from various functional areas to identify the risks in the present context, prioritise them and formulate proper action plan for implementation. The Committee has formulated the Risk Management Policy.

The Action Taken Report on the Risk Management Policy for the year 2014-15 was reviewed by the Audit Committee and Board at the Meeting held on 23.05.2015.

INTERNAL FINANCIAL CONTROLS

Your Company has adequate Internal Financial Controls for ensuring the smooth conduct of its business with focus on checks and controls on systems and procedures, safeguarding the assets, prevention and detection of frauds and errors, accuracy of the accounting records and the timely preparation of reliable financial information. The Company has a separate Internal Audit department headed by a Senior Manager who directly reports to the Managing Director. The Internal Audit department comprises of officials from finance, who carry out extensive audit throughout the year.

STATUTORY AUDITORS

M/s. Chandran & Raman, Chennai and M/s S.Venkatram & Co., Chennai were appointed as Joint Statutory Auditors of the Company for the financial year 2014-2015 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs. 10 lakh (Rs. 5 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

There are no qualifications in the Statutory Auditors report dated 23.05.2015 on the annual accounts for the financial year 2014-15.

M/s. K. Suryanarayanan, Cost and Management Accountant, Chennai was appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2014-15 in respect of Petroleum and Petrochemical sector at a total remuneration of Rs. 1,70,000/- plus applicable taxes and out of pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company and Rs. 30000/- plus applicable taxes towards certification fee for compliance report in respect of activity of power generation, subject to the ratification by the shareholders in the Annual General meeting.

The cost audit for the year 2013-14 was carried out and the cost audit report was filed with the Ministry of Corporate Affairs in the prescribed form within the stipulated time period.

PUBLIC PROCUREMENT POLICY FOR MSMEs

Your company has complied with the Public Procurement Policy for MSMEs as per the directives of the Government of India. Necessary provision has been made in the tenders indicating the eligibility of MSMEs to participate in the tender. As against the target of 20% for procurement from MSMEs, the actual procurement of your Company from MSMEs during the year was 37%.

RELATED PARTY TRANSACTIONS (RPTs)

In line with the provisions of the Companies Act, 2013 and the Listing Agreement, a policy on material RPTs has been framed, which can be accessed on the website of the company under the link https://www.cpcl.co.in/InvestorCenter Grievances. Your Company has undertaken transactions with related parties during the year. These transactions are in the ordinary course of business and on arms length basis. As per the RPT Policy, approval of Audit Committee has been obtained for all RPTs. During the year, there was no material RPTs. The disclosures related to Related Party Transactions in accordance with applicable accounting standards are provided at Note-28 of the Annual Accounts.

RIGHT TO INFORMATION

The Right to Information Act, 2005 is applicable to your company. In accordance with the provisions of the RTI Act, necessary disclosures have been made in the website of the company.

During the year, 37 applications under the RTI Act were received and responded in time.

VIGILANCE

The Vigilance Department of your company continues to improve and strengthen Vigilance Mechanism by conducting periodic/surprise inspections, major inspections and systems studies focusing on areas of improvement. Training programs, and lectures on vigilance functions, procedures to be followed in procurement, contracts and execution of works were conducted to create awareness as part of capacity building and to bridge knowledge gap, if any.

Focus is maintained on leveraging of technologies as a result of which the payment of bills to vendors/ contractors is effected through ECS/EFT.

All open tenders are published also in CPCL website in order to ensure competition and transparency. In line with CVC's guidelines Notice Inviting Tenders, tender documents and details of Purchase Orders/ Contracts awarded were hosted in the CPCL website. Procurement and contracts are being initiated through "e-tendering" mode and the value of the Tenders finalized through E-tender portal is being monitored and steps for improving the performance is taken continuously.

Vigilance Awareness Week Programme was observed from 27th October to 1st November, 2014 with the theme - "Combating Corruption - Technology as Enabler". Various programmes including Interaction Meet with Contractors, Customer Meet, Lecture sessions, Essay competitions and Slogan competitions were conducted both in Manali and Nagapattinam Refinery Units.

As part of Integrity Pact implementation, major contracts above value of Rs. 5.0 crore are covered under the Pact.

OFFICIAL LANGUAGE POLICY

In compliance of Official Language Act, 1963, Official Language Rules, 1976 and orders issued by Government of India from time to time, efforts were continued during the year for increasing the progressive use of Hindi in Official work.

The Managing Director of the Company is the Chairman of the Official Language Implementation Committee, which meets every quarter to review the progress of implementation of Official Language Policy.

During the year Prabodh, Praveen and Pragya classes were conducted for the benefit of employees. 11 employees passed Hindi Examination conducted under Hindi Teaching Scheme. Employees were encouraged by paying incentives every quarter for doing work in Hindi. Four Hindi Workshops were organized for the benefit of employees.

As part of the Hindi day celebrations, Hindi Competitions were conducted and winners of the competitions were awarded prizes during the celebrations.

STATUTORY INFORMATION

* Particulars of employees drawing a remuneration of Rs. 60 lakhs or more per annum, if employed throughout the financial year or Rs.5 lakhs per month, if employed for part of the financial year, during 2014-15 as required under Section 197 of the Companies Act, 2013 and rules made there under - Nil.

* Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under the Companies Act, 2013 and the rules prescribed thereunder are given in the Annexure and form part of this Report (Annexure - IV).

* Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India is Annexed and forms part of this Report (Annexure - V)

* Management Discussion and Analysis Report as required under Clause 49 IV F of the Listing Agreement is annexed and forms part of the Report (Annexure - VI).

REPORTING UNDER SECTION 23(1)(B) OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

In line with the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 CPCL has reported to the BIFR in October 2014, due to erosion of more than 50% of peak networth over the last four financial years as on 31.03.2014.

CPCL has reported a loss of Rs. 38.99 crore for the year ended 31.03.2015. The company initiated various measures to improve the physical and financial performance during the year. The Company has achieved excellent physical performance during the year 2014-15 by registering the highest distillate yield of 72.1% and the lowest Fuel & Loss of 8.65%, as a result of various energy conservation and margin improvement measures implemented by the company. The company is also in the process of implementing a Resid Upgradation project at an approved cost of Rs. 3110 Crores, which is expected to help in boosting the bottom line of the company.

Despite excellent operational performance, the fall in networth from to Rs. 1722 Cr as on 31.03.2014 to Rs. 1655 Cr as on 31.03.2015 was mainly attributed to extraneous factors beyond the control of the company. Factors like the steep fall in Crude and Product prices from July 2014 in the international market and the consequent inventory losses significantly impacted the profitability of the Oil industry and CPCL in particular, being a standalone refining company. Considering further reduction in networth as on 31.03.2015, the company is required to report to BIFR within 60 days from the date of adoption of accounts by the shareholders of the company.

Due to the implementation of various measures to improve physical and financial performance and with the stabilisation of crude and product prices from Quarter IV of FY 2014-15, the company is expected to show positive results in FY 2015-16.

In addition to various measures taken by the company to improve the physical performance, the proposal for capital infusion by issue of preference shares to IOCL on private placement basis upto Rs. 1000 crore, approved by the Board will augment the networth of the company significantly.

DIRECTORS

Mr.L.Sabaretnam and Mr.Venkatraman Srinivasan, Independent Directors ceased to be directors on the Board of CPCL effective 16.09.2014.

Mr.T.S.Ramachandran, Director (Technical) superannuated from the services of the company effective 30.11.2014.

Mr. Gautam Roy has been appointed as Managing Director effective 14.10.2014.

Mr.U.Venkata Ramana has been appointed as Director (Technical) effective 01.12.2014.

Mr.S.Krishna Prasad has been appointed as Director (Finance) effective 09.01.2015.

Ms.Perin Devi, Director (R&V), Ministry of Petroleum and Natural Gas, Government of India has been appointed as a Director effective 12.03.2015 in place of Shri.Mohan Lal.

Mr.Alireza Zamani and Mr.Yasin Rezazadeh have been appointed as Directors representing Naftiran Intertrade Company Limited, one of the promoters of the Company effective 23.03.2015 in place of Mr.M.H.Ghodsi and Mr.A.Azmoodeh respectively.

The Company has received a Certificate of Independence from Mr.G.Ramaswamy, Independent Director confirming that he meets the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Since the company has only one independent director, a separate meeting of Independent Directors could not be held as per provisions of the Companies Act, 2013 and Listing Agreement.

During the year, 9 meetings of the Board of Directors were held. The details of the meetings attended by each Director are provided in the Corporate Governance Report.

No significant and material orders were passed by the Regulators or Courts or tribunals, which impact the going concern status and companies operation in future.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has framed a whistle blower policy wherein the employees are free to report any improper activity resulting in violations of laws, rules, regulations or code of conduct by any of the employees, to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any such complaint is reviewed by the Competent Authority or Chairman of the Audit Committee. The confidentiality of those reporting violations are maintained and they are not subjected to any discriminatory practice. No employee has been denied access to the Audit Committee. The policy on Vigil Mechanism / Whistle Blower can be accessed on the Company's website at the link https://www.cpcl.co.in/investor centre grievances/.

During the year, no complaint has been received under the Whistle-Blower Policy.

DETAILS OF LOANS / INVESTMENTS / GUARANTEES

Your Company has not provided Loans / Guarantees /Security to any person, body corporate and joint ventures during the year.

EXTRACT OF ANNUAL RETURN

As required under the provisions of the Companies Act, 2013, the extract of Annual Return for the financial year ended 31st March, 2015 in prescribed form MGT-9 is attached at Annexure - VII to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed, that,

i) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended March 31, 2015, on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively.

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Board of Directors would like to express its sincere appreciation for the dedicated efforts made and valuable services rendered by the members of CPCL family.

The Board would also like to thank the Government of India, particularly the Ministry of Petroleum & Natural Gas, Other Ministries, Indian Oil Corporation Ltd, Naftiran Intertrade Company Ltd, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate and the various State Governments, regulatory and statutory authorities for their valuable guidance and support.

The Board is grateful to all its stakeholders for their continued support and confidence reposed in the Company.

Your Directors place on record their appreciation of the valuable contributions made by Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan, Mr.T.S.Ramachandran, Mr.Mohan Lal, Mr.M.H.Ghodsi and Mr.Ahmad Azmoodeh, Directors, during their tenure.

For and on behalf of the Board

Date : 03.08.2015 (B.Ashok) Place : New Delhi Chairman

Mar 31, 2014

To the Shareholders of Chennai Petroleum,

On behalf of the Board of Directors of your Company, I present the 48th Annual Report on the working of your Company, together with the Audited Statement of Accounts for the year ended March 31, 2014.

PERFORMANCE REVIEW Physical

CRUDE THRUPUT ( in TMT) 2013-14 2012-13

Imported 8777 8335

Indigenous 1847 1407

Total 10624 9742

PRODUCTION (in TMT) 2013-14 2012-13

Light Ends 2269 2034

Middle Distillates 5317 4567

Lube Base Stocks 141 134

Paraffin Wax 23 21

Heavy Ends 1967 2036

Intermediates 11 49

Other Inputs (37) (24)

Fuel & Loss 933 925

Total 10624 9742

Financial

( Rs.in Crore )

2013-14 2012-13

Gross Turnover 53923.70 46842.47

Profit before Interest,

Depreciation and Tax 626.58 (845.26)

Interest 567.97 477.90

Depreciation and Amortization 389.58 374.53

Profit/(Loss) before Tax (330.96) (1697.69)

Provision for Taxation

- Income Tax (Net) (23.42) - [Incl. pertaining to earlier years)

- Deferred Tax (3.69) 69.15

Profit/(Loss) after Tax (303.85) (1766.84)

Value Added 1283.15 (160.27)

Major Reasons for incurring Loss during the year 2013-14:

The following major factors adversely impacted the financial performance of the company in spite of better physical performance during the year 2013-14.

- Lower product cracks.

- Unprecedented depreciation of the Indian Rupee against the US Dollar and volatility in foreign exchange market resulting in exchange fluctuation loss

- Higher interest expenditure due to increased working capital requirements, inadequate internal accruals and servicing of loans on completed projects.

- Higher CST under recovery due to out of zone movement of products.

The borrowings as on 31.03.2014 was Rs.5,599.62 crore as compared to ` 5905.45 crore in the previous year.

In order to meet long term fund requirements, the Company, during January 2014 on a direct placement basis, issued 10000 numbers of 9.65% Secured Redeemable Non-Convertible Debentures (Series Â II) of Rs.10 lakh each redeemable at par for Rs.1000 crore.

Dividend

The Board of Directors of the Company has not recommended any dividend for the year 2013-14 due to loss.

Book Value

The book value per share of your Company was Rs.115.67 as on 31.03.2014 as compared to `136.07 as on 31.03.2013.

Reserves and Surplus

The Reserves and Surplus as on March 31, 2014 was Rs.1573.44 crore as compared to Rs.1877.29 crore at the end of 2012-13.

Value Addition

The value addition during the year was Rs.1283.15 crore as compared to ` (160.27) crore in the previous year.

Contribution to Ex-Chequer The details are as under:

( Rs.in Crore )

Particulars 2013-14 2012-13

Central Exchequer 4827.87 4113.74

State Exchequer 567.44 603.11

Total 5395.31 4716.85

Public Deposit Scheme

Your Company has not accepted any fresh public deposits during the year 2013-14.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.

Operational Performance

The total thruput of the Company during the year 2013-14 was 10624 TMT. The Fuel and Loss for the year was 8.78% as compared to 9.49% in the previous year.

Manali Refinery achieved the highest ever thruput of 10065 TMT as compared to the previous best of 10045 in 2010-11. Refinery III at Manali surpassed, for the first time, the expanded design capacity of 4.0 MMTPA during the year. Once Thru Hydro Cracker Unit (OHCU) achieved the highest ever thruput of 2007 TMT, as against the previous best of 1996 TMT in 2010-11. Fluidised Catalytic Cracking Unit (FCCU) achieved the highest ever thruput of 1065 TMT, as against the previous best of 1006 TMT in 2010-11. The energy index of Manali Refinery was lowest at 62.5 MBN as against the previous best of 65.8 MBN in 2012-13. HSD and propylene production in Manali Refinery achieved the highest ever crossing 4 MMTPA and 35.8 TMT respectively.

Manali Refinery increased the Spot Crude Oil Basket from 37 to 50 numbers, thereby increasing the chances of selection of crudes with higher intrinsic value. Further Manali refinery processed three new crudes viz., Kikeh from Malaysia and Agbami and Okwuibome from Nigeria. By processing these new crudes, the Company realizes the benefit of adding new crudes to the basket.

During the year, Cauvery Basin Refinery, processed a new Crude Oil, Agbami for the first time. CBR achieved the highest ever Crude coastal receipt parcel size of 44.4 TMT in March 2014 through Marg Karaikkal Port, as compared to the previous highest shipment of 42 TMT.CBR is being operated at maximum power import mode in order to reduce cost of power and utilities.

MoU PERFORMANCE

Your Company signed an MoU incorporating performance parameters with Indian Oil Corporation Limited, the holding Company, for the year 2013-14, as per the guidelines issued by the Department of Public Enterprises (DPE).

MARKETING

Indian Oil Corporation Limited, the holding Company, continues to market major portion of the fuel products of your Company.

Some of the specialty products are being directly marketed by your Company. The direct sales achieved during 2013-14 as compared to previous year are given below:

(Qty. in TMT)

S. No. Product 2013-14 2012-13

1 Naphtha 208.97 207.5

2 Sulphur 50.38 45.9

3 PBFS 7.64 7.04

4 MEKFS 8.19 7.53

5 Paraffin wax 23.01 20.90

6 Propylene 35.64 27.89

About 10 new customers were registered during the year for supply of Sulphur, Hexane and Propane.

PROJECTS

Your Company lays emphasis on timely completion of all projects.

Completed Projects

Fire water storage tanks:

Your company constructed and commissioned two tanks with a capacity of 13,000m3 each in June ''13, for storing fire water along with associated fire water pumps.

VOC Project:

Your company constructed and commissioned the Volatile Organic Compound (VOC) absorption facility with 3 nos. of activated carbon filters at Effluent Treatment Plant -II.

Additional slop Tank

Your company constructed a new Storage Tank of capacity 10,000 KL, to handle slop more effectively.

MS-Naphtha Tanks:

Your company constructed one Naphtha and one MS tank, each of capacity 10,000 KL to accommodate increased production of MS/Naphtha.

Projects Under Implementation Manali Refinery

Mounded Bullet Storage

As a risk mitigation measure and in line with the norms prescribed by the Oil Industry Safety Directorate (OISD), your Company is implementing a Mounded Bullet Storage facility for LPG and Petrochemical products at an estimated cost of Rs.279 Crore. The project was taken up in April 2013 and mechanical completion is expected by end of 2014.

Resid Up gradation Project

A Resid Up gradation project aimed at increasing the distillate yield by about 7 % by processing increased percentage of High Sulphur Crude is being implemented at Manali Refinery at an estimated cost of Rs.3110.36 crore. The project comprises installation of Delayed Coker Unit (2.2 MMTPA), revamp of existing Hydro Cracker Unit from 1.85 MMTPA to 2.25 MMTPA and other associated facilities. The construction work has commenced at site. This project is scheduled for completion by December 2015.

New Crude Oil Pipeline

A new 42" Crude Oil Pipeline with enhanced safety features is planned from Chennai Port to Manali Refinery at an estimated cost of Rs.257 Crore as a replacement for existing old pipeline. The new pipeline is aligned along the berm of Ennore Manali Road Improvement Project of NHAI. Coastal Regulatory Zone (CRZ) clearance was accorded for the pipeline in January 2014. The pipeline alignment clearance with NHAI is taken up. The project is scheduled for completion by July 2015.

Cauvery Basin Refinery

- Two Crude oil storage tanks of 10500 KL each at an estimated cost of Rs.25crore is under construction to enhance the crude storage capacity.

- A product line from CBR to Trichy is under implementation to improve evacuation of products from CBR.

INITIATIVES TAKEN TO ACHIEVE OPERATIONAL EXCELLENCE

Your Company has taken following initiatives to achieve improvement in both Physical and Financial

Performances.:

- Implementation of various energy conservation measures resulting in a saving of Rs.36.5 crore.

- Implementation of various value addition measures like maximization of CCR feed and butene, resulting in a saving of about Rs.16.90 crore.

- Increased import of power from grid to 5 MW to reduce energy consumption and overall cost of power.

- Implementation of measures to reduce the repairs and maintenance cost, overtime cost, manpower cost and interest cost

- Improving the reliability of the Plant.

- Reducing the crude inventory level to an average of 23 days.

- Increasing Distillate yield.

INDIAN ADDITIVES LIMITED

Indian Additives Limited (IAL), the joint venture between your Company and Chevron Chemical Company (now Chevron Oronite Company) , formed in the year 1989 for manufacturing Lube Additives, achieved a turnover of Rs.589.52 Crore during the year 2013-14, as against Rs.537.72 Crore in the previous year. The Profit after Tax for 2013-14 is Rs.24.95 Crore as against Rs.36.68 Crore in the previous year.

INFORMATION TECHNOLOGY

Your Company is marching ahead with the innovative use of Information Technology for enabling speedy decision making, improving operational efficiency and effective knowledge management. The SAP Payroll Module and Employee Enterprise Portal system were implemented during the year.

In line with the Information Security Policy and to strengthen the IT security, USB blocking software that enables blocking of USB drive in all PCs was successfully implemented.

Your Company introduced Web-based attendance program and On-line Kaizen registration system.

The SAP based Weighbridge software for the newly commissioned Weighbridge, was internally developed and implemented.

Based on the directives from the Government of India, your company has taken steps for migrating from Internet Protocol Version 4 (IPV4) to Internet Protocol Version 6 (IPV6), in a phased manner with a target date of completion by end December 2017.

RESEARCH AND DEVELOPMENT (R&D)

Your company''s R&D is committed to provide support to refinery operations by providing technological inputs to achieve technical excellence in all aspects of refinery operations, promote indigenous technology for refinery processes and develop new products and upgrade the quality of the existing products.

Your company has constituted a Research Advisory Committee to formulate, evaluate and monitor the R&D projects.

During the year, a new Micro-reactor for evaluation of catalyst and feedstock for Once through Hydro

Cracker Unit was successfully commissioned.

Your company''s R&D successfully carried out feasibility study for production of Food / Polymer Grade Hexane, using Hydro-processing route in the existing Pre-de-sulphuriser Unit and Pilot Plant studies on the use of co-solvents for NMP extraction of Lube distillates.

Your company''s R&D also initiated a collaborative research program on "Algae to Biofuels" with M/s.Aban Infrastructure Pvt. Ltd. Initial studies were carried out with Microalgae from Saline and Fresh water sources and the study was presented at International Refining and Petrochemicals Conference 2014. An application for patenting of biocrude production from Microalgae was also submitted.

A demonstration unit with large raceway pond and Pilot plant for Hydrothermal Liquefaction has been planned and a proposal is submitted to CHT for evaluation by Research Advisory Committee (RAC) and funding.

Your company''s R&D has a collaborative project with Indian Institute of Petroleum for developing strategies for the production of Low Sulfur Furnace oil, funded by Centre for High Technology (CHT) and monitored by Scientific Advisory Committee(SAC). The objective of the project is to reduce the sulfur in Furnace Oil to 0.5% level in line with MARPOL Specification on Marine Fuels.

SAFETY PERFORMANCE

Your Company keeps a constant vigil on its safety management practices and sets very high safety standards to ensure accident free man days in its work place. Initiatives were taken to augment safety training and safety briefings for further bolstering the safety culture.

Your company has installed and commissioned new High Volume Long Range (HVLR) monitors for fighting fire, if any, on tall structures and storage tanks both in Manali and Cauvery Basin Refinery.

Further, Hydrocarbon Gas Detectors were installed and commissioned in storage tank farm in Manali and CBR for early detection of hydro carbon leaks. Off-site Mock Drill exercise was conducted at Manali Industrial area in coordination with M/s Tamilnadu Petroproducts Limited (TPL) in November 2013 under the guidance of National Disaster Management Authority (NDMA). Similarly, Offsite mock drill was conducted in CBR in coordination with IOCL- Chennai, Bangalore, Madurai & Trichy (CBMT) in January 2014.

External Safety Audit at Manali refinery was conducted by OISD team in August 2013 and the implementation of the recommendations is taken up on priority. In CBR, Seventh Surprise Safety Check by OISD was carried out in February 2014.

Your company has achieved the longest spell of 138 incident free days and the Man - hour lost due to accidents as a percentage of total man-hours was lower at 0.018 %.

In recognition of the Company''s efforts in the areas of safety management, Greentech Foundation, along with Indian Institute of Corporate Affairs, Ministry of Corporate Affairs, Government of India awarded the company, the Greentech Occupational Health Safety Award 2013 in Silver category for Petroleum Refining Sector.

ENVIRONMENTAL PERFORMANCE

Your Company is constantly implementing various environmental protection measures to ensure that there are no adverse impact on the neighbourhood and the society as a result of its operations.

Significant environmental protection measures undertaken in Manali refinery include:

- Preparation of Emergency Response and Disaster Management plan in consultation with District Authorities and certified by Disaster Management Institute, Bhopal and submission of the document to Petroleum & Natural Gas Regulatory Board (PNGRB).

- Installation of Volatile Organic Compounds (VOC) Adsorption System in Effluent Treatment Plant-II (ETP) to reduce VOC emission.

- Manual analysis of all 12 parameters of ambient air quality as per revised National Ambient Air Quality Standards 2009.

- Installation of Rain Water Harvesting facility in 15 buildings.

Significant environmental protection measures undertaken in Cauvery Basin Refinery include:

- Provision of LED lights at housing complex and Refinery

- Completion of Green house gas emissions and removal survey for the year 2011-12 as per ISO 14064-1:2006 and certification from M/s BVC.

- Completion of Rainwater harvesting in 3 buildings.

In recognition of the efforts undertaken by the company in the areas of environmental protection, your company has been awarded the Greentech Environment Award - Silver category in Petroleum refining sector. The Cauvery Basin Refinery of your company has been awarded the Green Award for Industries by Tamilnadu Pollution Control Board for undertaking unique measures for preservation of environment.

ENERGY CONSERVATION

Your Company continues its efforts to implement various measures aimed at reducing the energy consumption and achieving energy conservation. The company has achieved the lowest ever energy index of 63.84 MBN.

Your company implemented the following encon measures resulting in a saving of Rs.36.50 crore and a saving in Fuel and Loss to the extent of 9840 MT of fuel oil equivalent for the year 2013-14.

- Recovery of Diesel Hydrotreater (DHDT) off-gas Hydrogen

- Operation of low pressure DHDT

- Implementation of recommendations of National Thermal Power Corporation (NTPC) in Cogen Boiler-3.

- OHCU Hydrocom Step-less capacity control of Make-up gas compressor.

- Steam trap management of Refinery III

The details of proposals being implemented for energy conservation are given in Annexure I. In appreciation of its energy conservation measures, your company was awarded the following prizes by Centre for High Technology (CHT) at the Refinery Technology Meet held at Kochi:-

- Special prize for best reduction in Steam leaks for the year 2013.

- Second prize for Furnace/Boiler efficiency for the year 2012.

- Special prize to CBR for Insulation effectiveness of Furnace for year 2012.

PROCESS IMPROVEMENTS

Your Company has successfully implemented the oxygen enrichment technology in the Sulphur Recovery Unit (Plant 78) which will enhance the capacity of SRU.

In view of the above achievement, your company, along with M/s.Engineers India Ltd., was jointly awarded a Special Commendation Award for "Innovator of the Year Team" in recognition of outstanding achievement in conceptualization, development and successful commercialization of Oxy Enrich process technology for capacity enhancement for Sulphur Recovery units, by PETROFED .

In addition, feed rate of Continuous Catalytic Reforming Unit (CCR) was increased by about 10% from 55 to 60 m3/hr during the year resulting in highest ever Feed processing of 358.8 TMT in CCR Unit.

QUALITY MANAGEMENT Â TPM / ISO

Your company has taken several efforts to internalize the TPM culture across various functions and departments to ensure sustainable improvement in the functioning of the nine pillars of TPM. During the year, recertification audit was carried out for Safety, Health, Environmental and Quality, Integrated Management System (SHEQ IMS). During the year, Bureau Veritas Certification India Pvt. Ltd carried out ISO 14064 Green House Gas (GHG) emission verification for 2012-13 for Manali and CBR.

HUMAN RESOURCES

Your Company regards its employees as one of the key drivers of growth by providing a congenial work environment.

The total manpower of your Company as on 31st March 2014 was 1688, comprising of 778 supervisors and 910 non-supervisors (1705 as on 31st March 2013, comprising of 805 supervisors and 900 non-supervisors).

During the year, two Communication meetings with Officers and Four Shop level communication meetings were conducted by Managing Director and Functional Directors wherein current business scenario was discussed. In addition, three communication meetings with the collectives and eight structured meetings with the Office Bearers of Welfare Associations were conducted.

Your company takes concerted efforts in Training and Development of the employees. During the year 4695 man days of training was imparted to all its employees. Skill Development Programmes covering 250 manhours have also been conducted for the benefit of the employees. During the year, training programme on business risk management covering 224 man hours was organized. In addition, innovative programs aimed towards developing the physical as well as the mental health of the employees like yoga and meditation were organized. A two days course on "Refinery Economics" was conducted for the Office Bearers and Committee members of the collectives, to explain the nuances of economics of Refinery operations.

Your Company has been scrupulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and differently abled persons. Out of the total manpower, there were 414 SC employees (previous year: 420) and 38 ST employees (previous year: 38) as on 31.03.2014 constituting 24.53% and 2.25% of the total manpower respectively. The reports relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2014 is given in the Annexure-II.

Your Company is implementing the provisions of the Disabilities Act 1995 by way of 3% reservation for differently abled persons. In addition, various concessions and relaxations are being extended to physically challenged persons in the recruitment process.

WELFARE OF WOMEN

Your Company endeavors to provide equal opportunity for women in employment. As on 31.03.2014, 88 women employees were on the rolls of the Company, of whom 42 are in the Supervisory Grade and 46 are in Non supervisory Grade, constituting 5.39% of the total Supervisory employees and 5.05% of the total Non-supervisory employees. International Women''s Day was celebrated in March 2014 on the theme "Inspiring change".

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company firmly believes in the process of inclusive development and accordingly aligns its organizational objectives and business goals with the social objectives.

Being a responsible corporate citizen, your company implemented a number of Corporate Social Responsibility (CSR) activities, benefitting many stakeholders. The focus of CSR activities is aimed at skill development, education, health and hygiene facilities and women empowerment. During the year an amount of `101 lakhs was spent on various CSR activities for the benefit of community around your Refineries at Manali and CBR, Nagapattinam.

Major CSR activities carried out during the year include the following:

- Running four Community Health Centers serving 50,000 people.

- Conducted two General Medical Camps in association with various Hospitals.

- Conducted one Comprehensive Eye Care Camp including treatment for cataract.

- Provision of assistance for implementation of Government sponsored National Pulse Polio Programme.

- Distribution of Merit Scholarships to the students of Rural Educational Institutions.

- Sponsorship of "Home Management for Visually Challenged Students" program.

- Management of a Creche through Women''s India Association for the benefit of working women.

- Installation of One 10KW grid connected Solar Photo Voltaic system at Polytechnic College, Manali.

- Sponsorship of sports meet for promoting sports among the school students

- Provision of toilet and drinking water facilities for school students and for public

- Provision of placement linked computer training program for 100 beneficiaries, in association with M/s ITCOT, Chennai at Computer Sciences Corporation (CSC) Nagapattinam at a cost of Rs.10 Lakh. Of the 100 youths trained, around 72 nos of youths have been gainfully employed.

- Mobile Science Lab Education Program for the schools in Nagapattinam District conducted in association with M/s. Agastya International Foundation, Bangalore at a cost of Rs.4.00 lakhs benefitting around 15,000 school students.

PUBLIC PROCUREMENT POLICY FOR MSMEs

Your company is making all efforts to comply with the Public Procurement Policy for MSMEs as per the directives of the Government of India and necessary steps have been initiated in this regard.

OCCUPATIONAL HEALTH SERVICES (OHS) CENTRE

Your Company gives extra impetus for achieving high standards of excellence in health care and has an Occupational Health Services (OHS) Centre equipped with latest equipments and the centre is manned by highly qualified professionals. During the year, a lecture session was arranged on the topic "Pain and Posture" for the benefit of the employees and also to educate the employees on the ill effects of bad postures.

In order to help the employees to overcome their stress levels, a program on "Ultimate in Stress Management" was organized. A study on the effect of exposure to organic solvents in the refinery work environment was carried out. Screening for Osteoporosis and general well being was conducted at CBR, for employees and their spouses.

In consideration of the pioneering efforts in the areas of health and safety, your company was bestowed with Golden Peacock Award for Occupational Health and Safety for the year 2013 by Institute of Directors (IOD), New Delhi.

PUBLIC GRIEVANCES

Your Company accords top priority to the timely redressal of public grievances and a Grievance redressal system is in place. Details and contact number of Public Grievance Officer are displayed in the website of the Company, viz. www.cpcl.co.in. As on 31.03.2014, there were no complaints pending.

RISK MANAGEMENT

A detailed and comprehensive Risk Management Policy addressing the various perceived risks in the sustained operations of the company is in place. The policy and the action taken report for the year 2013-14 was reviewed by the Board of Directors of the Company.

CORPORATE GOVERNANCE

Your Company firmly believes in doing the right things and all things right and adheres to the best practices in matters of transparency, accountability and disclosures.

Your Company complied with all the mandatory requirements of Corporate Governance Guidelines issued by Securities & Exchange Board of India and Department of Public Enterprises (DPE), Government of India for the year 2013-14, except the clause relating to the appointment of Independent Directors. A separate section on Corporate Governance forms part of this Annual Report.

Your Company also complies with the Voluntary Guidelines on Corporate Governance issued by Ministry of Corporate Affairs, Government of India in December 2009, as far as practicable.

SECRETARIAL AUDIT

In line with the provisions of the Voluntary Guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, your Company carried out Secretarial Audit for the year 2013-14 from M/s. S.Sandeep & Associates, Company Secretaries and their report forms part of the Annual Report. The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, SEBI Guidelines, rules etc except with the clause relating to appointment of Independent Directors. The appointment of additional Independent Directors is under the consideration of Government of India.

RIGHT TO INFORMATION

The Right to Information Act, 2005 is applicable to your company. In accordance with the provisions of the RTI Act, necessary disclosures have been made in the website of the company. During the year, 28 applications under the RTI Act were received and responded in time.

VIGILANCE

The vigilance department of your Company plays a proactive role in establishing a culture of integrity, probity, transparency, fairness and accountability in the organisation by conducting periodic/surprise inspections, major inspections and systems studies focusing on areas of improvement.

In order to create awareness as part of capacity building and to bridge knowledge gap, if any, training programs, and lectures on vigilance functions, procedures to be followed in procurement, contracts and execution of works were conducted.

The Vigilance Department firmly believes in leveraging of technologies as a result of which the payment of bills to vendors/ contractors effected through ECS/EFT touched a phenomenal 99%.

As a step towards e-governance, all open tenders are published in CPCL website in order to ensure competition and transparency. In line with CVC''s guidelines, Notice Inviting Tenders, tender documents and details of Purchase Orders/Contracts awarded are hosted in the CPCL website. Procurement and contracts are being initiated through "e-tendering" mode.

During the year, the Vigilance Awareness Week program was conducted from 28th October to 2nd November, 2013. As part of the program, Interaction meetings with Vendors, Contractors, Customers and other Stakeholders, Lecture sessions for employees, Essay and Slogan Competitions for employees and school students were held

INTEGRITY PACT

In order to improve transparency in business dealings, your Company implemented the Integrity Pact. 24 major contracts were covered under the Integrity Pact and the threshold limit for entering into Integrity Pact was revised from Rs.10 Crore to Rs. 5.00 Crore.

OFFICIAL LANGUAGE POLICY

Your Company is sincerely implementing the Official Language Policy of the Government of India and steps were taken for the progressive use of Hindi in official communication.

Your Company received the prestigious Rajbhasha Shield (Third prize) 2013 instituted by Town Official Language Implementation Committee, Chennai under the category of Public Sector Undertaking (Big) in Chennai.

STATUTORY INFORMATION

- Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

- Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under Section 217(1) (e) of the Companies Act, 1956 and the rules prescribed there under, i.e., the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-I).

- Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India is Annexed and forms part of this Report (Please see Annexure-III).

- Management Discussion and Analysis Report as required under Clause 49 IV F of the Listing Agreement is annexed and forms part of the Report (Annexure IV).

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors'' Responsibility Statement, it is hereby confirmed, that,

i) in the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended March 31, 2014, on a going concern basis; and

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

STATUTORY AUDITORS

M/s. Chandran & Raman, Chennai and M/s S.Venkatram & Co., Chennai have been appointed as Joint Statutory Auditors of the Company for the financial year 2013-2014 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of ` 10 lakh ( Rs.5 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

Mr. K. Suryanarayanan, Cost and Management Accountant, Chennai was appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company in respect of Petroleum and Petrochemical sector at a total remuneration of `1,70,000/- p.a. plus applicable taxes and out of pocket expenses, if any, to conduct the audit of Cost Accounts maintained by the Company and Rs.30000/ p.a plus applicable taxes towards certification fee for compliance report in respect of activity of power generation.

REPORTING UNDER SECTION 23(1)(b) OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

In terms of the requirements under Section 23(1) (b) of the Sick Industrial Companies (Special Provisions) Act 1985, ("SICA"), a report of the Board of Directors with regard to accumulated loss being in excess of 50% of the Company''s peak net worth during the immediately preceding four financial years along with its causes and measures being taken is submitted.

The peak net worth of CPCL during the last four years was Rs. 3793 crores. If the net worth is reduced to less than 50% of such peak net worth, i.e. Rs. 1897 Crore, a report to Board for Industrial and Financial Reconstruction (BIFR) on the fact of such erosion is required to be made. The loss of CPCL for the Financial Year ending 31st March, 2014 was Rs.304 crore and consequently the net worth reduced to Rs. 1722 crore, which has resulted in erosion of more than 50% of its peak net worth over the last four Financial Years. Considering the net worth of Rs.1722 crore as on 31.03.2014, the fact of such erosi in is to be reported to the BIFR within a period of 60 days from the date of adoption of accounts by the shareholders of the company.

REASONS FOR LOSSES

The following major factors adversely impacted the financial performance of the company during the years 2012-13 and 2013-14

- High Volatility in crude and product prices resulting in lower effective cracks.

- Unprecedented depreciation of the Indian Rupee against the US Dollar and volatility in foreign exchange market resulting in exchange fluctuation loss.

- Higher interest expenditure due to increased working capital requirements, inadequate internal accruals and servicing of loans on completed projects.

- Lower crude thruput during the year 2012-13 due to revamp shutdown of Refinery II, unplanned shutdown of Refinery III for packing replacement and reduced distillate yields.

- Higher CST under recovery.

MEASURES BEING TAKEN TO IMPROVE THE OPERATIONAL AND FINANCIAL PERFORMANCE

The Company has initiated following measures to achieve improvement in both Physical and Financial Performance:

Operational improvements and efficiencies:

Various margin improvement measures initiated by the company in the areas of energy conservation and consequent reduction in fuel & loss, value addition measures and optimization of crude mix are expected to improve the profitability.

Implementation of Resid Up gradation project:

The Residue Up gradation Project being implemented at a capital outlay of Rs. 3110 Crore is expected to significantly improve the Gross Refining Margins due to the conversion of bottoms into middle distillates. Keeping in view the huge requirement of funds for the project, the company has approached Oil Industry Development Board (OIDB) to sanction 50% of the outlay as loan for the project which is expected to bring down the overall financing cost of the project.

Focus on Cost containment:

The company has identified specific cost containment measures in the areas of repairs & maintenance, staff cost and also optimization of utilities cost. These initiatives would yield results in the coming years. The company has requested Indian Oil Corporation Limited to reduce the credit period for payment towards supply of products so as to facilitate the reduction in working capital requirement and savings in interest cost.

Capital Infusion:

The company is exploring various options of infusion of capital which will augment the net worth of the company and reduce the interest cost.

DIRECTORS

Ms.D.Lilly, Director (Finance) ceased to be a Director on the Board of CPCL effective 31.07.2013 on attaining the age of superannuation. Mr.A.S.Basu, Managing Director was holding the additional charge of the post of Director (Finance) till 31.05.2014.

Mr. Mohan Lal, Director (R&A), Ministry of Petroleum and Natural Gas has been appointed as a Director on the Board of CPCL effective 21.08.2013 in place of Mr.P.K.Singh, who ceased to be a Director effective 11.09.2012.

Prof.M.S.Ananth, Independent Director, ceased to be a Director on the Board of CPCL effective 07.11.2013.

Mr.G.Ramaswamy, Practicing Chartered Accountant, has been appointed as an Independent Director on the Board of CPCL effective 07.11.2013 in place of Mr.M.S.Ananth.

Mr.A.S.Basu, Managing Director ceased to be a Director on the Board of CPCL effective 31.05.2014 on attaining the age of superannuation. Mr.S.Venkataramana, Director (Operations) has been holding the additional charge of the post of Managing Director.

Mr.R.S.Butola, Chairman, ceased to be a director on the Board of CPCL effective 31.05.2014.

Mr.Sanjiv Singh, Director (Refineries), Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL effective 03.07.2014 in place of Mr.Rajkumar Ghosh, who ceased to be director effective 30.06.2014.

Your Directors place on record their appreciation of the valuable contributions made by Ms.D.Lilly, Prof.M.S.Ananth, Mr.A.S.Basu, Mr.R.S.Butola and Mr.Rajkumar Ghosh during their tenure.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude for the valuable guidance and cooperation and support received from the Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Naftiran Intertrade Company Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government of Tamil Nadu, Central Vigilance Commission, Financial Institutions and commercial banks.

Your Directors are also thankful to the suggestions received from the Statutory Auditors and the Comptroller & Auditor General of India.

Your Directors specially thank all the shareholders for their support.

Your Directors sincerely acknowledge the commitment and perseverance of all the employees

For and on behalf of the Board of Directors

Date : 16.07.2014 S. VENKATARAMANA

Place : Chennai Managing Director (i/c)

Mar 31, 2013

To the Shareholders of Chennai Petroleum,

The behalf of the Board of Directors of your Company, it is indeed my privilege to present the 46th Annual Report on the performance of your Company, together with the Audited Statement of Accounts for the year ended March 31, 2012

PERFORMANCE REVIEW

Significant Highlights

- Highest ever turnover of Rs. 45365 Crore achieved.

- Total Thruput of 10557 TMT achieved.

- Carbon Foot Printing exercise was completed for Manali and CBR refineries as part of Sustainable development activities.

- Achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF for Manali Refinery and 108.67 MBN for Cauvery Basin Refinery.

- Manali Refinery successfully changed the solvent from Sulfolane to NMP for production of hexane to meet the stringent product quality.

- Received Income Tax refund of Rs. 276 Crore based on the favourable order given by CIT (Appeals)for Sec.80 IB claim on Refinery III profits for Assessment Year 2008-09.

- DHDT Unit commissioned successfully in Manali.

- Installation of Oxygen enrichment facility jointly developed with EIL in SRU, Train B resulting in enhanced OHCU thruput.

- 20" Crude oil interlink pipeline between Chidambaranar Oil Jetty (COJ) and Marg Karaikkal Port successfully commissioned in February 2012.

- Cauvery Basin Refinery has received the "Excellence in Consistent TPM Commitment Award" for the year 2011 from Japan Institute of Plant Maintenance (JIPM).

- Cauvery Basin Refinery has received the prestigious National Safety Award for 2009 instituted by the Director General, Factory Advice Services and Labour Institutes, Ministry of Labour & Employment, Government of India.

- Won the PSE Excellence Awards instituted by the Department of Public Enterprises and Indian Chamber of Commerce for the year 2011 for "Environmental Excellence and Sustainability Development" and Good Corporate Governance.

- Won the CII Excellence in Water Management Award for the year 2011.

Physical

CRUDE THRUPUT (in TMT) 2011-12 2010-11

Imported 9050.8 9105.0

Indigenous 1505.8 1643.0

Total 10556.6 10748.0

PRODUCTION (in TMT) 2011-12 2010-11

Light Ends 2270.5 2279.0

Middle Distillates 5148.9 5141.0

Heavy Ends 2008.9 2177.0

Lube Base Stocks 178.3 186.0

Paraffin Wax 24.0 27.0

Others (Intermediaries) (87.6) 25.0

Other Inputs (87.0)

Fuel & Loss 1013.6 996.0

Total 10556.6 10748.0

Financial (Rs. in Crore)

2011-12 2010-11

Gross Turnover 45384.91 38128.26

Profit before Interest, Depreciation & Tax 456.58 1332.44

Interest 249.38 254.45

Depreciation and Amortization 365.42 314.47

Profit before Tax (158.22) 763.52

Provision for Taxation

- Income Tax (Net) [Incl. Pertaining to earlier years) (253.51) 223.48

- Deferred Tax 33.47 28.52

Profit after Tax 61.83 511.52

Value Added 969.03 1748.65

Dividend

The Board of Directors of the Company is pleased to recommend a dividend of 20% of the Paid-up Share Capital of the Company representing Rs.2/- per equity share for the year 2011-12.

Book Value

The book value per share of your Company has increased from Rs. 252.90 in the year 2010-2011 to Rs. 254.72 in the year 2011-2012.

Reserves and Suplus

The Reserves and Surplus increased from Rs. 3616.92 crore as on 31.03.2011 to Rs. 3644.13 crore as on March 31, 2012.

Value Addition

The value addition during the year is Rs.969.03 crore as compared to Rs. 1748.65 crore in the previous year.

The Profit before Tax during the year 2011-12 was mainly due to:

- Lower refining margins on account of high volatility in the crude and product prices leading to depressed cracks in the wake of the economic crisis in the European Union & economic slowdown in the US.

- Unprecedented depreciation of the Indian Rupee against the US Dollar and extreme volatility in Foreign Exchange Market resulting in exchange fluctuation losses.

- Additional freight incurred during the year due to transportation of crude in smaller Afra max vessels instead of Suez Max vessels on account of infrastructural constraints at Chennai Port Trust and production disturbances during cyclone Thane.

Contribution to Ex-Chequer

During the year, your Company has paid a sum of Rs. 5784.82 crore to the ex-chequer as compared to Rs. 6837.32 crore in the previous year.

Public Deposit Scheme

Your Company has not accepted any fresh public deposits during the year 2011-12.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.

Manali Refinery - Salient features of Operations

- Manali Refinery achieved a total Crude thruput of 9.945 MMT as compared to 10.045 MMT in the previous year.

- Achieved the highest distillate yield of 70.3 wt%.

- Achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF by maximising thruput in secondary units.

- Maximized the production of food grade hexane by additional 40% through process improvements.

- Completed health checkup for "Excellence in Consistent TPM Commitment Award" for 2011.

- Highest ever production of the following products :

(Figures in TMT)

Product 2011-12 Previous Best

High Speed Diesel 3911 3863 (2010-11)

Motor Spirit 1020 860.0 (2010-11)

- Procured three new low sulfur crudes viz., Espoir from Ivory Coast, Palanca Blend from Angola and Essider from Libya.

- One new Crude was added to the basket: viz., Okwori, new Low Sulfur Trial crude from Nigeria.

Cauvery Basin Refinery (CBR) - Salient features of Operations

- Processed 611 TMT of Crude as compared to 703.3 TMT in the previous year.

- Achieved the highest ever distillate yield of 86.64 wt % on crude in 2011-12 (Previous best :

83.2 wt % in 2010-11).

- Two nos. of Continuous Ambient Air Quality Monitoring stations and one online Stack Monitoring station commissioned for better monitoring and control of various environmental parameters.

- Introduced new product namely High Flash High Speed Diesel.

- Successfully conducted Green House Gas Emission Survey.

MoU PERFORMANCE

Your Company signed an MoU with Indian Oil Corporation Limited, the holding Company for the year 2011-12, as per the guidelines issued by the Department of Public Enterprises (DPE). The provisional rating for the year 2011-12 is "1.43".

MARKETING

Majority of the products of your Company like MS, HSD, LPG, SKO, etc. are marketed by Indian Oil Corporation Limited, the holding Company.

CPCL directly markets some of the Speciality products and highest direct sales achieved during 2011-12 as compared to previous year are given below :

(Quantity in TMT)

S. No. Product 2010-11 2011-12

1 Naphtha 211.66 218.51

2 Sulphur 52.02 56.97

3 Propane 2.06 2.14

4 PBFS 7.14 7.53

During the year, seven Customer Meets were conducted at various locations for Wax, Sulphur and other direct customers and 19 new customers were registered for the supply of Sulphur, Hexane, Propane and Propylene.

PROJECTS

Your Company made an investment of Rs. 490.18 crore on various projects during 2011-12 (cumulative expenditure of Rs.2640.23 crore upto 2011-12), out of the approved outlay of Rs. 3575 Crore for the XI Plan (2007-2012).

Completed Projects

Euro-IVProject - DHDT Units:

To produce MS/HSD meeting Euro-IV specifications for Chennai and Bangalore and Euro-III equivalent specifications for the rest of the locations, your company has undertaken Auto fuel Quality Upgradation Project at an estimated cost of Rs. 2615.69 crore in Manali Refinery as per the Auto Fuel Policy of the Government of India.

The Diesel Hydro treater unit (DHDT) with a capacity of 1.8 MMTPA was commissioned in May 2011.

CBR 20" Crude line

Cauvery Basin Refinery of your Company has successfully commissioned a 20" interlink crude oil pipeline between Karaikkal Port and CPCL-CBR''s Chidambaranar Oil Jetty at a cost of Rs.10.86 Crore. This project will enable CBR to receive crude oil in higher parcel sizes resulting in reduction in the transportation and handling cost of crude and the flexibility to utilize other crude oil tankers of larger sizes.

Projects Under Implementation :

Euro-IV Project:

The utilities and off-site facilities of Euro-IV auto fuel quality upgradation project are in various stages of execution. A new Hydrogen Generation Unit to enhance the existing Hydrogen Generation capacity is under commissioning stage. The revamp of the Effluent Treatment Plant-II is in the final stage of mechanical completion and is expected to be commissioned in October 2012.

Revamp of existing CDU/VDU-II from 3.7to4.3MMTPA

A project to enhance the unit capacity from existing 3.7 MMTPA to 4.3 MMTPA is under implementation at a cost of Rs. 333.99 Crore. This project is expected to be completed during the second quarter of the financial year 2012-13.

Resid Upgradation Project

For improving the distillate yield of the Manali refinery and to process increased level of high Sulphur bearing Crudes, approval was accorded for implementation of a Resid Upgradation Project at an estimated cost of Rs. 3110.36 Crores. This project is scheduled to be completed within 33 months from the date of Environmental Clearance, which is delayed mainly due to non lifting of ban imposed by MoE&F on new investments in the Manali Industrial Region.

New Crude Oil Pipeline

To overcome the risks associated with the transportation of Crude Oil through the existing 30" Crude Oil Pipeline from Chennai Port to Manali Refinery your Company is implementing a new 42" Crude Oil Pipeline Project at a cost of Rs. 126 Crore. All engineering activities have been completed along the route of the proposed port connectivity road project, Coastal Regulatory Zone clearance is awaited for this project 2 X 10.5 TKL Crude Oil Storage tanks at CBR

A project for construction of two Crude oil storage tanks of 10500 KL each is being implemented to have better operational flexibility in Crude receipt and storage.

New Projects

Refinery Expansion Project:

An expansion project to increase the capacity of Manali Refinery to 17.5 MMTPA by installing a 6.0 MMTPA unit with matching secondary processing facilities is under conceptualization. The process configuration is under finalisation.

Construction of Mounded Bullet:

With the objective to promote safety and reduce the environmental impact, your Company proposes to install a mounded gas storage facility in replacement of the existing bullets for LPG, Propane and Propylene.

Diesel Hydro Treating facilities:

It is proposed to provide diesel hydro treating facilities at Cauvery Basin Refinery by shifting the idle equipments at Manali Refinery and also by providing other associated facilities for removal of Sulfur from diesel is envisaged. The project is expected to increase the capacity utilization of CBR and improve refinery margins by enabling processing of medium sulfur crudes. Detailed Feasibility Report was completed by M/s. Projects and Development (India) Ltd

Naphtha Reforming Facilities:

A proposal is also envisaged for shifting of idle assets at Manali Refinery to Cauvery Basin Refinery and provision of other associated facilities for reforming of Naphtha. The project is expected to improve the refinery margins and enable production and supply of MS from CBR.

STRATEGIC INITIATIVES

Your company is conscious of the fact that growth is central to its core purpose and the quest for growth has to be through activities undertaken within the framework of HSE policy, corporate governance and sustainable development. The In-house Strategy Meet was held in October 2011 to discuss various growth strategies like Petcoke based Power Project, New Propylene Recovery Unit, Propylene Derivatives Unit, 15 MMTPA refinery at PCPIR and GRM improvement strategies such as additional Hexane from ISOM Unit.

INITIATIVES TAKEN IN EXCELLING

- Carbon foot printing exercise was completed for Manali and CBR refineries as part of sustainable development activities.

- CPCL''s CBR unit has produced a new product (High flash High Speed Diesel) and supplied to the market for the first time in support of Navy operations.

- CPCL has implemented the on-line blending automation for its MS, HSD and FO streams and the on-line analyser models used for this have been recently updated to meet the new streams and product specifications.

- CPCL has adopted business improvement technologies like off-line Multi Blend optimizer and scheduling tools for better value addition to the products.

- CPCL has conducted a Workshop on "Safety Culture Improvement" with the help of the Dupont Sustainability Solutions to strengthen the safety measures in the refinery.

- Reach-in programmes were conducted to improve the communication among the employees at sectional level and facilitate a platform to discuss the targets, performance, safety and work related issues for improving the working conditions in the refinery.

- Mr. C. Ramadoss, employee of CPCL received the India Shram Award in October 2011 in recognition of the outstanding contribution made by workmen.

- CPCL has commissioned two additional continuous Ambient Air Quality Monitoring Stations and one online Stack Monitoring Station for strengthening the monitoring mechanism of various environmental parameters.

- CPCL along with IOC R&D have initiated a project to co-process Jatropha based bio-diesel (about 3-5 wt%) along with fossil diesel in the hydro-treating unit mentioned above.

AREAS OF LEADERSHIP OF CPCL

- Oxygen Enrichment facility was extended to SRU train thereby enabling increased OHCU thruput which will improve the Distillates production and profitability.

- Successfully completed trial processing of Light Neutral LOBS in NMP Extraction Plant to maximize capacity utilization of NMP Extraction unit and reduce energy consumption.

- The CBR Unit of CPCL has passed the final assessment and has been awarded "Excellence in consistent TPM commitment award for 2011" by JIPM, Japan. CPCL is the first refinery in the Indian Oil Industry to achieve this award

INDIAN ADDITIVES LIMITED

Indian Additives Limited, was formed in the year 1989 as a joint venture between your Company and Chevron Chemical Company (now Chevron Oronite Company) in the year 1989 for manufacturing Lube Additives.

IAL achieved a turnover of Rs. 454.33 Crore (provisional) during the year 2011-12, as against Rs. 375.28 Crore in the previous year. The Profit after Tax for 2011-12 is Rs. 35.76 Crore as against Rs. 37.45 Crore in the previous year.

INFORMATION TECHNOLOGY

Your Company has taken rapid strides towards Green IT by focusing on the concept of paperless office with the introduction of Online Vigilance Clearance system for getting No Objection Certificate for passport applications and foreign tours and Online booking for Train and Air Travel system.

Your company has leveraged the usage of new technologically advanced concept of Virtualisation and Consolidation at Manali Refinery whereby, the multiple servers and services will be run on a single server, resulting in lower administrative cost and higher energy savings.

Realising the need to provide safer and secure IT system against cyber attacks, your company has upgraded its Firewall applications.

Your company has successfully introduced the e-fax server, a comprehensive network fax solution for creating, sending, receiving, and managing faxes directly from a user''s desktop computer. The fax is integrated with email to enable high volume delivery & paperless communication. Your company has also upgraded the routers in the organization.

RESEARCH AND DEVELOPMENT (R&D)

Your company focuses its attention to fundamental R & D for sustainability of its business, advanced technical services, building capabilities and enhance profitable growth and continues to be an efficient user of technology.

Your Company''s R&D is aimed at increasing the efficiency and reliability of the refinery processes and continues to extend support to various Refinery units like FCC, Hydrocracker, DHDS and Lube units with process and feed optimization studies.

Your R&D center has carried out extensive isomerisation pilot plant studies to successfully develop a model for supporting the commercial ISOM unit. Studies were initiated on Bio fuels also by conducting several high-pressure pilot plant trials on thermo chemical conversion of Algae.

Your R&D centre also entered into Research cooperation with Indian Institute of Petroleum (IIP), Dehradun for the development of process for low sulfur fuel oil through Extraction route as an alternate to hydro treating which is expensive and complex.

SAFETY PERFORMANCE

Your Company with its deep conviction as a responsible corporate citizen pursued whole heartedly the principle of maximising production without compromising on Safety in its pursuit towards excellence.

Your Company has prepared the Process Safety Manual in line with the guidelines of Oil Industry Safety Directorate.

A workshop on Safety Culture Improvement was conducted for the benefit of cross section of employees. Your company has also revised the incentive scheme for reporting Near Miss Incidents (NMI) in order to encourage the employees in generating more number of Near Misses and giving importance for process safety NMIs and High potential NMIs.

One Four Day programme on "Risk Based Process Safety" and three One -Day Programmes on " Process Safety Management " were conducted through Centre for Chemical Process Safety (CCPS).

An off-site emergency mock drill was conducted under the guidance of Brig (Dr) B.K.Khanna (Retd.), Senior Specialist (Training and Capacity Development) NMDA, New Delhi with active participation of District Collector, Tiruvallur and all the Stakeholders.

ENVIRONMENTAL PERFORMANCE

Your Company, recognizes the impact of industrial operations on environment and believes that commitment to environment is fundamental to the company''s values which ensure sustainable development. Therefore, your company''s development plan encompasses a variety of schemes towards minimizing the impact of refining operations on environment.

Significant initiatives taken in the areas of environmental protection include the following:

- Completion of Fugitive Emission Inventorisation in Refinery I & III.

- Adoption of alternative methodology for oil recovery, i.e. in-situ technique by treating the oily Sludge in the tank farm itself, for oil recovery.

- Three numbers of fixed roof tanks of capacity 10000 KL each have been constructed and being commissioned for oily water feed to Effluent Treatment Plant (ETP) for minimisation of emission of Volatile Organic Compounds.

- Mobile Ambient Air Quality unit launched. Real time ambient air quality monitoring station analyzer data and stack emission monitoring data configured in PIN under the continuous Emission Monitoring System.

The sustained and concentrated efforts taken by the company in the area of water management has earned the company Environment Excellence Award in Water Management by Confederation of Indian Industry.

RENEWABLE ENERGY DEVELOPMENT

Sustainability Development is recognized as one of the important focus areas in CPCL and as part of these efforts, CPCL generate 28.9 Million Units of Power from the 17.6 MW Windmill in Tamil Nadu. CPCL is exploring various options of utilizing Solar energy, as a part of its commitment to Sustainability Development

As part of CSR activity, CPCL has implemented a unique concept of providing 45 Nos. of Solar based Street Lights at Jawadhu Hills for the benefit of Tribal people.

ENERGY CONSERVATION

Your Company continues its efforts to undertake several measures aimed towards achieving Energy Conservation.

During the year, Condensate Recovery System was commissioned in Visbreaker and Sulfur Recovery Units as part of Energy Conservation initiative.

The Manali Refinery of your company achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF. The Cauvery Basin Refinery achieved the lowest ever energy index of 108.67 MBN.

The Energy Conservations Measures undertaken during the year are detailed in Annexure-I.

REFINERY BUSINESS OPTIMISATION

Under the Integrated Refinery Business Improvement Programme being implemented in association with Centre for High Technology and M/s. Shell Global Solutions International, 11 proposals for implementation were completed with a net benefit of 7.243 Million US Dollars (10.1Cents per bbl).

PROCESS OPTIMISATION

Your Company has been a fore runner among the Indian Refineries with regard to implementation of best practices in Refinery Business Optimisation in order to achieve better operating margins.

Your company has successfully completed the trial processing of LN in NMP Extraction Plant to maximize the capacity utilisation of NMP Extraction Unit and reduction of energy consumption.

Several initiatives taken in the area of optimisation include the following :

- Installation of Duplex Stainless Steel tubes for coolers for run length enhancement in propylene unit

- Changeover of hexane plant solvent from sulfolane to NMP

TOTAL PRODUCTIVE MAINTENANCE (TPM)

The Manali Refinery of your company successfully completed the health check up for "Excellence in Consistent TPM Commitment Award" conducted by the Japan Institute of Plant Maintenance (JIPM).

The Cauvery Basin Refinery of your Company received the "Excellence in Consistent TPM Commitment Award" for 2011 from the Japan Institute of Plant Maintenance (JIPM), in March 2012.

HUMAN RESOURCES

Your Company has a manpower dedicated to meet the vision of the company and is always endeavoring to take the company to challenging heights. Your company''s HR policy caters to the demand of maintaining a steady flow of talent, in a business which is characterized by risks and uncertainties, fluctuating crude and product prices and growing competition.

The total manpower of the Company as on 31st March 2012 was 1745 (1773 as on 31st March 2011) comprising 787 supervisors and 958 non-supervisors (808 supervisors and 965 non-supervisors as on 31st March 2011).

In order to develop the skill set of the employees, your company recently started "Employees Learning Forum" and 11 programmes were successfully conducted during the year.

The Industrial Relations climate continued to be harmonious, cordial and peaceful through out the year with periodical sharing of the information with the collectives. Structured communication meetings were held with the collectives to communicate the quarterly / annual performance and growth prospects of the Company.

The backlog vacancies of Persons with Disabilities, which was 4 in the beginning of the year has been filled up through special Recruitment drive.

Your Company firmly believes in continuously upgrading the skills and competencies of the employees with the objective of creating a leadership pipeline. Training programmes aimed at enhancing both the functional competencies and behavioural competencies of the employees at all levels were organised with the best of faculties. During the year, your Company utilized 5364 man days covering employees at all levels. Your company achieved average training man days of 2.7 per employee during the year. Competency Mapping was carried out for 142 deputy managers/ managers by the Company during this year.

Your Company has been scrupulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and Persons with Disabilities. Out of the total manpower, there were 433 SC employees (previous year: 439) and 38 ST employees (previous year: 36) as on 31.03.2012 constituting 24.81% and 2.18% of the total manpower respectively.

The statistics relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2012 is given in Annexure-II.

WELFARE OF WOMEN

Your Company provides equal opportunities for women in employment and ensures that requisite work ambience exists for women employees. As on 31.03.2012, 90 women employees are on the rolls of the Company, of whom 40 are in the Supervisory Cadre and 50 are in Non supervisory Cadre, constituting 5 % of the total Supervisory employees and 5.2 % of the total Non-supervisory employees.

International Women''s Day 2012 was celebrated with the theme "Promote Gender Equality and Empower Women" which was chaired by Kalaimamani Dr. Smt. Sarada Nambi Arooran, State Information Commissioner (Retd.).

Your Company received the Best Enterprise Award in the Miniratna category instituted by the Forum of Women In Public Sector (WIPS) under the aegis of Standing Conference on Public Enterprises (SCOPE), for the second consecutive time.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to follow the guidelines on Corporate Social Responsibility (CSR) issued by the Department of Public Enterprises (DPE) and the CSR Committee constituted by the Board of Directors of the Company monitors the overall functioning as well as guide and suggest improvements in the CSR activities in line with the company''s vision and mission statement and CSR policy.

During the year, an amount of Rs. 372.65 lakhs was spent on various Corporate Social Responsibility activities as compared to Rs. 368.51 lakhs spent in the last year. Out of Rs. 372.65 lakhs, Rs. 90 lakhs was spent on various health care initiatives and Rs. 106 lakhs was spent towards education.

Significant CSR Activities carried out during the year include:

- Organised a Mega Science Fair at Manali in association with Agastya International Foundation, Bangalore for the benefit of Manali Neighbourhood School Students, which has benefited about 10800 Students from 14 Schools.

- Distribution of Merit Scholarships totaling Rs. 18.16 lakhs to the meritorious students of the nearby Government/ Panchayat/Municipality / Government Nursing Institutions.

- Conducted 12 Comprehensive Eye Care Camps benefitting 1700 people living in and around Manali, in association with M/s. Sankara Nethralaya, Medical Research Foundation. 120 cataract surgeries were performed.

- Donated one Ambulance at a cost of Rs. 8.01 lakhs to the Blood Bank of Rajiv Gandhi Government General Hospital, Chennai for segregating and transporting the Blood collected at various Blood Donation Camps to their main Hospital in the City.

- Donated one Fully Automated Bio-Chemistry Analyser at a cost of Rs. 13.26 lakhs to Government Hospital of Thorasic Medicine, Tambaram Sanatorium to enable the hospital to carry out a large number of analyses with accuracy in a shorter time.

- Donated Rs. 14.50 lakhs to M/s.Sankara Nethralaya Medical Research Foundation for purchase of one Operating Microscope used to perform surgery under high magnification with special illumination in the Operation Theater and is specially used for ocular surgeries like Cataract, Vitreo-retinal and Squint

A sum of Rs. 51 lakhs was spent by Cauvery Basin Refinery of your Company on various CSR activities for the benefit of the nearby community. Significant activities include the following:

- Distribution of Merit Scholarships worth Rs. 4.94 lakhs to the meritorious students of the Schools/ Polytechnic/ITI educational institutions, which has benefited 213 students.

- Conducted Eye Care Camps for the benefit of people living in and around Panangudi, in association with M/s. Aravind Eye Hospital, Puducherry. 500 people were screened and 100 cataract surgeries were performed.

- Construction of kitchen buildings for Panchayat Union Elementary School, Periyanariyangudi and Narimanam villages at cost of Rs. 4.5 lakhs and at Municipal Middle School, Nagapattinam at a cost of Rs. 3.14 lakhs.

OCCUPATIONAL HEALTH

Your Company gives utmost thrust on achieving excellence in occupational and personal health of its employees and has state-of-the art Occupational Health Services (OHS) Centre equipped with latest diagnostic and therapeutic equipments and manned by qualified health professionals.

OHS Centre continued its endeavor to preserve the health of the employees and 81 percent of the employees underwent the annual health check up.

''Healthy heart and body composition analysis'' was organised for all employees and counselling was done higlighting good eating habits for maintaining a healthy heart

A programme on "Holistic Development of Adolescence" was conducted for the benefit of the children of the employees in the age group of 13 years to 19 years and for the parents.

OHS biochemistry laboratory continues to hold the quality certificate of National Accreditation Board for Laboratories as per ISO 15189:2007.

PUBLIC GRIEVANCES

Your Company accords top priority to the public grievances and a Grievance Redressal System is in place.

Your company continues to implement the Centralized Public Grievances Redress and Monitoring System (CPGRAMS) as advised by the Department of Administrative Reforms & Public Grievances, Ministry of Personnel Public Grievances and Pension, Government of India. Details and contact number of Public Grievance Officer are displayed in the website of the Company, viz. www.cpcLco.in.

RISK MANAGEMENT

The reports pertaining to the year 2011-12 under the Risk Assessment & Minimization Procedures were reviewed by the Executive Committee and also by the Audit Committee and Board of Directors of the Company.

A Risk Management Policy for the year 2012-13 has been prepared by the Committee constituted for this purpose and the report submitted by the Committee was also reviewed by the Audit Committee and the Board

CORPORATE GOVERNANCE

Your Company has taken structured initatitive towards Corporate Governance and its practices are valued by various stakeholders. The Corporate Governance practices are based on multi layered checks and balances to ensure transparency and accountability.

Your Company complied with all the mandatory requirements of Corporate Governance Guidelines issued by Securities & Exchange Board of India and Department of Public Enterprises (DPE), Government of India for the year 2011-12, except the clause relating to the appointment of Independent Directors. A separate section on Corporate Governance forms part of this Annual Report

Your Company also complies with the Voluntary Guidelines on Corporate Governance issued by Ministry of Corporate Affairs, Government of India in December 2009, as far as practicable.

SECRETARIAL AUDIT

In line with the provisions of the Voluntary Guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, your Company carried out Secretarial Audit for the year 2011-12 from M/s. S.Sandeep & Associates, Company Secretaries and their report forms part of the Annual Report The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, SEBI Guidelines, rules etc except with the clause relating to appointment of Independent Directors.

RIGHT TO INFORMATION

The Right to Information Act, 2005 is applicable to your company. In accordance with the provisions of the RTI Act, necessary disclosures have been made in the website of the company.

During the year, 54 applications under the RTI Act were received and disposed off in time.

VIGILANCE

Your Company is committed to ethical conduct of business and the main focus of the vigilance department is to create a culture of integrity and probity in the company.

System studies were undertaken to improve compliance with the procedures and also to enhance operational efficiencies. Payments of bills to vendors/ contractors effected through ECS/EFT achieved 98 %, demonstrating the increased focus maintained by the vigilance on the use of technology.

Vigilance Awareness week was observed in a befitting manner with the theme "Participative Vigilance" which was actively participated by employees, customers, vendors , contractors, service providers etc.

INTEGRITY PACT

Your Company has a Memorandum of Understanding (MoU) with Transparency International India (TII) for implementing an Integrity Pact Program focused on improving transparency in business dealings.

19 major contracts/ works were covered under the Integrity pact during the year. Periodical review meetings were held with Independent External Monitors. An interactive meet was also organised with Independent External Monitors for major contractors.

HINDI IMPLEMENTATION

During the year, a serious of initiatives were undertaken for promotion and propagation of Hindi in official communication and to ensure implementation of the Official Language Policy of the Government of India. The Official Language Implementation Committee monitors the implementation of Official Language Policy on a quarterly basis.

Various activities like workshops, meetings, competitions, etc., were organised during the year and the World Hindi Day was celebrated on 10.01.2012.

Your company won the prestigious Rajbhasha shield (IInd prize) instituted by the Town Official Language Implementation Committee, Chennai under the Public Sector Unit - Big category

STATUTORY INFORMATION

- Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

- Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under Section 217(1) (e) of the Companies Act, 1956 and the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-I).

- Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India is Annexed and forms part of this Report (Please see Annexure-III).

- Management Discussion and Analysis Report as required under Clause 49 IV F of the Listing Agreement is annexed and forms part of the Report (Annexure IV).

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors'' Responsibility Statement, it is hereby confirmed, that,

i) In the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

iv) The Directors have prepared the annual accounts for the financial year ended March 31, 2012, on a going concern basis; and

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

AUDITORS

M/s. Chandran & Raman, Chennai and M/s S.Venkatram & Co., Chennai have been appointed as Joint Statutory Auditors of the Company for the financial year 2011-2012 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs. 7.5 lakh ( Rs. 3.75 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

DIRECTORS

Mr.Rajkumar Ghosh, Director (Refineries) Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL effective 02.09.2011 in place of Mr.B.N.Bankapur.

Mr.K.Balachandran, Managing Director was relieved from the services of the company effective 17.11.2011 as he has tendered his resignation and Mr.S.Venkataramana, Director (Operations) has been holding the additional charge of the post of the Managing Director, till 05.07.2012. Mr. A.S. Basu, Executive Director (Operations), Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL and also as the Managing Director effective 06.07.2012.

Your Directors place on record their appreciation of the valuable contributions made by Mr.K.Balachandran and Mr.B.N.Bankapur during their tenure.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude for the valuable guidance and co-operation received from the Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Naftiran Intertrade Company Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government of Tamil Nadu, Central Vigilance Commission, Financial Institutions and commercial banks.

Your Directors are also thankful to the valuable suggestions and guidance received from the Statutory Auditors and the Comptroller & Auditor General of India.

Your Directors place on record their special appreciation to the valued shareholders for their support.

Your Directors sincerely acknowledge the contribution, dedication, commitment and perseverance displayed by all the employees.

For and on behalf of the Board of Directors

Date : 03.08.2012 R.S. BUTOLA

Place : New Delhi Chairman

Mar 31, 2012

The behalf of the Board of Directors of your Company, it is indeed my privilege to present the 46th Annual Report on the performance of your Company, together with the Audited Statement of Accounts for the year ended March 31, 2012

PERFORMANCE REVIEW

Significant Highlights

- Highest ever turnover of Rs. 45365 Crore achieved.

- Total Thruput of 10557 TMT achieved.

- Carbon Foot Printing exercise was completed for Manali and CBR refineries as part of Sustainable development activities.

- Achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF for Manali Refinery and 108.67 MBN for Cauvery Basin Refinery.

- Manali Refinery successfully changed the solvent from Sulfolane to NMP for production of hexane to meet the stringent product quality.

- Received Income Tax refund of Rs. 276 Crore based on the favourable order given by CIT (Appeals)for Sec.80 IB claim on Refinery III profits for Assessment Year 2008-09.

- DHDT Unit commissioned successfully in Manali.

- Installation of Oxygen enrichment facility jointly developed with EIL in SRU, Train B resulting in enhanced OHCU thruput.

- 20" Crude oil interlink pipeline between Chidambaranar Oil Jetty (COJ) and Marg Karaikkal Port successfully commissioned in February 2012.

- Cauvery Basin Refinery has received the "Excellence in Consistent TPM Commitment Award" for the year 2011 from Japan Institute of Plant Maintenance (JIPM).

- Cauvery Basin Refinery has received the prestigious National Safety Award for 2009 instituted by the Director General, Factory Advice Services and Labour Institutes, Ministry of Labour & Employment, Government of India.

- Won the PSE Excellence Awards instituted by the Department of Public Enterprises and Indian Chamber of Commerce for the year 2011 for "Environmental Excellence and Sustainability Development" and Good Corporate Governance.

- Won the CII Excellence in Water Management Award for the year 2011.

Physical

CRUDE THRUPUT (in TMT) 2011-12 2010-11

Imported 9050.8 9105.0

Indigenous 1505.8 1643.0

Total 10556.6 10748.0

PRODUCTION (in TMT) 2011-12 2010-11

Light Ends 2270.5 2279.0

Middle Distillates 5148.9 5141.0

Heavy Ends 2008.9 2177.0

Lube Base Stocks 178.3 186.0

Paraffin Wax 24.0 27.0

Others (Intermediaries) (87.6) 25.0

Other Inputs (87.0)

Fuel & Loss 1013.6 996.0

Total 10556.6 10748.0

Financial (Rs. in Crore)

2011-12 2010-11

Gross Turnover 45384.91 38128.26

Profit before Interest, Depreciation & Tax 456.58 1332.44

Interest 249.38 254.45

Depreciation and Amortization 365.42 314.47

Profit before Tax (158.22) 763.52

Provision for Taxation

- Income Tax (Net)

[Incl Pertaining to earlier years) (253.51) 223.48

- Deferred Tax 33.47 28.52

Profit after Tax 61.83 511.52

Value Added 969.03 1748.65

Dividend

The Board of Directors of the Company is pleased to recommend a dividend of 20% of the Paid-up Share Capital of the Company representing Rs.2/- per equity share for the year 2011-12.

Book Value

The book value per share of your Company has increased from Rs. 252.90 in the year 2010-2011 to Rs. 254.72 in the year 2011-2012.

Reserves and Suplus

The Reserves and Surplus increased from Rs. 3616.92 crore as on 31.03.2011 to Rs. 3644.13 crore as on March 31, 2012.

Value Addition

The value addition during the year is Rs.969.03 crore as compared to Rs. 1748.65 crore in the previous year.

The Profit before Tax during the year 2011-12 was mainly due to:

- Lower refining margins on account of high volatility in the crude and product prices leading to depressed cracks in the wake of the economic crisis in the European Union & economic slowdown in the US.

- Unprecedented depreciation of the Indian Rupee against the US Dollar and extreme volatility in Foreign Exchange Market resulting in exchange fluctuation losses.

- Additional freight incurred during the year due to transportation of crude in smaller Afra max vessels instead of Suez Max vessels on account of infrastructural constraints at Chennai Port Trust and production disturbances during cyclone Thane.

Contribution to Ex-Chequer

During the year, your Company has paid a sum of Rs. 5784.82 crore to the ex-chequer as compared to Rs. 6837.32 crore in the previous year.

Public Deposit Scheme

Your Company has not accepted any fresh public deposits during the year 2011-12.

Transfer of Unclaimed Dividend to IEPF

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.

Manali Refinery - Salient features of Operations

- Manali Refinery achieved a total Crude thruput of 9.945 MMT as compared to 10.045 MMT in the previous year.

- Achieved the highest distillate yield of 70.3 wt%.

- Achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF by maximising thruput in secondary units.

- Maximized the production of food grade hexane by additional 40% through process improvements.

- Completed health checkup for "Excellence in Consistent TPM Commitment Award" for 2011.

- Highest ever production of the following products :

(Figures in TMT)

Product 2011-12 Previous Best

High Speed Diesel 3911 3863 (2010-11)

Motor Spirit 1020 860.0 (2010-11)

- Procured three new low sulfur crudes viz., Espoir from Ivory Coast, Palanca Blend from Angola and Essider from Libya.

- One new Crude was added to the basket: viz., Okwori, new Low Sulfur Trial crude from Nigeria.

Cauvery Basin Refinery (CBR) - Salient features of Operations

- Processed 611 TMT of Crude as compared to 703.3 TMT in the previous year.

- Achieved the highest ever distillate yield of 86.64 wt % on crude in 2011-12 (Previous best :

83.2 wt % in 2010-11).

- Two nos. of Continuous Ambient Air Quality Monitoring stations and one online Stack Monitoring station commissioned for better monitoring and control of various environmental parameters.

- Introduced new product namely High Flash High Speed Diesel.

- Successfully conducted Green House Gas Emission Survey.

MoU PERFORMANCE

Your Company signed an MoU with Indian Oil Corporation Limited, the holding Company for the year 2011-12, as per the guidelines issued by the Department of Public Enterprises (DPE). The provisional rating for the year 2011-12 is "1.43".

MARKETING

Majority of the products of your Company like MS, HSD, LPG, SKO, etc. are marketed by Indian Oil Corporation Limited, the holding Company.

CPCL directly markets some of the Speciality products and highest direct sales achieved during 2011-12 as compared to previous year are given below :

(Quantity in TMT)

S. No. Product 2010-11 2011-12

1 Naphtha 211.66 218.51

2 Sulphur 52.02 56.97

3 Propane 2.06 2.14

4 PBFS 7.14 7.53

During the year, seven Customer Meets were conducted at various locations for Wax, Sulphur and other direct customers and 19 new customers were registered for the supply of Sulphur, Hexane, Propane and Propylene.

PROJECTS

Your Company made an investment of Rs. 490.18 crore on various projects during 2011-12 (cumulative expenditure of Rs.2640.23 crore upto 2011-12), out of the approved outlay of Rs. 3575 Crore for the XI Plan (2007-2012).

Completed Projects

Euro-IVProject - DHDT Units:

To produce MS/HSD meeting Euro-IV specifications for Chennai and Bangalore and Euro-III equivalent specifications for the rest of the locations, your company has undertaken Auto fuel Quality Upgradation Project at an estimated cost of Rs. 2615.69 crore in Manali Refinery as per the Auto Fuel Policy of the Government of India.

The Diesel Hydro treater unit (DHDT) with a capacity of 1.8 MMTPA was commissioned in May 2011. CBR 20" Crude line Cauvery Basin Refinery of your Company has successfully commissioned a 20" interlink crude oil pipeline between Karaikkal Port and CPCL-CBR's Chidambaranar Oil Jetty at a cost of Rs.10.86 Crore. This project will enable CBR to receive crude oil in higher parcel sizes resulting in reduction in the transportation and handling cost of crude and the flexibility to utilize other crude oil tankers of larger sizes.

Projects Under Implementation :

Euro-IV Project:

The utilities and off-site facilities of Euro-IV auto fuel quality upgradation project are in various stages of execution. A new Hydrogen Generation Unit to enhance the existing Hydrogen Generation capacity is under commissioning stage. The revamp of the Effluent Treatment Plant-II is in the final stage of mechanical completion and is expected to be commissioned in October 2012.

Revamp of existing CDU/VDU-II from 3.7to4.3MMTPA

A project to enhance the unit capacity from existing 3.7 MMTPA to 4.3 MMTPA is under implementation at a cost of Rs. 333.99 Crore. This project is expected to be completed during the second quarter of the financial year 2012-13.

Resid Upgradation Project

For improving the distillate yield of the Manali refinery and to process increased level of high Sulphur bearing Crudes, approval was accorded for implementation of a Resid Upgradation Project at an estimated cost of Rs. 3110.36 Crores. This project is scheduled to be completed within 33 months from the date of Environmental Clearance, which is delayed mainly due to non lifting of ban imposed by MoE&F on new investments in the Manali Industrial Region.

New Crude Oil Pipeline

To overcome the risks associated with the transportation of Crude Oil through the existing 30" Crude Oil Pipeline from Chennai Port to Manali Refinery your Company is implementing a new 42" Crude Oil Pipeline Project at a cost of Rs. 126 Crore. All engineering activities have been completed along the route of the proposed port connectivity road project, Coastal Regulatory Zone clearance is awaited for this project 2 X 10.5 TKL Crude Oil Storage tanks at CBR

A project for construction of two Crude oil storage tanks of 10500 KL each is being implemented to have better operational flexibility in Crude receipt and storage.

New Projects

Refinery Expansion Project:

An expansion project to increase the capacity of Manali Refinery to 17.5 MMTPA by installing a 6.0 MMTPA unit with matching secondary processing facilities is under conceptualization. The process configuration is under finalisation.

Construction of Mounded Bullet:

With the objective to promote safety and reduce the environmental impact, your Company proposes to install a mounded gas storage facility in replacement of the existing bullets for LPG, Propane and Propylene.

Diesel Hydro Treating facilities:

It is proposed to provide diesel hydro treating facilities at Cauvery Basin Refinery by shifting the idle equipments at Manali Refinery and also by providing other associated facilities for removal of Sulfur from diesel is envisaged. The project is expected to increase the capacity utilization of CBR and improve refinery margins by enabling processing of medium sulfur crudes. Detailed Feasibility Report was completed by M/s. Projects and Development (India) Ltd

Naphtha Reforming Facilities:

A proposal is also envisaged for shifting of idle assets at Manali Refinery to Cauvery Basin Refinery and provision of other associated facilities for reforming of Naphtha. The project is expected to improve the refinery margins and enable production and supply of MS from CBR.

STRATEGIC INITIATIVES

Your company is conscious of the fact that growth is central to its core purpose and the quest for growth has to be through activities undertaken within the framework of HSE policy, corporate governance and sustainable development. The In-house Strategy Meet was held in October 2011 to discuss various growth strategies like Petcoke based Power Project, New Propylene Recovery Unit, Propylene Derivatives Unit, 15 MMTPA refinery at PCPIR and GRM improvement strategies such as additional Hexane from ISOM Unit.

INITIATIVES TAKEN IN EXCELLING

- Carbon foot printing exercise was completed for Manali and CBR refineries as part of sustainable development activities.

- CPCL's CBR unit has produced a new product (High flash High Speed Diesel) and supplied to the market for the first time in support of Navy operations.

- CPCL has implemented the on-line blending automation for its MS, HSD and FO streams and the on-line analyser models used for this have been recently updated to meet the new streams and product specifications.

- CPCL has adopted business improvement technologies like off-line Multi Blend optimizer and scheduling tools for better value addition to the products.

- CPCL has conducted a Workshop on "Safety Culture Improvement" with the help of the Dupont Sustainability Solutions to strengthen the safety measures in the refinery.

- Reach-in programmes were conducted to improve the communication among the employees at sectional level and facilitate a platform to discuss the targets, performance, safety and work related issues for improving the working conditions in the refinery.

- Mr. C. Ramadoss, employee of CPCL received the India Shram Award in October 2011 in recognition of the outstanding contribution made by workmen.

- CPCL has commissioned two additional continuous Ambient Air Quality Monitoring Stations and one online Stack Monitoring Station for strengthening the monitoring mechanism of various environmental parameters.

- CPCL along with IOC R&D have initiated a project to co-process Jatropha based bio-diesel (about 3-5 wt%) along with fossil diesel in the hydro-treating unit mentioned above.

AREAS OF LEADERSHIP OF CPCL

- Oxygen Enrichment facility was extended to SRU train thereby enabling increased OHCU thruput which will improve the Distillates production and profitability.

- Successfully completed trial processing of Light Neutral LOBS in NMP Extraction Plant to maximize capacity utilization of NMP Extraction unit and reduce energy consumption.

- The CBR Unit of CPCL has passed the final assessment and has been awarded "Excellence in consistent TPM commitment award for 2011" by JIPM, Japan. CPCL is the first refinery in the Indian Oil Industry to achieve this award

INDIAN ADDITIVES LIMITED

Indian Additives Limited, was formed in the year 1989 as a joint venture between your Company and Chevron Chemical Company (now Chevron Oronite Company) in the year 1989 for manufacturing Lube Additives.

IAL achieved a turnover of Rs. 454.33 Crore (provisional) during the year 2011-12, as against Rs. 375.28 Crore in the previous year. The Profit after Tax for 2011-12 is Rs. 35.76 Crore as against Rs. 37.45 Crore in the previous year.

INFORMATION TECHNOLOGY

Your Company has taken rapid strides towards Green IT by focusing on the concept of paperless office with the introduction of Online Vigilance Clearance system for getting No Objection Certificate for passport applications and foreign tours and Online booking for Train and Air Travel system.

Your company has leveraged the usage of new technologically advanced concept of Virtualisation and Consolidation at Manali Refinery whereby, the multiple servers and services will be run on a single server, resulting in lower administrative cost and higher energy savings.

Realising the need to provide safer and secure IT system against cyber attacks, your company has upgraded its Firewall applications.

Your company has successfully introduced the e-fax server, a comprehensive network fax solution for creating, sending, receiving, and managing faxes directly from a user's desktop computer. The fax is integrated with email to enable high volume delivery & paperless communication. Your company has also upgraded the routers in the organization.

RESEARCH AND DEVELOPMENT (R&D)

Your company focuses its attention to fundamental R & D for sustainability of its business, advanced technical services, building capabilities and enhance profitable growth and continues to be an efficient user of technology.

Your Company's R&D is aimed at increasing the efficiency and reliability of the refinery processes and continues to extend support to various Refinery units like FCC, Hydrocracker, DHDS and Lube units with process and feed optimization studies.

Your R&D center has carried out extensive isomerisation pilot plant studies to successfully develop a model for supporting the commercial ISOM unit. Studies were initiated on Bio fuels also by conducting several high-pressure pilot plant trials on thermo chemical conversion of Algae.

Your R&D centre also entered into Research cooperation with Indian Institute of Petroleum (IIP), Dehradun for the development of process for low sulfur fuel oil through Extraction route as an alternate to hydro treating which is expensive and complex.

SAFETY PERFORMANCE

Your Company with its deep conviction as a responsible corporate citizen pursued whole heartedly the principle of maximising production without compromising on Safety in its pursuit towards excellence.

Your Company has prepared the Process Safety Manual in line with the guidelines of Oil Industry Safety Directorate.

A workshop on Safety Culture Improvement was conducted for the benefit of cross section of employees. Your company has also revised the incentive scheme for reporting Near Miss Incidents (NMI) in order to encourage the employees in generating more number of Near Misses and giving importance for process safety NMIs and High potential NMIs.

One Four Day programme on "Risk Based Process Safety" and three One -Day Programmes on " Process Safety Management " were conducted through Centre for Chemical Process Safety (CCPS).

An off-site emergency mock drill was conducted under the guidance of Brig (Dr) B.K.Khanna (Retd.), Senior Specialist (Training and Capacity Development) NMDA, New Delhi with active participation of District Collector, Tiruvallur and all the Stakeholders.

ENVIRONMENTAL PERFORMANCE

Your Company, recognizes the impact of industrial operations on environment and believes that commitment to environment is fundamental to the company's values which ensure sustainable development. Therefore, your company's development plan encompasses a variety of schemes towards minimizing the impact of refining operations on environment.

Significant initiatives taken in the areas of environmental protection include the following:

- Completion of Fugitive Emission Inventorisation in Refinery I & III.

- Adoption of alternative methodology for oil recovery, i.e. in-situ technique by treating the oily Sludge in the tank farm itself, for oil recovery.

- Three numbers of fixed roof tanks of capacity 10000 KL each have been constructed and being commissioned for oily water feed to Effluent Treatment Plant (ETP) for minimisation of emission of Volatile Organic Compounds.

- Mobile Ambient Air Quality unit launched. Real time ambient air quality monitoring station analyzer data and stack emission monitoring data configured in PIN under the continuous Emission Monitoring System.

The sustained and concentrated efforts taken by the company in the area of water management has earned the company Environment Excellence Award in Water Management by Confederation of Indian Industry.

RENEWABLE ENERGY DEVELOPMENT

Sustainability Development is recognized as one of the important focus areas in CPCL and as part of these efforts, CPCL generate 28.9 Million Units of Power from the 17.6 MW Windmill in Tamil Nadu. CPCL is exploring various options of utilizing Solar energy, as a part of its commitment to Sustainability Development

As part of CSR activity, CPCL has implemented a unique concept of providing 45 Nos. of Solar based Street Lights at Jawadhu Hills for the benefit of Tribal people.

ENERGY CONSERVATION

Your Company continues its efforts to undertake several measures aimed towards achieving Energy Conservation.

During the year, Condensate Recovery System was commissioned in Visbreaker and Sulfur Recovery Units as part of Energy Conservation initiative.

The Manali Refinery of your company achieved the lowest ever energy index of 67.2 MBTU/BBL/NRGF. The Cauvery Basin Refinery achieved the lowest ever energy index of 108.67 MBN.

The Energy Conservations Measures undertaken during the year are detailed in Annexure-I.

REFINERY BUSINESS OPTIMISATION

Under the Integrated Refinery Business Improvement Programme being implemented in association with Centre for High Technology and M/s. Shell Global Solutions International, 11 proposals for implementation were completed with a net benefit of 7.243 Million US Dollars (10.1Cents per bbl).

PROCESS OPTIMISATION

Your Company has been a fore runner among the Indian Refineries with regard to implementation of best practices in Refinery Business Optimisation in order to achieve better operating margins.

Your company has successfully completed the trial processing of LN in NMP Extraction Plant to maximize the capacity utilisation of NMP Extraction Unit and reduction of energy consumption.

Several initiatives taken in the area of optimisation include the following :

- Installation of Duplex Stainless Steel tubes for coolers for run length enhancement in propylene unit

- Changeover of hexane plant solvent from sulfolane to NMP

TOTAL PRODUCTIVE MAINTENANCE (TPM)

The Manali Refinery of your company successfully completed the health check up for "Excellence in Consistent TPM Commitment Award" conducted by the Japan Institute of Plant Maintenance (JIPM).

The Cauvery Basin Refinery of your Company received the "Excellence in Consistent TPM Commitment Award" for 2011 from the Japan Institute of Plant Maintenance (JIPM), in March 2012.

HUMAN RESOURCES

Your Company has a manpower dedicated to meet the vision of the company and is always endeavoring to take the company to challenging heights. Your company's HR policy caters to the demand of maintaining a steady flow of talent, in a business which is characterized by risks and uncertainties, fluctuating crude and product prices and growing competition.

The total manpower of the Company as on 31st March 2012 was 1745 (1773 as on 31st March 2011) comprising 787 supervisors and 958 non-supervisors (808 supervisors and 965 non-supervisors as on 31st March 2011).

In order to develop the skill set of the employees, your company recently started "Employees Learning Forum" and 11 programmes were successfully conducted during the year.

The Industrial Relations climate continued to be harmonious, cordial and peaceful through out the year with periodical sharing of the information with the collectives. Structured communication meetings were held with the collectives to communicate the quarterly / annual performance and growth prospects of the Company.

The backlog vacancies of Persons with Disabilities, which was 4 in the beginning of the year has been filled up through special Recruitment drive.

Your Company firmly believes in continuously upgrading the skills and competencies of the employees with the objective of creating a leadership pipeline. Training programmes aimed at enhancing both the functional competencies and behavioural competencies of the employees at all levels were organised with the best of faculties. During the year, your Company utilized 5364 man days covering employees at all levels. Your company achieved average training man days of 2.7 per employee during the year. Competency Mapping was carried out for 142 deputy managers/ managers by the Company during this year.

Your Company has been scrupulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and Persons with Disabilities. Out of the total manpower, there were 433 SC employees (previous year: 439) and 38 ST employees (previous year: 36) as on 31.03.2012 constituting 24.81% and 2.18% of the total manpower respectively.

The statistics relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2012 is given in Annexure-II.

WELFARE OF WOMEN

Your Company provides equal opportunities for women in employment and ensures that requisite work ambience exists for women employees. As on 31.03.2012, 90 women employees are on the rolls of the Company, of whom 40 are in the Supervisory Cadre and 50 are in Non supervisory Cadre, constituting 5 % of the total Supervisory employees and 5.2 % of the total Non-supervisory employees.

International Women's Day 2012 was celebrated with the theme "Promote Gender Equality and Empower Women" which was chaired by Kalaimamani Dr. Smt. Sarada Nambi Arooran, State Information Commissioner (Retd.).

Your Company received the Best Enterprise Award in the Miniratna category instituted by the Forum of Women In Public Sector (WIPS) under the aegis of Standing Conference on Public Enterprises (SCOPE), for the second consecutive time.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to follow the guidelines on Corporate Social Responsibility (CSR) issued by the Department of Public Enterprises (DPE) and the CSR Committee constituted by the Board of Directors of the Company monitors the overall functioning as well as guide and suggest improvements in the CSR activities in line with the company's vision and mission statement and CSR policy.

During the year, an amount of Rs. 372.65 lakhs was spent on various Corporate Social Responsibility activities as compared to Rs. 368.51 lakhs spent in the last year. Out of Rs. 372.65 lakhs, Rs. 90 lakhs was spent on various health care initiatives and Rs. 106 lakhs was spent towards education.

Significant CSR Activities carried out during the year include:

- Organised a Mega Science Fair at Manali in association with Agastya International Foundation, Bangalore for the benefit of Manali Neighbourhood School Students, which has benefited about 10800 Students from 14 Schools.

- Distribution of Merit Scholarships totaling Rs. 18.16 lakhs to the meritorious students of the nearby Government/ Panchayat/Municipality / Government Nursing Institutions.

- Conducted 12 Comprehensive Eye Care Camps benefitting 1700 people living in and around Manali, in association with M/s. Sankara Nethralaya, Medical Research Foundation. 120 cataract surgeries were performed.

- Donated one Ambulance at a cost of Rs. 8.01 lakhs to the Blood Bank of Rajiv Gandhi Government General Hospital, Chennai for segregating and transporting the Blood collected at various Blood Donation Camps to their main Hospital in the City.

- Donated one Fully Automated Bio-Chemistry Analyser at a cost of Rs. 13.26 lakhs to Government Hospital of Thorasic Medicine, Tambaram Sanatorium to enable the hospital to carry out a large number of analyses with accuracy in a shorter time.

- Donated Rs. 14.50 lakhs to M/s.Sankara Nethralaya Medical Research Foundation for purchase of one Operating Microscope used to perform surgery under high magnification with special illumination in the Operation Theater and is specially used for ocular surgeries like Cataract, Vitreo-retinal and Squint

A sum of Rs. 51 lakhs was spent by Cauvery Basin Refinery of your Company on various CSR activities for the benefit of the nearby community. Significant activities include the following:

- Distribution of Merit Scholarships worth Rs. 4.94 lakhs to the meritorious students of the Schools/ Polytechnic/ITI educational institutions, which has benefited 213 students.

- Conducted Eye Care Camps for the benefit of people living in and around Panangudi, in association with M/s. Aravind Eye Hospital, Puducherry. 500 people were screened and 100 cataract surgeries were performed.

- Construction of kitchen buildings for Panchayat Union Elementary School, Periyanariyangudi and Narimanam villages at cost of Rs. 4.5 lakhs and at Municipal Middle School, Nagapattinam at a cost of Rs. 3.14 lakhs.

OCCUPATIONAL HEALTH

Your Company gives utmost thrust on achieving excellence in occupational and personal health of its employees and has state-of-the art Occupational Health Services (OHS) Centre equipped with latest diagnostic and therapeutic equipments and manned by qualified health professionals.

OHS Centre continued its endeavor to preserve the health of the employees and 81 percent of the employees underwent the annual health check up.

'Healthy heart and body composition analysis' was organised for all employees and counselling was done higlighting good eating habits for maintaining a healthy heart

A programme on "Holistic Development of Adolescence" was conducted for the benefit of the children of the employees in the age group of 13 years to 19 years and for the parents.

OHS biochemistry laboratory continues to hold the quality certificate of National Accreditation Board for Laboratories as per ISO 15189:2007.

PUBLIC GRIEVANCES

Your Company accords top priority to the public grievances and a Grievance Redressal System is in place.

Your company continues to implement the Centralized Public Grievances Redress and Monitoring System (CPGRAMS) as advised by the Department of Administrative Reforms & Public Grievances, Ministry of Personnel Public Grievances and Pension, Government of India. Details and contact number of Public Grievance Officer are displayed in the website of the Company, viz. www.cpcLco.in.

RISK MANAGEMENT

The reports pertaining to the year 2011-12 under the Risk Assessment & Minimization Procedures were reviewed by the Executive Committee and also by the Audit Committee and Board of Directors of the Company.

A Risk Management Policy for the year 2012-13 has been prepared by the Committee constituted for this purpose and the report submitted by the Committee was also reviewed by the Audit Committee and the Board

CORPORATE GOVERNANCE

Your Company has taken structured initatitive towards Corporate Governance and its practices are valued by various stakeholders. The Corporate Governance practices are based on multi layered checks and balances to ensure transparency and accountability.

Your Company complied with all the mandatory requirements of Corporate Governance Guidelines issued by Securities & Exchange Board of India and Department of Public Enterprises (DPE), Government of India for the year 2011-12, except the clause relating to the appointment of Independent Directors. A separate section on Corporate Governance forms part of this Annual Report

Your Company also complies with the Voluntary Guidelines on Corporate Governance issued by Ministry of Corporate Affairs, Government of India in December 2009, as far as practicable.

SECRETARIAL AUDIT

In line with the provisions of the Voluntary Guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, your Company carried out Secretarial Audit for the year 2011-12 from M/s. S.Sandeep & Associates, Company Secretaries and their report forms part of the Annual Report The Secretarial Audit Report confirms that the company has complied with all the applicable provisions of the Companies Act, SEBI Guidelines, rules etc except with the clause relating to appointment of Independent Directors.

RIGHT TO INFORMATION

The Right to Information Act, 2005 is applicable to your company. In accordance with the provisions of the RTI Act, necessary disclosures have been made in the website of the company.

During the year, 54 applications under the RTI Act were received and disposed off in time.

VIGILANCE

Your Company is committed to ethical conduct of business and the main focus of the vigilance department is to create a culture of integrity and probity in the company.

System studies were undertaken to improve compliance with the procedures and also to enhance operational efficiencies. Payments of bills to vendors/ contractors effected through ECS/EFT achieved 98 %, demonstrating the increased focus maintained by the vigilance on the use of technology.

Vigilance Awareness week was observed in a befitting manner with the theme "Participative Vigilance" which was actively participated by employees, customers, vendors , contractors, service providers etc.

INTEGRITY PACT

Your Company has a Memorandum of Understanding (MoU) with Transparency International India (TII) for implementing an Integrity Pact Program focused on improving transparency in business dealings.

19 major contracts/ works were covered under the Integrity pact during the year. Periodical review meetings were held with Independent External Monitors. An interactive meet was also organised with Independent External Monitors for major contractors.

HINDI IMPLEMENTATION

During the year, a serious of initiatives were undertaken for promotion and propagation of Hindi in official communication and to ensure implementation of the Official Language Policy of the Government of India. The Official Language Implementation Committee monitors the implementation of Official Language Policy on a quarterly basis.

Various activities like workshops, meetings, competitions, etc., were organised during the year and the World Hindi Day was celebrated on 10.01.2012.

Your company won the prestigious Rajbhasha shield (IInd prize) instituted by the Town Official Language Implementation Committee, Chennai under the Public Sector Unit - Big category

STATUTORY INFORMATION

- Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

- Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under Section 217(1) (e) of the Companies Act, 1956 and the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-I).

- Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India is Annexed and forms part of this Report (Please see Annexure-III).

- Management Discussion and Analysis Report as required under Clause 49 IV F of the Listing Agreement is annexed and forms part of the Report (Annexure IV).

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors' Responsibility Statement, it is hereby confirmed, that,

i) In the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

iv) The Directors have prepared the annual accounts for the financial year ended March 31, 2012, on a going concern basis; and

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

AUDITORS

M/s. Chandran & Raman, Chennai and M/s S.Venkatram & Co., Chennai have been appointed as Joint Statutory Auditors of the Company for the financial year 2011-2012 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs. 7.5 lakh ( Rs. 3.75 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

DIRECTORS

Mr.Rajkumar Ghosh, Director (Refineries) Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL effective 02.09.2011 in place of Mr.B.N.Bankapur.

Mr.K.Balachandran, Managing Director was relieved from the services of the company effective 17.11.2011 as he has tendered his resignation and Mr.S.Venkataramana, Director (Operations) has been holding the additional charge of the post of the Managing Director, till 05.07.2012. Mr. A.S. Basu, Executive Director (Operations), Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL and also as the Managing Director effective 06.07.2012.

Your Directors place on record their appreciation of the valuable contributions made by Mr.K.Balachandran and Mr.B.N.Bankapur during their tenure.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude for the valuable guidance and co-operation received from the Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Naftiran Intertrade Company Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government of Tamil Nadu, Central Vigilance Commission, Financial Institutions and commercial banks.

Your Directors are also thankful to the valuable suggestions and guidance received from the Statutory Auditors and the Comptroller & Auditor General of India.

Your Directors place on record their special appreciation to the valued shareholders for their support.

Your Directors sincerely acknowledge the contribution, dedication, commitment and perseverance displayed by all the employees.

For and on behalf of the Board of Directors

Date : 03.08.2012 R.S. BUTOLA

Place : New Delhi Chairman

Mar 31, 2011

To the Shareholders of Chennai Petroleum,

On behalf of the Board of Directors of your Company, I have great pleasure in presenting to you the 45th Annual Report on the performance of your Company, together with the Audited Statement of Accounts for the year ended March 31, 2011.

SIGNIFICANT HIGHLIGHTS

- Your company clocked its highest ever turnover of Rs. 38,128 crore in the year 2010-11.

- It achieved the highest ever Crude thruput of 10,748 TMT in the year.(Previous best : 10,058 TMT in 2009-10).

- It successfully completed the revamp of Crude Distillation Unit III from 3 MMTPA to 4 MMTPA.

- The revamp of Catalytic Reforming Unit (Semi-Regenerative) to Continuous Catalytic Reforming Unit was successfully completed during the year.

- The new Naphtha Hydro-treater (NHDT) and Isomerisation Units for the production of Motor Spirit were also successfully completed in January 2011.

- The Fluidised Catalytic Cracking Unit (FCCU) achieved the highest ever thruput of 1006 TMT in 2010-11 (Previous best : 917 TMT in 2009-10).

- The Once Through Hydrocracking Unit (OHCU) achieved the highest ever thruput of 1995 TMT in 2010-11 (Previous best : 1856 TMT in 2008-09).

- The Manali Refinery won Total Productive Maintenance (TPM) Excellence Award - Category A from the Japan Institute of Plant Maintenance (JIPM).

- The Manali Refinery also achieved the highest ever Motor Spirit production of 866 TMT in 2010-11. (Previous best: 845 TMT in 2008-09).

- The Manali Refinery obtained NABL Accreditation for its Quality Control Laboratory in June 2010.

- The Cauvery Basin Refinery (CBR) improved the crude thruput to 703 TMT as compared to 514 TMT in 2009-10.

- The Cauvery Basin Refinery also achieved the highest ever distillate yield of 83.23 wt % on crude in 2010-11 (Previous best : 81.37 wt. % in 2006-07).

- Prime Minister's Shram Vir Award was bestowed on your Company's employee Mr.C. Ramadoss in September 2010 for his outstanding contribution towards improvement in Productivity and Quality.

- Your Company was adjudged as the ÃSignificant Turnaround PSU' for meritorious performance by Dalal Street Investment Journal.

- Your Company also received Special Commendation Award from Petrofed for Environmental Sustainability. MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure and Developments

The world oil demand experienced a spurt in 2010 by about 2.3 mbd (million barrels of oil per day) equivalent to 114 MMTPA, over the previous year and this was the second largest increase in the last thirty years. The demand for oil is likely to increase further by 1.4 mbd (equivalent to 89 MMTPA) in 2011 which is likely to put pressure on the crude oil prices, though the increased demand will be met mostly by OPEC countries. As per the International Energy Agency (IEA), the global energy consumption is projected to increase by 18% from 2008 to 2020 rising from 12300 MTOE to 14500 MTOE. The growth in demand slows progressively, from an average of 1.4% per year in the period 2008-2020 to 0.96% per year in 2020-2035. The energy mix which will meet this increased demand will be mainly from oil (30%), coal (27%) followed by gas (22%) and other renewables (2%).

The year saw a sudden surge in crude oil prices in the last quarter with the price of Brent crude crossing $120 /bbl in March 2011, due to unrest in North Africa and Middle East although the major oil producing countries were not affected by it. The product cracks which showed an upward trend in the first few months of 2011 due to the expected increase in demand by Japan for its reconstruction activities following the recent natural calamity, narrowed down in the last month. We expect improvements in the cracks which may further spurt with expected upswing in the global economy.

India will continue to develop into a major refining hub in the Asian region, fourth largest refining center in the world with the total refining capacity expected to touch 232 MMTPA by 2012-13.

The consumption of Petroleum, Oil and Lubricant (POL) products in India for the year ended 31.03.2011 touched 141.75 Million tons, registering an increase of 2.9% over the previous year. The sale of Motor Spirit (MS), registered a growth of 10.9% over the previous year. The growth in the Southern Region was particularly higher at 11.5%. The sale of HSD, LPG and ATF too registered robust growth of 6.6%, 8.9% and 9.4% respectively over the last year. The demand for FO/LSHS on the other hand continues to decline. The demand for Naphtha too continues to decline due to substitution by Gas.

The successful implementation of the quality upgradation projects initiated by Indian Refineries paved the way for introduction of environment friendly upgraded transportation fuels viz., Euro IV MS and HSD in 13 Metros and BS III MS and HSD in the rest of the country. It is indeed praiseworthy that your Company's Refineries at Manali and Cauvery Basin also came up with the production of the upgraded quality of fuel, well ahead of the schedule.

The demand for Natural Gas in India is increasing from the current level of 170 MMSCMD (2010-11) to 254 MMSCMD by 2014-15 as per projections made by the Research group of CRISIL. While significant emphasis has been laid on exploration and production enhancement within the country, the bulk of the gas demand will need to be met through LNG imports. In view of the increasing demand for natural gas, a number of LNG terminals are being proposed by industry players, some of which may come at Mangalore, Ennore, Mundra and Paradeep. Besides, certain FSRU's (Floating Storage & Regasification Units) are also being conceptualized at port locations like Dighi, Mumbai, Paradeep, Vizag, Mangalore, Cuddalore, etc. The Ennore LNG terminal being promoted by IOC is expected to meet the natural gas requirement of your Company and other industries in the Manali area.

Opportunities and Threats

The rising energy demand and increasing societal aspirations especially in the emerging economies and the need for sustainable development require the oil & gas industry to ensure the security of energy supplies at affordable cost.

The major challenges for the Oil and Gas industry, apart from increasing oil & gas reserves, is to use clean and efficient refining processes to produce transportation fuels, meeting the stringent specifications and increase the value added products such as petrochemical feedstocks. The reduction in demand of heavier bottom oils means that the bottom of the barrel should be converted to higher products, thus optimizing the value chain. Diversification of energy sources for the production of transportation fuels and hydrogen in the longer term, reducing vehicle emissions, increasing vehicle efficiencies and reducing CO2 emissions are other pressing priorities.

Risks, Concerns and Outlook

The rise in crude prices will have a significant impact on the industry, as the oil sector in India is only partially decontrolled. The impact of crisis in North Africa / Middle East and difficulties arising in remittances for the Iranian crude remain areas of concern, even though they have not affected the supplies. Ensuring security of sustained supplies of crude oil by increasing the geographical spread for crude sourcing to other regions such as CIS, Africa and South America may assume priority in the wake of crisis, if any, in Middle East and North Africa which undoubtedly will enhance the freight costs but the same will have to be offset by optimal spread of heavy and light crudes.

The National Action Plan for Climate Change (NAPCC) has mandated a renewable energy purchase obligation (RPO) at 5% for 2010 and this will increase by 1% every year for the next 10 years. There is a separate category for Solar Energy in the RPO by obligated entities. The refining industry in India has been generating its own power based on internal fuels for reliability and with the RPO obligation, the cost of power is likely to increase. The oil industry in India has initiated several projects for generating renewable energy on its own. This augurs well for achieving the clean energy goal.

Internal Control Systems and their Adequacy

Your Company, realizing the need for effective control systems, has developed stringent internal control systems for monitoring its operations and for ensuring transparency and risk mitigation.

The internal control systems in the Company comprises of various methods and procedures as detailed below :

- An Internal Audit system to carry out audit of various areas of Company's operations to ensure authenticity and reliability of records.

- A clear Delegation of Authority detailing the financial powers of authorities across the hierarchy of the Company is in place. This is compiled in a manual for easy reference of concerned.

- Each Department of the Company has well documented Manual which narrates the procedures to be followed for attaining the objectives of the Department.

- The Company has a Vigilance Department with officials drawn from different functions to ensure preventive vigilance and carry out regular systems and procedures checks.

- The Comptroller & Auditor General of India carries out various reviews of the activities of the Company and acts as a watchdog.

- A Whistle Blower Policy is in place.

- The Integrity Pact Program is in place since March 2009. This is aimed at enhancing transparency in business transactions, contracts and procurement processes.

PERFORMANCE HIGHLIGHTS

Physical Performance 2010 - 11 2009 - 10

CRUDE THRUPUT (in TMT)

Imported 9105.0 8517.0

Indigenous 1643.0 1541.0

Total 10748.0 10058.0

PRODUCTION (in TMT)

Light Ends 2279.0 2077.0

Middle Distillates 5141.0 4923.0

Heavy Ends 2177.0 1996.0

Lube Base Stocks 186.0 202.0

Paraffin Wax 27.0 29.0

Others (Intermediaries) 25.0 (14.0)

Other Inputs (87.0) (54.0)

Fuel & Loss 996.0 899.0

Total 10748.0 10058.0

Note :

The figures for the year 2010-11 do not include production of LPG (6.7 TMT) and Light Naphtha (3.3 TMT) from the Gas Separation Unit at Cauvery Basin Refinery. Similarly, the figures for the year 2009-10 do not include production of LPG (7.7 TMT) and Naphtha (3.3 TMT) from the same unit.

The salient features of operations during the year include the following:

Manali Refinery:

- The Manali Refinery surpassed 10.0 MMT mark for the first time, achieving a crude throughput of 10.045 MMT

- It completed the revamp of Crude Distillation Unit III from 3 MMTPA to 4 MMTPA.

- The Manali Refinery also completed the revamp of Catalytic Reforming Unit (Semi-Regenerative) to Continuous Catalytic Reforming Unit.

- The Fluidised Catalytic Cracking Unit (FCCU) achieved the highest ever throughput of 1006 TMT as against the previous best of 917 TMT in 2009-10.

- The Once Through Hydrocracking Unit (OHCU) achieved highest ever throughput of 1995 TMT as against the previous best of 1856 TMT in 2008-09.

- Highest ever production of the following products was achieved :

(Figures in TMT)

Product 2010-11 Previous Best (year)

High Speed Diesel 3863.0 3791.0 (2009-10)

Naphtha 979.0 871.0 (2009-10)

Motor Spirit 860.0 845.0 (2008-09)

- The Manali Refinery was awarded the TPM Excellence Award - Category A by the Japan Institute of Plant Maintenance (JIPM).

Cauvery Basin Refinery:

- The CBR processed 703.3 TMT of Crude as compared to 514 TMT in the previous year.

- The LP Gas supply from Kamalapuram increased to 25000 SCMD from 17000 SCMD resulting in increased recovery of LPG and Fuel Gas availability for Refinery operations.

- The unit also achieved highest ever Net Gas intake of 33.86 TMT as against the previous best of 23.8 TMT in 2004-05.

- The unit further achieved its lowest ever Energy index of 119.8 MBTU/BBL/NRGF as against the previous best of 127.3 achieved in 2009-10.

- The unit also successfully achieved ÃExcellence in consistent TPM commitment' health check-up in February 2011.

Financial Results (Rs. in crore)

2010-2011 2009-2010

Gross Turnover 38128.26 29183.84

Profit before Interest,

Depreciation and Tax 1332.44 1088.26

Interest 254.45 137.36

Depreciation and Amortization 314.47 267.14

Profit before Tax 763.52 683.76

Provision for Taxation

- Income Tax (Net) 223.48 (81.44)

- Deferred Tax 28.52 161.95

- Fringe Benefit Tax - 0.03

Profit after Tax 511.52 603.22

Value Added 1748.65 1540.49

The Company has achieved a turnover of Rs. 38,128 crore during the year, as compared to Rs.29,184 Crore in the previous year. The profit after tax stood at Rs. 511.52 Crore as compared to Rs. 603.22 crore in the previous year. The value addition during the year is Rs. 1748.65 crore as compared to Rs. 1540.49 crore in the previous year.

The Reserves and Surplus also registered an increase from Rs. 3313.08 crore as on 31.03.2010 to Rs. 3616.92 crore as on March 31, 2011.

The book value per share of your Company has increased from Rs. 232.49 in the year 2009-2010 to Rs. 252.90 in the year 2010-2011.

Your Company has not accepted any fresh public deposits during the year 2010-11.

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.

DIVIDEND

The Board of Directors of your Company is pleased to recommend a dividend of 120% on the paid-up share capital of the Company representing Rs. 12/- per Equity share of Rs.10/- each for the year 2010-11, which is at the same level as declared in the last year.

MoU PERFORMANCE

Your Company signed an MoU with Indian Oil Corporation Limited, the holding Company for the year 2010-11, as per the guidelines issued by the Department of Public Enterprises (DPE). The provisional rating for the year 2010-11 is "Excellent".

MARKETING

Indian Oil Corporation Limited, the holding Company continues to market a majority of the products of your Company.

The sales of certain products directly marketed by the Company are :

(Qty. in TMT)

S. No. Product 2009-10 2010-11

1 LABFS 42.0 66.0

2 Naphtha 200.7 211.7

3 MEKFS 6.6 8.0

4 Propylene 33.6 33.7

5 FG Hexane 5.4 6.5

6 Paraffin wax 26.0 29.7

7 Sulphur 43.4 52.0

8 Propane 1.7 1.9

During the year, the Company has achieved highest ever sales of Propane, Propylene, Paraffin wax and Sulphur.

During the year, four Customer Meets were arranged at various locations and 18 new customers were registered for the supply of Sulphur, Hexane, CBFS, Propane and Propylene.

PROJECTS

Your Company continues to accord high priority for the implementation of projects. Your Company made an investment of Rs.674.78 crore on various projects during 2010-11, (cumulative expenditure of Rs. 2150.05 crore upto 2010-11) out of the approved outlay of Rs. 3575 Crore for the XI Plan (2007-2012).

Completed Projects

Euro-IV Project Ã NHDT / ISOM / DHDT Units:

Auto Fuel Quality Upgradation Project to produce MS/HSD meeting Euro-IV specifications for Chennai and Bangalore and Euro-III equivalent specifications for the rest of the locations has been undertaken at an estimated cost of Rs. 2615.69 crore in Manali Refinery as per the Auto Fuel Policy of the Government of India.

The Naphtha Hydro-treater / Isomerisation (NHDT/ISOM) units for MS production was commissioned in January 2011 and the Diesel Hydro-treater (DHDT) unit for Diesel quality Upgradation was commissioned in May 2011.

Projects Under Implementation : Euro-IV Project :

The Utilities and Offsite facilities of Euro IV Auto Fuel quality upgradation project are in various stages of completion. A new Hydrogen Generation Unit to augment the existing Hydrogen Generation capacity is under implementation. All these facilities are expected to be completed by December 2011.

Revamp of existing CDU/VDU-II from 3.7 to 4.3 MMTPA

A project to enhance the unit capacity from existing 3.7 MMTPA to 4.3 MMTPA is being implemented at a cost of Rs.333.99 Crore. This project is expected to be completed in May 2012.

Resid Upgradation Project

A Resid Upgradation Project to improve the distillate yield of the Manali refinery from the present level of 68.4 wt% to 75.9 wt% was approved for implementation at an estimated cost of Rs.3110.36 Crores. This project is expected to increase the processing of High Sulphur Crude from the present level of 67% to 83%. This project is scheduled to be completed within 33 months from the date of Environmental Clearance, which is awaited.

New Crude Oil Pipeline

Your Company is implementing a new 42" Crude oil Pipeline Project to mitigate the risk associated with transportation of Crude Oil through the existing 30" Crude Oil Pipeline from Chennai Port to Manali Refinery, at a cost of Rs.126 Crore. M/s.Indian Oil Corporation Limited is the EPCM contractor for this project. This project is scheduled to be completed within 18 months from the date of receipt of Environment Clearance, which is awaited.

CBR 20" Crude line

The Cauvery Basin Refinery of your Company is implementing a 20" inter connecting crude oil pipeline between Karaikkal Port and CPCL-CBR's Chidambaranar Oil Jetty at a cost of Rs.10.69 Crore. The Pipelines Division of Indian Oil Corporation Ltd. has been engaged as EPCM contractor for executing the project. This project is scheduled to be completed by December 2011.

New Projects

Refinery Expansion Project:

Your Company proposes to increase the capacity of the Manali Refinery with a Brown field refinery expansion project with matching secondary processing facilities. The process configuration for this brown field refinery will be chosen in such a manner that the new units are integrated with the existing refinery complex for better energy / utilities management and to achieve optimal product pattern. The preparation of Pre-Feasibility Report is in progress.

Natural Gas

Your Company is equipping itself to receive the Natural Gas for its heaters and boilers and also for its Power Plant and Hydrogen Generation Units. In this connection, Heads of Agreement for supply of LNG have already been signed with IOC. The LNG will become available once the proposed LNG Terminal at Ennore is successfully completed by IOC.

STRATEGIC INITIATIVES

Your Company adopts several innovative strategies and technologies aimed towards achieving higher Refinery margins and profitability. As a part of the Corporate Plan, a Board Strategy Meet was held in October 2010, wherein strategies towards Safety & Environment, Growth, Human Resources and Finance were reviewed and deliberated.

INDIAN ADDITIVES LIMITED

Your Company entered into a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) to form Indian Additives Limited (IAL) in the year 1989 for manufacturing Lube Additives.

IAL achieved a turnover of Rs. 375.28 Crore (Provisional) during the year 2010-11, as against Rs.349.90 Crore in the previous year. The Profit after Tax for 2010-11 is Rs.37.45 Crore (Provisional) as against Rs.41.29 Crore in the previous year.

INFORMATION TECHNOLOGY

Your company is continuously adopting state-of- the art IT solutions to keep pace with the fast changing industry which helps in continuous improvement of operating efficiency and productivity of the employees.

During the year, a System Audit on SAP was carried out by an External Agency, establishing the reliability and adequacy of the System Controls and Functionality Configuration.

Significant initiatives in the area of Information Technology undertaken during the year include implementation of e-tendering, introduction of Bio-metric system for the contract workers, introduction of an e-waste policy and File Tracking System.

RESEARCH AND DEVELOPMENT (R&D)

Your Company is conscious of the fact that the major thrust for R&D in the next decade would be to reduce the carbon foot print of our processes, products & technologies.

Your Company has an in house R&D Centre which provides support to refinery operations by carrying out Pilot Plant evaluation of catalysts and feed stocks for secondary processing facilities. The R&D Centre also carried out process and feed optimization studies. During the year, additional analytical facilities were commissioned for Catalysts Performance monitoring of Continuous Catalytic Reforming (CCR) Unit.

Extensive reformer pilot plant studies were carried out to successfully develop a Robust CCR model for supporting the commercial CCR unit.

Your Company has entered into research cooperation with the Indian Institute of Technology, Madras, which has resulted in generating a database required for proposing changes in the current BIS specification on paving grade Bitumen.

SAFETY PERFORMANCE

Your Company is committed to promote globally comparable levels of safety in all its areas of operation with clear emphasis on improving the safety standards and accords paramount importance to the safety of its employees. The above attributes are also well embedded in the organizational values of the company.

During the year, several programmes were conducted for the benefit of the employees and contract workers which included training, workshops and mock drills.

The 8th External Safety Audit (ESA) was conducted by Oil Industry Safety Directorate (OISD).

An off-site emergency mock drill was conducted by M/s Indian Oiltanking Ltd. (IOTL) in January 2011 with active participation of your Company, District Authorities and officials from the Factory Inspectorate.

Your Company has become a Corporate member in the Centre for Chemical Process Safety (CCPS), a non-profit organization formed by the American Institute of Chemical Engineers to be the global response to chemical disasters, which will be helpful for the Company in adopting state of art process safety technologies and management practices.

A One -Day seminar on " Emergency Management " for the benefit of the employees and members of Maximum Accident Hazard (MAH) units in Manali, Ennore and Ponneri was organized. Around 170 officials from your Company and the neighbouring industries attended the seminar.

An educative short film titled "ACCHAMILLAI" on the subject of Offsite Emergency Preparedness was produced by the Company, to propagate awareness on the subject.

ENVIRONMENTAL PERFORMANCE

Your Company is committed to improve the operational excellence alongwith improvement in environment performance and is highly sensitive to the emerging requirements of the environment and the stake holders. Your Company's sustainability initiatives are aimed at providing pollution free environment and constantly endeavor to minimize the direct and indirect environmental impact of its business operations.

As a part of Leak Detection and Repair Program, inventorization of fugitive emission from Process Units have been initiated and total inventorization in Refinery II area completed in January 2011.

Efforts were undertaken to promote Rain water harvesting by developing an area of 30000 sq.mtrs. By providing rain water harvesting, rain water will be allowed to percolate down the ground and join the existing water table thereby improving the quality of the underground water. Action was also initiated to estimate the total Green House Gas Emission from Refinery Operations and also to evaluate the carbon foot print of the Refinery.

RENEWABLE ENERGY DEVELOPMENT

Recognising the need for renewable energy, your Company implemented the 17.6 MW Windmill project in September 2007.

Windmill project executed by the Company has been registered as a Clean Development Mechanism (CDM) Project.

Your Company also proposes to put up a 5 MW Solar Photo Voltaic Power Project under the Jawaharlal Nehru National Solar Mission Scheme. The Detailed Feasibility Report for the project has been completed.

ENERGY CONSERVATION

Your Company lays great emphasis on Energy Conservation through continuous in-house process monitoring and keeping abreast with the latest technological developments.

Several energy conservation measures undertaken by the Company enabled the Manali Refinery to achieve an Energy Index of 71.4 MBN during the year.

The Energy Conservations Measures undertaken during the year are detailed in Annexure-I.

REFINERY BUSINESS OPTIMISATION

The Integrated Refinery Business Improvement Programme (IRBIP) is being implemented in association with the Centre for High Technology and M/s. Shell Global Solutions International. Ten projects with a net benefit of 6.106 Million US Dollars (8.5 Cents per bbl) were completed and one Project having an estimated benefit of 6.103 Million US Dollars (8.5 Cents per bbl) for Risk and Reliability Management is under implementation.

PROCESS OPTIMISATION

Your Company played a pioneering role among the Indian Refineries with regard to the implementation of Optimisation and Advanced Control techniques and has always endeavoured to implement the best process optimisation techniques.

The OPC connectivity for the real time data of Ambient Air Quality Monitoring Systems (AAQMS) and the stack emissions were configured on the system placed at Environment Data Centre. A web program was also developed to display the AAQMS and stack emission data in real time to Tamil Nadu Pollution Control Board (TNPCB).

TOTAL PRODUCTIVE MAINTENANCE (TPM)

In recognition of the sustained implementation of TPM practices, the Manali Refinery of your Company was bestowed with the coveted "TPM Excellence" Award by the Japan Institute of Plant Maintenance (JIPM), for implementing all the eight pillars of TPM.

During the year, the Cauvery Basin Refinery of your Company successfully completed the TPM Health Check Audit to contest for TPM Consistency Award, which is the next level of TPM Excellence Award.

Two teams from your Company participated and presented papers in the Sixteenth National Kaizen Conference organized by CII at New Delhi in March 2011.

SHEQ Policy

Safety, Health, Environment and Quality continued to receive top priority and your Company continued its commitment in conducting business with a strong environment conscience. A comprehensive SHEQ Policy has been put in place to promote sustainable development, safe work place and quality of work life of employees. During the year, recertification audits were conducted and both Refineries of your Company were recertified for ISO 9001:2008 - Quality Management System, ISO 14001:2004- Environment Management System and OHSAS 18001:2007-Occupational Health & Safety Management System.

NEW VISION AND MISSION STATEMENT

Your Company has finalised a new vision and mission statement which focuses on creating value for the stakeholders through world-class performance by the manufacturing and supply of petro products at competitive prices, meeting the quality expectations of the customers, proactively fulfilling social commitments including environment and safety, constantly innovating new products and alternate fuels, ensuring high standards of business ethics and corporate governance.

HUMAN RESOURCES

Your Company regards its employees as one of the key stakeholders. Your company attracts the best talent in the industry on a sustained basis and encourages, motivates and retains the best talent at all levels for the growth of the organization.

In order to improve the communication among our employees at various levels and facilitate a platform to express and discuss issues like performance, achievements, welfare, safety and other work related matters for improving the working conditions, your company has initiated a concept called "Reach-in". This process helps employees, to have face-to-face interaction with the concerned Managers. During the year, 19 "Reach-in" programmes were successfully conducted.

The total manpower of your Company as on 31st March 2011 was 1773 (1735 as on 31st March 2010) comprising 808 supervisors and 965 non-supervisors (810 supervisors and 925 non-supervisors as on 31st March 2010).

The HR Initiatives undertaken during the previous years like Mentoring, Department-wise Open House meets and Field visits, Learning forum were continued during the year.

The Industrial Relations climate was congenial during the year with timely dissemination and sharing of information with the collectives. Three quarterly communications meetings were held with the collectives to communicate the quarterly / annual performance and growth prospects of the Company.

The backlog vacancies of persons with Disabilities, which was 12 in the beginning of the year, was reduced to 8 by recruiting 4 Engineers through a special recruitment drive.

Your Company has a long standing tradition of developing its human resources by organizing training programs for its employees at all levels. During the year, your Company utilized 6331 man-days covering employees at all levels in various training programs. Based on the competency mapping, five competency development programs, each of 4 days duration covering 79 managers were organized. In addition to the formal training programs aimed at developing the technical skill of the employees, innovative programs related to physical and mental health of the employees like emotional healing, yoga, meditation, etc. were also conducted.

Your Company has been meticulously following the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and Persons with Disabilities. Out of the total manpower, there were 439 SC employees (previous year: 434) and 36 ST employees (previous year: 36) as on 31.03.2011 constituting 24.76% and 2.03% of the total manpower respectively.

The statistics relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2011 is given in Annexure-II.

WELFARE OF WOMEN

Your Company firmly believes that women employees play a vital role in its human capital profile. As on 31.03.2011, 83 women employees were on the rolls of your Company, of whom 34 were in the Supervisory Grade and 49 were in the Non-supervisory Grade.

International Women's Day was celebrated by organizing a programme on the theme "Celebrating the past, Planning for the future". Lectures on topics of varied interests on Women Development and empowerment were delivered during the occasion.

Your Company was bestowed with the "Best Enterprise Award" by the Forum of Women In Public Sector (WIPS) under the aegis of Standing Conference on Public Enterprises (SCOPE).

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company continued its endeavor in making a positive impact to the under privileged communities in and around its Refineries by supporting a wide range of socio-economic initiatives.

During the year, an amount of ?. 368.51 lakhs was spent on various Corporate Social Responsibility activities as compared to ?.169.72 lakhs spent in the last year and the highlights include:

- Skill development Training Programme of 6 months duration in Plastic Processing Machine Operator course in association with Central Institute for Plastic Education Training (CIPET) and 50 students were benefited.

- Mobile Lab Science Education Program through Agastya International Foundation, Bangalore. This Mobile Lab contains 24 numbers of Science Education Modules / equipments. The Mobile lab van visited 56 schools in Tiruvallur District and covered 17200 students during the year.

- Merit Scholarships to 788 students in 14 Schools around Manali area / CPCL ITI & Polytechnic College.

- 12 Comprehensive Eye Care Camps for the benefit of people living in and around Manali, in association with Sankara Nethralaya.

- Sponsored a Workshop on "Protection of girl child, prevention of child abuse, familiarising the laws for the Protection of Women Rights" organized by TamilNadu Social Welfare Board.

- Provided 4 RO plants for drinking water at 3 Government Schools in and around Manali.

The CSR activities of your Company are reviewed every quarter by a Committee of the Board of Directors of the Company. An Independent External Agency carried out the evaluation of the CSR activities of your Company for the year 2009-10. The Evaluation Report complimented the good work done by your Company on CSR front.

Significant CSR activities carried out at Cauvery Basin Refinery include the following :

- Construction of Kitchen buildings at schools located near the Cauvery Basin Refinery.

- Provision of sanitation facilities at Panangudi, Muttam villages near the Cauvery Basin Refinery.

OCCUPATIONAL HEALTH

Your Company's Occupational Health Services (OHS) is persevered to maintain global standards in providing health care to its permanent and contract employees. As a part of health surveillance, about 74 percent of the employees were examined and suitably advised.

Personal and family counselling services for employees was introduced to improve the work life balance. A programme on "Life Style management & Anti-aging" for employees along with their spouse was conducted.

PUBLIC GRIEVANCES

Your Company accords prime importance to grievances received from the public and has a well established Grievance Redressal System. The Company Secretary is the designated Public Grievance Officer. The details and contact number of the Public Grievance Officer are displayed in the website of your Company, viz. www.cpcl.co.in.

Your Company implemented the Centralized Public Grievances Redressal and Monitoring System (CPGRAMS) as advised by the Department of Administrative Reforms & Public Grievances, Ministry of Personnel, Public Grievances and Pension, Govt. of India and provided a link to the website www.pgportal.gov.in under the heading "Public Grievances" to help the citizens to lodge / monitor the grievances electronically. Grievances, if any, against the Company which are lodged by the citizens in the above website are monitored and action taken for redressal. During the year, three complaints were received and addressed to.

RISK MANAGEMENT

The reports pertaining to the year 2010-11 under the Risk Assessment & Minimization Procedures were reviewed by the Executive Committee and also by the Board of Directors of your Company.

CORPORATE GOVERNANCE

Your Company firmly believes that good governance practices stem from the culture and mindset of the organization. Good governance fosters a culture, wherein high standards of ethical behaviour, accountability and transparency are ingrained in all its operations and shared by its Board of Directors, Management and Employees.

Your Company complied with all the mandatory requirements of Corporate Governance Guidelines issued by the Securities & Exchange Board of India (SEBI) and the Department of Public Enterprises (DPE), Government of India for the year 2010-11, except the clause relating to the appointment of Independent Directors. As against the requirement of six Independent Directors under the Listing Agreement and DPE Guidelines, your Company has three Independent Directors. The appointment of additional Independent Directors is under the consideration of Government of India. A separate section on Corporate Governance forms part of this Annual Report.

Your Company also complies with the Voluntary Guidelines on Corporate Governance issued by Ministry of Corporate Affairs, Government of India in December 2009, as far as practicable.

SECRETARIAL AUDIT

In line with the provisions of the Voluntary Guidelines of Corporate Governance issued by the Ministry of Corporate Affairs, your Company carried out Secretarial Audit for the year 2010-11. As per the report, the Company has complied with the provisions of the Companies Act, 1956 and the rules made under the Act and also the Memorandum and Articles of Association of the Company, with regard to, maintenance of statutory records, filing of Forms and Returns, convening of Board / Committee / Shareholders meeting, transfer and transmission of shares, declaration and payment of dividend, Secretarial Standards, SEBI's Takeover and Insider Trading Regulations and Listing Agreement (except the Clause relating to the appointment of Independent Directors).

RIGHT TO INFORMATION

Your Company has implemented the Right to Information Act, 2005 with a view to ensure that the citizens of India have access to information within the control of the Company.

During the year, 27 applications under the RTI Act were received and information furnished to all applicants.

VIGILANCE

Your Company firmly believes that honesty, integrity and transparency are the corner stones of a trustworthy society. To propagate this paradigm, a number of vigilance awareness programs were conducted to inculcate commitment to values and redefine the roles and responsibilities of the employees in vigilance activities.

As part of Preventive Vigilance initiatives, various system studies were taken up to strengthen internal systems and procedures and to enhance operational efficiency. During the year the process of e-tendering was initiated.

As a result of the increased thrust on leveraging of technologies, 98% of the bills of vendors/contractors and service providers were processed through Electronic Clearance Service (ECS) / Electronic Fund Transfers (EFT). All open tenders are published on CPCL web-site in order to encourage more competition and to improve transparency.

INTEGRITY PACT

Your Company has implemented the Integrity Pact Program since March 2009, which is aimed towards enhancing the transparency in business transactions, contracts and procurement processes. Presently the threshold limit for the application of Integrity Pact is Rs. 5 crores. During the year, a total of 26 tenders above this threshold limit with a total value of Rs. 1269.15 Crores were covered.

The Integrity Pact has strengthened the established systems & procedures by creating trust amongst the contractors, vendors and suppliers.

HINDI IMPLEMENTATION

During the year, your company intensified its efforts for the progressive use of Hindi in Official work, in accordance with the provisions of the Official Language Act, 1963 and the Official Language Rules, 1976.

The Official Language Implementation Committee met periodically and reviewed the implementation of Official Language Policy. Suggestions of the Committee were implemented resulting in overall improvement of the Official Language implementation practices in the company.

STATUTORY INFORMATION

- Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

- Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under Section 217(1) (e) of the Companies Act, 1956 and the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-I).

- Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India is Annexed and forms part of this Report (Please see Annexure-III).

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors' Responsibility Statement, it is hereby confirmed that,

i) in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts for the financial year ended March 31, 2011, on a going concern basis; and

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

AUDITORS

M/s. M.Thomas & Co., Chennai and M/s Sreedhar, Suresh & Rajagopalan, Chennai have been appointed as Joint Statutory Auditors of your Company for the financial year 2010-2011 by the Comptroller and Auditor General of India. The Board of Directors of your Company fixed a remuneration of ?. 7.5 lakh (?. 3.75 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

COST AUDITOR

M/s. J.V. Associates, Cost Accountants, Chennai have been appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2010-11 in respect of Petroleum & Petrochemical Sector, including Chemicals, at a total remuneration of ?.1,70,000/- (Rupees One lakh Seventy thousand only) per annum plus applicable taxes and out-of-pocket expenses, if any, to conduct the audit of cost accounts maintained by the Company.

The Cost Statements for the financial year 2010-11 will be filed before 30.9.2011.

DIRECTORS

Mr.B.N.Bankapur, Director (Refineries), Indian Oil Corporation Limited has been appointed as a Director on the Board of CPCL effective 06.09.2010 in place of Mr.V.C.Agrawal.

Mr. P.K. Singh, Director (R&A), Ministry of Petroleum and Natural Gas has been appointed as a Director on the Board of CPCL effective 06.09.2010 in place of Mr.Sanjay Gupta.

Mr.S.Venkataramana, General Manager (Operations) was appointed as Director (Operations) of the Company effective 3.10.2010.

Mr.R.S.Butola, Chairman, Indian Oil Corporation Limited was appointed as a Director on the Board of Chennai Petroleum Corporation Limited, effective 08.03.2011 in place of Mr.B.M.Bansal.

Mr.S.Chandrasekaran, Director (Technical) was relieved from the services of the Company from 11.5.2011 upon acceptance of his resignation and Mr.T.S. Ramachandran, General Manager, Indian Oil Corporation Limited, was appointed as Director (Technical) of the company effective 26.07.2011.

Mr. N.C. Sridharan, Director (Finance) retired from the services of the Company on attaining the age of superannuation on 31.05.2011. Ms.D.Lilly, Executive Director, Indian Oil Corporation Limited has been appointed as Director (Finance) effective 01.06.2011.

Your Directors place on record their appreciation of the valuable contributions made by Mr.V.C.Agrawal, Mr.B.M.Bansal, Mr.S.Chandrasekaran and Mr.N.C.Sridharan during their tenure.

ACKNOWLEDGEMENT

Your Directors are highly grateful for all the help, guidance and support received from the Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Naftiran Intertrade Company Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government of Tamil Nadu, Central Vigilance Commission, Financial Institutions and commercial banks.

Your Directors acknowledge the constructive suggestions received from the Statutory Auditors and the Comptroller & Auditor General of India.

Your Directors thank all the shareholders for their faith, trust and confidence they have reposed on the Company.

Your Directors wish to place on record the unstinted efforts and dedicated contribution put in by the employees at all levels to ensure that the Company continues to grow and excel.

For and on behalf of the Board of Directors

Date : 27.07.2011 R.S. BUTOLA

Place : New Delhi Chairman

Mar 31, 2010

On behalf of the Board of Directors of your Company, it is my privilege to present the 44th Annual Report on the workings of your Company, together with the Audited Statement of Accounts for the year ended March 31, 2010.

CORPORATE OVERVIEW

- Turnover of Rs.29,184 crore and Profit after Tax of Rs.603.22 crore was achieved.

- Successfully completed and commissioned the expansion of Crude Distillation Unit III (CDU-III) from 3 MMTPA to 4 MMTPA, thereby enhancing the installed capacity of CPCL from 10.5 MMTPA to 11.5 MMTPA.

- Achieved the highest ever distillate yield of 69.2% as against the previous best of 68.3% in 2006-07, at Manali.

- Achieved the highest ever throughput of 917 Thousand Metric Tonnes (TMT) in Fluidised Catalytic Cracking Unit (FCCU) against the previous best of 902 TMT in 2008-09.

- Achieved the highest ever production of High Speed Diesel (3565.5 TMT), Propylene (33.9 TMT) and Paraffin Wax (28.5 TMT).

- Achieved the lowest ever energy index at Manali Refinery at 70.4 MBTU / BBL /NRGF in 2009-10 as against the previous best of 71.4 in 2007-08.

- Enhanced the capacity of Sulphur Recovery Unit (SRU) by 22% through Oxygen Enrichment Technology developed jointly with M/s.Engineers India Limited.

- Achieved the lowest ever energy index at Cauvery Basin Refinery at 127.3 MBTU/BBL/NRGF in 2009-10 against the previous best of 131.2 MBTU/BBL/NRGF in 2006-07.

- Japan Institute of Plant Maintenance (JIPM), Japan has awarded the coveted "TPM Excellence Award, Category A" for Cauvery Basin Refinery.

- CPCL was selected as one of the recipients of the prestigious Corporate Social Responsibility (CSR) Award by Rural Development and Panchayat Raj Department, Government of Tamil Nadu.

Financial Performance (Rs. in crore)

2009-2010 2008-2009

Gross Turnover 29183.84 36489.67

Profit before Interest,

Depreciation and Tax 1088.26 (112.28)

Interest 137.36 223.66

Depreciation and Amortization 267.14 257.17

Profit before Tax 683.76 (593.11)

Provision for Taxation

- Current Tax (Net) (81.44) (4.96)

-Deferred Tax 161.95 (193.36)

- Fringe Benefit Tax 0.03 2.49

Profit after Tax 603.22 (397.28)

Value Added 1540.48 922.87

The Company has achieved a turnover of Rs. 29,184 crore during the year, as compared to Rs.36,489 Crore in the previous year. The profit after tax stood at Rs. 603.22 Crore as compared to a loss of Rs.397.28 crore in the previous year. The value addition during the year is Rs. 1540.49 crore as compared to Rs. 922.87 crore in the previous year.

The Reserves and Surplus also registered an increase from Rs.2918.23 crore as on 31.03.2009 to Rs. 3313.08 crore as on March 31, 2010. The book value per share of your Company has increased from Rs. 205.98 in the year 2008-2009 to Rs 232.49 in the year 2009-2010.

Your Company has not accepted any fresh public deposits during the year 2009-10.

Your Company has transferred to the Investor Education and Protection Fund the required amount as per Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.

DIVIDEND

The Board of Directors of your Company is pleased to recommend a dividend of 120% on the paid-up equity share capital of the Company for the financial year 2009-10 in view of the excellent performance of the Company.

MoU PERFORMANCE

Your Company excelled in performance in the various parameters covered under the MoU with Indian Oil Corporation Limited for the year 2009-10. As per the provisional assessment, the overall rating is "Excellent", for the 14th year in succession.

MARKETING

Indian Oil Corporation Limited, the holding Company continues to market a majority of the fuel products produced by your Company. During the year, your Company has achieved the highest ever sales of Propylene which was directly marketed by the Company. During the year, seven Customer Meets were arranged at various locations.

PROJECTS

Your Companys XI Plan Outlay (2007-12) is Rs. 3575 Crore. During the first two years of the XI Plan (2007-09), an expenditure of Rs. 583 Crore has been incurred. During the year 2009-10, a sum of Rs. 893 crore was incurred against the budget estimate of Rs. 716 crore towards plan projects and a sum of Rs.80.21 crore was incurred against the budget estimate of Rs. 178.62 crore towards non-plan projects.

Completed Projects

Capacity Enhancement of CDU/ VDU of Refinery III

A Project for enhancing the capacity of CDU / VDU of Refinery III from 3.0 MMTPA to 4.0 MMTPA at a cost of Rs. 200.41 crore has been completed with the objective of producing value added products like LPG, Naphtha, SK, HSD, etc.

Revamp of Semi Regenerative Catalytic Reforming Unit to Continuous Catalytic Reforming Unit

A project for revamp of Semi Regenerative Catalytic Reforming unit to Continuous Catalytic Reforming mode was completed at a cost of Rs. 272.77 crore with a view to increase the Octane Number for producing high quality MS meeting Euro IV specifications, besides maximizing its capacity. This project alongwith the upcoming isomerisation unit will enable the Company to meet the increased demand of MS.

SRU Revamp with Oxygen Enrichment Technology

A project for revamp of Sulphur Recovery Unit (SRU) for enhancing the capacity through Oxygen Enrichment Technology developed jointly with M/s.Engineers India Limited, for the first time in Indian Refineries, was successfully implemented.

On-going Projects

Auto-Fuel Quality Upgradation Project

In order to meet the revised specifications of MS and HSD, your Company is implementing Auto-Fuel quality upgradation project at an estimated cost of Rs.2615.69 crore. This project includes a Diesel Hydro-treating Unit, NHT/ISOM Unit, Utilities and Offsites (U&O) and Hydrogen Generation Unit (HGU).

The construction of the above process units is in an advanced stage of completion.

New Crude oil Pipeline

As a replacement for the old 30" pipeline from Chennai Port to Manali Refinery along the route of the proposed Port connectivity project, your Company is laying a new 42" Crude oil pipeline at a cost of Rs. 65 Crore. This project is expected to be completed within a period of 12 months after the Right of Way is made available by Chennai Port Trust. Discussions are being held with Chennai Port Trust for expediting the clearances for Right of Way.

New Project Initiatives

Resid Upgradation Project

With a view to maximize the Distillate yield of the Refinery, your Company proposes to implement the Resid Upgradation project at an estimated cost of Rs.3350 Crore. The project involves installation of a Delayed Coker Unit and revamping of existing Hydrocracker Unit alongwith other associated facilities.

Process packages for all the Process Units have been completed. Preparation of the Detailed Feasibility Report is in progress. This project is expected to be completed in 2013.

Single Point Mooring (SPM) & Crude Oil Terminal (COT) Project

Your Company is installing a Single Point Mooring (SPM) for import of Crude Oil facilities in Ennore through Very Large Crude Carriers (VLCC) and Crude Oil Tankage Terminal (COT) near Land Fall Point (LFP) for VLCC discharge to avoid demurrage, at an estimated cost of Rs. 1400 Crore. Most of the pre-project activities have been completed including Marine geo-physical study, geo-technical study, pipeline route survey and soil investigation. The environment studies are in progress. This project is expected to be completed in March 2013.

Revamp of Refinery - II for Capacity Expansion

It is proposed to enhance the capacity of Crude and Vacuum Distillation Unit of Refinery-ll from 3.7 MMTPA to 4.3 MMTPA at a cost of about Rs. 333 crore.

New Project Initiatives at CBR

- 20" inter connecting crude oil pipeline is planned between Karaikkal Port and CPCLs Chidambaranar Oil Jetty. MoU has been signed with M/s.Karaikkal Port Pvt. Limited (KPPL) for utilizing their facility to receive crude of economic parcel size. IOC, Pipeline division has been engaged as EPCM contractor for executing the project. This project is expected to be completed by March 2011.

- Shifting of Hydro treating facility (Plant 13) from Manali Refinery for Diesel Hydro treating which will enhance the crude basket of CBR.

DEVELOPMENT STRATEGIES

The outlook of the Oil Industry has been fast changing prompting various players to constantly revisit their planned strategies and devise new business initiatives for achieving sustainable development and also to adapt successfully to the changing scenario. Your Company has also undertaken a review of its strategies. A Strategy Meet was organized in July 2009 to discuss and deliberate on several growth initiatives identified by the Company. The important points identified during this Meet were discussed by the Board of your Company in September 2009.

Several action plans have been identified and important among them include replacing the Refinery I with a new CDU/VDU of 9 MMTPA capacity and associated secondary processing facilities and the setting up a 350 MW Joint Venture Power Project based on Petcoke.

INDIAN ADDITIVES LIMITED

Your Company formed a joint venture with Chevron Chemicals Company (now Chevron Oronite Company) named Indian Additives Limited (IAL) for the manufacture of Lube Additives components and packages, in the year 1989.

IAL has achieved a turnover of Rs.349.90 Crore during the year 2009-10, as against Rs.270.69 crore in the previous year. The Profit after Tax for 2009-10 is Rs.41.29 Crore as against Rs.8.67 Crore in the previous year. The Board of Directors of IAL has recommended a Dividend of 36% on the paid-up capital of the Company.

INFORMATION TECHNOLOGY

Your company keeps itself abreast of the advancements in the area of Information Technology so as to apply them to the extent possible in its pursuit of achieving operational excellence.

The Cauvery Basin Refinery and Manali Refinery went live on SAP effective 1st July 2009 and 1st August 2009 respectively. The highlights of the implementation of SAP included the following:

- Generation of Production reports

- Inclusion of Inspection Management System in the P.M Module of SAP

- Direct Integration of Weigh Bridge with SAP

- Implementation of B2B concept in Cauvery Basin Refinery for Crude related transactions

- Establishment of Video Conferencing facility between Manali Refinery and CBR

- Establishment of Audio Conferencing Facilities for Executives

RESEARCH AND DEVELOPMENT (R&D)

Your Company recognizes the need to be more competitive in order to face the future challenges in the Oil Industry and provides greater thrust to the role of R&D in order to achieve continuous upgradation of technologies and acquire expertise in various areas of activities.

Your Companys in-house R&D Centre successfully commissioned a new ROFATrue Boiling Point Distillation Unit to carry out Crude Assays with extended vacuum facilities. Your Companys Research and Development with Sud- Chemie India Pvt. Ltd. resulted in successful scaling up of Lube Hydrofinishing Catalyst (500 kg) with improved activity and stability Characteristics.

Your Companys R&D Centre successfully carried out extensive reformer pilot plant studies to develop a Continuous Catalytic Reformer (CCR) model for supporting the commercial CCR unit.

SAFETY MANAGEMENT

Your Company and its employees are conscious of their commitment to carry out all the activities with primary focus on safety by adhering to the best safety practices in handling equipment and material.

During the year, your company has imparted monthly refresher training program on Fire and Safety to 177 CISF Personnel. Safety training is provided every month to truck crew with special focus on road safety regulations, safe driving habits, importance of spark arresters and fire extinguishing operations and around 490 Truck Crew members were covered under this training program.

The importance of safety in achieving credible safety performance is highlighted to employees, contract workers and others through various training programmes, live fire drill and field demonstrations. Also specialized safety training programmes are conducted on Chlorine handling, Scaffolding erection and Shutdown safety. Distribution of Safety pamphlets to contract workers in Tamil & Hindi, Safety handbooks in Tamil and Safety instructions for visitors are also done. A handbook on the roles and responsibilities of onsite co-ordinators was released in February, 2010. Employees participation in safety management system is ensured by having their representations in various safety committees.

A safety perception survey was conducted by M/s. Cholamandalam Group and the results of the survey are encouraging as compared to the similar survey done three years earlier. A safety meet was also organised for the benefit of the neighbourhood Manali industries.

A Safety film on the topic of "Human safety is precious for Life saving" describing the safety practices in Manali refinery was telecast in Podhigai Channel, mainly to create an awareness among general public on efforts taken by the Company towards safe operation.

Two on-site mock drills were conducted in September, 2009 and March, 2010 respectively. An off-site mock drill was conducted in February, 2010 at M/s, Manali Petrochemical Limited which was presided over by District Collector, Tiruvallur.

Awards /Achievements

Commitment to the safety standards and safety initiatives undertaken by the company to improve the safety management system resulted in the following awards;

- Safety Appreciation Award by the Institute of Engineers of India.

- Continued Patronage Award (CPA) from National Safety Council, Tamil Nadu.

- Golden Peacock award received in June 2009.

- Cauvery Basin Refinery received the Star Award under the Safety Awards Category 2007 from National Safety Council, Tamil Nadu Chapter in February 2010.

ENVIRONMENT MANAGEMENT

Your Company takes constant and persistent efforts to preserve and protect the ecological balance by adoption of several environmental conservation measures aimed towards achieving substantial abatement in pollution from its operations.

Significant initiatives undertaken in the areas of Solid Waste Management include disposal of 200 MT of SRU Spent Catalyst to M/s Tamil Nadu Waste Management Limited.

Your company has always demonstrated its concern to mitigate the adverse effects of climate change by undertaking several green initiatives which include mass tree plantation at Manali Refinery, change over to Light Emitting Diode (LED) for Corridor Lighting and use of Solar Lights at Cauvery Basin Refinery (CBR).

The efforts undertaken by the Company towards sustainable development resulted in registration of its Windmill farm as the first Clean Development Mechanism Project with the United Nations Framework Conventions for Climate Change (UNFCCC) in May 2010. This project is estimated to fetch an annual accruable Certified Emission Reduction (CER) of 34,186 for a period of ten years.

The sustained and concerted efforts taken by the company in the areas of Environment has earned the Company the Greentech Foundation award for Environment Excellence in October 2009.

RENEWABLE ENERGY DEVELOPMENT

Your Company has taken initiatives in the areas of renewable energy development by commissioning the 17.6 MW Windmill Project at Pushpathur village, Dindugul District, Tamil Nadu at a cost of Rs.90 Crore, which is the first of its kind in the Oil Industry. The annual power generated during the year was 36 million KWHr and the revenue generated was Rs. 10.33 Crore.

ENERGY CONSERVATION

Your Company accords priority attention to the Energy Conservation efforts by adopting and implementing energy efficient processes, installing energy saving devices and by continuous monitoring using sophisticated instruments.

Several steps have been taken to optimize the energy consumption such as Step less Control on MUG Compressor and Preheat improvements, which enabled the Manali Refinery to achieve the lowest ever energy index at 70.4 MBTU / BBL /NRGF in 2009-10 as against the previous best of 71.4 in 2007-08.

Details of Energy Conservation measures undertaken during the year are detailed in Annexure-ll.

INTEGRATED REFINERY BUSINESS IMPROVEMENT PROGRAMME

As part of the Integrated Refinery Business Improvement Programme, being implemented in association with M/s. Shell Global Solutions International, 8 proposals with a net benefit value of 4.73 Million US Dollars (6.62 Cents per bbl) were completed and 3 Proposals For Improvement having a net benefit value of 4.944 Million US Dollars (6.92 Cents per bbl) are under implementation.

OPTIMISATION

Your Company continues to give focused attention to the Refinery Business Optimisation by keeping pace With the latest technological changes in order to achieve the best operating margins and implement the best process optimization techniques.

A centralized web based fuel gas monitoring application for Manali Refinery was deployed in the portal of Process Information Network (PIN). A neural Network based model for monitoring HSD Lubricity was developed and made available on the PIN portal, which has an embedded operational intelligence.

Your Company also presented a paper titled "Role of real time process information in Refinery Operations" at the Refinery Technology Meet held in Chennai, which was widely appreciated.

TOTAL PRODUCTIVE MAINTENANCE (TPM)

Your Company has made significant progress in the areas of process improvements, Energy Savings, Establishment of Systems & Procedures, One Point Lessons (OPL), Kaizens, etc. including imbibing of TPM culture amongst the employees, ever since the concept of TPM was introduced in May 2005 at Manali Refinery and CBR.

The Cauvery Basin Refinery benefited immensely in implementing the TPM through improved work environment, work culture and value addition through implementation of large number of Kaizens and has achieved a significant milestone by receiving the coveted "TPM - Excellence Award - Category A" instituted by Japan Institute of Plant Maintenance for implementing all the 8 Pillars of TPM in March 2010.

The Manali Refinery passed the TPM Health check-up conducted by Confederation of Indian Industry in November 2009 and will be contesting for the JIPM Award during 2010.

During the year, a TPM hand book and a TPM brochure for the use of employees, Pillar Chairman and Circle Leaders were released. The Third CPCL Kaizen Competition was conducted during the year and 19 Kaizens were presented from all TPM Circles in the areas of Operations and Maintenance.

ISO-SHEQ Policy

Your Company continues to demonstrate its strong commitment to carry out its business activities with focused attention on Safety, Health, Environment & Quality and has formulated a comprehensive SHEQ Policy. The accreditation to OHSAS 18001:2007 - Occupational, Health & Safety Management System, Quality Management System (QMS) 9001:2008 and Environment Management System (EMS) 14001:2004 were received from M/s. Bureau Veritas Certification India, Chennai after the conduct of the Surveillance Audit during the year.

HUMAN RESOURCES DEVELOPMENT

Your Company is firm in its belief that the human resources of CPCL bestows upon the company the required competitive advantage. With a view to sustain this position, your company consistently gravitates, retains and motivates the best talent and also enables the employees at all levels to deliver excellent performance.

With a view to give impetus to talent development, Competency Mapping Development Centers were carried out for Managers with the assistance of M/s.Emst & Young, one of the renowned experts in the field. These Development Centres will now form the basis for carrying out Development initiatives for the year 2010-11.

Your company has also taken up a new HR initiative viz., "Employees Learning Forum" to build a more dynamic employee learning environment and to bring out the best talent in them. The objectives of the Forum are to provide a platform to all employees, to develop ideas, to share their knowledge with others, acquire knowledge from others, and in the process to multiply their knowledge levels in a plethora of areas, which will ultimately enhance the knowledge level in the company and help employees develop new ideas in their work front.

Your Company implemented the Pay revision for the supervisory employees in line with the guidelines from Department of Public Enterprises, Government of India.

The total manpower strength of the Company as on 31st March 2010 was 1735 (1667 as on 31st March 2009) comprising of 810 supervisors and 925 non-supervisors (779 supervisors and 888 non-supervisors as on 31st March 2009).

During the year, your company recruited 31 Officers and 78 Workmen. As a part of the Apprenticeship training requirement, 59 Diploma holders and 36 ITI Trade Apprentices underwent one-year apprenticeship Programme in the Company.

The Industrial Relations climate continued to be harmonious, cordial and peaceful through continuous dialogues and information sharing with the Trade Unions and Officers Association. Your Company also initiated quarterly communication meeting with the Collectives to communicate the performance, growth and developmental aspects of the Company.

HR Initiatives of previous year like Department-wise Open House Meets and Field visits by HR officials to ascertain day-to-day working environment issues were continued during the year and issues were addressed.

Your Company has been adhering to the Presidential Directives and various instructions of the Government relating to the welfare of the SC, ST, OBC, and Differently abled persons. The statistics relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.2010 is placed as (Annexure-I).

WELFARE OF WOMEN

Women empowerment through conduct of Training Programs in functional /technical /developmental areas received primary attention of the Management.

An exclusive web page titled "SHE" was inaugurated on the occasion of International Womens Day. The web page was created for the Women employees of your company, wherein, the creative expertise of Women employees is ornamented.

International Womens Day was celebrated by organizing a programme on the theme "Women: From Survival to Success" in which eminent professionals from various fields delivered lectures on topics of varied interests on Women Development and empowerment.

Women employees were nominated to attend National/Regional Meets conducted by the Forum for Women in Public Sector (WIPS) under the patronage of Standing Conference on Public Enterprises (SCOPE).

As on 31.03.2010, 82 women employees are on the rolls of the Company (constituting 4.72% of the total number of employees). Of the above, 32 are in the Supervisory Grade and 50 are in Non-Supervisory Grade.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company considers Corporate Social Responsibility as one of the pivotal functions to accelerate the process of overall sustainable development and make significant contribution to Nation building.

During the year, an amount of Rs. 169.78 Lakhs was spent on CSR activities focusing on education, health and sanitation, water supply, sports development, women empowerment, social cultural activities and other infrastructural development.

Significant activities carried out under Corporate Social Responsibility during the year include the following :

- Constructed classrooms, toilets and compound wall for various schools located in and around our refineries at a total cost of around Rs.70 Lakhs.

- Conducted 10 free comprehensive eye care camps in association with Medical Research Foundation of Sankara Nethralaya, Chennai for the benefit of local people. 93 people were benefited by free cataract surgery.

- Skill Development Training programme on Plastic Processing Machine Operator course for unemployed youth conducted at CIPET, Chennai.

- Sponsored 50 Girls (25 SC/ST and 25 Other Community) for one year Nursing Assistant Course at a cost of Rs.5 lakhs under Empowerment of Women programme.

- Construction of Public Toilet (for women) at Vadaperumpakkam at a cost of Rs.5.45 Lakhs.

- Distributed 130 numbers of Sewing Machines & 63 numbers of Hand mover Tricycles for the poor people at a cost of Rs.6.70 Lakhs.

- Conducted 3 General Medical Camps for Public, 5 days Dental Camp and 5 days ENT camp for school students.

- Sponsored Free Tuition / Computer Training Classes for the benefit of Students in and around Manali at a cost of Rs.4.94 lakhs.

- Donated Ultrasound Scanner machine worth of Rs.5.00 lakhs to Municipality Primary Health Centre at Thiruvottiyur.

Your Company will be contributing a sum of Rs. 14 Crore to CPCL Educational Trust towards the cost of construction of new building for the Polytechnic College and ITI.

During the year, 235 students were admitted in the Polytechnic College and 24 students were admitted for the ITI course.

OCCUPATIONAL HEALTH SERVICES (OHS)

The occupational Health Services Center (OHS) of your company is constantly endeavoring promotion of health of not only the employees of the Company but also the contract workmen by periodical monitoring of the health hazards at work place in a systematic manner.

About 72 percent of the employees underwent comprehensive medical examination as part of Health Surveillance. Contract workers, doing critical jobs, were examined for general medical problems and fitness.

OHS Center continues to focus its attention on sustaining the high quality standards which has resulted in continuation of accreditation by the National Accreditation Board for laboratories as per the ISO 15189:2007 standards.

Persistent efforts were undertaken for .promoting the awareness amongst the employees on various health care issues by conducting several health awareness programs like "Stress Management", "Awareness on Cancer" and "Care of the back".

INVESTOR RELATIONS

Your Company continues to accord top priority to Investor grievances with a view to ensure zero complaints at any given point of time. All efforts are undertaken to keep the time of response to the shareholders request/grievances at the minimum.

As on 31.03.2010,14,67,65,931 shares have been dematerialized constituting 98.56% of the paid-up share capital of the Company. Out of 58,033 shareholders, 39935 shareholders have dematted their shares representing 68.81 % of the total shareholders. The status of Shareholders/ Investors Grievances are periodically monitored by the Shareholders/ Investors Grievances Committee of the Board.

CORPORATE GOVERNANCE

Your Company firmly believes that transparency, full disclosure, fairness to all stakeholders and effective monitoring of the Corporate Affairs are the four pillars of Corporate Governance. The Corporate Governance Philosophy of the Company is aimed towards achieving business excellence, enhancing shareholder wealth and protecting the interest of all stakeholders.

Your Company complied with all the mandatory requirements of Corporate Governance Guidelines issued by SEBI and also the Corporate Governance guidelines prescribed by Department of Public Enterprises (DPE), Government of India applicable to Central Public Sector Enterprises, except the requirement relating to minimum number of Independent Directors. As against the requirement of six under the Listing Agreement and DPE Guidelines, the Company has three Independent Directors. The appointment of additional Independent Directors is under the consideration of Government of India. A separate section on Corporate Governance forms part of this Annual Report.

In view of the best Corporate Governance practices adopted by the Company, your Company was shortlisted as one of the top 25 Companies, adopting good Corporate Governance practices in the year 2009 by the Institute of Company Secretaries of India, for the fourth time in a row.

The Ministry of Corporate Affairs, Government of India issued the Voluntary Guidelines on Corporate Governance in December 2009. Your Company would make every endeavour to comply with the voluntary guidelines to the utmost extent feasible and within the domain of a Government Company and a Subsidiary of Indian Oil Corporation Ltd.

VIGILANCE

The Vigilance Department of your Company assists the Management in promoting transparency and awareness amongst the employees on various vigilance matters, while discharging their duties and responsibilities.

An important aspect of the Vigilance function is providing greater thrust on leveraging the technologies, . which resulted in payment of 97.9% of bills to vendors / contractors and service providers through Electronic Clearance Service and Electronic Funds Transfers.

Vigilance Awareness Week was observed in the Company during November 2009, wherein Quarterly Vigilance News Letter was released in addition to carrying out Vigilance Awareness activities.

As a part of Vigilance Awareness Week, a meeting with major contractors was held wherein the Independent External Monitors participated.

INTEGRITY PACT

Your Company has implemented the Integrity Pact for enhancing the degree of transparency in procurement and contracts with an objective of eliminating corruption in public dealings.

Integrity Pact is applicable in respect of contracts with a threshold limit of Rs. 10 Crore. Status Report on the progress of activities under the Integrity Pact are being periodically reviewed by the Executive Committee of the Company. Meetings of the Independent External Monitors with the Management of the Company are being held on a quarterly basis.

OFFICIAL LANGUAGE IMPLEMENTATION

Your Company makes concerted efforts to spread and promote Official language in compliance with the Official Language Act, 1963, Official Language Rules, 1978 and orders issued by Government of India from time to time.

The First Sub-Committee of Committee of Parliament on Official Language visited CPCL in October 2009 and deliberated on matters relating to the Official Language implementation in the Company.

In recognition of its outstanding efforts for increasing the progressive use of Hindi in official work, your Company has received RAJBASHA SHIELD from Town Official Language Implementation Committee (TOLIC) which is second in the Public Sector Undertaking (Big) Category.

STATUTORY INFORMATION

- Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,1975 - Annexure-ll.

- Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign Exchange Earnings and Outgo, as required under Section 217(1 )(e) of the Companies Act, 1956 and the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-lll).

- Certificates received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as required under Clause 49 of the Listing Agreement and also the compliance with the guidelines on Corporate Governance issued by Department of Public Enterprises, Government of India are Annexed and forms part of this Report (Please see Annexure-IV).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors Responsibility Statement, it is hereby confirmed

i) that, in the preparation of the annual accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) that the Directors have prepared the annual accounts for the financial year ended March 31, 2010, on a going concern basis.

As required by the voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, with respect to Directors Responsibility Statement, it is hereby confirmed that proper systems are in place to ensure compliance of all laws applicable to the Company.

AUDITORS

M/s. M.Thomas & Co., Chennai and M/s Sreedhar, Suresh & Rajagopalan, Chennai have been appointed as Joint Statutory Auditors of the Company for the financial year 2009-2010 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.7.5 lakh (Rs.3.75 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax.

COST AUDITOR

M/s. J.V. Associates, Cost Accountants, Chennai have been appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2009-10 at a remuneration of Rs.1,40,000/- (Rupees One lakh Forty thousand only) per annum plus applicable taxes and out-of-pocket expenses, if any, to conduct the audit of cost accounts maintained by the Company.

DIRECTORS

Mr. K. Balachandran, Director (Operations) has been appointed as Managing Director effective 01.12.2009 in place of Mr. K.K. Acharya who retired from the services of the Company on attaining the age of superannuation.

Mr. B.M. Bansal, Director (Planning & Business Development) & Chairman i/c, Indian Oil Corporation Limited has been appointed as a Director in place of Mr.S.Behuria effective 01.03.2010. He has also been appointed as a non- executive Chairman of the Company by the Government of India.

Mr. Sanjay Gupta, Director (MC&IOC) representing Ministry of Petroleum & Natural Gas, Government of India ceased to be a Director on the Board of CPCL effective 06.04.2010 consequent to his reversion to his parent department.

Your Directors place on record their appreciation of the valuable contributions made by Mr.K.K. Acharya, Mr.S.Behuria and Mr.Sanjay Gupta during their tenure.

ACKNOWLEDGEMENT

Your Directors would like to convey their gratitude to Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Naftiran Intertrade Company Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government of Tamil Nadu, Comptroller & Auditor General of India, Central Vigilance Commission, Financial Institutions and commercial banks for their valuable guidance and support.

Your Directors place on record their sincere appreciation for the commitment and dedication made by the members of the CPCL family, which enabled the Company to excel in performance during the year 2009-10.

Your Directors thank all the shareholders for the confidence they have reposed on the Companys Board and Management, which enabled the Company to make a positive turnaround in the year 2009-10.

For and on behalf of the Board of Directors

B.M. BANSAL Chairman

Date : 16.07.2010 Place: New Delhi

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