CPCL Annual Report2009

2Chennai Petroleum Corporation Limited

3Board of Directors 4

Executives 5

Notice 6

Corporate Governance 9

Corporate Information


Mr. L. SabaretnamChief Executive Officer,Coromandel Sugars Limited

Mr. Venkatraman SrinivasanSenior Partner,V. Sankar Aiyar & Co.,Chartered Accountants

Prof. M.S. AnanthDirector,Indian Institute of Technology, (IIT),Chennai.

Mr. S. BehuriaChairman

Mr. K.K. AcharyaManaging Director

Mr. N.C. SridharanDirector (Finance)

Mr.S. ChandrasekaranDirector (Technical)

Mr. K. BalachandranDirector (Operations)

Mr. V.C.AgrawalDirector (HR)Indian Oil Corporation Limited

Mr. Sanjay GuptaDirector (MC & IOC),Ministry of Petroleum & Natural GasGovernment of India

Mr. Mansoor RadFinance Director,Naftiran Intertrade Company Limited

Mr. M.H. GhodsiDirectorNaftiran Intertrade Company Limited

Board of Directors

5Executives

Mr. N. SankaranChief Vigilance Officer

Mr. R. AnandGeneral Manager (Engineering & Services)Mr. V. NatarajanGeneral Manager (Finance)Mr. V. SrinivasanGeneral Manager (Human Resources)Mr. N.K. RajamaniGeneral Manager (Corp. Plng., Devt. and R&D)Mr. N.V. KalaivananGeneral Manager (Cauvery Basin Refinery)Mr. D. SelvarajGeneral Manager (Projects)Mr. R. ChidambaramGeneral Manager (Logistics & Utilities)Mr. K. SankarGeneral Manager (Maintenance)Mr. S. VenkataramanaGeneral Manager (Manufacturing)Mr. M. SankaranarayananCompany Secretary


Notice is hereby given that the 43rd Annual General Meeting of the Shareholders of the Company will be held at2.30 P.M. on Monday the 7th September 2009 at Kamaraj Arangam, 492, Anna Salai, Teynampet, Chennai-600 006to transact the following businesses:

ORDINARY BUSINESSES:

1. To receive, consider and adopt the Audited Profit & Loss Account of the Company for the period from1st April 2008 to 31st March 2009 and the Audited Balance Sheet as at 31st March 2009, together with theDirectors Report and the Auditors Report.

2. To appoint a Director in place of Mr.S. Behuria, who retires by rotation and being eligible, offers himself forre-appointment.

3. To appoint a Director in place of Mr.L.Sabaretnam, who retires by rotation and being eligible, offers himselffor re-appointment.

4. To appoint a Director in place of Mr.N.C.Sridharan, who retires by rotation and being eligible, offers himself forre-appointment.

SPECIAL BUSINESS:

5. APPOINTMENT OF MR. SANJAY GUPTA AS A DIRECTOR

To consider and, if thought fit, to pass, with or without modification, the following resolution as an OrdinaryResolution :

RESOLVED that Mr. Sanjay Gupta be and is hereby appointed as a Director of the Company.

By order of the BoardDate : 30.07.2009 M. SANKARANARAYANANPlace : Chennai Company Secretary

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy toattend and vote instead of himself.

2. The proxy need not be a member of the Company.

3. The instrument of Proxies, in order to be effective, must be lodged at the Registered Office of the Companynot later than 48 hours before the time of holding the meeting.

4. Members/Proxies should bring their attendance slip, duly filled in, to the meeting.

5. Members, who hold shares in the dematerialised form, are requested to bring their depository accountnumber for identification at the time of Annual General Meeting.

6. An explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Resolutionset out under Special Business of the Notice is annexed.

NOTICE

77. The Register of Members and the Share Transfer Books of the Company will remain closed from01.09.2009 to 07.09.2009 (both days inclusive).

8. Members are requested to immediately intimate any change in their addresses registered with theCompany.

9. Securities and Exchange Board of India (SEBI), vide Circular No.MRD/DoP/Cir-05/2009 datedMay 20, 2009, has informed that in respect of Securities Market transactions and off-market / private transactionsinvolving transfer of shares in physical form of listed companies, it shall be mandatory for the transferees tofurnish copy of PAN Card to the Company / Registrars and Transfer Agents for registration of such transfer ofshares.

In view of the above Circular dated 20.05.2009, all requests for transfer of shares received after 20.05.2009will be processed only if the requests are accompanied by a copy of the PAN Card.

10. The shares of the company are compulsorily traded in dematerialized form and therefore, the shareholdersare requested to dematerialize their shares to facilitate trading in CPCL shares.

11. As per the provisions of the Companies Act, 1956, shareholders are entitled to make nomination in respect ofshares held by them in physical form. Nomination form can be downloaded from the website of the companyat www.cpcl.co.in.

12. A brief Resume of the Directors of the Company, seeking appointment/re-appointment at this Annual GeneralMeeting, and their expertise in specific functional areas, is given as part of the Notice of 43rd Annual GeneralMeeting.

13. Inspection of Documents:- The relevant documents are available for inspection by the members at the RegisteredOffice of the Company at any time during the working hours till the date of the meeting.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173 (2) OF THE COMPANIES ACT, 1956

Item No.5

Mr. Sanjay Gupta was appointed as an Additional Director with effect from 19.06.2009. As per the provisions ofSection 260 of the Companies Act, 1956, Mr. Sanjay Gupta will hold Office only upto the date of the43rd Annual General Meeting of the Company.

A Notice under Section 257 of the Companies Act, 1956 has been received proposing the appointment ofMr. Sanjay Gupta as a Director. Hence, this resolution is proposed.

Memorandum of Interest :

None of the Directors is interested in the resolution except Mr. Sanjay Gupta.


BRIEF RESUME OF THE DIRECTORS OF THE COMPANY, SEEKING APPOINTMENT/RE-APPOINTMENTAT THE 43rd ANNUAL GENERAL MEETING

1. Mr.Sarthak Behuria was appointed on the Board effective 01.03.2005. He is an alumnus of St. StephensCollege, Delhi and the Indian Institute of Management (IIM), Ahmedabad. He has more than three decades ofexperience in the field of refining and marketing. He joined Burma Shell in 1973 before he was absorbed inBPCL, where he served across the country, handling key portfolios in Supply and Distribution, Sales, IndustrialRelations and Downstream Infrastructure. He took over as Director (Marketing) of BPCL in 1998, as CMD ofBPCL in July 2002 and Chairman of IOCL in March 2005.

Mr.Sarthak Behuria is presently the Chairman of Indian Oil Corporation Limited and IOT Infrastructure andEnergy Services Limited.

2. Mr.L.Sabaretnam was appointed on the Board effective 28.02.2002. He is a Post-Graduate in BusinessAdministration from the University of Madras. He is the Chief Executive Officer of Coromandel Sugars Limited.

Mr.L.Sabaretnam is the Chairman of Oriental Solutions Private Limited, LMS Builders & Engineers Pvt. Ltd., andArchi Structural Constructions India Pvt. Ltd. He is a Director of Biosynth Life Sciences India Limited andPacific Datalabs Pvt. Ltd.

He is an Advisor of India Cements Limited and Trustee of T.S.Narayanaswamy College of Arts and Science.He is a member of various business associations and social bodies.

Mr.L.Sabaretnam is the Chairman of the Audit Committee, Shareholders/Investors Grievance Committee andBoard Projects Sub- Committee of CPCL.

3. Mr.N.C.Sridharan was appointed on the Board effective 05.03.2004, as Director (Finance) for a period offive years. Government of India extended the tenure of Mr.N.C.Sridharan upto 31.05.2011, the date of hissuperannuation or until further orders, whichever event occurs earlier.

Mr.N.C. Sridharan is a Fellow Member of Institute of Chartered Accountants of India and a Fellow Member of theInstitute of Company Secretaries of India. He has three decades of experience in Engineering, Chemical,Pharmaceuticals, Fibrecement, Cotton Spinning and Software industries in Corporate Finance, Treasury, Accounts,Loans Syndication, Project Finance, Commercial Taxation Direct & Indirect and Secretarial & Legal. Prior tohis appointment as Director (Finance), he was General Manager (Finance) in CPCL.

Mr.N.C.Sridharan is also a Director on the Board of Indian Additives Limited and National Aromatics andPetrochemicals Corporation Limited. He is a member of the Shareholders/ Investors Grievance Committee andBoard Projects Sub-Committee of CPCL and Audit Committee of Indian Additives Limited.

4. Mr. Sanjay Gupta was appointed on the Board effective 19.06.2009. He holds a M.Tech Degree in ProductionEngineering from IIT, Delhi. He belongs to 1994 batch of Indian Revenue Service (IRS). He has more than twodecades of multi-sectoral experience in production, Income Tax, Administration, Petroleum Technology,e-governance project of Ministry of Corporate Affairs, etc. Presently, he is the Director (MC & IOC),Ministry of Petroleum & Natural Gas, Government of India.

By order of the BoardM. SANKARANARAYANAN

Company SecretaryDate : 30.07.2009Place : Chennai

91.0 COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance is the mechanism by which the values, policies and principles of a Company areinculcated and manifested. The essence of good Corporate Governance lies in promoting and maintainingtransparency, integrity and accountability in the higher echelons of Management. It is a firm belief of yourCompany that good Corporate Governance should result in sustainable development of all stakeholders,efficient management and distribution of wealth, effective discharge of Corporate Social Responsibility,application of best Management practices, adherence to moral and ethical standards and compliance of allapplicable laws in both letter and in spirit.

Your Company views Corporate Governance as a powerful tool in the hands of the Management which helpsto ensure sustainable growth of the Company which in turn powers economic development and builds bettersocieties through sharing of benefits and opportunities that flow from free, fair and efficient markets. YourCompany believes sound Corporate Governance practices inspire investors and lendor confidence, spurdomestic and foreign investment and improve competitiveness.

Your Company continues its endeavours in adopting well established Corporate Governance practices andin recognition of this fact, CPCL was shortlisted as one of the top 25 Companies adopting good CorporateGovernance by the Institute of Company Secretaries of India for the third time in a row.

2.0 GOVERNANCE STRUCTURE

The Corporate Governance process in the Company takes place at three levels:

2.1 BOARD OF DIRECTORS

The Board of Directors of the Company consists of an optimum combination of whole-time FunctionalDirectors, part-time non-executive Directors and Independent Directors.

The day-to-day business is conducted by the management of the Company under the direction of theManaging Director, Functional Directors and supervision of the Board. The Board of Directors reviewsand discusses the performance of the Company, its future plans, strategies and other relevant issuespertaining to the Company.

In addition, the Board of Directors performs specific functions relating to assessing the critical risksfaced by the Company and measures undertaken for their mitigation.

2.2 EXECUTIVE COMMITTEE

The Executive Committee of the Company which is one level below the Board consists of ManagingDirector, Functional Directors, Chief Vigilance Officer and Company Secretary. During 2008-09, theExecutive Committee has met 18 times. All new initiatives and major project proposals are discussedand deliberated by the Executive Committee before circulating to the Board of Directors for approval.

Corporate Governance

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Chennai Petroleum Corporation Limited

2.3 MANAGEMENT COMMITTEE

Management Committee of the Company which comprises of General Managers and Heads ofDepartment regularly meets once a month wherein highlights of activities of various departmentsincluding areas of concern are discussed and deliberated.

3.0 BOARD OF DIRECTORS

3.1 The total strength of the Board as on 31.03.2009 is 12 as against the maximum strength of 16 prescribedunder the Articles of Association of the Company.

3.2 As on 31.03.2009, CPCL Board comprises of the following categories of Directors:

3.2.1 One Non-Executive Chairman, who is the Chairman of Indian Oil Corporation Limited(the Holding Company).

3.2.2 Four whole-time Functional Directors, viz., Managing Director, Director (Finance),Director (Technical) and Director (Operations).

3.2.3 Director (HR) of Indian Oil Corporation Limited, representing holding company.

3.2.4 One Government Director who is Chairman, Chennai Port Trust.

3.2.5 Two Directors nominated by National Iranian Oil Company, one of the promoters, in terms ofthe Formation Agreement.

3.2.6 Three non-official Directors.

3.3 Out of the total number of twelve Directors as on 31.3.2009, eight Directors were Non-ExecutiveDirectors. Thus the Company meets the requirement of the number of Non-Executive Directors beingnot less than 50% of the Board of Directors of the Company.

As per the amendment to Clause 49 of the Listing Agreement, introduced by SEBI vide Circular dated08.04.2008, if the non-executive Chairman is a Promoter of the Company or is related to any promoteror person occupying Management positions at the Board level or at one level below the Board, atleastone-half of the Board of the Company shall consist of Independent Directors. Since, the Companyhas a non-executive Chairman who is on the Board of Indian Oil Corporation Limited, the Companyneeds to have 6 Independent Directors.

Presently, the Company has three Independent Directors as against the requirement of six.

3.4 Conduct of Board Meetings

The Company has well defined procedures for conducting the Meetings of the Board of Directors andSub-Committees of the Board so as to facilitate decision making in an informed and efficient manner.The dates of the Board Meetings and the venue are decided after ascertaining the convenience of theChairman, well in advance, to enable the Directors plan their schedules.

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Agenda proposals are circulated well in advance to all the Directors. Only urgent matters andfinancial results are circulated to the Directors at the time of the Meeting with the approval ofthe Chairman. Regular presentations on physical performance, financial performance, statusof Projects, etc. are made to the Board as per statutory as well as based on other managerialrequirements.

3.5 Information placed before the Board

The Board has full access to any information within the Company. The information regularly suppliedto the Board inter-alia, includes the following :

Items Periodicity

Revenue Budget / Capital Budget YearlyFinancial statements QuarterlyStatus of Projects QuarterlyRisk Assessment and Minimisation Reports YearlyReport on compliance of Applicable Laws YearlyReport on Manpower QuarterlyDisclosure of Interest by Directors YearlyProgress of Arbitration cases QuarterlyReport on Share Transfers, Transmissions, etc. Every Board Meeting

3.6 Six Board Meetings held during the year 2008-09 on the following dates :

Board Meeting No. Board Meeting Date

255 15.05.2008

256 18.07.2008

257 08.09.2008

258 21.10.2008

259 24.01.2009

260 24.03.2009

3.7 Details relating to :

(a) Attendance of Directors at the Board Meetings held during the financial year April 2008 toMarch 2009 and at the last Annual General Meeting held on 08.09.2008

(b) Number of other directorships, and

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(c) Number of memberships / chairmanships held by the Directors in the committees of variouscompanies, are given below:

Name of the Directors No. of Board Whether Other Committee CommitteeMeetings attended last Directorships Memberships ChairmanshipsAttended AGM?

Mr.S.Behuria 6 Yes 2 - -

Mr. K.K. Acharya 6 Yes 2 - -

Mr.N.C.Sridharan 6 Yes 2 3 -

Mr. S. Chandrasekaran 6 Yes 1 2 -

Mr. K. Balachandran 6 Yes 1 2 -

Mr.V.C.Agrawal 6 Yes 1 3 -

Mr.Rohit Bhardwaj(Refer Note-1) 5 Yes - 1 -Mr.L.Sabaretnam 5 Yes 7 - 3

Mr.K.Suresh 1 Yes 3 1 1

Mr. Venkatraman Srinivasan 6 Yes 4 2 1

Mr. K.L. Kumar(Refer Note - 2) 3 Yes 1 5 -Prof. M.S. Ananth 1 No 3 - 1

Mr. Pramod Nangia(Refer Note 3) 4 Yes - - -Mr. Mansoor Rad orhis alternate Director 4 Yes 1 2 -

Mr.M.Vaezi or his alternate Director(Refer Note 4) 2 Yes 1 3 -

Notes :-

1. Mr. Rohit Bhardwaj, Executive Director (M&I), IOC ceased to be a Director effective 28.2.2009 andFive Board Meetings were held during his tenure in the financial year 2008-09.

2. Mr. K.L. Kumar, Former C&MD, Kochi Refineries Limited, ceased to be a Director effective 24.03.2009.Five Board Meetings were held during his tenure, in the financial year 2008-09.

3. Mr. Pramod Nangia, Director (M), Ministry of Petroleum & Natural Gas, ceased to be a Director effective24.03.2009, consequent to completion of his tenure in the Ministry of Petroleum & Natural Gas.Five Board Meetings were held during his tenure, in the financial year 2008-09.

4. Mr. M. Vaezi, Director, Naftiran Intertrade Company Limited ceased to be a Director effective 25.04.2009as Mr. Mohammed Hassan Ghodsi has been appointed as a Director in his place.

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4.0 COMMITTEES OF THE BOARD

4.1 The Board has constituted three Sub-Committees of the Board, viz., Audit Committee,Shareholders/ Investors Grievance Committee and Board Projects Sub-Committee.

4.2 The minutes of the above Sub-Committee Meetings are placed before the Board of Directors forconfirmation. Action Taken Reports on the decisions of the above Sub-Committee are also placedbefore the Sub-Committee for information.

4.3 AUDIT COMMITTEE

4.3.1 Composition of the Committee as on 31.3.2009

1. Mr. L.Sabaretnam, Chief Executive Officer, Coromandel Sugars Limited, Chennai.

2. Mr. Mansoor Rad, Financial Director, Naftiran Intertrade Company Limited or his AlternateDirector.

3. Mr. Venkatraman Srinivasan, Senior Partner, M/s. V. Sankar Aiyar & Co., Chartered Accountants,Mumbai.

Mr. L.Sabaretnam, an Independent Director is the Chairman of the Committee.

Note :Mr. K.L. Kumar, Former C&MD, Kochi Refineries Limited was a member of the Committee till24.03.2009.

4.3.2 Terms and reference of Audit Committee

The Audit Committee has been vested with the following powers and functions:

4.3.3 POWERS

1. To investigate any activity within its terms of reference;

2. To seek information from any employee;

3. To obtain outside legal or other professional advice;

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

5. To have full access to information contained in the records of the company and externalprofessional advice, if necessary.

4.3.4 FUNCTIONS

1. Oversight of the Companys financial reporting process and the disclosure of its financial informationto ensure that the financial statement is correct, sufficient and credible.

2. Recommending to the Board, the appointment, re-appointment and, if required, the replacementor removal of the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

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4. Reviewing, with the management, the annual financial statements before submission to the Boardfor approval, with particular reference to :

a) Matters required to be included in the Directors Responsibility Statement to be included inthe Boards Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956.

b) Changes, if any, in accounting policies and practices and reasons for the same.c) Major accounting entries involving estimates based on the exercise of judgment by

management.

d) Significant adjustments made in the financial statements arising out of audit findings.e) Compliance with listing and other legal requirements relating to financial statements.f) Disclosure of any related party transactions.g) Qualifications in draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to theBoard for approval.

6. Reviewing with the Management, the performance of statutory and internal auditors, adequacy ofthe internal control systems.

7. Reviewing the adequacy of internal audit function, if any, including annual plan for internal audit,the structure of the internal audit department, staffing and seniority of the official heading thedepartment, reporting structure coverage and frequency of internal audit.

8. Discussion with internal auditors any significant findings and follow up thereon.

9. Reviewing the findings of any internal investigations by the internal auditors into matters wherethere is suspected fraud or irregularity or a failure of internal control systems of a material natureand reporting the matter to the Board.

10. Discussion with statutory auditors before the audit commences, about the nature and scope ofaudit as well as post-audit discussion to ascertain any area of concern.

11. To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non-payment of declared dividends) and creditors.

12. To review the functioning of the Whistle-Blower Mechanism, in case the same is existing.

13. Any other functions that may be assigned by the Board to the Audit Committee from time to time.

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4.3.5 The details of Audit Committee Meetings held during the Financial Year 2008-09 and theMembers present are given below:

S.No. Meeting Date Members Present

1. 15.05.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan,Mr.K.L.Kumar and Mr.Mansoor Rad.

2. 16.07.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan,Mr.K.L.Kumar and Mr.Mansoor Rad.

3. 08.09.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan andMr.K.L.Kumar.

4. 20.10.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan andMr.K.L.Kumar.

5. 23.01.2009 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan andMr.Mohammad Hassan Ghodsi Alternate Memberfor Mr.Mansoor Rad.

6. 23.03.2009 Mr.L.Sabaretnam and Mr.Venkatraman Srinivasan .

4.4 REMUNERATION COMMITTEE

4.4.1 The Remuneration of the whole time Functional Directors are determined by the Government of India.As such, the need for a Remuneration Committee is not felt by the Company in view of the fact that theCompany is a Government Company as per Section 617 of the Companies Act, 1956.

4.4.2 The details of Remuneration paid to all the Functional Directors are given below:

The remuneration of the whole time Functional Directors include basic salary, allowances andperquisites as determined by the Government of India. Also, they are entitled to provident fund andsuperannuation contributions as per the rules of the Company.

The gross value of the fixed component of the remuneration, as explained above, paid to the wholetime functional Directors, during the financial year 2008-09 is given below:

(Rs. in Lakhs)Name of the Director Salaries & Contribution to Contribution to Other

TotalAllowances Provident Fund Superannuation Benefits

Fund and Gratuity

Mr.K.K. Acharya,Managing Director 16.89 1.29 1.29 0.73 20.20

Mr. N.C. Sridharan,Director (Finance) 11.18 0.71 0.70 2.56 15.15

Mr. S. ChandrasekaranDirector (Technical) 12.78 0.79 0.80 0.30 14.68

Mr. K. BalachandranDirector (Operations) 16.14 1.24 1.24 0.89 19.51

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4.4.3 The whole time functional Directors are appointed for a period of five years or upto the date ofsuperannuation, whichever event occurs earlier.

4.4.4 No stock option scheme is prevalent in the Company.

4.4.5 A sitting fee of Rs.10,000/- is paid by the Company for each meeting of the Board/Sub-Committeeof the Board, to each of the Non-Executive Directors, who are not the full-time employees of theshareholders. The details of the sitting fees paid during the financial year are given below:

Mr. L.Sabaretnam - Rs.1,90,000/-Mr. Venkatraman Srinivasan - Rs.1,20,000/-Mr. K.L. Kumar - Rs. 80,000/-Prof. M.S. Ananth - Rs. 10,000/-

4.4.6 Criteria for payment to Non-executive Directors :

As per Article 90 A of the Articles of Association of the Company, the remuneration payable to theDirectors of the Company, other than full-time Directors of the Company or Full-time employees of theShareholders for attendance at Meetings of Board of Directors or any Committee thereof, shall befixed by the Board of Directors of the Company from time to time.

In line with the above article, the Board of Directors of the Company at the 220th Meeting held on28.10.2002 has fixed a sum of Rs. 5000/- as Sitting fees to certain categories of non-executiveDirectors who are not the full-time employees of the shareholders of the Company for attendance atevery meeting of the Board of Directors or any Committee thereof and the amount of sitting fees hasbeen increased from Rs.5000/- to Rs.10000/- by the Board of Directors of the Company at the244th Board Meeting held on 25.07.2006 for attending each meeting of the Board / Sub-Committee ofthe Board.

4.4.7 Shares held by Non-executive Directors:

Mr. S. Behuria - 500 sharesMr. L. Sabaretnam - 35 sharesMr. V.C. Agrawal - 500 shares

4.4.8 Compliance with the Code of Conduct for Board Members and other Senior Management Personnel:

As required under Clause 49 I (D) (ii) of the revised Clause 49 of the Listing Agreement, a declarationsigned by the Managing Director of the Company that all the Board Members and Senior Managementpersonnel have fully complied with the provisions of the Code of Conduct for Board Members andSenior Management Personnel during the financial year ending 31.03.2009 is placed below:

This is to declare that all the Board Members and Senior Management Personnel of the Companyhave furnished the Annual Compliance Report affirming that they have fully complied with the provisionsof the Code of Conduct for the Board Members and the Senior Management Personnel of the Companyduring the Financial Year ended 31.3.2009 and the same was informed to the Board at the 261stMeeting held on 28.05.2009.

Date : 08.07.2009 K.K. ACHARYAPlace : Chennai Managing Director

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4.4.9 Code of Conduct for prevention of Insider Trading in dealing with the Securities ofCPCL :

Your Company has a Code of Conduct for prevention of Insider Trading in dealing with thesecurities of CPCL which prohibits purchase / sale of shares of the Company by the designatedemployees and Directors while in possession of unpublished price sensitive information inrelation to the Company. The Board of Directors of the Company at the 260th Meeting held on24.03.2009 approved the revised Code pursuant to the amendments made by SEBI to theSEBI (Prohibition of Insider Trading) Regulations, 1992. The revised Code is available in theIntra-net of the Company.

4.5 SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE

4.5.1 Composition of the Committee as on 31.3.2009:-

1. Mr.L.Sabaretnam, CEO, Coromandel Sugars Limited

2. Mr.N.C.Sridharan, Director (Finance)3. Mr.S.Chandrasekaran, Director (Technical)4. Mr.M.Vaezi, Director, Naftiran Intertrade Company Ltd.

Note : Mr.M.Vaezi, Director, Naftiran Intertrade Company Ltd. ceased to be a member effective25.04.2009. Mr.L.Sabaretnam, a Non-Executive Director is the Chairman of theCommittee.

4.5.2 The details of Shareholders / Investors Grievance Committee Meetings held during the FinancialYear 2008-09 and Members present are given below:

S.No. Meeting Date Members Present

1. 20.10.2008 Mr.L.Sabaretnam and Mr.N.C.Sridharan

2. 23.03.2009 Mr.L.Sabaretnam, Mr.N.C.Sridharan andMr.S.Chandrasekaran

4.5.3 Name and designation of Compliance Officer:-

O Mr.M.Sankaranarayanan, Company Secretary or in his absence Mr.P.Shankar,Deputy Secretary.

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4.5.4 Number of shareholders complaints received during the year 2008-09, Number not solved to thesatisfaction of shareholders and Number of pending complaints for the period from 01.04.2008 to31.03.2009 are given below:

Opening Received Total Solved PendingSl. Nature of Balance during the during the as onNo. complaints as on Financial Financial 31.03.09

1.4.2008 year 2008-09 year 2008-09

1 Non-receipt of dividend warrants 0 405 405 405 0

2 Non-receipt of refund orders 0 9 9 9 0

3 Non-receipt of share certificates 0 142 142 142 0

4 Non-receipt of stickers againstpayment of allotment / call money 0 16 16 16 0

5 Non-receipt of confirmation ofDemat requests 0 38 38 38 0

6 Non receipt of Annual Reports 0 39 39 39 0

7 Non-receipt of DuplicateShare Certificates 0 33 33 33 0

Total 0 682 682 682 0

4.6 BOARD PROJECTS SUB-COMMITTEE (BPSC)

4.6.1 The Composition of BPSC as on 31.03.2009 is as follows:

1. Mr. L. Sabaretnam, CEO, Coromandel Sugars Limited

2. Mr. V.C. Agrawal, Director (HR), IOC

Note : Mr. Rohit Bhardwaj, Executive Director (M&I), Indian Oil Corporation Limited was a member ofthe Committee till 28.02.2009

Apart from the above members, the Committee includes Director (Finance) and the concernedFunctional Director, viz., Director (Technical) and Director (Operations) as additional members.

The quorum for the Committees proceedings shall be a minimum of three members including oneDirector nominated by Indian Oil Corporation Limited and Director (Finance).

4.6.2 Terms of Reference

(a) To approve Capital investment upto Rs. 100 crore and pre-feasibility expenses uptoRs. 20 crore.

(b) To recommend Investment approval beyond Rs. 100 crore to the Board of CPCL forconsideration.

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4.6.3 The details of Board Project Sub-Committee Meetings held during the Financial Year 2008-09 alongwith the Members present are given below:

S. No. Meeting Date Members Present

1. 17.07.2008 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.Rohit Bhardwaj,Mr.N.C.Sridharan, Director (Finance) andMr.S.Chandrasekaran, Director (Technical).

2. 07.09.2008 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.Rohit Bhardwaj,Mr.N.C.Sridharan, Director (Finance) andMr.S.Chandrasekaran, Director (Technical).

3. 24.02.2009 Mr.L.Sabaretnam, Mr.Rohit Bhardwaj,Mr.N.C.Sridharan, Director (Finance)and Mr.S.Chandrasekaran, Director (Technical).

4. 24.03.2009 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.N.C.Sridharan,Director (Finance) and Mr.S.Chandrasekaran, Director (Technical).

5.0 GENERAL BODY MEETING

5.1 Location and time, where last three Annual General Meetings were held and number of special resolutionspassed:

AGM Date Location Time No. of SpecialResolutions passed

25.08.2006 Kamaraj Arangam,492, Anna Salai,Chennai 600 006 03.00 pm Nil

10.09.2007 - do - 03.00 pm Nil

08.09.2008 - do - 02.00 pm One

5.2 Postal Ballot DetailsPostal ballot was not conducted in any of the General Meetings held so far in the Company.

6.0 DISCLOSURES

6.1 Disclosures on materially significant related party transactions that may have potential conflict with theinterest of the Company at large: -

Necessary disclosures under the Accounting Standards 18 relating to the Related Party transactionsform part of the Accounts for the year 2008-09.

6.2 Details of non-compliance by the Company, penalties, strictures imposed on the company byStock Exchange or SEBI or any statutory authority, on any matter related to capital markets,during the last three years:-Nil.

6.3 Disclosure of Accounting treatment

In the preparation of financial statement for the year 2008-09, the Company has not adopted anaccounting treatment which is different from that prescribed in the Accounting Standard, in respect ofany transaction.

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6.4 Details of compliance with certain clauses of Revised Clause 49 of the Listing Agreement

6.4.1 Compliance of laws applicable to the Company:

As per Clause 49 I (C) (iii), the Board shall periodically review compliance reports of all lawsapplicable to the company, prepared by the company as well as steps taken by the company torectify instances of non-compliances.

Accordingly, a system had been developed and institutionalized to ensure compliance with alllaws applicable to the Company.

The Board reviewed the Compliance Report of all laws applicable to the Company for theperiod 01.10.2007 to 30.09.2008 at the 258th Board Meeting held on 21.10.2008.

6.4.2 Risk Assessment and Minimisation Procedures:

As per Clause 49 IV (C), the Company shall lay down procedures to inform Board membersabout the risk assessment and minimization procedures. These procedures shall be periodicallyreviewed to ensure that executive management controls risk through means of a properlydefined framework.

Accordingly, a system had been developed and procedures have been laid down on riskassessment and minimization.

The details of reports under the Risk Assessment and Minimisation procedures for the financialyear 2008-09 were reviewed by the Board at its 259th Meeting held on 24.01.09.

6.4.3 Internal Control Systems - CEO / CFO Certification :

As per Clause 49 V, the CEO / CFO of the Company shall certify to the Board regarding theeffectiveness of the internal control systems for financial reporting.

Systems have been developed to review the internal controls and to institutionalize the systemof internal controls in the Company to enable the Managing Director and Director (Finance)certify to Board regarding the effectiveness of Internal Control System for financial reporting.

The required certification from the Managing Director and Director (Finance) being the CEOand CFO respectively was obtained and placed before the Board of Directors at the261st meeting held on 28.05.2009.

6.4.4. Integrity Pact :

In a bid to maintain complete transparency in Contracts and procurements, yourCompany entered into a Memorandum of Understanding (MoU) with TransparencyInternational India (TII) on 24.3.2009 for the implementation of Integrity Pact.Mr. P. Shankar, IAS., (Retd.,), Former Central Vigilance Commissioner (CVC) and Mr.JusticeK.Govindarajan, Retd., Judge of the Honble High Court of Madras are the Independent ExternalMonitors, approved by CVC, for implementation of the Integrity Pact in CPCL. Integrity Pact isapplicable for contracts with a threshold value of Rs. 10 crores and above.

6.4.5 Certificate of compliance with the requirements of Clause 49 of the Listing Agreement :

Clause 49 of the Listing Agreement requires every listed Company to obtain a certificate fromeither the auditors of the Company or a Practicing Company Secretary regarding complianceof conditions of Corporate Governance and annex the certificate with the Directors Report,which is sent annually to all the shareholders. The Company has obtained a certificate to thiseffect from the Auditors of the Company and the same is given as annexure to the DirectorsReport.

21

Department of Public Enterprises (DPE) has also issued Corporate Governanceguidelines applicable for Central Public Sector Enterprises. CPCL has complied withthe mandatory requirement of the guidelines on Corporate Governance issued by DPEexcept the requirement relating to minimum number of Independent Directors.

6.4.6 Compliance with certain non-mandatory Requirements :

Training to Directors in the area of Corporate Governance was one of the focused area duringthe year. One Director was sponsored for training programme in Corporate Governanceorganized by Standing Conference of Public Enterprises (SCOPE) in November 2008.The Board of Directors of the Company at the 260th Meeting held on 24.03.2009, has accordedapproval for the implementation of the Whistle Blower Policy in the Company. A copy of theWhistle Blower Policy is displayed in the Intra-net of the Company.

7.0 MEANS OF COMMUNICATION

7.1 The Board of Directors of the Company approve the Un-audited Quarterly Financial Results in the prescribedform within one month of the close of every quarter and announces the results to all the Listed StockExchanges. The same are also published, within 48 hours in the following newspapers normally:The Hindu, New Indian Express, The Economic Times, Business Line, Financial Express, News Today andMakkal Kural (Tamil).

7.2 The Quarterly Results, Half yearly Results and the Annual Results are placed on the Companys web site atwww.cpcl.co.in. Press Releases are given on important occasions. They are also placed on Companyswebsite.

7.3 Quarterly Results / Annual Results, Shareholding Pattern, Annual Report are posted on the SEBI EDIFARwebsite, viz., www.sebiedifar.nic.in

7.4 Chairmans Speech is also distributed to the shareholders who attend the Annual General Meeting of theCompany and the same is also displayed in the website of the Company.

7.5 Management Discussion and Analysis Report forms part of the Directors Report 2008-09.

8.0 GENERAL SHAREHOLDER INFORMATION

1. 43rd Annual General Meeting :-Date & Time : 7th September 2009; 2.30 p.m.Venue : Kamaraj Arangam, No.492, Anna Salai, Chennai 600 006

2. Financial Calendar : April March3. Book Closure Date : 01.09.2009 to 07.09.2009 (both days inclusive)4. Dividend despatch date : Not Applicable.5. Listing on Stock Exchanges : The Shares of the Company are listed on the Stock

Exchanges at Chennai, Mumbai and National StockExchange of India Limited. The listing fees for the year2009-10 has been paid.

6. Stock Code : Madras Stock Exchange Ltd. - CPCL / BSE 500110Trading Symbol in NSE : CHENN PETROTrading Symbol in MadrasStock Exchange : CHENNAI PETISIN No. for dematerialized shares : INE 178A 01016

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7. Market Price Data-High, Low and Close during each month in the last Financial Year (in Rupees)

National Stock Exchange Bombay Stock Exchange

Month High Low Closing High Low Closing

Apr. 2008 377.00 268.60 362.85 379.50 270.10 365.60

May 2008 408.00 320.00 338.45 403.50 320.10 338.30

June 2008 359.90 262.35 267.95 352.90 262.00 267.15

July 2008 325.00 240.20 301.60 324.00 239.15 302.85

Aug. 2008 335.50 248.05 257.80 325.00 248.00 258.15

Sep. 2008 269.00 207.00 212.05 268.00 206.25 212.15

Oct. 2008 216.00 115.10 120.55 216.00 116.50 120.65

Nov. 2008 153.95 102.50 105.15 153.80 103.95 105.40

Dec. 2008 124.80 101.00 128.25 129.50 100.80 128.25

Jan. 2009 135.00 95.15 110.35 135.00 100.05 105.80

Feb. 2009 112.50 90.00 90.60 112.85 90.10 90.85

Mar. 2009 97.80 78.00 94.40 97.00 78.00 94.45

8. Performance of CPCLs Shares in comparison to BSE and NSE Index:

National Stock Exchange Bombay Stock Exchange

Month Closing Index Closing IndexPrice (Rs.) Price (Rs.)

Apr. 2008 362.85 5165.90 365.60 17287.31

May 2008 338.45 4870.10 338.30 16415.57

June 2008 267.95 4040.55 267.15 13461.60

July 2008 301.60 4332.95 302.85 14355.75

Aug. 2008 257.80 4360.00 258.15 14564.53

Sep. 2008 212.05 3921.20 212.15 12860.43

Oct. 2008 120.55 2885.60 120.65 9788.06

Nov. 2008 105.15 2755.10 105.40 9092.72

Dec. 2008 128.25 2959.15 128.25 9647.31

Jan. 2009 110.35 2874.80 105.80 9424.24

Feb. 2009 90.60 2763.65 90.85 8891.61

Mar. 2009 94.40 3020.95 94.45 9708.50

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9. REGISTRARS AND SHARE TRANSFER AGENTS:a) Hyderabad Office:

M/s. Karvy Computershare private LimitedPlot No. 17 to 24, Vithalrao Nagar, Madhapur,Hyderabad 500 081Phone : 040 2343 1598 / 2342 0818 / 2342 08 28Fax : 040 - 2342 0814E-mail: [email protected], [email protected], [email protected]

b) Chennai Offices:i) No.33/1, Venkataraman Street, T. Nagar, Chennai 600 017

Phone : 2815 1793 & 2815 4781 Fax : 2815 1794ii) G-1, Swathy Court, 22, Vijayaraghava Road, T. Nagar, Chennai 600 017.

Phone : 2815 3445 / 2815 1034 Fax : 2815 3181E-mail: [email protected]

9.0 SHARE TRANSFER SYSTEM

9.1 To expedite the share transfer process, the Board of Directors has constituted a committee presentlyconsisting of Mr.M.Sankaranarayanan, Company Secretary and Mr.P.Shankar, Deputy Secretary of thecompany to approve share transfers, transmission of shares, dematerialisation requests andrematerialisation requests.

9.2 The number of transfers approved and shares transferred from 01.04.2008 to 31.03.2009 are givenbelow:

Number ofSl. Particulars SharesNo. Involved

1 Number of transfer deeds received 483 518192 Transfer deeds processed 215 221193 Defective transfer deeds sent to the proposed

transferee for rectification of defects 268 29700

9.3 The number of meetings held for approving the Share Transfers from 01.04.2008 to 31.03.2009 is 50.

9.4 The number of demat requests approved and shares dematted from 01.04.2008 to 31.03.2009 inNational Securities Depository Ltd. (NSDL) are given below:-

Sl. Number ofNo. Particulars Shares

Involved

1 Number of demat requests received 682 895002 Number of demat requests processed 527 683503 Number of demat requests rejected, for

non-receipt of physical share certificateswithin 30 days as per the requirement of NSDL 155 21150

9.5 The number of meetings held for approving the demat requests through NSDL from 01.04.2008 to31.03.2009 is 44.

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9.6 The number of demat requests approved and shares dematted from 01.04.2008 to 31.03.2009 inCentral Depository Services (India) Ltd. (CDSL) are given below:

Sl. Number ofNo. Particulars Shares

Involved1. Number of demat requests received 345 373102. Number of demat requests processed 272 297103. Number of demat requests rejected, for non-receipt

of physical share certificates within 30 daysas per the requirement of CDSL 73 7600

9.7 The number of meetings held for approving the demat requests through CDSL from 01.04.2008 to31.03.2009 is 38.

10.0 DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2009Shareholding of Shareholders Share Amountnominal value

Rs. Number % to Total Rs.11111 % to Total

Upto - 5000 63248 95.78 65798310.00 4.42

5001 10000 1472 2.23 11741750.00 0.79

10001 - 20000 664 1.01 9821890.00 0.66

20001 - 30000 204 0.31 5249230.00 0.35

30001 - 40000 97 0.15 3452390.00 0.23

40001 - 50000 69 0.10 3252220.00 0.22

50001 - 100000 118 0.18 8376630.00 0.56

100001 & above 161 0.24 1381421580.00 92.77

TOTAL 66033 100.00 1489114000.00 100.00

11.0 SHAREHOLDING PATTERN AS ON 31.03.2009

No. OF SHARES TOTAL % TONO. OF

SHARESSHAREHOLDERS

SHAREHOLDERS Physical Electronic Physical ElectronicTOTAL

Indian Oil Corporation Limited 0 77265200 77265200 51.89 0 1 1Naftiran Inter-trade Co. Ltd. 0 22932900 22932900 15.40 0 1 1Public (includingEmployees) 1487095 8574575 10061670 6.75 13286 44198 57484Bodies Corporate 25000 7942140 7967140 5.35 79 953 1032Banks, FIs andInsurance Companies 200 20678580 20678780 13.89 2 19 21Mutual Funds and UTI 9500 1304095 1313595 0.88 17 16 33Foreign Institutional Investors 4200 7349842 7354042 4.94 11 49 60Non-Resident Indians/OCBs 711300 626773 1338073 0.90 5339 2062 7401

Total 2237295 146674105 148911400 100.00 18734 47299 66033

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12.0 TOP TEN SHAREHOLDERS AS ON 31.03.2009 (OTHER THAN PROMOTERS)

Sl. Name of the Shareholder No.of SharesNo. Shares as a percentage

of total no.of shares

1. LIFE INSURANCE CORPORATION OF INDIA 7531182 5.06

2. GENERAL INSURANCE CORPORATION OF INDIA 3341644 2.24

3. THE NEW INDIA ASSURANCE COMPANY LIMITED 3071060 2.06

4. HDFC STANDARD LIFE INSURANCE CO. LTD. 2901272 1.95

5. UNITED INDIA INSURANCE COMPANY LIMITED 2056027 1.38

6. MATTHEWS INDIA FUND 1889744 1.27

7. NATIONAL INSURANCE COMPANY LTD 1731000 1.16

8. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. 1340310 0.90

9. LIC OF INDIA MARKET PLUS ONE 1046689 0.70

10. LIC OF INDIA MARKET PLUS 767473 0.52

TOTAL 25676401 17.24

13.0 DEMATERIALISATION OF SHARES AND LIQUIDITYThe dematting facility exists with both the National Securities Depositories Limited (NSDL) and CentralDepository Services (India) Limited (CDSL) for the convenience of shareholders. As on 31.03.2009,14,66,74,105 equity shares have been dematerialized, representing 98.50% of the subscribed capital.

14.0 OUTSTANDING GDRs/ADRs/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATEAND LIKELY IMPACT ON EQUITYThe Company has not issued GDR / ADR / Convertible instruments.

15.0 PLANT LOCATIONSManali Refinery, Manali, Chennai-600 068. [Phone No.044-25944000]Cauvery Basin Refinery, Panangudi Village, Nagapattinam District, Tamilnadu,Pin: 611 002. [Phone No.04365-256402]

16.0 ADDRESS FOR CORRESPONDENCEChennai Petroleum Corporation Limited,No.536, Anna Salai, Teynampet, Chennai - 600 018.Phone : 044-24349542 Fax : 044- 24341753E-mail : [email protected]'s Website Address : www.cpcl.co.in

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FOR THE KIND ATTENTION OF SHAREHOLDERS :

SUB : TRANSFER OF UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

The unclaimed dividend declared at the 36th AGM held on 18.09.2002 for the financial year ended 31.03.2002 willbe transferred by the Company on or before 17.10.2009 to the Investor Education and Protection Fund in accordance

with the rules framed in this regard by the Government.

Similarly, the unclaimed dividend declared at the 37th AGM held on 25.09.2003 for the financial year ended 31.03.2003

will be transferred by the Company on or before 24.10.2010 to the Investor Education and Protection Fund.

Therefore, Members who have not encashed their Dividend Warrants in respect of the above dividend, validity

period of which has expired, may approach either the Company or its Share Transfer Agents, viz.,

Karvy Computershare Private Limited, for obtaining duplicate Dividend Warrants immediately.

COMPANY SECRETARY

27

Directors Report 28

Annexures to Directors Report 45

Report to Shareholders

28


To the family of CPCL Share Owners,On behalf of the Directors of your Company, I am pleased to present the 43rd Annual Report on the working of yourCompany together with the Audited Statement of Accounts for the year ended March 31, 2009.

CORPORATE OVERVIEW

O Highest ever turnover of Rs.36489.67 crore achieved.

O Successfully commissioned the first Bank of the Reverse Osmosis (RO) Process Desalination of the5.8 MGD Sea Water Desalination Plant in January 2009.

O Manali Refinery achieved a crude throughput of 9707 Thousand Metric Tonnes (TMT) with a capacity utilizationof 102.2%. Cauvery Basin Refinery capacity utilization for crude oil refining remained low at 41.8% due tonon-availability of enough crude oil from Narimanam and PY-3 fields. However, CBR operated at 122% capacityfor LPG recovery from Natural Gas.

O Manali Refinery processed five new crude oils of imported origin viz., Arab Medium, Mellitah, NKossa,Rabi Light and Sarir and these crude oils are now added to CPCLs Crude procurement Basket comprising of47 Crudes. A trial cargo of new indigenous crude from KG Basin received in March 2009 and processed inApril 2009.

O Highest ever Production of MS (844.7 TMT), HSD (3534.7 TMT), Propylene (30.9 TMT) and Asphalt(492.7 TMT) achieved at Manali.

O Highest ever Secondary Processing in Fluidised Catalytic Cracker Unit (FCCU) and Hydro-Cracker Unit (OHCU)at Manali.

O Reduced the Fuel & Loss to 9% for Manali Refinery as against the previous best of 9.3% in 2007-08. Energyconsumption at Manali refinery was the lowest at 71.4 MBTU / BBL / NRGF as against the previous best figureof 75.2 in 2007-08.

O Product movement by pipelines reached a new height. Chennai Tiruchi Madurai Product Pipeline (CTMPL)achieved the highest ever throughput of 1.69 Million Metric Tonnes. A new pipeline from our Manali Refinery toIndian Oils Aviation Fuel Stations (AFS) in Meenambakkam, Chennai Airport was commissioned in December2008, dedicated for ATF pumping, thus reducing truck movement within the city.

O New LP Gas Compression facility commissioned at Kamalapuram in Tiruvarur District, Tamil Nadu to process17,000 SCMD of LPG rich Gas for recovery of LPG and Naphtha,at CBR.

O CPCL signed an MoU with Transparency International India for implementation of Integrity Pact to ensurecomplete transparency in contracts and procurements.

O Conferred the prestigious Mother Teresa Award for Corporate Citizen 2008, instituted by Loyola Institute ofBusiness Administration (LIBA) in recognition of our Corporate Social Responsibility activities.

O Awarded the Golden Peacock Award for Occupational Health and Safety for the year 2009 by the Institute ofDirectors, New Delhi.

O Honoured with EXIM Achievement Award by Tamil Chamber of Commerce for being the highest Custom Dutypayer in the State.

O Cauvery Basin Refinery selected for the Star Award by National Safety Council of India (NSCI),Tamil Nadu Chapter, Chennai for the year 2007 under the NSCI Safety Award scheme.

Directors' Report (Including Management Discussion and Analysis)

29

O Mr. C. Ramadoss, an employee of CPCL, CBR received the Petrofed Award 2008 Innovator of theYear Individual for his innovation in the areas of maximization of LPG Recovery from Feed Gas,Fuel and Loss reduction in Feed Gas Driers and reduction of fuel gas consumption in Heater.

O Nil comment obtained from Comptroller and Auditor General of India on the accounts of CPCL for 2008-09,sixth time in a row.

MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure and Developments

The world primary energy consumption increased by 2.7% in 2007 and the demand is expected to increase by 45%by the year 2030 from the current levels and fossil fuel will be the prime source for this growth. The increase will bemainly by non OECD (Organization for Economic Co-operation and Development) countries with population inurban areas of India and China contributing mainly to this growth. While, the renewable sources of energy arelikely to grow faster than fossil fuels, the petroleum products will continue to dominate energy demand.

The year saw extreme swings in crude oil prices, with an unprecedented rise in oil price till July 08, followed by arapid fall, between August 08 and December 08. The instability of the financial markets and economic uncertaintyhas accelerated the downward spiral of the petroleum and products prices, which has left the refineries withsubstantial stock valuation losses. The PSU oil companies in India faced the major brunt of this swing in crudeprices due to the product pricing structure in India. The Brent crude price reached $ 144 per barrel in July 2008 anddropped down to $ 36.5/bbl by Dec.08. Similarly, Indian crude basket has dropped from the peak of $ 147/bbl inJuly 2008 to about $ 35.8 / bbl in Dec.08. While this swing has severely affected stand-alone refining companies,like CPCL, it has largely reduced the strain on the Indian Economy as the country meets most of its crude oildemand through import.

The demand growth for petroleum products in Asia Pacific region is expected to fall due to economic recession andwith the projected increase in refining capacity in the region the margins will be under pressure. However the Indianrefining industry may have a stable outlook with creeping increase in local demand and export competitiveness.The Indian refining export is surpassing Singapore and soon Indian made petroleum products may have a priceindex of their own.

The crude oil imports by India increased to 128.15 MMT for the year 2008-09 which is an increase of 6% over theprevious year. The indigenous production is expected to increase with the KG basin and Rajasthan fields ready forcrude oil production this year. The Natural Gas production from KG basin has commenced already and this isexpected to ease the import bill of crude oil of India to some extent.

The overall growth in sales of petroleum products in India for the year 2008 -09 is 4.5% over the previous year.The sale of Light Ends increased by 5.5% and Middle Distillates by 5.8% while the Heavy Ends decreased by0.5%. The Southern Region witnessed a significantly higher growth in sales of MS, HSD, ATF, FO, Naphtha,Bitumen and LPG compared to the All India average.

The Indian refining industry has major investments earmarked for Fuel Quality upgradation projects which will haveto be ready for implementation from April 1, 2010. These investments will produce environment friendly Auto fuelsmeeting Euro IV standards for Metros and selected mega cities and Euro III standards for rest of the country.

The introduction of alternate fuels such as bio fuels will be a major effort world wide to reduce CO2 emissions.In India, the addition of ethanol to MS has been mandated. The Indian program on Bio Diesel from non edible oil isalso progressing although not significant enough to alter the consumption pattern of Petroleum products.The conversion of coal to liquid products is also being pursued by India. India, being 4th largest proven coal reservesin the world, holds considerable prospects for exploration and exploitation of Coal Bed Methane (CBM). Governmentof India has offered 10 blocks in different coal fields around the country for exploration and production of CBM.The alternate fuels for transportation will be a significant factor in the global efforts for reducing carbon foot prints.

30


Opportunities and Threats

The Indian Refining industry will complete its Fuel Quality upgradation projects in 2010 to meet the Euro IVstandards and this would increase its capability to export surplus transportation fuels worldwide. The availabilityof clean natural gas will reduce the stress on the environment and it can significantly economise in Indian CrudeBasket if used as refinery fuel. The refining industry has potential to increase its distillate yield by converting therefinery fuel oil and heavy ends for which the demand is reducing. Although this requires massive investments,it will lead to substantial improvements in refinery margins.

On the other hand, the increase in the availability of Natural Gas for Power and Fertiliser industries maysubstantially impact the demand of Naphtha. More Naphtha is likely to get exported from Indian Refineries.

The turmoil in the world economies will significantly affect investments in Exploration & Production (E&P) whichcan lead to uncertainty in crude oil prices. The projected decrease in growth in economies and overcapacity inrefining in the Asia Pacific region can increase the pressure on refining margins.

All countries will need to address the challenge of energy security and climate change. The reduction of carbonfoot prints will require significant growth of alternate energy sources such as wind, solar, bio fuels and geothermal.However these forms currently account for only 2% of the primary energy demand.

As the demand for primary energy increases there is concern that human activity contributes increasingly to globalwarming with 60% of all Greenhouse Gas (GHG) emissions linked to fossil fuels. The world is realizing that thistrend has to be reversed and low carbon technologies need to be developed. This would require emphasis onenergy conservation technologies and deployment of Nuclear and Renewable Fuel technologies.

Risks, Concerns & Outlook

The refining margins had been fluctuating in the past year and the volatility in crude prices and the pricing mechanismin India will impact the refinery margins. The Indian industry will also have to make significant investments to meetthe energy demands of the future. The economic climate and liquidity concerns will impact the pace of theseinvestments.

The oil marketing companies had to bear unsustainable losses due to the spiraling oil prices in this year and theinability to increase the prices for the consumers which adversely impacted their profitability and put a severe strainon the working capital and future growth of these companies.

In view of the volatile margins, refineries have to concentrate more on improving the distillate yields, keep a checkon energy consumption and reduce operating and other controllable costs to remain profitable and competitive.Refineries need to plan suitable capital investments in energy conservation projects and increasing the distillateyields.

Internal Control Systems and their Adequacy

Your Company has built adequate systems of Internal Control for financial reporting of various transactions, towardsachieving efficiency and effectiveness in operations, optimum utilization of resources and effective monitoringthereof as well as compliance with all applicable Laws.

The Internal Control Mechanism comprises of a well defined organization structure, documented manuals and pre-determined authority levels. In order to ensure that adequate checks and balances are in place and the internalcontrol systems are in order, periodical audits are conducted by the Internal Audit Department.

The performance of your Company is periodically monitored by the Board of Directors of the Company. The Boardalso periodically reviews Risk Assessment and Minimization Procedures prevalent in the Company.

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The salient features of operations during the year include the following:

Manali Refinery :

O Manali Refinery achieved a crude throughput of 9707 Thousand Metric Tonnes (TMT) with a capacity utilizationof 102.2%, against the previous year throughput of 9802 TMT.

O Major Secondary processing units OHCU and FCCU achieved the highest ever throughputs as detailed below:

Qty in TMTTarget Actual Previous best (Year)

OHCU 1800 1856 1825 (2006-07)FCCU 830 901 890 (2005-06)

O Maintenance & Inspection shutdown activities of CDU I, DHDS and Lube units completed safely.

O Highest ever production of the following products achieved :

(Figures in TMT)Product 2008-2009 Previous Best (year)Motor Spirit 844.7 811.6 (2007-08)High Speed Diesel 3534.7 3483.6 (2007-08)Propylene 30.9 28.9 (2007-08)Asphalt 492.7 454.6 (2007-08)Sulphur 48.5 44.0 (2005-06)

O Improved fuel and loss, for the year at 9.0% for Manali against the previous best of 9.3% in 2007 08. TheEnergy consumption at Manali Refinery was the lowest ever at 71.4 MBTU / BBL / NRGF as against theprevious best of 75.2 in 2007 - 08.

O Exports exceeded 1.0 MMT mark for the first time, with 1097 TMT of export (against previous best of 809 TMTachieved in 2006 - 07).

Cauvery Basin Refinery:

O Processed 418.1 TMT of Crude as compared to 464.2 TMT in the previous year, due to lower availability ofNarimanam and PY-3 Crudes.

O Achieved best performance in the recovery of value added products from Natural Gas as stated below :

(Qty in MT)Product 2008-2009 Previous Best (Year)LPG from LRU 7500 7302 (2007-08)Propane from LRU 660 310 (2007-08)NGL from LRU 3337 2602 (2007-08)

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MARKETING

Majority of the fuel products produced by your Company are marketed by Indian Oil Corporation Limited, theholding Company. During the year, your Company has achieved the highest ever sales of Propylene, Poly-ButeneFeed Stock (PBFS), Methyl Ethyl Ketone Feed Stock (MEKFS), Sulphur and Lube Extracts, which are directlymarketed by the Company.

Your Company has entered into long-term agreements with M/s. Cetex Petrochemicals Limited, M/s. KothariPetrochemicals Limited and M/s.Manali Petrochemical Limited for supply of MEKFS, PBFS and Propylenerespectively.

A smooth transition was achieved with regard to Direct Marketing of Paraffin wax through the three GovernmentAgencies, viz., TNSIDCO, Tamilnadu, Kerala SIDCO and NSIC with effect from October 2008.

During the year, your Company organized five Customer Meets 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), anexpenditure of Rs. 582.76 Crore has been incurred. Your Company accords highest priority for implementation ofProjects without time and cost overrun.

Completed Projects5.8 MGD Sea Water Desalination Plant

With a mission to achieve self- sufficiency for meeting the water requirement of the Refinery, a project for installationof a 5.8 MGD Desalination unit at an estimated cost of Rs.243.94 crore has been implemented during the year.With the commissioning of this unit, your Company will be in a position to meet its total water requirements throughin-house sources / facilities.

20 MW Gas Turbine

To enhance the reliability and quality of captive power generation of Manali Refinery, a 20 MW Gas Turbine at acost of Rs. 157.88 Crore has been commissioned.

LP Gas compression facility

LP Gas compression facility at Kamalapuram, Tiruvarur District was commissioned in November 2008. With thisachievement, Cauvery Basin Refinery is receiving additional 17,000 SCMD LPG rich Natural Gas through thisfacility and thereby increasing LPG production by 6 MT/day which enables the availability of additional 425 cylinderseveryday to domestic customers in Tamil Nadu.

On-going ProjectsAuto-Fuel Quality Upgradation ProjectYour Company is implementing Auto-Fuel Quality Upgradation Project to meet the revised specifications of MS andHSD from April 2010 onwards at an estimated cost of Rs. 2615.69 crore. Process Design and Detailed engineeringcompleted. Procurement activities are in advanced stage and many equipments / materials are at site. Site executionactivities are in progress. The project is expected to be completed in phases from early 2010 to middle of 2011.Capacity Enhancement of CDU / VDU of Refinery III

In order to produce additional value added products like LPG, Naphtha, SK, HSD, etc., existing Refinery-III capacityat Manali Refinery is being expanded from 3.0 MMTPA to 4.0 MMTPA at an estimated cost of Rs.200.41 crore.M/s. Engineers India Ltd. is carrying out detailed engineering, procurement and construction management of thisproject. The capacity expansion is expected to be completed by end of 2009.

35

Revamp of Semi Regenerative Catalytic Reforming Unit to Continuous Catalytic Reforming Unit

The existing Naphtha Hydrotreating / Semi Regenerative Catalytic Reforming unit is being revamped toContinuous Catalytic Reforming mode at an estimated cost of Rs. 273 Crore for producing high quality MSmeeting Euro IV specifications and also to increase the production by 10%. The Project is expected to becompleted by end of 2009.

SRU Revamp with Oxygen Enrichment Technology

Your Company is currently revamping one of its Sulphur Recovery Units to handle the increased acid gas thatwould be available from the Refinery III Revamp and Euro IV projects under implementation. With the adoption ofOxygen Enrichment Technology in this low-cost revamp job, the processing capacity of the SRU will increase by15% in phase I and 22% in phase II. EIL-R&D has prepared the process package for this revamp and detailedengineering and procurement activities are in advanced stages of completion. Initially, this technology has beenimplemented in Train-A of Refinery III Sulphur Unit in May 2009 and proved to be successful. Accordingly fullrevamp of the unit has now been undertaken.

New Project InitiativesResid Upgradation ProjectTo improve distillates yield and refinery margins, a Resid Upgradation project is proposed to be implemented.Selection of Project Management Consultant (PMC) for preparing the Detailed Feasibility Report (DFR) for theproject is in process.The process package for the Delayed Coker Unit (DCU) has been prepared by M/s. ABB Lummus. The processpackage for OHCU revamp has been made by M/s. Chevron Lummus Global. The process Package for the SulphurRecovery Unit by M/s. Siirtec Nigi is also received in June 2009. The Process Packages for Sour Water Stripper(SWS) Coker LPG Treatment and Amine Regeneration Unit (ARU) have been prepared by M/s. EIL.Single Point Mooring (SPM) & Crude Oil Terminal (COT) ProjectYour Company is proceeding with the installation of Single Point Mooring (SPM) and off-shore facilities forCrude Oil imports for its Manali Refinery alongwith Crude Oil Terminal and On-shore pipeline.

The pre-project activities comprising of Geo-physical survey, pipeline routing and Marine Geo-tech survey are inprogress. Geo-physical survey for the on-shore portion has been completed. The marine geo-tech survey hasbeen carried out at the SPM location by M/s. COMACOE. The tendering for appointment of Consultant for theoff-shore and on-shore activities (preparation of Detailed Feasibility Report and Engineering ProcurementConstruction Management Services) will be awarded shortly. The Detailed Feasibility Report is expected to beready by November 2009.

DEVELOPMENT STRATEGIES

Your Company continuously scans the environment for new opportunities and gives strong impetus towards newbusiness initiatives including formation of Joint Ventures, entering into Memorandum of Understanding for its LongTerm Strategic objectives and diversification plans.A Strategy Meet was organized in June 2008 to discuss and deliberate on several growth initiatives identified bythe Company. The important points identified during this Meet were discussed by the Board of your Company inJuly 2008 wherein Secretary, MOP&NG also participated.

Some of the major initiatives which emerged from the Strategy Meet include venturing into solar energy,implementation of Single Point Mooring (SPM), identification of other new business opportunities, infrastructureaugmentation, achieving excellence in HR, etc., Formation of a Joint Venture with Balmer Lawrie & Co. Ltd. to setup a Container Freight Station / Multi Modal Logistics Hub (MMLH) in our vacant land in Ennore also emerged fromStrategy Meet which is being further pursued.

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INDIAN ADDITIVES LIMITED

Your Company entered into the joint venture with Chevron Chemicals Company (now Chevron Oronite Company)for manufacture of Lube Additives components and packages in the year 1989.

IAL has achieved a turnover of Rs. 273.76 Crore during the year 2008-09, as against Rs.217.28 crore in theprevious year, registering a growth of 26%. The Profit after Tax for 2008-09 is Rs.8.67 Crore and the Board ofDirectors of IAL has recommended a Dividend of 9 % on the paid-up capital of the Company.

INFORMATION TECHNOLOGY

Your company is continuously marching ahead in the innovative usage of Information Technology for enablingspeedy decision making, improving operational efficiency and effective knowledge management.

Your Company has signed a Memorandum of Understanding with Indian Oil Corporation Limited for implementationof SAP. SAP is expected to go live in July 2009 which will make your Company a competitive player in the globalmarket, thereby the Company expects to improve the service standards of the Customers both internally andexternally.

Your Company has effectively utilized developments in the Information Technology for providing better services toits employees. Employee Outstation Information Systems, Intra-net based Leave Application System and On-lineVehicle Booking System have been successfully included in the IT System during the year.

Various Employee-related information like Office Circulars, Pay details, Employee Entitlement Forms, Income TaxParticulars, etc. are being displayed in the Intra-net web portals.

RESEARCH AND DEVELOPMENT (R&D)Your Company is conscious of the fact that todays competitive and challenging business environment, demandscontinuous upgradation and development of products, processes and services for sustained growth. Therefore,your Companys in-house R&D Centre attaches great significance to developing R&D capabilities and expertise invarious spheres of activities.

Your Companys in house R&D Centre continue to play a pivotal role in extending support to refinery operations bycarrying out Pilot Plant evaluation of catalysts and feed stocks for secondary processing facilities, assay of Newcrudes etc., It has further supported Refinery units like FCC, Hydro processing and Lube units with process andfeed optimization studies.

A high-pressure hydrotreating pilot plant was upgraded through revamp during this year with major modifications inPC-PLC Control system to carry out evaluation with excellent precision.

The research alliance between CPCL R&D center and National Centre for Asphalt Research, IIT Madras hasresulted in the development of various strategies for producing Performance Grade bitumen from CPCL Feedstocksmeeting ASTM, SHRP standards.

SAFETY MANAGEMENT

Your Company adheres to the best safety practices at par with global standards while carrying out its operations.Achieving credible safety performance at workplace by the employees and Contractors continues to remain as oneof the avowed objectives of your Company and concerted efforts are being taken to meet this objective.A Central Safety Committee headed by Director (Operations) reviews the safety related issues, External SafetyAudit recommendations and Internal Safety Audit reports on a monthly basis.

Two Area Safety Committees and six Zonal Safety Committees are functioning effectively to ensure the safety ofRefinery operations and take corrective action towards unsafe situations and near miss incidents, if any.

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As part of the Accident Prevention Programme, monthly contractors Safety Officers Meetings are heldwherein Safety issues are discussed and sorted out for improving the safety climate.

Fire & Safety Training classes are held every month, wherein training on Fire Appliances, Safety Gadgets, FirstAid, Practical training on Fire fightings are imparted. On the spot training for contract workers are conductedregularly in the areas of Operation of Fire Extinguishers, Self contained Breathing apparatus, Fall Arrestors andDecender Rescue Operations, etc. Safety training is also given to contract supervisors through the officials ofFactory Inspectorate focussing on the role of supervisors in ensuring Safety.

In addition, several Safety Audits and Checks, System Audits on Electrical safety, Construction safety, MonthlyHSE Audits, Daily Safety Surveillance Audit, Night Vigil rounds on weekly basis by Senior Officers are conductedregularly for improving the safe working conditions.

Oil Industry Safety Directorate has so far conducted seven External Safety Audits and Seven Surprise SafetyChecks in Manali Refinery and four External Safety Audits and six Surprise Safety Checks in Cauvery BasinRefinery. Status of implementation of these recommendations are reviewed by Central Safety Committee once amonth.

Offsite Mock Drill for the Manali area was conducted in February 2009 by Coromandel Fertilizers Limited, Ennorein which your Company actively participated. Off-site Mock Drill at CBR was conducted in January 2009 in thepresence of District Emergency Committee.

Oil Spill Response Mock Drill of the Chidambaranar Oil Jetty was conducted with the co-ordination of Coast Guard,Fisheries Department and Tamil Nadu Maritime Board in February 2009.

Awards / AchievementsAdherence to the best safety practices by your Company has won the following awards / certifications :

O Star Award by National Safety Council of India, Tamil Nadu Chapter, Chennai for the year 2007 for CauveryBasin Refinery under the NSCI Safety Awards Scheme.

O Suraksha Puraskar for the year 2007 for Cauvery Basin Refinery by National Safety Council of India.

ENVIRONMENT MANAGEMENT

Your Company has always demonstrated that business growth and development go hand in hand with an underlyingcommitment to the Environment. Your Company has taken several measures to minimize the adverse effects onthe Environment through deployment of clean and green technologies, adoption of environmental friendly practiceslike recycling of treated effluent, development of Green belt, etc.

The highlights of the Environment Management pursued by your Company during the year include the following :

Solid waste managementO Hazardous waste disposed through Tamilnadu Waste Management Ltd. for the first time for safe disposal

of spent catalyst

O Hydrogen peroxide treatment started in Effluent Treatment Plant 2 and 3 for reduction of oily sludge.

O Compliance with revised Minimum National Standards (MINAS).O Set up a new laboratory with additional testing facilities for testing new parameters as per new MINAS.

O Instituted Leak Detection And Repair (LDAR) programme with new VOC instrument.The dedicated Environment Cell of the Company works for the upkeep of Refinery environmental managementsystem and also for complying with the provisions of the statutory stipulations.

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ENERGY CONSERVATION

Energy conservation in your Company has continued to receive focus and thrust at all its operating locationsthrough effective planning and monitoring. This has resulted in improvement in Fuel and Loss percentage at 9.0%for Manali Refinery as against 9.3% in previous year. Energy consumption at Manali refinery was the lowest at 71.4MBTU / BBL / NRGF as against the previous best of 75.2 in 2007-08. The lower Energy Index was achieved bybetter heat recovery in the Units and optimized steam / power balance.

Several energy conservation measures were undertaken during the year which are detailed in Annexure II.

INTEGRATED REFINERY BUSINESS IMPROVEMENT PROGRAMME

Integrated Refinery Business Improvement Programme is under implementation in association withM/s. Shell Global Solutions International. 13 proposals with a net benefit value of 28.58 US Cents per barrel havebeen approved for implementation. As a part of this programme, your Company has taken up Risk and ReliabilityManagement Programme to provide robust risk assessment processes, better plant reliability and availability whichis expected to result in further refinery margin improvement.

OPTIMISATION

Your Company has always been in the forefront with regard to implementation of best process optimization techniques,advance control techniques, etc. as it recognizes that availability of right information at the right time and pooling ofresources are crucial for achieving high productivity and cost reduction.

The Company has taken various initiatives in the areas of optimization which include the following :O Implementation of Advanced Process Control (DMC +) in Hexane Unit which improved the Hexane

yield by 1.5%.O Development and deployment of an application module to provide automated SMS alerts on plant status,

emergencies, consolidated daily process reports, etc. to identified recipients.O Development of a generic Laboratory Information Management System with enhanced capabilities.O Implementation of a control strategy for minimization of fuel gas to flare in FCC CO Boiler which won

Energy Kaizen Award for best energy conservation concept for the year 2008.

TOTAL PRODUCTIVE MAINTENANCE (TPM)Your Company accorded continued thrust for implementation of TPM during the year. Various initiatives implementedin Process improvements had benefited the company in terms of improvement of furnace efficiency, delivery onschedule, Energy savings, establishment of systems and procedures, etc.

During the year, Second Kaizen conference was conducted. Around 25 Kaizens were presented from allTPM Circles in the areas of Operations, Maintenance, Energy saving etc. 5S Audit and Autonomous MaintenanceAudit was conducted at Refinery II and LEB / DHDS areas.

Cauvery Basin Refinery of your Company passed the Health Check conducted by the audit team of CII/TPM ClubIndia, which is a pre-requisite to contest for Pre Audit for participating in the TPM Excellence Award category Ainstituted by Japan Institute of Plant Maintenance JIPM.

ISO-SHEQ Policy

Your company is committed to conducting business with a strong environment conscience and has a comprehensiveSHEQ Policy to ensure sustainable development, safe work place and enrichment of quality of work life of itsemployees, customers and the community. The accreditation to EMS 14001:2004, QMS 9001:2000 and OHSAS18001:1999 by M/s. Bureau Veritas Certification India, Chennai at Manali and CBR has been continued afterconducting the Surveillance Audits during the year.

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HUMAN RESOURCES DEVELOPMENT

Your Company strongly believe that employees are its prime movers and an Organisation is only as good as itspeople. The greater the investments a Company makes in them, the stronger and more sustainable are the returns.Your Company has taken a slew of measures to attract, retain and motivate talent and offers its employees, thetools and techniques to facilitate better performance.

In order to prepare the companys human resources for future responsibilities in terms of professional and businessskills, various initiatives have been taken during the year which include the following :

O With the objective to create a rational, user friendly and transparent rating system, e-PerformanceManagement System (e-PMS) has been implemented successfully covering all supervisory employees.

O As a prelude to promoting and sustaining an enabling organizational climate, your company conductedan Employee Engagement survey which was found to be of very high order both in the case of officersand workmen. As regards Organizational climate, 6 out of 12 dimensions in the case of officers and 6 outof 13 dimensions in the case of workmen had been rated high. Necessary follow up action has beeninitiated to bridge the gaps identified in this Survey.

O An exclusive webpage was created for the benefit of the retired employees of your company giving thenames and addresses of the retired employees.

Manpower

01.04.2008 31.03.2009Supervisors 755 779Non-Supervisors 930 888TOTAL 1685 1667

During the year, your Company recruited 41 Officers and 11 Workmen. As a part of the apprenticeship trainingrequirement, 50 Diploma holders and 36 ITI Trade apprentices underwent one-year apprenticeship Programme inthe Company.

During the year, your Company has achieved 3.56 average training mandays against the target of 2.2 mandays.

The Refinery Engineering School of Training (RESOT) of CPCL, a well acknowledged centre for training on RefineryTechnology, conducted a Four modules Core Course of 8 weeks duration during the year. In addition, short durationprogrammes on Refinery Technology Development, Process Optimisation, Power & Utilities, Quality Control,Turnaround Management, Project Management, Team Building, Presentation Skills, Workshop on Hydrocracker,Environment Management Systems were also conducted with participation from CPCL, its downstream units inManali, reputed design consultants from Chennai and other Refineries of the country.

The Industrial Relations climate continued to be harmonious, cordial and peaceful throughout the year. Bi-partiteLong Term Settlement (Part-II) on work related allowances and benefits for workmen was signed on 19.02.2009with the recognized unions.

Various HR initiatives undertaken in the previous year like Mentoring, Department-wise Open House Meets andField visits were continued during the current year also.

Your Company has been scrupulously adhering to the Presidential Directives and various instructions of theGovernment relating to the welfare of the SC, ST, OBC, and Physically Challenged persons. There were 423 SCemployees (previous year: 424) and 34 ST employees (previous year: 34) as on 31.03.09 constituting 25.37 % and2.04% of the total manpower respectively. The statistics relating to representation of SCs / STs / OBCs in theprescribed proforma as on 01.01.09 is placed as (Annexure-I).

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WELFARE OF WOMEN

Your Company continues to give utmost priority for Women Welfare and Empowerment.

International Womens Day was celebrated by the Womens Cell by organizing a seminar on the themeEvolving the Blue Print for Change in which leading professionals delivered lectures on topics relating to WomenDevelopment and empowerment.

As on 31.03.2009, 82 women employees are on the rolls of the Company (previous year: 76), of whom 33 are in theSupervisory Grade (previous year: 26) and 49 are in Non supervisory Grade (previous year: 50), constituting 4.24%of the total Supervisory employees and 5.52% of the total Non-supervisory employees.

CORPORATE SOCIAL RESPONSIBILITY (CSR)Your Companys vision and mission statements lay emphasis on maximizing profit through manufacturing andsupply of petroleum products and other related businesses in a reliable, ethical and socially responsible manner.

In recognition of its good work on CSR, your Company has been conferred the prestigious Mother Teresa Awardfor Corporate Citizen 2008, instituted by Loyola Institute of Business Administration (LIBA).During the year 2008-09, your Company has incurred an amount of Rs.169.78 Lakhs towards CSR activities anddonations. Some of the Community Development Projects undertaken by your Company include the following:

O Sponsored 50 Girls (25 SC/ST and 25 Other Community) for one year Nursing Assistant Course at a costof Rs.5.00 lakhs under Empowerment of Women programme.

O Constructed Computer Room for Irula Tribal Womens Welfare Society, Chengalpet at a cost ofRs.5.00 lakhs.

O Sponsored Free Tuition / Computer Training Classes for the benefit of Students in and around Manali at acost of Rs.4.94 lakhs.

O Constructed two kitchen buildings for Schools at Nagore near Cauvery Basin Refinery at a cost ofRs. 3 lakhs.

Significant contributions towards Community Development Activities include the following :

O Contributed Rs.4.50 lakhs towards Implementation of Total Sanitation Scheme at Vayalur Village inThiruvallur District.

O Distributed Scholarship worth Rs.3.62 lakhs to the neighbourhood School Students.

O Donated Ultrasound Scanner machine and one Semi Auto Analyzer worth of Rs.5.00 lakhs to GovernmentPrimary Health Centre at Manali.

O Distributed Rs.5.00 lakhs worth of various necessary items to Physically Challenged people.

O Rs.5.00 lakhs spent on Skill Development Training programme for unemployed youth (boys) at CIPET,Chennai.

O Contributed Rs.5.00 lakhs for purchase of Tamarind Paste making Plant for Self Help Group Tribal Womenat Jawadhi Hill under empowerment of Tribal Women.

O Provided Steel Benches and Tables worth of Rs.8.70 lakhs to the neighbourhood Schools.

O Contributed Rs. 5.05 lakhs to various schools in and around Cauvery Basin Refinery towards uniformsets, school bags, activity based learning materials, Computer tables and chairs, etc.

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CPCL Educational Trust:

CPCL Educational Trust was founded in the year 1988 to develop the technical skills of the workers ofCPCL and its neighbourhood industries and also to educate the rural youth in the neighbouring villages toimprove their employability. The trust runs the following Institutions :

Industrial Training Institute (ITI)ITI offers two trades, viz., Electrical, which is of two years duration and Welder, which is of one year duration.33 students (19 in Electrical Trade and 14 in Welder Trade) were admitted during the year.Polytechnic College

CPCL Polytechnic College offers three-year Full time Diploma courses in Petrochemical Engineering, MechanicalEngineering and Electronics Communication Engineering and a four-year part time Diploma course in PetrochemicalEngineering. 235 students were admitted during the year for the various courses.

111 students passed out in April 2008 and 60% of the students got immediate placement through campusselection in companies like Tamilnadu Petroproducts Limited, Manali Petrochemical Limited, TVS Group,Supreme Industries, etc.

GLOBAL COMPACT

The United Nations Global Compact was first launched in 1999 and it calls on the Corporate sector to embrace acore set of ten principles pertaining to human rights, labour, environment, anti-corruption, etc.

CPCL, as a member of the Global Compact Programme, follows all the ten principles enshrined in the saidprogramme.

The highlights of the implementation of this programme include abolition of Child Labour, Transparency in Contractsthrough implementation of Integrity Pact, commitment towards Corporate Social Responsibility and continuousimplementation of welfare programmes.

OCCUPATIONAL HEALTH SERVICES (OHS)The Occupational Health Services of your company continued its activities focusing primarily on the health of theemployees through a comprehensive multi pronged approach which included prevention of illness and injuries byregular occupational hygiene monitoring of the environment. About 80% of the employees were monitored throughannual health examination and other programs. New equipments were added in OHS like Multi Parameter Monitorand Portable Ventilator in order to strengthen the infrastructure facilities for handling emergencies.

In recognition of its pioneering efforts in the field of Occupational Health in the Oil Sector and for the most significantimprovements and innovative activites practiced in the field of Occupational, Health and Safety, your Company hasbeen awarded the Golden Peacock Award for OHS for the year 2009 by the Institute of Directors, New Delhi.

INVESTOR RELATIONS

Your Company focuses primarily on disseminating information on its operations and initiatives on a regular basis.The following new initiatives were undertaken during the year for betterment of investor relations :

O A new facility has been introduced in the portal of Karvy, viz., www.karisma.karvy.com which enables theCompany to monitor the electronic shareholdings of the investors for the previous six months.

O The status of all Share Transfers, requests for dematerialization of shares, transmission of shares, etc.effected can be monitored online which will improve the service standards towards the shareholders.

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As on 31.03.2009, 14,66,74,105 shares have been dematerialized constituting 98.5% of the paid-up sharecapital of the Company. Out of 66,033 shareholders, 47,299 shareholders have dematerialized their sharesrepresenting 71.63% of the total number of shareholders. The Shareholders/ Investors Grievance Committee ofthe Board regularly monitors the grievances of Investors and ensure timely redressal.

CORPORATE GOVERNANCE

Your Company looks upon Corporate Governance as a process in which values and principles constantly evolvein line with the changing environment. CPCL has laid a stro