Directors Report of Chennai Petroleum Corporation Ltd.

Mar 31, 2025

On behalf of the Board of Directors of your Company, I am glad to present the 59^th Annual Report and the 3^rd Integrated Annual Report, on the business and operations 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 Accounts for the year ended March 31, 2025.

UPGRADATION TO SCHEDULE A

I am delighted to announce that your Company has been upgraded from Schedule B to Schedule A Category PSU company on 01.08.2024. This is a recognition for our consistent performance, strategic initiatives and the commitment to excellence demonstrated by the dedicated Team of CPCL. This also adds increased financial autonomy, better career progression opportunities, along with greater recognition and prestige for the company. Our continuous improvement in operations, finance, reliability, safety and sustainability will further enhance our image and establish our caliber among the top players in the Schedule A arena.

PERFORMANCE REVIEW

Financials (Standalone and Consolidated)

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

? in Crore
Particulars	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Gross Turnover	70963	79207	70963	79207
Profit Before Finance Cost, Depreciation and Tax	1060	4489	1041	4486
Finance Cost	245	223	245	223
Depreciation, Amortisation and Impairment	607	606	607	606
Profit Before Tax ( before Share of Profit of Joint Ventures)	208	3660	189	3657
Share of Profit of Joint Ventures	-	-	59	37
Profit Before tax	208	3660	248	3694
Tax Provision	34	949	34	949
Profit After tax	174	2711	214	2745

Analysis of Profitability

During the fiscal year 2024-25, your Company achieved a crude throughput of 10.454 MMT, representing 99.6% capacity utilization, despite a planned turnaround undertaken during the year. This performance reflects your Company''s strong operational discipline, focus on reliability, and effective capacity utilization. Operating consistently near full capacity, amidst scheduled shutdowns, has become a defining strength of your Company''s capabilities, reflecting its commitment to sustained excellence and operational resilience.

The Company achieved a significant milestone in operational efficiency during the fiscal year 2024-25 by recording its lowest-ever fuel and loss at 8.51%, reflecting sustained efforts in energy optimization and process improvement. Energy efficiency indicators reached new highs through achievement of best-ever annual Specific Energy Consumption (MBN) of 72.0 and Energy Intensity Index (EII) of 87.4 highlighting efficient energy usage.

For the fiscal year 2024-25, the Gross Refining Margin (GRM) was recorded at US$ 4.22 per barrel (Singapore GRM: $3.80 per barrel), compared to US$ 8.64 per barrel (Singapore GRM: $6.61 per barrel) in the previous financial year. Our current GRMs have consistently outperformed Singapore GRMs over the last two years, largely due to crude procurement strategies, optimized refinery production, operational reliability, enhanced product slate, and efficient secondary units processing capabilities.

The PAT of ?174 crore in FY 2024-25 was lower mainly due to lower margins prevailing in international market and lower thruput on account of turnaround of one of the crude units in FY 2024-25.

Issue of securities / change in share capital

During the year 2024-25, 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 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%20policy.pdf

Our Board has recommended a Dividend of 6.65% on the paid-up outstanding preference share capital of the Company, representing ?0.665 per preference share amounting to

?33.25 crore for the year 2024-25.Considering the profit levels and need to reward the minority shareholders, the Board has recommended a dividend of 50% on paid-up Equity Share Capital of the Company of ?5/- per share as on 31.03.2025 amounting to ?74.46 Crore.

Book Value and Reserves and Surplus

The reserves and surplus as on 31^st March 2025 is ?7789.59 crore as compared to ?8444.05 crore as on 31^st March, 2024.

The book value per share of your Company as on 31.03.2025 is ?533.11 as compared to ?577.05 as on 31^st March 2024.

Value Addition

The value addition during the year 2024-25 is ?1530 Crore as compared to ?5040 Crore in the previous year.

Digital India Initiatives

Your company has achieved 100% digital transactions during the financial year 2024-25.

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:

? in Crore
Particulars	2024-25	2023-24
Central Exchequer	12673	14690
State Exchequer	967	1049
Total	13640	15739

Capex

Your Company has incurred Capital Expenditure of ?680.82 crore for the year 2024-25 as compared to ?611.15 crore in the previous year 2023-24.

Public Deposit Scheme

Your Company has not accepted any public deposit during the year 2024-25 and no public deposit was outstanding as on 31^st March, 2025.

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 borrowings /	CRISIL and ICRA	AAA
PCFC (including BG)
Commercial Papers	CRISIL and ICRA	A1
Debentures	CRISIL and ICRA	AAA

Transfer of Unclaimed Dividend to IEPF

A sum of ?1,76,80,383/- representing unclaimed dividend for the year 2016-17 along with the underlying 29,688 shares were transferred to the Investor Education & Protection Fund (IEPF) as per Section-124 of the Companies Act, 2013 during the year 2024-25.

A sum of ?2,88,23,203/- was transferred to IEPF in respect of the dividend declared for the financial year 2023-24 on the company''s shares held with the IEPF.

OPERATIONAL PERFORMANCE:
CRUDE OIL throughput in Thousand Metric Tons (TMT)	2024-25	2023-24
Imported	8860	10080
Indigenous	1594	1562
Total Throughput	10454	11642
PRODUCTION (in TMT)
Light Ends	2704	2886
Middle Distillates	5613	6315
Lube Base Stock	228	248
Wax	25	25
Heavy Ends	1505	1508
Intermediates differential	(28)	36
Other Inputs	(527)	(441)
Fuel & Loss	934	1065
Total Output	10454	11642
Distillate Yield	75.7	76.2
Fuel and Loss (%)	8.51	8.81
(TMT = Thousand Metric Tonnes)

Operational Performance

Your Company achieved a crude throughput of 10.454 MMT in 2024-25 which was 99.6% of the design capacity, a significant achievement considering two critical phases of M&I shutdowns while achieving the highest ever daily crude throughput of 36.0 TMT per day on 26^th March 2025.

Distillate yield of 75.7% was achieved as against 76.2% in the previous year. Consumption of Regasified Liquefied Natural Gas (RLNG), a cleaner fuel, rose by 1.2 times over the previous year, reaching an all-time high of 527 TMT, surpassing the earlier best of 441 TMT in 2023-24 contributing to 4.7% of CO₂e reduction, equivalent to 113.0 TMT of CO₂e.

On the energy front, the specific energy consumption (MBN) recorded the best-ever at 72.0 as against the previous best of 72.2 in the year 2023-24. Fuel & Loss achieved was the best-ever at 8.51% during the year as compared to 8.81% in the previous year. These milestones reflect your company''s continued focus on energy efficiency and process optimization.

Your Company clocked the highest ever production and despatch for the year in respect of the following:

	Production in TMT		Despatch in TMT
Product	Production Quantity in 24-25	Previous Previous Despatch best best Quantity Quantity year in 24-25		Previous Previous best best Quantity year
Hexane	29.8	28.4 2022-23	29.5	28.1 2023-24
Mineral Turpentine Oil (mto)	54.4	40.2 2023-24	54.4	40.2 2023-24

Some of the other highlights of Operational performance

during the year are as under:

• Successfully processed two new crude grades-Kuwait Super Light and ONGC''s KG-D-98/2.

• Production and sales of new value added product viz., Pharma grade Hexane commenced in September''24, diversifying the product portfolio with high value offerings

• A total of nine Very Large Crude Carrier (VLCC) tankers were efficiently handled during FY 2024-25, underscoring CPCL''s growing scale and operational capabilities. As part of logistics cost optimization, term cargoes were smartly co-loaded with IOCL''s Paradip and Vadinar shipments, reflecting enhanced synergy and supply chain efficiency.

• Reduced water consumption from 6.6 Millions of Gallons per Day (MGD) in 2023-24 to 5.4 MGD in 2024-25 by implementing various water conservation measures and by scaling up the concept of Reduce, Reuse and Recycle

• In March 2025, your Company operated at peak efficiency, driving exceptional performance across several secondary processing units and product production and dispatches, which achieved record monthly highs:

- Once-Through Hydrocracker Unit (OHCU), Delayed Coking Unit (DCU), and Continuous Catalytic Reforming Unit (CCR) recorded their highest-ever monthly throughputs at 229.4 TMT, 201.9 TMT, and 41.3 TMT respectively.

- Highest-ever Mineral Turpentine Oil (MTO) dispatch was achieved at 8.6 TMT.

- Motor Spirit (MS) production reached 108.5 TMT.

- Lean Butene, a petrochemical feedstock, dispatch hit 787 MT.

• Your Company also continued to innovate in the following areas:

- Co-processing trial run using Used Cooking Oil (UCO) was successfully completed for production of Sustainable Aviation Fuel (SAF) in OHCU. The SAF product conformed to ASTM D1655 Jet A-1 and DEF Standard 91-091 Issue 17 specifications.

- Trial production of Mineral Turpentine Oil (MTO) (Textile Grade) in DHDT during November 2024.

Awards & Accolades

• Your company was conferred with the Federation of Indian Petroleum Industry (FIPI) "Innovator of the Year -Special Commendation” at the FIPI Annual Awards 2023 on 26^th November 2024 for "Indigenously Manufacturing Rocket Propellant Fuel” - a testament to your Company''s commitment to national self-reliance.

- This prestigious award acknowledges CPCL''s trailblazing achievement in indigenously manufacturing rocket propellant fuel ISROSENE for ISRO and fuel equivalent to JP7 for DRDO, showcasing its commitment to advancing innovation and self-reliance in strategically vital sectors

- The citation lauds Shri P. Kannan, Director (Operations), and his dedicated team for their relentless efforts, collaboration, and commitment that led to this landmark accomplishment.

Your Company was awarded the "Environment Health and Safety (EHS) Excellence Award 2024” by Confederation of Indian Industries (CII) for the second consecutive year on 15^th May 2024, underlining the Company''s unwavering focus on Safety as an integral part of the Organisational culture.

• Your Company portrayed technological advancements and showcased the various initiatives and innovation, for more than 60 years since inception, including the recently developed niche fuels for supply to DRDO & ISRO, diversification of the product basket and strides towards sustainability under the overarching spirit of Atmanirbhar Bharat.

• Your Company earned the prestigious Global Refining and Petrochemicals Congress (GRPC) "Refinery of the Year 2024” award on 10^th July 2024 in recognition of its continuous strive for Operational Excellence and delivering value to all stakeholders.

MoU Performance

Your Company has received "Excellent” rating for its performance during FY 2023-24 with respect to the MoU signed with its holding Company, Indian Oil Corporation Limited (IOCL). Further, your Company signed MoU with IOCL for FY 2024-25, as per the guidelines issued by the Department of Public Enterprises (DPE)

MARKETING

Your Company has been granted license by Government of India to exercise Retail Marketing Rights for the distribution of Motor Spirit (MS) and High-Speed Diesel (HSD) .This historic milestone enables us to transition from a refining-centric entity to an integrated energy company with a direct presence in the consumer market. Further this development signifies not merely an expansion of operational horizon, but a fundamental evolution in your Company''s strategic posture. Indian Oil Corporation Ltd., the holding company, markets most fuel products and Petroleum, Oil and Lubricants (POL) produced by CPCL. Apart from the above, the details of sale of products through direct marketing by your Company during 2024-25 as compared to the previous year 2023-2024 are given below:

PRODUCT	SALE QTY (IN MT)
	2024-25	2023-24
A: Downstream Products
Linear Alkyl Benzene Feed Stock (LABFS)	62091	56287
Butene-2	7220	8904
Methyl Ethyl Ketone Feed Stock (MEKFS)	9581	11388
Lean Butene	6346	656
Propylene	26987	35115
Poly Butene Feed Stock (PBFS)	6469	7160
Lean PBFS	4599	5393
B: Other Products
Paraffin Wax	23702	25327
FG Hexane	25496	28083
PG Hexane	4279	0
Sulphur	108802	121291
Pet-Coke	471221	529112
Mineral Turpentine Oil (MTO)	54450	40263
Naphtha (to others)	2245	0
Furnace Oil	0	197
Isrosene	68	34
ISRO Naphtha	651	258
TOTAL	814207	869468

Your Company achieved several marketing milestones during FY 2024-25, reflecting strong customer engagement and operational excellence.

• Sales of directly marketed products (excluding Petcoke and Sulphur) increased by about 7% year-on-year, reaching 234.18 TMT.

• Your Company recorded its highest-ever annual sales in FY 2024-25, with Mineral Turpentine Oil (MTO) at 54,450 MT, Hexane at 29,775 MT, and Lean Butene at 6,346 MT—reflecting growing demand and operational excellence.

• In terms of monthly performance, your Company achieved its highest-ever monthly sale of MTO at 8,679 MT in March 2025, wax at 3,687 MT in January 2025, and Lean Butene

at 787 MT, also in March 2025—marking new benchmarks in product offtake and dispatch efficiency.

• A significant product diversification milestone was the launch of Pharma Grade Hexane along with Sustainable Aviation Fuel, by Shri Pankaj Jain (IAS), Secretary, Ministry of Petroleum and Natural Gas.

• Your Company also commenced the first-ever supply of Ultra-Low Sulphur Naphtha by tanker trucks on 6^th December 2024 to customers beyond ISRO, expanding its market reach.

• Your Company also achieved a notable milestone in logistics, with efficient and pollution-free Petcoke dispatches by rake reaching an all-time high of 54 rakes,

totaling 200 TMT in FY 2024-25, as against 40 rakes in the previous year—demonstrating sustainable supply chain practices.

• In line with its customer-focused approach, your Company continues to strengthen market presence through regular engagement and feedback. As one such initiative, a customer meet held in Madurai during the year witnessed enthusiastic participation, reflecting CPCL''s commitment to building strong and lasting relationships.

• A key digital milestone was the implementation of a new weighbridge software digitally integrated with SAP via API (Application Programming Interface), enabling seamless real-time data exchange between systems. This integration has significantly improved invoicing and logistics operations by enhancing accuracy, reducing manual intervention, and improving turnaround time— benefiting both your Company and its holding company, IOCL.

RESEARCH & DEVELOPMENT (R&D)

Your Company''s R&D plays a vital role in providing support to

refinery operations.

During the year, various studies were carried out as under:

• Quality improvement (Viscosity Index) of Group-1 LOBS by doping Unconverted Oil (UCO) with Inter Neutral (IN) Raffinate. Necessary infrastructure developed and the plant trial completed.

• Fractionation of products like ATF/MTO/PCK/LSATF from DHDT treated diesel.

• Development of a process for the production of textile grade MTO from DHDT and the plant trial completed.

• Identification of Alternate Crude Source for Wax production besides Mumbai High Crude Study on wax potential conducted for KG DWN 98/2 crude sample and based on

the study, a trial run in wax plant conducted successfully by using HVGO fraction of KG DWN 98/2 crude.

• A research study in progress to produce speciality product Dearomatized Kerosene (DAK) from refinery streams.

• Enhancement of wax potential of Mumbai High crude LVGO component by extraction of aromatics and removal of diesel fraction.

• Production of speciality product Jute Batching Oil (JBO) from refinery streams.

Following initiatives were undertaken as part of Industry-Academia Collaboration:

• Signed MoU with Indian Institute of Technology Madras (IITM), Chennai, Tamil Nadu and Rajiv Gandhi Institute of Petroleum Technology (RGIPT) Amethi, Uttar Pradesh to conduct collaborative research projects.

• Created CPCL-IITM Research Cell (CIRC) to provide solutions to refinery problems via collaborative research projects. As a part of CIRC, the following three collaborative research projects have been initiated:

• Developed a "Corrosion Inhibitor Formulation to mitigate the corrosion induced by Ethanol Blended Petrol (EBP)” in collaboration with RGIPT.

• Established the Proof of concept for "Green Hydrogen generation from Reverse Osmosis (RO) Reject through Alkaline Water Electrolysis” in collaboration with IITM.

• Engaged in a Collaborative project with RGIPT on "Production of Nanocellulose from Rice Straw”.

Your Company has filed a patent on the invention "Composition and method for inhibiting corrosion in steel in ethanol blended fuel environment” jointly by RGIPT and CPCL. A technical paper on "Fractionation of ATF from DHDT treated Diesel - A diesel reduction methodology” was presented at 14^th "International Symposium on Fuels and Lubricants (ISFL 2025)” organized by IOCL R&D Centre, Faridabad during March 20-22, 2025.

SUSTAINABILITY

• Your company achieved a significant milestone with the installation of a 1.04 MW Solar Power Plant in Manali Refinery, demonstrating its commitment to sustainability and advancing Company''s dedication to renewable energy. Nestled amidst expansive fields of photovoltaic panels, this state-of-the-art facility serves as a beacon of hope for a greener tomorrow.

• Consumption of Regasified Liquefied Natural Gas (RLNG), a cleaner fuel, rose by 1.2 times over the previous year, reaching an all-time high of 527 TMT, surpassing the earlier best of 441 TMT in 2023-24 contributing to 4.7% of CO₂e reduction, equivalent to 113.0 TMT of CO₂e.

PROJECTS

Your Company invested a total of ?680.82 Cr. in CAPEX, surpassing the budgeted estimate for FY 2024-25 by 135.9%, projecting its commitment to strategic investment and growth initiatives.

COMPLETED PROJECTS

Revamp of ISOM unit for Pharma Grade Hexane Production

Your company successfully completed and commissioned the revamp of existing conventional column internals with Divided Wall Column (DWC) Technology for production of 35000 MTPA of Pharma Grade Hexane in the Isomerization Unit (ISOM), at an estimated cost of Rs 69.91 Cr (incl GST) in August 2024.

Rain Water Management & Disposal Study

Your company engaged consultant M/s. WAPCOS, a Public Sector Enterprise for providing consultancy services for drainage and water management in your Refinery to strengthen the water management system and to tackle excess water from reservoir discharges & discharge levels in Buckingham canal. The report with recommendations were submitted in September 2024 and the same are complied.

Construction of New Storm Water Ponds

Your company completed the construction of 3 new storm water ponds in Manali Refinery in October 2024 thereby increasing the holding volume of stormwater by 1.5 times, based on the comprehensive study by M/s. WAPCOS.

Contaminated Rainwater System (CRWS)

Your company installed a New CRWS unit, having a capacity of 100 m3/hr, in Mandatory Tank Farm (MTF) area in Manali Refinery which ensures oil removal followed by a Two-stage filtration using Dual Media Filters (DMF) and Activated Carbon Filters (ACF) for Total Suspended Solids (TSS). The unit was commissioned in December 2024.

PROJECTS UNDER IMPLEMENTATION:

Laying of 28" Desal line & 10" RO Reject line

Your company is laying 22 km long new 28” Desal Water Pipeline and new 10” RO Reject water Pipeline between Manali Refinery and its Desalination plant at Ennore, at an estimated cost of ?205 Cr ± 10% (incl of GST), to improve reliability of Desal water supply to Manali Refinery. The anticipated completion will be end of December 2025.

QRMH & Bollards installation at Chennai Port Authorities

Your company is installing 1 No. of Quick Release Mooring Hook (QRMH) and 3 Nos. of Bollards at Bharathi Dock-1 (BD-1) to enable simultaneous berthing of Product Tankers to improve the TRT (Turnaround Round time i.e.,the time taken between the arrival of a vessel and its departure) and operational efficiency of the tanker.

Floating Solar plant in CPCL

Your company is installing floating solar panels in CPCL reservoirs for a total capacity of 1140 KW to enhance renewable energy portfolio of CPCL at an estimated cost of ?7.23 Cr. (Incl of GST) and the anticipated completion will be end of September 2025.

FUTURE PROJECTS

Group II/III LOBS Projects

CPCL intends to implement the ''LOBS Project'' for production of Group-M/III Lube Oil Base Stocks, at its Manali Refinery. The project involves revamp modification of the existing HydroCracker Unit from 2.25 to 2.35 MMTPA and installation of a new Catalytic Dewaxing Unit to produce 256 TMTPA of finished Group-II/III LOBS. The project is estimated to cost ?1,620 Crore. Chevron Lummus Global USA is the Process Licensor and Engineers India Limited is the PMC for the Project. Environmental Clearance has been obtained from MoEFCC.

CPCL has received approval from its holding company, Indian Oil Corporation Ltd (IOCL), for the investment proposal to implement the LOBS Project, with an implementation schedule of 31 months.

The Project benefits from reducing the Nation''s Lube Base Oil Import and promoting Atmanirbhar Bharat. Besides being lucrative, the project offers synergy for supply of premium Lube Base oils to IOCL''s upcoming Servo Integrated Lube Complex at Amullavoyal, Chennai.

Feasibility Study for New Projects/Initiatives

i) Sustainable Aviation Fuel

As per Government guidelines, CPCL plans to co-process Used Cooking Oil (UCO) and produce SAF of about 10 KTPA by 2030.

ii) Green Hydrogen Plan by 2030

As per the Government guidelines, CPCL plans to install Green Hydrogen Generation Unit of 10 KTPA by 2030. As a first step, a tender for 2 KTPA has already been floated and the same is under evaluation.

iii) Carbon capture and Utilization by 2030

CPCL has plans to install facilities to Capture & Recover about 400 Tons of CO₂ per day from existing Grey Hydrogen Generation Unit.

HEALTH, SAFETY AND ENVIRONMENT

Health

Several health promotion programs were conducted during

the year and the significant among them include the following:

• 50 Doctors enrolled in the AFIH (Associate Fellowship in Industrial Health) program conducted by ESIC Medical College and Hospital,Chennai under the guidance of Director General of Factory Advisory Services and Labour Institute (DGFASLI) who visited OHS on the 20^th May 2024 as part of the curriculum. The training Doctors were appraised on the activities of OHS and were enlightened on the Safety measures taken and the safety facility in the company.

• In a significant effort to enhance employee well-being and safety, cooling vests were introduced to mitigate heat stress, particularly for team members working in hot, humid, and confined environments. These vests were developed by M/s Sukoon, an IIT-M incubated start-up. The adoption of these vests reinforces CPCL''s commitment to improving the well-being and efficiency of its workforce.

• Awareness campaign was conducted by OHS group and Banners / Posters on "Beat the Heat” positioned in strategic locations in the refineries premises. Medical Mitigation Measures undertaken for Beating the Heat wave during the period of May to June 2024. Special Mobile Medical Team Rounds in plant area - between 12:00 to 15:00 hours to ensure all employees are well hydrated. Distributed ORS - Oral Rehydration Salt sachets / tetra packs.

¦ Organised Free Eye Care Camps in coordination with Sankara Nethralaya for the benefit of the public in and around Ennore as part of Corporate Social Responsibility (CSR) Health program, covering complete eye check up including refraction errors detection, fundus examination and Tele ophthalmology consultation with specialists . Spectacles were provided free of cost for needy patients with refraction error. Cataract removal with Intraocular Lens (IOL), surgery were performed for the needy and the entire cost for IOL surgery, transportation and food was borne by CPCL.

-As a part of creating awareness for environmental conservations, saplings were planted and jute bags were distributed to the public.

- Pre-emission check for vehicles in Manali and Thiruvottiyur areas was also done to increase awareness about vehicle maintenance and pollution due to emissions.

• Your Company undertook significant green initiatives

during the year, including

- Planting and maintenance of 55,000 Casuarina seedlings in Nagapattinam District through the Nagapattinam Wildlife Division

- Distribution of 3,700 saplings to schools and Government hospitals in the Manali and Thiruvottiyur areas

- Registration under the Green Credit Programme developed by Ministry of Environment, Forest and Climate Change (MoEFCC). As part of this program, 211 hectares of land in Tiruvannamalai and Tiruvallur districts have been earmarked for green cover development aimed at generating green credits.

• Contributed to public awareness on environmental issues

by

- Supporting the Tamil Nadu Pollution Control Board in its initiatives to educate the public, students, and industries on the harmful effects of Single-Use Plastics (SUP) and promote eco-friendly alternatives.

- Undertaking on-ground awareness activities, including vehicle emission checks and the display of digital scrolling messages in public locations to promote fuel and energy conservation.

ENERGY CONSERVATION

Your company is keen on conserving the energy by

implementing several energy conservation measures.

• As mentioned earlier during the year, your Company achieved its best-ever performance in Specific Energy Consumption (MBN) and Energy Intensity Index (EII), registering values of 72.0 and 87.4 respectively.

• 14 numbers of energy conservation measures were implemented successfully during the year, which resulted in energy savings of 33352 Standard Refinery Fuel Tonne (SRFT) per annum corresponding to approximately 0.30% reduction in F&L. The details of energy conservation measures are given in Annexure I.

• As part of awareness-building initiatives, your Company actively observed the Oil & Gas Conservation Fortnight (SAKSHAM 2025) from 14^th to 28^th February 2025, in line with the directives of the Ministry of Petroleum and Natural Gas (MoP&NG). Themed "Cleaner Environment through Green and Clean Energy,” the fortnight included activities such as

- Auto emission checks at Indian Oil petrol bunks in Anna Nagar and Tiruvanmiyur,

- A walkathon at Velammal Engineering College and creative Arts competitions for the employees'' families.

- A technical seminar for the Manali Industries Association.

• A Furnace Efficiency Audit, conducted by CHT external auditors as part of SAKSHAM 2025, highlighted a significant improvement in performance, with overall furnace efficiency increasing from 84.7% in 2023 to 86.9% in 2025

RELIABILITY IMPROVEMENT INITIATIVES

Your Company has undertaken several targeted measures

to enhance the reliability of its operations, reflecting a

strong commitment to safety, continuity, and performance

excellence. The key initiatives include:

• Inline inspection of the 10" LPG pipeline (non-piggable) from the Refinery to the Bottling Plant was successfully carried out, ensuring pipeline integrity and operational safety.

• RFID-based corrosion probes were installed at critical pipeline sections, enabling continuous and real-time monitoring of corrosion behaviour—a forward step in predictive maintenance.

• Health assessment of Delayed Coker Unit (DCU) coke drums was conducted using advanced laser scanning and strain analysis techniques, reinforcing your Company''s focus on equipment integrity and lifecycle management.

• High-performance gaskets were introduced to prevent flange leaks, reducing the risk of emissions and unplanned shutdowns, thereby improving reliability.

• Next-generation furnace skin thermocouples were installed to enhance proactive monitoring of heater coil health, accuracy and prevention of failures during operation.

DIGITALIZATION INITIATIVES

• As the oil and gas industry continues to evolve, your company has proactively embraced this transformation, recognizing the immense value that digital integration, real-time data analytics, and intelligent automation bring to refining operations. Through these efforts, not only safety and operational efficiency is enhanced but also the resilience needed to thrive in today''s competitive environment.

• With strong progress in immersive training, predictive maintenance, and automation, the company continues to build internal capabilities and foster a digitally enabled workforce. With artificial intelligence poised to play a central role, the focus remains on building a digitally empowered workforce and creating a smarter, more agile, and future-ready CPCL.

Some of the initiatives undertaken were as under:

• Signed a Memorandum of Understanding (MoU) with the parent company, Indian Oil Corporation Limited (IOCL), on 18^th December 2024—a significant step towards adopting and implementing IOCL''s flagship i-DRIVE digital transformation initiatives. This collaboration aims to accelerate digital maturity and foster data-driven decision-making, drive optimization models, and digitalise operations.

• Implemented Robotic Process Automation (RPA) for

automated reporting, including vendor payment status

tracking for MSMEs and general vendors, leading to improved transparency and efficiency.

• Developed and implemented an Advanced Process Control (APC) Monitoring Dashboard for one of the crude units, enabling real-time tracking of APC utilization and enhanced process optimization.

• Launched a state-of-the-art Virtual Reality (VR) Training Lab, equipped with Meta Quest Pro headsets and high-performance workstations, offering immersive, hands-on training to strengthen workforce preparedness.

• Introduced smart helmets with remote assistance capabilities, allowing technicians to receive expert guidance on-site—boosting operational efficiency and safety in the field.

• Deployed an Artificial Intelligence powered video analytics solution during the Fluid Catalytic Cracking Unit (FCCU) and Crude Distillation Unit - II (CDU-II) Maintenance & Inspection (M&I) turnaround in October 2024, reinforcing focus on safety through real-time monitoring and proactive risk management.

• A Workshop Management Application was introduced to streamline electrical workshop operations and improve task tracking, while the Failure Analysis & Reporting of Incidents (FARI) platform digitized incident reporting and root cause analysis.

• Introduced the E-Safe View system, an integrated safety monitoring platform providing real-time situational awareness across key safety metrics including work permits, radiography monitoring, and firewater isolation.

• Digital Twin ML model development for complex refinery units such as the Fluid Catalytic Cracking Unit (FCCU) and the Delayed Coking Unit (DCU) to enhance process optimization and improve throughput is in process

• Preparatory work also commenced for deploying an AI/ML-based (Artificial Intelligence/Machine Learning) Predictive Asset Maintenance (PAM) system to enhance asset reliability and reduce unplanned downtime.

INFORMATION SYSTEM

Information technology continued to play a pivotal role in the growth of your company''s business with the implementation of various initiatives aimed at harnessing the advancements in technology, which were carefully infused with our core values of innovation, passion and trust.

Initiatives taken on the areas of information technology include the following:

• Introduction of QR code-based vendor registration system using Microsoft Forms integrated with MicroSoft SQL databases, streamlining and securing the vendor onboarding process with a fully mobile-friendly, paperless approach.

• Successfully implemented the Information Security Management System (ISMS) in compliance with ISO/IEC 27001:2022 as part of our commitment in establishing a robust Information Security framework and obtained the corresponding certification in November 2024. This accomplishment demonstrates your Company''s continuous commitment in developing and upholding a strong Information Security system.

Cyber Security initiatives

Your Company has put in place a fully operational Security Operations Centre (SOC) providing 24x7 and 365 days of continuous monitoring to ensure real-time detection and response to cyber threats and as a result there were no cyber incidents to date.

Cybersecurity status and posture are reviewed at the board level, as per the directives of the Ministry of Petroleum and Natural Gas, demonstrating Company''s commitment to strategic oversight and continuous improvement in safeguarding our digital infrastructure.

Various proactive security measures include

- Quarterly Vulnerability Assessment and Penetration Testing (VAPT) conducted by a CERT-In empanelled agency for public facing IPs, Monthly Vulnerability Assessments (VA) of internal IPs to identify and remediate potential weaknesses

- Annual IT audit for entire IT infrastructure and Quarterly Information Security Steering Committee (ISSC) meetings with the South Director of National Critical Information Infrastructure Protection Centre (NCIIPC) for review of overall cybersecurity posture.

• To cultivate a strong security culture across the organization, regular phishing simulation drills and cybersecurity awareness trainings are conducted to ensure that employees remain vigilant and informed.

HUMAN RESOURCES

Your Company recognizes that preserving and developing the intellectual resources is essential for the organization to successfully meet the challenges of the industry. Accordingly, several initiatives have been taken for the growth and development of employees to face future challenges.

Manpower Details

• The total strength of employees as on 31^st March, 2025 was 1413 out of which 83 were women employees. The total number includes 732 Executives and 681 Non-executives.

• To further the cause of apprenticeship training in the country, the Company engaged 154 apprentices under various categories like Trade, Technician, and Graduate which constitutes 10.8% of the total workforce. The apprentices were imparted practical inputs with a structured monitoring and assessment methodology.

Learning & Development

Your Company has made significant progress on this front, to develop employees at all levels on both Technical and Managerial fronts. During the year 2024-25, your company has achieved 3.03 Training Mandays.

Major highlights include:

• Adoption of Micro-Learning approach to improve the efficacy of the training in line with the changing trends in Training which fetched an award at the 5^th Federation of Indian Chambers of Commerce and Industry (FICCI) Innovation summit. Your Company''s win solidifies its position as an emerging organisation in innovative workplace solutions.

• Conferred with National Award for HR Excellence in PSU category for implementation of various Best Practices in HR.

• New training initiatives include

- Bite-sized learning i.e., breaking down learning into digestible chunks, which is easier for learning to provide daily chunks of small learnings on various topics related to the refining business.

- Development and administration of pilot module on Personal Protective Equipment (PPE), in three languages-English, Hindi and Tamil.

- Development of a Knowledge Hub with collection of white papers & videos to bring together a diverse range of resources to promote continuous learning among CPCL employees, covering various topics like Technology, Operations, Maintenance, HSE, Quality Control, Finance, Technical Services, Information Systems etc, with over 30,000 pages of white papers and about 120 hours of videos

- Launched new updated manuals on Basic Refinery Chemistry, Power & Utilities and Process Units for the benefit of employees.

• Some of the distinguished training programs conducted include:

- Cybersecurity awareness and AI (Artificial Intelligence) Work Tools program to promote awareness and productivity among employees.

- Competency Development Program for officers through Premier Institutes like IIMB, IIMT and XLRI, focussing on eight critical leadership competencies.

- Wellness programs like Yoga, Stress Management and Meditation .

- Health, Safety & Environment Training covering more than 600 employees

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

Your Company meticulously follows the Presidential Directives and guidelines issued by Government of India regarding the reservation in services for SC / ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-Servicemen / EWS (Economically Weaker Section) to promote inclusive growth.

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

• Out of the total manpower, there were 283 SC employees (previous year: 286) and 53 ST employees (previous year: 50) as on 31^st March, 2025, constituting 20.02 % and 3.75 % of the total manpower respectively.

• The provision of 4% reservation for persons with benchmark disabilities, in line with the Government of India''s guidelines / instructions were implemented by the Company. Necessary

concessions / relaxations in accordance with the rule in this regard were extended to physically challenged persons in the recruitment.

During the year, cordial industrial relations were maintained. Your 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.

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

The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, have been implemented across the Company with clear objective of providing protection to women against sexual harassment at the workplace and for the prevention and redressal of complaints of sexual harassment. Internal Committees have been set up, headed by senior-level women employee to deal with sexual harassment complaints, if any. 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. 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 gives special focus to the various facets of women development plans and programmes. As on 31^st March, 2025, 83 women employees are on the rolls of the Company, of whom 72 are in the supervisory cadre and 11 are in non-supervisory cadre, constituting 11.34 % of the total supervisory employees and 1.61 % of the total non-supervisory employees.

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

• International Women''s Day was celebrated on 8^th March 2025 with great enthusiasm and spirit. The event featured an inspiring address by eminent speakers and a selfdefense demonstration, all aligning the year''s empowering theme: "To Create Our Own Sunshine.”

• A variety of events were organized to showcase the talents of women and foster camaraderie among participants. These activities witnessed enthusiastic participation from numerous female employees, making the celebration both meaningful and memorable.

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

Your Company''s Corporate Social Responsibility (CSR) is an integral part of its corporate governance framework, aligning with CPCL''s Vision of creating value for stakeholders and its Mission to proactively fulfil social responsibilities, including environmental and safety commitments.

Guided by this principle, the Company has defined its CSR Vision as:

"Strive for an Educated, Healthy, Economically Developed, and Environmentally Protected community around the Refineries.”

The CSR Policy of the Company is available on its official website at: https://www.cpcl.co.in/company/overview/our-policies/

To realize this vision, the Company implements CSR projects designed to enhance the economic and social well-being of communities in its operational areas, promote the selfsustainability of CSR initiatives, and support environmental sustainability.

During the year, the Company spent ?4959.63 lakhs on various CSR initiatives, primarily focused on its refinery operations and project sites in Chennai and Nagapattinam, Tamil Nadu. These

initiatives largely centered on Health and Nutrition, Education and Skill Development, Community Development, Welfare of Persons with Benchmark Disabilities, and Environmental Sustainability. The aim was to uplift living standards and bridge socio-economic and environmental disparities.

CSR programmes are primarily implemented in areas surrounding the Company''s key installations to enhance the quality of life for local communities, with special attention to marginalized groups, including SCs, STs, OBCs, and persons with disabilities.

A detailed report on the CSR activities undertaken during the year, in accordance with the Companies Act, 2013, along with key CSR highlights, is provided in Annexure-III.

CPCL Super-30 Project inaugurated under CPCL CSR initiative:

Your Company has initiated CPCL Super-30 Project, under its Corporate Social Responsibility, which is dedicated to offering free residential coaching to students from underprivileged and economically weaker sections of society. The aim is to provide level playing field, enabling these students to compete on equal footing with other competitors for securing admission to prestigious institutions such as IITs, NITs etc.

In recognition of its various CSR initiatives, your Company received the following awards / accolades during the year:

• Received Visionary Partnership Award at the Indian Institute of Technology (IIT) Madras CSR Summit & Awards 2024 recognizing your company''s longstanding collaboration and commitment to social impact under CSR through contributions to the Energy Consortium, driving innovation in clean energy and carbon capture.

• For excellence in innovation, and sustainability, your Company was honoured with the esteemed Excellence in CSR - "Best Corporate Social Responsibility Practices” by Stars of the Industry Awards, which was presented on 21^st March 2025.

VIGILANCE

The Vigilance Department of your company has developed a structured mechanism of vigilance functions to ensure high integrity within the organization. It not only investigates complaints but also promotes transparency through technology and Preventive Vigilance activities. The department focuses on system improvement measures, leveraging technology and ensuring accountability. Additionally, it creates awareness to external stakeholders through awareness programs conducted during ''Vigilance Awareness Week''.

The Department is also making following efforts to establish transparent Systems and Procedures for the benefit of external stakeholders.

• Various Training programs were conducted for employees on topics such as Preventive Vigilance, Organizational Behavior and Ethics, Code of Conduct, System and Procedures of Organization, Cyber Security, etc., by internal and external faculties.

• Vigilance Officers also participated in Training program on Complaint Handling Mechanism, conducted by Central Vigilance Commission (CVC) in Chennai.

• Vigilance Awareness Week- 2024 was observed from 28^th October 2024 to 3^rd November 2024 on the theme given by Central Vigilance Commission - "Culture of Integrity for Nation''s Prosperity”

• Various events and competitions on the theme were held for Employees, Spouses of Employees, School and College students. A walkathon was also organised to promote awareness on Vigilance and Public Interest Disclosure and Protection of Informers (PIDPI) resolution. Programs like Interactive sessions with Contractors and Service providers and Customers were also organized. Public awareness through Media / Social Media for Vigilance Awareness was also done.

There are no pending disciplinary proceedings or prosecution cases as on 31^st March, 2025.

PUBLIC GRIEVANCES

Your Company is committed to redress the public grievances on time. Contact details of Public Grievance Officer is displayed on the website of the Company under the link

https://www.cpcl.co.in/connect/citizen-charter/

public-grievance/.

During the year 2024-25, 9 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).

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 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 on the website of the company

https://www.cpcl.co.in/investors/financials/exchange-

intimations/.

As a leadership initiative on the Governance, your company has voluntarily adopted for third party reasonable assurance on the Business Responsibility and Sustainability Reporting (BRSR) core principles and limited assurance on the Integrated Reporting framework from 2023-24 onwards.

AUDIT COMMITTEE

The composition of the Committee as on 31^st March, 2025 is as under:

• Mr. Ravi Kumar Rungta- Independent Director - Chairman

• Dr. C.K.Shivanna, Independent Director - Member

• Mr.Deepak Srivastava - Government Nominee Director -Member

Note: Mr.Manoj Kumar Pandey, Independent Director was inducted as a member effective 16.05.2025.

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 Company''s website. The code can be accessed at https://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 25.04.2025.

RISK MANAGEMENT

Your Company has a well-developed Risk Assessment & Management system and has also constituted a Risk Management Committee. The composition of Risk Management Committee as on 31.03.2025 is as under:

• Mr. H.Shankar, Managing Director (I/C) and Director (Technical) - Chairman

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

• Mr. P.Kannan, Director (Operations) - Member

• Mr. Ravi Kumar Rungta, Independent Director- Member

• Mr. M. Anna Durai, Nominee Director, IOCL - Member

Note: Mr. M. Anna Durai was inducted as a Member in place of Mr. Subhajit Sarkar with effect from 13.12.2024.

The Action Taken Report on the Risk Management Policy for FY 2024-25 containing the mitigation measures on various

High & Medium Risks along with the Risks on Radar were reviewed by the Risk Management Committee on 24.04.2025 and by Audit Committee and Board on 25.04.2025

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 and functions are reviewed by the Audit Committee.

The Statutory Auditors, in their report dated 25.04.2025, 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, 2025 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.G.N. Price & Co, Chartered Accountants, were appointed as Statutory Auditors of the Company for the financial year 2024-25 by the Comptroller and Auditor General of India. The Auditors have confirmed that they are not disqualified from being appointed as Auditors of the Company.

The Board of Directors of the Company fixed a remuneration of ? 26 Lakhs towards statutory audit fees in addition to out-of-pocket expenses, if any, and applicable GST.

The Auditors had expressed an unmodified opinion on Standalone and Consolidated Financial Statements for Financial Year 2024-25 vide their report dated 25^th April 2025.

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, 2025, were submitted to the C&AG for supplementary audit.

The C&AG have conducted supplementary audit and the certificate of the C&AG under section 143(6)(b) of the Companies Act, 2013 forms part of the annual report.

COST AUDITORS

M/s. M. Krishnaswamy and Associates, Cost Accountants, Chennai were appointed as the Cost Auditor of the Company for the Financial Year 2025-26 at the remuneration of ? 2.75 Lakhs 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.

M/s. Madhavan Mohan & Associates, Cost Accountants, Chennai were appointed as Cost Auditors for FY 2023-24 and FY 2024-25. The cost audit for the year 2023-24 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 for the year 2024-25 is being carried out and the cost audit report would also be filed within the stipulated time

SECRETARIAL AUDIT

Your Company has appointed M/s. S. Sandeep & Associates as the Secretarial Auditors, for the year 2024-25

The Secretarial Audit Report for the year 2024-25 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:

• The Board of Directors of the Company is not comprised of requisite number of Independent Directors as prescribed under Reg 17 of the Securities Exchange Board of India, (Listing Obligations and Disclosure Requirements), 2015 and DPE Guidelines.

• The Company has not appointed a woman director as an Independent Director, as prescribed under Reg 17 of the Securities Exchange Board of India, (Listing Obligations and Disclosure Requirements), 2015. However, the Company has appointed a woman director w.e.f 16.11.2021 in the capacity as Nominee Director, IOCL till 30.04.2024.

• The Audit Committee did not have Minimum 3 members (from 28.08.2024 till 21.10.2024) & 2/3^rd of the Committee members are not Independent directors w.e.f 17.11.2024 till

27.03.2025. However, the Audit Committee was reconstituted with 2/3^rd Independent Directors as its members effective

28.03.2025.

• The Nomination and Remuneration Committee (NRC) did not have 2/3^rd of Independent Directors as its members prescribed under Reg 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However, the NRC was re-constituted with 2/3^rd Independent Directors as its members effective 16.05.2025.

• The Stakeholder Relationship Committee did not have non-executive director as Chairperson of the Committee, including one Independent Director on the committee, from 17.11.2024 till 27.03.2025. However, the Stakeholder Relationship Committee was reconstituted with induction of One Independent Director as member who was designated as Chairperson of the Committee, effective 28.03.2025.

• The Risk Management Committee did not have at least one Independent Director as member of the Committee from

17.11.2024 till 27.03.2025. However, the Risk Management Committee was reconstituted with induction of an Independent Director as its member effective 28.03.2025.

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 Independent Directors including one Women Independent Director, vests with the Government of India. Regular follow-up is being made with Government of India and the appointment of additional Independent Directors including one woman Independent Director is under the consideration of Government of India.

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

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.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

One separate meeting of Independent Directors (8^th) was held on 15.11.2024, as per the provisions of the Companies Act 2013 and SEBI(LODR).

Reporting of Frauds by Auditors

The Auditors in their Companies Auditor Report Order, forming part of Auditor''s report have indicated the following:

"No fraud by the Company has been noticed or reported during the year. During our audit, we were informed by the Management that the Vigilance Department, based

on a complaint received from an outsider, has identified and reported a fraud on the Company amounting to ?1.82 crores pertaining to the year 2019-20, by one of its vendors, by submitting fabricated bank statements to the Company. We were informed that the Management is in the process of investigating this fraud in all respects, including identification of the extent of the financial loss, if any, and whether any officer or employee of the Company is involved in this matter.”

In this connection, the Management is investigating this matter in all respects and the subject work orders were completed by the vendor and prima facie there is no financial loss to the company in this regard. Based on the outcome of the investigation, the matter will be taken to its logical conclusion

PUBLIC PROCUREMENT POLICY FOR MSMEs

In line with the Public Procurement Policy of the Government of India, as amended, your Company is required to procure minimum 25% of the total procurement of Goods and Services from MSEs, out of which 4% is earmarked for procurements from MSEs owned by Reserved SC/ST entrepreneurs and 3% from MSEs owned by Women entrepreneurs.

The procurement from MSEs (excluding Crude Oil, Petroleum products, Gas, Power, Licensing fees, Proprietary items, Imports and single line items of value greater than ?50 Crores) during the financial years was as under:

	FY: 2024-25		FY: 2023-24
PARAMETERS	Target	Actual achieved	Target	Actual achieved
Total procurement from MSEs (General, Reserved SC/ST & Women)	25% (Main Target)	56.46%	25% (Main Target)	52.05%
Procurements from 4% (SubReserved SC/ST target) MSEs		6.74%	4% (Subtarget)	6.76%
Procurements from 3% (SubWomen owned target) MSEs		3.49%	3% (Subtarget)	3.30%

All the procurement targets earmarked under the Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 2012 Government of India have been achieved by your company as furnished in the above table.

Several initiatives were undertaken to identify the entrepreneurs for procurements of goods and services including from MSEs owned by Reserved SC/ST and Women entrepreneurs by the way of conducting / participating the Vendor Development Programs / Meets and Special Vendor Development Programs for the Reserved SC/ST MSEs and Women owned MSEs. The procedures followed including Purchase Preferences and benefits available to the MSEs are explained during these programs/meets for their motivation and tender participation.

4 exclusive programs conducted for Reserved SC/ST MSEs and 2 exclusive programs conducted for Women owned MSEs during the FY 2024-25 out of the total 13 programs. Similarly

5 exclusive programs conducted for Reserved SC/ST MSEs and 1 exclusive program conducted for Women owned MSEs during the FY 2023-24 out of the total 11 programs

Your company has created a new QR code for CPCL Vendor enrolment process and this QR code is published during these meets to facilitate the MSMEs easily enroll with CPCL and MSMEs are using this QR code for enrolling their entities with CPCL.

Procurements through the GeM platform

During the year, the percentage of total procurement through the GeM portal worked out to 67.92% over the total procurements including procurements outside the GeM Portal due to the reasons such as Emergency, Imports, Special Tenders, etc.,

Vendor Development Programs details:

"CPSE vendor development program cum exhibition” was conducted by MSME Development & Facilitation Office, Chennai.

Also, Your Company has participated in "SOUMEX 2024 - International Exhibition - Sourcing and Manufacturing Exhibition - Organized by TANSTIA - Tamilnadu Small & Tiny Industries Association Chennai”

Scrap Sold:

During the year 2024-25, Scrap weighing 5,523.12 Metric Tons were sold through e-Auction fetching a Net Sale value ?26.59 Crores to your Company.

TReDS, OR TRADE RECEIVABLES E-DISCOUNTING SYSTEM

During the financial year 2024-25, your company registered in four additional TReDS online platforms to facilitate quicker payments to MSMEs. With this onboarding, your company has registered in all five RBI approved TReDS platforms, enabling seamless and efficient trade receivables discounting. This onboarding enhances liquidity for MSME vendors, ensures faster payments and supports better working capital management through multiple financing options.

During the year, 66 MSME vendor invoices amounting to ?11.27 Crore were processed through TReDS Portals, within the specified time as per MSMED Act.”

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

The Revenue from Operations of IAL is ?1308 crore during the year 2024-25, as against ?1215 crore in the previous year. The Profit after Tax for the year 2024-25 was at ?117.66 crore as against ?73.08 crore in the previous year. Dividend of ?247.01 per equity share (Face value ?10 per share) was recommended by the Board of IAL for the financial year 2024-25.

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 ?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:

Cauvery Basin Refinery & Petrochemicals Limited (CBRPL), a Joint Venture Company between IOCL, CPCL & other seed equity investors was incorporated on 06-Jan-23, for implementing a new grassroot refinery of 9 MMTPA capacity with petrochemical facilities at Nagapattinam, Tamil Nadu. This new refinery will produce Petrol and Diesel of Bharat Stage-VI specifications and Polypropylene as a value-added product. Subsequently, subscription amount toward initial share capital of ?5,00,000/- received from the Promoters (IOCL and CPCL) and other seed equity investors. Land acquisition process was completed by the Government of Tamil Nadu and handed over to CPCL on 31-Oct-23, which marks a crucial step towards actualizing the project. Fencing has been completed along the land boundary, and the construction of the compound wall is in progress.

CPCL and IOCL Board accorded approval for the revision in project cost and capital structure of the Joint Venture with 75% equity from IOCL & 25% equity from CPCL.

Department of Investment and Public Asset Management (DIPAM) approval for the Revised Capital structure was received on 25-Sept-24. DPE(Dept. of Public Enterprise), vide its OM dated 17-Sept-24, has waived the requirement of NITI Aayog''s approval for establishing JVs and subsidiaries by Maharatna, Navratna & Mini-ratna CPSEs.

Petroleum and Explosives Safety Organisation (PESO) approval for construction has been obtained on 04-Apr-24. Site enabling activities such as Construction Power and Construction Water works completed. Boundary Wall construction work is underway, laying the groundwork for the refinery''s physical establishment. The project is scheduled to be completed in 39 Months from accordance of Statutory approval.

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.

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 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 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 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:

• Mr. Arvind Kumar, Managing Director, ceased to be a director effective 16.07.2024 upon his appointment as Director (Refinery), IOCL. Mr.H.Shankar , Director(Technical) was holding additional charge of the post of MD since

16.07.2024 till 01.04.2025

• Mr. S.M.Vaidya, Non -Executive Chairman ceased to be a Director on the Board effective 31.08.2024 as he superannuated from the services of IOCL on 31.08.2024.

• Mr. Deepak Srivastava, Director, MoPNG, ceased to be a director effective 28.08.2024 and re-appointed as Government Nominee Director effective 02.11.2024.

• Mr. V. Satish Kumar, Director (Marketing) & Chairman (i/c), IOCL has been appointed Nominee Director, IOCL on the Board of CPCL effective 01.09.2024 in place of Mr. S.M.Vaidya. He ceased to be a director effective

25.11.2024

• Mr. Subhajit Sarkar, Nominee Director, IOCL ceased to be a director effective 28.11.2024.

• Mr. Arvinder Singh Sahney, Chairman, IOCL has been appointed as Non -Executive Chairman on the Board of CPCL effective 28.11.2024.

• Mr. M. Annadurai, Executive Director & State Head Tamilnadu, IOCL, has been appointed as Nominee Director, IOCL on the Board of CPCL in place of Mr. Subhajit Sarkar, effective 13.12.2024.

• Mr. H. Shankar, Director (Technical) & Managing Director (i/c), CPCL has been appointed as Managing Director effective 02.04.2025. Further, with effect from 7^th April 2025, Mr. H.Shankar was holding the additional charge of post of Director (Technical).

• Mr. Ravi Kumar Rungta, Independent Director, ceased to be a director effective 16.11.2024 and re-appointed as Independent Director effective 28.03.2025.

• Dr. C.K.Shivanna, Independent Director, has ceased to be a director effective 16.11.2024 and re-appointed as Independent Director effective 28.03.2025.

• Mr.Manoj Kumar Pandey was appointed as Independent Director effective 16.05.2025.

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

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 were advised to register with the Database maintained by the Indian 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.

A separate 8^th meeting of Independent Directors was held during the year on 15.11.2024 as per the provisions of the Companies Act, 2013 and SEBI LODR.

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 Company''s operations in future.

PERFORMANCE EVALUATION OF BOARD

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 Company''s website and can be accessed from the link: https://www.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).

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, 2025, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) 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) 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) Directors have prepared the annual accounts for the financial year ended 31^st March, 2025, on a going concern basis;

v) 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) 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 166 requests were received and were disposed off.

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 in the Company.

The Official Language Implementation Committee meeting of your Company was conducted every quarter under the Chairmanship of the Managing Director to review progressive use of Hindi in the Company

During the year, Hindi classes were conducted at Refinery for the benefit of employees and Hindi Workshops on the Official Language Policy of the Government of India and its implementation and Spoken Hindi are conducted for employees.

Your Company received a consolation prize for excellent implementation of Official Language Policy of Government of India and a consolation prize for excellent Official Language House Magazine for the year 2023-24 from the Chai rman, Town Official Language Implementation Committee (TOLIC) (PSU) Chennai at a function organized in Chennai on 04.09.2024.

Your Company sponsored one day Hindi workshop on IT Tools for the benefit of employees of member Offices under the aegis of TOLIC PSU (Chennai) on 18.06.2024.

Hindi Fortnight was celebrated from 16.09.2024 to 30.09.2024 in compliance with the Official Language Policy of the Government of India. On this occasion, Hindi Calligraphy, Hindi Drama, Hindi Quiz, Hindi Debate, Hindi Reading, Hindi Antyakshari, Hindi Singing and Hindi Essay competitions were organized for the benefit of employees, their spouse and children.

Material Changes affecting the Company

There have been no material changes and commitments affecting the financial position of the Company between the end of the Financial year and date of this report. There has been no change in the nature of the business of the Company.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year

No applications were made during the year and no proceedings were pending against the Company under the Insolvency and Bankruptcy Code 2016 (31 of 2016).

Details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the banks or financial institutions along with the reasons thereof.

There were no instances of one-time settlements during the year 2024-25.

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 2024-25.

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 & 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. Arvind Kumar, Mr. S M Vaidya, Mr. Subhajit Sarkar and Mr. V Satish Kumar during their tenure on the Board.

---

Mar 31, 2024

On behalf of the Board of Directors of your Company, I am glad to present the 58^th Annual Report and the 2^nd 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 Accounts for the year ended March 31, 2024.

PERFORMANCE REVIEW

Financials (Standalone and Consolidated)

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

(Rs. in crore)
Particulars	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Gross Turnover	79207	90801	79207	90801
Profit Before Finance Cost, Depreciation and Tax	4489	5712	4486	5703
Finance Cost	223	330	223	330
Depreciation, Amortisation and Impairment	606	573	606	573
Profit Before Tax ( before Share of Profit of Joint Ventures)	3660	4809	3657	4800
Share of Profit of Joint Ventures	-	-	37	6
Profit Before tax	3660	4809	3694	4806
Tax Provision	949	1275	949	1275
Profit After tax	2711	3534	2745	3531

Analysis of Profitability

The Company continued its excellent financial performance in the current year due to stellar operating performance with highest ever Crude throughput of 11.642 MMT and focused improvement on reliability coupled with feed optimization which enabled secondary units to surpass the previous best.

It is worth noting that your Company has exceeded its physical achievements in all key performance indicators such as throughput, Distillate yield and Energy efficiency parameters during the fiscal year 2023-24 compared to the previous year, showcasing a steadfast commitment to excellence. Your Company has consequently outperformed on physical parameters even on the larger base, translating into better financial performance.

The above physical performance was further supported by better margins in the international market during the FY 2023-24.

For the fiscal year 2023-24, the Gross Refining Margin (GRM) was recorded at US$ 8.64 per barrel (Singapore GRM: $6.61 per barrel), compared to US$ 11.91 per barrel (Singapore GRM: $8.96 per barrel) in the previous financial year. Our current GRMs have consistently outperformed Singapore GRMs over the last two years, largely due to optimized refinery production, enhanced product distribution, crude procurement strategies and efficient secondary units processing capabilities.

Highlights

• The Company recorded a turnover of Rs. 79,207 Crore, Profit Before Tax of Rs.3660 Crore and Profit after tax of Rs. 2711 Crore in FY 2023-24.

• Recommended the highest ever dividend of ^55.00 per equity share (i.e 550% on the face value of ^10/- per equity share) for FY 2023-24.

• ‘Nil'' comments received from C&AG for the Financial Year 2023-24 - 20^th year in succession.

• Leverage position has considerably reduced to 0.32 times at the end of Financial Year 2023-24 as compared to 0.67 times at the end of previous financial year.

• Borrowings as on 31.03.2024 is significantly lower at Rs 2762 Crore as compared to Rs. 4235 Crore in the previous year.

• Closing Networth registered a growth of around 37% at Rs 8593 Crore as compared to Rs. 6281 Crore in FY 2022-23.

• Market Capitalization witnessed a phenomenal jump of 280% to Rs.13503 Crore as on 31.03.2024 as compared to Rs.3537 Cr in the previous year, which resulted in your Company being ranked 370^th among Listed entities based on full market capitalization in India and also became constituent of Nifty Small Cap 250 Index.

• Share price soared to an all-time high of over Rs. 1122 post the robust financial results in April 2024, around four-fold increase since April 2023 signaling market confidence.

Issue of securities / change in share capital

During the year 2023-24, 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 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://cpcl. co.in/company/overview/our-policies/

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 2023-24. Considering the second all-time high profits earned by the company during FY 2023-24, and the need to reward the interest of the minority shareholders, the Board has recommended a dividend of 550% on paid-up Equity Share Capital of the Company representing Rs.55/- per share as on 31.03.2024 amounting to Rs.819 Crore.

Book Value and Reserves and Surplus

There has been a significant addition to the reserves of the Company due to improved profitability. The reserves and surplus as on 31^st March, 2024 jumped to Rs.8444.05 crore as compared to Rs.6132.05 crore as on 31^st March, 2023.

The book value per share of your Company as on 31.03.2024 increased significantly to Rs.577.05 as compared to Rs.421.79 as on 31^st March, 2023.

Value Addition

The value addition during the year 2023-24 is Rs.5040 Crore as compared to Rs.6797 Crore in the previous year.

Digital India Initiatives

Your company has achieved 100% digital transactions during the financial year 2023-24.

Contribution to Exchequer

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

(Rs Crore)
Particulars	2023-24	2022-23
Central Exchequer	14690	16453
State Exchequer	1049	1275
Total	15739	17728

Capex

Your Company has incurred Capital Expenditure of Rs.611.15 crore for the year 2023-24 as compared to Rs.654.06 crore in the previous year 2022-23.

Public Deposit Scheme

Your Company has not accepted any public deposit during the year 2023-24 and no public deposit was outstanding as on 31^st March, 2024.

Credit Rating

The company''s financial management expertise 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 and ICRA	AAA
borrowings / PCFC
(including BG)
Commercial Papers	CRISIL and ICRA	A1
Debentures	CRISIL and ICRA	AAA

OPERATIONAL PERFORMANCE:
PHYSICAL:
CRUDE OIL throughput (in Thousand Metric Tonnes (TMT))	2023-24	2022-23
Imported	10080	9372
Indigenous	1562	1943
Total Throughput	11642	11316
PRODUCTION (in TMT)
Light Ends	2886	2587
Middle Distillates	6315	6217
Lube Base Stock	248	236
Wax	25	28
Heavy Ends	1508	1487
Intermediates differential	36	(19)
Other Inputs	(441)	(270)
Fuel & Loss	1065	1049
Total Output	11642	11316
Distillate Yield	76.2	76.0
Fuel and Loss (%)	8.81	9.06

Operational Performance

Your Company achieved a throughput of 11.642 MMT in 2023-24 as against MoU target of 11.64 MMT and surpassed Name plate capacity of 10.5 MMTPA for the second time and achieved the highest ever crude processing as against the previous best of 11.316 MMTPA in 2022-23. The distillates yield achieved for 2023-24 was 76.2% against the previous year of 76.0%

The Energy Intensity Index (EII) recorded was the lowest ever at 87.5 against the previous best of 89.2 in the year 2022-23. The specific energy consumption recorded was the lowest ever at 72.2 against the previous lowest of 75.2 in the year 2022-23. The operational availability during the year was 98% against the target of 97%. Fuel & Loss was recorded lowest ever at 8.81% as compared to 9.06% in the previous year.

On the secondary unit performance, your Company achieved the highest ever Once Through Hydro Cracker Unit (OHCU) throughput of 2,385 TMT against the previous best of 2,372 TMT in 2022-23 and Delayed Coker unit (DCU) achieved the highest ever throughput of 2,072 TMT surpassing the previous best of 1,975 TMT in 2022-23.

Your Company recorded the highest ever production and despatch in respect of the following:

Transfer of Unclaimed Dividend to IEPF

A sum of Rs.49,41,280/- representing unclaimed dividend for the year 2015-16 along with the underlying 1,49,957 shares were transferred to the Investor Education & Protection Fund (IEPF) as per Section-124 of the Companies Act, 2013 during the year 2023-24.

	Production in TMT
Product	Production Quantity in 2023-24	Previous best Quantity	Previous best year
LPG	404	383	2005-06
Naphtha	1195	976	2022-23
Motor Spirit (MS)	1191	1142	2022-23

	Production in TMT
Product	Production Quantity in 2023-24	Previous best Quantity	Previous best year
Mineral Turpentine Oil (MTO)	40.2	31.4	2022-23
Aviation Turbine Fuel (ATF)	1050	1039	2022-23
High Speed Diesel (HSD)	5135	5041	2022-23
Bitumen	668	564	2015-16
Pet coke	550	539	2022-23
	Despatch in TMT
Product	Despatch Quantity in 2023-24	Previous best Quantity	Previous best year
LPG	405	386	2005-06
Naphtha	1173	1015	2022-23
Hexane	28.1	27.8	2022-23
Motor Spirit (MS)	1181	1150	2022-23
Mineral Turpentine Oil (MTO)	40.2	31.4	2022-23
Aviation Turbine Fuel (ATF)	1054	1023	2022-23
High Speed Diesel (HSD)	5076	5065	2022-23
Bitumen	667	561	2015-16

Some of the other highlights of Operational performance

during the year are as under:

• Successfully processed three numbers of new crudes viz., Olombendo from Angola, Siberian Light and Varandey from Russia.

• Highest ever monthly crude throughput of 1072 TMT in Mar''24 surpassing the previous best of 1062 in Mar''22.

• Product pipeline CTMPL achieved the highest ever single MS batch size of 45 TKL in Aug ‘23. A record number of 1000TMT/ Month crude processing of 8 times in the year. Highest being 1072 TMT in March 2024

• Highest ever quarterly crude processing of 3088 TMT in Q-4 2023-24 surpassing previous best of 3049 TMT in Q-2.

• Opportunity crude processing maximized during the year (Russian crude processing was at 31.3 % (3647 TMT) as compared to 12.4 % (1405 TMT) in 2022-23).

• Highest ever RLNG consumption of 441 TMT during the year 2023-24 as against previous best of 283 TMT in 2021-22.

• Highest ever Lube Oil Base Stock (LOBS) production and dispatch of 248 TMT and 243 TMT respectively, in the last ten years.

• Reduced water consumption from 7.1 MGD to 6.6 MGD during FY 2023-24 by implementing various water conservation measures and improving recycle and reuse of water

• Sharing of VLCC with IOC''s cargo to optimize the logistics cost in crude.

• New value added product, viz., Lean Butene, a petrochemical feed supplied to M/s.Cetex Petrochemicals Ltd.

• Commenced Pet coke evacuation through Rail wagon.

• Specialty fuel JP-5 (3.0 TKL) successfully despatched through Chennai-Bangalore pipeline for the first time.

• In the Solomon benchmarking study, your company secured Q1 in 5 indices in 2022 (when compared to 1 in 2020), Q2 in 9 indices (9 indices in 2020 also), Q3 in 3 indices (when compared to 10 in 2020) and Q4 in 6 indices (when compared to 3 in 2020) out of a total of 23 indices.

• Process Unit utilization showed a giant leap from Q3 to Q1 quartile, compared to previous study period, due to increased crude throughput and good performance of secondary units.

• Maintenance index, which is a measure of the total annualised maintenance expense per equivalent distillation capacity of the refinery, has also improved from Q2 to Q1, which was appreciated by Solomon.

• Under Lube refinery category, your company was credited as being on par with the most profitable plants, due to its ability to produce the highest priced products (lube / wax) in the market.

Awards

Your company was conferred with the “Best Refinery Performance Improvement" award under the category “Capacity > 9MMTPA" for 2022-23 among all refineries in India at Energy Technology Meet, organized by MoPNG and Centre for High Technology at Pragati Maidan, New Delhi.

Your Company added another feather in its cap, and was honoured with “Best Stall Award" at 26^th Energy Technology Meet (ETM), New Delhi for the outstanding stall design, which exemplarily portrayed technological advancements made by your Company since inception, including the recently developed niche fuels for supply to DRDO & ISRO, in the spirit of Atmanirbhar Bharat.

Your company was bestowed with the PLATINUM AWARD “Refinery of the year 2022" in Oil Refining Sector for its outstanding achievement during the year 2022-23, which was presented during the 15^th EXCEED OHS & SECURITY AWARD CONFERENCE held on 15^th December 2023 at Thiruvananthapuram, Kerala by Sustainable Development Foundation (A unit of Ek Kaam Desh Ke Naam), a nongovernment, non-funded, organization working for social upliftment of the society.

MoU PERFORMANCE

Your Company has received “Excellent" rating for its performance during FY2022-23 with respect to the MoU signed with its holding Company, Indian Oil Corporation Limited (IOCL). Further, your Company signed MoU with IOCL for FY 2023-24, 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 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 2023-24 as compared to the previous year 2022-2023 are given below:

In FY 2023-24, your company achieved substantial growth in the sale of products like Propylene, PBFS, Lean PBFS, Butene-2, MEKFS, through proactive marketing initiatives and achieved the highest ever sale of FG Hexane and MTO during 2023-24. Your company was able to achieve 874 TMT sale through direct marketing products. Out of the total product sales (10893.26 TMT) during FY 2023-24, Direct Marketing Products contributed around 874 TMT, representing 8.02%.

PRODUCT	SALE QTY (IN MT)
	2023-24	2022-23
A: Downstream Products
Linear Alkyl Benzene Feed Stock (LABFS)	56287	68065
Butene Methyl Ethyl Ketone Feed Stock (MEKFS) Lean Butene-2	20948	19325
Propylene	35115	34706
Poly Butene Feed Stock (PBFS) Lean PBFS	12552	10311
B: Other Products
Paraffin Wax	25327	28909
Hexane	28083	22762
Sulphur	121291	125168
Pet-Coke	529112	562308
Mineral Turpentine Oil (MTO)	40263	31390
Furnace Oil	197	4007
Isrosene	34	0
ISRO Naphtha	258	0
TOTAL	869467	906951

• Supply of value added Petrochemical product (Lean Butene) to Manali downstream Industries which not only has a potential to increase GRM but also reflected company''s commitment of being a mother Industry to downstream petrochemical units in the Manali Industrial cluster.

• Another Atmanirbhar Bharat initiative includes maiden manufacturing and supply of indigenously produced 34.25 MT of ISROSENE fuel , from the existing refinery stream with no involvement of additional CAPEX, to ISRO

Propulsion Research Complex (IPRC), Mahendragiri on 27^th Mar 2024.

During 2023-24, your Company organized Customer Meet, as part of a series of “Customer out reach Initiatives" to maximize sales of direct marketing speciality products FG Hexane in market-fed zone, and to increase customer base for these products. First such Interaction program was organized on 13.12.2023 at Vijayawada targeting Solvent Extraction unit customers.

RESEARCH & DEVELOPMENT (R&D)

Your Company''s R&D plays a vital role in providing support

to refinery operations.

During the year various studies were carried out as under:

• Quality improvement of Group-1 Lube Oil Base Stock (LOBS) by blending a suitable refinery stream in Inter Neutral (IN) Distillate through lab-scale aromatic extraction and dewaxing studies.

• Enhancing the production of 500N Lube Oil Base Stock (LOBS) by blending less valuable refinery streams in Heavy Neutral (HN) Distillate through lab-scale aromatic extraction and dewaxing studies.

• Feasibility study on production of value-added products from diesel streams as a part of diesel reduction methodology

• Identification of appropriate crude sources for wax production through lab scale deoiling studies

• Two collaborative research projects were taken up with Rajiv Gandhi Institute of Petroleum Technology (RGIPT) on sustainable development. Corrosion inhibitor for Ethanol blended MS and Nano Cellulose/Micro Cellulose and Biofuel from green coconut shells/Rice Paddy Stock.

PROJECTS

Your Company has invested a total of Rs. 611.15 Cr. in

CAPEX, surpassing the budgeted estimate for FY 2023-24

by 111.5%, which demonstrates its commitment to strategic investment and growth initiatives.

COMPLETED PROJECTS New Sulphur Block

During the year, as a commitment towards sustainability, your company has commissioned the new Sulphur Recovery Block consisting of SWS (Sour Water Stripper), ARU (Amine Regeneration Unit) & SRU (Sulphur Recovery Unit) in April 2023.

Demountable Flare

Your company has commissioned all the Hydrocarbon flares of units FCC-GDS, FCCU, Ref-II, Ref-III, DHDT, DCU & Ref-I progressively by 15.02.2024, enabling better flare monitoring and ease of maintenance leading to improved energy optimization.

Coke Handling System

Your company installed and commissioned Automated Wagon loading system for Pet Coke loading by dispatching the first consignment of 3250 MT of pet coke on 13.07.2023. Pet coke dispatch through Rail has reduced dispatch through truck by 75%, enabled faster evacuation thereby avoiding traffic congestion inside Refinery. Pet Coke is being transported to cement factories located at a distance range of 350 to 750 Kms.

VOC Collection and Removal system in ETP-111 Unit

Your company has commissioned Volatile Organic Compound collection and Removal System at ETP - III to remove Volatile Organic Compounds (VOC) and eliminate odour from oil handling facility of ETP-III. With this commissioning, your Company is fully compliant with the environment standards viz., Minimal National Standards (MINAS) as notified for Oil Refinery.

6 KW Rooftop Windmill in Corporate Office

As a part of sustainable development and a step towards net zero, your Company has set up a 6 kW Rooftop wind mill plant in Corporate Office premises. The power generated by two wind turbines will cater to the energy needs during the night time and will be complemented by our solar PV panels during the daytime. This is one of the initiative which symbolizes company''s commitment towards sustainability.

1.04 MW capacity of Ground Mounted and Roof top solar system on plant area buildings

• A Medical Check-up and Fitness Camp was organised for 1093 Contract Workers in May 2023

On the Occasion of the May Day (Labour Day) celebrations, Shri Arvind Kumar,Managing Director inaugurated the Medical Check-up and Fitness Camp and Distributed the Hygiene Kit.

• Conducted a Comprehensive Mega Free Eye Care Camp for the public, from 26^th June 2023 to 4^th July 2023 at Cauvery Basin Refinery in 6 locations in Nagapattinam District. 2500 persons were Screened for the eye ailments, 1100 Spectacles were issued to persons for vision correction and Cataract Surgeries for 122 persons were performed at the camp site itself.

Your company has installed Ground Mounted Roof Top solar panels of capacity 1.04 MW at Manali Refinery, at an estimated cost of Rs 5.80 Cr (incl GST) and it was commissioned in April 2024.

PROJECTS UNDER IMPLEMENTATION:

Pharma grade hexane Production at Manali Refinery:

Your company is planning for production of Pharma Grade Hexane in the Isomerization Unit, at an estimated project cost of Rs 67.15 Cr., which will replace the existing conventional column internals with Divided Wall Column (DWC) Technology for production of 35000 MTPA of Pharma Grade Hexane. The anticipated completion is by Q2 of FY 2024-25.

Laying of 28” Desal line & 10” RO Reject line

Your company is laying 22 km long new 28" Desal Water Pipeline and new 10" RO Reject water Pipeline between Manali Refinery and its Desalination plant at Ennore, at an estimated cost of Rs 205 Cr ± 10% (incl of GST) and the anticipated completion will be end September 2025.

FUTURE PROJECTS

Group M/MI 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) were completed. Environmental clearance was obtained in Jan 2024. Final investment approval is in process.

FCCU Revamp - Scoping Study

Your company has taken up FCCU revamp scoping study for capacity augmentation of FCCU and maximizing Propylene. The job was awarded to M/s.UOP in December 2023. Study is in progress and final report is expected to be submitted in July 2024.

Feasibility Study for New De-Oiling Unit

Your Company has taken up Feasibility Study for installation of New De-Oiling Unit to produce Micro Crystalline Wax. The job was awarded to EIL in March 2024. Study is in progress and final report is expected to be submitted in September 2024.

HEALTH, SAFETY AND ENVIRONMENT

Health

Your Company always strives to provide the best health care facilities not only to employees but also to contract workers and towards achieving this end has put in place Occupational Health Services (OHC) Centre with adequate facilities manned by qualified professionals equipped to handle any eventuality.

Various health promotion programs conducted during the year:

• Voluntary Blood Donation camp organised at Occupational Health Services on World Blood Donor Day, wherein CPCL Employees, CISF, Contract workers and Trainees donated blood.

• Cardiac Screening Camp for Employee''s spouse conducted which benefitted 275 members during World Heart Day.

• Voluntary Blood Donation Camp organized at Occupational Health Services (OHS) on CPCL Day 2023. Voluntary Blood Donation Camp organized at CPCL Polytechnic College in February 2024, wherein CPCL Employees, CISF, Contract workers, Trainee''s and CPCL Polytechnic college staff and students numbering 250, performed the noble act of donating blood.

• “Personal Counselling Services" provided for benefit of employees, CISF personnel, and dependent children and parents to address issues at work and home such as anxiety, stress, mood swings, irritability, and relationship problems.

Your Company has rendered commendable services for the benefit of the Communities in North Chennai and Ennore Region, which were battered by the Michaung Cyclone. Significant among them include the following:

• OHS responded to the medical emergencies and provided medical support.

• Three Mobile Medical Units with Medical Emergency Response Team visited all houses in the flood affected Ennore area and catered their medical needs, benefitting 5517 beneficiaries.

• Essential Medicine delivered on the request of Government Urban Primary Health Centre, Zonal Medical officers of Tiruvottiyur and Manali.

Safety

Your Company remains committed to the highest standards of safety and evinced utmost care and concern for the safety of its employees and refinery installations while carrying out its operations. Your Company is a responsible organization and its commitment towards Safety, Health and Environment protection are incorporated in its HSE Policy as under:

• Enhancing safety performance by promoting safety consciousness and maintaining excellent standards for safety of people and processes.

• Promoting environmental protection by preventing pollution and optimising the use of natural resources in a socially responsible manner.

• Continually improving our processes, products and services in a safe and environment friendly mode with due compliance to legal and statutory requirements.

• Improving skill and competence on SAFETY, HEALTH, ENVIRONMENT and QUALITY through sustained training and education.

Your company has always strived hard for Zero Incidents target and safety statistics of Manali Refinery as on 31.03.2024 are as under:

Lost Time Accident Free days	1647 (Last accident on 28.09.2019 at DHDT)
Fire Free days	1519
	(Last reportable fire on
	04.02.2020 at Crude-I)
Safe Million Man Hours	54.90

Significant safety initiatives undertaken during the year include the following:

• Onsite Emergency Mock Drills including Night Hour Mock drill conducted as per Emergency Response Disaster Management Plan and PNGRB Guidelines.

• High potential consequence events (HIPO) NMIs are identified by a standing committee headed by DGM i/c (F&S). 25 nos. HiPo NMIs identified against the target of 24 and steps were taken to avoid recurrence.

• No untoward road safety incidents in the refinery during 2023-24 due to installation of speed cameras and constant monitoring.

• As a responsible organization, extended safety expertise to other industries. 148 employees of IOCL and 25 junior officers of Directorate of Industrial Safety and Health (DISH) benefitted from Live Fire Drill Trainings.

Safety Audits conducted during the year were as under:

• Monthly Mock drills being conducted with different scenarios of Risk Analysis Report to check the preparedness of systems and healthiness of the equipments.

• Evacuation Mock Drill conducted at Corporate Office on 09.03.2024.

• Online Work Permit System upgradation was done. Live Radiography Permit Location Mapping has been developed by In-house team. This will help to see ongoing Radiography jobs in field.

• As a part of Behaviour Based Safety (BBS) Implementation, BBS Awareness programs were conducted.

• Fire Training Ground Facilities upgraded with new modules to comply with OISD Standards.

• Exclusive ‘Zero Leak Team'' formed for identification and attending to Steam and condensate leaks.

• Round the clock safety surveillance ensured for Ref III Plant 214 and Wax Plant Shutdown for catalyst replacement.

• Near Miss System modified to improve its effectiveness in tracking liquidations. Total NMIs reported as on 31.03.2024 are 9797 nos. against a target of 6000 for the Financial year. More than 90% of these Near Miss Incident (NMI)/ Unsafe Acts/ conditions were attended within 90 days and alternative measures put into place for remaining jobs.

• 12^th Surprise Safety Audit (SSA) by OISD in Aug 2023

• Internal Safety Audit (ISA) by Internal Multi-Disciplinary teams in June 2023

• Safety audit as per IS 14489 and MSIHC guidelines in Mar''24

• PNGRB T4S Audit for cross country pipe lines carried out in Nov-23

• 151 nos of process Mock drill conducted across the Refinery

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

In recognition of its commitment towards Safe work practices, your company has been awarded the prestigious National Safety Council (NSC) Tamil Nadu Chapter “Award of Honour" in OHSE Awards 2023.

Environment

Your Company is committed to carry out its refinery operations without affecting the Ecological balance and is always focused at complying with all the statutory Laws and Regulations.

• RLNG consumption increased from 269.6 TMT in 2022-23 to 440.6 TMT in 2023-24, thereby achieving about 3% CO2 reduction of 223.9 TMT achieved.

Several Environmental initiatives undertaken during the year are as under:

• World Environment Day (WED) was celebrated on 5^th June, 2023 at Amullavoyal Green Belt location with the theme “Solutions to Plastic Pollution" to spread awareness amongst employees and others about the need to protect environment and focus on solutions to plastic pollution under the campaign Beat Plastic Pollution.

A Pamphlet on Environment was released depicting all the Environment related activities carried out by CPCL on the occasion. 500 no. of saplings were planted during WED-2023. Towards creating awareness among public to avoid single use plastic, distribution of cotton bags to Tamil Nadu Government was carried out.

• Inaugurated two units of 3 kW (6kW combined) rooftop wind turbines, at corporate office, CPCL

• Green House Gases (GHG) emission decreased in 2023-24

• Commissioned 1040 KWh of solar panels in the flare area and control rooms (Rooftop) as part of Renewable Energy initiatives.

• 26889 MWh of power generated from Windmill achieving a CO2 emission reduction of 21.778 MT.

• 4550 Nos. of LED lights replaced, thereby achieving 2292 KWh of energy savings. In Manali Refinery, 100% Conventional Lights have been converted into LED.

• As a part of Tamil Nadu Chief Minister''s visionary initiative “Meendum Manjappai" (cotton bags), your Company donated 2 Nos. of Vending machines to TNPCB, for dispensing cotton bags during the June''23, as a part of Tamil Nadu Chief Minister''s visionary initiative “Meendum Manjappai".

ENERGY CONSERVATION

Your company is keen on conserving the energy by implementing several energy conservation measures.

During the year, your company achieved a Specific Energy Consumption (SEC) and Energy Intensity Index (EII) of 72.2 and 87.5 (Best achieved) respectively as against 75.2 and 89.2 in 2022-23. 22 numbers of energy conservation measures were implemented successfully during the year, which resulted in energy savings of 28320 Standard Refinery Fuel Tonne (SRFT) per annum corresponding to approximately 0.24% reduction in F&L. The details of energy conservation measures are given in Annexure I.

Steam Leak Audit was conducted by CHT External Auditors as part of SAKSHAM 2024. Steam leak decreased from 0.44 Kg per MT of steam produced in 2022 survey to 0.43 Kg per MT of steam produced in 2024 survey despite facing challenges in December''23.

Oil & Gas Conservation Fortnight (SAKSHAM 2023) with the theme “Energy Conservation towards Net Zero" 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.

RELIABILITY IMPROVEMENT INITIATIVES

Your Company has taken several measures to improve the reliability of its operations which are as under:

• To ensure reliable operation of power system, Cogen Programmable Logic Controller (PLC) were replaced with state-of-art PLC Control systems.

• GT legacy electrical protection systems are being replaced with state of art bay control IED''s to improve reliability and facilitate digitalization of power system operations.

• Recommended for In-situ machining of flanges in plant 94

• Health assessment of Refinery 1 & Refinery 2 flare headers

• Replacement of CS coolers (2E 10, 2E 21) with redundant DSS cooler (2-E-62) from plant 205

DIGITALIZATION

Over the past few years, digital integration in oil and gas operations has been on the rise. With the opportunities that come from real-time data, digital integration is one of the best ways for any refinery to future-proof the refining business. In line with the trend, Your Company has been taking continuous steps in adopting digital technologies in its regular operations.

As you are aware, Your Company is well known for many of its ‘first of the kind'' initiatives in an Indian Refinery like implementation of Aspen DMC (controller). Similarly, in the recent past, based on the need and demand, many digitalization activities have been taken up for Process Optimization facilities like Data Historian (Aspen IP21) & Personal Identification Number (PIN) Network or the

Online Portals & Business Intelligence (BI) dashboards for Maintenance and Inspection activities.

As a strategic move to spearhead the Digital transformation process and to bring about a unified platform and digital growth of your refinery, an independent “Digitalization Cell" has been formed, with the objective of enabling the organization to harness the full potential of digital technologies to improve operations, enhance safety, and drive innovation in an increasingly competitive industry.

Your Company started exploring the use of digital applications in predictive maintenance, real-time integrated data, workflow digitization etc., and discussions are underway with our parent organization IOCL, for identification and extension of potential i-drive initiatives.

Other Digitalisation initiatives, which are on the anvil include the following:

• Creation of Animated Videos of Standard Operating Procedures

• Procurement of Smart Helmets for Remote Assistance etc.

• Establishing a Virtual Reality Training Room with initial focus on Virtual Reality based Fire and Safety Training.

• Exploring possible Collaborations with other industry/ academia towards implementation of proven innovative technology

• Transformation management with focus on employee adaptability through proper training and skill development.

HUMAN RESOURCES

Your Company recognizes that preserving and developing the intellectual resources is essential for the organization to successfully meet the challenges of the industry. Accordingly, several initiatives have been taken for the growth and development of employees to face future challenges.

Manpower Details:

The total strength of employees as on March 31, 2024 was 1422 of which 75 were women employees. The total number includes 734 Executives and 688 Non-executives. The Company engaged 151 apprentices under various categories like Trade, Technician, and Graduate which constituted 10.5% of the total workforce. The apprentices were imparted practical inputs with a structured monitoring and assessment methodology.

Learning & Development:

Your Company has made significant progress on this front, to develop flagship programs 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 2023-24, your Company has achieved 3.74 Average Training Mandays against the target of 2.5 Mandays.

Other initiatives in the areas of training are as under:

• Refinery Process Modelling Training conducted and attended by 14 Employees

Your company is honored with the SKOCH Award 2023, acknowledging the groundbreaking and first of its kind initiative “Utilization of Caged Drones for Inspection in Refineries." This prestigious accolade underscores your company''s unwavering dedication to digitalization excellence and innovation in the oil and gas industry.

INFORMATION SYSTEM

The Information System Department of your Company oversees crucial functions such as IT infrastructure management, software development and cyber security. Significant advancements were witnessed across all domains last year, reflecting a commitment to continual improvement. These enhancements encompassed bolstering cyber security measures, refining software development processes, and optimizing IT infrastructure for enhanced efficiency.

Cyber Security and IT infrastructure

Your company implemented Cyber Security Operations Centre (SOC) on 31.01.2024. M/s Bharati Airtel Services has been lined up for the Security Operations Centre (SOC).This cutting-edge facility is dedicated to ensuring the safety and integrity of digital assets by employing round-the-clock cyber threat monitoring and mitigation strategies.

The Chief Information Security Officer (CISO) of your Company is presenting comprehensive assessment of cybersecurity to the Board as per the directives of Ministry of Petroleum and Natural Gas .

The Information Security Steering Committee (ISSC) is constituted as per the guidelines of Ministry of Electronics and Information Technology. Two meetings were held with National Critical Information Infrastructure Protection Centre (NCIIPC) Vulnerability Assessment and Penetration Testing (VAPT) has been conducted for publicly hosted servers every quarter.

Marketing portal and Marketing dashboard

In-house marketing portal and marketing dashboard was developed and the same was launched on 30^th Dec 2023. The portal provides information on Products & Specifications, Customer registration, Sales & ledger balances, Customer feedback and many more details available for existing & prospective customers to access at the push of a button.

The marketing dashboard provides up-to date information on company''s direct marketing products related to sales, market share comparing with other OMC''s, market swings during the year etc.,

• Firemen Residential Training organised for newly recruited Six Firemen and the training was imparted by Tamil Nadu Fire and Rescue Services (TNFRS) during Dec''2023 to Mar''2024.

• Process Safety Management training programme conducted during the period April’23 to Mar''24. 148 Employees have attending the Training.

• Wellness Through Yoga, Stress Management and Meditation program organized, which benefitted 166 Employees.

• Under Learning Management System (LMS), the Training Need Identification and Training Calendars prepared based on competency and skill Assessments.

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

Your Company meticulously follows the Presidential Directives and guidelines issued by Government of India regarding the reservation in services for SC / ST / OBC / PwBD (Persons with Benchmark Disabilities) / Ex-Servicemen / EWS (Economically Weaker Section) to promote inclusive growth. 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 in accordance with the Presidential Directive. The details of representation of SCs/STs/OBCs in the prescribed proforma are attached as Annexure-M.

Out of the total manpower, there were 286 SC employees (previous year: 300) and 50 ST employees (previous year: 50) as on 31^st March, 2024, constituting 20.11% and 3.51 % of the total manpower respectively.

The provision of 4% reservation for persons with benchmark disabilities, in line with the Government of India’s guidelines / instruct was implemented by the Company. Necessary concessions / relaxations in accordance with the rule in this regard were extended to physically challenged persons in the recruitment.

During the year, cordial industrial relations were maintained across the Company’s installations. 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.

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

The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, have been implemented across the Company with clear objective of providing protection to women against sexual harassment at the workplace and for the prevention and redressal of complaints of sexual harassment. Internal Committees have been set up, headed by senior-level women employee to deal with sexual harassment complaints, if any. 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. 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 gives special focus to the various facets of women development plans and programmes. As on 31^st March, 2024, 75 women employees are on the rolls of the Company, of whom 63 are in the supervisory cadre and 12 are in non-supervisory cadre, constituting 8.58 % of the total supervisory employees and 1.74 % of the total nonsupervisory employees.

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

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

Your Company''s Corporate Social Responsibility is part of its corporate governance, which is to create value for stakeholders (CPCL''s Vision) and to pro-actively fulfill social commitments including environment and safety (CPCL''s Mission).

With this underlying principle, your company''s Corporate Social Responsibility (CSR) Vision has been defined as “Strive for Educated, Healthy, Economically Developed and Environmentally Protected community around the Refineries".

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

To achieve your company''s 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.

During the year, your Company spent Rs. 2011.65 lakhs under various CSR activities mostly surrounding the refinery

operations and project locations based out of Chennai and Nagapattinam in Tamil Nadu. Majority of the CSR activities were carried out towards Health and Nutrition, Education & Skill Development, Community Development, welfare towards Persons with Benchmarked Disabilities, Environment Sustainability, to improve their living standard and bridge the social, environmental and economic gaps.

The programmes are undertaken primarily in the vicinity of the Company''s major installations / establishments to improve the quality of life of the communities, which include marginalized groups such as SCs, STs, OBCs and the disabled.

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).

Anganwadi inaugurated under CPCL CSR initiative:

Your Company has constructed an Anganwadi, in collaboration with Greater Chennai Corporation (GCC) under its Corporate Social Responsibility at New Colony, Thiruvottiyur, for the benefit of pre-KG children in the area and included facilities such as a kitchen, a storage room, as well as toilets and washing facilities for both the pre-KG children and the teachers.

In recognition of its various CSR initiatives, your Company received the following awards / accolades during the year:

• Mahatma Award 2023 for outstanding CSR in Community Development at the India International Centre, New Delhi, on 30.09.2023, by the Mahatma Foundation (Aditya Birla Group). This significant recognition highlights your company''s unwavering dedication towards creating a positive impact in the community it serves.

• In a resounding recognition of its sustained commitment to Corporate Social Responsibility (CSR) initiatives, your Company was honoured with the prestigious Transformation Partnership Award, bestowed by the esteemed Indian Institute of Technology Madras (IIT Madras), which was presented during the institution''s National CSR Summit held on February 17, 2024. The Transformation Partnership Award underscores your Company''s longstanding dedication and collaborative efforts towards fostering positive social change through various CSR endeavors, unwavering dedication to fostering sustainable development and making a meaningful difference in the communities it serves.

VIGILANCE

The vigilance department of your company continues to lay great emphasis to maintain high level of integrity throughout the Company. Apart from investigating the complaints, Vigilance Department also ensures that a framework exists for promoting transparency within the Organization through use of technology and implementation of various preventive vigilance measures. The department also focuses to establish transparent systems and procedures for the benefit of external stakeholders.

During the year, various system improvement measures for increasing transparency, such as developing a web portal for Marketing Department for e- enlistment of customers through Company''s website has been done and Revision of Company''s Recruitment Policy, development of SOP for Catalyst usage and disposal, digitalization of the data on requests for deployment of cranes have been taken up.

A training program for Vigilance Officers by Central Vigilance Commission (CVC) was hosted by CPCL on 15-9-2023 at Chennai. The program was held in the presence of Hon''ble

Vigilance Awareness Week- 2023 was observed from 30^th October, 2023 to 6^th November, 2023 on the theme given by Central Vigilance Commission - “Say No to Corruption; Commit to the Nation".

Central Vigilance Commissioner, Vigilance Commissioner and Secretary, CVC. 104 Vigilance Officers from 32 Organizations and 15 Chief Vigilance Officers attended the program. The sessions were handled by 2 Directors from CVC and Chief Technical Examiner, CVC.

Various events and competitions on the theme were held for Employees, Spouses of Employees, School and College students. A walkathon was also held to promote awareness on Vigilance and PIDPI resolution.

There were no pending disciplinary proceedings or prosecution cases as on 31^st March, 2024.

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 2023-24, 18 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).

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 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 on the website of the company https://cpcl.co.in/investors/financials/ exchange-intimations/.

As a leadership initiative on the Governance , your company has voluntarily adopted for third party reasonable assurance on the Business Sustainability and Responsibility Statement (BRSR) core principles and limited assurance on the Integrated Reporting framework.

AUDIT COMMITTEE

The composition of the Committee as on 31^st March, 2024 is as under:

• Mr.Ravi Kumar Rungta- Independent Director - Chairman

• Dr.C.K.Shivanna, Independent Director - Member

• 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 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 24.04.2024.

RISK MANAGEMENT

Your Company has a well-developed Risk Assessment & Management system and has also constituted a Risk Management Committee. The composition of Risk Management Committee as on 31.03.2024 is as under:

• Mr. Arvind Kumar, Managing Director - Chairman

• Mr. H.Shankar, Director (Technical) - Member

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

• Mr. P.Kannan, Director (Operations) - Member

• Mr. Ravi Kumar Rungta, Independent Director- Member

• Ms. Sukla Mistry, Nominee Director, IOCL - Member (upto 30.04.2024)

Note: Mr. Subhajit Sarkar was inducted as a Member in place of Ms. Sukla Mistry with effect from 03.05.2024

The Action Taken Report on the Risk Management Policy for FY 2023-24 containing the mitigation measures on various High & Medium Risks along with the Risks on Radar were reviewed by the Risk Management Committee on 12.04.2024 and by Audit Committee on 23.04.2024 and by the Board at the meeting held on 24.04.2024.

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 24.04.2024, 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, 2024 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 2023-24 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.0.26 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 24.04.2024 on the annual accounts for the financial year 2023-24.

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, 2024, were submitted to the C&AG for supplementary audit. The C&AG have conducted supplementary audit.

COST AUDITORS

M/s. Madhavan Mohan & Associates, Cost Accountants, Chennai were appointed as the Cost Auditor of the Company for the Financial Year 2023-24 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 2022-23 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 2023-24 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 2023-24.

The Secretarial Audit Report for the year 2023-24 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 including one Woman Independent Director- Reg. 17.

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

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 Independent Directors including one Women Independent Director, vests with the Government of India. Regular follow-up is being made with Government of India and 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.

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

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.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

One separate meeting of Independent Directors (7^th) was held on 24.02.2024, as per the provisions of the Companies Act 2013 and SEBI(LODR).

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 MSEs

Your Company has earmarked 25% of total procurements to be made from the MSEs for the FY:2024-25 in accordance to the PPP for MSEs Order 2012 of the Government of India. Out of this 25% target, a sub-target of 4% on total procurement is earmarked for procurements from Reserved SC/ST MSEs and also another sub-target 3% on total procurement is earmarked for procurements from Women owned MSEs.

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 2023-24 as against the target fixed by the Government of India are given below:

Sl. No	Details	Value of procurements Rs. Crores (excluding Crude, Gas, Power & License Fees)	% age target achieved	Target set by the Govt.
1	Total value of procurements	817.84
2	Procurements from MSEs (General, Reserved SC/ST & Women)	425.65	52.05%	25%
3	Procurements exclusively from Reserved SC/ST MSEs	55.27	6.76%	4%
4	Procurements exclusively from Women owned MSEs	27.02	3.30%	3%

• During the year 2023-24, 11 Vendor Development Programmes were conducted/participated by CPCL in total for the benefit / development of the MSEs. Out of which, 5 exclusive programmes were conducted by CPCL for the benefit of SC/ST MSEs. 1 exclusive programme was conducted for the benefit of Women owned MSEs.

• The above programmes were conducted in association with MSME-Development Institute Chennai, NSIC Chennai; National SC-ST Hub Office-Chennai, Government of India; TAHDCO (Tamilnadu Adidravidar Housing Development Corporation Ltd), Facilitating MSMEs of Tamilnadu (FaMe) , SIDCO, Government of Tamilnadu; NSIC, DICCI -Tamilnadu & Puducherry Chapter.

• During these programmes, the procedure followed by your Company, 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 MSMEs.

Procurements through the GeM platform:

The procurement through the GeM portal accounted for 72% (Rs.588.30 Crores) of the total procurements (Rs.817.84 Crores) during the year 2023-24.

Recognitions

Your Company received “Certificate of Appreciation" for the highest percentage in procurement from SC-ST owned Micro

and Small Enterprises (MSEs) amongst CPSEs in the category of total procurement between Rs.100 Crores to Rs.1000 Crores for the Financial Year 2022-23 from the Ministry of MSME. The certificate was presented at the CPSE Conclave on Public Procurement Policy at Vigyan Bhavan, New Delhi on 29.02.2024.

Your company had participated in TN Beat Expo 2024, a business conclave cum exhibition exclusively for SC/ ST Entrepreneurs organized by Tamil Nadu Adi Dravidar Housing and Development Corporation Limited (TAHDCO) under aegis of Adi Dravidar and Tribal Welfare Department, Government of Tamil Nadu at Chennai Trade Centre on 26^th & 27^th January 2024.

The objective of this event was to promote entrepreneurship & understand business opportunities available to improve and develop the socio-economic status of the SC/ST community.

Your Company had set up a stall showcasing the various products and requirements which were in the scope of supply of the SC/ST MSE entrepreneurs. SC/ST entrepreneurs actively visited the stall in large numbers to learn about the procurement requirements of the company and expressed their keen interest to participate in our future tenders for procurement of goods and supply of services.

CPCL had set up a stall showcasing the various products and requirements which were in the scope of supply of the SC/ST MSE entrepreneurs.

Scrap Sold:

During the year 2023-24, Scrap weighing 5277 Metric tonnes were sold through e-Auction fetching Rs 19.49 Crores Net Sale value to your Company.

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 was Rs.1215 crore (highest) during the year 2023-24, as against Rs.1187 crore in the previous year. The Profit after Tax for the year 202324 was at Rs.73.08 crore (highest) as against Rs.11.34 crore in the previous year. Dividend of Rs.154.45% of paid up capital/50% of PAT i.e. Rs.36.54 Cr. was recommended by the Board of IAL for FY 2023-24.

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:

Joint Venture Company(JVC), Cauvery Basin Refinery & Petrochemicals Limited (CBRPL) was incorporated on 06-Jan-23 between IOCL, CPCL & other seed equity investors for implementing a new grassroot refinery of 9 MMTPA capacity with petrochemical facilities at Nagapattinam, Tamil Nadu. This new refinery will produce Petrol and Diesel of Bharat Stage-VI specifications and Polypropylene as a value-added product. Subsequently, subscription amount toward initial share capital of Rs.5,00,000/- received from the Promoters (IOCL and CPCL) and other seed equity investors. Land acquisition process was completed by the Government of Tamil Nadu and handed over to CPCL on 31-Oct-23, which marks a crucial step towards actualizing the project.

CPCL and IOCL Board accorded approval for the revision in project cost and capital structure of the Joint Venture with 75% equity from IOCL & 25% equity from CPCL. The project is scheduled to be completed in 39 Months from accordance of statutory approval.

Your company also inked a Memorandum of Understanding (MOU) with the Tamil Nadu Government, for the additional investment as compared to the previous commitment.

Site enabling activities such as Construction Power, Construction Water, Site Grading, Boundary Wall, and Roads & Drain construction are underway, laying the groundwork for the refinery''s physical establishment.

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://cpcl.co.in/company/overview/our-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. Approval of the members for the material RPTs with CBRPL for FY 2025-26 is proposed to be obtained in the forthcoming AGM. 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 -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 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 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 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) Mr. K.Surendran, independent Director, has resigned effective 25.03.2024 as he intends to contest in the Lok Sabha elections. Mr. K. Surendran confirmed that there is no material reason other than mentioned above for his resignation. His resignation was accepted by MoPNG vide letter dated 23.04.2024.

2) Mr.P.Kannan has been appointed as Director (Operations) effective 01.08.2023 in place of Mr.S.Krishnan who super-annuated from the services of the company on

31.07.2023.

3) Mr. Inder Jeet, Deputy Secretary, MoPNG, has been appointed as Nominee Director of Government effective 07.11.2023

4) Ms.Sukla Mistry, Nominee Director, IOCL ceased to be a Director on the Board of CPCL effective 30.04.2024 as she has super-annuated from the services of IOCL on

30.04.2024.

5) Mr.Subhajit Sarkar, Executive Director (Operations), IOCL, has been appointed as Nominee Director, IOCL on the Board of CPCL in place of Ms.Sukla Mistry effective

03.05.2024.

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

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 were advised to register 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. 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, 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

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 GUARANTEES /LOANS / INVESTMENTS MADE BY THE COMPANY

Your Company has not provided Loans, Guarantees/Securities in connection with loan to any other person, body corporate 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 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).

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, 2024, the applicable accounting standards have been followed and that there are no material departures from the same;

ii) 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) 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) Directors have prepared the annual accounts for the financial year ended 31^st March, 2024, on a going concern basis;

v) 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) Directors have devised proper systems to ensure compliance with the provisions ofall 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 121 requests were received and were disposed off.

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.

During the year, Hindi classes were conducted in the refinery and Hindi Workshops on the Official Language Policy of the Government of India and its implementation in the Company were conducted for the benefit of employees.

In compliance with the Official Language Policy of the Government of India. Hindi Fortnight was celebrated in your company from 19.09.2023 to 28.09.2023. On this occasion, Hindi Handwriting, Hindi Drama, Hindi Quiz, Hindi Debate, Hindi Reading, Hindi Antyakshari, Hindi Singing and Hindi Essay competitions for employees, employees spouse and their Children were Conducted. Our Managing Director distributed prizes to the winners of the competition.

Your Company participated in an Inter-PSU Hindi Drama Competition organized by Town Official Language Implementation Committee, PSU, Chennai at the Airport Authority of India on February 9, 2024. CPCL employees and their family members captivated the audience with their poignant message on environment conservation. The team, which won award for Best Costume and consolation prize, was appreciated for their extraordinary performance.

Material Changes affecting the Company

There have been no material changes and commitments affecting the financial position of the Company between the end of the Financial year and date of this report. There has been no change in the nature of the business of the Company.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year

No applications were made during the year and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code 2016 (31 of 2016).

Details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the banks or financial institutions along with the reasons thereof.

There were no instances of one-time settlements during the year 2023-24.

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 2023-24.

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 & 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.S.Krishnan, Mr. K Surendran and Ms. Sukla Mistry during their tenure on the Board.

---

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
	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

• 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.

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

• 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 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:

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:

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

• Highest ever monthly Mineral Turpentine Oil (MTO) dispatch of 5.8 TMT in Jan’23 surpassing the previous best of 4.8TMT (Sep’22).

• Highest ever monthly Fluidised Catalytic Cracking Unit (FCCU) throughput of 96.6 TMT in Jan’23 surpassing the previous best of 95.8 TMT in Mar’22.

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

• Highest ever monthly Once Through Hydro Cracker Unit (OHCU) throughput at 227 TMT in May’22 which surpassing the previous best of 222 TMT (Mar’22).

• Highest ever monthly throughput of Delayed Coker Unit (DCU) at 198 TMT in May’22 surpassing the previous best of 183 TMT (Mar’22).

• Highest ever Hexane production and dispatch at 3.1 TMT in Apr’22 surpassing the previous best of 2.8 TMT (July’21).

• Successfully produced and supplied 39.7 MT of JP-7(Jet Fuel) to Defence Research and Development Organisation (DRDO) during Oct’22.

• Successfully produced and dispatched new product LSHS (Premium) during Feb’23.

• First time export of Naphtha co-loading with Paradip Refinery during Jun’22.

• Exported higher parcel size of Naphtha (55 TMT parcel) directly from Chennai port during Jul’22 (Double berthing).

• Successfully completed HSD Export parcel of 40 TMT to M/s. Ceypetco, Sri Lanka in May’22.

MOU PERFORMANCE

Your Company has received “Excellent” 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)
	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 Company’s R&D plays a pivotal role in providing support to refinery operations.

During the year various studies were carried out as under:

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

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

• Evaluation of FCC GDS unit’s suitability for processing of Heavy Naphtha

• 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 Owner’s 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:

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

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

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

• 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:

• 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

• 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.

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

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

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

• 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.

• 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.

• 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.

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

• Live Fire Drill Trainings for IOCL Employees - 97 Employees were covered in the three programs that were conducted in June’22, Sep’22, and Mar’23.

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

• Internal Safety Audit in September 2022.

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

• Safety audit by the PESO approved third party agency viz., M/s. Hubert Enviro Care Systems Pvt Ltd (HECS) as per PESO guidelines in Mar’23.

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 Sept’22 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:

• 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.

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

• World Environment Day (WED) was celebrated with the theme “Solutions to Plastic Pollution” on 5^th June 2023.

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

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

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

• 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 “Energy Conservation towards Net Zero” 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

• 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.

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

• To ensure reliable operation of power system, Cogen and Captive Power Plant’s (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

• 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.

• 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.

• 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.

• Core Course Module I Training on “Refinery Operations” conducted for 15 Supervisory Employees from 23^rd May 2022 to 27^th May 2022 at Refinery Engineering School of Training (RESOT).

• 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.

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

2023 at RESOT & HRD Centre.

• 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.

• Core Course Module III Training on “Instrumentation and Electrical Maintenance” was conducted for 18 Supervisory Employees.

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

• 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 Women’s 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 company’s Corporate Social Responsibility (CSR) Vision “Strive for Educated, Healthy, Economically Developed and Environmentally Protected community around the Refineries”, 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 company’s 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:

• 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 “Alert generation from SAP system about pending returnable materials to higher authorities to ensure return of outstanding materials’, “Elimination of restrictive conditions in PQ (Pre-Qualification) Criteria to increase competition” 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 Company’s Website.

As per the guidelines of Central Vigilance Commission a separate audit on “Integrity of Automated Systems” 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 CPCL’s 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 “Preventive Vigilance & PIDPI Complaint Handling System” 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^st October, 2022 to 6^th November, 2022 with the theme -“Corruption Free India for a Developed Nation”.

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).

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 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:

• Mr.Ravi Kumar Rungta- Independent Director - Chairman

• Dr.C.K.Shivanna, Independent Director - Member

• 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 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 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:

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

• Mr.S.Krishnan, Director (Operations) - Member

• Mr.H.Shankar, Director (Technical) - Member

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

• Mr.Ravi Kumar Rungta, Independent Director - Member

• 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.

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.

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 MSME’s

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%

• 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 MSME’s.

• 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 MSME’s (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 Company’s performance of exceeding the mandated targets with respect to procurement from MSME’s, your company has been awarded the MSME Ecosystem Awards under “Excellence in MSE Procurement category” instituted by FICCI-CMSME on 05.12.2022 and “Certificate of Appreciation” for highest procurement in SC/ ST Category MSEs from Ministry of MSME on 18.11.2022.

• 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, Hon’ble 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 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 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 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. 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

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 were advised to register 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.

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 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, 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 Company’s 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).

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, 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

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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
	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

• 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.

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

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

• 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 1st			April, 2021 to
31st 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:

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

• 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:

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

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

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

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

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

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

• 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.

• 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.

• 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).

• 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)
	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:

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

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

• 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:

• 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

• 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.

• 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.

• 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

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

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

• 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.

• 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

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

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

by eminent specialist attended by 170 employees/retired employees.

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

• ''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.

• 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:

• 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.

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

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

• 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.

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

• 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.

• 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.

• 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:

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

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

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

• LOTO system audit was conducted.

• 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:

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

• 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.

• 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.

• 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.

• 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.

• 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:

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

• 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.

• 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.

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

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

• 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.

• 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.

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 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. Regular workshops were organised, especially for women employees to bring awareness about their rights and facilities at the workplace emphasising 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, 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:

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

• 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.

• 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.

• 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:

• Mr. Myneni Narayana Rao- Independent Director-Chairman

• Mr. Amitabh Mathur-Independent Director- Member

• 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:

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

• Mr.Rajeev Ailawadi, Director (Finance) - Member

• Mr.S.Krishnan, Director (Operations) - Member

• Mr.H.Shankar, Director (Technical) - Member

• Mr.Myneni Narayana Rao, Independent Director - Member

• 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.

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 27.04.2022, 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.

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 (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

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 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.

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

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

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/

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^th TOLIC 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, Auditors’ 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
	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 Company’s 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 year’s 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 year’s 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 year’s 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 ‘Excellent’ 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)
	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 “Top Exporter - Southern Region Export Excellence Awards” 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 Hon’ble 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 (±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, contractors’ 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.’18 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 Company’s efforts to minimise energy consumption, your Company has been adjudged the winner for ‘Boilers and Furnaces Efficiency’ 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 Employees’ 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.

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 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 Women’s Day 2018 was celebrated by the women employees of CPCL on 8^th March, 2018 with the theme ‘Face Adversity, Walk Dauntless’. One of the women employees won the Women Achievers Award at the Indian Women Convention 2017.

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

Your Company’s 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 Company’s 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, Hon’ble 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 “My Vision - Corruption-free India.” 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.

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 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 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 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.

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 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

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

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 Directors’ 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 Company’s 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 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 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).

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of 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^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

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Mar 31, 2017

DIRECTORS’ 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
	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 ‘Very 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 Feedstock’s 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 ‘radar speed-gun’ 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 ‘Green 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 ‘‘Special 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

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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

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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 – 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 – 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

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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 ‘Significant 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 ‘Excellence 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 – 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

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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