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 0 /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