Chennai Petroleum Corporation

1.  The company, in the absence of suitable notification by the Central
 Government specifying the applicable rate of cess under section 441A of
 the Companies Act, 1956 on turnover payable by the company, has not
 provided for cess towards formation of Rehabilitation and Revival Fund.
 
 2.  Valuation of Finished Products:
 
 The total cost of the crude and processing cost is apportioned to the
 individual products on the basis of the respective realizable value.
 Under this method the joint products absorb joint costs according to
 the ability of the product to bear the cost as reflected by the market
 value of the individual products. (Refer policy no 7 (c) in Schedule -
 Q - Statement of Significant Accounting Policies).
 
 3.  In line with the scheme formulated by the Petroleum Planning and
 Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas
 the company has received an aggregate discount of Rs. 130655.55 lakhs
 (2008: Rs. Nil) from Oil and Natural Gas Corporation Limited on Crude
 Oil purchase and has passed on the same as discounts on products sold
 to Indian Oil Corporation Limited. Accordingly, Gross Sales and
 Consumption of Raw Materials for the year are net of Rs. 130655.55
 lakhs.
 
 4.  Impact on account of changes in Accounting Policies:
 
 Expenditure incurred on technical know how/license fee relating to
 plants/facilities, hitherto capitalised as intangible asset, is now
 capitalized as part of cost of the relevant fixed assets and
 depreciated. This change has an impact of reducing the loss by Rs.
 797.25 lakhs including an amount of Rs. 634.50 lakhs accounted as prior
 period item.
 
 5.  Payments to and provision for employees includes Rs. 54.67 crore
 (2008: Rs. 6.76 crore) towards estimated provision/ adhoc relief paid
 in respect of pay revision for supervisory employees for the period
 01.01.2007 to 31.03.2009.
 
 6.  Pending finalisation of Long Term Settlement with workmen, for
 revision of pay with effect from 01.01.2009, no provision has been made
 in the accounts, except to the extent of adhoc relief paid amounting to
 Rs. 84.68 lakhs which has been included under payments to and provision
 for employees.
 
 7.  The company operates in a single segment viz. downstream petroleum
 sector. As such reporting is done on a single segment basis.
 
 8.  The company has not entered into any derivative transaction, other
 than for hedging purposes during the year. Forward contracts entered
 into for hedging purposes by the company and outstanding as on 31st
 March 2009 towards repayment of loan is NIL (2008: NIL).
 
 9.  Foreign currency exposures that are not hedged as on 31st March
 2009: Rs. 152939.99 lakhs (2008: Rs. 225978.94 lakhs).
 
 10.  Disclosure as required under Accounting Standard -15 (revised) on
 Employee Benefits issued by the Institute of Chartered Accountants of
 India is provided in Annexure - I to this schedule.
 
 11.  In compliance with Accounting Standard -18 on Related Party
 Disclosures issued by the Institute of Chartered Accountants of India,
 the required information is given in Annexure - II to this schedule.
 
 12.  Disclosure as required under Accounting Standard - 19 on Leases
 issued by the Institute of Chartered Accountants of India is as under:
 
 Operating Leases:
 
 The company has taken on operating lease, Product Tankages from IOC on
 a renewal basis. The lease rentals incurred for the current year
 amounting to Rs. 1117.85 lakhs are included in Rent (2008: Rs. 1608.42
 lakhs).
 
 The lease rent payable for the next financial year is estimated to be
 Rs. 877.82 lakhs (2008: Rs. 1475.09 lakhs) and lease rent for the
 five-year period after the next year is estimated to be Rs. 4382.10
 lakhs. (2008: 7375.41 lakhs).
 
 Deferred Tax Liability (Net)
 
 II. Deferred tax asset is being recognised on unabsorbed depreciation
 and carried forward losses of the company since the company is
 virtually certain of sufficient future taxable income. This is
 evidenced by the positive margins accruing to the company commencing
 from the fourth quarter of 2008-09.
 
 b) Name of the Joint Venture National Aromatics and Petrochemicals
 
 Corporation Ltd.
 
 Proportion of ownership interest 50%
 
 Country of Incorporation India
 
 Aggregate amount of interests in Joint Venture is not given since the
 joint venture is not operational
 
 13.  During the year, the company has undertaken a review of all fixed
 assets in line with the requirements of Accounting Standard- 28 on
 Impairment of Assets issued by the Institute of Chartered Accountants
 of India. Based on such review, no provision for impairment is required
 to be recognised for the year.
 
 14.  Disclosure required under the provisions of Section 22 of Micro,
 Small and Medium Enterprises Development Act, 2006.
 
 The company has sought written confirmation from its suppliers to
 identify micro, small and medium enterprises.
 
 No principal amount or interest amount remains unpaid to such Micro and
 Small enterprises as on 31.03.2009 and no payments were made to such
 enterprises beyond the appointed day during the year. Also, the
 company has not paid any interest in terms of section 16 of the
 above-mentioned act or otherwise.
 
 This information has been determined to the extent, such parties could
 be identified on the basis of information made available to the
 company.
 
 15.  The Profit and Loss Account includes:
 
 a) Expenditure on Public Relations and Publicity amounting to Rs.
 149.31 lakhs (2008: Rs. 146.21 lakhs). The ratio of annual expenditure
 on Public Relations and Publicity to the annual turnover is 0.00004078:
 1 (2008: 0.0000521: 1).
 
 b) Research and Development expenses Rs. 330.29 lakhs (2008: Rs. 280.28
 lakhs).
 
 c) Entertainment Expenses Rs. 43.74 lakhs (2008: Rs. 26.27 lakhs).
 
 16.  Previous years comparative figures have been regrouped and
 recast, wherever necessary, to the extent practicable, for uniformity
 in presentation.
 
 Disclosure requirements under AS -15 (Revised) as per Note No. 14
 
 Defined Contribution Schemes:
 
 The net amounts expended in respect of employers contribution to the
 provident fund and superannuation fund during the year, are Rs. 985.10
 lakhs (2008: Rs. 620.77 lakhs) and Rs. 286.89 lakhs (2008: Rs. 58.13
 lakhs) respectively. This includes Rs. 322.10 lakhs and Rs. 161.05
 lakhs, being the estimated provision for employers contribution to
 provident fund and superannuation fund respectively on account of pay
 revision for supervisory employees for the period 01.01.2007 to
 31.03.2009 and accounted during the year.
 
 Key Management Personnel
 
 Whole-time Directors
 
 1) Shri K.K.Acharya
 
 2) Shri N.C.Sridharan
 
 3) Shri S.Chandrasekaran
 
 4) Shri K. Balachandran
 
 Joint Venture Companies
 
 1) Indian Additives Limited
 
 2) National Aromatics and Petrochemicals Corporation Limited.