TO THE MEMBERS
 
 On behalf of the Board of Directors, I have great pleasure in
 presenting to you the fifity ninth Annual Report on the working of the
 Company, together with the Audited Accounts for the year ended 31st
 March 2011.
 
 HIGHLIGHTS
 
                                                     (Rs. Crores)
 
                                                2010-11       2009-10
 FINANCIAL
 
 Sales/Income from Operations               1,42,396.49   1,14,888.63
 
 Profit before Depreciation, Interest 
 and Tax                                       4,637.09      4,193.18
 
 Depreciation                                 (1,406.95)    (1,164.40)
 
 Interest                                       (884.00)      (903.75)
 
 Profit before Tax                              2,346.14      2,125.03
 
 Provision for Tax
 
 -  Current Tax                                 (425.52)      (561.50)
 
 -  Deferred Tax                                (390.96)      (204.61)
 
 -  Taxation of earlier years written back       (82.17)       (57.51)
 
 -  MAT Credit Entitlement                        91.51             -
 
 -  Fringe Benefit Tax                                 -         (0.05) 
 
 Profit after Tax                               1,539.01      1,301.37 
 
 Balance brought forward from previous year    8,715.15      8,104.16 
 
 Appropriations:
 
 General reserve                                (153.90)      (130.14)
 
 Debenture Redemption Reserve                   (176.15)       (86.40)
 
 Proposed Dividend                              (474.08)      (406.35)
 
 Tax on distributed Profits                       (76.91)       (67.49)
 
 Balance carried forward                       9,373.12      8,715.15
 
 PHYSICAL PERFORMANCE (MMT)
 
 Market Sales (Including Exports)                 27.03         26.27 
 
 Crude Thruput:
 
 Mumbai Refinery                                    6.55          6.96
 
 Visakh Refinery                                    8.20          8.80
 
 SHAREHOLDERS'' VALUE (Rupees)
 
 Earnings per Share                               45.45         38.43
 
 Cash Earnings per Share                          98.54         78.86
 
 Book Value per Share                            386.76        341.32
 
 DIVIDEND
 
 Your Directors, after taking into account the financial results of the
 Company during the year, have recommended dividend of Rs. 14 per share
 for the year 2010-11 as against Rs. 12 per share paid for the year
 2009-10. The dividend for 2010-11, including dividend tax provision
 will absorb Rs. 550.99 crores (2009-10 : Rs. 473.84 crores).
 
 SALES/INCOME FROM OPERATIONS
 
 Your Company has achieved sales/income from operations of Rs. 1,42,396.49
 crores as compared to Rs. 1,14,888.63 crores in 2009-10.
 
 PROFIT
 
 Your Company has earned gross Profit of Rs. 4,637.09 crores as against Rs.
 4,193.18 crores in 2009-10 and Profit after tax of Rs. 1,539.01 crores as
 compared to Rs. 1,301.37 crores in 2009-10.
 
 INTERNAL RESOURCES GENERATION
 
 The Internal resources generated were Rs. 2,785.93 crores as compared to
 Rs. 2,196.53 crores in 2009-10.
 
 CONTRIBUTION TO EXCHEQUER
 
 Your Company has contributed a sum of Rs. 28,864.15 crores to the
 exchequer by way of duties and taxes, as compared to Rs. 21,156.02 crores
 in 2009-10.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 In terms of Section 217(2AA) of the Companies Act, 1956, your Directors
 state that:
 
 (i) In the preparation of the Annual Accounts, all the applicable
 Accounting Standards have been followed along with proper explanation
 
 relating to material departures.  (ii) The Company has selected such
 Accounting Policies and applied them consistently and made judgments
 and estimates that are reasonable and prudent so as to give a true and
 fair view of the state of affairs of the company as on 31st March 2011
 and of the Profit & Loss Account of the company for the year ended on
 that date.
 
 (iii) The Company has taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the company and for preventing and detecting fraud and other
 irregularities.
 
 (iv) These Accounts have been prepared on a going concern basis.
 
 MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA
 
 Your Corporation has been signing a Memorandum of Understanding (MOU)
 with the Ministry of Petroleum & Natural Gas. The performance of the
 Corporation of the year 2010-11 qualifies for Excellent rating basis
 self evaluation.
 
 REFINERY PERFORMANCE
 
 HPCL refineries processed a combined thruput of 14.75 MMT (15.76 MMT in
 2009-10) against combined installed capacity of 14.80 MMT.
 
 HPCL refineries achieved overall MOU Very Good Rating with respect to
 production parameters viz. Crude thruput, Distillate Yields and Specific
 Energy Consumption.
 
 Gross Refining margins of Mumbai Refinery averaged at US$ 4.65 per barrel
 as against US$ 2.80 per barrel for the year 2009-10.
 
 Gross Refining margins of Visakh Refinery averaged at US$ 5.81 per barrel
 as against US$ 2.59 per barrel for the year 2009-10.
 
 Mumbai Refinery:
 
 During the year, Mumbai Refinery achieved crude thruput of 6.55 MMT as
 against installed capacity of 6.50 MMT.
 
 The fuel and loss of 7.6 wt% for the year was lower than Annual Plan of
 8.8%the year.
 
 The Adjusted Distillate yield at 72.4% was higher than MoU Excellent
 target of 70%.
 
 Mumbai Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of
 91.1 against MoU Excellent target of 97.0 for the current year.
 
 Visakh Refinery :
 
 During the year, Visakh Refinery achieved crude thruput of 8.20 MMT as
 against installed capacity of 8.3 MMT.
 
 The fuel and loss of 7.3 wt% for the year was lower than Annual Plan of
 7.7 %.
 
 The Adjusted Distillate yield at 71.5% was higher than MoU Excellent
 target of 70%.
 
 Visakh Refinery achieved Specific Energy Consumption (MBTU/BBL/NRGF) of
 86.3 against MoU Excellent target of 90.0 for the current year.
 
 The particulars with respect to Conservation of Energy, Technology
 Absorption, Foreign Exchange Earning & Outgo are detailed in Annexure
 I.
 
 The particulars relating to control of Pollution and other initiatives
 by refineries are listed in Annexure II of Directors'' report.
 
 MARKETING PERFORMANCE
 
 The market sales (including exports) were 27.03 million tonnes as
 against 26.27 million tonnes recorded in 2009-10.
 
 VIGILANCE
 
 Vigilance Department in the current year has strived to emphasize in
 its activities, an environment of proactive vigilance, the importance
 of transparency, adherence to professionalism and high standards in
 customer service and project execution.
 
 Vigilance Awareness Week was observed from 25.10.2010 to 01.11.2010 all
 over India, wherein, various competitions like slogan, quiz, essay
 writing contests etc. were organized among the employees.
 
 INDUSTRIAL RELATIONS
 
 Industrial Relations climate during the year 2010-11 continued to be
 harmonious across all locations.
 
 The Competency Mapping and Development process was further
 strengthened.
 
 During the year, Organisation wide culture survey-Darpan 2010 was
 administered for all management employees as an endeavour towards
 building high performance culture.
 
 Further, Employee Self Contributory Death Relief Scheme was introduced.
 Under this scheme, employees voluntarily make a one-time contribution
 of Rs. 50/- per death. The amount collected is paid to the Beneficiary
 nominated while in service.
 
 OFFICIAL LANGUAGE IMPLEMENTATION
 
 Official Language Implementation has been given the utmost importance in
 the Corporation.
 
 SC / ST LIAISON
 
 The overall representation of SC / ST employees in the Corporation is
 27.73%. During the year, your Corporation has carried out a number of
 Welfare / Development activities such as primary education,
 scholarships, drinking water facilities, health care, income generating
 schemes / vocational training, rehabilitation of persons with
 disabilities & other welfare activities.
 
 CORPORATE GOVERNANCE
 
 The Corporation has complied with the requirements of Corporate
 Governance with the exception of appointment of Independent Directors
 to the level of 50% of the total strength of the Board. This matter is
 being pursued with the Administrative Ministry. The detailed Corporate
 Governance report forms part of this Annual report separately.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 A detailed Management Discussion and Analysis Report has been given
 separately.
 
 PARTICULARS OF EMPLOYEES
 
 A statement providing the information as required under Section 217
 (2A) of the Companies Act, 1956 is annexed herewith (Annexure III). The
 details regarding the number of women employee''s vis-à-vis the total
 number of employees in each group is also annexed. (Annexure IV).
 
 CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARIES
 
 In accordance with the general exemption granted by the Ministry of
 Corporate Affairs, Governemt of India, the Annual Accounts and related
 information of the subsidiary companies are not being attached with the
 Balance Sheet of the Company. The company will make available the
 Annual Accounts of the Subsidiary companies and the related detailed
 information to any member of the company who may be interested in
 obtaining the same. The annual accounts of the subsidiary companies
 will also be kept open for inspection at the registered Office of the
 company and that of the respective subsidiary companies.
 
 COST AUDIT
 
 The cost audit for the financial year 2009-10 was carried out and the
 Cost Audit Reports were fled with the Ministry of Corporate Affairs on
 September 24, 2010 as against the due date for fling of September 28,
 2010.
 
 DIRECTORS
 
 HPCL Board presently comprises of 9 Directors. The Whole Time Directors
 are S/Shri S. Roy Choudhury, Chairman & Managing Director, Dr. V. Vizia
 Saradhi, Director-Human Resources, B. Mukherjee, Director-Finance and
 K. Murali, Director-refineries.
 
 The Part-time Directors are S/Shri P.K. Sinha, L.N. Gupta, Dr. Gitesh
 K. Shah, Anil Razdan and S.K. Roongta.  The following are the details
 of their appointment:- 
 
 - Shri P.K. Sinha, Special Secretary and Financial Adviser, MOP&NG who 
 joined HPCL Board on March 1, 2006 continues to be the
 Ex-Officio Part-time Director of the Corporation. Shri L.N. Gupta, Joint
 Secretary (refineries), MOP&NG who joined HPCL Board on
 June 25, 2008 continues to be the Ex-Officio Part-time Director of the
 Corporation.
 
 - Dr. Gitesh K. Shah, joined HPCL Board as a Part-time Non-Official
 Director on December 7, 2009. S/Shri Anil Razdan and S.K. Roongta have
 joined HPCL Board as Part-time Non-Official Directors on January 10,
 2011. Shri P.V. Rajaraman and Prof. P.G. Apte, who joined HPCL Board on
 July 22, 2007, as Part-Time Non-Official Directors have ceased to be the
 Directors of the Corporation on completion of their tenure effective
 July 19, 2010.
 
 - Shri S. Roy Choudhury, Director (Marketing) was appointed as Chairman
 and Managing Director effective August 1, 2010. S/Shri Dr. V.  Vizia
 Saradhi (Director-Human Resources), B. Mukherjee (Director-Finance) and
 K. Murali (Director-refineries) continue as whole Time Directors of the
 Corporation.
 
 - Shri Arun Balakrishnan, Chairman and Managing Director, retired from
 the services of the Corporation effective July 31, 2010 on attaining
 the age of superannuation. The Board placed on records its sincere
 appreciation to Shri Balakrishnan for the valuable services rendered by
 him during his tenure as C&MD of the Corporation.
 
 As per the provisions of Section 256 of the Companies Act, 1956, Dr. V.
 Vizia Saradhi & Shri K. Murali, retire by rotation at next Annual
 General Meeting and are eligible for re-appointment.
 
 ACKNOWLEDGEMENTS
 
 The Directors gratefully acknowledge the valuable guidance and support
 extended by the Government of India, Ministry of Petroleum and Natural
 Gas, other Ministries, Petroleum Planning & Analysis Cell and the State
 Governments.
 
 The Directors also acknowledge the contribution made by the large
 number of dealers and distributors spread all over the country towards
 improving the service to our valued customers as well as for the
 overall performance of the Company.
 
 The employees of the Company have continued to display their total
 commitment towards the pursuit of excellence. Your Directors take this
 opportunity to place on record their appreciation for the valuable
 contribution made by the employees and look forward to their services
 with zeal and dedication in the years ahead to enable the Company to
 scale even greater heights.
 
 Your Directors are thankful to the shareholders for their faith and
 continued support in the endeavors of the Company.
 
                         For and on behalf of the Board of Directors
 
                         S. ROY CHOUDHURY
 
                         Chairman & Managing Director
 
 May 26, 2011