CPCL Annual Report 2007

Nagaraj & Co. Pvt. Ltd.
Continuous Ambient
Air Monitoring Station
Chennai Petroleum Corporation Limited
Corporate Information
Report to Shareholders
25
Report of the Statutory Auditors
47
Financial Information
53
ECS Mandate Format
87
Proxy / Attendance Slip
89
REGISTERED OFFICE
No.536, Anna Salai, Teynampet,
Chennai - 600 018
PRINCIPAL BANKER
State Bank of India
Corporate Accounts Group Branch
Greams Road, Chennai - 600 006
REFINERIES
Manali Refinery
Manali, Chennai - 600 068
AUDITORS
M/s. Padmanabhan Prakash & Co.
Chartered Accountants, Chennai
Cauvery Basin Refinery

Panangudi Village
Nagapattinam District, Tamil Nadu
M/s. B. Purushottam & Co.

Chartered Accountants, Chennai
Visit CPCL at
www.cpcl.co.in
REGISTRARS &
SHARE TRANSFER AGENTS
M/s. Karvy Computershare
Private Limited
Plot No. 17 to 24, Vithalrao Nagar,
Madhapur, Hyderabad - 500 081
G-1, Swathy Court,
22, Vijayaraghava Road,
T.Nagar, Chennai - 600 017
33/1, Venkataraman Street,
T. Nagar, Chennai - 600 017
1 Corporate Information.pmd
9/6/2007, 6:29 AM
9/6/2007, 6:29 AM
Corporate
Information
Board of Directors
Executives
Notice
Corporate Governance
10
9/6/2007, 6:29 AM
Board of Directors
Mr. S. Behuria
Chairman
Mr. K.K. Acharya

Managing Director
Mr. N.C. Sridharan

Director (Finance)
Mr. S. Chandrasekaran
Mr. A.M. Uplenchwar
Director (Technical)
Director (Pipelines)
Indian Oil Corporation Limited
(upto 31.07.2007)
Mr. K. Balachandran
Director (Operations)
Mr. B.N. Bankapur
Mr. L. Sabaretnam
Director (Refineries)
Indian Oil Corporation Limited
Chief Executive Officer,

ICL Sugars Limited
Mr. M. Vaezi
Mr. K. Suresh, I.A.S.
Director,
Naftiran Intertrade Company
Limited
Chairman, Chennai Port Trust
Mr. Mansoor Rad

Finance Director,
Naftiran Intertrade Company
Limited
Mr. Venkatraman Srinivasan

Senior Partner,
V. Sankar Aiyar & Co.,
Chartered Accountants
Prof. M.S. Ananth

Director, Indian Institute of Technology, (IIT),
Chennai.
Mr. K.L. Kumar

Former Chairman & Managing Director,
Kochi Refineries Limited
Mr. Ravi Capoor, I.A.S.

Executive Director, Petroleum
Conservation Research Association
Government of India
Mr. Pramod Nangia

Director (M),
Government of India,
Ministry of Petroleum & Natural Gas
9/6/2007, 6:29 AM
Executives
Mr. N. Sankaran
Chief Vigilance Officer
Mr. N.K. Natarajan

General Manager (Development and R & D)
Mr. R. Anand
General Manager (Engineering & Services)
Mr. V. Natarajan
General Manager (Finance)
Mr. V. Srinivasan
General Manager (Human Resources)
Mr. N.K. Rajamani

General Manager (Manufacturing)
Mr. N.V. Kalaivanan

General Manager (Cauvery Basin Refinery)
Mr. D. Selvaraj
General Manager (Maintenance)
Mr.K. Sankar
General Manager (Projects)
Mr. R. Chidambaram
General Manager (Logistics and Utilities)
Mr. M. Sankaranarayanan
Company Secretary
9/6/2007, 6:29 AM
Notice
st
Notice is hereby given that the 41 Annual General Meeting of the Shareholders of the Company will be held at
th
3.00 P.M. on Monday the 10 September 2007 at Kamaraj Arangam, 492, Anna Salai, Teynampet, Chennai-600 006 to
transact the following businesses:
ORDINARY BUSINESSES:
1.
st
To receive, consider and adopt the Audited Profit & Loss Account of the Company for the period from 1 April 2006
st
st
to 31 March 2007 and the Audited Balance Sheet as at 31 March 2007, together with the Directors Report and the
Auditors Report.
2.
To declare Dividend.
3.
To appoint a Director in place of Mr.Sarthak Behuria, who retires and being eligible, offers himself for re-appointment.
4.
To appoint a Director in place of Mr.N.C.Sridharan, who retires and being eligible, offers himself for re-appointment.
5.
To appoint a Director in place of Mr.S. Chandrasekaran, who retires and being eligible, offers himself for
re-appointment.
6.
To appoint a Director in place of Mr.L.Sabaretnam, who retires and being eligible, offers himself for re-appointment.
7.
To appoint a Director in place of Mr.B.N.Bankapur, who retires and being eligible, offers himself for re-appointment.
8.
To appoint a Director in place of Mr.Venkatraman Srinivasan, who retires and being eligible, offers himself for
re-appointment.
9.
To appoint a Director in place of Mr.K.Suresh, who retires and being eligible, offers himself for re-appointment.
10. To appoint a Director in place of Mr.K.L. Kumar, who retires and being eligible, offers himself for re-appointment.
11. To appoint a Director in place of Prof. M.S. Ananth, who retires and being eligible, offers himself for re-appointment.
12. To appoint a Director in place of Mr.Ravi Capoor, who retires and being eligible, offers himself for re-appointment.
13. To appoint a Director in place of Mr.Pramod Nangia, who retires and being eligible, offers himself for re-appointment.
SPECIAL BUSINESS:
14. APPOINTMENT OF MR.K. BALACHANDRAN AS A DIRECTOR
To consider and, if thought fit, to pass, with or without modifications, the following resolution as an Ordinary
Resolution:
RESOLVED that Mr.K. BALACHANDRAN be and is hereby appointed as a Director of the Company.
By order of the Board

M. SANKARANARAYANAN
Company Secretary
Date : 06.08.2007
Place : Chennai
9/6/2007, 6:29 AM
Notes:
1.
A member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to
attend and vote instead of himself.
2.
The proxy need not be a member of the Company.
3.
The instrument of Proxies, in order to be effective, must be lodged at the Registered Office of the Company
not later than 48 hours before the time of holding the meeting.
4.
Members/Proxies should bring their attendance slip, duly filled in, to the meeting.
5.
Members, who hold shares in the dematerialised form, are requested to bring their depository account
number for identification at the time of Annual General Meeting.
6.
An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of resolutions
set out under Special Business of the Notice is annexed.
7.
The Register of Members and the Share Transfer Books of the Company will remain closed from 28.8.2007
to 10.9.2007 (both days inclusive).
8.
Members are requested to immediately intimate any change in their addresses registered with the Company.
9.
Members are informed that the Company is extending the Electronic Clearing Service (ECS) facility to the
Members to enable them to receive their Dividend through electronic mode to their bank account. In order
to avail the ECS facility, the Members are requested to fill, sign and send the ECS mandate form, which
forms part of this Annual Report, alongwith a photocopy of the cheque issued by the Bank for verifying the
accuracy of the MICR Code Number, to:
(a)
M/s.Karvy Computershare Private Limited, Plot No.17 to 24, Vithalrao Nagar, Madhapur, Hyderabad
500 081 (in case of Members holding shares in physical mode).
(b)
the Depository Participants concerned (in case of Members holding shares in electronic mode/
dematerialized form).
10.
The shares of the company are compulsorily traded in dematerialized form and therefore, the shareholders
are requested to dematerialize their shares to facilitate trading in CPCL shares.
11.
As per the provisions of the Companies Act, 1956, shareholders are entitled to make nomination in respect
of shares held by them in physical form. Nomination form can be downloaded from the website of the
company at www.cpcl.co.in.
12.
The Board of Directors have recommended a Dividend of 120% for the year 2006-2007. Dividend, upon its
declaration at the Meeting, will be paid in respect of physical shares to those Members, whose names
appear in the Register of Members of the Company as on 10 th September 2007 and in respect of electronic
shares, to those members, whose names appear in the Beneficial List to be furnished by the depositories
to the Company for this purpose.
13.
A brief Resume of the Directors of the Company, seeking appointment/re-appointment at this Annual General
Meeting, and their expertise in specific functional areas, is given as part of the Explanatory Statement.
14.
Inspection of Documents:- The relevant documents are available for inspection by the members at the
Registered Office of the Company at any time during the working hours till the date of the meeting.
9/6/2007, 6:29 AM
Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956
Item No.14
Mr. K. Balachandran was appointed as an Additional Director with effect from 01.10.2006. As per the provisions of
Section 260 of Companies Act, 1956, Mr.K.Balachandran will hold office only upto the date of the forty first Annual
General Meeting.
A Notice under Section 257 of the Companies Act, 1956 has been received proposing the appointment of
Mr.K. Balachandran as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.K.Balachandran.
BRIEF RESUME OF THE DIRECTORS OF THE COMPANY, SEEKING APPOINTMENT/RE-APPOINTMENT AT THE
41st ANNUAL GENERAL MEETING
1.
Mr.Sarthak Behuria was appointed on the Board effective 01.03.2005. He is an alumnus of St. Stephens College,
Delhi and the Indian Institute of Management (IIM), Ahmedabad. He has more than three decades of experience
in the field of refining and marketing. He joined Burma Shell in 1973 before he was absorbed in BPCL, where he
served across the country, handling key portfolios in Supply and Distribution, Sales, Industrial Relations and
Downstream Infrastructure. He took over as Director (Marketing) of BPCL in 1998, as CMD of BPCL in July 2002
and Chairman of IOCL in March 2005.
Mr.Sarthak Behuria is presently the Chairman of Indian Oil Corporation Limited, Bongaigaon Refinery and
Petrochemicals Limited, IndianOil Tanking Limited, Lanka-IOC Limited and IndianOil Skytanking Limited.
2.
Mr.N.C.Sridharan was appointed on the Board effective 05.03.2004, as Director (Finance). He is a Chartered Accountant
and an Associate Member of the Institute of Company Secretaries of India. He has three decades of experience in
Engineering, Chemical and Pharmaceuticals, Fibre, Cement, Cotton Spinning and Software industries in Corporate
Finance, Treasury, Accounts, Loans Syndication, Project Finance, Commercial Taxation Direct & Indirect and Secretarial
& Legal. Prior to his appointment as Director (Finance), he was General Manager (Finance) in CPCL.
Mr.N.C.Sridharan is also a Director on the Board of Indian Additives Limited and National Aromatics and
Petrochemicals Corporation Limited. He is a member of the Shareholders/ Investors Grievance Committee and
Board Projects Sub-Committee of CPCL and Audit Committee of Indian Additives Limited.
3.
Mr.S.Chandrasekaran was appointed on the Board effective 2.7.2006, as Director (Technical). He holds B.Tech
Degree in Chemical Engineering from the Regional Engineering College, Trichy. Prior to joining CPCL in 1981,
he had worked in Fertilizers Corporation of India Limited for six years. He has more than two decades of
experience in the areas of Operations, Projects and Development, which includes two years as Head of Operations
Section in KNPC, Kuwait. Prior to his appointment as Director (Technical), he was General Manager (i/c) in CPCL.
Mr. S. Chandrasekaran is also a Director on the Board of National Aromatics and Petrochemicals Corporation Limited.
He is a Member of the Shareholders / Investors Grievance Committee and Board Projects Sub-Committee of CPCL.
4.
Mr.L.Sabaretnam was appointed on the Board effective 28.02.2002. He is a Post-Graduate in Business

Administration from the University of Madras. He is the Chief Executive Officer of ICL Sugars Limited.
Mr.L.Sabaretnam is the Chairman of Oriental Solutions Private Limited, Oriental Billing Services Private Limited,
Archi Structural Constructions India Pvt. Ltd., and LMS Builders & Engineers Pvt. Ltd. He is a Director of Biosynth
Life Sciences India Limited and Instream Solutions Limited.
He is an Advisor of India Cements Limited and Trustee of T.S.Narayanaswamy College of Arts and Science. He is
a member of various business associations and social bodies.
Mr.L.Sabaretnam is the Chairman of the Audit Committee, Shareholders/Investors Grievance Committee and
Board Projects Sub- Committee of CPCL.
5.
Mr.B.N.Bankapur was appointed on the Board effective 17.01.2005. He is a Chemical Engineer from National
Institute of Technology, University of Mysore. He has three decades of experience in different areas of Refinery
Technology. He has also gained valuable experience in different activities like monitoring / execution and
commissioning of Indias first riser type FCC Project, trouble shooting, process safety and pollution control.
Mr.B.N.Bankapur is presently the Director (Refineries) of Indian Oil Corporation Limited. He is also a Director on
the Board of Engineers India Limited. He is a Member of the Board Projects Sub-Committee of CPCL. He is also
a Member of the Audit Committee of Engineers India Limited.
9/6/2007, 6:29 AM

6.
Mr.Venkatraman Srinivasan was appointed on the Board effective 15.4.2005. He is a Commerce Graduate and
Fellow Member of the Institute of Chartered Accountants of India. He is a Senior Partner of M/s.V.Sankar Aiyar & Co.,
Chartered Accountants, Mumbai, who are the Statutory Auditors of many leading corporate houses in the country.
Mr.Venkatraman Srinivasan is also a Director on the Board of Karanja Infrastructure Pvt. Ltd. and Credit Analysis
and Research Limited (CARE). He is a Member of the Audit Committee of CPCL. He is also the Chairman of the
Audit Committee, Investment Committee, ESOP Compensation Committee and Remuneration Committee of
CARE. He is also a Member of the Nomination Committee of CARE.
7.
Mr.K.Suresh was appointed on the Board effective 19.10.2004. He holds a Masters Degree in Fisheries Science
from the College of Fisheries, University of Agricultural Sciences, Bangalore. He also holds a Masters Degree in
Science from University of Manchester, Institute of Science and Technology, Manchester, U.K. He belongs to the
1982 batch of Indian Administrative Service. He is currently the Chairman, Chennai Port Trust. He has more than
two decades of experience in different Departments of Government of Madhya Pradesh.
Mr.K.Suresh is also a Director on the Board of Ennore Port Limited and Sethusamudram Corporation Limited. He
is the Chairman of the Audit Committee and Member of the Share Transfer Committee of Ennore Port Limited. He
is also a Member of the Audit Committee and Recruitment Committee of Sethusamudram Corporation Limited.
8.
Mr.K.L.Kumar was appointed on the Board effective 31.12.2005. He holds a Bachelors Degree in Mechanical
Engineering. He has 15 years of experience in Engineering Consultancy Services in various organizations. He
has also served 22 years in Kochi Refineries Limited, where he joined as DGM (Technical Services) and elevated
to the post of CMD. He served as CMD of Kochi Refineries Limited for 11 years.
Mr.K.L.Kumar is also a Director on the Board of Kerala Chemicals and Proteins Limited. He is a Member of the
Audit Committee of CPCL. He is also a Member of Audit Committee, Shareholders/Investors Grievance Committee
and Remuneration Committee of Kerala Chemicals and Proteins Limited.
9.
Prof.M.S.Ananth was appointed on the Board effective 31.12.2005. He holds a B.Tech and a Masters Degree in
Engineering and Ph.D from Florida University. Presently, he is Director, Indian Institute of Technology, Chennai.
He joined as Assistant Professor at IIT, Chennai and elevated to the post of Director. He worked as a Visiting
Professor in various Universities all over the World. He is also a Fellow Member in various Professional Bodies.
He is also a Director of Neyveli Lignite Corporation Limited and Medlab Asia. He is also the Chairman of the Audit
Committee of Neyveli Lignite Corporation Limited.
10.
Mr.Ravi Capoor was appointed on the Board effective 27.2.2006. He belongs to Indian Administrative Service
(IAS). He has more than two decades of multi-sectoral experience in the areas of Energy, Handicrafts industry,
Tourism development, Education, etc. Presently, he is Executive Director, Petroleum Conservation Research
Association, Government of India.
Mr.Ravi Capoor is also a Director on the Board of Engineers India Limited.
11.
Mr.Pramod Nangia was appointed on the Board effective 27.2.2006. He is a Bachelor in Economics and Laws
from the University of Delhi. He belongs to Indian Revenue Service (IRS). He joined IRS in 1985 and over the
years, has specialized in the administration and functioning of direct taxes in India. Presently, he is Director
(Marketing) in the Ministry of Petroleum and Natural Gas, Government of India.
12.
Mr. K. Balachandran was appointed on the Board effective 01.10.2006. He is a graduate in Chemical Engineering
from Government Engineering College, Trichur. He has a Post Graduate Diploma in Management from the
Management Development Institute, Gurgaon under the National Management Programme. He joined Indian Oil
Corporation Limited in 1977 as a Graduate Engineer Trainee. He has worked through various levels in the
Refineries of IOCL at Gujarat and Barauni, handling assignments in Operations, Technical Services and Project
Commissioning. He has also served in the Refineries Division Headquarters of IOCL.
Mr. K. Balachandran has been trained in Petroleum Refining Engineering at the Indian Institute of Petroleum,
Dehradun and in Refinery Planning and Economics at the College of Petroleum Studies, Oxford.
Prior to his appointment as Director (Operations), he was General Manager (Technical) at Gujarat Refinery of IOCL.
Mr. K. Balachandran is also a Director on the Board of Indian Additives Limited. He is a Member of the Audit
Committee of Indian Additives Ltd.
By order of the Board
M.SANKARANARAYANAN
Company Secretary
Date : 06.08.2007
Place : Chennai
9/6/2007, 6:29 AM
Corporate Governance
1.0
COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance is a systemic process by which Companies are managed to enhance their wealth
creating capacity. CPCL is of the view that the Governance process should ensure that various resources which
are utilized by the Company meets not only the aspirations of the shareholders but also the expectations of the
society.
Trusteeship, transparency, empowerment, accountability and ethical corporate citizenship remain the core
principles of the Corporate Governance philosophy of CPCL. CPCL is firm in its belief that the practice of each
of the above principles will create the right corporate culture that fulfills the true purpose of Corporate Governance.
CPCL always strives to adopt best Corporate Governance practices and in recognition of this fact, CPCL was
shortlisted as one of the top twenty five companies, adopting good Corporate Governance Practices by the
Institute of Company Secretaries of India for the year 2006 out of 200 companies.
CPCL is also one among the 17 finalists, out of 77 participants in the Golden Peacock Award for Excellence in
Corporate Governance for the year 2006 organized by the Institute of Directors, New Delhi.
2.0
GOVERNANCE STRUCTURE
2.1 The practice of Corporate Governance in CPCL is at the following three levels which are interlinked :
a) BOARD OF DIRECTORS :
The Board of Directors of the Company comprises of professionals with experience in different
functional areas, representatives from Indian Oil Corporation Limited, the holding Company and from
National Iranian Oil Company, the foreign collaborator and eminent personalities with expertise in
technology, Finance and Industry as Independent Directors.
The primary role of the Board is to provide strategic guidance and supervision. The Board exercises
appropriate control to ensure that the Company is managed in a professional manner to fulfill the
aspirations of all the stakeholders.
b) EXECUTIVE COMMITTEE :
The Executive Committee of the Company comprises of Managing Director, Functional Directors,
Chief Vigilance Officer and Company Secretary. This Executive Committee meets once in 15 days
to review the performance of the Company.
c)
MANAGEMENT COMMITTEE :
The Management Committee of the Company comprises of all the Heads of Department, which
meets once in a month to review the performance of the Company and share key information.
3.0
BOARD OF DIRECTORS
3.1
The Board of Directors of CPCL consisted of sixteen Directors as on 31.03.2007.
3.2
The break-up of the total composition of the Board as on 31.3.2007 is as follows:

3.2.1
One Non-Executive Chairman, who is the Chairman of Indian Oil Corporation Limited (the
Holding Company).
3.2.2
Four whole-time Functional Directors, viz., Managing Director, Director (Technical), Director
(Finance) and Director (Operations).
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3.2.3
Director (Pipelines) and Director (Refineries) of Indian Oil Corporation Limited.
3.2.4
One Director, who is the Chairman, Chennai Port Trust.
3.2.5
Two Directors nominated by National Iranian Oil Company, one of the promoters, in terms of the
Formation Agreement.
3.2.6
Two Directors from the Administrative Ministry, viz., Ministry of Petroleum and Natural Gas. **
3.2.7
Four non-official Directors.
**
One of the Directors from MoP&NG, viz., Mr. Ravi Capoor has been appointed as Executive
Director, Petroleum Conservation Research Association (PCRA) with effect from 17.04.2007 as
per the Communication received from MoP&NG.
3.3
Out of the total number of sixteen Directors as on 31.3.2007, twelve Directors were Non-Executive
Directors. The Company has a Non-Executive Chairman. The number of Independent Directors, in such
a case, needs to be one-third of the total number of Directors. With the total number of non-executive
independent Directors being five as on 31.3.2007, the Company met the requirement of minimum
number of Independent Directors as stipulated in the Listing Agreement.
3.4
Conduct of Board Meetings

The Board Meetings are governed by a structured agenda. All the Board agenda items alongwith
detailed agenda notes are circulated atleast one week in advance to enable the Board to take informed
decisions. The action taken report in respect of decisions taken at the previous Board Meetings are
placed before the subsequent meetings of the Board for effective follow-up.
3.5
Information placed before the Board

Apart from the items that are required to be placed before the Board under the statute for approval and
also as per the requirements of the Listing Agreement, items like Physical performance, Financial
performance including Investment of surplus funds, borrowal of funds, Cash Flow Statement, Capital
Budgets, Revenue Budgets, manpower position, etc. are placed for review by the Board.
3.6
Six Board Meetings were held during the year 2006-07. The dates on which the Board Meetings were
held are given below:
Board Meeting No.
3.7
Board Meeting Date
243
14.05.2006
244
25.07.2006
245
25.08.2006
246
23.10.2006
247
20.01.2007
248
29.03.2007
Details relating to:

(a)
Attendance of Directors at the Board Meetings held during the financial year April 2006 to March
2007 and at the last Annual General Meeting held on 25.08.2006,
(b)
Number of other directorships, and
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(c)
Number of memberships / chairmanships held by the Directors in the committees of various companies,
are given below:
Name of the Directors
No. of Board
Meetings
attended
Whether
Other
Committee
Committee
attended last Directorships Memberships Chairmanships
AGM?
Mr.S.Behuria
Yes
Mr. K.K. Acharya
Yes
Mr.N.C.Sridharan
Yes
Mr.R.Sankaran
(Refer Note 1)
(Refer Note 2)
Yes
Mr.A.Kasturi Rangan
(Refer Note 3)
Yes
Mr. K. Balachandran
(Refer Note 4)
NA
Mr.A.M.Uplenchwar
Yes
Mr.B.N.Bankapur
No
Mr.L.Sabaretnam
Yes
Mr.K.Suresh
Yes
Yes
Mr. K.L. Kumar
Yes
Prof. M.S. Ananth
No
Mr. Ravi Capoor
No
Mr. Pramod Nangia
Yes
Mr. Mansoor Rad or his alternate Director
Yes
Mr.M.Vaezi or his alternate Director
Yes
Notes:1.
Mr.R. Sankaran, Director (Technical), ceased to be a Director on attaining the age of superannuation effective
30.04.2006. No Board Meetings were held during his tenure, in the financial year 2006-07.
2.
Mr. S. Chandrasekaran was appointed as Director (Technical) effective 02.07.2006. After his appointment, five
Board Meetings were held in the Financial year 2006-07.
3.
Mr. A. Kasturi Rangan, Director (Operations), ceased to be a Director on attaining the age of superannuation
effective 30.09.2006. During his tenure, three Board Meetings were held in the financial year 2006-07.
4.
Mr. K. Balachandran, General Manager (Technical Services), Indian Oil Corporation Limited was appointed as
Director (Operations) effective 01.10.2006. After his appointment, three Board Meetings were held in the
financial year 2006-07.
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4.0
4.3
COMMITTEES OF THE BOARD

4.1
Currently, there are three Sub-Committees of the Board, viz., Audit Committee, Shareholders/ Investors
Grievance Committee and Projects Sub-Committee.
4.2
The terms of reference of the above Committees are determined by the Board from time to time. Meetings
of each Committee are convened as and when necessary. The minutes of each Committee after approval
by the concerned Chairman are circulated to the members of the Committee for information and also to
the concerned officials for necessary action. The approved minutes are also placed before the meeting
of the Board for information.
AUDIT COMMITTEE
4.3.1 Composition of the Committee as on 31.3.2007:1.
Mr.L.Sabaretnam, Chief Executive Officer, ICL Sugars Limited, Chennai.
2.
Mr.Mansoor Rad, Financial Director, Naftiran Intertrade Company Limited or his Alternate Director.
3.
Mr. Venkatraman Srinivasan, Senior Partner, M/s. V. Sankar Aiyar & Co., Chartered Accountants,
Mumbai.
4.
Mr.K.L. Kumar, Former Chairman and Managing Director, Kochi Refineries Limited, Kochi
Note : Mr. Mansoor Rad, Financial Director, Naftiran Intertrade Company Limited, Tehran, Iran was inducted as
a member of the Audit Committee in place of Mr. M.B. Samiei Khonsari effective 14.05.2006.
Mr.L.Sabaretnam is the Chairman of the Committee.
4.3.2 Terms and reference of Audit Committee:The Audit Committee has been vested with the following powers and functions:
4.3.3 POWERS
1.
To investigate any activity within its terms of reference;
2.
To seek information from any employee;
3.
To obtain outside legal or other professional advice;
4.
To secure attendance of outsiders with relevant expertise, if it considers necessary.
5.
To have full access to information contained in the records of the company and external professional
advice, if necessary.
4.3.4 FUNCTIONS
1.
Oversight of the Companys financial reporting process and the disclosure of its financial information
to ensure that the financial statement is correct, sufficient and credible.
2.
Recommending to the Board, the appointment, re-appointment and, if required, the replacement or
removal of the statutory auditor and the fixation of audit fees.
3.
Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
4.
Reviewing with the management, the annual financial statements before submission to the Board for
approval, with particular reference to :
a)
Matters required to be included in the Directors Responsibility Statement to be included in the

Boards Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956.
b)
Changes, if any, in accounting policies and practices and reasons for the same.
c)
Major accounting entries involving estimates based on the exercise of judgement by management.
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d)
Significant adjustments made in the financial statements arising out of audit findings.
e)
Compliance with listing and other legal requirements relating to financial statements.
f)
Disclosure of any related party transactions.
g)
Qualifications in draft audit report.
5.
Reviewing with the management, the quarterly financial statements before submission to the Board
for approval.
6.
Reviewing with the management, the performance of statutory and internal auditors, adequacy of the
internal control systems.
7.
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit.
8.
Discussion with internal auditors any significant findings and follow up thereon.
9.
Reviewing the findings of any internal investigations by the internal auditors into matters where there
is suspected fraud or irregularity or a failure of internal control systems of a material nature and
reporting the matter to the Board.
10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit
as well as post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors.
12. To review the functioning of the Whistle-Blower Mechanism, in case the same is existing.
13. Any other functions that may be assigned by the Board to the Audit Committee from time to time.
4.3.5 The first Audit Committee Meeting for the financial year 2006-07 was held on 13.05.2006. Mr.L.Sabaretnam
and Mr.Venkatraman Srinivasan were present. Leave of absence was granted to Mr. K.L. Kumar.
4.3.6 The second meeting was held on 25.07.2006. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and
Mr.Mansoor Rad were present. Leave of Absence was granted to Mr. K.L. Kumar.
4.3.7 The third meeting was held on 23.10.2006. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan,
Mr. K.L. Kumar and Mr.Mansoor Rad were present.
4.3.8 The fourth meeting was held on 20.01.2007. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and
Mr.Mansoor Rad were present. Leave of Absence was granted to Mr. K.L. Kumar.
4.3.9 The fifth meeting was held on 23.02.2007. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and
Mr.K.L. Kumar were present. Leave of absence was granted to Mr. Mansoor Rad.
4.4
REMUNERATION COMMITTEE
4.4.1 The need for a Remuneration Committee is not felt by the Company in view of the fact that the Company
is a Government Company as per Section 617 of the Companies Act, 1956. The Remuneration of the
whole time Functional Directors are fixed by the Government of India.
4.4.2 The details of Remuneration paid to all the Functional Directors are given below:
The remuneration of the whole time Functional Directors include basic salary, allowances and perquisites
as determined by the Government of India. Also, they are entitled to provident fund and superannuation
contributions as per the rules of the Company.
14
14
9/6/2007, 6:29 AM
The gross value of the fixed component of the remuneration, as explained above, paid to the whole time
functional Directors, during the financial year 2006-07 is given below:
(Rs. in Lakhs)
Name of the Director
Salaries &
Allowances
Contribution to
Provident Fund
Contribution to
Superannuation
Fund and Gratuity
Other
Benefits
Total
Mr.K.K. Acharya,
Managing Director
11.44
0.86
0.29
12.59
Mr. N.C. Sridharan,

Director (Finance)
7.59
0.58
0.59
1.14
9.90
Mr.R.Sankaran,
(Refer Note 1)
4.57
0.06
0.06
0.02
4.71
(Refer Note 2)
9.66
0.77
0.72
0.17
11.32
Mr.A.Kasturi Rangan,
(Refer Note 3)
8.74
0.75
0.37
0.08
9.94
Mr. K. Balachandran
(Refer Note 4)
4.87
0.32
0.00
0.05
5.24
Note 1
Details given are for part of the year only since Mr. R.Sankaran, superannuated on 30.04.2006.
Note 2
Details given are for part of the year only since Mr.S. Chandrasekaran assumed charge as
Director (Technical) effective 02.07.2006.
Note 3
Details given are for part of the year only since Mr. A. Kasturi Rangan superannuated on 30.09.2006.
Note 4
Details given are for part of the year only since Mr. K. Balachandran assumed charge as
Director (Operations) effective 01.10.2006.
4.4.3
The whole time functional Directors are appointed for a period of five years or upto the date of
superannuation, whichever event occurs earlier.
4.4.4
No stock option scheme is prevalent in the Company.
4.4.5
The Company pays sitting fees of Rs.10,000/- for each meeting of the Board/Sub-Committee of the
Board, to each of the Non-Executive Directors, who are not the full-time employees of the shareholders.
The details of the sitting fees paid during the financial year are given below:
Mr.L.Sabaretnam
Rs. 1,60,000/-
Mr.K.Suresh
Rs. 25,000/-
Rs. 90,000/-
Mr. K.L. Kumar
Rs. 50,000/-
Prof. M.S. Ananth
Rs. 30,000/-
Note : The amount of sitting fee has been increased from Rs. 5000/- to Rs. 10000/- by the Board of Directors of the
Company at the 244th Board Meeting held on 25.07.2006 for attending each Meeting of the Board / SubCommittee of the Board.
15
15
9/6/2007, 6:29 AM
4.4.6
Criteria for payment to Non-executive Directors :

As per Article 90 A of the Articles of Association of the Company, the remuneration payable to the
Directors of the Company, other than full-time Directors of the Company or Full-time employees of the
Shareholders for attendance at Meetings of Board of Directors or any Committee thereof, shall be fixed
by the Board of Directors of the Company from time to time.
In line with the above article, the Board of Directors of the Company at the 220th Meeting held on
28.10.2002 has fixed a sum of Rs. 5000/- as Sitting fees to certain categories of non-executive Directors
who are not the full-time employees of the shareholders of the Company for attendance at every
meeting of the Board of Directors or any Committee thereof.
The above sum of Rs. 5000/- has been increased to Rs.10000/- by the Board of Directors of the
Company at the 244th Board Meeting held on 25.07.2006.
4.4.7
4.4.8
Shares held by Non-executive Directors:

Mr. S. Behuria
500 shares
Mr. L. Sabaretnam
50 shares
Compliance with the Code of Conduct for Board Members and other Senior Management Personnel :
As required under Clause 49 I (D) (ii) of the revised Clause 49 of the Listing Agreement, a declaration
signed by the Managing Director of the Company that all the Board Members and Senior Management
personnel have fully complied with the provisions of the Code of Conduct for Board Members and
Senior Management Personnel during the financial year ending 31.03.2007 is placed below:
This is to declare that all the Board Members and Senior Management personnel of the Company
have furnished the Annual Compliance Report affirming that they have fully complied with the
provisions of the Code of Conduct for the Board Members and the Senior Management Personnel
of the Company during the financial year ended 31.03.2007 and the same was informed to the
Board at the 249th Meeting held on 11.05.2007.
Place : Chennai
Date : 21.05.2007
4.4.9
K.K. ACHARYA
Managing Director
Code of Conduct for prevention of Insider Trading in dealing with the Securities of CPCL :
The Board of Directors of the Company have formulated the Code of Conduct for prevention of Insider
Trading in dealing with the securities of CPCL. The code, inter-alia, prohibits purchase / sale of shares
of the Company by the designated employees and Directors while in possession of unpublished price
sensitive information in relation to the Company.
The Code is available in the Intranet of the Company.
4.5
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE

4.5.1
Composition of the Committee as on 31.3.2007:1. Mr.L.Sabaretnam, CEO, ICL Sugars Limited

2. Mr.N.C.Sridharan, Director (Finance)
3. Mr.S.Chandrasekaran, Director (Technical)
4. Mr.M.Vaezi, Director, Naftiran Intertrade Company Ltd.
Mr. R. Sankaran, Director (Technical) was a member of the Committee till 30.04.2006 and
Mr. S.Chandrasekaran, Director (Technical) was inducted as member of the Committee in his place.
16
16
9/6/2007, 6:29 AM
4.5.2
The first meeting for the financial year 2006-07 was held on 25.07.2006. Mr.L.Sabaretnam,
Mr.S.Chandrasekaran, Mr.N.C.Sridharan and Mr.Mansoor Rad, Alternate member for Mr. M. Vaezi
attended the Meeting.
4.5.3
The second meeting was held on 20.01.2007. Mr.L .Sabaretnam, Mr.S. Chandrasekaran,
Mr.N.C.Sridharan and Mr.Mansoor Rad, Alternate Member for Mr.M.Vaezi attended the Meeting.
4.5.4
Name and designation of Compliance Officer:
Mr. V. Srinivasan, General Manager (HR) & Company Secretary or in his absence
Mr. M. Sankaranarayanan, Deputy Secretary (upto 17.05.2007).
Mr. M. Sankaranarayanan, Company Secretary or in his absence Mr. P. Shankar, Assistant Secretary
(from 18.05.2007).
4.5.5 Number of shareholders complaints received during the year 2006-07, Number not solved to the
satisfaction of shareholders and Number of pending complaints for the period from 01.04.2006 to
31.03.2007 are given below:
Sl.
No
Nature of
complaints
Opening
Balance
as on
1.4.2006
Received
during the
Financial
year 2006-07
Total
Solved
Pending
during the
as on
Financial 31.3.2007
year 2006-07
Non-receipt of dividend warrants
284
284
284
Non-receipt of refund orders
18
18
18
Non-receipt of share certificates
147
147
147
Non-receipt of stickers against payment

of allotment / call money
17
17
17
Non-receipt of confirmation of Demat

requests
37
37
37
Non receipt of Annual Reports
19
19
19
Non-receipt of Duplicate Share

Certificates
60
60
60
Total
582
582
582
4.6
BOARDS PROJECTS SUB-COMMITTEE (BPSC)

4.6.1 The Composition of BPSC as on 31.03.2007 is as follows:
1. Mr. L. Sabaretnam, CEO, ICL Sugars Limited
2. Mr. A.M. Uplenchwar, Director (Pipelines), IOC
3. Mr. B.N. Bankapur, Director (Refineries), IOC
The above Committee was reconstituted by the Board at the 247th Board Meeting held on 20.01.2007 by
induction of Director (Finance) and the concerned Functional Directors, viz., Director (Technical) and
Director (Operations) as additional members.
4.6.2 Terms of Reference
(a) To approve Capital investment upto Rs. 100 crore and pre-feasibility expenses upto Rs. 20 crore.
(b) To recommend Investment approval beyond Rs. 100 crore to the Board of CPCL for consideration.
17
17
9/6/2007, 6:29 AM
4.6.3 The first Meeting in the financial year 2006-07 was held on 25.07.2006. Mr.L.Sabaretnam,
Mr. A.M. Uplenchwar and Mr. B.N. Bankapur were present.
4.6.4 The second Meeting in the financial year 2006-07 was held on 25.08.2006. Mr.L.Sabaretnam and
Mr.A.M.Uplenchwar were present. Leave of absence was granted to Mr. B.N. Bankapur.
4.6.5 The third Meeting in the financial year 2006-07 was held on 23.10.2006. Mr.L.Sabaretnam,
4.6.6 The fourth Meeting in the financial year 2006-07 was held on 16.12.2006. Mr.L.Sabaretnam,
5.0
GENERAL BODY MEETING

5.1
5.2
Location and time, where last three Annual General Meetings were held and number of special resolutions
passed:
AGM Date
Location
Time
No. of Special
Resolutions passed
23.08.2004
Kamaraj Arangam,
492, Anna Salai,
Chennai-600 006
03.00 pm
Nil
24.08.2005
-do-
03.00 pm
Nil
25.08.2006
-do-
03.00 pm
Nil
Postal Ballot Details

Postal ballot was not conducted so far in the Company.
6.0
DISCLOSURES
6.1
Disclosures on materially significant related party transactions that may have potential conflict with the
interest of the Company at large:
Necessary disclosures under the Accounting Standards 18 relating to the Related Party transactions
form part of the Accounts for the year 2006-07.
6.2
Details of non-compliance by the Company, penalties, strictures imposed on the company by Stock
Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last
three years: - Nil
6.3
Disclosure of Accounting treatment

In the preparation of financial statement for the year 2006-07, the Company has not adopted an accounting
treatment which is different from that prescribed in the Accounting Standard, in respect of any transaction.
6.4
Details of compliance with certain clauses of Revised Clause 49 of the Listing Agreement
6.4.1 Compliance of laws applicable to the Company :
As per Clause 49 I (C) (iii), the Board shall periodically review compliance reports of all laws
applicable to the company, prepared by the company as well as steps taken by the company to
rectify instances of non-compliances.
Accordingly, a system had been developed and institutionalized to ensure compliance with all
laws applicable to the Company.
The Board reviewed the Compliance Report of all laws applicable to the Company for the half
year ended 30.09.2006 at the meeting held on 23.10.2006.
18
18
9/6/2007, 6:29 AM
6.4.2
Risk Assessment and Minimisation Procedures :

As per Clause 49 IV (C), the Company shall lay down procedures to inform Board members
about the risk assessment and minimization procedures. These procedures shall be
periodically reviewed to ensure that executive management controls risk through means of
a properly defined framework.
Accordingly, a system had been developed and procedures have been laid down on risk
assessment and minimization.
Pursuant to the recommendations of the Committee constituted by the Company to lay down
procedures for Risk Assessment and Minimization, the Company received reports relating
to various risks such as Crude Oil Sourcing, Pricing, Security, Risk due to nature of business,
Project Implementation Risks, Human Resources Risks and Legal & Litigation Risks. These
reports were reviewed by the Executive Committee of the Company. The Board of Directors
of the Company also reviewed the salient features of these reports at the 248 th Board Meeting
held on 29.03.2007.
6.4.3
Internal Control Systems - CEO / CFO Certification :

As per Clause 49 V, the CEO / CFO of the Company shall certify to the Board regarding the
effectiveness of the internal control systems for financial reporting.
Systems have been developed to review the internal controls and to institutionalize the
system of internal controls in the Company to enable the Managing Director and Director
(Finance) certify to Board regarding the effectiveness of Internal Control System for financial
reporting.
The required certification from the Managing Director and Director (Finance) being the CEO
and CFO respectively was obtained and placed before the Board of Directors at the 249 th
meeting held on 11.05.2007.
6.4.4
Certificate of compliance with the requirements of Clause 49 of the Listing Agreement :

Clause 49 of the Listing Agreement requires every listed Company to obtain a certificate
from either the auditors of the Company or a Practicing Company Secretary regarding
compliance of conditions of Corporate Governance and annex the certificate with the Directors
Report, which is sent annually to all the shareholders.
The Company has obtained a
certificate to this effect from the Auditors of the Company and the same is given as annexure
to the Directors Report.
7.0
MEANS OF COMMUNICATION
7.1
The Board of Directors of the Company takes on record the Un-audited Financial Results in the prescribed
form within one month of the close of every quarter and announces the results to all the Listed Stock
Exchanges. The same are also published, within 48 hours in the following newspapers normally:
The Hindu, New Indian Express, The Economic Times, Financial Express, News Today and
Makkal Kural (Tamil).
7.2
The Quarterly Results, Half yearly Results and the Annual Results are placed on the Companys web site
at www.cpcl.co.in. Press Releases are given on important occasions. They are also placed on Companys
website.
7.3
Management Discussion and Analysis Report forms part of the Directors Report 2006-07.
19
19
9/6/2007, 6:29 AM
8.0
GENERAL SHAREHOLDER INFORMATION

1.
41st Annual General Meeting:Date & Time
10.09.2007 ; 3.00 PM
Venue
Kamaraj Arangam, No.492, Anna Salai,Chennai 600 006
2.
Financial Calendar
April March
3.
Book Closure Date
28.08.2007 to 10.09.2007 (both days inclusive)
4.
Dividend despatch date
Within 30 days from the date of declaration.
5.
Listing on Stock Exchanges
The Shares of the Company are listed on the Stock Exchanges at

Chennai, Mumbai and National Stock Exchange of India Limited.
The listing fees for the year 2006-07 has been paid.
6.
Stock Code
Madras Stock Exchange Ltd.-CPCL / BSE 500110
Trading Symbol in NSE
CHENN PETRO
CHENNAI PET
INE 178A 01016
Trading Symbol in Madras

Stock Exchange
ISIN No. for dematerialized
shares
7.
Market Price Data High, Low and Close during each month in the last Financial Year (in Rupees)
National Stock Exchange
Month
Bombay Stock Exchange
High
Low
Closing
High
Low
Closing
Apr. 2006
264.40
201.00
241.60
263.90
223.00
240.20
May 2006
271.90
208.60
219.95
273.65
209.00
219.55
June 2006
227.90
135.10
178.95
222.00
142.50
178.20
July 2006
189.65
159.50
181.80
190.00
160.00
181.55
Aug. 2006
222.00
174.60
196.25
221.70
179.00
196.40
Sep. 2006
240.00
196.50
207.25
239.90
196.05
207.35
Oct. 2006
212.90
166.05
202.30
212.50
166.00
201.35
Nov. 2006
226.00
196.35
220.75
228.90
197.15
220.95
Dec. 2006
223.00
195.15
217.95
222.00
198.00
216.30
Jan. 2007
255.00
204.20
214.35
236.00
207.10
213.55
Feb. 2007
216.75
180.00
193.40
217.00
181.00
193.35
Mar. 2007
195.05
170.00
187.70
199.00
173.25
187.90
20
20
9/6/2007, 6:29 AM

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

National Stock Exchange
Month
Closing
Price(Rs.)
Bombay Stock Exchange
Index
Closing
Price(Rs.)
Index
Apr. 2006
241.60
3557.60
240.20
12042.56
May 2006
219.95
3071.05
219.55
10398.61
June 2006
178.95
3128.20
178.20
10609.25
July 2006
181.80
3143.20
181.55
10743.88
Aug. 2006
196.25
3413.90
196.40
11699.05
Sep. 2006
207.25
3588.40
207.35
12454.42
Oct. 2006
202.30
3744.10
201.35
12961.90
Nov. 2006
220.75
3954.50
220.95
13696.31
Dec. 2006
217.95
3966.04
216.30
13786.91
Jan. 2007
214.35
4082.70
213.55
14090.92
Feb. 2007
193.40
3745.30
193.35
12938.09
Mar. 2007
187.70
3821.55
187.90
13072.10
9.
REGISTRARS AND SHARE TRANSFER AGENTS:

(a) Hyderabad Office:
M/s. Karvy Computershare Private Limited
Plot No. 17 to 24, Vithalrao Nagar Madhapur,
Hyderabad 500 081 Phone : 040 2342 0818 / 2342 0828 Fax : 040 - 2342 0814
E-mail: mohsin@karvy.com, madhusudhan@karvy.com, mailmanager@karvy.com
(b) Chennai Offices:
9.0
(i)
No.33/1, Venkataraman Street, T.Nagar, Chennai 600 017.

Phone : 2815 1793 & 2815 4781 Fax : 2815 1794
(ii)
G-1, Swathy Court 22, Vijayaraghava Road, T. Nagar, Chennai 600 017.
Phone : 2815 3445 / 2815 1034 Fax : 2815 3181
E-mail: chennaiirc@karvy.com
SHARE TRANSFER SYSTEM

9.1
To expedite the share transfer process, the Board of Directors has constituted a committee consisting of
Mr.V.Srinivasan, General Manager (HR) & Company Secretary, Mr.M.Sankaranarayanan, Deputy Secretary
and Mr.P.Shankar, Assistant Secretary of the company to approve share transfers, transmission of shares,
dematerialisation requests and rematerialisation requests.
21
21
9/6/2007, 6:29 AM
9.2
The number of transfers approved and shares transferred from 01.04.2006 to 31.03.2007 are given
below:
Sl.
No.
Particulars
Number of transfer deeds received
2
3
Number of
Shares
Involved
1010
109850
Transfer deeds processed
664
72500
Defective transfer deeds sent to the proposed

transferee for rectification of defects
346
37350
9.3
The number of meetings held for approving the Share Transfers from 01.04.2006 to 31.03.2007 is 45.
9.4
The number of demat requests approved and shares dematted from 01.04.2006 to 31.03.2007 in National
Securities Depository Ltd. (NSDL) are given below:-
Sl.
No.
Particulars
Number of
Shares
Involved
Number of demat requests received
1900
253181
Number of demat requests processed
1710
227811
Number of demat requests rejected, for non-receipt

of physical share certificates within 30 days as per the
requirement of NSDL
190
25370
9.5
The number of meetings held for approving the demat requests through NSDL from 01.04.2006 to
31.03.2007 is 46.
9.6
The number of demat requests approved and shares dematted from 01.04.2006 to 31.03.2007 in Central
Depository Services (India) Ltd. (CDSL) are given below:
Sl.
No.
Particulars
Number of
Demat Request
Form (DRF)
Shares
Number of demat requests received
541
64610
Number of demat requests processed
454
54510
Number of demat requests rejected,

for non-receipt of physical share certificates
within 30 days as per the requirement of CDSL
87
10100
9.7
The number of meetings held for approving the demat requests through CDSL from 01.04.2006 to
31.03.2007 is 42.
22
22
9/6/2007, 6:29 AM
10.0 DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2007

Shareholding of
nominal value
Rs.
Shareholders
Share Amount
Number
% to Total
Rs.
% to Total
Upto - 5000
49354
96.87
54959720.00
3.69
5001 - 10000
906
1.78
7302530.00
0.49
10001 - 20000
384
0.75
5593720.00
0.38
20001 - 30000
98
0.19
2508970.00
0.17
30001 - 40000
41
0.08
1479240.00
0.10
40001 - 50000
33
0.06
1574140.00
0.11
50001 - 100000
63
0.12
4249650.00
0.28
100001 & above
76
0.15
1411446030.00
94.78
TOTAL
50955
100.00
1489114000.00
100.00
11.0 SHAREHOLDING PATTERN AS ON 31.03.2007

SHAREHOLDERS
No. OF SHARES
Physical
TOTAL
Electronic
%TO
SHARES
No. OF
SHAREHOLDERS
Physical Electronic
TOTAL
Indian Oil Corporation

Limited
77265200
77265200
51.89
Naftiran Inter-trade
Co. Ltd.
22932900
22932900
15.40
1712246
4967092
6679338
4.48
15321
27439
42760
29900
1988958
2018858
1.36
86
578
664
Banks, FIs and

Insurance Companies
100
16043195
16043295
10.77
15
16
Mutual Funds and UTI
10800
1010222
1021022
0.69
17
23
4500
21780890
21785390
14.63
12
47
59
781200
384197
1165397
0.78
5889
1542
7431
2538746
146372654
148911400
100.00
21326
29629
50955
Public (including
Employees)
Bodies Corporate
Foreign Institutional
Investors
Non-Resident Indians/
OCBs
Total
23
23
9/6/2007, 6:29 AM
12.0 TOP TEN SHAREHOLDERS AS ON 31.03.2007 (OTHER THAN PROMOTERS)

Sl.
No.
Name of the Shareholder
LIFE INSURANCE CORPORATION OF INDIA
5043571
3.39
HSBC GLOBAL INVESTMENT FUNDS A/C HSBC

GLOBAL INVESTMENT FUNDS MAURITIUS LIMITED
4265654
2.86
GENERAL INSURANCE CORPORATION OF INDIA
3342991
2.24
THE NEW INDIA ASSURANCE COMPANY LIMITED
3221060
2.16
SANFORD C BERNSTEIN AND CO. DELAWARE

BUSINESS TRUST-EMERGING MARKETS VALUE SERIES
2855840
1.92
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT

SYSTEM MANAGED BY ALLIANCE CAPITAL
MANAGEMENT, LLP
2787429
1.87
MATTHEWS INDIA FUND
2467744
1.66
UNITED INDIA INSURANCE COMPANY LIMITED
1915572
1.29
NATIONAL INSURANCE COMPANY LTD
1831000
1.23
10
CITIGROUP GLOBAL MARKETS MAURITIUS

PRIVATE LIMITED
1619631
1.09
29350492
19.71
No.of Shares
TOTAL
Shares
as a percentage
of total no.of shares
13.0 DEMATERIALISATION OF SHARES AND LIQUIDITY

The dematting facility exists with both the National Securities Depositories Limited (NSDL) and Central Depository
Services (India) Limited (CDSL) for the convenience of shareholders. As on 31.03.2007, 14,63,72,554 equity
shares have been dematerialized, representing 98.27% of the subscribed capital.
14.0 OUTSTANDING GDRs/ADRs/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE
AND LIKELY IMPACT ON EQUITY
The Company has not issued GDR / ADR / Convertible instruments.
15.0 PLANT LOCATIONS
Manali Refinery, Manali, Chennai-600 068. [Phone No.044-25944000]
Cauvery Basin Refinery, Panangudi Village, Nagapattinam District, Tamilnadu, Pin: 611 002. [Phone No.04365256402]
16.0 ADDRESS FOR CORRESPONDENCE
Chennai Petroleum Corporation Limited,
No.536, Anna Salai, Teynampet, Chennai-600 018.
Phone: 044-24349542 Fax : 044- 2434 1753
Email: sld@cpcl.co.in
Companys Website Address: www.cpcl.co.in
24
24
9/6/2007, 6:29 AM
Report to
Shareholders
Directors Report
26
Annexures to Directors Report
41
25
2 Report to Shareholders.pmd
25
9/6/2007, 6:30 AM
Directors Report (Including Management Discussion and Analysis)

To the Shareholders of Chennai Petroleum Corporation Limited,
st
On behalf of the Board of Directors of your Company, I have great pleasure in presenting the 41 Annual Report of
your Company, alongwith the Audited Statement of Accounts, for the Financial Year ended March 31, 2007.
CORPORATE OVERVIEW
Highest ever crude throughput of 10402 Thousand Metric Tonnes (TMT) against the previous best of 10362 TMT
achieved in the year 2005-2006.
Overall Energy Index for the year at 76.1 MBTU/BBL/NRGF as against 78.6 in the year 2005-2006.
Product exports increased to 827 TMT as against 643 TMT in the previous year. Export of 380 cst grade Fuel Oil
commenced for the first time and 257 TMT exported during the year 2006-2007.
Highest ever Defence supply of 152 TMT of Navy Grade Diesel and 55 TMT of LVFO/LDO.
Increase in Direct Customer Base by 225 customers for Paraffin Wax, Sulphur and Food Grade Hexane compared
to the last years increase of 171.
Standard & Poor (S&P), the worlds leading credit rating agency, identified CPCL as one of the seven Indian
Companies having potential to emerge as Challengers to the Worlds leading Blue chip companies.
Dun & Bradstreet (D&B), the worlds leading provider of business information services, ranked CPCL as 6 as per
total income in the Oil Refining & Marketing Sector for its 2006 edition of Indias Top 500 Companies.
Highest ever production of Motor Spirit (MS), Aviation Turbine Fuel (ATF), High Speed Diesel (HSD), Propylene
and products for Defence requirements at Manali Refinery.
Achieved capacity utilization of 103% in Manali Refinery as against 102% in 2005-2006. Capacity utilization of major
secondary units, viz., FCCU, improved to 113% and Once Through Hydrocracker Unit (OHCU) improved to 110%.
A new Sewage Reclamation Plant of 2.5 MGD capacity commissioned in December 2006.
DeNOx facility, the first of its kind in India, commissioned at Manali Refinery, to minimize the NOx emissions.
Highest ever distillate yield of 81.37% in Cauvery Basin Refinery, as against the previous best of 78.51% achieved
in the year 2005-2006.
Manali Refinery ranked second amongst the Refineries in the Country for improvement in Energy Consumption
during the year 2005-2006 and was awarded the Jawaharlal Nehru Centenary Award for Energy Performance,
instituted by MOP&NG.
Overall energy consumption for the year in Cauvery Basin Refinery at 131.18 MBTU/BBL/NRGF (MBN) is the
lowest ever.
Highest ever Gas processing of 72170 MT surpassing the previous best of 63908 MT in 2003-2004, in Cauvery
Basin Refinery.
Manali Refinery received the State level Safety Award for longest accident free man hours for the year 2003 and 2004.
Cauvery Basin Refinery received the Safety Appreciation Award from National Safety Council, Tamil Nadu Chapter
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for 2006 and also the 5 Annual Greentech Safety Award for the year 2006.
Continuous operation of Cauvery Basin Refinery without fire since inception in 1993. Achieved highest ever safe
mandays working of 2137 (previous best of 2118 mandays in 2001).
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MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure & Developments
The increase in demand of petroleum products has been propelled by the emerging economies of BRIC (Brazil,
Russia, India and China) and this has fuelled the worlds energy requirements, particularly the fossil fuels such as
Coal, Crude oil and Natural gas. While the demand for oil and gas is growing at about 3 to 4 % per annum for the
emerging economies, new supplies have not kept pace with the sudden surge in the demand, particularly from the
emerging economies of China and India. This is definitely leading to a new world order.
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9/6/2007, 6:30 AM

The political upheaval in Iraq, disturbances in Nigeria, standoff in Iran and limited availability of spare production capacity
have compounded the already delicate energy balance to make crude prices very volatile. This has led several countries,
including India, to look into new areas for Energy security. Oil companies in India have been scouting for oil abroad as
never before. Also, the recent NELP-VI bidding for exploration within the country has attracted very good response. The
recent KG basin strike of huge gas potential has brought excitement to both local and international players.
Growing demand, a turbulent supply market, lack of spare production capacity and continuous turmoil in several oil
producing countries had pushed up crude oil prices to record levels beyond $ 75 per barrel in 2006. Prices are
currently hovering over $ 70 per barrel.
This huge volatility in crude oil prices impacted Indian economy as India depends on oil imports for about 76 % of its
demand. Due to stagnant indigenous crude oil production and increase in petroleum products demand, the selfsufficiency is estimated to decline from 27.8% in 2007-08 to 16.8% in 2011-12.
The current refining capacity of India is 149 MMTPA and availability of products, is expected at 143 MMT in 2007-08,
which is 27 MMT higher than the demand of 116 MMT and is expected to grow to 235 MMTPA by the end of the XI
Plan period in 2012. The availability of products which is expected at 143 Million Tonnes in 2007-08 will be almost
27 Million Tonnes higher than the demand of 116 Million Tonnes. By 2011-12, the refining capacity is expected to
grow to 241 MMTPA which will create a surplus refining capacity of 96 million tonnes, which is more than half of the
current refining capacity.
Opportunities and Threats
As per the Energy Information Administration, USA, global petroleum prices are remaining elevated because of weak
inventories, strong demand and concerns about a long term supply crunch.
The continued high crude oil prices will have an adverse impact on the global economy prospects, though not at a
level experienced in 1970s. The crude oil production in India is almost stagnant which is an area of concern, even
though, on gas front there are bright prospects with huge KG Basin Gas discovery, which will be commercially
available during 2009-10. The huge finds at KG Basin and potential new finds at Mahanadi and Cauvery Basin will
lead to a substantial shift in the Indian energy balance.
The Compounded Annual Growth Rate (CAGR) of the refining sector during the next 5 years is expected to be at
9.54% as against domestic demand CAGR of 2.93% and hence India is now targeting itself as a regional hub for
export of petroleum products. The present product exports is about 20 MMTPA, while the exportable surplus would
be about 96 MMTPA by 2012.
The emerging challenges for the refining sector are mainly to implement the emerging technologies to meet the predominant
demand for Distillate Yields, improve the quality of petroleum products to make them more environment-friendly and
globally competitive, improve efficiency in refinery operations and create adequate infrastructure for exports. Large
quantity of exports will also call for major investment in port infrastructure, pipelines network and tankages.
India has large reserves of trained and highly skilled manpower available at a relatively lower cost compared to
advanced countries. However, with growing demand for knowledgeable and skilled manpower from different sectors
of Industry, there will be a constraint in availability. Hence, recruiting and retraining manpower will be a major thrust
area. The country has acquired rich experience in the installation and efficient operation of petroleum refineries in
the last 40 years. It is, therefore, expected that the operating cost will be low and the value-addition in Indian
refineries will be of a very high order and that the setting up of refineries in India for the domestic market as well as
for exports would be economically attractive.
At present there is a mandatory provision for 5% blending of Ethanol in Petrol. This scheme of Ethanol blending
which began initially in select nine states, was subsequently extended to cover the entire country.
The development of alternative sources of energy including Bio-Fuels, remains one of the critical elements for
achieving the countrys energy security. There is now an increased awareness of Bio-Diesel as a substitute for
normal diesel and the formulation of the Bio-Diesel Policy by Government is a major step in boosting initiatives in this
direction and is also expected to contribute to the development of rural economy in a very big way. The overall policy
initiatives of the Industry should focus on seeking energy independence by 2030.
Risks, Concerns and Outlook
The rising demand for oil from energy hungry Asia and a rebounding US economy could meet a supply squeeze later
in the year 2007. Further, the civil unrest in oil rich Nigeria, is adding to the concerns about political unrest in the
Middle East further disrupting the supply.
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9/6/2007, 6:30 AM
The volatile refining margins all over the world came down during third quarter of 2006-07 on account of steep decline
of diesel crack and huge inventory losses suffered by the Oil Companies. During the year 2006-07, the losses of the
Marketing Companies on account of selling Auto fuels was partly compensated by the Refineries with the reduction in
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Customs Duty on MS / HSD from 10% to 7.5% with effect from 16 June 2006 together with a revised Trade Parity Price
mechanism of MS / HSD at 80:20 of import and export price as against 60:40 in vogue during the period September
th
2005 to 15 June 2006. The subsidy sharing mechanism of LPG / SKO by way of discounts offered by Refineries to
Marketing Companies, which was introduced in 2005-06 was withdrawn in 2006-07.
However, the refineries have to concentrate on improving distillate yields and value-added products, reduce energy
consumption and operating & other controllable costs to remain competitive and profitable.
Your company, in order to meet the above risks and concerns, is taking all necessary initiatives to improve distillate
yields, diversify crude baskets at competitive price, optimize crude mix, maximize transportation of crude through
Suez max tankers, control energy consumption, reduce operating cost and monitor refinery performance on a
continuous basis.
Internal Control Systems and their Adequacy
Your Company firmly believes that a strong Internal Control framework is essential for good Corporate Governance
and that freedom of Management should be exercised within the framework of proper checks and balances.
Your Company has laid down documented manuals, policies and guidelines covering various aspects of the business,
processes and operations. Recently, the company has revised and updated the manual on Delegation of Authorities
and Procedures, taking into account operational necessities and administrative flexibilities.
Your Company has a strong Internal Audit function at the Corporate level which carries out risk-focused audits across
all activities of the Company and identifies areas where risk management processes need to be improved. The Audit
Committee of the Board provides valuable suggestions and strategic guidance on internal controls and ensures that
the recommendations of the Internal Audit are implemented effectively.
Pursuant to the recommendations of the Committee constituted by the Company to lay down procedures for Risk
Assessment and Minimization, the Company received reports from concerned Heads of Department relating to
various risks such as Crude Oil Sourcing, Pricing, Security, Risk due to nature of business, Project Implementation
Risks, Human Resources Risks and Legal & Litigation Risks. These reports were reviewed by the Executive Committee
of the Company. The Board of Directors of the Company also reviewed the salient features of these reports and would
continue to review such reports periodically.
PERFORMANCE OVERVIEW
Physical Performance
2006-2007 2005-2006
CRUDE THRUPUT (in TMT)

Imported
8750.7
8854.7
Indigenous
1651.5
1507.0
10402.2
10361.7
Light Ends
2075.7
2064.8
Middle Distillates
5051.6
5010.5
Heavy Ends
2117.5
2106.8
187.3
195.9
25.1
25.5
16.9
15.1
(19.1)
Total
PRODUCTION (in TMT)
Lube Base Stocks

Wax
Others (Intermediaries)
Others (fuel gas consumed)
Fuel & Loss
Total
947.2
943.1
10402.0
10361.7
Year
Note: The figures for the year 2006-07 do not include LPG (6.28 TMT) and Naphtha (1.809 TMT) produced from
Natural Gas in the LPG Recovery Unit at Cauvery Basin Refinery.
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9/6/2007, 6:30 AM

The salient features of operations during the year include the following:
Manali Refinery :
Achieved a capacity utilization of 103% against 102% in 2005-2006.
Capacity utilization of major secondary units, viz. FCCU improved from 110% to 113% and Once Through
Hydrocracker (OHCU) improved from 106% to 110%.
Processed three new Crudes during the year, viz. Marib-Light (Yemen), Azeri Light (Azerbaijan) & Girassol (Angola)
to widen the crude basket.
RCO brought for the first time from CBR to Manali and processed in FCCU for value addition.
Highest ever production of the following products:
(Figures in TMT)
Product
2006-2007
Motor Spirit
Aviation Turbine Fuel
Navy Diesel
Euro III HSD
Total High Speed Diesel
Propylene
779.2
696.9
152.7
596.7
3304.6
26.9
Previous Best (year)

754.5
554.9
117.5
562.8
3244.1
26.0
(2005-06)
(2005-06)
(2005-06)
(2005-06)
(2005-06)
(2005-06)
Cauvery Basin Refinery:

Highest ever distillate yield of 81.37% as against previous best of 78.51% achieved in the year 2005-2006.
Overall energy consumption for the year at 131.18 MBTU/BBL/NRGF (MBN), the lowest ever as against previous
best of 140.08 achieved in the year 2003-2004.
Highest ever Gas processing of 72170 MT surpassing the previous best of 63908 MT in 2003-2004.
Chidambaranar Oil Jetty completed 100 shipments of crude oil handling in March 2007.
Achieved highest ever accident free mandays at 2137 as compared to the previous best of 2118 days.
Financial Performance
2006-2007
2005-2006
29349.49
1311.12
188.30
241.94
880.88
25407.84
1133.24
174.03
235.84
723.37
(Rs. in crore)
Percentage
increase
15.5
15.7
8.2
2.6
21.8
304.17
6.73
4.71
565.27
1784.83
223.90
15.97
2.54
480.96
1606.46
35.8
- 57.9
85.4
17.5
11.1
Gross Turnover
Profit before Interest, Depreciation and Tax
Interest
Depreciation and Amortization
Profit before Tax
Provision for Taxation
- Current Tax (Net)
- Deferred Tax
- Fringe Benefit Tax
Profit after Tax
Value Added
The Company has registered an all time high Turnover during
the year 2006-2007, 15.5% jump compared to previous year.
The profit after Tax also witnessed an increase of 17.5% at
Rs.565.27 Crore as compared to Rs.480.96 Crore during the
year 2005-2006. The Internal Resources generated during the
current year was higher at Rs.798.20 Crore, compared to
Rs.530.15 crore during the previous year and the value addition
was at Rs.1784.83 crore during the current year as against
Rs.1606.46 crore during the previous year.
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9/6/2007, 6:30 AM
An amount of Rs.356.21 crore is proposed to be carried to

Reserves and Surplus, thus, totalling to Rs.2488.74 crore
as on 31.3.2007, as against Rs. 2132.53 crore as on
31.3.2006.
The book value per share of your Company has surged
from Rs.153.05 in the year 2005-2006 to Rs.177.15 in the
year 2006-2007.
Your Company has not accepted any fresh public deposits
during the year 2006-07.
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.
SHARE CAPITAL
The Subscribed Share Capital of the Company as on 31.3.2007 was 14,89,11,400 Equity Shares of Rs.10/- each.
This was lower than the previous year figure of 14,89,43,200 Equity Shares of Rs.10/- each due to forfeiture of 31800
shares for non payment of allotment money / call money. The forfeiture was given effect from 26.10.2006.
DIVIDEND
Your Board of Directors is pleased to recommend a Dividend
of 120% on the paid-up share capital of the Company for
the year 2006-2007, which is at the same level as declared
last year. The Dividend will absorb a sum of Rs.209.96
crore, including dividend distribution tax and the surcharge
thereon.
MoU PERFORMANCE
* Recommended to the share holders for approval at

the Annual General meeting scheduled to be held on
10.09.07
Your Company continued to perform well during the year also

and achieved Excellent rating in the provisional assessment.
MARKETING
While major fuel products produced by your Company
continued to be marketed by Indian Oil Corporation Limited,
the Holding Company, CPCL has carved out a niche in
marketing specialty products to a large number of retail
customers and petrochemical feedstock to downstream
units. The total direct sales of specialty products and
petrochemical feedstock increased from 489 TMT in
2005-06 to 589 TMT in 2006-07 with an impressive growth
of 20%, amidst competition from imports and other domestic
companies.
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9/6/2007, 6:30 AM
The sales figures of various products in the current year as compared to the previous year alongwith the percentage
increase are tabulated below :
Sl.
No.
Product
Sales (TMT)
2006-07
Sales (TMT)
2005-06
% Increase
Naphtha
213.7
170.4
25.4
Propylene
27.5
25.7
7.0
Paraffin wax
25.3
24.3
4.1
Food Grade Hexane
Linear Alkyl Benzene Feedstock
6.4
6.2
3.2
47.7
49.5
(3.6)
Poly Butene Feedstock
7.2
5.7
26.3
Methyl Ethyl Ketone Feedstock
6.7
5.3
26.4
3.8
3.3
15.5
42.6
40.6
4.9
Slack Wax
Sulphur
PROJECTS
Your Company continues to give utmost priority to implementation of projects. The expenditure during the X plan
period (2002-2007) was Rs. 2314 crore against the outlay of Rs. 2400 Crore. The outlay during the XI Plan period is
Rs. 3575 Crore.
Completed Projects
2.5 MGD Capacity Sewage Reclamation Plant
To enhance the availability of water for Manali Refinery, an additional 2.5 MGD capacity Sewage Reclamation Plant
consisting of Biological treatment, Chemical treatment, Ultra filtration and Reverse Osmosis was commissioned in
December 2006 at a cost of about Rs.47 Crore.
Offsite Automation Project
In order to improve the blending operations for meeting the product specifications, an Offsite Automation facility for
Auto Blending of various components of MS, Diesel and Fuel Oil was completed at a cost of about Rs.26.8 Crore.
On-going Projects
Sea Water Desalination Project
The project for installation of a 5.8 MGD Sea Water Desalination Plant at an estimated cost of Rs.231.34 crore is under
implementation and is expected to be completed by December 2007. This project will ensure uninterrupted operation
of the Refinery even during the periods of water scarcity in Chennai.
Gas Turbine
A project for installation of 20 MW Gas Turbine to enhance the reliability and quality of Captive Power Generation at
Manali Refinery at an estimated cost of Rs.157.88 Crore is under implementation. The project is expected to be
mechanically completed by October 2007.
New Crude Oil Pipeline
The project for laying of new 42" 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, is proposed for implementation at a cost of
Rs.65.4 Crore. The project is expected to be completed within twelve months after Right of Way clear of encroachments
is made available by Chennai Port Trust in coordination with Tamil Nadu Road Development Corporation and
National Highways Authority of India.
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9/6/2007, 6:30 AM
Windmill Farm Project

To achieve significant abatement in greenhouse gas emissions, a project for setting up of a Windmill Farm of 17 MW
capacity in Melakaraipatti Village (near Pushpathur), Dindigul District, Tamil Nadu at a cost of Rs.89.80 Crore is under
implementation. This Project will be commissioned by November 2007.
Refinery III Capacity Augmentation
The project for Debottlenecking of Refinery III Unit of Manali Refinery from 3 MMTPA to 4 MMTPA capacity at an
estimated cost of Rs.134 crore is in progress. The project is expected to be completed by March 2009. With the
implementation of this project, the Refining capacity at Manali will increase from 9.5 MMTPA to 10.5 MMTPA.
The contract for Detailed Engineering, Procurement and Construction Management Services has been awarded to
M/s Engineers India Limited.
Auto Fuel Quality Upgradation Projects
In order to meet the future specifications of MS and HSD, the following initiatives have been taken up by the Company
at an estimated cost of about Rs.1900 Crore:
Revamp of Naphtha Hydrotreating (NHDT) and Catalytic Reformer Unit (CRU) to Continuous Catalytic Reformer Unit
Setting up of new Isomerisation Unit
Setting up of Diesel Hydrotreating Unit (DHDT)
Process Licensors have been selected. The first two projects are expected to be completed by end of 2009 and the
third one by early 2010.
Installation of Additional Crude Tanks at Manali Refinery
A project for installing two more Crude Tanks to increase the Crude Storage capacity at Manali at an estimated cost
of Rs.56.60 crore is under implementation. The project is expected to be completed by May 2008.
New Projects
Resid Upgradation Project
For improving the Distillate yield of Manali Refinery from 67% to 75%, besides reducing the production of Fuel Oil, a
Resid Upgradation Project with a Delayed Coker Unit alongwith associated facilities is being taken up at a cost of
about Rs.3000 Crore. Licensor selection for the Delayed Coker Unit has been completed. Proposals have been
received from the Licensors for the New Sulphur Recovery Unit which is a part of the Resid Upgradation Project,
which are under evaluation.
Propylene Recovery Unit
In order to tap full potential of the Propylene available in LPG from FCCU, an additional Propylene Recovery Unit is
proposed to be put up at Manali Refinery.
15 MMTPA Refinery-cum-Petrochemical Complex
A new 15 MMTPA grassroots Refinery-cum-Petrochemical Complex is proposed to be set up at Ennore near Chennai
on a Joint Venture basis with Indian Oil Corporation Limited. Process Configuration Study and Pre-Feasibility Report
are under preparation. CPCL has made a request to Government of Tamil Nadu for allocating 2500 acres of land in
Ennore which was earmarked earlier for Petro-Park.
DEVELOPMENT STRATEGIES
Your Company organized interaction meetings with Indian Oil Corporation Limited, the Holding Company, in April
2006 to discuss and deliberate on various strategies for the future growth and expansion of your Company. Actions
taken on various decisions at the interaction meeting were reviewed by Chairman and Functional Directors of IOCL
in March 2007.
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9/6/2007, 6:30 AM

The decisions taken at these Strategy Meetings focused on the need to make investments in the following areas:
Expansion of refining capacity by low cost debottlenecking
Projects for meeting environmental norms
Improvement of distillate yields
Enhance captive generation of utilities, viz., water and power to minimize dependence on external sources.
Improving infrastructure to market various products in domestic market as well as export.
INDIAN ADDITIVES LIMITED

Indian Additives Limited (IAL), a joint venture of your Company with M/s.Chevron Oronite Company LLC, manufacturing
lubricant additives, achieved a turnover of Rs.159.13 Crore during the year 2006-07, as compared to Rs.150.09 crore
in the previous year. The Profit after Tax was Rs.3.37 Crore (previous year Rs.2.66 crore). For the year 2006-2007,
IAL has recommended a Dividend of 7.5% on the paid-up capital.
INFORMATION TECHNOLOGY
Your Company is conscious of the need to make optimum utilization of various advancements in Information Technology
in order to provide support for achieving operational excellence in various business activities of the Company.
Several initiatives have been taken by the Company in this direction and significant among them include the following:
Introduction of e-Seva system to enable the vendors / contractors / service providers to track the status of their bills.
Implementation of ERP Software at Cauvery Basin Refinery.
Implementation of Material Gate Pass System for effective online monitoring of movement of materials.
Modification of the Companys ERP system to incorporate various changes in the VAT system introduced by the
Government of Tamil Nadu.
Introduction of various new features in the intranet system of the Company like Industry Information, Reports, Fire
& Safety messages, Knowledge base, news and events, etc.
RESEARCH AND DEVELOPMENT (R&D)

The R&D Centre of your Company continue to extend active support to refinery operations by carrying out Pilot Plant
evaluation of catalysts and feed stocks for secondary processing facilities, assay of new crudes etc. The requirements
of Refinery units like FCC, Hydro processing and Lube units regarding process troubleshooting and optimization
studies are being catered to by this centre.
A new Hydrotreating pilot plant has been commissioned and the same will be used for carrying out studies on Diesel
Hydro-desulphurisation , Lube Hydrofinishing etc.
New collaborative research programs with National Center for Catalysis Research at IIT, Madras have been initiated
by your Companys R&D Centre for the following:
Development of Regenerable Adsorbents for removal of sulfur from Diesel fuel.
Development of catalysts for End point reduction in Diesel.
Initiation of collaborative project with Pavement Engineering group of IIT(M) in the area of Performance grade
Bitumen with warrants for modifications
Research alliance with Sud Chemie India Limited for development of suitable catalysts for Lube Hydrofinishing.
SAFETY MANAGEMENT
Your Company and its employees are conscious of their commitment to conduct business by adopting best safety
practices in handling equipment and material. Your Company adopts best safety practices at par with Indian and
International Standards. All the safety activities are aimed at achieving credible safety performance at work not only
by the employees, but also by the contract labourers.
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9/6/2007, 6:30 AM
The Company has undertaken several measures to improve the safety management systems and procedures and
significant among them include the following:
Onsite Emergency preparedness plan revised / updated for both Manali and Cauvery Basin Refinery.
On-site emergency mock drills conducted in November 2006 in association with mutual aid partners and statutory
authorities at Manali Refinery. At Cauvery Basin Refinery, On-site mock drills were conducted in March 2007 in
co-ordination with statutory authorities and IBP Co. Limited, the neighbouring industry.
As a part of Disaster Management, One-day Awareness Programme on Off-site Emergency plan was organized
at Manali Refinery on 21.12.2006. Off-site mock drill was also conducted at Manali Refinery by District Collector
of Tiruvallur on 09.01.2007. At Cauvery Basin Refinery, Off-site mock drills were conducted on 04.01.2007 by the
District Collector, Nagapattinam.
Twelve Safety Zones created in the Manali Refinery and allotted to Deputy General Managers. Each Zonal
in-charge delivers safety talk once in a month.
Revised procedure and instructions on issue of work permits for both Manali and Cauvery Basin Refinery as a
supplement to Oil Industry Safety Directorate Standard 105 was released for strict compliance.
Special devices like Fall Arrestors with Full body Harness and Catwalk ladders procured and issued for use while
working at heights
Implemented the recommendations of safety audit.
Five Minute safety talk for the benefit of contractors & their workman at security Main gate organized every day.
Reviewed and updated Safety Manual, Fire Manuals, Fire order and Fire Emergency Procedures.
Awards / Achievements
The concerted efforts taken by your company in the areas of safety and adoption of best safety practices has won
several awards and accolades as mentioned below:
Manali Refinery received the State level Safety Award for longest accident free man hours for the year 2003 and
2004. Award received on 11.09.2006.
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ENVIRONMENT MANAGEMENT SYSTEM

Caring for the Environment and taking constant efforts to preserve and protect the ecological balance continues to
remain the avowed objective of the Company. As a result of various environmental conservation measures taken
from time to time, the Company could achieve substantial reduction in pollution from its operations.
The Environment Cell of the Company works dedicatedly for the upkeep of Refinery environmental operations and
also for complying with the provisions of the Environmental Laws.
Some of the key environmental protection facilities successfully commissioned during the year include the following:
DeNOX facility, at Refinery III Complex of Manali Refinery, which is the first of its kind in India to minimize emission
of Nitrous Oxide (NOX) to the atmosphere.
RO Rejects Recovery Plant of 80 KL / hr. capacity for further recovery of 40 KL / hr. of water from the Rejects, at a
cost of Rs. 2 crore.
Additional 2.5 MGD capacity Sewage Reclamation Plant at a cost of Rs.47 crore to enhance the water availability
by processing metro sewage.
As part of its efforts to provide a clean and green environment, your Company has implemented the programme of
Ethanol blending in Petrol for supply at Bangalore, Guntakkal, Cudappah and Ongole.
ENERGY CONSERVATION MEASURES
Energy conservation continues to be the thrust area focused by your Company. Several initiatives have been
undertaken by the Company to reduce Fuel & Loss and also to improve the Energy Index. Some of the initiatives are
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9/6/2007, 6:30 AM

Commissioned seven numbers of Variable Frequency Drives and achieved significant savings in power.
Replacement of around 2000 faulty steam traps to improve condensate recovery
Secondary seals provided for six crude tanks to reduce evaporation loss
Agreement entered into with M/s Shell Global International through Center for High Technology (CHT) to undertake
study for margin improvements, energy and loss reduction and improving operational performance at Manali
Refinery.
An in-house team of Officers comprising of three full-time co-ordinators and 28 part-time members has been formed
to work with the experts of M/s. Shell Global during the improvement assessment phase. The study will commence
from mid July 2007. The implementation of accepted proposals will start from October 2007 onwards.
The overall Energy Index for the year was 76.1 MBTU / BBL / NRGF as against 78.6 achieved in the year 2005-06.
OPTIMIZATION
Your Company has always been a pioneer in keeping abreast with the latest technological changes to achieve the
best operating margins and has always strived to implement the best Process Optimization techniques.
Your Company has implemented Advanced Process Control Technology (DMC Plus) from M/s Aspen Tech in all
major units and these controllers have been optimizing the unit operation to render the maximum benefits by operating
close to the constraint limits.
Some of the Advanced Process Controls implemented during the year are as under:
Maximisation of Poly-butylene feed stock with consistent quality.
Maximisation of Diesel in Once through Hydro Cracker Unit (OHCU) with consistent quality.
Development of Soft Analysers for predicting critical properties of FCCU gasoline, CRU reformate, Crude units
diesel streams and lube distillates.
Minimisation of Hydrogen losses through flare.
Sustaining the Maximum FCCU throughput.
Automation of critical manual operations to improve equipment availability.
The Offsite Automation project successfully commissioned during the year facilitated the Company to produce Bharat
Stage II and Euro III equivalent grades of MS and HSD simultaneously. Further, auto blending of MS with online
analyser and Blend Optimiser has improved the MS production and reduced the quality giveaway.
Your Companys state of the art Real time Process Information Network (PIN) System, which is the focal point for
process decisions, has been strengthened by No Single Point Failure system architecture. Entire system and
database is designed, developed and maintained by in-house experts. Following major applications have been
developed and implemented during this year:
Interface of Lube Expansion Block (LEB), Old Power House (OPH) and Oil Movements and Storage (OM&S) new
DCS systems with Process Information Network.
Generation of DCS Alerts when LAB results are updated to take immediate corrective action.
Automatic triggering and sending of Mobile SMS alerts to designated users on process Units upsets.
Interface of refinery wide CCTV system with PIN to facilitate users to access from their desktops.
TOTAL PRODUCTIVE MAINTENANCE (TPM)

Your Company continued to give thrust to Total Productive Maintenance (TPM) techniques commenced last year for
improving productivity. Various awareness campaigns on TPM were organized throughout the Refinery to reorient
the work culture.
The 5S practices have been implemented in all areas of Manali Refinery which resulted in clean, efficient, and
conducive workplace for implementing further improvements. The 8 pillars of TPM are progressing well and started
yielding good results. Zero Leak campaign conducted during the year has resulted in overall steam leak reduction
to the extent of 80%.
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9/6/2007, 6:30 AM
Your Company organized the first CPCL Kaizen Conference in August 2006 and a Book of Kaizens was released
on this occasion.
Another significant development in implementation of TPM is the frequent use of One Point Lesson (OPL). OPL is an
effective tool in TPM for knowledge sharing and learning. OPL focuses on Dos and Donts in an Employees
Operational Area. The number of OPLs generated is an indicator for the involvement of employees in the TPM
programme and during the year, more than 1000 OPLs were generated.
HUMAN RESOURCES DEVELOPMENT
In order to sustain the competitive edge in the Oil Sector, your Company has been taking several initiatives for
improving the human resource strengths and creating a conducive work atmosphere. Increased thrust is given for
retention of talent for taking the company to newer heights.
The manpower strength of the Company was 1672 (672 Supervisory and 1000 Non-supervisory employees) as on
01.04.2006 and 1651 (723 Supervisory and 928 Non-supervisory employees) as on 31.03.2007.
The Company recruited 19 Officers and 13 Refinery Operators/Technicians during the year. As a part of the
Apprenticeship training requirement, 50 Diploma holders and 28 ITI Trade Apprentices underwent one year training
programme in the Company.
During the year, the Company introduced several new HR initiatives like Mentoring for newly recruited Officers,
organizing field visits by HR Officers, Open House Session of employees with the top management, etc.
th
During the year, the Company has successfully organized the 40 Personnel Chiefs Meet, wherein 73 delegates
representing various Oil PSUs participated.
It has always been the endeavour of the Company to continuously review and make improvements in various
benefits extended to the Companys employees. The Company has enhanced the benefits under the performancebased incentive scheme. The Company has revised the Superannuation Scheme by switching over from Defined
Benefit to Defined Contribution with effect from 01.11.2006.
The Industrial Relations climate continued to be harmonious and cordial. A Settlement on rationalization of manpower
with regard to workmen was signed with the recognized unions.
61% of employees of your Company have been covered by training during the current year and achieved 3.46
Average Training Mandays against the target of 2.0 Mandays. This includes 324 Mandays of Organisational
Development programmes as against the required 300 Mandays.
The Refinery Engineering School of Training (RESOT) of CPCL, a well acknowledged centre for training on Refinery
Technology, conducted a Four module Core Course of 8 weeks duration during the year. In addition, short duration
programmes on Refinery Technology, Process Optimisation, Power & Utilities, Total Productive Maintenance,
Presentation Skills were also conducted with participation from downstream units and all Refineries. Various
Development Programmes were also conducted for the benefit of office bearers / committee members of the Collectives.
Your Company has been a pioneer in improving the creativity of the employees by introducing innovative schemes.
The Suggestion scheme, which has been introduced to promote the participation of the employees in the functioning
of the Company elicited widespread response. As many as 55 employees were presented with Suggestion Awards
for the year 2006, in addition to Appreciation Awards. Letters of Commendation were issued in recognition of the
good work done by deserving employees.
The Company has been scrupulously adhering to the Presidential Directives and various instructions of the Government
relating to the welfare of the SC, ST, OBC, and Physically Challenged etc. Out of the total manpower, there were 416
SC employees (previous year: 418) and 33 ST employees as on 31.03.07 (previous year: 32) constituting 25.20%
and 2.00% of the total manpower respectively.
The statistics relating to representation of SCs / STs / OBCs in the prescribed proforma as on 01.01.07 is placed as
Annexure-I.
Your Company has been complying with the provisions of the Persons with Disabilities (Equal Opportunities, Protection
of Rights and Full Participation) Act, 1995, by extending reservation in employment for Physically Challenged and
Disabled persons.
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9/6/2007, 6:30 AM

WELFARE OF WOMEN
As of 31.03.07, 73 women employees are on the rolls of the Company (previous year: 70), of whom 23 are in the
Supervisory Grade (previous year: 18) and 50 are in Non-supervisory Grade (previous year: 52), constituting 3.18%
of the total Supervisory employees and 5.39% of the total Non-supervisory employees.
Women empowerment through conduct of training programmes in Technical/Development/Functional areas was
accorded top priority by the management.
th
th
International Womens Day was celebrated on 9 and 10 Mar.07 by organizing a programme on the theme Celebrate
Yourself in which eminent professionals from various fields delivered lectures on topics of varied interests on
Women Development and empowerment to the participants.
In addition to nominating women employees to attend National/Regional Meets conducted by Women In Public
Sector (WIPS), your company also co-sponsored the recently held National Meet at Kochi.
CORPORATE SOCIAL RESPONSIBILITY
The Company firmly believes that Corporate Social Responsibility is the continuing commitment by the business to
behave ethically and contribute to economic development while improving the quality of life of its work force and their
families as well as of the local community and society at large.
Your Company has contributed a sum of Rs. 90 lakhs towards Community Development Activities around Manali
Refinery and Cauvery Basin Refinery focusing primarily on health care, educational infrastructure, socio-cultural
activities, infrastructural development, etc.
Your Company is in the process of constructing three overhead tanks to ensure continuous supply of water to the
neighbouring villages of the Manali Refinery and for this purpose, the Oil Industry Development Board Drought Relief
Trust has sanctioned a sum of Rs. 26 lakhs.
Development of Sports has always received the focused attention of the Company. For the third year in succession,
your Company sponsored the Chennai Open Tennis Tournament conducted by the Association of Tennis Professionals
(ATP).
During the year, your Company has also organized XVII Petroleum Sports Promotion Board Inter-Unit Cricket
Tournament for a period of six days. 7 teams, representing various Petroleum Companies participated in the Event.
In order to restore the pristine beauty of the historical Senate House of the University of Madras, a cultural heritage of
the city of Chennai, your Company contributed a sum of Rs.10 lakhs.
GLOBAL COMPACT
As a member of the Global Compact Programme, instituted by the Secretary General of the United Nations, aimed to
promote the Social Responsibility of the Corporates all over the world, your Company follows all the ten principles
enshrined in the said programme. Your Company has been a forerunner in the effective implementation of each and
every principle for many years. This is being achieved through appropriate policies and programmes adopted
meticulously besides total compliance of the relevant statutes all these years.
CPCL took several initiatives in encouraging the development and diffusion of environmentally friendly technologies
by implementing De-NOx technology in eight major stacks of Refinery III in addition to the installation of low Nox
burners in all the furnaces and process heaters of Refinery III.
CPCL has also taken several measures in Water Management such as the implementation of new Zero Discharge
Plant and an additional 2.5 MGD Sewage Reclamation Plant for recycling and use of city sewage into feed water of
DM Plant for Power Generation.
OCCUPATIONAL HEALTH SERVICES (OHS)
Occupational Health Services of your Company, an employee well-being measure, fulfils its mandate to promote the
health of all the employees at workplace and encourages attitudes and methods that leads to improved health.
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9/6/2007, 6:30 AM
The health care services offered by OHS are designed with emphasis on preventing illnesses. The comprehensive
programmes conducted during the year include the following :
monitoring of employees health in relation to specific health hazards at workplace to determine the risk of
development of subsequent disease
identifying the diseases in its early stages
screening of health condition of employees for early evidence of chronic diseases
About 86.7 % of employees were covered under periodic health surveillance program. Employees children in the
age group 8 10 years were screened for their visual acuity, colour vision and muscle balance to rule out squint.
Carried out epidemiological studies for work relatedness of health. Imparted training to employees on health
hazards in their work place, first aid and emergency resuscitation, life style modification etc.
In view of the various health care measures taken, your Company has not lost any man hour due to occupational
illness.
INVESTOR RELATIONS
The redressal of Investors grievances with a view to ensure zero complaints at any given point of time is the
continued priority of your Company.
The Shareholders / Investors Grievance Committee, which is the Sub-Committee of the Board of Directors of the
Company meets at regular interval to review the status of Investors grievances and offer valuable guidance.
The Company continues to display all the information in its website, which would be of use to the Investors, viz., Share
price details, Shareholding pattern, Changes in Directorships, Press releases, Financial results etc. and the same
are updated periodically.
The shares of the Company continued to be listed in the Madras Stock Exchange Limited, Bombay Stock Exchange
Limited and National Stock Exchange of India Limited. The percentage of dematerialized shares have increased to
98.30% as against 98.09% in the previous year.
AWARDS / RECOGNITIONS
Manali Refinery ranked second amongst the Refineries in the Country for improvement in Energy Consumption
during the year 2005-2006 and was awarded the Jawaharlal Nehru Centenary Award for Energy Performances
instituted by MOP&NG.
Manali Refinery received the State level Safety Award for longest accident free man hours for the year 2003 and
2004.
th
In the Standard & Poors (S&P) Global Challengers List 2006, CPCL has been identified as one among the 300
mid sized companies in the world to challenge the Worlds Leading Blue chip companies. Only 7 companies from
India have been identified in this list in which CPCL is the only company in the Oil & Gas sector.
Dun & Bradstreet (D&B), the worlds leading provider of business information services ranked CPCL as 6 as per
total income in the Oil Refining & Marketing Sector for 2006 edition of Indias Top 500 Companies.
th
CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of the Corporate Governance Guidelines prescribed
by Securities and Exchange Board of India (SEBI) vide Clause-49 of the Listing Agreement. A separate Corporate
Governance Report, form part of the Annual Report of the Company for the year 2006-07.
The Company always strives to adopt best Corporate Governance practices and in recognition of this fact, your
Company was shortlisted as one of the top twenty five companies, adopting good Corporate Governance Practices
by the Institute of Company Secretaries of India for the year 2006 out of 200 companies.
We are also pleased to inform that CPCL was one among the 17 finalists, out of 77 participants in the Golden Peacock
Award for Excellence in Corporate Governance for the year 2006 organized by the Institute of Directors, New Delhi.
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9/6/2007, 6:30 AM

RIGHT TO INFORMATION
In order to promote transparency and to ensure that citizens of India have access to information under the control of
the Company, a mechanism in line with the Right to Information Act, 2005 has been established in your Company.
VIGILANCE
The Vigilance Department of the Company continues to play a vital role in increasing the awareness amongst the
employees to adhere to systems and procedures and maintain transparency.
During the year, a new system called e-Seva was introduced to enable the contractors / vendors / service providers
to track the status of their bills.
A network based Bill Monitoring System was introduced for expeditious settlement of bills of the contractors.
In line with the CVC guidelines, tender documents, award of contracts, details of purchase orders are displayed in the
website of the Company.
Vigilance Awareness Week was observed in the Company from 06.11.2006 to 10.11.2006. Many guest lectures, quiz
competitions, painting competitions etc. were organized.
A compendium of Vigilance Circulars issued by the Central Vigilance Commission (CVC) and Ministry of Petroleum
& Natural Gas was released in the form of a CD.
OFFICIAL LANGUAGE IMPLEMENTATION
In line with the annual programme pronounced by the Department of Official Language, Ministry of Home Affairs,
Govt. of India, the Official Language Policy is implemented in the Company.
During the year, 83 employees appeared in various Hindi Examinations conducted by the Hindi Teaching Scheme
and passed successfully. Hindi Typewriting Classes were conducted at Manali Refinery and also at the Corporate
Office of the Company. 14 employees appeared for the Hindi Typewriting Examination held during July 2006 and
passed successfully.
A two-day Hindi Workshop on Spoken Hindi and a three-day Workshop on Hindi for the benefit of the employees
appearing for various Hindi Examinations were conducted.
Dictionaries and Shabaris Book on Hindi Speaking Course were distributed to the employees attending Hindi
Classes.
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-II).
Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as
required under Clause 49 of the Listing Agreement, 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:
st
i) that, in the preparation of the annual accounts for the financial year ended 31 March 2007, 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;
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9/6/2007, 6:30 AM
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
st
iv) that the Directors have prepared the annual accounts for the financial year ended 31 March 2007, on a going
concern basis.
AUDITORS
The Comptroller and Auditor General of India has appointed M/s.Padmanabhan Prakash & Co., Chartered Accountants,
Chennai and M/s.B.Purushottam & Co., Chartered Accountants, Chennai, as Joint Statutory Auditors of the Company
for the financial year 2006-2007. The Board of Directors of the Company fixed a remuneration of Rs.5.0 lakh (Rs.2.50
lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable
service tax.
COST AUDITOR
Pursuant to the order No.52/59/CAB-2007 dated 24.01.2007 passed by the Ministry of Company Affairs, Government
of India, 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 2006-07 at a remuneration of Rs.1,00,000/(Rupees One lakh 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. S. Chandrasekaran, General Manager (i/c) was appointed as Director (Technical) effective 02.07.2006 in place
of Mr. R. Sankaran, who superannuated on 30.04.2006.
Mr.K. Balachandran, General Manager (Technical), Gujarat Refinery, Indian Oil Corporation Limited was appointed
as Director (Operations) effective 01.10.2006 in the place of Mr.A.Kasturi Rangan, Director (Operations), who
superannuated on 30.9.2006.
Your Directors place on record their appreciation of the valuable contribution made by Mr.R.Sankaran and Mr.A.Kasturi
Rangan during their tenure.
ACKNOWLEDGEMENT
The Board of Directors acknowledge the sincere appreciation of the commendable services and dedicated efforts of
the members of CPCL family. The Board also wish to place on record its gratitude for the unstinted support,
co-operation and guidance received from Ministry of Petroleum & Natural Gas, Indian Oil Corporation 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 Tamilnadu, Comptroller & Auditor
General of India, Central Vigilance Commission, Financial Institutions and commercial banks. The Directors also
thank National Iranian Oil Company and its affiliate Naftiran Inter-trade Company Limited for their continued cooperation.
Your Directors are also thankful to all stakeholders for their continued support and confidence reposed on the
Company.
For and on behalf of the Board of Directors
Date : 07.07.2007
Place : New Delhi
S.BEHURIA
Chairman
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9/6/2007, 6:30 AM
ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs and OBCs as on 01.01.2007

AND NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR YEAR
41
GROUPS
No. of appointments made during the calender year 2006 (Jan-Dec 2006)
Representation of
SCs/STs/OBCs as on 01.01.2007
Tot.no. of
employees
By Dir.Recruitment
By Deputation /
Absorption
By Promotion
STs
OBCs
Total
SCs
STs
OBCs
Total
SCs
STs
Total
SCs
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Group A
455
115
15
25
Nil
Nil
Nil
Nil
21 $
4#
Nil
Group B
272
55
13
19
4@
52
13^
Nil
Group C
784
188
10
198
40
Nil
23 *
22
Nil
Nil
Nil
Group D
150
61
56
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Group D
(Excldg.
Sweepers)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Group D
(Sweepers)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1661
419
33
292
59
12
27
98
20
Nil
(1)
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9/6/2007, 6:30 AM
TOTAL
STs
@ includes 1 SC candidate recruited on Merit
# includes 1SC candidate promoted on Merit in Lowest rung of Group A
* Includes 6 OBC candidates recruited on Merit
^ includes 5 SC candidates promoted on Merit
$ applicable upto lowest rung of Group A
SCs
Annexure to Directors Report
ANNEXURE - I (SC/ST/OBC REPORT - I)
ANNEXURE - I (Contd.) (SC/ST/OBC REPORT - II)
ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs and OBCs IN VARIOUS GROUP A SERVICES AS ON 01.01.2007
42
AND NUMBER OF APPOINTMENTS MADE IN VARIOUS GRADES IN THE PRECEDING CALENDAR YEAR
Pay scale (in

Rupees)
No. of appointments made during the calender year 2006 (Jan-Dec 2006)
Representation of
SCs/STs/OBCs as on 01.01.2007
Tot.no. of
employees
SCs
STs
(2)
(3)
(4)
13750-18700
114
26
16000-20800
114
17500-22300
By Promotion
By other Methods
Total
SCs
STs
OBCs
Total
SCs
STs
Total
SCs
STs
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
11
NIL
NIL
NIL
NIL
21
4@
NIL
NIL
NIL
33
13
NIL
NIL
NIL
NIL
20
NIL
NIL
NIL
87
25
NIL
NIL
NIL
NIL
10
NIL
NIL
NIL
18500-23900
69
19
NIL
NIL
NIL
NIL
10
NIL
NIL
NIL
19000-24750
43
NIL
NIL
NIL
NIL
NIL
NIL
NIL
19500-25600
18
NIL
NIL
NIL
NIL
NIL
NIL
NIL
20500-26500
10
NIL
NIL
NIL
NIL
NIL
NIL
NIL
455
115
15
25
NIL
NIL
NIL
NIL
75
20
NIL
NIL
NIL
(1)
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9/6/2007, 6:30 AM
Total
OBCs
By Dir.Recruitment
@ 1 SC candidate promoted on Merit in the Lowest rung of Group A

ANNEXURE - II
ANNEXURE TO DIRECTORS REPORT ON ENERGY CONSERVATION

FORM A
Form for disclosure of particulars with respect to Conservation of Energy
A.
Power and Fuel Consumption
1.
Electricity
a) Purchased
Unit (in million KW Hr.)
Total Amount (Rs. in Crore)
(excluding demand and other charges)
Demand and other charges (Rs. in Crore)
Rate/Unit (average) (Rs./KWHr.)
(excluding demand and other charges)
Current Year
2006-07
b) Own generation
Through diesel generator
Through steam turbine/generator
Unit (in million KW Hr.)
Units per litre of fuel oil/gas
Fuel Cost/Unit (Rs.)
Previous Year
2005-06
3.100
1.14
1.520
0.56
7.44
3.68
6.69
3.66
Not applicable
Not applicable
359.45
3.27
4.61
357.567
3.24
4.18
Not applicable
Not applicable
2.
Coal
3.
Furnace Oil
Quantity (in thousand K.Litres)
Average rate (Rs./MT)
525.399
15915.49
529.437
14308.59
Others/Internal generation fuel gas

For Manali Refinery only
Gas Turbine
Quantity
Power (in million KW Hr.)
Fuel (in thousand MTs)
Total cost (Rs. in Crore)
Fuel cost/Unit (Rs.)
Fuel Gas (TMT) (including CBR)
282.489
96.203
263.58
9.33
112.499
292.274
105.460
251.84
8.62
104.912
62.01
47.96
Not applicable
62.86
48.52
Not applicable
3.58
3.40
10.82
10.12
4.
B.
Consumption Per Unit of Production

Electricity (KWHr/MT of crude)
Furnace oil (Kg/MT of Crude)
Coal
Other (specify)
FCCU Coke (Kg/MT of Crude)
Fuel Gas (Kg/MT of Crude)
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9/6/2007, 6:30 AM
ANNEXURE - II (Contd.)
FORM B
RESEARCH AND DEVELOPMENT (R&D) ACTIVITIES
1. Specific Areas in which R&D was carried out by the company

Evaluation of three New Crudes processed in the Refinery. Also, 9 Nos. regular crudes were reevaluated.
Evaluation of Catalyst and Additives for FCC Unit
Selection of catalysts for Hydro processing units
Development of Catalyst for Hydrofinishing of LOBS
Development of Catalytic Process for End point Reduction of Diesel, in collaboration with IIT, Chennai
Adsorptive Desulfurisation, in collaboration with IIT, Chennai
2. Benefits derived as a result of the above R&D

As per Annexure
3. Future plan of action

Quality upgradation of Bitumen with modification

Membrane process for seperation of Propylene from cracked LPG
Upgradation of Heavy oils
Bio Fuels and Bio Lubricants from non edible oils
Development of catalyst for isomerisation of Naphtha
4. Expenditure on R&D:
Capital
Recurring
Total
Total R&D expenditure as % of Turnover
2006 07
(Rs. In Lakhs)
2005 06
233.97
305.44
539.41
0.02
209.63
303.91
603.54
0.02
5. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and Innovation :
Pilot Plant studies on extraction were carried out for Lighter Grade Lube distillates using NMP solvent
Studies were carried out for maximizing isobutylene yields in LPG from FCCU
Pilot plant studies were carried out on Reformer catalysts with different feed stocks
Feasibility of co-processing heavy stocks like RCO, Extracts with UCO in FCC Unit was studied for residue
upgradation
2. Benefits derived as a result of the above efforts, e.g. Product improvement, cost reduction, product development,
import substitution efforts:
R&D efforts are aimed to provide technical support to refinery operations, optimization of process units and also
to provide analytical inputs for process trouble shooting. Pilot plant studies and evaluation of catalysts and feed
stocks for various process units help in improving the yields and optimum utilization of feed stocks and facilities.
3. In case of imported technology (imported during the last 5 years reckoned from the financial year) following
information may be provided :
a. Technology imported
: Nil
b. Year of Import
: Not applicable
c. Has technology been fully absorbed
: Not applicable
d. If not fully absorbed, areas where this has not taken place
: Not applicable
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9/6/2007, 6:30 AM

Annexure to Form B
Benefits derived as a result of R&D activities:
Crude Assay:
Detailed assay of new crudes such as Girassol, Azeri Light and Marib Light helped in optimizing the yield of
distillates, in the process units.
Process Optimization Studies :

R&D study on Reduced Crude Oil from Cauvery Basin Refinery as additional feed stocks for FCCU helped in
processing the same in the commercial unit.
Extraction studies were conducted in Liquid Extraction Pilot plant using NMP solvent for lighter grade Lube distillates
feed stock currently processed in Furfural Extraction Unit.
Various process options and suitable additives were studied for increasing Isobutylene yields in LPG from FCCU
Adsorptive Desulfurisation studies were carried out on CBR diesel using modified activated carbon as adsorbents.
A programme for development of catalysts for Hydrofinishing of Lube oils has been initiated and the pilot plant
studies indicated the potential for commercial use.
Aspen plus simulation of solvent recovery sections of NMP unit for processing lighter grades
Papers published
1. Reformulation FCC Gasoline (Elseveier publication) FUEL vol 86 (2007) 1290 97
Accepted for publication in Petroleum Science & Technology, USA

Kinetics of Oxidative Desulfurization of Sulfur compounds in Diesel.
Production of Cyclopentane by Extractive Distillation
Effects of feed stocks in FCC Yields
ANNEXURE - II Contd.
Foreign Exchange earning and outgo :
1. Activities relating to exports: Initiatives taken to increase exports. Development of new export markets for products
and services and export plans :
During the year 2006-07, the Company exported 827 TMT of products to various countries like Bangladesh,
Singapore, Malaysia, China, etc. through IOCL for a total value of Rs. 1533 crore.
2. Total foreign Exchange used and earned :
(Rs. In lakhs)
a)
Used
b)
Earned
2006 07
2005 06
5588.58
6029.98
Nil
Nil
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9/6/2007, 6:30 AM
ANNEXURE - III
COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE
To
The Shareholders of
We have examined the compliance of conditions of Corporate Governance by Chennai Petroleum

Corporation Limited for the year ended March 31, 2007 as stipulated under Clause-49 of the Companys
Listing Agreement with the Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our
examination was limited to a review of the procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of Corporate Governance. It is neither an Audit nor an
expression of opinion on the Financial Statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify
that the Company has complied with the conditions of Corporate Governance, as stipulated in the above
mentioned Listing Agreement for the year ended March 31, 2007.
We state that no investor grievance is pending against the Company for a period exceeding one month as
per the Certificate furnished by the Share Transfer Agent of the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor
the efficiency or effectiveness with which the management has conducted the affairs of the Company.
Chennai
May 11, 2007
For B.PURUSHOTTAM & CO.

For PADMANABHAN PRAKASH & CO.

T. Ravee
Partner
Membership No: 28243
E. Prakash
Partner
46
46
9/6/2007, 6:30 AM
Report of the Statutory
Auditors
Auditors Report
48
Annexure to the Auditors Report
49
47
3 Report of the Auditors.pmd
47
9/6/2007, 6:30 AM
Auditors Report
Report of the Auditors to the Members of Chennai Petroleum Corporation Limited
st
1.
We have audited the attached balance sheet of Chennai Petroleum Corporation Limited, as at 31 March
2007, the profit and loss account and also the cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the companys management. Our responsibility
is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
3.
As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure-I, a
statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure-I referred to above, we report that:

(i)
We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(ii) In our opinion, proper books of accounts as required by law have been kept by the company so far as
appears from our examination of those books;
(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in
agreement with the books of account;
(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this
report comply with the accounting standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(v) On the basis of written representations received from the directors and taken on record by the Board
st
of Directors, we report that none of the directors is disqualified as on 31 March 2007 from being
appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
(vi) In our opinion and to the best of our information and according to the explanations given to us, the
said accounts give the information required by the Companies Act, 1956, in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India;
st
(a)
in the case of the balance sheet, of the state of affairs of the company as at 31 March 2007
(b)
in the case of the profit and loss account, of the profit for the year ended on that date; and
(c)
in the case of the cash flow statement, of the cash flows for the year ended on that date.
for B.Purushottam & Co.
Place : Chennai
Date : May 11, 2007
for Padmanabhan Prakash & Co.

T. Ravee
Partner
E. Prakash
Partner
48
48
9/6/2007, 6:30 AM
Annexure to Auditors Report
ANNEXURE - I
Referred to in paragraph 3 of our report of even date

(i)
(ii)
(a)
The company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets.
(b)
All the assets have not been physically verified by the management during the year but
there is a regular programme of verification which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
(c)
During the year, no substantial part of the fixed assets of the company were disposed off.
(a)
The inventory has been physically verified during the year by the management. In our
opinion, the frequency of verification is reasonable.
(b)
The procedures of physical verification of inventories followed by the management are

reasonable and adequate in relation to the size of the company and the nature of its
business.
(c)
The company is maintaining proper records of inventory. The discrepancies noticed on

verification between the physical stocks and the book records have been appropriately
dealt with in the books of account.
(iii)
We are informed that there is no company, firm or party to be listed in the Register referred to in
Section 301 of the Companies Act, 1956 and hence we have no comments to offer in respect of
clauses 4 (iii) (a), 4 (iii) (b), 4 (iii) (c), 4 (iii) (d), 4 (iii) (e), 4 (iii) (f) and 4 (iii) (g) of the Companies
(Auditors Report) Order, 2003.
(iv)
In our opinion and according to the information and explanations given to us, there are adequate
internal control systems commensurate with the size of the company and the nature of its business
with regard to purchases of inventory, fixed assets and with regard to the sale of goods and
services. During the course of our audit, we have not observed any continuing failure to correct
major weaknesses in internal control system.
(v)
We are informed that there is no company, firm or party to be listed in the Register referred to in
Section 301 of the Companies Act, 1956 and hence we have no comments to offer in respect of
clauses 4 (v) (a) and 4 (v) (b) of the Companies (Auditors Report) Order, 2003.
(vi)
The company has not accepted any deposits from the public and hence we have no comments to
offer in respect of clause 4(vi) of the Companies (Auditors Report) Order, 2003.
(vii)
In our opinion, the company has an internal audit system commensurate with the size and nature
of its business.
(viii)
We have broadly reviewed the books of account maintained by the company pursuant to the Rules
made by the Central Government for the maintenance of cost records under section 209 (1) (d) of
the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and
records have been made and maintained.
(ix)
(a)
The company is regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund, income tax, sales tax, wealth
tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.
49
49
9/6/2007, 6:30 AM
We are informed that no employee of the company is covered by Employees State Insurance
Scheme
(b)
The details of disputed dues of Income tax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty and Cess, which have not been deposited, are given in Annexure - II to our report.
(x)
st
The company does not have any accumulated losses as on 31 March 2007. The company has not
incurred cash losses during the financial year covered by our audit and in the immediately preceding
financial year.
(xi)
In our opinion and according to the information and explanations given to us, the company has not
defaulted in repayment of dues to a financial institution or banks.
(xii)
The company has not granted any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities and hence we have no comments to offer in respect of clause
4 (xii) of the Companies (Auditors Report) Order, 2003.
(xiii)
The company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of
clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.
(xiv)
The company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
(xv)
In our opinion and according to the information and explanations given to us, the company has not
given any guarantees for loans taken by others from banks or financial institutions and hence we have
no comments to offer in respect of clause 4 (xv) of the Companies (Auditors Report) Order, 2003.
(xvi)
In our opinion, the term loans have been applied for the purpose for which they were raised.
(xvii)
According to the information and explanations given to us and on an overall examination of the balance
sheet of the company, we report that no funds raised on short-term basis have been used for long-term
investment.
(xviii)
The company has not issued shares during the year and hence we have no comments to offer in
respect of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003.
(xix)
The company has not issued any debentures during the year nor there is any outstanding as on 31
March 2007 and hence we have no comments to offer in respect of clause 4 (xix) of the Companies
st
(Auditors Report) Order, 2003.

(xx)
The company has not raised money by public issues in the recent past and hence we have no comments
to offer in respect of clause 4 (xx) of the Companies (Auditors Report) Order, 2003.
(xxi)
According to the information and explanations given to us, no fraud on or by the company has been
noticed or reported during the course of our audit.
for B.Purushottam & Co.

Place : Chennai
Date : May 11, 2007
for Padmanabhan Prakash & Co.

T. Ravee
Partner
E. Prakash
Partner
50
50
9/6/2007, 6:30 AM
ANNEXURE - II
Statement of Disputed Dues

Name of the Statute
Nature of
the dues
Disputed
Amounts
(Rs. in
Lakhs)
Amount
paid under
protest/
Predeposit
(Rs.in Lakhs)
Period to
which the
amount
relates
Forum where the dispute

is pending
TamilNadu General
Sales Tax Act
Sales Tax
Dues
1092.50
1987-88
Madras High Court
TamilNadu General
Sales Tax Act
Sales Tax
Dues
1012.83
1988-89
Madras High Court
Central Sales Tax Act
Sales Tax
Dues
28367.00
1992-93
Madras High Court
TamilNadu General
Sales Tax Act
Sales Tax
Dues
5.30
1992-93
TN State Appellate
Tribunal
Central Sales Tax Act
Sales Tax
Dues
164.57
1991-92
TN State Appellate
Tribunal
Central Excise Act
Excise Dues
3131.41
Mar 2005
to
Feb 2006
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
1798.22
862.59
Apr 2002
to
Oct 2005
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
34.32
Aug 2000
to
Sep 2001
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
46.00
Oct 2001
to
Dec 2003
Commissioner of Central
Excise (Appeals)
Central Excise Act
Excise Dues
29.03
Jan 2004
to
Nov 2004
Central Excise and

Service Tax
Appellate Tribunal
51
51
9/6/2007, 6:30 AM
ANNEXURE - II
Statement of Disputed Dues

Name of the Statute
Nature of
the dues
Disputed
Amounts
(Rs. in
Lakhs)
Amount
paid under
protest/
Predeposit
(Rs.in Lakhs)
Period to
which the
amount
relates
Forum where the dispute

is pending
Central Excise Act
Excise Dues
74.25
Dec 2004
to
Nov 2005
Commissioner of Central
Excise (Appeals)
Central Excise Act
Excise Dues
56.62
Aug 2003
to
May 2004
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
178.56
Jan 2003
to
Jan 2004
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
133.75
Mar 2004
to
Feb 2005
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
966.08
300.00
Aug 1999
to
Mar 2002
Assistant Commissioner
of Central Excise
Central Excise Act
Excise Dues
(Interest)
365.28
199.00
Sep 1996
to
May 2001
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
(interest)
128.64
Feb 2004
to
Aug 2004
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
294.17
35.00
Apr 1999
to
Mar 2005
Central Excise and

Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
(Interest)
98.78
Jan 2005
to
Jun 2005
Central Excise and

Service Tax
Appellate Tribunal
52
52
9/6/2007, 6:30 AM
Financial
Information
Balance Sheet
54
Profit and Loss Account
55
Schedules to the Accounts
56
Comments of the Comptroller and

Auditor General of India
80
Financial Indicators
81
Production Performance
81
Funds Flow Statement
82
Value Added Statement
83
Ten Year Profile
84
53
Balance Sheet as at March 31, 2007

(Rs. in Lakhs)
Schedule
SOURCES OF FUNDS
1. Shareholders Funds
a) Capital
b) Reserves and Surplus
2.
A
B
Loan Funds
a) Secured Loans
b) Unsecured Loans
C
D
Deferred Tax Liability (Net)

Total
APPLICATION OF FUNDS
1. Fixed Assets
a) Gross Block
b) Less: Depreciation and Amortisation
c) Net Block
d) Capital Goods, Work-in-Progress
March 31, 2007 March 31, 2006
14900.46
248873.65
2.
3.
4.
5.
6.
7.
Intangible Assets
a) Gross Block
b) Less: Amortisation
c) Net Block
E-I
Investments
Current Assets, Loans and Advances
a) Inventories
b) Sundry Debtors
c) Cash and Bank Balances
d) Other Current Assets - Interest accrued
on Investments/Bank Deposits
e) Loans and Advances
183413.14
57352.14
504539.39
122517.46
152271.75
274789.21
56679.00
559621.26
321900.68
476249.25
160626.61
315622.64
7066.57
322689.21
4305.86
6011.16
1107.25
4903.91
11190.53
11552.99
57965.33
125447.81
3.
263774.11
14900.46
213252.59
228153.05
484796.09
181038.38
303757.71
18142.97
6011.16
1705.30
G
H
I
J
321477.39
100225.87
1142.14
40.99
314909.62
118344.68
6062.80
45.46
20902.36
443788.75
21172.21
460534.77
Less: Current Liabilities and Provisions

a) Current Liabilities
b) Provisions
L
L- I
247441.65
29204.78
276646.43
Net Current Assets (4 - 5)

Miscellaneous Expenditure
L- II
167142.32
0.00
221877.34
18384.39
240261.73
220273.04
202.11
504539.39
559621.26
(to the extent not written off or adjusted)

Total
8. Statement of Significant Accounting Policies
9. Notes on Accounts
10. Other Schedules forming part of Accounts
11. Balance Sheet Abstract and Companys
General Business Profile
12. Cash Flow Statement
(K.K. Acharya)
Managing Director
Place : Chennai
Date : May 11, 2007
Q
R
S to X
Y
Z
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
GM (HR) & Company Secretary
As per our Report of even date
B. Purushottam & Co.,
Padmanabhan Prakash & Co.,
(T. Ravee)
(E. Prakash)
Partner
Partner
Membership No. 28243
54
Profit & Loss Account
for the year ended March 31, 2007

(Rs. in Lakhs)
Schedule
INCOME
1. Sale of Products (Gross)
Less: Excise Duty
Less: Commission and Discounts
Sale of Products (Net)
2. Increase/(Decrease) in Stock
M
3. Interest and other Income
N
Total Income
EXPENDITURE
1. Purchase of products for resale
2. Manufacturing, Admn., Selling & Other Expenses O
3. Duties other than Excise Duty on Sales
4. Depreciation and Amortisation
5. Interest Payments on :
a)Fixed period loans from Banks/
Financial Institutions/Others
b)Short Term Loans from banks
c) Others
March 31, 2007 March 31, 2006

2940930.35
465467.25
2475463.10
5981.33
PROFIT AFTER TAX

DISPOSABLE PROFIT
APPROPRIATIONS
Interim Dividend
Final Dividend (Proposed)
Dividend Distribution Tax on Interim Dividend
Dividend Distribution Tax on Final Dividend (Proposed)
General Reserve
Earning Per Share (Rupees) (Basic & Diluted)
Statement of Significant Accounting Policies
Notes on accounts
Other Schedules forming part of Accounts
Balance Sheet Abstract and Companys
General Business Profile
Cash Flow Statement
(K.K. Acharya)
Managing Director
Place : Chennai
Date : May 11, 2007
38022.02
2341430.28
4150.24
24193.78
11186.24
2030302.92
2941.96
23584.05
18829.87
2426626.19
88088.32
0.00
88088.32
9672.60
7427.31
302.76
17402.67
2085417.84
71503.63
833.16
72336.79
8430.03
9629.88
769.96
Total Expenditure
PROFIT FOR THE YEAR
Income/(Expenses) pertaining to previous years (Net) P
PROFIT BEFORE TAX
Provision for Tax (net)
- Current year
- Pertaining to Earlier Years
- Deferred Tax
- Fringe Benefit Tax (Including pertaining
to Earlier Years)
2469481.77
38836.22
6396.52
2514714.51
2546434.33
428041.90
2118392.43
5649.86
2112742.57
39996.23
4182.67
2156921.47
29993.14
423.44
673.14
22500.64
(111.01)
1596.73
471.27
31560.99
56527.33
56527.33
254.00
24240.36
48096.43
48096.43
0.00
17869.37
0.00
3036.90
35621.06
56527.33
37.96
4467.68
13403.03
626.59
1879.77
27719.36
48096.43
32.29
Q
R
S to X
Y
Z
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
(T. Ravee)
(E. Prakash)
Partner
Partner
55
Schedules
CAPITAL
Schedule A
(Rs. in Lakhs)
Note
March 31, 2007
March 31, 2006
40000.00
40000.00
17000.00
17000.00
Authorised
40,00,00,000 Equity Shares of Rs.10 each
Issued
17,00,00,000 Equity Shares of Rs.10 each
Subscribed, Called-up and Paid-up :
14,89,11,400 Equity Shares of Rs. 10 each
14891.14
14894.32
0.00
2.06
14891.14
14892.26
(2006 : 14,89,43,200 Equity Shares of Rs.10 each)

Less: Calls in Arrears (Other than Directors)
Add: Forfeited Shares
9.32
8.20
Total
14900.46
14900.46
Note:
A. As per the Formation Agreement entered into between the promoters, an offer is to be made to the Naftiran
Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC) in any issue of the
Capital in proportion to the shares held by them at the time of such issue to enable them to maintain their
shareholding at the existing percentage.
B. Includes 7,72,65,200 Equity Shares of Rs.10 each (51.89%) fully paid-up, held by Indian Oil Corporation, the
Holding Company.
C. 31,800 Equity Shares of Rs.10/- each were forfeited with effect from 26.10.2006.
RESERVES AND SURPLUS
Schedule B
(Rs. in Lakhs)
March 31, 2007
1.
Share Premium Account

As per last account
Less :Calls in Arrears (Other than Directors)
25003.82
25018.21
0.00
14.39
25003.82
2.
General Reserve
As per last account
Add : Transferred from Profit and Loss Account
Total
56
March 31, 2006
25003.82
188248.77
160529.41
35621.06
27719.36
223869.83
188248.77
248873.65
213252.59
SECURED LOANS
Schedule C
(Rs. in Lakhs)
Note
March 31, 2007
March 31, 2006
Loans and Advances from Banks

i)
Working Capital Demand Loan
00.00
50000.00
ii)
Cash Credit
1786.18
0.00
10870.00
22311.25
B&C
45309.15
50206.21
57965.33
122517.46
iii) Foreign Currency Loans

(USD 25 million; 2006: USD 50 million)
iv) Term Loans (due for payment within one year
Rs.5000 lakhs; 2006:Rs.5000 lakhs)
(includes interest accrued and due
Rs.309.15 lakhs; 2006: Rs. 206.21 lakhs)
Total
Note:
A. Against hypothecation of inventories, book-debts, outstanding monies, receivables present and future to the
extent of Rs.120000 lakhs (2006:Rs.120000 lakhs).
B. Secured by first paripassu charge on the companys fixed assets at Manali Refinery with State Bank of India.
C. Against hypothecation of all movable plant and machinery at Manali Refinery on a paripassu basis with HDFC
Bank alongwith State Bank of India.
UNSECURED LOANS
Schedule D
(Rs. in Lakhs)
March 31, 2007
1.
March 31, 2006
Short Term Loans and Advances

From Banks / Financial Institutions
i) In Rupee (Book Overdraft)
ii) Working Capital Demand Loan
251.11
129.75
10000.00
29000.00
34349.20
31235.75
iii) In Foreign Currency

(USD 79 million; 2006: USD 70 million)
2.
44600.31
60365.50
80847.50
91906.25
125447.81
152271.75
Other Loans and Advances

From Others
Oil Industry Development Board
(due for payment within one year
Rs.16558.75 lakhs; 2006: Rs.16558.75 lakhs)
Total
57
FIXED ASSETS
Schedule E
(Rs.in Lakhs)
GROSS BLOCK
DEPRECIATION/AMORTISATION
IMPAIRMENT
NET DEPRECIATED BLOCK
Gross
Depreciation Depreciation
Total
Tranfers/
Depreciation
As at
Gross
Transfers
Block
and
on
Depreciation
Total
Impairment
Total
Additions
Disposals Deductions/
and
March 31,
block
from
as at
Amor tisation disposals /
and
Impairment
Loss
Impairment
during
during Adjustments
Amor tisation
2007
As at
construc31-Mar-07
for the year transfers / Amor tisation Loss as at
during
Loss upto
the year
the year ReclassiAs at
(Ref.Note
01-Apr-06
tion WIP
(Ref.Note
(Ref.Note deductions
upto
01-Apr-06 the year 31-Mar-07
fications
01-Apr-06
No.C)
No. A)
No.B)
etc
31-Mar-07
As at
March 31,
2006
Land
- Freehold
- Lease hold
Buildings, Roads etc.
Plant and Machinery
3798.65
3798.65
795.79
795.79
50.77
7.90
58.67
12951.14
420.76
103.92
13267.98
3779.75
285.48
51.13
4014.10
9253.88 9171.39
454708.49 11464.19
3335.64
3094.25 174579.99
288257.05 300126.46
462837.04 154582.03 23092.21
3798.65 3798.65
737.12
745.02
58
Transpor t Equipments
1844.78
19.09
15.84
1848.03
1030.85
129.25
14.05
1146.05
701.98
813.93
Furniture and Fixtures
1175.66
75.85
42.35
1209.16
714.46
58.77
24.53
748.70
460.46
461.20
270.72
270.72
244.53
11.85
256.38
14.34
26.19
704.02
64.70
768.72
224.22
10.27
234.49
534.23
479.80
Railway Sidings
Drainage, Sewage and
Water Supply System
Total
476249.25 12044.59
3497.75
Previous Year
470804.58 7006.96
1523.48
484796.09 160626.61 23595.73
3183.96 181038.38
303757.71 315622.64
(38.81) 476249.25 138924.88 23002.27
1300.54 160626.61
315622.64 331879.70
Note:
A : The cost of assets are net of MODVAT/CENVAT, wherever applicable.
B : Depreciation for the year includes Rs. Nil (Rs. 19.48 lakhs) pertaining to prior years.
C : Net Depreciated Block includes Rs.Nil (2006: Rs. 17.46 lakhs) of assets retired from use and held for disposal.
INTANGIBLE ASSETS
Schedule E - I
(Rs.in Lakhs)
AT COST
Transfers
Gross
Additions
Disposals
from
block
during
during
Note
construcAs at
the year
the year
tion WIP
01-Apr-06
Right of Way
AMORTISATION
Tranfers/
Deductions/
Adjustments
Reclassifications
IMPAIRMENT
NET DEPRECIATED BLOCK
Amor tisation
Gross
on
Total
Total
Total
Impairment
Amor tisation Amortisation
As at
As at
Block
disposals / Amor tisation Impairment
Impairment
As at
for the
March 31, March 31,
Loss
as at
transfers /
upto
Loss as at
Loss upto
01-Apr-06
year
2006
2007
during
31-Mar-07
deductions 31-Mar-07 01-Apr-06
31-Mar-07
the year
etc
59
30.68
30.68
30.68
30.68
Technical Know -How,

Royalty and License Fees
5980.48
5980.48
1107.25
598.05
1705.30
4275.18
4873.23
To t a l
6011.16
6011.16
1107.25
598.05
1705.30
4305.86
4903.91
Previous Year
5979.52
31.64
6011.16
505.99
601.26
1107.25
4903.91
5473.53
Note:
A : No amortisation provided, the right being perpetual in nature.
CAPITAL WORK-IN-PROGRESS
Schedule F
(Rs. in Lakhs)
March 31, 2007 March 31, 2006
1.
Construction Work in progress

(including unallocated capital expenditure)
17322.05
6131.72
2.
Advance for Capital Expenditure
650.29
934.85
3.
Capital goods in transit
170.63
0.00
4.
Construction period expenses pending allocation

Expenditure during the year - Interest
Less : Allocated to Assets/Work-in-Progress
during the year
23.03
0.00
23.03
0.00
0.00
0.00
18142.97
7066.57
Total
INVESTMENTS
Schedule G
(Rs. in Lakhs)
No. and
Particulars
of Shares/
Units
I.
Face value
per share
Rupees
March
31, 2007
March
31, 2006
LONG TERM INVESTMENTS

UNQUOTED, AT COST
1) Non-Trade Investments
In Others
a) CPCL Industrial Cooperative
Service Society Ltd.
b) BioTech Consortium India Ltd
c) 7% Oil Companies, GOI

Special Bond 2012
2) Trade Investments
In Joint Venture Companies
Indian Additives Ltd.
In Others
a) National Aromatics and
Petrochemical Corporation Limited
9000 Shares
fully paid
10
0.90
0.90
100000
Equity Shares
fully paid
10
10.00
10.00
10000
0.00
10.90
9170.60
9181.50
1183401
Equity Shares
fully paid
100
1183.40
1183.40
25000
Equity Shares
fully paid
10
2.50
2.50
1180.99
2366.89
1185.59
2371.49
9170.60
357.86
8812.74
11190.53
0.00
0.00
0.00
11552.99
91706 Nos
b) Petroleum India International

II. CURRENT INVESTMENTS
1) Trade Investments
a) 7% Oil Companies, GOI Special Bond 2012 91706 Nos
Less: Provision for Dimunition
Total
60
10000
INVENTORIES
Schedule H
(Rs. in Lakhs)
March 31, 2007 March 31, 2006
1.
In Hand
a) Stores, Spares etc.
Less : Provision for losses
12471.78
1718.36
b) Raw Materials
c) Finished Products
d) Stock in Process
2.
In Transit
a) Stores and Spares
b) Raw Materials
c) Finished Products
Total
10753.42
70137.99
144965.25
25800.43
251657.09
12738.86
1805.51
10933.35
105261.15
106715.28
23136.53
246046.31
201.32
65714.17
190.48
62690.37
3904.81
5982.46
69820.30
68863.31
321477.39
314909.62
SUNDRY DEBTORS
Schedule I
(Rs. in Lakhs)
Note
1.
2.
Over Six Months

Unsecured, Considered Good
Other Debts
March 31, 2007
March 31, 2006
1021.52
914.50
99204.35
117430.18
100225.87
118344.68
Total
Note:
A. Includes due from Indian Oil Corporation Ltd., the holding company - Rs.820.16 lakhs (2006: Rs.881.28 lakhs)
B. Includes due from Indian Oil Corporation Ltd., the holding company - Rs.78193.85 lakhs (2006: Rs.96337.76 lakhs)
CASH AND BANK BALANCES
Schedule J
(Rs. in Lakhs)
Note
1.
2.
Cash Balances
a) Cash balances including imprest
March 31, 2007 March 31, 2006
Bank Balances with Scheduled Banks

a) Current Account
b) Deposit Account
5.14
856.04
280.96
Total
1293.20
4765.37
1137.00
6058.57
1142.14
6062.80
Note: A. Includes 53 (2006: 65) Gold Medals valued at Rs.4.39 lakhs (2006: Rs.3.60 lakhs)
61
4.23
LOANS & ADVANCES
Schedule K
(Rs. in Lakhs)
Note
1.
Advances recoverable in cash or in

kind or for value to be received
a) Secured, Considered Good
b) Unsecured, Considered Good
c) Unsecured, Considered Doubtful
Less: Provision for Doubtful Advances

2.
Claims recoverable
a) Unsecured, Considered Good
b) Unsecured, Considered Doubtful
4.
5.
6.
7.
8.
5248.96
3674.30
3.60
8926.86
3.60
Excess deposits given for materials taken on loan

- Unsecured, Considered Good
Sundry Deposits (including amounts adjustable
on receipt of final bills)
Total
6362.59
4149.34
33.92
4183.26
33.92
4149.34
5042.90
3318.28
0.00
0.00
0.00
3000.00
2551.88
2.03
2.03
0.00
0.00
2.17
573.61
330.97
20902.36
21172.21
2.02
2.46
2.03
2.82
39.57
1.01
1.26
2.82
3.60
60.64
0.00
0.00
1.21
0.00
0.00
10000.00
Nil
Nil
3000.00
39500.00
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
6362.59
29.42
6392.01
29.42
Balance with Customs, Port Trust & Excise Authorities

Inter Corporate Deposits - With Holding
Company
Advance Tax (Net)
Materials given on Loan
Less: Deposits received
8923.26
4890.51
2929.06
3.60
7823.17
3.60
7819.57
Less: Provision for Doubtful Claims

3.
March 31, 2007 March 31, 2006
0.00
0.00
Note:
A. Includes :
1. Due from Directors
Maximum amount due during the year
2. Due from other Officers
Maximum amount due during the year
B. Includes due from Indian Oil Corporation Ltd., the holding company
C. Includes materials given on loan to Indian Oil Corporation Ltd.,
the holding company
D. Includes due from Indian Oil Corporation Ltd., the holding company
E. Disclosure requirements of SEBI under Clause 32 of the Listing agreement
1. Loans and advances in the nature of loans to parent company, IOC
Maximum amount outstanding during the year
2. Loans and advances in the nature of loans to associates
Maximum amount outstanding during the year
3. Loans and advances in the nature of loans where there is
(i) no repayment schedule or repayment beyond seven years or
(ii) no interest or interest below section 372 A of Companies Act
4. Loans and advances in the nature of loans to firms/companies in which
Directors are interested
62
CURRENT LIABILITIES
Schedule L
(Rs. in Lakhs)
Note
1.
2.
3.
4.
5.
Sundry Creditors
a) Total dues of small scale industrial
undertaking(s)
b) Total dues of creditors other than small
scale industrial undertakings
Other Liabilities
Investor Education and Protection Fund shall
be credited by
a) Unpaid Dividend
b) Unpaid Matured Deposits
c) Interest accrued on b) above
15.23
215739.47
Excess deposits received for materials

given on loan
7.
Interest accrued but not due on loans
272.15
1.08
0.09
273.32
1801.42
0.00
0.00
0.00
0.00
Total
March 31, 2006
21.47
215754.70
29287.44
Security Deposits
Materials taken on loan
Less : Deposits given
6.
March 31,2007
200164.20
200185.67
19687.12
308.62
1.10
0.09
309.81
1502.88
5.73
5.73
0.00
5.58
324.77
186.28
247441.65
221877.34
Note:
A. Name of the Small Scale Undertakings to whom the company owes which is outstanding for more than 30
Days are given in Schedule R - Notes to Accounts.
B. Includes due to Indian Oil Corporation Ltd., the holding company - Rs.170087.17 lakhs (2006: Rs.166027.76 lakhs).
C. Includes due to Indian Oil Corporation Ltd., the holding company - Rs. 7.03 lakhs (2006: Rs.77.22 lakhs).
D. No amount is due as on March 31,2007 to be transferred to Investor Education & Protection Fund.
E. Includes due to Indian Oil Corporation Ltd., the holding company - Rs.Nil (2006: Rs.3.35 lakhs).
PROVISIONS
Schedule L-I
(Rs. in Lakhs)
March 31, 2007
1.
a) Provision for Taxation

Less: Advance Payments
68116.04
62333.63
63827.78
62333.63
4288.26
b) Provision for Fringe Benefit Tax
725.27
Less: Advance Payments
March 31, 2006
0.00
254.00
690.03
235.76
35.24
18.24
17869.37
13403.03
2.
Proposed Dividend
3.
Dividend Distribution Tax
3036.90
1879.77
4.
Provision for Retirement Benefits
3975.01
3083.35
29204.78
18384.39
Total
63
MISCELLANEOUS EXPENDITURE
Schedule L-II
(Rs. in Lakhs)
March 31, 2007
March 31, 2006
Deferred Revenue Expenditure

Voluntary Retirement Compensation
As per last accounts
Add : Expenditure during the year
202.11
87.96
0.00
209.32
Less : Amortised during the year

Total
202.11
297.28
202.11
95.17
0.00
202.11
DETAILS OF INCREASE / (DECREASE) IN STOCK
Schedule M
(Rs. in Lakhs)
March 31, 2007
March 31, 2006
Closing Stock
a) Finished products
b) Stock in process
148870.06
112697.74
25800.43
23136.53
174670.49
135834.27
Less:
Opening Stock
a) Finished products
b) Stock in process
Total
64
112697.74
82101.51
23136.53
13736.53
135834.27
95838.04
38836.22
39996.23
INTEREST AND OTHER INCOME
Schedule N
(Rs. in Lakhs)
Note
1.
Interest on
a) Loans and Advances
b) Fixed Deposits with Banks
c) Short Term Deposits with Banks
d) Customer Outstandings
e) 7% Oil Companies, GOI Special Bonds 2012
f) Others
2.
March 31, 2007
March 31, 2006
341.51
362.80
0.00
0.25
64.37
154.97
608.52
374.55
641.94
359.66
508.55
0.00
2164.89
1252.23
59.17
88.76
761.31
803.76
Dividend
From Others
3.
Sale of Power
4.
Profit on sale and disposal of assets
28.31
568.08
5.
Unclaimed/Unspent Liabilities written back
99.66
33.02
6.
Provision for Doubtful Debts, Advances,

Claims and Stores written back
310.28
156.09
7.
Sale of scrap
862.38
433.35
8.
Exchange Fluctuations (Net)
1030.55
0.00
9.
Other Miscellaneous Income
1079.97
847.38
6396.52
4182.67
Total
Note:
A. Represents income from Current Investments ( 2006: Income from Long -term Investments).
B. Represents income from Long-Term, Trade Investments.
C. Includes income from Petroleum India International (Long-Term Trade Investments) Rs.82.90 lakhs (2006:
Rs.102.95 lakhs).
65
MANUFACTURING, ADMINISTRATION, SELLING AND OTHER EXPENSES

Note
1.
March 31, 2007 March 31, 2006
Raw Material Consumed

Opening Balance
Add : Receipts
167951.52
2243215.64
136674.28
1995783.79
Less : Closing Stock
2411167.16
135852.16
2132458.07
167951.52
A
2.
2275315.00
Consumption
a) Stores, Spares and Consumables
b) Packages and Drum Sheets
3.
Power, Water and Fuel

Less : Own Fuel
4.
5.
6.
Processing Fees
Octroi, Other Levies and Irrecoverable Taxes
Repairs and Maintenance
i) Buildings
ii) Plant & Machinery
iii) Others
5772.46
76.23
5848.69
5433.11
155064.27
148824.61
5759.37
507.30
11716.24
6239.66
383.71
18523.03
534.03
9349.34
616.22
409.10
6094.78
541.05
10499.59
3324.86
Freight, Transportation charges and Demurrage
8.
Payments to and Provisions for Employees

a) Salaries, wages, bonus etc.
B
b) Contribution to Provident and other Funds
c) Amortisation of Voluntary Retirement Compensation
d) Staff Welfare Expenses
Office Administration, Selling and Other Expenses
(Schedule O - I)
Less: Companys use of own products
Total
1964506.55
5379.34
53.77
168715.77
162956.40
7.
9.
Schedule O
(Rs. in Lakhs)
10871.20
2705.29
202.11
1284.85
7044.93
3755.64
7208.14
1096.11
95.17
1283.33
15063.45
9682.75
13395.78
0.00
14867.87
134.33
2341430.28
2030302.92
Note:
A. Includes Rs. 346.51 lakhs (2006:1760.08 lakhs) in respect of customs duty for previous years.
B. Includes towards previous years Rs.1323.35 lakhs (2006: Rs.Nil) on account of removal of ceiling for the
payment of Performance Linked Incentive.
66
OFFICE ADMINISTRATION, SELLING AND OTHER EXPENSES
Schedule O - I
(Rs. in Lakhs)
March 31, 2007
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Rent
Insurance
Rates & Taxes
Donations
Payment to Auditors
a) Audit Fees
b) Other Services (for issuing certificates etc.)
c) Out of pocket expenses
2194.50
1357.12
135.72
11.64
2326.57
1766.79
121.21
102.43
8.31
1197.94
166.99
108.29
69.01
48.53
310.84
303.90
218.63
4.49
2.63
1.20
8.32
1093.35
185.32
106.54
70.44
46.76
152.48
172.84
113.59
357.86
593.55
313.03
3071.07
1239.04
0.00
1689.81
0.00
554.97
219.71
2833.99
1153.17
2704.65
1134.74
13395.78
14867.87
5.62
2.69
0.00
Travelling and Conveyance

Communication Expenses
Printing and Stationery
Electricity and Water
Bank Charges
Bad Debts, Advances, Claims and Materials written off
Loss on Assets sold, lost or written off
Provision for Doubtful Debts, Advances, Claims
and Obsolescence of Stores
Provision for investments
Security Force Expenses
Handling Expenses
Expenses of Enabling Facilities
Terminalling Charges
Exchange variation (Net)
Other Expenses
Total
March 31, 2006
INCOME/EXPENSES RELATING TO PRIOR YEARS
Schedule P
(Rs. in Lakhs)
March 31, 2007 March 31, 2006
Income
1. Sales
Total Income
Expenditure
1. Depreciation and Amortisation
2. Repairs and Maintenance
3. Interest
0.00
0.00
832.65
832.65
0.00
0.00
0.00
19.48
(65.80)
45.81
Total Expenses
0.00
(0.51)
Net Income / (Expenditure)
0.00
833.16
67
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Schedule Q
1.
BASIS OF PREPARATION
The financial statements are prepared under historical cost convention in accordance with the mandatory
accounting standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies
Act, 1956.
2.
2.1
FIXED ASSETS
Land
Land acquired on lease for over 99 years and on perpetual lease is treated as freehold land.
2.2
Capitalisation of construction period expenses

(a) Revenue expenses exclusively attributable to projects incurred during construction period are capitalised.
(b)
Financing cost incurred during the construction period on loans specifically borrowed and utilised for projects
is capitalised at the actual borrowing rates.
Financing cost, if any, incurred on general borrowings used for projects is capitalised at the weighted
average cost.
2.3
Depreciation / Amortisation
(a) Depreciation on fixed assets is provided in accordance with the rates as specified in Schedule XIV to the
Companies Act, 1956, on straight line method, upto 95% of the cost of the asset other than Insurance Spares
which are depreciated upto 100%. Depreciation is charged pro-rata on quarterly basis on assets, from/upto
the quarter of capitalisation/sale, disposal and dismantled during the year.
(b)
Assets costing not more than Rs.5000/- each are depreciated in full in the year of addition.
(c)
Capital expenditure on assets, the ownership of which does not vest with the Company, incurred during the
construction period of the projects is accounted as unallocated capital expenditure and is charged to revenue
in the year of capitalisation of such projects.
(d)
Cost of leasehold land (including premium) for 99 years or less is amortised during the lease period.
3.
IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/assets is reviewed for impairment. Impairment, if any, is recognised
where the carrying amount exceeds the recoverable amount.
4.
INTANGIBLE ASSETS
(a) Costs incurred on Technical know-how/license fee relating to production processes are charged to revenue
in the year of incurrence.
(b)
Costs incurred on technical know-how/license fee relating to process design/plants/facilities are accounted
as Intangible Assets Pending Amortisation during the construction period of the said plant/facility. At the
time of capitalisation of the said plant/facility, such costs are also capitalised as intangible asset and amortised
on a straight line basis over a period of ten years or life of the said plant/facility whichever is earlier,
beginning from the quarter in which the said plant/facility is capitalised. However, such costs which have
been capitalised along with plant/facility prior to 1st April,2003, continue to form part of cost of the plant/
facility.
(c)
Expenditure incurred on Research and Development, other than on capital account, is charged to revenue.
(d)
Costs incurred on computer software purchased/developed on or after 1 April 2003, resulting in future
economic benefits, are capitalised as Intangible Asset and amortised over a period of three years beginning
st
68
from the quarter in which such software is capitalised. However, where such computer software is still in
development stage, costs incurred during the development stage of such software are accounted as
Intangible Assets Pending Amortisation.
(e)
Cost of Right of Way for laying pipelines is capitalised and where Right of Way is of perpetual nature, not amortised.
5.
INVESTMENTS
Long-term investments are carried at cost and provision for diminution in the value thereof, other than temporary
in nature, is accounted for. Current investments are carried at lower of cost or market value.
6.
CURRENT ASSETS, LOANS AND ADVANCES

Valuation of Inventories
(a) Raw materials
Crude oil - At cost (on weighted average basis) or net realisable value whichever is lower.
(b) Stock-in-process
At raw material cost plus fifty percent of the cost of conversion, as applicable or net realisable value,
whichever is lower.
(c) Finished products
Finished products are valued at cost on First in First out basis or net realisable value, whichever is lower.
Cost of finished products is determined based on crude cost and processing cost.
(d) Stores and Spares
Stores and Spares are valued at weighted average cost. In case of declared surplus/obsolete stores and
spares, provision is made for likely loss on sale/disposal and charged to revenue. Necessary provisions are
also made in respect of non-moving stores and spares after review.
Stores and Spares in transit are valued at cost.
(e) Imported Products in-transit and Crude Oil in-transit
Imported products in-transit and crude oil in-transit are valued at CIF cost or net realisable value, whichever is lower.
7.
FOREIGN CURRENCY TRANSLATION

(a) Transactions in foreign currency are recorded at exchange rates prevailing on the date of transactions.
(b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc) outstanding at
the year end, are translated at exchange rates applicable as of that date.
(c) Non-monetary items denominated in foreign currency, (such as investments, fixed assets etc) are valued at
the exchange rate prevailing on the date of transaction.
(d) Any gains or losses arising due to exchange differences at the time of translation or settlement are accounted
for in the Profit & Loss account either under the head foreign exchange fluctuation or interest cost, as the
case may be, except those relating to acquisition of fixed assets.
(e) Exchange differences arising on liabilities incurred or on repayment of borrowings in foreign currency for
acquisition of fixed assets are accounted in the following manner:
i)
in respect of fixed assets acquired from a country outside India, exchange differences are adjusted in
the carrying cost.
ii)
In respect of fixed assets acquired within India,

st
exchange differences on transactions in foreign currency entered prior to 1 April, 2004, are
adjusted in the carrying cost.
exchange differences on transactions in foreign currency entered on or after 1st April 2004, are
recognized in the Profit & Loss Account.
69
8.
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

8.1 CONTINGENT LIABILITIES
(a) Show Cause Notices issued by various Government Authorities are not considered as Obligation.
(b) When the demand notices are raised against such show cause notices and are disputed by the Corporation,
then these are classified as disputed obligations.
(c) The treatment in respect of disputed obligations, in each case above Rs.5 lakhs, is as under:
i)
A provision is recognized in respect of present obligations where the outflow of resources is probable
ii)
All other cases are disclosed as contingent liabilities unless the possibility of outflow of resources is
remote.
8.2 CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital accounts are disclosed in each case
above Rs.5 lakhs.
9.
PROFIT AND LOSS ACCOUNT

(a) Claims on Petroleum Planning and Analysis Cell (Formerly known as Oil Coordination Committee)/
Government arising on account of Administered Pricing Mechanism are booked on acceptance in principle
thereof. Such claims and provisions are booked on the basis of available instructions/clarifications subject
to final adjustment as per separate audit.
(b) Adjustments pertaining to purchase of raw materials/finished products, sales and others as admissible
under the erstwhile Administered Pricing Mechanism are accounted as net claim from / (surrender to)
Industry Pool Accounts.
(c) Other claims (including interest on outstanding) are accounted:
i)
When there is certainty that the claims are realizable
ii)
Generally at cost
(d) Prepaid Expenses upto Rs.5,00,000/- in each case is charged to revenue.

(e) Income and expenditure are disclosed as prior period items only when the value exceeds Rs.5,00,000/- in
each case.
(f)
(i)
Superannuation Schemes
The liability of the company is restricted to the fixed contribution paid by the corporation on a monthly
basis towards the defined contribution scheme maintained by Life Insurance Corporation of India
Limited, which is charged off to revenue.
(ii)
Gratuity Schemes
The liability towards gratuity as at the year-end is ascertained on the basis of actuarial valuation.
Premium paid towards the Cash Accumulation Scheme of LIC and the difference between estimated
liability and the corpus available in the Cash Accumulation Scheme is provided for and charged off to
revenue.
(iii)
Leave Encashment
The liability towards leave encashment to employees as at the year-end is ascertained on the basis of
actuarial valuation and provided for.
(iv)
Post retirement medical benefits

The liability towards post retirement medical benefits as at the year-end is ascertained on the basis of
actuarial valuation and provided for.
(g) Expenditure incurred on Voluntary Retirement Schemes is charged off to revenue in the year of incurrence.
70
NOTES ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2007
Schedule R
1.
Contingent Liabilities
a) Claims against the Corporation not acknowledged as debts Rs.41,377.68 lakhs (2006: Rs. 44,557.68 lakhs).
These mainly include
i)
Rs. 7,335.11 lakhs (2006: Rs. 5,333.16 lakhs) being the demands raised by the Central Excise
authorities.
ii)
Rs. 30,642.20 lakhs (2006: Rs. 30,642.20 lakhs) in respect of Sales Tax demands.
iii) Rs. 2,240.95 lakhs (2006: Rs. 5,456.96 lakhs) in respect of Income Tax demands.
iv) Rs. 807.39 lakhs (2006: Rs. 2,955 lakhs) relating to projects.
b)
Interest/Penalty, if any, on the above claims is unascertainable.
c)
Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.23,417.46
lakhs (2006: Rs. 39,052.91 lakhs).
2.
Thirty nine acres and twenty seven cents of land has been taken on lease from a trust on a five-year renewable
lease for the construction of Employees Township at Cauvery Basin Refinery.
3.
Forty-one acres of land of the corporation is in the possession of IndianOil Tanking Ltd. under a lease agreement.
4.
The cost of land includes provisional payments towards cost, compensation and other accounts for which
detailed accounts are yet to be received from concerned authorities. The title of the land will pass on thereafter
to the Corporation on completion of legal formalities.
5.
As per the terms of Memorandum of Settlement (MoS), approved by the Government of India for the withdrawal
by the Corporation from the Joint Venture AROCHEM, with SPIC Ltd, the amount due to the corporation as on
31.03.2007 stood at Rs. 1,440.36 lakhs. As SPIC has expressed its keenness to implement its project and clear
the dues to the corporation, the corporation is confident of recovering the investment made in the project.
6.
The corporation, 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 corporation, has not
provided for cess towards formation of Rehabilitation and Revival Fund.
7.
Impact on account of changes in accounting Policies

i)
Change in Accounting policy of the company with regard to prepaid expenses (Policy No. 9 (d)) has the
effect of reducing the profits for the year by Rs. 23.65 lakhs.
ii)
Expenditure incurred towards Voluntary Retirement Scheme hitherto treated as Deferred Revenue
Expenditure is charged off to revenue. This has an impact of reducing the profits of the corporation by
Rs. 124.59 lakhs during the year.
8.
Payments to and Provisions for employees Contribution to Provident and other funds (Schedule O I, item No:
8) includes corporations contribution of Rs. 2,000 lakhs during the year in line with modification in Superannuation
scheme.
9.
Pending finalisation of longterm settlement to be implemented from 01.01.2007 for officers of the company, no
liability has been provided in the accounts, as the same is unascertainable.
10.
The corporation operates in a single segment viz. downstream petroleum sector. As such reporting is done on
a single segment basis.
11.
In compliance of Accounting Standard 18 on Related Party Disclosures issued by the Institute of Chartered
Accountants of India, the required information is given as per Annexure 1 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 corporation has taken on operating lease, Product Tankages from IOC/IBP on a renewal basis. The lease
rentals incurred for the current year amounting to Rs. 1,352.39 lakhs are included in Rent (2006: Rs.1,319.72 lakhs).
The lease rent payable for the next financial year is estimated to be Rs.1,533.78 lakhs (2006: Rs.1,307.53
lakhs) and lease rent for the five year period after the next year is estimated to be Rs.7,668.88 lakhs.
(2006: Rs.6,537.65 lakhs)
71
13.
In compliance of Accounting Standard 20 on Earning Per Share issued by The Institute of Chartered
Accountants of India, the elements considered for calculation of Earning Per Share (Basic and Diluted) are as
under:
March 2007
56527.33
148911400
37.96
10
Profit After Tax (Rupees in lakhs)

Weighted Average number of equity shares
Earning Per Share (Basic and Diluted) (Rupees)
Face value per share (Rupees)
14.
In compliance of Accounting Standard 22 on Accounting for Taxes on Income issued by The Institute of
Chartered Accountants of India, Deferred Tax Liability for the financial period ended 31st March 2007
amounting to Rs.673.14 lakhs (2006: Rs.1,596.73 lakhs) has been provided.
The item-wise details of Deferred tax liability (net) are as under:
As on
31.03.2007
Deferred Tax Liability
Depreciation
Less: Deferred Tax Assets
i) Provision for Retirement Benefits
ii) Voluntary Retirement Scheme Expenditure written off
iii) Provisions on inventories, debtors, loans and advances, Investments
Deferred Tax Liability (Net)
15.
16.
17.
March 2006
48096.43
148943200
32.29
10
(Rs. in Lakhs)
As on
31.03.2006
59563.04
59038.33
1451.62
42.35
716.93
57352.14
1037.92
0.00
1321.41
56679.00
Disclosure as required under Accounting Standard 27 on Financial Reporting of Interests in Joint

Ventures issued by The Institute of Chartered Accountants of India is as under:
a) Name of the Joint Venture
Indian Additives Ltd.
Proportion of ownership interest
50%
Country of Incorporation
India
Aggregate amount of interests in Joint Venture
Amount (Rs. in Lakhs)
Corporations share of
2006-07 #
2005-06 ##
Assets
3638.75
3226.91
Liabilities
864.98
710.79
Income
6886.35
6633.11
Expenditure
6628.70
6381.23
Contingent Liabilities
804.50
577.52
##
#
Unaudited figures
Audited figures
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
(Also, refer Note No.5).
During the year, the Corporation has undertaken a review of all fixed assets in line with the requirements of AS28 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.
The names of Small Scale Undertakings to whom the Corporation owes any sum which is outstanding for more
than 30 days are given in Annexure II.
The dues to Small Scale Industrial undertakings is continued to be reported as per the earlier requirements in
the absence of requisite information under the Micro, Small and Medium Enterprises Development Act, 2006.
72
18.
Remuneration paid/payable to Directors:
(Rs. in Lakhs)
2005-06
31.28
2.22
2.36
2.03
1.85
39.74
2006-07
Salaries and Allowances
46.88
Contribution to Provident Fund
3.34
Contribution to Gratuity / Superannuation Fund, etc.
1.73
Other benefits and Perquisites
1.74
Sitting Fees to Part Time Directors
3.55
Total
57.24
The Profit and Loss Account includes
a) Expenditure on Public Relations and Publicity amounting to Rs.125.09 lakhs (2006: Rs. 96.58 lakhs). The ratio
of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00507:1 (2006:0.00457: 1).
b) Research and Development expenses Rs.305.44 lakhs (2006: Rs. 303.91 lakhs).
c) Entertainment Expenses Rs. 26.38 lakhs (2006: Rs. 24.41 lakhs).
Previous years comparative figures have been regrouped and recast, wherever necessary, to the extent
practicable.
i)
ii)
iii)
iv)
v)
19.
20.
Annexure - I
Disclosure requirements under AS 18 as per Note No. 11
Details of
Transactions
Key Management
Personnel
31-Mar,07 31-Mar,06
Payables (Trade)
Joint Ventures
31-Mar,07
(Rs. in Lakhs)
Total
Others
31-Mar,06
31-Mar,07
31-Mar,06
31-Mar,07
31-Mar,06
Remuneration
51.95
35.86
--
51.95
35.86
Other Benefits/
Recoveries
1.74
2.03
--
1.74
2.03
59.17
88.76
59.17
88.76
Outstanding Loans/
advances receivables
Dividend Received
2.02
1.01
2.02
1.01
Assets on Hire
4.99
3.25
4.99
3.25
Key Management Personnel

Whole-time Directors
1) Shri K.K.Acharya
2) Shri N.C.Sridharan
3) Shri S. Chandrasekaran - From 02.07.2006
4) Shri K. Balachandran - From 01.10.2006
5) Shri A. Kasturi Rangan - Upto 30.09.2006
6) Shri R.Sankaran - Upto 30.04.2006
Joint Venture Companies
1) Indian Additives Limited
2) National Aromatics and Petrochemicals Corporation Ltd.
Annexure - II
Details for Note No. 17
Abasi Engineering works, Balsara Fasteners Pvt Ltd, BDK process control Ltd., C D Engineering Company, Cd
Industries, Cubic Transmissions Pvt.Ltd, Dynamic Gaskets Private Ltd, Econo Valves Ltd, Fix Fit Fasteners Mfg.
Pvt Ltd, Flexpro Electricals Pvt.Ltd, Floway Valves (P) Ltd, Gajalakshmi Rubber Products, Gaskets India Private
Limited, Goodrich Gasket Pvt. Ltd, I.G.P. Engineers Pvt. Limited, India Brush Industries, Laycock Engineers Pvt.
Limited, Madras Industrial Products, Mechaniks Compressors & Spares (Pvt.) Ltd, M.J. Patel (India) Ltd., MS
fittings Manufacturing Co Pvt. Ltd., Newage Industries Fire Protection Engineers, North Street Cooling Towers,
Paitandi Fluorocarbon Seals P Ltd., Petrochemical Engineering Enterprises, Pipefit Engineers Pvt. Ltd., Sakthi
Fire safety equipments, Shravana Engineers, South India Engineering Corporation, Southern Gasket Products,
Sri Kannan Engg. Enterprises, Sri Venkateswara Engineering Works, Teleflo Engineering.
73
LICENSED CAPACITY, INSTALLED CAPACITY AND ACTUAL PRODUCTION

Licensed Capacity
UNIT
i)
Crude Processing
MTs
31 March,
2007
105.00
Schedule S
(Figures in Lakhs)
Installed Capacity
31 March,
2006
70.00
31 March,
2007
105.00
31 March,
2006
105.00
Actual Production
31 March,
2007
104.02
31 March,
2006
103.62
ii) Propylene Recovery

Unit
MTs
0.17
0.17
0.17
0.17
0.27
0.26
iii) Wax Plant
MTs
0.30
0.30
0.30
0.30
0.25
0.26
Note : A. Represents finished petroleum products
FINISHED PRODUCTS - QUANTITY AND VALUE PARTICULARS

Opening Stock
Quantity
MTs
Value
Rupees
Year ended 31.03.07
3.71
111949.96
Year ended 31.03.06
3.65
81696.44
Schedule T
(Figures in Lakhs)
Purchases
Quantity
MTs
Sales
Closing Stock
Value
Rupees
Quantity
MTs
Value
Rupees
Quantity
MTs
Value
Rupees
1.02
38022.02
95.91
2927973.92
4.99
147957.72
0.37
11186.24
96.63
2536362.04
3.71
111949.96
1. PETROLEUM/
PETRO-CHEMICAL
PRODUCTS:
2. WAX
Year ended 31.03.07
0.02
747.78
0.00
0.00
0.26
12956.43
0.02
912.34
Year ended 31.03.06
0.01
405.07
0.00
0.00
0.24
10218.87
0.02
747.78
Year ended 31.03.07
3.73
112697.74
1.02
38022.02
96.17
2940930.35
5.01
148870.06
Year ended 31.03.06
3.66
82101.51
0.37
11186.24
96.87
2546580.91
3.73
112697.74
3. TOTAL
74
CONSUMPTION PARTICULARS OF RAW MATERIALS, STEEL COILS /

SHEETS/STORES/SPARE PARTS AND COMPONENTS
Imported
31 March, 2007
Crude Oil and Gas
Indigenous
Quantity
Total
Value
(Rs. in Lakhs)
% to total
Consumption
Value
(Rs. in Lakhs)
% to total
Consumption
MTs
(in Lakhs)
1883134.06
83
392180.94
17
100.40
76.23
100
76.23
10778.18
Packing Materials
Consumed
Steel Coils/Sheets/Stores/
Component and Spare Parts
Schedule U
Rupees
(in Lakhs)
2275315.00
2279.11
21
8499.07
79
1653741.43
84
310765.12
16
53.77
100
53.77
7710.12
83
9309.40
31 March 2006
Crude Oil and Gas
Packing Materials
Consumed
Steel Coils/Sheets/Stores/
Component and Spare Parts
1599.28
17
103.62
EXPENDITURE IN FOREIGN CURRENCY FOR ROYALTY, KNOW-HOW,

PROFESSIONAL & CONSULTATION FEES, DIVIDEND & OTHER MATTERS
1964506.55
Schedule V
(Rs. in Lakhs)
Note
1.
Professional, Consultation Fees and Technical Fees
2.
Interest
3.
Dividend (Net of taxes)
4.
Others
Total
March 31, 2007
March 31, 2006
858.83
37.15
2573.49
2432.26
2074.21
3458.15
82.05
102.42
5588.58
6029.98
Note:
A.
Represents payment made to 422 Non-Resident Shareholders for the year 2005-06 holding 23046800 number of
shares (2006: 451 Non-Resident Shareholders for the year 2004-05 holding 23054900 number of shares and
434 Non-Resident Shareholders for the year 2005-06 holding 23052200 number of shares )
B.
Expenditure in Foreign Currency has been considered on accrual basis.
75
EARNINGS IN FOREIGN CURRENCY
Schedule W
(Rs. in Lakhs)
March 31, 2007
March 31, 2006
0.00
0.00
0.00
0.00
Export of Petroleum Products

Total
CIF VALUE OF IMPORTS
Schedule X
(Rs. in Lakhs)
Note
1.
Crude Oil
2.
Capital Goods
3.
Revenue Stores, Component, Spare and Chemicals

Total
March 31, 2007
March 31,2006
1753720.21
1610001.66
308.37
281.10
1026.06
1277.05
1755054.64
1611559.81
Note : A. Includes value of imports made through Indian Oil Corporation, canalising agent.
76
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE
Schedule Y
I. Registration Details
Registration No : 5389 1965
State Code : 18
Balance Sheet Date
31
Date
03
Month
2007
Year
II. Capital Raised during the Year (Amount in Rs. Lakhs)

Public Issue
Rights Issue
Bonus Issue
Private Placement
NIL
NIL
NIL
NIL
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Lakhs)

Total Liabilities
Total Assets
781185.82
781185.82
Sources of Funds
Paid-Up
Reserves &
Secured
Unsecured
Deferred
Capital
Surplus
Loans
Loans
Tax Liability
14900.46
248873.65
57965.33
125447.81
57352.14
Application of Funds
Net Fixed
Intangible
Assets
Assets
321900.68
4305.86
Investments
11190.53
Net Current
Misc.
Accumulated
Assets
Expenditure
Losses
167142.32
NIL
NIL
IV.Performance of Company (Amount in Rs. Lakhs)

Turnover
Total Expenditure
Earning Per Share in Rs.
2469481.77
2426626.19
37.96
+ / - Profit/Loss Before Tax
+ / - Profit/Loss After Tax
+ 88088.32
56527.33
Dividend rate %
120
(Please tick Appropriate box + for profit - for Loss)

IV. Generic Names of Three Principle Products/Services of Company (as per monetary terms)
Item Code No.
Product Description
(ITC Code)
2710
HIGH SPEED DIESEL
2710
MOTOR SPIRIT
2710
FURNACE OIL
77
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2007
Schedule Z
(Rs. in Lakhs)
Year ended
March 31, 2007
Particulars
A. Cash Flow from Operating Activities
Profit Before Tax
Adjustments for
Depreciation
Deferred Revenue Expenditure Written Off
Income from Long Term Investment
Profit on Sale of Assets
Liabilities/Prov. for Claims written back
Advances, Claims and Material written off
Provision for Doubtful Claims and
obsolescence of stores/Investments
Loss on Sale of Assets
Interest on Borrowings
Interest income from short term investment
Year ended
March 31, 2006
88088.32
72336.79
24193.78
202.11
(146.67)
(28.31)
(409.94)
310.84
23603.53
95.17
(551.37)
(568.08)
(189.11)
152.48
581.09
303.90
18829.87
(706.31)
113.59
172.84
17448.48
(155.22)
131218.68
112459.10
Trade and Other Receivables
18207.94
(21378.73)
Inventories
(7094.74)
(73553.55)
Trade and Other Payables

Change in Working Capital
26866.83
37980.03
36468.52
(58463.76)
0.00
(209.32)
169198.71
53786.02
(25945.62)
(23077.64)
(454.27)
(235.76)
B. Operating Profit Before

Working Capital Changes
C. 1 Changes in Working Capital
(Excluding Cash & Bank Balances)
C. 2 Deferred Revenue Expenditure Incurred

D. Cash generated from Operations
E. Adjustments for
Direct Taxes Paid
Fringe Benefit Taxes Paid
F. Net Cash Flow from Operating Activities
G. Cash Flow from Investing Activities
Purchase of Fixed Assets
Sale of Assets
Investments (Net) #
Interest Income
Income from long term investment
Net Cash used in Investment Received
142798.82
(23120.99)
38.19
0.00
706.31
146.67
(9594.17)
618.08
(9273.55)
155.22
551.37
(22229.82)
78
30472.62
(17543.05)
Schedule Z (Contd.,)
(Rs. in Lakhs)
Year ended
March 31, 2007
Particulars
Year ended
March 31, 2006
H. Net Cash Flow from Financing Activities

Proceeds from / (Repayments of)
Long Term Borrowings
(16058.75)
(17521.30)
Proceeds from / (Repayments of)

Short Term Borrowings
(75420.26)
52564.61
Interest Paid
(18691.38)
(17518.74)
Dividend Paid
(13439.50)
(22228.49)
(1879.77)
(3132.96)
Corporate Dividend Tax Paid

Net Cash Generated/(Used) from
Financing Activities
(125489.66)
(7836.88)
(4920.66)
5092.69
J. Cash and Cash Equivalents at the

end of Financial Year
1142.14
6062.80
K. Cash and Cash Equivalents at the

beginning of Financial Year
6062.80
970.11
(4920.66)
5092.69
I. Net change in Cash & Cash Equivalents (F+G+H)
Net Change in Cash and Cash equivalents (J-K)
# Dues recoverable from Industry Pool Account settled by issue of 7% Oil Bonds - Rs. 9170. 60 lakhs
Notes:
1. Cash and Cash Equivalents include
1. Cash Balances
a) Cash balances including imprest
5.14
2. Bank Balances with Scheduled Banks

a) Current Account
b) Deposit Account
856.04
280.96
Total
2.
1137.00
4.23
1293.20
4765.37
1142.14
6058.57
6062.80
The Previous years figures have been regrouped wherever necessary for uniformity in presentation.
(K.K. Acharya)
Managing Director
Place : Chennai
Date : May 11, 2007
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
(T. Ravee)
(E. Prakash)
Partner
Partner
79
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION

619 (4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF CHENNAI PETROLEUM
CORPORATION LIMITED, CHENNAI FOR THE YEAR ENDED 31 MARCH 2007.
The preparation of financial statements of Chennai Petroleum Corporation Limited, Chennai for the
year ended 31 March 2007 in accordance with the financial reporting framework prescribed under the
Companies Act, 1956 is the responsibility of the management of the Company. The statutory auditors
appointed by the Comptroller and Auditor General of India under Section 619 (2) of the Companies Act,
1956 are responsible for expressing opinion on these financial statements under section 227 of the
Companies Act, 1956 based on independent audit in accordance with the auditing and assurance
standards prescribed by their professional body the Institute of Chartered Accountants of India. This is
stated to have been done by them vide their Audit Report dated 11 May 2007.
I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit
under section 619 (3) (b) of the Companies Act, 1956 of the financial statements of Chennai Petroleum
Corporation Limited, Chennai for the year ended 31 March 2007. This supplementary audit has been
carried out independently without access to the working papers of the statutory auditors and is limited
primarily to inquiries of the statutory auditors and Company personnel and a selective examination of
some of the accounting records. On the basis of my audit nothing significant has come to my knowledge
which would give rise to any comment upon or supplement to Statutory Auditors report under section
619 (4) of the Companies Act, 1956.
For and on the behalf of the

Comptroller and Auditor General of India
(Sd.)
(H. PRADEEP RAO)
PRINCIPAL DIRECTOR OF COMMERCIAL AUDIT AND
EX-OFFICIO MEMBER, AUDIT BOARD, CHENNAI.
Place : Chennai
Date
: June 14, 2007
80
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
1.53
1.47
1.20
1.21
0.70
Earnings per share (Rupees)
20.31
26.86
40.08
32.29
37.96
Cash Earnings per share (Rupees)
27.15
35.14
54.14
48.14
54.21
Profit Before Interest & Tax to

Average Capital Employed (%)
28.87
22.21
26.15
17.44
21.05
Profit After Tax to Average

Networth (%)
26.05
27.56
33.04
22.46
22.99
Networth per Equity Share (Rupees)
86.72
108.09
134.51
153.05
177.13
Dividend %
35.00
50.00
120.00
120.00
120.00
Dividend Payout %
17.22
18.61
29.94
37.16
31.61
Debt Equity Ratio
Production Performance
(Qty in / 000 MT)
Year
Crude
Net Gas
Intake
Light
Middle
Distillates Distillates
Lube Base
Stock
Heavy
Ends
Wax
Others
Fuel &
Loss
2002 - 2003
6819.4
20.2
1382.4
3170.7
252.0
1466.0
21.6
10.6
536.2
2003 - 2004
*7039.9
25.3
1438.0
3390.1
232.9
1389.3
27.2
22.4
565.4
2004 - 2005
8922.9
28.8
1620.2
4376.6
245.1
1853.2
24.8
-9.6
812.7
2005 - 2006
10361.7
20.6
2064.8
5010.5
195.9
2106.8
25.5
15.1
943.1
2006 - 2007
10402.0**
27.16
2075.7
5051.3
187.3
2117.6
25.1
(2.2)
947.2
Production figures includes 108 TMT of Crude processed in 3 MMTPA Crude Unit on trial basis.
** Figures for the year 2006-07 do not include 6.28 TMT of LPG and 1.809 TMT of Naphtha from the Gas Separation
Unit at CBR.
81
Funds Flow Statement
(Rs. in Lakhs)
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
24405.49
10201.93
31604.45
12339.85
39300.65
20938.04
27719.36
23603.53
35621.06
24193.78
1910.65
2410.57
53.31
7311.60
53.31
20446.67
95.17
1596.73
202.11
673.14
38928.64
51309.21
80738.67
53014.79
60690.09
0.48
0.55
0.00
0.00
0.00
87500.00
135000.00
0.00
0.00
5500.00
87500.48
135000.55
0.00
0.00
5500.00
126429.12
186309.76
80738.67
53014.79
66190.09
Uses of Funds
Investments
Increase in Fixed Assets
Repayment of Loans (Net)
Increase in Net Current Assets*
(764.56)
104945.15
15726.05
6349.19
173.29
(1200.37)
95959.03
96036.23
(4485.13)
0.00
1082.64
19440.75
(3290.24)
63505.52
0.00
9273.55
9325.42
(35043.31)
69249.81
209.32
(362.46)
22807.20
96876.07
(53130.72)
0.00
Total-Uses
126429.12
186309.76
80738.67
53014.79
66190.09
a) Current Assets
1.Interest accrued on Investments
(9.48)
2.Inventories
44602.96
3.Sundry Debtors
24812.83
4.Cash and Bank Balances
(15683.17)
5.Loans and Advances
(312.27)
6.10
5.52
(8463.94)
341.61
605.62
(12.86)
121302.40
36589.50
(272.78)
(1091.64)
41.81
73293.89
29227.67
5092.69
(7209.05)
(4.47)
6567.77
(18118.81)
(4920.66)
(269.85)
53410.87
(7505.09)
156514.62
100447.01
(16746.02)
47061.68
(3019.96)
93009.10
31197.20
36384.70
47061.68
(3019.96)
93009.10
31197.20
36384.70
6349.19
(4485.13)
63505.52
69249.81
(53130.72)
Sources of Funds
1. Internal Resources
Retained Earnings
Depreciation
Written Off
2. External Resources
Share Capital including Share
Premium
Long term Borrowing from
Govt./Others
Total-Sources
* Changes in Working Capital
b) Less:Current Liabilities and

Provisions
c) Working Capital (a-b)
82
Value Added Statement

(Rs. in Lakhs)
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
Value of Production
880698.84
953547.12
1669328.81
2580915.03
2973785.24
Less: Cost of Direct Materials
788124.08
848284.92
1505280.25
2420268.60
2795301.84
92574.76
105262.20
164048.56
160646.43
178483.40
2867.94
1162.51
632.04
1252.23
2164.90
Miscellaneous Receipts
523.70
1161.41
5937.32
1558.60
3442.00
Profit on Sale of Assets
26.64
37.68
155.54
568.08
28.31
95993.04
107623.80
170773.46
164025.34
184118.61
Operating Expenses
24419.36
33918.61
40753.31
50606.66
52804.53
Interest
10665.18
4679.76
15665.72
17402.67
18829.87
Depreciation
10201.93
11745.90
20938.04
23584.05
24193.78
1910.65
53.31
53.31
95.17
202.11
18507.10
17221.60
33666.27
24240.36
31560.99
5215.14
7446.13
17870.71
17870.71
17869.37
668.19
954.04
2525.45
2506.36
3036.90
24405.49
31604.45
39300.65
27719.36
35621.06
95993.04
107623.80
170773.46
164025.34
184118.61
Value Added
Interest income
Applied Towards

Income Tax (including
Deferred Tax and FBT)
Dividend
Retained Earnings
83
A Ten Year Profile

2000-01
2001-02
14710
100456
115166
100585
14900
108511
123411
115246
199174
215751
238657
14900
88290
103190
125793
24913
253896
Intangible Assets (including WIP)

Less: Amortisation
Investments
Working Capital
Total
157472
62313
95159
18149
69188
182496
192827
70187
122640
1720
74814
199174
204737
78334
126403
1798
87550
215751
217335
88543
128792
1903
107962
238657
261526
96520
165006
3161
85729
253896
Income
Sales
Interest
Inventory Difference
Adjustment - Prior Years
Total
272008
6249
1904
-3894
109
276376
374739
6871
3056
644
-22
385288
551429
2872
1004
15516
-50
570771
713262
3929
883
-5222
951
713803
627309
2882
1966
2336
-22
634471
Expenditure
Raw Materials
Manufacturing Expenses
Salaries & Benefits to Employees
Administration Expenses
Interest
Depreciation
Total
213014
17109
4613
4921
14187
8085
261929
308491
18671
5272
6188
11201
7900
357723
498770
22180
7451
6508
8598
8096
551603
630676
27024
9473
8538
13146
10203
699060
559807
31089
6566
7410
12809
7902
625583
Profit Before Tax

14447
1519
27565
7071
19168
4854
14743
2500
8888
2517
Profit After Tax

Dividend
12928
3970
397
20494
5149
515
14314
4413
1022
12243
3705
378
6371
2980
-
1.00
8.78
15.17
27.50
33.78
0.87
13.92
20.77
35
27.89
0.87
9.72
12.93
30
37.61
0.93
8.21
10.26
25
33.35
1.22
4.28
5.62
20
46.77
What We Owe
Share Capital
Reserves *
Networth
Borrowings
Total
What We Own
Fixed Assets (including Capital WIP)
Less: Depreciation
Debt/Equity
Earnings per share (Rs)
Profit After Tax to Average Networth (%)
Dividend (%)
Dividend Payout (%) (including Dividend
Distribution Tax)
* After adjusting Miscellaneous Expenditure
1997-98
1998-99
14710
76381
91091
91405
14710
91576
106286
92888
182496
84
1999-2000
(Rs. in Lakhs)
What We Owe
Share Capital
Reserves *
Networth
Borrowings
Total
What We Own
Fixed Assets (including Capital WIP)
Less: Depreciation
2002-03
2003-04
2004-05
2005-06
2006-07
14900
114433
129333
197567
27324
354224
14900
146091
160991
236531
34636
432158
14900
185445
200345
239746
55082
495173
14900
213051
227951
274789
56679
559419
14900
248874
263774
183413
57352
504539
366441
106692
259749
475323
138925
336398
5980
506
5474
2279
151023
495173
483316
160627
322689
6011
1107
4904
11553
220273
559419
502939
181038
321901
6011
1705
4306
11190
167142
504539
Investments
Working Capital
Total
2397
92078
354224
458312
118920
339392
3998
22
3976
1197
87593
432158
Income
Sales
Interest
Inventory Difference
Adjustment - Prior Years
Total
862995
2868
1171
17704
-243
884495
947597
1163
1878
5951
-780
955809
1629588
632
6965
39740
-229
1676697
2540918
1252
2931
39996
833
2585930
2934949
2165
4231
38836
0
2980181
Expenditure
Raw Materials
Manufacturing Expenses
Salaries & Benefits to Employees
Administration Expenses
Interest
Depreciation
Total
725030
68799
8654
12349
10665
10202
835699
768606
87998
10031
15522
4680
11746
898583
1280537
233487
9357
23349
15666
20938
1583334
1978415
449922
9683
34587
17403
23584
2513594
2314838
492038
15063
27130
18830
24194
2892093
Profit Before Tax

48796
18507
57226
17221
93363
33666
72336
24240
88088
31561
Profit After Tax

Dividend
30289
5215
668
40005
7446
954
59697
17871
2525
48096
17871
2506
56527
17869
3037
1.53
20.31
26.05
35
19.42
1.47
26.86
27.56
50
21.00
1.20
40.08
33.04
120
34.17
1.21
32.29
22.46
120
42.37
0.70
37.96
22.99
120
36.98
Intangible Assets (including WIP)

Less: Amortisation
Debt/Equity
Earnings per share (Rs)
Profit After Tax to Average Networth (%)
Dividend (%)
Dividend Payout (%) (including Dividend
Distribution Tax)
* After adjusting Miscellaneous Expenditure
85
FOR THE KIND ATTENTION OF SHAREHOLDERS:
SUB : TRANSFER OF UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND
The unclaimed dividend declared at the 34th AGM held on 18.09.2000 for the financial year ended 31.03.2000 will be
transferred by the Company on or before 17.10.2007 to the Investor Education and Protection Fund in accordance
with the rules framed in this regard by the Government.
Similarly, the unclaimed dividend declared at the 35th AGM held on 10.09.2001 for the financial year ended 31.03.2001
will be transferred by the Company on or before 09.10.2008 to the Investor Education and Protection Fund.
Therefore, Members who have not encashed their Dividend Warrants in respect of the above dividend, validity period
of which has expired, may approach either the Company or its Share Transfer Agents, viz., Karvy Computershare
Private Limited, for obtaining duplicate Dividend Warrants immediately.
COMPANY SECRETARY
86
ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORMAT

To
To
(In Case of Physical Holding)

Karvy Computershare Private Limited
Unit : Chennai Petroleum Corporation Ltd.
Plot Nos. : 17 to 24, Vithalrao Nagar, Madhapur,
HYDERABAD - 500 081.
(In case of Electronic Holding)

The Depository Participant
Dear Sir,
FORM FOR ELECTRONIC CLEARING SERVICES FOR PAYMENT OF DIVIDEND
I wish to participate in the Electronic Clearing Services (ECS) and give below the details of my bank account, to which
you may electronically credit the payment due to me against the reference folio number mentioned below:
1. For Shares held in physical form
Folio No.
2. For Shares held in electronic form

(Shareholders holding shares in electronic form i.e. in Demat mode, should forward this form to their respective
Depository Participant).
DP ID
Client ID
3. Shareholders Name : Shri/Smt/Kum./M/s ..........................................................................................................................

................................................................................................................................
4. Shareholders Address...............................................................................................................................................................
................................................................................................................................................................
5. Particulars of Bank :
*
Bank Name
: ..........................................................................................................................................
Branch Name & Address
: ............................................................................................................................................
Mention the 9 digit-code number of the bank and branch appearing on the MICR cheque issued by
the bank
: ............................................................................................................................................
(Please attach the photocopy of a cheque or a cancelled bank cheque issued by your bank for verifying the
accuracy of the code number)
*
Account Type (Please Tick) : Savings
Current
Cash Credit
Account Number (as appearing on the cheque book) : ...............................................................................................
6. Date from which the mandate should be effective :

.......................................................................................................................
I, hereby, declare that the particulars given above are correct and complete. If any transaction is delayed or not effected at
all for reasons of incomplete or incorrect information, I would not hold the company / Registrars & Share Transfer Agents
of the Company responsible. I also undertake to advise any change in the particulars of my account to facilitate updation
of records for purpose of credit of dividend amount through ECS.
Place
Date
Signature of the First Shareholder
87

PROXY
Folio No. :
-----------------------------------No. of Shares :
-----------------------------------I/We ........................................................ of ........................................................... in the District of ................................................
being member(s) of the above named Company hereby appoint ............................... of ............................... in the District
of ............................... or failing him/her ............................... of ............................... in the District of ............................... as
my/our proxy to vote for me/us on my/our behalf at the Forty first Annual General Meeting of the Company to be held
on the 10th day of September 2007 and at every adjournment thereof.
Signed this ............................... day of ............................... 2007.
Full Name ...........................................................
For Office use only.
Affix 30 paise
Revenue Stamp
Proxy no. :________________________
Notes :
1.
The instrument of proxy, to be valid, should be deposited at the Registered Office at 536, Anna Salai, Teynampet,
Chennai 600 018, 48 hours before the meeting.
2.
The instrument of proxy should be executed on 30 paise revenue stamp.

Registered Office: 536, Anna Salai, Teynampet, Chennai 600 018.
ATTENDANCE SLIP
PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF KAMARAJ ARANGAM,
CHENNAI 600 006.
---------------------------------------------------------------------------------------------------------------------------------------------------------NAME OF THE MEMBER/PROXY
FOLIO NO.
---------------------------------------------------------------------------------------------------------------------------------------------------------I hereby record my presence at the FORTY FIRST ANNUAL GENERAL MEETING at 3.00 p.m. on 10th SEPTEMBER
2007 at KAMARAJ ARANGAM, CHENNAI 600 006.
---------------------------------------------------------------------------------------------------------------------------------------------------------SIGNATURE OF THE MEMBER OR PROXY :
---------------------------------------------------------------------------------------------------------------------------------------------------------Note : Members who come to attend the meeting are requested to bring their copies of Annual Report with them.
89

(A group company of IndianOil)
Dear Shareholders,
As you may be aware, the equity shares of the Company are traded in dematerialized form with effect from 15.02.1999.
To facilitate holding and tranfer of equity shares of the Company in the Electronic mode, the Company had also
signed a tripartite agreement with both the depositories viz., National Securities Depository Limited and Central
Depository Services (India) Limited.
Electronic trading of shares will facilitate easy and quick transfer of shares by the shareholders.
Other benefits of dematerialisation and trading in electronic system are as follows:
Safety from bad delivery and fake certificate.
You can even freeze your account with the Depository Participant, that means, you can lock your account so that
the Depository Participant will not be able to carry out any transactions without your prior authorization.
Faster and simpler process of trading settlement.
No stamp duty on transfers.
No courier / postal charges.
No odd lot holding problem : sale and purchase could be for any quantity i.e. there is no restriction as to the
number of shares that can be transferred as a minimum quantity.
Pledge facility is available in electronic shares i.e., the system provides facilities to pledge / hypothecate
dematerialized securities if both pledgee (lender) and pledgor (borrower) hold accounts in depository system.
Banks are giving preference to lend money by accepting dematerialized shares as security.
Direct allotment in electronic form on public / rights / bonus issue, etc.
No hassle of filling in transfer deeds and lodging / dispatching the transfer documents with the Company, thus
avoiding a lot of paper work.
Shareholder no longer has to wait for the shares to be transferred in his name and suffer delays on account of
processing time.
In addition to the above advantages, the problem relating to loss of original share certificates and issue of
duplicate share certificates can be avoided, if the shares are held in electronic form.
In view of what has been stated above, we request you to kindly expedite opening of your depository account with any
of the depository participants and dematerialize your shares of CPCL.
In case you require any further information including the names of Depository Participants in the country, please
contact the Share Transfer Agents of the Company at the following address:
Karvy Computershare Private Limited
Unit : CPCL
Plot Nos.: 17 to 24, Vithal Rao Nagar,
Madhapur, Hyderabad 500 081.
Ph : 040 2342 0818 / 2342 0828
e-mail : madhusudhan@karvy.com & mohsin@karvy.com
Assuring you of our best services at all times.
Yours Sincerely,
M. Sankaranarayanan
Company Secretary
Place : Chennai
Date : July 11, 2007
91
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B - _ob : madhusudhan@karvy.com & mohsin@karvy.com
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92
Continuous Ambient
Air Monitoring Station
Nagaraj & Co. Pvt. Ltd.

CPCL Annual Report 2007

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CPCL Annual Report 2007

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Nagaraj & Co. Pvt. Ltd.

Chennai Petroleum Corporation Limited

Report of the Statutory Auditors

ECS Mandate Format

Proxy / Attendance Slip

Cauvery Basin Refinery

M/s. B. Purushottam & Co.

Chennai Petroleum Corporation Limited

Mr. K.K. Acharya

Mr. N.C. Sridharan

Mr. A.M. Uplenchwar

Mr. B.N. Bankapur

Chief Executive Officer,

Mr. K. Suresh, I.A.S.

Chairman, Chennai Port Trust

Mr. Mansoor Rad

Mr. Venkatraman Srinivasan

Prof. M.S. Ananth

Mr. K.L. Kumar

Mr. Ravi Capoor, I.A.S.

Mr. Pramod Nangia

Chennai Petroleum Corporation Limited

Mr. N.K. Natarajan

Mr. N.K. Rajamani

Mr. N.V. Kalaivanan

By order of the Board

Chennai Petroleum Corporation Limited

The proxy need not be a member of the Company.

Mr.L.Sabaretnam was appointed on the Board effective 28.02.2002. He is a Post-Graduate in Business

Chennai Petroleum Corporation Limited

COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

The Board of Directors of CPCL consisted of sixteen Directors as on 31.03.2007.

The break-up of the total composition of the Board as on 31.3.2007 is as follows:

Chennai Petroleum Corporation Limited

Director (Pipelines) and Director (Refineries) of Indian Oil Corporation Limited.

One Director, who is the Chairman, Chennai Port Trust.

Four non-official Directors.

Conduct of Board Meetings

Information placed before the Board

Board Meeting Date

Details relating to:

Number of other directorships, and

Name of the Directors

Mr. K.K. Acharya

Mr. Venkatraman Srinivasan

Mr. K.L. Kumar

Prof. M.S. Ananth

Mr. Ravi Capoor

Mr. Pramod Nangia

Mr. Mansoor Rad or his alternate Director

Mr.M.Vaezi or his alternate Director

Chennai Petroleum Corporation Limited

COMMITTEES OF THE BOARD

Mr.L.Sabaretnam, Chief Executive Officer, ICL Sugars Limited, Chennai.

To investigate any activity within its terms of reference;

To seek information from any employee;

To obtain outside legal or other professional advice;

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

Matters required to be included in the Directors Responsibility Statement to be included in the

Disclosure of any related party transactions.

Qualifications in draft audit report.

Chennai Petroleum Corporation Limited

Mr. N.C. Sridharan,

No stock option scheme is prevalent in the Company.