Chennai Petroleum Corporation Limited 2

Corporate Information Board of Directors 4 Executives 5 Notice 6 Corporate Governance 9 3

Chennai Petroleum Corporation Limited Board of Directors Mr. S. Behuria Chairman Mr. K.K. Acharya Managing Director Mr. N.C. Sridharan Director (Finance) Mr.S. Chandrasekaran Director (Technical) Mr. K. Balachandran Director (Operations) Mr. V.C.Agrawal Director (HR) Indian Oil Corporation Limited Mr. Sanjay Gupta Director (MC & IOC), Ministry of Petroleum & Natural Gas Government of India Mr. Mansoor Rad Finance Director, Naftiran Intertrade Company Limited Mr. M.H. Ghodsi Director Naftiran Intertrade Company Limited Mr. L. Sabaretnam Chief Executive Officer, Coromandel Sugars Limited Mr. Venkatraman Srinivasan Senior Partner, V. Sankar Aiyar & Co., Chartered Accountants Prof. M.S. Ananth

Director, Indian Institute of Technology, (IIT), Chennai. 4

Executives Mr. N. Sankaran Chief Vigilance Officer 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 (Corp. Plng., Devt. and R&D) Mr. N.V. Kalaivanan General Manager (Cauvery Basin Refinery) Mr. D. Selvaraj General Manager (Projects) Mr. R. Chidambaram General Manager (Logistics & Utilities) Mr. K. Sankar General Manager (Maintenance) Mr. S. Venkataramana General Manager (Manufacturing) Mr. M. Sankaranarayanan Company Secretary 5

Chennai Petroleum Corporation Limited NOTICE Notice is hereby given that the 43rd Annual General Meeting of the Shareholders of the Company will be held at 2.30 P.M. on Monday the 7th September 2009 at Kamaraj Arangam, 492, Anna Salai, Teynampet, Chennai-600 006 to transact the following businesses: ORDINARY BUSINESSES: 1. To receive, consider and adopt the Audited Profit & Loss Account of the Company for the period from 1st April 2008 to 31st March 2009 and the Audited Balance Sheet as at 31st March 2009, together with the Directors Report and the Auditors Report. 2. To appoint a Director in place of Mr.S. Behuria, who retires by rotation and bei ng eligible, offers himself for re-appointment. 3. To appoint a Director in place of Mr.L.Sabaretnam, who retires by rotation and b eing eligible, offers himself for re-appointment. 4. To appoint a Director in place of Mr.N.C.Sridharan, who retires by rotation and being eligible, offers himself for re-appointment. SPECIAL BUSINESS: 5. APPOINTMENT OF MR. SANJAY GUPTA AS A DIRECTOR To consider and, if thought fit, to pass, with or without modification, the foll owing resolution as an Ordinary Resolution : RESOLVED that Mr. Sanjay Gupta be and is hereby appointed as a Director of the Co mpany . By order of the Board Date : 30.07.2009 M. SANKARANARAYANAN Place : Chennai Company Secretary Notes: 1. A member entitled to attend and vote at the meeting is entitled to appoint anoth er 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 Regis tered 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 meeti

ng. 5. Members, who hold shares in the dematerialised form, are requested to bring thei r 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 i n respect of Resolution set out under Special Business of the Notice is annexed. 6

7. The Register of Members and the Share Transfer Books of the Company will remain closed from 01.09.2009 to 07.09.2009 (both days inclusive). 8. Members are requested to immediately intimate any change in their addresses regi stered with the Company. 9. Securities and Exchange Board of India (SEBI), vide Circular No.MRD/DoP/Cir-05/2 009 dated May 20, 2009, has informed that in respect of Securities Market transactions and off-market / private transactions involving transfer of shares in physical form of listed companies, it shall be m andatory for the transferees to furnish copy of PAN Card to the Company / Registrars and Transfer Agents for reg istration of such transfer of shares. In view of the above Circular dated 20.05.2009, all requests for transfer of sha res received after 20.05.2009 will be processed only if the requests are accompanied by a copy of the PAN Card . 10. The shares of the company are compulsorily traded in dematerialized form and the refore, 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 m ake 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. A brief Resume of the Directors of the Company, seeking appointment/re-appointme nt at this Annual General Meeting, and their expertise in specific functional areas, is given as part of t he Notice of 43rd Annual General Meeting. 13. 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. EXPLANATORY STATEMENT PURSUANT TO SECTION 173 (2) OF THE COMPANIES ACT, 1956 Item No.5 Mr. Sanjay Gupta was appointed as an Additional Director with effect from 19.06. 2009. As per the provisions of Section 260 of the Companies Act, 1956, Mr. Sanjay Gupta will hold Office only u pto the date of the 43rd Annual General Meeting of the Company. A Notice under Section 257 of the Companies Act, 1956 has been received proposin g the appointment of Mr. Sanjay Gupta as a Director. Hence, this resolution is proposed.

Memorandum of Interest : None of the Directors is interested in the resolution except Mr. Sanjay Gupta. 7

Chennai Petroleum Corporation Limited BRIEF RESUME OF THE DIRECTORS OF THE COMPANY, SEEKING APPOINTMENT/RE-APPOINTMENT AT THE 43rd ANNUAL GENERAL MEETING 1. Mr.Sarthak Behuria was appointed on the Board effective 01.03.2005. He is an alu mnus of St. Stephen s College, Delhi and the Indian Institute of Management (IIM), Ahmedabad. He has m ore 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 a nd IOT Infrastructure and Energy Services Limited. 2. Mr.L.Sabaretnam was appointed on the Board effective 28.02.2002. He is a Post-Gr aduate in Business Administration from the University of Madras. He is the Chief Executive Officer of Coromandel Sugars Limited. Mr.L.Sabaretnam is the Chairman of Oriental Solutions Private Limited, LMS Build ers & Engineers Pvt. Ltd., and Archi Structural Constructions India Pvt. Ltd. He is a Director of Biosynth Life Sciences India Limited and Pacific Datalabs Pvt. Ltd. He is an Advisor of India Cements Limited and Trustee of T.S.Narayanaswamy Colle ge 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 Gri evance Committee and Board Projects Sub- Committee of CPCL. 3. Mr.N.C.Sridharan was appointed on the Board effective 05.03.2004, as Director (F inance) for a period of five years. Government of India extended the tenure of Mr.N.C.Sridharan upto 31. 05.2011, the date of his superannuation or until further orders, whichever event occurs earlier. Mr.N.C. Sridharan is a Fellow Member of Institute of Chartered Accountants of In dia and a Fellow Member of the Institute of Company Secretaries of India. He has three decades of experience in Engineering, Chemical, Pharmaceuticals, Fibrecement, Cotton Spinning and Software industries in Corpora te Finance, Treasury, Accounts, Loans Syndication, Project Finance, Commercial Taxation Direct & Indirect and Se cretarial & 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 Lim ited. 4. Mr. Sanjay Gupta was appointed on the Board effective 19.06.2009. He holds a M.T ech Degree in Production Engineering from IIT, Delhi. He belongs to 1994 batch of Indian Revenue Service (IRS). He has more than two decades of multi-sectoral experience in production, Income Tax, Administration, Petroleum Technology, e-governance project of Ministry of Corporate Affairs, etc. Presently, he is the Director (MC & IOC), Ministry of Petroleum & Natural Gas, Government of India. By order of the Board Date : 30.07.2009 M. SANKARANARAYANAN Place : Chennai Company Secretary 8

Corporate Governance 1.0 COMPANY S PHILOSOPHY ON CORPORATE GOVERNANCE Corporate Governance is the mechanism by which the values, policies and principl es of a Company are inculcated and manifested. The essence of good Corporate Governance lies in prom oting and maintaining transparency, integrity and accountability in the higher echelons of Management. It is a firm belief of your Company that good Corporate Governance should result in sustainable development of all stakeholders, efficient management and distribution of wealth, effective discharge of Corporat e Social Responsibility, application of best Management practices, adherence to moral and ethical standar ds and compliance of all applicable laws in both letter and in spirit. Your Company views Corporate Governance as a powerful tool in the hands of the M anagement which helps to ensure sustainable growth of the Company which in turn powers economic develo pment and builds better societies through sharing of benefits and opportunities that flow from free, fai r and efficient markets. Your Company believes sound Corporate Governance practices inspire investors and lend or confidence, spur domestic and foreign investment and improve competitiveness. Your Company continues its endeavours in adopting well established Corporate Gov ernance practices and in recognition of this fact, CPCL was shortlisted as one of the top 25 Companies adopting good Corporate Governance by the Institute of Company Secretaries of India for the third time i n a row. 2.0 GOVERNANCE STRUCTURE The Corporate Governance process in the Company takes place at three levels: 2.1 BOARD OF DIRECTORS The Board of Directors of the Company consists of an optimum combination of whol e-time Functional Directors, part-time non-executive Directors and Independent Directors. The day-to-day business is conducted by the management of the Company under the direction of the Managing Director, Functional Directors and supervision of the Board. The Board of Directors reviews and discusses the performance of the Company, its future plans, strategies and o ther relevant issues pertaining to the Company. In addition, the Board of Directors performs specific functions relating to asse ssing the critical risks faced by the Company and measures undertaken for their mitigation. 2.2 EXECUTIVE COMMITTEE The Executive Committee of the Company which is one level below the Board consis ts of Managing Director, Functional Directors, Chief Vigilance Officer and Company Secretary. D

uring 2008-09, the Executive Committee has met 18 times. All new initiatives and major project prop osals are discussed and deliberated by the Executive Committee before circulating to the Board of Di rectors for approval. 9

Chennai Petroleum Corporation Limited 2.3 MANAGEMENT COMMITTEE Management Committee of the Company which comprises of General Managers and Head s of Department regularly meets once a month wherein highlights of activities of vari ous departments including areas of concern are discussed and deliberated. 3.0 BOARD OF DIRECTORS 3.1 The total strength of the Board as on 31.03.2009 is 12 as against the maximum st rength of 16 prescribed under the Articles of Association of the Company. 3.2 As on 31.03.2009, CPCL Board comprises of the following categories of Directors: 3.2.1 One Non-Executive Chairman, who is the Chairman of Indian Oil Corporation Limite d (the Holding Company). 3.2.2 Four whole-time Functional Directors, viz., Managing Director, Director (Finance ), Director (Technical) and Director (Operations). 3.2.3 Director (HR) of Indian Oil Corporation Limited, representing holding company. 3.2.4 One Government Director who is Chairman, Chennai Port Trust. 3.2.5 Two Directors nominated by National Iranian Oil Company, one of the promoters, i n terms of the Formation Agreement. 3.2.6 Three non-official Directors. 3.3 Out of the total number of twelve Directors as on 31.3.2009, eight Directors wer e Non-Executive Directors. Thus the Company meets the requirement of the number of Non-Executive Directors being not less than 50% of the Board of Directors of the Company. As per the amendment to Clause 49 of the Listing Agreement, introduced by SEBI v ide Circular dated 08.04.2008, if the non-executive Chairman is a Promoter of the Company or is rel ated to any promoter or person occupying Management positions at the Board level or at one level belo w the Board, atleast one-half of the Board of the Company shall consist of Independent Directors. Sin ce, the Company has a non-executive Chairman who is on the Board of Indian Oil Corporation Limit ed, the Company needs to have 6 Independent Directors. Presently, the Company has three Independent Directors as against the requiremen t of six. 3.4

Conduct of Board Meetings The Company has well defined procedures for conducting the Meetings of the Board of Directors and Sub-Committees of the Board so as to facilitate decision making in an informed a nd efficient manner. The dates of the Board Meetings and the venue are decided after ascertaining the convenience of the Chairman, well in advance, to enable the Directors plan their schedules. 10

Agenda proposals are circulated well in advance to all the Directors. Only urgen t matters and financial results are circulated to the Directors at the time of the Meeting wit h the approval of the Chairman. Regular presentations on physical performance, financial performan ce, status of Projects, etc. are made to the Board as per statutory as well as based on oth er managerial requirements. 3.5 Information placed before the Board The Board has full access to any information within the Company. The information regularly supplied to the Board inter-alia, includes the following : Items Periodicity Revenue Budget / Capital Budget Yearly Financial statements Quarterly Status of Projects Quarterly Risk Assessment and Minimisation Reports Yearly Report on compliance of Applicable Laws Yearly Report on Manpower Quarterly Disclosure of Interest by Directors Yearly Progress of Arbitration cases Quarterly Report on Share Transfers, Transmissions, etc. Every Board Meeting 3.6 Six Board Meetings held during the year 2008-09 on the following dates : Board Meeting No. Board Meeting Date 255 256 257 258 259 260 15.05.2008 18.07.2008 08.09.2008 21.10.2008 24.01.2009 24.03.2009

3.7 Details relating to : (a) Attendance of Directors at the Board Meetings held during the financial year Apr il 2008 to March 2009 and at the last Annual General Meeting held on 08.09.2008 (b) Number of other directorships, and 11

Chennai Petroleum Corporation Limited (c) Number of memberships / chairmanships held by the Directors in the committee s of various companies, are given below: Name of the Directors No. of Board Whether Other Committee Committee Meetings attended last Directorships Memberships Chairmanships Attended AGM? Mr.S.Behuria 6 Yes 2 -Mr. K.K. Acharya 6 Yes 2 -Mr. N.C.Sridharan 6 Yes 2 3 Mr. S. Chandrasekaran 6 Yes 1 2 Mr. K. Balachandran 6 Yes 1 2 Mr. V.C.Agrawal 6 Yes 1 3 Mr. Rohit Bhardwaj (Refer Note-1) 5 Yes -1 Mr. L.Sabaretnam 5 Yes 7 -3 Mr.K.Suresh 1 Yes 3 1 1 Mr. Venkatraman Srinivasan 6 Yes 4 2 1 Mr. K.L. Kumar (Refer Note - 2) 3 Yes 1 5 Prof. M.S. Ananth 1 No 3 -1 Mr. Pramod Nangia (Refer Note 4 Yes --3)

Mr. Mansoor Rad or his alternate Director 4 Yes 1 2 Mr. M.Vaezi or his alternate Director (Refer Note 2 Yes 1 3 Notes : 1. Mr. Rohit Bhardwaj, Executive Director (M&I), IOC ceased to be a Director effect ive 28.2.2009 and Five Board Meetings were held during his tenure in the financial year 2008-09. 2. Mr. K.L. Kumar, Former C&MD, Kochi Refineries Limited, ceased to be a Director e ffective 24.03.2009. Five Board Meetings were held during his tenure, in the financial year 2008-09. 3. Mr. Pramod Nangia, Director (M), Ministry of Petroleum & Natural Gas, ceased to be a Director effective 24.03.2009, consequent to completion of his tenure in the Ministry of Petroleum & Natural Gas. Five Board Meetings were held during his tenure, in the financial year 2008-09. 4. Mr. M. Vaezi, Director, Naftiran Intertrade Company Limited ceased to be a Direc tor effective 25.04.2009 as Mr. Mohammed Hassan Ghodsi has been appointed as a Director in his place. 4)

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4.0 COMMITTEES OF THE BOARD 4.1 The Board has constituted three Sub-Committees of the Board, viz., Audit Committ ee, Shareholders / Investors Grievance Committee and Board Projects Sub-Committee. 4.2 The minutes of the above Sub-Committee Meetings are placed before the Board of D irectors for confirmation. Action Taken Reports on the decisions of the above Sub-Committee a re also placed before the Sub-Committee for information. 4.3 AUDIT COMMITTEE 4.3.1 Composition of the Committee as on 31.3.2009 1. Mr. L.Sabaretnam, Chief Executive Officer, Coromandel 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., Chartere d Accountants, Mumbai. Mr. L.Sabaretnam, an Independent Director is the Chairman of the Committee. Note : Mr. K.L. Kumar, Former C&MD, Kochi Refineries Limited was a member of the Commit tee till 24.03.2009. 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 neces sary. 5. To have full access to information contained in the records of the company and e xternal professional advice, if necessary. 4.3.4 FUNCTIONS 1. Oversight of the Company s financial reporting process and the disclosure of its f inancial 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. 13

Chennai Petroleum Corporation Limited 4. Reviewing, with the management, the annual financial statements before submissio n to the Board for approval, with particular reference to : a) Matters required to be included in the Directors Responsibility Statement to be i ncluded in the Board s Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1 956. 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 judgment b y management. d) Significant adjustments made in the financial statements arising out of audit fi ndings. e) Compliance with listing and other legal requirements relating to financial state ments. f) Disclosure of any related party transactions. g) Qualifications in draft audit report. 5. Reviewing, with the management, the quarterly financial statements before submis sion to the Board for approval. 6. Reviewing with the Management, the performance of statutory and internal auditor s, adequacy of the internal control systems. 7. Reviewing the adequacy of internal audit function, if any, including annual plan for internal audit, the structure of the internal audit department, staffing and seniority of the of ficial 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 i nto matters where there is suspected fraud or irregularity or a failure of internal control system s of a material nature and reporting the matter to the Board. 10. Discussion with statutory auditors before the audit commences, about the nat ure 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 depo sitors, debenture holders, shareholders (in case of non-payment of declared dividends) and credito rs. 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. 14

4.3.5 The details of Audit Committee Meetings held during the Financial Year 2008-09 a nd the Members present are given below: S.No. Meeting Date Members Present 1. 15.05.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan, Mr.K.L.Kumar and Mr.Mansoor Rad. 2. 16.07.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan, Mr.K.L.Kumar and Mr.Mansoor Rad. 3. 08.09.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and Mr.K.L.Kumar. 4. 20.10.2008 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and Mr.K.L.Kumar. 5. 23.01.2009 Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and Mr.Mohammad Hassan Ghodsi Alternate Member for Mr.Mansoor Rad. 6. 23.03.2009 Mr.L.Sabaretnam and Mr.Venkatraman Srinivasan . 4.4 REMUNERATION COMMITTEE 4.4.1 The Remuneration of the whole time Functional Directors are determined by the Go vernment of India. As such, the need for a Remuneration Committee is not felt by the Company in vie w of the fact that the Company is a Government Company as per Section 617 of the Companies Act, 1956. 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, al lowances 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. The gross value of the fixed component of the remuneration, as explained above, paid to the whole time functional Directors, during the financial year 2008-09 is given below: (Rs. in Lakhs) Name of the Director Salaries & Contribution to Contribution to Other Total Allowances Provident Fund Superannuation Benefits Fund and Gratuity Mr.K.K. Acharya, Managing Director 16.89 1.29 1.29 0.73 20.20 Mr. N.C. Sridharan, Director (Finance) 11.18 0.71 0.70 2.56 15.15 Mr. S. Chandrasekaran Director (Technical) 12.78 0.79 0.80 0.30 14.68 Mr. K. Balachandran Director (Operations) 16.14 1.24 1.24 0.89 19.51

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Chennai Petroleum Corporation Limited 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 A sitting fee of Rs.10,000/- is paid by the Company for each meeting of the Boar d/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.1,90,000/Mr. Venkatraman Srinivasan -Rs.1,20,000/Mr. K.L. Kumar -Rs. 80,000/ Prof. M.S. Ananth -Rs. 10,000/ 4.4.6 Criteria for payment to Non-executive Directors : As per Article 90 A of the Articles of Association of the Company, the remunerat ion payable to the Directors of the Company, other than full-time Directors of the Company or Fulltime employees of the Shareholders for attendance at Meetings of Board of Directors or any Committee t hereof, 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 220 th Meeting held on 28.10.2002 has fixed a sum of Rs. 5000/- as Sitting fees to certain categories o f 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 and the amount of sitting fees has been increased from Rs.5000/- to Rs.10000/- by the Board of Directors of the Com pany at the 244th Board Meeting held on 25.07.2006 for attending each meeting of the Board / Sub-Committee of the Board. 4.4.7 Shares held by Non-executive Directors: Mr. S. Behuria -500 shares Mr. L. Sabaretnam -35 shares Mr. V.C. Agrawal -500 shares 4.4.8 Compliance with the Code of Conduct for Board Members and other Senior Managemen

t Personnel: As required under Clause 49 I (D) (ii) greement, a declaration signed by the Managing Director of the nior Management personnel have fully complied with the rd Members and Senior Management Personnel during the d below:

of the revised Clause 49 of the Listing A Company that all the Board Members and Se provisions of the Code of Conduct for Boa financial year ending 31.03.2009 is place

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 compl ied 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 31.3.2009 and the same was informed to the Board at the 261st Meeting held on 28.05.2009 . Date : 08.07.2009 K.K. ACHARYA Place : Chennai Managing Director 16

4.4.9 Code of Conduct for prevention of Insider Trading in dealing with the Securities of CPCL : Your Company has a Code of Conduct for prevention of Insider Trading in dealing with the securities of CPCL which prohibits purchase / sale of shares of the Company by t he designated employees and Directors while in possession of unpublished price sensitive infor mation in relation to the Company. The Board of Directors of the Company at the 260th Meet ing held on 24.03.2009 approved the revised Code pursuant to the amendments made by SEBI to the SEBI (Prohibition of Insider Trading) Regulations, 1992. The revised Code is ava ilable in the Intra-net of the Company. 4.5 SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE 4.5.1 Composition of the Committee as on 31.3.2009:1. Mr.L.Sabaretnam, CEO, Coromandel Sugars Limited 2. Mr.N.C.Sridharan, Director (Finance) 3. Mr.S.Chandrasekaran, Director (Technical) 4. Mr.M.Vaezi, Director, Naftiran Intertrade Company Ltd. Note : Mr.M.Vaezi, Director, Naftiran Intertrade Company Ltd. ceased to be a mem ber effective 25.04.2009. Mr.L.Sabaretnam, a Non-Executive Director is the Chairman of the Committee. 4.5.2 The details of Shareholders / Investors Grievance Committee Meetings held during t he Financial Year 2008-09 and Members present are given below: S.No. Meeting Date Members Present 1. 20.10.2008 Mr.L.Sabaretnam and Mr.N.C.Sridharan 2. 23.03.2009 Mr.L.Sabaretnam, Mr.N.C.Sridharan and Mr.S.Chandrasekaran 4.5.3 Name and designation of Compliance Officer:O Mr.M.Sankaranarayanan, Company Secretary or in his absence Mr.P.Shankar, Deputy Secretary. 17

Chennai Petroleum Corporation Limited 4.5.4 Number of shareholders complaints received during the year 2008-09, Number not so lved to the satisfaction of shareholders and Number of pending complaints for the period fro m 01.04.2008 to 31.03.2009 are given below: Sl. No. Nature of complaints Opening Balance as on 1.4.2008 Received during the Financial year 2008-09 Total Solved during the Financial year 2008-09 Pending as on 31.03.09 1 2 3 4 5 6 7 Non-receipt of dividend warrants Non-receipt of refund orders Non-receipt of share certificates Non-receipt of stickers against payment of allotment / call money Non-receipt of confirmation of Demat requests Non receipt of Annual Reports Non-receipt of Duplicate Share Certificates 0 0 0 0 0 0 0 405 9 142 16 38 39 33 405

9 142 16 38 39 33 405 9 142 16 38 39 33 0 0 0 0 0 0 0 Total 0 682 682 682 0 4.6 BOARD PROJECTS SUB-COMMITTEE (BPSC) 4.6.1 The Composition of BPSC as on 31.03.2009 is as follows: 1. Mr. L. Sabaretnam, CEO, Coromandel Sugars Limited 2. Mr. V.C. Agrawal, Director (HR), IOC Note : Mr. Rohit Bhardwaj, Executive Director (M&I), Indian Oil Corporation Limi ted was a member of the Committee till 28.02.2009 Apart from the above members, the Committee includes Director (Finance) and the concerned Functional Director, viz., Director (Technical) and Director (Operations) as add itional members. The quorum for the Committee s proceedings shall be a minimum of three members inc luding one Director nominated by Indian Oil Corporation Limited and Director (Finance). 4.6.2 Terms of Reference (a) To approve Capital investment upto Rs. 100 crore and pre-feasibility expense s upto Rs. 20 crore. (b) To recommend Investment approval beyond Rs. 100 crore to the Board of CPCL f or consideration. 18

4.6.3 The details of Board Project Sub-Committee Meetings held during the Financial Ye ar 200809 alongwith the Members present are given below: S. No. Meeting Date Members Present 1. 17.07.2008 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.Rohit Bhardwaj, Mr.N.C.Sridharan, Director (Finance) and Mr.S.Chandrasekaran, Director (Technical). 2. 07.09.2008 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.Rohit Bhardwaj, Mr.N.C.Sridharan, Director (Finance) and Mr.S.Chandrasekaran, Director (Technical). 3. 24.02.2009 Mr.L.Sabaretnam, Mr.Rohit Bhardwaj, Mr.N.C.Sridharan, Director (Finance) and Mr.S.Chandrasekaran, Director (Technical). 4. 24.03.2009 Mr.L.Sabaretnam, Mr.V.C.Agrawal, Mr.N.C.Sridharan, Director (Finance) and Mr.S.Chandrasekaran, Director (Technical). 5.0 GENERAL BODY MEETING 5.1 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 25.08.2006 Kamaraj Arangam, 492, Anna Salai, Chennai 600 006 03.00 pm Nil 10.09.2007 - do 03.00 pm Nil 08.09.2008 - do 02.00 pm One 5.2 Postal Ballot Details Postal ballot was not conducted in any of the General Meetings held so far in th e Company. 6.0 DISCLOSURES 6.1 Disclosures on materially significant related party transactions that may have p otential conflict with the interest of the Company at large: Necessary disclosures under the Accounting Standards 18 relating to the Related Party tran sactions form part of the Accounts for the year 2008-09. 6.2 Details of non-compliance by the Company, penalties, strictures imposed on the c ompany by Stock Exchange or SEBI or any statutory authority, on any matter related to capi tal markets, during the last three years:-Nil. 6.3 Disclosure of Accounting treatment

In the preparation of financial statement for the year 2008-09, the Company has not adopted an accounting treatment which is different from that prescribed in the Accounting S tandard, in respect of any transaction. 19

Chennai Petroleum Corporation Limited 6.4 Details of compliance with certain clauses of Revised Clause 49 of the Listi ng Agreement 6.4.1 Compliance of laws applicable to the Company: As per Clause 49 I (C) (iii), the Board shall periodically review compliance rep orts 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 complia nce with all laws applicable to the Company. The Board reviewed the Compliance Report of all laws applicable to the Company f or the period 01.10.2007 to 30.09.2008 at the 258th Board Meeting held on 21.10.2008. 6.4.2 Risk Assessment and Minimisation Procedures: As per Clause 49 IV (C), the Company shall lay down procedures to inform Board m embers about the risk assessment and minimization procedures. These procedures shall be periodically reviewed to ensure that executive management controls risk through means of a pr operly defined framework. Accordingly, a system had been developed and procedures have been laid down on r isk assessment and minimization. The details of reports under the Risk Assessment and Minimisation procedures for the financial year 2008-09 were reviewed by the Board at its 259th Meeting held on 24.01.09. 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 rega rding the effectiveness of the internal control systems for financial reporting. Systems have been developed to review the internal controls and to institutional ize 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 fina ncial reporting. The required certification from the Managing Director and Director (Finance) bei ng the CEO and CFO respectively was obtained and placed before the Board of Directors at th e 261st meeting held on 28.05.2009. 6.4.4. Integrity Pact : In a bid to maintain complete transparency in Contracts and procurements, your Company entered into a Memorandum of Understanding (MoU) with Transparency International India (TII) on 24.3.2009 for the implementation of Integrity Pact.

Mr. P. Shankar, IAS., (Retd.,), Former Central Vigilance Commissioner (CVC) and Mr.Justice K.Govindarajan, Retd., Judge of the Hon ble High Court of Madras are the Independe nt External Monitors, approved by CVC, for implementation of the Integrity Pact in CPCL. Int egrity Pact is applicable for contracts with a threshold value of Rs. 10 crores and above. 6.4.5 Certificate of compliance with the requirements of Clause 49 of the Listin g Agreement : Clause 49 of the Listing Agreement requires every listed Company to obtain a cer tificate from either the auditors of the Company or a Practicing Company Secretary regarding c ompliance of conditions of Corporate Governance and annex the certificate with the Directo rs Report, which is sent annually to all the shareholders. The Company has obtained a certi ficate to this effect from the Auditors of the Company and the same is given as annexure to the Directors Report. 20

Department of Public Enterprises (DPE) has also issued Corporate Governance guidelines applicable for Central Public Sector Enterprises. CPCL has complied w ith the mandatory requirement of the guidelines on Corporate Governance issued by DP E except the requirement relating to minimum number of Independent Directors. 6.4.6 Compliance with certain non-mandatory Requirements : Training to Directors in the area of Corporate Governance was one of the focused area during the year. One Director was sponsored for training programme in Corporate Governa nce organized by Standing Conference of Public Enterprises (SCOPE) in November 2008. The Board of Directors of the Company at the 260th Meeting held on 24.03.2009, h as accorded approval for the implementation of the Whistle Blower Policy in the Company. A c opy of the Whistle Blower Policy is displayed in the Intra-net of the Company. 7.0 MEANS OF COMMUNICATION 7.1 The Board of Directors of the Company approve the Un-audited Quarterly 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 newspap ers normally: The Hindu, New Indian Express, The Economic Times, Business Line, Financial Expr ess, News Today and Makkal Kural (Tamil). 7.2 The Quarterly Results, Half yearly Results and the Annual Results are placed on the Company s web site at www.cpcl.co.in. Press Releases are given on important occasions. They are also p laced on Company s website. 7.3 Quarterly Results / Annual Results, Shareholding Pattern, Annual Report are post ed on the SEBI EDIFAR website, viz., www.sebiedifar.nic.in 7.4 Chairman s Speech is also distributed to the shareholders who attend the Annual Ge neral Meeting of the Company and the same is also displayed in the website of the Company. 7.5 Management Discussion and Analysis Report forms part of the Directors Report 2008 -09. 8.0 GENERAL SHAREHOLDER INFORMATION 1. 43rd Annual General Meeting :Date & Time : 7th September 2009; 2.30 p.m. Venue : Kamaraj Arangam, No.492, Anna Salai, Chennai 600 006 2. Financial Calendar : April March 3.

Book Closure Date : 01.09.2009 to 07.09.2009 (both days inclusive) 4. Dividend despatch date : Not Applicable. 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 2009-10 has been paid. 6. Stock Code : Madras Stock Exchange Ltd. - CPCL / BSE 500110 Trading Symbol in NSE : CHENN PETRO Trading Symbol in Madras Stock Exchange : CHENNAI PET ISIN No. for dematerialized shares : INE 178A 01016 21

Chennai Petroleum Corporation Limited 7. Market Price Data-High, Low and Close during each month in the last Financial Year (in Rupees) National Stock Exchange Bombay Stock Exchange Month High Low Closing High Low Closing Apr. 2008 377.00 268.60 362.85 379.50 270.10 365.60 May 2008 408.00 320.00 338.45 403.50 320.10 338.30 June 2008 359.90 262.35 267.95 352.90 262.00 267.15 July 2008 325.00 240.20 301.60 324.00 239.15 302.85 Aug. 2008 335.50 248.05 257.80 325.00 248.00 258.15 Sep. 2008 269.00 207.00 212.05 268.00 206.25 212.15 Oct. 2008 216.00 115.10 120.55 216.00 116.50 120.65 Nov. 2008 153.95 102.50 105.15 153.80 103.95 105.40 Dec. 2008 124.80 101.00 128.25 129.50 100.80 128.25 Jan. 2009 135.00 95.15 110.35 135.00 100.05 105.80 Feb. 2009 112.50 90.00 90.60 112.85 90.10 90.85 Mar. 2009 97.80 78.00 94.40

97.00 78.00 94.45 8. Performance of CPCL s Shares in comparison to BSE and NSE Index: National Stock Exchange Bombay Stock Exchange Month Closing Index Closing Index Price (Rs.) Price (Rs.) Apr. 2008 362.85 5165.90 365.60 17287.31 May 2008 338.45 4870.10 338.30 16415.57 June 2008 267.95 4040.55 267.15 13461.60 July 2008 301.60 4332.95 302.85 14355.75 Aug. 2008 257.80 4360.00 258.15 14564.53 Sep. 2008 212.05 3921.20 212.15 12860.43 Oct. 2008 120.55 2885.60 120.65 9788.06 Nov. 2008 105.15 2755.10 105.40 9092.72 Dec. 2008 128.25 2959.15 128.25 9647.31 Jan. 2009 110.35 2874.80 105.80 9424.24 Feb. 2009 90.60 2763.65 90.85 8891.61

Mar. 2009 94.40 3020.95 94.45 9708.50 22

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 2343 1598 / 2342 0818 / 2342 08 28 Fax : 040 - 2342 0814 E-mail: mohsin@karvy.com, madhusudhan@karvy.com, mailmanager@karvy.com b) Chennai Offices: 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 Phone : 2815 3445 / 2815 1034 Fax : 2815 3181 E-mail: chennaiirc@karvy.com

600 017.

9.0 SHARE TRANSFER SYSTEM 9.1 To expedite the share transfer process, the Board of Directors has constituted a committee presently consisting of Mr.M.Sankaranarayanan, Company Secretary and Mr.P.Shankar, Deputy Secretary of the company to approve share transfers, transmission of shares, dematerialisation re quests and rematerialisation requests. 9.2 The number of transfers approved and shares transferred from 01.04.2008 to 31.03 .2009 are given below: Sl. No. Particulars Number of Shares Involved 1 Number of transfer deeds received 483 51819 2 3 Transfer deeds processed Defective transfer deeds sent to the proposed transferee for rectification of defects 215 268 22119 29700 9.3 The number of meetings held for approving the Share Transfers from 01.04.2008 to 31.03.2009 is 50. 9.4 The number of demat requests approved and shares dematted from 01.04.2008 to 31. 03.2009 in National Securities Depository Ltd. (NSDL) are given below:Sl. Number of No. Particulars Shares Involved

1 Number of demat requests received 682 89500 2 Number of demat requests processed 527 68350 3 Number of demat requests rejected, for non-receipt of physical share certificates within 30 days as per the requirement of NSDL 155 21150 9.5 The number of meetings held for approving the demat requests through NSDL from 0 1.04.2008 to 31.03.2009 is 44. 23

Chennai Petroleum Corporation Limited 9.6 The number of demat requests approved and shares dematted from 01.04.2008 to 31.03.2009 in Central Depository Services (India) Ltd. (CDSL) are given below: Sl. Number of No. Particulars Shares Involved 1. Number of demat requests received 345 37310 2. Number of demat requests processed 272 29710 3. Number of demat requests rejected, for non-receipt of physical share certificates within 30 days as per the requirement of CDSL 73 7600 9.7 The number of meetings held for approving the demat requests through CDSL from 0 1.04.2008 to 31.03.2009 is 38. 10.0 DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2009 Shareholding of Shareholders Share Amount nominal value Rs. Number % to Total Rs. % to Total Upto -5000 63248 95.78 65798310.00 4.42 5001 10000 1472 2.23 11741750.00 0.79 10001 - 20000 664 1.01 9821890.00 0.66 20001 - 30000 204 0.31 5249230.00 0.35 30001 - 40000 97 0.15 3452390.00 0.23 40001 - 50000 69 0.10 3252220.00 0.22 50001 - 100000 118 0.18 8376630.00 0.56 100001 & above 161 0.24 1381421580.00 92.77 TOTAL 66033 100.00 1489114000.00 100.00 11.0 SHAREHOLDING PATTERN AS ON 31.03.2009 NO. OF % TO No. OF SHARES TOTAL SHAREHOLDERS TOTAL SHARES SHAREHOLDERS Physical Electronic Physical Electronic Indian Oil Corporation Limited 0 77265200 77265200 51.89 0 1 1 Naftiran Inter-trade Co. Ltd. 0 22932900 22932900 15.40 0 1 1 Public (including Employees) 1487095 8574575 10061670 6.75 13286 44198 57484 Bodies Corporate 25000 7942140 7967140 5.35 79 953 1032 Banks, FIs and

Insurance Companies 200 20678580 20678780 13.89 2 19 Mutual Funds and UTI 9500 1304095 1313595 0.88 17 16 Foreign Institutional Investors 4200 7349842 7354042 Non-Resident Indians/OCBs 711300 626773 1338073 0.90 Total 2237295 146674105 148911400 100.00 18734 47299 66033 24

21 33 4.94 11 49 60 5339 2062 7401

12.0 TOP TEN SHAREHOLDERS AS ON 31.03.2009 (OTHER THAN PROMOTERS) Sl. Name of the Shareholder No.of Shares No. Shares as a percentage of total no.of shares 1. LIFE INSURANCE CORPORATION OF INDIA 7531182 5.06 2. GENERAL INSURANCE CORPORATION OF INDIA 3341644 2.24 3. THE NEW INDIA ASSURANCE COMPANY LIMITED 3071060 2.06 4. HDFC STANDARD LIFE INSURANCE CO. LTD. 2901272 1.95 5. UNITED INDIA INSURANCE COMPANY LIMITED 2056027 1.38 6. MATTHEWS INDIA FUND 1889744 1.27 7. NATIONAL INSURANCE COMPANY LTD 1731000 1.16 8. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. 1340310 0.90 9. LIC OF INDIA MARKET PLUS ONE 1046689 0.70 10. LIC OF INDIA MARKET PLUS 767473 0.52 TOTAL 25676401 17.24 13.0 DEMATERIALISATION OF SHARES AND LIQUIDITY The dematting facility exists with both the National Securities Depositories Lim ited (NSDL) and Central Depository Services (India) Limited (CDSL) for the convenience of shareholders. As on 31.03.2009, 14,66,74,105 equity shares have been dematerialized, representing 98.50% 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.04365-256402] 16.0 ADDRESS FOR CORRESPONDENCE Chennai Petroleum Corporation Limited, No.536, Anna Salai, Teynampet, Chennai - 600 018. Phone : 044-24349542 Fax : 044- 24341753 E-mail : sld@cpcl.co.in Company's Website Address : www.cpcl.co.in 25

Chennai Petroleum Corporation Limited FOR THE KIND ATTENTION OF SHAREHOLDERS : SUB : TRANSFER OF UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FU ND The unclaimed dividend declared at the 36th AGM held on 18.09.2002 for the finan cial year ended 31.03.2002 will be transferred by the Company on or before 17.10.2009 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 37th AGM held on 25.09.2003 fo r the financial year ended 31.03.2003 will be transferred by the Company on or before 24.10.2010 to the Investor Educa tion and Protection Fund. Therefore, Members who have not encashed their Dividend Warrants in respect of t he above dividend, validity period of which has expired, may approach either the Company or its Share Transf er Agents, viz., Karvy Computershare Private Limited, for obtaining duplicate Dividend Warrants i mmediately. COMPANY SECRETARY 26

Report to Shareholders Directors Report 28 Annexures to Directors Report 45 27

Chennai Petroleum Corporation Limited Directors' Report (Including Management Discussion and Analysis) To the family of CPCL Share Owners, On behalf of the Directors of your Company, I am pleased to present the 43rd Ann ual Report on the working of your Company together with the Audited Statement of Accounts for the year ended March 31, 2009. CORPORATE OVERVIEW O Highest ever turnover of Rs.36489.67 crore achieved. O Successfully commissioned the first Bank of the Reverse Osmosis (RO) Process Des alination of the 5.8 MGD Sea Water Desalination Plant in January 2009. O Manali Refinery achieved a crude throughput of 9707 Thousand Metric Tonnes (TMT) with a capacity utilization of 102.2%. Cauvery Basin Refinery capacity utilization for crude oil refining re mained low at 41.8% due to non-availability of enough crude oil from Narimanam and PY-3 fields. However, CB R operated at 122% capacity for LPG recovery from Natural Gas. O Manali Refinery processed five new crude oils of imported origin viz., Arab Medi um, Mellitah, NKossa, Rabi Light and Sarir and these crude oils are now added to CPCL s Crude procurement Basket comprising of 47 Crudes. A trial cargo of new indigenous crude from KG Basin received in March 2009 and processed in April 2009. O Highest ever Production of MS (844.7 TMT), HSD (3534.7 TMT), Propylene (30.9 TMT ) and Asphalt (492.7 TMT) achieved at Manali. O Highest ever Secondary Processing in Fluidised Catalytic Cracker Unit (FCCU) and Hydro-Cracker Unit (OHCU) at Manali. O Reduced the Fuel & Loss to 9% for Manali Refinery as against the previous best o f 9.3% in 2007-08. Energy consumption at Manali refinery was the lowest at 71.4 MBTU / BBL / NRGF as again st the previous best figure of 75.2 in 2007-08. O Product movement by pipelines reached a new height. Chennai Tiruchi Madurai Prod uct Pipeline (CTMPL) achieved the highest ever throughput of 1.69 Million Metric Tonnes. A new pipeli ne from our Manali Refinery to Indian Oil s Aviation Fuel Stations (AFS) in Meenambakkam, Chennai Airport was com missioned in December 2008, dedicated for ATF pumping, thus reducing truck movement within the city. O New LP Gas Compression facility commissioned at Kamalapuram in Tiruvarur Distric

t, Tamil Nadu to process 17,000 SCMD of LPG rich Gas for recovery of LPG and Naphtha,at CBR. O CPCL signed an MoU with Transparency International India for implementation of I ntegrity Pact to ensure complete transparency in contracts and procurements. O Conferred the prestigious Mother Teresa Award for Corporate Citizen 2008, instit uted by Loyola Institute of Business Administration (LIBA) in recognition of our Corporate Social Responsibi lity activities. O Awarded the Golden Peacock Award for Occupational Health and Safety for the year 2009 by the Institute of Directors, New Delhi. O Honoured with EXIM Achievement Award by Tamil Chamber of Commerce for being the highest Custom Duty payer in the State. O Cauvery Basin Refinery selected for the Star Award by National Safety Council of India (NSCI), Tamil Nadu Chapter, Chennai for the year 2007 under the NSCI Safety Award scheme . 28

O Mr. C. Ramadoss, an employee of CPCL, CBR received the Petrofed Award 2008 Innova tor of the Year Individual for his innovation in the areas of maximization of LPG Recovery f rom Feed Gas, Fuel and Loss reduction in Feed Gas Driers and reduction of fuel gas consumption in Heater. O Nil comment obtained from Comptroller and Auditor General of India on the accounts of CPCL for 2008-09, sixth time in a row. MANAGEMENT DISCUSSION AND ANALYSIS Industry Structure and Developments The world primary energy consumption increased by 2.7% in 2007 and the demand is expected to increase by 45% by the year 2030 from the current levels and fossil fuel will be the prime sourc e for this growth. The increase will be mainly by non OECD (Organization for Economic Co-operation and Development) coun tries with population in urban areas of India and China contributing mainly to this growth. While, the re newable sources of energy are likely to grow faster than fossil fuels, the petroleum products will continue to dominate energy demand. The year saw extreme swings in crude oil prices, with an unprecedented rise in o il price till July 08, followed by a rapid fall, between August 08 and December 08. The instability of the financial ma rkets and economic uncertainty has accelerated the downward spiral of the petroleum and products prices, which has left the refineries with substantial stock valuation losses. The PSU oil companies in India faced the maj or brunt of this swing in crude prices due to the product pricing structure in India. The Brent crude price reac hed $ 144 per barrel in July 2008 and dropped down to $ 36.5/bbl by Dec. 08. Similarly, Indian crude basket has dropped from the peak of $ 147/bbl in July 2008 to about $ 35.8 / bbl in Dec. 08. While this swing has severely affected stand-alone refining companies, like CPCL, it has largely reduced the strain on the Indian Economy as the countr y meets most of its crude oil demand through import. The demand growth for petroleum products in Asia Pacific region is all due to economic recession and with the projected increase in refining capacity in the region the be under pressure. However the Indian refining industry may have a stable outlook with creeping increase nd and export competitiveness. The Indian refining export is surpassing Singapore and soon Indian m products may have a price index of their own. expected to f margins will in local dema made petroleu

The crude oil imports by India increased to 128.15 MMT for the year 2008-09 whic h is an increase of 6% over the previous year. The indigenous production is expected to increase with the KG bas in and Rajasthan fields ready for

crude oil production this year. The Natural Gas production from KG basin has com menced already and this is expected to ease the import bill of crude oil of India to some extent. The overall growth in sales of petroleum products in India for the year 2008 -09 is 4.5% over the previous year. The sale of Light Ends increased by 5.5% and Middle Distillates by 5.8% while th e Heavy Ends decreased by 0.5%. The Southern Region witnessed a significantly higher growth in sales of MS , HSD, ATF, FO, Naphtha, Bitumen and LPG compared to the All India average. The Indian refining industry has major investments earmarked for Fuel Quality up gradation projects which will have to be ready for implementation from April 1, 2010. These investments will produc e environment friendly Auto fuels meeting Euro IV standards for Metros and selected mega cities and Euro III stand ards for rest of the country. The introduction of alternate fuels such as bio fuels will be a major effort wor ld wide to reduce CO2 emissions. In India, the addition of ethanol to MS has been mandated. The Indian program on Bio Diesel from non edible oil is also progressing although not significant enough to alter the consumption patter n of Petroleum products. The conversion of coal to liquid products is also being pursued by India. India, being 4th largest proven coal reserves in the world, holds considerable prospects for exploration and exploitation of C oal Bed Methane (CBM). Government of India has offered 10 blocks in different coal fields around the country for e xploration and production of CBM. The alternate fuels for transportation will be a significant factor in the globa l efforts for reducing carbon foot prints. 29

Chennai Petroleum Corporation Limited Opportunities and Threats The Indian Refining industry will complete its Fuel Quality upgradation projects in 2010 to meet the Euro IV standards and this would increase its capability to export surplus transportatio n fuels worldwide. The availability of clean natural gas will reduce the stress on the environment and it can signif icantly economise in Indian Crude Basket if used as refinery fuel. The refining industry has potential to increase its distillate yield by converting the refinery fuel oil and heavy ends for which the demand is reducing. Although this requires massive investments, it will lead to substantial improvements in refinery margins. On the other hand, the increase in the availability of Natural Gas for Power and Fertiliser industries may substantially impact the demand of Naphtha. More Naphtha is likely to get export ed from Indian Refineries. The turmoil in the world economies will significantly affect investments in Expl oration & Production (E&P) which can lead to uncertainty in crude oil prices. The projected decrease in growth in economies and overcapacity in refining in the Asia Pacific region can increase the pressure on refining margin s. All countries will need to address the challenge of energy security and climate change. The reduction of carbon foot prints will require significant growth of alternate energy sources such as wind, solar, bio fuels and geothermal. However these forms currently account for only 2% of the primary energy demand. As the demand for primary energy increases there is concern that human activity contributes increasingly to global warming with 60% of all Greenhouse Gas (GHG) emissions linked to fossil fuels. T he world is realizing that this trend has to be reversed and low carbon technologies need to be developed. This would require emphasis on energy conservation technologies and deployment of Nuclear and Renewable Fuel te chnologies. Risks, Concerns & Outlook The refining margins had been fluctuating in the past year and the volatility in crude prices and the pricing mechanism in India will impact the refinery margins. The Indian industry will also have to make significant investments to meet the energy demands of the future. The economic climate and liquidity concerns wi ll impact the pace of these investments. The oil marketing companies had to bear unsustainable losses due to the spiralin g oil prices in this year and the inability to increase the prices for the consumers which adversely impacted thei r profitability and put a severe strain on the working capital and future growth of these companies.

In view of the volatile margins, refineries have to concentrate more on improvin g the distillate yields, keep a check on energy consumption and reduce operating and other controllable costs to remai n profitable and competitive. Refineries need to plan suitable capital investments in energy conservation proj ects and increasing the distillate yields. Internal Control Systems and their Adequacy Your Company has built adequate systems of Internal Control for financial report ing of various transactions, towards achieving efficiency and effectiveness in operations, optimum utilization of res ources and effective monitoring thereof as well as compliance with all applicable Laws. The Internal Control Mechanism comprises of a well defined organization structur e, documented manuals and predetermined authority levels. In order to ensure that adequate checks and balances are in pl ace and the internal control systems are in order, periodical audits are conducted by the Internal Au dit Department. The performance of your Company is periodically monitored by the Board of Direct ors of the Company. The Board also periodically reviews Risk Assessment and Minimization Procedures prevalent in the Company. 30

Chennai Petroleum Corporation Limited The salient features of operations during the year include the following: Manali Refinery : O Manali Refinery achieved a crude throughput of 9707 Thousand Metric Tonnes (TMT) with a capacity utilization of 102.2%, against the previous year throughput of 9802 TMT. O Major Secondary processing units OHCU and FCCU achieved the highest ever through puts as detailed below: Qty in TMT Target Actual Previous best (Year) OHCU 1800 1856 1825 (2006-07) FCCU 830 901 890 (2005-06) O Maintenance & Inspection shutdown activities of CDU I, DHDS and Lube units compl eted safely. O Highest ever production of the following products achieved : (Figures in TMT) Product 2008-2009 Previous Best (year) Motor Spirit 844.7 811.6 (2007-08) High Speed Diesel 3534.7 3483.6 (2007-08) Propylene 30.9 28.9 (2007-08) Asphalt 492.7 454.6 (2007-08) Sulphur 48.5 44.0 (2005-06) O Improved fuel and loss, for the year at 9.0% for Manali against the previous bes t of 9.3% in 2007 08. The Energy consumption at Manali Refinery was the lowest ever at 71.4 MBTU / BBL / N RGF as against the previous best of 75.2 in 2007 - 08. O Exports exceeded 1.0 MMT mark for the first time, with 1097 TMT of export (again st previous best of 809 TMT achieved in 2006 - 07). Cauvery Basin Refinery: O Processed 418.1 TMT of Crude as compared to 464.2 TMT in the previous year, due to lower availability of Narimanam and PY-3 Crudes. O Achieved best performance in the recovery of value added products from Natural G as as stated below : (Qty in MT)

Product 2008-2009 Previous Best (Year) LPG from LRU 7500 7302 (2007-08) Propane from LRU 660 310 (2007-08) NGL from LRU 3337 2602 (2007-08) 32

Chennai Petroleum Corporation Limited MARKETING Majority of the fuel products produced by your Company are marketed by Indian Oi l Corporation Limited, the holding Company. During the year, your Company has achieved the highest ever sal es of Propylene, Poly-Butene Feed Stock (PBFS), Methyl Ethyl Ketone Feed Stock (MEKFS), Sulphur and Lube Extr acts, which are directly marketed by the Company. Your Company has entered into long-term agreements with M/s. Cetex Petrochemical s Limited, M/s. Kothari Petrochemicals Limited and M/s.Manali Petrochemical Limited for supply of MEKFS, PBFS and Propylene respectively. A smooth transition was achieved with regard to Direct Marketing of Paraffin wax through the three Government Agencies, viz., TNSIDCO, Tamilnadu, Kerala SIDCO and NSIC with effect from Octob er 2008. During the year, your Company organized five Customer Meets at various locations . PROJECTS Your Company s XI Plan Outlay (2007-12) is Rs. 3575 Crore. During the first two ye ars of the XI Plan (2007-09), an expenditure of Rs. 582.76 Crore has been incurred. Your Company accords highest priority for implementation of Projects without time and cost overrun. Completed Projects 5.8 MGD Sea Water Desalination Plant With a mission to achieve self- sufficiency for meeting the water requirement of the Refinery, a project for installation of a 5.8 MGD Desalination unit at an estimated cost of Rs.243.94 crore has been implemented during the year. With the commissioning of this unit, your Company will be in a position to meet its total water requirements through in-house sources / facilities. 20 MW Gas Turbine To enhance the reliability and quality of captive power generation of Manali Ref inery, a 20 MW Gas Turbine at a cost of Rs. 157.88 Crore has been commissioned. LP Gas compression facility LP Gas compression facility at Kamalapuram, Tiruvarur District was commissioned in November 2008. With this achievement, Cauvery Basin Refinery is receiving additional 17,000 SCMD LPG rich Natural Gas through this facility and thereby increasing LPG production by 6 MT/day which enables the ava ilability of additional 425 cylinders

everyday to domestic customers in Tamil Nadu. On-going Projects Auto-Fuel Quality Upgradation Project Your Company is implementing Auto-Fuel Quality Upgradation Project to meet the r evised specifications of MS and HSD from April 2010 onwards at an estimated cost of Rs. 2615.69 crore. Process D esign and Detailed engineering completed. Procurement activities are in advanced stage and many equipments / ma terials are at site. Site execution activities are in progress. The project is expected to be completed in phases fr om early 2010 to middle of 2011. Capacity Enhancement of CDU / VDU of Refinery III In order to produce additional value added products like LPG, Naphtha, SK, HSD, etc., existing Refinery-III capacity at Manali Refinery is being expanded from 3.0 MMTPA to 4.0 MMTPA at an estimated cost of Rs.200.41 crore. M/s. Engineers India Ltd. is carrying out detailed engineering, procurement and construction management of this project. The capacity expansion is expected to be completed by end of 2009. 34

Revamp of Semi Regenerative Catalytic Reforming Unit to Continuous Catalytic Ref orming Unit The existing Naphtha Hydrotreating / Semi Regenerative Catalytic Reforming unit is being revamped to Continuous Catalytic Reforming mode at an estimated cost of Rs. 273 Crore for pr oducing high quality MS meeting Euro IV specifications and also to increase the production by 10%. The P roject is expected to be completed by end of 2009. SRU Revamp with Oxygen Enrichment Technology Your Company is currently revamping one of its Sulphur Recovery Units to handle the increased acid gas that would be available from the Refinery III Revamp and Euro IV projects under imple mentation. With the adoption of Oxygen Enrichment Technology in this low-cost revamp job, the processing capacit y of the SRU will increase by 15% in phase I and 22% in phase II. EIL-R&D has prepared the process package for this revamp and detailed engineering and procurement activities are in advanced stages of completion. Ini tially, this technology has been implemented in Train-A of Refinery III Sulphur Unit in May 2009 and proved to be successful. Accordingly full revamp of the unit has now been undertaken. New Project Initiatives Resid Upgradation Project To improve distillates yield and refinery margins, a Resid Upgradation project i s proposed to be implemented. Selection of Project Management Consultant (PMC) for preparing the Detailed Feas ibility Report (DFR) for the project is in process. The process package for the Delayed Coker Unit (DCU) has been prepared by M/s. A BB Lummus. The process package for OHCU revamp has been made by M/s. Chevron Lummus Global. The process Package for the Sulphur Recovery Unit by M/s. Siirtec Nigi is also received in June 2009. The Process Pa ckages for Sour Water Stripper (SWS) Coker LPG Treatment and Amine Regeneration Unit (ARU) have been prepared b y M/s. EIL. Single Point Mooring (SPM) & Crude Oil Terminal (COT) Project Your Company is proceeding with the installation of Single Point Mooring (SPM) a nd off-shore facilities for Crude Oil imports for its Manali Refinery alongwith Crude Oil Terminal and On-sh ore pipeline. The pre-project activities comprising of Geo-physical survey, pipeline routing a nd Marine Geo-tech survey are in progress. Geo-physical survey for the on-shore portion has been completed. The m arine geo-tech survey has been carried out at the SPM location by M/s. COMACOE. The tendering for appointm ent of Consultant for the

off-shore and on-shore activities (preparation of Detailed Feasibility Report an d Engineering Procurement Construction Management Services) will be awarded shortly. The Detailed Feasibil ity Report is expected to be ready by November 2009. DEVELOPMENT STRATEGIES Your Company continuously scans the environment for new opportunities and gives strong impetus towards new business initiatives including formation of Joint Ventures, entering into Memora ndum of Understanding for its Long Term Strategic objectives and diversification plans. A Strategy Meet was organized in June 2008 to discuss and deliberate on several growth initiatives identified by the Company. The important points identified during this Meet were discussed by the Board of your Company in July 2008 wherein Secretary, MOP&NG also participated. Some of the major initiatives which emerged from the Strategy Meet include ventu ring into solar energy, implementation of Single Point Mooring (SPM), identification of other new busine ss opportunities, infrastructure augmentation, achieving excellence in HR, etc., Formation of a Joint Venture wit h Balmer Lawrie & Co. Ltd. to set up a Container Freight Station / Multi Modal Logistics Hub (MMLH) in our vacant land in Ennore also emerged from Strategy Meet which is being further pursued. 35

Chennai Petroleum Corporation Limited INDIAN ADDITIVES LIMITED Your Company entered into the joint venture with Chevron Chemicals Company (now Chevron Oronite Company) for manufacture of Lube Additives components and packages in the year 1989. IAL has achieved a turnover of Rs. 273.76 Crore during the year 2008-09, as agai nst Rs.217.28 crore in the previous year, registering a growth of 26%. The Profit after Tax for 2008-09 is Rs.8.67 Crore and the Board of Directors of IAL has recommended a Dividend of 9 % on the paid-up capital of the Company. INFORMATION TECHNOLOGY Your company is continuously marching ahead in the innovative usage of Informati on Technology for enabling speedy decision making, improving operational efficiency and effective knowledge management. Your Company has signed a Memorandum of Understanding with Indian Oil Corporatio n Limited for implementation of SAP. SAP is expected to go live in July 2009 which will make your Company a c ompetitive player in the global market, thereby the Company expects to improve the service standards of the Cust omers both internally and externally. Your Company has effectively utilized developments in the Information Technology for providing better services to its employees. Employee Outstation Information Systems, Intra-net based Leave Ap plication System and On-line Vehicle Booking System have been successfully included in the IT System during t he year. Various Employee-related information like Office Circulars, Pay details, Employe e Entitlement Forms, Income Tax Particulars, etc. are being displayed in the Intra-net web portals. RESEARCH AND DEVELOPMENT (R&D) Your Company is conscious of the fact that today s competitive and challenging bus iness environment, demands continuous upgradation and development of products, processes and services for s ustained growth. Therefore, your Company s in-house R&D Centre attaches great significance to developing R&D c apabilities and expertise in various spheres of activities. Your Company s in house R&D Centre continue to play a pivotal role in extending su pport to refinery operations by carrying out Pilot Plant evaluation of catalysts and feed stocks for secondary p rocessing facilities, assay of New crudes etc., It has further supported Refinery units like FCC, Hydro processing and Lube units with process and feed optimization studies.

A high-pressure hydrotreating pilot plant was upgraded through revamp during thi s year with major modifications in PC-PLC Control system to carry out evaluation with excellent precision. The research alliance between CPCL R&D center and National Centre for Asphalt Re search, IIT Madras has resulted in the development of various strategies for producing Performance Grad e bitumen from CPCL Feedstocks meeting ASTM, SHRP standards. SAFETY MANAGEMENT Your Company adheres to the best safety practices at par with global standards w hile carrying out its operations. Achieving credible safety performance at workplace by the employees and Contract ors continues to remain as one of the avowed objectives of your Company and concerted efforts are being taken t o meet this objective. A Central Safety Committee headed by Director (Operations) reviews the safety re lated issues, External Safety Audit recommendations and Internal Safety Audit reports on a monthly basis. Two Area Safety Committees and six Zonal Safety Committees are functioning effec tively to ensure the safety of Refinery operations and take corrective action towards unsafe situations and nea r miss incidents, if any. 36

As part of the Accident Prevention Programme, monthly contractors Safety Officer s Meetings are held wherein Safety issues are discussed and sorted out for improving the safety clim ate. Fire & Safety Training classes are held every month, wherein training on Fire Ap pliances, Safety Gadgets, First Aid, Practical training on Fire fightings are imparted. On the spot training for contract workers are conducted regularly in the areas of Operation of Fire Extinguishers, Self contained Breath ing apparatus, Fall Arrestors and Decender Rescue Operations, etc. Safety training is also given to contract super visors through the officials of Factory Inspectorate focussing on the role of supervisors in ensuring Safety. In addition, several Safety Audits and Checks, System Audits on Electrical safet y, Construction safety, Monthly HSE Audits, Daily Safety Surveillance Audit, Night Vigil rounds on weekly basis by Senior Officers are conducted regularly for improving the safe working conditions. Oil Industry Safety Directorate has so far conducted seven External Safety Audit s and Seven Surprise Safety Checks in Manali Refinery and four External Safety Audits and six Surprise Safet y Checks in Cauvery Basin Refinery. Status of implementation of these recommendations are reviewed by Cent ral Safety Committee once a month. Offsite Mock Drill for the Manali area was conducted in February 2009 by Coroman del Fertilizers Limited, Ennore in which your Company actively participated. Off-site Mock Drill at CBR was cond ucted in January 2009 in the presence of District Emergency Committee. Oil Spill Response Mock Drill of the Chidambaranar Oil Jetty was conducted with the co-ordination of Coast Guard, Fisheries Department and Tamil Nadu Maritime Board in February 2009. Awards / Achievements Adherence to the best safety practices by your Company has won the following awa rds / certifications : O Star Award by National Safety Council of India, Tamil Nadu Chapter, Chennai for the year 2007 for Cauvery Basin Refinery under the NSCI Safety Awards Scheme. O Suraksha Puraskar for the year 2007 for Cauvery Basin Refinery by National Safet y Council of India. ENVIRONMENT MANAGEMENT Your Company has always demonstrated that business growth and development go han d in hand with an underlying commitment to the Environment. Your Company has taken several measures to minimi ze the adverse effects on the Environment through deployment of clean and green technologies, adoption of

environmental friendly practices like recycling of treated effluent, development of Green belt, etc. The highlights of the Environment Management pursued by your Company during the year include the following : Solid waste management O Hazardous waste disposed through Tamilnadu Waste Management Ltd. for the first t ime for safe disposal of spent catalyst O Hydrogen peroxide treatment started in Effluent Treatment Plant 2 and 3 for redu ction of oily sludge. O Compliance with revised Minimum National Standards (MINAS). O Set up a new laboratory with additional testing facilities for testing new param eters as per new MINAS. O Instituted Leak Detection And Repair (LDAR) programme with new VOC instrument. The dedicated Environment Cell of the Company works for the upkeep of Refinery e nvironmental management system and also for complying with the provisions of the statutory stipulations. 37

Chennai Petroleum Corporation Limited ENERGY CONSERVATION Energy conservation in your Company has continued to receive focus and thrust at all its operating locations through effective planning and monitoring. This has resulted in improvement in F uel and Loss percentage at 9.0% for Manali Refinery as against 9.3% in previous year. Energy consumption at Mana li refinery was the lowest at 71.4 MBTU / BBL / NRGF as against the previous best of 75.2 in 2007-08. The lower Ene rgy Index was achieved by better heat recovery in the Units and optimized steam / power balance. Several energy conservation measures were undertaken during the year which are d etailed in Annexure II. INTEGRATED REFINERY BUSINESS IMPROVEMENT PROGRAMME Integrated Refinery Business Improvement Programme is under implementation in as sociation with M/s. Shell Global Solutions International. 13 proposals with a net benefit value of 28.58 US Cents per barrel have been approved for implementation. As a part of this programme, your Company has taken up Risk and Reliability Management Programme to provide robust risk assessment processes, better plant r eliability and availability which is expected to result in further refinery margin improvement. OPTIMISATION Your Company has always been in the forefront with regard to implementation of b est process optimization techniques, advance control techniques, etc. as it recognizes that availability of right inf ormation at the right time and pooling of resources are crucial for achieving high productivity and cost reduction. The Company has taken various initiatives in the areas of optimization which inc lude the following : O Implementation of Advanced Process Control (DMC +) in Hexane Unit which improved the Hexane yield by 1.5%. O Development and deployment of an application module to provide automated SMS ale rts on plant status, emergencies, consolidated daily process reports, etc. to identified recipients. O Development of a generic Laboratory Information Management System with enhanced capabilities. O Implementation of a control strategy for minimization of fuel gas to flare in FC C CO Boiler which won Energy Kaizen Award for best energy conservation concept for the year 2008. TOTAL PRODUCTIVE MAINTENANCE (TPM) Your Company accorded continued thrust for implementation of TPM during the year

. Various initiatives implemented in Process improvements had benefited the company in terms of improvement of fur nace efficiency, delivery on schedule, Energy savings, establishment of systems and procedures, etc. During the year, Second Kaizen conference was conducted. Around 25 Kaizens were presented from all TPM Circles in the areas of Operations, Maintenance, Energy saving etc. 5S Audit and Autonomous Maintenance Audit was conducted at Refinery II and LEB / DHDS areas. Cauvery Basin Refinery of your Company passed the Health Check conducted by the audit team of CII/TPM Club India, which is a pre-requisite to contest for Pre Audit for participating in th e TPM Excellence Award category A instituted by Japan Institute of Plant Maintenance JIPM. ISO-SHEQ Policy Your company is committed to conducting business with a strong environment consc ience and has a comprehensive SHEQ Policy to ensure sustainable development, safe work place and enrichment of quality of work life of its employees, customers and the community. The accreditation to EMS 14001:2004, QMS 9001:2000 and OHSAS 18001:1999 by M/s. Bureau Veritas Certification India, Chennai at Manali and CBR has been continued after conducting the Surveillance Audits during the year. 38

HUMAN RESOURCES DEVELOPMENT Your Company strongly believe that employees are its prime movers and an Organis ation is only as good as its people. The greater the investments a Company makes in them, the stronger and mo re sustainable are the returns. Your Company has taken a slew of measures to attract, retain and motivate talent and offers its employees, the tools and techniques to facilitate better performance. In order to prepare the company s human resources for future responsibilities in t erms of professional and business skills, various initiatives have been taken during the year which include the fo llowing : O With the objective to create a rational, user friendly and transparent rating sy stem, e-Performance Management System (e-PMS) has been implemented successfully covering all supervi sory employees. O As a prelude to promoting and sustaining an enabling organizational climate, you r company conducted an Employee Engagement survey which was found to be of very high order both in t he case of officers and workmen. As regards Organizational climate, 6 out of 12 dimensions in the ca se of officers and 6 out of 13 dimensions in the case of workmen had been rated high. Necessary follow up action has been initiated to bridge the gaps identified in this Survey. O An exclusive webpage was created for the benefit of the retired employees of you r company giving the names and addresses of the retired employees. Manpower 01.04.2008 31.03.2009 Supervisors 755 779 Non-Supervisors 930 888 TOTAL 1685 1667 During the year, your Company recruited 41 Officers and 11 Workmen. As a part of the apprenticeship training requirement, 50 Diploma holders and 36 ITI Trade apprentices underwent one-year apprenticeship Programme in the Company. During the year, your Company has achieved 3.56 average training mandays against the target of 2.2 mandays. The Refinery Engineering School of Training (RESOT) of CPCL, a well acknowledged centre for training on Refinery Technology, conducted a Four modules Core Course of 8 weeks duration during the year. In addition, short duration programmes on Refinery Technology Development, Process Optimisation, Power & Uti

lities, Quality Control, Turnaround Management, Project Management, Team Building, Presentation Skills, W orkshop on Hydrocracker, Environment Management Systems were also conducted with participation from CPCL, its downstream units in Manali, reputed design consultants from Chennai and other Refineries of the coun try. The Industrial Relations climate continued to be harmonious, cordial and peacefu l throughout the year. Bi-partite Long Term Settlement (Part-II) on work related allowances and benefits for workm en was signed on 19.02.2009 with the recognized unions. Various HR initiatives undertaken in the previous year like Mentoring, Departmen t-wise Open House Meets and Field visits were continued during the current year also. Your Company has been scrupulously adhering to the Presidential Directives and v arious instructions of the Government relating to the welfare of the SC, ST, OBC, and Physically Challenged persons. There were 423 SC employees (previous year: 424) and 34 ST employees (previous year: 34) as on 31. 03.09 constituting 25.37 % and 2.04% of the total manpower respectively. The statistics relating to representat ion of SCs / STs / OBCs in the prescribed proforma as on 01.01.09 is placed as (Annexure-I). 39

Chennai Petroleum Corporation Limited WELFARE OF WOMEN Your Company continues to give utmost priority for Women Welfare and Empowerment . International Women s Day was celebrated by the Women s Cell by organizing a seminar on the theme Evolving the Blue Print for Change in which leading professionals delivered lectur es on topics relating to Women Development and empowerment. As on 31.03.2009, 82 women employees are on the rolls of the Company (previous y ear: 76), of whom 33 are in the Supervisory Grade (previous year: 26) and 49 are in Non supervisory Grade (previ ous year: 50), constituting 4.24% of the total Supervisory employees and 5.52% of the total Non-supervisory employ ees. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company s vision and mission statements lay emphasis on maximizing profit thr ough manufacturing and supply of petroleum products and other related businesses in a reliable, ethical and socially responsible manner. In recognition of its good work on CSR, your Company has been conferred the pres tigious Mother Teresa Award for Corporate Citizen 2008, instituted by Loyola Institute of Business Administr ation (LIBA). During the year 2008-09, your Company has incurred an amount of Rs.169.78 Lakhs towards CSR activities and donations. Some of the Community Development Projects undertaken by your Company include the following: O Sponsored 50 Girls (25 SC/ST and 25 Other Community) for one year Nursing Assist ant Course at a cost of Rs.5.00 lakhs under Empowerment of Women programme. O Constructed Computer Room for Irula Tribal Women s Welfare Society, Chengalpet at a cost of Rs.5.00 lakhs. O Sponsored Free Tuition / Computer Training Classes for the benefit of Students i n and around Manali at a cost of Rs.4.94 lakhs. O Constructed two kitchen buildings for Schools at Nagore near Cauvery Basin Refin ery at a cost of Rs. 3 lakhs. Significant contributions towards Community Development Activities include the f ollowing : O Contributed Rs.4.50 lakhs towards Implementation of Total Sanitation Scheme at V ayalur Village in

Thiruvallur District. O Distributed Scholarship worth Rs.3.62 lakhs to the neighbourhood School Students . O Donated Ultrasound Scanner machine and one Semi Auto Analyzer worth of Rs.5.00 l akhs to Government Primary Health Centre at Manali. O Distributed Rs.5.00 lakhs worth of various necessary items to Physically Challen ged people. O Rs.5.00 lakhs spent on Skill Development Training programme for unemployed youth (boys) at CIPET, Chennai. O Contributed Rs.5.00 lakhs for purchase of Tamarind Paste making Plant for Self H elp Group Tribal Women at Jawadhi Hill under empowerment of Tribal Women. O Provided Steel Benches and Tables worth of Rs.8.70 lakhs to the neighbourhood Sc hools. O Contributed Rs. 5.05 lakhs to various schools in and around Cauvery Basin Refine ry towards uniform sets, school bags, activity based learning materials, Computer tables and chairs , etc. 40

CPCL Educational Trust: CPCL Educational Trust was founded in the year 1988 to develop the technical ski lls of the workers of CPCL and its neighbourhood industries and also to educate the rural youth in the neighbouring villages to improve their employability. The trust runs the following Institutions : Industrial Training Institute (ITI) ITI offers two trades, viz., Electrical, which is of two years duration and Weld er, which is of one year duration. 33 students (19 in Electrical Trade and 14 in Welder Trade) were admitted during the year. Polytechnic College CPCL Polytechnic College offers three-year Full time Diploma courses in Petroche mical Engineering, Mechanical Engineering and Electronics Communication Engineering and a four-year part time Diploma course in Petrochemical Engineering. 235 students were admitted during the year for the various courses. 111 students passed out in April 2008 and 60% of the students got immediate plac ement through campus selection in companies like Tamilnadu Petroproducts Limited, Manali Petrochemica l Limited, TVS Group, Supreme Industries, etc. GLOBAL COMPACT The United Nations Global Compact was first launched in 1999 and it calls on the Corporate sector to embrace a core set of ten principles pertaining to human rights, labour, environment, anti -corruption, etc. CPCL, as a member of the Global Compact Programme, follows all the ten principle s enshrined in the said programme. The highlights of the implementation of this programme include abolition of Chil d Labour, Transparency in Contracts through implementation of Integrity Pact, commitment towards Corporate Social Re sponsibility and continuous implementation of welfare programmes. OCCUPATIONAL HEALTH SERVICES (OHS) The Occupational Health Services of your company continued its activities focusi ng primarily on the health of the employees through a comprehensive multi pronged approach which included preventi on of illness and injuries by regular occupational hygiene monitoring of the environment. About 80% of the emp loyees were monitored through annual health examination and other programs. New equipments were added in OHS l ike Multi Parameter Monitor and Portable Ventilator in order to strengthen the infrastructure facilities for handling emergencies.

In recognition of its pioneering efforts in the field of Occupational Health in the Oil Sector and for the most significant improvements and innovative activites practiced in the field of Occupational, He alth and Safety, your Company has been awarded the Golden Peacock Award for OHS for the year 2009 by the Institute of Directors, New Delhi. INVESTOR RELATIONS Your Company focuses primarily on disseminating information on its operations an d initiatives on a regular basis. The following new initiatives were undertaken during the year for betterment of investor relations : O A new facility has been introduced in the portal of Karvy, viz., www.karisma.kar vy.com which enables the Company to monitor the electronic shareholdings of the investors for the previou s six months. O The status of all Share Transfers, requests for dematerialization of shares, tra nsmission of shares, etc. effected can be monitored online which will improve the service standards toward s the shareholders. 41

Chennai Petroleum Corporation Limited As on 31.03.2009, 14,66,74,105 shares have been dematerialized constituting 98.5 % of the paid-up share capital of the Company. Out of 66,033 shareholders, 47,299 shareholders have dem aterialized their shares representing 71.63% of the total number of shareholders. The Shareholders / Invest ors Grievance Committee of the Board regularly monitors the grievances of Investors and ensure timely redre ssal. CORPORATE GOVERNANCE Your Company looks upon Corporate Governance as a process in which values and pr inciples constantly evolve in line with the changing environment. CPCL has laid a strong foundation to purs ue growth by adhering to the best standards of good corporate governance practices. Your Company was among the top 25 Companies, adopting good Corporate Governance practices in the year 2008 by the Institute of Company Secretaries of India, for the third time in a r ow. Your Company complied with all the mandatory requirements of Corporate Governanc e Guidelines issued by SEBI and also the Corporate Governance guidelines prescribed by Department of Public Enterprises (DPE), Government of India applicable to Central Public Sector Enterprises, except the requirement relating to minimum number of Independent Directors. Presently, your Company has three Independent Directors a s against the requirement of six under the Listing Agreement and DPE Guidelines. A separate section on Corpor ate Governance forms part of this Annual Report. During the year 2008-09, the Board of Directors of your Company approved the Whi stle Blower Policy for implementation and also approved the revised Code of Internal Procedures and Con duct for prevention of Insider Trading in dealing with the securities of CPCL in line with the amendments made by SEBI. INTEGRITY PACT In order to maintain complete transparency in Contracts and procurements, your C ompany entered into a Memorandum of Understanding (MoU) with Transparency International India (TII) on 24.3.2009 for the implementation of Integrity Pact. Integrity Pact is a tool developed by the Berlin based Transparency Internationa l for enhancing the degree of fairness and transparency in procurement and contracts, resulting in substantial improvement in system and reduction in corruption in public dealings. This model, being followed by several corporat es worldwide, binds a Company and its suppliers to ethical conduct in contracts and implementation of projects.

Mr. P. Shankar, IAS., (Retd.,) Former Central Vigilance Commissioner and Mr.Just ice K.Govindarajan, Retd., Judge of the Hon ble High Court of Madras are the Independent External Monitors, approve d by CVC, for implementation of the Integrity Pact in CPCL, which is currently applicable for contracts with a threshold value of Rs. 10 crores and above. VIGILANCE The Vigilance Department of your Company plays a vital role in promoting transpa rency and accountability amongst the employees while discharging their responsibilities. Vigilance Awareness Week was observed in the Company during November 2008, where in brochures on CVC s Whistle Blowers Resolutions and Do s and Dont s on Contract Management were released. Increased thrust on e-Governance has been maintained throughout the year by effe cting the payment of bills to vendors / contractors through Electronic Clearance Services (ECS) / Electroni c Funds Transfer (EFT), which constitutes 92% of the total payments made. 42

OFFICIAL LANGUAGE IMPLEMENTATION Propagation and successful implementation of the Official Language policy of the Government of India, is being intensified by the Company. Several Hindi Workshops and competitions we re conducted for the benefit of the employees and the family members. The Official Language Implementation Committee offers valuable suggestions leadi ng to overall improvement in the Official Language Implementation practices in the Company. Incentive schemes to learn Hindi and to encourage the employees to use maximum H indi in official work are in vogue. During the year, 46 employees passed various Hindi Examinations. An Orientation programme on Official Language Policy was conducted for the newly recruited Officers / Engineers. One Hindi word is being displayed daily alongwith pronunciation and meaning in the Notice Board and also in the In tra-net of the Company. During the year, inspection on Official Language implementation was conducted by Regional Implementation Office, Department of Official Language, Ministry of Home Affairs, Kochi who exp ressed their satisfaction about the various measures taken by the Company for implementation of Official Languag e Policy. STATUTORY INFORMATION O Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with NIL the Companies (Particulars of Employees) Rules, 1975 O Statutory details of Energy Conservation and Technology Absorption, R&D activiti es and Foreign Exchange Earnings and Outgo, as required under Section 217(1)(e) of the Companies Act, 19 56 and the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Rep ort of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-II) O Certificate received from the Auditors of the Company regarding compliance of co nditions 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, a s amended by the Companies

(Amendment) Act, 2000 with respect to Directors ereby confirmed:

Responsibility Statement, it is h

i) that, in the preparation of the annual accounts for the financial year ended March 31, 2009, the applicable accounting standards have been followed and that there are no material departure s from the same; ii) that the Directors have selected such accounting policies and applied them c onsistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair vie w of the state of affairs of the Company at the end of the financial year and of the profit of the Company for th e year under review; iii) that the Directors have taken proper and sufficient care for the maintenanc e of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and iv) that the Directors have prepared the annual accounts for the financial year ended March 31, 2009, on a going concern basis. 43

Chennai Petroleum Corporation Limited AUDITORS M/s.M.Thomas & Co., Chennai and M/s Sreedhar, Suresh & Rajagopalan, Chennai have been appointed as Joint Statutory Auditors of the Company for the financial year 2008-2009 by the Comptroller and Auditor General of India. The Board of Directors of the Company fixed a remuneration of Rs.7.5 l akh (Rs.3.75 lakh to each of the Joint Statutory Auditors) in addition to the out-of-pocket expenses, if any, and applicable service tax. COST AUDITOR M/s. J.V. Associates, Cost Accountants, Chennai have been appointed as the Cost Auditor of Manali Refinery and Cauvery Basin Refinery of the Company for the financial year 2008-09 at a re muneration of Rs.1,20,000/( Rupees One lakh Twenty thousand only) per annum plus applicable taxes and out-of -pocket expenses, if any, to conduct the audit of cost accounts maintained by the Company. DIRECTORS Mr. Mohammad Hassan Ghodsi has been appointed as a Director in place of Mr.M.Vae zi effective 25.04.2009. Mr. Sanjay Gupta, Director (MC & IOC), Ministry of Petroleum & Natural Gas, Gove rnment of India has been appointed as a Director effective 19.06.2009. Mr. Rohit Bhardwaj, Executive Director (M&I), Indian Oil Corporation Ltd.(IOC) c eased to be a Director effective 28.02.2009 on attaining the age of superannuation from the services of IOC. Mr. Pramod Nangia, Director (M), Ministry of Petroleum & Natural Gas, ceased to be a Director since he tendered his resignation consequent to completion of his tenure in the Ministry of Petrol eum & Natural Gas, effective 24.03.2009. Mr. K.L.Kumar, Former C&MD, Kochi Refineries Ltd., ceased to be a Director, as h e tendered his resignation, effective 24.03.2009. Mr. K.Suresh, Chairman, Chennai Port Trust ceased to be a Director, effective 30 .06.2009 on completion of his tenure as Chairman, Chennai Port Trust. Your Directors place on record their appreciation of the valuable contribution m ade by Mr.M.Vaezi, Mr.Rohit Bhardwaj, Mr.Pramod Nangia, Mr.K.L. Kumar and Mr. K. Suresh during their tenure. ACKNOWLEDGEMENT Your Directors place on record their deep appreciation of the valuable services and dedicated efforts made by the members of the CPCL family in the Company s achievements during the year 2008-09.

Your Directors also record their sincere thanks for the co-operation received fr om Ministry of Petroleum & Natural Gas, Indian Oil Corporation Limited, Petroleum Planning and Analysis Cel l, Oil Industry Development Board, Oil Industry Safety Directorate, Centre for High Technology, the other Mi nistries of Government of India, Government of Tamil Nadu, Comptroller & Auditor General of India, Central Vigila nce Commission, Financial Institutions and commercial banks and the continued co-operation and s upport by NIOC and NICO. For and on behalf of the Board of Directors Date : 20.07.2009 S.BEHURIA Place : New Delhi Chairman 44

ANNEXURE - I (SC/ST/OBC REPORT -I) ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs & OBCs AS ON 01.01.2009AN D NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR YEAR GROUPS Representation ofSCs/STs/OBCs as on 01.01.2009 No. of appointments made during the calendar year 2008 (Jan - Dec 2008) By Dir.Recruitment By Promotion By Deputation/ Absorption Tot.no. of employees SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) Group A Group B Group C Group DGroup D(Excldg. Sweepers) Group D(Sweepers) TOTAL 4563248896NilNil1675 114 682411NilNil424 15 892NilNil34 29 35 259NilNilNil323 Nil40 $ 21NilNilNil61 Nil7 # 2 * NilNilNil9 NilNilNilNilNilNilNil Nil14 # 9 * * NilNilNil23 29 @ 47 61 NilNilNil137 7 # # 13 & 17 ^ NilNilNil37 121NilNilNil4 NIL1NilNilNilNil1 NilNilNilNilNilNilNil NilNilNilNilNilNilNil Annexures to Directors' Report 45 # includes 2 SC & 6 OBC candidates considered on Merit in Group B& includes 4 SC candidates promoted on Merit in Group B * includes 1 SC considered on merit in Grade II in Group C,

** 1 OBC and 7 OBC considered on merit in Grade II and Grade IIIrespectively in Group C. ^ includes 6 SC candidates promoted on Merit within Grade(Grade III to IV) Promoti on of Group C @ applicable upto lowest rung of Group A ## includes 2 SC candidates promoted on Merit in Lowestrung of Group A $ includes 9 Non-supervisory employees who wereconsidered along with external cand idates through openadvertisement against Direct Recruitment as Engineers / Hindi Officer.

Chennai Petroleum Corporation Limited 46 ANNEXURE - I (Contd.) ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs & OBCs IN VARIOUS GROUP A ERVICES AS ON 01.01.2009AND NUMBER OF APPOINTMENTS MADE IN VARIOUS GRADES IN THE PRECEDING CALENDAR YEAR PAY SCALE(In Rupees) Representation ofSCs/STs/OBCs as on 01.01.2009 No. of appointments made during the calendar year 2008 (Jan-Dec 2008) By Dir.Recruitment By Promotion By Other Methods Tot.no. of employees SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 13750 - 1870016000 -2080017500 - 2230018500 - 2390019000 - 2475019500 - 25600205 00 - 26500TOTAL 127111 776250209456 283020181341114 472200015 12 15 2000029 NilNilNilNilNilNilNilNil NilNilNilNilNilNilNilNil NilNilNilNilNilNilNilNil NilNilNilNilNilNilNilNil 29159986076 7 @ 32330018 11000002 NilNilNilNilNilNilNilNil NilNilNilNilNilNilNilNil NilNilNilNilNilNilNilNil @ includes 2 SC candidates considered on Merit in the Lowest rung of Group A S

Annexure - II ANNEXURE TO DIRECTORS REPORT ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REP ORT OF BOARD OF DIRECTORS) RULES, 1988 A. CONSERVATION OF ENERGY a) The following Energy conservation measures were taken: O Utilization of surplus fuel gas of Refinery III in boilers. O Single pump operation by increasing the reliability. O Increasing the Heat recovery of Economizer in Boiler IV thus reducing the stack temperature. O Shutdown of low efficiency OPH Boiler 3. O Installation of Magnetic Resonator in GT-2 for reducing FO consumption. O Interconnection of fuel gas in Refinery III and Refinery I & II for Optimum util ization. b) Additional Investments and proposals, if any, being implemented for energy conse rvation The following additional investment proposals are being implemented at an estima ted cost of Rs. 30 lakhs. O Procurement of acoustic/ultrasonic leak detector for identifying leaking relief valves. O Compressed air leak survey in the entire refinery c) Impact of the measures at a) and b) above for reduction of Energy consumption an d consequent impact on the cost of production of goods The above measures are expected to result in an estimated savings of about 7000 MT/annum of Fuel Oil Equivalent d) Total Energy Consumption and Energy consumption per unit of production as per Fo rm A of the Annexure in respect of Industries specified in the Schedule thereto Conservation of Energy as per Form A is given in Attachment I. B. TECHNOLOGY ABSORPTION / RESEARCH & DEVELOPMENT ACTIVITIES

Efforts made in Technology Absorption / Research & Development as per Form B is given in Attachment II. C. FOREIGN EXCHANGE EARNINGS AND OUTGO 1. Activities relating to exports: The Company has exported 1097 TMT of products co mprising of Fuel Oil (811 TMT), Naphtha (227 TMT), HSD (55 TMT) and Lube Oil Base Stock (4.9 TMT) for a total value of Rs.2492 crore. 2. Total foreign Exchange used and earned : Rs. In Lakhs 2008 09 2007 08 a) Used 9423.2 7652.63 b) Earned Nil Nil 47

Chennai Petroleum Corporation Limited ATTACHMENT-I ANNEXURE TO DIRECTORS REPORT ON ENERGY CONSERVATION

FORM A Form for disclosure of particulars with respect to Conservation of Energy Current Year Previous Year 2008-09 2007-08 A. Power and Fuel Consumption 1. Electricity a) Purchased Unit (in million KW Hr.) 3.939 7.426 Total Amount (Rs. In Crore) 1.44 2.73 (excluding demand and other charges) Demand and other charges (Rs. In Crore) 8.36 7.53 Rate/Unit (average) (Rs./KWHr.) 3.66 3.67 (excluding demand and other charges) b) Own generation Through diesel generator Not applicable Not applicable Through steam turbine/generator Unit (in million KW Hr.) 346.7536 373.4351 Units per litre of fuel oil/gas 2.92 3.11 Fuel Cost/Unit (Rs.) 7.41 5.76 2. Coal Not applicable Not applicable 3. Furnace Oil Quantity (in thousand K.Litres) 467.222 532.520 Average rate (Rs./MT) 22876.36 18919.68 4. Others/Internal generation fuel gas Gas Turbine Quantity Power (in million KW Hr.) 295.243 256.863 Fuel (in thousand MTs) 100.568 88.843 Total cost (Rs. In Crore) 337.66 282.02 Fuel cost/Unit (Rs.) 11.44 10.98 Fuel Gas (TMT) (including CBR) 105.175 107.123 B. Consumption Per Unit of Production Electricity (KWHr/MT of crude) 61.65 62.11 Furnace oil (Kg/MT of Crude) 43.74 48.59 Coal Not applicable Not applicable Other (specify) FCCU Coke (Kg/MT of Crude) 3.67 3.52 Fuel Gas (Kg/MT of Crude) 10.38 10.43 48

ATTACHMENT - II FORM B TECHNOLOGY ABSORPTION / RESEARCH & DEVELOPMENT ACTIVITIES RESEARCH AND DEVELOPMENT (R&D) ACTIVITIES 1. Specific Areas in which R&D was carried out by the company O Evaluation of New Crudes processed in the Refinery O Evaluation of Catalyst and Additives for FCC Unit O Selection of catalysts for Hydro processing units O Development of catalytic process for end point reduction of diesel O Development of adsorbents for removal of sulfur from CBR diesel O Performance Grade Bitumen 2. Benefits derived as a result of the above R&D As per Annexure 3. Future plan of action O Membrane process for Reduction of sulfur in FCC Gasoline O Upgradation of Heavy oils O Bio Fuels and Bio Lubricants from non edible oils O Development of F-T catalysts O Development of Micro Wave based Technologies for crude sludge and VGO pretreatme nt O Reformer Modeling 4. Expenditure on R&D (Rs. In Lakhs) 2008 09 2007 08 Capital 232.15 344.38 Recurring 330.29 280.28 Total 562.44 624.66 Total R&D expenditure as % of Turnover 0.02 0.02 5. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts in brief, made towards technology absorption, adaptation and innovation O

ACER MAT Pilot Plant studies were carried out by recycling spent catalyst along with Equilibrium Catalyst at different coke levels on E-Cat simulating FCC RxCat technology to study the c onversion and yields O Pilot plant studies were carried out using IOC R&D developed DHDS catalyst using both diesel and VGO feed stocks to study their suitability for use in CPCL Plant 13 before taking up the demonstration trials O Lube hydro finishing catalyst developed in collaboration with Sud Chemie was tes ted continuously in hydro treating pilot plant to ascertain catalyst stability and the performance w as compared with benchmark commercial catalyst. 2. Benefits derived as a result of the above efforts, e.g. Product improvement, cos t reduction, product development, import substitution efforts : R&D efforts are aimed to provide technical support to refinery operations, optim ization of process units and also to provide analytical inputs for process troubleshooting. Pilot plant s tudies 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 t he 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 49

Chennai Petroleum Corporation Limited ANNEXURE TO FORM B Crude Assay : O Detailed assay of 12 Crudes were carried out which includes new crudes such as R abi Light, Nkossa, Mellita and KG basin. Process Optimization Studies: O Several new commercial catalysts were evaluated in Pilot Plant for possible use in DHDS unit for the production of Euro IV diesel. The pilot plant evaluation to study the activity was continue d to establish the deactivation rate of the catalyst also. A new deactivation procedure was developed for ascertainin g the stability of DHDS catalysts. O Adsorptive Desulfurisation studies using modified activated carbon adsorbents we re completed using CBR diesel feedstock. A modification procedure was developed for commercial activate d carbon to improve its adsorptive capacity for diesel sulfur removal. O Strippability studies were carried out in ACER MAT unit by varying stripping tim e to estimate FCC catalyst deactivation rate. O Commercial Gasoline Sulfur Reduction (GSR) additives were evaluated for their su itability to use along with FCC Catalyst for minimizing gasoline sulfur. O Research Alliance with National Center for Asphalt Research, IIT Madras resulted in the development of various strategies for producing PG grade bitumen from CPCL Feed stocks meeting ASTM spe cification. Patent for Performance Grade Bitumen using PDA pitch and Fluxes to be filed jointly by IITM a nd CPCL. O Revamp of high-pressure hydrotreating pilot plant unit was completed with modifi cations in the PC-PLC system, control valves and other hardwares. A PG test run was conducted with the revampe d unit for ascertaining its precision and excellent material balance. O A high-pressure hydrogen booster station was installed and commissioned at R&D t o supply hydrogen to all pilot plant units through a common manifold. O

Both IITM and CPCL developed several catalyst formulations for reduction of T95 of diesel. The support material, metal components and zeolite were finalized for scale up of a promising recipe. Papers published 1. Kinetics of Oxidative Desulphurisation of Sulfur Compounds in Diesel Fuel Petrole um Science and Technology, Vol.26, Issue 2, p 208-16 2. Research paper on Rheological characterization of blended Paving Asphalt presented jointly with IIT M in European Asphalt Technology Association (EATA) conference held in Lyon, France during April 2008. 3. Influence of crude source on the viscous properties of blended asphalt- Presente d in Geopatrika conference-2008, Malaysia 4. Adsorptive Desulfurization of Diesel by modified carbons, presented in 6th Inter national Symposium on Fuels and Lubricants, 12th March 2008, New Delhi. 5. Development of catalyst for end point reduction of Diesel, presented in the Nati onal Workshop on Catalysis held in IMMT, Bhubaneshwar, Feb.18-20, 2008. 6. End point reduction of a straight run diesel fraction using zeolite catalysts, p resented in the 19th National Symposium on Catalysis held in NCL, Pune, Jan. 18-21, 2009. 50

ANNEXURE - III

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE To The Shareholders of Chennai Petroleum Corporation Limited We have examined the compliance of conditions of Corporate Governance by Chennai Petroleum Corporation Limited for the year ended March 31, 2009 as stipulated under Clause-49 of the Company s L isting Agreement with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of th e 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 explanati ons given to us, we certify that the Company has complied with the conditions of Corporate Governance, as stipula ted in the above mentioned Listing Agreement for the year ended March 31, 2009, except for the number of In dependent Directors on the Board which is three as against the requirement of six as required under Clause 49 of the Listing Agreement. 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 v iability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For M/s. M. Thomas & Co. For M/s. Sreedhar, Suresh & Rajagopalan Chartered Accountants Chartered Accountants A. Rozario V. Suresh Place : New Delhi Partner Partner Dated : May 28, 2009 Membership No. 21230 Membership No. 26525 51

52Chennai Petroleum Corporation LimitedChennai Petroleum Corporation Limited

Report of the Statutory Auditors Auditors Report 54 Annexures to Auditors Report 55 53

Chennai Petroleum Corporation Limited Auditors Report

Report of the Auditors to the Members of Chennai Petroleum Corporation Limited 1. We have audited the attached balance sheet of Chennai Petroleum Corporation Limi ted, as at 31st March 2009, 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 company s 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 accep ted 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 th e 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 (Auditor s 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 th e 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 st atement 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) Disclosure in terms of clause (g) of sub section (1) of section 274 of the Compa nies Act, 1956 is not required for Government Companies as per Notification No.GSR 829(E) dated Octobe r 21, 2003 issued by the Department of Company Affairs. In our opinion, and to the best of our information and according to the explanat ions 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 principle generally accepte d in India. (a) in the case of the balance sheet, of the state of affairs of the company as at 3 1st March 2009 (b) in the case of the profit and loss account, of the loss for the year ended on th at date; and (c) in the case of the cash flow statement, of the cash flows for the year ended on that date. for M. Thomas & Co. for Sreedhar, Suresh & Rajagopalan Chartered Accountants Chartered Accountants (A. Rozario) (V. Suresh) Place : New Delhi Partner Partner Date : May 28, 2009 Membership No. 21230 Membership No. 26525 54

Annexure to auditors ANNEXURE - I

report

Annexure to auditor s report Referred to in paragraph 3 of our report of even date (i) (a) The company has maintained proper records showing full particulars inclu ding quantitative details and situation of fixed assets. (b) All the assets have not been physically verified by the management during th e year but there is a regular programme of verification which, in our opinion, is reasonable having re gard 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. (ii) (a) The inventory has been physically verified during the year by the manag ement. In our opinion, the frequency of verification is reasonable. (b) The procedures of physical verification of inventories followed by the manag ement are reasonable and adequate in relation to the size of the company and the nature of its busine ss. (c) The company is maintaining proper records of inventory. The discrepancies no ticed on verification between the physical stocks and the book records have been appropriately dealt w ith in the books of account. (iii) We are informed that there is no company, firm or party to be listed in the Regi ster 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 Compan ies (Auditor s Report) Order, 2003. (iv) In our opinion and according to the information and explanations given to u s, 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 se rvices. During the course of our audit, we have not observed any continuing failure to correct major weakness es in internal control system. (v) We are informed that there is no company, firm or party to be listed in the Regi ster 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 (Auditor s 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 (Auditor s 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 p ursuant 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 reco rds have been made and maintained. (ix) (a) The company is regular in depositing with appropriate authorities undisputed sta tutory dues including provident fund, investor education and protection fund, income tax, sales tax, w ealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to i t. We are informed that no employee of the company is covered by Employees State Insurance Scheme (b) The company, in the absence of suitable notification by the Central Government s pecifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable b y the company, towards Rehabilitation and Revival Fund, the company has neither paid nor provided for c ess. (c) 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 repor t. 55

Chennai Petroleum Corporation Limited (x) The company does not have any accumulated losses as on 31st March 2009. The comp any has incurred cash losses during the financial year covered by our audit and not in the immedi ately preceding financial year. (xi) In our opinion and according to the information and explanations given to us, th e 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 w ay of pledge of shares, debentures and other securities and hence we have no comments to offer in respec t of clause 4 (xii) of the Companies (Auditor s Report) Order, 2003. (xiii) The company is not a chit fund or a nidhi mutual benefit fund/society. Therefore , the provisions of clauses 4(xiii) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company. (xiv) The company is not dealing in or trading in shares, securities, debentures and o ther investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor s Report) Order, 2003 ar e not applicable to the company. (xv) In our opinion and according to the information and explanations given to us, th e company has not given any guarantees for loans taken by others from banks or financial institutions and he nce we have no comments to offer in respect of clause 4 (xv) of the Companies (Auditor s 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 overa ll examination of the balance sheet of the company, we report that no funds raised on short-term basis have be en used for long-term investment. (xviii) The company has not issued shares during the year and hence we have no c omments to offer in respect of clause 4 (xviii) of the Companies (Auditor s Report) Order, 2003. (xix) The company has not issued any debentures during the year nor there is any outst anding as on 31st March 2009 and hence we have no comments to offer in respect of clause 4 (xix) of the Companies (Auditor s Report) Order, 2003. (xx) The company has not raised money by public issues in the recent past and hence w e have no comments to offer in respect of clause 4 (xx) of the Companies (Auditor s 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 M. THOMAS & CO. for SREEDHAR, SURESH & RAJAGOPALAN Chartered Accountants Chartered Accountants (A. ROZARIO) (V. SURESH) Place : New Delhi Partner Partner Date : May 28, 2009 Membership No. 21230 Membership No. 26525 56

Statement of Disputed Dues Annexure - II 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 198788 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 Andhra Pradesh Value Added Tax Act Value Added Tax Dues 1731.81 626.20 Apr 2005 to Aug 2007 Dy. Commisioner (Commercial Taxes), (Appeals) Karnataka Tax on Entry of Goods ActEntry Tax Dues 379.53 189.76 Sep 2007 to Nov 2007 Asst . Commisioner (Commercial Taxes) Central Sales Tax Act Sales Tax Dues 165.18 -1991-92 TN State Appellate Tribunal Central Excise Act Excise Dues 56.62 -Aug 2003 to May 2004 Customs Excise and Service Tax Appellate Tribunal Central Excise Act Excise Dues 128.64 -Feb 2004 to Aug 2004 Customs Excise and

Service Tax Appellate Tribunal Central Excise Act Excise Dues 98.78 -Jan 2005 to Jun 2005 Customs Excise and Service Tax Appellate Tribunal Central Excise Act Excise Dues 46.32 -Jan 2005 to Feb 2005 Commissioner (Appeals) Income Tax Act Income Tax Dues 388.66 -AY 2006-07 Commissioner (Appeals) 57

58Chennai Petroleum Corporation LimitedChennai Petroleum Corporation Limited

Comments of CAG Comments of the Comptroller and Auditor General of India 60 59

Chennai Petroleum Corporation Limited COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619 (4) O F THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF CHENNAI PETROLEUM CORPORATION LIMITED, CH ENNAI FOR THE YEAR ENDED 31 MARCH 2009 The preparation of financial statements of Chennai Petroleum Corporation Limited , Chennai for the year ended 31 March 2009 in accordance with the financial reporting framework prescri bed 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 A ct, 1956 are responsible for expressing opinion on these financial statements under section 227 of the Co mpanies Act, 1956 based on independent audit in accordance with the auditing and assurance standards pre scribed by their professional body, the Institute of Chartered Accountants of India. This is stated to have be en done by them vide their Audit Report dated 28.05.2009. 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 2009. This supplementar y audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to enquiries of the statutory auditors and Company personnel and a selective examin ation 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 Place : Chennai (S. RAJANI) Date : July 9, 2009 Principal Director of Commercial Audit and Ex-Officio Member Audit Board, Chennai 60

Financial Information Balance Sheet 62 Profit and Loss Account 63 Schedules to the Accounts 64 61

Chennai Petroleum Corporation Limited Balance Sheet as at March 31, 2009 (Rs. in Lakhs) Schedule March 31, 2009 March 31, 2008 SOURCES OF FUNDS 1. Shareholders Funds a) Capital A 14900.46 14900.46 b) Reserves and Surplus B 291823.41 331551.84 306723.87 346452.30 2. Loan Funds a) Secured Loans C 41961.64 51548.26 b) Unsecured Loans D 112828.86 193497.36 154790.50 245045.62 3. Deferred Tax Liability (Net) 41400.20 60736.14 Total 502914.57 652234.06 APPLICATION OF FUNDS 1. Fixed Assets & Intangible Assets: 1.1 Fixed Assets a) Gross Block E 516390.10 506589.82 b) Less: Depreciation and Amortisation 230557.02 205410.45 c) Net Block 285833.08 301179.37 1.2. Intangible Assets a) Gross Block E-I 2563.08 6011.16 b) Less: Amortisation 1212.09 2303.35 c) Net Block 1350.99 3707.81 1.3 Capital Work-in-Progress F 71820.77 29598.48 359004.84 334485.66 2. Investments G 2281.41 11046.61 3. Current Assets, Loans and Advances a) Inventories H 247027.72 443203.37 b) Sundry Debtors I 101342.28 151069.45 c) Cash and Bank Balances J 962.69 1466.50 d) Other Current Assets - Interest accrued 2.36 41.57 on Investments/Bank Deposits e) Loans and Advances K 17561.65 19745.31 366896.70 615526.20 4. Less: Current Liabilities and Provisions a) Current Liabilities L 223640.14 260922.26 b) Provisions L-I 1628.24 47902.15 225268.38

308824.41 5. Net Current Assets (3-4) 141628.32 306701.79 Total 502914.57 652234.06 6. Statement of Significant Accounting Policies Q 7. Notes on Accounts R 8. Other Schedules forming part of Accounts S to X 9. Balance Sheet Abstract and Company s General Business Profile Y 10. Cash Flow Statement Z (K.K.Acharya) (N.C.Sridharan) (M.Sankaranarayanan) Managing Director Director (Finance) Company Secretary As per our Report of even date M. Thomas & Co. Sreedhar, Suresh & Rajagopalan Chartered Accountants Chartered Accountants (A. Rozario) (V. Suresh) Place : New Delhi Partner Partner Date : May 28, 2009 Membership No. 21230 Membership No. 26525 62

Profit & Loss Account for the year ended March 31, 2009 (Rs. in Lakhs) Schedule March 31, 2009 March 31, 2008 INCOME 1. Sale of Products (Gross) 3661165.68 3303656.88 Less:Excise Duty 452576.24 487071.20 3208589.43 2816585.68 Less: Commission and Discounts 12198.80 14725.51 Sale of Products (Net) 3196390.63 2801860.17 2. Increase /(Decrease) in Stock M (122443.43) 51001.21 3. Interest and other Income N 5407.06 12846.73 Total Income 3079354.26 2865708.11 EXPENDITURE 1. Purchase of products for resale 149848.22 124684.79 2. Manufacturing, Admn., Selling & Other Expenses O 2949310.84 2523059.69 3. Duties other than Excise Duty on Sales (7699.73) 1236.69 4. Depreciation and Amortisation 25716.69 25160.88 5. Interest Payments on : a) Fixed period loans from Banks/ Financial Institutions/Others 7279.29 8118.39 b) Short Term Loans from banks 14426.09 8736.32 c) Others 660.80 2626.10 22366.18 19480.81 Total Expenditure 3139542.19 2693622.86 PROFIT FOR THE YEAR (60187.93) 172085.25 Income/(Expenses) pertaining to previous years (Net) P 876.93 77.68 PROFIT BEFORE TAX (59311.00) 172162.93 Provision for Tax (net) -Current Tax 0.00 56865.39 -Pertaining to Earlier Years (496.20) (591.31) -Deferred Tax (19335.94) 3384.00 -Fringe Benefit Tax (Including pertaining to Earlier Years) 249.57 209.45 (19582.57) 59867.53 PROFIT AFTER TAX (39728.43) 112295.40 DISPOSABLE PROFIT (39728.43) 112295.40 APPROPRIATIONS Interim Dividend 0.00 7445.57 Final Dividend (Proposed) 0.00 17869.37 Dividend Distribution Tax on Interim Dividend 0.00 1265.37 Dividend Distribution Tax on Final Dividend (Proposed) 0.00 3036.90 General Reserve (39728.43) 82678.19

(39728.43) 112295.40 Earning Per Share (Rupees) (26.68) 75.41 (Basic & Diluted) Statement of Significant Accounting Policies Q Notes on accounts R Other Schedules forming part of Accounts S to X Balance Sheet Abstract and Company s General Business Profile Y Cash Flow Statement Z (K.K.Acharya) Managing Director (N.C.Sridharan) Director (Finance) (M.Sankaranarayanan) Company Secretary As per our Report of even date M. Thomas & Co. Chartered Accountants Sreedhar, Suresh & Rajagopalan Chartered Accountants Place : New Delhi Date : May 28, 2009 (A. Rozario) Partner Membership No. 21230 (V. Suresh) Partner Membership No. 26525 63

Chennai Petroleum Corporation Limited Schedules CAPITAL Schedule A Note March 31, 2009 (Rs. in Lakhs) March 31, 2008 Authorised 40,00,00,000 Equity Shares of Rs.10 each A 40000.00 40000.00 Issued 17,00,00,000 Equity Shares of Rs.10 each 17000.00 17000.00 Subscribed, Called-up and Paid-up 14,89,11,400 Equity Shares of Rs. 10 each B 14891.14 14891.14 Add: Forfeited Shares 9.32 9.32 Total 14900.46 14900.46 Note: A. As per the Formation Agreement entered into between the promoters, an offer i s 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 en able 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 Ltd., the Holding Company. RESERVES AND SURPLUS Schedule B (Rs. in Lakhs) March 31, 2009 March 31, 2008 1. Share Premium Account As per last account 25003.82 25003.82 2. General Reserve As per last account 306548.02 223869.83 Add : Transferred from Profit and Loss Account (39728.43) 82678.19 266819.59 306548.02 Total 291823.41 331551.84 64

SECURED LOANS Schedule C (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 Loans and Advances from Banks i) Working Capital Demand Loan A 0.00 0.00 ii) Cash Credit A 1961.64 1519.51 iii) Foreign Currency Loans (2008: USD 25 million) A 0.00 10028.75 iv) Term Loans (due for payment within one year Rs.20000 lakhs; 2008: Rs. 10000 lakhs ) B & C 40000.00 40000.00 Total 41961.64 51548.26 Note: A. Against hypothecation of inventories, book-debts, outstanding monies, receiva bles present and future to the extent of Rs.120000 lakhs. B. Secured by first paripassu charge on the company s fixed assets at Manali Refin ery with State Bank of India. C. Against hypothecation of all movable plant and machinery at Manali Refinery o n a paripassu basis with HDFC Bank alongwith State Bank of India. UNSECURED LOANS Schedule D (Rs. in Lakhs) March 31, 2009 March 31, 2008 1. Short Term Loans and Advances : From Banks / Financial Institutions i) In Rupee (Book Overdraft) ii) Working Capital Demand Loan iii) In Foreign Currency (2008:USD 98.6 million) 373.86 62000.00 0.00 62373.86 655.2289000.0039553.39 129208.61 2. Other Loans and Advances From Others Oil Industry Development Board (due for payment within one year Rs. 17946.25 lakhs; 2008: Rs.13833.75 lakhs) 50455.00 64288.75 Total 112828.86 193497.36 65

FIXED ASSETS Schedule E (Rs.in Lakhs) DEPRECIATION/NET DEPRECIATEDGROSS BLOCK IMPAIRMENT AMORTISATION BLOCK Gross block Addition/ Transfers Disposals Transfers / Gross Block Depreciation D epreciation Depreciation Total Total Impairment Total As at As at Note As at during from during Deductions / as at and and on disposals/ Depreciat ion Impairment Loss Impairment March 31, March 31, 01-Apr-08 the year construction the year Adjustments 31-Mar-09 Amortisation Amor tisation transfers/ and Loss as at during Loss up to 2009 WIP Reclassi-(Ref. As at for the deductions Amortisation 01-Apr-08 the year 31-M ar-09 fications Note No.A) 01-Apr-08 year etc. upto31-Mar-09 Land-Freehold 3876.66 3876.66 3876.66 3876.66 -Leasehold 780.85 780.85 66.57 7.90 74.47 706.38 714.28 Buildings, Roads etc. 13454.61 392.10 18.00 13828.71 4303.09 309.21 5.91 4606.39 9222.32 9151.52 Plant and Machinery B 484185.12 5862.36 851.09 3448.08 492644.47 198469.47 24824 .21 79.40 223214.28 269430.19 285715.65 Transport Equipments 1885.11 302.62 61.94 2125.79 1277.11 161.47 58.11 1380.47 45.32 608.00 Furniture and Fixtures 1368.03 276.57 198.70 1445.90 791.67 145.36 173.37 763.66 682.24 576.36 Railway Sidings 270.72 -270.72 257.18 257.18 13.54 13.54 Drainage, Sewage and Water Supply System 768.72 648.37 0.09 1417.00 245.36 15.30 0.09 260.57 1156.43 523.36

Total 506589.82 7482.02 1129.82 3448.08 516390.10 205410.45 25463.45 316.88 230557.02 285833.08 301179.37 Previous Year 484796.09 22065.23 256.56 (14.94) 506589.82 181038.38 24562.83 190 .76 205410.45 301179.37 303757.71 Note : A . The cost of assets are net of MODVAT/CENVAT, wherever applicable. B. Consequent to reclassificaion of expenditure on Technical Know-how/license fee r elating to plants designs/drawings, Rs. 710 lakhs, being the depreciation on suc h expenditure pertaining to the earlier years, has been net offfrom Rs. 789.40 l akhs, being the depreciation on disposals/transfers during the year . Chennai Petroleum Corporation Limited 66

INTANGIBLE ASSETS Schedule E-1 (Rs.in Lakhs) 67 NET DEPRECIATED AT COST AMORTISATION IMPAIRMENT BLOCK Gross block Additions Transfers Disposals Transfers / Gross Block Amortisation A mortisation Amortisation Total Total Impairment Total As at As at Note As at during from during Deductions / as at As at for the on disposals/ Amo rti-Impairment Loss Impairment March 31, March 31, 01-Apr-08 the year construction the year Adjustments 31-Mar-09 01-Apr-08 year tr ansfers/ sation Loss as at during Loss up to 2009 2008 WIP Reclassi-deductions upto 01-Apr-08 the year 31-Mar-09 fications etc 31-Mar-09 Right of Way A 30.68 Technical Know-How, Royalty and License Fees 5980.48 Total 6011.16 -(3448.08) 2532.40 2303.35 253.24 (1344.50) 1212.09 (3448.08) 2563.08 2303.35 253.24 (1344.50) 1212.09 6011.16 1705.30 598.05 2303.35 1320.31 3677.13 1350.99 3707.81 30.68 30.68 30.68

Previous Year 6011.16 Note :

3707.81 4305.86

A. No amortisation provided, the right being perpetual in nature.

Chennai Petroleum Corporation Limited CAPITAL GOODS, WORK-IN-PROGRESS Schedule F (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Construction Work in progress - Fixed Assets (including unallocated capital expenditure) 70100.58 28914.34 2. Advance for Capital Expenditure 525.95 64.34 3. Capital Stores 562.63 38.26 4. Capital goods in transit 61.73 11.66 5. Construction period expenses pending allocation : 1017.12 485.65 Less: Allocated to Assets/Work-in-Progress during the year 1017.12 485.65 0.00 0.00 6. Construction Work in progress - Intangible Assets 569.88 569.88 Total A 71820.77 29598.48 CONSTRUCTION PERIOD EXPENSES (NET) DURING THE YEAR Schedule F-I (Rs. in Lakhs) March 31, 2009 March 31, 2008 1. Payments to and Provision for Employees 355.73 0.00 2. Repairs & Maintenance 59.46 0.00 3. Rent 10.05 0.00 4. Travelling & Conveyance 87.38 0.00 5. Communication Expenses 4.61 0.00 6. Printing & Stationery 8.10 0.00 7. Other Expenses 6.14 0.00 8. Interest 485.65 485.65 1017.12 485.65 Less: Allocated to Assets/Work-in-Progress during the year 1017.12 485.65 Total 0.00 0.00 68

INVESTMENTS Schedule G (Rs. in Lakhs) No. and Face value March March Particulars per share 31, 2009 31, 2008 of Shares / Rupees Units I. LONG TERM INVESTMENTS UNQUOTED, AT COST 1. Non-Trade Investments In Others a) CPCL Industrial Cooperative 9000 Shares Service Society Ltd. fully paid 10 0.90 0.90 b) Bio Tech Consortium India Ltd. 100000 Equity Shares 10 10.00 10.00 fully paid 10.90 10.90 2. Trade Investments In Joint Venture Companies Indian Additives Ltd. 1183401 Equity Shares 100 1183.40 1183.40 fully paid In Others a) National Aromatics and Petrochemical 25000 Corporation Limited Equity Shares 10 2.50 2.50 fully paid Less : Provision for Dimunition 2.50 0.00 0.00 2.50 b) Petroleum India International Capital Fund 500.00 500.00 (AOP by Oil Companies) Share in accumulated surplus 587.11 538.18 1087.11 1038.18 2270.51 2224.08 II. CURRENT INVESTMENTS 1. Trade Investments a) 7% Oil Companies, GOI Special Bond 2012 91706 Nos 10000 0.00 9170.60 Less: Provision for Dimunition 0.00 358.97 0.00 8811.63 Total 2281.41 11046.61

69

Chennai Petroleum Corporation Limited INVENTORIES Schedule H 1. In Hand a) Stores, Spares etc. Less: Provision for losses b) Raw Materials c) Finished Products d) Stock in Process 2. In Transit a) Stores and Spares b) Raw Materials c) Finished Products Total 17165.58 1459.42 March 31, 2009 15706.16 58367.78 81504.73 21621.37 177200.04 459.76 69265.75 102.17 69827.68 247027.72 (Rs. in Lakhs) March 31, 2008 14979.60 1562.94 13416.66 110950.57 175144.50 42807.84 342319.57 433.94 92730.50 7719.36 100883.80 443203.37 SUNDRY DEBTORS Schedule I Note March 31, 2009 (Rs. in Lakhs) March 31, 2008 1. Over Six Months Unsecured, Considered Good A 209.39 2017.98 2. Other Debts Unsecured, Considered Good B 101132.89 149051.47 Total 101342.28 151069.45 Note: A - Includes due from Indian Oil Corporation Ltd., the holding company - Rs. 118 .53 lakhs (2008: Rs. 1899.20 lakhs) B - Includes due from Indian Oil Corporation Ltd., the holding company - Rs. 863

11. 50 lakhs (2008: Rs.118010.98 lakhs) CASH AND BANK BALANCES Schedule J (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Cash Balances a) Cash balances including imprest A 10.49 0.35 2. Bank Balances with Scheduled Banks a) Current Account 630.20 1167.94 b) Deposit Account 322.00 298.21 952.20 1466.15 Total 962.69 1466.50 Note : A. Includes 30 (2008: 2) Gold Medals valued at Rs. 10.41 lakhs at cost (2008: Rs.0. 13 lakhs) 70

LOANS & ADVANCES Schedule K (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Advances recoverable in cash or in kind or for value to be received a) Secured, Considered Good A 4756.68 4902.09 b) Unsecured, Considered Good B 3477.84 3689.19 8234.52 8591.28 2. Claims recoverable a) Unsecured, Considered Good C 1863.01 4158.30 b) Unsecured, Considered Doubtful 1574.84 29.32 3437.85 4187.62 Less: Provision for Doubtful Claims 1574.84 29.32 1863.01 4158.30 3. Balance with Customs, Port Trust & Excise Authorities Unsecured, Considered Good 3975.02 4272.51 4. Advance Tax 88111.58 Less: Provision for Income Tax 85727.42 2384.16 0.00 5. Materials given on Loan 7.24 166.06 Less: Deposits received 7.24 166.06 0.00 0.00 6. Sundry Deposits (including amounts adjustable on receipt of Final bills) Unsecured, Considered Good 1104.94 2723.22 Total D 17561.65 19745.31 Note : A. Includes : 1. Due from Directors 24.44 10.82 Maximum amount due during the year 25.54 11.62 2. Due from other Officers 4.52 5.21 Maximum amount due during the year 5.21 5.45 B. Includes due from Indian Oil Corporation Ltd., the holding company 5.98 54.99 C. Includes due from Indian Oil Corporation Ltd., the holding company 35.42 27.92 D.

Disclosure requirements of SEBI under Clause 32 of the Listing agreement 1. Loans and advances in the nature of loans to parent company, IOC 0.00 0.00 Maximum amount outstanding during the year 50000.00 0.00 2. Loans and advances in the nature of loans to associates Nil Nil Maximum amount outstanding during the year Nil Nil 3. Loans and advances in the nature of loans where there is (i) no repayment schedule or repayment beyond seven years or Nil Nil (ii) no interest or interest below section 372 A of Companies Act Nil Nil 4. Loans and advances in the nature of loans to firms/companies in which directors are interested Nil Nil 71

Chennai Petroleum Corporation Limited CURRENT LIABILITIES Schedule L (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Sundry Creditors a) Total outstaning dues of micro enterprises and small enterprises 0.00 0.00 b) Total dues of creditors other than micro enterprises and small enterprises A 196358.82 228790.97 196358.82 228790.97 2. Other Liabilities B 24116.36 28781.71 3. Investor Education and Protection Fund shall be credited by C a) Unpaid Dividend 391.08 309.94 b) Unpaid Matured Deposits 0.00 0.43 c) Interest accrued on b) above 0.00 0.03 391.08 310.40 4. Security Deposits 2381.14 2706.29 5. Interest accrued but not due on loans 392.74 332.89 Total 223640.14 260922.26 Note: A. Includes due to Indian Oil Corporation Ltd., the holding company - Rs. 152284 .81 lakhs (2008: Rs.175820.13 lakhs). B. Includes due to Indian Oil Corporation Ltd., the holding company - Rs. Nil (2 008: Rs. 9.48 lakhs). C. No amount is due as on March 31, 2009 to be transferred to Investor Education & Protection Fund. PROVISIONS Schedule L - I 1. a) Provision for Taxation Less: Advance Payments b) Provision for Fringe Benefit Tax Less: Advance Payments 0.00 0.00 934.72 907.42 March 31, 2009 0.00 27.30 (Rs. in Lakhs) March 31, 2008 108715.5191896.35 16819.16 934.72908.48 26.24 2. Proposed Dividend 3. Dividend Distribution Tax 4. Provision for Retirement Benefits 0.00 0.00 1600.94 25314.94

4302.27 1439.54 Total 1628.24 47902.15 72

DETAILS OF INCREASE / (DECREASE) IN STOCK Schedule M (Rs. in Lakhs) March 31, 2009 March 31, 2008 Closing Stock a) Finished products 81606.90 182863.86 b) Stock in process 21621.37 42807.84 103228.27 225671.70 Less : Opening Stock a) Finished products 182863.86 148870.06 b) Stock in process 42807.84 25800.43 225671.70 174670.49 Total (122443.43) 51001.21 INTEREST AND OTHER INCOME Schedule N (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Interest on a) Loans and Advances 321.37 311.99 b) Short Term Deposits with Banks 49.12 20.86 c) Customer Outstandings 1469.61 488.02 d) 7% Oil Companies, GOI Special Bonds 2012 A 82.08 641.94 e) Others 11.25 9.52 1933.43 1472.33 2. Dividend From Others B 147.93 88.76 3. Sale of Power 1808.28 1142.46 4. Profit on sale and disposal of assets 17.55 3.14 5. Unclaimed/Unspent Liabilities written back 43.44 351.76 6. Provision for Doubtful Debts, Advances, Claims and Stores written back 103.52 225.22 7. Sale of scrap 953.51 769.54 8. Exchange Fluctuations (Net) 0.00 8611.32 9. Other Miscellaneous Income C 399.40 182.20 Total 5407.06 12846.73

Note: A. Represents income from Current, Trade Investments B. Represents income from Long-Term, Trade Investments C. Includes income from Petroleum India International (Long-Term Trade Investments) Rs. 81.55 Lakhs (2008: Rs. (-) 15.31 lakhs) 73

Chennai Petroleum Corporation Limited MANUFACTURING, ADMINISTRATION, SELLING AND OTHER EXPENSES Schedule O (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Raw Material Consumed Opening Balance 203681.07 135852.16 Add: Receipts 2750227.93 2531057.04 2953909.00 2666909.20 Less: Closing Stock 127633.53 203681.07 2826275.47 2463228.13 2. Consumption a) Stores, Spares and Consumables 6252.48 6621.02 b) Packages and Drum Sheets 126.90 118.01 6379.38 6739.03 3. Power, Water and Fuel 222854.08 192471.10 Less: Own Fuel 218408.92 188003.77 4445.16 4467.33 4. Processing Fees 283.72 692.88 5. Octroi, Other Levies and Irrecoverable Taxes 6040.89 5128.03 6. Repairs and Maintenance a) Buildings 587.71 561.38 b) Plant & Machinery 12267.35 11008.09 c) Others 727.29 677.19 13582.35 12246.66 7. Freight, Transportation charges and Demurrage 6297.73 4073.84 8. Payments to and Provisions for Employees a) Salaries, wages, bonus etc. A & B 11571.00 11010.61 b) Contribution to Provident and other Funds C 4422.44 716.09 c) Staff Welfare Expenses 3300.21 2537.36 19293.65 14264.06 9. Office Administration, Selling and Other Expenses (Schedule O - I) 66712.49 12219.73 Total 2949310.84 2523059.69 Note: A . Includes Rs. 2477.51 lakhs (2008: Rs. 676.34 lakhs) towards estimated provis ion / adhoc relief paid in respect of pay revision for supervisory employees for the period 01.01.2007 to 31.03.200 9. B . Includes Rs. 540.86 lakhs (2008: Nil) towards lumpsum payment towards pay an omaly for the period 01.01.97 to 31.12.2006. C. Includes Rs. 483.15 lakhs (2008: Rs. Nil) towards contribution to Provident Fund and Superannuation on the revised pay for the period 01.01.2007 to 31.03.2009 and Rs. 2506.64 lakhs (2008: Rs. Nil) towards increase in Gratuity limit from Rs. 3.5 lakhs to Rs.10 lakhs. 74

OFFICE ADMINISTRATION, SELLING AND OTHER EXPENSES Schedule O - I (Rs. in Lakhs) Note March 31, 2009 March 31, 2008 1. Rent 1744.40 2254.43 2. Insurance 783.09 1006.02 3. Rates & Taxes 117.37 156.42 4. Donations 2.06 5.48 5. Payment to Auditors a) Audit Fees 8.27 5.62 b) Tax Audit 1.12 0.00 c) Other Services (for issuing certificates etc.) 3.72 0.67 13.11 6.29 6. Travelling and Conveyance 1466.57 1349.04 7. Communication Expenses 224.35 176.12 8. Printing and Stationery 171.77 91.12 9. Electricity and Water 64.61 72.03 10. Bank Charges 77.12 57.96 11. Bad Debts, Advances, Claims and Materials written off 104.51 237.31 12. Loss on Assets sold, lost or written off 76.91 52.48 13. Loss on sale of current Investments 268.21 0.00 14. Provision for Doubtful Debts, Advances, Claims A 1545.52 136.78 and Obsolescence of Stores 15. Provision for dimunition in value of investments B 2.50 1.11 16. Security Force Expenses 1229.60 670.81 17. Handling Expenses 288.24 354.98 18. Expenses of Enabling Facilities 1396.74 2222.23 19. Terminalling Charges 1842.52 1333.61 20. Exchange variation (Net) 53375.48 0.00 21. Other Expenses 1917.81 2035.51 Total 66712.49 12219.73 Note:

A . Includes Rs. 1440.36 lakhs (2008: Rs. NIL) towards amounts recoverable from AROCHEM B . Represents provision for dimunition in value of investments made in AROCHEM (2008: 7% Oil Companies, GoI Special Bond 2012) INCOME / EXPENSES RELATING TO PRIOR YEARS Schedule P (Rs. in Lakhs) March 31, 2009 March 31, 2008 Expenditure 1. Depreciation/Amortisation (634.50) 0.00 2. Raw Materials Consumed (346.47) (77.68) 3. Stores, Spares and Consumables 104.04 0.00 Total Expenses (876.93) (77.68) Net Income / (Expenditure) 876.93 77.68 75

Chennai Petroleum Corporation Limited STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Schedule Q 1. BASIS OF PREPARATION 1.1 The financial statements are prepared under historical cost convention in accord ance with the accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the p rovisions of the Companies Act, 1956. 1.2 The preparation of financial statements requires the management to make estimate s and assumptions that affect the reported amount of assets, liabilities and disclosure of contingent l iabilities as at the date of the financial statements. Management believes that these estimates and assumptions a re reasonable and prudent. However, actual results could differ from estimates. 2. FIXED ASSETS 2.1 Land Land acquired on lease for over 99 years and on perpetual lease is treated as fr eehold land. 2.2 Technical know-how / license fee Technical know-how / license fee relating to plants/facilities are capitalised a s part of cost of the underlying asset. 2.3 Capitalisation of construction period expenses (a) Revenue expenses exclusively attributable to projects incurred during constructi on period are capitalised. (b) Financing cost incurred during the construction period on loans specifically bor rowed and utilised for projects is capitalised on quarterly basis at the actual borrowing rates. Financing cost, if any, incurred on general borrowings used for projects is capi talised at the weighted average cost. (c) Capital stores are valued at cost. Specific provision is made for likely diminut ion in value, wherever required. 2.4 Depreciation / Amortisation (a) Depreciation on fixed assets is provided in accordance with the rates as specifi ed in Schedule XIV to the Companies Act, 1956, on straight-line method, upto 95% of the cost of the as set other than Insurance Spares which are depreciated upto 100%. Depreciation is charged pro-ra

ta 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 Com pany, incurred during the construction period of the projects is accounted as unallocated capital expe nditure 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 dur ing the lease period. 3. IMPAIRMENT OF ASSETS Carrying amount of cash generating units/assets is reviewed for impairment. Impa irment, if any, is recognised where the carrying amount exceeds the recoverable amount. 4. INTANGIBLE ASSETS (a) Technical know-how/license fee relating to production process and process design are accounted for as intangible assets and amortized on a straight line basis over a period of ten ye ars or life of the said plant/facility, whichever is earlier. (b) Expenditure incurred on Research and Development, other than on capital account, is charged to revenue. (c) Costs incurred on computer software purchased/developed on or after 1st April 20 03, resulting in future economic benefits are capitalised as Intangible Asset and amortised over a perio d of three years beginning from the quarter in which such software is capitalised. However, where such computer software is still in development stage, costs incurred during the development st age of such software are accounted as Work-in Progress - Intangible Assets. 76

(d) Cost of Right of Way for laying pipelines is capitalised and where Right of Way is of perpetual nature, not amortised. 5. BORROWING COST Borrowing costs that are attributable to the acquisition and construction of the qualifying asset are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily t akes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. 6. INVESTMENTS Long-term investments are carried at cost and provision for diminution in the va lue thereof, other than temporary in nature, is accounted. Current investments are carried at lower of cost or market value. 7. CURRENT ASSETS, LOANS AND ADVANCES 7.1 Valuation of Inventories (a) Raw materials Crude oil - At cost (on weighted average basis) or net realisable value whicheve r 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 realisab le 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 surpl us/obsolete stores and spares, provision is made for likely loss on sale/disposal and charged to revenu e. 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. 8.

FOREIGN CURRENCY TRANSLATION (a) Transactions in foreign currency are recorded at exchange rates prevailing on th e date of transactions. (b) Monetary items denominated in foreign currencies (such as cash, receivables, pay ables 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 translati on or settlement are recognized as income or as expense in the period in which, they arise. (e) Premium/discount arising at the inception of the forward exchange contracts ente red into to hedge foreign currency risks are amortised as expense/income over the life of the contract. Ou tstanding forward contracts as at the reporting date are restated at the exchange rate prevailing on that da te. 9. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS 9.1 CONTINGENT LIABILITIES (a) Show Cause Notices issued by various Government Authorities are not considered a s Obligation. (b) When the demand notices are raised against such show cause notices and are dispu ted by the Corporation, then these are classified as disputed obligations. 77

Chennai Petroleum Corporation Limited (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 possibili ty of outflow of resources is remote. 9.2 CAPITAL COMMITMENTS Estimated amount of contracts remaining to be executed on capital accounts are d isclosed in each case above Rs.5 lakhs. 10. PROFIT AND LOSS ACCOUNT (a) Claims on Petroleum Planning and Analysis Cell (Formerly known as Oil Coordinati on Committee)/ Government arising on account of erstwhile Administered Pricing Mechanism/notifi ed schemes 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) Other claims (including interest on outstanding) are accounted: i) When there is certainty that the claims are realizable ii) Generally at cost (c) Prepaid Expenses upto Rs.5,00,000/- in each case is charged to revenue. (d) Income and expenditure are disclosed as prior period items only when the value e xceeds Rs.5,00,000/- in each case. 11. TAXES ON INCOME Provision for current tax is made as per the provisions of the Income Tax Act, 1 961. Deferred Tax Liability/ Asset resulting from timing difference between book and taxable profit is accounte d for considering the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future. 12. EMPLOYEE BENEFITS 12.1SHORT TERM BENEFITS: Short Term Employee Benefits are accounted in the period during which the servic es have been rendered. 12.2POST-EMPLOYMENT BENEFITS AND OTHER LONG TERM EMPLOYEE BENEFITS: (a) The Company s contribution to the Provident Fund is remitted to separate trust est

ablished for this purpose based on a fixed percentage of the eligible employee s salary and charged to Profi t and Loss Account. Shortfall, if any, in the fund assets, based on the Government specified minimum rate of return, will be made good by the Company and charged to profit and loss account. (b) The company operates defined benefit plans for gratuity and compensated absences . The cost of providing such defined benefits is determined using the projected unit credit method of ac tuarial valuation made at the end of the year and is administered through a fund maintained by Insurance C ompany. Actuarial gains/losses are charged to profit and Loss account. (c) The liability of the company in respect of superannuation scheme is restricted t o the fixed contribution paid by the corporation on a monthly basis towards the defined contribution sche me maintained by Insurance Company, which is charged off to revenue. (d) Obligations on Post Retirement Medical Benefits and Long Service Awards are prov ided using the projected unit credit method of actuarial valuation made at the end of the year. 12.3TERMINATION BENEFITS: Payments made under Voluntary Retirement Scheme are charged to Profit and Loss A ccount. 78

NOTES ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2009 Schedule R 1. Contingent Liabilities: a) Claims against the company not acknowledged as debts Rs. 34223.05 lakhs (2008 : Rs. 51343.75 lakhs). These mainly include: i) Rs. 330.36 lakhs (2008: Rs. 12836.51 lakhs) being the demands raised by Centr al Excise authorities. ii) Rs. 32127.95 lakhs (2008: Rs. 36797.05 lakhs) in respect of Sales Tax demand s. iii) Rs. 456.06 lakhs (2008: Rs. 114.61 lakhs) in respect of Income Tax demands. iv) Rs. 875.62 lakhs (2008: Rs. 935.22 lakhs) relating to projects. b) Interest/Penalty, if any, unascertainable, on the above claims is not conside red. c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 110445.78 lakhs (2008: Rs. 69370.02 lakhs). 2. Thirty four acres and forty nine cents of land has been taken on lease from a tr ust on a five-year renewable lease for the construction of Employees Township at Cauvery Basin Refinery. 3. Forty-one acres of land of the company is in the possession of IOT Infrastructur e & Energy Services Limited (formerly IndianOil Tanking Ltd.) under a lease agreement. 4. (a) The cost of land includes provisional payments towards cost, compensation, a nd other accounts for which detailed accounts are yet to be received from the authorities concerned. (b) Pending completion of formalities, assignment deeds of some portion of the land are yet to be obtained. (c) Pending decision of the Government/Court, additional compensation, if any, payab le to the land owners and the Government for certain lands acquired, is not considered 5. The company, in the absence of suitable notification by the Central Government s pecifying the applicable rate of cess under section 441A of the Companies Act, 1956 on turnover payable by the company, has not provided for cess towards formation of Rehabilitation and Revival Fund. 6. Valuation of Finished Products: The total cost of the crude and processing cost is apportioned to the individual products on the basis of the respective realizable value. Under this method the joint products absorb joint c osts according to the ability of the product to bear the cost as reflected by the market value of the individual products. (Refer policy no 7 (c) in Schedule Q Statement of Significant Accounting Policies ). 7. In line with the scheme formulated by the Petroleum Planning and Analysis Cell ( PPAC) under the Ministry of Petroleum and Natural Gas the company has received an aggregate discount of Rs.

130655.55 lakhs (2008: Rs. Nil) from Oil and Natural Gas Corporation Limited on Crude Oil purcha se and has passed on the same as discounts on products sold to Indian Oil Corporation Limited. Accordingl y, Gross Sales and Consumption of Raw Materials for the year are net of Rs. 130655.55 lakhs. 8. Impact on account of changes in Accounting Policies: Expenditure incurred on technical know how/license fee relating to plants/facili ties, hitherto capitalised as intangible asset, is now capitalized as part of cost of the relevant fixed asset s and depreciated. This change has an impact of reducing the loss by Rs. 797.25 lakhs including an amount of Rs . 634.50 lakhs accounted as prior period item. 9. Payments to and provision for employees includes Rs. 54.67 crore (2008: Rs. 6.76 crore) towards estimated provision/ adhoc relief paid in respect of pay revision for supervisory employee s for the period 01.01.2007 to 31.03.2009. 10. Pending finalisation of Long Term Settlement with workmen, for revision of pay w ith effect from 01.01.2009, no provision has been made in the accounts, except to the extent of adhoc relief paid amounting to Rs. 84.68 lakhs which has been included under payments to and provision for empl oyees. 11. The company operates in a single segment viz. downstream petroleum sector. As su ch reporting is done on a single segment basis. 79

Chennai Petroleum Corporation Limited 12. The company has not entered into any derivative transaction, other than for hedg ing purposes during the year. Forward contracts entered into for hedging purposes by the company and outstandi ng as on 31st March 2009 towards repayment of loan is NIL (2008: NIL). 13. Foreign currency exposures that are not hedged as on 31st March 2009: Rs. 152939 .99 lakhs (2008: Rs. 225978.94 lakhs). 14. Disclosure as required under Accounting Standard 15 (revised) on Employee Benefit s issued by the Institute of Chartered Accountants of India is provided in Annexure I to this schedule. 15. In compliance with Accounting Standard 18 on Related Party Disclosures issued by t he Institute of Chartered Accountants of India, the required information is given in Annexure II to this s chedule. 16. Disclosure as required under Accounting Standard 19 on Leases issued by the Instit ute of Chartered Accountants of India is as under: Operating Leases: The company has taken on operating lease, Product Tankages from IOC on a renewal basis. The lease rentals incurred for the current year amounting to Rs. 1117.85 lakhs are included in Ren t (2008: Rs.1608.42 lakhs). The lease rent payable for the next financial year is estimated to be Rs. 877.82 lakhs (2008: Rs.1475.09 lakhs) and lease rent for the five-year period after the next year is estimated to be Rs. 4382.10 lakhs. (2008: 7375.41 lakhs). 17. In compliance with Accounting Standard 20 on Earning Per Share issued by Institute of Chartered Accountants of India, the elements considered for calculation of Earning Per Share (Basic an d Diluted) are as under: March 2009 March 2008 Profit After Tax (Rupees in lakhs) (39728.43) 112295.40 Weighted Average number of equity shares 148911400 148911400 Earning Per Share (Basic and Diluted) (Rupees) (26.68) 75.41 Face value per share (Rupees) 10 10 18. In compliance with Accounting Standard 22 on Accounting for Taxes on Income issued by Institute of Chartered Accountants of India, Deferred Tax Asset (-)/Liability (+) for the financial per iod ended 31st March 2009 amounting to Rs. (-) 19335.94 Lakhs (2008:Rs. 3384.00 lakhs) has been made/provided. I. The item-wise details of Deferred tax liability (net) are as under :

(Rs. in lakhs) As on As on 31.03.2009 31.03.2008 Deferred Tax Liability: Depreciation 60550.16 61821.33 Less: Deferred Tax Assets: i) Provision for Retirement Benefits 837.74 415.36 ii) Voluntary Retirement Scheme Expenditure written off 29.59 6.61 iii) Provisions on inventories, debtors, loans and advances, Investments 1032.19 663.22 iv) Unabsorbed depreciation and Carried forward business loss 17250.44 0.00 Deferred Tax Liability (Net) 41400.20 60736.14 II. Deferred tax asset is being recognised on unabsorbed depreciation and carried fo rward losses of the company since the company is virtually certain of sufficient future taxable inco me. This is evidenced by the positive margins accruing to the company commencing from the fourth quarter of 2008-09. 80

19. Disclosure as required under Accounting Standard 27 on Financial Reporting of Int erests 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) Company s share of 2008-09# 2007-08## Assets 5169.96 4133.70 Liabilities 1622.51 1009.13 Income 12190.22 9452.28 Expenditure 11461.45 8150.77 Contingent Liabilities 321.86 919.36 # 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 vent ure is not operational 20. During the year, the company has undertaken a review of all fixed assets in line with the requirements of Accounting Standard- 28 on Impairment of Assets issued by the Institute of Charter ed Accountants of India. Based on such review, no provision for impairment is required to be recognised f or the year. 21. Disclosure required under the provisions of Section 22 of Micro, Small and Mediu m Enterprises Development Act, 2006. The company has sought written confirmation from its suppliers to identify micro , small and medium enterprises. No principal amount or interest amount remains unpaid to such Micro and Small en terprises as on 31.03.2009 and no payments were made to such enterprises beyond the appointed day during the year. Also, the company has not paid any interest in terms of section 16 of the above-mentioned act or o therwise. This information has been determined to the extent, such parties could be identi fied on the basis of information made available to the company. 22. Remuneration paid/payable to Directors:

(Rs. in lakhs) 2008-09 2007-08 i) Salaries and Allowances 56.99 45.76 ii) Contribution to Provident Fund 4.03 3.09 iii) Contribution to Gratuity / Superannuation Fund, etc. 4.03 2.57 iv) Other benefits and Perquisites 4.49 2.33 v) Sitting Fees to Part Time Directors 4.10 4.50 Total 73.64 58.25 Note: Remuneration excludes amount payable in respect of pay revision except to the extent of adhoc relief paid. 81

Chennai Petroleum Corporation Limited 23. The Profit and Loss Account includes: a) Expenditure on Public Relations and Publicity amounting to Rs. 149.31 lakhs ( 2008: Rs. 146.21 lakhs). The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00004078: 1 (2008: 0.0000521: 1). b) Research and Development expenses Rs. 330.29 lakhs (2008: Rs. 280.28 lakhs). c) Entertainment Expenses Rs. 43.74 lakhs (2008: Rs. 26.27 lakhs). 24. Previous year s comparative figures have been regrouped and recast, wherever neces sary, to the extent practicable, for uniformity in presentation. Annexure - I Disclosure requirements under AS Defined Contribution Schemes: The net amounts expended in respect of employer s contribution to the provident fu nd and superannuation fund during the year, are Rs. 985.10 lakhs (2008: Rs. 620.77 lakhs) and Rs. 286.89 la khs (2008: Rs. 58.13 lakhs) respectively. This includes Rs. 322.10 lakhs and Rs. 161.05 lakhs, being the est imated provision for employer s contribution to provident fund and superannuation fund respectively on account o f pay revision for supervisory employees for the period 01.01.2007 to 31.03.2009 and accounted during the year. Defined Benefit Schemes: Funded Schemes: (Rs. in lakhs) Net employee benefit Expense Gratuity Earned Leave Encashment 2009 2008 2009 2008 Current Service Cost 80.13 85.24 401.07 344.23 Interest cost on benefit obligation 270.38 129.59 285.01 180.57 Expected (return) / loss on plan assets (160.14) (140.37) (257.45) (125.51) Net actuarial (gain)/loss recognized in the year 2533.92 (41.68) (565.78) 1139.29 Net Benefit Expense 2724.30 32.78 (137.15) 1538.58 UnFunded Schemes: (Rs. in lakhs) Net employee benefit Expense Post Retirement medical Benefits Service award Gift award (Refer Note A) 2009 2008 2009 2008 2008 Current Service Cost 0.00 135.30 58.50 0.48 0.18 Interest cost on benefit obligation 82.69 76.81 14.51 6.25 1.83 15 (Revised) as per Note No. 14

Net actuarial (gain)/loss recognized in the year 87.49 (50.87) 92.13 3.99 0.87 Net Benefit Expense 170.18 161.24 165.14 10.72 2.88 82

Funded Schemes: (Rs. in lakhs) Changes in present value of defined Gratuity Earned Leave Encashment benefit obligation 2009 2008 2009 2008 Opening defined benefit obligation 1762.37 1673.49 3665.17 2430.32 Interest Cost 270.38 129.59 285.01 180.57 Current service cost 80.13 85.24 401.07 344.23 Benefits paid (106.69) (109.25) (338.73) (353.29) Net actuarial (gain)/loss on obligation 2557.89 (16.70) (485.38) 1063.34 Closing defined benefit obligation 4564.09 1762.37 3527.14 3665.17 UnFunded Schemes: (Rs. in lakhs) Changes in present value of defined benefit obligation Post Retirement medical BenefitsService award Gift award (Refer Note A) 2009 2008 2009 2008 2008 Opening defined benefit obligation 1064.48 1014.86 111.73 80.53 23.25 Interest Cost 82.69 76.81 14.51 6.25 1.83 Current service cost 0.00 135.30 58.50 0.48 0.18 Benefits paid (96.35) (111.62) (19.71) (4.80) (0.85) Net actuarial (gain)/loss on obligation 87.49 (50.87) 92.13 3.99 0.87 Closing defined benefit obligation 1138.31 1064.48 257.16 86.45 25.28 1% Increase in cost of post retirement medical benefits will increase the liabil ity by Rs. 27.75 lakhs (2008: Rs. 34 lakhs). 1% decrease in cost will decrease the liability by Rs. 26. 30 lakhs (2008: Rs. 28 lakhs) Funded Schemes: (Rs. in lakhs) Change in fair value of plan assets Gratuity Earned Leave Encashment 2009 2008 2009 2008 Opening Fair value of plan assets 1882.66 1790.51 3248.82 0.00 Expected return 160.14 140.37 257.45 125.51 Contributions 344.79 36.05 245.31 3199.26 Benefits paid (106.69) (109.25) (338.73) 0.00 Actuarial gain/(loss) 23.97 24.98 80.40 (75.95) Closing Fair value of plan assets 2304.88 1882.66 3493.26 3248.82 Investment details Insurer Managed funds 100% 83

Chennai Petroleum Corporation Limited Funded Schemes: (Rs. in lakhs) Balance Sheet Gratuity Earned Leave Encashment 2009 2008 2009 2008 Defined benefit obligation 4564.09 1762.37 3527.14 3665.17 Fair value of plan assets 2304.88 1882.66 3493.26 3248.82 Plan asset/(liability) (2259.21) 120.29 (33.88) (416.35) UnFunded Schemes: (Rs. in lakhs) Balance Sheet Post Retirement Service award Gift award medical Benefits (Refer Note A) 2009 2008 2009 2008 2008 Defined benefit obligation 1138.31 1064.48 257.16 86.45 25.28 Fair value of plan assets ----Plan asset/(liability) (1138.31) (1064.48) (257.16) (86.45) (25.28) Notes : A. During the year, a new service award scheme has been introduced in lieu of the g ift award scheme/old service award scheme. B. During the year, the ceiling for Gratuity has been increased from Rs. 3.5 lakhs to Rs. 10 lakhs. C. EL encashment scheme is administered by the insurer from February 2008. Funded Schemes: Actuarial Assumptions Gratuity & Earned Leave Encashment 2009 2008 Discount Rate (per annum) 7.75% 8% Rate of escalation in salary (per annum) 7% 9% Mortality table LIC 94 - 96 rates Expected rate of return on plan assets (per annum) 8% UnFunded Schemes: Actuarial Assumptions Post Retirement medical Benefit Service award Gift award 2009 2008 2009 2008 2008 Mortality table (before Retirement) LIC 94 96 rates Mortality table (after Retirement) LIC 96 98 rates Not Applicable Discount Rate (per annum) 7.75% 8% 7.75% 8% 8% Inflation Rate (per annum) 7% 6% 7% 6% 6% Rate of morbidity 10% Not Applicable 84

Annexure - II Disclosure requirements under AS (Rs. in lakhs) Details of Transactions Key Management Personnel Joint Ventures Total 31-Mar-09 31-Mar-08 31-Mar-09 31-Mar-08 31-Mar-09 31-Mar-08 Remuneration 65.05 51.42 --65.05 51.42 Other Benefits/ Recoveries 4.49 2.33 --4.49 2.33 Dividend Received --147.93 88.76 147.93 88.76 Outstanding Loans/advances receivables 24.44 10.82 --24.44 10.82 Assets on Hire 6.74 6.14 --6.74 6.14 Note: Remuneration excludes amount payable in respect of pay revision except to the extent of adhoc relief paid. Key Management Personnel Whole-time Directors 1) 2) 3) 4) Shri Shri Shri Shri K.K.Acharya N.C.Sridharan S.Chandrasekaran K. Balachandran 18 as per Note No. 15

Joint Venture Companies 1) Indian Additives Limited 2) National Aromatics and Petrochemicals Corporation Limited. 85

Chennai Petroleum Corporation Limited LICENSED CAPACITY, INSTALLED CAPACITY AND ACTUAL PRODUCTION Schedule S (Figures in Lakhs) UNIT Licensed Capacity Installed Capacity Actual Production 31 March, 200931 March, 2008 31 March, 2009 31 March, 2008 31 March, 2009 31 March, 2008 i) Crude Processing MTs 105.00 105.00 105.00 105.00 101.25 102.66 ii) Propylene Recovery Unit MTs 0.30 0.30 0.30 0.30 0.31 A 0.29 iii) Wax Plant MTs 0.30 0.30 0.30 0.30 0.28 A 0.29 Note : A. Represents finished petroleum products FINISHED PRODUCTS - QUANTITY AND VALUE PARTICULARS Schedule T (Figures in Lakhs) Opening Stock Purchases Sales Closing Stock Quantity MTs Value Rupees Quantity MTs Value Rupees Quantity MTs Value Rupees Quantity MTs Value Rupees 1. PETROLEUM / PETRO-CHEMICAL PRODUCTS Year ended 31.03.09 4.69 182191.85 2.76 149848.22 96.41 3645528.98 3.25 80934.89 Year ended 31.03.08 2. WAX 4.99 147957.72 3.14 124684.79 96.30 3288357.51 4.69 182191.85 Year ended 31.03.09 0.02 672.01 0.00 0.00 0.28 15636.70 0.02 672.01 Year ended 31.03.08 3. TOTAL 0.02 912.34 0.00 0.00 0.29 15299.37 0.02 672.01 Year ended 31.03.09 4.71 182863.86 2.76 149848.22 96.69 3661165.68 3.27 81606.90

Year ended 31.03.08 5.01 148870.06 3.14 124684.79 96.59 3303656.88 4.71 182863.8 6 86

CONSUMPTION PARTICULARS OF RAW MATERIALS, STEEL COILS / SHEETS / Schedule U STORES / SPARE PARTS AND COMPONENTS Imported Indigenous Quantity Total Value (Rs. in lakhs) % to total Consumption Value (Rs. in lakhs) % to total Consumption MTs (in lakhs) Rupees (in lakhs) 31 March 2009 Crude Oil and Gas Packing Materials 2529642.90 90 296632.57 10 101.25 2826275.47 Consumed Steel Coils/Sheets/Stores/ Component and 126.90 100 126.90 Spare Parts 31 March 2008 4690.40 38 7802.45 62 12492.85 Crude Oil and Gas Packing Materials 2063776.81 84 399451.32 16 102.66 2463228.13 Consumed Steel Coils/Sheets/Stores/ Component and 118.01 100 118.01 Spare Parts 2069.45 16 10756.89 84 12826.34 EXPENDITURE IN FOREIGN CURRENCY FOR ROYALTY, KNOW-HOW, Schedule V PROFESSIONAL & CONSULTATION FEES, DIVIDEND & OTHER MATTERS (Rs. in Lakhs) Note 31 March, 31 March, 2009 2008 1. Professional, Consultation Fees 665.30 2008.68 and Technical Fees 2. Interest 4720.02 2780.94 3. Dividend (Net of taxes) A 3916.74 2765.16 4. Others 121.19 97.85 Total B 9423.25 7652.63 Note : A. Represents interim dividend payment made to 388 Non-Resident Shareholders for the year 2007-08 holding 23039300 number of shares and final dividend payment made to 390 Non-Resident Sh areholders for the year 2007-08 holding 23039800 number of shares (2008: 402 Non-Resident Shareholders f or the year 2006-07 holding 23043000 number of shares)

B. Expenditure in Foreign Currency has been considered on accrual basis. 87

Chennai Petroleum Corporation Limited EARNINGS IN FOREIGN CURRENCY Schedule W (Rs. in Lakhs) 31 March, 31 March, 2009 2008 Export of Petroleum Products 0.00 0.00 Total 0.00 0.00 CIF VALUE OF IMPORTS Schedule X (Rs. in Lakhs) Note 31 March, 31 March, 2009 2008 1. Crude Oil A 2497721.67 1984794.58 2. Capital Goods 2093.88 447.69 3. Revenue Stores, Component, Spare and Chemicals 2020.18 3757.04 Total 2501835.73 1988999.31 Note: A. Includes value of imports made through Indian Oil Corporation 88

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE Schedule - Y I. Registration Details Registration No. : 5389 1965 State Code : 18 Balance Sheet Date 31 03 2009 Date Month 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 728182.95 728182.95 Sources of Funds Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax Li ability 14900.46 291823.41 41961.64 112828.86 41400.20 Application of Funds Net Fixed Assets Intangible Assets Investments Net Current Assets Misc. Expenditure Accumulated Losses 357083.97 1920.87 2281.41 141628.32 NIL NIL IV. Performance of Company (Amount in Rs. Lakhs) Turnover Total Expenditure Earning Per Share in Rs. 3196390.63 3139542.20 (26.68) +/ Profit/Loss Before Tax +/ Profit/Loss After Tax Dividend rate % 59311.00 39728.43 ( Please tick Appropriate box + for Profit - for Loss) V. Generic Names of Three Principal Products/Services of Company (as per monetar y terms) Item Code No. Product Description (ITC Code) 2710 2710 2710 HIGH SPEED DIESEL MOTOR SPIRIT

FURNACE OIL 89

Chennai Petroleum Corporation Limited CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009 Schedule Z (Rs. in Lakhs) Year ended Year ended Particulars March 31, 2009 March 31, 2008 A. Cash Flow from Operating Activities Profit Before Tax (59311.00) 172162.93 Adjustments for : Depreciation 25082.19 25160.88 Income from Long - term Investment (147.93) (88.76) Profit on Sale of Assets (17.55) (3.14) Liabilities/Prov. for Claims written back (146.96) (576.98) Advances, Claims and Material written off 104.51 237.31 Provision for Doubtful Claims and obsolescence of stores/Investments 1548.02 137.89 Loss on Sale of Assets/investments 345.12 52.48 Interest on Borrowings 22366.18 19480.81 Interest income from short term investment (131.20) (662.80) B. Operating Profit Before Working Capital Changes (10308.62) 215900.62 C. Changes in Working Capital (Excluding Cash & Bank Balances) Trade and Other Receivables 52775.67 (49756.41) Inventories 196174.66 (121874.85) Trade and Other Payables (37218.26) 11250.99 Change in Working Capital 211732.07 (160380.27) D. Cash generated from Operations 201423.45 55520.35 E. Adjustments for Direct Taxes Paid (18733.38) (43673.29) Fringe Benefit Tax Paid (248.50) (218.45) F. Net Cash Flow from Operating Activities 182441.57 11628.61 G. Cash Flow from Investing Activities Purchase of Fixed Assets (49704.31) (33505.80) Sale of Assets 43.62 16.45 Investments (Net) 8494.49 142.81 Interest Income 170.41 662.22 Income from long term investment 147.93 88.76 Net Cash used in Investment Received (40847.86) (32595.56) 90

Schedule Z (Contd.,) (Rs. in Lakhs) Year ended Year ended Particulars March 31, 2009 March 31, 2008 H. Net Cash Flow from Financing Activities Proceeds from/(Repayments of) Long Term Borrowings (13833.75) (21867.90) Proceeds from/(Repayments of) Short Term Borrowings (76421.37) 83500.38 Interest Paid (22306.33) (19472.69) Dividend Paid (25233.80) (17831.58) Corporate Dividend Tax Paid (4302.27) (3036.90) Net Cash Generated/(Used) from Financing Activities (142097.52) 21291.31 I. Net change in Cash & Cash Equivalents (F + G + H) (503.81) 324.36 J. Cash and Cash Equivalents at the end of Financial Year 962.69 1466.50 K. Cash and Cash Equivalents at the beginning of Financial Year 1466.50 1142.14 Net Change in Cash and Cash equivalents (J-K) (503.81) 324.36 Notes : 1. Cash and Cash Equivalents include 1. Cash Balances a) Cash balances including imprest 10.49 0.35 b) Cheques in hand 2. Bank Balances with Scheduled Banks : a) Current Account 630.20 1167.94 b) Deposit Account 322.00 952.20 298.21 1466.15 Total 962.69 1466.50 2. The Previous year s figures have been regrouped wherever necessary for uniformity in presentation (K.K.Acharya) Managing Director (N.C.Sridharan) Director (Finance) (M.Sankaranarayanan) Company Secretary As per our Report of even date M. Thomas & Co. Chartered Accountants

Sreedhar, Suresh & Rajagopalan Chartered Accountants Place : New Delhi Dated : May 28, 2009 (A. Rozario) Partner Membership No. 21230 (V. Suresh) Partner Membership No. 26525 91

92Chennai Petroleum Corporation LimitedChennai Petroleum Corporation Limited

93 PROXY Folio No. : ------------------------No. of Shares : ------------------------I/We ........................................................................... ..... of ............................................................ in the Dis trict 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 Third Annual General Meeting of the Company to be held on the 7th day of September 2009 and at every adjournment the reof. Signed this .......................................... day of .................. ........................ 2009. 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 O ffice 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. Chennai Petroleum Corporation Limited 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 THIRD ANNUAL GENERAL MEETING at 2.30 p. m. on 7th SEPTEMBER 2009 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 copie s of Annual Report with them. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chennai Petroleum Corporation Limited

94 Chennai Petroleum Corporation LimitedChennai Petroleum Corporation Limited

Chennai Petroleum Corporation Limited (A group company of IndianOil) Dear Shareholders, As you may be aware, the equity shares of the Company are traded in dematerializ ed form with effect from 15.02.1999. To facilitate holding and tranfer of equity shares of the Company in the Electro nic mode, the Company had also signed a tripartite agreement with both the depositories viz., National Securiti es Depository Limited and Central Depository Services (India) Limited. Electronic trading of shares will facilitate easy and quick transfer of shares b y the shareholders. Other benefits of dematerialisation and trading in electronic system are as foll ows: Safety from bad delivery and fake certificate. You can even freeze your account with the Depository Participant, that means, yo u can lock your account so that the Depository Participant will not be able to carry out any transactions withou t 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. th ere 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 faci lities to pledge / hypothecate dematerialized securities if both pledgee (lender) and pledgor (borrower) hold a ccounts 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 do cuments 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 a nd suffer delays on account of processing time. In addition to the above advantages, the problem relating to loss of original sh are certificates and issue of duplicate share certificates can be avoided, if the shares are held in electroni c 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 Pa rticipants 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, Place : Chennai M. Sankaranarayanan Date : 30.07.2009 Company Secretary 95