CPCL Annual Report

Chennai Petroleum Corporation Limited
Corporate Information
Report to Shareholders
25
Report of the Statutory Auditors
49
Financial Information
55
ECS Mandate Format
95
Proxy / Attendance Slip
97
REGISTERED OFFICE
No.536, Anna Salai, Teynampet,
Chennai - 600 018
PRINCIPAL BANKER
State Bank of India
Corporate Accounts Group Branch
Greams Road, Chennai - 600 006
REFINERIES
Manali Refinery
Manali, Chennai - 600 068
Cauvery Basin Refinery
Panangudi Village
Nagapattinam District, Tamil Nadu
Visit CPCL at
www.cpcl.co.in
AUDITORS
M/s. Padmanabhan Prakash & Co.
Chartered Accountants, Chennai
M/s. B. Purushottam & Co.
Chartered Accountants, Chennai
REGISTRARS &
SHARE TRANSFER AGENTS
M/s. Karvy Computershare
Private Limited
46, Avenue 4, Street No.1
Banjara Hills, Hyderabad - 500 034
G-1, Swathy Court,
22, Vijayaraghava Road,
T.Nagar, Chennai - 600 017
33/1, Venkataraman Street,
T. Nagar, Chennai - 600 017
Corporate
Information
Board of Directors
Executives
Notice
Corporate Governance
12
Board of Directors
Mr. S. Behuria
Chairman
Mr. K.K. Acharya

Managing Director
Mr. R. Sankaran
Director (Technical)
(upto 30.04.2006)
Mr. N.C. Sridharan
Mr. A.M. Uplenchwar
Director (Finance)
Director (Pipelines)
Indian Oil Corporation Limited
Mr. A. Kasturi Rangan

Director (Operations)
Mr. B.N. Bankapur
Mr. L. Sabaretnam
Executive Director (Operations)

Mr. S. Chandrasekaran Indian Oil Corporation Limited
(from 02.07.2006)
Mr. M. Vaezi
Director
Naftiran Intertrade Company Limited
Chief Executive Officer,

ICL Sugars Limited
Mr. K. Suresh, I.A.S.

Chairman, Chennai Port Trust
Mr. Venkatraman Srinivasan

Mr. Mansoor Rad
Senior Partner,
Finance Director,
Naftiran Intertrade Company Limited
V. Sankar Aiyar & Co.,

Chartered Accountants
Prof. M.S. Ananth

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

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

Director (R & A),
Ministry of Petroleum & Natural Gas,
Government of India
Mr. Pramod Nangia

Director (M),
Ministry of Petroleum & Natural Gas,
Government of India

Executives
Mr. N. Sankaran
Chief Vigilance Officer
Mr. S. Velumani
General Manager (Corporate Planning)
Mr. V.R. Raman

General Manager (Development / R & D)
Mr. N.K. Natarajan

General Manager (Projects)
Mr.R. Anand
General Manager (Maintenance)
Mr.N. Sethurathinam
General Manager (Vigilance)
Mr.V. Natarajan
General Manager (Finance)
Mr.V. Srinivasan
General Manager (Human Resources) &
Company Secretary
Mr.N.K. Rajamani
General Manager (Logistics & Planning)
Mr.D. Jagannadha Rao

General Manager (Cauvery Basin Refinery)
Notice
Notice is hereby given that the 40th Annual General Meeting of the Shareholders of the Company will be held
at 3.00 P.M. on Friday, the 25th August 2006 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 2005 to 31st March 2006 and the Audited Balance Sheet as at 31st March 2006, together with the
Directors Report and the Auditors Report.
2. To declare Dividend.
3. To appoint a Director in the place of Mr.Sarthak Behuria, who retires and being eligible, offers himself for
re-appointment.
4. To appoint a Director in the place of Mr.N.C.Sridharan, who retires and being eligible, offers himself for
re-appointment.
5. To appoint a Director in the place of Mr.A.Kasturi Rangan, who retires and being eligible, offers himself for
re-appointment.
6. To appoint a Director in the place of Mr.L.Sabaretnam, who retires and being eligible, offers himself for
re-appointment.
7. To appoint a Director in the place of Mr.A.M.Uplenchwar, who retires and being eligible, offers himself for
re-appointment.
8. To appoint a Director in the place of Mr.B.N.Bankapur, who retires and being eligible, offers himself for
re-appointment.
9. To appoint a Director in the place of Mr.Venkatraman Srinivasan, who retires and being eligible, offers
himself for re-appointment.
10. To appoint a Director in the place of Mr.K.Suresh, who retires and being eligible, offers himself for re-appointment.
SPECIAL BUSINESSES:
11. APPOINTMENT OF MR.K.L.KUMAR AS A DIRECTOR
To consider and, if thought fit, to pass, with or without modifications, the following resolution as an
Ordinary Resolution:
RESOLVED that Mr.K.L.Kumar be and is hereby appointed as a Director of the Company.
12. APPOINTMENT OF PROF.M.S.ANANTH AS A DIRECTOR
RESOLVED that Prof.M.S.Ananth be and is hereby appointed as a Director of the Company.
13. APPOINTMENT OF MR.K.K.ACHARYA AS A DIRECTOR
RESOLVED that Mr.K.K.Acharya be and is hereby appointed as a Director of the Company.
14. APPOINTMENT OF MR.RAVI CAPOOR AS A DIRECTOR
RESOLVED that Mr.Ravi Capoor be and is hereby appointed as a Director of the Company.
15. APPOINTMENT OF MR.PRAMOD NANGIA AS A DIRECTOR
RESOLVED that Mr.Pramod Nangia be and is hereby appointed as a Director of the Company.
16. APPOINTMENT OF MR.S.CHANDRASEKARAN AS A DIRECTOR
RESOLVED that Mr.S.Chandrasekaran be and is hereby appointed as a Director of the Company.
By order of the Board
V. Srinivasan
Company Secretary
Date : 07.07.2006
Place : Chennai

Notes:
1.
A member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy
to attend and vote instead of himself.
2.
The proxy need not be a member of the Company.
3.
The instrument of Proxies, in order to be effective, must be lodged at the Registered Office of the
Company not later than 48 hours before the time of holding the meeting.
4.
Members/Proxies should bring their attendance slip, duly filled in, to the meeting.
5.
Members, who hold shares in the dematerialised form, are requested to bring their depository account
number for identification at the time of Annual General Meeting.
6.
An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of resolutions
set out under Special Businesses of the Notice is annexed.
7.
The Register of Members and the Share Transfer Books of the Company will remain closed from 18th
August 2006 to 25th August 2006 (both days inclusive).
8.
Members are requested to immediately intimate any change in their addresses registered with the
Company.
9.
Members are informed that the Company is extending the Electronic Clearing Service (ECS) facility to
the Members to enable them to receive their Dividend through electronic mode to their bank account.
In order to avail the ECS facility, the Members are requested to fill, sign and send the ECS mandate
form, which forms part of this Annual Report, alongwith a photocopy of the cheque issued by the Bank
for verifying the accuracy of the MICR Code Number, to:
(a)
M/s.Karvy Computershare Private Limited, 21, Avenue 4, Street No.1, Banjara Hills, Hyderabad500 034 (in case of Members holding shares in physical mode).
(b)
the Depository Participants concerned (in case of Members holding shares in electronic mode/
dematerialized form).
10. The shares of the company are compulsorily traded in dematerialized form and therefore, the shareholders
are requested to dematerialize their shares to facilitate trading in CPCL shares.
11. As per the provisions of the Companies Act, 1956, shareholders are entitled to make nomination in
respect of shares held by them in physical form. Nomination form can be downloaded from the website
of the company at www.cpcl.co.in.
12. The Board of Directors had declared an Interim Dividend of 30% for the year 2005-2006 in January 2006.
The Board of Directors have recommended a Final Dividend of 90% for the year 2005-2006 making the
aggregate Dividend at 120% for the year 2005-2006. Final Dividend, upon its declaration at the Meeting,
will be paid in respect of physical shares to those Members, whose names appear in the Register of
Members of the Company as on 25th August 2006 and in respect of electronic shares, to those members,
whose names appear in the Beneficial List to be furnished by the depositories to the Company for this
purpose.
13. A brief Resume of the Directors of the Company, seeking appointment/re-appointment at this Annual
General Meeting, and their expertise in specific functional areas is given as part of the Explanatory
Statement.
14. Inspection of Documents: The relevant documents are available for inspection by the members at the
Registered Office of the Company at any time during the working hours till the date of the meeting.
Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956
Item No.11
Mr.K.L.Kumar was appointed as an Additional Director with effect from 31.12.2005. As per the provisions of
Section 260 of the Companies Act, 1956, Mr.K.L.Kumar will hold office only upto the date of the fortieth
Annual General Meeting.
A Notice under Section 257 of the Companies Act, 1956 has been received proposing the appointment of
Mr.K.L.Kumar as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.K.L.Kumar.
Item No.12
Prof.M.S.Ananth was appointed as an Additional Director with effect from 31.12.2005. As per the provisions
of Section 260 of the Companies Act, 1956, Prof.M.S.Ananth will hold office only upto the date of the fortieth
Prof.M.S.Ananth as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Prof.M.S.Ananth.
Item No.13
Mr.K.K.Acharya was appointed as an Additional Director with effect from 20.1.2006. As per the provisions of
Section 260 of the Companies Act, 1956, Mr.K.K.Acharya will hold office only upto the date of the fortieth
Mr.K.K.Acharya as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.K.K.Acharya.
Item No.14
Mr.Ravi Capoor was appointed as an Additional Director with effect from 27.02.2006, in the place of
Mr.Prabh Das. As per the provisions of Section 260 of the Companies Act, 1956, Mr.Ravi Capoor will hold
office only upto the date of the fortieth Annual General Meeting.
Mr.Ravi Capoor as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.Ravi Capoor.
Item No.15
Mr.Pramod Nangia was appointed as an Additional Director with effect from 27.02.2006. As per the provisions
of Section 260 of the Companies Act, 1956, Mr.Pramod Nangia will hold office only upto the date of the
fortieth Annual General Meeting.
Mr.Pramod Nangia as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.Pramod Nangia.
Item No.16
Mr.S.Chandrasekaran was appointed as an Additional Director with effect from 02.07.2006. As per the provisions
of Section 260 of the Companies Act, 1956, Mr.S.Chandrasekaran will hold office only upto the date of the
fortieth Annual General Meeting.
Mr.S.Chandrasekaran as a Director. Hence, this resolution is proposed.
Memorandum of Interest:None of the Directors is interested in the resolution except Mr.S.Chandrasekaran.

BRIEF RESUME OF THE DIRECTORS OF THE COMPANY, SEEKING APPOINTMENT/RE-APPOINTMENT
AT THE 40TH ANNUAL GENERAL MEETING
1. Mr.Sarthak Behuria was appointed on the Board effective 01.03.2005. He is an alumnus of St. Stephens
College, Delhi and the Indian Institute of Management (IIM), Ahmedabad. He has more than three decades
of experience in the field of refining and marketing. He joined Burmah 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 and as CMD of BPCL in July 2002.
Mr.Sarthak Behuria is presently the Chairman of Indian Oil Corporation Limited. He is also the part-time
Chairman of IBP Co. Ltd., Bongaigaon Refinery and Petrochemicals Limited, Indian Oil Tanking Limited
and Lanka-IOC Limited.
2. Mr.N.C.Sridharan was appointed on the Board effective 05.03.2004, as Director (Finance). He is a Chartered
Accountant and an Associate Member of the Institute of Company Secretaries of India. He has nearly
three decades of experience in Engineering, Chemical and Pharmaceuticals, Fibre, Cement, Cotton
Spinning and Software industries in Corporate Finance, Treasury, Accounts, Loans Syndication, Project
Finance, Commercial Taxation Direct & Indirect and Secretarial & Legal. Prior to his appointment as
Director (Finance), he was General Manager (Finance) in CPCL.
Mr.N.C.Sridharan is also a Director on the Board of Indian Additives Limited and National Aromatics and
Petrochemicals Corporation Limited. He is a member of the Shareholders/ Investors Grievance Committee
of CPCL and Audit Committee of Indian Additives Limited.
3. Mr.A.Kasturi Rangan was appointed on the Board effective 13.8.2004, as Director (Operations). He is a
Mechanical Engineer. Prior to joining CPCL in 1986, he had worked in Bharat Heavy Electricals Limited
and Madras Fertilizers Limited. He has more than three decades of experience in the areas of Information
Technology, Production, Maintenance, Utilities, OM&S, Fire & Safety and Industrial Relations. Prior to
his appointment as Director (Operations), he was Executive Director (Operations) in CPCL.
Mr.A.Kasturi Rangan is also a Director on the Board of Indian Additives Limited and a member of the
Audit Committee of Indian Additives Limited.
4. Mr.L.Sabaretnam was appointed on the Board effective 28.02.2002. He is a Post-Graduate in Business
Administration from the University of Madras. He is the Chief Executive Officer of ICL Sugars Limited.
Mr.L.Sabaretnam is the Chairman of Oriental Solutions Private Limited, Oriental Billing Services Private
Limited and LMS Builders & Engineers Pvt. Ltd. He is an Advisor of India Cements Limited and Trustee
of T.S.Narayanaswamy College of Arts and Science. He is a member of various business associations
and social bodies.
Mr.L.Sabaretnam is the Chairman of the Audit Committee, Shareholders/Investors Grievance Committee
and Projects Sub-Committee of CPCL.
5. Mr.A.M.Uplenchwar was appointed on the Board effective 28.03.2005. He is a Mechanical Engineer from
College of Engineering, Pune. He has a First Class Marine Engineer (Diesel) Certificate issued by Ministry
of Transport. He has more than three decades of experience, 11 years of which is with the Shipping
Industry and 26 years with the Oil Industry. He is in-charge of IndianOils Network of over 7730 km long
58.35 mmtpa capacity cross country pipelines for transporting crude oil and petroleum products across
the country.
Mr.A.M.Uplenchwar is the Director (Pipelines) of Indian Oil Corporation Limited. He is also the Chairman of
Petronet India Limited, Petronet CCK Ltd and Indian Strategic Petroleum Reserves Limited. He is also a
Director on the Board of Indian Oiltanking Limited, Bongaigaon Refinery and Petrochemicals Limited and Oil
and Natural Gas Corporation Limited. He is a member of the Projects Sub-Committee of CPCL. He is also a
member of Planning & Projects Committee, Contracts Committee and Establishment Committee of Indian Oil
Corporation Limited and Compensation and MDs Remuneration Committees of Petronet India Limited.
6. Mr.B.N.Bankapur was appointed on the Board effective 17.01.2005. He is a Chemical Engineer from National
Institute of Technology, University of Mysore. He has nearly three decades of experience in different areas of
Refinery Technology. He has also gained valuable experience in different activities like monitoring / execution
and commissioning of Indias first riser type FCC Project, trouble shooting, process safety and pollution
control.
Mr.B.N.Bankapur is presently the Executive Director (Operations) of Indian Oil Corporation Limited. He is also
a Director on the Board of Indian Strategic Petroleum Reserves Limited. He is a Member of the Projects SubCommittee of CPCL.
7. Mr.Venkatraman Srinivasan was appointed on the Board effective 15.4.2005. He is a Commerce Graduate and
Fellow Member of the Institute of Chartered Accountants of India. He is a Senior Partner of
M/s.V.Sankar Aiyar & Co., Chartered Accountants, Mumbai, who are the Statutory Auditors of many leading
corporate houses in the country.
Mr.Venkatraman Srinivasan is also a Director on the Board of Cybertrade India Private Limited and Credit
Analysis and Research Ltd (CARE). He is a Member of the Audit Committee of CPCL and Chairman of the Audit
Committee of CARE.
8. Mr.K.Suresh was appointed on the Board effective 19.10.2004. He holds a Masters Degree in Fisheries Science
from the College of Fisheries, University of Agricultural Sciences, Bangalore. He also holds a Masters Degree
in Science from University of Manchester, Institute of Science and Technology, Manchester, U.K. He belongs to
the 1982 batch of Indian Administrative Service. He is currently the Chairman, Chennai Port Trust. He has more
than two decades of experience in different Departments of Government of Madhya Pradesh.
Mr.K.Suresh is also a Director on the Board of Ennore Port Limited. He is a Member of the Audit Committee
and Share Transfer Committee of Ennore Port Limited.
9. Mr.K.L.Kumar was appointed on the Board effective 31.12.2005. He holds a Bachelors Degree in Mechanical
Engineering. He has 15 years of experience in Engineering Consultancy Services in various organizations. He
has also served 22 years in Kochi Refineries Limited, where he joined as DGM (Technical Services) and elevated
to the post of CMD. He served as CMD of Kochi Refineries Limited for 11 years.
Mr.K.L.Kumar is also a Director on the Board of Kerala Chemicals and Proteins Limited. He is a Member of the
Audit Committee of CPCL. He is also a Member of Audit Committee, Shareholders/Investors Grievance
Committee and Remuneration Committee of Kerala Chemicals and Proteins Limited.
10. Prof.M.S.Ananth was appointed on the Board effective 31.12.2005. He holds a B.Tech and a Masters Degree in
Engineering and Ph.D from Florida University. Presently, he is Director, Indian Institute of Technology, Chennai.
He joined as Assistant Professor at IIT, Chennai and elevated to the post of Director. He worked as a Visiting
Professor in various Universities all over the World. He is also a Fellow Member in various Professional Bodies.
10

11. Mr.K.K.Acharya was appointed on the Board effective 20.1.2006. He is a Graduate in Chemical Engineering
and M.Tech. in Chemical Engineering from IIT, Kharagpur. He has more than three decades of experience
in oil refining and downstream petrochemical fields, which includes 2 years in Malaysia.
Presently, he is the Managing Director of the company. He is also the Chairman of Indian Additives
Limited and National Aromatics and Petrochemicals Corporation Limited. He is a Trustee on the Board
of Trustees of Chennai Port Trust. He is a Member of the Governing Body of Tamilnadu Energy Development
Agency.
12. Mr.Ravi Capoor was appointed on the Board effective 27.2.2006. He belongs to Indian Administrative
Service (IAS). He has more than two decades of multi-sectoral experience in the areas of Energy,
Handicrafts industry, Tourism development, Education etc. Presently, he is Director (R&A) in the Ministry
of Petroleum and Natural Gas, Government of India.
Mr.Ravi Capoor is also a Director on the Board of Engineers India Limited.
13. Mr.Pramod Nangia was appointed on the Board effective 27.2.2006. He is a Bachelor in Economics and
Laws from the University of Delhi. He belongs to Indian Revenue Service (IRS). He joined IRS in 1985 and
over the years, has specialized in the administration and functioning of direct taxes in India. Presently, he
is Director (Marketing) in the Ministry of Petroleum and Natural Gas, Government of India.
Mr.Pramod Nangia is also a Director on the Board of IBP Co. Limited.
14. Mr. S. Chandrasekaran was appointed on the Board effective 2.7.2006, as Director (Technical). He holds
B.Tech Degree in Chemical Engineering from the Regional Engineering College, Trichy. Prior to joining
CPCL in 1981, he had worked in Fertilizers Corporation of India Limited for six years. He has more than
two decades of experience in the areas of Operations, Projects and Development, which includes two
years as Head of Operations Section in KNPC, Kuwait. Prior to his appointment as Director (Technical),
he was General Manager (i/c) in CPCL.
Date :
Place :
By order of the Board

V. Srinivasan
Company Secretary
07.07.2006
Chennai
11
Corporate Governance
1.0
COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

CPCL believes that Corporate Governance represents the value, ethical and the moral frameworks
under which the business decisions are taken in a Corporation. In its mission towards enhancing the
stakeholder value, your Company adopts the highest standards of value creation, accountability,
professionalism, social responsiveness and ethical business practices as a self-disciplining code for
Corporate Governance.
The Companys Corporate Governance philosophy encourage doing things right and doing the right
things which are the basic tenets of good Corporate Governance.
2.0
BOARD OF DIRECTORS
2.1 The Board of Directors of CPCL consisted of sixteen Directors as on 31.03.2006.
2.2 The break-up of the total composition of the Board as on 31.03.2006 is as follows:
2.2.1 One Non-Executive Chairman, who is the Chairman of Indian Oil Corporation Limited
(the Holding Company).
2.2.2 Four whole-time Functional Directors, viz., Managing Director, Director (Technical),
Director (Finance) and Director (Operations).
2.2.3 Director (Pipelines) and one Senior Executive of Indian Oil Corporation Limited.
2.2.4 One Director, who is the Chairman, Chennai Port Trust.
2.2.5 Two Directors nominated by National Iranian Oil Company, one of the promoters,
in terms of the Formation Agreement.
2.2.6 Two Directors from the Administrative Ministry, viz., Ministry of Petroleum and Natural Gas.
2.2.7 Four non-official Directors.
2.3 Out of the total number of sixteen Directors as on 31.03.2006, twelve Directors were Non-Executive
Directors. The Company has a Non-Executive Chairman. The number of Independent Directors,
in such a case, needs to be one-third of the total number of Directors. With the total number of
non-executive independent Directors being five as on 31.03.2006, the Company met the requirement
of minimum number of Independent Directors as stipulated in the Listing Agreement.
Subsequently, Mr.R.Sankaran, Director (Technical) superannuated on 30.04.2006 and Mr.Mansoor
Rad, Financial Director, Naftiran Intertrade Company Limited (NICO), Tehran, Iran has been appointed
as Director in place of Mr.M.B.Samiei Khonsari on 09.05.2006. With the above changes, the total
number of Directors as on the date of the Directors Report 2005-2006 has been reduced to 15.
12

2.4
2.5
Seven Board Meetings were held during the year 2005-2006. The dates on which the Board Meetings
were held are given below:
Board Meeting No.
Board Meeting Date
236
237
238
239
240
241
242
12.05.2005
27.06.2005
29.07.2005
24.08.2005
27.10.2005
28.01.2006
30.03.2006
Details relating to:

(a)
Attendance of Directors at the Board Meetings held during the financial year April 2005 to
March 2006 and at the last Annual General Meeting held on 24.08.2005,
(b)
Number of other directorships, and
(c)
Number of memberships / chairmanships held by the Directors in the committees of various

companies, are given below:
Name of the Directors
No. of
Board
Meetings
Attended
Whether
attended
last AGM?
Mr.S.Behuria
Yes
Mr.S.V.Narasimhan
(Refer Note 1)
Not applicable
Mr.R.Sankaran
(Refer Note 2)
Yes
Mr.N.C.Sridharan
Yes
Mr.A.Kasturi Rangan
Yes
Mr.A.M.Uplenchwar
Yes
Mr.B.N.Bankapur
Yes
Mr.Prabh Das
(Refer Note 3)
Not Attended
Mr.L.Sabaretnam
Yes
Mr.K.Suresh
Yes
Mr. K.K. Acharya

(Refer Note 4)
Not applicable

(Refer Note 5)
Yes
Mr. K.L. Kumar

(Refer Note 6)
Not applicable
13
Other
Committee
Committee
Directorships Memberships Chairmanships
Prof. M.S. Ananth

(Refer Note 7)
Not applicable
Mr. Ravi Capoor

(Refer Note 8)
Not applicable
Mr. Pramod Nangia

(Refer Note 9)
Not applicable
Mr.M.B.Samiei Khonsari or
his alternate Director
(Refer Note 10)
Yes
Mr.M.Vaezi or his
alternate Director
Yes
Notes:
1.
Mr.S.V.Narasimhan, Managing Director ceased to be a Director effective 30.06.2005, consequent upon

his appointment as Director (Finance), Indian Oil Corporation Limited. Two Board Meetings were held
during his tenure, in the financial year 2005-2006.
2.
Mr.R.Sankaran, Director (Technical), ceased to be a Director on attaining the age of superannuation

effective 30.04.2006. He was holding the additional charge of the post of Managing Director from
01.07.2005 to 20.01.2006. Seven Board Meetings were held during his tenure, in the financial year
2005-2006.
3.
Mr.Prabh Das, Joint Secretary (Refineries), Ministry of Petroleum and Natural Gas ceased to be a
Director effective 21.02.2006 as he had submitted his resignation. During his tenure, six Board Meetings
were held.
4.
Mr.K.K.Acharya, Executive Director (Operations), Gujarat Refinery, Indian Oil Corporation Limited, was
appointed as Managing Director effective 20.01.2006 and two Board Meetings were held after his
appointment.
5.
Mr.Venkatraman Srinivasan, Senior Partner, M/s.V.Sankar Aiyar & Co., Chartered Accountants,
Mumbai, was appointed as a Director effective 15.04.2005 and seven Board Meetings were held after
his appointment.
6.
Mr.K.L.Kumar, Former Chairman and Managing Director, Kochi Refineries Limited, was appointed as a
Director effective 31.12.2005 and two Board Meetings were held after his appointment.
7.
Prof.M.S.Ananth, Director, Indian Institute of Technology, Chennai, was appointed as a Director effective
31.12.2005 and two Board Meetings were held after his appointment.
8.
Mr.Ravi Capoor, Director (R&A), Ministry of Petroleum and Natural Gas, Government of India was
appointed as a Director effective 27.02.2006 in place of Mr.Prabh Das, Joint Secretary (Refineries),
Ministry of Petroleum and Natural Gas and one Board Meeting was held after his appointment.
9.
Mr.Pramod Nangia, Director (M), Ministry of Petroleum and Natural Gas, Government of India was
appointed as a Director effective 27.02.2006 and one Board Meeting was held after his appointment.
10.
Mr.M.B.Samiei Khonsari, ceased to be a Director effective 09.05.2006 consequent to the appointment

of Mr.Mansoor Rad as a Director in his place.
14

3.0
AUDIT COMMITTEE
3.1 Composition of the Committee as on 31.03.2006:
1. Mr.L.Sabaretnam, Chief Executive Officer, ICL Sugars Limited, Chennai.
2. Mr.M.B.Samiei Khonsari, Deputy Finance Director, National Iranian Oil Company - or his
Alternate Director.
3. Mr.Venkatraman Srinivasan, Senior Partner, M/s. V. Sankar Aiyar & Co., Chartered Accountants,
Mumbai.
4. Mr.K.L.Kumar, Former Chairman and Managing Director, Kochi Refineries Limited, Kochi
Mr.L.Sabaretnam is the Chairman of the Committee.
Subsequently, Mr.Mansoor Rad, Financial Director, Naftiran Intertrade Company Limited (NICO), Tehran,
Iran was inducted as a member of the Audit Committee in place of Mr.M.B.Samiei Khonsari effective
14.05.2006.
3.2 Terms of reference of Audit Committee:
The Audit Committee has been vested with the following powers and functions:
3.2.1 POWERS
1. To investigate any activity within its terms of reference;
2. To seek information from any employee;
3. To obtain outside legal or other professional advice;
4. To secure attendance of outsiders with relevant expertise, if it considers necessary;
5. To have full access to information contained in the records of the company and external
professional advice, if necessary.
3.2.2 FUNCTIONS
1. Oversight of the Companys financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the
replacement or removal of the statutory auditor and the fixation of audit fees,
3. Approval of payment to statutory auditors for any other services rendered by the
statutory auditors.
4. Reviewing, with the management, the annual financial statements before submission
to the Board for approval, with particular reference to :
a)
Matters required to be included in the Directors Responsibility Statement to be

included in the Boards Report in terms of Clause (2AA) of Section 217 of the
Companies Act, 1956.
b)
Changes, if any, in accounting policies and practices and reasons for the same.
15
c)
Major accounting entries involving estimates based on the exercise of judgement

by management.
d)
Significant adjustments made in the financial statements arising out of audit findings.
e)
Compliance with listing and other legal requirements relating to financial

statements.
f)
Disclosure of any related party transactions.
g)
Qualifications in draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission
to the Board for approval.
6. Reviewing with the management, the performance of statutory and internal auditors,
adequacy of the internal control systems.
7. Reviewing the adequacy of internal audit function, if any, including the structure of the
internal audit department, staffing and seniority of the official heading the department,
reporting structure coverage and frequency of internal audit.
8. Discussion with internal auditors any significant findings and follow up thereon.
9. Reviewing the findings of any internal investigations by the internal auditors into matters
where there is suspected fraud or irregularity or a failure of internal control systems of
a material nature and reporting the matter to the Board.
10.Discussion with statutory auditors before the audit commences, about the nature and
scope of audit as well as post-audit discussion to ascertain any area of concern.
11.To look into the reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and creditors.
12.To review the functioning of the Whistle-Blower Mechanism, in case the same is existing.
13.Any other functions that may be assigned by the Board to the Audit Committee from
time to time.
3.3 The first Audit Committee Meeting for the financial year 2005-2006 was held on 12.05.2005.
Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and Mr.J.Sohrabian, Alternate member for
Mr. M.B. Samiei Khonsari were present.
3.4 The second meeting was held on 29.07.2005. Mr.L.Sabaretnam and Mr.J.Sohrabian, Alternate
Member for Mr.M.B.Samiei Khonsari were present.
Leave of Absence was granted to
Mr.Venkatraman Srinivasan.
3.5 The third meeting was held on 27.10.2005. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and
Mr.J.Sohrabian, Alternate member for Mr.M.B. Samiei Khonsari were present.
3.6 The fourth meeting was held on 27.01.2006. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan
and Mr.J.Sohrabian, Alternate member for Mr.M.B. Samiei Khonsari were present.
3.7 The fifth meeting was held on 31.03.2006. Mr.L.Sabaretnam, Mr.Venkatraman Srinivasan and
Mr.K.L. Kumar were present. Leave of absence was granted to Mr. M.B. Samiei Khonsari.
16

4.0
REMUNERATION COMMITTEE
4.1
The need for a Remuneration Committee is not felt by the Company in view of the fact that the
Company is a Government Company as per Section 617 of the Companies Act, 1956. The
Remuneration of the whole time Functional Directors are fixed by the Government of India.
4.2
The details of Remuneration paid to all the Functional Directors are given below:
4.2.1 The remuneration of the whole time Functional Directors include basic salary, allowances
and perquisites as determined by the Government of India. Also, they are entitled to
provident fund and superannuation contributions as per the rules of the Company.
The gross value of the fixed component of the remuneration, as explained above, paid to
the whole time Functional Directors, during the financial year 2005-2006 is given below:
(Rs. in Lakhs)
Name of the Director
Salaries &
Allowances
Contribution to
Provident Fund
Contribution to
Superannuation
Fund and Gratuity
Other
Benefits
Total
Mr.K.K. Acharya,
Managing Director
(Refer Note 1)
1.08
0.11
0.01
0.00
1.20
Mr. S. V. Narasimhan
(Managing Director)
(Refer Note 2)
4.73
0.18
0.36
0.05
5.32
Mr.R.Sankaran,
9.92
0.67
0.73
0.13
11.45
Mr. N.C. Sridharan,

Director (Finance)
6.44
0.54
0.54
0.16
7.68
Mr.A.Kasturi Rangan,
Director (Operations)
9.11
0.72
0.72
1.69
12.24
Note 1
Details given are for part of the year only since Mr. K.K. Acharya assumed charge of the post of
Managing Director effective 20.01.2006.
Note 2
Details given are for part of the year only since the term of Mr.S.V.Narasimhan, Managing Director
ended on 30.06.2005 consequent to his appointment as Director (Finance), IOC.
4.2.2 The whole time Functional Directors are appointed for a period of five years or upto the
date of superannuation, whichever event occurs earlier.
4.2.3 No Stock Option Scheme is prevalent in the Company.
4.3
The Company pays sitting fees of Rs.5,000/- for each meeting of the Board/Sub-Committee of
the Board, to such 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.95,000/-
Mr.K.Suresh
Rs.20,000/-
Rs.50,000/-
Mr. K.L. Kumar
Rs.15,000/-
Prof. M.S. Ananth
Rs. 5,000/-
17
4.4
Criteria for payment to Non-Executive Directors:

As per Article 90 A of the Articles of Association of the Company, the remuneration payable to the
Directors of the Company, other than fulltime Directors of the Company or fulltime employees of the
Shareholders for attendance at Meetings of Board of Directors or any Committee thereof, shall be
fixed by the Board of Directors of the Company from time to time.
In line with the above article, the Board of Directors of the Company at the 220th Meeting held on
28.10.2002 has fixed a sum of Rs.5000/- as sitting fees to certain categories of non-executive Directors
who are not the fulltime employees of the shareholders of the Company for attendance at every
meeting of the Board of Directors or any Committee thereof. The sitting fees are being paid in line with
the above decision of the Board of Directors.
4.5
Shares held by Non-Executive Directors:

Except Mr. S. Behuria, who is holding 500 shares, no other Non-Executive Directors hold shares in the Company.
4.6
Compliance with the Code of Conduct for Board Members and other Senior Management
Personnel:
As required under Clause 49 I (D) (ii) of the revised Clause 49 of the Listing Agreement, a declaration
signed by the Managing Director of the Company that all the Board Members and Senior Management
Personnel have affirmed compliance with the provisions of the Code of Conduct for Board Members
and Senior Management Personnel during the financial year ending 31.03.2006 is placed below:This is to declare that all the Board Members and Senior Management Personnel of the Company
have furnished the Annual Compliance Report affirming that they have fully complied with the
provisions of the Code of Conduct for the Board Members and the Senior Management Personnel
of the Company during the financial year ended 31.03.2006 and the same was informed to the
Board at the 243rd Meeting held on 14.05.2006.
Place : Chennai
Date : 24.06.2006
5.0
K. K. ACHARYA
Managing Director
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE

5.1. Composition of the Committee as on 31.03.2006:
1. Mr.L.Sabaretnam, CEO, ICL Sugars Limited
2. Mr.N.C.Sridharan, Director (Finance)
3. Mr. R. Sankaran, Director (Technical)
4. Mr. M. Vaezi, Director, Naftiran Intertrade Company Ltd.
Mr. R. Sankaran, Director (Technical) was a member of the Committee till 30.04.2006.
5.2 The first meeting for the financial year 2005-2006 was held on 29.07.2005. Mr.L.Sabaretnam, Mr.R.Sankaran,
Mr.N.C.Sridharan and Mr.J.Sohrabian, Alternate Member for Mr.M.Vaezi, attended the Meeting.
5.3 The second meeting was held on 27.01.2006. Mr.L.Sabaretnam, Mr.R.Sankaran, Mr.N.C.Sridharan
and Mr.J.Sohrabian, Alternate Member for Mr.M.Vaezi, attended the Meeting.
5.4 Name and designation of compliance officer:
Mr.V.Srinivasan, General Manager (HR) & Company Secretary or in his absence
Mr.M.Sankaranarayanan, Deputy Secretary.
5.5 Number of shareholders complaints received during the year 2005-2006, Number not solved to
the satisfaction of shareholders and Number of pending complaints for the period from 01.04.2005
to 31.03.2006 are given below:
18

Sl.
No.
1
2
3
4
5
6
7
Nature of
complaints
Non-receipt of dividend warrants

Non-receipt of refund orders
Non-receipt of share certificates
Non-receipt of share
certificates sent for transfer
Non-receipt of stickers against
payment of allotment / call money
Non receipt of Annual Reports
Non-receipt of duplicate
share certificates
Total
Opening
Balance
as on
1.4.2005
0
0
0
Received
during the
Financial
year 2005-2006
554
12
57
Total
554
12
57
Solved
Pending
during the
as on
Financial
31.03.2006
year 2005-2006
554
0
12
0
57
0
62
62
62
0
0
37
20
37
20
37
20
0
0
0
0
42
784
42
784
42
784
0
0
Note:1)
A Complaints Committee, consisting of representatives of the Company and the Share Transfer Agents
of the Company, viz., M/s.Karvy Computershare Private Limited, meets at regular intervals to sort out
outstanding complaints and to ensure that investors grievances are attended to promptly. As a result,
there is an institutionalized system of redressal of investors grievances.
6.0
GENERAL BODY MEETING

6.1
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
25.09.2003
Kamaraj Arangam,
10.00 am
One
492, Anna Salai,
Chennai-600 006
23.08.2004
-do03.00 pm
Nil
24.08.2005
-do03.00 pm
Nil
6.2
7.0
Postal Ballot Details

Postal ballot was not conducted in any of the General Meetings held so far in the Company.
DISCLOSURES
7.1 Disclosures on materially significant related party transactions that may have potential conflict
with the interest of the Company at large:
Necessary disclosures under the Accounting Standards 18 relating to the Related Party transactions
form part of the Accounts for the year 2005-2006.
7.2 Details of non-compliance by the Company, penalties, strictures imposed on the Company by
Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets,
during the last three years: Nil
7.3 Disclosure of Accounting treatment
In the preparation of financial statement for the year 2005-2006, the Company has not adopted
an accounting treatment which is different from that prescribed in the Accounting Standard,
in respect of any transaction.
19
7.4 Details of compliance with certain clauses of Revised Clause 49 of the Listing Agreement
7.4.1. Compliance of laws applicable to the Company:
As per Clause 49 I (C) (iii), the Board shall periodically review compliance reports of all
laws applicable to the company, prepared by the company, as well as steps taken by the
company to rectify instances of non-compliances.
Accordingly, a system has been developed and institutionalized to ensure compliance
with all laws applicable to the Company.
The Board will review the Compliance Report of all laws applicable to the Company
once a year.
7.4.2
Risk Assessment and Minimization Procedures:

As per Clause 49 IV (C), the Company shall lay down procedures to inform Board members
about the risk assessment and minimization procedures. These procedures shall be
periodically reviewed to ensure that executive management controls risk through means
of a properly defined framework.
Accordingly, a system has been developed and procedures have been laid down, on risk
assessment and minimization.
7.4.3. Internal Control Systems - CEO / CFO Certification

As per Clause 49 V, the CEO / CFO of the Company shall certify to the Board regarding the
effectiveness of the internal control systems for financial reporting.
The required certification from the Managing Director and Director (Finance) being the
CEO and CFO respectively was obtained and placed before the Board of Directors at the
243rd meeting held on 14.05.2006.
7.5
Certificate of compliance with the requirements of Clause 49 of the Listing Agreement

Clause 49 of the Listing Agreement requires every listed Company to obtain a certificate from either the
auditors of the Company or a Practicing Company Secretary regarding compliance of conditions of
Corporate Governance and annex the certificate with the Directors Report, which is sent annually to all
the shareholders. The Company has obtained a certificate to this effect from the Auditors of the Company
and the same is given as annexure to the Directors Report.
8.0
MEANS OF COMMUNICATION
8.1 The Board of Directors of the Company takes on record the Un-audited Financial Results in the
prescribed form within one month of the close of every quarter and announces the results to all the
Listed Stock Exchanges. The same are also published, within 48 hours in the following newspapers
normally: The Hindu, New Indian Express, The Economic Times, Financial Express, News Today
and Makkalkural (Tamil).
8.2 The Quarterly Results, Half yearly Results and the Annual Results are placed on the Companys
website at www.cpcl.co.in. Press Releases are given on important occasions. They are also
placed on Companys website.
8.3 Management Discussion and Analysis Report forms part of the Directors Report 2005-2006.
20

9.0
GENERAL SHAREHOLDER INFORMATION

1. 40th Annual General Meeting:Date & Time
: 25.08.2006; 3 PM
Venue
: Kamaraj Arangam, No.492, Anna Salai,

Chennai 600 006
2. Financial Calendar
: April March
3. Book Closure Date
: 18.08.2006 to 25.08.2006(both days inclusive)
4. Dividend despatch date
: Within 30 days from the date of declaration.
5. Listing on Stock Exchanges
: The Shares of the Company are listed on the Stock

Exchanges at Chennai, Mumbai and National Stock
Exchange of India Limited. The listing fees for the
year 2005-2006 have 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 dematerialised shares
: INE 178A 01016
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. 2005
244.95
208.00
219.55
252.00
215.00
219.35
May 2005
228.95
202.40
203.20
227.00
199.65
203.05
June 2005
209.40
180.25
183.20
209.00
182.15
186.30
July 2005
197.90
179.50
188.15
197.95
179.10
188.15
Aug. 2005
221.55
190.90
212.65
220.00
193.50
212.45
Sep. 2005
272.00
211.65
264.95
272.00
213.00
264.75
Oct. 2005
292.00
225.00
237.90
280.80
236.00
237.90
Nov. 2005
259.50
222.65
246.40
259.35
225.00
246.95
Dec. 2005
264.00
225.05
230.90
265.00
224.10
230.55
Jan. 2006
256.50
224.00
230.30
257.00
224.00
230.40
Feb. 2006
251.05
191.25
224.50
251.20
222.20
224.25
Mar. 2006
238.70
212.00
220.50
240.00
215.60
220.40
21
8. Performance of CPCLs Shares in comparison to BSE and NSE Index:

National Stock Exchange
Bombay Stock Exchange
Closing Price
(Rs.)
Index
Closing Price
(Rs.)
Index
Apr. 2005
219.55
1902.50
219.35
6154.44
May 2005
203.20
2087.55
203.05
6715.11
June 2005
183.20
2220.60
186.30
7193.85
July 2005
188.15
2312.30
188.15
7635.42
Aug. 2005
212.65
2384.65
212.45
7805.43
Sep. 2005
264.95
2601.40
264.75
8634.48
Oct. 2005
237.90
2370.95
237.90
7892.32
Nov. 2005
246.40
2652.25
246.95
8788.81
Dec. 2005
230.90
2836.55
230.55
9397.93
Jan. 2006
230.30
3001.10
230.40
9849.03
Feb. 2006
224.50
3074.70
224.25
10370.24
Mar. 2006
220.50
3402.55
220.40
11279.96
Month
9. Registrars and Share Transfer Agents:

(a)
Hyderabad Office:
M/s. Karvy Computershare Private Limited
No.46, Avenue 4, Street No.1, Banjara Hills, Hyderabad 500 034
Phone : 040 2342 0818 / 2342 08 28 Fax : 040 - 2342 0814
E-mail: mohsin@karvy.com, madhusudhan@karvy.com
(b)
Chennai Offices:
(i) No.33/1, Venkataraman Street, T.Nagar, Chennai 600 017
Phone : 2815 1793 & 2815 4781 Fax : 2815 1794
E-mail: nvvprasad@karvy.com
(ii) G-1, Swathy Court
22, Vijayaraghava Road, T. Nagar, Chennai 600 017.
Phone : 2815 3445 / 2815 1034 Fax : 2815 3181
E-mail: chennaiirc@karvy.com
10.0 SHARE TRANSFER SYSTEM

10.1 To expedite the share transfer process, the Board of Directors has constituted a committee consisting
of Mr.V.Srinivasan, General Manager (HR) & Company Secretary, Mr.M.Sankaranarayanan, Deputy
Secretary and Mr.P.Shankar, Assistant Secretary of the Company to approve share transfers, transmission
of shares, dematerialisation requests and rematerialisation requests.
22

10.2 The number of transfers approved and shares transferred from 01.04.2005 to 31.03.2006 are given below:
Sl.
No.
Particulars
Number of
Shares
Involved
Number of transfer deeds received
1915
209500
Transfer deeds processed
1361
137900
Defective transfer deeds sent to the proposed

554
71600
transferee for rectification of defects
10.3 The number of meetings held for approving the Share Transfers from 01.04.2005 to 31.03.2006 is 49.
10.4 The number of demat requests approved and shares dematted from 01.04.2005 to 31.03.2006 in
National Securities Depository Ltd. (NSDL) are given below:Sl.
No.
Particulars
Number of
Shares
Involved
Number of demat requests received
4384
545793
Number of demat requests processed
4127
511743
Number of demat requests rejected, for non-receipt of

physical share certificates within 30 days as per
the requirement of NSDL
257
34050
10.5 The number of meetings held for approving the demat requests through NSDL from 01.04.2005 to
31.03.2006 is 43.
10.6 The number of demat requests approved and shares dematted from 01.04.2005 to 31.03.2006 in
Central Depository Services (India) Ltd. (CDSL) are given below:
Sl.
No.
Particulars
Number of
Shares
Involved
1 Number of demat requests received
1085
120200
2 Number of demat requests processed
1005
111100
80
9100
3 Number of demat requests rejected, for non-receipt of physical

share certificates within 30 days as per the requirement of CDSL
10.7 The number of meetings held for approving the demat requests through CDSL from 01.04.2005 to
31.03.2006 is 35.
23
11.0 DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2006

Shareholding of
Shareholders
nominal value
Rs.
Number
% to Total
Upto 5000
53272
96.65
5001 - 10000
1076
1.95
10001 - 20000
417
0.76
20001 - 30000
115
0.21
30001 - 40000
48
0.09
40001 - 50000
40
0.07
50001 - 100000
61
0.11
100001 & above
86
0.16
TOTAL
55115
100.00
Share Amount
Rs.
60334940.00
8692590.00
6089650.00
2946870.00
1723020.00
1902080.00
4386840.00
1403356010.00
1489432000.00
% to Total
4.05
0.58
0.41
0.20
0.12
0.13
0.29
94.22
100.00
12.0 SHAREHOLDING PATTERN AS ON 31.03.2006

Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Categories
Indian Oil Corporation Ltd
Naftiran Intertrade Company Ltd
Foreign Institutional Investors
Mutual Funds and UTI
Banks, Financial Institutions/ Insurance Companies
NRIs / Overseas Corporate Bodies
Corporate Bodies
Public
Total
Number of
Shares
7,72,65,200
2,29,32,900
2,16,52,553
9,24,997
1,64,56,360
12,65,909
12,69,636
71,75,645
14,89,43,200
% of
Shareholding
51.88
15.40
14.54
0.62
11.05
0.85
0.85
4.81
100.00
13.0 DEMATERIALIZATION OF SHARES AND LIQUIDITY

The dematting facility exists with both the National Securities Depositories Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for the convenience of shareholders. As on 31.03.2006,
14,60,97,284 equity shares have been dematerialized, representing 98.09% 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.044-2594 4000]
Cauvery Basin Refinery, Panangudi Village,
Nagapattinam District, Tamilnadu, Pin: 611 002.
[Phone No.04365-256402]
16.0 ADDRESS FOR CORRESPONDENCE
Chennai Petroleum Corporation Limited, (Attn. Company Secretary)
No.536, Anna Salai, Teynampet, Chennai-600 018.
Phone: 044-24349542 Fax : 044- 2434 1753
Email: sld@cpcl.co.in
Companys Website Address: www.cpcl.co.in
24
Report to
Shareholders
Directors Report
26
Annexures to Directors Report
43
25
Directors Report
(Including Management Discussion and Analysis)
To the Shareholders of Chennai Petroleum Corporation Limited,

On behalf of the Board of Directors of your Company, I take immense pleasure in presenting to you the 40th
Annual Report, alongwith the Audited Statement of Accounts of the Company, for the Financial Year ended
March 31, 2006.
HIGHLIGHTS OF THE YEAR
Highest ever crude throughput of 10362 Thousand Metric Tonnes (TMT) against the previous best of 8923
TMT achieved in the year 2004-2005.
Overall Energy consumption for the year at 78.6 MBTU/BBL/NRGF as against 87.8 in the year 2004-2005.
Achieved capacity utilization of 102% in Manali Refinery.
Record production of Liquefied Petroleum Gas (LPG), Motor Spirit (MS), Aviation Turbine Fuel (ATF),
High Speed Diesel (HSD), Superior Kerosene Oil (SKO), Asphalt and Propylene at Manali Refinery.
Highest ever distillate yield of 78.5% in Cauvery Basin Refinery, as against previous best of 76.95%
achieved in the year 2004-2005.
Lowest ever Fuel & Loss (wt.% on crude) of 4.09%, achieved during the year in Cauvery Basin Refinery,
as against previous best of 4.22% achieved in the year 2004-2005.
Highest ever despatch of 175 TMT Naphtha during the year, against previous best of 165 TMT in Cauvery
Basin Refinery.
Supply of products to the southern regions of Tamilnadu being routed through the newly commissioned
Chennai-Tiruchi-Madurai Product Pipeline (CTMPL) of Indian Oil Corporation Limited.
The New Zero Discharge Plant commissioned in September 2005.
Awarded Greentech Environment Excellence Gold Award for outstanding achievement in Environment
Management in Petroleum sector for the year 2005.
Received the Highest Customs Duty Payer Award for Tamil Nadu Circle for the year 2004-2005.
MANAGEMENT DISCUSSION AND ANALYSIS

Industry Structure & Developments
The international oil markets continue to witness steep increase in oil prices. The volatility in the crude oil
price has its impact on Indian economy. India depends on Oil imports for 76% of its demand and meets over
50% of its gas needs through domestic production. Indias crude oil production in 2005-2006 decreased by
5.3% to 32.194 Million Tonnes from 33.98 Million Tonnes in the previous year; however, gas production increased
from 31.76 BCM in 2004-2005 to 32.2 BCM in 2005-2006, i.e., an increase of 1.4%. The fall in oil production
last year was mainly due to the mishap in Mumbai High Field, which is the single largest oil-producing field in
the country. Efforts are being made by the country to diversify sourcing of crude from new regions. India is coordinating with large oil importing countries in Asia for evolving an Asian products marker, in place of Asian
premiums, which would reduce the premium paid by the Asian countries and thus contain the countrys oil
import bill to some extent. The oil majors in India continue to strive in acquiring stakes in Exploration and
Production (E&P) ventures abroad in order to provide oil security and to dampen the volatility in the oil prices.
26

The refining companies are taking initiatives to increase their capacities and the quality of the products in
tune with the Auto Fuel Policy of the Government of India to meet the Euro-IV specifications by 2010.
Dr.Rangarajan Committee on Pricing & Taxation of petroleum products have submitted their report to the
Government of India and the report is being examined by the Government.
Opportunities and Threats
Crude oil prices remain a key element in determining the global economy prospects. The rise in oil prices
has a cascading effect on the global economy. Therefore, a greater emphasis needs to be given in the quest
for alternative fuels in the context of fast depleting fossil fuels, soaring oil prices and concern for environmental
protection and public health. The announcement of a Bio-diesel Policy by Government is a major step in
boosting initiatives in this direction. Natural gas is projected as an alternative to liquid fuel. Recent discoveries
of natural gas in the country has given a fillip in this direction. Further, Oil companies are also venturing
into gas business for undertaking LNG supplies to cater to the countrys requirements. Equity partnership in
LNG carriers is also being considered so as to have advantages in the landed price of LNG. The other
alternatives include Wind Power, small Hydropower, Biomass electricity and heat, solar thermal power, Ethanol
and Bio-Diesel. Further, considering the abundance of coal in India coal gasification may also be a likely
alternative. Another area of opportunity which the Industry can take advantage is the incentives available for
investments towards reducing carbon emissions in the form of Carbon Credits offered under the Kyoto
protocol and Clean Development Mechanism.
Besides the above, the specific challenges for the refining sector include integration with downstream petrochemicals
manufacture, tapping of the export market and adopting the emerging technologies to improve distillates production
coupled with its quality Upgradation, to make them environment-friendly and competitive in global market.
Risks, Concerns and Outlook
In recent times, the refining margins had been highly volatile. The margin all over the world came down
during the second half of 2005-06 due to the increase in crude oil price and without matching increase in the
product price. It is to be noted here that till the year 2004-2005, the refineries in India were realizing Refinery
Transfer Price without any under recovery, and the price was fixed on full import parity basis. During the year
2005-2006, the refining companies had to also share the burden of under recovery of oil marketing companies,
which had an impact on the bottom line of the refining companies. The higher prices of crude in the
international market and the lower realization of product prices had also its effect on the working capital
requirement of the Companies. This upswing in the crude oil price is a concern for the refining companies.
However, the refineries have to concentrate on improving the distillate yields, reducing energy consumption
and reducing the operating and other controllable costs to remain profitable and competitive. The refineries
need to plan suitable capital investments in this direction to improve the bottom line.
Your Company, in order to meet the above risks and concerns, is taking all necessary initiatives to improve
distillate yields, optimize crude baskets keeping in view the product pattern and demand on a monthly basis,
control energy consumption, reduce the operating cost and monitor the parameters on a weekly basis.
Internal Control Systems and their Adequacy
In commensurate with the size of your Company and the nature of its business, to ensure optimum utilization
and protection of resources and accurate reporting of financial transactions, requisite internal control systems
are in place. The organizational structure, with a well-defined authority limits and reporting mechanisms to
higher levels of management and to the Board, supports the maintenance of a strong control environment.
The performance of the Company is periodically monitored by the Board of Directors.
27
Your Companys full-fledged Internal Audit Department, consisting of resource personnel drawn from various
functions, monitors the operations of the Company through regular, extensive audits. Significant audit findings,
Internal Audit Reports and adequacy of Internal Control Mechanisms are periodically reviewed at various
levels like the Management Audit Committee and the Audit Committee of the Board.
PERFORMANCE AT A GLANCE
Physical Performance
CRUDE THRUPUT
(in Thousand Metric Tonnes) (TMT)
Imported
Indigenous
Total
PRODUCTION (in TMT)
Light Ends
Middle Distillates
Heavy Ends
Lube Base Stocks
Wax
Others (Intermediate)
Fuel & Loss
Total
2005-2006
2004-2005
8854.7
1507.0
10361.7
7117.3
1805.6
8922.9
2064.8
5010.5
2106.8
195.9
25.5
15.1
943.1
1620.2
4376.5
1853.2
245.1
24.8
-9.6
812.7
10361.7
8922.9
The salient features of operations during the year include the following:
Manali Refinery:
Highest ever crude processing of 9680 TMT in the first full year of operation after commissioning of the
3 MMTPA Expansion Project against the design capacity of 9500 TMT.
Capacity utilization of 102% achieved.
Secondary processing units, viz., Fluidised Catalytic Cracking Unit (FCCU) and Once Through Hydro
Cracker Unit (OHCU) recorded capacity utilization of 110% and 106% respectively.
Highest ever production of the following products:

(Figures in TMT)
Product
2005-2006
Previous Best (year)
LPG
382.5
238.6 (2004-2005)
Motor Spirit
754.5
582.8 (2004-2005)
Aviation Turbine Fuel
554.9
430.2 (2004-2005)
3244.1
2749.0 (2004-2005)
Superior Kerosene Oil
750.1
739.8 (2004-2005)
Asphalt
433.0
375.3 (2004-2005)
26.0
22.0 (2003-2004)
High Speed Diesel
Propylene
Highest ever number of Suez Max tankers (57 Nos.) utilized for import of crude oil as compared to the
previous best of 36 tankers in 2004-2005.
As a step towards maximization of low cost high sulphur crude processing, 69.0% of high sulphur crude
oil processed during the year.
28

Cauvery Basin Refinery:
682.0 TMT of crude processed, in spite of lower

availability of PY-3 crude.
Highest ever distillate yield of 78.5 % achieved

during the year 2005-2006.
Lowest ever Fuel & Loss (wt.% on crude) of 4.09%,

as compared to 4.22% in the previous year.
Highest ever despatch of 175 TMT Naphtha during

the year, against previous best of 165 TMT.
Financial Performance
Gross Turnover
Profit before Interest, Depreciation and Tax
Interest
Depreciation and Amortization
Profit before Tax
Provision for Taxation
- Current Tax (Net)
- Deferred Tax
- Fringe Benefit Tax
Profit after Tax
Value Added
2005-2006
2004-2005
25407.84
1133.24
174.03
235.84
723.37
16270.64
1299.67
156.66
209.38
933.63
(Rs. in crore)
percentage
increase
56.15
(-) 12.81
11.09
12.64
(-) 22.52
223.90
15.97
2.54
480.96
1606.46
132.19
204.47
596.97
1640.48
69.38
(-) 92.19
(-) 19.43
(-) 2.07
Though your Company registered an impressive

increase in the Turnover by about 56% during the
year 2005-2006, the profits were lower mainly due
to sharing of under recovery of oil marketing
companies, in respect of LPG/SKO/MS/HSD
amounting to Rs.439 crore. As a result, the Internal
Resources generated during the current year were
Rs.530.15 crore, compared to Rs.807.39 crore
during the previous year and the value addition
was at Rs.1606.46 crore during the current year as

against Rs.1640.48 crore during the previous year.
An amount of Rs.277.20 crore is proposed to be
carried to Reserves and Surplus, thus, totalling to
Rs.2132.53 crore as on 31.3.2006, as against
Rs.1855.33 crore as on 31.3.2005.
The book value per share of your Company has
increased from Rs.134.51 in the year 2004-2005 to
Rs.153.05 in the year 2005-2006.
29
During the year, the Company has repaid all outstanding Public Deposits, except the unclaimed deposits.
Your Company has not accepted any fresh public deposits.
Your Company has transferred to the Investor Education and Protection Fund the required amount as per
Section 205(C) (2) of the Companies Act, 1956, within the stipulated time.
DIVIDEND
Your Company declared interim dividend of 30% on the
paid up share capital of the Company for the financial
year 2005-06 in January 2006. Your Directors are also
pleased to recommend a final Dividend of 90% on the
paid-up share capital of the Company, for the year 20052006, making the aggregate dividend at 120%, which is
the same as declared last year. The total Dividend will
absorb a sum of Rs.203.77 crore, including dividend
distribution tax and the surcharge thereon.
MoU PERFORMANCE
Your Company performed commendably in various parameters covered under the Memorandum of
Understanding with the Holding Company, Indian Oil Corporation Limited, for the year 2005-2006. As per the
provisional assessment, the rating is Excellent.
MARKETING
Indian Oil Corporation Limited (IOCL), the holding
Company, continues to market the major products
produced by your Company.
CPCL directly markets Petroleum Specialty products like
Paraffin Wax, Sulphur, Modified Bitumen, Food Grade
Hexane, etc., to various retail customers and
petrochemical feedstocks to down stream units located
in and around Manali, viz., Naphtha to Madras Fertilizers
Limited, Linear Alkyl Benzene Feedstock (LABFS) to
Tamilnadu Petroproducts Limited, Propylene to Manali
Petrochemical Limited, Methyl Ethyl Ketone Feedstock
(MEKFS) to Cetex Petrochemicals Limited and Polybutene Feedstock (PBFS) to M/s.Primetra Technologies
Pvt. Ltd., (formerly known as Kothari Sugars & Chemicals Limited).
Among the products directly marketed, the sale of Sulphur achieved an all time high record of 40.6 TMT as
against 20.6 TMT in the previous year. The sale of Propylene peaked at 25.7 TMT as against 18 TMT in the
previous year. The sale of Poly Butene Feedstock (PBFS) registered an increase of about 22% from 4.5
TMT in the year 2004-2005 to 5.5 TMT in the year 2005-2006.
The direct customer base for speciality products has increased to a level of about 4600 during the year
2005-2006 from the level of 4480 in the previous year.
30

PROJECTS
Your Companys Xth Plan outlay is Rs.2400 crore. During the first four years of the 10th Plan (2002-2007), an
expenditure of Rs.2215 crore has been incurred. 100% expenditure on Plan schemes has been achieved for
the 4th consecutive year. As against the approved outlay of Rs.110 crore for the year 2005-2006, the actual
expenditure was Rs.110.55 crore.
Completed Projects
New Zero Discharge Project
A new Zero Discharge Project for treating the effluents from Refinery III and reusing the water was completed
at a cost of Rs. 11 crore in September 2005. This Project, apart from significantly contributing to the
protection of environment by effectively treating the effluents, helps in enhanced water availability position
for Manali refinery operations. The commissioning of this unit is yet another milestone in your Companys
success story of implementing environmental friendly infrastructure projects.
Replacement of existing two boilers with new 100 TPH Boiler
In order to enhance the reliability of steam and power availability for the uninterrupted operation of Manali
Refinery, the existing two boilers have been replaced during the year with a new 100 TPH Boiler at a cost of
Rs.24.81 crore.
Installation of Crude Storage Tank at Cauvery Basin Refinery
A Crude Storage Tank of 22000 KL capacity was commissioned in December 2005 at the Cauvery Basin
Refinery at a cost of Rs.6.64 crore.
On-going Projects
Additional 2.5 MGD Capacity Sewage Reclamation Plant
To augment the availability of water, an additional Sewage Reclamation Plant with a capacity of 2.5 MGD is
being put up. This Project, estimated to cost Rs.46.87 crore, is expected to be completed by September 2006.
Offsite Automation Project
A project on installation of Offsite Automation facilities for blending of components of Motor Spirit, Diesel and
Furnace Oil, and their quality monitoring, is under implementation at an estimated cost of Rs.26.77 crore.
This Project is expected to be completed by December 2006.
5.8 MGD Desalination Project
With a mission to achieve self-sufficiency in the water front, a project for installation of a 5.8 MGD Desalination
unit at an estimated cost of Rs.231.34 crore is under implementation. This Project is expected to go on
stream by June 2007.
With the commissioning of this unit, your Company would be able to meet its total water requirements
through in-house sources / facilities.
31
New Projects
Installation of 20 MW Gas Turbine
Yet another project that would further strengthen the Companys infrastructure is the project for the installation of a
20 MW Gas Turbine at an estimated cost of Rs.147.00 crore. This Project will enhance the reliability and quality
of captive power generation of Manali Refinery. The project is expected to be completed by November 2007.
Crude Oil Pipeline Project
A new 42" Crude Oil Pipeline as a replacement of the existing 30" ageing Crude Oil Pipeline is proposed to be
laid from Chennai Port to Manali Refinery along the route of the proposed Port Connectivity Road. The
estimated project cost is about Rs.65 crore. This new line will also facilitate faster unloading of crude oil from
tankers. The project is expected to be completed by December 2007.
Additional Crude Tanks
Two more Crude tanks are being added to the present strength to augment the crude storage capacity at
Manali, at an estimated cost of Rs.56.60 crore. These additional tanks are expected to be in place by May 2007.
Product Pipelines by Indian Oil Corporation Limited
Apart from the above growth-oriented initiatives undertaken by your Company, Indian Oil Corporation Limited
(IOCL) has also started work for constructing a dedicated ATF Pipeline from Manali Refinery to Chennai Airport.
IOCL is also constructing a Product Pipeline from Chennai to Bangalore. These projects by IOCL would
supplement IOCLs efforts for further improving the evacuation of products from Manali Refinery. IOCL has also
been constructing a White Oil pipeline from terminal to Jetty to improve the product movement at CBR.
DEVELOPMENT STRATEGIES
The competitive outlook of the Oil industry has been fast changing making it imperative for the various
players to keep revising their planned strategies and re-orient them to adapt to the changing scenario. Your
Company, too, undertook a review of its strategies in April 2006 taking into consideration the current and
futuristic challenges and identified several action plans. Important among them are:
(a)
Refinery Capacity Augmentation at Manali

Capacity augmentation through low cost unit revamps at Manali Refinery to increase its refining capacity
from 9.5 MMTPA to around 11.2 MMTPA is under finalization.
(b)
Resid Upgradation Project

To improve the distillate yield of Manali Refinery, Feasibility Study is being undertaken through Engineers India
Limited to set up Residue Upgradation facilities. The study is expected to be completed by August 2006.
(c)
Windmill Power Project

In order to promote clean energy and contribute to the global movement in reducing green house gas
emissions, your Company is planning to set up a Windmill Power Project of about 17 MW capacity to
meet the power requirements of its 5.8 MGD Desalination Plant.
(d)
Propylene Unit Expansion

The option of enhancing the Propylene production capacity at Manali Refinery and also to embark
upon the production of Polypropylene and other propylene derivatives is being examined.
32

Your Company has also taken up the following initiatives in order to supply Euro-IV MS and HSD to the
market by the scheduled date of 1st April 2010:
Capacity augmentation of existing Diesel Hydro De-sulphurisation plant and setting up a New Diesel
Hydro Treating unit to enable the Refinery to upgrade diesel quality to Euro-IV standard.
Capacity augmentation of the existing Catalytic Reformer Unit and setting up of a new Isomerisation
Unit for upgradation of MS quality to Euro-IV standard.
INDIAN ADDITIVES LIMITED

During the year 2005-2006, Indian Additives Limited (IAL), a joint venture of your Company with
M/s.Chevron Oronite Company LLC, manufacturing lubricant additives, achieved a turnover of Rs.146.72
crore, as compared to Rs.126.55 crore in the previous year. The Profit before Tax stood at Rs.5.04
crore (previous year Rs.5.39 crore) and the Profit after Tax was Rs.2.66 crore (previous year Rs.3.88
crore). The Board of Directors of IAL has recommended a Dividend of 5% on the paid-up capital for the
year 2005-2006.
INFORMATION TECHNOLOGY
Your Company keeps itself abreast of the advancements in the field of information technology so as to adopt
them to the extent required in its pursuit of achieving operational excellence.
A Lab Information Management System (LIMS) has been developed which enables the employees of Quality
Control department to automate the workflow related to test results of the products and chemicals and
transmit the information online to other departments over the intranet. Web based services have been introduced
in the Company in order to minimize the paper work and reduce the response time to process information.
A Leased Terminal Software has been successfully developed for lease operations of your Company at Mumbai
and this software is proposed to be implemented in other terminals at Bangalore and Hyderabad.
The Company has successfully implemented a web based and user-friendly Bill Monitoring System (BMS) with
an objective of monitoring the time taken by various departments to process the payment of bills payable to
the vendors / suppliers. Your Company has also successfully introduced Electronic Clearing Services for
effecting timely payments to its vendors and suppliers. Systems have been developed for displaying all the
public tenders of the Company in the website of National Informatics Centre (NIC) with a view to have a
wider participation by the Vendors/Suppliers.
RESEARCH AND DEVELOPMENT (R&D)
Your Companys in-house R&D Centre continued to cater to the requirements of the refinery operations
by undertaking crude assays including assays for new crudes, extractions and Pilot Plant evaluations of
various catalysts and feedstocks, and by providing analytical support to the process units. The R&D
Centre also developed process simulation model for hydrocracker unit. During December 2005, a Catalytic
Reformer Micro-Reactor Unit has been procured from M/s.Xytel and the same was installed and
commissioned.
The following long-term Research Projects in collaboration with dedicated National Laboratories have
also been undertaken by the R&D Centre:
33
Successfully completed the development of membrane process for separation of solvent from dewaxed oil filtrate, on small-scale test kits, in collaboration with Central Salt and Marine Chemicals
Research Institute (CSMCRI).
Completed a research programme on Desulphurisation of FCC Gasoline with minimum Octane loss,
in collaboration with Indian Institute of Petroleum (IIP), Dehradun.
Carried out studies jointly with Indian Institute of Petroleum (IIP), Dehradun on extraction of cycle oil
for production of superior quality Carbon Black Feedstock (CBFS).
Carried out studies on Bulk production of four different types of Polymer Modified Bitumen (PMB)
and completed the laying of test tracks in collaboration with IIP, Dehradun.
SAFETY MANAGEMENT
Your Company is committed to carry out all its core activities with primary focus on safety.
Based on the safety studies / audits / checks carried out by various external specialized agencies and
the recommendations provided by them, actions were initiated and most of them have also been
completed with an endeavour to ensure that the safety practices in the organization are of a high order.
Review of the Hazop study for DHDS unit was carried out through Central Leather Research Institute
(CLRI), Chennai and the recommendations were implemented. Similarly, all the recommendations of the
comprehensive risk assessment study undertaken for the entire refinery complex have been complied
with. National Safety Council, Tamilnadu Chapter conducted a statutory safety audit during March 2005
and the recommendations are under different stages of implementation.
Most of the recommendations of the Oil Industry Safety Directorate (OISD), arising out of the safety audit
and surprise checks, have been complied with. Actions are in progress on the remaining
recommendations.
Your Company has always focused on creating an awareness on safety among the employees, contractors
workers and the neighbourhood. An awareness programme on on-site emergency preparedness plan for
the Tiruvallur District Crisis Group and Manali-Ennore Local Crisis Group was organized during the year.
A Safety Handbook in the local language with illustrations was prepared and distributed to the contractors
workers to enable them understand and implement the safe work practices. The pamphlets containing
the safety instructions were updated and distributed to the visitors.
The on-site emergency preparedness plan was revised and mock-drills were conducted involving mutual
aid partners in association with the statutory authorities.
Your Company participated in the Off-site Mock Drills conducted during August 2005 by the neighbouring
Company M/s.Tamilnadu Petroproducts Limited, for ensuring off-site emergency preparedness of the
various agencies in the Manali industrial belt.
While continuing the best safety practices already in vogue, the following new practices were introduced
during the year:
A cash award scheme to encourage reporting of near-miss incidents was implemented. All reported
near-miss incidents are analysed and corrective actions are taken.
While working at heights, a separate work permit system is practiced. More emphasis is given on
usage of safety belts, safety nets and special devices on fall arresters with full body harness.
As on 31.3.2006, the Refinery has recorded 1.8 million man-hours without lost time accident.
34

CONCERN FOR ENVIRONMENT
Your Company has been certified to conform with all the requirements of Environment Management
System (EMS) - ISO 14001:2004, Quality Management System (QMS) ISO 9001:2000 and Occupational
Health and Safety Systems Series (OHSAS) 18001:1999. All the three systems are now integrated as
Quality, Environment, Health and Safety Systems (QEHS) and certified upto July 2007.
Commissioning of the new Zero Discharge Plant of 200 KL/Hr. for treating effluents from Refinery-III has
been a step forward in the Companys contribution towards environment protection and water
conservation. Other projects under implementation towards attaining higher standards in environment
include:
Pre commissioning of Thermal DeNOx in the major process heaters of expansion refinery for reducing
NOx emissions; and
A recycle plant to recover 50% of the RO rejects from the City Sewage Reclamation Plant and the
Zero Discharge Plant with an additional train of RO membranes leading to reclaiming 40 KL/Hr. of
water for process reuse.
The initiatives taken by your Company over the years in the areas of environmental conservation were
continued to be implemented, monitored and improved upon. The ambient air quality is being monitored
at eight locations inside the Manali Refinery. All the three Effluent Treatment Plants with a total capacity
of 550 KL/Hr. ensure treatment of effluents and recycling for process applications. The process of
liquidating the entire accumulated oily sludge by mechanical treatment followed by bio-remediation is
in progress.
In recognition of the initiatives taken by the Company in preserving the environment, your Company has
been awarded the Green-tech Gold Award for outstanding achievement in Environment Management in
Petroleum sector for the year 2004-2005 and the Ecology Leadership Award by the Rotary Club, Chennai
for the year 2005-2006.
ENERGY CONSERVATION MEASURES
Your Company has been constantly stepping up its efforts towards greater energy conservation. The emphasis
is on adopting and implementing energy efficient processes and installing energy saving devices.
The Fuel and Loss percentage of the Company for the year 2004-2005 was 9.1% and it remained the
same for the year 2005-2006 also. The Energy index of the Company stood at 78.6 MBTU/BBL/NRGF as
against the target of 79.9.
In a study by M/s.Shell Global Solutions Inc. for the Manali Refinery to identify the gaps in each area for
remedial action, seven out of eight critical energy performance indicators showed an improvement over
the previous year and the improvement is mainly attributed to capacity expansion of the Manali refinery
and maximum utilization of the process units.
In the Joint Energy Audit of Manali Refinery by M/s. Centre for High Technology (CHT) and M/s. Engineers
India Limited (EIL), many energy conservation initiatives have been identified and 22 of such initiatives
are already in various stages of implementation. All the initiatives will progressively get implemented in
the next four years.
The performance audit of all steam traps in the Refinery has been completed and source of energy loss
has been identified for corrective action. Each trap has been given a number and its inspection /
maintenance schedule has been drawn up.
35
OPTIMIZATION
The Refinery Business Optimization and Process Optimization continue to receive focused attention
during the year.
As a part of further improving the Refinery Business Optimization practices, the lube scheduling package,
with expert tool to predict the possible next grade changes in various plants of the lube refinery, was
developed.
Moreover, the LP Model was further improved to meet the true potential of the refinery.
Some of the highlights of Process Optimization activities during the year are:
Implementation of Distributed Control Systems (DCS) based control strategy for maximizing the
Propylene production.
Reconfiguration of existing DCS based advanced process controllers using robust novel level logic
in all the three crude units, for stabilizing the crude units and also the downstream units.
Implementation of DCS based Naphtha Hydro Treater (NHT) throughput controller to maintain the
CRU feed rate.
Several initiatives were undertaken to enhance the performance of Process Information Network System
interfacing 12 different Distributed Control Systems. Similarly, necessary steps were taken with a view to
enhance the Laboratory Information Management System (LIMS).
TOTAL PRODUCTIVE MAINTENANCE (TPM)
The ambitious TPM programme was kicked off for the entire organization during May 2005. Earlier, the
activities planned for the Manager Model Plant Propane De-asphalting Unit were completed during the
year. Significant achievements in the Manager Model Plant include improved productivity and quality,
cost reduction by reduction of losses and improvement in furnace efficiency, delivery on schedule and
improved safety.
The 5S practices, for organizing the work place, neat, clean & effective, were first implemented, in all the
areas of the Refinery.
One of the significant contributions of the TPM Programme is the achievement of ZERO LEAK in all the
plant areas. Autonomous Maintenance steps 0,1&2 and Kaizens were implemented and sustained.
A booklet on Overview of Total Productive Maintenance was circulated to all the employees and
Company-wide campaign on the need and benefits of TPM were conducted. The concepts of TPM were
clarified to the employees at all the work places to bring about a change in their mindset and also for
making them completely involved in the implementation of the programme.
HUMAN RESOURCES DEVELOPMENT
Your Company has always been of the firm view that the Human Resources is the most important asset
and strives continuously for its focused development.
The manpower strength of the Company as on 31.3.2006 was 1672 comprising of 672 Supervisors and
1000 Non-supervisors. The Company undertook a detailed manpower study with a view to have optimum
manpower in various Departments. The recommendations of the study are under implementation. A
Voluntary Retirement Scheme was introduced during the year and total number of 18 employees
comprising of 13 Supervisors and 5 Non-supervisors retired under the Scheme.
36

With a view to meet the manpower requirement of the organization, the Company recruited 28
Refinery Operators/Technicians and also 4 Engineers in various Departments. Under the
Apprenticeship Training requirement, 42 Diploma-holders and 33 ITI Trade Apprentices underwent
one year training programme in the Company.
The systems, procedures and policies relating to Human Resources Management were constantly
reviewed and modified, keeping in view the need for motivating the human resources better and
keeping up the morale of the employees.
A Settlement on Work Related Allowances was signed for the benefit of the Workmen during the year.
The Company continued to implement various welfare measures focusing on the improved welfare
of the employees and their family members.
The Industrial Relation was harmonious and cordial with the co-operation of all the employees.
Training and Development of the Human Resources remained to be the core thrust of the Human
Resources Management of the Company. This is demonstrated by the fact that the Company
achieved total training mandays of 6265 against 3504 mandays targeted in the MoU with IOC for
the year. The percentage of employees covered by the training programmes during the year stood
at 66, as against the MoU target of 60. The Training Calendar of the year was framed in such a
manner that employees could be exposed to multi skilled training, developmental training and
training in many other soft skills.
The Refinery Engineering School of Training (RESOT) played its pivotal role as a technical training
institution in the field of refining technology and operations, catering to the needs of not only
CPCL, but also to other refining companies. The 21 st batch of the Advanced Refinery Technology
Course (Core Course) was conducted by RESOT during the year with participation from Refinery
Engineers across the country. Plans are afoot to further equip this institution and enhance its stature
as a premier Technical Training Body in the petroleum and petrochemical sector.
The Suggestion Scheme of the Company, which has been framed to involve employees and enhance
their contribution in the innovative functioning of the Company, has been receiving overwhelming
response from the employees at all levels. During the calendar year 2005, 279 suggestions were
received and out of them, 88 were accepted and suitably awarded. The accepted suggestions
were also taken up for implementation.
One of the priority areas that received Companys attention was the welfare of the weaker section of the
community. The Presidential Directives for the welfare of Scheduled Castes (SC) and Scheduled Tribes
(ST) are being implemented and monitored on a regular basis. Out of the total manpower, your Company
had 418 SC Employees and 32 ST Employees as on 31.3.2006, constituting 26.91% of the total manpower.
A sum of Rs.25 lakh was allocated for various programmes for the welfare of the weaker sections of the
Community under the Special Component Plan and Tribal Sub-Plan.
The statistics relating to representation of SCs / STs / OBCs in the proforma prescribed by the
Government of India is placed as Annexure-I.
Your Company has been complying with the provisions of the Persons with Disabilities (Equal
Opportunities, Protection of Rights and Full Participation) Act, 1995, by extending reservation in
employment for Physically Challenged and Disabled persons.
37
WELFARE OF WOMEN
The number of women employees in your Company as on 31.3.2006 was 70, of whom, 18 are in the
Supervisory grade. The Company continued to interact with the forum of women employees and actions
were taken to address their needs. The women employees are continued to be trained on various
technical, development and functional programmes. On the occasion of the International Womens Day,
a Seminar on the theme Beyond Laws The Right to be me was organized, in which eminent women
professionals from various fields participated.
As per Government directives, a Gender Budgeting Cell has been constituted in the Company. This Cell has
been entrusted with the responsibility of identifying and implementing more schemes for the welfare of not
only the women employees of the Company, but also the welfare of the women in the Companys neighbourhood.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is proud to be a responsible corporate citizen, conscious of its commitment to the
community around its places of operations.
When the State of Tamilnadu was affected by heavy floods during the year, your Company contributed
Rs.One crore to the Tamilnadu Chief Ministers Public Relief Fund for providing relief and assistance to
the flood affected families.
The Company carried out various community development programmes throughout the year in the
villages around Manali Refinery and Cauvery Basin Refinery. Significant among such activities are:
Distribution of Scholarship amount to the meritorious and poor children studying in the Manali
neighbourhood educational institutions, including a large number of students from the weaker
sections of the Community;
Provision of computers to the needy schools;
Organizing medical camps, including a medical camp for the women labourers of the Contractors;
Providing training on tailoring to the women self help group members and donating all the
tailoring machines to these groups to enable them earn a livelihood through tailoring activities;
Provision of infrastructure facilities to the schools around by providing benches, construction of

toilets and such other facilities.
In the promotion of sports and games, your Company showed active interest. During the year, the 26th
Petroleum Sports Promotion Board (PSPB) Inter-Unit Athletic Meet was hosted by the Company at
Chennai, in which, 133 athletes from 10 member organizations participated. Also, your Company deputed
its employees to the various sports events organized by the PSPB in different locations of the country.
For the second year in succession, your Company sponsored the Chennai Open Tennis Tournament
organized by the Association of Tennis Professionals (ATP).
With a view to promote sports among the rural youth, a football tournament for the village football
teams and an Athletic event for the benefit of about 11 rural schools located in the Manali neighbourhood
were organized.
Your Company has an ambitious programme to fulfill its corporate social commitments in the
years to come.
38

GLOBAL COMPACT
Your Company, being a member of the Global Compact Programme initiated by the Secretary-General of
United Nations, is actively involved in adhering to the ten principles of the programme encompassing the
areas of Human rights, Labour, Environment and Anti-Corruption. Over hundred leading organizations from
India are presently participating in the Global Compact Programme.
Representatives from German Development Institute (GDI) visited your Company during March 2006 to study
the potential for strengthening Corporate Social and Environmental Responsibilities within the UN Global
Compact framework. The Team had detailed discussions with the Directors and Senior Executives on the
initiatives and activities of your Company in implementing the principles of Untied Nations Global Compact.
The Sewage Treatment Plant and Zero Discharge Projects of the Company have been recognized for Case
Studies by the United Nations Global Compact.
OCCUPATIONAL HEALTH SERVICES (OHS)
The Occupational Health Services (OHS) Centre of your Company, a pioneering effort in the Indian refinery
industry, dedicated itself for protecting the health of the employees, with more emphasis on occupational
diseases. The Centre continues to identify the health hazards at work place, measure them appropriately
and implement and monitor the control measures that are needed to protect and promote the health of the
employees.
The OHS Centre received accreditation from National Accreditation Board for Testing and Calibration
Laboratories (NABL) for its clinical laboratories set up at Manali Refinery for meeting both the technical
competence requirements and management system requirements that are necessary to consistently deliver
technically valid test results. It is a matter of pride that the Manali Refinery in the Oil Sector is the first to
receive this accreditation among the refineries in the country.
The Centre carried out continuous education programmes for the employees. The Centre rendered consultancy
services to other industries for the study of environmental health hazards and was involved in the training of
health professionals from other organizations.
INVESTOR RELATIONS
Your Company accords priority attention in redressing the grievances of the investors without any delay, as
a result of which, the number of complaints, at any point of time, is negligible. Your Company disseminated
all relevant information to the shareholders concerning the Company through its website which is periodically
updated.
As a pro-active measure in the interest of the Shareholders, individual intimations were sent to the shareholders,
who had not encashed the dividend warrants in time, calling upon them to claim such dividend, before the
unclaimed dividend amount is transferred to Investors Education and Protection Fund. The details of
shareholders who have not encashed the dividend warrants are also being displayed in the website of the
Company to remind and facilitate them to approach the Company.
The equity shares of your Company were continued to be listed in Madras Stock Exchange, Bombay Stock
Exchange, Mumbai and National Stock Exchange, Mumbai.
Individual intimations were sent to all the shareholders explaining the advantages of dematerialisation and
requesting them to dematerialize their shares for trading of CPCL shares in electronic form. Many shareholders
responded positively. 98.09% of the subscribed capital of the Company have been dematerialized so far.
39
VIGILANCE
Your Company recognizes the fact that a dynamic and vibrant organization should have a strong vigilance
machinery for promoting a culture of transparency and a good governance in the effective implementation of
its policies and procedures.
The Vigilance Department having oriented itself to such a role has taken many initiatives in this direction
during the year.
A checklist for award of contract, intended to serve as a ready reference while processing proposals for
awarding contracts, was prepared as a brochure and released during the year. The Vigilance Department
also facilitated release of the Works Procedure Manual as a part of their systems improvement initiative. The
Vigilance Manual was updated incorporating the new topics and also incorporating the revisions in the rules
and procedures. The contents of the manual have been displayed in the Intranet of the Company for effective
usage by the employees.
The Vigilance function continued to supplement the efforts of the organization in re-visiting the existing
systems and introducing new systems for further improving the various business practices.
The Company observed Vigilance Awareness Week with special emphasis on customer orientation.
OFFICIAL LANGUAGE IMPLEMENTATION
Your Company laid greater emphasis during the year for improved implementation of the Official Language
Policy and practices in the Company. The focus of attention was on imparting knowledge of Hindi to the
employees, who are less proficient in this language. With this in view, Hindi Classes were conducted in the
Company. 78 employees, who availed this facility, came out successfully in the examinations and also received
incentive under the scheme for promoting Hindi learning. Apart from the above, 13 employees received
Cash Incentive during the year for doing official work in Hindi.
An Orientation Programme on Official Languages Act and Rules was conducted for the Officers of the Company
to apprise them on the Official Language Policy and the responsibility of the officers to implement the same
in the organization.
The First Sub-committee of Parliament on Official Language visited your Company and reviewed the
implementation of Official Language Policy. Suggestions given by the Parliamentary Committee have been
taken up for implementation.
Hindi Week was celebrated in the Company, as a part of which, Hindi Workshops were held and competitions
in Hindi were organized.
STATUTORY INFORMATION
Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 Nil.
Statutory details of Energy Conservation and Technology Absorption, R&D activities and Foreign
Exchange Earnings and Outgo, as required under Section 217(1)(e) of the Companies Act, 1956 and
the rules prescribed thereunder, i.e., the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure-II).
Certificate received from the Auditors of the Company regarding compliance of conditions of Corporate
Governance, as required under Clause 49 of the Listing Agreement, is annexed and forms part of this
Report (Please see Annexure-III).
40

DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, as amended by the
Companies (Amendment) Act, 2000 with respect to Directors Responsibility Statement, it is hereby
confirmed:
i)
that, in the preparation of the annual accounts for the financial year ended 31st March 2006, the
applicable accounting standards have been followed and that there are no material departures
from the same;
ii)
that the Directors have selected such accounting policies and applied them consistently and
made judgements and estimates that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the profit of the
Company for the year under review;
iii)
that the Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of this Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities; and
iv)
that the Directors have prepared the annual accounts for the financial year ended 31st March
2006, on a going concern basis.
AUDITORS
The Comptroller and Auditor General of India has appointed M/s.Padmanabhan Prakash & Co., Chartered
Accountants, Chennai and M/s.B.Purushottam & Co., Chartered Accountants, Chennai, as Joint Statutory
Auditors of the Company for the financial year 2005-2006. The Board of Directors of the Company fixed
a remuneration of Rs.4.0 lakh (Rs.2.00 lakh to each of the Joint Statutory Auditors) in addition to the
out-of-pocket expenses, if any, and applicable service tax.
DIRECTORS
Consequent to the assumption of office as Director (Finance), Indian Oil Corporation Limited, the term
of Mr.S.V.Narasimhan as Managing Director of the Company ended on 30.6.2005.
Mr.R.Sankaran, Director (Technical) superannuated on 30.4.2006.
Prof.M.S.Ananth, Director, Indian Institute of Technology (IIT), Chennai was appointed as an Independent
Director effective 31.12.2005.
Mr.K.L.Kumar, Former Chairman and Managing Director, Kochi Refineries Limited (KRL), Kochi was
appointed as an Independent Director effective 31.12.2005.
41
Mr.K.K.Acharya, Executive Director (Operations), Gujarat Refinery, Indian Oil Corporation Limited was
appointed as Managing Director effective 20.01.2006.
Mr.Ravi Capoor, Director (R&A), Ministry of Petroleum and Natural Gas, Government of India was appointed
as a Director in the place of Mr.Prabh Das, Joint Secretary (R), Ministry of Petroleum and Natural Gas
effective 27.02.2006.
Mr.Pramod Nangia, Director (M), Ministry of Petroleum and Natural Gas, Government of India was
appointed as a Director on the Board of CPCL effective 27.02.2006.
Mr.Mansoor Rad, Financial Director, Naftiran Intertrade Company Ltd. was appointed as a Director
effective 09.05.2006 in the place of Mr.M.B.Samiei Khonsari.
Your Directors place on record their appreciation of the valuable contributions made by Mr.S.V.Narasimhan,
Mr.Prabh Das, Mr.R.Sankaran and Mr.M.B.Samiei Khonsari during their tenure.
ACKNOWLEDGEMENT
Your Directors would like to convey their gratitude to the Ministry of Petroleum & Natural Gas, Indian Oil
Corporation Limited, Petroleum Planning and Analysis Cell, Oil Industry Development Board, Oil Industry
Safety Directorate, Centre for High Technology, the other Ministries of Government of India, Government
of Tamilnadu, Comptroller & Auditor General of India, Central Vigilance Commission, National Iranian Oil
Company and its affiliate Naftiran Intertrade Company Limited and commercial banks for their valuable
guidance and support.
The Board of Directors place on record their sincere appreciation for the commitment and dedication of
the members of the CPCL family, which enabled the Company to excel in performance during
the year.
Your Directors thank all the shareholders for the confidence which they have reposed on the Companys
Board and Management and for their continued support.
For and on behalf of the Board of Directors

Date : 28.06.2006
S.BEHURIA
Place : New Delhi
Chairman
42
ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs and OBCs as on 01.01.2006

AND NUMBER OF APPOINTMENTS MADE DURING THE PRECEDING CALENDAR YEAR
GROUPS
No. of appointments made during the calender year 2005 (Jan-Dec 2005)
Representation of
SCs/STs/OBCs as on 01.01.2006
Tot.no. of
employees
STs
Total
SCs
STs
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Group A
456
117
14
23
Nil
Group B
224
41
13
12
Group C
820
196
12
186
Group D
154
61
Group D
(Excldg.
Sweepers)
Nil
Nil
Group D
(Sweepers)
Nil
1654
(1)
43
TOTAL
OBCs
By Deputation /
Absorption
By Promotion
Total
SCs
STs
Total
SCs
STs
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Nil
Nil
15 $
4@
Nil
Nil
Nil
Nil
32
Nil
Nil
Nil
55
17 #
Nil
Nil
Nil
Nil
57
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
415
32
279
14
102
26
Nil
@ includes 2 SC candidates promoted on Merit in Group A (Lowest rung)

# Includes 8 SC candidates promoted on Merit in Group C (within Grades)
$ applicable upto lowest rung of Group A
OBCs
SCs
By Dir.Recruitment
Annexure to Directors Report
ANNEXURE - I (SC/ST/OBC REPORT -I)
ANNEXURE - I (Contd.) (SC/ST/OBC REPORT - II)

ANNUAL STATEMENT SHOWING THE REPRESENTATION OF SCs/STs and OBCs IN VARIOUS GROUP A SERVICES AS ON 01.01.2006
AND NUMBER OF APPOINTMENTS MADE IN VARIOUS GRADES IN THE PRECEDING CALENDAR YEAR
Representation of
SCs/STs/OBCs as on
01.01.2006
Pay scale (in

Rupees)
Tot.no. of
employees
No. of appointments made during the calender year 2005 (Jan-Dec 2005)
By Dir.Recruitment
SCs
STs
OBCs
Total
SCs
STs
(2)
(3)
(4)
(5)
(6)
(7)
(8)
13750-18700
115
28
11
NIL
NIL
16000-20800
110
31
11
17500-22300
94
30
18500-23900
72
18
19000-24750
37
19500-25600
17
20500-26500
(1)
44
Total
By Promotion
Total
SCs
STs
Total
SCs
STs
(9)
(10)
(11)
(12)
(13)
(14)
(15)
NIL
NIL
15
4@
NIL
NIL
NIL
NIL
NIL
NIL
13
NIL
NIL
NIL
NIL
NIL
NIL
NIL
12
NIL
NIL
NIL
NIL
NIL
NIL
NIL
10
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
11
NIL
NIL
NIL
NIL
NIL
NIL
NIL
456
117
14
23
NIL
NIL
NIL
62
17
NIL
NIL
NIL
@ 2 SC candidates promoted on Merit in Group A (Lowest rung)
OBCs
By other methods

ANNEXURE - II
ANNEXURE TO DIRECTORS REPORT ON ENERGY CONSERVATION

FORM A
Form for disclosure of particulars with respect to Conservation of Energy
A
Power and Fuel Consumption
1.
Electricity
a) Purchased
Unit (in million KW Hr.)
Total Amount (Rs. in Crore)
(excluding demand and other charges)
Demand and other charges (Rs.in Crore)
Rate/Unit (average) (Rs./KWHr.)
(excluding demand and other charges)
b) Own generation
Through diesel generator
Through steam turbine/generator
Unit (in million KW Hr.)
Units per litre of fuel oil/gas
Fuel Cost/Unit (Rs.)
Current Year
2005-06
Previous Year
2004-05
1.520
0.56
1.917
0.76
6.69
3.66
7.91
3.99
Not applicable
357.567
3.24
4.18
347.919
3.23
3.04
2.
Coal
3.
Furnace Oil
Quantity (in thousand K.Litres)
Average rate (Rs./MT)
529.437
14308.59
452.660
10378.60
Others/Internal generation fuel gas

For Manali Refinery only
Gas Turbine
Quantity
Power (in million KW Hr.)
Fuel (in thousand MTs)
Total cost (Rs. in Crore)
Fuel cost/Unit (Rs.)
Fuel Gas (TMT) (including CBR)
292.274
105.460
251.84
8.62
104.912
237.290
92.991
179.35
7.56
103.527
4.
B.
Not applicable
Not applicable
Consumption Per Unit of Production

Electricity (KWHr/MT of crude)
Furnace oil (Kg/MT of Crude)
Coal
Other (specify)
FCCU Coke (Kg/MT of Crude)
Fuel Gas (Kg/MT of Crude)
62.86
48.52
Not applicable
3.40
10.12
45
Not applicable
58.38
48.17
Not applicable
3.61
11.60
ANNEXURE - II (Contd.)
FORM B
RESEARCH AND DEVELOPMENT (R&D) ACTIVITIES
1. Specific Areas in which R&D was carried out by the company.
Evaluation of Catalysts and Additives for FCC unit
Selection of Catalyst for Hydroprocessing units
A process for production of improved quality Carbon Black Feed Stock.
Process optimizations studies
Catalyst development for the production of Ultra Low Sulphur Diesel
2. Benefits derived as a result of the above R&D
As per Annexure
3. Future Plan of Action:
Adsorptive and Oxidative Desulphurisation of Diesel for production of Ultra low Sulfur Diesel
Stability studies on Bio Diesel blends
Isomerisation of light naphtha
Desulphurisation of Heavy Oils
Upgradation of Residual Oils
4. Expenditure on R&D:
2005 06
299.63
303.91
603.54
0.02
Capital
Recurring
Total
Total R&D Expenditure as % of Turnover
5.
(Rs. in lakhs)
2004 05
109.12
215.18
324.30
0.02
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation:
Pilot plant studies were carried out on commercial hydrocracker catalyst to develop a kinetic
model for hydrocracker unit.
Feasibility of co - processing heavy stock such as RCO with UCO in FCC unit was studied for
Residue Upgradation.
Extraction Studies on Heavy Cycle Oil from FCC unit was carried out, to produce Lighter Grade
Carbon Black Feed Stock.
Studies on Kinetics of Oxidative Desulphurisation of hindered sulphur compounds were conducted
to assess the process severity.
A three phase heterogeneous model was developed to correlate Pilot plant data and simulate the
performance of commercial Diesel Hydro Desulphurisation unit.
2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product
development, import substitution efforts:
R&D has provided technical services to refinery operations for optimization of process units and also
analytical inputs for process troubleshooting. New Catalysts / Additives were recommended for use in
commercial unit to improve the yields.
3. In case of imported technology (Imported during the last 5 years reckoned from the beginning of 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, reasons thereof : Not Applicable
46

Annexure to Form B
Benefits derived as a result of R&D activities:
Crude Assay:

Detailed assay of several new crudes such as Benchamas, Tantawan, Saharan blend processed in the
refinery helped in optimising the distillate yields.
Process Optimisation Studies:

Continuous monitoring of Hydrocracker feedstock quality helped in maintaining the activity of the catalyst.
Additional sources of feedstock for FCCU were evaluated.
Evaluation of FCC catalysts, ZSM-5 Additive and CO Promoter Additive were carried out for selecting
suitable catalyst system for the commercial unit.
A process for upgradation of FCC recycle oil to High BMCI Carbon Black Feed Stock was developed in
collaboration with IIP, Dehradun.
An Extractive Distillation process for separation of Cyclopentane from Narrow cut Naphtha was studied.
Studies were carried out on blending of biofuel (transesterified jatropha oil) upto 20% with typical Cauvery
Basin Refinery Diesel.
Hydroisomerisation of Heavy Diesel fraction was studied to reduce end point for meeting future Diesel
Specification.
Catalytic Reformer Micro Reactor unit was commissioned to carryout studies on optimizing the Reformer
unit operations.
Papers Presented:
1. Effect of Solvent on the production of Cyclopentane by Extractive Distillation Petroleum Science
and Technology, USA.
2.
Kinetics of Oxidative Desulfurisation of Sulphur compounds in Diesel Fuel National symposium on

Catalysis, Varanasi, Feb06.
3.
Reformulation of FCC gasoline through Selective HDS and Hydro Isomerisation Mexican Chemical
Engineering Congress 2006.
4.
Four lump kinetic model for the Simulation of Hydrocracking process Petroleum Science and
Technology, USA.
ANNEXURE II Contd.
Foreign Exchange earning and outgo:

1. Activities relating to exports: Initiatives taken to increase exports. Development of new export markets
for products and services and export plans:
During the year 2005-06, the Company exported 641 TMT of products to various countries like Singapore,
Bangladesh, etc. through IOC for a total value of Rs.1321.93 crore.
2.
Total foreign exchange used and earned:

(Rs. in Lakh)
a) Used
b) Earned
2005-06
2004-05
6029.98
4427.31
Nil
Nil
47
ANNEXURE - III
COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE
To
The Shareholders of
We have examined the compliance of conditions of Corporate Governance by Chennai Petroleum

Corporation Limited for the year ended March 31, 2006 as stipulated under Clause-49 of the Companys
Listing Agreement with the Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our
examination was limited to a review of the procedures and implementation thereof, adopted by the
Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an Audit
nor an expression of opinion on the Financial Statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we
certify that the Company has complied with the conditions of Corporate Governance, as stipulated in
the above mentioned Listing Agreement for the year ended March 31, 2006.
We state that no investor grievance is pending against the Company for a period exceeding one month
as per the certificate furnished by the Share Transfer Agent of the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company
nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
Chennai
May 17, 2006
for B. Purushottam & Co.,

B.S.Purshotham
Partner
Membership No.26785
48
for Padmanabhan Prakash & Co.,

E. Prakash
Partner
Membership No. 19388
Report of the Statutory
Auditors
Auditors Report
50
Annexure to the Auditors Report
51
49
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 Limited, as at
31st March 2006, the profit and loss account and also the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility of the companys management.
Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3.
As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the
Annexure-I, a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure-I referred to above, we report that:

(i)
We have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(ii)
In our opinion, proper books of accounts as required by law have been kept by the company so
far as appears from our examination of those books;
(iii)
The balance sheet, profit and loss account and cash flow statement dealt with by this report are
in agreement with the books of account;
(iv)
In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by
this report comply with the accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v)
On the basis of written representations received from the directors and taken on record by the
Board of Directors, we report that none of the directors is disqualified as on 31st March 2006 from
being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956;
(vi)
In our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India;
(a)
in the case of the balance sheet, of the state of affairs of the company as at
31st March 2006
(b)
in the case of the profit and loss account, of the profit for the year ended on that date; and
(c)
in the case of the cash flow statement, of the cash flows for the year ended on that date.
Kodaikanal
May 14, 2006
for B.Purushottam & Co.

B.S. Purshotham
Partner
Membership No: 26785
50
for Padmanabhan Prakash & Co.

E. Prakash
Partner
Membership No: 19388
Annexure to Auditors Report
ANNEXURE - I
Referred to in paragraph 3 of our report of even date

(i)
(ii)
(a)
The company has maintained proper records showing full particulars including quantitative
details and situation of fixed assets.
(b)
All the assets have not been physically verified by the management during the year but there is
a regular programme of verification which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets.
(c)
During the year, no substantial part of the fixed assets of the company were disposed off.
(a)
The inventory has been physically verified during the year by the management. In our opinion,
the frequency of verification is reasonable.
(b)
The procedures of physical verification of inventories followed by the management are reasonable
and adequate in relation to the size of the company and the nature of its business.
(c)
The company is maintaining proper records of inventory. The discrepancies noticed on verification
between the physical stocks and the book records have been appropriately dealt with in the
books of account.
(iii)
We are informed that there is no company, firm or party to be listed in the Register referred to in Section
301 of the Companies Act, 1956 and hence we have no comments to offer in respect of clauses 4
(iii) (a), 4 (iii) (b), 4 (iii) (c), 4 (iii) (d), 4 (iii) (e), 4 (iii) (f) and 4 (iii) (g) of the Companies (Auditors Report)
Order, 2003.
(iv)
In our opinion and according to the information and explanations given to us, there are adequate
internal control systems commensurate with the size of the company and the nature of its business
with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services.
During the course of our audit, we have not observed any continuing failure to correct major weaknesses
in internal control system.
(v)
We are informed that there is no company, firm or party to be listed in the Register referred to in
Section 301 of the Companies Act, 1956 and hence we have no comments to offer in respect of
clauses 4 (v) (a) and 4 (v) (b) of the Companies (Auditors Report) Order, 2003.
(vi)
In our opinion and according to the information and explanations given to us, the company has
complied with the provisions of section 58A and other relevant provisions of the Companies Act, 1956
with regard to the deposits accepted from the public. The company has not defaulted in repayment of
deposits and hence we have no comments to offer on the compliance with the provisions of Section
58 AA of the Companies Act, 1956, Company Law Board order, National Company Law Tribunal,
Reserve Bank of India, any Court and any other Tribunal.
(vii)
In our opinion, the company has an internal audit system commensurate with the size and nature of its
business.
(viii)
We have broadly reviewed the books of account maintained by the company pursuant to the Rules
made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records
have been made and maintained.
51
(ix)
(a)
The company is regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund, income tax, sales tax, wealth
tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to
it. We are informed that no employee of the company is covered by Employees State Insurance
Scheme.
(b)
The details of disputed dues of Income tax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty and Cess, which have not been deposited, are given in Annexure - II to our report.
(x)
The company does not have any accumulated losses as on 31st March 2006. The company has not
incurred cash losses during the financial year covered by our audit and in the immediately preceding
financial year.
(xi)
In our opinion and according to the information and explanations given to us, the company has not
defaulted in repayment of dues to a financial institution or banks.
(xii)
The company has not granted any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities and hence we have no comments to offer in respect of clause
4 (xii) of the Companies (Auditors Report) Order, 2003.
(xiii)
The company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of
clauses 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.
(xiv)
The company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
(xv)
In our opinion and according to the information and explanations given to us, the company has not
given any guarantees for loans taken by others from banks or financial institutions and hence we have
no comments to offer in respect of clause 4 (xv) of the Companies (Auditors Report) Order, 2003.
(xvi)
In our opinion, the term loans have been applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on an overall examination of the
balance sheet of the company, we report that no funds raised on short-term basis have been used for
long-term investment.
(xviii) The company has not issued shares during the year and hence we have no comments to offer in
respect of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003.
(xix)
The company has not issued any debentures during the year nor there is any outstanding as on 31st
March 2006 and hence we have no comments to offer in respect of clause 4 (xix) of the Companies
(Auditors Report) Order, 2003.
(xx)
The company has not raised money by public issues in the recent past and hence we have no comments
to offer in respect of clause 4 (xx) of the Companies (Auditors Report) Order, 2003.
(xxi)
According to the information and explanations given to us, no fraud on or by the company has been
noticed or reported during the course of our audit.
Kodaikanal
May 14, 2006
for B. Purushottam & Co.,

B.S.Purshotham
Partner
Membership No.26785
52
for Padmanabhan Prakash & Co.,

E. Prakash
Partner
ANNEXURE - II
Statement of Disputed Dues
Name of the Statute
Nature of
the dues
Amount Amount
Period to
(Rs. in paid under which the
Lakhs)
protest
amount
relates
Forum where the

dispute is pending
Tamil Nadu General Sales Tax Act
Sales Tax Dues
1092.50
1987-88 TN State Appellate Tribunal
Sales Tax Dues
1012.83
Central Sales Tax Act
Sales Tax Dues
28367.00
1992-93 Madras High Court
Sales Tax Dues
5.30
Central Sales Tax Act
Sales Tax Dues
164.57
Income Tax Act
Income Tax
Dues
76.15
A.Y1998-99 Commissioner of
Income Tax (Appeals)
Income Tax Act
Income Tax
Dues
1144.94
1144.94
A.Y 1999-00 Chief Commissioner of

Income Tax
Income Tax Act
Income Tax
Dues
22.39
A.Y. 2001-02 Income Tax Appellate Tribunal
Income Tax Act
Income Tax
75.40
75.40
A.Y. 2002-03 Commissioner of Income Tax
Dues
(Appeals)
Income Tax Act
Income Tax
Dues
4138.08
1767.46
A.Y. 2003-04 Commissioner of

Income Tax and Chief
Commissioner of
Income Tax
Central Excise Act
Excise Dues
1706.02
1706.02
Dec 1993 to Supreme Court

Dec 1999
Central Excise Act
Excise Dues
1580.78
1580.78
Jan 2000 to Central Excise and

Nov 2004 Service Tax Appellate
Tribunal
Central Excise Act
Excise Dues
131.96
131.96
July 2000 to Central Excise and

Nov 2004 Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
1012.59
862.59
Apr 2002 to Central Excise and

Oct 2004 Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
34.32
Aug 2000 to Central Excise and

Sep 2001 Service Tax
Appellate Tribunal
53
ANNEXURE - II (Contd.,)
Name of the Statute
Nature of
the dues
Amount Amount
Period to
(Rs. in paid under which the
Lakhs)
protest
amount
relates
Forum where the

dispute is pending
Central Excise Act
Excise Dues
46.00
Oct 2001 to Commissioner of

Feb 2003 Central
Excise (Appeals)
Central Excise Act
Excise Dues
56.62
Aug 2003 to Central Excise and

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

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

Feb 2005 Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
966.08
300.00
Aug 1999 to Commissioner of

Mar 2002 Central
Excise (Appeals)
Central Excise Act
Excise Dues
8.00
Jan 2004 to Commissioner of

Nov 2004 Central
Excise (Appeals)
Central Excise Act
Excise Dues
13.43
Nov 2002 to Commissioner of

Feb 2005 Central
Excise (Appeals)
Central Excise Act
Excise Dues
365.28
199.00
Sep 1996 to Commissioner of

May 2001 Central
Excise (Appeals)
Central Excise Act
Excise Dues
801.15
50.00
Mar 1994 to Central Excise and

Mar 2005 Service Tax
Appellate Tribunal
Central Excise Act
Excise Dues
585.94
54
Aug 2005 Commissioner of

and Sep 2005 Central
Excise (Appeals)
Financial
Information
Balance Sheet
56
Profit and Loss Account
57
Schedules to the Accounts
58
Review of Accounts and Comments of the

Comptroller and Auditor General of India
85
Financial Indicators
89
Production Performance
89
Funds Flow Statement
90
Value Added Statement
91
Ten Year Profile
92
55
Balance Sheet as at March 31, 2006

(Rs. in Lakhs)
March 31, 2006 March 31, 2005
Schedule
SOURCES OF FUNDS
1. Shareholders Funds
a) Capital
b) Reserves and Surplus
A
B
2. Loan Funds
a) Secured Loans
b) Unsecured Loans
C
D
3. Deferred Tax Liability (Net)

Total
APPLICATION OF FUNDS
1. Fixed Assets
a) Gross Block
b) Less: Depreciation and Amortisation
c) Net Block
d) Capital Goods, Work-in-Progress
2. Intangible Assets
a) Gross Block
b) Less: Amortisation
c) Net Block
E
F
E-I
3. Investments
4. Current Assets, Loans and Advances
a) Inventories
b) Sundry Debtors
c) Cash and Bank Balances
d) Other Current Assets - Interest accrued
on Investments/Bank Deposits
e) Loans and Advances
5. Less: Current Liabilities and Provisions
a) Current Liabilities
b) Provisions
Kodaikanal
May 14, 2006
228153.05
14900.46
185533.23
200433.69
274789.21
56679.00
559621.26
94268.91
145476.99
239745.90
55082.27
495261.86
322689.21
470804.58
138924.88
331879.70
4518.00
336397.70
4903.91
5979.52
505.99
5473.53
11552.99
2279.44
122517.46
152271.75
476249.25
160626.61
315622.64
7066.57
6011.16
1107.25
G
H
I
J
314909.62
118344.68
6062.80
45.46
241615.73
89117.01
970.11
3.65
21172.21
460534.77
28381.26
360087.76
L
L-I
221877.34
18384.39
240261.73
220273.04
202.11
185825.52
23239.01
209064.53
151023.23
87.96
559621.26
495261.86
6. Net Current Assets (4 - 5)

7. Miscellaneous Expenditure
L-II
(to the extent not written off or adjusted)
Total
8. Statement of Significant Accounting Policies
Q
9. Notes on Accounts
R
10. Other Schedules forming part of Accounts
S to X
11. Balance Sheet Abstract and Companys
General Business Profile
Y
12. Cash Flow Statement
Z
(K.K. Acharya)
Managing Director
14900.46
213252.59
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
GM (HR) & Company Secretary
As per our Report of even date
B. Purushottam & Co.,
Padmanabhan Prakash & Co.,
B.S.Purshotham
E. Prakash
Partner
Partner
Membership No.26785
56
Profit & Loss Account
for the year ended March 31, 2006

(Rs. in Lakhs)
March 31, 2006 March 31, 2005
Schedule
INCOME
1. Sale of Products (Gross)
Less: Excise Duty
Less: Commission and Discounts
Sale of Products (Net)
2. Companys use of own Products
3. Net claim from/(surrender to) Industry Pool Accounts
4. Increase/(Decrease) in Stock
M
5. Interest and other Income
N
Total Income
EXPENDITURE
1. Purchase of products for resale
2. Manufacturing, Admn., Selling & Other Expenses O
3. Duties other than Excise Duty on Sales
4. Depreciation and Amortisation
5. Interest Payments on :
a) Fixed period loans from Banks/
Financial Institutions/Others
b) Short Term Loans from banks
c) Public Deposits
d) Others
2546434.33
428041.90
2118392.43
5649.86
Income/(Expenses) pertaining to previous years (Net)
6.
7.
8.
9.
10.
Earning Per Share (Rupees) (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 Companys
General Business Profile
Y
11. Cash Flow Statement
Z
Kodaikanal
May 14, 2006
3308.48
1327225.32
7968.63
20938.04
833.16
17402.67
2085552.17
71503.63
(228.61)
72336.79
22500.64
(111.01)
PROFIT BEFORE DEFERRED AND FRINGE BENEFIT TAXES

Provision for Deferred Tax
Fringe Benefit Tax
PROFIT AFTER TAX
DISPOSABLE PROFIT
APPROPRIATIONS
Interim Dividend
Final Dividend (Proposed)
Dividend Distribution Tax on Interim Dividend
Dividend Distribution Tax on Final Dividend (Proposed)
General Reserve
(K.K. Acharya)
Managing Director
11186.24
2030437.25
2941.96
23584.05
9672.60
7427.31
0.00
302.76
Total Expenditure
PROFIT FOR THE YEAR
PROFIT BEFORE TAX
Provision for Tax (net)
- Current year
- Previous year
2112742.57
134.33
0.00
39996.23
4182.67
2157055.80
1627988.79
208228.03
1419760.76
924.91
1418835.85
2149.20
375.37
39740.36
7597.10
1468697.88
11550.47
3300.74
13.68
800.83
15665.72
1375106.19
93591.69
93363.08
22389.63
49947.16
1596.73
254.00
48096.43
48096.43
15715.73
(2496.13)
13219.60
80143.48
20446.67
0.00
59696.81
59696.81
4467.68
13403.03
626.59
1879.77
27719.36
48096.43
32.29
0.00
17870.71
0.00
2525.45
39300.65
59696.81
40.08
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
B.S.Purshotham
E. Prakash
Partner
Partner
Membership No.26785
57
Schedules
CAPITAL
Schedule A
(Rs. in Lakhs)
Note
March 31, 2006 March 31, 2005
Authorised
40,00,00,000 Equity Shares of Rs.10 each
Issued
17,00,00,000 Equity Shares of Rs.10 each
Subscribed, Called-up and Paid-up :
14,89,43,200 Equity Shares of Rs. 10 each
(2005: 14,89,43,200 Equity Shares of Rs.10 each)
Less: Calls in Arrears (Other than Directors)
Add: Forfeited Shares
Total
40000.00
40000.00
17000.00
17000.00
14894.32
14894.32
2.06
14892.26
8.20
2.06
14892.26
8.20
14900.46
14900.46
Note:
A. As per the Formation Agreement entered into between the promoters, an offer is to be made to the
Naftiran Intertrade Company Limited (NICO), an affiliate of National Iranian Oil Company (NIOC), in any
issue of the Capital in proportion to the shares held by them at the time of such issue to enable them to
maintain their shareholding at the existing percentage.
B. Includes 7,72,65,200 Equity Shares of Rs.10 each (51.88%) fully paid-up, held by Indian Oil Corporation,
the Holding Company.
C. 31,800 Equity Shares of Rs.10/- each are pending for forfeiture due to litigation pending in the Company
Law Board, New Delhi.
RESERVES AND SURPLUS
Schedule B
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. Share Premium Account

As per last account
Less : Calls in Arrears (Other than Directors)
25018.21
14.39
2. General Reserve
As per last account
Add : Transferred from Profit and Loss Account
25003.82
25018.21
14.39
25003.82
188248.77
213252.59
121228.76
39300.65
160529.41
185533.23
160529.41
27719.36
Total
58
SECURED LOANS
Schedule C
(Rs. in Lakhs)
Note
Loans and Advances from Banks

i) Working Capital Demand Loan
ii) Cash Credit
iii) Foreign Currency Loans
(USD 50 million; 2005: USD 20 million)
iv) Term Loans
(due for payment within one year
Rs.5000 lakhs; 2005:Rs.5000 lakhs)
(includes interest accrued and due
Rs.206.21 lakhs; 2005: Rs. 206.21 lakhs)
Total
March 31, 2006 March 31, 2005
A
A
50000.00
0.00
30000.00
312.70
22311.25
50206.21
8750.00
55206.21
122517.46
94268.91
B&C
Note:
A. Against hypothecation of inventories, book-debts, outstanding monies, receivables present and future
to the extent of Rs.120000 lakhs (2005: Rs.72500 lakhs).
B. Secured by first paripassu charge on the companys fixed assets at Manali Refinery with State Bank
of India.
C. Against hypothecation of all movable plant and machinery at Manali Refinery on a paripassu basis
with HDFC Bank along with State Bank of India.
UNSECURED LOANS
Schedule D
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. Short Term Loans and Advances

From Banks / Financial Institutions
i) In Rupee (Book Overdraft)
ii) Working Capital Demand Loan
iii) In Foreign Currency
(USD 70 million; 2005: USD 30 million)
2. Other Loans and Advances

From Others
Oil Industry Development Board
(due for payment within one year
Rs.16558.75 lakhs; 2005: Rs.12496.25 lakhs)
Total
59
129.75
29000.00
449.49
27500.00
31235.75
60365.50
13125.00
41074.49
91906.25
104402.50
152271.75
145476.99
FIXED ASSETS
Schedule E
(Rs.in Lakhs)
At Cost
Gross block
As at
01-Apr-05
Depreciation/
Amortisation
Additions Transfers Disposals

Transfer /
Gross Block Depreciation
during
from
during
Deductions /
as at
and
the year construction the year Adjustments / 31-Mar-2006 Amortisation
(Ref. Note
WIP
Reclassifor the year
No.A)
fications
(Ref. Note
(Ref. Note
No.B)
No.C)
Net Depreciated
Block
Total
As at
As at
Depreciation March 31, March 31,
and
2006
2005
Amortisation (Ref. Note
upto
No.D)
31-Mar-2006
Land
- Freehold
- Lease hold
3830.56
11.03
4.13
(38.81)
3798.65
3798.65
3830.56
768.79
27.00
795.79
7.90
50.77
745.02
725.93
Buildings, Roads etc.
12635.23
359.99
44.08
12951.14
281.97
3779.75
9171.39
9132.50
Plant and Machinery
60
449760.31
6353.59
1405.41
454708.49
22481.47
Transport Equipments
1763.27
86.17
4.66
1844.78
142.88
1030.85
813.93
870.88
Furniture and Fixtures
1090.25
150.61
65.20
1175.66
66.22
714.46
461.20
399.34
270.72
270.72
11.85
244.53
26.19
38.03
224.22
479.80
471.21
Railway Sidings
Drainage, Sewage and
Water Supply System
154582.03 300126.46 316411.25
685.45
18.57
704.02
9.98
Total
470804.58
7006.96
0.00
1523.48
(38.81)
476249.25
23002.27
160626.61 315622.64 331879.70
Previous Year
375992.81
95332.59
0.00
520.82
0.00
470804.58
20454.09
138924.88 331879.70 257073.25
Note:
A. Addition to fixed assets includes Rs.Nil on account of Foreign Exchange variation (2005 Rs.42.63 lakhs)
B. The cost of assets are net of MODIDT/AT / CENVAT, wherever applicable.
C. Depreciation for the year includes Rs.19.48 Lakhs (2005 Rs. Nil) pertaining to prior years.
D. Net Depreciated Block includes Rs.17.46 lakhs (2005 Rs. Nil) of assets retired from use and held for disposal.
INTANGIBLE ASSETS
Schedule E-I
(Rs.in Lakhs)
At Cost
Amortisation
Note
Gross block
As at
01-Apr-05
30.68
0.00
30.68
30.68
30.68
Technical Know-How,
Royalty and
License Fees
5948.84
31.64
5980.48
601.26
1107.25
4873.23
5442.85
Total
5979.52
31.64
0.00
0.00
0.00
6011.16
601.26
1107.25
4903.91
5473.53
917.07
5062.45
0.00
0.00
0.00
5979.52
483.95
505.99
5473.53
895.03
Right of Way
Previous Year
Additions Transfers Disposals Transfer / Gross Block Amortisation

during
from
during
Deductions /
as at
for the year
the year construction the year Adjustments / 31-Mar-2006
(Ref. Note
WIP
Reclassi(Ref. Note
No.A)
fications
No.B)
Net Depreciated
Block
61
Note:
A. No amortisation provided the right being perpetual in nature.
B. Addition to intangible assets includes Rs. Nil (2005 Rs.27.35 lakhs) on account of Foreign Exchange Variation.
Total
Amortisation
upto
31-Mar-2006
As at
As at
March 31, March 31,
2006
2005
CAPITAL WORK-IN-PROGRESS
Schedule F
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. Construction Work in progress

(including unallocated capital expenditure)
2. Advance for Capital Expenditure
3. Capital Stores
Less : Provision for Losses
6131.72
3338.31
934.85
116.39
0.00
0.00
1164.58
101.28
0.00
4. Construction period expenses pending allocation

Expenditure during the year
Less : Allocated to Assets/Work-in-Progress
during the year
0.00
3791.32
0.00
0.00
7066.57
Total
1063.30
CONSTRUCTION PERIOD EXPENSES (NET) DURING THE YEAR
3791.32
0.00
4518.00
Schedule F-I
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. Payments to and Provision for Employees
0.00
234.09
2. Power, Water and Fuel
0.00
203.54
3. Consumables
0.00
2.29
4. Companys use of own products (Net)
0.00
1929.94
5. Repairs & Maintenance
0.00
14.27
6. Rent
0.00
10.18
7. Travelling & Conveyance
0.00
21.03
8. Communication Expenses
0.00
0.95
9. Printing & Stationery
0.00
0.81
10. Other Expenses
0.00
0.95
11. Interest
0.00
1373.27
0.00
3791.32
0.00
3791.32
0.00
0.00
Less : Allocated to Assets/Work-in-Progress during the year

Total
62
INVESTMENTS
Schedule G
(Rs. in Lakhs)
Note
No. and
Particulars
of Shares/
Face value
per share
Rupees
March
31, 2006
March
31, 2005
Units
LONG TERM INVESTMENTS
UNQUOTED, AT COST
1) Non-Trade Investments
In Others
a) CPCL Industrial Cooperative
Service Society Ltd.
b) BioTech Consortium India Ltd
9000 Shares
fully paid
10
0.90
0.90
100000
Equity Shares
fully paid
10
10.00
10.00
9170.60
0.00
9181.50
10.90
c) 7% Oil Companies, GOI

Special Bond 2012
2) Trade Investments
In Joint Venture Companies
Indian Additives Ltd.
1183401
Equity Shares
fully paid
100
1183.40
1183.40
25000
Equity Shares
fully paid
10
2.50
2.50
1185.59
1082.64
2371.49
2268.54
11552.99
2279.44
In Others
a) National Aromatics and
Petrochemical Corporation Limited
b) Petroleum India International
Total
Note:
A. Consequent to decision taken to continue membership with Petroleum India International, Rs.1185.59
lakhs,comprising seed capital Rs. 5 lakhs and undistributed surplus Rs. 1180.59 lakhs, transferred from
Claims Recoverable (Schedule K - Loans & Advances).
63
INVENTORIES
Schedule H
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. In Hand
a) Stores, Spares etc.
Less : Provision for losses
12738.86
1805.51
b) Raw Materials
c) Finished Products
d) Stock in Process
2. In Transit
a) Stores and Spares
b) Raw Materials
c) Finished Products
Total
10933.35
105261.15
106715.28
23136.53
246046.31
10491.88
1749.50
8742.38
69836.67
80001.10
13736.53
172316.68
190.48
62690.37
5982.46
68863.31
314909.62
361.03
66837.61
2100.41
69299.05
241615.73
SUNDRY DEBTORS
Schedule I
(Rs. in Lakhs)
Note
1. Over Six Months

Unsecured, Considered Good
March 31, 2006 March 31, 2005
914.50
2353.45
2. Other Debts
B
117430.18
86763.56
Total
118344.68
89117.01
Note:
A. Includes due from Indian Oil Corporation Ltd., the holding company - Rs.881.28 lakhs (2005: Rs.Nil)
B. Includes due from Indian Oil Corporation Ltd., the holding company - Rs.96337.76 lakhs
(2005: Rs.61500.40 lakhs)
CASH AND BANK BALANCES
Schedule J
(Rs. in Lakhs)
Note
1. Cash Balances
a) Cash balances including imprest
b) Cheques in hand
March 31, 2006 March 31, 2005
2. Bank Balances with Scheduled Banks

a) Current Account
b) Deposit Account
4.23
0.00
1.75
67.37
6058.57
6062.80
597.12
303.87
900.99
970.11
1293.20
4765.37
Total
Note:
A. Includes 65 (2005: 38) Gold Medals valued at Rs.3.60 lakhs (2005: Rs.1.30 lakhs)
64
LOANS & ADVANCES
Schedule K
(Rs. in Lakhs)
Note
1. Advances recoverable in cash or in

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

2. Amount recoverable from Industry Pool Account (Net)
3. Claims recoverable
B
a) Unsecured, Considered Good
b) Unsecured, Considered Doubtful
Less: Provision for Doubtful Claims
4. Balance with Customs, Port Trust & Excise Authorities
5. Inter Corporate Deposits - With Holding Company
6. Advance Tax (Net)
7. Materials given on Loan
C
Less: Deposits received
March 31,2006 March 31, 2005
4890.51
2929.06
3.60
7823.17
3.60
9170.64
4149.34
3821.62
33.89
3855.51
33.89
3821.62
3318.28
3000.00
2551.88
0.00
5178.32
0.00
1863.77
18.60
18.60
0.00
2.17
1.30
330.97
286.36
21172.21
28381.26
1.01
1.26
2.82
3.60
60.64
1.26
1.48
3.60
4.30
13.85
1.21
0.00
18.28
1.30
3000.00
39500.00
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2.03
2.03
Note:
A. Includes :
1. Due from Directors
Maximum amount due during the year
2. Due from other Officers
Maximum amount due during the year
B. Includes due from Indian Oil Corporation Ltd., the holding company
C. Includes materials given on loan to Indian Oil Corporation Ltd.,
the holding company
D. Includes due from Indian Oil Corporation Ltd., the holding company
E. Disclosure requirements of SEBI under Clause 32 of the Listing agreement
1. Loans and advances in the nature of loans to parent company, IOC
Maximum amount outstanding during the year
2. Loans and advances in the nature of loans to associates
Maximum amount outstanding during the year
3. Loans and advances in the nature of loans where there is
(i) no repayment schedule or repayment beyond seven years or
(ii) no interest or interest below section 372 A of Companies Act
4. Loans and advances in the nature of loans to firms/companies in which
Directors are interested
65
0.00
4149.34
33.92
4183.26
33.92
8. Excess deposits given for materials taken on loan

- Unsecured, Considered Good
D
9. Sundry Deposits (including amounts adjustable
on receipt of Final bills)
Total
7819.57
5192.34
2866.91
0.87
8060.12
0.87
8059.25
CURRENT LIABILITIES
Schedule L
(Rs. in Lakhs)
Note
1. Sundry Creditors
a) Total dues of small scale industrial
undertaking(s)
b) Total dues of creditors other than small
scale industrial undertakings
21.47
200164.20
2. Other Liabilities
C
3. Investor Education and Protection Fund shall
be credited by
a) Unpaid Dividend
D
b) Unpaid Matured Deposits
c) Interest accrued on b) above
44.85
200185.67
19687.12
308.62
1.10
0.09
0.00
5.58
186.28
221877.34
302.35
185825.52
5.73
5.73
E
166468.53
166513.38
16965.35
198.72
3.19
0.14
202.05
1808.00
0.00
0.00
0.00
34.39
309.81
1502.88
4. Security Deposits
5. Materials taken on loan
Less: Deposits given
6. Excess deposits received for materials
given on loan
7. Interest accrued but not due on loans
Total
March 31,2006 March 31, 2005
Note:
A. Names of the Small Scale Undertakings to whom the company owes which is outstanding for more than
30 Days are given in Schedule R - Notes to Accounts.
B. Includes due to Indian Oil Corporation Ltd., the holding company - Rs.166027.76 lakhs (2005:
Rs.117603.68 lakhs)
C. Includes due to Indian Oil Corporation Ltd., the holding company - Rs.77.22 lakhs (2005: Rs.11.66 lakhs).
D. No amount is due as on March 31, 2006 to be transferred to Investor Education & Protection Fund.
E. Includes due to Indian Oil Corporation Ltd., the holding company - Rs.3.35 lakhs (2005: Rs.9.63 lakhs)
PROVISIONS
Schedule L-I
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
1. Provision for Taxation

Less: Advance Payments
62333.63
62333.63
0.00
Provision for Fringe Benefit Tax

Less: Advance Payments
254.00
235.76
18.24
13403.03
1879.77
3083.35
18384.39
2. Proposed Dividend
3. Dividend Distribution Tax
4. Provision for Retirement Benefits
Total
66
39944.00
39944.00
0.00
0.00
0.00
0.00
17870.71
2506.37
2861.93
23239.01
MISCELLANEOUS EXPENDITURE
Schedule L-II
(Rs. in Lakhs)
March 31,2006 March 31, 2005
Deferred Revenue Expenditure

Voluntary Retirement Compensation
As per last accounts
Add : Expenditure during the year
87.96
141.27
209.32
0.00
Less: Amortised during the year

Total
297.28
141.27
95.17
53.31
202.11
87.96
DETAILS OF INCREASE / (DECREASE) IN STOCK
Schedule M
(Rs. in Lakhs)
March 31,2006 March 31, 2005
Closing Stock
a) Finished products
112697.74
82101.51
b) Stock in process
23136.53
13736.53
135834.27
95838.04
Less:
Opening Stock
a) Finished products
82101.51
43920.42
b) Stock in process
13736.53
12177.26
Total
67
95838.04
56097.68
39996.23
39740.36
INTEREST AND OTHER INCOME
Schedule N
(Rs. in Lakhs)
Note
1. Interest on
a) Loans and Advances
March 31,2006 March 31, 2005

362.80
418.56
0.25
4.03
c) Short Term Deposits with Banks
154.97
42.39
d) Customer Outstandings
374.55
167.06
359.66
0.00
b) Fixed Deposits with Banks
e) 7% Oil Companies, GOI Special Bonds 2012
1252.23
632.04
88.76
0.01
3. Sale of Power
803.76
872.20
4. Profit on sale and disposal of assets
568.08
155.54
33.02
2172.79
156.09
230.42
433.35
637.68
0.00
1511.77
847.38
1384.65
4182.67
7597.10
2. Dividend
From Others
5. Unclaimed/Unspent Liabilities written back

6. Provision for Doubtful Debts, Advances,
Claims and Stores written back
7. Sale of scrap
8. Exchange Fluctuations (Net)
9. Other Miscellaneous Income
Total
Note:
A. Represents income on Long-Term, Non-Trade Investments
B. Represents income on Long-Term, Trade Investments
C. Includes income from Petroleum India International Rs.102.95 lakhs (2005: Rs.66.87 lakhs)
68
MANUFACTURING, ADMINISTRATION, SELLING AND OTHER EXPENSES
Schedule O
(Rs. in Lakhs)
Note
1. Raw Material Consumed
Opening Balance
Add : Receipts
Less: Closing Stock
March 31,2006 March 31, 2005

136674.28
56448.57
1995783.79
2132458.07
167951.52
1355391.85
1411840.42
136674.28
1275166.14
A
2. Consumption
a) Stores, Spares and Consumables
b) Packages and Drum Sheets
1964506.55
5379.34
53.77
6239.66
383.71
18523.03
3835.83
53.38
3889.21
97743.78
92214.68
5529.10
0.00
13651.73
7044.93
3755.64
476.27
6578.05
437.38
7491.70
2175.14
5433.11
3. Power, Water and Fuel
Less: Own Fuel
155064.27
148824.61
4. Processing Fees
5. Octroi, Other Levies and Irrecoverable Taxes
6. Repairs and Maintenance
i) Buildings
ii) Plant & Machinery
iii) Others
409.10
6094.78
541.05
7. Freight, Transportation charges and Demurrage

8. Payments to and Provisions for Employees
a) Salaries, wages, bonus etc.
b) Contribution to Provident and other Funds
c) Amortisation of Voluntary Retirement
Compensation
d) Staff Welfare Expenses
9. Office Administration, Selling and Other Expenses

(Schedule O - I)
Total
7208.14
1096.11
7094.46
836.91
95.17
1283.33
9682.75
53.31
1372.21
9356.89
14867.87
9965.41
2030437.25
1327225.32
Note:
A. Includes Rs.1760.08 lakhs (2005: Nil) in respect of customs duty for the previous years.
B. Includes towards previous years Rs.Nil (2005: Rs.514.73 lakhs) on account of removal of ceiling for the
payment of Performance Linked Incentive.
69
OFFICE ADMINISTRATION, SELLING AND OTHER EXPENSES
Schedule O -I
(Rs. in Lakhs)
March 31,2006 March 31, 2005
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Rent
Insurance
Rates & Taxes
Donations
Payment to Auditors :
a) Audit Fees
b) Other Services (for issuing certificates etc.)
c) Out of pocket expenses
2326.57
1766.79
121.21
102.43
1669.61
1893.02
134.05
260.35
8.32
1093.35
185.32
106.54
70.44
46.76
152.48
172.84
113.59
4.41
2.03
0.00
6.44
889.29
167.64
64.07
68.33
51.72
81.49
44.66
295.75
554.97
219.71
2833.99
1153.17
2704.65
1134.74
499.18
268.54
1181.17
1103.92
0.00
1286.18
14867.87
9965.41
4.49
2.63
1.20
Travelling and Conveyance

Communication Expenses
Printing and Stationery
Electricity and Water
Bank Charges
Bad Debts, Advances, Claims and Materials written off
Loss on Assets sold, lost or written off
Provision for Doubtful Debts, Advances, Claims
and Obsolescence of Stores
Security Force Expenses
Handling Expenses
Expenses of Enabling Facilities
Terminalling Charges
Exchange variation (Net)
Other Expenses
Total
INCOME/EXPENSES RELATING TO PRIOR YEARS
Schedule P
(Rs. in Lakhs)
March 31,2006 March 31, 2005
Income
1. Sales
2. Companys use of own Products
832.65
0.00
0.00
(236.60)
832.65
(236.60)
19.48
(65.80)
45.81
0.00
(15.87)
7.88
Total Expenses
(0.51)
(7.99)
Net Income / (Expenditure)
833.16
(228.61)
Total Income
Expenditure
1. Depreciation and Amortisation
2. Repairs and Maintenance
3. Interest
70
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1.
Schedule Q
BASIS OF PREPARATION
The financial statements are prepared under historical cost convention in accordance with the mandatory
accounting standards issued by The Institute of Chartered Accountants of India and the provisions of the
Companies Act, 1956.
2. FIXED ASSETS
2.1 Land
Land acquired on lease for over 99 years and on perpetual lease is treated as freehold land.
2.2 Capitalisation of construction period expenses
(a) Revenue expenses exclusively attributable to projects incurred during construction period are
capitalised.
(b) Financing cost incurred during the construction period on loans specifically borrowed and utilised
for projects is capitalised at the actual borrowing rates.
Financing cost, if any, incurred on general borrowings used for projects is capitalised at the weighted
average cost.
2.3 Depreciation / Amortisation
(a) Depreciation on fixed assets is provided in accordance with the rates as specified in Schedule XIV to
the Companies Act, 1956, on straight line method, upto 95% of the cost of the asset other than
Insurance Spares which are depreciated upto 100%. Depreciation is charged pro-rata on quarterly
basis on assets, from/upto the quarter of capitalisation/sale, disposal and dismantled during the
year.
(b) Assets costing not more than Rs.5000/- each are depreciated in full in the year of addition.
(c) Capital expenditure on assets, the ownership of which does not vest with the Company, incurred
during the construction period of the projects is accounted as unallocated capital expenditure and
is charged to revenue in the year of capitalisation of such projects.
(d) Cost of leasehold land (including premium) for 99 years or less is amortised during the lease period.
3.
IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/assets is reviewed for impairment. Impairment, if any, is recognised
where the carrying amount exceeds the recoverable amount.
4.
INTANGIBLE ASSETS
(a) Costs incurred on Technical know-how/licence fee relating to production processes are charged to
revenue in the year of incurrence.
(b) Costs incurred on technical know-how/licence fee relating to process design/plants/facilities are
accounted as Intangible Assets Pending Amortisation during the construction period of the said
plant/facility. At the time of capitalisation of the said plant/facility, such costs are also capitalised as
intangible asset and amortised on a straight line basis over a period of ten years or life of the said
plant/facility whichever is earlier, beginning from the quarter in which the said plant/facility is capitalised.
However, such costs which have been capitalised along with plant/facility prior to 1st April, 2003,
continue to form part of cost of the plant/facility.
71
(c) Expenditure incurred on Research and Development, other than on capital account, is charged to
revenue.
(d) Costs incurred on computer software purchased/developed on or after 1st April 2003, resulting in
future economic benefits, are capitalised as Intangible Asset and amortised over a period 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 stage of such software
are accounted as Intangible Assets Pending Amortisation.
(e) Cost of Right of Way for laying pipelines is capitalised and where Right of Way is of perpetual
nature, not amortised.
5.
INVESTMENTS
Long-term investments are carried at cost and provision for diminution in the value thereof, other than
temporary in nature, is accounted for. Current investments are carried at lower of cost or market value.
6.
CURRENT ASSETS, LOANS AND ADVANCES

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

(a) Transactions in foreign currency are recorded at exchange rates prevailing on the date of transactions.
(b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc)
outstanding at the year end, are translated at exchange rates applicable as of that date.
(c) Non-monetary items denominated in foreign currency (such as investments, fixed assets etc) are
valued at the exchange rate prevailing on the date of transaction.
(d) Any gains or losses arising due to exchange differences at the time of translation or settlement are
accounted for in the Profit & Loss account either under the head foreign exchange fluctuation or
interest cost, as the case may be, except those relating to acquisition of fixed assets.
72
(e) Exchange differences arising on liabilities incurred or on repayment of borrowings in foreign currency
for acquisition of fixed assets are accounted in the following manner:
i)
in respect of fixed assets acquired from a country outside India, exchange differences are adjusted
in the carrying cost.
ii) In respect of fixed assets acquired within India,

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

8.1 CONTINGENT LIABILITIES
(a) Show Cause Notices issued by various Government Authorities are not considered as Obligation.
(b) When the demand notices are raised against such show cause notices and are disputed by the
Corporation, then these are classified as disputed obligations.
(c) The treatment in respect of disputed obligations, in each case above Rs.5 lakhs, is as under:
i) A provision is recognized in respect of present obligations where the outflow of resources is
probable
ii) All other cases are disclosed as contingent liabilities unless the possibility of outflow of resources
is remote.
8.2 CAPITAL COMMITMENTS
Estimated amount of contracts remaining to be executed on capital accounts are disclosed in each
case above Rs.5 lakhs.
9.
PROFIT AND LOSS ACCOUNT

(a) Claims on Petroleum Planning and Analysis Cell (Formerly known as Oil Coordination Committee)/
Government arising on account of Administered Pricing Mechanism are booked on acceptance in
principle thereof. Such claims and provisions are booked on the basis of available instructions/
clarifications subject to final adjustment as per separate audit.
(b) Adjustments pertaining to purchase of raw materials/finished products, sales and others as admissible
under the erstwhile Administered Pricing Mechanism are accounted as net claim from / (surrender
to) Industry Pool Accounts.
(c) Other claims (including interest on outstanding) are accounted:
i) When there is certainty that the claims are realizable
ii) Generally at cost
(d) Prepaid Expenses upto Rs.50,000/- in each case is charged to revenue.
(e) Income and expenditure are disclosed as prior period items only when the value exceeds
Rs.5,00,000 /- in each case.
73
(f)
(i)
Superannuation Schemes
The liability towards Superannuation Schemes as at the year-end is ascertained on the basis of
actuarial valuation. The companys liability is restricted to the fixed premium paid towards the
Cash Accumulation Scheme maintained by LIC. Balance liability, if any, will be met by
contribution from employees.
(ii)
Gratuity Schemes
The liability towards gratuity as at the year-end is ascertained on the basis of actuarial valuation.
Premium paid towards the Cash Accumulation Scheme of LIC and the difference between
estimated liability and the corpus available in the Cash Accumulation Scheme are provided
for and charged off to revenue.
(iii) Leave Encashment

The liability towards leave encashment to employees as at the year-end is ascertained on the
basis of actuarial valuation and provided for.
(iv) Post retirement medical benefits
The liability towards post retirement medical benefits as at the year-end is ascertained on the
basis of actuarial valuation and provided for.
(g) Expenditure incurred on Voluntary Retirement Schemes is treated as Deferred Revenue Expenditure
and is amortised over a period of five years beginning from the year in which such expenditure is
incurred.
74
NOTES ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2006
1.
Schedule R
Contingent Liabilities
a) Claims against the Corporation not acknowledged as debts Rs.44,557.68 lakhs
(2005: Rs. 11,135.11 lakhs).
These include
i) Rs.5,333.16 lakhs (2005: Rs. 4,409.25 lakhs) being the demands raised by the Central Excise authorities.
ii) Rs.30,642.20 lakhs (2005: Rs.234.44 lakhs) in respect of Sales Tax demands.
iii) Rs.5,456.96 lakhs (2005: Rs. 3,364.69 lakhs) in respect of Income Tax demands.
iv) Rs.2,955 lakhs (2005: Rs. 2,955 lakhs) relating to projects.
b)
Interest/Penalty, if any, on the above claims is unascertainable.
c)
Estimated amount of contracts remaining to be executed on Capital Account and not provided for
Rs.39,052.91 lakhs (2005: Rs. 11,207.70 lakhs).
2.
Thirty nine acres and twenty seven cents of land has been taken on lease from a trust on a five-year renewable
lease for the construction of Employees Township at Cauvery Basin Refinery.
3.
Twenty five acres of land of the corporation is in the possession of IndianOil Tanking Ltd. under a lease agreement.
4.
The cost of land includes provisional payments towards cost, compensation and other accounts for which
detailed accounts are yet to be received from concerned authorities. The title of the land will pass on thereafter
to the corporation on completion of legal formalities.
5.
An extent of 1305.34 sq. mtrs. of land owned by the corporation together with buildings thereon has been
acquired by the National Highways Authority of India, under the National Highways Act, 1956 for construction of
grade separator at Kathipara Junction, Chennai for a compensation of Rs.588.67 lakhs against the book value
of Rs. 36.60 lakhs and the same has been accounted during the year accordingly.
6.
As per the terms of Memorandum of Settlement (MoS), approved by the Government of India for the withdrawal
by the Corporation from the Joint Venture AROCHEM, with SPIC Ltd, the amount due to the Corporation as on
31.03.2006 stood at Rs.1440.36 lakhs. As SPIC has expressed its keenness to implement its project and clear
the dues to the corporation, the corporation is confident of recovering the investment made in the project.
7.
The corporation, in the absence of suitable notification by the Central Government specifying the applicable rate
of cess under section 441A of the Companies Act, 1956 on turnover payable by the corporation, has not
provided for cess towards formation of Rehabilitation and Revival Fund.
8.
Sales for the year is net of discount of Rs.43,964 lakhs offered to Oil Marketing Companies.
9.
Impact on account of changes in Accounting Policies

i) Consequent to the change in the method of valuation of inventories of raw material from FIFO method to
weighted average method, the value of closing stock and the profit for the year is lower by Rs. 321.59
lakhs.
ii) Insurance spares hitherto, depreciated upto 95% of the cost of the asset is now depreciated upto 100% of
the cost of the asset over the life of the related asset. But for this change, the depreciation for the year
would have been lower by Rs.23.02 lakhs and profit higher by the like amount.
10.
The corporation operates in a single segment viz. downstream petroleum sector. As such reporting is done on
a single segment basis.
11.
In compliance of Accounting Standard 18 on Related Party Disclosures issued by the Institute of Chartered
Accountants of India, the required information is given as per Annexure 1 to this schedule.
12.
Disclosure as required under Accounting Standard 19 on Leases issued by the Institute of Chartered Accountants
of India is as under:
75
Operating Leases:
The corporation has taken on operating lease, Product Tankages from IOC/IBP on a renewal basis.
The lease rentals incurred for the current year amounting to Rs. 1,319.72 lakhs are included in Rent
(2005: Rs. 752.30 lakhs).
The lease rent payable for the next financial year is estimated to be Rs.1,307.53 lakhs and lease
rent for the five year period after the next year is estimated to be Rs.6,537.65 lakhs.
13. In compliance of 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 and
Diluted) are as under :
Profit After Tax (Rupees in lakhs)

Weighted Average number of equity shares
March 2006
March 2005
48096.43
59696.81
148943200
148943200
32.29
40.08
10
10
Earning Per Share (Basic and Diluted) (Rupees)

Face value per share (Rupees)
14. In compliance of Accounting Standard 22 on Accounting for Taxes on Income issued by Institute
of Chartered Accountants of India, Deferred Tax Liability for the financial period ended 31st March
2006 amounting to Rs.1,596.73 lakhs (2005: Rs.20,446.67 lakhs) has been provided.
The item-wise details of Deferred tax liability (net) are as under:
(Rs.in Lakhs)
As on
31.03.2006
As on
31.03.2005
59038.33
56680.27
i) Provision for Retirement Benefits
1037.92
963.33
ii) Provisions on inventories, debtors, loans and advances
1321.41
634.67
56679.00
55082.27
Deferred Tax Liability

Depreciation
Less: Deferred Tax Assets
Deferred Tax Liability (Net)
15. Disclosure as required under Accounting Standard 27 on Financial Reporting of Interests in

Joint Ventures issued by the Institute of Chartered Accountants of India is as under:
a)
Name of the Joint Venture
Indian Additives Ltd.
Proportion of ownership interest
50%
Country of Incorporation
India
76
Aggregate amount of interests in Joint Venture

(Rs. in Lakhs)
2005-06 #
3230.84
603.91
6630.05
6382.95
75.70
Corporations share of
Assets
Liabilities
Income
Expenditure
Contingent Liabilities
#
Unaudited figures
b)
2004-05
3351.25
894.54
5589.10
5320.12
88.15
Name of the Joint Venture
National Aromatics and

Petrochemicals Corporation Ltd.
Proportion of ownership interest
50%
Country of Incorporation
India
Aggregate amount of interests in Joint Venture is not given since the joint venture is not operational
(Also, refer Note No.6).
16. During the year, the Corporation has undertaken a review of all fixed assets in line with the requirements
of AS-28 on Impairment of Assets issued by the Institute of Chartered Accountants of India. Based on
such review, no provision for impairment is required to be recognised for the year.
17.
The names of Small Scale Undertakings to whom the Corporation owes any sum which is outstanding
for more than 30 days are given in Annexure II.
18.
Remuneration paid/payable to Directors:

(Rs. in Lakhs)
i)
ii)
iii)
iv)
v)
Salaries and Allowances

Contribution to Provident Fund
Contribution to Gratuity / Superannuation Fund, etc.
Other benefits and Perquisites
Sitting Fees to Part Time Directors
Total
2005-06
31.28
2.22
2.36
2.03
1.85
2004-05
22.01
2.20
3.49
9.45
0.75
39.74
37.90
19. The Profit and Loss Account includes

a) Expenditure on Public Relations and Publicity amounting to Rs.46.58 lakhs (2005: Rs. 108.12 lakhs).
The ratio of annual expenditure on Public Relations and Publicity to the annual turnover is 0.00220 : 1
(2005: 0.00761 : 1).
b)
Expenditure on Advertisement amounting to Rs.130.73 lakhs (2005: Rs.72.83 lakhs). The ratio of
annual expenditure on Advertisement to the annual turnover is 0.00619 : 1 (2005: 0.00512 : 1).
c)
Research and Development expenses Rs.303.91 lakhs (2005: Rs. 215.18 lakhs).
d)
Entertainment Expenses Rs. 24.41 lakhs (2005: Rs. 14.65 lakhs).
20. Previous years comparative figures have been regrouped and recast, wherever necessary, to the extent
practicable.
77
Annexure - I
Disclosure requirements under AS 18 as per Note No. 11
(Rs. in Lakhs)
Details of
Transactions
Payables (Trade)
Key Management
Personnel
31-Mar,06 31-Mar,05
Joint Ventures
Others
31-Mar,06 31-Mar,05
Total
31-Mar,06 31-Mar,05
31-Mar,06 31-Mar,05
Remuneration
35.86
27.70
--
35.86
27.70
Other Benefits/
Recoveries
2.03
9.45
--
2.03
9.45
88.76
88.76
Outstanding Loans/
advances receivables
1.01
1.26
1.01
1.26
Assets on Hire
3.25
2.94
3.25
2.94
Dividend Received
Key Management Personnel

Whole-time Directors
1) Shri K.K.Acharya From 20.01.2006
2) Shri S.V.Narasimhan Upto 30.06.2005
3) Shri R.Sankaran
4) Shri N.C.Sridharan
5) Shri.A. Kasturi Rangan
Joint Venture Companies
1) Indian Additives Limited
2) National Aromatics and Petrochemicals Corporation Ltd.
Annexure - II
Details for Note No. 17
EBY Industries, I.G.P. Engineers Private Limited, Tamilnadu Air Products, Paitandi Flurocarbons and
Seals, Godrich Gaskets Pvt Ltd, Econo Valves, Metal Forgings Pvt. Ltd., Newage Industries, Micro
Finish Valves, Teekay Tubes Pvt. Ltd., Basic Engineers & Traders, Dynamic Gaskets Private Ltd., Fix Fit
Fasteners Mfg. Pvt Ltd, Flash Forge P Limited, Floway Valves (P) Ltd., Geofluid Processors Pvt. Ltd.,
J.R. Mullick & Co P Ltd., Jasubhai Engineering Limited, Kineco Pvt Ltd., M/S.Gaskets India Private
Limited, Madras Industrial Products, Mechanical Packing Industries Pvt. Ltd., Sri Kannan Engg. Enterprises,
Thermal Instrument (India) Pvt. Limited, Usha Fire Safety Equipments Pvt. Ltd., V.J. Industries, Vircap
Sealingtech Private Limited, Baliga Lighting Equipments Pvt. Limited, Uniq Engineering Coroporation,
B.H. & Co., CD engineering company, Siddhartha lime chemicals, Drawcan Pvt. Ltd, FCG Flameproof
Control Gears Pvt. Ltd., D & H Secheron Electrodes Pvt. Ltd.
78
LICENSED CAPACITY, INSTALLED CAPACITY AND ACTUAL PRODUCTION
Schedule S
(Figures in Lakhs)
UNIT
Licensed Capacity
Installed Capacity
Actual Production
31 March,
31 March,
2006
2005
(Refer Note A)
31 March,
2006
31 March,
2005
31 March,
2006
31 March
2005
i) Crude Processing
MTs
70.00
70.00
105.00
105.00
103.62
89.23
ii) Propylene Recovery

Unit
MTs
0.17
0.17
0.17
0.17
0.26
(Refer Note B)
0.18
iii) Wax Plant
MTs
0.30
0.30
0.30
0.30
0.26
(Refer Note B)
0.25
Note :
A. Licence Capacity in respect of 3 MMTPA expansion at Manali Refinery has been applied for.
B. 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
Year ended 31.03.06
3.65
81696.44
0.37
11186.24
96.63
2536362.04
3.71
111949.96
Year ended 31.03.05
2.60
43015.65
0.17
3308.48
79.57
1618462.92
3.65
81696.44
Year ended 31.03.06
0.01
405.07
0.00
0.00
0.24
10218.87
0.02
747.78
Year ended 31.03.05
0.03
904.77
0.00
0.00
0.27
9525.87
0.01
405.07
Year ended 31.03.06
3.66
82101.51
0.37
11186.24
96.87
2546580.91
3.73
112697.74
Year ended 31.03.05
2.63
43920.42
0.17
3308.48
79.84
1627988.79
3.66
82101.51
1. PETROLEUM/
PETRO-CHEMICAL
PRODUCTS:
2. WAX
3. TOTAL
79
CONSUMPTION PARTICULARS OF RAW MATERIALS, STEEL COILS /

SHEETS/STORES/SPARE PARTS AND COMPONENTS
Imported
Schedule U
Indigenous
Value
% to total
Value
% to total
(Rs. In lakhs) Consumption (Rs. In lakhs) Consumption
31 March, 2006
Crude Oil and Gas
31 March 2005
Crude Oil and Gas
MTs
(in lakhs)
Rupees
(in lakhs)
84
310765.12
16
0.00
1964506.55
53.77
100
53.77
1599.28
17
7710.12
83
9309.40
1000297.19
78
274868.95
22
89.23
1275166.14
53.38
100
53.38
1521.72
18
6755.14
82
8276.86
Packing Materials
Consumed
Steel Coils/Sheets/
Stores/Component and
Spare Parts
Total
1653741.43
Packing Materials
Consumed
Steel Coils/Sheets/Stores/
Component and Spare Parts
Quantity
EXPENDITURE IN FOREIGN CURRENCY FOR ROYALTY, KNOW-HOW,

PROFESSIONAL & CONSULTATION FEES, DIVIDEND & OTHER MATTERS
Schedule V
(Rs. in Lakhs)
Note
March 31, 2006 March 31, 2005
1. Professional, Consultation Fees

and Technical Fees
2. Interest
3. Dividend (Net of taxes)
4. Others
Total
37.15
1890.09
2432.26
3458.15
1279.76
1153.38
102.42
104.08
6029.98
4427.31
Note:
A. Represents payment made to 451 Non-Resident Shareholders for the year 2004-05 holding 23054900
number of shares and 434 Non-Resident Shareholders for the year 2005-06 holding 23052200 number of
shares (2005: 516 Non-Resident Shareholders for the year 2003-04 holding 23067500 number of shares).
B. Expenditure in Foreign Currency has been considered on accrual basis.
80
EARNINGS IN FOREIGN CURRENCY
Schedule W
(Rs. in Lakhs)
March 31, 2006 March 31, 2005
Export of Petroleum Products

Total
0.00
0.00
0.00
0.00
CIF VALUE OF IMPORTS
Schedule X
(Rs. in Lakhs)
Note
1. Crude Oil
2. Capital Goods
3. Revenue Stores, Component, Spare
and Chemicals
Total
March 31, 2006 March 31,2005

1610001.66
281.10
983198.51
1588.85
1277.05
995.72
1611559.81
985783.08
Note :
A. Includes value of imports made through Indian Oil Corporation, canalising agent.
81
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE
Schedule Y
I. Registration Details
Registration No : 5389 1965
State Code : 18
Balance Sheet Date
31
Date
03
Month
2006
Year
II. Capital Raised during the Year (Amount in Rs. Lakhs)

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

Total Liabilities
Total Assets
799882.99
799882.99
Sources of Funds
Paid-Up
Capital
14900.46
Reserves &
Surplus
Secured Loans
Unsecured
Loans
Deferred
Tax Liability
213252.59
122517.46
152271.75
56679.00
Application of Funds
Net Fixed
Intangible
Assets
Assets
322689.21
4903.91
Investments
Net Current
Assets
Misc.
Expenditure
Accumulated
Losses
11552.99
220273.04
202.11
NIL
IV.Performance of Company (Amount in Rs. Lakhs)

Turnover
Total Expenditure
2112876.90
+ / - Profit/Loss Before Tax
Earning Per Share in Rs.
2084719.01
32.29
+ / - Profit/Loss After Tax
+ 72336.79
+ 48096.43
(Please tick Appropriate box + for profit - for Loss)
Dividend rate %
120
IV. Generic Names of Three Principle Products/Services of Company (as per monetary terms)
Item Code No.
(ITC Code)
Product Description
2710
HIGH SPEED DIESEL
2710
MOTOR SPIRIT
2710
FURNACE OIL
82
Cash Flow Statement for the year ended March 31, 2006
Year ended
March 31, 2006
Particulars
A. Cash Flow from Operating Activities
Profit Before Tax
Adjustments for
Depreciation
Deferred Revenue Expenditure Written Off
Income from Long Term Investment
Profit on Sale of Assets
Liabilities/Prov. for Claims written back
Advances, Claims and Material written off
Provision for Doubtful Claims and
obsolescence of stores
Loss on Sale of Assets
Interest on Borrowings
Interest income from short term investment
Schedule Z
(Rs. in Lakhs)
Year ended
March 31, 2005
72336.79
93363.08
23603.53
95.17
(551.37)
(568.08)
(189.11)
152.48
20938.04
53.31
(66.88)
(155.54)
(2403.21)
81.49
113.59
172.84
17448.48
(155.22)
295.75
44.66
15665.72
(46.42)
B. Operating Profit Before

Working Capital Changes
112459.10
127770.00
C. 1 Changes in Working Capital

(Excluding Cash & Bank Balances)
Trade and Other Receivables
Inventories
Trade and Other Payables
Change in Working Capital
(21378.73)
(73553.55)
36468.52
(58463.76)
(35185.80)
(121671.70)
83227.62
(73629.88)
(209.32)
0.00
53786.02
54140.12
(23077.64)
(235.76)
(14609.38)
0.00
C. 2 Deferred Revenue Expenditure Incurred

D. Cash generated from Operations
E. Adjustments for
Direct Taxes Paid
Fringe Benefit Paid
F. Net Cash Flow from Operating Activities
G. Cash Flow from Investing Activities
Purchase of Fixed Assets
Sale of Assets
Investments (Net) #
Interest Income
Income from long term investment
Net Cash used in Investment Received
30472.62
(9594.17)
618.08
(9273.55)
155.22
551.37
(18139.53)
182.93
0.00
46.42
66.88
(17543.05)
83
39530.74
(17843.30)
Particulars
Year ended
March 31, 2006
H. Net Cash Flow from Financing Activities

Proceeds from / (Repayments of)
Long Term Borrowings
Proceeds from / (Repayments of)
Short Term Borrowings
Interest Paid
Dividend Paid
Corporate Dividend Tax Paid
Net Cash Generated/(Used) from
Financing Activities
Schedule Z (Contd.,)
(Rs. in Lakhs)
Year ended
March 31, 2005
(17521.30)
(34155.90)
52564.61
(17518.74)
(22228.49)
(3132.96)
37175.54
(16574.06)
(7432.68)
(973.12)
(7836.88)
(21960.22)
I. Net change in Cash & Cash Equivalents (F+G+H)
5092.69
(272.78)
J. Cash and Cash Equivalents at the

end of Financial Year
6062.80
970.11
K. Cash and Cash Equivalents at the

beginning of Financial Year
970.11
1242.89
5092.69
(272.78)
Net Change in Cash and Cash equivalents (J-K)
# Dues recoverable from Industry Pool Account settled by issue of 7% Oil Bonds - Rs. 9170. 60 lakhs
Notes:
1. Cash and Cash Equivalents include
1. Cash Balances
a) Cash balances including imprest
b) Cheques in hand
4.23
0.00
2. Bank Balances with Scheduled Banks

a) Current Account
b) Deposit Account
1293.20
4765.37
Total
2.
4.23
1.75
67.37
6058.57
597.12
303.87
6062.80
69.12
900.99
970.11
The Previous years figures have been regrouped wherever necessary for uniformity in presentation.
(K.K. Acharya)
Managing Director
Kodaikanal
May 14, 2006
(N.C. Sridharan)
(V. Srinivasan)
Director (Finance)
B.S.Purshotham
E. Prakash
Partner
Partner
Membership No.26785
84
Review of Accounts of Chennai Petroleum Corporation Limited, Chennai for the year
ended 31st March, 2006 by the Comptroller and Auditor General of India.
Note : Review of Accounts has been prepared without taking into account the comments under Section 619
(4) of the Companies Act, 1956 and qualifications contained in the Statutory Auditors Report.
1. FINANCIAL POSITION
The table below summarises the financial position of the Company under broad headings for the last three years.
(Rs. in Lakhs)
2003-04
2004-05
2005-06
Nil
7726.52
7173.94
Nil
Nil
7726.52
7173.94
Nil
Nil
7726.52
7173.94
Nil
Reserves & Surplus

i)
Free Reserves & Surplus
ii)
Share Premium Account
iii) Capital Reserves
121228.76
25003.82
-
160529.41
25003.82
-
188248.77
25003.82
-
Borrowings
i)
From Govt. of India
ii)
From Financial Institutions
iii) Foreign Currency Loans
iv) Cash Credit
v)
Others
vi) Interest accrued and due
0.00
111898.75
26613.55
7278.97
90728.78
10.77
0.00
104402.50
21875.00
762.19
112500.00
206.21
0.00
91906.25
53547.00
129.75
129000.00
206.21
115599.30
380.97
208895.05
169.48
240086.34
175.39
34635.60
55082.27
56679.00
548279.73
704326.39
799882.99
376909.88
118941.60
257968.28
85400.24
1196.80
203573.14
141.27
476784.10
139430.87
337353.23
4518.00
2279.44
360087.76
87.96
482260.41
161733.86
320526.55
7066.57
11552.99
460534.77
202.11
548279.73
704326.39
799882.99
Liabilities
a) Paid-up Capital
i)
Government
ii)
a) Other Central Government PSUs
b) Others
Share Application money
b)
c)
d)
i)
ii)
e)
Current Liabilities and Provisions

(Excluding Provision for Gratuity)
Provision for Gratuity

Total
Assets
f)
g)
h)
i)
j)
k)
l)
m)
Gross Block
Less: Depreciation
Net Block
Capital Work in-progress
Investments
Current Assets, Loans and advances
Misc-expenditure not written off
Accumulated Losses
Total
85
2.
n)
Working Capital [k-d(i)-c(vi)]
87963.07
150986.50
220242.22
o)
Capital Employed [h+n]
345931.35
488339.73
540768.77
p)
q)
Net Worth [a+b(i)+b(ii)-l-m]

Net Worth per rupee of paid up capital (in Rs.)
160991.77
10.80
200345.73
13.45
227950.94
15.30
RATIO ANALYSIS
Some important financial ratios on the financial health and working of the Company at the end of last
3 years are as under:
(in Percentage)
A.
B.
C.
Liquidity Ratio
Current Ratio (Current Assets to Current Liabilities &
Provisions and interest accrued and due but excluding
provisions for gratuity) [k/{d(i)+c(vi)} x 100]
The ratio (expressed as a percentage) indicates the
coverage of current liabilities by the liquid assets
held by the company. The Current Liabilities
are fully covered by the Liquid Assets.
2003-04
2004-05
2005-06
176.09
172.21
191.66
113.33
111.00
19.11
46.60
13.37
31.73
Debt Equity Ratio

Long term debt to Equity
123.68
[c (i to v but excluding short term loans)/ p]
The decrease in the ratio in the current year is contributed by
repayment of borrowings during the year and increase in reserves
Profitability Ratios
a) Profit Before Tax to
i) Capital Employed
ii) Networth
16.54
35.55
The decrease in the ratio indicates decrease in the Rate of Return on shareholders funds.
b)
c)
d)
3.
iii) Sales
Profit after tax to networth
Profit after tax to equity capital
Earnings per share (in Rupees)
6.04
24.85
268.48
26.86
SOURCES AND UTILISATION OF FUNDS

SOURCES OF FUNDS:
1. Funds from operations:
Profit after Tax
Add: Depreciation
2.85
21.10
322.78
32.29
(Rs.in Lakhs)
2005-2006
48096.43
23603.53
71699.96
395.24
71304.72
0.00
Less: Profit on sale of assets (net)

2.
5.73
29.80
400.64
40.08
Increase in Share Capital
86
3.
4.
5.
6.
7.
Increase in Share Premium A/C.

Increase in Borrowed Funds
Sale Proceeds of fixed assets
Increase in Gratuity Provision
Increase in Deferred Tax Liability
Total
0.00
35043.31
618.19
5.91
1596.73
108568.85
UTILISATION OF FUNDS:
1. Increase in Fixed Assets
2. Increase in Capital Work-in-Progress
6999.79
2548.57
9548.36
24734.85
64897.94
114.15
9273.55
108568.85
3.
4.
5.
6.
Dividend paid (including Corporate Dividend Tax)

Increase in Working Capital *
Increase in Misc.Expenditure
Increase in Investments
Total
* After adjusting for provision for Gratuity , Dividend and Dividend Distribution Tax .
4. WORKING CAPITAL
The Working Capital (i.e.Current Assets less Current Liabilities) increased from Rs.87963.07 lakhs in 2003-04
to Rs.150986.50 Lakhs in 2004-05 and Rs.220242.22 Lakhs in 2005-06. As a percentage of sales, it decreased from 9.28 in 2003-04 to 9.27 in 2004-05 and 8.67 in 2005-06 thereby indicating decrease in the
turning over of working capital in 2004-05 and 2005-06 as compared to 2003-04.
5.
WORKING RESULTS
The working results of the Company in the last three years were as given below:
1.
2.
3.
4.
5.
6.
6.
Sales
Profit Before Tax
Profit After Tax
Intermediate Products
Closing Stock of Finished Goods
Value of Production
(Rs.in Lakhs)
2003-04
2004-05
2005-06
947596.49
57226.22
40004.62
12177.26
43920.42
953547.12
1629588.45
93363.08
59696.81
13736.53
82101.51
1669328.81
2540918.80
72336.79
48096.43
23136.53
112697.74
2580915.03
INVENTORY LEVELS
I.
The overall inventory increased in the year 2005-06 over 2004-05
and 2003-04 as shown below:
i.
ii.
iii.
iv.
II.
Raw Materials
(Crude in stock including in transit)
Stores & Spares
Intermediate products
Finished Products
Total
Value of finished products in term of number of

months of production.
(Rs.in Lakhs)
2003-04
2004-05
2005-06
56448.57
7767.08
12177.26
43920.42
120313.33
136674.28
9103.41
13736.53
82101.51
241615.73
167951.52
11123.83
23136.53
112697.74
314909.62
0.55
0.59
0.52
The value of finished products in terms of number of months production for the year 2005-06 has decreased
compared to 2004-05.
87
7. SUNDRY DEBTORS
(i) The following table indicates the volume of book debts and sales for the last three years.
(Rs.in Lakhs)
As on
31st March
Sundry Debtors
Considered good
Sundry Debtors
Considered Doubtful
Sales
Percentage of
Sundry debtors
to Sales
2004
52527.51
NIL
947596.49
5.54
2005
89117.01
NIL
1629588.45
5.47
2006
118344.68
NIL
2540918.80
4.66
Note: Previous years figures have been regrouped, wherever necessary
(U. SANKAR)
Principal Director of Commercial Audit &
Ex-Officio Member Audit Board, Chennai.
Date : June 21, 2006

Place : Chennai - 600 034
COMMENT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF
THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF CHENNAI PETROLEUM CORPORATION LIMITED,
CHENNAI FOR THE YEAR ENDED 31st MARCH 2006.
I have to state that the Comptroller and Auditor General of India has no comment upon or supplement to the
Auditors Report under Section 619(4) of the Companies Act, 1956 on the accounts of Chennai Petroleum
Corporation Limited, Chennai for the year ended 31st March 2006.
(U. SANKAR)
Principal Director of Commercial Audit &
Ex-Officio Member Audit Board, Chennai.
Date : June 21, 2006

Place : Chennai - 600 034
88
2001-2002
2002-2003 2003-2004
2004-2005
2005-2006
Debt Equity Ratio
1.22
1.53
1.47
1.20
1.21
Earnings per share (Rupees)
4.28
20.31
26.86
40.08
32.29
Cash Earnings per share (Rupees)
9.57
27.15
35.14
54.14
48.14
10.21
28.87
22.21
26.15
17.44
5.62
26.05
27.56
33.04
22.46
Networth per Equity Share (Rupees)
69.19
86.72
108.09
134.51
153.05
Dividend %
20.00
35.00
50.00
120.00
120.00
Dividend Payout %
46.77
17.22
18.61
29.94
37.16
Profit Before Interest & Tax to

Average Capital Employed (%)
Profit After Tax to Average Networth (%)
Production Performance
(Qty in `000 MT)
Year
Crude
Net Gas
Intake
Light
Middle
Distillates Distillates
Lube Base
Stock
Heavy
Ends
Wax
Others
Fuel &
Loss
2001-2002
6688.8
15.7
1330.8
3239.9
177.1
1463.0
20.7
-43.1
516.1
2002-2003
6819.4
20.2
1382.4
3170.7
252.0
1466.0
21.6
10.6
536.2
2003-2004
*7039.9
25.3
1438.0
3390.1
232.9
1389.3
27.2
22.4
565.4
2004-2005
8922.9
28.8
1620.2
4376.6
245.1
1853.2
24.8
-9.6
812.7
2005-2006
10361.7
20.6
2064.8
5010.5
195.9
2106.8
25.5
15.1
943.1
Production figures includes 108 TMT of crude processed in New 3 MMTPA Crude unit on trial basis.
89
Funds Flow Statement
(Rs. in Lakhs)
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
3391.12
8007.50
24405.49
10201.93
31604.45
12339.85
39300.65
20938.04
27719.36
23603.53
572.62
1798.48
1910.65
2410.57
53.31
7311.60
53.31
20446.67
95.17
1596.73
13769.72
38928.64
51309.21
80738.67
53014.79
0.28
0.48
0.55
0.00
0.00
23500.00
23500.28
87500.00
87500.48
135000.00
135000.55
0.00
0.00
0.00
0.00
Total-Sources
37270.00
126429.12
186309.76
80738.67
53014.79
Uses of Funds
Investments
Increase in Fixed Assets
Repayment of Loans (Net)
Increase in Net Current Assets *
1258.69
44182.83
12952.61
(22194.49)
1070.36
(764.56)
104945.15
15726.05
6349.19
173.29
(1200.37)
95959.03
96036.23
(4485.13)
0.00
1082.64
19440.75
(3290.24)
63505.52
0.00
9273.55
9325.42
(35043.31)
69249.81
209.32
37270.00
126429.12
186309.76
80738.67
53014.79
a) Current Assets
1. Interest accrued on Investments
0.46
2. Inventories
(10075.26)
3. Sundry Debtors
12642.38
4. Cash and Bank Balances
7846.73
5. Loans and Advances
(25337.82)
(9.48)
44602.96
24812.83
(15683.17)
(312.27)
6.10
5.52
(8463.94)
341.61
605.62
(12.86)
121302.40
36589.50
(272.78)
(1091.64)
41.81
73293.89
29227.67
5092.69
(7209.05)
(14923.51)
53410.87
(7505.09)
156514.62
100447.01
7270.98
7270.98
47061.68
47061.68
(3019.96)
(3019.96)
93009.10
93009.10
31197.20
31197.20
(22194.49)
6349.19
(4485.13)
63505.52
69249.81
Sources of Funds
1. Internal Resources
Retained Earnings
Depreciation
Written Off
2. External Resources
Share Capital including Share
Premium
Long term Borrowing from
Govt./ Others
Total-Uses
*
Changes in Working Capital
b) Less:Current Liabilities and

Provisions
c) Working Capital (a-b)
90
Value Added Statement

(Rs. in lakhs)
2001-2002
2002-2003
2003-2004
Value of Production
629644.97
880698.84
953547.12 1669328.81 2580915.03
Less: Cost of Direct Materials
585988.70
788124.08
848284.92 1505280.25 2420268.60
43656.27
92574.76
105262.20
164048.56
160646.43
2881.92
2867.94
1162.51
632.04
1252.23
Miscellaneous Receipts
775.47
523.70
1161.41
5937.32
1558.60
Profit on Sale of Assets
287.55
26.64
37.68
155.54
568.08
47601.21
95993.04
107623.80
170773.46
164025.34
Operating Expenses
17429.68
24419.36
33918.61
40753.31
50606.66
Interest
12808.54
10665.18
4679.76
15665.72
17402.67
7901.86
10201.93
11745.90
20938.04
23584.05
572.62
1910.65
53.31
53.31
95.17
Income Tax (including

Deferred Tax and FBT)
2517.32
18507.10
17221.60
33666.27
24240.36
Dividend
2980.07
5215.14
7446.13
17870.71
17870.71
0.00
668.19
954.04
2525.45
2506.36
3391.12
24405.49
31604.45
39300.65
27719.36
47601.21
95993.04
107623.80
170773.46
164025.34
Value Added
Interest income
2004-2005
2005-2006
Applied Towards
Depreciation
Dividend Distribution Tax

Retained Earnings
91
A Ten Year Profile

1996-97
1997-98
1998-99
1999-2000
2000-01
14361
65012
79373
93702
173075
14710
76381
91091
91405
182496
14710
91576
106286
92888
199174
14710
100456
115166
100585
215751
14900
108511
123411
115246
238657
Intangible Assets (including WIP)

Less: Amortisation
Investments
Working Capital
Total
149267
54147
95120
1749
76206
173075
157472
62313
95159
18149
69188
182496
192827
70187
122640
1720
74814
199174
204737
78334
126403
1798
87550
215751
217335
88543
128792
1903
107962
238657
Income
Sales
Interest
Inventory Difference
Adjustment - Prior Years
Total
249511
1380
529
7466
-42
258844
272008
6249
1904
-3894
109
276376
374739
6871
3056
644
-22
385288
551429
2872
1004
15516
-50
570771
713262
3929
883
-5222
951
713803
Expenditure
Raw Materials
Manufacturing Expenses
Salaries & Benefits to Employees
Administration Expenses
Interest
Depreciation
Total
200780
18203
2885
4221
13170
7850
247109
213014
17109
4613
4921
14187
8085
261929
308491
18671
5272
6188
11201
7900
357723
498770
22180
7451
6508
8598
8096
551603
630676
27024
9473
8538
13146
10203
699060
Profit Before Tax

11735
1517
14447
1519
27565
7071
19168
4854
14743
2500
Profit After Tax

Dividend
10218
3587
359
12928
3970
397
20494
5149
515
14314
4413
1022
12243
3705
378
1.18
7.11
13.43
25
38.62
1.00
8.78
15.17
27.50
33.78
0.87
13.92
20.77
35
27.89
0.87
9.72
12.93
30
37.61
0.93
8.21
10.26
25
33.35
What We Owe
Share Capital
Reserves *
Networth
Borrowings
Total
What We Own
Fixed Assets (including Capital WIP)
Less: Depreciation
Debt/Equity
Earnings per share (Rs)
Dividend (%)
Dividend Payout (%) (including Dividend
Distribution Tax)
* After adjusting Miscellaneous Expenditure
92
(Rs. in Lakhs)
2001-02
2002-03
2003-04
2004-05
2005-06
14900
88290
103190
125793
24913
253896
14900
114433
129333
197567
27324
354224
14900
146091
160991
236531
34636
432158
14900
185445
200345
239746
55082
495173
14900
213051
227951
274789
56679
559419
261526
96520
165006
366441
106692
259749
3161
85729
253896
2397
92078
354224
458312
118920
339392
3998
22
3976
1197
87593
432158
475323
138925
336398
5980
506
5474
2279
151023
495173
483316
160627
322689
6011
1107
4904
11553
220273
559419
627309
2882
1966
2336
-22
634471
862995
2868
1171
17704
-243
884495
947597
1163
1878
5951
-780
955809
1629588
632
6965
39740
-229
1676697
2540918
1252
2931
39996
833
2585930
559807
31089
6566
7410
12809
7902
625583
725030
68799
8654
12349
10665
10202
835699
768606
87998
10031
15522
4680
11746
898583
1280537
233487
9357
23349
15666
20938
1583334
1978415
449922
9683
34587
17403
23584
2513594
Profit Before Tax

8888
2517
48796
18507
57226
17221
93363
33666
72336
24240
Profit After Tax

Dividend
6371
2980
-
30289
5215
668
40005
7446
954
59697
17871
2525
48096
17871
2506
Debt/Equity
Earnings per share (Rs)
Dividend (%)
Dividend Payout (%) (including Dividend
Distribution Tax)
1.22
4.28
5.62
20
46.77
1.53
20.31
26.05
35
19.42
1.47
26.86
27.56
50
21.00
1.20
40.08
33.04
120
34.17
1.21
32.29
22.46
120
42.37
What We Owe
Share Capital
Reserves *
Networth
Borrowings
Total
What We Own
Fixed Assets (including Capital WIP)
Less: Depreciation
Intangible Assets (including WIP)
Less: Amortisation
Investments
Working Capital
Total
Income
Sales
Interest
Inventory Difference
Adjustment - Prior Years
Total
Expenditure
Raw Materials
Manufacturing Expenses
Salaries & Benefits to Employees
Administration Expenses
Interest
Depreciation
Total
* After adjusting Miscellaneous Expenditure

93
FOR THE KIND ATTENTION OF SHAREHOLDERS:

Sub : Transfer of Unclaimed Dividend to the Investor Education and Protection Fund
The unclaimed dividend declared at the 33rd AGM held on 06.09.1999 for the financial year ended 31.03.1999
will be transferred by the Company on or before 05.10.2006 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 34th AGM held on 18.09.2000 for the financial year ended
31.03.2000 will be transferred by the Company on or before 17.10.2007 to the Investor Education and
Protection Fund.
Therefore, Members who have not encashed their Dividend Warrants in respect of the above dividend, validity
period of which has expired, may approach either the Company or its Share Transfer Agents, viz., Karvy
Computershare Private Limited, for obtaining duplicate Dividend Warrants immediately.
COMPANY SECRETARY
94
ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORMAT

To
To
(In Case of Physical Holding)

Karvy Computershare Private Limited
Unit : Chennai Petroleum Corporation Ltd.
Karvy House. 46, Avenue 4, Street No. 1, Banjara Hills
HYDERABAD - 500 034
(In case of Electronic Holding)

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

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

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

.......................................................................................................................
I, hereby, declare that the particulars given above are correct and complete. If any transaction is delayed or not effected at
all for reasons of incomplete or incorrect information, I would not hold the company / Registrars & Share Transfer Agents
of the Company responsible. I also undertake to advise any change in the particulars of my account to facilitate updation
of records for purpose of credit of dividend amount through ECS.
Place
Date
Signature of the First Shareholder
95

PROXY
Folio No. :
-----------------------------------No. of Shares :
-----------------------------------I/We ........................................................ of ........................................................... in the District of ................................................
being member(s) of the above named Company hereby appoint ............................... of ............................... in the District
of ............................... or failing him/her ............................... of ............................... in the District of ............................... as
my/our proxy to vote for me/us on my/our behalf at the Fortieth Annual General Meeting of the Company to be held
on the 25th day of August 2006 and at every adjournment thereof.
Signed this ............................... day of ............................... 2006.
Full Name ...........................................................
For Office use only.
Affix 30 paise
Revenue Stamp
Proxy no. :________________________
Notes :
1.
The instrument of proxy, to be valid, should be deposited at the Registered Office at 536, Anna Salai, Teynampet,
Chennai 600 018, 48 hours before the meeting.
2.
The instrument of proxy should be executed on 30 paise revenue stamp.

Registered Office: 536, Anna Salai, Teynampet, Chennai 600 018.
ATTENDANCE SLIP
PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF KAMARAJ ARANGAM,
CHENNAI 600 006.
---------------------------------------------------------------------------------------------------------------------------------------------------------NAME OF THE MEMBER/PROXY
FOLIO NO.
---------------------------------------------------------------------------------------------------------------------------------------------------------I hereby record my presence at the FORTIETH ANNUAL GENERAL MEETING at 3.00 p.m. on 25th AUGUST 2006 at
KAMARAJ ARANGAM, CHENNAI 600 006.
---------------------------------------------------------------------------------------------------------------------------------------------------------SIGNATURE OF THE MEMBER OR PROXY :

---------------------------------------------------------------------------------------------------------------------------------------------------------Note : Members who come to attend the meeting are requested to bring their copies of Annual Report with them.
97

(A group company of IndianOil)
Dear Shareholders,
As you may be aware, the equity shares of the Company are traded in dematerialized form with effect from
15.02.1999. To facilitate holding and tranfer of equity shares of the Company in the Electronic mode, the
Company had also signed a tripartite agreement with both the depositories viz., National Securities Depository
Limited and Central Depository Services (India) Limited.
Electronic trading of shares will facilitate easy and quick transfer of shares by the shareholders.
Other benefits of dematerialisation and trading in electronic system are as follows:
Safety from bad delivery and fake certificate.
You can even freeze your account with the Depository Participant, that means, you can lock your account
so that the Depository Participant will not be able to carry out any transactions without your prior
authorization.
Faster and simpler process of trading settlement.
No stamp duty on transfers.
No courier / postal charges.
No odd lot holding problem : sale and purchase could be for any quantity i.e. there is no restriction as
to the number of shares that can be transferred as a minimum quantity.
Pledge facility is available in electronic shares i.e., the system provides facilities to pledge / hypothecate
dematerialized securities if both pledgee (lender) and pledgor (borrower) hold accounts in depository
system. Banks are giving preference to lend money by accepting dematerialized shares as security.
Direct allotment in electronic form on public / rights / bonus issue, etc.
No hassle of filling in transfer deeds and lodging / dispatching the transfer documents with the Company,
thus avoiding a lot of paper work.
Shareholder no longer has to wait for the shares to be transferred in his name and suffer delays on
account of processing time.
In addition to the above advantages, the problem relating to loss of original share certificates and
issue of duplicate share certificates can be avoided, if the shares are held in electronic form.
In view of what has been stated above, we request you to kindly expedite opening of your depository
account with any of the depository participants and dematerialize your shares of CPCL.
In case you require any further information including the names of Depository Participants in the country,
please contact the Share Transfer Agents of the Company at the following address:
Karvy Computershare Private Limited
Unit : CPCL
46, Avenue 4, Street No.1
Banjara Hills, Hyderabad 500 034.
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,
V. Srinivasan
Company Secretary
Place : Chennai
Date : July 07, 2006
99
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Printed at Nagaraj & Company Pvt. Ltd.

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Chennai Petroleum Corporation Limited

Report of the Statutory Auditors

ECS Mandate Format

Proxy / Attendance Slip

Chennai Petroleum Corporation Limited

Mr. K.K. Acharya

Mr. N.C. Sridharan

Mr. A.M. Uplenchwar

Mr. A. Kasturi Rangan

Mr. B.N. Bankapur

Executive Director (Operations)

Chief Executive Officer,

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

Mr. Venkatraman Srinivasan

V. Sankar Aiyar & Co.,

Prof. M.S. Ananth

Mr. K.L. Kumar

Mr. Ravi Capoor, I.A.S.

Mr. Pramod Nangia

Chennai Petroleum Corporation Limited

Mr. V.R. Raman

Mr. N.K. Natarajan

Mr.D. Jagannadha Rao

Chennai Petroleum Corporation Limited

The proxy need not be a member of the Company.

Chennai Petroleum Corporation Limited

Chennai Petroleum Corporation Limited

By order of the Board

COMPANYS PHILOSOPHY ON CORPORATE GOVERNANCE

Chennai Petroleum Corporation Limited

Board Meeting Date

Details relating to:

Number of other directorships, and

Number of memberships / chairmanships held by the Directors in the committees of various

Name of the Directors

Mr. K.K. Acharya

Mr. Venkatraman Srinivasan

Mr. K.L. Kumar

Prof. M.S. Ananth

Mr. Ravi Capoor

Mr. Pramod Nangia

Mr.S.V.Narasimhan, Managing Director ceased to be a Director effective 30.06.2005, consequent upon

Mr.R.Sankaran, Director (Technical), ceased to be a Director on attaining the age of superannuation

Mr.M.B.Samiei Khonsari, ceased to be a Director effective 09.05.2006 consequent to the appointment

Chennai Petroleum Corporation Limited

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

Major accounting entries involving estimates based on the exercise of judgement

Compliance with listing and other legal requirements relating to financial

Disclosure of any related party transactions.

Qualifications in draft audit report.

Chennai Petroleum Corporation Limited

Name of the Director

Mr. N.C. Sridharan,

Mr. Venkatraman Srinivasan

Mr. K.L. Kumar

Prof. M.S. Ananth

Criteria for payment to Non-Executive Directors:

Shares held by Non-Executive Directors:

SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE