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n a y a r a eStatements n e r g y. c o m Corporate Overview | Reports | Financial

Laying the foundation of a new tomorrow

Annual Report 2017-18


Nayara Energy Limited (Formerly known as Essar Oil Limited)

Contents Corporate Overview The Nayara story We are Nayara Energy Nayara Energy: The Brand Year in Review Message from the Chairman From the CEO’s Desk Corporate Information Board of Directors Management Committee

01 02 04 06 08 10 13 14 16

Directors’ Report

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Reports Financial Statement Standalone Independent Auditor’s Report Balance Sheet Statement of Profit and Loss Cash Flow Statement Statement of Changes in Equity Notes

49 56 57 58 60 62

Consolidated Independent Auditor’s Report Balance Sheet Statement of Profit and Loss Cash Flow Statement Statement of Changes in Equity Notes Form AOC-1

116 120 122 124 126 129 195

AGM Notice

197

Notice


Corporate Overview | Reports | Financial Statements

The Nayara Story Energizing Economies, Advancing Growth Energy is the basis of existence. As economies scale newer heights, it creates a greater demand for a quick supply of energy. At Nayara Energy, we understand the need to adapt and match pace with the changing times, and therefore, while retaining our passion and pursuit for excellence, we’ve created a new brand identity that aligns with the needs of today, and ushers in the growth for tomorrow. Pivoted on our past achievements, such as the refinery processing’s higher than rated capacity of crude and our SPM registering the highest-ever crude intake; crossing the previous year’s High Speed Diesel (HSD) production benchmark; and retail network expansion with 1000 new outlets in FY 2017-18 sets the tone for next year’s goals.

investments in acquiring new assets and improved governance. To enhance our brand value and strengthen the value proposition, we’ve also planned to leverage our improved credit profile and finances. We strongly believe that employees are the backbone of our brand, and to ensure that they’re aligned with the new brand ethos and vision, we’re encouraging proactive employee participation across strategic elements, such as in optimizing processes; innovation; and future goals. Our initiatives and chartered framework will help us achieve our goals and enable us to make the brand synonymous with superior energy production and supply.

With a two-pronged strategy to continue maintaining focus on our efforts that spearheaded last year’s milestone moments, we’ve also increased emphasis on Health, Environment, and Safety (HSE) and upped

Annual Report 2017-18

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Nayara Energy Limited (Formerly known as Essar Oil Limited)

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Corporate Overview | Reports | Financial Statements

We are a downstream oil company with a strong presence in the hydrocarbon value chain. Our presence in refining and marketing makes us a truly integrated company of international repute. We own and operate India’s second largest single site refinery at Vadinar, Gujarat with a capacity of 20MMTPA, which is one of the world’s most complex refineries. We also own two oil depot terminals, a port, captive power plant and India’s fastest growing retail chain of fuel stations. Our major shareholders include Rosneft Singapore Pte. Ltd. (a subsidiary of PJSC Rosneft Oil Company) and Kesani Enterprises Company Limited (a consortium of international investors led by Trafigura and UCP).

Annual Report 2017-18

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Nayara Energy Limited (Formerly known as Essar Oil Limited)

The year that was … Operational / Strategic Highlights Process & Production

20.7

MMT Processed Crude

19.1

MMT Highest ever Crude intake through SPM

10.4

MMT Highest ever HSD production

Pan-India Retail Network*

4,473 Retail Outlet Network

1043

Outlets added during the year

Credit Rating AA

From ‘A’ to Significant improvement by 3 notches

Refinancing Impact Significant Interest Saving ($45 Million pa)

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Loans with longer tenure (upto 20 years)

Relaxed Covenants


Corporate Overview | Reports | Financial Statements

Key Performance Indicators EBITDA (` in crore)

Total Assets (` in crore) 52,064

57,842

67,991

85,018

68,845

4,703

5,761

7,773

11,188

6,623

Mar 31, 2014*

Mar 31, 2015*

Mar 31, 2016*

Mar 31, 2017

Mar 31, 2018

FY 13-14*

FY 14-15*

FY 15-16*

FY 16-17

FY 17-18

CP GRM (USD/bbl)

Throughput (MMT) 20.2

20.5

19.1

20.9

20.7

FY 13-14

FY 14-15

FY 15-16

FY 16-17

FY 17-18

8.08

.4

10.8

9.18

.95

FY 13-14

FY 14-15

FY 15-16

FY 16-17

FY 17-18

* As per previous IGAAP

Annual Report 2017-18

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Nayara Energy Limited (Formerly known as Essar Oil Limited)

Tony Fountain Executive Chairman

Message from the Chairman Dear Shareholders, I am very excited to connect with each one of you, as this is my first opportunity post-acquisition of our unique company, Nayara, by the new investors. I would call it unique, because of the unparalleled nature of its strategically located assets and the fastest growing fuel retail chain in India. Adding to that is the tremendous track-record of performance of the team members and the high demand business segments we operate in. Moreover, strong support from the new investors and the diverse experience of the new management team further increases the already existing potential. A combination of these factors presents a rare opportunity for any shareholder, which we can be proud of.

Business Performance In FY18, the Company successfully overcame various challenges in the external business environment in the form of oil price volatility, OPEC production cut for heavy oils, Government policy changes as well as the internal challenges in terms of change in management & acquisition by new shareholders. Our refinery continued with its best-in-class operating performance, while our retail network continued to remain the fastest growing petroleum retail chain in India. India is already the fastest growing energy market in the world. The domestic demand for oil continues to be buoyant due to various macroeconomic factors coming into play – growing car ownership trend, high demand for two-wheelers, improved road transport infrastructure to name a few. These factors help build confidence with respect to the future growth prospects of our business.

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