Resilient Today

for a Brighter Tomorrow

NAYARA ENERGY LIMITED ANNUAL REPORT 2020-21

 RESILIENT TODAY
FOR A BRIGHTER TOMORROW

RESILIENT TODAY
Resilience is an attribute that is not built overnight and may not be visible on the
surface. The real character of an organisation is unleashed when faced with challenges.
While COVID-19 brought unprecedented disruption to the worlds of commerce and
governance, Nayara Energy found itself agile and reinvented - not only to navigate
well through a year marked by challenges, but also to persevere determinedly with its
focused agenda.

Backed by the building blocks of growth established over recent years, Nayara Energy
has demonstrated remarkable resilience, driving robust initiatives that speak to our
true potential. At Nayara Energy, growth must always be inclusive. As a result, we
prioritise the wellbeing and socio-economic development of our communities. To us,
providing them with due support through the current pandemic, has been extremely
important. Our focused initiatives with local administrations and various government
departments have been fundamental in building resilience within many households
during the crisis. Despite the various challenges of a highly unusual year, Nayara
Energy delivered commendable performance for our shareholders in FY2021.

A BRIGHTER TOMORROW
Energy is fundamental to mankind’s progress. As a leading energy provider, Nayara
Energy augurs future growth by embracing technology, and encouraging innovation
that meets the energy and petrochemical needs of India’s growing population. Our
future is truly underpinned by the opportunities of a reforming energy sector within
the country, our own operational and functional excellence, and our highly capable
talent. Leveraging the opportunities ahead of us and using our transformational
strategies to make the best use of our resources, we are prepared for a journey
towards a brighter tomorrow.
While COVID-19 brought unprecedented disruption to the
worlds of commerce and governance, Nayara Energy found itself
agile and reinvented - not only to navigate well through a year
marked by challenges, but also to persevere determinedly with its
focused agenda.

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 WHO WE ARE
WE ARE A DYNAMIC AND
NEW-AGE DOWNSTREAM COMPANY
Nayara Energy is a new-age downstream energy & petrochemicals company of international scale with a unique mix of young and ENERGETIC
experienced minds and a robust foundation of best-in-class infrastructure and processes with a desire to deliver excellence, every We are constantly looking at better ways to shape tomorrow, today and we do this with a sense
step of the way. of zeal and determination. By making a tangible difference through our products, services, and
Nayara Energy owns and operates India’s second-largest single-site, state-of-the-art refinery, and one of the most modern and interactions; we are determined to continually energise the lives of our stakeholders.
complex refineries in the country. With businesses straddling across the hydrocarbon value chain, from refining to retail, we are
primely positioned to realise our vision for delivering crude to chemicals. XTRAORDINARY
Pivotal in our journey towards an ‘xtraordinary’ future is our creative, diligent and high-
As the fastest growing pan India fuel retail network, Nayara Energy is powering India’s growing energy demands.
potential workforce that constantly asks the question, “Is there a better way of doing things?”
Driving inclusive growth, providing a safe environment and delivering value for our stakeholders, including society-at-large, is at
the heart of what we believe in. COURAGEOUS
We continue to partner with our the communities through various sustainable development projects, in the areas of health & nutrition, We welcome new challenges and chase big dreams with conviction. Taking bold steps to
education & skill development and sustainable livelihoods & environment, playing a pivotal role in improving their quality of life. succeed in the ever-changing Indian and global energy markets is what makes us stronger,
faster and better.

ETHICAL
We honour commitments. Be it in our dealings with the environment, people or community, we
OUR VALUES always do things the right way - with integrity, consistency and transparency.

LEAD
We lead by example. By being proactive, taking ownership of our actions, and building a team
that is future-ready, we challenge the status quo to always stay one-step ahead of the rest.

Nayara Energy owns and operates India’s second-largest

single-site, state-of-the-art refinery, and one of the most
modern and complex refineries in the country.

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CONTENTS

CORPORATE OVERVIEW
Key Performance Indicators 10
Chairman’s Note 12
CEO’s Message 16
Board of Directors 20
Management Committee 22

BOARD’S REPORT 26

FINANCIAL STATEMENTS
Independent Auditor’s Report on
Standalone Financial Statements 70

Standalone Financial Statements 78

Independent Auditor’s Report on
Consolidated Financial Statements 142
Consolidated Financial Statements 147
Form AOC-1 213

AGM NOTICE 214

CORPORATE OVERVIEW
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

KEY PERFORMANCE
INDICATORS

Achieved 85% capacity despite a drastic drop in product demand

 ompleted major shutdown under the “Turnaround 2020”
C
Processed 6 new grades of crude increasing our crude basket during the year programme without any major safety related incident.
 icked off phase 1 of asset development project revamping the FCC and LPG Treatment
K 4747 LTI Free days for employees till FY 2021
Units; and setting up a new Propylene Recovery Unit (PRU); and a new Polypropylene
Unit (PP) All our 30 marketing locations were certified to Quality (ISO 9001),
Environment (ISO 14001) and Occupational Health & Safety (ISO
45001).

 II adjudged us as the National Energy Leader for

C
last two consecutive years since we have been
winning Excellent Energy Efficient Unit Award for
four years successively

 eaffirmation of our domestic credit rating of ‘AA’ by CARE amidst

R
uncertain global environment showcasing stable outlook of the company

Achieved the milestone of 6000+ retail fuel stations

Launched new and enhanced Nayara Branded fuel stations
 n the face of industry wide de-growth, the Retail Business delivered a volume growth
O
of 3% year-on-year

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

CHAIRMAN’S NOTE

The impact of the pandemic on the global oil

industry was severe and unprecedented. World oil
demand has partially recovered but it is still a very
turbulent and dynamic period. The environment has been
very challenging for Nayara and we are by no means
unscathed. The performance that has been delivered and
our financial position is attributable to the courage and
agility of the Nayara team, its leadership and the support
of our owners.

Dear Shareholders,
Last year was like no other in recent history. As the situation began to improve and
businesses started recovering in early 2021, India found itself at the centre-stage
of the second wave of the COVID-19 pandemic. The unforeseen spike in cases
overwhelmed the nation, consuming its resources and healthcare infrastructure,
compelling many States to return to complete or partial lockdowns. We have lost
cherished employees and feel and share the grief of their families.

Amidst this humanitarian crisis, we salute the spirit and tireless efforts of countless
frontline workers in combatting the virus. With the vaccination programme well
under way, there is hopefully a path that will allow us to live alongside this awful virus.

The impact of the pandemic on the global oil industry was severe and unprecedented.
World oil demand has partially recovered but it is still a very turbulent and dynamic
period. The environment has been very challenging for Nayara and we are by no
means unscathed. The performance that has been delivered and our financial position
is attributable to the courage and agility of the Nayara team, its leadership and the
support of our shareholders.

TONY FOUNTAIN
Executive Chairman

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CHAIRMAN’S NOTE

Resilience in a crisis
Through this crisis, it is to the credit of the Management that we kept all of our The Company is consistently working to foster inclusive development through
operations running. Indeed against the backdrop of overall decline, our fuel retail effective programs in the areas of health and nutrition, education & skill development
business grew by 3%. Despite challenges of depleting demand and availability of and sustainable livelihoods. In collaboration with various partners, we are enhancing
heavy crude oil in FY2021, our refinery in Vadinar operated above 85% capacity. The the ability of the youth and women in the community through skill development
refinery also successfully delivered a scheduled shutdown, with over 10000 contract initiatives.
workforce on site, during the first wave without spreading infection.
Changes for the Future
We have continued to deliver the required financial liquidity
to support and grow our business as well as maintain stability At the end of this financial year, we announced key
We remain committed to help make through this turbulent period. We maintained the AA leadership changes to drive performance and deliver our I remain confident that Nayara Energy
India a petrochemical hub of the world. credit rating vindicating the progress made in our financial strategy over the coming years. Mr. B Anand the erstwhile
will continue its path to strengthen India’s
CEO of Nayara Energy played a very crucial role as first
Aligned with the Government of India’s transformation journey.
CEO of Nayara Energy in its new avatar. I would like to energy and petrochemical security, while
vision of Atmanirbhar Bharat, our focus The significant investments in digitization and automation in personally thank Anand for guiding the company through also supporting the near-term fight against
the last three years really paid off as we were able to seamlessly
is to build a world-class integrated move to work-from-home (WFH) and close the books in
its post-acquisition transformation journey and laying a
coronavirus. We remain committed to delivering
strong foundation to translate our vision to strengthen
petrochemical complex to fulfil India’s a record time. The goal is to automate every aspect of our India’s energy security. Starting April 1st 2021, Dr Alois performance on behalf of our shareholders
growing demand for petrochemicals. There business to build a future-ready organization. Virag has joined Nayara Energy as our new CEO. I welcome and in the interest of the wider community we
is now concrete progress in delivering the We remain committed to help make India a petrochemical hub him to lead the Company through the next exciting period.
engage with.
of the world. Aligned with the Government of India’s vision Alois is a senior and highly experienced oil downstream and
first phase polypropylene expansion of Atmanirbhar Bharat, our focus is to build a world-class petrochemical executive having spent more than 30 years
of our journey. integrated petrochemical complex to fulfil India’s growing at OMV, most recently as a senior vice president running their Middle Eastern and
demand for petrochemicals. There is now concrete progress in Asian interests.
delivering the first phase polypropylene expansion of our journey. A Key milestone is I remain confident that Nayara Energy will continue on its path to strengthen India’s
the appointment of Thyssenkrupp, Toyo and Technip as partners for this programme. energy and petrochemical security, while also supporting the near term fight against
Support to Communities coronavirus. We remain committed to delivering performance on behalf of our
shareholders and in the interest of the wider community we engage with.
During these extraordinary times, we have driven a multi-pronged support strategy
to provide Covid relief in and around Vadinar. Nayara has set up a Covid Care centre
comprising of 50 beds to treat patients with mild infection. The overall operation
and management of the Centre is being led by the Company in collaboration with Warm regards,
Helpage India and the Gram Panchayat in Jhakhar Village. A Mobile Health Van
has been launched that provides services to more than 20,000 people across ten
Tony Fountain
villages in Khambhallia Taluka and supplied PPE kits, ventilators, oxygen cylinders,
Executive Chairman
and equipment for medical professionals and frontline workers. Nayara’s Community
Health Project encompassing primary healthcare services, pathological facilities and
emergency response infrastructure has benefitted more than 50,000 people across
15 villages in Jamnagar and Devbhumi Dwarka districts.

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ANNUAL REPORT 2020-21

CEO’S MESSAGE

Dear Shareholders,
It is beyond question that the past financial year, marred by a flummoxing first wave and a grievous second At Nayara, in addition to the 50-bed Covid-19 Care Center at
one, left us all vacillating between hope and despair. This unprecedented pandemic affected every one Jhakhar village, we are also installing 2 oxygen plants at government-
of us, unifying us in our vulnerability – as communities, cities, nations and as companies, sectors and run hospitals in Jamnagar and Rajkot and 1 oxygen plant in Military
economies. Naturally, this crisis brought along several learnings, for governments and corporates alike. That
collaboration and one-track focus could demonstrably condense a whole decade of R&D into a single year Hospital in Jamnagar respectively to ensure uninterrupted supply of
for producing efficacious vaccines is a great testimonial of what we can achieve, together. The year 2020 medical oxygen.
also shined light upon the criticality of resilience, a virtue otherwise eclipsed during merrier times.

For Nayara Energy, FY20-21 meant leveraging our

innate strengths and cultivated virtues to surmount
With our business continuity plans well in
the disruptions and uncertainty. With our business
order and supported by the courage and continuity plans well in order and supported by the
commitment of our employees and franchisees, courage and commitment of our employees and
franchisees, we remained optimally operational at
we remained optimally operational at a time
a time when lockdowns brought the country to a
when lockdowns brought the country to a standstill. Further, throughout the year, we have
standstill. resolutely marched ahead with concretization of our DR. ALOIS VIRAG
expansion plans. Chief Executive Officer
Health, Safety and Emotional Well-being at the Forefront
At Nayara, health and safety have always taken priority. Taking prompt cognizance of the evolving risks, we
implemented Covid-19 safety protocols across all our operations, as well as put together supportive policies
to ensure our employees could avail paid leave and advance medical funds for treatment. We also doubled
the insurance cover for our on-field contract staff.

Further, the pandemic and resultant isolation and grief have brought to the fore some important conversations
regarding mental and emotional well-being, an area that is typically overlooked in comparison to physical
health. We, at Nayara, have equally pivoted our focus towards therapy for stress, anxiety, depression, etc.
and rolled out employee assistance programs aimed at alleviating these conditions.

Strengthening Community Resilience

Our local communities are not just our neighbours, but a reflection of the inclusivity of our business. It is
universally observed that the pandemic has discriminately impacted the underprivileged, jeopardizing their
lives and livelihoods. Stepping up to the needs of communities in Devbhumi Dwarka and Jamnagar districts,
Nayara instantly pivoted its CSR strategy to focus on response and rehabilitation for 12,000-odd families in
our nearby villages. Our community kitchen fed the needy, while grocery kit distribution at Vadinar as well
as across our retail network took care of their immediate well-being. Our CSR team also rallied a women-led
stitching centre which distributed more than 100,000 masks. We intensified agricultural support program
to cover 5000 local farmers. Leveraging technology, we launched several Covid-adaptive social innovations
such as installation of 4 telemedicine kiosks; mobile training app for health, nutrition and soft skills; home-
based self-learning modules for school children.

The second wave of Covid-19 in India has been more gruelling. The over-burdening of healthcare infrastructure
sounded a clarion call to the private sector to jump in for ameliorating the situation. At Nayara, in addition to
the 50-bed Covid-19 Care Center at Jhakhar village, we are also installing 2 oxygen plants at government-run
hospitals in Jamnagar and Rajkot and 1 oxygen plant in Military Hospital in Jamnagar respectively to ensure
uninterrupted supply of medical oxygen.

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CEO’S MESSAGE

Agility through Digitization and Innovation Sustained Focus on Performance Culture

At Nayara, we believe digitization is future-proofing. Our early investments in digital infrastructure helped With the advent of the ‘new normal’, Nayara moved onto a digitally elastic workspace with alacrity. We
us navigate an agile and seamless transition to remote working. While a sizeable part of our workforce further initiated digitization of the entire hire-to-retire cycle – starting with remote on-boarding of new
moved online, we managed the haul while keeping any cybersecurity incidents at bay. joiners. As we pivoted to a hybrid working model, we ensured zero lost productive days and sustained the
emphasis on operational excellence and going the extra mile through quality employee engagement and
Our digital innovation initiatives in marketing operations have been particularly noteworthy. Despite
performance management, manifest in the resilient business outcomes during this exacting year.
pandemic-related challenges, we completed automation at a total of 3600+ retail outlets, making marked
improvement in equipment uptime, compliance and retail inventory management. During the year, we also Taking advantage of the prevailing circumstances to support career development, we launched a virtual
launched Nayara Indent Management System in 5500+ outlets, reducing indent-to-fulfilment cycle time by rapid upskilling series for 2500+ employees. Moreover, with the uncertainty unleashed by the pandemic,
50%. Further, our supply operations were bolstered by the newly deployed VTS (Vehicle Tracking System) we accelerated our succession planning and leadership readiness program in line with business continuity
along with 24x7 central monitoring, improving field safety and control over tank trucks. We also succeeded planning scenarios.
in automating the entire manual invoice-to-payment process.
Setting Sights on Expansion
Operational Optimization and Outperformance A laudable milestone for FY20 was our retail network
While stringent lockdown diminished domestic demand for petroleum products substantially, Nayara could touching the 6,000-mark while being the fastest-growing Nayara Brand with an eye-catching
maintain its throughput in the range of 90% for most of the year, the highest among Indian refiners, thanks to private fuel retailer In India. In the last three years, we
our built-in exports optionality and prepaid term contracts which are an outcome of our consciously curated have not only tripled our retail network, but carved out a
visual identity, augmented by a host of core
market diversification strategy. Despite declining global availability of ultra-heavy crude oil, we sustained presence in the Indian market as trustworthy, transparent, & segment-specific value propositions for our
ultra-heavy processing at greater than 60% by introducing 6 new crudes in our diversified crude basket and hygienic and hassle-free. From October 2020, the Company customers. With an aim to fuel the aspirations
signing up 4 new counterparties. Further, the planned shutdown in October ensured optimization of yields has been commissioning all new outlets in Nayara Brand
and reliability of our crude distillation and hydro-treating units as we continue producing top-grade BS VI with an eye-catching visual identity, augmented by a host
of a rising India mile-by-mile, we are set to
fuel. In domestic marketing, we continue to strengthen our supply backbone through strategic hired depots of core & segment-specific value propositions for our expand our network to 7,600 outlets in the
and progressing construction at own depot in Rajasthan. customers. With an aim to fuel the aspirations of a rising next three years.
India mile-by-mile, we are set to expand our network to
2020 was indeed an outstanding year for retail
7,600 outlets in the next three years.
performance, not withstanding the anomalous market
While stringent lockdown diminished
environment. Focused expansion in priority markets Driven by zeal and conviction, our Phase 1 expansion plan, which entails existing unit revamps, a propylene
domestic demand for petroleum products complemented by a slew of strategic initiatives such recovery unit and a 450 KTPA polypropylene production unit, is set for execution stage. The work on front-
substantially, Nayara could maintain its throughput as automation, infrastructural upgrade, digital fleet end engineering and design as well as EPC tendering continued undisrupted during the pandemic and
program and tail management has delivered a steady requisite statutory approvals have been received to proceed with the project. EPC contracts have been
in the range of 90% for most of the year, the highest
rise in our market share to 6.1%. Our volumes, which awarded to Technip India and Toyo Engineering who shall help us steer the project in keeping with our
among Indian refiners, thanks to our built-in exports grew 3% YoY in spite of lockdowns, consistently undivided focus on operational excellence.
optionality and prepaid term contracts which are outperformed the industry by double digits from April
I express my heartfelt appreciation to our employees for their outstanding contribution. I’m grateful to our
to October, and displayed remarkable buoyancy.
an outcome of our consciously curated market shareholders for their unwavering support and look forward to a fulfilling journey together!
Powered by extraordinarily lucrative margins in the
diversification strategy. first two quarters, EBITDA contribution from retail
stood tall at $410 MN in FY20. Best Regards,

Spend Prioritization and Efficient Refinancing Amidst Adverse Environment

A distinguished achievement this year has been the resounding affirmation of our domestic credit rating Alois Virag
at AA with stable outlook, in the backdrop of a globally precarious market environment. This challenging Chief Executive Officer
feat was made possible by the tenacious efforts undertaken by management towards robust cost control
initiatives including opex reduction, capex prioritization and deferment; adept liquidity management through
timely short and long term prepayments as well as working capital optimization; and efficient refinancing of
high-interest debt despite prevailing conditions.

A notable update is that amidst a tepid market, we accomplished financial closure of project term loans for
Phase 1 of Nayara’s expansion plan which marks our foray into the petrochemicals segment. This underpins
a strong belief in our asset quality, market potential and management wherewithal.

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BOARD OF DIRECTORS

CHARLES ANTHONY FOUNTAIN JONATHAN KOLLEK PRASAD K PANICKER AVRIL CONROY ALEXANDER ROMANOV DEEPAK KAPOOR
Executive Chairman Non-Executive Director Director & Head of Refinery Non-Executive Director Non-Executive Director Independent Director

VICTORIA CUNNINGHAM CHIN HWEE TAN KRZYSZTOF ZIELICKI NAINA LAL KIDWAI ALEXEY LIZUNOV
Non-Executive Director Non-Executive Director Non-Executive Director Independent Director Non-Executive Director

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
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MANAGEMENT COMMITTEE

ALOIS VIRAG PRASAD K PANICKER ANUP VIKAL ANDREY BOGATENKOV SERGEY DENISOV MADHUR TANEJA
Chief Executive Officer Director & Head of Refinery Chief Financial Officer Chief Commercial Officer Chief Development Officer Chief Marketing Officer

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 BOARD’S REPORT

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

BOARD’S REPORT

Dear Shareholders,
The Directors take immense pleasure in presenting the 31st Annual
Report along with the Company’s Audited Financial Statements for
the financial year ended March 31, 2021
The year 2020-21 was an unprecedented one due to many factors. The COVID-19
pandemic altered our economic and social orders, accelerated large-scale change, and
redefined life as we knew it. In the face of grave uncertainty and challenges, team
Nayara Energy came together to deliver value to all our stakeholders, excelling during
several occasions throughout the year. Against all odds, the Company was also able
to maintain business performance, delivering desired outcomes with commitment,
hard work, seamless coordination, timely communication and focus on execution.
Given the current situation and the outlook of the organisation, it gives us immense
satisfaction and confidence that our Company can achieve greater heights, in future.

Despite a difficult year for the marketplace, Nayara Energy delivered positive
net income, thanks to its financial resilience, refinery productivity and retail asset
performance. As soon as Covid 19 started spreading, the Company quickly set up a
dedicated crisis management team and defined business continuity plans to follow.
Its clear focus was to ensure the safety of its people, its assets are securely kept, and
maintaining business continuity.

Highlights of financial performance on standalone basis

(₹ in million)
Particulars FY 2020-21 FY 2019-20
(Restated*)
Revenue from Operations 875,006 998,683
Total Revenue including Other Income 885,561 1,005,490
Earnings before finance cost, depreciation /
37,281 64,044
amortization, Exceptional items, and Tax (EBIDTA)
Profit before Exceptional items and Tax
Against all odds, the Company was also (2,755) 14,501
Exceptional items - 4,544
able to maintain business performance, delivering
Profit / (Loss) before Tax (2,755) 9,957
desired outcomes with commitment, hard work,
Tax (reversal) (7,420) (15,226)
seamless coordination, timely communication and
Net Profit after Tax 4,665 25,183
focus on execution. Given the current situation and
the outlook of the organisation, it gives us immense *Comparative financial information for the financial year ended March 31, 2020 has been restated to give
effect of the adjustments arising from merger of Vadinar Oil Terminal Limited, subsidiary of the Company,

satisfaction and confidence that our Company can with the Company.

achieve greater heights, in future.

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GLOBAL MARKET

With the two leaders of OPEC+,

Russia and Saudi Arabia, failing to arrive
at common ground over production cuts,
the production cut agreement in-force for
more than a year was called off, leading to
massive over-supply of oil during April 2020.
Simultaneously, the outbreak of Covid-19
lead to wide-spread lockdowns
and shutdowns globally.

IN FY 2021, THE GLOBAL While the rest of the product cracks strived recovery,
Naphtha cracks were supported by the surging demand for
ECONOMY AND OIL MARKETS petrochemicals used in production of PPE (Personal Protective

WITNESSED A HISTORIC Equipment) kits. The latter half of the year saw increased
mobility along with optimism in the economy as successful
COLLAPSE IN DEMAND development of vaccines and their subsequent administration
helped ease the economic fall-out of the pandemic. While
CAUSED BY THE COVID-19 the draw-down of global inventories during the latter part of

PANDEMIC... the year also supported a relative bounce back in the overall
refining margins, the second wave of pandemic infections
obstructed the path of a smoother recovery in oil product
demand and refinery margins.
The severe economic impact of the pandemic also triggered
In FY 2021, the global economy and oil markets witnessed a figures, due to lack of demand and oversupply. A large part activities came to a near standstill. The Jet crack versus Dubai concerted efforts by Central banks and governments around
historic collapse in demand caused by the Covid-19 pandemic. of this oversupply ended up in facilities in China, which took crude traded in negative for the first time this century. The fall the world. The monetary and fiscal stimulus, along with
The oil markets were pushed into turmoil at the very beginning advantages of the steep fall in prices and the incidental super- in demand led to economic refinery shutdowns, which in some easing lockdown restrictions provided a boost to the demand.
of the financial year facing dual headwinds of oversupply contango to fill up onshore as well as floating storages. Amid cases became permanent closures, especially less complex Moreover, the dollar denominated commodities, especially oil,
coupled with demand destruction. First, the OPEC+ co- this backdrop of falling demand and overflowing inventories, refineries in developed economies. With announced closures got an additional boost in prices.
operation for restricting oil production faced a breakdown. the OPEC+, under the leadership of Saudi Arabia and Russia, of nearly 3.6 mbd over the next few years (with almost 1.7 mbd For the year ahead, the International Monetary Fund (IMF)
With the two leaders of OPEC+, Russia and Saudi Arabia, implemented a plan to reduce oil production by almost 10 closures by end-2021), the overhang of refining capacity will be has projected the global economy to grow at the rate of 5.5
failing to arrive at common ground over production cuts, the million bbls per day, to drain the build-up of excess inventories. reduced, though more closures are needed for the remaining percent in 2021 and 4.2 percent in 2022, with expectation of
production cut agreement in-force for more than a year was Over the remainder of the year, OPEC+ compliance to their refineries to run profitably. successful vaccination drives resulting in increased mobility
called off, leading to massive over-supply of oil during April production pact has been close to a 100%, reducing the excess The absence in demand for jet fuel forced the refiners to and additional policy support in a few large economies. While
2020. Simultaneously, the outbreak of Covid-19 led to wide- inventory build-up by more than half, and supporting the oil tweak their yield slate, maximizing their gasoline yields along the strength of the recovery would vary significantly across
spread lockdowns and shutdowns globally. This led to global prices. However, the reduction in supplies from OPEC+ was with blending Jet fuel into diesel/gasoil. With global shipping countries, depending on access to medical interventions,
oil demand falling precipitously, by 18 million bpd during the primarily in medium/heavy-sour crude grades. This led to and bunkering demand rebounding quickly, VLSFO margins effectiveness of policy support and structural characteristics,
first quarter of the FY 2021. Crude prices fell into teens for the narrowing of the light-heavy / sweet-sour differentials, provided incentive to tactically divert FCC feeds to gain Asian powerhouses of economic growth, China and India,
Brent and Dubai markers, while local considerations of storage increasing the crude cost for complex refiners and further incremental margin to refiners. Tactical decisions like Unit are projected to grow their GDPs at 8.1 and 11.5 percent
capacity led the West Texas Intermediate (WTI) marker to dampening their margin edge over simple refiners. optimization, intermediate stream diversion and inter-product respectively on year-on–year as per IMF. This re-bound in
briefly trade in negative prices. The loss in oil demand reflected in product prices as well as the blending were some of the margin boosting techniques economic activity, as the world recovers from the Covid-19
The global oil inventories, both crude and products, had built margins. Gasoline and diesel cracks fell to multi-year lows. The extensively employed by refiners around the world to tide over set-back, has the potential to lead oil demand back up, helping
by almost an additional 1.4 billion bbls over the 2019-end hardest hit were Jet Fuel margins, as major international aviation the low margin environment. the refining sector return to a healthier margin environment.

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DOMESTIC MARKET OVERVIEW

The shift to personal mobility due to Covid-19 and low interest rate has resulted in a
sharp recovery for the PV industry and its monthly volume has been growing for the
last eight months. It was the first time since FY 1999 that the industry witnessed fuel
demand contraction (YOY drop of 9% in FY 2021). The demand contraction was led
by diesel with a drop of 12% YOY, while petrol demand shrank by 7% YOY.

However, in FY’22 Indian’s passenger vehicle market is expected to post a strong

double-digit growth on account of pent up demand and a comparative low base due
to strong decline in last 2 years. New product launches, quick economic recovery
and the upside of Covid-19 vaccines will drive buyers back to showrooms, creating a
sustained demand for personal mobility, according to forecasters.

India’s passenger vehicle market is The Indian market is likely to be the biggest contributor to incremental global PV
volume growth in 2021. Upcoming Government Initiatives like introduction of
expected to post a strong double-digit growth on
scrappage policy will definitely be a big boost in reviving the Auto Sector in 2021.
account of pent up demand and a comparative Massive tailwinds in FY 2021 may result into a potential sharp recovery for auto
low base due to strong decline in last 2 years. sector in FY 2022. This is expected to happen in the second half of the year, once the
New product launches, quick economic recovery coronavirus vaccination is widely available and due resumption of office and schools
and also the continued consumer preferences for personal vehicle ownership over
and the upside of Covid-19 vaccines will drive public transportation and low interest rate expectations.
buyers back to showrooms, creating a sustained
demand for personal mobility, according to
forecasters.

Unprecedented drop in overall volume in the domestic market, led

by decline in sale of two-wheelers has pushed the industry back by
six years. Absolute sales in each of the segments touched multi-year
lows in FY 2021. While Passenger Vehicle (PV) and Two-wheeler
sales were as low as those in FY 2015, sales of commercial vehicles
declined further to the level of FY 2011.
The automobile industry was already grappling with demand pressure due to a slowdown
in economic activity in FY 2020 and the Covid-19 induced nationwide lockdowns further
dented product demand during first quarter of FY 2021. Although, favorable monsoon,
bumper crop outputs and government stimulus (such as MGNREGA) provided much-
needed support to rural income, which turned out to be a key growth driver during
2nd half of the year. Rural focused segments like tractors, motorcycles and entry-level
cars have done reasonably well despite washed out first quarter of FY 2021.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

OPERATIONAL EXCELLENCE
During the FY 2021, the refinery processed 17.07 MMT of crude
achieving 85% capacity utilisation despite a drastic drop in product
demand during the year. Safe and reliable refinery operations were
ensured during the lockdown period and thereafter, along with
managing the health of employees.
Ensuring business continuity, along with health and well-being of employees and
contract workmen were the most important achievements of the Refinery in this
challenging environment.

The Refinery operations undertook some major reliability improvement programs

during the year, based on the requirements of the process units. All these initiatives
were well-managed, without any significant spread of infection. This was the result
of adopting extensive COVID safety protocols and the strict adherence to COVID
appropriate behavior. These reliability programs were completed well within the
pre-planned schedules and with zero safety related incidents. All the other routine
maintenance activities and ongoing projects were completed as a matter of normal
business during the year as planned. Resources and availability of manpower from
material suppliers and OEMs were ensured to meet the site requirements.

Your Company optimized performance through the introduction of new products

such as Marine Fuel Oil, Heavy Naphtha and High-Density Diesel giving it market
share gains in extremely volatile markets. The Company replaced its key heavy crude
diet with optimum light crudes and achieved worthwhile cost savings. The Company
generated value through significantly higher utilization of its refinery operations, as
compared to industry peers.

Crude Processed, MMT in FY

19.8 20.2 20.5 **
19.1 20.9 20.7 **
18.9 20.6 17.1 #

Your Company optimized performance

through the introduction of new products such as 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Marine Fuel Oil, Heavy Naphtha and High-Density ** Throughput low due to turnaround

Diesel giving it market share gains in extremely Lower demand caused by Covid 19 pandemic and opportunity shutdown in October 2020.
#

volatile markets. The Company replaced key heavy

crude diet with optimum light crudes and achieved
worthwhile cost savings. The Company generated
value through significantly higher utilization of
refinery operations, as compared
to industry peers.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

MARKETING PERFORMANCE

Your Company undertook initiatives to increase the blending

percentage from 0.67% in October 2020 to 4.54% in March
2021, with the overall blending compliance of 1.97% achieved
in FY 2021. This was possible due to the commencement
of Ethanol procurement at Vadinar and Wardha to meet the
Company’s critical blending compliance agenda.

Supplies & Distribution

Nayara Energy’s Supply and Distribution team demonstrated
tremendous courage and drive in ensuring uninterrupted
supplies across all our supply locations and network during the
ongoing pandemic.

We seamlessly shifted to BS-VI fuel grade effective

April 1, 2020 as per the Government mandate. We augmented
hired tankages at the Ennore location, which is strategic to
cater Tamil Nadu market. This reduced our traded product
dependence increasing integration with refinery in line with
our stated business strategy. All mandatory supplies were
effectively managed during the planned Refinery Shutdown in
October 2020. In order to meet the demand of Retail and B2B,
three Time Charter vessels were on-boarded to optimize the
cost of placement.

During the year, we implemented the Nayara Integrated

Management System (NIIMS) across the country for our Retail
Supplies. This automated the entire process of indenting,
making it transparent and user friendly. In continuation to our
Retail network Institutional Business commitment to provide safe logistics, a control room was set
up for round-the-clock live monitoring of all our dispatches,
Nayara Energy’s retail business continued to deliver a brilliant all-round performance Our focus continued to expand Nayara Energy’s footprint
resulting in a significant drop in violations, and consequently
during FY 2021. The retail business delivered a volume growth of 3% year-on-year, as within the B2B markets, by exploring new products along with
a decrease in number of incidents, helping us strengthen HSE
compared to the Industry’s de-growth of 9% in FY 2021. In line with the Company’s opportunities for value additions. Despite the effect of the
standards. Furthermore, the introduction of Digital signatures
strategic roadmap, we continue to expand the network in select focus markets. pandemic on industrial activities, the institutional business
on invoices, emails and electronic/third party storage also
Nayara Energy also added 515 new outlets in FY 2021. Towards the end of FY 2021, registered its highest ever sale of High Speed Diesel (HSD),
increased the effectiveness and our efforts to avoid any manual
your Company crossed the historic milestone of 6000+ fuel stations with a total Light Diesel Oil (LDO), and better than plan delivery for
exchanges of documents, with improved security and retrieval

515
network strength of 6,059 fuel stations across the country as on March 31, 2021. Of Bitumen. This was the result of our marketing team capitalizing
New the total network, nearly 450 retail fuel stations are functioning under Nayara brand. on every opportunity. We registered strong growth of 28.5%
mechanisms.
Outlets in HSD, as opposed to the de-growth of 21.3% that was We introduced in-tank blending of Ethanol in Vadinar, which is a
The Company continues its efforts to automate the entire supply chain, right from
experienced by the industry. We were able to scale up both first-of-its-kind initiative in the Industry. Our uniquely positioned
Added in FY 2021 refinery to depot all the way to the franchisee network, thus optimising our inventory
LDO & Bitumen business with strong growth compared to rail-fed depot at Wardha in Maharashtra, commissioned in
levels and costs, leading to increased sales. We have automated approximately 61%
Industry. We averted the containment crisis during the Covid January 2019, is able to cater to the requirements of customers
of our Retail Outlets, a step closer towards becoming a ‘future ready’ organization.
pandemic by exporting Petcoke & Sulphur cargoes to ensure as well as business partners in and around the Vidarbha
We plan to automate the entire network by the end of FY 2022.

6,059
smooth evacuation, without any disruptions to the Refinery region. Currently the depot caters to Nayara Energy’s retail
Fuel
Our Fleet Plus (FP) program performed exceptionally well, with more than 8,200 run. Our association with key customers grew stronger as our requirements, along with product requirements from other
Stations
customers transacting on the FP program. To further strengthen our consumer service levels remained impeccable. The team also ensured oil companies, with an average monthly volume of 80,000
connect, we tied-up with Shell Lubricant to offer its range of lubricant product across that other products such as Fly Ash, Power Liquid Nitrogen, KLs. Our Pali rail-fed depot, currently at 63% completion, is
total network strength in
March 2021 our Retail outlet network. Bunker procurement for our time charter vessels and Ethanol expected to be commissioned by end of 2021.
procurement witnessed the right tractions and interventions.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ASSET DEVELOPMENT

Nayara Energy is uniquely and advantageously positioned to become

a formidable player within the petrochemical arena. The Company’s
focus on petrochemicals is based on the expected intensive growth
in the consumption of petrochemicals within India – twice as high
as the growth of fuels, approximately 8-9% YOY as against 4-5% for
petroleum products.
The Government is further bolstering investments in petrochemicals by having
import duties on key product imports, and by having reduced duties on feedstock
imports. The geographic location of the Vadinar refinery is the largest petrochemical
consumption area of the country. Furthermore, the opportunity of integration with
the refinery and the proximity to the port are providing additional competitive
advantages for the Company in India and internationally.

Nayara Energy’s strategy includes a step-by step implementation of an asset

development plan. In Phase-1, the Company aims to realize the full potential of the
refinery scheme by maximizing the use of olefinic feedstock propylene, for converting
it into polypropylene. This phase of the project is expected to deliver high returns
and is positioned as a “quick win” opportunity. In Phase 2, the Company plans to
construct a world scale steam cracker that is integrated with the refinery and which
produces a profitable range of derivatives. The Phase-1 part of the project includes
the Revamp units, comprising of existing Fluid Catalytic Cracker (FCC) and Liquefied
Petroleum Gas (LPG) Treatment Units, a new Propylene Recovery Unit (PRU), a new
Polypropylene Unit (PP) and related Offsite and Utilities (OSBL facilities). These
Revamp units provide the required amount of propylene rich feedstock. The PRU
unit will recover propylene from propylene rich gas streams, while the PP unit will
convert propylene into polypropylene, the final product. In October 2020, the Board
Nayara Energy’s strategy includes a step-by of Directors approved the Execution Stage of the project.
step implementation of an asset development plan. Work on execution stage of Phase 1 project was kicked off in FY 2021. The EPC
In Phase-1, the Company aims to realize the full tendering process for the entire project has been initiated and completed. Despite
Covid-19 pandemic, the entire EPC bidding and evaluation process was conducted
potential of the refinery scheme by maximizing the
successfully with support from in-house IT infrastructure. Nayara Energy along
use of olefinic feedstock propylene, for converting it with its EPC Contractors’ teams are fully prepared to take on any challenge during
into polypropylene. In Phase 2, the Company plans execution stage.
to construct a world scale steam cracker that is Implementation of Phase - 2 investment opportunity would be a massive undertaking,
integrated with the refinery, and which produces a and your Company will be considering various partnership routes to share the risks and
the capex burden. Establishing partnerships would also give the Company the chance
profitable range of derivatives.
to have access to unique technologies and operational and marketing knowledge in
the petrochemicals business. The Company is carrying out a feasibility study which
incorporates the partnership related advantages. The intention is to begin the FEED
activities at the beginning of FY 2022. The Company has obtained environmental
clearance from Ministry of Environment Forest & Climate Change (“MoEF&CC”) for
the upcoming expansion of its Vadinar refinery and petrochemical complex.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

SAFETY FIRST
HEALTH, SAFETY AND
ENVIRONMENT (“HSE”) IS
OUR TOP PRIORITY.
Your Company strives to continuously improve its HSE performance. In the extraordinary times of the COVID-19 pandemic, the Company’s top priority
continues to ensure the safety of its employees and support to the communities. Your
The Company has established an integrated Health, Safety, Environment and Quality
Company has procured essential protective gear for all its employees and contract
(HSEQ) management system. The HSEQ Management System is in compliance with
workers and organised various COVID-19 awareness sessions. It also set up a 24/7
the ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 standards that further
COVID control room to assist people with special focus on their emotional well-being.
fortifies the effectiveness of its management systems. In the current financial year, the
Company has also been conferred with ISO 50001:2018 certification for its energy The Company has also received six awards from regulatory and industrial bodies,
management system. Your Company has also conducted a Process Safety Perception benchmarking its system performance with other industries operating in the same
Survey to gauge the Organizational Culture and Operational Discipline aspects. region. These bodies includes Director Industrial Safety & Health (DISH), Quality Circle
Forum of India (QCFI) and Confederation of Indian Industries (CII) among others. Some
The refinery safely completed the “Shutdown 2020” program, without any major
of the prestigious awards include “Shram Bhushan” issued by DISH for the individual
safety related incidents. The Company’s lost time injury (LTI) frequency rate is
contribution and excellent energy efficient unit for its energy management system.
observed at 0.073 as on March 31, 2021, which is 40% lower from the previous year.
Your Company’s Vadinar Refinery Site has achieved 4.65 LTI free million man-hours
as on March 31, 2021.

The Refinery also has a robust Emergency Response & Disaster Management Plan
NAYARA ENERGY FOLLOWS
in place. During the year under review, it conducted 18 mock-drills to check and
evaluate the effectiveness of its mitigations measures and found them all satisfactory.

4Rs
ISO 50001:2011 REDUCE THE RECOVER

for energy management system

ISO 9001:2015
for quality management system
TIFIE across the organisation
ER D REUSE RECYCLE
C

ISO 14001:2015
H SEQ

for qualifying for effective

STE

environment management Nayara Energy follows the ‘4Rs’ (Reduce, Reuse, Recycle & Recover) Principle in
A which most of the wastes are either recycled within the refinery or sent to registered
M

SY

N T
AGE
MEN recyclers for resource recovery. The refinery has continuous emission and effluent
ISO 45001:2018 quality monitoring system with advance analyzers and provides all the real-time data
to State Pollution Control Board (SPCB) & Central Pollution Control Board (CPCB). The
for promoting occupational Company is complying with the statutory requirements of SPCB as well as CPCB and
health and safety
MoEF&CC.

HSE continued to be a key priority for the marketing business. The interventions ranged
ISO 50001:2018 from employee and contractor training, self–assessment of retail outlets, to new HSE
for its energy management system. procedures and abiding by Covid-19 related safety guidelines and a variety of campaigns
through the year. Some of the key initiatives included certification of all 30 marketing
locations to internationally recognized and accepted standards of Quality (ISO 9001),
Environment (ISO 14001) and Occupational Health & Safety (ISO 45001).

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

FINANCIAL PERFORMANCE INFORMATION TECHNOLOGY

Revenue from operations were at ₹875,006 million for the financial year ended March 31, 2021, as
compared to ₹998,683 million for the financial year ended March 31, 2020. The decrease in revenue was
mainly due to decline in oil prices, lower demand due to prevailing Covid-19 pandemic and the reduced
throughput on account of 20 days planned refinery shutdown during the financial year.

Earnings before interest, tax, depreciation and amortization On September 15, 2020, your Company incorporated a wholly
(EBITDA) was lower by 42% to ₹37,281 million from ₹64,044 owned subsidiary company in Singapore by name ‘Nayara
million in the preceding financial year mainly on account of Energy Singapore Pte Limited’ (“NESPL”) for undertaking
lower product margins amidst prevailing COVID-19 Pandemic. trading, sourcing of crude oil, product offtake and other
financing activities. Further, Nayara Energy Global Limited, a
The Company earned a profit after tax (PAT) of ₹4,665 million
Mauritius based wholly owned subsidiary of the Company is
in FY 2021 against a PAT of ₹25,183 million in the preceding
under liquidation.
financial year. During FY 2021, Vadinar Oil Terminal Limited
(VOTL), a subsidiary of the Company, got merged with the There were no other changes in the subsidiary companies’
Company and therefore, the Company has restated the position during the financial year. The Company does not have
comparative financial information included in the standalone any associates.
financial statements to give effect of the adjustments arising
A report on the performance and financial position of each of
from the aforesaid merger.
the subsidiaries, in Form AOC -1, forms a part of this Annual
Considering the accumulated losses of previous years, the Report and hence is not repeated here for the sake of brevity.
Board of Directors has not recommended any dividend for the
The financial statements of these subsidiaries for the financial
financial year ended March 31, 2021. Further, no amounts are
year ended March 31, 2021, and other related information
proposed to be transferred to the General Reserve during the Your Company took up various initiatives by The Company’s futuristic vision and timely investments in
will be made available to any member of the Company / its
FY 2021. moving towards a greater degree of digitalisation digitalisation ensured that the business was unaffected and
subsidiary(ies), seeking such information at any point of time.
your Company was better prepared to manage the work-from-
The same is also available for inspection by any member at the of its processes. As part of its digital initiatives, the
Standalone and Consolidated Financial Statements home situations during the Covid-19 pandemic and subsequent
Company’s Registered Office/Corporate Office. Company has implemented cloud-based connected lockdowns.
The audited Standalone Financial Statements, prepared as per
plant services to analyse the plant’s performance
the Indian Accounting Standards (Ind AS) for the financial year Share Capital Seamless transition from ‘in-office work culture’ to a ‘Work-
data with proprietary models.
ended March 31, 2021, form part of this Annual Report. from-Anywhere’ was achieved with zero change management.
Pursuant to the Scheme of Amalgamation of VOTL with the
Through this approach, the Company was seamlessly able This has paved the way for future norms of working such as
The audited Consolidated Financial Statements of the Company, which became effective on December 14, 2020, the
to receive recommendations for optimizing its processes remote collaboration, optimization of office spaces and digital
Company, as required under Section 129 of the Companies authorized share capital of VOTL was combined with the authorized
from its process licensor. It was also able to enhance the business operations.
Act, 2013 (Act), also form part of this Annual Report. share capital of the Company. Accordingly, the authorised share
plant’s operational reliability and yield improvement in real-
capital of the Company stands increased to ₹180,006.8 million. Since September 2017, your Company has made strategic
time. The Digital Refinery Performance Monitoring System
Ownership There is no change in the issued, subscribed and the paid-up share technology investments such as modern networking, faster
(RPMS) Mobile application was custom designed, developed
Nayara Energy does not have any holding company. Rosneft capital of the Company during FY 2021. computing devices and digital resilience. These investments,
and deployed successfully during the year. This allowed
Singapore Pte. Limited, a subsidiary of PJSC Rosneft Oil as envisioned, have given us the edge in these testing times.
the Company to monitor the performance of all units, key
Company and Kesani Enterprises Company Limited, a Issue of Non-Convertible Debentures During the pandemic, our businesses have been running un-
performance indicators, margins, energy consumption and
consortium led by Trafigura Group and UCP Investment Group, As a consideration for acquiring shares held by the resident interrupted with zero downtime in all areas across the Company.
product quality on a real-time basis enabling quick corrective
hold 49.13% stake each, in the Company’s share capital. public shareholders of VOTL, Nayara Energy allotted 7,338,221 The testimony to our long-term technological commitment and
actions and measures to be taken as required.
Rated, Unlisted, Secured Non-Convertible Debentures absolute returns on our investments is that we had near 100%
Subsidiary Companies (“NCDs”) of the face value of ₹ 350 each on December 16, system availability with zero cyber breakout in FY 2021.
Pursuant to the Order passed by the Hon’ble National 2020. Since NCDs can be allotted only in electronic form, Nayara Energy has implemented a full-cycle digital
Company Law Tribunal approving a Scheme of Amalgamation the resident public shareholders of VOTL who were holding transformation of business functions including finance,
on November 13, 2020, Vadinar Oil Terminal Limited (“VOTL”), shares in physical form could not be allotted NCDs. NCDs in
respect to such shareholders were allotted to Axis Trustee
Seamless transition from in-office work procurement, marketing and EPS / IST, as we continue
a subsidiary of the Company got merged with Nayara Energy to leverage technology to improve performance and
Limited with effect from December 14, 2020 (close of business). Services Limited, the Trustee to Nayara Energy NCD Beneficial culture to a Work-from-Anywhere was achieved resilience of our business processes. We continue
Consequent to the aforesaid merger of VOTL with the
Owners Trust. All such holders of benefits of NCDs have been with zero change management. This has paved the to invest in cutting-edge technologies with large
requested to provide the details of their demat accounts along
Company, its shareholding in Coviva Energy Terminals Limited
with supporting documents to enable transfer of NCDs from
way for future norms of working such as remote virtual environments and enhanced fault-tolerant
capabilities. With such deliveries, our digital adoption
stood transferred to Nayara Energy Limited and accordingly,
the Trustee to their respective demat accounts. collaboration, optimization of office spaces and has substantially improved in FY 2021.
the entire share capital of Coviva Energy Terminals Limited is
now held by the Company.
digital business operations.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

PEOPLE
FY 2021 was an ‘Xtraordinary’ year which pushed Nayara Energy
to quickly adapt to the new normal. With ‘EXCEL’ values at the
core of people processes, your Company showcased resilience and
commitment towards wellbeing and engagement of its employees. A
suite of strategic initiatives were implemented across the organization
with focus on People.

Business Continuity & Support provided during Covid-19 Pandemic

To ensure business continuity and future proofing of critical roles, Nayara Energy put
in place a robust business continuity framework for all critical roles.

Your Company has undertaken various strong initiatives such as employee assistance
program, 24/7 counselling and doctor consultation support, awareness sessions,
RT-PCR tests for employees and their dependents, and hospitalization & insurance
support, among others, for all employees. These were backed with regular internal
communication updates providing information on the emerging COVID-19 situation
to address uncertainties. The offices in Mumbai and Vadinar were installed with
touchless devices with social distancing trackers. Comprehensive arrangements
and operating procedures were undertaken at the refinery to provide support to
all employees impacted by Covid-19. These were in the form of 24/7 emergency
support, relocation assistance, hospitalization support and sanitization among others.

Nayara Energy not only adopted the remote working model but also initiated a
transformation journey towards adopting a hybrid-working model with hot-desking
and due IT enablement as per role categorization.

SPIRIT Competencies bringing Nayara values to Life

Your Company has undertaken various STRATEGIC INGRAINING IMPROVEMENT

THINKING CAPABILITIES & LEARNING
strong initiatives such as employee assistance
program, 24/7 counselling and doctor consultation PEOPLE
LEADERSHIP
RESULT
ORIENTATION
TEAMWORK &
COLLABORATION
support, awareness sessions, RT-PCR tests
for employees and their dependents, and
hospitalization & insurance support, among others, During the year, the Company launched the SPIRIT competencies that were designed
from Nayara’s core Values. These competencies were cascaded into various HR
for all employees. processes such as hiring, learning & development, performance management
and careers. Along with systematic embedding of competencies in HR processes,
appropriate learning and change management support was provided to hiring
managers, other line managers and HR business partners to facilitate adoption.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

PEOPLE
Capability building and Leadership development
On the onset of remote-physical hybrid teams and to enable this transition, we
quickly adopted virtual learning and development platforms through rapid upskilling
programmes and micro learning based on emerging workforce requirements on
productivity and efficiency in remote working environment.

Career development programmes providing structured learning to enable

individuals transitioning to new roles, with focus on building managerial and
leadership capabilities.

Your Company launched Mentoring@Nayara – a one-on-one high-impact

mentoring program where select employee population benefited from the
experience and knowledge of leaders as mentors.

A robust learning management system and course library consisting of more than
4,000 on-demand courses and videos. This included choices of learning paths and
tailored class courses with in-built knowledge checks.

Your Company also intensified its leadership development initiatives with curated
individual development plans, virtual leadership laboratories for leadership
development cohorts and self-reflective talent-learning reviews.

Compensation and Benefits

Nayara Energy protected its employees, despite the pandemic
related industry and business performance, by ensuring timely
payment of salaries without pay cuts. Annual Performance
Linked Incentive for the performance year 2019 were paid on
time across the organisation. Additional insurance support was
extended to take care of COVID expenses for employees and
their family members.

POSH compliance
The Company has zero-tolerance towards any form of
harassment or discrimination. It has established a framework

4000 on-demand Employee Engagement of policies and processes to ensure a safe, harassment-free and
courses The findings from Nayara Energy’s first Gallup Employee Engagement Survey of 2019 an empowering work environment for all its employees.
were disseminated widely in 2020, with rigorous action plans across the oganization.
In accordance with ‘The Sexual Harassment at Workplace
A robust learning management Deep dive reflection workshops were conducted with leaders from businesses and
system and course library (Prevention, Prohibition and Redressal) Act, 2013’ [‘Prevention
functions, with engagement councils created to drive engagement at grass-root levels.
consisting of more than 4,000 of Sexual Harassment (POSH) Act’], the Company has set up
on-demand courses and videos. Some of the noteworthy engagement initiatives were virtual recognition programs, five Internal Committees in Mumbai, Vadinar, Noida, Kolkata
continuous performance management, virtual engagement sessions and HR business and Chennai which promote a safe working environment
partner-led one-on-one employee connects. Your Company also ensured that across the organization. There are regular sensitization sessions
employees stayed connected, especially those who were at the forefront of delivering conducted along with online mandatory modules implemented
essential services across the length and breadth of the country in sales and marketing for all employees.
and at the refinery site, through the employee connect initiatives of respective HR
During FY 2021, your Company has not received any complaints
business partners.
under the POSH guidelines.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

SUSTAINABLE DEVELOPMENT
OF COMMUNITIES
Strengthening Social responsibility commitments
Nayara Energy demonstrates deeper commitment and strategic
integration of social responsibilities as part of its corporate
structure. The Company incessantly works towards sustaining
its CSR legacy of inclusive development and being a responsible
“neighbour of choice” for the communities around our refinery
and depot.

The social initiatives nurtured and are in line with the Company’s
CSR policy, span across areas of Sustainable Livelihoods &
Environmental Sustainability, Education & Skill Development
and Health & Sanitation.

Below are the details of the programmes and the impacts that
they have had on the communities, inclusive of the social and
environmental fabric -

Sustainable Livelihoods and Environmental Sustainability Programme

Nayara Energy has been implementing long-term programmes to create sustainable livelihoods, empower local communities, as
well as improve their social infrastructure. Programmes related to farm and non-farm livelihoods, sustainable and customized
agricultural practices, animal husbandry initiatives and ones related to water sustenance form the backbone of the programme.
The flagship programme on livelihood is known as Gramsamruddhi and it has been bringing about positive and long term changes
into the communities, thereby living up to its nomenclature.

More than 11,000 lives were impacted through diverse initiatives on farm and non-farm livelihoods and initiatives related to
women empowerment and water sustenance in Vadinar and Wardha. More than 2,000 farmers provided with artificial insemination
services, thereby improving cattle health and breed quality. Other significant impacts of the programme can be seen below -

Improved
Your Company has constituted a Corporate Social Responsibility
Committee named as CSR and Sustainability Committee (“CSR
1.37MCM 0.41 MCM water used 369 female
calves born

Committee”). The Board of Directors, on the recommendation of the additional water storage water irrigation saved efficiency via reduction via breed improvement
CSR Committee, has adopted a CSR policy identifying the activities and recharge potential through micro irrigation/ of water usage in 116 practices, resulting in
created. soil moisture conservation. Hectare of land through asset creation worth
to be undertaken by the Company. micro-irrigation. ` 7.38 Million
The policy can be accessed on the Company’s website:
www.nayaraenergy.com/sustainability/csr-policy

The annual report on CSR containing the details of the CSR policy adopted by
the Company and other particulars specified in the Companies (Corporate Social 350 plus women
engaged
more
than 2,700 1,300 plus
Responsibility Policy) Rules, 2014 is annexed to this report as Annexure A. On account
in making 1.33 lakhs plus beneficiaries influenced Number of lives touched via mobile veterinary clinic and
of accumulated losses computed in accordance with the provisions of Section 198 of the
masks for Covid relief. through kitchen garden cattle health, thereby the farming community saving around
Act, the Company was not required to mandatorily spend any amount on CSR activities and crop demonstration ` 1.3 million, besides minimizing the loss of productivity.
during FY 2021. However, in line with the overall CSR strategy and commitments made practices.
to the Government of Gujarat at Vibrant Gujarat Summit in 2019, some of the flagship
projects of the Company were to be either augmented or initiated. Considering this,
the CSR Committee recommended to the Board to voluntarily spend an amount of

19.18 crore
INR
₹202.1 million as planned CSR expenditure for the financial year 2021. Of the allocated
amount, the Company spent an amount of ₹191.8 million, while ₹10.3 million remained
unspent. The reason for underspend was putting up infrastructure for developing
more
than 350farmers more
than 850 farmers 3,100 230 plus
farmers

CSR expenditure for the financial trained on sustainable deworming and mineral feed beneficiaries linked to multiple benefited via de-silting,
health centre and multi utility centre got delayed as Gram Panchayat could not donate
year 2021 agricultural practices. supplement practices leading government schemes via causeway repair, and bore
land due to litigation issues. Secondly monitoring, evaluation and external assessment to more than 850 farmers Haqdarshak well recharge.
of programmes could not be taken up in FY 2021. with healthier cattle.

46 47
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

SUSTAINABLE DEVELOPMENT
OF COMMUNITIES

Education and Skill Development Health and Sanitation

Nayara Energy’s sustained engagements have resulted in gainful livelihood Nayara Energy recognizes and acknowledges the fact that health is not just physical and ensures via multiple programmes that
opportunities for the communities, apart from fostering bonds that run beyond access to a holistic life is not a distant dream, but a reality within reach. While the health and sanitation initiatives ensure availability
benefactor and beneficiary equation. By linking the women and youth to education of clean drinking water, access to quality healthcare services (preventive and curative) to communities, Project Tushti, the flagship
and skill development initiatives and especially in the unprecedented times, the programme on and for malnutrition eradication implements measures to curb under-nutrition. Likewise, the sanitation programme
business has reinforced its commitment towards ensuring a safe and secure future encourages behavioural change and adoption of best practices around health and sanitation.
for the communities, region, and nation at large.

149 more
than 600 hours of classes 2,700 plus 2,501 50,000 Plus
No. of children profiled and monitored Pregnant & lactating mothers Number of consultations provided
number of students enrolled in the open conducted through the year, thus for growth under Project Tushti counselled on healthcare and nutrition through Nayara Energy’s community
schooling programme enabling the dropout students to take health centres and mobile outreach
their exams for qualifying Xth & XIIth initiative
standards.

more
than 2,700 beneficiaries 340 women 2,100 plus close
to 4,500 households close
to 25,000 lives
reached out to, via video broadcasting linked to micro-finance via 48 self-help number of adolescent girls engaged and reaping the benefits of cleaner surroundings positively impacted via the sanitation
thereby connecting them to online groups, generating ` 0.99 million, utilized counselled on anaemia, nutrition, and and habitats post the implementation of the program in 5 villages
learning across multiple income generation and reproductive health. sanitation programs
household related activities.

close
to 600 women more
than 1,600 FSMs 300 plus
children 800plus
diagnosed as malnourished through Number of beneficiaries reached out
trained on financial literacy, as well as trained under the flagship programme screening camps organised by the to via health kiosks and nutrition tele
basic and advanced stitching on Disaster Management with NIDM Company, thereby ensuring required counselling centres
medical attention and access

48 49
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

GOVERNANCE

Performance Evaluation of the Board, Chairman,

Committees, and Individual Directors
Formal performance evaluation of the Board, its Committees,
the Chairman and Individual Directors for FY 2021 was carried
out. The Independent Directors evaluated performance of
the Chairman, Non-Independent Directors and the Board.
Feedback from Individual Directors was sought based on a
structured questionnaire. The evaluation was reviewed by the
Nomination and Remuneration Committee and the Board of
Directors.

Key Managerial Personnel

Dr. Alois Virag joined the Company as “Chief Executive Officer”
with effect from April 1, 2021 to hold office for a period of 3
years. Mr. B. Anand ceased to be a “Chief Executive Officer”
with effect from March 31, 2021.

The following executives were designated as Key Managerial

Personnel under the Act:

Mr. Charles Anthony Fountain

Executive Chairman

Dr. Alois Virag

Chief Executive Officer (w.e.f. April 1, 2021)

Mr. B. Anand
Corporate Governance is a vital part of our business framework. It is designed to The Directors prepared the accounts for the year ended
Chief Executive Officer (up to March 31, 2021)
ensure compliance, transparency, and integrity in all areas of our work. March 31, 2021 on a ‘going concern’ basis

The Directors devised proper systems ensuring compliance Mr. Anup Vikal
Directors with the provisions of all applicable laws, and that such Chief Financial Officer
There was no change in the composition of the Board of Directors of the Company since reported systems were adequate and operating effectively
Mr. Prasad Panicker
in the last Board’s Report.
Director & Head of Refinery
The Company received declarations of independence, as stipulated under Section 149 (6) of the
Policy on Appointment of Directors and
Act, from the Independent Directors. Remuneration Mr. Mayank Bhargava
The Board has adopted a policy for appointment, remuneration, Company Secretary
Directors’ Responsibility Statement training, and evaluation of Directors and employees. The
policy, inter-alia, included the criteria and procedures for Audit Committee
Pursuant to the provisions of Section 134(3)(c) of the Act, it is hereby confirmed that:
selection, identification and appointment of Directors, During the year, the Audit Committee comprised of Mr. Deepak
In the preparation of the annual accounts for FY 2021, applicable accounting standards were criteria for appointment of Senior Management Executives, Kapoor (Independent Director) as its Chairman and Ms. Naina
followed along with proper explanation relating to material departures remuneration to Executive and Non-Executive Directors, Lal Kidwai (Independent Director) and Mr. Chin Hwee Tan as
The Directors selected accounting policies, and applied them consistently and made judgments training and performance evaluation of the Board, among its members. There was no change in the constitution of the
and estimates that were reasonable and prudent so as to give a true and fair view of the others, and other matters provided under Section 178(3) of the Audit Committee during FY 2021. During FY 2021, all the
Company’s state of affairs at the end of FY 2021 and of the profit and loss for the same period Act. The above policy is available on the Company’s website at recommendations of the Audit Committee were accepted by
https://www.nayaraenergy.com/investors/information. the Board.
The Directors took proper and sufficient care for maintaining adequate accounting records in
accordance with the provisions of the Act, to safeguard the Company’s assets, and prevent and
detect fraud and other irregularities

50 51
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

RISK MANAGEMENT

To deal with ever-changing risk landscape, Nayara acceptable and manageable levels. In the opinion of the Board, Such controls have been assessed during the year under VIGIL MECHANISM
Energy has a comprehensive and robust risk the Company has an adequate robust framework for identifying review taking into consideration the essential components The Ethics Code, which is fundamental to the values of Nayara
and mitigating all key risks that the Company is facing. of internal controls stated in the “Guidance Note on Audit of
management policy and framework that drives a risk Energy Limited, has been introduced to promote the highest
Internal Financial Controls over Financial Reporting” issued by standards of ethical conduct, professional excellence and
aware culture across the organization and ensures INTERNAL FINANCIAL CONTROLS “The Institute of Chartered Accountants of India”. The entity integrity.
all the risks are effectively identified and managed. Nayara Energy has in place a robust system and framework level policies include anti-fraud policies such as Ethics Code,
With the purpose to help Directors, Employees and Associates
The Company has constituted a Risk & HSE Committee which of Internal Financial Controls. This framework provides a Conflict of Interest, Confidentiality and Whistle Blower Policy
to recognize corrupt and unethical business practices and
regularly reviews the organization’s risk profile and keeps a reasonable assurance regarding the adequacy of operating and other policies (viz. organization structure, HR policies, IT
to steer themselves away from them, we introduced Anti-
track of all existing and potential risks. These risks are further effectiveness of controls with regard to financial reporting, security policies).
Corruption Policy. The policy will help us to create an honest
classified into ‘intolerable’, ‘critical’ and ‘moderate’ category operational and compliance risks. The framework ensures
During the year, controls were tested and no material weakness and transparent culture that permeates throughout the
depending upon probability of the occurrence and potential that the Company has policies and procedures for ensuring
in design and effectiveness were observed. Nonetheless, the organization and to achieve “zero tolerance” approach towards
impact. The Company has also developed a risk appetite orderly and efficient conduct of the business, safeguarding of
Company recognizes that any internal control framework, Bribery and Corruption.
statement which articulates the amount of risk the Company assets of the Company, prevention and detection of frauds,
no matter how well-designed, has inherent limitations and To maintain Ethical standards at highest level, the Company
accuracy and completeness of accounting records and timely
is willing to take in pursuit of its objectives and is measured in accordingly, regular audits and review processes ensure that
preparation of reliable financial information. The Company has encourages its employees and other stakeholders, who have
the form of a descriptive statement for various risk parameters. such systems are reinforced on an ongoing basis.
devised appropriate systems and framework including proper concerns about the actual or suspected improper conduct or
Based on the appetite as finalized under risk appetite statement,
delegation of authority, effective IT systems aligned to business behavior such as demanding or accepting bribes, dishonest,
tolerances are defined for the identified risk parameters as part Governance & Control Framework Implementation
requirements, risk based internal audits, risk management abuse of powers, corruption, fraud, theft, embezzlement,
of ‘Risk Assessment Criteria’ to facilitate an objective impact
framework and whistle-blower mechanism. The Company has During the year, the Company also implemented Governance misuse of funds, etc. to come forward and express these
assessment.
also developed and implemented a framework for ensuring & Control Framework in critical areas of the Company like concerns without fear of punishment or unfair treatment. The
The Company effectively addresses its key risks by internal controls over financial reporting. This framework Refinery, IST, EPS and Marketing. This involved self-certification Whistle-Blower Policy was also implemented in Nayara Energy.
implementing appropriate and adequate risk response plans includes a risk and control matrix covering entity level controls, of design of the operational and financial controls in their
and/or internal control measures that brings down the risks to process and operating level controls and IT general controls. respective business areas by the Business Head/ Finance Head.

52 53
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

AUDITORS AND AUDIT DISCLOSURES

Statutory Auditor Compliance with Secretarial Standard Particulars of Loans given, Investments made and General Disclosures
The reports given by M/s. S. R. Batliboi & Co. LLP, Statutory Your Company fully complied with the provisions of Secretarial Guarantees given and Security provided Your Directors state that for the year ended March 31, 2021,
Auditors, on the Company’s standalone and consolidated Standards 1 (SS 1) on Board/Committee meetings and Particulars of investments made are provided in the standalone no disclosure was required in respect of the following items
financial statements for FY 2021, form a part of this Annual Secretarial Standards 2 (SS 2) on the General meeting of financial statements (please refer Note no. 7 of the standalone and accordingly confirm as under:
Report. There were no qualifications, reservations, adverse Shareholders, issued by the Institute of Company Secretaries financial statements). Since Nayara Energy belongs to the
The Executive Directors did not receive any remuneration
remarks, or disclaimers given by the Auditors in their reports. of India and approved by the Central Government, pursuant to petroleum sector and operates ‘infrastructure facilities’ as
from the subsidiary companies
The notes on financial statements, referred to in the Auditors’ Section 118 of the Companies Act, 2013. defined under Schedule VI of the Act, it is not required to
Report, are self-explanatory and do not call for any further comply with provisions relating to making of investment, The Company revised neither the financial statements nor
comments. Number of meetings of the Board loans, giving guarantees, or providing security as prescribed in the report of Board of Directors
During the FY 2021, the Board of Directors met six times i.e. Section 186 of the Act. The Company did not issue equity shares with differential
Cost Auditor April 30, 2020, June 30, 2020, October 22, 2020, October rights as to dividend, voting, or otherwise or sweat equity
In accordance with the provisions of Section 148 of the Act, the 27, 2020, January 19, 2021 and February 3, 2021. All these Conservation of Energy, Technology Absorption, shares
Company maintained cost records as specified by the Central meetings were well attended by the directors. Foreign Exchange Earnings, and Outgo
Government.
No significant or material orders were passed by the
The particulars relating conservation of energy, technology
Regulators or Courts or Tribunals, which impact the going
Particulars of Contracts or Arrangements with absorption, and foreign exchange earnings and outgo, as
The Cost Audit Report for the financial year ended March 31, concern status or operations in future
2021, will be filed with the Ministry of Corporate Affairs within
Related Parties required to be disclosed under the Act, are provided as
the prescribed time period. The details of contracts entered with related parties, during Annexure – D to this Report. The Company did not buy back any shares during the year
the year, in compliance with the provisions of Section 188 No instance of fraud was reported to either Audit Committee
Secretarial Auditor of the Act, are specified in Form AOC 2 and enclosed as Annual Return or the Board of Directors
Annexure – C. The details of material Related Party Transactions The Annual Return for the financial year ended March 31,
The Secretarial Audit Report, issued by M/s. Parikh Parekh &
Associates, Practicing Company Secretaries, for the year ended
entered during the year, by the Company are also required to 2020, filed with the Registrar of Companies, after conclusion of ACKNOWLEDGEMENT
be included in the Form AOC 2. Though the Act has not defined the 30th Annual General Meeting, held on September 17, 2020,
March 31, 2021, is attached as Annexure - B to this Report. The Board expresses its sincere appreciation and gratitude
the criteria for “Material Related Party Transactions” and the is placed on the Company website and can be accessed at
The Secretarial Audit Report does not contain any qualification, to Financial Institutions, Banks, Customers, Suppliers, and
Company is no more listed on Stock Exchanges, it continues https://www.nayaraenergy.com/investors/information.
reservation, or adverse remark. Investors of the Company, for their continual support. We also
to follow the criteria for determining the material related
Further, the Annual Return of the Company as on March 31, value the ongoing cooperation extended to the Company by
party transaction prescribed in the SEBI (Listing Obligations
2021 is available on the Company’s website and can be accessed the Government of India, Gujarat and other state governments
and Disclosure Requirements), Regulations 2015. No material
at https://www.nayaraenergy.com/investors/information. and various government agencies/departments.
related party transaction was entered into by the Company
during the financial year 2021. In these challenging times resulting from COVID-19 pandemic
Fixed Deposits the Board expresses regret over the loss of life and difficulties
Related party disclosures, as required by Ind AS 24, have been The Company did not accept any deposits from the public in being faced by people. The Company salutes all the people
made in Note no. 44 and 46 to the standalone and consolidated accordance with the provisions of Sections 73 to 76 of the who have risked their life and safety to fight this pandemic and
financial statements of the Company, respectively. Act and the Rules framed thereunder. Accordingly, the details helped fellow citizens in this hour of need.
required to be reported under Rule 8(5) of the Companies
The Board also recognizes all team members for their efforts
(Accounts) Rules, 2014, were not applicable.
behind our results and maintaining resilience during these
difficult times. Their talent, passion and agility has made the
Company sustain its performance year-on-year.

For and on behalf of the Board of Directors

Date: July 1, 2021 Charles Anthony Fountain

Place: Sussex, United Kingdom Executive Chairman
(DIN - 07719852)

54 55
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ANNEXURE A
Annual Report on CSR Activities 5. Details of the amount available for set off in 6. Average net profit of the company as per sec-
pursuance of sub-rule (3) of rule 7 of the Com- tion 135(5).
1. Brief outline on CSR Policy of the Company – role is to lay the path that is collaborative, progressive,
inclusive and sustainable through our CSR programs. We panies (Corporate Social Responsibility Policy) On account of accumulated losses in the preceding three
A brief outline of the CSR Policy of the Company is as
also believe that technology and innovations can hasten Rules, 2014 and amount required for set off financial years, the Company did not have average net
under:
the process of change and endeavour to support new and for the financial year, if any profits for the last three financial years as computed under
innovative models of development. Section 198 of the Companies Act, 2013. The average net
CSR Vision Sl. Financial Amount available Amount loss of the Company for preceding three financial years
The Company’s vision is to be among the most respected No. Year for set-off required to be
CSR Objectives calculated under Section 198 of the Companies Act, 2013
organizations in India by doing what is right and rightful from preceding set-off for the
The objective of the CSR policy is to guide the planning, is ` 6341.7 million.
for the communities and nation at large. financial years financial year, if
implementation and oversight mechanism of the CSR (in `) any (in `) 7. (a) Two percent of average net profit of the company
CSR Mission programs of the Company. 1 2019-20 7,81,81,859 Nil # as per section 135(5) – Not Applicable since the
Total 7,81,81,859 average net profits for last three financial years were
Aspires to build a symbiotic relationship with its
#
The Company was not required to mandatorily spend any negative.
stakeholders and intends to make them equal partners in
amount on CSR activities during FY 2020-21. Accordingly, it was (b) Surplus arising out of the CSR projects or programmes
the process of nation building. We firmly believe that our not required to set off any amount in pursuance of sub-rule (3) of
Rule 7 of the Companies (Corporate Social Responsibility Policy) or activities of the previous financial years. - Nil
Rules, 2014, as amended from time to time, during FY 2020-21
2. Composition of CSR Committee: from the amount available for set-off.
(c) Amount required to be set off for the financial year, if
The Board of Directors, on October 22, 2020, reconstituted the CSR Committee and renamed it as “CSR and Sustainability any - Nil
Committee”. As on March 31, 2021, the CSR and Sustainability Committee comprised of Ms. Naina Lal Kidwai as Chairperson, (d) Total CSR obligation for the financial year (7a+7b-
Mr. Krzysztof Zielicki and Ms. Victoria Cunningham as its members. 7c). – Nil

Sl. Name of Director Designation / Nature of Number of meetings of Number of meetings of

No. Directorship CSR Committee held CSR Committee attended
during the year during the year 8. (a) CSR amount spent or unspent for the financial year:
1 Ms. Naina Lal Kidwai Independent Director and 3 3 Total Amount Spent for the Financial Year. (in `) Amount Unspent (in `) ` 1,03,26,437.00
Chairperson of the Committee
Total Amount transferred to Amount transferred to any fund
2 Mr. Tony Fountain$ Executive Chairman, 2 2 Unspent CSR Account as per specified under Schedule VII as per
Member of the Committee section 135(6). second proviso to section 135(5).
3 Mr. Jonathan Kollek$ Non-Executive Director, 2 2 Amount. Date of Name of Amount. Date of
Member of the Committee transfer. the Fund transfer.
19,17,73,563.00 1,03,26,437.00 30.04.2021 NA Nil NA
4 Mr. Krzysztof Zielicki Non-Executive Director, 3 3
Member of the Committee
(b) Details of CSR amount spent against ongoing projects for the financial year:,
5 Mr. Alexander Romanov$ Non-Executive Director, 2 0
Member of the Committee Sl. Name of the Item from Local area Location of Project Amount Amount Amount Mode of Mode of
No. Project. the list of (Yes/No) the project. duration. allocated for spent in transferred to Implementation - Implementation
6 Ms. Victoria Cunningham# Non-Executive Director, 1 1 activities in the project the current Unspent CSR Direct (Yes/No). - Through
Schedule VII State and (in ` in financial Account for Implementing
Member of the Committee to the Act. District Million) Year the project as Agency
(in ` in per Section
$
ceased to be member of the Committee w.e.f. October 22, 2020. Million) 135(6) (in ` in (Mode and CSR
Million) Registration
#
appointed as member of the Committee w.e.f. October 22, 2020. Number)
1 Comprehensive Eradicating Yes Jamnagar & 36 months 23.6 23.64 (0.04) No Through
Health Program, hunger, Devbhumi Implementing
TB, Mobile poverty and Dwarka, Agency
3. The web-link where Composition of CSR com- The CSR projects approved by the Board are available at Medical Unit,
Ambulance
malnutrition Gujarat CSR00000901-
(Helpage India )
mittee, CSR Policy and CSR projects approved the web-link: https://www.nayaraenergy.com/storage/ 2 Mobile Medical Eradicating Yes Wardha, 36 months 3.70 3.31 0.39 No Through
Unit hunger, Maharashtra Implementing
by the board are disclosed on the website of csr-annual-action-plan/CSR%20Annual%20Action%20 poverty and Agency
Plan%20FY%2021-22_vF.pdf malnutrition CSR00004347
the company. (DMIMS- AVBRH)
3 Tushti Project Eradicating Yes Devbhumi 36 months 20.00 20.00 0.001 No Through
The composition of CSR and Sustainability
4. The details of Impact assessment of CSR proj- hunger,
poverty and
Dwarka,
Gujarat
Implementing
Agency -
Committee is available at the web-link:
ects carried out in pursuance of sub-rule (3) malnutrition CSR00000722
(JSI India R&T
https://www.nayaraenergy.com/board/board-committee
of rule 8 of the Companies (Corporate Social Foundation)
4 Solid Waste Eradicating Yes Jamnagar & 36 months 5.00 4.99 0.002 No Through
The CSR policy is available at the web link Responsibility Policy) Rules, 2014. Collection and hunger, Devbhumi Implementing
Disposal poverty and Dwarka, Agency -
https://www.nayaraenergy.com/sustainability/csr-policy
Not applicable for financial year under review. malnutrition Gujarat CSR00001810
(Lt J V Nariya
Education &
Charitable Trust)

56 57
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ANNEXURE A
Sl. Name of the Item from Local area Location of Project Amount Amount Amount Mode of Mode of (d) Amount spent in Administrative Overheads: ` 0.54 Million
No. Project. the list of (Yes/No) the project. duration. allocated for spent in transferred to Implementation - Implementation
activities in the project the current Unspent CSR Direct (Yes/No). - Through (e) Amount spent on Impact Assessment, if applicable - Nil
Schedule VII State and (in ` in financial Account for Implementing
District
to the Act. Million) Year the project as Agency (f) Total amount spent for the Financial Year (8b+8c+8d+8e) – ` 191.77 Million
(in ` in per Section
Million) 135(6) (in ` in (Mode and CSR
Million) Registration (g) Excess amount for set off, if any - ` 191.77 Million
Number)
5 Mainstreaming Promotion Yes Jamnagar & 36 months 1.50 1.14 0.36 Yes Direct Sl. Particulars Amount (in `)
of drop out of education, Devbhumi No.
students in Std. including Dwarka,
10th & 12th special Gujarat i. Two percent of average net profit of the company as per section 135(5) Nil
education and
vocation skills ii. Total amount spent for the Financial Year 19,17,73,563.00
6 School support Promotion Yes Wardha, 15 months 4.50 1.36 3.14 Yes Direct
program in of education, Maharashtra
iii. Excess amount spent for the financial year [(ii)-(i)] 19,17,73,563.00
Wardha School including
special
iv. Surplus arising out of the CSR projects or programmes or activities of the Nil
education and previous financial years, if any
vocation skills
7 Livelihood Eradicating Yes Jamnagar & 36 months 60.00 56.48 3.52 No Through v. Amount available for set off in succeeding financial years [(iii)-(iv)] 19,17,73,563.00
Project (WRD, hunger, Devbhumi Implementing
Smart Agri. AH,
WE)
poverty and
malnutrition
Dwarka,
Gujarat
Agency -
CSR00000259
9. (a) Details of Unspent CSR amount for the preceding three financial years:
(BISLD)
Sl. Preceding Amount transferred to Amount spent Amount transferred to any fund Amount remaining to
8 Sustainable Eradicating Yes Wardha, 36 months 1.80 1.61 0.19 No Through
No. Financial Year. Unspent CSR Account under in the reporting specified under Schedule VII as per be spent in succeeding
Livelihoods hunger, Maharashtra Years Implementing
(Wardha) poverty and Agency - section 135 (6) (in `) Financial Year section 135(6), if any. financial years. (in `)
malnutrition CSR00000259 (in `).
(BISLD) Name of Amount Date of
9 Construction Eradicating Yes Devbhumi 36 months 10.00# - 10.00 Yes NA the Fund (in `). transfer.
of Health & hunger, Dwarka,
Recreation poverty and Gujarat 1 2019-20 Nil 7,81,81,859 Nil Nil Nil Nil
Centre at malnutrition
Jhakhar 2 2018-19 Nil 8,97,26,739 Nil Nil Nil Nil
10 *
Vocational Promotion Yes Jamnagar & 48 months 16.50# 5.00 11.50 No Through
3 2017-18 Nil 13,13,98,000 Nil Nil Nil Nil
Education and of education, Devbhumi Implementing
soft skill in including Dwarka, Agency
schools special Gujarat CSR00001423 Note: No amount was required to be transferred to unspent CSR account or Fund specified in Schedule VII as the provision was introduced during the
education and (CSR Trust for financial year 2020-21 by amendments in the Companies (Corporate Social Responsibility) Policy Rules, 2014.
vocation skills SDGs In India)
11 *Plastic Ensuring Yes Jamnagar & 48 months 40.00 44.94 (4.94) No Through (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):
Recycling environmental Devbhumi Implementing
sustainability, Dwarka, Agency Sl. Project Name of the Project Financial Project Total amount Amount spent on Cumulative amount Status of
ecological Gujarat CSR00001423
balance, (CSR Trust for
No. ID. Year in duration allocated for the project in the spent at the end of the project -
natural SDGs In India) which the the project reporting Financial reporting Financial Completed /
resources project was (` in Millions) Year (` in Millions) Year (` in Millions) Ongoing.
conservation commenced
186.60 162.48 24.12 1 - Tushti Project 2019-20 36 months 60.54 20.00 25.21 Ongoing
2 - Solid Waste 2017-18 36 months 15.00 5.00 13.27 Completed
Note: * Project was initiated before promulgation of the Companies (Corporate Social Responsibility Policy) Rules, 2021. Collection and
Disposal
(c) Details of CSR amount spent against other than ongoing projects for the financial year 3 - Livelihood Project 2018-19 36 months 128.40 56.48 123.53 Ongoing
(WRD, Smart Agri.
Sl. Name of the Project. Item from the list of Local area Location of Amount Mode of Mode of AH, WE)
No. activities in Schedule VII to (Yes/No). the project. spent Implementation - Implementation
the Act. State and for the Direct (Yes/No). - Through 4 - Vocational Education 2019-20 48 months 149.98 5.00 5.00 Ongoing
District project Implementing and soft skill in
(in ` in Agency schools
Million) (Mode and CSR
Registration 5 - Plastic Recycling 2019-20 48 months 150.00 44.94 44.94 Ongoing
Number) Total 503.91 131.42 211.96
1 Installation of Hand Washing Eradicating hunger, poverty Yes Jamnagar & 20.00# Yes
Station and malnutrition Devbhumi
Dwarka, 10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created
Gujarat
2 Small Grants (Covid19 / Rural Development Projects No Jamnagar & 8.75 No Through or acquired through CSR spent in the financial year
Infrastructure Development / Support towards fight Devbhumi Implementing
/ Rural Development against Corona Virus / Other Dwarka, Agency @ (Asset-wise details).
Projects Development Projects Gujarat and
New Delhi
(a) Date of creation or acquisition of the capital asset(s). Nil
28.75
(b) Amount of CSR spent for creation or acquisition of capital asset. Nil
Note: # Budget item was reallocated
@ Agencies : ITOWE Development Foundation, Indian Institute of Road Trafic Education, Ajay Medical Agency, FICCI, Niyati Enterprise, Ketan Corporation, Simply (c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address
Suparnaa Media Network, Western Surgical, Madhuram Enterprise, Maruti Sales Corporation, Pioneer IT Solutions Pvt. Ltd, Amar Chitra Katha Pvt Ltd
etc. Nil

(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).
Nil

58 59
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ANNEXURE A ANNEXURE B
11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as FORM No. MR-3
per section 135(5).
SECRETARIAL AUDIT REPORT
Based on the average net profits of preceding three financial years, the Company was not required to spend any amount of
CSR activities during FY 2020-21. However, considering Company’s corporate ethos and commitments to contributing to FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2021
the community and society in which it operates, the Company had voluntarily approved an amount of ` 202.1 million to be (Pursuant to Section 204 (1) of the Companies Act, 2013 and rule No. 9 of the Companies
spent on CSR activities during FY 2020-21. The Company was able to spend an amount of ` 191.8 million and an amount of (Appointment and Remuneration of Managerial Personnel) Rules, 2014)
` 10.3 million remained unspent. The reasons for shortfall in spent have been explained in the Board’s report.
To,
For and on behalf of the CSR and Sustainability Committee The Members,
NAYARA ENERGY LIMITED

Date: July 1, 2021 Dr. Alois Virag Naina Lal Kidwai We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by Nayara Energy Limited (hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided
Chief Executive Officer (DIN:00017806)
us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Mumbai, India Chairperson of the CSR and Sustainability Committee
New Delhi, India Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by
the Company, the information provided by the Company, its officers, agents and authorised representatives during the conduct of
secretarial audit, the explanations and clarifications given to us and the representations made by the Management and considering
the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India warranted due to the
spread of the COVID-19 pandemic, we hereby report that in our opinion, the Company has, during the audit period covering
the financial year ended on March 31, 2021 generally complied with the statutory provisions listed hereunder and also that
the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the
reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained
by the Company for the financial year ended on 31st March, 2021 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iii) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial Borrowings;

(iv) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (Not
applicable to the Company during the audit period)

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (Not applicable to the
Company during the audit period)

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and
amendments from time to time; (Not applicable to the Company during the audit period)

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the
Company during the audit period)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,2008; (Not applicable to
the Company during the audit period)

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)Regulations, 1993 regarding
the Companies Act and dealing with client; (Not applicable to the Company during the audit period)

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the
Company during the audit period) and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company
during the audit period)

60 61
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ANNEXURE B ANNEXURE A

(v) Other laws applicable specifically to the Company namely: To,

1. Petroleum Act, 1934 and rules made thereunder; The Members
NAYARA ENERGY LIMITED
2. Merchant Shipping Act, 1958 and Rules made thereunder; and
3. Essential Commodity Act, 1955 and relevant orders Our report of even date is to be read along with this letter.
4. Explosives Act, 1884 and rules made thereunder 1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express
5. Gas Cylinders Rules, 2006 an opinion on these secretarial records based on our audit.

6. Static & Mobile Pressure Vessels (Unfired) Rules, 1981: 2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness
7. The Petroleum and Natural Gas Regulatory Board Act, 2006 of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in
Secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.
We have also examined compliance with the applicable clauses of the following:
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
(i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings.
4. Where-ever required, we have obtained the Management representation about the Compliance of laws, rules and regulations
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
and happening of events etc.
standards etc. mentioned above.
5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
We further report that:
management. Our examination was limited to the verification of procedure on test basis.
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the
with which the management has conducted the affairs of the Company.
period under review were carried out in compliance with the provisions of the Act.

Adequate notice was given to all Directors to schedule the Board Meetings. The agenda and detailed notes on agenda were For Parikh Parekh & Associates
sent at least seven days in advance other than those held at short notice, and a system exists for seeking and obtaining further Company Secretaries
information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Signature:
Decisions at the Board Meetings were taken unanimously. P. N. Parikh
We further report that there are adequate systems and processes in the Company commensurate with the size and operations Partner
of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. FCS No: 327 CP No: 1228
Place: Mumbai UDIN: F000327C000564440
We further report that during the audit period the Company had following events which had bearing on the Company’s
Date : 01.07.2021
affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc.:

1. Vadinar Oil Terminal Limited (“VOTL”), a subsidiary of the Company got amalgamated with Nayara Energy Limited w.e.f.
December 14, 2020 pursuant to the Order passed by the Hon’ble National Company Law Tribunal, Ahmedabad bench
approving the Scheme of Amalgamation (“Scheme”) of VOTL with the Company. Pursuant to the Scheme, the Company
had, on December 16, 2020, issued and allotted 7,338,221 Rated, Unlisted, Secured Non-Convertible Debentures
(“NCDs”) of the face value of ₹350 each to the resident public shareholders of Vadinar Oil Terminal Limited.

For Parikh Parekh & Associates

Company Secretaries

Signature:
P. N. Parikh
Partner
FCS No: 327 CP No: 1228
Place: Mumbai UDIN: F000327C000564440
Date : 01.07.2021
This Report is to be read with our letter of even date which is annexed as Annexure A and Forms an integral part of this report.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

ANNEXURE C ANNEXURE D
Form No. AOC 2 A. CONSERVATION OF ENERGY
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014) Energy conservation, efficient operation and minimising operating expenses is always a greater priority to refinery to earn
more GRM. Refinery always keeps energy conservation as highest priority and continuously tries to implement various energy
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub- minimization schemes and improve furnaces efficiency.
section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto
Nayara Energy Limited demonstrates energy conversion and optimization at national level on sustained basis. Nayara Energy
1. Details of contracts or arrangements or transactions not at arm’s length basis – Nil received two prestigious awards “Excellent Energy Efficient Unit” and “National Energy Leader” for the best performance in
2. Details of material contracts or arrangement or transactions at arm’s length basis 2020-21 at National Energy Efficiency Summit held by CII Hyderabad.

Following were the transactions undertaken by the Company during financial year 2020–21: Energy Management system (ENMS) Standard transition from 50001:2011 to 50001:2018 and has received ISO-50001-
2018 certification which is valid up to May 2023.
Name(s) of the Nature of Duration of Salient terms of the contracts or arrangements or Date(s) of Amount
related party contracts / the contracts / transactions including the value, if any approval by paid as Comprehensive energy audit of refinery complex was completed in December 2020 and the recommendations are being
and nature of arrangements arrangements / the Board, advances,
relationship / transactions transactions if any if any studied for implementation.
United Capital Extension of Up to July 23, UCP Russia to provide specialized services in connection October Nil Energy conservation team is steadily monitoring energy performance and focusing on identifying opportunities and converting
Partners Advisory Infrastructure 2021 with investment, design and implementation of various 22, 2020
LLC (“UCP Russia”) Consultancy infrastructure projects refinery expansion and setting up them into schemes to reduce energy consumption at the Refinery.
Nature of Agreement downstream units for an annual fees of USD 24,75,000
(for refinery Energy conservation initiatives contributed to reduce significant total energy consumption of ~ 17.0 Gcal/hr for this year.
Relationship: UCP
Russia is related to expansion
Some of major initiatives to minimize energy cost during this period are as follows:
UCP PE Investments project)
Limited, Cyprus for availing 1. FCCU Feed V/S slurry third exchanger commissioned which resulted in preheat improvement.
(“UCP Cyprus”). advisory and
UCP Cyprus holds consultancy This is appearing in last year Board’s Report and hence deleted.
49.86% shareholding services
of Kesani Enterprises 2. Drive to arrest all steam leaks and installation/repair of many steam traps resulted in 26 MT of steam savings.
Company Limited,
3. Energy saving on Utility water pump impeller trimming.
Cyprus, (“Kesani”)
and Kesani holds
(I) Steps taken for utilizing the Alternate Sources of Energy
49.13% of the
paid up equity Feasibility study began for installation of 100 MWH solar power plant.
share capital of the
Company (II) The capital investment on energy conservation equipment
Energopole SA, Master Crude Initial term up to Under MCSPO Agreement, ENP would from time to October 22, Nil
Switzerland (“ENP”) Oil Supply August 14, 2027. time, be able to offer to supply/offtake the crude to / 2020
During the financial year, the Company made investment of ₹22 Million on energy conservation equipment.
and Products products from the Company at market price and also
Nature of Automatic
Offtake
Relationship: Rosneft Agreement extension by
provide certain services in lieu of a fee to the Company, B. TECHNOLOGY ABSORPTION
including but not limited to provide assessments of market
Singapore Pte. (“MCSPO one year on the differentials and availability of crudes/products to assist (I) The efforts made towards technology absorption
Limited, a wholly Agreement”) expiry of the the Company with a price-set, explore opportunities to
owned subsidiary Initial Term / Nil during FY 2020-21.
to import accept/provide delivery/supply of new, blended and non-
of PJSC Rosneft Oil crude from each anniversary standard grades of crude/products at/from the refinery
Company, holds until terminated and any other services as may be desired by the Company (II) The benefits derived like project improvement, cost reduction, project development or import substitution
and supply
49.13% in the petroleum in line with the MCSPO Agreement. Our R&D center at the Refinery continuously tries to address critical issues associated with different crude blends.
share capital of the products to
Company and is a The monetary value of the services to be availed and Routine monitoring of prediction of fouling potential and compatibility of various crude blends before processing at
ENP and also
related party of the avail certain the transactions to be undertaken pursuant to the refinery has resulted in smooth operation of crude distillation units of our refinery. Certain high viscous and pour point
Company pursuant services from MCSPO Agreement cannot be ascertained. The Company
to provisions of anticipates to source crude and export finished products
crudes were blended and subjected to compatibility study so to establish their stability; based on which various blended
ENP.
section 2(76) of estimated at up to ` 561,740 million and ` 306,620 crudes are shipped.
the Companies million respectively on annual basis. Fees for above
Act, 2013. ENP specified services for a year is estimated at ` 690 million. Major R&D activities carried during the year were as follows:
is also a 100% The monetary value for FY 2020-21 and in subsequent
a) Test method developed for measurement of asphaltenes in crude oil and residue samples.
owned subsidiary years is however subject to throughput, actual imports
of PJSC Rosneft / exports, the business plan and the prevailing prices of
b) Process developed to separate water and sediments from slop oil.
Oil Company and crude and products in the international market apart from
therefore a co- the extent to which ENP actually supplies or offtakes the c) Method developed to estimate petcoke Sulphur from crude oil.
subsidiary of Rosneft barrels to / from the Company.
Singapore Pte Ltd. The benefits expected to derive from the above R&D activities are:

For and on behalf of the Board of Directors a) The test method developed by Nayara Energy research & development team using spectroscopic technique is
novel hence applied for patent and having many advantages over gravimetric method like simple in use, high
precision, consume less chemicals, cost effective, reduce HSEF risk, short testing time (2 hrs) and wider range
Date: July 1, 2021 Charles Anthony Fountain
of measurement. Test method implemented for internal use and we are anticipating that method will be highly
Place: Sussex, United Kingdom Executive Chairman
(DIN - 07719852) useful globally for petroleum exploration & refining industries, testing laboratories, research institutes, academic
institutes.

64 65
 NAYARA ENERGY LIMITED
ANNUAL REPORT 2020-21

ANNEXURE D
b) The process developed to separate water and sediments from slop oil by Nayara R&D team is novel and easy to
implement in the field hence applied for patent. Nayara R&D team has verified performance up to pilot scale and
shortly going to establish large scale process. The process will reduce slop oil quantity and improve its quality hence
will boost GRM.

c) Developed method is unique and will help to estimate petcoke Sulphur from crude oil. The method is under
verification with EPS and will be highly useful to control petcoke Sulphur within acceptable limit by proper blending
of crude oil. The method will help to avoid unplanned high Sulphur in petcoke and related petcoke evacuation
problems.

(III) In case of imported technology (imported during the last three years reckoned from the beginning of the financial
year)-
(a) The details of technology imported;
1. Naphtha Upgradation: NHT Unit licensed by M/s Axens was revamped during 2017-18 to process additional
naphtha to match the feed requirement of CCR and ISOM revamp cases and technology was fully absorbed.
ISOM Unit licensed by M/s UOP was revamped during 2017-18 to increase the unit capacity to maximize MS
production and technology is fully absorbed. CCR unit (Revamp) licensed by M/s Axens was revamped during
2018-19 to increase the capacity to maximize MS production. Technology was absorbed fully. These three
revamps helped to upgrade low value additional naphtha into high value MS product. Required modifications
were carried out to improve the reliability of units.

2. High Sulfur Crude: In order to improve our refinery margins, refinery started increasing sulfur content of
crude which are relatively cheaper. In order to process this additional sulfur one more Sulphur Recovery Unit
– 2 (SRU-2) licensed by M/s Jacobs was commissioned during 2018-19 and the technology has been fully
absorbed.

(b) The year of import;

• NHT Revamp – 2017-18
• CCR Revamp – 2018-19
• Sulphur Recovery Unit – 2 (SRU-2) – 2018-19

(c) Whether the technology been fully absorbed;

Yes, the technology was fully absorbed.

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof;
Not Applicable

(IV) Expenditure on R & D

• Recurring: ₹ 10.8 million
• Capital: ₹ 1.95 million
• Total R & D expenditure as a percentage of total turnover – Negligible

C. Foreign Exchange Earning and Outgo:

During the financial year, the Company earned foreign exchange of ₹ 266,169 million while foreign exchange outgo was ₹
479,361 million.

For and on behalf of the Board of Directors

Date: July 1, 2021 Charles Anthony Fountain

Place: Sussex, United Kingdom Executive Chairman
(DIN - 07719852)

66
 STANDALONE
FINANCIAL
STATEMENTS

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Independent Auditor’s Report Independent Auditor’s Report (Contd.)

To the Members of Nayara Energy Limited Our opinion on the standalone financial statements does not Auditor’s Responsibilities for the Audit of the audit evidence obtained up to the date of our auditor’s
cover the other information and we do not express any form of Standalone Financial Statements report. However, future events or conditions may cause
Report on the Audit of the Standalone Financial assurance conclusion thereon. the Company to cease to continue as a going concern.
Our objectives are to obtain reasonable assurance about
Statements In connection with our audit of the standalone financial whether the standalone financial statements as a whole are free • Evaluate the overall presentation, structure and content
Opinion statements, our responsibility is to read the other information from material misstatement, whether due to fraud or error, and of the standalone financial statements, including the
We have audited the accompanying standalone financial and, in doing so, consider whether such other information is to issue an auditor’s report that includes our opinion. Reasonable disclosures, and whether the standalone financial
statements of Nayara Energy Limited (“the Company”), materially inconsistent with the financial statements or our assurance is a high level of assurance, but is not a guarantee that statements represent the underlying transactions and
which comprise the Balance sheet as at March 31, 2021, knowledge obtained in the audit or otherwise appears to be an audit conducted in accordance with SAs will always detect a events in a manner that achieves fair presentation.
the Statement of Profit and Loss, including the statement of materially misstated. If, based on the work we have performed, material misstatement when it exists. Misstatements can arise
We communicate with those charged with governance
Other Comprehensive Income, the Cash Flow Statement and we conclude that there is a material misstatement of this other from fraud or error and are considered material if, individually
regarding, among other matters, the planned scope and
the Statement of Changes in Equity for the year then ended, information, we are required to report that fact. We have or in the aggregate, they could reasonably be expected to
timing of the audit and significant audit findings, including
and notes to the standalone financial statements, including nothing to report in this regard. influence the economic decisions of users taken on the basis of
any significant deficiencies in internal control that we identify
a summary of significant accounting policies and other these standalone financial statements.
during our audit.
explanatory information. Responsibility of Management for the Standalone
As part of an audit in accordance with SAs, we exercise
Financial Statements professional judgment and maintain professional skepticism
We also provide those charged with governance with a
In our opinion and to the best of our information and according
The Company’s Board of Directors is responsible for the statement that we have complied with relevant ethical
to the explanations given to us, the aforesaid standalone throughout the audit. We also:
matters stated in section 134(5) of the Act with respect to requirements regarding independence, and to communicate
financial statements give the information required by the • Identify and assess the risks of material misstatement of
the preparation of these standalone financial statements that with them all relationships and other matters that may
Companies Act, 2013 (“the Act”), as amended, in the manner so the standalone financial statements, whether due to fraud
give a true and fair view of the financial position, financial reasonably be thought to bear on our independence, and where
required and give a true and fair view in conformity with the or error, design and perform audit procedures responsive
performance including other comprehensive income, cash flows applicable, related safeguards.
accounting principles generally accepted in India, of the state of to those risks, and obtain audit evidence that is sufficient
affairs of the Company as at March 31, 2021, its profit including and changes in equity of the Company in accordance with the
accounting principles generally accepted in India, including the
and appropriate to provide a basis for our opinion. The Other Matter
other comprehensive income, its cash flows and the changes in risk of not detecting a material misstatement resulting
Indian Accounting Standards (Ind AS) specified under section As more fully described in note 45, the comparative financial
equity for the year ended on that date. from fraud is higher than for one resulting from error, as
133 of the Act read with the Companies (Indian Accounting information of the Company as at and for the year ended March
Basis for Opinion fraud may involve collusion, forgery, intentional omissions, 31, 2020 included in these Standalone Financials Statements
Standards) Rules, 2015, as amended. This responsibility also
misrepresentations, or the override of internal control. have been restated to give the effect of the adjustments arising
We conducted our audit of the standalone financial statements includes maintenance of adequate accounting records in
in accordance with the Standards on Auditing (SAs), as accordance with the provisions of the Act for safeguarding of • Obtain an understanding of internal control relevant from merger of Vadinar Oil Terminal Limited, subsidiary of the
specified under section 143(10) of the Act. Our responsibilities the assets of the Company and for preventing and detecting to the audit in order to design audit procedures that are Company, with the Company.
under those Standards are further described in the ‘Auditor’s frauds and other irregularities; selection and application appropriate in the circumstances. Under section 143(3)
Responsibilities for the Audit of the Standalone Financial of appropriate accounting policies; making judgments and (i) of the Act, we are also responsible for expressing our Report on Other Legal and Regulatory
Statements’ section of our report. We are independent of estimates that are reasonable and prudent; and the design, opinion on whether the Company has adequate internal Requirements
the Company in accordance with the ‘Code of Ethics’ issued implementation and maintenance of adequate internal financial financial controls with reference to financial statements in 1. As required by the Companies (Auditor’s Report) Order,
by the Institute of Chartered Accountants of India together controls, that were operating effectively for ensuring the place and the operating effectiveness of such controls. 2016 (“the Order”), issued by the Central Government of
with the ethical requirements that are relevant to our audit of accuracy and completeness of the accounting records, relevant India in terms of sub-section (11) of section 143 of the Act,
• Evaluate the appropriateness of accounting policies used
the financial statements under the provisions of the Act and to the preparation and presentation of the standalone financial we give in the “Annexure 1” a statement on the matters
and the reasonableness of accounting estimates and
the Rules thereunder, and we have fulfilled our other ethical statements that give a true and fair view and are free from specified in paragraphs 3 and 4 of the Order.
related disclosures made by management.
responsibilities in accordance with these requirements and material misstatement, whether due to fraud or error.
• Conclude on the appropriateness of management’s use 2. As required by Section 143(3) of the Act, we report that:
the Code of Ethics. We believe that the audit evidence we have
In preparing the standalone financial statements, management
obtained is sufficient and appropriate to provide a basis for our of the going concern basis of accounting and, based (a) We have sought and obtained all the information and
is responsible for assessing the Company’s ability to continue
audit opinion on the standalone financial statements. on the audit evidence obtained, whether a material explanations which to the best of our knowledge and
as a going concern, disclosing, as applicable, matters related to
uncertainty exists related to events or conditions that belief were necessary for the purposes of our audit;
Other Information going concern and using the going concern basis of accounting
may cast significant doubt on the Company’s ability to
The Company’s Board of Directors is responsible for the unless management either intends to liquidate the Company or (b) In our opinion, proper books of account as required
continue as a going concern. If we conclude that a material
other information. The other information comprises the to cease operations, or has no realistic alternative but to do so. by law have been kept by the Company so far as it
uncertainty exists, we are required to draw attention
information included in the Annual report, but does not include appears from our examination of those books;
Those Board of Directors are also responsible for overseeing in our auditor’s report to the related disclosures in the
the standalone financial statements and our auditor’s report the Company’s financial reporting process. financial statements or, if such disclosures are inadequate, (c) The Balance Sheet, the Statement of Profit and Loss
thereon. to modify our opinion. Our conclusions are based on the including the Statement of Other Comprehensive

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Independent Auditor’s Report (Contd.) Annexure 1

Income, the Cash Flow Statement and Statement of the Companies (Audit and Auditors) Rules, 2014, Referred to in paragraph 1 under the heading Further, in our opinion and according to the information
Changes in Equity dealt with by this Report are in as amended in our opinion and to the best of our “Report on Other Legal and Regulatory and explanations given to us, since the Company is in
agreement with the books of account; information and according to the explanations given Requirements” of our report of even date the business of infrastructure facilities for petroleum,
to us: the provisions of section 186 of the Act, in so far as they
(d) In our opinion, the aforesaid standalone financial (i) (a) The Company has maintained proper records
relate to grant of loans and guarantees and purchase of
statements comply with the Accounting Standards i. The Company has disclosed the impact of showing full particulars, including quantitative
securities, are not applicable to the Company and hence
specified under Section 133 of the Act, read with pending litigations on its financial position in its details and situation of fixed assets.
not commented upon.
Companies (Indian Accounting Standards) Rules, standalone financial statements – Refer note 36
(b) The Company has a regular programme for
2015, as amended; to the standalone financial statements; (v) The Company has not accepted any deposits within the
verification of fixed assets in phased manner over
meaning of Sections 73 to 76 of the Act and the Companies
(e) On the basis of the written representations received ii. The Company has made provision, as required three years which, in our opinion, is reasonable
(Acceptance of Deposits) Rules, 2014 (as amended).
from the directors as on March 31, 2021 taken under the applicable law or accounting having regard to the size of the Company and the
Accordingly, the provisions of clause 3(v) of the Order are
on record by the Board of Directors, none of the standards, for material foreseeable losses, if nature of its assets. No material discrepancies were
not applicable.
directors is disqualified as on March 31, 2021 from any, on long-term contracts including derivative noticed on such verification.
being appointed as a director in terms of Section 164 contracts – Refer note 20 and 25 to the (vi) We have broadly reviewed the books of account
(c) According to the information and explanations given
(2) of the Act; standalone financial statements; maintained by the Company pursuant to the rules made
by the management and audit procedures performed
by the Central Government for the maintenance of cost
(f) With respect to the adequacy of the internal financial iii. There were no amounts which were required by us, the title deeds of immovable properties
records under section 148(1) of the Companies Act, 2013,
controls with reference to these standalone financial to be transferred to the Investor Education and included in property, plant and equipment are held in
related to the manufacture of petroleum products, and are
statements and the operating effectiveness of such Protection Fund by the Company. the name of the Company.
of the opinion that prima facie, the specified accounts and
controls, refer to our separate Report in “Annexure
(ii) The management has conducted physical verification of records have been made and maintained. We have not,
2” to this report;
inventory at reasonable intervals during the year and no however, made a detailed examination of the same.
For S.R. Batliboi & Co. LLP
(g) In our opinion, the managerial remuneration for the material discrepancies were noticed on such physical
Chartered Accountants (vii) (a) The Company has generally been regular in
year ended March 31, 2021 has been paid / provided verification.
ICAI Firm Registration Number: 301003E/E300005 depositing with appropriate authorities undisputed
by the Company to its directors in excess of the
(iii) According to the information and explanations given statutory dues including provident fund, , income-
amount permissible under the provisions of section
to us, the Company has not granted any loans, secured tax, sales-tax, service tax, duty of custom, duty of
197 read with Schedule V to the Act (refer note 44). per Naman Agarwal or unsecured to companies, firms, Limited Liability excise, value added tax, goods and service tax, cess
As stated in the said note, the Company proposes to Partner Partnerships or other parties covered in the register and other statutory dues applicable to it.
obtain necessary shareholder approval in the ensuing Membership Number: 502405 maintained under section 189 of the Companies Act,
annual general meeting; UDIN: 21502405AAAABY9174 (b) According to the information and explanations given
2013. Accordingly, the provisions of clause 3(iii)(a), (b) and
to us, no undisputed amounts payable in respect of
(h) With respect to the other matters to be included in Place of Signature: New Delhi (c) of the Order are not applicable to the Company and
provident fund, , income-tax, service tax, sales-tax,
the Auditor’s Report in accordance with Rule 11 of Date: July 1, 2021 hence not commented upon.
duty of custom, duty of excise, value added tax, goods
(iv) In our opinion and according to the information and and service tax, cess and other statutory dues were
explanations given to us, there are no loans, investments, outstanding, at the year end, for a period of more
guarantees, and securities given in respect of which than six months from the date they became payable.
provisions of section 185 and 186 of the Companies Act
(c) According to the records of the Company, the dues
2013 are applicable and hence not commented upon.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax and cess on (viii) In our opinion and according to the information and (xiii) According to the information and explanations given by
account of any dispute, are as follows: explanations given by the management, the Company has the management, transactions with the related parties are
not defaulted in repayment of loans or borrowing to bank in compliance with section 177 and 188 of Companies Act,
Name of the Nature of the dues Amount* Period to which the amount Forum where the dispute is
or financial institution, based on the revised repayment 2013 where applicable and the details have been disclosed
statute (Rs. Million) relates pending
schedules, for some such loans, which were drawn after in the notes to the financial statements, as required by the
Gujarat Value Sales tax & interest 38,022 2008-09, 2010-11 to 2015- Jt. Commissioner (Appeal), Rajkot
taking effects of the moratorium granted by the banks applicable accounting standards.
Added Tax Act, 16
2003 and availed by the Company, in view of the Covid-19
3 2007-08, 2017-18 Gujarat VAT Tribunal (xiv) According to the information and explanations given to
pandemic. The Company did not have any outstanding
Rajasthan Value Sales tax & interest 104 2006-07, 2007-08, 2009- Rajasthan Commercial Tax Tribunal us and on an overall examination of the balance sheet,
dues to government or dues to debenture holders during
Added Tax Act, 10, 2010-11 the Company has not made any preferential allotment or
the year.
2003 private placement of shares or fully or partly convertible
Central Sales Central sales tax & 11,382 2008-09 to 2016-17 Jt. Commissioner (Appeal), Rajkot (ix) In our opinion and according to the information and debentures during the year under review and hence,
Tax Act, 1956 interest 163 2010-11, 2011-12 Guwahati High Court explanations given by the management, the Company has reporting requirements under clause 3(xiv) of the Order
utilized the monies raised by way of term loans for the are not applicable to the Company and, not commented
Central sales tax, 76 2004-05 Supreme Court
penalty & interest purposes for which they were raised. The Company has upon.
not raised monies by way of initial public offer / further
Customs Act, Customs duty, 318 2008-09, 2010-11 to 2012- Commissioner (Appeal) (xv) According to the information and explanations given by the
1962 interest, fine and 13 public offer / debt instruments and hence, not commented
management, the Company has not entered into any non-
penalty upon.
1,832 2009-10 to 2012-13, 2017- Customs, Excise & Service Tax cash transactions with directors or persons connected
18 Appellate Tribunal (CESTAT) (x) Based upon the audit procedures performed for the with him as referred to in section 192 of Companies Act,
2,820 2009-10, 2007-08, 2013-14 Supreme Court purpose of reporting the true and fair view of the 2013.
Central Excise Excise duty, interest, 245 2006-07, 2010-11 Commissioner of Central Excise financial statements and according to the information
(xvi) According to the information and explanations given to
Act, 1944 fine and penalty 740 2006-07 to 2011-12, 2017- Customs, Excise & Service Tax and explanations given by the management, we report
us, the provisions of section 45-IA of the Reserve Bank of
18 Appellate Tribunal (CESTAT) that no fraud by the Company or no material fraud on the
India Act, 1934 are not applicable to the Company.
857 2007-08 to 2009-10 Gujarat High Court Company by the officers and employees of the Company
Goods and Central Goods and 35 2018-19 Deputy Commissioner, CGST
has been noticed or reported during the year.
Service Tax Services Tax Act, Jamnagar (xi) According to the information and explanations given by For S.R. Batliboi & Co. LLP
2017 Chartered Accountants
the management, we report that the remuneration of
Service Tax Service tax & penalty 15 2004-05 to 2009-10 Customs, Excise & Service Tax the non-executive directors for the year ended March ICAI Firm Registration Number: 301003E/E300005
Rules, 1994 Appellate Tribunal (CESTAT)
31, 2021 is in excess of the limits applicable under the
Madhya Pradesh Entry tax, penalty & 1 2007-08, 2008-09 M.P. High Court (Indore) provisions of section 197 read with Schedule V to the
Entry Tax Act, interest per Naman Agarwal
Companies Act, 2013, by INR 40 million. As informed by
1976
the management, the Company is in process of seeking Partner
Income Tax Act, Income tax and 306 2003-04 Bombay High Court Membership Number: 502405
shareholders’ approval through special resolution in the
1961 interest 65 2010-11, 2014-15, 2015-16 Commissioner of Income Tax ensuing annual general meeting of the Company (refer UDIN: 21502405AAAABY9174
(Appeals)
note 44). Place of Signature: New Delhi
*Net of amounts paid under protest / adjusted against refunds. Date: July 1, 2021
(xii) In our opinion, the Company is not a nidhi company.
Therefore, the provisions of clause 3(xii) of the Order are
not applicable to the Company and hence not commented
upon.

74 75
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Annexure 2

TO THE INDEPENDENT AUDITOR’S REPORT OF to these standalone financial statements was established and acquisition, use, or disposition of the company's assets that Opinion
EVEN DATE ON THE STANDALONE FINANCIAL maintained and if such controls operated effectively in all could have a material effect on the financial statements. In our opinion, the Company has, in all material respects,
STATEMENTS OF NAYARA ENERGY LIMTED material respects.
Inherent Limitations of Internal Financial Controls Over
adequate internal financial controls over financial reporting
Financial Reporting With Reference to Standalone Financial with reference to these standalone financial statements and
Report on the Internal Financial Controls under Clause (i) of Our audit involves performing procedures to obtain audit
Statements such internal financial controls over financial reporting with
Sub-section 3 of Section 143 of the Companies Act, 2013 (“the evidence about the adequacy of the internal financial controls
reference to these standalone financial statements were
Act”) over financial reporting with reference to these standalone Because of the inherent limitations of internal financial controls
operating effectively as at March 31, 2021, based on the
financial statements and their operating effectiveness. Our over financial reporting with reference to these standalone
We have audited the internal financial controls over financial internal control over financial reporting criteria established by
audit of internal financial controls over financial reporting financial statements, including the possibility of collusion
reporting with reference to standalone financial statements the Company considering the essential components of internal
with reference to standalone financial statements included or improper management override of controls, material
of Nayara Energy Limited (“the Company”) as of March 31, control stated in the Guidance Note issued by the ICAI.
obtaining an understanding of internal financial controls over misstatements due to error or fraud may occur and not be
2021 in conjunction with our audit of the standalone financial
financial reporting with reference to these standalone financial detected. Also, projections of any evaluation of the internal
statements of the Company for the year ended on that date.
statements, assessing the risk that a material weakness financial controls over financial reporting with reference to
For S.R. Batliboi & Co. LLP
Management’s Responsibility for Internal Financial Controls
these standalone financial statements to future periods are
exists, and testing and evaluating the design and operating Chartered Accountants
subject to the risk that the internal financial control with
The Company’s Management is responsible for establishing effectiveness of internal control based on the assessed risk. ICAI Firm Registration Number: 301003E/E300005
reference to these standalone financial statements may become
and maintaining internal financial controls based on the The procedures selected depend on the auditor’s judgement,
inadequate because of changes in conditions, or that the degree
internal control over financial reporting criteria established including the assessment of the risks of material misstatement
of compliance with the policies or procedures may deteriorate.
by the Company considering the essential components of of the financial statements, whether due to fraud or error. per Naman Agarwal
Partner
internal control stated in the Guidance Note on Audit of We believe that the audit evidence we have obtained is sufficient
Membership Number: 502405
Internal Financial Controls Over Financial Reporting issued and appropriate to provide a basis for our audit opinion on the UDIN: 21502405AAAABY9174
by the Institute of Chartered Accountants of India (“ICAI”). Company’s internal financial controls with reference to these
These responsibilities include the design, implementation and standalone financial statements. Place of Signature: New Delhi
maintenance of adequate internal financial controls that were Date: July 1, 2021
operating effectively for ensuring the orderly and efficient Meaning of Internal Financial Controls Over Financial
conduct of its business, including adherence to the Company’s Reporting With Reference to these Standalone Financial
policies, the safeguarding of its assets, the prevention and Statements
detection of frauds and errors, the accuracy and completeness A company's internal financial controls over financial reporting
of the accounting records, and the timely preparation of reliable with reference to standalone financial statements is a
financial information, as required under the Companies Act, process designed to provide reasonable assurance regarding
2013. the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
Auditor’s Responsibility
generally accepted accounting principles. A company's internal
Our responsibility is to express an opinion on the Company's financial controls over financial reporting with reference to
internal financial controls over financial reporting with standalone financial statements includes those policies and
reference to these standalone financial statements based procedures that (1) pertain to the maintenance of records
on our audit. We conducted our audit in accordance with the that, in reasonable detail, accurately and fairly reflect the
Guidance Note on Audit of Internal Financial Controls Over transactions and dispositions of the assets of the company; (2)
Financial Reporting (the “Guidance Note”) and the Standards provide reasonable assurance that transactions are recorded
on Auditing, as specified under section 143(10) of the Act, to as necessary to permit preparation of financial statements in
the extent applicable to an audit of internal financial controls, accordance with generally accepted accounting principles, and
both issued by ICAI. Those Standards and the Guidance Note that receipts and expenditures of the company are being made
require that we comply with ethical requirements and plan only in accordance with authorisations of management and
and perform the audit to obtain reasonable assurance about directors of the company; and (3) provide reasonable assurance
whether adequate internal financial controls with reference regarding prevention or timely detection of unauthorised

76 77
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

STANDALONE BALANCE SHEET STANDALONE STATEMENT OF PROFIT & LOSS

AS AT MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021

(` in million) (` in million)
Particulars Notes As At As At Particulars Notes For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
(restated-refer (restated - refer
note 45) note 45)
ASSETS Income
1) Non-current assets Revenue from operations 28 875,006 998,683
(a) Property, plant and equipment 6 431,611 443,265
(b) Capital work-in-progress 6 8,996 5,252 Other income 29 10,555 6,807
(c) Goodwill 6 108,184 108,184 Total Income 885,561 1,005,490
(d) Other Intangible assets 6 280 331 Expenses
(e) Right-of-use assets 6 35,251 35,973 Cost of raw materials consumed 430,464 626,594
(f) Financial assets Excise duty 247,596 142,884
(i) Investments 7 4 -
(ii) Other financial assets 8 2,651 1,536 Purchases of stock-in-trade 137,408 123,646
(g) Other non-current assets 9 2,847 2,718 Changes in inventory of finished goods, stock-in-trade and work-in- 30 (8,786) (3,816)
(h) Non-current tax assets (net) 4,738 8,745 progress
Total non-current assets 594,562 606,004 Employee benefits expense 31 6,702 6,981
2) Current assets
(a) Inventories 10 93,448 59,281 Finance costs 32 20,853 27,367
(b) Financial assets Depreciation and amortisation expense 6 19,183 22,176
(i) Trade receivables 11 19,679 12,703 Other expenses 33 34,896 45,157
(ii) Cash and cash equivalents 12 33,186 30,019 Total expenses 888,316 990,989
(iii) Bank balances other than (ii) above 13 8,511 11,056 (Loss) / Profit before exceptional items and tax (2,755) 14,501
(iv) Loans 14 488 357
(v) Other financial assets 15 10,395 31,575 Exceptional items 34 - 4,544
(c) Other current assets 16 4,615 5,979 (Loss) / Profit before tax (2,755) 9,957
Total current assets 170,322 150,970 Tax expense: 21
TOTAL ASSETS 764,884 756,974 (a) C
 urrent tax expenses - 1,788
EQUITY AND LIABILITIES
EQUITY (b) Deferred tax (reversal) [Include ` NIL (Previous year ` 18,458 million) (7,420) (17,014)
(a) Equity share capital 17 15,072 15,072 reversal on account of change in tax provisions]
(b) Other equity 18 191,779 174,599 Total tax (reversal) (7,420) (15,226)
Total Equity 206,851 189,671 Profit for the year 4,665 25,183
LIABILITIES
1) Non-current liabilities Other comprehensive income
(a) Financial liabilities Items that will not be reclassified to profit and loss 25 (9)
(i) Borrowings 19 72,559 98,800 Remeasurement income on defined benefit plans 33 14
(ii) Other financial liabilities 20 115,358 160,406 Income tax effect (8) (23)
(b) Deferred tax liabilities (net) 21 51,528 54,739 25 (9)
(c) Other non-current liabilities 22 12,296 22,885
Total non-current liabilities 251,741 336,830 Items that will be reclassified to profit and loss 12,490 (21,546)
2) Current liabilities Effective portion of cash flow hedges (net) 16,605 (28,766)
(a) Financial liabilities Income tax effect (4,179) 7,178
(i) Borrowings 23 23,326 8,773 12,426 (21,588)
(ii) Trade payables 24
- Total Outstanding dues of micro and small enterprises 177 37 Foreign currency monetary item translation difference account 86 102
- Total Outstanding dues of creditors other than micro and 117,372 96,377 Income tax effect (22) (60)
small enterprises 64 42
(iii) Other financial liabilities 25 106,724 97,757 Other comprehensive Income / (loss) for the year, net of tax 12,515 (21,555)
(b) Other current liabilities 26 57,037 26,034 Total comprehensive income for the year 17,180 3,628
(c) Provisions 27 961 803 (comprising profit and other comprehensive Income / (loss) for the year)
(d) Current tax liabilities (net) 695 692
Total current liabilities 306,292 230,473 Earnings per share (Face value ` 10 per share) 35
TOTAL EQUITY AND LIABILITIES 764,884 756,974 Basic and Diluted (in `) 3.13 16.89
See accompanying notes to the standalone financial statements See accompanying notes to the standalone financial statements

As per our report of even date For and on behalf of the Board of Directors As per our report of even date For and on behalf of the Board of Directors

For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Chartered Accountants Executive Chairman Director Chartered Accountants Executive Chairman Director
Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857 Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India Sussex, United Kingdom Devbhumi Dwarka, India
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Partner Chief Executive Officer Chief Financial Officer Company Secretary Partner Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. 502405 Thane, India Membership No. 502405 Thane, India
New Delhi, July 01, 2021 Mumbai, India Mumbai, India July 01, 2021 New Delhi, July 01, 2021 Mumbai, India Mumbai, India July 01, 2021

78 79
80
Standalone Statement of Changes in Equity
for the year ended March 31, 2021

a. Equity Share Capital

NAYARA ENERGY LIMITED
ANNUAL REPORT 2020-21

(` in million)
Particulars For the year For the year
ended March 31, ended March 31,
2021 2020
Opening balance 15,072 15,072
Closing balance 15,072 15,072

b. Other Equity
Statement of Changes in equity for the year April 01, 2019 to March 31, 2020
(` in million)
Particulars Reserves and Surplus Items of Other Comprehensive Income (OCI) Total
Capital Securities General Retained Effective portion of Foreign currency
reserve premium reserve earnings Cash Flow Hedges* monetary item
translation
difference account
Balance as at April 01, 2019 409 78,014 596 91,607 (417) (230) 169,979
Reserve created on merger of VOTL (refer note 45) 200 - - 4,253 4,453
Restated balance as at April 01, 2019 609 78,014 596 95,860 (417) (230) 174,432
Adjustment to the opening balance of retained earnings on - - - (3,461) - - (3,461)
initial application of Ind AS 116
Profit for the year - - - 25,183 - - 25,183
Other Comprehensive (Loss) for the year - - - (9) (21,588) 42 (21,555)
Total Comprehensive income for the year - - - 25,174 (21,588) 42 3,628

Balance as at March 31, 2020 609 78,014 596 117,573 (22,005) (188) 174,599

Standalone Statement of Changes in Equity (Contd.)

for the year ended March 31, 2021

Statement of Changes in equity for the year April 01, 2020 to March 31, 2021
(` in million)
Particulars Reserves and Surplus Items of Other Comprehensive Income (OCI) Total
Capital Securities General Retained Effective portion of Foreign currency
reserve premium reserve earnings Cash Flow Hedges* monetary item
translation
difference account
Balance as at April 01, 2020 609 78,014 596 117,573 (22,005) (188) 174,599
Profit for the year - - - 4,665 - - 4,665
Other Comprehensive income for the year - - - 25 12,426 64 12,515
Total Comprehensive income for the year - - - 4,690 12,426 64 17,180
Balance as at March 31, 2021 609 78,014 596 122,263 (9,579) (124) 191,779
* A net loss for the year of ` 20,432 million (net of tax) (Previous year ` 12,853 million) was recycled from cash flow hedge reserve to statement of profit and loss account.

As per our report of even date For and on behalf of the Board of Directors
CORPORATE OVERVIEW

For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Chartered Accountants Executive Chairman Director
Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Partner Chief Executive Officer Chief Financial Officer Company Secretary
BOARD’S REPORT

Membership No. 502405 Thane, India

New Delhi, July 01, 2021 Mumbai, India Mumbai, India July 01, 2021
FINANCIAL STATEMENTS

81
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

STANDALONE STATEMENT OF CASH FLOWS STANDALONE STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021

(` in million) (` in million)
Particulars For the year ended For the year ended Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
(restated - refer (restated - refer
note 45) note 45)
A Cash flow from operating activities Composition of Cash and cash equivalents included in the statement of cash flows
Net (Loss) / profit before tax (2,755) 9,957 comprise of the following balance sheet amounts:
Adjustments for: Cash and cash equivalents as per the balance sheet (refer note 12) 33,186 30,019
Interest income (2,898) (1,818) Add: Earmarked bank balances (refer note 13) 78 10
Depreciation and amortisation expense 19,183 22,176 Less: Bank overdraft (refer note 23) (10) -
Loss on disposal / discard of property, plant and equipment (net) 84 3 Total 33,254 30,029
Gain on investment / financial assets measured at FVTPL - (224)
Export obligation deferred income (100) (248) Reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities
Unrealised foreign exchange differences (net) (938) 4,506
Particulars As at Cash changes Non cash As at
Mark to market loss / (gain) on derivative contracts (net) 6,358 (8,540)
April 1, 2020 (net) changes (net) March 31, 2021
Expected credit loss (net) 106 533
Long term borrowings including current maturities 106,710 (3,088) 2,231 105,853
Provision for doubtful debts/ doubtful debt written off 24 344
classified in other financial liabilities @
Trade payable written back (851) -
Finance costs 20,853 27,368 Short term borrowings* 8,773 14,443 110 23,326
Operating profit before working capital changes 39,066 54,057
Adjustments for working capital changes: Particulars As at Cash changes Non cash As at
April 1, 2019 (net) changes (net) March 31, 2020
(Increase) / Decrease in inventories (34,167) 35,729
decrease in trade and other receivables 6,630 11,533 Long term borrowings including current maturities 126,695 (22,732) 2,747 106,710
classified in other financial liabilities
Increase in trade and other payables 2,400 25,737
Cash generated from operating activities 13,929 127,056 Short term borrowings* 55,673 (47,184) 284 8,773
Income tax refund/(paid) (net) (including interest) 4,416 (1,171) *Excluding bank overdraft disclosed as part of cash and cash equivalent for the purpose of cashflow statement.
Net cash generated from operating activities 18,345 125,886
@ for issuance of Non Covertible Debenture to Non Controlling Interest (refer note 45).
B Cash flow from investing activities
Payments for property, plant and equipment (including capital work in progress, (7,958) (5,038) Notes:
Intangible assets, Capital advances and Capital creditors)
a) The above cash flow from operating activities has been prepared under the “Indirect Method” as set out in Indian Accounting Standard
Proceeds from sale of short term investments (net) - 1,225 (Ind AS)7- Statement of cash flows.
Investment in equity share of subsidiary (4)
b) Cash flow from operations include net inflow of ` Nil (` 69,799 million for the year ended March 31, 2020) arising from long term
Encashment / (Placement) of short term bank deposits (net) 2,607 (4,792)
advances received from customers, net of goods supplied during the period. The goods will be supplied against these advances over
Placement of inter corporate deposits (162) -
next two to three years.
Refund of inter corporate deposits 31 -
Interest received 1,230 1,662
As per our report of even date For and on behalf of the Board of Directors
Net cash (used in) investing activities (4,256) (6,943)
C Cash flow from financing activities For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Chartered Accountants Executive Chairman Director
Proceeds from long-term borrowings 15,428 30,586
Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Repayment of long-term borrowings (18,516) (53,318)
Sussex, United Kingdom Devbhumi Dwarka, India
Proceeds from short-term borrowings 22,297 11,522
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Repayment of short-term borrowings (15,297) (30,272)
Partner Chief Executive Officer Chief Financial Officer Company Secretary
Proceed / (repayment) of short term borrowings of less than 3 months 7,443 (28,434) Membership No. 502405 Thane, India
Payment of principal portion of lease liabilities (2,173) (840) New Delhi, July 01, 2021 Mumbai, India Mumbai, India July 01, 2021
Finance cost paid (19,671) (23,925)
Net cash (used in) financing activities (10,489) (94,681)
Net increase in cash and cash equivalents 3,600 24,261
Net exchange differences on foreign currency bank balances 54 429
Cash and cash equivalents at the beginning of the year 29,600 5,339
Cash and cash equivalents at the end of the year 33,254 30,029

82 83
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

1. Corporate information are specifically covered by Ind AS 103. Such transactions The Company uses valuation techniques that are acquisition less accumulated depreciation and impairment
Nayara Energy Limited (the Company) is a public limited are accounted for using the pooling-of-interest method. The appropriate in the circumstances and for which sufficient loss, if any. Capital work in progress is stated at cost, net of
company incorporated under the provisions of the assets and liabilities of the acquired entity are recognised data are available to measure fair value, maximising the accumulated impairment losses, if any.
Companies Act, 1956 (since replaced by the Companies Act, at their carrying amounts of the Company’s financial use of relevant observable inputs and minimizing the use of
Cost of acquisition comprises of all costs incurred to bring
2013, as amended). The registered office of the Company is statements. No adjustments are made to reflect fair values unobservable inputs.
the assets to their present location and working condition
located at Devbhumi Dwarka, Gujarat, India. The Company or recognise any new assets or liabilities. The components
All assets and liabilities for which fair value is measured up to the date the assets are ready for their intended use.
is primarily engaged in the business of refining of crude oil, of equity of the acquired companies are added to the same
or disclosed in the financial statements are categorized Cost also includes the cost of replacing part of the plant and
marketing of petroleum products in domestic and overseas components within the Company’s equity. The difference, if
within the fair value hierarchy, described as follows, based equipment and borrowing costs for long-term construction
markets. The Company owns India’s second largest single any, between the amounts recorded as share capital issued
on the lowest level input that is significant to the fair value projects if the recognition criteria are met. When significant
site refinery at Vadinar, Gujarat with a current capacity of plus any additional consideration in the form of cash or other
measurement as a whole: parts of plant and equipment are required to be replaced
20MMTPA. The Company has over 6,000 operational outlets assets and the amount of share capital of the transferor is
• Level 1 — Quoted (unadjusted) market prices in active at intervals, the Company depreciates them separately
and more than 1,400 outlets at various stages of completion. transferred to capital reserve and is presented separately
markets for identical assets or liabilities based on their specific useful lives. Likewise, when a major
from other capital reserves. The Company’s shares issued
The financial statements of Nayara Energy Limited for the inspection including turnaround and maintenance is
in consideration for the acquired companies are recognized • Level 2 — Valuation techniques for which the lowest level
year ended March 31, 2021 were authorised for issue in performed, its cost is recognised in the carrying amount
from the moment the acquired companies are included input that is significant to the fair value measurement is
accordance with a resolution of the directors on July 01, of the plant and equipment if the recognition criteria are
in these financial statements and the financial statements directly or indirectly observable
2021. satisfied. Any remaining carrying amount of the cost of
of the commonly controlled entities would be combined,
• Level 3 — Valuation techniques for which the lowest level the previous inspection (as distinct from physical parts) is
retrospectively, as if the transaction had occurred at the
2. Basis of preparation input that is significant to the fair value measurement is derecognised. All other repair and maintenance costs are
beginning of the earliest reporting period presented.
unobservable recognised in the statement of profit and loss as incurred.
The financial statements of the Company have been prepared
B. Fair value measurement
in accordance with the Indian Accounting Standards (Ind For assets and liabilities that are recognised in the financial Capital Work in Progress is stated at cost which includes
ASs), prescribed under Section 133 of the Companies Act The Company measures financial instruments such as direct and indirect cost incurred for construction or
statements on a recurring basis, the Company determines
2013 (as amended) (herein after referred to as “the Act” read derivatives at fair value at each balance sheet date. procurement of goods incurred during the construction
whether transfers have occurred between levels in the
with Rule 3 of the Companies (Indian Accounting Standards) The Company has also disclosed fair value of financial phase of project under development.
hierarchy by re-assessing categorization (based on the lowest
Rules, 2015 (as amended) and presentation requirements of instruments.
level input that is significant to the fair value measurement Depreciation
Division II of Schedule III to the Companies Act, 2013, (Ind Fair value is the price that would be received to sell an as a whole) at the end of each reporting period.
AS compliant Schedule III), as applicable. Depreciation on PPE is provided, pro-rata for the period of
asset or paid to transfer a liability in an orderly transaction
External valuers are involved for valuation of significant use, using the straight line method, over the estimated useful
These financial statements are prepared under the accrual between market participants at the measurement date. The
assets, such as properties and unquoted financial assets, and life given below, which is different than useful life as specified
basis and historical cost measurement, except for certain fair value measurement is based on the presumption that
significant liabilities. in the Schedule II to the Companies Act, 2013. The estimate
financial instruments (refer accounting policy on financial the transaction to sell the asset or transfer the liability takes
of the useful life of these assets has been assessed based on
instruments), which are measured at fair values. The financial place either: For the purpose of fair value disclosures, the Company has
technical advice which considers the nature of the asset,
statements provide comparative information in respect of determined classes of assets and liabilities on the basis of the
• In the principal market for the asset or liability, or the usage of the asset, expected physical wear and tear, the
the previous period. The financial statements are presented nature, characteristics and risks of the asset or liability and
operating conditions of the asset, anticipated technological
• 
In the absence of a principal market, in the most the level of the fair value hierarchy as explained above.
in Indian National Rupee (`) which is the functional currency changes, manufacturers warranties and maintenance
advantageous market for the asset or liability.
of the Company, and all values are rounded to the nearest Fair-value related disclosures for financial instruments and support, etc. Major inspection including turnaround and
million, except where otherwise indicated. All amounts The principal or the most advantageous market must be non-financial assets that are measured at fair value or where maintenance cost are depreciated over the next turnaround
individually less than ` 0.5 million have been reported as “0”. accessible by the Company. fair values are disclosed, are summarised in the following cycle. The estimated useful life of items of property, plant
notes: and equipment is mentioned below:
The fair value of an asset or a liability is measured using
3. Summary of significant accounting policies
the assumptions that market participants would use • Disclosures for valuation methods, significant estimates Particulars Estimated useful
A. Business combinations and goodwill when pricing the asset or liability, assuming that market and assumptions (refer note 42) life (in years)
Common control business combinations participants act in their best economic interest. Temporary Building 3
• Quantitative disclosures of fair value measurement
A business combination involving entities or businesses Building 15-60
A fair value measurement of a non-financial asset takes into hierarchy (refer note 42)
Plant and machinery * 35-50
under common control is a business combination in which account a market participant’s ability to generate economic
• 
Financial instruments (including those carried at Catalysts (included within plant & 2-4
all of the combining entities or businesses are ultimately benefits by using the asset in its highest and best use or by
amortised cost) (refer note 42) machinery)
controlled by the same party or parties both before and after selling it to another market participant that would use the Furniture and fixtures 1-10
the business combination and the control is not transitory. asset in its highest and best use. C. Property, Plant and Equipment Office equipment 1-6
The transactions between entities under common control Property, plant & equipment (PPE) is recorded at cost of Vehicles 1-10

84 85
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

* Additionally, there are certain key components identified recoverable amount. An asset’s recoverable amount is the options to extend or to terminate the lease early, where it is The Company applies the short-term lease recognition
within plant and machinery having a useful life up to 35 years higher of an asset’s or cash-generating unit’s (CGU) fair reasonably certain that an extension option will be exercised exemption to its short-term leases of plant and machinery
and are depreciated over such assessed useful life. value less costs of disposal and its value in use. Recoverable or a termination option will not be exercised. and building (i.e., those leases that have a lease term of 12
amount is determined for an individual asset, unless the months or less from the commencement date and do not
The residual values, useful lives and methods of depreciation Company as a lessee
asset does not generate cash inflows that are largely contain a purchase option). It also applies the lease of low-
of property, plant and equipment are reviewed at each At the commencement of a lease contract, a right-of-use
independent of those from other assets or groups of assets. value assets recognition exemption to leases of plant and
financial year end and adjusted prospectively. asset and a corresponding lease liability are recognised,
When the carrying amount of an asset or CGU exceeds its machinery and vehicles that are considered to be low value.
De-recognition recoverable amount, the asset is considered impaired and is unless the lease term is 12 months or less or value of Lease payments on short-term leases and leases of low-value
written down to its recoverable amount. underlying asset is of low value. The commencement date of assets are recognised as expense on a straight-line basis over
An item of property, plant and equipment and any significant
a lease is the date the underlying asset is made available for the lease term.
part initially recognised is derecognised upon disposal or Impairment losses of continuing operations are recognised use.
when no future economic benefits are expected from its Impairment of the right-of-use asset
in the statement of profit and loss.
use or disposal. Any gain or loss arising on derecognition Lease liability is measured at an amount equal to the present
For assets excluding goodwill, an assessment is made at Right-of-use assets are subject to existing impairment
of the asset (calculated as the difference between the net value of the lease payments during the lease term that are
each reporting date to determine whether there is an requirements as set out in ‘Impairment of non-financials
disposal proceeds and the carrying amount of the asset) is not paid at that date. Lease liability includes contingent
indication that previously recognised impairment losses assets’.
included in the statement of profit and loss when the asset is rentals and variable lease payments that depend on an
derecognised. no longer exist or have decreased. If such indication exists, index, rate, or where they are fixed payments in substance. G. Inventories
the Company estimates the asset’s or CGU’s recoverable The lease liability is remeasured when the contractual cash
D. Intangible assets Inventories are valued at the lower of cost and net realisable
amount. A previously recognised impairment loss is reversed flows of variable lease payments change due to a change in value.
Intangible assets acquired separately are measured at cost only if there has been a change in the assumptions used to an index or rate when the lease term changes following a
on initial recognition. The cost of intangible assets acquired determine the asset’s recoverable amount since the last reassessment. Cost of inventories comprise of all costs of purchase, costs
in a business combination is their fair value at the date of impairment loss was recognised. The reversal is limited so of conversion and other costs incurred in bringing the
acquisition. Following initial recognition, intangible assets that the carrying amount of the asset does not exceed its Lease payments are discounted using the interest rate inventories to their present location and condition. The cost
are carried at cost less any accumulated amortisation and recoverable amount, nor exceed the carrying amount that implicit in the lease. If that rate is not readily available, the of crude oil purchased and coal inventory is determined on a
accumulated impairment losses. would have been determined, net of depreciation, had no incremental borrowing rate is applied. The incremental first in first out basis and the cost of all other inventories is
impairment loss been recognised for the asset in prior years. borrowing rate reflects the rate of interest that the lessee determined on a monthly weighted average basis.
Intangible assets with finite lives are amortised over the would have to pay to borrow over a similar term, with a
Such reversal is recognised in the statement of profit and
useful economic life and assessed for impairment whenever similar security, the funds necessary to obtain an asset of a Net realisable value is the estimated selling price in the
loss.
there is an indication that the intangible asset may be similar nature and value to the right-of-use asset in a similar ordinary course of business less the estimated costs of
impaired. The amortisation period and the amortisation A cash generating unit to which goodwill has been allocated economic environment. completion and the estimated costs necessary to make the
method for an intangible asset with a finite useful life are is tested for impairment annually, or more frequently when sale.
reviewed at least at the end of each reporting period, and there is an indication that the unit may be impaired. If the In general, a corresponding right-of-use asset is recognised
at cost, which comprises the amount of the initial H. Revenue from contract with customer
treated as change in estimate, if any change is required. recoverable amount of the cash generating unit is less than
its carrying amount, the impairment loss is allocated first measurement of the lease liability, any lease payments (i) Sale of goods
The Company has estimated the useful life of software and made at or before the commencement date, less any lease
to reduce the carrying amount of any goodwill allocated Revenue from contracts with customers is recognised
licenses ranging from 3 - 5 years from the date of acquisition incentives received, any initial direct costs incurred by the
to the unit and then to the other assets of the unit pro rata when control of the goods are transferred to the
and amortises the same over the said period on a straight lessee adjusted for accumulated depreciation, impairment
based on the carrying amount of each asset in the unit. Any customer at an amount that reflects the consideration to
line basis. losses and any remeasurement of lease liabilities. The
impairment loss for goodwill is recognised in statement of which the Company expects to be entitled in exchange for
De-recognition profit and loss. An impairment loss recognised for goodwill depreciation on right-of-use assets is recognised as expense those goods. The Company has generally concluded that
is not reversed in subsequent periods. unless capitalised when the right-of-use asset is used to it is the principal in its revenue arrangements, because it
Gains or losses arising from derecognition of an intangible
construct another asset. Right of use assets are depreciated typically controls the goods before transferring them to
asset are measured as the difference between the net
F. Leases on a straight line basis over the lesser of the assessed useful
disposal proceeds and the carrying amount of the asset and the customer. Revenue from sale of goods is recognised at
A contract or parts of contracts that conveys the right to lives of the asset or the lease period. the point in time when control of the goods is transferred
are recognised in the statement of profit and loss when the
asset is derecognised. control the use of an identified asset for a period of time in to the customer, generally on delivery of the goods. The
In addition, the carrying amount of lease liabilities is
exchange for payments to be made to the owners (lessors) recovery of excise duty flows to Company on its own
remeasured if there is a modification, a change in the lease
E. Impairment of non-financial assets are accounted for as leases. Contracts are assessed to
term, a change in the lease payments (e.g., changes to account, revenue includes excise duty. Revenue does
The Company assesses, at each reporting date, whether determine whether a contract is, or contains, a lease at the not include other taxes like goods and service tax, value
future payments resulting from a change in an index or rate
there is an indication that an asset may be impaired. If any inception of a contract or when the terms and conditions of added tax and central sales tax etc.
used to determine such lease payments) or a change in the
indication exists, or when annual impairment testing for a contract are significantly changed. The lease term is the
assessment of an option to purchase the underlying asset.
an asset is required, the Company estimates the asset’s non-cancellable period of a lease, together with contractual

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ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(ii) Variable consideration using the projected unit credit method, with actuarial assets. If such monetary items do not relate to acquisition • Financial assets other than equity investment at fair value
The variable consideration is estimated at contract valuations being carried out at the end of each year. of depreciable fixed assets, the exchange difference is through other comprehensive income (FVTOCI)
inception and constrained until it is highly probable amortised over the maturity period/ upto the date of
Remeasurements, comprising of actuarial gains and losses, • Financial assets other than equity investment at fair value
that a significant revenue reversal in the amount of settlement of such monetary item, whichever is earlier
the effect of the asset ceiling, excluding amounts included in through profit or loss (FVTPL)
cumulative revenue recognised will not occur when the and charged to the Statement of Profit and Loss. The un-
net interest on the net defined benefit liability and the return
associated uncertainty with the variable consideration amortised exchange difference is carried under other equity Equity instruments at fair value through profit or loss (FVTPL)
on plan assets (excluding amounts included in net interest on
is subsequently resolved. The volume rebates give as “Foreign currency monetary item translation difference Financial assets at fair value through profit or loss are
the net defined benefit liability), are recognised immediately
rise to variable consideration. The Company provides account” net of tax effect thereon, where applicable. carried in the statement of financial position at fair value
in the balance sheet with a corresponding debit or credit to
retrospective volume rebates to certain customers once Exchange difference arising on settlement / restatement of with net changes in fair value recognised in the statement
retained earnings through OCI in the period in which they
the quantity of products purchased during the period other items are charged to statement of profit and loss. of profit or loss. This category includes equity investments
occur. Remeasurements are not reclassified to the statement
exceeds a threshold specified in the contract. Rebates of profit and loss in subsequent periods. which the Company had not irrevocably elected to classify at
L. Financial Instruments
are offset against amounts payable by the customer. fair value through OCI. Dividends on equity investments are
Past service costs are recognised in the statement of profit A financial instrument is any contract that gives rise to
The Company applies the requirements on constraining recognised as other income in the statement of profit and
and loss on the earlier of the date of the plan amendment a financial asset of one entity and a financial liability or
estimates of variable consideration and recognises a loss when the right of payment has been established.
or curtailment, and the date that the Company recognises equity instrument of another entity. Financial instruments
refund liability for the expected future rebates. Financial assets other than equity investment measured at
related restructuring costs. Net interest is calculated by comprise of financial assets and financial liabilities.
(iii) Contract Liabilities applying the discount rate to the net defined benefit liability Financial assets primarily comprise of loans and advances, amortised cost:
A contract liability is recognised if a payment is received or asset. The Company recognises the following changes in deposits, trade receivables and cash and cash equivalents. A financial asset is measured at amortised cost if it meets
or a payment is due (whichever is earlier) from a customer the net defined benefit obligation in the statement of profit Financial liabilities include trade and other payables, loans both of the following conditions and is not designated at
before the Company transfers the related goods or and loss: and borrowings including bank overdrafts, and derivative FVTPL:
services. Contract liabilities are recognised as revenue financial instruments. Derivatives can be financial assets or
• 
Service costs comprising current service costs, past- • The asset is held within a business model whose objective
when the Company performs under the contract (i.e., financial liabilities depending on whether value is positive or
service costs, gains and losses on curtailments and non- is to hold assets to collect contractual cash flows, and
transfers control of the related goods or services to the negative respectively.
routine settlements as employee benefit expense. • The contractual terms of the financial asset give rise on
customer). Financial assets and financial liabilities are recognised when
• Net interest expense or income as finance cost/ finance specified dates to cash flows that are solely payments
I. Government grants an entity becomes a party to the contractual provisions of
income. of principal and interest on the principal amount
the instrument.
Government grants are recognised where there is reasonable outstanding.
K. Foreign currencies
assurance that the grant will be received and all attached (i) Financial Assets
This category is the most relevant to the Company. After
conditions will be complied with. Transaction and balances a) Initial Recognition and measurement initial measurement, such financial assets are subsequently
When the grant relates to an expense item, it is recognised Transactions in foreign currencies are initially recorded The Company initially recognises loans and advances, measured at amortised cost using the effective interest
as income on a systematic basis over the periods that by the Company’s entities at their respective functional deposits and debt securities issued on the date on which rate (EIR) method. Amortised cost is calculated by taking
the related costs, for which it is intended to compensate, currency spot rates at the date the transaction first qualifies they originate. All other financial instruments (including into account any discount or premium on acquisition and
are expensed. When the grant related to an assets, it is for recognition. At the end of each reporting period, regular way purchases and sales of financial assets) fees or costs that are an integral part of the EIR. The EIR
recognised as income in equal amount over the expected monetary items denominated in foreign currencies are are recognised on the trade date, which is the date on amortisation is included in finance income in the statement
useful life of the related assets. retranslated at the rates prevailing at that date. Differences which the Company becomes a party to the contractual of profit and loss. The losses arising from impairment are
arising on settlement or translation of monetary items provisions of the instrument. A financial asset is initially recognised in the statement of profit and loss. This category
J. Retirement and other employee benefits are recognised in the statement of profit and loss. Non- measured at fair value plus / minus, for an item not at fair generally applies to deposits, advances, trade and other
Contributions to defined contribution plans are recognised monetary items carried at fair value that are denominated in value through profit or loss (FVTPL), transaction costs receivables.
as expense on accrual basis when employees have rendered Foreign Currencies are retranslated at the rates prevailing at that are directly attributable to its acquisition or issue.
services and as when the contributions are due. These the date when the fair value was determined. Non-monetary Financial assets other than equity investment at FVTOCI:
expenses are confined to contribution only. items that are measured in terms of historical cost in a b) Classification of financial assets A debt instrument is classified as FVTOCI only if it meets
foreign currency are not retranslated. On initial recognition, a financial asset is classified into both of the following conditions and is not designated at
The Company determines the present value of the defined
one of the following categories: FVTPL;
benefit obligation and fair value of plan assets. The net liability Exchange difference arising on settlement/ restatement of
or assets represents the deficit or surplus in the Company’s long-term foreign currency monetary items recognized in • Equity instruments at fair value through profit or loss • The asset is held within a business model whose objective
defined benefit plans. (The surplus is limited to the present the financial statements for the year ended March 31, 2016 (FVTPL) is achieved by both collecting contractual cash flows and
value of economic benefits available in the form of refunds prepared under previous GAAP, are capitalized as a part of selling financial assets, and
• 
Financial assets other than equity investment at
from the plans or reductions in future contributions to the the depreciable fixed assets to which the monetary item
amortised cost • The contractual terms of the financial asset give rise on
plans). The present value of the obligation is determined relates and depreciated over the remaining useful life of such
specified dates to cash flows that are solely payments

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

of principal and interest on the principal amount comprehensive income and accumulated in equity is (ii) Financial liabilities / debt and equity instruments all of its liabilities. Equity instruments issued by the
outstanding. recognised in profit or loss if such gain or loss would have a) Classification as financial liability / debt or equity Company are recognised at the proceeds received, net of
otherwise been recognised in profit or loss on disposal of direct issue costs.
For debt instruments at fair value through OCI, interest Debt and equity instruments issued by the Company
that financial asset.
income, foreign exchange revaluation and impairment are classified as either financial liabilities or as equity e) Financial liabilities:
losses or reversals are recognised in the statement e) Impairment of financial assets in accordance with the substance of the contractual The financial liabilities used to minimise accounting
of profit or loss and computed in the same manner as 
In accordance with Ind AS 109, the Company uses arrangements and the definitions of a financial liability mismatch are classified and measured as at FVTPL in
for financial assets measured at amortised cost. The ‘Expected Credit Loss’ (ECL) model, for evaluating and an equity instrument in Ind AS 32. accordance with Ind AS 109. All other financial liabilities
remaining fair value changes are recognised in OCI. impairment of financial assets other than those measured (including borrowings and trade and other payables)
b) Financial liabilities / debt
Upon derecognition, the cumulative fair value change at FVTPL. Expected credit losses are measured through a are subsequently measured at amortised cost using
recognised in OCI is recycled to profit or loss. Financial liabilities are classified, at initial recognition,
loss allowance at an amount equal to: the effective interest method. Gains and losses are
as financial liabilities at fair value through profit or
Financial assets other than equity investment at FVTPL: • 
The 12-months expected credit losses (expected recognised in the standalone financial statement of profit
loss, loans and borrowings including payables, or as
credit losses that result from those default events on and loss when the liabilities are derecognised as well as
FVTPL is a residual category for financial assets. Any derivatives designated as hedging instruments in an
the financial instrument that are possible within 12 through the EIR amortisation process.
debt instrument, which does not meet the criteria for effective hedge, as appropriate.
categorization as at amortized cost or as FVTOCI, is months after the reporting date); or f) Derecognition of financial liabilities:
All financial liabilities are recognised initially at fair
classified as at FVTPL. In addition, the Company may elect • 
For other assets, the Company uses 12 month The Company derecognises financial liabilities when, and
value and, in the case of loans and borrowings and
to designate a debt instrument, which otherwise meets Expected Credit Loss to provide for impairment loss only when, the Company’s obligations are discharged,
payables, plus directly attributable transaction costs.
amortized cost or FVTOCI criteria, as at FVTPL. However, where there is no significant increase in credit risk. If cancelled or have expired. An exchange between with a
such election is allowed only if doing so reduces or The Company’s financial liabilities include trade and lender of debt instruments with substantially different
there is significant increase in credit risk full lifetime
eliminates a measurement or recognition inconsistency other payables, loans and borrowings including bank terms is accounted for as an extinguishment of the
Expected Credit Loss is used.
(referred to as ‘accounting mismatch’). overdrafts, and derivative financial instruments. original financial liability and the recognition of a new
• Full lifetime expected credit losses (expected credit Derivative can be financial assets or financial liabilities
Debt instruments included within the FVTPL category financial liability. Similarly, a substantial modification
losses that result from all possible default events over depending on whether value is positive or negative
are measured at fair value with all changes recognized in of the terms of an existing financial liability (whether or
the life of the financial instrument). respectively.
the statement of profit and loss. not attributable to the financial difficulty of the debtor)
For trade receivables, the Company applies ‘simplified c) Supplier’s credit and Buyer’s credit: is accounted for as an extinguishment of the original
c) Equity Investments approach’ which requires expected lifetime losses financial liability and the recognition of a new financial
The Company enters into an arrangement whereby
All equity investments within the scope of Ind AS 109 are to be recognised from initial recognition of the liability. The difference between the carrying amount
banks make direct payment to supplier on due date.
measured at fair value with value changes recognised receivables. The Company uses historical default rates of the financial liability derecognised and the new
The banks are subsequently paid by the Company at
in Statement of Profit and Loss, except for those equity to determine impairment loss on the portfolio of trade liability recognised plus consideration paid or payable is
later date based on the extended credit terms agreed
investments for which the Company has elected to receivables. At every reporting date these historical recognised in the statement of profit and loss.
with the banks. Where this arrangement is agreed
present the value changes in ‘Other Comprehensive default rates are reviewed and changes in the forward
with supplier and the Company's legal liability remains M. Derivative financial instruments and hedge accounting
Income’. looking estimates are analysed.
towards the supplier only, in such cases the liability is
(i) Initial recognition and subsequent measurement

The Company accounts for its equity investments in f) Effective interest method classified as Trade Payable in the balance sheet and in
of Derivative and embedded derivatives financial
subsidiaries at cost less impairment loss (if any). The The effective interest method is a method of calculating other instances the same is classified as a borrowing.
instruments
impairment, if any, is assessed, determined and recognised the amortised cost of a debt instrument and of allocating
If the classification of the liability under the above The Company enters into a variety of derivative financial
in accordance with policy applicable to ‘impairment of interest income over the relevant period. The effective
arrangement is a Trade Payable, the Company treats instruments to manage its exposure to interest rate,
non-financial assets. interest rate is the rate that exactly discounts estimated
the payment of the supplier by the financial institution commodity price and foreign exchange rate risks. These
future cash receipts (including all fees and points paid or
d) Derecognition of financial assets as a non-cash transaction and the other associated derivatives include foreign exchange forward contracts,
received that form an integral part of the effective interest
The Company derecognises a financial asset when the cash flows are presented as cash flows from operating foreign exchange options, commodity forward contracts,
rate, transaction costs and other premiums or discounts)
contractual rights to the cash flows from the asset expire, activities. In other instances, the associated cash flows interest rate swaps and cross / full currency swaps. For
through the expected life of the debt instrument, or,
or when it transfers the financial asset and substantially are presented as cash flows from financing activities. risk management objectives refer note 42(C).
where appropriate, a shorter period, to the net carrying
all the risks and rewards of ownership of the asset to amount on initial recognition. Interest expense on these are recognised in the finance All derivatives are initially recognised at fair value at the
another party. cost.
Income is recognised on an effective interest basis for debt date the derivative contracts are entered into and are
On derecognition of a financial asset in its entirety, the instruments other than those financial assets classified as d) Equity instruments subsequently remeasured to their fair value at the end of
difference between the asset’s carrying amount and the at FVTPL. Interest income is recognized in the statement each reporting period. Derivatives are carried as financial
An equity instrument is any contract that evidences a
sum of the consideration received and receivable and the of profit and loss and is included in the ‘Other income’ line assets when the fair value is positive and as financial
residual interest in the assets of an entity after deducting
cumulative gain or loss that had been recognised in other item. liabilities when the fair value is negative.

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ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

The resulting gain or loss is recognised in the statement Hedge accounting is discontinued when the hedging Deferred tax liabilities are recognised for all taxable statement of profit and loss (either in other comprehensive
of profit and loss immediately unless the derivative is instrument expires or is sold, terminated, or exercised, temporary differences, except: income or in equity). Deferred tax items are recognised in
designated and effective as a hedging instrument, in which or no longer qualifies for hedge accounting. In case of correlation to the underlying transaction either in OCI or
• When the deferred tax liability arises from the initial
event the timing of the recognition in the statement of cash flow hedges, any cumulative gain or loss deferred directly in equity.
recognition of goodwill or an asset or liability in a
profit and loss or otherwise depends on the nature of the in the Cash Flow Hedge Reserve Account at that time is
transaction that is not a business combination and, at the Deferred tax assets and deferred tax liabilities are offset
hedge item. retained and is recognised when the forecast transaction
time of the transaction, affects neither the accounting if a legally enforceable right exists to set off current tax
Derivatives embedded in non-derivative host contracts is ultimately recognised and affects the statement of
profit nor taxable profit or loss. assets against current tax liabilities and the deferred
that are not financial assets within the scope of Ind AS profit and loss. When a forecast transaction is no longer
taxes relate to income taxes levied by the same taxation
expected to occur, the cumulative gain or loss that was • In respect of taxable temporary differences associated
109 ‘Financial Instruments’ are treated as separate authority on the same taxable entity.
deferred is recognised immediately in the statement of with investments in subsidiaries, when the timing of the
derivatives when their risks and characteristics are not
profit and loss. reversal of the temporary differences can be controlled (iii) Sales tax (includes value added tax and Goods and
closely related to those of the host contracts and the host
and it is probable that the temporary differences will not services tax)
contracts are not measured at FVTPL. N. Borrowing Costs
reverse in the foreseeable future. Deferred tax assets are Expenses and assets are recognised net of the amount of
(ii) Hedge Accounting Borrowing costs consists of interest and other costs that an recognised for all deductible temporary differences, the sales tax, except:
For the purpose of hedge accounting, hedges are classified entity incurs in connection with the borrowing of funds. carry forward of unused tax credits and any unused tax
• When the sales tax incurred on a purchase of assets or
as: Borrowing cost also includes exchange differences to the losses. Deferred tax assets are recognised to the extent
services is not recoverable from the taxation authority, in
extent regarded as an adjustment to the borrowing costs. that it is probable that taxable profit will be available
• 
Fair value hedges when hedging the exposure to which case, the tax paid is recognised as part of the cost of
against which the deductible temporary differences, and
changes in the fair value of a recognised asset or Borrowing costs directly attributable to the acquisition, acquisition of the asset or as part of the expense item, as
the carry forward of unused tax credits and unused tax
liability or an unrecognised firm commitment construction or production of qualifying assets, which are applicable
losses can be utilised. However, recognition of deferred
• Cash flow hedges when hedging the exposure to assets that necessarily take a substantial period of time to tax asset is subject to the following exceptions: When the • 
When receivables and payables are stated with the
variability in cash flows that is either attributable to get ready for their intended use, are added to the cost of deferred tax asset relating to the deductible temporary amount of tax included
a particular risk associated with a recognised asset those assets, until such time as the assets are substantially difference arises from the initial recognition of an asset or
ready for their intended use. All other borrowing costs are The net amount of sales tax recoverable from, or payable
or liability or a highly probable forecast transaction liability in a transaction that is not a business combination
recognised in the Statement of profit and loss in the period to, the taxation authority is included as part of other
or the foreign currency risk in an unrecognised firm and, at the time of the transaction, affects neither the
in which they are incurred. assets and other liabilities in the balance sheet.
commitment accounting profit nor taxable profit or loss
O. Taxes P. Provisions and Contingent liabilities
• Hedges of a net investment in a foreign operation • In respect of deductible temporary differences associated
(i) Current Income tax A provision is recognised when there is a present obligation
At the inception of the hedge relationship, the with investments in subsidiaries, deferred tax assets are
as a result of a past event, it is probable that an outflow of
Company documents the relationship between the Current income tax assets and liabilities are measured at the recognised only to the extent that it is probable that the
resources embodying economic benefits will be required to
hedging instrument and the hedged item, along with amount expected to be recovered from or paid to the taxation temporary differences will reverse in the foreseeable
settle the obligation and a reliable estimate can be made of
its risk management objectives and its strategy for authorities. The tax rates and tax laws used to compute the future and taxable profit will be available against which
the amount of the obligation.
undertaking various hedge transactions. Furthermore, amount are those that are enacted or substantively enacted, the temporary differences can be utilized.
at the inception of the hedge and on an ongoing at the reporting date. A contingent liability is a possible obligation that arises from
The carrying amount of deferred tax assets is reviewed
basis, the Company documents whether the hedging past events and whose existence will be confirmed only by
Current income tax relating to items recognised outside at each reporting date and reduced to the extent that it
instrument is effective in offsetting changes in cash the occurrence or non-occurrence of one or more uncertain
statement of profit and loss is recognised outside statement is no longer probable that sufficient taxable profit will
flows of the hedged item attributable to the hedged future events not wholly within the control of the Company
of profit and loss (either in other comprehensive income or be available to allow all or part of the deferred tax asset
risk. or a present obligation that is not recognized because it is
in equity). Current tax items are recognised in correlation to to be utilised. Unrecognised deferred tax assets are re-
not probable that an outflow of resources will be required
(iii) Cash flow hedges the underlying transaction either in OCI or directly in equity. assessed at each reporting date and are recognised to the
to settle the obligation. A contingent liability also arises in
Changes in the fair value of derivatives/ hedging Management periodically evaluates positions taken in the extent that it has become probable that future taxable
extremely rare cases where there is a liability that cannot
instruments that are designated and qualify as cash flow tax returns with respect to situations in which applicable profits will allow the deferred tax asset to be recovered.
be recognized because it cannot be measured reliably.
hedges are deferred in the “Cash Flow Hedge Reserve”. tax regulations are subject to interpretation and establishes
Deferred tax assets and liabilities are measured at the tax The Company does not recognize a contingent liability but
The gain or loss relating to the ineffective portion is provisions where appropriate.
rates that are expected to apply in the year when the asset discloses it in the financial statements, unless the possibility
recognised immediately in the statement of profit and is realised or the liability is settled, based on tax rates (and of an outflow of resources embodying economic benefits is
(ii) Deferred tax
loss. Amounts deferred in the Cash Flow Hedge Reserve tax laws) that have been enacted or substantively enacted remote.
Deferred tax is provided using the liability method on
Account are recycled in the statement of profit and loss at the reporting date.
in the periods when the hedged item is recognised and temporary differences between the tax bases of assets and Q. Cash and Cash Equivalent
affects the statement of profit and loss, in the same line as liabilities and their carrying amounts for financial reporting Deferred tax relating to items recognised outside Cash and short-term deposits in the balance sheet comprise
the hedged item. purposes at the reporting date. statement of profit and loss is recognised outside cash at banks and on hand and short-term deposits with an

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

original maturity of three months or less, which are subject The terms of the liability that could, at the option of the financial statements were prepared. Existing circumstances is the higher of its fair value less costs of disposal and its
to an insignificant risk of changes in value. counterparty, result in its settlement by the issue of equity and assumptions about future developments, however, may value in use. In assessing value in use, the estimated future
instruments do not affect its classification. change due to market changes or circumstances arising that cash flows are discounted to their present value using pre-
For the purpose of the statement of cash flows, cash and
are beyond the control of the Company. Such changes are tax discount rate that reflects current market assessments
cash equivalents consist of cash and short-term deposits,
4. C
 ritical accounting judgments and key sources reflected in the assumptions when they occur. of the time value of money and the risks specific to the asset.
as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company’s cash
of estimation uncertainty i) Contingencies
In determining fair value less costs of disposal, recent market
The preparation of the Company’s financial statements transactions are taken into account, if no such transactions
management. In the normal course of business, contingent liabilities may
requires management to make judgements, estimates and can be identified, an appropriate valuation model is used.
R. Exceptional items arise from litigation and other claims against the Company.
assumptions about the reported amounts of assets and The key assumptions used to determine the recoverable
Potential liabilities that are possible but not probable of
Exceptional items are those items that management liabilities, and, income and expenses and accompanying amount for the different CGUs, including a sensitivity
crystalizing or cannot be quantified reliably are treated
considers, by virtue of their size or incidence, should be disclosures, and the disclosure of contingent liabilities. analysis, are disclosed and further explained in note 46 in
as contingent liabilities. Among other matters, such
disclosed separately to ensure that the financial information Uncertainty about these assumptions and estimates could Standalone financial statements.
determination require involvement of legal and other subject
allows a better understanding of the underlying performance result in outcomes that require a material adjustment to
matter experts. Depending on materiality, the Company iv) Property Plant and Equipment/Other Intangible Assets
of the business in the year and facilitates more appropriate the carrying amount of assets or liabilities affected in future
may involve internal and/ or external experts to make such
comparison with prior periods. Exceptional items are periods. Property, Plant and Equipment/Other Intangible Assets are
assessment. Contingent liabilities are disclosed in the notes
adjusted in arriving at profit before tax. depreciated/ amortised over their estimated useful life, after
A. Critical accounting judgements but are not recognized. refer note 36.
taking into account estimated residual value.
S. Current and Non-Current Classification
In the process of applying the Company’s accounting policies, ii) Duty drawback
The Company presents assets and liabilities in the balance Management reviews the estimated useful life and residual
the management has made the following judgements, which
Income on duty draw-back is recognised to the extent values of the assets annually in order to determine the
sheet based on current/ non-current classification. have the most significant effect on the amounts recognised
that it is probable that the economic benefits will flow to amount of depreciation/amortisation to be recorded during
An asset is treated as current when it is: in the financial statements:
the Company and the revenue can be reliably measured, any reporting period. The useful life and residual values are
• 
Expected to be realised or intended to be sold or i) Determination of functional currency regardless of when the payment is being made. The Company based on the Company’s historical experience with similar
consumed in normal operating cycle The Management makes judgements in determining the claims drawback of National Calamity Contingent duty assets and take into account anticipated technological
functional currency based on economic substance of the (NCCD) and Basic Custom duty (BCD) on exports in line with changes. The depreciation/ amortisation for future periods
• Held primarily for the purpose of trading duty drawback rules and recognizes the same as revenue.
transactions relevant to each entity in the Company. In is revised if there are significant changes from previous
• Expected to be realised within twelve months after the concluding that Indian Rupees is the functional currency Refer note 38 (A) for details. estimates. Details of changes, the reason thereto and its
reporting period, or for the parent company, the management considered (i) iii) Impairment of non-financial assets financial effect are given in note 6 (6) below.
the currency that mainly influences the sales prices for
• 
Cash or cash equivalent unless restricted from being Goodwill is tested for impairment annually and when
goods and services, the labour, material and other costs 5. Changes in accounting policies and Standards
exchanged or used to settle a liability for at least twelve circumstances indicate that the carrying value may be
months after the reporting period
of providing goods and services, and (ii) the effect of the
impaired. Impairment is determined for goodwill by
issued but not yet effective
competitive forces and regulations of the country which There are no new standards that are notified, but not
assessing the recoverable amount of each CGU (or group of
• All other assets are classified as non-current. mainly determine the sales prices of the goods and services.
CGUs) to which the goodwill relates. yet effective, upto the date of issuance of the Company’s
A liability is current when: As no single currency was clearly dominant, the management financial statements.
also considered secondary indicators including the currency Impairment exists when the carrying value of an asset or
• It is expected to be settled in normal operating cycle in which funds from financing activities are denominated and cash generating unit exceeds its recoverable amount, which
• It is held primarily for the purpose of trading the currency in which funds are retained. The management
has concluded that INR is the functional currency of the
• It is due to be settled within twelve months after the
parent.
reporting period, or
B. Estimates and assumptions
• There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting The key assumptions concerning the future and other key
period sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
The Company classifies all other liabilities as Non Current. the carrying amounts of assets and liabilities within the next
Deferred tax assets and liabilities are classified as Non – financial year, are described below. The Company based its
current assets and liabilities. assumptions and estimates on parameters available when the

94 95
96
Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021

6P
 roperty, Plant and Equipment, Capital-Work-In-Progress, Goodwill, Other Intangible assets and Right-of-use assets

(` in million)
Description of the assets Gross block Depreciation / amortisation Net block
NAYARA ENERGY LIMITED
ANNUAL REPORT 2020-21

(I) (II) (III) = (I - II)

As at Additions Addition Deductions/ As at As at Deduction During Deductions As at As at
April 01, (refer note 3 consequent Remeasurement March April 01, consequent the year March March
2019 below) to merger of 31,2020 2019 to 31,2020 31,2020
subsidiary acquisition
(refer note 4 of subsidiary
below) (refer note 4
below)
A) Property,Plant & Equipment -Owned
Land (Freehold) 52,814 48 3 - 52,865 - - - - - 52,865
Buildings 12,040 237 4,901 - 17,178 3,187 614 694 - 4,495 12,683
Plant and machinery 397,836 3,943 49,930 236 451,473 51,887 4,375 18,709 75 74,896 376,577
Furniture and fixtures 268 11 3 8 274 134 4 20 7 151 123
Office equipments 942 858 4 60 1,744 580 4 256 57 783 961
Vehicles 120 22 - 2 140 78 - 8 2 84 56
Total Property, Plant and Equipment 464,020 5,119 54,841 306 523,674 55,866 4,997 19,687 141 80,409 443,265
B) Capital Work In Progress
Capital work-in-progress 5,252
C) Goodwill
Goodwill 10,324 - 97,860 - 108,184 - - - - - 108,184
D) Other intangible assets
Softwares & licenses 1,123 187 2 1 1,311 859 1 121 1 980 331
E) Right-of-Use assets (refer note - 39)
Tangible Assets
Land - 7,606 - 102 7,504 - - 331 - 331 7,173
Building - 1,618 - - 1,618 - - 253 - 253 1,365
Plant & machinery - 1,800 - - 1,800 - - 305 - 305 1,495
Vehicles (including vessels) - 460 - 94 366 - - 9 - 9 357
Total Tangible Assets - 11,484 - 196 11,288 - - 898 - 898 10,390
Intangible Assets
Trademark - 27,138 - 85 27,053 - - 1,470 - 1,470 25,583
Total Right-of-use assets - 38,622 - 281 38,341 - - 2,368 - 2,368 35,973
Total (A+B+C+D+E) 475,467 43,928 152,703 588 671,510 56,725 4,998 22,176 142 83,757 593,005

Notes to Standalone Financial Statements (Contd.)

For the year ended March 31, 2021

6P
 roperty, Plant and Equipment, Capital-Work-In-Progress, Goodwill, Other Intangible assets and Right-of-use assets
(` in million)
Description of the assets Gross block Depreciation / amortisation Net block
(I) (II) (III) = (I - II)
As at Additions (refer Deductions/ As at As at During the Deductions As at As at
April 01, 2020 note 3 below ) Remeasurement March 31,2021 April 01, year (refer March March
2020 note 6 31,2021 31,2021
below)
A) Property,Plant & Equipment -Owned
Land (Freehold) 52,865 - - 52,865 - - - - 52,865
Buildings 17,178 98 - 17,276 4,495 721 - 5,216 12,060
Plant and machinery 451,473 3,688 2,787 452,374 74,896 14,670 2,703 86,863 365,511
Furniture and fixtures 274 22 2 294 151 21 1 171 123
Office equipments 1,744 413 20 2,137 783 373 19 1,137 1,000
Vehicles 140 5 6 139 84 9 6 87 52
Total Property, Plant and Equipment 523,674 4,226 2,815 525,085 80,409 15,794 2,729 93,474 431,611
B) Capital Work In Progress
Capital work-in-progress 8,996
C) Goodwill
Goodwill 108,184 - - 108,184 - - - - 108,184
D) Other intangible assets
Softwares & licenses 1,311 63 - 1,374 980 114 - 1,094 280
E) Right-of-Use assets (refer note - 39)
Tangible Assets
Land 7,504 773 31 8,246 331 375 - 706 7,540
Building 1,618 52 7 1,663 253 228 3 478 1,185
Plant & machinery 1,800 862 - 2,662 305 516 - 821 1,841
Vehicles (including vessels) 366 1,268 39 1,595 9 699 - 708 887
CORPORATE OVERVIEW

Total Tangible Assets 11,288 2,955 77 14,166 898 1,818 3 2,713 11,453
Intangible Assets
Trademark 27,053 - 328 26,725 1,470 1,457 - 2,927 23,798
Total Right-of-use assets 38,341 2,955 405 40,891 2,368 3,275 3 5,640 35,251
Total (A+B+C+D+E) 671,510 7,244 3,220 675,534 83,757 19,183 2,732 100,208 584,322
for details of assets pledge as security, refer note 19 and 23.
Notes: 1 Land and building having carrying value of ` 2,676 million (Previous year ` 2,676 million) has been pledged for a loan taken by a third party. The Company is in discussion with the lender
for release of the pledge.
2 Additions to plant and machinery are net off exchange gain on long-term foreign currency borrowing taken to finance property plant and equipment (refer note 3(K)) amounting to ` 356
BOARD’S REPORT

million (Previous year loss of ` 1,507 million).

3 In line with its refinery turnaround practices, the Company had completed turnaround activities of its refinery during the year. The Company incurred total cost of ` 3,577 million which
includes catalyst and materials consumption of ` 1,915 million, salary of ` 125 million and other expense of ` 1,537 million (Previous year ` 324 million under other expenses) on the
major maintenance activity which have been capitalised to the plant and machinery.
4 During the year, merger approval of Vadinar Oil Terminal Limited (“VOTL”) was received on December 14, 2020 and accordingly, gross block & accumulated depreciation as on 31 March
2020 has been restated (Refer note 45).
5 The Company incurred total cost of ` 1,067 million as Expenditure During Construction (including salary of ` 302 million and other expense of ` 765 million) (Previous year ` 1,809
million (including salary of ` 264 million and other expense of ` 1,545 million)) for petrochemical project which is included in Capital work in progress.
6 The Company based on external technical evaluation, reassessed the estimates relating to the lives of Plant & Machinery during current financial year. Accordingly lives of the some of
the core refinery assets were increased from a maximum of 40 years to 50 years and simultaneously the components within the same have also been reassessed. These changes were
made to better reflect the estimated periods during which such assets will remain in service. The changes in estimated useful lives have has resulted in lower depreciation expenses of
FINANCIAL STATEMENTS

` 4,791 million for the year ended March 31, 2021.

97
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

7 Investments (Non Current) (Unquoted) 8 Other Financial Assets (Non Current)

(` in million) (Unsecured and considered good, unless otherwise stated)
Particulars As at As at (` in million)
March 31, 2021 March 31, 2020 Particulars As at As at
(1) Investment in equity shares of subsidiaries - At cost March 31, 2021 March 31, 2020
100 (Previous year 100) equity shares of USD 1 each of Nayara Energy Global Security deposits (A) 371 333
0 0
Limited {formerly known as Essar Oil Trading Mauritius Limited (EOTML)} @ Other receivables
60,000 (Previous year NIL) equity shares of USD 1 each of Nayara Energy Singapore Export incentive receivables {refer note 38(A)} 1,285 -
4 -
Pte. Ltd.
Others {refer note 38(B)}
50,000 (Previous year 50,000) equity shares of ` 10 each of Coviva Energy Terminals
0 0 - Considered good 790 789
Limited (CETL) #
(2) Other Investments - At FVTPL - significant increase in credit risk 423 338

13,000,000 (Previous year 13,000,000) equity shares of ` 10 each of Petronet VK - Less: Expected credit loss {refer note 42(C)(v)} (423) (338)
- -
Limited* (B) 2,075 789
1,584,000 (Previous year 1,584,000) equity shares of ` 10 each of Petronet CI Bank Deposits with remaining maturity of more than twelve months (C) 157 152
- -
Limited * @ Interest accrued on bank deposits (D) 1 0
10,000,000 (Previous year 10,000,000) equity shares of ` 0.10 each of Petronet Derivative Assets (E) 47 262
- -
India Limited * @
Total ((A)+(B)+(C)+(D)+(E)) 2,651 1,536
Total 4 -
For details of assets pledged as security against borrowings, refer note 19 and 23.
(` in million)
Particulars As at As at 9 Other non-current assets
March 31, 2021 March 31, 2020
(` in million)
Investment at cost 4 0 Particulars As at As at
Investment at fair value through profit and loss account - - March 31, 2021 March 31, 2020
Total 4 0 Prepaid expenses (refer note 44) 310 240
Capital advances 280 245
(` in million) Claims / other receivables
Particulars As at As at - Considered good 2,257 2,233
March 31, 2021 March 31, 2020
- Considered doubtful 303 280
Aggregate amount of unquoted investments 4 0 Less: Provision for doubtful debt (303) (280)
Total 4 0 Total 2,847 2,718

* Investments are fair valued at Zero. For details of assets pledged as security against borrowings, refer note 19 and 23.
@ companies are under liquidation.
#Vadinar Oil Terminal Limited and Nayara Energy Limited owned 12,500 shares and 37,500 shares of Coviva Energy Terminals 10 Inventories
Limited respectively prior to merger of Vadinar Oil Terminal Limited with Nayara Energy Limited (refer note 45 for merger details). (` in million)
Particulars As at As at
March 31, 2021 March 31, 2020
Raw materials {including in transit ` 17,923 million (Previous year ` 8,995 million)} 45,751 21,839
Work-in-progress 20,423 17,149
Finished goods {including in transit ` 5,892 million (Previous year ` 2,777 million)} 19,051 13,540
Stores and spare parts {including in transit ` 4 million (Previous year ` 8 million)} 5,907 5,091
Other consumables {including in transit ` Nil (Previous year ` 662 million)} 2,316 1,662
Total 93,448 59,281

a. Inventories are net of non-cash inventory holding loss amounting to ` Nil (Previous year ` 11,822 million), refer note 34.
b. For details of inventories pledged as security against borrowings, refer note 19 and 23.
c. refer note 3(G) for basis of valuation.

98 99
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

11 Trade receivables 14 Loans (Current)

(` in million) (` in million)
Particulars As at As at Particulars As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Trade Receivables considered good - Unsecured * 19,679 12,703 Inter Corporate Deposits to a related party considered good - Unsecured 488 357
Trade Receivables - credit impaired 11 8 Total 488 357
19,690 12,711
- Less: Expected credit loss {refer note 42(C)(v)} (11) (8) 15 Other Financial Assets (Current)
Total 19,679 12,703
(` in million)
* Includes ` 14,821 million (Previous year ` 5,587 million) backed by letters of credit. Particulars As at As at
March 31, 2021 March 31, 2020
For the Company's exposure to credit and currency risks, and loss allowances related to trade receivables, refer note 42(C)(v).
Security deposits (A) 73 221
For amounts due from related parties, refer note 44.
Other receivables
For details of assets pledged as security against borrowings, refer note 19 and 23. Export incentive receivables {refer note 38(A)} 4,372 4,614
For details of bills discounting not meeting derecongnition criteria, refer note 23. -Related parties
- Considered good - 4
The Company has discounted bill receivables amounting to ` 15,920 million (As at March 31, 2020 ` 7,391 million), on non-
-Others
recourse basis. The management has assessed that the Company does not have any continuing involvement with the said bills
discounted, except in an unlikely scenario of dispute arising with regard to the existence of the receivable discounted. Accordingly, - Considered good 998 13,750
the discounting meets derecognition criteria and the money received has been netted off from the trade receivables discounted. - significant increase in credit risk 649 628
- Less: Expected credit loss {refer note 42(C)(v)} (649) (628)
12 Cash and cash equivalents (B) 5,370 18,368
(` in million) Interest accrued on bank deposits (C) 87 199
Particulars As at As at Derivative assets (D) 4,865 12,787
March 31, 2021 March 31, 2020 Total ((A)+(B)+(C)+(D)) 10,395 31,575
Balances with banks in:
For details of assets pledged as security against borrowings, refer note 19 and 23.
-Current accounts 3,162 7,083
-Exchange earners' foreign currency (EEFC) accounts 16,906 19,137
16 Other Current assets
-Deposits with original maturities less than 3 months* 13,118 3,799
(Unsecured and considered good, unless otherwise stated)
Cash on hand 0 -
Total 33,186 30,019 (` in million)
Particulars As at As at
*Short-term deposits are made with banks for varying periods of up to three months depending on the immediate cash requirements March 31, 2021 March 31, 2020
of the Company and to earn interest at the respective short-term deposit rates.
Advances recoverable in cash or in kind or for value to be received 955 928
13 Bank balances other than Cash and cash equivalents Prepaid expenses (refer note 44) 2,717 4,114
Balances with government authorities 353 375
(` in million)
Particulars As at As at (A) 4,025 5,417
March 31, 2021 March 31, 2020 Claims / other receivables

Earmarked bank balances (debenture / unclaimed debenture interest)# 78 10 - Considered good 590 562
Margin deposits* 8,388 6,478 (B) 590 562
Other deposits 45 4,568 Total ((A)+(B)) 4,615 5,979
Total 8,511 11,056 For details of assets pledged as security against borrowings, refer note 19 and 23.
# Earmarked bank balances include ` 68 million payable as purchase consideration to NRI shareholders of Vadinar Oil Terminal
Limited (formerly a subsidiary of the company) now merged with the Company.

* Mainly placed as margin for letters of credit facilities, guarantees, short term borrowings and long term borrowings obtained from
banks and to earn interest at the respective bank deposit rates.

100 101
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

17 Equity Share capital c) Details of shareholders holding more than 5% shares (including GDS) in the Company:
Particulars As at March 31, 2021 As at March 31, 2020
Particulars As at March 31, 2021 As at March 31, 2020
Number of % of shares Number of % of shares
Number of ` in million Number of ` in million
shares shares
shares shares
3,109,359 (3,109,359 as at March 31, 2020) GDS held
Authorised * 475,731,927 31.92% 475,731,927 31.92%
by Kesani Enterprise Company Ltd
Equity shares of ` 10 each 17,000,680,000 170,007 8,000,680,000 80,007
Equity shares held by Kesani Enterprise Company Ltd 256,594,520 17.21% 256,594,520 17.21%
Preference Shares of ` 10 each 1,000,000,000 10,000 1,000,000,000 10,000
Equity shares held by Rosneft Singapore Pte. Limited
Issued and subscribed 732,326,446 49.13% 732,326,446 49.13%
(Formerly known as Petrol Complex Pte. Limited)
Equity shares of ` 10 each 1,552,487,155 15,525 1,552,487,155 15,525
As per the records of the Company, including its register of shareholders/members, the above shareholding represents legal
Paid up
ownership of equity shares.
Equity shares of ` 10 each fully paid up 1,490,561,155 14,906 1,490,561,155 14,906
Add : Forfeited shares - Equity shares of ` 10 each 61,926,000 166 61,926,000 166 18 Other equity
15,072 15,072
(` in million)
* Pursuant to the Scheme which became effective from December 14, 2020 post filing of orders, approving the Scheme of Particulars As at As at
Amalgamation (“Scheme”) of Vadinar Oil Terminal Limited (“VOTL”) with the Company, with the Registrar of Companies, the March 31, 2021 March 31, 2020
Authorized Equity Share Capital of VOTL aggregating to `90,000 million was combined with the Authorized Share Capital of the General reserve 596 596
Company resulting in increase in Authorised Share Capital of the Company from `90,007 million (divided into 8,000,680,000 Retained earnings 122,263 117,573
equity shares of `10 each and 1,000,000,000 preference shares of ` 10 each) to `180,007 million (divided into 17,000,680,000 Other Comprehensive Income:
Equity Shares of `10/- each and 1,000,000,000 Preference Shares of `10/- each).
Cash flow hedge reserve (9,579) (22,005)
a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year : Foreign currency monetary item translation difference account (124) (188)

Particulars As at March 31, 2021 As at March 31, 2020 Other Reserves:

Number of ` in million Number of ` in million Capital reserve 609 609
shares shares Securities premium 78,014 78,014
Total 191,779 174,599
Equity Shares outstanding at the beginning of the year 1,490,561,155 14,906 1,490,561,155 14,906
Add : Equity shares issued - - - - General reserve: Represents the reserve mainly created on account of amount transfer from debenture redemption reserve on
Shares outstanding at the end of the year 1,490,561,155 14,906 1,490,561,155 14,906 redemption of debentures. It can be used for distribution to equity shareholders only after complying with restrictions contained
in The Companies (Declaration and Payment of Dividend) Rules, 2014.
The above includes 475,731,927 (Previous year 475,731,927) underlying equity shares represented by 3,109,359 (Previous
year 3,109,359) outstanding global depository shares (GDS). Each GDS represents 153 underlying equity shares. Retained earnings: Net earnings, retained by the Company to be reinvested in its core business. It also includes fair valuation
of property, plant and equipment and other assets done by the Company on transition to Ind AS and used as deemed cost of the
b) The rights, preferences and restrictions attached to each class of shares including restrictions on the distribution of concerned assets. Whether the Company can use these amount for distribution depend on specific requirements of the Companies
dividends and the repayment of capital: Act, 2013 (as amended) and rules framed thereunder. Particularly, unrealised fair value gains cannot be used for dividend
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of an equity share is entitled distribution.
to one vote per share. Cash flow hedge reserve: Changes in the fair value of derivatives/ hedging instruments that are designated and qualify as cash flow
The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual hedges are deferred in the “Cash Flow Hedge Reserve”. The gain or loss relating to the ineffective portion is recognised immediately
General Meeting. in the statement of profit and loss. Amounts deferred in the Cash Flow Hedge Reserve Account are recycled in the statement of
profit and loss in the periods when the hedged item is recognised and affects the statement of profit and loss, in the same line as
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the the hedged item.
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
Foreign currency monetary item translation difference account: Represents exchange differences arising on reporting of long-
held by the shareholders.
term foreign currency monetary items that are accumulated and amortised over the balance period of such long-term liability by
Holders of GDS are entitled to receive dividends, subject to the terms of the Deposit Agreement, to the same extent as the recognition as income or expense in each such periods.
holders of equity shares, less the fees and expenses payable under the Deposit Agreement and any Indian tax applicable to
Capital reserve: Created reserve can be utilised for issuance of bonus shares.
such dividends. The holders of GDS are entitled to instruct the Depository to exercise the voting rights, arising under the
equity shares represented by the GDS at general meetings and through postal ballot. In the event of liquidation the rights of Securities premium: The amount in the account represents the additional amount shareholders paid for their issued shares that
the GDS holders are equivalent to rights of the equity shareholders. was in excess of the par value of those shares. The same can be utilised for the items specified under section 52 of the Companies
Act, 2013.

102 103
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

19 Borrowings (` in million)
(` in million) Sr Particulars As at As at
No March 31, 2021 March 31, 2020
Particulars As at As at
March 31, 2021 March 31, 2020 vii) Rupee term loans are secured by first pari passu charge over both movable
and immovable fixed assets of power plant of the Company, both present and
Secured Borrowings - At amortised cost 5,972 6,116
future, Second charge, pari- passu with other term lenders on the current
Debentures assets of the Company.
Non convertible debentures 26,548 23,920 Total 105,853 106,710
Term loans*
(B) Repayment and other terms:
From banks 76,086 79,485
(` in million)
From financial institutions 3,219 3,305
Sr Particulars As at As at
Current maturities of long term debt included under other financial liabilities (refer note 25) (33,294) (7,910)
No March 31, 2021 March 31, 2020
Total 72,559 98,800
i) ECB Loans carry interest rate of 3 months / 6 months LIBOR + margin ranging
* refer note 42(C)(ii)for borrowings outstanding in foreign currencies from 3.60% p.a. to 5.00% p.a. are repayable in unequal instalments starting 7,857 12,861
from March 2015 and ending in June 2024.
(A) Security for term loans and funded interest facilities from banks and debentures
ii) Rupee loan and USD Loan from various lenders carry interest of respective
(` in million) lenders rate of 3/6 month MCLR/ 3 months USD LIBOR + spread ranging from
34,158 35,767
Sr Particulars As at As at 40 bps to 360 bps and is repayable in unequal instalments starting from March
No March 31, 2021 March 31, 2020 2018 and ending to September 2038.
i) ECB loan is secured by first charge, ranking pari passu with other term lenders iii) The rupee term loan facility from banks carry interest rate at bank's 1Y MCLR
on all present and future immovable assets (except certain leased out assets + 1.17% is repayable in 30 structured quarterly instalments beginning March 5,972 6,116
and fixed assets of power plant and port), all present and future movable assets, 31, 2020 and ending to September 2027.
7,857 12,861
security interest on the rights, title and interest under project documents, iv) Term loan carries an interest rate of MCLR/LIBOR + spread ranging from
insurance policies and second charge pari-passu with other term lenders on the 0.75% p.a. to 3.55% p.a. and repayable in unequal quarterly instalments ending 26,889 28,046
current assets. on September 2027 (including FCNR loans ` 8,689 million).
ii) Rupee and USD loan availed from various banks are secured by first charge, v) The rupee term loan facility from banks carry interest rate at bank's 3M/1Y
ranking pari- passu with other term lenders on the fixed assets ( movable and MCLR + spread ranging from zero to 0.70% is repayable in structured quarterly 4,429 -
immovable) , both present and future of the Company except land parcels and instalments ending to December 2027.
fixed assets (movable and immovable) earmarked for port and power plant.
34,158 35,767 vi) Non-convertible debentures carry fixed interest of 8% p.a. is repayable in a
Second charge, pari- passu with other term lenders on the current assets of the 2,568 -
single bullet in December 2025.
Company, first charge by way of assignment or security interest over all rights,
tiles, insurance and interest in all project documents to which the Company is a vii) Non-convertible debentures carry fixed interest of 9.50% p.a. is repayable in a
23,980 23,920
party, first charge on DSRA/margin as and when created. single bullet in July 2021.
iii) 9.5% Non convertible debentures are secured by first charge, ranking pari- Total 105,853 106,710
passu with other lenders on the fixed assets (movable and immovable except
certain leased out assets and fixed assets of power plant and port), both
23,980 23,920 20 Other financial liabilities (Non-Current)
present and future of the Company in relation to Project, Second charge,
pari- passu with other term lenders on the current assets of the Company, first (` in million)
charge by way of assignment or security interest over insurance policy. Particulars As at As at
March 31, 2021 March 31, 2020
iv) 8% Non convertible debentures are secured by second ranking pari passu
2,568 -
charge on movable fixed assets pertaining to the Port Facilities of the Company. Security deposits 193 76
v) Term loan from banks/ financial institutions are secured by first charge ranking Lease liabilities (refer note 39) 42,665 43,767
pari passu over all movable and immovable assets of the Company relating to
Derivative Liabilities 2,798 5,941
Port, both present and future, Intangible assets of the Company both present
26,889 28,046 Other liabilities - 2,568
and future, insurance contracts, title and interests under project documents
and second ranking pari passu charge on movable fixed assets relating to power Advances received from customers (refer note 44) 69,702 108,054
plant. Total 115,358 160,406
vi) Rupee loan availed from various banks are secured by first charge, ranking
pari- passu with other term lenders on the fixed assets (movable and
immovable) , both present and future of the Refinery except land parcels 4,429 -
earmarked for port, power and township. Second charge, pari- passu with other
term lenders on the current assets of the Company.

104 105
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

21 Taxation (C) Composition of deferred tax (assets) / liabilities:

(` in million) Deferred tax balance in relation to As at April Recognised Recognised Recognised As at March
Particulars As at As at 01, 2020 through in other in Equity 31, 2021
March 31, 2021 March 31, 2020 profit and comprehensive
loss income
Deferred tax liabilities (Net) 51,528 54,739 Difference in Property, plant and equipment 87,949 (6,088) - - 81,861
Total 51,528 54,739 and intangibles
Carried forward unabsorbed depreciation (17,900) 2,058 - - (15,842)
(A) Income tax (benefit) / expense Carried forward Business Loss (446) (135) - - (581)
Effect of mark to market accounting (623) (5,522) 4,209 - (1,936)
Particulars For the year ended For the year ended
Lease Accounting - Finance Lease (10,743) (533) - - (11,276)
March 31, 2021 March 31, 2020
Inventory- Provision for NRV (2,976) 2,976 - - -
(restated - refer
Others (522) (176) - - (698)
note 45)
Total 54,739 (7,420) 4,209 - 51,528
Total tax (reversed) in statement of profit and loss (7,420) (15,226)
Deferred tax charged / (reversed) to other comprehensive income / (loss) 4,209 (7,095) Deferred tax balance in relation to As at Recognised Recognised Recognised As at March
March 31, through in other in Equity 31, 2020
(B) The income tax expenses for the year can be reconciled to the accounting profit as follows: 2019 profit and comprehensive (on initial
Particulars For the year ended For the year ended loss income adoption of
March 31, 2021 March 31, 2020 Ind-AS 116)
(restated - refer Difference in Property, plant and equipment 110,562 (22,613) - - 87,949
note 45) and intangibles
(Loss) / Profit before tax (2,755) 9,957 Carried forward unabsorbed depreciation (25,397) 7,497 - - (17,900)
Statutory tax rate 25.17% 25.17% Carried forward Business Loss (512) 66 - - (446)
Effect of mark to market accounting (219) 6,691 (7,095) - (623)
Expected income tax (reversal) / expense at statutory rate (693) 2,506
Lease Accounting - Finance Lease - (8,885) - (1,858) (10,743)
Items giving rise to difference in tax Inventory- Provision for NRV - (2,976) - - (2,976)
Disallowances on tax assessment - 830 Others (603) 81 - - (522)
Deferred tax asset not recognised (net) 191 133 Total (A) 83,831 (20,139) (7,095) (1,858) 54,739
Effect of change in indexed cost of land (456) (243) MAT credit entitlement (Total B) (3,125) 3,125 - - -
Total (A+B) 80,706 (17,014) (7,095) (1,858) 54,739
Effect of change in Statutory tax rate - (18,458)
Impact on account of merger (refer (F) below) (6,969) - (D) The Company has not recognised deferred tax assets of ` 5,707 million (Previous year ` 5,707 million) on carried
forward short term capital losses in the absence of a reasonable certainty towards their utilisation. These losses
Effect of settlement of tax disputes under Vivaad Se Vishwas scheme (refer (G)
1,098 - can be carried forward up to March 31, 2026. Further, the Company has not recognised deferred tax assets of
below)
` 840 million (Previous year ` Nil) on carried forward long term capital losses (pursuant to VOTL merger) in the
Effect of change in tax rate on Goodwill (583) - absence of reasonable certainty towards their utilisation. These losses can be carried forward up to March 31, 2029.
Others (8) 6 Further, the Company has not recognised deferred tax assets of ` 290 million (Previous year ` 98 million) on account of
Total Income tax (reversal) (7,420) (15,226) disallowance of interest expenditure made by the Company under Section 94B of Income Tax Act, 1961 in the absence of
reasonable certainty towards its future claim. This interest expenditure for the year ended March 31, 2021 can be carried
Effective tax rate (Excluding effect of changes in tax provisions) 269.33% 32.46%
forward up to March 31, 2029 (Previous year’s up to March 31, 2028).
Effective tax rate (Including effect of changes in tax provisions) 269.33% -152.92%
(E) The Company had opted for lower corporate tax rate of 25.17% as provided under section 115BAA of the Income-tax Act,
1961 as introduced by the Taxation Laws (Amendment) Act, 2019 and accordingly has calculated its tax charge. Further,
the Company has also re-measured its deferred tax liabilities as at April 1, 2019 on the revised rates and a credit of ` 18,458
million was accounted for on such re-measurement in previous year.
(F) Consequent to the merger of VOTL as described in note 45, the carrying value of Property, Plant and Equipment (PPE) and
Goodwill under the tax laws have changed leading to a one-time deferred tax credit of ` 6,969 million getting recognised
during the year ended March 31, 2021 in the statement of profit and loss.
(G) During the current financial year, the Company has opted for settlement of eligible Income-tax disputes through Vivad se
Vishwas Scheme, 2020 introduced by the Government of India. Accordingly, during the year, deferred tax asset of ` 1,098
million has been reversed as a result of the same. Further, based on tax advice obtained, the Company is entitled to claim certain
expenditures (which are in the nature of timing difference) settled under this scheme in its future tax returns / assessments
and continues to recognise deferred tax assets of ` 2,649 million on the same.

106 107
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

22 Other non-current liabilities 24 Trade Payables

(` in million) (` in million)
Particulars As at As at Particulars As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020

Advance received from customers 12,296 22,885 Total outstanding dues of Micro and small enterprises (refer note 40) 177 37
Total 12,296 22,885 Total outstanding dues of creditors other than Micro and small enterprises (refer note 44) 117,372 96,377
Total 117,549 96,414
23 Short term borrowings (a) Trade payables includes suppliers’ credit of ` 13,428 million (Previous year ` 25,352 million).

(` in million) (b) Trade payables are non-interest bearing and are normally settled within 0-90 days.
Particulars As at As at
March 31, 2021 March 31, 2020 25 Other financial liabilities (Current)
Secured Borrowings (` in million)
Bank overdraft 10 - Particulars As at As at
March 31, 2021 March 31, 2020
Working capital demand loans from banks 7,273 4,250
Short term loans from banks 6,495 - Current maturities of long term debt (refer note 19) 33,294 7,910
Buyers' credits @ 9,548 4,523 Interest accrued but not due on borrowings 1,729 2,425
Total 23,326 8,773 Capital creditors 1,258 846
Security deposits 301 232
Security for short term borrowing: Lease liabilities (refer note 39) 2,135 1,317
(` in million) Unclaimed debenture interest and principal (secured)# 10 10
Particulars As at As at Advances received from customers (refer note 44) 62,820 73,721
March 31, 2021 March 31, 2020 Derivative Liabilities 1,929 9,426
a) Bank overdraft / cash credit from bank is secured by fixed deposits maintained with Other liabilities 3,248 1,870
a bank and carries interest rate of 1% over fixed deposits rate and is repayable on 10 0 Total 106,724 97,757
demand.
b) Working Capital Demand loan from bank is secured by first charge on all current # There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at balance sheet date.
assets both present and future including all receivables ranking pari passu basis
among lenders, second charge on fixed assets both present and future (except land 26 Other Current liabilities
parcels and fixed assets of power, port and township divisions on pari passu with 7,273 4,250 (` in million)
other lenders. These loans carries fixed interest rate of 7.15% p.a to 7.25% p.a and 3
Particulars As at As at
months marginal cost of funds based lending rate (MCLR) i.e 7.30% p.a. These loans
March 31, 2021 March 31, 2020
are repayable on demand.
c) Short Term Loan from bank is secured by first charge on entire current assets of the Statutory dues 14,383 8,325
Company (existing and future) on a pari passu basis among lenders; second charge on Advances received from customers 42,638 17,649
fixed assets both present and future (except land parcels and fixed assets of power, Export Obligation* 16 60
6,495 -
port and township divisions) on a pari passu with other lender,. The loan carries an
Total 57,037 26,034
interest rate of 6 months marginal cost of funds based lending rate (MCLR) plus
spread of 1.25% p.a and is repayable within 9 months of being drawn. * In respect of unfulfilled export obligation of ` 28,931 million (Previous year ` 63,413 million).
d) Buyers' credits is Secured by first charge on entire current assets of the Company
(existing and future) on a pari passu basis among lenders, second charge on fixed 27 Provisions (Current)
assets both present and future (except land parcel and fixed assets of power, port
9,548 4,523 (` in million)
and township divisions) on a pari passu with other lenders, The loan carries an
interest rate which is determined and fixed on date of availing of the loan which is Particulars As at As at
presently at 1.35% p.a to 3.09% p.a and are repayable within 60 days of being drawn. March 31, 2021 March 31, 2020
Total 23,326 8,773 Provision for employee benefits

@ refer note 42(C)(ii) for borrowings outstanding in foreign currencies Compensated absences 512 417
Gratuity (refer note 43) 449 386
Total 961 803

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

28 Revenue from operations Reconciliation of the amount of revenue from contract with customers with the contracted price
(` in million) (` in million)
Particulars For the year ended For the year ended Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Revenue from sale of products # Revenue as per contracted price 851,414 983,036
Sale of manufactured products 727,016 866,696 Adjustments
Sale of traded goods 146,264 129,202 Discount and incentives (3,324) (2,652)
Other operating revenues {refer note 38(A)} 1,726 2,785 Revenue from contract with customers 848,090 980,384
Total 875,006 998,683
# Comprises of revenue from contracts with customers of ` 848,090 million (Previous year ` 980,384 million) recognised at a point Performance obligation
in time and ` 25,190 million pertaining to hedging gain (Previous year ` 15,514 million pertaining to hedging gain) related to sales The performance obligation is satisfied upon delivery of the goods and services made as per the terms agreed with customers and
which are recycled from the cash flow hedge reserve when the underlying sales contract is executed and concluded. payment is generally due within 0 to 30 days from delivery except in case of adjustment against export advances. Pricing of sales
* Includes duty drawback income of ` 614 million (Previous year ` 1,024 million) and export obligation fulfilment income of ` 109 made under these export advances is based on market index at the time of supply. Hence it reflects fair value.
million (Previous year ` 305 million).
29 Other income
Disaggregated revenue information (` in million)
Particulars For the year ended For the year ended
Set out below is the disaggregation of the Company’s revenue from contracts with customers. The management believes that such
March 31, 2021 March 31, 2020
disaggregation better depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic
factors. Interest income

(` in million) - Bank deposits (carried at amortised cost) 1,096 1,665

Particulars For the year ended For the year ended - Other financial assets (carried at amortised cost) (refer note 38) 1,396 116
March 31, 2021 March 31, 2020 - Interest on income tax refund 408 39
2,900 1,820
Export sales 194,961 353,551
Other non-operating income 1,900 1,011
Domestic Oil marketing companies 186,981 215,630
Trade payable written back 851 -
Retail outlets 425,716 377,019
Other gains (net)
Others 40,432 34,184
- Net gain on derivative instruments- carried at FVTPL 4,904 3,752
Total revenue from contracts with customers 848,090 980,384 - Net gain on investments carried at FVTPL - 224
Total 10,555 6,807
(` in million)
Contract balances As at As at As at
March 31, 2021 March 31, 2020 March 31, 2019
30 Changes in inventories of finished goods, work-in-progress and stock-in-trade
(` in million)
Trade receivables * 19,679 12,703 36,891 Particulars For the year ended For the year ended
Contract liabilities 187,456 222,309 175,925 March 31, 2021 March 31, 2020
* Trade receivables are non-interest bearing and are generally on terms of 0 to 45 days. As on March 31, 2021, ` 11 million (Previous Opening inventories:
year ` 8 million) has been recognised towards provision for expected credit losses on trade receivables. - Finished goods 13,540 14,472
Contract assets are initially recognised for revenue earned from sale of the petroleum products when receipt of consideration is - Work-in-progress 17,149 18,737
conditional on successful completion of billing shipment. Upon completion of billing milestone, the amounts recognised as contract (A) 30,689 33,209
assets are reclassified to trade receivables. Closing inventories:

Contract liabilities include long-term / short-term advances received to deliver petroleum products. - Finished goods 19,052 13,540
- Work-in-progress 20,423 17,149
(` in million)
(B) 39,475 30,689
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 Non-cash inventory holding loss (part of exceptional Item,
(C) - 6,336
(refer note 34)
Revenue recognised out of contract liabilities outstanding at the beginning of the year 92,827 72,608 Net (Increase) in Inventory Total ((A)-(B)-(C)) (8,786) (3,816)
Changes in contract liabilities are mainly due to revenue being recognised against the same, receipt of new advances and foreign
exchange fluctuations.

110 111
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

31 Employee benefits expense* Notes:

(` in million) (a) Details of payments to Auditors included in Legal and professional fees
Particulars For the year ended For the year ended (` in million)
March 31, 2021 March 31, 2020
Particulars For the year ended For the year ended
Salaries, wages and bonus 5,962 6,224 March 31, 2021 March 31, 2020
Contribution to provident and other funds (refer note 43) 418 440 Statutory audit fee 20 26
Staff welfare expenses 322 317 Fee for review of interim financial information 11 14
Total 6,702 6,981 Fee for tax audit and transfer pricing and other certifications 2 2
* net of ` 302 million (Previous year ` 264 million) petrochemical division related expense capitalised (refer note 6). Fee for the audit of Special purpose financial statements 1 -
Fee for other Services 1 2
* net of ` 125 million (Previous year ` NIL) capitalised during turnaround (refer note 6).
Out of pocket expenses 0 2
Total 35 46
32 Finance costs
(` in million) (b) Details of expenditure on Corporate Social Responsibility included in Sundry expenses & Other current assets
Particulars For the year ended For the year ended i) The Company has incurred an amount of ` 192 million (Previous year ` 93 million) towards Corporate Social Responsibility
March 31, 2021 March 31, 2020
(CSR) as per Section 135 of the Companies Act, 2013 and is included in other expenses:
Interest
(` in million)
a) On debentures 2,334 2,285
Particulars For the year ended March 31, 2021 For the year ended March 31, 2020
b) On term loans 5,884 7,637
In - cash Yet to be paid In - cash Yet to be paid
c) Interest expenses on lease liabilities (refer note 39) 3,273 3,061
in - cash in - cash
d) On others 5,838 8,997
Exchange differences regarded as an adjustment to borrowing costs - 303 (A) Gross amount required to be spent by the
Nil 15
Company during the year
Derivative instruments-carried at FVTPL - 584
(B) Amount spent on:
Other finance charges 3,524 4,500
(i) Construction / acquisition of assets - - - -
Total 20,853 27,367
(ii) On purposes other than (i) above (for CSR
145 47 73 20
projects)
33 Other expenses*
Total 145 47 73 20
(` in million)
Particulars For the year ended For the year ended
ii) Excess CSR spent amount during the year
March 31, 2021 March 31, 2020
Consumption of chemical, catalyst, stores and spare parts 2,437 3,882 (` in million)
Product and Intermediate material storage charges 528 580 Particulars Excess spent Amount required Amount spent Excess spent
Consumption of power, fuel and electricity [excludes fuel consumed out of own Opening Balance to be spent during during the year FY Closing Balance
8,346 9,626 April 01, 2020 the year FY 20-21 20-21 March 31,2021
production ` 12,187 million (Previous year ` 16,996 million)]
Freight and Forwarding Charges 11,241 12,160 Excess CSR spent amount - - 192 192
Rent, rates and taxes 3,699 3,040
Insurance 1,269 1,112
Legal and professional fees {refer note (a) below} 2,449 3,483
Repairs and maintenance 1,865 1,828
Debit balance / doubtful debts written off net of provision 21 344
Director's Remuneration 40 -
Loss on disposal / discard of property, plant and equipment (net) 84 3
Exchange differences (net) 641 4,572
Sundry expenses {refer note (b) below} 2,167 3,994
Expected credit loss [refer note 42(C)(v)] 109 533
Total 34,896 45,157

* Net of ` 765 million (Previous year ` 1,545 million) petrochemical division related expense capitalised (refer note 6).
* Net of ` 3,452 million (Previous year ` 324 million) capitalised during refinery turnaround (refer note 6).

112 113
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

34 Exceptional items (` in million)

(` in million) Particulars As at As at
Particulars Year ended Year ended March 31, 2021 March 31, 2020
March 31, 2021 March 31, 2020
(v) The Reserve Bank of India (RBI) levied a penalty on the Company for delay in 2,412 2,412
A Non-cash inventory holding loss on closing inventories due to fall in oil prices* - 11,822 the allotment of equity against advances for Global Depositary Shares (GDS).
B Non-cash commodity derivative gains to hedge price risk - not designated as hedge - (7,278) The Company contested the penalty and appealed to the RBI Governor which
Total - 4,544 was rejected. The Company has challenged the same before the Bombay High
Court through a writ petition. In the meanwhile, the Enforcement Directorate
* Non-cash inventory holding loss include ` Nil (Previous year: ` 5,486 million) on raw materials and ` Nil (Previous year:` 6,336 initiated and closed an investigation in the matter and the order is awaited. The
million) on finished goods/Work-in-progress inventory. management is of the opinion that it should get relief and at most be liable for a
sum of ` 49 million only (Previous year `49 million) for which necessary provision
has been made in these financial statements.
35 Earnings per share
The following table reflects the profit and data on equity shares used in the basic and diluted EPS computations: Third party claims where the possibility of outflow of resources embodying economic benefits is remote, and includes show cause
notices which have not yet converted to regulatory demands, have not been disclosed as contingent liabilities. 
Particulars Year ended Year ended
March 31, 2021 March 31, 2020
37 Capital and other commitments
Profit attributable to ordinary equity share holders for basic and diluted (` in million)
(A) 4,665 25,183
earnings (` In million)
Particulars As at As at
Weighted average number of ordinary shares for basic and diluted EPS (B) 1,490,561,155 1,490,561,155 March 31, 2021 March 31, 2020
Nominal value of ordinary shares (`) 10/- 10/-
(A) Capital commitments :
Basic and Diluted earnings per share (`) (A/B) 3.13 16.89
Estimated amount of contracts remaining to be executed on capital account and not
41,994 6,132
provided for (net of advances)
36 Contingent liabilities
(` in million) (B)
Other commitments
(i) The Company has entered into an arrangement for standby bareboat charter with Essar Shipping (Cyprus) Limited
Particulars As at As at
(ESCL) for 3 ships at an average rate of USD 8,300 per day per ship for up to a period of 8 years ending on September
March 31, 2021 March 31, 2020
29, 2023. This bareboat charter gets implemented only if ESCL defaults in its payment with its lenders and the effective
(A) Claims against the Company not acknowledged as debts time notices are served on the Company. However, ESCL has agreed to indemnify the Company against all losses, in the
(i) Claims filed by creditors of an erstwhile subsidiary (Essar Oil & Gas Exploration 425 402 event of the bareboat charters becoming effective. In September, 2020, ESCL notified the Company that some of its dues
& Production Limited).The Company reserves its right to claim the entire amount to the lenders are overdue and that it is holding discussions for having the payment terms restructured. In view of the
back from the said entity. availability of the option with the Company to utilise the ships and considering the outstanding dues to be discharged by
(ii) Pursuant to a take or pay arrangement (arising out of assignment of a contract 19,423 17,763 ESCL are not significant, no material adjustment is expected to these financial statements even if the lenders were to ask
for specified periods) for supply of Natural gas, a claim has been raised on the the Company to implement the bareboat charter.
Company by the supplier, after adjusting an amount of ` 1,860 million realised
(ii) The Company has an obligation arising out of the regulatory guidelines to operate retail fuel outlets in India to setup
by invoking the Bank Guarantee provided by the Company which has since been
retail fuel outlets in remote service areas. The extent of the remote service areas is directly related to the outlets the
reimbursed by the assignor, as on March 31, 2021. The Company has disputed
Company has in the network. The Company has 236 number of retail outlets to be setup as on the balance sheet date and
the entire claim and the matter is currently under arbitration. The Company on
discussion with the Ministry of Petroleum & Natural Gas is in progress on the Company’s plan for fulfilling the obligation
the basis of legal advice does not expect any material liability to devolve on the
and seeking support in terms of time period of implementation and supply security of products in the remote service
Company.
areas. In line with directions of the Ministry of Petroleum & Natural Gas, the Company has issued Bank Guarantee
(iii) Other claims against the Company 1,878 1,888 amounting to ` 7,470 million (Previous year ` 7,470 million) in respect of obligation towards remote area retail outlets.
38 (A) Revenue from operations include ` 328 million (Previous period: ` 669 million) towards duty drawback on National
(B) Other money for which the Company is contingently liable Calamity Contingent Duty (NCCD) paid on imported crude which was recognised based on a favourable order passed
(i) In respect of income tax demands on various issues 284 270 by the Hon’ble Gujarat High Court. The Department in its notification dated May 12, 2020 fixed the brand rate on duty
(ii) In respect of Sales tax / VAT on sale of SKO and LPG to Oil marketing companies 50,049 42,311 drawback of NCCD, and eventually commenced the process of assessing the refund applications filed by the Company.
which were ultimately sold through Public Distribution system {includes likely During the financial year 2020-21, the Company received a refund of ` 564 million for the NCCD duty drawback related
reimbursement of ` 38,051 million (as at March 31, 2020 ` 33,758 million)} to the direct imports. The Department has allowed the Company to claim NCCD duty drawback refund on indigenous
crude oil which is procured from a domestic supplier on provision of additional documentation in support of such refund
(iii) Other demands of Sales tax /VAT 841 855
applications, and the Company has filed an appeal with the appellate authority for dispensing with the documentation
(iv) In respect of custom duty / excise duty / service tax mainly relating to classification 6,957 6,915 requirements as the management believes that the same are not required to be furnished. Accordingly, the Company has
of products sold, allowability of cenvat credit considered the total receivables of ` 4,221 million (as at March 31, 2020: ` 4,455 million) as good of recovery and classified
as current. The Company has also recognised interest income on the NCCD duty drawback amounting to ` 1,285 million,
based on merits of the case supported by a legal opinion, during the financial year ended March 31, 2021.

114 115
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(B) The Hon'ble Supreme Court of India in July 2015 had ordered a customer to pay ` 1,821 million (including interest of Particulars As at March 31, 2020
`1,387 million). Basis this order the Company has a recognised receivable of ` 990 million (As at March 31, 2020 ` 912 Right of use Lease liabilities Charged to Impact on
million) from the customer. The Company has assessed the recoverability of both the above balances as highly probable assets Profit & loss statement of
and hence has considered them as good of recovery. Account Cash flows
Long Term Leases
39 Leases As at April 01, 2019 36,783 41,795 - -
Company as a lessee Additions 1,839 1,839 - -
The Company has lease contracts for various items of land, plant & machinery, building, vehicles and other equipment used Deletion/discarded/Retirement (102) (123) (21) -
in its operations. Leases of plant and machinery generally have lease terms between 5 and 10 years, leases of land generally Remeasurement on account of change in term of (179) (179) - -
agreement
have lease terms between 20 and 30 years, while building and other equipment generally have lease terms between 5 and 20
Depreciation expense (2,368) - 2,368 -
years. The Company's obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Company
Interest accruals - 3,061 3,061 -
is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain Unrealised foreign exchange loss - 2,709 - -
financial ratios and some lease contracts include extension, termination options and variable lease payments. Payments - (4,018) - -
The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with As at March 31, 2020 35,973 45,084 5,408 -
low value. The Company applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases.
Current lease liabilities (refer note 25) - 1,317 - -
(` in million) Non-current lesae liabilities (refer note 20) - 43,767 - -
Particulars As at March 31, 2021
Cash flow - Lease payments
Right of use Lease liabilities Charged to Impact on
- Towards Principal - - - (840)
assets Profit & loss statement of
- Towards Interest - - - (3,178)
Account Cash flows
Total - - - (4,018)
Long Term Leases
As at April 01, 2020 35,973 45,084 - - Other Leases (included in other expenses)
Additions 2,955 2,955 - - Short term leases - - 296 -
Deletion/discarded/Retirement (36) (44) (8) - Low value leases - - 29 -
Remeasurement on account of change in term of (366) (366) - - Variable leases - - 19 -
agreement Total - - 344 -
Depreciation expense (3,275) - 3,275 -
Interest accruals 3,273 3,273 - As at March 31, 2020 35,973 45,084 5,752 (4,018)
Unrealised foreign exchange gain (895) - -
Payments (5,207) - -
40 Details of dues to micro and small enterprises
As at March 31, 2021 35,251 44,800 6,540 -
The information regarding principal and interest pertaining to micro and small enterprises based on available details (as per
Current lease liabilities (refer note 25) - 2,135 - - Section 22 of the Micro, Small and Medium Enterprises Development Act 2006) is as under:
Non-current lesae liabilities (refer note 20) - 42,665 - - (` in million)
Sr. Particulars As at As at
Cash flow - Lease payments No. March 31, 2021 March 31, 2020
- Towards Principal - - - (2,173) 1 Principal amount remaining unpaid to any supplier as at the end of the 177 37
- Towards Interest - - - (3,034) accounting year
Total - - - (5,207) 2 Interest due thereon remaining unpaid to any supplier as at the end of the 0 -
accounting year
Other Leases (included in other expenses) 3 The amount of interest paid along with the amounts of the payment made to - 0
Short term leases - - 60 - the supplier beyond the appointed day
Low value leases - - 191 - 4 Payments made beyond the appointed day during the year 112 5
Variable leases - - 70 - 5 Interest due and payable for the period of delay 0 0
Total - - 321 - 6 The amount of interest accrued and remaining unpaid at the end of the 0 -
accounting year
As at March 31, 2021 35,251 44,800 6,861 (5,207) 7 The amount of further interest due and payable even in the succeeding year, 0 -
until such date when the interest dues as above are actually paid

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

41 Capital Management 42 Financial Instruments

A) Categories of financial instruments :
The primary objective of the Company’s capital management is to maximise the shareholder value while safeguarding its abil-
Given below is the category wise carrying amount of Company's financial instruments:
ity to continue as a going concern.
As at March 31, 2021:
For the purpose of the Company’s capital management, capital includes issued capital, securities premium and all other equity (` in million)
reserves attributable to the equity holders. The Net debt comprises all long term and short term borrowings as well as export Particulars Fair value Fair value Amortised Total Total fair
advances having original maturities for more than 1 year less cash and bank balances. Bank loans availed by the Company are through profit through OCI Cost Carrying value
subject to certain financial covenants and the Company is compliant with these financial covenants on the reporting date as or loss - designated as value
per the terms of the loan agreements. There is no outstanding default on the repayment of loans (including interest thereon) cash flow hedge
as at March 31, 2021. Financial Assets
Loan* - - 488 488 488
The Company monitors its capital using gearing ratio, which is net debt divided to equity and underlying net debt. Trade receivables* 9,933 - 9,746 19,679 19,679
Cash and cash equivalent* - - 33,186 33,186 33,186
The amounts managed as capital by the Company for the reporting periods under review and gearing ratio are summarized as
Bank balances other than cash and - - 8,511 8,511 8,511
follows:
cash equivalent*
(` in million) Derivatives 147 4,765 - 4,912 4,912
Particulars As at As at Other financial assets* - - 8,134 8,134 8,134
March 31, 2021 March 31, 2020 Total 10,080 4,765 60,065 74,910 74,910
Financial Liabilities
Long term borrowings (refer note 19) 72,559 98,800
Long-term borrowings#* - 5,263 100,590 105,853 105,313
Short term borrowings (refer note 23) 23,326 8,773 Short-term borrowings* - 9,548 13,778 23,326 23,326
Upfront fees 848 1,237 Trade payables* - 65,565 51,984 117,549 117,549
Current maturity of long term borrowing (refer note 25) 33,294 7,910 Derivatives 103 4,624 - 4,727 4,727
Lease liability - 31,270 13,530 44,800 44,800
Lease liabilities (refer note 20 and 25) 44,800 45,084
Other financial liabilities* - 132,522 6,739 139,261 139,261
Export advances having original maturities for more than 1 year (current and non- 138,297 194,010 Total 103 248,792 186,621 435,516 434,976
current portion) (refer note 20 and 25)
Total debt 313,124 355,814 As at March 31, 2020 :
(` in million)
Less : Cash and cash equivalents (refer note 12) (33,186) (30,019)
Particulars Fair value Fair value Amortised Total Total fair
Less : Bank balances (refer note 13) (8,511) (11,056) through profit through OCI Cost Carrying value
Total cash and bank balances (41,697) (41,075) or loss - designated as value
cash flow hedge
Net debt (a) 271,427 314,739
Financial Assets
Equity share capital (refer note 17) 15,072 15,072
Loan* - - 357 357 357
Other equity (refer note 18) 191,779 174,599 Trade receivables* 5,422 - 7,281 12,703 12,703
Total equity 206,851 189,671 Cash and cash equivalent* - - 30,019 30,019 30,019
Equity and underlying net debt (b) 478,278 504,410 Bank balances other than cash and - - 11,056 11,056 11,056
cash equivalent*
Gearing ratio (a/b) 56.75% 62.40% Derivatives 437 12,612 - 13,049 13,049
Other financial assets* - - 20,062 20,062 20,062
Total 5,859 12,612 68,775 87,246 87,246
Financial Liabilities
Long-term borrowings#* - 5,609 101,101 106,710 106,214
Short-term borrowings* - - 8,773 8,773 8,773
Trade payables* - 30,559 65,855 96,414 96,414
Derivatives 456 14,911 - 15,367 15,367
Lease liability 33,081 12,003 45,084 45,084
Other financial liabilities* - 181,775 13,512 195,287 195,287
Total 456 265,935 201,244 467,635 467,139
# including current maturities of long-term borrowings
* The management assessed that the fair value of these financial assets and liabilities approximate their carrying amounts due
to the short term maturities of these instruments. For fair value of long term borrowings, refer below level wise disclosure.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

B) Level-wise disclosure of fair value for financial instruments requiring fair value measurement/ disclosure: (C) Financial risk management objectives
The Company’s principal financial liabilities, other than derivatives, comprise loans and overdrafts, export advances and trade
(` in million) payables. The management treats the export advances as financial instruments for risk management purposes. The main
Particulars As at As at Level Valuation techniques and key inputs purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets
March 31, 2021 March 31, 2020 such as trade receivables, cash and short-term deposits which arise directly from its operations. The Company also invests
Trade receivables 9,933 5,422 II Discounted cashflow - future cashflows are based on the surplus resources in mutual fund or similar instruments.
terms of trade receivables. Cashflows are discounted at the
The Company is subject to fluctuations in commodity prices and currency exchange rates due to nature of its operations.
current market rate reflecting current market risks.
Foreign currency 147 174 II Interest rate swaps, foreign exchange forward / option Risks arising from the Company’s financial instruments are commodity price risk, foreign currency risk, interest rate risk,
forward exchange contracts and commodity forward contracts are valued liquidity risk and credit risk. The Company enters into derivative transactions, primarily in the nature of commodity derivative
contracts-Assets using valuation techniques, which employs the use of market contracts, forward currency contracts, currency swap contracts, currency options contracts and interest rate swap contracts.
Foreign currency 70 16 II observable inputs. The most frequently applied valuation The purpose is to manage commodity price risk, currency risks and interest rate risks arising from the Company’s operations.
forward exchange techniques include forward pricing and swap models,
To mitigate risk, the Company may also designate existing foreign currency financial assets and liabilities as economic hedge
contracts-Liabilities using present value calculations. The models incorporate
Foreign currency option - 262 II various inputs including the credit quality of counterparties,
against highly probable sale/ purchases.
contracts-Assets foreign exchange spot and forward rates, yield curves of the The Company has a Risk Management Committee established by its Board of Directors overseeing the risk management
Foreign currency option 33 - II respective currencies, currency basis spreads between the
contracts-Liabilities
framework and developing and monitoring Company's risk management policies. The risk management policies are established
respective currencies, interest rate curves and forward rate
Commodity Derivative 4,107 11,764 II curves of the underlying commodity. to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identification and mapping controls
Contracts -Assets against this risk, monitor the risk and their limits, improve risk awareness and transparency. Risk management policies and
Commodity Derivative 1,557 10,118 II systems are reviewed regularly to reflect changes in the market conditions and Company's activities to provide reliable
Contracts -Liabilities
information to the management and the Board to evaluate the adequacy of the risk management framework in relation to
Currency swap contracts 658 848 II
-Assets the risk faced by the Company. The Board of Directors reviews and agrees policies for managing each of these risks which are
Currency swap contracts 2,675 4,611 II summarised below:
-Liabilities
Interest rate swap 392 622 II i) Commodity price risk
contracts -Liabilities The prices of refined petroleum products and crude oil are linked to the international prices. The Company’s revenues,
Advance received from 132,522 181,775 II Long-term advances are evaluated based on parameters cost and inventories are exposed to the risk of fluctuation in prices of crude oil and petroleum products in the international
export customers* such as interest rates, specific country risk factors, credit markets. From time to time, the Company uses commodity derivative instruments to hedge the price risk of forecasted
risk and other relevant risk characteristics of the advance. transactions such as forecast crude oil purchases and refined product sales. These derivative instruments are considered
The fair value is determined using the discounted cash flow
economic hedges for which changes in their fair value are recorded in the statement of Profit and Loss. However, in
method. The future cash flows are based on terms of the
advance. These cash flows are discounted at a rate that cases where the Company designates these derivative instruments as cash flow hedge, the effective portion of gain /
reflects current market rate and the current market risk. loss on derivative is recognised in other comprehensive income and accumulated in equity. The amount is reclassified to
Also, being foreign currency, amounts are restated at the statement of profit and loss when the hedged items impacts the statement of profit and loss.
closing rate.
Trade Payables 89,104 30,559 II Trade payables are evaluated based on parameters such The Company operates a risk management desk that uses hedging instruments to seek to reduce the impact of market
as specific country risk factors, credit risk and other volatility in crude oil and product prices on the Company’s profitability. The Company’s risk management desk uses a
relevant risk characteristics of the payables. The fair value range of conventional oil price-related financial and commodity derivative instruments such as futures, swaps and
is determined using the discounted cash flow method. The
options that are available in the commodity derivative markets. (The derivative instruments used for hedging purposes
future cash flows are based on terms of the trade payable.
typically do not expose the Company to market risk because the change in their market value is usually offset by an equal
These cash flows are discounted at a rate that reflects
current market rate and the current market risk. Also, being and opposite change in the market value of the underlying asset, liability or transaction being hedged). The Company’s
foreign currency, amounts are restated at the closing rate. open positions in commodity derivative instruments are monitored and managed on a daily basis to ensure compliance
Long term borrowings 105,313 106,214 II Long-term fixed-rate and variable-rate borrowings are with its stated risk management policy which has been approved by the management.
(including current evaluated by the Company based on parameters such
maturities) as interest rates, specific country risk factors, credit
risk and the risk characteristics of the financed project.
The fair value is determined using the discounted cash flow
method. The future cash flows are based on terms of the
borrowing. These cash flows are discounted at a rate that
reflects current market rate and the current market risk.

*Physical commodity contracts, when used for trading purposes or readily convertible into cash and designated as at FVTPL for
mitigating accounting mismatch, are treated as financial instrument. Unless designated as hedging instruments, such contracts
are measured at fair value and associated gains and losses are recognised in statement of profit and loss.

120 121
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Category wise break-up of commodity derivative contracts entered into by the Company and outstanding as at balance The following table details sensitivity to a 5% increase in the price of respective commodity. A positive number below
sheet date: indicates an increase in equity or profit and negative number would be an inverse impact on equity or profit.

Particulars Qty. in Barrels ('000) Fair value of assets/(liabilities) (` in million)

(` in million) Particulars Impact on Equity (net of taxes) Impact on Profit (net of taxes)
As at As at As at As at As at As at As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Designated as cash flow hedges Crude oil
Crude oil Buy Positions
Buy Positions Less than 1 year 16 (87) - -
Less than 1 year 8,117 8,062 (348) (1,662) Sell Positions
Sell Positions Less than 1 year (14) (6) - (27)
Less than 1 year (83) (65) 11 86
Petroleum products
Buy Positions
Petroleum products
Less than 1 year 462 (73) 9 (20)
Buy Positions
More than 1 year 2 (27) - (4)
Less than 1 year 59,000 59,375 3,403 (4,837)
Sell Positions
More than 1 year 3,600 40,000 47 (870)
Less than 1 year (744) (6) - (789)
Sell Positions Total (278) (199) 9 (840)
Less than 1 year (5,397) (2,325) (801) 1,649
Total (A) 65,237 105,047 2,312 (5,634) ii) Foreign currency risk management:
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
Not designated as cash flow hedges fluctuations arise. Exchange rate exposures are managed as per advice of Risk Management Committee (RMC) within
approved policy parameters.
Crude oil
Sell Positions a) The carrying amounts of the Company’s monetary assets and liabilities denominated in different currencies are as
Less than 1 year - (353) - 127 follows:
As at March 31, 2021 :
Petroleum products Particulars Assets Liabilities*
Buy Positions ` in million FC in million ` in million FC in million
Less than 1 year 5,400 2,300 237 (118) USD 32,068 436 353,961 4,815
More than 1 year - 6,000 - (108) EURO 43 0 5,048 59
Sell Positions Other Currencies 3 0 4 0
Less than 1 year - (12,190) - 7,378 TOTAL 32,114 359,013
Total (B) 5,400 (4,243) 237 7,279
As at March 31, 2020 :
Total (A + B) 70,637 100,804 2,549 1,645
Particulars Assets Liabilities*
The line items in the balance sheet that include the above hedging instruments are other financial assets and other ` in million FC in million ` in million FC in million
financial liabilities.
USD 49,030 650 380,369 5,047
Credit balance in cash flow hedge reserve of ` 2,312 million as at March 31, 2021 (debit balance of ` 5,634 million as at EURO 66 1 4,868 59
March 31, 2020) on commodity derivative (gross of tax) contracts have been recognised in other comprehensive income. Other Currencies 2 0 4 0
TOTAL 49,098 385,241

* includes borrowings in foreign currency USD 428 million (` 31,448 million) {(Previous year USD 432 million
(` 32,573 million)}.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

b) Outstanding foreign currency forward exchange and option contracts The following table details sensitivity to a 5% increase in foreign currency rates. A positive number below indicates
The Company has entered into foreign exchange forward and option contracts with the intention of reducing the an increase in profit or equity and negative number would be an inverse impact on profit or equity.
foreign exchange risk of recognised assets and liabilities. These foreign exchange forward and option contracts are (` in million)
not designated in hedge relationships and are measured at fair value through profit or loss. Particulars Impact on Profit (net of taxes) Impact on Equity (net of taxes)
Not designated in hedging relationship As at As at As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Particulars Notional amounts Fair value of assets/(liabilities) Receivable
(in Foreign Currency million) (` in million)
USD 1,200 1,834 - -
As at As at As at As at
EURO 2 2 - -
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Other Currencies 0 0 - -
Forward Contracts:
Buy US$
Payables
Less than 3 months 810 419 77 158
USD (3,802) (4,492) (9,136) (9,429)
EUR (189) (182) - -
Options:
Other Currencies (0) (0) - -
Buy Call / Sell Put US$
Less than 3 months 111 111 (33) 262 e) Currency swap contracts
The Company has also entered into currency swap contracts to cover the currency risk on forecasted sales. The
Sensitivity to a 5% increase in foreign currency rate is ` 2,532 million (Previous year ` 1,493 million) (net of tax). A
following table details the currency swap contracts outstanding at the end of the reporting period:
positive number indicates an increase in profit and negative number would be an inverse impact on profit.
Designated as cash flow hedges
c) The management has designated certain financial liabilities in foreign currency as cash flow hedges against
Sell US$ Notional amounts Fair value of assets / (liabilities)
highly probable future forecast sales. Such designation help the Company to reduce/ mitigate foreign exchange
(in USD million) (net) (` in million)
risk of related liabilities and highly probable sales as gain/ loss on restatement of liabilities is recognised in other
As at As at As at As at
comprehensive income. As at March 31, 2021 the Company has restated such liabilities amounting to ` 244,168
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
million equal to USD 3,322 million (Previous year ` 251,024 million equal to USD 3,330 million) at closing exchange
Less than 1 year 22 20 844 848
rate and has taken the resultant loss to cash flow hedge reserve.
1 year to 2 years 65 22 46 609
d) Unhedged currency risk position: 2 years to 5 years 279 325 (2,737) (4,433)
The foreign currency (FC) exposure of the Company as at balance sheet date that have not been hedged by a More than 5 years 14 33 (223) (786)
derivative instrument or otherwise are given below: Total 380 400 (2,070) (3,762)

As at March 31, 2021 : The line items in the balance sheet that include the above hedging instruments are other financial assets and other
Currency Assets Liabilities financial liabilities.

` in million FC in million ` in million FC in million Debit balance in cash flow hedge reserve of ` 1,594 million as at March 31, 2021 (debit balance of ` 2,464 million as
at March 31, 2020) (Gross of tax) on currency swap contracts have been recognised in other comprehensive income.
USD 32,068 436 101,620 1,382
There are no hedge ineffectiveness on currency swap contracts during the reporting periods.
EURO 43 0 5,048 59
Other Currencies 3 0 4 0 Sensitivity to a 5% increase in foreign currency rate is ` 1,148 million (Previous year ` 1,276 million) (net of tax). A
Total 32,114 106,672 positive number indicates a decrease in equity and negative number would be an inverse impact on equity.

As at March 31, 2020 : iii) Interest rate risk

Currency Assets Liabilities Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
` in million FC in million ` in million FC in million changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily
to the Company’s long-term debt obligations with floating interest rates.
USD 49,030 650 120,054 1,593
EURO 66 1 4,868 59 The borrowings of the Company are denominated in rupees and US dollars with a mix of floating and fixed interest rate.
Other Currencies 2 0 4 0 The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk.
Total 49,098 124,926 The Company has exposure to interest rate risk, arising principally on changes in base lending rates and LIBOR rates.
Hedging activities are evaluated regularly to align with interest rate views and define risk appetite, ensuring that the
most cost effective hedging strategies are applied.

124 125
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

The following table provides a breakdown of the Company’s fixed and floating rate liabilities: Not designated as cash flow hedges

(` in million) Outstanding Contracts (Floating to Fixed)

Particulars As at As at Particulars Notional amounts Fair value of liabilities
March 31, 2021 March 31, 2020 (in USD million) (` in million)
As at As at As at As at
Fixed rate borrowings 31,405 27,306
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Floating rate borrowings 98,623 89,414
Less than 1 year 6 29 (191) (206)
Lease liabilities (refer note 20 and 25) 44,800 45,084
1 year to 2 years 114 6 (84) (200)
Export advances having original maturities for more than 1 year (current and 138,297 194,010 2 years to 5 years - 113 - (34)
non-current portion) (refer note 20 and 25)
Total 120 148 (275) (440)
Total 313,125 355,814
A 50 basis points increase (decrease) in interest rate and all other variables held constant would result in ` 46 million
Less: Upfront fee (848) (1,237) (Previous year: ` 38 million) (net of tax) increase (decrease) in profit.
Total 312,278 354,577
iv) Liquidity Risk
If interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company's, profit The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the
for the year ended March 31, 2021 would decrease / increase by ` 887 million (Previous year ` 1,060 million) (net of tax). maturity of their financial investments, committed funding and projected cash flows from operations. The following
This is mainly attributable to the Company's exposure to interest rates on its variable rate liabilities. tables detail the Company's remaining contractual maturity for its derivative and non-derivative financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
Interest rate swap contracts based on the earliest date on which the Company can be required to pay. The tables include both interest and principal
Under interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rates
existing at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company
interest amounts calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate
may be required to pay. Details of maturity profile are as given below.
the risk of changing interest rates on the cash flow exposures on the variable rate loan. The following tables detail the
(` in million)
nominal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period.
As at March 31, 2021 : < 1 Year 1 > 5 Years > 5 Years Total
Certain interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are
Long term Borrowings including future interest 40,546 55,649 47,422 143,617
designated as cash flow hedges in order to reduce the Company's cash flow exposure resulting from variable interest
Short Term Borrowings including future interest 23,865 - - 23,865
rates on borrowings. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount
Trade payables 117,549 - - 117,549
accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt
Lease Liabilities including future interest 5,283 18,733 54,989 79,005
affect profit or loss. Other financial liabilities including future interest on 71,260 72,642 - 143,902
Designated as cash flow hedges export advance
Derivatives 1,929 2,798 - 4,727
Outstanding Contracts (Floating to Fixed) Total 260,432 149,822 102,411 512,665

Notional amounts Fair value of liabilities (` in million)

(in USD million) (` in million) As at March 31, 2020 : < 1 Year 1 > 5 Years > 5 Years Total
Particulars
As at As at As at As at Long term Borrowings including future interest 17,237 73,622 66,044 156,903
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 Short Term Borrowings including future interest 8,927 - - 8,927
Less than 1 year 6 6 (59) (63) Trade payables 96,416 - - 96,416
1 year to 2 years 7 6 (42) (59) Lease Liabilities including future interest 4,493 18,280 58,983 81,756
Other financial liabilities including future interest on 91,765 105,167 11,735 208,667
2 years to 5 years 11 18 (16) (60)
export advance
Total 24 30 (117) (182) Derivatives 9,426 5,941 - 15,367
The line items in the balance sheet that include the above hedging instruments are other financial liabilities. Total 228,264 203,010 136,762 568,036

Debit balance in cash flow hedge reserve of ` 60 million as at March 31, 2021 (debit balance of ` 107 million as at March The Company has undrawn committed facilities as at March 31, 2021 of ` 57,086 million (` 75,174 million as at March 31,
2020) with maturities ranging from one to two years.
31, 2020) on interest rate swap derivative contracts (gross of tax) has been recognised in other comprehensive income.
There are no hedge ineffectiveness on interest rate swap contracts during the reporting periods. v) Credit risk
A 50 basis points increase (decrease) in interest rate and all other variables held constant would result in ` 12 million Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
(Previous year: ` 25 million) (net of tax) increase (decrease) in equity. Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
Company's credit risk arises principally from the trade receivables, investments, cash & bank balances and derivatives.

126 127
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Trade receivables: 43. Defined benefit plans

Customer credit risk is managed centrally by the Company and is subject to established policy, procedures and control
(1) Defined benefit plans :
relating to customer credit risk management. Credit quality of a customer is assessed based on extensive credit rating
and individual credit limits and approved in accordance with the Delegation of Authority. i) Gratuity Plan
In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the “Gratuity
Credit risk on receivables is also mitigated, to some extent, by securing the same against letter of credit and guarantees
Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested
of reputed nationalised and private sector banks. Trade receivables consist of a large number of customers spread across
employees at retirement, disability or termination of employment being an amount based on the respective employee’s
geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly
last drawn salary and the number of years of employment with the Company. The Gratuity plan is a funded plan and the
monitored and appropriate action is taken for collection of overdue trade receivables. The concentration of credit risk is
Company makes contribution to LIC of India / SBI Life Insurance in India.
limited due to the fact that the customer base is large and unrelated.

The credit period on sale of goods ranges from 0 to 30 days with or without security. The Company has used a practical (` in million)
expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The provision Sr. Particulars Gratuity (Funded)
matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected No. As at As at
credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision March 31, 2021 March 31, 2020
matrix. The history of trade receivables shows a negligible allowance for bad and doubtful debts. Given below is the A Net assets / liability recognised in the balance sheet
ageing of trade receivables of the Company: i Present value of defined benefit obligation 926 853
ii Fair value of plan assets 477 467
Ageing of trade receivables (gross):
iii Funded status - deficit (iii = ii-i) (449) (386)
(` in million)
iv Net assets / (liability) recognised in the balance sheet (449) (386)
Particulars As at As at
March 31, 2021 March 31, 2020
B Expenses recognised in profit and loss for the year
Not due 18,904 11,536
i Service cost 82 77
0-30 days 773 1,104
ii Net Interest cost 24 26
31-180 days 9 63
Components of defined benefit costs recognised in Profit and loss 106 103
More than 181 days 4 8
i Actuarial losses - experience (50) 46
Total 19,690 12,711
ii Actuarial losses/(gains) - assumptions 12 (63)
The Company does not have a legal right of offset against any amounts owed by the Company to the counterparties. iii Return on plan assets greater than discount rate 2 1
Trade receivables have been given as collateral towards borrowings (refer note 19 and 23). Expected credit losses are Components of defined benefit costs recognised in Other Comprehensive (36) (14)
provided based on the credit risk of the counterparties (refer note 11). Income
Total expenses 70 89
Investments, cash and bank balances and derivatives C Change in obligation and assets
The Company's treasury function manages the financial risks related to the business. The Treasury function focuses on i Change in defined benefit obligation
capital protection, liquidity and yield maximisation. Investment of surplus funds are made in reputed mutual funds and a Defined benefit obligation at beginning of the year 853 781
bank deposits. Counterparty credit limits are reviewed and approved by Board/Audit Committee of the Company. These b Current Service cost 82 77
limits are set to minimise the concentration of risks and therefore mitigates the financial loss through counterparty's c Interest cost 53 54
potential failure to make payments. Expected credit losses are provided based on the credit risk of the counterparties. d Acquisition adjustment / Transfer Out @ 3 -
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with e Actuarial losses - experience (50) 46
high credit-ratings assigned by international credit rating agencies. Further, commodity derivative contracts are entered f Actuarial losses - demographic assumptions 12 25
only with international over the counterparties having high credit rating and thus the risk of default is minimised. g Actuarial losses/(gains) - financial assumptions - (88)
h Benefit payments (28) (43)
Movement in the expected credit loss allowance i Defined Benefit obligation at the end of the year 925 852
(` in million) ii Change in fair value of assets
Particulars As at As at a Fair value of plan assets at the beginning of the year 467 345
March 31, 2021 March 31, 2020 b Acquisition adjustment / Transfer Out@ 5 3
Balance at the beginning of the year 974 441 c Interest income on plan assets 29 28
Expected credit loss recognised (net) 109 533 d Contributions made 6 135
Balance at the end of the year 1,083 974 e Return on plan assets lesser than discount rate (2) (1)
The Company's maximum exposure to the credit risk for the components of the balance sheet as at March 31, 2021 and f Benefits payments (28) (43)
March 31, 2020 is the carrying amounts mentioned in note 8, note 11, and note 15 g Fair value of plan assets at the end of the year 477 467

128 129
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(` in million) Sensitivity Analysis:

Sr. Particulars Gratuity (Funded) Method used for sensitivity analysis:
No. As at As at
March 31, 2021 March 31, 2020 The sensitivity results above determine their individual impact on the Plan's end of year Defined Benefit Obligation.
In reality, the Plan is subject to multiple external experience items which may move the Defined Benefit Obligation in
D Actuarial assumptions
similar or opposite directions, while the Plan's sensitivity to such changes can vary over time.
1 Discount rate (per annum) 6.50% 6.50%
2 Rate of salary increase 9.00% 9.00% Sr. Particulars Gratuity
3 Rate of Withdrawal Rate 6.00% 8.00% No. As at As at
4 Mortality Indian Assured Lives Mortality March 31, 2021 March 31, 2020
(2006-08) Ult. Modified Increase/(decrease) in DBO
E Percentage of each category of plan assets to total fair value of plan A) Discount Rate :
assets Defined benefit obligation 926 853
Administered by Life Insurance Corporation of India / State Bank Of India 100% 100% Discount rate 6.50% 6.50%
F Employer’s best estimate of contributions expected to be paid to the plan 71 98 1. Effect on DBO due to 0.5% increase in Discount Rate (36) (30)
during the annual period beginning after the balance sheet date 2. Effect on DBO due to 0.5% decrease in Discount Rate 39 32
B) Salary Escalation Rate :
@ Employees were transferred from / to related parties / other body corporates with credit for past services.
Salary Escalation rate 9.00% 9.00%
- Figures in bracket indicates negative value. 1. Effect on DBO due to 0.5% increase in Salary Escalation Rate 26 22
2. Effect on DBO due to 0.5% decrease in Salary Escalation Rate (26) (21)
Notes : Weighted average duration of the defined benefit obligation is 7 years as at March 31, 2021 ( 6 years as at March
C) Withdrawal Rate :
31, 2020).
Attrition rate 6.00% 8.00%
These plans typically expose the Company to actuarial risks such as: interest rate risk, salary risk and demographic
 1. Effect on DBO due to 5.00% increase in Withdrawal Rate (27) (21)
risk 2. Effect on DBO due to 5.00% decrease in Withdrawal Rate 45 33
1 Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If
ii) Provident Fund :
bond yields fall, the defined benefit obligation will tend to increase.
Based on actuarial valuation in accordance with Ind AS 19 for interest rate guarantee of exempted provident fund liability
2 Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation. of employees, there is no interest shortfall in the funds managed by the trust and hence there is no further liability as
at March 31, 2021 and March 31, 2020. Having regard to the assets of the Fund and the return on the investments, the
3 Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include
Company does not expect any deficiency in the foreseeable future.
mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation
is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It Eligible employees of the Company receive benefits from a provident fund, which is a defined benefit plan. Both the eligible
is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the
employee typically costs less per year as compared to a long service employee. covered employee’s salary. The Company contributes a portion to the Provident Fund Trust. The trust invests in specific
designated instruments as permitted by Indian law. The plan assets have been primarily invested in government securities
The defined benefit obligations shall mature after year ended March 31, 2021 as follows:
and high quality corporate bonds.
Particulars (` in million)
The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government.
As at March 31 March 31, 2021
2022 71 The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust
2023 86 and the notified interest rate. The actuary has provided a valuation for provident fund liabilities using the deterministic
2024 96 approach guidance issued by Actuarial Society of India. The present value of benefit obligation as at March 31, 2021 is `
2025 107 4,352 million (` 3,427 million as at March 31, 2020) as per the actuarial report and the fair value of plan assets is higher
2026 100 than the same as at each reporting date. Hence, there is no shortfall as at March 31, 2021 and March 31, 2020.
March 31, 2027 to March 31, 2031 606
Key assumptions used in determining the present value obligation of the interest rate guarantee are the Government
Particulars (` in million) of India (GOI) bond yield 6.50% (March 31, 2020 6.50 %), Remaining term to maturity of portfolio 4 years (March 31,
As at March 31 March 31, 2020 2020: 5 years) and Expected guaranteed interest rate 8.50% (March 31, 2020 8.50%) . The Company contributed `
2021 98 202 million and ` 201 million during the years ended March 31, 2021 and March 31, 2020, respectively. The same
2022 89 has been recognized in the Standalone Statement of Profit and Loss under the head employee benefit expense.
2023 90 Each year, the Board of Trustees reviews the level of funding in the provident fund plan. Such a review includes the asset-
2024 100 liability matching strategy and investment risk management policy. This includes employing the use of annuities and
2025 118
longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual
March 31, 2026 to March 31, 2030 581
review.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(2) Defined contribution plans : A. Transactions with related parties

Company's contribution to superannuation fund, provident fund and pension fund aggregating to ` 25 million, ` Nil and ` 104 (` in million)
million (Previous year ` 26 million, ` 6 million and ` 100 million) respectively are recognised in the statement of profit and loss Nature of transactions Enterprises having Subsidiaries Total
as and when the contributions are due. There is no obligation other than the contribution payable to the respective trusts. significant influence
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
44 Related party disclosures Advance received from customers
Trafigura Group 5,843 29,641 - - 5,843 29,641
I. Names of related parties and description of relationship: Total 5,843 29,641 - - 5,843 29,641
Enterprises having significant influence Export advances novated
Trafigura Group% 8,561 18,083 - - 8,561 18,083
Rosneft Group comprises Rosneft Oil Company and its controlled entities
Total 8,561 18,083 - - 8,561 18,083
Trafigura Group comprises Trafigura Group Pte. Limited and its controlled Sale of products (refer note (i) below)
entities Trafigura Group # 59,233 89,627 - - 59,233 89,627
Rosneft Group - 105,856 - - - 105,856
UCP Group comprises UCP PE Investments Limited and entities under common
control Total 59,233 195,483 - - 59,233 195,483
Interest income
Coviva Energy Terminals Limited - - 2 2 2 2
Subsidiaries Coviva Energy Terminals Limited (CETL) Total - - 2 2 2 2
Enneagon Limited (ENL) (Liquidated on January 14, 2020) Purchase of raw material (refer note (i)
below) / Other consumable
Nayara Energy Global Limited (under liquidation)
Rosneft Group - 127,853 - - - 127,853
Nayara Energy Singapore Pte Limited (incorporated on September 15, 2020) Trafigura Group 17,885 62,760 - - 17,885 62,760
Vadinar Oil Terminal Limited (VOTL) (Up to December 14, 2020) Total 17,885 190,613 - - 17,885 190,613
Other consultancy services
United Capital Partners Group** 117 233 - - 117 233
Key management personnel Mr. Charles Anthony Fountain, Executive Chairman Trafigura Group 186 64 - - 186 64
Mr. Prasad K. Panicker, Director & Head of Refinery (From February 17, 2020) Total 303 297 - - 303 297
Receiving of freight service
Mr. C. Manoharan, Director & Head of Refinery (Up to December 19, 2019)
Trafigura Group 793 - - - 793 -
Mr. Didier Casimiro , Director (Up to February 21, 2020) Total 793 - - - 793 -
Mr. Alexander Romanov, Director Product and raw material consultancy
services (refer note (ii) below)
Mr. Chin Hwee Tan, Director
Trafigura Group 672 790 - - 672 790
Mr. Alexey Karavaykin, Director (Up to January 30, 2020) Rosneft Group 67 704 - - 67 704
Mr. Jonathan Kollek, Director Total 739 1,494 - - 739 1,494
Interest expenses
Mr. Alexander Bogdashin, Director (Up to January 30, 2020)
Trafigura Group 763 389 - - 763 389
Mr. Krzysztof Zielicki Antoni, Director Total 763 389 - - 763 389
Ms. Naina Lal Kidwai, Independent Director Trade payable written back
Rosneft Group 827 - - - 827 -
Mr. Deepak Kapoor, Independent Director
Total 827 - - - 827 -
Mr. Alexey Lizunov, Director (From January 30, 2020) Inter corporate deposits given@
Ms. Avril Conroy, Director (From May 23, 2020) Coviva Energy Terminals Limited - - 162 342 162 342
Total - - 162 342 162 342
Ms. Victoria Cunningham, Director (From January 30, 2020)
Inter corporate deposits refund received
Mr. Alois Virag, Chief Executive Officer (From April 01, 2021) Coviva Energy Terminals Limited - - 31 - 31 -
Mr. B. Anand, Chief Executive Officer (Up to March 31, 2021) Total - - 31 - 31 -
including taxes wherever applicable.

Other related party Nayara Energy Limited Employees' Provident Fund (formerly known as Essar Oil % During the year ended March 31, 2021, the export advance contracts backed by export performance bank guarantees by a lender worth
Limited Employees' Provident Fund) (Controlled Trust) USD 117 million (equivalent to ` 8,561 million) (During the year ended March 31, 2020, the amount was USD 255 million (equivalent to
` 18,083 million)) obtained by the Company were novated under a tripartite agreement between the Company, the former buyer, and
Trafigura Group, whereby Trafigura Group has paid the outstanding advances to the former buyer and going forward all the supply against
such advances shall be made to Trafigura Group as per delivery schedule stated in such contracts. The terms and conditions of novated
contracts remain significantly unchanged.

132 133
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

**including ` 91 million capitalised during year ended March 31, 2021 (for the year ended March 31, 2020 : ` 172 million). (` in million)
# Includes sales of finished goods of ` 13,032 million (Previous year ` 18,545 million) pursuant to long term arrangements entered Enterprises having Subsidiaries Total
between the Company and a third party and the said third party and Trafigura Pte. Ltd. significant influence
Nature of balances As at As at As at As at As at As at
@ The Company has given inter-corporate deposits to its subsidiary as interest free and repayable on demand.
March 31, March 31, March 31, March 31, March 31, March 31,

2021 2020 2021 2020 2021 2020
B. Transactions with other classes of related parties
Prepaid interest (interest and consultancy
(` in million) charges)
As at As at Trafigura Group 363 523 - - 363 523
March 31, 2021 March 31, 2020 Total 363 523 - - 363 523
i) Key management personnel (Short term employee benefits)@ 312 267 Liabilities
@including employer contribution to provident fund and exclusive of provisions for Other financial liabilities
liability in respect of leave earned and gratuity, since this is based on actuarial valuation Trade payables (refer note (iii) & (iv) B
done on an overall basis for all employees. below)
ii) Key management personnel (Director Sitting Fees) 14 11 Rosneft Group 791 24,549 - - 791 24,549
iii) Key management personnel (Commission and Remuneration to Directors) * # 78 37 Trafigura Group 161 371 - - 161 371
UCP Group 94 6 - - 94 6
iv) Contribution during the period (includes Employees' share and contribution) to the 531 509
Total 1,046 24,926 - - 1,046 24,926
controlled trust
Other liabilities
Trafigura Group - 1,535 - - - 1,535
* The Company has inadequacy of profits under Section 198 of the Companies Act, 2013 (“Act”), as a consequence of which the
Total - 1,535 - - - 1,535
remuneration proposed to be paid to the Independent Directors for FY 2020-21 is in excess of permissible limits of Section 197 of Advance received from customers (refer
the Act by ` 40 million. In compliance with the amendments introduced, inter-alia, in Section 197 and Schedule V of the Act, which note (iv) C below)
became effective from March 18, 2021, the Company is in the process of seeking approval of the shareholders, by way of Special Trafigura Group 31,151 46,027 - - 31,151 46,027
Resolution at the ensuing Annual General Meeting, for the remuneration proposed to be paid to the Independent Directors. Total 31,151 46,027 - - 31,151 46,027
- -
# The aforesaid amount is inclusive of remuneration of ` 38 million paid by Vadinar Oil Terminal Limited (erstwhile subsidiary of ## Includes receivable of ` 1,561 million (as at March 31, 2020: ` 668 million) for sales of finished goods of pursuant to long term
the Company and now merged with the Company effective December 14, 2020 pursuant to the Order passed by Hon’ble National arrangements entered between the Company and a third party and the said third party and Trafigura Group.
Company Law Tribunal) to its directors. Notes:

C. Balances with related parties : (i) Rosneft Group and Trafigura Group under their respective contracts with the Company has the right to make the first offer for
both sale of raw material and purchase of finished products. Where the transaction with the above parties is executed without
(` in million) calling for comparative quotations, the same are done based on the Company’s internal assessment. Where quotations are
Enterprises having Subsidiaries Total called for and the Company is able to get a better offer, these two parties reserve the right to match the offer, in which case
significant influence the Company is obliged to transact with them. For supplies of finished products made against advance payments, premium
Nature of balances As at As at As at As at As at As at / discounts to the market price index are pre-negotiated based on similar process. Where the Company participates in the
March 31, March 31, March 31, March 31, March 31, March 31, tenders floated by these parties for purchasing raw material, price to be quoted are determined on a case to case basis based
2021 2020 2021 2020 2021 2020 on Company’s internal assessment and are approved by the management of the Company.
Assets
Financial assets
(ii) Rosneft Group and Trafigura Group have been advising the Company on regular basis and providing insight into the market
Trade receivables (refer note (iv) A below)
dynamics which helps in strategizing the crude procurement and sale of finished products. In consideration for the same, the
Rosneft Group - - - - - -
Company is paying a fee of US $ 0.1 for every barrel of raw materials purchased and finished products exported.
Trafigura Group## 4,118 668 - - 4,118 668 (iii) During the year ended March 31, 2021, the Company terminated its aforementioned contract with a Rosneft Group entity.
Total 4,118 668 - - 4,118 668 Further, the said Rosneft Group entity has unilaterally assigned some of its receivables from the Company under the said
Loans contract to and in favour of two other Rosneft Group entities, which is subject to regulatory approvals. Subsequent to such
Inter corporate deposits assignment, one of the assignees has discontinued to be a related party of the Company, and therefore, the amount payable to
Coviva Energy Terminals Limited - - 488 357 488 357 such assignee as on the balance sheet date amounting to ` 22,384 million is excluded from the above disclosures.
Total - - 488 357 488 357
Other financial assets (iv) Terms of receivables / payables:
Other receivables A. Trade receivables are unsecured, non-interest bearing collected within 30 days from the date of sale.
Rosneft Group - 8 - - - 8
Trafigura Group - 11 - - - 11 B. Trade payables are non-interest bearing and are settled within 30 days of purchase.
Coviva Energy Terminals Limited - - - 4 - 4 C. Advance from customers also include interest bearing advances, which are settled through supply of goods over a period
Total - 19 - 4 - 23 of 1 to 5 years at pre-determined mechanism of the consideration.

134 135
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

45 Business combination (` in million)

a. Merger of Vadinar Oil Terminal Ltd ("VOTL") As at
Particulars
April 01, 2019
The Scheme of Amalgamation of Vadinar Oil Terminal Ltd (“VOTL”) with the Company, was approved by the Hon’ble
(b) Deferred tax liabilities (net) 8,366
National Company Law Tribunal ("NCLT") Ahmedabad Bench vide its Order dated November 13, 2020. The certified
copy of the Order along with certified copy of the Scheme was filed by the respective companies, with the Registrar of
Current liabilities
Companies on December 14, 2020 (“Effective Date”). Consequently, VOTL has been merged with the Company w.e.f.
(a) Financial Liabilities
December 14, 2020.
(i) Trade Payables 44
Given below is the relationship history: (ii) Other Financial Liabilities 1,914
(b) Other Current Liabilities 159
Name of the subsidiary % holding Detail of activities Relationship history
(c) Provisions 15
Vadinar Oil Terminal Limited 97.63% Storage and Handling Subsidiary before beginning of
TOTAL LIABILITIES 42,160
("VOTL") of Crude and Product of the comparative period
Company Net Assets - Acquired at values appearing in the consolidated financial statements of the 110,453
Company (A)
Based on the accounting prescribed in the NCLT Scheme which is in accordance with the accounting prescribed in
Appendix C to Ind AS 103, the Company has applied the pooling of interest method to account for the merger since Value of investments given up 105,104
the combining entities are under common control. The Company has also applied guidance given in ITFG Bulletin 9 and Payable to NCI @ 2,668
used carrying amounts as appearing in the consolidated financial statement of the Company while applying the pooling Adjusted against other assets 100
of interest method. Based on the requirements of Appendix C to Ind AS 103, the Company has restated the financial Adjusted against other liabilities (1,872)
information appearing in these financial statements in respect of prior periods as if the merger had occurred from the Total Consideration Paid (B) 106,000
beginning of the preceding period. VOTL merger is restated from the beginning of the comparative period, viz. April 1,
2019. Reserves created on merger (A-B) 4,453
b. Details of VOTL assets and liabilities taken over : @ As an integral part of the aforesaid Scheme, the non-controlling shareholders of VOTL who were resident in India were
(` in million) issued Non-Convertible debentures (NCDs) having fair value, face value and paid up amount of ` 350/- each bearing
As at coupon rate of 8% per annum for every 1 fully paid equity share of VOTL and those shareholders who were non-resident
Particulars in India were to be paid ` 350/- in cash for each 1 fully paid equity share of VOTL.
April 01, 2019
Non-current assets As a result of above transaction, Non-Controlling Interest (NCI) amounting to ` 2,868 million was settled by issuance
(a) Property, Plant & Equipment 49,845 of NCDs of ` 2,568 million and consideration payable in cash ` 100 million. The differential amount of ` 200 million was
(b) Goodwill 97,859 transferred to capital reserve account.
(c) Capital Work in Progress 62
c Reconciliation of profits as per this financial statements and the audited standalone financial statements for the
(d) Intangible assets 2
year ended March 31, 2020 adopted at the meeting of Board of Directors dated June 30, 2020:
(e) Other financial assets 132
(f) Other non-current assets 6 Particulars ` in million
(g) Non-current tax assets 1,892 Profit for the year ended March 31 2020 of the Company as per financial statement issued on 14,851
June 30, 2020 (a)
Current assets Profits of :
(a) Inventories 11 VOTL - for the year ended March 31, 2020 (b) 9,950
(b) Financial Assets Other adjustments:
(i) Cash and Cash equivalents 2,281
Elimination of Financial guarantee Income recognised (581)
(ii) Trade Receivable 57
Depreciation on VOTL Purchase Price Allocation (410)
(iii) Other Financial Assets 183
Elimination of unrealised profit included in inventories 151
(c) Other Current Assets 283
Elimination of effects of lease accounting 88
TOTAL ASSETS 152,613
Non-current liabilities
Tax Impact 1,134
(a) Financial Liabilities Sub total (c) 382
(i) Borrowings 28,896
(ii) Other Financial Liabilities 2,766 Restated Profit after Tax for March 31, 2020 (a+ b+c) 25,183

136 137
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to Standalone Financial Statements (Contd.) Notes to Standalone Financial Statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

46 Impairment testing of Goodwill 47 Impact of COVID-19

The Company recognised goodwill of ` 1,08,184 million arising on the merger of Vadinar Power Company Limited (VPCL), Nayara The outbreak of coronavirus (COVID-19) pandemic globally and in India is having significant impact on the economic activity.
Energy Properties Limited (NEPL), and Vadinar Oil Terminal Limited (VOTL) with the Company. The Company has determined that The Company, being in the business of essential commodity i.e. petroleum products, continued operating even during the
its entire operations fall into single CGU and single operating segment,viz., refining of crude oil and marketing of petroleum products lockdown period while adhering to the Government regulations on COVID-19 for safety of workforce. The Company’s total
in domestic and overseas market (refining business). Hence, the entire goodwill is allocable to the refining business CGU / segment revenue from operations and gross refinery margins for the period were impacted due to lower demand for the financial year
and the carrying value of the CGU as at the balance sheet date is ` 549,071 million [March 31, 2020 (restated): ` 557,032 million]. ended March 31, 2021 as compared to the previous financial year ended March 31, 2020.
The Company performed its annual impairment test for the financial year ended March 31, 2021 as at year end.
The impact assessment of pandemic is a continuing process given the uncertainties associated, the Company has analysed
The recoverable amount of the CGU has been determined at ` 726,888 (US$ 9,889) million [March 31, 2020: ` 635,955 (US$ the impact caused by COVID-19 considering the market conditions and other developments upto the date of approval of
8,436) million] based on the value in use calculation using discounted cash flow model {refer note 4(B)(iii)} based on business these financial statements. Among other matters, impact of reduction in the demand and realization has been factored in
assumptions approved by management covering a five-year period and is in line with the business plan presented to the Board. evaluating the Company’s ability to be a going concern for at least 12 months after the reporting date and impairment of
The Company has considered forecast consensus, industry reports, economic indicators and general business conditions to non-financial assets (refer note 46 for impairment analysis). The Company has considered its expected future cash flows,
make an assessment of the implications of the COVID-19 pandemic upto the date of approval of these financial statements. available lines of credit and ability to raise short term funds in arriving at the conclusion that it remains a going concern
The Company has performed sensitivity analysis on the assumptions used basis the internal and external information / and has also performed additional sensitivities on some of its key inputs to validate its assumption of going concern. The
indicators of future economic conditions. Since the value in use is higher than the carrying amount of the refining business management believes that COVID-19 impact, if any, is short-term and there will be no medium to long-term impact on the
CGU, the Company has not determined the fair value less costs of disposal separately. Company or its financial position or financial performance. Despite the volatile market scenario, the Company’s supply
Key assumptions used for value in use calculations: network and the risk management action have resulted in protecting the Company’s cash flows significantly in the near future.
Basis the above evaluation, the management has concluded that there is no significant impact on the operations or financial
The calculation of value in use for the unit is most sensitive to the following assumptions:
position on the Company. However, the impact of the global health pandemic may be different from that estimated at the date
Gross Refining Margin (GRM) – The GRM projections, which is a difference between total product revenue and total of approval of these financial statements and the Company will continue to closely monitor any material changes to future
feedstock cost for the year, are broadly in line with the 5 year business plan of the CGU. The GRMs are estimated to be in the economic conditions and assess its impact on the financial position of the Company.
range from US$ 4.7 per bbl to US$ 7.9 per bbl during FY 2021-22 to FY 2025-26 and thereafter they increase at a nominal rate
of 2% per annum post the 5 year period. A US$ 0.5 per bbl change in the projected GRM over the forecast period would lead 48 Segment information
to a change in the recoverable value by ` 41,016 million (US$ 558 million).
Segment information has been provided under the Notes to the Consolidated financial statements.
Discount rates - Discount rates represent the current market assessment of the risks specific to the CGU, taking into
consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the As per our report of even date For and on behalf of the Board of Directors
cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating
For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
segments and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and
Chartered Accountants Executive Chairman Director
equity. The cost of equity is derived from the expected return on investment by the Company. The cost of debt is based on the Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
interest-bearing borrowings the Company is obliged to service. Segment-specific risk is incorporated by applying individual Sussex, United Kingdom Devbhumi Dwarka, India
beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. Partner Chief Executive Officer Chief Financial Officer Company Secretary
Accordingly, the Company has estimated a discount rate of 10.2%. An increase in the discount rate by 50 basis points leads to Membership No. 502405 Thane, India
decline in the recoverable value by ` 40,942 million (US$ 557 million). New Delhi, July 01, 2021 Mumbai, India Mumbai, India July 01, 2021

Considering the above, the management has assessed that any reasonable possible change in assumptions will not trigger
recognition of impairment.

138 139
 CONSOLIDATED
FINANCIAL
STATEMENTS

140 141
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Independent Auditor’s Report Independent Auditor’s Report (Contd.)

To the Members of Nayara Energy Limited information included in the Annual Report, but does not include related to going concern and using the going concern basis of significant doubt on the ability of the Group to continue as
the consolidated financial statements and our auditor’s report accounting unless management either intends to liquidate the a going concern. If we conclude that a material uncertainty
Report on the Audit of the Consolidated Financial thereon. Group or to cease operations, or has no realistic alternative but exists, we are required to draw attention in our auditor’s
Statements to do so. report to the related disclosures in the consolidated
Our opinion on the consolidated financial statements does not
financial statements or, if such disclosures are inadequate,
Opinion cover the other information and we do not express any form of Those Board of Directors of the companies included in the
to modify our opinion. Our conclusions are based on the
We have audited the accompanying consolidated financial assurance conclusion thereon. Group are also responsible for overseeing the financial
audit evidence obtained up to the date of our auditor’s
statements of Nayara Energy Limited (hereinafter referred to reporting process of the Group.
In connection with our audit of the consolidated financial report. However, future events or conditions may cause
as “the Holding Company”), and its subsidiaries (the Holding statements, our responsibility is to read the other information
Auditor’s Responsibilities for the Audit of the the Group to cease to continue as a going concern.
Company and its subsidiaries together referred to as “the and, in doing so, consider whether such other information
Group”) comprising of the consolidated Balance sheet as at Consolidated Financial Statements • Evaluate the overall presentation, structure and content
is materially inconsistent with the consolidated financial
March 31, 2021, the consolidated Statement of Profit and Loss, Our objectives are to obtain reasonable assurance about of the consolidated financial statements, including the
statements or our knowledge obtained in the audit or
including Other Comprehensive Income and the consolidated whether the consolidated financial statements as a whole disclosures, and whether the consolidated financial
otherwise appears to be materially misstated. If, based on the
Cash Flow Statement and the Consolidated Statement of are free from material misstatement, whether due to fraud statements represent the underlying transactions and
work we have performed, we conclude that there is a material
Changes in Equity for the year then ended, and notes to or error, and to issue an auditor’s report that includes our events in a manner that achieves fair presentation.
misstatement of this other information, we are required to
the consolidated financial statements, including a summary report that fact. We have nothing to report in this regard. opinion. Reasonable assurance is a high level of assurance but • Obtain sufficient appropriate audit evidence regarding the
of significant accounting policies and other explanatory is not a guarantee that an audit conducted in accordance with financial information of the entities or business activities
information (hereinafter referred to as “the consolidated Responsibilities of Management for the SAs will always detect a material misstatement when it exists. within the Group of which we are the independent
financial statements”). Consolidated Financial Statements Misstatements can arise from fraud or error and are considered auditors, to express an opinion on the consolidated
material if, individually or in the aggregate, they could reasonably financial statements. We are responsible for the direction,
In our opinion and to the best of our information and according The Holding Company’s Board of Directors is responsible
be expected to influence the economic decisions of users taken supervision and performance of the audit of the financial
to the explanations given to us, the aforesaid consolidated for the preparation and presentation of these consolidated
on the basis of these consolidated financial statements. statements of such entities included in the consolidated
financial statements give the information required by the financial statements in terms of the requirements of the Act
Companies Act, 2013 (“the Act”), as amended, in the manner that give a true and fair view of the consolidated financial As part of an audit in accordance with SAs, we exercise financial statements of which we are the independent
so required and give a true and fair view in conformity with position, consolidated financial performance including professional judgment and maintain professional skepticism auditors.
the accounting principles generally accepted in India, of the other comprehensive income, consolidated cash flows and throughout the audit. We also: We communicate with those charged with governance of
consolidated state of affairs of the Group, as at March 31, consolidated statement of changes in equity of the Group in the Holding Company and such other entities included in
• Identify and assess the risks of material misstatement of
2021, their consolidated profit including other comprehensive accordance with the accounting principles generally accepted the consolidated financial statements of which we are the
the consolidated financial statements, whether due to fraud
income, their consolidated cash flows and the consolidated in India, including the Companies (Accounting Standards) independent auditors regarding, among other matters, the
or error, design and perform audit procedures responsive
statement of changes in equity for the year ended on that date. Rules, 2006 specified under section 133 of the Act, read with planned scope and timing of the audit and significant audit
to those risks, and obtain audit evidence that is sufficient
the Companies (Accounts) Rules, 2015 (as amended). The findings, including any significant deficiencies in internal control
Basis for Opinion and appropriate to provide a basis for our opinion. The
respective Board of Directors of the companies included that we identify during our audit.
risk of not detecting a material misstatement resulting
We conducted our audit of the consolidated financial in the Group are responsible for maintenance of adequate
from fraud is higher than for one resulting from error, as We also provide those charged with governance with a
statements in accordance with the Standards on Auditing accounting records in accordance with the provisions of the Act
fraud may involve collusion, forgery, intentional omissions, statement that we have complied with relevant ethical
(SAs), as specified under section 143(10) of the Act. Our for safeguarding of the assets of the Group and for preventing
misrepresentations, or the override of internal control. requirements regarding independence, and to communicate
responsibilities under those Standards are further described in and detecting frauds and other irregularities; selection
the ‘Auditor’s Responsibilities for the Audit of the Consolidated and application of appropriate accounting policies; making • Obtain an understanding of internal control relevant with them all relationships and other matters that may
Financial Statements’ section of our report. We are independent judgments and estimates that are reasonable and prudent; to the audit in order to design audit procedures that are reasonably be thought to bear on our independence, and where
of the Group, in accordance with the ‘Code of Ethics’ issued and the design, implementation and maintenance of adequate appropriate in the circumstances. Under section 143(3) applicable, related safeguards.
by the Institute of Chartered Accountants of India together internal financial controls, that were operating effectively for (i) of the Act, we are also responsible for expressing our
with the ethical requirements that are relevant to our audit of ensuring the accuracy and completeness of the accounting opinion on whether the Holding Company has adequate Other Matter
the financial statements under the provisions of the Act and records, relevant to the preparation and presentation of the internal financial controls with reference to financial The accompanying consolidated financial statements include
the Rules thereunder, and we have fulfilled our other ethical consolidated financial statements that give a true and fair view statements in place and the operating effectiveness of unaudited financial statements and other unaudited financial
responsibilities in accordance with these requirements and and are free from material misstatement, whether due to fraud such controls. information in respect of one subsidiary, whose financial
the Code of Ethics. We believe that the audit evidence we have or error, which have been used for the purpose of preparation of statements and other financial information reflect total assets
• Evaluate the appropriateness of accounting policies used
obtained is sufficient and appropriate to provide a basis for our the consolidated financial statements by the Board of Directors of INR 15 million as at March 31, 2021, total revenues and net
and the reasonableness of accounting estimates and
audit opinion on the consolidated financial statements. of the Holding Company, as aforesaid. cash (inflows) of INR Nil and INR 4 million respectively, for the
related disclosures made by management.
year ended on that date. These unaudited financial statements
Other Information In preparing the consolidated financial statements, the • Conclude on the appropriateness of management’s use of and other unaudited financial information have been furnished
The Holding Company’s Board of Directors is responsible for respective Board of Directors of the Companies included in the the going concern basis of accounting and, based on the to us by the management. Our opinion, in so far as it relates
the other information. The other information comprises the Group are responsible for assessing the ability of the Group to audit evidence obtained, whether a material uncertainty amounts and disclosures included in respect of the subsidiary,
continue as a going concern, disclosing, as applicable, matters exists related to events or conditions that may cast and our report in terms of sub-sections (3) of Section 143

142 143
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Independent Auditor’s Report (Contd.) Annexure 1

of the Act in so far as it relates to the aforesaid subsidiary, is (f) With respect to the adequacy and the operating TO THE INDEPENDENT AUDITOR’S REPORT obtain reasonable assurance about whether adequate internal
based solely on such unaudited financial statement and other effectiveness of the internal financial controls with OF EVEN DATE ON THE CONSOLIDATED financial controls with reference to consolidated financial
unaudited financial information. In our opinion and according reference to these consolidated financial statements FINANCIAL STATEMENTS OF NAYARA statements was established and maintained and if such controls
to the information and explanations given to us by the of the Holding Company and its subsidiary company ENERGYLIMTED operated effectively in all material respects.
Management, these financial statements and other financial incorporated in India, refer to our separate Report in
Report on the Internal Financial Controls under Clause (i) of Our audit involves performing procedures to obtain audit
information are not material to the Group. “Annexure 1” to this report;
Sub-section 3 of Section 143 of the Companies Act, 2013 (“the evidence about the adequacy of the internal financial controls
Our opinion above on the consolidated financial statements, (g) In our opinion, the managerial remuneration for the year Act”) with reference to consolidated financial statements and their
and our report on Other Legal and Regulatory Requirements ended March 31, 2021 has been paid / provided by the operating effectiveness. Our audit of internal financial controls
In conjunction with our audit of the consolidated financial
below, is not modified in respect of the above matters with Company to its directors in excess of the amount permissible with reference to consolidated financial statements included
statements of Nayara Energy Limited (hereinafter referred to
respect to our reliance on the financial statements and other under the provisions of section 197 read with Schedule obtaining an understanding of internal financial controls with
as the “Holding Company”) as of and for the year ended March
financial information certified by the Management. V to the Act (refer note 46). As stated in the said note, reference to consolidated financial statements, assessing the
the Company proposes to obtain necessary shareholder 31, 2021, we have audited the internal financial controls with
risk that a material weakness exists, and testing and evaluating
Report on Other Legal and Regulatory approval in the ensuing annual general meeting; reference to consolidated financial statements of the Holding
the design and operating effectiveness of internal control based
Requirements Company and its subsidiary (the Holding Company and its
(h) With respect to the other matters to be included in on the assessed risk. The procedures selected depend on the
As required by Section 143(3) of the Act, based on our audit, we subsidiary together referred to as “the Group”), which are
the Auditor’s Report in accordance with Rule 11 of the auditor’s judgement, including the assessment of the risks of
report, to the extent applicable, that: companies incorporated in India, as of that date.
Companies (Audit and Auditors) Rules, 2014, as amended, material misstatement of the financial statements, whether due
(a) We have relied upon have sought and obtained all the in our opinion and to the best of our information and Management’s Responsibility for Internal Financial Controls to fraud or error.
information and explanations which to the best of our according to the explanations given to us:
The respective Board of Directors of the companies included We believe that the audit evidence we have obtained is sufficient
knowledge and belief were necessary for the purposes i. The consolidated financial statements disclose the in the Group, which are companies incorporated in India, are and appropriate to provide a basis for our audit opinion on
of our audit of the aforesaid consolidated financial impact of pending litigations on its consolidated responsible for establishing and maintaining internal financial the internal financial controls with reference to consolidated
statements; financial position of the Group, in its consolidated controls based on the internal control over financial reporting financial statements.
(b) In our opinion, proper books of account as required by law financial statements – Refer note 35 to the criteria established by the Holding Company considering the
relating to preparation of the aforesaid consolidation of consolidated financial statements; essential components of internal control stated in the Guidance Meaning of Internal Financial Controls Over Financial
the financial statements have been kept so far as it appears Note on Audit of Internal Financial Controls Over Financial Reporting With Reference to these Consolidated Financial
ii. Provision has been made in the consolidated financial
from our examination of those books; Reporting issued by the Institute of Chartered Accountants Statements
statements, as required under the applicable law
(c) The Consolidated Balance Sheet, the Consolidated or accounting standards, for material foreseeable of India (ICAI). These responsibilities include the design, A company's internal financial control over financial reporting
Statement of Profit and Loss including Consolidated losses, if any, on long-term contracts including implementation and maintenance of adequate internal financial with reference to these consolidated financial statements is a
Statement of Other Comprehensive Income, the derivative contracts – Refer note 19 and 24 to the controls that were operating effectively for ensuring the orderly process designed to provide reasonable assurance regarding
Consolidated Cash Flow Statement and Consolidated consolidated financial statements in respect of such and efficient conduct of its business, including adherence to the the reliability of financial reporting and the preparation of
Statement of Changes in Equity dealt with by this Report items as it relates to the Group; respective company’s policies, the safeguarding of its assets, financial statements for external purposes in accordance with
are in agreement with the books of account maintained for the prevention and detection of frauds and errors, the accuracy generally accepted accounting principles. A company's internal
iii. There were no amounts which were required to be
the purpose of preparation of the consolidated financial and completeness of the accounting records, and the timely financial control over financial reporting with reference to
transferred to the Investor Education and Protection
statements; preparation of reliable financial information, as required under consolidated financial statements includes those policies and
Fund by the Holding Company, its subsidiary
incorporated in India during the year ended March the Companies Act, 2013. procedures that (1) pertain to the maintenance of records
(d) In our opinion, the aforesaid consolidated financial
31, 2021. that, in reasonable detail, accurately and fairly reflect the
statements comply with the Companies (Accounting Auditor’s Responsibility
Standards) Rules, 2006 specified under section 133 of the transactions and dispositions of the assets of the company; (2)
For S.R. Batliboi & Co. LLP Our responsibility is to express an opinion on the Holding provide reasonable assurance that transactions are recorded
Act, read with the Companies (Accounts) Rules, 2015 (as
Chartered Accountants Company's internal financial controls with reference to as necessary to permit preparation of financial statements in
amended);
ICAI Firm Registration Number: 301003E/E300005 consolidated financial statements based on our audit. We accordance with generally accepted accounting principles, and
(e) On the basis of the written representations received from conducted our audit in accordance with the Guidance Note on that receipts and expenditures of the company are being made
the directors of the Holding Company as on March 31, Audit of Internal Financial Controls Over Financial Reporting only in accordance with authorisations of management and
2021 and the directors of its subsidiary company taken per Naman Agarwal (the “Guidance Note”) and the Standards on Auditing, specified directors of the company; and (3) provide reasonable assurance
on record by the respective Board of Directors of the Partner under section 143(10) of the Act, to the extent applicable to an regarding prevention or timely detection of unauthorised
Holding Company and subsidiary company, none of the Membership Number: 502405 audit of internal financial controls, both, issued by ICAI. Those acquisition, use, or disposition of the company's assets that
directors of the Group’s companies, incorporated in India UDIN: 21502405AAAABX3820 Standards and the Guidance Note require that we comply could have a material effect on the financial statements.
is disqualified as on March 31, 2021 from being appointed
Place of Signature: New Delhi with ethical requirements and plan and perform the audit to
as a director in terms of Section 164 (2) of the Act;
Date: July 1, 2021

144 145
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

CONSOLIDATED BALANCE SHEET

AS AT MARCH 31, 2021

Inherent Limitations of Internal Financial Controls Over controls over financial reporting with reference to these (` in million)
Financial Reporting With Reference to these Consolidated consolidated financial statements and such internal financial Particulars Notes As At As At
Financial Statements controls with reference to consolidated financial statements March 31, 2021 March 31, 2020

Because of the inherent limitations of internal financial controls were operating effectively as at March 31,2021, based on the ASSETS
internal control over financial reporting criteria established by 1) Non-current assets
over financial reporting with reference to these consolidated (a) Property, plant and equipment 6 431,611 443,265
financial statements, including the possibility of collusion the Holding Company considering the essential components of (b) Capital work-in-progress 6 8,996 5,251
or improper management override of controls, material internal control stated in the Guidance Note issued by the ICAI. (c) Goodwill 6 108,184 108,184
(d) Other Intangible assets 6 280 331
misstatements due to error or fraud may occur and not be For S.R. Batliboi & Co. LLP (e) Right-of-use assets 6 36,507 38,240
detected. Also, projections of any evaluation of the internal Chartered Accountants (f) Financial assets
(i) Investments 7 - -
financial controls with reference to consolidated financial ICAI Firm Registration Number: 301003E/E300005 (ii) Other Financial assets 8 2,883 1,770
statements to future periods are subject to the risk that the (g) Other non-current assets 9 2,888 2,732
internal financial controls with reference to consolidated (h) Non-current tax assets (net) 4,738 8,746
Total non-current assets 596,087 608,519
financial statements may become inadequate because of per Naman Agarwal 2) Current assets
changes in conditions, or that the degree of compliance with the Partner (a) Inventories 10 93,448 59,281
policies or procedures may deteriorate. (b) Financial assets
Membership Number: 502405 (i) Trade receivables 11 19,679 12,703
UDIN: 21502405AAAABX3820 (ii) Cash and cash equivalents 12 33,191 30,020
Opinion (iii) Bank balances other than (ii) above 13 8,511 11,056
In our opinion, the Holding Company, and its subsidiary Place of Signature: New Delhi (iv) Other financial assets 14 10,395 31,571
Date: July 1, 2021 (c) Other current assets 15 4,615 5,980
Company which are companies incorporated in India, have, Total current assets 169,839 150,611
maintained in all material respects, adequate internal financial TOTAL ASSETS 765,926 759,130
EQUITY AND LIABILITIES
EQUITY
(a) Equity share capital 16 15,072 15,072
(b) Other equity 17 191,505 174,209
Equity attributable to equity holders of the parent 206,577 189,281
Non-controlling Interests 42 - 2,868
Total Equity 206,577 192,149
LIABILITIES
1) Non-current liabilities
(a) Financial liabilities
(i) Borrowings 18 72,559 98,800
(ii) Other financial liabilities 19 116,661 160,096
(b) Deferred tax liabilities (net) 20 51,528 54,739
(c) Other non current liabilities 21 12,296 22,885
Total non-current liabilities 253,044 336,520
2) Current liabilities
(a) Financial liabilities
(i) Borrowings 22 23,326 8,773
(ii) Trade payables 23 117,559 96,416
(iii) Other financial liabilities 24 106,727 97,740
(b) Other current liabilities 25 57,037 26,034
(c) Provisions 26 961 803
(d) Current tax liabilities (net) 695 695
Total current liabilities 306,305 230,461
TOTAL EQUITY AND LIABILITIES 765,926 759,130

See accompanying notes to the consolidated financial statements

As per our report of even date For and on behalf of the Board of Directors

For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Chartered Accountants Executive Chairman Director
Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Partner Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. 502405 Mumbai, India Mumbai, India Thane, India
New Delhi, July 01, 2021 July 01, 2021

146 147
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

CONSOLIDATED STATEMENT OF PROFIT AND LOSS CONSOLIDATED STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021

(` in million) (` in million)
Particulars Notes For the year ended For the year ended Particulars Notes For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Income Profit for the year attributable to:
Revenue from operations 27 875,006 998,683 (a) Equity holders of the parent 4,582 24,764
Other income 28 10,650 6,816 (b) Non-controlling interests - 236
Total Income 885,656 1,005,499 Other Comprehensive (loss) / income for the year attributable to:
Expenses (a) Equity holders of the parent 12,514 (21,555)
Cost of raw materials consumed 430,464 626,594 (b) Non-controlling interests - -
Excise duty 247,596 142,884 Total comprehensive income attributable to:
Purchases of stock-in-trade 137,408 123,646 (a) Equity holders of the parent 17,096 3,209
Changes in inventory of finished goods, stock-in-trade and 29 (8,786) (3,816) (b) Non-controlling interests - 236
work- in-progress
Earnings per share (Face value ` 10 per share) 34
Employee benefits expense 30 6,702 6,981
Basic and Diluted (in `) 3.07 16.61
Finance costs 31 20,968 27,496
Depreciation and amortisation expense 6 19,238 22,235 See accompanying notes to the consolidated financial statements
Other expenses 32 34,901 45,158 As per our report of even date For and on behalf of the Board of Directors
Total expenses 888,491 991,178
For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
(Loss) / Profit before exceptional items and tax (2,835) 14,321
Chartered Accountants Executive Chairman Director
Exceptional items 33 - 4,544 Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
(Loss) / Profit before tax (2,835) 9,777 Sussex, United Kingdom Devbhumi Dwarka, India
Tax expense: 20 per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
(a) Current tax expenses 3 1,791 Partner Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. 502405 Mumbai, India Mumbai, India Thane, India
(b) Deferred tax (reversal) [Include ` NIL (Previous year ` 18,458 million) (7,420) (17,014)
New Delhi, July 01, 2021 July 01, 2021
reversal on account of change in tax provisions]
Total tax (reversal) (7,417) (15,223)
Profit for the year 4,582 25,000
Other comprehensive income
Items that will not be reclassified to profit and loss 25 (9)
Remeasurement income on defined benefit plans 33 14
Income tax effect (8) (23)
25 (9)
Items that will be reclassified to profit and loss 12,489 (21,546)
Effective portion of cash flow hedges (net) 16,605 (28,766)
Income tax effect (4,179) 7,178
12,426 (21,588)
Foreign currency monetary item translation difference account 86 102
Income tax effect (22) (60)
64 42
Exchange difference arising on translation of foreign operation (1) -
Income tax effect - -
(1) -
Other comprehensive Income / (loss) for the year, net of tax 12,514 (21,555)
Total comprehensive income for the year 17,096 3,445
(comprising profit and other comprehensive Income / (loss) for the year)

148 149
150
Consolidated Statement of Changes in Equity
for the year ended March 31, 2021

a. Equity Share Capital

NAYARA ENERGY LIMITED
ANNUAL REPORT 2020-21

(` in million)
Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Opening balance 15,072 15,072
Closing balance 15,072 15,072

b. Other Equity
Consolidated Statement of Changes in Equity for the year April 01, 2019 to March 31, 2020
(` in million)
Particulars Reserves and Surplus Items of Other Comprehensive Income (OCI) Attributable Non- Total
Capital Securities General Retained Effective portion of Foreign currency to owners controlling
reserve premium reserve earnings Cash Flow Hedges* monetary item of the interest
translation Parent
difference account
Balance as at April 01, 2019 409 78,014 596 96,089 (417) (230) 174,461 2,632 177,093
Adjustment to the opening balance of retained - - - (3,461) - - (3,461) - (3,461)
earnings on initial application of Ind AS 116
Profit for the year - - - 24,764 - - 24,764 236 25,000
Other Comprehensive (loss) for the year - - - (9) (21,588) 42 (21,555) - (21,555)
Total Comprehensive income for the year - - - 24,755 (21,588) 42 3,209 236 3,445
Balance as at March 31, 2020 409 78,014 596 117,383 (22,005) (188) 174,209 2,868 177,077

Consolidated Statement of Changes in Equity (Contd.)

for the year ended March 31, 2021

Consolidated Statement of Changes in Equity for the year April 01, 2020 to March 31, 2021
(` in million)
Particulars Reserves and Surplus Items of Other Comprehensive Income (OCI) Attributable Non- Total
Capital Securities General Retained Foreign Effective Foreign to owners controlling
reserve premium reserve currency portion of Cash currency of the interest
Earnings
Translation Flow Hedges* monetary item Parent
Reserve translation
difference
account
Balance as at April 01, 2020 409 78,014 596 117,383 - (22,005) (188) 174,209 2,868 177,077
Purchase of non- controlling interest 200 - - - - - - 200 (2,868) (2,668)
(refer note 42)
Profit for the year - - - 4,582 - - - 4,582 - 4,582
Other Comprehensive income / (loss) - - - 25 (1) 12,426 64 12,514 - 12,514
for the year
Total Comprehensive income for the year - - - 4,607 (1) 12,426 64 17,096 - 17,096
CORPORATE OVERVIEW

Balance as at March 31, 2021 609 78,014 596 121,990 (1) (9,579) (124) 191,505 - 191,505

* A net loss for the year of ` 20,432 million (net of tax) (Previous year ` 12,853 million) was recycled from cash flow hedge reserve to statement of profit and loss account.

As per our report of even date For and on behalf of the Board of Directors

For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Chartered Accountants Executive Chairman Director
BOARD’S REPORT

Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857

Sussex, United Kingdom Devbhumi Dwarka, India
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Partner Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. 502405 Mumbai, India Mumbai, India Thane, India
New Delhi, July 01, 2021 July 01, 2021
FINANCIAL STATEMENTS

151
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CASH FLOWS (Contd.)

FOR THE YEAR ENDED MARCH 31, 2021 FOR THE YEAR ENDED MARCH 31, 2021

(` in million) (` in million)
Particulars For the year ended For the year ended Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
A Cash flow from operating activities Net cash (used in) financing activities (10,606) (94,692)
Net (Loss) / profit before tax (2,835) 9,777 Net increase in cash and cash equivalents 3,604 24,262
Adjustments for: Net exchange differences on foreign currency bank balances 54 429
Interest income (2,912) (1,829) Cash and cash equivalents at the beginning of the year 29,601 5,339
Depreciation and amortisation expense 19,238 22,235 Cash and cash equivalents at the end of the year 33,259 30,030
Loss on disposal / discard of property, plant and equipment (net) 84 3 Composition of Cash and cash equivalents included in the consolidated
Gain on investment / financial assets measured at FVTPL - (224) statement of cash flows comprise of the following consolidated balance sheet
amounts:
Other liability written back (83) -
Cash and cash equivalents as per the consolidated balance sheet (refer note 12) 33,191 30,020
Export obligation deferred income (100) (248)
Add: Earmarked bank balances (refer note 13) 78 10
Unrealised foreign exchange differences (net) (938) 4,506
Less: Bank overdraft (refer note 22) (10) -
Net mark to market loss / (gain) on derivative contracts 6,358 (8,540)
Total 33,259 30,030
Net expected credit loss 106 533
Provision for doubtful debts/ doubtful debt written off 24 344 Reconciliation between the opening and closing balances in the Consolidated balance sheet for liabilities arising from financing activities
Trade payable written back   (851) -
Finance costs 20,968 27,496
Particulars As at Cash changes Non cash As at
April 1, 2020 (net) changes (net) March 31, 2021
Operating profit before working capital changes 39,059 54,053
Long term borrowings including current maturities 106,710 (3,088) 2,231 105,853
Adjustments for working capital changes: classified in other financial liabilities @
(Increase) / Decrease in inventories (34,167) 35,729 Short term borrowings * 8,773 14,443 110 23,326
decrease in trade and other receivables 6,603 11,878
Increase in trade and other payables 2,408 25,633 Particulars As at Cash changes Non cash As at
Cash generated from operating activities 13,903 127,293 April 1, 2019 (net) changes (net) March 31, 2020

Income tax refund/(paid) (net) (including interest) 4,412 (1,172) Long term borrowings including current maturities 126,695 (22,732) 2,747 106,710
classified in other financial liabilities
Net cash generated from operating activities 18,315 126,121
Short term borrowings * 55,673 (47,184) 284 8,773
B Cash flow from investing activities
Payments for property, plant and equipment (including capital work in progress, (7,958) (5,038) *Excluding bank overdraft disclosed as part of cash and cash equivalent for the purpose of cashflow statement.
Intangible assets, Capital advances and Capital creditors) @ for issuance of Non Covertible Debenture to Non Controlling Interest (refer note 42).
Proceeds from sale of short term investments (net) - 1,225
Notes:
Encashment / (Placement) of short term bank deposits (net) 2,607 (5,016)
a) The above cash flow from operating activities has been prepared under the “Indirect Method” as set out in Indian Accounting Standard
Interest received 1,246 1,662 (Ind AS) 7- Statement of cash flows.
Net cash (used in) investing activities (4,105) (7,167)
b) Cash flow from operations include net inflow of ` Nil (` 69,799 million for the year ended March 31, 2020) arising from long term
C Cash flow from financing activities advances received from customers, net of goods supplied during the period. The goods will be supplied against these advances over
Proceeds from long-term borrowings 15,428 30,586 next two to three years.
Repayment of long-term borrowings (18,516) (53,318) As per our report of even date For and on behalf of the Board of Directors
Proceeds from short-term borrowings 22,297 11,522 For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker
Repayment of short-term borrowings (15,297) (30,272) Chartered Accountants Executive Chairman Director
Proceed / (repayment) of short term borrowings of less than 3 months 7,443 (28,434) Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India
Payment of principal portion of lease liabilities (2,173) (840)
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Finance cost paid (19,788) (23,936)
Partner Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. 502405 Mumbai, India Mumbai, India Thane, India
New Delhi, July 01, 2021 July 01, 2021

152 153
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

1. Corporate information A. Basis of consolidation (c) Eliminate in full intragroup assets and liabilities, equity, between market participants at the measurement date. The
Nayara Energy Limited (the Company) is a public limited The consolidated financial statements comprise the financial income, expenses and cash flows relating to transactions fair value measurement is based on the presumption that
company incorporated under the provisions of the statements of the Company and its subsidiaries (collectively, between entities of the group (profits or losses resulting the transaction to sell the asset or transfer the liability takes
Companies Act, 1956 (since replaced by the Companies Act, the “Group”) as at reporting date. from intragroup transactions that are recognised in place either:
2013, as amended). The registered office of the Company is assets, such as inventory and fixed assets, are eliminated
Subsidiaries are entities controlled by the Group. Control • In the principal market for the asset or liability, or
located at Devbhumi Dwarka, Gujarat, India. The Company in full). Intragroup losses may indicate an impairment
is achieved when the Group is exposed, or has rights, to
that requires recognition in the consolidated financial • 
In the absence of a principal market, in the most
and its subsidiaries (collectively referred to as the Group) variable returns from its involvement with the investee and
statements. advantageous market for the asset or liability.
are primarily engaged in the business of refining of crude has the ability to affect those returns through its power over
oil, marketing of petroleum products in domestic and the investee. Specifically, the Group controls an investee if (d) Deferred tax assets and liabilities are recognised for The principal or the most advantageous market must be
overseas markets, providing port and terminal services for and only if the Group has: temporary differences that arise from the elimination of accessible by the Group.
the Company’s refinery. The Company owns India’s second profits and losses resulting from intragroup transactions.
• Power over the investee (i.e. existing rights that give it The fair value of an asset or a liability is measured using
largest single site refinery at Vadinar, Gujarat with a current
the current ability to direct the relevant activities of the Profit or loss and each component of other comprehensive the assumptions that market participants would use
capacity of 20MMTPA. The Company has over 6,000
investee) income (OCI) are attributed to the equity holders of the when pricing the asset or liability, assuming that market
operational outlets and more than 1,400 outlets at various
parent of the Group and to the non-controlling interests. participants act in their best economic interest.
stages of completion. • Exposure, or rights, to variable returns from its
involvement with the investee, and A fair value measurement of a non-financial asset takes into
The consolidated financial statements of Nayara Energy 3. Summary of significant accounting policies
account a market participant’s ability to generate economic
Limited and its subsidiaries (collectively, the Group) for the • The ability to use its power over the investee to affect its A. Business combinations and goodwill benefits by using the asset in its highest and best use or by
period ended March 31, 2021 were authorised for issue in returns
Non-common control business combinations selling it to another market participant that would use the
accordance with a resolution of the directors on July 01,
Consolidation of a subsidiary begins when the Group obtains Non-common control business combinations are accounted asset in its highest and best use.
2021.
control over the subsidiary and ceases when the Group loses for using the acquisition method. The cost of an acquisition is The Group uses valuation techniques that are appropriate in
Information of the Group’s structure is also provided in note control of the subsidiary. measured as the aggregate of the consideration transferred, the circumstances and for which sufficient data are available
47. Information on other related party relationships of the
Consolidated financial statements are prepared using which is measured at acquisition date fair value, and the to measure fair value, maximising the use of relevant
Group is provided in note 46.
uniform accounting policies for like transactions and other amount of any non-controlling interests in the acquiree. observable inputs and minimizing the use of unobservable
events in similar circumstances. For each business combination, the Group elects whether inputs.
2. Basis of preparation
to measure the non-controlling interests in the acquiree
The consolidated financial statements of the Group have The financial statements of all entities used for the purpose All assets and liabilities for which fair value is measured
at fair value or at the proportionate share of the acquiree’s
been prepared in accordance with the Indian Accounting of consolidation are drawn up to same reporting date as that or disclosed in the financial statements are categorized
identifiable net assets. Acquisition-related costs are
Standards (Ind ASs), prescribed under Section 133 of the of the parent company, i.e., year ended on March 31. The within the fair value hierarchy, described as follows, based
expensed as incurred.
Companies Act 2013 (as amended) (herein after referred Group re-assesses whether or not it controls an investee if on the lowest level input that is significant to the fair value
to as “the Act” read with Rule 3 of the Companies (Indian facts and circumstances indicate that there are changes to At the acquisition date, the identifiable assets acquired and measurement as a whole:
Accounting Standards) Rules, 2015 (as amended) and one or more of the three elements of control. the liabilities assumed are recognised at their acquisition
• Level 1 — Quoted (unadjusted) market prices in active
presentation requirements of Division II of Schedule III to date fair values.
markets for identical assets or liabilities
the Companies Act, 2013, (Ind AS compliant Schedule III), as Consolidation procedures:
Goodwill is initially measured at cost being the excess of the
• Level 2 — Valuation techniques for which the lowest level
applicable. aggregate of the consideration transferred and the amount
(a) Combine like items of assets, liabilities, equity, income, input that is significant to the fair value measurement is
These consolidated financial statements are prepared under recognised for non-controlling interests and any previous
expenses and cash flows of the parent with those of its directly or indirectly observable
the accrual basis and historical cost measurement, except interest held over the net identifiable assets acquired and
subsidiaries. For this purpose, income and expenses of
liabilities assumed. After initial recognition, goodwill is • Level 3 — Valuation techniques for which the lowest level
for certain financial instruments (refer accounting policy on the subsidiary are based on the amounts of the assets
measured at cost less any accumulated impairment losses input that is significant to the fair value measurement is
financial instruments), which are measured at fair values. and liabilities recognised in the consolidated financial
{refer note 4 (B) (iii)}. unobservable
The consolidated financial statements provide comparative statements at the acquisition date.
information in respect of the previous period. The B. Fair value measurement For assets and liabilities that are recognised in the financial
(b) Offset (eliminate) the carrying amount of the parent’s
consolidated financial statements are presented in Indian statements on a recurring basis, the Group determines
investment in each subsidiary and the parent’s portion of The Group measures financial instruments such as
National Rupee (`) which is the functional currency of the whether transfers have occurred between levels in the
equity of each subsidiary. Business combinations policy derivatives at fair value at each consolidated balance sheet
Company, and all values are rounded to the nearest million, hierarchy by re-assessing categorization (based on the lowest
explains how to account for any related goodwill. date. The group has also disclosed fair value of financial
except where otherwise indicated. All amounts individually level input that is significant to the fair value measurement
instruments.
less than ` 0.5 million have been reported as “0”. as a whole) at the end of each reporting period.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction

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ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

External valuers are involved for valuation of significant Depreciation are carried at cost less any accumulated amortisation and recoverable amount, nor exceed the carrying amount that
assets, such as properties and unquoted financial assets, and Depreciation on PPE is provided, pro-rata for the period of accumulated impairment losses. would have been determined, net of depreciation, had no
significant liabilities. use, using the straight line method, over the estimated useful impairment loss been recognised for the asset in prior years.
Intangible assets with finite lives are amortised over the
life given below, which is different than useful life as specified Such reversal is recognised in the statement of profit and
For the purpose of fair value disclosures, the Group has useful economic life and assessed for impairment whenever
in the Schedule II to the Companies Act, 2013. The estimate loss.
determined classes of assets and liabilities on the basis of there is an indication that the intangible asset may be
the nature, characteristics and risks of the asset or liability of the useful life of these assets has been assessed based on impaired. The amortisation period and the amortisation A cash generating unit to which goodwill has been allocated
and the level of the fair value hierarchy as explained above. technical advice which considers the nature of the asset, method for an intangible asset with a finite useful life are is tested for impairment annually, or more frequently when
the usage of the asset, expected physical wear and tear, the reviewed at least at the end of each reporting period, and there is an indication that the unit may be impaired. If the
Fair-value related disclosures for financial instruments and operating conditions of the asset, anticipated technological treated as change in estimate, if any change is required. recoverable amount of the cash generating unit is less than
non-financial assets that are measured at fair value or where changes, manufacturers warranties and maintenance its carrying amount, the impairment loss is allocated first
fair values are disclosed, are summarised in the following support, etc. Major inspection including turnaround and The Group has estimated the useful life of software and
to reduce the carrying amount of any goodwill allocated
notes: maintenance cost are depreciated over the next turnaround licenses ranging from 3 - 5 years from the date of acquisition
to the unit and then to the other assets of the unit pro rata
cycle. The estimated useful life of items of property, plant and amortises the same over the said period on a straight
• Disclosures for valuation methods, significant estimates based on the carrying amount of each asset in the unit. Any
and equipment is mentioned below: line basis.
and assumptions (refer note 41) impairment loss for goodwill is recognised in statement of
• Quantitative disclosures of fair value measurement De-recognition profit and loss. An impairment loss recognised for goodwill
Particulars Estimated useful
hierarchy (refer note 41) Gains or losses arising from derecognition of an intangible is not reversed in subsequent periods.
life (in years)
Temporary Building 3 asset are measured as the difference between the net
• 
Financial instruments (including those carried at F. Leases
Building 15-60 disposal proceeds and the carrying amount of the asset and
amortised cost) (refer note 41) A contract or parts of contracts that conveys the right to
Plant and machinery * 35-50 are recognised in the statement of profit and loss when the
control the use of an identified asset for a period of time in
C. Property, Plant and Equipment asset is derecognised.
Catalysts (included within plant & 2-4 exchange for payments to be made to the owners (lessors)
Property, plant & equipment (PPE) is recorded at cost of machinery) E. Impairment of non-financial assets are accounted for as leases. Contracts are assessed to
acquisition less accumulated depreciation and impairment
Furniture and fixtures 1-10 The Group assesses, at each reporting date, whether there is determine whether a contract is, or contains, a lease at the
loss, if any. Capital work in progress is stated at cost, net of
Office equipment 1-6 an indication that an asset may be impaired. If any indication inception of a contract or when the terms and conditions of
accumulated impairment losses, if any.
Vehicles 1-10 exists, or when annual impairment testing for an asset a contract are significantly changed. The lease term is the
Cost of acquisition comprises of all costs incurred to bring is required, the Group estimates the asset’s recoverable non-cancellable period of a lease, together with contractual
* Additionally, there are certain key components identified
the assets to their present location and working condition amount. An asset’s recoverable amount is the higher of an options to extend or to terminate the lease early, where it is
within plant and machinery having a useful life up to 35 years
up to the date the assets are ready for their intended use. asset’s or cash-generating unit’s (CGU) fair value less costs reasonably certain that an extension option will be exercised
and are depreciated over such assessed useful life.
Cost also includes the cost of replacing part of the plant and of disposal and its value in use. Recoverable amount is or a termination option will not be exercised.
equipment and borrowing costs for long-term construction The residual values, useful lives and methods of depreciation determined for an individual asset, unless the asset does not Group as a lessee
projects if the recognition criteria are met. When significant of property, plant and equipment are reviewed at each generate cash inflows that are largely independent of those
parts of plant and equipment are required to be replaced at financial year end and adjusted prospectively. At the commencement of a lease contract, a right-of-use asset
from other assets or groups of assets. When the carrying
intervals, the Group depreciates them separately based on and a corresponding lease liability are recognised, unless the
amount of an asset or CGU exceeds its recoverable amount,
their specific useful lives. Likewise, when a major inspection De-recognition lease term is 12 months or less or value of underlying asset is
the asset is considered impaired and is written down to its
including turnaround and maintenance is performed, its An item of property, plant and equipment and any significant of low value. The commencement date of a lease is the date
recoverable amount.
cost is recognised in the carrying amount of the plant and part initially recognised is derecognised upon disposal or the underlying asset is made available for use.
equipment if the recognition criteria are satisfied. Any when no future economic benefits are expected from its Impairment losses of continuing operations are recognised
Lease liability is measured at an amount equal to the present
remaining carrying amount of the cost of the previous use or disposal. Any gain or loss arising on derecognition in the statement of profit and loss.
value of the lease payments during the lease term that are
inspection (as distinct from physical parts) is derecognised. of the asset (calculated as the difference between the net For assets excluding goodwill, an assessment is made at not paid at that date. Lease liability includes contingent
All other repair and maintenance costs are recognised in the disposal proceeds and the carrying amount of the asset) is each reporting date to determine whether there is an rentals and variable lease payments that depend on an
statement of profit and loss as incurred. included in the statement of profit and loss when the asset indication that previously recognised impairment losses no index, rate, or where they are fixed payments in substance.
is derecognised. longer exist or have decreased. If such indication exists, the The lease liability is remeasured when the contractual cash
Capital Work in Progress is stated at cost which includes
direct and indirect cost incurred for construction or Group estimates the asset’s or CGU’s recoverable amount. flows of variable lease payments change due to a change in
D. Intangible assets
procurement of goods incurred during the construction A previously recognised impairment loss is reversed only an index or rate when the lease term changes following a
Intangible assets acquired separately are measured on initial reassessment.
phase of project under development. if there has been a change in the assumptions used to
recognition at cost. The cost of intangible assets acquired
determine the asset’s recoverable amount since the last
in a business combination is their fair value at the date of Lease payments are discounted using the interest rate
impairment loss was recognised. The reversal is limited so
acquisition. Following initial recognition, intangible assets implicit in the lease. If that rate is not readily available, the
that the carrying amount of the asset does not exceed its
incremental borrowing rate is applied. The incremental

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ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

borrowing rate reflects the rate of interest that the lessee first in first out basis and the cost of all other inventories is I. Government grants • Net interest expense or income as finance cost/ finance
would have to pay to borrow over a similar term, with a determined on a monthly weighted average basis. Government grants are recognised where there is reasonable income.
similar security, the funds necessary to obtain an asset of a assurance that the grant will be received and all attached
Net realisable value is the estimated selling price in the K. Foreign currencies
similar nature and value to the right-of-use asset in a similar conditions will be complied with.
ordinary course of business less the estimated costs of The Group’s consolidated financial statements are presented
economic environment.
completion and the estimated costs necessary to make the When the grant relates to an expense item, it is recognised in Indian Rupees, which is also the parent company’s
In general, a corresponding right-of-use asset is recognised sale. as income on a systematic basis over the periods that functional currency. For each entity the Group determines
at cost, which comprises the amount of the initial the related costs, for which it is intended to compensate, the functional currency and items included in the financial
H. Revenue from contract with customer
measurement of the lease liability, any lease payments are expensed. When the grant related to an assets, it is statements of each entity are measured using that functional
made at or before the commencement date, less any lease (i) Sale of goods recognised as income in equal amount over the expected currency. The Group uses the direct method of consolidation
incentives received, any initial direct costs incurred by the Revenue from contracts with customers is recognised useful life of the related assets. and on disposal of a foreign operation the gain or loss that is
lessee adjusted for accumulated depreciation, impairment when control of the goods are transferred to the reclassified to the consolidated statement of profit and loss
losses and any remeasurement of lease liabilities. The J. Retirement and other employee benefits
customer at an amount that reflects the consideration to reflects the amount that arises from using this method.
depreciation on right-of-use assets is recognised as expense Contributions to defined contribution plans are recognised
which the Group expects to be entitled in exchange for
unless capitalised when the right-of-use asset is used to as expense on accrual basis when employees have rendered (i) Transaction and balances
those goods. The Group has generally concluded that it
construct another asset. Right of use assets are depreciated services and as when the contributions are due. These  ransactions in foreign currencies are initially recorded
T
is the principal in its revenue arrangements, because it
on a straight line basis over the lesser of the assessed useful expenses are confined to contribution only. by the Group’s entities at their respective functional
typically controls the goods before transferring them to
lives of the asset or the lease period. the customer. Revenue from sale of goods is recognised at The Group determines the present value of the defined currency spot rates at the date the transaction first
the point in time when control of the goods is transferred benefit obligation and fair value of plan assets. The net qualifies for recognition. At the end of each reporting
In addition, the carrying amount of lease liabilities is
to the customer, generally on delivery of the goods. The liability or assets represents the deficit or surplus in the period, monetary items denominated in foreign
remeasured if there is a modification, a change in the lease
recovery of excise duty flows to the Group on its own Group’s defined benefit plans. (The surplus is limited to the currencies are retranslated at the rates prevailing at that
term, a change in the lease payments (e.g., changes to
account, revenue includes excise duty. Revenue does present value of economic benefits available in the form of date. Differences arising on settlement or translation
future payments resulting from a change in an index or rate
not include other taxes like goods and service tax, value refunds from the plans or reductions in future contributions of monetary items are recognised in the consolidated
used to determine such lease payments) or a change in the
added tax and central sales tax etc. to the plans). The present value of the obligation is statement of profit and loss. Non-monetary items carried
assessment of an option to purchase the underlying asset.
determined using the projected unit credit method, with at fair value that are denominated in Foreign Currencies
The Group applies the short-term lease recognition (ii) Variable consideration are retranslated at the rates prevailing at the date when
actuarial valuations being carried out at the end of each year.
exemption to its short-term leases of plant and machinery The variable consideration is estimated at contract the fair value was determined. Non-monetary items
and building (i.e., those leases that have a lease term of 12 Remeasurements, comprising of actuarial gains and losses, that are measured in terms of historical cost in a foreign
inception and constrained until it is highly probable
months or less from the commencement date and do not the effect of the asset ceiling, excluding amounts included in currency are not retranslated.
that a significant revenue reversal in the amount of
contain a purchase option). It also applies the lease of low- net interest on the net defined benefit liability and the return
cumulative revenue recognised will not occur when the Exchange difference arising on settlement/ restatement
value assets recognition exemption to leases of plant and on plan assets (excluding amounts included in net interest on
associated uncertainty with the variable consideration of long-term foreign currency monetary items recognized
machinery and vehicles that are considered to be low value. the net defined benefit liability), are recognised immediately
is subsequently resolved. The volume rebates give rise to in the financial statements for the year ended March 31,
Lease payments on short-term leases and leases of low-value in the consolidated balance sheet with a corresponding debit
variable consideration. The Group provides retrospective 2016 prepared under previous GAAP, are capitalized as a
assets are recognised as expense on a straight-line basis over or credit to retained earnings through OCI in the period in
volume rebates to certain customers once the quantity part of the depreciable fixed assets to which the monetary
the lease term. which they occur. Remeasurements are not reclassified to
of products purchased during the period exceeds a item relates and depreciated over the remaining useful
the consolidated statement of profit and loss in subsequent
threshold specified in the contract. Rebates are offset life of such assets. If such monetary items do not relate
Impairment of the right-of-use asset periods.
against amounts payable by the customer. The Group to acquisition of depreciable fixed assets, the exchange
Right-of-use assets are subject to existing impairment
applies the requirements on constraining estimates of Past service costs are recognised in the consolidated difference is amortised over the maturity period/ upto
requirements as set out in ‘Impairment of non-financials
variable consideration and recognises a refund liability statement of profit and loss on the earlier of the date of the date of settlement of such monetary item, whichever
assets’’
for the expected future rebates. the plan amendment or curtailment, and the date that the is earlier and charged to the Statement of Profit and
G. Inventories Group recognises related restructuring costs. Net interest Loss. The un-amortised exchange difference is carried
(iii) Contract Liabilities
Inventories are valued at the lower of cost and net realisable is calculated by applying the discount rate to the net under other equity as “Foreign currency monetary
A contract liability is recognised if a payment is received defined benefit liability or asset. The Group recognises the
value. item translation difference account” net of tax effect
or a payment is due (whichever is earlier) from a customer following changes in the net defined benefit obligation in the thereon, where applicable. Exchange difference arising
Cost of inventories comprise of all costs of purchase, costs before the Group transfers the related goods or services. consolidated statement of profit and loss: on settlement / restatement of other items are charged
of conversion and other costs incurred in bringing the Contract liabilities are recognised as revenue when the
• 
Service costs comprising current service costs, past- to statement of profit and loss.
inventories to their present location and condition. The cost Group performs under the contract (i.e., transfers control
of crude oil purchased and coal inventory is determined on a service costs, gains and losses on curtailments and non-
of the related goods or services to the customer).
routine settlements as employee benefit expense.

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ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(ii) Group companies an item not at fair value through profit or loss (FVTPL), premium on acquisition and fees or costs that are expire, or when it transfers the financial asset and
On consolidation, the assets and liabilities of foreign transaction costs that are directly attributable to its an integral part of the EIR. The EIR amortisation is substantially all the risks and rewards of ownership of
operations are translated into INR at the rate of exchange acquisition or issue. included in finance income in the statement of profit the asset to another party.
prevailing at the reporting date and their statements of and loss. The losses arising from impairment are
b) Classification of financial assets On derecognition of a financial asset in its entirety, the
profit or loss are translated at exchange rates prevailing recognised in the statement of profit and loss. This
On initial recognition, a financial asset is classified into difference between the asset’s carrying amount and the
at the dates of the transactions. For practical reasons, category generally applies to deposits, advances, trade
one of the following categories: sum of the consideration received and receivable and
the group uses an average rate to translate income and other receivables.
the cumulative gain or loss that had been recognised
and expense items, if the average rate approximates • Equity instruments at fair value through profit or in other comprehensive income and accumulated in
Financial assets other than equity investment at
the exchange rates at the dates of the transactions. loss (FVTPL) equity is recognised in profit or loss if such gain or loss
FVTOCI:
The exchange differences arising on translation for would have otherwise been recognised in profit or loss
• Financial assets other than equity investment at A debt instrument is classified as FVTOCI only if it
consolidation are recognised in OCI. On disposal of a
amortised cost meets both of the following conditions and is not on disposal of that financial asset.
foreign operation, the component of OCI relating to
that particular foreign operation is reclassified in the • Financial assets other than equity investment at designated at FVTPL; d) Impairment of financial assets
consolidated statement of profit or loss. fair value through other comprehensive income • The asset is held within a business model whose In accordance with Ind AS 109, the Group uses
(FVTOCI) objective is achieved by both collecting contractual ‘Expected Credit Loss’ (ECL) model, for evaluating
Any goodwill arising on the acquisition/ business
combination of a foreign operation and any fair value • Financial assets other than equity investment at fair cash flows and selling financial assets, and impairment of financial assets other than those
adjustments to the carrying amounts of assets and value through profit or loss (FVTPL) measured at FVTPL. Expected credit losses are
• The contractual terms of the financial asset give
liabilities arising on the acquisition are treated as assets measured through a loss allowance at an amount equal
Equity instruments at fair value through profit or loss rise on specified dates to cash flows that are solely
and liabilities of the foreign operation and translated to:
(FVTPL) payments of principal and interest on the principal
at the spot rate of exchange at the reporting date. The amount outstanding. • The 12-months expected credit losses (expected
restated gain / loss is recognised in OCI. Financial assets at fair value through profit or loss
credit losses that result from those default events
are carried in the statement of financial position at For debt instruments at fair value through OCI, interest
on the financial instrument that are possible within
L. Financial Instruments fair value with net changes in fair value recognised income, foreign exchange revaluation and impairment
12 months after the reporting date); or
A financial instrument is any contract that gives rise to in the statement of profit or loss. This category losses or reversals are recognised in the consolidated
a financial asset of one entity and a financial liability or includes equity investments which the Group had not statement of profit or loss and computed in the same • For other assets, the Group uses 12 month Expected
equity instrument of another entity. Financial instruments irrevocably elected to classify at fair value through manner as for financial assets measured at amortised Credit Loss to provide for impairment loss where
comprise of financial assets and financial liabilities. OCI. Dividends on equity investments are recognised cost. The remaining fair value changes are recognised there is no significant increase in credit risk. If there
Financial assets primarily comprise of loans and advances, as other income in the consolidated statement of in OCI. Upon derecognition, the cumulative fair value is significant increase in credit risk full lifetime
deposits, trade receivables and cash and cash equivalents. profit and loss when the right of payment has been change recognised in OCI is recycled to profit or loss. Expected Credit Loss is used.
Financial liabilities include trade and other payables, loans established.
Financial assets other than equity investment at • Full lifetime expected credit losses (expected credit
and borrowings including bank overdrafts, and derivative losses that result from all possible default events
Financial assets other than equity investment FVTPL:
financial instruments. Derivatives can be financial assets or over the life of the financial instrument).
measured at amortised cost: FVTPL is a residual category for financial assets. Any
financial liabilities depending on whether value is positive or
A financial asset is measured at amortised cost if it debt instrument, which does not meet the criteria For trade receivables, the Group applies ‘simplified
negative respectively.
meets both of the following conditions and is not for categorization as at amortized cost or as FVTOCI, approach’ which requires expected lifetime losses
Financial assets and financial liabilities are recognised when designated at FVTPL: is classified as at FVTPL. In addition, the group may to be recognised from initial recognition of the
an entity becomes a party to the contractual provisions of elect to designate a debt instrument, which otherwise receivables. The Group uses historical default rates to
• 
The asset is held within a business model whose
the instrument. meets amortized cost or FVTOCI criteria, as at FVTPL.
objective is to hold assets to collect contractual determine impairment loss on the portfolio of trade
cash flows, and However, such election is allowed only if doing so receivables. At every reporting date these historical
(i) Financial Assets
reduces or eliminates a measurement or recognition default rates are reviewed and changes in the forward
a) Initial Recognition and measurement • 
The contractual terms of the financial asset give inconsistency (referred to as ‘accounting mismatch’). looking estimates are analysed.
rise on specified dates to cash flows that are solely
The Group initially recognises loans and advances,
payments of principal and interest on the principal Debt instruments included within the FVTPL category
deposits and debt securities issued on the date on e) Effective interest method
amount outstanding. are measured at fair value with all changes recognized
which they originate. All other financial instruments The effective interest method is a method of
in the consolidated statement of profit and loss.
(including regular way purchases and sales of financial This category is the most relevant to the Group. calculating the amortised cost of a debt instrument and
assets) are recognised on the trade date, which is After initial measurement, such financial assets are c) Derecognition of financial assets of allocating interest income over the relevant period.
the date on which the Group becomes a party to the subsequently measured at amortised cost using the The Group derecognises a financial asset when the The effective interest rate is the rate that exactly
contractual provisions of the instrument. A financial effective interest rate (EIR) method. Amortised cost contractual rights to the cash flows from the asset discounts estimated future cash receipts (including all
asset is initially measured at fair value plus / minus, for is calculated by taking into account any discount or fees and points paid or received that form an integral

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

part of the effective interest rate, transaction costs and payment of the supplier by the financial institution as All derivatives are initially recognised at fair value at the Reserve”. The gain or loss relating to the ineffective
other premiums or discounts) through the expected a non-cash transaction and the other associated cash date the derivative contracts are entered into and are portion is recognised immediately in the statement
life of the debt instrument, or, where appropriate, a flows are presented as cash flows from operating subsequently remeasured to their fair value at the end of of profit and loss. Amounts deferred in the Cash Flow
shorter period, to the net carrying amount on initial activities. In other instances, the associated cash flows each reporting period. Derivatives are carried as financial Hedge Reserve Account are recycled in the statement
recognition. are presented as cash flows from financing activities. assets when the fair value is positive and as financial of profit and loss in the periods when the hedged item
liabilities when the fair value is negative. is recognised and affects the statement of profit and
Income is recognised on an effective interest basis Interest expense on these are recognised in the finance
loss, in the same line as the hedged item.
for debt instruments other than those financial assets cost. The resulting gain or loss is recognised in the consolidated
classified as at FVTPL. Interest income is recognized statement of profit and loss immediately unless the Hedge accounting is discontinued when - the hedging
d) Financial liabilities:
in the consolidated statement of profit and loss and is derivative is designated and effective as a hedging instrument expires or is sold, terminated, or exercised,
included in the ‘Other income’ line item. The financial liabilities used to minimise accounting instrument, in which event the timing of the recognition in or no longer qualifies for hedge accounting. In case
mismatch are classified and measured as at FVTPL the consolidated statement of profit and loss or otherwise of cash flow hedges, any cumulative gain or loss
(ii) Financial liabilities / debt and equity instruments
in accordance with Ind AS 109. All other financial depends on the nature of the hedge item. deferred in the Cash Flow Hedge Reserve Account
a) Classification as financial liability / debt or equity liabilities (including borrowings and trade and other at that time is retained and is recognised when the
Derivatives embedded in non-derivative host contracts
Debt and equity instruments issued by a Group are payables) are subsequently measured at amortised forecast transaction is ultimately recognised and
that are not financial assets within the scope of Ind AS
classified as either financial liabilities or as equity in cost using the effective interest method. Gains and affects the statement of profit and loss. When a
109 ‘Financial Instruments’ are treated as separate
accordance with the substance of the contractual losses are recognised in the consolidated statement of forecast transaction is no longer expected to occur, the
derivatives when their risks and characteristics are not
arrangements and the definitions of a financial liability profit and loss when the liabilities are derecognised as cumulative gain or loss that was deferred is recognised
closely related to those of the host contracts and the host
and an equity instrument in Ind AS 32. well as through the EIR amortisation process. immediately in the statement of profit and loss.
contracts are not measured at FVTPL.
b) Financial liabilities / debt e) Derecognition of financial liabilities: N. Borrowing Costs
(ii) Hedge Accounting
Financial liabilities are classified, at initial recognition, The Group derecognises financial liabilities when, and Borrowing costs consists of interest and other costs that an
For the purpose of hedge accounting, hedges are classified
as financial liabilities at fair value through profit or only when, the Group’s obligations are discharged, entity incurs in connection with the borrowing of funds.
as:
loss, loans and borrowings including payables, or as cancelled or have expired. An exchange between with a
Borrowing cost also includes exchange differences to the
derivatives designated as hedging instruments in an lender of debt instruments with substantially different • Fair value hedges when hedging the exposure to
extent regarded as an adjustment to the borrowing costs.
effective hedge, as appropriate. terms is accounted for as an extinguishment of the changes in the fair value of a recognised asset or
original financial liability and the recognition of a new liability or an unrecognised firm commitment Borrowing costs directly attributable to the acquisition,
All financial liabilities are recognised initially at fair financial liability. Similarly, a substantial modification construction or production of qualifying assets, which are
value and, in the case of loans and borrowings and • Cash flow hedges when hedging the exposure to
of the terms of an existing financial liability (whether assets that necessarily take a substantial period of time to
payables, plus directly attributable transaction costs. variability in cash flows that is either attributable to
or not attributable to the financial difficulty of the get ready for their intended use, are added to the cost of
a particular risk associated with a recognised asset
The Group’s financial liabilities include trade and debtor) is accounted for as an extinguishment of the those assets, until such time as the assets are substantially
or liability or a highly probable forecast transaction
other payables, loans and borrowings including bank original financial liability and the recognition of a new ready for their intended use. All other borrowing costs are
or the foreign currency risk in an unrecognised firm
overdrafts, and derivative financial instruments. financial liability. The difference between the carrying recognised in the Statement of profit and loss in the period
commitment
Derivative can be financial assets or financial liabilities amount of the financial liability derecognised and the in which they are incurred.
depending on whether value is positive or negative new liability recognised plus consideration paid or • Hedges of a net investment in a foreign operation
O. Taxes
respectively. payable is recognised in the consolidated statement of At the inception of the hedge relationship, the Group
profit and loss. documents the relationship between the hedging (i) Current Income tax
c) Supplier’s credit and Buyer’s credit:
instrument and the hedged item, along with its risk Current income tax assets and liabilities are measured
The Group enters into an arrangement whereby banks M. Derivative financial instruments and hedge accounting
management objectives and its strategy for undertaking at the amount expected to be recovered from or paid to
make direct payment to supplier on due date. The (i) Initial recognition and subsequent measurement
various hedge transactions. Furthermore, at the the taxation authorities. The tax rates and tax laws used
banks are subsequently paid by the Group at later date of Derivative and embedded derivatives financial
instruments inception of the hedge and on an ongoing basis, the Group to compute the amount are those that are enacted or
based on the extended credit terms agreed with the
documents whether the hedging instrument is effective substantively enacted, at the reporting date.
banks. Where this arrangement is agreed with supplier The Group enters into a variety of derivative financial
in offsetting changes in cash flows of the hedged item
and the Group’s legal liability remains towards the instruments to manage its exposure to interest rate, Current income tax relating to items recognised outside
attributable to the hedged risk.
supplier only, in such cases the liability is classified commodity price and foreign exchange rate risks. These consolidated statement of profit and loss is recognised
as Trade Payable in the balance sheet and in other derivatives include foreign exchange forward contracts, (iii) Cash flow hedges outside consolidated statement of profit and loss
instances the same is classified as a borrowing. foreign exchange options, commodity forward contracts, (either in other comprehensive income or in equity).
Changes in the fair value of derivatives/ hedging
interest rate swaps and cross / full currency swaps. For Current tax items are recognised in correlation to the
If the classification of the liability under the above instruments that are designated and qualify as cash
risk management objectives refer note 41(C). underlying transaction either in OCI or directly in equity.
arrangement is a Trade Payable, the Group treats the flow hedges are deferred in the “Cash Flow Hedge
Management periodically evaluates positions taken

162 163
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

in the tax returns with respect to situations in which to be utilised. Unrecognised deferred tax assets are re- future events not wholly within the control of the Group A liability is current when:
applicable tax regulations are subject to interpretation assessed at each reporting date and are recognised to the or a present obligation that is not recognized because it is
• It is expected to be settled in normal operating cycle
and establishes provisions where appropriate. extent that it has become probable that future taxable not probable that an outflow of resources will be required
profits will allow the deferred tax asset to be recovered to settle the obligation. A contingent liability also arises in • It is held primarily for the purpose of trading
(ii) Deferred tax
extremely rare cases where there is a liability that cannot • It is due to be settled within twelve months after the
Deferred tax assets and liabilities are measured at the tax
Deferred tax is provided using the liability method on be recognized because it cannot be measured reliably.
rates that are expected to apply in the year when the asset reporting period, or
temporary differences between the tax bases of assets The Group does not recognize a contingent liability but
is realised or the liability is settled, based on tax rates (and • There is no unconditional right to defer the settlement of
and liabilities and their carrying amounts for financial discloses it in the financial statements, unless the possibility
tax laws) that have been enacted or substantively enacted the liability for at least twelve months after the reporting
reporting purposes at the reporting date. of an outflow of resources embodying economic benefits is
at the reporting date. period
Deferred tax liabilities are recognised for all taxable remote.
Deferred tax relating to items recognised outside The Group classify all other liabilities as Non Current.
temporary differences, except:
statement of profit and loss is recognised outside Q. Cash and Cash Equivalent
• When the deferred tax liability arises from the initial statement of profit and loss (either in other comprehensive Cash and short-term deposits in the consolidated balance Deferred tax assets and liabilities are classified as Non –
recognition of goodwill or an asset or liability in a income or in equity). Deferred tax items are recognised in sheet comprise cash at banks and on hand and short-term current assets and liabilities
transaction that is not a business combination and, correlation to the underlying transaction either in OCI or deposits with an original maturity of three months or less, The terms of the liability that could, at the option of the
at the time of the transaction, affects neither the directly in equity. which are subject to an insignificant risk of changes in value. counterparty, result in its settlement by the issue of equity
accounting profit nor taxable profit or loss. instruments do not affect its classification.
Deferred tax assets and deferred tax liabilities are offset For the purpose of the consolidated statement of cash
• In respect of taxable temporary differences associated if a legally enforceable right exists to set off current tax flows, cash and cash equivalents consist of cash and short-
with investments in subsidiaries, when the timing assets against current tax liabilities and the deferred term deposits, as defined above, net of outstanding bank 4. Critical accounting judgments and key sources
of the reversal of the temporary differences can taxes relate to income taxes levied by the same taxation overdrafts as they are considered an integral part of the of estimation uncertainty
be controlled and it is probable that the temporary authority on the same taxable entity. Group’s cash management. The preparation of the Group’s consolidated financial
differences will not reverse in the foreseeable future. statements requires management to make judgements,
(iii) Sales tax (includes value added tax and Goods and R. Exceptional items
Deferred tax assets are recognised for all deductible estimates and assumptions about the reported amounts
services tax) Exceptional items are those items that management
temporary differences, the carry forward of unused of assets and liabilities, and, income and expenses and
tax credits and any unused tax losses. Deferred tax Expenses and assets are recognised net of the amount of considers, by virtue of their size or incidence, should be accompanying disclosures, and the disclosure of contingent
assets are recognised to the extent that it is probable sales tax, except: disclosed separately to ensure that the financial information liabilities. Uncertainty about these assumptions and
that taxable profit will be available against which allows a better understanding of the underlying performance estimates could result in outcomes that require a material
• 
When the sales tax incurred on a purchase of assets or
the deductible temporary differences, and the carry of the business in the year and facilitates more appropriate adjustment to the carrying amount of assets or liabilities
services is not recoverable from the taxation authority,
forward of unused tax credits and unused tax losses comparison with prior periods. Exceptional items are affected in future periods.
in which case, the tax paid is recognised as part of the
can be utilised. However, recognition of deferred tax adjusted in arriving at profit before tax.
cost of acquisition of the asset or as part of the expense A. Critical accounting judgements
asset is subject to the following exceptions: When the item, as applicable S. Current and Non-Current Classification
deferred tax asset relating to the deductible temporary In the process of applying the Group’s accounting policies,
difference arises from the initial recognition of an • When receivables and payables are stated with the The Group presents assets and liabilities in the balance sheet the management has made the following judgements, which
asset or liability in a transaction that is not a business amount of tax included based on current/ non-current classification. have the most significant effect on the amounts recognised
combination and, at the time of the transaction, affects The net amount of sales tax recoverable from, or payable An asset is treated as current when it is: in the consolidated financial statements:
neither the accounting profit nor taxable profit or loss. to, the taxation authority is included as part of other
• 
Expected to be realised or intended to be sold or i) Determination of functional currency
• 
In respect of deductible temporary differences assets and other liabilities in the consolidated balance
consumed in normal operating cycle The Management makes judgements in determining the
associated with investments in subsidiaries, deferred sheet.
• Held primarily for the purpose of trading functional currency based on economic substance of
tax assets are recognised only to the extent that it is the transactions relevant to each entity in the Group. In
P. Provisions and Contingent liabilities
probable that the temporary differences will reverse • Expected to be realised within twelve months after the concluding that Indian Rupees is the functional currency
A provision is recognised when there is a present obligation
in the foreseeable future and taxable profit will be reporting period, or for the parent company, the management considered
as a result of a past event, it is probable that an outflow of
available against which the temporary differences can (i) the currency that mainly influences the sales prices
resources embodying economic benefits will be required to • 
Cash or cash equivalent unless restricted from being
be utilized. for goods and services, the labour, material and other
settle the obligation and a reliable estimate can be made of exchanged or used to settle a liability for at least twelve
The carrying amount of deferred tax assets is reviewed the amount of the obligation. months after the reporting period costs of providing goods and services, and (ii) the effect
at each reporting date and reduced to the extent that it of the competitive forces and regulations of the country
A contingent liability is a possible obligation that arises from • All other assets are classified as non-current.
is no longer probable that sufficient taxable profit will which mainly determine the sales prices of the goods
past events and whose existence will be confirmed only by and services. As no single currency was clearly dominant,
be available to allow all or part of the deferred tax asset
the occurrence or non-occurrence of one or more uncertain

164 165
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.)

52,866
12,683
376,579
123
958
(` in million)

56

443,265

5,251

108,184

331

25,583
38,240
595,271
9,440
1,365
1,495
357
12,657
(III) = (I - II)
Net block

31,2020
March
As at
For the year ended March 31, 2021

-
4,495
74,894
151
784
84

80,408

980

1,470
2,427
83,815
390
253
305
9
957
31,2020
March
As at
the management also considered secondary indicators Impairment exists when the carrying value of an asset
including the currency in which funds from financing or cash generating unit exceeds its recoverable amount,
activities are denominated and the currency in which which is the higher of its fair value less costs of disposal

-
-
74
7
57
2

140

-
-
141
-
-
-
-
-
funds are retained. The management has concluded that and its value in use. In assessing value in use, the estimated

Depreciation / amortisation

Deductions
INR is the functional currency of the parent. future cash flows are discounted to their present value
using pre-tax discount rate that reflects current market

6 Property, Plant and Equipment, Capital-Work-In-Progress, Goodwill, Other Intangible assets and Right-of-use assets
B. Estimates and assumptions
assessments of the time value of money and the risks
The key assumptions concerning the future and other key

(II)
specific to the asset. In determining fair value less costs

-
694
18,708
20
256
8

19,686

122

390
253
305
9

1,470
2,427
22,235
957
sources of estimation uncertainty at the reporting date,

During the
of disposal, recent market transactions are taken into
that have a significant risk of causing a material adjustment

year
account, if no such transactions can be identified, an
to the carrying amounts of assets and liabilities within the appropriate valuation model is used.
next financial year, are described below. The Group based
its assumptions and estimates on parameters available The key assumptions used to determine the recoverable

-
3,801
56,260
138
585
78

60,862

859

-
-
-
-

-
-
61,721
-
April 01, 2019
when the consolidated financial statements were prepared. amount for the different CGUs, including a sensitivity
analysis, are disclosed and further explained in note 43.

As at
Existing circumstances and assumptions about future
developments, however, may change due to market changes iv) Property Plant and Equipment/Other Intangible Assets

Notes to consolidated financial statements (Contd.)

or circumstances arising that are beyond the control of the
Property, Plant and Equipment/Other Intangible Assets
Group. Such changes are reflected in the assumptions when

52,866
17,178
451,473
274
1,742
140

523,673

108,184

1,311

9,830
1,618
1,800
366

27,053
40,667
673,835
13,614
are depreciated/ amortised over their estimated useful
they occur.

31,2020
March
life, after taking into account estimated residual value.

As at
i) Contingencies Management reviews the estimated useful life and
In the normal course of business, contingent liabilities residual values of the assets annually in order to

-
-
236
8
61
2

307

102
-
-
94

85
281
589
196
may arise from litigation and other claims against the determine the amount of depreciation/amortisation to

Remeasurement
Deductions/
Group. Potential liabilities that are possible but not be recorded during any reporting period. The useful life
probable of crystalizing or cannot be quantified reliably and residual values are based on the Group’s historical
are treated as contingent liabilities. Among other matters, experience with similar assets and take into account

Gross block
such determination require involvement of legal and anticipated technological changes. The depreciation/

(I)
other subject matter experts. Depending on materiality, amortisation for future periods is revised if there are

48
237
3,943
11
858
22

5,119

187

9,932
1,618
1,800
460

27,138
40,948
46,254
13,810
(refer note 3
the Group may involve internal and/ or external experts significant changes from previous estimates. Details of

Additions

below)
to make such assessment. Contingent liabilities are changes, the reason thereto and its financial effect are
disclosed in the notes but are not recognized. refer note given in note 6 (5) below.
no 35.
5. Changes in accounting policies and Standards

52,818
16,941
447,766
271
945
120

518,861

108,184

1,125

-
-
-
-

-
-
628,170
-
ii) Duty drawback
issued but not yet effective

April 01,
2019
As at
Income on duty draw-back is recognised to the extent
There are no new standards that are notified, but not yet
that it is probable that the economic benefits will flow

For the year ended March 31, 2021

effective, upto the date of issuance of the Group’s financial
to the Group and the revenue can be reliably measured,
statements.
regardless of when the payment is being made. The Group

A) Property,Plant & Equipment -Owned

E) Right-of-use assets (refer note - 38)

claims drawback of National Calamity Contingent duty

Vehicles (Includes boats and ships /

Total Property, Plant and Equipment

(NCCD) and Basic Custom duty (BCD) on exports in line
with duty drawback rules and recognizes the same as

Vehicles (including vessels)

B) Capital Work In Progress
revenue. Refer note 37 (A) for details.

Capital work-in-progress

D) Other intangible assets

Total Right-of-use assets

Description of the assets

Furniture and fixtures

Softwares & licenses

Plant and machinery
iii) Impairment of non-financial assets

Total Tangible Assets

Office equipments

Plant & machinery

Intangible Assets

Total (A+B+C+D+E)
Goodwill is tested for impairment annually and when

Tangible Assets
Land (Freehold)

charter vessels)
circumstances indicate that the carrying value may be

Trademark
C) Goodwill
Buildings

Goodwill
impaired. Impairment is determined for goodwill by

Building
assessing the recoverable amount of each CGU (or group

Land
of CGUs) to which the goodwill relates.

166 167
168
Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021
6P
 roperty, Plant and Equipment, Capital-Work-In-Progress, Goodwill, Other Intangible assets and Right-of-use assets
(` in million)
Description of the assets Gross block Depreciation / amortisation Net block
(I) (II) (III) = (I - II)
As at Additions (refer Deductions/ As at As at During Deductions As at As at
NAYARA ENERGY LIMITED
ANNUAL REPORT 2020-21

April 01, 2020 note 3 below) Remeasurement March 31,2021 April 01, 2020 the year March 31,2021 March 31,2021
(refer note
5 below)
A) Property,Plant & Equipment -Owned
Land (Freehold) 52,866 - - 52,866 - - - - 52,866
Buildings 17,178 98 - 17,276 4,495 721 - 5,216 12,060
Plant and machinery 451,473 3,689 2,787 452,375 74,894 14,670 2,701 86,863 365,512
Furniture and fixtures 274 22 2 294 151 21 2 170 124
Office equipments 1,742 413 20 2,135 784 373 19 1,138 997
Vehicles (Includes boats and ships / 140 5 6 139 84 9 6 87 52
charter vessels)
Total Property, Plant and Equipment 523,673 4,227 2,815 525,085 80,408 15,794 2,728 93,474 431,611
B) Capital Work In Progress
Capital work-in-progress 8,996
C) Goodwill
Goodwill 108,184 - - 108,184 - - - - 108,184
D) Other intangible assets
Softwares & licenses 1,311 63 - 1,374 980 114 - 1,094 280
E) Right-of-use assets (refer note - 38)
Tangible Assets
Land 9,830 772 998 9,604 390 430 - 820 8,784
Building 1,618 63 7 1,674 253 228 3 478 1,196
Plant & machinery 1,800 862 - 2,662 305 516 - 821 1,841
Vehicles (including vessels) 366 1,268 39 1,595 9 699 - 708 887
Total Tangible Assets 13,614 2,965 1,044 15,535 957 1,873 3 2,827 12,708
Intangible Assets
Trademark 27,053 - 327 26,726 1,470 1,457 - 2,927 23,799
Total Right-of-use assets 40,667 2,965 1,371 42,261 2,427 3,330 3 5,754 36,507
Total (A+B+C+D+E) 673,835 7,255 4,186 676,904 83,815 19,238 2,731 100,322 585,578
for details of assets pledge as security, refer note 18 and 22.
Notes: 1 Land and building having carrying value of ` 2,676 million (Previous year ` 2,676 million) has been pledged for a loan taken by a third party. The Group is in discussion with the lender
for release of the pledge.
2 Additions to plant and machinery are net off exchange gain on long-term foreign currency borrowing taken to finance property plant and equipment (refer note 3(K)) amounting to ` 356
million (Previous year loss of ` 1,507 million).
3 In line with its refinery turnaround practices, the Group had completed turnaround activities of its refinery during the year. The Group incurred total cost of ` 3,577 million which includes
catalyst and materials consumption of ` 1,915 million, salary of ` 125 million and other expense of ` 1,537 million (Previous year ` 324 million under other expenses) on the major
maintenance activity which have been capitalised to the plant and machinery.
4 The Group incurred total cost of ` 1,067 million as Expenditure During Construction (including salary of ` 302 million and other expense of ` 765 million) (Previous year ` 1,809 million
(including salary of ` 264 million and other expense of ` 1,545 million)) for petrochemical project which is included in Capital work in progress.
5 The Group based on external technical evaluation, reassessed the estimates relating to the lives of Plant & Machinery during current financial year. Accordingly lives of the some of the
core refinery assets were increased from a maximum of 40 years to 50 years and simultaneously the components within the same have also been reassessed. These changes were made
to better reflect the estimated periods during which such assets will remain in service. The changes in estimated useful lives have has resulted in lower depreciation expenses of ` 4,791
million for the year ended March 31, 2021.

Particulars
Particulars
Particulars

Security deposits

Derivative Assets
Other receivables

- Considered good
Others {refer note 37(B)}
Other Investments - At FVTPL

- significant increase in credit risk

Interest accrued on bank deposits

@ companies are under liquidation.
* Investments are fair valued at Zero.
` 10 each of Petronet VK Limited*

` 10 each of Petronet CI Limited * @

Investments in equity shares (fully paid-up)

Aggregate amount of unquoted investments

Export incentive receivables {refer note 37(A)}

` 0.10 each of Petronet India Limited * @

- Less: Expected credit loss {refer note 41(C)(v)}

For the year ended March 31, 2021

8 Other Financial Assets (Non Current)

7 Investments (Non Current) (Unquoted)

1,584,000 (Previous year 1,584,000) equity shares of

10,000,000 (Previous year 10,000,000) equity shares of

13,000,000 (Previous year 13,000,000) equity shares of

(Unsecured and considered good, unless otherwise stated)

Bank Deposits with remaining maturity of more than twelve months#

CORPORATE OVERVIEW

For details of assets pledged as security against borrowings, refer note 18 and 22.
(B)
(A)

Total ((A)+(B)+(C)+(D)+(E))
(E)
(D)
(C)
Total
Total

As at
As at
As at
BOARD’S REPORT

7
381
2,076
(423)
423
791
1,285
372

2,883
47
-
-
-
-
-
-

March 31, 2021

March 31, 2021
March 31, 2021
Notes to consolidated financial statements (Contd.)

As at
As at
As at

10
376
789
(338)
338
789
-
333

1,770
262
-
-
-
-
-
-

# mainly placed as margin for guarantees obtained from banks and to earn interest at the respective short-term deposit rates.
March 31, 2020
March 31, 2020
March 31, 2020

(` in million)
FINANCIAL STATEMENTS

(` in million)

169
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

9 Other non-current assets 12 Cash and cash equivalents

(` in million) (` in million)
Particulars As at As at Particulars As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Prepaid expenses (refer note 46) 310 240 Balances with banks in:
Balances with government authorities 41 -
-Current accounts 3,167 7,084
Capital advances 280 245
-Exchange earners' foreign currency (EEFC) accounts 16,906 19,137
Claims / Other Receivables
-Deposits with original maturities less than 3 months* 13,118 3,799
- Considered good 2,257 2,247
Cash on hand 0 -
- Considered doubtful 303 280
Total 33,191 30,020
Less: Provision for doubtful debt (303) (280)
2,257 2,247 *Short-term deposits are made with banks for varying periods of up to three months depending on the immediate cash requirements
Total 2,888 2,732 of the Group and to earn interest at the respective short-term deposit rates.

For details of assets pledged as security against borrowings, refer note 18 and 22.
13 Bank balances other than Cash and cash equivalents
10 Inventories (` in million)
(` in million) Particulars As at As at
Particulars As at As at March 31, 2021 March 31, 2020
March 31, 2021 March 31, 2020 Earmarked bank balances (debenture / unclaimed debenture interest)# 78 10
Raw materials {including in transit ` 17,923 million (Previous year ` 8,995 million)} 45,751 21,839 Margin deposits* 8,388 6,478
Work-in-progress 20,423 17,149 Other deposits 45 4,568
Finished goods {including in transit ` 5,892 million (Previous year ` 2,777 million)} 19,051 13,540 Total 8,511 11,056
Stores and spare parts {including in transit ` 4 million (Previous year ` 8 million)} 5,907 5,091
# Earmarked bank balances include ` 68 million payable as purchase consideration to NRI shareholders of Vadinar Oil Terminal
Other consumables {including in transit ` Nil (Previous year ` 662 million)} 2,316 1,662
Limited (formerly a subsidiary of the company) now merged with the Company.
Total 93,448 59,281
* Mainly placed as margin for letters of credit facilities, guarantees, short term borrowings and long term borrowings obtained from
a. Inventories are net of non-cash inventory holding loss amounting to ` Nil (Previous year ` 11,822 million), refer note 33.
banks and to earn interest at the respective bank deposit rates.
b. For details of inventories pledged as security against borrowings, refer note 18 and 22.
c. refer note 3(G) for basis of valuation.
14 Other Financial Assets (Current)
11 Trade receivables (Unsecured and considered good, unless otherwise stated)

(` in million) (` in million)
Particulars As at As at Particulars As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Trade Receivables considered good - Unsecured* 19,679 12,703 Security deposits (A) 73 221
Trade Receivables - credit impaired 11 8 Other receivables
19,690 12,711 Export incentive receivables {refer note 37(A)} 4,372 4,614
- Less: Expected credit loss {refer note 41(C)(v)} (11) (8)
Others
Total 19,679 12,703
- Considered good 998 13,750
* Includes ` 14,821 million (Previous year ` 5,587 million) backed by letters of credit. - significant increase in credit risk 649 628
For the Group's exposure to credit and currency risks, and loss allowances related to trade receivables, refer note 41(C)(v). - Less: Expected credit loss {refer note 41(C)(v)} (649) (628)
For amounts due from related parties, refer note 46. (B) 5,370 18,364
For details of assets pledged as security against borrowings, refer note 18 and 22.
Interest accrued on bank deposits (C) 87 199
For details of bills discounting not meeting derecongnition criteria, refer note 22.
Derivative Assets (D) 4,865 12,787
The Group has discounted bill receivables amounting to ` 15,920 million (As at March 31, 2020 ` 7,391 million), on non-recourse
basis. The management has assessed that the Group does not have any continuing involvement with the said bills discounted, except Total ((A)+(B)+(C)+(D)) 10,395 31,571
in an unlikely scenario of dispute arising with regard to the existence of the receivable discounted. Accordingly, the discounting For details of assets pledged as security against borrowings, refer note 18 and 22.
meets derecognition criteria and the money received has been netted off from the trade receivables discounted.

170 171
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

15 Other Current assets b) The rights, preferences and restrictions attached to each class of shares including restrictions on the distribution of
(Unsecured and considered good, unless otherwise stated) dividends and the repayment of capital:

(` in million)
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of an equity share is entitled
Particulars As at As at to one vote per share.
March 31, 2021 March 31, 2020 The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual
Advances recoverable in cash or in kind or for value to be received 955 928 General Meeting.
Prepaid expenses (refer note 46) 2,717 4,114 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the
Balances with government authorities 353 376 Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
(A) 4,025 5,418 held by the shareholders.
Claims / other receivables Holders of GDS are entitled to receive dividends, subject to the terms of the Deposit Agreement, to the same extent as the
- Considered good 590 562 holders of equity shares, less the fees and expenses payable under the Deposit Agreement and any Indian tax applicable to
(B) 590 562 such dividends. The holders of GDS are entitled to instruct the Depository to exercise the voting rights, arising under the
Total ((A)+(B)) 4,615 5,980 equity shares represented by the GDS at general meetings and through postal ballot. In the event of liquidation the rights of
the GDS holders are equivalent to rights of the equity shareholders.
For details of assets pledged as security against borrowings, refer note 18 and 22.
c) Details of shareholders holding more than 5% shares (including GDS) in the Company:
16 Equity Share capital
Particulars As at March 31, 2021 As at March 31, 2020
Particulars As at March 31, 2021 As at March 31, 2020
Number of % of shares Number of % of shares
Number of ` in million Number of ` in million shares shares
shares shares
3,109,359 (3,109,359 as at March 31, 2020) GDS held
Authorised * 475,731,927 31.92% 475,731,927 31.92%
by Kesani Enterprise Company Ltd
Equity shares of ` 10 each 17,000,680,000 170,007 8,000,680,000 80,007
Equity shares held by Kesani Enterprise Company Ltd 256,594,520 17.21% 256,594,520 17.21%
Preference Shares of ` 10 each 1,000,000,000 10,000 1,000,000,000 10,000
Equity shares held by Rosneft Singapore Pte. Limited
Issued and subscribed 732,326,446 49.13% 732,326,446 49.13%
(Formerly known as Petrol Complex Pte. Limited)
Equity shares of ` 10 each 1,552,487,155 15,525 1,552,487,155 15,525 As per the records of the Company, including its register of shareholders/members, the above shareholding represents legal
Paid up ownership of equity shares.
Equity shares of ` 10 each fully paid up 1,490,561,155 14,906 1,490,561,155 14,906
Add : Forfeited shares - Equity shares of ` 10 each 61,926,000 166 61,926,000 166 17 Other equity
15,072 15,072 (` in million)
*Pursuant to the Scheme which became effective from December 14, 2020 post filing of orders, approving the Scheme of Particulars As at As at
Amalgamation (“Scheme”) of Vadinar Oil Terminal Limited (“VOTL”) with the Company, with the Registrar of Companies, the March 31, 2021 March 31, 2020
Authorized Equity Share Capital of VOTL aggregating to `90,000 million was combined with the Authorized Share Capital of the General reserve 596 596
Company resulting in increase in Authorised Share Capital of the Company from `90,007 million (divided into 8,000,680,000 Retained Earnings 121,990 117,383
equity shares of `10 each and 1,000,000,000 preference shares of ` 10 each) to `180,007 million (divided into 17,000,680,000 Other Comprehensive Income:
Equity Shares of `10/- each and 1,000,000,000 Preference Shares of `10/- each). Cash flow hedge reserve (9,579) (22,005)
Foreign currency monetary item translation difference account (124) (188)
a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year :
Foreign currency Translation Reserve (1) (0)
(` in million)
Other Reserves:
Particulars As at March 31, 2021 As at March 31, 2020
Capital reserve 609 409
Number of ` in million Number of ` in million
shares shares Securities premium 78,014 78,014
Total 191,505 174,209
Shares outstanding at the beginning of the year 1,490,561,155 14,906 1,490,561,155 14,906
Add : Equity shares issued - - - - General reserve: Represents the reserve created mainly on account of amount transfer from debenture redemption reserve on
Shares outstanding at the end of the year 1,490,561,155 14,906 1,490,561,155 14,906 redemption of debentures. It can be used for distribution to equity shareholders only after complying with restrictions contained
in The Companies (Declaration and Payment of Dividend) Rules, 2014.
The above includes 475,731,927 (Previous year 475,731,927) underlying equity shares represented by 3,109,359 (Previous
year 3,109,359) outstanding global depository shares (GDS). Each GDS represents 153 underlying equity shares.

172 173
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Retained earnings: Net earnings, retained by the Group to be reinvested in its core business. It also includes fair valuation of (A) Security for term loans and funded interest facilities from banks and debentures
property, plant and equipment and other assets done by the Group on transition to Ind AS and used as deemed cost of the concerned (` in million)
assets. Whether the Company can use these amount for distribution depend on specific requirements of the Companies Act, 2013 Sr Particulars As at As at
(as amended) and rules framed thereunder. Particularly, unrealised fair value gains cannot be used for dividend distribution. No March 31, 2021 March 31, 2020
i) ECB loan is secured by first charge, ranking pari passu with other term lenders
Cash flow hedge reserve: Changes in the fair value of derivatives/ hedging instruments that are designated and qualify as cash flow
on all present and future immovable assets (except certain leased out assets
hedges are deferred in the “Cash Flow Hedge Reserve”. The gain or loss relating to the ineffective portion is recognised immediately and fixed assets of power plant and port), all present and future movable assets,
in the statement of profit and loss. Amounts deferred in the Cash Flow Hedge Reserve Account are recycled in the statement of 7,857 12,861
security interest on the rights, title and interest under project documents,
profit and loss in the periods when the hedged item is recognised and affects the statement of profit and loss, in the same line as insurance policies and second charge pari-passu with other term lenders on the
the hedged item. current assets.
ii) Rupee and USD loan availed from various banks are secured by first charge,
Foreign currency monetary item translation difference account: Represents exchange differences arising on reporting of long-
ranking pari- passu with other term lenders on the fixed assets ( movable and
term foreign currency monetary items that are accumulated and amortised over the balance period of such long-term liability by
immovable) , both present and future of the Company except land parcels and
recognition as income or expense in each such periods. fixed assets (movable and immovable) earmarked for port and power plant.
34,158 35,767
Capital reserve: Created reserve can be utilised for issuance of bonus shares. Second charge, pari- passu with other term lenders on the current assets of the
Company, first charge by way of assignment or security interest over all rights,
Securities premium: The amount in the account represents the additional amount shareholders paid for their issued shares that tiles, insurance and interest in all project documents to which the Company is a
was in excess of the par value of those shares. The same can be utilised for the items specified under section 52 of the Companies party, first charge on DSRA/margin as and when created.
Act, 2013. iii) 9.5% Non convertible debentures are secured by first charge, ranking pari-
passu with other lenders on the fixed assets (movable and immovable except
Foreign currency translation reserve: Represents exchange differences arising on translation of the foreign operations. The certain leased out assets and fixed assets of power plant and port), both present
cumulative amount is reclassified to profit or loss when the foreign operation is disposed-off. 23,980 23,920
and future of the Company in relation to Project, Second charge, pari- passu
with other term lenders on the current assets of the Company, first charge by
18 Borrowings way of assignment or security interest over insurance policy.

(` in million) iv) 8% Non convertible debentures are secured by second ranking pari passu
2,568 -
charge on movable fixed assets pertaining to the Port Facilities of the Company.
Particulars As at As at
March 31, 2021 March 31, 2020 v) Term loan from banks/ financial institutions are secured by first charge ranking
pari passu over all movable and immovable assets of the Company relating to
Secured Borrowings - At amortised cost Port, both present and future, Intangible assets of the Company both present
26,889 28,046
Debentures and future, insurance contracts, title and interests under project documents
Non convertible debentures 26,548 23,920 and second ranking pari passu charge on movable fixed assets relating to power
plant.
Term loans*
vi) Rupee loan availed from various banks are secured by first charge, ranking pari-
From banks 76,086 79,485 passu with other term lenders on the fixed assets (movable and immovable) ,
From financial institutions 3,219 3,305 both present and future of the Refinery except land parcels earmarked for port, 4,429 -
Current maturities of long term debt included under other financial liabilities (refer note 24) (33,294) (7,910) power and township. Second charge, pari- passu with other term lenders on the
Total 72,559 98,800 current assets of the Company.
vii) Rupee term loans are secured by first pari passu charge over both movable and
* refer note 41(C)(ii)for borrowings outstanding in foreign currencies. immovable fixed assets of power plant of the Company, both present and future,
5,972 6,116
Second charge, pari- passu with other term lenders on the current assets of the
Company.
Total 105,853 106,710

174 175
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(B) Repayment and other terms: 20 Taxation

(` in million)
(` in million)
Sr Particulars As at As at
Particulars As at As at
No March 31, 2021 March 31, 2020
March 31, 2021 March 31, 2020
i) ECB Loans carry interest rate of 3 months / 6 months LIBOR + margin ranging
Deferred tax liabilities (Net) 51,528 54,739
from 3.60% p.a. to 5.00% p.a. are repayable in unequal instalments starting from 7,857 12,861
March 2015 and ending in June 2024. Total 51,528 54,739

ii) Rupee loan and USD Loan from various lenders carry interest of respective (A) Income tax expense / (benefit)
lenders rate of 3/6 month MCLR/ 3 months USD LIBOR + spread ranging from
34,158 35,767 Particulars For the year ended For the year ended
40 bps to 360 bps and is repayable in unequal instalments starting from March
2018 and ending to September 2038. March 31, 2021 March 31, 2020
iii) The rupee term loan facility from banks carry interest rate at bank's 1Y MCLR + Current tax (A) 3 1,791
1.17% is repayable in 30 structured quarterly instalments beginning March 31, 5,972 6,116 Deferred tax (B) (7,420) (17,014)
2020 and ending to September 2027.
Total tax (reversed) in statement of profit and loss ((A)+(B)) (7,417) (15,223)
iv) Term loan carries an interest rate of MCLR/LIBOR + spread ranging from 0.75% Deferred tax charged / (reversed) to other comprehensive
p.a. to 3.55% p.a. and repayable in unequal quarterly instalments ending on 26,889 28,046 4,209 (7,095)
income / (loss)
September 2027 (including FCNR loans ` 8,689 million).
v) The rupee term loan facility from banks carry interest rate at bank's 3M/1Y (B) The income tax expenses for the year can be reconciled to the accounting profit as follows:
MCLR + spread ranging from zero to 0.70% is repayable in structured quarterly 4,429 -
Particulars For the year ended For the year ended
instalments ending to December 2027.
March 31, 2021 March 31, 2020
vi) Non-convertible debentures carry fixed interest of 8% p.a. is repayable in a
2,568 - (Loss) / Profit before tax (2,835) 9,777
single bullet in December 2025.
Statutory tax rate 25.17% 25.17%
vii) Non-convertible debentures carry fixed interest of 9.50% p.a. is repayable in a
23,980 23,920 Expected income tax expense at statutory rates (714) 2,461
single bullet in July 2021.
Items giving rise to difference in tax
Total 105,853 106,710 Disallowances on tax assessment - 830
Deferred tax asset not recognised (net) 213 133
19 Other financial liabilities (Non-Current) Effect of change in indexed cost of land (456) (243)
(` in million) Effect of change in Statutory tax rate - (18,458)
Impact on account of merger (refer (F) below) (6,969) -
Particulars As at As at
Effect of settlement of tax disputes under Vivaad Se Vishwas scheme (refer (G) below) 1,098 -
March 31, 2021 March 31, 2020
Effect of change in tax rate on Goodwill (583) -
Security deposits 193 76 Others (6) 54
Lease liabilities (refer note 38) 43,968 46,025 Total Income tax (reversal) (7,417) (15,223)
Derivative Liabilities 2,798 5,941 Effective tax rate (Excluding effect of changes in tax provisions) 261.62% 33.09%
Effective tax rate (Including effect of changes in tax provisions) 261.62% -155.70%
Advances received from customers (refer note 46) 69,702 108,054
Total 116,661 160,096 (C) Composition of deferred tax (assets) / liabilities:
Deferred tax balance in relation to As at April Recognised Recognised Recognised As at March
01, 2020 through in other in Equity 31, 2021
profit and comprehensive
loss income
Difference in Property, plant and equipment 87,949 (6,088) - - 81,861
and intangibles
Carried forward unabsorbed depreciation (17,900) 2,058 - - (15,842)
Carried forward Business Loss (446) (135) - - (581)
Effect of mark to market accounting (623) (5,522) 4,209 - (1,936)
Lease Accounting - Finance Lease (10,743) (533) - - (11,276)
Inventory- Provision for NRV (2,976) 2,976 - - -
Others (522) (176) - - (698)
Total 54,739 (7,420) 4,209 - 51,528

176 177
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Deferred tax balance in relation to As at Recognised Recognised Recognised As at March 22 Short term borrowings
March 31, through in other in Equity 31, 2020 (` in million)
2019 profit and comprehensive (on initial
Particulars As at As at
loss income adoption of
March 31, 2021 March 31, 2020
Ind AS 116)
Difference in Property, plant and equipment 110,562 (22,613) - - 87,949 Secured Borrowings
and intangibles Bank overdraft 10 -
Carried forward unabsorbed depreciation (25,397) 7,497 - - (17,900) Working capital demand loans from banks 7,273 4,250
Carried forward Business Loss (512) 66 - - (446) Short term loans from banks 6,495 -
Effect of mark to market accounting (219) 6,691 (7,095) - (623) Buyers' credits @ 9,548 4,523
Lease Accounting - Finance Lease - (8,885) - (1,858) (10,743)
Total 23,326 8,773
Inventory- Provision for NRV - (2,976) - - (2,976)
Others (603) 81 - - (522) Security for short term borrowing:
Total (A) 83,831 (20,139) (7,095) (1,858) 54,739
(` in million)
MAT credit entitlement (Total B) (3,125) 3,125 - - -
Particulars As at As at
Total (A+B) 80,706 (17,014) (7,095) (1,858) 54,739 March 31, 2021 March 31, 2020
(D) The Group has not recognised deferred tax assets of ` 5,707 million (Previous year ` 5,707 million) on carried forward short
a) Bank overdraft / cash credit from bank is secured by fixed deposits maintained with
term capital losses in the absence of a reasonable certainty towards their utilisation. These losses can be carried forward up a bank and carries interest rate of 1% over fixed deposits rate and is repayable on 10 0
to March 31, 2026. Further, the Group has not recognised deferred tax assets of ` 840 million (Previous year ` Nil) on carried demand.
forward long term capital losses (pursuant to VOTL merger) in the absence of reasonable certainty towards their utilisation. b) Working Capital Demand loan from bank is secured by first charge on all current
These losses can be carried forward up to March 31, 2029. assets both present and future including all receivables ranking pari passu basis
Further, the Group has not recognised deferred tax assets of ` 290 million (Previous year ` 98 million) on account of disallowance among lenders, second charge on fixed assets both present and future (except land
parcels and fixed assets of power, port and township divisions on pari passu with 7,273 4,250
of interest expenditure made by the Group under Section 94B of Income Tax Act, 1961 in the absence of reasonable certainty
other lenders. These loans carries fixed interest rate of 7.15% p.a to 7.25% p.a and 3
towards its future claim. This interest expenditure for the year ended March 31, 2021 can be carried forward up to March
months marginal cost of funds based lending rate (MCLR) i.e 7.30% p.a. These loans
31, 2029 (Previous year’s up to March 31, 2028).
are repayable on demand.
(E) The Group had opted for lower corporate tax rate of 25.17% as provided under section 115BAA of the Income-tax Act, 1961 c) Short Term Loan from bank is secured by first charge on entire current assets of the
as introduced by the Taxation Laws (Amendment) Act, 2019 and accordingly has calculated its tax charge. Further, the Group Company (existing and future) on a pari passu basis among lenders; second charge on
has also re-measured its deferred tax liabilities as at April 1, 2019 on the revised rates and a credit of ` 18,458 million was fixed assets both present and future (except land parcels and fixed assets of power,
6,495 -
accounted for on such re-measurement in previous year. port and township divisions) on a pari passu with other lender,. The loan carries an
interest rate of 6 months marginal cost of funds based lending rate (MCLR) plus
(F) Consequent to the merger of VOTL, as described in note 42, the carrying value of Property, Plant and Equipment (PPE) and spread of 1.25% p.a and is repayable within 9 months of being drawn.
Goodwill under the tax laws have changed leading to a one-time deferred tax credit of ` 6,969 million getting recognised d) Buyers' credits is Secured by first charge on entire current assets of the Company
during the year ended March 31, 2021 in the statement of profit and loss. (existing and future) on a pari passu basis among lenders, second charge on fixed
(G) During the current financial year, the Group has opted for settlement of eligible Income-tax disputes through Vivad se assets both present and future (except land parcel and fixed assets of power, port and
9,548 4,523
township divisions) on a pari passu with other lenders, The loan carries an interest
Vishwas Scheme, 2020 introduced by the Government of India. Accordingly, during the year, deferred tax asset of ` 1,098
rate which is determined and fixed on date of availing of the loan which is presently at
million has been reversed as a result of the same. Further, based on tax advice obtained, the Group is entitled to claim certain
1.35% p.a to 3.09% p.a and are repayable within 60 days of being drawn.
expenditures (which are in the nature of timing difference) settled under this scheme in its future tax returns / assessments
Total 23,326 8,773
and continues to recognise deferred tax assets of ` 2,649 million on the same.
@ refer note 41(C)(ii) for borrowings outstanding in foreign currencies.
21 Other non-current liabilities
(` in million)
Particulars As at As at
March 31, 2021 March 31, 2020
Advances received from customers 12,296 22,885
Total 12,296 22,885

178 179
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

23 Trade Payables 27 Revenue from operations

(` in million) (` in million)
Particulars As at As at Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Trade Payables (refer note 46) 117,559 96,416 Revenue from sale of products #
Total 117,559 96,416 Sale of manufactured products 727,016 866,696

(a) Trade payables includes suppliers’ credit of ` 13,428 million (Previous year ` 25,352 million). Sale of traded goods 146,264 129,202
Other operating revenues {refer note 37(A)}* 1,726 2,785
(b) Trade payables are non-interest bearing and are normally settled within 0-90 days.
Total 875,006 998,683

24 Other financial liabilities - Current # Comprises of revenue from contracts with customers of ` 848,090 million (Previous year ` 980,384 million) recognised at a point
in time and ` 25,190 million pertaining to hedging gain (Previous year ` 15,514 million pertaining to hedging gain) related to sales
(` in million)
which are recycled from the cash flow hedge reserve when the underlying sales contract is executed and concluded.
Particulars As at As at
March 31, 2021 March 31, 2020 * Includes duty drawback income of ` 614 million (Previous year ` 1,024 million) and export obligation fulfilment income of ` 109
Current maturities of long term debt (refer note 18) 33,294 7,910 million (Previous year ` 305 million).
Interest accrued but not due on borrowings 1,729 2,425
Capital creditors 1,258 846
Disaggregated revenue information
Security deposits 301 232 Set out below is the disaggregation of the Group’s revenue from contracts with customers. The management believes that such
Lease liabilities (refer note 38) 2,138 1,317 disaggregation better depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic
Unclaimed debenture interest and principal (secured) # 10 10 factors.
Advances received from customers (refer note 46) 62,820 73,721 (` in million)

Derivative Liabilities 1,929 9,426 Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Other liabilities 3,248 1,853
Total 106,727 97,740 Export sales 194,961 353,551
Domestic Oil marketing companies 186,981 215,630
# There is no amount due and outstanding to be credited to Investor Education and Protection Fund as at balance sheet date.
Retail Outlets 425,716 377,019
Others 40,432 34,184
25 Other Current liabilities
Total revenue from contracts with customers 848,090 980,384
(` in million)
Particulars As at As at
(` in million)
March 31, 2021 March 31, 2020
Contract balances As at As at As at
Statutory dues 14,383 8,325 March 31, 2021 March 31, 2020 March 31, 2019
Advances received from customers 42,638 17,649 Trade receivables * 19,679 12,703 36,891
Export Obligation* 16 60 Contract liabilities 187,456 222,309 175,925
Total 57,037 26,034
* Trade receivables are non-interest bearing and are generally on terms of 0 to 45 days. As on March 31, 2021, ` 11 million (Previous
* In respect of unfulfilled export obligation of ` 28,931 million (Previous year ` 63,413 million). year ` 8 million) has been recognised towards provision for expected credit losses on trade receivables.

Contract assets are initially recognised for revenue earned from sale of the petroleum products when receipt of consideration is
26 Provisions (Current)
conditional on successful completion of billing shipment. Upon completion of billing milestone, the amounts recognised as contract
(` in million)
assets are reclassified to trade receivables.
Particulars As at As at
March 31, 2021 March 31, 2020 Contract liabilities include long-term / short-term advances received to deliver petroleum products.
Provision for employee benefits (` in million)
Compensated absences 512 417 Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020
Gratuity (refer note 45) 449 386
Total 961 803 Revenue recognised out of contract liabilities outstanding at the beginning of the year 92,827 72,608

Changes in contract liabilities are mainly due to revenue being recognised against the same, receipt of new advances and foreign
exchange fluctuations.

180 181
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Reconciliation of the amount of revenue from contract with customers with the contracted price 30 Employee benefits expense*
(` in million) (` in million)
Particulars For the year ended For the year ended Particulars For the year ended For the year ended
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020

Revenue as per contracted price 851,414 983,036 Salaries, wages and bonus 5,962 6,224
Contribution to provident and other funds (refer note 45) 418 440
Adjustments
Staff welfare expenses 322 317
Discount and incentives (3,324) (2,652)
Total 6,702 6,981
Revenue from contract with customers 848,090 980,384
* net of ` 302 million (Previous year ` 264 million) petrochemical division related expense capitalised (refer note 6).
Performance obligation
* net of ` 125 million (Previous year ` NIL) capitalised during turnaround (refer note 6).
The performance obligation is satisfied upon delivery of the goods and services made as per the terms agreed with customers and
payment is generally due within 0 to 30 days from delivery except in case of adjustment against export advances. Pricing of sales 31 Finance costs
made under these export advances is based on market index at the time of supply. Hence it reflects fair value. (` in million)
Particulars For the year ended For the year ended
28 Other income March 31, 2021 March 31, 2020
(` in million)
Interest
Particulars For the year ended For the year ended
a) On debentures 2,334 2,285
March 31, 2021 March 31, 2020
b) On term loans 5,884 7,639
Interest income c) Interest expenses on lease liabilities (refer note 38) 3,388 3,186
- Bank deposits (carried at amortised cost) 1,110 1,676 d) On others 5,838 8,996
- Other financial assets (carried at amortised cost) {refer note 37} 1,394 114 Exchange differences regarded as an adjustment to borrowing costs - 303
- Interest on income tax refund 408 39 Derivative instruments-carried at FVTPL - 584
2,912 1,829 Other finance charges 3,524 4,503
Other non-operating income 1,983 1,011 Total 20,968 27,496
Trade payable written back 851 -
Other gains (net) 32 Other expenses*
- Net gain on derivative instruments- carried at FVTPL 4,904 3,752 (` in million)
- Net gain on investments carried at FVTPL - 224 Particulars For the year ended For the year ended
Total 10,650 6,816 March 31, 2021 March 31, 2020
Consumption of chemical, catalyst, stores and spare parts 2,437 3,882
29 Changes in inventories of finished goods, work-in-progress and stock-in-trade Product and Intermediate material storage charges 528 580
(` in million) Consumption of power, fuel and electricity [excludes fuel consumed out of own
8,346 9,626
Particulars For the year ended For the year ended production ` 12,187 million (Previous year ` 16,996 million)]
March 31, 2021 March 31, 2020 Freight and Forwarding Charges 11,241 12,160
Rent, rates and taxes 3,699 3,040
Opening inventories:
Insurance 1,269 1,112
- Finished goods 13,540 14,472
Legal and professional fees 2,451 3,484
- Work-in-progress 17,149 18,737
Repairs and maintenance 1,865 1,828
(A) 30,689 33,209 Debit balance / doubtful debts written off net of provision 21 344
Closing inventories: Director's Remuneration 40 -
- Finished goods 19,052 13,540 Loss on disposal / discard of property, plant and equipment (net) 84 3
- Work-in-progress 20,423 17,149 Exchange differences (net) 641 4,572
(B) 39,475 30,689 Expected credit loss (net) [refer note 41(C)(v)] 109 533
Sundry expenses 2,170 3,994
Non-cash inventory holding loss (part of exceptional Item ,
(C) - 6,336 Total 34,901 45,158
refer note 33)
Net (Increase) in Inventory Total (A)-(B)-(C) ) (8,786) (3,816) Note:
* Net of ` 765 million (Previous year ` 1,545 million) petrochemical division related expense capitalised (refer note 6).
* Net of ` 3,452 million (Previous year ` 324 million) capitalised during refinery turnaround (refer note 6).

182 183
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

33 Exceptional items (` in million)

(` in million) Particulars As at As at
Particulars Year ended Year ended March 31, 2021 March 31, 2020
March 31, 2021 March 31, 2020 (v) The Reserve Bank of India (RBI) levied a penalty on the Company for delay in 2,412 2,412
the allotment of equity against advances for Global Depositary Shares (GDS).
A Non cash inventory holding loss on closing inventories due to fall in oil prices* - 11,822
The Company contested the penalty and appealed to the RBI Governor which
B Non-cash commodity derivative gains to hedge price risk - not designated as hedge - (7,278) was rejected. The Company has challenged the same before the Bombay High
Total - 4,544 Court through a writ petition. In the meanwhile, the Enforcement Directorate
initiated and closed an investigation in the matter and the order is awaited.
* Non cash inventory holding loss include ` Nil (Previous year: ` 5,486 million) on raw materials and ` Nil (Previous year:` 6,336
The management is of the opinion that it should get relief and at most be liable
million) on finished goods/Work-in-progress inventory. for a sum of ` 49 million only (Previous year `49 million) for which necessary
provision has been made in these financial statements.
34 Earnings per share
Third party claims where the possibility of outflow of resources embodying economic benefits is remote, and includes show cause
The following table reflects the profit and data on equity shares used in the basic and diluted EPS computations:
notices which have not yet converted to regulatory demands, have not been disclosed as contingent liabilities. 
Particulars Year ended Year ended
March 31, 2021 March 31, 2020 36 Capital and other commitments
Profit attributable to ordinary equity holders of the parent for basic & (` in million)
(A) 4,582 24,764
diluted earnings (` in million) Particulars As at As at
Weighted average number of ordinary shares for basic and diluted EPS (B) 1,490,561,155 1,490,561,155 March 31, 2021 March 31, 2020
Nominal value of ordinary shares (`) 10/- 10/- (A) Capital commitments :
Basic and Diluted earnings per share (`) (A/B) 3.07 16.61 Estimated amount of contracts remaining to be executed on capital account and not
41,994 6,132
provided for (net of advances)
35 Contingent liabilities (B)
Other commitments
(` in million)
(i) The Company has entered into an arrangement for standby bareboat charter with Essar Shipping (Cyprus) Limited
Particulars As at As at (ESCL) for 3 ships at an average rate of USD 8,300 per day per ship for up to a period of 8 years ending on September
March 31, 2021 March 31, 2020
29, 2023. This bareboat charter gets implemented only if ESCL defaults in its payment with its lenders and the effective
(A) Claims against the Group not acknowledged as debts
time notices are served on the Company. However, ESCL has agreed to indemnify the Company against all losses, in the
(i) Claims filed by creditors of an erstwhile subsidiary (Essar Oil & Gas Exploration & 425 402
Production Limited). The Group reserves its right to claim the entire amount back event of the bareboat charters becoming effective. In September, 2020, ESCL notified the Company that some of its dues
from the said entity. to the lenders are overdue and that it is holding discussions for having the payment terms restructured. In view of the
(ii) Pursuant to a take or pay arrangement (arising out of assignment of a contract 19,423 17,763 availability of the option with the Company to utilise the ships and considering the outstanding dues to be discharged by
for specified periods) for supply of Natural gas, a claim has been raised on the ESCL are not significant, no material adjustment is expected to these financial statements even if the lenders were to ask
Company by the supplier, after adjusting an amount of ` 1,860 million realised the Company to implement the bareboat charter.
by invoking the Bank Guarantee provided by the Company which has since been
reimbursed by the assignor, as on March 31, 2021. The Company has disputed (ii) The Group has an obligation arising out of the regulatory guidelines to operate retail fuel outlets in India to setup retail
the entire claim and the matter is currently under arbitration. The Company on fuel outlets in remote service areas. The extent of the remote service areas is directly related to the outlets the Group
the basis of legal advice does not expect any material liability to devolve on the has in the network. The Group has 236 number of retail outlets to be setup as on the balance sheet date and discussion
Company. with the Ministry of Petroleum & Natural Gas is in progress on the Group's plan for fulfilling the obligation and seeking
(iii) Other claims against the Group 3,181 3,058 support in terms of time period of implementation and supply security of products in the remote service areas. In line
with directions of the Ministry of Petroleum & Natural Gas, the Group has issued Bank Guarantee amounting to ` 7,470
(B) Other money for which the Group is contingently liable
million (Previous year ` 7,470 million) in respect of obligation towards remote area retail outlets.
(i) In respect of income tax demands on various issues 284 270
(ii) In respect of Sales tax / VAT on sale of SKO and LPG to Oil marketing companies 50,049 42,311 37 (A) Revenue from operations include ` 328 million (Previous period: ` 669 million) towards duty drawback on National
which were ultimately sold through Public Distribution system {includes likely Calamity Contingent Duty (NCCD) paid on imported crude which was recognised based on a favourable order passed
reimbursement of ` 38,051 million (as at March 31, 2020 ` 33,758 million)} by the Hon’ble Gujarat High Court. The Department in its notification dated May 12, 2020 fixed the brand rate on duty
(iii) Other demands of Sales tax /VAT 841 856 drawback of NCCD, and eventually commenced the process of assessing the refund applications filed by the Group. During
(iv) In respect of custom duty / excise duty / service tax mainly relating to 6,957 6,915 the financial year 2020-21, the Group received a refund of ` 564 million for the NCCD duty drawback related to the direct
classification of products sold, allowability of cenvat credit
imports. The Department has allowed the Group to claim NCCD duty drawback refund on indigenous crude oil which is
procured from a domestic supplier on provision of additional documentation in support of such refund applications, and
the Group has filed an appeal with the appellate authority for dispensing with the documentation requirements as the
management believes that the same are not required to be furnished. Accordingly, the Group has considered the total

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ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

receivables of ` 4,221 million (as at March 31, 2020: ` 4,455 million) as good of recovery and classified as current. The (` in million)
Group has also recognised interest income on the NCCD duty drawback amounting to ` 1,285 million, based on merits of Particulars As at March 31, 2020
the case supported by a legal opinion, during the financial year ended March 31, 2021. Right of use Lease liabilities Charged to Impact on
assets Profit & loss statement of
(B) The Hon'ble Supreme Court of India in July 2015 had ordered a customer to pay ` 1,821 million (including interest of
Account Cash flows
`1,387 million). Basis this order the Group has a recognised receivable of ` 990 million (As at March 31, 2020 ` 912 Long Term Leases
million) from the customer. The Group has assessed the recoverability of both the above balances as highly probable and
As at April 01, 2019 36,783 41,795 - -
hence has considered them as good of recovery. Additions 4,165 4,165 - -
Deletion/discarded/Retirement (102) (123) (21) -
38 Leases Remeasurement on account of change in term of (179) (179) - -
agreement
Group as a lessee
Depreciation expense (2,427) - 2,427 -
The Group has lease contracts for various items of land, plant & machinery, building, vehicles and other equipment used in its
Interest accruals - 3,186 3,186 -
operations. Leases of plant and machinery generally have lease terms between 5 and 10 years, leases of land generally have Unrealised foreign exchange loss - 2,709 - -
lease terms between 20 and 30 years, while building and other equipment generally have lease terms between 5 and 20 years. Payments - (4,026) - -
The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted Others - (185) - -
from assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios and As at March 31, 2020 38,240 47,342 5,592 -
some lease contracts include extension , termination options and variable lease payments.
Current lease liabilities (refer note 24) - 1,317 - -
The Group also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low
value.The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. Non-current lease liabilities (refer note 19) - 46,025 - -
Cash flow - Lease payments
(` in million)
- Towards Principal - - - (840)
Particulars As at March 31, 2021 - Towards Interest - - - (3,186)
Right of use Lease liabilities Charged to Impact on Total - - - (4,026)
assets Profit & loss statement of
Account Cash flows Other Leases (included in other expenses)
Long Term Leases Short term leases - - 296 -
As at April 01, 2020 38,240 47,342 - - Low value leases - - 29 -
Additions 2,965 2,965 - - Variable leases - - 19 -
Total - - 344 -
Deletion/discarded/Retirement (36) (44) (8) -
Remeasurement on account of change in term of (1,332) (1,332) -
As at March 31, 2020 38,240 47,342 5,936 (4,026)
agreement
Depreciation expense (3,330) - 3,330 -
Interest accruals - 3,388 3,388 -
39 Segment information
Unrealised foreign exchange gain - (894) - - Identification of Segments:
Payments - (5,319) - - The Group’s operating segments are established on the basis of those components of the Group that are evaluated
As at March 31, 2021 36,507 46,106 6,710 - regularly by the Management Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 Operating
Segments), in deciding how to allocate resources and in assessing performance. These have been identified taking into
Current lease liabilities (refer note 24) - 2,138 - -
account nature of products and services, the differing risks and returns and the internal business reporting systems.
Non-current lease liabilities (refer note 19) - 43,968 - -
According to the management, the Group with all its subsidiaries are engaged in the single business of refining of crude oil
and marketing of petroleum products in domestic and overseas market (refining business). The management believes that
Cash flow - Lease payments
- Towards Principal - - - (2,173) activities such as operation of crude oil terminal, power plant and construction & leasing of township, etc., are supporting the
- Towards Interest - - - (3,146) refining business. Hence, the management views operations of the entire Group as one activity for measuring performance.
Total - - - (5,319) Basis this, the management has decided that the entire Group is a single segment entity.

Information about major customers:

Other Leases (included in other expenses)
One customer in the Refining and Marketing segment contributed revenues (including excise duty) aggregating to ` 107,694
Short term leases - - 60 -
Low value leases - - 191 -
million, (for the year ended March 31, 2020 : Two customers in the Refining and Marketing segment contributed revenues
Variable leases - - 70 - aggregating to ` 221,543 million).
Total - - 321 - No other customer contributed 10% or more, to the total revenue for both the year ended March 31, 2021 and March 31,
As at March 31, 2021 36,507 46,106 7,031 (5,319)
2020.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Information about product and services (` in million)

The Group sells only petroleum products hence product wise disclosure is not applicable. Particulars As at As at
Geographical Information: March 31, 2021 March 31, 2020
(` in million) Less : Cash and cash equivalents (refer note 12) (33,191) (30,020)
Revenue from operations Year ended Year ended Less : Bank balances (refer note 13) (8,511) (11,056)
March 31, 2021 March 31, 2020 Total cash and bank balances (41,702) (41,076)
Within India 680,045 645,132 Net debt (a) 272,728 316,996

Outside India: Equity share capital (refer note 16) 15,072 15,072
Other equity (refer note 17) 191,505 174,209
Singapore 35,897 42,421
Non-controlling Interests (refer note 42) - 2,868
Mozambique 21,537 51,749
Total equity 206,577 192,149
UAE 24,302 59,919
Equity and underlying net debt (b) 479,305 509,145
South Africa 21,501 15,739
Gearing ratio (a/b) 56.90% 62.26%
Other Countries 91,724 183,723

The revenue information above is based on the locations of the customers. 41 Financial Instruments
(` in million) A) Categories of financial instruments :
Given below is the category wise carrying amount of Group's financial instruments:
Non current assets (excluding financial assets and non current tax assets) As at As at
March 31, 2021 March 31, 2020 As at March 31, 2021:
Within India 588,466 598,003 (` in million)
Outside India - - Particulars Fair value Fair value Amortised Total Total fair
through profit through OCI - Cost Carrying value
40 Capital Management or loss designated as value
cash flow hedge
The primary objective of the Group’s capital management is to maximise the shareholder value while safeguarding its ability
Financial Assets
to continue as a going concern.
Trade receivables* 9,933 - 9,746 19,679 19,679
For the purpose of the Group’s capital management, capital includes issued capital, securities premium and all other equity re- Cash and cash equivalent* - - 33,191 33,191 33,191
serves attributable to the equity holders of the parent and non-controlling interests. The Net Debt comprises all long term and Bank balances other than cash and - - 8,511 8,511 8,511
short term borrowings as well as export advances having original maturities for more than 1 year less cash and bank balances. cash equivalent*
Bank loans availed by the Group are subject to certain financial covenants based on information presented in standalone fi- Derivatives 147 4,765 - 4,912 4,912
nancial statements of the Company and the Company is compliant with these financial covenants on the reporting date as per Other financial assets* - - 8,366 8,366 8,366
the terms of the loan agreements. There is no outstanding default on the repayment of loans (including interest thereon) as at Total 10,080 4,765 59,814 74,659 74,659
March 31, 2021. Financial Liabilities
The Group monitors its capital using gearing ratio, which is net debt divided to equity and underlying net debt. Long-term borrowings#* - 5,263 100,590 105,853 105,313
Short-term borrowings* - 9,548 13,778 23,326 23,326
The amounts managed as capital by the Group for the reporting periods under review and gearing ratio are summarized as Trade payables* - 65,565 51,994 117,559 117,559
follows: Derivatives 103 4,624 - 4,727 4,727
(` in million) Lease liability - 31,270 14,836 46,106 46,106
Particulars As at As at Other financial liabilities* - 132,522 6,739 139,261 139,261
March 31, 2021 March 31, 2020
Total 103 248,792 187,937 436,832 436,292
Long term borrowings (refer note 18) 72,559 98,800
Short term borrowings (refer note 22) 23,326 8,773
Upfront fees 848 1,237
Current maturity of long term borrowing (refer note 24) 33,294 7,910
Lease liabilities (refer note 19 and 24) 46,106 47,342
Export advances having original maturities for more than 1 year (current and non- 138,297 194,010
current portion) (refer note 19 and 24)
Total debt 314,430 358,072

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

As at March 31, 2020 : B) Level-wise disclosure of fair value for financial instruments requiring fair value measurement/ disclosure:
(` in million)
(` in million)
Particulars Fair value Fair value Amortised Total Total fair
through profit through OCI - Cost Carrying value Particulars As at As at Level Valuation techniques and key inputs
or loss designated as value March 31, 2021 March 31, 2020
cash flow hedge Investment in mutual funds - - I Net asset value declared by mutual fund
Financial Assets Trade receivables 9,933 5,422 II Discounted cashflow - future cashflows are based
Trade receivables* 5,422 - 7,281 12,703 12,703 on the terms of trade receivables. Cashflows are
Cash and cash equivalent* - - 30,020 30,020 30,020 discounted at the current market rate reflecting
current market risks.
Bank balances other than cash and - - 11,056 11,056 11,056
cash equivalent* Foreign currency forward 147 174 II Interest rate swaps, foreign exchange forward
exchange contracts-Assets / option contracts and commodity forward
Derivatives 437 12,612 - 13,049 13,049
Foreign currency forward 70 16 II contracts are valued using valuation techniques,
Other financial assets* - - 20,292 20,292 20,292 which employs the use of market observable
exchange contracts-Liabilities
Total 5,859 12,612 68,649 87,120 87,120 inputs. The most frequently applied valuation
Foreign currency option - 263 II techniques include forward pricing and swap
Financial Liabilities
contracts-Assets models, using present value calculations. The
Long-term borrowings#* - 5,609 101,101 106,710 106,214
Foreign currency option 33 - II models incorporate various inputs including
Short-term borrowings* - - 8,773 8,773 8,773 the credit quality of counterparties, foreign
contracts-Liabilities
Trade payables* - 30,559 65,857 96,416 96,416 exchange spot and forward rates, yield curves of
Commodity Derivative Contracts 4,107 11,764 II
Derivatives 456 14,911 - 15,367 15,367 the respective currencies, currency basis spreads
-Assets
Lease liability - 33,081 14,261 47,342 47,342 between the respective currencies, interest rate
Commodity Derivative Contracts 1,557 10,118 II curves and forward rate curves of the underlying
Other financial liabilities* - 181,775 5,442 187,217 187,217 -Liabilities commodity.
Total 456 265,935 195,434 461,825 461,329 Currency swap contracts -Assets 658 848 II
# including current maturities of long-term borrowings. Currency swap contracts 2,675 4,611 II
* The management assessed that the fair value of these financial assets and liabilities approximate their carrying amounts -Liabilities
due to the short term maturities of these instruments. For fair value of long term borrowings, refer below level wise Interest rate swap contracts 392 622 II
disclosure. -Liabilities
Advance received from export 132,522 181,775 II Long-term advances are evaluated based on
customers* parameters such as interest rates, specific country
risk factors, credit risk and other relevant risk
characteristics of the advance. The fair value
is determined using the discounted cash flow
method. The future cash flows are based on terms
of the advance. These cash flows are discounted
at a rate that reflects current market rate and the
current market risk. Also, being foreign currency,
amounts are restated at the closing rate.
Trade Payables 89,104 30,559 II Trade payables are evaluated based on parameters
such as specific country risk factors, credit risk and
other relevant risk characteristics of the payables.
The fair value is determined using the discounted
cash flow method. The future cash flows are based
on terms of the trade payable. These cash flows
are discounted at a rate that reflects current
market rate and the current market risk. Also,
being foreign currency, amounts are restated at
the closing rate.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(` in million) The Group operates a risk management desk that uses hedging instruments to seek to reduce the impact of market
Particulars As at As at Level Valuation techniques and key inputs volatility in crude oil and product prices on the Group’s profitability. The Group’s risk management desk uses a range of
March 31, 2021 March 31, 2020 conventional oil price-related financial and commodity derivative instruments such as futures, swaps and options that
are available in the commodity derivative markets. (The derivative instruments used for hedging purposes typically do
Long term borrowings (including 105,313 106,214 II Long-term fixed-rate and variable-rate
current maturities) borrowings are evaluated by the Group not expose the Group to market risk because the change in their market value is usually offset by an equal and opposite
based on parameters such as interest rates, change in the market value of the underlying asset, liability or transaction being hedged). The Group’s open positions in
specific country risk factors, credit risk and commodity derivative instruments are monitored and managed on a daily basis to ensure compliance with its stated risk
the risk characteristics of the financed project. management policy which has been approved by the management.
The fair value is determined using the discounted
cash flow method. The future cash flows are based Category wise break-up of commodity derivative contracts entered into by the Group and outstanding as at balance
on terms of the borrowing. These cash flows are sheet date:
discounted at a rate that reflects current market
rate and the current market risk. Particulars Qty. in Barrels ('000) Fair value of assets/(liabilities)
(` in million)
*Physical commodity contracts, when used for trading purposes or readily convertible into cash and designated as at FVTPL for As at As at As at As at
mitigating accounting mismatch, are treated as financial instrument. Unless designated as hedging instruments, such contracts March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
are measured at fair value and associated gains and losses are recognised in the consolidated statement of profit and loss. Designated as cash flow hedges
(C) Financial risk management objectives Crude oil
The Group’s principal financial liabilities, other than derivatives, comprise loans and overdrafts, export advances and trade Buy Positions
payables. The management treats the export advances as financial instruments for risk management purposes. The main Less than 1 year 8,117 8,062 (348) (1,662)
purpose of these financial liabilities is to raise finance for the Group’s operations. The Group has various financial assets such Sell Positions
as trade receivables, cash and short-term deposits which arise directly from its operations. The Group also invests surplus Less than 1 year (83) (65) 11 86
resources in mutual fund or similar instruments.

The Group is subject to fluctuations in commodity prices and currency exchange rates due to nature of its operations. Risks Petroleum products
arising from the Group’s financial instruments are commodity price risk, foreign currency risk, interest rate risk, liquidity risk Buy Positions
and credit risk. The Group enters into derivative transactions, primarily in the nature of commodity derivative contracts, Less than 1 year 59,000 59,375 3,403 (4,837)
forward currency contracts, currency swap contracts, currency options contracts and interest rate swap contracts. The More than 1 year 3,600 40,000 47 (870)
purpose is to manage commodity price risk, currency risks and interest rate risks arising from the Group’s operations. To Sell Positions
mitigate risk, the Group may also designate existing foreign currency financial assets and liabilities as economic hedge against Less than 1 year (5,397) (2,325) (801) 1,649
highly probable sale/ purchases. Total (A) 65,237 105,047 2,312 (5,634)
The Group has a Risk Management Committee established by its Board of Directors overseeing the risk management
framework and developing and monitoring Group's risk management policies. The risk management policies are established Not designated as cash flow hedges
to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identification and mapping controls Crude oil
against this risk, monitor the risk and their limits, improve risk awareness and transparency. Risk management policies Sell Positions
and systems are reviewed regularly to reflect changes in the market conditions and Group's activities to provide reliable Less than 1 year - (353) - 127
information to the management and the Board to evaluate the adequacy of the risk management framework in relation to
the risk faced by the Group. The Board of Directors reviews and agrees policies for managing each of these risks which are Petroleum products
summarised below: Buy Positions
i) Commodity price risk Less than 1 year 5,400 2,300 237 (118)
The prices of refined petroleum products and crude oil are linked to the international prices. The Group’s revenues, cost More than 1 year - 6,000 - (108)
and inventories are exposed to the risk of fluctuation in prices of crude oil and petroleum products in the international Sell Positions
markets. From time to time, the Group uses commodity derivative instruments to hedge the price risk of forecasted Less than 1 year - (12,190) - 7,378
transactions such as forecast crude oil purchases and refined product sales. These derivative instruments are considered Total (B) 5,400 (4,243) 237 7,279
economic hedges for which changes in their fair value are recorded in the statement of Profit and Loss. However, in Total (A + B) 70,637 100,804 2,549 1,645
cases where the Group designates these derivative instruments as cash flow hedge, the effective portion of gain / loss
The line items in the balance sheet that include the above hedging instruments are other financial assets and other
on derivative is recognised in other comprehensive income and accumulated in equity. The amount is reclassified to
financial liabilities.
statement of profit and loss when the hedged items impacts the statement of profit and loss.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Credit balance in cash flow hedge reserve of ` 2,312 million as at March 31, 2021 (debit balance of ` 5,634 million as at b) Outstanding foreign currency forward exchange and option contracts
March 31, 2020) on commodity derivative (gross of tax) contracts have been recognised in other comprehensive income. The Group has entered into foreign exchange forward and option contracts with the intention of reducing the
The following table details sensitivity to a 5% increase in the price of respective commodity. A positive number below foreign exchange risk of recognised assets and liabilities. These foreign exchange forward and option contracts are
indicates an increase in equity and negative number would be an inverse impact on equity. not designated in hedge relationships and are measured at fair value through profit or loss.

(` in million) Not designated in hedging relationship

Particulars Impact on Equity (net of taxes) Impact on Profit (net of taxes) Particulars Notional amounts Fair value of assets/(liabilities)
As at As at As at As at (in Foreign Currency million) (` in million)
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 As at As at As at As at
Crude oil
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Buy Positions Forward Contracts:
Less than 1 year 16 (87) - - Buy US$
Sell Positions Less than 3 months 810 419 77 158
Less than 1 year (14) (6) - (27)
Options:
Petroleum products Call US$
Buy Positions Less than 3 months 111 111 (33) 262
Less than 1 year 462 (73) 9 (20) Sensitivity to a 5% increase in foreign currency rate is ` 2,532 million (Previous year ` 1,493 million) (net of tax). A
More than 1 year 2 (27) - (4) positive number indicates an increase in profit and negative number would be an inverse impact on profit.
Sell Positions
Less than 1 year (744) (6) - (789) c) The management has designated certain financial liabilities in foreign currency as cash flow hedges against highly
Total (278) (199) 9 (840) probable future forecast sales. Such designation help the Group to reduce/ mitigate foreign exchange risk of related
liabilities and highly probable sales as gain/ loss on restatement of liabilities is recognised in other comprehensive
ii) Foreign currency risk management: income. As at March 31, 2021 the Group has restated such liabilities amounting to ` 244,168 million equal to USD
3,322 million (Previous year ` 251,024 million equal to USD 3,330 million) at closing exchange rate and has taken
The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
the resultant loss to cash flow hedge reserve.
fluctuations arise. Exchange rate exposures are managed as per advice of Risk Management Committee (RMC) within
approved policy parameters. d) Unhedged currency risk position:

a) The carrying amounts of the Group’s monetary assets and liabilities denominated in different currencies are as The foreign currency (FC) exposure of the Group as at balance sheet date that have not been hedged by a derivative
follows: instrument or otherwise are given below:

As at March 31, 2021 : As at March 31, 2021 :

Particulars Assets Liabilities* Currency Assets Liabilities
` in million FC in Million ` in million FC in Million ` in million FC in million ` in million FC in million
USD 32,072 436 353,961 4,815 USD 32,072 436 101,620 1,382
EURO 43 0 5,048 59 EURO 43 0 5,048 59
Other Currencies 3 0 17 0 Other Currencies 3 0 17 0
TOTAL 32,118 359,026 Total 32,118 106,685

As at March 31, 2020 : As at March 31, 2020 :

Particulars Assets Liabilities* Currency Assets Liabilities
` in million FC in Million ` in million FC in Million ` in million FC in million ` in million FC in million
USD 49,030 650 380,369 5,047 USD 49,030 650 120,054 1,593
EURO 66 1 4,868 59 EURO 66 1 4,868 59
Other Currencies 2 0 4 0 Other Currencies 2 0 4 0
TOTAL 49,098 385,241 Total 49,098 124,926
* includes borrowings in foreign currency USD 428 million (` 31,448 million) {(Previous year USD 432 million
(` 32,573 million)}.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

The following table details sensitivity to a 5% increase in foreign currency rates. A positive number below indicates The following table provides a breakdown of the Group’s fixed and floating rate liabilities:
an increase in profit or equity and negative number would be an inverse impact on profit or equity.
(` in million)
(` in million) Particulars As at As at
Particulars Impact on Profit (net of taxes) Impact on Equity (net of taxes) March 31, 2021 March 31, 2020
As at As at As at As at Fixed rate borrowings 31,405 27,306
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Floating rate borrowings 98,623 89,414
Receivable
Lease liabilities (refer note 19 and 24) 46,106 47,342
USD 1,200 1,834 - -
Export advances having original maturities for more than 1 year (current and 138,297 194,010
EURO 2 2 - - non-current portion) (refer note 19 and 24)
Other Currencies 0 0 - - Total 314,431 358,072
Payables Less: Upfront fee (848) (1,237)
USD (3,802) (4,492) (9,136) (9,429)
Total 313,582 356,835
EUR (189) (182) - -
Other Currencies (1) (0) - - If interest rates had been 50 basis points higher / lower and all other variables were held constant, the Group's, profit
for the year ended March 31, 2021 would decrease / increase by ` 887 million (Previous year ` 1,060 million) (net of tax).
e) Currency swap contracts This is mainly attributable to the Group's exposure to interest rates on its variable rate liabilities.
The Group has also entered into currency swap contracts to cover the currency risk on forecasted sales. The
Interest rate swap contracts
following table details the currency swap contracts outstanding at the end of the reporting period:
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest
Designated as cash flow hedges
amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of
Sell US$ Notional amounts Fair value of liabilities changing interest rates on the cash flow exposures on the variable rate loan. The following tables detail the nominal
(in USD million) (` in million) amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period.
As at As at As at As at
Certain interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
designated as cash flow hedges in order to reduce the Group's cash flow exposure resulting from variable interest rates
Less than 1 year 22 20 844 848
on borrowings. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount
1 year to 2 years 65 22 46 609 accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt
2 years to 5 years 279 325 (2,737) (4,433) affect profit or loss.
More than 5 years 14 33 (223) (786)
Designated as cash flow hedges
Total 380 400 (2,070) (3,762)
Outstanding Contracts (Floating to Fixed)
The line items in the balance sheet that include the above hedging instruments are other financial assets and other
financial liabilities. Particulars Notional amounts Fair value of liabilities
(in USD million) (` in million)
Debit balance in cash flow hedge reserve of ` 1,594 million as at March 31, 2021 (debit balance of ` 2,464 million
as at March 31, 2020) (Gross of tax) on currency swap contracts have been recognised in other comprehensive As at As at As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
income.
Less than 1 year 6 6 (59) (63)
Sensitivity to a 5% increase in foreign currency rate is ` 1,148 million (Previous year ` 1,276 million) (net of tax). A
1 year to 2 years 7 6 (42) (59)
positive number indicates a decrease in equity and negative number would be an inverse impact on equity.
2 years to 5 years 11 18 (16) (60)
Total 24 30 (117) (182)
iii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of The line items in the balance sheet that include the above hedging instruments are other financial liabilities.
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to
Debit balance in cash flow hedge reserve of ` 60 million as at March 31, 2021 (debit balance of ` 107 million as at March
the Group’s long-term debt obligations with floating interest rates.
31, 2020) on interest rate swap derivative contracts (gross of tax) has been recognised in other comprehensive income.
The borrowings of the Group are denominated in rupees and US dollars with a mix of floating and fixed interest rate. The
A 50 basis points increase (decrease) in interest rate and all other variables held constant would result in ` 12 million
Group hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The
(Previous year: ` 25 million) (net of tax) increase (decrease) in equity.
Group has exposure to interest rate risk, arising principally on changes in base lending rates and LIBOR rates. Hedging
activities are evaluated regularly to align with interest rate views and define risk appetite, ensuring that the most cost
effective hedging strategies are applied.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

Not designated in hedging relationship v) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
Outstanding Contracts (Floating to Fixed)
the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
Particulars Notional amounts Fair value of liabilities collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
(in USD million) (` in million)
Group's credit risk arises principally from the trade receivables, investments, cash & bank balances and derivatives.
As at As at As at As at
March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Trade receivables:
Less than 1 year 6 29 (191) (206)
Customer credit risk is managed centrally by the Group and is subject to established policy, procedures and control
1 year to 2 years 114 6 (84) (200)
relating to customer credit risk management. Credit quality of a customer is assessed based on extensive credit rating
2 years to 5 years - 113 - (34) and individual credit limits and approved in accordance with the Delegation of Authority.
Total 120 148 (275) (440)
Credit risk on receivables is also mitigated, to some extent, by securing the same against letter of credit and guarantees
A 50 basis points increase (decrease) in interest rate and all other variables held constant would result in ` 46 million of reputed nationalised and private sector banks. Trade receivables consist of a large number of customers spread across
(Previous year: ` 38 million) (net of tax) increase (decrease) in profit. geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly
monitored and appropriate action is taken for collection of overdue trade receivables. The concentration of credit risk is
iv) Liquidity Risk limited due to the fact that the customer base is large and unrelated.
The Group monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity
of their financial investments, committed funding and projected cash flows from operations. The following tables The credit period on sale of goods ranges from 0 to 30 days with or without security. The Group has used a practical
detail the Group's remaining contractual maturity for its derivative and non-derivative financial liabilities with agreed expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The provision
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected
the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision
the extent that interest flows are floating rate, the undiscounted amount is derived from interest rates existing at the end matrix. The history of trade receivables shows a negligible allowance for bad and doubtful debts. Given below is the
of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay. ageing of trade receivables of the Group:
Details of maturity profile are as given below.
Ageing of trade receivables (gross):
(` in million) (` in million)
As at March 31, 2021 : < 1 Year 1 > 5 Years > 5 Years Total Particulars As at As at
March 31, 2021 March 31, 2020
Long term Borrowings including future interest 40,546 55,649 47,422 143,617
Short Term Borrowings including future interest 23,865 - - 23,865 Not due 18,904 11,536
Trade payables 117,549 - - 117,549 0-30 days 773 1,104
Lease Liabilities including future interest 5,404 19,223 57,674 82,301 31-180 days 9 63
Other financial liabilities including future interest on 71,260 72,642 - 143,902 More than 181 days 4 8
export advance Total 19,690 12,711
Derivatives 1,929 2,798 - 4,727
The Group does not have a legal right of offset against any amounts owed by the Group to the counterparties. Trade
Total 260,553 150,312 105,096 515,961
receivables have been given as collateral towards borrowings (refer note 18 and 22). Expected credit losses are provided
(` in million) based on the credit risk of the counterparties (refer note 11).

As at March 31, 2020 : < 1 Year 1 > 5 Years > 5 Years Total
Investments, cash and bank balances and derivatives
Long term Borrowings including future interest 17,237 73,622 66,044 156,903
The Group's treasury function manages the financial risks related to the business. The Treasury function focuses on
Short Term Borrowings including future interest 8,927 - - 8,927
Trade payables 96,416 - - 96,416
Lease Liabilities including future interest 4,688 19,102 63,823 87,613
Other financial liabilities including future interest on 84,251 105,167 11,735 201,153
export advance
Derivatives 9,426 5,941 - 15,367
Total 220,945 203,832 141,602 566,379

The Group has undrawn committed facilities as at March 31, 2021 of ` 57,086 million (` 75,174 million as at March 31,
2020) with maturities ranging from one to two years.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

capital protection, liquidity and yield maximisation. Investment of surplus funds are made in reputed mutual funds and (` in million)
bank deposits. Counterparty credit limits are reviewed and approved by Board/Audit Committee of the Company. These Particulars As at As at
limits are set to minimise the concentration of risks and therefore mitigates the financial loss through counterparty's March 31, 2021 March 31, 2020
potential failure to make payments. Expected credit losses are provided based on the credit risk of the counterparties.
Revenue (Including other income) - 21,596
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with Expenses (including exceptional items) - 7,749
high credit-ratings assigned by international credit rating agencies. Further, commodity derivative contracts are entered Profit for the year - 9,950
only with international over the counterparties having high credit rating and thus the risk of default is minimised.
Profit attributable to owners of the Group - 9,714
Movement in the expected credit loss allowance
Profit attributable to non-controlling interests - 236
(` in million)
Profit for the year - 9,950
Particulars As at As at
March 31, 2021 March 31, 2020
Other comprehensive loss attributable to the owners of the Group - 1
Balance at the beginning of the year 974 441
Other comprehensive loss attributable to non-controlling interests - 0
Expected credit loss recognised (net) 109 533
Other comprehensive loss during the year - 1
Balance at the end of the year 1,083 974

The Group's maximum exposure to the credit risk for the components of the balance sheet as at March 31, 2021 and Total comprehensive income attributable to the owners of the Group - 9,715
March 31, 2020 is the carrying amounts mentioned in note 8, note 11 and note 14.
Total comprehensive income attributable to non-controlling interests - 236
Total comprehensive income during the year - 9,951
42. Non-Controlling Interest (NCI)
NCI relates to 2.37% shares in Previous year held by other shareholders in VOTL. VOTL was engaged in handling and storage
of crude oil and petroleum products. Its principal place of business was in India. Cash flows
Net cash inflow from operating activities - 11,558
The table below shows summarized financial information of VOTL.
Net cash inflow from investing activities - (5,071)
(` in million) Net cash outflow from financing activities - (4,717)
Particulars As at As at Net cash inflow - 1,770
March 31, 2021 March 31, 2020
@ The scheme of amalgamation of Vadinar Oil Terminal Limited ("VOTL") with the Company, was approved by the Hon'ble
Non-current assets - 146,860
National Company Law Tribunal ("NCLT") Ahmedabad bench vide its order dated November 13, 2020. As an integral part of
Current assets - 12,643 the aforesaid Scheme, the non-controlling shareholders of VOTL who were resident in India were issued Non-Convertible
Non-current liabilities - 35,698 debentures (NCDs) having fair value, face value and paid up amount of ` 350/- each bearing coupon rate of 8% per annum for
Current liabilities - 2,980 every 1 fully paid equity share of VOTL and those shareholders who were non-resident in India were to be paid ` 350/- in cash
Net Assets - 120,825 for each 1 fully paid equity share of VOTL.
Equity attributable to owners of the group - 117,957
As a result of above transaction, Non-Controlling Interest (NCI) amounting to ` 2,868 million was settled by issuance of NCDs
Non-controlling interest @ - 2,868 of ` 2,568 million and consideration payable in cash ` 100 million. The differential amount of ` 200 million was transferred to
capital reserve account.

43 Impairment testing of Goodwill

The Group recognised goodwill of ` 1,08,184 million arising on the acquisition of Vadinar Power Company Limited (VPCL),
Nayara Energy Properties Limited (NEPL), and Vadinar Oil Terminal Limited (VOTL),which are now merged with the Company.
The Group has determined that its entire operations fall into single CGU and single operating segment, viz., refining of crude
oil and marketing of petroleum products in domestic and overseas market (refining business). Hence, the entire goodwill is
allocable to the refining business CGU / segment and the carrying value of the CGU as at the balance sheet date is ` 549,071
million (March 31, 2020: ` 557,031 million).

The Group performed its annual impairment test for the financial year ended March 31, 2021 as at year end.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

The recoverable amount of the CGU has been determined at ` 726,888 (US$ 9,889) million [March 31, 2020: ` 635,955 (US$ 2020-21
8,436) million] based on the value in use calculation using discounted cash flow model {refer note 4(B)(iii)} based on business Name of Entity Net assets, i.e., total Share in Share in other Share in total
assumptions approved by management covering a five-year period and is in line with the business plan presented to the Board.
assets minus total profit or loss Comprehensive Comprehensive Income
The Group has considered forecast consensus, industry reports, economic indicators and general business conditions to make
liabilities Income
an assessment of the implications of the COVID-19 pandemic upto the date of approval of these financial statements. The
As % of ` in As % of ` in As % of ` in As % of total ` in
Group has performed sensitivity analysis on the assumptions used basis the internal and external information / indicators of consolidated million consolidated million consolidated million comprehensive million
future economic conditions. Since the value in use is higher than the carrying amount of the refining business CGU, the Group net assets profit or loss other income
has not determined the fair value less costs of disposal separately. comprehensive
income
Key assumptions used for value in use calculations Nayara Energy 0.00% 0 0.00% - 0.00% (0) 0.00% (0)
The calculation of value in use for the unit is most sensitive to the following assumptions: Global Limited
Nayara Energy 0.00% 2 -0.02% (1) -0.01% (1) -0.01% (2)
Gross Refining Margin (GRM) – The GRM projections, which is a difference between total product revenue and total Singapore Pte.
feedstock cost for the year, are broadly in line with the 5 year business plan of the CGU. The GRMs are estimated to be in the Limited
range from US$ 4.7 per bbl to US$ 7.9 per bbl during FY 2021-22 to FY 2025-26 and thereafter they increase at a nominal rate Inter Group 0.00% (6) 0.00% - 0.00% (0) 0.00% (0)
of 2% per annum post the 5 year period. A US$ 0.5 per bbl change in the projected GRM over the forecast period would lead Elimination and
to a change in the recoverable value by ` 41,016 million (US$ 558 million). Consolidation
Adjustments
Discount rates - Discount rates represent the current market assessment of the risks specific to the CGU, taking into Grand Total 100.00% 206,577 100.00% 4,582 100.00% 12,514 100.00% 17,096
consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash
flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its operating segments 2019-20
and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost Name of Entity Net assets, i.e., total Share in Share in other Share in total
of equity is derived from the expected return on investment by the Group. The cost of debt is based on the interest-bearing assets minus total profit or loss Comprehensive Comprehensive Income
borrowings the Group is obliged to service. Segment-specific risk is incorporated by applying individual beta factors. The beta liabilities Income
factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor As % of ` in As % of ` in As % of ` in As % of total ` in
in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. Accordingly, the Group has consolidated million consolidated million consolidated million comprehensive million
net assets profit or loss other income
estimated a discount rate of 10.2%. An increase in the discount rate by 50 basis points leads to decline in the recoverable value
comprehensive
by ` 40,942 million (US$ 557 million). income
Considering the above, the management has assessed that any reasonable possible change in assumptions will not trigger Parent:
recognition of impairment. Nayara Energy 90.41% 173,721 59.40% 14,851 100.00% (21,555) -194.60% (6,704)
Limited
44 Additional information as required under Schedule III to the Companies Act, 2013 of enterprises Subsidiaries:-
Vadinar Oil Terminal 8.75% 16,820 39.80% 9,950 0.00% 1 288.86% 9,951
consolidated as Subsidiaries Limited
2020-21 Coviva Energy -0.10% (187) -0.72% (180) - - -5.23% (180)
Name of Entity Net assets, i.e., total Share in Share in other Share in total Terminals Limited
Nayara Energy 0.00% - 0.00% - 0.00% (0) 0.00% -
assets minus total profit or loss Comprehensive Comprehensive Income
Global Limited
liabilities Income (formerly known as
As % of ` in As % of ` in As % of ` in As % of total ` in Essar Oil Trading
consolidated million consolidated million consolidated million comprehensive million Mauritius Limited)
net assets profit or loss other income Intergroup 0.93% 1,795 1.52% 379 0.00% (1) 10.97% 378
comprehensive Elimination and
income Consolidation
Parent: Adjustments
Nayara Energy 100.13% 206,851 101.81% 4,665 100.01% 12,515 100.49% 17,180 Grand Total 100.00% 192,149 100.00% 25,000 100.00% (21,555) 100.00% 3,445
Limited
Note:
Subsidiaries:-
Indian: "0.00%" represents % less than 0.005%.
Coviva Energy -0.13% (270) -1.79% (82) 0.00% - -0.48% (82)
Terminals Limited

202 203
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

45. Defined benefit plans (` in million)

(1) Defined benefit plans : Sr. Particulars Gratuity (Funded)
i) Gratuity Plan No. As at As at
March 31, 2021 March 31, 2020
In accordance with the Payment of Gratuity Act, 1972, the Group contributes to a defined benefit plan (the “Gratuity
Plan”) for employees who have completed 5 years of service. The Gratuity Plan provides a lump sum payment to vested f Benefits payments (28) (43)
employees at retirement, disability or termination of employment being an amount based on the respective employee’s g Fair value of plan assets at the end of the year 477 467
last drawn salary and the number of years of employment with the Group. The Gratuity plan is a funded plan and the D Actuarial assumptions
Group makes contribution to LIC of India / SBI Life Insurance in India. 1 Discount rate (per annum) 6.50% 6.50%
2 Rate of salary increase 9.00% 9.00%
(` in million) 3 Rate of Withdrawal Rate 6.00% 8.00%
Sr. Particulars Gratuity (Funded) 4 Mortality Indian Assured Lives Mortality
No. As at As at (2006-08) Ult. Modified
March 31, 2021 March 31, 2020 E Percentage of each category of plan assets to total fair value of plan
A Net assets / liability recognised in the balance sheet assets
i Present value of defined benefit obligation 926 853 Administered by Life Insurance Corporation of India / State Bank Of India 100% 100%
ii Fair value of plan assets 477 467 F Employer’s best estimate of contributions expected to be paid to the plan 71 98
during the annual period beginning after the balance sheet date
iii Funded status - deficit (iii = ii-i) (449) (386)
iv Net assets / (liability) recognised in the balance sheet (449) (386) @ Employees were transferred from / to related parties / other body corporates with credit for past services.
- Figures in bracket indicates negative value.
B Expenses recognised in profit and loss for the year Notes : Weighted average duration of the defined benefit obligation is 7 years as at March 31, 2021 (6 years as at March
i Service cost 82 77 31, 2020).
ii Net Interest cost 24 26
These plans typically expose the Group to actuarial risks such as: interest rate risk, salary risk and demographic risk
Components of defined benefit costs recognised in Profit and loss 106 103
1 Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If
i Actuarial losses - experience (50) 46
bond yields fall, the defined benefit obligation will tend to increase.
ii Actuarial losses/(gains) - assumptions 12 (63)
iii Return on plan assets greater than discount rate 2 1 2 Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.
Components of defined benefit costs recognised in Other Comprehensive (36) (14) 3 Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include
Income
mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation
Total expenses 70 89
is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It
C Change in obligation and assets is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career
i Change in defined benefit obligation employee typically costs less per year as compared to a long service employee.
a Defined benefit obligation at beginning of the year 853 781
The defined benefit obligations shall mature after year ended March 31, 2021 as follows:
b Current Service cost 82 77
c Interest cost 53 54 (` in million)
d Acquisition adjustment / Transfer Out @ 3 - Particulars March 31, 2021
e Actuarial losses - experience (50) 46 As at March 31
f Actuarial losses - demographic assumptions 12 25 2022 71
g Actuarial losses/(gains) - financial assumptions - (88) 2023 86
h Benefit payments (28) (43) 2024 96
i Defined Benefit obligation at the end of the year 925 852 2025 107
ii Change in fair value of assets 2026 100
a Fair value of plan assets at the beginning of the year 467 345 March 31, 2027 to March 31, 2031 606
b Acquisition adjustment / Transfer Out@ 5 3
c Interest income on plan assets 29 28
d Contributions made 6 135
e Return on plan assets lesser than discount rate (2) (1)

204 205
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(` in million) 4,352 million (` 3,427 million as at March 31, 2020) as per the actuarial report and the fair value of plan assets is higher
Particulars March 31, 2020 than the same as at each reporting date. Hence, there is no shortfall as at March 31, 2021 and March 31, 2020.
As at March 31 Key assumptions used in determining the present value obligation of the interest rate guarantee are the Government of
2021 98 India (GOI) bond yield 6.50% (March 31, 2020 6.50 %), Remaining term to maturity of portfolio 4 years (March 31, 2020:
2022 89 5 years) and Expected guaranteed interest rate 8.50% (March 31, 2020 8.50%) . The Group contributed ` 202 million and
2023 90 ` 201 million during the years ended March 31, 2021 and March 31, 2020, respectively. The same has been recognized in
2024 100 the Consolidated statement of Profit and Loss under the head employee benefit expense.
2025 118 Each year, the Board of Trustees reviews the level of funding in the provident fund plan. Such a review includes the asset-
March 31, 2026 to March 31, 2030 581 liability matching strategy and investment risk management policy. This includes employing the use of annuities and
Sensitivity Analysis: longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual
review.
Method used for sensitivity analysis:
(2) Defined contribution plans :
The sensitivity results below determine their individual impact on the Plan's end of year Defined Benefit Obligation.
Group's contribution to superannuation fund, provident fund and pension fund aggregating to ` 25 million, ` Nil and ` 104
In reality, the Plan is subject to multiple external experience items which may move the Defined Benefit Obligation in
million (Previous year ` 26 million, ` 6 million and ` 100 million) respectively are recognised in the statement of profit and loss
similar or opposite directions, while the Plan's sensitivity to such changes can vary over time.
as and when the contributions are due. There is no obligation other than the contribution payable to the respective trusts.
Sr. Particulars As at As at
No. March 31, 2021 March 31, 2020 46 Related party disclosures
Increase/(decrease) in DBO I. Names of related parties and description of relationship:
A) Discount Rate :
Enterprises having significant influence Rosneft Group comprises Rosneft Oil Company and its controlled entities
Defined benefit obligation 926 853
Trafigura Group comprises Trafigura Group Pte. Limited and its controlled
Discount rate 6.50% 6.50%
entities
1. Effect on DBO due to 0.5% increase in Discount Rate (36) (30)
UCP Group comprises UCP PE Investments Limited and entities under
2. Effect on DBO due to 0.5% decrease in Discount Rate 39 32
common control
B) Salary Escalation Rate :
Salary Escalation rate 9.00% 9.00% Key management personnel Mr. Charles Anthony Fountain, Executive Chairman
1. Effect on DBO due to 0.5% increase in Salary Escalation Rate 26 22 Mr. Prasad K. Panicker, Director & Head of Refinery (From February 17,
2. Effect on DBO due to 0.5% decrease in Salary Escalation Rate (26) (21) 2020)
C) Withdrawal Rate : Mr. C. Manoharan, Director & Head of Refinery (Up to December 19,
Attrition rate 6.00% 8.00% 2019)
1. Effect on DBO due to 5.00% increase in Withdrawal Rate (27) (21) Mr. Didier Casimiro , Director (Up to February 21, 2020)
2. Effect on DBO due to 5.00% decrease in Withdrawal Rate 45 33 Mr. Alexander Romanov, Director
ii) Provident Fund : Mr. Chin Hwee Tan, Director
Mr. Alexey Karavaykin, Director (Up to January 30, 2020)
Based on actuarial valuation in accordance with Ind AS 19 for interest rate guarantee of exempted provident fund liability
Mr. Jonathan Kollek, Director
of employees, there is no interest shortfall in the funds managed by the trust and hence there is no further liability as at
Mr. Alexander Bogdashin, Director (Up to January 30, 2020)
March 31, 2021 and March 31, 2020. Having regard to the assets of the Fund and the return on the investments, the
Mr. Krzysztof Zielicki Antoni, Director
Group does not expect any deficiency in the foreseeable future.
Ms. Naina Lal Kidwai, Independent Director
Eligible employees of the Group receive benefits from a provident fund, which is a defined benefit plan. Both the eligible Mr. Deepak Kapoor, Independent Director
employee and the Group make monthly contributions to the provident fund plan equal to a specified percentage of the Mr. Alexey Lizunov, Director (From January 30, 2020)
covered employee’s salary. The Group contributes a portion to the Provident Fund Trust. The trust invests in specific Ms. Avril Conroy, Director (From May 23, 2020)
designated instruments as permitted by Indian law. The plan assets have been primarily invested in government securities Ms. Victoria Cunningham, Director (From January 30, 2020)
and high quality corporate bonds. Mr. Alois Virag, Chief Executive Officer (From April 01, 2021)
Mr. B. Anand, Chief Executive Officer (Up to March 31, 2021)
The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government.
The Group has an obligation to make good the shortfall, if any, between the return from the investments of the trust
Other related party Nayara Energy Limited Employees’ Provident Fund (formerly known as
and the notified interest rate. The actuary has provided a valuation for provident fund liabilities using the deterministic
Essar Oil Limited Employees’ Provident Fund) (Controlled Trust)
approach guidance issued by Actuarial Society of India. The present value of benefit obligation as at March 31, 2021 is `

206 207
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

A. Transactions with related parties B. Transactions with other classes of related parties

(` in million) Nature of transactions 2020-21 2019-20

Nature of transactions 2020-21 2019-20 i) Key management personnel (Short term employee benefits)@ 312 267
Advance received from customers @including employer contribution to provident fund and exclusive of provisions for liability in respect of leave earned and gratuity,
Trafigura Group 5,843 29,641 since this is based on actuarial valuation done on an overall basis for all employees.
Total 5,843 29,641 ii) Key management personnel (Director Sitting Fees) 14 11
Export advances novated iii) Key management personnel (Commission and Remuneration to Directors) * 78 37
Trafigura Group% 8,561 18,083
iv) Contribution during the period (includes Employees' share and contribution) to the 531 509
Total 8,561 18,083 controlled trust
Sale of products (refer note (i) below)
Trafigura Group # 59,233 89,627 * The Company has inadequacy of profits under Section 198 of the Companies Act, 2013 (“Act”), as a consequence of which the
Rosneft Group - 105,856
remuneration proposed to be paid to the Independent Directors for FY 2020-21 is in excess of permissible limits of Section 197 of
Total 59,233 195,483
the Act by ` 40 million. In compliance with the amendments introduced, inter-alia, in Section 197 and Schedule V of the Act, which
Purchase of raw material (refer note (i) below)/ Other Consumable
became effective from March 18, 2021, the Company is in the process of seeking approval of the shareholders, by way of Special
Rosneft Group - 127,853
Trafigura Group 17,885 62,760 Resolution at the ensuing Annual General Meeting, for the remuneration proposed to be paid to the Independent Directors.
Total 17,885 190,613
Interest expenses C. Balances with related parties :
Trafigura Group 763 389 (` in million)
Total 763 389 Nature of balances As at As at
Trade payable written back March 31,2021 March 31,2020
Rosneft Group 827 -
Assets
Total 827 -
Financial assets
Interest expenses on lease liabilities
Trade receivables (refer note (iv) A below)
Rosneft Group 0 -
Rosneft Group - -
Total 0 -
Trafigura Group## 4,118 668
Receiving of service
Rosneft Group 0 - Total 4,118 668
Total 0 - Other financial assets
Receiving of freight service Other receivables
Trafigura Group 793 - Rosneft Group - 8
Total 793 - Trafigura Group - 11
Product and raw material consultancy services (refer note (ii) below) Total - 19
Trafigura Group 672 790 Other assets
Rosneft Group 67 704 Prepaid expense
Total 739 1,494 Trafigura Group 363 523
Other consultancy services Total 363 523
United Capital Partners Group** 117 233 Liabilities
Trafigura Group 186 64 Other financial liabilities
Total 303 297 Trade payables (refer note (iii) & (iv) B below)
Rosneft Group 791 24,549
including taxes wherever applicable Trafigura Group 161 371
% During the year ended March 31, 2021, the export advance contracts backed by export performance bank guarantees by a lender worth United Capital Partners Group 94 6
USD 117 million (equivalent to ` 8,561 million) (During the year ended March 31, 2020, the amount was USD 255 million (equivalent to Total 1,046 24,926
` 18,083 million)) obtained by the Company were novated under a tripartite agreement between the Company, the former buyer, and Lease liabilities
Trafigura Group, whereby Trafigura Group has paid the outstanding advances to the former buyer and going forward all the supply against
Rosneft Group 10 -
such advances shall be made to Trafigura Group as per delivery schedule stated in such contracts. The terms and conditions of novated
Total 10 -
contracts remain significantly unchanged.
**including ` 91 million capitalised during year ended March 31, 2021 (for the year ended March 31, 2020 : ` 172 million).
# Includes sales of finished goods of ` 13,032 million (Previous year ` 18,545 million) pursuant to long term arrangements entered between
the Company and a third party and the said third party and Trafigura Pte. Ltd.

208 209
 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) Notes to consolidated financial statements (Contd.)
For the year ended March 31, 2021 For the year ended March 31, 2021

(` in million) 47 Detail of Subsidiaries and Composition of Group

Nature of balances As at As at Following subsidiaries have been considered in the preparation of consolidated financial statements.
March 31,2021 March 31,2020
Sr. Name of Principal activities Relation Country of Proportion of ownership
Other liabilities No. Subsidiaries Incorporation Interest (%)
Trafigura Group - 1,535
As at March As at
Total - 1,535
31, 2021 March 31, 2020
Advance received from customers (refer note (iv) C below)
Trafigura Group 31,151 46,027 1 Vadinar Oil Handling and storage of Subsidiary India NA 97.63%
Total 31,151 46,027 Terminal Limited crude oil and petroleum
(VOTL) (refer products
## Includes receivable of ` 1,561 million (as at March 31, 2020: ` 668 million) for sales of finished goods of pursuant to long term
note a)
arrangements entered between the Company and a third party and the said third party and Trafigura Group.
2 Nayara Energy It is engaged in trading Subsidiary Singapore 100.00% NA
Notes: Singapore Pte. and allied activities in
(i) Rosneft Group and Trafigura Group under their respective contracts with the Group has the right to make the first offer for Limited (refer the oil and commodities
both sale of raw material and purchase of finished products. Where the transaction with the above parties is executed without note b) sector
calling for comparative quotations, the same are done based on the Group’s internal assessment. Where quotations are called 3 Coviva Energy Engaged in development Subsidiary India 100.00% 100.00%
for and the Group is able to get a better offer, these two parties reserve the right to match the offer, in which case the Group Terminals of marine liquid terminal
is obliged to transact with them. For supplies of finished products made against advance payments, premium / discounts to Limited (CETL) facilities
the market price index are pre-negotiated based on similar process. Where the Group participates in the tenders floated by 4 Enneagon It was engaged in the Subsidiary Mauritius NA NA
these parties for purchasing raw material, price to be quoted are determined on a case to case basis based on Group’s internal Limited, buying and selling of
assessment and are approved by the management of the Group. Mauritius (refer petroleum and coal
note c) products.
(ii) Rosneft Group and Trafigura Group have been advising the Group on regular basis and providing insight into the market
dynamics which helps in strategizing the crude procurement and sale of finished products. In consideration for the same, the 5 Nayara Energy It is engaged in Subsidiary Mauritius 100.00% 100.00%
Group is paying a fee of US $ 0.1 for every barrel of raw materials purchased and finished products exported. Global Limited investment holding
(NEGL) (refer activities and trading
(iii) During the year ended March 31, 2021, the Group terminated its aforementioned contract with a Rosneft Group entity.
note d) in commodities. There
Further, the said Rosneft Group entity has unilaterally assigned some of its receivables from the Group under the said contract
have been no
to and in favour of two other Rosneft Group entities, which is subject to regulatory approvals. Subsequent to such assignment,
operations in this
one of the assignees has discontinued to be a related party of the Group, and therefore, the amount payable to such assignee
company till date.
as on the balance sheet date amounting to ` 22,384 million is excluded from the above disclosures.
Notes:
(iv) Terms of receivables / payables:
a) Pursuant to a scheme of arrangement approved on December 14, 2020 Vadinar Oil Terminal Limited have merged with
A. Trade receivables are unsecured, non-interest bearing collected within 30 days from the date of sale.
the Company during the year, as described in note 42.
B. Trade payables are non-interest bearing and are settled within 30 days of purchase. b) Unaudited financial statements have been considered for consolidation.
C. Advance from customers also include interest bearing advances, which are settled through supply of goods over a period c) Enneagon Limited, Mauritius has been dissolved during the financial year 2019-20.
of 1 to 5 years at pre-determined mechanism of the consideration. d) The sole shareholder of Nayara Energy Global Limited (i.e. Nayara Energy Limited) has passed a resolution on April 30
2020 for voluntary liquidation of NEGL, which is in progress, accordingly the Group has not considered books of Nayara
Energy Global Limited in consolidated financials statements.

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 NAYARA ENERGY LIMITED CORPORATE OVERVIEW BOARD’S REPORT FINANCIAL STATEMENTS
ANNUAL REPORT 2020-21

Notes to consolidated financial statements (Contd.) FORM AOC - 1

For the year ended March 31, 2021 (Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)

48 Impact of COVID-19 Statement containing salient features of the financial statements of subsidiaries / associates companies

The outbreak of coronavirus (COVID-19) pandemic globally and in India is having significant impact on the economic activity. Part "A" - Subsidiaries
The Group, being in the business of essential commodity i.e. petroleum products, continued operating even during the
Name of Subsidiaries (` in million) Amt in USD (` in million) Amt in USD (` in million)
lockdown period while adhering to the Government regulations on COVID-19 for safety of workforce. The Group’s total
revenue from operations and gross refinery margins for the period were impacted due to lower demand for the financial year Coviva Energy Nayara Energy Singapore Nayara Energy Global Limited
ended March 31, 2021 as compared to the previous financial year ended March 31, 2020. Terminals Pte. Limited (NEGL)
Limited (CETL) (Refer note below)
The impact assessment of pandemic is a continuing process given the uncertainties associated, the Group has analysed the
Reporting period 31-03-2021 31-03-2021 31-03-2021
impact caused by COVID-19 considering the market conditions and other developments upto the date of approval of these
The date since when subsidiary was 29-6-2017 15-09-2020 11-03-2014
financial statements. Among other matters, impact of reduction in the demand and realization has been factored in evaluating
Incorporated / acquired
the Group’s ability to be a going concern for at least 12 months after the reporting date and impairment of non-financial assets
(refer note 43 for impairment analysis). The Group has considered its expected future cash flows, available lines of credit and Reporting currency and exchange INR USD 1 US$ = USD 1 US$ =
ability to raise short term funds in arriving at the conclusion that it remains a going concern and has also performed additional rate as on the last date of the ` 73.5047 ` 73.5047
sensitivities on some of its key inputs to validate its assumption of going concern. The management believes that COVID-19 relevant financial year in the case of
impact, if any, is short-term and there will be no medium to long-term impact on the Group or its financial position or financial foreign subsidiaries.
performance. Despite the volatile market scenario, the Group’s supply network and the risk management action have resulted Share capital 1 60,000 4 - -
in protecting the Group’s cash flows significantly in the near future. Reserves & surplus (270) (25,683) (2) - -
Basis the above evaluation, the management has concluded that there is no significant impact on the operations or financial Total assets 1,519 206,339 15 - -
position on the Group. However, the impact of the global health pandemic may be different from that estimated at the date of Total liabilities 1,789 172,022 13 - -
approval of these financial statements and the Group will continue to closely monitor any material changes to future economic Investments - - - - -
conditions and assess its impact on the financial position of the Group.
Turnover - - - - -
Profit before taxation (79) (18,842) (1) - -
As per our report of even date For and on behalf of the Board of Directors Provision for taxation 3 - - - -
For S. R. Batliboi & Co. LLP Charles Anthony Fountain Prasad K. Panicker Profit after taxation (82) (18,842) (1) - -
Chartered Accountants Executive Chairman Director Proposed dividend - - - - -
Firm Registration No. 301003E/E300005 DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India % of shareholding 100% 100% 100%
Names of subsidiaries which are yet to commence operations Coviva Energy Terminals Limited,
Nayara Energy Global Limited
per Naman Agarwal Alois Virag Anup Vikal Mayank Bhargava
Partner Chief Executive Officer Chief Financial Officer Company Secretary Nayara Energy Singapore Pte. Limited
Membership No. 502405 Mumbai, India Mumbai, India Thane, India Names of subsidiaries which have been liquidated or Enneagon Limited
New Delhi, July 01, 2021 July 01, 2021 sold during the year (liquidated during the previous year)

Note:
Shareholder of Nayara Energy Global Limited (i.e. Nayara Energy Limited) has passed a resolution on April 30, 2020 for voluntary
liquidation of NEGL, which is under progress.

Charles Anthony Fountain Prasad K. Panicker

Executive Chairman Director
DIN : 07719852 DIN : 06476857
Sussex, United Kingdom Devbhumi Dwarka, India

Alois Virag Anup Vikal Mayank Bhargava

Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, India Mumbai, India Thane, India
July 01, 2021

212 213
 AGM NOTICE
NAYARA ENERGY LIMITED “RESOLVED FURTHER THAT the Board of Directors be of members has been dispensed with. Accordingly, the
and is hereby authorized to do all such acts and take all facility for appointment of proxies by the members will
Registered Office: Khambhalia, Post Box No. 24, Dist.: Devbhumi Dwarka - 361 305, Gujarat, India
such steps as may be necessary, proper or expedient to not be available for the AGM and hence the Proxy Form
Corporate Identity Number: U11100GJ1989PLC032116 give effect to this resolution without being required to and Attendance Slip are not annexed to this Notice.
Phone: 91 2833 661444, Fax: 91 2833 662929 seek any further consent or approval of the members.”
3. In compliance with the MCA circulars, the notice of
Email: investors@nayaraenergy.com 8. Ratification of remuneration payable to the Cost Auditors AGM along with the Annual Report for the financial
Website: www.nayaraenergy.com To consider and if thought fit, to pass the following year 2021, is being sent by providing a weblink through
Resolution as an Ordinary Resolution: electronic mode to all the members who have registered
their email IDs with the depository participants (DP) /
NOTICE is hereby given that Thirty First Annual General Meeting of the members of NAYARA ENERGY LIMITED will be held “RESOLVED THAT pursuant to the provisions of Section Share transfer agent (STA). Members may further note
through Video Conferencing (“VC”) / Other Audio Visual Means (“OAVM”) on Wednesday, September 15, 2021 at 2:30 p.m (IST) 148 and other applicable provisions of the Companies that notice of AGM along with the Annual Report for FY
to transact, the following business: Act, 2013 and the Companies (Audit and Auditors) Rules, 2021 will also be available on the Company’s website
of the Company be and is hereby accorded for payment 2014, M/s. Chandra Wadhwa & Co., Cost Accountants www.nayaraenergy.com and at the website of the
ORDINARY BUSINESS (Firm Registration Number: 000239), appointed as the
of remuneration of USD 2,77,000 to Ms. Naina Lal service provider providing remote e-voting platform i.e.
1. To receive, consider and adopt the audited financial Cost Auditors of the Company by the Board of Directors,
Kidwai, Independent Director of the Company (DIN – www.evoting.nsdl.com for download.
statements of the Company for the financial year ended for the conduct of the audit of the cost records of the
00017806) for financial year 2020-21, in addition to
March 31, 2021 together with the reports of Board of Company for the financial year ending on March 31, 4. Copies of the documents, stated in the notice, will
the sitting fee paid to her for attending the meetings of
Directors and Auditors thereon. 2022, be paid remuneration as set out in the Explanatory be available for inspection electronically. Members
the Board of Directors, Committees and other meetings
Statement annexed to the Notice convening this meeting.” seeking to inspect such documents can send email at
2. To receive, consider and adopt the audited consolidated and/or reimbursement of expenses, notwithstanding that
companysec@nayaraenergy.com.
financial statements of the Company for the financial payment of such remuneration is in excess of the limits “RESOLVED FURTHER THAT the Board of Directors of
year ended March 31, 2021 together with the report of of remuneration prescribed under Section 197 read with the Company be and is hereby authorised to do all acts 5. As required under Secretarial Standard 2 specified by the
Auditors thereon. Schedule V of the Act.” and take all such steps as may be necessary, proper or Institute of Company Secretaries of India, the details of all
expedient to give effect to this resolution.” Directors seeking appointment or re-appointment at this
3. To appoint a Director in place of Mr. Jonathan Kollek (DIN “RESOLVED FURTHER THAT the Board of Directors be
AGM and Independent Directors to whom remuneration
07710920) who retires from office by rotation in terms and is hereby authorized to do all such acts and take all
By order of the Board of Directors is proposed to paid, are appended at the end of this
of Section 152(6) of the Companies Act, 2013 and being such steps as may be necessary, proper or expedient to
Notice.
eligible, offers himself for re-appointment. give effect to this resolution without being required to
seek any further consent or approval of the members.” Date: July 15, 2021 Mayank Bhargava 6. Members are further requested to intimate changes, if any,
4. To appoint a Director in place of Mr. Alexander Romanov Place: Mumbai Company Secretary pertaining to their name, postal address, email address,
(DIN 07731508) who retires from office by rotation in 7. For payment of remuneration to Mr. Deepak Kapoor,
telephone/ mobile numbers and update their Permanent
terms of Section 152(6) of the Companies Act, 2013 and Independent Director
Account Number (PAN), mandates, nominations, power
being eligible, offers himself for re-appointment. To consider and if thought fit, to pass the following Registered Office:
of attorney, bank details such as, name of the bank and
5. To appoint a Director in place of Ms. Victoria Cunningham Resolution as a Special Resolution: Khambhalia, Post Box No. 24, branch details, bank account number, MICR code, IFSC
(DIN 08595967) who retires from office by rotation in Dist. Devbhumi Dwarka – 361305, Gujarat. code, etc., to their respective DPs (in case of electronically
“RESOLVED THAT pursuant to the provisions of Sections
terms of Section 152(6) of the Companies Act, 2013 and Phone: 91 2833 661444, Fax: 91 2833 662929 held shares) and Company’s Share Transfer Agents (in case
197, 198, Schedule V and all other applicable provisions
being eligible, offers herself for re-appointment. e-mail: investors@nayaraenergy.com of shares in physical form).
of the Companies Act, 2013 (including any statutory
Website: www.nayaraenergy.com
modification(s) or re-enactment(s) thereof for the time 7. Members attending the AGM through VC / OAVM shall
SPECIAL BUSINESS being in force) and the Companies (Appointment and Notes: be counted for the purpose of reckoning the quorum
6. For payment of remuneration to Ms. Naina Lal Kidwai, Remuneration of Managerial Personnel) Rules, 2014 1. Considering the present COVID 19 pandemic, the Ministry under Section 103 of the Act.
Independent Director as amended from time to time (“the Act”) and Articles of Corporate Affairs (“MCA”) has vide General Circular
of Association of the Company and subject to such 8. Corporate Members authorising its representatives
To consider and if thought fit, to pass the following nos. 14/2020, 17/2020, 20/2020, 02/2021 (collectively
approvals, permissions and sanctions, as may be required to attend the Meeting through VC / OAVM are
Resolution as a Special Resolution: referred to as “MCA Circulars”) permitted the holding
from appropriate authorities, the consent of the members requested to send a scanned copy of duly certified
“RESOLVED THAT pursuant to the provisions of Sections of the Annual General Meeting (“AGM”) through VC /
of the Company be and is hereby accorded for payment Board Resolution authorising their representative(s) to
197, 198, Schedule V and all other applicable provisions OAVM, without the physical presence of the members at
of remuneration of USD 2,64,145 to Mr. Deepak Kapoor, attend through VC / OAVM and to vote through remote
of the Companies Act, 2013 (including any statutory a common venue. In compliance with the provisions of the
Independent Director of the Company (DIN – 00162957) e-voting / e-voting on their behalf at the AGM. The said
modification(s) or re-enactment(s) thereof for the time Companies Act 2013, (“Act”) and MCA Circulars, the AGM
for financial year 2020-21, in addition to the sitting fee resolution/authorization shall be sent to the Scrutinizer
being in force) and the Companies (Appointment and of the Company is being held through VC / OAVM.
paid to him for attending the meetings of the Board by email through its registered email address to
Remuneration of Managerial Personnel) Rules, 2014 2. Generally, a member entitled to attend and vote at the pcskalaagarwal@gmail.com with a copy marked to
of Directors, Committees and other meetings and/
as amended from time to time (“the Act”) and Articles meeting is entitled to appoint a proxy to attend and vote evoting@nsdl.co.in and companysec@nayaraenergy.com.
or reimbursement of expenses, notwithstanding that
of Association of the Company and subject to such instead of himself and the proxy need not be a member of
payment of such remuneration is in excess of the limits
approvals, permissions and sanctions, as may be required the Company. Since this AGM is being held pursuant to the
of remuneration prescribed under Section 197 read with
from appropriate authorities, the consent of the members MCA Circulars through VC / OAVM, physical attendance
Schedule V of the Act.”

214 215
 9. Members can avail of the facility of nomination in respect (i) Scanned copy of the share certificate (front and and have not cast their vote on the Resolutions through obtain the login ID and password by sending a request to
of shares held by them in physical form pursuant to the back); remote e-voting and are otherwise not barred from doing NSDL at evoting@nsdl.co.in. Members may also contact
provisions of Section 72 of the Act. Members desiring so, shall be eligible to vote through e-voting system during Mr. Pradeep Mokale of the Share Transfer Agent i.e. Link
(ii) Self-attested scanned copy of PAN card; and
to avail this facility may send their nomination in the the AGM. Members of the Company, holding shares either Intime India Private Limited at 022 4918 6000 or send
prescribed Form SH-13 duly filled in to M/s. Link Intime (iii) Self-attested scanned copy of any one of Aadhar in physical form or in dematerialised form, as on the cut- email at pradeep.mokale@linkintime.co.in.
India Private Limited. The prescribed form in this regard card / passport / driving license / electricity bill (not off date may cast their vote electronically.
9. The Board of Directors of the Company has appointed
may also be obtained from M/s. Link Intime India Private older than 3 months)
The cut-off date for determining entitlement of members Ms. Kala Agarwal (Membership No. FCS – 5976, COP No.
Limited. Email ID shall be registered / updated by RTA post for casting votes through remote e-voting and e-voting at 5356), Practicing Company Secretary as the Scrutinizer to
10. In terms of Companies (Prospectus and Allotment verification of documents. the AGM is September 8, 2021. scrutinize the e-voting during AGM and remote e-voting
of Securities) Third Amendment Rules 2018 dated 2. For shareholders holding shares in dematerialised form process in a fair and transparent manner.
3. The notice of AGM will be sent to the members, whose
September 10, 2018 (“Rules”), every shareholder of the
The members are requested to register their email names appear in the register of members / depositories 10. The Scrutinizer shall, immediately after the conclusion
Company who intends to transfer his / her shares held
address, in respect of demat holdings with the respective as at closing hours of business on Friday, August 13, 2021 of e-voting at the AGM, first count the votes cast at
in physical form, needs to get such shares dematerialized
Depository Participant by following the procedure and any recipient of the notice whose name does not the AGM and thereafter unblock the votes cast through
before transfer. Accordingly, requests for effecting
prescribed by the Depository Participant. If you are an appear as a member in relation to the shares as on the remote e-voting and shall make, not later than three days
transfer of shares held in physical form are not accepted
Individual shareholder holding securities in demat mode, aforesaid date should treat the same as an intimation only. of the conclusion of the AGM, a consolidated scrutinizer’s
by the Company. You are requested to get in touch with
you are requested to refer to the login method explained report of the total votes cast in favour or against, if any,
a depository participant and take necessary actions to 4. The members who have cast their vote by remote e-voting
at step 1 (A) i.e. Login method for e-Voting and joining to the Chairman or a person authorized by the Board of
dematerialize your physically held shares. ISIN for equity prior to the AGM may also attend the AGM through VC/
virtual meeting for Individual shareholders holding Directors, who shall countersign the same and declare the
shares of the Company is – INE011A01019. OAVM but shall not be entitled to cast their vote again.
securities in demat mode. result of the voting forthwith.
11. Pursuant to Section 124 of the Act, all unclaimed principal 5. Once the vote on a resolution is cast by the member, the
3. Alternatively shareholder/members may send a request to 11. The results of the voting on the resolution at the AGM
amount of debentures remaining unpaid or unclaimed member shall not be allowed to change it subsequently.
evoting@nsdl.co.in for procuring user id and password for shall be declared by the Chairman or his authorized
for a period of seven years from the date they became 6. The members shall have one vote per equity share held by
e-voting by providing above mentioned documents. representative or anyone of the Directors of the Company
due for payment during the financial year 2013-14 have them. The facility of remote e-voting would be provided on or after the date of the AGM within the prescribed
been transferred to the Investor Education and Protection 4. Individual shareholders holding securities in demat once for every folio/ client id, irrespective of the number time limits.
Fund (IEPF) established by the Central Government. mode are allowed to vote through their demat account of joint holders.
The members, whose unclaimed amounts have been maintained with Depositories and Depository Participants. 12. The result of the remote e-voting along with the report
transferred to IEPF, may claim the same by making an Shareholders are required to update their mobile number 7. The voting rights of members shall be in proportion of scrutiniser will also be placed on the website of the
online application to the IEPF Authority in web Form No. and email ID correctly in their demat account in order to to their share of the paid up equity share capital of the Company viz. www.nayaraenergy.com and on the website
IEPF-5 available on www.iepf.gov.in. access e-Voting facility. Company as on the cut-off date of September 8, 2021. of NSDL.

12. Since the AGM will be held through VC / OAVM, the 8. Any person, who acquires shares of the Company and 13. The scrutinizer’s decision on the validity of remote
Voting through electronic means become member after dispatch of the notice and holding e-voting and e-voting at the AGM will be final.
Route Map is not annexed in this Notice.
1. Pursuant to Section 108 of the Act read with the shares as of the cut-off date i.e. September 8, 2021 may
Procedure of registration of Email ID Companies (Management and Administration) Rules,
2014, the Company is providing remote e-voting facility to
1. For shareholders holding shares in physical form
the members to exercise their right to vote on resolutions THE INSTRUCTIONS FOR REMOTE E-VOTING BEFORE/ DURING THE AGM
The members of the Company holding Equity Shares proposed to be considered at the AGM. All business to The details of the process and manner for remote e-Voting are explained herein below:
in physical form and who have not registered their be transacted at the AGM can only be transacted through Step 1: Access NSDL e-Voting system
e-mail addresses may get their email IDs registered the electronic voting system. The facility of casting the
by sending scanned copy of a request on plain paper Step 2: Cast your vote electronically and join General Meeting on NSDL e-Voting system.
votes by the members using the electronic voting system
signed by the shareholder (including joint holders, if will be provided by National Securities Depository Limited Details on Step 1 are mentioned below:
any) to the Registrar and Transfer Agent (“RTA”) of the (NSDL). Step 1: Access to NSDL e-Voting system
Company, M/s Link Intime India Private Limited at
2. The remote e-voting facility will be available at the link A) Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode
rnt.helpdesk@linkintime.co.in by providing:
https://www.evoting.nsdl.com during the following voting Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with
(i) Folio No.; period: Depositories and Depository Participants. Shareholders are advised to update their mobile number and email ID in their
(ii) Name of shareholder (including joint holders, if any); Commencement of remote e-voting : From 8.00 a.m. of demat accounts in order to access e-voting facility.
September 10, 2021 Login method for Individual shareholders holding securities in demat mode is given below:
(iii) Email ID to be registered; and

(iv) Mobile No. (Optional) End of remote e-voting : Up to 5.00 p.m. of September 14, 2021 Type of shareholders Login Method

Remote e-voting shall not be allowed beyond 5.00 p.m. Individual Shareholders NSDL IDeAS facility
Along with scanned copy of the request, the following holding securities in
of September 14, 2021. Further, those members, who will 1. If you are already registered on NSDL IDeAS facility, follow the below steps:
documents are required: demat mode with NSDL.
be present in the meeting through VC / OAVM facility a) Visit the e-Services website of NSDL. Open web browser by typing URL: https://eservices.nsdl.com.
b) On the e-Services home page, click on the “Beneficial Owner” icon under “Login” which is available
under ‘IDeAS’ section,
c) This will prompt you to enter your existing User ID and Password. After successful authentication, you
will be able to see e-Voting services under Value added services.

216 217
 d) Click on “Access to e-Voting” under e-Voting services and you will be able to see e-Voting page. B) Login Method for e-Voting and joining virtual meeting for c) How to retrieve your ‘initial password’?
shareholders other than Individual shareholders holding (i) If your email ID is registered in your demat account
e) Click on company name or e-Voting service provider i.e. NSDL and you will be re-directed to e-Voting
website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting & securities in demat mode and shareholders holding or with the company, your ‘initial password’ is
voting during the meeting. securities in physical mode. communicated to you on your email ID. Trace the
2. If you are not registered, follow the below steps: email sent to you from NSDL from your mailbox.
How to Log-in to NSDL e-Voting website?
a) If you are not registered for IDeAS e-Services, option to register is available at Open the email and open the attachment i.e. a .pdf
https://eservices.nsdl.com. 1. Visit the e-Voting website of NSDL. Open web browser by
file. Open the .pdf file. The password to open the
b) Select “Register Online for IDeAS Portal” or click at typing the following URL: https://www.evoting.nsdl.com/
.pdf file is your 8 digit client ID for NSDL account,
https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp either on a Personal Computer or on a mobile.
last 8 digits of client ID for CDSL account or folio
c) Visit the e-Voting website of NSDL. Open web browser by typing the following 2. Once the home page of e-Voting system is launched, click
URL: https://www.evoting.nsdl.com/.
number for shares held in physical form. The .pdf file
on the icon “Login” which is available under ‘Shareholder/ contains your ‘User ID’ and your ‘initial password’.
d) Once the home page of e-Voting system is launched, click on the icon “Login” which is available under
Member’ section.
‘Shareholder/Member’ section. A new screen will open. (ii) If your email ID is not registered, please follow steps
e) You will have to enter your User ID (i.e. your sixteen digit demat account number with NSDL), 3. A new screen will open. You will have to enter your User mentioned below in process for those shareholders
Password/OTP and a Verification Code as shown on the screen. ID, your Password/OTP and a Verification Code as shown whose email ids are not registered.
f) After successful authentication, you will be redirected to NSDL Depository site wherein you can on the screen.
see e-Voting page. Click on company name or e-Voting service provider i.e. NSDL and you will be 6. If you are unable to retrieve or have not received the “
redirected to e-Voting website of NSDL for casting your vote during the remote e-Voting period or Alternatively, if you are registered for NSDL eservices Initial password” or have forgotten your password:
joining virtual meeting & voting during the meeting. i.e. IDEAS, you can log-in at https://eservices.nsdl.com/
a) Click on “Forgot User Details/Password?”(If you are
Individual Shareholders 1. Existing users who have opted for Easi / Easiest, they can login through their user id and password. with your existing IDEAS login. Once you log-in to NSDL
holding securities in Option will be made available to reach e-Voting page without any further authentication. The URL for holding shares in your demat account with NSDL or
eservices after using your log-in credentials, click on
users to login to Easi / Easiest are https://web.cdslindia.com/myeasi/home/login or www.cdslindia.com CDSL) option available on www.evoting.nsdl.com.
demat mode with CDSL e-Voting and you can proceed to Step 2 i.e. Cast your vote
and click on New System Myeasi.
2. After successful login of Easi/Easiest, the user will be also able to see the E Voting Menu. The Menu will electronically. b) Physical User Reset Password?” (If you are holding
have links of e-Voting service provider i.e. NSDL. Click on NSDL to cast your vote. shares in physical mode) option available on
4. Your User ID details are given below :
3. If the user is not registered for Easi/Easiest, option to register is available at www.evoting.nsdl.com.
https://web.cdslindia.com/myeasi/Registration/EasiRegistration Manner of holding shares Your User ID is:
i.e. Demat (NSDL or c) If you are still unable to get the password by
4. Alternatively, the user can directly access e-Voting page by providing demat Account Number and PAN aforesaid two options, you can send a request at
CDSL) or Physical
No. from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP
on registered Mobile & Email as recorded in the demat Account. After successful authentication, user will a) For Members who 8 Character DP ID followed by 8 evoting@nsdl.co.in mentioning your demat account
be provided links for the respective ESP i.e. NSDL where the e-Voting is in progress. hold shares in demat Digit Client ID number/folio number, your PAN, your name and your
Individual Shareholders 1. You can also login using the login credentials of your demat account through your Depository Participant account with NSDL. registered address etc.
For example if your DP ID
(holding securities in registered with NSDL/CDSL for e-Voting facility.
is IN300*** and Client ID is d) Members can also use the OTP (One Time Password)
demat mode) login 2. Once logged in, you will be able to see e-Voting option. Click on e-Voting option and you will be
12****** then your user ID is based login for casting the votes on the e-Voting
through their depository redirected to NSDL/CDSL Depository site after successful authentication, wherein you can see e-Voting
feature. IN300***12******. system of NSDL
participants
3. Click on company name or e-Voting service provider i.e. NSDL and you will be redirected to e-Voting b) For Members who 16 Digit Beneficiary ID
7. After entering your password, tick on Agree to “Terms and
website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting & hold shares in demat
For example if your Beneficiary ID Conditions” by selecting on the check box.
voting during the meeting. account with CDSL.
is 12************** then your user
Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget ID is 12************** 8. Now, you will have to click on “Login” button.
Password option available at abovementioned website. c) For Members holding EVEN Number followed by Folio 9. After you click on the “Login” button, Home page of
shares in Physical Number registered with the e-Voting will open.
Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through
Form. company
Depository i.e. NSDL and CDSL. Step 2: Cast your vote electronically and join General Meeting
For example if folio number is
Login type Helpdesk details
on NSDL e-Voting system.
001*** and EVEN is 101456 then
Individual Shareholders Members facing any technical issue in login can contact NSDL helpdesk by sending a request at user ID is 101456001*** How to cast your vote electronically and join General Meeting
holding securities in evoting@nsdl.co.in or call at toll free no.: 1800 1020 990 and 1800 22 44 30 on NSDL e-Voting system?
demat mode with NSDL
5. Password details for shareholders other than Individual
1. After successful login at Step 1, you will be able to see all
shareholders are given below:
Individual Shareholders Members facing any technical issue in login can contact CDSL helpdesk by sending a request at the companies “EVEN” in which you are holding shares
holding securities in helpdesk.evoting@cdslindia.com or contact at 022- 23058738 or 022-23058542-43 a) If you are already registered for e-Voting, then you and whose voting cycle and General Meeting is in active
demat mode with CDSL can use your existing password to login and cast your status.
vote.
2. Select “EVEN 116761” of Nayara Energy Limited for
b) If you are using NSDL e-Voting system for the first casting your vote during the remote e-Voting period and
time, you will need to retrieve the ‘initial password’ casting your vote during the General Meeting. For joining
which was communicated to you. Once you retrieve virtual meeting, you need to click on “VC/OAVM” link
your ‘initial password’, you need to enter the ‘initial placed under “Join General Meeting”.
password’ and the system will force you to change
your password.

218 219
 3. Now you are ready for e-Voting as the Voting page opens. INSTRUCTIONS FOR MEMBERS FOR ATTEND- name, DP ID and Client ID/ folio number, PAN, mobile On account of adjustment of past accumulated losses, there
ING THE AGM THROUGH VC / OAVM ARE AS number at Shareholderqueries@nayaraenergy.com. These were losses in the FY 2021 computed under Section 198 of
4. Cast your vote by selecting appropriate options i.e. assent
UNDER: queries will be replied suitably either at the AGM or by the Act. The remuneration proposed to be paid to Independent
or dissent, verify/modify the number of shares for which
e-mail. Directors of the Company for FY 2021 is in excess of the limits
you wish to cast your vote and click on “Submit” and also 1. Member will be provided with a facility to attend the
prescribed under Section 197 read with Schedule V of the Act.
“Confirm” when prompted. AGM through VC/OAVM through the NSDL e-Voting As required by Section 102 of the Companies Act, 2013, and
system. Members may access by following the steps Secretarial Standard 2, following explanatory statement sets Accordingly, approval of the members is sought by passing
5. Upon confirmation, the message “Vote cast successfully”
mentioned above for Access to NSDL e-Voting system. out all material facts relating to the business mentioned under of special resolutions in terms of Section 197(3) read with
will be displayed.
After successful login, you can see link of “VC/OAVM Item Nos. 6 to 8 of the accompanying Notice: Schedule V of the Act for the remuneration payable to the
6. You can also take the printout of the votes cast by you by link” placed under “Join General meeting” menu against Independent Directors of the Company for FY 2021, as stated
clicking on the print option on the confirmation page. company name. You are requested to click on VC/OAVM Item No. 6 and 7 in resolutions at Item No. 6 and 7 of this Notice.
7. Once you confirm your vote on the resolution, you will not link placed under Join General Meeting menu. The link Post the change in ownership of the majority shareholding in The relevant information required to be provided to Members
be allowed to modify your vote. for VC/OAVM will be available in Shareholder/Member the Company, effective from August 19, 2017, your Company as per Schedule V of the Act is set out below:
login where the EVEN of Nayara Energy Limited will be appointed Mr. Deepak Kapoor and Ms. Naina Lal Kidwai as
General Guidelines for shareholders displayed. Please note that the members who do not have Independent Directors having diverse global background and I. General Information
(i) Institutional shareholders (i.e. other than individuals, the User ID and Password for e-Voting or have forgotten extensive experience in their respective fields.
(1) Nature of Industry:
HUF, NRI etc.) are required to send scanned copy (PDF/ the User ID and Password may retrieve the same by
Your Company has benefitted immensely from the guidance The Company belongs to the refining industry. It is
JPG Format) of the relevant Board Resolution/ Authority following the remote e-Voting instructions mentioned in
provided by the Independent Directors. These Independent an existing company engaged in refining of crude oil
letter etc. with attested specimen signature of the duly the notice to avoid last minute rush.
Directors are members of various statutory and non- and marketing of petroleum products.
authorized signatory(ies) who are authorized to vote, to 2. Members are encouraged to join the meeting through statutory committees, constituted by the Board, to monitor
the Scrutinizer by e-mail at pcskalaagarwal@gmail.com Laptops for better experience. business affairs of the Company from time to time and have (2) Commencement of commercial production:
with a copy marked to evoting@nsdl.co.in. rendered their expertise and guidance in the functioning and The Company is an operating entity. The Company
3. Further Members will be required to allow Camera and
Members of the Company under the category of management of the Company. operates an oil refinery which commenced commercial
use Internet with a good speed to avoid any disturbance
Institutional Shareholders are encouraged to attend and production in the year 2008. The refinery expansion
during the meeting. In accordance with the approval of the Board, all the Non-
participate in the AGM through VC/OAVM and vote project commissioned in March 2012 enhancing
Executive Directors including the Independent Directors
thereat. 4. Please note that participants connecting from mobile the refinery capacity to 18 MMTPA. Thereafter, an
are currently paid sitting fees for attending the meetings
devices or tablets or through laptop connecting via Optimization project was commissioned in June
(ii) It is strongly recommended not to share your password of the Board or Committees thereof. At an Extra Ordinary
mobile hotspot may experience audio/video loss due to 2012 further enhancing the refining capacity to 20
with any other person and take utmost care to keep your General Meeting of the Company held on May 21, 2018, the
fluctuation in their respective network. It is therefore MMTPA.
password confidential. Login to the e-voting website Shareholders had approved payment of commission to the
recommended to use stable Wi-Fi or LAN Connection to (3) In case of new companies, expected date of
will be disabled upon five unsuccessful attempts to key Non-Executive Directors of the Company not exceeding 1% of
mitigate any kind of aforesaid glitches. commencement of activities as per project approved
in the correct password. In such an event, you will need the net profits of the Company calculated under Section 198 of
5. Facility of joining the AGM through VC / OAVM shall open the Companies Act, 2013 (“Act”). However, due to inadequacy by financial institutions appearing in the prospectus
to go through the “Forgot User Details/ Password?” or
15 minutes before the time scheduled for the AGM and of profits, the Company was not able to pay commission to – Not Applicable
“Physical User Reset Password?” option available on
www.evoting.nsdl.com to reset the password. will be available for members on first come first serve Non-Executive Directors including the Independent Director (4) Financial performance:
basis. for last two financial years i.e. FY 2018-19 and FY 2019-20. The financial performance of the Company in the
(iii) In case of any queries, you may refer the Frequently
6. Members who need assistance before or during the AGM, Now, the Companies Amendment Act, 2020, made significant preceding financial year was as under:
Asked Questions (FAQs) for Shareholders and e-voting
user manual for Shareholders available at the download can contact NSDL on their helpdesk numbers provided amendments to Section 197 read with Schedule V of the Act
Financial parameters Financial year
section of www.evoting.nsdl.com or call on toll free no.: above. permitting the companies to pay remuneration to its Non- ended March
1800 1020 990 and 1800 22 44 30 or send a request at 7. Members who would like to express their views or ask Executive Directors, including Independent Directors. In the 31, 2021
evoting@nsdl.co.in interest of the Company, the Non Independent Non Executive (₹.in Million)
questions during the AGM may register themselves
as a speaker by sending their request from their Directors have expressed desire not to receive remuneration Revenue from Operations 875,006
INSTRUCTIONS FOR E-VOTING AT THE AGM registered email address mentioning their name, DP ID for the financial year 2020-21. Earnings before finance cost, 37,281
depreciation and amortization,
The procedure for e-voting on the day of the AGM is same as and Client ID / folio number, PAN, mobile number at Considering roles and responsibilities of the Independent exceptional items & discontinued
the instructions mentioned above for remote e-voting. Shareholderqueries@nayaraenergy.com from September Directors requiring greater time commitments, attention and operation and tax (EBITDA)
8, 2021 (9:00 a.m. IST) to September 12, 2021 (5:00 p.m. a higher level of oversight, the Nomination & Remuneration Net profit/(loss) after tax as per 4665
Only those Members, who will be present in the meeting
IST). Those members who have registered themselves as Committee and the Board of Directors, at their respective Statement of Profit & Loss
through VC/OAVM facility and have not cast their vote on the
a speaker will only be allowed to express their views/ask meetings, recommended and approved payment of Net profit / (loss) computed u/s 198 (32,579)
resolutions through remote e-voting and are otherwise not of the Act
questions during the AGM. The Company reserves the remuneration to Independent Directors for FY 2020-21, as
barred from doing so, shall be eligible to vote through e-voting
right to restrict the number of speakers depending on the stated in the respective resolutions, subject approval of the
system in the AGM.
availability of time for the AGM. Shareholders.
The details of the person who may be contacted for any
8. The members who have queries on financial statements or This remuneration shall be in addition to fees payable to the
grievances connected with the facility for e-Voting on the day
any matter to be approved at the AGM may send the same Independent Directors for attending the meetings of the Board
of the AGM shall be the same person mentioned for Remote
latest by Sunday, September 12, 2021 mentioning their or Committees thereof and reimbursement of expenses for
e-voting.
participation in the Board and committee meetings.

220 221
 (5) Foreign investments and collaborations, if any: Mr. Deepak Kapoor, former Chairman of PwC Kapoor and Ms. Naina Lal Kidwai were appointed own network of retail outlets, complemented by
Prior to August 18, 2017, Essar Energy Holdings India, was associated with PwC for over 30 as Independent Directors on the Board of Vadinar an effective risk management system to cover risks
Ltd., erstwhile foreign promoter company along years and worked as its partner since 1991 and Oil Terminal Limited (erstwhile subsidiary of the related to commodity and currency, along with
with a Promoter group entity were holding 98.26% as its Managing Director from 2007 to 2016. Company which is now merged with the Company sustained and safe refinery operations are the factors
stake in the Company in the form of Equity Shares As member of PwC’s India Leadership Team, he w.e.f. December 14, 2020 pursuant to the order that enable the Company to achieve robust results.
and Global Depository Shares. On August 18, 2017, handled various leadership roles, leading deals passed by the Hon’ble National Company Law
The operations of the Company in FY 2021
in accordance with two separate Share Purchase and working in the Telecom, Entertainment Tribunal) w.e.f. August 5, 2019 till December 14,
were satisfactory with the plant working above
Agreements, both dated October 15, 2016, the and Media domain. Mr. Kapoor has extensive 2020;
industry standards above 85% capacity despite
entire stake held by Essar Energy Holdings Ltd and its experience in Audit as well as Business advisory
c) possesses post graduate level qualification with COVID-19 pandemic induced restrictions in
associates was acquired by two Shareholders namely, function.
expertise and specialized knowledge in the field in movements impacting reduction on offtake of
Rosneft Singapore Pte Limited, Singapore (subsidiary During FY 2021, Mr. Deepak Kapoor received which the Company operates; petroleum products in the country. The Company
of PJSC Rosneft Oil Company, Russia) taking 49.13% sitting fees of Rs.20,00,000 from Nayara Energy is expanding its country-wide chain of franchisee
stake and Kesani Enterprises Company Limited, d) do not have any direct or indirect pecuniary
Limited for attending meeting of the Board operated retail outlets and as of March 31, 2021
Cyprus (a consortium led by Trafigura Pte Limited relationship with the Company or the managerial
and committees of which he is a member. Mr. has over 6,000 operational retail outlets which
and UCP PE Investments Limited) acquiring another personnel other than getting remuneration from the
Deepak Kapoor also received a commission enhance the supply chain stability and enable the
49.13% stake in share capital of the Company. Company;
of Rs.1,80,00,000 in capacity of Independent Company to improve its profitability. During the
Director of Vadinar Oil Terminal Limited, e) not related to any Director or any other key FY 2021, the Company has also merged its subsidiary,
II. Information about Independent Director managerial personnel of the Company;
erstwhile subsidiary of the Company which is Vadinar Oil Terminal Limited with itself to have
entitled to remuneration now merged with the Company. synergies of operations, which is primarily designed
1. Background details, Past remuneration, Recognition III. Other information to optimise the operations and thereupon the cost.
2. Remuneration proposed to be paid:
or awards and Job profile and their suitability etc. (1) Reasons for inadequacy of profit, if any: Your Company is also considering various expansion
It is proposed to pay remuneration to Independent opportunities which are in primary stage as of now.
A) Naina Lal Kidwai The Company earned profits of ₹4,665 million
Directors, as stated at Item No. 6 and 7 of this
Ms. Naina Lal Kidwai, aged 64 years old and as per the statement of profit and loss for the A combination of the above would help in reducing
Notice, for FY 2021.
holds a Bachelor of Arts degree in Economics FY 2021. However, on account of adjustment operating costs and improvement in the performance
The remuneration shall be paid in Indian Rupees of past accumulated losses, as necessitated by of the Company in coming years. The Company has not
(Honours) from Lady Shri Ram College, Delhi.
represented by the value in United States Dollars to the amendments introduced by the Companies committed any default in repayment of any of its debts
She also holds a degree in Masters in Business
Independent Directors at exchange rate prevailing (Amendment) Act, 2017 notified on September 12, (including public deposits) or debentures or interest
Administration from Harvard Business School.
on the date of payment of the remuneration. 2018, there was inadequacy of profits computed payable thereon in the FY 2021.
Ms. Naina Lal Kidwai has rich experience in
On account of loss or inadequacy of profits in under section 198 of the Act, as a consequence
the Financial Services sector. She has been The aforesaid Independent Directors are deemed
FY 2021, in accordance with the provisions of of which the remuneration paid to the managerial
closely associated with large fund managers, to be concerned or interested in the respective
Section 198 of the Act, approval of the members is personnel together with the remuneration proposed
MNCs and Indian corporates. She has worked resolution for payment of remuneration to them.
sought for payment of remuneration, to Independent to be paid to Independent Directors in the financial
with PwC, ANZ Grindlays Bank PLC (Standard Except for this, none of the Directors or key
Directors, as stated in the respective resolutions, by year ended March 31, 2021 exceeded the limits
Chartered Bank), Morgan Stanley & HSBC managerial personnel of the Company or their
passing of these special resolutions under Section prescribed under Section 197 read with Schedule V
She has overseen mergers and acquisitions of relatives are in any way, concerned or interested,
197(3) read with Schedule V of the Act. In the opinion of the Act.
numerous entities. financially or otherwise, in the resolutions set out at
of the Board, the remuneration proposed to be paid (2) Steps taken or proposed to be taken for improvement
During FY 2021, Ms. Naina Lal Kidwai received Item No. 6 and 7 of the Notice.
to the Independent Directors is comparable with the and expected increase in productivity and profits in
sitting fees of Rs.24,00,000 from Nayara Energy The Board of Directors is of the opinion that
remuneration being paid for similar assignments in measurable terms:
Limited for attending meeting of the Board and the payment of remuneration to the aforesaid
the industry.
committees of which she is a member. Ms. As stated above, the Company generated EBITDA Independent Directors for FY 2021 would be in the
Naina Lal Kidwai also received a commission We confirm that both the Independent Directors: and PAT of ₹37,281 million and ₹4,665 million, interest of the Company.
of Rs.2,00,00,000 in capacity of Independent a) have been associated with the Company in respectively, in the FY 2021. There was inadequacy
Accordingly, the Board of Directors recommend the
Director of Vadinar Oil Terminal Limited, professional capacity and do not have any interest in of profits as computed under Section 198 of the Act
resolutions set forth in Item No. 6 and 7 of the Notice
erstwhile subsidiary of the Company which is the capital of the Company or any of its subsidiaries on account of past accumulated losses which were
for the approval of the Members of the Company by
now merged with the Company. directly or indirectly or through any other statutory incurred prior to change in control and change in
Special Resolution.
structures; Board of Directors of the Company.
B) Deepak Kapoor
Item No. 8
Mr. Deepak Kapoor aged 62 years, is a b) do not have any direct or indirect interest or not The Company has taken continuous steps in the past
to optimise the costs and to enhance the operational The Board of Directors, on the recommendation of the Audit
meritorious commerce graduate from Delhi been related to any of the Directors of the Company
efficiency and productivity that maximise the Committee, has approved the appointment of M/s. Chandra
University (third rank holder). Mr. Kapoor is or any of its subsidiaries at any time during the last
profits. These steps have resulted in improving the Wadhwa & Co., Cost Accountants, as Cost Auditors of the
a Fellow Member of Institute of Chartered two years before or on or after the date of their
Company’s profitability in the past and which shall Company for the financial year ending on March 31, 2022
Accountants of India, Fellow Member of respective appointments. Post their appointment
continue to be carried in the future. The Company’s and the Cost Audit fees has been fixed at ₹1 million including
Institute of Company Secretaries of India on the Board of Nayara Energy Limited, Mr. Deepak
strategy towards product security and supply chain XBRL filing of cost audit report and excluding out-of-pocket
and a member of Institute of Certified Fraud
stability including increasing the supplies through expenses and applicable taxes.
Examiners, USA.

222 223
 In accordance with the provisions of Section 148 of the The Board accordingly recommends the resolution at Item No. Particulars Ms. Naina Lal Kidwai Mr. Deepak Kapoor
Companies Act, 2013 read with the Companies (Audit and 8 of the Notice for your approval.
Age 64 62
Auditors) Rules, 2014, the remuneration payable to the Cost
Qualification Ms. Kidwai has studied Chartered Accountancy A meritorious commerce graduate from Delhi
Auditors has to be ratified by the shareholders of the Company. By order of the Board of Directors
and holds a Bachelor of Arts degree in Economics University (third rank holder), a Fellow Member of
Accordingly, the consent of the members is sought for passing (Honours) from Lady Shri Ram College, Delhi. Institute of Chartered Accountants of India, Fellow
an Ordinary Resolution as set out at Item No.8 of the Notice for She also holds a degree in Master in Business Member of Institute of Company Secretaries of
Date: July 15, 2021 Mayank Bhargava
Administration from Harvard Business School. India and a member of Institute of Certified Fraud
ratification of the remuneration payable to the Cost Auditors Place: Mumbai Company Secretary Examiners, USA.
for the financial year ending on March 31, 2022.
Registered Office: Experience Ms. Kidwai has primarily worked in Financial Mr. Deepak Kapoor, former Chairman of PwC
Khambhalia Post, P. O. Box 24, Services, including strategy setting, and directing India, was associated with it for over 30 years. He
None of the Directors, Key Managerial Personnel of the
of organizations and establishing and leading was named partner in 1991 and was the Managing
Company and their relatives are in any way, concerned or Dist. Devbhumi Dwarka – 361305, Gujarat. large highly motivated teams. She has worked Director from 2007 to 2016. As a member of
interested financially or otherwise in the resolution at item No. Phone: 91 2833 661444, Fax: 91 2833 662929 closely with entities in all the major global markets PwC’s India Leadership Team, Mr. Kapoor served in
including large fund managers, multinational various leadership and client service roles. He has
8 of the Notice. e-mail: investors@nayaraenergy.com
corporations and Indian corporates. She has a lead deals for more than eight years and practice
Website: www.nayaraenergy.com strong network of relationships with Financial in the areas of Telecom, Entertainment and Media
Institutions, Government, Regulators and for over ten years. Mr. Kapoor successfully steered
Corporates. She has also to her credit established the firm during very challenging times and has
a number of new businesses and successfully strengthened the firm’s footprint in India. Mr.
overseen mergers and acquisitions of entities. Kapoor has extensive experience in the Audit
As per Secretarial Standard 2 following are the details of Directors seeking appointment/ re-appointment at this General
During her long professional career, she has function as well as business advisory related work.
Meeting and Independent Directors to whom remuneration is proposed to be paid worked with organisations like Price WaterHouse His experience, in India and overseas, encompasses
Coopers, ANZ Grindlays Bank PLC (now Standard multiple industries including consumer products,
Particulars Mr. Jonathan Kollek Mr. Alexander Romanov Ms. Victoria Cunningham Chartered Bank), Morgan Stanley India and HSBC. manufacturing, telecom, technology, healthcare,
entertainment and media.
Age 61 50 54
Terms and conditions of Ms. Kidwai was appointed to hold office for a Mr. Kapoor was appointed to hold office for a
Qualification B. Sc. in Economics and Chemical Engineering Organic, An Executive MBA degree and a degree in appointment, when made period of five years from October 9, 2017 to period of five years from December 18, 2017 to
International Relations Economics Chemistry. October 8, 2022 December 17, 2022
Experience Mr. Kollek has over 30 years Mr. Romanov has more than Ms. Victoria Cunningham is Co-Managing Remuneration sought to be paid Remuneration of USD 2,77,000 for FY 2020-21 in Remuneration of USD 2,64,145 for FY 2020-21 in
of experience. He is presently 24 years of rich experience Partner of UCP and has over 18 years of addition to sitting fees paid to her addition to sitting fees paid to him
working as General Manager in of working in oil and gas investment banking and private equity
Trafigura Eurasia LLC, Moscow. companies in refining and experience in Russian and international Remuneration last drawn As stated in Explanatory Statement at As stated in Explanatory Statement at
He is primarily responsible petrochemical. He is currently markets.She joined UCP from Deutsche Item No. 6 and 7 Item No. 6 and 7
for development of business working as Vice President for UFG, where she was Managing Director and Date of first appointment October 9, 2017 December 18, 2017
activities in CIS and maintaining Refining & Petrochemicals in Head of the Consumer, Retail and Pharma by the Board
effective customer relationships. Rosneft Oil Company. He was practice where she built the leading sector
Prior to that he has worked in earlier associated with Saratov franchise in both ECM and M&A. Prior to Shareholding in the Company Nil Nil
companies like Marc Rich A.G. Oil Refinery and Alliance Oil that, Ms. Cunningham held the position of Relationship with Not related Not related
(now Glencore International), Company. Vice-President in Deutsche Bank’s London- other directors, KMPs
Projector SA and TNK-BP at based Corporate Finance Group, focussing
various positions. on M&A advisory, IPOs, and leveraged and Number of meetings of the Board 6 out of 6 6 out of 6
structured finance. attended during the year

Terms and conditions Subject to retirement by rotation Subject to retirement by rotation Subject to retirement by rotation. Other directorships • Max Financial Services Limited • Tata Steel Limited
of • Cipla Limited • HCL Technologies Limited
Appointment / re- • LafargeHolcim Limited • Delivery Private Limited
appointment • Tata Steel Mineral Co Limited, Canada
Remuneration sought Sitting fees and remuneration / Sitting fees and remuneration / Sitting fees and remuneration / commission Chairmanship of committee of • Stakeholders Relationship Committee of Cipla • CSR and Sustainability Committee of Tata Steel
to be paid commission as may be approved commission as may be approved as may be approved by the Board from time other Boards Limited Limited
by the Board from time to time by the Board from time to time to time • Nomination & Remuneration Committee of Max • Stakeholders’ Committee of Tata Steel Limited
Remuneration last Sitting fees of ₹ 12,00,000 paid Sitting fees of ₹ 6,00,000 paid in Sitting fees of ₹ 10,00,000 paid in financial Financial Services Limited • Audit Committee of Delhivery Private Limited
drawn in financial year 2020-21. financial year 2020-21. year 2020-21. Membership of committee of • Audit Committee of Cipla Limited • Audit Committee of Tata Steel Limited
Date of first August 19, 2017 August 19, 2017 January 30, 2020 other Boards • Investment & Risk Management Committee of • Audit Committee of HCL Technologies Limited
appointment by the Cipla Limited • Risk Management Committee of HCL
Board • Audit Committee of Max Financial Services Technologies Limited
Limited
Shareholding in the Nil Nil Nil
• Health Safety and Sustainability Committee of
Company
LafargeHolcim Limited
Relationship with other Not related Not related Not related
directors, KMPs
Number of meetings 6 out of 6 6 out of 6 6 out of 6
of the Board attended
during the year
Other directorships Nil None in India None in India
Chairmanship of Nil None in India None in India
committee of
other Boards
Membership of Nil None in India None in India
committee of other
Boards

224 225
 Corporate Information

Registered Office Corporate Office

Khambhalia, Post Box No. 24, 5th Floor, Jet Airways Godrej BKC, Plot No. C-68,
District Devbhumi Dwarka, G-Block, Bandra Kurla Complex, Bandra East,
Gujarat 361305, India Mumbai - 400051, Maharashtra, India
T +91 2833 661444 I F +91 2833 662929 T: +91-22-66121800 | F : +91-22-26530264
Email: investors@nayaraenergy.com
Website: www.nayaraenergy.com Bankers
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ICICI Bank Limited
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Share Transfer Agents Karnataka Bank

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M/s Link Intime India Private Limited, India Infradebt Limited

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Unit: Nayara Energy Limited, C-101, 247 Park, IDBI Bank

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L.B.S. Marg, Vikhroli (West), Mumbai - 400083, Indusind Bank Limited

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Email: rnt.helpdesk@linkintime.co.in Citi Bank

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SMBC Bank
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HDFC Bank Limited
India Exim Bank

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