Nayara Energy (Formerly Essar Oil) Limited Unlisted Shares

Annual Report Summary

The Nayara Energy Limited Annual Report 2022-23 highlights the company's commitment to India's energy needs, energizing mobility, and empowering communities. Nayara Energy aims to actively participate in ensuring India's energy security, contributing ~8% of India's refining output.

Values: Nayara's core values are Energetic, Xtraordinary, Courageous, Ethical, and Lead (EXCEL), driving the company to shape tomorrow, seek better ways, succeed in a changing market, and act with integrity.

Corporate Portrait: Vadinar refinery is India's second largest single-site refinery, known for its safety, reliability, and efficiency and the company is committed to fueling India's growing energy demand by innovating and developing products our customers want. A phased asset development strategy into petrochemicals aims for crude to chemicals journey.

Financial & Operational Performance: In FY 2022-23, Nayara Energy procured 131.32 Mn bbl of crude, purchased 83.5 MMSCM of Natural Gas, and 1.938 MMT of Coal. The refinery achieved ~99.8% operational availability outside turnaround. Marketing efforts launched new products and achieved 12% ethanol blending to reduce CO₂e emissions. Petrochemical Phase-1 construction achieved 91% completion. The company facilitated 57,000 medical consultations and assisted over 4,000 farmers, reducing underweight children in the Dwarka region by 69%. Achieved 15 Mn safe man hours, with 5,500 LTI-free days at the Refinery. Multiple awards and recognitions were received.

Board's Report Highlights: The company's revenue from operations was ₹1,378,213 million (FY 21-22: ₹1,196,894 million). EBITDA was ₹183,112 million (FY 21-22: ₹50,675 million), with a profit after tax of ₹95,916 million (FY 21-22: ₹10,299 million).

Market Dynamics & Response: India's GDP grew by 3.4% in CY 2022. Nayara Energy manages its refinery in Vadinar, handling a diverse range of crude and the global oil and gas industry experienced high volatility in crude oil and finished product prices in FY 2022-23. Demand has surpassed pre-pandemic levels, and the company expanded its international customer and supplier base. India saw 4.8% growth in petroleum production, and 10.2% consumption growth.

Strategy in Action: The company prioritizes expanding its retail network and supports biofuel blending. The company also focus on performance with the plan to mitigate ~20,000 tCO2e annually by establishing a 10MW solar plant at Vadinar refinery and reduce ~730 tCO2e per year by scheduled commissioning a 500 kW captive solar power plant at our newly established rail-fed fuel depot in Pali, Rajasthan. As of 2022-23, over 1,000 retail outlets and two Nayara owned depots already have solar installations along with a planned pilot capacity of 10 MW solar generation at the Vadinar refinery. Return on capital employed was 43.25%, balance sheet was strengthened reducing debt.

Commitment to People, Safety, & Communities: TRIR of 0.09 was achieved, a goal was set to implement industry best practices in India, aiming to make a substantial impact on road transportation safety, while nearly 5,500 injury-free days were recorded for employees, encompassing over 55 million working hours. Actively translate words into action, actively promoting inclusive development through impactful programmes in key areas such as health and nutrition, education, and skill development, facilitated over 57,000 consultations through our Mobile Health Clinic (MHC) and Community Health Centre, spanning 15 villages in Jamnagar and Devbhumi Dwarka. Notably, 50,000+ forecourt salesman and communities were positively impacted.

Environmental Stewardship: 10% ethanol blending compliance in Motor Spirit (MS) and expanding green cover by 25% over the next three years, with 175 hectares of voluntary mangrove cover and also the company ensures that all site-related emissions from our refinery remain below the expected regulatory requirements.

Operational Focus: The refinery was completed in 29 days and operates under state-of-the-art facility. 97% of heavy and ultra-heavy crudes and produced 87% of high margin distillates processed. Production of domestic MS and HSD were at a record level in 2022-23. Retail network expanded to 6,300+ outlets with a focus on automation for future readiness, operating under the "In India, for India" mission.

Future Outlook: Focus to increase Retail Outlet network by 50% and foray into high growth petrochemical business with completion of Polypropylene unit.

The information provided gives shareholders an overview of Nayara Energy's achievements, challenges, and prospects for the future, emphasizing its role in India's energy landscape and its commitment to sustainable and inclusive growth. The report also details the company's financial performance, operational highlights, strategic initiatives, and corporate governance practices, ensuring transparency and accountability to its stakeholders.