Exploring Opportunities.

Energising Growth.
Annual Report and Accounts for the year ended
31 March 2013
An Independent E&P Company
ideally positioned to exploit
the increasing opportunities in
buoyant India & Myanmar.
With a balanced portfolio of oil
and gas assets in the proven and
prolific hydrocarbon basins
and a focused and aggressive work
programme, Jubilant is on the path
of exploiting them and energising
its growth story.

Jubilant’s portfolio comprises six key blocks of which five are in

India and one in Myanmar. One of these is a producing field,
one under appraisal, development and near term production,
one block with three notified discoveries and the rest of the
blocks are in various stages of appraisal and exploration.
 Overview 2
4
Jubilant’s Opportunities
Highlights and Outlook
6 Exploring Opportunities to go forward
8 Exploring Opportunities to build assets
10 Identifying opportunities in
macro-economic indicators
12 Perceiving opportunities in growing consumption
14 Investing in opportunities to maximise growth
18 Infrastructure
20 Large unexplored E&P basins
KEY ASSETS
22 Krishna-Godavari
24 Kharsang Field
26 Tripura
28 Manipur I & II
30 Myanmar

Business 32
36
Chairman and Co-Chairman’s Statement
From the CEO Committee
Review 44 Chief Financial Officer’s Statement
46 Board of Directors

Governance 48
52
Corporate Governance report
Remuneration report
55 Report of the Managing Directors

Financials 60
61
Independent Auditor’s Report
Consolidated Statement of Financial Position
62 Consolidated Statement of Comprehensive Income
63 Consolidated Statement of Changes in Equity
64 Consolidated Statement of Cash Flows
65 Notes to the Consolidated Financial Statements
118 Statement of Financial Position
119 Statement of Comprehensive Income
120 Statement of Changes in Equity
121 Statement of Cash Flows
122 Notes to the Company Financial Statements
131 Other information
132 Glossary
133 Company information
 Jubilant’s

With its focus on exploring the

unfolding opportunities in the oil
and gas sector, the Company is well
entrenched on the path to continuously
energise and maximise growth.

Our strategy is to take advantage of the macro trends and

supporting backdrop that are driving the demand for oil
and gas in India, these include:

3
2 Favourable
pricing regime

1
Macro-economics
Increasing demand
and supply gap
Gas demand in India
Recent events confirm
upward revision of gas
prices in the near term to
long term
is expected to almost
of India
double by 2020
India is one of the Source: MoPNG (XIIth Five Year Plan)
largest & fastest growing
economies in the world
with a GDP of USD 4.5
trillion on a PPP basis.
India’s GDP, on a PPP
basis has during 2008-12
grown at a CAGR of 8.6%
Source: WEO 2013

2 Jubilant Energy NV
 Overview
Business Review
Governance
Financials
5 Value enhancing
catalysts for Jubilant

4
Infrastructure
Large unexplored
E&P basins
Only 22% of India’s
sedimentary basins have
Balanced portfolio of assets
with significant upside
potential
Impressive Reserves and
The gas pipeline Resources
been moderate to well
infrastructure is said
explored Multi-pronged strategy
to almost double
Source: DGH to monetise
under the XIIth Five
Year Plan from the Expertise and extensive
existing 15,000 kms knowledge of Indian
Source: MoPNG (XIIth Five Year Plan) and South East Asian
Sedimentary Basins
Part of the Jubilant
Bhartia Group

Annual Report & Accounts 2013 3

 Highlights
Operating Revenues of USD 17.8 Government approval
million, an increase of 2.0% over the previous financial year for KG DDW extension
Average gross production of 1,968 area thereby increasing the mining
lease from 17 sq km to 37.5 sq km
bopd JO

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DOC proposal for Kathalchari
Average oil price realised over the year was USD discovery in Tripura and integrated
112.5 per barrel (premium to Brent) DOC proposal for DDE, DDN,
DDWDT and DDNE - BRU in KG
Raised rupee term loan equivalent submitted to Government of India.
A confirmation from the MC of
to USD 247 million to fund the appraisal the said DOC will take Jubilant one
and development of the Company’s KG Block and for the
repayment of existing term loan facility of USD 120 million step closer to converting the 2C
resources into 2P reserve category

Capital expenditure of over USD

Notification to the
90 million during the year, against USD 66 million in the
previous financial year Government of two
discoveries of potential commercial
interest in North Atharamura - I well on
Raised USD 22 million unsecured Atharamura Anticline which has an aerial
loans from Jubilant Bhartia Group extent of approx. 560 sq km

companies to fund operating activities and general

capital of the Company. Additional USD 20 million being Significant Reserves &
provided by the Jubilant Bhartia Group Companies
Resources including upgrade for KG,
Kharsang and Manipur Blocks
Facilities set up between 90-100% in t

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Successful
sectors such as power and fertiliser
seven-well Phase-III
development
Strategic entry into Myanmar programme in the Kharsang field with six
with the acquisition of a 77.5% Participating wells producing oil and the seventh is a
Interest as Operator in exploration Block PSC - I gas well

Rangarajan Committee Six infill well Phase-III

Recent events confirm upward revision of gas Extension programme underway in
prices in the near term to long term. Report Kharsang, three wells on production, one
indicates eventual gas on gas competition in under testing and one being drilled
pricing of natural gas

4 Jubilant Energy NV
 Outlook

Overview
First gas from DDW in KG Block targeted in
1 Q4 2013

Business Review
Approval of the proposed DoCs for Tripura
2 and KG, and submission of FDPs

Continue development drilling in DDW,

3 KG Block

Governance
Completion of six infill well Phase-III
4 Extension programme in Kharsang

Successful piloting of production

5 enhancement schemes in Kharsang and plan
for future rollout

Financials
Resources assessment in Myanmar and
6 upgrade in Tripura

Completion of 3D seismic processing

7 acquisition in Kharsang and continuing 2D
seismic acquisition in Manipur and Myanmar

Assessment of exploratory drilling

8 programme in Manipur and Myanmar

Continued drilling and testing in Tripura

9

Range of strategic options for medium to

10 long term funding

Annual Report & Accounts 2013 5

 Key Achievements & Going Forward
Jubilant Energy continued to be well on track of progress across its ongoing
projects during the year. DDW in the KG block is all set for completion of facilities
for first gas in Q4 2013.
The Company, while delivering on its strategic plans and timelines, also expanded its project portfolio into Myanmar
with the PSC-1 block, in line with its focus on exploring and identifying new opportunities not just within India but
also overseas, thereby opening new growth channels. With its balanced and diversified portfolio of high quality
assets, the Company remained committed to pursuing growth both organically and through acquisition.

Krishna
a Goda
avari (KG--OSN-2001/33)
Achievements Going Forward

Batch drilling of four development wells with a modular
rig underway. Out of the four wells two wells have
reached target depths


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modular rig
100 % completed. Sub-marine pipeline more than 62%
completed and is expected to be fully completed soon
The government has approved the extension of the
existing DDW development area of the block by 20.5 sq
kms increasing the total mining lease to 37.5 sq kms
2C Contingent Resources revised upwards by 11% for
gas and 10.2% for condensate
Integrated DOC proposal for DDE, DDN, DDW-DT and
DDNE-BRU submitted to DGH in February 2013
Implementation of Hydro-fracturing in DDW
development wells aimed at increasing the production.
Completion of drilling of development wells through
Facilities completion for first gas in Q4 2013
Re-entry and completion of old wells and new
development wells drilling to increase production
Approval of Integrated DOC proposal which will take
Jubilant one step closer to convert the 2C Resources to
2P Reserve category
Submission of Field Development Plan

Myan
nmarr (PSC-I)
Achievements
Strategic entry into Myanmar with the acquisition of a
77.5% PI as Operator in onshore exploration block PSC-I
Environmental Impact Assessment & Social Impact
Assessment study completed
2D Seismic Acquisition work awarded. Work
commenced
Interpretation of existing Geo-scientific , Well log and
Seismic data
First pass Prospects & Leads inventory
Going Forward
Acquisition & processing of new 2D seismic data
of 700 lkm
Reprocessing of existing 2D seismic data
Interpretation of existing reprocessed and new
processed 2D seismic data
Revision of Inventory Prospects & Lead Inventory
Drilling preparation of first exploratory well
Competent Person Report for Resource upgradation
assessment - work initiated

6 Jubilant Energy NV
Kharrsa
ang
g Fie
eld
Achievements Going Forward


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Completion of Phase III infill drilling campaign
drilled tested oil and have been put into production with comprising of six wells
initial rate of approximately 700 Bopd. The seventh well has
Processing and Interpretation of 3D seismic
tested gas and has been kept shut for future gas utilisation
data

Overview
Six infill well Phase III extension drilling campaign underway.
Piloting of additional production
Three well drilled and are producing about 220 Bopd. The
enhancement schemes and plan for future
fourth well is currently being tested and fifth under drilling
roll out
A very challenging, high fold 3D seismic survey successfully
Execution of GSPA followed by off-take of
completed & data processing initiated
gas by the buyer
Reserves and Resource Upgrade: Oil Reserves increased by
Static and Dynamic Modelling

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Business Review
Resources by 45% Preparation of Integrated Field Development
Plan
Piloting of production enhancement schemes commenced
Bids invited for sale of Associated Natural Gas being produced
from the field

Tripura
a (AAA-ONN--2002/1)

Achievements
Two appraisal wells drilled to appraise the Kathalchari
discovery. DOC proposal submitted to DGH on 28th
December 2012
Acquisition of 252 lkm appraisal and 125 lkm of exploration
2D seismic data
Two Wells Campaign in Phase II:
– First well M-1 drilling completed. The well tested gas
Governance
Going Forward
Approval of DOC for the Kathalchari discovery
FDP preparation for the Kathalchari field
Detailed NA-1 well test analysis, pressure
transient and reservoir limit studies
Phase-II Minimum Work Programme
Completion. Further drilling of well NA-1 to
unlock the deeper Renji exploration potential

Financials
through mini-DST with the AOFP of 4.2 MMscfd from the
Side tracking and Testing (mini-DST) of first
middle Bhubhan sand
exploration well M-1 drilled under Phase-II
– The drilling of the second well NA-1 over the Atharamura
Preparation, submission & approval of the
anticline is underway
appraisal plan of two discoveries over the
– Two gas discoveries of potential commercial interest made Atharamura anticline
in well NA-1 notified to DGH
Competent Person Report on Resource
– The middle Bhubhan shallow sand tested gas @ 1.7 upgradation assessment
MMscfd through 24/64” choke size

Manip
pur (""0//

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Achievements Going Forward

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Continue acquisition, processing &
Structural modelling, Petrographic & Biostratigraphic studies interpretation of 2D seismic data over
& Geochemical analyses completed prospective areas
The geochemical analysis suggest that the area could be oil Drilling preparation for the Parbaung,
prone as well Oinamlong, and Pherzwal wells
The FTG data was acquired over the two blocks. The
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processed & interpreted data has been integrated with the over Parbaung structure, subject to obtaining
existing geological model statutory clearances
Acquisition, processing and interpretation of 210 lkm of 2D
seismic data over the two blocks
Best estimates unrisked Prospective Resources upgrade from
4,770 bcf to 7,088 bcf
Well proposals for drilling five prospects submitted to DGH
for review

Annual Report & Accounts 2013 7

 Key Assets: Reserves & Resources
With its principal strategy to create sustainable shareholder value,
Jubilant Energy continues to build and exploit its diverse portfolio of
exploration, development and producing oil and gas assets.
Through focused and economical appraisal and development, the Company seeks to monetise the value
of its Reserves and convert its Resources to Reserves. Its business philosophy is aimed at maximising the
potential of its producing assets and utilising this knowledge across its other assets, as well as maximising
the potential of its existing appraisal and exploration assets.

Currently, the Company has 2P Reserves networking interest of 33.02 MMboe, contingent 2C Resources
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2 MMboe. With significant resources still classified as 2C, pending FDP submission and approval, the
Company’s 2P Reserves are all set to increase substantially in the future.

Reserves (2P) Contingent Resources (2C)

Gas (bcf) Liquids (mmbbls) Total (MMboe) Gas Liquids Total
KG 161.2 3.2  (bcf) (mmbbls) (MMboe)

Kharsang - 1.1 1.1* KG  12.6 

Total 161.2 4.3 33.02 Kharsang  0.8 2

Tripura 228 40.6

Net Best Estimate Prospective Resources# Total 834.8 13.4 162
( 9 best prospects/leads)
Best Estimate Prospective Resources
Prospect/Lead Name (tcf) (MMboe) GCoS Range (unrisked)
Oinamlong (Manipur)

407 15% - 20% Gas Liquids Total
Parbung (Manipur) 1.77 316 17% - 18% (bcf) (mmbbls) (MMboe)

Kharkublen (Manipur) 1.28 228 13% - 18% KG 527.8 

Pherzawl (Manipur) 0.82 146 13% - 16% Kharsang 
3.1 20.8
DDNE - BRU Rift fill (KG) 0.45 80 40%
Tripura 762.4 135.7
South Songsang (Manipur) 0.44 77 8%
Manipur 7,088.00 1,261.70
North Atharamura (Tripura) 0.37 66 13%-18%
Songtal (Manipur) 0.35 62 8%-10% Myanmar 2,186.10 108.0 

Kushirapa (Tripura) 0.26 46 11%-15% Total 10,663.8 111.1  

(1) 2P Reserves and 2C Resources are on Net Working Internet basis

(2) Reserves and Resources for Manipur & KG- certified by GCA as of 31 March 2012 & in respect of Kharsang as of 31 December 2011
(3) Jubilant conversion factor 1 tcf = 178 MMboe
(4) Tripura and Myanmar resources are as per Management Estimates
* Reserves on 31st Dec, 2011 adjusted for production at Kharsang field during Jan 2012-March 2013
# Prospect aggregate Resources of multiple horizons

8 Jubilant Energy NV
 Myanmar
497.1
2,200

2P 2C P50 Manipur
1261.7
1700

Overview
500 Tripura
135.71

Business Review
400
KG
93.95
300
Kharsang
Tripura 20.8
200 KG 40.6
119.36

100 Kharsang
KG
31.91 2.02
Kharsang
1.11*
0

Governance
Per CPR 2P 2C P50 (Best Estimate unrisked Prospective Resources)
Mmboe 33.02 162 2009.2
Reserves and Resources for Manipur & KG- certified by GCA as of 31 March 2012 & in respect of Kharsang as of 31 December 2011
*Reserves on 31st December 2011 adjusted for production at Kharsang field during Jan 2012-Mar 2013
Tripura and Myanmar resources are as per Management Estimates

Financials
As Jubilant Energy continues to identify
unexplored opportunities, it is well placed to
further developing its assets base, thereby
enhancing value for itself and all its stakeholders.

NON OPERATED ASSET

& JUBILANT INTEREST

OPERATED ASSET & KHARSANG

JUBILANT INTEREST
25%
MANIPUR- I&II
100%
TRIPURA
20%

SANAND MIROLI
20%

PSC-1 MYANMAR
77.5%
KRISHNA - GODAVARI
10%

Annual Report & Accounts 2013 9

 Macro-economics of India – Favouring Growth Potential
With a favourable domestic macro-economic environment and a bright
outlook, India offers a significant demand for oil and natural gas.
Despite a slowdown of the Indian economy for the second consecutive year during 2012-13, the outlook
for the coming year appears bright on the back of a positive external demand outlook and the movement
for domestic structural reforms. The recent reform measures initiated by the government are expected
to catalyse growth in the medium to long term, with the energy sector, in particular, showing immense
potential, especially in the under-explored oil and gas basins within India.

Jubilant Energy continues to identify and leverage this potential to chart a success charter for the future.

billiion trilliion per annum

India is the world’s largest With an estimated GDP of approximately Indian economy grew at
democracy with a population 64
USJMMJPO
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NBLFT
an annual rate of approx.
of 1.2 billion in 2012 it the 3rd largest economy in the world 7% since 2000 and proved
Source: World Bank after the United States and China in relatively resilient to 2008
purchasing power parity (“PPP”) basis global financial crisis
Source: World Bank Source: EIA

GDP (PPP) CAGR 2008-12


2.4%

1.6%

8.6%

2.2%

12.0%

With energy consumption directly

10.0% linked to GDP growth, India‘s long term
economic growth has led to increasing
primary energy consumption, with
8.0%
recent growth of 6% CAGR from 2007
to 2012. India has, in fact, surpassed
6.0%
Japan to become the world‘s 4th
largest consumer of energy, behind
4.0% the United States, China and Russia,
with primary energy consumption
2.0% reaching 4,130 MMboe/yr in 2012. But
its per capita energy consumption
0.0%
remains lower than that of
developed countries.
United
States
China

Japan

India

Germany

Source : BP Statistical Review of World Energy, June 2013

: WEO

10 Jubilant Energy NV
According to the EIA, India became the world’s sixth largest liquefied natural gas importer in
2011. Indian companies have begun investing in new re-gasification facilities to meet rising
demand.
Overall, the long term prospects for energy consumption in India are very positive.
With India expected to have the world‘s second highest rate of GDP CAGR of 5.5% during
2008 – 2035, just behind that of China, India’s primary energy consumption is expected to

Overview
continue to increase dramatically over the coming decades, with rapid urbanisation
and changing demographic patterns further pushing demand for energy.

Business Review
Governance
Financials
Energy Consumption Levels
Top 5 primary energy consuming countries in 2012 Per capita energy consumption in 2012
52

37

28

24

15

10

Energy Units
 

 

60
5,088

4,130

3,505

Energy Units in boe

in MMboe
25,000
50

20,000
40

15,000
30

10,000
20

5,000 10

0 0
United
States
Russia

Japan
UK
China

Brazil

India
China
United
States

Russia

India

Japan

Source: BP Statistical Review of World Energy, June 2013

World Bank

Annual Report & Accounts 2013 11

 Demand-Supply Gap – Paving the Way for Greater Consumption of LNG

Acco
ord
ding
g to the 12th Five--year Plan (20
012
2-17)), thee
As per Central Electricity Authority (CEA) data,
demannd for gas will inccreasse
the total gas-based capacity in the country is about
to 371 MMscmd in 2013-14 20,109 MW. On account of the continuing decline in
domestic gas production, the CEA has reduced gas-
from
m based power generation target for the current year
293 MMscmd in 2012-13 by almost 46 percent

By 20
016-1
17, this is expeecteed to grow According to industry officials, the domestic output
has stagnated in absence of remunerative prices
to 473 MMscmd

t


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output stagnating, India is set to become a net
importer of natural gas in coming years, with
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Liquefied natural gas imports constituted

29% of the total consumption of the fuel in the
country in 2011-12. This share will rise to
FY 12 FY 14 FY 17 46% in 2016-17, as per available data
Source: MoPNG

For a nation whose current account deficit is already

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oil needs, increasing the share of LNG in the energy
29% 42% 46% mix will further worsen the situation

Liqu
uefieed Natu ural Gas
s con
nsumption over
total fue
el co
onsumption in th
he country
Source: MoPNG

12 Jubilant Energy NV
 Overview
Business Review
2%

2%
India‘s economic growth has led to
1%
primary energy consumption growth at a 7%
CAGR of 6% from 2007 to 2012 25%

Governance
30%
51%
Crude oil and natural gas contributed 53%
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consumption in 2012, which is low as  20%
compared to global standards where oil
and gas contributed c.57% of the total
energy consumption
Source: BP Statistical Review of World Energy, June 2013 2011-12 2024-25
Coal Nuclear Renewables Oil Natural Gas

Financials
INDIA’S PRIMARY ENERGY CONSUMPTION MIX

Increasing LNG Imports for Gas Supply

The increasing demand-supply imbalance indicates that both in the short and long term, India’s LNG import
requirements are expected to increase with LNG forming a significant share of total gas supply
India began importing LNG in 2004 and in FY 2012 it imported c.1.3 bscfd of LNG, mainly from Qatar
1.3

3.6

5.5







10.0

43 44 46
8.0 5%
- 21.
GR
% Share

Volume in bscfd

74 60 53
CA
6 6 6.0
5

4.0
51 50 

2.0
26 40 47

0.0
FY 12A
FY 12A

FY 14E

FY 16E

FY 18E

FY 20E

FY 22E
FY 14E

FY 16E

FY 18E

FY 20E

FY 22E

Financial Years Financial Years

Source: Infraline LNG import Pipeline import Domestic supply

Annual Report & Accounts 2013 13

 Favourable Pricing Regime – Signs of Positive Change

The C
Cabinet Committee on Economic Affairs (CCEA) on June 27,
2013 approved Oil Ministry’s proposal to price all domestically
produced natural gas in India as per the formula suggested by
produ
Rangarajan committee.
the Ra
The app
approved policy derives the competitive price of gas at the global level by taking a
simple aaverage of the following:

tt
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netback imported LNG price.
net

These gguidelines will be applicable from April 1, 2014 to all domestically produced gas in
including CBM and shale gas. The pricing guidelines will remain valid for five years,
India inc
price determination on quarterly basis. This should help incentivize investment in
with pri
Indian upstream sector, so that production reaches optimum levels and all exploitable
the Indi
reserves are put to production expeditiously.

Various analysts have estimated the gas price to be initially around USD 8 per MMBtu in
April 20
2014 from the prevailing USD (2.52 - 6.2) per MMBtu.

14 Jubilant Energy NV
Current Gas Pricing Regime

4.2-5.3

4.8-6.2

12.0

13.0



13.0

14.2

16.0

2.5

4.2

4.2

4.3

5.7
18

Overview
16
g
ricin
in p
on
14
re visi
ard
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12 Case f
NNCUV

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10

Governance
0
NOCs NOCs NOCs RIL Ravva Lakshmi PMT RR Gas from TAPI RIL RasGas GSPC Gorgon
APM APM Non KG D6* Satellite / Gauri Committee USA at Gas CBM PLL Discovered Kochi
(North APM Indicative Henry Hub Contract Price LNG
East) Price# Price Contract

Source: Infraline, Jubilant

*Current contract expires in March 2014
#
Analysts’ view, based on various volume and price assumptions

Financials
Gas pricin
ng in
n In
ndiia
India currently has 15 different producer rates “Natural gas prices must be determined by market
ranging from USD 2.52 per MMbtu to USD forces,” the XIIth Five Year (2012-17) Plan document
6.2 per MMbtu for natural gas produced from
domestic fields. The highest rate is roughly half “Sub-market pricing encourages inefficient
the rate at which the nation imports gas in ships consumption and shift of exploration and
in its liquid form (LNG) production investment outside India.”
– Association of Oil & Gas Operators, India
Besides approving price, the government also
fixes gas users and allocates quantities, creating The Rangarajan Committee mentions gas on gas
hurdles to gas market development competition as a desired objective in 5 years time
frame
Gas-starved India pays a spot price of about
$15-18 per MMbtu for liquefied natural gas

India will pay close to $13 per MMbtu for

natural gas it will buy from Turkmenistan
through a pipeline passing through Afghanistan
and Pakistan

Annual Report & Accounts 2013 15

 Signs of change
April 1, 2014 could see the gas price from the Reliance Industries-operated D6 block to be in the range of
USD 8 per MMbtu, following the CCEA approval in June 2013 on the proposal from the oil ministry to price all
domestically produced natural gas in India as per the formula suggested by the Rangarajan Committee
Gujarat State Petroleum Corporation Limited has found many buyers willing to pay a rate of USD 14.2 per
MMbtu equivalent to what India pays to Qatar for importing gas in its liquid form (LNG). This is however subject
to Government approval. This demonstrates depth in the market. The final price approval expected in line with
the Rangarajan Committee recommendations

1 Natural Gas is the fastest growing primary 5 The CCEA on June 27, 2013 approved Oil
energy fuel and its share as a percentage of Ministry’s proposal to price all domestically
primary energy is expected to increase from the produced natural gas in India as per the formula
2012 level of 9% to c. 20.0% by 2025 suggested by Rangarajan committee.

The approved recommendations will remain

2 Continuing demand-supply imbalance for gas
is leading to heavy imports of expensive LNG.
Share of LNG of the total natural gas supply is
expected to increase from current 29% to 46%
in 2016-17
3 Gas pricing has undergone a sea change from
being fixed by the government to greater market
linked mechanism under PSC which enables
contractors to establish the market price for
gas (from the NELP fields) via a price discovery
mechanism conducted on arms length basis
4 The industry is pushing for reforms to link
domestic gas prices to imported LNG prices.
The most competitive long-term LNG contract
PG
1--
SFTVMUT
JO
BQQSPY

QFS
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QSJDF

for consumers, while spot LNG prices are
BSPVOE

QFS
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valid for five years, with price determination to
be done on a quarterly basis. These guidelines
will be applicable from April 1, 2014 to all
domestically produced gas including APM.
These guidelines should help incentivize
investment in the Indian upstream sector, so
that production reaches optimum levels and
all exploitable reserves are put to production
expeditiously.
6 GSPC price discovery process for 5.24 MMscmd
of natural gas from DDW withnessed a clearing
QSJDF
PG

QFS
..CUV

DPNQBOJFT
UPPL

part in the price discovery process, 53 bids were
submitted for a total volume of 70 mmscmd of
natural gas. The price is subject
to Government approval. This
demonstrates depth in the
market. The final price approval
expected in line with the
Rangarajan Committee
recommendations

16 Jubilant Energy NV
Change in pricin
ng & inv
vestmen
nt po
olicy to
boost invesstmen
nt
Setting international pricing benchmark

Overview
The approved guidelines by CCEA on the formula recommended by the Rangarajan committee for gas
pricing will encourage investors to intensify their efforts in exploration and development activities in
India when the country is facing scarcity of domestic energy resources.

Based on the said guidelines, various analysts have estimated the gas price to be initially around USD 8
per MMBtu in April 2014 from the prevailing USD (2.52 – 6.2) per MMbtu.

Business Review
Alignment of gas price in India with global market levels, is a positive move and should boost both the
interest and investment in the gas sector in India.

Governance
The new investment policy announced by the
Union Government may result in substantial
urea capacity addition in the next three to four
years. As per the policy, the floor prices of

Financials
urea increase are in line with the gas price of
USD 14 per MMbtu. If the gas price crosses
USD 14 per MMbtu, urea producers are to be
reimbursed the gas cost as per the new policy

The new policy is in line with the demand of

the industry to do away with the gas price
ceiling of USD 14 per MMbtu in the earlier
proposed policy

India currently consumes 29 million tonnes of

urea, while the domestic production stands at
22 million tones, leading to import of about
seven million tonnes

Annual Report & Accounts 2013 17

 With new gas supplies emerging in India, significant infrastructure
development and improvement is needed to support the same. Jubilant
Energy, which has a balanced and diversified portfolio of oil and gas
assets in various phases – production, development, exploration, is well
positioned to expand its presence in the proven and prolific hydrocarbon
basins of India following further development and strengthening of the
country’s infrastructural network.

The Indian government has earmarked

USD five billion in the pipeline & terminal
sector in the Hydrocarbon Vision 2025, to
meet the country’s
y growing
g g energy
gy demand.

The pipeline infrastructure is in fact

slated to almost double under the
XIIth Five Year Plan from the existing
~15,000 kms.

The RLNG capacity is also set to witness

a major increase, from the current
~18.6 MMTPA to reach ~50 MMTPA
by 2016-17.
Source: MoPNG (XIIth Five Year Plan)

18 Jubilant Energy NV
 Overview
SRINAGAR
JAMMU

KATHUA

Pipeline in
LUDHIANA NANGAL NE Region
BHATINDA

Business Review
PANIPAT
ASSAM P/L NETWORK
HISAR DADRI
JHAJJAR BAREILLY
GSPC MUNDRA JAISALMER
JAGDISHPUR GUWAHATI
LNG TERMINAL JODHPUR
by 2016 BHILWARA DISPUR
PATNA North
(5 MMTPA) KOTA PHOOLPUR BARAUNI
UDAIPUR East P/L
BHUJMEHSANA PALANPUR VIJAIPUR GAYA
DURGAPUR AGARTALA P/L

Governance
CHOTILA
BHOPAL NETWORK
HOWRAH
JAMNAGAR RAJKOT BHARUCH HALDIA
ANKLESHWAR
HALDIA PORT
SURAT
PETRONET LNG- NAGPUR LNG TERMINAL
DAHEJ TERMINAL PANVEL (2.5 MMTPA)
(10 MMTPA) URAN PARADEEP

SHELL HAZIRA OSMANABAD

LNG TERMINAL DABHOL

Financials
(3.6 MMTPA) KAKINADA MALAVARAM
GOKAK KG Basin
DABHOL LNG GOA Existing Pipelines
TERMINAL Kakinada
NELLORE
(5 MMTPA) LNG Terminal Under Execution Pipelines
(2.5 MMTPA)
MANGALORE BANGALORE
CHENNAI ENNORE PORT Proposed Pipelines
KASARGOD
LTD
KANNUR SALEM Existing LNG Terminal
LNG TERMINAL
MALAPURAM (5 MMTPA)
PALAKKAD
KANJIRKOD Upcoming LNG Terminal
KOCHI
PETRONET LNG
Proposed LNG Terminal
KOCHI TERMINAL TUTICORIN
by end 2013 Not to scale
(5 MMTPA) Pipeline routes are indicative in nature

Source: PNGRB

Large-scale infrastructure development will give

a major boost to the Company, whose core assets
are located near essential pipelines, to leverage
the immense opportunities in oil and gas to its
advantage.

Annual Report & Accounts 2013 19

 The large number of unexplored basins and proactive Government
policies for exploring them offer significant opportunities.

Jubila
antt Ene
ergy is well posittione
ed to maximise the
e pote
ential
India has approximately 3.14 million sq km of sedimentary area over 26 basins. 78% of this has not been
extensively explored leaving a huge area which could contain hydrocarbons and offer significant future
opportunities. With highly evolved NELP licencing rounds, which provide a level playing field and the
expected introduction of the Open Acreage Licensing Policy in future, Jubilant has significant opportunities
to gain further domestic acreage in near future.

Ind
diaa’s seedim
mentaryy arrea: Aboutt
3.14 million sq kms in 260 petroleum
26 basins Exploration leases
sedimentary area in India
is still not extensively Deeep water: covvering
g
explored 1.35 million sq kms 1.06 million sq kms
area under 18 basins
Onla
and and shaallo
ow offssho
ore: Jubilant’s existing blocks are in
1.79 million sq kms proven petroliferous basins

20 Jubilant Energy NV
Sedimentary basins of India

Overview
Business Review
Basins with Commercial Production:
t
.VNCBJ
0GGTIPSF
t
"TTBN

Proven
Producing t
,SJTIOB(PEBWBSJ
t
$BNCBZ
t
$BVWFSZ
t
#BSNFS
Basins with discoveries and known

Governance
occurrences of oil & gas (from tests,
Immature MDTs & logs) but no/insignificant
commercial production
Immature basins with no significant

Prospective
oil & gas shows but having
evidence of working petroleum
Immature systems. Geologically considered
prospective.

Basins with uncertain potential

which require more data to be
Frontier classified.

Financials
12%
Exploration initiated
22%
Unexplored

Moderate to well explored

Poorly explored
44% 22%

Proactive Government Policies

/&-1
JOUSPEVDUJPO
JO

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QMBZJOH

field for private players

FY 2011-12
Source: DGH

Unexplorred basinns and

d prooactive policies…
…
…significcantt oppo
ortunitiess

Annual Report & Accounts 2013 21

 KG-OSN-2001/3

Key facts:
Jubilannt’ss Paarticip
patin nteresst: 10%
ng In
Opeeraator: GSPCLL - 80%

Gross Reserves/Resources
– 2P reserves of 1,612 bcf of gas
and 32.2
2 MM
Mbblls off condenssate
– 2C of 5,999 bcf of gas
and 125.7 MMbb
bls of co
onden
nsatee
In
nte
ere
estt
– Beestt esstim
mate of un
n-rissked Prosp
pecctive
Resoourcees of 5,278 bcf of gas Near term Production - First gas in Q4 2013

Deen Dayal West Offshore Complex

PLQP

WHP

The KG Block is located offshore

along the east coast of the state of
Andhra Pradesh in South Eastern India
in the Krishna-Godavari Basin. The
block, presently having a appraisal &
development area of 530.5 sq km,
continues to be the most significant asset
in the Jubilant portfolio. Out of this,
presently only 17 sq kms in DDW is under
Fire Boom development. The Krishna-Godavari Basin
is credited with many of India’s recent
significant oil and gas discoveries.
22 Jubilant Energy NV
Jubilant has a 10% Participating Interest in the

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KG Block and actively participates in technical
evaluations as a non-operating partner along
with the operator, Gujarat State Petroleum
Corporation Limited (“GSPCL”), promoted by the
State Government of Gujarat, which holds 80%
Participating Interest. The remaining Participating
Interest is held by GGR. The consortium has drilled
13 exploratory and five appraisal wells in the
block. Of the 13 exploratory wells, nine were
successful discoveries.
The Ministry of Petroleum and Natural Gas of the
Government of India (“MoPNG”) had approved an
extension of 20.5 sq kms to the existing contract
area for the Krishna-Godavari in January 2012,
thereby increasing the approved mining lease area
for Deen Dayal West from 17 sq kms to a total of
37.5 sq kms.
Gaffney, Cline & Associates (“GCA”) prepared a
Reserves & Resources Update for the Deen Dayal
Structural complex as of 31 May 2012, post the
approval of the DDW Extension area and the drilling
of the appraisal wells in the DDE area. The Gross
Contingent Resources (2C) for the block has been
revised upwards by approximately 11% for gas
and 10.2% for condensate over the estimates

MPDBUFE
BQQSPYJNBUFMZ

of 30 June 2010. The Gross 2P gas reserves have
been estimated at 1612 bcf and 32.2 MMbbls of
condensate, while the Gross Contingent Resources
(2C) estimates are 5,999 bcf for gas and 125.7
MMbbls of condensate. The Best Estimate
Un-risked Prospective Resources are at 5.27 tcf.
The development of the Deen Dayal West Field
(“DDW”) is expected to produce first gas in Q4
2013 and based on the initial results of the same,

,(
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,(44
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the consortium plans to submit an addendum to
the DDW FDP to include the DDW extension area.
Based on the approval of the DDW extension area
of 20.5 sq kms, the revised CPR has considered
a 2C Resources of 1.11 tcf of gas and 22.2
MMbbls of condensate in this mining lease area.
Current activities include fabricating onshore and
offshore gas processing facilities, and the ongoing
completion of four batch drilled development
wells with a modular rig. The status of the drilling
of the four wells as at May 2013 is given below:
Aerial View of Onshore Gas Terminal

DDW-D1
(upto Targeted Depth “TD”)
DDW-D2 5,546 metres MD (in 8 ½” hole section)
DDW-D3 5,272 metres MD (upto TD)
DDW-D4 4,200 m MD (up to 12 ¼”)
The implementation of Hydrofrac activites in
Overview
DDW wells to be carried out for increasing
production. Facilities set-up is on target for
first gas, with 90-100% completion achieved
in most cases. The submarine pipeline has
achieved a completion of more than 62% and
is expected to be completed soon.
Business Review
The completion status of the various facilities is
given aside: WHP – 96.7%, PLQP – 96.9%, Gas
Turbine – 100%, OGT – 92.5% and Submarine
Pipeline – 62.1%.
The Well Head Platform was set up in May 2011
and the batch drilling of four development wells
commenced in September 2011. The Onshore Gas
Terminal (OGT) is being developed to process the
Governance
multiphase dehydrated fluid being received from
the offshore process platform (PLQP) to meet the
specifications of gas sales. The OGT facility is being
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PWFS
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IFDUBSF
QMPU
3.5 kms west of the shore line in Mallavaram
village. The plant facilities are spread over 48.7
hectares and a green belt development is to be
taken up over 20.3 hectares.
Financials
Based on the appraisal programme, an integrated
Declaration of Commerciality (“DOC”) proposal for the
six natural gas discoveries within the block, namely,
KG-16 in DDE area, KG-22 in DDN area, KG-21 & KG-

JO
%%8%5
BSFB
area, has been submitted to the Directorate General of
Hydrocarbons, India on 15 February 2013.
This submission has been supported by all
necessary technical and economic data, evaluation,
interpretation and analysis, as well as feasibility
studies relating to the discoveries and other
relevant information.
The approval from the management committee
of the said DOC will take Jubilant one step closer
to converting the 2C Resources into 2P Reserves
category.
Annual Report & Accounts 2013 23
 Kharsang Field

Key facts:
Jub
bilaant’s Particcip
patin nterresst: 25%
ng In
Operrattorr: GeeoEnpro o - 10%

Gross Reserves/
Resources
– 2PP Resservves of 4.4 MMbbls of oil
(Afteer ad
djustted fo
or prrodu
uction
n till March 2013))

– 2C 27.7 bcf of gas and

C Ressourrces of
3 MMbbls of oil In
nte
ere
estt
– Beestt esstimaate of un
n-rissked Prosp
pecctivve
Producing Asset
ourcees off 398
Reso bcf of gas and
12.5 MMbbls of oil
– Cu
umulativve pro
oducttion
n till March 2013 is
10.84 MMbbls

Kharsang Field Production History The Kharsang block is located in the Upper
Separated by Reservoir Groups
2500
Assam basin in the north-eastern region of
2000
India, which contains some of India’s largest
Oil Production Rate (BOPD)

1500 producing oil fields. This is the Company’s

1000 oldest block and has been in production
500
since 1983. A total of 68 wells have been
0
drilled in the field to date, of which 33 are
Jan-81
Jan-82
Jan-83
Jan-84
Jan-85
Jan-86
Jan-87
Jan-88
+BO
+BO
+BO
+BO
+BO
+BO
+BO
+BO
+BO
+BO
+BO
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
+BO
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14

currently producing.
Total Field Production A-D Production A-D Production J-P Production Q-T Production

Kharsang Field - C-50 Layer structure contour truncated against Namsang- Girujan Unconformity

24 Jubilant Energy NV
The Kharsang licence covers an area of
approximately ten sq kms. Jubilant has a 25%
interest in the block and is operated by Geo Enpro
Petroleum Ltd.
The consortium recently concluded a successful
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six of the seven wells have tested oil and have been
put on production, initially contributing approximately
700 bopd. The remaining well tested gas and has
been shut down for future gas utilisation, as it is
commercially viable.
In a landmark achievement, the field, which is
currently producing in excess of 2,000 bopd,
reported its highest ever recorded production
of 2,253 barrels of oil on 23 October, 2012. The
cumulative oil production till March 2013 was
10.84 MMbbls and the remaining oil reserves
stood at 4.4 MMbbls.
Consequent to the Phase III development drilling
programme, and in line with the Company’s strategy to
maximise the potential of its producing assets, a Phase
III Extension Development drilling plan comprising six
infill wells commenced in February 2013, aimed at
further adding to the production profile of Kharsang
field. Three wells in this campaign have already been
on production and the fourth is currently under drilling.
The acquisition of 3D seismic survey in the field
has been completed and processing initiated. The
survey will provide better subsurface imaging and
understanding of remaining potential hydrocarbon
zones in the field at various levels.
The consortium is also piloting various other
projects in order to increase the production from
the Kharsang field, such as Sand Control, Wax
Inhibition Multi-Zone Single String and Dual String
Completion and Gas Lifting Using CNG.
A Reserves and Resources Estimation was prepared
Overview
by GCA as on 31 December 2011, updating its
earlier estimate as of June 30, 2010. The highlights
of the reserves and resources update are:
Gross Reserves increased by 9.5% to 4.44
MMbbls, after adjusting for production till
March 2013
Business Review
Gross Contingent gas resources ranges from
15.9 bcf to 43.5 bcf, with 2C gas resources at
27.7 bcf, increase of 45%
Gross Contingent oil resources range from
2.47 MMbbls to 3.85 MMbbls, with a 2C Oil
resource of 3.13 MMbbls, an increase of 286%
Significant exploration upside - Best Estimate
Governance
Gross Un-risked Prospective Resources:
t
Namssangg Oil Prospeccts: 2.6 MMbbls with
GCoS of 75%
t
Loweer Giirujan Oil Pro
ospe
ects: 9.9 MMbbls
with GCoS of 50%
t
Loweer Giirujan Gas Prosp
pect: 102 Bscf
with GCoS of 50%
Financials
t
Tipam
m Ga
as Prosspect: 296 Bscf with GCoS
of 50%
Annual Report & Accounts 2013 25
 AA-ONN-2002/1

Key facts:
Jubbilaantt’s Partiicipaating
g
Inttere Opeeraator) : 20%
estt (O
GAIL - 80%
Gross Reserves
/Resources
C gaas of 1146
– 2C bcf*
– Beest estim
mate
e un
n-rissked Prosspecctivee
Reesou es of 3812 bcf*
urce
– Co
ompeteent Perso on Repo
ort forr Reso ource
e In
nte
ere
estt
up
pgraadattion asseessm
mentt inittiaateed
* As per Management Estimate
Op
perattor: Ju
ubilant

The Tripura Block is located onshore in the fold belt

area of the Assam-Arakan Basin in northeastern
India in the State of Tripura. The Assam-Arakan
Basin is India’s oldest producing basin and contains
some of India’s largest producing fields such as
Nahorkatiya, Lakwa, Moran and Digboi. The first
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The hydrocarbon province of the Tripura Block
extends into Bangladesh. Regionally, the area tends
to be gas-prone and there are several examples of
local multi-Tcf gas fields.

International_Boundary
Proposed Development Area
AA-ONN-2002/1
Existing Seismic Line
Geological Map
Girujan
Tipam
Bokabil
Upper Bhuban

26 Jubilant Energy NV
Jubilant has a 20% Participating Interest and is N. Atharamura-1:
the operator of the Tripura Block. GAIL holds the Seismic-Geological Interpretation
remaining 80%. The present block area, net of
relinquishment, is 1,260 sq kms and is located
east of ONGC’s Baramura gas field and adjacent
to the ONGC’s TMD-1 gas discovery to the east.

Three exploration wells were drilled in the Phase

Overview
I exploration programme. Two of the three
wells, viz., Kathalchari-1 and Ambasa North,
were declared as discovery wells. Two appraisal
wells, Srikantabari-1 (SK-A1) and KL-NE were
drilled to appraise the Kathalchari-1 discovery.
The Company submitted the DOC proposal for

Business Review
the Kathalchari discovery after incorporating the
results of the wells drilled in the Tulamura anticline
(Srikantabari-1, KL-NE and Matabari-1).

Jubilant entered the Phase II exploration

programme and drilled Matabari-1 in
the Tulamura anticline. Matabari-1 well
Interpretation: TRJ-05A
was spudded in May 2012 to explore the
hydrocarbon potential of the Lower Miocene

Governance
Lower Bhuban and Late Oligocene Renji
sands as primary objectives, and the Middle
Bhuban sands as a secondary objective. This
was the first exploratory well in the block
targeting deeper objectives beyond the
Middle Bhuban.

A second deeper exploration well to complete

the Phase II Minimum Work Programme, North

Financials
Atharamura-1 on the Atharamura Anticline,
was spudded in February 2013 and drilled to a
depth of 3,400 meters.Based on the available t

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145.
TFJTNJD
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information from drilling, mud logs and wire-line surface geological dips
open-hole and cased-hole data, two Objects were t

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selected for conventional testing to establish the from KL-1 towards SK-A1 and TMD-1
presence of producible Non Associated Natural
Gas. A Notice of Discovery in the Lower Bhuban
formation in the North Atharamura-1 well for the Gas Flare at North Atharamura during testing
HSPTT
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Depth (“MD”) (“Object-I”: perforated zone -
 

 
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May 2013. Subsequently a Notice of Discovery
for gross Middle Bhuban sand package in the
610-635 metres MD interval (Object-II: perforated
zone - 610-625 metres) was submitted on 3rd
June 2013. The zone tested 1.7 MMscfd of gas
through 24/64” choke size.

This is the first well on the Atharamura Anticline

which has an aerial extent of ~ 560 sq. km. in the
block

Acquisition of 252 lkm appraisal seismic and 125

lkm exploration seismic has also been completed.

Annual Report & Accounts 2013 27

 Key facts:
Jubbilaantt’s Particcipaatin
ng
Inttereestt (Opperaator)) : 100%

Gross Reserves/Resources
– Beest estim
matee un
n-rissked Pro
osp
pectivee
Resouurcces of 7,088 bcf off gas

In
ntere
estt
The two Manipur Blocks, AA-
Op
perattor: Ju
ubilant
0//


BSF
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JO
UIF

eastern extension of the Burma-
Assam-Arakan fold thrust belt, which
covers almost 4,000 sq kms. The
Banskandi gas field and the Badarpur
oil field lie approximately 45 km
and 70 km, respectively, west of
the Manipur Blocks. The petroleum
system in Manipur is an extension
of the proven petroleum systems of
Bangladesh and Tripura-Cachar areas.
Jubilant holds 100% Participating
Interest in both the blocks.

Upper Eocene and Oligocene shales, with good

source potential (Type II/III kerogens), outcrop to
the east and north of the block. Exploration will be
focused on the Miocene and Oligocene reservoir
targets, which have been productive in the region.
Seal is provided by younger Miocene shales.

Jubilant embarked upon a 2D seismic acquisition

programme of 540 lkms in the two Manipur blocks.
Jubilant contracted Bell Industries to undertake
a 5,273 lkm airborne full tensor gradiometer
survey and this was completed in November 2011.
This survey was the first of its kind in India, and
processing and interpretation of the resultant data
was completed in mid-April 2012.The data is now
being integrated with the current geological dataset.

28 Jubilant Energy NV
 Stratigraphic and structural Renji Sandstone Outcrop at Nungba
understanding is reasonably
well established from recently
conducted surface geologic
mapping, gravity / magnetic
/ aeromagnetic surveys and
structural modelling. A number

Overview
of drilling locations have been
scouted within the two blocks,
and the recent technical work
has led to the identification
of three prospects which will be
targeted for initial drilling based on

Business Review
remote sensing data and field work.
Seismo - Geological Section
Seven long and narrow double-plunging folds
NNE-SSW trending surface anticlines have been
identified in the Manipur Blocks based on satellite
imagery, geological surveys and structural modelling.
The Resources Assessment for the two Blocks,
estimated by Gaffney Cline & Associates (“GCA”),
gives the appraisal as at 31 March 2012, which

Governance
updates the previous assessment as at 30 June 2010.
The Gross Un-risked Best Estimate Prospective Gas
Resources have been assessed at 7.1 tcf.

Based on surface geological mapping and structural

geology reconstructions, seven structural features Balanced Structural Cross Section
have been identified in the two blocks. Jubilant
has contracted Asian Oilfield Services Limited
and Alpha Geo (India) Limited respectively for

Financials
the simultaneous seismic acquisition of 300 lkm
in South Block and 220 lkm (straight line after
acquiring 16 lkm from wavy line contract) in North
Block. Approximately 210 lkm of 2D seismic data
has been acquired.

SHOOTING OPERATION

RECORDING TRUCK UPPER BHUBAN

(Oinamlong)

MIDDLE BHUBAN
RECORDING SYSTEM
(Oinamlong)

LOWER BHUBAN
(Oinamlong)

Annual Report & Accounts 2013 29

 PSC-1

Key facts:
Jub
bilaant’s Particcip
patinng
Inteere
estt (O
Operaatoor) : 77.5%
Paraami : 22.5%
Gross Reserves/Resources
– Beest estim
matee un
n-rissked Proosp
pectivee
Resouurcces of 2,820.8 bcf* of gas

77.5%
BOEE


...CC CMT
PPG 0JM$PO
OEFOTTBUF
* As per Management Estimate

Interest
Op
perattor: Ju
ubilant

Jubilant acquired block PSC-I, awarded

under the Myanmar Onshore Blocks
Bidding Round in 2011, complementing
its already existing portfolio in the nearby India
North Eastern India. The Central Burma Myanmar
basin of Myanmar is rich in oil and gas
resources, with discoveries and production
EBUJOH
CBDL
UP

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UIF
FBSMZ
T

Jubilant will utilise its in-house expertise
as operator of Tripura, Manipur and
Assam blocks, which are geologically and
tectonically similar in set-up to this newly
awarded block.

The sub-surface technical work

is underway and Jubilant has
completed archiving of subsurface
and seismic data collected from
MOGE. The contract for 2D seismic
acquisition of 700 lkm has been
awarded.

30 Jubilant Energy NV
 The Production Sharing Contract (PSC) for the block was
executed on 28th May 2012 between Jubilant, Parami
Energy Development Company Limited (Parami) and
Myanma Oil & Gas Enterprise (MOGE), an enterprise
formed by the Government of the Republic of the Union
of Myanmar. Jubilant holds a 77.5% participating interest
in this block and is the Operator, while Parami holds the

Overview
remaining 22.5% participating interest in this block.

The block covers an area of approximately 3,600 sq km

and is located about 125 kms North West of Yangon
City. The block falls in the Irrawaddy Delta Sub-basin and
partly in the Pyay Embayment Sub-basin of the Central
Burma Basin, which is believed to be the most prolific

Business Review
sedimentary basin in Myanmar, where giant fields such
as Chauk-Lanywa and Yenangyaung are located. The
awarded block is also located adjacent to the Myanaung
and Shwepyitha producing fields.

The Commencement of Operations Date (COD) was

announced to MOGE on 23 August 2012.

A reconnaissance survey of the block was successfully

Governance
completed by the Jubilant team in collaboration with
MOGE and Parami representatives in early July 2012. As
well as scouting the area for understanding topography,
terrain, logistics, availability of infrastructure / facilities
etc, the team also located and scouted the well sites for
the four existing wells to evaluate the option for re-entry.

Based on the data collected from MOGE, initial

interpretation work has been completed. Prospects &

Financials
Leads have been identified, Seismic acquisition plan
finalised and Environment & Social Impact studies
completed.

Prospects and Leads Prospects Leads

Nyaunggyin Prospect Interbedded shallow marine sst and sh - onlapping against high in the
northernmost part of the block
Deltaic - Brackish to shallow marine (regressive)
45 API Oil flowed after the Nyaunggyin-1 well was abandoned
Analogous Fields: Shwepyitha, Myanaung (Myanmar)
NYAUNNGYIN
Mezaligon Prospect Lower-Middle Miocene Structural Prospect
Trap Type: Asymmetric Transpressional Anticline
Gas shows within Lower-Middle Miocene in Mezaligon-1
Well was drilled slightly off structure
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PROGRADES Analogue Field: Shwepyitha and Myanaung
HINTHADA
Pyawbwe Progrades Thick marine clays with interbedded sst & lst
Prospect Transgressive – fully marine
Analogous Region: Gulf of Mexico

Hinthada Prospect Fault Blocks in the easternmost part of the block, close to base of
Kyaukkok Formation
Interbedded sst within marine shales and clays
Near shore – marine
Analogous Region: North Sea

LEMYETHNA Lemyethna South Lead Pyawbwe Lst & possible Oligocene clastic wedges/syn-rift strata
SOUTH Drilled Eocene foreland basin sediments directly below Pyawbwe Formation on
highs in Zayathla-1 & Daga-1 wells in Block O, but not into the syn-rift strata
Analogous Giant Fields: Barmer Basin (India) and North Sea Fields
Prospect Boundary

Annual Report & Accounts 2013 31

 India continues
to be among the
world‘s largest and
fastest growing
economies with
an estimated GDP
of 4.5 trillion in
2012(on a PPP
basis), which makes s
it the third largest
economy in the
world.

Shyam S Bhartia Hari S Bhartia

Bha
art
rtia
ia
Chairman Co-Chairman

32 Jubilant Energy NV
Intrrodu
ucttion
Last year we saw Jubilant Energy continue to build
on its strategic objective of building and exploiting
its diverse portfolio of exploration, development and
producing oil and gas assets in major proven and
prolific hydrocarbon basins in India and Myanmar.
Jubilant remains well positioned to benefit from the
growth potential of the Indian market where energy
demand is constantly increasing with indigenous
supplies falling well short of this demand.
Considerable progress has been made in the last
year across all aspects of the Company’s exciting
and diverse portfolio. Kharsang achieved its highest
ever production, DDW in KG is nearing its first gas
production schedule, as well as further progress
in the KG, Tripura and Manipur exploration and
appraisal programmes. The period also saw us make
a strategic entry into Myanmar with the acquisition
of PSC-I block. All of these demonstrate very
significant achievements across our entire portfolio.
These achievements are a testament to the
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that is dedicated to driving the Company forward,
playing to its strengths as we look to continue to
create sustainable shareholder value by maximizing
the opportunities.
Ind
dia
a maccro enviro
onme
ent
India continues to be among the world‘s largest
and fastest growing economies with an estimated
GDP of USD 4.5 trillion in 2012 (on a Purchasing
Power Parity basis), which makes it the third
largest economy in the world. Despite a slowdown
in the economy, the India story, in general, and
India’s energy story, in particular, remains intact.
India’s economic growth has led to primary energy
consumption growth at a CAGR of 6% from 2007
to 2012. Crude oil and natural gas contributed
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consumption in 2012, which is low compared to
global standards where oil and gas contributed
approximately 57% of the total energy consumption.
India’s natural gas demand is projected to increase at
a CAGR of 14.0% from 6.8 bscfd in 2012 to reach
approximately 21.4 bscfd in 2022 against domestic
production growth of 7.8% over the same period to
reach approximately 8.6 bscfd in 2022.
The increasing demand-supply imbalance indicates
that over the short and long term, India’s LNG
import requirements are expected to increase and
LNG forming a significant share of total gas supply.
India began importing LNG in 2004 and in 2012
it imported around 1.3 bscfd of LNG, mainly from
Qatar, making it the sixth largest importer of LNG in
Overview
the world.
The primary energy consumption reached 563
mmtoe per year in 2012 and the long term prospects
for energy consumption in India are very positive.
Business Review
With India expected to have the world‘s second
highest rate of GDP CAGR from 2010-2016,
just behind that of China, India’s primary energy
consumption is expected to continue to increase
substantially over the coming decades. A large
population of 1.2 billion and favorable demographics
certainly point towards a continuation of India’s
energy growth story.
Governance
Historically, gas has provided a relatively small
proportion of India’s primary energy consumption
though that is changing with natural gas
consumption as a percentage of total domestic
energy consumption is expected to grow from
8.7% in 2012 to around 20% by 2025. Given the
cleaner characteristics of gas, its consumption is
expected to grow due to heightened environmental
concerns and India’s commitment to reduce its
Financials
carbon emissions per unit of GDP by 2020 through
policy interventions. Natural gas is therefore
expected to take a higher proportion of a markedly
increasing demand for energy in India, leading to
a dramatic increase in the demand for gas. Despite
recent increases in production, the consumption of
natural gas has outstripped supply and the resultant
demand-supply imbalance has meant that India has
been a net importer of natural gas and LNG since
2004 and this imbalance is expected to worsen.
The increasing demand-supply imbalance means
that over both the short and long term, India’s LNG
import requirements are expected to increase. This
will have profound implications on the structure of
the gas market and gas pricing and will create a very
favorable market for new uncontracted domestic
sources of gas supply. The Government of India
constituted a high powered committee headed by
Dr. Rangarajan which had in its mandate a review
of the gas pricing in India and suggest a pricing
formula. The committee, in its recommendation, has
suggested a pricing formula. Based on the pricing
formula an initial gas price of approximately USD
8.5 per mmbtu is arrived. The gas pricing formula
Annual Report & Accounts 2013 33
 Business review
Chairman and Co-Chairman’s
Statement continued
proposed by the committee can be viewed as a
constructive step taken by the Government towards
formulating a natural gas pricing policy. Given
Jubilant’s substantial gas reserves and resources and
notable prospect and lead inventory in gas prone
areas, the Company is well placed to benefit from
these favorable macroeconomic trends which look
set to continue for many years to come.
Yea
ar un
nde
er re
evie
ew
From an operational point of view, the period under

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review was extremely significant for Jubilant. Good
progress was made across all the key assets where
our operations are focused on, the KG Deen Dayal
structural complex, Kharsang, Tripura and the two
Manipur blocks. The major development from a
portfolio perspective was the strategic entry into
the Republic of The Union of Myanmar through
the acquisition of block PSC-I awarded under
the Myanmar Onshore Blocks Bidding Round in
2011. The Company’s entry into Myanmar fulfills
its strategic objectives of further expanding its
portfolio in proven and prolific hydrocarbon basins
especially given Jubilant’s expertise as operator of
its four existing exploration blocks located in the
North Eastern part of India, in close proximity to the
Myanmar border.
Gaffney, Cline & Associates prepared Reserves
and Resources Estimations for Kharsang, KG and
Manipur significantly revising the reserves and
resources upward. These revisions are proof of the
considerable progress the Company has made in
achieving the work programme in these assets and
its overall strategic initiative. The review of resources
in Tripura and Myanmar has been initiated.
Jubilant’s only producing block in Kharsang
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discovery, with the primary objective of evaluating the
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Middle Bhuban reservoir sands. Post the successful
under review. This was mainly due to a highly
successful seven well Phase-III development
34 Jubilant Energy NV
programme and the workover in the older wells. Six
of the seven wells under the Phase-III development
programme tested for oil and were put into
production, initially contributing to approximately
700 bopd. One of the wells tested gas and has
been kept shut for future gas utilization, as it is
commercially viable. The field is at present producing
around 2,000 bopd, achieving its highest ever
recorded production of 2,253 barrels of oil on
23 October 2012, beating the previous high of

phase III Extension development drilling campaign
commenced in February 2013 and the fourth well is
currently being tested and the fifth is being drilled.
The first three wells have been put on production.
Enhanced oil recovery projects were piloted during
the year and more are planned in 2013-14.
The development of the Deen Dayal West Field in
KG is also progressing on schedule to deliver first
gas in Q4 2013. The setting up of onshore and
offshore facilities is on target with most of the
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the development wells is on target with two of the
four wells, scheduled to be drilled before first gas,
already drilled. The consortium has also contracted a
well known international organization to undertake
hydrofraccing of the development wells to achieve
a significantly higher hydrocarbon recovery. An
integrated DOC proposal was submitted to the DGH
for DDE, DDN, DDNE-BRU and DDDT in February
2013 and the consortium is preparing the FDP for
filing with DGH.
On the exploration and appraisal side, Jubilant has
made significant progress in its key blocks in the
North East of India. In the Tripura block, two wells
were drilled as an appraisal well to the Kathalchari-1
drilling and testing of the Kathalchari NE appraisal
well, the consortium filed a DOC proposal in
December 2012. We are awaiting the Government
approval of the DOC proposal following which we
will file an FDP. The preliminary work on this has
already been initiated. The consortium entered the
Phase-II exploration programme in Tripura with the
in the Oil & Gas industry, he retired as the Chairman
and Managing Director of ONGC. We welcome
Mr. Sharma to the Board and look forward to his
association with the Company.

spudding of the Matabari-1 well in May 2012. The
second well under the programme, North Atharamura
was spud in February 2013. The Company filed two
Notices of Discovery documents with the DGH in May
2013 post the successful conventional testing in the
Overview
Ajay Khandelwal resigned as the Company’s Chief
Executive Officer and left the Board by mutual
agreement on 7th February 2013. The Company has
initiated the process for appointing a new CEO and, in
the interim, a Committee has been set up comprising

Middle Bhuban and Lower Bhuban formations. An
exploration seismic of 125 lkm, a part of the Phase II
programme, has also been successfully completed.
In two Manipur blocks, despite the difficult
terrain and logistical challenges, we have acquired
approximately 210 lkm of seismic data. The
processing and interpretation of the data has
resulted in identifying six prospects.
Business Review
Ramesh Bhatia, COO and Vipul Agarwal, CFO, for the
day to day running of the Company.
We would again like to take the opportunity to
thank all the people involved in making 2012-13 a
memorable year for Jubilant – their time, energy,
patience and hard work has been greatly appreciated
and we cannot thank them enough.

Governance
Outtlo
ook
The year also saw Jubilant acquire block PSC-I
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awarded under the Myanmar Onshore Blocks
a strong portfolio of assets, the expertise and also
Bidding Round in 2011, complementing its already
the funding to deliver this. India has exceptional
existing portfolio in the nearby North Eastern India.
opportunities for oil and gas companies and Jubilant
Contract for acquiring a 2D seismic data for the
is uniquely and ideally positioned to take advantage
block has been awarded recently and the survey
of these opportunities. We are also hopeful that
work has commenced.
the gas pricing scenario in India will become clearer

Financials
given the momentum it has achieved in the past
Fina
ance
e overv
view
w year. Next year promises to be an exciting one for
In the year under review, the Company’s operating the Company as we look forward to the first gas
revenue grew approximately 2.0% over the previous from our largest asset in KG, exploring our Manipur
year to USD 17.8 million on the back of higher and Tripura assets as well as in our Myanmar block.
production despite lower international oil prices. We also look forward to the next round of bidding
in Myanmar where we are keen to look for further
Jubilant is funded to carry out its immediate work opportunities.
programme in the coming year with available cash
and undrawn facilities. The Company is also working
on a range of strategic options to fund its medium
and long term funding needs. Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman
Corrporrate
e
We would like to take this opportunity to thank our
exceptional Board who have continued to work with
the Company’s executive team providing invaluable
support and guidance throughout the last year.

The Company’s Board of Directors was further

strengthened with the appointment of Mr. R S Sharma
as Non-Executive Non-Independent Director at its
EGM held on 21 March 2013. Mr. Sharma brings
with him over 40 years of rich and varied business
and management experience. A well-known name

Annual Report & Accounts 2013 35

 The F.Y. 2013 – 14 is the start year to monetize from
KG, DDW production and upgradation of significant
2C Resources to 2P Reserves.

Ramesh Bhatia Vipul Agarwal

Chief Operating Officer Chief Financial Officer

36 Jubilant Energy NV
Jubilant has delivered a strong performance during
the year under review, reinforcing the Company as
one of India’s key emerging oil and gas businesses.
The Company remains committed to deliver its
strategy of exploring opportunities across the E&P
value chain. The Company’s continued focus has
been on the early monetization of its key assets as
it looks to continue its ethos of creating sustainable
shareholder value by building and exploiting its
diverse portfolio of exploration cum appraisal,
is set for a four-fold increase from 6.8 bscfd in
WREVFIGLQRIZKLFKWKHGRPHVWLF
production of natural gas is expected to contribute
DSSUR[LPDWHO\EVFIGLQ,PSRUWHG/1*
LVH[SHFWHGWR¿OOWKLVLQFUHDVLQJJDSEHWZHHQ
Overview
demand and supply and would continue to
FRQWULEXWHDVLJQL¿FDQWVKDUHRIWRWDOJDVVXSSO\
,QGLD¶VFXUUHQW/1*UHJDVL¿FDWLRQFDSDFLW\LV
00WSDDQGH[SHFWHGWRLQFUHDVHWR00WSDE\
development and producing oil and gas assets.
The development of the KG block remains on
WUDFNZLWKWKH¿UVWJDVH[SHFWHGLQ4
and Kharsang has continued to move forward
increasing the daily production rate. Our
exploration programmes at Manipur and Tripura
have further advanced during the year and
the Company is also particularly excited about
commencing our work on our newly awarded
block, PSC-I, in Myanmar. Our progress in the
work programme we set out to achieve was also
DPSO\UHÀHFWHGLQWKHVLJQL¿FDQWXSJUDGHWRRXU
Reserves and Resources during the year.
This is a very exciting time for the Company with
considerable opportunities ahead. The Company
has an extensive programme across its assets
IRUDV-XELODQWORRNWRPD[LPLVHWKH
opportunities of its portfolio.
Ind
dia
a Ene
ergy Sto
ory
y for gas is expected to provide an upward pressure
India’s economic growth since the economic
OLEHUDOL]DWLRQRIWKHHDUO\VKDVUHVXOWHGLQ
it being one of the largest and fastest growing
economies. This growth has also led to a huge
surge in its demand for energy and its primary
energy consumption grew, year on year, at a
&$*5RIIURPWR,QGLDLVWKH
world‘s fourth largest consumer of energy,
behind the United States, China and Russia.
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considerably less than the world’s per capita
HQHUJ\FRQVXPSWLRQRIERHSHU\HDU7RSXWLW
into perspective, China’s energy consumption per
capita is four times that of India’s.
In the energy mix, crude oil and natural gas
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total energy mix. The natural gas demand in India
WKHHQGRIWKHWK)LYH<HDU3ODQ
Business Review
/1*LPSRUWVLQ,QGLDDUHSULPDULO\RQD¿UPFRQWUDFW
EDVLV+RZHYHUZLWKWKHRQJRLQJLPSURYHPHQW
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is expected to increase. There has been an
increased involvement by Government backed
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Governance
involvement by Indian companies to tie-up long term
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of Understanding signed by Indian companies for a
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Currently, gas is sold in India at different prices
and there is a wide gap between the price of
administered gas supplies and the prevailing
Financials
market rate. Based on the source of gas and end-
consumer, the gas price varies accordingly. The
existing and projected demand-supply imbalance
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increasing, it is expected that domestic gas prices
would increase to market determined pricing with
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which are referenced to rising crude prices.
The past year has seen considerable debate
on gas pricing in India, and policy initiatives
and announcements of the Government have
suggested a positive intent in opening up the
pricing regime. Some of the key events and
initiatives are:
Urea Investment Policy: The Group of
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Policy based on a delivered gas price band of
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The Urea Investment Policy committee
subsequently indicated that if the delivered
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GoI would compensate the fertilizer
manufacturers
Annual Report & Accounts 2013 37
 Business review

From the CEO Committee

continued

5HOLDQFH,QGXVWULHV/LPLWHGLQYLWHGELGVIRUJDV Ope
erattion
nal Ove
ervie
ew of Key Asssetss
from its CBM blocks. It opts for an open auction
7KH&RPSDQ\¶VSRUWIROLRFRQVLVWVRI¿YHNH\RLO
SULFHLQGH[HGWRWKHSULFHRILPSRUWHG/1*
and gas assets at various stages of exploration,
5,/DSSURDFKHGWKH2LO0LQLVWU\WRVHHNDQ appraisal, development and production in India and
upward revision on the gas pricing formula the one newly acquired block in Myanmar. During
and proposed to price natural gas it produces the last year, Jubilant has continued to focus on the
IURPWKH.*EDVLQDWDUDWHHTXLYDOHQWWR/1* key blocks in its portfolio. These are the assets that
import price. In response to Reliance Industry’s the Company believes offer the most upside and
UHTXHVWWKH3ULPH0LQLVWHU¶V2I¿FHLQGLFDWHG most immediate growth prospects for the group as
that Reliance can negotiate with the Oil Ministry well as delivering future shareholder value.
regarding the pricing of gas from the KG basin
Pro
oducctio
on an
nd nea
ar te
erm
The Planning Commission of India’s Deputy Pro
oducctio
on Up
psid
de - Kh
harssan
ng Fie
eld
Chairman, indicated that domestic gas prices (PI - 25%))
should be aligned with international rates The Kharsang block, located in the Upper Assam
basin in the north-eastern region of India, is the
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Company’s oldest block and has been in production
constituted under the Chairmanship of Dr C
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changes in existing oil & gas exploration
contracts. The Rangarajan Committee report
has suggested a gas pricing formula. Based
on the pricing formula, the initial gas price
arrived is approximately USD 8.5 per mmbtu.
Additionally, the Rangarajan Committee has
also suggested that the suggested price
arrangement be made applicable only for a
5 year period post which efforts should be
made to introduce gas on gas competition
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All these suggest a very positive outlook on the
gas pricing front and the Government’s willingness
to eventually move towards a market determined
pricing regime.
38 Jubilant Energy NV
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mainly due to a successful seven wells Phase
III development drilling programme. Six of the
seven wells tested for oil and have been put into
production, initially contributing to approximately
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has been kept shut for future gas utilization, as it is
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In line with the Company’s strategy to maximise
the potential of its producing assets, a Phase III
Extension Development drilling plan comprising six
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Currently, the fourth well is being tested and the
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 The Kharsang field achieved its highest ever recorded production of 2,253
barrels of oil on 23 October 2012, beating the previous high of 2,227
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Overview
Business Review
already on production having successfully tested t
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for oil. On the back of the successful development *&R6RI
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softening of international crude prices during the
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projects in order to increase the production from
WKH.KDUVDQJ¿HOGZKLFKLQFOXGH6DQG&RQWURO The KG basin in the south-east coast of India,
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currently being processed. This will provide better
subsurface imaging and understanding of potential
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deeper regional proven plays in the Tipam and
Barail formations.
The Reserves and Resources Estimation was
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The highlights of the reserves and resources
update are:
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Gross Contingent gas resources ranges from
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State Government of Gujarat, and the Company
actively participates with the operator in technical
evaluations.
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offshore facilities are at an advanced stage of
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XSLQ0D\DQGWKHEDWFKGULOOLQJRIIRXU
development wells commenced in September
7KH¿UVWGHYHORSPHQWZHOOZDVVSXGXVLQJD
MDFNXSULJLQ6HSWHPEHU6XEVHTXHQWO\IURP
HQG0DUFKDPRUHFRVWHI¿FLHQWPRGXODUULJ
replaced the jack up rig, which was moved to DD
East to drill the second appraisal well. The status
for the four development wells as at the end of May
DUHJLYHQEHORZ
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Gross Contingent Oil resources range from
00EEOVWR00EEOVZLWKD&2LO '':' P0'XSWR7'
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6LJQL¿FDQWH[SORUDWLRQXSVLGH%HVW(VWLPDWH Given the tight gas reservoir, the consortium has
Gross Unrisked Prospective Resources: decided to hydrofrac the development wells for

Annual Report & Accounts 2013 39

 Business review

From the CEO Committee

continued

improved well productivity and ultimate recoverable /HDVHDUHDIRU'HHQ'D\DO:HVW'':KDV

volumes. Blade Energy has been appointed as LQFUHDVHGIURPVTNPWRDWRWDORIVTNP
a consultant for the hydrofraccing strategy and
+DOOLEXUWRQKDVEHHQFRQWUDFWHGWRLPSOHPHQW
WKHK\GURIUDFFLQJ7KH¿UVWZHOOLVH[SHFWHGWREH
K\GURIUDFFHGLQ-XO\
Drilling operation in the reservoir section was
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a Reserves & Resources Update for the Deen
'D\DO6WUXFWXUDOFRPSOH[DVRI0D\SRVW
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drilling of the appraisal wells in the DDE area. The
WHPSRUDULO\VXVSHQGHGGXHWRLQVWDOODWLRQRI3/43
and drilling operation was initiated for the non-
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status of these wells are-
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JDVDQGIRUFRQGHQVDWHRYHUWKHHVWLPDWHV
RI-XQH
,Q)HEUXDU\WKHFRQVRUWLXPVXEPLWWHGDQ
integrated DOC proposal for the six natural gas
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WKH''(DUHD.*LQWKH''1DUHD.* 
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supported by all necessary technical and economic
data, evaluation, interpretation and analysis of data
*DV7HUPLQDO2*7LVEHLQJGHYHORSHGWRSURFHVV
and feasibility studies relating to the discoveries
WKHPXOWLSKDVHGHK\GUDWHGÀXLGEHLQJUHFHLYHGIURP
DQGRWKHUUHOHYDQWLQIRUPDWLRQ7KHFRQ¿UPDWLRQ
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from the MC of the said DOC will take us one
VSHFL¿FDWLRQVRIJDVVDOHV7KH2*7IDFLOLW\LVEHLQJ
VWHSFORVHUWRFRQYHUWLQJWKH&5HVRXUFHVWR3
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Reserves.
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YLOODJHQHDU5,/¶V2QVKRUH7HUPLQDORIWKH.*' Expplo
ora
atioon and Apppra
aisall Upsid
de
GHYHORSPHQW3ODQWIDFLOLWLHVDUHVSUHDGRYHU Trip
puraa (P
PI -20
0%))
hectares and a green belt development is to be
WDNHQXSRYHUKHFWDUHV%\WKHHQGRI0D\ -XELODQWLVWKHRSHUDWRURQWKLVEORFNZLWKDSHU
WKH3/43ZDVFRPSOHWHZKLOHWKH*DV cent participating interest.
7XUELQH*HQHUDWRUZDVFRPSOHWHDQGWKH
The Company submitted a DOC proposal for the
VXEPDULQHSLSHOLQHLVFRPSOHWH
.DWKDOFKDULGLVFRYHU\RQWK'HFHPEHU
7KH0LQLVWU\RI3HWUROHXPDQG1DWXUDO*DVRIWKH after incorporating the results of the wells drilled
*RYHUQPHQWRI,QGLD³0R31*´KDGDSSURYHGDQ LQWKH7XODPXUDDQWLFOLQH:HDZDLWWKHDSSURYDO
H[WHQVLRQRIVTXDUHNLORPHWUHVWRWKHH[LVWLQJ RI'*+IRUWKH'2&SURSRVDODQGWKHSUHOLPLQDU\
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extension, the approved development cum Mining

40 Jubilant Energy NV
 The seismic programme for acquiring 125 lkm of 2D data over the North
Atharamura, North Ambasa and Khushiram area was taken up as a part
of the Phase-II programme and has been completed.
in the Tulamura anticline, under the Phase-II
SURJUDPPH0DWDEDULZHOOZDVVSXGGHGLQ0D\
WRH[SORUHWKHK\GURFDUERQSRWHQWLDORIWKH
/RZHU0LRFHQH/RZHU%KXEDQDQG/DWH2OLJRFHQH
Renji sands as primary objectives and the Middle
Bhuban sands as a secondary objective. This was
WKH¿UVWH[SORUDWRU\ZHOOLQWKH%ORFNWDUJHWLQJ
deeper objectives beyond the Middle Bhuban. The
ZHOOZDVGULOOHGWRPHWUHVDJDLQVWDWDUJHWRI
PHWUHVGXHWRGULOOLQJFRPSOLFDWLRQV,QWKH
Middle Bhuban formation, gas bearing sands were
encountered of which one sand interval was tested
ZLWKDPLQL'67KDYLQJD$2)3DWPPVFIGRI
gas. Side tracking of the well and detailed testing is
scheduled for the current year.
A second deeper exploration well to complete
WKH3KDVH,,0LQLPXP:RUN3URJUDPPH1RUWK
$WKDUDPXUDRQWKH$WKDUDPXUD$QWLFOLQHZDV
VSXGGHGLQ)HEUXDU\ZLWKDWDUJHWHGGHSWKRI
PHWUHV0'1RUWK$WKDUDPXUDLVWKH¿UVWZHOO
on the Atharamura anticline which has an aerial
H[WHQWRIPRUHWKDQNLORPHWUHVRQWKHEORFN
Based on the available information from drilling,
mud logs and wire-line open-hole and cased-hole
data, two Objects were selected for conventional
WHVWLQJWRHVWDEOLVKWKHSUHVHQFHRISURGXFLEOH1RQ
$VVRFLDWHG1DWXUDO*DV7KHFRQVRUWLXPUHFHQWO\
VXEPLWWHG1RWLFHRI'LVFRYHU\WR'*+IRUWKHWZR
2EMHFWVLQWKH0LGGOH%KXEDQDQG/RZHU%KXEDQ
formations, respectively. The gross Middle Bhuban
VDQGSDFNDJHLQWKHPHWUHV0'LQWHUYDO
Overview
Business Review
7KHVHLVPLFSURJUDPPHIRUDFTXLULQJONPRI
'GDWDRYHUWKH1RUWK$WKDUDPXUD1RUWK$PEDVD
and Khushiram area was taken up as a part of the
Phase-II programme and has been completed.
7KHFRQVRUWLXPKDVDSSOLHGIRUDPRQWK
extension of the Phase-II exploration programme
DVSHUWKHH[WHQVLRQSROLF\RI'*+LQYLHZRIWKH
GLVFRYHU\LQ1RUWK$WKDUDPXUD
Governance
Manipu
ur Bloccks (PII-100
0%)
7KHWZR0DQLSXU%ORFNV$$211 
are located in the eastern extension of the Burma-
Assam-Arakan fold thrust belt which covers almost
VTNP%HVWHVWLPDWHSURVSHFWLYHUHVRXUFHV
HDUOLHUDVVHVVHGWRWDOOHGWFIRQDQXQULVNHG
EDVLVKDYHQRZEHHQUHYLVHGWRWFIE\*&$
Financials
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-XELODQWHPEDUNHGXSRQD'VHLVPLFDFTXLVLWLRQ
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and, despite the rough terrain and logistical
FKDOOHQJHVUHFRUGLQJRIRYHUONPVKDYHEHHQ
completed to date. Stratigraphic and structural
understanding of the block has been reasonably
well established from recently conducted surface
geologic mapping, gradiometry / magnetic / survey
and seismic-structural modeling.
-XELODQWXQGHUWRRNDONPDLUERUQHIXOOWHQVRU
gradiometer survey over the Manipur Blocks. The
VXUYH\ZDVFRQGXFWHGLQ1RYHPEHU7KH
2EMHFW,,SHUIRUDWHG]RQHPHWUHV processing and interpretation of acquired data has
appeared promising on the logging-while-drilling also been completed.
logs and the presence of hydrocarbons was further
5HFHQWWHFKQLFDOZRUNKDVOHGWRWKHLGHQWL¿FDWLRQ
YDOLGDWHGE\ZLUHOLQHORJV2EMHFW,,ÀRZHGJDVDW
of three prospects which will be targeted for
DPHDVXUHGUDWHRIPLOOLRQVWDQGDUGFXELFIHHW
the initial drilling based on remote sensing
SHUGD\DW´FKRNHVL]H7KHPXOWLEHDQ6WXG\
GDWDJHRORJLFDO¿HOGZRUNDQG'VHLVPLF7KH
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company has submitted six well proposals to
currently being conducted.
'*+ZKLFKDUHXQGHUUHYLHZ)RUWKUHHWDUJHWHG

Annual Report & Accounts 2013 41

 Business review
From the CEO Committee
continued
SURVSHFWVVXUIDFHORFDWLRQVKDYHEHHQGH¿QHG
WKHJHRORJLFDOSURJQRVLVKDVEHHQ¿QDOLVHGDQG
pore pressure studies completed. Environmental
clearance and detailed well planning are underway
DQGWKH&RPSDQ\ZLOOGULOOWKH¿UVWSURVSHFWVXEMHFW
to the statutory clearances.
Myan
nmarr (PI – 77.5
5%)
Jubilant acquired block PSC-I awarded under the
0\DQPDU2QVKRUH%ORFNV%LGGLQJ5RXQGLQ
complementing its already existing portfolio in the
QHDUE\1RUWK(DVWHUQ,QGLD7KH&HQWUDO%XUPD
basin of Myanmar is rich in oil and gas resources
with discoveries and production dating back to
DQGWKHHDUO\¶V-XELODQWZLOOXWLOLVHLWV
in-house expertise as operator of Tripura, Manipur
and the Assam blocks, which are geological and
tectonically similar in setup to this block.
A reconnaissance survey of the block was
successfully completed by the Jubilant team
in collaboration with MOGE and Parami
UHSUHVHQWDWLYHVLQHDUO\-XO\:LWKWKH
objective to understand the topography, terrain,
logistics, availability of infrastructure / facilities etc,
the team also located and scouted the well sites
for the four existing wells to evaluate the option for
re-entry.
Based on the data collected from MOGE, initial
interpretation work completed; prospects and
OHDGVLGHQWL¿HGDQGVHLVPLFDFTXLVLWLRQSURJUDP
¿QDOL]HG7KHFRQWUDFWIRUONP'VHLVPLF
acquisition has been awarded and the survey work
initiated.
Based on the review of initial data received from
MOGE, the gross unrisked prospective resources
KDYHEHHQHVWLPDWHGE\-XELODQWDWEFIRI
7KH3URGXFWLRQ6KDULQJ&RQWUDFW36&IRUWKH
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of the Republic of the Union of Myanmar. Jubilant
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LQWHUHVWDQG3DUDPLKROGVUHPDLQLQJ
participating interest in this block.
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-XELODQWKDVDOVRUHFHLYHGWKH%UDQFK2I¿FH
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The necessary bank accounts have also been
opened and are now operational.
San
nand
d Mirolli (P
PI- 20%
%)
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QRQRSHUDWHGLQWHUHVWKDVDSSURYHGWKH)'3RI
Delta Sub-basin and partly in the Pyay Embayment
Sub-basin of the Central Burma Basin, which is
EHOLHYHGWREHWKHPRVWSUROL¿FVHGLPHQWDU\EDVLQLQ
0\DQPDUZKHUHJLDQW¿HOGVVXFKDV&KDXN/DQ\ZD
DQG<HQDQJ\DXQJDUHORFDWHG7KHDZDUGHGEORFN
is also located adjacent to the Myanaung and
0LUROL3DUW%00GLVFRYHU\LQ1RYHPEHU
DQGWKH¿HOGGHYHORSPHQWLVXQGHUFRPPLVVLRQLQJ
)LUVWRLOLVH[SHFWHGLQ4
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GLVFRYHULHVLHDUHLQVKDOORZHU.DORO
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RI2SHUDWLRQV'DWH&2'ZDVDQQRXQFHGWR
ZDVVXEPLWWHGWR'*+LQ0D\
02*(RQ$XJXVW

42 Jubilant Energy NV
 Jubilant is committed to achieve excellent health, safety and environment
standards, to reduce accidents and ill health within the workplace and to
minimise the impact of the Company’s operations on the environment.

Ausstra
alia
6XEVHTXHQWWR\HDUHQGLQUHVSHFWRI73
SHUPLWLQ$XVWUDOLDWKH1DWLRQDO2IIVKRUH
Petroleum Titles Administrator has given its
consent to the title holders to the Block to enter
Overview
Business Review
Company looks to build on what has been achieved
during this period. The year will witness a push
towards monetization from increased production
DQGDQXSJUDGDWHLQVLJQL¿FDQW&5HVRXUFHVWR
35HVHUYHV7KH&RPSDQ\LVORRNLQJIRUZDUGWR
¿UVWJDVIURP.*'':LQ4DQGZLWKWKH
LQWRD*RRG6WDQGLQJ$JUHHPHQW³*6$´EHIRUH
0D\LQUHODWLRQWRWKHXQ¿QLVKHGUG\HDU
work program. The Group has decided not to enter
LQWRD*RRGV6WDQGLQJ$JUHHPHQWZLWK1DWLRQDO
Offshore Petroleum Titles Administrator. This has
QR¿QDQFLDOLPSOLFDWLRQ
Hea
altth & Safe
ety
Jubilant is committed to achieve excellent health,
safety and environment standards, to reduce
accidents and ill health within the workplace and to
minimise the impact of the Company’s operations
on the environment.
The Company insists that all contractors should
maintain the same high standards. Jubilant liaises
closely with government departments, partners and
other interest groups to comply with local laws and
regulations and to minimise any disruption to the
environment.
Jubilant seek to continuously improve the ways in
which the Company contribute directly or indirectly to
the economy and the well-being of the communities
where Jubilant operates. Understanding and
respecting local communities is essential to ensure
the Company’s continued presence in the locations
where it works. The Company maintains a continual
dialogue with local communities and authorities
through its local staff and senior management when
visiting the operational locations.
Outtlo
ook
Jubilant is well positioned and the year ahead
promises to be another exciting one as the
Phase III Extension drilling on Kharsang nearing
completion, the Company will soon be entering the
very exciting stages of the Tripura and Manipur
Governance
programmes. Jubilant looks forward to updating our
shareholders as we progress over the year.
2XUIRFXVUHPDLQVRQ1RUWK(DVW,QGLDDQGRXU
entry into Myanmar is a further extension of this
strategy as the Company looks to build upon its
core strengths and in-house expertise that are
already in place for this region. Myanmar is a
Financials
SUROL¿FK\GURFDUERQUHJLRQDQGLVDQH[FLWLQJPRYH
for us. The Company looks forward to working with
our partners in exploring these assets further.
The Company has an excellent portfolio of
potentially world class assets, a team with the
expertise to exploit them fully and an extensive
work programme across them all. This is an
exciting time for the Company as it embarks upon
the next stages of its work programmes with a view
to proving up the inherent value that the Company
believes is across its portfolio.
Ramesh Bhatia Vipul Agarwal
&KLHI2SHUDWLQJ2I¿FHU &KLHI)LQDQFLDO2I¿FHU
5DPHVK%KDWLD&22DQG9LSXO$JDUZDO&)2DUH
part of the Committee constituted by the Board of
Directors for day to day running of the company
consequent to the resignation of the Chief
([HFXWLYH2I¿FHULQ)HEUXDU\
Annual Report & Accounts 2013 43
 The net operating Ove
erview
w
2012-13 has proved to be a year where Jubilant has
revenue of USD 17.8 continued to maximise opportunities in an exciting
million, on an entitlement energy market, moving ahead on its journey as an
independent organization with a portfolio of high
interest basis, represents quality assets.
an increase of 2% against Pro
oducctio
on an
nd Rev
venu
ues
the previous year. 5IF
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barrels and net to Jubilant 174,828 barrels from the
Company’s only producing field in Kharsang. In the
previous year, gross sales volume was 650,724 and
net to Jubilant was 162,681. The 7.5% increase in
the current year owes, largely, to additional volumes
contributed
contr r by the successful Phase-III Development
drilling
n programme in Kharsang. Six of the seven
drillin
wells under the programme tested oil and have been
put ono production. The net operating revenue of
USD 17.8 million, on an entitlement interest basis,
represents an increase of 2% against the previous
repre
year, on the back of increased sales volumes,
despite a softening in the international crude prices.
despi
The aaverage oil price realised was USD 112.5/Bbl
(premium
(premm to Brent) and for the previous year it was
USD 115.6/Bbl, a decrease of 2.7%.

Inco
ome Sttate
ement
Durin
During
n the year ended 31 March 2013, the Group
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loss o
of USD 12.8 million in the previous year mainly
due to
t (a) reversal of share based payment expense of

Vipul Agarwal
Chief Financial Officer

44 Jubilant Energy NV
USD 2.5 million, as against charge of USD 4.1 million Company. In the current financial year, Jubilant
in previous year due to certain employees leaving further entered into a funding agreement of USD
the company (b) lower depletion charge by USD 20 million on above lines. Total drawdown to date is

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EVF
UP
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64%

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net finance cost of USD 3 million due to additional

withdrawal of loans (d) and the impairment of past
costs in the Golahgat block due to uncertain future
exploration program on account of non-approval of
forest diversion from the Government.
Overview
As at 31 March 2013, Jubilant had a net debt of USD
410 million. The Company had a cash balance of USD
22.6 million, available drawdown of USD 66 million
from the KG debt facility and existing promoter’s
funding. The Company is working on a range of

Business Review
Cassh Fllow
w strategic options for its medium to long term funding.
Closing cash (including short term investments) was
Fina
ancial Stra
ateg
gy & Ou
utlo
ook
USD 22.6 million (March 2012: USD 81.2 million).
During the year, the Company had cash inflows of Jubilant is looking at a multi-pronged strategy of
USD 7.7 million (2012: inflows of USD 6.5 million) improving cash flows through increased revenues
from operating activities and outflows of USD 65.5 from Kharsang and forthcoming revenues from KG,
million (2012: USD 82.1 million) from investing reducing finance costs and achieving operational
activities, which were mainly funded by additional efficiencies. With its immediate cash requirements

loans, available cash and internal accruals. The
inflows from operating activities were primarily on
account of revenues from the producing Kharsang
block (USD 17.8 million). The outflows on investing
activities encompass the investment in exploration
and tangible assets totaling to USD 85.6 million.
Governance
tied up, the Company is focused on its medium to
long term funding needs. The other focus of the
Group this year is to rationalize and simplify the
corporate structure to achieve overall operational
and administrative efficiencies.

The Group has aggressive plans for investment in

Financials
exploration and development activities for the next
financial year with a budgeted capex spend around Vipul Agarwal
USD 75 million. The investment will be funded Chief Financial Officer
by available cash, undrawn debt facilities and the
promoter’s funding.

Fina
ancing
g
Jubilant has during the year signed a Rupee Loan
Agreement for a term loan facility of INR 13,400
million (equivalent to approximately USD 247 million)
with a consortium of banks for refinancing its existing
term loan facility of INR 6,500 million (equivalent
to approximately USD 120 million) and for capital
expenditure for development of DDW in KG Block.

In addition to above, Jubilant also entered into a

funding agreement (unsecured loans) with two
Jubilant Bhartia Group companies of USD 22 million
in aggregate, for a period of three years to fund
operating activities and capital expenditure of the

Annual Report & Accounts 2013 45

 Chairman & Co-Founder, Jubilant Bhartia Group. A graduate in
Commerce and a Fellow member of Institute of Costs and Works
Accountants, India. A leading industrialist of India, he has over
34 years of experience and expertise in the pharmaceuticals and
speciality chemicals, food, oil and gas (exploration & production),
aerospace and information technology sectors. He has served
on the Board of Governors of the Indian Institute of Technology,
Mumbai and the Indian Institute of Management, Ahmedabad.

Mr Shyam S Bhartia, No
on-EExecutivee Chairman
n

Co - Chairman & Founder, Jubilant Bhartia Group. A graduate

in Chemical Engineering from the Indian Institute of Technology.
He is the Chairman, Board of Governors, Indian Institute of
Management, Raipur. Formerly, Chairman of the Board of
Governors, IIT Kanpur & President of Confederation of Indian
Industry. Recipient of Distinguished Alumni Award, Indian
Institute of Technology (2000). Member of Indo-US CEOs Forum,
Indo-France CEOs Forum and Indian co-chair - India-Canada CEO
Forum.

Mr Hari S Bhartia, Non-EExeccutive Co

o-C
Chairman
n

Mr Sharma, an eminent personality, has over 40 years rich and

varied business and management experience. He joined the
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working in areas of Financial Management, Financial appraisal,
Project appraisals, Treasury Management at middle and senior
level in various Projects of ONGC as well as its corporate office.
He retired in 2011 as the Chairman and Managing Director of
ONGC.

Mr R S Sharma, Non-EExecutivee Non

n-Indepen
ndeent Directorr

46 Jubilant Energy
Jubilant Energy NV NV
 Sir Robert Paul Reid has had a long and distinguished career
in the Oil and Gas Industry. He started his career with Shell in

BOE
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held various senior positions including as Chairman & Chief
Executive of Shell UK Limited.

Overview
Sir Robert Paul Reid, Non-EExecutive and Senior Indep
pen
ndent Directorr

Business Review
Mr Arun Duggal is an experienced international banker with a
26 years career with Bank of America. He has advised various
Corporations and Financial Institutions on Financial Strategy,
M&A and Capital Raising areas.

Governance
Mr Arun Duggal, Indeependeent Non-Execu
utivve Director

Financials
Dr. Andrew Wood has had a long and distinguished career in
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KPJOFE
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his 30 years long career with the Shell Group, held various
positions across geographies including as Global Head of
Exploration.

Dr. Andrew William Wood, Indep

pendeent Non-Exeecu
utive Directorr

.S
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BCPVU

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private equity across sectors. He is on the board of various
companies to guide their growth and other strategic
developments. He is the Chairman and Chief Executive Officer
of IL&FS Investment Advisors LLC.

Mr Shahzaad Siraj Dalal, Indepeenden

nt Non-Exeecu
utive Directorr

Annual Report & Accounts 2013 47

 Corporate Governance
Jubilant Energy N.V. is a limited liability company incorporated
under Dutch law, with its office address at Orlyplein 10, Floor 24,
1043 DP Amsterdam, The Netherlands. The Company’s registration
number with the Trade Register of the Chamber of Commerce in
Amsterdam is 34276031.
The Dutch Corporate Governance Code applies to all Dutch companies
(i) whose shares or depository receipts for shares have been admitted
to trading on a regulated market or comparable system in a non-
member state; or (ii) with a balance sheet value of more than Euro
500 million and whose shares or depository receipts for shares
have been admitted to trading on a multilateral trading facility or a
comparable system. Since the ordinary shares of the Company are
traded on the AIM Market of the London Stock Exchange which is not
a regulated market, item (i) above does not apply.
The AIM Market of the London Stock Exchange is a multilateral
trading facility as referred to under (ii) however, since Company’s
balance sheet value is less than Euro 500 million, item (ii) also does
not apply. As a consequence, the Dutch Corporate Governance
Code does not apply to the Company.
The Board
The Board is committed to maintaining a high standard of corporate
governance in order to maintain the trust of the Company’s
shareholders and other stakeholders. It complies with the UK
Corporate Governance Code in such respects as is appropriate for
a company of the size, nature and stage of development of the
Company, as well as the applicable Dutch law requirements. The
Company also complies with the AIM rules for Companies which
apply to the Company whilst its shares are admitted to AIM. In
addition, the Company follows (to the extent practicable and save
as set out below) the recommendations on corporate governance
in the QCA guidelines which apply to the Company whilst its shares
are admitted to AIM.
The UK Corporate Governance Code recommends that at least
half the members of the Board (excluding the Chairman) should
be independent in character and judgement and free from
relationships or circumstances which are likely to affect, or could
appear to affect, their judgement. Currently, the Board is composed
of seven members, consisting of a Chairman, a Co-Chairman, one
Non-Independent Non-Executive Director and four Independent
Non-Executive Directors. Accordingly, the Company complies with
the requirement of the UK Corporate Governance Code that at
least half of the Board (excluding the Chairman) should comprise
Independent Non-Executive Directors.
Also, there is a clear division of responsibilities at the head of the
Company through the separation of positions of the Chairman and
the Chief Executive Officer. However, the roles of Chairman and
Co-Chairman are not consistent with the UK Corporate Governance
Code and the QCA Guidelines.
48 Jubilant Energy NV
The Chief Executive Officer (CEO), who was the sole Executive
Director, resigned from the services of the Company in February
2013, which led to the position of CEO presently being vacant. The
Board has appointed a Committee comprising of the Chief Financial
Officer and the Chief Operating Officer to manage and supervise
the day to day business and operations of the Company, till such
time a new CEO is appointed.
The UK Corporate Governance Code also recommends that the
Board should appoint one of the Independent Non-Executive
Directors as senior Independent Director, which function is being
performed by Sir Robert Paul Reid. The senior Independent Director
is available to shareholders if they have concerns which contact
through the normal channels of chairman, chief executive or finance
head has failed to resolve or for which contact is inappropriate.
The Dutch Bill on Management and Supervision (Wet bestuur en
toezicht) which was recently enacted promotes that the board of
certain large Companies must be composed in a balanced manner
with at least 30% of the board members being women and at least
30% being men. This contemplated balance of the composition of
the board must, as much as possible, be taken into consideration
when, among others, proposing new board candidates for
appointment. The Company does not qualify as a “large company”
within the meaning of the said provision. It may however be noted
that the Company does not have any gender preference for board
candidates and such appointments are purely on the basis of the
‘best man/woman for the job’ principle.
The Company has adopted a share dealing code to ensure
compliance by the Directors and the employees of the Company
with the provisions of the AIM Rules for Companies and the Dutch
Financial Supervision Act (Wet op het financieel toezicht) relating to
dealings in securities of the Company.
The Company has adopted a schedule of matters reserved for
consideration by the Board, including approval of the Group’s long term
objectives and commercial strategy, approval of the annual operating
and capital expenditure budgets of the Group (and any material changes
thereto), changes relating to the Group’s management and control
structure, major changes to the Group’s corporate structure, approval
of the Group’s annual report and accounts, approval of the dividend
policy, ensuring maintenance of sound systems of internal control and
risk management, major capital projects, division of responsibilities
between the Chairman and Co-Chairman, the Chief Executive Officer
and other Directors and the making of political donations. Certain of
the matters described in the schedule of reserved matters are subject
to approval by the general meeting pursuant to Dutch law and/or the
Company’s articles of association.
As a practice, the Board members from time to time also visit the
oil and gas blocks held by the Company to review the progress and
operations at the facilities.
The assistance of the Company Secretary is available to the Non-
executive Directors who may, if needed, obtain independent
professional advice, at the Company’s expense, in the execution of
their duties.
Board Practices
The Company operates under a one-tier governance structure, with
the CEO responsible for day-to-day management and others for
supervising the day-to-day management of the Company. Under
this organization, all directors are formally managing directors
within the meaning of the Articles of Association and internal board
rules allocating to the CEO tasks and obligations similar to those
of executive directors, and to others tasks and obligations that are
similar to those of non-executive directors.
Committees
The Board has established Nomination, Remuneration and Audit
Committees, as mentioned below, with formally delegated duties
and responsibilities, and written terms of reference. In addition to
above and from time to time, the Board also establishes committees
for handling specific matters as may be necessary.
(a) Nomination Committee
The Nomination Committee assists the Board in discharging
its responsibilities relating to the composition of the Board.
The Nomination Committee is responsible for evaluating the
balance of skills, knowledge and experience on the Board, the
size, structure and composition of the Board, retirements and
appointments of additional and replacement directors and
makes appropriate recommendations to the Board on such
matters. The Committee has documented Terms of Reference
agreed by the Board and are also available on the Company’s
website.
The UK Corporate Governance Code provides that a majority
of the members of the Nomination Committee should
be Independent Non-Executive Directors. The Company’s
Nomination Committee is comprised of three members
namely Sir Robert Paul Reid, Mr Arun Kumar Duggal and
Mr Hari Shanker Bhartia, two of whom are Independent
Non-Executive Directors. The chairman of the Nomination
Committee is Sir Robert Paul Reid. The Company therefore
considers that it complies with the UK Corporate Governance
Code recommendations regarding the composition of the
Nomination Committee.
The Nomination Committee is required to meet at least once
each year and otherwise as may be considered necessary or as
the Chairman of the Committee may require. During the year,
the Committee held two meetings.
(c) Audit Committee
(b) Remuneration Committee
The Remuneration Committee assists the Board in determining
its responsibilities in relation to remuneration, including
Overview
making recommendations to the Board on the Company’s
policy on executive remuneration, determining the individual
remuneration and benefits package of each of the directors
with observance of the Company’s remuneration policy
and recommending and monitoring the remuneration of
senior management below Board level. The Committee has
documented Terms of Reference agreed by the Board and are
Business Review
also available on the Company’s website.
The UK Corporate Governance Code provides that the
Remuneration Committee should comprise at least three
members, all of whom should be Independent Non-Executive
Directors. The Company’s Remuneration Committee comprises
three members namely Sir Robert Paul Reid, Mr Arun Kumar
Duggal and Dr. Andrew William Wood, all of whom are
Governance
Independent Non-Executive Directors. The chairman of
the Remuneration Committee is Sir Robert Paul Reid. The
Company therefore considers that it complies with the UK
Corporate Governance Code recommendations regarding the
composition of the Remuneration Committee.
The Remuneration Committee considers all material elements
of remuneration policy, remuneration and incentives of
executive directors and senior management with reference to
Financials
independent remuneration research and professional advice
in accordance with the UK Corporate Governance Code and
makes recommendations to the Board on the framework
for executive remuneration and its cost. The Board is then
responsible for implementing the recommendations and
agreeing the remuneration packages of individual directors
with observance of the Company’s remuneration policy. The
Remuneration Committee is also responsible for making
recommendations for the grants of awards under the share
option schemes. In accordance with the committee’s terms of
reference, no director participates in discussions relating to
his own terms and conditions of remuneration. Non-executive
directors’ fees and the fees of the Chairman and Co-Chairman
are determined by the Board.
The report on Directors’ remuneration, which includes details
of the Directors’ interest in options together with information
on service contracts, is set out on pages 52-54 of this Annual
Report.
The Remuneration Committee is required to meet at least
once each year and otherwise as may be considered necessary
or as the Chairman of the Committee may require. During the
year, the Committee held four meetings.
The Audit Committee assists the Board in discharging its
responsibilities with regard to financial reporting, external
Annual Report & Accounts 2013 49
 and internal audits and controls, including reviewing the
Company’s annual financial statements, reviewing and
monitoring the extent of the non-audit work undertaken by
external auditors, advising on the appointment of external
auditors and reviewing the effectiveness of the Company’s
internal audit activities, internal controls, reviewing the
Company’s arrangements for its employees to raise concerns
about possible wrongdoing in financial reporting or other
matters, and risk management systems. The ultimate
responsibility for reviewing and approving the annual report
and accounts and the half yearly reports remain with the
Board. The committee focuses particularly on compliance with
legal requirements, accounting standards and the AIM Rules
and ensuring that an effective system of internal financial
and non-financial controls is maintained. The Committee has
documented Terms of Reference agreed by the Board and are
also available on the Company’s website.
recent and relevant financial experience and is chairman
of the Audit Committee. The Company therefore considers
that it complies with the UK Corporate Governance Code
recommendation regarding the composition of the Audit
Committee.
None of the members of the committee have links with the
Company’s external auditors. The Audit Committee meetings,
amongst others, are held to coincide with key dates within
the financial reporting and audit cycle of the Company and as
many times as the Committee may consider necessary for the
performance of its role and responsibilities.
The Audit Committee is required to meet at least once each
year and otherwise as may be considered necessary or as the
Chairman of the Committee may require. During the year, the
Committee held six meetings.

The UK Corporate Governance Code recommends that the
audit committee should comprise at least three members, all
of whom should be Independent Non-Executive Directors, and
that at least one member should have recent and relevant
financial experience. The membership of the Company’s
Audit Committee comprises three members namely Mr Arun
Kumar Duggal, Dr. Andrew William Wood and Sir Robert Paul
Reid, all of whom are Independent Non-Executive Directors.
Mr Arun Kumar Duggal is considered by the Board to have
Mr Arun Duggal, Chairman of the Audit Committee attended
the previous Annual General Meeting of the Company for
responding to any questions from the shareholders on the
Committee’s activities.
Attendance
Attendance records for Directors in the Board and the aforesaid
Committee meetings held during 2012-13 are set out below:

Name of the Director Board Nomination Remuneration Audit

No of No of No of No of No of No of No of No of
Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings
held Attended held Attended held Attended held Attended
Mr. Shyam Sunder Bhartia 7 7 - - - - - -
Mr. Hari Shanker Bhartia 7 7 2 2 - - - -
Mr. Ajay Khandelwal* 7 4 - - - - - -
Sir Robert Paul Reid 7 7 2 2 4 4 6 6
Mr. Arun Kumar Duggal 7 7 2 2 4 4 6 6
Dr. Andrew William Wood 7 7 - - 4 4 6 6
Mr. Shahzaad Siraj Dalal 7 3 - - - - - -
Mr Radhey Shyam Sharma** 7 1 - - - - - -
* resigned as Director on 7th February, 2013
** appointed as Director w.e.f. 21st March, 2013
In addition to taking decisions at meetings, during the year 2012- managed by the Company, receipt of regular input, receipt of reports
13, the Board also adopted written resolutions without holding a by the Board on financial matters, budgets, operations and services,
meeting. All the board members were acquainted of such resolution timely receipt of information with supporting papers, regular
and that the same was deemed as adopted only when the majority monitoring and evaluation of progress towards strategic goals and
of the members of the Board voted in favour of the resolution. operational performance, corporate governance practices, number
of board meetings, Committee structures and functioning etc.
Board Evaluation
A formal assessment of the performance of the Board, the Chairman The members concluded that the Board was operating in an
and the individual Directors was carried out last year. effective and constructive manner.

The Board’s assessment was discussed with the full Board evaluating,
amongst other things, the full and common understanding of
the roles and responsibilities of the Board, contribution towards
development of the strategy and ensuring robust and effective risk
management, understanding of the operational programmes being
Relationship Agreement with the Controlling Shareholders
Mr Shyam Sunder Bhartia and Mr Hari Shanker Bhartia, the Promoter
Directors, together with their affiliates, effectively control 85 per
cent. of the issued share capital of the Company. To ensure that
all transactions and relationships between the Group and Messrs

50 Jubilant Energy NV
Bhartia are at arm’s length and on a normal commercial basis, at
the time of the Company’s Initial Public offering in November, 2010
and its listing on the AIM market, the Company had entered into
a relationship agreement with Messrs Bhartia and Jubilant Energy
(Holding) B.V. If a conflict of interest arises between Messrs Bhartia
and the Company, Messrs Bhartia will not participate in the Board’s
decisions on such matter.
This agreement terminates if, amongst other things, Messrs Bhartias’
and their associates’ direct and indirect interests in the Company
fall below 30 per cent. or Messrs Bhartia and their associates
collectively ceasing to be the single largest shareholder group in
the Company.
Internal Controls
The Board is responsible for establishing the Group’s system
of internal controls and for reviewing its effectiveness. The
controls are designed to safeguard the assets of the Group and
to ensure the reliability of financial information both for internal
use and external publication. The controls cover the financial,
operational, compliance and management functions and are
reviewed on an on-going basis. A system of internal control
cannot provide absolute assurance that material irregularities
will be detected or that the risk of failure to achieve business
objectives is eliminated. The Board feels that the internal audit
function in the Company is commensurate with the size and
nature of its operations.
Directors’ Responsibilities
The responsibilities of the Directors are determined by applicable
law and International Financial Reporting Standards (IFRS) as
adopted by the European Union.
The Directors are responsible for preparing the annual report and
the annual financial statements in accordance with applicable law
and regulations.
The Dutch law requires the Directors to prepare financial statements
for each financial year that give, according to generally acceptable
standards, a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the companies that
are included in its consolidated accounts for that period, as well as
the Company’s solvability and liquidity.
The law further requires the Directors to prepare an Annual report
that gives a true and fair view of the position as per the balance
sheet date, the course of business during the past financial year and
the results of the Company and its affiliated companies included
in the annual financial statements, and that the Annual report
contains a proper description of the principal risks and uncertainties
the Company faces. Directors are required to abide by certain
guidelines in undertaking these tasks.
The Directors need to select appropriate accounting policies and
apply them consistently in their reports. They must state whether
they have followed applicable accounting standards, disclosing
Overview
and explaining any material departures in the financial statements.
Any judgments and estimates that Directors make must be both
reasonable and prudent.
Throughout the financial year, the Directors are responsible for
keeping proper accounting records which disclose at any time and
Business Review
with reasonable accuracy the financial position of the Company.
They are also responsible for ensuring that these statements comply
with applicable company law. In addition, they are responsible
for internal control systems that help identify and address the
commercial risks of being in business, and so safeguard the assets
of the Company. They are also responsible for taking reasonable
steps to enable the detection and prevention of fraud and other
irregularities. The Company’s website may be accessed in many
countries, which have different legal requirements. The Directors are
Governance
responsible for maintaining the accuracy of corporate and financial
information on the website, where a failure to update or amend
information may cause inappropriate decision making.
On the basis of the above, the Directors confirm that internal
controls over financial reporting within the Company provide a
reasonable level of assurance that the financial reporting does not
contain any material inaccuracies, and confirm that these controls
functioned properly during the year under review and that there
Financials
are no indications that they will not continue to do so. The financial
statements fairly represent the Company’s financial condition and
the results of the Company’s operations and provide the required
disclosures.
It should be noted that the above does not imply that these systems
and procedures provide absolute assurance as to the realization
of operational and strategic business objectives, or that they can
prevent all misstatements, inaccuracies, errors, fraud and non-
compliance with legislation, rules and regulations.
Website Publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. As was
done for the Annual Reports of the financial years 2010-11 and
2011-12, the financial statements for the financial year 2012-13
will be published on the Company’s website in accordance with
applicable Dutch law and the AIM Rules for Companies. The
Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Annual Report & Accounts 2013 51
 Remuneration Report
Jubilant Energy N.V., incorporated under the laws of The Netherlands,
is not governed by the provisions of the Companies Act 2006 (the
Act) nor by the Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2008 (the Regulations), which
are applicable to the companies incorporated under and governed
by the laws of the UK. This report has been prepared to provide
the shareholders and depository receipt holders of the Company
information on the philosophy and the process for payment
of remuneration and award of benefits to the members of the
Board and Senior Management of the Jubilant Energy N.V. and its
subsidiary companies (the “Group”).
The report is divided into separate sections for unaudited and
audited information, as produced below:
Unaudited Information
Remuneration Committee
The Remuneration Committee assists the Board in determining
its responsibilities in relation to remuneration, including making
recommendations to the Board on the Company’s policy on
executive remuneration, determining the individual remuneration
and benefit packages of each of the directors with observance of the
Company’s remuneration policy and recommending and monitoring
the remuneration of senior management below Board level. The
Board has established Terms of Reference for the Remuneration
Committee which are also available on the Company’s website.
The UK Corporate Governance Code provides that the Remuneration
Committee should comprise at least three members, all of whom
should be Independent Non-Executive Directors. The membership of
the Company’s Remuneration Committee comprises three members
namely Sir Robert Paul Reid, Mr Arun Duggal and Dr. Andrew William
Wood, all of whom are Independent Non-Executive Directors.
The chairman of the Remuneration Committee is Sir Robert Paul
Reid. The Company therefore considers that it complies with the
UK Corporate Governance Code recommendations regarding the
composition of the Remuneration Committee.
The Remuneration Committee considers all material elements of
the Company’s remuneration policy, remuneration and incentives
of executive directors and senior management with reference to
independent remuneration research and professional advice, as
necessary, in accordance with the UK Corporate Governance Code
and makes recommendations to the Board on the framework for
executive remuneration and its cost. The Board is then responsible for
implementing the recommendations and agreeing the remuneration
packages of individual directors with observance of the Company’s
remuneration policy. The Remuneration Committee is also responsible
for making recommendations for the grants of awards under the share
option schemes. In accordance with the committee’s terms of reference,
no director is involved in discussions relating to his own terms and
conditions of remuneration. Non-executive directors’ fees and the fees
of the Chairman and Co-Chairman are determined by the Board.
52 Jubilant Energy NV
The Remuneration Committee is required to meet at least once
each year and otherwise as may be considered necessary or as
the Chairman of the Committee may require. During the year, the
Committee held 4 meetings.
Remuneration Policy
The Group’s overall approach towards remuneration is to pay
and reward employees competitively taking into account both
the Company’s and individual’s performances. The objective is to
attract, retain and incentivise the employees and to encourage
enhanced performance thereby contributing to the success of the
organization.
The Company’s performance is measured on basis of the Key
Performance Indicators which are firmed up at the start of
the financial year and approved by the Board of Directors. The
Individual performance is also evaluated on the basis of individual
Key Deliverables and the relevant competencies.
The remuneration of the executive director(s) and of the senior
management primarily comprises of the following constituent
elements:
A. Salary and other benefits;
B. Performance bonus payments;
C. Long term incentive plan and;
D. Short term incentive plan.
In accordance with Dutch law, the current remuneration policy has
been adopted by the general meeting on 8th September 2010.
Service Contracts
Sir Robert Paul Reid, Mr Arun Kumar Duggal and Dr Andrew
William Wood have each entered into a contract for services as an
independent Non-Executive Director of the Company. Mr Radhey
Shyam Sharma, who was appointed during the year, has entered
into a contract for services as a Non Executive Non Independent
Director of the Company effective from 21st March, 2013. The
contract for each individual provides for a term of three years and
an annual fee of GBP 40,000 for Sir Robert Paul Reid and GBP
30,000 each for Mr Arun Duggal, Dr. Andrew William Wood and
Mr Radhey Shyam Sharma. Upon expiry of the term, the individuals
will become eligible for re-appointment subject to satisfactory
performance and re-election at the Company’s annual general
meeting. Either party can terminate the appointment by serving one
month’s written notice on the other, such notice ending on the last
day of a calendar month.
Mr Shyam S Bhartia, Mr Hari S Bhartia and Mr Shahzaad Siraj
Dalal have entered into contracts for services as Non-Executive
Chairman, Non-Executive Co-Chairman and Independent Non-
Executive Director, respectively. The terms of their appointment are
the same as the Independent Non-Executive Directors except that Company, the Company has adopted an Employee Stock Option

they have agreed to waive their directors’ fees.
Remuneration of the Board of Directors
Under the Dutch Corporate Law and as per the Articles of the
Company, the general meeting of the Company adopts the
remuneration policy, which sets out the principal guidelines
governing the remuneration of Directors. In line with the
Overview
Plan 2009 (the “Plan”). The operation of the Plan is supervised by
the Board / Remuneration Committee and has the following main
features:
Eligibility
Certain employees (including members of the Board but excluding

Remuneration Policy as adopted by the general meeting, the
remuneration of the Directors is determined by the Board which is
based on the recommendations of the Remuneration Committee.
No director is involved in discussions relating to his own terms and
conditions of remuneration.
In deciding on recommendations regarding the appropriate levels
of remuneration, the Committee amongst others, relies on up-to-
Business Review
non-executive directors) of the Company or any member of
the Group, along with others as approved by the remuneration
committee, are eligible to participate in the Plan. The Board may
in its absolute discretion grant options to eligible employees, not
being members of the Board, to acquire Ordinary Shares while
the Remuneration Committee may in its absolute discretion grant
options to eligible members of the Board, not being non-executive
directors, to acquire Ordinary Shares.

date information on a comparable companies operating in the oil
and gas sector. The individual salaries and benefits of Executive
Director(s) are reviewed and adjusted taking into account the
Company’s and individual performance and market factors. This is
to ensure that the levels of remuneration is sufficient to attract,
retain and motivate the executives of the quality required to run the
Company successfully, but the Company should avoid paying more
than is necessary for this purpose.
Governance
Under this plan, options may normally only be granted within
42 days after the announcement of the Company’s results
for any period or within such other time at which the Board or
Remuneration Committee (in the case of options to be granted to
the Board) determines that there are exceptional circumstances
which justify the grant of an option.
Individual Limits
No option may be granted under the Plan to any individual at any time

Financials
Remuneration of Senior Management if, as a result, it would entitle an individual to receive an aggregate
The Group’s remuneration policy aims to ensure that the members of such number of Ordinary Shares of the Company, together with
of the senior management are provided with appropriate incentives the Ordinary Shares already acquired by such individual pursuant to
to encourage enhanced performance and are adequately rewarded options previously exercised, as would exceed 1.5 per cent. of the
for their individual contributions to the success of the Company. issued ordinary share capital of the Company, determined as per
the date of granting the option, unless such proposal is approved
The remuneration of senior management consists of: by the Board.
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On any date, no option may be granted under the Plan if, as a result,
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the aggregate number of Ordinary Shares issued pursuant to grants
each year based on the Company’s and individual’s made after commencement of the Plan (i.e. 1st October 2009)
performance would exceed five per cent. of the issued ordinary share capital of
the Company, determined as per the date of granting the option,
In addition to the above mentioned bonus, to bring in a culture unless such proposal is approved by the Board.
of meritocracy, and to reward and recognize top performers, the
Company has also implemented a scheme for performance based Exercise Price
awards in form of share options. The Company’s Performance is The exercise price of an option is the price per Ordinary Share, as
determined by the Board after considering various factors including determined by the Board / Remuneration Committee, as the case
the Key Performance Indicator (KPI) score card while the individual may be, at the date of grant, which shall be either the fair market
performance is evaluated as per the Company’s policy. These are in value per Ordinary Share, or such other price per Ordinary Share as
addition to the options granted under the Employee Stock Option specified in the relevant notice of grant. The present exercise price
Plan as explained below. under the plan is 69.6 pence per share.

Employee Stock Option plan 2009 Exercise and Lapse of Options

To attract and retain appropriate professional and qualified In normal circumstances, an option can be exercised in accordance
employees of the Company, and to stimulate the active interest with a vesting schedule, specified by the Board / Remuneration
of such persons in the development and financial success of the Committee, as the case may be, in the notice of grant, over a period

Annual Report & Accounts 2013 53

 of four years from the date of grant provided that any performance
condition(s) to which it is subject have been fulfilled or waived. As
per the present vesting schedule, the vesting over the period of four
years will be in the ratio of 20% of the total grants at the end of
the first and second year following the date of grant and 30% of
the total grants at the end of the third and fourth year following
the date of grant.
If a participant ceases to be employed within the Group by reason
of (a) total and permanent disability; or (b) death, all options held
by such participant will immediately vest and remain exercisable
for a period of - in principle - 365 days following the cessation
of employment. If a participant ceases to be employed within the
Group by reason of retirement, a pro rata portion of his unvested
options will immediately vest, which will be determined at the
discretion of the Board / Remuneration Committee, as the case
may be, and remain exercisable for a period of - in principle - 365
days. Options will lapse automatically without any consideration
becoming payable at the end of the relevant 365 day period
referred to above.
If a participant ceases to be employed within the Group for any
reason other than those set out above, subject to the sole discretion
of the Board / Remuneration Committee, all outstanding options
granted to the participant will immediately vest and remain
exercisable for a period of - in principle - 180 days following the
date of termination of employment. After this period the options will
lapse automatically without any consideration becoming payable.
regulations or the dealing or insider trading rules of, or applicable
to, the Company or a member of the Group. An option will, in any
event, lapse on the eighth anniversary of its date of grant, if not
previously exercised.
Alterations of Share Capital
In the event of any variation in the share capital of the Company,
adjustments to the number of Ordinary Shares subject to options
and the exercise price may be made by the Company in such manner
as the Company considers in its opinion to be fair and reasonable.
Other Provisions
Options are not assignable or transferable. In the event of a
participant’s death an option is transferable to the participant’s
beneficiaries only by last will and testament or by the applicable
laws of descent and distribution.
The Plan is governed by and is construed in accordance with the
law of The Netherlands.
Audited Information
Remuneration of Board of Directors for the Financial Year 2012-13
The following tables sets out the remuneration of the members of
the Board of Directors during the financial year 2012-13. In addition
to the amounts set forth below, the Company reimburses its officers
for their actual out-of-pocket expenses incurred while conducting
the Company’s business.

The relevant periods referred to above will be extended if the

relevant exercise would temporarily be prohibited by law, securities

S No Name Designation Salary No of ESOP No of ESOPs

granted vested
1 Mr Shyam Sunder Bhartia Non-Executive Chairman Nil
2 Mr Hari Shanker Bhartia Non-Executive Co Chairman Nil
3 Mr Ajay Khandelwal Ex-Chief Executive Officer INR 24,896,360* # #
4 Sir Robert Paul Reid Non-Executive Director and Senior Independent GBP 40,000
Director
5 Mr Arun Kumar Duggal Independent Non-Executive Director GBP 30,000
6 Dr. Andrew William Wood Independent Non-Executive Director GBP 30,000
7 Mr. Shahzaad Siraj Dalal Independent Non-Executive Director Nil
8 Mr Radhey Shyam Sharma Non Independent Non-Executive Director GBP 904**
* excluding performance bonus of INR 87,28,500/-.
# consequent upon Mr Ajay Khandelwal ceasing to be the CEO & Director of the Company, the ESOPs granted to him and the ESOPs vested
and not exercised were forfeited
**The remuneration of Mr. Radhey Shyam Sharma is from date of his appointment viz. 21 March 2013.

Sir Robert Paul Reid

Chairman
Remuneration Committee
26th June, 2013

54 Jubilant Energy NV
 Report of the Managing Directors
The Managing Directors herewith submit their report for the sixth
financial year of the Company ended 31st March 2013.
The Company
Jubilant Energy N.V. (‘the Company’ or ‘Jubilant’) is a limited liability
company incorporated under the Dutch law, with its office address
at Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands.
The Company’s registration number with the Trade Register of the
Chamber of Commerce in Amsterdam is 34276031.
Principal Activity
Jubilant Energy N.V. is the holding company for a group of
companies engaged in the upstream oil and gas exploration and
production sector with a portfolio of interests in exploration,
appraisal, development and producing assets. The group holds
interests in six key blocks of which five are in India and one in
Myanmar. Out of these blocks, one is a producing field, one under
appraisal, development and near term production, one block with
two notified discoveries and the rest of the blocks are in various
stages of appraisal and exploration. The group has sole operator
responsibilities in four of these blocks.
Jubilant’s principal strategy is to maximize the opportunity by
building and exploiting its diverse portfolio of exploration cum
appraisal, development and producing oil and gas assets and
hence create sustainable shareholder value. In particular, Jubilant
will seek to monetize the value of its reserves and convert its
resources to reserves through focused and economical appraisal
and development programs.
Business Review
The Company, through its subsidiary companies, holds participating
interests in various oil and gas blocks in India and Myanmar.
The key assets in the Company’s portfolio include the Krishna
Godavari Block (the ‘KG Block’), the oil producing Kharsang Field,
one block in Tripura, two blocks in Manipur and the block in
Myanmar, acquired last year.
KG Block (KG-OSN-2001/3)
The Company’s single largest asset is the KG Block which is located
offshore on the East coast of the state of Andhra Pradesh in South-
east India and in which it holds a 10% participating interest.
As informed in the previous year, the government has approved the
extension of the existing development area of the block by 20.5
square kms increasing the total Mining lease to 37.5 square kms.
Gaffney Cline & Associates (“GCA”) prepared a Reserves &
Resources update for the Deen Dayal Structural complex as of
31st May, 2012, post the approval of the Deen Dayal West (DDW)
Extension area and the drilling of the appraisal wells in the Deen
Dayal East (DDE) area. The Gross Contingent Resources (2C) for the
block has been revised upwards by approximately 11% for gas and
Overview
10.2% for condensate over the estimates of 30th June, 2010. The
Gross 2P gas reserves have been estimated at 1612 bcf and 32.2
mmbbl for condensate, while the Gross Contingent Resources (2C)
estimates are 5,999 bcf for gas and 125.7 MMbbl for condensate.
The Best Estimate Unrisked Prospective Resources for DDNE-BRU
Rift Fill Prospect is 4,455 bcf with a geological chance of success
(GCoS) of 40% and for DD Downthrown Strat Lead is 823 bcf with
Business Review
a GCoS of 15%.
The facilities set up for commercial production of gas are more than
90-95% complete in most cases and the first gas from the DDW
Field is expected in Q4 2013.
Based on the appraisal programme, an integrated Declaration of
Commerciality (“DOC”) proposal for the six natural gas discoveries
Governance
within the block, namely, KG-16 in DDE area, KG-22 in DDN area,
KG-21 and KG-31 in DDW-DT area, KG-19 and KG-20SS in DDNE-
BRU area was submitted to the Directorate General of Hydrocarbons
(“DGH”), India in February 2013.
This submission has been supported by all necessary technical and
economic data, evaluation, interpretation and analysis of data and
feasibility studies relating to the discoveries and other relevant
information. A confirmation from the Management Committee of
Financials
the said DOC, will take us one step closer to converting the 2C
resources into 2P reserve category.
Kharsang Field
The Kharsang Field, located in the Upper Assam basin in the North-
eastern region of India, is the Company’s oldest block. The Company
holds a 25% Participating Interest in the field.
During the year, the consortium successfully concluded the seven
wells Phase III development drilling programme with six of the
seven wells tested oil and have been put on production with
initial production of approximately 700 bopd. The remaining well
tested gas and has been kept shut for future gas utilization, as it is
commercially viable.
The field has 67 wells (68th under drilling), of which 31 wells
were in production as at 31st March 2013. The field is at present
producing in excess of 2,000 bopd, achieving its highest ever
recorded production of 2,253 barrels of oil on 23rd October 2012.
The average production from the field during 2012-13 was 1,968
bopd as against an average gross production of 1,806 bopd in the
previous year. The cumulative oil production till March 2013 was
10.84 mmbbl and the remaining oil reserves were 4.44 mmbbl.
Consequent to the Phase III development drilling programme and
in line with the Company’s strategy to maximise the potential of its
producing assets, a Phase III Extension Development drilling plan
comprising six infill wells commenced in February 2013, aimed at
Annual Report & Accounts 2013 55
 further adding to the production profile of the Kharsang field. Three A second deeper exploration well to complete the Phase-II Minimum
wells under this campaign are under production, one is being tested Work Programme, North Atharamura-1 on the Atharamura
and another one is currently being drilled. Anticline, was spudded in February 2013 and currently drilled to
a depth of 3,400 meters. The acquisition of 252 lkms appraisal
The consortium is also piloting various other projects in order to seismic and 125 lkms exploration seismic is also completed. The
increase the production from the Kharsang field, such as Sand Company filed two notices of discovery with the DGH in May, 2013
Control, Wax Inhibition, Multi-Zone Single String and Dual String post successful conventional testing of middle Bhuban and lower
Completion and Gas Lifting Using CNG. Bhuban formations in the North Atharamura-1 well. This is the first
well drilled on North Atharamura Anticline with an aerial extension
The 3D seismic acquisition which started during the year has been of about 560 sq kms.
completed and the data acquired is under processing.
Manipur Blocks (AA-ONN-2009/1 and AA-ONN-2009/2)
A Reserves and Resources estimation was prepared by Gaffney Jubilant is the Operator in the two blocks in Manipur, viz. block
Cline & Associates (“GCA”) as of 31st December 2011, updating its nos AA-ONN-2009/1 and AA-ONN-2009/2, and holds a 100%
earlier estimate as of 30th June 2010. The highlights of the reserves Participating Interest.
and resources update are:
As informed in the previous year, Jubilant embarked upon a 2D
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seismic acquisition programme of 540 lkms in the two Manipur
adjusting for production blocks and has acquired more than 200 lkms of 2D seismic. Jubilant
contracted Bell Industries to undertake a 5,273 lkms airborne full
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tensor gradiometer survey and this was completed in November
bcf, with 2C gas resources at 27.7 bcf, an increase of 45% 2011. This survey was the first of its kind in India, and processing
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and interpretation of the resultant data was completed in mid-April
3.85 MMbbls, with a 2C Oil resource of 3.13 MMbbls, an 2012. The data is now being integrated with the current geological
increase of 286% dataset.
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Seven long and narrow double-plunging folds NNE-SSW trending
Prospective Resources: surface anticlines have been identified in the Manipur Blocks based
- Namsang Oil Prospects: 2.6 MMbbls with GCoS of 75% on satellite imagery, geological surveys and structural modelling.
- Lower Girujan Oil Prospects: 9.9 MMbbls with GCoS of The Best Estimate Prospective Resources assessment for the two
50% Blocks, estimated by GCA gives the appraisal as of 31st March
- Lower Girujan Gas Prospect: 102 Bscf with GCoS of 2012 of 7.08 tcf on an un-risked basis, which updates the previous
50% assessment as of 30th June 2010 of 4.77 tcf on an un-risked basis.

- Tipam Gas Prospect: 296 Bscf with GCoS of 50%
Tripura Block (AA-ONN-2002/1)
Jubilant is the Operator of this block and holds a 20% Participating
Interest. The block is located onshore in the fold belt area of the
Assam-Arakan Basin in North-east India.
As part of the minimum work programme commitment under
Phase I, three exploration wells were drilled. Two of the three
wells, viz., Kathalchari-1 and Ambasa North, were declared as
discovery wells. Two appraisal wells, Srikantabari-1 (SK-A1) and
KL-NE were drilled to appraise the Kathalchari-1 discovery. In
December 2012 the Company submitted the proposal for DOC
for the Kathalchari discovery after incorporating the results of the
wells drilled in the Tulamura anticline (Srikantabari-1, KL-NE and
Matabari-1).
The Consortium entered the Phase-II exploration programme by
drilling Matabari-1 in the Tulamura anticline. Matabari-1 well was
spudded in May 2012 to explore the hydrocarbon potential of the
Lower Miocene Lower Bhuban and Late Oligocene Renji sands as
primary objectives and the Middle Bhuban sands as a secondary
objective. This was the first exploratory well in the Block targeting
deeper objectives beyond the Middle Bhuban.
Myanmar (PSC-I)
Jubilant ventured into the Republic of the Union of Myanmar
through the acquisition of block no. PSC-I awarded under the
Myanmar Onshore Blocks Bidding Round in 2011.
The Production Sharing Contract (PSC) for the block was executed
at Nay Pyi Taw on 28th May 2012 between Jubilant, Parami Energy
Development Company Limited (Parami) and Myanma Oil & Gas
Enterprise (MOGE), an enterprise formed by the government of the
Republic of the Union of Myanmar.
Jubilant holds a 77.5% Participating Interest in this block through
its subsidiary Jubilant Oil & Gas Private Limited, India and is
the Operator of the block. Parami holds the remaining 22.5%
participating interest in this block.
The block covers an area of approximately 3,600 sq km and
is located about 125 kilometres North West of Yangon City. The
block falls in the Irrawaddy Delta Sub-basin and partly in the Pyay
Embayment Sub-basin of the Central Burma Basin, which is believed
to be one of the most prolific sedimentary basin in Myanmar, where
giant fields such as Chauk-Lanywa and Yenangyaung are located.
The awarded block is also located adjacent to the Myanaung and
Shwepyitha producing fields.

56 Jubilant Energy NV
A reconnaissance survey of the block was successfully completed
in July 2012. As well as scouting the area for understanding
topography, terrain, logistics, availability of infrastructure / facilities
etc, the team also located and scouted the well sites for the four
existing wells to evaluate the option for re-entry. The Sub-surface
technical work is underway.
structure of the Group and on other relevant matters, is included in
the Notes to the Consolidated Financial Statements of the Company
as of 31st March 2013, which should be read with this report.
Directors
The following directors served the Company during the period

Overview
under review:
The Commencement of Operations Date (COD) in the block was
announced to MOGE on 23 August, 2012. Name of Appointment Resignation
Designation
Director date date
Further, the Company has awarded the contract for acquiring 700 Mr Shyam 14th June
– Chairman
lkms 2D seismic in the block. Sunder Bhartia 2007
Mr Hari Shanker 14th June

Business Review
– Co-Chairman
Subsidiary Companies Bhartia 2007
The Company has a total of 11 subsidiary companies in Netherlands, Mr Ajay 8th September 7th February
CEO
Canada, Cyprus and India. During the year under review, there Khandelwal 2009 2013
was no change in the number of subsidiary companies. However Sir Robert Paul 14th June Non-executive
–
Company’s subsidiary company in India set up a Branch office in Reid 2007 Director
Myanmar which was registered under the name of Jubilant Oil & Mr Arun Kumar 14th June Non-executive
–
Gas Private Limited (Myanmar Branch). Duggal 2007 Director
Dr Andrew 7th January Non-executive
–

Governance
Financial information William Wood 2010 Director
During the financial year ended 31st March 2013, the consolidated Mr Shahzaad 16th February Non-executive
–
income of the Company and its subsidiaries amounted to USD 18.8 Siraj Dalal 2011 Director
million (previous year USD 19.1 million). The operating revenue Mr Radhey Non-
for the year was USD 17.8 million as against USD 17.4 million in Shyam Sharma 21st March executive Non
–
the previous year. The consolidated loss for the year under review 2013 Independent
amounted to USD 9.7 million (previous year loss of USD 12.8 million). Director
The decrease in loss was mainly on account of decrease in personnel
The Company operates under a one-tier governance structure,
cost which was largely due to reversal in stock options expense on

Financials
with the Chief Executive Officer (CEO) responsible for day-to-
account of stock options forfeited on employee separation.
day management and others for supervising the day-to-day
management of the Company. Under this organization, all
As disclosed in the Admission Document at the time of the
directors are formally managing directors within the Articles of
Company’s IPO, the Board’s intention is to reinvest any net cash
Association and internal board rules allocating to the CEO tasks
generated from operations to finance the growth and expansion
and obligations similar to those of executive directors, and to other
of its business. In view of this and the fact that Company has
tasks and obligations that are similar to those of non-executive
accumulated losses, no dividend has been proposed by the Board.
directors. The CEO who was the sole Executive Director, resigned
from the services of the Company in February 2013, which led
During the year the Company signed a Rupee Loan agreement for a
to the position of CEO presently being vacant. The Board has
term loan facility of INR 13,400 million (equivalent to approximately
appointed a Committee comprising of the Chief Financial Officer
USD 247 million) with a consortium of banks for funding the capital
and the Chief Operating Officer to manage and supervise the day
expenditure of KG block development and for repayment of existing
to day business and operations of the Company, till such time a
term loan facility of INR 6,500 million (equivalent to approximately
new CEO is appointed.
USD 120 million). In addition, the Company has also entered into
funding agreements with two Jubilant Bhartia Group companies for
As mentioned in previous year’s report, the Board, amongst others,
availing unsecured loans aggregating upto USD 42 million. These
has constituted the three Committees as required under the UK
funds will be applied to funding operating activities and general
Corporate Governance Code, being Audit Committee, Nomination
capital of the Company.
Committee and the Remuneration Committee. The present
constitution of the Committees is as follows:
The Company has net debt of USD 410 million (previous year
net debt of USD 273 million). The cash balance available to the Nomination Remuneration
Company amounted to USD 22 million. The Company is exploring Audit Committee
Committee Committee
various medium- to long-term funding options. Mr Arun Kumar Sir Robert Paul Sir Robert Paul
Duggal – Chairman Reid – Chairman Reid – Chairman
Detailed information on the accounting for the oil and gas assets of Mr Hari Shanker Mr Arun Kumar
the Group, the financial and business, various funding instruments Sir Robert Paul Reid
Bhartia Duggal
availed by the Group, financial risk management, cash flow, Dr Andrew William Mr Arun Kumar Dr Andrew William
important business events occurring after 31st March 2013, the Wood Duggal Wood

Annual Report & Accounts 2013 57

 In addition to the above mentioned, from time to time, the Board
constitutes committees, as may be necessary for handling specific
matters.
Directors and their interests
As at 31st March 2013, to the best of the Company’s knowledge,
the following Directors had interest in the shares of the Company:
Name of the No. of shares as at Percentage of
Director 31st March 2013 capital
Mr Shyam Sunder

145.
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%

174,892,078 42.01
Bhartia*
Mr Hari Shanker
174,892,078 42.01
Bhartia*

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*As on 31st March, 2013 Messrs Bhartia each held an indirect interest of 174,892,078
Ordinary Shares/Depository Interests of the issued share capital of the Company by

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virtue of the fact that they, along with their respective family members, hold 50% each
in Jubilant Enpro Private Limited which through its subsidiary company viz Jubilant
Energy (Holding) B.V. holds 84.02 % of the Company’s capital. As on the date of this
report, Jubilant Energy (Holding) B.V held 85% of Company’s Capital.
Mr Shahzaad Dalal does not hold any shares in his personal
capacity in the Company. However, Mr Dalal is a director of Tara
India Holdings A Ltd, which holds 8,162,285 Ordinary Shares in
the Company, representing 1.96% of the issued share capital of
Jubilant Energy N.V.
During the financial year under review, in addition to the
remuneration paid to Mr Ajay Khandelwal who ceased to be the CEO
& Director of the company on 7th February 2013, remuneration was
paid to four of the non-executive Directors of the Company, being
Sir Robert Paul Reid, Mr Arun Kumar Duggal, Dr Andrew William
Wood and Mr Radhey Shyam Sharma. For details refer to Note 34 of
the Consolidated Financial Statements of the Company as of 31st
March 2013 which should be read with this report.
Except for the transaction disclosed in Note 34 to the Consolidated
Financial Statements, none of the Directors were materially interested
in a contract existing during or at the end of the year.
Personnel
The Company does not have any direct employees, other than the Board
Members. During the financial year under review, the average number
of employees in the subsidiary companies was approximately 100.
The employees are vital for the ongoing success and growth of
business of the Company. Therefore, it is important that all levels
of staff are involved in its decision-making processes. To this end,
the Company has an open culture and flexible structure and staff
is encouraged formally and informally to become involved in
discussions on the Company’s future strategy and developments.
The eligible employees have also been offered an Employee Stock
Option Plan (‘the Plan’) which encourages them to contribute to and
share in the success of the Company. No options have been exercised
by any of the employees to date. Further details on the Plan are included
in Note 20 to the Consolidated Financial Statements of the Company
as of 31st March 2013 which should be read with this report.
58 Jubilant Energy NV
Research and Development
Jubilant is continuously researching new technologies and
techniques in order to improve its ability and efficiency to find
and produce hydrocarbons. The company invests in education
and relationships with third party vendors in order to improve the
technologies it uses to carry out exploration and production.
Following are some of the relatively new/rarely used technologies
which were used by Jubilant over the last one year:
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Corporate Social Responsibility
Jubilant has adopted Corporate Social Responsibility (CSR) as
an integral part of its growth and has devised a ‘Corporate
Sustainability Policy’ and ‘Charter for CSR’. It is committed to abide
by its Corporate Sustainability Policy across all its functions.
In line with the Corporate Sustainability Policy to improve the living
status of society where we operate, the Company has identified
areas of improvement where a timely intervention can help the
betterment of the society.
The options of short-term or long-term interventions are exercised
by the Company based on the disposition of local social needs.
Depending on its nature, the schemes are implemented through
NGOs, local government, and community-based organisations.
Various CSR schemes have been implemented through local NGOs,
local government and community-based organizations apart from
activities through the Company’s own initiatives.
The Company’s commitment towards its CSR initiative, amongst others,
included health check-up camps for the local villagers, free distribution
of medicines to senior citizens, eye check-up camps and distribution of
spectacles, financial support to underprivileged and needy people, etc.
The primary beneficiaries include local communities, workers
employed with Company’s contractors, as well as migrant labourers.
Internal Controls
The Board is responsible for establishing the Group’s system of
internal controls and for reviewing its effectiveness. The controls are
designed to safeguard the assets of the Group and to ensure the
reliability of financial information both for internal use and external
publication. The controls cover the financial, operational, compliance
and management functions and are reviewed on an on-going basis.
A system of internal control cannot provide absolute assurance that
material irregularities will be detected or that the risk of failure to
achieve business objectives is eliminated. The Board feels that the
internal audit function in the Company is commensurate with the
size and nature of its operations.
Computerisation
The Company uses BAAN as the Enterprise Resource Planning (ERP)
system for, amongst others, accounting, budgetary controls and
Airport Hotel, Schiphol Boulevard 101, 1118 BG Amsterdam, The
Netherlands. The formal notice of the meeting is being enclosed
within these accounts.
The business to be dealt with at the said meeting includes:

procurement, which is commensurate with the size and complexity
of operations.
Risk Management
The Company has a robust risk management framework covering
identification, mitigation and monitoring operational and financial
Overview
1. the annual report (the ‘Annual Report’) and annual accounts
(the ‘Annual Accounts’) for the year ended 31st March 2013;
2. granting discharge from liability to the members of the Board
of Directors over the financial year ended 31st March 2013;
3. the proposal to re-appoint Mr Shyam Sunder Bhartia as a

risks. The Company also has a comprehensive Treasury Policy
which covers currency exposure, liquidity, investment and financial
instruments. Please refer to Note 37 on Financial Risk Management
4.
to the Consolidated Financial Statements of the Company as of
31st March 2013 which should be read with this report.
Going Concern 5.
The Directors are satisfied that the Group has adequate resources to
continue to operate for the foreseeable future and has adopted the
Business Review
non-executive Director of Jubilant Energy N.V. for a period of
three years and designated as Chairman
the proposal to re-appoint Mr Hari Shanker Bhartia as a non-
executive Director of Jubilant Energy N.V. for a period of three
years and designated as Co-Chairman
the proposal to re-appoint Mr Arun Kumar Duggal as a non-
executive Director of Jubilant Energy N.V. for a period of three
years

going concern basis in preparing the financial statements. Please refer
to Note 2 (b) in the Consolidated Financial Statements of the Company
as of 31st March 2013 which should be read with this report.
Events after the reporting date
The events which have occurred after the reporting date can be found
in Note 38 to the Consolidated Financial Statements of the Company
as of 31st March 2013, which should be read with this report.
Governance
6. the proposal to re-appoint Sir Robert Paul Reid as a non-executive
Director of Jubilant Energy N.V. for a period of three years
7. granting KPMG Accountants N.V. the instruction to audit Jubilant
Energy N.V.’s annual accounts over the financial year 2013-14.
Directors’ statement as to the disclosure of information
to auditors
Each of the Directors, who were all members of the Board at the

Financials
Directors and officers indemnity insurance time of approving the Annual Report, confirms that:
The Company maintains insurance against claims by third parties
against its Directors and officers in respect of their lawful actions in t
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connection with the discharge of their duties as officers of the Company. of which the Company’s Auditors are unaware; and
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Substantial or Significant shareholders
Directors in order to make themselves aware of any relevant
At 31st March 2013, to the best of Company’s knowledge, the
audit information and to establish that the Company’s
following shareholders/DI holders fell under the category of
Auditors are aware of that information.
‘significant shareholders’ as defined in the AIM Rules for companies:
Number of % age of paid-up Acknowledgement
Name of the The Directors place on record their deep appreciation of the efforts
Shares/ DIs Equity Capital of
shareholder made and the support given by its advisers and concerned parties.
held the Company
Jubilant Energy
349,784,156* 84.02%* Your directors also express their sincere appreciation for the
(Holding) B.V.
Samena Special dedicated and sincere services rendered by the employees of the
25,370,129 6.09%
Situations Fund L.P. Group at all levels.
Dynamic funds 13,467,772 3.24%
Managing Directors:
* post 31st March 2013, increased to 353,865,298 representing 85% of the paid 26th June 2013
up capital
Shyam Sunder Bhartia
Apart from this, the Company is not aware of any additional Hari Shanker Bhartia
interests amounting to 3% or more held by any person or entity in Robert Paul Reid
the share capital of the Company. Arun Kumar Duggal
Andrew William Wood
Annual General Meeting Shahzaad Siraj Dalal
The Annual General Meeting of the Company will be held at 2.30 Radhey Shyam Sharma
pm on Friday, the 30th August, 2013 at the Sheraton Amsterdam

Annual Report & Accounts 2013 59

 Independent Auditor’s Report
To: The Board of Directors and the Shareholders of Jubilant
Energy N.V.
Report on the financial statements
We have audited the accompanying financial statements for the
year ended 31 March 2013 of Jubilant Energy N.V., Amsterdam,
which comprise the consolidated and company statement of
financial position as at 31 March 2013, the consolidated and
company statements of comprehensive income, changes in equity
and cash flows for the year then ended and the notes, comprising
a summary of the significant accounting policies and other
explanatory information.
Management’s responsibility
Management is responsible for the preparation and fair presentation
of these financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union
and with Part 9 of Book 2 of the Netherlands Civil Code, and for the
preparation of the report of the Board of Directors in accordance
with Part 9 of Book 2 of the Netherlands Civil Code. Furthermore,
management is responsible for such internal control as it determines
is necessary to enable the preparation of the financial statements
that are free from material misstatement, whether due to fraud or
error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with Dutch law, including the Dutch Standards on
Auditing. This requires that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the
60 Jubilant Energy NV
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view
of the financial position of Jubilant Energy N.V. as at 31 March
2013 and of its result and its cash flows for the year then ended
in accordance with International Financial Reporting Standards as
adopted by the European Union and with Part 9 of Book 2 of the
Netherlands Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirements under Section 2:393 sub 5 at
e and f of the Netherlands Civil Code, we have no deficiencies to
report as a result of our examination whether the report of the
Board of Directors, to the extent we can assess, has been prepared
in accordance with Part 9 of Book 2 of this Code, and whether
the information as required under Section 2:392 sub 1 at b - h
has been annexed. Further, we report that the report of the Board
of Directors, to the extent we can assess, is consistent with the
financial statements as required by Section 2:391 sub  4 of the
Netherlands Civil Code.
Amstelveen, 26 June 2013
KPMG Accountants N.V.
P. Mizrachy RA
 Consolidated Statement of Financial
Position
As at 31 March 2013

(In thousands of US dollars) Note As at As at

Overview
31 March 2013 31 March 2012
Assets
Inventories 6 969 898
Short-term investments 7 - 24,857
Current tax assets 1,719 1,834
Trade and other receivables 8 30,380 26,852

Business Review
Other current assets 9 922 847
Cash and cash equivalents 10 22,607 56,287
Total current assets 56,597 111,575
Property, plant and equipment 11 195,971 117,694
Intangible exploration and other intangible assets 12 224,064 193,153
Trade and other receivables 13 1,057 970
Other non-current assets 15 1,683 1,889
Total non-current assets 422,775 313,706
Total assets 479,372 425,281

Governance
Equity
Issued and paid-up share capital 24 5,581 5,581
Share premium 24 105,047 105,047
Retained earnings (111,807) (105,909)
Stock options outstanding reserve 20,24(5) 6,066 12,358
Foreign currency translation reserve 24(4) (17,323) (14,879)
Total equity (12,436) 2,198
Liabilities
Loans and borrowings 16 48,440 16,051

Financials
Trade and other payables 17 21,557 23,058
Current tax liabilities 513 536
Other current liabilities 18 809 1,094
Total current liabilities 71,319 40,739
Loans and borrowings 16 393,945 360,695
Trade and other payables 22 - 254
Employee benefits 19 673 604
Provisions 21 2,972 1,332
Deferred tax liabilities 14 22,765 19,321
Other non-current liabilities 134 138
Total non-current liabilities 420,489 382,344
Total liabilities 491,808 423,083
Total equity and liabilities 479,372 425,281
The Notes on pages 65 to 117 are an integrated part of these Consolidated Financial Statements.

Annual Report & Accounts 2013 61

 Consolidated Statement of Comprehensive
Income
For the year ended 31 March 2013

(In thousands of US dollars) Note For the year ended For the year ended
31 March 2013 31 March 2012
Oil and natural gas revenue 25 17,764 17,372
Other income 26 1,044 1,691
18,808 19,063
Production and operating expenses 3,171 2,370
Personnel costs 27 2,663 3,599
Share-based payment expense/(reversal) 20 (2,486) 4,140
Depletion, depreciation and amortisation 28 2,291 3,286
Impairment loss on intangible exploration assets 12&29 1,647 -
Other expenses 30 4,636 4,848
Results from operating activities 6,886 820
Finance income 31 3,023 2,400
Finance expenses 31 13,301 9,662
Net finance expense (10,278) (7,262)
Loss before income taxes (3,392) (6,442)
Income tax expense 32 (6,312) (6,354)
Loss for the year attributable to the Owners of the company (9,704) (12,796)
Other comprehensive income
Foreign currency translation difference for foreign operations (2,444) (6,672)
Income tax on other comprehensive income - -
Other comprehensive income for the year, net of income tax (2,444) (6,672)
Total comprehensive income for the year attributable to the (12,148) (19,468)
Owners of the company
Basic and diluted loss per share (USD) 33 (0.023) (0.031)
The Notes on pages 65 to 117 are an integrated part of these Consolidated Financial Statements.

62 Jubilant Energy NV
 Consolidated Statement of Changes In
Equity
For the year ended 31 March 2013

Attributable to owners of the Company

Overview
(In thousands of US dollars) Share capital Share Retained Stock options Foreign currency Total equity
(Footnotes 1 premium earnings outstanding translation
and 2) (Footnote 2) reserve reserve
(Footnote 2) (Footnote 2)
Balance as at 1 April 2011 5,581 105,047 (93,113) 8,196 (8,207) 17,504
Total comprehensive income

Business Review
for the year
Loss for the year - - (12,796) - - (12,796)
Other comprehensive income
Foreign currency translation - - - - (6,672) (6,672)
reserve
Total other comprehensive - - - - (6,672) (6,672)
income
Total comprehensive income - - (12,796) - (6,672) (19,468)
for the year

Governance
Transactions with owners,
recorded directly in equity
Contribution by/to owners of
Equity
Share-based payment transactions - - - 4,162 - 4,162
- - - 4,162 - 4,162
Balance as at 31 March 2012 5,581 105,047 (105,909) 12,358 (14,879) 2,198

Balance as at 1 April 2012 5,581 105,047 (105,909) 12,358 (14,879) 2,198

Financials
Total comprehensive income
for the year
Loss for the year - - (9,704) - - (9,704)
Other comprehensive income
Foreign currency translation - - - - (2,444) (2,444)
reserve
Total other comprehensive - - - - (2,444) (2,444)
income
Total comprehensive income - - (9,704) - (2,444) (12,148)
for the year
Transactions recorded directly
in equity
Contribution by/to owners of
Equity
Share-based payment transactions
- Transfer to retained earnings for - - 3,806 (3,806) - -
vested share options forefeited
during the year
- Share-based payment expense/ - - - (2,486) - (2,486)
(reversal) for the year (net)
- - 3,806 (6,292) - (2,486)
Balance as at 31 March 2013 5,581 105,047 (111,807) 6,066 (17,323) (12,436)
Footnotes:
1) Refer to Note 2b) of Consolidated Financial Statements.
2) Refer to Note 20 and 24 of Consolidated Financial Statements.
The Notes on pages 65 to 117 are an integrated part of these Consolidated Financial Statements.

Annual Report & Accounts 2013 63

 Consolidated Statement of Cash Flows
For the year ended 31 March 2013

(In thousands of US dollars) Note For the year ended For the year ended
31 March 2013 31 March 2012
Cash flows from operating activities
Loss after tax for the year (9,704) (12,796)
Adjustments for:
Depletion and depreciation 28 2,095 3,150
Amortisation of other intangible assets 28 196 136
Impairment losses on intangible exploration and other intangible assets (net) 29 1,647 -
Net finance expenses 9,640 6,890
Equity-settled share-based payment expense 20 (2,486) 4,162
Income tax expense 32 1,771 1,139
Deferred tax expense 32 4,541 5,215
Loss on sale/disposal of property, plant and equipment 30 90 7
Change in assets and liabilities, net
Change in inventories (110) (313)
Change in receivables and other assets 1,529 (919)
Change in payables, provisions and other liabilities (1,340) 239
Change in employee benefits 95 383
Cash generated from operating activities 7,964 7,293
Income tax paid (net) (244) (820)
Net cash generated from operating activities 7,720 6,473
Cash flows from investing activities
Interest received 1,880 1,241
Acquisition of property, plant and equipment, intangible exploration assets (85,568) (56,066)
and other intangible assets
Proceeds from disposal of property, plant and equipment 11 1
Loans given - (580)
Change in advances to co-venturers (4,411) (3,058)
Investment in non-trade investments (mutual funds) (50,451) (87,526)
Proceeds from disposal of non-trade investments (mutual funds) 75,515 62,665
Investment in term deposits and restricted cash (3,840) (766)
Proceeds from disposal of term deposits and restricted cash 2,881 2,342
Tax paid on interest income (1,480) (389)
Net cash used in investing activities (65,463) (82,136)
Cash flows from financing activities
Proceeds from loans and borrowings 199,431 140,760
Payment of debt transaction cost (2,353) (300)
Repayment of loans and borrowings (125,965) (571)
Interest paid (45,309) (34,564)
Net cash generated from financing activities 25,804 105,325
Net (decrease)/increase in cash and cash equivalents (31,939) 29,662
Cash and cash equivalents
Cash and cash equivalents at beginning of financial year 10 56,287 32,175
Effect of exchange rate fluctuations (1,741) (5,550)
Cash and cash equivalents at end of financial year 10 22,607 56,287
The Notes on pages 65 to 117 are an integrated part of these Consolidated Financial Statements.

64 Jubilant Energy NV
 Notes to the Consolidated Financial
Statements
1. Organisation and nature of operations

Overview
Incorporation and history
Jubilant Energy N.V. (‘the Company ‘or ’JENV') was incorporated on 12 June 2007, in Amsterdam, the Netherlands, as a company with
limited liability. The registered office of the Company is Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands. The Company is
a subsidiary of Jubilant Energy (Holdings) B.V. (JEHBV), a Netherlands company, which in turn is a wholly-owned subsidiary of Jubilant
Enpro Private Limited (‘Jubilant Enpro’), a company incorporated under the laws of India. On 24 November 2010, the Company
commenced trading on Alternative Investment Market (AIM), London.

Business Review
The Group is engaged in the exploration for and development and production of oil and natural gas. It conducts many of its activities
jointly with others. These Consolidated Financial Statements reflect only the Group’s proportionate interest in such activities.

The list of subsidiaries of the Company along with their principal activity, their respective date of incorporation and country of
incorporation is as follows:
Name of the subsidiary Principal activity Date of Country of Ownership
companies incorporation incorporation
Jubilant Energy International B.V. Oil and natural gas exploration, 28 June 2007 Netherlands Direct

Governance
(JEIBV) development and production
Jubilant Energy Limited (JEL Investment company and oil and natural gas 21 September Canada Direct
Canada) exploration, development and production 2004
Jubilant Energy India Holding Investment company (intermediate holding 4 August 2004 Cyprus Indirect
Limited (JEIHL) company of JEIL)
Jubilant Oil & Gas India Holding Investment company (intermediate holding 5 August 2004 Cyprus Indirect
Limited (JOGIHL) company of JOGIL)
Jubilant Resources India Holding Investment company (intermediate holding 5 August 2004 Cyprus Indirect
Limited (JRIHL) company of JRIL)

Financials
Jubilant Energy Holding (V) Limited Investment company (intermediate holding 13 May 2005 Cyprus Indirect
(JEHVL) company of JEIVL)
Jubilant Energy India Limited (JEIL)* Investment company (intermediate holding 5 August 2004 Cyprus Indirect
company of JODPL)
Jubilant Oil & Gas India Limited Investment company (intermediate holding 5 August 2004 Cyprus Indirect
(JOGIL) company of JOGPL)
Jubilant Resources India Limited Investment company (intermediate holding 6 August 2004 Cyprus Indirect
(JRIL)* company of JEKPL)
Jubilant Energy India (V) Limited Investment company (intermediate holding 13 May 2005 Cyprus Indirect
(JEIVL)* company of JENVPL)
Jubilant Offshore Drilling Private Oil and natural gas exploration, 12 March 2004 India Indirect
Limited (JODPL) development and production
Jubilant Oil & Gas Private Limited Oil and natural gas exploration, 4 September India Indirect
(JOGPL) development and production 1992
Jubilant Energy (Kharsang) Private Oil and natural gas exploration, 20 January India Indirect
Limited (JEKPL) development and production 1997
Jubilant Energy (NELP – V) Private Oil and natural gas exploration, 13 March 2007 India Indirect
Limited (JENVPL) development and production

*On 3 August 2011, pursuant to a restructuring and merger plan approved by the Court of Law, JEIL, JRIL and JEIVL have been
merged into JOGIL. Since this was a common control transaction, it does not have any accounting impact in the Consolidated
Financial Statements.

The Group has a 100% controlling interest in all of the subsidiaries except as follows:
- JOGIL holds a 99.99% controlling interest in JODPL, JOGPL and JEKPL as at 31 March 2013 and 31 March 2012.

- JOGIL holds a 99.80% controlling interest in JENVPL as at 31 March 2013 and 31 March 2012.

Annual Report & Accounts 2013 65

 The Group is a member of eleven unincorporated joint ventures for the exploration and development of the following blocks:
Name of blocks Participating interest
Kharsang 25%
Krishna Godavari 10%
Tripura 20%
Manipur (2 blocks)** 100%
Myanmar*** 77.5%
Ahmedabad (Sanand Miroli) 20%
Golaghat# 10%
Cauvery# 30%
Mehsana# 30%
Australia *# 38.46%
*Pursuant to the Deed Assumption Agreement entered into by the Group with the operator, the Group has acquired an additional 13.46%
interest in the block w.e.f 23 August 2011. Also refer to Note 38.
**Joint venture between three subsidiaries (JODPL, JOGPL and JEKPL), hence 100% for the Group as a whole.
***The Production Sharing Contract (PSC) for the block was executed at Nay Pyi Taw on 28 May 2012 between the Group, Parami Energy
Development Company Limited (Parami) and Myanmar Oil & Gas Enterprise (MOGE) (an enterprise formed by the Government of the
Republic of the Union of Myanmar).
#Refer to Note 29

2. Basis of preparation and measurement

a) Statement of compliance
The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union (EU).

The Consolidated Financial Statements have been authorised for issue by the Board of Directors in its meeting held on
26 June 2013.

b) Basis of preparation
JEL Canada was incorporated in 2004 as a wholly-owned subsidiary of JEHBV with Jubilant Enpro as the ultimate holding
company. Following the incorporation of the Company in June 2007, JEL Canada was assigned and contributed to the Company
in November 2008.

JENV was incorporated on 12 June 2007 as a wholly-owned subsidiary of JEHBV and acquired controlling interest in another
Dutch entity, viz. JEIBV in June 2007. JENV acquired a 100% equity in JEL Canada from JEHBV in November 2008. Prior to
the acquisition, both JENV and JEL Canada were held by JEHBV which was the holding company of both the entities. Post
acquisition also, JEHBV continues to be the holding company of JENV and JEL Canada (through JENV) with Jubilant Enpro as
an ultimate holding company. Therefore, JEL Canada continued to be controlled by the same shareholders before and after the
acquisition by JENV. Accordingly, this was considered as a business combination under common control.

In respect of the above, the Company had made an accounting policy choice to use book value accounting on the basis that
the entities were under the common control. Accordingly, the Consolidated Financial Statements of JEL Canada were included
in the Consolidated Financial Statements of the Company on the basis of book values as per IFRS and were not subjected to
determination of fair values.

The Consolidated Financial Statements of the Company as at and for the year ended 31 March 2013 comprise the Company
and its subsidiaries (together referred to as the ‘Group’ and individually as ‘Group entity’) and the Group’s proportionate
interest in jointly controlled assets in unincorporated joint ventures.

Preparation of Consolidated Financial Statements on a going-concern basis

The Group has incurred significant losses during the year ended 31 March 2013 and year ended 31 March 2012, has negative
equity of USD 12,436 thousand at 31 March 2013 and a negative working capital of USD 14,722 thousand. The group has
obtained from the ultimate parent company – Jubilant Enpro Private Ltd – unequivocal assurance for financial support for
continued operations of JENV upto June 2014, should this be required and has prepared the financial statements on a going
concern basis. In assessing whether the going-concern assumption is appropriate, the management has taken into consideration
the following additional factors:

66 Jubilant Energy NV
 i) The Group has significant hydro carbon reserves/resources as confirmed in competent person’s report.

ii) The Group is working on a range of strategic options for the business and its medium to long term funding.

iii) The Group has, during the year, tied up funding arrangements for the capital expenditure on development of its key asset,
viz., KG block.

Overview
iv) Kharsang block is a producing block and has a history of profitable operations, generating internal accruals on a consistent
basis. Additionally, its key asset, KG block is likely to commence production of hydro carbons in year 2013, thus there
would be additional internal accruals.

v) The Group may approach various financing resources from outside agencies/banks/financial institutions based on the

Business Review
estimates of reserves/resources as evaluated by independent expert.

Based on the above, the management has assessed that going-concern assumption is appropriate.

c) Basis of measurement
The Consolidated Financial Statements have been prepared on the historical cost basis except for the following:
- Derivative financial instruments: measured at fair value.

- Certain non-derivative financial liabilities which are designated at fair value through profit or loss: measured at fair value.

Governance
- Held for trading financial assets are measured at fair value (fair value through profit or loss).

- Crude oil inventory: measured at net realisable value.

The methods used to measure fair values are discussed further in Note 4.

d) Functional and presentation currency

Financials
Functional currency is the currency of the primary economic environment in which an entity operates and is normally the
currency in which the entity primarily generates and expends cash.

These Consolidated Financial Statements are presented in US dollars, which is also the functional currency of the Company. All
entities in the Group have the US dollar as their functional currency except the Indian entities which have the Indian rupee as
their functional currency.

All financial information of the Group has been rounded to the nearest thousand, unless otherwise stated. Refer to Note 37c)i
for exchange rates applied to currencies which are generally used by the Group.

e) Use of estimates and judgment

The preparation of the Consolidated Financial Statements requires management to make judgments, estimates and assumptions
that affect application of accounting policies and the reported amounts of assets, liabilities, expenses and incomes and disclosure
of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting
periods. Actual results could differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on
the amounts recognised in the Consolidated Financial Statements is included in the following notes:

i) Functional currency
Functional currency is the currency of the primary economic environment in which the entity operates. In determining the
functional currency of an entity, the Group emphasises the currency that determines the pricing of the transactions that it
undertakes, rather than focusing on the currency in which those transactions are denominated.

Annual Report & Accounts 2013 67

 Further, the Group entities also consider the following factors in determining their functional currency:
a) the currency:
- that mainly influences sales prices for goods and services;

- of the country whose competitive forces and regulations mainly determine the sales prices of its goods and
services;

b) the currency that mainly influences labour, material and other costs of providing goods or services.

The Group entities also consider certain supplementary factors in determining the functional currency:
a) The currency in which funds from financing activities are generated.

b) The currency in which receipts from operating activities are usually retained.

In determining the functional currency of a foreign operation, and whether its functional currency is the same as that of
the reporting entity, the Group considers the following additional factors:
- whether the activities of the foreign operations are carried out as an extension of the reporting entity, rather than
being carried out with a significant degree of autonomy;

- whether transactions with the reporting entity are a high or a low proportion of the foreign operation's activities;

- whether cash flows from the activities of the foreign operation directly affect the cash flows of the reporting entity
and are readily available for remittance to it;

- whether cash flows from the activities of the foreign operation are sufficient to service existing and normally expected
debt obligations without funds being made available by the reporting entity.

When the above indicators are mixed and the functional currency is not obvious, management uses its judgment to
determine the functional currency that most faithfully represents the economic effects of the underlying transactions,
events and conditions.

Refer to Note 2d) for the functional currency of the Group entities.

ii) Accounting for exploration and evaluation costs of oil and natural gas assets
IFRS 6 requires the Group to develop an accounting policy specifying which expenditures are recognised as Exploration
and Evaluation (E&E) assets and apply the policy consistently. In making this determination, it considers the degree to
which the expenditure can be associated with finding specific oil and natural gas reserves. The Group incurs various types
of expenditures that might be included in the initial measurement of exploration and evaluation assets, viz., acquisition
of rights to explore; topographical; geological; geochemical; and geophysical studies; exploratory drilling; trenching;
sampling; and activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral
resource.

In respect of E&E assets, the Group has an accounting policy choice of expensing or capitalising any of the E&E expenditures.
The Group has adopted the policy of capitalising the E&E expenditure. The accounting policy followed by the Group in
respect of E&E costs has been documented in Note 3D).

iii) Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are included in the following notes:
Measurement of defined benefit obligations and other long-term employment benefits
Measurement of employee defined benefit obligations is sensitive to the actuarial assumptions. The Group considers that
the assumptions used to measure its obligations are appropriate and the basis of these assumptions has been detailed in
Note 19.

68 Jubilant Energy NV
 Recoverable amount of Property, Plant and Equipment (PPE), intangible exploration assets and other intangible
assets
The recoverable amount of PPE, intangible exploration assets and other intangible assets is based on estimates and assumptions
regarding, in particular, the expected market outlook and future cash flows. Any changes in these assumptions may have a
material impact on the measurement of the recoverable amount and could result in impairment.

Overview
IFRS 6 requires the Group to identify a Cash Generating Unit (CGU) as the smallest identifiable group of assets that generates
cash inflows which are largely independent of the cash inflows from other assets or groups of assets. The CGU cannot be larger
than an operating segment.

The Group considers the following factors while determining the CGU:
- Cost of tracking an individual component versus the benefit

Business Review
- Capability of the asset being used separately

- Useful economic life of the components

- Inseparability of economic benefits of the individual components

Based on the factors mentioned above, the Group has identified each oil and natural gas asset (‘block’ or a ‘Production Sharing
Contract’) as a separate CGU for the purpose of impairment testing.

Governance
Useful life of PPE and intangible assets
The estimated useful life of PPE and intangible assets is based on a number of factors including the effects of obsolescence, demand,
competition and other economic factors (such as the stability of the industry and known technological advances) and the level of
maintenance expenditures required to obtain the expected future cash flows from such assets.

The Group reviews the useful life of PPE and intangible assets at the end of each reporting date.

Financials
Refer to Notes 3D) and E) for the Group’s policy in this regard and refer to Notes 11 and 12 for carrying amounts of PPE and intangible
assets.

Oil and natural gas reserves

Reserves are those quantities of hydrocarbons anticipated to be commercially recoverable by application of development projects to known
accumulations from a given date onwards under defined conditions. Reserves must further satisfy four criteria: they must be discovered,
recoverable, commercial and remaining (as of the evaluation date) based on the development project(s) applied. Reserves are further
categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity
and/or characterised by development and production status.

The reserves are estimated annually by the Operator of the relevant block or by the management based on internal best estimates or
independent expert’s evaluation.

Annual adjustments in reserves include changes in estimates, volume of produced oil and natural gas as well as discoveries made during
the year. A reduction in the reserves would result in an increased rate of depletion charge.

Refer to Note 3D) for the Group’s policy in this regard.

Site restoration obligation

The assessments undertaken in recognising provisions and contingencies is made in accordance with IAS 37, ‘Provisions, Contingent
Liabilities and Contingent Assets’.

A provision is recognised only when the Group has a present obligation and it is probable that rehabilitation/restoration costs will be
incurred at a future date. An obligation exists when there is no realistic alternative but to undertake the rehabilitation/restoration or when
the entity becomes legally or constructively obliged to rectify damage caused and restore the environment. A provision is recognised when
a reasonable estimate of the obligation can be made. The amount recognised as a provision is the best estimate of the expenditure to be
incurred.

Annual Report & Accounts 2013 69

 Refer to Note 3J) for the basis of the provision for site restoration obligations and refer to Note 21 for the carrying amount of the provision.

Income taxes
The Group is subject to income taxes in a number of tax jurisdictions. Significant judgment is required for determining provision in respect
of income taxes. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences impact the income
tax and deferred tax provisions in the period in which such determination is made.

Additionally, probability for realisation of deferred tax asset on accumulated losses and temporary differences is assessed based on various
existing factors as of reporting date. Any changes in those factors impact the income tax and deferred tax provisions in the period in which
such determination is made.

Refer to Note 3N) for Group’s policy in this regard.

Valuation of financial instruments

Refer to Notes 3C), 4iii) and iv).

3. Summary of significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these Consolidated Financial
Statements and have been applied consistently by the Group entities.

A) Basis of consolidation
i) Subsidiaries
The Consolidated Financial Statements present the accounts of the Company and all of its subsidiaries, which are controlled
by it. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies
of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are
exercisable are taken into account. The financial statements of subsidiaries have been prepared for the same reporting
period as those of the Group. The accounting policies of subsidiaries are changed when necessary to align them with the
policies adopted by the Group.

The financial statements of subsidiaries are included in the Consolidated Financial Statements using the acquisition
method of accounting from the date that control commences until the date that control ceases, except in case of business
combinations under common control as described in detail in Notes 2b and 3A)iv).

ii) Jointly controlled assets

Many of the Group’s oil and natural gas activities also involve jointly controlled assets. The Consolidated Financial
Statements include the Group’s share of these jointly controlled assets and liabilities and a proportionate share of relevant
revenue and related operating costs. Generally, one of the venturers acts as an Operator of the jointly controlled assets
under the provisions of the relevant production sharing contract/permit.

iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the Consolidated Financial Statements. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.

iv) Acquisitions under common control

Business combinations arising from transfer of businesses that are under the control of the shareholders that control the
Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented
or, if later, at the date that common control was established. For this purpose, comparatives are revised. The assets
and liabilities acquired are recognised at the carrying amounts recognised previously in the financial statements of the
respective transferor entity.

B) Foreign currency
i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on a monetary
item is the difference between its amortised cost in the functional currency at the beginning of the period, adjusted for

70 Jubilant Energy NV
 effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange
rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was
determined. Foreign currency differences are recognised in profit or loss. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Overview
ii) Foreign operations
The assets and liabilities of foreign operations are translated to US dollars at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to US dollars at exchange rates at the date of transaction or at
the average exchange rate if it approximates the exchange rates at the date of transaction.

Foreign currency differences are recognised in the other comprehensive income. These are presented within equity in

Business Review
the foreign currency translation reserve (translation reserve or FCTR). When a foreign operation is disposed of such that
control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that
foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only
part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the
cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment
in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to profit or loss

C) Financial instruments

Governance
i) Non-derivative financial assets
The Group initially recognises loans and receivables on the date they are originated. All other financial assets (including
assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all
the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets
that is created or retained by the Group is recognised as a separate asset or liability.

Financials
Financial assets and liabilities are offset and the net amount is presented in the Consolidated Statement of Financial
Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets comprising financial assets at fair value through profit or loss
and loans and receivables.

a) Financial assets at fair value through profit or loss

A financial asset is classified at fair value through profit or loss if it is classified as held for trading or when it is
designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the
Group manages such investments and makes purchase and sale decisions based on their fair value in accordance
with the Group’s risk management or investment strategy. Attributable transaction costs are recognised in profit or
loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein
are recognised in profit or loss.

Financial assets at fair value through profit or loss comprises investments in mutual funds.

b) Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less
any impairment losses.

Loans and receivables mainly comprise trade and other receivables and cash and cash equivalents.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and at bank and term deposits held with banks with original

Annual Report & Accounts 2013 71

 maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of
the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the
Consolidated Statement of Cash Flows. Cash and cash equivalents also includes short-term highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.

ii) Non-derivative financial liabilities

The Group initially recognises debt securities issued on the date they are originated. All other financial liabilities are
recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

The Group’s non-derivative financial liabilities mainly comprise loans and borrowings and trade and other payables.

Such financial liabilities (other than financial liabilities designated at fair value through profit or loss) are recognised
initially at fair value as adjusted by any directly attributable transaction costs. Subsequent to initial recognition, these
financial liabilities are measured at amortised cost using the effective interest method except for those designated as at
fair value upon initial recognition which are measured at fair value.

Financial liabilities at fair value through profit or loss are measured at fair value, and changes thereon are recognised in
profit or loss. Financial liabilities are designated at fair value through profit or loss if the instrument is of hybrid nature
(includes an embedded derivative) and the Group is unable to determine reliably the fair value of embedded derivative on
the basis of its terms and conditions.

Financial assets and liabilities are offset and the net amount is presented in the Consolidated Statement of Financial
Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.

iii) Ordinary share capital

Ordinary shares and share issue expenses
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax effects.

Preference share capital

Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company’s option, and
any dividends are discretionary. Dividends thereon are recognised as distributions within equity upon approval by the
Company’s shareholders.

Preference share capital is classified as a financial liability if it is redeemable on a specific date or at the option of the
shareholders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest expense in
profit or loss as accrued. As at the reporting date, the Group has issued mandatorily redeemable preference shares with
non-discretionary dividend. At inception, these preference shares have been recorded at fair value. Subsequent to initial
recognition such financial liabilities are measured at amortised cost using the effective interest method. Dividends thereon
are recognised as interest expense in profit or loss unless capitalised on a qualifying asset as accrued using the effective
interest method.

iv) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible debentures or other similar instruments that
can be converted to share capital at the option of the holder, and the number of shares to be issued is fixed.

The liability component of a compound financial instrument and embedded derivatives in the host contract, if any, is
recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity
component, if any, is recognised initially at the difference between the fair value of the compound financial instrument as a
whole and the fair value of the liability component and embedded derivative in the host contract. Any directly attributable
transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured

72 Jubilant Energy NV
 subsequent to initial recognition. Refer to Note 3C)v) below for policy on derivative financial instruments including
embedded derivatives.

Interest, losses and gains relating to the financial liability are recognised in profit or loss unless capitalised on a qualifying
asset. Distributions to the equity holders are recognised against equity, net of any tax benefit.

Overview
v) Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is
positive and as financial liabilities when the fair value is negative. Attributable transaction costs are recognised in profit or
loss as incurred.

Business Review
Embedded derivatives are separated from the host contract and accounted for separately if economic characteristics and
risks of the host contract and embedded derivative are not closely related, a separate instrument with the same terms as
the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair
value through profit or loss. Changes in the fair value of separable embedded derivatives are recognised immediately in
profit or loss.

D) Property, plant and equipment and intangible exploration assets

i) Recognition and measurement
The Group accounts for exploration and evaluation (‘E&E’) costs, having regard to the requirements of IFRS 6 ‘Exploration

Governance
for and Evaluation of Mineral Resources’. Costs of exploring for and evaluating oil and natural gas properties are capitalised
and the resulting intangible E&E assets are tested for impairment by reference to CGUs. Such CGUs are not larger than an
operating segment.

E&E costs related to each exploration license (‘block’ or ‘production sharing contract’ or ‘permit’) are initially capitalised
within ‘intangible exploration assets’. Such E&E costs may include costs of license acquisition, technical services and
studies, seismic acquisition, exploration drilling and testing, directly attributable overhead and administration expenses,
including remuneration of personnel and supervisory management, and the projected costs of retiring the assets (if any),
but do not include general prospecting or evaluation costs incurred prior to having obtained the legal rights to explore an

Financials
area, which are expensed directly to the Consolidated Statement of Comprehensive Income as they are incurred.

Tangible assets acquired for use in exploration and evaluation activities are classified as property, plant and equipment.
However, to the extent that such a tangible asset is consumed in developing an intangible exploration asset, the amount
reflecting that consumption is recorded as part of the cost of the intangible exploration asset.

Intangible exploration assets are not depleted and are carried forward until technical feasibility and commercial viability
of extracting a mineral resource is considered to be determined. The technical feasibility and commercial viability of
extracting a mineral resource is considered to be determined when proved and/or probable reserves are determined to
exist and a development plan is in place. A review of each block (‘production sharing contract’/’permit’) is carried out,
at least annually, to ascertain whether proved and/or probable reserves have been discovered. Upon determination of
proved and/or probable reserves and development of a development plan, E&E assets attributable to those reserves are
first tested for impairment using CGUs and then reclassified from intangible exploration assets to producing properties, a
separate category within property, plant and equipment.

Items of property, plant and equipment are measured at cost less accumulated depletion and depreciation and accumulated
impairment losses.

Costs related to items in property, plant and equipment include expenditure that is directly attributable to the acquisition
of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly
attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing
the items and restoring the site on which they are located and capitalised borrowing costs. Purchased software that is
integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment, including oil and natural gas interests, are

Annual Report & Accounts 2013 73

 determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are
recognised net within ‘other income’ or ‘other expenses’ in profit or loss.

ii) Subsequent costs

Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs of replacing
parts of property, plant and equipment are included in the cost of respective asset only when they increase the future
economic benefits embodied in the specific asset to which they relate. All other expenditures are recognised in profit or
loss as incurred. Such capitalised costs generally represent costs incurred in developing proved and/or probable reserves
and bringing in or enhancing production from such reserves and are accumulated on a block-by-block (oil and natural gas
asset) basis.

The carrying amount of any replaced or sold component is derecognised.

The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

iii) Depletion and Depreciation

The net carrying value of producing properties is depleted using the unit of production method by reference to the ratio of
production in the year to the related proved developed reserves.

Proved reserves are those quantities of hydrocarbons which by analysis of geo-science and engineering data, can be
estimated with reasonable certainty to be commercially recoverable, from a given date onwards, from known reservoirs
and under defined economic conditions, operating methods and government regulations. Developed reserves are expected
quantities to be recovered from existing wells and facilities. Reserves are considered developed only after the necessary
equipment has been installed, or when the costs to do so are relatively minor compared to the cost of a well.

Proved developed reserves are estimated by Operator of the relevant block or by the management based on internal best
estimates or independent expert’s evaluation. These estimates are reviewed at least annually.

Tangible assets, such as drilling, production or well equipment available for use in exploration and evaluation activities are
depreciated over their estimated useful lives on a straight-line basis since this most closely reflects the expected pattern
of consumption of the future economic benefits embodied in the asset.

For other assets, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each
part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and
their useful lives, unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is
not depreciated.

The estimated useful lives for tangible assets for current and comparable years are as follows:
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NBDIJOFSZ 8 - 9 years
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1 - 2 years
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FRVJQNFOU 6 years
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Depreciation methods, useful lives and residual values are reviewed at each reporting date.

E) Other intangible assets

Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated
amortisation and accumulated impairment losses.

Subsequent expenditure is capitalised only when it meets the definition of intangible asset and it is probable that the future
economic benefits that are attributable to the asset will flow to the entity and the cost can be measured reliably. All other
expenditure is recognised in profit or loss as incurred.

74 Jubilant Energy NV
 Amortisation
Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line
basis over the estimated useful lives of other intangible assets from the date that they are available for use, since this most
closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives for the current and comparative periods are as follows:

Overview
t
$PNQVUFS
TPGUXBSF 4 years
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-FBTFIPME
SJHIUT 5 years

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

F) Leased assets

Business Review
Leases where the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon
initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.

Other leases are operating leases, which are not recognised on the Group’s Consolidated Statement of Financial Position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Governance
Minimum lease payments made under finance leases are apportioned between the finance expenses and the reduction of the
outstanding liability. The finance expenses are allocated to each year during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.

Financials
G) Inventories
Inventories comprising stores and spares (excluding capital stores which are capitalised under intangible exploration assets) are
measured at lower of cost and net realisable value. The cost of inventories is based on the first-in-first-out principle, and includes
expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated costs
necessary to make the sale.

In the case of crude oil inventories, the value is determined on the basis of net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

H) Impairment
i) Non - Derivative Financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether
there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss
event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated
future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, the disappearance of an active market for a security. In addition, for an investment in an equity security,
a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables both at a specific asset and collective level. All individually
significant receivables are assessed for specific impairment. All individually significant receivables are assessed for specific
impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been
incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by
grouping together receivables with similar risk characteristics. In assessing collective impairment, the Group uses historical
trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s

Annual Report & Accounts 2013 75

 judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or
less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired
asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of
impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than E&E assets, inventories and deferred tax assets,
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated. E&E assets are assessed for impairment when they are reclassified
to property, plant and equipment, as producing properties, and also if facts and circumstances suggest that the carrying
amount exceeds the recoverable amount. These facts and circumstances include expiry of the license period to explore in
the near future, substantial expenditure on further E&E activities not being budgeted/planned, no discovery of commercial
quantities of mineral resources, management’s decision to discontinue activities in the specific areas etc.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the ‘cash-
generating unit’ or ‘CGU’). The recoverable amount of an asset or a CGU is the greater of its value in use and its fair value
less costs to sell. The Group has identified each of its block (i.e. a ‘production sharing contract’/’permit’) as a separate CGU.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. When testing
producing properties or E&E assets, the block (i.e. a ‘production sharing contract’/’permit’) is considered to be a CGU.
Value in use is generally computed by reference to the present value of the future cash flows expected to be derived from
production of proved and probable reserves.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated to reduce
the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

Impairment losses recognised in prior years are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of depletion and depreciation or amortisation, if
no impairment loss had been recognised.

I) Employee benefits
i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into
fund maintained by the Government of India and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss
in the periods during which related services are rendered by employees. Prepaid contributions are recognised as an asset
to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution
plan which are due for more than 12 months after the end of the period in which the employees render the service, are
discounted to their present value.

ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation
in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods. The benefit is discounted to determine its present value. Any
unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is based on the
prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating
the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected
to be paid.

76 Jubilant Energy NV
 The calculation is performed annually by an actuary using the projected unit credit method. When the calculation results in
a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present
value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions
to the plan. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of
the plan liabilities.

Overview
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is
recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent
that the benefits vest immediately, the expense is recognised immediately in profit or loss.

The Group recognises all actuarial gains and losses arising from defined benefits plan in profit or loss.

Business Review
iii) Other long-term employee benefits
Benefits under the Group’s compensated absences constitute other long-term employee benefits.

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees
have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present
value, and the fair value of any related assets is deducted. The discount rate is based on the prevailing market yields of
Indian government securities as at the reporting date that have maturity dates approximating the terms of the Group’s
obligations. The calculation is performed by an actuary using the projected unit credit method. Any actuarial gains or losses
are recognised in profit or loss in the period in which they arise.

Governance
iv) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably.

Financials
v) Employee stock option scheme
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service
and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an
expense is based on the number of awards that do meet the related service and non-market performance conditions
at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the
share-based payment is measured to reflect such conditions and there is no true-up for differences between expected
and actual outcomes. In case of modification of the share based payment award, the Group recognizes the effect
of modification that increase the total fair value of the share based payment awards. The incremental fair value is
recognized over the revised vesting period. The effect of modification that decrease the total fair value of the share
based payment awards is ignored.

Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity
instruments are accounted for as equity-settled share-based payment transactions.

J) Provisions and contingent liabilities

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of discount is recognised as
finance cost.

Site restoration
The Group’s core activities give rise to dismantling, decommissioning and site disturbance remediation activities. A provision is
made for the estimated cost of site restoration which is capitalised in the relevant asset category unless it arises from the normal
course of production activities, in which case it is recognised in profit or loss.

Annual Report & Accounts 2013 77

 Provisions are measured at the present value of management’s best estimate of expenditure required to settle the present
obligation on the basis of inputs provided by the Operator at the reporting date. Subsequent to the initial measurement, the
obligation is adjusted at the end of each reporting period to reflect the passage of time and changes in the estimated future
cash flows underlying the obligation. The increase in the provision due to passage of time is recognised as finance costs,
whereas increases/decreases due to changes in the estimated future cash flows are capitalised. Actual costs incurred upon
settlement of the site restoration obligation are charged against the provision to the extent the provision was established.

K) Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events not wholly within the control of the Group. Where it is not probable
that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed
as a contingent liability, unless the probability of outflow of economic benefits is remote.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the
receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.

L) Revenue
Revenue from the sale of crude oil in the course of ordinary activities is measured at the fair value of the consideration received
or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised on transfer of crude oil to the customer
when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return
of products can be estimated reliably, there is no continuing management involvement with the products, and the amount of
revenue can be measured reliably.

The Group’s share of crude oil sold is determined after allocation of profit petroleum payable to the Ministry of Petroleum and
Natural Gas, Government of India, as per the provisions of relevant Production Sharing Contract (PSC).

Profit petroleum
The amounts payable to the Government of India under the PSC are based on the profit sharing statement prepared on a
quarterly basis by the Operator of the PSC and are payable in the same quarter. These amounts are recognised on an accrual
basis.

M) Finance income and expenses

Finance income comprises interest income on funds invested, dividend income, and gains from changes in the fair value of
financial assets or liabilities at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss,
using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive
payment is established.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, losses due to changes
in the fair value of financial assets or liabilities at fair value through profit or loss, dividend on preference shares classified as
liability and impairment losses recognised on financial assets.

Borrowing costs that are directly attributable to the acquisition, construction or erection of qualifying assets are capitalised
as part of the cost of such asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready
for its intended use or sale. Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare
the qualifying assets for their intended use are complete. Borrowing costs that are not directly attributable to acquisition,
construction or production of a qualifying asset are recognised in the statement of comprehensive income using the effective
interest method.

Borrowing costs include exchange differences (both exchange gains and losses) arising from foreign currency borrowings to the
extent that they are regarded as an adjustment to interest costs. Other foreign currency gains and losses are reported on a net
basis as either finance income or finance expense depending on whether foreign currency movements are in a net gain or net
loss position.

N) Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

78 Jubilant Energy NV
 Current tax is the expected tax payable or receivable on the taxable income or loss for the reporting period, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a

Overview
business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in
subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.
In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. The
measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted

Business Review
or substantively enacted by the reporting date. Deferred tax consequences of temporary differences that originate in the tax
holiday period and reverse after the tax holiday period are recognised in the period in which these differences originate.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that

Governance
it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as and when the liability
to pay the related dividends is recognised.

In determining the amount of current and deferred tax the Company takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate
for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This
assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information

Financials
may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such
changes to tax liabilities will impact tax expense in the period that such a determination is made.

O) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding
during the reporting period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

P) Segment reporting
The Group has adopted IFRS 8, 'Operating Segments' which became effective as of 1 January 2009. An operating segment is
a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group’s other components. All operating segment’s operating
results are reviewed regularly by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated
to the segment and assess its performance, and for which discrete financial information is available.

The Group has only one reportable segment, i.e., oil and natural gas. Accordingly, the Group has made relevant entity-wide
disclosures (refer to Note 5).

Q) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 March
2013 and have not been early applied in preparing these separate financial statements. These standards and amendments are
as below:

Effective for annual periods beginning on or after 1 January 2015:

- IFRS 9 ‘Financial Instruments’: IFRS 9 is a part of the IASB's wider project to replace IAS 39 ‘Financial Instruments:
Recognition and Measurement’. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary

Annual Report & Accounts 2013 79

 measurement categories for financial assets, amortised cost and fair value. The basis of classification depends on the
entity's business model and the contractual cash flow characteristics of the financial assets.

Effective for annual periods beginning on or after 1 January 2014:

- Offsetting Financial Assets and Financial Liabilities (amendment to IAS 32): The Amendments to IAS 32 clarify when:
a. an entity currently has a legally enforceable right to set off; and

b. gross settlement is equivalent to net settlement.

- Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27): It requires qualifying investment entities to recognize
their investments in controlling entities in a single line item in the statement of financial position, measured at fair value
through profit or loss.

- Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36): These narrow-scope amendments to
IAS 36 Impairment of Assets address the disclosure of information about the recoverable amount of impaired assets if
that amount is based on fair value less costs of disposal. Under the amendments, recoverable amount is required to be
disclosed only when an impairment loss has been recognised or reversed.

- IFRIC 21 Levies: The IASB issued interpretation 21 Levies which provide guidance on accounting for levies in accordance
with the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The interpretation clarifies that
the wording of the relevant legislation drives the timing of the recognition. This will achieve greater comparability between
entities operating in the same market.

Effective for annual periods beginning on or after 1 January 2013:

- IFRS 10, Consolidated Financial Statements: IFRS 10 supersedes IAS 27 Consolidated and Separate Financial Statements
and SIC-12 Consolidation - Special Purpose Entities. IFRS 10 aims to develop a single consolidation model applicable to
all investees. The standard explicitly introduces concepts of agent vs. principal and de facto control.

- IFRS 11, Joint Arrangements: The objective of IFRS 11 is to establish principles for financial reporting by entities that have
an interest in arrangements that are controlled jointly (i.e. joint arrangements). This IFRS supersedes IAS 31 Interests in
Joint Ventures and SIC-13, Jointly Controlled Entities—Non-Monetary Contributions by Venturers. Joint control under IFRS
11 is defined as the contractually agreed sharing of control of an arrangement, which exists only when the decisions about
the relevant activities require the unanimous consent of the parties sharing control.

- IFRS 12, Disclosure of Interests in Other Entities: IFRS 12 applies to an entity that has an interest in subsidiaries, joint
arrangements, associates and/or unconsolidated structured entities. The objective of this IFRS is to require an entity to
disclose information that enables users of its financial statements to evaluate:
a. The nature of, and the risks associated with, the entity’s interest in other entities

b. The effects of those interests on its financial position, financial performance and cash flows.

- Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance
(Amendments to IFRS 10, IFRS 11 and IFRS 12): In June 2012, the IASB published amendments to IFRS 10, IFRS 11 and
IFRS 12 to simplify the transition process of adopting IFRSs 10 and 11, and provide relief from disclosures that could have
been onerous to make retrospectively.

- IFRS 13, Fair Value Measurement: IFRS 13 was issued to replace existing guidance on fair value measurement in different
IFRSs with a single definition of fair value. It further sets out a framework for measuring fair values in a single IFRS and
disclosures about fair value measurements.

- Disclosures – Offsetting Financial Assets and Financial Liabilities (amendments to IFRS 7): The amendments to IFRS 7
contain new disclosure requirements for financial assets and financial liabilities that are:
a. offset in the statement of financial position

b. subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are
set off in accordance with paragraph 42 of IAS 32.

80 Jubilant Energy NV
- IAS 27, Separate Financial Statements (2011): Overall, IAS 27 (2011) carries forward the existing accounting and disclosure
requirements of IAS 27 (2008) for separate financial statements, with some minor clarifications. The requirements of IAS
28 (2008) and IAS 31 for separate financial statements have been incorporated into IAS 27 (2011).

- IAS 28, Investments in Associates and Joint Ventures (2011): IAS 28 was revised in 2011 in connection with the IASB’s
project on join arrangements. The majority of these revisions result from the incorporation of joint ventures into IAS 28

Overview
(2011); the fundamental approach to accounting for equity-accounted investments has not been changed.

- Annual Improvements to IFRS 2009-2011 Cycle-various standards: The Annual Improvements process provides a vehicle
for making non-urgent but necessary amendments to IFRSs. The new cycle of improvements contains amendments to the
following five standards, with consequential amendments to other standards and interpretation.
a. IFRS 1 First-time Adoption of International Financial Reporting Standards: Repeated application of IFRS 1 and

Business Review
Borrowing cost exemption.

b. IAS 1 Presentation of Financial Statements: Comparative information beyond minimum requirements and
presentation of the opening statement of financial position and related notes.

c. IAS 16 Property, Plant and Equipment: Classification of servicing equipment

d. IAS 32 Financial Instruments: Presentation: Income tax consequences of distributions

Governance
e. IAS 34 Interim Financial Reporting: Segment assets and liabilities.

- IAS 19 (Amended) has eliminated an option to defer the recognition of gains and losses through remeasurements and
require such gain or loss to be recognized through other comprehensive income in the year of occurrence to reduce
volatility. The amended. The amended standard requires immediate recognition of effects of any plan amendments. Further,
it also requires expected return on plan assets recognized in profit or loss to be restricted to government bond yields or
corporate bond yields, considered for valuation of Projected Benefit Obligation, irrespective of actual portfolio allocations.
The actual return from the portfolio in excess of or less than such yields is recognized through other comprehensive

Financials
income.

- IAS 34, Interim Financial Reporting: IAS 34 is amended to align the disclosure requirements for requirements for segment
assets and liabilities in interim financial reports with those in IFRS 8 Operating Segments. IAS 34 now requires the
disclosure of a measure of total assets and liabilities for a particular reportable segment.

- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine: This Interpretation applies to waste removal costs that
are incurred in surface mining activity during the production phase of the mine called as 'production stripping costs'. The
Interpretation requires production stripping costs in a surface mine to be capitalised if certain criteria are met.

Effective for annual periods beginning on or after 1 July 2012:

- Presentation of items of other comprehensive income (amendments to IAS 1): Key amendments include:

- An entity must present separately the items of other comprehensive income (OCI) that may be reclassified to profit or loss
in the future (e.g. realised gains or losses on available-for-sale financial assets) from those that would never be reclassified
to profit or loss (e.g. asset revaluations).

- If the items are presented before tax then the tax related to each of the two groups of OCI items (those that might be
reclassified and those that will not be reclassified) must be shown separately.

- The amendment changes the title of the Statement of Comprehensive Income to Statement of Profit or Loss and Other
Comprehensive Income. However, an entity is still allowed to use other titles.

The Group does not plan to adopt these standard / amendments early and the extent of impact has not yet been determined.

Annual Report & Accounts 2013 81

 4. Determination of fair values
A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. When applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability. Fair values have been determined for measurement and/or disclosure purposes
based on the following methods:

i) Investments in mutual funds (included under short-term investments)

The fair value of financial assets at fair value through profit or loss is determined by reference to their quoted price/net assets
value declared at the reporting date.

ii) Loans and receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market
rate of interest at the measurement date. The fair value is determined for disclosure purposes only.

iii) Non-derivative financial liabilities carried at amortised cost

Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of
interest at the measurement date. In respect of the liability component of convertible debentures, the market rate of interest is
determined by reference to similar liabilities that do not have a conversion option. The fair value is determined for disclosure
purposes only.

iv) Non-derivative financial liabilities designated at fair value through profit or loss
The fair value of financial instruments that are not traded in an active market is determined generally by experts appointed by
the Group. The value is determined using appropriate valuation methodology. The Group uses its judgment to select methods
and make assumptions that are mainly based on market conditions existing at each reporting date or by reference to comparable
companies.

The inputs to these methods are taken from observable markets where possible. In case this is not feasible, a degree of
judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, valuation
of the Group, listing probabilities, volatility, etc. Changes in assumptions about these factors could affect the reported fair value
of financial instruments.

v) Equity-settled share-based payments

The fair value of stock options is measured using a Black-Scholes formula. Measurement inputs include share price on
measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments,
expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance
conditions attached to the transactions are not taken into account in determining fair value.

5. Segment reporting
The Group has participating interests in oil and natural gas assets and is involved in exploration, development and production
activities. The CODM analyses the operating results of each of the oil and natural gas assets separately. Since all the oil and natural
gas assets have similar characteristics such as nature of production process, nature of products, etc., the Group has aggregated all
such oil and natural gas assets, and accordingly, it has only one reportable segment, i.e., oil and natural gas. Accordingly, the Group
has made relevant entity-wide disclosures.

82 Jubilant Energy NV
 In accordance with IFRS 8, ‘Operating Segments’, following are the entity-wide disclosures:

A. Information about products and services

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Revenue - sale of crude oil 17,764 17,372

Overview
B. Information about geographical areas
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Revenues from external customers
India 17,764 17,372

Business Review
Other - -
Total 17,764 17,372

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Non-current assets
India 422,722 313,624
Other 53 82
Total 422,775 313,706

Governance
Refer to Note 29 on impairment of assets for details of impairment of exploration and evaluation assets (CWIP).

C. Information about major customers

The Group primarily deals with one customer and the total revenue of USD 17,764 thousand for the year ended 31 March 2013
(31 March 2012: USD 17,372 thousand) is in respect of sale of crude oil to such customer.

6. Inventories

Financials
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Stores, spares and consumables 431 373
Crude oil (at net realisable value) 538 525
Total 969 898

The consumption of stores, spares and consumables amounting to USD 503 thousand for the year ended 31 March 2013 (31 March
2012: 808 thousand) has been included in production and operating expenses.

7. Short-term investments
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Financial assets at fair value through profit or loss
Investment in mutual funds held for trading - 24,857
Total - 24,857

The fair value of the above investment in mutual funds is determined with reference to the market value/net asset value of the mutual
funds at the end of the relevant year.

The Group’s exposure to credit, currency and interest risks relating to short-term investments is disclosed in Note 37.

Annual Report & Accounts 2013 83

 8. Trade and other receivables – current
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Trade receivables 1,893 1,744
Due from related parties 11,415 12,584
Recoverable from co-venturers (refer to Footnote a and b) 12,075 8,352
Term deposits 152 97
Interest accrued but not due on deposits 148 77
Security deposit 30 62
Restricted cash - margin money (refer to Footnote c) 4,667 3,936
Total 30,380 26,852
Footnotes:
a) Represents amounts due from co-venturers on account of non-payment of cash calls raised by the Group in respect of operated
blocks and/or advance payments made by the Group in respect of non-operated blocks.

b) The recoverable from co-venturers includes USD 8,383 thousand from a joint venture partner, on which partner has raised
certain issues, management is in active discussion with partner and feels that amount is fully recoverable and no provision is
required in this respect.

c) Restricted cash - margin money represents margin money against guarantees and letters of credit. Restrictions on margin
money deposits are released on the expiry of the terms of guarantees and letters of credit.

The Group’s exposure to credit, currency and interest risks relating to trade and other receivables is disclosed in Note 37.

9. Other current assets

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Advances to suppliers and others 422 538
Prepaid expenses (refer to Footnote a) 437 255
Other 63 54
Total 922 847
Footnotes:
a) The amount as at 31 March 2013 includes USD 59 thousand (31 March 2012: USD Nil thousand) of debt originating cost in
relation to the term loan facility agreement entered with a consortium of banks. The loan disbursement has not taken place
entirely during the year ended 31 March 2013.

10. Cash and cash equivalents

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Bank balances 8,753 36,483
Term deposits 13,810 19,796
Cash in hand 44 8
Total 22,607 56,287

The Group’s exposure to credit, currency and interest risks relating to cash and cash equivalents is disclosed in Note 37.

84 Jubilant Energy NV
 11. Property, plant and equipment
(In thousands of US dollars) Producing Buildings Plant and Leasehold Computer Furniture Office Vehicles Land Capital Total
properties machinery improvements hardware and equipment work in
fixtures progress
(CWIP)
Cost
Balance as at 1 April 2011 14,356 43 1,139 1,650 692 226 446 112 75 76,764 95,503
Additions 3,537 - 363 - 92 21 46 29 - 50,279 54,367
Disposals/adjustments - - (1) - (23) - (7) - - (3,722) (3,753)
Effect of movements in foreign (2,067) (5) (161) (209) (92) (30) (58) (16) (5) (13,041) (15,684)
exchange rates
Balance as at 31 March 2012 15,826 38 1,340 1,441 669 217 427 125 70 110,280 130,433
Balance as at 1 April 2012 15,826 38 1,340 1,441 669 217 427 125 70 110,280 130,433
Additions 3,189 - 199 - 103 45 26 - - 85,431 88,993
Disposals/adjustments - - - (395) (47) (59) (82) - - (3,182) (3,765)
Effect of movements in foreign (693) (2) (56) (64) (29) (10) (18) (5) (1) (4,999) (5,877)
exchange rates
Balance as at 31 March 2013 18,322 36 1,483 982 696 193 353 120 69 187,530 209,784
Depletion/depreciation
Balance as at 1 April 2011 8,584 43 567 1,243 403 139 223 25 - - 11,227
Depletion/depreciation for the year 2,660 - 80 238 90 26 45 11 - - 3,150
charged to comprehensive income
Depreciation for the year - - - - 12 2 6 - - - 20
transferred to exploration and
evaluation assets (CWIP)
Disposals/adjustments - - - - (13) - (2) - - - (15)
Effect of movements in foreign (1,275) (5) (77) (174) (57) (19) (32) (4) - - (1,643)
exchange rates
Balance as at 31 March 2012 9,969 38 570 1,307 435 148 240 32 - - 12,739

Annual Report & Accounts 2013

85
Financials Governance Business Review Overview
86
(In thousands of US dollars) Producing Buildings Plant and Leasehold Computer Furniture Office Vehicles Land Capital Total
properties machinery improvements hardware and equipment work in
fixtures progress
(CWIP)
Balance as at 1 April 2012 9,969 38 570 1,307 435 148 240 32 - - 12,739
Depletion/depreciation for the year 1,714 - 122 128 80 24 16 11 - - 2,095

Jubilant Energy NV
charged to comprehensive income
Depreciation for the year - - - - 9 1 6 - - - 16
transferred to exploration and
evaluation assets (CWIP)
Disposals/adjustments - - - (395) (37) (23) (22) - - - (477)
Effect of movements in foreign (437) (2) (25) (58) (19) (6) (11) (1) - - (559)
exchange rates
Balance as at 31 March 2013 11,246 36 667 982 468 144 229 42 - - 13,814
Carrying amounts
As at 1 April 2011 5,772 - 572 407 289 87 223 87 75 76,764 84,276
As at 31 March 2012 5,857 - 770 134 234 69 187 93 70 110,280 117,694

As at 1 April 2012 5,857 - 770 134 234 69 187 93 70 110,280 117,694

As at 31 March 2013 7,076 - 816 - 228 49 124 78 69 187,530 195,971
Refer to Note 16 on loans and borrowings for liens and encumbrances on property, plant and equipment.
Refer to Note 31 on finance income and expense for borrowing costs capitalised on qualifying assets.
12. Intangible exploration and other intangible assets
(In thousands of US dollars) Leasehold Computer Exploration and Computer Total
rights software evaluation assets software
(CWIP) (CWIP)
Cost
Balance as at 1 April 2011 121 1,697 225,745 - 227,563

Overview
Acquisitions - 391 - 543 934
Internally developed - - 46,084 - 46,084
Effect of movements in foreign exchange rates (15) (242) (30,597) (39) (30,893)
Balance as at 31 March 2012 106 1,846 241,232 504 243,688
Balance as at 1 April 2012 106 1,846 241,232 504 243,688
Acquisitions - 454 - - 454

Business Review
Internally developed - - 40,811 - 40,811
Transfers to capital work in progress - PPE - - 212 - 212
Effect of movements in foreign exchange rates (5) (81) (10,471) (22) (10,579)
Balance as at 31 March 2013 101 2,219 271,783 482 274,585
Amortisation and impairment
Balance as at 1 April 2011 82 1,592 55,289 - 56,963
Amortisation for the year charged to comprehensive 23 113 - - 136
income
Amortisation for the year transferred to exploration - 20 - - 20

Governance
and evaluation assets
Impairment loss - - 325 - 325
Reversal of impairment loss - - (737) - (737)
Effect of movements in foreign exchange rates (12) (211) (5,949) - (6,172)
Balance as at 31 March 2012 93 1,514 48,928 - 50,535
Balance as at 1 April 2012 93 1,514 48,928 - 50,535
Amortisation for the year charged to comprehensive 12 184 - - 196
income
Amortisation for the year transferred to exploration - 9 - - 9

Financials
and evaluation assets
Impairment loss - - 1,618 80 1,698
Reversal of impairment loss - - (51) - (51)
Effect of movements in foreign exchange rates (4) (66) (1,796) - (1,866)
Balance as at 31 March 2013 101 1,641 48,699 80 50,521
Carrying amounts
As at 1 April 2011 39 105 170,456 - 170,600
As at 31 March 2012 13 332 192,304 504 193,153

As at 1 April 2012 13 332 192,304 504 193,153

As at 31 March 2013 - 578 223,084 402 224,064

Exploration and evaluation CWIP consists of the Group’s exploration projects which are pending determination of technical feasibility
and commercial viability of extracting a mineral resource. Costs under the head ‘Internally developed’ represent the Group’s share of
costs incurred on exploration and evaluation assets during the year.

Refer to Note 16 on loans and borrowings for liens and encumbrances on intangible exploration and other intangible assets.

Refer to Note 29 on impairment of assets for details in respect of impairment of exploration and evaluation assets (CWIP).

Refer to Note 31 on finance income and expense for borrowing costs capitalised on qualifying assets.

Annual Report & Accounts 2013 87

 13. Trade and other receivables – non-current
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Advances to suppliers and others 110 93
Security deposits 215 133
Restricted cash - margin money (refer to Footnote a) 469 493
Restricted cash - deposits under site restoration fund scheme (refer to Footnote b) 263 251
Total 1,057 970
Footnotes:
a) Restricted cash - margin money represents margin money against guarantees and letters of credit. Restrictions on margin
money deposits are released on the expiry of the terms of guarantees and letters of credit.

b) Presently, the Group is required to contribute, to the extent of its share in the Kharsang Production Sharing Contract (PSC),
towards the term deposits made by the Operator to meet the restoration obligation in the future. The fund is being maintained
to meet a legislative requirement by the Ministry of Petroleum and Natural Resources and the amounts are deposited by the
Operator under a special site restoration fund scheme (as a Term Deposit) with a bank, designated for the same purpose by the
Government. The amount can be withdrawn only when actual abandonment costs are incurred.

The Group’s exposure to credit, currency and interest risks relating to trade and other receivables is disclosed in Note 37.

14. Deferred tax assets and liabilities

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Deductible temporary differences 30,619 31,606
Tax losses* 106,583 85,089
Total 137,202 116,695
*Includes tax losses amounting to USD 9,877 thousand created due to a change in a tax position (in respect of allowance of interest
expenditure) in the previous year having impact on earlier years’ allowable tax losses.

The tax losses of JEL Canada and JENV expire over a period of 20 years. Tax losses of Indian entities expire over a period up to 8 years.
Tax losses of Cyprus entities and deductible temporary differences do not expire under current legislation. Deferred tax assets have
not been recognised in respect of these items because sufficient taxable temporary differences are not available and it is probable
that future taxable profits may not be available against which the relevant entities in the Group can utilise the benefits therefrom.

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Deferred tax assets
Tax loss carry forwards 13,502 9,495
Employee benefits 207 196
Property, plant and equipment and intangible exploration and other intangible 1,484 1,977
assets
Provisions 839 330
Trade and other payables 26 26
16,058 12,024
Deferred tax liabilities
Property, plant and equipment and intangible exploration and other intangible (35,577) (27,107)
assets
Group financing (1,459) (1,981)
Loans and borrowings (1,787) (2,257)
(38,823) (31,345)
Net deferred tax liabilities (22,765) (19,321)

88 Jubilant Energy NV
 Per Indian income tax law, oil extracting companies are allowed a seven-year tax holiday from the date of commercial production. Temporary
differences which are reversing during the tax holiday period are recognised at an applicable rate of 0%. Deferred tax on other temporary
differences has been recognised at the applicable rate of 33.99%/32.445% as applicable as at 31 March 2013 (31 March 2012: 32.445%).

In view of uncertainties involved, the impact, if any, of the tax holiday period on the income taxes with regard to exploratory/
development blocks has not been considered.

Overview
Movement in temporary differences during the year:
(In thousands of US dollars) Balance Recognised Recognised in Effect of movement Balance
1 April 2011 in retained profit or loss in foreign exchange 31 March 2012
earnings rates
Deferred tax assets

Business Review
Tax loss carry forwards 600 - 9,661 (766) 9,495
Employee benefits 87 - 130 (21) 196
Property, plant and equipment and 2,879 - (579) (323) 1,977
intangible exploration and other
intangible assets
Provisions 217 - 151 (38) 330
Trade and other payables 29 - - (3) 26
Deferred tax liabilities
Property, plant and equipment and (15,024) - (15,476) 3,393 (27,107)

Governance
Intangible exploration and other
intangible assets
Group financing (2,704) - 411 312 (1,981)
Loans and borrowings (3,102) - 487 358 (2,257)
Total (17,018) - (5,215) 2,912 (19,321)

(In thousands of US dollars) Balance Recognised Recognised in Effect of movement Balance

1 April 2012 in retained profit or loss in foreign exchange 31 March 2013

Financials
earnings rates
Deferred tax assets
Tax loss carry forwards 9,495 - 4,420 (413) 13,502
Employee benefits 196 - 21 (10) 207
Property, plant and equipment and 1,977 - (404) (89) 1,484
intangible exploration and other
intangible assets
Provisions 330 - 525 (16) 839
Trade and other payables 26 - 1 (1) 26
Deferred tax liabilities
Property, plant and equipment and (27,107) - (9,912) 1,442 (35,577)
Intangible exploration and other
intangible assets
Group financing (1,981) - 435 87 (1,459)
Loans and borrowings (2,257) - 370 100 (1,787)
Total (19,321) - (4,544) 1,100 (22,765)

15. Other non-current assets

(In thousands of US dollars) As at As at
31 March, 2013 31 March, 2012
Prepaid expenses (refer to Footnote a) 654 93
Advances to suppliers and others 648 1,720
Other 381 76
Total 1,683 1,889
Footnotes:
a) The amount as at 31 March 2013 includes USD 574 thousand (31 March 2012: USD Nil thousand) of debt originating cost in
relation to the term loan facility agreement entered with a consortium of banks. The loan disbursement has taken place during
the year ended 31 March 2013.
Annual Report & Accounts 2013 89
 16. Loans and borrowings (including accrued interest)
(In thousands of US dollars) Footnote As at 31 March 2013
Current Non-current Total
Financial liabilities at amortised cost
Secured foreign currency term loans i 39,973 49,838 89,811
Secured term loans from banks ii 8,209 296,609 304,818
Unsecured inter corporate deposits from related parties iii 251 19,255 19,506
12% redeemable preference shares iv - 28,240 28,240
Other 7 3 10
Total 48,440 393,945 442,385

(In thousands of US dollars) Footnote As at 31 March 2012

Current Non-current Total
Financial liabilities at amortised cost
Secured foreign currency term loans i 1,531 85,292 86,823
Secured term loans from banks ii 14,495 249,018 263,513
12% redeemable preference shares iv - 26,374 26,374
Other 25 11 36
Total 16,051 360,695 376,746

Footnotes:
i. Secured foreign currency term loans
(a) In October 2007, JENV entered into an agreement for a period of one year with Export-Import Bank of India (‘EXIM’) to
issue secured optionally convertible cumulative debentures with an aggregate value of USD 50,000 thousand bearing an
interest rate of 7.50% to 8% per annum compounded semi-annually. The funds were borrowed mainly for exploration,
development and production activities in various oil and natural gas assets in India.

The said convertible debentures have been renewed with effect from October 2008 as a secured foreign currency term
loan at an interest rate of USD LIBOR (6 months) plus spread of 550 – 850 bps per annum payable semi-annually. Pursuant
to renewal of the loan facility with revised terms and conditions, the Group has recorded a net gain on derecognition of
the non-derivative and derivative financial instruments amounting to USD 90 thousand during the year ended 31 March
2009.

This loan will be repaid at the end of five years from the date of renewal.

Conversion option:
EXIM had an option to convert the outstanding loan into ordinary shares at the time of the IPO by JENV.

Security:
- Corporate guarantee of Jubilant Enpro. The liability shall not exceed the amount realised from:
a) all investments of Jubilant Enpro in its subsidiary JEHBV; and

b) the assets and investments held by its subsidiary JEHBV or through its step-down subsidiaries.

- Counter corporate guarantee of JEKPL based on the following:

a) first pari passu mortgage by JEKPL of its participating interest (PI) held in Kharsang oilfield;

b) first pari passu charge by way of hypothecation by JEKPL of its receivables in respect of the said PI held by
Kharsang oilfield;

c) Trust and Retention Account (TRA) or escrow arrangement on receivables from Kharsang oilfield.

- Negative lien on the PI and the receivables of all other blocks held/to be acquired by JODPL, JOGPL, JENVPL and
JEIBV.

Vide the agreement modification document dated 22 July 2010; the terms of the agreement have been revised as under:

90 Jubilant Energy NV
 - EXIM has committed to compulsorily convert, in case of IPO, to the extent of USD 10,000 thousand. The balance
amount of USD 40,000 thousand shall continue as a term loan until October 2013.

- The amount of USD 10,000 thousand shall remain as debt till the date the shares are allotted to EXIM pursuant to
an IPO and this amount will be interest bearing till the date of the IPO.

Overview
- In a scenario, the IPO is not consummated within a period of six months from the date of the modification, i.e., from
22 July 2010, the conversion option granted shall be withdrawn and EXIM will get conversion option on USD 50,000
thousand.

As per the agreement modification document dated 22 July 2010, the foreign currency term loan of USD 10,000
thousand was converted on 24 November 2010 into 8,162,285 numbers of ordinary shares at a price of GBP 0.77

Business Review
(equivalent USD 1.23) per share. The balance loan of USD 40,000 thousand (face value) shall continue as a term loan
until October 2013. After the said conversion, there is no outstanding conversion option in respect of the balance
loan of USD 40,000 thousand (face value).

The outstanding balance as on 31 March 2013 amounts to USD 40,000 thousand (31 March 2012: USD 40,000
thousand).

(b) In August 2011, JENV entered into an agreement with EXIM for a secured foreign currency term loan of USD 50,000
thousand bearing an interest rate of USD LIBOR (6 months) plus spread of 550-600 bps per annum payable quarterly. The

Governance
funds are to be utilised to finance exploration and development expenses incurred/to be incurred in various oil blocks of
the Group. This loan is for a tenor of 6 years and shall be repaid in four step-up half-yearly installments commencing after
the expiry of a period of four years from the date of first disbursement.

As at 31 March 2013, JENV has drawn USD 50,000 thousand (31 March 2012: USD 50,000 thousand).

Conversion option:
EXIM has an option to convert part / whole of outstanding Dollar Loan into Shares of JENV at a mutually agreed price
upon such terms and conditions as may be stipulated by EXIM and agreed by JENV.

Financials
Security:
- Corporate guarantee of Jubilant Enpro. The liability shall not exceed the amount realised from:
a) all investments of Jubilant Enpro in its subsidiary JEHBV; and

b) the assets and investments held by its subsidiary JEHBV or through its step-down subsidiaries.

- Counter corporate guarantee of JEKPL based on the following:

a) first pari passu mortgage by JEKPL of its participating interest (PI) held in Kharsang oilfield;

b) first pari passu charge by way of hypothecation by JEKPL of its receivables in respect of the said PI held by
Kharsang oilfield;

c) Trust and Retention Account (TRA) or escrow arrangement on receivables from Kharsang oilfield.

- Counter corporate guarantee of JODPL based on the second pari passu mortgage by JODPL of its participating
interest held in KG block.

- Negative lien on present and future participating interest and receivables pertaining to all oil and gas blocks held
by JENV and subsidiaries which hold/shall hold PI in any oil and / or gas block provided that in case of fund raising
for a particular oil and gas asset/block on a security of the first charge on the participating interest in oil and gas,
the negative lien will be converted into second charge on the residual cash flows after meeting the debt service
obligations of the first charge holder.

ii. Secured term loans from banks

(a) In December 2008, JEKPL entered into an agreement with State Bank of India (‘SBI’) for a term loan facility of INR
2,000,000 thousand (equivalent to USD 36,795 thousand) for a period of nine years at an interest rate of SBAR (State

Annual Report & Accounts 2013 91

 Bank of India Bank Advance Rate) minus 50 bps (subject to a minimum of 11.5% per annum) to partly fund the capital
expenditure requirements.

As of 31 March 2013, JEKPL has drawn down INR 2,000,000 thousand (equivalent to USD 36,795 thousand) (31 March
2012: INR 2,000,000 thousand (equivalent to USD 38,487 thousand)). The outstanding balance as on 31 March 2013
after repayment of INR 200,000 thousand (equivalent to USD 3,680 thousand) is INR 1,800,000 thousand (equivalent to
USD 33,115 thousand).

This agreement was amended in June 2009 wherein Central Bank of India (‘CBOI’) in consortium with SBI agreed to
provide an additional amount of INR 2,000,000 thousand (equivalent to USD 36,795 thousand) in the form of a rupee
term loan for a period of nine years at an interest rate of BPLR (Bank Prime Lending Rate) minus 75 bps (subject to a
minimum of 11.5% per annum and the interest rate charged by SBI, whichever is higher) to fund the capital expenditure
requirements. During the year ended 31 March 2012, the interest rate was further modified at Higher of CBI base rate +
2.75% or 11.5% or interest charged by SBI.

As of 31 March 2013, JEKPL has drawn down INR 2,000,000 thousand (equivalent to USD 36,795 thousand) [31 March
2012: INR 2,000,000 thousand (equivalent to USD 38,487 thousand)]. The outstanding balance as on 31 March 2013
after repayment of INR 175,000 thousand (equivalent to USD 3,220 thousand) is INR 1,825,000 thousand (equivalent to
USD 33,575 thousand).

Security:
- First charge on all movable and immovable assets of JEKPL.

- Primary charge on all present and future receivables of (i) JEKPL from Kharsang block or any other source and (ii)
Jubilant Enpro relating to Kharsang block.

- Mortgage of JEKPL’s participating interest in the production sharing contract (PSC) in respect of Kharsang field to the
extent permitted under the terms and conditions set out in the PSC.

- Pledge of 51% of promoters’ shareholding in JEKPL.

- Assignment of all material contracts related to Kharsang block in favour of the lenders.

- The right, title and interest of JEKPL by way of first charge in, to and under all the Government approvals and
insurance policies of JEKPL.

(b) During the year ended 31 March 2010, JODPL had entered into a term loan agreement with a consortium of banks for a
total amount of INR 6,500,000 thousand (equivalent to USD 119,584 thousand) for a period of 117 months at an interest
rate of SBAR plus 25 bps. This loan was payable in 27 quarterly installments starting from 31 December 2012.

Till March 2012, the entire loan amount has been drawn down.

Security:
- Charge on all present and future receivables of JODPL from KG block.

- Encumbrance over JODPL’s participating interest in KG block.

- Encumbrance on all intangible assets of JODPL relating to KG block.

- Encumbrance over JODPL’s rights under all material contracts relating to KG block.

- Encumbrance on the Debt Service Reserve Account to be created to meet the debt service requirements.

- Non-disposal undertaking along with power of attorney in respect of 51% of the total issued and paid-up shares of
JODPL held by JOGIL.

- Negative lien over all the preference shares of JODPL.

92 Jubilant Energy NV
 In September 2012, JODPL entered into a fresh term loan agreement (Refer Note 16 (ii)(c)) and repaid the outstanding
balance of INR 6,500,000 thousand (equivalent to USD 119,584 thousand) out of the proceeds from the fresh term loan.
The outstanding balance as on 31 March 2013 after repayment of INR 6,500,000 thousand (equivalent to USD 119,584
thousand) is Nil.

(c) On 28 September 2012, JODPL entered into a term loan agreement with a consortium of banks for a total amount of INR

Overview
13,400,000 thousand (equivalent to USD 246,527 thousand) at an interest rate of SBI Base Rate plus 450 bps. This loan
shall be payable in 34 quarterly installments starting from 31 December 2015 and ending on 31 March 2024. The facility
is available for the repayment of outstanding Rupee Loan to the existing lenders (refer to note 16 (ii) (b)), ongoing capital
expenditure for appraisal and development of the KG DDW Block, interest payable on the term loan prior to the Scheduled
Commercial Operations Date or Commercial Operations Date whichever is earlier and payment of any other financing
costs, charges, expenses relating to the term loan. As per the sanction letter, the loan is secured by the following securities:

Business Review
- Charge on all present and future receivables of JODPL from KG block.

- Encumbrance over JODPL’s participating interest in the KG block.

- a first ranking pari passu encumbrance/charge on the Debt Service Reserve Account

- Encumbrance on all intangible assets of JODPL relating to KG block.

- Encumbrance over JODPL’s rights under all material contracts relating to KG block.

Governance
- Non-disposal undertaking along with power of attorney in respect of 51% of the total issued and paid-up shares of
JODPL held by JOGIL.

- Negative lien over all the preference shares of JODPL.

- A first ranking pledge of such issued and paid-up shares of JENV held (directly) by JEHBV, having a market value of
INR 2,000,000 thousand as on the date of Share Pledge Agreement. The pledge of shares shall be released once the

Financials
Commercial Production commences from the Deen Dayal West Extension area.

- First ranking pari passu charge on Trust and Retention Account (TRA) of JODPL

- Encumbrance on free hold non-agricultural land of JODPL located at District Raigad, Maharashtra

As on 31 March 2013, JODPL has drawn down INR 9,800,000 thousand (equivalent to USD 180,296 thousand) and
the same has been utilised towards the part payment of existing outstanding term loan. The earlier loan has been
considered as extinguished and accordingly, the unamortised loan origination cost of USD 530 thousand has been
charged to the statement of comprehensive income.

(d) During the year ended 31 March 2011, JEKPL (as borrower) entered into a loan agreement with Central Bank of India (as
lender), pursuant to which the lender agreed to lend and advance to the borrower a sum of INR 3,250,000 thousand or
USD 70,000 thousand or a combination of both for augmentation of the financial resources for capital expenditure on
the ongoing exploration and development projects and other expenses of the Company/group companies (Jubilant Energy
N.V. and its subsidiaries). The loan facility is required to be availed of on or before 31 March 2012.

The interest rate on INR borrowing is Base Rate + 400 bps and on USD borrowing is 1 year USD LIBOR + 700 bps. The
facility is for a period of 7 years with repayment in three equal installments at the end of 5th, 6th and 7th year from the
date of first disbursement.

As of 31 March 2013, JEKPL has drawn down INR 3,250,000 thousand (equivalent to USD 59,792 thousand) [31 March
2012: INR 3,250,000 thousand (equivalent to USD 62,541 thousand)].

Security created/to be created:

- First pari passu charge on participating interest of JEKPL in Kharsang field.

- First pari passu charge on receivables of JEKPL from Kharsang field.

Annual Report & Accounts 2013 93

 - Second charge on participating interest held by JODPL held in KG block.

- Negative lien on the present and future participating interest of oil and natural gas blocks held by JOGPL and
JENVPL.

- Negative lien on the present and future receivables from oil and natural gas blocks held by JEKPL, JOGPL, JODPL and
JENVPL.

- Corporate guarantee from JENV to ensure compliance of the terms and conditions and to fulfill the borrower’s
obligations under the loan agreement and any amendment thereto.

iii. Unsecured loans from related parties

a) During the year, JOGPL has entered into loan agreements with Jubilant Enpro Private Limited and Enpro Oil Private Limited
for a loan of INR 280,000 thousand (equivalent to USD 5,151 thousand) (31 March 2012: Nil thousand) and INR 60,000
thousand (equivalent to USD 1,104 thousand) (31 March 2012: Nil thousand) respectively. These loans are repayable after
a period of 3 years at an interest rate of 15% per annum, payable quarterly.

As of 31 March 2013, JOGPL has drawn down INR 280,000 thousand (equivalent to USD 5,151 thousand) (31 March
2012: Nil thousand) from Jubilant Enpro Private limited and INR 60,000 thousand (equivalent to USD 1,104 thousand)
(31 March 2012: Nil thousand) from Enpro Oil.

b) During the year, JOGIL has entered into a loan agreement with JEHBV for a loan of USD 10,000 thousand. The loan is for
a period of 3 years at an interest rate of 6 month USD LIBOR plus 300 bps, payable quarterly.

As of 31 March 2013, JOGIL has drawn down USD 7,000 thousand (31 March 2012: Nil thousand) from JEHBV. The
outstanding balance as on 31 March 2013 is USD 7,000 thousand (31 March 2012: Nil thousand)

c) During the year, JENV has entered into a loan agreement with JEHBV for a loan of USD 6,000 thousand. This loans is for
a period of 3 years at an interest rate of 6 month USD LIBOR plus 300 bps, payable quarterly.

As of 31 March 2013, JENV has drawn down USD 6,000 thousand (31 March 2012: Nil thousand). The outstanding
balance as on 31 March 2013 is USD 6,000 thousand (31 March 2012: Nil thousand).

iv. Redeemable preference shares

12% redeemable preference shares
During the earlier years, JOGPL issued various tranches of 12% redeemable preference shares with a face value of INR 100 to
the ultimate holding company at a premium of INR 400. These preference shares are entitled to 12% cumulative dividend and
are redeemable after seven years at a premium of INR 1,100 per share.

These preference shares have been initially recorded at fair value by discounting the contractual liability. The difference between
the fair value and the amount initially received has been recognised as a distribution to shareholders. The liability portion has
been recorded at amortised cost on each subsequent reporting date.

v. Non-fund based facility

As at 31 March 2013, JOGPL has a non-fund based limit of INR 760,000 thousand (equivalent to USD 13,982 thousand)
[31 March 2012: INR 760,000 thousand (equivalent to USD 14,625 thousand)] from Axis Bank to furnish a bank guarantee
(‘BG’) to the Government of India as per the production sharing contracts. Within the overall limit, a sub-limit of INR 100,000
thousand (USD 1,840 thousand) [31 March 2012: INR 100,000 thousand (USD 1,924 thousand)] is available to JOGPL towards
letter of credit. Further, the bank has sanctioned the sub-limit within the above overall limit to the under-mentioned entities for
furnishing BG.

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94 Jubilant Energy NV
 Security:
- A first charge on the existing and future current assets of JOGPL.

- Counter corporate guarantee of JOGPL.

- Corporate guarantee of Jubilant Enpro.

Overview
- Cash margin of 5% (31 March 2012: 5%).

- Negative lien on participating interest of JOGPL, JODPL, JEKPL, JCPL and JSPL in the blocks for which the BG facility is
provided.

Business Review
vi. Details of interest rates of loans and borrowings are given below
Nominal interest rate
For the year ended 31 March
2013 2012
Secured foreign currency term loan (Refer Note USD six months LIBOR + spread of USD six months LIBOR + spread of
16 (i)(a)) 550-600 bps 550-600 bps
Secured foreign currency term loan (Refer Note USD six months LIBOR+ spread of USD six months LIBOR+ spread of
16 (i)(b)) 550-600 bps 550-600 bps
Secured term loan from State Bank of India Higher of SBI base rate + 400-430 Higher of SBI base rate + 400 bps
('SBI') (Refer Note 16 (ii)(a)) bps or 11.5% or 11.5%

Governance
Secured term loan from Central Bank of India Higher of CBI base rate + 2.75% or Higher of CBI base rate + 2.75% or
(Refer Note 16(ii)(a)) 11.5% or interest charged by SBI 11.5% or interest charged by SBI
Secured term loans from consortium of banks SBI base rate + 450 bps SBI base rate + 450 bps
(Refer Note 16(ii)(b))
Secured term loans from consortium of banks SBI base rate + 450 bps SBI base rate + 450 bps
(Refer Note 16(ii)(c))
Secured term loan from Central Bank of India CBI base rate + 400 bps CBI base rate + 400 bps
(Refer Note 16(ii)(d))

Financials
Unsecured intercorporate deposits from related 15.00% N.A.
parties (Refer Note 16(iii)(a))
Unsecured intercorporate deposits from related USD six months LIBOR + spread of N.A.
parties (Refer Note 16(iii)(b)) 300 bps
Unsecured intercorporate deposits from related USD six months LIBOR + spread of N.A.
parties (Refer Note 16(iii)(c)) 300 bps
12% redeemable preference shares 12.00% 12.00%
Other loans 9.00% - 10.00% 9.00% - 10.00%

The Group’s exposure to credit, currency and interest risks relating to loans and borrowings is disclosed in Note 37.

17. Trade and other payables

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Sundry creditors 11,946 13,575
Payable to co-venturers* 6,215 7,639
Security deposits and retention money 2,553 1,171
Due to related parties 843 673
Total 21,557 23,058
*Represents the amounts due to Operators on account of cash calls raised by such Operators in respect of non-operated blocks.

The Group’s exposure to credit, currency and interest rate risks relating to trade and other payables is disclosed in Note 37.

Annual Report & Accounts 2013 95

 18. Other current liabilities
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Statutory liabilities 809 1,094
Total 809 1,094

19. Employee benefits

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Post-employment defined benefit plan 245 195
Other long-term employee benefits 428 409
Total 673 604

Post-employment benefits
Defined contribution plan
The Group’s provident fund scheme is a defined contribution plan. The following table sets out the disclosures in respect of the
defined contribution plan:
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Contribution to provident fund (net of reimbursements) 108 121
Total 108 121

The expense is recognised in the personnel costs in the Consolidated Statement of Comprehensive Income.

Defined benefit plan

The Group’s gratuity scheme is a defined benefit plan. Gratuity is paid as a lump sum amount to employees at retirement or
termination of employment at an amount based on the respective employee’s eligible salary and the years of employment with the
Group. The following table sets out the disclosures in respect of the defined benefit plan:
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Present value of unfunded obligation 245 195
Total obligation 245 195

Expense recognised in the personnel cost in the Consolidated Statement of Comprehensive Income:
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Current service costs 78 55
Interest on obligation 23 13
Net actuarial losses/(gains) recognised (2) 104
Total 99 172

Movement in the present value of defined benefit obligation:

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Defined benefit obligation (at the beginning) 195 124
Current service costs 78 55
Interest on obligation 23 13
Net actuarial losses/(gains) recognised (2) 104
Benefits paid (40) (79)
Effect of movements in exchange rates (9) (22)
Defined benefit obligation (at the end) 245 195

96 Jubilant Energy NV
 Principal actuarial assumptions are as given below:
Particulars As at As at
31 March 2013 31 March 2012
Discount rate 8.10% 8.70%
Retirement age 58 years 58 years
Future salary increases (per annum) 8.50% 8.50%

Overview
Withdrawal rates:
Age (Years)
21-30 3.00% 3.00%
31-44 2.00% 2.00%
45-57 1.00% 1.00%

Assumptions regarding future mortality rates are based on Life Insurance Corporation of India (LIC) published mortality rates (1994-

Business Review
96) tables.

The actuarial valuation is carried out at least annually by an independent actuary. The discount rate used for determining the present
value of the obligation under the defined benefit plan is determined by reference to market yields at the end of the reporting period
on Indian Government Bonds. The currency and the term of the government bonds are consistent with the currency and term of the
post-employment defined benefit obligation.

The salary growth rate takes into account inflation, seniority, promotion and other relevant factors on a long-term basis.

Governance
Historical information:
(In thousands of US dollars) For the year ended
31 March 31 March 31 March 31 March 31 March
2013 2012 2011 2010 2009
Present value of defined benefit obligation 245 195 124 94 68
Experience adjustment arising on plan liabilities (20) 62 39 5 9

20. Share-based payment plans

Financials
In January 2010, the Group had established a share option programme that entitles share options of the Company to all employees of
the Group and others providing similar services under the Stock Option Plan. All the options would vest in four staggered installments
on an annual basis over a four-year period. In general, the options are exercisable in accordance with the vesting schedule over a
period of four years beginning from the date of vesting.

The Board of Directors, at its meeting held in November 2010, approved the modification in the terms and conditions of the Stock
Option Plan and also decided to increase the reserved number of ordinary shares of JENV from 15,304,586 to 17,671,098 (face value
of EUR 0.01 each).

As part of a modification, the exercise price of the option was reduced to GBP 0.696 (equivalent to USD 1.12) per share and the
vesting period was changed to start from 1 April 2010 onwards. Further in the same board meeting, the Group granted further
options for 4,225,680 shares and 667,843 shares to the employees with the vesting period commencing from 1 April 2010 and 15
October 2010, respectively.

During the previous year ended 31 March 2012, the Group has further granted options for 100,000 shares with the vesting period
commencing from 1 April 2011.

The Group has adopted the Black-Scholes Model to measure the fair value of the option by taking into account the terms and
conditions upon which the options were granted.

Annual Report & Accounts 2013 97

 A. Charge to the Statement of Comprehensive Income towards equity-settled share-based payments and the
movement in share-based compensation reserve is as given below.
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Balance at the beginning of the year 12,358 8,196
Add: Share-based payment expense/(reversal) for the year (net)* (2,486) 4,162
Less: Transfer to retained earnings for vested share options forefeited during (3,806) -
the year
Balance at the end of the year 6,066 12,358
*Expense/(reversal) for the year includes USD 2,486 thousand (31 March 2012: USD 4,140 thousand) recognised under
Share-based payment expense/(reversal) and USD Nil thousand (31 March 2012: USD 22 thousand) recognised as ‘legal and
professional expense’ under ‘other expense’.

B. Details of share options granted

Month of grant Number of options Vesting period Exercise price Fair value at grant date
(USD per share) (USD per option)
April 2011 100,000 4years* 1.12 0.47-0.51
November 2010 4,893,523 4years* 1.12 0.52-0.58
January 2010 15,304,586 4years* 3.00 0.84-1.01
*Vesting in staggered annual installments.

C. Movement in the share options outstanding

For the year ended 31 March 2013
Number of Weighted average exercise price
options (USD per share)
Balance at the beginning of the year 16,109,874 1.12
Granted during the year - -
Exercised during the year - -
Forfeited during the year (refer to Footnote a) (7,969,895) 1.12
Balance at the end of the year 8,139,979 1.12
Exercisable at the end of the year 4,311,857 1.12

For the year ended 31 March 2012

Number of Weighted average exercise price
options (USD per share)
Balance at the beginning of the year 16,959,899 1.12
Granted during the year 100,000 1.12
Exercised during the year - -
Forfeited during the year (refer to Footnote a) (950,025) 1.12
Balance at the end of the year 16,109,874 1.12
Exercisable at the end of the year 3,201,975 1.12
Footnotes:
a) The options have lapsed due to the employees leaving the services during the year ended 31 March 2013 and 31
March 2012. Significant reversal during the year is pursuant to a senior official leaving the organisation and consequent
forfeiture of stock options.

b) The Group has assumed 5% forfeiture rate per annum.

D. Fair value of each share option on the grant has been estimated using the following inputs to the model:
Grant date 7 January 2010 11 November 2010 1 April 2011
Grant date share price (USD per share) 2.09 1.23 1.14
Exercise price (USD per share) 3.00 1.12 1.12
Expected life of the option 4.23 - 5.73 years 3.88 - 5.93 years 3.50 - 5.75 years
Expected volatility 60.60% 49.79% 49.79%
Dividend yield 0% 0% 0%
Risk-free interest rate 2.62% 1.35% 1.35%

98 Jubilant Energy NV
 The Group had estimated the volatility in the share price based on the standard deviation of the natural logarithm of returns
over the period in the share prices of the companies comparable with the Group.

The estimated remaining contractual life of the options as at 31 March 2013 is 5.04 years (31 March 2012: 6.40 years).

21. Provisions

Overview
(In thousands of US dollars) Site restoration obligations
Balance as at 1 April 2011 939
Provisions made during the year 252
Provisions reversed/utilised during the year (34)
Unwinding of discount 113
Revisions (change in estimate) 221

Business Review
Effect of movements in foreign exchange rates (159)
Balance as at 31 March 2012 1,332
Balance as at 1 April 2012 1,332
Provisions made during the year 1,071
Provisions reversed/(utilised) during the year 43
Unwinding of discount 240
Revisions (change in estimate) 343
Effect of movements in foreign exchange rates (57)
Balance as at 31 March 2013 2,972

Governance
The Group’s site restoration obligation arises from its ownership interest in oil and natural gas assets.

The total future site restoration obligation is estimated based on the Group’s net ownership interest in all wells and facilities,
estimated costs to reclaim and abandon these wells and facilities and the estimated timing of the costs to be incurred in future years.
The Group has estimated the net present value of its total site restoration obligation based on an undiscounted total future liability.
The majority of costs is expected to be incurred within a period of next 25 years. The estimation is based on existing technology of site
restoration of the Group’s oil and natural gas fields and production facilities. The discount factor, being the risk-adjusted rate related
to the liability, is estimated to be 8% for the year ended 31 March 2013 (31 March 2012: 8%).

Financials
22. Trade and other payables – non-current
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Security deposits and retention money - 254
Total - 254

The Group’s exposure to credit, currency and interest rate risks relating to trade and other payables is disclosed in Note 37.

23. Operating leases

The Group had taken office premises and various residential premises under operating lease arrangements. The leases were cancellable
at the option of the Group. Rental expenses under these leases for the year ended 31 March 2013 amounted to USD 56 thousand
(net of expenses recovered USD 117 thousand) [31 March 2012: USD 89 thousand (net of expenses recovered USD 64 thousand)].

The Group had also taken additional office premises on operating lease. The lease term was for a non-cancellable period of five years,
renewable for a further period of four years at the mutual agreement of both the parties. Rental expense under this lease for the year
ended 31 March 2013 amounted to USD 97 thousand (net of expenses recovered USD 124 thousand) [31 March 2012: USD 112
thousand (net of expenses recovered USD 285 thousand)].

Non-cancellable operating lease rentals are payable as follows:

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Less than one year - 231
Between one and five years - -
Total - 231

Annual Report & Accounts 2013 99

 24. Share capital
(Refer to Note 2b) of the Consolidated Financial Statements)

Issued and paid-up share capital

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Opening balance as at 1 April 5,581 5,581
Closing balance as at 31 March 5,581 5,581

Share premium
(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Opening balance as at 1 April 105,047 105,047
Closing balance as at 31 March 105,047 105,047

Footnotes:
1) Authorised share capital
The authorised share capital of JENV as at 31 March 2013 is 874,200,000 shares of USD 12,145 thousand equivalent to EUR
8,742 thousand (31 March 2012: USD 12,145 thousand equivalent to EUR 8,742 thousand), having the par value of EUR 0.01
(31 March 2012 EUR 0.01) per share.

2) Issued share capital

The issued share capital of JENV as at 31 March 2013 is 416,306,787 shares (31 March 2012: 416,306,787 shares).

There is no change in the issued share capital of JENV during the year ended 31 March 2013 and 31 March 2012.

All issued shares are fully paid up. The holders of ordinary shares are entitled to receive dividend as declared from time to time
and are entitled to one vote per share at the meetings of the Group.

3) Share premium
There is no change in the share premium of JENV during the year ended 31 March 2013.

4) Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.

5) Stock options outstanding reserve

The stock options outstanding reserve comprises the amounts recognised in respect of the equity-settled share-based payments
to certain employees and others providing similar services. (Also refer to Note 20).

25. Oil and natural gas revenue

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Share of crude oil sold 19,640 18,670
Less: Profit petroleum (1,876) (1,298)
Total 17,764 17,372

26. Other income

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Recovery of overhead and other support charges 899 690
Liability no longer required written back 108 385
Miscellaneous income (refer to Note 29) 37 616
Total 1,044 1,691

100 Jubilant Energy NV

27. Personnel costs (net of reimbursement)
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Salaries, wages and other benefits 2,520 3,415
Contribution to provident and other funds 108 121
Staff welfare expenses 35 63

Overview
Total 2,663 3,599

28. Depletion, depreciation and amortization

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Property, plant and equipment

Business Review
Depletion - Producing properties (refer to Note 11)* 1,714 2,660
Depreciation - Other (refer to Note 11) 381 490
2,095 3,150
Other intangibles
Amortisation (refer to Note 12) 196 136
196 136
Total 2,291 3,286

*During the current year, based on the report of an independent expert, the Group has made a substantial upward revision in the

Governance
quantity of proved developed reserves of oil including on account of drilling additional infill and step-out development wells which
were drilled under the Phase III drilling programme and the successful work-over activities. The impact of such change has resulted
in a decrease in depletion by USD 1,607 thousand for the year ended 31 March 2013.

29. Impairment
The Group has identified each of its blocks (i.e. a ‘production sharing contract’/‘permit’) as a separate CGU for the purpose of
impairment testing. The Group has eleven CGUs. If facts and circumstances suggest that the carrying amount exceeds the recoverable
amount, E&E assets are assessed for impairment. These facts and circumstances include expiry of the license period to explore in the
near future, substantial expenditure on further E&E activities not being budgeted/planned, no discovery of commercial quantities of

Financials
mineral resources, management’s decision to discontinue activities in the specific areas, etc.

Mehsana block
The Group, as an Operator of Mehsana block, had completed the first phase of the minimum work programme during which seven
wells had been drilled in part A and one well had been drilled in part B of the block. Of the said wells, CB-5A showed discovery and
the Operator had submitted application to the DGH. However, the Group had assessed that there is no commercially viable potential
in this well. All the wells have been plugged and abandoned and the land pertaining to these wells had been handed over to the land
owners. Accordingly, the Group had decided to impair Mehsana block during the year ended 31 March 2011. Subsequent to this,
Group incurred insignificant costs on closure activities during previous year against which impairment loss of corresponding amount
was recognised. During the previous year, Group had filed a letter to DGH for relinquishment of block and during current year, the
Group has carried out closure activities like submission of data package to DGH and disposal of inventory.

During the year ended 31 March 2013, the Group has recognised, an impairment loss of USD 58 thousand in respect of the
expenditure incurred on the block.

Cauvery block
In respect of Cauvery block, the Operator had drilled three wells till 31 March 2009. Out of these wells CY-1 well was tested and it
discovered oil. The same was suspended for detailed testing. During the quarter ended 31 December 2009, the process of re-testing
of wells was started and the test results became available in the first quarter of 2010. Based on these test results, the consortium
decided to plug and abandon all the three wells. Accordingly, the Group had decided to impair the Cauvery block during the year
ended 31 March 2010. Subsequent to this, Group incurred insignificant costs on closure activities.

During the year ended 31 March 2013, the Group has made an impairment reversal of USD 51 thousand in respect of the block,
primarily arising due to sale of inventory.

Australia block
The Phase I for the Australia lock was started on 5 June 2007 and the Operator had to drill two exploratory wells within a period
of three years from that date. On account of low view of prospects for the block, the Group had decided to impair the Australia

Annual Report & Accounts 2013 101

 block during the year ended 31 March 2010. In addition to this, the Group had further incurred USD 1,821 thousand against which
impairment loss had been recognised in earlier years (Also refer to Note 38).

Golaghat Block
The effective date of Golaghat PSC is 5 June 2007 with a period of exploration until 4 June 2014. The Group is an Operator in this
block with a 10% participating interest. The Golaghat PSC is in its first exploration phase. The Group as an Operator of Golaghat
block has drilled one exploratory well in phase I of exploration and the same was tested as a dry well and consortium could not
move ahead with a further drilling program due to a non-clearance of Forest Land Diversion from the State Government. Currently,
the consortium is following up with government authorities for forest diversion post which the future exploration program would be
considered. Pending approval for forest diversion and considering uncertain future of exploration program in the block, the Group has
decided to recognise an impairment loss in respect of the entire amount of its share of the expenditure incurred till 31 March 2013
amounting to USD 1,560 thousand. The Group does not foresee any other liability in this respect.

The carrying amounts of Cauvery, Mehsana and Golaghat block were included as a part of the India geographical area and Australia
block was included as a part of outside India geographical area (refer to Note 5 on segment reporting).

30. Other expenses (net of reimbursements)

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Travelling and conveyance 392 687
Legal and professional expenses 2,302 2,375
Rent 153 201
Repairs and maintenance 334 290
Liquidated damages 165 127
Recruitment and training expenses 121 146
Directors' fees 130 441
Miscellaneous expenses 1,039 581
Total 4,636 4,848

31. Finance income and expense

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Interest income 956 489
Dividend income on held for trading investments 291 1,783
Net foreign exchange gain 752 -
Profit on sale of investment 1,024 128
Total finance income 3,023 2,400
Interest expense 52,865 40,532
Bank charges and guarantee commission 656 437
Net foreign exchange loss - 3,068
Less: Interest capitalised to exploration and evaluation assets (CWIP) and property, (40,220) (34,375)
plant and equipment
Total finance expenses 13,301 9,662
Net finance expenses (10,278) (7,262)

In respect of funds borrowed for general purposes and used for qualifying assets e.g. exploration and evaluation assets (CWIP) and
property, plant and equipment, the Group has capitalised borrowing costs amounting to USD 20,700 thousand for the year ended
31 March 2013 (31 March 2012: USD 18,779 thousand). The capitalisation rate used to determine the borrowing costs eligible for
capitalisation is 12.92% per annum for the year ended 31 March 2013 (31 March 2012: 12.83% per annum).

In addition, in respect of funds borrowed for specific purposes and used for qualifying assets e.g. exploration and evaluation assets
(CWIP) and property, plant and equipment, the Group has capitalised borrowing costs (net of interest income) amounting to USD
19,520 thousand for the year ended 31 March 2013 (31 March 2012: USD 15,591 thousand).

102 Jubilant Energy NV

32. Income tax expense
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Recognised in Statement of Comprehensive Income
Current tax expense 1,771 1,139
Deferred tax expense

Overview
Origination and reversal of temporary differences 4,541 5,215
Total income tax expense through Statement of Comprehensive Income 6,312 6,354

Effective tax reconciliation

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012

Business Review
Loss for the year (9,704) (12,796)
Total income tax expense 6,312 6,354
Loss before income taxes (3,392) (6,442)
Income tax using enacted tax rate (557) (862)
Impact of change in tax rate on deferred tax 220 -
Effect of higher tax rate on capital items 64 (13)
Foreign exchange (10) 217
Non-taxable income (901) (578)
Non-deductible expenses 956 2,104

Governance
Change in unrecognised tax losses 6,486 5,414
Other 54 72
Total income tax expense recognised in Statement of Comprehensive Income 6,312 6,354

33. Earnings per share

The following is the reconciliation of the loss attributable to ordinary shareholders and weighted average number of ordinary shares
used in the computation of basic and diluted earnings per share:
For the year ended For the year ended

Financials
31 March 2013 31 March 2012
Loss
Loss attributable to ordinary shareholders (USD '000) (9,704) (12,796)
Ordinary shares
Weighted average number of ordinary shares outstanding used in computing EPS 416,306,787 416,306,787
(Nos.)
Basic and diluted EPS (USD per share) (0.023) (0.031)

The Group has issued options to its employees (refer Note 20) during the year ended 31 March 2013 and 31 March 2012. Since the
Group does not have profits during the current and in the previous year, the options issued are considered to have an anti-dilutive
effect. Therefore, the basic and diluted EPS are the same.

34. Related parties

(a) Related parties and nature of relationships where control exists
Relationship Name of related parties
Ultimate holding company Jubilant Enpro Private Limited
Holding company Jubilant Energy Holding BV

(b) Related parties and nature of relationships where transactions have taken place during the year
Relationship Name of related parties
Fellow subsidiary 1) Western Drilling Contractors Private Limited
2) Enpro Oil Private Limited
Enterprises that are directly or indirectly under the control 1) Jubilant Securities Private Limited
or significant influence of key management personnel
2) Jubilant Capital Private Limited
3) Jubilant Life Science Limited
Joint venture of the ultimate holding company Geo Enpro Petroleum Limited

Annual Report & Accounts 2013 103

 (c) Key management personnel
1) Shyam S Bhartia (Promoter and Director)
2) Hari S Bhartia (Promoter and Director)
3) Sir Robert Paul Reid
4) Arun Kumar Duggal
5) Dr. Andrew William Wood
6) Shahzaad S Dalal
7) Radhey Shyam Sharma (appointed w.e.f. 21 March 2013)
8) Ajay Khandelwal (resigned w.e.f. 7 February 2013)
9) Vipul Agarwal
10) Ramesh Bhatia
11) Apoorva Ranjan (resigned w.e.f. 12 October 2012)
12) Premanand Mishra (appointed w.e.f. 12 October 2012)
13) Anil Mathur (appointed w.e.f. 17 December 2012)
14) Sandeep Budhiraja (appointed w.e.f. 7 February 2013)

(d) Related party transactions

Particulars Ultimate holding Holding company Joint venture of the
company ultimate Holding
company
(In thousands of US dollars) For the year For the year For the year For the year For the year For the year
ended 31 ended 31 ended 31 ended 31 ended 31 ended 31
March 2013 March 2012 March 2013 March 2012 March 2013 March 2012
(i) Transactions
Loans taken 5,148 - 13,000 - - -
Share of joint operative expenditure - - - - 8,183 11,941
paid
Expenses incurred by the Group on - - - - 650 1,205
their behalf
Bank charges and guarantee 500 241 - - - -
commission
Interest expense on inter corporate 175 - 71 - - -
deposits
Expenses incurred on behalf of the 18 - - - 8,186 12,028
Group
Interest on redeemable preference 3,023 3,233 - - - -
shares
Repayment to creditors - 26 - - - -
As at 31 As at 31 As at 31 As at 31 As at 31 As at 31
March 2013 March 2012 March 2013 March 2012 March 2013 March 2012
(ii)Balances outstanding
Trade and other receivables (loans - 705 - - 313 266
and advances recoverable)
Loans and borrowings (unsecured 5,309 - 13,071 - - -
intercorporate deposits)
Trade and other payables 511 241 332 432 - -
Redeemable preference shares 28,240 26,374 - - - -

104 Jubilant Energy NV

 Particulars Fellow subsidiary Enterprises that are directly
or indirectly under the control
or significant influence of key
management personnel
(In thousands of US dollars) For the year For the year For the year For the year
ended 31 March ended 31 March ended 31 March ended 31 March

Overview
2013 2012 2013 2012
(i) Transactions
Loans taken 1,103 - - -
Loans and advances given - - - 580
Expenses incurred by the Group on - - 5 -
their behalf

Business Review
Expenses incurred on behalf of the - - 81 24
Group
Interest expense on inter corporate 24 - - -
deposits
As at 31 March As at 31 March As at 31 March As at 31 March
2013 2012 2013 2012
(ii) Balances outstanding
Trade and other receivables (loans 2 2 11,100 11,611
and advances recoverable)

Governance
Loans and borrowings (unsecured 1,126 - - -
intercorporate deposits)

(e) Key management personnel compensation*

The key management personnel compensation (net of reimbursements) is as follows:
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Short-term employee benefits 1,395 1,385
Post-employment benefits 36 34

Financials
Share-based payment expense 141 1,672
Directors' fee 130 122
Total 1,702 3,213
*Provision for defined benefit obligation and other long-term employee benefits has not been considered, since the provisions
are based on actuarial valuations for the Group’s entities as a whole.

(f) Guarantees given by the ultimate holding company

i. Secured foreign currency term loans taken by JENV from EXIM: Corporate guarantees in respect of these loans
have been given by Jubilant Enpro. Refer to Note 16(i)(a) and 16(i)(b).

ii. Secured term loans taken by JEKPL from banks: These loans are secured by primary charge on all present and future
receivables of Jubilant Enpro relating to Kharsang field. Refer to Note 16(ii)(a).

iii. Non-fund based limit taken by JOGPL, JODPL and JEKPL to furnish bank guarantee: Corporate guarantee in
respect of this non-fund based facility has been given by Jubilant Enpro. Refer to Note 16(v).

(g) As at 31 March 2013, performance guarantee amounting to USD 2,885 thousand (31 March 2012: USD 904 thousand) given
on behalf of Jubilant Securities Private Limited against a lien on the term deposits of JENVPL in respect of Golaghat block.

(h) As at 31 March 2013, performance guarantee amounting to USD 1,823 thousand (31 March 2012: USD 1,907 thousand) given
on behalf of Jubilant Capital Private Limited against a lien on the term deposits of JEKPL in respect of Ankleshwar block.

(i) As at 31 March 2013, performance guarantee amounting to USD 856 thousand (31 March 2012: USD 895 thousand) given on
behalf of Jubilant Capital Private Limited against a lien on the term deposits of JENVPL in respect of Ankleshwar block.

(j) Pledge of 51% of the promoters’ shareholding in JEKPL in respect of a term loan facility from banks. Refer to Note 16ii(a).

Annual Report & Accounts 2013 105

 (k) Non-disposal undertaking along with power of attorney in respect of 51% of the total issued and paid-up shares of JODPL held
by JOGIL. Refer to Note 16(ii)(b) and Note 16(ii)(c).

(l) BG limit of USD 3,680 thousand (31 March 2012: USD 3,849 thousand) is available for JCPL and JSPL within the overall limit
of USD 13,982 thousand (31 March 2012: USD 14,625 thousand) of JOGPL and negative lien on participating interest of JCPL
and JSPL in the blocks. Refer to note 16(v).

35. Capital commitments

In accordance with the terms of the production sharing contracts entered into by the Group along with other consortium
partners with the Government of India in respect of oil and natural gas fields/blocks, the Group has certain minimum
exploration and development commitments with estimated expenditures of USD 2,723 thousand as at 31 March 2013
(31 March 2012: USD 910 thousand). Capital commitments are identified based on the contracts entered into with the suppliers/
service providers.

The Group has continuing commitments towards minimum work programmes, etc., in terms of production sharing contracts for
various oil and natural gas assets. Such commitments aggregate USD 115,154 thousand as at 31 March 2013 (31 March 2012: USD
45,982 thousand).

36. Contingencies
Contingent liabilities in respect of matters currently in dispute comprise:

i. Jubilant Oil and Gas Private Limited (JOGPL):

- During the year ended 31 March 2008, JOGPL had received a demand of USD 60 thousand, together with penalty/interest
of USD 110 thousand to the extent determined/quantified in the order, from the service tax authorities for alleged non-
payment of service tax on advisory and assisting services provided to various foreign entities for their operations in India.
During the year ended 31 March 2009, JOGPL has deposited under protest 50% of the demand amounting to USD 30
thousand with the authorities. Further, during the year ended 31 March 2009, JOGPL has filed an appeal against the said
demand which is pending for hearing with Customs, Excise and Service Tax Appellate Tribunal. During the year ended 31
March 2011, JOGPL deposited an amount of USD 9 thousand for staying the demand. The case is currently pending with
the Customs, Excise and Service Tax Appellate Tribunal. Considering the facts and current status of the case, management
is confident that there shall not be any liability devolving on the Company in this matter.

- JOGPL (as Operator of Tripura block) is involved in a dispute with Dewanchand Ramsaran Industries Private Limited (‘DRIPL’)
for alleged delays in mobilising a rig. JOGPL has claimed for liquidated damages from DRIPL of USD 450 thousand and
cost of hire of various equipments by it on behalf of DRIPL amounting to USD 79 thousand. JOGPL has made a net claim
of USD 305 thousand against DRIPL on the aforesaid account after adjusting its invoice for USD 224 thousand. JOGPL has
further disputed DRIPL invoices to the extent of USD 29 thousand. JOGPL was also in the possession of a performance
bank guarantee amounting to INR 3,750 thousand (USD 69 thousand) from DRIPL towards due performance of the
contract. Besides this, DRIPL has failed to remove its rig from the well site. JOGPL has issued several reminders to DRIPL
for removal of the rig followed by a notice of criminal trespass. DRIPL has disputed that it has committed criminal trespass.
JOGPL has invoked the performance bank guarantee. DRIPL has alleged that the demands raised by JOGPL are not tenable
and has claimed the amount of bank guarantee encashed by JOGPL along with interest. Both parties have filed suit before
the High Court of Gauhati, Agartala Bench and the case is currently under hearing. Considering the current status of the
case, management believes that there shall not be any liability in this regard.

ii. Jubilant Energy Kharsang Private Limited (JEKPL):

- The Ministry of Petroleum and Natural Gas (MOPNG) had prescribed the effective rate of oil cess being USD 16.55
(INR  900) per metric tonne (PMT). During the period upto 31 March 2005, the Operator paid oil cess at USD 15.69
(INR 853) PMT. The differential amount of USD 0.86 (INR 47) PMT was paid as additional royalty to the State Government.
The excise department considered short payment of oil cess of USD 0.86 PMT (INR 47) and demanded the differential oil
cess of USD 27 thousand (JEKPL’s share)(including education cess amounting USD 2.5 thousand (JEKPL’s share)), along
with interest and a penalty of USD 13 thousand (JEKPL’s share). Though the principal amount of demand i.e. USD 27
thousand (JEKPL’s share) has been paid to the excise department, interest and penalty amounting to USD 13 thousand
(JEKPL’s share) have not been paid and an appeal has been filed before the Custom Excise & Service Tax Appellate Tribunal,
Kolkatta and the Commissioner, Central Excise (Appeals) Guwahati against the levy of interest and penalty.

The Appellate Tribunal and Commissioner (Appeal) has waived the requirement of pre-deposit of the penalty/interest
during the pendency of the appeal. The Operator is contesting the demands and believes that its portion is likely to be
upheld. Therefore, no provision for the same has been made in the books of account.
106 Jubilant Energy NV
 - The Operator had entered into a contract with the Geophysical Institute of Israel (GII) for acquisition, processing and
interpretation (API) of 3D seismic data of Kharsang oilfield area. During the financial year 2009-10, GII has filed a claim of
USD 3,617 thousand (JEKPL’s share USD 904 thousand) with interest against the Operator before the Arbitration Tribunal
for the remaining portion of the job completed, damages and theft of their equipments, loss due to non-availability of TDS
certificates, payment of performance bonds and reimbursement of various administrative costs, etc. The claim is disputed
by the Operator due to non-performance of entire the 3D seismic project by GII in accordance with Contract provisions

Overview
and also most of the claims are out of contractual provisions and hence not payable. The Arbitral Tribunal has passed a
majority Award on 30 July 2012 allowing the claims of GII to the tune of USD 1,387 thousand (JEKPL’s share USD 347
thousand) for unpaid invoices and USD 9 thousand (JEKPL’s share USD 2.25 thousand) for payments made to locals by GII.
The Tribunal also directed the Operator to pay interest @ 6% per annum on unpaid amounts and an amount of USD 24
thousand (JEKPL’s share USD 6 thousand) as cost of arbitration proceeding. Aggrieved by the Arbitral Award, the Operator
has challenged the Award by filing an objection petition before Hon’ble Delhi High Court to set aside the impugned

Business Review
Award. The said objection petition of the Operator is pending before Hon’ble Delhi High Court and the Operator has fair
chances to get the impugned Award set aside. The claim is disputed by the Operator due to non-performance of entire the
3D seismic project by GII in accordance with the Contract provisions and also most of the claims are out of contractual
provisions and hence not payable.

The Operator has also filed a counter claim of around USD 2,452 thousand (JEKPL’s share USD 613 thousand) for loss
suffered due to non-completion of entire the 3D seismic project in accordance with the Contract provisions. Pending
resolution, the Operator has not acknowledged and accounted for the claim amounting to USD 3,262 thousand (JEKPL’s
share USD 816 thousand) (net of a performance guarantee amount of USD 385 thousand (JEKPL’s share USD 96 thousand))

Governance
plus interest as liability. The Operator is of the belief that its position is likely to be upheld. Therefore, no provision for the
same has been made in the books of account.

- The Operator had entered into a contract with C.A.T. Geodata GmbH (CAT) for acquisition, processing and interpretation
(API) of 3D seismic data of Kharsang Oil Field area during the financial year 2011-12. On repeated failure of CAT to
perform its contractual obligations, the Operator terminated the contract and encashed the unconditional performance
Bank Guarantee of USD 522 thousand (JEKPL’s share USD 131 thousand). During the year, CAT filed an Arbitration Petition
before Hon’ble Supreme Court for appointment of Sole Arbitrator to resolve the dispute and claimed return of Bank
Guarantee of Rs. USD 522 thousand (JEKPL’s share USD 131 thousand), payment for unpaid Invoice of USD 57 thousand

Financials
(JEKPL’s share USD 14 thousand) and USD 2,474 thousand (JEKPL’s share USD 619 thousand) for direct operational
expenses. Disposing of the Arbitration Petition, Hon’ble Supreme Court has appointed the Sole Arbitrator to resolve the
dispute.

The Operator has also filed a counter claim of approx. USD 1,253 thousand (JEKPL’s share USD 313 thousand) plus interest
for additional costs incurred/to be incurred by the block for completing the balance data acquisition. Pending resolution,
the Operator has not acknowledged and accounted for the claim amounting to USD 3052 thousand (JEKPL’s share USD
763 thousand) plus interest as liability. The Operator is of the belief that its position is likely to be upheld. Therefore, no
provision for the same has been made in the books of account.

iii. Jubilant Offshore Drilling Private Limited (JODPL):

- GSPC as an Operator has received a demand of USD 2,082 thousand (JODPL’s share USD 208 thousand) towards service
tax, a penalty of USD 2,024 thousand (JODPL’s share USD 202 thousand) and interest, as applicable under the Finance Act,
1994, from the Commissioner of Central Excise, Ahmedabad pertaining to service tax on the off-shore services received by
the Block during the period from 12 March 2003 to 31 March 2007. In response to this demand, the Operator has made
an appeal in the Custom Excise and Appellate Tribunal (CESTAT) although the Operator has paid an amount of USD 1,139
thousand (JODPL’s share USD 114 thousand) under protest to the authorities. The Operator has received an order from
CESTAT waiving the requirement of deposit of the balance amount of service tax and penalties imposed upon the Operator
and for stay of recovery of the same during the pendency of the appeal. CESTAT has passed an order to set aside the
demand of USD 673 thousand (JODPL’s share USD 67 thousand) in relation to services received prior to 18 April 2006 and
reminded the matter back to Authority for fresh adjudication. Further, based on the legal opinion taken by the Operator
in the matter, the Block is not liable to service tax on the services availed in the matter under appeal and hence under the
facts and circumstances, the balance demand (net of deposit) has been classified and disclosed as contingent liability.

- GSPC as an Operator has entered in to a contract with Tuff Drilling Private Limited for the supply and installation of 3000
hp modular rig in the month of May 2010. Due to inability of Tuff Drilling to provide the rig in the stipulated timelines, the
Operator has cancelled the contract and encashed the performance bank guarantee amounting to USD 2,859 thousand
[JODPL’s share USD 286 thousand]. Against the above actions of Operator, Tuff Drilling has raised a claim of USD 132,340

Annual Report & Accounts 2013 107

 thousand [JODPL’s share USD 13,234 thousand] against GSPC for loss caused to it for illegal termination of the contract,
while GSPC has made a counter claim for breach of contract for USD 94,869 [JODPL’s share USD 9,487 thousand]. Since
the matter is pending in arbitration till date, the claims have not been provided for in the books and the amount encashed
has been included under the head “Trade and other payables”.

- GSPC as an Operator has entered into a contract with Saipem (Portugal) Comercio Maritimo Su Lda (“Saipem”) for hiring
drilling rig Perro Negro III for exploration in the Block. Saipem has represented to have performed certain drilling and
operational activities which were beyond the scope of work as stipulated in the Contract dated 1 April 2004 whereby the
drilling activities were extended over an additional time period. However, the Operator did not agree to accept the claim
of Saipem including service tax thereon. Accordingly, Saipem has initiated arbitration proceeding against the Operator,
claiming higher day rate on the ground that the contract is for the number of days and for the days beyond the contract
period, it should be paid at higher rates than the contract rate. However, GSPC has maintained the stand that contract
is for number of wells drilled and not for days/period and hence Saipem is contractually liable to work at contract rate.
Further, GSPC has put counter claim against Saipem for poor performance of the drilling equipments. The claim made by
Saipem which is subject to arbitration proceedings is for USD 143,452 thousand (JODPL’s share USD 14,345 thousand )
while a counter claim made by GSPC amounts to USD 36,909 thousand (JODPL’s share USD 3,691 thousand).

Apart from the stated claim, Saipem has also claimed an amount of USD 10,827 thousand (JODPL’s share USD 1,083
thousand) from the Operator towards Service Tax (including interest thereon), which Saipem was liable to pay on the
services provided to the Operator. As per the legal opinion obtained by the Operator, the Block is not liable to service tax
on the services received from Saipem as rates in the contract are inclusive of all taxes. Since, the matter is pending in
arbitrations till date the claims have not been provided for in the books.

- In September 2005, GSPC as an Operator has entered in to contract with Atwood Oceanics Pacific Ltd (“AOPL”) for drilling,
completing or abandoning the wells identified by GSPC drilling program. AOPL has demanded service tax on above
services from July 2007 to July 2009, whose amount was USD 8,063 thousand (JODPL’s share USD 806 thousand), which
in the opinion of Operator is not in accordance with the said contract. Accordingly, dispute arose between the Operator
and AOPL with respect to whether the Operator was liable for additional reimbursement for service tax amounts over
and above the contract price in accordance with the Contract or not. The service tax liability of AOPL was assessed by the
Commissioner and the said assessment order was challenged by AOPL as well as the department before the CESTAT. The
Operator had also filed an intervention application before the CESTAT which was disallowed by the CESTAT. Therefore, the
Operator is unaware of the finality of the above said assessment order of the Commissioner.

While the Operator continues to dispute AOPL’s action of charging service tax over and above the contract price, the
Operator continued to make the payments of AOPL’s invoices (net of the service tax charged by AOPL) as per the Contract
subject to AOPL demonstrating to the Operator that AOPL has made an actual deposit of the service tax amount to the
Government.

However, with respect to three invoices raised by AOPL in July 2009 and August 2009, AOPL has claimed that the said
invoices were paid by the Operator after delay of 733 days in September 2011. Accordingly, AOPL has initiated an
Arbitration Proceeding against the Operator claiming interest on delayed payment of the said invoices by the Operator. The
said Arbitration is pending before the Arbitrator. AOPL has filed a statement of claim, claiming an amount of USD 1,527
thousand (JODPL’s share USD 153 thousand) from the Operator.

iv. Jubilant Energy Limited (JEL):

In previous years, the Operator of T-47/P permit in Australia had issued default notices to Jubilant for failing to pay its share of
joint account expenses (excluding accrued interest). The total amount of the claim was USD 3,919 thousand. The Group was of
the view that Operator intends to force its decision to drill a low-prospective well location upon the minority partners. The Group
had also alleged gross negligence and mismanagement of the permit on the part of Operator. Late the matter was settled in
arbitration and accordingly, during the year ended 31 March 2012, the Group has settled the liability with a payment of USD
1,740 thousand to the Operator. There are no further claims with respect to this matter.

37. Financial risk management

Overview
The Group’s activities expose it to a variety of financial risks that arise as a result of its exploration, development and production of
oil and natural gas and also financing activities. These are the following:
a) Credit risk

108 Jubilant Energy NV

b) Liquidity risk

c) Market risk

d) Operational risk

Overview
Risk management framework
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives; policies; and processes
for measuring and managing such risks, and the Group’s management of capital. Further, quantitative disclosures are included
through these Consolidated Financial Statements, wherever considered appropriate.

The Board of Directors oversees establishment and execution of the Group’s risk management framework. The Group’s risk

Business Review
management policies aim to identify and analyse the risks faced by the Group, to set appropriate risk controls, and monitor risks
and adherence to market conditions and the Group’s activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and
obligations.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board of Directors has an objective to develop and monitor the Group’s risk management policies and strengthen the risk
management framework. The Board of Directors, after deliberations, has identified enterprise-wide risks.

Governance
The Board of Directors is also responsible for reviewing and updating the risk profile, monitoring the effectiveness of the risk
management framework and reviewing at least annually the implementation of the risk management policy and framework.

The Group’s risk management policy covers specific areas, such as credit risk, liquidity risk, foreign exchange risk and derivative
financial instruments.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised, in respect of each class of financial assets and financial liabilities are

Financials
disclosed in Notes 2 and 3 to the Consolidated Financial Statements.

a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligation. Credit risk mainly arises from the trade and other receivables and investments.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of a customer. The entire revenue (from
sale of crude oil) of the Group is generated from a customer (Government of India-owned company), which is located in India.
Receivables from that customer are normally collected within 30 - 35 days from the date of invoice. The invoices are generated
at the last date of the month for all deliveries during the month.

The Group does not anticipate any default as it transacts with entities owned by the Government of India and historically has
not experienced any collection issues with its customer.

Besides the above, the Group has a credit risk exposure primarily in respect of the Group’s operated blocks towards recoverables
from co-venturers. The Group has a policy to carry out a periodic reconciliation in respect of such receivables.

The credit risk is mitigated since in respect of certain co-venturers, the Group has payables towards the Group’s non-operated
blocks.

The Group limits its exposure to credit risk by investing only in liquid securities and with counterparties that have a good credit
rating. Management does not expect any counterparty to fail to meet its obligation.

Investments
The Group limits its exposure to credit risk by occasionally investing only in established mutual funds. Management actively
monitors the performance of such mutual funds and does not expect any counterparty to fail to meet its obligations.

Annual Report & Accounts 2013 109

 Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date is as follows:
(In thousands of US dollars) Note As at As at
31 March 2013 31 March 2012
Financial assets at fair value through profit or loss
Short-term investments 7 - 24,857
Loans and receivables
Trade and other receivables (current) 8 30,380 26,852
Trade and other receivables (non-current) 13 1,057 970
Total loans and receivables 31,437 27,822
Cash and cash equivalents 10 22,607 56,287

Ageing of trade receivables:

(In thousands of US dollars) Note As at As at
31 March 2013 31 March 2012
Not past due 1,893 1,744
Past due 0 to 30 days - -
Total 1,893 1,744

Historically, the Group has not faced any default from any of its counterparties and hence believes that no impairment allowance
is necessary in respect of trade and other receivables.

b) Liquidity risk
The Group’s liquidity risk management policy involves management of short-term, medium-term and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate cash reserves, banking facilities
and reserve borrowing facilities by continuously monitoring forecasted and actual cash flows and matching the maturity profiles
of financial assets and liabilities. (Also refer to Note 2 b)

The Group’s Finance department is responsible for managing the short-term and long-term liquidity requirements of the Group.
The short-term liquidity situation is reviewed on a daily basis. Any breaches of these policies are to be reported to the Board of
Directors. The longer-term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions
are taken according to the situation.

The Group ensures that it has sufficient cash on demand to meet expected operational expenses on a regular basis. To achieve
this objective, the Group prepares annual capital expenditure budgets, which are regularly monitored and updated as considered
necessary.

Further, the Group utilises authorisation of expenditures on both operated and non-operated projects to further manage capital
expenditure. In respect of producing block, the Group also attempts to match its payment cycle with collection of oil revenue.

The contractual maturity profile of the Group’s obligations are as under:

As at 31 March 2013 Transaction Carrying Contractual Less than Between Over 5 Total
currency amount maturities* 1 year 1 and 5 years
years
(In thousands of US dollars)
Non-derivative financial
liabilities
Loans and borrowings
(including accrued interest)
Secured foreign currency term loans USD 89,811 104,256 45,731 58,525 - 104,256
Secured term loans from banks INR 304,818 552,458 51,456 292,774 208,228 552,458
Unsecured inter-corporate deposits INR 19,506 22,544 1,387 21,158 - 22,545
12% Redeemable preference shares INR 28,240 41,576 - 41,576 - 41,576
Other loans INR 10 11 11 - - 11
Trade and other payables 21,557 21,557 21,557 - - 21,557
Total 463,942 742,402 120,142 414,033 208,228 742,403
*Represents undiscounted cash flows of interest and principal.

110 Jubilant Energy NV

 As at 31 March 2012 Transaction Carrying Contractual Less than Between Over 5 Total
currency amount maturities* 1 year 1 and 5 years
years
(In thousands of US dollars)
Non-derivative financial
liabilities

Overview
Loans and borrowings
(including accrued interest)
Secured foreign currency term loan USD 86,823 110,910 5,938 92,066 12,906 110,910
Secured term loan from banks INR 263,513 427,052 52,372 275,333 99,347 427,052
12% Redeemable preference shares INR 26,374 43,487 - 34,592 8,895 43,487
Other loans INR 36 39 27 12 - 39

Business Review
Trade and other payables 23,312 23,312 23,058 254 - 23,312
Total 400,058 604,800 81,395 402,257 121,148 604,800
*Represents undiscounted cash flows of interest and principal.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different
amounts.

c) Market risk
Market risk is the risk that arises from changes in market prices, such as foreign exchange rates, interest rates, equity prices

Governance
and commodity prices and will affect the Group’s income or the value of its financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Group is exposed to interest rate risk that arises mainly from debt. The Group is exposed to interest rate risk because the
fair value of fixed rate borrowings and the cash flows associated with floating rate borrowings fluctuate with changes in interest
rates.

The Group is also exposed to foreign currency risk on certain transactions that are denominated in a currency other than the

Financials
respective Group entity’s functional currency, that expose the Group to exchange rate fluctuations. The risk is that the functional
currency value of cash flows will vary as a result of movements in exchange rates.

The Group is exposed to market risk with respect to its investments in mutual funds.

The Board of Directors is responsible for setting up policies and procedures to manage market risks of the Group.

i. Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk was based on the following amounts as at the reporting dates (in equivalent
US dollars):
(In thousands of US dollars) As at 31 March 2013
INR USD EUR CAD AUD GBP
Financial assets
Trade and other receivables* 16,887 - - - - -
Cash and cash equivalents - - 25 1 - -
Financial liabilities
Trade and other payables 117 587 590 64 1 233
Loans and borrowings# 7,000 - - - - -
Net exposure 9,770 (587) (565) (63) (1) (233)

Annual Report & Accounts 2013 111

 (In thousands of US dollars) As at 31 March 2012
INR USD EUR CAD AUD GBP
Financial assets
Trade and other receivables* 16,351 - - - - -
Cash and cash equivalents - - 81 1 - -
Financial liabilities
Trade and other payables 33 474 681 51 4 240
Net exposure 16,318 (474) (600) (50) (4) (240)
* These pertain to preference shares which have been issued by Indian entities to Cyprus entities. These preference shares
have been eliminated on consolidation. However, the Group is exposed to foreign currency risk as the exchange difference
on the loans and receivable component of these preference shares is recognised in profit or loss.
# This pertains to unsecured loan given by Cyprus entity to an Indian entity. This unsecured loan has been eliminated on
consolidation. However, the Group is exposed to foreign currency risk as the exchange difference on the unsecured loan
is recognised in profit or loss.

The Group primarily takes borrowings in the functional currency of the respective entity, therefore the Group is not
exposed to any significant currency risk.

The following exchange rates against USD 1 were applied to the currencies which are generally used by the Group:
Average rate Reporting date spot rate
For the year ended 31 March As at
2013 2012 31 March 2013 31 March 2012
INR 54.39 48.25 54.36 51.97
EUR 0.78 0.73 0.78 0.75
CAD 1.00 0.99 1.02 1.00
AUD 0.97 0.96 0.96 0.96

Sensitivity analysis
A strengthening of the US dollar, as indicated below, against the INR as at 31 March 2013 and as at 31 March 2012 would
have increased/(decreased) profit or loss and equity by the amounts shown below (without considering consequential
impact). This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably
possible at the end of the reporting period. The analysis assumes all other variables remain constant.

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
10 percent strengthening of USD against INR (924) (1,685)

Any change in the exchange rate of USD against currencies other than INR is not expected to have significant impact on
the Group’s profit or loss.

A weakening of the US dollar against the above currencies at 31 March 2013 and as at 31 March 2012 would have had
the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables
remain constant (without considering consequential impact).

ii. Interest rate risk

All the financial assets and financial liabilities of the Group are either interest-free or at a fixed rate of interest except
for borrowings at various floating rates linked to prime lending rates of respective banks. The carrying value of this loans
as at 31 March 2013 is USD 394,629 thousand (31 March 2012: USD 350,336 thousand). Accordingly, the Company is
exposed to cash flow interest rate risk on its secured loans.

The Company analyses its interest rate exposure regularly. Various scenarios are analysed taking into consideration
refinancing, alternative financing, etc., Based on these scenarios, the Company calculates the impact on profit and loss of
a defined interest rate shift.

112 Jubilant Energy NV

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Fixed rate instruments
Financial assets
Term deposits 13,962 19,893
Restricted cash - margin money 5,136 4,429

Overview
Restricted cash - deposit under site restoration fund scheme 263 251
19,361 24,573
Financial liabilities at amortised cost
12% Redeemable preference shares 28,240 26,374
Other 10 36
28,250 26,410

Business Review
Net financial liabilities (fixed rate instruments) (8,889) (1,837)

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Variable rate instruments
Financial liabilities at amortised cost
Secured foreign currency term loan 89,811 86,823
Secured term loans from banks 304,818 263,513
Net financial liabilities (variable rate instruments) (394,629) (350,336)

Governance
Fair value sensitivity analysis for fixed rate instruments and derivative financial instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through the statement of comprehensive
income. Therefore, changes in interest rate at reporting date will not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 bps in interest rates as at the reporting dates would have increased/(decreased) profit or loss and equity by
the amounts shown below:

Financials
As at 31 March 2013 Impact on comprehensive income
(In thousands of US dollars) 100 bps increase 100 bps decrease
Secured foreign currency term loans (898) 898
Secured term loans from banks (3,047) 3,047

As at 31 March 2012 Impact on comprehensive income

(In thousands of US dollars) 100 bps increase 100 bps decrease
Secured foreign currency term loans (853) 853
Secured term loans from banks (2,630) 2,630

iii. Commodity price risk

Commodity price risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in commodity
prices. Commodity prices for oil and natural gas are impacted by not only the relationship between INR and US dollars,
but also economic events that dictate the levels of supply and demand. The sale of crude oil is made to a customer, a
Government of India-owned company, pursuant to a contract by which the price of crude oil is linked to international
market prices. The Group has not entered into any forward contracts with a fixed rate at the time of delivery as the price
is based upon prevailing international market at the time of sale of crude oil. Accordingly, the Group has no financial
instruments as at the reporting date which are exposed to commodity price risk.

iv. Equity price risk

Sensitivity analysis
The Group had investments in mutual funds which have been classified as held-for-trading. An increase in 5% market
value/net assets value of these investments will decrease the losses by USD 1,243 thousand for the year ended 31 March
2012. A decrease will have an equal but opposite impact on losses for the period. There are no investments in mutual
funds as at 31 March 2013.

Annual Report & Accounts 2013 113

 v. Fair values
Fair values versus carrying amounts
All financial assets and liabilities are carried at amortised cost, except as detailed below:
a) Financial assets at fair value through profit or loss: Investment in mutual funds held for trading

The fair value of the Group’s financial assets and financial liabilities significantly approximates their carrying amounts.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:
Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 : inputs for the asset or liability that are not based on observable market data (unobservable inputs).

As at 31 March 2013 Level 1 Level 2 Level 3

(In thousands of US dollars)
Financial assets at fair value through profit or loss - - -
Total - - -

As at 31 March 2012 Level 1 Level 2 Level 3

(In thousands of US dollars)
Financial assets at fair value through profit or loss 24,857 - -
Total 24,857 - -

d) Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes,
personnel, technology, and infrastructure, and from external factors (other than credit, market, and liquidity risks) such as those
arising from perspective of legal and regulatory requirements and generally accepted standards of corporate behaviour.

The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the
Group’s reputation with overall cost effectiveness.

The Group has an Internal Control Framework which identifies key controls and supervision of operational efficiency of designed
key controls. The framework is aimed to providing an elaborate system of checks and balances based on self assessment.
This responsibility is supported by the development of overall Group standards for the management of operational risk in the
following areas:
- requirements of appropriate segregation of duties, including the independent authorisation of transactions;

- requirements of reconciliation and monitoring of transactions;

- compliance with regulatory and other legal requirements;

- documentation of controls and procedures;

- requirements of periodic assessment of adequacy of controls and procedures to address the risks identified;

- requirements of reporting of operational losses and proposed remedial action;

- development of contingency plans;

- training and professional development;

- ethical and business standards;

- risk mitigation, including insurance, where this is effective.

114 Jubilant Energy NV
 Capital management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue
to provide returns for shareholders and benefits for other stakeholders and to maintain an appropriate capital structure of debt
and equity.

All of the Group’s oil and natural gas assets, except for the Kharsang block, are presently in an exploration/development stage.

Overview
Therefore, the Group requires significant funding to finance the exploration/development activities.

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce to the cost of capital through
prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to
maintain investor, creditor and market confidence and to sustain future development of the business.

Business Review
The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying oil and natural gas assets. The Board of Directors also monitors the possibility of dividends to
equity shareholders, considering performance and related regulatory requirements.

The Group has maintained significant external borrowings to finance its operations. Considering the future requirements and
potential, the Group has also raised money from the capital market.

The Group monitors capital, using a medium-term view of three to five years by monitoring the gearing ratio, which is a measure
of financial leverage demonstrating the degree to which the operations are funded by own funds to borrowed funds.

Governance
38. Events occurring after the balance sheet date
Subsequent to year-end, in respect of T-47/P permit in Australia, the National Offshore Petroleum Titles Administrator has given its
consent to the title holders to the Block to enter into a Good Standing Agreement (“GSA”) before 31 May 2013 in relation to the
unfinished 3rd year work program. The Group has decided not to enter into a Goods Standing Agreement with National Offshore
Petroleum Titles Administrator. This has no financial implication.

39. Disclosures in respect of jointly controlled assets

The Group is a member of ten unincorporated joint ventures for the exploration and development of blocks in Mehsana, Ahmedabad,

Financials
Tripura, Cauvery, Krishna Godavari (KG), Australia, Golaghat, Manipur (two blocks) and Myanmar block. All the ten blocks are at an
exploration stage as at 31 March 2013, except in case of KG block where one portion of the block (Deen Dayal West) has entered into
the development phase. In addition to the above, the Group is also a member in an unincorporated joint venture for Kharsang block
which is in the production stage (refer to Note 1 of the Consolidated Financial Statements for participating interests in these blocks).
Based on technical and commercial assessment, the Group has already recognised impairment loss for carrying value of assets in
respect of Cauvery, Mehsana, Australia and Golaghat blocks (refer to Note 29).

a) Ahmedabad PSC (Sanand Miroli block)

Jubilant Enpro, the ultimate holding company of the Group, was a member of an Unincorporated Joint Venture for the exploration
and development of Ahmedabad PSC with a 20% participating interest. Pursuant to a Business Transfer Agreement, the entire
participating interest of 20% in the said venture, held by Jubilant Enpro, was transferred effective from 15 October 2004, into
the Group.

The period of Ahmedabad PSC was till 28 July 2010, plus any extension granted to the term of the Petroleum Exploration
License (PEL). All the phases of the minimum work program were completed by consortium in July 2010. The Consortium had
declared discoveries in both Miroli and Sanand area.

The Field Development Plan for M1-M6 cluster has been approved by DGH and consortium is planning to start production in
near future from existing wells.

The Declaration of commerciality for Sanand Area has also been approved by DGH in the current year, after which the consortium
is in the process of filing FDP. In FDP, the Consortium is seeking permission from DGH for the production from the existing six
wells for a initial period.

For both Miroli and Sanand area, management is of the view that once the initial flow rate and behavior of above wells
and reservoir is understood, then consortium will come up with an appropriate development plan and adequate financing
arrangements, with additional wells to cover the entire development area.

Annual Report & Accounts 2013 115

 Based on above facts, Management is of the view that until the entire development plan has been evaluated and firmed up, it
will be premature to consider any impairment since sufficient data doesn’t exists to indicate that carrying amount of the block
is unlikely to be recovered in full.

b) Tripura PSC
The effective date of Tripura PSC is 6 April 2004 with an exploration period till 6 April 2010 plus any extension granted to
the terms of PEL. The Group is an Operator in the block with a participating interest of 20%. The Operator has drilled five
exploratory wells, while three exploratory wells were drilled in exploration phase-I and two wells were drilled in exploratory
phase-II. The block is in an appraisal stage with respect to the Kathalchari well drilled and in this phase two appraisal wells were
drilled to appraise the Kathalchari discovery. The Operator has filed a Field Development plan to DGH in the current year.

c) Krishna Godavari PSC (KG)

Jubilant Enpro, the ultimate holding company of the Group, was a member of an Unincorporated Joint Venture for the exploration
and development of KG block with 10% participating interest. Pursuant to the Scheme of Amalgamation and Arrangement
approved by the Hon’ble Delhi High Court, the entire participating interest of 10% in the said venture, held by Jubilant Enpro,
was de-merged with effect from 16 October 2004, into the Group.

Pursuant to the Scheme, the participating interest in KG field was transferred from Jubilant Enpro to the Group on a going-
concern basis. Accordingly, all the assets, liabilities, rights, licenses, benefits, obligations, etc., in the participating interest in the
block, as at 15 October 2004, were transferred to and vested in the Group from Jubilant Enpro. The effective date of KG block
PSC was 12 March 2003 with an exploration period until 12 March 2010, subject to any extension being granted to the PEL.
The Group is non-operator with a participating interest of 10%.

During the financial year 2010-11, the Operator has awarded the contract of designing, engineering, procurement, construction
and commissioning assistance for execution of the Onshore Gas Terminal (OGT) to Engineers India Limited (EIL) on open book
estimate (OBE) basis for a total estimated cost of USD 299,146 thousand (JODPL’s share: USD 29,914 thousands) (approx.)
out of which USD 269,331 (JODPL’s share USD 26,933 thousand) has been incurred till date and accounted under the head
Property, plant and equipment in Note 11. The above contract was entered into on 7 December 2010, with effective date as at 2
April 2010. Further, Operating Committee has approved the awarding of contract to EIL on 14 December 2010 and as required
under Article 23.2 of the PSC, the same has been forwarded to DGH for Management Committee approval on 7 June 2011,
which is pending as on date.

The budget for the Annual Work Programme amounting to USD 703,430 thousand (JODPL’s share USD 70,343 thousand) for
the year 2011-12 was approved by operating Committee and subsequently reviewed by Management Committee. However,
the said budget has been revised to USD 583,337 thousand (JODPL’s share USD 58,334 thousand) which has been approved
by Operating Committee and is pending before the Management Committee for their review and approval.

The Joint venture has incurred Development cost of USD 603,361 thousand (JODPL’s share USD 60,336 thousand) and
exploration/appraisal cost of USD 55,815 thousand (JODPL’s share USD 5,582 thousand) during the year ended 31 March 2013.
The revised budget for the annual work program amounting to USD 811,826 thousand (JODPL’s share USD 81,182 thousand)
for the year 2012-13 was approved by the operating committee and is pending before the management committee for their
review and approval.

The Operator has relinquished 1340 sq.kms designated area of the block out of the total area of 1850 sq.kms awarded to the
block.

d) Kharsang PSC
Jubilant Enpro, the ultimate holding company of the Group, was a member of an Unincorporated Joint Venture for the
exploration and development of Kharsang oilfield in the State of Arunachal Pradesh with 25% participating interest. Pursuant
to the Scheme of Amalgamation and Arrangement approved by the Hon’ble Delhi High Court, vide orders dated 20 April 2005
and 23 May 2005, the entire participating interest of 25% in the said venture, held by Jubilant Enpro, was demerged with effect
from 15 October 2004, into the Group.

Accordingly, all the assets, liabilities, rights, licenses, benefits, obligations, etc., in the participating interest in Kharsang oilfield,
as at 15 October 2004, were transferred to and vested in the Group. The Group is a non-operator in the block and it is being
operated by Geo Enpro Petroleum Limited. During the year, the Operator has drilled 3 new producing wells and is in the process
of carrying out a drilling program named phase III extension wherein six new wells are contemplated.

116 Jubilant Energy NV

e) Manipur PSC
On 12 October 2009, JOGPL, JODPL and JEKPL (the ‘Jubilant Partners’) were provisionally awarded a participating interest in
the Manipur blocks (AA-ONN-2009/1 and AA-ONN-2009/2) under the NELP VIII bidding round. The formal announcement by
the Government of India in relation to this award of PSC was made on 30 June 2010 and 19 July 2010. The PEL was granted by
the State Government on 15 November 2010 and is valid for 4 years. Currently, seismic and other G&G studies are going on in
both the blocks.

Overview
Consequently, the Group holds an aggregate 100% participating interest in relation to Manipur blocks. JOGPL is the Operator
of these blocks.

f) Myanmar PSC
The PSC of the block was signed on 28 May 2012 and as per terms of the PSC the commencement of operation date was

Business Review
declared to be 23 August 2012. The initial exploration period is three years and will be valid up to 22 August 2015. The Group
has a 77.5% participating interest in the block with operatorship. Presently field surveys and Environment Impact Assessment
(EIA) work is being performed in the block.

Governance
Financials

Annual Report & Accounts 2013 117

 Statement of Financial Position
As at 31 March 2013

(In thousands of US dollars) Note As at As at

31 March, 2013 31 March ,2012
Assets
Trade and other receivables 3 5,009 4,154
Cash and cash equivalents 4 6,218 14,502
Total current assets 11,227 18,656
Property, plant and equipment 1 1
Financial fixed assets 5 152,766 146,766
Trade and other receivables 3 12,074 11,581
Total non-current assets 164,841 158,348
Total assets 176,068 177,004
Equity
Issued and paid-up share capital 9 110,630 110,630
Retained earnings (37,906) (33,991)
Stock options outstanding reserve 8 6,066 12,358
Total equity 78,790 88,997
Liabilities
Trade and other payables 7 1,451 1,184
Loans and borrowings - Current 6 40,044 1,531
Total current liabilities 41,495 2,715
Loans and borrowings 6 55,783 85,292
Total non-current liabilities 55,783 85,292
Total liabilities 97,278 88,007
Total equity and liabilities 176,068 177,004

The accompanying notes form part of the Company Financial Statements.

118 Jubilant Energy NV

 Statement of Comprehensive Income
For the year ended 31 March 2013

(In thousands of US dollars) Note For the year ended For the year ended

Overview
31 March 2013 31 March 2012
Other income 592 308
592 308
Share-based payment expense/(reversal) 10 (2,486) 4,140
General and administrative expenses 11 1,121 1,413
Results from operating activities 1,957 (5,245)

Business Review
Finance income 12 422 407
Finance expenses 12 10,100 6,821
Net finance income (9,678) (6,414)
Loss before income taxes (7,721) (11,659)
Income tax 13 - -
Loss for the year attributable to the Owners of the company (7,721) (11,659)
Other comprehensive income - -
Total comprehensive income for the year attributable to the (7,721) (11,659)
Owners of the company

Governance
Basic and diluted loss per share (USD) 14 (0.02) (0.03)

The accompanying notes form part of the Company Financial Statements.

Financials

Annual Report & Accounts 2013 119

 Statement of Changes In Equity
For the year ended 31 March 2013

Attributable to owners of the Company

(In thousands of US dollars) Issued and paid- Share premium Retained Stock options Total equity
up share capital earnings outstanding reserve
Balance as at 1 April 2011 5,581 105,049 (22,332) 8,196 96,494
Total comprehensive income
for the year
Loss for the year (11,659) (11,659)
Total comprehensive income - - (11,659) - (11,659)
for the year
Transactions with owners,
recorded directly in equity
Issuance of ordinary shares by - - - - -
JENV
Deduction of share issue - - - - -
expenses
Share-based payment 4,162 4,162
transactions
- - - 4,162 4,162
Balance as at 31 March 2012 5,581 105,049 (33,991) 12,358 88,997
Balance as at 1 April 2012 5,581 105,049 (33,991) 12,358 88,997
Total comprehensive income
for the year
Loss for the year - - (7,721) - (7,721)
Total comprehensive income - - (7,721) - (7,721)
for the year
Transactions recorded
directly in equity
Share-based payment - - 3,806 (6,292) (2,486)
transactions
- - 3,806 (6,292) (2,486)
Balance as at 31 March 2013 5,581 105,049 (37,906) 6,066 78,790

120 Jubilant Energy NV

 Statement of Cash Flows
For the year ended 31 March 2013

(In thousands of US dollars) Note For the year ended For the year ended

Overview
31 March 2013 31 March 2012
Cash flows from operating activities
Loss after tax for the year (7,721) (11,659)
Adjustments for:
Net finance expenses 9,173 6,168
Share-based payment expense/(reversal) 9 (2,485) 4,162

Business Review
Income tax 13 - -
Changes in assets and liabilities, net
Change in other assets 30 4
Inter-company advances/balances - Assets (510) (2,497)
Change in trade and other payables 272 160
Cash used in operating activities (1,241) (3,662)
Income tax paid - -
Net cash used in operating activities (1,241) (3,662)

Governance
Cash flows from investing activities
Purchase of property, plant and equipment - (1)
Investment in non-trade investments (6,000) (30,000)
Change in advances to co-ventures (445) -
Net cash used in investing activities (6,445) (30,001)
Cash flows from financing activities
Proceeds from loans and borrowings - 50,000

Financials
Payment of debt transaction cost - (300)
Interest paid (6,599) (3,569)
Loan / ICD received from holding company 6,000 -
Net cash from financing activities (599) 46,131
Net increase in cash and cash equivalents (8,285) 12,468
Cash and Cash Equivalents
Cash and cash equivalents at 1 April 4 14,502 2,034
Cash and cash equivalents at 31 March 4 6,218 14,502

The accompanying notes form part of the Company Financial Statements.

Annual Report & Accounts 2013 121

 Notes to the Company Financial Statements
For the year ended 31 March 2013

1. General
Incorporation and history

Jubilant Energy NV (‘the Company‘ or ’JENV’) was incorporated on 12 June 2007, in Amsterdam, the Netherlands, as a company with
limited liability. The address of the Company’s registered office is Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands. The
Company is a wholly-owned subsidiary of Jubilant Energy (Holdings) B.V. (JEHBV), a company incorporated in Netherlands, which
in turn is a wholly-owned subsidiary of Jubilant Enpro Private Limited (‘Jubilant Enpro’), a company incorporated under the laws of
India.

The Company’s activity continues to be that of a holding company. It has 11 subsidiary companies in the Netherlands, Canada, Cyprus
and India which are engaged directly or indirectly in oil & gas exploration & production business.

Statement of Compliance
The Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union and with in accordance Part 9 of Book 2 of the Netherlands Civil Code.

2. Significant Accounting Policies

The principles for the valuation of assets and liabilities and the determination of the result are the same as those applied to the
Consolidated Financial Statements, except for the financial fixed assets that are stated at historical cost.

For detailed accounting policies please refer to the Notes to the Consolidated Financial Statements for the year ended
31 March 2013.

3. Trade and other receivables

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Trade and other receivables - Current
Recoverable from Co-ventureres 445 -
Due from related parties 4,549 4,138
-Jubilant Energy Ltd- Canada 4,309 3,961
-Jubilant Energy International BV 240 177
Prepaid Expenses 15 16
Sub total 5,009 4,154
Trade and other receivables - Non-current
Due from related parties 12,021 11,499
-Jubilant Oil & Gas India Limited 348 248
-Jubilant Energy Limited 11,673 11,251
Prepaid Expenses 53 56
VAT recoverable - 26
Sub total 12,074 11,581
Total 17,083 15,735

The Company’s exposure to credit, currency and interest rate risks relating to trade and other receivables are disclosed in Note 16.

4. Cash and cash equivalents

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Bank balances 6,218 14,502
Total 6,218 14,502

The Company’s exposure to credit, currency and interest rate risks relating to cash and cash equivalents are disclosed in Note 16.

122 Jubilant Energy NV

5. Financial fixed assets

Overview
Subsidiaries Country % Orginal cost of Carrying value Additions Carrying value
(In thousands of US dollars) investment 31 March 2012 (disposals) 31 March 2013
Jubilant Energy Limited Canada 100 80,742 80,742 - 80,742
Jubilant Energy International B.V. Netherlands 100 24 24 - 24
Jubilant Oil & Gas India Ltd * Cyprus 100 66,000 66,000 6,000 72,000
Total 146,766 146,766 6,000 152,766

Business Review
Subsidiaries Country % Orginal cost of Carrying value Additions Carrying value
(In thousands of US dollars) investment 31 March 2011 (disposals) 31 March 2012
Jubilant Energy Limited Canada 100 80,742 80,742 - 80,742
Jubilant Energy India (V) Limited * Cyprus 100 2,000 2,000 - 2,000
Jubilant Energy International B.V. Netherlands 100 24 24 - 24
Jubilant Energy India Limited * Cyprus 100 28,000 28,000 - 28,000
Jubilant Oil & Gas India Ltd Cyprus 100 6,000 6,000 30,000 36,000
Total 116,766 116,766 30,000 146,766

Governance
*On 3 August 2011, pursuant to a restructuring and merger plan approved by the Court of Law, JEIL, JRIL and JEIVL have been
merged into JOGIL.

6. Loans and Borrowings

As at 31 March 2013
(In thousands of US dollars) Current Non-Current Total
Export Import Bank of India (SFCTL) 40,028 49,783 89,811

Financials
Unsecured inter-corporate deposits from related parties 16 6,000 6,016
40,044 55,783 95,827

As at 31 March 2012
Current Non-Current Total
Export Import Bank of India (SFCTL) 1,531 85,292 86,823
1,531 85,292 86,823

Please Refer to Note 16 of the Consolidated Financial Statements for detailed information on the terms and conditions and interest
rates.

7. Trade and other payables

(In thousands of US dollars) As at As at
31 March 2013 31 March 2012
Sundry creditors 204 248
Expenses payable 398 262
VAT payable 6 -
Due to related parties 843 674
- Jubilant Energy Holding BV 332 432
- Jubilant Oil and Gas Pvt Ltd 2 2
- Jubilant Enpro Pvt Ltd 509 240
Total 1,451 1,184

The Company’s exposure to credit, currency and interest rate risks relating to trade and other payables is disclosed in Note 16.

8. Share-based payment plans

In January 2010, the Company had established a share option programme that entitles share options of the Company to all employees
of the Company and others providing similar services under the Stock Option Plan. All the options would vest in four staggered
installments on an annual basis over a four-year period. In general, the options are exercised in accordance with the vesting schedule
over a period of four years beginning from the date of grant.
Annual Report & Accounts 2013 123
 The Board of Directors, at its meeting held in November 2010, approved the modification in the terms and conditions of the Stock
Option Plan and also decided to increase the reserved number of ordinary shares of JENV from 15,304,586 to 17,671,098 (face value
of EUR 0.01 each).

As a part of the modification, the exercise price of the option was reduced to GBP 0.696 (equivalent to USD 1.12) per share and the
vesting period was changed to start from 1 April 2010 onwards. Further, in the same Board meeting, the Company granted further
options for 4,225,680 shares and 667,843 shares to the employees with a vesting period commencing from 1 April 2010 and 15
October 2010 respectively.

During the year ended 31 March 2012, the Company has further granted options for 100,000 shares with a vesting period commencing
from 1 April 2011.

The Company has adopted the Black-Scholes Model to measure the fair value of the options by taking into account the terms and
conditions upon which the options were granted.

A. Charge to the Statement of Comprehensive Income towards equity-settled share-based payments and the
movement in stock options outstanding reserve is as given below.
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Balance at the beginning of the year 12,358 8,196
Add: Share-based payment expense/(reversal) for the year * (2,486) 4,162
Less: Transfer to retained earnings for vested share options forefeited during the year (3,806) -
Balance at the end of the year 6,066 12,358
*Expense/(reversal) for the year includes USD 2,486 thousand (31 March 2012: USD 4,140 thousand) recognized under
Share-based payment expense/(reversal) and USD Nil thousand (31 March 2012: USD 22 thousand) recognized as ‘Legal and
professional expenses’ under ‘general and administration expenses’.

Please Refer to Note 20 of the Consolidated Financial Statements for detailed disclosures.

9. Issued and paid-up share capital

The authorised share capital of the Company as at 31 March 2013 consists of 874,200,000 shares of EUR 0.01 each amounting
to USD 12,145 thousand equivalent to EUR 8,742 thousand (31 March 2012: USD 12,145 thousand equivalent to EUR 8,742
thousand).

Reconciliation between Group equity and Company equity.

Particulars For the year ended For the year ended

31 March 2013 31 March 2012
USD USD
Group equity (12,436) 2,198
Attributable to subsidiaries (91,226) (86,799)
Shareholders' equity 78,790 88,997
Group result (12,148) (19,468)
Loss attributable to subsidiaries (4,427) (7,809)
Net result (7,721) (11,659)
Stock options outstanding reserve
The stock options outstanding reserve comprises of the amounts recognised in respect of the equity-settled share-based payments
to certain employees and others providing similar services. The amounts in respect of share options exercised / forfeited / expired are
transferred from the stock options outstanding reserve to retained earnings (refer to Note 20 of the Consolidated Financial Statements).

124 Jubilant Energy NV

10 Share-based payment expense/(reversal)
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Employee Stock Options (2,486) 4,140
Total (2,486) 4,140

Overview
11 General and administrative expenses
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Advertisement expenses - (15)
Travelling and conveyance 14 40
Legal and professional expenses 639 910

Business Review
Rates and taxes 29 38
Audit fees 269 295
Director's fees 130 122
Insurance expenses 24 20
Miscellaneous expenses 16 3
Total 1,121 1,413

12 Finance income and expense

(In thousands of US dollars) For the year ended For the year ended

Governance
31 March 2013 31 March 2012
Interest income 422 407
Finance income 422 407
Interest expense 9,551 6,512
Bank charges and guarantee commission 505 247
Amortisation of debt transaction cost 52 31
Foreign exchange loss (8) 31
Finance expenses 10,100 6,821
Total finance income/(expense) (9,678) (6,414)

Financials
13 Income tax expense
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Current tax - -
Total income tax recognised in Statement of Comprehensive Income - -

14 Earnings per share

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Loss
Loss attributable to equity shareholders (7,721) (11,659)
Common Stock
Weighted average number of equity shares outstanding used in computing basic EPS 416,306,787 416,306,787
Basic EPS (0.02) (0.03)
Diluted EPS # Not Applicable Not Applicable

The Company has issued options to its employees (please refer to Note 20 of the Consolidated Financial Statements) during the
year. Since the Company does not have profits for the current year, the options issued are considered to have an anti-dilutive effect,
therefore the basic and diluted EPS are the same.

Annual Report & Accounts 2013 125

 15. Related parties
(a) Related parties and nature of relationships where control exists
Relationship Name of related parties
Ultimate holding company Jubilant Enpro Private Limited
Holding company Jubilant Energy Holding BV

(b) Related parties and nature of relationships where transactions have taken place during the year
Relationship Name of related parties
Subsidiaries 1) Jubilant Energy Limited
2) Jubilant Oil & Gas India Limited
3) Jubilant Energy International BV
Key management personnel 1) Shyam S Bhartia (Promoter and Director)
2) Hari S Bhartia (Promoter and Director)
3) Sir Robert Paul Reid
4) Arun Kumar Duggal
5) Dr. Andrew William Wood
6) Shahzaad S.Dalal
7) Radhey Shyam Sharma (appointed w.e.f. 21 March 2013)
8) Ajay Khandelwal (resigned w.e.f. 7 February 2013)

(c) Related-party transactions

Particulars Ultimate Holding Subsidiaries Key
holding company management
company personnel
(In thousands of US dollars) For the year ended 31 March
2013 2012 2013 2012 2013 2012 2013 2012
(i) Transactions
Loans taken - - 6,000 - - - - -
Loans/advances given - - - - 320 2,434 - -
Investments made - - - - 6,000 30,000
Interest expense on inter- corporate - - 16 - - - - -
deposits
Interest received - - - - 422 406 - -
Expenses incurred on their behalf by - - - - 190 73 - -
the Company
Expenses incurred on behalf of the - - - - - - - -
Company
Guarantee Commission 499 240 - - - - - -
Director’s fees - - - - - - 130 122

(ii) Balances outstanding As at 31 March

2013 2012 2013 2012 2013 2012 2013 2012
Trade and other receivables (loans - - - - 16,569 15,637 - -
and advances recoverable)
Loans and borrowings (unsecured - - 6,016 - - - - -
inter-corporate deposits)
Trade and other payables (sundry 509 240 332 433 2 2 29 30
creditors)

16. Financial risk management

The Company’s activities expose it to a variety of financial risks that arise as a result of its exploration, development, production and
financing activities. These are the following:
a) Credit risk
b) Liquidity risk
c) Market risk
d) Currency risk

126 Jubilant Energy NV

 Risk management framework
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives; policies; and
processes for measuring and managing such risks, and the Company’s management of capital. Further, quantitative disclosures are
included through the Consolidated Financial Statements, wherever considered appropriate.

The Board of Directors oversees management’s establishment and execution of the Company’s risk management framework.

Overview
Management is in the process of implementing risk management policies. The Company’s risk management policies are being
established to identify and analyse the risks faced by the Company, to set appropriate risk controls, and to monitor risks and
adherence to market conditions and the Company’s activities.

a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its

Business Review
contractual obligation and arises principally from the Company’s receivables.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of a customer. The entire revenue (from
sale of crude oil) of the Company is generated from a customer (Government of India-owned Company) which is located in India.

Receivables from that oil customer are normally collected within 30 - 35 days from the date of invoice. The invoices are generated at
the last date of the month for all deliveries during the month.

Governance
The Company does not anticipate any default as it transacts with entities owned by the Government of India and historically has not
experienced any collection issues with its customer. Further, the management does not expect any losses from non-performance by
the customer.

The Company limits its exposure to credit risk by only investing in liquid securities and with counterparties that have a credit rating
of at least AA. Given these credit ratings, management does not expect any counterparty to fail to meet its obligations.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the

Financials
reporting date was:

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Loans and receivables
Trade and other receivables (current) 5,008 4,154
Trade and other receivables (Non-current) 12,073 11,581
Cash and cash equivalents (currrent) 6,217 14,502

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Ageing analysis
Trade receivables, net Not past due Not past due

Historically, the Company has not faced any default from any of its counterparties and hence believes that no impairment allowance
is necessary in respect of trade and other receivables.

b) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its obligations when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company ensures that it has sufficient cash available to meet expected operational expenses on a regular basis. To achieve this
objective, the Company prepares annual capital expenditure budgets, which are regularly monitored and updated as considered
necessary. Further, the Company utilises authorisation of expenditures on both operated and non-operated projects to further manage
capital expenditure.

Annual Report & Accounts 2013 127

 The contractual maturity profiles of the Company’s obligations are as follows:

As at 31 March 2013
(In thousands of US dollars) Transaction Carrying Contractual Less than 1 Between Over 5 Total
currency amount maturities* year 1 and 5 years
years
Non-derivative financial
liabilities
Loans and borrowings
Secured foreign currency term USD 89,811 104,256 45,731 58,525 - 104,256
loan
Unsecured inter-corporate USD 6,016 6,607 207 6,400 - 6,607
deposits
Trade and other payables USD 1,451 1,451 1,451 - - 1,451
Total 97,278 112,314 47,389 64,925 - 112,314

*Represents undiscounted cash flows of interest and principal.

As at 31 March 2012
(In thousands of US dollars) Transaction Carrying Contractual Less than 1 Between Over 5 Total
currency amount maturities* year 1 and 5 years
years
Non-derivative financial
liabilities
Loans and borrowings
Secured foreign currency term USD 86,823 110,910 5,938 92,066 12,906 110,910
loan
Trade and other payables USD 1,184 1,184 1,184 - - 1,184
Total 88,007 112,094 7,122 92,066 12,906 112,094

c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Company’s income or the value of its financial instruments. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the return.

The Company is exposed to interest rate risk that arises mainly from debt. The Company is exposed to interest rate risk because the
fair value of fixed rate borrowings and the cash flows associated with floating rate borrowings fluctuate with changes in interest
rates.

The Company is also exposed to foreign currency risk on certain transactions that are denominated in a currency other than the
Company’s functional currency, that expose the Company to exchange rate fluctuations. The risk is that the functional currency value
of cash flows will vary as a result of movements in exchange rates.

d) Currency risk
The Company is exposed to currency risk on borrowings that are denominated in a currency other than the respective functional
currencies of the Company. The currency in which these transactions primarily are denominated is the US dollar.

Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying operations of the
Company, primarily US dollars. As such, the Company does not enter into any foreign currency derivatives.

The Company’s exposure to foreign currency risk was based on the following EUR, GBP and INR amounts as at the reporting dates
(in equivalent US dollars):
(In thousands of US dollars) As at 31 March 2013
Financial assets
Cash and cash equivalents 24
Financial liabilities
Trade and other payables (891)
(867)

128 Jubilant Energy NV

 (In thousands of US dollars) As at 31 March 2012
Financial assets
Cash and cash equivalents 80
Financial liabilities
Trade and other payables (900)
Net exposure (820)

Overview
The following exchange rates against USD 1 were applied to the currency which is generally used by Company:

Average rate for the year Reporting date spot rate

ended 31 March as at 31 March
2013 2012 2013 2012

Business Review
EUR 0.78 0.73 0.78 0.75
GBP 0.63 0.63 0.66 0.63
INR 54.39 48.25 54.36 51.97

Sensitivity analysis
A strengthening of the EUR, GBP and INR, as indicated below, against the US dollar as at 31 March 2013 would have increased/
(decreased) profit or loss by the amounts shown below (without considering consequential impact). This analysis is based on foreign
currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The
analysis assumes all other variables remain constant.

Governance
(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
EUR (10 percent strengthening) 57 71
GBP (10 percent strengthening) 23 24
INR (10 percent strengthening) 12 3

i) Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates.

Financials
The Company adopts a policy of ensuring that between 40 and 50 percent of its exposure to changes in interest rates on borrowings
is on a fixed rate basis.

The interest rate profile of the Company’s interest-bearing financial instruments was:

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Variable rate instruments
Secured foreign currency term loan 89,811 86,823
Net 89,811 86,823

Fair value sensitivity analysis for fixed rate instruments and derivative financial instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through the statement of comprehensive
income. Therefore, changes in interest rate at reporting date will not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 bps in interest rates as at the reporting dates would have increased/(decreased) profit or loss and equity by the
amounts shown below:

As at 31 March 2013 Impact on profit or loss

(In thousands of US dollars) 100 bps increase 100 bps decrease
Secured foreign currency term loan (898) 898

As at 31 March 2012 Impact on profit or loss

(In thousands of US dollars) 100 bps increase 100 bps decrease
Secured foreign currency term loan (853) 853

Annual Report & Accounts 2013 129

 ii) Fair values
Fair values versus carrying amounts
All financial assets and liabilities are carried at amortised cost. The fair value of the Company’s financial assets and financial liabilities
significantly approximates their carrying amounts.

Capital management
The objective of the Company’s capital management structure is to ensure that there remains sufficient liquidity within the Company
to carry out the committed work programme requirements. The Company monitors the long-term cash flow requirements of its
businesses in order to assess the requirement for changes to the capital structure to meet that objective and to maintain flexibility.
The Company manages its capital structure and makes adjustments to it in the light of changes in the economic conditions.

Company’s capital and net debt made up as follows:

(In thousands of US dollars) As at As at

31 March 2013 31 March 2012
Total liabilities 97,278 88,007
Less: Cash and cash equivalents (6,218) (14,502)
Net Funds 91,060 73,505
Total equity 78,790 88,997
Gearing ratio 1.16 0.83
17. Fees of the Auditor
With reference to section 2:382 a(1) and (2) of the Netherlands Civil Code, the following fees for the financial year have been charged
by KPMG Accountants N.V. to the Company, its subsidiaries and other consolidated entities:

(In thousands of US dollars) For the year ended For the year ended
31 March 2013 31 March 2012
Statutory audit of annual accounts 160 167
Other assurance services 109 128
Total 269 295
18. Directors
The Company has 7 directors (2012: 7). Fees paid to the directors in that capacity during the year amount to USD 130 thousand
(2012: USD 122 thousand). Besides, the Company has also granted stock options to one of the directors under the Company’s Stock
Options Plan, fair value of which as at 31 March 2013 is USD Nil thousand (31 March 2012: USD 1,202 thousand).
There is no Supervisory Board.

19. Off-balance sheet commitments

There are no off-balance sheet commitments for the Company as at 31 March 2013.

20. Employees
The Company has no employees (2012: nil) and hence incurred no wages, related social security or pension charges during the year,
nor during the previous year.

21. Subsequent events

An event occurring after the balance sheet date of this annual report is as follows:

Subsequent to year-end, in respect of T-47/P permit in Australia, the National Offshore Petroleum Titles Administrator has given its
consent to the title holders to the Block to enter into a Good Standing Agreement (“GSA”) before 31 May 2013 in relation to the
unfinished 3rd year work program. The Group has decided not to enter into a Goods Standing Agreement with National Offshore
Petroleum Titles Administrator. This has no financial implication.

22. Date of issue and signature of financial statements

The financial statements were approved for presentation to the shareholders by Managing Directors on 26 June 2013.

Managing Directors:
Shyam Sunder Bhartia Robert Paul Reid
Hari Shanker Bhartia Arun Kumar Duggal
Radhey Shyam Sharma Andrew William Wood
Shahzaad Siraj Dalal

130 Jubilant Energy NV

 Other Information

Auditor’s report

Overview
The auditor’s report is set out on page 60 of this Annual Report.

Appropriation of result
According to the Articles of Association of the Company:

Dividends can only be declared with due observation of the Company’s Articles of Association and to the extent that the Company’s capital
exceeds the paid-up and called-up capital, increased by the reserves that must be maintained in accordance with the law or its Articles of

Business Review
Association.

Proposed appropriation of result

The Directors propose to add the loss for the year to the retained earnings.

Governance
Financials

Annual Report & Accounts 2013 131

 Glossary

AoFP Absolute open Flow Potential LNG Liquefied Natural Gas

APM Administered Price Mechanism MC Management Committee
API American Petroleum Institute MD Measured Depth
Bbl Barrel MMBbl Millions of barrels
Bcf Billion cubic feet mmboe Million barrels of oil equivalent
boe Barrels of oil equivalent Mmbtu Millions of British Thermal Units
bopd Barrels oil per day MMscmd Million Standard Cubic Metre
bscfd Billion Standard Cubic feet per per day
day MMtpa Million Metric tonne per annum
CAGR Compound Annual Growth Rate MoPNG Ministry of Petroleum and
CERC Central Electricity Regulatory Natural Gas
Commission MPD Managed Pressure Drilling
CGD City Gas Distribution Mscf Metric Standard Cubic feet
CGU Cash Generating Unit MWP Minimum Work Programme
CNG Compressed Natural Gas NELP New Exploration Licensing
CPR Competent Person’s Report Policy
DDE Deen Dayal East OALP Open Acreage Licensing Policy
DDW Deen Dayal West OGT Onshore Gas Terminal
DGH Directorate General of PI Participating Interest
Hydrocarbons PLQP Pipeline Living Quarters
DOC Declaration of Commerciality Platform
DST Drill Stem Test PML Petroleum Mining Licence
EIA Energy Information PNGRB Petroleum & Natural Gas
Administration Regulatory Board
E&P Exploration & Production PPP Purchasing Power Parity
EXIM Export-Import Bank of India PSC Production Sharing Contract
FDI Foreign Direct Investment RBI Reserve Bank of India
FDP Field Development Plan SEBI Securities and Exchange Board
of India
FTG Full Tensor Gradiometry
TCF Trillion Cubic feet
GCA Gaffney, Cline & Associates
(Consultants) Pte Ltd. TVD True Vertical Depth
GCoS Geological Chance of Success TVDss True Vertical Depth Subsea
GDP Gross Domestic Product WEO World Economic Outlook
GoI Government of India WHP Well Head Platform
GSPCL/GSPC Gujarat State Petroleum WI Working Interest
Corporation Limited
GSPL Gujarat State Petronet Limited
GTG Gas Turbine Generator
HVJ Pipeline Hazira-Vijaipur-
Jagdishpur Pipeline
IMF International Monetary Fund
JCC Japan Crude Oil Cocktail
LDO Light Diesel Oil
Lkm Line kilometers

132 Jubilant Energy NV

 Company Information

Registered Office Nominated Adviser and Broker

Orlyplein 10, Floor 24 Panmure Gordon (UK) Limited
1043 DP Amsterdam One New Change
The Netherlands London
EC4M 9AF
Corporate Office United Kingdom
A–80, Sector–2
Noida – 201 301 Auditors
India KPMG Accountants N.V.
Laan van Langerhuize 1
Website 1186 DS Amstelveen
www.jubilantenergy.com The Netherlands

Company Secretary Financial Public Relations Consultants

Sandeep Budhiraja College Hill Associates Limited
Royal Mint Court
London EC3N 4QN
United Kingdom

Depository
Capita IRG Trustees Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom

Annual Report & Accounts 2013 133

 Jubilant Energy NV
Orlyplein 10, Floor 24, 1043 DP Amsterdam
The Netherlands