Nava Management Discussions

The objective of this report is to convey with the Companys shareholders about the Managements perspective on the external environment affecting the businesses of the Company, as well as strategy, operating and financial performance, material developments, risks and opportunities and internal control systems and their adequacy. These discussions and analysis shall be read in conjunction with the

Companys standalone and consolidated financial statements (financial statements), the Directors report and other information included elsewhere in the Annual Report.

Global Economic Outlook:

The global economy is currently confronting intensified challenges and strains in the near term, characterized by unfavorable developments of elevated inflation, a sluggish recovery from the COVID-19 pandemic, reduced investments and ongoing geopolitical conflicts.

These factors continue to take a toll on the global economy, hindering its progress. The unresolved war between Russia and Ukraine, coupled with rapid spread of COVID-19 variants in China in 2022, has disrupted global supply chains, raw materials, and crude oil. The sanctions on Russia, which supplies around 10% of the worlds energy, lead to dampening growth and further straining of supply chain. Consequently, the global economic outlook for the near term, especially for 2023, appears discouraging.

The International Monetary Fund (IMF)s World Economic Outlook report published in April 2023 forecasts the world economy to grow by less than 3 percent in 2023 before settling at ~3.0% in 2024. Emerging economies, particularly in Asia, are expected to be the driving force behind global growth in 2023, benefiting from ongoing reopening efforts and comparatively less intense inflationary pressures. IMF anticipates 2023 will feel like a recession for millions around the world.

While economic weakness is evident in Europe, the United States, and Latin America to some extent, Asian economies are anticipated to lead global growth in 2023. These economies are leveraging ongoing reopening dynamics and experiencing relatively milder inflationary pressures.

The factors that drove inflation in 2022 are reversing in some parts of the world. Global inflation is expected to fall from 8.7% in 2022 to 7.0% in 2023 on the back of lower commodity prices, declining energy prices.

Inflation has already peaked in the US and Europe in early 2023. It is also declining in other major economies including Japan, China and India. In summary, the global economic outlook calls for navigating through challenges and overcoming weak growth prospects. Addressing high inflation and resolving ongoing conflicts are crucial to restore stability and foster sustainable economic recovery. While emerging economies, particularly in Asia, present bright spots for global growth, concerted efforts and strategic measures are needed to navigate these turbulent times successfully.

Indian Economy:

The International Monetary Fund (IMF), acknowledges Indias resilience and its recent projections indicate an expected growth rate of 5.9% for FY 2023-24, a tad lower than the 2022 growth of 6.8% due to subdued external demand and tightening monetary policy. However, India will stand out as a bright spot and remain fastest growing major economy. Oil prices are expected to remain rangebound in 2023, given the continuing war in Ukraine, sanctions on Russian oil, production cuts by OPEC countries. India meets majority of its oil needs through imports and high oil prices will have negative effect on the prices paid by the consumers. Persistent inflation may push

Reserve Bank of India to further tighten the liquidity impacting the GDP growth. Increased capital investment outlay by 33.4% to 10 Lakh Crore for FY 2023-24 by the Central Govt, focus on transport infrastructure projects, power sector reforms tied to fiscal deficit of States announced in budget 2023-24 are expected to aid Indias overall growth potential. Overall, the key steel consuming sectors are expected to perform well in FY 2023-24 supported by a rise in infrastructure spend by the Government, gradually improving semiconductor supplies, capex commitments by the private sector.


Ferro Alloys:

The global market for ferro alloys, which reached $155 billion in 2020 amidst the COVID-19 pandemic, is forecasted to expand to $187.14 billion by 2026, reflecting a compound annual growth rate (CAGR) of

6.1% according to the Expert Market Research Group. The primary catalyst for this positive growth is the increasing demand for steel, particularly from rapidly developing industry sectors such as construction, automotive, and shipbuilding.

Factors such as population growth, increased demand for housing and infrastructure, particularly in Asian countries, urbanisation and increased living standards, are driving the demand for steel industry which in turn increases the consumption of Ferro Alloys. Free Trade Agreements being executed by India with other countries like Australia help producers import the raw materials at reduced or nil customs duty thus resulting in lower costs to some extent.

However, the ongoing Russia-Ukraine conflict has impacted the industry by disrupting the supply chain of reductants and reducing the demand for iron and steel products in the developed countries. The stringent environmental regulations, carbon neutrality targets and industry standards imposed by regulatory bodies on the iron and steel manufacturing industries may impede the expected high growth unless large investments happen towards green steel solutions. The Indian ferro alloys market has been steadily expanding and is around 12 Million MT, with the demand for silico manganese outstripping ferro manganese. Ferro alloys consumption in India decreased by 6.9% during FY 2022, compared to FY 2021 owing to reduced steel production.

The major challenges confronting the ferro alloys sector are:

Increase in energy prices, volatility in the reductant prices have made the power-intensive ferro alloys producers become uncompetitive. The energy prices are being increased by State utilities y-o-y in recent years and in case of the producers with captive thermal generation, the coal costs were on the rise causing upward pressure on the cost of production. Lower availability of Manganese ore from the domestic market and higher dependence on import materials which are subjected to supply-chain distributions are the persistent challenges for the industry. Further a few countries are resorting to imposing anti-dumping duties on the exports made to these countries which make the Indian producers vulnerable to these risks.

Power Sector:

Despite the global energy crisis triggered by Russias invasion of Ukraine, the worlds electricity demand remained resilient in 2022, exhibiting nearly 2% growth. This growth outpaced the average growth rate of 2.4% witnessed between 2015 and 2019. The increasing electrification of the transport and heating sectors worldwide, coupled with record-breaking sales of electric vehicles and heat pumps in 2022, contributed to this growth.

Renewables are expected to play an increasingly prominent role in the global power generation mix, with the share of renewables forecasted to rise from 29% presently to 35% by 2025. Consequently, the shares of coal and gas-fired generation are expected to decline.

These shifts in the generation mix will result in a plateauing of emissions from global power generation by 2025, accompanied by a further decline in its CO2 intensity in the years to come.

In India, the power demand being closely associated with GDP, also followed the growth path rising by ~10% (132 BUs) in FY2022-23. The revival of economic activities coupled with an intense heat wave witnessed during summer of 2022, led to a sudden surge in power demand with peak demand touching record high of 216 GW in the month of April 2022, and supply was stressed with this sharp rise in demand owing to shortage of coal supplies and non-availability of rakes among other challenges. This resulted in significant energy crisis and electricity prices shooting to 20/ unit prompting CERCs intervention to reduce the ceiling prices from 20/ unit to 12/unit to protect consumer interests. Parallelly, the government initiated immediate measures to avert this crisis by increasing the availability of rakes and directed all State Gencos to import at least 10% of their requirement of coal for blending purpose to address issues of domestic coal supply shortages. The government announced plans to set up 29 Pumped Storage Hydropower (PSH) projects with a total capacity of 33,240 MW in a phased manner to meet the growing demand for power during peak hours. The power crisis that brought to the fore the dependency on thermal power, saw renewed interest of players in thermal assets. Several PSUs and private players acquired stressed thermal assets under Insolvency and Bankruptcy Code (IBC) Law. In addition, all plants using imported coal were asked to run at full capacity under the emergency directions of the government under Section 11 of the Electricity Act, 2003.

The push for renewables continued in line with the governments target of achieving 500 GW of installed capacity from non-fossil sources by 2030. The government released new renewable purchase obligation (RPO) targets by creating an exclusive category of wind energy to boost the segment and also released the guidelines for the second tranche of PLI scheme for solar manufacturing.

The capacity additions in FY 2022 were primarily focused on the renewables segment, led by solar energy.

Although coal-based capacities continue to dominate, their share has steadily declined over the past decade, falling from 56% in FY 2012 to approximately 52% in FY 2022.

The implementation of Late Payment Surcharge and Related Matters Rules, 2022 led to bringing discipline in payment arrangements with the ability of the generation companies to regulate power supply to distribution companies in case they default on their monthly payments. India has set an overall target, including renewables, of generating 1750 billion units (BU) of electricity for the financial year 2023-24, representing a 7.2% increase over the actual generation of 1624.16 BU in the preceding year of 2022-23. This target reflects a growth of 8.9% compared to the year 2021-22.

The forecasts of a strong ‘El Nino and followed by a La Nina by the World Meteorological Organisation (WMO) will see disruptions in the heat waves, monsoon and finally cold wave. All these factors can have an influence over the energy demand-supply and price situation. Regulatory and policy reforms in the sector are critical to help avert the issues surrounding the power value chain alongside creating an enabling environment for increased investments in the sector. Some of the key announcements during the year included:

• Promulgation of Late Payment Surcharge (LPSC) Rules

• Green Open Access Rules

• Push for energy storage systems

• Invocation of Section 11 of the Electricity Act 2013 asking all imported coal-based power plants to operate at full capacity

• Uniform Renewable Energy tariff from common pool for supply to end consumers

• Multiple modes of utilisation of energy storage

• Automatic recovery of fuel and power purchase cost through Fuel and Power Purchase Adjustment Surcharge

• Consumption by a subsidiary of a Company which is an existing captive user also admissible as captive consumption by the captive user

• Energy conservation – mandatory use of non-fossil sources, including Green Hydrogen, Green Ammonia, Biomass and Ethanol for energy and feedstock

Company Overview

Nava Limited (NAVA - formerly Nava Bharat Ventures

Limited) has diversified businesses in Metals, Energy,

Mining Resources, Agri-business and Emerging Businesses. It operates in geographies of India, South-East Asia and Africa. The Company is a leading manufacturer and exporter of Manganese Alloys and has installed capacities of 125,000 TPA & 50,000 TPA, in Telangana and Odisha States respectively. NAVA leverages captive power and long-term tie-up for Manganese Ore in the business.

Nava has energy generation capacity of 434 MW in India including that of 150 MW under subsidiary Nava Bharat Energy India Limited (NBEIL) and 300 MW capacity in Zambia under step-down subsidiary Maamba Collieries Limited (MCL). MCL also has the business of coal mining with coal sales to external industrial consumers. In recent years, NAVA has made investment in healthcare enabled services based in Southeast Asia and in Agri-business development of Avocado plantation on large scale in Zambia. The Companys standalone operations during FY

23 reported a dip in both turnover and profitability because of lower sales volume of Manganese Alloys and sudden fall in realisations owing to imposition of export duty on steel products and contracted demand with

Russia Ukraine conflict, persistent inflation. The division has witnessed a remarkable improvement with increased operating levels of 150 MW energy plant at Odisha works coupled with higher tariff realisations. The Company reported decline in EBITDA YoY by 28.1% due to lower realisations, and for FY 2023, EBITDA margins stood at 26.4% versus 34.7% in FY 2022. The

Profit After Tax from continuing operations de-grew by 14.3% YoY for FY 2023. Consolidated Total Revenue reported an increase of 7.8% YoY for FY 2023, backed by exceptional performance of MCLs power plant in Zambia.

Metals Division:

Ferro Alloys division saw a dip in revenue by 16.8% because of lower sales volumes. The quantitative details of the segment are:


Production MT Sales MT
2021-22 1,66,148 1,70,648
2022-23 1,47,257 1,31,935

Silico Manganese: Sales volume declined because of subdued export demand for both Steel and Ferro Alloys owing to geopolitical conflicts and monetary tightening.

Domestic demand for Ferro Alloys has helped in pushing the sales although at lower margins. Substantial increase in reductants cost which constitute 15% of the

Energy Business – India

Nava Limited (Standalone) NBEIL (Subsidiary)


Paloncha, Telangana Kharagprasad, Odisha Dharmavaram, Andhra Pradesh Paloncha, Telangana
Capacity 114 MW 150 MW 20 MW 150 MW
(1 x 50 MW, 2 X 32 MW) (1 x 30 MW, 2 X 60 MW) (1 x 20 MW) (not operational) (1 x 150 MW)
Plant Type CPP CPP - 90 MW IPP IPP
IPP - 60 MW
Fuel Coal Coal Coal & Bagasse Coal
Source Mix Linkage Linkage & E-Auction E-Auction E-Auction

production costs have further strained the margins in the low demand market. The recent drop in Manganese ore costs and stabilised sale prices provide a positive outlook for the Manganese Alloys market in the near future. Ferro Chrome: Ferro Chrome Alloys production stopped in Oct 2022 with the mutual closure of conversion agreement between Tata Steel Mining Limited and NAVA. The Company produced 34,893 MT of Chrome Alloys against 65,981 MT during FY2022.

Energy Division:

The Standalone Energy division reported Revenue of

78,121 Lakhs which is 16.6% higher compared to FY

2022, while the consolidated energy division revenue was 266,750 Lakhs, higher by 19.8% Vs FY 2022. The standalone operations received a fillip with the operations of 60 MW IPP in Odisha for full year and realisation of higher tariffs over the power exchanges.

This 60 MW IPP has contributed significantly to the revenue and profit growth of the Standalone Energy business. Competitive marginal cost in Odisha helped the Company improve upon merchant power sales opportunistically. Higher coal costs from Singareni Collieries Company Limited (SCCL) and lower coal supplies have resulted in low level of operations of 114 MW CPP in Telangana. Further Telangana State Governments reluctance in granting open access permission for selling over the power exchanges has resulted in lower external sales from this plant. The 150 MW independent power plant of NBEIL in Telangana was operational for over six months during the year. The plant was under major overhaul shutdown during the year and hence the plant availability and generation were lower during the year. Coal supplies from SCCL have dried up during the year because of no coal linkage and the plant is sourcing coal from

Mahanadi Coalfields Limited, Odisha under Shakti-B III scheme incurring high transportation costs and efforts. Further Telangana State Governments reluctance in granting open access permission for selling over the power exchanges is hindering the operational parameters of this plant. NBEIL reported a marginal positive PBT during the year.

Maamba Collieries Limited (MCL), Zambia – Energy and Natural Resources:

Maamba Collieries Limited (MCL) operates Zambias only integrated coal-fired power plant with an installed capacity of 300 MW, which represents about 9% of the countrys total installed energy generation capacity. MCL has a long-term 20-year Power Purchase Agreement (PPA) for capacity of 187.22 MW (at 100% availability) with the state utility, ZESCO, backed by a Sovereign Guarantee. MCL is free to sell the balance power to any third party consumer or over Southern Africa Power Pool (SAAP) with becoming its member. Following major overhauls of both units in FY22, the power plant operated with increased operational parameters of plant availability of 92.0% compared to 66.5% during last financial year. This outstanding performance has boosted the Consolidated financial performance of the Company.

MCL and ZESCO have agreed on a new tariff and offtake mechanism for the power supplies since May 2022 by which MCL is receiving 100% of the invoice amounts improving the cashflow position significantly and halting the addition to the receivables. MCLs merchant coal sales were 360,407 MT during the year, a decrease by 28.2% compared with coal sales of 501,976 MT in FY 2022. Coal sales were under strain during the year owing to increased competition from the new coal mines opened in nearby area. While the coal prices in Zambia cannot be compared to international index prices as Zambia is landlocked and far away from a seaport, average realization decreased by 2.4% per MT against that of FY 2022.

Under the Arbitration initiated by MCL and its lenders against ZESCO, both the Parties have agreed to and got a Consent Award from the Arbitration Tribunal, London for US$ 518.1 Million in Dec 2022 after giving a discount of US$ 60.0 Million to ZESCO. ZESCO has submitted its revised payment plan of clearing US$ 338.1 Million by Dec 2023 and the balance US$ 180.0 Million by Dec

2024 and it has been effecting payments against the award adhering to its payment plan. During the year

MCL received US$ 105.0 Million including VAT liability of US$ 70.5 Million against the Arbitration Award which was utilised for repaying the overdue debt instalments. MCL repaid US$ 98.4 Million to its lenders during the year bringing down the loan to US$ 314.4 Million from US$ 412.8 Million as in March 2022. With the improved cashflow position and ZESCO adhering to its payment plan under Arbitration Award, MCL has dropped the debt restructuring proposal initiated with the lenders.

Further since April 2023, MCL received US$ 16.0 Million bringing the down the receivable under Arbitration to US$ 397.1 Million and repaid US$ 48.9 Million to its lenders with which the loan outstanding stands at US$ 265.5 Million. Since Dec 2022, MCL repaid US$ 147.5 Million to its lenders and discharged VAT liability of US$ 70.5 Million which shall aid the profitability and cashflows.

Most of the debt on the consolidated front is associated with MCLs operations in Zambia, and it has no recourse to the parent company or its other subsidiaries.

Healthcare Enabled Services:

Globally Healthcare is one of the fastest growing sectors, especially since the COVID pandemic. The demand for lifestyle treatments and diagnostic services is growing exponentially. The healthcare sector is seen as extremely promising in the long run, with notable traction observed as the pandemic winds down, especially in Southeast Asia. The Companys investments in this division are through a Singapore Joint Venture Company – Tiash Pte. Ltd., with a 65% stake. The operating revenue of the healthcare division grew by 81.7% compared to the previous year. With the traction in the sales of iron deficiency drug, the Company is looking to expand the distribution portfolio and the business to other Southeast Asian Countries.


Kawambwa Sugar Limited (KSL), has taken-up Avocado plantation in 1100 Ha of land with a capital outlay of US$ 40 Million to be invested over 4 years. Avocado being considered "Superfood" for its high nutrition value has growing demand from the developed countries and demand is picking-up with increase in per capita income levels of the developing countries. Furthermore, there is a forecasted shortage of supply in avocado production globally, as many countries face water scarcity and avocados require significant water resources. KSLs land has plentiful water resources with two rivers surrounding the location and climate, soil well suited for Avocado plantation.

Operations and Maintenance Services:

The Companys foray into Operations & Maintenance (O&M) services for power plants took its genesis with the service offering to MCL. These services have been delivered in accordance with the O&M Contract, which underwent thorough scrutiny by the lenders and the other shareholders in Zambia. The NAVA Group Companies have implemented a risk matrix approach, considering both on-site and off-site deliverables under the contract. This has helped MCL maintain optimal performance for its 300 MW power plant, taking into account local grid conditions and other limitations.

Building upon its experience of operating medium-sized power plants in India, coupled with its O&M expertise in Zambia, the company plans to explore additional business opportunities in the O&M space in Africa and the Middle East. The aim is to leverage its knowledge and track record to pursue similar projects and partnerships in other regions.

Manganese Ore Mining

The Companys 100% subsidiary, Nava Resources CI has secured exploration rights for manganese ore concession in Ivory Coast, West Africa. The company is currently in the exploration phase, evaluating the results and conducting a full assessment of the reserves before exploitation. This business enables backward integration to Silico Manganese production in India and provides further value-add opportunities. The details of reserves of Manganese ore and its specifications, investment outlay for exploitation will be known from the technical reports being compiled.



Deteriorating global macroeconomic conditions are expected to persist into early 2023, representing a downside risk to the metals and mining sector as many commodity prices slide. Producers will be impacted by narrowing margins with muted demand however, conditions are anticipated to improve through later part of the year as inflation gets controlled. Further, geopolitical conflict of Russia Ukraine, recovery in

China are the big factors to decide the demand and prices. The domestic market for ferro alloys is expected to be quite stable given the uptick in demand for steel amid increased manufacturing activity for local consumption. Export market has slowed down amid recession fears in the developed countries and slow growth of exports from China. Cost of production of Manganese Alloys at Odisha works is on the higher side due to fixed costs and trial runs on suitable blend of reductants. The anticipated reduction in cost of production at Odisha works will help the Company in bettering the realisations. The working capital involved in the manganese alloys business is expected to be higher with the anticipated slower realizations.

Indian Energy Operations:

The Indian power plants have certain challenges. One is tariffs and the other is the coal availability and the cost of coal for power generation, which has increased significantly in recent past. The share of merchant sale of power in the spot market through power exchanges or under short-term PPAs will be higher compared to captive consumption although at lower realisations. The Company is banking on improved plant load factor of 150 MW power plant in Odisha where marginal costs are lower and offer higher margins.

In Telangana, the coal supplies have become tighter from SCCL amid higher costs, thereby reducing the ability to sell power during non-peak hours over the power exchanges. Furthermore, Telangana State Utilities are creating hurdles for selling power in the open market by denying the open access permissions and forcing the generators to approach the Courts for remedy. The Company is exploring the technical and commercial feasibility to wheel the power from Odisha works to Paloncha works on long-term basis to take advantage of marginal costs. This arrangement should boost the productivity of power division in Odisha.

NBEILs 150 MW power plant is operating at optimal parameters post the major overhaul shutdown done during FY 2023. The operations of this plant depend on tariffs in the spot market through power exchanges and having open access permission all times for exporting power. Off late, the coal supplies from Mahanadi

Coalfields are getting allocated at base prices without any premium thereby helping the plant to obtain marginal cost advantage and contribution.

Zambia Coal and Energy Operations:

MCL anticipates coal mining operations to better over the last year for supplying high-grade coal to industrial customers with the increased marketing efforts and pricing strategy.

This division should deliver strong financial performance supplementing the power division with improved cashflows. Year on year. MCL is adding new customers and exporting coal to neighbouring countries. The plant availability and PLF of 300 MW energy plant are envisaged to be higher with no major shutdowns other than required annual maintenance shutdowns.

The financial performance is projected to improve further with the reduction in long-term debt by

US$ 147.5 Million and realisation of 100% invoice amounts. With the promised further realisations from ZESCO under the Arbitration Award, MCL is hoping to have the distribution window opened for the Sponsors. The company has recently become a member of the

Southern African Power Pool, a significant development that affords MCL with alternative market for power through SAPP. In light of the energy crisis in the southern African region and MCL becoming a member of SAAP, ZESCO and the Government of Zambia have urged MCL to take up expansion of generating capacity to impart energy security in the country. MCL awaits certain critical supports from the concerned Ministries for the expansion project and for off-take arrangement.

Discontinued Operations

The Company pursued sale of most of the plant and equipment of the sugar plant. The Company is evaluating certain development options to monetize the land parcel in the Sugar division.

Risks and their Mitigations

The Company has a comprehensive and continuously improving risk management policy in-place, considering our industrys dynamics, emerging trends etc.

Risk Type

Risks Involved

Mitigation Strategy

Sector-specific and Market risks • Performance of Steel Industry on which Ferro Alloys is dependent • Close monitoring of macro-economic indicators and Steel Manufacturers
• Creditworthiness and business continuity of the customers Prolonged inflationary pressures • Sustained advocacy authorities Redistribution of sales mix at the geography/ segment level, to balance demand supply requirements

Risk Type

Risks Involved

Mitigation Strategy

Commercial risk • Non-compliance and renegotiations of prices • Credit risk assessment of private customers, advocacy for enforcement of payment security mechanism of Letter of credit
• Moderation of prices putting pressure on margins • Mitigation through prudent operations management, resource optimisation and prudent bidding practices
Financial risk • Availability of cost- effective capital: Availability of debt • Balance between growth and deleveraging Focus on driving operating efficiency and cash generation
• Forex risk
• Liquidation of idle assets • Hedging for commodity & exchange variation No financial commitments linked to liquidation of idle assets
Business risk • Availability of fuel for thermal plants at optimal cost • Exploration of alternate coal and Manganese ore resources
• Timely sourcing and availability of Manganese ore and reductants for Ferro Alloys • Striving for back-end integration for Ferro Alloys with Manganese ore mining
Community Risks • Growing expectations of the communities proximate to our operating locations • Commitment towards addressing societal challenges through Corporate Social Responsibility initiatives
• Pressure of local communities due to concerns over emissions • Multiple structured forums for dialogue with communities

Internal Control Systems and their Adequacy

Adopting stringent Internal Control Mechanisms is vitally important in a dynamic and competitive environment that witnesses frequently shifting paradigms. Our Internal Control Mechanisms seek to safeguard the organizations assets as well as authorize, record and report all transactions correctly and in a timely manner. They ensure that we not only conform to local statutory requirements but meet the highest global standards and practices as well.

Our carefully structured Internal Control Framework constantly monitors and assesses all aspects of risks associated with current activities and corporate profile, including scientific and development risks, partner interest risks, and commercial and financial risks. Our

Control Processes 1) safeguard the organizations assets, 2) prevent/detect frauds and errors, 3) ensure accurate and complete accounting, and 4) facilitate timely preparation of reliable financial information.

They see to it that manual and automated processes for transaction approval and recording are adequately and effectively reviewed. They also ensure compliance with various policies, practices and statutes in keeping with the organizations growth and business complexity. Our Internal Control Systems are reinforced by regular

Management Reviews and verification by Internal

Auditors. Further, all internal control functions and its entire gamut of activities are covered by independent audit whose findings are reviewed regularly by the

Audit Committee and Management of the Company. A Board-appointed Audit Committee is entrusted with the task of 1) reviewing the Internal Audit Plan, 2) verifying the adequacy of the Internal Control System, 3) marking its Audit Observations and 4) monitoring the sustainability of the remedial measures.

Operational Performance Indian Operations Ferro Alloys

Silico-manganese business saw a drop in sales volume during the year with the lower export demand coupled with decrease in realisations owing to macroeconomic conditions. The Company sold 97,042 MT during the year registering a decline by 7.3% over the previous year and average realisation per MT was lower by 3.3%. Operational revenue made from this division is 90,805 Lakhs.

Ferro-chrome conversion business has ceased in Oct 2022 with the mutual closure of the agreement with Tata Steel Mining Limited. In FY 2023, the conversion volume was 34,893 MT compared to 65,981 MT during FY 2022. Operational revenue from this division is 13,461 Lakhs.


NAVA standalone operations has three power plants with a total capacity of 284 MW, of which 204 MW are primarily used for captive consumption in ferro alloys. 60 MW IPP was operational for full year and 20 MW IPP remains idle owing to higher specific fuel consumption.

The captive power plants export surplus power over power exchanges or under bilateral contracts bringing in incremental revenue. The Companys subsidiary NBEIL operates a 150 MW merchant power unit in Telangana. With the severe heat waves during summer of 2022 and shortage of domestic coal, rail rakes etc; the tariffs surged to upper limits contributing to higher profits of the division. Captive power operations in Telangana works suffered owing to coal shortages from SCCL and Odisha works delivered consistent performance with healthy profitability owing to reduced marginal cost of coal. During the year captive power tariffs underwent change by linking to cost of generation. NBEILs 150 MW unit at Telangana was operational for six months and reported positive PBT for the year.

Standalone Energy Operations: The parent Companys operational power plants at Telangana and Odisha, having a combined capacity of 264 MW, continued to operate profitably and achieved an average PLF of 61.4% during the year. Standalone energy operations reported a Revenue of 78,121 Lakhs with an EBITDA of 15,692 Lakhs during the year (corresponding figures for FY 2022-23 were 66,971 Lakhs, 16,216 Lakhs) (before inter-segment eliminations).

Telangana: The 114 MW power plant at Paloncha had challenges in merchant sales owing to high coal costs and lower supplies of coal by SCCL. This plant could not maintain the momentum for captive consumption of Ferro Alloys owing to coal shortages and the unit had to wheel the power from Odisha works. Odisha: 60 MW IPP unit was operational for full year which boosted the operational performance and the profitability of this unit. Captive consumption by Ferro Alloys was lower during the year with the shutdown of furnaces for converting them to Silico Manganese production. Marginal cost being lower in Odisha has helped in achieving higher PLFs. Merchant sales quantity increased by 7.2% to 528.5 Million units compared to FY 2021-22.

NBEIL: With the major maintenance shutdown of the 150 MW unit and delays from Telangana utilities in granting open access permission, the plant suffered operations with a generation of 246.4 MUs at PLF of 18.7% and sold 209.6 MUs compared to 492.1 MUs, 37.4% and 427.5 MUs respectively for FY 2022. NBEIL reported operational Revenue of 19,303 Lakhs, EBITDA of 4,313 Lakhs. (The corresponding figures for FY 2021-22 were 24,011 Lakhs, 7,381 Lakhs).

International Operations

Maamba Collieries Ltd

NAVAs step-down subsidiary ‘Maamba Collieries Limited (MCL) is engaged in the businesses of Energy and Coal mining operations in Zambia. NAVA holds 65% equity stake in MCL through its wholly-owned subsidiary Nava Bharat (Singapore) Pte.Ltd., based in Singapore.

The operational revenue and EBITDA were 188,884 Lakhs (US$ 235.0 Million) and 145,894 Lakhs (US$ 181.5 Million) for FY 2022-23 respectively whereas, the net profit for the year was 83,974 Lakhs (US$ 104.5 Million). The corresponding figures for the last financial year were 157,491 Lakhs (US$ 209.3 Million), 85,404 Lakhs (US$ 113.5 Million) and 16,595 Lakhs (US$ 22.1 Million) respectively. MCL reported healthier financial performance with higher availability of power plant, forex gain and no charge of Estimated Credit Loss (ECL) provision during the year. Consent Award under Arbitration for the receivables from ZESCO and 100% invoice payments since May 2022 have brought in positive developments on cashflow position of MCL. The long-term debt of MCL reduced to US$ 314.4 Million as in March 2023 from US$ 412.8 Million as in March 2022. Further overdue instalments totalling US$ 48.9 Million were repaid to lenders since April 2023 bringing down the loan to US$ 265.5 Million. VAT liability of US$ 70.5 Million was discharged from MCL books as part of Arbitration settlement with ZESCO.

Energy Operations

Post major overhaul of the power plant, the operational parameters have improved and the plant availability touched 92.0% for FY 2022-23 with generation of 2,415 MUs against plant availability of 66.5% and generation of 1,735 MUs for FY 2021-22. The power plant reported operating revenue of 1,72,404 Lakhs (US$ 214.5 Million) and EBITDA of 135,377 Lakhs (US$ 168.4 Million). The profit made for the year is 79,667 Lakhs (US$ 99.1 Million). The corresponding figures for FY 2021-22 were 1,34,966 Lakhs (US$ 179.4 Million), EBITDA of 65,659 Lakhs (US$ 87.3 Million) and 9,383 Lakhs (US$ 12.5 Million).

The operational revenue, EBITDA and PAT were higher with the increased plant availability of 92.0%. Expected credit loss for the year was Nil (US$ Nil) against 32,225 Lakhs (US$ 42.8 Million) for FY 2022 and have forex gain of US$ 10.6 Million compared to exchange loss of US$ 7.9 Million for FY2022.

The Arbitrational Tribunal has issued consent award for US$ 518.1 Million payable by ZESCO to MCL after providing for agreed discount of US$ 60.0 Million.

MCL has got the consent award duly registered with the Zambian High Court for enforceability thereof in the event of default by ZESCO in complying with the payment terms of the said consent award.

Coal Mining Operations

Mining operations suffered competition from the newly opened coal mines and sales to outsiders decreased by 28.2% to 360,407 MT. However, internal coal sales to power plants have grown by 36.3% to 1,491,344 MT with the higher power plant operations. The coal division reported marginal decrease in revenue from 36,305 Lakhs (US$ 48.3 Million) to 35,938 Lakhs (US$ 44.7 Million) for FY 2022-23. EBITDA decreased by 52.0% from 19,744 Lakhs (US$ 26.2 Million) to 10,122 Lakhs (US$ 12.6 Million) majorly due to lower external sales and increased costs.

MCLs growth performance: Particulars

2022-23 2021-22 Growth %
In Lakhs In Lakhs
Average Availability (%) 92.0% 66.5% 2550 bps
Average PLF (%) 91.9% 66.0% 2590 bps
Power Generation (Million kWh) 2,415 1,735 39.2%
External coal sales (MT) 360,407 5,01,976 (28.2%)
Operational revenue 1,88,884 1,57,490 19.9%
(US$ 235.0 Million) (US$ 209.3 Million)
EBITDA 145,894 85,404 70.4%
(US$ 181.5 Million) (US$ 113.5 Million)
PAT 83,973 16,594 406.0%
(US$ 104.5 Million) (US$ 22.1 Million)

Our prudent efforts to manage costs, improved MCLs performance led to 29.2% growth in EBITDA from 152,234 Lakhs in FY 2021-22 to 196,759 Lakhs. EBITDA margins increased from 41.8% for FY 2021-22 to 50.1% with no expected credit loss provision recognised during the year. Net Profit saw significant jump by 113.1% during the year at 122,169 Lakhs against 57,328 Lakhs in FY 2021-22.

Balance Sheet

Shareholders Funds increased from 4,95,324 Lakhs as on March 31, 2022 to 6,02,543 Lakhs as of March 31,

2023 with the exceptional performance and ploughing of operational surplus into the business. Debt got reduced to

306,652 Lakhs as of March 31, 2023 compared to 357,968 Lakhs as of March 21, 2022, with the repayment of loans at Standalone and MCL. Net debt-to-equity ratio improved to 0.51x in FY 2022-23 from 0.72x in FY 2021-22.

Key Ratios (based on Standalone & Consolidated Financial Statements)

Standalone Consolidated


2022-23 2021-22 2022-23 2021-22
EBITDA Margin 26.39% 34.67% 50.09% 41.76%
PAT Margin 19.43% 21.74% 31.10% 15.73%
Return on Average Capital Employed 9.14% 16.06% 14.82% 12.67%
Return on Average Equity 9.44% 12.17% 19.11% 10.66%
Debt to Equity Ratio 0.04x 0.06x 0.51x 0.72x
Debtors Turnover Ratio 7.59x 9.36x 0.99x 1.02x
Inventory Turnover Ratio 2.17x 3.33x 1.81x 2.74x
Current Ratio 5.21x 4.20x 2.16x 1.12x
Interest Coverage Ratio 32.55x 46.90x 4.18x 3.63x

Details of significant changes (i.e., change of 25% or more as compared to the previous financial year) in key financial ratios, along with detailed explanations:


EBITDA decreased by 28.1% to 43,771 Lakhs

(margin of 26.39%) with the lower sales volume and realizations in ferro alloys.

• Return on Capital employed decreased from 16.06% to 9.14% as of 31 March 2023 with the decrease in profit during the year and increase in base of Capital employed.

• Debt to Equity ratio decreased to 0.04x from 0.06x in March 2022 with the decrease in outstanding debt and increase in Net worth

• Inventory Turnover ratio dropped to 2.17x as of 31 March 2023, with the increase in inventory levels of raw materials and finished goods.

• Interest Coverage Ratio reduced to 32.55x as of

31 March 2023 with the decrease in profit.


• PAT margin nearly doubled with string MCL financial performance and decrease in tax expense of MCL.

• Return on Average Equity jumped to 19.11% as of

31 March 2023 with the surge in net profit during the year

• Debt to Equity ratio decreased to 0.51x from 0.72x as in March 2022 with the decrease in outstanding debt with MCL loan repayments and increase in Net worth

• Inventory turnover ratio decelerated to 1.81x from 2.74x as in March 2022 with the increase in inventory levels at Standalone operations.

• Current ratio improved to 2.16x with the increase in current assets and decrease in current liabilities. Decrease in current liabilities is with the repayment of loan outstanding by MCL

Material developments in Human Resources / Industrial Relations front, including the number of people employed

Nava, with its strong belief to renew, revive and reinvent has built a respected global business that delivers sustainable growth and value for its stakeholders, while enriching lives in the countries and communities it works in. Throughout the legacy of Nava & in its continuous endeavour to grow, the organizations ability to anticipate and proactively respond to change, hinged behind the progress, while staying true to the values that make it unique. This spirit of constant renewal has allowed the Group to create, explore and realize new potential, across industries and geographies.

Work Culture

The renewed & revived core values (Execution excellence, Partner-of-choice, Long-term thinking, Caring culture and Giving back) with traditionally anchored thinking characterised by high performance work environment, open communication, ethical business practices, empowerment, continual improvement / innovation to deliver large value business with uncompromising quality and safety standards within time and cost parameters, shall continue to be a strong driver of the Organization to march ahead. The culture further reinforced by open and two-way communication, interactions with the leadership team at regular intervals. Nava has a tradition of concern for people and respect for the individual. The voice of the individual is heard in the way we treat and interact with people. The Management believes that the Organisations success is attributable to its people and our highly talented and committed workforce gives us a competitive advantage in the business.

Capacity Building

At the Organisational level, the staffing levels arise out of assessment of current and future requirements based on the short-term and long-term plans of the

Business expansion. Staffing for specific projects is based on the new initiatives / businesses planned and implemented with initial intake of key / critical talent.

Based on the progress made in the new business, capacity is further enhanced and induction from campuses is a part of the capacity building for meeting the long term needs and for creating home grown talent pipeline.

Capability Building

Capability needs in core competence areas relevant to Top Leadership along with the resources in various

Impact Levels are identified with the support of

TNI Process and addressed through Learning and development initiatives. In addition, as a long-term perspective of adopting Competency based Management System, we have competency mapping in place and career progression across levels is initiated with the support of competencies and also potential assessment. In addition, competencies that are needed for leadership positions are integrated into the Performance Management System (PMS) through the potential assessment. Employees are also encouraged to acquire additional qualifications / certifications are relevant to enhance their capabilities through higher education.


Nava is an equal opportunity employer and encourages diversity and promotes a diverse culture. To ensure diversity, recruitment is carried from all the regions of the country with no discrimination in gender while hiring, keeping alongside the plant requirements.

Diversity at our different plants is also ensured by engaging contractors and labour gangs across the country including hiring of local people which helps in better coordination with local bodies and stakeholders. In addition, the Organisation has a healthy diversity of age groups.

Performance Management Process

Career progression is carried out through a well-defined process which is linked to high performance and potential of the employees. Employees are assessed at the year-end based on their achievement targets set at the beginning of the year. Compensation benchmarking and performance management practices within the industry are revisited and relevant / contemporary practices are carried out from time to time. The Organization believes and inculcates a transparent approach of appraising the employee. Employees goals are clearly articulated and defined, performance challenges identified and career development solutions provided to help them advance in their career and motivate to achieve the career goals.


Our retention strategy for all employees focusses on integration, career progression opportunities, HR friendly policies, etc. Integration is facilitated through well-knitted induction programs, suggestion schemes which are well supported by formal reward and recognition program. Assimilation of new employees into our culture is being done through structured induction program and employees are posted at respective plant locations and are well integrated into the respective function(s). HR Policies are continually evolved in line with the contemporary needs of the workforce & industry, with an employee centric approach and employee reciprocation with their appreciation which helped the Organisation in developing and retaining the talent and contain attrition.

Industrial Relations

The Company has an impeccable record in terms of maintaining harmonious industrial relations. The year gone by too did not lose a single man day on account of any industrial strife / disturbance.

The number of permanent employees on the rolls of the Company stood at 606 (1065 across all the Companies of the Group globally) as on March 31, 2023.