virya resources ltd share price Management discussions




In Indias energy sector, coal accounts for the majority of primary commercial energy supply. The energy security of the country and its prosperity are integrally linked to efficient and effective use of this abundant, affordable and dependent fuel, coal.

India has a balanced energy basket and coal sector is an important contributor in fulfilling nations energy needs. The sector is not only committed to meet coal demand in the country but also sensitive towards building a sustainable ecosystem. Coal is a critical input for power, fertilizer, iron & steel and cement sector. Coal imports, which had reached a peak of 248 Million Ton (MT) in 2019-20, declined continuously during the next two years to 215 MT in 2020-21 and further to 209 MT in 2021-22.

Despite steep rise in actual demand of coal from 956 MT in 2019-20 to 1027 MT in 2021-22, coal imports have not increased. Coal import grew at a compound annual growth rate (CAGR) of 22.86% during the period 2009-10 to 2013-14. At this CAGR, coal imports would have reached 705 MT in 2020-21 and further to 866 MT in 2021-22. The import of coal could be checked only by sustaining increased domestic supply over the years. All India coal production has increased from 716 MT in 2020-21 to 777 MT in 2021-22 resulting in an increase of 61 MT. Therefore, despite a steep rise in actual demand for coal from 906 MT in 2020-21 to 1027 MT in 2021-22, coal imports could be contained due to increased domestic dispatch from 691 MT in 2020-21 to 818 MT in 2021-22.

Domestic dispatch has not only increased to the power sector but also to non-power sector by 101 MT in 2020-21 to 104 MT in 2021-22.

Coking Coal import was 57 MT with a growth of 11.65% during 2021-22 which is largely used in the Steel Sector. However, as compared to pre-covid year of 2019-20, the growth in coking coal import is around 10 %. Coal imported by Non-regulated Sector (Cement, Sponge Iron & Paper etc) increased to 125 MT in 2021-22 from 119 MT in 2020-21 an increase of 5.23 %. Compared to the pre covid year of 2019-22, when imports by non-regulated sector was 127 MT, imports by this sector has actually declined in 2021-22. Thus, increase in import of coal by non-power sector during 2021-22 is largely on account of growth in import of coking coal and import of coal by non-regulated sector which largely import high grade thermal coal. Supply of both these categories of coal are limited in the country.

In order to satisfy the coal demand, the Indian coal industry needs more investment and private players to raise their production level. Steps as to develop better infrastructure of roadways and railways, augment infrastructure for logistics, smooth land acquisition, easy availability of water, develop coal washeries, capacity building and skill development, etc., are getting better by various projects and actions undertaken by the Government.


In Coal Trading the opportunities and threats on the companys business are summaries below.

Opportunities & Threats in Coal Trading Sector:


Increase in demand due to rapid growth in Power Sector

Government support to boost coal production

Coal to remain the key primary energy source in India.

Large scale rural electrification and power for all under UDAY scheme.

Enhanced demand of power due to increased use of electric vehicles.

Strong economic growth in India and resultant demand for energy, particularly coal as an energy source.

Being a cheaper source of energy compared to alternate sources available in India, demand to continue to remain strong.

Opportunity to adopt coal to liquid and coal to gas technology.


Decrease in coal demand and Increase in proportion of renewables in the energy mix.

Energy storage solutions.


According to the Global Economic Prospect Report, June 2022, of The World Bank, the Indian economy is expected to grow by about 7.5% this year and by about 7.1 % in the next two years. As per the Bank, the Indian economy is robust and has the necessary potential to deliver the expected growth rate. The downward revision in Indias prospects comes in the backdrop of a projected slowdown globally, with growth expected to slump from 5.7% in 2021 to 2.9% in 2022 — in January, the Bank had projected global growth this year to 4.1%. The slowdown is due to the lasting effects of the pandemic but the more immediate trigger is the Russian invasion of Ukraine. "The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid," said World Bank Group president David Malpass.

India is undergoing structural shift in the inflationary process towards low inflation. The energy market is very different today than a few years ago in a way as renewables play an increasing influence.


India is the worlds third largest coal consumer behind China and the United States; and the share of coal in Indias electricity mix has been rising. Indias coal consumption was estimated at 790 million tonnes (or 516 million tonnes of coal equivalent (Mtce), around 10 per cent less than the United States (IEA 2014). Thermal coal accounts for around 85 per cent, or 665 million tonnes, of Indias coal consumption. Metallurgical coal (80 million tonnes) and lignite (45 million tonnes) make up the balance.

The power sector accounts for more than 70 per cent of Indias coal use and supported a fivefold increase in coal use in electricity generation over the past few decades. As such, the power sector is clearly central to the coal outlook in India. Indias steel production has increased by around 25 per cent over the past five years to around 83 million tonnes in 2014. The cement industry, the second largest globally after China, is also a major coal user, accounting for around 5 per cent of total coal use. Other industrial sectors, including brick manufacture, Steel, Cement, Drugs and Textiles consume small quantities of coal.


The Company has a proper and adequate Internal Control System to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and those transactions are authorized, recorded and reported correctly.

The Company, in consultation with its Statutory Auditors and Internal Auditor, periodically reviews and ensures the adequacy of Internal Control Procedures for the orderly conduct of business and also includes a review to ensure overall adherence to Management Policies and applicable Laws & Regulations. The Companys internal audit team carries out extensive audits throughout the year, across all functional areas.


Our Philosophy is "Human Resource" is the most important factor for achieving efficiency, productivity and quality. Human Relationship Management assumes great importance in the Company and human resources are the great asset. During the year under review, the Company continued its emphasis on Human Resource Development as one of the critical area of its operation. Realizing that the human capital being the Companys greatest asset, the up gradation of skills, personality and attitude of its employees is always looked after. Measures are also being implemented for enhancing the motivation and commitment of the work force and building up a unique positive work culture. Employer - Employee relation throughout the year were cordial. The Company organizes periodical trainings to encourage and develop vital human resource. All the efforts are aimed to ensure develop and nurture the entrepreneurial attitude and skill among the employees. The Company places on record its appreciation for the valuable contributions made by employees at all levels.


Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations which have been prepared in compliance with the requirements of the Companies Act, 2013, the Accounting Standards issued by the Institute of Chartered Accountants of India, the Listing Agreements and all other applicable rules and regulations.

The actual performance may vary depending on the market fluctuations, changes in Government policies, rules and regulations change in economic conditions nationally as well as internationally.