divya jyoti industries ltd Management discussions

The Honble National Company Law Tribunal(‘NCLT), Ahmedabad (Indore Bench), had vide order dated 04.12.2020 admitted application for the initiation of the corporate insolvency resolution process ("CIRP") of Corporate Debtor in terms of the Insolvency and Bankruptcy Code, 2016("CODE") read with the rules and regulations framed there under, as amended from time to time. Further, the NCLT vide order dated 04.12.2020 admitted application (TP 241 of 2019 [CP(IB) 628 of 2018] has appointed Mr. Sajjan Kumar Dokania (IBBI registration no. IBBI/IPA-003/IP-N000150/2017-18/11729 as the Interim Resolution Professional has taken over the management of affairs of the Company. Pursuant to the publication of the admission order and in accordance with the provisions of the code, the powers of the Board of Directors of the Company have been suspended & stands vested in the Interim Resolution Professional. Further, appointment as the Resolution Professional ("RP") was subsequently approved by 7^th committee of creditors meeting on 27^th May, 2021.

INDUSTRYSTRUCTUREANDDEVELOPMENTS

Your Companys operation depends on the soybean seed a raw material which is used to produce Soya meal, Crude oil. But due to accrual of heavy loss and nonpayment by sundry debtors, working capital got reduced below desired level. Due to all these reasons /conditions, company has closed the operation for more than three years. The company is facing tough time and is under CIRP process vide order as mentioned above.

The two times outbreak of Covid-19, which led to a country wide lockdown to curtail the spread of the virus, has posed a challenge and has altered the outlook for the Indian economy and Indian Edible oil Industry has witnessed financial stress also.

OPPORTUNITIES AND THREATS

Plant of the Company situated at Pithampur (Dhar, M.P.) has been closed for approximately three and half year. At current day due to commercial problems and also because of this tough situation the Company is facing much financial strain. The Company is under CIRP to revive the Company from such stressed situation.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

Segment Reporting is not being applicable on the company as the business activity of the company falls within single primary business segment viz. Solvent Extraction & Refinery.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has effective Internal Control Systems to provide reasonable assurance for safeguarding assets and their usage. There is maintenance of proper accounting records and adequacy and reliability of the information. The Audit Committee is regularly reviewing the internal audit activities for the auditing carried out in all the key areas of the operations.

HUMAN RESOURCE/INDUSTRIAL RELATIONS

Relations between the management & the employees remained healthy & cordial throughout the year. As per the current position of the company, Resolution Professional of the Company is taking care of day to day transactions of the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company has stopped production for the more than three years due to various reasons and Company is under CIRP process to revive the Company as the Company was facing financial strain.

DISCLOSURE IN ACCOUNTING TREATMENT

In the preparation of financial statements, no different treatment from that prescribed in applicable Accounting Standard has been followed.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The Company has not operated for more than Three years. The net worth of the Company became negative for preceding financial years. Also, there are no significant changes as compared to immediately previous financial year in key financial ratios.

CAUTIONARYSTATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied. Readers are cautioned not to place undue reliance on the forward- looking statement.