Divya Jyoti Industries Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indian Edible oil Industry has witnessed financial stress due to rising production costs and cheaper imports thus forcing several firms to suffer hardship in carrying on business due to depressed market condition, particularly Soya Industry is facing a very hard time as there is very less demand of the product in the overseas market.

In the soybean industry, major problems are unfavorable governmental policies, dematerialization, high EMI and interest on loan, credit period to buyers are long and the Soya Processing industry is facing hard problems in the Malwa Region in particular and India in general.

The soybean industry is a totally agriculture dependent industry. So if any problem persists or is present in agricultural related aspect then definitely the industry gets affected to a very large extent. Moreover this industry is largely dependent on the indigenous or domestic supply of raw material

OPPORTUNITIES AND THREATS

The Company at plant situated at Pithumpur (Dhar, M.P.) has operated for 3 or 4 months thereafter closed for remaining year disparity between cost of raw material and finished goods and higher interest rate because of this tough situation we were not able to make the payment on payment on time.

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. The core products of the Company are Soya DOC, Soya Refined oil and Soya Solvent Oil and it is to be noted that all these three products have relatively higher contribution the past financial years.

OUTLOOK

After some time down the line the outlook of soya industry does not seem bright due to above mentioned reasons

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Management has put in place effective Internal Control Systems to provide reasonable assurance for safeguarding assets. There is maintenance of proper accounting records and adequacy and reliability of the information used for carrying on Business Operations. Internal Auditor of the Company ensures compliance and effectiveness of the Internal Control Systems. The Audit Committee is 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 at all levels remained healthy & cordial throughout the year. There were six employees on the Roll at the end of the Financial Year.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Your Company recorded revenue of Rs. 230.29 Lacs during the year under review as against the revenue of Rs. 12157.86 lacs in the preceding financial year as the Company operate for 3 or 4 year and stopped production for the remaining year due to various mentioned reasons.

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 key financial ratios for the year under review cannot be arrived at since some of the relevant line items of financial statements are not available for fair calculation of requisite ratios. Further, the net worth of the Company is negative for preceding financial years. Also, there are no significant changes as compared to immediately previous financial year in key financial ratios.

CAUTIONARY STATEMENT

Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statement.