Seya Industries Ltd Management Discussions

COMPANY PERFORMANCE OVERVIEW

The National Company Law Tribunal ("NCLT"), Mumbai Bench, vide order dated 2^nd November 2023 passed in CP (IB) 446 MB 2023, initiated the Corporate Insolvency Resolution Process ("CIRP") against the Company. Mr. Bhavesh Rathod, IP Registration No. IBBI/IPA-001/IP-P01200/2018-2019/11910, was appointed as Interim Resolution Professional ("IRP") to manage the affairs of the Company in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 ("Code"). In line with the provisions of the Code, the powers of the Board of Directors stand suspended and are being exercised by the IRP.

The Company continued to remain under CIRP during the financial year 2025-26. The manufacturing operations remained suspended during the period under review. Consequently, the Company did not generate revenue from operations during FY 2025-26. The financial performance during the year primarily reflects other income and the costs incurred in maintaining the Company and its assets during the CIRP period. The Company as such was engaged in the manufacture of specialty chemicals having applications in end-user segments including computer printing inks, pigments and paints, pharmaceuticals, personal and healthcare products, agrochemicals, insecticides/pesticides, organic chemical intermediates, rubber chemicals, textile dyes, thermic fluids and related industries. The suspension of manufacturing operations has materially restricted the Companys ability to undertake normal business activities during the period.

The audited standalone financial results for FY 2025-26 indicate that the Company had nil revenue from operations.

Total income stood at 1,664.75 lakh as compared with 1,507.20 lakh in FY 2024-25. Total expenses reduced to 2,177.68 lakh from 2,328.14 lakh in the previous year. The net loss for FY 2025-26 stood at 287.41 lakh as against a net loss of 630.69 lakh in FY 2024-25. Accordingly, the loss for the year was lower than the previous year, although the Company continued to remain loss-making due to suspension of operations. The reduction in the loss during FY 2025-26 was principally attributable to the reduction in overall expenses and the increase in other income, notwithstanding the continued absence of manufacturing revenue. The financial results for FY 2025-26 were audited, and the statutory auditors issued an unmodified opinion.

The Companys manufacturing operations remained suspended throughout the period under review. Accordingly, there was no normal production, sales or operating revenue during FY 2025-26. The focus during the year continued to be on preservation of the Companys assets, compliance with applicable requirements, management of CIRP-related matters and maintaining the Company in accordance with the directions and framework applicable under the Insolvency and Bankruptcy Code, 2016.

In the absence of manufacturing operations, conventional operating parameters such as production volumes, capacity utilisation, sales volumes and product-wise performance are not meaningful for FY 2025-26.

Segment wise Performance: The Segment wise result is not applicable as the operations of the company have remained suspended.

The principal risks and concerns during FY 2025-26 continued to arise from the Companys ongoing CIRP, suspension of manufacturing operations, absence of operating revenue, liquidity and cost pressures, preservation of asset value, and the uncertainty associated with the outcome and timelines of the resolution process.

Since the powers of the Board of Directors stand suspended during CIRP, the Companys management and decision-making framework operates under the provisions of the Code and the supervision of the IRP. Accordingly, the Company has not adopted a conventional Board-led risk management framework during the CIRP period. The Company continues to be exposed to the risk that prolonged suspension of operations may affect the value and viability of the business. Any revival or recommencement of operations would be dependent upon the outcome of the CIRP and the implementation of the course of action approved in accordance with applicable law.

The immediate outlook of the Company remains closely linked to the progress and outcome of the CIRP. The primary objective during the resolution process is to preserve the value of the Companys business and assets and to facilitate resolution in accordance with the Insolvency and Bankruptcy Code, 2016. The Companys underlying business comprises specialty chemicals serving a diversified set of end-user industries. Subject to the successful resolution of the CIRP, availability of necessary resources and recommencement of manufacturing operations, the Company may seek to restore its operating activities and participate in the relevant specialty chemical markets. However, no assurance can be given regarding the timing or manner of such revival.