NCLT directs meetings for Digjam and Reid & Taylor scheme

The National Company Law Tribunal (NCLT), Chennai Bench, has issued an order on June 19, 2026, approving the convening of meetings for the proposed Scheme of Arrangement between Reid & Taylor International Private Limited and Digjam Limited . The order, received by the company on June 26, 2026, directs the holding of meetings for unsecured creditors of the demerged company and equity shareholders of the resulting company to consider and approve the scheme. The arrangement aims to consolidate the textile businesses of both entities under a single entity to optimize resource utilization and achieve operational synergies.

The Tribunal has dispensed with the meetings for equity shareholders and secured creditors of Reid & Taylor International Private Limited, as well as preference shareholders and unsecured creditors of Digjam Limited, based on consents obtained via affidavits. However, it mandated meetings for the remaining stakeholders to ensure statutory compliance. The scheme is subject to the approval of these stakeholders and other regulatory clearances, including the final sanction of the Tribunal.

Meeting Details and Quorum

The NCLT has scheduled the meetings for August 16, 2026, at the registered office of the demerged company or via video conferencing. The meeting for unsecured creditors of the demerged company will be held at 10:00 A.M., followed by the meeting for equity shareholders of the resulting company at 11:00 A.M. The Tribunal has appointed Sri Ram as the Chairperson and Mr. Ajith Kumar. P as the Scrutinizer for these proceedings.

Class	Meeting Date	Time	Quorum
Unsecured Creditors of Demerged Company	August 16, 2026	10:00 A.M.	140
Equity Shareholders of Resulting Company	August 16, 2026	11:00 A.M.	6

Procedural Directives

The Tribunal has outlined specific procedural requirements for the applicant companies. Notices for the meetings must be sent via registered post, speed post, courier, or email at least 30 days in advance. Additionally, the companies are required to publish advertisements in the English daily “Business Standard” and the Tamil daily “Makkal Kural” at least 30 clear days before the meetings. These publications must include details of the scheme, the explanatory statement, and the proxy form.

The Chairperson is responsible for reporting the meeting results within three days of the conclusion of the meetings. The companies must also submit an affidavit of service of notice and compliance with all directions at least one week before the proposed meetings. The application, numbered CA(CAA)/10(CHE)/2026, has been allowed by the Tribunal comprising Judicial Member Shri. Jyoti Kumar Tripathi and Technical Member Shri. Ravichandran Ramasamy.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.92%	-1.39%	-2.05%	-9.86%	-6.39%	+155.42%

Digjam Limited reported a total comprehensive loss of ₹97.90 lakhs for the financial year ended March 31, 2026, as current liabilities exceeded current assets by ₹2191.48 lakhs. The company's statutory auditor, Nayan Parikh & Co., highlighted a material uncertainty related to the company's ability to continue as a going concern, citing discontinued operations at its sole manufacturing facility in Jamnagar. Despite these challenges, the Board approved the audited financial results on May 23, 2026, based on management's plans for asset realisation and strategic restructuring.

The Board meeting, conducted via video conferencing, approved the audited financial results for the quarter and year ended March 31, 2026, along with the draft Statutory Auditor's Report. Additionally, the Board appointed M/s. G. M. Kapadia & Co. as the Internal Auditor and M/s. K. G. Goyal & Co. as the Cost Auditor for the financial year 2026-2027. The trading window for insiders, closed since April 1, 2026, will reopen 48 hours after the declaration of these results. The company also published the audited financial results in newspapers, including the Financial Express and Maalai Malar, on May 25, 2026, pursuant to Regulations 33 and 47 read with Schedule III of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

Financial Performance

The company reported a total income of ₹3,350.79 lakhs for FY26, up from ₹1,839.92 lakhs in the previous year. However, the financial performance was significantly impacted by discontinued operations. While continued operations posted a profit before tax of ₹232.55 lakhs, discontinued operations resulted in a loss before tax of ₹332.35 lakhs. Consequently, the company reported a net loss of ₹99.80 lakhs for the year.

Particulars	Year ended March 31, 2026 (₹ in Lakhs)	Year ended March 31, 2025 (₹ in Lakhs)
Total Income	3,350.79	1,839.92
Total Expenses	3,118.24	1,642.01
Profit before tax (Continued)	232.55	197.92
Loss before tax (Discontinued)	(332.35)	(1,258.40)
Net Profit/(Loss)	(99.80)	(1,060.49)

Auditor's Observations

Nayan Parikh & Co. issued an unmodified opinion on the financial results but drew attention to Note 4, which details the material uncertainty. The auditor noted that the Jamnagar facility was discontinued effective March 31, 2025, with related assets classified as "Non-Current Assets Held for Sale" carrying a value of ₹5,318.53 lakhs. The financial statements were prepared on a going concern basis, relying on management's plans to realize non-core assets and optimize costs.

The Board also approved a Scheme of Arrangement with Reid and Taylor International Private Limited, pending requisite approvals. The appointed date for the demerger is July 1, 2025, though its effects are not yet reflected in the current financial results.