Digjam Limited, a textile company, has reported a significant turnaround in its financial performance for the fiscal year ended March 31, 2021, following a successful Corporate Insolvency Resolution Process (CIRP).

Financial Highlights

The company has shown a remarkable improvement in its financial position, reporting a net profit after tax of ₹894.00 lakhs for FY 2021, compared to a loss of ₹1,758.00 lakhs in the previous year. Total income also saw a substantial increase, rising to ₹612.00 lakhs from ₹89.00 lakhs in FY 2020.

Corporate Insolvency Resolution Process

Digjam Limited underwent a Corporate Insolvency Resolution Process initiated by the National Company Law Tribunal (NCLT) Ahmedabad in April 2019. The resolution plan submitted by Finquest Financial Solutions Private Limited was approved in May 2020, leading to significant restructuring of the company:

1. Share capital reduction from ₹9,264.16 lakhs to ₹200.00 lakhs
2. Extinguishment of liabilities
3. Reconstitution of the Board of Directors

Exceptional Items

The company reported exceptional items totaling ₹366.00 lakhs, which included:

• Impairment of property and current assets: ₹5,936.00 lakhs
• De-recognition of financial and operational creditors: ₹8,291.00 lakhs

These exceptional items played a crucial role in the company's financial turnaround.

Segment Information

Digjam Limited operates exclusively in the textiles segment, which is its primary business focus.

The positive financial results and successful resolution of the insolvency process indicate a potential revival for Digjam Limited. However, the company's performance in the coming years will be crucial in determining the long-term success of this turnaround.

DIGJAM Limited , a textile company currently undergoing Corporate Insolvency Resolution Process (CIRP), has released its unaudited financial results for the second quarter and half year ended September 30, 2019. The company's financial situation remains challenging, with significant losses reported for both periods.

Financial Performance

The company reported a loss of ₹185.00 lakh for the quarter ended September 30, 2019. For the half-year period, the losses were more substantial, amounting to ₹906.00 lakh. These figures underscore the financial difficulties faced by DIGJAM Limited.

Corporate Insolvency Resolution Process

DIGJAM Limited has been under CIRP since April 26, 2019, following an order initiating the process. Sri Sunil Kumar Agarwal has been appointed as the Resolution Professional to oversee the insolvency proceedings.

Resolution Plan Status

In a positive development, the Committee of Creditors approved a Resolution Plan in principle on February 11, 2020. However, this plan is still pending approval from the National Company Law Tribunal, Ahmedabad. The outcome of this approval process will be crucial for the company's future.

Operational Challenges

The company's operations have been severely impacted by its financial situation. Production has been suspended since October 2018 due to extreme cash liquidity issues and working capital constraints. This prolonged suspension of production activities has likely contributed to the company's ongoing losses.

Financial Review Process

The financial results were reviewed by the Resolution Professional and Key Management Personnel of the company. Additionally, S.K. Bajpai & Co., the company's auditors, conducted a limited review of the results.

Looking Ahead

The approval of the Resolution Plan by the National Company Law Tribunal will be a critical milestone for DIGJAM Limited. Stakeholders will be closely watching for any developments in the insolvency resolution process and potential strategies to address the company's financial and operational challenges.

As the situation evolves, further updates on the company's financial performance and the progress of the insolvency resolution process will be important indicators of DIGJAM Limited's future prospects.