DJS Stock & Shares Ltd Management Discussions.

Overall Outlook

Over 2015-20, there have been structural changes in the economy with inflation rate largely remaining in the RBIs comfort zone of 2-6 Percent which resulted in decline in interest rates. The Indian economy was on course to become the third largest economy globally by 2030.

However, the onset of the pandemic in Q4 FY 2019-20 resulted in the Government announcing the first ever national lockdown lasting more than eight weeks. The ensuing disruption led to a record GDP contraction of 24.4 Percent Q1 FY 2020-21. However, this lockdown helped contain the spread of the virus and aided the economy return to its growth path by Q3 FY 2020-21.

The Reserve Bank of India (RBI) intervened by providing monetary stimulus through its various liquidity programmes, slashing interest rates, and allowing loan moratorium facilities, among others. The Government initiated several measures to minimise the impact of the pandemic, protect the lives of the country’s citizens and revive the economy. The Government also announced a comprehensive COVID relief package of ? 20 trillion in May 2020 as a part of Atmanirbhar Bharat Abhiyaan which included a mix of cash spending, liquidity support to agriculture, MSMEs and other critical sectors, along with various structural reforms across sectors.

The gradual opening of economy post June, with targeted and restrictive lockdowns, led to gradual recovery in the following months, driven initially by pent up demand. Improvement in the Covid situation from September allowed the Government to open up significant portion of the economy in Q3 FY 2020-21 which along with festive demand provided further impetus to the economy. In order to support the recovery the Government also announced more stimulus measures of ? 2.65 trillion under Atmanirbhar Bharat 2.0 and 3.0 which included additional support for agriculture and housing sector among others. In order to incentivise localisation, a Production Linked Incentive (PLI) scheme covering 10 sectors was launched with an outlay of ? 1.46 trillion under the Atmanirbhar Bharat 3.0 package. The PLI scheme was later expanded to cover 13 sectors with an outlay of ? 2 trillion in the Union Budget 2021-22.

Industry Structure and Development

Financial markets remained jittery in FY21 due to domestic economic slowdown, concerns on fiscal slippage and geopolitical tensions. Weaknesses in overall economic activity also put pressure on business growth.

Your Company is continuously reviewing the evolving situation in the light of COVID-19 and playing a responsible role in minimising the adverse impact of the pandemic on its businesses and the stakeholders’ interests.

Segment-wise/Product-wise Performance

Your Company has only one reporting segment. The revenue for the year was Rs. 40.79 lakh.

Outlook

The markets presently are subdued due to COVID-19 and how sooner it will revive is not easy to predict. However, with the industry’s increasing preparedness, the evolving opportunities can be better harvested.

Risk Management

Risk management is integral part of business for the Company. The good risk management practices of the Company have facilitated navigating through environmentally turbulent times. While we have been managing various risks, a need for holistic approach to risk management led us to embrace yet another long journey towards Enterprise Risk Management (ERM). This we believe would strategically benchmark our practices to the best in class levels in ensuing years.

Internal Control System

Your Company has a planned internal control system through internal checks and reviews it periodically to strengthen it and safeguard Company’s assets. Management Information System is given upmost importance.

Financial Performance w.r.t. Operational Performance

During the year under review, the Company has earned Total Revenue of Rs. 40.79 lakh in comparison to Rs. 142.20 lakh during the previous year. The Company has reported a loss of Rs. 31.55 Lakhs in comparison to profit of Rs. 15.49 lakh during the previous year.

Safety, Health and Environment

Your Company as a matter of policy gives greater importance to safety, health and environment and also ensures compliance with applicable legislative requirements.

Human Resources

Your Company recognizes the importance of Human Resource in achieving its objectives and strategies as human resource plays an important role in the success and growth of Company. Your company gives priority in honing and utilizing their skills through in house training programs.

Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios.

Particulars F.Y. 2020-21 F.Y. 2019-20
Current Ratio1 2.86 times 1.65 times
Net Profit Margin (%)2 (227.25)% 10.81%
Return On Net-worth (%)3 (11.78)% 01.88%

1The current ratio has improved slightly as a result of better management of current liabilities. 2The net profit margin ratio has gone down due to decrease in income from operation of the company.

3Return on Networth (%) gone down due to decrease in income from operation of the company.

Cautionary Statement

The report contains forward looking statements describing expectations, estimates, plans or words with similar meaning. Your Company’s actual result may differ from those projected depending on various factor. Your Company cannot guarantee that the assumptions and estimates in the forward looking statements are accurate or will be realized.