maharashtra scooters ltd Management discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS</dhhead>

a) Industry structure and developments

Maharashtra Scooters Ltd. (‘MSL’ or ‘the Company’) continues to be an Unregistered Core Investment Company (CIC). As a CIC, a minimum of 90% of its assets stand invested in the Bajaj Group and the balance representing accumulated surpluses, is invested in debt and other instruments with the sole objective of earning a reasonable rate of return whilst protecting the principal.

The Company sees opportunity in manufacturing of pressure die casting dies, castings, jigs and fixtures, primarily meant for two and three - wheeler industry amongst other industries, which is the current manufacturing activity of the Company. The customer profile has since expanded from auto component to include Telecom segment, Generator segment, Electrical Vehicle segment and LED Light parts.

 

b) Opportunities, threats, risks and concerns

Being a CIC, MSL continues to remain strategically invested in the securities of its group companies and hence any in stock market prices are not of concern. As far as investments in debt securities are concerned, MSL invests only in highly rated issuers and securities i.e. in AAA, AA+ and the like rated papers.

The Company continues to manufacture pressure die casting dies, fixtures and die casting components mainly for automobiles industry on a very limited scale basis. At MSL, we strive to conduct our business with only credible entities which operate in industry segments that generally have a large, active and buoyant market, have a credible management and carry reputational goodwill in the business community.

 

c) Outlook

The Company constantly endeavors to expand its customer profile rather than concentrating in one segment. The Company now caters to industries in telecom segment, generator Segment, Electrical Vehicle segment, etc.

 

d) Segment-wise or product-wise performance

There being two reportable segments, segment-wise information is given under Financial Statements.

 

e) Internal control systems and their adequacy

The Company has effective internal control systems, which have been found to be adequate by the Management of the Company. The Internal Auditors periodically bring to the attention of the Audit committee any deficiencies and weaknesses in the internal control systems, if any. The Audit Committee reviews and monitors the remedial actions to ensure its overall adequacy and effectiveness.

 

f) Discussion on financial performance with respect to operational performance

The details have been furnished in the Directors’ Report to the Members as well as in the Financial Highlights included in the Annual Report.

 

g) Material developments in human resources/industrial relations front, including number of people employed

MSL had earlier entered into an agreement with the workers union on 24 December 2019, for the wages and service conditions in respect of daily rated workmen employed at Satara / Pune. The agreement was valid for a period of three and half years i.e. from 1 October 2019 up to 31 March 2023. The Company has now entered into a fresh wage agreement with the workers union on 10 January 2023, which will be effective from 1 April 2023.

As at the end of 31 March 2023, the Company had 37 permanent workers, 55 permanent employees and 19 other than permanent employees working on contract basis including a trainee. h) There are no Material financial and commercial transactions, where the Management has personal interest, which may have a potential conflict with the interest of the Company at large.

 

i) Significant changes in financial ratios:

	Ratio in	Ratio in	% change
Particulars	2022-23	2021-22	Over 2021-	Remarks
			22
Inventory Turnover Ratio	1.87	1.49	25%	Inventory turnover has increased due to lower work in progress during FY2023.
Trade receivables Turnover Ratio	2.10	2.04	3%	Higher trade receivables turnover ratio is due to lower trade receivables during FY2023.
Current Ratio	20.69	17.23	20%	Higher current ratio is due to increase in current investments.
Net Profit Margin (%)	89.68%	73.39%	22%	Net profit margin is higher due to increase in profit.
Operating profit margin (%)	(40.44%)	(28.26%)	(43%)	Operating loss has increased due to increase in other overheads.
Return on equity (%)	0.93%	0.73%	28%	Return on equity is higher due to higher profit.