Milgrey Finance & Investments Ltd Management Discussions.

Cautionary Statement:

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward looking within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.

Global and Indian Economy:

The world has been experiencing a slow down for the last two years. The US China Trade War, uncertainty over Brexit, fall in consumption, rise in NPA and several other factors have had a significant effect on the economic landscape. .

The Indian economy also witnessed some degree of slowdown, especially in the second half of the fiscal.Yet, for the full year, the economy is expected to grow at 7% as per government estimates. That however will be the slowest in five years. Economic parameters were mixed for the year with full year Index of Industrial Production at three year low of 3.6% (vs 4.8% last year). Inflation (Consumer Price Index) has hovered between 2% and 3% for most part of the year with pushes and pulls from food and fuel and services in different directions. The core inflation though has been sticky and remained around 5% for most of the year.

As we look forward to the next year, while there is a mild skittishness currently, it will not take much for it to turn into optimism as macro-economic parameters, domestic economic variables and global goldilocks keep India in a good stead.


The banking and finance sector has been under pressure for a while due to the default in repayments of loans. Many corporates as well as the financial and operational creditors have invoked the provisions of Insolvency and Bankruptcy Code (IBC). Unfortunately, the IBC has not been able to effectively deal with the loan default problems and several applications are pending in the court for resolution.

The year 2018-19 was marked by a lot of disruptions and dislocations in the financial markets beginning from defaults from a large infrastructure financing company, which then led to tightness in the credit markets eventually stifling weaker Non-Banking Financial Companies (NBFC) for refinancing.

The Government is taking steps to revive the business sentiment and ease the liquidity crisis. However, there is still some pain left in the system before we can expect any recovery.

Financial Performance:

During the year under review, your company registered total income of Rs. 1,25,000/-. However, the company continued to incur loss in the current financial year as well. In the Financial Year 2018-19 your company incurred as loss of Rs. 20.54 lakhs as compared to Rs. 9.15 lakhs in the previous financial year. Expenditure incurred during the year consisted of mainly fees paid to Exchanges, professional fees and advertisement.

An open offer was made by Mr. Mahendra Bachhawat along with PACs for acquiring Shares of the Company under Regulation 3 (1) & 4 of the SEBI (SAST) Regulations, 2011.

Consequent to completion of open offer Mr. Mahendra Bachhawat along with PACs Abhay Gupta and Rashmi Shah have become the promoters of the Company and the erstwhile promoters have ceased to be promoters and their remaining holding, if any, has been classified as public holding.

The current promoters are making plans to streamline the operations of the Company so as to generate returns to shareholders.

Significant Changes in the Key Financial Ratios:

Key Financial Ratios FY 2018- 19 FY 2017-18 % Change (YOY) Remarks
Debtors Turnover Ratio NA NA NA -
Inventory Turnover Ratio NA NA NA -
Interest Coverage Ratio (12.90) NA NA -
Current Ratio 14.29 0.02 60408.00 The current ratio has improved during the year under review.
Debt Equity Ratio 0.06 NA NA
Operating Profit Margin (15.17) NA NA
Net Profit Margin (16.34) NA NA
Return on Net worth (0.20) NA NA

Opportunities and Threats:

Due to stiff competitions in the finance field where the Companys activities are centered in, the overall margins are always under pressure, but maintainable, with the constant effort and good services rendered by the company.


The current decline in the financial markets, global as well as domestic, present a good opportunity for value investing. There are several blue chips which are available at attractive valuations. The markets may not offer any short term profits. However, there can be good opportunities where good long term investments can be made.

Credit Risk Management:

Customer selection is of paramount importance, and in this the companys business development and credit teams have the necessary expertise to ensure asset quality. Underwriting decisions are based on knowledge about the prospective customers business as well as assessment of his cash flows and ensuring adequacy of collateral or guarantees.

Interest Rate Risk Management:

The Companys resources can be a blend of fixed, semi-fixed or floating rate loans, while its assets offerings may or may not be fixed rate products.

Any risk arising from this situation is however mitigated by the Company choosing its lenders with care and with aggressive negotiation thereby ensuring the finest rates for itself; thereby keeping a positive Asset- Liability combination.

Human Resources:

While we have all the processes in place, it is important that we have the right people at job to achieve the goals. Our employees are our most important assets. The competency development of our employees continues to be a key area of strategic focus for us.

By creating conducive environment for career growth, company is trying to achieve the maximum utilization of employees skills in the most possible way.

There is need and the company is focused on retaining and bringing in talent keeping in mind the ambitious plans despite the market and industry scenario.

The company also believes in recognizing and rewarding employees to boost their morale and enable to achieve their maximum potential. The need to have a change in the management style of the company is one of the key focus areas this year.

Internal Control Systems:

The Company has adequate system of strong internal controls for business processes, with regard to operations, financial reporting, compliance with applicable laws and regulations, etc. Regular internal audits ensure that responsibilities are executed effectively. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening the existing control system in view of the changing business needs from time to time. The Company has also appointed Internal Auditor pursuant to the provisions of Companies Act, 2013 read with relevant rules made thereunder.