MANAGEMENT DISCUSSION AND ANALYSIS REPORT
1. Industry Structure and Developments:
The Financial Year 2022-23 began with an expectation that we would soon see GDP surpass
the pre-pandemic level of the Financial Year 2019-20. That has just about been the case.
Despite the recovery, we as a nation have still lost two years of GDP growth.
The Second Advance Estimates of National Income for the year 2022-23 and quarterly GDP
estimates for the quarter October-December, 2022 (Q3 2022-23), alongwith First Revised,
Second Revised and Third Revised Estimates of National Accounts for the years 2021-22,
202021 and 2019-20 respectively was released on 28th February, 2023.
Indias per capita net national income (at current prices) for 2022-23 stands at INR
172,000, according to estimates from the National Statistical Office (NSO). This marks an
almost 100 percent increase from the per capita income in 2014-15 - INR 86,647 - when the
Narendra Modi government first came to power.
When accounting for constant prices [2011-12 prices], Indias per capita net national
income (NNI) (in real terms), increased by about 35 percent from INR 72,805 in 2014-15 to
INR 98,118 in 2022-23.
NNI is an indicator of the total economic activity in a country, and is defined by the
OECD as gross national income minus the depreciation of fixed capital assets (dwellings,
buildings, machinery, transport equipment and physical infrastructure) through wear and
tear and obsolescence.
The below table from the NSO shows Indias per capita gross domestic income (GDP), per
capital gross national income (GNI), and the per capita private financial consumption
expenditure (PFCE) at 2011-12 prices between 2020-21 and 2022-23.
Per Capita Income,
Product, and Final Consumption - Second Advance Estimates of National Income and
Expenditure Components of GDP, 2022-23 (at 2011-12 Prices) |
| Item |
2020-21 |
2021-22 |
2022-23 |
Percentage change over
previous year |
|
(Second Revised Estimates) |
(First Revised Estimates) |
(Second Advanced Estimates) |
2021-22 |
2022-23 |
| Population (in million) |
1355 |
1369 |
1383 |
|
|
| Per capita GDP (INR) |
1,00,981 |
1,09,060 |
1,15,490 |
8.00% |
5.90% |
| Per capita GNI (INR) |
99,578 |
1,06,822 |
1,13,144 |
7.30% |
5.90% |
| Per capita NNI (INR) |
86,054 |
92,583 |
98,118 |
7.60% |
6.00% |
| Per capita PFCE (INR) |
57,728 |
63,595 |
67,555 |
10.20% |
6.20% |
As input prices and the Therefore, production costs remain high, due to global
uncertainties among other factors, companies in most industries are passing on higher
spending to final consumers to preserve earnings margins.
This is why India is currently witnessing a K-shaped economic recovery post-pandemic as
consumption is slowing down and household savings decline. Wage growth is also under
pressure in the lower half of the income pyramid.
The RBI, meanwhile, is attempting to rein in the inflation with policy rate hikes.
The consumer price index (CPI) inflation reached 6.5 percent this January; it was 5.88
percent last November and 5.72 percent in December. Indias average inflation rate was 7.2
percent year-on-year for the first half of FY2022-23; it was 5.8 percent in the previous
two years.
The COVID-19 pandemic pushed many Indians on the lower rungs of the economic ladder
into further poverty. The averages - like per capita metrics - often mask these severe
income inequalities on the ground. As the government pursues redistributive policies,
results need to be delivered on equitable access to healthcare, quality education, and
jobs. Often, numbers get inflated during time of release near elections and budget season
as welfare programs incentivize short term gigs.
Size of Indias economy fifth in the world
Still, in absolute terms, India remains a bright spot on the world stage, as it grows
steadily from a relatively low base. Last year, India overtook the UK to become the
worlds fifth biggest economy, after the US, China, Japan. and Germany.
Multiple initiatives to ease doing business and expand the manufacturing share of the
economy as well as the push for skill development - offers promise to convert Indias
human capital into a talent base that feeds higher quality development. According to its
central bank, the Reserve Bank of India, at current prices and exchange rates, India will
be a US$3.7 trillion economy in 2023, remaining fifth in the world standings.
2. Opportunity and Threats:
Opportunities
Our long-standing relationship with our major customers has been one of the most
significant factors contributing to our growth. Our commitments to quality and customer
service practices have been strong contributing factors to our robust customer relations.
Over the years, we have steadily developed a robust base of customers for our products in
national level.
To overcome the challenges and competition, we have taken various initiatives to reduce
the operational costs, to develop new value added products, improve the performance and
quality of existing value-added products as well as to explore new markets domestically
and globally.
The digitization, unparalleled expertise and an excellent corporate strategy has
resulted in an unprecedented growth of the company over the years. We have an experienced
and dedicated team of professionals, catering to the needs of clients, delivering products
at reasonable interest rates& timely.
Threats:
• Change in Policy and Regulations.
• New entrants in the market and intense competition by existing players
• Technology may become obsolete due to Innovation in Technology
3. Risk Management and Concerns:
Risk Management forms an integral part of your Companys operations. Your Company
continues to focus on a system based approach to business risk management. It broadly
involves identification & potential risks, their analysis and impact as also risk
mitigation initiatives to address the same. The Board of Director of the Company oversees
the risk management Process.
4. Recent Trend and Future Outlook:
NBFCs have become important constituents of the financial sector and have been
recording higher credit growth than scheduled commercial banks (SCBs) over the past few
years. NBFCs are leveraging their superior understanding of regional dynamics and
customized products and services to expedite financial inclusion in India. Lower
transaction costs, quick decision making, customer orientation and prompt service
standards have typically differentiated NBFCs from banks. Considering the reach and
expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like
India. NBFCs have demonstrated agility, innovation, and frugality to provide formal
financial services to millions of Indians.
This is an enviable track record despite the business models of the NBFCs being
severely tested by four large external events in the last few years, namely, (i)
demonetization, (ii) GST implementation, (iii) failure of few large NBFCs, and (iv) the
pandemic. The fact that many NBFCs have managed to overcome these stresses without
significant impact on financial position is a testimony to their resilience and agility.
Financial institutions play a crucial role in ensuring economic stability for
households and businesses at critical junctures. The pivotal role of NBFCs in driving
sustainable fiscal growth is well recognized, given their last-mile connectivity and agile
system. The sector has played a decisive role in accelerating last-mile funding and
understanding the credit requirement of the Unbanked and Underserved. Aided by the
governments thrust towards a digital economy, the sector has also undertaken significant
digital transformation and invested heavily to become tech-agile institutions offering
personalized products and services, ensuring faster credit disbursement.
As India strategizes post-pandemic economic recovery through fiscal measures and
businesses aim to expand capacities, NBFCs have an enormous opportunity to assist in
achieving the noble goal of Aatmanirbhar Bharat through the fast-tracked flow of credit to
businesses and households. As the latest data on Udyam Portal shows, a significant
proportion of registered businesses are micro businesses, Union budget 2023-24 offers an
opportunity to bring in a targeted scheme for expanding credit to micro businesses.
We believe that NBFCs with superior capital adequacy, better margins, frugal cost
management, prudent risk management and those incorporating above four key cornerstones in
their business models will continue to deliver sustainable growth in the foreseeable
future.
5. Internal Control Systems and their Adequacy:
The Company has adequate systems of internal Controls commensurate with its size and
operations to ensure orderly and efficient conduct of business.
6. Financial Performance with respect to operational performance:
The Financial performance of the Company for the year 2022-23 is described in the
Directors Report under the head operations.
7. Material developments in Human Resources/Industrial Relations front, including the
number of people employed:
The Company has undertaken employees development initiatives, which have very positive
impact on the morale and team spirit of the employees. The company has continued to give
special attention to human resources and overall development.
8. Cautionary Statement:
Statement in this Management Discussion and Analysis Report, Describing the Companys
objectives, estimates and expectations may constitute Forward Looking Statements within
the meaning of applicable laws or regulations. Actual results might differ materially from
those either expressed or implied.
|
For and on behalf of the
Board of Directors |
|
Regency Fincorp Limited |
|
Sd/- |
Sd/- |
|
Gaurav Kumar |
Vishal Rai Sarin |
| Place : Zirakpur |
Managing Director |
Whole-Time Director |
| Date : 24th May, 2023 |
DIN: 06717452 |
DIN:08758350 |
+91-9892691696
