DOMESTIC & GLOBAL ECONOMY
Financial Year 2023 was a transformational year post the prolonged
impact of the COVID Pandemic. As per India Development Update, the World Bank has reported
that Indias economic growth continues to be resilient, despite showing some signs of
moderation. The country remains one of the fastest-growing economies in the world, with a
robust overall growth rate estimated to be 6.9 percent for the full fiscal year. During
the first three quarters of fiscal year 2022/23, the real GDP grew by 7.7 percent
year-on-year.
The growth was supported by strong investment activity, driven by the
governments capital expenditure (capex) push and buoyant private consumption,
especially among higher income earners. These factors have contributed to the positive
growth momentum experienced in India. While the Indian economy shows resilience, the World
Bank points out that there are still significant challenges posed by the global economic
environment. Despite this, Indias growth remains robust due to the countrys
strong investment and consumption dynamics.
From a Global Economy perspective the major challenges were due to
prolonged impact of pandemic in certain countries causing disruptions and slowing down
economic recovery, ongoing effect of Russia - Ukraine conflict causing geo-political
tensions, interest rate hikes, global stagflation, and employment challenges etc impeding
economic recovery.
Despite various challenges, Indias economy has performed well and
has the potential to maintain its growth trajectory, but challenges in the global economy
and domestic factors could impact its performance in the future. With a clear vision of
being a technology driven and knowledge based economy with strong public finance and
robust financial sector the country is expected to continue in its growth despite global
slowdown.
FOREX INDUSTRY
In the fiscal year 2023, the global economy witnessed a significant
recovery from the impacts of the pandemic, leading to a resurgence in both leisure and
business travel. This revival had a positive effect on Forex and crossborder remittance
requirements, resulting in healthy growth in these sectors.
With the return of consumer confidence and removal of travel
restrictions, people resumed their international travel plans. As a result, there was a
notable increase in foreign exchange demands as travellers sought foreign currencies &
forex cards for their trips. Additionally, the resurgence of international business
activities also led to a surge in cross-border remittances, facilitating global trade and
investment.
In the fiscal year 2023, outward remittances under the Liberalized
Remittance Scheme (LRS) witnessed an impressive 38% year-on-year growth, reaching a total
of USD 27.14 Billion, surpassing the previous years figure of USD 19.61 Billion in
FY 2021-22. However, during this period, the flow of funds for students pursuing studies
abroad experienced a reduction from USD 5.16 Billion to USD 3.42 Billion. This decline can
be attributed to the normalization of demand, as the pent-up demand that drove higher
figures in FY 2022 has now levelled off.
The 38% year-on-year increase in outward remittances indicates a
growing inclination towards international investments, overseas transactions, and
cross-border financial activities. The revival of leisure and business travel, coupled
with favourable economic conditions, played a significant role in driving this surge in
LRS remittances. Looking ahead, the positive trend in LRS remittances suggests a promising
future for cross-border transactions and holds the promise of growth in the students
segment.
OUTWARD REMITTANCE UNDER LIBERALISED REMITTANCE SCHEME
| Item - (Figures in USD Million) |
2022-23 |
2021-22 |
2020-21 |
| Outward Remittances under the LRS |
27140.65 |
19,610.77 |
12,684.42 |
| Deposit |
1011.07 |
830.05 |
680.37 |
| Purchase of immovable property |
188.73 |
112.90 |
62.75 |
| Investment in equity/debt |
1256.15 |
746.57 |
471.80 |
| Gift |
3005.27 |
2,336.29 |
1,586.24 |
| Donations |
12.78 |
16.55 |
12.59 |
| Travel |
13662.15 |
6,909.04 |
3,239.67 |
| Maintenance of close relatives |
4174.06 |
3,302.37 |
2,680.10 |
| Medical Treatment |
55.74 |
37.79 |
29.75 |
| Item - (Figures in USD Million) |
2022-23 |
2021-22 |
2020-21 |
| Studies Abroad |
3427.81 |
5,165.33 |
3,836.12 |
| Others |
346.89 |
153.88 |
85.03 |
(Source - RBI)
DIGITAL STRATEGY
In response to the dynamic business landscape and the changing needs of
customers, the company has embarked on a strategic journey of digital transformation and
has successfully developed multiple digital platforms and solutions catering to various
customer segments, emphasizing the importance of contactless digital solutions during the
pandemic.
To streamline Forex requirements for corporates, WSFx offer the Smart
Corporate Platform, enabling efficient management of their foreign exchange needs. For its
valued Agent Partners, the Smart Agent Platform facilitates lead management and order
processing for their customers. In addition, the company has launched WSFx Global Pay App,
a Forex and Remittance super app designed to provide retail customers with a seamless,
contactless experience. This app empowers users to order Forex Cards, Foreign Currencies,
and conduct cross-border remittances for diverse purposes, all while enjoying the
convenience of digital travel insurance services.
As part of our commitment to digital innovation, the recently launched
WSFx Global Pay Platform, a Forex Platform as a Service (FPaas) for Agent Partners is a
cutting-edge solution enabling them to directly offer digital Forex and remittance
solutions to their customers online, enhancing their service capabilities.
Aligned with the strategic focus on digital and cross-border payment
solutions, the company has rebranded itself as WSFx Global Pay Ltd. This change represents
WSFx dedication to empowering customers and businesses alike with transformative digital
solutions.
These digital platforms feature an easy-to-use Digital KYC Module,
ensuring smooth and contactless onboarding of customers. We have prioritized Trust,
Transparency, Convenience and Compliance at the core of these solutions, providing each
customer segment with an efficient and secure means to execute their Forex requirements.
Among the successful innovations, the WSFx Smart Currency Card (WSCC)
has emerged as a game-changer since its launch in July 2019. Specifically tailored for the
new-age, digitally-savvy global traveller, especially millennials and students, the WSCC
is a Multi-Currency Card and comes with 14 key international currencies and includes an
INR wallet with seamless fund transfers between foreign currency wallets and also allowing
users to convert unspent foreign currency back into INR effortlessly. Enabled with NFC
technology, the WSCC supports contactless transactions and boasts global acceptance at
over 31.4 million VISA merchant outlets. Its popularity is surging among international
travellers and is anticipated to be a major growth driver for the company.
WSFx remain committed to pioneering digital solutions that facilitate
international transactions and foster a world of convenience and efficiency and will
continue to push the boundaries of innovation to empower its customers in the digital age.
KEY CUSTOMER SEGMENTS & PERFORMANCE
WSFx Global Pay Ltd. focuses on the Corporate and Student segments as
key drivers of growth, along with prepaid cards and outward remittance products and has
established a rich network of education consultants and education loan providers who refer
their student base to utilize WSFx for remittance and forex services. The strategic launch
of the WSFx Global Pay app aims to reach a wider audience pan India and generate
significant value and reach.
Additionally, WSFx Global Pay Ltd. has successfully onboarded large
corporates to its Smart Corporate Platform. The digital proposition has proven to be a key
differentiator and a unique value-add for our corporate customers.
The forex business operates across the following customer segments:
Wholesale, Retail, Corporate, Student and Other Remittances. Here is a breakdown of the
distribution between these segments in terms of turnover and net revenue:
Wholesale: The Wholesale segment caters to dealings between
Authorised entities like Banks, AD2 & FFMCs besides Imports and exports of Foreign
Currency.
Retail: Retail segment focuses on individual customers, offering
them personalized forex services for their travel needs.
Corporate: The Corporate segment serves Small, Medium & Large
corporate clients, assisting them in managing their Business travel related forex
requirements this segment is a key focus area for WSFx and contributes to the forex
turnover and net revenue.
Student: Students travelling overseas for their education for a Key
customer segment with remittances & Forex for their University Fee payment and living
expenses. This segment plays a pivotal role in WSFx forex business, contributing
significantly to the overall turnover and net revenue.
Other Remittances: The Remittance segment consist Personal
remittances under LRS for Tours, immigration, VISA Fees, etc and contribute to the
companys turnover and revenue.
The overall distribution between the Companys Customer segments
with regard to the turnover and the net revenue are given asunder:
ZONE WISE PERFORMANCE OF FOREX BUSINESS
The forex business of WSFx Global Pay Ltd. thrives across different
zones, each making a distinct impact on the overall performance. The South zone stands out
as a key contributor, boasting both significant forex turnover and substantial net revenue
contribution. Additionally, the North and West zones also play pivotal roles, showcasing
substantial business volumes and contributing to our financial success.
Forex turnover of North at 29%, South zone at 40%, West at 26% and East
at 5%. Total contribution to net revenue by South is 35% followed by North at 34%, West at
27% and East at 4%.
The performance in each region reflects our dedication to providing
tailored solutions, meeting diverse customer demands, and solidifying the companys
position as a leading player in the forex industry.
INTERNAL CONTROL SYSTEM
At WSFx Global Pay Ltd., our unwavering commitment to being fully
compliant in all our business dealings drives continuous efforts to enhance our internal
systems and procedures, aligning them with the guidelines set by the Reserve Bank of India
(RBI). We have successfully cultivated a culture of compliance, making our internal
control systems a cornerstone of our operations.
Key Focus Areas
System Upgradation: We prioritize the ongoing upgradation of our
financial, operational, legal, and accounting control systems to meet the highest quality
standards. This commitment to improvement ensures that our processes remain efficient and
effective.
Enhancing Due Diligence: We place utmost importance on due
diligence to mitigate risks and ensure that our transactions are conducted with the
highest level of prudence and scrutiny.
Compliance Checks and Audits: Regular compliance checks and audits
are conducted to evaluate our adherence to internal policies and regulatory requirements.
These assessments provide valuable insights for further enhancements.
Training and Development: Continuous training and development
programs are conducted to equip our team members with the latest industry knowledge, AML
guidelines and best practices. This fosters a culture of continuous learning and
improvement within the organization.
Digital Platforms: As part of our digital transformation journey,
we have developed state-of-the-art digital platforms to facilitate seamless and secure
transactions. Our focus on digital solutions bolsters operational efficiency and enhances
customer experience.
Independent Audits and Reviews: Our internal audit function plays a
crucial role in our Internal Control System. To ensure impartiality, independent firms
appointed by the Company conduct internal audits. Additionally, we adhere to RBI
regulations, implementing concurrent audits as required. These rigorous audit processes
provide valuable insights into our control systems effectiveness and identify areas
for further improvement.
Audit Committee: A qualified and independent Audit Committee,
comprising a majority of Independent Directors, actively reviews internal audit reports
and assesses the adequacy of our internal controls. This ensures that our control systems
meet the required standards and are deemed satisfactory and acceptable.
WSFx Global Pay Ltd. takes pride in maintaining a robust Internal
Control System, prioritizing compliance and efficiency across all aspects of our
operations. Through continuous upgradation, due diligence, audits, training, and digital
initiatives, we strive to remain at the forefront of industry best practices, providing
our customers and stakeholders with a secure and reliable financial ecosystem.
Financial Performance:
The detailed discussion on the financial performance of WSFx Global Pay
Ltd. can be found in the Directors Report. As per Indian Accounting Standards
(Ind-AS) Segment Reporting criteria, there are no separate reportable segments.
Employee Relations:
At WSFx Global Pay Ltd., significant strides have been made in
attracting industry talent through various initiatives during the year. We are proud to
maintain cordial relations with our employees, fostering a positive and collaborative work
environment. To ensure our team members remain up-to-date with the latest industry
standards and best practices, we have implemented a robust training program. Our training
modules cover essential areas such as KYC / AML guidelines, soft skills, and operations
training, empowering our employees with the necessary skills to excel in their roles. As
of 31st March, 2023, WSFx Global Pay Ltd. employed a dedicated team of 233 professionals,
whose commitment and expertise contribute to our continued growth and success.
KEY FINANCIAL RATIOS
In accordance with the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended, the Company is required to provide details of
significant changes (Changes of 25% or more as compared to the immediately previous
financial year) in key sector-specific financial ratios.
The Company has identified the following ratios as key financial
ratios.
| Particulars |
FY 2023 |
FY 2022 |
| Operating profit ratio (%) |
4.01% |
-22.02% |
| Net profit margin ratio (%) |
2.53% |
-15.33% |
| Return on net worth (%) |
4.49% |
-16.09% |
| Interest coverage ratio (times) |
4.11 |
(0.53) |
| Current ratio (times) |
1.14 |
1.41 |
| Debt equity ratio (times) |
0.52 |
0.48 |
Profitability ratios have improved because of improvement in business
as compared to previous year.
Current ratio has reduced because of reclassification of Investment in
Fixed Deposit as Non -Current Asset.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis
covered in this report may be forward looking. However, actual results may differ
materially from those expressed in the statement due to various factors including changes
in government regulations, exchange rates, tax laws, economic and political developments
etc.
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