Wallfort Financial Services Ltd Management Discussions

During Financial Year 2024, the Indian economy grew at a robust rate upwards of 7.5%. This has come as an eye opener to many advanced economies in the world which are undergoing a slowdown due to variety of internal and external factors. Not long ago, a slowdown in the global economy would have had considerable cascading effects on the Indian economy, however, this time was different. This outperformance can be largely attributed to the slew of reforms made by the government over the last five years, especially in improving the quality of banking and financial system and in its push for digital inclusion to ensure higher liquidity in the financial system.

The focus on building new capabilities, enhancing capacities in the manufacturing sector and localisation of components industry is also leading to decreasing dependency on the global supply chains, more jobs and improving margin profile of OEMs. A higher digital inclusion has also led to higher revenue collections by the government, which is being used productively for bettering the countrys infrastructure rather than just paying subsidies. With most reforms being targeted towards bettering of countrys systemic architecture, they will provide structural tailwinds to the country that will set it for decades of sustainable growth. The quality of Indian reforms and its savvy in dealing with external environment has clearly been reflected from the performance of its economy.

As per the charts extracted from the WEF World Economic Outlook Report of April 2024, the charts clearly indicate Emerging Market growth rate to be considerably higher than the Adcanced Economies. Within major Emerging Market economies, India holds the top positon of over 6.5% growth rate. The Inflation Outlook chart on the left also indicates a cooling forcast of inflation in the coming years which should achive stability by 2026. Even as the world continues to deal with the inflation shock, Indias resilience in managing its inflation and maitaining a strong growth outlook is indicative of its economic and financial stability. The ripening demographic dividend which is leading to more people entering the workforce should lead to improvement in per-capita incomes, higher tax collections and more consumption. With all this in perspective, the conditions seem right for India to grow sustainably in the medium to long term.

With respect to its stock markets, Indias economic outperformance relative to its global peers led to a strong performance in its benchmark indices. The Nifty50 & SENSEX ended this financial year on a positive note owing to a higher GDP growth, improved corporate earnings robust growth outlook and cooling of inflation. The BSE SENSEX increased by around 24.5 per cent in FY 2024 while the broader Nifty50 index of the National Stock Exchange (NSE) increased by around 28.1 per cent. While the performance for FY 2024 has been great, the markets are expected to moderate in FY 2025 as the corporate earnings catch up to the valuations set forth by the capital markets.

OPPORTUNITY

l Positive long-term economic outlook will lead to opportunity for financial services

l Increased digitalisation allowing AMCs to expand services and improve penetration

l Growing popularity of SIPs, with large-scale campaigns improving outreach.

l Regulatory reforms would aid greater participation by all class of investors

l Corporates looking at consolidation / acquisitions / restructuring opens out opportunities for the corporate advisory business

We are very pleased to inform you that your company is now servicing 99 Institutional Clients and look forward to become one of the premier brokerage houses for Institutions/ Corporates /Banks and FIIs in years to come. With a positive outlook on DII and Mutual Funds Flows we look forward to generating more business and servicing even more institutional clients.

THREAT

l Short term economic slowdown impacting investor sentiments and business activities l Credit risk, interest rate risk, liquidity risk and operational risks are the major risks the company faces. l? High employee turnover and attraction of fresh talent continues to be a challenge. l? Regulatory reforms would aid greater participation by all class of investors l? Increased intensity of competition from local and global player

STRENGTH

Strong Brand Name

We are enhancing our service capabilities, providing good quality research and efficient market information to our clients. With a strong brand name Wallfort is a well-established brand among institutional investors in India and Broking Community. Wallfort believes that its brand is associated with high quality research and advice as well as corporate values like integrity and excellence. The company intends to leverage its brand to grow its businesses, build relationships and attract and retain talented individuals.

Experienced Top Management

The top management team comprises qualified and experienced professionals, with a successful track record is in charge of the corporations goals, policies, and procedures.

Strong Risk Management

Strong Risk Management Risk exposure is monitored and controlled through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems. Risk management department analyses this data in conjunction with the companys risk management policies and takes appropriate action where necessary to minimize risk.

RISK AND CONCERN

l Impact of markets on our revenues and investments, sustainability of the business across cycles sharp movements in prevailing interest rates in the market. l Risk that a client will fail to deliver as per the terms of a contract with us or another party at the time of settlement. l Risk due to uncertainty of a counterpartys ability to meet its financial obligations to us. l Inability to conduct business and service clients in the event of a contingency such as natural calamity, breakdown of infrastructure, etc.

OUTLOOK

While we remain highly optimistic on Indias growth story, our views on its capital markets is cautiously optimistic. The shift in consumer saving patterns away from term deposits and into capital markets have led to substantial inflows into equities driving some segments of the market into a bubble territory. At current juncture, it is the economy running to catch up to the valuations set by its capital markets. With this in perspective, we believe the performance of indices will be moderated for the time being as the earnings catch up to the valuations.

While the election results have provided stability in the markets in the near term, there still exist certain internal risks such as slower pace of job creation and inflation, and external risks such as wars, inflation, recession and population ageing which threaten the world with civil and social unrest. In the near term, the cooling of inflation and a bounce back in the global economy will highly depend on the cooling of geopolitical situation between Russia-Ukraine and Israel-Palestine.

As for stock markets, the key indexes SENSEX/NIFTY50 have given fair returns during FY 2024. However, its performance continuity will depend on how quickly the advanced economies are able to come back out of the current phase of slowdown and if the Government of India is able to continue its slew of reforms and create jobs in its third term too.

RISK MITIGATION

Although the Company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

In todays challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are changing regulations, competition, business risk, technology obsolescence, retention of talent, and expansion of facilities. Business risk, inter alia, further includes financial risk, political risk, fidelity risk, and legal risk. As a matter of policy, these risks are assessed and steps are taken to mitigate the same.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has appointed M/s. Rashmi Jain & Associates., Chartered Accountants as the Internal Auditors as mandated under Section 138 of the Companies Act, 2013 who examine and ensure that internal checks and control procedures are adequate. They also ensure proper accounting, records authorization, control of operations and compliance with law.

An appropriate and adequate system of internal controls exist in your Company to ensure that all assets are safeguarded and protected against loss or from misuse or disposition, and that the transactions are authorized, recorded and reported suitably. Internal control systems ensure effectiveness of operations, accuracy and promptness of financial reporting and observance with laws & regulations. The internal control is supplemented on an ongoing basis by an extensive internal audit which is conducted each year by and independent audit firm.

The internal audit report along with management comments thereon are reviewed by the Audit Committee of the Board comprising of independent and non-executive Directors on a regular basis. Implementation of the suggestions is also monitored by the Audit Committee. The internal controls are designed to ensure that the financial and other records of the Company are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

FINANCIAL PERFORMANCE

Particulars	For the year ended 31 March, 2024	For the year ended 31 March, 2023
Revenue from Operations	5,08,062.24	1,99,114.24
Other Income	953.22	1233.40
Total Income	5,09,015.45	2,00,346.65
Finance Cost	1,666.34	1,797.62
Employees Benefit Expense	39,354.33	33,269.92
Depreciation and Amortization Expense	3,776.14	2,929.83
Other Expense	99,976.00	1,01,723.41
Total Expense	1,44,772.81	1,39,720.78
Profit Before Tax	3,64,242.64	60,625.88
Current Tax	50,287.22	16,131.49
Defered Tax Charge/(Credit)	17,839.28	-5,955.24
Short/(Excess) Provision for tax for earlier years	-	-
Total Tax Expense	68,126.50	10,176.25
Profit After Tax	2,96,116.14	50,449.63

Profit After Tax 2,96,116.14 50,449.63

a) INCOME

The Companys revenue from operations stood at INR 50.81 crore compared to INR 19.91 crore in the previous year. Other income stood at INR 9.53 lacs compared to INR 12.33 lacs in the previous year.

b) EXPENDITURE

Total expenditure for the year increased by 3.62% to INR 14.48 crore, as against INR 13.97 crore in the previous year. Employee benefit expenses for the year were INR 3.94 crore as against INR 3.33 crore in the previous year an increase of 18.29%.

Depreciation for the year increased to INR 37.76 lacs as against INR 29.30 lacs in the previous year a increase of 28.89%. Other expenses for the year were INR 9.99 crore as against INR 10.17 crore in the previous year - a decrease of 1.72%.

c) PROFIT AFTER TAX

The Profit for the year stood at INR 29.61 crore as against INR 5.05 crore in the previous year - an increase of 486.94%.

DEVELOPMENTS IN HUMAN RESOURCES

It is your Companys belief that people are at the heart of corporate and constitute the primary source of sustainable competitive advantage. The trust of your Companys human resource development efforts, therefore, is to create a responsive and market driven organization. Your Company continues its focus on strengthening competitiveness in its business. Your directors look forward to the future with confidence. The Company has followed a conscious policy of providing training to management staff through in-house and external programs for upgrading personal and technical skills in relevant areas of functional disciplines.

SIGNIFICANT CHNAGES IN KEY FINANCIAL RATIOS (25% or MORE)

Additional regulatory requirement under (WB) (xvi) of Division III of Schedule III amendment disclosure of ratios, is not applicable to company as it is in broking business and not an NBFC registered under section 45-IA of Reserve Bank of India Act, 1934.

CHANGES IN RETURN ON NETWORTH

Return on Networth	2023-24	2022-2023
	19.86%	4.22%

By Order of the Board

	For Wallfort Financial Services Limited
	Sd/-
	Ashok Bharadia
Date: 13/08/2024	Chairman & Managing Director
Place: Mumbai	(DIN 00407830)