Safa Systems & Technologies Ltd Management Discussions

I. Overview:

The objective of this report is to convey the Managements perspective on the external environment and trading and distribution of mobile phones, electronic gadgets as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in tire Company during the FY 2022-23 This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Integrated Report. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (SEBI) from time to time.

Industry Structure and Developments:

Global Economy:

The global economy continues to gradually recover from the pandemic.

The COVID-19 health crisis is officially over, and supply-chain disruptions have returned to pre-pandemic levels. Economic activity in the first quarter of the year proved resilient, despite the challenging environment, amid surprisingly strong labor markets. Energy and food prices have come down sharply from their war-induced peaks, allowing global inflation pressures to ease faster than expected. And financial instability following the March banking turmoil remains contained thanks to forceful action by the US and Swiss authorities.

Under our baseline forecast growth will slow from last years 3.5 percent to 3 percent this year and next, a 0.2 percentage points upgrade for 2023 from our April projections. Global inflation is projected to decline from 8.7 percent last year to 6.8 percent this year, a 0.2 percentage point downward revision, and 5.2 percent in 2024.

The slowdown is concentrated in advanced economies, where growth will fall from 2.7 percent in 2022 to 1.5 percent this year and remain subdued at 1.4 percent next year. The euro area, still reeling from last years sharp spike in gas prices caused by the war, is set to decelerate sharply.

By contrast, growth in emerging markets and developing economies is still expected to pickup with year-on-year growth accelerating from 3.1 percent in 2022 to 4.1 percent this year and next. (The corresponding annual growth, shown on the chart below, is 4 percent for 2022 and 2013 and 4.1% for 2024.)

Limited

Indian Economy:

India may well be on track to becoming the third largest economy in the world in the coming years, but a number of factors including the performance of other countries, skilling of our workforce as well as a sustained revival in domestic consumption demand would play a key role in achieving this. The Indian economy, however, has the potential to grow by a robust 6.5-7% per annum, according to economists.

India is very much on target to becoming the third largest economy based on the IMFs projections as well as domestic estimates. Our real rate of investment is about 33%, the current account deficit is lowering and our demographic dividend is coming into play," said DK Srivastava, Chief Policy Adviser, EY, while noting that India has also managed to meet the challenges thrown up by the Russian-Ukraine war that has led to supply side bottlenecks for many countries.

Technology Industry:

Economic headwinds seem to be gathering for business in general, and for the technology industry specifically. But there are many regulatory incentives that may spur innovation and growth in 2023 and beyond. To survive and thrive, technology companies should rededicate their efforts to improving supply operations, modernizing infrastructure, and leveraging growth opportunities.

Tire technology industry has not just weathered the pandemic-driven disruptions of the past few years; it has flourished. The crisis thrust many organizations into the future, accelerating digital transformation and changing work models dramatically. But in 2023, the tech industry will likely continue to grapple with issues around supply chains, workforce, and innovation— now exacerbated by considerable macroeconomic and global uncertainties:

Risks, Concerns and Threats:

With the financial reforms likely to add impetus to industry growth and likelihood of stable political environment, the domestic market should pose better opportunities in terms of volume growth.

Achieving sustainable growth can also present challenges. The skills, expertise, the supply chain to develop products, are major threats for sustaining in the long term.

As companies seek business solutions to address remote work, social distancing and the need for in-store alternatives, the demand for developer and engineering talent is likely to increase. Retaining top talent will be essential.

Expect relatively high impact on the smartphone industry because of its labor-intensive supply chain. Smartphone production is projected to decline by 12% YoY in 1Q20; server revenue is projected to decline by 16% YoY in 1Q20.

Internal Control Systems and Their Adequacy

The Company strongly believes that a robust internal control mechanism is a prerequisite to ensure that an organization functions ethically, complies with all legal and regulatory requirements and observes the generally accepted principles of good corporate governance. To enable this, the Company has established a strong internal control system for the Company, which is comprised of policies, guidelines and procedures to ensure the orderly and efficient financial and business conduct.

Tire Company has adopted strong internal control systems backed by constant reviews and up-gradation. Internal Audit, Statutory Audit by external agencies and the Audit Committee, look into the internal control aspects and further advice on the corrective measures as and when required.

Human Resources Development/Industrial Relations

Human resources are valuable assets for any organization. The employees of the Company have extended a very productive cooperation in the efforts of the management to carrying the Company to greater heights. The Company is giving emphasis to upgrade the skills of its human resources and continuous training down the line is a normal feature in tire Company to upgrade the skills and knowledge of the employees of tire Company

Outlook:

Tire Board of Directors and the Management of the Company are pursuing various available options to rehabilitate the Company and considering future business plans for the Company.

Cautionary Statement:

The statements in this section describe the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of tire applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to Lhe Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other incidental factors.

Date: 21/08/2023	For & on behalf of the Board
Place: Emakulam	Safa Systems & Technologies Limited

 

Sd/-
Faizal Bavaraparambil Abdul Khader	Sd/-
Managing Director	Sruthi Muhammed Ali
	Whole-time Director
DIN: 07729191
	DIN: 09237016