Comfort Commotrade Ltd Management Discussions.


Global economies witnessed a healthy 2.8% CAGR over 2015- 2019 in the pre-pandemic period led by China, United States and India primarily. The world is becoming more and more responsible towards achieving sustainable growth, with technology playing a pivotal role. The year 2020 started on a very challenging note, as the rapid spread of Covid-19 risked overwhelming healthcare in various countries and required implementation of strict social distancing measures. However, such measures brought the world to a virtual standstill and hurt the global economy substantially. In order to contain the fallout from the Covid pandemic, Central banks and Governments announced monetary and fiscal measures bigger than the ones announced during the peak of the global financial crisis. Due to the counter recessionary measures announced by central banks and Governments globally, growth contraction in the USA (-3.5 Percent), Eurozone (-6.6 Percent) and moderate growth in China (2.3 Percent), was far better than that forecasted earlier. After the initial shock, research and pharmaceutical companies backed by Governments got into the act of developing vaccines on an unprecedented level. Russia was amongst the first countries to introduce a vaccine followed by many other countries including USA, China, UK and India. Parallelly, significant investments were made to increase vaccine manufacturing capacity, led by India. Today there are more than 200 vaccines under trials and almost 1.8 billion people globally have been vaccinated by either their first or dual dose. The IMF in its latest World Economic Outlook in April 2021 has upgraded their global GDP growth projections to 6.0 Percent and 4.4 Percent for 2021 and 2022 respectively as compared to their earlier forecast of 5.5 Percent and 4.2 Percent in January 2021. The upwards revision in GDP growth estimates is a result of additional fiscal support in a few large economies and expectations of a vaccine powered normalisation in the second half of 2021.


Over 2015–20, there have been structural changes in the economy with inflation rate largely remaining in the RBIs comfort zone of 2-6 Percent which resulted in decline in interest rates. The Indian economy was on course to become the third largest economy globally by 2030.

However, the onset of the pandemic in Q4 FY 2019-20 resulted in the Government announcing the first ever national lockdown lasting more than eight weeks. The ensuing disruption led to a record GDP contraction of 24.4 Percent Q1 FY 2020-21. However, this lockdown helped contain the spread of the virus and aided the economy return to its growth path by Q3 FY 2020-21 The Reserve Bank of India (RBI) intervened by providing monetary stimulus through its various liquidity programmes, slashing interest rates, and allowing loan moratorium facilities, among others. The Government initiated several measures to minimise the impact of the pandemic, protect the lives of the country’s citizens and revive the economy. The Government also announced a comprehensive COVID relief package of 20 trillion in May 2020 as a part of Atmanirbhar Bharat Abhiyaan which included a mix of cash spending, liquidity support to agriculture, MSMEs and other critical sectors, along with various structural reforms across sectors. The gradual opening of economy post June, with targeted and restrictive lockdowns, led to gradual recovery in the following months, driven initially by pent up demand. Improvement in the Covid situation from September allowed the Government to open up significant portion of the economy in Q3 FY 2020-21 which along with festive demand provided further impetus to the economy. In order to support the recovery the Government also announced more stimulus measures of 2.65 trillion under Atmanirbhar Bharat 2.0 and 3.0 which included additional support for agriculture and housing sector among others. In order to incentivise localisation, a Production Linked Incentive (PLI) scheme covering 10 sectors was launched with an outlay of 1.46 trillion under the Atmanirbhar Bharat 3.0 package. The PLI scheme was later expanded to cover 13 sectors with an outlay of 2 trillion in the Union Budget 2021-22.

High frequency indicators like PMI, IIP, CPI and GST collection, continued to point to a strong recovery in the second half of FY 2020-21. GST collection have witnessed strong growth since October 2020 with collections in H2 FY 2020-21 being higher than average of FY 2019-20, and touching a new high of 1.24 trillion in March 2021. Though CPI inflation remained above the RBIs comfort zone of 6.0 Percent in the first half of the year, it eased off in the second half and fell to 4.1 Percent in January 2021, before rising marginally to 5.5 Percent in March 2021.

(Source: RBI)

The economy recovered strongly from a contraction of 24.4 Percent in June 2020 and registered a positive growth of 1.6 Percent in March 2021 (Source: MOSPI). Indian equities too recovered quickly from the pandemic lows and continued to rally through the year in line with global markets. Foreign Institutional Investors (FIIs) continued to remain bullish on the Indian markets with investments of over 2.75 trillion ($37 billion) in fiscal 2020-21, highest in the last two decades, as per data from National Securities Depository Limited. The Union Budget 2021-22 reflected the Government’s commitment to push India towards a higher growth trajectory. The Government presented a bold budget which focused on reviving growth through deficit spending. Despite the slippage in fiscal deficit targets for FY 2020-21 and FY 2021-22, the Government increased allocation to capital expenditure. Capital expenditure for FY 2021-22 is budgeted to grow at 26.2 Percent on top of a 30.8 Percent growth in FY 2020-21 which should help revive growth given its high-multiplier effect. The Government is targeting a significant increase in asset monetisation in FY 2021-22 to 1.75 trillion from 320 billion in FY 2020-21, which will not only help the Government to fund its aggressive spending plans but also encourage newer players to enter the market.

At the onset of new financial year, the country is witnessing second wave of the pandemic with new restrictions. However with most states imposing targeted and selective lockdowns it is expected that the worst of the second Covid wave will be behind us very soon with the situation normalising by the second quarter of FY 2021-22. Moreover, India is currently in the middle of the world’s largest vaccination drive which should help control the spread of the virus in the medium term. Given that the degree of disruption has been lesser this time around most economists and rating agencies expect India to grow at 9-11 Percent in FY 2021-22 despite the adverse impact of the second Covid wave.


Though global equity markets witnessed a significant fall in the initial months of 2020, they recovered quickly with the S&P 500 hitting an all-time high by August 2020. The swift recovery can be attributed to the synchronised efforts of Governments and central banks globally. While Governments announced trillions of dollars in fiscal stimulus central banks responded by providing record fiscal stimulus and slashing interest rates to near zero levels. A favourable outcome of the US Presidential election in November 2020 and commencement of mass vaccination in developed economies in early 2021, drove equity inflows into Asian markets to record highs. Among the advanced economies (AEs), US equity markets continued to scale new highs in the second half of the financial year despite some volatility in early 2021, due to a surge in US 10-year bond yields. The S&P 500 and Dow Jones Industrial Average indices closed FY 2020-21 with gains of 53.7 Percent and 50.5 Percent respectively. European markets too witnessed strong rally in the second half of the year with the DAX scaling new all-time highs by March 2021 while the CAC too was also trading near its all-time highs. The DAX and the CAC also closed FY 2020-21 with strong gains of 51.1 Percent and 38.0 Percent respectively. The Nikkei crossed 30,000 in February 2021 for the first time since 1990 and surged by 54.3 Percent during 2020-21. Stock markets in emerging market economies (EMEs) continued to rally through end of 2020 and early 2021, mirroring those in the US and other AEs and supported by burgeoning foreign portfolio flows. In 2020-21 as a whole, MSCI World Index moved up by 51.8 Percent during 2020-21.

(Source: Market Pulse, NSE, RBI Bulletin April 2021).

Indian Capital Market

The Indian capital market also witnessed a phenomenal rebound in the current fiscal, factoring in quick resumption of economic activity and future growth prospects. Like its global peers, India too witnessed a strong rebound from the pandemic lows with the key indices reaching an all-time high by the fourth quarter on the back of continued and strong recovery in economic activities in the second half of FY 2020-21 and record FPI flows. India’s market capitalisation to GDP ratio now stands at approximately 105 Percent for the first time in a decade in March 2021 up from approximately 56 Percent in March 2020. The rally in Indian equities was driven by record FPI flows during the year which more than offset the outflows by domestic institutions. Net Foreign Portfolio Investors (FPIs) buying in Indian equities stood at a record high of US$ 37.1 billion in FY 2020-21, which was ~14 times higher than that of US$ 2.6 billion in FY 2019-20. Unlike FPIs, Domestic Institutional Investors (DIIs) were sellers of Indian equities in FY 2020-21. After a significant rise in FY 2019-20, DIIs net investment remained muted over the first half of FY 2020-21, followed by a continuous rise in net sales to end the fiscal year at an all-time low of 1.4 trillion net investment. This was due to continued redemption pressure on Equity Mutual Funds. (Source: Market Pulse, NSE). Fund mobilisation via the primary market route was the highest ever in FY 2020-21. Funds raised through Initial Public Offerings (IPOs), Followon Public Offerings (FPOs) and Offer for Sale (OFS) stood at a record 747.1 billion in FY 2020- 21 as compared to 376.8 billion raised in FY 2019-20. The exchange turnover remained subdued in the beginning of FY 2020-21 amid weak global and domestic cues, coupled with increasing COVID-19 concerns. Turnover was further impacted after the Securities and Exchange Board of India (SEBI) revised market-wide position limit in March 2020, in a bid to reduce market risks. Thereafter, there has been a steady increase in exchange turnover. Market traction has been supported by strong FPI investment inflows, optimism related to a recovery after the graded reopening of the economy, and steadily rising retail investor momentum. This was supported by the periodic interventions both by the Central Government and RBI to support revival of the economy. Investors applauded the Union Budget 2021-22 that reflected the Government’s intent of prioritising growth and bringing about transparency in finances. In addition better than expected corporate earnings also kept investor sentiments buoyant. Technology led brokerages with a strong presence in digital domain witnessed a sharp increase in their market share during the period. During FY 2020-21, NSE’s Cash segment turnover recorded a robust growth over the months largely led by surplus liquidity, thanks to policy easing measures adopted by global Central banks. It recorded 71.1 Percent increase in Cash market turnover in FY 2020-21 as compared to the previous year. Retail cash segment’s ADTO* increased by 74.2 Percent YoY to 371.2 billion in FY 2020-21 as compared to 213.1 billion in FY 2019-20. While, retail F&O ADTO grew by 75.2% Percent to 11.6 trillion in FY 2020-21 against 6.6 trillion in FY 2019-20. Retail commodity ADTO de-grew by 3.5 Percent to 213.0 billion in FY 2020-21 against 220.7 billion in FY 2019-20. Investors witnessed Nifty 50 swing from lows of 7,511 in March 2020 to an all-time high of 15,431 in less than a year. The Nifty surged by 70.9 Percent as on 31 March, 2021, the best since FY 2009-10, while the Sensex gained 68.0 Percent - highest in a decade. The aggregate revenue for Indian broking industry grew by 8 Percent to ~ 210 billion in FY 2019-20 as against the previous year. The industry is expected to hit 275 - 285 billion in aggregate revenues during FY 2020- 21, growing at 30-35 Percent (Source: ICRA). This is in stark contrast to 7.3 Percent decline of India’s GDP during FY 2020- 21, as per the latest Government data.


With rapid shift in clients’ behaviour towards consuming services digitally, there has been a surge in digital mode of making investments. The new breed of investors entering the stock market are tech-savvy and seeks quality user interface and user experience. The industry witnessed advent of digital brokers, who gained significant market share by leveraging their digital-first approach and creating a rich user experience. Global Capital Markets experienced a revolution driven by technology and radical change in market structure, which was led by younger and tech savvy clients. Addressing this rising need for financial security from these newer set of clients, facilitated the emergence of digital broking firms, who offered their services at competitive fees. Developed economies such as US, witnessed emerging trend of flat fee plan across the industry in early 2019, after introducing zero commissions on individual stocks and ETFs. This led to many players in the broking business to move to zero trading commissions. Incumbents also streamlined processes with the help of emerging technologies such as artificial intelligence, machine learning and blockchain, among others. India too experienced similar shift in the broking industry with digital brokers disrupting the equity broking space and gained significant traction. These brokers offer services at competitively priced fixed brokerage fees, irrespective of size of order and provide such services via their digital platform. Amongst these flat fee brokers, some offer a complete bouquet of value added services at similar competitive prices. Until recently the Indian stock broking industry was largely dominated by traditional players who followed the yield based fees model. This was backed by a branch led model of physical infrastructure, large feet on street bandwidth and convenience of three-in-one accounts. This model had its own inherent limitations thereby restricting the growth of the industry.

Currently, India is one of the youngest nations in the world, with a median age of 28 years. India’s demographic dividend is set to rise with the proportion of population in the working agegroup of 15-64 years expected to rise from 64.1 Percent in 2010 to 68.5 Percent by 2035. Additionally, India’s millennial population of 333 million and Gen Z population of 375 million provides huge growth opportunity. This clearly highlights that contrary to other G3 and Asian countries, India’s working population has not peaked and will continue to grow for the next three decades.

Increase in life expectancy and rising aspirations of the young working population will lead to more investments in the capital markets

Underpenetrated Indian Market

As on March 2021, India’s Demat account penetration as a proportion of the total population stands at ~4.1 Percent. This number is quite low as compared to developed economies of US and China and provides ample scope for further additions. With ~70 Percent of the population residing in Tier II, III and beyond cities, India is at a cusp of a major growth opportunity for a sustained period of time. This will be largely tapped by digital players who are designed to benefit from the digital highways created as they enter newer markets thus deepen penetration.

Industry Regulations

The market regulators, from time to time have introduced new regulations in order to protect the interest of retail investors. During the last financial year, a number of new regulations came into effect which will have a far reaching positive impact on the market especially from the point of view of retail investors. Alternative Risk Management Framework from Multi Commodity Exchange of India Limited (MCX) Upfront margin for cash segment Pledge-Repledge Peak margin for intraday trading In the light of the unprecedented event of negative crude oil price in April 2020, SEBI prescribed an Alternative Risk Management Framework that would be applicable in case of near zero and/or negative price for any underlying commodity/ futures. From September 2020, SEBI mandated its trading and clearing members to mandatorily collect and report upfront margins so collected from clients’ basis the predefined margin fulfilment criteria for various stocks, for trades executed in the cash segment. SEBI, also introduced a new pledge-repledge-unpledge mechanism for stocks to safeguard investors from brokers misusing client securities entrusted to them. With this regulation, the fully paid stocks now remain in the clients Demat account with an OTP based pledging process to enable collateralise the position / provide margin trade funding (MTF), with the broker / exchange. The peak margin regulations being implemented in four phases from December 2020 onwards envisage curtailing the leverage exposure offered and consumed by clients to a maximum of 4x to 1x over the four phases of implementation. All the above regulations are in the best interest of the retail investors and will further help expand the market.


Retail participation and inflows into the equity market are heavily influenced by market performance and sentiments; any downturn or volatility could make them move away from equity markets and push towards less riskier assets Political instability in India or anywhere in the world, harsh protectionist measures by larger economies, or faster than-required tightening of monetary policy could impact growth and global trade


Indian equities entered a bull market environment in FY2021 after first dipping into bear market towards the end of FY2020 on COVID-19 fears. In one of the most spectacular rallies since FY2010 post the GFC (Global Financial Crisis), Indian benchmark index (NIFTY50) rallied 71% during FY2021. Unlike the pre-COVID period, the rally was broadbased with small and midcaps outperforming headline indices like the NIFTY50. Also there were signs of a return to value investing from growth investing after several years of underperformance by the former class of stocks. Bullish sentiment for Indian equities was further fueled by the expansionary FY2022 Union Budget. It provided for a counter-cyclical fiscal policy with focus on reviving growth, while ensuring adequate resources for tackling the pandemic, by expanding the fiscal deficit to a higher than expected level of 9.5% for FY2021 and 6.8% for FY2022.


The Company was originally incorporated in Mumbai as "Comfort Commotrade Private Limited" on November 5, 2007 under the Companies Act, 1956 vide Certificate of Incorporation issued by the Registrar of Companies, Maharashtra, Mumbai. Our Company was subsequently converted into Public Limited Company and consequently the name was changed to "Comfort Commotrade Limited" vide Fresh Certificate of Incorporation dated May 21, 2012 issued by the Registrar of Companies, Maharashtra, Mumbai. Further the Equity Shares of the Company were initially listed on SME Platform of BSE Limited. However, post migration, the Equity Shares are now listed on BSE Main Board vide BSE notice dated April 26, 2016. The Company has altered its Main Object at the ExtraOrdinary General Meeting held on March 24, 2021. The Company is currently engaged in the business of Commodity Broking and is a Member of MCX and NCDEX. It offers trading in many commodities such as bullion (gold, silver), energy (crude oil, natural gas) metals, food grains (rice, maize), spices, oil and oil seeds and others.

Subsidiary Companies

The Company has one Wholly Owned Subsidiary Companies viz. Anjali Trade Link FZE in U.A.E. incorporated on January 28, 2014.



Strong Annual EPS Growth

Rising ROE, Momentum and Earnings Yield

Company with Low Debt

Experienced Promoters and Management Team

Cordial relationships with Customers

Young enthusiastic Directors


Limited geographical coverage

Dependent upon growth in Commodity Broking Industry

Dependence upon the existing customers for the business


Covid has accelerated this growth of investors coming to the market through digital platform.

Establishment of market in neighboring states

Despite the short-term impact of COVID-19, India is expected to be a relatively high growth economy in the medium to longer term and this augurs well for the capital markets.

Potential to increase the business in the existing facility

The young working population is expected to increasingly channel a higher share of their savings into financial assets.


Industry is prone to change in Government policies

There are no entry barriers in our industry which puts us to the threat of competition from new entrants

As the Company’s performance is dependent on the health of capital markets, it faces the risk of a downturn in the event of slowing economic growth and/or worsening macro-economic environment. Any events that impact the broader economy, such as rising crude oil prices, depreciating currency, worsening current account deficit, rising inflation, a bad monsoon, slowdown in corporate earnings, rising NPAs, slowdown in foreign investment inflows, etc. impact the capital market, thereby posing risks to the Company. Other challenges that may drive away the DIIs include rising real estate and gold prices, which may provide other attractive investment options.

The Company faces significant competition from other businesses seeking to attract its customers’/clients’ financial assets. In particular, it competes with other Indian and foreign brokerage houses, discount brokerage companies, investment banks, public and private sector commercial banks and asset managers, among others, operating in the markets in which it is present. The Company competes on the basis of a number of factors, including execution, depth of product and service offerings, innovation, reputation, price and convenience.


As on March 31, 2021, the Company had a total head count of 12 employees. The Directors wish to place on record their appreciation and acknowledgment of the efforts and dedication and contributions made by employees at all levels during the year under review. The Company continues to focus on attracting new talent & help them to acquire new skills, explore new roles and realize their potential.


At Standalone Level, therevenue from operations has increased to 7,891.12 Lakhs for the F.Y. as compared to 3,520.81 Lakhs in the Previous Year. The Net Profit for the F.Y. increased to 1,193.71 Lakhs against 171.70 lakhs reported in the Previous Year.

The Consolidated revenue from operations for the F.Y. has increased to 7,923.50 Lakhs as compared to 3,597.27 Lakhs in the Previous Year. The Net Profit for the F.Y. has increased to 1,182.38 Lakhs as against 160.83 Lakhs in the Previous Year.

Details of Significant changes, if any, in the Key Financial Ratios of the Company are as follows:

key Ratios



Standalone Consolidated Standalone Consolidated
Debt/Equity Ratio 0.37 0.37 0.02 0.02
Return on Net worth 0.45 0.40 0.12 0.09
Interest Coverage Ratio 44.63 44.27 44.66 42.82
Net profit Ratio 0.15 0.15 0.05 0.04
Return on Capital Employed 0.54 0.48 0.18 0.14
EPS 11.91 11.80 1.71 1.61


The Board has put in place various internal controls to be followed by your Company to ensure that the internal control mechanisms are adequate and are effective. The Board has automated most of the key areas of operations and processes, to minimize human intervention. The design, implementation and maintenance of adequate internal financial controls are such that they operate effectively and ensure accuracy and completeness of the accounting records.

The operational processes are adequately documented with comprehensive and well defined Standard Operating Procedures. This includes the financial controls in the form of maker and checker being with separate individuals. The Board, with a view to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for the procurement of services, materials, fixed assets, monitoring income streams, investments and financial accounting.

Internal control measures includes adherence to systemic controls, information security controls, as well as, role based/ need based access controls. Further, the existing systems and controls are periodically reviewed for change management in the situations of introduction of new processes / change in processes, change in the systems, change in personnel handling the activities and other related activities.

The internal financial controls with reference to financial statements as designed and implemented by the Company are adequate. The internal financial control procedure adopted by the Company is adequate for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information

The Audit Committee of the Company reviews and recommends the unaudited quarterly financial statements and the annual audited financial statements of your Company to the Board for approval. Your Company has appointed a firm of chartered accountants to conduct independent financial and operational internal audit in accordance with the scope as defined by the Audit Committee. The reports from the Internal Auditors are reviewed by the Audit Committee on periodic basis and the Internal Auditor have been advised to issue flash reports, if required. Further, all related party transactions are placed before the Audit Committee and are approved / ratified by it after deliberations.


Pursuant to section 134 (3) (n) of the Companies Act, 2013, the company has adequate risk management mechanism and is periodically reviewed by the Board. The major risks identified by the business are systematically addressed through mitigating actions on a continuing basis and cost-effectively risk are controlled to ensure that any residual risks are at an acceptable level. Whilst it is not possible to eliminate the risk absolutely effort is underway to actively promote and apply best practices at all levels and to all its activities including its dealing with external partners. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures. Further, your Company aims at enhancing shareholders’ value and providing an optimum risk-reward trade off. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.


The COVID-19 pandemic has emerged as a global challenge, creating disruption across the world. Capital markets and banking services have been declared as essential services and accordingly have been continuing the operation with minimal permitted staff. However, the other employees were encouraged to work from home. The physical and emotional wellbeing of employees continues to be a top priority for the Company. All operations and servicing of clients were smoothly ensured without any interruptions as the activities of trading, settlement, DP, Stock Exchange and Depository Participants have been fully automated and seamless processes.

The company has been operating in normal course and there have been no adverse impacts on the liquidity, revenues or operational parameters during the F.Y. Most of your Company’s costs are flexible; and have been managed prudently. In stark contrast to the general perception, this unprecedented crisis has hastened the adoption of digital processes and systems across the entire country and the industry.


The statements made in this Report describing the Company’s objectives, projections, estimates, expectations are the forward looking statements within the meaning of applicable securities laws and regulations and are subject to certain risks and uncertainties like regulatory changes, local, political and economic developments and other factors. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.