Comfort Commotrade Ltd Management Discussions.


With substantial weakness in global trade and investment, global economic growth slowed down in CY 2019, compared with CY 2018. Global growth output grew 2.9% in CY 2019, down from 3.0% in CY 2018, and is the lowest rate of growth since the global financial crisis (Source: World Bank, Jan 2020 Report). It weakened mainly on account of increasing trade barriers owing to the US-China trade war and political tensions in the Middle East. With the onset of Covid-19 pandemic, global economic growth is expected to weaken even further. Most advanced economies are now expected to report contaction of GDP over next few quarters. The world economy is expected to go under recession in CY 2020, with expected de-growth of 3.0% (Source:IMF )

The global economy has been buffeted by headwinds since the beginning of 2019, and all the international and regional crises were aggravated by the coronavirus pandemic of early 2020, which dominated the entire first half of the year. Trade tensions between the United States and China, which had eased briefly in early 2019, worsened again later in the year as both the countries imposed more tariff barriers on each other. This affected investor sentiment globally and led to lower manufacturing activity. Service sector activity, however, remained relatively stable. Monetary policy updates in major economies cushioned, to a degree, the impact of trade tensions.

The US economy, however, remained relatively resilient. It started 2019 on a strong note, by posting a growth of 3.1%. Although the growth slowed in the subsequent quarters, full-year growth in 2019 came in at 2.3%. China saw a weakened economy as well, with its Gross Domestic Product (GDP) growth in 2019 falling to an estimated three-decade low at 6.1%. From the beginning of CY2020, the novel coronavirus outbreak of Wuhan, China, started adversely affecting the world, and by early March 2020, it was officially a global health crisis. The rapid spread of COVID-19 and the resultant lockdowns across the world led to a drastic lowering of growth forecasts and rapid depreciation in Emerging Market currencies, triggering risk-off sentiment and causing sharp market falls. As the crisis deepened, economists predicted a recession in key economies in 2020 and a slow recovery in 2021. International Monetary Fund (IMF) Managing Director Kristalina Georgieva added that she expected a recession that is as bad as or worse than the 2008 global financial crisis. COVID-19 is an evolving crisis that has already resulted in tens of thousands of job losses around the world and the near decimation of some sectors that are entirely reliant on human mobility. Its economic impact will depend on how efficiently countries are able to contain its spread.


During FY2020, Indias economic growth decelerated continuously as the year progressed. As per provisional estimates, real GDP growth for the first two quarters of FY2020 came in at 5.2% and 4.4% respectively. A variety of factors were responsible for this deceleration in growth including delayed onset and spatially skewed distribution of monsoon, continued slowdown in manufacturing and weak private consumption. While there were hopes of a turnaround in H2FY2020, the economys performance slid further in Q3FY2020 as real GDP growth plunged to 4.1% on the back of broad-based deceleration in industry and services. However, strong growth in government expenditure provided the much-needed support to headline growth during the first three quarters of FY2020 as the government tried to cushion the impact of slowdown. Coronavirus and the resultant lockdown weighed heavily on the economy in the last quarter of FY2020 and real GDP growth plunged to just 3.1%, taking full year growth to 4.2%. Headline retail inflation, as measured by Consumer Price Index (CPI), was benign in the beginning of FY2020. CPI started inching up sharply from September-October 2019 due to higher food prices. However, towards the end of FY2020, normalisation of food prices and easing oil prices led to easing of inflation.


The Indian Financial Service industry is vast and Diverse consisting of banks, NBFCs, capital markets, insurance sector and new payment banks. Indias Gross National Savings (GDS) as a percentage of Gross Domestic Product (GDP) stood at 30.5% in 2019. With increasing Finance penetration, the opportunity in India is very high especially in the rural areas for moving from physical savings to financial savings. With increasing internet penetration and financial literacy, the future growth prospects of financial service industry in India looks very bright.

India has scored a perfect 10 in protecting shareholders rights on the back of reforms implemented by Securities Exchange Board of India (SEBI) in World Banks ease of Doing Business 2020 report.


The COVID-19 pandemic impact and the uncertainty surrounding the lockdown phase has kept the markets volatile in the near term. The mutual funds collections in FY20 have held up well, however the recent correction is one of the steepest correction in last twelve years. Prior to Covid-19 impact, FY20 saw more greenshoots for Indian economy with Indias weightage in global indices increasing, more FII money is coming into India, driving both secondary and primary markets. A strong budget with focus on demand stimulation and improvement in government spending and measures to tackle the COVID-19 impact and the improving liquidity amongst NBFCs is further expected to drive capital market activity in FY21.

FY 20 saw RS 916.7 billion being raised through public equity markets, 62% higher than the Rs 564.9 Billion raised in FY19 (Source: PRIME Database). Money raised through QIPs also saw a healthy growth trend in FY20 as against FY 19. Companies mobilized RS. 512.2 billion through QIP. This is 388% higher than the previous year (Source: PRIME Database). Banks, NBFCs and telecommunication firms dominated the QIP space, accounting for 79% (402.6 billion) of the overall amount. Funds raised via IPO rose by 38% YoY in FY 20. IPOs of very high quality companies, which had differentiated business models or are sector leaders, were successful. A budget with focus on demand stimulation and improvement in government spending measures to tackle the Covid-19 impact, and uncertainties existing globally are expected to keep the capital market muted during FY 21.


In the last six years, Indian markets have witnessed a spurt in volumes at 34.4% CAGR from FY13 to FY19. Following global trend of higher tilt towards options, derivatives witnessed robust traction at 35.4% CAGR from Rs 1554 billion in FY13 to Rs. 9590 billion in FY 19, while Equity (cash) ADTO grew only by 18.1% CAGR in FY 13-19 (Source: ICICI Research) . While the volatility in markets is expected to encourage trading turnover, the recent corrections in valuations on account of the COVID-19 impact, coupled with the cautious investor stance, would have a bearing on industry revenues in FY 21.

The outlook over a longer period would be contingent on the extent of the outbreak, resultant impact, on the economy, the expectations of the turn-around coupled policy measures as undertaken by government from time to time and investor sentiment. While the proportion of cash segment has remain steady at 3% of total volume, options as product has been gaining prominence with the share in total volume from 79% in FY15 to 88% in FY19 and 92% in Q2 in FY20 (Source: NSE, ICICI Research)

On account of the COVID-19 impact, brokerage companies are expected to report a marginal reduction in revenue and profitability across businesses. The outlook over a longer period would be contingent on the extent of the outbreak, resultant impact on the economy, the expectations of turnaround coupled with policy measures as undertaken by the government from time to time and investor sentiment.


FY2020 was a year of extreme volatility for Indian equity markets. While the fiscal year started on a positive note for equities, the market continued to remain polarised, with a handful of stocks contributing to the bulk of the performance. In the second quarter, risks of a global slowdown started building up as the US yield curve inverted and the US economy entered the longest period of economic expansion in history in the backdrop of an escalating trade war and other geo-political risks such as Brexit. Acknowledging the risks to global growth, most central banks such as the Federal Reserve System aka US Fed, ECB (European Central Bank), and PBOC (Peoples Bank of China) turned dovish in the second half of CY2019, thereby improving the outlook for interest rates and global liquidity. This resulted in a pick-up in Emerging Market (EM) equities, including that of India, from the beginning of third quarter of FY2020. Indian equities were also buoyed by tax cuts for the corporate sector. The rising risk appetite resulted in a pick-up in broader markets in the form of mid and small caps


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 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.



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

India has been and is expected to remain a high savings economy. The young working population is expected to increasingly channel a higher share of their savings into financial assets.


As the Companys 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.

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


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


As on March 31, 2020, the Company had a total head count of 14 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, the Revenue from operation stood at Rs. 3520.81 Lakhs for the financial year ended as on March 31, 2020 compared with Rs. 5959.43 Lakhs in the Previous Year. The Net Profit for the year stood at Rs. 171.70 Lakhs the financial year ended as on March 31, 2020 against Rs. 14.43 Lakhs reported in the Previous Year.

At Consolidated Level, the Revenue from operations for the financial year ended as on March 31, 2020 was Rs. 3597.27 Lakhs as compared with Rs. 5995 Lakhs in the Previous Year. The Net Profit for the financial year ended as on March 31, 2020 increased to Rs. 160.83 Lakhs against Net Loss of Rs. 3.10 in the Previous Year.

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

Key Ratios FY19-20 FY 18-19
Debt/Equity Ratio 0.01 0.00
Return on Networth 0.12 0.01
Interest Coverage Ratio 44.66 6.46
Net profit Ratio 0.05 0.00
Return on Capital Employed 0.172 0.022
EPS 1.71 0.14


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.


During the initial days of the pandemic and the announcement of a nationwide lockdown by the Government of India, the Companys focus areas were: ensuring the safety of employees; ensuring business continuity by prudent risk management; and reaching out to customers and investors digitally. As part of the ‘essential services sector, the Company made sure that its services were open and customers had access to their investments at all times. Even during these uncertain times, customers might need to reach out to the Company for advice.


The statements made in this Report describing the Companys 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.