comfort commotrade ltd Management discussions


As per World Economic Outlook April 2022, global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in Financial Year 2022 and 2023. The post-COVID-19 pandemic recovery is being hit by a potentially huge global supply shock that is expected to reduce growth prospects and push up in ation. Additionally, the global economic prospects have been severely set back, largely because of Russias invasion of Ukraine. This crisis unfolds even as the global economy has not yet fully recovered from the pandemic.

A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize. Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while US consumer spending undershot expectations. Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected in ation worldwide especially in the United States and major European economies triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.

For emerging market and developing economies, the negative revisions to growth in 2022-23 reflect mainly the sharp slowdown of Chinas economy and the moderation in Indias economic growth. The outlook for India has been revised down by 0.8 percentage point, to 7.4 percent. For India, the revision reflects mainly less favorable external conditions and more rapid policy tightening.


While risks on account of COVID-19 pandemic very much remain on fore, the escalation of geopolitical stress with the ongoing Russia Ukraine conflict has significantly added to the uncertainty level.

The Delta variant of COVID-19 struck India in the beginning of 2021-22 marking the onset of the second wave. Although the second wave of the pandemic in April- June 2021 was more severe from a health perspective, the economic impact was muted compared to the national lockdown of the previous year. The Advanced Estimates of real GDP growth (YoY) in F.Y. 2021-22 at 9.2 per cent con rm the sustained momentum of GDP growth since the second wave. The economy in the current year has recovered 101.6 per cent of the pre-pandemic output of F.Y. 2019-20.

Monetary policy projections are consistent with achieving the Reserve Bank of Indias in ation target over the medium term.

According to International Monetary Fund "IMF" working paper published in July 2022, over the long term, the results indicate that higher credit growth, arising from better capitalized banks with lower Non-Performing Loans, is associated with higher GDP growth. It highlights the important role of financial sector on growth outcomes. Together, these results point to several policy considerations. First, the results highlight the importance of ensuring adequate credit growth and improving the balance sheets of banks, particularly through reducing problem loans. During periods of low economic growth, policies to support credit growth and to strengthen balance sheets would be particularly important. Additionally, a focus on ensuring that private banks are well capitalized, either through new equity issuance or reducing cash dividends is crucial, given the relationship between their balance sheets and credit to the economy. Finally, given the differences in results between private and public banks, efforts to better understand the drivers of this difference and address it could help promote growth.


1. Russias invasion of Ukraine creates near-term risks for global markets, but also casts a shadow over the longer-term outlook, according to Russel Investments. The immediate threat comes from high energy prices, rising food prices and disrupted supply chains, as highlighted earlier. The longer - term issues are a new cold war between Russia and the West, increased military spending and a further threat to globalization. The war is a de ning moment for Europe, which now needs to unwind decades of Russian energy dependence, accelerate its sustainable energy transition, and rebuild military capability.

2. The UK economy began the year with strong momentum, but it is likely to slow due to Bank of England tightening, high energy prices from Russias invasion of Ukraine and a planned national insurance levy increase ( effectively a tax hike ) to help fund the National Health Service. Despite economic concerns, the FTSE 100 Index has been one of the better performing equities markets this year. The index has high exposure to commodity prices and financial stocks that benefit from higher interest rates, and almost no exposure to under-pressure technology stocks.

3. In China, the government recently announced an above - expectations 5.5 % GDP growth target for 2022. The countrys economy, however, continues to face pressures, and more stimulus is expected to be required to get close to the growth target. In addition, COVID - 19 still poses a challenge to the Chinese economy, mainly due to the governments zero - tolerance approach.

4. ECB monetary policy - European Central Bank is expected to focus on growth risks more than in ation this year. While markets anticipate two rate hikes in 2022, its likely that rates will remain unchanged or only rise once as higher energy prices slow economic growth.


After navigating rough terrains and recovering from the lows of 2020 in 2021, we marched into the new year 2022 with the hope yet again that this year might be the year of endemic and full normalisation. 2022 was supposed to be characterized as a year in which global environment was likely to turn less conducive on account of the following: 1) moderating growth 2) monetary tightening 3) fading scal transfers 4) stubbornly high price pressures, though less elevated than what we experienced in 2021. According to World Bank Global Economic Prospects Report, after rebounding to an estimated 5.5% in 2021, global growth was expected to decelerate markedly to 4.1% in 2022, reflecting continued COVID-19 are-ups, diminished scal support, and lingering supply bottlenecks. According to OECDs Economic Outlook Interim Report March22, before the outbreak of war, majority of the global macroeconomic parameters were seen marching towards normality over 2022-23. Alongside, global growth was projected to return to rates similar to those prevailing in the immediate pre-pandemic period only in 2023 not 2022.

Central Statistics O ces second advance estimates reveal that F.Y. 2022, GDP growth is expected to be at 8.9% i.e., much lower than the first advance estimate of 9.2% implying that the economy is expected to slow down further in Q4 F.Y. 2022 and grow by mere 4.8%. Q3 F.Y. 2022 GDP growth moderation by more than expectations, imposition of restrictions due to Omicron wave in January, impacting economic activity (not as severely as in previous two waves) coupled with longer than expected elevation in commodity prices, ongoing global growth slowdown and heightened geopolitical tensions, have dampened the outlook for Q4 F.Y. 2022 and thus, coerced the government to lower estimates for F.Y. 2022.

(Source: Market Pulse, NSE)

To give an overview of the dimension of the capital markets in India, as of F.Y. 2021-22 there were 3 Stock Exchanges in the Equity Cash, Equity derivatives and Currency Derivatives Segment and 5 in the Commodities Derivatives Segment, 5 clearing corporations, 2 depositories, 10,529 Foreign Portfolio Investors (FPIs), and 17 custodians, with a market capitalization of all listed companies at 264 trillion.


Indian Capital Markets demonstrated tremendous growth despite the challenges posed by the COVID-19 pandemic. Stock Exchanges and all associated market infrastructure institutions in India were fully functional, on back of government and regulatory support, meticulous planning, and technological advances, thus ensuring uninterrupted business continuity for market participants. Its role in the economy is vital to ensure India remains among the top destinations for domestic and global businesses to expand and invest. Raising capital is a strategic priority in this current scenario, and the frontier of Indian capital markets are not only increasing but has assumed far greater importance and urgency.


The year saw the regulator tightening the norms for Initial Public O ers (IPOs), disclosures and compliances among other things while also giving its go-ahead on various products, segments and reforms including silver Exchange Traded Funds (ETFs), shorter settlement cycle, gold exchange and a social stock exchange as well.


The Indian equity market gave solid returns in financial year 2022, despite geopolitical turmoil playing spoilsport in the last quarter of FY 2022. The financial year was marred with challenges starting from state-wise lockdowns during the second and more devastating wave of COVID-19 to headwinds from global markets. The war in Ukraine also posed a major challenge for stock markets and businesses across the world. However, Indian indices emerged to be the best performing index among global peers with over 18 percent rise. For F.Y. 2021-22, the S&P BSE Sensex jumped 9,059.36 points or 18.29 percent, where the index rose to 58,568.51 points from 49,509.15 at the end of F.Y. 2021. The benchmark index showed robust performance even amidst global challenges, Covid disruptions and geopolitical crisis. The performance comes in the back of a ragging war between Russia and Ukraine that has spooked stock markets globally, forcing investors to move to safe haven assets. This clearly indicates the strength and resilience shown by domestic investors amid a slew of headwinds from the global markets. The numbers assume significance here as the indices gave good returns at a time when foreign investors withdrew from domestic markets for major parts of the year.

(Source: BSE Limited)


The Indian equity market gave solid returns in financial year 2022, despite geopolitical turmoil playing spoilsport in the last quarter of FY 2022. The financial year was marred with challenges starting from state-wise lockdowns during the second and more devastating wave of COVID - 19 to headwinds from global markets. The war in Ukraine also posed a major challenge for stock markets and businesses across the world. However, Indian indices emerged to be the best performing index among global peers with over 18 percent rise.


Commodity prices is the most important indirect channel that could affect several developed and developing energy importing economies. Rapidly surging global in ation, Rate Hikes and Geopolitical Risk are now emerging as the three major themes dominating and driving the financial and commodity markets. The Russia-Ukraine crisis has stoked uncertainty in global trade and has been creating severe volatility in commodity prices.

Oil prices soared above US$ 130 a barrel to hit their highest level in a decade. While Gold extended its parabolic rally from just under US$ 1,800 an ounce to a high of US$ 2,070 an ounce - just $5 short of an all-time high reache in August 2020. The bullish momentum also split over into other commodities with Aluminum, Copper, Lithium, Platinum, Palladium, Uranium, Zinc, Co ee, Wheat and Lumber prices blasting through all-time highs.

Similarly, U.S. Natural Gas prices have almost doubled in Q1 2022 and expected for its strongest rally since 2009. Meanwhile, European Natural Gas prices have skyrocketed 90% to post their biggest monthly rise ever.

Energy prices are likely to remain higher over the coming months compared with Q1 2022. Agricultural commodity prices will potentially rise further in the coming months given Russia, Ukraine, and Belaruss major role in food commodity and fertilizer production. The World Food Program cites inventories are already tight globally, and weather events hampered last years plantation season, so much so that now the upcoming harvest looks bleak.

War-related interruptions to production, sanctions, and strongly impaired access to cross-border payment systems will disrupt trade flows, notably for energy and food. The magnitude of these changes depends not only on the decline in exports because of the conflict and sanctions, but also on the elasticity of global supply and demand. Although the price of oil has risen sharply, spare capacity in other countries and the release of petroleum reserves will likely mean that these increases will be contained over the medium term.


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 Extra-Ordinary 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.

Our Company has been undertaking various types of initiatives for increasing the awareness and improving the participation in the commodities markets under the guidance of MCX. These programmes are aimed at ensuring financial inclusion, and raising the financial literacy levels among the various market participants, like, farmers, producers, traders, processors, importers, exporters and other stakeholders in the value chain, and also informing them about the benefits of trading in the commodity markets.

Towards the same, our Company has organized 3 Programmes in association with MCX at Mumbai, Hyderabad and Jhunjhunu (Rajasthan).

Subsidiary Companies

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


Company with Low Debt;
Experienced Promoters and Management Team;
Strengths Independent and insightful research;
Integrated financial services provider
Limited geographical coverage;
Weaknesses Dependent upon growth in Commodity Broking Industry;
Dependence upon the existing customers for the business
Regulatory reforms would aid greater participation by all class of investors;
Leveraging technology to enable best practices and processes;
Opportunities Positive long-term economic outlook will lead to opportunity for nancial services;
Growing Financial Services industrys share of wallet for disposable income.
Execution risk;
Threats Risk of a downturn in the event of slowing economic growth and/or worsening macro-economic environment;
Increased intensity of competition from local and global players;
Market trends making other assets relatively attractive as investment avenues.


Employees are one of the key foundations of any successful organisation. Human Resources plays a significant role in developing positive business culture and improving employee engagement and productivity. The HR policies and practices are built on the Groups core values of Integrity, Passion, Speed, Commitment and Seamlessness.

The Company has embarked on various human resource activities to enhance the productivity of the workforce. The Company endeavors to provide a safe, conducive and productive work environment.

As on March 31, 2022, 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.


(Rs. in Lakh, Except EPS)

2021-2022 2020-2021 2021-2022 2020-2021
Revenue from Operations 15,134.15 7,891.12 15,143.14 7,923.50
Other operating Income 45.31 125.36 45.35 125.90
Total Revenue 15,179.47 8,016.48 15,188.50 8,049.41
Total Expenditure 14,738.60 6,612.16 14,791.73 6,656.43
Profit before Tax 440.87 1,404.31 396.77 1,392.98
Current Tax Expenses 238.36 206.92 238.36 206.92
Deferred Tax 0.00 (0.39) 0.00 (0.39)
Tax of earlier years 0.00 4.08 0.00 4.08
Profit for the Year 202.51 1,193.71 158.41 1,182.38
Earnings Per Share (EPS) 2.02 11.91 1.58 11.80
(Basic & Diluted)

On a consolidated basis, the Company registered revenue from operations of Rs. 15,143.14 lakh for the year ended March 31, 2022 as compared to Rs. 7,923.50 lakh in the previous Financial Year ended March 31, 2021. The Net profit stood at Rs. 158.41 lakh for the year ended March 31, 2022 as compared to the profit of Rs. 1,182.38 lakh in the previous Financial Year ended March 31, 2021.

On a standalone basis, the Company registered revenue from operations of Rs. 15,134.15 lakh for the year ended March 31, 2022 as compared to Rs. 7,891.12 lakh in the previous Financial Year ended March 31, 2021. The Net profit stood at Rs. 202.51 lakh for the year ended March 31, 2022 as compared to the profit of Rs. 1,193.71 lakh in the previous Financial Year ended March 31, 2021.

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

Key Ratios FY 21-22 FY 21-20 Variance (%)
Debt/Equity Ratio 0.50 0.14 254.79
Debtors Turnover 308.82 133.45 131.42
Return on Net worth (%) 7.00 58.00 (87.35)
Inventory turnover Ratio 4.85 4.52 7.35
Current Ratio 2.20 2.75 (20.14)
Net profit Ratio (%) 1.00 15.00 (91.15)
Return on Capital Employed (%) 17.00 54.00 (69.37)

Remarks for Change in Ratioss having more than 25% variance

Particular Reason for Variance
Debt/Equity Ratio Debt Equity ratio has been increased due to increase in secured loans repayable on demand.
Debtors Turnover Trade Receivables turnover Ratio has been increased due to increase in Turnover.
Return on Net worth Return on Net worth has been increased due to increase in Interest income, reversal of provision for book debts and decrease in employee benefit expenses.
Return on Equity Ratio Return on Equity ratio has been decreased due to decrease in PAT
Net Profit Ratio Net profit Ratio has been decreased due to decrease in PAT.
Return on Capital Employed Return on Capital employed Ratio has been decreased due to decrease in EBIT.


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 internal control system of the Company is designed to suit the complexity of its business operations. 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 ndividuals. 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, xed 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 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. Any deviations observed in the process of evaluation are highlighted to the Board, which initiates prompt corrective measures.

The Audit Committee of the Company reviews and recommends the unaudited quarterly financial results and the annual audited financial statements of your Company to the Board for approval. Your Company has appointed M/s. AHSP & CO. LLP, a rm 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 ash reports, if required. Further, all related party transactions are placed before the Audit Committee and are approved / ratified by it after deliberations.


Risk is an integral part of the business and almost every business decision requires the management to balance risk and reward. As the Companys performance is dependent on the health of capital markets, it faces the risk of downturn in the event of slowdown of economic growth and/or worsening macro-economic environment.

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-e ectively risk are controlled to ensure that any residual risks are at an acceptable level. Whilst it is not possible to eliminate the risk absolutely e ort 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. 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 Companys exposure to various risks: Market risk, Technology risk, Reputation risk, Human Resource risk, Regulatory Risk, Liquidity Risk, Operational Risk, Fraud Risk, Credit Risk, Interest rate risk.

1. We operate in a highly regulated industry and may be subject to censures, nes, and other legal proceedings if we fail to comply with our legal and regulatory obligations. Changes in government policies could adversely affect.

2. Any intensi cation of the COVID-19 pandemic or any future outbreak of another highly infectious or contagious disease may adversely affect our business, results of operations and financial condition.

3. The continuation or recurrence of systemic events such as the global economic crisis, changes in economic policies and the political situation in India or globally may adversely affect our performance.

4. Other factors beyond our control, that may materially adversely affect our business, financial condition and result of operations include: the level and volatility of interest rates, concerns over in ation and the level of institutional or retail con dence, unforeseen market closures or other disruptions in trading.


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.