Comfort Intech Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

Year 2024 has been of global upheaval. Over half the worlds population voted in major elections, reflecting unprecedented political engagement. Meanwhile, the Russia-Ukraine and Israel-Hamas conflicts intensified regional instability, disrupting energy and food supplies and driving inflation. Cyberattacks also surged, targeting increasingly digitised critical infrastructure. Geopolitical tensions and policy uncertainty further reshaped global trade and heightened financial market volatility. While the global economy has shown notable resilience in the face of these challenges, recovery remains slow and uneven across regions, unfolding within a landscape defined by deep and transformative shocks.

Despite these challenges and widespread fears of a global recession, the worst-case scenarios did not materialize. The global economy avoided a major downturn, the banking sector held up under pressure, and emerging markets largely escaped the sudden stops and financial turmoil many had anticipated. Even more encouraging, the sharp rise in inflation though it triggered a serious cost-of-living crisis—did not lead to a runaway wage-price spiral. Instead, inflation has been retreating nearly as fast as it spiked, with many countries seeing price pressures ease more quickly than expected. This shift has helped bring more balance to the global economic outlook compared to a year ago. Looking forward, global cooperation will be more important than ever. Strong multilateral efforts are needed to navigate the risks of growing geo-economic fragmentation and to meet the urgent challenges posed by climate change. A coordinated approach will also be critical in accelerating the transition to clean energy and building a more sustainable and inclusive global economy.

INDIAN ECONOMIC OVERVIEW

Indias growth story continues to capture global attention, underpinned by strong economic fundamentals and consistent performance. In 2024–25, real GDP having regards to inflation and adjusted economic output, grew by 6.5%. This optimism is shared by others: The United Nations projects growth at 6.3% this year and 6.4% next year, while the Confederation of Indian Industry estimates a slightly higher range of 6.4% to 6.7%.

This steady momentum is being fueled by robust domestic demand. Rural consumption is rebounding, urban spending is increasing, and private investment is gaining strength. Businesses are expanding their capacity, with many operating near full utilization. Meanwhile, public investment particularly in infrastructure remains elevated, and stable borrowing conditions are supporting confident, forward-looking decisions by both firms and consumers.

In contrast, global economic conditions remain fragile. The United Nations has described the world economy as being at a "precarious moment," citing rising trade tensions, policy uncertainty, and declining cross-border investments. Yet, India continues to shine as a bright spot, with international institutions and industry groups expressing strong confidence in its growth outlook.

Over the past decade, Indias economy has expanded significantly. GDP at current prices is expected to rise from _106.57 lakh crore in 2014–15 to _331.03 lakh crore in 2024–25 which is nearly a threefold increase. In the past year alone, nominal GDP grew by 9.9%, while real GDP rose by 6.5%, highlighting the economys ongoing resilience and vitality.

INDUSTRY OVERVIEW AND DEVELOPMENTS LIQUORS INDUSTRY: -

The Indian alcohol industry has experienced consistent growth over recent years, driven by evolving demographics, changing cultural attitudes, and rising disposable incomes. Between 2020 and 2025, the Indias overall alcohol market recorded a Compound Annual Growth Rate ("CAGR") of 6.8%, reaching an estimated value of USD 200.0 billion by FY2025. Looking ahead, the industry is projected to maintain a positive growth trajectory, with forecasts indicating a CAGR of 7.2% from 2025 to 2035. This would see the market expand to approximately USD 300.0 billion by FY2035, highlighting strong underlying demand fundamentals and sectoral resilience.

One of the primary drivers of this growth is the significant demographic shift underway in India. As the population becomes increasingly youthful and urbanized, there is a growing cultural acceptance of alcohol consumption, particularly among younger consumers who view it as a form of recreation and social interaction. Additionally, the increasing participation of women in the workforce and their growing financial independence have led to a marked rise in alcohol consumption among women. This change reflects broader shifts in societal norms, contributing to an expanded and more inclusive consumer base for the alcohol industry.

The industry is also distinguished by its size and product diversity, encompassing a wide range of alcoholic beverages including beer, wine, whiskey, vodka, rum, gin, and regionally specific indigenous liquors. This diversity enables the sector to cater to a broad spectrum of consumers, from urban millennials exploring modern cocktail culture to experienced connoisseurs seeking premium spirits. Such segmentation enhances market resilience and drives comprehensive performance across price points and regions.

Furthermore, trends such as premiumization and increased demand for craft and imported spirits are becoming more prominent, especially in metropolitan areas. As regulatory frameworks evolve and companies invest in product innovation and marketing strategies, the Indian alcohol industry is well-positioned to leverage these socio-economic trends. With continued urbanization, cultural shifts, and rising consumer spending, the sector is expected to remain a key contributor to the countrys consumer goods landscape over the next decade.

Source: Future Market Insights

TRADE INDUSTRY: -

The Indian consumer durables market continues to present a robust growth trajectory, underpinned by strong fundamentals such as rising disposable incomes, favorable demographics, and increasing urbanization. Broadly classified into urban and rural segments, the market is characterized by a large middle-income group, an expanding affluent consumer base, and a small lower-income population.

The sector encompasses a diverse portfolio of products including consumer electrical (such as fans, lighting, and kitchen appliances) and white goods (including refrigerators, washing machines, televisions, and air conditioners). With evolving lifestyles and growing consumer awareness, demand for these products is expected to remain resilient over the long term.

A notable transformation is underway as market share continues to shift from the unorganized to the organized sector. As per industry estimates, approximately 30% of the market remains unorganized, offering substantial headroom for growth for established players. This transition is expected to be accelerated by policy reforms, digital integration, and heightened consumer preference for branded, quality-assured products.

Technological innovation is set to redefine the sector and smart product features is rapidly gaining attention. This is because of an ongoing transformation of manufacturing and industrial sectors through the integration of digital technologies, automation, and intelligent systems which is commonly known as Fourth Industrial Revolution or Industry 4.0. The advent of Industry 4.0 is likely to catalyze investments in R&D, technology infrastructure, and advanced manufacturing processes, thereby enhancing operational efficiency and product innovation.

India is increasingly being recognized as a strategic hub for global manufacturing and exports in the consumer electronics space. During FY25 (April–December), electronics exports stood at Rs. 2,25,869 crores (US$ 26.1 billion), reflecting the sectors dynamism and export potential. The Government of India has set an ambitious target of achieving

US$ 300 billion in electronics manufacturing and US$ 120 billion in electronics exports by FY26, supported by Production Linked Incentive (PLI) schemes and infrastructure development.

Source: India Brand Equity Foundation

ABOUT COMFORT INTECH LIMITED

The Comfort Intech Limited (‘CIL or ‘the Company) was originally incorporated as Public Limited Company under the name of Comfort Finvest Limited on October 17, 1994. Subsequently, the name of company was changed to Comfort Intech Limited and a fresh Certificate of Incorporation reflecting the new name was issued on March 24, 2000. Founded and led by Mr. Anil Agrawal, with strategic vision furthered by promoter Ankur Agrawal, the Company has evolved from an investment firm into a diversified business with two core verticals:

1. Manufacturing, Bottling & distribution of Indian Made Foreign Liquor ("IMFL")

2. Trading of Goods

BUSINESS OVERVIEW

Liquor Manufacturing, Bottling, and Distribution: -

CIL takes great pride in its active involvement in the manufacturing, bottling, and distribution of alcoholic beverages, primarily in the IMFL category, within the dynamic state of Telangana. Driven by a commitment to quality and innovation, the Company has developed and promoted its own portfolio of brands, ensuring a superior and memorable experience with every sip.

In addition to its proprietary offerings, CIL undertakes bottling contracts (throught its subsidiary LIL) for reputed companies such as Tilak Nagar Industries Limited (TNIL) and Blue Ocean Beverages.

CIL has also made a strategic investment in its subsidiary, Liquors India Limited (LIL), a well-established distillery based in Telangana. Incorporated on January 16, 1975, LIL holds a prestigious IMFL License granted by the Telangana Prohibition and Excise Department.

LILs product range includes popular variants such as Whisky, Brandy, Rum, and Gin, marketed under well-known brand names like Deccan Blue, Gold Mark Reserve, Magnum Gold Premium, and Gold Mark VSOP Brandy, among others. Further, LIL also undertakes bottling contracts for several leading liquor companies.

Trading of Goods: -

In addition to our stronghold in the liquor industry, Comfort Intech Limited extends its expertise to the trading of goods across various categories. From consumer appliances and durables to textiles, agri products and beyond, we are actively engaged in trading goods both online through e-commerce platforms and offline channels of distribution. Our commitment to quality remains unwavering as we curate a diverse range of products, ensuring customer satisfaction at every touchpoint. The company is primarily engaged in the business of trading consumer durable goods, including electronic appliances and related products. Further, the Companys management has now decided to more actively engage in business of trading agriculture commodities. Necessary arrangements are made by Company to obtain requisite licenses, permissions as are required for carrying out Agri-commodities related business. This strategy is aims to enable Company to enter into new growing opportunities, enhanced operation and create greater value for the stakeholder at the large

SEGMENT WISE PERFORMANCE

1. Liquors Division –

The Companys IMFL division is engaged in the manufacturing and distribution of alcoholic beverages under its proprietary brands with a key focus in the state of Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala. To support its manufacturing capabilities, the Company has invested in LIL, an unlisted public company incorporated on January 16, 1975, under the Companies Act, 1956. LIL is a subsidiary Company for CIL having its registered office located at Hyderabad, Telangana.

LIL operates as a licensed distillery, holding all requisite manufacturing licenses from the Telangana Prohibition and Excise Department for IMFL production. It primarily undertakes bottling operations on behalf of various liquor companies across India. This strategic arrangement allows the Company to efficiently manage its production and supply chain within the region.

The Company is also exploring options to introduce new brands in the premium and semi premium range and also exploring opportunities for geographical expansion in multiple states for the existing as well as new brands that will be introduced over the period of time.

2. Goods Trading Division –

The Companys Goods Trading division is currently engaged in business of trading goods in various categories such as consumer appliances and durables, laptops, kitchen appliances, home appliances and electronics, textiles, etc., including but not limited to fans, fabrics, water heater and monoblock pumps on the e-commerce marketplace platforms and the immediate suppliers of the marketplace platforms and in offline channels of distribution. The Company has also extended its trading division in business of buying, selling, dealing including import & export of agriculture commodities. During the year under review, the Company has imported agri-commodities and sold the same domestically. The Company is further planning to diversify in agriculture business of its trading division. This division has received a strong market demand in future. Profit contribution of the division has certainly shown an increase as compared to previous periods & expected to grow further in coming financial years.

Details of Segment wise performance of the Company on standalone basis during the year under review is given here under:

(Rupees in Lakh)

Sr. No.	Particulars	Income from operations		Profit before Depreciation, Tax and Finance Cost
		2024- 2025	2023- 2024	2024 - 2025	2023-2024
1	Trading in Goods	23.58	38.27	23.48	38.17
2	Manufacturing in Liquor	6808.22	6,914.36	311.34	322.34
3	Financing	-23.66	38.30	-23.66	38.30
4	Leasing of Immovable Properties	0.00	0.00	-05.00	0.00

Further, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor are provided in Notes to financial statements which forms integral part of this Annual Report.

SWOT ANALYSIS

As per the Oxford Dictionary – "Risk is Exposure to the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility". In other words, the possibility of experiencing a loss or negative outcome due to various internal or external factors.

The Company recognizes that effective risk management is essential to achieving strategic objectives and ensuring sustainable long-term growth. A comprehensive risk management framework is in place to identify, assess, monitor, and mitigate key risks across operational, financial, compliance, and strategic areas. Risks are regularly assessed and classified based on their likelihood and potential impact.

The Company has framed detailed risk management policies to identify and analyze the risks it faces, establish and monitor appropriate risk limits and controls, and periodically review market and regulatory changes to update the policies accordingly. This proactive approach helps ensure that the risk management framework remains dynamic and responsive to evolving business conditions.

The Company remains vigilant toward emerging risks, including regulatory changes, cybersecurity threats, market volatility, and environmental challenges. The key risks and mitigating actions are regularly placed before the Audit Committee of the Company to ensure robust oversight. The Board of Directors and the Audit Committee play a critical role in supervising the risk governance process and strengthening the organizations resilience.

Every risk identified by the Company goes through the following stages to be managed effectively:

Following are certain Risks which are dealt by the Company:

Market Risk: - This is a type of risk that arose due to adverse changes /volatility in the market. This risk is further classified as follows –

- Interest Rate Risk: - Interest rate risk arises in relation to financial assets that are sensitive to interest rate fluctuations. Typically, an increase in interest rates leads to a decline in the market value of bonds and other debt instruments, and vice versa. However, the Companys exposure to interest rate risk is minimal, as its borrowings are contracted at fixed interest rates. This mitigates the potential impact of adverse movements in interest rates, ensuring stability in interest obligations and financial planning.

- Currency Risk: - With Comfort Intech Limited expanding its business operations to include the import of agri commodities, the Company is exposed to currency risk arising from fluctuations in foreign exchange rates. Currency risk affects the cost of imports, and any adverse movement in exchange rates may impact profitability. The Company monitors exchange rate trends closely and adopts hedging strategies, where appropriate, to mitigate the impact of currency volatility. Effective management of currency risk is essential to maintaining cost efficiency and ensuring price competitiveness in the global sourcing of agri goods.

- Commodity Risk: - Comfort Intech Limited, being engaged in the trading of a diverse range of goods, is exposed to commodity price risk. This risk arises from fluctuations in the market prices of traded goods due to factors such as changes in demand and supply dynamics, raw material costs, global economic conditions, regulatory changes, and seasonal or climatic influences—particularly in the agro segment. Price volatility can affect procurement costs and profit margins. The Company continuously monitors market trends and adopts flexible pricing, sourcing, and inventory strategies to mitigate the adverse impact of commodity price fluctuations and ensure business continuity across its varied product segments.

Credit Risk: - Credit risk arises when a counterparty is unable or unwilling to fulfill their contractual obligations. This risk is closely linked to the probability of default and the timing of recovery. The potential impact is measured by the cost incurred to replace the expected cash flows in the event of a default. The Company has implemented robust credit risk management measures, including thorough counterparty evaluation and continuous monitoring, to minimize exposure and safeguard its financial interests.

Liquidity Risk: - Liquidity risk arises from mismatches in cash flows, specifically the absence of adequate funds to meet short-term obligations. It is important to distinguish liquidity from solvency; a company may appear financially sound on the balance sheet but still face liquidity challenges if its current assets are not readily convertible to cash. In such situations, the firm may struggle to make timely payments to creditors, which can adversely affect its reputation and operational stability. The Company ensures effective liquidity management by maintaining sufficient cash and near-cash assets to meet its liabilities as and when they arise, thereby safeguarding its financial health and stakeholder confidence.

Legal Risk: - Legal risk arises when the Company lacks the legal or regulatory authority to engage in certain transactions or activities. It also encompasses exposure to issues such as insider trading, market manipulation, defaults, and mismanagement of legal affairs. These risks can lead to contractual disputes, penalties, or legal proceedings that may impact the Companys operations and reputation. Comfort Intech Limited ensures that all its transactions and business practices are backed by appropriate legal frameworks and are conducted in accordance with applicable laws.

- Compliance Risk: - Compliance risk refers to the risk of non-adherence to laws, regulations, and internal policies that the Company is obligated to follow. A breach of compliance may lead to financial penalties, sanctions, operational restrictions, or reputational damage. The Company has implemented internal controls and periodic audits to ensure consistent compliance with all statutory and regulatory requirements.

- Regulatory Risk: - Risk by reason of changes in government policies and perceptions domestically and internationally is regulatory risk. Especially this type of risks is associated with Food & Beverages and Pharmaceuticals Industries.

Your Companys dedicated compliance & legal team, in consultation with Board, undertakes necessary steps and plan well in advance in order to avoid this risk.

INTERNAL CONTROL SYSTEM AND ADEQUACY

A well-defined organizational structure, documented policy guidelines, and a clearly established authority matrix support operational efficiency and ensure compliance with applicable laws, regulations, and internal policies. These controls also provide adequate safeguards for the Companys assets and resources.

The internal control framework is further strengthened through periodic internal audits, regular management reviews, and standardized policies that promote transparency and accountability. These measures help ensure the reliability of financial and operational reporting.

To enhance oversight, the Company has appointed M/s. AHSP & Co. LLP, Chartered Accountants as its Internal Auditor. The Internal Auditor reviews the internal control mechanisms across all divisions and submits periodic reports to the Audit Committee and the Board of Directors. The Company takes prompt corrective actions based on the recommendations, if any, made by the Internal Auditor.

Furthermore, the Internal Auditor has certified that the Company maintains an adequate system of internal financial controls. These controls are evaluated regularly to assess their adequacy and operational effectiveness and their compliance with the regulatory requirements including Companies Act, 2013.

HUMAN RESOURCES (HR)

People are the key pillars of strength for any organisations. Your Company firmly believes that human capital is the core enabler of sustainable growth, and plays a pivotal role in nurturing and strengthening the culture, values, and long-term vision of the organization.

As on March 31, 2025, the Company had a total workforce of 10 employees. Despite the compact size, the team has displayed exceptional dedication, professionalism, and alignment with the Companys strategic goals. The Board of Directors places on record its deep appreciation for the commitment, contribution, and efforts of all employees across all levels during the year under review. Comfort Intech Limited continues to adopt agile and forward-looking human resource practices in response to the evolving business environment. The Company maintains cordial and harmonious industrial relations and ensures a safe, respectful, and inclusive workplace for all. The Nomination and Remuneration Committee periodically evaluates the career development and succession planning of Board, Key Management Personnel, Senior Management and other key positions, identify and mentor individuals with the capacity to lead strategic initiatives and drive future growth.

The Company remains committed to being an equal opportunity employer, practicing non-discrimination across all areas of employment. We recognize that a motivated and engaged workforce is critical for business success, and have therefore implemented people-centric policies to attract, retain, and nurture top talent. A robust learning and developed ecosystem ensure that each employee, whether a new joiner or a long-tenured team member, is equipped with role-specific and need-based learning opportunities. These tailored interventions help enhance individual capabilities and prepare our workforce for future challenges.

We continue to foster a transparent, performance-driven, and inclusive work culture where individual potential is respected, and innovation is encouraged. Regular feedback, career planning support, and a positive workplace environment help our employees stay engaged and aligned with the Companys mission.

OUTLOOK

In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the Indian economy has demonstrated remarkable resilience and robust growth. The above findings are from Reserve Bank of Indias March 2025 bulletin which highlights the state of the economy in the country. The latest data-driven analysis underscores the strength of domestic fundamentals amidst a volatile global backdrop. While global economic uncertainties persist, Indias economy shows strong growth, supported by robust consumption and government spending. Inflation has moderated, and policy measures have helped stabilize market liquidity. However, foreign portfolio outflows and currency depreciation remain key risks.

From April 2024 to February 2025, Indias exports inched up by 0.1% to $395.6 billion. However, merchandise exports saw a notable year-on-year decline of 10.9% in February, mainly due to base effects and weaker global demand. The top-performing export sectors during the period included electronics, rice, and ores, which continued to show strong demand in international markets.

On the import side, total imports rose by 5.7% to $656.7 billion during the same period, driven largely by higher demand for gold, electronics, and petroleum. Interestingly, February 2025 saw a sharp 16.3% drop in imports, which helped narrow the trade deficit for the month. Imports of electronic goods and machinery remained robust, indicating healthy domestic investment activity and rising industrial demand.

Changing lifestyles and shifting demographics are significantly shaping Indias alcohol industry. A younger, increasingly urban population is driving demand, with many viewing alcohol consumptions as a form of entertainment and social engagement. As these trends continue, the industry is seeing a steady rise in consumption, particularly among the youth in urban centers.

Indias foodgrain production for 2024–25 is projected to reach 330.9 million tonnes, a 4.8% increase over the previous year. This growth is supported by a 6.8% rise in kharif output and a 2.8% increase in rabi production, according to the second advance estimates.

The Company is engaged in Liquors Manufacturing & Trading of Goods Industry which are performing well and are expected to grown in future globally resulting in numbers of opportunity. Further, the Company is expanding its activities, consistent with its status of sector and needs of economy resulting in its moving towards more annuity sources of earnings. The management is optimistic about the future outlook of the Company.

CAUTIONARY

This Management Discussion and Analysis may contain forward-looking statements based on current expectations, assumptions, and projections. Actual results may differ materially due to various risks and uncertainties, including economic conditions, regulatory changes, tax policies, legal developments, and industry dynamics. The risk information provided is not exhaustive and is for general reference only. Readers are advised to consult the Companys official regulatory filings and exercise independent judgment when evaluating business risks.