Comfort Intech Ltd Management Discussions

Global Economic Overview

Entering FY 2026-27, the global economy is navigating significant crosscurrents, characterized by the opposing forces of geopolitical conflict and rapid technological advancement While global activity was tempered by the negative supply shock induced by the ongoing conflict in the Middle East, the economy demonstrated unexpected resilience in several regions, bolstered by a demand-driven upturn in the global technology cycle. Elowever, elevated energy prices, renewed inflationary pressures, and persistent trade policy uncertainty continued to pose challenges to sustained investment and operational stability.

The International Monetary Fund (IMF), in its July 2026 World Economic Outlook Update, projected that global economic growth would moderate to 3.0% in 2026, down from 3.5% in 2025, before recovering to 3.4% in 2027. Growth across regions is expected to remain highly uneven, reflecting countries differing exposure to the conflict in the Middle East and their integration within the global technology value chain. The IMF projected advanced economies to grow at approximately 1.7% in 2026, while emerging market and developing economies were expected to expand by 3.8%, with high-tech exporters in Asia expected to significantly outperform these averages.

The gradual disinflation trend witnessed in previous years stalled during the period, with global headline inflation projected to rise to 4.7% in 2026 from 4.1% in 2025. This resurgence was primarily driven by surging energy and food prices resulting from supply disruptions and geopolitical tensions. Consequently, monetary authorities have adopted a cautious, and in some cases tighter, policy stance, with major central banks expected to keep policy rates elevated until inflation shows a sustained path toward target.

Global trade volume growth is expected to slow sharply to 3.5% in 2026, compared to 5.0% in 2025, reflecting the impact of shipping disruptions and the drag from increased tariffs. Trade linkages and production chains are undergoing gradual adjustment through rerouting, trade diversion, and diversification as businesses seek to mitigate geopolitical risks and navigate evolving tariff policies. Despite these broader headwinds, technology-related trade flows remained a resilient and robust component of global commerce.

Technology is expected to remain one of the principal drivers of global economic activity during FY 2026-27. Accelerating momentum in the global technology cycle, driven by continued investment in and deployment of artificial intelligence (Al) technologies, is expected to provide a significant boost to productivity and growth in well-integrated economies. These structural investments in Al hardware, digital infrastructure and high-tech manufacturing are expected to create new opportunities across multiple sectors, helping to offset some of the macroeconomic effects of commodity market disruptions.

Overall, FY 2026-27 is defined by a delicate balance between war-induced supply shocks and the transformative potential of technology. While risks have become more balanced compared with earlier assessments, downside risks remain significant, including renewed geopolitical conflict, trade fragmentation, persistent inflationary pressures and financial market volatility. Nevertheless, the ongoing digital transformation and a projected recovery in 2027 provide a constructive foundation for global growth. Key policy priorities for the period ahead include restoring price stability, rebuilding fiscal buffers, and strengthening international cooperation to relieve the strain of ongoing tensions.

Source: International Monetary Fund (IMF), World Economic Outlook Update, July 2026.

Global Economic Growth Projections

2025-2027

Indian Economic Overview

India maintained its position as one of the worlds fastest-growing major economies during FY 2025-26, demonstrating resilience despite an uncertain global environment marked by geopolitical tensions, evolving trade policies, and financial market volatility. According to the First Advance Estimates of National Accounts released by the Ministry of Statistics and Programme Implementation (MoSPl) and discussed in the Economic Survey 2025-26, the Indian economy is estimated to have recorded real GDP growth of 7.4%, improving from 6.5% in FY 2024-25, reflecting the strength of domestic demand and the countrys robust macroeconomic fundamentals.

Economic growth during the year was primarily driven by private final consumption expenditure and gross fixed capital formation, supported by healthy consumer demand, sustained public and private investment, and continued infrastructure development.

From the production perspective, the services sector continued to be the principal engine of economic expansion, supported by strong performance in financial services, information technology, telecommunications, logistics, and other knowledge-intensive industries. The manufacturing sector also recorded healthy growth, aided by improving domestic demand, government initiatives to strengthen industrial competitiveness, and continued investments under various manufacturing promotion schemes.

Government initiatives aimed at improving agricultural productivity, irrigation, technological adoption and food security continued to support the sectors long-term resilience and development.

Inflation moderated during much of FY 2025-26, supported by calibrated monetary policy and easing supply-side pressures, although periodic volatility in food prices remained a challenge. The Reserve Bank of India continued to balance the objectives of maintaining price stability while supporting economic growth. Meanwhile, Indias banking system remained well capitalised, credit growth continued across productive sectors of the economy, and digital financial infrastructure further strengthened financial inclusion.

Government policy continued to focus on infrastructure creation, manufacturing competitiveness, digital transformation, renewable energy, logistics efficiency, and ease of doing business. Flagship initiatives such as PM Gati Shakti,the National Infrastructure Pipeline (NIP), Production Linked Incentive (PLl) Schemes, Digital India, and Make in India continued to support investment, employment generation, and long-term economic competitiveness.

Overall, Indias strong domestic consumption, sustained capital investment, resilient services sector, improving manufacturing activity, and continued policy reforms enabled the economy to outperform most major global economies during FY 2025-26. While external risks arising from global trade developments, geopolitical uncertainties, and commodity price volatility remain, Indias diversified economic base, favourable demographics, and ongoing structural reforms provide a strong foundation for sustained long-term growth.

Source: MoSPl National Accounts Statistics (First Advance Estimates), Government of India, Economic Survey 2025-26; Reserve Bank of India, Annual Report 2025-26.

Industry Overview and Developments Liquors Industry

The Indian alcoholic beverages industry presents a favourable long-term growth outlook, supported by rising disposable incomes, rapid urbanization and a large adult consumer base. India continues to be one of the worlds most attractive long-term beverage alcohol markets, driven by favourable demographics, increasing premium consumption and evolving consumer preferences.

Premiumisation remains one of the industrys key structural drivers; notably, India remains a global outlier, with the shift towards higher-value products continuing despite a slowdown in several other major markets. This transition is supporting value-led growth, with industry revenues projected to increase by 10-12% in FY2026, significantly outpacing modest volume growth of 1-2%.

The industry operates within a complex, fragmented regulatory framework where state-specific excise policies govern pricing and distribution. While these regulations present challenges, operating margins for organized industry participants are expected to remain in the range of 13-14%, supported by a richer product mix, price revisions approved by state governments and relatively stable input costs.

The market features a diverse portfolio, including IMFL, beer, wine and emerging premium segments such as RTDs, craft spirits and Indian single malts. For FY2026, the sector is expected to witness divergent volume trends, with beer demand remaining relatively steady while spirits volumes are expected to remain subdued amid inflationary pressures and taxation-related challenges. Sustained investments in brand building and premiumisation are expected to maintain this value-led trajectory over the medium to long term.

Source: ICRA Limited, Alcoholic Beverages - Annual Update (September 2025); IWSR, Flow to Win in Indias Beverage Alcohol Market (2026).

Trade Industry

The Indian consumer durables market is one of the fastest-growing segments of the economy, attracting global interest due to its vast consumer base and rising disposable incomes. The sector spans consumer electricals such as fans, lighting devices, and kitchen appliances, as well as white goods including washing machines, televisions, refrigerators, and air conditioners. With its mix of a large middle class, a growing affluent population, and increasing penetration into rural markets, India is viewed as a key driver of global demand in the years ahead.

Market dynamics continue to shift in favor of organized players, supported by increasing brand consciousness, product quality, expanding distribution networks, and greater penetration of e-commerce. This transition is expected to create opportunities for organized players to strengthen their market position. At the same time, emerging trends such as artificial intelligence, manufacturing automation, and Industry 4.0 are reshaping production processes. Investments in R&D and technology infrastructure are expected to enhance manufacturing efficiency, while greater consumer awareness of smart technologies will fuel adoption across categories. The sectors strong growth is evident in recent figures.

Rising urbanization, increasing disposable incomes, favourable demographics, and greater penetration of organized retail and e-commerce are expected to continue driving demand for consumer durables across both urban and rural markets. Supported by ongoing government initiatives, investments in domestic manufacturing capacity, and continued technological innovation, the industry is well positioned to sustain its long-term growth trajectory.

Source: India Brand Equity Foundation (iBEF); Government of India, Press Information Bureau (PIB).

About Comfort Intech Limited

Comfort Intech Limited (CIL or the Company) was originally incorporated as a public limited company under the name Comfort Finvest Limited on October 17,1994. Subsequently, the Companys name was changed to Comfort Intech Limited with effect from March 2000. Over the years, under the leadership of Mr. Anil Agrawal and Mr. Ankur Agrawal, the Company has evolved from its initial focus on investment activities into a diversified business enterprise. Today, the Company operates through two key business verticals:

1. Manufacturing, bottling & distribution of Indian Made Foreign Liquor (IMFL); and

2. Trading of Goods

Through these business segments, the Company remains focused on strengthening operational capabilities, expanding its market presence and pursuing sustainable growth opportunities.

Business Overview

1. Manufacturing, bottling & distribution of Indian Made Foreign Liquor

The Company is engaged in the manufacturing, bottling, marketing and distribution of Indian Made Foreign Liquor (IMFL) through its subsidiary, Liquors India Limited (LIL) which operates a licensed distillery in Telangana. The Company owns and markets premium proprietary brands such as Deccan Blue & Gold Mark Whisky. In addition to marketing its own brands, the Company also undertakes contract manufacturing and bottling for leading industry participants, enabling efficient utilisation of manufacturing capacity and strengthening its production capabilities.

2. Trading of Goods

The Companys Goods Trading business comprises the trading of consumer durables, electronics, textiles and related products through e-commerce platforms and offline distribution channels. During the financial year 2025-26, the Company also expanded the scope of this business by entering the agricultural commodities segment and undertook the necessary regulatory and business processes to support this diversification.

Segment Wise Performance

1. Liquors Segment

During the year under review, the Companys IMFL business continued to focus on strengthening its manufacturing and bottling operations while maintaining its presence across south Indian states, including Telangana, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. Contract bottling activities remained an important contributor to manufacturing capacity utilisation. The Company continued to evaluate opportunities to strengthen its proprietary brand portfolio, particularly in the premium and semi-premium segments, while exploring opportunities to expand its geographical presence into additional markets. These initiatives are expected to enhance brand visibility, optimize the product mix and support sustainable long-term growth.

2. Goods Trading Segment

During the year under review, the Goods Trading segment continued to operate across multiple consumer product categories through online and offline distribution channels. The Company also commenced trading in agricultural commodities, including imports and domestic sales, after amending the Object Clause of its Memorandum of Association to include the same. Going forward, the Company intends to diversify its trading portfolio, strengthen sourcing and distribution capabilities and pursue sustainable growth opportunities across identified product segments.

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

(Rs.in Lakh)

Sr. No. Particulars	Income from operations		Profit before Depreciation, Tax and Finance Cost
	2025-26	2024-25	2025-26	2024-25
1 Trading in Goods	9,172.38	10,512.11	643.70	561.60
2 Liquor Division	7,371.24	6808.22	310.74	311.34
3 Financing	329.93	228.33	329.93	228.33
4 Leasing of Immovable Properties	42.81	43.34	41.56	38.34

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.

Scot Analysis

Strategic Strengths

• Established presence in the Telangana IMFL market with a diverse portfolio of brands.

• Integrated manufacturing capabilities through its subsidiary, enabling greater control over production and quality.

• Additional revenue stream through contract bottling for reputed industry participants.

• Diversified Business model

• Experienced management with expertise in the relevant industries.

• Strong Net Worth strengthened by a Robust Equity Base.

Challenges

• Business operations are concentrated in a limited number of states, resulting in geographical concentration risk.

• Limited brand recognition compared to large national and multinational IMFL companies.

• Dependence on state excise policies and licensing frameworks for business operations.

• Smaller scale of operations may limit economies of scale and bargaining power in procurement.

• Increased Regulatory Compliances

Growth Opportunities

• Growing demand for premium and semi-premium IMFL products driven by changing consumer preferences.

• Expansion in goods-trading, agro-trading & e-commerce;

• Rising urbanisation, increasing disposable incomes, and favourable demographic trends supporting long-term demand.

• Advancements in Technology Threats/ Key Business Risks

• Frequent changes in state excise policies, taxation, and licensing regulations resulting in high compliance costs.

• Highly regulated industry

• Intense competition from established domestic and international IMFL manufacturers.

• Regulatory restrictions on advertising and brand promotion limiting consumer outreach.

• Economic slowdowns or changing consumer preferences that may impact discretionary spending on alcoholic beverages.

• Domestic and International Political Situations

Risks & Concerns

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 recognises that effective risk management is integral to achieving its strategic objectives and ensuring sustainable growth. The Company has established a structured risk management framework to identify, assess, monitor and mitigate key risks arising from its business operations, including regulatory, operational, financial, market and compliance-related risks.

Given the regulated nature of the alcoholic beverages industry and the evolving dynamics of the goods trading business, the Company periodically reviews its risk landscape and implements appropriate controls to address potential challenges. Key risks and mitigation measures are reviewed by the Audit Committee, with oversight and guidance from the Board of Directors, to strengthen risk governance and enhance business resilience.

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

Following are the kinds of Risks which are faced by the Company

• Market Risk: This is a type of risk that arises due to adverse changes /volatility in the market. This risk is further classified into the following sub-categories -

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 agricultural 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 agricultural 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. This risk can further be classified into-

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 risk is associated with Food & Beverages and Pharmaceuticals Industries.

Internal Control System and its Adequacy

GOVERNANCE & OVERSIGHT

Strong governance and oversight at the Board and management level.

The Company has established a comprehensive internal control framework commensurate with the size, nature and complexity of its business operations. The internal control systems are designed to ensure the orderly and efficient conduct of business, safeguarding of assets, accuracy and reliability of financial reporting, compliance with applicable laws and regulations, and adherence to approved policies and procedures.

The Company has implemented well-defined organisational structures, documented standard operating procedures, delegated authority matrices and maker-checker mechanisms across key business functions. These controls facilitate effective monitoring of manufacturing operations, procurement, inventory management, sales, finance, statutory compliance and other critical business processes.

The Companys internal control framework is supported by regular management reviews, risk-based internal audits, continuous monitoring of key operational and financial controls, and timely implementation of corrective actions wherever necessary. The internal control environment is periodically reviewed and strengthened to address evolving business requirements, operational risks and regulatory developments.

To provide independent assurance on the effectiveness of the internal control systems, the Company has appointed M/s. AHSP & Co. LLP, Chartered Accountants, as its Internal Auditor. The Internal Auditor conducts periodic audits based on a risk-oriented audit plan approved by the Audit Committee and submits its observations and recommendations to the Audit Committee and the Board of Directors. The management takes appropriate corrective and preventive actions on the audit observations within defined timelines, and the implementation status is periodically reviewed.

The Audit Committee provides oversight of the Companys internal financial controls, internal audit function and risk management framework. Based on the internal audit reports, management reviews and the oversight exercised by the Audit Committee and the Board of Directors, the Company believes that its internal financial controls are adequate and operating effectively and are commensurate with the nature, size and complexity of its business. The Company continues to strengthen its control environment through process improvements, technology adoption and continuous monitoring to support sustainable business growth and compliance with the applicable provisions of the Act and other regulatory requirements.

The Company recognises its employees as a valuable asset and key contributors to its sustained growth, operational excellence and long-term competitiveness. The Companys human capital plays an important rolein enhancing productivity,fostering innovation, ensuring compliance and supporting the continued development of its businesses.

As on March 31, 2026, the Company had a total workforce of 12 employees.

During FY 2025-26, the Company continued to focus on strengthening its human resource capabilities through structured talent acquisition. Recruitment efforts were aligned with business requirements, ensuring the availability of skilled manpower across all business functions. Emphasis was also placed on attracting and retaining talent in key operational and managerial roles.

Continuous learning initiatives and on-the-job training were provided to improve workforce capability and ensure adherence to quality standards, safety protocols, and compliance requirements.

Employee engagement remained a key focus area, with initiatives designed to promote motivation, collaboration, and a performance-driven culture. The Company has also implemented welfare measures to support employee well-being, safety, and work-life balance, thereby fostering a positive and inclusive work environment.

The Company continues to invest in building a competent, motivated, and future-ready workforce aligned with its longterm strategic objectives. Focus remains on enhancing organizational capability, improving productivity, and fostering a culture of accountability, discipline, and continuous improvement across all levels of the organization.

Outlook

Despite continued uncertainties in the global economic environment, Indias economic outlook for FY 2026-27 remains favourable, supported by resilient domestic demand, prudent macroeconomic management and a stable financial system. Strong corporate and banking sector balance sheets, alongside the Governments continued focus on infrastructure development and capital expenditure, are expected to support investment activity. Indias expanding trade and economic partnerships, coupled with improving supply chain resilience, are expected to support its medium- term growth prospects. While geopolitical developments and global economic uncertainties remain key external risks, Indias strong economic fundamentals provide resilience against such challenges.

State of the Economy

Indias growth outlook remains supported by strong domestic fundamentals and broad-based economic activity. According to the Economic Survey 2025-26, real GDP growth is projected in the range of 6.8-7.2% for FY 2026-27, supported by sustained consumption demand, improving investment activity and continued policy support. The agricultural sector is expected to contribute positively, subject to normal monsoon outcomes, through improved rural

incomes and consumption, while urban demand is likely to benefit from favourable consumer sentiment and evolving spending patterns.

Indias medium-term growth prospects remain favourable, supported by structural drivers including urbanisation, rising disposable incomes, infrastructure development and increasing formalisation of the economy. These factors are expected to continue supporting consumption-led growth across various sectors.

The alcoholic beverages industry is expected to benefit from structural demand drivers, including premiumisation, changing consumer preferences and expanding consumption occasions, particularly in urban markets. Growing demand for premium and value-added products is creating opportunities for manufacturers to strengthen their product portfolios and enhance value realisation.

Similarly, the consumer durables and electronics segment, in which the Company also has trading operations, is expected to benefit from rising household incomes, increasing digital adoption and expanding demand across tier-ll, tier-ill cities and rural markets. These trends provide growth opportunities for businesses operating across consumer product categories.

Against this backdrop, the sectors in which the Company operates continue to demonstrate favourable long-term growth potential. The Company remains focused on strengthening its operational capabilities, expanding its market presence and pursuing opportunities that enhance revenue stability and profitability.

Overall, Indias resilient macroeconomic fundamentals, supported by moderating inflation, a stable financial system, fiscal consolidation and sustained public investment, provide a supportive environment for long-term economic growth and business expansion.

Source: Reserve Bank of India, Annual Report 2025-26; Government of India, Economic Survey 2025-26; India Brand Equity Foundation (iBEF)

Cautionary

The statements contained in this Management Discussion and Analysis describing the Companys objectives, outlook, expectations, projections, estimates and business plans may constitute forward-looking statements within the meaning of applicable laws and regulations.

These statements are based on certain assumptions, expectations and estimates of future events and are therefore subject to various risks, uncertainties and other factors, many of which are beyond the Companys control.

Actual results may differ materially from those expressed or implied in such forward- looking statements due to various factors, including but not limited to changes in economic conditions, interest rates, inflation, liquidity, credit demand, asset quality, regulatory and policy changes, competitive developments, geopolitical events, technological advancements and other factors affecting the financial services industry.

The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable laws. Readers are advised to exercise due caution while interpreting these statements and should consider them in conjunction with the risks and uncertainties discussed in this Annual Report.