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MACROECONOMIC OVERVIEW

After worldwide recovering from the COVID-19 pandemic to a successful vaccination drive, short lived Omicron wave, the Russia - Ukraine war crisis, inflationary trends, supply chain disruptions emanating from China and so forth, resilience of global economy stood out by manoeuvring the challenges in the financial year 2022-23. Although, the global economy is gradually recovering from the series of disruptions, according to the International Monetary Fund (IMF), the forecast of global growth is to fall from 3.5% in 2022 to 3.0% in both 2023 and 2024 respectively. Global inflation is expected to fall from 8.7% in 2022, to 6.8% in 2023 and 5.2% in 2024. However, amidst the disruptions and the tightening of monetary policy, certain economies are expected to exhibit resilience.

Despite critical challenges, India emerged as the fastest growing major economy in the world. The World Bank estimates that the Indian economy will grow by 6.3% in 2023. Indias economy registered a strong growth of 7.2% in 2022-23, the highest among major economies in the world, amidst a global turmoil following the war in Ukraine. Indias Gross Domestic Product ("GDP") experienced double-digit growth of 13.1% in Quarter 1 of financial year ("F.Y.") 2022-23 followed by growth of 4.5 %, 6.2% and 4.5% in Quarter 2, 3 and 4 of F.Y. 2022-23 respectively.

The Monetary Policy Committee of the Reserve Bank of India ("RBI") in their 36th meeting took a unanimous decision to increase the repo rate by 40 basis points. Further, The Union Budget F.Y. 2023-24 aimed at enhancing the nations positioning with increased effective capital expenditure to Rs. 13.7 Lakh Crore, which will be 4.5 % of GDP.

There has been expansion as well as evolution in Indias Breweries & Distilleries industry. Entry of new companies in the industry, rising income, technological innovations, and reforms by the government are some of the main reasons for the expansion. To expand business, your Company is working to meet the need of future and forthcoming demands of customers to have an edge over competitors.

INDUSTRY OVERVIEW AND DEVELOPMENTS

Securities Market Industry: -

As compare to previous years, following two years has exceptional performance, the equity markets took a breather in 202223, with the benchmark indices Nifty 50 and Sensex ending the year on a flat note, posting -0.6 and 0.7 per cent returns respectively. An increase in retail investors in capital markets can be seen as an industrys new account openings. According to available information, a growing proportion of new investors are of a younger age group (less than 30 years). However, the retail broking segment has also gain more dynamic and has seen significant disruption in recent years due to the growing prominence of discount brokerages. Their competitively priced offerings, as well as no-frills basic accounts and services, have resulted in a realignment of pricing strategy across the industry. Several Private Equity Funds have been successful in gaining investors confidence with stellar returns over the years.

Liquors Industry: -

India is one of the fastest growing liquor markets in the world. Alcoholic beverages are considered a sunrise industry owing to its high-growth potential and increasing social acceptance. Liquors industry in India is expending due to market size, distinct class population with increased purchasing power, rapid urbanization, changing consumer preferences and a reduction in cultural barriers to drinking. Although the average per adult intake of alcohol is still considerably low in India when compared to other countries, numbers of young Indians drinkers is at increasing stage.

On the other side, many challenges were faced by spirit industry in recent years, which aroused from excise duty hikes across states, changes in route-to-market in some states, demonetization, highway ban and GST implementation.

Trade Industry: -

Indian retail market has always been at its peak. Retailers had reported growth of 23% in April 2022 as compared to prepandemic period (April 2019) and 41% growth when compared to sales level in April 2021 (Year on Year Basis). India market is more technology friendly which inter-alia includes internet and smartphone, electronic gadgets. Indian e-commerce is 60 billion market, which means there is a lot of scope for growth and constructive remodeling. It has transformed the way business performances and has opened various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B).

Financial Services Industry: -

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises:

> Commercial banks,

> Insurance companies,

> Non-banking financial companies,

> Co-operatives, pension funds,

> Mutual funds,

> Other smaller financial entities, etc.

The Government has initiated various policies and schemes that are favourable for the growth of the financial service sector.

ABOUT COMFORT INTECH LIMITED

The Comfort Intech Limited (CIL or the Company) was originally incorporated as Public Limited Company in 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 was obtained on March 24, 2000.

BUSINESS OVERVIEW

Currently, the Company is engaged in the business of trading in Shares, investment in Mutual Funds, goods in various categories such as consumer appliances and durables, 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 the offline channels of distribution as well, financing, leasing of Immovable Properties. Further, the Company is also engaged in carrying on the business as distillers, manufacturers, procurers, importers, exporters, agents, brokers, suppliers, processors, vendors, bottlers, distributors, stockists, dealers, godown keepers, C&F Agents, del-credere agents, marketers, merchandisers, wholesalers of all types of spirits, whether rectified or otherwise, including India Made Foreign as well as Country, Beverage and others similar products.

PRODUCTS & SERVICES

Our Company offers services to commercial, industrial and financial clients with a one stop solution as follows:

FINANCIAL PERFORMANCE

The following table presents Companys abridged financials for the financial year 2022-23, including revenues, expenses and profits.

(Rupees in Lakh, Except EPS)

PARTICULARS	STANDALONE		CONSOLIDATED
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	16,412.41	13,210.58	16,412.41	13,210.58
Other Income	90.40	41.06	90.40	41.06
Total Income	16,502.81	13,251.65	16,502.81	13,251.65
Total Expenditure	15,705.62	12,599.90	15,705.62	12,599.90
Profit before Tax	797.19	651.74	797.19	651.74
Current Tax Expenses	184.61	117.37	184.61	117.37
Deferred Tax	23.93	51.60	23.93	51.60
Tax of earlier years	(0.52)	2.78	(0.52)	2.78
Profit for the Year	557.10	276.32	669.94	578.04
Earnings Per Share (EPS) (Basic & diluted)*	0.18	0.15	0.22	0.24

*Note: Subsequent to quarter ended March 31,2023, the equity shares of the Company were splited/ sub-divided such that each equity share having face value of Rs. 10/- (Rupees Ten only) fully paid-up, were sub-divided into ten (10) equity shares having face value of Re. 1/- (Rupee One only) each, fully paid-up with effect from April 14,2023 (Record Date). Therefore, the Earnings Per Share (EPS) for the financial year ended March 31,2023 and all comparative periods presented above have been restated to give effect of the share split.

During the year under review, your Companys total revenue from operations on consolidated basis increased to Rs. 16,412.41 lakh as compared to Rs. 13,210.58 lakh in the previous financial year. The Net profit increased to Rs. 669.94 lakh as compared to Rs. 578.04 lakh in the previous financial year.

During the year under review, your Companys total revenue from operations on standalone basis increased to Rs. 16,412.41 lakh as compared to Rs. 13,210.58 lakh in the previous financial year. The Net profit increased to Rs. 557.10 lakh as compared to Rs. 276.32 lakh in the previous financial year. The Management continues to concentrate its efforts to increase the revenue of the Company by identifying new opportunities.

Details of Significant changes, if any, in the Key Financial Ratios, along with the detailed explanation thereof:

Details of significant changes, if any, in the Key Financial Ratios, along with the detailed explanation are provided in the accompanying financial statements which form part of this Annual Report. Return on Net worth of the Company is increased to 0.053 in the financial year 2022-23 as compared to the previous financial year due to increase in Profit after Tax of the Company.

SEGMENT WISE PERFORMANCE

1. Liquors Division -

The said division of the Company is in the business of manufacturing of Liquors and distribution of alcoholic beverages under IMFL category in the state of Telangana under its own brands. Further, the Company has also invested in Liquors India Limited ("LIL") which is its associate company, and is a distillery and has all the manufacturing licenses in place for IMFL manufacturing and is engaged in Bottling for various Liquors companies. LIL is an unlisted Public Company incorporated under the Companies Act, 1956 on January 16, 1975 having its registered office at Telangana, Hyderabad. LIL mainly does bottling activity for various liquor companies under their respective brands.

LIL holds an Indian Made Foreign Liquors ("IMFL") License issued by Telangana Prohibition and Excise Department. Presently, your Company CIL avails bottling services from LIL for manufacturing and supply of its own brands in the state of Telangana. LIL also provides its services to 15 other Liquors brands in India including your company.

Margins from manufacturing and selling of liquors were under pressure as a result of increase in price of various raw materials due to the scarce availability and rising inflation. However, the Company managed to secure decent profit even in such conditions. Further, the division is expected to do even better in the current year.

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, 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 is further planning to diversify 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 financial year 2023-24 & onwards.

3. Finance Division -

Finance Division of the company is developing in line with rapid expansion and evolution of Indias financial services sector. Profits of the Company contributed from this division certainly increased as compared to previous financial year as a result of growth in Indias financial sector. Further future performance of this division is expected to be on a positive side.

4. Trading in Shares/Mutual Funds Division -

The Company does trading and investments in selective stocks and mutual funds during the year under review. Value of investments by Company certainly increased with Sensex and Nifty achieving their all-time highs.

• Details of Segment wise performance of the Company 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
		2022-2023	2021-2022	2022-2023	2021-2022
1	Trading in Goods	10,457.69	7,490.72	560.49	309.57
2	Manufacturing in Liquor	5,410.73	5,185.20	32.71	140.28
3	Trading in Shares/Mutual Funds (net)	107.45	205.36	107.34	205.34
4	Financing	341.83	254.16	341.83	281.87
5	Leasing of Immovable Properties	94.70	60.27	91.99	60.27

SWOT ANALYSIS

During financial year 2022-23, your Company addressed several challenges that inter alia resulted from inflation, entry of new companies in market, the Russia - Ukraine war crisis, supply chain disruptions with enhanced focus on protecting the balance sheet and strengthening the business franchise.

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". Risk in simple terms implies the possibility of something uncertain happening.

However, Risk being an integral part of any business, it is necessary to mitigate it. In the business world, the Company experiences numerous types of risks which is base for the achieving of an organizations objectives. While the Indian economy has shown sustained growth over the last several years, a slowdown could cause the business of the Company to suffer. Your Company is exposed to specific risks that are particular to its business and the environment in which it operates. Due to rapid changes in the technologies, business dimensions and complexities, regulatory changes and environmental concerns, new and various risks have emerged.

• Every risk which is identified by the Company goes though following stages in order to be managed effectively: -

The Companys has framed risk management policies to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

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: - The financial assets, which are connected with interest factors faces this risk. Any increase in the interest reduces the price of bonds and debts instruments in debt market and vice - versa. However, your companys borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant.

- Equity risk: - It means the depreciation in investment due to the change in market index. Risk is associated with the day-to-day fluctuations in the market.

> Credit risk: - When a counter party is unable or unwilling to fulfill their contractual obligation, the credit risk arises. This type of risk is related to the probability of default and recovery date. Its effect is measured by cost of replacing cash flow if the other party defaults. Your Company has put in place necessary measures to ensure credit risk.

> Liquidity risk: - The liquidity risk arises due to mis-matches in the cash flow i.e. absence of adequate funds. Liquidity is altogether different from the word solvency. A firm may be in sound position as per the balance sheet, but if the current assets are not in the form of cash or near cash assets, the firm may not make payment to the creditors which adversely affect the reputation of the firm. Your Company ensure that it has sufficient funds to meet its liabilities as & when they arise.

> Legal risk: - This risk arises when company does not have the legal or regulatory authority to engage in the transactions. It also includes the compliance and regulatory risk like insider trading, market manipulations, defaults and mismanagement of legal affairs etc.

- Compliance risk: - Non-compliance or breach of laws/ regulations which the entity is supposed to adhere is referred to as compliance risk. This may also result in deterioration of reputation in public eye, penalty and penal provisions.

- Regulatory risk: - Risk by reason of changes in government policies and perceptions 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.

Every business decision requires the management to balance risk and reward. "Risk Management" is a term used to describe the processes which aim to assist organizations to identify, understand, evaluate and take action on their risks with a view to increasing the probability of their success and reducing the impact and likelihood of failure. The ability to manage risks across geographies, products, asset classes, customer segments and functional departments is of paramount importance for the hindrance free growth of every organization. Different types of risk existing in the business are to be controlled, mitigated and managed. Risk management has become the mechanism to manage risks so that the negative consequences are kept within acceptable tolerances. It is a continuous process. Your Companys top level management is highly committed towards effective & efficient risk management.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company is having an internal control system including suitable monitoring procedures commensurate with its size of operations;

The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations and compliance with internal policies and applicable laws and regulations as well as protection of resources;

The internal control system is supplemented by extensive Internal audits, regular reviews by the management and standard policies and guidelines which ensure effective operation of defined control, reliability of financials and all other records;

Your company has appointed M/s. AHSP & Co. LLP, Chartered Accountants as Internal Auditor of the Company who carries out the internal audit functions of the Company and review of internal control mechanisms prevailing in all the Divisions of the Company and submits the report to the Audit Committee and Board of Directors of the Company from time to time. Immediate corrective actions are taken on the recommendations/ suggestions, in any, made by Internal Auditor in such report;

Further the Internal Auditor has certified that the Company maintains an adequate system of internal financial controls, evaluates and makes an assessment of its adequacy and effectiveness in a satisfactory manner which takes care of requirements under the Companies Act, 2013.

HUMAN RESOURCES (HR)

People are our key pillars of strength. Human Capital is the core strength in achieving the sustainable growth path charted by our strategic apex as it plays an important role in developing, reinforcing, and enhancing the culture of an organization. As on March 31, 2023, your Company had a total head count of 10 employees. The Directors wish to place on record their appreciation and acknowledgment for the efforts and dedication and contributions made by employees at all levels during the year under review.

Comfort Intech Limited has consistently been agile and has improved its human resource practices to match up to the dynamic workplace. The Company has very cordial and harmonious relationship with its employees. The Nomination and Remuneration Committee periodically reviews career growth plan of senior management personnel possessing ability to build teams and nurture leaderships for future growth plans of the Company.

Your Company has adopted people practices that enable us to attract and retain talent in an increasingly competitive market; and to foster a work culture that is always committed to providing the best opportunities to employees to realize their potential.

We are committed as an equal opportunity employer and follow non-discrimination in all our practices. All employees, from a new joiner to a tenured one, are provided tailored learning opportunities as per their role, level, and specific focus area.

OUTLOOK

Different sectors in the economy are undergoing different modes of revival, coming years will be challenging as well as full of opportunities. The overall outlook seems to be very positive as a result of India achieving highest GDP growth in financial year 2022-23 and future growth prediction of 6.1% for financial year 2023-24 as per the International Monetary Fund. In relation to liquors industry, young adults are likely to drive much of the expected and projected future demand as they approach the legal drinking age and become more affluent. The liquors industry is all set for its growth phase. On the other side, there has been increase in restrictions on import & export worldwide which may led to reduction in profits.

Outstanding performance of Indias economy & the positive outlook for growth in the coming period make India one of the best investment destinations for both foreign and domestic investors across various sectors. Further, expectations of peaking interest rates and an uptick in IPOs and other investment exits improve the prospects.

The Company is already providing wide variety of products and will be expanding its activities, consistent with its status of sector and needs of economy resulting in Company moving towards more annuity sources of earnings. The Company is also looking forward to enter into newer areas and expands its customer base. The management is optimistic about the future outlook of the Company.

CAUTIONARY

Statements in the Management Discussion and Analysis describing the Companys objectives, expectations, predictions and assumptions may be forward looking within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed herein, due to uncertainties related to the business model. Important factors that could influence the Companys operations include global and domestic economic conditions affecting demand, supply, price conditions, change in Governments regulations, tax regimes, other statutes and other factors such as litigation and industrial relations. The risk related information provided is not exhaustive and is for information purposes only. Readers are advised to refer to related disclosures in the Companys regulatory filings and exercise individual judgement in assessing risks associated with the Company.