MANAGEMENT DISCUSSION AND ANALYSIS

Economy Overview

During the year under review, there was a significant change in the overall macro Economic Environment in India. Based on the revised estimates by the Central Statistical Organisation, India's GDP for FY 2015 is estimated at 7.3% making it one of the fastest growing major economies. Various positive government initiatives that have benefited the Indian economy include the deregulation of diesel prices, the implementation of direct benefit transfers which enabled subsidies to be better targeted, the thrust given to financial inclusion and opening up of foreign direct investment in sectors such as in insurance, construction and defence.

According to the Central Statistical organisation of the Government of India, growth of real gross value added, the new measure of national income is estimated at 7.3% for FY2015 which, if it were to happen, would be 0.9% points higher than the 6.6% growth achieved in FY2014. The lower food prices have contributed to a fall in Consumer Price Index (CPI) from an average of 8.7% between FY2012 and FY2015 to 5.2% in March 2015. The current account deficit is brsently at 1.7% of GDP, which is better than what it was earlier.

Despite of positive developments, it would be fair to say that conditions in FY2015 continue to be challenging and was difficult for the Banking and Financial services sector as a whole. At 9.5%, credit growth was its lowest in the last 18 years. Low credit growth plus high non-performing assets have resulted in banks being reluctant to pass on the benefits of the eased liquidity and rate cuts.

Interest Rate Scenario

Given the RBI's stance of keeping the economy on disinflationary glide path, the central bank kept rates unchanged for most of the year under review. However, lower than the expected inflation since September 2014 due to decline in commodity prices particularly crude oil and lower food inflation provided headroom to lower interest rates. The Reserve Bank of India has cut policy rates by 25 bps in January 2015 followed by another 25 bps in March 2015. There was a reduction in Statutory Liquidity Ratio in three tranches of 50 bps in June 2014, August 2014 and February 2015.

The RBI has done well be setting a target for the Consumer Price Index (CPI) which was a landmark change in its monetary policy.

As an NBFC, company continued its crucial and critical role for overall financial system. The Union Budget FY2016 clearly stated that NBFC's registered with RBI and having asset size of more than Rs. 500cr shall be classified as a Financial Institution in terms of SARFAESI Act, 2002.

Your Company ("CTL") focuses on extending credit facilities to individuals, business entities whether proprietorship, partnership firms, companies or any other legal entity. The money is advanced for both personal and commercial purposes. CTL is a growing name in the market and have future plans to survive in highly competitive market. CTL continues to sustain its position in the market and is striving against its competitors. The Company at brsent includes personal loan, business loan, inter-corporate loans, short term working capital finance and loan against property in its working portfolio. Further, to its future objectives your company is planning to launch Equipment Financing and Venture Capital Financing as its new products in market.

Business outlook

We expect to maintain our performance in FY2015 and hope to grow at a rate faster than the growth of bank credit. The approach would be to continue with the growth momentum while balancing risk. As before, it will continue to invest in strengthening risk management practices; and in maintaining our investment in technology and human resources to consolidate a position as a leading NBFC in India.

RBI's norms and standards

Capital Trade Links fulfils norms and standards laid down by the RBI applicable to Non-Banking Financial companies.

Risk management and portfolio quality

CTL, being in the business of finance, has to manage various risks. The constant changes in policy rates and SLR in FY2015 has smoothened market trends and has watermarked a significant importance of NBFC.

As an NBFC, your company is exposed to credit risk, liquidity risk and interest rate risk. A combrhensive and integrated risk management framework forms the basis of de-risking efforts of the company. Your Company has formed a designated Risk Management committee who at regular intervals monitors the upcoming risks that can affect your company and its market. Formal reporting and control mechanism along with regular update about the market trends ensures proactive risk management. The performance of capital market in India has a direct correlation with the prospect of economic growth and political stability. Excessive dependence on any single segment has the potential to impact profitability and credit risks increases. The sustainability of the business is derived from the following:

?Identification of the diverse risks faced by the company.

?The evolution of appropriate systems and processes to measure and monitor them.

?Risk management through appropriate mitigation strategies within the policy framework.

?Monitoring the progress of the implementation of such strategies and subjecting them to periodical audit and review.

? Reporting these risk mitigation results to the appropriate managerial levels.

Non availability of resources with right skill at right time may pose risk to the company. The currency volatility and exchange movements results into transaction and translation risks.

SUBSIDIARY COMPANY

As there are no subsidiaries of the company, investment made in subsidiaries is NIL.

HUMAN RESOURCES

The Company's continues to lay emphasis on people and relations with the employees and continued to be cordial. The ability to attract & retain talent is critical. There are changes done in the internal atmosphere of the company and many new trained and skilled personnel were introduced within organization.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUENCY

CTL has in place adequate systems of internal control commensurate with its size and the nature of its operation. The well defined delegation of power with authority limits for approving revenue as well as expenditure is internal control management technique. The company has further strengthened its internal audit function for effective controls. The Audit Committee of the Board of Directors reviews the adequate control systems and audit reports submitted by the internal auditors. Suggestions for improvement are considered and the management follows the corrective actions.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis report describing company future plans & objectives and estimates & expectations may be forward looking within the meaning of applicable laws and regulations. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those exbrssed or implied since the company's operations are affected by the many external and internal factors, which are beyond the control of the management.