Capital Trade Links Ltd Management Discussions.


In 2019-20, the Indian Economy grew by 4.2% against the 6.1% expansion in 2018-19. Although it was the lowest growth rate in 11 years, the Jan-Mar growth rate of 3.1% (lowest in the 44 quarters) was still higher than the 2.2% growth predicted by most economists and rating analysts.

This was primarily due to fall in three components of demand, that is, slowed consumption demand and negative growth in investments & exports. Government reforms bolstered the formal sector over the past few years; however, income levels in the informal areas suffered as a result. In addition, Credit growth among non-banking financial companies steadily declined due to a freeze in the wholesale money market during most of 2019. This affected overall credit growth, particularly in the informal sector.

Centres gross tax revenues fell an unprecedented 3.4% in 2019-20, while fiscal deficit increased to 4.6% of GDP, well above the revised estimate of 3.8%. (Source: the Hindu)

Outlook for Indian economy for financial year (FY 2019-20) is positive. Favorable factor such as India is now the 6th largest economy in the world compared to 11th largest five years ago. Structural reforms in indirect taxation, bankruptcy and real estate carried out. However by the end of financial year 2019-20 India is facing greatest economic crisis due to COVID-19, Nearly 162 countries are steadily going into lockdown and businesses across the globe are operating in fear of an impending collapse of global financial markets. This situation, clubbed with sluggish economic growth in the previous year, especially in a developing country like India, is leading to extremely volatile market conditions. In India up to 53% of businesses will be affected due to COVID-19. Various businesses such as hotels and airlines are cutting salaries and lay off employees. The live events industry has seen an estimated loss of Rs3,000 crore (US$420 million). Supply chains have also been put under stress with the lockdown restrictions in place and lack of clarity in streamlining what is an "essential" and what isnt. Those in informal sectors or daily wage groups are the most at risk. A large number of farmers around the country who grow perishables are also facing uncertainty


It is imperative to bear in mind that in order to tap the highest potential of the economy and ensure good governance, an optimal level of synergy is required between the central and state government. This will not only add strength to our cooperative federal structure but will also strengthen Indias economy. Initiatives such as -

• Tax Simplification

• Insolvency and Bankruptcy Code (IBC)

• Startup India

• Digital India

• Make In India

These, among others, have helped the Indian economy jump 63 ranks (in the last four years) in the World Banks Ease of Doing Business Report.

These measures cemented Indias reputation as one of the few bright spots in an otherwise grim global economy. India is among the fastest growing major economies, underpinned by a stable macro - economy with declining inflation and improving fiscal and external balances. Not only that, it was also one of the few economies enacting major structural reforms that have positioned India as a competitive player in the international market.

With the improvement in the economic scenario, there have been various investments in various sectors of the economy. Some of the important recent developments in Indian economy are as follows:

• Credit Guarantee Enhancement Corporation to be set up in 2019-2020.

• Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crore

• Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above.

• Capital gains exemptions from sale of residential house for investment in start-ups extended till FY 2020-21.


NBFCs are also important constituents of the financial sector to be strengthened through improved governance. With respect to the Cooperative Banks, amendments to the Banking Regulation Act have been proposed to increase professionalism, facilitate access to capital and improve oversight through RBI. Further, limit for NBFCs to be eligible for Debt Recovery Mechanism via SARFAESI Act, 2002, is proposed to be reduced from existing asset size limits of Rs. 500 crore to Rs. 100 crores or loan size from existing Rs. 1 crore to Rs. 50 lakh.

• Steps to allow all NBFCs to directly participate on the TReDS platform.

• Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore proposed:

o To facilitate on-shoring of international insurance transactions. o To enable opening of branches by foreign reinsurers in the International Financial Services Centre.

• Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.


India has retained its position as the third largest startup base in the world with over 8,900-9,300 startups, with about 1,300 new start-ups being founded in 2019, according to a report by NASSCOM. India also witnessed the addition of 7 unicorns in 2019 till August, taking the total tally up to 24.

Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

Indias foreign exchange reserves were US$ 448.59 billion in the week up to November 22, 2019, according to data from the RBI.


* As per the guidelines of the scheme announced in the budget, the Department of Economic Affairs will provide government guarantee of up to 10% of the fair value of assets purchased by a bank from a stressed NBFC or HFC. The scheme is capped at Rs 1 lakh crore and will be open for up to six months.

* The Department of Financial Services will obtain information on transactions in a prescribed format from PSBs and send a copy to the budget division of the Department of Economic Affairs. The government will settle claims by banks within five working days.

* NBFCs will have to pay a fee to the government, at 0.25% per annum of the fair value of assets sold to banks. They will be able to sell 20% of standard assets, worth up to Rs 5,000 crore, as on March 31.

* Assets sold must be at least equivalent rated and the NBFC/HFC selling assets should have appropriate capital, net NPAs of less than 6% and been profitable for the last two financial years.

• The Government of India has stepped in to provide liquidity support to non-bank lenders, many of whom serve customers at the bottom of the pyramid. In announcements made on Wednesday, the government agreed to provide full and partial guarantees on investments in debt securities issued by non-bank lenders under two different schemes.

• The first scheme is a Rs 30,000 crore special liquidity facility

• Under this scheme, investments can be made in investment grade debt securities of NBFCs, housing finance companies and microfinance institutions. These investments will be fully guaranteed by the government. This facility will help create demand for securities issued by these non-bank lenders and help provide liquidity to them. Risk aversion in the current environment has meant that mutual funds and other investors have been reluctant to buy NBFC debt, leaving bank finance as the only option for them.

• While the first scheme is intended to help the investment grade non-bank lenders, a second scheme has been expanded to help smaller entities such as microfinance companies. According to the government: The Rs 45,000 crore partial credit guarantee scheme is being expanded. Scheme extended to cover primary issues of lower-rated NBFCs. For investment in such securities, the government will provide a 20 percent first loss guarantee. Lower

rated and unrated securities will be eligible for relief via the scheme. Separately, the government also said that micro, small and medium sized enterprises will get Rs 3 lakh crore in collateral free, government guaranteed loans.


Indias gross domestic product (GDP) is expected to reach US$ 5 trillion by FY 2024-25 and achieve upper-middle income status on the back of digitization, globalization, favourable demographics, and reforms.

Indias revenue receipts are estimated to touch Rs 30-32 trillion by 2021, owing to Government of Indias measures to strengthen infrastructure and reforms like demonetization and Goods and Services Tax (GST).

India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by 2030 which is currently 30 per cent and have plans to increase its renewable energy capacity from to 175 GW by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.


According to the Ministry of MSMEs there are more than 63 million MSMEs in India, which contribute to 45% of industrial production, 30.5% to services sector output and employ around 110 million people. Spread across the country, these MSMEs produce around 6,000+ diverse products and services for not only the domestic market but global markets too.

Despite Government schemes to promote this growth engine, until recent years, adequate and affordable credit from the formal financial sector was a hurdle.

The Union Budget 2020-21 has earmarked an all-time high allocation of Rs 7,572.20 crore for the Ministry of Micro, Small and Medium Enterprises while announcing a string of initiatives for the sector including raising the turnover threshold for audit of their accounts to Rs 5 crore and a scheme to provide subordinate debt to MSME entrepreneurs.

Furthermore, direct liquidity flow of Rs 30,000 crore to investment-grade NBFCs and partial credit guarantees to low-rated NBFC papers worth Rs 45,000 crore should help resolve near-term liquidity issues of the NBFC sector.

We see this as a positive for banks and NBFCs having sizable exposure to SMEs, as the measures will reduce asset quality risk in the SME segment. Moreover, investment-grade NBFCs are given

special liquidity lines, which will encourage banks and mutual funds to invest in relatively lowrated paper at a time when liquidity has dried up in this segment due to risk aversion.”

Personal Loan:

The Survey has said that despite a decrease in policy rates by the RBI, the credit growth in the economy has been declining since the beginning of this year. The bank credit growth moderated from 12.9% in April 2019 to 7.1% as on December 2019.

Vehicle Loan:

According to the Society of Indian Automobile Manufacturers (SIAM), The industry produced a total 26,362,282 vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycles in April-March 2020 as against 30,914,874 in April-March 2019, registering a de-growth of (-) 14.73 percent over the same period last year.

The sale of Passenger Vehicles declined by (-) 17.88 percent in April-March 2020 over the same period last year. Within the Passenger Vehicles, the sales of Passenger Cars and Vans declined by (-) 23.58, percent and (-) 39.23 percent respectively while sales of Utility Vehicles marginally increased by 0.48 percent in April-March 2020 over the same period last year.

The overall Commercial Vehicles segment registered a de-growth of (-) 28.75 percent in April- March 2020 as compared to the same period last year. Within the Commercial Vehicles, Medium & Heavy Commercial Vehicles (M&HCVs) and Light Commercial Vehicles declined by (-) 42.47 percent and (-) 20.06 percent respectively in April-March 2020 over the same period last year.

Sale of Three Wheelers declined by (-) 9.19 percent in April-March 2020 over the same period last year. Within the Three Wheelers, Passenger Carrier and Goods Carrier declined by (-).8.28 percent and (-)13.27 percent respectively in April-March 2020 over April-March 2019.

Automobile sales put up a dismal performance due to tightening of liquidity which resulted from the asset-liability mismatch crisis in the NBFC sector. As interest rates continue to be low and trend downwards on account of lower inflation and liquidity returns to the system, growth in the automobile sector is expected to bounce back.


India has scored a perfect 10 in protecting shareholders rights on the back of reforms implemented by Securities and Exchange Board of India (SEBI) in the World Banks Ease of Doing Business 2020 report.

The Government of India has taken various steps to deepen reforms in the capital market, including simplification of the IPO process, which allows qualified foreign investors (QFIs) to access the Indian bond market. In 2019, investment in Indian equities by foreign portfolio investors (FPI) touched five-year high of Rs 101,122 crore (US$ 14.47 billion). Investment by FPIs in the Indian capital market reached a net Rs 12.46 trillion (US$ 178.28 billion) between FY2019- 20 (till March 2020).

The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These

measures include launching Credit Guarantee Fund Scheme for Micro and Small Enterprises, issuing guideline to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by both government and private sector, India is undoubtedly one of the worlds most vibrant capital markets. In 2017,a new portal named Udyami Mitra has been launched by the Small Industries Development Bank of India (SIDBI) with the aim of improving credit availability to Micro, Small and Medium Enterprises (MSMEs) in the country. India has scored a perfect 10 in protecting shareholders rights on the back of reforms implemented by Securities and Exchange Board of India (SEBI).

The countrys financial services sector consists of capital markets, insurance sector and nonbanking financial companies (NBFCs). Indias gross national savings (GDS) as a percentage of Gross Domestic Product (GDP) stood at 30.50 per cent in 2019. In 2019, US$ 2.5 billion was raised across 17 initial public offerings (IPOs). The number of Ultra High Net Worth Individuals (UHNWI) are estimated to increase to 10,354 in 2024 from 5,986 in 2019.


There were 9642 non-banking financial companies (NBFCs) registered with the Reserve Bank as on September 30, 2019. Out of above 9461 were non-deposit accepting (NBFCs-ND) while there were 82 deposit accepting NBFCs (NBFCs-D) and 99 Housing Finance Companies (HFCs). Among NBFCs-ND, those with an asset size of Rs.500 crore or more are classified as non-deposit taking systemically important NBFCs (NBFCs-ND-SI). 9461 NBFCs-ND comprised 274 systemically important NBFCs-ND (NBFCs-ND-SI) and 9187 other NBFCs-ND. All NBFC-D and NBFCs-ND-SI are subject to prudential regulations such as capital adequacy requirements and provisioning norms along with reporting requirements.

NBFCs have carved niche business areas for them within the financial sector space and are also popular for providing customized products. For instance, your Company providing finance for repossessed vehicles at the doorstep of the customer. NBFCs bring the much needed diversity to the financial sector. NBFCs play an important role to promote financial inclusion agenda of the government by catering to the financial needs of people belonging to weaker section of the society.

The move is aimed at not only freeing up capital for banks for further lending but also slash borrowing costs for well-rated NBFCs, which have been grappling with a systemic liquidity crisis triggered by a series of defaults by a large prominent financial institution and its subsidiaries. In order to provide NBFCs with greater operational flexibility, the RBI has merged the categories of NBFCs classified as asset finance companies, investment companies and loan companies into a new category called NBFC - Investment and Credit Company (“NBFC-ICC”)

Non-bank financial companies (NBFCs) are likely to be impacted significantly if the liquidity situation triggered by Infrastructure Leasing & Financial Services (IL&FS), Dewan Housing Finance (DHFL) and Indiabulls Housing Finance Ltd, default, continues to remain tight. These Companies are facing liquidity crisis and has defaulted on debt repayment. This default has also impacted other NBFCs and also mutual fund players.

The NBFIs liquidity management practices suggests that these companies are capable of coping with multi-week liquidity distress, but a prolonged period of liquidity stress will severely weaken the NBFIs credit standings and there will not be a significant impact on the credit quality of the countrys structured finance sector, nor performance of asset-backed securities (ABS). The Reserve Bank and the government have taken several measures to restore stability in the NBFC space. The Reserve Bank took measures to augment systemic liquidity, buttress standards of asset- liability management framework, ease flow of funds by relaxing ECB guidelines and strengthen governance and risk-management structures. The government provided additional support through the partial credit guarantee scheme, encouraging PSBs to acquire high-rated pooled assets of NBFCs. Furthermore, the Finance Bill 2019 through amendments in the RBI Act, 1934 conferred powers on the Reserve Bank to bolster governance of NBFCs. These measures are geared toward allaying investors apprehensions and aiding NBFCs in performing their role better.

Source: RBI


M/s CAPITAL TRADE LINKS LIMITED is growing NBFCs and offers a wide range of financial services. Further, the company is a non-deposit accepting Non-Banking Financial Company registered with Reserve Bank of India and obtained certificate of registration no. B-14.02516 dated 19.11.2001.

The Company has been in business of lending to individuals and organizations which are in need of finance since 1984. The company has established its own standards and norms for evaluating different needs of its clients and always provides suitable payment option considering no harm to its customers.

The Company offers business loan, E-Rickshaw loan, Two wheeler Loan, loan against property and fulfills working capital requirement, among others, of its individual, partnership firms, entrepreneurs, body corporate/business clients and other legal entities.


Sl. No. Particulars F.Y. ended 31.03.2020 F.Y. ended 31.03.2019 Changes
I Total Revenue from operations 479.02 474.15 4.87
II Other Income 3.66 1.24 2.42
III T otal Revenue 482.68 475.38 7.3
IV Operational Expenses 336.08 257.08 79
V Depreciation and amortization expense 2.9 2.9 0
VI Total Expenses 338.98 259.98 79
VII Profit before tax (III-VI) 143.7 215.4 -71.7
VIII Tax & Adjustment 49.09 52.46 -3.37
IX Profit After Tax (VII-VIII) 94.61 162.94 -68.33


CTL has established detailed procedures and policies for underwriting across various product categories, based on the credit profile of the customer. The Company underwrites loans on the basis of assessed cash flow capabilities of customers as well as LTV norms and Credit scoring. While it does lay emphasis on regular credit bureau inputs and detailed credit analysis processes, it considers various other factors too.

As an NBFC, CTL is exposed to credit, liquidity and interest rate risk. It continues to invest in talent, processes and emerging technologies for building advanced risk and underwriting capabilities. Sustained efforts to strengthen the risk framework and portfolio quality have yielded consistently better outcomes for the Company.

A robust governance framework ensures that Board and its committees approve risk strategies and delegates credit authorities and a robust underwriting practices and continuous risk monitoring ensure that portfolios stay within acceptable risk levels.

CTL has experience of lending to thousands customers as of 31 March 2020.


CTL identifies various operational risks inherent in its business model. These cover risks of a loss resulting from inadequate or failed internal process, people and systems, or from external events. It has dedicated a new pillar — the Operational Risk Management Framework — to effectively identify, measure, report, monitor and control such operational risks.


Technology has been enhanced to facilitate digital collection, online meetings and digital receipt issuance to operate under lockdown while also following moratorium related norms.

From year 2020 company is also providing loans through online platform. Instant cash loans dont need lengthy documentation or paperwork. If you need a loan, you can complete your verification by doing e KYC and Net Banking Verification (Net Banking Verification).


CTL strives to create a culture of Customer Obsession. CTL continuously listen to its customers and drives continuous transformation to provide a frictionless experience across the lifecycle, from pre-disbursal to service. CTL constantly aims to reduce the time to disburse loans to customers with minimal documentation. CTL has enhanced and introduced varied service channels for solving customer queries and requests.


There is a growing trend towards more stringent yet structurally beneficial regulation in the NBFC sector. Anticipating such regulations and implementing good governance norms before they are mandated has been a constant practice at CTL. Accordingly, the Company stands to benefit by policy notifications.


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


Your Companys belief in trust, transparency and teamwork improved employee productivity at all levels. The Companys continues to lay emphasis on people and relations with the employees and continued to be cordial. It is your Companys belief that people are at the heart of corporate purpose and constitute the primary source of sustainable competitive advantage.

In an increasingly competitive market for talent, CTL continues to focus on attracting and retaining right talent. It is committed to provide right opportunities to employees to realise their potential.


The Companys internal control systems are commensurate with the nature of its business and the size and complexities of its operations. These systems are designed to ensure that all assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized, recorded and reported. 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.



Our Audit Committee was constituted to have proper checks and balances on the various financial activities of the Company and to guide as well as assist the Board in various matters of the utmost importance. The Committee has its Charter for functioning. The primary objective of the Committee is to monitor and provide effective supervision of the Managements financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.

The dates on which the Audit Committee were held are 6th May, 2019, , 30th July, 2019, 23rd October, 2019,23rd January, 2020.

Names Designation
1 Mr. Amar Nath Non- Executive & Independent - Chairman
2 Mr. Abhay Kumar Non -Executive & Independent-Member
3 Mr. Neeraj Kumar Bajaj Non -Executive & Independent- Member


The primary objective of the Committee is to recommend suggestions to the Board of Directors pertaining to the Remuneration Policy for Directors, KMP and all other employees of the Company. During FY 2019-2020, meetings of Nomination and Remuneration Committee were held on 20th September, 2019 and 19th December, 2019.

Names Designation
1 Mr. Amar Nath Non- Executive & Independent - Chairman
2 Mr. Abhay Kumar Non -Executive & Independent-Member
3 Mr. Neeraj Kumar Bajaj Non -Executive & Independent- Member


Our Stakeholder Relationship Committee has its Charter for its functioning. The Committee members, personally looking forward the issues if any, related to the stakeholders. The primary objective of the Committee is to consider and resolve the grievances of Security Holders of the Company.

During FY 2019-2020, meeting of Stakeholder Relationship Committee was held on 23rd January, 2020.

Names Designation
1 Mr. Neeraj Kumar Bajaj Non- Executive & Independent - Chairman
2 Mr. Abhay Kumar Non -Executive & Independent-Member
3 Mr. Amar Nath Non -Executive & Independent- Member


The Risk Management Committee is formed for the purpose of looking into the various risks affecting the smooth functioning of the Company. There are various factors including internal as well as external which may affect the stability of the Company. The Committee has adopted a Charter for its functioning. The primary objective of the Committee is to consider and resolve the grievances of Security Holders of the Company.

During FY 2019-2020, meeting of Risk Management Committee was held on 23rd January, 2020.

Names Designation
1 Mr. Abhay Kumar Non- Executive & Independent - Chairman
2 Mr. Amar Nath Non -Executive & Independent- Member
3 Mr. Neeraj Kumar Bajaj Non -Executive & Independent- Member

The Company has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures. The Audit Committee and Board of Directors review these procedures periodically.


In compliance with Schedule IV to the Companies Act, 2013 and regulation 25 (3) of the SEBI Listing Regulations, 2015, the independent directors held their separate meeting on 20th January, 2020.

Without the attendance of non-independent directors and members of management, inter alia, they discuss the following:

i. Review the performance of non-independent directors and the board as a whole;

ii. Review the performance of the chairperson of the Company, taking into account the views of executive directors and non-executive directors;

iii. Assess the quality, quantity and timeliness of flow of information between the Company Management and the board that is necessary for the Board to effectively and reasonably perform their duties; and

iv. Review the responsibility of independent directors with regards to internal financial controls.

During FY 2019-2020, meeting of Independent Director Committee was held on 23rd January, 2020.


The Board has adopted various policies as per applicable Regulations. The list of policies are as under:-

• Interest Gradation and Risk Policy

• Whistle Blower Policy

• Code of Conduct for prevention of Insider T rading

• Code of Conduct on Unpublished Price Sensitive Information

• Fair Practice Code

• Investment Policy

• KYC Policy

• Policy for determination of materiality for disclosures of events

• Related Party Transaction Policy

• Sexual Harassment Policy as per POSH Act

• Loan Policy

• Nomination and remuneration policy

• Board evaluation criteria


The Company has not entered any transactions with the Directors and /or their relatives during the year under review that may have conflict with the interest of the Company at large.


The requirements of the Listing Agreements with the Stock Exchanges as well as regulations and guidelines of SEBI are being followed. During the year, the Board periodically reviewed legal compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the Management.


The quarterly/half yearly results/annual results and official news releases of the Company are published in accordance with the listing Regulations in newspaper Pioneer (English) and Pioneer (Hindi). Quarterly and annual financial statements, along with shareholding pattern are also posted on the website under the caption “Investors Relations” on home page.


CIN of the Company, allotted by the Ministry of Corporate Affairs, Government of India is: L51909DL1984PLC019622.


GST NUMBER of the company is 09AAACC0222H1ZB and 07AAACC0222H1ZC.


The Company is an NBFC Company and is having the NBFC registration certificate from the Reserve Bank of India, and is complying with the formalities, which are required to be completed in this respect.


The financial statements are prepared in compliance with the requirement of the Companies Act and the Accounting Standards prescribed by the Institute of Chartered Accountants of India and generally accepted accounting principles in India.


For any assistance in respect of status of dematerialization of shares, transfer, transmission, issue of duplicate share certificates, change of address, non- receipt of Annual Reports etc. investors are requested to write to:

MAS Services Limited (Unit: Capital Trade Links Limited)

T-34 2nd Floor,

Okhla Industrial Area, Phase-II

New Delhi-110020

Tel nos. 011-26387281/26387282

Fax No. 011-26387384