The Members Cni Research Limited
Your directors have pleasure in presenting herewith the Thirty Fourth Annual Report ofthe company together with Audited Accounts for the year ended 31st March 2016.
|Particulars || |
| || |
Rs. in Lakhs
Rs. in Lakhs
|Total Income ||4869.1 ||2412.9 |
|Profit/(loss) before Depreciation ||-43.1 ||127.0 |
|Less: Depreciation & Amortization ||0.2 ||0.5 |
|Profit / (Loss) before tax ||-43.3 ||126.5 |
|Provision for tax net off Differed Tax ||0.0 ||25.3 |
|Profit/(Loss) after Taxation ||-43.4 ||101.2 |
Your company has grown its total income over 100% clocking a revenue of Rs. 48.7 crore.Equity segment was the major contributor with revenue standing at Rs. 48.5 crore. Mutedperformance of Indian equity markets in tandem with global equity markets hassignificantly impacted equity segment profits of your company. With prudent riskmanagement your company managed to minimize the overall negative impact of financialmarkets with your companys losses remaining just about Rs. 43.4 lakhs.
Segment wise or product wise performance
|Particular / Segment ||Year ended 31st March 2016 |
|Rs. In Lakhs ||Equity || |
Other Business Income
Research Product Sale
|Revenue (Net) ||4851.4 ||10.6 ||7.0 ||0.2 ||4869.2 |
|Profit /(Loss) before tax ||-23.3 ||-27.1 ||7.0 ||0.2 ||-43.3 |
|Capital expenditure ||Nil ||Nil ||Nil ||Nil ||Nil |
Retail participation in Indian stock markets has been growing in last few years drivenby initiatives by the Indian government and stock exchanges to increase awareness amongstretail investors. Individual participation increased from 12.2% in FY 2015 to 13.9% in FY2016. Moreover India has one of the highest savings rate in the world. However a verysmall percent of this household savings is actually in the form of capital marketsinvestments. We believe development of capital markets is not possible without increasedretail participation. Hence we see tremendous opportunity in this segment for Cni interms of content sale and equity research business. We are revamping our research andcontent sale business to cater to growing retail segment and execute our expansion plans.
In FY 2016 Indias economic growth was strong growing 7.6% faster than China (CY2015 real GDP growth of 6.9%) largely driven by reforms undertaken by the Prime MinisterModi led government.
Progressive initiatives such as Make in India Digital India Smart Cities largeinfrastructure projects financial inclusion etc. to name a few. These initiatives shouldunderpin long term growth prospects of the Indian economy as well as bode well for theperformance of the financial sector in India. According to the IMF Indian economy isexpected to grow at a robust pace with next years real GDP growth exceedingChinas growth. Further with Make in India campaign the Indian government isemphasizing on local manufacturing thus increasing the importance of SME sector where ourcompany holds a key position in terms of advising and providing research content on thesame. Moreover your company already has content sharing agreements with various globalfinancial data providers such as Thomson Reuters Capital IQ a division of Standard &Poors Dow Jones Factiva and TheMarkets.com LLC USA. Your company also providesresearch on small and mid cap companies to these global providers helping us to build ourbrand across the globe and make Cni an international brand.
In the past we have been accurate in predicting Nifty/ Sensex behavior supported byour in-house research capabilities. Indian economy is on growth trajectory and increasedparticipation of retail investors should bode well for Indian capital markets growth.Cnis research offering are well accepted by FIIs and overseas investors helpingthem in wealth creation. Your company would go ahead with business restructuring planwhich we had kept on hold for past few years due to challenging market conditions andmuted performance of global economies. We would be aggressively expanding our content salebusiness segment as right data and information is a key in the current businessenvironment. We are a debt free company and we intend to remain so. As reported in FY 2014some investors and promoters did infuse funds in the company though the same was not up tothe mark. In order to expand and execute our business plans we may raise further funds tocapitalize the growing capital market and growth opportunities.
FATE OF ACHIEVEMENT
Your company which has strategic partnerships with the best global agencies in theworld has been chosen for the prestigious award "Rashtriya Udyog Ratna Award"and "QualityBrand" from Council for Economic Growth and Research (CEGR) for thecompany's outstanding contribution to society and to the nation. The fact that yourcompany's content has been picked by NY times FT USA clearly suggests that the quality ofthe content is world class. Your company has been invited by many international rating andperformance agencies for awards in the field of research.
Research in India is at a nascent stage unlike US and hence the true value of researchis yet to be explored in real context. Your company has been rated among one of the bestRESEARCH firms by another US based research firm.
Your company is the only non broker professional research firm duly registered withSEBI hence stands out on its own.
Even with regard to the research your company ranked no 1 in India as it hasmaintained 95% strike rate in calls generated in A group investment and trading. Theperformance of your company is exhibited on the home page of the website of your companywww.cniglobalbiz.com. Your company maintained consistency in the performance even theequity markets are swinging 10% every time. The continued association of all globalagencies along with fresh addition to ties ups like EMIS (ISI Emerging Market UK) andBloomberg USA clearly speaks high about the quality and brand of your company. Yourcompany is now extending tie up in Europe.
The weak global sentiments and fearsome approach of investors has affected your companytoo in the last fiscal. Strong decline in oil prices slowdown in the Chinese economy andmuted global growth prospects weighed on overall investment environment. Indian marketsalso remained volatile during the year despite policy makers continued to remainaccommodative with FII favoured policies. However looking ahead we hope investorsentiments to be boosted by on-going reforms leading to steady economic growth greaterretail participation coupled with improving global markets outlook. Capital market ups anddowns have direct impact on the revenues of your company and to minimize these risks yourcompany has made considerable investments out of profits earned and these investments areprofitable. Further we refrained ourselves from creating physical assets and it wasprudently decided by the management to invest technology investment opportunities insteadof creating physical assets at this juncture. This has helped your company to sail throughdifficult market conditions as our costs remained always under check. We have beenstriking balance between executing both expansion and ambitious innovation agendas as wellas managing rising costs which is a key subject of interest for investors.
TRANSFER TO RESERVES
During the year under review NIL amount has been transferred to Reserves.
The company is focusing on growth and hence directors have not yet recommended anydividend for the year under review. Your Company has rewarded members with good bonustrack record and may continue its trend in future.
The Board of Directors of the company has allotted 39200000 equity shares and10800000 convertible equity warrants pursuant to conversion into equity shares. As ondate the paid up share capital of the company is 114804500.
The details of Authorised Capital Subscribed Capital & Paid up Capital is asunder:-
|Particulars ||2015-16 ||2014-15 |
| ||Rs. ||Rs. |
|Authorised Capital ||120000000 ||120000000 |
|Subscribed & Paid up Capital ||114804500 ||109404500 |
During the period under review your company has not accepted/renewed any deposits.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the company Mr. Kishor P. Ostwal is liable to retire by rotation and beingeligible offers himself for reappointment.
Also the Board of Directors of the company appointed Mr. Mehul Y. Desai as anAdditional Independent Director of the company in the Board at the meeting held on July30th 2015 under Section 161 of the Companies Act 2013. Further pursuant to relevantprovision of section 149 of the Companies Act 2013 Mr. Mehul Y. Desai was appointed asNon Executive Independent Director of the company for a term of five years w.e.f.Thursday July 30th 2015 at 33rd Annual General Meeting of the company.
The company has received declaration from all the Independent Directors of the companyconfirming that they meet criteria independence as prescribed under section 149(6) of theCompanies Act 2013.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of meeting is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings and five Audit Committee Meetings were convened and held. Thedetails of which are given as under:
|Sr. No. ||Date ||Sr. No. ||Date |
| ||Board Meeting || ||Audit Committee |
|1 ||April 13 2015 ||1 ||April 13 2015 |
|2 ||May 19 2015 ||2 ||May 19 2015 |
|3 ||July 30 2015 ||3 ||July 30 2015 |
|4 ||November 10 2015 ||4 ||November 10 2015 |
|5 ||February 11 2016 ||5 ||February 11 2016 |
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration.
CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreement with the stock exchanges for the periodWednesday April 01st 2015 to Monday November 30th 2015 and as referred to in provisionof regulation 15(2) of Securities and Exchange Board of India (SEBI) (listing obligationand disclosure requirement) Regulation 2015 for the period Tuesday December 01st 2015 toThursday March 31st 2016 the company has complied with all the provisions of CorporateGovernance and a report on corporate governance is annexed hereto and forms part of thisreport. A certificate from Auditors of the company regarding compliance of CorporateGovernance as stipulated under Clause 49 of the Listing Agreement is appended to theAnnual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as required underClause 49 of the Listing Agreement and relevant provision of SEBI (listing obligation anddisclosure requirement) Regulation 2015 is presented in a separate section forming partof the Annual Report.
DETAILS OF SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the period under review your company did not receive any such kind of orderfrom the regulator or Courts or Tribunals.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
Your company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standards operating procedures. Thecompany's internal control system is commensurate to the size scale and complexities ofits operations.
DETAILS OF ASSOCIATE COMPANIES
During the period under review your company has one associate Cni InfoXchange Pvt.Ltd.
M/s. N.K Jalan & Co Chartered Accountants Statutory Auditors of the company holdoffice up to 35th Annual General Meeting and are eligible for re-appointment. The companyhas received a letter from them to the effect that they are willing to continue asStatutory Auditors and if re-appointed their reappointment would be within the limitsprescribed under Section 139 of the Companies Act 2013 and they are not disqualified frombeing appointed as Auditors.
During the year in accordance with the Companies Act 2013 and relevant provision ofSEBI (listing obligation and disclosure requirement) Regulation 2015 the Boardre-constituted some of its Committees. There are currently Three Committees on our Boardwhich are as follows:
1. Audit Committee
2. Stakeholders' Relationship Committee
3. Nomination and remuneration Committee
Details of all the aforementioned committees along with their charters composition andmeetings held during the year are provided in the Report on Corporate Governance.
REVIEW OF AUDITOR'S REPORT
Your directors are pleased to inform you that the Statutory Auditors of the companyhave not made any adverse or qualified remarks in their audit report.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 the SecretarialAudit Report received from M/s. Mayur More & Associates Practicing CompanySecretaries is appended as Annexure - II and forms part of this report.
The Board and the Compliance Officer have ensured compliances of the SEBI regulationsand provisions of the Listing Agreement. Compliance certificates are obtained and theBoard is informed of the same.
EXTRACT OF THE ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9as a part of this Annual Report is forming part of this Annual Report as appended asAnnexure III.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review provision of Corporate Social Responsibility (CSR) Rulehas not applicable to your company.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; d) the directors had prepared the annual accounts on agoing concern basis; e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and f) the directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the company atwww.cniglobalbiz.com under investors/policy documents/Vigil Mechanism Policy link.
RISK MANAGEMENT POLICY
A statement indicating development and implementation of a risk management policy forthe company including identification therein of elements of risk if any this in theopinion of the Board may threaten the existence of the company.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors senior Management and theirremuneration.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The code laid down by the Board is known as "code of businessconduct" which forms an Appendix to the Code. The Code has been posted on thecompany's website www.cniglobalbiz.com.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the period under review your company doesn't have any transaction relating toloans guarantee or investments under section 186.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the period under review your company doesn't have Contract or arrangementreferred to in subsection (1) of section 188 of the Companies Act 2013 including certainarms length transactions
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Since the company is engaged in the service industry the company does not consumesubstantial energy. It is the policy of the management to keep abreast of technologicaldevelopments in the field in which the company is operating and to ensure that the companyuses the most suitable technology. During the year the company had earned Rs. 6637/-(~US $ 100) in the form of Royalty for sale of research reports. There is no outgoing inthe form of foreign exchange. This does not include payments received from overseaspartners and customer directly in Indian rupees.
The report in the prescribed format is given Annexure-I
A. Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
During the period under review not applicable to your company
B. Details of the every employee of the company as required pursuant to 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 C. During theperiod under review No employee (s) fall under Rule 5(2) the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
D. Any director who is in receipt of any commission from the company and who is aManaging Director or Whole-time Director of the company shall receive any remuneration orcommission from any Holding Company or Subsidiary Company of such Company subject to itsdisclosure by the Company in the Board's Report.
During the period under review Mr. Kishor P. Ostwal Managing Director and Mrs.Sangita Kishor Ostwal Whole Time Director of the company drawing remuneration.
LISTING WITH STOCK EXCHANGES
The company confirms that it has paid the Annual Listing Fees for the year 2016-17 toBSE Limited where the company's shares are listed.
Your Directors take this opportunity to thank its channel partners all employeesanalysts economists company secretary registrar depository exchange authorities andbankers who were instrumental in improving the operations of the company.
| ||sd/- || |
| ||For and on behalf of Board || |
|Place: Mumbai ||Kishor P. Ostwal ||Mayur Shantilal Doshi |
|Date: 04th August 2016 ||Managing Director ||Director |
| ||DIN: 00460257 ||DIN: 02220572 |