Cni Research Limited
Your directors have pleasure in presenting herewith the Thirty - Ninth (39th) AnnualReport of the company together with Standalone Audited Accounts for the year ended31stMarch 2021.
| ||2020-21 ||2019-20 |
|Particulars ||Rs. in Lakh ||Rs. in Lakh |
|Total Income ||(231.03) ||233.00 |
|Profit/(Loss) before Depreciation ||-360.78 ||-24.73 |
|Less: Depreciation & Amortization || ||0.11 |
|Profit/(Loss) before tax ||-360.78 ||-24.84 |
|Provision for tax net off Deferred Tax ||0.07 ||0.20 |
|Net Profit / (Loss) after Tax ||-360.85 ||-24.65 |
Your company's total revenue for the period came at Rs. -231.03 lakh. Over 90% of therevenue came from Equity segment. After a muted performance in the previous year Indiancapital markets surged on the backdrop of recovering the economy and strong macroeconomicdata which benefited the company's financial performance as well. Due to several marketchallenge's the company achieve in total revenue of Rs. -231.03 Lakhs against 233.00 Lakhin previous the same effect on company's EBITDA of Rs. -360.78 against Rs. -24.84 inprevious year.
Segment wise or product wise performance
|Particular / Segment ||Year ended 31st March 2021 |
|Rs. In Lakh ||Equity ||Content Sale ||Other Business Income ||Research Product Sale ||Total |
|Revenue (Net) ||105.26 ||12.12 ||(349.41) ||1.00 ||(231.03) |
|Profit /(Loss) before tax ||2.98 ||(15.36) ||(349.41) ||1.00 ||(360.78) |
Note: Segmental revenue (net) break-up excludes dividend income
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 has increased over the years. Moreover Indiahas one of the highest savings rates in the world. However a very small percent of thishousehold savings is actually in the form of capital markets investments. We believe thedevelopment of financial markets is not possible without increased retail participation.Hence we see tremendous opportunity in this segment for Cni in terms of content sale andequity research business. We are revamping our research and content salebusinesstocatertogrowingretailsegmentandexecuteourexpansionplans.
In FY 2021 Indian economy grew at (9.6%) due to pandemic. The implementation of GSTwould reduce the cascading tax effect and would bring small and medium enterprises andunorganized sectors under the purview of the tax authorities. This would further help theIndian markets to be come more competitive in medium to long-term thus helping Indianbusinesses to compete with global competitors in terms of price and quality in the nearfuture. Real Change is seen in capex cycle after 15 years.
Furthermore initiatives such as Make in India Digital India Smart Cities FinancialInclusion and expansion of Large Infrastructure projects have supported India to achievethe status of the fastest growing economy of the world. Especially initiatives such asMake in India has boosted the overall growth of SME's where your company holds a keyposition in terms of advising and providing research content.
Your company's valuable research products have enabled it to procure content sharingagreements with global financial data providers such as Thomson Reuters Capital IQ - adivision of Standards and Poor's Dow Jones Factiva and TheMarkets.com LLC USA. Yourcompany shares its research relating to small and mid-cap companies with these globalproviders thus helping it to build its brand in the global markets.
In the past your company has displayed consistency with regard to prediction of thebehavior of Sensex and Nifty. This has been possible only because of presence of in-houseresearch capabilities. Indian Capital markets are on a bull run and with the initiation ofreforms by the government it is expected that significant funds of investments are likelyto be drawn
into the capital markets. Thus Cni's well-accepted research offerings would helpinvestors increase their wealth. In the past years your company had kept businessexpansion plans on a hold due to muted market performance. However with the marketsshowing positive results your company plans to expand its content sharing businesssegment.
Your company is making further efforts to increase its profits in this space as rightdata and information is the key to success in the current business environment. Yourcompany is a debt-free company and it does not intend raise debt at this point of time.During FY 2014 some promoters and investors did infuse some funds into the company.However the company was not able to reap benefits out of the same. However in the nearfuture your company may raise further funds to capitalize the growing capital markets andgrowth 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 "Quality Brand" 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 under the provisions of the SEBI (Research Analysts) Regulations 2014 hence standsout on its own.
Even with regard to the research your company is 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 global agencies along with fresh addition to ties upslike EMIS (ISI Emerging Market UK) and Bloomberg USA clearly speaks high about the qualityand brand of your company. Your company 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 favored 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 and downs have direct impact on the revenues of your company and tominimize these risks your company has made considerable investments out of profits earnedand these investments are profitable. Further we refrained ourselves from creatingphysical assets and it was prudently decided by the management to invest in
technology investment opportunities instead of creating physical assets at thisjuncture. This has helped your company to sail through difficult market conditions as ourcosts remained always under check. We have been striking balance between executing bothexpansion and ambitious innovation agendas as well as managing rising costs which is akey subject of interest for investors.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year under review the company has not required to transfer to Investor andEducation Protection fund (IEPF). DIVIDEND
Your directors have not yet recommended any dividend for theyear under review.
As on date the paid - up share capital of the company is 114804500.
The details of Authorized Capital Subscribed Capital & Paid up Capital is asunder:-
| ||2020-21 ||2019-20 |
|Particulars ||Rs. in Lakh ||Rs. in Lakh |
|Authorized Capital ||120000000 ||120000000 |
|Subscribed & Paid up Capital ||114804500 ||114804500 |
The company has neither accepted nor renewed any deposit from the public within themeaning of Section 73 and 74 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014 during the year ended March 31 2021.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THEYEAR
As on March 31 2021 your Company has 4 Directors which includes 2 IndependentDirectors (IDs) 1 Non-Executive Director (NEDs). The Key Managerial Personnel("KMP") of the Company includes Chief Financial Officer and Company Secretary.
There was no change in composition of Board of Directors and KMP of the Company.
Mrs. Sangita Ostwal Director (DIN:00297685) retires at this Annual General Meeting andbeing eligible offers himself for re-appointment. A brief profile of Mrs.Sangita Ostwalhasbeen included in the notice convening the ensuing Annual General Meeting.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received necessary declaration from Independent Directors under section149(7) of the Companies Act 2013 that they meet the criteria of Independence laid downunder Section 149(6) and as per Schedule IV of the Companies Act 2013.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY EXPERTISE &EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THEYEAR
Pursuant to Rule 8(5) of the Companies (Accounts) Rules 2015 Company should includeastatement regarding opinion of the Board with regard to integrity expertise andexperience (including the proficiency) of the independent directors
|Name of the Director ||Date of Appointment / Re-appointment ||Integrity expertise and Experience ||Proficiency |
|Mr. Mayur Shantilal Doshi ||01/04/2019 ||Mr. Mayur Shantilal Doshi is Diamond Trader. Mr. Doshi has vast and rich experience in finance marketing administration and human resource etc. Mr. Doshi is associate with the Company since year 2002. The Company has reappointed him as Non- Executi've Independent Director for 5-yearwef 01/04/2019 in its 37th AG M h e l d o n 3 0 t h September 2019 ||Marketing Finance |
|Mr. Arun Kumar S Jain ||01/04/2019 ||Mr. Arun Kumar S Jain is fellow member of the Institute of Chartered Accountants of India Mr. Jain has rich experience and expertise of Accounting Finance Taxation etc. The Company has re-appointed him as Non-Executive Independent Director for 5-year wef 01/04/2019 in its 37th AGM held on 30th September 2019 ||Taxation Accounting Finance |
SEPARATE MEETING OF INDEPENDENT DIRECTORS
In compliance with the provision of the Companies Act 2013 the Independent Directorsheld a meeting on February 11 2021 and they inter alia:
i. Reviewed the performance of non-independent directors and
ii. the Board as a whole;
iii. Assessed the quality quantity and timeliness of flow of information between theCompany's Management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
The Independent Directors holds a unanimous opinion that the Non-Independent Directorsbring to the Board constructive knowledge in their respective field. The IndependentDirectors expressed their satisfaction with overall functioning and implementations oftheir suggestions.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of meeting is prepared and circulated in advance to the Directors. Duringthe year fourboard 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 June30 2020 ||1 ||June 30 2020 |
|2 August 27 2020 ||2 ||August 27 2020 |
|3 November10 2020 ||3 ||November10 2020 |
|4 February!! 2021 ||4 ||February 11 2021 |
SEPARATE MEETING OF INDEPENDENT DIRECTORS
In compliance with the provision of the Companies Act 2013 the Independent Directorsheld a meeting on February 11 2021and they inter alia:
^Reviewed the performance of non-independent directors and ^ The Board as a whole;
^Assessed the quality quantity and timeliness of flow of information between the
Company's Management and the Board which is necessary for the Board toeffectively andreasonably perform their duties.
The Independent Directors holds a unanimous opinion that the Non-IndependentDirectorsbring to the Board constructive knowledge in their respective field. TheIndependent Directorsexpressed their satisfaction with overall functioning andimplementations of their suggestions.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of theSecurities and Exchange Board of India (SEBI) (listing obligation and disclosurerequirement) Regulation 2015 a structured questionnaire was prepared after taking intoconsideration the various aspects of the Board's functioning composition of the Board andits committees culture execution and performance of specific duties obligation andgovernance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the Non-Independent Directors was carried out by theIndependent Directors.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 read with Schedule V of the Securities and Exchange Board ofIndia (SEBI) (listing obligation and disclosure requirement) Regulation 2015 a detailedreport on Corporate Governance forms a part of this Annual Report. A certificate fromAuditors of the company confirming compliance with the conditions of Corporate Governanceas stipulated under Regulation 34 of the Securities and Exchange Board of India (SEBI)(listing obligation and disclosure requirement) Regulation 2015 is given in a separatestatement which forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis on matters related to business performance asstipulated in Regulation 34 of the Securities and Exchange Board of India (SEBI) (listingobligation and disclosure requirement) Regulation 2015 is given in a separate statementwhich forms part of this Annual Report.
The Institute of Company Secretaries of India had prescribed the Secretarial Standardson Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings(SS-2).The Company has devised proper systems to ensure compliance with its provisions andis in compliance with the same.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. During the year under review no complaintsrelated to sexual harassment had been received by the Internal Complaints Committee.
DETAILS OF SIGNIFICANT AND 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
I. Internal Control Systems and their Adequacy
The Company has in place adequate internal controls commensurate with the size of theCompany and nature of its business and the same were operating effectively throughout theyear. Internal Audit is carried out by external auditors and periodically covers all areasof business.
The Internal Auditors evaluates the efficacy and adequacy of internal control systemits compliance with operating systems and policies of the company and accountingprocedures at all the locations of the company. Based on the report of the InternalAuditors process owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions there onare placed before the Audit Committee of the Board.
II. Internal Controls over Financial Reporting
The Company has in place adequate internal financial controls commensurate with sizeand complexity of its operations. During the year such controls were tested and noreportable material weakness in the design or operations were observed. The company haspolicies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.
DETAILS OF JOINT VENTURE ASSOCIATES OR SUBSIDIARY COMPANY
During the period under review your company has not entered into Joint ventures; andthe company does not have Associates or Subsidiary during the period 2020-21.
The Shareholders of the Company has been appointed M/s Gupta Raj & Co. [FirmRegistration No 001687N] Chartered Accountants as a Statutory Auditors of the Company fora term of five year in place of M/s N K Jalan ('the retiring auditor') pursuant toprovisions of section 139 (2) of the Companies Act 2013 read with the Companies (Auditand Auditors) Rules 2014.
The term of appointment of M/s Gupta Raj & Co as Statutory Auditors of thecompany to hold office from upcoming AGM until the conclusion of the sixth consecutiveAnnual General Meeting of the Members of the Company to be held in the year 2022-23subject to ratification by members at every Annual General Meeting.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013.
REVIEW OF AUDITORS 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.
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:
a. Audit Committee
b. Stakeholders' Relationship Committee
c. 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.
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.
The extracts of Annual Return pursuant to the provisions of Rule 12 of theCompanies(Management and Administration) Rules 2014 is furnished in Annexure - III and isattached to this Report.
According to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013every company shall place a copy of the annual return on the website of the company ifany and the web-link of such annual return shall be disclosed in the Board's report. TheAnnual Return of the Company has been placed on the website of the Company and can beaccessed at https://www.cniresearchltd.com
CORPORATE SOCIAL RESPONSIBILITIES
During the year under review provision of Corporate Social Responsibility (CSR) Rulehas not applicable to your company. GENERAL
Your director's state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
i. Details relating to deposits covered under Chapter V of the Act;
ii. Issue of equity shares with differential rights as to dividend voting orotherwise;
iii. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this report;
iv. The Managing Director of the Company does not receive any remuneration orcommission from any of its subsidiaries / Associates;
v. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your director's further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
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 for the year ended 31st March 2021 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;
b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the financial year end on 31stMarch2021 and of the profit and loss of the company for that period;
c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) The directors had prepared the annual accounts on a going concern basis;
e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are ad equate and were operatingeffectively; and
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were ad equate and operating effectively.
VIGIL MECHANISM POLICY
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.
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 https://www.cniresearchltd.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
All contracts / arrangements / transactions entered by the Company during the financialYear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had entered into certain contract / arrangement /transaction with related parties which could be considered as material in the opinion ofthe Board.
The particulars of such material Contracts or Arrangements made with related partiespursuant to Section 188 are furnished in Annexure-IV and is attached to this report.
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. Nil() in the form of Royalty for sale of research reports. There is no out going in theform off oreignex change. This does not include payments received from overseas partnersand customer directly in Indian rupees.
The report in the prescribed format is given in Annexure - I
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) Rules2014.
|SR No Particulars ||Kishor P Ostwal ||Sangita Ostwal |
|1 The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year ||1:2.5 ||1:1.5 |
|2 The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year ||N.A. ||N.A. |
|3 The percentage increase in the median remuneration of employees in the financial year ||10% ||10% |
|4 The number of permanent employees on the rolls of company ||4 ||4 |
|5 Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||NA ||NA |
|6 Affirmation that the remuneration is as per the remuneration policy of the company ||Remuneration is as per the Companies policy ||Remuneration is as per the Companies policy |
B Details of every employee of the company as required pursuant to 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules2014.
There are no employees drawing remuneration in excess of the limits specified in Rule5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules2014 further amended by Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016. The details of the top ten employees in terms ofremuneration drawn and the name of every other employee as required pursuant to Rule5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isavailable for inspection during working hours at the Registered Office of the Companyduring year.
C. 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 Ostwal Non-executive director of the company drawing remuneration.
LISTING WITH STOCK EXCHANGES
The company confirms that it has paid the Annual Listing Fees for the year 2021-22 toBSE Limited where the company's shares are listed.
Your director's 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.
For CNI Research Limited
|Kishor P. Ostwal |
|Chairman & Managing Director |
|DIN - 00460257 |
|Place: Mumbai |
|Date: 24.08.2021 |