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CNI Research Ltd.

BSE: 512018 Sector: Financials
NSE: N.A. ISIN Code: INE135H01029
BSE 00:00 | 17 Sep 1.71 -0.04






NSE 05:30 | 01 Jan CNI Research Ltd
OPEN 1.75
VOLUME 48919
52-Week high 2.75
52-Week low 1.28
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.75
CLOSE 1.75
VOLUME 48919
52-Week high 2.75
52-Week low 1.28
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CNI Research Ltd. (CNIRESEARCH) - Director Report

Company director report


The Members

Cni Research Limited

Your directors have pleasure in presenting herewith the Thirty Seventh Annual Report ofthe company together with Audited Accounts for the year ended 31st March 2019.

Financial Highlights

2018-19 2017-18
Particulars Rs. in Lakh Rs. in Lakh
Total Income 402.62 440.15
Profit/(Loss) before Depreciation (50.00) 11.34
Less: Depreciation & Amortization 0.22 0.22
Profit/(Loss) before tax (49.97) 11.11
Provi sion for tax n et off Deferre d Tax (0.01) 1.60
Profit/(Loss) after Taxation 49.98 9.49

Your company's total revenue for the period came at Rs. 402.62 lakh. Over 96% 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 companies financial performance as well. Due to several marketchallenge's the company achieve in total revenue of Rs. 402.62 Lakhs against 440.15 Lakhin previous the same effect on company's EBITDA of Rs. (50.00 ) lakhs against Rs. 11.34lakhs in previous year.

Segment wise or product wise performance

Particular / Segment

Year ended 31st March 2018

Rs. In Lakh Equity Content Sale Other Business Income Research Product Sale Total
Revenue (Net) 383.36 19.23 0.00 0.02 402.62
Profit /(Loss) before tax (39.80) (10.19) 0.0 0.02 (49.97)

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 sale business to caterto growing retail segment and execute our expansion plans.

Future Prospects

In FY 2019 Indian economy grew at less than 7 % though stronger than Chinese economy(CY 2019 real GDP growth of 6.7%) there was visible slowdown in the GDP growth. The secondinnings of Shri Narendra Modi will be a strong driver for growth as all major reforms willsee light of the day. This is simply because in next 12 months or so BJP will gainmajority in the RAJYA SABHA. After GST DEMONETISATION the efforts will be on KASHMIRLABOUR LAWS equality status in religion apart from that the strategy to make INDIA amajor consumption center. For that Govt has decided to uplift all the BPL with variousschemes for healthcare and other facilities so that the per capita income of BPL will risewhich will help convert them into mainstream consumption of INDIA.

The implementation of GST would reduce the cascading tax effect and would bring smalland medium enterprises and unorganized sectors under the purview of the tax authorities.This would further help the Indian markets to become more competitive in medium tolong-term thus helping Indian businesses to compete with global competitors in terms ofprice and quality in the near future. Furthermore initiatives such as Make in IndiaDigital India Smart Cities Financial Inclusion and expansion of Large Infrastructureprojects have supported India to achieve the status of the fastest growing economy of theworld. Especially initiatives such as Make in India has boosted the overall growth ofSME's where your company holds a key position in terms of advising and providing researchcontent. As per the recent report of Mckinsey ASIA will be the theme of consumption andcountries like India and CHINA will depend on domestic consumption instead of exports.

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 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 wouldhelp investors 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. As of now though content is shared with all reputed international players therevenues were not converted from such big names. Efforts are now being made to generaterevenues from content sharing with private offices and funds. Your company is makingfurther efforts to increase its profits in this space as right data and information is thekey to success in the current business environment. Your company is a debt-free companyand it does not intend to raise debt at this point of time. During FY 2014 some promotersand investors did infuse some funds into the company. However the company was not able toreap benefits out of the same. However in the near future your company may raise furtherfunds to capitalize the growing capital markets 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 "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 hence stands out on its own.

Very soon your company will enter into EDUCATION field in the capital market.

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 . 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 moderate growth in the Chineseeconomy and muted global growth prospects weighed on overall investment environment.Indian markets also remained volatile during the year despite policy makers continued toremain accommodative 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 technologyinvestment opportunities instead of creating physical assets at this juncture. This hashelped your company to sail through difficult market conditions as our costs remainedalways under check. We have been striking balance between executing both expansion andambitious innovation agendas as well as managing rising costs which is a key subject ofinterest for investors.

Transfer to Investor and Education Protection Fund (IEPF)

During the year under review the company has not required to transfer to Investor andEducation Protection fund (IEPF)


The company is focusing on growth and hence directors have not yet recommended anydividend for the year under review.

Capital Structure

As on date the paid up share capital of the company is Rs.114804500/-

Particulars 2017-18 2016-17
Rs. Rs.
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 2019.


Your attention in invited to the Special Business mentioned in the notice of the AnnualGeneral Meeting regarding re-appointment of Mr. Kishor Ostwal as Managing Director andMrs. Sangita Ostwal Non-executive director of the Company for a period of 5 years.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the company Mrs. Sangita Ostwal is liable to retire by rotation and beingeligible offers herself for reappointment.

The Board of Directors have re-appointed Mr. Mayur Shantilal Doshi and Mr. Arun S Jainas an Independent Director of the Company for second consecutive term of 5 years subjectto the approval of the shareholders at the ensuing Annual General Meeting.

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 four Board Meetings and four Audit Committee Meetings were convened and held. Thedetails of which are given as under:

Date Date
Board Meeting Audit Committee
1 May 29 2018 1 May 29 2018
2 August 13 2018 2 August 13 2018
3 August 24 2018 3 August 24 2018
4 November 01 2018 4 November 01 2018
5 February 05 2019 5 February 05 2019

Board Evaluation

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.

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 Finana'al 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 thereon areplaced 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 Associate Companies

During the period under review your company has not entered into Joint ventures; andthe company ceased one Associates during the period 2018-19 Statutory Auditors

The Board of Directors of the Company proposed the re-appointment M/s Gupta Raj &Co. [Firm Registration No 001687N] Chartered Accountants as Statutory Auditors for a termof five year at 35th Annual General Meeting held on 30th September 2017 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 seventh 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.


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.

Statutory Compliance

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 MGT-9 as part of this Annual Report forming as a 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 been applicable for your company.


Your Directors 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 the Company's operations in future.

Your Directors 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 2019 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 31st March2019 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 adequate 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 adequate 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 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.

Remuneration Policy

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 have 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 .

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

The company has complied with the provisions of Section 188 of the Companies Act 2013during the year under review. Material related party transactions which are at arm'slength are disclosed in form AOC-2 annexed in Annexure IV.

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 outgoing in theform of foreign exchange. 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 Managerial Remuneration

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 the period under review no employee(s) fall under Rule 5(2) the Companies(Appointment and Remuneration 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 Ostwal Managing Director and Mrs. SangitaKishor 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 2018-19 toBSE Limited where the company's shares are listed.

Acknowl edgements

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.


For and on behalf of Board

Kishor P. Ostwal Mayur Shantilal Doshi
Managing Director Director
DIN:00460257 DIN:02220572

Place: Mumbai

Date: 13th August 2019