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CNI Research Ltd.

BSE: 512018 Sector: Media
NSE: N.A. ISIN Code: INE135H01029
BSE 00:00 | 19 Jul 2.96 0






NSE 05:30 | 01 Jan CNI Research Ltd
OPEN 2.95
52-Week high 4.40
52-Week low 2.11
P/E 296.00
Mkt Cap.(Rs cr) 34
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.95
CLOSE 2.96
52-Week high 4.40
52-Week low 2.11
P/E 296.00
Mkt Cap.(Rs cr) 34
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 Fifth Annual Report ofthe company together with Audited Accounts for the year ended 31st March 2017.

Financial Highlights




Rs. in Lakh

Rs. in Lakh

Total Income 207.4 4869.1
Profit/(Loss) before Depreciation 13.8 -43.1
Less: Depreciation & Amortization 0.2 0.2
Profit/(Loss) before tax 13.5 -43.3
Provision for tax net off Deferred Tax 2.2 0.0
Profit/(Loss) after Taxation 11.3 -43.4

Your company's total revenue for the period came at Rs. 207.4 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 companies financial performance as well. The company managed toreduce total expenses which improved the margins delivering a total profit of Rs. 11.3lakh.

Segment wise or product wise performance

Particular / Segment Equity

Year ended 31st March 2017

Research Product Sale Total
Rs. In Lakh Content Sale Other Business Income
Revenue (Net) 187.4 10.9 0.0 6.2 204.4
Profit /(Loss) before tax 25.8 -18.5 0.0 6.2 13.5

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 2017 Indian economy grew at 7.1% stronger than Chinese economy (CY 2016 realGDP growth of 6.7%) primarily driven by ongoing reforms undertaken by the BJP led NDAgovernment and despite the impact of demonetization on key sectors including constructionand financial services. Major initiatives undertaken by the government during FY 2017includes demonetization of Rs. 500 and Rs. 1000 notes during November 2016 andimplementation of GST bill during July 2017 which is expected to underpin long-term growthprospects of the Indian economy. The implementation of GST would reduce the cascading taxeffect and would bring small and medium enterprises and unorganized sectors under thepurview of the tax authorities. This would further help the Indian markets to become morecompetitive in medium to long-term thus helping Indian businesses to compete with globalcompetitors in terms of price and quality in the near future.

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 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. A healthy growth of 50% was witnessed in the content sharing segment in FY 2017.Your company is making further efforts to increase its profits in this space as right dataand information is the key to success in the current business environment. Your company isa debt-free company and it does not intend raise debt at this point of time. During FY2014 some promoters and investors did infuse some funds into the company. However thecompany was not able to reap benefits out of the same. However in the near future yourcompany may raise further funds to capitalize the growing capital markets and growthopportunities.

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 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 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 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 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 in technology investment opportunitiesinstead of creating physical assets at this juncture. This has helped your company to sailthrough difficult 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 Rs. 1131315/- 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.

Capital Structure

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:-

Particulars 2016-17 2015-16
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 2017.


In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the company Mrs. Sangita Kishor Ostwal is liable to retire by rotation andbeing eligible offers herself for re-appointment.

Also the Board of Directors of the company has accepted the resignation of Mr. MehulY. Desai as a category of Non-Executive Independent Director with effect from August 042016.

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:

Sr. No. Date

Sr. No.

Board Meeting Audit Committee
1 May 13 2016 1 May 13 2016
2 August 4 2016 2 August 4 2016
3 21 October 2016 3 21 October 2016
4 February 1 2017 4 February 1 2017

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 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 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 one associate Cni InfoXchange Pvt.Ltd.

Statutory Auditors

The Board of Directors of the Company proposed the appointment M/s Gupta Raj & Co.[Firm Registration No 001687N] Chartered Accountants for a term of five year in place ofM/s N K Jalan (‘the retiring auditor') pursuant to provisions of section 139 (2) ofthe Companies Act 2013 read with the Companies (Audit and 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.


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 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.


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 equityshares with differential rights as to dividend voting or otherwise; iii. Issue of shares(including sweat equity shares) to employees of the Company under any scheme save andexcept ESOS referred to in this report; iv. The Managing Director of the Company does notreceive any remuneration or commission from any of its subsidiaries/Associates; v. Nosignificant or material orders were passed by the Regulators or Courts or Tribunals whichimpact the going concern status and 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 theannual accounts for the year ended 31st March 2017 the applicable accounting standardshad been followed along with proper explanation relating to material departures; b) 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 financial year end on 31st March 2017 andof the profit and loss of the company for that period; c) The directors had taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; d) The directors had prepared the annualaccounts on a going concern basis; e) The directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively; and f) The directors had devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate 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 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

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.

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. 2913/-(~US $ 45) 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 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 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 2017-18 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.

For and on behalf of Board
Place: Mumbai Kishor P. Ostwal Mayur Shantilal Doshi
Date: 25th August 2017 Managing Director Director
DIN: 00460257 DIN: 02220572