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CNI Research Ltd.

BSE: 512018 Sector: Media
NSE: N.A. ISIN Code: INE135H01029
BSE 00:00 | 26 Apr 2.25 -0.07






NSE 05:30 | 01 Jan CNI Research Ltd
OPEN 2.25
52-Week high 3.71
52-Week low 1.83
Mkt Cap.(Rs cr) 26
Buy Price 2.26
Buy Qty 1019.00
Sell Price 2.32
Sell Qty 1.00
OPEN 2.25
CLOSE 2.32
52-Week high 3.71
52-Week low 1.83
Mkt Cap.(Rs cr) 26
Buy Price 2.26
Buy Qty 1019.00
Sell Price 2.32
Sell Qty 1.00

CNI Research Ltd. (CNIRESEARCH) - Director Report

Company director report


The Members

Cni Research Limited

Your directors have pleasure in presenting herewith the Thirty Sixth Annual Report ofthe company together with Audited Accounts for the year ended 31st March 2018.

Financial Highlights

Particulars 2017-18 2016-17
Rs. in Lakh Rs. in Lakh
Total Income 440.15 207.35
Profit/(Loss) before Depreciation 11.34 13.77
Less: Depreciation & Amortization 0.22 0.22
Profit/(Loss) before tax 11.11 13.54
Provision for tax net off Deferred Tax 1.60 2.20
Profit/(Loss) after Taxation 9.49 11.31

Your company's total revenue forthe period came at Rs. 440.15 lakhs. Over 97% oftherevenue came from Equity segment. After substantial performance in the previous yearIndian capital markets surged further on the backdrop of recovering economy and strongmacroeconomic conditions which benefited the company's financial performance as well. Thecompany's total expenses increased due to increased purchaseof stock-in-trade resulting inatotal profit of Rs. 9.49lakhs.

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) 426..55 8.51 0.00 5.00 440.15
Profit /(Loss) before tax 28.51 -22.48 0.0 5.00 11. 11

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 overthe years. Moreover Indiahas one ofthe 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 2018 the Indian economy grew at the rate of 6.7% weaker than the Chineseeconomy whose GDP grew at the rate of 6.9%. A series of actions and developments at themacroeconomic front such as the implementation of the GST bill rising real interestrates intensifying Twin Balance Sheet challenges (TBS) and a sharp fall in certainagricultural commodities accounted for the main reasons for weak results. The Goods andService tax(GST) which was implemented in July 2017 has been one of the biggest game-changers for the Indian economy. The government has taken several steps to modify the GSTstructure to harmonize and simplify the tax system. With renewed hopes to develop thenation GST has regained momentumand expanded the growth prospectsfor India.

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 accuracy regarding the prediction of thebehavior of Sensex and Nifty. This has been possible only because ofthe presence ofin-house research capabilities. Indian economy is in the growth phase and with theinitiation of reforms by the government it is expected that significant funds ofinvestments are likely to be drawn into the capital markets. Thus Cni's well - acceptedresearch offerings would help investors increase their wealth. Your company is a debt-freecompany and it does not intend to raise debt at this point of time. Although somepromoters and investors did infuse some funds into the company as reported in FY 2014 thecompany was not able to reap benefits out ofthe same. In the coming years yourcompany mayfurther raise 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 forthe 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 qualityofthe content is world class. Your company has been invited by many international ratingand performance agenciesfor awards in thefieldof 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 ofthe 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 ofthe 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 nowextendingtie up in Europe.


The weakglobal 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 economicgrowth 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. 949448/- 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 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 duringthe year ended March 31 2018.


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

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 18 2017 1 May 18 2017
2 August 11 2017 2 August 11 2017
3 November 14 2017 3 November 142017
4 January 31 2018 4 January 31 2018

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 ofthe Boardandits committees culture executionand performance of specific duties obligation andgovernance.

The performance evaluation of the Independent Directors was completed. The performanceevaluation ofthe Chairman and the Non-Independent Directors was carried out by theIndependent Directors.

Corporate Governance Report

Pursuant to Regulation 34 read with Schedule V ofthe 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. Acertificate fromAuditors ofthe company confirming compliance with the conditions of Corporate Governanceas stipulated under Regulation 34 ofthe Securities and Exchange Board of India (SEBI)(listing obligation and disclosure requirement) Regulation 2015 is given in a separatestatementwhichforms part ofthis Annual Report.

Management Discussion and Analysis

Management Discussion and Analysis on matters related to business performance asstipulated in Regulation 34 ofthe 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 oftheCompany and nature of its business and the same were operating effectively throughout theyear. Internal Audit is carried out byexternal auditorsand 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 actionsthereonareplaced before the Audit Committee ofthe 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 properand efficient conduct of its businessthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness ofthe accounting records and the timely preparation of reliablefinancial information.

Details of Associate Companies

Duringthe period under review your company has one associate - Cni InfoXchange Pvt.Ltd.

Statutory Auditors

The Board of Directors ofthe 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 September2017 pursuant to provisions of section 139 (2) ofthe Companies Act 2013 read withtheCompanies (Audit and Auditors) Rules 2014.

The term of appointment of M/s Gupta Raj & Co as Statutory Auditors ofthe companyto hold office from upcoming AGM until the conclusion ofthe seventh consecutive AnnualGeneral Meeting ofthe Members ofthe Company to be held in the year 2022-23 subject toratification by members at every Annual General Meeting.


Duringthe 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. Thereare currently Three Committees on our Boardwhich are asfollows:

1. Audit Committee

2. Stakeholders' Relationship Committee

3. Nomination and RemunerationCommittee

Details of all the aforementioned committees along with their charters composition andmeetings held duringthe year are provided inthe Report on Corporate Governance.

Review of Auditor's Report

Your directors are pleased to inform you that the Statutory Auditors ofthe company havenot made any adverse or qualified remarks in their audit report.

Secretarial Audit Report

Pursuant to the provisions of Section 204 ofthe 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 ofthe Listing Agreement. Compliance certificates are obtained and the Boardis informed of the same.

Extract ofThe 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 applicablefor 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 duringtheyear under review:

i. Details relatingto deposits coveredunderChapter 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 referredto 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 March2018 the applicable accounting standards had been followed along with proper explanationrelating to 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 ofthe state of affairs ofthe company at the financial year end on 31stMarch 2018 and ofthe profit and loss ofthe 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 ofthe company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared theannualaccountson a going concern basis;

e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls a re 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) ofthe Companies Act 2013 aVigil 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 threatenthe ex'stenceofthe 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 Boardand all employees in the course of day to day business operationsofthe 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 ofthe 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 thatthe 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 isgiven in Annexure -1

Managerial Remuneration

A. Details ofthe ratio ofthe 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.

Duringthe period under review not applicable to your company

B. Details ofthe every employee ofthe company as required pursuant to 5(2) oftheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

C. Duringthe 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 ofthe 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 WholeTime Director ofthe 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.


Your Directors take this opportunity to thank its channel partners all employeesanalysts economists company secretary reg'strar depository exchange authorities andbankers who were instrumental in improving the operations ofthe company.


For and on behalf of Board

Place: Mumbai Kishor P. Ostwal MayurShantilal Doshi
Date: 24th August 2018 Managing Director Director
DIN:00460257 DIN: 02220572