[Mundada]

What is better option which will reach to maximum investors?

[JackSparrow13]

Biases are hard to overcome. A lot of investors I really look upto, are having a field day laughing at Brightcom. Most of them have gleefully read the SEBI’s notice, and 5 month delay issue, and are partying so hard, they have forgotten to read company’s revert yesterday. Some investors also consider this website as a pumping platform for Brightcom (then i seriously need to pump here harder :P), and are reading every post here as a joke.

Well, then, let me reply them here.

To be fair, life is hard, so if laughing helps you mentally and physically feel better (and you haven’t got breathless laughing till now), I would urge you continue laughing.
And then read the company’s revert… and then post it below the post, where you made fun of Brightcom. and then surely find loopholes. Why such a biased coverage?

Having said above, I am not a fan of Bonus/splits (to make it “affordable”), and increase in number of retail shareholders should hardly matter to a management. This is BCG not Berkshire Hathaway, where Buffett was forced to issue a new class of shares. So, I do agree with criticism BCG is getting for it, but this is absolutely wrong time to throw in the towel, with BCG’s core business, Mediamint, and audio acquisition, having better days ahead.

But what do I know, I just wrote this post to pump Brightcom…

[hw_tw]

We are unnecessarily getting worried about matters which are not important … information is shared to exchange when the matter is clear from SEBI that they would want to go ahead with the audit … let’s look beyond this

Now the question is Why SEBI wanted to go ahead with the Audit … Is SEBI/ Deloitte not satisfied with the information shared all these days ?

From SEBI’s point of view they are not the authorities to certify that the accounts are clean … their job is to protect investors by taking actions … For this they have hired external Auditors like Deliotte to dig into things in detail and find out if the accounts reported are as per the law

For example in this case SEBI will not have any clue on what GDPR compliance is all about and how it will impact the organization … also I guess they will not have detailed knowledge about country specific accounting standards

So SEBI has offloaded their Risk to third party … They will play safe and rightly so to protect themselves from any damage caused because of wrong findings … tomorrow no one can question SEBI that you gave a clean chit

Its like doctors / hospitals saying that you have Cancer or some other problem basis Diagnosis / Scanning report findings and not on their own … later on when we figure out that there is no Cancer through some other means we can’t go blame a doctor that your diagnosis or treatment is wrong

Now the second question is Why has Deliotte not satisfied with the information shared … Why they want to get into an formal engagement

One reason which I could think is that it is more a operational issue forcing them to get into a formal engagement

The current Deliotte team would be looking at things at high level and may not be fully equipped to deal this matter on their own … This team will have knowledge in Indian accounting standards only and also will not have much idea about GDPR

Now that they have the initial set of documents they know that they would need to also involve other country specific auditing team and also the experts who understands GDPR law

In this case they would need to involve teams from Israel, Argentina, USA and also the teams who has knowledge in GDPR

Note that they can’t involve these people just like that … All these people are billed on hourly basis and their rates are pretty high … these individuals allocate their time for an engagement only if there is a formal contract … Now that they have the scope clear after the initial discussions with BCG team they can get into a contract for the Audit and close it

In short SEBI is dependent on Deliotte India Audit team … and Deliotte India team is dependent on other country Audit teams along with GDPR experts

[hw_tw]

What is the scope of the Audit

BCG has already clarified that the matter is only related to the Impairment of Assets and nothing beyond that as we perceived from Sept 16th letter … this is good in terms of timeframe and costs if any on BCG side … It is good even in case of a full fledged Audit tok but just takes more time and thus more concern from impaitent short term Investors

What is the timeframe of this Audit

It took 5+ months to do the initial check … I guess Deliotte may not be fully involved all these days … Assuming the scope is more clear now and they also had most of the documents on their side, I feel it might soon get closed … can’t say the exact time, but generally these firms work on a fixed timeframes and also push their clients to share the documents soon so that they can close it within the timeframe

Another view is that for the recent acquisitions by BCG, EY and others were taking around 2 months to close the financial due diligence … This might also take similar time or lesser as the scope is only pertaining to Asset Impairment

What is the impact of it if they find out any thing

– Revert the asset impairment partially or fully
– Penalties to Management plus something more probably

Before that I guess BCG will have option to contest the findings

Will there be any financial loss to the company

Since these are non cash items, and just a book entries I guess there won’t be any material impact

Please note, these answers are just my views and may not be fully correct … But the questions are more important for the investors to focus on and get answers for

[Logan]

I request everyone to send mails to the company asking them to arrange a conference call ASAP (ideally within this week).

The next quarter earnings call will be in June and we’ll have to wait till that time to talk to the management people. Many things can happen in that period and it’s better if they talk to shareholders now and allay concerns and give more clarity.

[Raja]

The following msg from MMB forum..credit and thanks to suresh_999
Few points to note 1- Forensic audit is good as it is a one time opportunity for the company to come clean. 2- Previously companies like Infosys, Binny, Sun Pharma have undergone these audits and have come clean. 3- Most importantly it is not about day to day accounts but one time impairment charge which is as per GDRP regulations. Moreover it is an non cash accounting entry and not diversion of funds or usage of company funds. 4- Audit process has probably started as the company has suggested they have provided all documents from September so if there was anything fishy it would have been public knowledge by now and the company and promoters would not have been allowed to issue preferential shares , go on an acquisition spree or issue bonus shares 5- Any day we may get news of Shankar Sharma paying the remaining 75% for his preferential shares. 6- Company in its last concall had declared that they will issue the guidance for next financial quarter results any time in the first week of March. We can expect that to be announced next week and it should be good as basic business operations are booming. 7- Name of Audio company should be declared within a couple of months. 8- Daum issue is already settled as repeatedly stated by management.

[hw_tw]

What is GDPR in layman terms

It is a privacy law defined by European Union / EU to protect privacy of users sharing their personal details to a particular company like FB, WhatsApp, Telegram or even this website

As per the law, the company collecting personal sensitive information like name, age, email-id, phone numbers, aadhar, pan etc; should do so with certain conditions that they are going to protect it end to end and also won’t share it with others for any type of usage including marketing / ads … This also applies to companies who get this data from 3rd party for processing and to companies who deal with data from EU

For example if you have uploaded your resume to Naukri … GDPR law strictly prohibits InfoEdge the parent company of Naukri to share this information for their other portals like 99acers or PolicyBazaar or Zomato etc;

In another example, Facebook previously shared their data to a firm called Cambridge Analytica which in turn used it to influence voters during Trump election … FB was fined 5 billion dollars for this breach

https://en.wikipedia.org/wiki/Facebook%E2%80%93Cambridge_Analytica_data_scandal#:~:text=In%20the%202010s%2C%20personal%20data,be%20used%20for%20political%20advertising.

In case if there is any breach, the company is liable to pay 4% of their turnover

BCG has impaired certain Assets which they felt it is not worth in the context of GDPR compliance …
The Asset they are referring to could be a Software or Data collected using their own Software or from 3rd party or a Hardware storing this data or all of these

BCG would have all these legacy assets valued at certain value over a period … Note the valuations could be both the cost of building / purchasing these Assets plus Good will … They might have found that these assets are no longer complaint to GDPR

They now have options to modify them or sell or discard them … and they have choosen to discard them also assuming that there are no customers for these assets and also they can’t sell them in the market as the target company will also have the same challenge 🙂

Coming on to the penalty portion it is 4% of your turnover every year … Let’s say BCG is charged after 3 years … it would have to pay minimum of 200 Cr for every year and for 3 years it would range anywhere from 600 to 1000+ Cr … this amount they have to pay irrespective of the benefits they got like even for 1 rupee

Now decide why would anyone want to keep certain Assets which are not worth for and are not used by them … Isn’t it better to discard them and clean your books

[Brightspot]

https://www.businesstoday.in/magazine/investment/story/impairment-charges-can-affect-a-company-stock-price-131898-2013-08-21

Please read this even Tata Steel had to go through it: and stock price wasnt affected..do you think brightcom investors or sebi understand this?

Tata Steel shareholders got a shock when the company reported its biggest-ever quarterly loss in March. The steel-maker reported a net loss of Rs 6,678 crore for the January-March period compared with a net profit of Rs 203 crore in the year-ago quarter.

The reason for the fall was the company’s decision to reduce the value of foreign assets in its books by Rs 8,356 crore. The write-off, called impairment charge, is a non-cash event that does not directly impact finances of the company concerned. That is why the decision did not hit Tata Steel’s shares; the stock touched Rs 314 on May 29 as against Rs 299.50 on May 23, the day the results were announced.

“Unless there is a material change in earnings, cash flow and leverage, the impact of impairment on a company’s valuation may be negligible. There is no reliable way to forecast the stock movement after a company decides to take an impairment hit,” says Vaibhav Chavan, dealer, wealth management, Equentis Capital.

In spite of this, impairment does affect some ratios used to value companies and, thus, how the market perceives the company in question.

[Deepak]

In bcg concern is only the assest impairment because as per the sebi letter they raised 4 issue but when it comes to brightcom clarification clearly it mentioned assest impairment

[Brightspot]

Deepak, i crossed check with other sebi notice more or less its standard notice..but they have included one thing like focus would be on impairment changes

[Brightspot]

So now if SKR schedule conference call and confirm concern is only impairment of assets only..then 90% pressure on investors will be reduced and i can bet trading will be normal tomorrow after that

[Deepak]

Yah agree skr should arrange conference call or either appear on media. But better to be on media. And one good thing that they have mentioned only Fy 2015-20 financial year means indirectly it is about assest impairment otherise they include the rest of the year also. But better to hear from skr side.

[nitin_asce]

One question, why is so much hate there for BCG on Twitter. Even some well known names are happily trolling BCG.

It’s all about how much risk you want to take and returns follow your risk profile. More the risk more the returns.

[Diana Horton]

My Dear BCGians

Its Great to write and be in touch with you all once again after Couple of years in this Forum.

We the Long term Believers of our BCG have Stood Fast during the Various Ups and Downs. We have seen the worst between 2016 to 2021.

We all believed in the Fundamentals of BCG and because of our research and Conviction– benefitted Leaps and Bounds for which we are eternally grateful to the company which created WEALTH for all of us.

We always knew about the naysayers and Haters of our beloved BCG. They hated us when it was low. They hated us even more when it reached 50 s and 100s. They prayed in silence and did all sorts of smear Campaign against us on multiple platforms. But, to their Grief, Nothing Mattered and Markets Proved BCG TO BE THE KING. BCG In fact touched all time high of 200 and became Large Cap, which this Naysayers couldn’t tolerate or believe!!!

Now, Markets has given an Opportunity for these Haters and Naysayers a MINISCULE Chance- I Once again re emphasize- MINISCULE CHANCE for them to augment their smear campaign against us.

These Haters and Naysayers are the ones, WHO DONT EVEN HAVE a single share in their holding, who are doubled up in bending the back – trolling, requesting, pleading and begging for the retailers to sell the shares!!!

Also, these are the Mahaan souls who always say in retrospect “ I told you so” !!!

The Haters and Naysayers, became vehement and Obstinate Naysayers, because, they didn’t get an opportunity to buy BCG because of their foolish one sided belief or those who fell into the missed Golden Opportunity group.

I can say with Utmost confidence in the company that I am invested based on my years of research – We will emerge out of this minor upset– rather GLORIOUSLY with Flying Colours, colouring all the Haters and Naysayers face – PITCH DARK.

I also, will say, to our beloved BCG community – take decisions in Buying, Holding or selling – Purely based on one’s own research and conviction, rather getting influenced by those who says I told you so!!!

Its also my strong belief that- 2022 will also be the Year of BCG, as like 2021 – Two years in succession…. Considering all the Developments that are happening in our BCG and also in the Adtech sector.

Missed opportunities will cost the retail participant very dearly… hence, . Dont Fall Prey for it. Stay Put… Stay Long… and be a part of the History in the evolution of making a Mammoth Wealth Creation opportunity through and by- our beloved BCG

……………..DH

[Diana Horton]

My Dear BCGians

I would also like to add One more Final Paragraph before the trading begins today – for all those Doubting Thomasses, Naysayers, Shorters and the Smear campaigners–

You always asked for Showcasing the International Books of BCG. Your smear campaigning was always surrounding the previous year’s AR and the books.

What else could be an ACID Test for our Beloved BCG than the FORENSIC AUDIT by the concerned Authorities?!

Once this AGNI PAREETCHA comes to an end, based on the OUTCOME of the FORENSIC AUDIT – as and when…..

The Naysayers will become YES Sayers…..

The Shorters will loose out heavily…..

The Doubting Thomases and those who tender off their holdings based on the current scenario– will loose out to a BIG LIFE TIME OPPOURTUNITY.

The Smear Campaigners face will be SMEARED OFF with PITCH BLACK paint.

Here you go!!!!

I am TAKING UP AN OPEN CHALLENGE – with you ALL

I can tell you with CONFIDENCE, based on the research and the Conviction that, WE THE LONG TERM ARDENT BCGIANS WILL INDEED HAVE THE FINAL LAUGH

Be the proud Owners of BCG – which has already offered and will further offer – the Mammoth Wealth Creation opportunity of the year and decade to come!!!!!

………………………DH

[Brightspot]

1.7 CR sell orders ..Those are probably retailers sell order to whom SKR wants to reward with bonus share and make price affordable, so SKR needs to understand retailers are just panic bunch they wont stay with company in difficult time..to stabilize the price one need to have institutional investors or mutual funds who can understand company audit process

[kiran]

point is why he has posted the matter now on Exchanges , could have intimated long ago when sebi letter appeared or on friday itself when again got intimation from sebi ,why on monday evening ?????? or could have put after bonus share issue as he has doing! strange !

[hw_tw]

Presentation on Impairments from BCG shared to exchanges back in July 2020 … Sharing it again for the new knowledge of new investors who had entered post this event

The impairments is a clean up activity done by the company and is across its 10 subsidiaries

– For Products, tools and datsets which are as old as 12 years ago and obsolete and also has regulatory challenges like GDPR

– Advances paid to Publishers … couldn’t recover them fully as there was less traffic to these sites

– Advances to colocation centres

Attachments:

1. 56485214-14a1-4a9d-a8d0-98fe529b101e-1.pdf

[sandyc316]

point is why he has posted the matter now on Exchanges , could have intimated long ago when sebi letter appeared

This has been troubling me as well. However, if you go through the clarifications posted by SEBI regarding reporting to exchanges about forensic audit, it says that reporting is not mandatory if the consequences are deemed to be “immaterial” (or something to that effect). Did the management believe that the impairment being non-cash item fell in that category and hence wanted a clarification from SEBI before reporting it to exchanges?
As for why, in that case, it took 5.5 months.. I’m not sure.
However, one thing is for sure… all of us long term investors would have one time or another had this thought – why the heck is SEBI not asking for a forensic audit so that we can shut the naysayers for once and all. I think many of us would be pleased that this is finally happening so that we can just get it off our back and move on!

[myainvest]

Does anyone know the timeline of forensic audit. For example, when it happened in Suzlon, Infy, Sunpharma or Binny – how long it took ? Min / Max timelines. I can only see the news of forensic audit initiation in these companies in internet. But can’t see the closure of these audits at all

[Author]

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