[Brightspot]

Guys Brightcom arranged conference call on 7th Jan 4pm to answer your questions,

Please prepare all your questions and he should answer them promptly otherwise there is no point in asking questions, NSE already asked clarification on incomplete and unsatisfactory responses provided by management

[Logan]

@admin, these are my queries for Saturday’s conference call, please review once and send them to the IR.

To the CFO, Mr.Narayan Raju

-Can you please give details on this notification shared by the company

Authorised Mr. S.L. Narayana Raju, CFO to file an application on behalf of the Company under
Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 for
the purpose of settlement of the proceedings initiated by Securities and Exchange Board
of India (SEBI) issued under Rule 4(1) of the Securities and Exchange Board of
India(Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995- Adjudication
u/s 15A(b) and/or 15HB of the Securities and Exchange Board of India Act, 1992 in the
matter of Brightcom Group Limited.

What is the application that you have filed on behalf of the company and what is the settlement about?

-You and Mr.Acharya were appointed by the board to work on closing the Lycos deal with DAUM. What challenges are you facing regarding this?

-What is your comment on the forensic audit done by SEBI and how would it impact the company if the report is negative? We know that this is hard to answer given that it’s a sensitive issue and SEBI has not yet shared the outcome but can you please give some details on this?

-Why isn’t the parent company sharing the audited results of its subsidiaries? What are your thoughts on this since the majority of the revenue comes from these subsidiaries?

To Mr.Peshwa Acharya,

-What are your thoughts on forensic audit?

-As the president of group strategy, please share your thoughts on Lycos deal with DAUM and the audio ad company acquisition. Why is the company taking so much time to close these two deals?

-To the CEO, Mr.Suresh Reddy,

-Thank you for initiating this call to address shareholders’ concerns and also for improving the communications with the shareholders (through mails and calls).

Because of a few issues we have no choice but to focus more on them than on the business and growth aspects of the company. We request you to address all these concerns and close all the pending issues at the earliest so that we can start talking more about the future of the company.

-Update on forensic audit. How will you address the shareholders if the report comes out as negative?

-Is the audio ad company acquisition canceled? If it’s not canceled then why is it taking so much time to close the deal? Are there negotiations still on and are they related to valuations or any other topic? Can you provide some details at least on this?

-What plans do you have to bring stability to the stock price? We know that the movement of stock prices is not in your control but if you take necessary actions you can bring some stability. The past few years have been a rollercoaster ride for the investors and we would appreciate it if you would take necessary actions to end this.

-Update on shareholding pattern of the promoters. Why didn’t you disclose the actual numbers earlier and waited till 2022 to disclose? Was it because of any threat of a hostile takeover etc?

Will you get the pledged shares back or should we consider the current holding as the final promoter holding?

What if SEBI levies penalty on you for this? And how will it impact the shareholders?

-Few LLPs who were allotted shares back in 2020 and 2021 are doing intraday trading and controlling the stock prices of the company. Why did the management issue shares to these LLPs? You assured us that they won’t do this kind of trading and that those shares won’t come to the market. What actions will you take on this?

-Why did the new company secretary quit? Is it because of the forensic audit and other issues?

-There is a trust deficit in the market wrt BCG. What plans do you have to change that?

-When can we expect Q3 results?

[Brightspot]

@logan please add nasdaq listing also, we are not asking that question nowadays and management also not taking up that topic..but few quarters back it had been hot topic..just let them realize that we can not have discussion on it for time pass, his answer for that topic was parent company need to get proper valuation for it..if corporate gov is bad how can company get valued

[radhutheoptimist]

If this is not the right time to buy shares from open market for ESOP…then when. Why they are waiting.Is management expecting any further fall in the price. Let’s not a hear answers like they don’t want to create artificial demand for the stock. They have their confidence first to the market.

Please include this point also in the question to the management.

[admin]

@Logan – Appreciate your effort in framing all valid questions. Thanks to @Brightspot and @radhutheoptimist. I have mailed the questions to IR.

Thank you for arranging the conference call. Here are the questions,

To the CFO, Mr.Narayan Raju

– Can you please give details on this notification shared by the company

Authorised Mr. S.L. Narayana Raju, CFO to file an application on behalf of the Company under
Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 for
the purpose of settlement of the proceedings initiated by Securities and Exchange Board
of India (SEBI) issued under Rule 4(1) of the Securities and Exchange Board of
India(Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995- Adjudication
u/s 15A(b) and/or 15HB of the Securities and Exchange Board of India Act, 1992 in the
matter of Brightcom Group Limited.
What is the application that you have filed on behalf of the company and what is the settlement about?

– You and Mr.Acharya were appointed by the board to work on closing the Lycos deal with DAUM. What challenges are you facing regarding this?

– What is your comment on the forensic audit done by SEBI and how would it impact the company if the report is negative? We know that this is hard to answer given that it’s a sensitive issue and SEBI has not yet shared the outcome but can you please give some details on this?

– Why isn’t the parent company sharing the audited results of its subsidiaries? What are your thoughts on this since the majority of the revenue comes from these subsidiaries?

To Mr.Peshwa Acharya,

– What are your thoughts on forensic audit?

– As the president of group strategy, please share your thoughts on Lycos deal with DAUM and the audio ad company acquisition. Why is the company taking so much time to close these two deals?

-To the CEO, Mr.Suresh Reddy,

– Thank you for initiating this call to address shareholders’ concerns and also for improving the communications with the shareholders (through mails and calls).

Because of a few issues we have no choice but to focus more on them than on the business and growth aspects of the company. We request you to address all these concerns and close all the pending issues at the earliest so that we can start talking more about the future of the company.

– Update on forensic audit. How will you address the shareholders if the report comes out as negative?

– Is the audio ad company acquisition canceled? If it’s not canceled then why is it taking so much time to close the deal? Are there negotiations still on and are they related to valuations or any other topic? Can you provide some details at least on this?

– What plans do you have to bring stability to the stock price? We know that the movement of stock prices is not in your control but if you take necessary actions you can bring some stability. The past few years have been a rollercoaster ride for the investors and we would appreciate it if you would take necessary actions to end this.

– Update on shareholding pattern of the promoters. Why didn’t you disclose the actual numbers earlier and waited till 2022 to disclose? Was it because of any threat of a hostile takeover etc?

– Will you get the pledged shares back or should we consider the current holding as the final promoter holding?

– What if SEBI levies a penalty on you for this? And how will it impact the shareholders?

– Few LLPs who were allotted shares back in 2020 and 2021 are doing intraday trading and controlling the stock prices of the company. Why did the management issue shares to these LLPs? You assured us that they won’t do this kind of trading and that those shares won’t come to the market. What actions will you take on this?

– Why did the new company secretary quit? Is it because of the forensic audit and other issues?

– There is a trust deficit in the market wrt BCG. What plans do you have to change that?

– When can we expect Q3 results?

– Any timeline for ESOP share purchasing?

[NIRAJ1]

concall summary : source from a group : i am just sharing it here… 1- Gratitude for staying with company and wishing a prosperous new year.
Raju CFO speaks- FA- replied to regulatory authorities. 6 yrs and all subsidiaries. Unique business model. Annulment process in way. No cash paid to MM. All are consolidated companies are AUDITED. Each subsidiary is audited. Israel subsidiary by E & Y. Company not involved with 5th & 6th trades.
Satish Speaks- Audio acquisition. All due process adhered to. Update in February.
Peshwa speaks- Discussion going on weekly basis. SBLC from bank. Paperwork is being done. Will be finished soon. Quantum Computing in process. for all queries. Trying to establish more robust mechanism.
Shareprice- company has performed very well. More than 40% growth. Results sooner this time. Outstanding issues are taking long time. We take responsibility for informing early some things which are jow taking time. It will shine brightly in 2023. Market will recognize us soon.
Vaibhav- Suggestion to hire independent auditor to audit and give report. Answer- will evaluate. Daum once done we will upload audited results. Pledging of shares to appear back in promoter holding. We are fighting back to get back shares. The people who have sold it will have to buy it from the open market and give. Q4 DII meeting..
Raju and Peshwa- concentrated strategy to get them on board. Each of FII & DII have their own strategy. ESOP trust may buy. Funds are raised to grow the company.
Intent IQ patnership – no answer. Its mainly in Israel. The collaboration will help us monetize a lot of traffic. Why Equity dilution was done at so low rates. We wanted to be a debt free company. Positive free cash flow company. Strategic decision to stay out of debt. Will play out well longterm. Better that debt companies are debt free.
Promoter shareholding- before Match was 24% portion was pledged which was transferred off market. So it was reported as not being Promoter. Pledged shares- trying to get back. Same old answers being given… We are aware that shareholders are suffering in spite if company doing well. Few reasons that are there will be resolved. Long term vision- We are in an excellent field of business. Evolving business and we have to be nimble enough.
Abroad listing- will look at it when the markets are conducive. We will make a few deals with the 5G players.
Closing comments- Grateful for opportunity. Our dream is to revolutionize digital marketing. In 25 countries. Future- will bank on your support. Prirotized building sustainable business model. Not worried by short term.

[Logan]

In the last conference call the CEO said that the management people’s bandwidth is getting stretched etc but he’s not taking any action to resolve that. Arthi consultants sent the compliance certificate/letter to them on 5th January but the company shared it on 21st January. Every other company has shared that certificate in the first week of January except BCG. The same with shareholding pattern, which too was shared only yesterday. If there was a company secretary working in the company then that person would’ve taken care of that but the CS quit and his replacement will start working from mid February. I’m not sure why they can’t hire someone who can start working immediately.

It seems like most of these LLPs who were allotted shares have sold entirely and their selling is one of the reasons why the stock is underperforming. I asked about their trading activity to the CEO in the conference but he did not answer it. I request all investors (who get the opportunity to ask questions in the conference call) to ask about the LLPs selling as the CEO may ignore to answer all our queries that we send.

The CEO can’t complain regarding bandwith of the management because it’s his responsibility to hire suitable people at the right time. He gets serious only at the last moment. One very good example is previous CFO, Mr.YSR left in March but his replacement was found only in June and he started from July. Who’s fault is this? Why couldn’t they start looking for Mr.YSR’s replacement six months before his tenure ended? Same with company secretary post.

Almost everything, they do only on the last day. Paying dividend was done on the last day, issuing bonus shares got delayed, CFO replacement was hired 3 months after the old CFO retired. You get good valuation when you do things as early as you can and not at the last moment. Also most of these aren’t hard to do if the CEO and his team are more flexible but BCG’s management is too rigid and they don’t suit the modern standards. Everything has to go through the CEO like how things are in private companies and startups. As the company progresses and becomes bigger, the CEO has to handover some of his responsibilities to others. Like I’ve said many times before, he may be good at business related things but on other things he’s too slow or takes too much time to understand the situation. I’m not sure whether it is careless attitude or laziness but this has to stop.

I appreciate that they hosted a conference call to answer few queries but that was unnecessary if the communication with shareholders was very good in the first place. The IR department won’t be knowing about any development and only response they would give is “we will update you at the right time”. What else can we expect them to say when they themselves don’t have any information? Only good thing now is that they are atleast responding to our mails and calls. Like winning a Consolation prize which isn’t worth anything.

[Yogi]

Thank you for some words on the current situation Logon Sir.

Sir, You could have delved more on the exiting LLPs. Many of the retailers are talking of exiting too as there is a lot of confusion in their minds. Please write more on the Cause (mostly greed) and Effect of the exiting LLPs which will enable us to take wise decisions.

What do you foresee the future of the company/stock in 6/12 months & 2/5 years? Your input is of Very Great Value to us.

[Logan]

Thanks @Yogi. I don’t think retail investors like us can know or even try to guess about all that. We can only talk about the developments happening and the notifications shared by the company on the exchanges. In the last two conference calls I had asked the CEO about these LLPs and he ignored it in the January call and gave a very diplomatic answer in the November call. We can’t do more than that because conference call is the only way we can communicate/connect with them. Even if we do go to the company’s office they won’t reveal anything. He’ll just say that their lock-in was over so they sold etc which is not in his control.

Regarding future and other topics, as Warren Buffett says in Becoming Warren Buffett documentary that “he likes to think about business or investment problems, and that they are easy and that human problems are the tough ones. Sometimes there aren’t any good answers with human problems and there’s always good answers with money (for business and investment problems)”.

Wrt to BCG, if we analyze, most of the issues/problems are human or other problems. SHP is the best example as it’s a human problem. It was not communicated properly. In the last conference call we got only little information on that but we still didn’t get any clarity. I think we investors can’t be sure how much the actual promoter holding is and whether they’ll get back those pledged shares that were sold. In MCA they are showing that the holding was low in March 2021 also, which means those shares weren’t sold during the peak prices of the stock.

At first Lycos-Daum was a business problem and now it has become a different problem. It could’ve been solved if BCG paid the money that Daum asked but that would be like paying more for something which isn’t worth much. But on the other hand, not just the valuation of the company went low but even it’s image got damaged because of the Lycos case. These are hard to judge even in retrospect. What if BCG paid all the money that Daum asked and kept Lycos but didn’t invest money in starting Brightcom (programmatic platform) because of lack of funds. Now the company is doing well because BCG was one of the earlier companies to start the programmatic thingy but what if BCG didn’t start it at all or started too late. Many companies went bust or struggled because of the competitive nature of the industry and the duopoly nature (Google and Facebook). Smaller companies are doing little better only from the last 1-2 years and that too because of the pandemic. Facebook is struggling because of the strict privacy rules that Apple implemented but others didn’t struggle as much. Snap, Facebook (which includes Instagram) are struggling whereas Tik Tok is growing.

Getting back Lycos now is more to do with the image and less to do with the business as it doesn’t bring anything important. In the world of ChatGPT, decentralized internet, streaming and CTV etc I’m not sure how much Lycos will help but it will be like taking some burden off your shoulders and have a better image.

Business wise company is doing good but as always, other issues get highlighted more and I’m not sure what happens wrt to all those issues and the timelines as some are in management’s hands and some are not. With other companies that I have invested in, most of the problems are due to industry related and their valuations depends on their business. Buying and selling always depends on individuals and like I always say, investors should talk to the management first and if they are not satisfied and if they suspect anything then they should approach SEBI or other authorities.

[Yogi]

Thank You so much sir.. Just that some narrative on the present situation by “Others” who many believe are experts gives the Edge in making decisions. Discussion in Telegram and WhatsApp groups do help a lot.

CI Sir’s take:
https://t.me/conservativeindiangroup/24402

All views are personal and subjective which are prone to market risks. Ultimately, Decision to buy or sell are to be made by the Individual and nobody is responsible for the same.

[Nikhilraj]

We have a strong retail investor group like this forum and telegram group having about 7.5K members . We retailers work better than the management for the good will of the company.. it will be funny if all retailers connected together decided to buy 1000 shares in a particular day and hold till atleast ATH. Single day collect around 70L (7K x 1000) . With the current share price it is not a risky move for a retailer .Same time it will be a shocker for the operator group (if any) who wants to keep the price lower .

[Nikhilraj]

Concall expectations :
( Company posts q super super result tomorrow)

CFO starts with the results and some notes on Hygrowth model . Mic to Sateesh ji ..30 minutes lecture on OOH technology.. Peshaw ji enters .. 15 minutes class starts on quantum computing and sadness statement on low PE .. ends up with talk the note ‘discussion going on lycos settlement’
SKR’ s turn .. Hygrowth model , low capex high Gain model invented by BCG ..future is bright ..
50 minutes gone ..
Q& A starts
Q1: congrats to results and audio deal . Update on FA?
A: all details have shared and closely working with them to close at the earliest.
Q2: congrats to results ,SHP ?
A: can not disclose due to regulations
Moderator intervenes :
It is time to wind up the call .. Thank you all!!!
End of the day Typical investor :learned new ideas like OOH , Hybrid model growth , revised lessons on quantum computing …

Let’s hope this won’t happen and do not forget to ask proper questions who ever gets chance 🙏

[saf]

Hi
Just checking if anyone here has written/communicated to SEBI about the Financial Audit report? what is the update/ progress. I’m sure there will be some rule regarding the same as this can go on for years. Eager to know if someone one has communicated with SEBI regarding the same and what was SEBI reply in return??

[vkhare789]

How can we write to SEBI? Is there a complaint process for retail investors?

[smitsat]

Revenue 2865 crore 42% rise yoy, net profit 544 crore 46% rise yoy.

[whyShares]

BCG net profits for
Dec 2022 Quarter: 544 crores
Dec 2021 Quarter: 371 crores
544/371=1.466 – nearly 50% increase

EPS (Earnings per share) is less in Dec 2022 at 2.69 compared to 3.57 in Dec 2021. This is because the number of shares have almost doubled after bonus issue, etc.

In Dec 2021 the price of BCG was about 200. The Company is doing well now and if the same valuation as in Dec 2021 is applied now, the share price should be 150.70

200*2.69/3.57=150.70

[whyShares]

BCG Profit for first 9 months of the financial year (1st April 2022 to 31 December 2022 is: 1,57,250.33.

This is 50% more than the profit for the full financial year (1st April 2021 to 31 March 2022) = Rs.1,03,484.46

So on completion of the full financial year 2022-2023 expect profit to more than double from last financial year.

What is holding back the share price of BCG is mainly due to the scare mongering by BCG Shorters.

A big hue and cry is made of the Forensic Audit. SEBI ordered the fornsic audit because BCG had written off some “impared Assets”.

Impared Assets are like the value of expired medicines, the value of which has to be written off when it is destroyed.

In Software business a value is given to their software. When new software is developed the old software becomes expired or of no value and written off from the books.

This is a normal accounting practice by all software companies. When BCG did it it was made into a big issue and the Shorters had a field day.

Hindenberg is a shorter of Adani Group. That should tell you a lot.

[whyShares]

Correction to above post
BCG Profit for first 9 months of the financial year (1st April 2022 to 31 December 2022 is: 1,57,250.33 Lakhs

This is 50% more than the profit for the full financial year (1st April 2021 to 31 March 2022) = Rs.1,03,484.46 Lakhs

[chris]

The biggest positive I feel is the dividend payout from subsidiaries to parent, although it’s a minuscule amount of 5 crore when compared to overall revenue and PAT, atleast it is a start. Improvement in the standalone figures will change perception in the market for sure, if this trend of quaterly payout continues.
Revenue and PAT were in line with the guidance given by the company.
For me the dividend payout was the tiny ray of light in the report.

[akkithegrt]

This time one question to the company.
Company is trading at 5000 crore valuation and the revenue will be some odd 7000 cr plus.
What will management do to reduce the free flow of stocks in market?
What if forensic report comes after 3 years?What is the plan B company is having to boost investor sentiments?
When will all subsidaries be audited?

If anyone gets chance pls ask this questions

[Author]

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