[Investor_2022]

I think first 2 lines are more important to understand a lot.

• Given that there is a global change in the way businesses are operating due to the COVID pandemic and our future plans for the coming fiscal year in this
environment, Brightcom Group decided to test its assets for Impairment.
• The company decided to take a look, as a prudent measure, at all its assets across its subsidiaries in this context.

@Saul Goodman, please share your thoughts on it.

[Raveendra]

Hello guys,

Where can we get conference call details ? Can we propose for a video conference like zoom meeting ?

[Logan]

1>

Hi Investor_2022, I’ve shared my opinions but please don’t take it for buy or sell calls.

I think the presentation looks great and also it’s very informative. Now we have a clear understanding of what constitutes few items in the balance sheet, all these years they just reported these items as just “loans and advances” or “other”. If they reported the same in Annual Reports, then there wouldn’t be so much confusion.

According to me, writing off some of the assets makes sense, if those assets didn’t produce anything (expected cash flow) then there’s no need to keep them. And these are not small amounts and keeping them would’ve dragged the company’s growth. Now they can focus on growing the business and improving cash flow. It will also help in consolidation of the subsidiaries. I don’t know whether the market will take it as positive or negative but in my opinion this is great move.

I think BDO Global suggested the company to write off these assets and this shows the importance of having a reputed auditor. I want them to appoint BDO for India operations as well, all these years the standalone business was not doing well. We may see improvement in the standalone business if they appoint BDO and also they can give better suggestions on how to handle few issues.

[Basri]

@saulgoodman then asset impairment has to be recognized as a debit to Loss on Impairment and a credit to the asset. Accordingly the occured loss will reduce income in the income statement and thereby reduce total assets on the balance sheet. Am I right, please correct me and if so, is present results taken care of the same.

[brightcom investor]

This is to be reviewed by management and should be tested for impairment on regular basis to prevent overstatement of financial, generally intangible assets are particularly at the risk of impairments, Microsoft recognized impairment losses on goodwill and intangible assets related to in 2003 purchased of NOKIA for $ 5.5 billion because Microsoft has not been able to capitalized on the business and book heavy loss.

[Logan]

@Basri, I’m not an expert on accounts so whatever explanation I give won’t do you any good. Let us wait and see what the management has to say about this in the conference call. I think Mr.YSR, the CFO, will explain about this tomorrow.

@brightcominvestor has written well on the subject. I think all the companies should review their assets on a regular basis to avoid massive losses in the future.

[odysee]

Admin, my message submitted about 5 minutes ago just disappeared.

[odysee]

I had mentioned that the consolidated book value per share on 31.3.2019 was Rs 63 odd. As on 31.3.2020 it stands reduced to Rs 59 per share ( an ‘impairment’ of Rs 13 per share) after factoring in the consolidated earnings per share of Rs 9.24 for 2019-20. The impairments announced of Rs 869 odd crore I presume would be set off against the accumulated reserves of BCG. But I also noted a large negative figure of consolidated income disclosed in the line just following the net profit after tax of Rs 440 crore in the consolidated results. Have not been able to tie up the Rs 13 reduction per share ( consolidated book value) with the impairments announced. Maybe we will get a clearer perspective tomorrow in the conference call.

[Logan]

@odysee, you may have missed including the preferential shares while calculating the book value.

[admin]

@Odysee – I could not see any post, hence unable to retrieve.

[odysee]

Hi Saul, your comment at #7444. Actually I have considered the book value as on 31.3.2020. The preferential issue was only done end May 2020.

[odysee]

Thank you admin. Redrafted and posted in shorter form at #7442.

[sandyc316]

This is a wonderful news! Thanks for the update @admin

[admin]

Monetizemore has another article which deserves special attention!

HOW TO BEST MONETIZE LATIN AMERICA (LATAM) TRAFFIC

The monetization potential for Latin America, also rightfully labeled as the “Next Great Advertising Ecosystem,” is indeed very promising. LatAm is one the most dynamic advertising regions and publishers should not ignore the potential of traffic coming from this geography.

“Brightcom – an ad network that caters to both advertisers and publishers. We’ve seen strong performance for geographical locations such as the US, Latin America, and the Asia Pacific.”

Please do check out this tweet to get a better understanding –

#Brightcom has a complete set of digital marketing tools with extensive global reach ( India, USA, Europe, LATAM, APAC) compared to its competeriors, which include large global players.

Source: Investors Presentation (BSE) pic.twitter.com/X81NwdX1dl

— Brightcom Investors Forum (@BrightcomInvest) July 1, 2020

[admin]

Re-posting MMB post by aindia (as it was marked offensive)

IMPAIRMENT VS.BCG-SIZE OF CONSOLIDATED BALANCE SHEET:

Supporting Data Read it from 2011-12 to validate the below conclusions
2008-09: 382 cr
2009-10: 450 cr ( up by 88)
2010-11: 575cr ( up by 125)
———————————————————
2011-12: 1264 cr(up by 689)-Effective year of merger
2012-13: 1605 cr( up by 341)
2013-14:1802 cr ( up by 197)
2014-15:2084 cr.(up by 282)
2015-16:2396 cr ( up by 312 )
2016-17:2852 cr ( up by 456)
2017-18:3263 cr ( up by 411)
2018-19:3464 cr ( up by 282)———————Abs.Growth of 2970
2019-20:3270 cr ( YoY de-growth of 194)*
————- ——————-
Over a 8 year merger period (FY 12-FY 19):
Abs.Growth of B/S is ₹2970 cr. ( fm 1264 to 3464)
Average growth of B/S per year : ₹371 cr
YoY (FY’20- FY’19) the de-growth of B/S is : (minus) ₹194 cr

Written off legacy impairment amt fm FY 20 audited B/S: ₹868 cr
How? May have used First In Last Out method to drop impairments across overseas subs from FY 20 B/S. Components could be Definitive 194 cr de- growth of FY 20 ; 194+₹ 371cr ( eight year average of upside)+ an entry of ₹303 cr. drawn from one year of ave, all totalling to ₹868 cr. It reads like,194+371+303. NOTIONALLY equivalent to just under 2 years of average growth of B/S size plus de-growth reported in FY 20 audited financials. The brighter side of this tragedy is, we have to take the current b/ s size is CLEAN and can stand any Due Diligence from here on.Timing wise, it’s perfect , since the very size of b/s can afford such a bulky cut. Even the resultant post the impairment B/S size is sitting pretty at ₹3270 cr.

Why now and How does this help?

The need may have been driven by the top 10 auditor demanding a clean enough b/s , a must for LoC sanction. The prudent part is it’s timed when it is carved out of the B/S when the size of impairment could be accommodated by a much bigger grown up b/s.

Why worry ?
It’s a balance sheet level impairment effecting BOOK VALUE. The adjusted BV is still very healthy and way above the current mkt price. It is announced at a time LoC sanction is on the horizon.
No hit to PL on this count. Reported PAT and EPS stands relevant.

Why LoC sanction is key?

On top of flattening ( no commensurate lift up in) TRs in the recent years and the top line of Digital Business is exhibiting a healthy growth, LoC dollars gushing in ,whenever, will have a significant and positive impact on growth in topline and PAT. If this is how the script plays out, the phenomenon of doubling every 5 years of EPS in the coming two FYs period is to be expected
A healthier free cash flows are to be expected in support of better dividend announcements and re-rating of the share price.

Note: The above notion is backed by factual verifiable data and some interpretation of the data. Please check if this notion is erraneous( chk data and the math pl) and raise a red flag, so I correct and you don’t get impacted by any negative outcomes.

[odysee]

Admin@7471. I am not too clear on the current total balance sheet size stated to be at Rs 3270 crore above. The 31.3.2020 reserves and surplus are at Rs 2731 Crore and total shareholders funds at Rs 2827 crore after impairments.
The analysis by ‘aindia’ is very well done and the commentary is compelling. But not sure about the math in terms of first in last out and the average used to arrive at the 868 crore figure, although the result arrived at is spot-on.
This evening’s conference call may well endorse the principle employed for the impairments as enumerated by aindia.
A very good and reassuring post nonetheless. My compliments.

[headstead]

Thank you Admin, for having me in this forum. It’s me “Headstead” wishing you all a bright future in BCG.

[allenasrini]

Welcome Headstead.

[admin]

Welcome @headstead, your esteemed presence will add value to the forum and give immense confidence to every investors.

[Investor_2022]

@headstead, very warm welcome!
Please keep inspiring us with your view on the latest developments being made in the company.
Hope to meet you in today’s conference call too.

[Author]

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