[myainvest]

I guess given the time constraint, no one in concall asked the question about taxes pending that was called out in annual report. It may be a minor thing and could have been paid already. However, clarifying these small things to exchanges/shareholders will have good impact on market sentiments

[odysee]

Saul, I think the question regarding the unpaid taxes and delayed payment of statutory dues fell in between two stools ( so to speak), as the assumption was that Mr Reddy would address the issues and queries sent to the company prior to the con call. A lot of time was spent on the 2nd caller’s reference to ‘rumours’ , and then the remaining time was too short as others had to scramble. Maybe one can email Mr Reddy on this matter.

[VALUEBUYER001]

Thanks goodman sir ji for your detailed information

[sandyc316]

I hope the issue with tax is the old legacy issue and not a new one (Company has had some ongoing issues with Service Tax and Income Tax dept after the merger). Just to point out:

From the last 4 years ARs (2016 – 2019):
“Financial Risks: Tax Issues: the Company has had a few income tax and service tax cases against it, which, if lost, may impact future cash flows. However, none of these is material. “

From 2018 full year financial report as mentioned by P C N & ASSOCIATES:
“The Company has outstanding undisputed statutory liabilities towards
income tax to the extent an amount of Rs. 6,72,07,539/ -“

Compared with 2019 full year financial report as mentioned by P C N & ASSOCIATES:
“With respect to Income Tax, TDS the company is not regular in depositing with appropriate authorities.”

Hope this is just a rephrasing of last year’s statement by the auditor.

[Myshport]

I have sent an email ti Investor Relations giving my suggestion on how to settle the DAUM issue without any serious concerns of fraud. The email is given below.

Ramesh Sharma <rnsgss@gmail.com>
10:39 AM (2 minutes ago)
to ir

For kind attention of Mr SK Reddy,
Founder, Chairman, CEO and MD
Brightcom Group

Dear Mr Reddy,

I am a small time investor in your company and I am writing to you with regards to your concern regarding the DAUM settlement.

I have, recently gone through the Edited Transcript of LYCOS.NSE earnings conference call or presentation 2-Jul-20 11:30am GMT
Thomson Reuters StreetEvents Thomson Reuters StreetEventsJuly 3, 2020

Your concern, regarding the settlement, as stated by you, is as given below.

Quote.

Then coming to Lycos and Daum settlement. We were — in January, we had a settlement agreement ready to sign. We were to pay the first payment in January. And there was a challenge in terms of giving — handing off a cashier check and taking a signed agreement. And that’s where it stopped. Unfortunately, due to all the things, we couldn’t go to Korea, they couldn’t come to India, all these things kind of in a standstill state. And so that is where it is. We are trying to revise that now. But it’s probably best to go 1 shot and close it instead of having this 2-phase process. Once this funds are available, debt to go across and I can close it. So we are in that discussion right now. And I feel very strongly this is a done deal, there’s nothing to be concerned about. And we will immediately let you know as soon as we have a solution there.

Unquote

My recommendation, to address your concern of “… there was a challenge in terms of giving — handing off a cashier check and taking a signed agreement” is as follows.

A foolproof method to ensure that the transaction goes through, without any hitch, is to route it through an Escrow Agent. This is the route followed for all, high value, aircraft sales and purchases. I am sure someone in your setup will be aware of this and can advise you accordingly.

Please do consider this option.

As I see it, the market perception of the company appears to be based on this one issue ie DAUM settlement. I am very sure that once this problem is taken care of, the market perception will also change.

Regards,

Ramesh Sharma

[odysee]

@myshport, the practice of using an Escrow account is pretty much standard in business dealings where parties want to safeguard their interests. I’m pretty sure Mr Reddy is fully aware of it.
There have to some other reasons for BCG not to have pursued this option, in my opinion.

[Myshport]

@odysee I am not too sure about Mr Reddy knowing about this procedure. This is based on his statement “…And there was a challenge in terms of giving — handing off a cashier check and taking a signed agreement”.

If an Escrow Agent is used then there is no question of any “challenge”.

Anyway, it is up to Mr Reddy to decide on his best option.

[lycos.rags.to.riches]

Market is yet to react positive on the positive results. My three simple question in the conf call would be on

Daum Settlement Status
Subsidary Consolidation Status
LOC Status.

[Rathi_b]

lycos.rags I think this time we should ask the company to educate investors with more information and notifications to the stock exchange to explain about the operating model and nature of their ad business. Important would also be to ask about if there is any delay of delivery of receivables during the pandemic period and it’s influence on the cash flow in the company.

[admin]

Please post all yours questions for the conference call in this thread. We can send it tomorrow EOD.

[Rathi_b]

I am not much informed about the stock trade I’ll admit to my short coming. But can someone please enlighten me about it whether this share can be made a liquid stock or from illiquid position it is in now.

[myainvest]

More than the current status of Daum, Axis, Loc – question should be that we as investors have been hearing these updates on multiple con calls that we are very close in finalising/closing them. Why these issues are still being dragged? Are there any real issues in solving them that the investor community is not aware of ?

[tanv151]

@myainvest I am with you. These issues are being dragged forever. The only real issue which everyone is aware of is ‘lack of intent’ from SKR / management team. Daum issue was not even mentioned as part of the business update, clearly poor communication strategy which needs to be corrected asap.

[Logan]

@rathi_b, I don’t know much about that either but I can share my opinions on what the company can do to arrest the fall in prices.

I’ve never seen a company’s stock struggling to perform well even after posting great results (that too during COVID-19 times). In fact whenever there’s a positive event the stock actually falls more than it rises. This shows how much manipulation is going on with the prices.

There’s manipulation because the market doesn’t trust what the company’s management says and also there is more supply than demand.

Since many investors don’t trust the company they won’t keep their shares for longer period and they’ll sell whenever there are positive developments so when new investors buy the shares looking at positive developments, old investors sell at the same time and this causes volatility in prices which the operators take advantage of (old investors aren’t long term investors).

To stop all these the management has to focus on creating demand and that demand should not be artificial (there should be material developments). We can see many small cap companies post something positive and seeing those posts the prices will go up and when there’s no material development then the prices will fall again.

BCG’s management is focusing on creating the demand but they are very very slow, compared to last few years, now they are communicating well with the investors and informing us on developments happening. The good part is there aren’t many outstanding issues now, there’s only daum and Axis (all these years there was VC exits, SBI, Canara loans).

Just creating the demand won’t bring back trust in the management (people will still sell shares after positive developments) so the company has to focus on building the trust, they can do it by improving corporate governance and replying to each and every question investors ask through mails (how much ever silly they maybe).

[sateanna]

The results are very good despite the pandemic. All the jump in % of Adauth & Adzerk probably kicking in now..Q2 should be better. Lets see what SKR has to say. We are still waiting for the inflection point, now its almost a year.

[Logan]

These are my questions and suggestions.

Market Related / Corporate Governance

1. Axis, Daum.

2. Being a global company, the company lacks transparency sometimes and never replies to our mails and the only time we can communicate with the management is during the conference calls. You can’t expect us to wait for the conference calls to get clarity. There needs to be a big change in the way the company communicates with the shareholders (Also we can’t travel to Hyderabad just to get clarification on few topics).

3. We understand that the company doesn’t want to disclose sensitive information and we are always okay with it but at the same time we need an acknowledgement at least, saying that the company will update the shareholders at the appropriate time. How much ever silly the questions maybe we need the company to reply to our mails, it’s the main thing investors expect from a global company. The sad part is it’s been 8 years since the company came public but still there’s no proper communications with the shareholders.

4. The company has to appoint a board member who has enough experience in dealing with market related activities.

5. We need a breakup of many items in the balance sheet. There are many items classified as “other” and the loans and advances are very high and there’s no information about them in the footnotes (in the annual report). We need proper details about these items in the 2019-20 annual report.

6. We understand that the management doesn’t have control over the daily changes in the stock price but the company has to come up with some measures to reduce the volatility and of course stock price manipulation.

7. In Q4 results, auditor made a remark regarding irregularities in payment of statutory dues and income tax, we need an explanation on that.

8. When can we expect the promoters to buy shares from the open market? This action brings a lot of confidence to investors.

9. Provide links to the subsidiaries’ websites in BCG’s website.

10. We trust the current auditors of the parent company but to bring in more credibility and confidence it would be good to appoint any of the Big 4 to audit the parent company.

11. The company should hold a conference call to discuss business related activities as there won’t be sufficient time to discuss about business in the earnings call as more time will be spent on discussing market related activities.

[Logan]

Business Related

1. LOC and Consolidation of subsidiaries.

2. Does BCG provide DSP (Display Side Platform) and DMP (Data Management Platform) services? If yes, how big are they compared to SSP (Supply Side Platform).

3. Is Bold-Win part of BCG?

4. Has BCG entered OTT and Connected TV businesses?

5. US Presidential election’s impact on the business.

6. Did Pisipathy Prasad leave the company?

7. Market share in the industry and how well is the company prepared for the future?

8. Does BCG provide cloud computing services? If yes, how big is it? If no, are there plans to enter once all the outstanding issues are resolved?

[admin]

I would like to add one query on using blockchain.

Are we exploring the usage of blockchain solutions that provide various benefits like faster account receivable and others such as,

– blockchain based payment system to helps advertisers and publishers transfer money instantly (and according to real-time data) using smart contracts.

– As a decentralized, peer-to-peer market for programmatic advertising, it removes the middleman of the advertising world (usually an ad exchange) by using blockchain to connect between publishers and advertisers directly.

– Transparency, Limit ad fraud activities, enhance privacy, etc.

[admin]

Thank you all for sharing the questions. Will be mailing the consolidated list to IR later tonight. If you have any further questions please post in the interim.

Consolidated Questions:
1. Please update status for Axis debt closure, Daum settlement, Subsidiary consolidation and LOC.

2. Is there any delay of delivery of receivables during the pandemic period and its influence on the cash flow in the company if so.

3. We see an increase in the market share % of Adauth, please share more details about it and its significance. And also update on the B-local growing news publishers list.

4. Being a global company, the company lacks transparency sometimes and never replies to our mails and the only time we can communicate with the management is during the conference calls. You can’t expect us to wait for the conference calls to get clarity. There needs to be a big change in the way the company communicates with the shareholders (Also we can’t travel to Hyderabad just to get clarification on few topics).

5. We understand that the company doesn’t want to disclose sensitive information and we are always okay with it but at the same time we need an acknowledgement at least, saying that the company will update the shareholders at the appropriate time. How much ever silly the questions maybe we need the company to reply to our mails, it’s the main thing investors expect from a global company. The sad part is it’s been 8 years since the company came public but still there’s no proper communications with the shareholders.

6. The company has to appoint a board member who has enough experience in dealing with market related activities.

7. We need a breakup of many items in the balance sheet. There are many items classified as “other” and the loans and advances are very high and there’s no information about them in the footnotes (in the annual report). We need proper details about these items in the 2019-20 annual report.

8. We understand that the management doesn’t have control over the daily changes in the stock price but the company has to come up with some measures to reduce the volatility and of course stock price manipulation.

9. In Q4 results, auditor made a remark regarding irregularities in payment of statutory dues and income tax, we need an explanation on that.

10. When can we expect the promoters to buy shares from the open market? This action brings a lot of confidence to investors.

11. Provide links to the subsidiaries’ websites in BCG’s website.

12. We trust the current auditors of the parent company but to bring in more credibility and confidence it would be good to appoint any of the Big 4 to audit the parent company.

13. The company should hold a conference call to discuss business related activities as there won’t be sufficient time to discuss about business in the earnings call as more time will be spent on discussing market related activities.

14. Does BCG provide DSP (Display Side Platform) and DMP (Data Management Platform) services? If yes, how big are they compared to SSP (Supply Side Platform).

15. Is Bold-Win part of BCG?

16. Has BCG entered OTT and Connected TV businesses?

17. US Presidential election’s impact on the business.

18. Did Pisipathy Prasad leave the company?

19. Market share in the industry and how well is the company prepared for the future?

20. Does BCG provide cloud computing services? If yes, how big is it? If no, are there plans to enter once all the outstanding issues are resolved?

21. Are we exploring the usage of blockchain solutions that provide various benefits like faster account receivable and others such as,
– blockchain based payment system to helps advertisers and publishers transfer money instantly (and according to real-time data) using smart contracts.
– As a decentralized, peer-to-peer market for programmatic advertising, it removes the middleman of the advertising world (usually an ad exchange) by using blockchain to connect between publishers and advertisers directly.
– Transparency, Limit ad fraud activities, enhance privacy, etc.

[Rathi_b]

Thank you, admin.

[Author]

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