[odysee]

Very interesting article in today’s Business Standard on Google and Facebook battling for dominance in the Indian market.
The scope for digital marketing appears immense going by the comments contained in that article . I quote— “According to Dentsu Aegis Network, digital advertising will hit ₹28,000 crore in 2024 ,compared to ₹13,600 crore in 2019”.

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@Logicalspeak #7675, thank you, I gathered the essence of the current position as indicated by you. My concern was the likely time frame involved in closing this matter once and for all, getting the pledged shared (if any) released, and then for BCG to focus on the truly important business related matters once these legacy issues were dealt with. Best.

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@Logicalspeak, thank you for your interpretation of the situation. The question remains as to when the DRT case gets resolved ? Will there be a hearing? If the case was filed in 2017, can the respondent ( BCG) now approach the DRT to close the matter at the earliest possible as funds are readily available to pay the balance amount with interest if need be? How long can this be situation carry on if Axis is being obstinate?

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@sateanna, it is a matter of great disappointment that the Axis Bank matter was allowed to fester for so long despite the OTS agreement. The last conference call held out hopes of the the matter being settled expeditiously as it had been dragged along for long enough. Instead, the NCLT has now frozen the preferential issue monies. This suggests a favourable inclination by the Tribunal in favour of the bank. I hope we get some other positive news from SKR very soon to counter the onset of the very negative sentiments which are again in play. Tiresome and exhausting, as the naysayers gain a strong foothold over us, the faithful believers.

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@dileepvn, how many fingers shall I cross? Possibly all! It would be terrific if some form of business partnership were to develop between BCG and Google. Some form of client/competitor status already exists but a newer development at a different level would be truly exciting.

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@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.

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@pranil, your response at #7620. Objectively looking at the exchange of views between Saul and you ,and comments by Admin, it would be a shame for you to withdraw from this forum. It has been extremely rewarding for us all when Saul came onto this forum ( thanks to Admin) and gave such an excellent presentation on varying matters pertaining to BCG, that we are all now so much better informed.
Many others have, thereafter , commented and responded to the opinions and views expressed on this forum, and there are bound to be some minor differences on the reading and interpretation of some of the available financial and operational data. But that makes for a keener application of mind by all on this forum.
Admin, kindly excuse my transgression in your space so to speak , with my comments above.

[odysee]

I should add that a lot of those troubling questions have generally been answered whenever raised. But maybe a few more questions on the investments, returns, impairments and how the LOC could truly generate the much desired growth (even though principally this has been clarified by Mr Reddy and Saul has commented on it).

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@pranil. Have read with great interest your detailed observations and analysis on the matter of funds deployment and business investments by BCG, and the somewhat disappointing outcome thereof. It is also interesting to observe that you still appear to have faith and belief in the investment made by you, and that the objectives of such an undertaking would be met at some stage, even though none of the three outlined by you have been met thus far. I trust our collective ‘keep the faith’ philosophy doesn’t backfire on us all, after all these years of waiting patiently and believing in the business and the management , and our always being able to justify the abysmally low Market price and valuation given to the company by the investing community. I have been a staunch believer and supporter of Mr Reddy and BCG for many years now, but from time to time troubling questions come to mind.

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Thank you for your considered reasoning on this particular issue. And look at the paradox (or even the the absurdity)-no mutual fund or institutional investor would ‘normally‘ look at investing in a company with a low market capitalisation of 450 crore odd. Yet the same lot would view the same company positively and maybe scramble to invest if the market cap were to be around 2000 crore with no material change in the numbers. How does one find a solution to that mode of thinking and break that mould? I’m sure there must be exceptions to that general rule. But who will have the ‘smarts’ to catapult BCG into that sphere of visibility? Some serious and savvy guidance needed by the management.

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So in essence, Saul, weak hands must give way to stronger and more informed and fundamental investors with a capacity to hold on for the longer term for the volatility to reduce. In the bargain, the market price would reflect a more realistic P.E. multiple as opposed to the current 0.9 or so. Bizarre isn’t it, the company earns over Rs 9 per share (annually) and the market price is below that!!

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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.

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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.

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

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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.

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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.

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

[odysee]

An additional point to be considered is the audit of the Israeli subsidiary, Online Media Solutions, by E&Y. Was that only a one time enterprise in the past or are E&Y statutory auditors of that subsidiary and the results ( almost 38% of the consolidated) we see annually are audited figures.

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Mr Goodman, with reference to your query at #7402, it shouldn’t really matter as to what the audit fees are. In the larger scheme of things, the benefits would far outweigh the professional fees involved. Large audit firms are usually happy to assess and quote-on a competitive basis ( vis a vis other top firms).
If BCG wants to achieve public and international credibility and recognition, then this is the only way to go.

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I understand that there was an NCLT case coming up for hearing today- Axis Bank had filed for a winding-up petition against BCG for being a defaulter and further for not honouring the One Time Settlement reached last year. This is known to be pretty routine in such situations but avoidable nonetheless as fresh settlements are negotiated. Would anyone on this forum have an update on this? Thanks

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