This looks like a sales meet targeted for the European audiance, and not a global summit. I dont think they expect anyone from India to fly down for an 8hr open sales pitch.
@phreakv6 yes the solutions are commoditised for Hippa and PCI. Many companies have proprietary SaaS solutions, but the complexity is in data migration from legacy systems to cloud SaaS, the associated change management and operations support. Hospital CIOs dont look at economy commoditised products that one installs like msoffice; they look at migration partners and products that fit in their long term IT Strategy. Point being any Tom dick and Harry cannot implement a hippa compliance solution.
Also the fact that recurring revenues of 8k miles are steadily growing indicates that they are increasingly finding a permenant seat at the CIOs table.
I observe there are some red flags related to the activities done by the promoter group. Though they are transparent to list some of those things in AR (because of Deloitte), i dont think it is best of the governance practice. As some boarders have suggested, we raise those points in the AGM and these red flags needs to be corrected. I dont think this management will try to screw up the company and run away after building a successful cloud business. I am from software background and work on some of the areas similar to 8k. I had started investing on the company some years back after detailed research about them and i am buying at dips. Some of my detailed analysis about 8K are
8K miles has won following competencies from Amazon Web Sevices:
Cloud Managed Services Competency - This is a 1-2 days rigourous 3rd party audit conducted by Cloud Audit company suggested by AWS. 8Kmiles has this competency maintained for last 3 years.
You need to show 10+ customers, 30+ Certified AWS PROFESSSIONAL LEVEL Architects, ITIL certifications, customer projects documents (under tri party NDA), employee count, etc. There are more than 100+ controls that will be verified by the auditor in those 1-2 days. You also need to have implemented advanced architecture, machine learning, deep cloud security practices, Advanced DevOps practices to clear this audit. Since AWS is customer obsessed company they ask for Customer satisfaction proofs and records as well. You can find the audit objectives on AWS site.
In addition 8K miles has DevOps Competency, Security Competency, Big Data Competency, Healthcare and Life sciences competency. These competencies are audited 1 day by 3rd party + AWS team audit. You need to have demonstrated and implemented the competency for 5+ customers to even qualify.
Amazon Cloud has 40K partners world wide and there are only 15-20 companies worldwide which has all these competencies and 8K miles is one of them. One can verify the above information on searching in AWS website and presentations and joint PR releases.
8K miles is a microsoft azure gold partner. They have successfully retained this partnership last 2 years. Based on my interactions with some of 8K azure folks they have lupin, lifecell etc in the healthcare field as their customers. They have Microsoft Azure MVP (only 250+ talent globally available) in their payroll who constantly conduct meetups and webinars in chennai and bangalore.
I have attended their cloud transformation webinars and cloud meetups in their chennai office and online. I have also interacted with some of their architecture team members during these meetups and found they are doing cloud transformation projects with customers like Novartis, Roche, GE, Trimble, Panasonic etc. I found this as the best way to gather deep insights of what they do directly from the people who do. They are doing work on cloud transformation, Cloud Managed Services, Big Data, Cloudez plaftform, devops and machine learning to these companies. From my understanding, They are not a pure play product company, i would say they are a cloud solutions company. They use a combination of their platforms, 8K SaaS solutions, Patents, in house built accelerators, automation, consulting and managed services skills together and deliver a project or service.
There are engineering teams which develops in-house platforms and accelerators in 8K chennai and USA office. There is big solutions implementation and consulting team which sits in USA, Europe and India offices and at customer locations. This implementation team consults, customizes and implements the platforms and accelerators for the enterprise customers. They also hire H1B candidates who form a part of the solution implementation team and sit on customer locations in USA. Since most of their customers are in regulated industry and there are strict concerns regarding Cloud security and data privacy, it makes sense that lot of their employees are in USA in customer locations. This is very common practice and strategy which large software companies adopt to deliver solutions to their regulated enterprise customers. usually enterprise customers also prefer such agreements with vendors of the size like 8K miles. If you are from software industry you will understand this clearly.
In order to grow and compete against top IT vendors, just cloud, big data tech etc alone is not enough. From some of the earlier 8K CEO youtube videos i understood they are trying to tap into specific industry domains like pharma, lifesciences and and healthcare. They are providing cloud/identity/security solutions in pharma , lifsciences and healthcare cutting across compliance, Gxp,HIPAA, governance automation etc. They are customizing their cloud ez platform for this i guess. Their acquisitions also falls in line according to the strategy their CEO has spoken multiple times earlier. Fugen on Identity and security. SERJ and cornerstone are in healthcare. Nexage and mindprint are in lifesciences. Cintel is one acquisitions which looks like a professional services company to me. They would have probably done this to augment other skills which usually enterprises start asking once you become their vendor.
Fugen holds patents and platforms on identity and security space. From the webinars , pr releases and interactions with 8k members during meetups i find they are implementing/using their patented product and solutions for companies like CA, Oracle and Amazon itself. I also found they are doing projects for google in the areas of NLP and machine learning. This is a very good validation because it takes a level of skill to deliver work on identity , machine learning etc to these global companies.
One can easily find 8K miles has tremendous respect with cloud providers community for the execution capability. You can check this by talking to AWS or Microsoft cloud teams directly in india and USA.
As mentioned earlier , iam invested in 8K miles.
Much needed insights, most important is, now forum has someone with some work/interaction experience with the company.
@ragha1982s thanks for the write-up.
Most important points from @ragha1982s write-up, as I picked them
Amazon Cloud has 40K partners world wide and there are only 15-20 companies worldwide which has all these competencies and 8K miles is one of them.
They have Microsoft Azure MVP (only 250+ talent globally available) in their payroll who constantly conduct meetups and webinars in Chennai and Bangalore.
They are doing work on cloud transformation, Cloud Managed Services, Big Data, Cloudez plaftform, devops and machine learning to these companies.
Could someone who is attending the AGM raise the issue of activity of the CFO from May 2017 till date that leads to negative sentiment about the company? The fall of the price of this business due to his activity or related to financial activity. Kindly request them to correct such activity for the sake of investors and to grow the faith in such good business.
I’m attending the AGM on 29th. If anyone else is attending, can you PM me so that we can coordinate.
Also, if anyone has questions that need to be raised at the AGM, please post here. I’ll try to ask.
Q’s for AGM:
Why such bizarre related party transactions: loaning money to media group and borrowing money from CFO?
When are you expanding the scope of work of Deloitte to include all subsidiaries?
When will the company start generating free cash flows?
Why 106 crore loan is given to 8K Miles Media & when is the company getting this loan back?
I believe it’s on the MCA website. Probably legit.
Its about 8K MEDIA. Doesn’t concern 8K MILES !
8K Miles has given an unsecured loan of 100+ crores over the years to 8K Miles Media in a related party transaction. Suresh Venkatachari heads both firm’s!
At least check the address (teynampate ) buddy. Pm strips to 8k miles (all intangibles out of air) to 8k media (RPT) . Life goes full circle.
Isnt the CFO or a similar level person the only authorised person to transfer company money anywhere. What authority does the audit company partner hold to authorise a transfer… Can someone explain please.
maybe there is something im missing, but I dont think company money can be transfered by the audit firm partner, using audit company letterhead, forged or otherwise. It has to be a company authorised person typically the level of a cfo for this type of amount transfer.
Also CHG have resigned in August 2017 itself however the screenshot shows date of April 2018
Can you please share if you have any link on MCA website.
as per my knowledge, every outward remittance by a company should be accompanied by a valid 15 CA / CB certificate provided by an auditor. Auditor ratifies details of remittance. Without this banks won’t process outward remittances. If the allegation is that these forms/ CA ratification are forged, then there is a bigger issue lurking here!
disc- no investments in 8k
From RBI website:
What is Automatic Route and Approval Route for ODI?
Ans Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for making overseas direct investments in a JV/WOS abroad. The Indian Party should approach an Authorized Dealer Category – I bank with an application in Form ODI and the prescribed enclosures / documents for effecting the remittances towards such investments. However, in case of investment in the financial services sector, prior approval is required from the regulatory authority concerned, both in India and abroad.
Form ODI is available as an Annex to the Master Direction titled ‘Master Direction on Reporting under Foreign Exchange Management Act’.
Proposals not covered by the conditions under the automatic route require prior approval of the Reserve Bank for which a specific application in Form ODI with the documents prescribed therein is required to be made through the Authorized Dealer Category – I banks
How to forward the proposal for making Overseas Direct Investment (ODI) under approval route?
Ans. The applicant should approach their designated Authorized Dealer (AD) with the proposal which shall be submitted to Reserve Bank after due scrutiny and with the specific recommendations of the designated AD bank along with supporting documents (as mentioned below) to the following address:
The Chief General Manager,
Reserve Bank of India,
Foreign Exchange Department,
Overseas Investment Division,
Amar Building, 5th Floor,
Sir P. M. Road, Fort,
The designated AD before forwarding the proposal should submit the Form ODI in the on-line OID application under approval route and the transaction number generated by the application should be mentioned in the letter.
In case the proposal is approved, the AD bank should effect the remittance under advice to Reserve Bank so that the UIN is allotted.
For approval by Reserve Bank, following documents need to be submitted along with Section D and Section E of Form ODI - Part I by the designated Authorized Dealer:
a) A letter from the designated AD of the IP in a sealed cover mentioning the following details:
• Transaction number generated by the OID application.
• Brief details of the Indian entity.
• Brief details of the overseas entity.
• Background of the proposal, if any.
• Brief details of the transaction.
• Reason/s for seeking approval mentioning the extant FEMA provisions.
• Observations of the designated AD bank with respect to the following:
• Prima facie viability of the JV/ WOS outside India;
• Contribution to external trade and other benefits which will accrue to India through such investment;
• Financial position and business track record of the IP and the foreign entity;
• Expertise and experience of the IP in the same or related line of activity of the JV/ WOS outside India.
• Recommendations of the designated AD bank.
b) A letter from the IP addressed to the designated AD bank.
c) Board resolution for the proposed transaction/s.
d) Diagrammatic representation of the organisational structure indicating all the subsidiaries of the IP horizontally and vertically with their stake (direct & indirect) and status (whether operating company or SPV).
e) Incorporation certificate and the valuation certificate for the overseas entity (if applicable).
f) Other relevant documents properly numbered, indexed and flagged.
I think Authorized dealer here is bank and all documents submitted to bank needed to be signed by Auditors in both routes. There they committed fraud.
I was quite bullish on this stock, but now it seems it’s promoters are a bunch of fraudsters. Both 8k miles media and 8k miles software have same promoters and 8kmiles have lent 100 Cr to 8k miles media. They failed to send notice to exchanges as well as mentioned by Deloitte in AR. Lets see if they answer all these questions in AGM
My quick analysis on the 8K miles hot news that is spreading in social media
8K Miles media private limited is not a Subsidiary of 8KMiles Software Services limited. Please refer Page 35 of Annual report for the list of subsidiaries:
- 8K Miles Software Services Inc. USA
(i) Nexage Technologies USA Inc
(ii) Cornerstone Advisors Inc. USA
- 8K Miles Software Services FZE. UAE
- 8K Miles Health Cloud Inc. USA
(i) Serj Solutions Inc. USA
- Mentor Minds Solutions and Services Inc. USA
- Mentor Minds Solutions and Services § Ltd. India
(Till 28th February 2018)
8K miles Software Services Limited has appointed Deloitte has the auditors for the financial period 1st april 2017 to 31 st march 2022. Refer Ref: 8K/CHN/2017-18/E010 circular in BSE. So GHG associates letter circulated in the social media is not related 8K miles Software Services Limited clearly. So the tweet mentioned by a Prominent fund manager amit m quoting 8K Miles media as subsidiary of 8K Miles shows he is not fully aware of the news.
8K Miles software services Ltd has given a loan/advances to 8K Miles media pvt limited as part of Related Parties Disclosure. This is not news and already available, discussed in public. 8K Miles media is paying close to ~7 crores interest for this loan to 8K Miles software services. This is captured in the Annual report. Many boarders have this question when is the loan going to be recovered ? This is a question to be asked in AGM.
8K Miles software services Ltd reverse mergered with P.M Strips ( listed company in BSE). Basically new promoters suresh/ramani bought the old promoters listed share and renamed it has 8K Miles. This is a public information and also mentioned in forbes article on why this listing method was adopted ? and ceo kind of repented he will not follow this method again because of the complex inticacies involed. So no way the old promoters fraudulent ban by Sebi on 2013/14 was related the new promoters. It is also publically available and not right to connect this with the episode.
All above are captured on paper. But the name and reputation of 8K miles as a brand has already taken heavy hitting beacuse of common name confusion between two entities. I see prominent names in social media are already tweeting and unawarely spreading false news “8K miles auditors forged”, “it is 8K miles subsidiary forged, reason for Auditor resignation etc”. I seriously feel bad why people are biased towards hating some shares, is it beacuse they did not make profit from it. Atleast they have to be informed, check letter dates, subisdiaries, read AR, analyse the company before spreading bad reputation. I already see in twitter some people are commenting certain PR firms are behind malicious campaign against 8kmiles. It is affecting retail investors like us who had already invested and believing this company can turn around. It is a company and 600+ people are employed globally. They should have some responsibility before throwing muck. Please remember the satyam episode a minute and how many employees had to suffer during the period with the investors. I feel personally very bad for them and have lost respect for some prominent people in this episode.
8K Miles software services and 8K miles media have two common promoters- Suresh and ramani, As disclosed in the Annual report. Now some unanswered questions on this episode ?
Why there is no formal complaint or legal procedure taken by GHG associates after 30th april 2018 on 8K miles media ? I am not able to find anything related to this on google.
Is the ODI amount of 46 crores is already settled to Indian bank by the promoters on behalf of 8K miles media ? is that why banks has not raised any issues on default ?
Is the Auditor blaming or revenge act beacuse they had been replaced by Deloitte ? sounds very dramatic. But forging is still sensitive and ethical matter to be addressed.
Though it is a completely different entities and not related, still the promoters have to commmunicate at earliest because they are common and it has affected the whole brand. It is spreading unnecessary confusion in already beaten stock.
I suggest the boarders to add questions related to this episode as well in the AGM.
It is not a subsidiary of 8K miles. It is a company which shares the same key managerial personnel and they have inter-company transactions … but it’s not a subsidiary of 8K miles… read the annual report … it’s written in simple English and won’t be very difficult for you to understand… I guess we both now know who is educated and who is not !
List of Subsidiaries in the below screenshot
Company has already mentioned in the annual report for 2018 about the loans provided to 8k miles media and they have also paid back an interest
The letter from GHG associates mentions date as 30th April 2018 where Deloitte was appointed as auditor much before .Screenshot from june 2017 quarterly result
The" inability due to other professional commitments" in the screenshot feels gawky, there might be some bad blood between promoters and auditors. Hence may be the appointment of Deloitte
In overall ,my view on the company remains the same.A very good software company , focussed on growth ,which seems to forget about the retail shareholders(company does not give out dividends and does not bother to give out proper clarifications ) and has not maintained proper accounting standards in the past.Hence the appointment of Deloitte was a important milestone in my opinion
The same has been discussed multiple times in this forum and I have learnt a lot from this company
Disc :Invested 10 percent of my portfolio in the range of 590 . In hindsight I would have liked to stay away from the company, but I was a very newbie investor when I bought this script. My bad ,I just observed various numbers and ratios and did not analyze the details .The market is right in punishing me I believe
Holding it ,because the auditors are Deloitte and since it is highly ranked by Amazon and Microsoft for its cloud services