8k Miles Software Ltd, Cloud Computing

(PavanM) #858

All of this is in hindsight:

Almost all the stats turn out to be excellent; hardly anything stands out as troubling.

Fig 1 - Source Screener.in - Errors, if any, are mine.

In Fig 2 - the RoIC is excellent. However the last 3 graphs show signs of caution/danger.
Declining FCF but a strong CFO. Amber flag.
Rising Sales, Rising Debt, Rising Receivables. Red Flag.
Extremely diverging RoIC vs CRoIC. Red Flag.

Read a quote today - ‘Top-line is vanity, Bottom-line is sanity, Cash in Bank is reality’

(Silmaril) #859

I checked the MCA website for prosecution for the following companies and couldnt find anything. Im also trying to find out if sfio is investigating…

(RJ) #860

If the auditor really did its job properly on this fraud, it must have provided a report to MCA irrespective of the board reply:

  • In case the auditor fails to get any reply or observations from the Board or the Audit Committee within the stipulated period of 45 days, he shall forward his report to the Central Government along with a note containing the details of his report that was earlier forwarded to the Board or the Audit Committee for which he has not received any reply or observations within the stipulated time.
  • The report shall be on the letter-head of the auditor containing his postal address, e-mail address and contact telephone or mobile number and be signed by the auditor with his seal and shall indicate his Membership Number and be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post with Acknowledgement Due or by Speed post followed by an e-mail in confirmation of the same.
  • The report shall be in the form of a statement as specified in Form ADT-4.
    Source: https://taxguru.in/company-law/reporting-fraud-auditors-companies-act-2013.html

Other minor observations:
The auditor resignation letter to 8k was dated 30 April. But was reported to MCA on 4th May. It should have been done within 2 days.
I checked the IndiaPost tracking for the registered post, it shows the status as “item booked” but it should have been “Delivered”.

(Deven Kulkarni) #861

People attending the AGM should ask the management regarding action taken by the MCA/SFIO, if any.
But it’s unlikely that the management will reply as they have already distanced themselves from 8K Miles Media.

I also checked on www.watchoutinvestors.com but could not find anything related to 8K Miles Media.

(Silmaril) #862

There is no ADT-4 on the MCA website, unless Ive skipped a document. I think someone this board had downloaded all documents. Can you please check if you can find the ADT-4?

(jayantmum) #863

Uday, if you have paid to download these forms from MCA website, then it is for your use and not for public sharing. This is a private company and MCA gets paid for such services.

(Madhab) #865

How you created this charts ? This is wonderfully represented. Is there any template present ? Could you please share with us ?

(udayp) #866

I’m not aware of any restrictions on redistribution of the downloaded documents.

Is anyone else attending the AGM. Please PM me if you want to coordinate before the meeting begins.

(PavanM) #867

Below is the excel template. It had already been shared - unfortunately I am not able to edit the old link to update the excel.

Thanks to:
Screener.in for the raw data
@suru27: for original excel template.
@Yogesh_s: for the idea on presentation layout.

T - 8K Miles consolidated.xlsx (545.1 KB)

5 mins is all thats needed to analyze a business!
(Krishnaraj) #869

Absolutely! Observe a phenomenon, develop a theory, and apply it to predict such future phenomena as they develop. And improve.

If you are presuming that an alleged or actual wrong doing will be caught by authorities, please change that presumption.

Auditor may have complained, but it is really in no one’s interest to take action. Enforcement authorities in India act almost only on approval from higher ups (or incentives to themselves, which can be easily managed), higher ups usually will act if there is lot of noise, or serious systemic risk, or on political orders. Resources are very thin and expertise poor.

A case in point is Satyam, where even after a full blown confession, it took years for authorities to act, and the only shareholders compensated were the ADR holders, under SEC! Sad but true. I followed closely the Geodesic case of a $ 125 million default on FCCB and some bank loans. (BTW, they also had amazing talent and were paying salaries on time). It took 5-6 cases, with date after date, filed by Citibank, the FCCB Trustee, HDFC Bank, some guy from Nashik, some civil, some criminal, to ultimately lead after 5 years to arrest. The company was ordered by the Bombay HC to be liquidated, but what would come of it? Nothing.

In this case, the Promoters will say 8K Miles Software Services shareholders have nothing to do with 8K Miles Media, so these questions are not relevant and won’t be taken at the AGM.

It will take an iron will and a relentless pursuit to even ‘prove’ wrongdoing, even when everyone knows who did it. And if there are distributed shareholders each with a loss that is bearable in face of contemplating a legal course, the wrong doers will get away. Think about NSEL, they are still fighting, and those guys are real fighters. The entire process of seeking justice in India is a travesty and a tragedy. And the counterparties know it :wink:

(Harsh Vijh) #870


One more qs for AGM:
100+ Cr loaned to 8K Miles Media should be reversed immediately to restore trust. What are the mgmt views on this?

(Silmaril) #871

Page 181 of AR says
Advances outstanding at the end of the year
8k miles media private Ltd. - 0 cr
8k miles media group - 58. 0844 cr
8k miles media group - 07. 3177 cr (interest)

I agree they should not loan the media group anymore to gain back trust.

(Funda_Buffett) #872

Mr Ramani resigns as CFO from 8K Miles !

(Silmaril) #873

looks like they are making a genuine attempt to change things… Im eager to see how the AGM goes tomorrow. Can one of you attending the meeting make an audio recording of the proceedings if possible.

(phreak) #874

This looks to have been done in a hurried fashion so that Ramani doesn’t attend the AGM and any and all questions pertaining to 8k Miles Media and Ramani can be brushed off. Astute move. Well played, I guess.

(Cshar) #876

Too much negativity is not good, suresh is holding 57% stake which is silver lining. Nobody comes in media again and again seeing his wealrh going down if fraud has taken place. What he is going to gain by this fraud. Indian stock.markets have been become like casino. Fundametals have taken a backfoot.

(Nasirul Amin) #877

He holds 83.60% in 8K Miles Media Pvt. Ltd. He just resigns a day before the AGM to wash off responsibility. Also, fraud that came to fore was committed by 8K Miles Media Pvt Ltd, where he is majority shareholder and Suresh was also CEO. The template of fraud is so old. Needs some modification.

(Susindar) #879

There are red flags. Then there are RED FLAGS! I do not understand how some of the investors still keep believing that 8k is off to some good. Pls look at the history of how many such companies existed before and where they are now (HOV, Helios, Aftek, I can literally name dozens). There is always some reason, but the end result is the same that investors loose everything. This time it may be different, but the probability of that happening at this moment I think is very minuscule. And when everything is lost, you have only yourself to blame as sufficient warnings have been posted here for a long time!

(bharat19) #880

The company usually talks about acquiring other companies at good valuations (Inorganic Growth). Is it like that they feel their own company current value is justified. Why not go for buyback their own company shares.

One should not make any personal comments over this Forum. I hope admin will look at it.

They have already gained 120 Cr from selling some stakes at high valuations.

Suppose you build a IT/ Tech company with 10 Cr initial capital (100% Ownership). The best thing is you do not need to show much Fixed assets. You start making up the numbers in profit and Loss statements while your Free Cash flows are negative. You acquire a lot of unknown companies abroad whose books of accounts are not Audited by a single firm. You start showing unbelievable numbers and sales figures from these subsidiaries located abroad. Though your principal company which undergoes Audit does not earn much.
Investors attract towards your too good to see numbers. Now you think to dilute some stakes. Market looking at your great sets of numbers value your company at 100 Cr. You offer around 25% Shares in IPO. By this you yourself raises around 25 Cr. Now you keep on showing great numbers and your market cap reaches around 500 Cr. You sell 5% of your Shares in Open Market at that Valuations. You make around another 25 Cr in quick time. You do not pay dividends and say that the company needs funds for acquiring many other companies. You have made total 50 Cr and still hold 70% ownership. Now suppose your market cap goes for a toss and reaches 200 Cr , you do not worry as you know what is your actual net worth is. You still can make 140 Cr more from selling all stakes but that will be tough as MCap can reach very low levels. so you wait for next bull run. Many share holders will sell in losses and many new joins your company. Your shares remain out of demand for some time and then people forget everything in next bull market.

The best thing every investor of 8K Miles should do is :slight_smile:

  1. To ask the management to provide a detailed Audit of all the subsidiaries by a Single Firm for say Deloitte.
  2. To ask them to buyback the shares at good valuations may be around Rs 500 per share.
  3. To delay any further acquisitions and uplift their Parent company

Source: 8K Miles March 2018 Consolidated Results

They recently acquired Cornerstone Advisors ! Was looking for this company on google. Found three companies with almost same name.

The third one is the website on acquired company which is a private LLC. Looks like Cornerstone Advisor is a very common name to build a company!

(Altruist) #881

Not sure if resignation is a solution or even appropriate.

It is rather unfair to assume malicious intent on the part of forum members - most want clarity around the intrinsic value, the actual business model and nos. / cash flow. If there is wrongdoing, it needs to certainly be pointed out and addressed one way or the other, so investors / good businesses can be protected & benefit over the long term.