Arnab Goswami's Rs 200-crore Republic of Money

Brash, bigoted, fake news peddler, news messiah of right-wingers...Arnab Goswami has been called by many names by those who track him. It is often a love-him-hate-him-but still watch-him relationship for his detractors. For his ardent desh-bhakt type followers, Arnab, with his high-decibel anchoring, is the deserved sultan of real TV news irrespective of the charges that he seems partisan, jingoistic to the point of no return.

Arnab has set the TV news agenda for many years. First it was at Times Now and now at Republic TV. This blog post is not about the spectacled blabbermouth character he successfully plays on national TV, or the sun-glass wearing personality that even funny-bone Kunal Kamra couldn't get to react much during that famous on-air interview. 

This blog post is about how Arnab has so far managed the financial agenda. To find out, I went to the all-powerful MCA (Ministry Of Corporate Affairs) website and accessed financial details of his company. 

It is only fair that once in a while media - which wants 100% transparency from all -- be put under the same microscope especially, for the finances. 

Arnab Goswami is a director in 3 entities: SARG Media Holding private Limited, ARG Outlier Media Asianet News Private Limited, and SARG Global Digital Private Limited. This blog post is mostly about ARG Outlier Media company. ARG stands for Arnab Ranjan Goswami. 

ARG Outlier Media Private Limited is the old name of the company. In fact, Arnab and his spouse, Samyabrata Ray Goswami, became directors in ARG soon after Arnab quit Times Now in 2016. Later, ARG got investment from entities associated with Rajeev Chandrasekhar (a BJP Rajya Sabha MP who controls Asianet). So subsequently, ARG Outlier Media became ARG Outlier Media Asianet News Private Limited. In 2018, Rajeev stepped down from the Republic TV board. In April 2020, another name change happened and now it is back to ARG Outlier Media (back to square one!).

Who are the shareholders?

As on March 31, 2019, the list of shareholders of ARG Outlier Media had Arnab Goswami (0.03%), SARG Media Holding Private Limited (67.12% through equity and 13.65% through Series B - CCPPS), Asianet News Media & Entertainment Private Limited (16.35% through Series A - CCPPS and 0.03% through Series A equity shares), and 4 Kolkata-based entities: RPG Power Trading Company Limited (1.02% through Series C - CCPPS), Anant Udyog LLP (0.77% through Series C - CCPPS), Purvanchal Leasing Limited (0.51% through Series C - CCPPS) and Dynamic Storage and Retrieval Systems Private Limited (0.51% through Series C - CCPPS). 

The last 4 entities subscribed to over 8,300 Series C - CCPPS in FY19. CCPPS is Compulsorily Convertible Participative Preference Shares.

The above broad shareholding has undergone a change in some respects. 

In a statement in February 2020, Republic Media Network had said Goswami holds over 82% of ARG Outlier Media Private Limited, the company that owns and operates Republic TV. His company also owns 99% equity in the downstream digital entity (SARG Global Digital) that controls the digital assets of the network. 

Turns out that on the second anniversary of the channel, Goswami in May 2019 bought a chunk of shares held by Rajeev Chandrasekhar-promoted Asianet News Media & Entertainment to gain ownership. Asianet News had at the time of selling shares to Goswami signalled that Republic TV''s valuation was about Rs 1,200 crore.

We will update you when we get the March 31, 2020 shareholding data on ARG Outlier Media.

Who provides financing help to ARG Outlier Media?

Regulatory filings usually give a dated but accurate idea of bankers/financiers. MCA filings show charges created or modified for each company. I came across filings that suggested Rs 10 crore charge creation in favour of Hero Fincorp, a Rs 35 crore charge created against the security of book debts and receivables in favour of HDFC Bank etc. This could be in form fresh working capital and cash credit facility. There was also a charge created in favour of Yes Bank.

In order to obtain the licence for TV broadcasting, ARG Outlier provided a bank guarantee worth Rs 4 crore in favour of I&B Ministry. This bank guarantee will subsist during the tenure of the licence.

As on March 2019, ARG Outlier Media had Rs 43.50 crore indebtedness. There is a large amount indebtedness addition in FY19. The Hindi news channel Republic TV Bharat was launched during FY19. So, the debt could be due to the fact.

While the English news channel achieved EBITDA breakeven in its 1st year of operations, the Hindi news channel, launched in February 2019, is yet to achieve EBITDA breakeven. The company has to invest money in its digital platforms (website - www.republicworld.com, and mobile application - R.) , both of which will not immediately report profits as well. 

One must remember that since both Republic being free-to-air (FTA) channels, the revenues of the company are largely dependent on advertisements. In 2017, ahead of Republic TV launch, 8 brands (Vivo, Jio Digital Life, Renault, Hike, Ola, Star India, Yes Bank and Microsoft) reportedly had decided to associate with the then upcoming television channel. 

What kind of sales and profits/losses does ARG Outlier Media have?

Total income for FY19 for ARG Outlier Media was Rs 200 crore, up 27% from Rs 157 odd crore in FY18. According to ICRA, revenue profile of ARG is dominated by advertisement revenues, which accounted for 77% of its FY19 revenues. The loss after tax in FY19 was Rs 18.7 crore, a sharp increase from the loss of Rs 0.77 crore in FY18.

We must bear in mind that while the experienced management of ARG Outlier Media and the strong market position of its English news channel in a relatively short period in its addressable segment are positives, it is not immune to the initial gestation period of TV channels. 

FY20 numbers will be crucial because they will show whether Republic Bharat enjoys increased advertisement revenues in full year of operations. Ramp up in its digital platforms will also be a key thing to watch out for. However, the vulnerability of an advertisement revenue-driven business profile always exists. There is a certain degree of cyclicality in advertisement spends by the corporates. Plus, the competition from news TV channel rivals is rising.

ARG Outlier's subsidiary SARG Global Digital Private Limited clocked a turnover of Rs 10.53 crore and loss was Rs 1.75 crore in FY19.

What are the company's top compensation details?

In terms of compensation, managing director Arnab Goswami was paid Rs 2.45 crore as remuneration while his spouse, Samyabrata Ray Goswami was paid Rs 44 lakh in FY19. Company secretary Mohit Dhamne received nearly Rs 57 lakh. Arnab's remuneration stayed largely flat compared to FY18. Samyabrata's remuneration went up by 20% from FY18 pay packet. 

Also, ARG Outlier has a ESOP scheme. CEO Vikas Khanchandani was granted 3328 options. Vikas got a remuneration of Rs 2.53 crore in FY18 compared to Rs 1.38 crore in FY18, up a whopping 83%. Content & production head Charu Thakur was granted 2171 options, distribution and international revenues head Priya Mukherjee was granted 1447 options and CFO S Sundaram was granted 1447 options. The options granted are near FY18 levels.   

The company paid a total of Rs 46.4 crore in salaries, wages and bonus in FY19, up 38% from Rs 33.6 crore in FY18.

Additional Reading

Arnab's India TV debate impact - https://www.aljazeera.com/programmes/listeningpost/2020/02/brash-bigoted-arnab-goswami-changed-india-tv-debate-200218072035580.html

Arnab’s Republic of Investors - https://www.thenewsminute.com/article/arnab-s-republic-investors-who-funding-goswami-and-what-means-55667

How do SMEs gain from digital bank offering from HDFC Bank

If you run a SME (Small and Medium Enterprise), you know banking is a full fledged headache. SME owners have to try and grow faster, compete with bigger and deep pocketed rivals and also at the same time diligently grow through accounts, keep track of transactions, ask for more credit. The list goes on.

Being an SME, doing banking can be a stressful job. That's why digital offerings are a boon straight from heaven. The country's most valuable lender, HDFC Bank has launched India’s 1st first full-fledged digital banking service for small-and medium enterprises (SME).

HDFC Bank maintains that this product is not a market centric offering but a web enabled one. Customers can log in through their enet ID\password and gain access to a host of services. At a single click a customers can access all information on existing loans; apply for letters of credit\bank guarantees; submit bank statements, financials, insurance policies; and get offers as well as alerts of important dates.

Its different

What this allows is SME clients to access a complete suite of services instantly and round-the-clock on the device of their choice, be it a desktop, laptop, tablet or mobile. SME owners and top executives are always on the go. Meeting people, exploring opportunities, looking after goods that are stuck or delayed. Yet, SME companies have a strong hierarchy. Banking transactions can get slowed when there are many people 'approving' them. In the physical world, this means sending physical copies of documents. Then making sure the bank has got them. Follow-ups. It can be quite time-taxing as well.

What HDFC Bank's digital SME bank facility does is remove the hassles to a large extent. So, you dont need to call relationship manager or visit a branch. Result: you save considerable time and effort.

The SME bank initiative in the second leg of the ‘Bank AapkiMutthi Mein’ campaign that was launched for tHDFC Bank’s retail customers in December 2014 at Varanasi. With this, HDFC Bank now brings the benefits of digitisation to its corporate clients, starting with SMEs.

Journalists at Mumbai interacting with HDFC Bank officials at SME digital solution launch

The importance of SMEs is well-known. 3.6 crore SME units contribute about 8 per cent to India’s GDP. If manufacturing has to grow and fast, SMEs need be helped. SME contribution to India’s manufacturing output is 45 per cent. They also earn a lot of forex since they account for 40 per cent of India’s exports.

What SMEs get

With digital SME banking, HDFC Bank is attempting to revolutionize banking just as ATMs, internet banking did. For existing clients, this will be a total Digital banking experience where the control of the Bank account resides in their hands.  Now, Digital will bring SME banking to same stature retail banking is in terms of extra convenience. HDFC Bank, like many others, offers Current Accounts, Merchant Services, Cash Management Services, Working Capital, Business Loans, Trade Finance Solutions and Export Services to SMEs. But, digital will change the game, probably forever.

Aseem Dhru, Group Head - Business Banking, HDFC Bank Ltd, says digital empowerment is a game changer for an SME. A business banking customer will be able to apply for working capital finance, access information, place requests and do multiple other transactions without having to contact a relationship manager. "This means that the turnaround time for many customer requests will come down to a few hours from a few days. What is more the customer is not constrained by banking hours and can access services through several platforms like a PC, Laptop, Tablet or a mobile," he added.

Aseem Dhru, Group Head - Business Banking, HDFC Bank explaining how mobile app will help SMEs get 'more banking from less'

So, imagine you are SME owner. Now, you get:

1)  One view of all your credit lines with the Bank and the asset outstanding. You can even know the maturity date of Letter of Credit, Bank Guarantees

2) A big relief. Pay and receive all your money without even using a cheque book. SMEs like business clients of HDFC Bank use ENet.

3) Get Letter of Credit, Bank Guarantee, Foreign currency outward remittances, Import bill under collection / LC done from your office

4) As many SME owners already know, documentation is a big headache. With Digital SME bank, All Important documents like Stock statements, Insurance, financials etc. can be uploaded with ease to the Bank for smooth continuation of credit facilities

5) HDFC Bank will also use analytics to send you offers which are relevant to the particular customer

6) SME clients will get Tickers and Alerts of renewal/expiry dates to facilitate SME’s in timely submissions.

What I really like about the service is the level of transparency. According to HDFC Bank, for each client initiated transaction request, a QR code is sent which can be saved and used to know the status of the request thus ensuring transparency.

7) Clients can ask for seasonal / additional limits for a sudden business requirement and based on the analytics, the money could be credited to their accounts almost instantly. If its actually instant, that will save a lot of cash problems for SMEs. Readers are requested to try this out and let me know if HDFC Bank walks the talk on the digital service delivery part.

Its clear that HDFC Bank like some smart lenders is wanting to automate and in a sense democratize banking. Resources can be used in a better way. With the Bank taking transactions online and relationships offline,relationship managers will continue to service the clients over and above this digital offering. This could be a transformative change in the SME customer experience.

Within a month, the Bank will extend the offering to new customers. They can apply online for loan facilities by uploading just three basic documents.The Bank will respond in about 24 hours with an in-principle decision, say HDFC Bank officials. Let me know how your experience was and what kind of problems, if any, you are encountering when dealing with HDFC Bank.

Till, the next time.

Times Group boss Vineet Jain paid himself about Rs 50 cr as remuneration in FY14 and gave truckloads to others too

Charity begins at home, some say. Veritable media mogul Vineet Jain, 50, who holds the position of Managing Director in Bennett, Coleman & Company Limited (BCCL), literally laughed all his way to the bank in fiscal year ended March 2014 after he got an extremely fat, (no, almost obese), remuneration.

'Jain Zen'

26 years into country's largest mass media company, Vineet has made a name for himself for many things but most of all for "steering" BCCL into the money way. Running an ever-expanding business is no child's play and he has done that, I dare say, with elan! In 2014, he finally paid himself one of the biggest salaries in Corporate India history. He paid himself an eye-popping Rs 463,767,952 (Rs 46.37 crore) as remuneration in this year!

My wife, a journalist herself, says what's the big deal in this? "He practically owns the company along with his brother Samir. It publishes The Times of India, kumar. THE TOI, ET, NBT...," she reasons. Nevermind, I am still in awe.

This Rs 46.37 crore remuneration means every day that Mr Jain, who has a MBA in Marketing, spent in FY14 was billed at a staggering Rs 13 lakh for whatever he gave the firm. I can't even earn that amount in one full year. Every day, Rs 13 lakh. For 350 days. Fantastic!

Unlisted Bennett, Coleman & Company Limited (BCCL) as you know is primarily engaged in the business of publication of newspapers. It publishes the highest selling English broadsheet daily in the world, i.e., The Times of India. Apart from this, the company publishes newspapers like The Economic Times, Navbharat Times, Maharashtra Times, etc. It also houses television channels zoOm, Times Now and ET Now. BCCL has subsidiaries which are engaged in the areas of internet, e-commerce, radio, television, out of home, etc.

Let me explain the reason behind my long-lasting awe. From what I gather, BCCL made about Rs 5,700 crore in FY14 year with about 821 crore in net profits. Mr Vineet Jain, by that measure, all by himself got about 5.5 per cent of the company's bottomline. At the absolute level, this Rs 46.37 crore remuneration ranks with the best of the best of the best of the best ...

SAP old hand and now CEO of Infosys, Mr Vishal Sikka thought (and we all did) landed a great deal with Rs 30 crore pay packet with India's most loved IT company. Mr. Anil Manibhai Naik of Larsen and Toubro got about Rs 21 crore in a year. Sun Group promoter and chief executive Mr Kalanithi Maran got Rs 56 crore. Kumarmangalam Birla, who lords over the Birla empire, also got Rs 50 crore. So you see, Mr Vineet Jain is right up there. In that August company of rich men...

Comparisons of Jain's pay with others in the 'Media' industry are virtually pointless. A true Goliath among dwarf davids. India Today Group CEO Ashish Bagga got about Rs 4.4 crore as pay packet last year. BCCL CEO Ravi Dhariwal took home a whopping Rs 11 crore in FY'13 financial year (including performance pay), CEO Rajiv Verma of HT Media earned Rs 4.68 crore in 2012-13 while newly appointed CEO Of Kasturi & Sons CEO Rajiv Lochan is contracted to earn Rs 1.75 crore. Clearly, Mr. Jain is the big daddy when it comes to earning big bucks. He is the undisputed King of kings!

Jain had got Rs 14.90 crore in FY'13 and Rs 14.57 crore in FY'12. What exactly led to his remuneration rising manifold this year is not clear. However, a large part of his Rs 46.37 crore could be in form of 'commissions'. No idea what that was for. If any of you do, give me a shout.

There Are Others

Last year -- that is in FY13 -- the highest paid in the firm was Indu Jain, BCCL, Chairperson -- mother of Vineet and Samir. She was paid Rs 15.56 crore for the period 1st April 2012 to 31st March 2013. This appears to be marginally higher than Rs 15.45 crore paid to her in FY'12. In FY14, the 78-year old Sahu Jain family matriarch received about Rs 155,257,652 = Rs 15.52 crore.

For three years running (atleast), she appears to have adopted the mantra of India's wealthiest man Mukesh Ambani. Reliance Industries Chairman Mukesh Ambani kept his annual salary capped at Rs. 15 crore for the sixth year in a row even as the remuneration of key executives went up. Mr. Ambani has kept salary, perquisites and allowances and commission at Rs. 15 crore since 2008-09, foregoing almost Rs. 24 crore per annum.

Coming back to Samir Jain , the eldest son of late Ashok Jain. The 60-year old, also the Vice Chairman and MD of BCCL, got good money as well in FY14. Clearly, the brothers struck a pot of gold in 2014, the year which will be remembered for having been the stage for Mr Narendra Modi storming to power at the Centre as PM on the back of the strongest mandate from the public in last 30 years. Many, not just me, feel big media played the role of a second fiddle too well in getting Mr Modi at 7 Race Course Road.

Samir took home Rs 375,142,883 or a staggering Rs 37.51 crore as remuneration. The chief architect of BCCL in 1980s, Samir -- famous for being the more spiritually inclined between the two brothers -- had got Rs 15.17 crore in FY'13 against Rs 14.82 crore in FY'12.

The youngest member of the Jain family Trishla Jain, an artist who held the post of executive director, had received Rs 3 crore in FY'13 compared to Rs 2.8 crore in FY'12. In FY'14, thirty something Trishla got about Rs 2.7 crore. About the same in the previous two years. Eleven years into BCCL, Samir's daughter is said to have played a key role in business development. Trishla resigned from company directorship from March 31, 2014.

Satyen Gajwani, Trishla's husband, got about Rs 51 lakh but this doesnt reflect a full-year's pay.

So, all in all, the Jains got over Rs 100 crore as remuneration from BCCL in the fiscal year that has gone by or about 12 per cent of bottomline. The 'family' was paid about Rs 50 crore in FY'13 or loosely 6.5 per cent of standalone profits. Clearly, the rich haul in 2014 is not just from remuneration. The directors recommended a dividend at the rate of 6 per cent (Rs 17.22 crore) on the paid-up share capital of Rs 286.96 crore. Assuming the promoters i.e. Jains hold 90 per cent of beneficial interest in BCCL, that makes it another Rs 15.5 crore in dividend income.

Growing Inequality

BCCL CEO Ravi Dhariwal has retired. Naturally, his pay this year at Rs 5.57 crore reflects that. For the record, he was paid Rs 11.34 crore in gross remuneration (FY'13) compared to Rs 3.4 crore in the fiscal ended FY'12. Dhariwal had a great stint at BCCL after being with the group for more than a decade. Bharti Retail's chief executive Raj Jain has now taken his place. Hope Jain finds solace in the company of more Jains!

Before delving deeper into this ever-widening salary chasm of non-editorial and editoral guys, lets look at some more numbers. Non-editorially speaking. 49-year old Shrijeet Mishra took home Rs 2.9 crore as COO. He has about 25 years of professional experience.

In FY13, Arunabh Das Sharma, Executive Director & President Response, got Rs 2.92 crore. In FY14, its Rs 3.6 crore for the former Whirlpool hand at BCCL. 22 years of experience including 4 in BCCL. Joy Chakraborty, Director-Response (Response is the prime mover among all other media marketing solution providers in India. It just not the advertising department!) received Rs 2.2 crore. Another Director - Response R Sundar took home Rs 2.64 crore in FY14 compared to Rs 1.84 crore in FY13. These are good hikes at good levels.

Lets look at non-editorial VP level salaries in BCCL. Indira Dinesh, Vice President - Response, got Rs 79.25 lakh in FY14 vs Rs 72.80 lakh in FY13. C G Varughase, Vice President - Response, got Rs 78.65 lakh vs Rs 70.39 lakh. Teena Singh, Vice President - Response, got Rs 73.97 lakh vs Rs 66.42 lakh. Jnan Prakash Dsouza, Vice President - Response, got Rs 72.45 lakh vs 62.01 lakh. VP people are guys with 20-30 years of solid experience.

At AVP levels, which is like above 15 years experience, BCCL executives get about Rs 60-89 lakh a year. For example, Diwakar Dadoo, AVP - Brand Capital, got about RS 64.4 lakh in FY14. Kuldeep G Mantry, AVP - MAS, took home Rs 63.19 lakh. At the higher end of the spectrum is 48-year old Rasesh Pushpabadhan Gandhi who got Rs 89 lakh as AVP Response.  

Among other key BCCL businesses, S Sivakumar, CEO - Brand Capital, received a lower Rs 1.66 crore vs Rs 2.01 crore. Also, Ashok Raparia, Director - Human Resources, got Rs 1.13 crore vs Rs 1.40 crore.

Coming to editorial staff now. Jaideep Bose, 51, (Editorial Director - TOI) got roughly Rs 1.9 crore in FY14 compared to Rs 2.45 crore in FY'13. Bose has spent 22 years in BCCL out of the full 28 in the profession with his last employment being with Ananda Bazar Patrika. Some could say top notch-editorial talent at BCCL didn't even earn Rs 2 crore when the largesse is quite clear from non-editorial salaries. Comparing to verticals like Response, Bose, aka Jojo, got 33 per cent less than Arunabh Das Sharma, Executive Director & President Response.

Next up is Rahul Joshi, Editorial Director - ET. His remuneration was Rs 1.39 crore vs Rs 1.34 crore. Joshi is Economic Times' Jojo in a loose sense of the word although Joshi would despise such comparisons. The salary chasm, as I had referred to earlier, now gets wider. Santosh Ramachandra Menon, Assistant Executive Editor, with 21 years of experience, including 6 in BCCL, earned Rs 69 lakh.

Bodhisatva Ganguly, Deputy Executive Editor, got about Rs 68 lakh. Shailendra Swaroop Bhatnagar (Chief Editor-Markets & Research), apparently responsible for Editorial Content during the Morning Band of ET NOW, earned Rs 92.8 lakh in FY14 vs Rs 86 lakh in FY13. Bhatnagar has 19 years of experience and going by his job description, he handles the time when financial markets are alive. Out of the 81 people BCCL has disclosed remuneration details, only 7 are journalists.

A word on salaries of the ordinary journalist. The Aam Journalist. Always getting the short end of the stick. Why? Because he gets the news, not the ad money.

The salaries of big editors in BCCL are actually huge compared to the little guys who actually make the papers happen day after day. Talk about misplaced priorities, barring a select few top journos, when it comes to salaries. Why peanuts to almost everybody when that aam journalist is actually doing the most work?

The theory of a space seller i.e. marketing guys being more valuable is deeply flawed. That space which gets you easily over a crore is the space where yesterday's headline just became archived material. Nobody remembers a paper or a channel by the ads they show, its the news, It always has been 'the news' and it ain't gonna change soon. The crowd puller or the show stopper is news and the news guys.

The Year 2014 That Just Went By

BCCL had a great year from the looks of it. Total income grew about 10 per cent to Rs 5,659 crore. A ten per cent growth kind of year after a marginal rise in FY13 vis a vis FY12 is actually a lot to cheer for. Out of FY14 revenues, sale of publications accounted for Rs 583.25 crores, television distribution revenue about Rs 21.6 crore and the cash-cow, advertisement revenue was about Rs 4,684 crore.

Key takeaways -- both sale of publications and advertisement revenue grew at about same pace of 8-odd per cent year on year. However, BCCL's focus on space utilisation indicates why its after all more of an advertising firm. There's no harm in it. Almost everybody in the market, is trying to copy that ad-first approach. 

This momentum showed up in profits as well. BCCL's bottomline grew to Rs 821 crore in FY'14 compared to Rs 740 crore in FY'13.  

In the print business, during the year under review, its flagship brand, Times of India achieved an overall growth in circulation. The Newspaper in Education (NIE) segment is said to have registered an impressive growth of over 8 per cent as compared to previous year. Economic Times maintained its market share for Business Dailies. The company took a major step forward in languages through launch of Navbharat Times in Lucknow. This launch is supposed to have opened up a significant

opportunity for NBT in the Hindi heartland. 

Maharashtra Times launched two new editions in Jalgaon and Ahmednagar, further consolidating its position in the Western markets with a total of 8 editions. The company recently launched Nav Gujarat Samay, a general interest daily in Gujarati language in the cities of Ahmedabad and Gandhinagar. This launch makes BCCL the only newspaper group to have major publications in 5 Indian languages - Hindi, Marathi, Kannada, Bengali and Gujarati. 

In a challenging business environment for Media industry, newspaper advertising spends grew by only 5 per cent as per Group M report 2014, BCCL achieved a growth of 8 per cent. for the year 2013-14. This is because the company pursued a strategy of growth both in volume and yield. 

In the TV segment, BCCL got good 'response' as well. zoOm channel maintained its viewership share while the segment saw lot of competition. The channel continued to grow on the social media networks and became the first Indian TV brand to cross the 7 million mark on Facebook. In April 2013 zoOm launched a new digital channel on YouTube Telly Talk India which has grown to over 2.3 crore views by 31st March 2014. 

During the year under review, ET NOW continued to remain a good choice of viewers in the English Business News category and dominated the genre. On the content and programming front, the channel continued to add newer formats both during weekdays and weekends, even as it strengthened

its core proposition of market-moving stories and superior stock recommendations based on technical analysis. ET NOW also hosted its first-ever India Economic Conclave, which is a national thought leadership platform meant to spotlight and address key economic challenges facing the country. It was well received by all the stakeholders, including the government, industry and civil society.

During the year a new channel Romedy Now was launched on 22nd September 2013. Romedy NOW is a first of its kind Premium English Entertainment Channel ushering Love & Laughter together for the first time on Television. The channel caters to the Urban affluent audiences across all 8 metros and has established its leadership in a span of just 7 months from its launch.

Also, during the year under review, Times Music continued its leadership in Indian Classical, Devotional, Spiritual and Wellness genres with an impressive turnover. 

Comments/critique all welcome.

Images: Have been sourced from the Internet

Microscope: Looking at Living Media (India Today Group), Performance & Birla's rumored exit

Not many Chartered Accountants have taken a media company to the heights that Aroon Purie single-handedly has. The Lahore-born eminent journalist, who is almost synonymous with those trademark specs and his pink coloured tie, gave shape and firmness to his father Vidya Vilas (VV) Purie's tabloid newspaper called India Today launched in December 1975, the year which witnessed the then PM Indira Gandhi declaring the infamous Emergency. Today, Living Media -- the unlisted holding company of the India Today Group -- is the platform for the Indian media conglomerate which has interests in magazines, newspapers, books, radio, television, printing and the Internet. It has even attracted industrialist Aditya Birla as an investor, who is of late rumoured to be keen on an exit. We take a look at the good, bad and ugly of 'India Today'...

Staring at losses: Birla arrives

Living Media, by its own admission, competes with Bennett and Coleman Company Limited; HT Media Limited; Outlook Publishing (India) Private Limited; Images Multimedia Private Limited; Worldwide Media Limited; Television Eighteen India Limited; New Delhi Television Limited; Media Content & Communications Services (India) Private Limited; Anand Bazar Patrika Private Limited.

Its business segments comprise of the following: 1. Publications - Publishing of various magazines 2. Trading - Sale of merchandise, books, CDs, etc. 3. Distribution - Distribution of external publications 4. ITGOL (India Today Group Online)-Online advertisements and mobile value added services. 5.Others

As earlier said, its promoters are Editor-in-Chief Mr. Aroon Purie, Mrs. Rekha Purie (his wife), Mr. Ankoor Purie (his son), Aroon Purie & Sons (HUF), All India Investment Corporation Private Limited and World Media Private Limited (holds over 50 per cent stake in Living Media). Mr. Aroon Purie has been irrevocably appointed by each Promoter as its representative for certain identified purposes. Besides, individuals with significant influence include:- Ms. Koel Purie Rinchet (Daughter of Mr. Aroon Purie), Ms. Kalli Purie Bhandal (Daughter of Mr. Aroon Purie), Mrs. Madhu Trehan (Sister of Mr. Aroon Purie), Mrs. Mandira Purie Fawcett (Sister of Mr. Aroon Purie) & Mrs. Leela Purie (Mother of Mr. Aroon Purie).

In 2010 fiscal, Living Media reported standalone sales of Rs 348-odd crore. In 2011, this rose to about Rs 375 crore. More importantly, the company swinged to Rs 14.3 crore profit in 2011 from a loss of about Rs 12.2 crore in 2010. The profit in 2011 was more like a fleeting wind. In fiscal 2012, Living Media -- which has its registered office in the upmarket Connaught Circus area of New Delhi although it has shifted significant amount of operations to Noida -- sales came down a bit to Rs 369 crore but the bottomline turned red as it racked up losses (after tax) of Rs 18 crore. 

In 2013 fiscal, Living Media revenues fell further to Rs 341 crore and losses deepened to Rs 26-odd crore. Blame it on the global economy and/or the local economy, the advertising market has been subdued, to put it mildly, in the recent years. Mainly a printer and publisher of magazines, Living Media was under pressure as corporate marketing initiatives were trimmed and ad budgets further snipped. When you have 26 magazines, problems are in dozens. But Living Media is not just another company. It has more. Like in previous years, Living Media did what it could.

It's business in Retail under brand name 'Media Mart' was further consolidated to optimize future market by concentrating more on outlets at Airports, Shopping Malls besides outlets at Metro Stations. Possibility of having outlets in other formats like independent Kiosks, IT Parks, Office Complexes, Educational Institutions etc. were being looked at. This, Living Media management, figured should result in higher volume and consequently increase in top-lines for retail business.

Some more housekeeping was also done. During 2013 fiscal, the company's joint venture agreement dated 1 st December, 2003 with HarperCollins Publishers Limited, UK was discontinued.

To make itself a pure-play media firm, Living Media transferred its Non-Media Undertaking with all assets and liabilities to Thomson Press (India) Limited.

Soon enough, Living Media along-with promoter shareholders entered into Shareholders Agreement (SA), Share Subscription and Purchase Agreement (SSPA), with IGH Holdings Private Limited -- an Aditya Birla Group Company. Pursuant to these agreements, the holding company of Living Media -- World Media Private Limited (controlled by Arun Poorie etal) sold 14,129 equity shares to IGH Holdings Private Limited & Living Media issued 53,798 fresh shares to IGH Holdings Private Limited.

So, the loss-making company got Rs 480 crore at one-shot as it was valued at Rs 1,750 crore by virtue of the price paid by Aditya Birla group firm for getting 27.5 per cent stake. Later, the industrial conglomerate pumped in atleast Rs 70 crore in exchange for more equity (9,784 shares)-- making the total investment upwards of Rs 550 crore.

One may have think why so much of money for Living Media but possibly the answer lies in TV Today Network (worth Rs 320 crore in May 2012) which is listed on bourses. Living Media controls over half (57% odd) of it. Birla-whose aunt happens to be HT Media owner Shobhana Bhartia-was convinced that Living Media is a good play on the "sunrise sector". An IPO dream was floated: the investor told about a public offering within November 2018. In case it didn't happen by then, IGH could hike its stake upto 49 per cent.

Here, I would like to add that the traditional media reports on Aditya Birla group's investment in Living Media seem a bit off the mark. See here and here. They, however, were bang on when it came to reporting the development of Birla asking merchant bankers to explore an exit from Living Media in about 2 years!

How It Lives Media

TV Today Network has channels like Aaj Tak and Headlines Today. In 2012-13, it reported income of Rs 320 crore and profit of Rs 12.2 crore---margin of less than 4 per cent.

Another key subsidiary of Living Media is 64.85% owned Mail Today Newspapers Pvt Ltd. Its a key arm not because it publishes Mail Today newspaper, established in November 2007 in a joint venture with British newspaper Daily Mail. MT's penchant for young talent and young readers --- more often by default than design --- is unique. The management expects the paper to go through a gestation period of 7-8 years, for a country like India. MT is part of a key business plan that was pitched to Birla. Why? Most probably because of its losses and the drag it caused on the group financials/earnings. In 2012-13, it logged sales of Rs 39 crore but losses were at a whopping Rs 29 crore.

Like Mail Today Newspapers Pvt Ltd, Living Media has another key subsidiary e-commerce unit BagitToday.com. As per information, this business racked up over Rs 16 crore in losses in fiscal 2013.

Running the overall business has never been a problem for Mr. Purie. Notwithstanding the large real estate assets which can be mortgaged to take sweetheart loans, the company has always been able to put it's hands on the required working capital. Salaries have been paid on time. Creditors rarely complain. Events held by the group have seen the who's who of the world arrive.

Now comes the secret business plan. The Initial Business Plan for the Financial Years ending 31 March 2013, 31 March 2014 and 31 March 2015 is a rolling three (3) year Business Plan and had been adopted by the shareholders. Complete with projections, the plan was set in motion to be prepared for an IPO.

Living Media's losses in Mail Today and BagitToday.com businesses (including its holding in India Today Retail and India Today Merchandise) alone were Rs 45 crore. Hence, the company promised to take all reasonable measures for increasing the business prospects and profitability of Bagittoday.com Target Business and the Mail Today Target Business.

In the event that either Bagittoday.com Target Business and/or the Mail Today Target Business do not perform in accordance with the projections provided in the Business Plan and the actual average audited EBITDA for the Financial Years 2013, 2014 and 2015 of such Identified Business is lower by seventy per cent. (70%) of the average target EBITDA of such Identified Business for the Financial Years 2013, 2014 and 2015 as set out in the Initial Business Plan, Birla was entitled to trigger an event of strategic sale of either or both of the Identified Businesses at its sole and absolute discretion at any point of time subsequent to 15 September 2015 by issuing a notice to Mr. Purie. So, if at all such event happened -- this was to be after Sep 2015.

So, why does he want to leave so soon? Between May 2012 and now, some things have happened. 1) Modi government stormed to power at the Centre. 2) Shekhar Gupta joined as the vice-chairman of the India Today Group. He resigned from his post as Editor-in-Chief of the Indian Express and moved out officially in June, 2014 after being in the position for 19 years. 3) In an attempt to ensure plurality of news and views, broadcast regulator Trai very recently suggested restriction on political bodies and corporates entering the television and newspaper business.

Update: According to reports, Gupta has quit his position. Will stay on board as editorial adviser. See here.

From an investment perspective, Living Media is as well-placed as anybody. For Aditya Birla, pumping more funds clearly ain't an issue. IGH is empowered to invest upwards of Rs 12,500 crore.

Hasty resignations & salaries

For the year ended 31st March, 2013 Mr Aroon Purie got gross pay of Rs 1.63 crore. Director Anil Mehra got Rs 1.43 crore. Ashish Bagga, Group Chief Executive Officer, got an eye-popping Rs 4.41 crore. Dinesh Bhatia, Group Chief Financial Officer, got Rs 1.42 crore. Oxford educated Kalli Purie Bhandal, designated as Group Chief Synergy Officer, got Rs 1.08 crore. Mala Sekhri, COO Lifestyle Group & Music Today, took Rs 90.13 lakh.

Interestingly, both Bagga and Bhatia apparently had resigned as directors on March 31, 2014 due to what they call "personal reasons" or euphemism for DONT ASK :) Soon after Bhatia got reappointed at an annual package of Rs 1.76 crore plus PF, gratuity, medical insurance etc. However, Bagga--famous for his red trousers-- got reappointed at an annual package of Rs 4.1 crore plus PF, gratuity, medical insurance etc. Did he strike a good deal?

Comparisons of Bagga's pay packet with CEOs of rival media companies are natural. On that count, he seems to be at par. While big daddy BCCL CEO Ravi Dhariwal took home a whopping Rs 11 crore in the last reported financial year (including performance pay), CEO Rajiv Verma of HT Media earned Rs 4.68 crore in 2012-13 while newly appointed CEO Of Kasturi & Sons CEO Rajiv Lochan is contracted to earn Rs 1.75 crore.

As always, feel free to drop your comments/criticism/praise in the "Comment" section below. Till the next time.

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What New Kasturi & Sons CEO Rajiv Lochan earns

History will possibly judge the new CEO and MD of Kasturi & Sons Ltd (KSL),  the publisher of The Hindu, kindly. Or perhaps not. But one thing is clear. Rajiv C Lochan has got a good 5-year deal including a 'golden parachute'. Read on to know why...

Some can say that former McKinsey hand Rajiv C Lochan has his task cut out as the second chief executive of Kasturi & Sons whose cash cow 'The Hindu' was interestingly first launched in 1878 to support the campaign of Sir T. Muthuswamy Iyer for a judgeship at the Madras High Court.

On the other hand, it can be argued that Lochan, 43, couldn't be in a better position as Managing Director & Chief Executive Officer. He is leading all the non-editorial operations of this firm at a time when the promoter family is back overseeing the institution they so fondly built brick by brick.

Lochan was brought in June 2014 to fill the void, some say, created by Arun Anant who quit as CEO in October 2013 along with The Hindu's editor Siddharth Varadarajan. Anant, the company's first ever chief executive, now works as Director Revenue and Strategy at HT Media, which found its beginning in 1924 when its flagship newspaper Hindustan Times was inaugurated by father of the nation -- Mahatma Gandhi.

Reams have been written about how in October last year, Kasturi and Sons chairman N Ram used his casting vote to effect a change in top management at KSL. After the exit of Anant and Varadarajan, N Ravi took over as editor-in-chief of The Hindu and Malini Parthasarathy as editor. Yesterday, KSL even appointed two corporate citizens as independent directors on its board to give it a fresh look.

I will not go into those details. That's history. As an observer of the media and as one who earns his daily bread from journalism, I was curious to know what Lochan would 'get' for being the top KSL executive, non-editorially speaking of course.

Before we delve deeper, it is important to understand the circumstances Lochan, who graduated from IIT, Madras and has advanced degrees from the Massachusetts Institute of Technology and Columbia Business School, has come in.

From about Rs 58 crore in 2011-12 fiscal, net profit of KSL on a standalone basis in 2013-14 has fallen to apparently in single digits. Revenues are in the Rs 1,000 crore range but rising competition from a ferocious competitor like Bennet, Coleman & Company Ltd (BCCL) that publishes 'The Times of India' and 'The Economic Times' to name a few.

A host of reasons are affecting most newspaper publishers. They include low growth in advertisement market due to poor economic growth, Times Group aka BCCL having control over 50 per cent of national print market and offering a wide product basket that virtually elbows everyone out and the clear discomfort at adopting equity swap deal strategy that is driving handsome profits at those 'comfortable' with it.

Coming back to Lochan's remuneration. How much money is he making? That's all we want to know, right? So, here it is.

Firstly, what people tell me is that Lochan is entitled to a salary component of Rs 6.62 lakh a month or Rs 79.44 lakh a year. Next, his house rent allowance (HRA) is sixty per cent of that salary i.e. Rs 3.97 lakh a month or Rs 47.67 lakh a year. Thirdly, his remuneration includes gas, water & electricity expenses is subject to 10 per cent of his salary i.e. Rs 66,200 per month or Rs 7.94 lakh a year.

Then, there is a liberal medical reimbursement component. leave travel concession, club fees (for two clubs), personal accident insurance, provision for car and telephone, besides provident fund etc.

Fifth, is performance pay. Lochan would get a share of profits above Rs 50 crore every year. Currently, this share is 1.5 per cent. Put simply, if KSL would log profits of Rs 75 crore, in that year Lochan would get 1.5 per cent of Rs 25 crore above the Rs 50 crore high water mark.

Lastly, there is a provision for 15 per cent of salary i.e Rs 11.92 lakh a year as contribution by the company towards a superannuation fund. Put together, this is easily over Rs 156 lakhs a year or Rs 1.56 crore without bonus/performance pay.

So, we know Ravi Lochan on a pre-tax basis would take over Rs 1.5 crore every year as minimum remuneration for leading all the non-editorial operations of KSL that publishes The Hindu, The Hindu Business Line, Frontline and The Hindu (Tamil) among others.

After Anant's exit, which some say was acrimonious to say the least, Lochan's remuneration contains an interesting item. Called Golden Parachute in HR parlance, this is usually an amount the company pays a top employee if employment is terminated. Lochan is entitled to get Rs 175 lakhs or Rs 1.75 crore in the event of KSL terminates his services before the expiry of his 5-year term. So in case the Kasturi & Sons Ltd board has a change of heart, Lochan doesn't lose that much monetarily.

Comparisons of Lochan's pay packet with CXOs of rival media companies are natural. On that count, he seems to be potentially earning a tad less. While BCCL CEO Ravi Dhariwal took home a whopping Rs 11 crore in the last reported financial year (including performance pay), Karan Ahluwalia--Chief Operating Officer of Directories Today, The India Today Group-- gets a basic remuneration of Rs 1.06 crore. Dinesh Bhatia, CFO at India Today Group, contracted cost to company is about Rs 1.8 crore per annum. In HT Media, CEO Rajiv Verma earned Rs 4.68 crore in 2012-13.

Disclaimer: I worked for The Hindu Business Line for a year and a half in 2006-08.

A special round of thanks to everybody who made my blog cross the 1,500-page views mark. That too in less than 8 months and just 8 posts :)

As always, feel free to drop your comments/criticism/praise in the "Comment" section below. Till the next time.

Images: Sourced from the Internet. If anybody has any objection to use, please notify and it/they will be removed within 24 hours.