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

How Did The Times Group Perform and Pay in FY13

While we read about salaries, corporate performance and company outlooks in the various outlets of the over 175 year old Times Group, let us find out how unlisted BCCL itself paid and did in financial year ended March 2013!

If you are a reader of newspapers or a voracious listener of news on the TV, you must have heard of The Times of India, The Economic Times, Times Now etc. They are the biggest and arguably the best in the country.

Unlisted Bennett, Coleman & Company Limited (BCCL) 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.

Bennett Coleman And Company Limited (BCCL) has its registered office at Times Of India Bldg, D N Road, Mumbai, Maharashtra. Unlisted companies usually file their annual filings with a delay of 3-12 months.

Profits:

For the year ended March 31, 2013, BCCL reported a net profit of Rs 739.62 crore. This is over 37 per cent higher than Rs 537.32 crore in the year ended 31st March, 2012.

Sales:

For the year ended March 2013, BCCL logged a total revenue of Rs 5,057.52 crore. This is marginally higher than the Rs 4,946.93 crore reported a year ago.

The FY'13 revenue of Rs 5,057.52 crore includes :- 1) Sale of Publications :- Rs 536.78 crores 2) Television Distribution Revenue:- Rs. 9.51 crores 3) Advertisement Revenue :- Rs. 4,190.72 crore.

For every 100 rupees earned in 2012-13, BCCL earned 82 rupees from advertising in FY'13. Also, importantly advertising revenue's share on overall pie came down from 84 rupees (of every 100) in fiscal year 2011-12. About 10 rupees came from sale of publications. This is why possibly many argue that BCCL looks more like an advertising firm.  

The year gone by:

During 2012-13, the company's flagship brand, The Times of India achieved  overall good circulation growth. Four new editions were launched -- Aurangabad, Raipur, Kolhapur and Vizag, thereby extending its reach into new markets.

Circulation of The Economic Times was down compared to last year. Maharashtra Times launched two new editions in Nagpur and Kolhapur.

Navbharat Times remained same as in the previous year.

The company launched an entirely new mast-head in the form of a Bengali paper 'Ei Samay' (Bengali for These Times) in October 2012.

Performance of BCCL subsidiaries:

The company has listed about 50 firms as subsidiaries.

Zoom Entertainment Network Ltd runs the the first TV channel of the group -- zoOm TV (Editor: Omar Qureshi). It posted revenues of Rs 108.64 crore in FY13. It appears to have posted a loss.

Led by CEO Satyan Gajwani Times Internet Ltd operates a portfolio of web and mobile properties that claims to engage millions of users globally. Gajwani happens to be the son-in-law of Samir Jain -- Vice-Chairman & MD of BCCL. Mobile and web are among the company's priorities.

The arm posted a total revenue of Rs 417.91 crore in FY13 and a profit after tax of Rs 116.05 crore -- about 28 per cent net profit margin.

Times Global Broadcasting Company Ltd. It runs TV channels Times Now and ET Now. Posting revenues of Rs 213.9 crore in FY'13, it posted a profit of just Rs 10.73 crore -- barely 5 per cent profit margin.

Also led by Satyen (as per BCCL website), Times Business Solutions runs TimesJobs.com, MagicBricksMagicBricks.com, SimplyMarrySimplyMarry.com and Ads2BookAds2Book.com, among others. It earned revenues of Rs 320.76 crore and a good Rs 59.3 crore net profit -- translating to 18 per cent profit margin.

Another interesting BCCL arm is Brand Equity Treaties Ltd. It is called Brand Capital these days. Basically, its the latest avataar of 'Times Private Treaties' which germinated with the idea of offering advertising for assets. This subsidiary reported revenues of Rs 160.59 crore but its profit after tax was in the negative (Rs 34.97 crore loss).

Salaries:

Now, comes the most important part. BCCL has disclosed pay packet (gross remuneration subject to tax and comprises salary, perquisite, incentives and commission, provident fund, super annuation fund etc) of as many 69 people. Any extra amount paid has not been captured in the figures below.

The highest paid appears Indu Jain, BCCL, Chairperson. 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.

BCCL VC and MD Samir Jain was paid Rs 15.17 crore in FY'13 against Rs 14.82 crore during 01/04/2011 to 31/03/2012. Next in the pecking order is his brother Vineet Jain who got Rs 14.90 crore in FY'13 compared to Rs 14.57 crore in FY'12.

The youngest member of the Jain family Trishla Jain, an artist, received Rs 3 crore in FY'13 compared to Rs 2.8 crore in FY'12.

Salary details of Satyen, Trishla's husband, could not be accessed.

So, all in all, the 'family' in BCCL was paid about Rs 48 crore in FY13 as remuneration. This would be about 6.5 per cent of annual profits.

BCCL Executive Director and CEO Ravindra Dhariwal was paid Rs 11.34 crore in gross remuneration (FY'13) compared to Rs 3.4 crore in the fiscal ended FY'12. This easily translates to a whopping an over 3-fold pay jump. Some say this jump could be because Dhariwal was paid bonus etc in FY13 that was missing in FY12 when the company's total profit had slumped about 42 per cent year-on-year.

Next, we will look into salaries of other key staff. Readers are requested to excuse my inability to get previous year compensation details.

On the editorial side, gross remuneration of Arindam Sengupta (Executive Editor - TOI), Jaideep Bose (Editorial Director - TOI), Rahul Joshi (Editorial Director - ET), Santosh Ramachandra Menon (Associate Editor), Nikunj Dalmia (Senior Editor), R. Sridharan (Executive Editor) and Shailendra Swaroop Bhatnagar (Chief Editor-Markets & Research) are mentioned.

Sengupta, who is known to have played the role of a deputy to Jojo aka Jaideep Bose with elan, was paid the princely sum of  Rs 10,833,280.94 (Rs 1.08 crore)  in FY'13. On the other hand, Jojo was paid Rs 2.45 crore.

ET's Joshi got Rs 1.34 crore, Menon received Rs 62.07 lakh, Dalmia (Senior Stocks Editor at ET Now) Rs 97.42 lakh, Sridharan (Executive Editor News & Trends, ET Now) Rs 90.08 lakh and Bhatnagar (responsible for Editorial Content during the Morning Band of ET NOW) Rs 85.90 lakh.

Salary details of Arnab Goswami -- Editor-in-Chief and News anchor of the Indian news channel Times Now -- could not be accessed. So, enlightened readers are requested to share the data :)

Read more on previous years' employee costs here and finances here.

'Response':

Let us look at FY13 salaries of key Times Response staff. 'Response', as many of you would be knowing, is the prime mover among all other media marketing solution providers in India. It just not the advertising department!

Arunabh Das Sharma, Executive Director & President Response, got Rs 2.92 crore. Nandan Srinath, Director - Response, got Rs 2.02 crore.  R Sundar, Director - Response, got Rs  1.84 crore. C R Srinivasan, Director - Response, got Rs 1.29 crore. Ranjeet Kate, Director - Response, got Rs 1.17 crore.

Indira Diesh, Vice President - Response, got Rs 72.80 lakh. C G Varughase, Vice President - Response, got Rs 70.39 lakh. Teena Singh, Vice President - Response, got Rs 66.42 lakh. Jnan Prakash Dsouza, Vice President - Response, got Rs 62.01 lakh.

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

Finances:

This section has been deliberately kept for the last. For those interested in how BCCL manages its finances, I am giving you a simple snapshot. BCCL's assets stood at Rs 8750.81 crore at the end of FY'13 compared to Rs 7758.72 crore in FY'12 end.

The Rs 8750.81 crore assets comprise Rs 2,393.67 crore total current assets and Rs 6,357.14 total non-current assets.

Non-current investments: Let us also look at the list of companies where BCCL, publisher of ToI and ET among others, holds shares. Some of these investments would clearly be via  private treaties.

At the end of March 31, 2013, the list of companies where BCCL held equity stakes was Aksh Optifibre Ltd., Allied Digital Services Ltd., Aqua Logistics Ltd., Austral Coke & Projects Ltd., Avesthagen, Bang Overseas Ltd., Bhagyanagar India Ltd., Birla Cotsyn India Ltd., Birla Pacific Medspa Ltd., Birla Power Solutions Ltd., Bloom Dekor Ltd., Bombay Stock Exchange Ltd., Celebrity Fashions Ltd., Coffee day Resorts Pvt. Ltd., Eco Recycling Ltd., Eveready Industries India Ltd., Flawless Diamond (India) Ltd., Fortis Healthcare Ltd., Future Markets Networks Ltd.(Agre Developers Ltd.), Future Venture India Ltd, Gitanjali Gems Ltd., GMR Infrastructure Ltd., GSS America Infotech Ltd., GTL Infrastructure Ltd., Gujarat NRE Coke Ltd., Himalaya International Ltd., Housing Development and Infrastructure Ltd., ICICI Bank Ltd., Indian Terrain Fashions Ltd., IOL Netcom Ltd., IRB Infrastructure Developers Ltd., Jaiprakash Power Ventures Ltd., Jagran Prakashan Ltd., Jaypee Infratech Ltd., JVL Agro Industries Ltd., Karuturi Global Ltd., Kingfisher Airlines Ltd., KSL & Industries Ltd., Lok Housing & Constructions Ltd., Marg Ltd., Micro Technologies (India) Ltd., (India) Ltd., Multi Commodity Exchange of India Ltd., MVL Industries Ltd., MVL Ltd., Net 4 India Ltd., Next Mediaworks Ltd.(Midday Multimedia Ltd.), NIIT Ltd., NIIT Technologies Ltd., OK Play India Ltd, Pantaloon Retail (India), Provogue (India) Ltd, Pyramid Saimira Theatre Ltd., Raj Oil Mills Ltd., Ritesh Properties & Industries Ltd., Sahara One Media & Entertainment Ltd., Sobha Developers Ltd., SQL Star International Ltd., SRS Ltd., Sujana Universal Industries Ltd., Teledata Informatics Ltd., Teledata Marine Solutions Ltd., Teledata Technologies Solutions Ltd., The Sandesh Ltd., Thomas Scott Ltd., Timbor Home Ltd., Today's Writing Products Ltd., Videocon Industries Ltd, Zicom Electronic Security Systems Ltd., Press Trust of India Ltd. and United News of India Ltd, among numerous others.

Shareholding:

Shareholders who hold more than 5 per cent equity of BCCL are Bharat Nidhi Limited (18.02 per cent), Ashoka Viniyoga Limited (5.96%), Camac Commercial Co. Limited (9.75%), Sanmati Properties Limited (24.41%), Arth Udyog Limited (9.31%), PNB Finance & Industries Limited (13.3%), Jacaranda Corporate Services Limited (9.29%) and TM Investments Limited (8.93%). These entities hold 98.97 per cent of BCCL.

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

Would try to write a post on FY14 BCCL performance soon.

Disclaimer: I worked for The Times of India at Chennai for a year in 2008-09 when the global financial crisis, triggered by Lehman Brothers, hit Indian shores hard.

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

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.

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

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.

'Diggy-gate' and the failure of media

By Kumar Shankar Roy

There's an old saying: Raise no more devils than you can lay down. Indian media has raised one too many.

67-year old Congress leader Digvijaya Singh's candid pictures with TV anchor Amrita Rai have given the 'news-hungry' sections of some media persons a sitting duck, as they say. It could never have been so easier. Rabid readers and the oh-so sacrosanct 'reader interest' has trumped decency and common sense once again. If it sells, it must be news. Its a sorry state of affairs that am afraid we have created.

Lies, Deceit, Propaganda...then comes sex. Lok Sabha elections, which saw the seventh phase completing today, has now come the full circle. 'Diggy-gate' was the proverbial cherry on the top for media wanting to break news (never mind if some hearts are also broken). The elections started on a sombre note with development being the plank but now, just like always, has been reduced to a circus -- thanks to media.

People who support this type of journalism where the privacy of individuals, one being in full glare of public life and the other who brings others into public life, stands violated by all counts, have given me many what-they-say are "solid" reasons. My advice to them -- Get a life!

Digvijaya Singh, who has earlier been ridiculed for gaffes and no stranger to controversies, hasn't done any crime this time round to my mind. As he admitted on Twitter, he possibly loves this woman and wants to have a stable relationship. The only possible discomfort could be his that the 'news' of his relationship comes within months after his wife, suffering from cancer, passed away. But still, its his life and he has the right to live it in a way that is not deemed illegal.

The lady in question, along with her husband, has apparently filed for a mutual consent divorce.

The problem is righteous people and those priding themselves on high moral grounds think they are superior. They will tell you how this relationship is possibly illegal as the lady is not divorced.

I want all of you who are reading this blog to step back from all these things. Let me tell you why I feel this entire episode reeks of failure of our media to dissect news from cheap sensationalism -- yellow journalism as they call it.

As journalists, We are taught and eventually trained to separate the wheat from the chaff. Its what we aspire to do everyday. In this case, however, that has not happened.

I will not go into the details of the publication which gave great prominence to this purported pictures that were floating around social media apparently on Tuesday. The publication, which is trying to become a mainline and aspires to champion real causes, is unimportant.

1. The 'scoop': When a paper, which wants to be taken seriously, publishes private photos of a politician, its the lowest level a paper can stoop to. What if next some people publish private pictures of the editor or circulate audio tapes of private conversations he/she had with someone they are attracted or in a relationship to?

The time has come to define news in the 21st century.

The old and stupid way of saying "when a dog bites a man that's not news and when a man bites a dog that's news" is outdated as a dinosaur. Media has to respect people and the lives they lead. When social media is abuzz with private pictures of any person, be it a politician, film-star or even a porn star, it is a "right" to exercise control/ignore moronic urge to publish them.

The media enjoys this right because those who have bestowed them to the media feel we are worth of it. If not exercised properly, the day may not be far that the "right" could be under scanner and eventually taken away.

2. The follow-up: If a paper has violated the privacy of an individual, its competitors cannot simply claim to be "just doing follow-ups" and print everything a day later with greater dose of 'masala'. A specific instance of failure then becomes collective failure.

When an editor is hauled up by police authorities and faces the risk of being jailed by corporate interests, the flag-bearers of journalism issue statements. However, they are conspicuous by their silence on matters such as this. Not even a word. Its as if that when politicians are targets of low-level journalism (read sensationalism), "we" are okay with it.

A video, sets of private pictures or libelous allegations -- if the target is a politician, especially someone who has a history of being lambasted by all and the sundry -- we are okay. This simply cannot go on. There has to be a stop and the time is now.

3. Phantom reader: Lastly, journalists cannot claim to dish out crap and invade people's lives by simply saying its "reader interest". As a newspaper reader or a TV viewer, have you ever come across a reader/viewer survey asking you/us about what we really want to see? My guess is as good as yours. Never.

Powerful journalists (read racketeers) choose what "they" want to carry and their ultimate defense is "reader interest". The social media is full of sane readers/viewers who have taken and will continue to take strong objection to vile methods practiced by some media outlets. Those real views, however, never get due coverage. Only those, preferably jokes and 'smart' one-liners, are cramped together and again "sold" as news.

All this begets a simple question, the answer for which is probably known. Traditional media has failed itself. In its urge to revitalize itself with new-found zealousness/reader interest, it is publishing crap, shit and poop day after day.

The reader is not your wife. Respect and you will get respect.

All readers of this post are free to criticize my views, as always. I will publish them all. Do drop a line and share this post on your networks if there is even an iota of something you like. Conversely, share even if you don't like so that I get a barrage of notifications to correct myself :)

Adios. Till the next time.

Image courtesy: 1. http://images.sodahead.com/polls/002787187/1923255931_privacy_xlarge.jpeg
                         2. https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjg1FHwfVuTzj3t9sHTXKRelWlJlmHA9620JJ7NSlSyS5DWbQbp8hEiNCFXvtdTYi_CJod20shvPBg01Wa4lWLTAcSBNQIQbulJWtXu3pLl5j2AeTIQnXChyphenhyphenX9wMAKWH-M-X4pp7a_9G60F/s1600/a+media+fail.png
                         3. https://www.mediabistro.com/agencyspy/files/original/PressHat3_2.jpg
                         4. http://cbpr.me/blog/wp-content/uploads/2012/02/Pitching-to-Journalists.jpg
                         5. http://cdn2.business2community.com/wp-content/uploads/2012/08/social-media.jpg
                         6. http://media.king5.com/images/CRIME_DIME_Logo470.jpg