1. Indian CEO Salaries Have Outpaced Performance in Last 5 Years
The growth in salaries of chief executives (CEOs) in the top 500 Indian companies has outpaced performance in the past five years, according to a IiAS study on executive remuneration.
The number of executives getting paid over Rs10 crore has increased to 123, a 16% increase in just the past year. High CEO salaries are seen across the top 500 companies – and is not restricted to companies of size or those showcasing performance.
Nomination and Remuneration Committees (NRC) need to guard against this, especially at a time when executive pay is becoming a pivotal theme in the corporate governance debate. They must devise pay arrangements with well-defined performance metrics and claw-back mechanisms, and make transparent disclosures that help stakeholders understand the remuneration payouts.
If NRCs are not judicious about the level of CEO remuneration, boards may well face the ire of employees as well as greater investor scrutiny.
(Source: Livemint)
2. Ola in Talks to Buy Ridlr in Bid to Improve Navigation Technology
Cab hailing firm Ola is in talks to buy transportation app Ridlr, as the company seeks to improve its navigation technology and potentially expand the range of its services, two people familiar with the matter said.
Mint couldn’t ascertain the proposed price of the Ridlr acquisition, but the two people cited above said it will be a distress sale. They spoke on the condition of anonymity.
Ridlr (Birds Eye Systems Pvt. Ltd) last raised capital in July 2016 when Times Internet, Matrix Partners – which is also a key investor in Ola – and Qualcomm Ventures invested $6 million into the company.
The company provides data on bus and train routes and prices in 19 cities and allows users to book tickets for public transportation services. It also provides real-time traffic information. Ridlr’s acquisition will help Ola improve its navigation technology and could see the company add intracity bus and train bookings.
(Source: Livemint)
3. Hiranandani Family to Invest Rs 3,500 Crore in Oil and Gas Business
Niranjan Hiranandani’s family is investing around Rs 3,500 crore to build liquified natural gas (LNG) terminals in Maharashtra and West Bengal, in a diversification for the Mumbai developer who built the iconic 250-acre Hiranandani Gardens township in suburban Powai.
Led by Darshan Hiranandani, Niranjan’s son, H-Energy (formerly known as Hiranandani Energy) expects to start commercial operation of its first LNG terminal at Jaigarh in Maharashtra by October. The Hiranandanis are spending around Rs 1,700 crore in setting up the terminal and laying down a 60 km pipeline from Jaigarh to Dabhol that is expected to be ready by May 2018.
“It is a big diversification of the group. If it succeeds in the way he (Darshan) plans to do, in five years’ time, he will be bigger than me in terms of volume of turnover at least,” Niranjan Hiranandani said in an interview.
The energy venture operates as a subsidiary of Niranjan’s realty firm Hiranandani Communities, which primarily focuses on building large townships across Maharashtra.
(Source: Livemint)
4. ONGC May Buy out Gail in Gujarat's Dahej Petrochemical Project
State-owned Oil and Natural Gas Corp (ONGC) may buy out gas utility GAIL India Ltd in its Dahej mega petrochemical project in Gujarat to take full control of the recently commissioned plant.
GAIL had in 2008 picked up 19 percent stake in ONGC Petro-additions Ltd (OPaL), which was then building the mega petrochemical complex at Dahej in Gujarat.
But the project, which started in 2006, faced major cost and time overruns, which forced GAIL to restrict its equity contribution to the original Rs 9.96 billion. This investment in the expanded project cost meant that the gas utility's stake dropped first to 17 percent, then to 15.5 percent and now about 9 percent, sources privy to the development said.
"It doesn't make any business sense to hold such a small percentage stake and it is best that ONGC buys out GAIL in the project," they said.
The 1.1 million tonnes plant, which at the time of conception was projected to cost Rs 124.4 billion, got completed only last year for about Rs 300 billion.
(Source: PTI)
5. Higher Recruitment & Better Compensation Expected This Year: Survey
With recruitment seeing a steady rise in the last quarter of the preceding year, the recruitment market appears to be well on its way to recovering from the recession it faced in the first half of 2017.
This was noted by Wisdomjobs.com, the online recruitment and career solutions portal, in its report Hiring Pattern and Compensation Analysis in 2018.
“With the industry managing to ride out the impacts of demonetisation, the revision in H-1B regulations and the implementation of GST, the sentiments are positive with respect to hiring activity in 2018. Sectors like agriculture, education and healthcare, which saw healthy hiring trends in 2017, are expected to continue growing steadily,” the report said.
It added that as companies try to retain existing talent, they will invest more on skill development, upskilling and training.
The key findings are that around 60 percent of the companies surveyed said they plan to hire in significant numbers this year; 30 percent companies said they will be recruiting with a specific intention of countering the threat from start-ups in their industry; and 52 percent companies said they will hire majorly from metro and tier-1 cities.
Also, 58 percent companies surveyed plan to invest up to 10 percent of their HR budgets on skill development and training of existing employees, while 10 percent plan on investing more than 20 percent of their budgets on the same.
Nearly 60 percent companies said they are looking at hiring more women this year.
Wisdomjobs.com said it surveyed 140 companies and 350 recruiters operating in 10 sectors – IT, retail, hospitality, FMCG, healthcare, automobiles, infrastructure, education, ITeS and BFSI – to understand their hiring intentions.
The cities covered are Hyderabad, Bangalore, Mumbai, Chennai, Pune, Delhi, Kolkata and Ahmedabad.
(Source: Financial Express)
6. Telecom Sector to Create 10 Mn Jobs in Next Five Years: Skilling Council
The telecom industry, which has been been witnessing job losses due to consolidation, is expected to create over 10 million employment opportunities in the next five years, as per the skill development body for the sector.
"There are 4 million people employed in the telecom sector and by the end of five years, 14.3 million people will be employed in telecom as well as telecom manufacturing," Telecom Sector Skill Council (TSSC) CEO S P Kochhar said in an interview.
According to a CIEL HR report, since last year the telecom sector has already lost around 40,000 jobs and the trend is likely to continue for the next six-nine months, with the total figure expected to reach 80,000-90,000.
Kochhar said TSSC, under the National Skill Development Corporation, expects major demand for employment to come from emerging technologies like machine-to-machine communications, followed by telecom manufacturing, infrastructure and services companies.
(Source: PTI)
7. GST: Firms Fear Income Tax Dispute over Input Tax Credits
Indian companies fear that input tax credit claimed for GST paid on raw materials may be disputed by tax officials later and are considering setting aside funds to cover risks arising from rejection of their claims.
Experts say there is no guarantee that the input tax credit and transitional credit (accrued under the earlier tax system) claimed by the companies will be approved when it is scrutinized by tax authorities at the end of the fiscal year.
With key features of the goods and services tax (GST)—such as matching of invoices—yet to be implemented, the tax is now based on a self-declaration mechanism. Companies are availing provisional input tax credit until the GST Council brings in the invoice-matching process.
“Since provisional credit has been claimed, companies will have to review and audit credit balances, consider provisioning and make sure credit balances are appropriate, given system matching has not yet been implemented,” said Archit Gupta, chief executive officer at online tax-filing portal Cleartax.
“Also, if returns are not filed by suppliers, it may lead to credit being disallowed at the time of matching, whenever it takes place or when a new return filing procedure is in place,” said Gupta.
(Source: Livemint)
8. Tanishq Will Gain from Churn in Jewellery Sector, Says Titan’s Bhaskar Bhat
With scams and frauds tainting jewellers, Titan Co Ltd believes the time is just right for its Tanishq brand to burnish its clean image, scoop up market share and boost overall growth.
The watches and accessories firm is planning to open 44 new Tanishq stores in 2018-19, marking one of its fastest expansion plans to date for the brand. Titan sells a majority of its jewellery under its Tanishq brand of stores, its largest revenue earner, whose footprint stood at 240 stores as of February.
“When there is suspicion, the industry suffers. Titan will benefit because the impact on consumer sentiment is they want to go to a safe haven, as in a safe place to buy, like Tanishq. They want to buy clean gold rather than buy gold in cash,” Titan’s managing director Bhaskar Bhat said in an interview.
(Source: Livemint)
9. Upstarts Are Swiping Business from Visa and Mastercard in India
Global card companies like Visa Inc and Mastercard Inc are losing market share to upstarts in the world’s most innovative payments market – India.
Transactions through India’s homegrown Unified Payments Interface – which allows mobile apps run by retailers, airlines and other firms to take payment directly from bank accounts – reached almost half the value of debit and credit cards swiped at stores last month, central bank data show.
The surge in UPI transactions has taken place since 2016 when the interface was set up by an umbrella organization of Indian banks. Mastercard, in contrast, has built up its business in India over three decades.
“The introduction of UPI in August 2016 led to the creation of a wealth of new innovative payment solutions, and the adoption rates of UPI payments are truly spectacular,” US-based Fidelity National Information Services Inc. said in a December 2017 report. UPI “opens up access to real-time by allowing payments to be directly integrated into external business applications,” it said.
India’s payments system was alone among more than 40 countries tracked by Fidelity National to gain a top score of five for innovation and customer value. China’s Internet Banking Payment System scored two and Kenya’s PesaLink scored four. Criteria included round-the-clock availability, speed of settlement, and level of government or regulator support.
(Source: Bloomberg)
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