Outlook_Money_Augest_2011

5/9/2018 Outlook_Money_Augest_2011 - slidepdf.com

http://slidepdf.com/reader/full/outlookmoneyaugest2011 1/76

SHOU'LD ¥OU DIG FOIR MINING ST'OCKS? 9



D E B T

'C R lS IL M u lu a l F u nc llW l k : Th e c o m p o S i 1 B p e d a m a l l c e ! o f l D S P B l a c k R o c k B a la n c e d fu n d i i s ' V e r y G o o d p e r f o r m a n o e ' p e t f o r m a n o e i n ! h e, O p e n E n d C l ll ls is le n t E J a 1 a n o e d c a t e g o r y , M d r a n k s w i t h i n T o p 1 0 ' p e r c e n l i l e

o f ! h e l 1 4 ~ r . m ~ e d in t h i s c a le g ll lY , T h e C I i 1 e r i I , u se d in C O O l p u l l n g ! l l e C R _ lS fL C om p os i!e P e do nn an oe R a nk a re S I l p e r i o r l R e n s I l l S c o r e , b a s e d O ~ N A V s M r lila 5 - y e a l i p e r o o e r ! C I e d M a r 3 1 , r o u , S e d : o r a I

0 0 f 1 C 8 I I 1 r a t i o n , C o m p a n y C I l I 1 O e o ' 1 t a l l o a n d U q ) l ld iI y o f I t !e , s C h e m e , T he m e t l' lc ld o !o g y d oe s n o l t ak e 1 1 1 0a c c o u n t , Ih e e n t r y a n d sJt l o a d s I e I I i e d by'ihe s c h e m e . ihel o ru s l L M u tu a l f ;W 1 d R a n k is n o i lH l ic a ti o n o ll ll e ,

p e I 'f tI /I Il a tl c e lt la t c a n I le ~ f r om 1 he s m em e in fu I! l r e. R a nk in g Sau t e e : C R IS IL F U l1 d Se IV iC e S , C R iS IL L im l ! e d . O S , B l a c l ! R o c k B a I a t I c e d I fu n e ! ( D S P E lR B a IF ) i s a i l l C p e i l , e n d e d l b a l a n C e d S c h e m e , s e e k i n g

1 0 g e r e r a l a Iorgtem c a p i t a l ~ p l 1 ! C i a l i !l l 'l l in d Q l r r e n t i n I: :o m e , f r om a p o r tk ll io c o n s li lu l ed o f e q u it y a n d l e q u it y r e l a t e d s e O J r it ie s a s w e l l a s f i x e d I nc c m e s e cu r i1 ie s . (d e bI a n d m o n e y nwke I s e c u m e s ) . ,but A l l o c a t i o n :

E q u it y ,& e q u il ¥ r e l a t e d s ec u rr ne s ,: 6 5 % - 75 % . , f i x e d i no o m e s e c ur it ie s , ( D e b l5 e C lJ li 1J e s1 S e c u r i ! i s e d d e b ! & I M O n e y m a r k e t s ec u r ff i e s) : 2 5 % - 3 5 % . F aa tu ra s. Mlnlmwn I rms tmlnt : R s . 5 0 0 0 1 - . Enlryload: - N I L , . E x i t

b a d : J -t ld i n s P e r I o d < 1 2 m a n l N : I ~ H o I c l l n g I P e l i o d > = c 1 2 m o o l h s : N I L S l J t u t o , r y D t t I I I $ : I l S P I B I ; , l r ; k R Q C k M u tu a l F u n d ' I Q S s e t u p , S S < l T r u S t a n d t .e ~ ~ a r e D S f l l I D l K O H o l d i n g s I'vllll:l, ,& D S P

H M K H o ld i 9 1 M L ld l ( 1 X I I l e c E v e I y ) a n d B la c k R od t I l t C . ( C c r r b i n e d r ~ I 8 S I r ic Ie <I I DR s .

llakh). lNaIee: D S P Blac i lRodt l i ru s te e C o m p a n y P-. l U ti . t n ve st m t n ll l h na g . . : D S P B l a c k R o c k t nW s t m e n t M a n I9 l£ S ,

M L Id , R _ la kF IC '! o rs : IMu lua l fund I , O k e ACU11 t I . . I l rrmtmenl l , all l ub j o c t to m a rk e t a _ nd lo t h e r lila a nd d IG it " " b e 110' IAlI I ' I I ICI tN t tile ~ um t 1 1 o b je c1 lm w il l 1 10ad l lmd.A i w i t h a n yI n 'IH tm tn ti !n u cu ri tl n , d ie IMAVof Un it s l uued l undarth.11 SoOI,.1I I Ian go up or down d e pe n dI ng o n lflii f lc lO II Iln d fD l'C lll fil df lll l , ap lt ll rnad! i t l . Past p e r f o I m a n c s o f th e sponsor lAMC/mutuaJ l u n d

d o e s n o l M c a l i ll l le l u l l w p e t I ' o r l l l l l l ' l O O o I th e S I : Il e I o o , L n v e s I D r s l iM h e S d 1 e m e a re n O l i b e i n g dered a J u a r a n l e e l l o r ,a s s u re d r a te o f lr ll ll lm . E a c h S c I l e m e I 1 ' 1 a n is req_1o ha W (i ) I " n in u n 2 0 i n v e st o rs an d 0 0n o s i n s l e , m e s l l l r h o lc I in g > 2 s % c fo : rp u s . t f l l 1 e a f O r es a id p o in ' e il is n o t f u l f d ~ 1 v i i 1 h i n ! h e p r e s c r i b e d l t i m e , th e S c I l e m e J P l a n c c n c e m e d w i! be w o u n d u p a n d l in c a se o fl b re a d : 1lo 1 lh e a fo le s a id p o i n t Q Q a 1 ! h e en d o f!h e p t e S a i J J e d p e O O d , l h e i lM S l l lr ' h O I d l n g in e x c e s s o f : 2 5 % 0 I 1 ! 1 8 c o r p u s w i! be l ! \ !deemed a s p E l f S E B I I P o Ik ! e li n e & I IS P B R B a I I' l i t h e IIIm8 o U I l e S d 1 am & a n d d D H n o t I n I iny m a n n e r t l l d i c a f a Ifill q u l l l t y ,o f

thlSCl' IImf,1ts Mu.. p ! ' O i I I p e c I I oll1iluml. F a ' s c h e m e s , ll !I C ff ic lr is k fa d o rs , I p le a s e r e fe r ! h e ' S I D . F a ' I Il O I8 d e l a i l s , l p l e i s a re(e( II'e K e y i 1 f o r m a : l i O O M e m o n In du m c um A p p l i c a t i o n F O I I l l S . wtich a r e a v a : l l I b : e o n

Ih e w e b s i t e , W M ' I .d s p t la d u ' o c l lo o r n , an d a t 1 1 1 8 S C s It l i s lr i b u tl n . P lu M r u d th " S c h e m a l r n fo m la tl o n D o cu m e n t a n d S tm m e n t o f A d d lt l o n a l i n f o m ll l l o n c m f u ll y I b I f D n t I hm t lng ,< ~worldl'\ag~



11 '0AUGUST 2,011V OLUM E 1 0

ISSUE 1 1 6

COVERSTORYSOUMIK~AR

RU UPWARDLY MOBILE?

18From a mere style statement to an utter neoessity,the mobile phone has come a long way. Now, you

can u se your cell phone to not only make utility billpayments or transfer funds, but also to trade in thestockmarket, buy mutual funds, and so on. But like

everything else involving technology, there are in-herent pitfalls and fraud risks..In this cover story, welook at what you can do with your mobile. Plus,the

precautions you need to take to ensure thatsomeone doesn't pull a fast one on you. And, ofcourse, you can continue making those calls and

sendinq texts as you always have.

eHU~INDER SINGH

IN:SURANCE

INTERVIEW:JAYANTDUA

34With Ulips losing

steam, questionsare being raised

a bo u t th e ir f ea sib il ity.

J ava rrt D ua , C E O,

B ir la Su n L ife In su ra nc e

Company, dispels

s u c h worries.

Co ve r De sign & Im aging '; M AN O'J lT DA TTA

H EA D O FF :I: CE IIB ·1 0, S J. E n cla ~e . N ew D elh i 1 10 0 29 ; T el: (0 11 ) 4 68 67 20 0. 2 61 00 72 2; F ax : ( 01 1 ) 26 19 1'1 20 O TH ER O F: FIC ES B an ga lo re : (0 80 )2 55 82 80 ~

F ax : (0 80 ) 2 55 32 81 0; K oik ats : (0 33 ) '1 .0 03 50 12 . F ax: ( 03 3)2 28 23 59 3; C he nn ai: ( 04 4) 28582251/52, F a x: 2 85 82 25 0; H yc le ra b ad : ( 04 0) 2 33 71 1 44 , F a x: (OdO) 23375676 ;

M u mb al: ( 02 2) 6 7.3 82 22 2. F ax :: (0 22 ) 6 73 82 23 3. P rin te d a nd p ub lis he d b y V in ay ak A gg arw al o n b eh alf o f O utlo ok P ub lis hin g [In dia ) Pvt L td . E d it or : U cl ay a n R a y.

P I'in te ei a t rn fo me dia 1 8 L td , !'J ot N o.3 , Se cto r 7 , Off S ia n P an ve l R oa d, N eru l N avi M um ba i-4 007 0B . a nd p ub lis he d fro m A B-1 0 Sa fe la ~u ng E nc la ve , N ew De lh i 1 1002 9

For Subscnp ti on queri es , p lease 9 li i3JI : YOllrbelplloe@QlltIQpkmoney(pm

Pub l i shed to r th e fo rtn ig ht o f J u l l ' 2 7-A ug us t 1 0.2 01 1. O utlo ok M on ey d oe s n ot a cc ep t re sp on sib ility lo r a ny in ve stm en t d ec is io n ta ke n by re ad ers on th e b as is o f

in fo rm atio n p ro vid ed h ere in . Th e o bje ctive is to k ee p re ad ers b ette r in fo rm ed a nd h elp th em d ec id e fo r fh em se lve s,

< ~worldl'\ag~ wwwoutlookmonevccm • 1:01AUGUST 2011 • OUTLOO:K MO:NEY t



C o n t e n t s

A. P IM BHAKAR RAO

JOBS &CAREERS

24 THE RIGHTSHOT

In the t irs t of the quarterly surveys

by H R consultancy rna Iol randstad,

shared e x c lu s iv e ly w i t h Ou tl oo k Mon e y.

we present a view of the compensation

trends in the pharmaceutical industry.

'ENTERPRISE

28 GETTING STARTED

The second instalment in our series

with tax, auditing and oonsultancy

f in n D e l o it te on self-employment. looks

at the approvals for starting a firm.

30 GREENTECHNOLOGY

Wi t h the wo r l d grappling with g l oba l

warming. a technology that does good,

pg 440LM50

On the back of the yellow metal's

strongestraUy in 32 years, gold funds

register good returns despite a strug-gllng Nifty and Senscx, Fund 'Watch:

Birla Sun Life Monthly Income ..

while earning profits, is a smart option.

IINIVESTING

38MININ BLUES

Mining companies are facing the heat

as a group o f ministers r e c o mm e n d s

that they share their profits with thedisplaced local population.

4' AVANT GARDEThe slowing of the world economy

means that Indian consumers wil l

continue to attract euro, dollars and

yen, says Mohit Satyanand.

42 DOESSIZE MATTER?

r e s common perception that more

a sse ts a fu nd m a n age s, th e h igh er

returns it gives ..But is it always true?

REAL ESTATE

o LESSONS FRO OIDA

Thousands of people are .in the danger

of losing their lifetime savings f o l l ow -

ing the land dispute in Greater l -orda

The lessons to [earn from the episode.

PLANNIING&4 GLOBAL I DIANA look at the major routes by which

NRls can invest in Indian enterprises

and the related restrictions,

WEALTH A AGE ENT

vl/hy you need. to change your ap-

proach to wealth management over

time t o . make your money grow.

8PORTFOLIO MAKEOVER

In the second Instalment of our new

series, we give a makeover to the

mutual fund, stock and insurance

portfolio. o f Pnne-based sales profes-

sional Sandeep Rawal,

HOW TO BUY A TABLET

Tablets are the latest addtctton m the

w o rld o f technology. The what, w h y

and how of this new sensation.

13Macro Money:

Global uncertainty

18Queries.

33The Decoder: Future

Generali's Birna Advantage

40 Stock Pi:ck: Bosch

48 F&O: Gold futures

47 Fixed Income:

FDvs

M IS

48 Alert Investor:

Third-party insurance

IREGIULARS

Editor's Note

• Letters

• Newsroll.: Cashless

claim impasse over; Al-

ternate banking! channels

gain prominence; EPFO's

new fund manag:ers; Com-

modity Watch; Street Talk

"".... _,.....Ul'LOOK MONEY. 1.0 AUGUST 2011 • wwwoutlookrnonevcorn,~" womMirgs

2 My Plan: Ujjwal Gaurav

60 Interiors: Baby's room82TailLight: Renault's

newSUV

84 Leisure 360:

Michael Lewis' The Big

Short: A True Story

&8 For What It's Worth

.8 Fortniight Figures

72 Sunny's MOllley:

Mobile Migraine



INDIA'S NO 1PERSONAL FINANCE MAGA.ZINE O'N THE WEB

CHECKOUT

- - - -~.- - -----.. .- - . .

Subscribe toOutlook Money's

weekly

newsletter at

to stay updated

about the latest con-tents of forthcomingissues of Outlook

Money and Outlook

Money Digital, andsubscription offers

Lb~: : :~===: : : : : :~==d=-~~~=Jnd other hot deals.

INIDIA!'SI F I IRSTPERSO'NAL

FINANCEeWEEKLY

LATEST ISSUE 22 JULY 2011To stay on top of your finances visit

http://digital.outlookmoney.,eom and clickon 'subscrlbe' for a free subscription

LASIWEEKON 10 IGITA IL

Gold for All Seasons A ne w s tu d y m ad e p u b lic la s t w e e k

s ugge sts g re ate r a llo c atio n to go ld in a ll in fla tio n s ce na rio s

Boost Y ou r C :r ed it Score You r c re d it s co re w ill d ete rm in e

fu tu re b orrow in g s . He nc e fo rth , p ro te ct y ou r s co re

.AIMixed Bag for I T ' Giants In fo s ys c on tin u e s to s tru gg Ie ;

les d ec lin es too , b ut s till l p os ts a bove -a ve ra ge ga in s

Go for Your Worth Sa la ry n ego tia tio n is on e o f th e tr ic kie st

m om en ts in a n in te rvie w . Know h ow to s c o re th e re

Useand Forget V irtu a l c a rd s can h elp y ou m ake s e cu re d

online p aym en ts ..R ea d to know h ow

< ~wo~iI'lOOK MONEY.10 AUGUS12Q11 • wwwoutlcokmoneycom

l : E l f a c ebook

What: you saidTushar kulkarni: IIl ike the ne w initia-

tive . Th e ne w fo rm o f p rin t e d it io n is

v e ry r e fr e s h in g .

16J1u l y

Biswajit Saha: This is the best finan-

c ia l m a ga zin e a va ila b le .

16. !July

Biranchi Narayan, Panda: T ha nk s fo rb rin gin g ou t a lo ve ly e - w e e lk ly Outlook

Moneyed i l t i o n

12 Ju l y

Al11it KUl11arBurman: A n ew m ile -

s tone fo r Out look Mone y a nd it g e t's

m o re liq uid ity . C on gra ts !

1 2 J u ly

Winston Daniel: It h as b ee n a f a n -

ta stic jo urn ey fro m Intelligent I nves to r

to OLM-Digi ta. l . A ll om b e s t w is h e s fo r

th e e W e ek ly .

12Ju l y

JloinOutlook Moneyo:nFacebookLog in to F ac eb ook 8 i n d v is it h tt p :/ /

www . o u t l o o kmone y . c om / l F a c e b o o k /

p age . O r. s ea rc h 'O utloo k M o ne y'

in th e s e a rc h b a r. Tra c k u s to ge t a

s ne ak -p ee k in to u pc om in g is su es .

H ··9ave a query.J oin o ur individual g rou p s: c lic k onth e D ISCU SSIO N ta b, s ta rt a N lE W

TOP IC and p os t y ou r qu e ry a t

h t tp : / /www. facebook .com/o lm ind ia

Followu on TwitterLog in to y ou r Tw itte r a c c ou n t, c lic k

o n F IN ID P E OP LE a nd s ea rc h fo r

O utloo lk mon ey to vis it o u r p ro file on

Tw itte r. A lte rn ative ly , y ou c an ty pe

h t t p : / / tw iUe r . com/Ou t l oo kMoney in

y o u r b r ows e r ' s a d d r e s s ba r . Fo l low

u s to ge t d ailly n e ws u p da te s, lin ks toa rtic le s on ou r w eb site a n d u p da te s

o n o ur e ve nts a nd a ctiv itie s .

~ ht tp : / / twi t ter .com/Out lookMoney; h t t p : / /www: fa cebook . com/o lm ind ia

http://www.outlookmoney.com/lFacebook/

http://www.facebook.com/olmindia

http://twiuer.com/OutlookMoney

http://twitter.com/OutlookMoney;

http://twitter.com/OutlookMoney;

http://twiuer.com/OutlookMoney

http://www.facebook.com/olmindia

http://www.outlookmoney.com/lFacebook/



An investment yourwife will approve of!

S u n d a r amYou h ave ,always be lie ve d in th e po te n tia l o f e qlil ily in ve stm en ts.

B ufyo u h o ven lt be e n ab le to 'c o n vin c e yo u r w ife , w Il ,o a lw ays fa it f l la t

go l 'd w as ,a b e f le r in ve stm en t. , N ow yo u f la ve a n o ptio n th at wi l l ' k e ep

y o u b o tl-! h a pp yl

E qu ity P lu s *S u nd O liO m E qu ity P ,lu s. The f un d in ve st s p rim C l l1 il yin equity cm d up to

35% in d om estic Go ld ET Fs (a .m an ge '[m ded Fu n d s) , Im ak in g it a n

ir re sist ib le e qu it y f u nd w i tl li'l l g a 'l !d e n sh e e n I

Iinvestiing in E,quily and Gold ElFsA ll OplJlI-ell(J BqW!y 1 lCh6mtJ

• 'Plus- used In the s c!h em e n am e ' I. only Interms,ofDset allocation and riot In lenni ofnrtumlyleld. Su n d a rGm l ii qu i ty P l u s , ihe e qlJ ity p lu s g old fu n d

w hich e n su r e s th a t yo u r w ife

a n d yo u a re in l perfect

h an no nyl C alil lyo ur

in ve stm ;en t ad viso r o r d ia l

1800-4.25-11000" n o w .

S T A R T O N E T O D A Y ' !

'C a ll To l l F re e : 1 800~425 ·1 000S M S : S F U N D t o 5 6 7 6 7 A J I S e r v i 'c e P r o vid e rs , 0 4 4 - :2 8 5 7 8 7 0 0

E m a J l : s e n i ic e @ s u n d a r a m m u l u a ll .c o m w w w . s u n d a r a m m u t u a l. cc Q m

Scheme i n fl lrma li oo dOOJme l1 1(S ID ) an d apPIicati l ln f o rm s , ar e a v a il ab le a ll ho o ff ic e s, o fSundBr am .A s se tM an ag emoo~ ; it s d is ll ib u lo rs a n d a l.WI 'iW. sun da rammur ua l. 'a lm . F 'u n d I fa d l: N .I IM ' : Sund a ram .: Equ it yI Pi usf P l u , ' used In,Ule l ICheme , name l . o n l , l n Ief!M ofauet l l iocat lon an d nDtln ' termtofretumtx~ldl ; Typ e : A ll o p en -e n d 8q) Ji t' lS dl ame ; t ll l' 8S tme tl tO l! J S'C6 I! e :T os e ak c: a ,p it al r ac ia '~ o n ~ in ve s ti ng in GClI!ian d e q U i l y o f l l l a t e d I ns tr yme nt s f ts l! !d I n India B l1 d I n gqk l- ETF . A s s ai AlIOCI I ion: IEq)l i tyand l ! O : I u i I v r e 1 il 1Sd_ l os l rume l1 t s : ~5% - BS'l Io .Ga ld l _E if ( D p 1 ] S S ' t K : Miari tet): 1 5% - 35%. IlnCllllleand !M oney markei n s l l 1 J m e n t s , O%·2()%.D e d V 9 I i Y & E x o o s ! m l : 0%-50%. a v e , ! Sea ,S . S ec u ri ti , _ . "a s I n v e s t m e n , t s : ( 1%,35%. T 8 I ' I I I $ o f Offe r . N A V . 0 - l ions; G l ' O W t I l, D M d e i 1 d (P 'ul & R e , l lI lI eS tm e n l) . _ m lJImtment ~ , O O O a n dmulUp lesof~1 lhe reaf te r lrncaseofF f r s tl l' lV8Slmen lan tHoradd it lonSlpurchaseo l~an l j mul ti p le so l~1 Ihe lV l lf te r . SIP Iso~ ona mont ll lyand l I u a m r b a s i s . i he m ' Iml Jl Tlm oon tI s~ fo r MOIl th lyO",t Ionanf 750 f or Qua rt er lY Opl lon. Avai lable i llVe s lmen l d a t e s for m o n t h l y an d quarterly'ODIion fo r S IP a re 1 .,7, 1 4,2 0 a nd 25 , I f a n I nv es !m e lr t d ay u nd er S IP Is n ot a b u sime s s d a ~ . t h e i nv es lme nl w il l be~ oolhe n e x

b u si ne s s d a y. &ItLoad: I % i fr ed ee m ad w ith in 1 . 2 m o n t l !s f inm da te, o f, a ll oimeni . NAV pub li c a6oni s ai e ir e d empOOn w i ll b e8 li a il abj 'e onbus i nO I ls d ays . S C hI m e-S pe cI lk R lI 'k FlcIora: TI le p ri co o f g o ld is I n f t ' u e n c e d byseve ra l g , 1o I ia1an d l oc a l v ar ta b Ie s ~Th l! SS ll nd u d e 9 o b a l d em a nd s up p~ ! r e n d s , p u rc h as e sl sa le s by c o nl ra l b a n k s , d~ In bltnglng n e w m i n e s " on l in e mac ro -e i: « lom lc v ar i~OI l. g II 01 lO ll tl ca l f aC t o r s, s e a s o n aD t y J nd e m a n d; c I1 a r, -a s h 'l , d U W a M 1 a r t I I s , c u r r e n c y an d nqu l~.1 i h e s e v a ria b le s m a y h avt! a n Im ~ Oil lI1 e p lic es o f \ W i d an d lX l~u enUy 0II1 11 eN AV o f ih e S c h e m e , 10 Ih e e xI eI ll in ve st me nti s m a de ill gok l : - Ei l iF . E.TI r1 v e s fm e n t s ~ b e s ub ' e d . 1 : o r i s'ksof'1he under l yimg S c h e i ' n e i n c l u d i n g tracki I1g e l l O r ; Tile , e q U i t y ~o60 will be ,sub jed III marke risk price risk and 1 1 O I l . . c l i v e r s i f i c a t i o n , to , name a t a w . Ch~ in G overnment poncy in981*81 a n d c h a n g e s inbl l b e n e f i t s a p p l i c a b l e t o mUtua l f und s ~y i mJ l3 d t ho l f e t umsI I I rnves tOrS.Derivative exposut8R is1cM od alis~rmarke l f iqu l d i t yis 'kand b a s i s r iS~ .~B S S e c u r i t i e s InWls tmf lnt R i s k : C o u I 1 t r yrisk, cur re l )CY r i s k " ; , geo.poIiIk;al r isk , ~ega Ir e s1r i tt io n s and ~a l iiO li l c h a . . . ' - . raphy otl1er 1 f I a n Ind ia . GentraJ Ri l l! Fae t o !l : A u mutua l l unl s a_nd IS ICU .r lt fe s , Inveslln8l\ l1 aI I8 8Ub~ to ma.r l !e l r isks, an dt he rv c an IM i 11 0l J u a r an1 e9hat t l l e fu nd'II ob l9c t lvu w i l l D e ac h ~ . _ iii.S ch em e m ay go up o r d o w n depe ll d lng I ll !On H I. ,f ac: tO l' l, and f or c as i I f rec t Inglhesecur i1 lasm alke l lP l eaq I91d I t I I ,SIDII efo re illlYe stln ll~ P as tP llrfo rm an ce o fllle M u fiia J F un dll'n ve stm en l M a p on sc rd oe s n o t i nd ic a lB tI iI e fU lum p e rf urman c e o ll hl s S c hema . U nl !h o ld e ls in th e Sd leme a re n ot b e in g o ff il re d a n y Qua ra n il le d /a s su re dre turns . Su. IKI IJ 'I1 ! I IEI IUJ ty PlUS Is only th e nama $I f I t h e Sci1eme,md d o e S notJlI I l I lX mann er I nd rc at e e lt !ie ~ the l I u a l l t J ! a rth a Sc he ma ItIf ll li lm p i :OSp e c II 'o r r e tu r ns . JlI:aIutDry Dalal ls: M u tu ali F u nd :SUIIiAOmMtdFlmd ( T r u st l s p o nu r . S I Il ' I c Ia r am f inancelLlC!I. (lLia!l~i ty i limited 1 I I ~ l l l a k 1 i ) . I ' l I V t S t m . n t M I M g e c S i l n d a r a m A S s e l Ma~eme ntCOmpan yU d. T l' UJ lt II : s u nd a ramTr us te eCo rn p a! \~ 1 L1 lL

IFidelJis-SM-432B

SUND'ARAM'MUTUAL

UNEARTHING OPPORTUNITU:S

mailto:[email protected]




I Editor's NOlte I

(Udayan Ray)e d i t o r@ou t l o o kmon ey ; c om

h IIp:l/lwil t er ,c om /u d ay a n r ay

TrueMobile-ity

M y e ar lie st m em o ry a bo ut m o bile ph on e s is a c a r to on th at a ppe a re d in a

I ,e a d in g A m e r ic a n m aga zin e . I t sh o w ed a m an in a n o ve r c o a t a n d a h a t u sin g a

m o bile ph on e in th e m id dle o f m a ny o th er s im ila rly-a tt ir e d m e n, u sin g th eir

ph on es. T h e m a n sa ys, "G oo d thing th a t th is c am e a lo n g . o w Ia n w alk f o r

b lo ck s to ge th er w ith ou t a nybo dy th in kin g th at Im m a d, spe ak in g to m yse lf :"

M o b ile p ho n es h ave sin ce e sta blish e d aflrm p la ce in o ur l ive s. But, m o re im p or-

ta n t. th ey a r e c le ar ly se t to m a k e st il l d ee pe r in ro ad s I n to o ur l ive s. I nc lu de d in ,

th e n um e ro us a re as a r e o ur f in an ce s, T o d ay, m a n y pe op le a re d isc ove rin g th e

c on ve nie nc e o f f in an cia l tr a nsa ct io ns o ve r m o bile s. Expe ct t il ls to b e w id e ly pe r-

va sive in th e fu tu re wi t h pe op le m a k in g c ash t ra nsf e rs a nd c ash le ss pa ym e n ts,

b uy i ng and s ellin g f in a nc ia l in ve stm e n ts" u sin g m o b ile s to k e e p th e m s el ve su pd ate d o n f in an cia l in fo rm a tio n , th e sta tu s of th e ir in ve stm e n ts a nd o th er mat-

te rs. A n im p o rta nt c ata lyst ill th e sp re a d o f m o b ile m o ne y w o uld b e th e go ve rn -

m e n t's c u r re n t f in an cia l I r r c l u s ion pro gra m m e" w h e re o rga nise d f in an cia l se r-

vic es a re b e in g sp re ad a c ro ss th e c ou nt ry th ro ugh m o bile ph on es , a n e n d e a v o u r

th at w ill b e a ssiste d by th e a ssign in g o f a u niqu e td en tif l c atio n n um be r to e ve ry

In d ia n . N o n e o f u s c a n a f f o rd to rem a in o blivio us to th e c h an ge s th at m o bile

m o n e y is i n t r o d u c i n g to o u r live s, T h a t is w h y in th is issu e 's c ove r sto ry w e lo ok

a t th e type s o f f in an cia l tr a n sa c tio ns th at a re po ssib le o ve r th e m o bile ph on e a n d

h o w to d o it sa fe ly to m ak e th e m ost o u t o f th e d e vic e t ha t, till r ec en tly , w a s u se d

fo r j ust c om m u nic atin g (a n d m a ybe so m etim e s a s a f la sh ligh t a t a d ar k p la c e) ,

S t ay i ng in th e d ig ita l d om a in . d o c he ck o ut o ur re vam pe d w e bsite w w w .o ut-

l o o km o n e y . c om . A t th e m om en t . n o t o n ly c a n YOIl r e a d th e m aga zin e l ive o n o ursite . yo u c an a lso vis it it to re ad o ur la te st o ff e rin g. O u tlo ok M o ne y D ig ital (h t tp : / /

d lg ita l.o u tlo o km o n eyc o m ), I nd ia 's f ir st p erso n al f in an ce e -w c e ld y, thatprovides

yo u w ith e xc lu sive o n lin e pe rso na l f in an ce c on te nt f r e e e ve ry S atu rd ay m o rn -

in g. I n O utlo ok M o ne n D ig iw l yo u w il l f in d e xpe rts f ro m e ba y.

P ric e w ate rh o use C oo pe rs a nd rna fo i r an dsta d sh ar in g th eir vie w s a nd a nsw e r-

in g yo u r q ue st io n s in a ra n ge o f a re a s. W r ite in to u s to g ive yo ur fe e d ba c k a n d

su gge st io ns. T o s ta y u pd ate d, su bsc rib e to o ur w e ek ly n ew sle tte r by w r itm g in a t

e le tte r@ ou tlo ok m on ey;o om . T h e y sa y "m o ne y ta lk s' . W ith a ll th is a n d m o re w e

w ill h elp yo u m a ke it t a lk e ve n m o re , -

Our new

offerings(c lo c kw is e f rom

r ight)

a be t t e r- lo o k lnq

w e bs ite : th e

la te st issu e o f

O utlo o k M o n e y

Digi ta l a nd th is

issu e o f Ou t l ook

Mon ey , w ith th e

cover story all

h ow th e m ob ile

p h o n e can re-

s h a p e y ou r

f i n a n c e s

-- . . . . . . .-. . . . ~~..-.. . . . . . . - . . . . .-- - -- - --------

1 I 1 ' 1 I I I - _ - : - : . - --=--.r . . : . a • ~"'III'r-.. •

""....tOUJLOOKMONEY .10 AUGUST 2011 • www.outlookmonevccrn, ~" w or Ta 'M a gT



Availlable at: __ andl other NoktalOutJets I NEIKIA~lt I I :: I To1mow mOl'e a'bout ,our N:olda, Iregister' at ~~~~~~~~. ~.[J

Always InSis~all Originall NDkia l l i ld ia 'Warranty t,o sa f i eguard , against buying u s e d , I refurblshe,d Dr t ampe r e d phon es . t lokfa IMia Warranty I s a p ,p li ca b le , o n ly f ior ph o n e sim p o rt ed /m a n uf ac tu re d b y N o : l t ia , Ind ia I P v t . L t d . # F or os siS lo nce o n N akla' p ro ducts an d s er vice s, , al l N o k ia Ca re . A r i d SI O (a rie wh en ' d Iallin g fr om a G:5Hconnect ion .

< ~worldl'\ag~ 5252.2(H1



I Lett'ers I

Pu hpendra Parikh email

The five stocks handpicked by O u tlo o k M o n e y are very

impressive not only by the virtue of their debt-free status, but

also from the po:int o f their ability to grow businesses at morethan, at least, double the GDP in the last five years.

These stocks may not give stupendous returns, but their

robust businesses and fundamentals together with their

reasonable valuations warrant their inclusion in a discerning

investor's portfolio.

1 am sure that an investor with a moderate risk

appetite should include these stocks in their portfolio, because

of the market shares of these companies command in their

respective territories.

Stocks MatterAnkur Pathare, email

I wan t to c on gra tu la te th e

O utlo o K M o n ey te am fo r its

1 3 th Ann iv e rs a r y !

I h ave b e e n a n avid re ad er

fo r a long tim e now . I w ork

w ith a p riva te a ir line , and

re cogn is e th e Ta ct t h a t f rom

tim e to tim e w e ne e d to

re inve nt ou r p rod uc ts an d

fa cillita te ou r c us to me rs . Ilike th e ne w Ilook o f y ou r

magaz i ne .

How eve r, I fe el th at y ou

ne ed to c ove r th e Ind ian

s toc km ark et w ith m ore

d e ta ils a s it h a s b e e n th e

b igge s t g row th s to ry in th e

la s t f.e w years. Th ough y ou

p rovid e e xp erts ' vie ws an d

s ugg es t a p artic ula r s to ck

in th e S to ck P ick sec t ion ,

I p ers on ailly fe el th at m orec ove ra ge is r eq uir ed .

Second HomeBhargava M . R . , email,

In th e a rtio le a bou t

inve s ting on a s e c ond h om e

(The B e st fo r Your N ex t, 15

June) , I f ee l th a t one ne ed s

to cons id e r th e im pa o t o f

c h ange s p rop ose d in th e

Dire ct la x Co de (DTC) w h ile

m a kin g s uc h in ve stm e nts .

In th e d ra ft o f th e DTC,

INew Additions

Ram Goyell , em.ai lI would like to point out

that JCICI Pru Focus

Bluechtpis missing from

OLM 50.Also, I wou l d

suggest an overhaul o f

category-wise allocation

with separate columns

for large-cap and mid-

cap funds, You can also

start to cover one age-

group in every issue and

suggest a mutual fundand insurance portfolio

for that particular age-

group. For instance, fo r

age limit between 30-

35: these four funds +term plan of a certain

company + PublicProvident Fund.

The magazine is looking

good, but you should

allocate more pages to

queries from readers and

portfoliomakeover.

13 July 2011

c ap ita l ga ins ob ta ine d on

s uch inve stm en ts , w he n on e

dec i d e s to se l l o n e ' s se condh om e, b ec om e s ta xa ble

a s p er th e e xis tin g inc om e

ta x s la b ..A ls o, th e p re se nt

e xemp t i o n a va ila b le fo r

re in ve stm e nt o f s uc h g ain s

on a n ew re sid en tia l p ro pe rty

is w ith draw n. I w ond e r if

c ons id e ring th e s e it w ou ld b e

a d vis ab le to go fo r a s e c ondh om e a s 'in ve stm e nt', if on e's

h old in g tim e fra me is lim ite d

to 3-5 y ea rs .. M a yb e, y ou

c an w rite a n a rtic le h ellp in g

re ad ers figw e ou t th e im pa c t

th at th e D TC w iill h ave .

EOl lOR- : IN-CHIEF

V in od lV I eh taIPRESIO:ENT

M ah es hw el Pe ri

EDl laR

Udayan R ay

IDEPUTY E ID I ITO I IS

A b h iji t M i tr a, C li ff ord A lva re s

SENIOIIIEDITORS

P an ka j A n up Tappa, Sunil Dhawan

C'ONSUl liNG IEOI' l'ORS

M o hit S aty a n an d.

S wa mi S ata n S ha rm a

S EN IO R A SS IS TA NT E DIT O: RS

R a ie sh K um ar . T us ha r S riva sta va

SPEC' IA L CORRESPONDE INTS ·

Anagh Pa l , Kundan K isho re ,

Teena J am K au sh a l

I P R INC IPA l CO :~ R ESPON I) E NTS

K avy a l3 ala ji, K um ar G a uta m

SEN 1011CORRESPONOENliS

A sh w in i K um ar S ha rm a.

N ave en Ku ma r. P he ii Pha lphunan

COPYDESK

A bh ig ya n C ha nd ,

S i d d h a r t h a Sarma .(Deputy Copy Ed i to rs ) .

J o y i ta Cha tt e rj e e (SI. Sub·edi tor )

A 'RT

M a n oji t D at ta (Art Edi tor) ,M iro on B ora (A SS OC ia te A r t

Director ) .

S a ii C .S . ( Pr in c ip a l D e s ig n e r) ,Bhoomesh Dutt S ha rm a {S r.

D e si gn e r), V a ru n V a sh is h th a (C h ie f

o f Graph ic s )

PHOTOGRAPHY

Bhup i n de r S in gh , S ou mik K ar (C hie f

P h oto gra p he rs ), R .A . C h an d ro o

( Pr in c ip a l P h oto gr ap h er) . N ilo tp a lB aru ah , P I!y am D ha r, Vishal Koul (Sr.Photographe r s ) ,

TECHlfEAM

A nw ar A hm ed Kh an . H as an Ka zrn l,Mena v M i sh ra . R a m an A w as th i.

S ur aj W ad h w a

BUSIN iESS OFFICE

PRESIDENT

I nd ra nil R o y

ADVERTISEMENT

V I ICE I PR ESI IDENT Jo hn son D'silva

NORfH Ka il as h L oh a n i ( R e gi on a l

Manager ) , Vini ta Ramtek e ,

Abhishek Berry

WEST Mano j Nair (AG 'M) . Ra ke s h

N ig am . S uc hitra V aid ya ,D e ve s h S he tty

EAST M ou sh um i Ba ne rje e G h os h(GIV i )

SOUTH I a r o o n K um ar (R e g M g I),

P ra ve en K um ar, S un il R a juG E NI ER A L M A NA G ER Ka b ir K h at ta r(Corp)

CIRCULATION

V , ICE I PR ESI IDENT N ir aj R a w ll e y

N AT IO N'A L H EA DS · H me ns hu Pande y( BU Sin es s D eve lo pm e nt) , A le x

J o se p h ( R eta il )

GENIERAL MANAGER Arakia Raj,

B . S . Joha rASSISTANH~EIN ERAL MANAG ER

'Mukesh LakhanpalIO NA lS.A LE S M AN AG E RS An indya

Ba ne rje e (We st), G R am esh (So uth )

DEP II TY MANAGE .R Sh e kh a r S u va rn a

PRODUCTION & SYSTEM

SENIOR MANAGERS De s h ra j J a s w al ,S an ja y N a ra n g, Shekha r Pan dey

IDE' PUTYMAN AGER Trilok SinghR awa t

ADMINISTRAilON

SENIOILIMANAGER Ralendra KUFUP

< ~wolRNTLOOK M:ONIEY .10 AUGUST 2011, . ' www.ou t lookmoney . com

Propert.y Pri,cesArockia Rajasekha.r, email

I am a re gu la r re ad er

o f O utlo o k M o n ey. I am a

r es id e nt o f C oim b a to re ,

You ne ve r se em to cove r

C oim ba to re in : you r lis t o f

p ro pe rty p ric es in : For tn igh t

F ig ure s. I w on de r if peop l e

a re a wa re th at p rop erty

p r i ces ar e a ls o s k y r oc k e ti ng

in th is p art o f th e c oun try ,

~~~~~-~~~~~~-~~~~-~~: L e t t e r s m u s t b e a d d r e S S e d t o : :

: T h e E d i to r. Ou tl oo k Mone y , 8 th f lo o r, N A F E D :IBuilding, A sh ld m , N e w De lh i 110014

: l e t1e rs@ou l lookmoney ,co f fi

I P le a s e m e l/ t i o l1 y ou r f u ll n a m e 8 1 1 d

: r e s i d e nt i a l a d d r e s s .

~ - - - - - ~ - - - - - - - - - - - - - . - - .

~ h lt p :/ /l .w i tl er .c D m /O u ll oQ k MD n e y; h l lp : /I w ww . la c e b oo k. co m /o !m · nd i a

http://www.outlookmoney.com/




ACT liONThe International: Monetary Fund hastold Europe to take collective actionto contain the eurozone crisis andprevent a spil l lover from the affectedeconomies damaging the region.

e

GOCASHLESSATHO'SPITAILS AGAINIDeadlock over cashlessclaims over, hospitals andinsurers reach settlement

c ha in s th at k ep t th em se lve s o ut o f th e

pr efe rr ed pr ovid er n etw o rk ( P P N ) se em to

have a c c ep te d th e a r ra n ge m en t T h e

manag emen t s o f these g roup s have

ag re ed to th e sta n da rd tre atm e nt r a te s

n ego t i a t e d by th e p u bl ic se c to r h e a l t h

in su r an c e p ro vid e rs.

The,beginning of the feud. A r te r c la im -in g th a t h o sp ita ls w e r e o ve rb il l in g po lic y-

h old ers . a nd fa ce d w ith e sc ala t in g a n d

u nsu sta in ab le c la im ra tio s in th e ir p ro d-

uc t s . health in su ra n ce c o m pa n ie s

la un ch ed a pre fe rr e d pro vid e r n e tw o rk

(PP ) o n 1 July 2010, f ixin g th e ra te s o f

tr e atm e nt a n d p ro ce du re s fo r hospitals .

T H IE

st al em a t e o v er c a sh le ss

- tr e atm e nt c la im s f in al lyc am e to a n e n d L ast fo rtn igh t w ith fo ur

sta te -o w n ed h ea lth in su ra nc e lirm s -

N e w In d ia A ssu ra nc e. O rie n ta l

In su ra nc e, U nite d In dia In su ra n ce a n d

N a tio n al I nsu ra n ce -s-a nd a ll b ig h o sp i-

ta l s , ex c ep t A po llo H o sp ita ls . a gr ee in g o n

a n ew se t o f ta rif fs . M o s t pr iva te h ospita l

WOW!The Insurance IRegulatory and Devel-opment Authority has suggested thathealth insurance benefiits also inclludeout-patient department (OPD)servlicesin hospitals as well as childbirth.

M a ny h ospita ls h ad d ro ppe d o ut 01 th e

cashl e s s t r e a tm e n t list w h ile f e w a gre edt o j o in it. O ve r tim e , h ow e ve r, m o re h o spi-

t al s a g re e d a n d jo in ed th e P P N n e two r k .

T h o s e that didn't, e s pe c ia ll y t h e p riv a te

h o s pit al c h a in s . a rgu e d th a t h ig he r t re a t -

m e n t costs=high se rv ic e sta nd a rd s. h ig h

cos t o f m e dic al. e qu lpm en t a nd n ew a n d .

la te st p ro ce du re s-r e su lte d in h igh er

c o sts. O n ly th o se h o sp ita ls th a t agre e d to

t h e in s u re r s' t e rms w e re k e p t o n th e P P •T ho se w ho a gre e d to P P N w ere to fo l-

lo w th e pa c k age ra te s a s pre pa re d by th e

fo u r in su re rs in c on su lta tio n W ith th ird -p ar ty a d m in ist ra to r s ( T P A s) -t he in te r-

m e d ia ry b etw e en th e po lic yh o ld er a nd

th e insurer=for s p e c if ie d p r o c e d u r e s .

T ho ugh th e pa tie nt c o uld still g o to h o sp i-

ta ls o utsid e th e n etw o rk fo r tr e atm e nt. h e

w o u ld n o lo nge r be a b le to ava il th e c a sh -

le ss f a cil it} , T h is m e an t th at h e w o u ld

n ee d to m ak e h is ownarrangements to

f u n d th e tr e a tm e nt a n d, l a t e r , a pply to th e

in su ra nc e c om p an y fo r r e im b u rse m e nt

W h al t it m e a ns. A s a health insu rance

po l i c y h o l d e r , th e c ash le ss m o de o f pa y-m e nt m a y stil l b e th e e asie r w ay. H o w eve r.

th e c o st o f tr e a tm en t w o u ld d e pe n d o n

the g r a d i ng o r e ac h h o sp ita l. so m e th in g

th at h as a lr e a d y h appe n ed , E n su re tw o

th in gs b ef ore h o spita lisa tio n : c he ck if

h o spita l is u nd e r P P a n d th e g ra d e to

w h ic h it b elo n gs.

S a ys Y a sh ls h D a ht ya , C E O , . Po l t cy l l a z a a n

c o m , an in su ran ce c o m pa r iso n po rta l:

"I t 's a g oo d m o ve . Itsh o w s th a t in su re rs

a n d T P As c a n negot ia t e b ette r d ea ls to

o ffe r t h e c usto m e r su pe rio r m e d ic al tr e at-

m e n t a t th e h ospita l o f h is choice ."

SUNIL DHAWAN

< ~worldl'\ag~ http://digltal.outlookmoney,com.lI0 .AUGUST 2011 • OUTLOOK MONEY 9



I NewslRoll l1

HOPEThe finance ministry is optimistic aboutmeeting its disinvestment target of~40,000 crore for 2011-12,.although only

~t1I44,55 crore has been mopped upthrough this route so far this fisoal.

PL,EASE!Banks have asked the Reserve Banikof India to take a pause and not hikeinterest rates in its monetary policy

review next week as bank oredit hasallready seen some moderation.

A PAIRADIOM SHIIFTAl te rna te banking

ch ann els a re fast

g ain in g g round inIndia

ACROSS In d ia . c usto m e rs n ow visit

ba nk bra nc h es le ss o fte n th an e ar lie r .

I n s t e a d . they h a ve ra m p ed up th e u se o f

th e Internet a nd m o bile dev tces , a c c o r d -

ing to A sia Su rv ey o f P erso nal J : t l l 1 a l l c i a l

Servkes by c on su lta nc y M c K in se y &

C om pa ny. W h a t m a ke s the f in d in g in t e r-

es t i ng is th at b a n k b ra n ch u sage h a s

d ro ppe d a cro ss A sia . in clu d in g In d ia . f o r

th e f ir s t t im e sin ce l \k K in se y sta rte d c on -d u ctin g th e su rve y 13 y ea rs a go . .

Alternate channels gaining traction.

T h e su rve y w a s ba se d o n in te rvie w s w ith

n e a r l y 20,000 A sia n c on su m e rs a cro ss

13 m a rk ets, o f w h ic h th e la rg e st su rve y

p oo l w a s In d ia . with 5,000 r e spond en t s .

T he su rvey reve als th at w h ile In dia h as

se e n a 15 pe r c e n t d ec l in e in b r a n c hu sag e . th e u sa ge o f th e In te rn et a n d

mob i l e b an kin g h as m o re th an tr ip le d . In

I nd ia , a bo u t 7 pe r c en t o f a l l b an kin g

c on su m ers n ow u se In te rn et ba n k in g, a

s ev en -f o ld l ea p f ro m 1 pe r c en t in 2007.

Say s R e nn y T h om a s, pa rtn er in

M cK in se y's I n d ia o f fic e : " T h is r ep re se n ts

a fu n d am en ta l sh ir t in c o nsum er be h av-

io u r a nd h as S ign if ic an t im p lic atio n s fo r

ba nk s a s th ey c on sid er th eir c ha nn el

str a te gy a nd h ow th ey sh ou ld a l lo ca te

in v e st m e n t r e so u r c e s. "O th e r f in d in gs in c lu de d th at c on su m e rs

h ave be co m e m o re c a u tio ns w h e n it

c o m e s to b or ro w in g.

by VARUN VASHISHTHA

EPFO 'S NEWLIST OUTOrganisation announcesn ew fun d m an agers, all

but on e hold term

S t a t e Ban k o f I nd ia (S B l). H S B C Asse t

Man a g em e n t a n d R e lia n ce C a pita l A sse t

M a nage m en t h ave be e n re ta in ed a s I u n d

man a g e r s by t he Em p lo y ee s' P r o vid e n t

F u n d O r ga n is at io n (EPPO) . IC IC r

S e cu rit ie s P r im a r y D ea le rsb ip h a s be e n

a ppo in te d a s a n ew fu nd m an age r in th e

g ro u p. I CI cr P ru d en tia l A sse t

M a nage m en t, o ne o f th e fu nd m a n ag e rs

fo r th e pre vio us th re e-ye ar te rm (M a rc hlOOS to M a rc h 2011). h as b ee n d ro ppe d .

O th e r b id d er s th at h ad qu alif ie d th e

te ch nic al ro un d w e re B ir la S un Life MlI lC.

UTI A sse t M a n a ge m e n t. S e cu rit ie s

T ra din g C orpo ra tio n o f In d ia , K o ta k

M a h in d ra A sse t Ianagement a n d

F ra n klin T e m p le to n A sse t M a n a ge m e n t.

Says S . C h a tt er je e , c e n tr al p ro vid e n t

f u nd c o mm iss io n e r: ' :A s o f n o w . w e h ave

c l o s e to 'N ,OO,OOO e ro r e o f c o rpu s , o u t o f

w h i ch a b ou tn .5 0 .0 00 croreis w ith th e

R e s e r v e B an k: o f In dia an d r em a i n i n g~2,5(J.OOO c r o r e w Lll b e ma n a g e d by t h e

f o u r fund m a n age rs." O u t o f th is , 8m will

ma n a g e 3 . 5 pe r c en t 01 th e c orpu s ..fo l -

lo w e d b y IC Ic r at 2 5 pe r c en t. R e lia n ce

a n d H SB C w ill m an a ge 2 0 pe r c e n t e a c h .

W h e n asked w h y IC IC I Prudentlalwas

d ro pp ed f ro m th e list d e sp ite g en e ra tin g

th e h ig he st yie ld among th e four f u n d i

m a n ag ers o ve r th e ir la st th re e-ye ar te rm .

C h a tt er je e s aid : "It w as an o pe n b id din g

a nd IC IC I P ru de n tia l A sse t M a n ag em e n t

m u st h ave qu ote d h igh er r a te s fo r I ts se r-

vic es. a n d th at m u st be th e r e aso n."

ASH.IN. KUIMAR S'H'AR.MA

""....nOUTLOOK MONIEY .10 AUGUST 2011 • http://outloakmoneycom\ I~worrd ' i ! l ' a! i l '



RESCUEA group of ministers is diiscussingaproposal for an additional ,{1,800 croreof equity infusion in Air-India i'nthe

current year, apart from the ~t200crore already announced this year.

Commodity

GOOlDA positive recruitment trend was seenin smaller towns and rnlnl-metros dur-ilng April-June 20111due to increased

hilring in engineedng and manufactur-ilng:sectors, says a recent study.

G old touches n ew high ,silver rem ain s stron g on

dollar w e a k n e s s

PREC'IO 'U S ME .T A LS

Du rin g th e w ee k e n d ing 15 J u ly , gold

touched a h igh or $1.594.9'0 p er o u nc e

and continued to r ise on th e bac k o f th e

eu rozone d e b t c ri sis . U s safe-haven buy -

in g w a s a lso su p po rte d by th e f a ilu re o f

U S p o l it ic ia n s to r e ac h a n a gre em e nt o nra isin g th e d eb t c eil in g fo r th e c ou n try .

G old c on tin ue d it s a sc en t d ur in g th e w e ek

b e g in n in g 18 Ju ly to to u c h a n e w h igh o f

$1,607 pe r o un ce , O n th e M C X, th e ye l-

lo w m e ta l r e a c h ed a h ig h of~ 2 3 .2 91 pe r

1 09 . H o w e v er , by th e m id d le o f th e w e e k ,

it lo st s te am a n d fe ll by o ve r 1 pe r c en t a s

in ve sto rs m o ve d to w a rd s r isk ie r a sse ts o n

RE PORT C AIRD

.Gold I!/g)

Pr i ce 2,28•. 50

1-yr return (% ) 33..33

• S illve r ((/g)

Pr i ce 54.5,7

1-yr return (% ) t28.08'

• C ru d e ,Oill { $ l b b l l )

P r i c e 88.621-yrreturn (% ) 23.28,

th e bac k o f a p o ss ib le s o lu -tio n to th e e uro zo n e c risis,

S ilve r h as r e m a in ed stro n g

fo r th e la st tw o w e e ks fo l-

lo w in g w e a k ne ss in th e d o l -

l ar . A f te r g a in in g 6 pe r c en t

in th e p r ev i ous w e e k . it

a dd ed a no th e r 3 p er c en t

ga in d ur in g th e w e ek

beg i nn i ng 18 J u l y . I t

to u c h e d a h igh o f ~60 . 2 53

pe r k g o n th e M CX

S e p te m b e r c o n tr ac t.S a ys [l ga r P a n d it , a ss is ta n t v ic e -p re si-

d en t. c om m o d ite s a nd c ur r e n cie s,

S h are kh an : "T h e o ve ra ll o u tlo o k is b ull -

ish fo r g old . b u t c on so lid at io n is r e qu ir e d . .

M o n ey c an m o ve l im n go ld in to e qu itie s

a n d o th e r r isk y a sse ts fo r th e sh o r t te L'L T I.

A n d silve r p ric es a re n 't su pp or te d b y fu n -

d am e n ta ls a s th e g lo ba l p ic tu re is f r a gile ,"

IIMPACT OF GLOBAL FACTORS

T h e e u r o z o n e d e b t c r i s i s a n d w e a k n e s s

in t h e d o l l a r c o n tin u e d t o s u p p o r t g o lda n d s il v e r p r i c e s , w i t h t h e y e i l l o w m e t a l

e v e n m a n a g in g t o r e a c h a n e w h ig h .

C r u d e o il l w a s a g a in v o la t i le

B AS E M E .T AL SE xc e pt a lu m i n um . a ll o t h e r

b ase m e ta ls r e co rd e d ga in s

d ur in g th e w e ek e nd in g 15

J U l y , t h a n k s to th e d e pr ec ia -

tio n in th e ru pe e a n d th e

success fu l s t r ess tes t o n

E uro pe an b an k s. H o w e ve r,

itw as a m ixe d tr e n d in th e

w e e k b e gin n in g 18 J u ly d u e

to a w e ak e r d o ll a r, p osit ive

U S h o u sin g da t a a n d th e

e u ro z on e c r is is . S a ysPa n d i t "C o pp er is lo o kin g g oo d a nd is

ta kin g o ut r e sis ta nc e a t H40. I t c o u ld

r ise f ur th e r, A te st o f p sy ch o lo gic a l r esis-

ta nc e a t N 4 9 is a po ssib il ity; h ow e ve r,

f r o m th ere th e m e ta l c a n m o ve lo w er . I n

c ase o f l e ad a nd zin c, th e r a lly is o ce r-

d o ne . W e su gg est b oo k in g p ro fits in le ad

w h en it to uc he s n2S..50."

ENERGY

Du rin g th e w e ek e nd in g 15 Ju ly . c ru de o il

h ad ga in ed o ve r 1 pe r c en t w ith p r ic esto uc h in g a h ig h o f $9 9 .2 1 pe r ba r r e l

(bb l) o n th at d ate . T n th e w e ek be gin nin g

1 8 Ju ly, c ru de o il f lu ctu ate d bu t h ad

ga in ed o ve r 1 pe r c en t by th e m id dle o f

th e w ee k . O n th e M CX . it to uc h ed a h ig h

or N ,4 24 Ibb l o n 2 0 Ju ly . P an dit says:

"C ru d e o il h a s be en stu ck in th e $94 -

99 .5 0 ra n ge . W i ld sw in gs in c ru de o il

w o uld c o n tin ue . O n th e In d ia n b o urse s, it

c ou ld r ise to N,S60 if it ta k es o u t r esis-

ta nc e a ro u nd H,430. H o w e ve r, w e w o u ld

su gg est se ll in g in to ra ll ie s a s a m u c h

l o w e r p ric e is p o ss ib le e v en t u al ly "

KAVYA B.A.LAJI I

< ~worldl'\ag~ http://dig,taLoutlookmoney.com .10 AUGUS'J 2011 • OUTILOOK. MONEY 1 1 1

http://dig%2Ctaloutlookmoney.com/

http://dig%2Ctaloutlookmoney.com/



I NewslRolll1

TOUGHAcknowledging persistent high inflationand signs of an industrial slowdown, thegovernment has pared its gross domes-

tic product growth forecast for 2011-12to 8 .6 per cent from 9 ' per cent earlier.

ABOUTTIMI!The government has started working ona new perception index to counter theimpact of the Doing Bus i ne s s Report o f

the IFe, which ranks India belowPakistan, Samoa and Mongolia.

SEBITHE REGULATO : R

Securities andExchange Board oflndia has allowedstock exchanges tosh itt. securities ofcompanies listed inAnnexure A havingestablished connectiv-it y with depositories

to normal rollingsettlement subjectto conditions

Onthe

5 , 8 0 0

- N i ! t y

5 } O O

. 5 . 6 0 0

5 5 0 0

1 0 6

1 0 4

1 0 2

1 0 0

9 8

9 6

su r 2 0 J u l ' 1 1 1

Sensex felll by cliose to 2per cent on gllobal uncer-tainty. BSIEReality indexwas the biglgest gainer

Street

RESCUE ACTGovt to step up

assistance toe le c tr ic ity b o a rd s

W ith m o s t sta te e le ctr ic ity

b oa rd s stru gg lin g w ith h igh

d is tr ib u tio n l os se s. p o w e r

min l s te rs o r var ious s ta tes

m e t in ew De lh i th is fo r t-

n igh t T h e sta te s a gr ee d to

r e vis e t ar if fs a n n u a ll y i f th e

c o st o f p ur ch a se 01 e lec t r i c i tygo es u p, w h ic h a c c ou nts fo r

70-80 pe r c e n t o f th e c o st o f

s up pl y. T h e st at e g o ve rn m e n t s

wil l c l e a r a ll p e n d i n g subs idie s

to th e bo ard s a n d wi l l e n s u r e

a dva nc e pa ym e n ts o f su bsi-

d ie s a s p er th e E le c tr ic ity A c t.

T h ese m e asu re s a r e be in g

lo ok ed a t a s a m a jo r po sit ive

fo r the sta te b oa rd s a nd thetw o b ig sta te -o w n e d le n de rs.

P o w e r F in an c e C o rp or atio n

(PFC) a n d th e Rural

B l e ct n fic a n o n C o r po r a ti o n

(REC) . A s a re su lt , bo th sto ck s

witnessed h ig h b u yin g In t e r -

es t . PFC and R EC r o s e 9.6 and

7..3 pe r c e n t , r e sp e c ti ve ly, o n

1 4 J ul y, H o w e ve r. b oth th e se

c ou n te rs h ad se en su bsta ntia l

c u ts in th e last le w m on th s o n

concerns about the a b il it y o fs ta te b o a r d s t o r ep ay deb t .

R E C f e ll f ro m {2 67 inMa r c h

t his y ea r t .o a lo w of n80 in

J u n e . PFC too wi t n e s s ed a

s im i l ar d e c l in e . A s w e go to

p re ss , P P C a nd R EC w e re tra d -

in g ~208.50a n d ~216.40.

RAJESHI KUMAR

R.K.

HI IGHIONACTI IONI

S K S M ic ro f in a n cem a k es so lid ga in sd e s p it e v o la t il it y

SKS iV 11 c ro it na n c e , th e o n ly

m i c r o f i n a n c e company l is ted

in I nd ia , w i tn e sse d h ig h

d ra m a a nd sign if ic an t pr ic e

volatility t h is f o rt ni gh t . Af t e r

it w a s d ec id ed that th e

R e s e r v e Bank o r In d ia wi l l beth e r e gu la to r o f th e c o m pan y.

th e be a te n -d ow n c ou nte r saw

a slg ntf lc an t su rg e in a ctivity.

It mov e d up by 20 pe r c en t

o n tw o c on se cu tive d ays

(7 a n d 8 J Uly ) to h it th e c ir -

c u it . L a te r, the e x c h a n g e s

revi sed the c ir cu it l im i ts , b u t

th e sto c k m ove d u p c lo se to

]0pe r c e n t e a c h in th e n e xt

tw o d ays.

H o w eve r, w h at go es upmust c o m e d o wn . so th e

st o ck c o rr e ct ed 10pe r c en t

o n bo th 13 and 1 4 J uly.

N o n e t h e l e s s , :i t is s til l u p

60 ' pe r c en t sin ce the begin -

n i ng of J u ly . E a rl ie r . d u e to

unc e r t a i n ty on t he r eg u la -

t i on front and o t he r is su e s,

it h ad d ro ppe d f ro m n.400

in S e pte m b er 2 c n o to a lo w

on'270 in MaJ I 2011. A s

w e go to pre ss , it i s t r ad i n g

at~548.45.

R.K.

LOTS IN I A NAM EN ew s o f sta k e sa leby Jhunjhunwaladrags Lupin s t o c k

S ha re s o f d ru gm a ke r Lupin

su dd en ly f e l l a bo ut 4 pe r c en t

o n 20 July a n d a fu rth er 3.16

pe r cent o n 21 J u ly on the

n ew s th at R a k esh [h un ih un -

w a la , th e billionaire i nves to r .

h as so ld pa r t o f h is h old in g

in th e c om pa ny dur ing th e

J u ne q u ar te r. In fact .

[hunjhunwala, along wi t h

h ts w i f e . now hold a s t a k e o f

1.73 pe r cent in th e c om p an y

c o m pa re d to 3.22 pe r c en t at

th e e n d o f M a rc h 2m 1.

Meanwh l l e , f o re ig n in s tit u -

tio n al in ve sto rs [F Ils) h a ve

r ais ed t he ir stake in th e c om -

pan y to 2 3.5 7 pe rc e n t a t

th e Ju ne -e n d qu ar te r c om -

pa re d to 18.60 pe r cent in

J u n e 2010 ..

"".... .~ OUTLOOKMONEY .10 AUGUS12011 • http://outlookmoney.com, ~ " w o r r d l' ra g s

= hllp:/!twitl er.com/Outlooklvlcney, htt p:/fwwwJacebook.com/olmindia

http://outlookmoney.com/

http://outlookmoney.com/



a r e w a rn in g U S of str ip pin g its tr ip le A

ra tin gs re pe ate d ly. A d ef au lt a n d lo w erc re dit r a tin g fo r U 8 m igh t pu sh th e m a r-

k e t in to a f in a l ta ilsp in . T h e q ue stio n is,

if US d eb t is n o t sa fe , th en w h a t i s ?A n d

h ow d oe s o ne va lu e $]4 .3 t r il l io n d e b t

o u tsta nd in g? B u t, h e pe fu lly C o ng re s-

sm e n w iU r eso lve th eir d if f er en ce s a nd

r a ise th e lim it b e fo re 2 A ugu st, th ou gh

it m ay o nly h appen if th e Obam a adm ln -

istr a tio n a g re es to a d ee p c ut in b u dg e t

d ef lc tts, A c u t in go ve rnm en t spe n d in g a t

th is sta ge , h o w e ve r, m ig ht a ff e c t th e

f r ag ile r ec ove ry o f th e e c o n om y wh i c hh as a d if f e re nt se t o f im p lic at io ns, su ch

a s so fte r e co n o m ic a ct ivit~ 7 ,fo r a n

e xt en d e d p er io d . A w e a k e r US e c o n o m y

wi l l a f fe c t e xp o rt s f r om th e

r e st o f th e w o r ld , : i:n c lu d in g

In dia . W i th so m a n y ir s a n d

• Debt crisis is b uts, u nc er ta in ty a nd in te re stra te s a nd its im p lic atio n s c o n-

tin ue o n th e d om e st ic f ro nt .

In fla tio n ba se d o n th e

w h o le sa le p r ic e in de x w a s 9 .4

pe r c e n t fo r th e m on th o fJu ne , w h ic h is st il l w a y a bo ve

th e c om fo rt le ve l o f o ur

c e ntr al b an k , a n d e c o n om i s t s

a re e xpe ct in g a n oth er 2 5 ba sis

po in t ra te h ik e by th e R e se rve

B an k o f In d ia o n 261u ly .

O n th e p ositive s id e . in fla tio n m ig ht b e

pe a k in g a n d th ere w ill so on be a pa u se

o n ra t e h i k e ,

Your money. T h e u nc er ta in ty c on tin -

u es, a t l e ast in a sse ts l ik e e q uitie s. G o ld ,

m e an w h ile . in th e in te rn atio na l m a rk e tto uc h ed a n a ll -tim e h igh o f $1 .600 pe r

o un c e th is f o rtn igh t o n th e b a c k o f

u n ce rta in ty. H o w e v e r. Out look : M o t l e y

h as a lw ays a dvise d yo u n ot to pu t su b-

s ta n tia l am o un ts o f m o ne y in go ld an d

k e ep it ju st a s a d ive rsif ie r (se e Hedging

al e H e d q e , . 2 7 Ju ly ) . I n e q n tt le s, itwo u l d

be a dvisa ble to re m ain in ve ste d a nd c on -

t in ue yo ur S [P s. bu t k ee p so m e in ve st-

a b le c ash in h an d to ta k e a d va n ta ge

o f a n y d ee p c or re ct io n in o ur m a rk ets

b e ca use o f th e w o rse nin g g lo ba l c eo -

SHAK-Y,GROUND

.aftectiing larg:-

er countries in

Europe·

• US is inch-

in g towards asovereign

default

I MacroMo,ney I

BY RAJESH KUMAR

FINGERSCROSSEDBad news on severalfronts continues. Whatmust you do with your

money?

ve ry qu i ck ly fo r th e w o r se . W e saw th at

in th e a f te rm a th o f th e c o lla pse o f

L eh m an B ro th ers in S e p t em b e r 2008 ..

If th is w a s n o t e n o ugh to c r e a te u n c e r -

ta in ty in th e g lo ba l f in an cia l sys t em , w eh av e US . th e la rg e st e co no m y o n th e

p l an e t . inching to w a rd s a so ve re ig n

d e fa ult . T h e c o un tr y wi l l r e ac h th e le ga l

l im i t o f b o rr o w in g . se t by th e

US C o n gr es s. o n 2 A u gu st. If

th e lim i t is n ot r e vise d o n tim e

a n d if th ere is e ve n a m in o r

d e fa u lt . t h e r ep er cu ssio n

w o u ld b e visib le a ll o ve r: th e

w o r ld . C re d it r at in g a ge n cie s

in c o m i n g q u ar te r ly n umb e r s

by c o r p o r a t e In d ia fo r th e June

quarter h ave d on e ve ry l it tl e , s o

f a r , in te rm s o f lif t in g th e

m o ra le a t th e sto ck m ark et Eve n th ou gh

th ere h as n o t b e e n a n y n e ga t ive n ew s o n

th e e arn in gs f ro nt . th e m a rk et is m o r e

w o rr ie d a bo ut th e g lo ba l a n dlo ca l m a c-

ro ec on om ic sl tu at io n . W h i le n ew s f ro m

th e re st o f th e w o rld : iso nly a dd in g toth e u nc er ta in ty, o n th e d om e stic f ro n t,

in fla tio n a nd in te re st ra te s c o nt in ue

to h ur t th e e arn in gs e xpe cta tio ns

o f c o rp ora te In d ia .

O n th e in te rn at io na l f ro nt, th e

e xpe cta tio ns a re sw in gin g be tw e en tw o

e xtre m es in E uro pe a nd U S . In E uro pe .

th e d eb t c risis h as sta rte d sh ow in g its

im p ac t o n la rg e r e co no m ie s l ik e I ta ly

a nd S pa in . w ith d if f e re nc e o n yie ld s r is-

in g sig nif ic an tly a bo ve G e rm a n b on d s,

c on sid ere d to b e th e sa fe st in t he r eg io n .T h e p r o ble m is if th er e is a se rio us f ln an -

c ia l m a rk e t a tta ck o n I ta lia n so ve re ign

d e bt , it w i l l b ec o m e re al ly d if fic u l t f o r th e

m o n e ta ry u n io n to c a lm n e rve s, a s it

m igh t tu r n o u t to b e a c a se o f 'to o b ig to

sa ve '. I ta ly is th e th ird -la rg est issu er o f

d eb t in th e w o rld a n d its to ta l d eb t s to ck

is in e xc ess o f $2 .5 tr il l io n . H o w e ve r, th e

s av in g g ra c e , so la r, is th a t f un d am e n ta ls

o f th e l ta l la n e co no m y a re fa r su pe rio r

to th ose o f o th er sm a lle r e co no m ie s,

su c h a s G re e c e a n d P or tu ga l . B u t th e

p ro ble m is , w h e n c on fid en ce is lo w in

th e f in an cia l m a rk e ts, th in gs c h an ge

V I \R UN V A S HI SmHA

• lnflation inlndla is sti ll

high

n o m ic e n vir on m e n t, 0

Irajeshkumar@outlookindia ..com

III h t l p :! ! tw i tl e r .c om !Ou t !o o kMon ey ; h l l p :/ ! www . la c eboo k . com /o !m ·n d i a

http://drgilal.outlookmoney.com.10AUGUST20.11 • OUTLOOK M'ONEY 13< ~worldl'\ag~

http://drgilal.outlookmoney.com.10august20.11/

http://drgilal.outlookmoney.com.10august20.11/


http://slidepdf.com/reader/full/outlookmoneyaugest2011 16/76worldMags


http://slidepdf.com/reader/full/outlookmoneyaugest2011 17/76worldMags



I Queries I LIFE INSUR.ANCE GENIEIRA.LINSURANCE MUTUAL FUNID'STA

on taking up employment outside India, or (b) for

c ar ryin g o n a bu sin ess o r vo ca tio n o utsid e In dia ,

o r (c ) fo r any o th e r p ur po se .

T h er e f o re . if a pe rso n stays fo r 182days o r more in the preceding finan-

c ia l y ea r an d g oe s o u t o f In dia in th e

current flnanctal ye ar fo r taking up

e m plo ym e nt o r c ar ryin g on a n y

business o r fo r any other pu rp os e

which w o n ld in d ic ate his in t en t ion

to stay outside India f o r an uncertain

p e rio d , h e will n o t b e t re a te d a s a

r esid e nt in J nd l a f or th e c ur re nt

f in an cia l ye ar. S o, in yo nr c ase , a s

yo u h ave le ft In dia f o r th e pu rpo se

o f jo b yo u wil l b e c on sid ere d n on -re sid en t in Jn dta f or th e c ur re nt

f in a nc ia l y ea r. 0

ATULasked

What penaltyis charged forprematurewithdrawals offixed deposits?

ApnaPaisa's Harsh

Roongta replies:

Normally,a bank

charges a penalty

of 1 per cent below

the interest rate applicable on the date of deposit for the

period the fixed deposit was with the bank. For instance.

i f you had started a fixed deposit on 1 June 2011 for five

years, at a rate of 9.50 per cent per annum for 5 years.and 4.50 per cent per annum for a period between 30-90days, you will get an interest of 4.50 per cent per annum

minus the penalty amount of 1per cent per annum(which is 3.50 per cent per annum) incase you withdrawthe deposit on 20 July 2011 (which is 50days from date

of deposit). The original contracted rate of 9.50 per cent

per anllllin has no bearing in this matter. LJ

l.u·]:tI;j I i I,]3 : ' I , ]0:.RUDRA JALA'L, email

II left India for the purpose of job in Dubai.

Meanwhile, I alpp~liedfor a dealership in

India for which one needs to be a resident of

llndia. IIam stilillunder the income tax law in

llndia. Willill be considered a resident under

Foreign Exchange Mana.gement Act (FEMA),

as I do not have any lntentton to settle per-

manently in Dubai?

PwC experts reply Accordingto S e c tio n

2 (B ) ( \ 1 ) of FEMA . a r es ld en t o f India is a person

re sid in g in In dia fo r m o re th an 182 d ay s. d u r i n g

th e c ou rse o f th e p re ce din g f in an cia l ye ar , bu t d oe sn o t in c lu d e a pe r so n w ho h a s go n e o u t o f In d ia , o r

w h o sta ys outside India. in e i t h e r case-(a) for or

"".... tA OUTLOOK IMONEY .10 AUGUST 2.011.' www.outlookmoney.com, ~ " w o r ,. <M a g s

ltj~:1 4 i " " U F l i J j l"J:T3lJCHETANI CHAVAN. email

Ihave taken a home loan of ~uakhalldpurchased a flat in Navi Mumbai for ~21Ialkh.

Iam earniing~6,.OO'Oper month through

rent. Should IIpay the tax for this? How can I

recover it?

OLM Rep~liesA s pe r th e 1n c o m e T ax Act O TAct). yo u n ee d to fi le tax re tu rn in c a se yo ur to ta l

income w a s le ss th an n.60 la k h in th e financial

ye a r 2010-11, w h ic h is n ow ralsedto n . 80 I akh

£01" the f i n an c i a l year 2011-12.

I n yo ur c a se , a s yo u h ave m en tio ne d th at yo u

have a r e n t a l income o f ~6,OOO pe r m o nth , yo ur

total in co m e u nd er "in co m e fro m h ou se p ro pe r ty"

du r i ng the year comes to ~72 ,DOD, which is less

th an th e in c o m e e xem pte d f r o m tax. Th e r e f o r e ,

yo u need not f i le an income tax return ..Moreover.

yo u a r e a llo w ed to m a ke sta nd ard d ed uc tio n o r a

maximum o f 30per cent from th e rent re ce ivedw h i c h willi fu rth er re du ce yo ur in co m e. Itis a sta t-

u t o ry deduction which is n o t d e pe n d e n t o n th e

a ctu al expe nd itu re in cu rr e d o n re pa irs, o r c olle c-

t ion by th e o w ne r : Y o u can also claim deduction for

th e pr in cipa l r e pa ym e nt a nd in te re st pa ym e nt d ur-

ing the year on home lo an u nd er Section 80C and

S ec tio n 2 4 o f th e IT A ct. re spe ctive ly;

H o w e c e r , if yo u h ave a ny additional income f r om

sa la ry , p ro f essio n , b u sin e ss, c a pit al g ain s, 01 " o t h e r

sources, during th e yea r and you r total i n c om e

e xc ee ds th e e xe m pte d in co m e limit. yo u n ee d to m e

areturn.

Wh i l eftllngthe

return. c h e c k the type of

in co m e ta x re tu rn fo rm a pp lic a ble fo r you a s pe r

your d i f f e r e n t sources of income.





ATIONI BANK.ING REAL ESTA'TE RE,TIIREIME,NTSTOCKS NRI

I I ~ 1 ~ 4 1 1 : HI J ;?,' :(3jPRIITAMIGUPTA. email

II want to take a loan 31gainst m y life lnsur-

ance policy from Life Insurance Corporationof India (Ue) for the construction of my

house. I have an endowment policy which

is two year.s old. As per pollicy conditions. I

willi be eligible for the loan only after three

pollicy years. The third premium is not due

as yet. If I palYthe next premium in advance,

willi Ibecome eligible for the loan?

OLM Replies T h e lo an a ga in st a l ife in su ra nc e

p o lic y is granted o n th e ba sis o f th e su rr e nd er

va lu e o f t ile po lic y. T h e stipu la tio n o f th re e ye ars

f o r g ra n t o f lo an is a lso c on sid ere d a s y o ur p o lic y

w i .U acqui re t he s ur re n d e r va lu e o nly a fte r th ec om p le tio n o f th e sa id p er io d ..I t wil l n o t m ak e a n y

d if fe re n ce e ve n i f yo u pay o n e ye a r 's p rem ium in

a dva nc e. F ur th e r , e ve n a fte r th re e ye ars , yo ur e lig i-

b il ity f or lo a n w ill be m ea gre a s th e su rre n de r

va lu e o f yo ur po lic y in th e in it ia l ye ar s wil l be lo w .

H o w eve r, a s an a lte rn at ive o ptio n, yo u c an e xplo re

h o usin g f in an ce c om p an ie s. B e in g a po lic yh o ld e r

o f U C. yo u rn a} ' g et so m e pre fe re nc e if }'OU

a ppro ac h L IC H o u sin g P in an ce C orpo ra tio n ..0

MOTI RAO, email

My uncle holds a life insurance policy witha crltlcal illness rider. Recently he was diag-

nosed positive f,or cancer, When can his fam-

ily expect to get a payment under the rider?

OLM Replies T h e payment u n d e r a 'critical ill-

n ess rid er ' a t ta ch ed w ith a lif e in su ra nc e po lic y is

normally made 30 days a f t e r the named critical ill-

n ess is d ia gn o se d . T h e c on d itio n is th at th e in su re d

m u s t survive the pe r i o d of 30 days.alter t he d ise a se

is d ia gn o se d . A d vise yo ur u n cle to f ile h is c la im

immed i a t e l y , if h e h a s n ot d o n e so . A s pe r ge n e ra l

Lo g o n to

www.ou t lookmoney .

c om

a nd p os t y ou r qu erie s

a t th e E x pe rt A d vic e

b ox or ma i l a t

l e t te r s@ ou t lookmooe ' )! ,

c om

conditions of the p o l ic y . t h e payment is m a d e

im m e d ja te ly o n c om p le tio n o f 30 d ays f ro m th e

date of detection o f disease. a

R.KRISHNAN, emaill

I am 4 1 1 . I am pl1anning to take a life ins'Ulr-

anee pollicy. Im confused as to how much I

should insure for. Various quarters sugg:est

various thumb rules to figure out the correct

sum insured. Can you suggest an approprt-

ate amount of insurance?

OLM I Rep'lies In su ra nc e is m e an t to pro vid e

f in an cia l se cu rity to th e d epe nd an ts in th e e ve nt o f

d ea th o f th e in su re d . T h er ef or e, t ile bes t w ay to

de t e rm in e th e am ou n t o f in su ran c e is to im ag in e

t h e [in a n cia l needs o f your d epe nd an ts in yo ura bse n ce . T h e su m in su re d sh ou ld be an a m o u n t

w h ic h if in ve ste d sa fe ly wi l l ge ne ra te a n in co m e

w h ic h w ill be su ff ic ie n t to m e e t th e p r o j e c t e d

expenditure of your dependants. You mu s t aliso

consider th e fluctuating interest rates. F ro m th is

sum, you m ay reduce th e accumulated savings.

Af t e r a sc e rta in in g th e n e e d f o r in su ran c e . a im to

secure th at m u ch cover. Dep e n d i n g on th e premi-

u m pa yin g c apa city, yo u c an a cqu ir e po lic ie s e i the r

in o ne go , o r sm a ll tranches, 0

I: Jhttp://twlttermm/OutlookMoney; http://wwwfacebookcom/olmindi3

Yo ur c h ild 'is ,doing h e r b e st. Are you?

3 U 'n i qu eBene f it 5:

. ' L if e & i He 'a l th b ene f i t

. , P r em ium wa iv e r

. ' M a t u n ii ty b e n e f it

WDIFe

Life

< ~world"'ag~ http://d'gltal.outlookmoney.com .·10 AUGUST 2011 • OUTLOOK MONEY 17

http://d%27gltal.outlookmoney.com/

http://d%27gltal.outlookmoney.com/



I m ag in g : M A NO JI T D A TT A

""....tlOUTLOO:KMONEY .10 AUGUST 2011 • www.outlookmoney.com, ~ " wo rr <Mag s





1;·#4,1.1 Jobs & Careers 1 Enterprise I' Banking I Taxation I Insurance 'Investing 1 RealEstate' Financial PlannIng' Flipside I

BY PANKAJ ,ANUIPTOP,PO AND SUNIL DHIAWAN

Mobile phones are taking time andgeography out of your finances. Areyou networked into the revolution?

he humble mobile phone is no longer an

instrument just to make phone calls or

send messages to your near and dear

ones. In fact, with financial institutions

adopting t e c h n o l o g y j n a big way, the

mobile phone is an effective tool fo r

w e e l t h creation. The benefits of th emobile as a means for dissemination of

products and! services create a win-win situation both lor

the customers and financial institutions providing such ser-

vices. For institutions, it helps to reach out to a large set of

consumers at a lower cost. and for tndlvtduals it helps to

receive the latest information and carry out transactions at

their convenience. However, like aU other products and ser-

vic es , y ou w iU need to complete a few f o rmah t i e s before you

can avai.l these services on your mobile. Here we tell you

about all the wonders opened up through your mobile, and

what you need to do 00 avail those products and services.

BANKING

T o carry out mobile transactions and receive alerts on your

transactions on the mobile you . are only required to get your

mobilenumber

registered. Also, most credit card issuing

banks offer instant SMS a le rts on every transaction that you

make through your credit card ..

The Benefits. For one. you can bank anytime. anywhere.

Second, it is safe and secure, especially incases where the

ba nk o ff e rs se rvic es lik e fu nd tr a nsfe rs, Fo r example, :if yo u

lose your P I N , and enter the wrong P IN three times, then

the application wi l l lock i tself You will need to

get in touch with the customer care centre of

the b a n k to get itu n lo c k ed . 'T h is security

measure wilt however; work inyour favour

if you happen to lose your mobile. provided

you have signed out after completing your

last mobile transaction.

What's On Offer. There are a host of services

Y o u

can benkanywhere, and

it is as safe and

secure asNetbanking

< ~worldl'\ag~ http://drgital.outlookmQney.com.10 AUGUS'J 2011 • OUliLOOK MONEY t9

http://drgital.outlookmqney.com.10/

http://drgital.outlookmqney.com.10/



Cover Story----------

that banks offer under their mobile banking services. For the

m o re c o m m on o n e s, se e W e al th in Y ou r H a nd se t. Apart f r om

these. there are other things as wen that you can do through

m o bile b a n kin g. T h e sem c lu de fu nd s t r a n sf e r (within a n d

outside the bank). Interbank Mobile Payment Services

(IM I P S ), de m a t e n qu iry se rvic e . b il l payment (utility bi l ls ,credit cards, insurance premiums), donations. subscriptions,

m o bile to p-u p , a n d m -c o m m e rc e (to p-u p o f Tata Sky,B i gT \ 1 ,

Sunfnrect, DishTV counections and receiving recharge PINs

f o r D ig it a lTV o r V l de o co n d2h).

Mow To Get Started. In order to avail the services of mobile

banking, you w i ll n e ed to register your mobile ph on e w ith

the b a n k . Also. the registration process wi l l differ according

to th e se rv ic e s o ff er ed by the bank. In case th e b an k only

o ff e rs se rvic es lik e S M S a le rts . f ixe d d epo sit e nqu iry a nd so

011, through m o b il e b an k in g, then the registration process is

fairly s imp l e (see Ge tU n €J Mo b ile B cmkil' lf J) .

How e v e r ; if th e ba nk o ff e rs se rvic es like f u nd s tr a nsf e r a ndin te r-b an k m o b il e bill paym e nt se rvic es. th en yo u wi l l n e e d

to d o w nlo ad an app lic a tio n o n yo u r m o bil e ph o ne . Fo r

example, i f yo u want to avail mobile banldng services of

ICICI B a n k , you w1.11n e e d 1 :0 dow nlo ad the iM o bU e a p pl ic a -

tion, If yo u want to avail mob i l e banking services o f State

STOCKS Buy and sell stocks, track

orders, vliew market data,

MUTUAL I i=UND-SLumpsum or SIP

buyingl,.Redemption and switch-

ing facillities are in the offing

Transact View balance funds, pay

bills, place a stop payment on a

cheque, request a chequebook,

view an account statement and

present bills

Ulpdate Transaction alerts, check

last three transactions on your

prjrnarv account for MobileBank-

ing, cheque status inquiry, fixed

deposit inquiry, a Help menu

forms available on the website

(UTI MFBindBirla MF)and sub-

mit at their office

PROCESSAND ECSdebit man-

date verification is performed,

On receipt ofcontirmation ofs u ce e s e tu l m a n d ate re g iis tlr'a -

tion hom the investor's bank,

the services are activated, The

regist!ration process takes up to

25 days

F OR A LL S UC 'C ES S!F UL REGM

IISTRA:TIONS 8 1 link is sent to

download and install the appli-

cation on the phone

Bank of India, there are two processes-first through your

phone and then at an SSTATM or your SBr home branch.

The Rules. W h ile th e r e a r e a host of services t h a t you can

avail under mobile banking, there are certain restrictions

w ith r e ga rd to fu nd tr a n sf e r s. A s per R B I g uid e lin es. b an k s

are now permitted to offer mobile banking service to their

c usto m e rs su bje ct to a daily c a p of ~50.000 pe r c u sto m e r fo r

both f u n d s transfer and transactions involving purchase of

g oo d s o r se rvic e s. T r an sa ct io n s up to {S .OOO c a n b e facllltat-

ed by banks. without end-to-end encryption.

Security. In case you only receive instant SMS alerts from

your bank for the transactions that you do, then it will be in

your interest to delete them once you have read them. In

other cases. where the bank allows services funds transfer

through an application, am o ng th e f ir s t things that you n e e d

to do is sign out after you have completed your transaction.

MUTUAL FUNDS

Mobile MF transacttons m e re ly n ee d registra-

tion for an ECS or standing instructions factl-

ity. Currently. you may invest a lump sum

or start an SIP. but in future you m ay be

able to redeem, switch funds, and access

AVs on the phone. TJTI MF and Blrla MF

offer N I P services all mobile.

The Benefits. If you arc holding an ECS-

Mobile

mutual fund

transactions

need registration

for an ECSfacillity

"".... ..,nOUTLOOK IMONEY .10 AUGUST 20111. wwwoutlookmonevcom, ~ " w o r m ~ g s



Dre'am big with

S81 Student Loan!

< ~World~l.gs

0" Maximum loon of Rs.l0 lacs for

studies in Indio

I i1 Malxi'mum loon 'of Rs.20 lacs for

studies: abroad

ltr No processing fee

o Simple interest during morotorium/

repayment holiday

01 % int,erest rate concession for

serv ic ing in te r e s f d lu ! rin g

morotorium/repcyment hoHdoy

IZ I Repayment up to 7 years

o Repayment srcrts 1 y eQ l r ofter

com pletion of course Of 6 months after

getting job, whichever is earlier

o No security for loan upto RsA lees and

only parent! guardian as co-borrower

o No margin for loans upto RsA lacs

o Loans above RsA lacs, 5% margin for

studies in Indio & 15% for studies

abroad

I i 1 Online registration o,f lioon

StadeL"all

24x7 Helpline: 18004253800 (Tollfiree from BSNUMTNL landllines/mobil'e nos.) orVlslt www.sbi ..ee.ln o:r

Email: contactcentre@slbtcoJn

http://www.sbi/

http://www.sbi/



Cover Story- - -----

enabled bank account, yon can use your mobile to transact

comfortably; Itprovides a self-service option for transaction

submission. You can make payments without issuing a

c h equ e. T he re is n o need f o r yo u to rem em be r k e y in fo rm a -

tion. A ll relevant account information required to transact.

su ch a s fo lio n um be r and e xistin g sc he m es a n d e xistin g b ro -ker code are linked and need to be selected to transact.

T he tim e ta k en fo r f r e sh S IP re gistr a tio n is r e d uc ed sig n lf i-

cantly and you can opt for the first debit to happen in

a ro u n d 10 d ays, a s a ga in st 30 -4 5 d ays in om in e m od e . O n c e

the S]F is registered, the ongoing debits would be carried out

w ith o u t h avin g to in it ia te a paym e n t o r tra n sa c t io n . A lso .

once the transaction is completed. su bm issio n o r r e je ctio n

i n t ima t i o n is n ea r ly im m e d ia te ..

W h at 's O n O ffe r . U T I M F and mC h e k have pa r tn er e d to o ff e r

IF YOU are opening an account

with the bank, you can apply for

MobileBanking through the ac-count opening document

IF YOU already have an account

with the bank, you can apply for

MobileBanking through the corn-

bmed Direct Banking Channels

form. You can download the form

and call for a sales representative,

Alternatively, you can fill this form

and hand it over to your nearest

branch. Click on the link provided

in the 8M8 to download the ap-p!li:cation

IF YOU already have an account

with the bank and i f you are reg-

lstered for NetBanking services,

then you can register online using

the 'MolbileBanking R'egistration'

option available inside NetBanking

The registration process may vary acrossbanks. For example, in case of State Bank ofIndia. registration involves two processes.Firstthrough your mobile and then through

S!BIATMour your SBI home branch

"".... "" OUiI'LOO'K MONEY .10 AUGUS12011 • www.outlookmoneycorn\I~wolTll~gr

GIETT I ING MOBILESITOCK TRAD IINGStay on the ball dUiring tradinq

OPENI AND ES,TABLISH a trad-

ing and dernat account with an

online broker

DETERMINE if your mobile orcell phone has IGPRS (Gllobal

Positioning Radio Syst,em), GSM

(Global System for Mobil'e Com-

munications) or WAP (Wilrel~ess

App l ic a l ti on ! P r o t, o c o l) c apab i ll i-

ties to access the informatiion

RECE I V E the specific link from

your broke!' and download in

your mob i l e

U SE TH IE U SE R ID a nd the pass-

word receiived from broker to

enter into the trading zone

CHOOSE ':0V I EW market reall-

time market data, or

CHOOSE to ilnitiate trading

investment in UT I ! \ l I E ' schemes to their customers, who can

either invest lump sums or set up an S]F lor any scheme

offered on mChek:. Currently, o n l y the purchase option is

a va ila ble o n U T I M o b ile .

H o w T o Get Started. First. yo u should be registered for UT I

Mobile w ith U TI lIA For any of the other fund house offering

m o b il e s er vic e s. You sh ou ld h ave the mG h e k J ava a ctiva te d

on your mobile. As part of this registration. you wi l l n e e d tosu bm it a sign ed d eb it m a n da te form a nd sign ed m o bile

agreement, 'wherein you enter yOUI' mobile number. After

venf t c a t i on o f yo ur d eta ils . th e d eb it m a n da te s a r e u plo ad ed

on the mChek portal

Security. The safety and security of transacting in MF units

over the mobile is largely similar to security features as for

t r a n sa ctin g in sto ck s (se e th e n ext se ctio n) , T h is is be ca use

on your mobile, NW is transacted over the Mutual Fund

S e rv ic e S y st em (lVJFSS),w h i c h is an o nlin e o rd e r c o l le ctio n

s ys te m p ro vid e d by stock exch a ng e s ,

STOCKS TRADING

After online trading, the latest and the most far-reaching

trailing medium is predicted to be the mobile handset. Us



G . iU 4 J . it i i iI Jobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estate IiFlnanelal Planning I Flipside I

Up next = ma fol randstad Pharma Pay Re,pon P9 24

uniqueness lies in the fact that it is equipped to help you

trade at a convenient time and place. The stockmarket is vol-

atile and prices fluctuate almost every moment. In a matter

of lew minutes. there could be a sea change in profits or loss-

es. Given an opportunity to trade via mobile, it helps in keep-

ing pace with the fast changing scenario of the marketplace.The Benefits. Mobile trading can happen not only on smart

phones or expens ive phones, but through any device with a

GPRS connection find which is Java-enabled. I t gives yo u

a c c e s s to market data no matter w h e r e you are. A .,

Balakrishnan, chief technology officer; Geojlt BNP Panbas, a

retail financial services firm, says: "Mobile trading enables

mobHity as one is carrying his fol ios on the move and. thus.

can react quickly to market dynamics."

The P,rocess.Since the mobile trading platform is a pull-off

< ~worldl'\ag~

http://www.nseindia ..com/mar-

k,etinfo/now/registerForm.jspRECEIVE A CO:N~IRMATION

MAIL and SMS on the mobile

CLICK ON THE LINK PROVIIDED

to download the,application

STARTAPPLICATION download-

ed on your mobile

VIEWSECURITY live streaming

quotesand live market watch

REGISTERONITHEWEBSITEhttp://www.bseindia.com/sensex-

strearnenjad

RECE,IVEA CON~IRMATIIONI mail

and SM S

CLICK ON THE LINK provided in

the SMS to downl'oad application

STARTAPPLICATION download-

ed on your mobile

VIEW SECURITY live strearninq

quotes and live market watch

EromInternet trading. it operates in more or less the same

way. To avai l the mobile trading option, you wi l l first need to

be a registered user of online trading offered by various

stockbrokers. I f you are a user of an on l i n e trading portal.

you can register for the mobile trading platform. The

stockbroker wil l then send you a link to down-load the trading application. Installing this

a pp is a must in o r d e r to buy and sen scrips

using the mobile phone. Both cash market

and futures and options (F&O) trade order

can be placed using the ccllphone,

Itw in allow you to place orders for buying

or selling securities. B r o k e r s wi l1 give a c c e s s

of their t e rm i n a l s to you through software that

will have to be uploaded on your phone.

Additional Costs. Similar to o nlm e trailing. in mobile trad-

ing. too, one needs three accounts to be maintained-bank

savings account. demat account and trading account.Exclucling the savings account. the other accounts come at a

cost. including 8n annual maintenance fee for the trading

account Also applicable would be the t r a d i ng costs, whether

itis a delivery-based trade o r an intra-day trade.

Placing Orders. Once you have entered the domain using

your user ID and the password. there is a section called Buy I

Sell to initiate your trades. You can also view the transaction

details like outstanding orders, order and trade search.

Security. Expect ethics of the highest order from your broker:

Reputed bruking llrms wi l l not give you trouble on this

count. but it pays to be on guard. Security parameters are

mostly the same as that 0 1 ' Internet trading. Security proto-col is the same: HTTPS. Orders placed by clients will be pro-

cessed through the broker's server and •.then, sent to the

exchange. Hence. stockbrokers wi l l have full control of the

risk factors.

One should. however. ensure that certain mandatory safe-

ty measures are taken by the broker. Being on wireless net-

work there is secure access. end-to-end encryption and secu-

rity of all the communicatioe. Adequate measures are taken

for user identilication. authentication and access control.

Unique identification number as given incase of Internet-

based trading shall be made applicable for securities trading

using wireless technology. Justincase, there is a failure of

the wireless network. a l t ema t lv e means of communication

such as telephone or Internet should be available, Also, you

must take care to ensure that the network security

protocols and interface standards conform to the prevalent

industry standards.

Additional provisions specifying possible risks, responsibili-

ties and liabilities associated with securities trading using

wireless technology should be incorporated inthe broker-

client agreement as an addendum, or b:ybringing to the

notice of clients who are desirous of availing such a facility.

Balakrishnan. however, warns, "It's not for active traders.

but for people who are mostly mobile and want to cash in on

the opportunity when it strikes." O J

[email protected]; [email protected]

In

mobile

trading, like

online, one needs

to maintain three

accounts

= hltp://lwiller.comjOiJllookMoney; hltp:f/www.facebDok.com/olmindia

http://digitaLoutlookmoney.com .10 AUGUS12011 • OUTLOOK. MONEY 23

mailto:[email protected];

http://digitaloutlookmoney.com/

http://digitaloutlookmoney.com/

mailto:[email protected];



I Pharma IPay Trends, I

BY MA FOI R.ANDSTAD

THE RIGHT SHOT FORPHARMA INDUSTRYrna foi randstad study,shared exclusively with

Outlook Mon . e y , takes alook at pay trends

ompen s a t i on an t i b en e tits a re

o fte n th e b ig ge st d rivin g fo re -

f o r an em plo ye e a n d h ave a

d ire c t im pac t o n h is o r h er

pe rfo rm a nc e. In th e f lr t i ns t a lmen t o f an ew se rie s o f stu die s o n c om p en sa tio n

tr en d s in spe cif ic in d ustr ie s, c o nd u cte d

COMPE,NSAT ' ION 'H IKE TR E NDS

2009-

2010 11 .20%- ------

2010-

201111 .90%

-

12+80%. 0 1 1 1 -

2012·

' P r o j e c . t e d

by H R c o nsu l ta n cy rn a fo i r a n dstad a n d

s ha r e d e x c lu s iv e ly w i t h O u t l o o k M O l l e y . ,

w e give (Ill in sig ht in to th e p ha rr na ce utl -

c al in du stry an d its fu tu re o utlo o k.T he ph arm a ce utic al in du stry r e po rt

w as a im ed a t u nd er sta n din g th e m ark et

p ra ctic es a nd tre nd s to b et te r align the

c o m pe nsa tio n str a te gy T h e sa m ple size

c om pr ise d a mix o f m ed ium an d la rge

o rgan isa tio ns, th e pre m ise b e in g th at a

sa m ple c om p risin g c om p an ie s w ith di f -

f e re n t l ev e ls o f r e ve nu e w o uld be r e p re -

se nta tive o f th e in d ustr y.

About the repott. rn a ra i r a nds tad

se le cte d 37 o rg an isa tio ns fo r th is su rve y,

b a s e d o n th e size o f th e o pe ra tio n s as

r ef le cte d by th eir re ve nu es. T h e organlsa-

tio n s c h o sen fo r su rvey w ere a m ix o fIn dian a nd g lo ba l c o m pa nie s. I n te rm s of

b u s in e s s a c t iv it y, a m i x o f r ese ar ch and

d e ve lo pm e n t. f or m u la tio n , p ro d uc tio n

a m i sa le s w a s c ho se n. T he · e f fo rt w as to

iden t i fy organisations w ith in te gr a te d o r

s pe c if ic o p er at io n s o f d if fe re n t sca l e an d

c om ple xity O rga nisa tio ns be lo ngin g to

a . ! J ' u r v e d a a nd spe cia lty h ea lth ca re p ro d -

u c ts o th er th a n th e ge n e r ic o n e s w e re

a l so r e p re s e n te d .



Pharma Pay Trends

II ,lobs. c.""," II Enterprise I Banking I Taxation I Insurance I Investing I Real Estate I Financial Planning I Flipside I

SALARIES ACROSS IINID'USTRY

FIRM S W IT H T URNO VIEIR

UP TO {',OOO CR60.000,

• Junior Management • Middle Management • Senior Management

The report provides an overview of the

HR ch a l l e ng e s that the in du stry m a y fa ce

in th e c om in g ye ars a n d d isc usse s th e

compensation trend for the last two years

with projections for 2011. The findings

very clearly suggest a positive incremen-

tal t e n d e n c y in t h e in d u st ry .

Human resource challenges. The

in d ustr y is l ikely to w itn ess fu rth er c on -

soUdation in the coming years. This

w o uld m e an that c om pan ie s w o uld f a c e

challenges in "leadership, talent reten-

t io n ' c r o s s- c u lt u r a l ability of emp l o y e e s

and so on", The industry witnessed a

sta f f tu rn ove r o f o ve r 2 0 pe r c e n t in

2010 and things are unlikely to be differ-

e n t this y ea r. T h e Significant r evenue

streams inthe past could be attributed to

sa les & m a rk etin g a nd re se arc h & d eve l -

opment disciplines, The migration o f tal-

ent to insurance, fast-moving c o n s um e r

goods (FMOG) and t e l e com industries

d oe s se em to po se se r io u s th re a t to th e

industry. T h is h as pro m pte d c om p an ie s to

engage illcompensation benchmarking

e xe rc tse s, d e ve lo p in n ova tive m e a su re s fo r

THE PLAYERSFolI'owiing functions have been

covered in the, survey report:

• Finance and accounts

• Human resource

• Information technology

• legal and secretarial

• Engi'neering and maintenance

• Production, manufacturing

and operations

• Quallity control and qualityassurance

• Research and development

• Sales and marketing

• Supply chain man,a,gement

Gr.~ic s. SA I l c.s.

trends has been noticed fo r th e f ir st q ua r-

te r o f 2 01]. T his is re in fo rc ed b y m a n y

o rg an isa tio n s d is tr ib u tin g p er fo rm a n c e

bonuses, unlike In 2009. The year-on-

year compensation increase is also a clear

pointer in t h i s regard.

Compel1lsation mix. A c h an ge in th e

compensation mix isvery much on the

c ar ds, w i th th e o bje ctive b ein g 'ta le n t

attraction and retention'. With a view to

w oo th e (J en -Y . o rg an isa tio n s a re cons i d -

ering revisiting the compensation mix,

wh i c h compris es th e f lxed c omp e n s a t i o n .

benefits and variable payouts.

Ano t h e r slgntlicant c h a n ge m ay be th e

increase in variable compensation, a

t re n d b ein g w itn e sse d o n a ye ar -o n -ye ar

oasis across industries. The phannaeeun-

cal in d u str y is e xp ec te d to k ee p pa ce w ith

the trend. While, global1y,the variable

component is as high as 30-35 per cent

of the cost to company in Jndia, it's pri-

m a rily lim ite d to th e to p ma n a g em e n t .

Under variable c omp e n s a t i o n , 'tndlvtdu-

a l p er fo rm a n ce ' se rve s a sth e WI l t o f m e a-

su re m en t. T h ts is d rive n by th e ph llo so -

rewarding and recognising employee per-

fo rm a nc e. va lu es a nd b eh avio urs, a nd

carry out employee engagement surveys

to id en tify th e e nga ge m en t d rive rs a nd

develop relevant HR programmes to fight

talent retention.

Compensation trend.T h e p ha rrn aindustry it was observed, performed

e xc e ed in g ly w e l l in 2010 . A similar

< ~worldl'\ag~ http://dlgital.oullookmoney,com .10 AUGUS120111.OUTLOOK MONEY 26



Pharrna Pay Trends

,....... ........Jobs.Careersl Enterprise I Banking ITaxation I Insurance I Investing IReal Estate IFinancial Planning IFlipsidel

Pharma PayTre:nd _ I Upnext~SelfEmp.lymenl:Stan-upApprovalspg28

.BENEFITS THATCOMPANIIES,IPROVIDE'TOEIMIPLOYEESThe various benefits analysed in the

survey renortare:

Working hours The working hours,

Saturday offs and lunch timings

observed in the industry.

Overtime The percentage of

companies paying overtime to

different cadres,

Leave Percentage of companies hav-

ing different kinds of leaves and also

their range.

Probation and confirmation Thepercentage of companies providinq

probation period to its employees;

confirmation and salary increases after

the completion of probation.

Loans Percentage of companies

providinq loan as a benefit to its

employees, interest rates applicable

for the repayment of the loan and the

repayment period.

Medical insurance Percentage of

companies providing me d i c a l lnsur-

ance; companies providinq coverageto dependents, the range of coverage

and the premiums paid.

Life insurance: Percen1agleof com-

panies providing life Insurance asa

benefit; coverage to dependents.

A.ccident iinsurance Percentage of

companies provldlnq accident lnsur-

ance asbenefit; coverage to depen-

dents, range of coverage and premium

paid.

"Jelephon.e/llaplo,ps Telephone and

laptop provision to emplloyees,eligibility and range of mobile re-

imbursements at different levels of

management.

*Note: Industry here is being referred to as

represented by 37 organisations.

. No of percent-Leave polICY companies age o~

c om p am e s

P ro vid in g C as u al37 100

Leave

P ro vid in g S ic k33 89

Leave

Provldinq Earned!37 100

P, r iv i ll e g e Leave

ph y th at pe rfo rm a nc e bo nu s d rive s

e m plo ye e m o tiva tio n a nd sh ape s th e ir

b eh avto u r; S e nio r m a n ag em e n t le ve l

e m plo ye es in In d ia a re r e w a rd ed th ro u gh

lo n g-te rm in c en tive s, su ch a s sto c k

o pt io n s a nd c om m issio n s. T h e ph ar m ain d ustry h as w i tn esse d n u m e ro u s

'e m p l o ye e -r e co g n it io n s ch e m e s ' d e ve l-

o p e d by o rg an isa tio n s t o m o t iva te

e m plo ye es a nd re w a rd th e ir p er fo rm a n ce s

d if f e re n t ly. T h e re m a y b e a pa ra digm sh if t

in b e n e fit s a n d p e rq u is it es t oo , if th e

D ire ct T a xe s C o de (D T C) c om e s in to e ff e c t

n e xt ye ar . C ha ng in g th e c om p en sa tio n

str a te gy w ith a vie w to a ttr a ct a n d re ta in

th e G en -Y w o rk fo rc e h as b ee n o bse rve d

a s a n e m e rg in g H R c ha lle nge .

A t tr it io n _ T h e d o u b le -d ig it a tt rit io n l ev el sa re l ik ely to c on tin ue , p ro m ptin g H R

d e pa rtm e n t s t o r ev isit ta le n t a ttr ac tio n

a n d r ete n tio n str ate gie s.

Compensation analysis ..T h e r ep or t

tr ie d to u n de rsta nd th e c om p en sa tio n

p ra c tic e s f or va rio u s le ve ls o f m a n a ge -

m e n t (ju n io r; m id d le a nd se nio r) a nd

f unc t i o n s . It c o ve re d t he o ve ra ll in d u str y

c om p en sa tio n fo r e ac h o f th e [u nc tio ns

f or e ve ry le ve l. T h e r ep or t a lso f ea tu re d

th e o ve ra ll c om p en sa tio n fo r e ve ry le ve l

f o r d if f e re n t l e ve ls o f r e ve n ue . T h e th re em a n ag em e n t l e ve ls , viz., s en io r , m i d d le

a nd ju n io r, w e re fu rth e r su bd ivid ed in to

sm a l le r u n its , c o ve rin g m u l tip le t it le s a n d

d e sig na tio n s f or b e tte r c la rity . T h e st ra te -

g ic ro le s w e re c ove re d a t th e se nio r m a n -

a ge m e nt le ve l, w h e re as o pe ra tio n al ro le s

a nd in d ivid u al c o ntr ib uto rs w e re c o ve re d

u nd er th e m id dle a n d ju nio r m a n age -

m e n t l e ve l s, r e sp e c tiv e ly :

T h e r ep or t a n alyse d c o m p en sa tio n

a cro ss n in e le ve ls in e ac h o f th e fu nc -

tio ns. In a dd itio n , it c ap tu re d so m e o f th ebene f i t s a n d po hc le s w h ic h fo rm pa r t o f

th e in d ustry pra ctic e . T h e d a ta c on sid e r e d

f or a n aly sis w a s t he c o st-to -c o m p an y,

w h ic h is W i de ly inp ra c tic e a cr oss o rg am -

sa tlo n s, T h e c o st-to -c o m p an y c o m p uta -

tio n fo r th e a na ly tic a l p urp ose d id n 't

in c lu d e va ria bl e c o m p en sa tio n (p er fo r-

m a n ce b on u s/in ce n tive /c om m issio n e tc ).

T h i s is b ase d o n th e pre m ise th atp er fo r-

m a n c e pa y a n d ta rge ts a r e b a se d o n th e

c o m p en sa tio n p hilo so p hy . st ra te gy , m a r -

k e t size , n a tu re o f o pe ra tio n s, a nd so o n ,

a nd , h en ce , c an h ave w id e va r ia t io ns.

T h e su rve y m a k e s it a ppa re n t th a t th e

CT'C EXPLAINEDM os to l r g a n i s a t io n s operate w i t h

the cost-to-company (eTC)

model. However, th e definition

for eTC is dltfers wlth differentcompanies.

The broad components covered

iin the compensation desi:gn are

as follows:

• Basic salary Thiis is referred as

the base pay of the employee

• Reimbursements Medicall

reimbursement, chlldren's educa-

tion, professional developl1i1lent,

and soon

• Allowances House rent alllow-

ance, leave travel allowance,special allowances, and so on

• Retirals Employees' Provident

Fundi, gratuity, ESIC, S'Ulpelr-

annuation

• Bonus Incentives/commission

(perfolrmance bonus/ex gratia,

and so on

• Perq,uisites Loans, company

lease accommodation, company

provided car, credit card, club

membership, and so on

• Benefits Leave., ho!lidays., medi-caliinsurance, group accident

coverage, liife insurance, hand-

helds, mobile phones, laptops

c om p en sa tio n b re is va ry a c ro ss fu nc -

tio ns a s m u ch a s th ey d o a c ro ss le ve ls .

W h ile l e ve l-b ase d c ha ng es a re c le ar ly

d ue to in cr e asin g sc ope a n d c om p le xity

o f w o rk , th e va ria tio ns a cro ss fu nc tio n s

a r e , pe rh aps, d ue to th e c om p le xity o f

w o rk pe rf o rm e d . c rit ic al ity o f th e f u nc -t io n o r ro le to th e o rg a nisa tio na l pe rfo r-

m a nc e a nd , pe rh aps, to ta le nt a va il a b il i-

ty Ju nio r a n d m id dle m a n ag em e n t L eve l

e m plo ye es w e re o bse rve d to h ave go t

h ig h er pa y in cr e ase s in pe rc en ta ge te rm s

c om pa re d to se nio r m a n ag e m en t le ve l

e m p lo ye es. In a dd itio n to a n in d ust ry-

le ve l a na lysis b ase d o n th e to ta l sa m ple ,

th e d ata w a s a na lyse d by l ou r d if fe r en t

size s (b ase d o n re ve n ue ) o f th e o rg an isa -

t io n s . .T h is w o u l d h e lp o rg an isa tio n s c o m -

pa re th e ir p re se n t c om p en sa tio n w ith

p ee rs in th e ir g ro u p. 0

[email protected]

"".... ")AOUTLOOK MONEY .·10 AUGUST 2011 • wwwoutlookrnonevcom,~"wormMgs

~ hllp://twitler.com/OuliookMoney; hllp:llwww.facebook.com/o.mindia



I Self Imployme!nt I

BY P.B. CHHAPGAR

STARTER'S SIGNALSDeloitte delineates theapprovals that are need-ed.from the authoritiesto set up shop

An a ppro va l m e an s a n o ff ic ia ls .a n c t.io n f o r a n. a c tiv ity f r oma regulatory or statutory

a uth or ity, W ith o ut h avin g

th e r equ isite a pp ro va ls, a b usin ess,

d epe nd in g u po n its p r o po s e d a c t iv it ie s ,

c an no t c om m e n ce .

B e fo re a n e n tr ep re ne ur t a k e s th e a ll -

im po rta nt d ec isio n to sta rt a bu sin ess,

she has to be a r in m in d all th e regulato-

ry re qu irem en ts w h ic h a re to b e

ob t a i n e d . It be c om es m o re im po r ta n t fo r

a se lf -e m plo ye d in divid ua l to be aw a re o fth e re qu isite a ppro va ls a n d a lso o f th e

in tr ic a cie s o f th e p ro c ed u ra l r equi r e -

ments, sin ce e ve n a seemingly mn o c u -

ous lapse could prove to be fatal 01'might

e ve n d er a il th e c o mm en c em en t d ate ,

thus upsetting the larger picture.

R e gu la to ry a ppro va ls g en era lly d epe nd

o n th e m od e in w hlc h th e bu sin e ss is

c ar r ie d o ut, th at is , w h eth er th e bu si-

n e s s is to be c a r r ie d o ut th ro ugh a c om -

pa n y, o r a pa r tn er sh ip f irm , o r a ln n lte dl ia bil ity pa rtn er sh ip . T h e n atu re ofacuv-

I tie s pro po se d to be c a r r ie d o ut . th at is,

w h e t h e r it is a m a nu fa ctu rin g c o nc ern

o r a tra d in g c o n c e rn , w he th e r it im po r ts

o r expo rts is a lso slgnlficant, and so is

th e a c tu a l l in e o f pr od uc ts ( th at is , pha r -

maceu t i c a l s , apparels, a n d so on). The

speci f ic ve h ic le th ro ugh w h ic h th e bus i -

n e ss is so u gh t to be c a r r ie d o u t fo r

o bta in in g th e p re sc r ib e d ta x o r o th er

b e n e f its (su ch a s a u n it in a S pe c la l

E co no m y Zo ne , R e se arc h a n dDevelopment e t c . ) is another c ru cia l fa c-

t o r . The fo rm o f f in an c in g is sig nif ic an t

to o (in c ase o f f ore ign fu nd ln g= se cto ra l

caps under the foreign direct investment

r e gu la tio ns w il l be applic ab le ) a nd so is

the location (involving municipal zoning

a nd p ol lu tio n c o ntr ol r eg ula tio n s) .

In today's day and age, an environ-

m e nta l c le ara nc e is a lso a pre requis i t e .

This clearance cnvtsages a wide legisla-

t iv e f ram ew o r k . c ove r i ng v ar io u s f ac e tsof environmental protection l ike air,

w a te r, n oise , f ore st c on se rva tio n , w ild life

protection, em t s s t o n of hazardous

w a ste s, a nd so o n, an d in vo lve s ge tt in g

an environmental impact assessment.

T he n od al agency [ o r e n vir o nm e n t al

c l e a r an c e is the Ministry of Envlroumcnt

a nd Fo re sts. I t u nd er ta ke s c on se rva tio n

a n d su rve y o f f lo ra . fauna. forests a n d

wi l d l i f e ; prevention a nd c on tro l of pol lu -

tion; afforestation and regeneration of

d egra de d a re as.V ar io us k in ds o f e n viro nm en ta l d ea r -

a nc es a re required. an d they s er ve d i ff e r-

e nt pu rpo se s. W a te r po llu tio n c le ara nc e

TIMEL,IINES FOR REGISTRATIONIThere are several laws for which you need to be reqistered accordingly

VAT REGISTRATION

With in 30 d a y s from th e

d a te on w hic h y ou r tu rn -

o v e r e xc e ed s p re s crib e d

lim it o f tu rn ove r.

S ! ERV ICE TAX W ith in a

p erio d o f 30 d a y s o f th e

d ate w he n a gg re ga te va lu e

o f ta xa b le s e rv ic e s p ro vid e d

e xc ee ds p re sc rib ed th re sh -old l imi t

PROVIDENT FUND IR IE G IISTR A TIIO N W ith in 1 5

d ay s o f th e c ove ra ge o f th e e sta b lis hm en t. Cove re d

e sta blis hm e nt iiSa n e sta blis hm en t b e lon gin g to th e

c la s s o f in d u s tr ie s / o th e r e s ta b lis hm en ts , w hic h h a s

b e e n lis te d in th e s c h e d u le a p p e nd e d to th e E mp lo y -e es ' P rovid en t F un d a nd M is ce lla ne ou s P rovis io n s A ct,

1 952 , w he re 20 o r m ore p e rs on s a re em p lo y e d .

PAN/TAN

N o s pe cific d ate ,

b u t h a s to b e

ob ta in e d a s e a rly a s

possible

E X CIS !E R E G IS TR A .-

TION Be fo re s ta r tin g

production ofe xc is ab le g oo d s.

"".... ".,OUTLOOK MONEY. 10 .AUGUST 2m1 • wwwoutlookmonevcorn,~"womlmgs



is re qu ire d to m a in ta in o r re sto re w h ole -

so m en ess o f w a te r a n d l ik ew ise f o r a i: r

p o ll ut io n . P u b lic l iabl l ity i n su r an ce is

n ee d ed to p ro vid e fo r d am a ge s to vic tim s

o f a n acctdent w h ic h o cc u r s a s a r e su l t

o f h an dlin g a ny h aza rd ou s su bsta nc e.S im ila rly , a n a nim a l w e lfa re c le ara nc e is

r equ i r ed to e nsu re p re ve n t io n o f in flic -

tio n o f u nn ec essa ry pa in o n a n im a ls. T o

p ro te ct th e wildl ife o f th e c o u n try a n d

p re ve n t o r c o ntr ol p oa ch in g, sm u gg lin g

a n d m egaIr a de in w ild lif e a nd its d er iv-

a t ives , a w il d li fe c l e a ra n c e ce r t i f l ca tes

m u st b e o bta in ed .

Ag a i n , to p re se rve th e c o un try 's fo re st

r e s o u r c e s , a f or est c o n se rva tio n c le a r-

a n c e cert i f icate m u st a lso b e o bta in ed .

B e s id e s t h is . a b io d iv er sit y c le a ra n c e c e r -t lf lc a te m u s t be ob t a l ned to c o n s e r v e bio-

l og t ca l r e so urc es a nd a sso cia te d k no w l-

e dge , a s w e ll a s f a c i li ta t t ng a c c e s s to

th em in a su s ta in a b le m a n n e r a n d

t h r o u g h a j u s t. p r o c e s s . Final ly, a c le a r-

a n c e c e r tif ic a te is a lso n ee de d f r o m th e

In d ia n F ore st S e rvic e to sc len t f l ca l ly

m an age a nd p ro te ct the f o re st s in d if fe r -

e nt pa r ts o f th e c ou nt ry.

A n a ppro va l is ge ne ra lly ju m ble d u p

w i th va rio u s r ep o rt in g r eq uir em e n ts. A

r e po rtin g re qu ire m e nt is a n in tim a tio nto th e a u th or it ie s c on ce rn ed o f th e c o m -

m e nc em e n t o f th e a ctivity.

Mo s t c om m o n r e gist ra tio ns a re th ose

u n d e r the In co m e -T a x A c t, 1961 (P A

a nd T A N ), se rvic e ta x l aws , VAT l a w s ,

S h op a nd E sta bl ish m e n t A c t, p ro fe ssio n -

EMPLOYEE STATE

INSURANCE CORPORATIONREGISTRATIION E v ery e m p lo ye r

to which the Employee State Insur-ance Act applies for the first timeneeds to make an application tothe authorities within 15days.

SHO'PSANDESTABLIISHMIENIT

ACT Re.gistrationWithin 30 days fromthe date of whichthe establishment

< ~worldl'\ag~

Self-employment

I Jobs & Careers I Ent.r,prl .. 1Banking I Ta)(ation I Insurance I Investing I Real Estate I Financial Planning I Flipside I

Up next~Clean'te.chentell\prisespg3Q

I INR!RIIEF

.The most

important

difference

between ar egu l a t o ry

approval a n d

regisnation, is

that notobtaining the

former can be

f a t a l to theexistence of

t h e ! b u si n e ss

a l ta x, la bo ur law s (P F a n d

E S]C ) a n d Im p o rt-E xp or t C o de .

E ac h le gisla tio n p re sc rib e s t he

t im e l imits w ith in w h ic h a n

e nt re pre ne ur o r e ntity sh ou ld

r e gis te r ( se e T im e lin es P orRegistration). Am o n g th e law s

fo r w h tc h spec i f i c r eg i s tr a t i on

timelines e xis t a re P AN o r

TAN , fo r w h ic h th ere is n o spe -

c i f ic d ate , b u t w h ic h n e ed s to

b e d o n e a s ear ly a s p o s si bl e .

P r ovid e n t f un d (P F ) r eg istr a-

tio n n ee ds to b e d on e w ith in a

fo rtn igh t o f th e c ove ra ge o f

t h e e s ta b li shm e n t .

T h e m o st im p o rta nt d if fe re n t ia tio n

b e tw e en a re gu la to ry a ppro va l a n d re g-ist ra tio n is th at n o t o bta in in g th e fo rm e r

can be fa ta l to th e e xis te nc e o r sta rt : o f

th e bu sin ess, w h e re as n ot o bta in in g th e

la t te r m ay n o t b e f a t a l bu t c a n , by a n d

la rg e , b e re gu la rise d by pa ym e n t o f p r e -

s cr ib e d f in e s o r p e n al tie s.

A sta r t-u p sh ou ld a lso e nsu re th at it is

r eg ist er ed u n d er the M ic ro , S m a ll and

Mednun E n te r pr is e s D e ve lo pm e n t Act,

2006. i f itqual if ies , s in c e t h is f ac il it at es

th e p ro m o tio n a nd d eve lo pm e n t o f th e

c o m pe tit ive ne ss o f su ch e n te rp rise s ..T y pic a ll y, a n e n te rp ris e is classl f led a s

m i cro , sm a ll o r m ed ium ba se d o n th e

lim it o f in ve stm e n t in p la nt a nd m a ch in -

e ry. O ne o f th e m o st f e are d p ro visio ns o f

t h l s A c t is th e l ia bility to m a k e in te re st

pa ym e n t in c a se o f a d efa u lt in m a k in g

PROFESSIONITAX REG-ISTRATIO:N

Within 30 daysfrom date onwhich liabilityfor professionta x a ris e s.

IMiPORT ANID

EXPORTCODE Before

undertaking ex-port or import.

p a ym e n t to a n e nte rp r ise re g-

is te re d u nd er th e A ct b e yo nd

th e s"e c i~ ed p er io d , w h ic h

c an , a n d d o e s , a c t a s a d o u ble -

e d ge d sw o rd .

A lso , th ere a re va rio us o th erp e rio d ic c le a ra n c e s and c h e c k s

o r a pp ro va ls re qu ire d , su ch a s

l i c en s e renewal u nd er th e

Fac t o r i e s Act, w h ic h c an

e ith er b e d on e annually orat

o ne go fo r a pe r io d o f a ro un d

live ye a rs; m e d ic a l e xa m in a -

tio n o f e m p lo ye e s; e n vir on -

men t a l h e a l t h an d s a f e ty

a u d it -w h ic h h a s to b e d o n e

in te rn a l ly o n c e in a ye a r a n d th ro u gh a

th ird pa rty e ve ry tw o ye ars.F u r t h e r , to pro te ct th e bu sin ess a nd

in tangib le wea l t h g en era te d . a n e n t re -

p r e n e u r sh ou ld a lso b e a r in m in d th e

provis lons vis-a-vis the p ro te c t io n o f

in te ll ec tu a l p ro p er ty r ig h ts lik e c o py-

r igh t. t r a de m ark s. pa te nts. d esign s a nd

so o n. E a c h o f th ese a re go ve rn e d by spe -

c ilk le gisla tio n a nd . h e nc e , it i s i m p e r a -

t ive th at th e in tr ic ac ie s o f e ac h o f th em ,

a s a pp lic a bl e. b e s tud l ed .

E m plo yin g pe op le c an a lso h ave its

o w n c ha lle nge s u nd er va rio us go ve rn in gre gu la tio n s. C o m pl ia nc e w i th th e p ro vi-

sio ns o f e ac h a pp lic ab le la w sh ou ld a lso

b e f ac t o re d into th e bu sin ess p la ns o r

st ra te gie s. T h e m o st c o m m o n l a b o u r

la w s a re I nd us tr ia l D isp ute s A c t, 1947;

P a y m e n t o f B o nu s A c t, 1965; P a y m e n t

o f G r at uit y Act, 1972; Mlnlmum W a g e s

Act, 1948. a nd P aym e n t of W a g e s Act,

19'36. T he re a re m o re .

Rou t i n e c om p lia nc e w ith th e in nu m er-

ab l e requirements u nd er th e va rie d tax

law s go ve rn in g a bu sin ess c an a lso be

c h al le n gin g ..T h e re a re p e rio d ic c o m p li-

a n c e s to b e m ad e u n d e r bo th th e d ir e c t

a nd in d ire c t ta x la w s. F ailu re to m e et th e

c om plia n ce d ea d lin es c an a ttra c t le vy o f

f in e s o r p e n al tie s.

N e e d l e s s to say , a f t e r c o n sid e rin g th e

a bo ve r ule s. r e gu la tio n s, la w s a nd c le ar -

a nc es n ee de d w h ile sta r tin g u p a f irm ,

o ne w o u ld n o t b e w ro ng in sa yin g "bo rn

f r ee , r e gu la te d to d e ath '. I

P.B.Chhapqar is partner, Deloitte Haskins and

Sells. The views expressed here are personal

f,eedback@o!ltlookmoney.com

~i htlp:/l,wilter.com/OurlookMoney; hllp:llwww.facebook.com/olmindia

http://dlgrtal.outlookmoneY.Qom .,10 AUGUST 2011 • O UT LO OK M O NE Y 29



I Clleantech I

BY ANAGHI PAL

GAIN FROM GREENTechnology that does

goodw hHe rakin g

inp rofits is a sm art

bu sine ss opportun ity

Bc kin 2 008 , f in an cia l a na -

l ys ts.M e r ri ll ~ yn c h p re d ic te d

th a t th e w or ld w as o n th e c u sp

o f the 's ix th r e vo l u ti o n ',

w h ic h w o uld r iva l th e in du str ia l re vo lu -

t io n a nd a ll te ch no lo gic al le aps .. "W e

be lie ve c le a n te c h is a t th e begin n in g o f a

h igh -g ro w th pe r io d , m u ch lik e c ompu t -

in g w as in th e e a r ly 19 70s." Steven

M i lu no tr ic h . c le an te ch str ate gist f or th e

finn. had said. adding that it w o u ld lead

to S ig nif ic an t lo n g te rm in ve stm e n t

o p po r tu n it te s b e gi nn in g 2010-11.

T hre e ye a rs an d o n e ra th e r m essy

lmanclal crlsis l at er , e xp e rt s are still be t -

t in g o n th e h uge po te n tia l o f th e se c to r.

W i th th e w o rld grapplin g w ith high oil

pric e s, g lo ba l w a rm in g an d sh or tage o ff o ss il f u el s. f e w w i ll d is ag re e .

C le an te ch G ro up, a m a rk et In te ll ige nc e

H rm o n c le an te ch in no va tio n expla in s

c le an te c h : "re pre se nts a d ive rse ran ge o f

pro du cts. se rvic es. a nd pro ce sse s, a ll

in te nd ed to pro vid e su pe rio r pe rfo r-

m an ce a t lo w er c osts. w h ile gre at ly

re du cin g o r e lim in atin g n ega tive e co lo gi-

c a l im pac t , a t th e sam e tim e im pro vin g

th e pr od u ctive a nd r espo n sib le ise o f

n a tu ra l r eso u rc e s", It d ist in gu ish e s t he

t er m .f ro m 'g re e nt ee h ' b y vir tu e o f

broader market e co n om ic s, g re ate r

f in an cia l u psid e a nd su sta in aln lity (Fo r

th e d jf fe re nt in du stry ve rtic als u nd er

c l e a n te c h , s e e \ 1l l\ g\ l\ i. [e s e a rc h . c le a n t e ch .

c om /bro w se -ta xo no m y. )

C le an te c h is, th us, n ot ju st a bo ut pro -vid in g a so lu tio n to c usto m ers; it 's a bo u t

d oin g go od to th e e n vir on m e n t a n dg e n -

c ra tin g a ttr a c t ive re tu rn s a t th e sam e

t ime . How ev e r , fo r a ll it s po te ntia l, th e

se cto r h as n ot exac t ly ta ke n o ff be c au se

o f som e o f its i nh e r en t p e cu l ia r it ie s.

The f und in 8 re qu ire m en t .. " fany d e a n -

t e ch c omp a n i e s successru l lv c ro ss a ll th e

AREAS OF OP'P 'ORTUNIT IE SWater: Clean water, tres.tment: Collec- of networking and

water recycling, tion, disposal, trans- computer tech-

water treatment, fer and recycling nologies to make an

purification and of municipal and electrical grid more

conservation industrial waste efficient

Clean energy gen- Lighting: Efficient IDistributed power

eration: Solar, solar street lighting. generation

thermal, wind and cornmerctal llqhtlnq, technol~ogy: De-

biomass industrial lighting centralised electric-Energy efficiency: Smart gridltechnol- ity generation from

Reducinq 09Y: Application small sources for

energy consum.ption . ~ remote Villag.esthrough . ~ IRuralenergy

waste heat < D 1 ' , @ ~ t : :2 \ SOluti.ons:Solar,recovery. \!J W ~W LE D lighting

efficiency of ~ ~. .. g . solutions for

industrial S ;,,,~- ~ . " # cand home z ~~.~/.Aequipment. ~~~ ..reduction of trans- "2

mission loss, storage ~Waste manage~ ~~

rnent and eff,luent ~~~

"".... ~n.OUTLOOK MONEY .10 AUGUST 2011 • www.outlookmoney.com, ~ "wo tm~g s

G r ap h c s. V I IR U N V ,\S HI 5H TH A





uqmdI Jobs & Careers I Ent!!1prl.. 1Banking' Taxation 'Insurance 'Investing I RealEstate I Financial Planning I Flipside I

V ISHALKOUL

te ch no lo gy h urd le s, bu t stu m ble w h en it

c om e s to th e m a r k et, " says Madh av a n

N a m po o th tr t , se n io r c on su lta nt . E ne rgy

A l t e r n a t i ve s In dta , a c o nsu lt in g a n d

re se arc h g ro up d ed ic ate d to r e ne w ab le

e n e r g y a n d c le a nte c h.In c om p ar iso n to IT sta r t-

ups , c l e an t e c h p r o j e c t s

r eq uir e h ig h in ve stm e n t

up f r on t , " A c l e an t e c h

in f ra st ru c tu r e p ro je c t

n e ed s a L ar ge i n ve st-

m e nt in c apita l e xpe nd i-

tu re ; e qu ipm e nt o r se rvic e

pro vid ers re qu ire s fu nd s fo r

m . a n uf ac tu r in g f ac il it ie s w h i le e a rl y st ag e

c o m pan ie s w an t c apita l fo r R &D," says

S an de ep S in gh al , c o -fo u nd er . N e xu sV e n tu re P a rtn e rs.

L ac k o f e a lr ly ·s ta g e fu n d in .g . "Ear ly s tage

inves tor i n te r es t in In dia is sp o ra d ic , b u t

s om e U S a nge ls (o f In dia n or ig in ) in ve st

di re c t ly in c o m p a n ie s in I n d ia ," s ay s

S a n jo y S a n ya l. d ir ec to r . N e w V en tu re s

I nd ia , w h ic h p ro vid e s b usin e ss d e ve lo p-

m e n t se rvic es to e nviro nm e n ta lly fo cu se d

Si\if f is in e m e rg in g m a rk e ts .

B e in g a r ela tive ly n e w f ie ld , c le an te ch

h as n ot ga th er e d c rit ic al m a ss in th is

re sp ec t, T h ose w h o b urn t th eir l in ge rsd u rin g th e f in a nc ia l c risis. sa ys

N a m po o th ir i, w o uld ra th er in ve st in

Debt

funding is

more easily

available in the

early stages in

India

ASHOKD.

PARANJAPE 65

SH REESHB. KEDARE (R) 47

Name of Company

.~~.!.9.~~.~~~.~r

What they do:Develop selar thermal energytechnologies for heating

.~~~.!?~.~.I.~!:!~.Founded in

2000

Their advice to CleantechEntrepreneurs

• Go to the market as fast.as possible. Use feedbackto innovate •

• Choose partners who can

bring complementary skills tothe business.

http://digital.outlookmoney.com • 10 AUG'UST 2011. OUTLOOKMONIEv31< ~worldl'\ag~

http://digital.outlookmoney.com/




'u C i j@ iN

I Cleanlech,lI Jobs & Careers IEntarprlselBanking IITaxation IlnSUlrance I Investing I Real Esta te I Financial P lanning IFlipside II

"later stage businesses that promise safer

in ve stm e n t a nd sh o r t-te rm re tu rn s" ..

In view o f th e state o f th e e co no m y,

a n g e l in ve sto rs w h o h ad ba n ke d o n

eg r e s s s t r a teg i e s -i n s te a d o f w a itin g fo r

th e lo ng te rm -h aven 't b e e n a b le t o p u lloff successful e xit s. S a ys A n il Paranjape,

d i r e c t o r , Pus i on t e c h V e n tu re s, I nd ia 's so le

'cleantech-only' early sta ge fu n d. "S o m e

o f the in ve stm e n ts w e re m a d e in me - t o o

f ash io n a n d the c o m pa n ie s fa ce d a s imi la r

se t o f p ro ble m s" .

Other funding sources. In c om p ar iso n to

equi ty f und i ng , d e b t fu n din g is m o r e eas i -

l y ava i la b l e in th e e ar ly sta ge s. B a nk s, f o r

in sta nc e. f u nd c le an te ch pro je cts, o fte n

u nd er lo an agre em e nt d ea ls w ith fo re ign

b an k s.I n I nd ia , th e I nte rn a tio n alF in an ce C orpo ra tio n (a pa r t o f th e W o r ld

B a n k ) h a s b an k ro lle d s ev er a l c le a n te c h

pro je cts . in c lu d in g A zu re B o w e r a nd

H u sk P o w er S yste m s. th ro ugh d eb t-e qu i-

ty f i n a n c i ng .

T h e M in istry o f N ew a nd R e ne w ab le

E n e rg y ( lV . lN R E )oots u p to 5 0 pe r c e n t o f

th e p ro le c t c o sts f or c e rta ln r en e w ab le

e n e rg y p ro je c ts . I t p ar tl y f u n d e d a n R &D

pro j e c t fo r C ltq ue S o la r. w h ic h h as d eve l-

o pe d a so la r d ish th at h elps r e d uc e fu el

a n d c arbo n e m issio ns in h ea tin g a n dc o olm g p ro c esse s. G u ja ra t p ro m o te s

cleantech c omp a n i e s , hut m o s tl y f o cu se s

o n re ne w ab le e ne rgy.

Availability of research infrasteucture ..

"T h ere is a lso a la c k o f la b s a n d te stin g

f a c il it ie s f o r e n t ry l e ve l f ir m s ." says K u n a l

Upadhyay . C E O . C e n te r f o r I n no v at io n

I n cuba t i o n and E n tr ep re n eu rsh ip . w h ic h

is w o rk in g w ith th e U nio n go ve rn m en t in

t he c le a n te c h space, '~ e a r ly p a rt n e r-

sh ip w ith th e r igh t in stitu tio n o r c om pa -

ny canbevery

h e lp fu l, " s ay s A n ir u dd h aS ha rm a . o f C arbo n C le an S o lu tio ns

(CCS) , a c o mpan y fo un d e d in 2 009 by

tw o lIT gra d ua te s to h elp po w er p la n ts

a n d industrial u til it ie s r ed u c e t h eir car-

b o n e m i ss io n s.

The promise a h ea d . T h e future. t h o ug h ,

i s l o o k in g up. Marro] Gup t a , w h o h an dle d

Nexus ' s cleantech por t f o l lo t il l r e c e n t ly

says, "In th e n ext tw o -th re e ye ars th e

fu nd in g sc en ar io w il l a ga in b ec om e ve ry

exciting." Itis th us a go od tim e to sta r t

w o rk fo r su sta in ab le a nd sc ala ble c le an -

tech e n te rp rise s in o rd e r to s ee k f u nd in g

in a c ou ple o f ye ar s.

THE SUCCES,SPRINICIPLIES1 1 1 . \ Look to build a business that

Wcan sustain itself in the longrun without subsidies, even if they are

required to get the business going. 00

not bank on future subsidies.

I~.·. - .. Develop an ability to work. wjth

'<til politicians and bureaucrats as

the sector has a lot of regulations and

government involvement.

I~.'~. E'nsure that you are adequately

~ funded and have sufficient

long-term working capital, especially

for ventures that require a lot of R & D .

Look for investors who are know l e d g e -able about the cleantech industry, and

avoid capital-intensive projects unless

you are sure:how they can be funded.

1 0 . . . Consldertimeframe for an op-

• . portunity to get commerdalised

and start generating profits.

A. Adapt to new trends and

IVdemands. Ensure that the core

competencies you provide are broad

enough and can change with fast-

changing technology.

O Focus on particular solution, aI particular geography and a par-

ticular set of customers to begin with.

19. Study the market an~ industry.'=' Leam from others' mis t a ke s by

talki,ng to existing players in the same

and related fields.

11:\, ~ducatetheco~su":,er. This

\l,I IS the key e spe c i a l l y If you are

working in the area of execution. While

energy efficiency will work for B2 B cus-

tomers, energy availability could be

the thrust in case of B2C businesses.How you pitch your product is also lm-

portant, as the consumer needs to see

visible economic benefits along with a

viable solution to an existing need.

"M o r e th an fu n din g. th e e n tre pre ne ur ,

th e te ch n olo gy, a nd th e r igh t b usin ess

m o d el a re c rit ic al ," sa ys P ara nja pe , su g-

gesting th a t if a ll th ese f a cto rs in p l a c e ,

VCs c ou ld be agreeableto e ar ly sta ge

f u n dm g , CCS , fo r m sta nc e, h as r ec eive dea r ly-s tage funding f r om global i nves to r s .

Tlhe role of the g:overnment. T h is s ec to r

d e pe n ds r ath e r heavtly on g ov e r nme n t

r e gu l a t i on s a n d p o lic ie s . .T h e National

So l a r Misslou, w h i c h enetsagcs a n

in s ta l le d s o la r gen e r a t i on c ap ac ity o f

200,000 \ \ I JW by 2050 on th e ba c k o f

th ou sa nd s o f c ro re s o f r up ee s in gove r n -

m e n t in ve stm e n t. h as g ive n a h u ge b oo st

to th e so la r po w er se c to r. In i t i a t ives l ike

lT I (mdE l t i ng po w e r c o m pan ie s to so urc e a

f ixed pe r c e n t age o f po w e r f ro m re ne w ab lee ne rgy so urc es h ave a lso h elpe d. M N R E

h a s a se t o f s ub sid ie s f o r d if fe re n t b u si-

n esse s in th is spa ce . H o w eve r, a la ck o f

c la rity o n se ve ra l issu es c on tin ue s to c on -

f u s e e n t r e p re n e u r s .

Slddharth Nauttyal d ir ec to r , B e s se m e r

V e ntu re P ar tn er s In dia . sa ys, "T h ere h as

been a f a ir am o un t o f po lic y f lu x in th is

sp ac e. B u sin e sse s h ave to a sk th e m se lve s

if t he y w il l m a ke m o ne y in th e c u r r e n t

sc en ar io . n o t lo ok to w ard s fu tu re subsi-

d ie s o r p o lic y c h a ng es ."Consumer awareness and eduoatlon,

C le a n te c h c u sto m e rs , w a rn s e xu s s

S i ngh a l , "wi l l d e m a n d the s am e q u al it y

(a s th e y f ro m c o nve n tio n al te c hn o lo gy) ,

wi l l negotiate as h a r d on p ric e a n d w il l

n ot c a r e w h eth er yo u a re d oin g go od ".

S o itis n ec essa ry to d em o nstr a te a

d ire c t, visib le e c on o m ic im p a ct . T h e p ro d -

uct pitc h a n d th e bus iness m o de l a r e c ru -

c ia l in th is sc en ar io . W h H e B 2 C se t-u ps.

t e n d ! t o w o r k w e llif th e e ntr e pre ne ur is

so lvin g a n e n er gy availability p r o b l em -spe cia l ly in th e ru ra l a r e as-B 2 B e nte r-

p rise s h ave a n a dva nta ge a s c om p an ie s

are m o r e amenable to o n e-tim e in ve st-

m e n ts f or lo n g-te rm savings. "W ith th e

h e lp o f ta x so ps lik e a cc e le ra te d d e pr ec ia -

tio n a n d th e M R E s u bS id y, th e pa yba c k

p er io d fo r equ l tp in ve stm e n t b y a c lle n t

c an b e a s lo w a s tw o ye ars ," says S h ir e esh

Keda r e , c o -f o un d e r, C liq u e S o l ar .

I lpa dh ya y su m s it u p: "T h e c ha lle nge s

a re m a ny, bu t th e o ppo rtu nity is b ig ."

S o , th ose w h o sta r t e ar ly w iU h a ve th e

e a rl y-m o v e r a d c an ta ge n

anaghpal@outlookindia_com

"".... ~~."OUTLOOK MONE·Y .10 AUGUST .2011 .' www.outlookmoney.com,~" wornr~g5

III h t l p :! ! tw i tl e r .c om !Ou t !o o kMon ey ; h l l p :/ ! www . la c eboo k . com /o !m ·n d i a





lid'fj§.t.tj

I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estate I Financial Planning IIFlipside I

Up next I :l I'nterv iew: Jayant nua, ' C EQ , Birla Sun lLife,Insurance 1P934

BYSUNILDHAWAN

BIMAADVANTAOEThe plan from Future Generali offersthe option to enhance life coverage

B

u n a Advan..ta ge f ro m F ut ur e G e n er a, l i is a r e c en t l . 'y-in tr od uc ed u nit-lin ke d e nd o w m en t p la n, Itis a

Typ e I u n it- lln k e d tn s ur an c e p lan (Ul ip) t h a t g ives

h igh er o f th e sl im a ssu re d a n d fu nd va lu e a s d ea thbe ne fits to th e n om in ee s. O n m a tu rity o f th e po lic y, th e fu nd

va lu e a s o n th e d ate o f m a tu rity is pa ya ble to th e l if e a ssu re d .

Enhanced coverage. T h is p la n . u nlik e o th er p la n s, o ff e rs a n

o ptio n to d o u b le yo u r c o e e r th ro u gh a n e n h a n c e d in su ra n c e

c ove r w h ic h c an be o pte d fo r o nly a t th e in ce pt io n o f th e po lic y.

On e m ay in c re a se th e am ou n t o f pro te c t io n o ve r an d a bo ve th e

ba sic su m a ssu re d . bu t n ot by m o re th an th e b a sic c ove r,

F le xib ility . T h e p la n h a s se ve ra l f l ex ib le fe atu re s, su ch a s c h o i c -

e -so f po lic y te rm . b a sic su m a ssu re d , e nh an ce d in su ra nc e c ove r

a n d a h ost o f o ptio ns lik e sw itc h in g , re d ir e c t io n, pa r tia l w ith -

d ra w a ls a n d su rr en d e r.

P ar t ia l w ith draw a l!s. P ar tia l w ith draw a ls a r e a l lo w ed a f te rc om p le tio n o f th e lo ck -in pe rio d o f in itia l f ive ye ar s. Fo ur f r e e

pa r t ia l w ith draw a ls a re a llo w ed in a po lic y ye ar . T he re af te r. a

c h a r g e o f ~ 2 00 w iu be le vie d pe r w tth dr aw a l. T h e m i n i m um

am o u n t that c a n be w ith dr aw n is ~5.000. T h e Fu nd V a lu e a fte r

th e pa r tia l w ith d raw a l sh o u ld b e e qu a l to a t le a st o n e ye a r 's

annualised basic p re m iu m . P a rtia l w i th d ra w a ls can be m ad e if

th e l ife a ssu re d a t th e t im e o f w ith d r a w al is 18 o r a bo ve . o r by

th e p ro po se r d u rin g th e m in o r's l i f e t ime .

Death Benefit. I n c ase o f d em ise o f th e lif e a ssu re d d ur in g th e

p ol ic y te rm w h ile th e po l i cy is in fo rc e , th e n o m in ee re ce ive s th e

h ighe r o f b asic su m a ssu re d. o r fu n d va lu e u n d er th e po lic y o r

105 pe r c en t o f th e b a s ic premiums p a id l es s d e d u c tib le p a rt ia lW ith d r aw als. ( if a n y) a lo n g w ith e n h a n c e d in su r an c e c o ve r

su m a ssu re d (if any ) .

FEATURESM in im u m e n l r y a g e

M a x im u m e n t r y a g e

P o li c y t e rm

P r e m iu m I p a v in g t e rm

M i ni mum p rem ium

(forterm 1 5 , a n d above)

M i nim u m p re m iu m

(forterm be l~ow 1 5 )

M a x im u m s u m a s s u r e d

( fo t term 1 5 , a n d above),

7 y e a r s

8& y e . a r s

1.0 to 30 years

Regularpremium

~

.~!;i.!11&.OOO" ~20.000'

60 tim es of annualpremium

F U N D I C A G R " S IN C E HEAR E Q U IT Y E X P O -

I N C E P T I O N ! % l R E T U R N ( % ) S U R E ( % )

F u tu re S e c u r e 9.74 10.&3 0

F u tu re I n c o m e 1,2.05 13.25 0'

F u tu r e B a la n c e IOA3 11.32 30~80

F u tu r e M a x im i s e 1;3.29 1'4.76 &0~80

F u t u re A p e x 5.31 1.39, &0~100F u t u r e O p p o r tu n it y ·3.011 -3.03 80~100

' C A G R is compounded annua l i sedgrowth ra t e . A ll r e lums a s o n 3 1 M a r c h ' , 2 0 1 1 .

COST STRUCTIUREPREMIUM ALLOCATION CHARGES (% OF ANNUAL PREMIUM)

1.10 p e r c e n t to 1.3& p e r c e n t o f lundvaluea y e a r

POLICY ADMINISTRATION CHARGES

~1.000- •• 000 depending 0 1 1 thepo lic y ye al a nd thepremiumspaid.

N o c h a r g e s a ft e r 6 v e a r s .

Costing. T h e plan gives ~9,69,093 a n d ,{B, 62,487, if a 35-

year-o ld m a l e in ve s ts ~5 0, 000 ' a n n u ally fo r 15 ye a r s w ith a sum

a ssu re d o f no lakh at a n annual r a te of 6 p er D en t an d ]0 pe r

c en t, re spe ctive ly. pro vid ed th e e n tire am o un t is in ve ste d in a n

a ll -e q u it y f u nd . .T h e n e t yieldis3.15 pe rc en t a n d 7.15 p er c en ta t 6 pe r c e n t a n d 10 p e r c e n t. r e sp e ct iv el y.

Comparison,. Fo r sim ila r p la n s, su c h a s I n ve stA ssu r e F le xi

S up r em e f rom 'I at a A lG L il t: a nd A viva F re ed o m Life Advan t age

f ro m A viva L ile In su ra n ce , th e n et yie ld c om e s to 7 .4 9 pe r c en t

and 7.81 per c e n t respectively at an assumed annual g r ow t h

rate o f 10 p er c e nt .

W hat to do, T he m axim um c o ve ra ge o ffe re d .is b e tw e e n ]0 to

25 t im e s o f the pre m iu m pa id a nd m o st ly d epe nd s on th e e n t ry

age . Even t h o u g h th e l im i t is h igh a n d su f f i c i en t fo r mo s t a g e s .

o ptin g fo r th is e nh an ce m en t in cre ase s th e to ta l c ove r c on sid er -

ab ly . [f o pte d . e nsu re to k ee p pa yin g pre m iu m s all th ro ugh th e

ye ars , a nd r un t il l m a tu rity. R e m a in in ve ste d in th e a pe x f un d til l

th re e ye ars a w a y f ro m m a tu rity 0

sun i l dhawan@ou t IQQk ind ia .CQm

< ~worldl'\ag~~ http://twitler.CDm/OutIOQkMDney;hltp:/IwwwJacebook,com/o!m·ndia

ht tp : / /d lgi ta l .out lookmoney,com .10 AUGUST 20111.O'UT~ OOK M ONE Y 33



P h o to ; B H Ll P IND E R S IN G H

""....w ~OUrLOOK MONEY .10 AUGUST 2011 • wwwootlookrnonevcorn,~" o~gs



I IJobs & Careers I Enterprise I Banking I Taxation I i n s u r a n c , e , I IInvesting I RealEstate II Financial Planning I Flipside I

Up nex t = Ilhllesting: Miniingl Stocks pg' 38

Ifflij'.

JAYANT DUA CEO, BIRLA SUN LIFE INSURANCE

'UL IPS ARE ST ILLIMPORTANT 'WithUlips losing steam, questions are being raised about their

feasibility. Jayant Dua, CEO, Birla Sun Life Insurance Company,

dispels such fears in an interview with Sunil Dhawan

I I : ] Unit·~inked insurance plans (Ulips) are,witnessingl a,

slowdown in sales. BirlaSun Life Insurance Company

has been a pioneer linUlips in Ind'ia. Are you redesigningl

the product in any way? What coul'd be the, face of new

Ulips in times to come?

U lips w e re th e h tgh est-se ll in g p ro du cts a t o ne po in t o f tim e

a s the} ' o f fe r a n o pp or tu n it y to e n t e r th e equ ity m ark et. W h en

yo u lo ok a t th e c ou nt ry 's d em og r a p h i c s a n d ! w h a t Ulips o f fe r t o

yo u a s a c u s t om e r , it is a va lu ab le p ro du ct go in g fo rw a rd .C ur re nt re gu la tio ns h ave o nly m a d e it m o re a ttr a c tive fo r c us-

to m e rs. A s f a r a s in n o va t io n is c o nc e rn e d , w e h ave la u n c h ed a

p ro du ct c al le d 'Fo re sigh t'. w h ic h h elps c ove r m a rk e t u psid es

a n d d o w n sid e s. U l ip s w i ll c o ntin u e to b e a str o ng pro du c t a n d .

fo r u s to o , it's a f o cu s a re a ..A fte r th e re du ctio n o f c om m issio n

in Ulips , w e re al ise d , a s a n :in du stry, th at th er e is a s e gm e n t

w h er e pe op le a r e m o re t ra d itio na l in th eir e xpe cta t io n o f

re tu rn s. T h at , Ih in k . is a n a re a w h ere a u ew In dia is e m erg -

in g. w h e r e yo u a re e xp lo rin g pa rts o f th e c o un try to wh i c h .

eerlier, yo u w e re n ot se llin g. T h e in du stry is n o w f in din g a

p la c e b e tw e en th e tw o pro du cts-tr a d itio na l in su ra n ce a n d

Ulips , T h e pr im a ry re aso ns fo r th is a re th at d ist r ib u tio n c ostsh a v e to be c ove re d a nd Ulips h ave u nd e rg on e str uc tu ra l

c ha n ge s. B u t to sa y th at U lips are n o t an im p o rta n t c a te go ry

a ny m o r e isn 't r ig ht .

I I : ]With falling incentives, it may not be very

feasible to ,enter the industry. Do you foresee

any shortage of a,gentworkforce in the indus-

try in future?

W h e n w e sa t a t th e d r aw in g bo a r d , o n e o f th e

m o st Im po r ta n t po in ts th a t c am e u p w as th a t th e

a ttr a ctive ne ss o f th e in du st ry w o u ld c om e into

qu estio n. A nd yo u d id s e e ' d e g row t h ' : U l ip s a le ssh if tin g th e ir p osit io n a nd sin gle p re m iu m p la ns

c om p risin g a n in cre asin gly la rg e po rtio n o f th e

m a rk e t fo r so m e p la ye rs. W e , th ere fo re , th ou gh t o f i n c r e a s i ng

th e e nga ge m en t le ve l o f a d viso rs. W e h ave r e ta in ed o ur b a se

b e c a u se o f th at a n d o u r p ro d uc tivity h as a lso im p ro ve d . T h e

fo cu s o n tr a in in g h as in cre ase d. w ith a c om ple te ly n ew tr a in -

in g m od ule b e in g c re a te d . A fa ir n um be r o r pr od u ct r ollo u ts

h a ve h a pp en e d p o st -S e pt em b e r 2010 (w h e n th e n ew Ulipguide l ines t o o k e ffe ct) . C on se qu en tly, th e a ge nt fo rc e a nd

c ha n ne l pa r tn er s n ow se e m e rit in qu ality bu sin ess . w h ic h. in

tu rn , h elps th em m a in ta in th eir o w n bu sin esse s go in g fo r-w a rd . T h ese a re sh o r t -te rm issu es , w h ic h wi l l im p ac t a ny

industry w h en yo u se tt le d ow n into a n ew e nvir on m e nt. We

a ll are r e al ig n in g o u r se l ve s to f a c e th e fu tu re , w h i.c h h as a

h u ge p o te n tia l fo r g ro w th ..S in ce th e se co nd h alf 2 01 .0 , our

fo cu s h ad be en o n re te ntio n. F r o m th is f isc al . w e a re a d din g

su bsta ntia l n um b ers to o ur a dviso ry fo rc e.

~ Selling of market-Il inked plans requires additional

skiill. Should extra certification be,made mandatory

before selling th.em?

I RDA (In su ra nc e R e gu la to ry a nd D eve lo pm e n t Authority) is

w o rk in g w ith e xte rn al a ge nc ie s o nan ew c ur r ic ulu m , w h ic hm igh t be r o lle d o u t b y e n d o r Q3 ( ar o u n d O c t o be r -N o v em b e r ).

Y ou n ee d to lo ok a t th in gs f ro m th e c usto m e r 's lif e -c yc le po in t

o f vie w . W e b elie ve th a t adv lsors sh o uld b e tr ain ed

The focus on

tralining has

increased ... A

fair numberof product

rollouts

have hap-

pened post-

September2010

to d o th at in ste ad o f fo cu ss in g o n pro du cts.

I:lRecent reports suggest that insurers can

tie up with t.wo bSlnks.What's your take on it?

W e vvHIge t in to a re la tio nsh ip th at . w e be lie ve ,

c an c re ate va lu e. T ha t 's th e " ,my w e seebancassur-

a nc e. I t 's th e va lu e c re atio n f o r bo th e ntitie s

th at 's go in g to b e im po rta n t a n d n o t ju st th e

tie -u p. G ivin g c ho ic es to th e c us to m e r is th e r igh t

w a y f or w a rd . 0

[email protected]

< ~worldl'\ag~= hllp://lwiller.com/OUllookMoney; hllp:l/wwwJaceOOok.oom/olmindia

Ilttp://drgital.out,lookmoney.com.10 AUGUS12011 • OUTLOOK MONEY 3&



I Stocks I

BY RAJESH KUMAR

PROFIT-SHARINGBLUES FOR MINERSJ uly 2 0 11 (S e e Ups & Downs) .

S om e sto ck s h ave , h ow eve r ,

r ec o ve re d sin c e.

T e ch nic ally, th ou gh , it 's n ota

d on e d ea l ye t. T h e re vise d B iBwi l l h ave to be first c le are d by

th e C ab in e t , a fte r w h ic h it wi l l

be tab le d in P ar liam en t, h ope -

fully, in th e m o n so on se ssio n .

B o th H o use s will h ave to pass

th e B i l l be f o r e it be c om e s a law .

As th in gs stan d , th e re is a lo t o f

ambiguity S ays G au ra v G ua ,

h ea d o f re se ar c h , S ha re k ha n , a

b ra kin g h ou se : "I t 's n o t c le ar if

th e o utf lo w s will g e t a d ju s te d

aga ins t tax; wi l l th is b c over a n d ab ove th espe nd in g th at c om p an ie s a re in cu rr in g

u nd er c o rp ora te so c ia l responsibility?

W h a t h appe ns to th e spe nd in g a l r eady

d on e in th e a r e a s to h elp th e lo ca l po pu la -

t i on?" It is n o t c le ar i f th e pro po sa ls a re

fo r t he e xistin g m in es, o r th e o ne s w h ic h

will be le a se d o ut in th e fu tu re . I f it

in c lu d es th e e xistin g o n es, th e p ro visio n

c o u ld be im plem en te d re tro -

sp ec tr ee ly, in c urr in g a h u ge

bu rd e n o n th em . N e ith e r is it

d e a r as to h o w this m o n e y \ i V i l I l

now to th e l o c a l c om r n u n l t yB a c k - o f- th e - en v e lo p e c a lc u l a-

t i ons s ug ge st t ha t th e to ta l o u t-f lo w fo r th e m in in g c om p an ie s

will be in th e ra n ge o f ~ l ,O OO

crore-I ,200 core annually

The background. E a rl ie r . t h e

dra f t Bill p r epa r e d by th e

Ministry of Mines in March

2 010 h a d pro po se d th a t m in -

e rs b e lia bl e to "a llo t f re e s ha re s

Sector up in arms asministry's proposalsmay result in decline in

returns on investment

.IINBR.•EF• W h ile the

proposals are

revolutionary inth e s e ns e th at

they wil l bene-

fit the locals

who often get

displaced by

mining activl-

ties, it wi 1 1 1 1

affect the prof-

itability of min-

Th e d e ba te o n h o w to tax c om -

pan ie s e nga ge d in e xtra c . ~.Oll o rm in era ls h as in te nsif ie d . T h e

M i n e s and M in e ra ls (D e ve l-

o pm e n t & Reg u l a t i o n ) B il l, 2010 ,. w a s

c lea r ed by th e gro up o f m in iste rs la st

f o rtn igh t, w ith su gge st io ns th at th e c oa l

m in in g c om pan ie s sh a re 2 6 pe r c e n t o f

th e pro fits w ith th e d isp la c ed lo ca l po pu -

la t io n. C om p an ie s m in in g o th er th anc o al w il l h ave to pa y 100 pe r c e nt ro ya l ty

to the d isp la ce d p op ula tio n . S im p ly p ut,

i f a c o m pan y w a s pa yin g 'n0 0 a s ro ya lty

to th e go ve rn m en t, th e o utf lo w w il l n ow

d ou ble to '{2 00 . A s th e n ew s b ro ke ,

s to ck s o f m in in g c om p an ie s fe ll sh arp ly,

w ith sta te -o w n e d C o al In d ia d o w n o ve r 8

pe r c e nt : in a sin gle tr a d in g se ssio n o n 8

ingl,companies

e qu al to 2 6 pe r c e n t in th e

c om pa n y th ro ugh th e pro m ote r 's qu ota ifth e h old er o f th e le a se is a c om pan y, o r,

a n a nn uity equal to 26 pe r c e n t o f the

p ro f it a ft er t ax : i f th e h old er is a pe rso n, o n

a cc ou nt o f a nn u al c om p en sa tio n ".

F ur th er , it p ro po se d th at m in e r s pro vid e

e m plo ym e nt a n d o th er a ssista nc e a c co rd -

in g to th e re ha bil ita tio n po lic y o f th e sta te

c o nc e rn e d. T h e p ro po sa ls w e re r esiste d by

R 'OYA LT 'Y CUR R E ,NTLY PA YA BLE , T 'O G O V E IR NM E NT

LEADIRONORE BAUX.TIE ANDLATERIITEZIINC COPPER

4.20%of sale price on

ad valorem basis

of London Meta II

Exchange zinc price

on ad valorem basis,

chargeable on zinccontained in produce

of London Metal

Exchange Copper

price, chargeable on

copper contained inthe ore produced

ot sale price on ad va-

I:orem basis for those

despatched for use

other than alumina &aluminium extraction

of London Metal

Exchange liead

price chargeable Oil:

the containedfeadmetal in ore produced

"".... ~I-OUTLOOK MONEY. 110AUGUST .2011 • www.outlookmoney.com, ~" wotm .ags





Im PIIJobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estat.e I Financial Planning I Flipside I

Up next~StockPlck:Boschpg 40

UPS&DOWNS

1 Ju ly 2 011

- Sesa G oa

J S WS l ee '1

Hindustan Zinc

-NMDO

th e in d ustry bo die s. U nd er th e n ew pro -

p o sa ls , t h e s tr a ig h t- lin e 26 pe r c en t p ro fit-sh ar in g c lau se h as be en re str ic te d to o nly

c o al m in in g c o mpan ie s a s c o al is a re gu -

la te d p ro du ct . w h ile o th ers w ill h ave to

d o u bl e t.h e i:rroyalty paymen t s .

The implications .•W h ile th e pr op osa ls

w ill be ne fit th e lo ca ls w h o o fte n get dis-

p la ce d , it wt l l a d ve rse ly a ff ec t t he p ro f it-

a bility o f mining compenies. Says a n ote

f ro m iE m k a y G l o ba l F in a nc ia l S e rv ic e s: "If

th e B il l b e c o m es a n A d. it w o uld im pa c t

th e EP S (e ar nin gs p er sh a re ) o f min ing

companiesa nyw h e r e b etw e en

2pe r c en tan d 20 p er c e nt." A no t e f rom a n o t h e r

2 0 Ju ly 2 011

b ro k in g f irm , A ng el B ro k in g, sa id th a t

" the EP S o f m in in g c o m pa nie s (o th erth an c o al m in in g ) is e xpe c te d to be lo w er

by 8-13 pe r c en t, w h ile fo r C oa l I n dia , th e

EP S c ou ld po te ntia lly d ec lin e b y 1 7 pe r

c e n t". T he n o te a d ds th at C oa l In dia w il l

b e in better po sit io n to pa ss o n th e bu rd en

to its c usto m er s a s it se lls c oa l a t m u ch

lo w er r a te s c om pa re d to glo ba l pr ic es ..

O t he r s wi l l h ave to a bso rb th e a dd it io na l.

b u rd en a s th e th eir pro du c e is, in m o st

c a se s, g lo b al ly tr ad e d . In c ase o f c om pa -

n ie s w i th c ap tive m i ne s, p ro fita bility a nd

m a rg in s a re lik ely to ge t a ffe cte d a s th ead dit io na l c ost w il l h ave to be bu il t in to

EXPECTED FALL I . N I EPS-17.00% Coallndiia

SesaGoa--- ------- ----

-11.00% NMDC

-13.00% Hindustan Zinc

BrokerageestimatesEPS : E a r ni ng s per sha re

-10.00% Sterlile Industries

-2.•30% JSWSteel

i31.phics- VARUN VASHISHfHA

< ~worldl'\ag~

th e f in al p ro d uc t. S ays, S arn lr G ila ni,

h e a d of'equities. MAPE l S e c ur it ie s, aM u m b ai-b ase d b ro k er ag e f i rm : "If th e B illis p asse d in its c ur re nt from, it w i ll b e a

b ig n ega tive f r om th e sto ck m ar ke ts po in t

o r v i ew . " It might a lso a ff ec t o th e r a ct ivi-

t ie s in th e e co no m y. F or e xa m ple . h ig he r

price o f iron o re w i ll r esu lt in h ighe r pric-

e s o f ste e l. w h ic h. il l turn. wi l l r aise th e

c ost o f infrastructure deve l opmen t .

The tradeoffs. AU sa id . t h er e is a posit ive

a ng le to th e pro po sa l a s w e ll. G ilan t sa ys

th at th is m igh t le ad to gre ate r w ililin gn ess

by th e lo ca l populationto a llo w m i nin g inth eir a re a . g ivin g a bo ost to th e s e c t o r .

B u t th e in cre ase d c o st m igh t \~ "o rka s a

dis incen t ive to c om pa nie s a s th e re tu rn

on in ve stm e nt w ill go d ow n . T h etra de of[

ge t s eeen to ugh er w ith th e [ac t t h a t m i n -

in g a ctivity is stru gg lin g to gr ow . W I ll ie it

c o n tr ib ut es 1 4.2 pe r c e n t in th e i n dex o f

in du str ia l pro du ctio n. it h as n ot g ro w n

o ve r 2 pe r c e n t in th e f irst f ive m on th s o f

2 011 . S o ..th e c h al le n ge f o r law m a ke rs is

to ad dr e ss th e o u tpu t , o n th e o ne h a n d ,

a nd th e g r ie va nc es o f th e lo ca l po pu la -

tio n o n th e o th er . 0

rajeshkumangoutlcckfndta.ccm

~ hltp:/ftwitleLcom/OUIIOQkMoney; hllp:llwww.faceoook_oom/oimindia

http://dlgital.outlookmoney.com.l0.AUGUST2o.111. 'OUTlOOK IMONEY 39

http://dlgital.outlookmoney.com.li0.august2o.111./





I Stock Pick I

BY RAJESH KUMAR

'**lim1I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I ln ,ve s lln g I Real Estate I Financial Planning I Flipside II

BOSCH C J ~7~200~10~ PE24.56

INVENTANDINNOVATE---- ------

The stock is not amultibagger, butmight provide

stability over time

Bosch.a 12S-year-

old German multi-

national with pres-

__ ence in India since

1922, is a leader in mann-

facturing of automotive

components. Its business in

India is primarily divided into

three areas. namely automo-

tives, industrial: business andconsumer goods. The compa-

ny is the largest manufactur-

er of auto components in the

country with productsin

categories like fuel injection

systems, auto electricals, car

multimedia systems. and

starters a n d generators. In

the industrial business. it

provides solutions fo r pack-

aging; while in the consumer

side, it has exposure in power

tools and security systems.

Although the company has

exposure in sectors other

than automotives, the latter

contributes a substantial

part of its revenue. In 2010,

the contribution was at 91

per cent. The company has a

very strong presence in the

area wtth dealerships and

representation across the

country with products rang-

ing from auto electricals,

breaks, batteries, belts, filters.

3 O)D OO -

c : : : : : : : : : : J i B o a c h I

c : : : : : : : : : : J lISESensax, 25 ,I DO O -

201000-

1 5 . 'D 0 0 -

5 1 0 0 0 . ,J 106

I

JIII(f1I

~ IOI

,JulD9

,. J u I I O

I

Ju l i l l

WATCHOUT• Significant downturn in

the economy may affect

dernandforeutomctive

'components.

G ,.p ili< s, S AJ 1cs

lubricant oil, horns and wip-ers. apart f r om its leadership

in the f u e l injection systems.

Bosch is part o f the ' T a t a

Nano revolution' as a system

supplier for the car.

Business and financial per-

formance. Performance in

2010 was above expecta-

tions, with the automotive

industry 'witnessing a

growth or 34 per cent. In

this year, the company wit-

nessed a sales growth of

39.60 per cent, while net

pro f l t s were up 45.40 per

cent. The diesel systems busi-

ness of the company regis-

tered a growth of 51.60 per

cent during the year.

However, the automotive

market is expected to grow at

a moderate pace in the cur-

rent year due to a large base

or last year. Despite expecta-

tions of moderation in

growth, during the March

quarter, Bosch witnessed arevenue and profit growth of

31 per cent and 35 per cent,

respectively. Bosch is also a

regular dividend payer. The

board declared a dividend of

~40 per share for 2010 while

special dividend of ~8 Swas

announced on the compa-

ny's completion of 125

years. At the end of 2010,

the company was sitting on

cash balances in excess of

~1.300crore,

Considering future oppor-

tunities. Bosch has decided

to invest ~2,500 crore dur-

ingtheperiod 20U-13 in

capacity building. product

diversification. and R&D.

Inve5timent IRationale and

share pl'lice movement.

This stock will not be a mul-

tibagger in your portfolio,

but is likely to provide stabil-

ity with better returns over

time. Bosch is a leader in its

WHY BUY• Leadership, position

in automotive compo-

n en t m a rk e t a nd a bil ityto innovate

• C om m a nd s pricing

power due to superiorand innovative products

• The company is finan-

' c ia l i l yst rongl a n d h as a

clean balance sheet

FINANe.AILS

2003 2009 :2010 2008 2009 2010

( }PM : Op er ~ li n g I !' Ql il O ll r gi n; 8 I \S : E lI , ni n g p e r $ h ~r e

business with strong finan-

dills, a clean balance sheet

and the ability to

innovate. In the market,

the stock bas delivered 26

per cent in the last one

year. powered by better

than expected performance

which has pushed valua-

tions as share prices jumped

from the levels or ~6.000 to

the levels of~7 ,000 in last

three months. Enter the

stock 'with a long-term view,

and buy small quantities

to take advantage of any

price correction.

I ra je s hk um a r@ o u tIQ o k in dia ..C Q m

"".... an'.OU1LOOK MONEY. 1 0 ' . A UGUST 2 0 '1 11 • wwwou t l ookmonev c om, ~ "wo r i 1 f ~g s

~ hltp://t.witler.CDm/OUlloQkMoney; hllp:/Iwww.lacebook.com/o!m·ndia



I Avant G,ard

IMiWIIIJobs & Careers I Enterprise I Banking I Taxation I Insurance I in ve s c in g I Real Estat.e I Financial Planning I Flipside I

Up next~ Investing: Does Fund Size Matter? P9 42

M'OHIT SATYANAND

Euro Crisis and Us

The slowing of the world economy means that Indian consumers will

continue to attract euro, dollars and yen from around the globe

TH E crisis in European finance is the crisis of big gov-ernment Politics drives so-caned leaders to make

extravagant promises to their voters: everyone ignores the fact that

governments don't generate the wealth to fund these promises,

a n d th at tax; re ve n u e s a re n o t k e ep in g pac e . G o ve rn m en ts bo rro w

more a nd more money to keep up with the dreams it has sold. till

there are no more willing lenders.

Europe could deal with

p r ob l em s in Gre e c e a . n d

Portugal. both tiny com-

pared to the might of France

and Germany. which Led.

programmes to I : : mB themout; but as lenders turn

their backs on Spain and

Italy. driving up the cost of

borrowing lor their govern-

ments. the financial world

threatens to turn very nasty.

Volatility just ratcheted up

another notch, driving the

price of gold to a new high.

Add the debate over whether the US government

should be allowed to borrow more money. the debt

ceiling debate; world over. the focus is on govern-ments. By the time you read this. the debt ceiling

debate would have been resolved, and the USgovern-

ment will still be borrowing. The Republicans will

have forced president Baraek Obama to announce

some long-term de f l c t t cuts; some f i n an c i a l watch-

ers will see this as a relief and gold wi l l sell off a bit.

However. those with a longer-term view will con-

tinue to put question marks against the sustainabili-

tyof govern ment debt in the rich world. Households

in the world's richest country, the US. also need to

raise their savings rates so that they can restore

their personal balance sheets to normal ratios of

networth to income. \/Vhen governments are forced

to slow down. and households decide to spend less,

VA ! . ~UN VASH ISHTHA

rich countries are not going to power the world'sgrowth <my[anger; China. India a nd the other BRlIiCs

cannot ill this breach. So. we wHl see a slowing in

the world economy. Iactually think this is great

news lo r us. T h e slo w in g will not be sm oo th a n d

there wi l l be m as n ve disruptions along the way. The

Indian government and its policy paralysis could

also mean that we don't take full advantage of all

th e o ppo rtu nit ie s th at su c h c r ise s p re se n t , H ow eve r ;

there ]s never a shortage of cash looking for good

mvestment opportunities; hiccups apart, Indian

consumers and vibrant Indian entrepreneurs will

continue to attract euro, dollars and yen from allaround the globe .. If the flow of funds into India

continues, inflation is not going to disappear soon.

The RBI wi l l be forced to keep raising Interest rates.

\/Vhen FIDFC Bank declared quarterly numbers on

19' July, I noted two facts=firstly long-term bor-

rowing was hesitant: secondly, higher interest rates

and! lower bond prices had led to investment losses ..

'The latter trend IMil1ontinue, so that banks will lose

one source of book profits: there will be much more

focus on operational efficiencies and on the quality of loans.

Developments in Kingfisher Airlines underline what happens

when banks make bad loans-s-a few months ago, SBI and others

converted Kingfisher loans to equity at a premium to market price;

subsequently, the share price has dropped further. In the last week,

the good times airline has been ill the news for flights delayed

because it couldn't pay for fuel, and aircraft taken out of service

because it can't pay for spares. A lot of such dirt will emerge dur-

ing the turbulent times ahead, which is why investors are-ouce

again-paying a huge premium for shares in companies with

dean reputations and low borrowings. Whether it is Nestle or HUL,

Gillette or Glaxo Consumer Health, ovartis or Hawkins, erstwhile

blue-chips are now selling at 52-week highs .. Discnmtnauon is

back in favour. Nothing could make me happier 0

The author isan investment advisor and posts stockmarket comments dailyon outlockmonevcom. He c an b e re ac he d a t m sa ty ana nd @ ya h oo ..com

< ~world"'ag~= hllp://lwiller.com/OUllookMoney; hllp:l/wwwJaceOOok.oom/olmindia

http:/t.d,g,tal.outlookmoney.com .10 AUGUS120n • O'UTLOOK MONEY 41



jlnvesting ~

BY KUNDAN K.ISHORE

DOES THE FUND SIZEREALLY MATTER?The answer is 'yes' and'no' ..Youneed to makean informed choice to

get the best returns

Th ere is a c om m o n pe rc ep tio n

am o n g m u tu a l fu n d ( " N r F ) investors

t h a t th e bigge r th e ADM : (a sse ts

u n d e r m an a gem en t) ize o f a f u n d ,

th e bet ter it is , B u t w h y pic k M F i nves to r s

a lo ne .? Given a ch oic e , o ne is l i ke ly to go fo r a

villa rather than a small s tud io apartment.

Et~ en so m eo ne w h o d a bb le s in s t o c ks

w ou ld view a bigge r c o m pan y in a be t t e r

l igh t th an a sm a lle r o ne . A lr igh t th en ,size d oe s m a tte r. B u t d oe s it h old tru e

f or y ou r N I P i nve s tmen t s as we l l ?

W h en w e ta lk abo u t the f un d size , it

m ean s th e to ta l a sse ts o r th e am o un t

o f m o ne y be in g m a nage d by th e

fu nd . M o st in ve sto rs tr a c k th e fu nd

size , a lo ng w ith its tra c k re co rd , a s

t h ey feel th a t th e bigge r th e A DM

size, the be tte r a fund is . W h ile t his

m ay n o t h o ld tru e in a ll c a se s , to a n

e xte n t. th e A U JlJlsize o f th e fu nd

d oe s m a tte r , W e se e h o w .

W HAT AFFECT S AU ,M

T he re a r e tw o re a so n s w hy th e

fu nd size m a y in cre ase o r d ec re ase .

Th i s is be cau se it's d epen d e n t o n

tw o parameters-the fund's n e t

assets va lu e ( AV ) an d th e n um be r

o f u n tts tssu e d , T he n um be r o f u n its

m a y go u p d ue to su bsc riptio n by i nves-

to rs , o r d o w n d u e to r e d em ptio n . T he

f u n d size in cre ase s w h en in ve sto rs a re

a t tra c te d to w ard s it d ue to its go od pe rfo r-

m an ce o ve r time, o r successful ma rk e t i ng .

M a n y in ve sto rs pre fe r to in ve stII u s t r e u o n : A N H IJ P. N B O R A

"".... ".,Q'U"fLOOKMONEY .10 AUGUST 2011.www.outlookmoney.com, ~ "wo r i 1 f ~g s





I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I ll nv e s ,l ng I Real Estate IIFinancial Planning I Flipside I

Up next~OLM50andFundWatchpg44

in lo w -N I l .V f u nd s o r th ose w ith sm a ll

fu nd size . T he re a r c o th er s w ho a re OJ]

a lo ok ou t fo r b ig fu nd s. S o, th e b ig

qu estio n re m ain s: d oe s th e fund size

a f f e c t it pe rfo rm an c e ? T he a n sw er I s

both, ye s a n d no. It eventually d e p e n d s

011 th e c a te go ry th e fu n d be lo n gs to a n dth e size i t c a r r ie s .

SIIELIMITATIONI

C on sid er th e c a se o f a m id -c ap fu nd ,

which h a s received a huge response. At

U rn es, it m a y b ec om e d if f ic u l t fo r th e

fu n d m ange r to m an ge su ch a b ig fu n o

d ue to la c k o f in ve stin g ave n ue s. S o, h e

m ay d e c id e to sh ut th e d o or o n f re sh

in ve stm e nts . W h en th in gs be c om e m o re

manag eab l e , th e fu nd m ay be o pen ed f o r

in ve stm e n t a ga in . TW s h a ppe n s o n ac o n t i n u o u s ba sis. P e r i n s t a n c e , !Dpe

P re m ie r E qu ity Fu nd k ee ps o n c lo sin g

a nd o pe nin g d oo rs fo r f r e sh in ve stm e n ts .

A s o n Ju n e 2 008 , its fu n d size w as

'{728.96 c ro re . In Ju ne 20]1, it w en t a s

h igh a s { 2 ,302 .62 c ro r e -a n in cr e a se

o f 215.82 percent in th re e ye ars ,

H ow eve r , th e fu nd 's N A V w en t u p by jus t

78.40 pe r c e n t T his sh o w s th a t th e

g ia n t fu nd size c o uld be a ttr ibu te d to

in c re ase d u n it su bsc rip tio n s ..

BIGVER.SUSSMAU

T h e fu nd size sh ou ld n e ith e r be t oo b ig .

n o r to o sm a ll . In f a c t, th e size sh ou ld b e

in c on fo rm ity w ith th e c ate go ry th e fund

be lo ngs to . Fo r e xa m ple . a

large-cap f u nd w ith a f un d size

o f le ss th a n '{I c ro re w o u ld n otbe able to generate returns that

o n e with a fu nd size o f ~50n

crore a s e n o u gh m o n ey m ay

n o t b e a va il ab le f o r d iv er sif ic a -

tion ..S im i la rl y. a l iq u id f u nd

w ith a fu nd size o f ju st {Ic r o r e

w o uld n't h ave e no ugh a ve nu es to in ve st

in . B e sid es th is . c om p are d to a sm a ll f un d .

a la rge fu nd m ay a lso fln d it m o re dimcult

to off-load!st o ck s f ro m it s p o rt fo l io

fo c u se d o n th e m id - an d sma l l -

c ap spa c e. A s a la rg e f un d

w o u ld b e d ea lin g in a la rg en um b er o f sh are s, se ll in g th em

m igh t In vo lve a lo t o f c ost a s

we l l , T h in gs m ay n ot be so diffi-

c ul t in c ase o f la rg e-c ap sto ck s,

w h i c h are highly hqu l d , Things

a re to u gh e r f or sm a ll-c ap

f un d s. w h ic h h ave lit t le f r ee -

f lo a t m a r k et c a p it a lis at io n .

H o w e ve r, P ra sh an t Ja in . e xe cu -

t iv e d i re c t o r , HDPe I u t ua l

Fu nd , w h o is m a nag in g the

f u nd w ith th e la rg e st AUM sizein th e e qu ity spa ce , o ff e rs a

c on tra stin g o pin io n : "O n e h as

to lo o k a t th e size o f fu nd s in

r e spe ct to th e m a rk et c ap lta lisa tlo n . T h e

la rges t fu n d in In dia i s l e ss th an 0.2 pe r

c e n t o f the c o un tr y's o ve ra ll m a rk e t c ap i-

taltsation." W h ne th er e 's n o d ou bt th at

sm a lle r fu nd s a re e asie r to m a nage ,

t h ey m ay p ro ve to be r isk ie r th an b ig-

g er f un d s th at a re w e ll-d ive rsif ie d .

• The fund

IN B RIE F

s i lz e s h o u ld

neither be too

b ig l or too

small. In fact,

the size shoul'dl

be in confer-

mation with

the category

the fund

b e ,l o n gs t o '.i.e., smalll cap,

midi cap or

larg:ecap.

AUM va PERFORMANCEIFUNDS WITH IlOWER AUMs ARE GENERALLY

LOW ON PERIFORMANCE AS WELL

7.33 22.68 19.64

9.01 25.50 19,65

7;166.81 -2.32 14.80 17.95

4,020.06 7.89 19.75 16.43

3,471.B2 5.33 19.69 18..47

INOCGmra 8.79 -2.75 14.07 13.48

l&TCcmtra B.78 -0..98 5.12 2.114

INGlargecapEquhy 7.83 4.00 11.48 11.73

IL.&TGlobalAdvantage 5,03 -0.10 · 1 . 51 -3.09

Average of bottom 10 13.27 1.00 10.60 91.41

AUM: Assets under Management; Equi ty funds (growthopt ionJ with a 5·year t rack record considered;

AUM a s on30 June 2011;eturns ason 14July; Source: mutua l f unds ind ia . com

SI I 'E OR PERFORMA :CE ,?D e sp it e t he d iv er sif ic a tio n h a n d ic a p.

yo u c a n ge t th e d esir e d r e su lts f ro m

sm a lle r fu n d s a s w e ll-it a l l d e pe n d s o n

m a k in g th e r ig ht c ho ic e. U nd o ub te d ly,

th e size o f a m u tu a l fu nd is a n in d ic a to r

of its popularity a m o n g in v es to r s.

H o w eve r, th is d oe sn 't , in a ny w ay. m e an

t h a t a la rg e fu nd w in deliver better

r e tu rn s. o r a sm a ll f u n d wi l l be a n

underperformer, B u t , at th e sam e tim e ,

fu nd s w ith a be tte r tr a c k re c ord a ttr a c t

m o re an d m o re in ve sto rs a n d, th us. th eir.A U M ke ep s gro w in g o ve r a pe rio d o f

t im e . B u t again, th e A U 1v[slze h a s noth-

in g to d o w ith th e fu nd pe r fo rm an ce .

S a y s Ajit Dayal. chairman and director,

Q u an tu m M u tu a l fu n d : "T he re is n o

re la tio n b e tw e e n th e size o f a fu nd

h ou se 's A UM , o r th e f un d 's A U N J,a n d

th e r e tu rn s th at i i i . fu n d h o u se -o r a spe -

c if ic fu nd -m a y give to its in ve sto rs." H e

a d ds th at , e ve ntu al ly th e in ve sto r n ee ds

to decide w h i c h fund h o u s e s and p r o d -

u cts h e w o uld pre f e r a n d. th en . in ve st in

sc h em e s w h ic h be st su it h im . 0

ki!ilndan@Oi!iltlookindia.com

< ~world"'ag~I.lhltp://twiUer.oom/OUllookMoney; hllp:/lwww.lacebook.com/olrnindia

http://d'gital.outlookmoney.com. 10 AUGUST 20111• OUTLOOK IMONEV43

http://hllp/lwww.lacebook.com/olrnindia

http://d%27gital.outlookmoney.com./

http://d%27gital.outlookmoney.com./

http://hllp/lwww.lacebook.com/olrnindia



IOLM501

BYKUNDAN K.ISHORE

AFRESHSPARK

O

th e ba c k o f th e ye llo w m e ta l 's s tr o nge st r a l ly in

32 ye a rs, go ld fu nd s saw a m a jo r u psw in g in fo r-

t u n e s this f o rtn igh t DS P B la c kk oc k G old Fu nd

sto le th e sh o w , re tu rn in g 9 ..96 pe r c e n t a n d, in th epro ce ss, o utpe rfo rm e d th e a ve ra ge re tu rn o f go ld E T Fs t ra ck in g

I nd ia n g old p ric es by m o re th a n 2 .7 0 pe r c e n t. In th e e qu ity c at-

e go ry, m o st sc h em e s r em a in e d in th e p ositive zo n e d e sp ite b oth

th e S en se x an d th e N if ty stu m blin g a n d re tu rn in g -0 .8 5 a n d -

0.65 p er c en t. r esp ec tive ly. M i d-c ap o rie n te d f un d s sa w h ig he r

m o me n tu m . DS P B la c k Ro ck S m all a n d M id -c ap Fu nd w as th e

b est pe rfo rm e r in OLM 5 0. r e t u r n i ng 3.58 pe r c en t a s aga in st a

1.2 3-pe r c en t r e tu rn by th e E SE M id -C ap In de x.

Recent update. Harsha Upadhaya has quit as UTIOpportu-niti-

e s F un d 's m a na ge r. T h ere h a s b ee n a n in te rim a rra nge m en t till

a n ew fu nd m an age r ta k es charge. Ex is ti n g in v e st o r s may con-

tinue with their investment in th e scheme. TATAEq u i t y P I EFund. meanwhile. has declared dividend at ~1.50 per unit. 0

k u n d a n @ o u t l l o o k in d i a . c o m

S C H E M E N A V O lM

m 1 Y E A R 3 Y E A R S 5 Y E A R S R A T I N G

E QUITY -LA RG E CA P

CORE

B ir la S u n L if e F m n t l in e E q u it y 88 : . , 02 4 .5 0 1 8 .2 1 19 .2 1***

D S P ' B l a c k R o c k T o , p 10 0 E q , u i t y 101 . 82 6.96 16.4 9 19 .14****-

F id e li t y E q u it y 35 .4 9 4 .4 1 19 .18 19 .4 3 ****F r a n k l i i n I n d ia I B lu e .c h li p 2 14 .95 7 .2 1 1 8 .97 17 .15 ~~F r a n k l l i n I n d ia I in d e x -N i l t ty 4 3 .8 7 3.4 1 10 .68 13.02 ****F la n ld ii n I n d ia I P r im a P i l lS 2 2 1 .4 9 6.93 1 7 .00 17 .5 9 *Irk

H D F C E q u it y 28 ,0 .60 7 .7 8 2 5 .2 6 2 11 .36- - I- --

,~~~~

H D F C lo p 2 0 0 211.07 6.4 1 2 1 .7 0 2 11 .4 0 ***Ie

N i1 Iy B e ES 5 66.32 4 .30 11 .7 6 14 .17 ****-R e l ia n c e n S F -E q u it y 3,01.169 1 .2 7 1 8 .08 22 . 9 '1 ***T e m p le to n I i n d ia G r ow t h 117 . 5 5 1 .96 1 5 .93 18 .8 7

****U T I O p p o r t u n i ti e s 27 ' . 168 11 .60 2 2 .60 18 .62

* * * *_ ..;..-

SATELL ITE

D S P ' B l a c k R o c k E q ,u i l y I 16. '90 [6:16J 19 .14 1 N Al 1 * * * *

I D F G . I

U T I D i

E Q UITY-M ID - AND SM ALL- CAP

O S P B la ck R o ck S m a l l a n d M i d ca p 18 .4 5 6.68 2 5 .2 1 N A " ****1 0 F t; P r em i e r E q u it y - A , 33.2 2 7 .1 2 '2 3 .08 2 8 ..7 9*** *

J U n io r B e E S J!.1!!t -1 .5 32 1 .13 18 .07 ***

R . e lia n c e G r o w t h 4 5 4 .66 -3.2 9 14 .94 1 8 .8 9 ***T A TH u i l y P t E 47 .61_ 2 . 6 3 1 7 . 6 2 20 . 7 9 ****E Q UITY-UN KE D SA VIN G SSC 'HE M E (SE CTIO N 80 'C B E NE Fc IT)

O S P B la ck R o ck la x S a ~ e r F u n d 16.91 -0 .7 8 14 .8 6 I N _ A " ***F id e l i t y T a x A d > : _ a n t a " ,, 9 . : _ e 1 .- -'2 ;; .; ;2 ;. ;. ;. 0: :. ;; 2'- 1 9 .9 9 1 9 .3 4 ~

I C IG I P r u d e n tia l T a x p la n 114 2 .5 11 5 .63 19 .63 1 4 ..911 * * * *SATELL ITE

R e lig a re T a x P la n

SECTORAL

_ _ I 18 .17 I 6.7 8 12 2 .7 3; 1 N A11 1****

O S P B la ck R o ck W o r ld G o ld 1 8 . 5 7 1_111 .39 9.19 NA 1 1 N . R .-

G o l d E lF ! > N A 2 2 5 . 4 4 3 19113~ NA 1 1 N . R .,__...:....._

R .e lia n ce B a n k in g F u n d 1104 .5 8 U 99 32 .5 2 34.0'3 N . R .

I ' 69.32~

R e l ia n c e D i v e rs i: l l e d P o w e r -116. 48 8 . 9 5 2 4 .. . 4 N .R .

EQUITIES-MODERATE IEXPOSURE

B i r la S u n L il ' e 95 313.4 3 5 . !57 2 0.2 2 1 7 ..9 '4 * * * *--------D , S I' B l a c kR o c k B a la n c ed 6,7 . 54 5 .9 7 15 .90 17...11 1 ***----

H D F ! : B a la n c ed 5 8 . 5 9 13 ..49 2 3.7 0 1 7 .5 ·9 ~.--H O F C P r u d e n ce 2 18 .32 8 .61 2 4 .97 2 0 ..117 ~.

,-

T e m p le to n In d ia P e n s io n l 5 9 .7 0 5 .:8 9 9 .8 2 9 .8 5 **EQUITIES-CONSEIRVATIVE EXPOSURE

B l r la S u n Uf e M IP - S av in g s 5 n .99 6.92 : 10 .99 1 1 1 . 2 2****

B i r la S u n I L il ' e M o n tl l i v I n c o m e 31.34 6.!5 1 J1 .!5 2 9.98 ~----

B i r la S u n I L iI e -M I P 26.99 5 .9 6 10 .7 5 8 .7 7***- --

C a n a r a R o b e e D M I Ii ' 30 . 21 6. !57 12 .35 12 . 22 ****O S I ' B la c k R o c k S a v in g .s M a n a . g e r 19 .M 5 .9 7 9 .33 9 .2 4

***-- -- -- -- 1----

H D F ! : M I P -L T P 2 3.5 3 7 .2 1 14 .8 6 11 .93 1***** .H S S C M I P -S a v in g s 19 .5 0 3.7 0 10 .19 111 .06

* * *--R e l ia n c e M I l" 2 2 . 1 4 5 .9 6 15 .7 0 11 .92 ~_--U T I - M I S - A d l v a n t a g ; e 20 . 72 6.01 11 . 27 1 1 1 . 1 3

****-,___

U T I M o n t h ly I n co m e S c h em e 20 .13 5 .35 10 .2 2 9 .2 0

****BOND-S.HORTTERM

[N A V [ 1 L . J I O L M~l M O I f T H r M O Il T "B M O IfT H R A T I N G------------------------

CORE

B ir la S u n L ile S h o rt T e r m O p p

K u la k B o nd i S h o r t T e r m

T e m p le to n In d ia S T IP

SATELL ITE

H D F I: H IF S {f

15 .7 4 0 .8 0

18 .97 0 .8 4

2 ,111111.6, 1 0 . 96

R e lia n c e S h o r t T e rm

O LM 5 0 i s a l is t o l o m 5 0 m u t u al f u nd s c he m e r e c om m e n d at io ns f r o m a m o n g: a 1 ,O O C f- p lu s s c h em e s in t h e in du st r y . t h at m e ri t y o ~ r a tt e n t i o n, T he se s ch em e s h av e m a de ih e c ut a ft e r g ,o in g t h ro ug h c e r t a i n

f il te rs .O LM 50 i s qui de f or f re s h i nv es tme nt s o nl y. E x is ti ng i nv es to rs s h ou ld k e ep r ea d in g o u r r eg u la r MF Page s . 1le ss th an f i v e y e ar s o ld . 2We h ave t ak e n a l l g ol d E i Fs 'i nt o c o ns id e ra ti on . So. I I' IA Vno t

a p p li c a b le . 3 T h is is Ih e a v e ra g e r e t u rn l o r a ll s c h e m e s . G o ld E lF s g iv e s im i la r r e l u r n s . N . R . : N a t r a t e d . R e tu rn s l e s s t h a n a y e a r a re a b s o lu te , e ls e c o m p o un d e d . a n n u a ll y . D a l / o a k M O l T e y 's T a tin g l o r t he t h r e e -

y e a r p e ri o d a s on M a r c h 2 0 1 1 ·e n d l. T h e O L M R a ti n g i s b a se d o n r is k · a d ju s t e d r e t u r n ( R A H ) . H i g h e r t he R A R , t h e g r ea te r t h e n u m b er 0 1 stars, N A V a nd r e t u r n s a s o n 1 9 J u l y 2 0 1 1

Source: m U l u a l f u n d s i n d i a . c o m

"".. .. 4A!.OUTLOOK MONEY .10 AUGUST 2011 • wwwoutlookrnonevcorn\I~wo~g,





1 · ] ' i t1 •1I IJobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estat.e II Financial Planning I Flipside I

Up File)(t=FutUlres&Optlonsps46

S aty ab ra ta M o h a nty ,N ish it Dho lak ia '

NAV ~37.34

-'--~-'----ll a u nc hda t e 14J'uly 1999

M i n im u m in v e s t m e n t ~ 5 " O O O

E x p e n se r a t i o 1.74%,

E x , i t lo a d 1% be fore 1 Y l r';;';';";~~-----I

A s s e t s u n de r M a n a g em e n t ~65t.95c r

O L M S ta r R a tl in g . * 1 * • •

STOCK HOLDIINGT O p - 1 0 h o l d i n g s a c c o u n t fo r 6 2 % o f t h e

p o r t f o l i o , 30% o f w h i c h a r e .A M - r a te d

--p L lC Hous ing Fin. .

114 .64%

P o w e r F in a n c e

C o r p ' . 6, .93%

B a n 'k o f I i n d i a 7.66%

S u n d a r a m

F i n a n c e 7 .65%

O rie n ta l B a nk o t

C o m m e r c e 7 . 5 2%

H D F G

4.22%

R e lia n c e P , o r t s &

T e r m i n a l s 4.66%

' - - . . . " . . . .A n d h r a B a n k

4 .51%

I D F C

3, .89%---i~ Others 38.32%

S o u rc e: F un d f a ct s he et 0 1 M a y . 2 0 1 1

ANNUAL RETURNST h e f u n d h a s o u t p e r f o r m e d i t s b e n c h m a r k i n

t h r e e o f t h e l a s t f o u r y e a rs

'6.93 12.57 ·2.51 13.46

A l l r e tu r n s a r e a b s o lu t e

IB IIR LA SUN L,IF IEM ONTH LY IN C'OM E

SECTOR AL,LOCATIONT o p f i v e s e c t o rs a c c o u n t f o r a ro u n d 8 1 1 .0 5 ,p e r c e n t o ft h e t o ta l p o r t f o lio .

I H F C

1~9 .33%f ixe d in co m e

1 5 . 5 7%

B i l la S u n l i f e M o n t h ly I n c o m e is a m o n g t h e

l i v e o l d e s t m o n t h l y in c o m e p la n s ( M IP s ) a n d

t h e f i r s t s u c h o f f e r i n g f r o m t h e B ir l a M u tu a l

F u n d A M C . T h e s c h e m e 's a p p r o a c h t o w a r d s

i n ve s t i n g is v e r y c on s e rv a t iv e , w h e lh e r i i t ' s

e q u i t y o r d e b t. A s la r a s e q u i t y in v e s t m e n t isc o n ce rn e d , i t p re fe rs t h e v a lu e s ty le 0 1 i n v e s t -

i n g . W h e n i t c o m e s t o b u i ld in g a d e b t p o r t f o -

l io , i t s f u n d m a n a g e r , S a t y a b r a t a _

M o h a n t y , p r e fe rs t o k e e p t h e a v e r - . . , . . : J Ia g e m a t u r i t y p e r io d o f t h e ~ .

p ap e r s in t h e p o rt f o li o b e lo w

t h r e e y e a r s . S a y M o h a n t y : " A

l o w e r a v e r a g e m a t u ri t y p e rio d o f

p ap e r in t h e p o rt f o li o h e lp s t h e

f u n d c o n t a in t h e d o w n s id e s b e t t e r i n d i f -

f e re n t in te r e s t r a te s c e n a r io s . "

P O R T F : O L l D B S L M o n t h ly I n c o m e i n v e s t s a

m a x im um o f 15 p e r c en t i n e q u it y in s t r u m e n ts

a n d t h e r e m a in in g in d e b t. T h e e q u i t y c o m p o -

n e n t i n t h e p o r t f o li o e n a b l e s i t t o d e liv e r

Powe r Gene ra ti on

3. '77%S h i p p i l 1 g 4.6 '6 '%

,.----__,..,

CIHl ren t Asse t s 11 .~95%

S o f l w a r , e B e C o n s u l t a n c y

S e r v i c e s 11.3'6%

Gra ph i c s , S A!I C S ,

r e t .u r n s o v e r a n d a 'b o v e t h o s e g iv en b y l h e

f i x e d in co m e in ve s t m e n t . B e i n g a li i M I I P , c o n -

t a in in g t h e d o w n s i d e a n d . a t t h e s am e t im e .

d e l iv e r i l i i g h ig h e r r e tu rn s is a lw a y s a c ha ll e n g e

f o r t h e f u n d m a n a g e r . O n e w ro n g c a l l m a y e a t

in to t h e r e f u rn s p ro v i d e d b y t h e f ix e d i n c o m ec om p o n e n t S o , r i g h l s t o c k - p ic k in g is t h e k e y

h e re . S a y s M o h a n t y : " W e a l lw a y s a vo i d h i g h -

m o m e n t u m s t o c k s a n d in v e s t in o n e s

r:", t h a t h a ve h ig h e r d iv id en d y ie ld t h a n

~I t h e I N i f t y . T h i s g iv e s . s ta b il l i t y t o t h e

overa ll po r tt o ll e ."

~ IP E R fO R M A I C E O v e r a

CIT t h re e - y e a r p e r io d , t h e f u n d d e l i v -

e re d 9 .9 8 p e r c en t a n n u a li s e d

r e tu rn s , a g a in s t t h e 7 .70 p e l c e n t c lo c k e d

b y i t s b e n c h m a rk , C R II S IL M IP B le nd ed I n d e x .

T h e f u n d h a s b e a t e n i t s b e n c h m a r k a n d i t s

c a t e g o ry a v e ra g e c o n s is te n t l y , o v e r one-,

t h r e e - a n d f iv e - y e a r p e r io d s . E v e n o n a y e a r l y

bas is , i n t h e l a s t t h r e e y ea rs , t h e lu n d o ui pe r-

f o r m e d lts b e n ch m a r k a n d c a t e g , o ry a ve ra g e . .

B S l M o n t h l y lncome's o n e - y e a r re nnn o ~

6 ..5 7 p e r c e n t bea t s f h e M I P c a t e g ;o r y a v e ra g e

o l 5 .2 3 p e r c e n t .

O L T A K E B S L M o n t h l y I n c o m e i i s s u i i t a b l 'e

t o r c on se rv a t iv e f l x e d ln e c m e in ve s t o rs

w h o w a n t 1 0 b e a t in fl a ti o n a n d e a r n r e g lu la l

r e t u r n s . C o n s id e r in g t h a t t h e f u n d h a s a g o o d

d jv id e n d d ls tr l b u tlc n t r a c k r e c o rd , in v e s t o r s

lo o k in g lo r a r e g u la r in c o m e c a n o p t t o r t h e

d i i v i d e n d opf ion

SIP RETURNS

< ~worldl'\ag~

A s su m in g lh a t i h e i n ve s lo r s ta rt ed a n SIPo n 1 A u g o f t h e r e sp ec tiv e y ea r

w i l l 1 ' ~ 1 . 0 0 0 . R e tu rn s a s o n 1 9 J u l y 2 01 1 S o u r c e : m u t u a l fu n d s in d i a .c o m

= hllp:/ltwiller,com/OutlookMoney; hllp:l/www.facebook.com/ormindia

http://digltal.outlookmoney,Gom.10 AUGUST 2011 • OUTLOOK IMONEY 46



I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I ln , ve s t ln g I RealEstate I Financial Planning I Flipside I

Futures & Options

I Futlures, &OIP'tiolns I

B Y K A \lY A B A LA JI

AREWARDINOFUTUREe -g old , go ld e xc h an ge -tr ad e d fu n ds (R T F s)

a n d go ld fu tu re s. A lth ou gh e ac h o ptio n

h as its o w n pro s a n d c on s, go ld fu tu re s

se em to be th e be st in ve stm en t m ou e d u e

to th e se r ea so n s.Minimum investment. Fo r e-gold a n d

go ld E TF s, it r a nge s be tw e en {2 ,lO D a nd

~20iOOO.Fo r e-gold it w ou ld be e qu a l to

th e price o f 1 g o r go ld whe r e a s fo r ETFs, .

it va rie s a c ro ss fu nd h ou se s a n d c o uld be

b e tw e e n {S ,OOO a nd {2 0,O O O. H o w e ve r.

t r ad ing in go ld fu tu re s c a n be d on e fo r a s

little a s n , o o o . T h at 's b ec au se w h e n . yo u

e nte r in to a fu tu re s c on tr a c t, yo u just pay

th e m arg in m on ey, w hic h is a bo u t 4 PCI'

You can invest in goldthrough many routesbut gold futures is the

most lucrative option

Ives t i ng ..n ~ h ys ic a l g o ld is p a~ .se .. .

Th e s e days. It ma k e s sense to Invest

in th e ye llo w m e ta l th ro ugh e l e c -

_ tro m c m ean s+c o sts a re u su a l ly

lo w er a n d re tu rn s c ou ld be h igh er .

T h e th re em o st po pu la r way s o r

inves t i ng in 'paper' go l d are

L·Qw.Transaction

c o st. b ro ke ra g :e a n d

w a re h ou s e c h arg e

(0.03-2 .0%)

100 p er c en t in go ld

M o stly h ig he r th an

th os e fro m p hy sic a l

I! d

E .q ua lto th o se fr om

p h y s ic a l g old

90-100 p e r c en t in g old ,

0-10 c en t in d eb t

S am e a s p hy sic a l g old .

W e a lth ta x a p p lic a b le .

LTC G ta x if h e ld fo r o ve r

36 mon t h s

M a rg in m on ey c an

b e a s low a s '700,

d ep en din g on th e

c o ntr ac t va lu e

, {2 ,1 0 0- 2, 30 0 (e q ua l to

th e p ric e o f 1 g o f go ld )

GOLD ETF

High. Sto rageand i FMC

( 1 . 25 -: 2 .5%) .I f b ough t

hom b ro ke r , additional'c h a rg e s o f 0 .2 -0 .5 ,%

M a rg in a , lI y h i g h e r,

I !o w er o r e qu al to p h ys i-

c a l

N o w e alth ta x. S TC G t ax

if h e ld fo r le ss th an 12

m o nth s ; L TC G ta x if h e ld

for m ore th an a

~ 5.000-2 0.00 0 d e-

p en din g on th e fu nd

h o u s e

HighI High

c en t o f th e c on tr a c t va lu e, Fo r e xam p le . il '

yo u a re tra din g th e M C X Go l d g u in e a ,w h e r e the con t r a c t size is S g , . the con t r a c t

va lu e w o u ld be abo utn a,O OO . S o. yo u

w o uld be paying just <720 to e nte r th e

c on tra c t. Y ou pay th e r e st u po n th e e xpiry

o f th e c o ntra ct .

Costs. G o ld f utu re s a re m o r e c o st-e ff ec -

tive th an go ld E T Fs a nd e -go ld , I f yo u bu y

a go l d E T E , yo u n ee d to pa y bro ke ra ge o f

0 .50 -0 .7 5 pe r c en t . If yo u wantto avo id

th i s c o s t , yo u n ee d to go d ir e ct ly to th e

asse t r r r a n a g emen t company (J\MC).

Howev e r , M , r e s a cc ep t in ve stm e n t fo r a tl ea s t 1 k g o f g o ld . T h i s is n o t fe asib le f or

sm a l l in v e st o rs . F o r e -go l d , th e b r ok e r a g e

w o u l d be 0.25-0.50 pe rc en t. A lso , yo u

n ee d to o pe n a se pa ra te d em a t a c c o un t

fo r th is . f o r w h ic h yo u w o uld be c ha rge d

{2 SD -S OO fo r o pe nin g a nd a no th er

~200-500 as a n n u a l maintenance fee. If

yo u w an t to c on ve rt e -go ld to ph ysic al

go ld , yo u n ee d to pay nOO-300 a n d

va lu e-a d de d ta x (V A T)o f 1 pe r c en t.

De li ve r y c h a r g e sa r e a l so a ppl ic a b l e .

H o w eve r. to tr a d e in fu tu re s yo u n ee d topay jus t 0.03-0.05 per c e n t. d e pe n d in g

o n yo ur m a rg in . Eve n if yo u ta k e ph ysic al

d e l iv e ry . .t h e c h a r g e s a re lo w . Says

A r na rsm g h D e o, h e ad -c o mm o d i tie s &

c u rr en c ie s r es ea rc h . Ad i t ya Bir l a Mo n e y :

"D e liv er y c h ar ge s in vo lv e w a r eh o u se

charges and t h ey a re a ro u n d 1 p er c e n t .

T h ey a re e ve n lo w er fo r go ld m in i (lO g) ."

Returns. W h ile e -g o ld g re e s r etu r ns

e q u a l to th ose f ro m ph ysic al go ld , E TF s

fe tc h m a rg in al ly h igh er r e tu rn s ..

H o w e ve r, th ere is n olunit

to th e am o un to r pro fits yo u c a n m a l e wi t h g o ld f u tu r e s,

F or e xa m ple , su ppo se yo u h ave <2,300 to

inves t With th is , yo u c o uld buy o ne u nit

o f e -go ld . B u t yo u c ou ld pro bab ly bu y

go l d wo r t h ~57,500 (25g) th ro ugh go ld

futures, T W s i s be c a u se th e m arg in is

abo u t 4 pe r c e n t. N ow , i f g o ld p ric e s r ise

to <2.400. yo ur pro fit o n e -go ld w o uld h e

n00 w h e re a s th e p ro f i t o n go ld f u t u r e s

w o uld be ~ 2,5 00 (2 SxlO O) . A s th ere is

n o lim it to th e am o un t o r in cre a se in go l d

pr ic es, yo u c an m a ke u nlim ite d pro ll ts

us ing go ld f u t u r e s . 0

kavya,.balai,[email protected]

.,......4.A.OUTlOOKMONEY .10 AUGUST 2011.· wwwoutlookmonevcorn, ~ "wo r i 1 f ~g s

III htlp:!!twitler.com!Out!ookMoney; hllp:llwww.lacebook.com/o!m.ndia

mailto:kavya,.balai,[email protected]

mailto:kavya,.balai,[email protected]



IMI.I;·I..I1IIJobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estat.e I Financial Planning I Flipside I

Up next ~ Alert Investor: Third-Party' I ln5111~anceP948

I Fixed .Income II

BY KAVYA BALAJI

THEMOREAOILE OPTIONFixed deposit (FD) ratesare up, Should you begoing for FOs instead of

po st o ff ic e M I S?

With th e in tro du c tio n o f

mO d er ,n f ln an cia l p ro d uc ts

su c h a s m u tu a l fu n d s a n d

d er tva nc es in In dia , o ne

w o uld im a gin e th at in ve stm e nt in tr a d i-

t i ona l produc t s l ik e p o st o f f l c e (PO)

sc h em e s w o u ld h ave ta k e n a h it . B u t.

a c c o rd i ng to India P o st 's a nn u al r epo rt .

th ere w e re o ve r 2 40 m il l io n M o n th ly

In co m e S ch em e (M I S ) accounts a s o n 31M arc h 2 010 . A no th e r f a c t th a t c am e to

th e fo re w a s th at !vIIS w as th e m o st po pu -

la r sc he m e, c om p risin g a bo ut 32 pe r c en t

o f to ta l PO d e po sit s. T h is is d e sp ite t he

fa c t th at th is sc he m e d oe sn 't p ro vid e a n y

tax benef i t s . So . sh ou ld yo u a lso be in ve st-

in g in it? T h e an sw er : is n o . T ha t's be c am e

the m o nth ly in co me o ptio n o ff e r e d w ith a

bank f lxed depos i t (FD) migh t

give yo u b et te r r e tu r n s n o wth at in te re st ra te s a re u p. Says

Sa tk am D lvy a , b usin ess b ea d ,

rupe e ta lk .c om :"I t m ak es m o re

se n se to in ve st in FDs fo r bo t h

sh or t a n d lo n g te n ure s a s, in

sh o rt t en u re s, yo u wi l l ge t : b e t -

te r re tu rn s; an d in lo ng te n -

u r e s . yo u will ge t ta x e xe m p-

tio n s o n in te re st e ar ne d." ext

w e d o a c om p ar tso n b e tw e e n a

b a n k FD an d PO M IS ,

T en ure ..T he te n ure fo r P O !vn s is f ix ed a t

six ye a rs w h ere a s lo r an FD , yo u canc h o o s e a te n u re r a n g in g fro m a m on th to

10 yea rs .

V ie lid . E ve n t ho u gh PO M ]S pr ovid es sim -

p le in te re st a nd bank FDs g iv e c omp ou n d

i n te r es t . PO M IS m igh t g iv e b e t te r yield

a n d in co m e. H e re 's w h ~7 .

T he m on th ly in c o me th at yo u wou l d

r ece ive from a n FO w o u ld b e sligh tly le ss

than w ha t yo u w o u ld ge t f ro m PO HS .

e s s um i n g th a t yo u pu t in th e s ame

am ou n t a t th e S am e i nt er es t

r a t e . Th i s is be ca use b an ksp ro vid e 1 11 0n th Jyin c o m e o n

FDs a t a d is co u n te d r at e ..T h e re

is a re aso n ro r t h a t . For e x am -

ple , su ppo se yo u a re in ve stin g

in a n FD a t 12 pe r c en t pe r

a n n um . If yo u a re gtven i n te r -

e st a t th e ra te o f 1pe r c e n t pe r

m o nth . th e e ffe ctive a nn ua l

yie ld w o u ld b ec om e 12 .7 pe r

c e n t . Th i s is be ca use b an ks

IIRBRIEF., T he te n ure

for P O M ilS is

si x years whi l e

you c a n ohoo-

sea tenure of

one mo n t h to,

10 years for

bank FDs

., For bank FDs,

ensure that the pro vid e in te re st th ro ugh qu ar -

te rly c om p ou nd in g (se eDif ference ill Returns). B a n k s

u se the f o l l ow i ng formulato

calculate th e m o n th ly pa yo ut:

( (p r inc ipa l x i n te r es t r a te)1

(1 2 00 +in te re st r at e) ) x 100

S o . f r om P O 'M I S yo uw o uld b e ge tt in g

~'667 a n d li:'OLnFD~662 pe r m o n th .

G ive n th at ta xe s o n bo th sc h em es a re th e

sam e a n d M lS pro vid e s a bo n u s o f 5 pe r

c e n t o n rnaturitj, y o u r e f fe c tiv e annu-

ahs e d n e t yie ld f ro m FD w o u ld b e lo w er

th an th atf r om

P O M IS . A lso . e ve n if yo uin ve st in a n PO yie ld ing 9 pe r c en t, yo ur

yie ld is n o t go in g to in cr ea se su bsta ntia lly

(see DiJJerence il l .Relurl 'ls). So , i f yo u a re

go in g fo r a ba n k YO In ste ad o f M 1 •

e nsu re th at th e in te re st ra te o ff e re d is a t

l eas t 9.5-10 pe r c en t pe r a n nu m .

T a xa tio n .. I nc o m e f rom PO l \ InS as we l l

a s in co m e from PO is ta xe d a s per you r

ta x sla b. H o w eve r. th ere is n o ta x d ed uc t-

e d a t so u rc e (T 05 ) fo r PO M IS . B u t .

n o tif ie d F Ds o f o ve r Iive ye ars c a n be

c la im e d fo r tax d ed uc tio n u nd er

S ec tio n S OC o f th e h rc om e T ax A ct. ;: )

M a xim u m in ve stm e nt. In in te r e st ra te isa t least 9.5-10

PO M IS , yo ur m a xim u m in ve st-m e nt is r e str ic te d to ~4.5 lakh pe r c e n t p.a_

fo r a sin gle a cc ou nt a nd :(9

lakh fo r a jo in t a cc ou nt. E ve n if yo u o pe n

se ve ra l a cc ou n ts, yo u r d e po sits sh o uld n 't

e xc ee d th e lim i t p re sc rib ed . B u t fo r FDs,

th e re is n o su ch li rnit;

DIFFIERENCE l iN R E ,TURN IS

Graphics. VI\~UN V,~SHJSHTHA

< ~worldl'\ag~

Icavya.balaji@o!ltlookindia.com

= hllp:/ltwiller.com/OutlookMQney; hllp:l/www.facebook.com/ormindia

hltp:I/drgital.outlookmoney.com .1 :01 A UG UST 201 i1 • OUTLOO:K MONEV47



I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I ln ,ves l lngl Real Estate I Financial Planning I Flipside II

Up next ~ RealiEslale: Nol'da Mess pg50

f r i t j i i i J # 4 1 M

I .Alert Investor I

B Y SU NIL D HA W AN

THECLAIMPROCESS •••...from the time your

car is hit till the time

you receive your dues

from the insurer

Mo t o rt h ir d -p a rt y in s u ra n c e ,

o r t h ir d .- p. a rty l iabi l i tyc ove r. w h ic h is a lso k n ow n

a s th e ' a ct o n ly' c ove r, is

c om p ulso ry fo r a n ve hic le s b efo re th ey

c a n b e b r ou g h t o n to ro ad . Th e b e ne fic ia -

r yo f th is type o f po lic y is s om e on e o th er

th an th e tw o pa rtie s tn vo lve d in th e c on -

tr a c t, th at is th e in su re d a n d th e in su re r.

A th ird pa r ty in su ra n ce d oe s n ot c o ve rin ju rie s c au se d to th e in su re d, bu t to a n y-

o n e w ho is in ju r e d by h im o r h er .

T h ere fo re , th e f ir s t-p ar ty in su ra nc e o r th e

c om p re he nsive in su ra n ce is w h at o ne

sh o u ld a im fo r. W e ta k e a lo o k a t th e

r ig h ts o f a p o lic yh o ld e r.

T h e c la im pro ce du re u nd er a ge ne ra ]

in su ra n ce p olic y is a s f o ll o w s -

• T h e in su re d sh ou ld in fo rm th e in su re r

o f a n y lo ss a r isin g u nd er th e c o ntr a c t o f

in su ra n ce a t th e e ar l ie st , o r w l t h t n th e

e xte nd ed tim e a s m ay b e a llo w e d by th ein su re r. T h e in su re r sh ou ld r e spo n d

im m e d ia te ly a nd g ive a c le ar tn d tc an on to

th e in su re d o n th e p ro ce du re s. A survey-

o r sh ou ld be a ppo in te d to a sse ss th e lo ss

w i t h i n 72 h ou rs o f r e c eip t o f intimation .

• If a n in su re d is u nab le to fu rn ish a l l th e

p ar tic u la rs r eq uir ed , th e su rve yo r sh o u ld

in fo rm in w r itin g th e in su re d a bo ut th e

d elay th at m a y re su lt In t he a sse ssm e n t

o f th e c la im . T h e su rve yo r sh ou ld be su b-

je d to th e c o d e o f c o n d u c t la id d o w n by

th e a uth o r ity w h ile a sse ssin g th e lo ss,a nd c om m u n ic ate h is f in d in gs to th e

in su re r w ith in 30 d ays o f h is a ppo in t-

m e n t In sp ec ia l c ir cu m s ta n ce s, th e su re

ve yo r sh ou ld se ek a n e xte nsio n f ro m th e

in su re r f o r su bm issio n o f th e r e po rt . A

su rve yo r sh ou ld n ot ta k e m o re th an six

m o n th s f ro m h is a ppo in tm e n t.

• I f a n in su re r , o n th e r e c e ip t o f a su rve y

r epo r t , f i n ds t h a t it J s in c om p le te , h e sha l lr equ i r e the su rve yo r u nd er in tim a tio n to

th e in su re d, to fu rn ish a n a dd itio na l

r e po rt o n c er ta in issu es a s m a y be

r e q u i r e d , S u c h a r eque s t m ay be m a d e b y

th e in su re r V l rith in 15 d ays o f r e ce ip t o f

t h e o r ig in a l su rve y re po rt, pro vid ed th e

f ac ility o f c al lin g fo r a 11 1 a d d it io n a l r ep o rt

by th e in su re r sh al l n o t b e r e so r te d to

m o re th a n o n c e ln th e c ase o f a c la im .

• T he su rve yo r o n re c e ip t o f th e c om m u -

n ic atio n sh al l fu rn ish a ll a d ditio n al

r epor t wi th in th re e w ee ks.• O n re c eip t o f th e a d ditio na l su rve y

re po rt . a n in su re r sh ou ld o ff e r a se tt le -

m e nt o f c la im to th e in su re d w ith in 30

d ays. I f t he in su r er , fo r a n y r ea so n to be

re co rd ed in w r it in g a nd c om m u n ic ate d

to th e in su re d . d ec id es to re je c t a Cla im

u n de r th e po lic y. it sh al l d o s o w ith in o ne

m o nth f ro m th e re ce ip t o f th e su rve y

re po rt . o r th e a dd itio n al su rve y re po rt .

• U po n th e a c c e p ta n c e o f a n o f f e r o r se t-

t l e m e n t by th e in su re d, a s sta te d in th e

e ar l ie r po in t, th e pa ym e nt o f th e am o un td ue sh al l b e m ad e w ith in se ve n d ays f ro m

th e d ate o f a cc ep ta nc e o f th e o lf ee by th e

in su re d . In c ase o f d e la y, th e in su re r

sh o u ld pay a n in te r e st a t a r a te w h ic h is 2

pe r c e n t a bo ve th e ba n k ra te pre va le nt a t

th e b eg in n in g o f th at f in an c ia l ye ar . 0

[email protected]

THE S,TEPSYOU NEED TO FOL,LOW:KNOW WHOM TO A PP ROA CH TO M A :KE A CLA IM UN DE R A G E NE RA L INSUR ANCE POLICY

Gr.Jphicsl aHOOMESI-I Dun SHA~MA

"".... 4.A.OUTLOOK MONEY .10 AUG UST 201 1 • www.ou t lookrnonev .co rn,~"wo~gs

III htlp:/ltwilter.com/Out!ookMoney; hllp:llwww.lacebook.com/o!m·ndia


http://www.outlookrnonev.corn/

http://www.outlookrnonev.corn/




R e B ,d . O f f i c e : 3 ( 1 5 , L s _ X ! m iN i v a s A p a r tm e n t s , A m e e r p e 1 , H y d 'e ra b ad - 5 0 0 0 1 1 6 .

Coiip. O ff I c e : ' I R a h e ja s ' , M a in A v e n .u e , V .P . R o a d , S a n ta cn . t Z ( W e s t ) , M l lm b a i - 4 0 0 0 5 4 .

UNA.UDIT'ED STANDALONE, FINAN'CIAL RESULTSFor the quarter ended June 30 1

, .20111~CrOf8S

S a ' i e s

Less : I E x c i s e l Duty

N e t S a le s

I l I c o m e f r o m J o i n t V e n tu r e s - D i v id e n d :

a th e r I n c o m e f r o m o p e ra t io n s

T o l a l l 'n c o m e

Opendi lure

C o n s u m p t i o n o f r a w m a t e r i a ls

P u rc h a s e o f Im d e d g o o d s

S t o r e s a n d s p a r :e s c o n s u m e d

Power&rue l

E m p lo y e e s c os t

F r e i g h t o u tw a r d

( I n c r e a s e ) I D e c r e a s e in s to o k in t r a d e & w o r k : in p ro g re s s

D e p re c i a t io n a n d A m o r t i s a ti o n

O ~ e r e x p e n d i t u r e

T Q I a I E x p e n d i tu r e

P l ' O f l l f ro m o p e ra t io n s b e fo re o tI ! e r in c o m e ,

A l l a n c e c o s t, T a x a n d E x c e p tl o n a l i t e m s

a th e r I n c o m e

P r o fi t b e fo re F in a n c e c o s t, T a x a n d E x ce p t io n a l i t e m s

F i n a n c e c o s t

P r o m J I ( L O S S ) I b e f o r e T a x a l l l d E x c e p ti o ll l a l i t e m s

E X c e p t i o n a l i te m s ,

P r o fi t o n s a l e o f a s s e t s . l i li l, v e s l m e n t s

Profit J I (L o s s ) b e f o re T~

T a l C e x p e n s e s

N e t P r o f i t I ( L o s s ) a ft e r T a x

P a i d - u p I E q , l I I i t y S h a m C a p it a l (f 1 0 / - p e r s h a l l S )R e s e r ve s e x c lu d in g r e v a l l l l a t i o n r es e rv e s

E P S • ( B a s ic , d ilu te d a n d n o t a n n u a l i s e d ) ~

1 , 0 4 9 . .3 9 7 : 6 8 . .5 6 3,556.'94

11.33, 4 5 . .9 8 2 , o t 7 0

9 1 1 , 8 . 0 6 7 2 2 . . 5 8 , 3.355.24

3 ..00 B . 3 8

1 1 . 0 6 1 .2 4 2 5 . 1 1 ] 9

9 8 9 . •1 2 1 . 2 6 . .& 2 3,388.71

2 5 9 . 1 4 1 7 8 . .5 5 , 8 1 5 . 3 4

1 8 , 0 . 7 0 1 1 4 5 . .7 2 7 2 5 . ' 9 9

32.201 1 7 . 1 8 . 7 9 .7 4

1 53 ..0 ' 3 , 8 5 . 9 9 4 2 8 . 2 0

5 5 . 8 , 1 4U5 1 1 2 . 8 0

1 1 ' 9 . 7 0 1 0 0 . . 7 9 1 3 3 2 . 3 9

(35 .02 ) (13.95) , ( 2 5 . , 0 1 )

35 . .39 2 2 . .3 5 , 1 1 3 . 3 0

1 ' 6 5 1 r 4 1 9U2 5 1 8 . 1 1

9 6 6 . 3 6 6 3 3 .1 0 1 3 , 1 6 0 . , 8 6

.2 2 . 7 6 9 3 . .1 2 227 .85

1 0 . 0 4 0 ..6 8 , 3 . 1 1 ] 1

2 2 . B O ' 9 ' 3 . .8 0 1 2 3 0 . , 8 8

3 7 . 1 5 1 5 . .6 5 , 1 0 1 . 1 6

( 1 4 . .. 5 ) 78. .15 1 2 9 . 7 1 0

3 ..02 , 0 . 9 6

( 1 4 . 3 5 : ) 8 , ~ . 1 7 1 3 , 0 , 1 6 8

4..38 (25 .27) ( 3 4 . 8 7 )

( 9 . 9 7 ) 5 5 . . 0 1 9 5 . 7 9

5 0 3 . .3 6 5 0 3 . 3 6 , 503.367 0 4 . 4 7

< ~worldl'\ag~

nR,ISM

ICEMIENT

•-JOHNSON-

TlU I I.AlH I KITCHfN

www . p r i smc emen t ..c om www.nnc i nd l a . c omww.h r j i nd l !a .com

http://www.prismcement/

http://www.nncindla.com/

http://www.hrjindl%21a.com/

http://www.hrjindl%21a.com/

http://www.nncindla.com/

http://www.prismcement/



I Jobs & Careers I Enterprise I Banking I Taxation I Insurance I Investing I Real Estate I Financial Planning I Flipside II

Up lf1e)(t~MyPI'anpg52

I Real Estate II

BYPANKAJANUPTOPPO

NOIDAMESSBUSTSMYTHS

Lessons to be learnt asthe Noida Extensionepisode demolishes

home-buying heuristics

o ld a E xte nsio n, a n a re a in

Uttar P ra de sh a djo in in g D elh i.

in th e e a st . w as be c om in g a

h o t d e s ti n a tio n fo r h om e b u y -

e rs o n a m id dle -in co m e bu dge t Itw as

o ne o f th e f ew pla c e s w h e re , fo r i n s t a n c e .

o ne c o uld buy a tw o -b ed ro o m a pa rtm e n t

in a n u nd er -c on stru ctio n pro je ct fo r

a ro un d ~3() la k h. T h e be st th in g is, it 's

n ot th a t lo ng a c o m mu te f r om De lh i. B u tth a t d r e am o f o w nm g a h o rn e is n o w

tu rn in g in to a n igh tm a re fo r m an y.

T h a t f o llo w s a re ce nt ru lin g by th e

S uprem e C o urt o f In dia u ph o ld in g a n

e ar l ie r o ne by th e A lla h aba d H igh C ou rt

T h e L atte r, in th e m a tte r o f Devender

K u . m a r li S S t a te o f up, ru le d a ga in st th e

a c qu isit io n o f la n d by th e G re ate r N o id a

I n du str ia l D e ve lo p m e n t A u th o rit y

(G N ID A). T h e fa rm e rs o ppo se d th e f a ct

th at th e la n d h ad be e n a c qu ir e d f ro m

th em fo r'Industria]'

p ur po se s b y p ay in gth e m th e stip ula te d c o m pe n sa tio n . Then,

th e land u se sta tu s h ad be e n changed to

.c o m m erc ia l ' a n d so ld a t m any tim e s th e

pr ic e to r e al e sta te d eve lo pe rs. T h e fa rm -

e rs o bje c te d to b ein g sh o rtc h an ge d s tnce

th ey w o u ld h ave be e n e ntit le d to a h igher

c om pe nsa tio n h ad th e la n d be en a c qu ire d

f ro m th em fo r 'c om m e rc ia l' pu rpo se s. T h e

c o ur ts q ua sh ed th e a cq uisitio n of 156

h ec ta r e s o f la n d by G N IDA be lo ng in g tofarmers o f Shahbarl vil lage.

A no th er sim ila r ru lin g h as be en g ive n

b y th e Al l ahabad High Cou r t f or th e

n e a r by P a tw a r l v il la g e t o o .

S im ila r ru lin gs a re e xpe cte d fo r

a l l rU lage s in th e a re a w h ere

l a nd was a cqu ire d by G N m A .

S o , c on stru ctio n o f a pa rt- doing a thor-

r n e n t b u il din gs in N o ld a h d dl'l'ug . ue 11-

E xte nsio n h ave sto ppe d a n d th e genae

h om ebu ye r f ln ds h im se lf • Check if the

be tw ee n a ro c k a n d a h a rdp la c e. W h e re lo an s w e re sa n c-

tio ne d, h e is paying EM I s fo r a

h o u se th a t m ay n eve r be con-

stru cte d, a pa rt f ro m pa yin g

re nt c ur r e ntly. S o . is it possible

to gu ard a ga in st a pre dic am e n t ry of land use

a s th e o n e h om ebu ye rs in

o id a E xte nsio n a re in ?

P o ssib ly. if yo u sto p b elie vin g th e f ol lo w -

in g th re e pro pe rty m y th s.

Myth 11:and sold by government

agencies is .always clean. Whilel a ndsh a r k l ng by th e g o ve rn m e n t a ge nc ie s is

n ot c o mm o n, it isn 't u nh ea rd o f e ith er . I n

th e otda E xte nsio n c ase . th e e ntir e la nd

th at w as bo ugh t by bu ild ers w as f ro m th e

G N IDA,.a go ve rn m e n t b od y. S o , if )70U

w an t to buy a pie c e o f la n d in a re as th at

a re b ein g n ew ly d eve lo pe d. stic k to la nd

I I INBR. IEF

w h ose o w ne rsh ip is n ot d ivid ed . U se th e

se rvi ces o f a go o d la w ye r to e nsu re th atall th e pape rw o rk , c le ara n ce s a n d use

c on ve rsio ns a re in o rd er .

Mythl2: Ba'nks and lues d'o prOlperdue dillige:nce on tile property to be

mortgaged befol'e lending to Ibuyers.

T ha t's th e th eo ry a n d homebujers, mo s t

o f w hom d o n o t h ave th e re so u rc e s to d o

the d u e d il ige n ce th e m se lve s. te n d to t a k e

it a s a n u n w rit te n ru le th at if a f in an cie r

is wi l l i ng to le n d fo r a par t icu l a r pro jec t .

it in dic ate s th at th in gs a re in o rd er , B an ks

a n d HFCs pla y sa fe b y sU pp in g in a c l ausein th e h om e IO(Ul ag re em e nt th at u lti-

m a t el y p u ts th e r esp o nsib iU ty o f r epaying

th e lo an o n th e bo rro w er , ir r e spe ctive o f

what h a pp e n s to th e p ro p er ty

be in g h eld a s c o l l a t e r a l b y th e

b an k. T h ere .isn o su bstitu te fo r

d oin g a th o ro ugh due d i l igence

yo urse lf -c he ck if th e d eve lo p-

e r h a s a c le a r t itle o n th e la n d

a nd th e n ec essa ry a pp ro e a ls ..If

th er e is r e ce nt c on ve rsio n o f

la nd u se , th e h isto ry o f th atn e e d s to b e c h ec k ed t IOO.

Myth 3: Under-development

property is cheaper, Pu r e ly

in te rm s o f pric e. th ey a re . .B u t

th a t m ay n o t necessar i ly be th e

case i f a c o st is im pu te d to th e

unc e r t a i n ty o f p ro je c t c o m p le -

t io n , s le e p le ss nights and jeop-

a rd i s e d f in a nc e s. S o , b u yin g o n r esa l e

m ay n o t be a ba d idea if yo u c an 't find a

n ew r e ady - t o -move - i n proper ty .

L a st bu t n ot th e L e a st , w h e n yo u e n te rinto a gre em e nts w ith the d e ve lo pe r a nd

th e ba n k th at fu nd s your h o u se p u rc h as e,

be very su re th at th er e is a c la use in b oth

a bo u t yo u r r ig hts . 0

• There is no

substitute for

developer hasa clear t i t le : on

the l a nd and

the necessary

approvals.

• Check hlsto-

conversion

[email protected]

Photo: BHIiIPINIlER SINGH

"".. .. ' :1I i. ,OUTlOOK MONEY .10 AUGUST 2011.'www.outlookmoney.com\I~wo;m~g,

I]tlp:lltwitler.cQmfOut~ookMQney; hllp:/lwww.lacebook.comfo!m·ndia







M FI ExplorerC 'o m ple te fu nd a na ly tic s o n y ou r d e sk to ip

M FI SmartTrack)r iour solutton fo r transactlon a nd re 'la tio ns h ip m a na ge m e nt o n cloud

White L,abel ResearchF un d alnd fix ed jln com e re s ea rc h tn you r l nbox

M F I Financial P lannerA w eb b as e d platformto in tegra te th e a d vis o ry ne tw ork a nd p la n

fo r g oa ls , re tire m e nt" in su ra nc e a nd In ve s tm e nts

M F I Office M anagerBack offic e and ch anne ll m anage me nt so lu tion for m utu ia ll f u nd ,

tnsursnca , FD and IPO

MF Portfolio TrackerAccurate' portfolle valuation and return computation for

mutual fund portfolios

Portfolio OptimisationPerfectly blended IPortfolio solutions fot you l r clients

Mumba '

T e l + 91 -9 22 35 , 2 61 02

,av i shek_ dey @ lcrao l il ine ' . com

NewlDe lh i

T e l + 9 1- 99 9 9 39 5 7 8 3

p ram od .k l lmar@ ic r :aon l ll 'l e . com

IICRA Online LimitedA . Group leRA Companv C h e n n a i

Te . + 91 - 95000 14 64 95j a .ya kannan . s l ngamu t hu@ l c raon li ne .com

Kolka ta

Te l + 91 '9 '8 36 1 0 90 30

www.icraonilliine ..c.om p r .ant i k .dasgup ta@ icraon l i ne .com

< ~worldl'\ag~ Cerp, O ff ic ,e :1 07 , 1st F lo o r, R a h eja A rc a d e, S e cto r 1 11 ,P lo t N o . 61 , . C SD B e la pu r, N a vi Mumb a i , 4 00 61 4_ ln d ii8..

T : 9 1 -2 2- 67 81 61 00 I IF : 9 1 -2 2- 27 56 30 57 I E : enqu i r y@ i c raon l ine . com









I My Plain I

BY ANAGHI PAL

DRAWINGUPAGAMEPLAN

G aurav can m eet his g oa ls com fo rta bly b yallocatin g the surp lus in hand in the righ t w ay

HYD ERABAD b ase d D jjw a J

G au raw 30 , a n d h is w if e , M e en a K um a r i, 3D ,

a re so ftw a re in du stry p ro fe ssio na ls ..R e ce nt jo b

c ha n ge s h ave m e an t th at th eir sa la r ie s h ave go ne

u p ..b u t th e c o up le still h ave th eir f e e t p la nte d

f i rmly to th e g ro u nd .

S a ys G a ur av, "W e spe nd m o ney o n w h a t w e

n ee d . bu t w e a re n e ve r e xtr ava ga n t. 1w a n t to

h ave a c o m fo rta b le an d se tt le d l ife . T he IT se c to r

is q uit e v ola tile . a n d i f in th e fu tu r e w e e ve r go

through a b a d ph a se . I w an t to e n su re th a t w e d on o t f a ce a ny h ard sh ip ."

W h e n h e sta r te d w o rk in g. a large part o f h is

sa la ry w e n t in r e pa yin g h is e du ca tio n lo an . so h e

c ou ld m a ke o nly lim ite d in ve stm e nts . In th e

c ou rse o f tim e , h e m a d e c er ta in in ve stm e nts in

unit-linked insurance policies and in a Public

P ro vid en t Fu nd (P PF) a c co un t, a n d h ad sh are s

fo r a w h ile in 2009. " T e n d e d up lo sin g m o n e y in

s h a r e s . 1 d i d n o t h ave a n y in fo rm e d m e ch an ism

fo r investing; it followed m o r e a trial-and-error

m e t h o d . S o, I h a ve st op pe d in ve stin g in sh a re s."

h e says.His go als in clu de bu yin g a h ou se in th e recent

future. a plot in his horne-town to build a second

h ou se in th e n ext five ye ars , a n d a c ar . T h e c ou ple

plans children in th e n ext two years.

N o w , w ith q uite a b it o f surp lus c a s h in h a n d

alter meeting t he ir m o n t hly expenses, Gau r a v

k no w s th at Itis th e r igh t t im e to f astr ac k h is

financial planning so th a t h e is a b le to m e e t a sg oa ls . H e re 's o u r plan f or h im . 0

[email protected]

~f.ik e G au ra v. y ou w ou ld like to s ha re

y ou r s to ry a nd h ave a fin an cia l p la nm ad e b y a fm anc is l p lanne r, w rite in

10 us w ith you r con tac t num be r a t

[email protected].

""....A~ OUTLOOKMONEY.10 AUG UST 2011 1 • wwwou tlook ,, ~ "w o ; m ~g s

HARS!HIROONGTA

CEOAIPNAPAI ;SA;COM

Th e planner can b e re ac he d

at [email protected]

A. P RA BH AKA R R AO


mailto:[email protected].



mailto:[email protected].




~I Jobs & Careers I Enterpr ise I Banking I Taxat ion IlnSlJI rance [Invest ing IReal Estate IiI'lnanc::laIIPlann'l!Sl lipside I

Up next I I : J The GI'oball lndlan: Investing In Start-lII,pS pg 54

f 5 .0 0 la k h *YEAR 2012 f ,5 .0 2 c ro : r eYEAR 2039{51

6 .DDla ' kh*YEAR 2016

2 0 1 2 2018 2025

THE RIGHT ST ATE ,GYUjjwal and Meena earn ~1.07,500per month.

Their monthly expense is ,\48,500 including

house rent, ~5.000, and contribution

towards Ujjwal's parents ,{9,000. They planto buy a property in the next six months for

a value on'35 l a k h , The annual life insurance

premium paid by Ujjw,al is ~t10 lakh while

Meena pays ~70,OOO. Their Employees'

Provident Fund (EPF) deductions per month

is ~3,744 . They have f1 .6 5 la k h in fixed

deposits and savings account. The balance

in Ujjwal's PPFaccount is ~34 ,OOO.The fund

value of Gaurav's ULiPs is ~3. .50 l a k h , Theirtotal EP F account balance is ~ 90 ,O OO. A n d.

they possess jewellery worth n.50 lakh ..

Insurance planning. We advice them to sur-

render a number of plans and keep the sur-

render value in savings account wilth sweep

in and sweep out facility. However, they can

continue with the L ie Endowment policy

and the Lie New MoneyBack policy. Ujjwal

and Meena should take term plans of ~

crore and ~50 lakh, respectively. For health

insurance, continue with the policies from

New India Assurance, G.aurav can take anindividual cover of ~3 lakh for each family

member, costing ~35,OOO per annum,

Child's goals. The couple doesn't have a kid,

but they plan to create a corpus of ~5 lakh

in one year. Apart from the balance in sav-

ings account, they should start a recurrinq

deposit of ~O,OOO per month for a year ..

Gaurav can also invest ~9,OOO in equity

mutual funds and ~,OOO ingold funds.

House purchase. In six months, they want

to buy a house worth ~35 lakh through loan.

The downpayment required is ~7Ialkh, whichUjjwal will arrange from parents and rela-

tives on a non-refundable basis.

Plot in hometown. To buy a plot and build a

duplex in Jamshedpur, Ujjwal's homewtown,

he needs to invest of ~O,OOO per month in

a recurring deposit and ~5,OOO per month

in a diversified equity fund for five years.

Buying a car. The couple cannot buy a luxu-

ry car now, but they can buy a car worth

~5 lakh within one year. To accumulate the

downpayment, they should start with a

recu.rring deposit of V,500 t il l they bu y the

car. The EMI for the car loan will be around

the same amount later on.

2032 2039

'j':u!Ure prices

TAX PLANININ'GlJlIjjwa,land Meena can

invest the amount allocated

towards retirement and

children's future in tax sav-

ing equity schemes for~6.000each. Continue it till

March 2012 ..Once the

Direct Taxes Code comes

in, invest in diversified equi-

ty mu t u a l funds. They can

invest ~20.000 each in

intrastructure bonds.

CONT INGE INCYPLANN INGTheir Iregular monthly

expense, includiinginsur-ance premiums, is ,{61.000.

The combined resource of

n65 lakh in savings

account and fixed deposits.

should take care of three

months' expenses. Keep

this in savings a'CCOI.mtwith

the sweep in and sweep out

facility for better returns.

RET IRE IM I EN I T

PlLANNINGTheir monthly expense willi

be ~2 lakh during r,etire-

ment,at an inflation of 6

per cent per annum ..The

corpus required is ~5.02

erore and will suffice till!

they are 85. They will be

able to accumulate ~60

lakh through EPIFtilll they

are 58 ..They can also invest

~9,000 per month in

equity-diiversified mutual

funds and f),OOO per

month in gold funds.

= hllp://lwiller.com/OUllookMoney; hllp:l/wwwJaceoook.com/olmindia

http://dlgital.outlookmoney.com.10 AUGUS12011 . ' OU1iLOOK MONEY &3

http://dlgital.outlookmoney.com.10/

http://dlgital.outlookmoney.com.10/



I Th,e Global Indian I I

BY R. SRIDHAR AND CHETHAN BHAT

INVESTING ININDIAN START-UPS

The major routes bywhich NRIs can investin Indian enterprises

and related restrictions

ntrepreneurial zeal is not

something new to Indians and

the llberallsatton of the Indian

economy has only fuelled this

spirit. The country's lnvestment-Irlendly

environment and regulations provide a

great platform for its entrepreneurs to

not just tap domestic sources of capital

but also access international sources for

funds and technology.Apart from the traditlonal forms of

lending by banks and non-banking

financial institutions. the following

sources of funding are increasingly

becoming available to people wishing to

start an enterprise:

1. Foreign direct investment (FDII) ..

with or without technology

collaborations; and

2. Venture capital funds rVCFs) and

funds from angel iilnvestors. This

includes both domestic as well asforeign VCF s . .

In India. the pm policy is framed by the

Department of Industrial Policy and

Promotion (DlPP) and is administered by

the Reserve Bank of India (RBI) through

provisions of the Foreign Exchange

Management Act, 1999 (Perna). .

Generally speaking. FDI ispermitted in

all sectors barring a small negative list

which includes sensitive sectors such as

agriculture. retail trading. real estate

and atomic energy. and sectors that the

government is averse to foreign

investments in. such as gambling.

FUNDS FROMN IR ls A .IN ID PIOs

A THROUGH FOREIGN

OIIRECT INVESTMENT (FOI),WITH OR WITHOUT

A TECHNOLOGY

COLLABORATION

THEFIUNDFLOW

PROCESSPermitted inall sectors exceptagriculture, real estate. atomicenergy and some sensitive ones.Umited FOI allowed in certainkinds of agriculture and real 'estatedevelopment activ,ity. Capped indefence. print media and telecom

HOW NON "R E SID ENT

INDIIA N S (N R lls ) C AN

IN VE ST IN IN DIA N

S TART-U Ps A INDENTERPR ISES

• Limited liability partnerships(ILLPs)now allowed through theIForeigln Iinvestment PromotionIBoard (FIPS) route. An LLP offersthe advantages of both partner-

ship and the company formof business

"".... 1:.4,OUTLOOK MONEY., 10 AUGUST 2011 • www.outlookmoney.com\I~wo;m~g,





I J ob s & C are ers I En terp r i se IBank ing ITaxa t ion I In su rance I Inves t ing IIR e a l E s ta te IFlnanelalP; "nlll F l ips ide I

Up n e xt I I: ]Managin.g Weallh: ILIfestyle SI'ralegles pgl 56

T he G lo ba l In dia n

betting. chn fund. lottery and

manufacturing o f c ig a r e tt e s.

Limited .pm in certain kinds o f

agriculture. Single-brand retail trading

and real estate construction develop-

ment activities is permitted subject to thep re sc rib ed c o n ditio n s. T h e p o lic y a lso

prescribes PDl caps for sectors such a s

d e fe n ce . th e p rin t m e d ia . in su ra nc e

and t e l e c om .

A n im p o rta n t l im i ta tio n forFlrl to f lo w

freely into micro and small enterprises

(MSEs ) a rise s f ro m th e r e se rva tio n o f

i t ems exclusively for M SEs. An M SE

actlvlties into wl1ichinvestments by for-eign venture capitallinvesto:rs is not per-

mitted-limited to NIBFCs,goldfinancing and activities not per-mitted under the fndustrialpolicy

• Investment lin

domesti'c VCFs setup as trust needs,FIPBapproval; in

, those set up ascompanies, it getsthe automatic route

engaged in the manufacturing

of reserved items requires the

approval of the For e i gn

Investment Promotion Board

( FI P B ) f o r ro t ex c e e d i n g 24

per cent of its capital. SuchMSE s r e q u ir e in d u s tr ia l

licences and are expected to

e xpo rt a t least 5 0 pe r cent of

the additional production that

th ey a c h ie ve in a pe r io d o f

three years. At present. there

a re 2 0 items that c omp r i s e

this exclusive list.

In 2010. there werethrough the

I F c I P B , route

C om in g to V C Fs . th ese a re

regulated b y the Securities

a n d Exc ha n ge B o ard o f In dia

(Sebl) through Sebi (Venture

C a p it al F u n d ) R e g u la tio n s .

1996. and Sebi (ForeignVenture Capi t a l Investors)

Regulations ..2000. Under

these regulations. there is a

small negative list of activities

in which investments by

foreign venture capital

in ve s to r s ( FVC I s )or d om e s t i c

VCPs are not permitted.

T h e se a re l im ite d to n on -

banking financial companies

(N B P C s ). g o ld f ln a nc tn g a n d

activities not permitted under India'sindustrial policy.

The iRBIregulates domestic VieFsvery

l o o s e l y as these a re considered! Indian

investors. \l\lbHeforeign investments into

domestic VC P s that a re se t up a s t ru s ts

require the approval of the P [ P B . those

in d om e st ic V C Fs th at a re set up a s

companies fall under the automatic

route. but are su bje c t to m in im u m

capitalisation norms as prescribed Cor

fund-based BFCs.

Sebi's \ rCF regulations currently donot allow domesti.cViCFsiF\rC]s to invest

in an LLP.However. it would be

interesting to watch this space for any

regulatory developments.

India received FOI to the t u n e o f

$4.664 billion (about n.07.S40 crore)

in the month of May 2a 11. which is the

second-highest foreign equity inflow

received in any month for the last eleven

f ln a n c ia l y e a rs .W h t le the g o v e r nm e n t

has opened u p FO I in L L Ps. a lo t needs to

be done in the trading se c to r . O p en m gup multi-brand r e ta i l trading wi l l

c h an ne llse In d ia n e n te rp rise s to

welcome a f r e sh w a ve of foreign

in ve stm e n ts. L ik e la st ye a r . w h e n F OI

re gu la tio n s w e re re la xe d . th e

government could d o well to t a k e more

such steps to boost inflows. C iI

• MSEs that

IN B RIE F

manufacture

certain re-

served items,

require f l PB ' sapproval for

I F D I exceeding

24 per cent of

thelr capital!

• IFOIin LLPs

T h e w r it er s are assoc ia t e director a n dassociate, respectively, tex &

regu la to ry services, PwC lndia

has been

allowed

important relaxations inFOI

r egu l a t i on s . Itsaw the removal

of all the conditions associated withforeign investments b y investors who

previously had a t e c h n o l o gy

collaboration or Joint venture o r tie-up

in India ..

Interestingly. earlier. th e entire P O I

policy was centred on investment in the

company form o f business. Itwas o n l y

a s la te a s May 2011 that the

government permitted Fo[ in the lirruted

l ia b i li ty p a r tn e r s h i p (LLP) form of

business. LLPs offer th e advantages of

bo th pa r tn ersh ip a n d th e c om pa n y f o rmof business. Entrepreneurs and investors

u sin g th e L LP form a re a ble to s tr ik e t h e

right b a l a n c e of ownership. control and

management in the affairs of the LLP

wh i l e keeping themselves insulated from.

u n l im i t e d l ia b il it y that m ay a r ise o nt o f

s u c h bus i n es s .

FDI in LLPshas been allowed through

th e F IP B approval ro u te . H o w e ve r, su ch

FDI is available only fo r sectors/activities

where 100 per cent FOI is allowed under

the automatic route and where there aren o F OI -lin k ed p er fo rm a n ce re la te d

c o n d i t i o n s . for instance. real estate.

FOI in any other form of entity.

including a t rus t , is not pe rm i t t e d

under Indian laws. Limited investment

a ve nu es fo r a n on -re sid en t In dia n (N R I )

or a person of Indian origin (PIO) are

a va ila ble in a p ar tn ersh ip o r p ro pr ie ta ry

c o n ce rn ..I I th is in ve stm e n t is to be

m a de o n a re pa tr ia ble basis ..then it

would require the prior permission o f

th eRBt The apex bank consults the

Government of India before granting

such an approval.

I f y ou a re a n N RI and h ave a

q U G l r y a b ou t p e rs o na l f in a nc e ,

w rite in c o

I l e t te r s@ oL! t lookmone y . , com

< ~ o r t dM ag i

I:lh ILp : / llw i ILer .com/O lJ ll lookMoney ; hUp: / fMVIN .ou l l ookmoney .com/Faceb ook /o lrn ind ia

www . d l g i t a l . o u t l l o o km o n e y . c om . 1 0 A U G US ,. 20111.' O'UTliOOK MONEY II

http://www.dlgital.outllookmoney.com./

http://www.dlgital.outllookmoney.com./



IManagling Wealth

BY RADHIKA GUPTA

EVOLUTIONSANDOROW H

How changing yourapproach to wealth

management over time

helps you

Wh ile w e al th m a na ge m en t

is ofte n p re se nte d as a

s ta tic p ro b lem . a n in d ivid -

u a l's f in a n c ia l n e e d s a r e

ve ry d yn am ic a nd o ne 's a tt itu de to

fin an ce s s ho uld e vo lve o v e r o ne 's li fe cyc l e

-f ro m a stu de nt to yo un g pro fe ssio na l ,

f ro m a n e sta blish e d jo b to re tir em e n t.

T h is l l fe c yc le -b ase d a pp ro ac h to w e a lth

m a n age m e nt fo cu se s o n d ive rsifyin g a ndo ptim i sin g yo u r in ve stm e n ts o ve r yo u r

l if e tim e . a n d is o fte n o ve rlo o k ed . B e tw e e n

th e a rra y o f in ve stm e nt o ptio ns a nd pro d-

u c ts a va il ab le , in v es to r s g o p ro d u c t-sh o p -

pin g, in ve stin g ln pro du c ts th at c atc h

t he ir e ye , w i th o u t a se nse o f th e ir b ro ad er

f in an cia l p ic tu re a n d w h at th ey re al ly

n e e d to m e et th eir go a I s. B e f o re t he y

re alise . th ey h ave a po rtf o lio o f 30 m u tu -

a ll f u nd sc he m e s, 1 0 d if f e re n t b an k

a cc o un ts , p riva te e qu ity f un d s, va rio u s

p or tfo lio m a n ag em e n t sc he m e( PMS )

pro du cts , a n d u nit l in ke d in su ra n ce p la n s

(I l l ips], b u t a r e n ot su re h o w to m an age a

h om e paym e nt o r c h ild 's m a r r ia g e . H ow

d o es o ne ge t sta rte d w ith lif e c yc le in ve st-

in g ? L e t 's s ta r t b y looking a t th e th re e

ph ase s in a n in d ivid u al 's l if e .

S t aM i n g Out. Young profes s iona l s h ave

ju st s ta r te d o u t th e ir c a r e e r a n d a re a t a

s w e e t spo t a s f ar a s f in an cia l p l a nn i ng is

c on ce rn ed . T h ey h ave a c om f or ta ble

str e am o f i n c om e a h e a d o f t h e m . wi t h n o

Im m i ne nt l le btl l t le s. W h ile th er e is a

te m pta tio n to be re ck le ss w ith yo u r

f in an ce s a s a yo un g p ro fe ssio n al . th is is

I lu sl la tlQ f l, A N I R B AN B OR A

th e t im e to sta r t a h ab it o f sa vin g an d

le arn in g a bo ut th e b asic s o f in ve stin g.

A go od sta rt in g po in t is to lo ok a t yo ur

m o nth ly in co m e, a n d a l lo ca tin g a m e an -

in gfu l p or tio n , w h e th e r it is 2 0 pe r c e n to r 50 pe r c en t. to w a rd s m o n th ly sa vin gs.

T ho se m o nth ly sa vin gs c an b e pu t to u se

in a syste m a tic in ve stm e n t p la n (SIP)

f o r m . B y m a k in g m o n th ly in ve stm e n ts .

y o u w i ll a ls o d iv er sif y y ou r in v es tm e n t s

w ith tim e , so m e th in g ve ry fe w m ve sto rs

d o. M a rk et t im in g in th e e qu ity w o rld is

v er y d if f ic u lt . b u t a lso im p o rta nt . a n ds ome t h i n g ve ry fe w f u nd m an age rs o r

in ve sto rs ge t r igh t. H o w m u ch sh ou ld yo u

in ve st in to e qu itie s a nd d eb t? W h ile c on -

OVER THE YEARSYOUR STR ATE G IE S NE ED TO

CHA NG E A T DIF FE RE NT STA GE S

OF YOUR F INANCIA L LIFE

A An individual~s financialneeds are very dynamic andyour a.ttitude, towards financesshould evolve over your life,cycle

B,y,oung professiionals are sit-uated in the right spot: theyhave a steady income flowahead of them and no liabili-ties. Thais is the time to start



Managlng Wealth

I Jobs & Careers IEnterprise IBanking ITaxation I Insurance I Investing IIReal Estate IFlnanelalP; "nisi Flipside I

Up next I:lPortfolio Makeover pgl 58

ve ntlo na l w isd om w o uld su gge st a 60-4 0

sp lit, a l lf ec yc lc -b a se d a pp ro a ch t o in ve st -

in g su gge sts th at yo un g in ve sto rs sh ou ld

b e m o re a ggre ssive . Y ou r prim a ry w e alth

a s a 2 5-ye ar-o ld is yo ur h um a n c apita l-

th e in co me yo u w il l e a rn fo r th e n ext 35

ye ars o f yo ur L ifea nd tra nsla te in to f in an -c ia l c apita l , a n d yo n c a n th in k o f a l l yo ur

fu tu re e arn in gs a s a bo nd . B e tw e en

fu tu re in co m e , pro m o tio ns a nd ra ise s,

yo u h ave a life tim e w o rth o f e arn in gs,

even th ou gh yo ur savtngs a re m i n im a l .

T h is in co m e is l ik e a se cu re bo nd , yo ur

c urr e nt sa vin gs sh ou ld b e prim a rily in

e qu itie s. Y o u a re a lso awa y f r o m m a jo r

l if e m ile sto ne s lik e a m a rr ia ge , b uyin g a

h o u s e , paying f o r a c hild 's e du ca tio n a n d,

f in a l l y , r e t ir em en t . Even if yo u e n co u nte r

a be a r m ark e t to be g in w ith , yo u h avet ime to r id e it o ut a n d re co ve r yo ur lo sse s.

A lso . yo u ng in ve sto rs sh o uld sta rt in ve st-

m e nts by fo cu sin g o n sim p le pro du cts

w ith c le a n e xpo su re th a t a r e e a sy to

u n de rsta n d-e qu ity m u tu al fu nd s a n d

E T F s a re g o od st ar te rs.

Playing the nlid-game. Mtdd l e yea r s

re f e r to th e ph a se w he n yo u h ave a ste a d y

stre am o f in c om e an d a grow in g ro a d

m ap o f f i nanc ia l l ia b d it te s imm in e n t f\t

th is po in t in yo ur l ife , it is im po rta n t to

c h a r t o u t a ve ry c le a n p la n o f h o w m uc hm on ey yo u n e e d a t e a c h tim e po in t in

yo ur l if e . K e ep in fla tio n in m in d w h en

yo u pla n th ese e xpe nse s. E stim a te yo ur

a n nu a l in co me an d th e savin gs yo u

e xpe ct to h ave o ve r th e n ext 10 -2 0 ye ars .

CAt this st.age,.be moteaggressive in In,vesting, withmore focus on equities

B ase d o n th is , yo u c a n c om e u p w ith a

d ea r in ve stm e nt p la n . A t th is po in t in

yo ur l ife . i t is im p orta nt to start shn t tng

fu nd s to w ard s d eb t. k ee pin g a c le ar e ye

o n liquidity Equity in ve stm e n t s w h il e

ge ne ra tin g h igh er re tu rn a r c n ot id ea l"

u nle ss yo u h ave a th re e- to f ive -ye ar tim eh or izo n. so k ee p th is in m in d

w h e n yo u I nve st. A l so . .b e w a r y

o f in ve stm e n ts th at b lo ck

l lqutdi ty c om ple te ly-su ch a s

priva te e qu ity fu nd s a nd stru c-

t u re d p ro d u c t s-b e c au s e yo u

m a y fin d yo urse lf stu ck w ith -

o u t : t h e l iq u id it y.

T h is is a lso th e time t o st ar t

m a k i n g l ump s um i nve s tmen t s

fo r sp ec if ic p ur po se s, w h e th e r it

is b u yin g a c a r o r a h o u s e . It iso fle n c on fu sin g a nd o ve r-

w he lm in g to p la n a la rge c o r-

pu s to w ard s ge ne ra l savings,

S p lit tin g m o n e y in to sp ec if ic

i nve s tmen t s des igna t ed fo r a

pu rpo se is a c on ve nie nt w ay to b re ak

d ow n an o th erw ise d au ntin g pro ble m .

A lso , b ew a re o f fu nd s d esign ed fo r c htl-

dren's educ a t i o n and marrtage-s-most o f

th em a re n o d if fe re nt f ro m re gu la r e qu ity

o r b ala nc ed fu nd s, w ith a l ar ge m a r k e tin g

a n d bra n din g a d de d o n, a n d u nn ec essa ri-ly h igh f e e s. R ath er th an c h oo se o ne o f

th ese sp ec if ic f un d s, ju st a llo ca te th e

m o n ey fo r th at pa r tic u la r pu rpo se to a

go od e qu ity o r ba la n ce d fu nd (th e ba l-

a nc ed fu nd be in g th e r igh t r isk -re tu rn

combmation) ..

T h is is a lso th e r igh t po in t in yo ur l if e to

th in k abo ut in su ra n ce -lif e a n d h ea l th -

w he n th e prem ium s a re n o t to o h igh

be ca u se o f th e pa r tic ula r sta ge o f yo ur

l if e . B e c are fu l a bo ut w h at In su ra nc e po li-

c ie s y ou o pt fo r-avo id U lips a nd stic k to

Pllanning for Retirement. W h ile m u ch

h as be en w r it te n about w e alth m a na ge -

m e nt fo r r e tir e m en t, th e k ey issu e is to

r e a l ly u n d e rsta n d h o w m uc h m o n ey yo u

w il l n e ed to live th e lir estyle yo u a re c o m -

fo rta ble w ith . M o s t in d ivid u als o fte n

u nd ere sn m atew h at th ey w il l n e ed fo rre tir em e n t, n o t realising t h a t

m a n y things th at th ey think o f

a s lu xu rie s w il l red l ike necessi-

t ies w h en th ey re tir e .

R e tire m en t m a y be thefirst

t ime in yo u r lif e w he n yo u a re

f r e e to tra ve l, p la y go lf a nd

fo c u s o n h o bb ie s. la k e su re

th at yo u have bo th th e tim e

a n d m on ey to d o this ..FOCllSon

b uild in g a su rp lu s fo r r etir e-

m e n t, a n d th en in ve stin g inin str um e n ts th at a re c o ns er ve -

nve a n d fo cu se d o n m o nth ly

in c om e . R e d uc e e qu ity in ve st-

m e n ts a nd H l lq uid in ve stm e n ts

a n d m o ve to f ixe d in co m e

INIBRIIEF• While plan-

ning for retire-

ment. the key

is to under-

stand how

much money

you wi I1I1eed

to IiIvethe l i i fe-

style you are

accustomed!to. Today's

luxuries may

be tomorrow's

necessities

in stru m en ts. M o n th ly in co m e pla n s, f o r

examp l e , 1 1 . 1 a y be a g o o d WH Y to h ave a l l t-

tleequity u p. id e w : ith lixe d in c om e sa fe ty,

a n d ge tt in g a re gu la r c a sh f low to m ee t

yo ur n ee ds. A s yo u ge t o ld er , it is a lso

hnportant to c on s o l t d a t e y ou r in ve st-

rn en ts+pru ne th ose extra MF s ch e m e s,d ose th e e xtra ba n k a n d d em a t a c c o un ts,

a n d h ave e ve ryth in g in o ne p la c e.

F in an c ia l p la nn in g a cr oss a lif e-c yc le

so u nd s in tim id atin g, b ut it is r ea ll y a bo u t

fo cu sin g yo ur f in an ce s to m e et yo ur

im p o rta nt l ife g oa ls . .A lit t le b it o f e ffo rt

w il l pay r ic h d tvtd en ds a n d g ive yo u th e

r ig ht b ala nc e b etw e e n e n jo yin g the pres -

e n t a n d savin g fo r th e fu tu r e . -

DMiddle y,ears liswhen youhave a clear idea of your liabili-

ties. Challk out a dear plan foryour financial goals

The writer is co-founder, quantitat ive

investment manager lForeiront

Cap i t a l Managementte rm in su ra n ce .

If you h a ve a n y query r ega rd ing

wea l t h management. JUS l

w r ite to

[email protected] ..com

E This isalso the time to start mak-ling lump sum payments for certainexpenses like house, car and so on

F The final key stage is pla,Ming; forretirement. The crucial part hereisto understand how much money youwill need to live properly . .

I:lhi tp:/ II will er.corn/Outlooklvloney, htt p://www.outloakmoney.com/Facebook/almindia

http://digitaloutlookmoney.com.10AUGUST20.11. OUTLOOKIMONEY &,


http://p//www.outloakmoney.com/Facebook/almindia

http://digitaloutlookmoney.com.10august20.11./

http://digitaloutlookmoney.com.10august20.11./

http://p//www.outloakmoney.com/Facebook/almindia




I Jobs & Careers I Enterprise I Banking IITaxation I Insurance I Investing I Real Estate I Flnanel'.' PI..,., ns I Flipside I

Portfolio Makeover

I Porl'o,l:o Makeover II

BY KUNDA,N KISHORE,

GONEFORANOVERKI L

PRIYAM'DHAR

Sandeep RawaI, 28, has made the mistake ofo ve r-d ive rsifyin g h is po rtf o lio . H o w e ve r, a b it o frejig and he should be able to meet his goals

sa n d e e

pR a w al , 2 8 , a P u ne -b ase d

s a ,. Ie , p ,rO f eSSnOna l. ,, ta ,r ,t e d I n e s t-ingin stocks and mutual funds

in 2 007 . H e in ve ste d in m o re

than 20 MF schemes for his mid- and

lo n g-te rm f in an c ia l g oa ls , n o t to mention

35 stocks, n o t realising that he was m a k -

in g th e mi s t a k e o f ove rd lve r s f l c a t l o n .T h e r e is not enough r ep r e s en t a t i o n to

c om p an ie s r e la te d to Indian c o n s ump -

tio n , e xc e pt G lta n le lt , lT C and Fu t u r e ,

T h e r e is ju st o ne sto ck f ro m th e p h a rma -

ceutical s e c t o r : !peA. W i th th e ye a r

ahead lo ok in g to be a tu rbu le n t o ne , it's

c ru c ia l to h ave defensive stocks.

As a thumb rule, one should have a life

c o e r o f a t le a st] 0 tim es th e annua l in c -

ome. Sandeep has a life cover of ~2 5 lakh

f r om M a x N ew York L if e . H e a nd h is w if e ,

S o n a l , also have ~3.3Jakh cover in form

o f a A po llo Fami ly Floa t e r P lan . Sa n d e e p ' s

employers DOverh im for ~5lakh towards

a c c t d e n t a n d h ea lth co ve r . w h ile S on al

has a ~2 lakh f r o m h er 's . T h ey sh ou ld

c on tin ue th eir e xistin g h ea lth p la ns and

b u y I nd ivid u al l if e c o ve rs to o , a pa rt f r om

th e f am i ly f lo a te r plan th e y h a ve . As t h e y

appro ac h 4 0, th ey sh ou ld bu y c nd ca l ill-

n e ss c o ve r f o r t he m s e lv es . 0

kundan@oullookind'ia.com

THEOLM

REJIG

SAN DEEP RAWAL

MUTUAL FUNDS

= He shoul'd ,continue to hold IhisInvestm.entls in

• R~eUanceGrowth .ICICllnfrastrlllc-

ture • DS P B'llackRock (BR) Top 100

• HDFC Top 200

I:]He should continue his SiPs in

.ICICI P,w Discovery. Birla sun Life

Frontlline • DS!?World Gold! .UTI

Opportunities • OSP B!RTaxsaver

• DSP fA R E,quity • IIDFCPrem ie r

EquIty . 1 Reliance RSFEquity

= He should exit:

• SBI MagnumGlobal1

= He should make the following

switches

R e lia m:~ Vjs io n ~ IR e lia lll~ e R SF E q u i t y

Reliance I P owe r rm lR e l ia ll l, ?eR SF E .

BDFe Texsave r I i lJ IBDFC Top 2.00

1 0 - " '% 3 $ - )= He shoul'dseilithe foll'ow,lngscl'lps

• Bharat Forge • Crompton Greaves

.GVK lnfra .IDFC .Jiaiprakash

Power Ventur'es • Jyoti Structures

• Lanco lnfra • NHIPC .INTIPC

• R'ell'iancelndustries

= Heshoul'd hol'd these scrip,s

• Bharti Airtel I. Coallllindia • Esse'li

Prepack • Gitanjalli • IPCA Laborato-

ries .ITC • Mahilildra & Mahindra

• Praj Iindustries • REC• Power Grid Corp

I:]We don't track t:he followingscrips he hol~ds.So, we won" be abl'e

to,give our opinion on,them:

• Camsan Biosciences • Future

Vent,ure • IHll l' ldalco • Hindustan Zinc

• kabra Extrus'ion • Karnataka Bank

• Maneppuram General Finance

• MI:CElectronics • Sterlite Tech-

nologies • S'Upreme Industries

It like R aw al. y ou w an t y ou r

p o rtfo lio to b e re vie w e d, w rite

w ith y ou r c on ta ct n um be r to

lett,[email protected],

III hllp://lwitler,com/Out!ookMoney; hllp:/lwww.lacebook.com/o!m·ndia

"".... I:A,O'UTLOOK MONEY. 10 AUGUST 2.0111 wwwoutlookrnonevcom\ I~W o;m i! l ' : !gT

mailto:lett,[email protected],

mailto:lett,[email protected],



If you are a declared spendthrift, let us guide you to

get the best value for your hard-earned money on cars,

homes, gadgets, books-anything you can buy

INSIIDE60InteriorsWhen doiing upa room

for the newborn, keep

iin miind that you do not

m iss on the safety

concerns

62

TaillightRenault has announced

the launch of its DusterSU\/,.and Ford rolled

out its Fiesta

64Leisure 360Why The Big Short is

a must read on thesub-prime crisis

66HowTolBuyThe latest addiction

from the world of

technology is tablets

68ForWhat It'sWo:rthThe salary versus

satisfaction debate

continues

< ~worldl'\ag~I]tlp:f/lwilter.com/OuliookMoney; hllp:/Iwww.lacebook.com/olrnindia

http://digital.outlookmoney.com .10 AUGUS12011 • OUTLOOK MONEY &8

http://hllp/Iwww.lacebook.com/olrnindia



http://hllp/Iwww.lacebook.com/olrnindia



Ilntelriors I

BY TEJA ILEII.EDESAI

SETTING UP THEBABY'SROOM- -- -- -- -- -- -- -- -- - -- -- -- -- -- -- -- -- - -- -- -- -- -- -- -- -- - - - - - - - - - - -- -- -- -- -- -- -- ---

When doing up theroom for a newborn, the

primary concern shouldbe safety of the' kid

SOYOU, go t the tw,O pink l i nes ,h a ve be e n d oin g th e ro u nd s o f

th e gyn ae c, a n d h ave g ive n u p

vo dk a sh ots. B aby's o n bo ard ,

M o nth s a f te r yo u r ev ea l y ou r pregnancy ,

if th e re 's a su re sh o t "awwwww" m o m e n t

gua r an t o r , it's w hen yo u an n o u n c e th a t

yo u 'r e d oin g u p th e bab y's ro om . A c rib . a

c h an gin g ta ble , b rig ht m o b ile s a nd b un -t in gs. l it t le c lo th es pu t a w ay in a c o lo ur fu l

c he st o f drawers-doing u p the nursery

c an b e a n o ve rw h e lm in g e xpe rie nc e.

What does a baby need? Determine the

k in d o f fu rn itu r e yo u an d th e b aby wi l l

n e e d . l f yo u h ave a c om ple te ro om th a t

yo u'r e tu rn in g o ve r to th e ba by. yo u m ay

n e e d m uc h m o re th a n if y ou 'r e s et tin g

a sid e a c o rn e r o f th e m aste r be d ro om . A

c rib , c h an gin g ta ble , and a c ha ir are th e

pr im a ry pie ce s to sta r t o ff w ith . O th er

fu rn itu re th at yo u c ou ld m a k e sp ac e f o ri n c l ud e s a c om f orta ble so fa (w o r ks w e llfor (ceding), a chest of drawers, a closet,

s torage spa c e fo r to ys a n d a fu n rug .

Don't sh y a w ay from a c ce p tin g h a n d -m e -

d o w ns lik e ro ck er s . h igh c ha ir s a nd c rib s.

In ease o f ve ry old w o od en fu rn itu re , ge t

yo ur c arpe nte r to str ip th e pa in t a n d g e t a

n ew c o a t o f le ad -f re e p ain t p ut on. Ba b i e s

te n d to sle e p b e tte r in a d ark ro o m , so

s el ec t w i n d ow t re a tm e n t s. Other dements

to k ee p in m in d in clu de so ft l ig h tin g: a

n ig ht la m p is p ra ctic a l f or n ig htt im e

f e ed s . If yo u'r e a d ap tin g a c o rn er o f th e

m a ste r be dro om . c re ate a se nse o f visu al

se pa ra tio n -a sc re e n, f lo o r-to -c e il l in g c u r-

ta in s. b oo ksh elf . w h a te ve r w o rk s fo r yo u .

Keep baby safe. When d o i n g up the

b ab y's b ou d ou ir . th e pr im a ry c on ce rnsh ou ld b e sa fe ty . C he ck o ut th e Ju ve nile

P r o d uc ts M a n u fa c tu r er s Assoc ia t ion ' s

w e bsite (w w w j pm a .o rg ) fo r sa fe ty

in stru c tio ns. S e le ct a pa in t w ith o ut V O C s

a nd le ad , and o p t l or f u rn it ur e that's

m a de w ith ou t to xic g lu es, s ta in s a n d

paint C o n sid e r a ll t he in f an t -p ro o f in g

yo u n ee d to d o be fo re ba by m o ve s ilo-

sh arp c o rn er s . lo w w in do w s. e le ctr ic

p lu gs a n d so o n . G et a lo w ra il in sta l le d

around the pe rim e te r o f th e changing

ta ble . I de al ly, th e c h an gin g ta ble sh o u ldh o u se o n e o r two o pe n sh e lve s a lo n g with

c lo se d d ra w ers. B e fo re yo ur b ab y b eg in s

to w a lk . th e ~ o or 's g o in g to be h om e

gro un d. T h a t 's w h e re th e b aby wi l l

lounge, turn, crawl a n d th ro w a ta n tru m .

S to ne o r tile s a r e th e be st be t o n th e f lo or .T h ey'r e e asy to rid o f th e m a n y spil il s and

m e sse s th at a r e bo un d to o c c u r . Carpets

a re bes t avo ided . T h e s e days . m a n y

""....an,OUTLOOK MONEY .10 AUGUST 2011., wwwoutlcokmonevcorn, ~" w om r r a gs



· ~.

'I -- ~- _.

IJobs & Careers' Enterprise' Banking' Taxation Iinsuratlce 'Investing' RealEstate' Financial PlanningIUpside I

IJp n ext ~ TlIiIIigliltp9 62

From left 1 B ab ie s re spo n d to c o lo u r f ir st . 50 o p t f o r m o r e th a n o n e

c o lo u r . . 2 O p t f o r f u rn iitu r e th a t 's m ad e w ith o u t to xic g lu e s a n d pa in t .

3 C o n sid e r a c o n ve r tib le b e d . 4 S to n e o r tile s a r e th e b e s t b e t o n th e : f lo o r .

o rg an ic b ab y b e dd in g c rib covers , b u m -

p ers a nd b la nk e ts a re a va ila ble . C o tto n is

th e b est a ga in st a baby 's sensitive sk in a sc o m p ar ed to syn th e tic f ib re s.

Be gender neutral. W it h pre-

n a ta l s e x d e te r m in a tio n IN B RIE F b ed o ve r a p er io d . B a bie s

banned in India. w o rk a ro u n d _ See' the r esp on d to c o lo u r first t h e n

a g en d er -n eu tra l sc h em e . website sh a pe s. O p t f or b rig h t p rim a r y

L em o n ye llo w is go o d , b u t o f Juvenile c o lo u rs w h e n c h oo sin g

th e r e a r e o th e r c h e e r f u l tin ts P r o d u c ts m o b ile s. b u n t in gs a n d to ys.

th a t w o rk w ith spe c ia l M a n u fa c tu re rs I d e a n y, yo u s hou l d c r e a t e f o c a l

a c c e n ts-sa ge g r e e n . se a A sso c ia t io n po in ts a bo ve c h a n g in g , f e e d in g

g re e n , o ld ivo ry a n d c itru s • W o rk a ro u n d a n d sle e p in g a re a s . T h e r e 's

c o lo u r s. Y ou c an u se tw o a ge n d e r -n E lU - go in g to be e no u gh c lu tte r

colours( ap pl e g re e n

andbu t t e r

tral scheme.w h en th e b a by c om e s; k ee p itye llo w ) w ith a n eu tr a l t r im Choose a s tid y a s yo u c an .

(c in n am o n b ro w n ) to tie th e a lph a b e t P re d e te rm in e a bu d ge t a n d

ro om to ge th er . W h e n it c o m e s decor whi:ch st ic k to it . H a vin g a ba by a nd

to themes, g o w i th animals. is a po pu la r b r in g in g it u p is cU I expen s iv e

musi c a l s . c o lo u rs, sh a pe s , a n d o p tio n affai r th e se d ays; w o u ld n 't yo u

numbers, A lph a be t d e c o r is ra th e r spe n d t h e m o n e y o n

a lso p re tty po pu la r . .Y ou c an u se w o od le t- so m eth in g th at 's l ik ely to la st lo nge r th an

t e r s , fu n n u rse ry rh ym es, a n d po em a m in d -bo gg l in g m ura l o n th e wa l l ?

th em e s f o r a b a by's ro om . E nsu re th at th e H avin g a ba by is go in g to c ha nge yo ur

furniture has dean, sha rp lines-avoid a life forever. Ge t the baby's ro om re ad y

c a r -sh ape d stu d y ta b le o r a f a iry p r in c e ss a h ea d o f t im e -yo u'l l h ave m o re t im e to

type b e d , d r o o l o ve r th e " 5 10p er c en t M o m m y , 5 0

p er c e nt D ad d y" c re a tio n ! :J

a n d six m on th s d o w n th e lin e yo u m ay be

w o nd er in g w h a t to d o w ith the s w a n k y

n ew c rib yo u p ic k e d u p. Con s i d e r a c on -ver t ib le bed=oue th a t go es froma cr ib to

a to dd le r's b e d to a tw in-s ized

Thilllkof the future. B a b ie s c a n s ur pr is e

yo u w i th the r a te a t w h ic h they g r o w , [email protected]

< ~worldl'\ag~~ hltp:/ftwitler.com/OUIIOQkMoney; hllp:llwww.faceOOok.oom/olmindia

http://digital.outlookmoney.cam .10 AUGUST 2011 • O'U1"~OOK MONEY 61


http://digital.outlookmoney.cam/

http://digital.outlookmoney.cam/




THE RENEW ACTR

e na ult ln ru 8 h as l in ed u p f ive

c a r s to b e la u nc h ed in I nd i a

o ve r th e n ext tw o ye ars o r so .

T he m o st in te re stin g o f th em

s e em s t o be th e R e na ul t Du ste r S U\~ .

Origina t ing in Renau l t ' s R o m an ia n su b-

sid ia ry D ac ia (w h e re th e L oga n c am e

f r om ) , th e Dus te r w a s des igned a s a n

e co n om y ve h ic le a nd h as sign if ic an ts t rengths in t er m s o f d u ra bility, f ue l e c o n-

o my an d spa c e . B u t th a t m a y n ot b e

enough to sell it in I nd ia . So. w h a t

R en au l t w il l la u n c h is th e ve rsio n th at is

meant for its S o u t h Ame r i c an markets-

B r azil a nd A rge n tin a . T h e S U V (p ic ,

r igh t) w a s sh ow n a t th e B u en os

A ire s a uto sh ow la st m o n t h .

W h ile th e b o d y sh e ll r e m a in s

th e sa me as th e Dac ia 's, th ere

a :r e s o m e c o sm e t ic c h a n g e s

011 th e outside, su c h a s a n a ll -c hro m e R e na ult gr ille . a n d

b ig ge r c ha nge s in sid e a nd in

th e e ng in e. T h e ins ide ge t s a

n ew , m o re u pm a rk e t d ash bo ard

c om p a re d to th e Eu ro pe an ve r-

sio n a n d tr im le ve l, to o , h as

b e e n im p ro ve d. I t a lso g ets R e na ult 's la te st

so ph istic ate d4 x4 syste m , w h ic h h as a n

au to m od e apa r t f r om th e sta nd ard 4 x4

an d 4x2 m o d e s, b ut w o u ld b e a va ila ble in

4x2 too. W i th a pp ro ac h a nd d epa rtu re

a ng le s o f a bo u t 30 d egr ee s a nd gro u nd

c l e a r a n c e o f o v e r 200 n u n .. it c an d o d uty

a s a t ru e o f fr o ad e r . Itis ju st a bo u t as w i d e

a s a Ma h i n d r a S co rpio bu t a bo ut 10 emsho r t e r . W h at is in te re stin g is th at th e

E ur o pe an ve rsio n , a t 1,180-

1,280 kg u n l a d e n , weighs

a bo u t h all ' a s m uch as th e S c o rpio an d is

a t le a st 300 k g l ig h te r than comparable

mo d e l s In general

T h e engine options are tw o d i e s e l 1.6-

l it re d Cl u nits pro du cin g 8 5bh p (a ve ra ge

f u e l e f f ic t e n c y: a bo ut 2 0k m pl ) a n d 109

bhp , Given th e D uste r's lig ht we igh t ,

R e na ult c ou ld a lso u se the 1 .S - lit re d e [

d ie se l m appe d to pro du ce m o re po w er .T h e-S ou th A m e r ic an ve rsio n w a s sh ow n/

•••••••••••••••••••••••••••

K . RAJARAAJAN , email

IIhave been bowiled over by the Honda

Civic s in c e its la u nc h . Now I w an t to

change my five-yealr-old Honda City

ZX which has done 58,000 km, but

is in perfectcondition.lwas of the

notion that the next-gen Civic is due

next yealr, but a salesperson told me

that oinly Briio is due and Civic willi

come much later. My queries are: (a)

How much would IIbe able to, get for

my C:ity if I sellliit now? (Ib) Woul'd it

be better to giive it to a deall!er under

e xc ha n,g :e , o r s hou ld I s ell it to a third-

party? (c) As IIam not impressed wi;th

th e p ro je c te d im age s o f th e ne x t-ge n

Civic and I'd be reta1ining the new car

fo r s ix y ea rs a tllly w.a y , sh ou ld I b uy th e

current Civic, wait for the next-qen

one' or co:nsider the Toyota Corolla

.Altis and the Skoda Laura instead?

~ (a ) Th e p ric e y ou c an ge t w ill d e p e nd

on w h ic h ve rs ion o f th e Z X you h ave and

w he re you live Broad ly , you s h ou ld b e

ab le to ge t 55-60 p e r c e n t o f th e p u r-

c ha se p ric e. (b ) S ellin g to re lia ble th ird

p artie s (k ee p a s elf-a tte ste d c op y o f th e ir

p ho to IDs ) is b ette r a s th e d ea le r w ill

m ake m one y w h e n h e re s e lls y ou r c a r

and w ill g ive y ou th a t m uc h le ss . (c ) It is

""'" ."t.OUTLOOK M O N E Y .10 AUGUST 2011 • wwwoutlookrnonevcorn,~" wornr~gs

ne ve r p o ss ib le to b u y th e 'b e s t e ve r' c a r

a nd it is c ru cia l th at you a re s atis f ie d w ith

y ou r ca r any wh ere in th e p ric e s pe ctrum .So , if y ou re ally like th e c urre nt C ivic and

d o no t like w h a t th e c h ange in looks

w ill d o to itgo fo r th e c u rre n t m od e l. It

s h ou ld h old up w ell fo r s ix y e a rs g ive n

th e w a y y ou h ave ke p t y ou r C ity Z X.

Senel in your queries to

a'[email protected]



IJobs & Careers IEnterprise IBanking ITaxation I Insurance IInvesting IRealEstate IFinancial Planning'l'lipside I

w ith a 2.0 m o nik er stu ck o n th e b a c k,

a n d w o u l d Ukd y c o m e with a 2- l : i t re d e l

e n gin e p ro d u cin g 130-140 h p o f po w er ,

o r a b igge r pe tro l g ive n th e po pu la rity o f10 pe r c e nt e th an ol p e t ro l in t ha t r eg io n .

W e are n ot expe c t in g th e pe tro l ve rsio ns

to m ak e it to I nd ta , Cons i d e r i ng th e se g-

m en t m w hlc h it is p l aying ., t h e pr i c ing

sh ou ld b e c om p a ra b le to th at o f th e

M a h in d ra S co rp io a nd th e T o yo ta In no va ,

Th i s is su re ly o n e SUV to w atc h o u t fo r .

R e na ul t is s ho o t in g fo r O cto be r 2 012 to

la un ch th e Du ste r.

NEW FO ' RD FIESTA

I F o rd I n d i a h as la un c he d th e n ewFie sta . c od en am e dB 299 . w h ic h it

p r e vie w ed a f e w m o n t h s a g o . The c ar , th e

f ir s t o f e ig h t c ar s th at th e c om p an y pla ns

to ro ll o u t in l n d i a by 2 0 1 5 , h a s been

la un ch ed w ith a pe tro l a nd a d ie se l e n gin e

a n d fo ur le ve ls o f tr im fo r e ac h : S ty le ,

T re nd . T ita niu m an d T ita niu m + . B o th th e

engines a re l.S -H t re units. The prices (al l

e x sh ow r o om . D elh i) f o r th e pe tr o l ve r-

s ions a re ,{8 .2 4 Ia kh , 'f 8 .7 7 la kh , ~ 9.1 7

la k h a nd '{9 . 4 2 la k h. T h ose fo r th e d ie se l

a r e ~ 9.2 7Ia k h , ~ 9 ..77lakh, f10.J 7 1 a k ha n d nO .4 2 1a k h . T he pe tro l is a n e w 1 .5 -

l it re T iV C T e n gin e th a t p ro d u ce s 106 bh p

a n d h as an ARA[ - c e r t i f i e d f u e l c o n s ump -

tio n o f ] 7 krnp l . T h e 1 .5 -l it r e d ie se l u se s

th e c om p an y's D ura to rq te ch no lo gy a nd

produces 90 bhp at its peak and delivered

2 3 .5 km pl in th e A R Al test. A l l t h e

va r i an ts a re equ i pped with an t i - l ock :

b ra k es a n d e le c tr on ic b ra k e d istr ib u tio n .

pro ba bly a 1~ L'sto r a ny c ar in this price

range, as w e ll a s a u dio c o n tro ls o n th e

steering w h e e l N ow , th e P ie sta se em s

po ise d to r e pe at th e su cc ess o f th e F lgo

in this s e gme n t . 0

A .BH I I IJ I T M I T RA

B Y AB HIJIT M IIT RA

Just this week Mercedes Benz

made the headlines saying, as it

was put, it would sell its cars at

50 per cent of their price. That did

grab attention ..But is there anything!

to it ? The answer is no and yes,

No, because no such thing as a carfor half its price is not possible with

the kind of competition there is in

the car market in any segment a nd ,

consequently, the margins com-

panies operate on, What .,...~~ ...-_ . . . .Mere is actually saying

is that it will charg.e

only the depre-

ciation in market

value a luxury car

typically expe r t -

ences over threeyears and other

costs, such as insur-

ance, maintenance

and cost of financing,

and take the car back at

the end of the period. No head-

ache for the buyer. So, overall, the

deal is unlikely to be much cheaper,

although it will be more hassle-free...

That brings us to the 'yes' bit. In

India, car leasing companies, such

as LeasePlan,have been taking cor-porate clients only for a while now.

Mercedes ismaking the option availl-

able to individuals for the first time.

It should particularly benefit self-

employed persons, who will be ab l e

to charge the entire leasing in cost

to expenses along with fuel wh i l e so

far they could only charge depre-

ciation at 15per cent of the written

down value of a car, plus expenses

and running costs. That, given the

difference, could be more realistic

accounting for this segment of cars.

Besides, the total cost of ownership

will be known with greater certainty.

The Me:rcedes-BMW-Audi seglment

is a sliver ot the total car sales vol-

umes, So, can leasing catch on for

less expensive cars that make up

about 80 per cent of the car market

by volume? While it could be goodfor a buyer. that chance looks s l im,

First, market value falls slower at the

lower end as demand for used cars is

higher in this segment, where,

unlike for luxury cars,

utility gains the upper

hand compared to

the statement a

car makes. Here,

usual ly, cars fa I I Ito

half their market

value in about fiveyears, compared

to three or so in

the l u x u r y segment.

So, to work out the 50

per cent d e a l , the lease

will have to be longer, which

will reduce the certainty wi,th which

a residual value can be estimated.

Tracking maintenance wIll be

difficult too as many owners avoid

services altthe more expensive

authorised centres.The solution could be mileage-

linked and lie in microprocessors

that cars today come with. They

can track allmost everything that a

car underg:oes. That data is difficult,

allthough not impossible, to tamper

with as very few will have the expe r -

tise or the expensive equipment

(often needinq proprietary software)

to do it. And that could just make it

feasible. The leasinq option is avail-

able to car buyers in countries llke

the u s . .Maybe Mere has showed theway in lndia.

< ~worldl'\ag~= hllp:!llwiller.com/OutlookMQney; hllp:llwww.faceoook.com/oimindia

http://drgital.outlookmoney.com.1D AUGUST zo u • OUTLOOK MO:NE:f 63

http://drgital.outlookmoney.com.1id/





I Leisure36,0 II

I J ob s & Careers I Enterprise IBanking ITal(ation IlnSlJIrance I Investing IReal Estate IFinancial Planning I I F l l l p s lde l1

Up next I:lHow to Buy.: Tabl'et pes pg66

BETTINOONTHESTORM

The easiest way tounderstand the sub-prime crisis and the

global meltdown

L e w is w r o te h is b e st se ll er , L ia r ' s P o k e r ,

a bo u t bo nd tr a d e r s o n W a ll S tre e t a n d a

m a rk e t th a t w as c r e a te d in th e 198 05

a lm o st so le ly b y th e n o w -n o -m o re

S alo m on B ro th ers , w h ere h e h ad d on e as ho r t s tin t H e t r a c es th e lin ea ge o f m a ny

o f th e k ey pla ye rs in t he l at est su b -p rim e

c ris is t o t he Salomon o f th at e r a . H e a lso

tr a c es ba c k th e c re atio n o f th e c risis to

th e tarn o f th e m il le nn iu m . w h en the

firs t c o m pa nie s e n ga ge d so le ly

in su b-p rim e le n din g w e n t b el ly-u p.

O n e w o u ld h a ve th o ugh t th a t w ou ld

h ave h it th e n ails in to th e c off in o f sub -

ty to re pa y th em . Eve n to da y, a ve ra ge pe r- p r im e le nd in g . bu t th at w a s n o t to b e -it

so n s, m o st o f w hom w ere a f f e c te d in o n e re tu rn e d w ith f a r g re a te r vo lum e , c om -

p le xity a nd o pa city in th e e ar ly ye ars o fth e 2 000s, a n d a fo r c e e n o u gh to sw ee p

u p th e w ho 's w ho o f Wa l l S tre e t. W h a t

m a k e s T he B ig S ho rt a p ag e-

t u r n e r , h ow e ve r; is its c ast o f

c h ara cte rs , e sp ec ia lly th e le ad s,

T h e y a re a h an dfu l o f pe opleit a pa,geturner w ho c h ose to b e t th eir m o neyis its cast of a ga in st t he sentiment o f the

e ntir e f in an c ia l m a rk e t a nd

stu c k ste ad fa st ly b y th e ir b elie f

t h a t this w as a bu bb le th at w a s

be in g b lo w n u p an d w as su re

to b urst so on er th an la te r.

I t c o uld n ot h ave b e e n (I.m o r e

d is pa ra te b u n ch ..S t ev e E ism a n

h ad be en in du cte d in to Wa l l

S tre et c ou rte sy th e go o d o ff ic es

o f h is pa re n ts a n d h a d so m e -

h o w be e n h a n d e d th e ro le o f

t is c lo se o n th re e ye ars a fte r th e

g lo ba l e c on o m ic c risis , th e b ig ge st

sin ce th e G re at D epre ssio n a bo ut 80

ye ar s a go . I t w as bro ugh t abo u t by

t he r ef in a n cin g . r ep ac k a gin g and r ese l l -

in g by W a ll S tr ee t f in an c ia l c om p an ie s o f

l o a n s to US b or ro w e rs w h o h ad lit t le a bil i-

w a y o r a n o th er by it , h ave n o t qu iteu n de rsto o d w hy o r h o w it w as d o n e. M o st

e xp la n atio n s ta lk a bo u t a b st ru se f in a n cia l

d e riva tive in str um e n ts th a t

w e n t by n am e s such a s CDO

( c o ll at e ra l is e d d e b t o b lig a tio n ) ,

CDS ( cr ed it d e fa u lt s w a ps ),

ARM (a d ju sta ble ra te m o r t-

ga ge ) a n d so o n . T ha t is n o t

e n tir e ly su rpr isin g. M u c h o f

th e lite ra tu re c re ate d a bo ut it

h as be e n by pe o ple w h o a re

f am ilia r w ith a nd c an c om p re -h e n d s u c h c o m p lic a te d p ro d -

u c t s and, lo r th at r e aso n a lo ne ,

f in d it d if fic u lt t o b rin g it c l o w n

to th e le ve l o f th e la ym a n .

A nd th at is e xa ctly w h y

M i ch a el L e w is' T he B ig S ho rt is

a n e xc ep tio n a n d, p ossib ly. th e

be st b e t th at a n yo ne w h o is n ot f a c e bo ok

f rie n ds w i th c o m p le x f in an c ia l p ro d u cts

h as to u nd ersta n din g w h at th e pro blem

w a s a ll a b ou t. I f a nyth in g, it g ive s a

w o rm 's e ye vie w o f th e c risis a n d

e xpla in s, a t le ast to th e e xte nt r e le va n t fo r

its u nd ersta nd m g , its ge ne sis . In 1 98 9.

IN BRIEF

• What makes

characters,

who chose to

bet their

money against

the sentimentsof the entire

market in the

belief that the

bubb l e would

burst soon

a na lysin g th e su b-pr im e le nd ers th at

f a ile d a t th e tu rn o f th e m il le nn iu m . D r

M i ke B u rry , a s h e c al le d h im s elf . h ad

tr a in ed in m e dic in e a nd w a s w o rk in g in a

h o sp ita l b efo re h e g ot in tr ig ue d by a n d

sta rte d pic k in g sto ck s. to th e e xte nt th at

b ig-tim e in ve sto rs sta rte d m a k in g m o n ey

T'HEBIG SHORT:ATRUESTORYAuthor Michael Lewis

Publisher Pengu i n

Pages: 270 Price: esss

o f f th e pic k s th a t h e w ro te a bo u t in h isb l og : it e arn ed h im so m e k in d o f r e c ogn r-

tion, T h ere w e re C ha rl ie Led ley , [amieMai

a n d B en Hocke t t . w h o to ge th er se t u p

w ha t, in th e e ye s o f th e b ig m o n ey mov -

ers . was a ga rag e ba n d h ed ge fu nd .

Final ly. t h e r e w as Deu t s ch e B a n k bo n d

sa le sm a n G re g L ippm a n, w h o hit u po n a

p ro du c t th at h e th o ugh t w as a w i n n e r

h an ds d ow n . A ll o f th em figu re d o ut th at

th e bi g r at in g a ge n c ie s, Moody ' s a n d

S t a n d a r d & P o o r's , h ad be e n gam e d by

th e sa vvy su its o f th e f in an cia l m a rk et

a nd th er e w as m o r e risk f lo a tin g a ro u n d

than th e m a rk e t e ve n d re am t o f in its

w o rst n igh tm a re s, T h ro ugh th eir e ye s h e

e xp la in s in a w ay th at o rd in ary pe ople

c a n u nd ersta n d th e w o rk in g o f a system ,

w a rts a nd a l l , th at c re ate d th e c risis th at

th re ate ne d to sin k th e w o rld e co no m y,

(T h is ~ e v iewc om e s J ar l at er than it should

i d ' e a l l y h a v e . ~ e t, t o n o t wri te .i t \ .I I o u ld b e t o

f ail t o p o in t a lIt £0 those w l 1 0 h av e m i ss ed

tlus b o o k a t r .t dy i L l c i d e x p l a n a t i o l l o f tv hy

the c old the U S c au ght has tlte e ntir e \V or ld

s n e e z i n g . 0111 ' a p o l o g i e s . ) ' 0

ABHIJIIT MITRA

"...... A.lIl..OUTlOOK MONEY .10 AUGUST2011•.www.outlookmoney.com,~" worMM'fgs

~ http://l.witler.CDm/OutIOQkMoney; http://www.lacebook.com/o!m.ndia


http://www.lacebook.com/o!m.ndia

http://www.lacebook.com/o!m.ndia




ASLIMMERAN D N IM B LERCOMPUTERUnve,iling the la test a dd ictio n in the w o rld

o f techno logy-tab le ts

< ~wo8GgoUTLOOK MONEY -10 AUGUSli 2011 • wwwoutlookmoreycom

POPULAR M ODELS ,In the Iindian market, Apple's iPad,

Bla ckBe r r y PlayBook, Moto:rola Xoom,

S am s un g G a l'a xy Ta b 1 0.1 v a nd O live 's

O live Pa d V ~T1 00 a re th e m os t p op ula r

ones. Delli Strealk, Motorola Mil lestone andSamsung's Galaxy Tab are the ones in the

tabl!et phone category. iPad is the

frontrunner in the tablet market.



I Jobs & Careers I Enterprise' Banking' Taxation Iinsuratlce 'Investing' RealEstate' Financial Planning I FUp s l d e l

Up next Cl ForWhaUt's Worth pg 68

~]II:I)~ ~ T a ble ts a re expected to grow 157percent in20n, w ith o ve r2 6.5 m illio n units being sh ip p ed w o r ld w id e

WHY A TABLET?

PORTAB~ILlTY: T ab le ts a re

e xtre me ly lig h t a n d sm all c om -

p a re d to a n e t b o o k or 8 11 l ap top .

W h ile B la ck Be rry IP la yB oo k h as

a 7 -in c h LCD s c re e n a nd iP a d 2

c om es w ith a 9 .7 -in c h s c re en , b oth

w eigh le s s th an 450 g. Cle arly , p eop le w ho

a re a llw ay s on th e m ove w illi f ind th em h and y.

APPLICATIONS: Whe th e r it is

a n iP ad o r a P la yBook , a pp lic a-

t ion s (a p ps ) a re w ha t m ake s a

ta b le t w ha t it is . Th e se app s

h e lp y ou c u s tom is e th e ta b le t toy ou r ne e d s and lik ing . A n ap p is a

p ie c e o f s o ftw are d es igne d to s u it a s p ec if ic

re qu ire m en t, s uc h a s IC IC I B an k's iM o b ile .

Say s V ad lam an i: " iP ad h as 1 00,000 a p p s to

its n am e . H ow e ve r, a s im ila r n um b er is n't

a va ila blle fo r A nd ro id ta b le ts . If y ou a re a

m us ic ia n , y ou w ou ld like to h ave m u sic -

foc us se d a pp s. S im ila rlly , if y ou a re a p ain te r,

p a in tin g ap p s is w ha t y ou s h ou ld b e look in g

a t." You c a n d ow nloa d a p p s fo r iP ad from

A pp le A pp S to re , fo r P la yBook from

Bla c kBe rry A pp W orld a n d fo r A nd ro id

Ta b le ts s u c h a s De ll S tre a k o r A ce r le on iaTa b A 500 from A nd ro id M a rke t. Wh ile s om e

o f th em a re fre e , o th e rs c om e a t a p ric e .

MULTITASKING: W an t to

w a tc h a W im ble d on c lip on

You Tu be , b ut h ave a p re se nta -

t ion to w ork on? Don 't w orry , .

w ith a ta b le t y ou c a n b e a t m an y

p la c e s. a t th e s am e tim e, th an ks to

its m u ltita sk in g a bilitie s. In P la yBo ok y ou c an

run m ultip le ta s ks in re al tim e w ith ou t c o rn -

p rom is ing on y ou r d ea d lin e s. W ith De ll

S tre ak , y ou c an p !la y vou r fa vou rite gam es as

w ell a s re ce ive c a lls a t th e s am e tim e .

SOUND &VIDEO QUALITY:

On a ta b le t PC , y ou c a n w a tc h

h igh -d efin it ion (H D) vid eos a nd

p la y m us ic on s te re o s pe ake rs .

H ig h-re so lu tion s cre en s g live y ou

a b e tte r vie win g e xp e rie nc e . E ve n

th e c am era qu a lity is good , u s u a lly

a t 8 m egap ixe lls . Som e tab le ts c om e w ith

tw o c am era s , on e fron t-fa c in q a nd th e

o t h e r rear-facinq, a s in th e c a s e o fB la c kB e rr y P la y Bo ok .

< ~worldl'\ag~

Go

fora tabletwith an SOormicro SD slot,so that you canincrease thememory

CONNECTIVITY: Tab le ts c om e w ith W i-F i, 3G and Blu e too th c on -

n ec tivity o p tio n s. A s n ot m an y p la ce s in In dia a re W i-F il-e na bl'e d, it is

b e tte r n o t to p u rc h a s e a ta b le t w ith on ly th is o p tion , e ve n th ou gh it

is c he ap er ..A 3G c onn ec tio n p ilu s a W i-F i w illi h elp y ou s ta y c onn ec t-

e d b e tte r, b u t a 3G p lan c an le a ve a h uge d e n t in y ou r p oc ke t Be fo re

c h oos in g a d a ta p la n , c h e c k its ne tw ork in y ou r a re a . You c a n c on -

n ec t y ou r P la yBook to y ou r B la c kBe rry p hon e via B la ck ls erry

Brid ge (Blu e too th te ch no log y ) an d y ou c an th en ac ce s s y ou r

B la ck Be rry p h on e apps, s u c h a s e ma il, BBM and c a le nd a r

o n y ou r P la yB ook .

OPEIRATING SYSTEM (OS): F in d ou t a b ou t th e ve r-

s io n th a t's b ee n u s e d as th e d e vic e 's e ffic ie nc y is p re tty

m uc h d ete rm in e d b y th e OS it is b a s e d on . B I1 ac !kBe rry 's

P la yBook run s on Q NX N eu tr iin o , w hic h is s up pos e dly a ls o

u s e d b y N ASA fo r s p a c e cra fts . M o to ro la X oom u s e s A nd ro id

3 .1 , a ls o know n a s Hone y c om b, w hic h is s up e rio r to A nd ro id 2 .2

(F ra yo ) u se d in O live 's O live P ad V -T1 00.

STORAGE: Ta ble ts w ith va ry in g s to ra ge c ap ac ity a re a va ila ble , h om

1 6G 8 to 64 G 8. Ha vin g a ta b le t w ith a n SO o r a m ic ro SD s lo t is a

sm art o p tion -it g ive s y ou m o re s p a c e b y a d d in g a m em ory c a rd .

SCREEN: Ta b le ts trum p sm artp hone s w ith th eir b ig s c re e ns .

Wo rk ing on a b igge r s c re e n is d e fin ite ly b e tte r th an th a t on a 3-in c h

s p a c e . A ls o , w atc h in g vid e o s o r p la y in g gam es on a b igge r s c re e n is

ra th e r e xc it ing . "Th e s c re e n s ize o f a ta b le t h a s b e c om e m ore o f a

p ers ona l c h o ic e . Th e re a re p eop le w ho like th e 7 ·in c h s c re en s ize

a nd th e re a re th o s e w ho lik e th e to -tnc h s ize ;' s a y s V ad la rn an l.

Ta b le t m a ke rs m ay go on a nd on a b ou t h ow it c an d o a ll th a t y ou r

c om pu te r d oe s , b u t tru th is , it s till c anno t b e a re p la c em en t Ta b le ts

a re g re a t fo r d o ing ligh t ta s ks s u c h a s re a d in g a b ook , b row sing th e

We b a nd ne tw ork ing on s oc ia I Im ed ia s ite s . Bu t w he n it c om es to

h eavie r ta s ks , s u c h a s w ritin g l a ! s c r ip t o r a p rog ram m ing c od e,

la ptop s a nd c om pu te rs a re a lm os t irre pla ce ab le ,phej,[email protected]

I: J h t t p : / / tw i t t e r . c om!Ou t l o okMoney ; h t t p : / / www fa c ebook . c om / o lm i nd i a

httplldigitaLoutlookmoncy.com .10 AUGUST2011. OUTLOOKM:ONEy.7

mailto:phej,[email protected]

http://wwwfacebook.com/olmindia

http://wwwfacebook.com/olmindia

mailto:phej,[email protected]



I Jobs & Careers I Enterprise IBanking ITal(ation IlnSlJIrance I Investing IReal Estate I Financial Planning IIFllpsldel1

I For What It's Worth

I ForWhal II'lsWorth I

SUMANA MUI<HERJEE

The E ternal Debate

Though Indians today are far more comfortable talking about money,

the salary versus satisfaction question can't be put to rest just yet

I H A ' T E m y job." a fr:iend sighed, "but I IO~,ethe pay..l1 .. . cheque at the end of every month: Her dec-

laration, at an informal evening get together; fen tnto one of those

awkward moments of complete silence. when even the kids had

sorted out their squabble over the toy dinosaurs. Then, suddenly,

everyone started talking again, a bit desperately, like a celebrity tug-

ging up a gown to avoid a wardrobe malfunction on the red carpet.

In an earlier column, I had I IA RUN VASH I SHTHA

made the observation that

latter, claiming that the money V l T ilL [ 0 1 1 0 1 ,\ 7 when weenjoy the work we do, So any statement to ' the con-

trary is either disputed, or condemned outright, or

simply smothered in silence. As my friend's was,

But I believe her spontaneous statement applie to

us more them we care to admit; It is less true, I think.

as we embark on our careers as 20-somethings,

when the stars inour eyes cloud our vision, but, as

we mch towards middle-age, experience and exper-

tise contribute to a cynicism that often prompts us

to prtorttise money over anything else, 1t doesn't

help, of course, that middle-aged Indians today have

no working template that wi l l help them in theirdecision: we are the first generation to actually have

the privilege of jumping jobs instead of retiring from

the establishment we jotned as freshets.

Like my friend, for instance, who moved from all

average-pay job she liked to a very high-paying

one. She prefers to go with money over satisfaction

because hers is the steady salary in their double-

income, two kids unit. You can still hear the grati-

tude in her voice when she recounts how the money

came in handy a few yeers ago when her newborn

child needed extended super-expensive care in one of the country's

top hospitals. On the other hand, it's also irrefutable that people do

tend to perform better at work they like than work they don't like

-and that usually reflects in commensurate pay.

But how much money is enough? The Americans have it mapped

to the dollar: em annual sum of $75,000, a 2010 study suggested,

was the "magic number when itcomes to income and happiness",

according to The N ew Y lH 'k T im es, beyond which "money does

nothing for happmess, enjoyment, sadness or stress."

What's your magic figure? It's a number each of us has to arrive

at for himself or herself. ProIDI childhood upbringlng to personal

circumstances and from value systems to spending habits, many

factors 'wi l l go to influence the call, But it's yet another aspect of

our financlal lrves that CaJ.1 be eased by awareness. ri

Indians today are I a r morecomfortable talking about

money than they have ever

been in their history. Byand large, the products of a

'poor society, an older; pre-

llberallsation generation

considered it infra dig to

discuss incomes and expen-

ditures. Thrift was part of

th.e Indian DNA: everyone

cut costs fur the day and

saved for the future. The past 20 years has seen a

gradual but dramatic shift in that attitude.

As salaries grew and prosperity inflated middle-

class wallets, price tags became the dilferentiator;

The most visible example of this was=ts=newspa-

per ads: coy pictures of products have given way to

screaming figures, giving consumers an achievable

goal ("if I have ~XXX. I can own this!"). Money has

shed its taboo image and occupied ucself-conscious

centrestage in drawing room conversations; now

you'd be hard-pressed to ' walk into a party and not

discuss EMIs/property prices/education loans/travel

deals/whathaveyou,

Notwithstanding the high pedestal we n0'W accord

to personal wealth. though. we still draw the line

at acknowledging that money makes OUl' world go

round. In any salary versus satisfaction argument.

for instance. most of us wi l l virtuously plumb for the feedback@outl'ookmoney.com

"".. .. AA.,OU1LOOK MONEY. 10 AUGUST 2011 • www.outlookmoney.com,~" wornr~gs

~ http://t.witler.CDm/OutIOQkMoney;hltp:/IwwwJacebook.com/o!m·ndia





I Fortnight Figures I

PROPERTY PRI'CES: MANIGAL,ORE,&VADODARA

location I'Bed rooms A rea (sq It) I Rate ( {/ sq tt) I Pr ice (~ Iakh)MANOAI~ORE

Under~2SlAKH

l Iajpe 2 ' ,000 2 , 200 22 .00

Konaje 2 _1 ,000 1 ,8 00 18 .00Konaja 3 ',300 1 ,8 00 2 3.4 0

'{25lAK,H TO f30 LAKH

,Ashoknagar 2 1,15 0 2 ,5 5 0 2 9 .33

Attavar 2 ' ,100 2 ,700 2 9 .7 0

Bajpe 3 ~300 2 , ,200 28 .60

Bikarnakalta ' ,100 2 ,400 2 6.4 0

Detebai l 1,05 0 2 ,400 25 .20

Kavoor 1,100 2 ,400 2 6.4 0

Konchad:y 1 ,050 2 , 500 26.25

Kulasekhar 2 1,100 2 ,500 2 7 .5 0

KuttarJunction 2 1 ,150 ~200 25 .30Ku tt ar J u n c t lo n 3 1,35 0 2 ,200 2 9 .7 0

Pad!1 2 1,15 0 2 ,500 ' 2 8 .7 5

Urva 2 1,100 2 ,600 2 8 .60

~30 lAKH TO ~35LAKH

Bejai 2 1,15 0 34 .5 0

3 31.2 0

3 31.20

2 33.00

l iampanl<aUa 33.35

J y ot hi C irc le 30.80

Kadr i 2 1 ,150 2 ,900 , 33.35Kavoar 3 1,35 0 2 ,400 32 .40

Kulasekhal 3 1,35 0 2 ,500 33.7 5

MalylHil i 2 1,200 2 ,600 31.2 0

Padi l 3 1,300 2 ,500 32 .5 0

Shaktinagar 2 1,200 2 ,600 31.2 0

Loca tion Bedroomsl A rea (sq tt) Rate ({ IS!! tt) Pr ice ( {I akh)

KS R ao R oa d 2 11,24 0 3, ,000 37 .20

Kauri 3 11,35 0 2 ,900 39.,15

Kankanady 2 11,24 0 2 ,900 35 .96-

Kodialbail 2 11 ,250 _~3,000 37 . ,50-Kodialguthu 2 11 ,250 3,000 37 .50

Kol ta ta Ch owk :i 3 11,35 0 2 ,600 35.,10

Lalbaug 2 11 , ,200 3,000 36.00

MG i IRoad 2 11 ,200 a , O I l O 36.00

M ary Hill 3 11 ,400 2 ,600 36.40

Shaktin3g3t1-

3 11,35 0 2 ,600 35 .10

Urva 3 11,35 11 2 ,600 35 .10_Va.lencl ia 2 11,25 0 3,000 37 ..5 0

,-'-- '-

3 11 ,450 3,000 4 3.50

3 11,45 0 3,000 4 3 ..5 0Fail l ir 3 11 ,500 3,000 4 5 .00

Gandh i I Na ga r 3 11 ,450 3,000 43. ,50

KS R ao R oa d 3 11 ,450 3,000 4 3.50

Kankanady 3 11 , ,400 2 , ,900 40 ..60

Kodiallbail 3 11 , ,500 3,000 4 5 .00

KOdialguthu 3 11SOil 3, ,01l0 45 ..00

Lalbaug 3 11,500 3.,000 45 ,00

MG, IRoad 3 1' ,501l 45 ..00

Valencia 3 11 ,450 43.50

VADODARA

"'{50 LAKH TO 't'55 lAKHAkota 3 11,500 3,5 00 52 .50

Galri 3 1:,600 3,2 110 5 11 .2 0

K are li Ba ug 3 11,}00 3,05 0 5 l.8 5

Ne w Alkapur i 3 .2 ,025 2 ,5 00 5 tl.63

Nizampura 3 11,72 5 3,100 5 3..4 8

~35LAKHTOf40 lAKH

.Ashoknagar 3 1,400 2 ,5 5 0 35 .7 0

Attuvut 3 1,300 2 ,700 35 .10

8a' lamaUa 2 1,25 0 3,000 37 .5 0

Falnit 2 1,200 3,000 36.00

iHampanl<atla3

1,300 2 ,90037 .70

J y ot hi C irc le 8 1,35 0 2 ,800 37 .8 0--

< ~worldl'lag~



I Forlnigllht Figures I

HOME LOANS

A li alJ a b ad B an k

A x is B a n I<

B a n k o f B a r o d a

B a n k of I n d i a

B a n k o f Maha r ash t ra

C a n ar a B a n k

Oen tF a l Ba nk o f I 'n dia

Cor po ra ti on B an k

Federal lBank

H I l F t

I C IG I B a nk

BANK FIIXEDDEPOSITS I D B I B a n k

I nd ia n Ove rs e as . B a n k

A U a h a l l a d i l B a n k

A n d l n a B a n ' k

A _ x i s B a n k

B an k o f I Ba ro da

Gi l i ibank

C o r p or a ti o n B a n k

D e n a B an k

Deutsche B a n k

D e v . C r e d i t B a n k

F e d er al B an k

H I l F C B a n k

I G I G l B a l i k

I D B I B a n k

I n d i a n B a n k

9 1 2 5 9 .2 5 9 . 2 5

9 ' , 2 5 g " O O 9 , 0 0

9 ' ,2 5 9 .2 5 9 .0 0

8 , 7 5 8 , 7 5 8.75

9.00 9.00

S D u th I n d ia n B a n k

S t a n d a rd C h a rt e r e d I-:......;:_-l-~

Slate B a n k o f I nd ia

S y n d ic a te Bank

U C O Ban'k

Union I B a n k of

9 ',5 5 , 9 ,5 0

9',.25 9',00

9 ', 2 5 , 9 1 , 2 5

9,50 9.50

g , O O 9.00

9 , , 2 5 8.S-9A()

I n te re s l r a t e s i n p e r o e n t p e r a n n u m , . o n ly lo r d e po s ils o f l e s s I h a n

~ 1 5 Ia k h . I n te re s l r a le s a s o n 1 9 J ' u l y 2 ( ) 1 1 : a B C : O r ie n t a l : B a n k o f

C o m m e r c e : P N B : P u n j a b N a t i o n al B a n k : I lN P : I l o n o t p ro v id e

8.00

8 . 5 0

8.50

8 . 7 5

Jammu & Kas hm ir Bank

Lie Hou s in g F in a nc e *

Oriental B a n k o f C n m m e r c e

P u n ja b N a t i o n a l B a n k

BANK FDs HOME LOANS INSURANCE

D N P 1 , 0 3 2

','37 ' , 1 1 8 9 1 , 0 4 9

1 , 1 1 9 D N P 1 , 0 1 3

1 , 0 9 0 1 ,1 1 0 1 9 8 2

1 , 1 0 5 1 ,3 9 1 9 9 8

1 , 1 2 1 1 , 1 1 5 4 1 , 0 1 5

1 , 0 1 5

1 , 0 6 6

1 , 2 0 7

97 5

1 , 0 4 9

1 , 0 3 2

9 9 8

1 , 1 0 1

1 , 0 6 6

1 , 0 4 9

S ta te B a n I< o f I n d ia

S y n d ic a t e B a n k

U C O B a n k

U n io n B a n k 0 1 I n d ia

1 ,3 3 5 1 ,2 0 0

1 , 3 4 9 1 , 4 6 9

1 , 3 6 3

D N P : D o n o r p lo v id e ·O l le rs s pe c ia l r a l e s F ig u r es a re in '{ a nd EM I : s p e r '{ 1 l a kh S o u l c e : A p n a p a i s a A e s e a r c h B u r e a u

"".... ~nOUTILOOK MONEY. 10 .AUGUST 2011• wwwoutlookmonevcorn\I~wol1'd~g,

LIFE IN5URANC;ELo we s t te rm in su ra nc e c ove r p re m iu ms in ~ fo r th e c liffe r,e nt s um a ss ure d fro m a ge 28 to 48.The po lle y te rm is 60 m i n u s your ag e

A e g a n R e l ig a r e I C I G I P r u , Mdl i ! ! I C I C I P r u . I C I G I P r u , I C I C I P r u .

5 260 6,5 34 11 ,8 5 0 10 . 4 5 4 n , 7 6 1 12 '068

A s g o n R s li g a re H O F C S t a n d a rd I~ G V y s " [ C IC I P r u . IC IO IP I lJ . IC IC IP r u . IC IC IP r u .

6280 1,0501])1 11650 11]),880 12434 113,9891 14543

B i rl a . S u n W e IN G V ' ~ 1 ' 3 IG IC IP IU . IC IC I P IU . IC IC I P r u . I C I C I P r u , I C I C I P r u .

10000 111396, 11360 13 ,202 15 . 108 8 1 1 6, 97 4 1 7 ,8 6 0

A V IV A IC IC I P m

7380 10173 11152 5 13830 20.745 22216

K ala k M a hin dr a A e ga n R e l ig a re K ola l: M a h n dr a K ala l< ~ .la h in d la K ala k M a hn dr a K ota M a hin dr a K ala k M a liin dr a IC IC I P r u.

10 ,365 11 900 14 2 2 5 1 7 ,iJ7 0 19 1,915 2 2 7 60 2 5 .60 5 , 2 7 8 09

H o w t o r e a d t h e t a b le : F o r e x a m p le , i f a 2 8 - y ea r- o ld : w a n t s a c ov er o f ~ 1 0 la k ~ , t h e lo w es t p re m iu m a v a il a b le i s ~ 2 ,9 7 1 p e r y e a r

o f f e r e d b y M a x . N e w Y o r k , A il l in su re rs e xc e pl L l C , T a l a A IG , lO B I F o rlis , F u tu re G en er a li a nd C an ar a IH SB C ~ av e b ee n c o ns id er e d ,

O n l i n e t s r r n p la n h a ve lo w e r p re m iu m I h a n a b o v e . M i n , p re m iu m I I i I l i e s

CRUDEOIIL

,J u l 20 IO IT h e l ig u re s a re in '1,. a nd a re y ea r- o n- y ea r c ha ng e in m o nt h ly W P I

S o u r c e ; W ' I o w . c a i n d u s l r y , n i c , in

,5 J u l 11

O P E C daily b a s k e t p r i c s ( $ / b , l I f S ' I )

19Jul,1

S o o r c e ; I V ' I M . o p o o . o r g

O ' "p l > lc s ; SA J I C . S .



STOCKS CURRE.NCY COMMODITI ES

I I.

-

S t e r l i n g H o lid a y R e s o r t s 1 2 2 . 9 0 6 3 , 8 7 C r o m p to n G r ,e a v e s 2 0 7 . 6 5 - 1 9 . 9 8

S K S M i c r o li l l la n c e 5 3 9 . 9 5 5 7 , 5 3 K i lN I n d u s tr ie s 5 5 . 9 0 - 1 5 . 8 1

A p t e c h 1 3 2 , 4 0 3 7 . 7 0 I 'n d i a S e c l l ri t i' e s 4 4 . 5 0 - 1 4 . 5 1, --

9e l l r c n & S t e e l 5 4 . 6 0 3 6 , 5 0 G IL 8 1 . 1 0 - 1 4 . 3 6

! H e r c u le s H o i s t s 3 2 7 , 8 0 3 1 , 5 4 S h r i r a m E P e 1 4 2 . 6 5 - 1 2 . 4 0,

A M 2 3 2 . 3 5 2 5 , 6 6 O n m o b H e G lo b a l 9 9 . 0 5 - 1 0 . 8 11

5Jaln

A n a n l R a j j I in d s 8 5 . 6 5 25,22 I ) h a n la x m i B a n k 1 0 6 . 3 5 - 1 0 . 7 8

G r e e n p ly I n d u s tr ie sI 24,59 S h re e B a n s s h J e w e lle r y 244.35 - 9 . 8 7

,--C h r o m a t i c ; I n d ia 22.61 I lI s h a M a r l i in 50.40 - 9 . 8 4

A m t e k I n d ia 2 1 1 . 5 0 T V 1 8 B r o a d c a s t 7 0 . 4 0 - 9 . 8 0

STOC!KS: TOP to LOSERS

1 Priceas o n 1 9 J u ly . 2 Be lw ee n 5 ,J u ly a n d 1 1 9 'J u l y 2 ( ) 1 1 1 lP lic e a s o n 1 9 J u ly . 2 Be tw ee n 5 J u ly a n d 1 9 J u l y 2 0 1 1

l ie lia nc e In d 'u sh iie s 2,87,844.74 879.15 l i e a l t y 2,230.91

O il & I N a tu ra l G a s 'C o rp n 2,36,773.19 276.75 C o n su m e r D u t a b l e s 7,033.07

C l l a l l n d i a 2 ,33 ,5 7 9.1 6 369 .8 0 l l i l & , G a s 9,173.17

T a la C lln su ll~ y S e r v i c , a s 2,22,995,97 1,139'.35 f M C G 4,072.91- -

S ta te IB a n k o f I n d i a 1,59, ,486, ,35 2,511.60 Hea l th ta r ,e 6,504.31

l n fosys 1,58, ,093,97 2,753.35 C ap i t a l G oo d s 13,690.08

IT C 1 ,5 7,9 52 .2 4 2 03.8 5 B a n ~ e x 12,935.31

N I P C 1,55, .468,23 188.55 A u t o 8,861.59

I I h ar t i A ir t e l 1,51,1J65.75 397,80 M e t a l 14,811.87

le ic i B a n k 1,22,234.10 1,050.85 T e c k 3,590.72

lS ha r e p r ic e a s . o n 1 9 J u ly 2 01 1 1B etw e e n 5 J u ly a n d 1 9 J u ly 2 .0 11

4.78

4.33

2.44

2.14

1.38

- 2 . 3 1 1

-3.2.5

HE,ALTHIIN5URANCEL ow e s t h e alth in s ura nc e Gove r p re miu m in ru pe es fo rlh e d iffe re nt s um a ss ure d fro m th e a geb etw ee n 25 a nd ,65 y e a IS. T he p re m iu ms a re lo r in divid ua l h ea lth p l a n s

B h a r t i A X i l B h a ~ 1 A K a B h a r t i A x a B h a r l i A ! l l A p o l l o M u n i c h C h o l a r n a n u a a m

1.771 2 ,4 74 3,115 3,29'2 6.800 8, .081

O rie nla ll 'n su . S ta r H ea lt h A p o llo M u nic h S h an i A r a S la r H ea l ih S la r H e a l lh B aja j A ll ia n ! R a i a j A l l i a n z

809 1,350 2 ,400 3,283 4 ,500 5 ,400 7 ,510 9,.163

O l i e n M I ' n s u _ S t a r H e , l Ih S I J I H e a l lh B h a ~ i A x a S la rH B i l l ih S la r H e a l lh B a ja j A ll ia hl R a ja j A ll ia nz

809 1,350 2 ,600 3,283 4 ,500 5 ,4 00 7 ,510 9,.163

O l i e n t a l l ' n s u . O r r e n l a l u s u S i a l H e a l th S h a ~ i A r . t O r i e n l a l l l l S u , . O l ie n ia In su C h ola m a nd a la m C h ola rn a nd a la m

1,265 2,,447 4 ,583 6,,034 8 ,483 10,302 13,065 14,543

D a i a i A 1 l i a n z S i a l H e a l t h B a i a i A l l i a n z D a j ~ A l li a nz D a j a j A 1 l i a n z B a ja i A ll ia nz B a ia j M l ia nz

2, ,793 5',300 6,983 10,416 12 ,697 15 .4 90 19 1, 757

H ow t o r ea d t lh is t a b ~ le : If a 2 5 -y e al - ald w a n t s a c o v e r o f ~1 l a k h , t he ' lo w e sl p re m iu m o n o ll e r is b y R oy al S u n da ra m a t ~ 9 8 9 ,

T h e s e o m o n l y b a s e p re m iu m s . C h e c k fO I a c t u a l r a t e s w ilh t h e s p e c i f i c i n s u r e r .

Fllls.MFs VOLATILITY IINDIEX1 .500 (VIX)

- 1. 50 0 -1

5 J u l 1 1 1

NII'-"t(5-!t.!J 11,

IiIF 205.0F l I : 1 .I ID .O I II

,1 9 . 1 1 1 1 1 1

S o u r o e : w l ' lw J l S e i n d i H o m

f

18 J l !111,, 5 JuU1

F i l s & O o m e s li o .I il F n e l lq u il y i rI V ~ m e n l ~ c r l S O U l o e : w ~ w _ s e b i . ! I O v . i n

IIND'EX TRACKER

"9Juln

eEXCHANGE RATES~ e ro e n l< J ge ~ ~ i n l lo ~ 0 1 t h e R u p e e I ro m 5 - - 1 9 J u ly 2 0 1 1 _ E , c h ;l n g e r a t e i n ~

S o u r o e : " '1 I W J I l L o r g J n

BULLIIOIN

m mT h e p r i ce s a re

i n ~ P C I 1 0 g r a m

5 o o r o e : "' h \\ W , n O O e u om 5 Jul11

1

19Jul11

T h e p r ic e s

a le in l: p e rk i l o g r a m

S o u r c e : II

y , \ I " , n o o e ' . o o m 5Jul11I

19Jul11

< ~worldl'\ag~IIIhI!p:/ltwil1er.com/OullookMoney; hllp:flwww.facebook.com/olrnindia

http://digital.outlookmoney.com.l0 AUGUST 20111. OUliLOOK MONEY 71

http://digital.outlookmoney.com.l0/

http://digital.outlookmoney.com.l0/



oalLE

lORAINETORYBOARD & CONCEPT U DA YA N R AYILLUSTRATION A NIR B AIN B OR A

Sunny~sSunday dreams are in'terruptea so frequently by telecallers that it

seems like a,notherweekday for h'im..Atlthat remains ;s for his boss to'cali ...

M ·5-ING 'H" ,_5 _

MONEYT.P• Ilifyou are fed up withmarketing calls, opt for th e

do not call facility offered by

the institution

• Once you have 'completedyour trallsactiion on your

mobile. do not forget to sign

out iimmediately

• INevelfdisdose the logi n

PIN of your mobile banking

application to anyone

• lifyou lose your mobile,im m e dia te ly c on ta ct tlhe

bank or Institution where

you downloaded tlhe app'li·

cation and get it blocked

• INevelfstore session de·tails on the Imobile handset

QUIZWhat Is the maximum

a",ounl you can spend

throughl mobile bankingto buy goods and servic-

es in a single day?

A.~5,OOO B.~35.000C.

~50jOOO:. ~60.000

Question in I'ast iissue: The

l as t date for fil in:9 lincometax for an iindividual is A.

31 July. Correct answer by

Albhinaba Da.s.

No. I a m n ot. f re eto ni gh t lo r O J m O l l ie . . . Hel lo l

H e ll o! .. .. . I t m u st b e t ha irogue V i s h a lca'll ing b y mis-

t ak e ! Ag ai n afterm y daugh t e r . !

< ~wo1.1BUTLOOK MONIEY.10 AUGUST 2011 • wwwoutlcokrnonevcom

I: J h i t p :/ ft w it l e r .c om /OU ll oo kM o n e y ; h l t p : / lwww. fa cebaok . com/o lm ind ia

http://p/lwww.facebaok.com/olmindia

http://p/lwww.facebaok.com/olmindia



HSBC moba'i Asset Management

"Talnial IDavi,

Brazilian IRe-staurant Owner,

could be working for you.

Inv;est in Brazil's domestic

consumption driven economy.

HSBC Brazil Fund(An open-ended Fund of Funds scheme, investing pr,edominantly in IHGIF B:railil Equity Fund)

With domestic eonsumptlon accounting for more than 60% of its GIDP', Brazil has an ,attractive eonsumer

marketthat has driven fiMncisl1 gll 'oWlth ste,adily.The infr,astructUlr,e investment on account of the scheduled

hosting of the 2014 FIFAWo:rld Cup andl2016 Olympic IG a me s h SIS further boostedlhie,nation's economy.Brazil's core strength of Ibeing the largest producer of soft and herd commodlties" worldwide keeps it in

the forefront amongst the BAIC ,grou,p of nations that ha,ve the potential to yield glood returns on eqluity

markets. To invest iin this thriving economy, contact Ul S or an investment advisor today.

SMS BRAZilL to567'67

HSBC ID Mutual Fundwww . a s s e tm a n a g eme J l l h s b c . c om / i n$SUed .by H8BC t ! - - r a e l Ma n ag em e nt ( In d ia ) P rW ak limited.

T h e iD d N id u aJ "s c h a r : a c t C l " ' deta i l s u sed in t h i s adven : i sem .co t m e :lic ti l io ll5 a ni! h av e beee u sed fi Il' cr ea t ive l ' \ U J I O S C 5 o ll ly . 'S o ur ce : B ra zilia n I ns titu te o f G eo ,g ra pb y & Sta t i s t i cs

(IB GE) ,·S o ~ ; U SD:A & . U S , D ep an m e at o fit ho I lm l rio r a n d U S G e o lo g ic a l S \ !! 'V ~ ; WQmJ!!tiOll a s o f A u ~ t 3. , 2 0J 0 ,

Fo r m on : in fo rm a tio n ", ,1 I; - A nd hl l l J> r u d.e sh 9 84 961 7319 · B an ga lo re 0 80 4 11 865 1.9 · B ih !P ' 99 31 39 7319 · C lta nd ig a rh 0 1'12 $0 08 11 9 • C h~ n8 i ()44 4 2 00 87 19 ·' C l1 im b at or c

98 94 4 7 13l!l • Dc lh i I lI J l 4 14 907 19 • Gujaral 98 9837 73L 9 • H yile l l lb a d 04 0 6667 4 119 • KmIatab 998 092 7319 • Kmla 98 9S 4m 19 • M ad hYD Pradesb ,c l ChaUi sga r l r

9893471319· Mah.amshtm& Goa 996007"J321 • Mw n b a i 022 66668819· --agpur986082'JI9' NCR. 991079'1319 • Pu n j a b 98'6931319" Pune 020 26134283. 02026001119

• 'Ra j ast han 992 8037 .3 19 ' U tW ' P ra d i:sh 99367 97 319 • WeS T .B e n g al 0 33 22139919 o r write 1 0 u s at [email protected]. in

Jn ve sto l 'S m ay o b ta in ~ e In fo I lI l l l f io n Do cum en t , S ta tem .c n l ,o f A dd itio na lln fl> rm atio n a n d K e y I n fo nn al :io n M e m .o nm c l:u m s .a 1o ll ,g M ih a pplic atio n f orm s fro m th e o ff ic e o f

HSBC M \ ! t! !l !l l '! !! !d , 3 1 4 , v. e R oa d" Fo rt, M u m ba i 4 00 001 , nl: 022-6666 8819 . Su tu t o r ) ' Dm ih :H _ SBC M I !t !!a l F !!!!d b M bOO ll !e t lip as 6In!st~)'aSHe S ecu r i t i e s en d O I p i l !! l

M a r ke ts (f ud ia ) P riva te 1 ;im i't cd ( I i ab i l i tyr es t r i c i ed 1 :0 th e c o r pu s o f : r l W h ~ . Th e Sponso r / a s s o c i a t e s o f th e S p o n s o r JAMC am n o t r e sp on sib l e o r lia ble ' f or any l oss o r : sh o r tf a ll

Rsu l t inS Ih lm th e o pe ra tio n o fth c ,S ~ hc m c, T h e T h uste cs o fH 'S B C M u tu al f 'lm d h av e ! lppol ! ! ted HSB C As s e t.M ! ! n a geQ ! ~ l' (I D d ia ) Private L im i te d a s th e lD ve stm c m :1 M a !m g er ..R is k

F :a c!o n :, A ll i nve s tme . a 11 ! iD mu ' l u a l fU nd i a n d s.ecurilia a r e . ub j e c t to , ma r k e t rub , a nd . tb .e N A V oIlbe S cb .e m e m a y go u p o r , d o w n d . e pe . nd i n ,g 00 tb e ~ilcton' an d '(Ol'lletl

a l fed l !! .g th e _!!: r ides ! Im / keU. De n ,~be 110 '!!S I !!I1!JI ce tb!! t th e ,g bj:e ct 1v eso ( t he S d Le m e l ' r i I l be ! !c l ! Jeved . Pas t penoJDlaDC<; o f th e ; Sp o n so r , AMC . M \ !1W d F '!! !!d o r !m y

a ss oc ia te s , of th e 'S p ol ls or /AM C do es n etf nd ic ate th ef um re p er fe rr e an ce o f th e S ch em e .. C ou ntry sp ec if ic in fo rm a tio n c ou ld yie ld I : 'C su ltssu bS llm tia lly d iff er e nl than. that be se t

h e r e iD . lDves t o r s ah a l l b e a rt h e r is k s, !! II d m:!!lring e ~ e s o f th e u n d e r lyin g sc h cm c(6) i 1 I t o wh i e h th e SC hem e in ve st s. B SB C B nDI F!I J!d (DB¥) II o n lytl l!e :u m eo rtbe & :h em e

and.doesl o.ot 1n. • DYmaD .D . c r I ID.dJellte t he q ua li ty orllle :S dl .e m e o r Ib future prosp«b o r returns. S c h e m e ,aaumcatioD .tad OblecliYe: BBFfan o p ll ll -e ru !c d F un d 'o f Funds

S c h e m e ) seelslO p r o !f i d .e l o !! g ·t cm ! l c a p i l ! ! l app! ' tCia t ion by in ve st1 _n g p m l.o m in an tly i!!W ! lW s !w e s o f H S BC G lo ba ilD ve s!m e nJt f 'lm d s (H G IF ) ! B ! ' B Z i 1 Equ i t y } \me l . T he S ch em e

~Y . at th e d is cr et io n o f ! he . in v ,e st m e nt M . a na ge r~ , a l so in ,v es t in I h .e un i t s o f o th er sim ila r o ve rse as m u tu al f u nd sc he me s, w h i c h m a y c o n st il .U t e a s ig n if ic a nt part o f it s c orp us. T he

Sc l lC :mc I I I lI :Ya l so invest II c e rt !I iD p ro p or ti on . o f i ll l OOJpI lSinmOl ley m a r k e t i nsUumcn t s aml/o[ l lmi ts o f l iq u id mUIWII . f u n d s chemes" in o rd er m mee t l iqu idi ty I c qu in :mCDI !i f r om

t im e ,to t im e . 1 1'1 '_ R a d t he S t: be m e m l lf oJ r1 l1 .:d 'o uD ot :u .m e D't , . 0 1 1 S t a t e m e n t o r A d dJ 1io o aJ la fo rm a tlo n e ar ef u: II ,, "b ef or e IDvesl ing.< ~ W ~ l i j M ~ ' ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ O O ~ . ~ · ~ ~ ~ ~ . f ~ ~ ~ ~ ~ . _ I ~ I . I ~

http://www.assetmanagemejllhsbc.com/in



http://www.assetmanagemejllhsbc.com/in



You.ve taught you, chil'd' .50 many good things. Keep it going witn the UTI Children'S Career Balanced Plan. Our specially designed

plan aims to acnieve yo:ur Child's dream. So make an linvestment today and plan for your chi.ld's fu tu r ,e .

u n Children's Career 8al'anceCilPlan. You start it. W e 'Wi l l take jt:~orward.

• A balanced pfanl JdeaJ'YSlrUc:tured fa meet the financial needs df )lOur chlfd's fullure

• Stan ~g Wftf'I a s : little as Rs. 500 ,pet' montrlltU'ClJgn SIP

= '80022 1230

: 022 26546200

UTI Mulua" Fund

: RICH to 5676756 I J: [email protected] : ·www..UtJmf.com

un CHI'tiDftEN~S C;IIJ_DR &IIlLA_NCIID PLoVf: Anopen~nd ~_ INVUTMaN'I' 'OIll.C'JWIk Fynd$ colr~ed under t1heP lan will be ~ In equitfes. con\lertible and

In(m co!'!ll'el'tiOle aebenrureSlbond·s of companleSl ic:orporates etc and o~er caplr :.a l and mOIne) ' market Instruments .SUbJect to Ithe condition tnat II I not less than6096 of the f!.Jnds WIlllbe Investro rn debt Instruments or lOW 'to medium r ts le prolile having a ratlng of A+ and above or equivalent at rhe time of Investment and ( l i l not mone than 4096 of

' ! t ie' I'lInds In ~id~ an d cqyrty rrelat~ ~nts. ihe' risk profi le of eQvi1)' I~trnen!::!, CQUId b~ high. ~, S'lRUCTURII'; EnW!.Dad' : Nil. Ex i 1 : ! .Da d : less ! : /1.an2 _ lI I'$ - 396. G<e,,~et"'!! 'Ia n o r e qu al K l 2 ytS 1& . ~ ss t rl a n 4 - y r s , - ,2%,,, Gr ea t e r t han 01 ' eq l : l< l l to 4 - ytS & le SS th an .5 y rs - 1 96. G re ate r m an or equa l to5 yts - N il . T n e l Oa d . S1 ! !'u c tu re W f li a s e be a~pj k :ab!e ~(o~nvestment

'tnmugh systematic Invesmlel:lt Plan ISH ' I and S") IS ! e l r n l ! c : ' rnns· l 'er Investment Plan fSTR l f ' I . ASSET .AL.LOCAinON, '!)pes 0' fI:lsttume,nr - Dellt - INannal Al1OcarlOn f% ot N et As~!S)

MlI1lmum • 6O'l6 Maxfmum· l'OCJl9lloR i s k Prolfle • low to Medium T~ of ln$t!'Umem· Equi lY ' Nor:m.1!!AllOcation 196of Net 1'\$$~!S1E~' MInimum· Il96 Maxim,""· 40910Risk / ' rQ 1 I 1~ •

High ,G2N.mIAL KRVICB: Oally NAil. Sa le !'rice /,RedempClon f'rjc:e available' for .SaJeIRedempnon.IIEGISTEJIED ,OFFICE. UTI Towe~ 'Gn' BI'0d<,,8andra JOu:rlaComplex.Banara lEI. M<.lfY1ba4QOOS. A1one: 022 - 66786666. STJ!I lIVI 'OIn' DETAILS: UTI Muwal Fvnd has, been set up asa trust ,under me Indian ltwlsArt. 1882. SI!'ONSORS: State Bank

of India. Puq/ao National Bank. Bank of Baroda and ur e Insurance CorporatIOn or India (liabil ity or sponsors "mired to Rs . ' 1 0 .OOO/- I .1 1 IUIS ' I1 ! I! : UTI ll"un.ee Co.(Plltd,(lnrorporated undet"

!he ' companies act, 19561. ~ ~R: un Asset Management Co. Ud. (Incorporated unclert l"le ' c :ol ' f1Pantes ,act. '1'956l. IUSK. "ACTORS.: AU ~ III Mutual

'funclS ,.nd

_ u r f t I _ . . ._Ill_to marIIlrt ...... _cI....NAV0' .... '"....,.,........ unclel'.... 'SCIIe"". .....,. 90 up 01'C_de"..ndlng '''pori tI'I. ,._,.. .nd

'forces IdI'edIng the seauftI .. nHII1aII. Past pelformance o f !h e SponsOl'SIMutual FUndISCheme, l s l l AMC Is , nOt f'leQe$$;!ri!y an JndlCadon or r tnure resa.tlts.and may nor ,~rllyprOll lde a bas is ro r comparISon with other' InvesUnents. All MUlUaI fUnds and HCIHIdes ~ .. tIi ....... bject to rnmfmI: rIda and m __ ,c.n t..no ..... r.. u.

'_ 'Ute fIIIrId1IOIJJecave _11 .,. _1 __ • SwtemenWOllseNarlons made are SuIlJect to ttle l aWS, or the lancl' as th.ey exist at ,u' lY ~elevam ,POint of rlme,G~O\i'II!tI.,appreciation.and Income. It any, rei"erre,d to, are SWbJec11o the laws, or ·lI"Ieland as Itley exlst rrom time to tlme. un CfIII'dren'.' c.,ieer ........ _ PI.n I . only the' name of

'th. sdieme/pJan and ,dIMs not In .ny__ nH Indlalta .ntI_ttl.quality ~ the 1ICb_1pYn_11D 'filtur. praspectli ,or •.turns. ll'le sCtlemeJplan I.s :sullfeCtto I1SkS

relat ing ro Oedrl. Interest RateS. Uq1.1ldity,S!!aIrrues Lendlng. ReInvestment. Default ilrlCl Invesanent In OVerseas, Markers. ll"adl:nglln ceor and eqt!IIl\}I,derlValilVl'S,[ttle specific lISlecould be



Outlook_Money_Augest_2011

Documents

Transcript of Outlook_Money_Augest_2011