Investment Cycle

Age: 20 – 35 (Growth Period)

• Try and collect your assets to achieve immediate needs or long-term goals

• It is all right if you take risks at this age, because you have a long-term investment horizon, which will give you enough    time to collect more assets, and enjoy it

• Learn more about investment, take advice from professionals; this will help you, increase your knowledge of investing

Age: 35-55 (Consolidation Period)

• You are doing well at this age in your career; your earning should exceed your debt

• This should then be invested in your future retirement in medium-risk investments for your retirement needs

• Your goal should be to retire wealthy

Age: 55-75+ (Spending period)

• By this time you would have saved a lot from your earnings and you take that long holiday, or buy that big house

Tax trauma for Satyam again

On Monday, Mahindra Satyam — the entity that emerged from the ashes of India’s biggest accounting fraud — said it had received a tax demand of Rs 2,113.42 crore for two assessment years 2002-03 and 2007-08 — which roughly cover the period during which rogue industrialist B. Ramalinga Raju had fiddled the accounts of the software exporter. Last September, Mahindra Satyam had come out with restated accounts for the period that estimated the total financial irregularities committed by Raju and his cohorts since 2002 at Rs 7,934.9 crore. The forensic audit revealed that the accounting fudge between April 1, 2002 and September 30, 2008 — the last date up to which the company had published its financial results — amounted to Rs 6,763.1 crore, surprisingly close to Raju’s claim that he had padded the accounts by Rs 7,000 crore. The tax demand has come from the additional commissioner of income tax. He is seeking Rs 1,037.69 crore for the assessment year 2002-03 and Rs 1,075.73 crore for 2007-08. In a notice to the stock exchanges today, the company said the draft of the proposed assessment orders proposed disallowance of certain tax exemptions /deductions claimed by the company. It was not immediately clear whether these related to the tax breaks that the government had granted software exporters housed in the so-called software technology parks. The STP tax benefit has been withdrawn from the current financial year. Mahindra Satyam has been contesting the reopening of tax assessment for assessment year 2002-03 and had even filed a writ petition in this connection before the high court of Andhra Pradesh. The company has been seeking court direction that any fresh assessment should be carried out only after stripping out the fictitious sales figures and fictitious interest that Raju claimed he had earned in a desperate attempt to paper over the huge accounting gaps in the software exporter’s books. The latest tax demand “does not exclude the fictitious income wrongly offered to tax by the earlier management”, the company said. Mahindra Satyam said the petitions were still pending before the high court. It added that even the government agencies had confirmed the “existence of fictitious sales and fictitious interest”. On December 28 last year, the income-tax authorities had ordered a special audit at Satyam Computer Services for the years 2002-03 and 2007-08. The company was ordered to get its accounts audited for this period under Section 142 (2A) of the Income-Tax Act. Sub-section 2A of Section 142 confers power on the assessing officer to order a special audit. The tax demand from the IT authorities flows from the December directive.

SkyTeam offer for Air India

SkyTeam the world’s No. 2 international airline alliance has approached Air India with a membership offer following Star Alliance’s decision to keep out the national carrier from the global grouping.

According to officials in the ministry of civil aviation, the SkyTeam delegation, led by managing director Michael Wisbrun, met civil aviation secretary Nasim Zaidi last week and expressed interest in making the national carrier part of its alliance.

In the aftermath of the Star Alliance fiasco, both SkyTeam as well as Oneworld have approached Air India with membership proposals and the offer to help the national carrier improve its international operations.

SkyTeam — founded in 2000 by Aeroméxico, Air France, Delta Air Lines and Korean Air — is the last of the three airline alliances to be formed.

It has grown to become the second largest global alliance in terms of passengers and members, behind Star Alliance and ahead of Oneworld.

The alliance consists of 14 carriers, including Al Italia, KLM and Delta Air Lines, from four continents and flies to 916 airports in 169 countries.

It operates over 14,000 daily flights with a combined fleet of 3,400 aircraft, including associate carriers.

It has 465 lounges worldwide to serve its 474 million annual passengers. SkyTeam also runs a separate cargo alliance SkyTeam Cargo that collaborates nine carriers who are all SkyTeam members.

M&M overtakes Tata as most-valued auto firm

Sport utility vehicle major Mahindra & Mahindra on Friday surpassed Tata Motors’ market capitalisation to become India's most valued auto company.

Mahindra shares increased 0.27 per cent to close at Rs 719.10 on Friday, compared to the previous day’s close, while Tata Motors shares fell 5.28 per cent to Rs 713.40, on the Bombay Stock Exchange (BSE).

While M&M's market cap stood at Rs 44,150 crore, Tata Motors market cap eroded to Rs 38,402 crore, pushing it to the fourth spot among the auto pack after Bajaj Auto and Hero MotoCorp.

Concerns over Jaguar’s and Land Rover's performance in America and Europe, its two biggest markets, in the wake of continued recessionary trends and a slowdown in demand in the Indian market, spooked investors who dumped the company's stock.

Tata Motors, which continues to be India's biggest company by revenue, saw an erosion of 15.63 per cent in its stock value over the last one-week or six trading sessions. M&M stock, during the same period, saw a fall of 1.1 per cent.

India's second-largest two-wheeler maker Bajaj Auto's market cap stood at Rs 41,414 crore, the second biggest in the auto pack, while two-wheeler market leader Hero MotoCorp's market valuation stood at Rs 39,810 crore.

Ajay Parmar, head research, institutional equities, Emkay, said: “While M&M has stitched a success story with their tractors and other vehicles, Tata Motors is largely dependent on JLR. All companies with exposure to Europe will suffer because the situation is not expected to improve at least for the next six months.”

About 60 per cent of Tata Motors' consolidated revenue is generated by its premium brands Jaguar and Land Rover. With nearly 52 per cent of JLR's volume being sold in the US, the UK and Europe (excluding Russia), the two brands have very high exposure to these economically troubled markets.

Tata Motors net profit for the June quarter was flat at Rs 1,999.62 crore, against Rs 1,988.73 crore in first quarter of financial year 2011. Profit from JLR dipped to £219 million (Rs 1,600 crore) during the quarter, against £226 million (Rs 1,700 crore) earlier.

Tata Motors outlook does not look encouraging with external pressures, such as high inflation in India and China and weak demand across key global markets, said analysts tracking the company.

Its group sales fell six per cent last month to 85,392 units, against the year-ago period. Jaguar sales fell 23 per cent to 4,372 units, while Land Rover witnessed an eight per cent decline in sales at 14,747 units.

Courtsey-http://www.business-standard.com/india/news/mm-overtakes-tata-as-most-valued-auto-firm/446440/

Money Back Health Insurance Plan.by IndiaFirst Life Insurance

IndiaFirst Life Insurance, a joint venture between Bank of Baroda and Andhra Bank along with UK's Legal & General, has announced its foray into the health insurance market with the launch of IndiaFirst Money Back Health Insurance Plan. 

A substantial part of the premium you pay is actually credited into your policy account and this money is invested in various funds as per your choice to get you optimum returns.

This money accumulates in your account and comes back to you at the end of the policy. What's more, you can also use this amount anytime if you need to cover hospital expenses that are beyond the insurance limits or not payable under this policy.

The plan is a long term plan for 5 or 10 years and offers dual tax benefit of Section 80C and 80D, under the current tax laws.

It offers the convenience of cashless treatment, cover for 195-day care procedures, re-imbursement of medical expenses for 30 days pre and 60 days post hospitalization, cover for the entire family (spouse, two children and two dependent parents) under one plan.

It is an indemnity-based plan - the insurer will reimburse the expenses incurred on hospitalization, subject to the sublimit and other conditions. You can choose between five fund options.

FEATURES: It is available as individual and family floater plans. The floater plan covers the policyholder, spouse, two children and two parents.

The policyholder will be the 'primary life assured', and others will be referred to as 'other life assured'. Upon the death of the 'primary life assured', the benefits are paid out and the policy ceases to exist.

The policyholder can nominate a beneficiary to receive the sum assured in case of his/her death. The maximum entry age is 60 years and a policyholder cannot be over 70 at the end of the tenure. The maximum ages of parents at inception and maturity should be 65 years and 75 years, respectively. 

SUM ASSURED: The minimum cover offered is Rs 1.5 lakh, and Rs 5 lakh is the upper limit. Under the floater option, the maximum sum assured is Rs 10 lakh.

TERMS OF COVERAGE: The maximum cover is restricted to five times the annual sum assured. There are sub-limits for doctor's fee, room rent, ICU charges, etc. On maturity, you will get the fund value, either as lump sum or in installments, as per your choice.

PREMIUM AND PAYMENT TERMS: You can choose either the single-premium -with tenure of five years – or the regular premium option, with a 10-year term. The premium will be reviewed annually.

Till the age of 45, the minimum premium under the regular mode is Rs 10,000, while it is Rs 30,000 for single premium mode. If you are over 46, the minimum premium will be Rs 14,200 in the regular mode and Rs 37,500 in the single premium mode.

CHARGES: Premium allocation charges are 13% in the first year and 2% in the subsequent years under the regular premium mode.

UPSIDE: Those unwilling to treat their yearly health premium solely as expense and prefer to create a fund instead may find the plan appealing.

DOWNSIDE: The plan is costlier than pure health policies, due to Ulip charges. In addition, the policy gets terminated upon the life assured's death, leaving the dependents unprotected.

Note- This blog (www.yoursweetmoney.blogspot.com) must not hold responsible for any information shared in this article as all the information has gather through online.

You are hereby requested to consult with your financial planner prior to investment.

Honda Jazz

Honda Siel Cars India today launched a variant of the premium hatchback Jazz.

The move precedes the introduction of the small car Brio, which will feature the same engine as the new Jazz.

The car is priced in the range of Rs 5.50 lakh to Rs 6.06 lakh (ex-showroom Delhi). The old Jazz was priced between Rs 7.12 lakh and Rs 7.56 lakh. The new variant will be fitted with a 1.2-litre petrol engine and give a mileage of 16.7 km per liter.

The engine is being manufactured at a facility in Greater Noida.

As per Mr. Jnaneswar Sen. Honda Siel senior vice-president (sales and marketing), “The engine capacity at the plant is around 1 lakh units per annum and the utilization level is about 60 per cent. So, there is enough capacity to produce engines for the Jazz and Brio”.

He also said some of the components would be brought from the Tapukara plant in Rajasthan. The localisation level of components in the new car stands at about 76 per cent.

DLF stares at Rs 900cr more penalty

Real estate giant DLF may have to pay Rs 900 crore extra penalty if the Competition Commission of India (CCI) finds it guilty of abusing its dominant market position in three more projects in Gurgaon.

The CCI stunned the housing market on Tuesday when it slapped a Rs 630-crore fine on DLF for unfair practices at its Belaire project in Gurgaon. 

The competition regulator is now investigating charges of market dominance and anti-competitive practices in the Park Place, Magnolias and New Town Heights projects.

Officials said apart from DLF, the commission was also investigating 10 to 11 cases involving other real estate players where complaints under sections 3 and 4 of the Competition Act 2002 had been lodged. Sections 3 and 4 deal with anti-competitive agreements and abuse of dominant position, respectively.

Sources said next in CCI’s line of fire were cement companies such as Ultratech, ACC and Ambuja Cement, who might have misused dominant market positions.

“Complaints have come from buyers of residential properties in Park Place, Magnolias and New Town Heights against DLF. We will issue an order soon,” said commission officials.

The commission can charge a penalty of up to 10 per cent of three-year average turnover of a company in each case of abuse of market dominance and anti-competitive practices. DLF posted an average turnover of Rs 9,006 crore between 2009 and 2011. In Belaire, the fine was 7 per cent of the average turnover.

The CCI will also initiate “suo-motu” investigation into other real estate players, including Lavasa and DB Realty, as anti-competitive practices have become a norm in the real estate sector.

“Buyers in general are facing problems such as escalation of property price, change in build-up area and delay in getting possession. 

It is, therefore, appropriate to look into the general practice along with specific complaints,” said officials.

The commission, which was set up two years back, is currently investigating around 140 cases.

The commission feels a real estate regulator will “ensure the amount collected from customers is utilised for the specific project, bring transparency in information relating to work progress and end the practice of built-in hidden costs other than the initial set price”.

Analysts said in the absence of a market regulator the commission should be careful during its investigation. “The commission should see to it that it does not become a tool in the hands of irate consumers. 

It should be circumspect when dealing with complaints,” said Abhishek Goenka, partner (real estate) at BMR Advisors.

A Real Estate Regulation Bill 2011, which will bring transparency in the sector and protect consumers from fraud, is yet to be introduced in Parliament. 

If the bill becomes law, all developers will have to register with the regulator and provide details of their projects before starting promotional activities.

Courtesy- http://www.telegraphindia.com/1110819/jsp/business/story_14396014.jsp

ICICI loan

 Bringing back memories of the much-reviled teaser rate home loans, ICICI Bank today launched two home loan products, which give borrowers the option of a fixed interest rate for the first two years.

However, it is not a teaser rate loan in the strictest sense as it does not front-load a lowball rate as an inducement to unsuspecting home loan borrowers.

Under the one-year fixed rate home loan, the customer can take a loan at 10.50 per cent for an amount less than or equal to Rs 25 lakh, 11 per cent for higher than Rs 25 lakh and less than or equal to Rs 75 lakh, and 11.50 per cent for above Rs 75 lakh.

Under the two-year fixed rate scheme, the customer can take a loan at 10.75 per cent for an amount less than or equal to Rs 25 lakh, 11.25 per cent for above Rs 25 lakh and less than or equal to Rs 75 lakh, and 11.75 per cent for an amount higher than Rs 75 lakh.

On completion of fixed rate period, loans will take on a floating interest that will be linked to the base rate.

Borrowers will also have to pay a margin above the base rate, which will be decided at the time of loan sanctioning.

The new products will be available from Friday, ICICI Bank said, adding that the fixed interest products are in addition to the already available floating products.

The notorious teaser rate loan was the brainchild of the State Bank of India and its former chairman P. Bhatt. It was launched in 2009 with a fixed interest rate component that was as low as 8 per cent for the first year. It morphed into a floating rate for the remaining term of the loan.

However, the RBI came down on these schemes as it was concerned that borrowers might find it difficult to service the loans once the normal rate kicked in.

With interest rates turning expensive and observers fearing a couple of more rate hikes from the apex bank, ICICI Bank’s latest move seems designed to carve out a greater market share and acquire customers.

The lender said that fixed income rates would shield customers from frequent changes in home loan interest rates and protect them from any rise in interest rates over the next one or two years.

Coal India snatches RIL crown

Barely nine months after it listed on the stock exchanges, has state-owned Coal India had mid-wived one of the most incredible stories on Dalal Street by toppling Reliance Industries from its perch and becoming the country’s most valuable company. The Calcutta-based hewer of coal today notched up a market capitalisation of Rs 2,51,296 crore, nudging ahead of Mukesh Ambani’s flagship company which reported a value of Rs 2,47,129 crore. The Coal India stock, which first listed on the bourses on November 4 last year, has risen 16.21 per cent till date, while Reliance has wilted 32 per cent during the same period. Both are principally energy resource companies: one is the largest producer of coal, while the other is the biggest refiner of crude oil. Coal India’s push to the top came in just seven trading sessions since it burst into the sensex on August 8. That itself is a fairytale ride: no other company has leapt into the index in a short span of nine months since listing. The change at the top, though not unexpected, is a reflection of the huge demand for natural resources such as coal in an economy that is projected to grow at 8 per cent. The fortunes of the two companies — Coal India and RIL — seem to have diverged because of perceptions of investors in a market that has been extremely volatile lately. RIL has been under-performing the markets over several months primarily because of disappointment over the company’s inability to ramp up gas output at its famed KG-D6 block. Revenues from its oil and gas exploration account for just 5.7 per cent of its gross turnover of Rs 276,371 crore in 2010-11, but that does not seem to have weighed with investors at all. In the trading today, the Coal India stock closed with a gain of 2.64 per cent at Rs 397.85, translating into a market capitalisation of Rs 2,51,296 crore. On the other hand, the RIL share ended lower by Rs 4.20 at Rs 754.80. For RIL, the change in the pecking order is tinged with a little bit of irony: it had emerged as India’s most valuable company nearly four years ago after dislodging another state-owned giant — ONGC. It has now been beaten by a nine-month old PSU newbie on the market. The RIL stock has also been pounded after a draft report of the CAG said the company had been shown undue favours by the Union ministry of petroleum and natural gas and the Directorate General of Hydrocarbons (DGH) in its Krishna-Godavari (KG) block. Experts point out that there are many things that are going in favour of Coal India, which is the largest coal producer in the world. The availability of huge reserves in India will see many coal-based power projects coming up. Moreover, after the Fukushima nuclear power disaster in Japan, concerns over safety are likely to result in a slowdown of future nuclear projects.  Coal India has huge cash reserves and will not be affected by the current environment of high interest rates or the economic uncertainty overseas.

Beetle variant .......... next year

 Volkswagen India will bring the third generation Beetle to India next year.

The car, first introduced in 1938, has dropped the “New” tag from its name and will now be called the 2012 Beetle.

The third generation bug was unveiled at the Shanghai Motor Show.

The car has recently been launched in the US and is expected to hit the Asian markets in February 2012.

Volkswagen India has, so far, sold 617 units of the New Beetle that was introduced in India in December 2009. While the company sold 58 units of the “People’s Car” in 2009, sales rose to 466 units in 2010.

This year, the German carmaker sold 93 units of the car till July.

The Beetle, with a price tag of Rs 21.22 lakh, has been introduced in India for its iconic status and for brand positioning and not for volumes. Still, we have not done too badly having sold over 600 units in over one-and-half years.

The new generation Beetle has hit the US markets. It will be introduced in Europe later this year. We hope to bring it to India next year. The car continues to be manufactured at our Mexican plant and will be sold here as CBUs.