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Gold Price Historical Trends & Returns
Subscription Date 16-Dec-2008
Subscription Amount
Rs. 3000
Tenure 36 months
Total Subscription Amount
Rs. 1,08,000
17,991.1517,991.15
Gold Price Historical Trends & Returns
Year 1
Year 2
Year 3
TOTAL
Redemption Date 15-Nov-2011
Gold Rate in Rs/10gm (on redemption date)
Rs. 29,171
Average Gold Rate in Rs/10gm (for 3 years)
Rs. 18702.94
Illustration has been prepared using the price of MCX Gold Mini (995 purity) and are for indicative purposes only.
Avg. Gold Rate (Rs/10 gm)
Subscription Amt (Rupees)
Accumulated Gold (Grams)
14,834.0014,834.00 36000.0036000.00 24.268624.2686
36000.0036000.00 20.009820.0098
23,283.6523,283.65 36000.0036000.00 15.461515.4615
108000.00108000.00 59.739959.7399
17,991.1517,991.15
RETURNS – 61%RETURNS – 61%
Subscription Amount – Rs. 1,08,000Subscription Amount – Rs. 1,08,000 Current Valuation – Rs. 1,74,261Current Valuation – Rs. 1,74,26159.74GRAMS
Profit –Rs.66,261
Profit –Rs.66,261
Problems with Investing in Gold
Purity and Quality Trust and faith on Jeweller Steep rise in the price over the past few years Gold is considered auspicious and intrinsic but has low per capita
consumption Limited range of gold investment/ savings products available to consumers Lack of Human discipline in accumulation of Gold
Other market challenges
5
Expensive - out of reach for a common household
Price volatility risks over the short and long term
Physical security is a concern for lower SEC
Loss of making charges when selling jewelry
Scams and other fraudulent cases in gold schemes
Move from physical to paper investment
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
However this also poses as an opportunity to Stimulate Interest & Demand For an Organised Savings In Gold In
India.
My Gold Plan - The Study
Confidential draft for discussion purposes only
MGP’s market potential is validated through a comprehensive research
18 months study conducted by the WGC with McKinsey and Eden McCallum
Including a three rounds of Consumer Research: Phase 1: 706 consumers (Quantitative & Qualitative); 9 Cities: Mumbai, Delhi,
Chennai, Ahmedabad, Pune, Trivandrum, Mysore, Rajkot, Amritsar Phase 2: 1,595 consumers (Quantitative & Qualitative); 12 Cities: Mumbai, Delhi,
Bangalore, Ahmedabad, Amritsar, Ludhiana, Lucknow, Nagpur, Madurai, Warangal, Erode
Phase 3: 20 Focus Groups in Mumbai, Delhi, Chennai & Pune
Trade Interviews Banks & NBFCs Jewellers
8© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
Research indicates very promising acceptance
Source: Quantitative research initiated by the World Gold Council, conducted by IMRB (WPP company)
More than 70% of the customers of researched channel partners are likely to invest in this scheme if offered by their respective channel partner
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential. 9
The SolutionIn Association with
Presents
Existing Jewellery ProductsMy Gold Plan
• Price risk (savings in rupees not gold in majority of current schemes)
• Fragmented trade
• Most offer redemption only in jewellery
• Daily price averaging (very small ticket size purchases on daily basis)
• Universal access via multi-network model
• Redemption in coins
• Secure & credible
My Gold Plan solves current market challenges
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
What is My Gold Plan
Similar to conventional savings plans A medium to accumulate physical gold in small quantities at periodic intervals A customer puts aside a fixed sum of money every month The fixed sum then buys gold every trading day in that month Save gold through a process of daily rupee averaging of the price of gold over
a sustained period in time At the end of the term exchange in the form of Gold Coins
Features of MGP
START
12 24 36 48 60
6 months lock in
99.5 24 Karat Gold
Monthly InvestingDaily Averaging
Top-Up Any time any amount
Cheque /DD/ pay
order (min1000/-)
ECS Preferred (min1000/-)
Features of My Gold Plan
Who can Invest ? Resident Indian including minors, HUF & NRIs
Minimum Monthly Investment
Rs.1000 and in multiples of Rs.500 thereafter
Initial Investment Mode Cheque/DD/Pay Order
Tenure 12/24/36/48/60 months
A pure product 99.5% 24 Karat Gold
A transparent product Micro Gram Units – customers are credited up to 4 decimal points rounded down
Recurring Monthly Investment Mode
Cash/Cheque/DD/Pay Order/Direct Debit/Debit Card/ECS/NEFT/RTGS (10th &20th)
Implications of each payment cycle mentioned in separate note. This would be a function of the “clearing date” of the said amount
Daily Averaging
All "Clear Funds" from investments (Fresh / Monthly / Additional) will be invested in gold over the next 20 business days in equal tranches and Gold Micro Grams allotted at "Beginning of Day" prices declared by Reliance Money
Features of My Gold Plan
Gold Pricing Gold price (upto 2 decimal points) would be calculated and declared by Reliance Money for all business days
Administrative Charges 1.5% of Initial/Monthly Invested Amount is a non-refundable fee paid to the Central Entity towards setup/administration costs
Lock-in Period 6 months. (Redemption not allowed during loc-in period)
Termination Charges 2.5% Termination Charges on the invested amount
Process Monitoring & Safekeeping
The entire process of daily gold purchase will be monitored by a Trustee appointed by Reliance & WGC. The process will be audited on a monthly basis .The gold that is purchased will be then passed on to a Safekeeping Agency till the time of fulfillment
Fulfillment 99.5% Pure Coins
Fulfillment Locations Gold Coin Redemption at Reliance Money Branches
How does it work? Front Office
Client Buys MY GOLD PLAN
from us
Documents deposited in the CAMS centers or
our Branch offices
MGP starts at T+1 day
Client Receives 3SMS• APPLICATION• WELCOME ON BOARD• SMS on days of deposits
Balance available from
CAMS & Website
At the time Fulfillmentclient gets
Gold
How does it work? Back Office
Reliance Money
Precious Metals Quote Accepted Order
Placed
Bank Gives best rate
Transfer gold
Trustee
Safe Keeping Agency
Independent Auditor
Transfer gold
Client gives Cheque
Reach to be maximised via a wide range of distribution and redemption partners
18
Reliance Gold
Other Reliance Capital
Companies
Fulfilment
Jewellery Stores
Distribution (examples)
Back-end Service
Provider
Banks - Bullion
Suppliers
Process Partners
Custodian
Reliance Money
Other
Coins
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
Benefits of My Gold Plan
Accumulation of Gold with small amounts over sustained periods for a larger grammage / meeting up with ones Investment and/or Savings goals or Objectives thought of like daughter’s wedding, etc.
Cost Averaging: Allows the customer to average his price on Gold over a period of time
Gold Rates Benefit: More grams credited when the price of Gold is low Guaranteed Purity: 24 karat with 99.5% purity Secure : Get receipts for every payment made by customer Gold Gram benefit: Credit of Physical Gold Grams in 4 decimals
rounded down Multiple Payment Mode: Cash/Cheque/DD/Pay Order/
Direct Debit/Debit Card/ECS/NEFT/RTGS
Daily Averaging 2000/-
A unique and attractive offer in the market
ProductMY GOLD PLAN Gold ETF Gold Fund
(Mutual Fund)NSEL
e-GoldPhysical Gold Coins Jewellery Grammage
Savings Scheme
ROI/ Interest Rates (annual)
approx. 20% (avg. annualized 10 year
returns)
approx. 20% (avg. annualized 10 year returns)
approx. 20% (avg. annualized 10 year returns)
approx. 20% (avg. annualized 10 year
returns)
approx. 20% (avg. annualized 10 year
returns)
approx. 20% (avg. annualized 10 year
returns)
Services Offered
Savings in Gold, SIPs - Daily Avg pricing,
Redemption in coins
Savings in Gold Savings in Gold, SIPs - Monthly
Avg Pricing
Trading in Gold Savings in Gold Savings in Gold, SIPs and eventual conversion to
jewellery
Entry Barriersnil, micro units possible DEMAT a/c, 0.5
gms unitnil DEMAT a/c, 1 gm nil nil
Cost of Acquisition/ Annual Fees
1.50% 1.00% 1.5-2% nil 2-15% making charges
nil
Redemption Choice
Coins Cash Cash Cash or Coins Coins Jewellery
Exit Load/ Redemption Charges
Mix of type redemption for coins (0.5 %)
nil nil 0.5% making charges for coin
redemption
2-15% making charges
15+% as jewellery making charges (coins
redemption not allowed)
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential. 21
With Jewellers
• No Coins• No Interest Benefit• Making charges
additional 20%-40%
MGP - Partnering Opportunity
Confidential draft for discussion purposes only
Reliance Capital
Reliance Capital is India’s Third largest Financial Services Group Key Highlights:
Over 150 million customers - 1 in every 8 Indians 12 million shareowners - among the largest in the world 130,000 young, trained and motivated people Group net worth of over US$ 16 billion Group market capitalization of over US$ 27 billion Flagship stocks included in Sensex, Nifty, MSCI and Futures & Options
24© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
Reliance Money
Reliance Money pioneers in the Gold Coin growth story in India India Post is Reliance Money’s principal partner. The tie-up with India Post started in 2008 with 108 Post Offices in 3 states.
Since then it has expanded its reach over 1000 Post Offices in India across 21 states.
This growth was achieved due to an extremely robust Inventory Management system and constant innovation in our product offerings.
Through the Inventory Management system, Reliance Money manages over 1000 outlet’s stock and sales inventory on a real-time basis.
World Gold Council
World Gold Council (WGC) is a U.K. based market development organization of the gold industry, including global mining companies responsible for over 60% of corporate gold production.
In addition to using its influence to contribute to the development of the gold mining industry, the World Gold Council also works to develop insights into the future role that gold can play, and to increase and sustain the demand for gold in the investment, technology, and jewellery sectors.
WGC is an organisation funded by the world’s leading gold mining companies with the aim of promoting demand for the precious yellow metal.
World Gold Council
The WGC also works to increase and sustain the demand for gold in the investment, technology, and jewellery sectors
Examples of the WGC’s market changing initiativesGlobal Gold ETF: Current AUM US$ 90 bn ICBC China: Over 2.2 million accounts since launch 1yr ago Bullion Vault – Current AUM US$ 3 bn
India Akshaya Thritiya (45 tonnes) Banking Sector Gold Retail Programme (25 tonnes)
Partnered with ICICI Bank for the retail launch of Swiss certified gold medallions in India India Post Gold Retail Programme
Having catered to 150,000+ customers transactions and 800+ post offices Gold Linked Microfinance Schemes
Catering to 3.5 lac women customers via 1,400 branches in South India
27© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
WGC & My Gold Plan
WGC runs such program with various partners across the globe These partners are generally the financial front runners of the country To name a few:
China WGC has signed up with Industrial and Commercial Bank of China (ICBC) ICBC is the largest and most profitable commercial bank in the world It serves over 215 million individual and corporate clients globally Since the programs inception in March 2010, over one million accounts have already been opened
Japan WGC has signed up with 2 of the biggest Japanese financial entities
Mitsubishi Corporation & Mitsubishi UFJ Trust and Banking Corporation Mitsubishi Corporation is the largest general trading house in Japan It runs the largest gold trading team in Japan
Tanaka Kikinzoku Kogyo K.K. Group (TKK) Tanaka is the largest bullion house in Japan WGC has been running GAPs with the TKK group since 30 years
In India WGC has an exclusive tie up with Reliance
While there are a myriad of gold investment channels and products in the market, our research has identified over INR 35,000 crores of annual demand for a new product that can solve for the current market’s challenges
Distribution partners can easily meet this demand with My Gold Plan - a gold product that is: Affordable Flexible Secure Simple Transparent
29
An opportunity for a potential partner
© 2012 RMPML and World Gold Council. All rights reserved. Proprietary and confidential.
Thank you