INFLAPRO APPLICATIONS
(Preference Shares/debentures)

Preferential shares and debentures

• Preferential shares/debentures in conventional application provides a fixed dividend for over a period of time, generally less than 10 years. The fixed dividend may be of the order of 10%. The pref. shares may contain a convertible option or may be a non-convertible option also.
• In inflapro option the conventional fixed dividend say 9.5% in our sample case, at 10% inflation. the dividend varies and will be more effective if the period of pref share treatment is more. In sample case 25 years is considered. A convertible pref. share in inflapro is convertible not at the just number of pref. shares held, but will be as per NAV, and is much more than simple number of pref. shares.

How to operate the custom menu

• Please visit www.bnvenkat.com and look for link Preference share cUSTOM MENU and click.
• Hover on the sample? link provided at bottom right corner of the custom menu box. You can understand what are the input fields changeable before clicking this sample? link As a beginner, pl change interest field to the desired conventional dividend rate. (I have typed a figure of 9.5) % pa. Leave other fields untouched. Let the default 10% inflation be allowed to remain.
• click the sample? link.
• click other buttons such as submit etc as adviced at bottom line of the custom menu box.
• Now a result table will appear, having options without ROP (return of purchase price) / with ROP. Look at the table and scroll over the third column (also reading and understanding) the options and its remarks at second column. At third colum figures when you hover you can see the cursor changing to pointer meaning it is clickable. click at figure corresponding to option defa,7 (in my case it was 286.94).
• A new Tab opens up with table of dividends.
• For this typical case of 9.5% interest rate, 1000 shares of ₹ 10 each and 10% inflation rate, the dividends vary from 2.8694% to 28.2628% in 25 years and continued assured dividend of the last dividend i.e. 28.2628% if not converted or buy-back at the NAV of ₹ 29749.72 which is equivalent to face value of 2975 shares of ₹ 10 each.
• Other points are:
• Rate inflation considered is 10%
  InflaproDividend varies from 2.8694% to 28.2628% Approx [Yearly]
  In lieu of normal/conventional Dividend of 9.5% [Yearly]
  This is a scientific way of arriving at EQUIVALENT method of conventional and INFLAPRO
  The idea is to pay a less dividend during first half of periodof INFLAPRO and accumulate
  the difference to the conventional one in the increased share itself and pay more
  dividend at later years than the conventional one without any extra burden to the company
  With inflapro, a company can easily propose pref.share as convertible to equity. If the
  preference share is convertible, the accrued value of shares increases because of less dividend
  in initial years.It increases at the same conventional preference one during first half of period,
  and is maximum at end of 24th yr
  If convertible option is made available then at end of 24th yr the closing balance
  of investment value is 29749.72which is equivalent to 2975 shares and a cash adjustment
  difference of -0.28 This diff being negative can be written off or adjusted with later dividends
• For a ready reference the click the following link of pdf file you may be able to view in browser or downloadable for future reading. The link is
  INFLAPRO PREF SHARES APPLICATION.pdf

INFLAPRO APPLICATIONS
(Mutual Fund)

Mutual Fund

• Many Mutual funds offer a return of over 10% that too regularly without skipping, even in adverse market conditions.
  This application is for a mutual fund company which is generally hovering around
  say 10%, It is better to have a guaranteed variable dividend in a scientifically
  evolved manner. In cumulative (growth) option, it is assured growth equivalent to
  10% after sizeable span of term such as 10 years.
• In inflapro option the conventional fixed dividend say 10% in our sample case, at 10% inflation. the dividend varies and will be more effective if the period of MF treatment is more. In sample case 25 years is considered.
  Being fixed guaranteed dividend or growth, transfer to market option condition
  like debt to equity and vise versa not allowed.

How to operate the custom menu

• If you have already operated Pref. shate custom menu it is a breeze to operate on this MF too.
  Please visit www.bnvenkat.com and look for link MutualFund cUSTOM MENU and click.
• Hover on the sample? link provided at bottom right corner of the custom menu box. You can understand what are the input fields changeable before clicking this sample? link As a beginner, pl change interest field to the desired conventional dividend rate. (I have typed a figure of 10) % pa. Leave other fields untouched. Let the default 10% inflation be allowed to remain.
• click the sample? link.
• click other buttons such as submit etc as adviced at bottom line of the custom menu box.
• Now a result table will appear, having options without ROP (return of purchase price) / with ROP. Look at the table and scroll over the third column (also reading and understanding) the options and its remarks at second column. At third colum figures when you hover you can see the cursor changing to pointer meaning it is clickable. click at figure corresponding to option defa,4 (in my case it was ₹ 399.39).
  Sometimes it is automatic with okaying the prompts for continuation for this option.
  Even otherwise you can come back to this tab and click the desired option's
  corresponding ₹ figure in third column (for defa.7 option it is ₹ 314.28).
• A new Tab opens up with table of dividends.
• For this typical case of 10% interest rate, 1000 units of ₹ 10 each and 10% inflation rate, the dividends in defa,4 option it varies from 3.9939% to 39.3393% in 25 years
  In otherwords, the guaranteed dividend varies from ₹ 0.3994 to ₹ 3.934 per unit of ₹ 10.
  or for 1000 units, it is ₹ 399.39 to ₹ 3933.30 for 1000 units held by investor.
  Here the number of units remain same at 1000 units. Only the NAV changes.
  and continued assured dividend of the default dividend i.e. 10%. or one can change for market options or exit.
  The table for cumulative option is also shown alongside.
• Other points are:
• This is sample inflapro Calutaions for MF in code: defa,4
  Rate inflation considered is 10%
  InflaproDividend varies from 3.9939% to 39.3393% Approx [Yearly]
  In lieu of normal/conventional Dividend of 10% [Yearly]
  This is a scientific way of arriving at EQUIVALENT method of conventional and INFLAPRO
  The idea is to pay a less dividend during first half of periodof INFLAPRO and accumulate
  the difference to the conventional one in the increased units itself and pay more
  dividend at later years than the conventional one without any extra burden to the company With inflapro, a company can easily propose GUARANTEED MUTUAL FUND accrued value of NAV
  increases because of less dividend in initial years.It increases at the same conventional
  one during with guarantee of 10% return first half of period. and is maximum at end of 17th yr
  the closing balance of investment value is 19346.24 which is equivalent to 999.997 units
  after declaring regular incresing dividend over 25 years.
  in the cumulative (growth) option the guaranteed value of the 1000 unit of ₹ 10 at the end of 25 years
  would be ₹ 1,08,347.10.
  There is also " option defa,7 " wherein the last dividend is continued after the inflapro term.
• For a ready reference the click the following link of pdf file you may be able to view in browser or downloadable for future reading. The link is
  INFLAPRO MUTUALFUND APPLICATION.pdf

INFLAPRO APPLICATIONS
Insurance commission

Insurance commission

• In the case of insurance commission to agents, the principle of inflapro can be applied and insurance commission be paid at lesser rate and balance payable is accumulated, the commission increases every year according to inflation protection desired and interest selection. From the accumulated fund at end of a suitable period, pension be disbursed thereafter.
• The operation of the custom menu is very similar to preference share and MF applications. One has to visit my home page and click a link appropriate to Insurance Commission case study CUSTOM MENU. I am not going into more detail because the understanding of the concept is little advanced and it provides only an illustration and a workable model software is yet to be developed looking into the volatility of the commission earned.
• If you have already operated Pref. shate/MF custom menu it is easier to operate on this too.
  Please visit www.bnvenkat.com and look for link commission case study cUSTOM MENU and click.
• Hover on the sample? link provided at bottom right corner of the custom menu box. You can understand what are the input fields changeable before clicking this sample? link As a beginner, pl change interest field to the desired conventional conventional rate. (I have typed a figure of 8) % pa. Leave other fields untouched. Let the default 10% inflation be allowed to remain.
• click the sample? link.
• click other buttons such as submit etc as adviced at bottom line of the custom menu box.
• Now a result table will appear, having options without ROP (return of purchase price) / with ROP. Look at the table and scroll over the third column (also reading and understanding) the options and its remarks at second column. At third colum figures when you hover you can see the cursor changing to pointer meaning it is clickable. click at figure corresponding to option defa,7 (in my case it was ₹ 226.73).
  Sometimes it is automatic with okaying the prompts for continuation for this option.
  Even otherwise you can come back to this tab and click the desired option's
  corresponding figure in third column (for defa.4 option it is ₹ 313.23).
• A new Tab opens up with table of dividends.
• For this typical case of 8% interest rate, ₹ 1000 earnings per year and 10% inflation rate, the commission in defa,7 option it varies from ₹ 21.24 to ₹ 3093.40 in 25 years
  There are two tables side by side. one is base table and other is commission table.
  The calculation is based on a Base table where the payout figure increases at 10% and the commission is prorated on it.
  The calculation is slightly tricky. It is prorated like the one below:
  Current year brought forward figure before interest posting
  multiplied by
  current year base payment
  divided by
  current year base brought forward.
• Other points are: Total commission earned in 25 years is based on ₹ 1000 per month, is ₹ 25000.
  After paying regular commission at inflapro rate the Maturity/surrender value or superannuation for further pension is ₹ 38,667.50
• For a ready reference the click the following link of pdf file you may be able to view in browser or downloadable for future reading. The link is
  customcommissionquickfix.pdf

INFLAPRO APPLICATIONS
Inflapro INSUREANCE

• An endowment plan with a maturiry of ₹ 1 crore to follow in detail in next session.

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