Reliance Equity Advantage Fund Presentation

-: 2 :-2

Table of contents

� Product Offering by Mutual Funds

� Innovative product offerings by Reliance Mutual Fund

� The India Story….Rapidly changing India

� Rationale for launching Reliance Equity Advantage Fund

� Working of the fund

� Positioning

� The Path Ahead

� Product Features

-: 3 :-3

Indian Mutual Fund Industry

� Private sector Mutual Funds commenced operations only in 1993

� Growth was seen in late 1990s, however its only in recent few years that the industry hasseen real growth

� Investor awareness about Mutual Funds was very low and hence plain vanilla products wereoffered

� Schemes launched by most fund houses are generally:

� Market cap based such as large cap, mid cap, multi-cap

� Theme based – contra funds, infrastructure, opportunities

� Plain Vanilla Products- equity diversified

� Recent performance of top fund houses are similar as products are similar

-: 4 :-4

Similar offerings - similar portfolios

Popular Stocks among the various mutual fund schemes in the industryCompany Name Total No. No. of schemes No. of schemes

of Schemes having exposure having exposure >5% >10%

Reliance Industries Ltd 204 110 20Infosys Technologies Ltd 192 59 10Bharati Tele - Ventures 185 62 3Reliance Communication Ventures Ltd. 169 24 1Larsen & Toubro Limited 166 25 1

� Out of 263 equity schemes, RIL is present in 204 schemes and likewise for other stocks� Most schemes irrespective of their names have similar style and similar diversified portfolios

Investors deserve a broader basket of products thanjust Long only plain vanilla products

Date: 30th April 07 Source: Mutual Fund India Explorer

-: 5 :-5

Innovation at Reliance Mutual FundDynamic Asset Allocation Sector funds

� First fund house to launch sector funds – with Dynamic Asset Allocation having flexibility toinvest 0-100% in equity and/or 0-100% in debt instruments

� Reliance Diversified Power Sector Fund

� Reliance Media & Entertainment Fund

� Reliance Banking Fund

� Reliance Pharma Fund

-: 6 :-6

Innovation at Reliance Mutual FundIndia’s first ATM cum Debit Card linked to Mutual Fund investments

� An AAAAATTTTTM cum debit cM cum debit cM cum debit cM cum debit cM cum debit carararararddddd that provides MFinvestors instant access to their investmentsanytime, anywhere

� InstInstInstInstInstant liquiditant liquiditant liquiditant liquiditant liquidityyyyy – 24x7 access to yourinvestments (within the permissiblewithdrawal limit) at oat oat oat oat ovvvvvererererer a mil a mil a mil a mil a million lion lion lion lion VISAVISAVISAVISAVISAenablenablenablenablenableeeeed d d d d AAAAATTTTTMMMMMs acrs acrs acrs acrs across the woss the woss the woss the woss the worldorldorldorldorld

� AAAAAvvvvvailailailailail of of of of of c c c c cash lash lash lash lash less tress tress tress tress transansansansansacacacacactions at 24*tions at 24*tions at 24*tions at 24*tions at 24*million PPPPPoint ofoint ofoint ofoint ofoint of Sal Sal Sal Sal Saleeeee (PoS) terminals atmerchant establishments accepting VisaCards across the world

*source: www.visa.com

FFFFFiririririrst st st st st TTTTTime in India - ime in India - ime in India - ime in India - ime in India - An IntAn IntAn IntAn IntAn InternationalernationalernationalernationalernationalAAAAATTTTTM cum Debit cM cum Debit cM cum Debit cM cum Debit cM cum Debit cararararard linkd linkd linkd linkd linkeeeeed td td td td tooooo

MMMMMutututututualualualualual F F F F Fund Inund Inund Inund Inund Invvvvvestmentestmentestmentestmentestmentsssss

-: 7 :-7

Innovation at Reliance Mutual FundIndia’s First Long-Short fund� Reliance Equity Fund is the FFFFFiririririrst Divst Divst Divst Divst Divererererersifsifsifsifsifieieieieied Ed Ed Ed Ed Equitquitquitquitquity Fy Fy Fy Fy Fund in Indiaund in Indiaund in Indiaund in Indiaund in India which looks to capitalise on

both LLLLLong as wong as wong as wong as wong as welelelelellllll as Shor as Shor as Shor as Shor as Short opport opport opport opport opportttttunitiesunitiesunitiesunitiesunities.� A useful product in every investors’ portfolio as it intends to reduce volatility and reduce

downside risks by using innovative P/E based hedging/shorting strategies� Reliance Equity Fund has created history with the highest collection ever among domestic

mutual funds, by raising a record Rs 5723 crores & over 9 lakh applications during the NFO*� The fund has aimed to perform exceedingly well since launch when volatility was at the

highest level in Indian equity markets� Despite hedging/shorting over 30% of its portfolio, REF has managed to generate near Nifty

returns since inception.

PPPPPast Past Past Past Past Perererererffffformancormancormancormancormance mae mae mae mae may ory ory ory ory or ma ma ma ma may noy noy noy noy not be sustt be sustt be sustt be sustt be sustaineaineaineaineained in the fd in the fd in the fd in the fd in the futututututururururure.e.e.e.e.Compounded annualized returns of Growth Option as on 31.05.07(Inception Date: 30th March 2006) Calculations assume that allpayouts during the period have been reinvested in the units of thescheme at the then prevailing NAV.*Source:www.economictimes.com

With this fund, we have tried to take the investor to thenext level of investing & provided diversification ofopportunities within their equity portfolios.

-: 8 :-8

Innovation at Reliance Mutual FundIndia’s First Long-Short fund

PPPPPast Past Past Past Past Perererererffffformancormancormancormancormance mae mae mae mae may ory ory ory ory or ma ma ma ma may noy noy noy noy not be sustt be sustt be sustt be sustt be sustaineaineaineaineained in the fd in the fd in the fd in the fd in the futututututururururure.e.e.e.e. Compounded annualized returns of GrowthOption as on 31.05.07 (Inception Date: 30th March 2006) Calculations assume that all payouts during theperiod have been reinvested in the units of the scheme at the then prevailing NAV.

WWWWWith this fith this fith this fith this fith this fund, wund, wund, wund, wund, we hae hae hae hae havvvvve triee triee triee triee tried td td td td to to to to to takakakakake the ine the ine the ine the ine the invvvvvestestestestestororororor t t t t to the neo the neo the neo the neo the nexxxxxt lt lt lt lt leeeeevvvvvelelelelel of of of of of in in in in invvvvvesting & presting & presting & presting & presting & prooooovidevidevidevidevideddddddivdivdivdivdivererererersifsifsifsifsificicicicication ofation ofation ofation ofation of oppor oppor oppor oppor opportttttunities within theirunities within theirunities within theirunities within theirunities within their equit equit equit equit equity pory pory pory pory portftftftftfolios.olios.olios.olios.olios.

-: 9 :-9

Innovation at Reliance Mutual Fund- a continuous process

� Investors in developed countries have more wider choices

� Hedge Funds

� Market neutral funds

� International / emerging market funds

� Arbitrage funds – convertibles arbitrage, merger arbitrage

� Commodity funds

� Real estate funds

� Ethical funds, Green funds, Shariah compliant funds, etc

� Indian investors deserve more choices too

� Reliance Mutual Fund would aim to be at the forefront to lead innovation as it has tried toachieve in the past

-: 10 :-10

PRESENTING

Reliance Equity Advantage FundAn open-ended Diversified Equity Scheme

Yet another innovative product

-: 11 :-11

India Story

-: 12 :-12

India poised to be third largest economy

By 2032, India will be world’s third largest economy, next only to the U.S. and China

Source: Goldman Sachs Report

-: 13 :-13

And the third largest equity market by 2050

Source: Siegel, Jeremy, Future for Investors (2005)

-: 14 :-14

India rapidly changing…

� Under DevelopedEconomy

� Slow rate of growth

� Bureaucracy

� Lack of infrastructure

� Developing Economy

� Huge InfrastructureInvestment

� Rising Aspirations…

� Matched with improvedconfidence

� One of the fastestgrowing economies

� State of art infrastructure

� Global scale of operations

� International centre ofexcellence for most skills

PAST

PRESENT

FUTURE

-: 15 :-15

What would drive the future…

AAAAAvvvvvg GDP gg GDP gg GDP gg GDP gg GDP grrrrrooooowwwwwth heth heth heth heth headingadingadingadingadingnornornornornorthththththwwwwwararararardsdsdsdsds

1900-1950 1.0%1950-1980 3.5%1980-2002 6.0%2002-2006 8.0%

SlSlSlSlSlooooowing populwing populwing populwing populwing population gation gation gation gation grrrrrooooowwwwwththththth

1951-1980 2.2%1981-1990 2.1%1991-2000 1.8%2001-2010E 1.5%

RRRRRising litising litising litising litising literererereracacacacacy ry ry ry ry ratatatatateeeee

1950 17%1990 52%2000 65%2010E 80%

The result of the above could be significant rise in the income levels continuing India on the theconsumption led growth trajectory

Source: CSO

-: 16 :-16

Enablers in place for virtuous cycle

RRRRRisingisingisingisingisingCCCCConsumponsumponsumponsumponsumptiontiontiontiontion

SignifSignifSignifSignifSignificicicicicantantantantantEmplEmplEmplEmplEmploooooymentymentymentymentyment

GrGrGrGrGrooooowwwwwthththththOpporOpporOpporOpporOpportttttunitiesunitiesunitiesunitiesunities

HigherHigherHigherHigherHigherIncIncIncIncIncomeomeomeomeome

EnablEnablEnablEnablEnablererererersssss

� Cost Competitiveness

� Skilled Manpower

� Young Population

� Greater Access to credit

-: 17 :-17

India Inc now has global aspirations

In fact, Tata Tea recently sold off Glaceau at a 50% profit to Coca Cola highlighting the fact thatthe global ambitions are supported by sound financial decisions and are not about ego satisfaction

Source: Media Reports

Acquirer Acquiree Deal Value

Tata Steel Corus $ 10.4 billion

Hindalco Novelis $ 6.0 billion

Suzlon Energy Repower $ 1.8 billion

Tata Tea Glaceau $ 677 million

-: 18 :-18

Foreign Institutional Flows

� India’s market cap : $1 tn

� As % of global market cap : 1.8%

� India’s GDP : 2.0% of global GDP

� India’s GDP on PPP basis : 6.3% of global GDP

� Foreign exposure to India : 0.4% of global equity market cap

Source: Bloomberg, IMF World Economic Outlook April 2007

IfIfIfIfIf the al the al the al the al the allllllocococococation wation wation wation wation wererererere te te te te to incro incro incro incro increeeeeasasasasase te te te te to 1% ofo 1% ofo 1% ofo 1% ofo 1% of gl gl gl gl globalobalobalobalobal equit equit equit equit equity marky marky marky marky market cet cet cet cet cap,ap,ap,ap,ap,that wthat wthat wthat wthat would meould meould meould meould mean an additionalan an additionalan an additionalan an additionalan an additional infl infl infl infl inflooooow ofw ofw ofw ofw of US $330bn !! US $330bn !! US $330bn !! US $330bn !! US $330bn !!

-: 19 :-19

Domestic Flows too will continue

Estimated* #(p.a.)YYYYYeeeeeararararar 20082008200820082008 20092009200920092009 20102010201020102010 20112011201120112011 20122012201220122012GDP 44,80,000 50,18,000 56,20,000 62,94,000 75,52,800Savings @ 21% 9,41,000 10,53,000 11,80,000 13,22,000 15,86,000Equity Inflows @ 5% 47,000 52,600 59,000 66,100 79,300

� Total Household Savings in next 5 years estimated at Rs. 60,82,000 Crs� Current allocation to Equities is 2% of the total household savings.� Equities on tax adjusted basis is still the best savings option� If allocation were to rise to a modest 5% of savings, domestic inflows in equities will be a

staggering Rs 3,04,000 crs

* Sa* Sa* Sa* Sa* Savingvingvingvingvings rs rs rs rs ratatatatate is estimate is estimate is estimate is estimate is estimateeeeed td td td td to go go go go grrrrrooooow in line with the rw in line with the rw in line with the rw in line with the rw in line with the reeeeealalalalal GDP g GDP g GDP g GDP g GDP grrrrrooooowwwwwth rth rth rth rth ratatatatate, we, we, we, we, which is estimathich is estimathich is estimathich is estimathich is estimateeeeed at 8% Cd at 8% Cd at 8% Cd at 8% Cd at 8% CAAAAAGRGRGRGRGR# # # # # ThesThesThesThesThese are are are are are onle onle onle onle only estimaty estimaty estimaty estimaty estimates & aces & aces & aces & aces & actttttualualualualuals mas mas mas mas may vy vy vy vy varararararyyyyy

(Source: www.abnamro.com)

-: 20 :-20

Three Year Sensex EPS Scenario

SENSESENSESENSESENSESENSEXXXXX EPS SCENARI EPS SCENARI EPS SCENARI EPS SCENARI EPS SCENARIOSOSOSOSOSGrGrGrGrGrooooowwwwwththththth 15%15%15%15%15% 20%20%20%20%20% 25%25%25%25%25%FFFFFY07(E)Y07(E)Y07(E)Y07(E)Y07(E) 740P/E 19.619.619.619.619.6FFFFFY08(E)Y08(E)Y08(E)Y08(E)Y08(E) 851 888 925P/E 17.017.017.017.017.0 16.316.316.316.316.3 15.715.715.715.715.7FFFFFY09(E)Y09(E)Y09(E)Y09(E)Y09(E) 979 1066 1156P/E 14.814.814.814.814.8 13.613.613.613.613.6 12.512.512.512.512.5FFFFFY10(E)Y10(E)Y10(E)Y10(E)Y10(E) 1125 1279 1445P/E 12.912.912.912.912.9 11.311.311.311.311.3 10.010.010.010.010.0

Source: Bloomberg, Mkt At 14500 levels

-: 21 :-21

To Recap ……..Why India?

“We came to India forthe costs, stayed for the

quality and are nowinvesting for innovation.”

� Attractive Destination� Sustained economic growth� Higher earning prospects� Skilled Labour advantage� Future global power house A T Kearney FDI

Confidence Index 2005

Jack Welch GeneralElectric

Dan Scheinman, Cisco System Inc.Business Week, August 2005

US Departmentof Commerce

“India is a developedcountry as far as

intellectual capital isconcerned.”

India has among thehighest returns onforeign investment

India is among thethree most attractive

FDI destinations in theworld

By 2032, India will beamong the three largesteconomies in the world

Goldman Sachs

-: 22 :-22

India from a global eye

� “India will become the world’s fifth largest consumer market by 2025.”Mckinsey & Co.

� “Both countries [India and China] will create new world class companies that would becompetitive with companies based in the west.”

Deloitte Research

� "The economic dominance of the US is already over. What is emerging is a world economy.India is becoming a powerhouse very fast.”

Peter Drucker, Management Guru, In Fortune

� "India is not just about IT or business process outsourcing. We see it as an incubator for giantglobal corporations driven by IT strategy."

Prof Warren McFarlan, Senior Associate Dean, Harvard Business School

-: 23 :-23

General Concerns

� High interest rates could impact the consumption and delay capex plans

� Inflation – led by global inflation and supply side constraints

� Rupee appreciation could hurt exports in the short run

� Slow progress on Infrastructure development may create bottle-necks

� Slow progress on Agricultural reforms

� Inequitable growth and inequalities of income

� Local and global geo political risks

� Valuations have little room for negative surprises

-: 24 :-24

Near Term Concerns

� Global market volatility

� Concerns in global economies like US, China

� *Last 3 years has seen earnings of Sensex companies rise by 29% CAGR, much above analystsexpectations and leading to frequent upgrades. From here on, earnings growth is expected tobe more modest.

� A slew of fresh public offerings will suck out money supply that otherwise would have beendeployed in the secondary markets

� Monsoons – delay or below normal can cause concerns

* Souce : J P Morgan Research

-: 25 :-25

Rationale for

Reliance Equity Advantage Fund

-: 26 :-26

Returns vary across sectors… and over timePPPPPeriod endingeriod endingeriod endingeriod endingeriod ending YYYYY o o o o o YYYYY P P P P Perererererffffformancormancormancormancormance (in %)e (in %)e (in %)e (in %)e (in %)SecSecSecSecSectttttorororororsssss FFFFFYYYYY 05-06 05-06 05-06 05-06 05-06 FFFFFYYYYY 06-07 06-07 06-07 06-07 06-07 FFFFFYYYYY 07-08 (Y 07-08 (Y 07-08 (Y 07-08 (Y 07-08 (YTD)TD)TD)TD)TD)Auto 117.7 (10.6) (4.0)Capital Goods 177.3 11.4 15.6Cement 89.4 (0.2) 13.7Financial Services 50.2 20.1 16.2FMCG 113.1 (21.5) 5.0IT 48.2 18.6 (0.2)Media 72.0 62.6 26.4Metals 51.2 3.3 23.8Oil & Gas 55.6 19.6 14.8Pharma 61.4 (5.0) (2.2)Power 32.8 (16.2) 15.3Telecom 99.5 60.4 9.4

Source: Bloomberg

-: 27 :-27

But it is difficult to time the sectors…..

Interim Sectoral performance is often impactedby short-term extraneous events such as:

� political uncertainty

� higher supply of paper

� broad-based sell off in the market

Q o Q Absolute Returns in % for each Financial Year

Source: Bloomberg

-: 28 :-28

Certain stocks are clearly out performers

� Focussing on sectors nullifies individualmanagement excellence

� Some companies may be in mutiple sectors,but may be categorised in an under-performing sector

� Sector leaders often are the best performersand hence one need not invest in all theplayers in the sector

Absolute Performance is considered from 31.03.06 to 25.05.07

Source: Bloomberg

-: 29 :-29

Non-Nifty often spices up the recipe…

� Nifty, by default, can cover only 50 companies.Many good quality large companies are leftout due to constraint on numbers

� Often, the winners of today find place in Niftytomorrow!

� However, these stocks do run a risk of steeperlosses in case of market fall and hence needto be added like ‘spice’.

Absolute Performance is considered from 31.03.06 to 25.05.07

Source: Bloomberg

-: 30 :-30

Reliance Equity Advantage Fund – the basics

� REAF endeavours to give Index plus returns

� Sector weightage of REAF will mirror exactly that of Nifty on a Monthly basis.

� 80% of stocks within each sector will be constituents of Nifty, though not necessarily withtheir Nifty weights

� 20% of stocks can be non-Nifty in each sector to provide the additional Alpha possibilitiesand opportunities

� Flexibility of going short exists, but on a net basis sector weightages will be maintained in linewith Nifty

-: 31 :-31

How will this fund work?SecSecSecSecSectttttororororor AlAlAlAlAllllllocococococation(%)ation(%)ation(%)ation(%)ation(%)Auto 5.26Capital Goods 7.81Cement 2.80Financial Services 12.41FMCG 5.81IT 18.44Media 0.69Metals 8.11Oil & Gas 24.73Pharma 3.62Power 1.24Telecom 9.09Total 100

(as on 25th May, 2007)

Nifty Sector Ratio TableSector weightage of REAF will be maintainedin line with the Nifty sector weightage

Source: Bloomberg

-: 32 :-32

SecSecSecSecSectttttororororor NifNifNifNifNifttttty y y y y WWWWWeighteighteighteighteight REAF REAF REAF REAF REAF AlAlAlAlAllllllocococococationationationationation MMMMMin amt inin amt inin amt inin amt inin amt in MMMMMaaaaax x x x x Amt in non-Amt in non-Amt in non-Amt in non-Amt in non-in the sin the sin the sin the sin the sececececectttttororororor NifNifNifNifNifttttty Sty Sty Sty Sty Stocksocksocksocksocks NifNifNifNifNifttttty Sty Sty Sty Sty Stocksocksocksocksocks

(%) Rs Cr Rs Cr Rs CrAuto 5.3 53 42 11Capital Goods 7.8 78 62 16Cement 2.8 28 22 6Financial Services 12.4 124 99 25FMCG 5.8 58 46 12IT 18.4 184 148 37Media 0.7 7 6 1Metals 8.1 81 65 16Oil & Gas 24.7 247 198 49Pharma 3.6 36 29 7Power 1.2 12 10 2Telecom 9.1 91 73 18TTTTToooootttttalalalalal 100.0 100.0 100.0 100.0 100.0 1,000 1,000 1,000 1,000 1,000 800 800 800 800 800 200 200 200 200 200

How will this fund work?Assuming a corpus of Rs 1000 crs in REAF, the following will be the minimum and maximumallocation to the nifty and non-nifty stocks:

Source: Bloomberg Sector Ratio is derived as on 25.05.07

-: 33 :-33

How will this fund work?IT sector’s weightage in Nifty is 18.4%Assuming a corpus of Rs 1000 crs in REAF, the following will be the scenariosScenario I: Replicating Nifty Stock Weightage as is

SecSecSecSecSectttttororororor N N N N Nameameameameame WWWWWeighteighteighteighteightagagagagageeeee Amt. InAmt. InAmt. InAmt. InAmt. Invvvvvestestestestesteeeeeddddd StStStStStocksocksocksocksocks WWWWWeighteighteighteighteightagagagagage %e %e %e %e %HCL Tech 1Infosys 6

IT 18.4 Rs 184 crs Satyam Computers 1.4TCS 6Wipro 4

This is just an illustration for understanding purpose

-: 34 :-34

How will this fund work?Scenario II: 80% in Nifty Stocks & 20% in Promising Non Nifty Stocks

SecSecSecSecSectttttororororor N N N N Nameameameameame WWWWWeighteighteighteighteightagagagagageeeee Amt. InAmt. InAmt. InAmt. InAmt. Invvvvvestestestestesteeeeeddddd StStStStStocksocksocksocksocks WWWWWeighteighteighteighteightagagagagage %e %e %e %e %HCL Tech 2Infosys 5

IT 18.4 Rs 184 crs Wipro 3TCS 5Tech Mahindra* 3.4

*Not a constituent of Nifty index

80%

20%


-: 35 :-35

How will this fund work?Scenario III: 80% net in Nifty Stocks with short positions & 20% in promising Non Nifty Stocks

SecSecSecSecSectttttororororor N N N N Nameameameameame WWWWWeighteighteighteighteightagagagagageeeee Amt. InAmt. InAmt. InAmt. InAmt. Invvvvvestestestestesteeeeeddddd StStStStStocksocksocksocksocks WWWWWeighteighteighteighteightagagagagage %e %e %e %e %Infosys 6Satyam Computers 4

IT 18.4 Rs 184 crs TCS 6Wipro -1Tech Mahindra* 3.4


80%

20%


-: 36 :-36

How will this fund work?Summary of three scenarios

ScScScScScenario 1enario 1enario 1enario 1enario 1 ScScScScScenario 2enario 2enario 2enario 2enario 2 ScScScScScenario 3enario 3enario 3enario 3enario 3

SecSecSecSecSectttttororororor WWWWWeighteighteighteighteightagagagagageeeee AmountAmountAmountAmountAmount StStStStStocksocksocksocksocks AAAAAs in NIFTs in NIFTs in NIFTs in NIFTs in NIFTYYYYY % % % % % 80% NIFT80% NIFT80% NIFT80% NIFT80% NIFTYYYYY & & & & & ScScScScScenario 2 withenario 2 withenario 2 withenario 2 withenario 2 withInInInInInvvvvvestestestestesteeeeeddddd 20% Non-NIFT20% Non-NIFT20% Non-NIFT20% Non-NIFT20% Non-NIFTYYYYY shorshorshorshorshortingtingtingtingting

HCL Tech 1 2 0

Infosys 6 5 6

IT 18.4 Rs 184 Crs Satyam 1.4 0 80% 4 80%

TCS 6 5 6

Wipro 4 3 -1

Tech Mahindra* 0 3.4 20% 3.4 20%



-: 37 :-37

Difference between REAF and Index fund

IndeIndeIndeIndeIndex Fx Fx Fx Fx Fundundundundund RRRRReliancelianceliancelianceliance Ee Ee Ee Ee Equitquitquitquitquity y y y y AdAdAdAdAdvvvvvantantantantantagagagagage Fe Fe Fe Fe Fundundundundund

It exactly mirrors the Index. It will endeavor to replicate the sector allocationof the S&P CNX Nifty

It does not take a stock call or view It will definitely take stock call and view

It does not invest at all in non-index stocks It will invest upto 20% in non-Nifty stocks

It is a completely passive fund It will be an actively managed fund.

The only thing is, it will endeavor to replicatethe sector allocation of the S&P CNX Nifty.

-: 38 :-38

How is this fund different?

CCCCCatatatatategegegegegorororororyyyyy DivDivDivDivDivererererersifsifsifsifsifieieieieieddddd IndeIndeIndeIndeIndex Fx Fx Fx Fx Fundsundsundsundsunds RRRRReliancelianceliancelianceliance Ee Ee Ee Ee EquitquitquitquitquityyyyyEEEEEquitquitquitquitquity Fy Fy Fy Fy Fundsundsundsundsunds AdAdAdAdAdvvvvvantantantantantagagagagage Fe Fe Fe Fe Fundundundundund

Sector Alpha � × ×

Stock Alpha � × �

Shorting �/× × �

-: 39 :-39

The path ahead for investors

� Last four years has been a golden period for equity investors� Good mutual funds have significantly outperformed the benchmark

If Rs 1 lac each was invested in Reliance Growth Fund, Reliance Vision Fund & the benchmarkBSE 100 respectively on 2nd June 03, it would have grown to Rs 8,60,508 in Reliance GrowthFund, Rs 6,37,177 in Reliance Vision Fund & Rs 4,52,785 in BSE 100 as on 31st May 07.

� Major reasons for the phenomenal alpha returns have been� Markets moving from deep under valuation to fair valuation� Under researched mid-caps provided excellent investment opportunities� Growing economy and cheaper capital access providing huge opportunities to companies

both large and small� Thus it made sense to invest total equity allocation in long only vanilla funds and enjoy the

fruits of fabulous returns

PPPPPast Past Past Past Past Perererererffffformancormancormancormancormance mae mae mae mae may ory ory ory ory or ma ma ma ma may noy noy noy noy not be sustt be sustt be sustt be sustt be sustaineaineaineaineained in the fd in the fd in the fd in the fd in the futututututururururure. e. e. e. e. To arrive at the value of investments, NAVs of Growth Options havebeen considered (Inception Date: 8th Oct 1995) Calculations assume that all payouts during the period have been reinvested in theunits of the scheme at the then prevailing NAV. Value of scheme investments and Benchmark Index are on compounded annualisedbasis. Please refer slide 40 for scheme performance

-: 40 :-40

Performance of Reliance Growth Fund &Reliance Vision Fund

PPPPPast Past Past Past Past Perererererffffformancormancormancormancormance mae mae mae mae may ory ory ory ory or ma ma ma ma may noy noy noy noy not be sustt be sustt be sustt be sustt be sustaineaineaineaineained in the fd in the fd in the fd in the fd in the futututututururururure.e.e.e.e. Compounded annualized returns of Growth Option as on 31.05.07(Inception Date: 8th Oct 1995) Calculations assume that all payouts during the period have been reinvested in the units of thescheme at the then prevailing NAV.

-: 41 :-41

The path ahead for investors

� Markets have been maturing over the last one year

� Stocks – large and mid-caps are fairly well researched

� Valuations are fair and no low hanging fruits are available

� Timing the markets is going to be difficult

� Time to change the strategy and focus on long-term investment for wealth creation. Alsodiversification a must to minimise risk.

-: 42 :-42

The Path ahead for investorsFocus on asset allocation� One should not look at timing the market and at short term investments but focus more on

asset allocation - both across asset classes as also within each asset class.

� Therefore on a diversification perspective, index-plus funds complement, and not competewith the other equity funds in one’s portfolio.

EEEEEquitiesquitiesquitiesquitiesquities

BondsBondsBondsBondsBonds

RRRRReeeeealalalalal E E E E Estststststatatatatateeeee

OthersOthersOthersOthersOthers

LargLargLargLargLarge Ce Ce Ce Ce Capapapapap

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Product Features

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Reliance Equity Advantage FundProduct Features

Investment Objective

The primary investment objective of the scheme is to seek to generate capital appreciation &provide long-term growth opportunities by investing in a portfolio predominately of equity &equity related instruments with investments generally in S & P CNX Nifty stocks and the secondaryobjective is to generate consistent returns by investing in debt and money market securities.

Benchmark Index – S&P CNX Nifty

Plans Available: With Retail & Institutional Plan. Each having following;

� Growth Plan with Growth option & Bonus option

� Dividend Plan with Dividend Payout option & Dividend reinvestment option

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Reliance Equity Advantage FundAsset Allocation

*Including upto 25% of the corpus In Securitized Debt. An overall limit of 100% of the portfolio value (i.e. net assetsincluding cash) has been introduced for the purpose of equity derivatives in the scheme, however the same is thenotional value and it will be seen that, the notional value of the net exposure to derivatives will not exceed the fundcorpus at any point of time. Notional value shall mean value of Futures or notional value of the Options.

Minimum Application Amount

� Retail Plan: Rs 5000 and in multiples of Re. 1 thereafter

� Institutional Plan: Rs. 5 crore in multiples of Re. 1 thereafter

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Equity and Equity related Securities 70% to 100% Medium to High

Debt and Money market securities(including investments in securitised debt*) 0% to 30% Low to Medium

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Reliance Equity Advantage FundLoad Structure: (During the New Fund Offer and continuous offer including SIP)

Entry Load

Plans Entry Load

Retail Plan 2.25%

Institutional Plan Nil

Exit Load

Retail Plan : For investments made during the NFO and ongoing basis –

� 1% if redeemed/switched on or before completion of 6 months from the date of allotment.

� 0.5% if redeemed/switched between 6 months & before completion of 1 year from the dateof allotment.

� Nil if redeemed/switched after completion of 1 year from the date of allotment.

Institutional Plan : Nil

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Reliance Equity Advantage Fund� SIP/Trigger/STP/SWP/DTP/Switch/Nomination: Available

� Reliance Any Time Money Card : It shall be issued only to investors subscribing in this fundthrough Self Cheque

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NFO opens on : 12th June 2007NFO closes on : 10th July 2007

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Investment Objectives• Reliance Growth Fund aims to achieve long term growth of capital by investment in equity

and equity related securities through a research based investment approach.

• Reliance Vision Fund aims to achieve long term growth of capital by investment in equity andequity related securities through a research based investment approach.

• Reliance Equity Fund: The primary investment objective of the scheme is to seek to generatecapital appreciation & provide long-term growth opportunities by investing in a portfolio constitutedof equity & equity related securities of top 100 companies by market capitalization & of companieswhich are available in the derivatives segment from time to time and the secondary objective isto generate consistent returns by investing in debt and money market securities.

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Risk FactorsStStStStStatatatatatutututututororororory Dety Dety Dety Dety Detailailailailails: Sponsor: s: Sponsor: s: Sponsor: s: Sponsor: s: Sponsor: Reliance Capital Limited. TTTTTrustrustrustrustrustee: ee: ee: ee: ee: Reliance Capital Trustee Co. Limited. InInInInInvvvvvestment Mestment Mestment Mestment Mestment Managanaganaganaganager:er:er:er:er: Reliance Capital AssetManagement Limited. StStStStStatatatatatutututututororororory Dety Dety Dety Dety Detailailailailails: s: s: s: s: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.Reliance Equity Advantage Fund: An open-ended Diversified Equity Scheme

InInInInInvvvvvestment Objecestment Objecestment Objecestment Objecestment Objectivtivtivtivtive:e:e:e:e: The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growthopportunities by investing in a portfolio predominately of equity & equity related instruments with investments generally in S & P CNX Nifty stocks andthe secondary objective is to generate consistent returns by investing in debt and money market securities. AAAAAsssssssssset et et et et AlAlAlAlAllllllocococococation:ation:ation:ation:ation: 1. Equity and Equityrelated Securities - 70% to 100%, 2. Debt and Money market securities (including investments in securitised debt) - 0% to 30% (Including upto25% of the corpus In Securitized Debt. An overall limit of 100% of the portfolio value has been introduced for the purpose of equity derivatives in thescheme.) TTTTTerms oferms oferms oferms oferms of Issue: Issue: Issue: Issue: Issue: The units are available at the face value of Rs. 10/- per unit plus applicable entry load during the New Fund Offer Period.The AMC will calculate and disclose the first NAV not later than 30 days from the closure of New Fund Offer Period. Subsequently, the NAV will becalculated at the close of every working day and shall be published in two daily newspapers. LLLLLoad Strucoad Strucoad Strucoad Strucoad Structttttururururure: e: e: e: e: (For NFO and Continuous Offer includingSIP) Entry Load: Retail Plan: 2.25%, Institutional Plan: Nil, Exit Load: Retail Plan: For investments made during the NFO and ongoing basis – 1% ifredeemed/switched on or before 6 months from the date of allotment; 0.5% if redeemed/switched between 6 months & before completion of 1 yearfrom the date of allotment; Nil if redeemed/switched after completion of 1 year from the date of allotment. Institutional Plan: Nil

GENERALGENERALGENERALGENERALGENERAL RISK RISK RISK RISK RISK F F F F FAAAAACCCCCTTTTTORS:ORS:ORS:ORS:ORS: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that theobjectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or downdepending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the futureperformance of the Scheme. Reliance Equity Advantage Fund is only the name of the Scheme and does not in any manner indicate either the qualityof the Scheme; it's future prospects or returns. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyondtheir initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. The Mutual Fundis not guaranteeing or assuring any dividend/ bonus. The Mutual Fund is also not assuring that it will make periodical dividend/bonus distributions,though it has every intention of doing so. All dividend/bonus distributions are subject to the availability of the distributable surplus in the Scheme. Fordetails of scheme features apart from those mentioned above and scheme specific risk factors, please refer to the provisions of the offer document.Offer Document and KIM cum application form is available at all the DISCs/ Distributors of RMF/www.reliancemutual.com. PlPlPlPlPleeeeeasasasasase re re re re reeeeead the ofad the ofad the ofad the ofad the offfffferererererdocument cdocument cdocument cdocument cdocument carararararefefefefefulululululllllly befy befy befy befy befororororore ine ine ine ine invvvvvestingestingestingestingesting. . . . . The information contained herein has been obtained from sources published by third parties. While suchpublications are believed to be reliable, however, neither the AMC, the Trustees, the Fund nor any of their affiliates or representatives assume anyresponsibility for the accuracy of such information."

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Thank you

Product/PPT/REAF/ver 1.0/7 June 07

Reliance Equity Advantage Fund Presentation

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