Select Equity Funds- Stock Selection and Investment Process

1. Select Equity Funds - As filed with regulator

1.1.Structure:
The fund will invest significant amount in equity and equity linked
instruments specifically excluding company predominantly dealing in Gambling,
Lotteries/Contests, Animal Produce, Liquor, Tobacco, Entertainment (Films, TV
etc) Hotels, and Banks and financial institutions.

The cash money market holding of the fund will be kept below 40% of the fund or
according to the prevailing regulatory guidelines at each point of time.

1.2. Objective:

The primary investment objective of the fund is to provide income distribution

over a period of medium to long term while at all times emphazing the
importance of capital appreciation.

1.2. Asset Allocation:

Asset Category Asset Allocation Range Target

Equity and Equity Linked 60% to 100% 100%
Instrument
Cash/Money Market 0% to 40% 0%
Instrument

2. Funds Philosophy

We would benchmark our fund (i.e. invest in stocks) which are complaint as per
CNX S&P Nifty 500 Shariah Index, PIE Index (Parsoli Islamic Equity Index) and
list of stock which are compliant as per Parsoli Corporation.

Parsoli Corporation Ltd is a public limited company listed on the Bombay Stock
Exchange Ltd. Parsoli is also a corporate member of National Stock Exchange of
India Ltd. And the Bombay Stock Exchange Ltd. , providing stock broking and
stock advisory services to its client. Parsoli Corporation Ltd. Tracks and
publishes the stock which are Shariah Compliant and has launched PIE as
Shariah index for tracking Indian Stock Market. They have Shariah board for
screening the companies which are updated and published on quarterly basis.
There are more than 1000 stock which are Shariah compliant as per Parsoli. We
would be receiving the list of stock from Parsoli on a weekly basis. TATA AIG Life
would be signing an agreement with Parsoli Corporation Ltd. receipt of Shariah
compliant stocks.

The S&P CNX Nifty Shariah includes the largest and most liquid companies
listed on the National Stock Exchange. The S&P CNX Shariah 500 Index covers
more than 90% of the total market capitalization and more than 80% of total
traded volume on the National Stock Exchange and consists of 250 stocks. We
would be receiving the list of stocks from them on a daily basis. Tata AIG Life
would be signing an agreement with IISL for the period of 2 years. Enclosed is
the list for your quick reference.

3. Summary of list of common stocks

Indices Stocks(#)
S&P CNX Nifty Shariah+ S&P CNX 250
500 Shariah
Parsoli Corporation Ltd. 1134

Common Stock 220+ (exact number will be validated

based on updated list)

4. Do’s and Don’ts for Select Equity Fund

4.1. Do’s for Select Fund

4.1.1. Invest in company stocks which are common and Shariah compliant
as per S&P Shariah indices and Parsoli Corporation Ltd.

4.2.2. The list of companies which are Shariah compliant would be

received as per section 2 and updated in our records on monthly basis.

4.1.3. Action as per section 5 in case of changes in the list of stocks

4.1.4. Invest in cash and near cash securities in case of surplus cash
available (If suitable investment opportunity is not available) (This point
will be further validated with Parsoli)
4.2. Don’ts for Select Fund

4.2.1. Do not invest in companies which has business activities related to

pork(Animal Produce) , Alcohol, Tobacco, Gambling, Pornography, Banks,
Financial Institutions, Entertainment (Films, TVs etc.) and Hotels.

4.2.2. Do not invest in companies where financial ratio of companies is as below

4.2.2.1. Debt/Market Value of the Equity (12 month average) <33%

4.2.2.2. Account receivable/ Market Valve of the Equity (12 month

average) <49%

4.2.2.3. Cash + Interest bearing securities / Market Value of Equity (12

month average) <33%

The above can be factored by ensuring investment only in the common stocks as
per section 3

5. Changes in list of common stocks

5.1. Addition of new stock

Investment can be made in this company stock based on the fund manager view
on the company

5.2. Deletion of existing stock

5.2.1. No investment made in the company

The stock should be removed from the ingestible stock and no future
investment should be made in stock till the stock is again in future.

5.2.2. Investment made in the company

No fresh investments to be made in this company .As regards existing
investment the fund manager can retain the investment and book the profit/loss
based on investment view. However it is recommended to exit the stock over the
period of
1 to 3 years (this point will be further validated with Parsoli)
6. Communication to Customers
The select Fund would be available to all channels of Tata AIG Life Customers
and will have an option to choose the fund based on their discretion.

In case the customer opts for select fund the confirmation on whether the fund is
Shariah compliant will not be given by Tata AIG Life. However Parsoli
Corporation Ltd. At their discretion may confirm the same to its customers.

In case the customer decides to switch-out of the fund, the same will be
performed as per normal process of Tata AIG Life.

7. Annexure

a) S&P CNX Shariah Indices Stock Details.