DEBT AND LIQUID SCHEMES KEY INFORMATION MEMORANDUM Face value of units @ Rs.

10/-

OPEN ENDED LIQUID SCHEME Peerless Liquid Fund (PLF) OPEN ENDED DEBT SCHEME Peerless Ultra Short Term Fund (PUSTF) Peerless Income Plus Fund (PIPF) Peerless Short Term Fund (PSTF) TRUSTEE Peerless Trust Management Co. Ltd. SPONSOR The Peerless General Finance and Investment Company Ltd. INVESTMENT MANAGER Peerless Funds Management Co. Ltd.
Registered & Corporate Office : Peerless Mansion, 1 Chowringhee Square, Third Floor, Kolkata - 700 069, Tel. 033 40185000 Fax: 033 4018 5010

Investments & Operations Office : Gr Floor, Churchgate Chambers, Sir Vithaldas Thackersay Marg, New Marine Lines, Mumbai - 400 020 Tel. 022 6177 9999. Email: connect@peerlessmf.co.in Website : www.peerlessmf.co.in

This Key Information Memorandum (KIM) sets forth the information which a prospective investor ought to know before investing. For further details of the Scheme/Mutual Fund, due diligence certificate by the AMC, Key Personnel, Investors rights & services, risk factors, penalties & pending litigations etc. Investors should, before investment, refer to the Scheme Information Document and Statement of Additional Information available free of cost at any of the Investor Service Centres or distributors or from the website www.peerlessmf.co.in .The scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI) . The units being offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM. This KIM is dated 8 November 2011.

NB: Data and information shall be up to date and in no case older than 30 days from the date of KIM

PEERLESS MUTUAL FUND Features of the Schemes INVESTMENT OBJECTIVE Peerless Liquid Fund To provide a high level of liquidity with reasonable returns commensurating with low risk through a portfolio of money market and debt securities. However, there can be no assurance that the investment objective of the scheme will be achieved. The Scheme does not assure or guarantee any returns. Peerless Ultra Short The investment objective is to provide optimal returns and liquidity to the investors by Term Fund investing primarily in a mix of money market and short term debt instruments which results in a portfolio having marginally higher maturity as compared to a liquid fund at the same time maintaining a balance between safety and liquidity. However, there can be no assurance that the investment objective of the scheme will be achieved. The Scheme does not assure or guarantee any returns. Peerless Income Plus To generate regular income through a portfolio of predominantly high quality fixed Fund income securities and with a marginal exposure to equity and equity related instruments. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns. Peerless Short Term The Scheme seeks to generate income and capital appreciation by investing in a Fund diversified portfolio of debt and money market securities. However, there can be no assurance that the investment objective of the scheme will be achieved. The Scheme does not assure or guarantee any returns. ASSET ALLOCATION PATTERN OF THE SCHEME(S) Scheme Type of Instruments Indicative Allocation (% of Net Assets) Minimum Maximum Risk Profile High / Medium / Low Low

Peerless Liquid Fund

Money market instruments (including cash 60 100 Repo, CPs, CDs Treasury Bills and Govt.Securities) with maturity/residual maturity Up to 91 days Debt instruments (including floating rate 0 40 Low to debt investment and securitized debt) with Medium maturity/Residual maturity/weighted average maturity Up to 91 days. Peerless Ultra Short Money market & Debt Instruments with 70 100 Low Term Fund maturity/average maturity / residual maturity/interest rate resets less than or equal to 1 year Debt instruments (including floating rate 0 30 Low to debt Instruments and securitized debt*) Medium with maturity/Residual maturity / residual maturity / interest rate resets greater than 1 year Securitized debt cumulative allocation not to exceed 25% of the net assets of the scheme (excluding foreign securitized debt). Investment in Derivatives-up to 50% of net assets. Peerless Income Plus Debt & Money market instruments 80 98 Low to Fund Medium Equity and Equity Related Instruments 2 20 High and/ or Units of equity mutual fund schemes Peerless Short Term Money market instruments(including cash, 25 100 Low to Fund CBLO, repo, CPs, CDs, Treasury Bills and Medium Government securities) with maturity/residual maturity up to 1 year Debt instruments (including floating rate 0 75 Medium debt instruments and securitized debt)* with residual maturitygreater than 1 year. (Maximum maturity of any instrument would not be greater than 3 years). Securitized debt cumulative allocation not to exceed 25% of the net assets of the scheme (excluding foreign securitized debt).

Investment in Derivatives-up to 50% of net assets of the scheme. The Fund shall not take any leveraged position. The total investments in the Fund including investment in equities , debt , money market and other securities and gross exposure of derivatives , if any, shall not exceed the net assets under management in the scheme. The Scheme(s) can invest up to 50% of net assets in Foreign Securities. In case of deviation from the above asset allocation pattern, the portfolio would be rebalanced within 1 month from the date of deviation. Details pertaining to the same are mentioned under HOW WILL THE SCHEME ALLOCATE ITS ASSETS in Scheme Information Document of the Scheme. The average maturity for the fund will be in the range of 12-60 months for PIPF, 12-36 months for PSTF and 1-3 months for PLF & PUSTF depending on the interest rate view. INVESTMENT STRATEGY Peerless Liquid Fund The Fund shall be managed according to the Investment Objective - to generate reasonable returns commensurate with the low risk of the portfolio. This scheme is positioned to meet the needs of those investors who want to deploy their funds for a short period of time with the least amount of risk. The returns would match the levels of risk taken in the portfolio. The composition of the Indian Debt market (both the primary and secondary) is dominated by money market instruments in the short end of the yield curve and by medium and long term bonds and debentures in the long end of the curve. Since the objective of the scheme is to generate reasonable returns with the least commensurate risk, the scheme would predominantly invest in money market instruments. As the turnover of the portfolio would be high, given the fact the investors in a liquid fund would deploy their funds for a short period of time, the portfolio would be structured to incorporate high liquidity b the use of cash and cash equivalents. The yield curve in the short end (overnight to 3 months) of the curve tends to remain flat with the least amount of volatility. In such a scenario, the fund manager would make attempts to invest the scheme proceeds uniformly across all the maturity buckets. The investment team would carry out rigorous in depth credit evaluation of the money market and debt instruments the scheme proposes to invest in. The credit evaluation will essentially be a bottom up approach and include a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. Debt Investment Strategy The risk return profile of this fund positions it in between a liquid fund and short term income fund. The portfolio strategy seeks to increase yield by having a marginally higher maturity and moderately higher credit risk as compared to a liquid fund while maintaining a balance between safety and liquidity (applicable only for PUSTF). The Fund Manager would seek to enhance returns by trading on the shape of the yield curve {overnight, short to medium} and also on the differentiated premium offered by the market to different issuers of debt. For example the spread between a 1 year instrument issued by a bank, a NBFC, a manufacturing concern and a broking company can vary from 100 bps to 500 bps. But it has to be understood that there would be a trade off in terms of their respective liquidity. As the Funds objective to maximize returns without compromising on safety and liquidity, the portfolio would be constructed with a judicious mix of instruments issued by the universe of eligible issuers across the spectrum. Portfolio maturity is determined after analyzing the macro-economic environment including future course of system liquidity, interest rates and inflation along with other considerations in the economy and markets. The Investment Strategy would be a combination of Top Down and Bottom Up approach for investments. The Top Down approach would entail: 1) 2) Study of the current state of the economy Study of the current inflationary trends in the economy and the resultant effect on yields and interest rate movement in the debt market. Study of the liquidity flows in the system.

Peerless Ultra Short Term Fund Peerless Income Plus Fund Peerless Short Term Fund

3)

These studies would help the Fund Manager determining the duration call one has to take during portfolio construction. The Bottom up approach would entail: 1) Along with above mentioned top-down approach, we would also adopt a bottomup approach for identifying investment opportunities in individual companies Management evaluation, corporate governance, industry analysis, business analysis, past track record, future plans, projections, expected returns and valuations would be some of the key points while choosing a company.

2)

Based on the above approaches, a Debt Investment Universe would be constructed. This would be the base for portfolio construction. Sovereign Debt. i.e. Central Govt. Securities and State Govt. Securities would also be part of the investment universe. Investment in them would take place in accordance to the schemes objectives. The Fund is likely to have higher maturity than a liquid fund, which means the Fund may have higher allocation to 3-6 months instruments and also some allocation towards instruments with more than 1 year maturity(applicable only for PUSTF). As a result, the Fund stands to expose to market risk which can get captured partially by mark to market component thereby inducing a potential daily volatility. Also, the Fund will have a mix of credits with a moderately higher credit risk as compared to a liquid fund. The Fund will always aim at controlling risk by carrying a rigorous credit evaluation of the instruments proposed to be invested in. The credit evaluation will be carried out on the basis of the parameters mentioned above. On a relative basis, the alpha to the portfolio will be generated by managing the interest rate risk across different asset classes and duration buckets, as compared to trading the credit curve. Equity Investment Strategy & Investment Process The Scheme would invest in an actively managed diversified portfolio of equity and equity related instruments. Companies that are attractive and have good long term growth potential would be chosen out of the stock universe. The investment would not have any bias of sector or market capitalization. The fund manager would follow a strategy which will be a combination of top down and bottoms up approach. Under the top down process, the fund manager would look at various themes and sectors that have potential high growth or core sectors influencing the economy. A macro-economic view and global view is also taken into consideration for this process. On identification of themes and sectors, bottoms-up process is initiated to identify investment opportunities in individual stocks. Stocks would be identified based on company and business analysis, industry analysis, future plans, projections, technical analysis and valuations. Based on analysis of various financial and non-financial parameters, the stocks are finally shortlisted for portfolio construction process. Apart from in-house research, external research is used as an important source of information. Various magazines, journals, newspapers and databases also help in the research process. Portfolio Construction The fund manager has the primary responsibility for portfolio construction based on the investment objective of the Scheme. Portfolio construction guidelines are laid down for each fund and reviewed on a need basis. Every investment decision we make is by keeping in mind the investment objective of the Scheme and how the security will affect the overall portfolio. In addition, we also look into the current Macroeconomic / Industry views that impact industry and asset allocation decisions for the fund. Technical views which are relevant to asset allocation, if applicable are also taken into consideration. Our focus would be on long term investing driven by fundamental research. However, we would also keep an eye on short-term performance and analyze the same.

Peerless Income Plus Fund

Steps

Idea Generation

Investment Process Idea Screening Discussion of Ideas

Asset (Sector) Allocation

Portfolio Construction

Proces s

Screen the broad Discussion of Broad Portfolio list based on short listed weights Construction various stocks with based on would be Qualitative and the Top Down based on Quantitative Committee & Approach sector factors to arrive at its approval. allocation, Prospective stock view and Investment valuations. Universe. Details Create a list Key points: A stock report Focus on Key points: Portfolio of stocks with Management to be themes / Sector Monitoring minimum Evaluation, prepared for sectors for Allocation, and criteria based Corporate discussion of macro Company Performan on Revenues Governance, the short allocation. Financials, ce Review / Market Cap Industry Analysis, listed idea, so macro Future Growth of the / Profits etc. Company / as to include it economic Prospects, scheme at Business in Investment and global Liquidity, periodic Analysis, Future Universe. view also to Technical View intervals. Plans, Projections be taken. and and Expected Valuations. Returns. RISK PROFILE OF THE SCHEME(S) Peerless Liquid Fund Mutual Fund units involve investment risks including the possible loss of principal. Please read the SID carefully for details on risk factors before investment. Peerless Ultra Short Term Fund Scheme specific Risk Factors are summarized below: Peerless Income Plus Fund The scheme carries risks associated with investing in debt and money market securities, derivatives, foreign securities, securitized debt, short selling and securities lending. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, Peerless Short Term liquidity risk and default risk. Trading volume may restrict liquidity. The AMC may Fund choose to invest in unlisted securities which may increase the risk on the portfolio. Also the value of the Scheme investments may be affected by currency exchange rates, changes in law/policies of the government, taxation laws and political, economic or other developments. Investments in debt and money market instruments are subject to interest rate risk, re-investment risk, basis risk, credit risk, spread risk, repayment risk etc. Please refer to the SID for further details. RISK MANAGEMENT STRATEGIES Risk associated with Fixed Income Securities - PLF, PUSTF, PIPF and PSTF The Asset Management Company has incorporated risk management as part of the investment process. The Investment Team has ensured adequate safeguards are taken during the investment and portfolio construction process. The following are the key risks associated with investments in Fixed Income Securities and the strategy adopted by the AMC in addressing these key risks. Interest Rate Risk The modified duration of a portfolio is one of the means Fixed income securities such as government bonds, of measuring the interest rate risk of the portfolio. Higher corporate bonds, Money Market Instruments and is the modified duration, the fund stands exposed to a Derivatives run price-risk or interest rate risk. higher degree of interest rate risk. The Fund Manager Generally, when interest rates rise, prices of existing would decide on the modified duration to be maintained fixed income securities fall and when interest rates for the portfolio at a particular point of time after taking drop, such prices increase. The extent of fall or rise in into account the current scenario and the investment the prices depends upon the coupon and maturity of objective of the scheme. The portfolio duration will be the security. It also depends upon the yield level at decided after doing a thorough research on the general which the security is being traded macroeconomic condition, political environment, systemic liquidity, inflationary expectations, corporate performance and other macro economic considerations. The Investment Committee of the AMC would be monitoring the portfolios constantly and would be giving direction regarding portfolio modified duration to the Fund Manager. The Investment Team would follow a bottom up approach to create a debt investment universe. The

Filter entire stock universe (and build a broad list of stocks that can be screened)

Risk and Portfolio Monitorin g Portfolio Monitoring and Performan ce Review.

Credit Risk This is the risk associated with the issuer of a

debenture/bond or a Money Market Instrument defaulting on coupon payments or in paying back the principal amount on maturity. Even when there is no default, the price of a security may change with expected changes in the credit rating of the issuer. It is to be noted here that a Government Security is a sovereign security and is the safest. Corporate bonds carry a higher amount of credit risk than Government Securities. Within corporate bonds also there are different levels of safety and a bond rated higher by a particular rating agency is safer than a bond rated lower by the same rating agency Liquidity Risk The liquidity of a bond may change, depending on market conditions leading to changes in the liquidity premium attached to the price of the bond. At the time of selling the security, the security can become illiquid, leading to loss in value of the portfolio.

investment team would carry out rigorous in depth credit evaluation of the money market and debt instruments the scheme proposes to invest in. The credit evaluation will essentially be a bottom up approach and include a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. Data from external Credit Rating Agencies like Crisil, ICRA, Fitch and CARE would be taken into account while constructing this universe. This universe would be constantly monitored by the Investment Committee which would recommend any additions/deletions from the investment universe . The Fund Manager would maintain adequate cash/cash equivalent securities to manage the day to day redemptions of the fund. Attention would be given to the historic redemption trends while deciding on the cash equivalent component of the portfolios. Also the Fund Manager and Dealer would be keeping track of various securities being traded in the market and would strive to keep the component of illiquid securities in the portfolio at a low percentage of the total portfolio. Investment Universe to be created based on qualitative and quantitative factors so as to select good quality companies. Detailed research to be done to come out with a fair value for a company. To invest across the market capitalization spectrum and industries and sectors. No sector or market cap bias. To control liquidity at the portfolio construction stage

Risk associated with Equities -PIPF Quality Risk :Risk of investing in unsustainable / weak companies Price Risk Risk of overpaying for a stock Concentration Risk

Liquidity Risk High Impact Costs Volatility Risk To monitor overall portfolio volatility and control risk Price Volatility due to company or portfolio specific class/stock/sector exposures as required. factors Event Risk Understand businesses so. as to respond to events Price risk due to company or sector specific event effectively and speedily Macro Risk / Market Event Risk Understand macroeconomic and global events so as to Price Risk due to macro environment factors or respond quickly and effectively to uncertain events. market specific factors impacting the overall market sentiment. The Investment Committee of the AMC would be acting in a proactive manner to identify and analyze potential risks and act in a preventive manner to contain those risks. PLANS AND OPTIONS Peerless Liquid Fund Peerless Ultra Short Term Fund

Plans: Super Institutional and Retail. Options: The Scheme would offer Growth and Dividend Option. Institutional option for Liquid Fund Sub-Options: The Dividend Option would provide the following sub-options: Daily (Reinvestment), Weekly (Payout and Reinvestment), Monthly (Payout and Reinvestment). If Dividend payable under Dividend Payout option (Weekly Option) is equal to or less than Rs.25,000, then the Dividend would be compulsorily reinvested in the option of the Scheme. Default option: Growth Option, Default between payout & Reinvestment Option: Reinvestment Option, Default Dividend: Frequency- Daily Plans: Nil Options: Growth and Dividend Option (Payout and Re-investment)

Peerless Income Plus Fund Peerless Short Term Fund

Sub Options for Dividend: Monthly (Payout and reinvestment) Quarterly (Payout and reinvestment) If Dividend payable under Dividend Payout option is equal to or less than Rs. 500/then the Dividend would be compulsorily reinvested in the option of the Scheme.

Default option : Growth Option Default between payout & Reinvestment Option: Reinvestment Option Default Dividend Frequency- Quarterly Option APPLICABLE NAV (for repurchase and sale) Peerless Liquid Fund Subscriptions/Purchases including Switch-Ins for liquid schemes (PLF): Peerless Ultra Short a) Where the application is received upto 2.00 pm on a Business Day and funds are Term Fund available for utilization before the cut-off time, the closing NAV of the day immediately Peerless Income Plus preceding the day of receipt of application. Fund b) Where the application is received after 2.00 pm on a Business Day and funds are Peerless Short Term available for utilization on the same day, the closing NAV of the day immediately Fund preceding the next Business Day. c) Irrespective of the time of receipt of application, where the funds are not available for utilization before the cut-off time, the closing NAV of the day immediately preceding the day on which the funds are available for utilization. Allotments for purchases in PLF as well as switch-ins from other Schemes of the Fund into PLF are subject to receipt of valid application / switch-in request, credit of entire subscription / switch-in amounts in PLF and funds available for utilization within the relevant cut-off time specified above. Subscriptions/Purchased including Switch-Ins for debt schemes (PUSTF, PSTF, PIPF): 1) where the application is received upto 3.00 pm with a local cheque or demand draft payable at par at the place where it is received closing NAV of the day of receipt of application; 2) where the application is received after 3.00 pm with a local cheque or demand draft payable at par at the place where it is received closing NAV of the next Business Day ; and 3) where the application is received with an outstation cheque or demand draft which is not payable on par at the place where it is received closing NAV of day on which the cheque or demand draft is credited. 4) In respect of purchase of units with amount equal to or more than Rs.1 crore, irrespective of the time of receipt of application, the closing NAV of the day on which the funds are available for utilization shall be applicable. Allotments in respect of purchases in above Schemes / switch-ins from other Schemes of the Fund into above schemes with an amount equal to or more than Rs.1 crore are subject to receipt of valid application / switch-in request, credit of entire subscription / switch-in amounts in relevant schemes account and funds available for utilization by the relevant schemes within relevant cut-off time being 3.00 pm. Redemption including Switch-outs: a) In respect of valid applications received upto 3.00 p.m. the closing NAV of the day immediately preceding the next Business Day. b) In respect of valid applications received after 3 p.m. by the Mutual Fund, the closing NAV of the next Business Day shall be applicable. MINIMUM APPLICATION AMOUNT / NUMBER OF UNITS PLF & PUSTF Plan Purchase Additional Purchase Repurchase Super Institutional Rs. 1 Lakh and in Rs.50,000/- and in Minimum Redemption Plan multiples of Re. 1/multiples of Re. 1/Rs.1000/- or 100 units or thereafter thereafter account balance whichever is lower in Retail Plan Rs.5000/- and in multiples Rs.1000/- and in multiples respect of each option of Re. 1/- thereafter of Re. 1/- thereafter Peerless Income Plus Rs.1000/- and in multiples Rs.100/- and in multiples Fund of Re. 1/- thereafter of Re. 1/- thereafter Peerless Short Term Rs.5000/- and in multiples Rs.100/- and in multiples Fund of Re. 1/- thereafter of Re. 1/- thereafter SPECIAL PRODUCTS Systematic Investment Plan Systematic Transfer Plan Peerless Liquid Fund No Yes, Rs 1000/- , Min 6 Transfers Peerless Ultra Short Yes, Rs 1000/- Min 36 months (Dates Term Fund for SIP 1st,7th,10th,15th,20th and 25th) Peerless Income Plus Systematic Investment Plan (ongoing basis) Fund Frequency Monthly - Rs. 500 /- and in multiples of Re. 1 thereafter, Peerless Short Term Quarterly - Rs. 1,000 /- and in multiples of Re. 1 thereafter. Fund Half Yearly Rs. 2,000/- and in multiples of Re. 1 thereafter. Minimum Monthly SIP is 12 instalments (including 1st cheque), Quarterly Instalments SIP is 4 instalments (including 1st cheque) and Half Yearly SIP is 2 instalments (including 1st cheque). Default Option Default frequency Monthly option

Peerless Income Plus Fund

Default date 07th of every month/quarter/half year 1st, 7th, 10th, 15th, 20th, 25th of every month/quarter/half yearly Between first SIP Installment and the second installment there should be a gap of 30 days. Notice of discontinuance/termination should be received at AMC Customer Service Cell or to the Registrar at least 30 days prior to the due date of the next debit. If the Fund fails to get the proceeds from three Installments out of a continuous series of Installments submitted at the time of initiating a SIP (Subject to a minimum under SIP i.e. 12 months), the SIP is deemed as discontinued. Units will be allotted at the Applicable NAV of the respective dates on which the investments are sought to be made. In case the date falls on a Holiday or falls during a Book Closure period, the immediate next Business Day will be considered for this purpose. Systematic Transfer Plan (only ongoing offer period) Frequency Weekly option (every Wednesday), Fortnightly (every alternative Wednesday), Monthly (on specified dates i.e. 1st, 7th, 10th, 15th, 20th, 25th of every month) Minimum Minimum of 12 transfers of Rs. 500/Instalments Default Option Default Frequency - Monthly th Default Date 07 of each month A minimum period of 7 working days shall be required for registration or termination. It will also terminate automatically if all Units are liquidated or withdrawn from the account or upon the Funds receipt of notification of death or incapacity of the Unit holder. Systematic Withdrawal Plan (only ongoing offer period) Frequency Monthly Option Quarterly Option Minimum value of Rs 500/- or 50 units Rs 1500 or 150 units SWP Additional amount Rs 100/- or 10 units Rs 100/- or 10 units in multiples of Dates of SWP 5th of the month 5th of April, July, October, request January SIP Dates Default Option Monthly Option Unit holders may change the amount of withdrawals or the period of withdrawals by giving a 15 days written notice. The SWP may be terminated on a written notice by a Unit holder and it will terminate automatically if all the Units are liquidated or withdrawn from the account or the holdings fall below Rs.1000 under the monthly option or Rs 3000 under the quarterly option (subject to the Unit holder failing to invest sufficient funds to bring the value of their holdings to the minimum amount of Rs. 5000 after the completion of SWP, within 30 days after the balance shall have fallen below the minimum holdings) or upon the Mutual Funds receipt of notification of death or incapacity of the first Unit holder. Contingent Deferred Sales Charge (CDSC)/Exit Load if any is applicable to SWP.

SWITCHING OPTIONS Peerless Income Plus Fund Peerless Short Term Fund

Switching Options (a) Inter - Scheme Switching option Unit holders under the Scheme have the option to Switch part or all of their Unit holdings in the Scheme to any other Scheme offered by the Mutual Fund from time to time. The Mutual Fund also provides the Investors the flexibility to Switch their investments from any other scheme(s) / plan (s) offered by the Mutual Fund to this Scheme. This option will be useful to Unit holders who wish to alter the allocation of their investment among the scheme(s) / plan(s) of the Mutual Fund in order to meet their changed investment needs. The Switch will be effected by way of a Redemption of Units from the Scheme at Applicable NAV, subject to Exit Load, if any and reinvestment of the Redemption proceeds into another Scheme offered by the Mutual Fund at Applicable NAV and accordingly the Switch must comply with the Redemption rules of the Switch out Scheme and the Subscription rules of the Switch in Scheme. (b) Intra -Scheme Switching option Unit holders under the Scheme have the option to Switch their Unit holding from one plan to another plan (e.g. Regular to Institutional and vice versa) and from one option to another option (i.e. Growth to Dividend and vice-a-versa). The Switches would be done at the Applicable NAV based prices and the difference between the NAVs of the two plans/options will be reflected in the number of Unit allotted.

Switching shall be subject to the applicable Cut off time and Applicable NAV stated in the Scheme Information Document. In case of Switch transactions from one scheme to another, the allocation shall be in line with Redemption payouts. DESPATCH OF REPURCHASE (REDEMPTION) REQUEST Within 10 working days of the receipt of the redemption request at the authorized centre of Peerless Mutual Fund. BENCHMARK INDEX Schemes Name Peerless Liquid Fund CRISIL Liquid Fund Index Peerless Ultra Short Term Fund Peerless Income Plus Fund CRISIL MIP Blended Fund Index Peerless Short Term Fund CRISIL Short Term Bond Fund Index DIVIDEND POLICY The Trustee will endeavour to declare the Dividend as per the specified frequencies, subject to availability of distributable surplus calculated in accordance with the Regulations. The actual declaration of Dividend and frequency will inter-alia depend on availability of distributable surplus calculated in accordance with SEBI (MF) Regulations and the decisions of the Trustee shall be final in this regard. There is no assurance or guarantee to the Unit holders as to the rate of Dividend nor that will the Dividend be paid regularly. Payment of all the dividends shall be in compliance with SEBI Circular No. SEBI/IMD/CIR No. 1/64057/06 dated 4/4/06. NAME OF THE FUND MANAGER Schemes Name Peerless Ultra Short Term Fund Mr. Ganti N. Murthy Peerless Short Term Fund Peerless Liquid Fund Mr. Malay Shah Peerless Income Plus Fund Mr. Ganti N Murthy (Debt) & Mr. Kaushik Dani (Equity) Name of the Trustee Company Peerless Trust Management Co. Limited PERFORMANCE OF SCHEMES (AS ON 29 SEPTEMBER 2011) Compounded Annualised Returns PLF For 1 year Since inception 8.68 7.12 Scheme Returns (%) PUS TF 9.28 7.34 PST F 12.16 11.60 PIPF 3.95 5.87 PLF 7.76 6.62 Benchmark Returns (%) PUST F 7.76 6.62 PSTF 6.80 6.70 PIPF 2.21 3.87

EXPENSES OF THE SCHEME (i) Load Structure & Transaction charges Peerless Liquid Fund and Peerless Ultra Short Term Fund

Initial Offer Period Continuous Offer The initial issue expenses was borne Exit Load : Nil by the AMC. There was no Entry / Exit Load during NFO Peerless Income Plus Fund Entry Load: NIL, Exit Load: 1% if redeemed before a period of 1 year. Peerless Short Term Fund Entry Load: NIL, Exit Load: 0.50% if redeemed before a period of 15 days. No load (if any) will be charged on the units allotted on reinvestment of Dividends. The above mentioned load structure shall be equally applicable to the special products such as STP, switches, etc offered under the Scheme. SEBI vide its circular no SEBI/IMD/CIR No.4/168230/09 June 30, 2009 has decided that there shall be no entry Load for all Mutual Fund Schemes. The upfront commission on investment made by the investor, if any, shall be paid to the ARN Holder (AMFI registered Distributor) directly by the investor, based on the investors assessment of various factors including service rendered by the ARN Holder. The Trustee/AMC reserves the right to change/modify the Load structure from a prospective date. Transaction Charges: Pursuant to SEBI circular vide no. Cir / IMD/ DF / 13 / 2011 dated 22 August 2011, a transaction charge per subscription of Rs.10,000/- and above will be charged from the investors and paid to distributors/ agents (who have opted to receive the transaction charges) w.e.f. 1 November 2011, as follows: 1. Rs. 100/- per subscription of Rs.10,000/- and above for existing investors in Mutual Funds. 2. Rs.150/- per subscription of Rs.10,000/- and above for a first time investor in Mutual Funds. 3. The transaction charge, if any, shall be deducted by the AMC from the subscription amount and paid to the distributor and the balance shall be invested. 4. There shall be no transaction charge on subscription below Rs.10,000/-. 5. Transaction charges shall be applicable on purchases/ subscriptions relating to new inflows. 6. In case of SIPs, the transaction charge shall be applicable only if the total commitment through SIPs amounts to Rs.10,000/- and above and shall be recovered in a maximum of 4 instalments. 7. There shall be no transaction charges on direct investments.

(ii) Recurring Expenses (% average weekly net assets) PLF, PUSTF, PIPF & PSTF

of

the

Actual expenses as on 31 March 2011 (% Weightage) Regular/Retail Growth Institutional Growth Super Institutional Growth

On the first Rs. 100 crores 2.25%; On the next Rs. 300 Crores 2.00%; On the next Rs.300 crores 1.75%; On the balance of the assets 1.50% PLF PUSTF PIPF 0.89% 0.68% 0.32% 0.98% 0.49% 0.32% 2.03% -

PSTF 0.60% -

WAIVER OF ENTRY LOAD FOR DIRECT APPLICATION Peerless Liquid Fund Pursuant to SEBI circular No. SEBI/IMD/CIR No. 4/168230/09 th Peerless Ultra Short Term Fund dated 30 June 2009, no entry load shall be charged to all the Peerless Income Plus Fund mutual fund schemes. Therefore procedure for the waiver of load Peerless Ultra Short Term Fund for direct application is no longer applicable. TAX TREATMENT OF THE INVESTORS/UNIT HOLDERS Peerless Liquid Fund Investors are advised to refer to the paragraph on Taxation in the Peerless Ultra Short Term Fund Statement of Additional Information and to consult their own tax Peerless Income Plus Fund advisors with respect to the specific amount of tax and other Peerless Ultra Short Term Fund implications arising out of their participation in the scheme. DAILY NET ASSET VALUE (NAV) PUBLICATION Peerless Liquid Fund The NAV will be declared for all business days and will be Peerless Ultra Short Term Fund published in 2 newspapers, NAV can also be viewed on Peerless Income Plus Fund www.peerlessmf.co.in and www.amfiindia.com. You can also Peerless Ultra Short Term Fund reach us at our Toll free number 1800 200 9995 or 022-61779922. FOR INVESTOR GRIEVANCES PLEASE CONTACT Name and Address of Registrar Customer Service Cell of AMC Name and Address of Registrar Customer Service Cell of AMC Karvy Computershare Private Limited, Mr. Sachin Shetty, Investor Relations Officer, Karvy Plaza, H No 8-2-596 Street 1 Banjara Ground Floor, Churchgate Chambers, Sir Vithaldas Thackersay Hills, Marg, Hyderabad-500034. New Marine Lines, Mumbai- 400020. Toll Free: 1800 200 9995. Tel 040-23312454, Fax: 040-23311968. Non Toll Free. 022 6177 9922, Website : https://www.karvymfs.com. Email: connect@peerlessmf.co.in, UNIT HOLDERS INFORMATION Peerless Liquid Fund Account Statements: An account statement reflecting the number Peerless Ultra Short Term Fund of Units allotted shall be dispatched to the Unit Holder by ordinary Peerless Income Plus Fund post/courier/electronic mail within the following periods. Peerless Ultra Short Term Fund i) Within 30 days from the date of closure of NFO/acceptance of valid application. ii) In case of SIP/STP- within 10 working days from the end of quarter (March, June, September and December) However, the first account statement under SIP/STP shall be issued within 10 working days of the initial investment and in case of specific request, the account statement shall be dispatched within 5 working days from the receipt of such request without any charges. Consolidated Account Statement (CAS)

Pursuant to Regulation 36 of SEBI (Mutual Funds) Regulations, 1996 and amendments thereto, read with SEBI circular No. Cir/ IMD/ DF/16/ 2011 dated September 8, 2011, the investor whose transaction** has been accepted by the AMC/Mutual Fund on or after October 1, 2011 shall receive the following: (i) On acceptance of the application for subscription, an allotment confirmation specifying the number of units allotted by way of email and/or SMS within 5 Business Days from the date of receipt of transaction request will be sent to the Unit holders registered e-mail address and/or mobile number. (ii) Thereafter, a consolidated account statement (CAS)^ for each calendar month to the Unit holder(s) in whose folio(s)

transaction**(s) has/have taken place during the month on or before 10th of the succeeding month shall be sent by mail/e-mail. ^Consolidated Account Statement (CAS) shall contain details relating to all the transactions** carried out by the investor across all schemes of all mutual funds during the month and holding at the end of the month including transaction charges paid to the distributor. **The word transaction shall include purchase, redemption, switch, dividend payout, dividend reinvestment, systematic investment plan, systematic withdrawal plan, systematic transfer plan and bonus transactions. (iii)For the purpose of sending CAS, common investors across mutual funds shall be identified by their Permanent Account Number (PAN). (iv) In case of a specific request received from the Unit holders, the AMC/Fund will provide the account statement to the investors within 5 Business Days from the receipt of such request. (v) In the event the account has more than one registered holder, the first named Unit holder shall receive the CAS/account statement. (vi) The CAS shall not be received by the Unit holders for the folio(s) not updated with PAN details. The Unit holders are therefore requested to ensure that the folio(s) are updated with their PAN. Further, the CAS detailing holding across all schemes of all mutual funds at the end of every six months (i.e. September/ March), shall be sent by mail/e-mail on or before 10th day of succeeding month, to all such Unit holders in whose folios no transaction has taken place during that period. The half yearly consolidated account statement will be sent by e-mail to the Unit holders whose e-mail address is available, unless a specific request is made to receive in physical. The statement of holding of the beneficiary account holder for units held in demat will be sent by the respective DPs periodically. The Account Statement shall state that the net investment as gross subscription less transaction charges, if any and specify the no. of units allotted against the net investment. Annual Account Statement The Mutual Fund shall provide the Account Statement to the Unit holders who have not transacted during the last six months prior to the date of generation of account statements. The account statements in such cases may be generated and issued along with the Portfolio Statement or Annual Report of the Scheme. Annual Report Scheme-wise Annual Report or an abridged summary thereof shall be mailed to all Unit Holders within four months from the date of closure of the relevant accounting year i.e. 31st March each year. Pursuant to Regulation 56 of SEBI (Mutual Funds) Regulations, 1996 and amendments thereto, read with SEBI circular No. Cir/ IMD/ DF/16/ 2011 dated September 8, 2011, the scheme wise annual report or an abridged summary thereof hereinafter shall be sent by AMC/Mutual Fund as under:

(i) by e-mail to the Unit holders whose e-mail address is available with the Fund, (ii) in physical form to the Unit holders whose email address is not available with the Fund and/or to those Unit holders who have opted / requested for the same. The physical copy of the scheme wise annual report or abridged summary shall be made available to the investors at the registered office of the AMC. A link of the scheme annual report or abridged summary shall be displayed prominently on the website of the Fund. Half yearly disclosures The Mutual Fund shall publish a complete statement of the Scheme portfolio and the unaudited financial results within one month from the close of each half year (i.e.31st March and 30th September) by way of an advertisement at least, in one National English daily and one regional newspaper in the language of the region where the head office of the Mutual Fund is located. The Mutual Fund may opt to send the portfolio to all Unit holders in lieu of the advertisement. The Annual Report, portfolio statement and the unaudited financial results will also be displayed on the website of the Mutual Fund www.peerlessmf.co.in and Association of Mutual Funds in India (www.amfiindia.com) WHO CAN INVEST? Peerless Liquid Fund Peerless Ultra Short Term Fund Peerless Income Plus Fund Peerless Ultra Short Term Fund The following persons (subject to, wherever relevant, purchase of unit of Mutual Funds, being permitted under respective constitutions, and relevant statutory regulations) are eligible and may apply for Subscription to the Unit of the Schemes: 1. Resident adult individuals either singly or jointly (not exceeding three) or on an Anyone or Survivor basis; 2. Hindu Undivided Family (HUF) through Karta; 3. Minor through parent / legal guardian; 4. Partnership Firms; 5. Limited Liability Partnerships 6. Proprietorship in the name of the sole proprietor; 7. Companies, Bodies Corporate, Public Sector Undertakings (PSUs.), Association of Persons (AOP) or Bodies of Individuals (BOI) and societies registered under the Societies Registration Act, 1860(so long as the purchase of Unit is permitted under the respective constitutions; 8. Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions; 9. Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of necessary approvals as "Public Securities" as required) and Private trusts authorised to invest in mutual fund schemes under their trust deeds; 10. Non-Resident Indians (NRIs) / Persons of Indian origin (PIOs) residing abroad on repatriation basis or on non-repatriation basis; 11. Foreign Institutional Investors (FIIs) and their sub-accounts registered with SEBI on repatriation basis; 12. Army, Air Force, Navy and other para-military units and bodies created by such institutions; 13. Scientific and Industrial Research Organizations; 14. Multilateral Funding Agencies / Bodies Corporate incorporated outside India with the permission of Government of India / RBI 15. Provident/ Pension/ Gratuity Fund to the extent they are permitted; 16. Other schemes of Peerless Mutual Fund or any other mutual

fund subject to the conditions and limits prescribed by SEBI Regulations; 17. Trustee, AMC or Sponsor or their associates may subscribe to Units under the Scheme(s) 18. Such other person as maybe decided by the AMC from time to time. Note: Minor Unit holder on becoming major shall submit application form along with prescribed documents to the AMC/Registrar to change the status from minor to major. On the day the minor attains the age of majority, the folio of minor shall be frozen for operation by the guardian and any transactions (including redemption) will not be permitted till the documents to change the status are not received by AMC /RTA. Prospective investors are advised to satisfy themselves that they are not prohibited by any law governing such entity and any Indian law from investing in the Scheme(s) and are authorized to purchase units of mutual funds as per their respective constitutions, charter documents, corporate / other authorizations and relevant statutory provisions. HOW ARE THESE SCHEMES OF PEERLESS MUTUAL FUND DIFFERENT FROM EACH OTHER? Name of existing Investment Objective / Primary Investment Pattern Scheme Peerless Liquid Fund To provide a high level of liquidity with reasonable returns commensurating with low risk through a portfolio of money market and debt securities. Peerless Ultra Short The investment objective is to provide optimal returns and liquidity to the investors by Term Fund investing primarily in a mix of money market and short term debt instruments which results in a portfolio having marginally higher maturity as compared to a liquid fund at the same time maintaining a balance between safety and liquidity. Peerless Income Plus To generate regular income through a portfolio of predominantly high quality fixed Fund income securities and with a marginal exposure to equity and equity related instruments. Peerless Short Term To generate income and capital appreciation by investing in a diversified portfolio of Fund debt and money market instruments. Asset allocation pattern Differentiation Type of instruments % of Net Assets Minimu Maximu m m Peerless Liquid Fund Money market instruments 60 100 The Scheme would (including Cash, CBLO, Repo, CPs, be investing in debt CDs, Treasury Bills and and money market Government Securities) with instruments with a maturity/residual maturity up to 91 maturity upto 91 days. days. The Fund seeks to provide a Debt instruments (including floating 0 40 high level of liquidity rate debt instruments and with reasonable securitized debt)* with maturity/ returns residual maturity/average maturity commensurating with /interest rate resets up to 91 days. low risk through a *securitized debt cumulative portfolio of money allocation not to exceed 25% of the market and debt net assets of the Scheme securities. (excluding foreign securitized debt). Investment in Derivatives up to 50% of the net assets of the Scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as maybe permitted from time to time. Peerless Ultra Short Money market instruments 70 100 The Scheme would Term Fund (including Cash, CBLO, Repo, CPs, be investing in debt CDs, Treasury Bills and instruments which Government Securities) with have average maturity/residual maturity up to 1 maturity between 1 year month to 3 months.

Debt instruments (including floating rate debt instruments and securitized debt)* with maturity/ residual maturity/average maturity /interest rate resets greater than 1 year 0 30% *securitized debt cumulative allocation not to exceed 25% of the net assets of the Scheme (excluding foreign securitized debt). Investment in Derivatives up to 50% of the net assets of the Scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as maybe permitted from time to time.

30

Peerless Income Plus Fund

Debt & Money market instruments Equity and Equity Related Instruments and/ or Units of equity mutual fund schemes.

80 2

98 20

Peerless Short Term Fund

Money market instruments 25 (including cash, CBLO, repo, CPs, CDs, Treasury Bills and Government securities) with maturity/residual maturity up to 1 year Debt instruments (including floating 2 rate debt instruments and securitized debt)* with maturity / residual maturity / average maturity /interest rate resets greater than 1 year. (Maximum maturity of any instrument would not be greater than 3 years) Investment in Derivatives-up to 50% of the net assets of the Scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as maybe permitted from time to time. Scheme Asset under Management as on 30 September 2011 (Rs. Crores) Peerless Liquid Fund 3,900.13 Peerless Ultra Short Term 917.82

98

75

The Scheme can invest up to 30% of its corpus in debt instruments. This fund is ideal for investors who seek a return higher than those given by liquid funds. The portfolio strategy seeks to increase yield by having a marginally higher maturity and moderately higher credit risk as compared to a liquid fund while maintaining a balance between safety and liquidity. The Scheme is an open ended Debt Scheme with an option of investing a maximum of 20% in equity. The objective of the scheme is to generate regular income through a portfolio of predominantly high quality fixed income securities and with a marginal exposure to equity and equity related instruments This Fund is ideal for those investors who seek high returns from the movements in both the debt and equity markets. The Scheme seeks to generate income and capital appreciation by investing in a diversified portfolio of debt and money market securities.

No. of folios as September 2011 216 237

on

30

Fund Peerless Income Plus Fund 51.19 24,309 Peerless Short Term Fund 218.70 113 Please Note : All future communication in connection with this application should be addressed to the Registrar at the address given in this form, quoting full name of the applicant, the application serial number, amount invested, date and the place of the AMC / collection centre where the application was lodged / submitted. ALWAYS CONNECTED Toll Free : 1800 200 9995 connect@peerlessmf.c Non Toll Free : 022 o.in 61779922 Facility of Multilingual Account Statement & Helpline (Toll Free : 1800 200 9995) in English, Bengali & Malayalam. PEERLESS FUNDS MANAGEMENT CO. LTD. Registered Office: Customer Service Cell: Registrar & Transfer Agent: Peerless Funds Management Co. Ltd. Peerless Funds Management Co. Ltd. Karvy Computershare Pvt. Ltd., Peerless Mansion, 3rd Floor, Ground 03, Churchgate Chambers, (Unit: Peerless Mutual Fund), 1, Chowringhee Square, Kolkata Sir. Vithaldas Thackersay Marg, New 8-2-596 Karvy Plaza, Avenue 4, 700069 Marine Lines, Mumbai - 400 020. Street No.1, Banjara Hills, Hyderabad Tel. 033 40185000, Fax. 033 Tel. 022 61779999, Fax. 022 500034. 40185010. 61779996. EAST : Agartala* 0381 2315059, Balasore * 06782-240553, Bankura * 03242-255277, Chinsurah * 033-26803297, Contai 03220-289444, Cuttack 0671-2316111, Ghatal 03225-256888, Guwahati 0361 2450888 , Kolkata 033-40185000, Midnapore 03222-297755, Raipur * 0771-2255910. SOUTH : Bangalore 080-25318888, Calicut * 0495-2301521, Chennai 044-28557777, Coimbatore 04222540038, Hyderabad 040-27617116, Kannur * 0497-2713635, Karimnagar * 0878-2230020, Mangalore * 082424411888, Mysore * 0821-2222888, , Thrissur * 0487-2327588, Vishakapatnam * 08912712415. NORTH : Kanpur * & Lucknow * 0512-2302212, Ludhiana 161 2422600, New Delhi 011-41020306, Udaipur * 02942-418075, Varanasi * 0542-2401164. WEST : Mumbai 022-61779999, Pune 020-26053737, Rajkot * 0281-2371545 * Note : These locations are not Official Point of Acceptance during Continuous Offer. Web site www.peerlessmf.co.in