13/02/2017. and growth option under Regular and Direct Plan were as follows:

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1 13/02/2017 Dear Investor Sub: Proposal for merger of Sundaram Banking & PSU Debt Fund with Sundaram Flexible Fund Short-Term Plan Thank you for investing in Sundaram Banking & PSU Debt Fund. The Trustees of on October 04, 2016 decided to merge Sundaram Banking & PSU Debt Fund with Sundaram Flexible Fund Short-Term Plan. SEBI vide their letter no. IMD/DF3/OW/P/2017/2006 dated 25/01/2017 has conveyed their no objection to the proposed merger. As required, we furnish below the information relating to the proposal for merger of schemes. Sundaram Banking & PSU Debt Fund Sundaram Banking & PSU Debt Fund was launched in March 2015, as an open ended income scheme. The fund seeks to generate income and capital appreciation by primarily investing in a portfolio of debt and money market securities that are issued by Banks, Public Sector Undertakings and Public Financial Institutions. The fund can invest 80% - 100% of its assets in Money market and Debt securities issued by Banks, Public Sector Undertakings (PSUs) and Public Financial Institutions (PFIs). It can invest upto 20% in other debt and money market securities. The AUM of the Fund as on 31-January-2017 was Rs. 27 cr., and the NAV per unit for dividend and growth option under Regular and Direct Plan were as follows: Plan Regular (`) Direct (`) Option Dividend Option (Monthly) Growth Option Sundaram Flexible Fund Short-Term Plan Sundaram Flexible Fund Short-Term Plan was launched in December 2004, as an open ended income scheme. The objective of the scheme is to generate reasonable returns by creating a portfolio comprising substantially of fixed income instruments and money market instruments by keeping the interest rate risk of the fund low. The fund can invest 65% - 100% in Money Market instruments and upto 35% in Fixed income instruments (Government of India and corporate debt securities). The AUM of the fund as on 31-January-2017 was Rs 1,489 cr., and the NAV per unit for dividend and growth option under Regular and Direct Plan were as follows: Plan Regular (`) Direct (`) Option Dividend Option (Monthly) Growth Option Rationale for merging the funds: The portfolio of Flexible Fund Short-Term Plan has a over 95% allocation to Certificate of Deposits, all of which are issued by Banks, Public Sector Undertakings and Public Financial Institutions, and so is in the nature of a Banking & PSU Debt Fund. Given that the Banking & PSU Debt fund has an AUM of only Rs.27 cr. and that both the schemes are similar in nature, it was decided to merge Sundaram Banking & PSU Debt fund with Sundaram Flexible Fund Short-Term Plan. The merged fund will invest primarily in a portfolio of debt and Money Market securities issued by Banks, Public Sector Undertakings and Public Financial Institutions. Benefits to the Investor: As both funds are, by and large similar, the merger will enable reduction in transaction costs. Currently, the AUM of Banking & PSU Debt fund is only Rs.27 cr. which severely restrict its investment options. With the merger, the combined AUM will be Rs.1,516 cr. which would increase the avenues for investment. We believe that the proposed merger is in the interest of the investors and if brought into effect, will rationalize the product basket of in a meaningful manner and enable clear cut product positioning. For investors in Sundaram Banking & PSU Debt Fund, the effect of merger will be a surrender of existing units of the scheme/s against an issue of fresh units of Sundaram Flexible Fund Short-Term Plan. This will be reckoned as redemption in Sundaram Banking & PSU Debt Fund, without payment of any exit load, followed by a fresh purchase in Sundaram Flexible Fund Short-Term Plan at the applicable NAV as on 17/03/2017. The impact on taxation has been explained in the Annexure. We advise you to also consult your Tax Advisor on the matter. 1 The changes, as proposed, constitute a change in the fundamental attributes of Sundaram Banking & PSU Debt Fund as per Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, However, there is no change in the fundamental attributes of the surviving scheme (Sundaram Flexible Fund Short-Term Plan) as a result of the merger. The merger will be effective from 17/03/2017 ( Effective Date ). Unit holders of Sundaram Banking & PSU Debt Fund, who are not in agreement with the merger may redeem their units at applicable NAV or switch to other schemes of without payment of exit load between 16/02/2017 and 17/03/2017 (both days inclusive). The units under the respective options/plans of Sundaram Banking & PSU Debt Fund will be alloted units in the respective options/plans of Sundaram Flexible Fund Short-Term Plan accordingly. If the unitholders do not exercise their option to exit during this period, they shall be deemed to have consented to the merger and will be allotted units under the respective Plan(s) / Option(s) of Sundaram Flexible Fund Short-Term Plan at the NAV declared as on the close of business hours on 17/03/2017. In the event of any identical options not available in Sundaram Flexible Fund Short-Term Plan, the default option (Refer Annexure A) of the Sundaram Flexible Fund Short-Term Plan shall apply. Investors wishing to exit from Sundaram Banking & PSU Debt Fund can submit redemption requests, at any of the Official Point of Acceptance of Sundaram Mutual Fund on any business day during the exit period. The redemption proceeds will be mailed / credited within 10 business days of receipt of valid redemption request. Unitholders may note that the offer to exit is merely an option and not compulsory. However, the exit option will not be available to those unitholders who have pledged their units and on which the Mutual Fund has marked a lien unless the release of pledge is obtained and communicated to the Mutual Fund / Registrar before applying for redemption. If not, such lien or encumbrance will continue on the units allotted in Sundaram Flexible Fund Short-Term Plan on account of merger. Unitholders may please note that no application for fresh purchases / additional purchase / switch-in / fresh registration or renewal of SIP/STP/SWP in Sundaram Banking & PSU Debt Fund will be accepted from 17/03/2017 (Effective date). The SIP/STP/SWP transactions in the existing Sundaram Banking & PSU Debt Fund will be processed into SIP/STP/SWP of Sundaram Flexible Fund Short-Term Plan with effect from 17/03/2017 (Effective date). Balances of unclaimed dividend and redemption amount lying in Sundaram Banking & PSU Debt Fund shall stand transferred to and will be managed under Sundaram Flexible Fund Short-Term Plan from the Effective Date. The Effective Date shall be considered as the allotment date in Sundaram Flexible Fund Short-Term Plan. Please refer the Scheme Information Document of Sundaram Flexible Fund Short-Term Plan for further details on the scheme. We believe that the merger of Sundaram Banking & PSU Debt Fund with Sundaram Flexible Fund Short-Term Plan will add value to you and we look forward to your continued investment in Sundaram Flexible Fund Short-Term Plan post-merger, and in other schemes of. Warm Regards Harsha Viji Managing Director Encl: Public Notice to be issued on 13/02/2017 & Transaction Slip Mutual Fund investments are subject to market risks, read all scheme related documents carefully. PS: Please see Annexure for illustration on allotment of units under Sundaram Flexible Fund Short-Term Plan on account of merger, Details on Performance, Annual Recurring Expenses, Latest Portfolio, Investment Objective and Asset Allocation of the Sundaram Banking & PSU Debt Fund and Sundaram Flexible Fund Short-Term Plan, Tax implications on account of Merger and Other Statutory Information. Contact No: (India) (NRI) customerservices@sundarammutual.com (NRI): nriservices@sundarammutual.com CIN: U93090TN1996PLC SMS SFUND to 56767

2 ANNEXURE A I) Illustration of the manner in which units of Sundaram Flexible Fund Short-Term Plan would be allotted to the investors of Sundaram Banking & PSU Debt Fund The market value of units of Sundaram Banking & PSU Debt Fund as on the Completion date** shall be treated as the subscription value to determine the number of units to be allotted at the NAV of Sundaram Flexible Fund Short-Term Plan on the completion date. An illustration explaining the same is as follows: (All figures in the table below are purely for illustrative purposes only). Merger Sundaram Banking & PSU Debt Fund Sundaram Flexible Fund Short-Term Plan Completion Date* (Regular Plan) (Regular Plan) Units NAV as on Market Value Units NAV as on Market Value completion date# (in Rs.) completion date# (in Rs.) Growth 2, ,299 1, ,299 Monthly Dividend 2, ,283 2, ,283 *Completion Date means the Date on which the units of Sundaram Banking & PSU Debt Fund will be allotted to investors of Sundaram Flexible Fund Short-Term Plan. # NAV as on 31/01/2017 is taken for illustrative purposes only. The units of growth option and dividend option under Regular/Direct plans of Sundaram Banking & PSU Debt Fund shall be transferred to the respective growth and dividend options under Regular/Direct plans of Sundaram Flexible Fund Short-Term Plan. The existing unitholders will be allotted units in the transferee scheme as follows. Option Sundaram Banking & PSU Debt Fund Sundaram Flexible Fund - Short Term Plan Growth Growth Growth Dividend Payout Weekly Monthly^ Dividend Payout Monthly Monthly Dividend Payout Quarterly Monthly^ Dividend Reinvest Daily Daily Dividend Reinvest Weekly Weekly Dividend Reinvest Monthly Monthly Dividend Reinvest Quarterly Daily^ Bonus Growth^ ^ The Transferee Scheme, Sundaram Flexible Fund - Short Term Plan, presently does not have (i) Dividend Payout Weekly and Quarterly Options and (ii) Dividend Reinvest - Quarterly Option. In view of this, investors in those options will be allotted units under (i) Dividend Payout Monthly Option (ii) Dividend Reinvest - Daily Option and at the applicable Consequent to the discontinuance of Bonus Option by SEBI, the existing investors in the transferor scheme will be allotted units under the Growth Option of the Transferee Scheme. II) The performance of Sundaram Banking & PSU Debt Fund and Sundaram Flexible Fund Short-Term Plan as on January 31, 2017 is as follows: (Returns in %) Scheme name Sundaram Banking & PSU Debt Fund Sundaram Flexible Fund Short-Term Plan Fund (%) Benchmark (%) CRISIL 1Year Fund (%) Benchmark (%) CRISIL 1Year Last 1 year Last 3 years Last 5 years Since Inception Past performance may or may not be sustained in the future; Returns are on a compounded annual basis for period more than one year & absolute for one-year period based on NAV of Regular Plan (Growth Option). III) Details of the Investment Objectives and Current Asset Allocation of the Sundaram Banking & PSU Debt Fund and Sundaram Flexible Fund Short-Term Plan are as follows: Particulars Sundaram Banking & PSU Debt Fund Sundaram Flexible Fund Short-Term Plan Investment Objective To generate income and capital appreciation by primarily investing in a portfolio of To generate reasonable returns by creating a portfolio comprising substantially of debt and money market securities that are issued by Banks, Public Sector fixed income instruments and money market instruments by keeping the Undertakings and Public Financial Institutions. interest rate risk of the fund low. Asset Allocation Asset Class Indicative Allocation Risk Profile Asset Class Indicative Allocation Risk Profile Money Market and debt securities issued Money Market Instruments (CDs, CPs, by Banks, Public Sector Undertakings (PSUs) CBLO, REPO, MIBOR Instruments, Debt and Public Financial Institutions (PFIs) Low to Securities with initial maturity of less than Low to 80% to 100% Medium one year/goi Secs./Treasury Bills) 65 % to 100% Medium Other debt* and Money Market Low to Fixed Income Instruments securities Upto 20% Medium Government of India & Corporate Debt Low to Securities* (including Securitised Debt) Upto 35% Medium *Including securitised Debt (domestic) upto *Debt securities may include securitised 50% of the net asset debts up to 35% of the net assets. The Scheme may invest up to 10% of the The Scheme may invest up to 50% of net assets in fixed income derivatives the net assets in fixed income derivatives at the time of transaction. Benchmark CRISIL Short Term Bond Fund Index CRISIL Short Term Bond Fund Index AUM (in Cr.) 27 1,489 No. of folios 110 1,655 Please read the SID/ SAI and KIM of the respective schemes for detailed information. AUM and no. of folios as on January 31,

3 IV) Details of Applicable Recurring Expenses: Scheme Names As per Information Document (% of daily net asset values) Actuals as on (% of daily net asset values) Sundaram Banking & PSU Debt Fund Sundaram Flexible Fund Short term Plan Maximum total expense ratio (TER) permissible under Regulation 52(4) and 54 (6)(c) upto 2.25%; Additional Expenses under Regulations 52(6A)(c) 0.20%; and Additional Expense ratio for gross inflow from specified cities under Regulation 52(6A) (b) upto 0.30%. Service tax on Investment Management fee is chargeable in addition to the above eligible TER. Regular Plan TER 0.61%* Direct Plan TER 0.33%* * including service tax on investment management fee Regular Plan TER 0.28%* Direct Plan TER 0.25%* * including service tax on investment management fee VI) Tax impact of the consolidation of schemes on the unit holders: The following information is provided for general information purposes only. In view of the individual nature of tax implications, each investor is advised to consult his or her own tax adviser with respect to the specific tax implications arising out of his or her participation in the scheme. Under this section, the word act refers to Income Tax Act, 1961, as amended by Finance Act from time to time, unless otherwise mentioned. The tax implications given are MUTATIS MUTANDIS applicable to non-resident investors also. In the event of merger of Sundaram Banking & PSU Debt Fund ( Transferor schemes ) into Sundaram Flexible Fund Short-Term Plan ( Transferee scheme ), units of the Transferor schemes would be converted into units of the Transferee scheme. Both the funds are debt oriented funds. Post merger the transferee scheme will be named as Sundaram Banking & PSU Debt Fund. A) Capital Gains Any transfer by a unit holder of a capital asset, being unit or units, held by him in the consolidating scheme of a mutual fund, made in consideration of the allotment to him of a capital asset, being a unit or units, in the consolidated of the mutual fund would not be considered as transfer by virtue of the provisions of section 47(xviii) of income Income tax Act, 1961 and hence the gains on transfer not be chargeable to tax. For the purpose of classifying capital asset into long term or short term, the period of holding of units acquired in the consolidation of schemes of mutual fund shall include the period for which units in consolidating schemes was by the unitholder in terms of the provisions of section 2(42A) of Income Tax act. Further Section 49(2AD) provides that the cost of acquisition of the units acquired by the unitholder in consolidated scheme of mutual fund in consideration of transfer referred in section 47(xviii) shall be deemed to be the cost of acquisition to him of the units in the consolidating scheme of mutual fund. Under the Income Tax Act the merger of scheme does not amount to transfer by virtue of provisions of section 47(xviii) of income tax act and hence gains would not be chargeable to tax. However if redeemed during the exit period, the amount so redeemed is subject to tax at applicable rates if any, this provision also applies to NRI investors. 3

4 VII) Portfolio of Sundaram Banking & PSU Debt Fund as on January 31, 2017 is as follows: Sl No Issuer / Instrument Rating Quantity Market Value % of NAV ` in Lakhs A) Debt Instruments (i) Listed / awaiting listing on Stock Exchange 1 NABARD CRISIL AAA HDFC CRISIL AAA LIC Housing Finance CRISIL AAA Rural Electrification Corporation CRISIL AAA Power Finance Corporation CRISIL AAA LIC Housing Finance CRISIL AAA Power Grid Corporation of India CRISIL AAA Sub Total 1, Govt Security 6.97% Central Government Securities Sovereign Sub Total Total for Debt Instruments 1, B) Money Market Instruments Certificate of Deposits 1 Corporation Bank CRISIL A Axis Bank CRISIL A Export Import Bank of India CRISIL A Punjab and Sind Bank CRISIL A Sub Total 1, Reverse Repo / CBLO CBLO Sub Total Total for Money Market Instruments 1, Cash and Other Net Current Assets Grand Total 2, VIII) Portfolio of Sundaram Flexible Fund Short-Term Plan as on January 31, 2017, is as follows: Sl. No Issuer / Instrument Rating Quantity Market Value ` in Lakhs % of NAV Certificate of Deposits 1 IndusInd Bank CRISIL A , Corporation Bank CRISIL A , NABARD CRISIL A , Small Industrial Development Bank of India CRISIL A , IDFC Bank CRISIL A , SIDBI CRISIL A , Vijaya Bank CRISIL A , Axis Bank CRISIL A , Export Import Bank of India CRISIL A , Andhra Bank CRISIL A , Canara Bank CRISIL A , ICICI Bank Ltd CRISIL A , Andhra Bank CRISIL A , HDFC Bank CRISIL A , IDBI Bank CRISIL A , IDBI Bank CRISIL A , NABARD CRISIL A , Corporation Bank CRISIL A , ICICI Bank CRISIL A , Vijaya Bank CRISIL A , Export Import Bank of India CRISIL A , State Bank of Hyderabad CRISIL A , Bank of Maharashtra CRISIL A , Canara Bank CRISIL A , Export Import Bank of India CRISIL A , Punjab and Sind Bank CRISIL A , Axis Bank CRISIL A Sub Total 1,44, Reverse Repo / CBLO CBLO 4, Sub Total 4, Total for Money Market Instruments 1,48, Cash and Other Net Current Assets Grand Total 1,48,

5 Merger of Sundaram Banking & PSU Debt Fund with Sundaram Flexible Fund Short-Term Plan Transaction Slip Redemption request submitted along with change of bank mandate would result in payment being withheld upto 10 days for validating new bank mandate. Effective May 01, 2012 the forms for redemption request and change of bank account will be segregated to ensure that the two different requests are handled and executed separately for all existing and new customers. Distributor's ARN & Name Sub-broker's ARN (code) Sub-broker Code (internal) EUIN* (Employee Unique Idendification Number) * Declaration for Execution only transaction (only where EUIN box is left blank) I/We hereby confirm that the EUIN box has been intentionally left blank by me/us as this transaction is executed without any interaction or advice by the employee/relationship manager/sales person of the above distributor/sub broker or notwithstanding the advice or inappropriateness,if any, provided by the employee/relationship manager/sales person of the distributor/sub broker. ISC s signature & Time Stamping Signature First / Sole Applicant / Guardian Second Applicant Third Applicant Folio No Name of First/Sole Applicant (Please use capital Letters) Central KYC Number CKYC Proof attached (Mandatory) * If CKYC Number is not available, please submit the duly filled-in additional CKYC Form which is available at our website Redemption Are you submitting a change of bank request along with your redemption Yes (if yes, please also use the stand alone bank mandate form) No Fund Name: Sundaram Banking & PSU Debt Fund Plan: Regular Direct Options: Dividend Payout Re-Investment Sweep Growth Switch Amount Units... Please refer SID & KIM of respective scheme(s) for Riskometer Amount Units... From: Sundaram Banking & PSU Debt Fund Plan: Regular Direct Options: Dividend Payout Re-Investment Sweep Growth To:... *Dividend Sweep option is only for Sundaram Money Fund (Subject to minimum sweep amount) Plan: Regular Direct Options: Dividend Payout Re-Investment Sweep* Growth Declaration: I/We having read and understood the contents of the Statement of Additional Information/Scheme Information Document/addenda issued to the SID and KIM till date hereby apply for units under the scheme(s) as indicated in the application form agree to abide by the terms, conditions, rules and regulations of the scheme(s) agree to the terms and conditions for Auto Debit have not received nor been induced by any rebate or gifts, directly or indirectly in making this investment do not have any existing Micro SIPs/investments which together with the current application will result in the total investments exceeding Rs. 50,000 in a financial year or a rolling period of twelve months (applicable for PAN exempt category of investors). The ARN holder has disclosed to me/us all the commissions (in the form of trail commission or any other mode), payable to him for the different competing Schemes of various Mutual Funds from amongst which the Scheme is being recommended to me/us. Applicable to NRIs only: Please ( ) I/We confirm that I am/we are Non-Resident of Indian Nationality/Origin and I/We hereby confirm that the funds for subscription have been remitted from abroad through normal banking channels or from funds in my/our Non-Resident External/Ordinary Account/FCNR Account on a Repatriation Basis Non-Repatriation Basis. I/We confirm that I am/we are not United States persons within the meaning of Regulation (S) under the United States Securities Act of 1933, as amended from time to time or a resident of Canada. Signature First / Sole Applicant / Guardian Second Applicant Third Applicant Request Date D D M M Y Y Y Y Acknowledgement Redemption Switch Request Date: D D M M Y Y Y Y Time Stamp/Seal Folio No:... Fund: Sundaram Banking & PSU Debt Fund Plans: Options: Regular Direct Growth or Dividend Payout Re-Investment In case of switch, Target scheme... Amount Units... Plans: Options: Regular Direct Growth or Dividend Payout Re-Investment Sweep (only for Sundaram Money Fund) To be submitted along with the transaction slip: 1. Your FATCA Details (Foreign Account Tax Compliance Act) & KYC Additional Details (if not already submitted), and 2. Ultimate Beneficial Owner(s) (UBO) information(for non-individuals only). Please quote the Central KYC (CKYC) number in the boxes provided above or submit your filled-in CKYC Form or additional CYKC form incase of existing investors, irrespective of the investment amount. The forms are available on our website 5