PRODUCT SUITABILITY. Investment in Debt & Money Market Instruments.

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2 PRODUCT SUITABILITY Scheme Names This product is suitable for investors who are seeking ~ Product Label Pg. No. Principal Large Cap Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 8 (An Open-ended Equity Scheme) including equity derivatives of large capitalization Companies Principal Emerging Bluechip Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 9 (An Open-ended Equity Scheme) including equity derivatives of mid & small capitalization Companies. Principal Growth Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 10 (An Open-ended Equity Scheme) including equity derivatives of companies across market capitalization. Principal Dividend Yield Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 11 (An Open-ended Equity Scheme) including equity derivatives of high dividend yield Companies. Principal Index Fund - Nifty Long term Capital Growth. Investment in equity securities High Risk (Brown) 12 (An Open-ended Index Scheme) including equity derivatives of CNX Nifty (NSE) Companies. Principal SMART Equity Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 13 (An Open-ended Equity Scheme) including equity derivatives of large capitalization Companies as well as Debt/Money Market securities through a systematic allocation of Funds between Equity & Debt on the basis of the Price Earnings Ratio of CNX Nifty. Principal Personal Tax Saver Fund Long term Capital Growth with a three year lock-in. High Risk (Brown) 14 (An Open-ended Equity Linked Savings Scheme) Investment in equity & equity related securities including equity derivatives of large capitalization Companies. Principal Tax Savings Fund Long term Capital Growth with a three year lock-in. High Risk (Brown) 15 (An Open-ended Equity Linked Savings Scheme) Investment in equity & equity related securities including equity derivatives of companies across market capitalization. Principal Balanced Fund Long term Capital Growth. Investment in equity & equity related securities High Risk (Brown) 16 (An Open-ended Balanced Scheme) including equity derivatives as well as debt/money market securities. Principal Debt Savings Fund - MIP Income and Capital Growth over a medium term investment horizon. Medium Risk (Yellow) 17 An Open-ended Income Fund Investment primarily in debt/money market securities with exposure in (Monthly Income is not assured and is subject equity & equity related instruments including equity derivatives. to the availability of distributable surplus) Principal Government Securities Fund Income over a long term investment horizon. Low Risk (Blue) 18 (An Open-ended dedicated Gilt Scheme Investment in Government Securities. investing in Government Securities) Principal Income Fund - Long Term Plan Income over a long term investment horizon. Low Risk (Blue) 19 (An Open-ended Income Scheme) Investment in Debt & Money Market Instruments. Principal Debt Opportunities Fund - Income over a long term investment horizon. Low Risk (Blue) 20 Corporate Bond Plan Investment in Debt & Money Market Instruments of Private & (An Open-ended Debt Scheme) Public Sector Companies. Principal Income Fund - Short Term Plan Income over a medium term investment horizon. Low Risk (Blue) 21 (An Open-ended Income Scheme) Investment in Debt & Money Market Instruments. Principal Bank CD Fund Income over a medium term investment horizon. Low Risk (Blue) 22 (An Open-ended Debt Scheme) Investment in Bank CDs, Debt & Money Market Instruments. Principal Debt Opportunities Fund - Income over a short term investment horizon. Low Risk (Blue) 23 Conservative Plan (An Open-ended Debt Scheme) Investment in Debt & Money Market Instruments. Principal Cash Management Fund Income over a short term investment horizon. Investment in Debt & Low Risk (Blue) 24 (An Open-ended Liquid Scheme) Money Market Instruments, with maturity not exceeding 91 days. Principal Global Opportunities Fund Long term Capital Growth. High Risk (Brown) 25 (An Open-ended Fund of Funds Scheme) Investment in overseas mutual fund schemes. Principal Retail Money Manager Fund Income over a short term investment horizon. Low Risk (Blue) 25 (An Open-ended Debt Scheme) Investment in Debt & Money Market Instruments. Principal Debt Savings Fund - Retail Plan Income over a long term investment horizon. Low Risk (Blue) 26 (An Open-ended Income Scheme) Investment in Debt & Money Market Instruments. ~ Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Note: Risk may be represented as: Investors understand that their principal will be at Low Risk Investors understand that their principal will be at Medium Risk Investors understand that their principal will be at High Risk (Blue); (Yellow); (Brown)

3 Fund Manager Commentary Debt Markets February 2014 Fixed Income Update for February 2014 Key Market Highlights: During the month we saw yields rise across various debt asset classes. While gilt and T-bill yields rose by 5-10 bps across the curve, CD rates rose sharply by more than 100 bps. Further, rise in Banking system liquidity and higher supply (as banks stepped up CD issuance) were the main reasons. Corporate bond yields also rose by 10 bps across the curve. INR remained broadly stable during the month and ended on a stronger note at as compared to in the previous month. During the month FIIs were net buyers of domestic debt to the tune of ` 18,000 crore approx. The new ten yr benchmark 8.83% GOI 2023 closed at 8.86%, 8 bps higher than previous month end. The ten yr AAA Corporate bond benchmark closed at 9.67%, similar to previous month. The five yr AAA corporate bond benchmark rose by 6 bps to close at 9.80%. Outlook: We expect long end gilt yields to remain range bound with downward bias due to lack of supply this month. The ten yr G-sec benchmark is expected to trade in a band of 8.60 to 9.00% in the near term The five year AAA PSU corporate bond benchmark is expected to trade in a range of 9.50 to 9.90%. Inflation as measured by WPI and CPI for February 2014 is expected to fall further. This may support gilt and bond prices Short term money market yields are expected to remain elevated on account of tight liquidity. Banks CD issuance can put upward pressure on rates, however if liquidity eases from current levels it may lead to softening of CD rates. Systemic liquidity deficit is expected to remain higher during the month in a range of ` 90,000 to 1,50,000 crore for the month of March year CD rates rose by 13 bps to 9.78%. 1 yr T- bill rate also rose by 13 bps to 8.95%. Jan WPI data release came at 5.05% y-o-y vs. 6.16% in previous month. CPI for January also came in sharply lower at 8.79% compared to 9.87% in previous month. Core CPI however continues to remain sticky and above 8% and core WPI also went up further to 3.16%. December industrial production (IIP) growth came in at -0.6% yoy reflecting continued tepid activity. Liquidity deficit was higher during the month at ` 1,16,000 cr avg as compared to ` 93,000 cr average for the previous month combined for daily LAF, term LAF and MSF. Overnight rates remained volatile in the range of %. RBI introduced additional liquidity through the term repo facility in the range of ` 20,000 crore to 30,000 crore on various days as overnight rates went to the higher end of the band. 3

4 Fund Manager Commentary Equity Markets February 2014 Review of Equity Market for the Month of February 2014 The Indian equity markets were up in the month of February, broadly in line with Emerging Markets. The MSCI India index was up 3.4% (in USD terms) while the MSCI EM index was up 3.2%. The developed market indices however continued to do better, with the S&P 500 index up 4.3% during the month, while MSCI Europe was up 4.6%. There was overall a risk on environment as high yield bonds rallied, and the commodity index (esp. the agricultural commodities index) was up during the month. However, emerging market funds continued to see outflows while investors continued to invest in developed markets, esp. Europe and Japan. Globally, investors are wary of risks in the Chinese shadow banking system. While some relief was seen due to a troubled deal getting bailed out, this remains an area of concern. The performance of the Indian indices is given below. The mid-caps outperformed the large caps during the month. In terms of sectors, the capital goods and autos did well while metals, consumer goods and IT stocks did relatively poorly. Another sector that did not do as well was Telecom, where the relatively higher prices paid by telecom companies in the spectrum auction dampened sentiment. PERFORMANCE AS ON FEBRUARY 28, 2014* Index 1 Month 3 Months 6 Months 1 Year (%) (%) (%) (%) Broad Markets CNX Nifty Index S&P BSE Sensex S&P BSE S&P BSE S&P BSE S&P BSE MID CAP S&P BSE SMALL CAP Sectoral Performance S&P BSE AUTO S&P BSE Bankex S&P BSE CG S&P BSE CD S&P BSE FMCG S&P BSE METAL S&P BSE Oil & Gas S&P BSE PSU S&P BSE Teck S&P BSE HC *Performance for less than one year period are absolute returns and more than one year are compounded annualized returns. Source - MFI Explorer There was a lot of buying in capital goods companies, probably as investors believe that projects which have been cleared by the government in the past few months may kick off after elections. Also, institutional investors have been underweight the sector in the recent past, and are likely rebalancing their portfolios. Metals prices were impacted by weak data coming out of China, which impacted performance of these companies. During the month, FIIs continued to remain buyers of both debt (net inflow of USD 1.8 Billion) and equities (net inflow USD 322 million). The FIIs have invested over USD 10 Billion in Indian equity so far in FY 14. The domestic institutions however witnessed a mixed picture, with Insurance companies being net buyers (USD 240 million) while mutual funds were net sellers (USD 194 million). In terms of macro data, the picture continued to improve, with the trade deficit lower at USD 9.9 Billion, and both CPI and WPI coming in lower than consensus expectations. January CPI came in at 8.8% while the WPI was at 5.05%. This was primarily led by lower prices of vegetables. The core numbers for both the indices remain high however, the IIP and the GDP numbers remain weak, with the Q3 GDP estimates coming in at 4.7%. It could be a tall order for the economy to grow at 4.9% as estimated by the CSO for FY 14. The IIP for December was at a negative 0.6%. Consumer durables growth was negative, which is also supported by anecdotal evidence of poor demand for passenger cars etc. The markets are positioning themselves for a stable government post elections and may remain volatile based on news flow till the elections. During the month, we bought or added to our positions in Bank of Baroda, Bata India, Escorts, Federal Bank, Finolex Cables, Finolex Industries, FirstSource Solutions, Godfrey Phillips India, HDFC Bank, Himatsingka Seide, ICICI Bank, Indusind Bank, Infosys, L&T, Lupin, Polaris Financial Technology, Shree Cement, State Bank of India, Tech Mahindra, Ultra Tech Cemco, Voltas and Wipro. During the month, we sold or reduced our positions in Bharti Airtel, Cipla, Divis Laboratories, Dr. Reddys Labs, Eros International Media, HCL Technologies, IDFC, ING Vysya Bank, Jain Irrigation, Just Dial, Kaveri Seed Co., National Buildings Construction Corp., NCC Ltd., Oracle Financial Systems, Symphony Ltd., Union Bank of India and UPL Ltd. 4

5 Fund at a Glance Particulars Principal Principal Emerging Principal Principal Principal Principal Large Cap Fund Bluechip Fund Growth Dividend Yield Fund Index Fund - Nifty SMART Equity Fund Nature of the An Open-ended An Open-ended An Open-ended An Open-ended An Open-ended An Open-ended Scheme Equity Scheme Equity Scheme Equity Scheme Equity Scheme Index Scheme Equity Scheme Allotment Date - Regular Plan November 11, 2005 November 12, 2008 October 25, 2000 October 15, 2004 July 27, 1999 December 16, Direct Plan January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Investment Plans / Regular Plan & Direct Plan. Both the Plans offer Growth & Dividend Option. Options + Dividend Option under both the Plans offers facility of Payout, Reinvestment and Sweep. Fund Manager & Anupam Tiwari Dhimant Shah P.V.K. Mohan Dhimant Shah Rupali Pandit Anupam Tiwari Managing the July 2011 June 2011 September 2010 December 2011 October 2012 July 2011 Current Fund from Total Investment 9 years 22 years 20 years 22 years 14 years 9 years Experience Benchmark S&P BSE 100 Index CNX Midcap Index S&P BSE 200 Index CNX Dividend CNX Nifty Index Crisil Balanced Fund Index Opportunities Index Minimum New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 Application Amount Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Cut Off Time# 3.00 pm 3.00 pm 3.00 pm 3.00 pm 3.00 pm 3.00 pm Exit Load If redeemed on or before 1 Year from the date of allotment - 1%. Nil 1% if redeemed (including SIP / STP / within 1 year from the SWP, if available) date of allotment. SIP / SWP / STP Minimum No. & Amt. of SIP/SWP/STP (if available) Available EQUITY SCHEMES 6 installments of SIP - ` 2,000/- each, STP - ` 1,000/- each & SWP - ` 500/- each. EQUITY LINKED SAVINGS SCHEME (ELSS) FUND OF FUNDS SCHEME TARGET RISK FUNDS Particulars Principal Personal Principal Principal Global Principal Principal Debt Tax Saver Fund Tax Savings Fund Opportunities Fund Balanced Fund Savings Fund - Monthly Income Plan Nature of the An Open-ended Equity An Open-ended Equity An Open-ended An Open-ended An Open-ended Income Fund Scheme Linked Savings Scheme Linked Savings Scheme Fund of Funds Scheme Balanced Scheme (Monthly Income is not assured and is subject to the availability of distributable surplus) Allotment Date - Regular Plan March 31, 1996 March 31, 1996 March 29, 2004 January 14, 2000 May 23, Direct Plan January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Investment Plans / Regular Plan & Direct Plan. Regular Plan & Direct Plan. Regular Plan & Direct Plan. Regular Plan and Direct Plan. Regular Plan & Direct Plan. Options + Both the Plan do not have Both the Plan do not have Both the Plans offer Both the Plans offer Both the Plans offer any options at present. any options at present. Growth & Dividend Option. Growth & Dividend Option. Dividend & Growth Option. Dividend Option under both Dividend Option under both Dividend Frequencies - the Plan offers facility of Payout, the Plan offers facility of Payout, Monthly / Quarterly Reinvestment and Sweep. Reinvestment and Sweep. Fund Manager & Anupam Tiwari P.V.K. Mohan Rajat Jain P.V.K. Mohan Pankaj Jain Managing the July 2011 September 2010 March 2004 May 2010 January 2012 Current Fund from Total Investment 9 years 20 years 24 years 20 years 11 years Experience Benchmark S&P BSE 100 Index S&P BSE 200 Index MSCI World Index Crisil Balanced Fund Index Crisil MIP Blended Index Minimum New Investor: ` 500 New Investor: ` 500 New Investor: ` 10,000 New Investor: ` 5,000 New Investor: ` 5,000 Application Amount Existing Investor: ` 500 Existing Investor: ` 500 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Cut Off Time# 3.00 pm 3.00 pm pm 3.00 pm 3.00 pm Exit Load Nil Nil If redeemed on or before 1 Year from the date of allotment - 1%. (including SIP / STP / SWP, if available) SIP Available SWP / STP Available after lock-in period Available Available Available Minimum No. & 6 installments of ` 500/- each. 6 installment of SIP - ` 2,000/- each, STP - ` 1,000/- each & SWP - ` 500/- each. Amt. of SIP/SWP/STP (if available) # In respect of purchase/switch-in of units in any of the Schemes (other than Liquid Schemes) for an amount equal to or more than ` 2 Lakhs, the closing (Net Asset Value) of the day shall be applicable subject to realisation of the funds upto 3.00 p.m. and receipt of application (duly time w.e.f. close of business hours on February 28, 2014 Principal Retail Equity Savings Fund has merged into Principal Growth Fund. 5

6 Fund at a Glance (Contd.) DEBT SCHEMES Particulars Principal Government Principal Income Fund - Principal Debt Opportunities Principal Income Fund - Principal Securities Fund Long Term Plan Fund - Corporate Bond Plan Short Term Plan Bank CD Fund Nature of the An Open-ended dedicated An Open-ended An Open-ended An Open-ended An Open-ended Scheme Gilt Scheme investing in Income Scheme Debt Scheme Income Scheme Debt Scheme Government Securities Allotment Date - Regular Plan August 23, 2001 May 09, 2003 September 14, 2004 May 09, 2003 November 6, Direct Plan January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Investment Plans / Options + Regular Plan and Direct Plan. Both the Plans offer Dividend & Growth Option. Dividend Frequencies Quarterly / Annual Quarterly / Annual Monthly Monthly Monthly Fund Manager & Bekxy Kuriakose Bekxy Kuriakose Bekxy Kuriakose Gurvinder Singh Wasan Gurvinder Singh Wasan Managing the October 2012 Janaury 2013 Janaury 2013 April 2011 April 2011 Current Fund from Total Investment 13 years 13 years 13 years 10 years 10 years Experience Benchmark I-Sec Composite Index Crisil Composite Bond Crisil Composite Bond CRISIL Short-Term Bond Crisil Liquid Fund Index Fund Index Fund Index Fund Index Minimum New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 Application Amount Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Cut Off Time Subscription # 3.00 pm 3.00 pm 3.00 pm 3.00 pm 3.00 pm Redemption 3.00 pm 3.00 pm 3.00 pm 3.00 pm 3.00 pm Exit Load Nil If redeemed on or From the date of allotment If redeemed within 1% - if redeemed within 180 (including SIP / STP / before 1 Year from the if redeemed any time days from the days from the date of allotment; SWP, if available) date of allotment - 1%. Upto 12 months - 2% date of allotment % 0.50% - if redeemed after From 12 months and 180 days but within 270 days upto 24 months - 1% After 24 months - Nil from the date of allotment; 0.25% - if redeemed after 270 days but within 365 days from the date of allotment; Nil - if redeemed after 365 days from the date of allotment. SIP / SWP / STP Minimum number & Amount of SIP/ SWP/STP (if available) Available 6 installments of SIP - ` 2,000/- each, STP - ` 1,000/- each & SWP - ` 500/- each. # In respect of purchase/switch-in of units in any of the Schemes (other than Liquid Schemes) for an amount equal to or more than ` 2 Lakhs, the closing (Net Asset Value) of the day shall be applicable subject to realisation of the funds upto 3.00 p.m. and receipt of application (duly time stamped). 6

7 Fund at a Glance (Contd.) DEBT SCHEMES LIQUID SCHEME* RETAIL SCHEMES Particulars Principal Debt Opportunities Principal Principal Retail Principal Debt Savings Fund - Fund - Conservative Plan Cash Management Fund Money Manager Fund ~ Retail Plan ~ Nature of the An Open-ended Debt Scheme An Open-ended Liquid Scheme An Open-ended Debt Scheme An Open-ended Income Fund Scheme Allotment Date - Regular Plan September 14, 2004 August 30, 2004 December 28, 2007 December 30, Direct Plan January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Investment Plans/ Regular Plan and Direct Plan. Regular Plan and Direct Plan. Growth & Dividend Regular Plan and Direct Plan. Options + / Both the Plans offer Both the Plans offer Both the Plans offer Both the Plans offer Dividend & Growth Option. Dividend & Growth Option. Dividend & Growth Option. Dividend ~ and Growth Option. Dividend Frequencies Dividend Frequency - Dividend Frequency - Dividend Frequency - Regular Plan ~ : Dividend Frequency - Daily / Weekly / Monthly Daily / Weekly / Monthly Daily / Weekly / Monthly. Monthly / Quarterly Direct Plan: Monthly (Reinvestment) Fund Manager & Pankaj Jain Pankaj Jain Pankaj Jain Pankaj Jain Managing the January 2012 January 2012 January 2012 January 2012 Current Fund from Total Investment 11 years 11 years 11 years 11 years Experience Benchmark Crisil Liquid Fund Index Crisil Liquid Fund Index Crisil Liquid Fund Index Crisil Short Term Bond Fund Index Minimum New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 New Investor: ` 5,000 Application Amount Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Existing Investor: ` 1,000 Cut Off Time Subscription # 3.00 pm 2.00 pm 3.00 pm 3.00 pm Redemption 3.00 pm 3.00 pm 3.00 pm 3.00 pm Exit Load Nil Nil Nil If redeemed on or before 30 days (including SIP / STP / from the date of allotment - 1%. SWP, if available) SIP / SWP / STP Minimum number & Amount of SIP/ SWP/STP (if available) Available 6 installments of SIP - ` 2,000/- each, STP - ` 1,000/- each & SWP - ` 500/- each. * In respect of Liquid Scheme(s) applicable shall be subject to receipt of valid application/switch-in request at the OPT and credit of entire subscription/switch-in amounts into the Bank Account of the concerning Scheme(s)/ Plan(s) and funds are available for utilization by the Scheme(s)/Plan(s), within relevant cut-off time as applicable to the relevant Scheme(s)/Plan(s). # In respect of purchase/switch-in of units in any of the Schemes (other than Liquid Schemes) for an amount equal to or more than ` 2 Lakhs, the closing (Net Asset Value) of the day shall be applicable subject to realisation of the funds upto 3.00 p.m. and receipt of application (duly time stamped). ~ Subscriptions (by way of purchase / switch in or in any mode) is restricted only for individual investors (including HUFs, Association of Persons & where an individual is an ultimate beneficiary). Further, (a) Daily & Weekly Dividend Option and the Payout & Sweep facility to Monthly Dividend Option under Regular Plan of Principal Retail Money Manager Fund and (b) Dividend Option under Regular Plan of Principal Debt Savings Fund - Retail Plan. Direct Plan under the Scheme do not offer this Options. + Effective January 1, 2013, new plan i.e. Direct Plan has been launched, for those investors who purchase/susbcribe units in a scheme directly with the Fund and not through a Distributor. Both Regular Plan & Direct Plan share a common portfolio. 7

8 Principal Large Cap Fund (An open-ended equity scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option : ` ` Dividend Option : ` ` To provide capital appreciation and /or dividend distribution by predominantly investing in companies having a large market capitalization. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend June 24, July 28, February 5, May 15, Past performance may or may not be sustained in the future. * On face value of ` 10. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 15.64% Beta^ 0.88 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 1.12 Expense Ratio (Regular Plan) #+ 2.53% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. MARKET CAP ALLOCATION (As on February 28, 2014) % of Equity & Equity Related Instruments of Large Cap Companies Equity & Equity Related Instruments of Mid Cap & Other Companies Cash and Other Assets 3.12 Instrument Industry % of Equity Infosys Software 7.90 ICICI Bank Banks 6.44 ITC Consumer Non Durables 6.38 Housing Development Finance Corpn. Finance 5.06 Larsen & Toubro Construction Project 4.97 HDFC Bank Banks 4.83 HCL Technologies Software 4.78 Reliance Industries Petroleum Products 3.98 Tata Motors Auto 3.93 Tata Consultancy Services Software 3.82 Divi s Laboratories Pharmaceuticals 3.49 Bharti Airtel Telecom - Services 3.03 Motherson Sumi Systems Auto Ancillaries 2.93 Apollo Tyres Auto Ancillaries 2.93 Wipro Software 2.73 Axis Bank Banks 2.54 Shree Cements Cement 2.25 State Bank of India Banks 2.00 Tech Mahindra Software 1.93 ING Vysya Bank Banks 1.84 Bharat Petroleum Corporation Petroleum Products 1.76 Crompton Greaves Industrial Capital Goods 1.70 Maruti Suzuki India Auto 1.48 Dr. Reddy's Laboratories Pharmaceuticals 1.42 Nestle India Consumer Non Durables 1.42 Oil India Oil 1.33 Aditya Birla Nuvo Services 1.28 Bank of Baroda Banks 1.10 Sesa Sterlite Minerals/Mining 0.93 Sun TV Network Media & Entertainment 0.86 Ultratech Cement Cement 0.76 Hero MotoCorp Auto 0.73 Indusind Bank Banks 0.71 Colgate Palmolive (India) Consumer Non Durables 0.69 The Federal Bank Banks 0.68 Voltas Construction Project 0.50 Bank of India Banks 0.49 Bata India Consumer Durables 0.47 National Aluminium Company Non - Ferrous Metals 0.42 Ashok Leyland Auto 0.39 Cash and Other Assets 3.12 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Software Banks 21.16% 20.63% Consumer Non Durables Auto Auto Ancillaries Petroleum Products Construction Project Finance Pharmaceuticals Telecom - Services 8.49% 6.53% 5.86% 5.74% 5.47% 5.06% 4.91% 3.03% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% (% of ) 8

9 Principal Emerging Bluechip Fund (An open-ended equity scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option : ` ` Dividend Option : ` ` To achieve long-term capital appreciation by investing in equity & equity related instruments of Mid Cap & Small Cap companies. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend October 15, June 19, Past performance may or may not be sustained in the future. * On face value of ` 10. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 18.68% Beta^ 0.87 Sharpe Ratio^ (Annualised) 0.05 Portfolio Turnover Ratio** 0.61 Expense Ratio (Regular Plan) #+ 2.55% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. MARKET CAP ALLOCATION (As on February 28, 2014) % of Equity and equity related instruments of Mid Cap Companies Equity and equity related instruments of Small Cap Companies 7.67 Equity and equity related instruments of Companies other than Mid & Small Cap 5.70 Cash and Money Market / Fixed Income Securities (including MIBOR Linked Short Term Papers & Securitised Debt) 1.40 Derivatives 0.37 Market Cap Range for CNX Midcap Stocks As on December 31, 2013 ` 55, Cr ` 1, Crs Instrument Industry % of Equity Amara Raja Batteries Auto Ancillaries 4.70 Tech Mahindra Software 3.98 Divi's Laboratories Pharmaceuticals 3.12 Aurobindo Pharma Pharmaceuticals 3.03 IPCA Laboratories Pharmaceuticals 3.01 Motherson Sumi Systems Auto Ancillaries 2.98 Kaveri Seed Company Consumer Non Durables 2.97 The Federal Bank Banks 2.91 HCL Technologies Software 2.87 ICICI Bank Banks 2.83 Shree Cements Cement 2.56 Eicher Motors Auto 2.56 The Jammu & Kashmir Bank Banks 2.53 Apollo Tyres Auto Ancillaries 2.37 Bata India Consumer Durables 2.37 ING Vysya Bank Banks 2.26 Glenmark Pharmaceuticals Pharmaceuticals 2.10 Sadbhav Engineering Construction Project 2.09 Cummins India Industrial Products 2.06 Symphony Consumer Durables 1.79 Britannia Industries Consumer Non Durables 1.76 Lupin Pharmaceuticals 1.72 Oil India Oil 1.66 Aditya Birla Nuvo Services 1.62 Sun TV Network Media & Entertainment 1.62 Gateway Distriparks Transportation 1.61 Indusind Bank Banks 1.59 UPL Pesticides 1.57 Arvind Textile Products 1.55 Escorts Auto 1.55 Tata Global Beverages Consumer Non Durables 1.53 CESC Power 1.49 Oracle Financial Services Software Software 1.48 Asian Paints Consumer Non Durables 1.45 Power Finance Corporation Finance 1.43 Polaris Financial Technology Software 1.35 Bharat Forge Industrial Products 1.26 Mahindra & Mahindra Financial Services Finance 1.19 Hindustan Petroleum Corporation Petroleum Products 1.19 Cox & Kings Transportation 1.16 Torrent Pharmaceuticals Pharmaceuticals 1.13 Godfrey Phillips Consumer Non Durables 1.07 Graphite India Industrial Products 1.05 Hathway Cable & Datacom Media & Entertainment 1.03 MT Educare Diversified Consumer Services 1.00 Max India Finance 0.93 Indraprastha Gas Gas 0.90 Voltas Construction Project 0.86 Hindustan Zinc Non - Ferrous Metals 0.79 JK Cement Cement 0.78 Kalpataru Power Transmission Power 0.73 Indiabulls Power Power 0.71 V.S.T Tillers Tractors Auto 0.61 Himatsingka Seide Textile Products 0.48 Finolex Cables Industrial Products 0.43 Finolex Industries Industrial Products 0.43 Oriental Bank of Commerce Banks 0.22 Rallis India Pesticides 0.21 Derivatives 0.37 Oriental Bank of Commerce Stock Futures 0.37 Cash and Other Assets 1.40 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Pharmaceuticals 14.11% Banks 12.34% Auto Ancillaries Software Consumer Non Durables 10.05% 9.68% 8.78% Industrial Products Auto Consumer Durables Finance Cement 5.23% 4.72% 4.16% 3.55% 3.34% 0.00% 4.00% 8.00% 12.00% 16.00% (% of ) 9

10 Principal Growth (An open-ended equity scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan : ` ` To achieve long-term capital appreciation. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend December 31, March 20, Past performance may or may not be sustained in the future. * On face value of ` 10. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 17.97% Beta^ 0.99 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 0.86 Expense Ratio (Regular Plan) #+ 2.56% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. Instrument Industry % of Equity ICICI Bank Banks 5.14 ITC Consumer Non Durables 5.05 Infosys Software 4.41 HCL Technologies Software 3.97 Apollo Tyres Auto Ancillaries 3.54 Reliance Industries Petroleum Products 3.42 Tata Motors Auto 3.42 Escorts Auto 3.16 Aurobindo Pharma Pharmaceuticals 3.16 Motherson Sumi Systems Auto Ancillaries 2.96 Housing Development Finance Corporation Finance 2.69 HDFC Bank Banks 2.69 Firstsource Solutions Software 2.49 Wipro Software 2.34 Tech Mahindra Software 2.29 Lupin Pharmaceuticals 2.22 The Federal Bank Banks 2.15 Raymond Textile Products 2.12 Britannia Industries Consumer Non Durables 1.93 Jain Irrigation Systems Industrial Products 1.85 Polaris Financial Technology Software 1.77 Maruti Suzuki India Auto 1.53 Bharat Forge Industrial Products 1.43 Zee Entertainment Enterprises Media & Entertainment 1.40 ING Vysya Bank Banks 1.33 Bharat Petroleum Corporation Petroleum Products 1.29 Sesa Sterlite Minerals/Mining 1.27 Bharti Airtel Telecom - Services 1.25 State Bank of India Banks 1.23 Dr. Reddy's Laboratories Pharmaceuticals 1.22 Aditya Birla Nuvo Services 1.19 Larsen & Toubro Construction Project 1.18 Vardhman Special Steel Textiles - Cotton 1.14 Voltas Construction Project 1.14 Cairn India Oil 1.10 Ultratech Cement Cement 1.09 Dabur India Consumer Non Durables 1.04 Godfrey Phillips Consumer Non Durables 1.04 Hathway Cable & Datacom Media & Entertainment 1.03 Oriental Bank of Commerce Banks 0.94 NMDC Minerals/Mining 0.94 Ashok Leyland Auto 0.93 Tata Steel Ferrous Metals 0.91 Indiabulls Power Power 0.88 Jaiprakash Power Ventures Power 0.87 Bank of Baroda Banks 0.83 Indiabulls Real Estate Construction 0.81 Prestige Estates Projects Construction 0.80 Oil India Oil 0.78 National Aluminium Company Non - Ferrous Metals 0.72 JK Cement Cement 0.71 Gujarat Mineral Development Corpn. Minerals/Mining 0.57 Nestle India Consumer Non Durables 0.46 Mile Stone Global Construction Materials 0.02 Cash and Other Assets 4.16 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Software 17.27% Banks 14.31% Consumer Non Durables Auto 9.52% 9.04% Pharmaceuticals Auto Ancillaries 6.60% 6.50% Petroleum Products Industrial Products Minerals/Mining Finance 4.71% 3.28% 2.78% 2.69% 0.00% 5.00% 10.00% 15.00% 20.00% (% of w.e.f. close of business hours on February 28, 2014 Principal Retail Equity Savings Fund has merged into Principal Growth Fund. 10

11 Principal Dividend Yield Fund (An open-ended equity scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan : ` ` To provide capital appreciation and / or dividend distribution by investing predominantly in a well-diversified portfolio of companies that have a relatively high dividend yield. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend October 12, April 24, October 3, April 20, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 17.93% Beta^ 0.99 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 0.47 Expense Ratio (Regular Plan) #+ 2.70% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. Instrument Industry % of Equity ITC Consumer Non Durables 5.76 Hero MotoCorp Auto 4.96 Tata Motors - A Class Auto 4.01 Oil & Natural Gas Corporation Oil 3.85 HCL Technologies Software 3.82 Bajaj Holdings & Investment Finance 3.47 ICICI Bank Banks 3.44 Infosys Software 3.38 Bajaj Auto Auto 3.29 VST Industries Consumer Non Durables 3.18 The Jammu & Kashmir Bank Banks 3.01 NIIT Technologies Software 2.97 Bank of Baroda Banks 2.84 Colgate Palmolive (India) Consumer Non Durables 2.66 Apollo Tyres Auto Ancillaries 2.65 State Bank of India Banks 2.53 Sun TV Network Media & Entertainment 2.50 Cummins India Industrial Products 2.23 Hinduja Ventures Media & Entertainment 2.16 Tata Consultancy Services Software 1.97 Oil India Oil 1.95 ACC Cement 1.82 IPCA Laboratories Pharmaceuticals 1.69 Gateway Distriparks Transportation 1.63 Supreme Industries Industrial Products 1.62 Power Finance Corporation Finance 1.52 Tata Global Beverages Consumer Non Durables 1.46 Reliance Industries Petroleum Products 1.46 Bharat Petroleum Corporation Petroleum Products 1.44 HDFC Bank Banks 1.34 Castrol India Petroleum Products 1.28 Rural Electrification Corporation Finance 1.26 Hindustan Petroleum Corporation Petroleum Products 1.24 The Federal Bank Banks 1.22 Century Textiles & Industries Cement 1.17 Tamil Nadu Newsprint & Papers Paper 1.14 Karur Vysya Bank Banks 1.08 Mcleod Russel India Consumer Non Durables 1.01 Sun Pharmaceuticals Industries Pharmaceuticals 0.92 Maruti Suzuki India Auto 0.92 SML Isuzu Auto 0.90 Hindustan Zinc Non - Ferrous Metals 0.86 Kolte - Patil Developers Construction 0.82 Tata Power Company Power 0.71 Bharti Airtel Telecom - Services 0.67 Oriental Bank of Commerce Banks 0.64 National Buildings Construction Corpn. Construction 0.61 Syndicate Bank Banks 0.59 Tata Steel Ferrous Metals 0.56 Derivatives 0.81 Tata Power Company Stock Futures 0.81 Cash and Other Assets 0.98 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Banks 16.69% Auto 14.08% Consumer Non Durables 14.07% Software 12.14% Finance 6.25% Oil 5.80% Petroleum Products 5.42% Media & Entertainment 4.66% Industrial Products 3.85% Cement 2.99% 0.00% 5.00% 10.00% 15.00% 20.00% (% of ) 11

12 Principal Index Fund - Nifty (An open-ended index scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan : ` ` To invest principally in securities that comprise CNX Nifty (NSE) and subject to tracking errors endeavour to attain results commensurate with the Nifty. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend December 24, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 17.13% Beta^ 0.99 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 0.70 Expense Ratio (Regular Plan) #+ 0.89% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. TRACKING DEVIATION 1.07%* * Trailing 12 months ended February 28, 2014 (Annualized). Instrument Industry % of Equity Infosys Software 8.93 ITC Consumer Non Durables 8.76 Reliance Industries Petroleum Products 6.37 Housing Development Finance Corpn. Finance 6.18 HDFC Bank Banks 6.00 ICICI Bank Banks 5.83 Tata Consultancy Services Software 5.63 Larsen & Toubro Construction Project 4.37 Tata Motors Auto 3.63 Oil & Natural Gas Corporation Oil 2.49 Sun Pharmaceuticals Industries Pharmaceuticals 2.35 State Bank of India Banks 2.29 Mahindra & Mahindra Auto 2.17 HCL Technologies Software 2.04 Axis Bank Banks 1.90 Wipro Software 1.89 Hindustan Unilever Consumer Non Durables 1.88 Dr. Reddy's Laboratories Pharmaceuticals 1.77 Bharti Airtel Telecom - Services 1.65 Kotak Mahindra Bank Banks 1.26 Bajaj Auto Auto 1.26 Lupin Pharmaceuticals 1.15 Hero MotoCorp Auto 1.14 NTPC Power 1.12 Tata Steel Ferrous Metals 1.11 Sesa Sterlite Minerals/Mining 1.06 Asian Paints Consumer Non Durables 1.04 Maruti Suzuki India Auto 1.02 Power Grid Corporation of India Power 1.01 Cipla Pharmaceuticals 0.94 Cairn India Oil 0.93 Ultratech Cement Cement 0.90 Indusind Bank Banks 0.82 GAIL (India) Gas 0.81 Grasim Industries Cement 0.78 Coal India Minerals/Mining 0.75 Hindalco Industries Non - Ferrous Metals 0.66 Bharat Heavy Electricals Industrial Capital Goods 0.64 Ambuja Cements Cement 0.62 Tata Power Company Power 0.61 IDFC Finance 0.57 Bank of Baroda Banks 0.51 ACC Cement 0.50 NMDC Minerals/Mining 0.49 Bharat Petroleum Corporation Petroleum Products 0.47 Jindal Steel & Power Ferrous Metals 0.43 Punjab National Bank Banks 0.40 DLF Construction 0.31 Ranbaxy Laboratories Pharmaceuticals 0.27 Jaiprakash Associates Construction 0.23 Cash and Other Assets 0.06 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Banks Software 19.01% 18.49% Consumer Non Durables 11.68% Auto 9.22% Petroleum Products Finance Pharmaceuticals 6.84% 6.75% 6.48% Construction Project Oil Cement 4.37% 3.42% 2.80% 0.00% 5.00% 10.00% 15.00% 20.00% (% of ) 12

13 Principal SMART Equity Fund (An open-ended equity scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan : ` ` The primary objective of the scheme is to seek to generate long term capital appreciation with relatively lower volatility through systematic allocation of funds into equity; and in debt /money market instruments for defensive purposes. The Scheme will decide on allocation of funds into equity assets based on equity market Price Earning Ratio (PE Ratio) levels. When the markets become expensive in terms of 'Price to Earnings' Ratio'; the Scheme will reduce its allocation to equities and move assets into debt and/or money market instruments and vice versa. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 12.67% Beta^ 0.99 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 1.22 Expense Ratio (Regular Plan) #+ 2.70% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. Instrument Industry/Rating % of Equity Infosys Software 7.10 ICICI Bank Banks 5.80 ITC Consumer Non Durables 5.75 Housing Development Finance Corpn. Finance 4.55 Larsen & Toubro Construction Project 4.47 HDFC Bank Banks 4.34 HCL Technologies Software 4.28 Reliance Industries Petroleum Products 3.58 Tata Motors Auto 3.50 Tata Consultancy Services Software 3.49 Divi's Laboratories Pharmaceuticals 2.94 Bharti Airtel Telecom - Services 2.71 Motherson Sumi Systems Auto Ancillaries 2.63 Apollo Tyres Auto Ancillaries 2.62 Wipro Software 2.45 Axis Bank Banks 2.28 Shree Cements Cement 2.02 State Bank of India Banks 1.80 Tech Mahindra Software 1.73 ING Vysya Bank Banks 1.65 Bharat Petroleum Corporation Petroleum Products 1.58 Crompton Greaves Industrial Capital Goods 1.53 Maruti Suzuki India Auto 1.33 Dr. Reddy's Laboratories Pharmaceuticals 1.28 Nestle India Consumer Non Durables 1.28 Oil India Oil 1.20 Aditya Birla Nuvo Services 1.15 Bank of Baroda Banks 0.99 Sesa Sterlite Minerals/Mining 0.84 Sun TV Network Media & Entertainment 0.77 Ultratech Cement Cement 0.69 Hero MotoCorp Auto 0.66 Indusind Bank Banks 0.64 Colgate Palmolive (India) Consumer Non Durables 0.62 The Federal Bank Banks 0.61 Voltas Construction Project 0.45 Bank of India Banks 0.44 Bata India Consumer Durables 0.42 National Aluminium Company Non - Ferrous Metals 0.38 Ashok Leyland Auto 0.35 Commercial Paper Sabero Organics Gujarat A Cash and Other Assets SECTOR ALLOCATION OF EQUITY INSTRUMENTS (TOP 10) (As on February 28, 2014) Software 19.05% Banks 18.55% Consumer Non Durables 7.65% Auto 5.84% Auto Ancillaries 5.25% Petroleum Products 5.16% Construction Project 4.92% Finance 4.55% Pharmaceuticals 4.22% Telecom - Services 2.71% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% (% of ) 13

14 Principal Personal Tax Saver Fund (An open-ended equity linked savings scheme) ` crore per unit (As on February 28, 2014) Direct Plan: ` Regular Plan: ` To provide long term growth of capital. The Investment Manager will aim to achieve a return on assets in excess of the performance of S&P BSE 100 Index. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend March 25, February 26, December 31, October 30, March 13, November 2, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 16.00% Beta^ 0.89 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 1.14 Expense Ratio (Regular Plan) #+ 2.52% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. Instrument Industry % of Equity Infosys Software 8.00 ITC Consumer Non Durables 6.52 ICICI Bank Banks 6.49 Housing Development Finance Corpn. Finance 5.12 Larsen & Toubro Construction Project 5.00 HDFC Bank Banks 4.84 HCL Technologies Software 4.78 Reliance Industries Petroleum Products 4.02 Tata Motors Auto 3.93 Tata Consultancy Services Software 3.86 Divi's Laboratories Pharmaceuticals 3.54 Bharti Airtel Telecom - Services 3.06 Motherson Sumi Systems Auto Ancillaries 2.97 Apollo Tyres Auto Ancillaries 2.93 Wipro Software 2.75 Axis Bank Banks 2.60 ## Conditions Apply. Also, subject to a maximum of ` 1 lakh. Free Accidental Death Insurance 150 times the number of units## Shree Cements Cement 2.29 State Bank of India Banks 2.01 Tech Mahindra Software 1.94 ING Vysya Bank Banks 1.88 Bharat Petroleum Corporation Petroleum Products 1.79 Crompton Greaves Industrial Capital Goods 1.72 Maruti Suzuki India Auto 1.50 Nestle India Consumer Non Durables 1.46 Dr. Reddy's Laboratories Pharmaceuticals 1.42 Oil India Oil 1.37 Aditya Birla Nuvo Services 1.32 Bank of Baroda Banks 1.12 Sesa Sterlite Minerals/Mining 0.95 Sun TV Network Media & Entertainment 0.87 Ultratech Cement Cement 0.77 Indusind Bank Banks 0.73 Hero MotoCorp Auto 0.72 Colgate Palmolive (India) Consumer Non Durables 0.69 The Federal Bank Banks 0.69 Voltas Construction Project 0.50 Bank of India Banks 0.50 Bata India Consumer Durables 0.48 National Aluminium Company Non - Ferrous Metals 0.43 Ashok Leyland Auto 0.40 Cash and Other Assets 2.04 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Software Banks 21.33% 20.86% Consumer Non Durables Auto Auto Ancillaries Petroleum Products Construction Project Finance Pharmaceuticals Telecom - Services 8.67% 6.55% 5.90% 5.81% 5.50% 5.12% 4.96% 3.06% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% (% of ) 14

15 Principal Tax Savings Fund (An open-ended equity linked savings scheme) ` crore per unit (As on February 28, 2014) Direct Plan: ` Regular Plan: ` To build a high quality growth-oriented portfolio to provide long-term capital gains to the investors. The scheme aims at providing returns through capital appreciation. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend March 31, January 15, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 17.79% Beta^ 0.98 Sharpe Ratio^ (Annualised) 0.01 Portfolio Turnover Ratio** 0.86 Expense Ratio (Regular Plan) #+ 2.58% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. Instrument Industry % of Equity ICICI Bank Banks 5.24 ITC Consumer Non Durables 5.10 Infosys Software 4.44 HCL Technologies Software 4.00 Apollo Tyres Auto Ancillaries 3.54 Reliance Industries Petroleum Products 3.46 Tata Motors Auto 3.42 Escorts Auto 3.21 Aurobindo Pharma Pharmaceuticals 3.18 Motherson Sumi Systems Auto Ancillaries 3.00 Housing Development Finance Corpn. Finance 2.73 HDFC Bank Banks 2.70 Firstsource Solutions Software 2.48 Wipro Software 2.36 Tech Mahindra Software 2.32 Lupin Pharmaceuticals 2.22 The Federal Bank Banks 2.19 Raymond Textile Products 2.15 Britannia Industries Consumer Non Durables 1.94 Jain Irrigation Systems Industrial Products 1.88 Polaris Financial Technology Software 1.79 Free Personal Accident Death Insurance upto ` 5 lacs ## Maruti Suzuki India Auto 1.55 Bharat Forge Industrial Products 1.44 Zee Entertainment Enterprises Media & Entertainment 1.42 ING Vysya Bank Banks 1.35 Bharat Petroleum Corporation Petroleum Products 1.31 Sesa Sterlite Minerals/Mining 1.29 Bharti Airtel Telecom - Services 1.26 State Bank of India Banks 1.24 Dr. Reddy's Laboratories Pharmaceuticals 1.23 Aditya Birla Nuvo Services 1.22 Larsen & Toubro Construction Project 1.21 Vardhman Special Steel Textiles - Cotton 1.15 Voltas Construction Project 1.14 Cairn India Oil 1.13 Ultratech Cement Cement 1.10 Dabur India Consumer Non Durables 1.05 Hathway Cable & Datacom Media & Entertainment 1.04 Godfrey Phillips Consumer Non Durables 1.04 Oriental Bank of Commerce Banks 0.95 NMDC Minerals/Mining 0.95 Ashok Leyland Auto 0.93 Tata Steel Ferrous Metals 0.92 Indiabulls Power Power 0.91 Jaiprakash Power Ventures Power 0.89 Bank of Baroda Banks 0.85 Indiabulls Real Estate Construction 0.82 Prestige Estates Projects Construction 0.81 Oil India Oil 0.80 National Aluminium Company Non - Ferrous Metals 0.73 JK Cement Cement 0.72 Gujarat Mineral Development Corporation Minerals/Mining 0.59 Nestle India Consumer Non Durables 0.47 Cash and Other Assets 3.14 SECTOR ALLOCATION (TOP 10) (As on February 28, 2014) Software 17.39% Banks 14.52% Consumer Non Durables Auto 9.60% 9.11% Pharmaceuticals Auto Ancillaries 6.63% 6.54% Petroleum Products Industrial Products Minerals/Mining Finance 4.77% 3.32% 2.83% 2.73% 0.00% 5.00% 10.00% 15.00% 20.00% ## Conditions Apply. (% of ) 15

16 Principal Balanced Fund (An open-ended balanced scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan : ` ` To provide long term appreciation and current income by investing in a portfolio of equity, equity related securities and fixed income securities. DIVIDEND UPDATE (REGULAR PLAN) Date Dividend (`/Unit)* Cum Dividend March 24, November 5, November 9, Past performance may or may not be sustained in the future. * On face value of ` 10. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIOS & OTHER DETAILS (As on February 28, 2014) Standard Deviation^ (Annualised) 12.82% Beta^ 1.00 Sharpe Ratio^ (Annualised) Portfolio Turnover Ratio** 0.70 Expense Ratio (Regular Plan) #+ 2.70% Note: ^ The above measures have been calculated by taking rolling returns for a 3 year period with % risk free rate of return (91 days - T Bill Rate as on Feb. 26, 2014). ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. # Calculated as year to date ratio to average AUM, excluding service tax on management fees. + Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under the Direct Plan. AVERAGE MATURITY (As on February 28, 2014) 0.86 years MODIFIED DURATION (As on February 28, 2014) 0.71 years Instrument Industry / Rating % of Equity ICICI Bank Banks 3.61 ITC Consumer Non Durables 3.55 Infosys Software 3.10 HCL Technologies Software 2.79 Apollo Tyres Auto Ancillaries 2.49 Tata Motors Auto 2.38 Reliance Industries Petroleum Products 2.36 Escorts Auto 2.22 Aurobindo Pharma Pharmaceuticals 2.22 Motherson Sumi Systems Auto Ancillaries 2.04 Housing Development Finance Corpn. Finance 1.88 HDFC Bank Banks 1.86 Firstsource Solutions Software 1.75 Tech Mahindra Software 1.61 Wipro Software 1.61 Lupin Pharmaceuticals 1.56 Raymond Textile Products 1.49 The Federal Bank Banks 1.46 Britannia Industries Consumer Non Durables 1.36 Jain Irrigation Systems Industrial Products 1.27 Polaris Financial Technology Software 1.18 Maruti Suzuki India Auto 1.07 Zee Entertainment Enterprises Media & Entertainment 1.02 Bharat Forge Industrial Products 0.98 ING Vysya Bank Banks 0.92 Bharat Petroleum Corporation Petroleum Products 0.89 State Bank of India Banks 0.88 Bharti Airtel Telecom - Services 0.86 Sesa Sterlite Minerals/Mining 0.84 Aditya Birla Nuvo Services 0.82 Larsen & Toubro Construction Project 0.81 Dr. Reddy's Laboratories Pharmaceuticals 0.81 Vardhman Special Steel Textiles - Cotton 0.79 Cairn India Oil 0.76 Voltas Construction Project 0.76 Ultratech Cement Cement 0.71 Hathway Cable & Datacom Media & Entertainment 0.71 Dabur India Consumer Non Durables 0.69 Godfrey Phillips Consumer Non Durables 0.69 NMDC Minerals/Mining 0.65 Tata Steel Ferrous Metals 0.64 Ashok Leyland Auto 0.61 Oriental Bank of Commerce Banks 0.61 Prestige Estates Projects Construction 0.59 Oil India Oil 0.58 Indiabulls Power Power 0.57 Jaiprakash Power Ventures Power 0.56 Indiabulls Real Estate Construction 0.54 Bank of Baroda Banks 0.53 National Aluminium Company Non - Ferrous Metals 0.46 JK Cement Cement 0.45 Gujarat Mineral Development Corpn. Minerals/Mining 0.37 Nestle India Consumer Non Durables 0.30 Cipla Pharmaceuticals 0.09 Certificate of Deposit Indian Bank A Treasury Bill 0.24 T-Bill 91 Day 2014 Sovereign 0.24 Bonds & NCDs Power Finance Corporation AAA Cash and Other Assets SECTOR ALLOCATION OF EQUITY INSTRUMENTS (TOP 10) (As on February 28, 2014) Software 12.04% Banks 9.87% Consumer Non Durables Auto 6.59% 6.28% Pharmaceuticals Auto Ancillaries Petroleum Products Industrial Products Finance Minerals/Mining 4.68% 4.53% 3.25% 2.25% 1.88% 1.86% 0.00% 4.00% 8.00% 12.00% 16.00% (% of ) 16

17 Principal Debt Savings Fund (An open-ended income fund) - Monthly Income Plan (Monthly Income is not assured and is subject to the availability of distributable surplus.) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan : ` ` Dividend Plan (Monthly): ` ` Dividend Plan (Quarterly): ` ` To generate regular income through investments in fixed income securities so as to make periodical income distribution to the Unitholders and also to generate long-term capital appreciation by investing a portion of the Scheme s assets in equity and equity related instruments. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) June 24, May 24, April 23, Quarterly Dividend (Last 3 Quarters) June 24, March 22, December 24, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. RATIO (As on February 28, 2014) Portfolio Turnover Ratio** ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. Instrument Industry/Rating % of Certificate of Deposit State Bank of Patiala A UCO Bank A Commercial Paper JM Financial Products A Treasury Bill 1.28 T-Bill 91 Day 2014 Sovereign 1.28 Sovereign % GOI -M- 25-Nov-2023 Sovereign % GOI -M- 10-Dec-2020 Sovereign Bonds & NCDs Fullerton India Credit Company AA Lafarge India AA Dr. Reddy's Laboratories AA Investment Funds/Mutual Funds 9.01 Principal Index Fund - Direct - Growth Plan Mutual Funds 9.01 Cash and Other Assets 5.43 COMPOSITION BY ASSETS (As on February 28, 2014) Industry / Ratings % of Sovereign Certificate of Deposit Commercial Paper BONDS & NCDs Investment Funds/Mutual Funds 9.01 Treasury Bill 1.28 Cash & Other Assets 5.43 AVERAGE MATURITY (As on February 28, 2014) RATING PROFILE (As on February 28, 2014) 3.17 years MODIFIED DURATION (As on February 28, 2014) 2.22 years A1+ Sovereign 31.81% 43.42% AA+ Cash and Other Assets (incl. MF Units) 10.33% 14.44% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% (% of ) 17

18 Principal Government Securities Fund (An open-ended dedicated gilt scheme investing in government securities) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Quarterly Dividend Option: ` ` Annual Dividend Option: ` ` To generate return through investment in sovereign securities and thus provide capital gains and income distribution to its Unitholders. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Quarterly Dividend Option (Last 3 Quarters) June 24, March 22, December 24, Annual Dividend Option (Last 3 Years) September 24, September 24, September 23, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. Instrument Rating % of Treasury Bill 2.87 T-Bill 91 Day 2014 Sovereign 2.87 Sovereign % GOI -M- 10-DEC-2020 Sovereign % GOI -M - 25-NOV-2023 Sovereign % GOI -M- 15-FEB-27 Sovereign % GOI -M- 03-JUN-2019 Sovereign % GOI -M- 21-SEP-2027 Sovereign 9.00 Cash and Other Assets COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Sovereign Treasury Bill 2.87 Cash and Other Assets RATING PROFILE (As on February 28, 2014) Sovereign 70.74% AVERAGE MATURITY (As on February 28, 2014) 6.2 years MODIFIED DURATION (As on February 28, 2014) 3.99 years MATURITY PROFILE Period Portfolio (%) Less than 3 years years Above 10 years Cash and Other Assets Cash and Other Assets 29.26% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% (% of ) 18

19 Principal Income Fund - Long Term Plan (An open-ended income scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Quarterly): ` ` Dividend Option (Annual): ` ` To generate regular income and capital appreciation/accretion through investment in debt instruments and related securities besides preservation of capital. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Quarterly Dividend Option (Last 3 Quarters) June 24, March 22, December 24, Annual Dividend Option (Last 3 Years) September 24, September 24, September 23, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 4.62 years MODIFIED DURATION (As on February 28, 2014) 3.23 years Instrument Rating % of Commercial Paper 3.77 JM Financial Products A Treasury Bill 2.82 T-Bill 91 Day 2014 Sovereign 2.82 Sovereign % GOI -M- 10-DEC-2020 Sovereign % GOI -M- 25-NOV-2023 Sovereign % GOI -M- 03-JUN-2019 Sovereign % GOI -M- 21-SEP-2027 Sovereign % GOI -M- 15-FEB-27 Sovereign 2.00 Bonds & NCDs Housing Development Finance Corporation AAA 8.63 LIC Housing Finance AAA 8.57 Rural Electrification Corporation AAA 8.42 Export Import Bank of India AAA 4.31 Cash and Other Assets COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Sovereign BONDS & NCDs Commercial Paper 3.77 Treasury Bill 2.82 Cash and Other Assets RATING PROFILE (As on February 28, 2014) MATURITY PROFILE Sovereign 44.55% Period Portfolio (%) Less than 1 year years years years Above 10 years 5.60 Cash & Others Assets AAA 29.93% A % Cash and Other Assets 21.75% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% (% of ) 19

20 Principal Debt Opportunities Fund - Corporate Bond Plan (An open-ended debt scheme) ` 4.28 crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Monthly): ` ` The primary objective is to generate income and capital gains through investments in a portfolio of securities issued by Private and Public Sector Companies. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 1,000/-. Past performance may or may not be sustained in the future. All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 0.89 years MODIFIED DURATION (As on February 28, 2014) 0.75 year Instrument Rating % of Commercial Paper Redington (India) A Vardhman Special Steel A Jm Financial Products A Essel Mining & Industries A Treasury Bill 0.25 T-Bill 91 Day 2014 Sovereign 0.25 Bonds & NCDs Rural Electrification Corporation AAA Cholamandlam Investment & Finance Co. AA Indian Oil Corporation AAA 9.75 Tata Capital Financial Services AA Cash and Other Assets COMPOSITION BY ASSETS (As on February 28, 2014) Industry / Ratings % of Commercial Paper Bonds & NCDs Treasury Bill 0.25 Cash and Other Assets RATING PROFILE (As on February 28, 2014) A % AAA 26.92% AA 12.41% AA+ Sovereign 0.25% 2.98% Cash and Other Assets 10.36% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% (% of ) 20

21 Principal Income Fund Short Term Plan (An open-ended income scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Monthly): ` ` To generate regular income and capital appreciation/ accretion through investment in debt instruments and related securities besides preservation of capital and has been designed to achieve stable returns over shorter-term investment horizons. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 1.62 years MODIFIED DURATION (As on February 28, 2014) 1.34 years Instrument Rating % of Certificate of Deposit Canara Bank A State Bank of Patiala A Commercial Paper 3.56 JM Financial Products A Treasury Bill 0.98 T-Bill 91 Day 2014 Sovereign 0.98 Sovereign % GOI -M- 10-DEC-2020 Sovereign % GOI -M- 03-JUN-2019 Sovereign 3.43 Bonds & NCDs Housing Development Finance Corporation AAA Tata Motors AA 7.26 Tata Capital Financial Services AA Fullerton India Credit Company AA LIC Housing Finance AAA 3.65 Cholamandlam Investment & Finance Company AA 3.27 Power Finance Corporation AAA 0.64 Cash and Other Assets 8.85 COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of BONDS & NCDs Certificate of Deposit Sovereign 6.92 Commercial Paper 3.56 Treasury Bill 0.98 Cash and Other Assets 8.85 RATING PROFILE (As on February 28, 2014) A % AAA 22.60% AA AA % 7.95% Sovereign Cash and Other Assets 7.90% 8.85% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% (% of ) 21

22 Principal Bank CD Fund (An open-ended debt scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Monthly): ` ` The objective is to generate returns by primarily investing in Bank CDs. Bank CDs provide liquidity and a relatively lower credit risk. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 1,000/- Past performance may or may not be sustained in the future. All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 71 days Instrument Rating % of Certificate of Deposit Bank of India A Indian Bank A Bank of Baroda A Andhra Bank A UCO Bank A Oriental Bank of Commerce A Treasury Bill 0.23 T-Bill 91 Day 2014 Sovereign 0.23 Bonds & NCDs 9.46 Housing Development Finance Corporation AAA 9.46 Cash and Other Assets 2.27 COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Certificate of Deposit Bonds & NCDs 9.46 Treasury Bill 0.23 Cash and Other Assets 2.27 RATING PROFILE (As on February 28, 2014) MODIFIED DURATION (As on February 28, 2014) 71 days A % AAA 9.46% Sovereign 0.23% Cash and Other Assets 2.27% 0.00% 20.00% 40.00% 60.00% 80.00% % (% of ) 22

23 Principal Debt Opportunities Fund - Conservative Plan (An open-ended debt scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Daily): ` ` Dividend Option (Weekly): ` ` Dividend Option (Monthly): ` ` To generate regular income and capital appreciation through investments in debt securities and money market instruments. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 1,000/-. Past performance may or may not be sustained in the future. All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 73 days Commercial Paper SREI Equipment Finance A Essel Mining & Industries A Chambal Fertilizers & Chemicals A Religare Finvest A Piramal Enterprises A Edelweiss Financial Services A Treasury Bill 1.27 T-Bill 91 Day 2014 Sovereign 1.27 Bonds & NCDs 1.47 Tata Sons AAA 1.47 Cash and Other Assets 0.30 COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Commercial Paper Certificate of Deposit Bonds & NCDs 1.47 Treasury Bill 1.27 Cash and Other Assets 0.30 RATING PROFILE (As on February 28, 2014) Credit Risk Rating [ICRA] AAAmfs ++ MODIFIED DURATION (As on February 28, 2014) 73 days A % AAA 1.47% Instrument Rating % of Certificate of Deposit Indian Bank A Canara Bank A State Bank of Mysore A Corporation Bank A State Bank of Patiala A Sovereign Cash and Other Assets 1.27% 0.30% 0.00% 20.00% 40.00% 60.00% 80.00% % (% of ) Past performance is no guarantee of future result. ( ++ for rating methodology please refer page 34.) 23

24 Principal Cash Management Fund (An open-ended liquid scheme) Credit Risk Rating [ICRA] A1+mfs ++ ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Daily): ` ` Dividend Option (Weekly): ` ` Dividend Option (Monthly): ` ` To provide investors with as high a level of income available from short-term investments as is considered consistent with preservation of capital and maintenance of liquidity, by investing in a portfolio of money market and investment grade debt instruments. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 1,000/-. Past performance may or may not be sustained in the future. All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 17 days MODIFIED DURATION (As on February 28, 2014) 17 days Instrument Rating % of Certificate of Deposit Indian Bank A Punjab & Sind Bank A Union Bank of India A Dena Bank A State Bank of Mysore A Bank of Baroda A Andhra Bank A Commercial Paper SREI Equipment Finance A Housing Development Finance Corporation A Religare Finvest A Supreme Industries A Sabero Organics Gujarat A Piramal Enterprises A Vardhman Special Steel A Edelweiss Financial Services A Chambal Fertilizers & Chemicals A Magma Housing Finance A Redington (India) A Kotak Commodity Services A Treasury Bill 0.91 T-Bill 91 Day 2014 Sovereign 0.91 Fixed Deposit The South Indian Bank Unrated 6.89 Canara Bank Unrated 5.17 Cash and Other Assets 4.79 COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Commercial Paper Certificate of Deposit Fixed Deposit Treasury Bill 0.91 Cash and Other Assets 4.79 RATING PROFILE (As on February 28, 2014) A % Unrated 12.06% Sovereign Cash and Other Assets 0.91% 4.79% 0.00% 20.00% 40.00% 60.00% 80.00% % (% of ) Past performance is no guarantee of future result. ( ++ for rating methodology please refer page 34.) 24

25 Principal Global Opportunities Fund (An open-ended Fund of Funds scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option: ` ` To provide long term capital appreciation by predominantly investing in overseas mutual fund schemes, and a certain portion of its corpus in Money Market Securities and/or units of Money Market / Liquid Schemes of Principal Mutual Fund. Instrument % of Foreign Securities I. Units of Mutual Fund / Unit Trust Principal Global Investors Funds - Emerging Markets Equity Fund II. Cash and Other Current Assets 0.47 Principal Retail Money Manager Fund (An open-ended debt scheme) ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Option: ` ` Dividend Option (Daily): N.A. ` Dividend Option (Weekly): N.A. ` Dividend Option (Monthly): ` ` To generate regular income & capital appreciation through investments in debt securities and money market instruments. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, * On face value of ` 1,000/-. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. AVERAGE MATURITY (As on February 28, 2014) 26 days Instrument Rating % of Certificate of Deposit Bank of Baroda A Indian Bank A Commercial Paper Religare Finvest A Redington (India) A Supreme Industries A Srei Equipment Finance A Sabero Organics Gujarat A Magma Housing Finance A Vardhman Special Steel A Treasury Bill 0.19 T-Bill 91 Day 2014 Sovereign 0.19 Cash and Other Assets 3.27 COMPOSITION BY ASSETS (As on February 28, 2014) Ratings % of Commercial Paper Certificate of Deposit Treasury Bill 0.19 Cash and Other Assets 3.27 RATING PROFILE (As on February 28, 2014) MODIFIED DURATION (As on February 28, 2014) 26 days A1+ Sovereign 0.19% 96.54% Cash and Other Assets 3.27% 0.00% 20.00% 40.00% 60.00% 80.00% % (% of ) 25

26 Principal Debt Savings Fund (An open-ended income fund) - Retail Plan ` crore per unit (As on February 28, 2014) Direct Plan Regular Plan Growth Plan: ` ` Dividend Plan (Monthly): N.A. ` Dividend Plan (Quarterly): ` ` To seek to generate stable returns and capital appreciation through investment in Debt instruments and related securities over medium to long term investment horizon. DIVIDEND UPDATE Date Regular Plan Direct Plan Dividend Cum Dividend Cum (`/Unit)* Dividend (`/Unit)* Dividend Monthly Dividend (Last 3 Months) February 24, January 24, December 24, Quarterly Dividend (Last 3 Quarters) December 24, June 24, March 22, * On face value of ` 10. Past performance may or may not be sustained in the future. Note: All Dividend (`/Unit) figures are Gross Dividend. Instrument Rating % of Certificate of Deposit UCO Bank A Canara Bank A Commercial Paper Essel Mining & Industries A Treasury Bill 1.28 T-Bill 91 Day 2014 Sovereign 1.28 Bonds & NCDs Power Finance Corporation AAA Fullerton India Credit Company AA Power Grid Corporation of India AAA 3.50 Cash and Other Assets COMPOSITION BY ASSETS (As on February 28, 2014) Industry / Ratings of Bonds & NCDs Certificate of Deposit Commercial Paper Treasury Bill 1.28 Cash and Other Assets RATIO (As on February 28, 2014) Portfolio Turnover Ratio** ** The Portfolio Turnover Rate (PTR) means the lower of aggregate sales or purchases made during the 12 month rolling year/period divided by the 12 month rolling year/period Average asset under Management for the relevant year/period. RATING PROFILE (As on February 28, 2014) A1+ AAA 27.03% 48.03% AVERAGE MATURITY (As on February 28, 2014) 0.78 years MODIFIED DURATION (As on February 28, 2014) 0.64 years AA+ 8.68% Sovereign 1.28% Cash and Other Assets 14.98% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% (% of ) 26

27 Returns (As on December 31, 2013) SCHEMES MANAGED BY MR. ANUPAM TIWARI PRINCIPAL LARGE CAP FUND (S&P BSE 100 Index) (CNX Nifty Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Nov-05 to 31-Dec SCHEMES MANAGED BY BEKXY KURIAKOSE PRINCIPAL GOVERNMENT SECURITIES FUND (I-Sec Composite (CRISIL 10 Year Index) Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Aug-01 to 31-Dec N.A. N.A. N.A. N.A. PRINCIPAL PERSONAL TAX SAVER FUND (S&P BSE 100 Index) (CNX Nifty Index) Date Returns $ Returns $ Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Mar-96 to 31-Dec PRINCIPAL DEBT OPPORTUNITIES FUND - CORPORATE BOND PLAN (Crisil Composite Bond (CRISIL 10 Year Fund Index) Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Sep-04 to 31-Dec PRINCIPAL SMART EQUITY FUND (Crisil Balanced (CNX Nifty Index) Fund Index) Date Returns $ Returns $ Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Dec-10 to 31-Dec PRINCIPAL INCOME FUND - LONG TERM PLAN (Crisil Composite (CRISIL 10 Year Bond Fund Index) Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec May-03 to 31-Dec SCHEMES MANAGED BY MR. RAJAT JAIN PRINCIPAL GLOBAL OPPORTUNITIES FUND (MSCI World Index) (CNX Nifty Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Mar-04 to 31-Dec SCHEMES MANAGED BY RUPALI PANDIT PRINCIPAL INDEX FUND - NIFTY (CNX Nifty Index) (S&P BSE Sensex) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Jul-99 to 31-Dec Past performance may or may not be sustained in future. Returns (in %) are calculated on Compounded Annualised Basis. $ PTP (Point to Point) Returns is based on standard investment of ` 10,000/- made at the beginning of relevant period. Performance of the dividend option for the investors would be net of dividend distribution tax, as applicable. ^ Regular Plan - Growth Option [Direct Plan - N.A., Since launched on January 1, 2013] 27

28 Returns (As on December 31, 2013) SCHEMES MANAGED BY MR. P.V.K. MOHAN PRINCIPAL GROWTH FUND (S&P BSE 200 Index) (CNX Nifty Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Oct-00 to 31-Dec PRINCIPAL BALANCED FUND (Crisil Balanced Fund Index) (CNX Nifty Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 ro 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Jan-00 to 31-Dec N.A. N.A PRINCIPAL TAX SAVINGS FUND (S&P BSE 200 Index) (CNX Nifty Index) Date Returns $ Returns $ Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Mar-96 to 31-Dec SCHEMES MANAGED BY MR. DHIMANT SHAH PRINCIPAL EMERGING BLUECHIP FUND (CNX Midcap Index) (CNX Nifty Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Nov-08 to 31-Dec PRINCIPAL DIVIDEND YIELD FUND (CNX Dividend (CNX Nifty Index) Opportunities Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Oct-04 to 31-Dec N.A. N.A SCHEMES MANAGED BY MR. GURVINDER SINGH WASAN PRINCIPAL BANK CD FUND (CRISIL Liquid Fund (CRISIL 1 Year Index) T-Bill Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Nov-07 to 31-Dec PRINCIPAL INCOME FUND - SHORT TERM PLAN (CRISIL Short-Term (CRISIL 10 Year Bond Fund Index) Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec May-03 to 31-Dec Past performance may or may not be sustained in future. Returns (in %) are calculated on Compounded Annualised Basis. $ PTP (Point to Point) Returns is based on standard investment of ` 10,000/- made at the beginning of relevant period. Performance of the dividend option for the investors would be net of dividend distribution tax, as applicable. ^ Regular Plan - Growth Option [Direct Plan - N.A., Since launched on January 1, 2013] 28

29 Returns (As on December 31, 2013) SCHEMES MANAGED BY MR. PANKAJ JAIN PRINCIPAL DEBT OPPORTUNITIES FUND - CONSERVATIVE PLAN (CRISIL Liquid Fund (CRISIL 1 Year Index) T-Bill Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Sep-04 to 31-Dec PRINCIPAL CASH MANAGEMENT FUND (CRISIL Liquid Fund (CRISIL 1 Year Index) T-Bill Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Aug-04 to 31-Dec PRINCIPAL DEBT SAVINGS FUND - MONTHLY INCOME PLAN (Crisil MIP Blended Index) (Crisil 10 year Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec May-02 to 31-Dec PRINCIPAL RETAIL MONEY MANAGER FUND (CRISIL Liquid Fund (CRISIL 1 Year Index) T-Bill Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Dec-07 to 31-Dec PRINCIPAL DEBT SAVINGS FUND - RETAIL PLAN (Crisil Short Term (Crisil 10 year Bond Fund Index) Gilt Index) Date ^Returns $ ^Returns $ ^Returns $ 31-Dec-12 to 31-Dec Dec-11 to 31-Dec Dec-10 to 30-Dec Dec-03 to 31-Dec Past performance may or may not be sustained in future. Returns (in %) are calculated on Compounded Annualised Basis. $ PTP (Point to Point) Returns is based on standard investment of ` 10,000/- made at the beginning of relevant period. Performance of the dividend option for the investors would be net of dividend distribution tax, as applicable. ^ Regular Plan - Growth Option [Direct Plan - N.A., Since launched on January 1, 2013]. 29

30 Tax Rates for Mutual Fund Investors 1 as per the Finance Act, 2013 SNAPSHOT EQUITY ORIENTED FUNDS (SUBJECT TO STT 3 ) Short Term Capital Long Term Capital Dividend Tax on Distributed TDS on Gains Tax (STCG) 2 Gains Tax (LTCG) 2 Income Income Capital Gains 7 Financial Year Resident Individual / 15% 15% Nil Nil Exempt Exempt Nil Nil Nil Nil HUF / AOP / BOI Resident 15% 15% Nil Nil Exempt Exempt Nil Nil Nil Nil Partnership Firms Domestic 15% 15% Nil Nil Exempt Exempt Nil Nil Nil Nil Companies NRIs 4 15% 15% Nil Nil Exempt Exempt Nil Nil STCG - 15% 2 STCG - 15% 2 LTCG - Nil LTCG - Nil FIIs 4 15% 15% Nil Nil Exempt Exempt Nil Nil STCG - Nil 6 STCG - Nil 6 LTCG - Nil 6 LTCG - Nil 6 QFI 15% 15% Nil Nil Exempt Exempt Nil Nil STCG - 15% 2 STCG - 15% 2 (Individual / HUF) 4 LTCG - Nil LTCG - Nil QFI 15% 15% Nil Nil Exempt Exempt Nil Nil STCG - 15% 2 STCG - 15% 2 (Companies) 4 LTCG - Nil LTCG - Nil OTHER THAN EQUITY ORIENTED FUNDS (including Infrastructure Debt Funds 8 ) Short Term Long Term Dividend Tax on Distributed Tax on Distributed TDS on Capital Gains Tax 2 Capital Gains Tax 2 Income Income - Other than Income - Liquid / Capital Gains 7 Liquid / Money Money Market Market Schemes Schemes Resident As per As per 10% 10% Exempt Exempt % % % % Nil Nil Individual / slab rates slab rates (20% with (20% with (12.50% plus (25% plus (25% plus (25% plus HUF Indexation) Indexation) 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus 3% education cess) 3% education cess - 3% education cess) 3% education cess) from to ) % (12.50% plus 10% surcharge plus 3% education cess - from to ) AOP / BOI As per slab As per slab 10% 10% Exempt Exempt % 33.99% % 33.99% Nil Nil rates rates (20% with (20% with (30% plus (30% plus (30% plus (30% plus Indexation) Indexation) 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus 3% education cess) 3%education cess) 3% education cess) 3% education cess) Domestic 30% 30% 10% 10% Exempt Exempt % 33.99% % 33.99% Nil Nil Companies / (20% with (20% with (30% plus (30% plus (30% plus (30% plus Firms Indexation) Indexation) 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus 3% education cess) 3% education cess) 3% education cess) 3% education cess) NRIs 4 As per As per Listed Listed Exempt Exempt % % % % STCG - 30% 2 STCG - 30% 2 slab rates slab rates Units - 10% Units - 10% (12.50% plus (25% plus (25% plus (25% plus LTCG - 20% 2 LTCG - 20% 2 (20% with (20% with 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus with indexation with indexation Indexation) Indexation) 3% education cess) 3% education cess - 3% education cess) 3% education cess) for listed units for listed units Unlisted Unlisted from % 2 10% 2 to ) without indexation without indexation Units - 10% Units - 10% 5.665% for unlisted units 5 for unlisted units 5 (without Indexation) 5 (without Indexation) 5 for IDFs (5% plus 10% surcharge plus 3% education cess - from to ) % (12.50% plus 10% surcharge plus 3% education cess - from to ) (Contd. on next page) 30

31 Tax Rates for Mutual Fund Investors 1 as per the Finance Act, 2013 SNAPSHOT OTHER THAN EQUITY ORIENTED FUNDS (including Infrastructure Debt Funds 8 ) [Contd.] Short Term Long Term Dividend Tax on Distributed Tax on Distributed TDS on Capital Gains Tax 2 Capital Gains Tax 2 Income Income - Other than Income - Liquid / Capital Gains 7 Liquid / Money Money Market Market Schemes Schemes FIIs 4 30% 30% 10% 10% Exempt Exempt % 33.99% % 33.99% STCG - Nil 6 STCG - Nil 6 without Indexation without Indexation (30% plus (30% plus (30% plus (30% plus LTCG - Nil 6 LTCG - Nil 6 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus 3% education cess) 3% education cess) 3% education cess) 3% education cess) 5.665% for IDFs (5% plus 10% surcharge plus 3% education cess - from to ) QFI As per As per Listed Listed Exempt Exempt % % % % STCG - 30% 2 STCG - 30% 2 (Individual/ slab rates slab rates Units - 10% Units - 10% (12.50% plus (25% plus (25% plus (25% plus LTCG - 20% 2 LTCG - 20% 2 HUF) 4 (20% with (20% with 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus with indexation with indexation Indexation) Indexation) 3% education cess) 3% education cess - 3% education cess) 3% education cess) for listed units for listed units Unlisted Unlisted from % 2 10% 2 to ) without indexation without indexation Units - 10% Units - 10% 5.665% for unlisted units 5 for unlisted units 5 (without Indexation) 5 (without Indexation) 5 for IDFs (5% plus 10% surcharge plus 3% education cess - from to ) % (12.50% plus 10% surcharge plus 3% education cess - from to ) QFI 40% 40% Listed Listed Exempt Exempt % 33.99% % 33.99% STCG - 40% 2 STCG - 40% 2 (Companies) 4 Units - 10% Units - 10% (30% plus (30% plus (30% plus (30% plus LTCG - 20% 2 LTCG - 20% 2 (20% with (20% with 5% surcharge plus 10% surcharge plus 5% surcharge plus 10% surcharge plus with indexation with indexation Indexation) Indexation) 3% education cess) 3% education cess) 3% education cess) 3% education cess) for listed units for listed units Unlisted Unlisted 5.665% for 10% 2 10% 2 without indexation without indexation Units - 10% Units - 10% IDFs for unlisted units 5 for unlisted units 5 (without Indexation) 5 (without Indexation) 5 (5% plus 10% surcharge plus 3% education cess - from to ) 1 Resident Individuals, HUF, BOI, AOP, Domestic companies, Non Resident Individuals ('NRIs'), Foreign Institutional Investor ('FIIs') and Qualified Foreign Investors ('QFI'). It is assumed that the units are held as capital assets by the investors. 2 Plus applicable surcharge [refer note 9], if any, and Education Cess at the rate of 2% on income-tax and surcharge and Secondary and Higher Education cess at the rate of 1% on income-tax and surcharge. 3 Securities Transaction Tax ('STT') is applicable in respect of purchase/ sale of units of Equity-oriented funds ('EOFs') on a recognised stock exchange and redemption of EOFs by the mutual fund. Purchase/ sale/ redemption of units other than EOFs are not subject to STT. 4 Non-resident investors / FIIs / QFIs shall be entitled to be governed by provisions of the applicable Tax Treaty, which India has entered with the country of residence of the non-resident investor, if that is more beneficial than the provisions of the Income-tax Act, 1961('the Act'), subject to certain conditions. As per section 90(4) of the Act, a non-resident shall not be entitled to claim treaty benefits, unless the non-resident obtains a Tax Residency Certificate ('TRC') from their home country, containing such particulars as may be prescribed. The Central Board of Direct Taxes has issued a notification dated 17 September, 2012, wherein certain particulars have been prescribed in this regard. 5 As per section 112 of the Act (as amended by the Finance Act, 2012), long-term capital gains in case of non-residents would be 10% on transfer of capital assets, being unlisted securities, computed without giving effect to first & second proviso to section 48 i.e. without taking benefit of foreign currency fluctuation and indexation benefit. 6 Section 196D of the Act provides that no tax is required to be withheld for payment to a FII in respect of capital gains arising on transfer of units. 7 As per provisions of Section 206AA of the Act, if there is default on the part of a non-resident investor (entitled to receive redemption proceeds from the Mutual Fund on which tax is deductible under Chapter XVII of the Act) to provide its Permanent Account Number ('PAN'), the tax shall be deducted at higher of the following rates: i) rates specified in relevant provisions of the Act; or ii) rate or rates in force; or iii) rate of 20%. 8 "Infrastructure debt fund" means a infrastructure debt fund as defined in clause 1 of the regulation 49L of the Securities and Exchange Board of India (Mutual Funds) Regulations, As per clause 1 of regulation 49L, an 'infrastructure debt fund scheme' would mean, a scheme which invests primarily (minimum 90% of scheme assets) in debt securities or securitized debt instrument of infrastructure companies or infrastructure capital companies or infrastructure projects or special purpose vehicles, etc or other permissible assets in accordance with these regulations or bank loans in respect of completed and revenue generating projects of infrastructure companies or projects or special purpose vehicles. (Contd. on next page) 31

32 Tax Rates for Mutual Fund Investors 1 as per the Finance Act, 2013 SNAPSHOT 9 Surcharge applicable for FY : Type of Investor Surcharge rate as a % of Income-tax If income is If income exceeds ` 1 crore If income exceeds less than ` 1 crores but less than ` 10 crores ` 10 crores Individual (including non-resident individuals, QFI-individuals), Nil 10% 10% HUF, AOP & Partnership Firm Domestic Company Nil 5% 10% Foreign Company / FII / QFI (corporates) Nil 2% 5% FII and QFI (non-corporates) Nil 10% 10% Total Income Up to ` 200,000 (a)(b)(d) INCOME TAX RATES FOR INDIVIDUAL / HUF / AOP / BOI for AY Tax Rates (c) ` 200,001 to ` 500,000 10% ` 500,001 to ` 1,000,000 20% ` 1,000,001 and above 30% (a) In the case of a resident individual of the age of 60 years or more but less than 80 years, the basic exemption limit is ` 250,000. (b) In the case of a resident individual of the age of 80 years or more, the basic exemption limit is ` 5,00,000. (c) Plus, surcharge on income-tax, as applicable and education cess is applicable at the rate of 2% on income-tax and secondary and higher education cess at the rate of 1% on income-tax. (d) Rebate of upto ` 2,000 available for resident individuals whose total income does not exceed ` 5,00,000. NIL WEALTH TAX ON MF UNITS Wealth Tax MF units are exempt SECURITIES TRANSACTION TAX Equity Oriented Fund STT on sale of a unit of equity oriented mutual fund to the mutual fund has been reduced to 0.001% w.e.f Prior to this date, STT is chargeable at 0.25%. STT on purchase of units of an equity oriented mutual fund entered into in recognised stock exchange has been reduced to Nil w.e.f Prior to this date, STT is chargeable at 0.1%. Sale of a unit of an equity oriented mutual fund where transaction is entered into in recognized stock exchange and the contract for sale is settled by the actual delivery has been reduced to 0.001% w.e.f Prior to this date, STT is chargeable at 0.1%. Other than Equity Oriented Fund: Purchase/ sale/ redemption of units other than equity-oriented units shall not be subject to STT. Mutual Fund would also pay securities transaction tax wherever applicable on the securities bought/sold As per Section 94(7): The loss due to sale of Units in the schemes (where income distributed on MF units is tax free) will not be available for set-off to the extent of the tax free income distributed; if units are :- (A) Bought within three months prior to the record date fixed for income distribution; and (B) sold within nine months after the record date fixed for income distribution. As per Section 94(8): The loss due to sale of original Units in the schemes, where bonus Units are issued, will not be available for setoff; if original units are :- (A) Bought within three months prior to the record date fixed for allotment of bonus units; and (B) sold within nine months after the record date fixed for allotment of bonus units However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units held on the date of transfer of original units. This information is being provided for basic guidance for investments in mutual funds and is based on provisions of the Income-tax Act, 1961 as proposed by the Finance Act, 2013.The tax implication may vary for each assessee based on the details of his income. All rates and figures appearing are for illustrative purposes only. Tax benefits are subject to change in tax laws. Contents of this note have been drawn for informative purpose only and the same should not be used or considered as an investment/tax advice. The AMC/ Trustee/Sponsor accepts no liability whatsoever for any direct or consequential loss arising from any information provided in this note. 32

33 Understanding Ratios & Risk Measures STANDARD DEVIATION - Is the average deviation from the mean returns. It is an indication of volatility i.e. deviation from mean returns. Lower the better. For instance a scheme that has a consistent four-year return of 3% would have a mean or average of 3%. The standard deviation for this scheme would then be zero because the scheme's return in any given year does not differ from its four-year mean of 3%. On the other hand, a scheme that in each of the last four years returned -5%, 17%, 2% and 30% will have a mean return of 11%. The scheme will also exhibit a high standard deviation because each year the return of the scheme differs from the mean return. This scheme is therefore riskier because it fluctuates widely between negative and positive returns within a short period. Calculation = Square Root of Variance. Where Variance is the average of the squared deviations from mean returns. BETA - Can be interpreted as percentage change in price of a scheme for every one percentage change in the market benchmark. For example if a scheme's beta is 1.1 and the market is expected to go up/down by 10% then the scheme will move up/down by 11%. Calculation = Covariance of Market and Scheme's Returns Divided by Variance of the Market. Where Covariance is the Deviation of Mean Returns of Market multiplied by Deviation of Mean Returns of the scheme. JENSEN'S ALPHA - Gives the average return of the portfolio over and above the risk free rate and market determined return. This is the addition by the fund manager over and above the market return and hence higher the better. Calculation = Portfolio Return - (Risk Free Rate of Return + beta [market return - Risk Free Rate of Return]). SHARPE - Gives the returns per unit of risk. i.e. for every 1 unit of risk what is the returns of the scheme. For this purpose risk is defined as standard deviation of the scheme. Higher the Sharpe, the better. It signifies that scheme with a higher sharpe ratio generates returns taking lesser risk. In other words, the scheme is less volatile and yet generating good returns. Thus, given same returns, the scheme with a higher Sharpe ratio offers a better avenue for investing. Calculation = Average Scheme Return - Risk Free Rate of Return : _ Standard Deviation of the Scheme. PORTFOLIO TURNOVER - Portfolio turnover is a measure of how actively a fund manager trades the portfolio of your scheme. Expressed in percentage or number of times, the inverse of a scheme's turnover ratio is the average holding period for a security in that scheme. If a scheme has a 20 per cent turnover ratio, it would suggest that on average that scheme will hold a security for five years before selling it. A scheme with a 200 per cent turnover ratio will change its portfolio in six months or in other words, replace the entire holdings in its portfolio with new stocks in six months. Calculation = Lower of sales or purchases divided by average AUM for last rolling 12 months. ++ ICRA has assigned credit risk rating of [ICRA]A1+mfs to Principal Cash Management Fund. The rating is the highest-credit-quality short-term rating assigned by ICRA to debt funds. It has also assigned the credit risk rating of [ICRA] AAAmfs to Principal Debt Opportunities Fund - Conservative Plan. The rating is the highest-credit-quality long term rating assigned by ICRA to debt funds. Rating methodology used by ICRA is based on evaluating the inherent credit quality of the mutual funds portfolio. As a measure of the credit quality of a debt fund s assets, ICRA uses the concept of credit scores, based on ICRA s assessment of credit risk associated with each exposure of the portfolio taking into account its maturity. To quantify the credit risk scores, ICRA uses its database of historical default rates for various rating categories for various maturity buckets. The credit risk ratings incorporate ICRA s assessment of a debt fund's published investment objectives and policies, its management characteristics, and the creditworthiness of its investment portfolio. ICRA reviews relevant fund information on an ongoing basis to support its published rating opinions. If the portfolio credit score meets the benchmark of the assigned rating during the review, the rating is retained. In an event that the benchmark credit score is breached, ICRA gives a month's time to the debt fund manager to bring the portfolio credit score within the benchmark credit score. If the debt fund manager is able to reduce the portfolio credit score within the benchmark credit score, the rating is retained. If the portfolio still continues to breach the benchmark credit score, the rating is revised to reflect the change in credit quality. The ratings should, however, not be construed as an indication of the prospective performance of the Mutual fund scheme or of volatility in its returns. ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Source: ICRA Ltd. DISCLAIMER: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This factsheet is for informative purpose only and under no circumstances is to be used or considered as an investment advice. Terms of issue / load structure / Scheme specific risk factors are set forth in the Scheme Information Document(SID). Copy of the same is available at all our Investor Service Centres. Alternatively, Investor can download the SID from our website - or can call us at to get a copy of the same. 33

34 Don't wait till it's too late. The saying isn't 'the late bird gets the worm'. Same with tax planning. The earlier you begin, the easier it is on you. Which is why it makes sense to invest a small amount every month through a Systematic Investment Plan (SIP) in Principal Tax Savings Fund. PRINCIPAL TAX SAVINGS FUND (An open-ended Equity Linked Savings Scheme) Product Label - This product is suitable for investors who are seeking ~ - Long term Capital Growth with a three year lock-in. Investment in equity & equity related securities including equity derivatives of companies across market capitalization. High Risk. (BROWN) ~ Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Note: Risk may be represented as: Investors understand that their principal will be at Low Risk Investors understand that their principal will be at Medium Risk Investors understand that their principal will be at High Risk (Blue); (Yellow); (Brown) * Terms & conditions apply. Please refer the Scheme Information Document (available in our website for details on the Personal Accident Death Insurance Cover. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.