hdfc-cov-feb-11.qxd 3/9/ :51 PM Page 1 Vol. No. 8 Issue No. 8 February 2011

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1 hdfc-cov-feb-11.qxd 3/9/ :51 PM Page 1 Vol. No. 8 Issue No. 8 February 2011

2 hdfc-cov-feb-11.qxd 3/9/ :51 PM Page 2 Vol. No. 8 Issue No. 8 February 2011 ` 6

3 hdfc-mkt1:hdfc-mkt1.qxd 3/9/ :25 PM Page 1 Market Review - February 2011 Equity market update The equity market continued to show weakness with the Sensex and Nifty down about 3% each for the month. The broader market underperformed with the CNX Midcap Index down 7%. Since its recent high in November, the Sensex has corrected 15% while the CNX Midcap Index is down 25%. However, fundamentally things remain on track with the recent Economic Survey projecting the Indian economy to grow by 8.6% in FY11 and over 9% in FY12. Concerns over the political scenario, in particular corruption related issues and stagnation in decision making along with rising crude prices on the back on widening unrest in the Middle East and Africa have taken a toll on sentiment. Besides these issues, the Union Budget and corporate results for the third quarter grabbed much of the attention during the month. The Union Budget has attempted to support overall growth while seeking to reign in the fiscal deficit. By tinkering with income tax exemption limits and keeping the central excise rate broadly unchanged, the government has sought to bolster consumption. At the same time, it has stepped up spending in a measured manner particularly on infrastructure. The government s desire to reduce the fiscal deficit is welcomed but there is some skepticism on the budget s arithmetic. Estimates of expenses seem to be low while revenue projections appear to be optimistic. Overall, the market has reacted positively to the Budget as it managed to exceed very muted expectations. As far as results are concerned, as mentioned the last time, results for this quarter have been mixed. While top line growth continued to be strong, margin pressure was evident in select companies. Excluding oil company results, which had some exceptional components, companies within the Sensex saw earnings grow 17% while total earnings including all companies grew 27%. Internationally, most Asian markets with the exception of Korea and Taiwan ended positively. Developed markets continued to outperform emerging markets with most US and European markets up 2-3%. In the last six months, the Dow has outperformed the Sensex by almost 25% and as a result India s relative valuations now look more attractive. Within commodity markets, crude and gold stood out as a result of the ongoing turmoil in the Middle East & Africa. Oil gained 3% for the month and has now rallied 26% in the last six months. Gold, the traditional haven for safety rose almost 6% for the month and is up 13% in the last six months. Most other metals also rose by 1-3%. The Sensex currently trades at 15x one-year forward earnings, around its long term average. In the short term, commodity prices and a murky political scenario remain areas of concern and could result in some volatility. Thus, a phased manner of investing would make greater sense. However, over a longer period, the markets should move in line with underlying fundamentals which continue to remain strong. Thus, for investors with a tolerance for volatility and a long-term perspective, there continues to be merit in investing in equities. Debt market update During the month of February 2011, the yield on the 10-year Government Security decreased by 0.16% over January 2011 to 8.00% p.a. (source: Bloomberg). The average LAF during the month was negative ` 78,639 crs compared to negative ` 92,785 crs in January. The liquidity improved due to some government spending and maturities. The NSE overnight MIBOR ended at 7% same as at the end of the previous month. The annual rate of inflation, based on monthly WPI, stood at 8.23% (Provisional) for the month of January, 2011 (over January, 2010) as compared to 8.43 % (Provisional) for the previous month and 8.53% during the month of January Build up of inflation in the financial year so far was 7.44% compared to a build up of 9.42% in the corresponding period of the previous year. Inflation is expected to drop due to the higher base effect as well as some reversal in food prices. INR appreciated during the month and closed at as compared to at end of previous month. Net FII investment in equities & debt was an outflow of USD million in February as compared to an inflow of USD million in January Against the generally modest expectations of fiscal deficit for , the Union Budget has surprised positively by targeting a lower fiscal deficit of 4.6% of GDP. The government has done so by targeting a slower than expected increase in spending of about 3% against a much higher average growth in spending over the last few years. The tax revenue targets assumed in the budget factor an 18% increase, which appears to be reasonable unlike the spending targets. Receipts from divestments are being targeted at ` crs. The total subsidy bill as per the revised budget estimates is around ` 1,64,000 crs for FY11. The government is targeting a total reduction of approx ` crs out of which ` 15,000 crs is expected to be from the petroleum sector. This may only be possible if global oil prices correct or the government deregulates fuel/fertilizer prices. Consequently, the net borrowing programme for dated Government securities for fiscal is targeted at INR 3.4 lakh crores, lower than consensus estimates of INR 3.8 lakh crores. However, the actual borrowing in the next fiscal may end up being higher due to slippages on account of lower disinvestments or higher subsidy burden. With the increasing focus of banks on raising deposits (resulting in higher demand for G-sec) and relatively lower borrowing plan the yields on government bonds may remain range bound in the first half FY February 2011 Intouchmutually

4 hdfc-edit-new.qxd 3/9/ :28 PM Page 1 Farm away from home Volunteering on organic farms catches on as a new travel experience Thirty-year-old Sylvain Tuffet has been travelling across India for over two months now, but is neither tracking the Lonely Planet list of must-see destinations, nor is he a soul-searching hippie. Instead, he roughs it out for five to six hours a day, weeding fields or reaping crops at organic farms. And usually, in return for his labour the host farms provide for his food and lodging. Tuffet, who sells organic ice-creams with ingredients like sugar, fruit and cream produced without the use of fertilisers or pesticides in France, is among the many wwoofers who come to India to volunteer on organic and bio-dynamic farms. Wwoof, or World Wide Opportunities on Organic Farms, is a network of organic farms, small holdings and gardeners that welcome volunteers to live with them. Volunteers typically stay for a month and get hands-on experience of farming and organic production. In return for their help, the host farms provide board. Wwoof originally stood for Working Weekends on Organic Farms and was started in England in 1971 by Sue Coppard with the aim of providing city dwellers a getaway in the countryside, while promoting the organic farming movement. The idea soon became popular with backpackers and now more than 50 countries across the globe have their autonomous wwoofing networks. Tuffet, who has wwoofed at an organic amla farm near Jaipur, says, I have wwoofed in Nepal, Ecuador and France, and think its great way of meeting people, apart from being an economical way of travelling. The wwoof network in India was founded in 2007 by Harish Tiwari, who works with an Uttarakhand-based NGO. A consultant in organic agriculture, Tiwari says, With just a few hosts to begin with, we now have almost 200 farms across 16 states listed with us. The farms are spread across Karnataka, Kerala, Himachal Pradesh, Uttarakhand, Madhya Pradesh and Jammu & Kashmir. Farms have to pay a fee of ` 500 to be listed as a host. However, small and marginal farms (below five acres) need not pay. Volunteers pay an annual fee to the wwoof organisation of a country (in India it is $25 for foreign citizens and ` 1,125 for Indians). Even as wwoofing has become a popular way for discerning travellers to see countries, its aim is to generate an understanding of sustainable agricultural practices. Nicole Klein, who has wwoofed in France and is currently volunteering with an environmental NGO, says, For a citydweller, working on land helps you get closer to your plate and understand what goes into the food you eat everyday. The popularity of the idea is reflected in the numbers. From just 10 to 15 wwoofers in the peak season, we now get almost 40 to 50 in a month during witer, says Tiwari. The volunteers, mostly from France, Canada and the US, help with activities ranging from making compost to weeding to harvesting. The idea is catching on with Indians too. Take, for instance, Mahesh Margabandhu (35) who left his job as a software engineer to wwoof along with his wife. He is currently at a farm near Pondicherry. I have always wanted to farm and travel, this is a great way of combining the two, he says. Host farms, too, are more than happy to have volunteers, as it helps them cut their labour costs. Karen Uppendahl, who works for an NGO which is working at restoring infertile tribal land in Ganeshpuri near Mumbai, says, We have a small farm. We haven t gone into producing organic food for commercial purposes yet, hence the help we get from wwoofers is very important for us in managing costs. Some small farms that can t afford to host volunteers for long durations charge a nominal fee. Depending on their financial situation and skills, we ask wwoofers to contribute between ` 100 and ` 200 a day for food, says Uppendahl. Most are happy to give the money. I d rather give money to farmers working on the land than a middleman, says Tuffet. The wwoof network in India earns revenues of around ` 60,000 a month in the peak season from subscription fees, which is used to maintain and develop the network. MANISHA PANDE Intouchmutually February

5 hdfc-fos.qxd 3/9/ :47 PM Page 1 Features of our following schemes Nature of Scheme HDFC Growth Fund Open-ended Growth Scheme HDFC Equity Fund Open-ended Growth Scheme HDFC Top 200 Fund Open-ended Growth Scheme HDFC Capital Builder Fund Open-ended Growth Scheme HDFC Core & Satellite Open-ended Growth Scheme HDFC Premier Multi-Cap Fund Open-ended Growth Scheme HDFC Mid-Cap Opportunities Fund Open-ended Equity Scheme Investment Objective To generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. To achieve capital appreciation. To generate long To achieve capital term capital appreciation in the appreciation from a long term. portfolio of equity and equity-linked instruments primarily drawn from the companies in BSE 200 index. To generate capital To generate capital appreciation through appreciation in the equity investment in long term through companies whose equity investments shares are quoting by investing in a at prices below their diversified portfolio true value. of Mid Cap & Large Cap blue chip companies. To generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities of Small and Mid-Cap companies Fund Manager Srinivas Rao Ravuri (since Apr 3, 06)# Prashant Jain (since Jun 19, 03)*# Prashant Jain (since Jun19, 03)*# Chirag Setalvad (since Apr 2, 07)# Vinay Kulkarni (since Nov 21, 06)# Vinay Kulkarni (since Nov 21, 06)# Chirag Setalvad (Since June 25, 2007) # Inception Date (Date of Allotment) September 11, 2000 January 1, 1995 October 11, 1996 February 1, 1994 September 17, 2004 April 6, 2005 June 25, 07 Entry / Sales Load Exit Load Investment Plan / Options Minimum Application Amount (Under each Plan) Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. Growth & Dividend Growth & Dividend Growth & Dividend Growth & Dividend Growth & Dividend The Dividend Option offers Dividend Payout and Reinvestment facility. Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Growth & Dividend Growth and Dividend Lock-in Period Net Asset Value (NAV) Redemption Proceeds Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. For Tax Benefits / Consequences, Please refer to page 9 * Date of migration from Zurich India Mutual Fund # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) 4 February 2011 Intouchmutually

6 hdfc-fos.qxd 3/9/ :47 PM Page 2 Features of our following schemes HDFC Long Term Equity Fund Open-ended Equity Scheme HDFC Arbitrage Fund HDFC Index Fund HDFC Balanced Fund Nature of Scheme Open ended Equity Fund Open-ended Index Linked Scheme Open-ended Balanced Scheme Investment Objective To achieve long-term capital appreciation To generate income through arbitrage opportunities between cash and derivative market and arbitrage opportunities within the derivative segment and by deployment of surplus cash in debt securities and money market instruments. Nifty Plan : To generate returns that are commensurate with the performance of the Nifty, subject to tracking errors. SENSEX Plan : To generate returns that are commensurate with the performance of the SENSEX, subject to tracking errors. SENSEX Plus Plan : To invest 80 to 90% of the net assets of the Plan in companies whose securities are included in SENSEX and between 10% & 20% of the net assets in companies whose securities are not included in the SENSEX. To generate capital appreciation along with current income from a combined portfolio of equity & equity-related and debt & money market instruments. Fund Manager Srinivas Rao Ravuri (Since February 10, 2006) # Anil Bamboli (since Oct 23, 07)# Vinay Kulkarni (since Dec 29, 06) Chirag Setalvad (since April 2, 07)# Inception Date (Date of Allotment) February 10, 2006 October 23, 2007 July 17, 2002 September 11, 2000 Entry / Sales Load Not Applicable Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Exit Load For purchase / switch-in made at a time of NFO:. For purchase / switch-in made on or after February 10, 2011: In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. Retail Plan & Wholesale Plan In respect of each purchase / switch-in of Units, an Exit Load of 0.50% is payable if units are redeemed / switched-out within 6 months from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 6 months year from the date of allotment. No Entry / Exit Load shall be levied on bonus units. In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. No Entry/Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. Investment Plan / Options Growth and Dividend The Dividend Option offers Dividend payout and Dividend Reinvestment facility. Wholesale Plan and Retail Plan Both Plan offers Growth and Dividend Option. Dividend Option offers Quarterly Dividend Option with Payout and Reinvestment Facility. Nifty Plan, SENSEX Plan, SENSEX Plus Plan At present, each Plan offers Growth Option only. Growth & Dividend The Dividend Option offers Dividend payout and Dividend Reinvestment facility. Minimum Application Amount (Under each Plan) Not Applicable^ Wholesale Plan: Purchase / Additional Purchase : `1 Crore and any amount thereafter. Retail Plan: Purchase / Additional Purchase : Growth / Quaterly Dividend Option: `5,000 and any amount thereafter. Purchase : ` 5,000 and any amount thereafter. $ Additional Purchase : ` 1,000 and any amount thereafter. $ Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Lock-in Period Net Asset Value (NAV) Redemption Proceeds Normally despatched within 3 Business days Normally despatched within 3 Business days. Normally despatched within 3 Business Days. Normally despatched within 3 Business Days. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. For Tax Benefits / Consequences, Please refer to page 9 # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) $ All applications for purchase of units including additional purchases for an amount of Rupees Five Lakhs and above will be accepted with payment mode only as Real Time Gross Settlement (RTGS) /National Electronic Funds Transfer (NEFT)/Funds Transfer Letter/ Transfer Cheque of a bank where the Scheme has a collection account. Any application for an amount of Rupees Five Lakhs and above with payment mode other than the above will be rejected. Intouchmutually February

7 hdfc-fos.qxd 3/9/ :47 PM Page 3 Features of our following schemes Nature of Scheme HDFC Prudence Fund Open-ended Balanced Scheme HDFC Children s Gift Fund^* Open-ended Balanced Scheme HDFC Long Term Advantage Fund Open-ended Equity Linked Savings Scheme with a lock-in period of 3 years HDFC TaxSaver Open-ended Equity Linked Savings Scheme with a lock-in period of 3 years Investment Objective To provide periodic returns and capital appreciation over a long period of time from a judicious mix of equity and debt investments with an aim to prevent / minimise any capital erosion. The primary objective of both the Plans viz. Investment Plan & Savings Plan under the Scheme is to generate long term capital appreciation. To generate long term capital appreciation from a portfolio that is invested predominantly in equity and equity-related instruments. To achieve long term growth of capital. Fund Managers Prashant Jain (since Jun 19, 03)*# Chirag Setalvad (since April 2, 07)# Chirag Setalvad (since April 2, 07)# Vinay Kulkarni (since Nov 21, 06)# Inception Date (Date of Allotment) February 1, 1994 March 2, 2001 January 2, 2001 March 31, 1996 Entry / Sales Load Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Exit Load In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. For Units subject to Lock-in Period: NIL For Units not subject to Lock-in Period: 3% if the Units are redeemed / switched-out within one year from the date of allotment; 2% if the Units are redeemed / switched-out between the first and second year of the date of allotment; 1% if Units are redeemed / switched-out between the second and third year of the date of allotment; if the Units are redeemed / switched -out after third year from the date of allotment. No Entry/Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. No Entry/Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. No Entry / Exit Load shall be levied on bonus units Investment Plan / Options Growth & Dividend The Dividend Option offers Dividend payout and Reinvestment facility. Investment Plan : (Equity Oriented) Savings Plan : (Debt Oriented) Growth & Dividend The Dividend Option offers Dividend payout and Reinvestment facility Growth & Dividend The Dividend Option offers Dividend payout and Reinvestment facility Minimum Application Amount Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. For Purchase & Additional Purchase : ` 500 and in multiples of ` 500 thereafter. Lock-in Period If opted : Until the Unit holder (being the beneficiary child) attains the age of 18 years or until completion of 3 years from date of allotment, whichever is later. 3 years from the date of allotment of the respective Units 3 years from the date of allotment of the respective Units Net Asset Value (NAV) Redemption Proceeds Normally despatched within 3 Business Days. Normally despatched within 3 Business Days (subject to completion of Lock-in Period, if opted). Normally despatched within 3 Business Days (subject to completion of Lock-in Period). Normally despatched within 3 Business Days (subject to completion of Lock-in Period). ^ Eligibility (of Unit holder) : Children less than 18 years of age as on the date of investment by the Investor / Applicant are eligible as Unit holders in the Scheme. * Personal Accident Insurance Cover for Parent / Legal Guardian (upto the age of 80 years) of the Unit holder, equivalent to 10 times the cost value of the outstanding Units held by the Unit holder under all the applications / account statements / folios, subject to a maximum amount of Rs. 10 lakhs per Unit holder. The insurance premium in respect of the personal accident insurance cover will be borne by the AMC. This accident insurance cover is subject to conditions of the group personal accident insurance policy. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. For Tax Benefits / Consequences, Please refer to page 9 * Date of migration from Zurich India Mutual Fund # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) 6 February 2011 Intouchmutually

8 hdfc-fos.qxd 3/9/ :47 PM Page 4 Features of our following schemes HDFC MF Monthly Income Plan (HDFC MF MIP) HDFC Multiple Yield Fund HDFC Multiple Yield Fund Plan 2005 HDFC Income Fund Nature of Scheme An open-ended income scheme. Monthly income is not assured and is subject to availability of distributable surplus Open-ended Income Scheme Open-ended Income Scheme Open-ended Income Scheme Investment Objective The primary objective of Scheme is to generate regular returns through investment primarily in Debt and Money Market Instruments. The secondary objective of the Scheme is to generate long-term capital appreciation by investing a portion of the Scheme s assets in equity and equity related instruments. To generate positive returns over medium time frame with low risk of capital loss over medium time frame. To generate positive returns over medium time frame with low risk of capital loss over medium time frame. To optimise returns while maintaining a balance of safety, yield and liquidity. Fund Managers LTP Prashant Jain (Equities) (since Dec 26, 03), Shobhit Mehrotra (Debt) (since Sep 1, 07)#, STP Vinay Kulkarni (Equities) (since Nov 21, 06), Shobhit Mehrotra (Debt) (since Feb 16, 04)# Vinay Kulkarni (Equities), (since Nov 21, 06) Anil Bamboli (Debt) (since Sep 17, 04)# Chirag Setalvad (Equities), (since April 2, 07) Anil Bamboli (Debt) (since Aug 17, 05)# Shobhit Mehrotra (since Sep 1, 07)# Inception Date (Date of Allotment) December 26, 2003 September 17, 2004 August 17, 2005 September 11, 2000 Entry / Sales Load Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Exit Load For Short-Term Plan & Long-Term Plan In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 1 year from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment. In respect of each purchase / switch-in of Units, an Exit Load of 1% is payable if units are redeemed / switched-out within 15 months from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 15 months from the date of allotment. No Entry/Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. In respect of each purchase / switch-in of Units, an Exit Load of 0.5% is payable if units are redeemed / switched-out within 6 months from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 6 months from the date of allotment. Investment Plan / Options Short Term Plan (STP) & Long Term Plan (LTP). Each Plan offers Growth, Monthly Dividend & Quarterly Dividend Option. The Dividend Option offers Dividend Payout and Reinvestment facility. Growth & Dividend. The Dividend Option offers Dividend Payout and Reinvestment facility. Minimum Application Amount Short Term Plan : Purchase : (Growth & Quarterly Dividend Option) ` 5,000 and any amount thereafter under each Option. (Monthly Dividend Option) ` 25,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Long Term Plan : Purchase : (Growth & Quarterly Dividend Option) ` 5,000 and any amount thereafter under each Option. (Monthly Dividend Option) ` 25,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Lock-in Period Net Asset Value (NAV) Redemption Proceeds Normally despatched within 3 Business Days Normally depatched within 3 Business Days Normally depatched within 3 Business Days Normally despatched within 3 Business Days Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. For Tax Benefits / Consequences, Please refer to page 9 # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) Intouchmutually February

9 hdfc-fos.qxd 3/9/ :47 PM Page 5 Features of our following schemes HDFC High Interest Fund (HHIF) HDFC Short Term Plan (STP) HDFC Liquid Fund (HLF) HDFC Cash Management Fund Nature of Scheme Investment Objective Fund Managers Inception Date (Date of Allotment) Entry / Sales Load Open-ended Income Scheme To generate income by investing in a range of debt and money market instruments of various maturity dates with a view to maximise income while maintaining the optimum balance of yield, safety and liquidity. Anil Bamboli (HHIF) (since Feb 16, 04)#, Shobhit Mehrotra STP (since Sep 1, 07)# HHIF : April 28, 1997 HHIF-STP : February 6, 2002 Open-ended Income Scheme To generate regular income through To enhance income consistent with a high investment in Debt Securities and Money level of liquidity, through a judicious portfolio Market Instruments. mix comprising of money market and debt instruments. Anil Bamboli (since Jan 13, 04)# February 28, 2002 Open-ended Liquid Income Scheme Shobhit Mehrotra (since Feb 16, 04)# HLF : October 17, 2000 HLF Premium Plan & HLF Premium Plus Plan : February 24, 2003 Savings & Call Plan: Open ended High Liquidity Income Scheme. Treasury Advantage Plan: Open-ended Income Scheme. Savings & Call Plan: To generate optimal returns while maintaining safety and high liquidity. Treasury Advantage Plan: To generate regular income through investment in debt securities and money market instruments. Treasury Advantage Plan Anil Bamboli (since Sep 1, 07)# Call Plan Bharat Pareek (since May 23, 08)#, Savings Plan Bharat Pareek (w.e.f. Oct 1, 09)# Savings & Treasury Advantage Plan: November 18, 1999 Call Plan : February 6, 2002 Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Exit Load Investment Plan / Options Minimum Application Amount Lock-in Period Net Asset Value (NAV) Redemption Proceeds HHIF : In respect of each purchase / switch-in of Units, an Exit Load of 0.50% is payable if units are redeemed / switched-out within 3 months from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 3 months from the date of allotment. HHIF - STP : In respect of each purchase / switch-in of units, an Exit Load of 0.25% is payable if units are redeemed / switched-out within 1 month from the date of allotment. HHIF : Growth, Quarterly, Half Yearly and Yearly Dividend Options. HHIF-STP : Growth & Dividend Option All Dividend Options offer Dividend Payout and Reinvestment facility. (Under each Plan) Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Normally despatched within 3 Business Days In respect of each purchase / switch-in of Units, an Exit Load of 0.50% is payable if units are redeemed / switched-out within 6 months from the date of allotment. No Exit Load is payable if Units areredeemed / switched-out after 6 months from the date of allotment. Growth & Dividend (Dividend Option offers payout and Reinvestment facility). Purchase : ` 5,000 and any amount thereafter. * Additional Purchase : ` 1,000 and any amount thereafter. * * The maximum investment amount (including switch-in) under all options shall be ` 10 crore per investor (for all folios) in a calendar quarter. Normally despatched within 3 Business Days. Savings, Treasury Advantage & Call Plan : Savings Plan & Call Plan : Growth Option & Daily Dividend Option (with Reinvestment facility only). Savings Plan also offers Weekly Dividend Option (with payout and Reinvestment facility. Treasury Advantage Plan : (Retail and Wholesale Option) Growth and Dividend Option. Dividend Option offers Daily Dividend Option with Reinvestment facility only and Weekly and Monthly Dividend Option with payout and Reinvestment facility. Savings Plan : (Growth Option) Purchase / Additional Purchase: ` 10,000 and any amount thereafter. (Dividend Option) Purchase / Additional Purchase: ` 1,00,000 and any amount thereafter. Call Plan : (Under Each Option) Purchase / Additional Purchase: ` 1,00,000 and any amount thereafter. Treasury Advantage Plan Retail Option Growth, Weekly and Monthly Dividend Option Purchase : ` 5,000 and any amount thereafter. Additional Purchase: ` 1,000 and any amount thereafter. Daily Dividend Option Purchase / Additional Purchase: `1,00,000 and any amount thereafter. Treasury Advantage Plan Wholesale Option Purchase : ` 1 Crore and any amount thereafter. Additional Purchase : ` 1 and any amount thereafter. Savings & Call Plan: All Year Round Treasury Advantage Plan: Savings & Call Plan : Normally despatched within 1 Business Day. Treasury Advantage Plan: Normally despatched within 3 Business Days. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. For Tax Benefits / Consequences, Please refer to page 9 # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) No Entry/Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. HLF, HLF Premium Plan & HLF Premium Plus Plan. Each Plan offers Growth & Dividend Option. HLF The Dividend Option offers Daily Dividend Option (Reinvestment facility only) and Weekly and Monthly Dividend Option (with payout and Reinvestment facility). HLF Premium Plan The Dividend Option offers Daily Dividend Option (with Reinvestment facility only) and Weekly Dividend Option (with payout and Reinvestment facility). HLF Premium Plus Plan The Dividend Option offers Weekly Dividend Option (with payout and Reinvestment facility). HLF : Growth Option : Purchase / Additional Purchase: ` 10,000 and any amount thereafter. Dividend Option : Purchase / Additional Purchase: ` 1,00,000 and any amount thereafter. HLF Premium Plan (Purchase) : ` 5,00,00,000 and any amount thereafter for opening an account / folio (Under each Option). HLF Premium Plus Plan (Purchase) : ` 20,00,00,000 and any amount thereafter for opening an account / folio (Under each Option). HLF Premium Plan & HLF Premium Plus Plan (Additional Purchase) : ` 1 and and any amount thereafter under each Option. All Year Round Normally despatched within 1 Business Day. 8 February 2011 Intouchmutually

10 hdfc-fos.qxd 3/9/ :47 PM Page 6 Features of our following schemes Nature of Scheme Investment Objective Fund Manager Inception Date (Date of Allotment) HDFC Floating Rate Income Fund Open-ended Income Scheme. To generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, fixed rate debt / money market instruments swapped for floating rate returns and fixed rate debt securities and money market instruments. Shobhit Mehrotra (since Feb 16, 04)# January 16, 2003 HDFC Gilt Fund Open-ended Income Scheme. To generate credit risk-free returns through investments in sovereign securities issued by the Central Government and / or a State Government. Anil Bamboli (since Sep 1, 2007) July 25, 2001 Entry / Sales Load Exit Load Investment Not Applicable. Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ /09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors assessment of various factors including the service rendered by the ARN Holder. Short Term Plan : Long Term Plan : In respect of each purchase / switch-in of Units, an Exit Load of 3% is payable if units are redeemed / switched-out within 18 months from the date of allotment. No Exit Load is payable if Units are redeemed / switched-out after 18 months from the date of allotment. Short Term Plan : For investors who wish to invest for short time period. Long Term Plan : For investors who wish to invest for relatively longer time period. Short Term Plan Wholesale & Retail Option : Growth and Dividend Option. The Dividend Option offers Daily Dividend Option (with Reinvestment facility only) and Weekly and Monthly Dividend Option (with payout and Reinvestment facility). Long Term Plan : Growth and Weekly Dividend Option (with Reinvestment facility only). Short Term Plan : Long Term Plan : In respect of each purchase / switch - in of units, an exit load of 0.25% is payable if units are redeemed / switched out within 3 months from the date of allotment. No exit load is payable if units are redeemed / switched - out after 3 months from the date of allotment. No Entry / Exit Load shall be levied on bonus units and units allotted on dividend reinvestment. Short Term Plan : For investors who wish to invest for short time period. Long Term Plan : For investors who wish to invest for relatively longer time period. Each Plan offers Growth and Dividend Options. The Dividend Option offers Dividend Payout and Reinvestment facility. Minimum Application Amount Lock-in Period Net Asset Value (NAV) Redemption Proceeds Short Term Plan Retail Option : (Growth Option, Weekly Dividend Option & Monthly Dividend Option) Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. (Daily Dividend Option) Purchase / Additional Purchase : ` 1 lakh and any amount thereafter. Short Term Plan Wholesale Option : (Growth Option, Daily Dividend Option, Weekly Dividend Option & Monthly Dividend Option) Under each option : Purchase : ` 10 lakh and any amount thereafter. Additional Purchase : ` 1 and and any amount thereafter. Long Term Plan : For Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Normally despatched within 3 Business Days. (Under each Plan / Option) Purchase : ` 5,000 and any amount thereafter. Additional Purchase : ` 1,000 and any amount thereafter. Normally despatched within 3 Business Days. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of mutual fund units. # Miten Lathia (Dedicated Fund Manager for Overseas Investments since August 5, 2010) Tax Benefits / Consequences : Income distributed by the Scheme(s) are free from Income-tax in the hands of investors. Distribution tax in case of Scheme(s) other than equity-oriented funds shall be payable by the mutual fund at the rate of %* on income distributed to an individual/huf and at the rate of %* on income distributed to any other investor. In case of income distributed by Liquid Funds and Money Market Mutual Funds, Dividend Distribution Tax is payable by the Mutual Units of the Scheme(s) are not subject to Wealth-tax and Gift-tax. Unit holders are required to pay Securities Transaction Tax (STT) at the rate of 0.25% at the time of redemption / switch-out of units of an equity-oriented fund. * including applicable surcharge, education cess and secondary and higher education cess. Gift of Units : With effect from , as per the provisions of section 56(2)(vii) of the Income-tax Act, 1961, certain specified property transferred, without consideration / adequate consideration, exceeding specified limits, are taxable in the hands of the recipient individual / HUF (subject to certain exceptions). The term property includes shares and securities. Units of a mutual fund could fall within the purview of the term securities. As per the Act, property would refer to capital assets only. Investors should be aware that the fiscal rules / tax laws may change and there can be no guarantee that the current tax position may continue indefinitely. In view of individual nature of tax consequences, each investor is advised to consult his / her own professional tax advisor. Fund Manager Total Experience Prashant Jain Over 19 years Shobhit Mehrotra Over 17 years Anil Bamboli Over 15 years Vinay Kulkarni Over 19 years Chirag Setalvad Over 13 years Srinivas Rao Ravuri Over 15 years Bharat Pareek Over 9 years Miten Lathia Over 9 years Intouchmutually February

11 hdfc-eq-r.qxd 3/9/ :48 PM Page 1 HDFC Growth Fund EQUITY - MULTI CAP CATEGORY (44 schemes) for 3 and 5 year periods ending February 28, 2011 An open-ended growth scheme HDFC Equity Fund EQUITY - MULTI CAP CATEGORY (43 schemes) for 3 and 5 year periods ending February 28, 2011 An open-ended growth scheme # SENSEX Portfolio Turnover Ratio (Last 1 Year) 32.19% + Industry Classification as recommended by AMFI, $ Sponsor Industry Allocation of Equity Holding (% of Net Assets) Banks Petroleum Products Consumer Non Durables 8.19 Pharmaceuticals 7.95 Software 7.64 Media & Entertainment 5.94 Industrial Capital Goods 5.17 Oil 4.88 Finance 4.72 Chemicals 4.40 Construction 3.96 Telecom - Services 3.25 Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Feb 28, 01 Last 10 Years (3652 days) Sep 11, 00 Since Inception (3822 days) Company Industry + % to NAV Infosys Technologies Ltd. Software 7.64 ITC Ltd. Consumer Non Durables 6.72 ICICI Bank Ltd. Banks 6.25 State Bank of India Banks 6.01 Reliance Industries Ltd. Petroleum Products 5.77 Housing Development Finance Corporation Ltd. $ Finance 4.72 Bharat Petroleum Corporation Ltd. Petroleum Products 4.66 Solar Industries India Ltd. Chemicals 4.40 Bank of Baroda Banks 3.72 Zee Entertainment Enterprises Ltd. Media & Entertainment 3.50 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets 1.89 Net Assets (` In Lakhs) 121, Power 2.86 Fertilisers 1.99 Textile Products 1.81 Cement 1.63 Gas 1.44 Construction Project 1.34 Auto Ancillaries 1.30 Electrical Components & Equipments 1.15 Paper Products 0.99 Engineering 0.85 Ferrous Metals 0.24 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 8.80% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Feb 28, 01 Last 10 Years (3652 days) Feb 28, 96 Last 15 Years (5479 days) Jan 01, 95 Since Inception (5902 days) #S&P CNX 500 (Please refer to page no 31) Company Industry + % to NAV State Bank of India Banks 8.22 ICICI Bank Ltd. Banks 6.36 Reliance Industries Ltd. Petroleum Products 4.90 Tata Consultancy Services Ltd. Software 4.52 Infosys Technologies Ltd. Software 4.47 Titan Industries Ltd. Consumer Non Durables 4.31 Bank of Baroda Banks 4.24 Coal India Ltd. Minerals/Mining 3.50 Tata Steel Ltd. Ferrous Metals 2.74 GAIL (India) Ltd. Gas 2.54 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash margin / Earmarked cash for Futures & Options 0.32 Other Cash, Cash Equivalents and Net Current Assets 3.30 Net Assets (` In Lakhs) 827, Portfolio Turnover Ratio (Last 1 Year) 42.75% + Industry Classification as recommended by AMFI Total outstanding position (as at February 28, 2011) in Derivative Instruments (Punjab National Bank NSE Stock Futures March 2011) (Gross Notional) ` lakhs, (Larsen & Toubro Ltd. NSE Stock Futures March 2011) (Gross Notional) ` 3, lakhs, (Dr. Reddy s Laboratories Ltd. NSE Stock Futures March 2011) (Gross Notional) ` lakhs, (Tata Power Company NSE Stock Futures March 2011) (Gross Notional) ` , (Sun Pharmaceuticals Industries Ltd. NSE Stock Futures March 2011) (Gross Notional) ` 1,185.10, (Mahindra & Mahindra Ltd. NSE Stock Futures March 2011) (Gross Notional) ` Industry Allocation of Equity Holding (% of Net Assets) Banks Consumer Non Durables 9.64 Software 8.99 Petroleum Products 8.95 Pharmaceuticals 6.78 Industrial Capital Goods 3.94 Oil 3.80 Minerals/Mining 3.50 Gas 3.41 Media & Entertainment 3.40 Ferrous Metals 3.26 Auto Ancillaries 3.02 Auto 2.33 Hardware 2.31 Telecom - Services 2.30 Finance 1.72 Non - Ferrous Metals 1.60 Construction Project 1.42 Power 1.14 Textile Products 0.94 Transportation 0.63 Construction 0.55 Chemicals 0.49 Textiles - Synthetic 0.23 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 9.90% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) 10 February 2011 Intouchmutually

12 hdfc-eq-r.qxd 3/9/ :48 PM Page 2 HDFC Top 200 Fund EQUITY - LARGE & MID CAP CATEGORY (57 schemes) for 3 and 5 year periods ending February 28, 2011 An open-ended growth scheme HDFC Capital Builder Fund An open-ended growth scheme Growth Option Dividend Option per Unit (`) (%) $$^ Returns (%)# Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Feb 28, 01 Last 10 Years (3652 days) Oct 11, 96 Since Inception (5253 days) #BSE 200 $$ All dividends declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing NAV (ex-dividend NAV). Company Industry + % to NAV State Bank of India Banks 7.30 Infosys Technologies Ltd. Software 6.42 ICICI Bank Ltd. Banks 5.83 Reliance Industries Ltd. Petroleum Products 5.57 Bank of Baroda Banks 4.04 ITC Ltd. Consumer Non Durables 3.62 Tata Consultancy Services Ltd. Software 3.24 Coal India Ltd. Minerals/Mining 3.11 Titan Industries Ltd. Consumer Non Durables 2.99 Oil & Natural Gas Corporation Ltd. Oil 2.58 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash margin 0.35 Other Cash, Cash Equivalents and Net Current Assets 3.87 Net Assets (` In Lakhs) 948, Portfolio Turnover Ratio (Last 1 Year) 26.24% + Industry Classification as recommended by AMFI Total outstanding position (as at February 28, 2011) in Derivative Instruments (Hero Honda Motors Ltd. NSE Stock Futures March 2011) (Gross Notional) ` lakhs, (Hindustan Unilever Ltd. NSE Stock Futures March 2011) (Gross Notional) ` 1, lakhs, (Steel Authority of India Ltd. NSE Stock Futures March 2011) (Gross Notional) ` lakhs (Tata Motors Ltd. NSE Stock Futures March 2011) (Gross Notional) ` 1, lakhs, (Aurobindo Pharma Ltd. NSE Stock Futures March 2011) (Gross Notional) ` lakhs, (Larsen & Toubro Ltd. NSE Stock Futures March 2011) (Gross Notional) ` 1, Industry Allocation of Equity Holding (% of Net Assets) Banks Software Consumer Non Durables 9.07 Petroleum Products 8.87 Pharmaceuticals 7.24 Auto 4.96 Oil 4.16 Industrial Capital Goods 3.25 Construction Project 3.22 Power 3.18 Minerals/Mining 3.11 Gas 3.10 Ferrous Metals 2.46 Telecom - Services 2.11 Finance 1.92 Non - Ferrous Metals 1.81 Diversified 1.25 Media & Entertainment 1.05 Transportation 0.52 Hardware 0.50 Cement 0.47 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 9.30% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Feb 28, 01 Last 10 Years (3652 days) Feb 28, 96 Last 15 Years (5479 days) Feb 01, 94 Since Inception (6236 days) #S&P CNX 500 (Please refer to page no 31) Company Industry + / Rating % to NAV Tata Consultancy Services Ltd. Software 6.74 State Bank of India Banks 6.68 Bank of Baroda Banks 5.78 Infosys Technologies Ltd. Software 5.68 Reliance Industries Ltd. Petroleum Products 5.49 Ipca Laboratories Ltd. Pharmaceuticals 5.44 Oil India Ltd. Oil 4.64 Bharti Airtel Ltd. Telecom - Services 4.40 Dr. Reddy s Laboratories Ltd. Pharmaceuticals 4.10 ICICI Bank Ltd. Banks 3.68 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Credit Exposure Britannia Industries Ltd. AAA 0.22 Total Credit Exposure 0.22 Cash, Cash Equivalents and Net Current Assets 1.13 Net Assets (` In Lakhs) 52, Portfolio Turnover Ratio (Last 1 Year) 14.58% + Industry Classification as recommended by AMFI Industry Allocation of Equity Holding (% of Net Assets) Banks Pharmaceuticals Software Petroleum Products 8.89 Consumer Non Durables 7.22 Industrial Capital Goods 4.99 Oil 4.64 Telecom - Services 4.40 Consumer Durables 3.18 Chemicals 2.58 Construction Project 2.50 Auto 2.47 Auto Ancillaries 2.15 Media & Entertainment 1.80 Finance 1.42 Power 1.10 Gas 0.97 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 9.00% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Intouchmutually February

13 hdfc-eq-r.qxd 3/9/ :48 PM Page 3 HDFC Core & Satellite Fund An open-ended growth scheme HDFC Premier Multi-Cap Fund An open-ended growth scheme Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Sep 17, 04 Since Inception (2355 days) #BSE 200 Company Industry + % to NAV Infosys Technologies Ltd. Software 9.78 Tata Consultancy Services Ltd. Software 7.38 Bank of Baroda Banks 6.34 Crompton Greaves Ltd. Industrial Capital Goods 4.51 NTPC Ltd. Power 4.02 Emami Ltd. Consumer Non Durables 3.77 KEC International Ltd. Power 3.27 Bharat Electronics Ltd. Industrial Capital Goods 3.15 Sundaram Fasteners Ltd. Auto Ancillaries 3.10 Axis Bank Ltd. Banks 3.06 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets 8.51 Net Assets (` In Lakhs) 39, Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Apr 06, 05 Since Inception (2154 days) #S&P CNX 500 (Please refer to page no 31) Company Industry + % to NAV Infosys Technologies Ltd. Software 8.35 Emami Ltd. Consumer Non Durables 5.75 Sun Pharmaceutical Industries Ltd. Pharmaceuticals 5.08 Tata Consultancy Services Ltd. Software 5.07 Crompton Greaves Ltd. Industrial Capital Goods 4.96 Bharti Airtel Ltd. Telecom - Services 4.54 ICICI Bank Ltd. Banks 4.44 KEC International Ltd. Power 4.05 Container Corporation of India Ltd. Transportation 3.81 H T Media Ltd. Media & Entertainment 3.78 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets Net Assets (` In Lakhs) 43, Portfolio Turnover Ratio (Last 1 Year) 12.35% + Portfolio Turnover Ratio (Last 1 Year) 46.98% Industry Classification as recommended by AMFI + Industry Classification as recommended by AMFI Segmentwise Break-up of Equity Holding (% of Net Assets) Large-Cap Mid-Cap Industry Allocation of Equity Holding (% of Net Assets) Software Banks Power 8.47 Industrial Capital Goods 7.66 Pharmaceuticals 5.54 Consumer Non Durables 5.31 Auto Ancillaries 5.24 Media & Entertainment 4.64 Construction 4.05 Industrial Products 3.36 Textiles - Synthetic 2.78 Petroleum Products 2.78 Oil 2.70 Consumer Durables 2.33 Paper Products 2.27 Engineering 0.73 Chemicals 0.67 Engineering Services 0.64 Industry Allocation of Equity Holding (% of Net Assets) Software Banks 9.81 Consumer Non Durables 9.72 Media & Entertainment 9.49 Pharmaceuticals 6.51 Industrial Capital Goods 4.96 Telecom - Services 4.54 Power 4.05 Transportation 3.81 Gas 3.68 Industrial Products 3.28 Chemicals 2.92 Petroleum Products 2.66 Paper Products 1.73 Construction Project 1.68 Oil 1.59 Auto Ancillaries 1.24 Engineering 0.06 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 10.50% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 10.30% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) 12 February 2011 Intouchmutually

14 hdfc-eq-r.qxd 3/9/ :48 PM Page 4 HDFC Mid-Cap Opportunities Fund EQUITY - MID & SMALL CAP CATEGORY (54 schemes) for 3 and 5 year periods ending February 28, 2011 An open-ended equity scheme HDFC Long Term Equity Fund An open-ended equity scheme Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Jun 25, 07 Since Inception (1344 days) #CNX Midcap (Please refer to page no 31) Company Industry + % to NAV IPCA Laboratories Ltd. Pharmaceuticals 4.75 Carborundum Universal Ltd. Industrial Products 4.35 Lupin Ltd. Pharmaceuticals 3.25 Exide Industries Ltd. Auto Ancillaries 3.15 Union Bank of India Banks 3.13 Solar Industries India Ltd. Chemicals 3.02 Indian Bank Banks 2.74 Crompton Greaves Ltd. Industrial Capital Goods 2.72 Allahabad Bank Banks 2.69 Biocon Limited Pharmaceuticals 2.67 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets 8.08 Net Assets (` In Lakhs) 110, Portfolio Turnover Ratio (Last 1 Year) 24.62% + Industry Classification as recommended by AMFI Industry Allocation of Equity Holding (% of Net Assets) Industrial Products Pharmaceuticals Auto Ancillaries Banks Consumer Non Durables 6.43 Industrial Capital Goods 5.39 Chemicals 4.53 Consumer Durables 4.12 Petroleum Products 3.65 Media & Entertainment 2.13 Construction Project 2.13 Finance 1.94 Fertilisers 1.75 Pesticides 1.29 Construction 1.26 Power 1.07 Textile Products 0.61 Ferrous Metals 0.59 Software 0.45 Segmentwise Break-up of Equity Holding (% of Net Assets) Large-Cap 0.08 Mid-Cap Small-Cap 6.69 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 9.20% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Growth Option Dividend Option Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Feb 10, 06 Since Inception (1844 days) Returns less than 1 year period are absolute. Returns equal to or greater than 1 year are #S&P CNX Nifty (Please refer to page no 31) Company / Issuer Industry + % to NAV ICICI Bank Ltd. Banks 8.39 State Bank of India Banks 8.28 Atlas Copco (India) Ltd. Industrial Products 6.78 ITC Ltd. Consumer Non Durables 5.81 Bharat Petroleum Corporation Ltd. Petroleum Products 5.11 Cipla Ltd. Pharmaceuticals 4.78 Oil & Natural Gas Corporation Ltd. Oil 4.31 NTPC Ltd. Power 4.00 Sadbhav Engineering Ltd. Construction 3.87 Crompton Greaves Ltd. Industrial Capital Goods 3.68 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash Equivalents and Net Current Assets 2.87 Net Assets (` In Lakhs) 81, Portfolio Turnover Ratio (Last 1 Year) 45.42% + Industry Classification as recommended by AMFI Industry Allocation of Equity Holding (% of Net Assets) Banks Construction 9.83 Pharmaceuticals 9.48 Petroleum Products 8.50 Oil 7.60 Consumer Non Durables 7.41 Industrial Products 6.78 Industrial Capital Goods 4.72 Construction Project 4.31 Power 4.00 Telecom - Services 3.48 Media & Entertainment 3.43 Software 2.76 Gas 2.41 Minerals/Mining 2.08 Engineering 1.60 Cement 1.22 Auto Ancillaries 0.85 Std Deviation Beta Sharpe Ratio* Risk Ratio (for the 3-yr period ended February 28, 2011) 8.80% Monthly Figure Source : CRISIL Fund Analyser * Risk-free rate assumed to be 7.61% (364-day Treasury Bill yield on ) Intouchmutually February

15 hdfc-eq-r.qxd 3/9/ :48 PM Page 5 HDFC Arbitrage Fund RETAIL & WHOLESALE PLAN HYBRID - ARBITRAGE CATEGORY (14 schemes) for 18 month period ending February 28, 2011 An open-ended equity fund Retail Plan Growth Option Dividend Option (Erstwhile Monthly Dividend Option) Quarterly Dividend Option Wholesale Plan Growth Option Dividend Option (Erstwhile Monthly Dividend Option) Quarterly Dividend Option Retail Plan Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Oct 23, 07 Since Inception (1224 days) Wholesale Plan Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Oct 23, 07 Since Inception (1224 days) #CRISIL Liquid Fund Index Company / Issuer Industry + / Rating % to NAV (Quantity fully hedged using futures / options) Reliance Infrastruture Ltd. Power 5.18 Pantaloon Retail (India) Ltd. Retailing 3.72 JSW Steel Ltd. Ferrous Metals 3.71 Indian Hotels Company Ltd. Hotels 3.53 Power Grid Corporation of India Ltd. Power 3.44 Century Textiles & Industries Ltd. Cement 3.08 Balrampur Chini Mills Ltd. Consumer Non Durables 2.44 Oriental Bank of Commerce Banks 2.35 PRAJ Industries Ltd. Industrial Capital Goods 2.14 Suzlon Energy Ltd. Industrial Capital Goods 2.10 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Money Market Instruments Axis Bank Ltd. P ING Vysya Bank Ltd. P Total Money Market Instruments Short Term Deposits as margin for Futures & Options Other Cash, Cash Equivalents and Net Current Assets Net Assets (` In Lakhs) 8, Portfolio Turnover Ratio (Last 1 Year) 88.08% + Industry Classification as recommended by AMFI Industry Allocation of Equity Holding (% of Net Assets) Power 9.11 Cement 6.20 Ferrous Metals 5.10 Consumer Non Durables 4.79 Industrial Capital Goods 4.68 Pharmaceuticals 4.13 Retailing 3.72 Hotels 3.53 Petroleum Products 2.81 Construction 2.62 Telecom - Services 2.58 Banks 2.35 Finance 1.64 Telecom - Equipment & Accessories 1.57 Oil 1.43 Media & Entertainment 1.33 Chemicals 1.32 Transportation 1.30 Textile Products 1.27 Agro-Tea & Sugar 0.91 Fertilisers 0.78 Hardware 0.74 Gas 0.69 Non - Ferrous Metals 0.63 Software 0.40 Auto Ancillaries 0.09 Industrial Products 0.07 HDFC Index Fund SENSEX Plan (Face Value per Unit: ` ) Relative Performance ^ An open-ended index linked scheme SENSEX Plan Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Jul 17, 02 Since Inception (3148 days) ^^ ^^Face Value per Unit #SENSEX (Total Returns Index) (Please refer to page no 31) Company Industry + % to NAV Reliance Industries Ltd. Petroleum Products Infosys Technologies Ltd. Software ICICI Bank Ltd. Banks 7.84 ITC Ltd. Consumer Non Durables 6.36 Larsen & Toubro Ltd. Construction Project 5.88 Housing Development Finance Corporation Ltd. $ Finance 5.72 HDFC Bank Ltd. Banks 5.31 State Bank of India Banks 5.27 Tata Consultancy Services Ltd. Software 4.58 Oil & Natural Gas Corporation Ltd. Oil 3.23 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets 0.84 Net Assets (` In Lakhs) 7, Portfolio Turnover Ratio (Last 1 Year) % + Industry Classification as recommended by AMFI, $ Sponsor Industry Allocation of Equity Holding (% of Net Assets) Banks Software Petroleum Products Auto 8.07 Consumer Non Durables 6.36 Construction Project 5.88 Finance 5.72 Ferrous Metals 4.72 Power 3.88 Non - Ferrous Metals 3.77 Telecom - Services 3.55 Oil 3.23 Industrial Capital Goods 2.41 Diversified 2.15 Pharmaceuticals 1.10 Cement 0.65 Construction 0.64 Tracking Error Since Inception (Annualised) 2.29% 14 February 2011 Intouchmutually

16 hdfc-eq-r.qxd 3/9/ :48 PM Page 6 HDFC Index Fund An open-ended index linked scheme HDFC Index Fund EQUITY - LARGE CAP CATEGORY (35 schemes) for 3 and 5 year periods ending February 28, 2011 An open-ended index linked scheme NIFTY Plan (Face Value per Unit: ` ) Relative Performance ^ NIFTY Plan Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Jul 17, 02 Since Inception (3148 days) ^^ #S&P CNX Nifty (Total Returns Index) (Please refer to page no 31) ^^Face Value per Unit SENSEX Plus Plan (Face Value per Unit: ` ) SENSEX Plus Plan Relative Performance ^ Aug 27, 10 Last Six months (185 days) Feb 26, 10 Last 1 Year (367 days) Feb 28, 08 Last 3 Years (1096 days) Feb 28, 06 Last 5 Years (1826 days) Jul 17, 02 Since Inception (3148 days) ^^ #SENSEX (Total Returns Index) (Please refer to page no 31) ^^ Face Value per Unit Company Industry + % to NAV Reliance Industries Ltd. Petroleum Products 9.29 Infosys Technologies Ltd. Software 8.25 ICICI Bank Ltd. Banks 6.37 ITC Ltd. Consumer Non Durables 5.10 Larsen & Toubro Ltd. Construction Project 4.67 Housing Development Finance Corporation Ltd. $ Finance 4.65 HDFC Bank Ltd. Banks 4.14 State Bank of India Banks 3.92 Tata Consultancy Services Ltd. Software 3.25 Bharti Airtel Ltd. Telecom - Services 2.34 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash margin / Earmarked cash for Futures & Options 8.18 Other Cash, Cash Equivalents and Net Current Assets 0.74 Net Assets (` In Lakhs) 5, Company Industry + % to NAV Infosys Technologies Ltd. Software 7.86 ICICI Bank Ltd. Banks 6.93 Reliance Industries Ltd. Petroleum Products 5.86 State Bank of India Banks 5.62 Housing Development Finance Corporation Ltd. $ Finance 4.67 Larsen & Toubro Ltd. Construction Project 4.24 Dr. Reddy s Laboratories Ltd. Pharmaceuticals 3.94 HDFC Bank Ltd. Banks 3.75 Tata Consultancy Services Ltd. Software 3.37 The Federal Bank Ltd. Banks 2.86 Total of Top Ten Equity Holdings Total Equity & Equity Related Holdings Cash, Cash Equivalents and Net Current Assets Net Assets (` In Lakhs) 6, Portfolio Turnover Ratio (Last 1 Year) % + Industry Classification as recommended by AMFI, $ Sponsor Total outstanding position (as at February 28,2011) in Derivative Instruments (Nifty NSE Index Futures March 2011 Futures) (Gross Notional) ` lacs Portfolio Turnover Ratio (Last 1 Year) 33.51% + Industry Classification as recommended by AMFI, $ Sponsor Industry Allocation of Equity Holding (% of Net Assets) Banks Software Petroleum Products 9.70 Auto 6.25 Finance 5.90 Consumer Non Durables 5.10 Construction Project 4.67 Ferrous Metals 4.12 Power 3.91 Pharmaceuticals 3.37 Non - Ferrous Metals 3.03 Oil 2.94 Industrial Capital Goods 2.77 Telecom - Services 2.67 Diversified 1.71 Cement 1.63 Gas 1.10 Minerals/Mining 0.62 Construction 0.44 Tracking Error Since Inception (Annualised) 2.55% Industry Allocation of Equity Holding (% of Net Assets) Banks Software Petroleum Products 5.86 Pharmaceuticals 5.66 Finance 4.67 Construction Project 4.24 Auto 3.13 Power 2.90 Consumer Non Durables 2.69 Telecom - Services 2.68 Industrial Capital Goods 1.94 Auto Ancillaries 1.91 Diversified 1.88 Transportation 1.83 Chemicals 1.62 Ferrous Metals 1.42 Industrial Products 0.79 Non - Ferrous Metals 0.60 Cement 0.52 Construction 0.34 Intouchmutually February