consequent to conversion of icici power into an open ended

consequent to conversion ofICICI POWER

intoAn Open Ended Growth Fund

from

Prudential ICICI Mutual Fund

Sponsors: Prudential plc (formerly known as Prudential Corporation plc, through its wholly owned subsidiary, Prudential

Corporation Holdings Limited), Laurence Pountney Hill, London EC4R 0HH, U.K., and

ICICI Limited, ICICI Towers, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051.

Investment Manager: Prudential ICICI Asset Management Company Limited

Regd. Office: 206 Ashoka Estate, 2nd Floor, 24 Barakhamba Road, New Delhi 110 001.

Corp. Office: Contractor Building, 3rd Floor, 41, R. Kamani Marg, Ballard Estate, Mumbai 400 038.

Trustee: Prudential ICICI Trust Limited

Regd. Office: 206 Ashoka Estate, 2nd Floor, 24 Barakhamba Road, New Delhi 110 001.

www.pruiciciamc.com

O F F E R D O C U M E N T

The particulars of Prudential ICICI Power, the mutual fund Scheme

offered under this Offer Document, have been prepared in

accordance with the Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996, as amended from time to time and filed

with the Securities and Exchange Board of India and the Units

being offered for public subscription have not been approved or

disapproved by the Securities and Exchange Board of India nor has

the Securities and Exchange Board of India certified the accuracy

or adequacy of the Offer Document.

This Offer Document contains information necessary for an investor

to make an informed investment decision in the Scheme described

herein. Investors should carefully read the Offer Document prior

to making an investment decision and retain the Offer Document

for future reference. Investors may note that this Offer Document

remains effective until a material change occurs. Material changes

shall be filed with SEBI and circulated to all Unitholders or may be

publicly notified by advertisements in the newspapers subject to

the applicable regulations.


2

IMPORTANT NOTICEInvesting in mutual fund schemes involves certain risks and considerations associated generally with making investments insecurities. The value of the Scheme’s investments may be affected generally by factors affecting financial markets, such as priceand volume, volatility in interest rates, currency exchange rates, changes in regulatory and administrative policies of theGovernment or any other appropriate authority (including tax laws) or other political and economic developments. Consequently,there can be no assurance that the Scheme offered in this Offer Document would achieve the stated objectives. The NAV of theUnits of the Scheme may fluctuate and can go up or down. Past performance of the schemes managed by the Sponsors or theiraffiliates or the Asset Management Company is not indicative of the future performance of the Scheme nor will the performanceof the Scheme, following the commencement of the operations, be indicative of the Scheme’s future performance.

Prospective investors are advised to review this Offer Document carefully and in its entirety and consult their legal, tax andfinancial advisors to determine possible legal, tax and financial or any other consequences of subscribing to, purchasing orholding Units under the Scheme, before making an application to subscribe or purchase the Units.

The Prudential ICICI Mutual Fund (the Fund) and the Prudential ICICI Asset Management Company Limited (the AMC), havenot authorized any person to give any information or make any representations, either oral or written, not stated in this OfferDocument in connection with issue of Units under the Scheme. Prospective investors are accordingly advised not to rely uponany information or representations not incorporated in this Offer Document. Any subscription, purchase or sale made by anyperson on the basis of statements or representations which are not contained in this Offer Document or which are inconsistentwith the information contained herein shall be solely at the risk of the investor.

The current Regulations impose certain restrictions and conditions on the AMC for entering into transactions with theSponsors and their associates on behalf of the Fund. These restrictions include:

a) Purchase or sale of securities through any broker associated with the Sponsors shall not exceed an average of 5% of theaggregate purchases and sale of securities made by the Fund in all its Schemes. The limit of 5% shall apply for a block ofany three months.

b) Utilization of the services of the Sponsors or any of their associates, for the purpose of any securities transactions anddistribution and sale of securities shall be made only if a disclosure to this effect is made in the Offer Document.

c) The Fund shall not make any investment in;

1. any unlisted security of an associate or group company of the Sponsor; or

2. any security issued by way of private placement by an associate or group company of the Sponsor; or

3. the listed securities of group companies of the Sponsor which is in excess of 25% of the net assets of any of theschemes of the Mutual Fund.

In this Offer Document, all references to “$” are to United States of America Dollars, “£” to Pound Sterling of United Kingdomand “Rs.” to Indian Rupees. The Reference Exchange Rate between the United States Dollar and the Indian Rupee has beentaken at $1 = Rs.48.00 and UK£ and Indian Rupee at 1£= Rs.73.5774.This Offer Document is dated September 24, 2003.

Prudential ICICI Power

3

TABLE OF CONTENTSS.N. Particulars Page

1 Highlights ................................................................................................................................................ 6

2 Due Diligence Certificate ......................................................................................................................... 9

3 Definitions ................................................................................................................................................ 10

4 Summary - Prudential ICICI Power ......................................................................................................... 12

5 Constitution of the Mutual Fund ............................................................................................................. 13

a) The Sponsors ................................................................................................................................... 13

b) The Trustee Company .................................................................................................................... 14

i) Directors .................................................................................................................................. 14

ii) Rights and Obligations of the Trustee ..................................................................................... 16

iii) Trusteeship Fees ...................................................................................................................... 17

c) Management of Asset Management Company ................................................................................ 18

i) Board of Directors of the AMC ................................................................................................ 18

ii) Powers, Duties & Responsibilities of the AMC ........................................................................ 20

iii) Key Employees of AMC & relevant experience ......................................................................... 21

iv) Fund Manager ......................................................................................................................... 24

v) Compliance Officer ................................................................................................................. 24

vi) Investor Relations Officer ........................................................................................................ 24

d) Auditors ............................................................................................................................................ 24

e) Registrar ........................................................................................................................................... 24

f) Custodian ......................................................................................................................................... 25

6 Investment Objectives & Policies – Prudential ICICI Power ................................................................... 26

7 Fundamental Attributes of the Scheme ................................................................................................ 26

1) Type of the Scheme ........................................................................................................................... 26

2) Investment Objectives ....................................................................................................................... 26

3) Investment Pattern ............................................................................................................................ 26

4) Change in Investment Pattern .......................................................................................................... 26

5) Terms of the Scheme ......................................................................................................................... 27

6) Change in Fundamental Attributes ................................................................................................... 28

7) Investment Strategy and Risk Control ............................................................................................... 28

8) Procedure followed for investment decisions ................................................................................... 28

9) Risk Factors and Special Considerations ........................................................................................... 29

10) Investment Restrictions for the Scheme ............................................................................................ 33

11) Underwriting by the Fund ................................................................................................................. 34

12) Computation of Net Asset Value ...................................................................................................... 34

13) Accounting Policies & Standards ...................................................................................................... 38

8 Units & The Offer on an on-going basis ................................................................................................. 41

General Information ................................................................................................................................... 41

1) Minimum Subscription Amount ....................................................................................................... 41

2) Offer Price for on-going subscriptions ............................................................................................. 41

3) Minimum Amount for Application ................................................................................................... 41

4) Initial Issue Expenses ........................................................................................................................ 41

5) Investment Options offered .............................................................................................................. 43

a) Cumulative Option .................................................................................................................. 43

b) Dividend Option ...................................................................................................................... 43


4

6) Pledge of Units for Loans .................................................................................................................. 43

7) Systematic Investment Plan ............................................................................................................... 43

8) Systematic Withdrawal Plan .............................................................................................................. 44

9) Flexible Lifetime Investment Programme ........................................................................................... 44

10) How to Switch ................................................................................................................................... 44

11) Who can Invest? ................................................................................................................................ 44

12) How to apply? ................................................................................................................................... 45

a) Resident Investors ................................................................................................................... 45

b) NRIs & FIIs ................................................................................................................................ 45

c) Mode of Payment on Repatriation Basis ................................................................................. 45

d) Mode of Payment on Non-Repatriation Basis ......................................................................... 45

e) Joint Applicants ....................................................................................................................... 46

f) Nomination Facility .................................................................................................................. 46

13) Redemption of Units ........................................................................................................................ 46

a) Redemption Price .................................................................................................................... 47

b) Applicable NAV ........................................................................................................................ 47

c) How to Redeem? ..................................................................................................................... 47

d) Payment of Proceeds ............................................................................................................... 47

e) Redemption by NRIs/ FIIs ......................................................................................................... 48

f) Effect of Redemptions ............................................................................................................. 48

g) Fractional Units ........................................................................................................................ 48

h) Right to Limit Redemptions ..................................................................................................... 48

i) Suspension of Sale and Redemption of Units ......................................................................... 48

j) Purchase of units on on-going basis ....................................................................................... 49

k) Purchase Price .......................................................................................................................... 49

l) How to Purchase units on an on-going basis .......................................................................... 49

14) Load Structure ................................................................................................................................ 50

1) Load Structure of the Scheme ................................................................................................. 50

2) Fees and Expenses of the Scheme ........................................................................................... 50

a) Initial Issue Expenses ..................................................................................................... 51

b) Recurring Expenses ........................................................................................................ 52

3) Fees and Expenses of the Existing Scheme ........................................................................................ 53

a) Annual Scheme Recurring Expenses ........................................................................................ 54

b) Condensed Financial Information ........................................................................................... 60

15) Unitholders Rights and Services .................................................................................................... 76

1) Investors Services ..................................................................................................................... 76

2) Ease of Transactions ................................................................................................................ 76

a) Customer Service Centres in major metros .................................................................... 76

b) Process transactions in a timely manner ........................................................................ 76

3) Problem Resolution ................................................................................................................. 76

4) Information about the Scheme ............................................................................................... 76

5) NAV Information ..................................................................................................................... 76

6) Disclosure of information under the Regulations ................................................................... 77

7) Rights of Unitholders of the Scheme ....................................................................................... 77

8) Duration of the Scheme/winding up. ...................................................................................... 77

9) Procedure and manner of Winding up .................................................................................... 78

10) Tax Benefits ............................................................................................................................. 78


5

I) To the Mutual Fund .......................................................................................................................... 78

II) To the Unitholders ............................................................................................................................ 78

A) Income Tax ...................................................................................................................................... 78

B) Long Term Capital Gains ................................................................................................................... 78

i) For Individuals and HUFs ......................................................................................................... 78

ii) For Partnership Firms and Indian Companies .......................................................................... 79

iii) For Non- resident Indians ........................................................................................................ 79

iv) For FIIs ..................................................................................................................................... 79

C) Short term Capital Gains .................................................................................................................. 79

D) Tax Deduction at Source on Capital Gains ........................................................................................ 79

E) Exemption from Tax on Capital Gains arising on

Transfer of Units held for more than 12 months .............................................................................. 80

F) Investments by Charitable and Religious trusts ................................................................................ 80

G) Wealth Tax ...................................................................................................................................... 80

14) Other Matters ................................................................................................................................. 81

1) Unitholders Grievances Redressal Mechanism ........................................................................ 81

2) Associate Transactions ............................................................................................................ 82

3) Details of Investment in Companies that hold more than 5%

of NAV of Schemes managed by the AMC .............................................................................. 89

4) Penalties and Pending Litigations ........................................................................................... 91

5) Borrowing by the Mutual Fund ............................................................................................... 98

6) Inter-Scheme Transfers ............................................................................................................ 98

7) General Information ............................................................................................................... 99

a) Power to make Rules ..................................................................................................... 99

b) Power to remove Difficulties .......................................................................................... 99

c) Scheme to be binding on the Unitholders ..................................................................... 99

d) Documents available for Inspection ............................................................................... 99


6

HIGHLIGHTS� The Sponsors of the Fund are Prudential plc of the United Kingdom (UK) and ICICI Limited (ICICI). Prudential plc is a

leading international financial services group providing retail financial products and services and fund management tomany millions of customers worldwide. As a group Prudential plc has, as of 31 December 2002, over GBP155 billion offunds under management, more than 12 million customers and over 15,000 employees, worldwide.

Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June 4, 2002, has accorded its approvalin recognizing ICICI Bank Ltd. as a co-sponsor consequent to the merger of ICICI Ltd. with ICICI Bank Ltd.

ICICI Bank is India’s second largest bank with an asset base of Rs. 106,812 crore. ICICI Bank provides a broad spectrumof financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards,corporate and agricultural finance. The Bank services a growing customer base of more than 7 million customers and 6million bondholder accounts through a multi-channel access network. This includes about 450 branches and extensioncounters, 1675 ATMs, call centres and Internet banking (Source: Press Release dated May 23, 2003 at www.icicibank.com).ICICI Bank posted a net profit of Rs.1, 206 crore for the year ended March 31, 2003. ICICI Bank is the only Indian companyto be rated above the country rating by the international rating agency Moody’s and the only Indian company to beawarded an investment grade international credit rating. The Bank enjoys the highest AAA (or equivalent) rating from allleading Indian rating agencies.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-ownedsubsidiary.

� Fund Management expertise

Prudential ICICI Asset Management Company Limited, the Investment Manager to the Prudential ICICI Mutual Fund,manages assets over Rs. 12,600 crores as of June 30, 2003 through 16 schemes. It is one of the largest asset managementcompanies in the country. Prudential ICICI Asset Management Company Limited, the Investment Manager to the PrudentialICICI Mutual Fund, manages assets over Rs. 13,000 crores as of August 31, 2003 through 16 schemes. It is one of thelargest asset management companies in the country.

� Prudential ICICI Power (after conversion of the Scheme into an open ended fund) is the name of the Scheme and does notin any manner indicate either the quality of the Schemes or its future prospects and returns.

� The Scheme seeks to generate long-term capital appreciation.

Load :

Entry Load:

i. For investments of less than Rs. 10 Lakhs: Entry load at 2.25% of applicable Net Asset Value (NAV).

ii. For investment of Rs.10 Lakhs and above but upto Rs. 3 crores: Entry load at 1.75% of applicable Net Asset Value(NAV)

iii. For investment of Rs. 3 crores and above : Entry load is Nil.

Exit Load:

On an on-going basis, the Trustee, for the present does not intend to charge an exit load on redemption of Units.

No entry load will be charged in respect of switch transaction from one equity scheme of the Fund to anotherequity scheme of the Fund.

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide to introducea differential load structure on the Units subscribed/redeemed on any Business Day.

� High Liquidity - Being an open ended Scheme, Units may be purchased or redeemed on every Business Day at NAV basedprices subject to applicable load provisions. The Fund will, under normal circumstances, endeavour to despatch redemptioncheques within 3 Business Days. Please see Para “Redemption of Units” on page 46 for details of Redemption.

� Options available are Cumulative Option and Dividend Option.

� Investors who hold units in any of the open ended schemes of the Fund may switch all or part of their holdings to theScheme on an ongoing basis. No entry load will be charged in respect of switch transaction from one equityscheme of the Fund to another equity scheme of the Fund. Further, under the Flexible Lifetime Investment Programme,investors may choose to alter the allocation of their investment among the open-ended schemes of Prudential ICICIMutual Fund in order to meet their changing circumstances during their lifetime.

� The following Tax benefits are available as per the Finance Act, 2003:

� Finance Act 2003 has inserted section 10(35), whereby any income received in respect of units of Mutual Fund specifiedunder clause (23D) of Section 10 will be exempt from income tax in the hands of the unit holders.

� Long-term Capital Gains in respect of Units held for a period of more than 12 months will be chargeable under section112 of the Income-Tax Act, 1961, at a rate of 20% plus surcharge, as applicable.

� As provided under section 54EC of the Income Tax Act, 1961, where an assessee has made capital gains from the transfer


7

of units held in the Mutual Fund Scheme for a period exceeding 12 months and the assessee has at any time within aperiod of 6 months after the date of such transfer, invested such capital gains in the long term specified assets, suchcapital gains shall be exempted from tax on capital gains under section 54EC of the Income Tax Act 1961.

� As provided in Section 54ED, where an assessee has made capital gains arising from the transfer of units held in theMutual Fund Scheme for a period exceeding 12 months will be exempt, if the assessee has, any time within a period of 6months after the date of such transfer, invested the whole of the capital gains in acquiring equity shares forming part ofan eligible issue of capital. However, if the assessee has invested only a part of the capital gains, he will be eligible for theproportionate exemption. An eligible issue of capital means an issue of equity shares offered for subscription to thepublic by a public company formed and registered in India.

� Investors in the Scheme are not being offered any guaranteed returns.

� Investors are advised to consult their Legal /Tax Advisors before making an investment decision in the Scheme.


8

SPONSORS

Prudential plcLaurence Pountney Hill,London EC4R DHH,United Kingdom

ICICI Bank LimitedLandmark,Race Course Circle,Vadodara 390 007,India

Asset Management Company

Prudential ICICI Asset Management Company Limited

Registered Office206 Ashoka Estate, 2nd Floor,24 Barakhamba Road,New Delhi – 110 001

Corporate Office3rd Floor, Contractor Building.41, R. Kamani MargBallard EstateMumbai 400 038.

Trustee

Prudential ICICI Trust Limited206 Ashoka Estate, 2nd Floor,24 Barakhamba Road,New Delhi – 110 001

Registrar

Computer Age Management Services Pvt. LimitedA & B Lakshmi Bhavan,609 Anna SalaiChennai 600 006

Auditors to the Scheme

N. M. Raiji & CompanyUniversal Insurance BuildingSir Phiroze Shah Mehta RoadMumbai 400 001

Custodian

HDFC Bank LimitedSandoz HouseDr. Annie Besant RoadWorliMumbai 400 018

Legal Advisors:

A.R.A. LAWAgra Building,1st Floor,121, M.G. Road,Fort, Mumbai - 400 023


9

SECTION I

DUE DILIGENCE CERTIFICATE

It is confirmed that:

i) The draft Offer Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and theguidelines and directives issued by SEBI from time to time.

ii) All legal requirements connected with the launching of the Scheme and also the guidelines, instructions, etc. issued bythe Government of India and any other competent authority in this behalf, have been duly complied with.

iii) The disclosures made in the Offer Document are true, fair and adequate to enable the investors to make a well-informeddecision regarding investment in the proposed Scheme.

iv) The intermediaries named in the Offer Document, according to the information given to the AMC, are registered withSEBI and till date such registration is valid.

Place : Mumbai Ranganath AthreyaDate : September 24, 2003 Vice President – Finance, Compliance,

& Company Secretary

Note: The Due Diligence Certificate as stated above was submitted to SEBI.


10

DEFINITIONSIn this Offer Document, the following words and expressions shall have the meaning specified herein, unless the contextotherwise requires:

Asset Management Company or Prudential ICICI Asset Management Company Ltd.AMC or Investment Manager (formerly ICICI Asset Management Company Limited), the Asset

Management Company incorporated under the Companies Act, 1956,and registered with SEBI to act as an Investment Manager for the schemesof Prudential ICICI Mutual Fund

Applicable NAV The NAV applicable for purchases/ redemptions /switches, based on thetime of the Business Day on which the application is accepted.

Business Day A day other than (1) Saturday and Sunday or (2) a day other than a dayon which the Stock Exchange, Mumbai and National Stock Exchange areclosed whether or not the Banks in Mumbai are open. (3) a day on whichthe Sale and Redemption of Units is suspended by the Trustee/AMC.

Provided that the days when the banks at any centre where the AMC’sCustomer Service Centers are located, are closed due to a local holiday,such days will be treated as non Business Days at such centres for thepurposes of accepting fresh subscriptions. However, if the AMCs officesin such centres are open on such local holidays, then redemption andswitch requests will be accepted at those centres, provided it is a BusinessDay for such scheme on an overall basis.

Custodian HDFC Bank Limited, Mumbai, acting as Custodian to the Scheme, or anyother custodian who is approved by the Trustee and has been grantedregistration by SEBI under the Securities and Exchange Board of India(Custodian of Securities) Regulations, 1996 as amended from time totime.

FII Foreign Institutional Investors registered with SEBI under Securities andExchange Board of India (Foreign Institutional Investors) Regulations,1995, as amended from time to time.

ICICI Bank ICICI Bank Limited

Investment Management The Agreement dated September 3, 1993 entered into betweenAgreement Prudential ICICI Trust Limited (formerly ICICI Trust Limited) and Prudential

ICICI Asset Management Company Limited (formerly ICICI AssetManagement Company Limited) as amended from time to time.

NAV Net Asset Value of the Units of the Scheme and the Plans and Options,if any, thereunder, calculated on every Business Day in the mannerprovided in this Offer Document or as may be prescribed by Regulationsfrom time to time.

NRI Non-Resident Indian.

Offer Document This document issued by Prudential ICICI Mutual Fund, offering Unitsof Prudential ICICI Power. This document constitutes an offer to theexisting investors of ICICI Power and prospective investors who wish tosubscribe to the Units of Prudential ICICI Power.

Prudential Prudential plc (formerly known as Prudential Corporation plc), of theU.K. and includes, wherever the context so requires, its wholly ownedsubsidiary Prudential Corporation Holdings Limited.

Prudential ICICI Power or Prudential ICICI Power (formerly ICICI Power,the closed endedPower or The Scheme mutual fund scheme which has been converted into an open-ended

fund) and the options and investment plans, if any, offered thereunder.

RBI Reserve Bank of India, established under the Reserve Bank of India Act,1934, as amended from time to time.

SEBI Securities and Exchange Board of India established under Securities andExchange Board of India Act, 1992, as amended from time to time.

The Fund or The Mutual Fund Prudential ICICI Mutual Fund (formerly ICICI Mutual Fund), a trust setup under the provisions of the Indian Trusts Act, 1882. The Fund is


11

registered with SEBI vide Registration No.MF00393/6 dated October13, 1993 as ICICI Mutual Fund and has obtained approval from SEBI forchange in name to Prudential ICICI Mutual Fund vide SEBI’s letter datedApril 16, 1998.

The Trustee Prudential ICICI Trust Limited (formerly ICICI Trust Limited), a companyset up under the Companies Act, 1956, and approved by SEBI to act asthe Trustee for the schemes of Prudential ICICI Mutual Fund

The Regulations Securities and Exchange Board of India (Mutual Funds) Regulations,1996, as amended from time to time.

Trust Deed The Trust Deed dated August 25, 1993 establishing ICICI Mutual Fund(subsequently renamed Prudential ICICI Mutual Fund), as amended fromtime to time.

Trust Fund Amounts settled/contributed by the Sponsors towards the corpus ofthe Prudential ICICI Mutual Fund and additions/accretions thereto.

Unit The interest of an investor which consists of one undivided share in theNet Assets of the Scheme.

Unitholder A holder of Units in the scheme of ICICI Power (which has been convertedin to an open ended fund) and who has not redeemed his unitholdingsin the Scheme and/or a holder of Units in Prudential ICICI Power and thePlans and Options, if any, offered thereunder.


12

Summary – Prudential ICICI Power

Name of the Scheme Prudential ICICI Power

Structure Open-ended growth fund

Features The fund seeks to generate, primarily, long-term capital appreciationthrough investment in equity and equity related securities of companiesin the core sector and associated feeder industries.

Application Amount Minimum Rs.5,000 per application and a minimum additional amountin multiples of Rs.500 thereafter.

The Unitholders of ICICI Power may continue their unit holdings inPrudential ICICI Power notwithstanding the above limit.

Offer Price for On-going Based on the Applicable NAV of the Scheme, subject to entry loadsubscriptions provisions.

Initial Issue Expenses As the Scheme was an existing scheme (ICICI Power) converted into anopen-ended scheme, there were no initial issue expenses under theScheme.

Flexible Lifetime The Fund will allow investors the flexibility to alter the allocationInvestment Programme of their investments amongst the designated open-ended schemes

offered by the Fund in order to meet their changing investment needsor risk profiles by switching between the schemes of the Fund. It is theintention of the Fund to enable investors in the Scheme to switch betweenthe present open ended schemes and the future schemes which may beincluded in the Flexible Lifetime Investment Programme. Please refer topage 44 for more details of the Flexible Lifetime Investment Programme.

Liquidity On an ongoing basis, an investor can purchase and redeem Units onevery Business Day at NAV based prices, subject to the prevailing loadstructure. (Please refer to page 47 for Redemption Price and page 49 forPurchase Price).

The Units of the Scheme are not listed on any exchange.

The Fund will, under normal circumstances, endeavour to dispatch theredemption cheques within 3 Business Days from the date of acceptanceof the redemption request at any of the Customer Service Centers.

Transparency NAV will be determined on every Business Day, except in specialcircumstances described on page 76. NAV of the Scheme shall be madeavailable at all Customer Service Centers of the AMC. The AMC shallalso endeavor to have the NAV published in a daily newspaper andupdated on AMC’s website (www.pruicici.com).

AMC shall update the NAVs on the website of Association of MutualFunds in India - AMFI (www.amfiindia.com) by 8.00-p.m. every BusinessDay. In case of any delay, the reasons for such delay would be explainedto AMFI and SEBI by the next day. If the NAVs are not available beforecommencement of business hours on the following day due to anyreason, the Fund shall issue a press release providing reasons andexplaining when the Fund would be able to publish the NAVs.

The Mutual Fund shall disclose the full portfolio of the Scheme everyquarter.

Repatriation facility NRIs/PIOs/FIIs have been granted a general permission by RBI [Schedule5 of the Foreign Exchange Management (Transfer or Issue of Security bya Person Resident Outside India) Regulations, 2000] for investing in /redeeming units of the schemes subject to conditions set out in theaforesaid regulations.

Eligibility for Trusts Religious and Charitable Trusts are eligible to invest in the Scheme underthe provisions of Section 11(5)(xii) of the Income-tax Act, 1961 readwith Rule 17C of Income-tax Rules, 1962.


13

CONSTITUTION OF THE MUTUAL FUNDICICI Mutual Fund, which has been renamed as Prudential ICICI Mutual Fund (“the Mutual Fund” or “the Fund”) has beenconstituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882 (2 of 1882). The Mutual Fund wasregistered with SEBI on October 13, 1993.

ICICI Mutual Fund was established by ICICI, by execution of a Trust Deed dated August 25, 1993. Prudential plc, through itswholly owned subsidiary, Prudential Corporation Holdings Limited, has contributed an amount of Rs.12.2 lacs to the corpusof the Fund and has received permission for such contribution from the RBI vide letter No: CO.FID(I)4940/10/I.07.02.200(221)97-98 dated April 25, 1998. SEBI has approved the change in name of the Fund to Prudential ICICI Mutual Fund vide its letterIIMARP / 88 / 98 dated April 16, 1998. A deed of amendment to the Trust Deed dated August 25, 1993 was executed andregistered.

a) Sponsors

Prudential plc (formerly known as Prudential Corporation plc)

Prudential plc is a leading international financial services group providing retail financial products and services and fundmanagement to many millions of customers worldwide. As a group Prudential plc has, as of 31 December 2002, over GBP155billion of funds under management, more than 12 million customers and over 15,000 employees, worldwide.

Given below is a brief summary of Prudential’s financials:

(Rs. crores)

Description 2003 2002 2001 2000(Half year (Year (Year (Year

ended ended ended endedJune 30) December December December

Unaudited 31) 31) 31)

Total Income 130,085 253,033 188,748 133,124Profit Before Tax 1,435 3,562 2,833 6,968Profit After Tax 1,023 3,304 2,862 4,878

Shareholders’ Funds 26,981 26,988 29,063 29,578Earnings per share (Rs.) 4.64 11.63 17.14 22.22Equity Capital (5 Pence per share) 736 736 736 728

Free Reserves 26,245 26,252 28,327 28,850Net-worth 26,981 26,988 29,063 29,578Book Value per share (Rs.) 134.91 134.94 145.32 149.38

Percentage of dividend per share 106% 520% 508% 490%Dividend per share (in Pence) 5.3P

(Interim) 26.00P 25.4P 24.5P

ICICI Bank Limited

Securities and Exchange Board of India, vide its letter no. MFD/PM/567/02 dated June 4, 2002, has accorded its approval inrecognizing ICICI Bank Ltd. as a co-sponsor consequent to the merger of ICICI Ltd. with ICICI Bank Ltd.

ICICI Bank is India’s second largest bank with an asset base of Rs. 106,812 crore. ICICI Bank provides a broad spectrum offinancial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards,corporate and agricultural finance. The Bank services a growing customer base of more than 7 million customers and 6 millionbondholder accounts through a multi-channel access network. This includes about 450 branches and extension counters,1675 ATMs, call centres and Internet banking (Source: Press Release dated May 23, 2003 at www.icicibank.com). ICICI Bankposted a net profit of Rs.1, 206 crore for the year ended March 31, 2003. ICICI Bank is the only Indian company to be ratedabove the country rating by the international rating agency Moody’s and the only Indian company to be awarded an investmentgrade international credit rating. The Bank enjoys the highest AAA (or equivalent) rating from all leading Indian ratingagencies.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was originally a wholly-ownedsubsidiary of ICICI.


14

Given below is a brief summary of ICICI Bank’s financials:

(Rs. in crores)

Year ended Year ended *Year endedMarch 31, 2001 March 31, 2002 March 31, 2003

Total Income 1462.13 2726.59 12,526.88Profit After Tax 161.09 258.3 1,206.18Free Reserves @ 1092.26 5632.41 6,320.65Net Worth 1302.43 6244.96 6933.31Earnings per Share (Rs.) (diluted) 8.13 11.61 19.65Book Value per Share (Rs.) 59.11 101.95 113.10Dividend 20% 20% 75%Paid Up Capital (Equity) $ 220.36 612.55 612.66(Preference) # 0 350 350

* The results for the year ended March 31, 2003 include the result of erstwhile ICICI Limited and its subsidiaries, ICICIPersonal Financial Services Limited and ICICI Capital Services Limited, amalgamated with the Bank w.e.f. March 30, 2002.The financials for the current periods are not comparable with the earlier periods.

@ Excludes revaluation reserve

$ Includes in 2002, Rs. 392.67 crores for shares to be issued to shareholders of ICICI Limited on amalgamation, further,during the year ended March 31, 2003, the Bank allotted 3,000 shares pursuant to exercise of employee stock options.

# Represents in 2002, face value of 350 preference shares to be issued to shareholders of ICICI Ltd on amalgamation,redeemable at par on April 20, 2018. As per the notification received from Ministry of Finance, the restriction of section12(1) of the Banking Regulation Act, 1949, prohibiting banks established after 1944 from holding preference shares, isnot applicable to the Bank for a specified period.

Prudential plc of UK, through its wholly owned subsidiary, Prudential Corporation Holdings Limited, has been issued andallotted shares aggregating 55% stake in the share capital of Prudential ICICI Asset Management Company Limited (AMC),whereas the balance 45% shareholding in the AMC is being held by erstwhile ICICI and is under process of being transferredto ICICI Bank Ltd. ICICI Bank will hold 30% of the paid-up capital of the AMC and the balance 15% will be held by a subsidiaryof ICICI Bank Ltd. (ICICI Venture Funds Management Company Limited), in order to ensure adherence with the provisions ofSection 19(2) of the Banking Regulation Act, 1949.

b) The Trustee Company (The Trustee) - Prudential ICICI Trust Limited

Prudential ICICI Trust Limited, a company incorporated under the Companies Act, 1956 is the Trustee to the Fund vide TrustDeed dated August 25, 1993 as amended from time to time. Prudential plc, through its wholly owned subsidiary, PrudentialCorporation Holdings Limited, U.K. holds 55% of the shares of the Trustee, whereas the balance 45% shareholding of theTrustee company is being held by erstwhile ICICI and is under a process of being transferred to ICICI Bank Ltd and its GroupCompany.

i) The Directors of the Trustee Company are:

Mr. Natesan Vaidheeswaran Iyer Partner(S/o. Mr. Chinnaswamy Natesan Iyer) C.C. Chokshi & Co., Mumbai73, Jupiter Apartments C.C. Chokshi & Co., Ahmedabad41, Cuffe Parade C.C. Chokshi & Co., BarodaMumbai 400 005 C.C. Chokshi & Co., New DelhiChartered Accountant C.C. Chokshi & Co., Goa

Deloitte Haskins & Sells, MumbaiDeloitte Haskins & Sells (National Firm), MumbaiDeloitte Haskins & Sells, AhmedabadDeloitte Haskins & Sells, BarodaDeloitte Haskins & Sells, New DelhiDeloitte Haskins & Sells, CalcuttaTouche Ross & Co., ChennaiTouche Ross & Co., MumbaiTouche Ross & Co., AhmedabadTouche Ross & Co., BarodaDirectorCCC Services Co. Pvt. Ltd., Mumbai (Chairman)Deloitte Touche Tohmatsu (Global Board)NSE.IT Limited, MumbaiDiscount and Finance House of India Ltd, MumbaiNational Commodity & Derivatives Exchange Limited


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Mr. Vishnu Bhagwandas Haribhakti Partner(S/o. Late Mr. Bhagwandas Haribhakti) Haribhakti & Co., MumbaiFlat No.51, 5th Floor V.B. Haribhakti Associates, MumbaiMaker Tower ‘B’ Haribhakti Shah & Co., AhmedabadCuffe Parade V.B. Haribhakti & Co., New DelhiMumbai 400 005 V.B. Haribhakti & Co., ChennaiChartered Accountant V.B. Haribhakti & Co., Bangalore

V.B. Haribhakti & Co., JodhpurV.B. Haribhakti & Co., CalcuttaV.B. Haribhakti & Co., JaipurDirectorBajaj Electricals LtdRohit Pulp and Paper Mills Company Ltd.The Simplex Mills Company Ltd.The Anglo-French Drug Co.(Eastern) Ltd.Ester Industries Ltd.Lakshmi Automatic Loom Works Ltd.Tilaknagar Industries Ltd.Hindustan Composites Ltd.Mutual Mecaplast Ltd (Alternate Director)Haribhakti MRI Corporate Services Pvt.Ltd.Moores Rowland Consulting Pvt. Ltd.TrusteeBombay Rotary Midtown TrustThe Pransukhlal Mafatlal Hindu Swimming Bath and Boat ClubTrustV.B. Haribhakti Charitable TrustIndian Merchants’ Chamber Platinum Jubilee Endowment TrustCouncil for Fair Business PracticesManaging Committee MemberIndian Merchant ChamberThe Associated Chambers of Commerce and Industry of India

Mr. Eruch .B. Desai Partner(S/o. Mr. Byramsha Desai) Mulla & Mulla & Craigie Blunt & Caroe81, Sonarica Director33-A, Pedder Road Birla Global Finance Ltd.Mumbai 400 026 Bekaert Industries Pvt.Ltd.Solicitor and Advocate The Century Textiles & Industries Ltd.

Dolphin Fisheries & Trading Pvt.Ltd.Hercules Hoists Ltd. (Alternate director)Hindalco Industries Ltd.Ispat Metallics India Ltd.Matsushita Lakhanpal Battery India LtdNew Age International Private Ltd.National Panasonic India Private Ltd.Siltap Chemicals Ltd.Widia (India) Ltd.(Alternate)

Mr. Nagesh D. Pinge* Nominee Director (on behalf of ICICI(S/o. Dinkar Shripad Pinge) Bank Limited)D-408/1, Viman Darshan Jindal Vijaynagar Steel Co. Ltd.28-29 Swami Nityanand Marg Jindal Thermal Power Co. Ltd.Andheri (East) SWIL LimitedMumbai 400069 Videocon International Ltd.General Manager –Risk, The India Cements LimitedCompliance and Audit Group –ICICI Bank Ltd.

Mr. Sham P. Subhedar* Senior Advisor(S/o. Mr. Pandharinath Subhedar) Prudential Corporation Asia Ltd.1, Gulmohar DirectorS.V. Road Peter Pan Travels Services Pvt. Ltd.Vile Parle (W) SAS Management Consultants and OfficeMumbai 400 056 Services Pvt. Ltd.Consultant ICICI Prudential Life Insurance Company Ltd.

Prudential Process Management Services Pvt. Ltd.

*Associate Directors: Mr. Nagesh Pinge is a General Manager (Head-Risk, Compliance and Audit Group) of ICICI Bank Limitedand Mr. S.P. Subhedar is a Senior Advisor to the Prudential Corporation Asia Limited, a wholly owned subsidiary of Prudentialplc.


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ii) Rights and Obligations of the Trustee under the Trust Deed and the Regulations

Pursuant to the Deed of Trust dated August 25, 1993 constituting the Mutual Fund and in terms of the Regulations the rightsand obligations of the Trustee are as under:

1. The Trustee shall have a right to obtain from the AMC such information as is considered necessary by it.

2. The Trustee shall ensure before the launch of any scheme that the Asset Management Company has:

i. systems in place for its back office, dealing room and accounting;

ii. appointed all key personnel including fund manager(s) for the scheme(s) and submitted to the Trustee their bio-datawhich shall contain the educational qualifications, past experience in the securities market within fifteen days of theirappointment;

iii. appointed auditors to audit the accounts of the schemes;

iv. appointed a compliance officer to comply with regulatory requirements and to redress investor grievances;

v. appointed registrars and laid down parameters for their supervision;

vi. prepared a compliance manual which is updated by including all the provisions of regulations and guidelines issuedby SEBI from time to time and designed internal control mechanisms including internal audit systems commensuratewith the size of the mutual fund.

vii. Specified norms for empanelment of brokers and marketing agents.

3. The Trustee shall ensure that the AMC has been diligent in empanelling the brokers, in monitoring securities transactionswith brokers and avoiding undue concentration of business with any broker.

4. The Trustee is required to ensure that the AMC has not given any undue or unfair advantage to any associate or dealt withany of the associates of the AMC in any manner detrimental to the interests of the Unitholders.

5. The Trustee is required to ensure that the transactions entered into by the AMC are in accordance with the Regulationsand the provisions of the Scheme.

6. The Trustee is required to ensure that the AMC has been managing the schemes independently of other activities and hastaken adequate steps to ensure that the interest of investors of one Scheme are not compromised with those of any otherScheme or of other activities of the AMC.

7. The Trustee is required to ensure that all the activities of the AMC are in accordance with the provisions of the Regulationsand shall exercise general and specific due diligence as required under the Regulations.

8. Where the Trustee has reason to believe that the conduct of the business of the Fund is not in accordance with theseRegulations and the provisions of Scheme it is required to take such remedial steps as are necessary by it and toimmediately inform SEBI of the violation and the action taken by it.

9. Each Director of the Trustee is required to file with the Trust the details of each securities transaction, which exceed thevalue of Rs.1 lakh on a quarterly basis.

10. The Trustee is accountable for and is required to be the custodian of the Fund’s property of the respective Scheme and tohold the same in trust for the benefit of the Unitholders in accordance with the Regulations and the provisions of theTrust Deed.

11. The Trustee is required to take steps to ensure that the transactions of the Fund are in accordance with the provisions ofthe Trust Deed.

12. The Trustee is responsible for the calculation of any income due to be paid to the Mutual Fund and also of any incomereceived in the Mutual Fund for the holders of the units of any scheme in accordance the Regulations and the Trust Deed.

13. The Trustee is required to obtain the consent of the Unitholders of the Scheme:

a. When the Trustee is required to do so by SEBI in the interest of the Unitholders; or

b. Upon a requisition made by three-fourths of the Unitholders of the Scheme; or

c. If a majority of the Trustees decide to wind up the Scheme or prematurely redeem the Units; or

d. The Trustee shall ensure that no change in the fundamental attributes of the Scheme or the trust or fee and expensespayable or any other change which would modify the Scheme and affects the interests of unit holders, shall be carriedout unless:

i) a written communication about the proposed change is sent to each Unitholder and an advertisement is givenin one English daily newspaper having nationwide circulation as well as in a newspaper published in thelanguage of the region where the Head Office of the mutual fund is situated; and

ii) the unit holders are given an option to exit at the prevailing Net Asset Value without any exit load.

14. The Trustee is required to call for the details of transactions in securities by the key personnel of the AMC in their ownnames or on behalf of the AMC and report the same to SEBI as and when called for.


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15. The Trustee is required to review quarterly, all transactions carried out between the Fund, the AMC and its associates.

16. The Trustee is required to review quarterly, the net worth of the AMC and in case of any shortfall ensure that the AMCmakes up for the shortfall as per clause (f) of sub regulation (1) of Regulation 21 of the Regulations.

17. The Trustee is required to periodically review all service contracts such as custody arrangements and transfer agency, andsatisfy itself that such contracts are executed in the interest of the Unitholders.

18. The Trustee is required to ensure that there is no conflict of interest between the manner of deployment of its net worthby the AMC and the interest of the Unitholders.

19. The Trustee is required to periodically review the investor complaints received and the redressal of the same by the AMC.

20. The Trustee is required to abide by the Code of Conduct as specified in the Fifth Schedule of the Regulations.

21. The Trustee has to furnish to SEBI on a half yearly basis:-

(a) a report on the activities of the Fund covering the details as prescribed by SEBI;

(b) a certificate stating that the Trustees have satisfied themselves that there have been no instances of self dealing orfront running by any of the Trustee, directors and key personnel of the AMC;

(c) a certificate to the effect that the AMC has been managing the schemes independently of any other activities and incase any activities of the nature referred to in sub Regulation (2) of Regulation 24 of the Regulations have beenundertaken, the AMC has taken adequate steps to ensure that the interest of the Unitholders is protected.

22. The independent Directors of the Trustee are required to give their comments on the report received from the AMCregarding the investments by the Mutual Fund in the securities of the group companies of the sponsors.

23. No amendments to the Trust Deed shall be carried out without the prior approval of SEBI and Unitholders approval/consent will be obtained where it affects the interests of Unitholders as per the procedure / provisions laid down in theRegulations.

24. The Trustees shall exercise general and specific due diligence required under the Regulations.

25. Trustee shall maintain high standards of integrity and fairness in all their dealings and in the conduct of their business.

26. Trustee shall render at all times high standards of service, exercise due diligence, ensure proper care and exerciseindependent professional judgement.

27. The independent directors of the Trustee shall pay specific attention to the following as may be applicable, namely :

i. The Investment Management Agreement and the compensation paid under the agreement.

ii. Service contracts with affiliates – whether the asset management company has charged higher fees than outsidecontractors for the same services.

iii. Selection of the asset management company’s independent directors

iv. Securities transactions involving affiliates to the extent such transaction are permitted.

v. Selecting and nominating individuals to fill independent directors vacancies.

vi. Code of ethics must be designed to prevent fraudulent, deceptive or manipulative practices by insiders in connectionwith personal securities transactions.

vii. The reasonableness of fees paid to sponsors, asset management company and any others for services provided.

viii. Principal underwriting contracts and renewals

ix. Any service contracts with the associates of the asset management company.

28. Notwithstanding anything contained in sub-regulations (1) to (25) of regulation 18 of the Regulations, the Trustees shallnot be held liable for acts done in good faith if they have exercised adequate due diligence honestly.

29. SEBI circular no. MFD/CIR/10/ 15895 /2002 dated August 20, 2002 provides that the meetings of the Trustees shall beheld at least once in every two calendar months and at least six such meetings should be held every year. Further, as perthe Regulations, for the purposes of constituting the quorum for the meetings of the Trustees, at least one IndependentTrustee or Director should be present during such meetings.

During the period from April 1, 2003 to August 31, 2003, three meetings of the Directors of the Trustee were held. TheTrustee’s supervisory role is discharged by reviewing the information and the operations of the Fund based on reportssubmitted at the Board Meetings of the Trustee, by reviewing the reports being submitted by the Internal Auditor and the bi-monthly, quarterly and half-yearly compliance reports. The Trustee also conducts a detailed review of the half-yearly andannual accounts of the schemes of the Fund and discusses the matters arising there from with the Statutory Auditors of theFund.

iii) Trusteeship Fees

Pursuant to the Deed of Trust constituting the Fund, the Fund is authorized to pay the Trustee a fee for its services in suchcapacity of a sum, presently computed at the rate of upto 0.05% of the amount, being the aggregate of the Trust Fund and


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Unit Capital of all the Schemes put together on April 1 of each year or a sum of Rs.5 lacs, whichever is higher. The Trustee maycharge further fees as permitted from time to time under the Trust Deed and the Regulations.

SEBI has, in terms of its letter No.MFD/LV/059/00 dated January 31, 2000 approved an amendment to Trust Deed. Theamendment authorizes the Trustee to decide upon the Trusteeship Fee to be charged from the Mutual Fund at the beginningof each financial year (April 1 to March 31), subject to the maximum limit of 0.05% to be arrived at as indicated above. Theamendment does not in any way, adversely impact or alter the interests of Unitholders under the existing schemes of the Fund.

c) Management Of Asset Management Company (AMC)

ICICI Asset Management Company Limited (I-AMC), a company registered under the Companies Act, 1956, was establishedby ICICI as its wholly owned subsidiary, to act as the Investment Manager of the ICICI Mutual Fund vide the InvestmentManagement Agreement dated September 3, 1993. Consequent to a review of long-term business strategy of the AMC, it wasdecided to further strengthen commitment to the individual investor segment. As a part of this Scheme, Prudential plc.(formerly known as Prudential Corporation plc.) of the UK (Prudential) was inducted as the new joint venture partner.

Prudential plc of UK, through its wholly owned subsidiary, Prudential Corporation Holdings Limited, has been issued andallotted shares aggregating 55% stake in the share capital of the AMC. Whereas the balance 45% shareholding in the AMCis being held by erstwhile ICICI and is under process of being transferred to ICICI Bank Ltd., that would hold 30% of the paid-up capital of AMC and the balance 15% will be held by a subsidiary of ICICI Bank Ltd. (ICICI Venture Funds ManagementCompany Limited), in order to ensure adherence with the provisions of Section 19(2) of the Banking Regulation Act, 1949.

I-AMC was approved by SEBI to act as the Investment Manager of ICICI Mutual Fund vide its letter No.IIMARP/MF/22356 datedOctober 12, 1993. Consequent to the restructuring of shareholding pattern as stated above, SEBI vide its letter No.IIMARP\631\98dated March 11, 1998 accorded its approval for the induction of Prudential plc (through its wholly own subsidiary, PrudentialCorporation Holdings Limited) as a shareholder of the AMC. The AMC has applied and secured approval from the Registrar ofCompanies, Delhi and Haryana, for its change of name to Prudential ICICI Asset Management Company Limited, vide letterNo.21/55-54135/320 dated March 26, 1998.

The AMC will manage the schemes of the Fund, including the Scheme mentioned in this Offer Document, in accordance withthe provisions of Investment Management Agreement, the Trust Deed, the Regulations and the objectives of each of theschemes.

AMC has obtained registration from SEBI vide Registration No.INP000000373 dated February 29, 2000 read with a renewedcertificate dated February 27, 2003, to act as a Portfolio Manager under SEBI (Portfolio Managers) Regulations, 1993. Further,the Mutual Funds Division of SEBI, vide its letter no. MFD/LV/248/2000 dated May 10, 2000, conveyed its no objection for theAMC undertaking PMS activities subject to the AMC complying with the requirements as envisaged in Regulation 24(2) ofSEBI (Mutual Funds) Regulations, 1996. The AMC has commenced the Portfolio Management activities, after complying withthe regulatory requirements.

i) Board of Directors of the AMC

Mr. Ajay Srinivasan

Prudential Corporation Asia, Suites 2910-14, Two Pacific Place, 88, Queensway, Hongkong.

Mr. Srinivasan is the Managing Director of Funds Prudential Corporation Asia responsible for its mutual funds / InstitutionalFunds business in Asia. Mr. Srinivasan was the Managing Director of the Prudential ICICI Asset Management Company Ltd.during the period March 1998 to December 2000 and was responsible for the development of business of the Company andits day-to-day management.

Mr. Srinivasan has significant experience in managing asset management companies. As the Deputy Chief Executive of ITCThreadneedle AMC. Mr. Srinivasan was part of the team responsible for making policy for ITC Threadneedle AMC Ltd and wasalso head of the fund management function. Prior to his tenure at ITC Threadneedle, Mr. Srinivasan was a member of the ITCGroup’s Financial Services Division and was responsible for establishing, planning and running several businesses at ITC,including the stock broking business, Over the Counter Exchange business, the private equity business and investmentbanking business.

Mr. Srinivasan began his career at ICICI where, as a part of project appraisal team, he assessed the feasibility of several projectsin various sectors.

Mr. Srinivasan has a Post Graduate Diploma in Business Management from Indian Institute of Management, Ahmedabad,specializing in finance. He has a Bachelor’s Degree in Economics (Honours) from St. Stephens’ College, New Delhi.

Mr. Ananda Mukerji

301, Radhika Apartments, Off. Sayani Road, Prabhadevi, Mumbai 400 025

Mr. Ananda Mukerji has a B Tech degree in Mechanical Engineering from the Indian Institute of Technology, Kharagpur and aPost-graduate Diploma in Management from the Indian Institute of Management, Kolkata. He has over 17 years experienceincluding 11 years at ICICI during which he set up and managed a number of businesses including the infrastructure finance,structured finance and advisory businesses. He also worked as Executive Assistant to the Managing Director & CEO, and Headof Strategy. Since January 2002, he has headed ICICI OneSource Limited, the ICICI group’s Business Process Outsourcing (BPO)arm, as its Managing Director & CEO.


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Mr. N. S. KannanFlat 201, Radhika Apts., 930 TPS IV, Off Sayani Road, Prabhadevi, Mumbai 400 025.

Mr. N.S. Kannan has completed a Mechanical Engineering from the Regional Engineering College, Trichy and has a Post-graduate Diploma in Management from the Indian Institute of Management, Bangalore. He is also a Chartered FinancialAnalyst from the Institute of Chartered Financial Analyst of India, Hyderabad. Mr. Kannan has over 17 years experienceincluding 13 years at ICICI during which he has managed a number of activities including the project finance, structuredfinance and treasury operations. He started his career with SRF Nippon denso Limited in 1987 as an Executive – ProjectPlanning and joined ICICI Ltd. in 1991 as a Project Officer. Subsequent to the merger of ICICI with ICICI Bank, he wasresponsible for the treasury operations including structured finance and strategy activities of the Bank as a Treasury Head. Heis currently acting as a CFO & Treasurer, managing the finance functions & treasury of the Bank.

Mr. K. S. MehtaC-70 Panchsheel Enclave, New Delhi 11 0017

Mr. Mehta is a Senior Partner of S.S. Kothari & Co., Chartered Accountants, and heads the firm’s management consultancydivision. Mr. Mehta specializes in corporate financial planning, restructuring, project financing and working capital control. Hehas an in-depth knowledge of industry in his capacity as Director of some of the leading companies and as a managementconsultant.

Mr. Mehta is a Member of the Managing Committee of Federation of Indian Chambers of Commerce and Industry (FICCI). Heis a former Member of the Advisory Committee on Primary Markets set up by SEBI, a Former Director on the Board of theNational Stock Exchange of India Limited and is the past President of PHD Chamber of Commerce & Industry.

Mr. Mehta is a FCA and has a Bachelor of Commerce (Hons.) Degree.

Mr. N. Ganga Ram703 Golden Castle, Sundar Nagar, Road No 2, Kalina, Santacruz (E), Mumbai 400 098

Mr. Ganga Ram is a Development Banker with extensive experience in corporate finance and management.

Mr. Ganga Ram, after serving as a Commercial Bank Executive for over 8 years, joined Reserve Bank of India / IndustrialDevelopment Bank of India (IDBI) in 1965. He worked with IDBI for 27 years and retired as Executive Director in September1992. At IDBI, Mr. Ganga Ram was associated with policy formulation and operations. Mr. Ganga Ram was with Unit Trust ofIndia for a brief period as Adviser in investments from January to August 1993. Mr. Ganga Ram worked as a Consultant to theWorld Bank and Asian Development Bank on several projects.

Mr. Ganga Ram is at present on the Boards of several companies. He is also on four committees of the National Stock Exchangeof India Limited.

Mr. Ganga Ram holds a Master of Arts degree in Economics from the University of Madras. He is a Certified Associate of theIndian Institute of Bankers and Fellow of the Economic Development Institute, World Bank, Washington.

Mr. Dadi EngineerSea Shells, 13, Darabsha Road, Off. Napeansea Road, Mumbai 400 036

Mr. Engineer is a Solicitor and Advocate and is a Senior Partner at Crawford Bayley & Co. He has over 40 years experience in thelegal profession and has expertise in various aspects of Corporate Law, Indirect Taxation, Foreign Exchange, Imports, TradeControl Regulations and Civil and Constitutional Law.

Mr. Engineer is the President of the Managing Committee of Bombay Incorporated Law Society and served as the RepresentativeMember of the Governing Council of the Bar Association of India. He has also been associated with the various committees setup by Bombay Chamber of Commerce and Industry and Associated Chambers of Commerce and Industry.

Mr. Engineer is on the Boards of several leading domestic and multi-national companies.

Mr. B. R. Gupta6B, Sheetal Apartments, Lokhandwala Complex, Andheri (W) , Mumbai400 053.

Mr. Gupta is the former Executive Director of the Life Insurance Corporation of India (LIC). He was working as Consultant(Investment) to GIC, India till December 2000.

Mr. Gupta has worked with LIC for over 35 years in various capacities and has had extensive experience in the operations of thelife insurance industry, specifically in the areas of investment, marketing, underwriting and administration. Mr. Gupta alsoworked in the investment department of the LIC for 10 years and headed the department as Executive Director. He wasresponsible for managing LIC’s portfolio comprising a variety of investments. Subsequent to his retirement, till May 1999, hefunctioned as the Investment Advisor to LIC.

Mr. Gupta is on the Boards of several companies and had been a Member of “The Administrative Committee of InsuranceInstitute of India”, “The Committee of NSE on Development of the Debt Market in India”, “ The Executive Committee of theNSE” and “The Advisory Committee on Secondary Market Operations of SEBI”. At present Mr. Gupta is an Advisor toSchoolNet India Ltd., an initiative of IL&FS.

Mr. Gupta is a M.A in English and has a LL.B. degree besides being a Fellow of Insurance Institute of India.


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Mr. Pradip P. Shah

72A, Embassy Apartments, 46, Nepean Sea Road, Bombay 400 006.

Mr. Pradip P. Shah started IndAsia, a private equity investment and corporate finance advisory company in April 1998, followinghis separation from the management of the Indocean Fund which he helped establish in October 1994, in association withaffiliates of Soros Fund Management and Chemical Venture Partners (now Chase Capital Partners).

Prior to starting Indocean, he was the Managing Director of the Credit Rating and Information Services of India Limited(‘CRISIL’), India’s first and the largest credit rating agency. Mr. Shah was one of the team members, which assisted in foundingCRISIL in 1988. While at CRISIL, Mr. Shah was instrumental in technology transfer to and the training of personnel of RatingAgency Malaysia Berhad and The Israeli Securities Rating Company.

Prior to founding of CRISIL, Mr. Shah assisted as a member of the project team in founding the Housing Development FinanceCorporation (HDFC) in 1977. Before joining HDFC, Mr. Shah was a Project Officer at the Industrial Credit and InvestmentCorporation of India Limited (‘ICICI’). Mr. Shah has also served as a consultant to USAID, the World Bank and the AsianDevelopment Bank.

Mr. Shah holds an MBA from Harvard Business School and is a qualified Chartered Accountant as well as a Cost Accountantand ranked first in India in the Chartered Accountancy examination.

Mr. Shailendra Bhandari

Quest End, 3rd Floor, 47, Cuffe Parade, Mumbai - 400 005

Mr. Bhandari is the Managing Director of the Prudential ICICI Asset Management Company Ltd. and is responsible fordevelopment of the business of the Company and its day-to-day management. Prior to joining AMC, for about seven months,Mr. Bhandari was working as a Consultant for application of Information Technology in the field of Finance & Banking. SinceSeptember 1994 to November 1999, Mr. Bhandari was associated with HDFC Bank Ltd. as Treasurer and Executive Director -Head of Capital Markets. At HDFC Bank, Mr. Bhandari’s main responsibilities included overseeing and development the entireCapital Markets and Private Banking functions of the bank, including the Treasury (Foreign Exchange, Derivatives, MoneyMarkets) as well as trading in Debt and equities and Investment Advisory Services.

During the period from May 1992 to August 1994, Mr. Bhandari was the Chief Executive, Citicorp Securities & InvestmentsLtd., a group entity of Citibank N.A., India.

Mr. Bhandari has a Masters Degree in Management from the Indian Institute of Management, Ahmedabad. He has a Bachelor’sDegree in Economics from St. Stephens’ College, University of Delhi.

ii) Powers, Duties and Responsibilities of the AMC

The duties and responsibilities of the AMC shall be governed by the Regulations and the Investment Management Agreement.The AMC, in the course of managing the affairs of the Mutual Fund, has the power, inter-alia:

(a) to invest in, acquire, hold, manage or dispose of all or any securities and to deal with, engage in and carry out all otherfunctions and to transact all business pertaining to the Fund;

(b) to keep the moneys belonging to the Trust with scheduled banks and Custodians as it may deem fit;

(c) to issue, sell and purchase Units under any Scheme;

(d) to repurchase the Units that are offered for repurchase and hold, reissue or cancel them;

(e) to formulate strategies, lay down policies for deployment of funds under various Schemes and set limits collectively orseparately for privately placed debentures, unquoted debt instruments, securitised debts and other forms of variablesecurities which are to form part of the investments of the Trust Funds;

(f) to arrange for investments, deposits or other deployment as well as disinvestment or refund out of the Trust Funds as perthe set strategies and policies;

(g) to make and give receipts, releases and other discharges for moneys payable to the Trust and for the claims and demandsof the Trust;

(h) to get the Units under any scheme listed on any one or more stock exchanges in India or abroad;

(i) to open one or more bank accounts for the purposes of the Fund, to deposit and withdraw money and fully operate thesame;

(j) to pay for all costs, charges and expenses, incidental to the administration of the Trust and the management andmaintenance of the Trust property, Custodian and/or any other entities entitled for the benefit of the Fund, audit fee,management fee and other fees;

(k) to furnish compliance reports to the Trustees as prescribed by SEBI.

(l) to provide or cause to provide information to SEBI and the Unitholders as may be specified by SEBI and

(m) to generally do all acts, deeds, matters and things which are necessary for any object, purpose or in relation to thePrudential ICICI Mutual Fund in any manner or in relation to any scheme of the Prudential ICICI Mutual Fund.


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The Asset Management Company shall maintain high standards of integrity and fairness in all their dealings and in theconduct of their business.

The Asset Management Company shall render at all times high standards of service, exercise due diligence, ensure proper careand exercise independent professional judgement.

The independent directors of the Asset Management Company shall pay specific attention to the following as may beapplicable, namely :

i. The Investment Management Agreement and the compensation paid under the agreement.

ii. Service contracts with affiliates – whether the company has charged higher fees than outside contractors for the sameservices.

iii. Securities transactions involving affiliates to the extent such transaction are permitted.

iv. Code of ethics must be designed to prevent fraudulent, deceptive or manipulative practices by insiders in connection withpersonal securities transactions.

v. The reasonableness of fees paid to sponsors, asset management company and any others for services provided.

vi. Principal underwriting contracts and renewals

vii. Any service contracts with the associates of the company.

In terms of the Investment Management Agreement and the Regulations, the AMC is entitled to an investment managementfee at 1.25% per annum of the average net assets for a corpus up to Rs.100 crores and at 1.00% per annum for the corpusamount in excess of Rs.100 crores. Further, as per the Regulations, for the schemes launched on no load basis, the AssetManagement Company is entitled to collect an additional management fees not exceeding 1% of the average net assetsoutstanding in each financial year.

iii) Key Employees of the AMC and relevant experience

Name of the Employee Age Designation Educational Total No. of Years Assignments Held (Years) Qualifications of Experience/Type During the Last 10 Yrs

& Nature of Experience

Mr. Shailendra Bhandari 44 Managing Director Post Graduate Over 22 years of Managing Director Prudential ICICIDiploma in experience in the areas AMC – from December 2000 tillManagement, of Treasury, Risk date.Indian Institute of Management, Operations, December 1999 to November 2000Management, Technology, and Business IT Consultancy in the field of FinanceAhmedabad, Development & Banking at Auckland,Bachelor of Arts- New Zealand.Economics, September 1994 - Nov. 1999-St. Stephen’s Treasurer & Executive Director -College, Head Of Capital Markets of HDFCUniversity of Bank Ltd., Mumbai, IndiaDelhi, May 1992 - Aug 1994: Chief

Executive of Citicorp Securities &Investments Ltd. in Mumbai

Mr. Pankaj Razdan 34 Deputy CEO BSc. (Electronics) Over 9 years of experience Vice President / Senior ViceB. Tech (Electronics in sales and distribution. President & Head - Sales &Engineering) Distribution - Prudential ICICI AMC

- 2000 onwards.Vice President - West & North ZonePrudential ICICI AMC - 1999 –2000.Head -Distribution -Karvy SecuritiesLimited - 1997 – 1998.Marketing Manager - HMGFinancial Services Limited - 1992 –1993.Graduate Engineer Trainee / DesignEngineer – Nelco Ltd. 1992.

Mr. Dileep Madgavkar 39 years Chief Investment Officer Associate of Over 14 years of experience Chief Investment Officer –Institute of in treasury and fund Prudential ICICI AMC - 1998 toChartered management. date.Accountants of Financial Analyst & Consultant -India, B.Com (Hons.) 1993 to 1998.

Manager Equities & PMS – ANZGrindlays Bank - 1989 – 1993.


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Mr. Vasant Sanzgiri 42 Senior Vice President & BSc ( Life Sciences), Over 15 years Vice President / Senior ViceHead Human Resources MMS (Personnel experience in area of President & Head Human

Management) Human Resources Resources Prudential ICICI AMC -Management 2000 to date.

General Manager - HumanResources - Owens Cornning IndiaLimited - 1998 – 2000.General Manager HumanResources – DCW Home Products- 1996 – 1998.Regional Human Resource &Quality Manager - Modi Xerox -1995 –1996.Manager, Human ResourcesCyanamid India - 1992 – 1995.Manager – Human Resources -Indian Hotels Limited - 1990 –1992.

Mr. Kalyan Prasath 36 Vice President – PGDSM(NIIT), B.Sc Over 15 years of work Vice President – InformationInformation Technology experience in areas of Technology - Prudential ICICI AMC

Information Technology June 2001 onwards.Birla Global – Assistant VicePresident from Feb’97 to April,2001.DGP Windsor India Ltd. – Managerfrom Sept ’94 to Jan’97.Universal Luggage Mfg. Co. Ltd. -Asst. Manager from Nov’90 toSept’94.NIIT/CCIT – Course Conductor fromMay ‘89 to Oct’90ECIL – System Developer from June’88 to April ‘89Associated Systems – SoftwareDeveloper from July’85 to April ’88.

Mr. Ranganath Athreya 38 Vice President – Finance Associate -_Institute Over 14 yrs of experience Vice President – Finance, Legal,Legal, Compliance and of Company in Compliance and Vice President – Finance, Legal,Company Secretary Secretaries of India. Company Secretarial Secretary, Prudential ICICI AMC Jan

Bachelors Degree functions 14, 02 onwards.(General Laws), Head Corporate CommunicationPGDCP and Company Secretary - IDBI Bank

June 1997 to 12th Jan 2002Chief Manager Merchant Bankingand Company Secretary -Karnataka Bank Ltd. from 1992-97Company Secretary Lakshmi MotorCredit (Now TVS Finance) 1989-92

Mr. Mrugank Paranjape 36 Vice President PGDM from Over 13 yrs of experience May 2002 - to-date: Vice PresidentOperations and Project IIM, Ahmedabad in Operatios and projects - Prudential ICICI AMC Limited

B. Tech. (Electrical) April 2001 - May 2002from IIT, Powai Chief Technology Officer - Reliance

Logistics Pvt. LimitedDec 1999 - March 2001Director - Infoline.com Limited &MD - India Infoline Securities LimitedJuly 1997 - Nov 1999Regional Business Manager -Deutsche Bank A.G, CustodyServicesJuly 1996 to June 1997Director - WI Carr Securities Pvt.LimitedNov 1995 to July 1996Director - ING Barings Securities(India) Pvt. LimitedNov 1994 - Oct 1995Vice President Operations, IIT InvestTrust LimitedMay 1990 - Oct 1994Citibank N.A Global ConsumerBusiness Manager


23



Mr. R. Murali Krishnan 42 Fund Manager ACS, CAIIB, Over 10 years of Fund Manager – Prudential ICICIPGDPM & IR, experience in Investment AMC - 1998 to date.B.Com. Management Sr. Research Analyst ICICI AMC

1995 – 1998.Research Analyst ICICI AMC 1993- 1995.Research Analyst – CanbankMutual Fund 1991 –1993.

Mr. Sanjay Mehrotra 37 Associate Vice MMS, Marketing, Over 13 years of Associate Vice President –President - Investments B.Com experience in Investment Investments - Prudential ICICI AMC

Management - 1999 to date.Manager – Investments -PrudentialICICI AMC - 1999.Dealer - Prudential ICICI AMC -1998 – 1999.Assistant Manager - ICICI AMC -1993 – 1998.Manager Sound Craft Marketing -1992 – 1993.Dealer – Treasury Tata FinanceLimited - 1992.Executive – Growmore Research &Assets - 1990 – 1992.

Mr. N. Krishna Kumar 33 Senior Fund Manager C.A., ICWA. Over 8 years of work Sr. Fund Manager - Prudential ICICIexperience AMC - 1999 to date.

Vice President – Equity Sales -Dresdner Klienwort Benson India -1997 – 1999.Research Analyst – UTI SecuritiesExchange Limited - 1995 – 1997.Executive Infar India Limited - 1993– 1995.

Mr. Mihir Vora 33 Fund Manager Post Graduate Over 7 years experience Sr. Fund Manager – PrudentialDiploma in in Investment ICICI AMC - 2000 to dateManagement Management and Product und Manager -SBI Funds(IIM Lucknow), Development Management Limited - 1998 –B.E. (Mechanical) 2000.

Chief Dealer, Dealer (SecondaryMarket Equity) - SBI FundsManagement Limited - 1997 –1998.Portfolio Manager - SBI FundsManagement Limited - 1995 –1997.Deputy Manager (ProductDevelopment) - SBI FundsManagement Limited - 1994 –1995.Management Trainee Gujarat StateFertilisers Company Limited - 1991– 1992.

Mr. Venugopal K. 30 Fund Manager PGDBA – ICFAI Over 4 years experience Fund Manager - Prudential ICICIBusiness School, in Investment Management AMC - 2000 to date.MA (Economics), Dealer - Pennar InvestmentsB.Com. Limited - 1997 – 2000.

Mr. Vivekanand 35 Manager – Credit Ph.D. (University Over 6 years experience Manager – Credit AnalystRamakrishnan Analyst of Southern in Credit Analysis. Prudential ICICI AMC - 2001 to

California) date.MS (University of Manager – Rating (BusinessSouthern California), Development & Marketing) Crisil -B. Tech. (IIT Madras). 1995 – 2001

Marketing Executive -Vikram Ispat- 1994 – 1995.


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Mr. Pankaj Kaji 50 Senior Fund Manager B.Com 30 yrs Fund Manager- Prudential ICICI AMC- 2002 till date.Deutsche Bank, Mumbai (Vice-President-Money Market) 1994-2002, ANZ Grindlays Bank (FundsManager)-1986-1994

Mr. Chaitanya Pande 31 Fund Manager PGDM from IMI, 7 yrs 5 Months Sept 16th 2002 till date – FundNew Delhi, Manager – Fund Manager – Prudential ICICI AMCBSc from St. Management LimitedStephens College, Jan 2000 to Sep 2002New Delhi Manager – Fund Management

JF Asset Management (India) Pvt.LimitedMay 1995 to Jan 2000Investment AnalystJF Asset Management (India) Pvt.Limited

Mr. Chandreesh Nigam 35 Senior Fund Manager B TECH, PGDM, 12 years Prudential ICICI asset ManagementAISSCE Fund Management From July 2003 till date

Senior Fund ManagerZurich Asset managementApril 1993 – June 2003Senior Fund Manager/ fundManagerSBI capital Markets LimitedMay1991 – April 1993

Dy. Manager

As indicated above, at present a team comprising of nine Fund Managers and one Research Analyst are involved inequity research. The past experience of these employees is indicated above.

All the above key personnel are based at the Corporate Office of AMC.

iv) Fund Manager :

The investments under the Scheme will be managed by the Chief Investment Officer, Mr. Dileep Madgavkar. His qualificationsand experience are as under:

Scheme Name Fund Manager Qualification Experience

Prudential ICICI Power Mr. Dileep Madgavkar Associate of Institute of Over 14 years ofChartered Accountants experience inB.Com (Hons.) (Cal. Univ.) treasury and fund

management.

As indicated above, at present a team comprising of nine Fund Managers and one Research Analyst are involved inequity research. The past experience of these employees is indicated above. The past experience of these employeesis indicated above.

All the above key personnel are based at the Corporate Office of AMC.

v) Compliance OfficerThe Compliance Officer for the Fund is:Mr. Ranganath AthreyaVice President- Finance, Compliance and Company SecretaryPrudential ICICI Asset Management Company Ltd.Contractor Building, 3rd Floor41, R.Kamani Marg, Ballard Estate,Mumbai 400 038

vi) Investor Relations Officer

Investor Relations Officer for the Fund is Mr. Gautam Guha and he may be contacted at the corporate office of the AMC atMumbai.

D) AUDITORS

N. M. Raiji & Co., Chartered Accountants, Mumbai have expressed their willingness to act as Auditors for the Scheme offeredunder this Offer Document and have been appointed as Auditors by the Trustee.

E) REGISTRAR

Computer Age Management Services Private Limited, A & B Lakshmi Bhavan, 609 Anna Salai, Chennai – 600006 (CAMS) havebeen appointed as Registrar for the Scheme. The Registrar is registered with SEBI under registration No: INR000002813. As


25

Registrar to the Scheme, CAMS will handle communications with investors, perform data entry services and dispatch AccountStatements. The AMC and the Trustee have satisfied themselves that the Registrar can provide the services required and haveadequate facilities and the system capabilities.

F) CUSTODIAN

HDFC Bank Limited, Mumbai has been appointed as Custodian for the Scheme mentioned in the Offer Document. TheCustodian has been registered with SEBI and has been awarded registration No.IN/CUS/001 dated February 2, 1998. TheTrustee has entered into a Custodian Agreement with the Custodian and the salient features of the said Agreement are asunder:

(a) Provide post-trading and custodial services to the Mutual Fund.

(b) Ensure benefits due on the holdings are received.

(c) Provide detailed management information and other reports as required by the AMC.

(d) Maintain confidentiality of the transactions.

(e) Be responsible for the loss or damage to the assets belonging to the Scheme due to negligence on its part or on the partof its approved agents and

(f) Segregate assets of each Scheme.

Further, the Custodian shall not assign, transfer, hypothecate, pledge, lend, use or otherwise dispose any assets or property,except pursuant to instruction from the Trustee/AMC or under the express provisions of the Custodian Agreement.

The Custodian shall also not deal, on its own account, in securities purchased or sold by the Mutual Fund without making anadequate disclosure to SEBI and the Trustee/AMC.

The Custodian will be entitled to remuneration for its services in accordance with the terms of the Custodian Agreement.


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SECTION II

INVESTMENT OBJECTIVES & POLICIESFUNDAMENTAL ATTRIBUTES OF THE SCHEMEa) Type of the Scheme

An open-ended growth scheme seeking to generate capital appreciation through investments primarily in equity andequity related securities.

b) Investment Objectives

The primary objective of the Scheme is to generate capital appreciation through investments in equity and equity relatedsecurities in core sectors and associated feeder industries. However, there can be no assurance that the investmentobjectives of the Scheme will be realized.

c) Investment Pattern

The investment objective of the Scheme, inter-alia, envisages investment of the corpus under the Scheme in equity andequity related investments in companies belonging to the core sector and associated feeder industries. Whereas the coresectors, as envisaged under the Scheme, broadly comprise energy, communication, transportation, construction andengineering, tourism, financial and other services, software and IT related industries, consumer and healthcare, commodities,manufacturing; the feeder industries includes oil and gas, electricity, power equipment and utilities, telecommunicationand media services, telecom equipment, construction equipment, cables, hotels, automobiles and ancillaries, steel,cement, paper, sugar, petrochem, organic and inorganic chemicals, consumer (durables, non durables) and relatedindustries, pharmaceuticals and related industries, healthcare services, textiles and related industries, engineering andrelated industries. A small portion of the corpus of the Scheme will be invested in debt and money market securities.

The securities mentioned above could be listed, unlisted, privately placed, secured, unsecured, rated or un rated and ofany maturity. The securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, privateplacement, rights offers or negotiated deals.

The Scheme may also enter into repurchase and reverse repurchase obligations in debt/money market securities held byit as per the guidelines and regulations applicable to such transactions. Further, the Scheme may participate in securitieslending as permitted under the Regulations.

For the purposes of this Offer Document equity and equity related securities include debt securities convertible intoshares and rights or warrants to purchase shares. It is the intention of this Scheme to trade in derivatives as permitted bythe Regulations.

The portion of the Scheme’s portfolio invested in each type of security listed above may vary in accordance with economicconditions, interest rates, liquidity and other relevant considerations, including the risks associated with each investment.The Scheme will, in order to reduce the risks associated with any one security, utilize a variety of investments.

Under normal circumstances, the asset allocation under the Scheme will be as follows:

Type of Security Approx. Allocation Risk Profile(% of Corpus)

Equity and Equity related securities including non Up to 95% Moderate to highconvertible portion of convertible debentures.

Debt and Money market securities At least 5% Low to medium

Note: If the Scheme decides to invest in securitised debt, it is the intention of the Investment Manager that suchinvestments will not, normally, exceed 5% of the corpus of the Scheme.

Investors may note that securities, which provide higher returns typically, display higher volatility. Accordingly, the investmentportfolio of the Scheme would reflect moderate to high volatility in its equity and equity related investments and low tomoderate volatility in its debt and money market investments.

d) Change in Investment Pattern

Subject to the Regulations, the asset allocation pattern indicated above may change from time to time, keeping in viewmarket conditions, market opportunities, applicable regulations and political and economic factors. It must be clearlyunderstood that the percentages stated above are only indicative and not absolute and that they can vary substantiallydepending upon the perception of the Investment Manager, the intention being at all times to seek to protect theinterests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations.

Provided further and subject to the above, before effecting any change in the asset allocation affecting the investmentprofile of the Scheme, the trustees shall ensure that no change in the fundamental attributes of any scheme or the trustor fees and expenses payable or any other change which would modify the scheme and affects the interest of unitholders,shall be carried out unless, -


27

i. a written communication about the proposed change is sent to each unitholder and an advertisement is given in oneEnglish daily newspaper having nationwide circulation as well as in a newspaper published in the language of theregion where the Head Office of the mutual fund is situated; and

ii. the unitholders are given an option to exit at the prevailing Net Asset Value without any exit load.”

e) Terms of the Scheme

1) Liquidity:

On an on-going basis, an investor can purchase and redeem Units on every Business Day at NAV based prices, subjectto the applicable load structure.

a) Redemption of Units

The Units can be redeemed (i.e. sold back to the Fund) on every Business Day at the Redemption Price (hereinafterdefined). The redemption request can be made for any amount of Rs.500 or more. Redemption can also be madefor the total number of units standing to the credit of investor at the time of closure of account, even thoughsuch redemption is for less than Rs.500. However, the minimum amount indicated above will not be applicableto the Unitholders of ICICI Power who continue to be the Unitholders under the Scheme.

b) Redemption Price

The redemption will be at Applicable NAV based prices. Please refer to “Redemption Price” on page 47.

c) Payment of Proceeds

All redemption requests received prior to the cut-off time (please refer to “Payment of Proceeds” on Page 47) onany Business Day at the Customer Service Centres will be considered accepted on that Business Day, subject tothe redemption requests being complete in all respects, and will be priced on the basis of Redemption Price forthat day. Requests received after the cut-off time will be treated as though they were accepted on the nextBusiness Day. Please refer to (Page 48) “Right to Limit Redemptions” and (page 48) “Suspension of Sale andRedemption of Units”.

As per the Regulations, the Fund shall despatch redemption proceeds within 10 Business Days (working days) ofreceiving the redemption request. However, under normal circumstances, the Fund will endeavour to despatchthe redemption proceeds within 3 Business Days of acceptance of the redemption request. Investors shouldnote that it is the intention of the Fund to dispatch the redemption proceeds within 3 Business (working) Daysand the Fund / AMC do not guarantee the same.

� As per the guidelines issued by SEBI, in the event of failure to dispatch the redemption or repurchase proceedswith in 10 working days, the AMC is liable to pay interest to the Unit holders @ 15% p.a. SEBI has further advisedthe mutual funds that in the event of payment of interest to the Unit holders, such Unit holders should beinformed about the rate and the amount of interest paid to them.

Listing

Being an open ended Scheme, the Units of the Scheme are not listed on any stock exchange

2. Fees and Expenses

a. Initial issue expenses

As the scheme is an existing Scheme converted into an open ended fund, there were no Initial Issue Expenses.

b. Recurring Expenses

The details of recurring expenses of the Scheme, on an annual basis, have been stated on Page 54. As per theRegulations, the maximum recurring expenses that can be charged to the Scheme shall be subject to a percentagelimit of weekly net assets as in the table below:

First Rs. 100 crore Next Rs. 300 crore Next Rs. 300 crore Over Rs. 700 crore

2.50% 2.25% 2.00% 1.75%

Subject to Regulations and this Offer Document, expenses over and above the prescribed limit shall be borne bythe Asset Management Company.

Load :

Entry Load:

i. For investments of less than Rs. 10 Lakhs : Entry load at 2.25% of applicable Net Asset Value (NAV).

ii. For investment of Rs.10 Lakhs and above but upto Rs. 3 crores: Entry load at 1.75% of applicable Net AssetValue (NAV)

iii. For investment of Rs. 3 crores and above: Entry load is Nil.


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Exit Load:

On an on-going basis, the Trustee, for the present does not intend to charge an exit load on redemption of Units.


Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decideto introduce a differential load structure on the Units subscribed/redeemed on any Business Day. Suchchanges will be applicable for prospective investments. The Trustee shall arrange to display a notice in theCustomer Service Centers of the AMC before the change of the then prevalent load structure. The addendumdetailing the changes in load structure will be attached to offer documents and abridged offer documents.The addendum will also be circulated to all the distributors / brokers so that the same can be attached to allthe offer documents and abridged offer documents in stock. This addendum will also be sent along with thenewsletter to the unitholders immediately after the changes. Changes in the load structure may be stampedin the acknowledgement slip issued by the Fund after the changes in load structure. The load collected fromthe Unitholders will be credited to a separate account and will be offset against distribution and marketingexpenses. Surplus of load, if any, charged over planned marketing and distribution expenses to be defrayedwill be credited to the Scheme whenever felt appropriate by the AMC.

f) Changes in Fundamental Attributes

The trustees shall ensure that no change in the fundamental attributes of any scheme or the trust or fees and expensespayable or any other change which would modify the scheme and affects the interest of unitholders, shall be carried outunless, -

(i) a written communication about the proposed change is sent to each unitholder and an advertisement is given in oneEnglish daily newspaper having nationwide circulation as well as in a newspaper published in the language of theregion where the Head Office of the mutual fund is situated; and

(ii) the unitholders are given an option to exit at the prevailing Net Asset Value without any exit load.”

g) Investment Strategy

Equities :

For the equity portion of the corpus, the AMC intends to invest in stocks, which are bought, typically with a one-year timehorizon. Stock specific risk will be minimized by investing only in those companies that have been thoroughly analyzed bythe Fund Management team at the AMC. The AMC will also monitor and control maximum exposures to any one stock orone sector.

The Scheme may also use various derivatives and hedging products from time to time, as would be available andpermitted by SEBI, in an attempt to protect the value of the portfolio and enhance Unitholders’ interest.

The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds provided itis in conformity to the investment objectives of the Scheme and in terms of the prevailing Regulations. As per theRegulations, no investment management fees will be charged for such investments.

For the present, the Scheme does not intend to enter into underwriting obligations. However, if the Scheme does enterinto an underwriting agreement, it would do so after complying with the Regulations and with the prior approval of theBoard of the AMC/Trustee.

h) Portfolio Turnover

Portfolio turnover is defined as the aggregate of purchases and sales as a percentage of the of the corpus of the Schemeduring a specified period of time.

The AMC’s portfolio management style is conducive to a low portfolio turnover rate. However, the AMC will take advantageof the opportunities that present themselves from time to time because of the inefficiencies in the securities markets. Ahigh portfolio turnover rate may represent arbitrage opportunities that exist for scrips held in the portfolio. The AMC willendeavour to balance the increased cost on account of higher portfolio turnover with the benefits derived therefrom.

i) PROCEDURE FOLLOWED FOR INVESTMENT DECISIONS:

1. The Fund Manager of each scheme is responsible for making buy/sell decisions in respect of the securities in therespective scheme portfolios, subject to final approval by the Chief Investment Officer. The investment decisions aremade and approved on daily basis keeping in view the market conditions and all relevant aspects.

2. The AMC has an Internal Investment Committee comprising of the Managing Director, the Chief Investment Officer,Fund Managers and the Research Analyst who meet at periodic intervals. The Investment Committee, at its meetings,reviews the performance of the schemes and general market outlook and formulates broad investment strategy.

The Chief Executive Officer who chairs the Investment Committee Meetings guides the deliberations at InvestmentCommittee. He, on an ongoing basis, reviews the portfolios of the schemes and gives directions to the ChiefInvestment Officer, where considered necessary. It is the ultimate responsibility of the Chief Investment Officer toensure that the investments are made as per the internal/Regulatory guidelines, Scheme investment objectives and in


29

the best interest of the unitholders of the respective schemes.

The AMC has a team comprising of nine Fund Managers and one Research Analyst. All of these are involved inpreparation of research reports.

3. The Managing Director makes a presentation to the Board of AMC at each of its meetings indicating the performanceof the schemes. The performance of the schemes is reviewed by the Board with reference to the appropriate benchmarksas also the performance of the schemes of the competition.

For Prudential ICICI Power, the performance of the scheme will be benchmarked with Nifty. The performance of theScheme is reviewed by the Board with the benchmark as also the performance of the schemes of the competitions

The Managing Director brings to the notice of the Board specific factors, if any, which are impacting the performanceof any individual scheme. The Board on consideration of all relevant factors may, if necessary, give directions to AMC.Similarly, the performance of the schemes is submitted to the Trustees. The Managing Director explains to theTrustees the details on Schemes’ performance vis-à-vis the benchmark returns.

4. Subsequent to the issue of Circular No.MFD/CIR/9/120/2000 dated November 24, 2000, the AMC constituted aninternal committee to approve the investment in un-rated debt securities. All such investments, as and when aremade, will be placed before the Board of Directors of AMC for its review.

5. The AMC has been recording investment decisions since the receipt of instructions from SEBI, in terms of SEBI’scircular no. MFD/CIR/ 6 / 73 /2000 dated July 27, 2000.

6. The Chief Executive Officer of the AMC shall ensure that the mutual fund complies with all the provisions of SEBI(Mutual Fund) Regulations, 1996, as amended from time to time, including all guidelines, circulars issued in relationthereto from time to time and that the investments made by the fund managers are in the interest of the unit holdersand shall also be responsible for the overall risk management function of the mutual fund.

7. The Fund managers shall ensure that the funds of the Scheme/ schemes are invested to achieve the investmentobjectives of the schemes and in the interest of the unit holders.

Scheme Specific Risk Factors

� The investments under the Scheme are predominantly in equity and equity related securities of select companies in coresector and feeder industries as outlined in the Section II under the investment objectives. Accordingly, the NAV of theScheme is linked to equity performance of such companies.

� Political uncertainty: Political uncertainty impacts infrastructure spending of both the government and the privatesector thereby impacting the demand for commodities.

� Downtrend in International Prices : With the continuous lowering of custom tariffs (as per the requirement of theWTO), the Indian Industry is now getting increasingly integrated with global markets. Any downturn in internationalprices of commodities will impact the domestic pricing environment and therefore the profitability of companies in thesesectors.

� Changes in Government policy in general and changes in tax benefits applicable to mutual funds may impact the returnsto investors in the Scheme.

� In case of investments in derivative instruments like index futures, the risk/ reward would be the same as investments inportfolio of shares representing an index. However, there may be a cost attached to buying an index future. Further, therecould be an element of settlement risk, which could be different from the risk in settling physical shares and there is a riskattached to the liquidity and the depth of the index futures market as it is relatively new market.

Risk Factors and Special Considerations

� Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that theobjectives of the Scheme will be achieved.

� As with any securities investment, the NAV of the Units issued under the Scheme can go up or down depending on thefactors and forces affecting the capital markets.

� Past performance of the Sponsors, AMC/Fund does not indicate the future performance of the Scheme of the Fund.

� Investment decisions made by the AMC may not always be profitable.

� The Sponsors are not responsible or liable for any loss resulting from the operation of the Scheme beyond the contributionof an amount of Rs 22.2 lacs collectively made by them towards setting up the Fund and such other accretions andadditions to the corpus set up by the Sponsors.

� Prudential ICICI Power is the name of the Scheme and does not in any manner indicate either the quality of the Schemeor its future prospects and returns.

� The NAVs of Prudential ICICI Power may be affected by changes in the general market conditions, factors and forcesaffecting capital markets in particular, level of interest rates, various market related factors and trading volumes, settlementperiods and transfer procedures.


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� The Scheme may invest up to 5% of its net assets in unlisted equity and equity-related securities that the AMC believesmay be listed within a period of two years. The Scheme’s investments in such unlisted equities may be realisable only uponlisting of these securities.

� In the event of receipt of inordinately large number of redemption requests or of a restructuring of the Scheme’sportfolios, there may be delays in the redemption of Units. Please see Page 48 for “Right to Limit Redemptions” in thisOffer Document.

� Investors in the Scheme are not being offered any guaranteed returns.

� As per the prevailing tax laws, in respect of ‘Open Ended Equity Oriented Scheme’, where more than 50% of the corpusof the Scheme is invested in equity shares, per provisions of Section 115R of the Act, no additional income tax is payableon the income distributed by the Schemes for the period upto March 31, 2004. In the event that investible funds of morethan 50% of the total proceeds of the scheme are not invested in equity shares of domestic companies, the Fund will beliable to pay tax on such distributed income by the Scheme as per the provisions of the Finance Act, 2003.

� From time to time and subject to the regulations, the sponsors, the mutual funds and investment Companies managedby them, their affiliates, their associate companies, subsidiaries of the sponsors and the AMC may invest in either directlyor indirectly in the scheme. The funds managed by these affiliates, associates and/ or the AMC may acquire a substantialportion of the Scheme. Accordingly, redemption of units held by such funds, affiliates/associates and sponsors may havean adverse impact on the units of the Scheme because the timing of such redemption may impact the ability of otherunitholders to redeem their units

The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds, provided itis in conformity to the investment objectives of the Scheme and in terms of the prevailing Regulations. As per theRegulations, no investment management fees will be charged for such investments.

� The Scheme may also invest in ADRs / GDRs as permitted by Reserve Bank of India and Securities and Exchange Board ofIndia. To the extent that some part of the assets of the Plans may be invested in securities denominated in foreigncurrencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by thechanges in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital also may behampered by changes in regulations concerning exchange controls or political circumstances as well as the application toit of other restrictions on investment.

� The Scheme may also use various derivatives and hedging products from time to time, as would be available andpermitted by SEBI, in an attempt to protect the value of the portfolio and enhance Unitholders’ interest. In case theScheme utilizes any derivatives under the Regulations, the Scheme may, in certain situations, be exposed to price risks.

� The Fund may use derivatives instruments like Stock Index Futures, Interest Rate Swaps, Forward Rate Agreements or otherderivative instruments for the purpose of hedging and portfolio balancing, as permitted under the Regulations andguidelines. Usage of derivatives will expose the Scheme to certain risks inherent to such derivatives.

Trading in Derivatives

SEBI vide its circular no. MFD/CIR/011/061/2000 dated February 1, 2000 has permitted all the mutual funds to participatein the derivatives trading subject to observance of guidelines issued by SEBI in this behalf. In terms of SEBI guidelines,trading in derivatives by the mutual funds should be restricted to hedging and portfolio balancing and the Fund has tocomply with the prescribed disclosure requirements.

The Board of Directors of Prudential ICICI Trust Limited (The Trustee) at its meeting held on May 30, 2000 approved theproposal for the AMC using the various portfolio hedging techniques and adopting the risk control mechanism underthe portfolios of the schemes of the Fund.

Accordingly, the Fund may use derivatives instruments like Stock Index Futures, Interest Rate Swaps, ForwardRate Agreements or such other derivative instruments as may be introduced from time to time for the purposeof hedging and portfolio balancing, as permitted under the Regulations and guidelines.

Exposure to Derivatives:

The respective schemes of Prudential ICICI Mutual Fund shall, under normal circumstances, not have exposure of morethan 25% of its net assets in the derivative instruments. The AMC in times of market volatility and other abnormal marketconditions increase such exposure in derivative instruments up to maximum of 50% of net assets under each scheme witha view to protecting the interests of the investors under the schemes.

The following information provides a basic idea as to the nature of the derivative instruments proposed to be used by theFund and the risks attached there with.

Advantages of Derivatives:

The volatility in Indian markets both in debt and equity has increased over last few months. Derivatives provide uniqueflexibility to the Scheme to hedge part of its portfolio. Some of the advantages of specific derivatives are as under :


31

Index Futures :

a) Investment in Stock Index Futures can give exposure to the index without directly buying the individual stocks.Appreciation in Index stocks can be effectively captured through investment in Stock Index Futures.

b) Subject to Regulations, the Fund can sell futures to hedge against market movements effectively without actuallyselling the stocks it holds.

Interest Rate Swaps and Forward rate Agreements:

Bond markets in India are not very liquid. Investors run the risk of illiquidity in such markets. Investing for short-termperiods for liquidity purposes has its own risks. Investors can benefit if the Fund remains in call market for theliquidity and at the same time take advantage of fixed rate by entering into a swap. It adds certainty to the returnswithout sacrificing liquidity.

The following are illustrations how derivatives work. :

Basic Structure of an Interest Rate Swap

In the above illustration,

Basic Details: Fixed to floating swap

Notional Amount: Rs. 5 Crores

Benchmark: NSE MIBOR

Deal Tenor: 3 months (say 91 days)

Documentation : International Securities Dealers Association(ISDA).

Let us assume the fixed rate decided was 10%

At the end of three months, the following exchange will take place:

Counter party 1 pays: compounded call rate for three months, say 9.90%

Counter party 2 pays fixed rate: 10%

In practice, however, the difference of the two amounts is settled. Counter party 2 will pay Rs 5 Crores *0.10%* 91/365= Rs. 12,465.75

Thus the trade off for the Fund will be the difference in call rate and the fixed rate payment and this can vary with the callrates in the market. Please note that the above example is given for illustration purposes only and the actual returns mayvary depending on the terms of swap and market conditions.

Basic Structure of a Stock Index Future

The Stock Index futures are instruments designed to give exposure to the equity market indices. The Stock Exchange,Mumbai and The National Stock Exchange have started trading in index futures of 1, 2 and 3-month maturities. Thepricing of an index future is the function of the underlying index and short-term interest rates.

Example:

Assumptions:

1 month BSE 30 Future

Spot Index: 4900

Future Price on day 1: 4920

Fund buys 10,000 futures

Date of settlement

Future price = Closing spot price = 4950

Profits for the Fund = (4950-4920)*10000 = Rs 300,000

Floating Interest Rate

Fixed Interest Rate

Counter party 1 Counter party 2�

�


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Please note that the above example is given for illustration purposes only.

The net impact for the Fund will be in terms of the difference between the closing price of the index and cost price(ignoring margins for the sake of simplicity). Thus, it is clear from the example that the profit or loss for the Fund will bethe difference of the closing price (which can be higher or lower than the purchase price) and the purchase price. The risksassociated with index futures are similar to the one with equity investments. Additional risks could be on account ofilliquidity and hence mispricing of the future at the time of purchase.

Risks attached with the use of derivatives:

As and when the schemes trade in the derivatives market there are risk factors and issues concerning the use of derivativesthat investors should understand. Derivative products are specialized instruments that require investment techniques andrisk analyses different from those associated with stocks and bonds. The use of a derivative requires an understanding notonly of the underlying instrument but of the derivative itself. Derivatives require the maintenance of adequate controls tomonitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the abilityto forecast price or interest rate movements correctly. There is the possibility that a loss may be sustained by the portfolioas a result of the failure of another party (usually referred to as the “counter party”) to comply with the terms of thederivatives contract. Other risks in using derivatives include the risk of mis pricing or improper valuation of derivatives andthe inability of derivatives to correlate perfectly with underlying assets, rates and indices.

Thus, derivatives are highly leveraged instruments. Even a small price movement in the underlying security could have alarge impact on their value. Also, the market for derivative instruments is nascent in India.

Valuation of Derivative Products :

a) The traded derivatives shall be valued at market price in conformity with the stipulations of sub clauses (i) to (v) ofclause 1 of the Eighth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, asamended from time to time.

b) The valuation of untraded derivatives shall be done in accordance with the valuation method for untraded investmentsprescribed in sub clauses (i) and (ii) of clause 2 of the Eighth Schedule to the Securities and Exchange Board of India(Mutual Funds) Regulations, 1996 as amended from time to time.

12) Subject to the Regulations and the applicable guidelines, the Scheme and the Plans thereunder may, if the Trusteepermits, engage in stock lending.

Advantages and Risks attached with investments in ADRs/GDRs:

It is AMCs belief that the investment in ADRs/GDRs/overseas securities offer new investment and portfolio diversificationopportunities into multi-market and multi-currency products. However, such investments also entail additional risks.Such investment opportunities may be pursued by the AMC provided they are considered appropriate in terms of theoverall investment objectives of the schemes. Since the Schemes would invest only partially in ADRs/GDRs/overseassecurities, there may not be readily available and widely accepted benchmarks to measure performance of the Schemes.To manage risks associated with foreign currency and interest rate exposure, the Fund may use derivatives for efficientportfolio management including hedging and in accordance with conditions as may be stipulated by SEBI/RBI from timeto time.

To the extent that the assets of the Schemes will be invested in securities denominated in foreign currencies, the IndianRupee equivalent of the net assets, distributions and income may be adversely affected by the changes in the value ofcertain foreign currencies relative to the Indian Rupee. The repatriation of capital also may be hampered by changes inregulations concerning exchange controls or political circumstances as well as the application to it of the other restrictionson investment.

Offshore investments will be made subject to any/all approvals, conditions thereof as may be stipulated by SEBI/RBI andprovided such investments do not result in expenses to the Fund in excess of the ceiling on expenses prescribed by andconsistent with costs and expenses attendant to international investing. The Fund may, where necessary, appoint otherintermediaries of repute as advisors, custodian/sub-custodians etc. for managing and administering such investments.The appointment of such intermediareis shall be in accordance with the applicable requirements of SEBI and within thepermissible ceilings of expenses. The fees and expenses would illustratively include, besides the investment managementfees, custody fees and costs, fees of appointed advisors and sub-managers, transaction costs, and overseas regulatorycosts.

Risks associated with stock lending : The risks in lending portfolio securities, as with other extensions of credit, consistof the failure of another party, in this case the Approved Intermediary, to comply with the terms of agreement entered intobetween the lender of securities i.e. the Scheme and the approved intermediary. Such failure to comply can result in thepossible loss of rights in the collateral put up by the borrower of the securities, the inability of the Approved Intermediaryto return the securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender fromthe securities deposited with the Approved Intermediary.


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j) Investment Restrictions for the Scheme

Pursuant to the Regulations and amendments thereto, the following investment restrictions are presently applicable tothe Scheme:

1) A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer whichare rated not below investment grade by a credit rating agency authorised to carry out such activity under the SEBIAct. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Boardof Trustees and the Board of asset management company. Provided that, such limit shall not be applicable forinvestments in government securities and money market instruments. Provided further that investment within suchlimit can be made in mortgage backed securitised debt which are rated not below investment grade by a credit ratingagency registered with SEBI.

2) A mutual fund scheme shall not invest more than 10% of its NAV in un rated debt instruments issued by a singleissuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All suchinvestments shall be made by an internal committee constituted by AMC to approve the investment in un-rated debtsecurities in terms of the parameters approved by the Board of Trustees and the Board of asset managementcompany Otherwise such investments shall be made with the prior approval of the Board of Trustees and the Boardof asset management company or the Committee of Directors constituted in this behalf.

3) Debentures, irrespective of any residual maturity period (above or below one year), shall attract the investmentrestrictions as applicable for debt instruments as specified under Clause 2 & 3 above.

4) The Fund under all its schemes shall not own more than 10% of any company’s paid up capital carrying voting rights.

5) Transfer of investments from one Scheme to another Scheme in the same Mutual Fund is permitted provided:

a) Such transfers are done at the prevailing market price for quoted instruments on spot basis (spot basis shall havethe same meaning as specified by a Stock Exchange for spot transactions); transfer of unquoted securities will bemade as per the policies laid down by the Trustees from time to time; and

b) The securities so transferred shall be in conformity with the investment objective of the Scheme to which suchtransfer has been made.

6) The Scheme may invest in other schemes under the same AMC or any other Mutual Fund without charging any fees,provided the aggregate inter-scheme investment made by all the schemes under the same management or inschemes under management of any other asset management company shall not exceed 5% of the Net Asset Value ofthe Fund.

7) The Fund shall get the securities purchased transferred in the name of the Fund on account of the concerned Scheme,wherever investments are intended to be of a long-term nature.

8) The Fund may buy and sell securities on the basis of deliveries and will not make any short sales or engage in carryforward transaction or badla finance, except as and when permitted by the RBI in this regard (for example “whenissued market” transactions). Provided that mutual funds shall enter into derivatives transactions in a recognisedstock exchange for the purpose of hedging and portfolio balancing, in accordance with the guidelines issued bySEBI.

9) All the Scheme’s investments will be in transferable securities (whether in capital markets or money markets) or bankdeposits or in money at call as in privately placed debentures as securitised debt.

10) No loans for any purpose can be advanced by the Scheme.

11) The Fund may lend securities in accordance with stock lending scheme of SEBI.

12) The mutual fund scheme shall not make any investment in;

a) any unlisted security of an associate or group company of the sponsor; or

b) any security issued by way of private placement by an associate or group company of the Sponsor; or

c) the listed securities of group companies of the Sponsor which is in excess of 25% of the net assets

13) No mutual fund scheme shall invest more than 10% of its NAV in equity shares of any one issuer (limit not applicablefor index or sector specific schemes).

14) No open-ended mutual fund scheme shall invest more than 5% of its NAV in unlisted equity shares or equity relatedinstruments.

15) The Fund shall not borrow except to meet temporary liquidity needs of the Fund for the purpose of repurchaseredemption of units or payment of interest and dividend to the Unitholders, provided that the Fund shall not borrowmore than 20% of the net assets of the individual Scheme and the duration of the borrowing shall not exceed aperiod of 6 months.


34

16) Pending deployment of funds of a Scheme in securities in terms of investment objectives of the Scheme, the AMC caninvest the funds of the Scheme in short term deposits of scheduled commercial banks or in call deposits.

17) The Scheme may also use various hedging and derivative products from time to time, as are available and permittedby SEBI, in an attempt to protect and enhance the interests of the Unitholders at all times.

18) The Mutual Fund having an aggregate of securities which are worth Rs.10 crores or more, as on the latest balancesheet date, shall subject to such instructions as may be issued from time to time by the Board, settle their transactionsentered on or after January 15, 1998 only through dematerialised securities. Further, all transactions in governmentsecurities shall be in dematerialised form.

The Trustee may alter the above restrictions from time to time to the extent that changes in the Regulations may allowor as deemed fit in the general interest of the Unitholders.

k) Underwriting by the Fund

Subject to the Regulations, the Scheme may enter into underwriting agreements after the Fund obtains a certificate ofregistration in terms of the Securities and Exchange Board of India (Underwriters) Rules and the Securities and Exchange Boardof India (Underwriters) Regulations, 1993, authorizing it to carry on activities as underwriters.

The capital adequacy norms for the purpose of underwriting shall be the net assets of the Scheme and the underwritingobligation of the Scheme shall not at any time exceed the total net asset value of the Scheme.

j) Computation of Net Asset Value

The NAV of the Units of the Scheme will be computed by dividing the net assets of the Scheme by the number of Unitsoutstanding on the valuation date. The Fund shall value its investments according to the valuation norms, as specified inSchedule VIII of the Regulations, or such norms as may be prescribed by SEBI from time to time. The broad valuation norms aredetailed below:

1. Traded Securities:

(i) The securities shall be valued at the last quoted closing price on the stock exchange.

(ii) When the securities are traded on more than one recognised stock exchange, the securities shall be valued at the lastquoted closing price on the stock exchange where the security is principally traded.

(iii) When on a particular valuation day, a security has not been traded on the Principal stock exchange, the value at whichit is traded on another stock exchange may be used.

(iv) When a security (other than debt securities) is not traded on any stock exchange on a particular valuation day, thevalue at which it was traded on the selected stock exchange, as the case may be, on the earliest previous day may beused provided such date is not more than thirty days prior to valuation date.

When a debt security (other than Government Securities) is not traded on any stock exchange on any particular valuationday, the value at which it was traded on the principal stock exchange or any other stock exchange, as the case may be, onthe earliest previous day may be used provided such date is not more than fifteen days prior to valuation date. When adebt security (other than Government Securities) is purchased by way of private placement, the value at which it wasbought may be used for a period of fifteen days beginning from the date of purchase.

2. Thinly Traded Securities:

(i) Thinly Traded Equity/Equity Related Securities:

“When trading in an equity/equity related security (such as convertible debentures, equity warrants, etc.) in a monthis both less than Rs. 5 lacs and the total volume is less than 50,000 shares, it shall be considered as a thinly tradedsecurity and valued accordingly”.

For example, if the volume of trade is 100,000 and value is Rs. 400,000, the share does not qualify as thinly traded.Also if the volume traded is 40,000, but the value of trades is Rs. 600,000, the share does not qualify as thinly traded.

In order to determine whether a security is thinly traded or not, the volumes traded in all recognised stock exchangesin India may be taken into account.

(ii) Thinly Traded Debt Securities:

A debt security (other than Government Securities) shall be considered as a thinly traded security if on the valuationdate, there are no individual trades in that security in marketable lots (currently Rs 5 crore) on the principal stockexchange or any other stock exchange.

A thinly traded debt security as defined above would be valued as per the norms set for non-traded debt security.

3. Non Traded Securities:

When a security (other than Government Securities) is not traded on any stock exchange for a period of thirty days priorto the valuation date, the scrip must be treated as a ‘non traded’ security.


35

VALUATION OF NON-TRADED / THINLY TRADED SECURITIES

Non traded/ thinly traded securities shall be valued “in good faith” by the asset management company on the basis of thevaluation principles laid down below:

(i) Non-traded / thinly traded equity securities:

(a) Based on the latest available Balance Sheet, net worth shall be calculated as follows:

(b) Net Worth per share = [share capital + reserves (excluding revaluation reserves) – Misc. expenditure and DebitBalance in P&L A/c] Divided by number of Paid up Shares.

(c) Average capitalisation rate (P/E ratio) for the industry based upon either BSE or NSE data (which should befollowed consistently and changes, if any noted with proper justification thereof) shall be taken and discountedby 75% i.e. only 25% of the Industry average P/E shall be taken as capitalisation rate (P/E ratio). Earnings pershare of the latest audited annual accounts will be considered for this purpose.

(d) The value as per the net worth value per share and the capital earning value calculated as above shall be averagedand further discounted by 10% for ill-liquidity so as to arrive at the fair value per share.

(e) In case the EPS is negative, EPS value for that year shall be taken as zero for arriving at capitalised earning.

(f) In case where the latest balance sheet of the company is not available within nine months from the close of theyear, unless the accounting year is changed, the shares of such companies shall be valued at zero.

(g) In case an individual security accounts for more than 5% of the total assets of the scheme, an independentvaluer shall be appointed for the valuation of the said security.

To determine if a security accounts for more than 5% of the total assets of the scheme, it should be valued by theprocedure above and the proportion which it bears to the total net assets of the scheme to which it belongs wouldbe compared on the date of valuation.

(ii) (a) Non Traded /Thinly Traded Debt Securities of Upto 182 Days to Maturity:

As the money market securities are valued on the basis of amortization (cost plus accrued interest till thebeginning of the day plus the difference between the redemption value and the cost spread uniformly over theremaining maturity period of the instruments) a similar process should be adopted for non-traded debt securitieswith residual maturity of upto 182 days, in the absence of any other standard benchmarks in the market. Debtsecurities purchased with residual maturity of upto 182 days are to be valued at cost (including accrued interesttill the beginning of the day) plus the difference between the redemption value (inclusive of interest) and costspread uniformly over the remaining maturity period of the instrument. In case of a debt security with maturitygreater than 182 days at the time of purchase, the last valuation price plus accrued interest should be usedinstead of purchase cost. All other non traded Non Government debt instruments shall be valued using themethod suggested in (ii)(b).

ii) (b) Non Traded/ Thinly Traded Debt Securities of Over 182 Days to Maturity.

For the purpose of valuation, all Non Traded Debt Securities would be classified into “Investment grade” and“Non Investment grade” securities based on their credit ratings. The non-investment grade securities wouldfurther be classified as “Performing” and “Non Performing” assets

� All Non Government investment grade debt securities, classified as not traded, shall be valued on yield tomaturity basis as described in the applicable SEBI circular.

� All Non Government non investment grade performing debt securities would be valued at a discount of25% to the face value

� All Non Government non-investment grade non-performing debt securities would be valued based on theprovisioning norms.

Valuation of Unlisted Equity Shares:

Unlisted equity shares of a company shall be valued “in good faith” on the basis of the valuation principles laid downbelow:

a. Based on the latest available audited balance sheet, net worth shall be calculated as lower of (i) and (ii) below:

i. Net worth per share = [share capital plus free reserves (excluding revaluation reserves) minus Miscellaneousexpenditure not written off or deferred revenue expenditure, intangible assets and accumulated losses]divided by Number of Paid up Shares.

ii. After taking into account the outstanding warrants and options, Net worth per share shall again be calculatedand shall be = [share capital plus consideration on exercise of Option/Warrants received/receivable by theCompany plus free reserves(excluding revaluation reserves) minus Miscellaneous expenditure not written


36

off or deferred revenue expenditure, intangible assets and accumulated losses] divided by {Number of Paidup Shares plus Number of Shares that would be obtained on conversion/exercise of Outstanding Warrantsand Options}

The lower of (i) and (ii) above shall be used for calculation of net worth per share and for further calculation in(c) below.

b. Average capitalisation rate (P/E ratio) for the industry based upon either BSE or NSE data (which should befollowed consistently and changes, if any, noted with proper justification thereof) shall be taken and discountedby 75% i.e. only 25% of the Industry average P/E shall be taken as capitalisation rate (P/E ratio). Earnings pershare of the latest audited annual accounts will be considered for this purpose.

c. The value as per the net worth value per share and the capital earning value calculated as above shall be averagedand further discounted by 15% for illiquidity so as to arrive at the fair value per share.

The above methodology for valuation shall be subject to the following conditions:

i. All calculations as aforesaid shall be based on audited accounts.

ii. In case where the latest balance sheet of the company is not available within nine months from the close ofthe year, unless the accounting year is changed, the shares of such companies shall be valued at zero.

iii. If the net worth of the company is negative, the share would be marked down to zero.

iv. In case the EPS is negative, EPS value for that year shall be taken as zero for arriving at capitalised earning.

v. In case an individual security accounts for more than 5% of the total assets of the scheme, an independentvaluer shall be appointed for the valuation of the said security. To determine if a security accounts for morethan 5% of the total assets of the scheme, it should be valued in accordance with the procedure asmentioned above on the date of valuation.

vi. At the discretion of the AMC and with the approval of the trustees, an unlisted equity share may be valuedat a price lower than the value derived using the aforesaid methodology.

Valuation of securities with Put/Call Options

The option embedded securities would be valued as follows:

Securities with call option:

The securities with call option shall be valued at the lower of the value as obtained by valuing the security to final maturityand valuing the security to call option.

In case there are multiple call options, the lowest value obtained by valuing to the various call dates and valuing to thematurity date is to be taken as the value of the instrument.

Securities with Put option:

The securities with put option shall be valued at the higher of the value as obtained by valuing the security to finalmaturity and valuing the security to put option

In case there are multiple put options, the highest value obtained by valuing to the various put dates and valuing to thematurity date is to be taken as the value of the instruments.

Securities with both Put and Call option on the same day:

The securities with both Put and Call option on the same day would be deemed to mature on the Put/Call day and wouldbe valued accordingly.

(i) Government securities.

Government securities will be valued at yield to maturity based on the prevailing market rate

Illiquid Securities:

(a) Aggregate value of “illiquid securities” of scheme, which are defined as non-traded, thinly traded and unlistedequity shares, shall not exceed 15% of the total assets of the scheme and any illiquid securities held above 15%of the total assets shall be assigned zero value.

Provided that in case any scheme has illiquid securities in excess of 15% of total assets as on September 30,2000 then such a scheme shall within a period of two years bring down the ratio of illiquid securities within theprescribed limit of 15% in the following time frame:

(i) all the illiquid securities above 20% of total assets of the scheme shall be assigned zero value on September30, 2001.

(ii) All the illiquid securities above 15% of total assets of the scheme shall be assigned zero value on September30, 2002.


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(b) All funds shall disclose as on March 31 and September 30 the scheme-wise total illiquid securities in value andpercentage of the net assets while making disclosures of half yearly portfolios to the unitholders. In the list ofinvestments, an asterisk mark shall also be given against all such investments, which are recognised as illiquidsecurities.

(c) Mutual Funds shall not be allowed to transfer illiquid securities among their schemes w.e.f. October 1, 2000.

(d) In respect of closed ended funds, for the purposes of valuation of illiquid securities, the limits of 15% and 20%applicable to open-ended funds should be increased to 20% and 25% respectively.

(e) Where a scheme has illiquid securities as at September 30, 2001 not exceeding 15% in the case of an open-ended fund and 20% in the case of closed fund, the concessions of giving time period for reducing the illiquidsecurity to the prescribed limits would not be applicable and at all time the excess over 15% or 20% shall beassigned nil value.

v) Value of “Rights” entitlement

a) Until they are traded, the value of the “rights” entitlement would be calculated as:

Vr = n/m x (Pex – Pof)

where

Vr = Value of rights

n = no. of rights Offered

m = no. of original shares held

Pex = Ex-Rights price

Pof = Rights Offer price

b) Where the rights are not traded pari-passu with the existing shares, suitable adjustments would be made to thevalue of rights. Where it is decided not to subscribe for the rights but to renounce them and renunciations arebeing traded, the rights would be valued at the renunciation value.

6. Expenses and Incomes Accrued

All expenses and incomes accrued up to the valuation date shall be considered for computation of NAV. For this purpose,major expenses like management fees and other periodic expenses would be accrued on a day to day basis. The minorexpenses and income will be accrued on a periodic basis, provided the non daily accrual does not affect the NAVcalculations by more than 1%.

7. Changes in securities and in number of units :

Any changes in securities and in the number of units will be recorded in the books not later than the first valuation datefollowing the date of transaction. If this is not possible, given the frequency of NAV disclosure, the recording may bedelayed up to a period of seven days following the date of the transaction, provided as a result of such non recording, theNAV calculation shall not be affected by more than 2%.

The valuation guidelines as outlined above are as per prevailing Regulations and are subject to change from time to timein conformity with changes made by SEBI.

8. Valuation of Derivative Products :

The traded derivatives shall be valued at market price in conformity with the stipulations of sub clauses (i) to (v) of clause1 of the Eighth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

The valuation of untraded derivatives shall be done in accordance with the valuation method for untraded investmentsprescribed in sub clauses (i) and (ii) of clause 2 of the Eighth Schedule to the Securities and Exchange Board of India(Mutual Funds) Regulations, 1996.

NAV of units under the Scheme shall be calculated as shown below :

Market or Fair Value of Scheme’s investments + Current Assets

- Current Liabilities and Provision

NAV (Rs.) =

No. of Units outstanding under Scheme

The NAV of the Scheme will be calculated as of the close of every Business Day. The valuation of the Scheme’s assets andcalculation of the Scheme’s NAV shall be subject to audit on an annual basis and such regulations as may be prescribedby SEBI from time to time.


38

k) Accounting Policies & Standards

In accordance with the Regulations, the AMC will follow the accounting policies and standards, as detailed below:

a) The AMC, for each Scheme, shall keep and maintain proper books of account, records and documents, so as to explain itstransactions and to disclose at any point of time the financial position of the Scheme and, in particular, give a true and fairview of the state of affairs of the Fund.

b) For the purposes of the financial statements, the Scheme shall mark all investments to market and carry investments in thebalance sheet at market value. However, since the unrealized gain arising out of appreciation on investments cannot bedistributed, provision shall be made for exclusion of this item when arriving at distributable income.

c) Dividend income earned by the Scheme shall be recognized, not on the date the dividend is declared, but on the date theshare is quoted on an ex-dividend basis. For investments which are not quoted on the stock exchange, dividend incomewould be recognized on the date of declaration of dividend.

d) In respect of all interest-bearing investments, income shall be accrued on a day to day basis as it is earned. Therefore,when such investments are purchased, interest paid for the period from the last interest due date up to the date ofpurchase should not be treated as a cost of purchase but shall be debited to Interest Recoverable Account. Similarly,interest received at the time of sale for the period from the last interest due date up to the date of sale must not be treatedas an addition to sale value but shall be credited to Interest Recoverable Account.

e) In determining the holding cost of investments and the gains or loss on sale of investments, the “average cost” methodshall be followed for each security.

f) Transactions for purchase or sale of investments shall be recognized as of the trade date and not as of the settlement date,so that the effect of all investments traded during a financial year are recorded and reflected in the financial statementsfor that year. Where investment transactions take place outside the stock market, for example, acquisition through privateplacement or purchases or sales through private treaty, the transaction would be recorded, in the event of a purchase, asof the date on which the Scheme obtains an enforceable obligation to pay the price or, in the event of a sale, when theScheme obtains an enforceable right to collect the proceeds of sale or an enforceable obligation to deliver the instrumentssold.

g) Bonus shares to which the Scheme becomes entitled shall be recognized only when the original shares on which thebonus entitlement accrues are traded on the stock exchange on an ex-bonus basis. Similarly, rights entitlements shall berecognized only when the original shares on which the right entitlement accrues are traded on the stock exchange on anex-right basis.

h) Where income receivable on investments has been accrued and has not been received for a period of 12 months beyondthe due date, provision shall be made by debit to the revenue account for the income so accrued and no further accrualof income shall be made in respect of such investments.

i) When Units are sold in the Scheme, an appropriate part of the sale proceeds shall be credited to an Equalization Accountand when units are repurchased an appropriate amount shall be debited to Equalization Account. The net balance on thisaccount shall be credited or debited to the Revenue Account. The balance on the Equalization Account debited or creditedto the Revenue Account shall not decrease or increase the net income of the Fund but is only an adjustment to thedistributable surplus. It shall therefore be reflected in the Revenue Account only after the net income of the Fund isdetermined.

j) When Units are sold, after considering the equalization as above, the difference between the sale price and the face valueof the Unit, if positive, shall be credited to reserves and if negative, shall be debited to reserve, the face value beingcredited to Capital Account. Similarly, when the Units are repurchased, after considering the equalization as above, thedifference between the purchase price and face value of the Unit, if positive, shall be debited to reserves and, if negative,shall be credited to reserves, the face value being debited to the Capital Account.

k) The cost of investments acquired or purchased shall include brokerage, stamp charges and any charge customarilyincluded in the broker’s bought note. In respect of privately placed debt instruments any front-end discount offered shallbe reduced from the cost of the investment.

l) Underwriting commission shall be recognized as revenue only when there is no devolvement on the Scheme. Where thereis devolvement on the Scheme, the full underwriting commission received and not merely the portion applicable to thedevolvement shall be reduced from the cost of the investment.

m) An asset shall be classified as non-performing if the interest and/or principle amount have not been received or remainedoutstanding for one quarter from the date such income/installment have fallen due and relevant guidelines for identificationand provisioning for non-performing assets for mutual fund will be applicable.

The accounting policies and standards outlined above are as per the existing Regulations and are subject to change as perchanges in the Regulations.


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Guidelines For Identification and Provisioning for Non Performing Assets (Debt Securities) For Mutual Funds:

(A) Definition of a Non Performing Asset (NPA)

An ‘asset’ shall be classified as non performing, if the interest and/or principal amount have not been received orremained outstanding for one quarter from the day such income / instalment has fallen due.

(B) Effective date for classification and provisioning of NPAs:

The definition of NPA will be applied after a quarter past due date of the interest. For e.g. if the due date for interest is30.06.2000, it will be classified as NPA from 01.10.2000.

(C) Treatment of income accrued on the NPA and further accruals

After the expiry of the 1st quarter from the date the income has fallen due, there will be no further interest accrual on theasset i.e. if the due date for interest falls on 30.06.2000 and if the interest is not received, accrual will continue till30.09.2000 after which there will be no further accrual of income. In short, taking the above example, from the beginningof the 2nd quarter there will be no further accrual on income.

On classification of the asset as NPA from a quarter past due date of interest, all interest accrued and recognized in thebooks of accounts of the Fund till the date, should be provided for. For e.g. if interest income falls due on 30.06.2000,accrual will continue till 30.09.2000 even if the income as on 30.06.2000 has not been received. Further, no accrual willbe done from 01.10.2000 onwards. Full provision will also be made for interest accrued and outstanding as on 30.06.2000.

(D) Provision for NPAs – Debt Securities.

Both secured and unsecured investments once they are recognized as NPAs call for provisioning in the same manner andwhere these are related to close ended scheme the phasing would be such that to ensure full provisioning prior to theclosure of the scheme or the scheduled phasing which ever is earlier.

The value of the asset must be provided in the following manner or earlier at the discretion of the fund. Fund will not havediscretion to extend the period of provisioning. The provisioning against the principal amount or instalments should bemade at the following rates irrespective of whether the principal is due for repayment or not.

� 10% of the book value of the asset should be provided for after 6 months past due date of interest i.e. 3 months formthe date of classification of the asset as NPA.

� 20% of the book value of the asset should be provided for after 9 months past due date of interest i.e. 6 months fromthe date of classification of the asset as NPA.

� Another 20% of the book value of the assets should be provided for after 12 months past due date of interest i.e. 9months form the date of classification of the asset as NPA.

� Another 25% of the book value of the assets should be provided for after 15 months past due date of interest i.e. 12months from the date of classification of the asset as NPA.

� The balance 25% of the book value of the asset should be provided for after 18 months past due date of the interesti.e. 15 months form the date of classification of the assets as NPA.

Book value for the purpose of provisioning for NPAs shall be taken as a value determined as per the prescribed valuationmethod.

This can be explained by an illustration:

Let us consider that interest income is due on a half yearly basis and the due date falls on 30.06.2000 and the interest isnot received till 1st quarter after due date i.e. 30.09.2000. This provisioning will be done in following phased manner:

10% provision 01.01.2001 6 months past due date of interest i.e. 3 months formthe date of classification of asset as NPA (01.10.2000)

20% provision 01.04.2001

20% provision 01.07.2001

25% provision 01.10.2001

25% provision 01.01.2002

Thus, 1 1/2; years past the due date of income or 1 1/4; year from the date of classification of the ‘asset’ as an NPA, the‘asset’ will be fully provided for. If any instalment is fallen due, during the period of interest default, the amount ofprovision should be instalment amount or above provision amount, whichever is higher.


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(E) Reclassification of assets:

Upon reclassification of assets as ‘performing assets’:

1. In case a company has fully cleared all the arrears of interest, the interest provisions can be written back in full.

2. The asset will be reclassified as performing on clearance of all interest arrears and if the debt is regularly serviced overthe next two quarters.

3. In case the company has fully cleared all the arrears of interest, the interest not credited on accrual basis would becredited at the time of receipt.

4. The provision made for the principal amount can be written back in the following manner: -

� 100% of the asset provided for in the books will be written back at the end of the 2nd quarter where theprovision of principal was made due to the interest defaults only.

� 50% of the asset provided for in the books will be written back at the end of the 2nd quarter and 25% after everysubsequent quarter where both installments and interest were in default earlier.

5. An asset is reclassified as ‘standard asset’ only when both overdue interest and overdue installments are paid in fulland there is satisfactory performance for a subsequent period of 6 months.

(F) Receipt of past dues :

When the fund has received income/principal amount after their classifications as NPAs;

� For the next 2 quarters, income should be recognized on cash basis and thereafter on accrual basis. The asset will becontinued to be classified as NPA for these two quarters.

� During this period of two quarters although the asset is classified as NPA no provision needs to be made for the principalif the same is not due and outstanding

� If part payment is received towards principal, the asset continues to be classified as NPA and provisions are continued asper the norms set at (D) above. Any excess provision will be written back.

(G) Classification of Deep Discount Bonds as NPAs :

Investments in Deep Discount Bonds can be classified as NPAs, if any two of the following conditions are satisfied:

� If the rating of the Bond comes down to grade ‘BB’ or below.

� If the company is defaulting in their commitments in respect of other assets, if available.

� Full Net worth erosion.

Provision should be made as per the norms set at (D) above as soon as the asset is classified as NPA.

Full provision can be made if the rating comes down to grade ‘D’

(H) Reschedulement of an asset :

In case any company defaults either interest or principal amount and the fund has accepted a Reschedulement of the scheduleof payments, then the following practice may be adhered to:

(i) In case it is a first Reschedulement and only interest is in default, the status of the asset namely, ‘NPA’ may be continuedand existing provisions should not be written back. This practice should be continued for two quarters of regular servicingof the debt. Thereafter, this be classified as ‘performing asset’ and the interest provided may be written back.

(ii) If the Reschedulement is done due to default in interest and principal amount, the asset should be continued as non-performing for a period of 4 quarters, even though the asset is continued to be serviced during these 4 quarters regularly.Thereafter, this can be classified as ‘performing asset’ and all the interest provided till such date should be written back.

(iii) If the Reschedulement is done for a second/third time or thereafter, the characteristic of NPA should be continued foreight quarters of regular servicing of the debt. The provision should be written back only after it is reclassified as‘performing asset’.

(I) Disclosure in the Half Yearly Portfolio Reports :

The mutual funds shall make scripwise disclosures of NPAs on half yearly basis along with the half yearly portfolio disclosure.

The total amount of provisions made against the NPAs shall be disclosed in addition to the total quantum of NPAs and theirproportion of the assets of the mutual fund scheme. In the list of investments an asterisk mark shall be given against suchinvestments which are recognized as NPAs. Where the date of redemption of an investment has lapsed, the amount notredeemed shall be shown as ‘Sundry Debtors’ and not investment provided that where an investment is redeemable byinstallments that will be shown as an investment until all installments have become overdue.

(J) Effective date for implementation to the above norms :

The above norms have been implemented by the Fund with effect from 01.10.2000.


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SECTION III

UNITS & THE INITIAL OFFERGENERAL INFORMATIONa) Minimum Subscription Amount

As the Scheme is an existing scheme and is being converted into an open ended fund, there was no minimum subscriptionunder the Scheme.

b) Offer Price

The purchase price of the Units, on an ongoing basis, will be based on the Applicable NAV subject to applicable load. ForUnits issued on an on-going basis, at present an applicable entry load of is as follows:



iii. For investment of Rs. 3 crores and above: Entry load is Nil.


c) Minimum Amount for Application

The minimum application amount for the Scheme is:

Scheme Minimum Application Amount Minimum additionalamount in multiples of:

Prudential ICICI Power Rs.5000 Re.500

An existing Unitholder can purchase additional Units for any amount, subject to the minimum additional amount ofRs.500.

d) Initial Issue Expenses

As the Scheme is an existing scheme (ICICI Power) being converted into an open-ended scheme and being renamed asPrudential ICICI Power, there will be no initial issue expenses under the Scheme.

Past Schemes

The details of the schemes launched prior to the date of this document and the Initial Issue Expenses charged thereunderare as follows :

Name of the Scheme Date of launch Initial Issue Expenses charged to theScheme (as per the disclosure

made in the Offer Documents)

Prudential ICICI Income Plan June 4, 1998 Nil

Prudential ICICI Growth Plan June 4, 1998 Nil

Prudential ICICI Liquid Plan June 4, 1998 Nil

Prudential ICICI FMCG Fund February 15, 1999 1%

Prudential ICICI Tax Plan July 9, 1999 1%

Prudential ICICI Gilt Fund July 21, 1999 Nil

Prudential ICICI Balanced Fund September 20, 1999 1%

Prudential ICICI Technology Fund January 7, 2000 1.75%

Prudential ICICI Monthly Income Plan September 28, 2000 Nil

Prudential ICICI Fixed Maturity Plan December 20, 2000 Nil

Prudential ICICI Gilt Treasury - 1 Year Plus Plan April 26, 2001 Nil

Prudential ICICI Child Care Plan July 16, 2001 Gift Plan : 2.50%

Study Plan: 1.50%

Prudential ICICI Short Term Plan October 18, 2001 Nil

Prudential ICICI Index Fund February 15, 2002 1.50%

Prudential ICICI Sweep Plan February 27, 2002 Nil

Prudential ICICI FMP Yearly- Series 5 March 22, 2002 Nil


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Prudential ICICI Long Term Plan March 26, 2002 Nil

Prudential ICICI FMP 1 Year Plus June 27, 2002 NilPlan – Series 6

Prudential ICICI FMP One Year Plus August 19, 2002 NilPlan - Series 7

Prudential ICICI FMP One Year Plus September 16, 2002 Nil

Prudential ICICI Flexible Income Plan September 16, 2002 Nil

Prudential ICICI Dynamic Plan October 7, 2002 2.50%*

SENSEX Prudential ICICI Exchange January 6, 2003 1.00%Traded Fund

Prudential ICICI FMP One Year Plus March 17, 2003 NilPlan – Series 12

Prudential ICICI Floating Rate Fund March 28, 2003 Nil

Prudential ICICI Flexible Income Plus Plan May 22, 2003 Nil

* Actual expenses charged to this scheme were limited to 1.33%.

Given below are the details of actual aggregate issue expenses incurred under the above mentioned funds.

(% of amount mobilized)

Category of Expenses Liquid, FMCG Tax Plan Gilt Fund Balanced TechnologyIncome and Fund Fund Fund

Growth Plans

Collections During IPO (Rs in crores) 173 71.60 50.76 150.01 197.58 509.00

Marketing, promotion and advertisement 1.80 1.40 0.33 0.15 0.45 0.27

Brokerage and commission 0.09 0.93 1.06 0.02 1.01 1.49

Registrar, bank and professional charges 0.05 0.12 0.04 0.01 0.01 0.04

Total 1.94 2.45 1.43 0.18 1.47 1.80


Category of Expenses Monthly Fixed Gilt Fund – Child Care Short Term Flexible DynamicIncome Plan Maturity Treasury 1 Plan Plan Income Plan

Plan Year Plus Plan Plan

Collections During IPO (Rs in crores) 48.67 80.31 100.037 10.62 127.94 243.83 17.64

Marketing, promotion and advertisement 1.13 - 0.002 11.86 0.04 - -

Brokerage and commission 0.08 - - 1.42 0.15 - 1.33

Registrar, bank and professional charges 0.61 0.005 0.004 0.63 0.01 - -

Total 1.82 0.005 0.006 13.91* 0.20 - 1.33

* Expenses to the extent of 2.50% of the amount mobilized during the Initial Offer Period under Gift Plan and 1.50%under Study Plan have been charged to the Scheme and the balance expenses have been borne by the AMC.


Category of Expenses Index Fund Sweep Plan Fixed Long Term FixedMaturity Plan Maturity –

Plan Yearly One YearSeries 5 Plus Plan

Series 6

Collections During IPO (Rs in crores) 7.86 10.00 4.19 50.001 132.73crores Lakhs crores crores crores

Marketing, promotion and 0.15 Nil Nil Nil Niladvertisement

Brokerage and commission 0.13 Nil Nil Nil 0.23

Registrar, bank and professional 0.32 0.5 0.01 0.01 0.01charges

Total 0.6 0.5 0.01 0.01 0.24


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Category of Expenses Fixed Fixed SPIcE ** FMP One Floating FlexibleMaturity – Maturity – Year Plus Rate Fund ** Income

One Year One Year Plan – Plus Plan **Plus Plan Plus Plan Series 12**

Series 7** Series 8**

Collections During IPO (Rs in crores) 0.01 0.01 21.28 0.01 51.05 35Lakh Lakh Crores crores crores crores

Marketing, promotion and advertisement Nil Nil Nil Nil Nil Nil

Brokerage and commission Nil Nil Nil Nil Nil Nil

Registrar, bank and professional charges Nil Nil Nil Nil Nil Nil

Total Nil Nil Nil Nil Nil Nil

** Borne by the AMC.

e) Options and Investment Plans offered under the Scheme

Under the Scheme, Investors may choose either the Cumulative Option or the Dividend Option.

(i) Cumulative Option

The Scheme will not declare any dividends under this option. The income earned by the Scheme will remain reinvested inthe Scheme and will be reflected in the Net Asset Value. This option is suitable for investors who are not looking forregular income. If Units under this option are redeemed after they have been held as a capital asset for a period of at leastone year from the date of acquisition, Unitholders will get benefit of long term capital gains tax. Please refer to page 78on “Taxation”

(ii) Dividend Option

This option is suitable for investors seeking income through dividend declared by the Scheme. The Trustee may approvethe distribution of dividend by AMC out of the net surplus under this Option. The remaining net surplus after consideringthe dividend and tax, if any, payable there on will be ploughed back in the Scheme and be reflected in the NAV.

It should, however, be noted that actual distribution of dividends and the frequency of distribution as indicated above areprovisional and will be entirely at the discretion of the Trustee.

For tax benefits, please refer page 78.

f) Pledge of Units for loans

The Units can be pledged by the Unitholders as security for raising loans subject to the conditions of the lending institution.The Registrar will take note of such pledge / charge in its records.

g) Systematic Investment Plan (SIP)

The Unitholders of the Scheme can benefit by investing specific Rupee amounts periodically, for a continuous period. The SIPallows the investors to invest a fixed amount of Rupees every month or quarter for purchasing additional Units of the Schemeat NAV based prices. Investors can enroll themselves for SIP in the Scheme by ticking appropriate box on the application formor by subsequently making a written request to that effect to the Registrar.

The Unitholders opting for SIP may begin their investment with an amount of Rs.1,000 in the Scheme.

The Unitholders who wish to invest on a monthly basis can invest a minimum of Rs.500 or multiples thereof on a monthly basisby providing the Registrar with at least eight post-dated cheques, for a block of 8 months in advance. The cheques should bedated 7th or the 10th of the respective months.

The Unitholders wishing to invest on a quarterly basis must provide the Registrar or the Customer Service Centre with a chequeof Rs. 1000/- being intial contribution and at least 4 post-dated cheques dated 31st March, 30th June, 30th September and 31st

December, for a minimum of Rs.1000 per cheque for a block of twelve months.

The cheques should be drawn in favour of “Prudential ICICI Power” and crossed “Account Payee Only” and must bepayable at the centre where the applications are submitted to the Customer Service Centre. On receipt of the post-datedcheques, the Registrar will send a letter to the Unitholder confirming that his/her name has been included in the SystematicInvestment Plan. The cheques will be presented on the dates mentioned on the cheque and subject to realization, Units willbe allotted at the Purchase Price on the date of receipt of advice about the net realization amount of the cheque. Within 3Business Days of such allotment, a fresh Account Statement will be mailed to the Unitholder, indicating the new balance to his/her credit in the Account. An investor will have the right to discontinue the Systematic Investment Plan, subject to giving 14days prior notice to the Registrar.


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Here is an illustration using hypothetical figures indicating how the SIP can work for investors:

Suppose an investor would like to invest Rs.1000 under the Systematic Investment Plan on a quarterly basis, i.e. a total amountof Rs.5,000 through four post-dated cheques dated 31st March, 30th June, 30th September and 31st December.

Quarter Amount Invested (Rs.) Purchase Price (Rs.) No. of Units Purchased

Initial Investment 1,000 11 90.909

I 1,000 12 83.333

II 1,000 15 66.667

III 1,000 11 90.909

IV 1,000 13 76.923

TOTAL 5,000 - 408.741

Average cost per Unit = Rs.12.233. (i.e. Rs.5,000/ 408.741 Units)

Subject to the minimum investment prescribed under Systematic Investment Plan, the Fund may close a Unitholder’s accountif the balance falls below Rs.5,000 and the investor fails to invest sufficient funds to bring the value of the account up toRs.5,000 within 30 days, after a written intimation in this regard is sent to the Unitholder.

The Unitholders of ICICI Power who have opted for continuation under the Scheme or who have not redeemed their Unitholdingsunder ICICI Power and are continuing in the Scheme will not be governed by the provisions stated above.

h) Systematic Withdrawal Plan (SWP)

Unitholders of the Scheme have the benefit of enrolling themselves in the Systematic Withdrawal Plan. The SWP allows theUnitholder to withdraw a specified sum of money each month from his investments in the Scheme. SWP is ideal for investorsseeking a regular inflow of funds for their needs. It is also ideally suited to retirees or individuals who wish to invest lumpsumand withdraw from the investment over a period of time.

The minimum amount which the Unitholder can withdraw is Rs.500 and in multiples thereof. The Unitholder may avail of thisplan by sending a written request to the Registrar.

The amount thus withdrawn by redemption will be converted into Units at Applicable NAV based prices and the number ofUnits so arrived at will be subtracted from the Units balance to the credit of that Unitholder.

Unitholders may change the amount indicated in the SWP, subject to a minimum amount of Rs. 500 and in multiples thereof.The SWP may be terminated on a written notice by a Unitholder of the Scheme and it will terminate automatically if all Unitsare liquidated or withdrawn from the account or upon the Funds’ receipt of notification of death or incapacity of theUnitholder.

i) Flexible Lifetime Investment Programme

The ability to switch part or all of a Unitholder’s investments between the open ended Schemes offered by the Fund is animportant feature of this offer. Investors may choose to alter the allocation of their investment among the Schemes in order tomeet their changed investment needs, risk profiles or changing circumstances during their lifetime. A Unitholder is thereforeable to tailor his / her investment to his / her specific situation.

j) How to Switch

On an on-going basis, the Unitholders will have the option to switch all or part of their investment from the Scheme to any ofthe other open ended schemes offered by the Fund which is available for investment at that time. To effect a switch, aUnitholder must provide clear instructions. A request for a switch may be specified either in terms of amount or in terms of thenumber of units of the scheme from which the switch is sought. Such instructions may be provided in writing or by completingthe Switch Request Slip provided in the transaction booklet and lodging the same on any Business Day at any of the CustomerService Centers. An Account Statement reflecting the new holdings will be despatched to the Unitholders within 7 BusinessDays of completion of switch transaction.

The switch will be effected by redeeming Units from the Scheme in which the Units are held and investing the net proceeds inthe other scheme(s), subject to the minimum balance applicable for the respective scheme(s).

The price at which the Units will be switched out of the Scheme will be based on the Applicable NAV of the relevant scheme(s)and considering any exit/entry/ combination of entry and exit loads that the Trustee may approve from time to time.

At present, no entry load will be payable in respect of switch transaction from one equity scheme of Fund to anotherequity scheme of Fund.

The Applicable NAV for effecting the switch out of the existing open-ended funds will be the NAV of the Business Day on whichthe switch request, complete in all respects, is received by the AMC, subject to the cut-off time and other terms specified in theoffer document of the respective existing open-ended schemes.

k) Who can Invest?

The following persons are eligible and may apply for subscription to the Units of the Scheme (subject, wherever relevant, topurchase of units of Mutual Funds being permitted under respective constitutions and relevant statutory regulations):


45

� Resident adult individual either singly or jointly (not exceeding three)

� Minor through parent/lawful guardian

� Companies, Bodies Corporate, Public Sector Undertakings, association of persons or bodies of individuals and societiesregistered under the Societies Registration Act, 1860 (so long as the purchase of units is permitted under the respectiveconstitutions)

� Religious and Charitable Trusts under the provisions of 11(5)(xii) of Income-tax Act, 1961 read with Rule 17C of Income-Tax Rules, 1962

� Partnership Firms

� Karta of Hindu Undivided Family (HUF)

� Banks & Financial Institutions

� Non-resident Indians/Persons of Indian origin residing abroad (NRIs) on full repatriation basis or on non-repatriationbasis

� Foreign Institutional Investors (FIIs) registered with SEBI on full repatriation basis

� Army, Air Force, Navy and other para-military funds

� Scientific and Industrial Research Organizations

� Mutual fund schemes

l) How to apply?

(i) Resident Investors

Mode of Payment :

Investors may make payments for subscription to the Units of the Scheme by local cheque/bank draft, drawn on any bankbranch. Cheques/demand drafts should be drawn in favour of “Prudential ICICI Power” and must be crossed “AccountPayee Only”. Cash will not be accepted at the Customer Service Centres.

Payments by Stock invests and out-station and/or post-dated cheques will not be accepted. Bank charges for out-station demand drafts (as defined herein) will not be borne by the AMC.

(ii) NRIs, FIIs

In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May 3, 2000, RBI has granted general permission to NRIsto purchase, on a repatriation basis units of domestic mutual funds. Further, the general permission is also granted toNRIs to sell the units to the mutual funds for repurchase or for the payment of maturity proceeds, provided that the unitshave been purchased in accordance with the conditions set out in the aforesaid notification.

For the purpose of this section, the term “mutual funds” is as referred to in Clause (23D) of Section 10 of Income-Tax Act1961.

However, NRI investors, if so desired, also have the option to make their investment on a non-repatriable basis.

FIIs :

In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May 3, 2000. RBI has granted general permission to aregistered FII to purchase on a repatriation basis units of domestic mutual funds subject to the conditions set out in theaforesaid notification. Further, the general permission is also granted to FIIs to sell the units to the mutual funds forrepurchase or for the payment of maturity proceeds, provided that the units have been purchased in accordance with theconditions set out in the aforesaid notification.

For the purpose of this section, the term “mutual funds” is as referred to in Clause (23D) of Section 10 of Income-Tax Act1961.

iii) Mode of Payment on Repatriation basis

In case of NRIs and persons of Indian origin residing abroad, payment may be made by way of Indian Rupee draftspurchased abroad and payable at Mumbai or by way of cheques drawn on Non-Resident (External) (NRE) Accountspayable at par at Mumbai. Payments can also be made by means of rupee drafts payable at Mumbai and purchased outof funds held in NRE Accounts / FCNR Accounts. In case of FIIs, the amount representing the investment is received bydebit to the Special Non resident Rupee Account of the FII maintained with a designated bank, approved by RBI.

All cheques/drafts should be made out in favour “Prudential ICICI Power ” and crossed “Account Payee Only”. Incase Indian Rupee drafts are purchased abroad or from FCNR/NRE A/c. an account debit certificate from the Bank issuingthe draft confirming the debit shall also be enclosed.

iv) Mode of payment on Non-Repatriation basis

In case of NRIs/persons of Indian origin applying for Units on a non-repatriation basis, payments may be made bycheques/demand drafts drawn out of Non-Resident Ordinary (NRO) accounts payable at the city where the ApplicationForm is accepted.


46

v) Application under Power of Attorney/ Body Corporate/Registered Society/ Trust/ Partnership

In case of an application under Power of Attorney or by a limited company, body corporate, registered society, trust orpartnership, etc., the relevant Power of Attorney or the relevant resolution or authority to make the application as the casemay be, or duly certified copy thereof, along with the memorandum and articles of association/bye-laws must be lodgedat the Registrar’s Office.

vi) Joint Applicants

In the event an Account has more than one registered owner, the first-named holder (as determined by reference to theoriginal Application Form) shall receive the Account Statement, all notices and correspondence with respect to theAccount, as well as the proceeds of any redemption requests or dividends or other distributions. In addition, suchUnitholders shall have the voting rights, as permitted, associated with such Units, as per the applicable guidelines.

Applicants can specify the ‘mode of holding’ in the Application Form as ‘Jointly’ or ‘Anyone or Survivor’. In the case ofholding specified as ‘Jointly’, redemptions and all other requests relating to monetary transactions would have to besigned by all joint holders. However, in cases of holding specified as ‘Anyone or Survivor’, any one of the Unitholders willhave the power to make redemption requests, without it being necessary for all the Unitholders to sign. However, in allcases, the proceeds of the redemption will be paid to the first-named holder.

vii) Nomination Facility

The AMC has provided this nomination facility as an additional feature. By provision of this facility the AMC is not in anyway attempting to grant any rights other than those granted by law to the nominee. A nomination in respect of the Unitsdoes not create an interest in the property after the death of the Unit holder.

The nominee shall receive the Units only as an agent and trustee for the legal heirs or legatees as the case maybe.

All other issues pertaining to nomination facility and nominee/s shall be subject to the Nomination Rules asprescribed by AMC from time to time.

The single/joint/surviving Unitholders can, at the time an application is made or subsequently by writing to the Registrarrequest for a nomination form and the Rules and Regulations governing the facility in order to nominate any personsubject to completion of necessary formalities.

It may, however, be noted that in the event of death of the Unitholder and in the event a nominee has been named, thenominee shall stand transposed in respect of the Units held by the Unit holder. Such nominee (new Unit holder) will holdthe Units in trust for and on behalf of the estate of the original Unit holder and his / her legal heirs. Such payments madeby the AMC shall be full and valid discharge of the AMC / Fund from all further liabilities in respect of the sums so paid.

The AMC shall have the right to ask for any additional information / documentation as it may deem necessary to satisfyitself as to the identity of the Nominee/ Claimant including but not limited to procuring an Indemnity Bond.

n) Issuance of Units/ Account Statements/Transaction Confirmation

Under normal circumstances, an Account Statement/Transaction Confirmation will be mailed to the investor indicating thenumber of Units purchased and/or the new balance to Unit holder’s credit in the Account within three Business Days ofacceptance of the purchase request. Provided that the Fund reserves the right to reverse the transaction of crediting the UnitHolder’s account, in the event of non-realization of any cheque or other instrument remitted by the investor.

The Account Statements/Transaction Confirmation shall be non-transferable. If the Unit holder so desires non-transferableUnit certificates will be issued within six weeks of the receipt of request for the certificate.

Any addition/ deletion of name from the folio of the unitholder is deemed as transfer of units. But the Units of the Scheme arenot transferable.

In view of the same, additions/ deletion of names will not be allowed under any folio of the Scheme.

The above provisions in respect of deletion of names will not be applicable in case of death of unitholder (in respect of jointholdings) as this is treated as transmission of units and not transfer.

Allotment of Units and despatch of Account Statements to FIIs will be subject to RBI approval.

All Units will rank pari passu, among Units within the same Option, i.e. either the dividend option or the growth option, as toassets, earnings and the receipt of dividend distributions, if any, as may be declared by the Trustee.

o) Redemption of Units

The Units can be redeemed (i.e., sold back to the Fund), at the Applicable NAV (hereinafter defined) commencing from not laterthan 30 days from the Record Date for Conversion for the Scheme. Redemption requests can be made in amounts with aminimum of Rs.500.

A Unitholder may request redemption of a specified amount or a specified number of Units, (subject to the minimumredemption amount) the number of Units specified will be considered for deciding the redemption amount. If only theredemption amount is specified by the Unitholder, the Fund will divide the redemption amount so specified by the ApplicableNAV based price to arrive at the number of Units.


47

In case an investor has purchased Units on more than one Business Day, the Units purchased prior in time (i.e. those Unitswhich have been held for the longest period of time) will be deemed to have been redeemed first i.e. on a First-in-First-Outbasis.

Unitholders may also request for redemption of their entire holding and close the account by indicating the same at theappropriate place in the Redemption Request Form.

i) Redemption Price

The Redemption Price of the Units will be based on the Applicable NAV, subject to prevalent exit load provisions, if any. Forthe present, the Fund does not intend to charge any exit load for redemption of Units.

The redemption price will be calculated using the following formula:

Redemption Price = Applicable NAV * (1-Exit Load, if any).

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide tointroduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changes willbe applicable for prospective investments. The Trustee shall arrange to display a notice in the Customer ServiceCenters of the AMC at least 10 days before the change of the then prevalent load structure. The addendumdetailing the changes in load structure will be attached to offer documents and abridged offer documents. Theaddendum will also be circulated to all the distributors / brokers so the same can be attached to all the offerdocuments and abridged offer documents in stock. This addendum will also be sent along with the newsletter tothe unitholders immediately after the changes. Changes in the load structure may be stamped in theacknowledgement slip issued by the Fund after the changes in load structure. The load collected from theUnitholders under each Plan will be credited to a separate account in the respective Plan accounts and will beoffset against distribution and marketing expenses. Surplus of load, if any, charged over planned marketing anddistribution expenses to be defrayed will be credited to the respective Plans whenever felt appropriate by theAMC.

The Fund shall ensure that the Redemption Price is not lower than 93% of the NAV and the Purchase Price is not higherthan 107% of the NAV, provided that the difference between the Redemption Price and Purchase Price of the Units shallnot exceed the permissible limit of 7% of the Purchase Price, as provided for under the Regulations.

ii) Applicable NAV

Applicable NAV is the Net Asset Value per Unit at the close of the Business Day on which the application is accepted. Anapplication will be considered accepted on that day, subject to it being complete in all respects and received prior to 3.00p.m. on that Business Day.

iii) How to Redeem?

The redemption requests can be made on the transaction slip for redemption available at the Customer Service Centres.The redemption request can be made at any of the Customer Service Centres as listed in this Offer Document

In case the Units are standing in the names of more than one Unitholder, where mode of holding is specified as ‘Jointly’,redemption requests will have to be signed by all joint holders. However, in cases of holding specified as ‘Anyone orSurvivor’, any one of the Unitholders will have the power to make redemption requests, without it being necessary for allthe Unitholders to sign. However, in all cases, the proceeds of the redemption will be paid only to the first-named holder.

The Unitholder may either request for mailing of the redemption proceeds to his/her address or collection of the samefrom the Customer Service Center.

iv) Payment of Proceeds

All redemption requests received prior to 3.00 p.m. on any Business Day will be considered accepted on that Business Day,subject to the redemption request being complete in all respects, and will be priced on the basis of the Applicable NAV(subject to the applicable load) for that day. Where an application is received after the cut-off time, as above, the requestwill be deemed to have been received on the next Business Day. Please see page 84 ‘Right to Limit Redemption’ and page84 ‘Suspension of Sale and Redemption of Units’.

As per the Regulations, the Fund shall despatch the redemption proceeds within 10 (ten) Business Days from the date ofacceptance of redemption request at any of the Customer Service Centres, in case of a redemption request being sent bypost.

Under normal circumstances, the Fund will endeavour to despatch the redemption cheques within 3 Business Days fromthe date of acceptance of the redemption request.

The redemption cheque will be issued in favour of the sole/first Unitholder’s registered name and bank account numberand will be sent to the registered address of the sole/first holder as indicated in the original Application Form. Theredemption cheque will be payable at par at all the places where the Customer Service Centres are located. The bankcharges for collection of cheques at all other places will be borne by the Unitholder.

As per the directives issued by SEBI, it is mandatory for applicants to mention their bank account numbers in theirapplications for purchase or redemption of Units. If the Unit-holder fails to provide the Bank mandate, the


48

request for redemption would be considered as not valid and the Fund retains the right to withhold the redemptionuntil a proper bank mandate is furnished by the Unit-holder and the provision with respect of penal interest insuch cases will not be applicable/ entertained.

A fresh Account Statement will be sent by the Registrar to the redeeming investors, indicating the new balance to thecredit in the Account.

The Fund may close a Unitholder’s account if, as a consequence of redemption, the balance falls below Rs.5,000 and aperiod of 30 (thirty) days has elapsed after the issue of notice to the Unitholder by the AMC requesting him to bring theamount in the account to the minimum described above and the Unitholder fails to do so.

The Unitholders of ICICI Power who have opted for continuation under the Scheme or who have not redeemed theirUnitholdings under ICICI Power and are continuing in the Scheme will not be governed by the provisions stated above.

If a Unitholder makes a redemption request immediately after purchase of Units, the Fund shall have a right to withholdthe redemption request till sufficient time has elapsed to ensure that the amount remitted by him (for purchase of Units)is realized and the proceeds have been credited to the Scheme’s Account. However, this is only applicable if the value ofredemption is such that some or all of the freshly purchased Units may have to be redeemed to effect the full redemption.

v) Redemption by NRIs/FIIs

Units held by an NRI investor and FIIs may be redeemed by such investor in accordance with the procedure described aboveand subject to any procedures laid down by RBI. Such redemption proceeds will be paid by means of a Rupee chequepayable to NRIs/FIIs subject to RBI procedures and approvals, and subject to deduction of tax at source, as applicable.

As mentioned above, in terms of Notification No FERA.195/99-RB dated March 30, 1999 and FERA.212/99-RB datedOctober 18,1999, the RBI has now granted a general permission to mutual funds as referred to in Section 10(23D) ofIncome-tax Act, 1961 for repurchase of units of the schemes which are approved by SEBI, held by NRIs/FIIs

vi) Effect of Redemptions

The Unit Capital and Reserves of the Scheme will stand reduced by an amount equivalent to the product of the numberof Units redeemed and the Applicable NAV as on the date of redemption.

vii) Fractional Units

Since a request for redemption or purchase is generally made in Rupee amounts and not in terms of number of Units ofthe Scheme, an investor may be left with Fractional Units. Fractional Units will be computed and accounted for up to threedecimal places. However, Fractional Units will in no way affect the investor’s ability to redeem the Units, either in part orin full standing to the Unitholder’s credit.

viii) Right to Limit Redemptions

After complying with the regulatory requirements, the Trustee and the Board of Directors of the AMC may, in the generalinterest of the Unitholders of the Scheme and keeping in view the unforeseen circumstances/unusual market conditions,limit the total number of Units which may be redeemed on any Business Day to 5% of the total number of Units then inissue, or such other percentage as the Trustee may determine.

Any Units, which by virtue of these limitations are not redeemed on a particular Business Day, will be carried forward forredemption to the next Business Day, in order of receipt. Redemptions so carried forward will be priced on the basis of theApplicable NAV (subject to the prevailing load) of the Business Day on which redemption is made. Under such circumstances,to the extent multiple redemption requests are received at the same time on a single Business Day, redemptions will bemade on pro-rata basis, based on the size of each redemption request, the balance amount being carried forward forredemption to the next Business Day(s).

ix) Suspension of Sale and Redemption of Units

The Trustee and the Board of Directors of the AMC may decide to temporarily suspend determination of NAV of theScheme offered under this Document, and consequently sale and redemption of Units, in any of the following events:

1. When one or more stock exchanges or markets, which provide basis for valuation for a substantial portion of theassets of the Scheme is closed otherwise than for ordinary holidays.

2. When, as a result of political, economic or monetary events or any circumstances outside the control of the Trusteeand the AMC, the disposal of the assets of the Scheme is not reasonable, or would not reasonably be practicablewithout being detrimental to the interests of the Unitholders.

3. In the event of breakdown in the means of communication used for the valuation of investments of the Scheme,without which the value of the securities of the Scheme cannot be accurately calculated.

4. During periods of extreme volatility of markets, which in the opinion of the AMC are prejudicial to the interests of theUnitholders of the Scheme.

5. In case of natural calamities, strikes, riots and bandhs.


49

6. In the event of any force majeure or disaster that affects the normal functioning of the AMC or the Registrar.

7. If so directed by SEBI.

In the above eventualities, the time limits indicated above, for processing of requests for purchase and redemptionof Units will not be applicable.

Suspension or restriction of repurchase/ redemption facility under any scheme of the mutual fund shall be madeapplicable only after obtaining the approval from the Boards of Directors of the AMC and the Trustees. Afterobtaining the approval from the AMC Board and the Trustees, an intimation would be sent to SEBI in advanceproviding details of circumstances and justification for the proposed action shall also be informed.

p) Purchase of Units

The Scheme is open for fresh subscriptions on an ongoing basis. Applications by new investors (i.e. other than existingUnitholder) must be for a minimum amount of Rs.5,000 and in multiples of Re.1 thereafter. An existing Unitholder canhowever purchase additional Units, subject to the minimum additional amount of Rs.500 .

The Trustee shall, have absolute discretion to accept/reject any application for purchase of Units, if in the opinion of theTrustee, increasing the size of Scheme’s Unit capital is not in the general interest of the Unitholders, or the Trustee for any otherreason believes it would be in the best interest of the Scheme or its Unitholders to accept/reject such an application.

i) Purchase Price

The purchase price of the Units, on an ongoing basis is based on the Applicable NAV, subject to the entry load, if any. ForUnits issued on an on-going basis, at present an applicable entry load of is as follows:



ii. For investment of Rs. 3 crores and above: Entry load is Nil.


Purchase Price can be calculated using the following formula:

Purchase Price = Applicable NAV * (1+ Entry Load).

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide tointroduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changes willbe applicable for prospective investments. The Trustee shall arrange to display a notice in the Customer ServiceCenters of the AMC before the change of the then prevalent load structure. The addendum detailing the changesin load structure will be attached to offer documents and abridged offer documents. The addendum will also becirculated to all the distributors / brokers so that the same can be attached to all the offer documents andabridged offer documents in stock. This addendum will also be sent along with the newsletter to the unitholdersimmediately after the changes. Changes in the load structure may be stamped in the acknowledgement slipissued by the Fund after the changes in load structure. The load collected from the Unitholders under each Planwill be credited to a separate account in the respective Plan accounts and will be offset against distribution andmarketing expenses. Surplus of load, if any, charged over planned marketing and distribution expenses to bedefrayed will be credited to the respective Plans whenever felt appropriate by the AMC.

The Fund shall ensure that the Redemption Price is not lower than 93% of the NAV and the Purchase Price is not higherthan 107% of the NAV, provided that the difference between the Redemption Price and Purchase Price of the Units shallnot exceed the permissible limit of 7% of the Purchase Price, as provided for under the Regulations.

iii) How to Purchase?

The application forms for the purchase of Units of the Scheme will be available at the office of the AMC, the CustomerService Centres. New investors can purchase Units by completing an Application Form. Existing Unitholders may use thetransaction slip for additional purchases sent with the Account Statement or a new Application Form. Payment forpurchase of Units will be accepted only through a cheque or demand draft drawn payable at the centre where theapplication is lodged, drawn in favour of “Prudential ICICI Power”. Investors at places other than where the CustomerService Centres are located, are requested to make the payment without deducting the demand draft charges. The Fundwill not entertain any requests for reimbursement of demand draft charges.

Outstation cheques and cash will not be accepted under any circumstances.

Investors should complete the Application Form and deliver the same along with the cheque/draft at any of the CustomerService Centres of the AMC, listed on the last page of this Offer Document.

iv) Purchase by NRIs

Units will be issued to NRIs subject to the investor providing the required documents to the Fund.

v) Applicable NAV

Applicable NAV is the Net Asset Value per Unit at the close of the Business Day on which the application for subscriptionis accepted. An application for subscription will be considered accepted on that day, subject to it being complete in allrespects and received prior to 3.00 p.m. on that Business Day.


50

SECTION IVLOAD STRUCTURE, FEES AND EXPENSES

A) LOAD STRUCTURE OF THE SCHEMEEntry Load:

(i) For investments of less than Rs. 10 Lakhs : Entry load at 2.25% of applicable Net Asset Value (NAV).

(ii) For investment of Rs.10 Lakhs and above but upto Rs. 3 crores: Entry load at 1.75% of applicable Net Asset Value(NAV)

(iii) For investme nt of Rs. 3 crores and above: Entry load is Nil.

No entry load will be payable in respect of switch transaction from one equity scheme of Prudential ICICI toanother equity scheme of Prudential ICICI

Exit Load:

The Trustee, for the present does not intend to charge an exit load on redemption of Units.

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide tointroduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changes willbe applicable for prospective investments. The Trustee shall arrange to display a notice in the Customer ServiceCenters of the AMC at least 10 days before the change of the then prevalent load structure. The addendumdetailing the changes in load structure will be attached to offer documents and abridged offer documents. Theaddendum will also be circulated to all the distributors / brokers so the same can be attached to all the offerdocuments and abridged offer documents in stock. This addendum will also be sent along with the newsletter tothe unitholders immediately after the changes. Changes in the load structure may be stamped in theacknowledgement slip issued by the Fund after the changes in load structure. The load collected from theUnitholders under each Plan will be credited to a separate account in the respective Plan accounts and will beoffset against distribution and marketing expenses. Surplus of load, if any, charged over planned marketing anddistribution expenses to be defrayed will be credited to the respective Plans whenever felt appropriate by theAMC.

b) FEES AND EXPENSES OF THE SCHEME

As per the provisions of the Regulations, read with the amendments thereto, the following fees and expenses will be chargedto the Scheme:

Estimated Recurring Expenses

Description (% per annum of average net assets)

Investment Management Fee 1.25Trustee Fee 0.05

Custodian Fee 0.20Marketing & Selling 0.47Registrar & Transfer Agent 0.10

Audit Costs 0.01Costs of Investor Communications 0.12Cost of Funds Transfer 0.14

Costs for A/c Statements, Dividend etc. 0.11Cost of Statutory Advertisements 0.01Other Expenses 0.04

Total Recurring Expenses 2.50

The purpose of the above table is to assist the investor in understanding the various costs and expenses that an investor in theScheme will bear. These estimates are based on a corpus size of Rs.1 crore under the Scheme and would change to the extentassets are lower or higher. If the corpus size is in excess of Rs.1 crore, the above mentioned recurring expenses in the Schemewould change. The above expenses are subject to inter-se change and may increase/decrease as per actual and/or any changein the Regulations.

These estimates have been made in good faith as per information available to the AMC and the total expenses may be morethan as specified in the table above. However, as per the Regulations, the total recurring expenses that can be charged to theScheme in this Offer Document shall be subject to the applicable guidelines as indicated on page 52 under the head“Recurring Expenses”. Expenses over and above the permitted limits will be borne by the AMC.

c) FEES AND EXPENSES OF THE EXISTING SCHEMES

ICICI Mutual Fund, prior to the joint venture with Prudential, had launched two closed ended growth schemes, ICICI Premier,launched on November 30, 1993 and ICICI Power, launched on August 24, 1994 (since converted into an open-ended


51

scheme). Subsequent to the joint venture with Prudential, the Fund launched three open-ended schemes (Prudential ICICIGrowth Plan, Prudential ICICI Income Plan and Prudential ICICI Liquid Plan) on June 4, 1998 and one open ended scheme(Prudential ICICI FMCG Fund) on February 15, 1999. The Fund also launched Prudential ICICI Tax Plan, Prudential ICICI GiltFund, Prudential ICICI Balanced Fund, Prudential ICICI Technology Fund, Prudential ICICI Monthly Income Plan, PrudentialICICI Fixed Maturity Plan Prudential ICICI Child Care Plan, Prudential ICICI Index Fund, Prudential ICICI Dynamic Plan andSENSEX Prudential ICICI Exchange Traded Fund, on July 9,1999, July 21, 1999, September 20,1999, January 7, 2000, September28, 2000, December 20, 2000, July 16, 2001, February 15, 2002, October 7, 2002 and January 6, 2003 respectively. Thefollowing are the additional Plans under the existing Schemes of the Fund:

Sr.No. Additional Plan Existing Scheme Launch date

1 Prudential ICICI Gilt Fund - Prudential ICICI Gilt Fund April 26, 2001One Year Plus Plan

2 Prudential ICICI Short Term Plan Prudential ICICI Income Plan October 18, 2001

3 Prudential ICICI Long Term Plan Prudential ICICI Income Plan March 26, 2002

4 Prudential ICICI Sweep Plan Prudential ICICI Liquid Plan February 27, 2002

5 Prudential ICICI Fixed maturity Prudential ICICI Fixed Maturity Plan March 22, 2002Plan - Yearly 5

6 Prudential ICICI Fixed Maturity Prudential ICICI Fixed Maturity Plan June 27, 2002Plan – One Year Plus Plan

7. Prudential ICICI FMP Yearly- Series 7 Prudential ICICI Fixed Maturity Plan August 19, 2002

8. Prudential ICICI Fixed Maturity Plan – Prudential ICICI Fixed Maturity Plan September 16, 2002One Year Plus Plan - Series 8

9. Prudential ICICI Flexible Income Plan Prudential ICICI Income Plan September 16, 2002

10. Prudential ICICI Fixed Maturity Plan – Prudential ICICI Fixed Maturity Plan March 17, 2003One Year Plus Plan - Series 12

11. Prudential ICICI Floating Rate Plan Prudential ICICI Income Plan March 28, 2003

12. Prudential ICICI Flexible Income Prudential ICICI Income Plan May 22, 2003Plus Plan

INITIAL ISSUE EXPENSES – COMPARISON OF ESTIMATED TO ACTUALS

Description ICICI Premier ICICI Power

Estimated - % Actuals - % to Estimated - % Actuals - % toto Target Amount Subscription to Target Amount Subscription

Advertising Expenses 1.75 1.48 1.50 1.61

Commission to agents & brokers 2.00 1.36 1.75 2.53Registrar Expenses 0.75 0.10 1.25 0.07Printing & Mailing 1.00 0.24 1.00 0.42

Miscellaneous 0.50 0.36 0.50 0.40

Total 6.00 3.54 6.00 5.03

Target Amount/ Amount Mobilised Rs.100 crore Rs.159 crore Rs.50 crore Rs.90.28 crore

The Initial Issue Expenses relating to Liquid Plan, Income Plan, Growth Plan, Gilt Plan, Monthly Income Plan, Fixed MaturityPlan, Gilt Treasury- 1 Year Plus Plan, Short Term Plan, Sweep Plan, Long Term Plan, Fixed Maturity Plan- Yearly 5, Fixed MaturityPlan – One Year Plus Plan – Series 6, 7, 8 & 12 Prudential ICICI Flexible Income Plan, SENSEX Prudential ICICI Exchange TradedFund, Prudential ICICI Floating Rate Fund and Prudential ICICI Flexible Income Plus Plan were borne by the AMC and the detailsthereof are furnished on page 91.

Initial Issue Expenses - Prudential ICICI FMCG Fund, Prudential ICICI Tax Plan, Prudential ICICI Balanced Fund, PrudentialICICI Technology Fund, Prudential ICICI Child Care Plan, Prudential ICICI Index Fund and Dynamic Plan

The Initial Issue Expenses charged to the Investors under Prudential ICICI FMCG Fund, Prudential ICICI Tax Plan, and PrudentialICICI Balanced Fund were limited to 1% of the amount mobilized during the Initial Offer Period. The initial issue expensescharged to Investors under Prudential ICICI Technology Fund were limited to 1.75% of the corpus mobilized under the InitialOffer Period. In respect of Prudential ICICI Child Care Plan, initial issue expenses to be charged to the Scheme are limited to2.50% of the amount mobilised during the initial offer period under Gift Plan and 1.50% under Study Plan. Under PrudentialICICI Index Fund, the initial issue expenses to be charged to the Scheme is limited to 1.50% of the amount mobilized duringthe initial offer period. Under Prudential ICICI Dynamic Plan, the initial issue expenses to be charged to the Scheme is limitedto 2.50% of the amount mobilized during the initial offer period(as mentioned in the offer document), whereas the actualinitial issue expenses charged to the scheme were limited to 1.33%.


52

The details of estimated Vs actual expenses are as under:

Description FMCG Fund Tax Plan Gilt Fund Balanced Fund Technology Fund

Estimated - Actual - Estimated - Actual - Estimated - Actual - Estimated - Actual - Estimated - Actual -% to Target % to % to Target % to % to Target % to % to Target % to % to Target % to

Amount Subscrii- Amount Subscrii- Amount Subscrii- Amount Subscrii- Amount Subscrii-ption ption ption ption ption

Advertising, printing and 0.50 1.40 0.90 0.33 1.00 0.15 0.65 0.45 0.75 0.27other marketing expenses

Collection, Registrar and 0.25 0.12 0.60 0.04 0.25 0.01 0.25 0.01 0.25 0.04Bank charges

Selling Commissions 1.00 0.93 1.00 1.06 - 0.02 1.00 1.01 1.00 1.49

Total 1.75 2.45 2.50 1.43 1.25 0.18 1.90 1.47 2.00 1.80

Target Amount/Amount Rs. 1.00 Rs. 1.59 Rs.10.00 Rs.50.76 Rs.1.00 Rs.150.01 Rs.1.00 Rs.197.58 Rs.1.00 Rs.509Mobilised crore crore lacs crores crore crore crore crores crores crores

Description Child Care Child Care Child CarePlan – Plan – Plan-

Gift Plan Study Plan Gift & Index Fund Dynamic PlanStudy Plan

Estimated - Estimated - Actual - % to Estimated - Actual - % to Estimated - Actual - % to% to Target % to Target Subscription % to Target Subscription % to Target Subscription

Amount Amount Amount Amount

Advertising, printing and other 1.85 2.28 11.86 1.25 Nil 0.75 Nilmarketing expenses (includes

SellingCommission)

Collection, Registrar and Bank charges 0.35 0.35 0.63 0.25 Nil 0.25 Nil

Selling Commissions 1.00 1.00 1.42 - Nil 1.50 1.33

Total 3.20 3.63 13.91 1.50 Nil 2.50 1.33

Target Amount/Amount Mobilised Rs. 1.00 Rs. 1.00 Rs.10.62 Rs.1.00 Rs.7.86 Rs.7.86 Rs.17.64crore crore crores Crore crores crores crores

Note:

1. The Initial Issue Expenses under FMCG Fund were more due to higher advertisement costs.

2. As disclosed in the offer document of Child Care plan, Expenses to the extent of 2.50% of the amount mobilized duringthe Initial Offer Period under Gift Plan and 1.50% under Study Plan have been charged to the Scheme and the balanceexpenses have been borne by the AMC.

ACTUAL SCHEME RECURRING EXPENSES: CLOSED ENDED SCHEMES

As a % of Average weekly Net Assets

Description ICICI Premier ICICI Power+

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till 31.08.03) (till 31.08.03)

Investment management & Advisory fees 1.25 1.25 1.25 1.25 1.16 1.23 1.25 1.24

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.01 0.01 0.01 0.01 0.00 0.01 0.01 0.01

Audit Fees 0.01 0.04 0.02 0.04 0.00 0.05 0.04 0.06

Custodian Fees 0.01 0.01 0.04 0.14 0.01 0.04 0.09 0.22

Registrar & Transfer Agent Fees 0.51 0.34 0.11 0.15 0.09 0.16 0.25 0.07

Listing fees 0.00 0.06 0.03 0.03 0.00 0.00 0.05 0.05

Bank charges 0.01 0.06 0.00 0.03 0.06 0.04 0.01 0.01

Postal & Mailing Expenses 0.00 0.22 0.23 0.23 0.03 0.07 0.23 0.31

Brokerages 0.00 0.00 - - 0.18 0.23 - -

Advertising/Marketing/Printing Expenses 0.00 0.47 0.54 0.32 0.21 0.64 0.54 0.29

Cost related to investor communication 0.00 0.02 - 0.17 0.00 0.00 - 0.08

Other Expenses 0.70 0.02 0.27 0.11 0.67 0.00 0.03 0.16

Total Annual Recurring Expenses 2.50 2.50 2.50 2.50 2.41 2.47 2.50 2.50

Renamed as Prudential ICICI Power consequent to its conversion into open-ended fund effective from September 27,2001.

** Unaudited.


53

ESTIMATED RECURRING EXPENSES-OPEN ENDED SCHEMES

As per the Offer Document for the Liquid Plan, Income Plan, Growth Plan, FMCG Fund, Tax Plan, Gilt Fund, Balanced Fund,Technology Fund, Monthly Income Plan, Gilt Treasury 1 Year Plus Plan, Fixed Maturity Plan, Short Term Plan, Child Care Plan,Index Fund, Power, Long Term Plan, Sweep Plan, Flexible Income Plan, Dynamic Plan, SPIcE, Floating Rate Plan and FlexibleIncome Plus Plan the following were the estimated recurring expenses.

(% per annum of average net assets)

Description Growth Plan Income Plan Liquid Plan FMCG Fund Tax Plan Gilt Fund Balanced Fund

Treasury InvestmentOption Option

Investment management & 1.25 1.25 0.70 1.25 1.25 0.75 0.75 1.25Advisory fees

Additional Fees (if any) - - - - - - - -

Trustee Fees 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Custodian Fees 0.30 0.15 0.08 0.30 0.30 0.04 0.04 0.15

Advertising, Marketing & 0.50 0.25 0.03 0.50 0.50 0.02 0.02 0.20Selling Expenses

Registrar & Transfer Agents Fees 0.10 0.10 0.10 0.10 0.10 0.04 0.04 0.10

Transaction Costs 0.05 0.05 0.02 0.05 0.05 - - 0.05

Audit Fees 0.01 0.01 0.01 0.01 0.01 - - 0.01

Cost related to Investor 0.04 0.04 0.01 0.04 0.04 0.02 0.02 0.03communications

Cost of funds transfer 0.05 0.025 0.00 0.05 0.05 - - 0.05

Cost of providing Account 0.05 0.025 0.00 0.05 0.05 0.05 0.05 0.03Statements, dividenddistributions, etc.

Cost of statutory advertisements 0.05 0.025 0.00 0.05 0.05 0.01 0.01 0.04

Other Expenses 0.05 0.025 0.00 0.05 0.05 0.02 0.02 0.04



Description Technology Monthly Gilt- Fixed Short Child Care Plan Index FundFund Income Treasury Maturity Term

Plan 1 Year Plan Plan Gift Plan Study PlanPlus Plan



Trustee Fees 0.05 0.05 0.04 0.05 0.05 0.05 0.01 0.05

Custodian Fees 0.30 0.20 0.04 0.05 0.04 0.16 0.10 0.10

Advertising, Marketing & Selling Expenses 0.47 0.20 0.02 0.03 0.02 0.08 0.04 0.15 **


Transaction Costs 0.05 - - - - - - -

Audit Fees 0.01 0.01 - 0.01 0.01 0.01 0.01 0.05

Cost related to Investor communications 0.08 0.12 0.02 0.01 0.02 0.12 0.08 -

Cost of funds transfer 0.05 0.14 - 0.01 - 0.10 0.10 0.05

Cost of providing Account Statements, 0.08 0.11 0.05 0.02 0.04 0.11 0.11 -dividend distributions, etc.

Cost of statutory advertisements 0.04 0.01 0.01 0.02 0.01 0.05 0.01 -

Other Expenses 0.04 0.04 0.02 0.02 0.01 0.45* 0.44* 0.05


* Includes insurance premium payable under Child Care Plan.

** Includes Cost related to investor communication, A/c. Statement, dividend distribution and Statutory advertisement.


54


Description Prudential Long Term Sweep Flexible Dynamic SPIcE Floating FlexibleICICI Power Plan Plan Income Plan Plan Rate Plan Income

Plus Plan



Trustee Fees 0.05 0.05 0.05 0.05 0.02 0.01 0.05 0.05

Custodian Fees 0.20 0.15 0.04 0.02 0.15 0.05 0.02 0.02

Advertising, Marketing & Selling Expenses 0.47 0.25 0.02 0.30 0.45 0.17 0.07 0.30


Transaction Costs 0.00 0.05 0.00 0.00 0.05 0.00 0.00 0.00

Audit Fees 0.01 0.01 0.00 0.01 0.01 0.01 0.01 0.01

Cost related to Investor communications 0.12 0.04 0.05 0.06 0.05 0.03 0.03 0.06

Cost of funds transfer 0.14 0.025 0.00 0.00 0.05 0.00 0.00 0.00

Cost of providing Account Statements, 0.11 0.025 0.08 0.00 0.05 0.03 0.00 0.00dividend distributions, etc.

Cost of statutory advertisements 0.01 0.025 0.02 0.00 0.05 - 0.00 0.00

Other Expenses 0.04 0.025 0.20 0.00 0.04 0.03 0.06 0.00


Actual Recurring Expenses as on August 31, 2003 are as under:

(% Per annum of average net assets)

Description Growth Plan Income Plan

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till 31.08.03) (till 31.08.03) @ @



Trustee Fees 0.01 0.00 0.01 0.01 0.01 0.00 0.00 0.01

Custodian Fees 0.02 0.04 0.10 0.19 0.00 0.01 0.02 0.03


Bank Charges 0.02 0.04 0.01 0.01

Postal and Mailing Expenses 0.01 0.01 0.01 0.01 0.00 - - -

Brokerage 0.27 0.61 0.16 - 0.39 0.57 0.33 0.23

Advertisement/ Marketing / 0.28 0.43 0.76 0.87 0.04 0.17 0.15 0.26Printing expenses

Audit Fees 0.00 0.01 0.00 - 0.00 - - -

Other Expenses (including 0.55 0.01 0.10 0.02 0.42 0.03 0.03 0.02expenses as permitted under theRegulations)


* Unaudited

@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan for theperiod ended March 31, 2003 is 1.59% and 1.02% respectively and for the period ended August 31, 2003 is 1.59% and1.10% respectively.


55

% Per annum of average net assets

Description Liquid Plan FMCG Fund

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001

(till 31.08.03)@ @ (till 31.08.03)



Trustee Fees 0.00 0.00 0.00 - 0.02 0.01 0.01 0.01

Custodian Fees 0.00 0.01 0.02 0.03 0.02 0.04 0.12 0.19


Bank Charges 0.00 0.01 - - 0.00 0.10 - -

Postal and Mailing Expenses 0.00 0.00 - 0.01 0.03 0.04 0.04 0.05

Brokerage 0.00 0.31 0.16 0.12 0.20 0.24 0.22 0.16


Audit Fees 0.00 0.00 - - 0.00 0.03 0.02 0.04

Other Expenses (including expenses 0.10 0.02 0.02 0.01 0.16 0.00 0.16 0.10as permitted under the Regulations)


* Unaudited.


Note: 1) Prudential ICICI Income Plan, Prudential ICICI Growth Plan and Prudential ICICI Liquid Plan were launched in June1998.

2) Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


Description Tax Plan Gilt Fund - Treasury Plan Gilt Fund - Investment Plan

*2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000-2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002 2001

(till (till (till31.08.03) 31.08.03) 31.08.03)

Investment management & 1.25 1.25 1.25 1.25 0.45 0.56 0.75 0.75 0.40 0.52 0.75 0.75 Advisory fees

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.01

Custodian Fees 0.02 0.04 0.16 0.26 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Registrar & Transfer Agent Fees 0.13 0.11 0.11 0.13 0.05 0.06 0.06 0.07 0.04 0.06 0.06 0.07

Bank Charges 0.07 0.01 - - 0.00 0.15 - - 0.01 0.03 - -

Posting & Mailing 0.11 0.04 0.08 0.06 0.00 0.01 0.01 0.03 0.00 0.00 - 0.02

Brokerages 0.23 0.15 0.12 0.01 0.19 0.09 0.12 0.01 0.29 0.39 0.24 0.04

Advertisement/ Marketing / 0.05 0.51 0.27 0.12 0.07 0.18 0.02 0.05 0.00 0.10 0.05 0.06Printing expenses

Audit Fees 0.00 0.03 0.02 0.04 0.00 0.03 0.01 0.02 0.00 0.00 - 0.01

Other Expenses (including 0.28 0.00 0.12 0.12 0.33 0.01 0.10 0.06 0.40 0.05 0.03 0.04expenses as permitted underthe Regulations)

TOTAL ANNUAL RECURRING 2.15 2.15 2.14 2.00 1.10 1.10 1.08 1.00 1.15 1.15 1.13 1.00

EXPENSES

* Unaudited


56


Description Gilt Treasury Balanced Fund Technology FundOne YearPlus Plan

2002- 2001- *2003-2004 2002- 2001- 2000- *2003-2004 2002- 2001- 2000-2003 2002 (till 31.08.03) 2003 2002 2001 (till 31.08.03) 2003 2002 2001

Investment management & Advisory fees 0.25 0.25 1.17 1.14 1.12 1.07 1.22 1.17 1.16 1.08

Additional Fees (if any) - - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.02 - 0.01 0.01 0.01 0.01 0.04 0.02 0.03 0.02

Custodian Fees - - 0.01 0.03 0.09 0.14 0.02 0.04 0.11 0.19

Registrar & Transfer Agent Fees 0.03 0.02 0.08 0.10 0.10 0.10 0.11 0.11 0.11 0.11

Bank Charges - - 0.05 0.05 - - 0.01 0.08 - -

Posting & Mailing - 0.01 0.02 0.02 0.03 0.01 0.00 0.11 0.09 0.01

Brokerages - - 0.45 0.59 0.45 0.26 0.56 0.49 0.37 0.08

Advertisement/ Marketing / Printing expenses - 0.02 0.00 0.39 0.46 0.61 0.10 0.38 0.48 0.80

Audit Fees - - 0.00 0.01 0.01 - 0.00 0.01 0.01 -

Other Expenses (including expenses as - - 0.58 0.00 0.03 0.05 0.41 0.01 0.06 0.03 permitted under the Regulations)

TOTAL ANNUAL RECURRING EXPENSES 0.30 0.30 2.37 2.34 2.30 2.25 2.47 2.42 2.41 2.32

* Unaudited

Note: Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


Description Monthly Income Plan Fixed Maturity Plan Quarterly Series 1

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003@ 2001-2002 2000-2001(till 31.08.03) (till 31.08.03) @



Trustee Fees 0.01 0.00 0.00 0.00 0.02 0.00 0.01 0.00

Custodian Fees 0.01 0.01 0.03 0.03 0.01 0.00 0.02 0.02


Bank Charges 0.03 0.06 0.00 0.00 0.00 0.00 0.00 0.00

Posting & Mailing Exp. 0.01 0.00 0.01 0.00 0.00 0.01 0.01 0.00

Brokerages 0.41 0.17 0.34 0.38 0.00 0.09 0.21 0.13

Advertisement/ Marketing / 0.16 0.19 0.18 0.03 0.00 0.17 0.03 0.10

Printing expenses

Audit Fees 0.00 0.00 0.01 0.01 0.00 0.02 0.00 0.00

Other Expenses (including 0.15 0.02 0.10 0.12 0.09 0.02 0.00 0.02expenses as permitted underthe Regulations)


* Unaudited.



57


Description Fixed Maturity Plan Half yearly Series 1 Fixed Maturity Plan Yearly Series 1

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till 31.08.03) (till 31.08.03)



Trustee Fees 0.02 0.01 0.01 - 0.02 0.01 0.01 -

Custodian Fees 0.00 0.01 0.02 0.01 0.00 0.01 0.01 0.01


Bank Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00


Brokerages 0.00 0.17 0.14 0.09 0.00 0.19 0.19 0.09


Audit Fees 0.00 0.02 0.01 0.07 0.00 0.01 0.01 0.02



* Unaudited


Description Fixed Maturity Plan Quarterly Series 2 Fixed Maturity Plan Quarterly Series 3

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till 31.08.03) (till 31.08.03)



Trustee Fees 0.01 0.03 0.00 0.00 0.01 0.01 0.02 0.00

Custodian Fees 0.00 0.01 0.02 0.02 0.00 0.01 0.02 0.02


Bank Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00


Brokerages 0.24 0.16 0.23 0.10 0.22 0.08 0.16 0.19


Audit Fees 0.00 0.02 0.00 0.03 0.00 0.01 0.00 0.01



* Unaudited

First series of each Plan of Prudential ICICI Fixed Maturity Plan was launched on December 20, 2000

Note: Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


58


Description Fixed Maturity Plan - Fixed Maturity Plan- Fixed Maturity Plan-Half Yearly Series 2 Yearly Series 2 Yearly Series 3

*2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000- *2003- 2002- 2001-2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002(till (till (till

31.08.03) 31.08.03) 31.08.03)

Investment management & 0.23 0.26 0.25 0.25 0.30 0.30 0.30 0.30 0.18 0.16 0.10Advisory fees

Additional Fees (if any) - - - - - - - - - - -

Trustee Fees 0.01 0.01 0.00 0.00 0.02 0.05 0.01 0.00 0.01 0.00 0.00

Custodian Fees 0.00 0.00 0.01 0.00 0.00 0.01 0.01 0.00 0.01 0.01 0.01

Registrar & Transfer Agent Fees 0.06 0.07 0.04 0.00 0.03 0.03 0.04 0.14 0.02 0.02 0.05

Bank Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Posting & Mailing Exp. 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.14

Brokerages 0.04 0.13 0.21 0.01 0.16 0.17 0.22 0.12 0.13 0.09 0.08

Advertisement/ Marketing / 0.00 0.01 0.03 0.04 0.00 0.02 0.01 0.00 0.00 0.18 0.21Printing expenses

Audit Fees 0.00 0.07 0.01 0.25** 0.00 0.01 0.01 0.04 0.00 0.00 0.01

Other Expenses (including 0.17 0.00 0.00 0.00 0.09 0.01 0.00 0.00 0.25 0.02 0.00expenses as permitted underthe Regulations)

Total Annual Recurring 0.55 0.55 0.55 0.55 0.60 0.60 0.60 0.60 0.60 0.60 0.60Expenses

** Units for Series 2 of Fixed Maturity Plan-Half Yearly Option was allotted on March 22, 2001 and actual amount of auditfee paid in the financial year 2000-2001 was Rs.735.00.

* Unaudited


Description Fixed Maturity Plan- Yearly Series 4 Child Care Plan – Gift Plan Child Care Plan – Study Plan

*2003-2004 2002-2003 2001-2002 *2003-2004 2002-2003 2001-2002 *2003-2004 2002-2003 2001-2002(till (till (till

31.08.03) 31.08.03) 31.08.03)

Investment management & 0.33 0.30 0.30 1.25 1.25 1.25 1.25 1.25 1.25Advisory fees

Additional Fees (if any) - - - - - - - - -

Trustee Fees 0.01 0.01 0.00 0.01 0.00 0.00 0.01 0.00 0.00

Custodian Fees 0.00 0.00 0.00 0.01 0.02 0.09 0.00 0.01 0.02

Registrar & Transfer 0.01 0.03 0.05 0.11 0.10 0.11 0.11 0.10 0.08Agent Fees

Bank Charges 0.00 0.00 0.00 0.06 0.01 0.00 0.01 0.01 0.00

Posting & Mailing Exp. 0.04 0.00 0.00 0.10 0.05 0.05 0.00 0.00 0.00

Brokerages 0.00 0.14 0.19 0.06 0.15 0.11 0.00 0.03 0.00

Advertisement/ Marketing / 0.00 0.10 0.03 0.20 0.39 0.29 0.05 0.07 0.02Printing expenses

Audit Fees 0.00 0.02 0.03 0.00 0.03 0.07 0.00 0.02 0.07

Other Expenses (including 0.21 0.00 0.00 0.20 0.00 0.03 0.07 0.01 0.06expenses as permittedunder the Regulations)

Total Annual Recurring 0.60 0.60 0.60 2.00 2.00 2.00 1.50 1.50 1.50Expenses

* Unaudited


59


Description Short Term Plan FMP Yearly 5 Long Term Plan Sweep Plan

*2003- 2002- 2001- *2003- 2002 2001- *2003- 2002- 2001- *2003- 2002- 2001-2004 2003@ 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002(till (till (till (till

31.08.03) @ 31.08.03) 31.08.03) 31.08.03)

Investment management & 0.39 0.45 0.74 0.30 0.30 0.30 0.45 0.44 0.70 0.45 0.48 0.74Advisory fees

Additional Fees (if any) - - - - - - - - - - - -

Trustee Fees 0.01 - - 0.10 0.01 - 0.01 - - 0.01 - -

Custodian Fees 0.01 0.01 0.01 0.01 0.01 - 0.01 0.01 - - - -

Registrar & Transfer Agent Fees 0.03 0.04 0.04 0.04 0.02 - - - - - - -

Bank Charges - 0.01 - - - - - -

Posting & Mailing Exp. - - - - - - - 0.02 - - - -

Brokerages 0.23 0.40 0.13 0.03 0.24 0.18 0.07 0.09 - - - -

Advertisement/ Marketing / - 0.08 0.05 - 0.02 0.05 - 0.03 0.01 - 0.43 0.32Printing expenses

Audit Fees - - 0.01 0.01 - 0.07 - - 0.09 - 0.11 0.19

Other Expenses (including expenses 0.23 0.01 0.02 0.11 - - 0.06 0.01 - 0.54 0.01 - as permitted under the Regulations)

Total Annual Recurring Expenses 0.90 1.00 1.00 0.60 0.60 0.60 0.60 0.60 0.80 1.00 1.03 1.25

* Unaudited



Description Index Plan FMP FMP Flexible Dynamic FMPYearly 6 Yearly 7 Income Plan Yearly

Plan 8

*2003- 2002- 2001- *2003- 2002- *2003- 2002- *2003- 2002- *2003- 2002- 2002-2004 2003 2002 2004 2003 2004 2003 2004 2003 2004 2003 2003(till (till (till (till (till

31.08.03) 31.08.03) 31.08.03) 31.08.03) 31.08.03)

Investment management & 0.40 0.49 0.70 0.25 0.25 0.25 0.25 0.40 0.40 1.00 1.00 -Advisory fees

Additional Fees (if any) - - - - - - - - - - - -

Trustee Fees 0.01 0.01 - 0.02 - 0.01 - 0.01 - 0.01 - -

Custodian Fees 0.10 0.05 - 0.01 0.01 - - - - 0.02 0.02 -

Registrar & Transfer Agent Fees 0.24 0.32 0.07 0.03 0.02 0.02 0.02 0.01 0.01 0.11 0.15 0.10

Bank Charges - 0.01 - - - - 0.01 0.02 0.09 0.04 -

Posting & Mailing Exp. - - - - - - - - - 0.01 - -

Brokerages 0.12 0.19 - - 0.30 - 0.10 0.23 0.38 0.26 0.59 -

Advertisement/ Marketing / 0.19 0.15 0.41 - 0.02 - 0.13 0.02 0.18 0.21 0.18 0.49Selling expenses

Audit Fees - 0.02 0.07 - - - 0.10 - - - 0.01 -

Other Expenses (including 0.19 0.01 - 0.29 - 0.32 - 0.32 0.01 0.29 0.01 0.01expenses as permitted underthe Regulations)

Total Annual Recurring 1.25 1.25 1.25 0.60 0.60 0.60 0.60 1.00 1.00 2.00 2.00 0.60Expenses

* Unaudited


60


Description Floating Rate Plan FMP Yearly - 12 SPIcE FlexibleIncome

Plus Plan

*2003-2004 2002-2003 *2003-2004 2002-2003@ *2003-2004 2002-2003 *2003-2004(till 31.08.03) (till 31.08.03) @ (till 31.08.03) (till 31.08.03)

Investment management & 0.32 0.45 0.22 0.19 0.40 0.40 0.40Advisory fees

Additional Fees (if any) - - - - - - -

Trustee Fees 0.12 - 0.01 - - - -

Custodian Fees - - 0.01 - 0.02 0.02 -

Registrar & Transfer Agent Fees 0.07 0.10 0.01 0.01 0.13 0.23 0.01

Bank Charges 0.06 - - - - - -

Posting & Mailing Exp. - - - - - - -

Brokerages 0.06 0.01 0.06 0.10 - - -

Advertisement/ Marketing / 0.04 0.16 - - 0.10 0.08 -Printing expenses

Audit Fees - 0.02 - 0.11 0.00 0.04 -

Other Expenses (including 0.08 - 0.25 - 0.15 0.03 0.09expenses as permitted underthe Regulations)

Total Annual Recurring 0.75 0.74 0.56 0.41 0.80 0.80 0.50Expenses

* Unaudited


ii. Condensed Financial Information:

Condensed Financial Information for the year ended March 31, 2001.

Premier Power Growth Income Liquid FMCG

Historical Per Unit Statistics

Date of Allotment February 7, 1994 October 1, 1994 July 9, 1998 July 9, 1998 June 24, 1998 March 31, 1999

NAV at the beginning of

the year (Rs.)

Growth Option 11.93 20.48 31.14 12.54 11.7855 11.28

Dividend Option - - 18.10 10.26 11.7855 10.29

Net Income per unit (0.53) (7.28) (5.72) 1.18 0.99 (1.04)

Dividends - - 1.20 1.1358@ 1.0278@ -

Transfer to Reserves - - - - - -

Compounded Annualised 1.32% 0.34% 23.19% 12.68% 9.71% -4.83%

Returns (Based on NAVs of

Growth Option)

Benchmark Index Nifty Nifty Nifty N.A N.A CNX FMCG

Benchmark Index Returns # # # # # # 6.74% N.A N.A -8.80%

Net Assets end of 56.58 34.34 327.62 2078.18 956.84 61.37

period (Rs.crore)

NAV at the end of the period 10.10## 10.22

Growth Option - - 17.67 13.85 12.9252 9.06

Dividend Option - - 9.27 10.21 11.8316 8.30

Ratio of Recurring Exps to 2.50% 2.50% 2.27% 1.64% 0.98% 2.00%

Net Assets


61

Tax Plan Gilt Gilt Balanced Technology Monthly Treasury Investment Fund Fund Income Plan


Date of Allotment August 19, August 19, August 19, November 03, March 3, November 10,1999 1999 1999 1999 2000 2000.

NAV at the beginning of the year (Rs.)

Growth Option 20.10 10.9598 11.1684 12.92 8.74 #

Dividend Option 14.61 10.3667 10.4637 11.98 8.74 #

Net Income per unit (4.22) 1.70 1.24 (2.83) (5.18) 0.39

Dividends - 1.0173@ 1.1370@ - - 0.4520@


Compounded Annualised Returns 2.03% 12.28% 14.84% -12.21% -64.27% 5.50%*(Based on NAVs of Growth Option)

Benchmark Index Nifty N.A N.A Nifty E.T Mindex N.A

Benchmark Index Returns -9.34% N.A N.A -9.76% -74.84% N.A

Net Assets end of period (Rs. Crore) 55.14 90.46 190.63 237.35 178.94 72.78

NAV at the end of the period

Growth Option 10.33 12.0590 12.5063 8.32 3.30 10.5504

Dividend Option 7.54 10.3315 10.5267 7.69 3.30

Monthly Option 10.0910

Quarterly Option 10.1817

Half Yearly Option 10.1823

Ratio of Recurring Exps to Net Assets 2.00% 1.00% 1.00% 2.25% 2.32% 2.00%

Fixed Fixed Fixed Fixed Fixed Fixed FixedMonthly Monthly Monthly Monthly Monthly Monthly Monthly

Plan - Plan – Plan – Plan – Plan – Plan – Plan –Quarterly Half Yearly Yearly Quarterly Quarterly Half Yearly Yearly

Series 1 Series 1 Series 1 Series 2 Series 3 Series 2 Series 2


Date of Allotment December 20. December 20, December 20, January 22, February 20, March 22, March 22,2000 2000 2000 2001 2001 2001 2001


Growth Option # # # # # # #

Dividend Option # # # # # # #

Net Income per unit 0.1746 0.23 0.28 0.17 0.09 0.01 0.02

Dividends 0.6053@ 0.3666@ - - - - -

Transfer to Reserves - - - - - - -

Compounded Annualised Returns 3.05%* 2.80%* 3.35%* 1.81%* 1.02%* 0.09%* 0.36%*(Based on NAVs of Growth Option)

Benchmark Index N.A N.A N.A N.A N.A N.A N.A

Benchmark Index Returns N.A N.A N.A N.A N.A N.A N.A

Net Assets end of period (Rs. Crore) 130.74 2.51 10.06 9.75 80.94 3.26 95.08


Growth Option 10.3045 10.2803 10.3352 10.1812 10.1020 10.0093 10.0356

Dividend Option 10.0643 10.2803 10.3352 10.1812 10.1020 10.0093 10.0356

Ratio of Recurring Exps to Net Assets 0.50% 0.55% 0.60% 0.50% 0.50% 0.55% 0.60%

Notes:

The figures for Prudential ICICI Monthly Income Plan and Prudential ICICI Fixed Maturity Plan are for the period from the dateof opening of the scheme.

Returns since inception are for the growth plan in each case.

In the absence of appropriate benchmarks for the schemes having debt as well as equity components, Nifty has been used asthe benchmark index for the time being.

While arriving at Net Income per unit, Income Equalisation Reserve has not been considered and it is calculated on the basisof closing units.


62

* Prudential ICICI Fixed Maturity Plan and Prudential ICICI Monthly Income Plan have not completed one year since the dateof their launch. Returns are computed in absolute terms and for Growth Options only from the date of allotment. The NAVon the date of allotment is taken as Rs.10 for computation of returns.

@ Including distribution tax.

# These schemes were launched during the year and were not in existence at the beginning of the year.

## Dividend was declared under ICICI Premier for all the unitholders as on July 25, 1995 @Rs. 0.80 per unit. For computationof returns NAV of ICICI Premier has been considered after adjusting the dividend declaration.

### As these schemes were launched before the launch of Nifty, benchmark index returns are not provided.

b. Condensed Financial Information for the year ended March 31, 2002:

Premier Power Growth Income Liquid FMCG


Date of Allotment February 7, 1994 October 1, 1994 July 9, 1998 July 9, 1998 June 24, 1998 March 31, 1999


Growth Option 10.10 10.22 17.67 13.85 12.9252 9.06

Dividend Option - - 9.27 10.21 11.8316 8.30

Net Income per unit 0.82 (2.37) (1.91) 1.85 1.06 (2.15)

Dividends - - 0.80 @1.5428 @0.8994 -


Compounded Annualised Returns 2.82% 2.39% 20.40% 13.83% 9.21% -4.24%

(Based on NAVs of Growth Option)

Benchmark Index Nifty Nifty Nifty N.A N.A CNX FMCG

Return compared to Benchmark Index # # # # # # 4.43% N.A N.A -7.43%

Net Assets end of period (Rs.crore) 51.08 29.87 350.22 2711.89 1372.62 53.60


Growth Option ##11.54 11.94 19.98 16.21 13.9383 8.78

Dividend Option - - 9.71 10.33 11.8273 8.05


Tax Plan Gilt Treasury Gilt Balanced Technology Monthly Gilt TreasuryInvestment Fund Fund Income Plan 1 Year Plus Plan


Date of Allotment August 19, August 19, August 19, November 03, March 3, November 10, April 30,1999 1999 1999 1999 2000 2000. 2001.

NAV at the beginning ofthe year (Rs.)Growth Option 10.33 12.0590 12.5063 8.32 3.30 10.5504 #Dividend Option 7.54 10.3315 10.5267 7.69 3.30Monthly Option - - - - - 10.0910 -Quarterly Option - - - - - 10.1817 -Half Yearly Option - - - - - 10.1823 -Net Income per unit (0.30) 1.92 2.20 (0.85) (1.81) 0.97 0.87DividendsDividend Option - @1.2452 @2.5897 - - - @0.8321Monthly option - - - - - @1.0230 -Quarterly option - - - - - @1.0800 -Half Yearly Option - - - - - @1.0965 -Transfer to Reserves - - - - - - -Compounded Annualised 10.55% 12.23% 20.06% -3.01% -41.80% 12.44% 8.69%*Returns (Based on NAVs ofGrowth Option)Benchmark Index Nifty N.A N.A Nifty ET Mindex N.A N.AReturn compared to Benchmark -6.45% N.A N.A -6.45% -51.05% N.A N.AIndexNet Assets end of 72.46 80.58 466.50 189.52 160.09 123.58 185.93period (Rs. Crore)NAV at the end of the periodGrowth Option 13.00 13.5238 16.1344 9.29 3.25 11.7643 -Dividend Option 9.48 10.2799 10.8319 8.58 3.25 - 10.0213Monthly Option - - - - - 10.1792 -Quarterly Option - - - - - 10.2228 -Half Yearly Option - - - - - 10.2187 -Ratio of Recurring Exps to 2.14% 1.08% 1.13% 2.30% 2.41% 2.00% 0.30%Net Assets


63

Fixed Fixed Fixed Fixed FixedMaturity Plan - Maturity Plan – Maturity Maturity Plan - Maturity Plan –

Quarterly 1 Half Yearly 1 Plan –Yearly 1 Quarterly 2 Quarterly 3


Date of Allotment December 20. 2000 December 20, 2000 December 20, 2000 January 22, 2001 February 20, 2001


Growth Option 10.3045 10.2803 10.3352 10.1812 10.1020

Dividend Option 10.0643 10.2803 10.3352 10.1812 10.1020

Net Income per unit 32.49 2.48 1.05 4.17 2.05

Dividends @0.8781 @0.9015 @1.0473 @0.8543 @0.9234

Transfer to Reserves - - - - -

Compounded Annualised Returns 9.34% 9.27% 9.77% 8.69% 9.49(Based on NAVs of Growth Option)

Benchmark Index N.A N.A N.A N.A N.A

Return compared to Benchmark Index N.A N.A N.A N.A N.A

Net Assets end of period (Rs. Crore) 3.52 10.22 8.65 17.71 16.92


Growth Option 11.2079 11.1988 11.2644 11.0390 11.0555

Dividend Option 10.0378 10.2373 10.1970 10.1450 10.0855

Ratio of Recurring Exps to Net Assets 0.51% 0.55% 0.60% 0.54% 0.53%

Fixed Fixed Fixed FixedMaturity Plan – Maturity Plan – Maturity Plan – Maturity Plan –

Half Yearly 2 Yearly 2 Yearly 3 Yearly 4


Date of Allotment March 22, 2001 March 22, 2001 June 21, 2001 September 20, 2001


Growth Option 10.0093 10.0356 # #

Dividend Option 10.0093 10.0356 # -

Net Income per unit 0.5520 0.99 0.67 0.39

Dividends @0.7765 @0.9231 - -

Transfer to Reserves - - - -

Compounded Annualised Returns 8.15% 10.03% 6.75%* 4.38%*(Based on NAVs of Growth Option)

Benchmark Index N.A N.A N.A N.A

Return compared to Benchmark Index N.A N.A N.A N.A

Net Assets end of period (Rs. Crore) 0.16 102.28 7.80 6.36


Growth Option 10.8363 11.0292 10.6753 10.4381

Dividend Option 10.0388 10.0110 10.6753 10.4381

Ratio of Recurring Exps to Net Assets 0.55% 0.60% 0.60% 0.60%


64

Child Care Plan- Child Care Plan- Short term Fixed MaturityGift option Study option Plan Plan – Yearly 5


Date of Allotment August 31, 2001 August 31, 2001 October 25, 2001 March 22, 2002


Growth Option # # # #

Dividend Option - - - -

Net Income per unit 0.45 0.50 0.33 0.01

Dividends - - 0.3430@ -

Transfer to Reserves - - - -

Compounded Annualised Returns 11.60%* 8.90%* 3.92%* 0.35%*(Based on NAVs of Growth Option)

Benchmark Index Nifty N.A N.A N.A

Return compared to Benchmark Index 7.19 N.A N.A N.A

Net Assets end of period (Rs. Crore) 7.38 7.85 418.32 85.40


Growth Option 11.16 10.89 10.3915 10.0354

Dividend Option - - 10.0433 -

Ratio of Recurring Exps to Net Assets 2.00% 1.50% 1.00% 0.60%

Index Fund Long term Plan Sweep Plan


Date of Allotment February 26, 2002 March 28, 2002 March 6, 2002


Growth Option 10.0000 10.0000 10.0000

Dividend Option - - -

Net Income per unit 0.01 0.01 0.03

Dividends - - -

Transfer to Reserves - - -

Compounded Annualised Returns (Based on NAVs of Growth Option) -4.80%* 0.10%* 0.52%*

Benchmark Index Nifty N.A N.A

Return compared to Benchmark Index -5.03% N.A N.A

Net Assets end of period (Rs. Crore) 7.73 50.05 5.31


Growth Option 9.52 10.0096 10.0520

Dividend Option - - -

Ratio of Recurring Exps to Net Assets 1.25% 0.80% 1.25%

Notes:

Returns since inception are for the growth plan in each case except for Prudential ICICI Gilt Fund – One Year Plus Plan in whichGrowth Option is not available.

From current year, while arriving at Net Income per unit, Income Equalisation Reserve and marked to market has not beenconsidered and it is calculated on the basis of closing units as on March 31, 2002.

The Compounded annualized returns of each scheme are computed from inception of the Scheme till the end of the periodof the respective condensed financial information whereas the returns compared to benchmark index are computed for thefinancial year.

* Prudential ICICI Fixed Maturity Plan- Yearly 3,4 &5, Prudential ICICI Gilt Treasury 1 Year Plus Plan, Prudential ICICI ChildCare Plan – Gift Plan & Study Plan, Prudential ICICI Short Term Plan, Prudential ICICI Long Term Plan, Prudential ICICISweep Plan and Prudential ICICI Index Fund have not completed one year since the date of their launch. Returns arecomputed in absolute terms and for Growth Options only from the date of allotment. The NAV on the date of allotmentis taken as Rs.10 for computation of returns.

@ Including distribution tax.

# These Schemes were launched during the year and these schemes were not in existence at the beginning of the year.

## Dividend was declared under ICICI Premier for all the unitholders as on July 25, 1995 @Rs. 0.80 per unit. For computationof returns NAV of ICICI Premier has been considered after adjusting the dividend declaration.

### As these schemes were launched before the launch of Nifty, Benchmark index returns are not provided.


65

c. Condensed Financial Information for the period ended March 31, 2003.

Premier Power Growth Income Liquid FMCG Tax Plan Gilt Treasury


Date of Allotment February 7, October 1, July 9, July 9 June 24, March 31, August 19, August 19,1994 1994 1998 1998 1998 1999 1999 1999

NAV at the beginning of the year (Rs.) - - - - - - -

NAV at the beginning of the year (Rs.) 11.54 11.94

Growth Option 19.98 16.21 13.9383 8.78 13.00 13.5238

Dividend Option - - 9.71 10.33 11.8273 8.05 9.48 10.2799

Net Income per unit 1.70 1.22 (0.30) 1.56 0.87 0.25 0.83 1.46

Dividends - 2.70 - 0.45 0.7558 - - 0.1910

Transfer to Reserves - - - - - - - -

Compounded Annualised Returns 3.41% 2.96% 13.26% 13.28% 8.68% -8.04% 3.79% 10.51%(Based on NAVs of Growth Option)

Benchmark Index Crisil Nifty Nifty Crisil Crisil CNXFMCG Nifty I-SecBalanced Composite Liquid Si-Bex

fund Index Bond fund fund Index

Return compared to Benchmark Index @ @ 3.30% 0.44% 0. 64% 5.60% 1.56% -1.60%

Net Assets end of period (Rs.crore) 15.70 31.68 275.91 3173.49 1544.91 33.47 24.14 34.50

NAV at the end of the period (Rs.) 12.50 - - - - - - -

Growth Option - 12.81 18.02 18.0347 14.8729 7.15 11.44 14.3534

Dividend Option - 10.28 8.76 11.0188 11.8419 6.56 8.34 10.7122

Monthly Option - - - - 11.8699 - - -

Institutional Option Growth - - - 18.0374 14.8760 - - -

Institutional Option Dividend - - - 11.0196 11.8419 - - -

Ratio of Recurring Exps to Net Assets - 2.50% 2.47% 2.33% 1.59% 0.99% 2.05% 2.15% 1.10%Regular Plan -Annualised

Ratio of Recurring Exps to Net Assets-

Institutional Plan- Annualised - 1.10% 0.75%


66

Gilt Balanced Technology Monthly Fixed Fixed Fixed GiltInvestment Fund Fund Income Plan Maturity Maturity Maturity Treasury

Plan - Qtly 1 Plan – Half Plan – 1 Year Yearly 1 Yearly 1 Plus Plan***


Date of Allotment August November March 3, November December 20, December December April 30,19, 1999 03, 1999 2000 10, 2000 2000 20, 2000 20, 2000 2001

NAV at the beginning ofthe year (Rs.)

Growth Option 16.1344 9.29 3.25 11.7643 11.2079 11.1988 11.2644 -

Dividend Option 10.8319 8.58 3.25 - 10.0378 10.2373 10.1970 10.0213

Monthly Option - - - 10.1792 - - -

Quarterly Option - - - 10.2228 - - - -

Half Yearly Option - - - 10.2187 - - - -

Net Income per unit 1.88 0.68 (0.35) 1.02 0.14 5.90 13.82 N.A.

Dividends 0.4320 - - - - - -

Monthly option - - - 0.6692 - - - -

Quarterly option - - - 0.6963 - - - -

Half-Yearly Option - - - 0.7346 - - - -


Compounded AnnualisedReturns (Based on NAVs of 17.56% -1.90% -34.50% 10.69% 7.99% 7.97% 8.27% -Growth Option)

Benchmark Index I –Sec Crisil ET Crisil MIP $ $ $ —Si-Bex Balanced MINDEX Blended

Fund Index Index

Return compared to 2.65% 4.95% 6.58% 1.60% # # # —Benchmark Index

Net Assets end of period 457.20 153.86 111.25 275.36 34.98 0.51 0.43 -(Rs. Crore)


Growth Option 17.9508 9.37 2.72 12.7427 11.9131 11.9083 11.9840 -

Dividend Option 11.5832 8.65 2.72 - 10.6695 10.8855 10.8482 -

Monthly Option - - - 10.3323 - - - -


Half Yearly Option - - - 10.3177 - - - -

Institutional Option – - 10.6701 - - -

Ratio of Recurring Exps to 1.15% 2.34% 2.42% 1.58% 0.55% 0.55% 0.60% 0.30%Net Assets

Ratio of Recurring Exps to 0.25%Net Assets- Institutional Plan-

Annualised


67

Fixed Fixed Fixed Fixed Fixed Fixed Child Care Child Care Short TermMaturity Maturity Maturity Maturity Maturity Maturity Plan- Plan- Plan

Plan - Plan – Plan – Plan – Plan – Plan - Gift StudyQuarterly 2 Quarterly 3 Half Yearly 2 Yearly 2 Yearly 3 Yearly 4 Option Option

Historical Per UnitStatistics

Date of Allotment January 22, February 20, March 22, March 22, June 21, Sept 20, August 31, August 31, October 25,2001 2001 2001 2001 2001 2001 2001 2001 2001

NAV at the beginning 11.16 10.89of the year (Rs.)

Growth Option 11.0390 11.0555 10.8363 11.0292 10.6753 10.4381 10.3915

Dividend Option 10.1450 10.0855 10.0388 10.0110 10.6753 10.4381 - - 10.0433

Net Income per unit 3.00 1.69 2.25 0.61 0.69 269.99 0.20 0.57 1.14

Dividends 0.1847 0.1788 - - - - - - 0.0924

Transfer to Reserves - - - - - - - - -

Compounded Annualised 7.68% 7.86% 6.84% 8.44% 8.22% 7.48% 4.16% 8.76% 8.47%Returns (Based on NAVsof Growth Option)

Benchmark Index $ $ $ $ $ $ Crisil Crisil MIP CrisilBalanced Blended Composite

Fund Index Index Bond Fund

Return compared to $ $ $ $ $ $ -0.76% -1.88% -2.49%Benchmark Index

Net Assets end of 0.92 5.51 0.04 10.51 20.41 0.01 10.72 12.36 1078.83period (Rs. Crore)

NAV at the end of the 10.67 11.42period

Growth Option 11. 7551 11.7293 11.4328 11.7817 11.5055 11.1635 11.2323

Dividend Option 10.6074 10.5122 10.5916 10.6939 11.5055 11.1635 - - 10.7561

Institutional Option - - - - - - - - 11.2345Growth

Ratio of Recurring Exps 0.55% 0.55% 0.55% 0.60% 0.60% 0.60% 2.00% 1.50% 1.00%to Net Assets

Ratio of Recurring Exps - - - - - - - - 0.80%to Net Assets-Institutional Plan-

Annualised


68

Fixed Index Fund Long term Sweep Plan Fixed Fixed Maturity Maturity Plan – Plan Maturity One One Year Plan –

Yearly 5 Year Plan – Series 7Series 6


Date of Allotment March 22, February 26, March 28, March 6, June 28, August, 19,2002 2002 2002 2002 2002 2002

NAV at the beginning of the year (Rs.) 9.5200 10.0520 # #

Growth Option 10.0354 10.0096

Dividend Option - - - - - -

Net Income per unit 0.85 (0.44) 0.79 0.20 0.66 0.32

Dividends - - - - - -


Compounded Annualised Returns 8.43% -15.45% 13.52% 5.15% 6.55%* 3.14%*(Based on NAVs of Growth Option)

Benchmark Index $ Nifty Crisil Crisil $ $Composite Liquid FundBond Fund Index

Return compared to Benchmark Index # 0.89% 3.16% -1.10% # #


NAV at the end of the period 8.3278 11.3634 10.5508 10.6555 10.3140

Growth Option 10.8643 - - - - -

Dividend Option 10.8643 - - - - -



Institutional Plan-Annualised - - - - - -

Fixed Maturity Flexible Dynamic SPICE Fixed Floating RatePlan – Yearly 8*** Income Plan Plan Maturity Plan

Plan –Yearly 12


Date of Allotment September 17, September 27, October 31, January 10, March 21, March 29,

2002 2002 2002 2003 2003 2003

NAV at the beginning of the year (Rs.) # # # # # #

Net Income per unit NA 0.73 (0.15) (0.04) 0.01 0.004

Dividends - - - - - -

Transfer to Reserves - - - - -

Compounded Annualised Returns Nil 7.74%* 2.80%* -9.40%* 0.19%* 0.05%*(Based on NAVs of Growth Option)

Benchmark Index $ I-Sec Si-Bex Nifty SENSEX $ CRISIL LiquidFund Index

Return compared to Benchmark Index # 4.20% 0.14% -0.16% # @@


NAV at the end of the period - 10.7745 10.2799 30.4342 10.0046

Growth Option 10.0191


Institutional Option Growth 10.0208


Ratio of Recurring Exps to Net Assets- - - - 0.20% -

Institutional Plan- Annualised


69

Notes:

1. Returns since inception are for the growth plan in each case.

2. While arriving at Net Income per unit, Income Equalisation Reserve and mark to market has not been considered and it iscalculated on the basis of closing units as of March 31, 2003.

3. The Compounded annualized returns of each scheme are computed from inception of the Scheme till the end of theperiod of the respective condensed financial information whereas the returns compared to benchmark index are computedfor the financial year.

* Fixed Maturity One Year Plan – Series 6, 7, 8, Fixed Maturity Plan – Yearly 12, Prudential ICICI Flexible Income Plan,Prudential ICICI Dynamic Plan, SENSEX Prudential ICICI Exchange Traded Fund and Prudential ICICI Floating Rate Planhave not completed one year since the date of their launch. Returns are computed in absolute terms and for GrowthOptions only from the date of allotment. The NAV on the date of allotment is taken as Rs.10 for computation ofreturns

*** All the units holders under the schemes- Prudential ICICI Gilt Fund Treasury 1 Year Plus Plan and Prudential ICICI FixedMaturity Yearly Plan Series 8 have redeemed their unit holdings and units are nil as on 31/03/03


## Dividend was declared under ICICI Premier for all the unitholders as on July 25, 1995 @Rs. 0.80 per unit. Forcomputation of returns NAV of ICICI Premier has been considered after adjusting the dividend declaration.

$ Appropriate benchmark index is not available.

@ As these schemes were launched before the launch of the respective benchmarks, Benchmark indices returns are notprovided

@@ Since the units under Scheme were allotted on March 29, 2003 the return compared to Benchmark Index detail is notprovided..


70

d. Condensed Financial Information for the period ended August 31, 2003 **.

Premier Power Growth Income Liquid FMCG Tax Plan GiltTreasury


Date of Allotment February 7, October 1, July 9, July 9, June 24, March 31, August 19, August 19,1994 1994 1998 1998 1998 1999 1999 1999

NAV at the beginning of the year (Rs.) 12.50 - - - - - - -

Growth Option - 12.81 18.02 18.0347 14.8729 7.15 11.44 14.3534

Dividend Option - 10.28 8.76 11.0188 11.8419 6.56 8.34 10.7122

Monthly Option - - - - 11.8699 - - -

Quarterly Option - - - - - - - -

Half Yearly Option - - - - - - - -

Institutional Option - Growth - - - 18.0374 14.8760 - - -

Institutional Monthly Option – Div. - - - - - - - -

Institutional Option - Dividend - - - 11.0196 11.8419 - - -

@@@ Net Income per unit 0.66 1.05 3.33 0.6670 0.2687 0.1727 3.39 0.7889

Dividends - 2.00 0.80 - - - 1.20 0.7100

Dividend Option (weekly) - - - - 0.2594 - - -

Institutional Dividend (Weekly) - - - - 0.2601 - - -

Monthly Option - - - - 0.2912 - - -


Quarterly Option -Institutional 0.2700

Half yearly Option - - - 0.6769 - - - -

Half yearly Option - Institutional - - - 0.6769 - - - -

Fortnightly Dividend Option - - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - - -

Institutional Monthly Dividend Option - - - - 0.2238 - - -

Institutional Daily Dividend Option - 0.2606 - -

Dividend Option Daily - 0.2481 - -


Compounded Annualised Returns 4.17% 8.54% 21.25% 13.52% 8.40% 0.52% 19.93% 10.89(Based on NAVs of Growth Option)

Benchmark Index Crisil Nifty Nifty Crisil Crisil CNX FMCG Nifty I-SecBalanced Composite Liquid Si-Bex

fund Index Bond fundfund Index

Index

Return compared to Benchmark Index @ @ 10.48% 0.24% 0.23% 12.20% 43.38% 0.71%

Net Assets end of period (Rs.crore) 15.25 289.65 374.39 3,901.56 3,051.94 39.48 37.41 33.83

NAV at the end of the period ##13.60 - - - - - - -

Growth Option - 20.78 26.96 19.2059 15.1981 10.23 20.82 15.1741

Dividend Option - 14.34 12.17 10.0273 11.8387 9.38 13.74 10.6004

Dividend Option (Daily) - - - - 11.8508 - - -

Dividend (Fortnightly) - - - - - - - -

Monthly Option - - - - 11.8352 - - -


Half yearly Option - - - - - - - -

Institutional Option Growth - - - 19.2475 15.2168 - - -

Institutional Fortnightly Option –Dividend - - - - - - - -

Institutional Monthly Option – Dividend - - - - 11.9145 - - -

Institutional Option Dividend – Daily - - - - 11.8508 - - -

Institutional Option Dividend – Quarterly - - - 11.4816 - - - -

Institutional Option Dividend - - - 11.0503 11.8500 - - -

Ratio of Recurring Exps to Net Assets - 2.50% 2.41% 2.33% 1.59% 0.72% 2.05% 2.15% 1.10%Regular Plan -Annualised


Institutional Plan- Annualised - - - 1.10% 0.55% - - -


71

Gilt Balanced Technology Monthly Fixed Fixed FixedInvestment Fund Fund Income Maturity Maturity Maturity

Plan Plan - Qtly 1 Plan – Half Plan –Yearly 1 Yearly 1


Date of Allotment August 19, November 03, March 3, November 10, December 20, December 20, December 20,1999 1999 2000 2000 2000 2000 2000


Growth Option 17.9508 9.37 2.72 12.7427 11.9131 11.9083 11.9840

Dividend Option 10.5832 8.65 - - 10.6695 10.8855 10.8482

Monthly Option - - - 10.3323 - - -

Quarterly Option - - - 10.3550 - - -

Half Yearly Option - - - 10.3177 - - -

Institutional Option - Growth - - - - - - -

Institutional Monthly Option – Div. - - - - - - -

Institutional Option - Dividend - - - - 10.6701 - -

@@@ Net Income per unit 1.2001 1.07 (0.16) 0.4748 11.8048 3.0928 0.5758

Dividends 1.3700 - - - - 0.9947 -

Institutional Dividend 0.1692 - -

Dividend Option (weekly) - - - - - - -

Institutional Dividend (Weekly) - - - - - - -

Monthly Option - - - 0.2400 - - -


Half yearly Option - - - - - - -

Half yearly Option - Institutional - - - - - - -

Fortnightly Dividend Option - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - -

Institutional Monthly Dividend Option - - - - - - -

Institutional Daily Dividend Option - - - - - - -

Dividend Option Daily - - - - - - -


Compounded Annualised Returns 18.26% 3.81% -28.01% 11.35% 7.70% ###7.41% 7.58%(Based on NAVs of Growth Option)

Benchmark Index I –Sec Crisil ET MINDEX Crisil MIP $ $ $Li-Bex Balanced Blended Index

Fund Index

Return compared to Benchmark Index 2.42% 8.23% 21.95% -1.21% # # #

Net Assets end of period (Rs. Crore) 572.53 138.21 120.96 283.68 0.52 0.02 0.06

NAV at the end of the period 3.26

Growth Option 19.3987 11.50 13.3961 12.1362 - 12.1693

Dividend Option 11.1191 10.62 - 10.0360 11.0151

Dividend Option (Daily) - - - - - - -

Dividend (Fortnightly) - - - - - - -

Monthly Option - - - 10.6149 - - -


Half yearly Option - - - 10.8466 - - -

Institutional Option Growth - - - - - - -

Institutional Fortnightly Option –Dividend - - - - - - -

Institutional Monthly Option – Dividend - - - - - - -

Institutional Option Dividend – Daily - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - -

Institutional Option Dividend - - - - - - -

Ratio of Recurring Exps to Net Assets - 1.15% 2.36% 2.48% 1.50% 0.55% 0.55% 0.60%Regular Plan -Annualised


Institutional Plan- Annualised - - - - 0.25%a - -


72

Fixed Fixed Fixed Fixed Fixed Fixed Child Care Child CareMaturity Maturity Maturity Maturity Maturity Maturity Plan-Gift Plan-Study

Plan - Plan – Plan – Plan – Plan – Plan - Option OptionQuarterly 2 Quarterly 3 Half Yearly 2 Yearly 3 Yearly 4

Yearly 2


Date of Allotment January 22, February 20, March 22, March 22, June 21, Sept 20, August 31, August 31,2001 2001 2001 2001 2001 2001 2001 2001

NAV at the beginning of the year (Rs.) 10.67 11.42

Growth Option 11.7551 11.7293 11.4328 11.7817 11.5055 11.1635 - -

Dividend Option 10.6074 10.5122 10.5916 10.6939 - - - -

Monthly Option - - - - - - - -


Half Yearly Option - - - - - - - -

Institutional Option - Growth - - - - - - - -

Institutional Monthly Option – Div. - - - - - - - -

Institutional Option - Dividend - - - - - - - -

@@@ Net Income per unit 144.9791 N.A. 0.2265 0.2579 N.A. 0.1777 0.76 0.39

Dividends 0.0975 0.1051 - - 0.7908 - - -

Dividend Option (weekly) - - - - - - - -

Institutional Dividend (Weekly) - - - - - - - -




Half yearly Option - Institutional - - - - - - - -

Fortnightly Dividend Option - - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - - -

Institutional Monthly Dividend Option - - - - - - - -

Institutional Daily Dividend Option - - - - - - - -

Dividend Option Daily - - - - - - - -


Compounded Annualised Returns 8.48% N.A. 6.44% 7.69% N.A 6.67% 22.68% 13.63%(Based on NAVs of Growth Option)

Benchmark Index $ $ $ $ $ $ Nifty Crisil MIPBlended Index

Return compared to Benchmark Index $ $ $ $ $ $ 2.44% 2.63%

Net Assets end of period (Rs. Crore) 0.0027 N.A. 0.04 4.18 - 0.01 16.81 16.36

NAV at the end of the period - 11.3390 15.05 12.91

Growth Option 12.3611 - 11.6486 11.9844 - - - -

Dividend Option - - 10.7933 10.8774 - - - -

Dividend Option (Daily) - - - - - - - -

Dividend (Fortnightly) - - - - - - - -




Institutional Option Growth - - - - - - - -

Institutional Fortnightly Option –Dividend - - - - - - - -

Institutional Monthly Option – Dividend - - - - - - - -

Institutional Option Dividend – Daily - - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - - -

Institutional Option Dividend - - - - - - - -

Ratio of Recurring Exps to Net Assets 0.55% 0.55% 0.55% 0.60% 0.60% 0.60% 2.00% 1.50%


Institutional Plan- Annualised - - - - - - - -


73

Short Term Fixed Index Fund Long term Sweep Plan Fixed FixedPlan Maturity Plan Maturity Maturity

Plan – One Year One YearYearly 5 Plan – Plan –

Series 6 @@ Series 7


Date of Allotment October 25, March 22, February 26, March 28, March 6, July 21, August, 19,2001 2002 2002 2002 2002 2003 2002

NAV at the beginning of the year (Rs.) 8.3278 10.5508 10.6555 10.3140

Growth Option 11.2323 10.8643 - 11.3634 - - -

Dividend Option 10.7561 - - - - - -

Monthly Option - - - - - - -

Quarterly Option - - - - - - -

Half Yearly Option - - - - - - -

Institutional Option - Growth 11.2345 - - - - - -

Institutional Monthly Option – Div. - - - - - - -

Institutional Option - Dividend - - - - - - -

@@@ Net Income per unit 0.2620 0.2004 0.2001 0.5980 0.2241 1,267.3147 0.1820

Dividends - - - - - - -

Dividend Option (weekly) - - - - - - -

Institutional Dividend (Weekly) - - - - - - -

Monthly Option 0.5271 - - - - - -



Half yearly Option - Institutional - - - - - - -

Fortnightly Dividend Option 0.2619 - - - - - -

Institutional Fortnightly Dividend Option 0.2784 - - - - - -

Institutional Monthly Dividend Option 0.3065 - - - - - -

Institutional Daily Dividend Option - - - - - - -

Dividend Option Daily - - - - - - -


Compounded Annualised Returns 8.45% 7.12% 11.02% 13.92% 4.88% 6.69%* 4.78%*(Based on NAVs of Growth Option)

Benchmark Index Crisil $ Nifty Crisil Crisil $ $Short term Composite LiquidBond Fund Bond Fund Fund Index

Index

Return compared to Benchmark Index 0.48% # 1.92% 0.06% -0.21% # #

Net Assets end of period (Rs. Crore) 2,391.86 5.77 16.21 248.38 34.17 0.02 1.29

NAV at the end of the period - 11.0438 11.71 12.0441 10.7344 10.6689 10.4937

Growth Option 11.6190 - - - - - -

Dividend Option 10.5890 - - - - - -

Dividend Option (Daily) - - - - - - -

Dividend (Fortnightly) 10.6146 - - - - - -

Monthly Option - - - - - - -



Institutional Option Growth 11.6310 - - - - - -

Institutional Fortnightly Option –Dividend 10.8535 - - - - - -

Institutional Monthly Option – Dividend 10.8257 - - - - - -

Institutional Option Dividend – Daily - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - -

Institutional Option Dividend - - - - - - -

Ratio of Recurring Exps to Net Assets 1.00% 0.60% 1.25% 0.60% 1.00% 0.60% 0.60%


Institutional Plan- Annualised 0.80% - - - - - -


74

Flexible Flexible Dynamic Plan SPICE Fixed FloatingIncome Plan Income Plus Maturity Rate Plan

Plan Plan –Yearly 12


Date of Allotment September 27, May 22, October 31, January 10, March 17, March 28,2002 2003 2002 2003 2003 2003

NAV at the beginning of the year (Rs.) 10.7745 # 10.2799 30.4342 - 10.0046

Growth Option - - - - 10.0191 -


Monthly Option - - - - - -

Quarterly Option - - - - - -

Half Yearly Option - - - - - -

Institutional Option - Growth - - - - 10.0208 -

Institutional Monthly Option – Div. - - - - - -

Institutional Option - Dividend - - - - - -

@@@ Net Income per unit 0.3046 0.3669 2.2752 1.1723 0.2992 0.2494

Dividends 0.8000 - - - - -

Dividend Option (weekly) - - - - - -

Institutional Dividend (Weekly) - - - - - -



Half yearly Option - - - - - -

Half yearly Option - Institutional - - - - - -

Fortnightly Dividend Option - - - - - -

Institutional Fortnightly Dividend Option - - - - - -

Institutional Monthly Dividend Option - - - - - -

Institutional Daily Dividend Option - - - - - -

Dividend Option Daily - - - - - -


Compounded Annualised Returns *16.67% *4.36% *56.07% *28.07% *3.32% *2.17%(Based on NAVs of Growth Option)

Benchmark Index I-Sec I-Sec Nifty BSE SENSEX $ CRISILComposite Composite Liquid

Index Index Fund

Return compared to Benchmark Index -0.86% 0.15% 13.05% 2.10% # 0.18%

Net Assets end of period (Rs. Crore) 1,663.87 52.04 111.34 23.38 45.22 49.20

NAV at the end of the period 10.4360 15.6065 43.0198 - 10.2167

Growth Option 11.6666 10.3317

Dividend Option 10.8374 - - - - -

Dividend Option (Daily) - - - - - -

Dividend (Fortnightly) - - - - - -



Half yearly Option - - - - - -

Institutional Option Growth - - - - 10.3571 -

Institutional Fortnightly Option –Dividend - - - - - -

Institutional Monthly Option – Dividend - - - - - -

Institutional Option Dividend – Daily - - - - - -

Institutional Option Dividend – Quarterly - - - - - -

Institutional Option Dividend - - - - - -



Institutional Plan- Annualised - - - - 0.20% -


75

Notes:

1) Returns since inception are for the growth plan in each case.

2) While arriving at Net Income per unit, Income Equalisation Reserve and mark to market has not been considered and it iscalculated on the basis of closing units as of August 31, 2003.

3) The Compounded annualized returns of each scheme are computed from inception of the Scheme till the end of theperiod of the respective condensed financial information whereas the returns compared to benchmark index are computedfor the financial year.

* Fixed Maturity One Year Plan – Series 6, Fixed Maturity Plan – Yearly 12, Prudential ICICI Flexible Income Plan,Prudential ICICI Flexible Income Plus Plan, Prudential ICICI Dynamic Plan, SENSEX Prudential ICICI Exchange TradedFund and Prudential ICICI Floating Rate Plan have not completed one year since the date of their launch. Returns arecomputed in absolute terms and for Growth Options only from the date of allotment. The NAV on the date ofallotment is taken as Rs.10 for computation of returns

** Un-audited.

*** All the units holder under the scheme Prudential ICICI Gilt Fund Treasury 1 Year Plus Plan and Prudential ICICI FixedMaturity Quarterly Plan Series 3, Prudential ICICI Fixed Maturity Yearly Plan Series 3 & 8 have redeemed and units arenil as on 31/08/03


## Dividend was declared under ICICI Premier for all the unitholders as on July 25, 1995 @Rs. 0.80 per unit. Forcomputation of returns NAV of ICICI Premier has been considered after adjusting the dividend declaration.

### All the units holder of Growth Option under the scheme Prudential ICICI Fixed Maturity Plan Half Yearly Series I haveredeemed their units on 25/06/2003, thus returns have been calculated on the basis of the NAV of dividend optionafter adjusting for the dividend declared.

$ Appropriate benchmark index is not available.

@ As these schemes were launched before the launch of the respective benchmarks, Benchmark indices returns are notprovided

@@ All the unitholders under Prudential ICICI Fixed Maturity Plan – One Year Plus Series – 6 have redeemed their units onJuly 14, 2003 and there was fresh subscription on July 21, 2003 at Rs. 10.00, hence, simple absolute returns havebeen calculated for the period of 10 days.

@@@The Net Income per unit mentioned has excluded Income equalisation & marked to market calculated on the basisof market value of net assets of the Scheme on the valuation date, divided by the number of units outstanding onthat date. It may be noted that, as it merely indicates the net income per unit on the valuation date calculated basedupon prevailing market value of the investment of the scheme on the given date, it is subject to vary from time to timeand does not reflect any income / loss of the scheme.


76

SECTION VI

UNITHOLDERS RIGHTS & SERVICESa) Investor Services

The Fund believes in providing the investors with a superior service to make the investors’ experience in dealing with the Fundan efficient and satisfactory one. In order to achieve these goals, the Fund will endeavour to continuously establish andupgrade systems to handle transactions efficiently and resolve any investor grievances promptly.

b) Ease of Transactions

The Fund intends to make every transaction for the investor a simple and convenient one. The Fund plans to provide thefollowing services: -

i) Customer Service Centres in major metros

The AMC presently has Customer Service Centres in 5 main cities and various other cities. Over a period of time, the AMCwill endeavour to add further Customer Service Centres and/or sales offices in other cities. Unitholders can go to theseService Centres / Sales Offices for enquiries and transactions during business hours.

ii) Process transactions in a timely manner

Under the Regulations, the Fund/ the Registrar / AMC shall despatch to the Unitholders the dividend warrants withinthirty days of the date of declaration of dividend and the redemption proceeds within ten Business Days from the date ofacceptance / deemed acceptance of the request for redemption or repurchase proceeds, as the case may be.

Under normal circumstances, the Fund will endeavour to complete all monetary transactions within 3 (three) BusinessDays from the date of acceptance of a transaction request. Ordinarily, non-monetary transactions or requests will beprocessed, (with the exception of issue of Unit certificates) within 7 (seven) Business Days. Investors should note thatcompletion of monetary/ non-monetary transactions within 3 / 7 Business Days as indicated above would be done on“best efforts” basis and completion of all such transactions are subject to the time limits as prescribed under theRegulations.

c) Problem Resolution

The Fund will follow-up with Customer Service Centres and Registrar on complaints and enquiries received from investors forresolving them promptly.

For this purpose, Mr. Gautam Guha has been appointed the Investor Relations Officer. He can be contacted at the CorporateOffice of the AMC. The address and phone numbers are:

Contractor Building 3rd Floor41, R. Kamani MargBallard Estate, Mumbai 400 038Phone: (91)(22) 22679676Fax : (91)(22) 22679677e-mail: [email protected]

d) Information about the Scheme

The Fund will publish an abridged summary of an audited annual report of the Scheme, as on March 31 of each year, throughan advertisement and an abridged scheme wise annual report shall be mailed to all Unitholders, not later than six months fromMarch 31 of each year. The abridged annual report shall contain such details as are required under the Regulations.

The Fund shall before the expiry of one month from the close of each half year, that is as on March 31 and September 30,publish its unaudited financial results in one English daily newspaper circulating all India and in a newspaper published in thelanguage of the region where the Head Office of the Fund is situated and update the same on AMC’s website at www.pruicici.comwithin 30 days and 60 days in two different formats prescribed in terms of SEBI’s circular dated April 20, 2001 and on AMFIweb site (www.amfiindia.com) before the expiry of one month from the close of each half-year, in the prescribed format.

Further, the Fund shall also disclose the half-yearly scheme portfolios on its web site at www.pruicici.com and on AMFI web site(www.amfiindia.com) in the prescribed format before the expiry of one month from the close of each half-year.

The AMC will disclose the NAV of each Plan on every Business Day.

The Fund shall before the expiry of one month from the close of each half year (31st March and 30th September) send to theUnitholders a complete statement of Plan’s portfolios or if such statement is not sent to the Unitholders, it will be publishedby way of an advertisement in one English daily circulating in the whole of India and in a newspaper published in the languageof the region where the head office of the mutual fund is situated.

e) NAV Information

The NAV of the Scheme will be calculated daily and announced by the Fund on each Business Day. The Unitholders, may obtainthe information on NAV on any day, by calling the office of the AMC or any of the Investor Service Centers or from the web siteof the AMC – www. pruicici.com. The Fund will use its best endeavour to publish NAVs daily in at least two daily newspapers.


77

Further, the AMC shall endeavour to publish the Purchase & Redemption prices of Units daily in a newspaper with all Indiacirculation. AMC shall update the NAVs on the website of Association of Mutual Funds in India - AMFI (www.amfiindia.com)by 8.00-p.m. everyday. In case of any delay, the reasons for such delay would be explained to AMFI and SEBI by the next day.

If the NAVs are not available before commencement of business hours on the following day due to any reason, the Fund shallissue a press release providing reasons and explaining when the Fund would be able to publish the NAVs.

f) Disclosure of information under the Regulations

The Fund will, not later than six months after the close of each financial year (March 31), publish through an advertisement, anabridged Annual Report relating to the Scheme and mail to the Unitholders an abridged scheme wise annual report. Further,the full text of the Annual Report will be available for inspection at the office of the Fund. A copy of the Annual Report will besent to Unit holders, free of cost, on specific request.

The Fund shall before the expiry of one month from the close of each half year, that is as on March 31 and September 30,publish its unaudited financial results in one English daily newspaper having all India circulation and in a newspaper publishedin the language of the region where the Head Office of the Fund is situated and update the same on AMC’s website atwww.pruicici.com within 30 days and 60 days in two different formats prescribed in terms of SEBI’s circular dated April 20,2001 and on AMFI’s website at www.amfiindia.com within 30 days from the close of each half year, in the prescribed formats.

g) Rights of Unitholders of the Scheme :

1. Unit holders of the Scheme have a proportionate right in the beneficial ownership of the assets of the Scheme and in caseof declaration of dividend, for the receipt of the dividend declared by the Fund under the Scheme.

2. When the Fund declares a dividend under the Scheme, the Fund shall despatch to the Unit holders the dividend warrantswithin 30 days from the date of declaration of dividend.

3. The Trustee is bound to make such disclosures to the Unit holders as are essential in order to keep them informed aboutany information known to Trustee which may have an adverse bearing on their investments.

4. The appointment of an AMC for the Fund can be terminated by the Trustee or by 75% of the Unit holders of the Schemeof the Fund and any change in the appointment of the AMC shall be subject to the prior approval of SEBI and the Unitholders of the Scheme

5. The Trustee is obliged to convene a meeting on a requisition of 75% of the Unit holders of the Scheme.

6. 75% of the Unit holders of a Scheme can pass a resolution to wind up the Scheme.

7. Unit holders have the right to inspect all the documents listed under “Documents Available for Inspection”.

8. The Trustee shall obtain the consent of the Unit holders :

a) whenever required to do so by SEBI, in the interest of Unit holders

b) whenever required to do so on the requisition made by three-fourths of the Unit holders of the Scheme

c) when the Trustee decides to wind-up or prematurely redeem the units

9. The Trustees shall ensure that no change in the fundamental attributes of any scheme or the trust or fee and expensespayable or any other change, which would modify the scheme and affects the interests of unit holders is carried outunless:

- a written communication about the proposed change is sent to each Unitholder and

- an advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaperpublished in the language of the region where the Head Office of the mutual fund is situated; and the Unitholdersare given an option to exit at the prevailing Net Asset Value without any exit load.

Subject to the Regulations and the guidelines issued by SEBI, the consent of the Unitholders of the Scheme will beobtained through voting, by mail. Detailed modalities of the same, including the principles for entitlement of votes foreach Unitholder will be finalized in consultation with and after obtaining the approval of SEBI and the Trustee.

10. Annual report containing accounts of the AMC would be displayed on the websites of the Fund (i.e. www.pruicici.com).Unitholders, if they so desire, may request for the annual report of the AMC.

h) Duration of the Scheme /Winding up

The duration of the Schemes is perpetual. The AMC, the Fund and the Trustee reserve the right to make such changes/alterations to all or any of the three Schemes (including the charging of fees and expenses) offered under this Offer Documentto the extent permitted by the applicable Regulations. However, in terms of the Regulations a Scheme may be wound up afterrepaying the amount due to the Unit holders:

1. On happening of any event, which in the opinion of the Trustee, requires the Scheme to be wound up, OR

2. If seventy five percent (75%) of the Unit holders of the Schemes pass a resolution that the Scheme be wound up, OR

3. If SEBI so directs in the interest of the Unit holders


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Where the Scheme is so wound up, the Trustee shall give notice of the circumstances leading to the winding up of the Schemeto:

1. SEBI and,

2. In two daily newspapers having a circulation all over India and in one vernacular newspaper with circulation in Mumbai.

On and from the date of the publication of notice of winding up, the Trustee or the Investment Manager, as the case may be,shall:

1. Cease to carry on any business activities in respect of the Scheme so wound up;

2. Cease to create or cancel Units in the Scheme;

3. Cease to issue or redeem Units in the Scheme.

i) Procedure and manner of Winding up

The Trustee shall call a meeting of the Unit holders of the relevant schemes to approve by simple majority of the Unit holderspresent and voting at the meeting for authorising the Trustee or any other person to take steps for the winding up of theschemes.

The Trustee or the person authorised above, shall dispose of the assets of the scheme concerned in the best interest of the Unitholders of the Scheme.

The proceeds of sale realised in pursuance of the above, shall be first utilised towards discharge of such liabilities as are dueand payable under the Scheme, and after meeting the expenses connected with such winding up, the balance shall be paid toUnit holders in proportion to their respective interest in the assets of the Scheme, as on the date the decision for winding upwas taken.

On completion of the winding up, the Trustee shall forward to SEBI and the Unit holders a report on the winding up, detailingthe circumstances leading to the winding up, the steps taken for disposal of the assets of the Scheme before winding up, netassets available for distribution to the Unit holders and a certificate from the auditors of the Fund.

Notwithstanding anything contained here in above, the provisions of the Regulations in respect of disclosures of half-yearlyreports and annual reports shall continue to be applicable, until winding up is completed or the scheme ceases to exist..

After the receipt of the report referred to above, if SEBI is satisfied that all measures for winding up of the Scheme have beencomplied with, the Scheme shall cease to exist.

j) Tax benefits of investing in the Mutual Fund

The following information is provided for only general information purposes. In view of the individual nature of tax benefits,each investor is advised to consult with his or her own tax consultant with respect to the specific tax implications arising outof their participation in the scheme.

The Scheme’s auditors, N. M. Raiji and Co. have confirmed that based on the law in force, the following benefits may accrueto the respective assesses:

1. TO THE FUND

The Income of the Fund registered under Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulationsmade thereunder will be exempt from income tax in accordance with the provisions of section 10(23D) of the Act. Theincome received by the Fund is not liable for deduction of tax at source.

The Finance Act 2003 has amended the provisions of section 115R of the Act, whereby the Mutual Fund will be liable topay additional income tax at the rate of 12.5% plus applicable surcharge, on the income distributed by the Fund.

In view of the above amendment made by the Finance Act 2003, the Fund not being an open-ended equity oriented fundwould be liable to pay additional tax on the income distributed by it on or after April 1, 2003.

2. TO THE UNITHOLDERS

2.1 INCOME RECEIVED FROM MUTUTAL FUND

Finance Act 2003 has inserted section 10(35), whereby any income received in respect of units of Mutual Fundspecified under clause (23D) of section 10, in respect of Assessment Year 2004-2005 will be exempt from income taxin the hands of the unit holders. Further, it has been clarified that income arising from transfer of units of MutualFund shall not be exempt under section 10(35).

In view of the amendment, no tax would be payable by unit holders in respect of income distributed by the Fund andno tax needs to be deducted at source thereon by the Fund.

2.2 LONG TERM CAPITAL GAINS ON TRANSFER OF UNITS

i) For Individuals and HUFs

Long-term Capital Gains in respect of Units held for a period of more than 12 months will be chargeable undersection 112 of the Act, at a rate of 20% plus surcharge, asif applicable. Capital gains would be computed aftertaking into account cost of acquisition as adjusted by Cost Inflation Index notified by the Central Governmentand expenditure incurred wholly and exclusively in connection with such transfer.


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In the case, where taxable income as reduced by long term capital gains is below the exemption limit, the longterm capital gains will be reduced to the extent of the shortfall and only the balance long term capital gains willbe charged at the flat rate of 20% plus surcharge, as may be applicable.

It is further provided that an assessee will have an option to apply concessional rate of 10%, plus surcharge,provided the long term capital gains are computed without substituting indexed cost in place of cost of acquisition.

ii) For Partnership Firms, Non-Residents, Indian Companies/Foreign Companies

Long-term Capital Gains in respect of Units held for a period of more than 12 months will be chargeable undersection 112 of the Act at a rate of 20% plus surcharge, as may be applicable. Capital gains would be computedafter taking into account cost of acquisition as adjusted by Cost Inflation Index notified by the Central Governmentand expenditure incurred wholly and exclusively in connection with such transfer.

It is further provided that an assessee will have an option to seek concessional rate of 10%, plus surcharge, asapplicable, to long term capital gains computed without adjusting for cost for indexation.

(iii) For Non-resident Indians

Under section 115E of the Act for non-resident Indians, income by way of long-term capital gains in respect ofUnits is chargeable at the rate of 20% plus applicable surcharge. Such long-term capital gains would becalculated without indexation of cost of acquisition.

Non-resident Indians may opt for computation of long term capital gains as per section 112, which is morebeneficial.

(iv) For Overseas Financial Organisations, including Foreign Institutional Investors fulfilling conditions laiddown under section 115AB (Offshore Fund):

Under section 115AB of the Act, income by way of long term capital gains in respect of units purchased inforeign currency held for a period of more than 12 months will be chargeable to tax at the rate of 10%, plussurcharge, as may be applicable. Such gains would be calculated without indexation of cost of acquisition.

2.3 SHORT TERM CAPITAL GAINS

Short term Capital Gains in respect of Units held for a period of not more than 12 months is added to the totalincome. Total income including short-term capital gains is chargeable to tax as per the relevant slab rates.

Income Tax Rates

The maximum tax rates applicable to different categories of assessees are as follows:

Resident individuals and HUF 30% plus surcharge

Partnership Firms 35% plus surcharge

Indian companies 35% plus surcharge

Non Resident Indians 30% plus surcharge

Foreign Companies 40% plus surcharge

As per the Finance Act 2003, a surcharge of 2.5% on the income tax would be applicable for all categories of assessesexcept in the case of individuals and HUF. With regards to individuals and HUF having a total income exceeding Rs.850,000, a surcharge of 10% has been levied by the Finance Act 2003.

2.4 SHORT TERM CAPITAL LOSSES

According to sub-section (7) of section 94, if any person buys or acquires units within a period of three months priorto the record date fixed for declaration of dividend or distribution of income and sells or transfers the same within aperiod of three months from such record date, then capital losses arising from such sale to the extent of dividend orincome received or receivable on such units, which are exempt under the Act, will be ignored for the purpose ofcomputing his income chargeable to tax.

2.5 TAX DEDUCTION AT SOURCE

2.5.1For Income in respect of units:

In view of the amendments made by the Finance Act 2003 in section 10(35), section 194K and section 196A, notax shall be deducted in respect of any income credited or paid on or after April 1, 2003 in respect of units of theFund.

2.5.2For Capital Gains:

(i) In respect of Resident Unit holders:

No tax is required to be deducted at source on capital gains arising to any resident unit holder (undersection 194K) vide circular no.715 dated August 8, 1995 issued by the Central Board for Direct Taxes(CBDT).


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(ii) In respect of Non- Resident Unit holders:

Under section 195 of the Income Tax Act, 1961, tax shall be deducted at source in respect of capital gainsas under:

a. In case of non resident other than a company any other person -

� Long term capital gains 20% plus surcharge

� Short term capital gains 30% plus surcharge

b. In case of foreign company -


� Short term capital gains 40% plus surcharge

c. In case of Offshore Fund as defined in 115AB –


As per circular no. 728 dated October 1995 by CBDT, in the case of a remittance to a country with which a DoubleTaxation Avoidance Agreement (DTAA) is in force, the tax should be deducted at the rate provided in the FinanceAct of the relevant year or at the rate provided in DTAA whichever is more beneficial to the assessee.

2.5.3 Exemption from tax on capital gains arising on transfer of units held for more than 12 months

Under section 54EC of the Act

As provided under section 54EC of the Income Tax Act, 1961, where an assessee has made capital gains from thetransfer of units held in Mutual Fund Scheme for a period exceeding 12 months and the assessee has any timewithin a period of 6 months after the date of such transfer, invested the whole of the capital gains in the longterm specified assets i.e., in bonds redeemable after 3 years issued by the National Bank for Agriculture andRural Development, or by the National Highways Authority of India or by the Rural Electrification CorporationLimited or by National Housing Bank or by the Small Industries Development Bank of India, such capital gainsshall be exempted from tax on capital gains under section 54EC of the Income Tax Act 1961. However, if theassessee has invested only a part of the capital gains, he will be eligible for the proportionate exemption.

Under section 54ED of the Act

Under Section 54ED, capital gains arising from the transfer of units held in the Mutual Fund Scheme for a periodexceeding 12 months will be exempt, if the assessee has, any time within a period of 6 months after the date ofsuch transfer, invested the whole of the capital gains in acquiring equity shares forming part of an eligible issueof capital. However, if the assessee has invested only a part of the capital gains, he will be eligible for theproportionate exemption. An eligible issue of capital means an issue of equity shares offered for subscription tothe public by a public company formed and registered in India.

2.6 INVESTMENTS BY CHARITABLE AND RELIGIOUS TRUSTS IN THE PLAN

Units of a Mutual fund Scheme referred to in clause 23D of section 10 of the Income Tax Act, 1961, constitute aneligible avenue for investment by charitable or religious trusts per rule 17C of the Income Tax Rules, 1962, read withclause (xii) of sub-section (5) of section 11 of the Income Tax Act, 1961.

2.7 WEALTH TAX

Units held under the Mutual Fund Scheme are not treated as assets within the meaning of section 2(ea) of the WealthTax Act, 1957 and are, therefore, not liable to Wealth-Tax.

UNCLAIMED REDEMPTION AMOUNT

The unclaimed Redemption amount may be deployed by the Mutual Fund in call money market or money marketinstruments only and the investors who claim these amounts during a period of three years from the due date shallbe paid at the prevailing Net Asset Value. After a period of three years, this amount will be transferred to a poolaccount and the investors can claim the amount at NAV prevailing at the end of the third year. The income earned onsuch funds will be used for the purpose of investor education. The AMC will make a continuous efforts to remind theinvestors through letters to take their unclaimed amounts. Further, the investment management fee charged by theAMC for managing unclaimed amounts shall not exceed 50 basis points.

Unclaimed Dividend / Redemptions in respect of the open ended funds normally represent the time lag betweenfunding of the respective accounts (with bank) by the AMC and the time taken for presentation of redemption/dividend warrants by the investors. No significant delay in the process is noticed. Hence the details in respect of open-ended funds is not mentioned.

Details in respect of Prudential ICICI Premier are given below –

As of March 31, 2003 As of August 31, 2003

Unclaimed Redemption Amount Rs. 8.28 Crores in respect Rs. 7.58 Crores in respect ofof 36,632 investors 33,796 investors

Unclaimed Dividend Amount Rs.0.03 Crores Rs. 0.03 Crores


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SECTION VII

OTHER MATTERSA) UNITHOLDER GRIEVANCES REDRESSAL MECHANISM

Investor grievances/ correspondences are normally received at AMC office or at the Customer Service Centres or directly by theRegistrar. All grievances/ correspondence/ requests are forwarded to the Registrar for necessary action. The complaints/correspondence is closely followed up with the Registrar to ensure timely redressal and prompt investor service. Given belowis the complaint history for the last three fiscal years:

ICICI Premier ICICI Power #

01/04/2000 to 31/03/2001

Complaints/ Requests received during the period 4549 2491

Redressed during the period 4545 2485

Pending 4 6

01/04/2001 to 31/03/2002

Complaints/ Requests received during the period 1011 1209#

Redressed during the period 1011 1215#

Pending as on March 31, 2002 4 Nil

01/04/2002 to 31/03/2003

Complaints/ Requests received during the period 700 Not applicable

Redressed during the period 699 Not applicable

Pending as on March 31, 2003 5 Not applicable

01/04/2003 to 31/08/2003

Complaints/ Requests received during the period 258 Not applicable

Redressed during the period 253 Not applicable

Pending as on August 31, 2003 10 Not applicable

# Status reported till the Record Date of Conversion. Name changed to Prudential ICICI Power with effect from September27, 2001. The status on investor complaints consequent to conversion is reported separately.

The above two funds were launched in 1994. . ICICI Power has been converted in to an open-ended fund w.e.f. September 27,2001. Consequent to conversion its name is changed to Prudential ICICI Power. Further, ICICI Premier was rolled over for afurther period of 5 years in February 1999 and is open for repurchase w.e.f. February 7, 2001. The pending investor complaints/ requests pertain to, inter-alia, Issue of duplicate certificates, non receipt of certificates, non receipt of redemption/dividendwarrants, revalidation of dividend warrants, name correction, change of address of the Unitholder, registration of death cases,registration of Power of Attorney, transfer/transmission of Units etc. All investor grievances are normally redressed within aperiod of 15 days of their receipt, subject to the information furnished by the Unitholder is complete and accurate. If suchinformation is not provided/not available with the Registrars to the above Schemes, the matter is further followed up with theinvestors. Investor complaints are continuously monitored with the Registrar to the Schemes.

The details relating to the fifteen open ended schemes launched by the Fund are as under:

Data relating to the period July 1998 to August 31, 2003

Scheme Complaints Complaints ComplaintsReceived redressed pending

Prudential ICICI Growth Plan 499 499 Nil

Prudential ICICI Income Plan 997 997 Nil

Prudential ICICI Liquid Plan 148 148 Nil

Prudential ICICI FMCG Fund 402 402 Nil

Prudential ICICI Tax Plan 394 394 Nil

Prudential ICICI Gilt Fund 129 129 Nil

Prudential ICICI Balanced Fund 478 478 Nil

Prudential ICICI Technology Fund 1983 1983 Nil

Prudential ICICI Monthly Income Plan 108 108 Nil


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Scheme Complaints Complaints ComplaintsReceived redressed pending

Prudential ICICI Fixed Monthly Plan 17 17 Nil

Prudential ICICI Child Care Plan 173 173 Nil

Prudential ICICI Power 126 126 Nil

Prudential ICICI Short Term Plan 3 3 Nil

Prudential ICICI Long Term Plan NIL NIL Nil

Prudential ICICI Sweep Plan NIL NIL Nil

Prudential ICICI Flexible Income Plan 7 7 Nil

Prudential ICICI Dynamic Plan 10 10 Nil

Prudential ICICI Floating Rating Plan 0 0 Nil

Prudential ICICI Index Fund-S&P CNX Nifty Plan 8 8 Nil

Sensex Prudential ICICI Exchange Traded Fund NIL NIL Nil

Total 5482 5482 Nil

B) ASSOCIATE TRANSACTIONS

Investment in Group Companies:

Details of investments made by the schemes in securities of Sponsor i.e. ICICI Ltd. during the previous four financial years areas follows:

(Amount in Rupees)

Scheme name/Nature of April 1, 2003 to F.Y 2002-2003 F.Y. 2001-2002 F.Y. 2000-2001investment August 31, 2003

Amount Amount Amount

Investment in Bonds ofICICI Bank Ltd.

ICICI Premier - - - 10,154,285

Prudential ICICI Income Plan 836,859,448 818,794,702 1,027,466,435 526,108,245

Prudential ICICI Balanced Fund - - 17,991,012 18,873,656

Prudential ICICI Liquid Plan - 10,891,898 39,359,762 186,921,910

Prudential ICICI Short Term Plan 59,087,867 58,913,072 61,800,122 -

Prudential ICICI Monthly Income Plan - - - 50,771,423

Investment in NSE Linked MiborDeposits /Term Deposit ofICICI Bank Ltd

Prudential ICICI Liquid Plan - 200,000,000 1,500,000,000 -

Prudential ICICI Short Term Plan - - - -

Prudential ICICI Power - - 20,000,000 -

ICICI Premier - - 20,000,000 -

Prudential ICICI Balanced Fund - - 80,000,000 -

Prudential ICICI Floating Rate Fund - 5,000,000,000

Prudential ICICI Flexible Income Plan - 50,000,000

Investment in equity shares ofErstwhile ICICI Ltd

ICICI Power Nil Nil Nil Nil

Prudential ICICI Tax Plan Nil Nil Nil Nil

Prudential ICICI Index Fund Nil Nil 1,031,715 Nil

Investment in equity shares ofICICI Bank Ltd

Prudential ICICI Index Fund 3,880,442 3,491,370 592,862 Nil

Sensex Prudential ICICI Exchange 7,312,112 6,327,798 Nil Nil Traded Fund

TOTAL 907,139,869 6,148,418,840 2,768,241,908 792,829,519

% to the net assets of the Mutual Fund 0.67% 6.77% 4.19% 1.69%


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Underwriting obligations with respect to issues of Associate Companies:

The AMC has, till date, not entered into any underwriting contracts in respect of any public issue made by any of its associatecompanies.

Subscription in issues lead managed by ICICI Securities Ltd. [erstwhile ICICI Securities & Finance Company Limited(I-Sec)]

(Amount in Rupees)

Name of the Scheme F.Y. 2000-2001 F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toAugust 31, 2003

ICICI Premier Nil Nil Nil Nil

Prudential ICICI Power Nil Nil Nil *6,675,000

Prudential ICICI Income Plan 700,000,000 50,000,000 200,000,000 Nil

Prudential ICICI Liquid Plan 600,000,000 250,000,000 Nil Nil

Prudential ICICI Growth Plan Nil Nil Nil *21,925,000

Prudential ICICI Tax Plan Nil Nil Nil *2,187,500

Prudential ICICI Monthly Income Plan Nil Nil Nil *6,100,000

Prudential ICICI Balanced Fund 50,000,000 Nil Nil *6,087,500

Prudential ICICI Dynamic Plan Nil Nil Nil *5,712,500

TOTAL 1,350,000,000 300,000,000 200,000,000 Nil

* ICICI Securities Ltd. [erstwhile ICICI Securities & Finance Company Limited (I-Sec)] was a lead manager to the public issueof Maruti Udyog Ltd. along with other lead managers. It may be noted that, Prudential ICICI Mutual Fund has subscribedto the said issue through JM Morgan Stanley Securities Pvt. Ltd. This declaration has been made as a matter of disclosureto the investors.

Subscription in issues lead managed by ICICI Bank Limited

(Amount in Rupees)

Name of the Scheme F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toAugust 31, 2003

Prudential ICICI Income Plan 72,728,496 Nil Nil

Prudential ICICI Liquid Plan 23,142,034 1,450,000,000 Nil

Prudential ICICI Short Term Plan Nil 603,220,568 Nil

Prudential ICICI Monthly Income Plan 36,628,268 445,762,855 Nil

Prudential ICICI Flexible Income Plan Nil 300,000,000 Nil

Subscription in issues lead managed by ICICI Capital Services Limited

(Amount in Rupees)

Name of the Scheme F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toAugust 31, 2003

Prudential ICICI Income Plan 540,000,000 Nil Nil

Prudential ICICI Short Term Plan 10,000,000 Nil Nil

The above investments were considered sound. Before making an investment, AMC evaluated the same on merits and onarms’ length basis and in accordance with the objectives of the scheme.


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Transactions with the Associate Companies:

(Amount in Rupees)

F.Y. 2000-2001 F.Y. 2001-2002 F.Y. 2002-2003 April 1, 2003 toAugust 31, 2003

ICICI Bank Limited – Bank Charges

ICICI Premier Nil 470 Nil Nil

Prudential ICICI Power Nil 3345 15 270,000

Prudential ICICI Income Plan 556,012 1,724,925 1,326,708 270,000

Prudential ICICI Liquid Plan 890,864 1,839,595 889,394 202,500

Prudential ICICI Growth Plan 873,445 755,177 827,049 270,000

Prudential ICICI FMCG Fund 729,701 674,607 427,000 Nil

Prudential ICICI Tax Plan 773,856 620,145 1501 67,500

Prudential ICICI Gilt Fund – Treasury 378,505 901,716 825,762 Nil

Prudential ICICI Gilt Fund – Investment 748,544 949,692 889,297 135,000

Prudential ICICI Gilt Fund –1 Year plus Nil 150 Nil Nil

Prudential ICICI Balanced Fund 763,247 724479 825,500 270,000

Prudential ICICI Technology Fund 815,647 879,799 831,405 Nil

Prudential ICICI Monthly Income Plan 243,150 901065 825,665 270,000

Prudential ICICI Fixed Maturity Plan 50,000 37,707 Nil NilQuarterly series 1

Prudential ICICI Fixed Maturity Plan Nil 4,979 50 NilQuarterly series 2

Prudential ICICI Fixed Maturity Plan Nil 15,748 Nil NilQuarterly series 3

Prudential ICICI Fixed Maturity Plan Nil 150 Nil NilHalf-Yearly series 1

Prudential ICICI Fixed Maturity Plan Nil 150 Nil NilHalf-Yearly series 2

Prudential ICICI Fixed Maturity Plan Nil 150 Nil NilYearly series 1


Prudential ICICI Fixed Maturity Plan Nil 200 661 NilYearly series 3

Prudential ICICI Fixed Maturity Plan Nil Nil Nil NilYearly series 4


Prudential ICICI Child Care Plan- Nil 3,644 350 NilGift Plan

Prudential ICICI Child Care Plan- Nil 12,681 730 NilStudy Plan

Prudential ICICI Short Term Plan Nil 423,699 825,715 270,000

Prudential ICICI Flexible Income Plan Nil Nil 398,750 270,000

Prudential ICICI Dynamic Plan Nil Nil 112 270,000

Prudential ICICI Floating Rating Plan Nil Nil Nil 135,000

ICICI Bank Limited – Brokerage

Prudential ICICI Income Plan 8,816 1,396,509 18,404,188 8,656,460

Prudential ICICI Liquid Plan 23,058 3,530,911 13,452,007 6,408,710

Prudential ICICI Growth Plan 74,949 945,779 1287401 965,909


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(Amount in Rupees)


Prudential ICICI FMCG Fund 9,654 9,095 36,865 148,906

Prudential ICICI Tax Plan 5,536 104,654 182,185 83,098

Prudential ICICI Gilt Fund – Treasury 353 26,546 147,943 20,537

Prudential ICICI Gilt Fund – Investment 688 145,086 4,448,085 2,154,304

Prudential ICICI Balanced Fund 69,119 64,065 371,333 310,291

Prudential ICICI Technology Fund 74,429 103,779 688,780 318,164

Prudential ICICI Monthly Income Plan 2,269 119,431 2,178,352 519,856

Prudential ICICI Fixed Maturity Plan Nil 11,171 11,929 1,944Quarterly series 1

Prudential ICICI Fixed Maturity Plan 117,707 1,308 11,668 6,709Quarterly series 2

Prudential ICICI Fixed Maturity Plan Nil 139,294 4676 270Quarterly series 3

Prudential ICICI Fixed Maturity Plan Nil 15,815 39,558 809Half-Yearly series 1

Prudential ICICI Fixed Maturity Plan Nil 949 977 269Half-Yearly series 2

Prudential ICICI Fixed Maturity Plan Nil 239 109,263 1,262Yearly series 1

Prudential ICICI Fixed Maturity Plan Nil Nil 8,611 809Yearly series 2

Prudential ICICI Fixed Maturity Plan Nil Nil 98,754 145,555Yearly series 3

Prudential ICICI Fixed Maturity Plan Nil 33 88 66Yearly series 4

Prudential ICICI Fixed Maturity Plan Nil 1,719 156,198 46,342Yearly series 5

Prudential ICICI Fixed Maturity Plan Nil Nil 378,438 NilYearly series 6

Prudential ICICI Fixed Maturity Plan Nil Nil 600 NilYearly series 7

Prudential ICICI Child Care Plan- Nil 93,326 368,251 166,424Gift Plan

Prudential ICICI Child Care Plan- Nil 49,857 240,792 143,470Study Plan

Prudential ICICI Power Nil 360 82,382 3,001,782

Prudential ICICI Index Fund Nil Nil 29,945 Nil

Prudential ICICI Long Term Plan Nil Nil 137 260

Prudential ICICI Flexible Income Plan Nil Nil 2,512,861 2,367,166

Prudential ICICI Dynamic Plan Nil Nil 1,402,785 1,510,469

Prudential ICICI Floating Rate Plan Nil Nil 995 76,442

Prudential ICICI Short Term Plan Nil Nil 15,237,064 4,463,847

ICICI Infotech Services Limited –Service Charges

ICICI Premier 751,000 583,330 1,597,609 341,339

ICICI Premier Redeemed Nil 19,930 671,043 92,333


86

(Amount in Rupees)


ICICI Capital Services Limited –Brokerage

Prudential ICICI Power Nil 93 297 Nil

Prudential ICICI Income Plan 8,949487 13,376,665 54,912 Nil

Prudential ICICI Liquid Plan 2,959812 6,894,164 Nil Nil

Prudential ICICI Growth Plan 1,471,248 775,807 89,950 Nil

Prudential ICICI FMCG Fund 87,149 53,229 508 Nil

Prudential ICICI Tax Plan 118,162 75,314 774 Nil

Prudential ICICI Gilt Fund – Treasury 365,289 538,777 Nil Nil

Prudential ICICI Gilt Fund – Investment 683,334 2,248,509 Nil Nil

Prudential ICICI Balanced Fund 800,532 407,530 1,281 Nil

Prudential ICICI Technology Fund 1,804,955 1,954,540 8,648 Nil

Prudential ICICI Monthly Income Plan 448,893 1,350,164 2,849 Nil

Prudential ICICI Fixed Maturity Plan 14,589 282,228 Nil NilQuarterly series 1



Prudential ICICI Fixed Maturity Plan Nil 263,080 Nil NilHalf-Yearly series 1

Prudential ICICI Fixed Maturity Plan Nil 40,312 Nil NilHalf-Yearly series 2

Prudential ICICI Child Care Plan – Nil Nil 1,656 NilGift Plan

Prudential ICICI Child Care Plan – Nil Nil 2,176 NilStudy Plan

ICICI Brokerage Service Limited –Brokerage on Secondary MarketTransactions

Prudential ICICI Premier 3,425 Nil Nil Nil

Prudential ICICI Balanced Plan Nil 9,000 666,606 31,986

Prudential ICICI Growth Plan Nil 191,000 958,939 189,416

Prudential ICICI Power Nil 2,000 188,388 269,903

Prudential ICICI FMCG Fund Nil Nil 181,297 74,738

Prudential ICICI Tax Plan Nil 2,000 131,833 50,383

Prudential ICICI Technology Plan Nil 72,000 70,270 Nil

Prudential ICICI Monthly Income Plan Nil Nil 185,121 295,603

Prudential ICICI Child Care Plan – Nil Nil 4736 18,006Gift Plan

Prudential ICICI Child Care Plan – Nil Nil 7,329 NilStudy Plan

Prudential ICICI Dynamic Plan Nil Nil 148,729 390,597

ICICI Securities Ltd. (erstwhileICICI Securities and Finance Co. Ltd.)Brokerage on Secondary MarketTransactions

Prudential ICICI Dynamic Plan Nil Nil 5,940 Nil


87

(Amount in Rupees)


ICICI Securities Ltd. (erstwhileICICI Securities and Finance Co. Ltd.)Brokerage

Prudential ICICI Income Plan 11,073,162 11,843,754 5,013,417 152,320

Prudential ICICI Liquid Plan 199,485 4,791,362 61,087 7743

Prudential ICICI Growth Plan 18,051,819 1,365,584 85,833 387

Prudential ICICI FMCG Fund 398,987 278,856 350,693 1,536

Prudential ICICI Gilt Fund – Treasury 652,634 310,339 915,425 Nil

Prudential ICICI Gilt Fund – Investment 739,749 808,124 488,396 29,471

Prudential ICICI Balanced Fund 8,177,865 2,195,439 1,047,772 41,057

Prudential ICICI Technology Fund 4,194,879 396,549 10,196 2,322

Prudential ICICI Tax Plan Nil 155 38 26

Prudential ICICI Monthly Income Plan Nil 1,278 433 198

Prudential ICICI Fixed Maturity Plan Nil 274 Nil NilQuarterly series 1

Prudential ICICI Short Term Plan Nil Nil 556,652 Nil

Prudential ICICI Flexible Income Plan Nil Nil 113,550 Nil

Prudential ICICI Power Nil Nil 386,599 Nil

ICICI Web Trade Ltd. Brokerage

Prudential ICICI Growth Plan Nil 190188 65,558 44,632

Prudential ICICI Income Plan Nil 1,549 100,224 44,663

Prudential ICICI Liquid Plan Nil Nil 30,358 14,356

Prudential ICICI FMCG Fund Nil 921 17,816 17,164

Prudential ICICI Tax Plan Nil 1,182 18,649 10,080

Prudential ICICI Balanced Fund Nil 301 19,825 10,531

Prudential ICICI Technology Plan Nil 6,140 96,558 65,075

Prudential ICICI Gilt Treasury Nil Nil 2,522 638

Prudential ICICI Gilt Investment Nil Nil 19,178 5,362


Prudential ICICI Short Term Plan Nil Nil 6,981 1,707

Prudential ICICI Power Nil Nil 34,638 83,302


Prudential ICICI Dynamic Plan Nil Nil 116,879 56,761

ICICI Web Trade Limited –Brokerage on Secondary MarketTransactions

Prudential ICICI Growth Plan Nil Nil 4,582 Nil

Way 2 Wealth Securities Pvt. Ltd.

Prudential ICICI Power Nil Nil 13,190 691,193

Prudential ICICI Growth Plan Nil Nil 296,840 49,920

Prudential ICICI Income Plan Nil Nil 2,179,850 526,104

Prudential ICICI Liquid Plan Nil Nil 334,862 133,685

Prudential ICICI FMCG Fund Nil Nil 1,168 582

Prudential ICICI Tax Plan Nil Nil 19,215 6,402

Prudential ICICI Balanced Fund Nil Nil 21,361 5,331

Prudential ICICI Technology Plan Nil Nil 310,26 36,500

Prudential ICICI Gilt Treasury Nil Nil 7730 2,491

Prudential ICICI Gilt Investment Nil Nil 273,439 121,047


88

(Amount in Rupees)



Prudential ICICI Fixed Maturity Plan – Nil Nil (14,409) 1,611Quarterly I

Prudential ICICI Fixed Maturity Plan – Nil Nil 51 21Quarterly II

Prudential ICICI Fixed Maturity Plan – Nil Nil 29 NilQuarterly III

Prudential ICICI Index Fund Nil Nil 9,167 Nil

Prudential ICICI Short Term Plan Nil Nil 931,228 691,322

Prudential ICICI Child Care Plan – Nil Nil 46,186 11,934Gift Plan

Prudential ICICI Child Care Plan – Nil Nil 38,778 12,428Study Plan


Prudential ICICI Dynamic Plan Nil Nil 39,621 101,.958

The percentage of brokerage paid to ICICI Brokerage Services Limited (IBSL) was @0.26% and for ICICI Web Trade [email protected]% of transaction value and the same was in line with the norms relating to brokerage payments for secondary markettransactions of the Fund. The total business given to IBSL amounted to Rs.14.098 lakhs, Rs.1,391.54 lakhs, Rs.8,106.27 lakhsand 12,927.72 lakhs during the year 1999-2000, 2000-2001, 2001-2002 and 2002-2003 respectively. Further, during theperiod from April 1, 2003 to August 31, 2003, total business given to IBSL amounted to Rs. 7,863.25 lakhs. Further, IBSL waspaid a sum of Rs. 305,650 in connection with the rollover of ICICI Premier scheme towards service charges, in the year 1998-99.

During the period from April 1, 2000 to August 31, 2003, total business given to ICICI Web Trade Ltd. and ICICI SecuritiesLimited amounted to Rs. 449.52 lakhs and 30.05 lakhs respectively.

Dealings with Associate Companies

The AMC may, from time to time, for the purpose of conducting its normal business, use the services of the Sponsor,subsidiaries of its Sponsors/ associate companies of AMC. Such entities as on the date of this document include ICICI Bank,a scheduled commercial bank, ICICI Infotech Services Limited, a registrar and transfer agent; ICICI Brokerage Services Limited,a brokerage house, ICICI Venture Funds Management Company Limited, a venture funds management company, ICICI Securitiesand Finance Company Limited (I Sec), an investment bank, ICICI Prudential Life Insurance Company Limited carrying outinsurance business, ICICI Web Trade Limited an online brokerage firm and Way2Wealth Securities Private Limited. The AMCmay utilize the services of these group companies and any other subsidiary or associate company of the Sponsors/AMCestablished or to be established at a later date in case such an associate company is in a position to provide the requisiteservices to the AMC. The AMC will conduct its business with the aforesaid companies on commercial terms and on an arm’slength basis and at the then prevailing market rates to the extent permitted under the applicable laws including the Regulations,after an evaluation of the competitiveness of the pricing offered by the associate companies and the services to be providedby them.

Associate transactions, if any carried out, will be as per the Regulations and the limits prescribed thereunder. The Regulationscurrently prescribe the following limits:

The mutual fund scheme shall not make any investment in;

1. any unlisted security of an associate or group company of the Sponsor; or

2. any security issued by way of private placement by an associate or group company of the Sponsor; or

3. the listed securities of group companies of the Sponsor which is in excess of 25% of the net assets of such scheme.

The above restrictions and limits are also applicable to this Scheme. The AMC will, before investing in the securities of thegroup companies of the sponsor, evaluate such investments, the criteria for the evaluation being the same as is applied toother similar investments to be made under the Scheme. Investments under the Scheme in the securities of the groupcompanies will be subject to the limits under the Regulations.


89

C) Details of investment in companies that hold more than 5% of NAV of Schemes managed by the AMC, as onAugust 31, 2003:

Hero Honda Limited

Name of Scheme Quantity Amount (Rs.) % of NAV

Equity

Prudential ICICI Index Plan 7,049 2,074,521 1.28

Sensex Prudential ICICI Exchange Traded Fund 13,280 3,858,504 1.65

HCL Technologies Limited Hindustan Lever Limited

Name of Scheme Quantity Amount (Rs.) % of NAV Quantity Amount (Rs.) % of NAV

Equity

Prudential ICICI Child Care Plan – Study - - - 671,256 4,216,629 2.58

Prudential ICICI Index Fund 10,192 1,886,030 1.16 77,900 14,458,240 8.92

Sensex Prudential ICICI Exchange Traded Fund 19,176 3,521,672 1.51 146,209 26,975,561 11.54

Prudential ICICI Long Term Plan - - - 3,900,000 24,498,630 0.99

Prudential ICICI FMCG Fund - - - 472,608 87,196,176 22.06

Prudential ICICI Dynamic Plan 100,000 18,365,000 1.65 150,000 27,675,000 2.49

Prudential ICICI Technologies Fund 749,027 137,558,809 10.40 - - -

ICICI Bank Ltd.


Debentures / Bonds of erstwhile ICICI Ltd.)

Prudential ICICI Short term Plan 10,000 59,087,867 0.24

Prudential ICICI Income Fund 152,000 836,859,448 2.10

Equity

Prudential ICICI Index Plan 21,594 3,880,442 2.39


Polaris Software Lab Limited


Equity

Prudential ICICI Tax Plan 150,000 21,345,000 5.70

Wipro Limited


Equity

Prudential ICICI Index Fund 8,207 8,772,052 5.41

Hindalco Industries Limited


Debenture/Bonds/Commercial Paper

Prudential ICICI Income Plan 1,001,020 1,459,768,107 3.66

Prudential ICICI Short Term Plan 1,000,305 283,779,755 1.17

Prudential ICICI Monthly Income Plan 5 51,665,858 1.55

Prudential ICICI Flexible Income Plan 20 206,663,433 1.26

Equity




90

Finolex Industries Limited


Equity


Infrastructure Development Financial Corporation



Prudential ICICI Income Plan 4 223,905,353 0.56

Prudential ICICI Short Term Plan 6 110,769,460 0.46

Grasim Industries Limited



Prudential ICICI Income Plan 240 669,573,261 1.69

Prudential ICICI Short Term Plan 40 202,530,634 0.84

Prudential ICICI Monthly Income Plan 500,000 16,986,575 0.51

Equity


Prudential ICICI Dynamic Plan 73,001 45,140,168 4.06

Prudential ICICI Growth Plan 300,000 185,505,000 5.00


Prudential ICICI Balanced Fund 56,000 34,627,600 2.42

Prudential ICICI Power 165,000 102,027,750 3.60


Maruti Udyog Limited


Equity

Prudential ICICI Power 569,005 133,972,227 4.73

Prudential ICICI Dynamic Plan 190,980 44,966,241 4.04

Prudential ICICI Growth Plan 1,000,000 235,450,000 6.35

IDBI Bank



Prudential ICICI Income Plan 33,005 1,532,544,117 3.85

Prudential ICICI Liquid Plan 1,532,500 3,103,545,989 13.35


Prudential ICICI Premier 2,000 50,331,796 33.0

Prudential ICICI Flexible Income Plan 2,000 200,530,818 1.23

Prudential ICICI Balanced Fund 1,000 100,622,446 7.03

Prudential ICICI Short Term Plan 8,500 851,482,445 3.54

Equity



91

D) PENALTIES & PENDING LITIGATIONS

Cases of penalties awarded by SEBI under the SEBI act or any of its regulations or any other regulatory body against thesponsor of the mutual fund or any company associated with the sponsor in any capacity such as the asset managementcompany, trustee company/board of trustees, or any of the directors or key personnel of the asset management company andtrustee company:

ICICI Bank: Nil.

ICICI : Nil

AMC: Nil

Prudential Plc.

Financial Services Authority (FSA)

In October 2001, following a visit in early 1999, the Personal Investment Authority fined the Company £650,000. This relatedto delays in paying redress to supplement the pensions of those who had retired and the benefits of the beneficiaries of thosewho had died, and to its record keeping.

M&G

Following a regular Inland Revenue Personal Equity Plans(PEP) audit, M&G have reached agreement to pay the following:

missing application forms - £550

incorrect handling of void PEPs - £3205

accepting “paid for” as well as “free” shares during the take-on of Norwich Union windfall shares - £600 + repayment of anywrongly claimed tax credits

Investment Management Regulatory Organisation (IMRO)

In December 1996, Prudential Personal Equity Plans Limited underwent an IMRO disciplinary procedure.

In January 1997, the IMRO fined Prudential Personal Equity Plans Limited £70,000 for breaches of the Client Money Regulationsand related breaches which had occurred several years before.

The breaches were caused through the inability of systems to cope automatically with crediting individual investors’ accountswith dividends declared in respect of the underlying investments in personal equity plans. The dividends were handledmanually, were not credited in time and mistakes arose, requiring insignificant amounts of compensation to be paid toinvestors.

ANY PENDING MATERIAL LITIGATION PROCEEDINGS, OTHER THAN ORDINARY ROUTINE LITIGATION INCIDENTAL TO THEBUSINESS OF THE MUTUAL FUND TO WHICH THE SPONSOR OF THE MUTUAL FUND OR ANY COMPANY ASSOCIATED WITH THESPONSOR IN ANY CAPACITY SUCH AS THE AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEYPERSONNEL IS A PARTY. ANY PENDING CRIMINAL CASES OR ECONOMIC OFFENCE CASES AGAINST THE SPONSOR OR ANYCOMPANY ASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH AS AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY ORANY OF THE DIRECTORS OR KEY PERSONNEL.

AMC: One of the Investors under Prudential ICICI Growth Plan had made investment to the tune of Rs. 50,00,000 undersection 54EB of the Income Tax Act, 1961. In accordance with the legal opinion of the counsel of the Fund, the Fund is of theview that investments under section 54EB of the Income Tax Act, 1961 read with CBDT notification no. 10247 dated December19, 1996 and the Offer Document of Prudential ICICI Growth Plan, the units had to be locked-in for a period of seven yearsfrom the date of investment. However, the Investor had disputed this stand and had filed a petition against Prudential ICICIAsset Management Company Limited as one of the respondents in the Honourable Delhi High court seeking the direction ofthe Court for premature redemption of units. SEBI vide its order dated September 4, 2000, rejected the petitioner’s claim forpremature redemption of units.

The Petitioner has subsequently approached the Securities Appellate Tribunal seeking release of money due upon redemptionof units and payment of interest there on. The matter has been heard by the Tribunal and the Tribunal dismissed the petitionof the investor.

The investor has, once again, filed a writ in the High Court of Delhi challenging the order of the Tribunal. This matter was listedbefore Hon’ble Delhi High court for final arguments in the regular hearing list.

Mr. K S Mehta – A Director of AMC:

Mr. K S Mehta has been made party in some of the cases relating to dishonour of cheques issued by M/s. Paam PharmaceuticalsLtd, Delhi, in which he was a Director. The dishonour of cheques took place after he had resigned from the Board. He has neverheld any shares in the company nor he was involved in any day-to-day affairs of the company. The matters are sub-judice.


92

ICICI Bank Ltd.:

There are no litigations whose likely outcome will have a material adverse effect on the operations of the Company. However,following are the pending litigation/disputes/defaults etc. against ICICI Bank as on December 16, 2002, listing out criminalprosecutions launched against ICICI Bank and/or its working Directors and Suits filed against ICICI Bank involving a claimamount of Rs. 10 lacs and more. (Claims involving an amount of less than Rs. 10 lacs are produced in the table below).

1. Three criminal complaints have been filed against ICICI Limited (since merged with ICICI Bank Limited) before theMetropolitan Magistrate, Mumbai, under the Maharashtra Private Security Guards Act, 1981 on technical grounds thatsecurity guards have been engaged from exempted security agencies even though ICICI Bank Ltd is registered with theSecurity Guards’ Board. ICICI Bank Ltd has earlier replied to the notices stating that registration is only in respect of ICICIBank’s residential quarters at Andheri and not in respect of other establishments of ICICI Bank Ltd.

2. Two criminal complaints have been filed against ICICI Bank Limited before the Metropolitan Magistrate, Mumbai, underthe Maharashtra Private Security Guards Act, 1981, on technical grounds that security guards have been engaged fromunexempted security agencies. ICICI Bank Ltd has taken a stand that the exemption of security agencies continued onaccount of High Court Order.

3. One case was filed by the Union of Security Guards at Bandra Kurla Complex against ICICI Limited (since merged withICICI Bank Limited) in the Industrial Court claiming difference in wages on the ground that ICICI Bank Ltd is engagingsecurity guards, which is not correct. ICICI Bank Ltd has filed a detailed reply inter alia pointing out that the engagementof security guards was for temporary period, which came to an end on September 30,2000. The Union had filed a writpetition in the Bombay High Court against the Order of the Industrial Court vacating the earlier status quo order, whichhas been dismissed. The appeal filed by the Union in the Bombay High Court (Division Bench) has been dismissed. TheUnion has withdrawn the case from the Industrial Court. The Union has raised an industrial dispute and thereafter hasfiled another writ petition in Bombay High Court inter alia seeking direction for reference of the industrial dispute toIndustrial Tribunal and restraining ICICI Bank Ltd from terminating the security guards. No stay has been granted and theearlier order for maintaining status quo has expired. The said industrial dispute has been referred to the IndustrialTribunal.

4. Walsons Industries Products Inc. has filed in the Mumbai High Court a suit against ICICI Limited (since merged with ICICIBank Limited) for recovery of US$653,000 alleging that three bills should be paid by ICICI Bank Ltd in terms of a letter ofcredit as done in the case of five previous bills since they formed part of the same transaction. ICICI Bank Ltd has put upa defence stating that all documents received through Bank of Nova Scotia are on collection basis, each one of them beingan independent transaction by itself without any supporting commitment from ICICI Bank Ltd through the letter of credit.The court has granted us unconditional leave to defend the case.

5. Municipal Corporation of Greater Mumbai (BMC) has filed 5 cases against ICICI Bank for violating of Section 471 of theBMC Act read with Sec. 328-A on ground of non-payment of license fees for the illuminated sign boards at ICICI Bank’sATM centres. ICICI Bank filed a Writ Petition challenging the applicability of the provisions of Sec. 328 & 328-A of BMCAct in respect of the ATM Centres. The Writ Petition stood dismissed. As against the dismissal order, ICICI Bank filed aSpecial Leave Petition on November 14, 2002 in the Supreme Court.

6. A suit has been filed by M.B. Industries Limited a with the High Court at Kolkata claiming a decree of Rs.10.25 crores fromICICI Limited (since merged with ICICI Bank Limited), IDBI and IFCI in 1997. ICICI Bank’s share of the total claim amountis approximately Rs. 2 crores. The Kolkata High Court has not granted any relief to the company. However leave wasgranted to ICICI Bank, IDBI and IFCI to file recovery suits against the the company. IDBI as the lead, has filed joint suit withICICI Bank and IFCI before DRT, Kolkata, against the company. ICICI Bank’s claim in the suit is Rs. 191 lakhs. IDBI as thelead, has filed application u/s 22 (1) of SICA before the BIFR for permission to continue with legal proceedings against thecompany. The BIFR has recently granted permission to continue with legal proceedings against the company. The BIFR hasrecently granted permission to continue with legal proceedings against the company. The suit is adjourned to January 17,2003.

7. Shri Vijay Shankar Prasad one of the debenture holder of of Lloyds Finance & Investment Co. Ltd. had filed a Criminalcomplaint against the company its officials and has also impleaded Shri K V Kamath, MD & CEO of ICICI Bank Ltd.Summons were issued for personal appearance of Shri Kamath against which we have filed an application under Section205 of CRPC before the Magistrate Court and the same has been allowed. We have also filed criminal revision petitionbefore the Sessions Judge and the Hon’ble Judge has admitted the revision application, called for the records from theMagistrate Court and hence the proceedings before the Magistrate Court has been stayed. The matter is posted onJanuary 3, 2003.

8. A criminal complaint has been filed before the Metropolitan Magistrate at Ahmedabad by a Debenture holder of WesternIndia Shipyards Limited, against the Company, its Directors and against us as Debenture Trustees. The basic complaintarises out of forfeiture of amounts paid by the Debenture holder for Partly Convertible Debentures allotted to her sincecall money has not been paid. This is a civil matter and the complaint is likely to be dismissed. ICICI Bank Ltd has filed apetition in the Hon’ble High Court of Gujarat for quashing of the criminal complaint. The Hon’ble High Court of Gujarathas stayed the criminal proceedings qua ICICI Bank Ltd and its Nominee Director.


93

9. The Peerless General Finance & Invest. Co. Ltd., one of the debenture holder of Essar Oil Ltd. (in which ICICI Ltd. which hasbeen merged with ICICI Bank Ltd. (ICICI Bank) is acting as trustees) has filed a suit against Essar Oil Ltd. and others beforethe City Civil Court, Calcutta for non-receipt of redemption amount and interest. ICICI Bank has been impleaded asDefendents. We have filed our Written Statement before the City Civil Court, Kolkata.

10. A suit was filed by Anagram Finance Limited in November 1998 for recovery of a sum of Rs.6.83 crores from EZY SlideFasterners Limted. Summonses have been served on the EZY Slide Fasterners Limted. They have not filed appearance andICICI Bank is going to pray for a decree. EZY Slide Fasterners Limited filed a separate suit for recovery of Rs 7.18 crores,being the loss allegedly suffered by them on account of breach by Anagram of Subscription Agreement dated April4,1995 for subscribing to 420,000 Zero Interest Fully Convertible Debentures. The matter has not come up for argumentstill date.

11. The Union of contract labourers has raised an industrial dispute and thereafter filed a writ petition in the Bombay HighCourt inter alia seeking direction for reference of the industrial dispute to the Industrial Tribunal and for continuation ofarrangement of payment of wages in the meantime beyond December 31, 2001. However, the High court has notextended the date of the said arrangement. The said industrial dispute has been referred to the Industrial Tribunal.

12. A complaint was filed against Wipro Limited and all its Directors including Mr. K.V. Kamath, in his capacity as NomineeDirector on the Board Wipro Limited before the Court of Judicial Magistrate, Bhavanagar by the Gujarat Pollution ControlBoard alleging that effluents were being discharged without proper treatment. Shri K. V. Kamath is Managing Directorand CEO of ICICI Bank Limited. Shri K.V. Kamath was not a director of Wipro Limited as on the date of alleged offence.Special Leave Petition on behalf of the directors is filed before the Supreme Court challenging the order of the High Courtof Gujarat dismissing the application for quashing the said complaint. The Special Leave Petition has been admitted andthe criminal complaint has been stayed.

13. A shareholder of erstwhile ICICI since merged with ICICI Bank Ltd. had filed a complaint before the Consumer RedressalForum, Hyderabad District against ICICI Infotech Services Limited regarding transfer of five shares inspite of stop transferrequest by him. The District Forum dismissed his complaint. The shareholder appealed against the Order of the DistrictForum and the appeal was admitted by the A.P State Consumer Disputes Redresal Commission and directed ICICI BankLtd to pay compensation and costs. An amount of Rs. 12,500/- was accordingly paid to the complainant . However, theshareholder also has filed a criminal complaint against ICICI Bank Ltd and ICICI Infotech Services Ltd, before the XIMetropolitan Magistrate, Secunderabad and the The Hon’ble magistrate has referred the matter to Marredpally PoliceStation, Secunderabad for investigation. We have filed a quash petition before the Hon’ble High Court of Andhra Pradesh(APHC) for quashing the criminal complaint filed before the XI Metropolitan Magistrate, Secunderabad and APHC hasgranted stay on the investigations being undertaken by the police department till further orders.

14. ICICI Bank Ltd has filed a joint suit together with other banks and financial institutions in DRT Delhi against EsslonSynthetics Ltd. and its Managing Director (in his capacity as guarantor) for recovery of dues, The guarantor has filed acounter claim for an amount of Rs. 100 crore against ICICI Bank Ltd and other parties to the suit who were signatories tothe hiving off arrangement of the Company’s Fibres Division and LML Limited (Scooters Division) into separate companies.

15. A joint suit was filed by all lenders with IFCI as the lead against Best Boards Limited for recovery of dues in DRT, Delhi. TheCompany has filed a counter claim of Rs. 600 lacs against all lenders (including ICICI Bank Ltd) on the ground that IFCI,as the lead institution, refused to give its consent for sale of the plant & machinery and has alleged that there wereprospective buyers who were willing to pay a sum of Rs. 600 lacs thereby causing loss to the Company.

16. Pelicorp Limited has filed a criminal complaint against ICICI Bank Limited and Mr. H.N.Sinor, Joint Managing Director ofICICI Bank Limited and the writ petition has been filed for quashing the said complaint and high court has grantedinterim stay on the criminal complaint.

17. A complaint was filed against Wipro Limited and all its director including Mr. Nachiket Mor, in his capacity as NomineeDirector on the Board of Wipro Limited before the Court of Judicial Magistrate, Jalgaon by the Food Inspector, Food andDrug Administration alleging that the Vanaspati produced did not contain the specified requirements. Mr. Nachiket Moris Executive Director of ICICI Bank Limited. Special Leave Petition on behalf of the Directors is filed before the SupremeCourt Challenging the order of the High Court of Maharashtra dismissing the application for quashing the said complaint,the same is admitted and the criminal complaint has been stayed.

18. A Criminal Complaint has been filed against ICICI Bank Limited and Mr. H.N. Sinor, Joint Managing Director of ICICI BankLimited before the Chief Judicial Magistrate, Jaipur for offense for wrongful dishonor of cheques. We have filed revisionbefore the High Court at Jaipur. The Hon’ble Court was pleased to admit the revision and stay the proceedings pendingbefore the Chief Judicial Magistrate.

19. Shri Madan Gopal one of the debenture holders of Modern Denim Ltd. has filed a criminal complaint against thecompany its officials and has also impleaded Shri N Vaghul, Chairman of ICICI Bank Ltd. Summons were issued forpersonal appearance of Shri Vaghul against which ICICI Bank has filed an application under Section 205 of CrPC beforethe Magistrate Court (enclosing a medical certificate) and the same has been allowed. We have also filed a criminalrevision petition before the Sessions Judge and the Hon’ble Judge has admitted the revision application, called for therecords from the Magistrate Court and hence the proceedings before the Magistrate Court have been stayed. The matteris posted on January 02, 2003.


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20. A Criminal Complaint has been filed before the Metropolitan Magistrate’s 26th Court at Borivli, Mumbai by Ms DipaliGopani against ICICI Home Finance Company Limited, Shri K V Kamath, Shri Vaghul, Smt Gupte, Shri S Mukherji, SmtMorparia, and certain other Directors of erstwhile ICICI Limited. A Criminal Application has been filed on behalf of thesaid five Directors and all other Directors in the Bombay High Court for quashing the complaint and in the interim for stayof the complaint against the Directors. The High Court has disposed of the said Criminal Application on December 13,2002, after recording the statement of the Complainant that she would be withdrawing the Complaint against allDirectors except those who are Directors of ICICI Home Finance Company Limited.

21. On April 12, 1999 ICICI had filed a suit before Hon’ble Bombay High Court (being Suit no 2203 of 1999) against MardiaChemicals Limited [MCL] for recovery of outstanding amount of Rs 135 crores (approx). Thereafter on July 16, 2002 ICICIissued a notice under the Securitisation And Restructuring Of Financial Assets & Enforcement of Security Interest Ordinance,2002 demanding payment of outstanding amount of Rs 293.49 crores. Thereafter on August 30, 2002 MCL has filed asuit in the City Civil Court at Ahmedabad against ICICI Bank Limited, Shri K V Kamath & Smt Lalita D Gupte for purportedamount of Rs.56,31,44,00,000/-. We have been advised that the suit filed is not tenable, bad in law and motivated stepsbeing adopted by MCL to thwart our recovery proceedings. We have filed an application under Order 7 Rule 11 of theCode of Civil Procedure for the dismissal of the suit on the grounds of limitation, jurisdiction and no cause of actionagainst ICICI Bank Limited, Shri Kamath and Smt Gupte. We have been granted time to file our written statement tillDecember 17, 200. The matter is coming up for hearing on December 11, 2002.

22. On October 30, 2002, Shin-etsu Chemicals Private Limited [Shin-etsu] filed a suit before Supreme Court of New York(being Complaint no. 603711of 2002) against ICICI Bank Limited [ICICI Bank] for compensatory damages of US$ 1,000,000plus interest for the alleged dishonouring by ICICI Bank of the letter of credit issued by ICICI Bank in favour of Shin-etsu.ICICI Bank has not agreed to make payments under the Letter of Credit as one of the terms of the Letter of Credit has notbeen complied with. We have on record a legal opinion from our Solicitors confirming that ICICI Bank was well withintheir rights not to make payments under the Letter of Credit. The reply to the complaint has been drafted by our counselwhich is being filed.

23. A criminal complaint has been filed by the Inspector of Legal Metrology at Andheri, Mumbai Court for violation of Rule8(1)(a) and (b) of Weights and Measures (Packaged Commodities) Rules, 1977 against Godrej Consumer Products Limitedand all its directors including Mr. Anupam Puri, a non-whole-time director of ICICI Bank, for not keeping the areasurrounding the quantity declaration on a pack of Shaving Cream free from printed information. The offence iscompoundable under the provisions of the Weights and Measures (Packaged Commodities) Rules, 1977 and the saidCompany has applied for the same.”

24. In April 2001, a suit has been filed against Vision Organics Limited for recovery of Rs. 31.27 crores before DRT, Ahmedabad.In the said suit the Company has filed a counter claim against the Bank for Rs 23 Crores and recently paid Court Fees afterthe Bank raised the objection.

(Rs. in crores)

Sr. No. Nature of claim Cases with Cases with noMonetary Claim specific

monetary claim

Number Amount Number

1. Suits/legal proceedings filed by shareholders/ 214 0.28 232bond holders of ICICI Bank Limited

2. Suits/legal proceedings filed by debenture holders 12 11.29 190against ICICI Bank Limited as Debenture Trustees.

3. Suits filed by lessees/hirers seeking injunction against 139ICICI Bank Limited taking possession of vehiclespursuant to lease/hire purchase agreements and othersuits filed by retail customers.

4. Miscellaneous suits/ legal proceedings in the course of 63 0.53 50business.

ANY DEFICIENCIES IN THE SYSTEMS AND OPERATIONS OF THE SPONSOR OF THE MUTUAL FUND OR ANY COMPANYASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH AS THE AMC OR THE TRUSTEE COMPANY WHICH SEBI HASSPECIFICALLY ADVISED TO BE DISCLOSED IN THE OFFER DOCUMENT, OR WHICH HAS BEEN NOTIFIED BY ANY OTHERREGULATORY AGENCY.

Capital Markets : ICICI Bank acts as bankers to the market offerings of companies on account of raising of equity or debt, buyback of equity and for acquisition of equity on account of takeovers. These companies are required to maintain the subscriptionfunds with the bankers to the offering until the allotment of shares/buy back of shares and the refund of excess subscriptionis completed. This process generally takes about 15 to 30 days, resulting in short-term deposits with ICICI Bank.

SEBI had issued a notice in the matter of North Star Gems (India) Ltd to show cause as to why Bhadra, Ahmedabad branch ofthe erstwhile Bank of Madura should not be suspended from conducting merchant banking activities for a period of 6


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months. ICICI Bank filed its detailed reply with SEBI. SEBI in terms of their Order dated October 16,2002 took note of the factthat RBI had not indicated any malafide actions on the part of bank officials and also the fact that the Bank had takendisciplinary action against the concerned employees and issued a warning to Bhadra Branch of ICICI Bank with furtherdirection to that Branch to act with due skill, care and diligence while acting as Banker to an Issue.

Debenture Trusteeship: The erstwhile ICICI Limited had provided debenture trusteeship services since 1983, and acted astrustee for the holders of convertible and non-convertible debentures issued in the public and private markets. During SEBI’sinspection of the Debenture Trustee operations of the erstwhile ICICI Limited, observations on certain shortcomings weremade by SEBI in its inspection report. The erstwhile ICICI Limited had initiated suitable action based on SEBI report and hadsubmitted a detailed reply to SEBI. The matter is being examined by SEBI. The erstwhile ICICI Limited had subsequently, witha view to exit this business, been divesting the portfolio of debenture trusteeship in favour of other debenture trustees. ICICIBank continues to act as a debenture trustee for the remaining companies for which the erstwhile ICICI Limited were debenturetrustees. ICICI Bank has been permitted by SEBI to act as a debenture trustee.

SUBSIDIARIES

1. ICICI Securities and Finance Company Limited (ICICI Securities): ICICI Securities was set up in February 1993 to provideinvestment-banking services to investors. ICICI Securities has three main business lines-

Corporate advisory and Mergers and Acquisitions

Fixed income; and

Equities

With the merger of erstwhile ICICI Limited with ICICI bank becoming effective, ICICI Bank holds 99.92% of the sharecapital of ICICI Securities. ICICI Securities is a Merchant Banker, Underwriter and Portfolio Manager registered with SEBI.Also ICICI Securities is a Primary Dealer registered with RBI engaged in acquisition and trading of Government Securities.

Currently ICICI Securities provides services such as issue management underwriting, placement of debt and equity,corporate advisory services including mergers, amalgamations and spin offs, capital structuring, valuations and fairnessopinion reports and as a Primary Dealer actively involved in money market operations, and trading in securities. It alsoprovides specialised services in the areas of private equity syndication and privatisation of government entities. In addition,ICICI Securities has a research team, which identifies investment opportunities and provides timely investment advice toclients. ICICI Securities is amongst the largest arranger of funds in Debt and Equity segments and also amongst theleading advisors in Mergers and Acquisitions. It is also amongst the highest capitalized Investment Banks in India with networth of Rs.3,191.80 million as on March 31, 2002.

ICICI Securities was awarded two penalty points by SEBI for non-submission of Letter of Offer in the Rights issues ofSiroplast Limited and Thane Electricity Supply Co. Ltd. during 1995 and one penalty point for non-submission of post-issue report in the Public Issue for Shree Rajasthan Texchem Ltd. Further, warning letters were issued by SEBI on October2, 1998 for lack of due diligence in the issue of Hindustan Motors Ltd. and on July 11, 2000 in connection withdissemination of information to investors in the issue of Cadila Healthcare Limited.

ICICI Securities was issued a warning letter by RBI on May 30, 2001 on the bouncing of SGL form on a governmentsecurities transaction on May 4, 2001. Before this, RBI had issued four such letters on January 9, 1997, February 23, 1999,June 13, 2000 and January 18, 2001. However penal action is initiated by RBI only in case of three consecutive instancesof bouncing in the period of six months i.e. April-Sept. and /or October-March. Hence no penal action was taken in aboveinstances.

RBI reduced the liquidity support limit for ICICI Securities by Rs.25 crore for a period of three months from October 7,2002 until January 6, 2003, for delayed submission of bid in the treasury bill auction conducted on September 25, 2002.Earlier, a reduction in the liquidity support limit by Rs.1.50 crore was imposed for shortfall in bidding commitment onApril 7, 2000, which was reset to original level with effect from October 9, 2000.

2. ICICI Investment Management Company Limited: ICICI Investment Management Company Limited (“ICICI InvestmentManagement”) had been incorporated on March 9, 2000 as a 100% subsidiary of erstwhile ICICI Limited (ICICI) andobtained certificate of commencement of business on March 14, 2000. The authorised share capital of ICICI InvestmentManagement is Rs.25 crore and the paid-up share capital is Rs.10,00,07,000. Consequent to the amalgamation of ICICIwith ICICI Bank becoming effective on May 3, 2002, ICICI Investment Management has become a 100% subsidiary ofICICI Bank.

The main object of ICICI Investment Management is to carry on the business activities in respect of the management ofmutual funds, unit trusts, offshore funds, pension funds, provident funds, venture capital funds, insurance funds, and toact as managers, consultants, advisors, administrators, attorneys, agents, or representatives of or for mutual funds, unittrusts, offshore funds, pension funds, provident funds, venture capital funds or insurance funds formed or established inIndia or elsewhere by ICICI Investment Management or any other person (whether incorporated or not) or by anygovernment, state, local authority, association, institution (whether incorporated or not) or any other agency or organisationand to act as Financial Advisors and Investment Advisors, and to render such financial management, financial consultancyand advisory services to individuals, companies, corporations, trusts and other entities as supplemental activities of ICICIInvestment Management and as do not conflict with the fund management activities.


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ICICI Investment Management is the asset management company of “ICICI Securities Fund”, a Mutual Fund registeredwith the Securities and Exchange Board of India.

SEBI had issued a warning letter on May 22, 2000 to ICICI Investment Management for lack of due diligence whilesubmitting the offer document for ICICI CBO Fund-I.

Prudential plc.

Financial Services Authority (FSA)– Scottish Amicable

Following a visit in January 2001 the FSA raised concerns about the implementation by Scottish Amicable Life of requirementsissued by the Personal Investment Authority in December 1999 concerning the sales of mortgage endowment policies.

The Company agreed to review policies sold since that date; the matter has not been concluded.

FSA - Prudential

The Prudential Assurance Company Limited has twice been criticised for failing to meet its pension mis-selling review deadlines.The first occasion was by the FSA in 1997.

In December 1997, the FSA issued a section 60 notice and a public statement criticising the Company’s compliance arrangementswith respect to its direct sales force.

London Stock Exchange

Prudential Corporation plc was publicly criticised by the London Stock Exchange in 1995 for the manner in which it dealt withauthorisation of a dealing by its then chief executive in Prudential shares.

ANY ENQUIRY/ADJUDICATION PROCEEDINGS UNDER THE SEBI ACT AND THE REGULATIONS MADE THERE UNDER, AGAINSTTHE SPONSOR OF THE MUTUAL FUND OR ANY COMPANY ASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH AS THEAMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEY PERSONNEL OF THE AMC:

Prudential plc

PIA investigations:

Prudential Assurance Company Limited: Following an article in “The Guardian” in August 1998 concerning possiblepensions mis-selling, the PIA will be investigating 2 cases.

SIB cases

Prudential Assurance Company Limited: A number of writs were issued from 1995 to 1997 in connection with the mis-selling of personal pensions, mainly where a personal pension was taken out in preference to occupational scheme membershipbut in some cases where an occupational scheme benefit was transferred to a personal pension.

Some were for protective purposes pending review of the sale under the SIB guidance; others proceeded, and many havereached settlement via consent orders on the basis of payment of full compensation but without an admission of liability.

ITC Advertising Complaints Reports

(Pru Banking): Complaints were received in November/December 1997 from 3 viewers. An advertisement for a Prudential 60Day Notice Account offered a rate of 7.5% gross per annum on £10,000 and included the statement “you won’t find a betterrate of interest for £10,000”.

Two viewers objected that a “better rate” of 7.6% could be obtained on £10,000 in a Legal and General 60 day NoticeAccount. The third viewer objected that the rate of 7.5% in fact included a 1% loyalty bonus, which only applied after £10,000had been held in the account for 12 months.

Assessment: Following a complaint on 17 October 1997, the ITC drew the Teletext’s attention that a higher rate of interest wasapparently being paid on a Legal and General account comparable to the Prudential’s. Teletext immediately removed thePrudential advertisement from air pending investigations. These revealed that whilst Legal and General had introduced a rateof 7.6% on 10 October 1997, Prudential had not matched this rate until 17 October 1997. In addition, whilst Prudential’sadvertising agency had, on 15 October 1997, requested Teletext to amend the rate to 7.6% from 20 October 1997, pressadvertising for the Prudential account had reflected the higher rate on 17 October 1997.

Teletext confirmed that the headline rate was stated gross of a 1% loyalty bonus, which was only paid if the account was stillopen after 12 months and only two withdrawals had been made. They agreed that this was a significant condition whichshould have been made clear and instructed that subsequent advertising for this Prudential account should include details.

The ITC agreed that the advertising had been misleading during the period the Legal and General had been offering a higherrate than Prudential and considered that the omission of details about the 1% loyalty bonus had also rendered the advertisingmisleading.


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Teletext had already removed the advertisement from air and would not permit it to return until the relevant amendments weremade.

The complaints were upheld.

Complaint via Trading Standards Department

The Prudential Assurance Company Limited: An objection (in 1998) was received via the Trading Standards Department toa leaflet that claimed “Save around £100 on home insurance”. The complainant, who was given a quote for £16 more thanhis existing policy, challenged whether the savings were generally attainable.

Adjudication: The complaint was upheld. The advertisers submitted a summary of their research, which showed that ninetenths of customers who had switched their home insurance to Prudential had saved an average of £97.99. They argued thatthe claim was neither a price promise nor a guarantee that Prudential would always be the cheapest. The Authority noted thatthe leaflet stated elsewhere that “You could save money …..” It considered, however, that the claim implied that switching tothe advertisers’ household insurance policies always saved customers money. Because that was not true, the Authority askedthe advertisers not to use the claim again.

—————————————————————————————————————————————————-

Complaints about advertisements in the national press

1 The Prudential Assurance Company Limited: An objection (in 1998) to a national press advertisement that washeadlined “Prudential announce a rate change of great interest to savers” and featured a table of interest rates for theadvertisers’ 60 Day Notice Account . One column of the table was headed “Monthly Rates (inc loyalty bonus)*” andquoted annual interest rates for those who have their interest paid monthly. A footnote stated “The rates include a loyaltybonus of 1% gross pa (0.8% net pa) calculated daily and paid annually on the anniversary date. This is paid provided theaccount is still open and in the preceding 12 months no more than two withdrawals have been made and the balance hasnot been less than £2,000.” The complainant objected that the advertisement was misleading because the loyalty bonuswas not paid until the anniversary date.

Adjudication: Complaint upheld. The advertisers said they believed the footnote explained that monthly interest wascalculated excluding the loyalty bonus but accepted that the presentation of the advertisement could be confusing. TheAuthority considered that the advertisement was misleading and it welcomed the advertisers’ intention to amend futureadvertisements to state monthly interest rates without the loyalty bonus, which they will show separately.

The Prudential Assurance Company Limited: An objection (in 1998) to a national press advertisement that was headlined“Why you’ll be better off with Prudential because we’re No. 1 in our field”. The complainant challenged the claim.

Adjudication: Complaint upheld. The advertisers submitted evidence that showed they were number one in some but not allthe aspects of their pension and life insurance business. The Authority accepted that the advertisers claim was acceptable inrelation to pensions and life insurance but considered that their information did not adequately substantiate the generalclaim that the advertisers were “No. 1” in their field. The Authority asked the advertisers to specify in future the sectors inwhich they could show they were “No. 1”.

The Prudential Assurance Company Limited (PAC): LAUTRO approached PAC in April 1994 with a request for its co-operation in an informal review to validate LAUTRO’s pension rules for the future. Prudential agreed to co-operate. LAUTROsubsequently expressed various concerns about the Prudential’s approach to pension transfers. The review was placed on aformal footing in March 1995. Following further discussions with LAUTRO, LAUTRO agreed not to take any disciplinary actionand no charges were brought.

State of Florida (Division of Securities & Finance) fined National Planning Corporation (NPC) $10,000 for failing to register twobranch offices. NPC were also required to sign a Stipulation and Consent Agreement.

OPRA fined Prudential Nominees Ltd (PNL) £5000 following a determination regarding the Ledo Limited Pension Plan (a SSAS)for which PNL is pensioneer trustee. The fine is in respect of failing to appoint an auditor and other procedural failures. Wehave asked for reconsideration at OPRA Council meeting in March 2002.

National Planning Corporation (NPC) have established a $6m claimants funds after agreement with New York AttorneyGeneral (NYAG). This follows NYAG investigation into sale of payphones and leaseback arrangements of ETS payphones byrepresentatives of NPC. NYAG allege that the sale constituted an unregistered securities offering.

Jackson National Life (JNL) have reached a settlement of Haggan case and the Andrews Dunn and Gales cases linked to it fora sum of $10m. Finalised in January 2002 - the terms of the settlement are confidential and should not be disclosed to thirdparties.


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E) BORROWING BY THE MUTUAL FUND

Under the Regulations, the Fund is allowed to borrow to meet its temporary liquidity needs of the Fund for the purpose ofrepurchase, redemption of units or payment of interest or dividend to the Unitholders. Further, as per the Regulations, theFund shall not borrow more than 20% of the Net Assets of the Scheme and the duration of such borrowing shall not exceeda period of six months. The Fund may raise such borrowings after approval by the Trustee from any of its Sponsors/Associate/Group Companies/Commercial Banks in India or any other entity at market related rates prevailing at the time and applicableto similar borrowings. The security for such borrowings, if required, will be as determined by the Trustee. Such borrowings, ifraised, may result in a cost, which would be dealt with in consultation with the Trustees.

No borrowings have been raised under any of the Schemes of the Fund, as of the date of this Offer Document.

F) STOCK LENDING BY THE MUTUAL FUND

Subject to the Regulations and the applicable guidelines, the Scheme and the Plans thereunder may, if the Trustee permits,engage in stock lending. Stock lending means the lending of stock to another person or entity for a fixed period of time, at anegotiated compensation. The securities lent will be returned by the borrower on expiry of the stipulated period. Please seepage 55 on risks attached with stock lending. Each Plan, under normal circumstances, shall not have exposure of more than50% of its net assets in stock lending. The Plan may also not lend more than 50% of its net assets to any one intermediary towhom securities will be lent. The AMC shall report to the Trustee on a quarterly basis as to the level of lending in terms of value,volume and the names of the intermediaries and the earnings/losses arising out of the transactions, the value of collateralsecurity offered etc. The Trustees shall offer their comments on the above aspect in the report filed with SEBI under sub-regulation 23(a) of Regulation 18.

G) POLICY ON OFFSHORE INVESTMENTS BY THE SCHEME :

SEBI Regulations currently permit mutual funds to invest in ADRs/GDRs issued by Indian companies and notified foreignsecurities subject to certain prescribed limits. SEBI vide its circular no. SEBI/MFD/CIR No.02 /6855/ 03 dated April 4, 2003 haveallowed the mutual funds to make investments in equity of listed overseas companies which have a shareholding of at least10% in an Indian company listed on a recognised stock exchange in India (as on January 31 of the year of investment).

Accordingly, SEBI has permitted each mutual fund to invest up to 10% of their net assets as on January 31, 2003 forinvestment in foreign securities, subject to a maximum of US$ 50 million for each mutual fund irrespective of the size of theassets as specified in SEBI circular MFD/CIR/18/21826/2002 dated November 7, 2002 remains unchanged.

In terms of Annual Monetary and Credit Policy for the year 2003-2004, RBI has decided to accord general permission tomutual funds for their overseas investments within the overall cap - US $ 1.0 billion, once SEBI’s approval has been obtained.This general permission will be available until further notice.

It is the Investment Manager’s belief that investment in ADRs/GDRs/ overseas securities offer new investment and portfoliodiversification opportunities into multi-market and multi-currency products. However, such investments also entail additionalrisks. Such investment opportunities may be pursued by the Investment Manager provided they are considered appropriate interms of the overall investment objectives of the Scheme and the Plans thereunder. Since the Scheme and the Plans thereunderwould invest only partially in ADRs/GDRs/overseas securities, there may not be readily available and widely accepted benchmarksto measure performance of the Scheme and the Plans thereunder. To manage risks associated with foreign currency andinterest rate exposure, the Fund may use derivatives for efficient portfolio management including hedging and in accordancewith conditions as may be stipulated by SEBI/RBI from time to time.

Offshore investments will be made subject to any/all approvals, conditions thereof as may be stipulated by SEBI/RBI andprovided such investments do not result in expenses to the Fund in excess of the ceiling on expenses prescribed by andconsistent with costs and expenses attendant to international investing. The Fund may, where necessary, appoint otherintermediaries of repute as advisors, custodian/ sub-custodians etc. for managing and administering such investments. Theappointment of such intermediaries shall be in accordance with the applicable requirements of SEBI and within the permissibleceilings of expenses. The fees and expenses would illustratively include, besides the investment management fees, custodyfees and costs, fees of appointed advisors and sub-managers, transaction costs, and overseas regulatory costs.

H) INTER-SCHEME TRANSFERS

The Fund may undertake inter-Scheme transfers under the Scheme. If such transfers are done they will be effected based on theclosing prices of the Principal Stock Exchange and in conformity with Regulations. In case of securities which are not traded onthe Principal Stock Exchange / any other exchange, the inter-Scheme transfers will be affected based on fair valuation to bearrived at by the AMC with the approval of the Trustee.


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J) GENERAL INFORMATION

Power to make Rules

Subject to the Regulations, the Trustee may, from time to time, prescribe such terms and make such rules for the purposeof giving effect to the Scheme with power to the AMC to add to, alter or amend all or any of the terms and rules that maybe framed from time to time, with the prior approval of the Trustees.

Power to remove Difficulties

If any difficulty arises in giving effect to the provisions of the Scheme, the Trustee may, subject to the Regulations, take anyaction not inconsistent with such provisions, which appears to it to be necessary, desirable or expedient, for the purposeof removing such difficulty.

Scheme to be binding on the Unitholders

Subject to the Regulations, the Trustee may, from time to time, add or otherwise vary or alter all or any of the features ofinvestment plans and terms of the Scheme after obtaining the prior permission of SEBI and the Unitholders (wherenecessary), and the same shall be binding on all the Unitholders of the Scheme and any person or persons claimingthrough or under them as if each Unitholder or such person expressly had agreed that such features and terms shall beso binding.

DOCUMENTS AVAILABLE FOR INSPECTION

1. Memorandum and Articles of Association of the Trustee Company and the AMC

2. Custodian Agreement between Trustee and HDFC Bank

3. Investment Management Agreement

4. Trust Deed and amendments thereto

5. Mutual Fund Registration Certificate

6. Consent of Registrar to act in the said capacity

7. Consent of Auditors to act in the said capacity

8. Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereof from time totime.

9. Indian Trust Act, 1882

10. Letter Ref. No. EC CO OID. MF/19.16.151/99-2000 dated May 26, 2000 and letter no. EC. CO.OID.606/19.16.151/2000-2001 dated August 18, 2000 read with Letter Ref. No. EC CO OID. 5285/19.16.151/2000-01 dated May 25,2001 issued by Reserve bank of India granting approval for investment in ADRs/ GDRs.

Notwithstanding anything contained in the offer document the provisions of the SEBI (Mutual Funds) Regulations,1996 and the Guidelines thereunder shall be applicable.

Note: The Scheme under this Offer Document was approved by the Directors of Prudential ICICI Trust Limited by circulation onFebruary 8, 2000.

For and on behalf of the Board of Directors of

Prudential ICICI Asset Management Company Limited

Shailendra BhandariManaging Director

Place : MumbaiDate : September 24, 2003