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Prudential ICICI Child Care Plan

The particulars of Prudential ICICI Child Care Plan, 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.

Issue of Units of Rs.10/- per Unit at NAV based prices on an on-going basis.

An Open Ended Fund

Offer Document

SMS INVEST to 8558

CALL 1600 22 2273or apply online at www.pruicici.com

Sponsores: Prudential plc (formerly known as Prudential Corporation plc) (through its wholly owned subsidiary, Prudential Corporation Holdings Limited), Laurence Pountney Hill, London EC4R 0HH, UK; and ICICI Bank Limited (erstwhile ICICI Limited), Regd. Office: Landmark, Race Course Circle, Vadodara 390 007, India.

Investment Manager: Prudential ICICI Asset Management Company Limited, Corp. Office: 8th Floor, Peninsula Tower, Peninsula Corporate Park, Ganpatrao Kadam Marg, Off Senapati Bapat Marg, Lower Parel, Mumbai 400 013. Regd. Office: 206 Ashoka Estate, 2nd Floor, Barakhamba Road, New Delhi 110 001.

Trustee: Prudential ICICI Trust Limited, Regd. Office: 206 Ashoka Estate, 2nd Floor, Barakhamba Road, New Delhi 110 001.

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Prudential ICICI Mutual Fund

IMPORTANT NOTICE

Investing 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 the Governmentor any other appropriate authority (including tax laws) or other political and economic developments. Consequently, there canbe no assurance that the Scheme offered in this Offer Document would achieve the stated objectives. The NAV of the Units of theScheme may fluctuate and can go up or down. Past performance of the schemes managed by the Sponsors or their affiliates orthe Asset Management Company is not indicative of the future performance of the Scheme nor will the performance of theScheme, 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), have notauthorized 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 Fund may disclose details of the investor’s account and transactions thereunder to those intermediaries whose stampappears on the application form. In addition, the Fund may disclose such details to the Bankers, as may be necessary for thepurpose of effecting payments to the Investor.

Unitholders / investors are requested to read and understand the Offer Document, Key Information Memorandum and riskfactors furnished with the scheme in which they seek to make investments or in which they have invested. Unitholders / Investorsare urged not to rely upon or be misled by any oral promises or statements made by the distributors / intermediaries of theMutual Fund and it is brought to the special attention of investors that the AMC / Mutual Fund will not be liable for mis-statement or communication by agents / distributors which are not previously expressly authorized / approved by the AMC /Mutual Fund.

The AMC, Trust and Prudential ICICI Mutual Fund shall not be responsible for any claims made by the Unitholders / Investorsbased on such oral promises made by the distributors / intermediaries.

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

a) Purchase or sale of securities through any broker associated with the Sponsors or through a firm which is an associate of theSponsor(s) shall not exceed an average of 5% of the aggregate purchases and sale of securities made by the Fund in all itsSchemes in a block of any 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 and thebrokerage or commission paid is also disclosed in the half yearly annual accounts of the mutual fund.

c) 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 its net assets.

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.43.59 and UK£ and Indian Rupee at 1£=Rs.79.3621.

This Offer Document is dated ___, 2005.


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TABLE OF CONTENTS1. Highlights .................................................................................................................................................................. 62. Risk Factors & Special Considerations ..................................................................................................................... 83. Due Diligence Certificate ....................................................................................................................................... 124. Definitions .............................................................................................................................................................. 135. Summary – Prudential ICICI Services Industries Fund ......................................................................................... 156. Constitution of the Mutual Fund ........................................................................................................................... 16

a) The Sponsors .................................................................................................................................................... 16b) The Trustee Company ....................................................................................................................................... 17

i. Directors .................................................................................................................................................... 17ii. Rights and Obligations of the Trustee ....................................................................................................... 18iii. Trusteeship Fees ......................................................................................................................................... 20

c) Management of Asset Management Company (AMC) ..................................................................................... 20i. Board of Directors of the AMC .................................................................................................................. 20ii. Powers, Duties & Responsibilities of the AMC ........................................................................................... 23iii. Key Employees of AMC & relevant experience ........................................................................................... 24iv. Fund Manager ........................................................................................................................................... 27v. Compliance Officer .................................................................................................................................... 27vi. Investor Relations Officer ........................................................................................................................... 27

d) Auditors ............................................................................................................................................................ 28e) Registrar ............................................................................................................................................................ 28f) Custodian ......................................................................................................................................................... 28

7. Investment Objectives & Policies .......................................................................................................................... 29a) Type of the Scheme ........................................................................................................................................... 29b) Investment Objective ......................................................................................................................................... 29c) Investment Pattern and investment policies ...................................................................................................... 29d) Change in Investment Pattern ........................................................................................................................... 30e) Terms of the Scheme ......................................................................................................................................... 30f) Scholarships under Prudential ICICI Child Care Plan ........................................................................................ 32g) Personal Accident Insurance cover for the Resident Applicants ........................................................................ 32h) Changes in Fundamental Attributes ................................................................................................................. 34i) Investment Strategy .......................................................................................................................................... 34j) Portfolio Turnover ............................................................................................................................................. 35k) Procedure followed for investment decisions ................................................................................................... 35l) Exposure to Derivatives ..................................................................................................................................... 35m) Investment Restrictions for the Scheme ............................................................................................................ 37n) Underwriting by the Fund ................................................................................................................................. 38o) Computation of Net Asset Value ....................................................................................................................... 38p) Accounting Policies & Standards ....................................................................................................................... 42

8. Units & The New Fund Offer ................................................................................................................................. 45General Information ................................................................................................................................................ 45a) Minimum Subscription Amount ........................................................................................................................ 45b) Offer Price ......................................................................................................................................................... 45c) Minimum Amount for Application ................................................................................................................... 45d) New Fund Offer Expenses ................................................................................................................................. 45e) Options and Investment plans offered under the Scheme ................................................................................ 45f) Pledge of Units for Loans ................................................................................................................................... 46g) Systematic Investment Plan (SIP) ........................................................................................................................ 46h) Systematic Withdrawal Plan (SWP) ..................................................................................................................... 46i) Who can Invest? ................................................................................................................................................ 46j) How to Apply? .................................................................................................................................................. 47k) Account Statements .......................................................................................................................................... 50l) Redemption of Units ......................................................................................................................................... 50

i. Redemption Price ....................................................................................................................................... 50ii. Applicable NAV .......................................................................................................................................... 50

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iii. Cooling-off period for web based transactions ......................................................................................... 51iv. How to Redeem? ....................................................................................................................................... 51v. Payment of Proceeds .................................................................................................................................. 51vi. Non receipt of email communication by Investors ..................................................................................... 52vii. Redemption by NRIs/ FIIs ............................................................................................................................ 52viii. Effect of Redemptions ............................................................................................................................... 52ix. Fractional Units .......................................................................................................................................... 52x. Signature mismatch cases .......................................................................................................................... 52xi. Right to Limit Redemptions ....................................................................................................................... 52xii. Suspension of Sale and Redemption of Units ............................................................................................ 53xiii. Permanent Account Number (PAN) ............................................................................................................ 53xiv. Unique Identification Number (UIN) ........................................................................................................... 53xv. Dormant Account Locking ......................................................................................................................... 53

9. Load Structure, Fees and Expenses ...................................................................................................................... 54a) Load Structure of the Scheme ........................................................................................................................... 54b) Fees and Expenses of the Scheme ..................................................................................................................... 54

i. New Fund Offer Expenses .......................................................................................................................... 54ii. Estimated Recurring Expenses ................................................................................................................... 54

c) New Fund Offer Expenses of the Past Schemes ................................................................................................. 55i. New Fund Offer Expenses – Comparison of Estimated to Actual ............................................................... 55ii. Condensed Financial Information .............................................................................................................. 56

10. Unitholders Rights and Services ........................................................................................................................... 68a) Investors Services .............................................................................................................................................. 68b) Ease of Transactions .......................................................................................................................................... 68

i. Customer Service Centers in major metros ................................................................................................ 68ii. Process transactions in a timely manner .................................................................................................... 68

c) Problem Resolution .......................................................................................................................................... 68d) Information about the Scheme ......................................................................................................................... 68e) NAV Information ............................................................................................................................................... 68f) Disclosure of information under the Regulations ............................................................................................. 69g) Rights of Unitholders of the Scheme ................................................................................................................ 69h) Duration of the Scheme/Winding up ................................................................................................................ 69i) Procedure and manner of Winding up .............................................................................................................. 69j) Tax benefits of investing in the Mutual Fund .................................................................................................... 70

1) To the Fund ................................................................................................................................................ 702) Securities Transaction Tax ........................................................................................................................... 703) To the Unitholders ..................................................................................................................................... 71

A. Income received from mutual fund ..................................................................................................... 71B. Long term capital gains on transfer of units ....................................................................................... 71

i. For Individuals and HUFs ............................................................................................................. 71ii. For Partnership Firms, Non-Residents, Indian Companies/Foreign Companies ........................... 71iii. For Non-resident Indians ............................................................................................................. 71iv. For Overseas Financial Organisations and Foreign Institutional Investors

fulfilling conditions laid down under section 115AB (Offshore Fund ......................................... 71C. Short term capital gains ...................................................................................................................... 71

D. Tax deduction at source ...................................................................................................................... 72

E. Exemption from tax on capital gains arising on transfer of units held for more than 12 months ...... 73

F. Investments by charitable and religious trusts in the plan .................................................................. 73

G. Wealth Tax Sec. 2 (ea) .......................................................................................................................... 73k) Unclaimed redemption amount ........................................................................................................................ 73

11. Other Matters ........................................................................................................................................................ 74a) Unitholders Grievances Redressal Mechanism .................................................................................................. 74b) Associate Transactions ...................................................................................................................................... 75c) Details of Investment in Companies that hold more than 5% of NAV of Schemes managed by the AMC ....... 82

d) Penalties and Pending Litigations ..................................................................................................................... 86e) Borrowing by the Mutual Fund ......................................................................................................................... 92


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f) Stock Lending by the Mutual Fund ................................................................................................................... 92g) Policy on Offshore Investments by the Scheme ................................................................................................. 92h) Inter-Scheme Transfers ...................................................................................................................................... 92i) General Information ......................................................................................................................................... 92

• Power to make Rules ................................................................................................................................. 92• Power to remove Difficulties ...................................................................................................................... 92• Scheme to be binding on the Unitholders ................................................................................................. 93• Documents available for Inspection ........................................................................................................... 93

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HIGHLIGHTS

� The Sponsors of the Fund are Prudential plc of the United Kingdom (UK) and ICICI Bank Limited (erstwhile ICICI Limited).

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 December 31, 2004, overGBP187 billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as ofDecember 31, 2003.

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 total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after taxof Rs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financialservices to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries andaffiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bankset up its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on itsdomestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdomand Canada, branches in Singapore and Bahrain and representative offices in the United States, China, United ArabEmirates, Bangladesh and South Africa. (Source: Overview at www.icicibank.com).

ICICI Bank was formerly a wholly owned subsidiary of ICICI Ltd, an Indian financial institution.

� Fund Management expertise

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 December 31, 2004, overGBP187 billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as ofDecember 31, 2003.

Prudential ICICI Asset Management Company Limited, the Investment Manager to the Prudential ICICI Mutual Fund,manages assets over Rs. 17,253 crores as of May 31, 2005 through 21 schemes. It is one of the largest asset managementcompanies in the country.

� Investment Objectives: Prudential ICICI Child Care Plan is an open-ended scheme comprising there under two investmentPlans - Study Plan and Gift Plan seeking to generate regular returns and capital appreciation respectively through investmentsin debt and money market instruments and equity and equity related instruments.

� Insurance – The Fund provides personal accident insurance cover to the Resident Applicants / the Parent or Legal Guardianof the Beneficiary Child. Please see Page 32 for details of the insurance Plan and Page 33 for the details of cost on obtainingsuch insurance cover.

� Scholarship Scheme: The AMC has instituted a Scholarship scheme for the benefit of the Unitholders under the Plans.Please see page 32 for further details.

� Transparency – The NAV is calculated and disclosed at the close of every Business Day. In addition the AMC disclosesportfolio of the Plans at quarterly rests on the web site of the AMC www.pruicici.com

� Load – Study Plan and Gift Plan

Entry Load

For all purchases under both the Plans 1.50% of the NAV

Exit Load

If the amount sought to be redeemed under both the Plans is not invested for a period of3 years. 1.00%

If the amount sought to be redeemed under both the Plans is invested for a period of3 years but redeemed before the Unitholder (the beneficiary Child) attains the age of 18 years. Nil

However, the Trustee shall have a right to prescribe or modify the load structure with prospective effect subject to amaximum prescribed under the Regulations.

� High Liquidity - Being an open-ended Scheme, Units may be redeemed on every Business Day at NAV based prices. TheFund will, under normal circumstances, endeavor to dispatch redemption cheques within T+2 Business Days (incase of GiftPlan) and T+1 Business Day (in case of Study Plan) from the date of acceptance of the redemption request at any of theCustomer Service Centers. This service standard will apply only at the centers where RBI handles clearing directly and is ableto transfer funds from Mumbai on a same-day-value basis. In respect of all non-RBI centers, for redemption payments, AMCwill take additional day(s) – not exceeding 3 Business Days- that would essentially be linked to the time taken by banks toclear funds at such Non-RBI centers. All redemptions will be subject to deduction of applicable taxes as per Statues.

� New Fund Offer Expenses - The New Fund Offer expenses to be charged to the Scheme were limited to 2.50% of theamount mobilized during the New Fund Offer Period under Gift Plan and 1.50% under Study Plan. The New Fund Offerexpenses over and above the percentages stated above were borne by the AMC. Under the Regulations, the Fund is entitled


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to charge New Fund Offer Expenses up to a maximum of 6% of initial resources raised under the Scheme.

� Investment Plans and Options - Investors under the Prudential ICICI Child Care Plan have the choice of two Plans viz.,Study Plan and Gift Plan. Both the Plans under the Scheme will have a Cumulative Option. The Trustee may, at a later date,decide to introduce Dividend Option under either of the Plans or both the Plans as is considered necessary

� Repatriation – Repatriation benefits would be available to NRIs/PIOs/FIIs, subject to applicable Regulations notified byReserve Bank of India from time to time. Repatriation of these benefits will be subject to applicable deductions in respectof levies and taxes, as may be applicable at present or in future.

� For details on tax update, please refer page 70 of this document.

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

� Investors are advised to consult their Legal /Tax and other Professional Advisors in regard to tax/legalimplications relating to their investments in the Scheme and before making decision to invest in the Schemeor redeem the Units in the Scheme.

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RISK FACTORS

� 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 Plans can go up or down depending on the factorsand forces affecting the capital markets.

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

� Prudential ICICI Child Care Plan is the name of the Scheme and does not in any manner indicate either the quality of theScheme or its future prospects and returns.

� In the event of receipt of inordinately large number of redemption requests or of a restructuring of the Plans’s portfolios,there may be delays in the redemption of Units. As per the guidelines issued by SEBI, in the event of failure to dispatch theredemption or repurchase proceeds within 10 working days, the AMC is liable to pay interest to the Unit holders @ 15%p.a. If the Unit-holder fails to provide the Bank mandate, the request for redemption would be considered as not valid andthe Fund retains the right to withhold the redemption until a proper bank mandate is furnished by the Unit-holder and theprovision with respect of penal interest in such cases will not be applicable/ entertained.

� The NAVs of Prudential ICICI Child Care Plan and the investment Plans thereunder may be affected by changes in thegeneral market conditions, factors and forces affecting capital market in particular, level of interest rates, various marketrelated factors and trading volumes, settlement periods and transfer procedures.

� Investing in the Plans involves certain risks and considerations associated generally with making investments in securities.There can be no assurance that the Plans will achieve their objectives. The value of the Plan’s investments may be affectedby factors affecting capital market generally, such as price and volume volatility in the fixed income and stock markets,interest rates, currency exchange rates, foreign investment, changes in government policy, taxation, political, economic orother developments and closure of the stock exchanges. Consequently, the Net Asset Value of the Plans may fluctuate, andthe value of the Plan’s Units may go up or down. Past performance of mutual funds managed by the Sponsor and itsaffiliates is not necessarily indicative of future performance of the Scheme or the Plans thereunder. There can be noassurance that the Scheme and its Plan’s investment objectives will be achieved.

� As per the Regulations, each Plan may invest up to 5% of its net assets in unlisted equity and equity-related securities. ThePlan’s investments in such unlisted equities may be realisable only upon listing of these securities.

� The Trustee has a right in its sole discretion to limit redemptions under certain circumstances.

� The Sponsors will not be liable to make good or otherwise be responsible for any loss or shortfall resulting from theoperations of the Scheme and the Plans thereunder, beyond the initial contribution of Rs. 22.2 lakh made by them to thecorpus of the Mutual Fund and the accretions and additions thereto.

� The liquidity of the Scheme’s investments is inherently restricted by trading volumes in the securities in which it invests.

� As per the Regulations, in case the AMC invests in any of the Schemes managed by it, it shall not be entitled to charge anyfees on such investments.

� The Plans under the Scheme may also invest in ADRs / GDRs as permitted by Reserve Bank of India and Securities andExchange Board of India. To the extent that some part of the assets of the Plans may be invested in securities denominatedin foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected bythe changes 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 Plans offered under this Scheme may use derivatives instruments like Stock Index Futures, Interest Rate Swaps, ForwardRate Agreements or other derivative instruments for the purpose of hedging and portfolio balancing, as permitted underthe Regulations and guidelines. Usage of derivatives will expose the Scheme/ Plan/s to certain risks inherent to suchderivatives.

� The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, in this casethe approved intermediary, to comply with the terms of agreement entered into between the lender of securities i.e. theScheme and the approved intermediary. Such failure to comply can result in the possible loss of rights in the collateral putup by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by thelender and the possible loss of any corporate benefits accruing to the lender from the securities deposited with theapproved intermediary.

� Applicants/Unitholders under the Scheme and the Plans thereunder are not being offered any guaranteed returns.

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

� From time to time and subject to the regulations, the sponsors, the mutual funds and investment Companies managed bythem, their affiliates, their associate companies, subsidiaries of the sponsors and the AMC may invest in either directly orindirectly 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 have anadverse impact on the units of the Scheme because the timing of such redemption may impact the ability of otherunitholders to redeem their units


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

� From time to time and subject to the regulations, the AMC may invest in this Scheme. The decision to invest in the Schemeby the AMC will be based on parameters specified by the Board of the AMC.

Further, as per the Regulation, in case the AMC invests in any of the schemes managed by it, it shall not be entitled to chargeany fees on such investments

� As per SEBI circular dated December 12, 2003 ref SEBI/IMD/CIR No. 10/22701/03 and AMFI’s communication having ref.No.35/MEM-COR/55/04-05 dated December 31, 2004, each scheme and individual plan(s) under the schemes should havea minimum of 20 investors and no single investor should account for more than 25% of the corpus of such scheme/plan(s).In case of non-fulfillment with either of the above two conditions in a three months time period or the end of succeedingcalendar quarter, whichever is earlier, from the close of the New Fund Offer (NFO) of open ended schemes or on an ongoingbasis for each calendar quarter, the schemes /plans shall be wound up by following the guidelines prescribed by SEBI andthe investor’s money would be redeemed at applicable NAV.

SEBI has, vide its Circular No.SEBI/IMD/CIR No.1/42529/05, further clarified that the foresaid Circular would be applicableat the Portfolio level. For determining the holding by single investor above 25% limit, the average of daily holding by eachsuch investor over the quarter would be considered. If the holding by such investor exceeds 25% limit over the quarter,rebalancing period of one month would be allowed and thereafter 15 days notice shall be given to the investor to redeemhis exposure over the 25% limit within 15 days. In case, if the investor fails to redeem his exposure over 25%, it would leadto automatic redemption by the Mutual Fund on the applicable NAV on the 15th day of the notice period.

Scheme Specific Risk Factors

Fixed Income Securities:

� Interest Rate Risk: As with all debt securities, changes in interest rates may affect the the Plan’s Net Asset Value as the pricesof securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of long-termsecurities generally fluctuate more in response to interest rate changes than do short-term securities. Indian debt marketscan be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possiblemovements in the NAV.

� Liquidity or Marketability Risk: This refers to the ease with which a security can be sold at or near to its valuation yield-to-maturity (YTM). The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by adealer. Liquidity risk is today characteristic of the Indian fixed income market.

� Credit Risk: Credit risk or default risk refers to the risk that an issuer of a fixed income security may default (i.e., will beunable to make timely principal and interest payments on the security). Because of this risk corporate debentures are soldat a higher yield above those offered on Government Securities which are sovereign obligations and free of credit risk.Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit riskas well as any actual event of default. The greater the credit risk, the greater the yield required for someone to becompensated for the increased risk.

� Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the Plans arereinvested. The additional income from reinvestment is the “interest on interest” component. The risk is that the rate atwhich interim cash flows can be reinvested may be lower than that originally assumed.

� Equity or Equity related Securities:

The Plans will invest a part of their portfolio in equity and equity related securities. Trading volumes, settlement periods andtransfer procedures may restrict the liquidity of these investments. Different segments of Indian financial markets havedifferent settlement periods and such periods may be extended significantly by unforeseen circumstances. The inability ofa Plan to make intended securities purchases due to settlement problems could cause a Plan to miss certain investmentopportunities.

� Risks attached with the use of derivatives: As and when the Scheme trade in the derivatives market there are risk factorsand issues concerning the use of derivatives that Investors should understand. Derivative products are specialized instrumentsthat require investment techniques and risk analyses different from those associated with stocks and bonds. The use of aderivative requires an understanding not only of the underlying instrument but of the derivative itself. Derivatives requirethe maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivativeadds to the portfolio and the ability to forecast price or interest rate movements correctly. There is the possibility that a lossmay be sustained by the portfolio as a result of the failure of another party (usually referred to as the “counter party”) tocomply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mis pricing or impropervaluation of derivatives and the 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. Also please refer to Page 36 forexample on Derivatives.

� Risks associated with stock lending:

The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, in this casethe approved intermediary, to comply with the terms of agreement entered into between the lender of securities i.e. theScheme and the approved intermediary. Such failure to comply can result in the possible loss of rights in the collateral put

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up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by thelender and the possible loss of any corporate benefits accruing to the lender from the securities deposited with theapproved intermediary.

Investors are urged to study the terms of the Offer Document carefully before investing in this Scheme and its Plans, and toretain this Offer Document for future reference.

� Risks attached with investments in ADRs/GDRs:

It is AMC’s 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. Suchinvestment opportunities may be pursued by the AMC provided they are considered appropriate in terms of the overallinvestment objectives of the schemes. Since the Schemes would invest only partially in ADRs/GDRs/overseas securities, theremay not be readily available and widely accepted benchmarks to measure performance of the Schemes. To manage risksassociated with foreign currency and interest rate exposure, the Fund may use derivatives for efficient portfolio managementincluding hedging and in accordance with conditions as may be stipulated by SEBI/RBI from time to 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. Theappointment of such intermediaries 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 regulatory costs.

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

� Investors are advised to consult their Legal /Tax and other Professional Advisors in regard to tax/legalimplications relating to their investments in the Scheme and before making decision to invest in theScheme or redeem the Units in the Scheme.


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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 001Telephone: 011 - 23752515-18 Fax: 011-23358582

Corporate Office8th Floor, Peninsula Tower, Peninsula Corporate Park,Ganpatrao Kadam Marg, Off Senapati Bapat Marg,Lower Parel, Mumbai 400 013.Telephone: 022 - 24997000Fax : 022 - 24997029

Trustee

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

Registrar

Computer Age Management Services Private LimitedUnit : Prudential ICICI Mutual FundA&B Lakshmi Bhavan609 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. LAW1st Floor,Agra Building,121, M.G. Road,Fort, Mumbai - 400 023

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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 by theGovernment 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 with SEBIand till date such registration is valid.

Place : Mumbai Ranganth AthreyaDate : June 27, 2005 Sr. Vice President – Legal,

Compliance and Company Secretary

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


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DEFINITIONS

In 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. (formerly ICICI AssetAMC or Investment Manager Management Company Limited), the Asset Management Company

incorporated under the Companies Act, 1956, and registered with SEBI toact as an Investment Manager for the schemes of Prudential ICICI MutualFund.

Applicable NAV for purchase The Applicable NAV is the Net Asset Value per Unit at the close of BusinessDay on which the application is accepted.

Applicable NAV for redemption The Applicable NAV is the Net Asset Value per Unit at the close of BusinessDay on which the application is accepted.

Applicant Parent/ Legal Guardian of the Beneficiary Child or any other Person/s whoapply for Units by contributing the initial investment amount and /or makingperiodic investments so as to gift the Units of the Plans to the Unitholder(Beneficiary Child) in accordance with the procedure stated in this OfferDocument.

Beneficiary Child Child in whose name/ for whose benefit, the Units are applied for by theApplicant by contributing the initial investment amount and / or makingperiodic investments in accordance with the procedure stated in this OfferDocument.

Business Day Study Plan: A day other than (i) Saturday and Sunday or (ii) a day on whichthe Principal Stock Exchange with reference to which the valuation of thesecurities under the Plan of the Scheme is done or the Whole Sale DebtMarket of National Stock Exchange or the Reserve Bank of India or Banks inMumbai are closed or (iii) a day on which there is no RBI clearing / settlementof securities; or (iv) a day on which the Sale and Redemption of Units issuspended by the Trustee / AMC.

Gift Plan: A day other than (i) Saturday and Sunday or (ii) a day on which thePrincipal Stock Exchange with reference to which the valuation of thesecurities under the Plan of the Scheme is done or Banks in Mumbai areclosed or (iii) a day on which there is no RBI clearing / settlement of securities;or (iv) a day on which the Sale and Redemption of Units is suspended by theTrustee / AMC.

Provided that the days when the banks at any center where the AMC’sCustomer Service Centers are located, are closed due to a local holiday, suchdays will be treated as Non-Business Days at such centers for the purposesof accepting fresh subscriptions. However, if the AMC’s offices in such centersare open on such local holidays, then redemption requests will be acceptedat those centers, provided it is a Business Day for the Scheme on an overallbasis.

Custodian HDFC Bank Limited, Mumbai, acting as Custodian to the Plan/s, or any othercustodian who is approved by the Trustee and has been granted registrationby SEBI under the Securities and Exchange Board of India (Custodian ofSecurities) Regulations, 1996 as amended from time to time.

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 Agreement The Agreement dated September 3, 1993 entered into between PrudentialICICI Trust Limited (formerly ICICI Trust Limited) and Prudential ICICI AssetManagement Company Limited (formerly ICICI Asset Management CompanyLimited) as amended from time to time.

Majority The age at which a person is deemed to attain majority under the provisionsof the Indian Majority Act, 1875.

NAV Net Asset Value of the Units of the Plans and Options therein, calculated onevery Business Day in the manner provided in this Offer Document or as maybe prescribed by Regulations from time to time.

NRI Non-Resident Indian.

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Offer Document This document issued by Prudential ICICI Mutual Fund, offering Units ofPrudential ICICI Child Care Plan.

Person Person means any resident or non-resident natural or juridical person.

PIOs Persons of Indian Origin.

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

Prudential ICICI Child Care Plan / Prudential ICICI Child Care Plan and the options and investment Plans offeredThe Scheme / The Plan(s) thereunder referred to as the Scheme. Each of the Investment Plans under

the Scheme is referred to as the Plan and collectively as the Plans. As eachPlan is a distinct entity having a separate portfolio, each Plan is construed asa Scheme under the Regulations.

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 Mutual Fund Prudential ICICI Mutual Fund (formerly ICICI Mutual Fund), a trust set upunder the provisions of the Indian Trusts Act, 1882. The Fund is registeredwith SEBI vide Registration No.MF/003/93/6 dated October 13, 1993 asICICI Mutual Fund and has obtained approval from SEBI for change in nameto Prudential ICICI Mutual Fund vide SEBI’s letter dated April 16, 1998.

The Trustee Prudential ICICI Trust Limited (formerly ICICI Trust Limited), a company setup under the Companies Act, 1956, and approved by SEBI to act as theTrustee for the schemes of Prudential ICICI Mutual Fund

The Regulations Securities and Exchange Board of India (Mutual Funds) Regulations, 1996as 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 of thePrudential ICICI Mutual Fund and additions/accretions thereto.

Unit(s) The interest of an investor which consists of one undivided share in the NetAssets of the Scheme and or the Plans thereunder.

Unit-holder Any Resident individual or NRI who is eligible to receive the gift of Unitsunder the Plans, based on valid applications of the Applicant. A Unitholdertill attaining majority shall deemed to be represented by his/ her Parent/Legal Guardian.


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Summary – Prudential ICICI Child Care Plan

Name of the Scheme Prudential ICICI Child Care Plan

Structure Open-ended fund comprising two investment Plans i.e.: Study Plan and GiftPlan investing in debt and money market instruments and equity and equityrelated instruments respectively.

Offer Price for on-going subscriptions Based on the Applicable NAV of the Scheme subject to entry load provision,

Application Amount On an on-going basis, minimum of Rs.5,000 per application and additionalamounts in multiples of Re.1 thereafter.

New Fund Offer Expenses The New Fund Offer expenses charged to the Scheme were limited to 2.50%of the amount mobilized during the New Fund Offer Period under Gift Planand 1.50% under Study Plan. The New Fund Offer expenses over and abovethe percentages stated above were borne by the AMC.

Liquidity On an ongoing basis, an investor can purchase and redeem Units on everyBusiness Day at NAV based prices, subject to the prevailing load structure.Please refer to page 50 for Redemption Price, page 47 for Purchase Price.

The Units of the Plan/s will not be listed on any exchange.

The Fund will, under normal circumstances, endeavor to dispatch theredemption cheques within 2 Business Days (incase of Gift Plan) and 1Business Day (in case of Study Plan) from the date of acceptance of theredemption request at any of the Customer Service Centers.

Transparency NAV of each Plan will be determined on every Business Day, except in specialcircumstances described on page 53. NAV of the Plan(s) shall be madeavailable at all Customer Service Centers of the AMC. The AMC shall alsoendeavor to have the NAV published in a daily newspaper and updated onAMC’s website (www.pruicici.com).

AMC shall update the NAVs on the website of Association of Mutual Fundsin India - AMFI (www.amfiindia.com) by 8.00-p.m. every Business Day. Incase of any delay, the reasons for such delay would be explained to AMFIand SEBI by the next day. If the NAVs are not available before commencementof business hours on the following day due to any reason, the Fund shallissue a press release providing reasons and explaining when the Fund wouldbe able to publish the NAVs.

The Mutual Fund shall disclose the full portfolio of the Plans under theScheme every quarter.

Repatriation facility NRIs/PIOs/FIIs have been granted a general permission by RBI [Schedule 5 ofthe Foreign Exchange Management (Transfer or Issue of Security by a PersonResident Outside India) Regulations, 2000] for investing in / redeemingunits of the schemes subject to conditions set out in the aforesaid 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 read withRule 17C of Income-tax Rules, 1962.

Options available under the Scheme. For the present the Fund intends to offer only the Cumulative Optionunder both the Plans.

Under this option, the Plans will not declare any dividends. The incomeearned by the Plans will remain invested in the respective Plans and will bereflected in the Net Asset Value of that Plan.

The Trustee may, at a later date, decide to introduce Dividend Option undereither of the Plans or both the Plans as is considered necessary.

16


CONSTITUTION OF THE MUTUAL FUND

ICICI 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 erstwhile ICICI Ltd. (Since merged with ICICI Bank Ltd), by execution of a Trust Deed datedAugust 25, 1993 by contributing Rs. 10 lacs. Prudential plc, through its wholly owned subsidiary, Prudential CorporationHoldings Limited, has contributed an amount of Rs.12.2 lacs to the corpus of the Fund and has received permission for suchcontribution 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 thechange in name of the Fund to Prudential ICICI Mutual Fund vide its letter IIMARP / 88 / 98 dated April 16, 1998. A deed ofamendment to the Trust Deed dated August 25, 1993 was executed and registered.

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 December 31, 2004, over GBP187billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as of December 31,2003.

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

Year ended December 31 (Rs. crores)

Description 2004 2003 2002

Total Income 295,529 249,649 272,926Profit Before Tax 5,159 2,778 3,841Profit After Tax 3,397 1,651 3,563Shareholders’ Funds 33,975 26,015 29,110Earnings per share (Rs.) 15.95 8.58 18.65Equity Capital (5 Pence per share) 944 794 794Free Reserves 33,031 25,221 28,316Net-worth 33,975 26,015 29,110Book Value per share (Rs.) 142.75 130.07 145.55Percentage of dividend per share 316.80% 320% 520%Dividend per share (in Pence) 15.84P 16.00P 26.00P

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 total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax ofRs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financialservices to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries andaffiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank setup its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domesticbanking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom and Canada,branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladeshand South Africa. (Source: Overview at www.icicibank.com).

ICICI Bank was formerly a wholly owned subsidiary of ICICI Ltd, an Indian financial institution.

Given below is a brief summary of ICICI Bank’s financials:(Rs. in crores)

*Year ended *Year ended *Year ended * Year endedMarch 31, 2002 March 31, 2003 March 31, 2004 March 31, 2005

Total Income 2726.59 12,526.88 11,958.96 12,826.04Profit After Tax 258.3 1,206.18 1,637.10 2,005.20Free Reserves @ 5632.41 6,320.65 7,394.16 11,813.20Net Worth 6244.96 6933.31 8,010.56 12,549.98Earnings per Share (Rs.) (diluted) 11.61 19.65 26.44 27.33Book Value per Share (Rs.) 101.95 113.10 129.96 170.33Dividend 20% 75% 75% 85%Paid Up Capital (Equity) $ 612.55 612.66 616.40 736.78(Preference) # 350 350 350 350


17

* The results include the result of erstwhile ICICI Limited and its subsidiaries, ICICI Personal Financial Services Limited andICICI Capital Services Limited, amalgamated with the Bank w.e.f. March 30, 2002. The financials for the current periods arenot 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, is notapplicable to the Bank for a specified period.

Note: ICICI Bank has raised Rs. 324600 Crores of equity in April 2004 (including a green shoe option)

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 ICICI Group. Out of the total 45% of the paid-up capitalof the AMC held by the ICICI Group, 30% is held by ICICI Bank and the balance 15% is held by a subsidiary of ICICI Bank Ltd.viz. ICICI Venture Funds Management Company Limited.

b) The Trustee Company (The Trustee) - Prudential ICICI Trust LimitedPrudential ICICI Trust Limited, a company incorporated under the Companies Act, 1956 is the Trustee to the Fund vide Trust Deeddated August 25, 1993 as amended from time to time. Prudential plc. of UK, through its wholly owned subsidiary, PrudentialCorporation Holdings Limited, has been issued and allotted shares aggregating 55% stake in the share capital of PrudentialICICI Trust Limited, whereas the balance 45% shareholding in the Prudential ICICI Trust Limited is being held by ICICI Group.Out of the total 45% of the paid-up capital of the Prudential ICICI Trust Limited held by the ICICI Group, 30% is held by ICICIBank and the balance 15% is held by a subsidiary of ICICI Bank Ltd. viz. ICICI Venture Funds Management Company Limited.

i) The Directors of the Trustee Company are:

Mr. Vishnu Bhagwandas Haribhakti – PartnerChairman, Prudential ICICI Trust Company Limited Haribhakti & Co., Mumbai(S/o. Late Mr. Bhagwandas Haribhakti) V.B. Haribhakti Associates, MumbaiFlat No.51, 5th Floor Haribhakti Shah & Co., AhmedabadMaker Tower ‘B’ V.B. Haribhakti & Co., New DelhiCuffe Parade V.B. Haribhakti & Co., ChennaiMumbai 400 005 V.B. Haribhakti & Co., BangaloreChartered Accountant V.B. Haribhakti & Co., Jodhpur

V.B. Haribhakti & Co., KolkataV.B. Haribhakti & Co., JaipurV.B. Haribhakti & Co., BhopalV.B. Haribhakti & Co., BhuvaneshwarV.B. Haribhakti & Co., ChandigarhV.B. Haribhakti & Co., CochinV.B. Haribhakti & Co., PatnaV.B. Haribhakti & Co., PuneDirectorBajaj 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.Haribhakti MRI Corporate Services Pvt.Ltd.Moores Rowland Consulting Pvt. Ltd.

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.Matsushita Lakhanpal Battery India Ltd.Kennametal Widia (India) Ltd. (Alternate)Supreme Industries Ltd.

18


Mr. Nagesh D. Pinge* Nominee Director (on behalf of ICICI Bank Limited(S/o. Dinkar Shripad Pinge) Haldia Petrochemicals LimitedD-408/1, Viman Darshan The India Cements Limited.28-29 Swami Nityanand Marg Rama Newsprint and Papers Ltd.Andheri (East)Mumbai 400069Senior General Manager –Compliance 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 Office Services Pvt. Ltd.Mumbai 400 056 Prudential Process Management Services Pvt. Ltd.Consultant

Mr. D. J. Balaji Rao Director(S/o D. B. Jagannath Rao) Ashok Leyland Ltd. ChennaiD-103, Adarsh Residency Bajaj Auto Ltd.47th Cross (2nd Main) 3M INDIA Ltd., BangaloreJayanagar, 8th Block South East Asia Marine Engg. & Construction Ltd., KolkataBangalore – 560082 Graphite India Ltd., Kolkata

Ennore Foundries Ltd.

Mr . M S Parthasarathy Managing Trustee(S/o Late M.S. Tiruvenkatachari) SFL Shares TrustB2 Ashok Svasti, 33 Balakrishna Road DirectorValmiki Ngr, Tiruvanmiyur Sundaram Home Finance Ltd., ChennaiChennai – 600041

*Mr. Nagesh Pinge is a Senior General Manager – Compliance and Audit Group of ICICI Bank Limited and Mr. S.P. Subhedar isa Senior Advisor to the Prudential Corporation Asia Limited, a wholly owned subsidiary of Prudential plc.

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 Regulations andthe 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.


19

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 to immediatelyinform 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 the valueof 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 the TrustDeed.

11. The Trustee is required to take steps to ensure that the transactions of the Fund are in accordance with the provisions of theTrust 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 shall obtain the consent of the Unitholders:a) whenever required to do so by SEBI, in the interest of Unitholdersb) whenever required to do so on the requisition made by three-fourths of the Unitholders of the Scheme.

c) when the Trustee decides to wind up or prematurely redeem the units.

14. 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 out unless:- a written communication about the proposed change is sent to each Unitholder andan advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaper

published in the language of the region where the Head Office of the mutual fund is situated; and- the Unitholders are 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.

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

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

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

18. 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.

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

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

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

22. 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 or frontrunning 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.

23. 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.

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

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

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

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

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

a) The Investment Management Agreement and the compensation paid under the agreement.

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

c) Selection of the asset management company’s independent directors

20


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

e) Selecting and nominating individuals to fill independent directors vacancies.

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

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

h) Principal underwriting contracts and renewals

i) Any service contracts with the associates of the asset management company.

29. 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.

30. SEBI circular no. MFD/CIR/10/ 15895 /2002 dated August 20, 2002 provides that the meetings of the Trustees shall be heldat least once in every two calendar months and at least six such meetings should be held every year. Further, as per theRegulations, 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, 2004 to May 31, 2005, seven meetings of the Directors of the Trustee were held. The Trustee’ssupervisory role is discharged by reviewing the information and the operations of the Fund based on reports submitted at theBoard Meetings of the Trustee, by reviewing the reports being submitted by the Internal Auditor and the bi-monthly, quarterlyand half-yearly compliance reports. The Trustee also conducts a detailed review of the half-yearly and annual accounts of theschemes of the Fund and discusses the matters arising there from with the Statutory Auditors of the Fund.

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 such capacityof a sum, presently computed at the rate of upto 0.05% of the amount, being the aggregate of the Trust Fund and Unit Capitalof all the Schemes put together on April 1 of each year or a sum of Rs.5 lacs, whichever is higher. The Trustee may charge furtherfees 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. The amendmentauthorizes the Trustee to decide upon the Trusteeship Fee to be charged from the Mutual Fund at the beginning of each financialyear (April 1 to March 31), subject to the maximum limit of 0.05% to be arrived at as indicated above. The amendment does notin 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 established byICICI as its wholly owned subsidiary, to act as the Investment Manager of the ICICI Mutual Fund vide the Investment ManagementAgreement dated September 3, 1993. Consequent to a review of long-term business strategy of the AMC, it was decided tofurther strengthen commitment to the individual investor segment. As a part of this Scheme, Prudential plc. (formerly known asPrudential 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 Prudential ICICI Asset Management Company Limited (AMC),whereas the balance 45% shareholding in the AMC is being held ICICI Group. Out of the total 45% of the paid-up capital ofthe AMC held by the ICICI Group, 30% is held by ICICI Bank and the balance 15% is held by a subsidiary of ICICI Bank Ltd. viz.ICICI Venture Funds Management Company Limited.

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 with theprovisions of Investment Management Agreement, the Trust Deed, the Regulations and the objectives of each of the schemes.

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) of SEBI(Mutual Funds) Regulations, 1996. The AMC has commenced the Portfolio Management activities, after complying with theregulatory requirements. The same are not in conflict with the mutual fund activities.

i) Board of Directors of the AMC

Mr. Mark NorbomPrudential Corporation Asia, One International Finance Centre 13 Floor, 1 Harbour View Street, Central, Hong Kong.

Mr. Mark Norbom graduated from Pennsylvania State University with a B.S. degree in Economics in 1980.

Mr. Norbom began his career at GE in 1980 and served in a number of senior management positions in the US and in Asia. Priorto joining Prudential, Mr. Norbom was President and CEO for GE Japan with responsibility for all of GE’s activities in Japan. Mr.Norbom’s ten years experience in Asia also included being Head of GE Capital Taiwan, Country President of GE CapitalIndonesia, CEO of GE Capital Thailand, and National Executive of GE Thailand. Presently, Mr. Norbom is a Chief Executive of


21

Prudential Corporation Asia with responsibility for Prudential’s business interests across the region. Mr. Norbom overseesPrudential’s extensive network of 23 life insurance, general insurance, retail mutual funds and institutional asset managementoperations across 12 countries in Asia: China, India, Taiwan, Hong Kong, Singapore, Malaysia, Korea, Japan, Vietnam, Indonesia,the Philippines, and Thailand.

Mr. Ajay SrinivasanPrudential Corporation Asia, One International Finance Centre 13 Floor, 1 Harbour View Street, Central, Hong Kong

Mr. Srinivasan is Chief Executive, Fund Management, 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 investment bankingbusiness. Mr. Srinivasan began his career at ICICI where, as a part of project appraisal team, he assessed the feasibility of severalprojects in 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. 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 Financial Analystfrom the Institute of Chartered Financial Analyst of India, Hyderabad. Mr. Kannan has about 16 years experience including 13years at ICICI during which he has managed a number of activities including the project finance, structured finance and treasuryoperations. He started his career with SRF Limited in 1986 and was deputed to SRF Nippon denso Limited in 1987 as an Executive– Project Planning He 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. He iscurrently acting as a CFO & Treasurer, managing the finance functions & treasury of the Bank. He is also responsible for the RiskManagement Group and the Corporate Communications Group.

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). He isa former Member of the Advisory Committee on Primary Markets set up by SEBI, a Former Director on the Board of the NationalStock 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. Dadi EngineerFlat no.4, 1st Floor, Shiv Shanti Bhuvan, 146 M. Karve Road, Opp. The Oval, Mumbai – 400 020.

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 of 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 to IL&FS

22


Academy for Insurance & Finance Ltd., an initiative of IL&FS Group. Mr. Gupta is a M.A in English and has a LL.B. degree besidesbeing a Fellow of Insurance Institute of India.

Mr. Pradip P. Shah72A, 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 founding CRISIL in1988. While at CRISIL, Mr. Shah was instrumental in technology transfer to and the training of personnel of Rating AgencyMalaysia 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 Accountant andranked first in India in the Chartered Accountancy examination.

Dr. (Mrs.) Swati A Piramal95A, Benzer Terrace, Abdul Gaffar Khan Road, Worli Sea Face, Mumbai 400 018.

Dr. Swati A. Piramal, is a Medical Doctor (M.B.B.S.) from the University of Bombay. Dr. Piramal graduated with a Masters Degreefrom Harvard School of Public Health, Boston USA, where she had the unique honour of being selected CommencementSpeaker at the 1992 Graduation Ceremony.

Dr. Swati A. Piramal is the Director-Strategic Alliances & Communications of Nicholas Piramal India Limited. Her currentresponsibilities include Research & Development, Information Technology, Medical Services, and Knowledge Management forthe Healthcare Group of Piramal Enterprises.

Under her leadership, Piramal Enterprises has made significant progress in Discovery Research for discovering and patentingnew NCEs, new Drug Delivery Systems, Clinical Research for planning clinical trials, new drug protocols and pharmacokineticslabs, herbal Research for DNA fingerprinting and standardization of Ayurveda, the setting up of a Business R & D programme inthe Company (BDRD.

Dr. Piramal is a Member of the Drugs Technical Advisory Board and the Maharashtra Biotechnology Council, Council of Scientific& Industrial Research (CSIR), State Bank of India Life Insurance Company, Confederation of Indian Industries (CII), WHO IPRCommittee - Commission on Intellectual Property Rights, Innovation and Public Health. (CIPIH) and Chair of the Life science &Biotech Committee and Economic Growth Committee. She heads the “Mahabioyatra” an initiative by the Confederation ofIndian Industry a Biotechnology network in Maharashtra. She is also on the Board of Directors of the Indian Council for Researchon International Economic Relations. (ICRIER).

Dr. Piramal has co-authored books on Health and Nutrition. One with Mrs. Tarla Dalal titled “Eat Your Way to Good Health.” Shehas also published articles in many leading publications.

Ms. Shikha Sharma16-A, Peregrine, 400, Veer Savarkar Marg, Prabhadevi, Mumbai 400 025.

Ms. Sharma completed her Masters of Business Administration from the Indian Institute of Management - Ahmedabad.

Ms. Shikha Sharma is the Managing Director & CEO of ICICI Prudential Life Insurance Company (“I-Pru”). ICICI Prudential wasamongst the first private sector companies in India to be awarded a life license in December 2000, and since its inception the I-Pru has established itself as India’s leading private life insurer, offering a complete range of products to meet the varying needsof the Indian customer.

She began her career with ICICI, one of India’s largest financial services providers, in 1980. She has been instrumental in settingup various group businesses for ICICI, including investment banking and retail finance.

Ms. Sharma was awarded for India’s most Powerful Woman in Business by Business Today, CEO of the year by Indira Group ofInstitutes, India’s greatest brand builders, and Institute of Marketing and Management Award for Excellence in the year 2004.

Mr. Pankaj RazdanSherwin Ark, Bunglow No. 3, Bellscot Co-op Hsg. Society, Lokhandwala Complex, Andheri (W), Mumbai 400058

Mr. Razdan is the Managing Director of the Prudential ICICI Asset Management Company Ltd. and is responsible for developmentof the business of the Company and its day-to-day management.

Mr. Razdan has rich experience and knowledge in Sales, Distribution and Marketing. He began his career with the HMG FinancialServices Limited as a Marketing Manager. He then joined Karvy Securities Limited where he worked for 5 years in its Distributionand Merchant Banking Division. Mr. Razdan joined Prudential ICICI Asset Management Co. Ltd. in April 1998, as Vice President& Head – Sales and Distribution of West Zone of the Company. In 1999, he headed the Sales and Distribution of the Companyin West and North Zone. He was promoted to become the Senior Vice President – Sales and Distribution in February 2000 andSenior Vice President – Sales and Marketing in 2001. In March 2003 he took over the post of Deputy CEO with a responsibilityto oversee Sales, Distribution and Marketing for all India, Strategic Planning, Development and Customer Service.

Mr. Razdan has a Bachelors degree in Electronics and has graduated in Engineering specializing in electronics.


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i) Powers, Duties and Responsibilities of the AMC

The duties and responsibilities of the AMC shall be governed by the Regulations and the Investment ManagementAgreement. 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 asper the set strategies and policies;

(g) to make and give receipts, releases and other discharges for moneys payable to the Trust and for the claims anddemands of 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 operatethe same;

(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.

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 propercare and 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 connectionwith personal 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 0.50% of the average net assetsoutstanding in each financial year.

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ii) Key Employees of the AMC and relevant experienceName of the Employee Age Designation Educational Total No. of Assignments Held During the

(Years) Qualifications Years of Experience/ Last 10 YrsType & Nature ofExperience

Mr. Pankaj Razdan 36 Managing Director BSc. (Electronics) Over 13 years of Managing Director – PrudentialB. Tech experience in sales ICICI AMC since January 2004(Electronics and distribution. Deputy CEO – Prudential ICICIEngineering) AMC – March 2003 to December

2003. Vice President / Senior VicePresident & Head - Sales &Distribution - Prudential ICICI AMC- 2000 February 2003.Vice President - West & NorthZone Prudential ICICI AMC - 1999– 2000.Head -Distribution -KarvySecurities Limited - 1997 – 1998.Marketing Manager - HMGFinancial Services Limited - 1992 –1993.

Mr. Raj Raman 44 Senior Vice PGDM – IIM, Over 18 years Prudential ICICI AssetPresident – Bangalore experience in the Management Co. Ltd. From JulySales and areas of Sales and 6, 2004 till date as Sr. ViceMarketing Marketing President Sales & Marketing

Quinnox Consultancy ServicesLimited, Mumbai From November,2002 till June, 2004 as CountryManager & Sr. Vice President –Asia PacificTata AIG Insurance Services,Mumbai From March, 2001 tillOctober, 2002 as Sr. VicePresident – Marketing Life &General InsuranceSatyam Infoway, Chennai FromApril, 2000 till March, 2001 as VicePresident – PortalsGE Countrywide ConsumerFinancial Services, Mumbai FromJune 1996 till December1998 asV.P. –Consumer Finance.From December 1998 till April2000 as Chief Operating OfficerMarico Industries LtdFrom September 1991 till April1995 as Regional Sales Manager– NorthFrom April 1995 to June 1996 –Business Development Manager

Mr. Nilesh Shah 35 Chief Investment B.Com, A.C.A. Grad Over 12 years of experience inOfficer C.W.A. fund management and portfolio

management ChiefInvestment Officer – PrudentialICICI AMC Limited – June 2004till date.Director and Chief InvestmentOfficer – Franklin Templeton AMCIndia Pvt. Ltd. – Sept 2002 to May2004.Chief Investment Officer –Frankline Templeton AMC IndiaPvt. Ltd. – January 2000 toSeptember 2002.Portfolio Manager – Fixed Income– Franklin Templeton AMC IndiaPvt. Ltd. – March 1997 to January2000.Head – Structured Products – ICICISecurities and Finance CompanyLimited – April 1992 to February1997.


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Mr. Vasant Sanzgiri 44 Senior Vice BSc ( Life Sciences), Over 18 years Vice President / Senior VicePresident & Head MMS (Personnel experience in area of President & Head HumanHuman Resources 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 38 Vice President – PGDSM(NIIT), B.Sc Over 19 years of work Vice President – InformationInformation experience in areas of Technology - Prudential ICICI AMCTechnology Information TechnologyJune 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 Conductorfrom May ‘89 to Oct’90ECIL – System Developer fromJune ’88 to April ‘89Associated Systems – SoftwareDeveloper from July’85 to April’88.

Mr. Ranganath Athreya 39 Sr. Vice President – Associate -_Institute Over 16 yrs of Sr. Vice President – Legal,Legal, Compliance of Company experience in Compliance and Companyand Company Secretaries of India. Compliance and Secretary, Prudential ICICI AMCSecretary Bachelors Degree Company Secretarial Jan 14, 02 onwards.

(General Laws), functions 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 LakshmiMotor Credit (Now TVS Finance)1989-92

Mr. Ashok Suvarna 33 Vice President MBA (Finance) Over 12 yrs of January 2005:Operations B. Com. experience in Vice President - Operations

Operations Prudential ICICI AMC LimitedApril 98 till December 04Prudential ICICI AMC Ltd. handlingOperations, Projects & QualityAssuranceMarch 94 till March 98SBI Funds Management Limitedhandling Operations

Mr. Pankaj Kaji 52 Senior Fund B.Com 34 yrs Fund Manager- Prudential ICICIManager AMC- 2002 till date.

Deutsche Bank, Mumbai (Vice-President-Money Market) 1994-2002, ANZ Grindlays Bank (FundsManager)-1986-1994

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

Type & Nature ofExperience

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Mr. Chaitanya Pande 33 Fund Manager PGDM from IMI, 10 Years 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. Anil Sarin 38 Senior Fund PGDBM, Institute of 11 years as Fund Prudential ICICI AMC Limited –Manager Management Management and April 2004 till date as Senior Fund

Technology (IMT) Portfolio Manager.Management Kotak Securities, Private Client

Group – From October 2003 toMarch 2004 as Vice President –Portfolio ManagerBirla Sun Life AMC Ltd. – FromJanuary 1996 to September 2003as Manager, Assistant VicePresident, Fund ManagerSBI Funds Management Ltd. FromMarch 1994 to December 1995 –as Asst. Manager, Fund Manager

Mr. Yogesh Bhatt 36 Associate Vice A.C.A. Grad C.W.A. 13 years as Equity Prudential ICICI AssetPresident – Dealer Management Co. Ltd. From JuneInvestments 28, 2004 till date as Associate Vice

President – InvestmentsSushil Finance Consultants Ltd.From 1999 to June 2004 as EquityDealer/ StrategistFalcon Brokerage Private Limited.– From 1996 to 1999 as EquityDealerSushil Finance Consultants Ltd.From 1991 to 1996 as EquityDealer/ Strategist

Mr. Rahul Goswami 32 Senior Fund B Sc., 9 years – Fund Prudential ICICI AssetManager M.B. A. Management - Management Co. Ltd. From July

Debt 6, 2004 till date as Senior FundManagerFranklin Templeton AssetManagement (I) Pvt. Ltd. fromOctober 2002 to July 2004 as FundManager.UTI Bank Ltd. from January 2000to October 2002 as Manager –Investments and MerchantBankingSMIFS Securities Ltd. from June1998 to January 2000 as SeniorDealer – Debt SalesKhandwala Finances Ltd. fromOctober 1997 to June 1998 asSenior Dealer – Debt Sales.RR Financial Consultants Limitedfrom December 1995 to October1997 as Manager – Debt Sales

Mr. B. Ramakrishna 39 Chief Financial B.Com, A.C.A Grad. Over 13 years of Prudential ICICI AMC Ltd. fromOfficer CWA experience in September 23, 2004 till date.

Corporate Planning, Marico Industries Ltd. as GeneralInvestor Relations, Manager – Corporate FinanceFinancial Planning from September, 1998 to

September, 2004.ITC Agrotech Ltd. as CommercialManager from February, 1993 toAugust, 1998.




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Mr. S Naren 38 Vice President – B.Tech – IIT Madras Over 15 years of Prudential ICICI AMC Ltd. fromInvestments PGDM – IIM experience in Fund October, 2004 till date.

Calcutta Management, Equity Refco Sify Securities India Pvt. Ltd.Research, Operations as Head of Research frometc. November, 2003 to October, 2004

HDFC Securities Ltd. as VicePresident from September, 2000to March, 2002 and as Director &COO from March, 2002 toNovember, 2003Yoha Securities as CEO fromDecember, 1995 to September,2000

Mr. Anand Gupta 30 Dealer & Fund B.COM, PGDBA 11 years in execution, June 2003 to May 2005 as AVP-Manager from Institute Of sales trading and sales. Institutional sales with Refco-Sify

Technology & Securities Ltd.Management (ITM) June 1998 to May 2003 with Birla

Sunlife Securities Ltd in SalesTrading And Sales.Nov. 1993 to May 1998 withAnagram Securities ltd inexecution and sales trading.

Mr. Jignesh Shah 33 Sr. Fund Manager B.Com, CFA 11 years as Equity Prudential ICICI AMC Limited –Analyst Joined May 05

Reliance Capital – from Jan 04 –August 04 as Equity AnalystFour Dimensions Securities – fromSept 03 to Jan 04 as Equity AnalystRefco-Sify Securities – from July02 to Sept 03 – as Equity AnalystNirmal Bang Securities – as EquityAnalystPresage Financial Services – asEquity AnalystMahesh Kothari Shares & StockBrokers – from Aug 93 - as EquityAnalyst

Mr. Prashant Kothari 25 Fund Manager PGDM 2Years as Equity Prudential ICICI AMC Limited –Analyst and Fund Fund Manager from SeptemberManager 2004

Prudential ICICI AMC Limited –Equity Analyst from May 2003

As indicated above, at present a team comprising of ten Fund Managers are involved in fund management/ researchactivities. 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. Nilesh Shah. His qualifications andexperience are as under:

Scheme Name Fund Manager Qualification Experience

Prudential ICICI Service Mr. Nilesh Shah B.Com, A.C.A. Grad Over 13 years of experience in fundIndustries Fund C.W.A. management and portfolio management.

v) Compliance Officer

The Compliance Officer for the Fund is:Mr. Ranganath AthreyaSenior Vice President- Compliance, Legal and Company SecretaryPrudential ICICI Asset Management Company Ltd.8th Floor, Peninsula Tower, Peninsula Corporate Park,Ganpatrao Kadam Marg, Off Senapati Bapat Marg,Lower Parel, Mumbai 400 013.

vi) Investor Relations OfficerInvestor Relations Officer for the Fund is Mr. Mahesh Ranade and he may be contacted at the corporate office of the AMCat Mumbai.



28


D) AUDITORS

N. M. Raiji & Co., Chartered Accountants, Mumbai have expressed their willingness to act as Auditors for the Schemeoffered under 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 600 006 (CAMS) havebeen appointed as Registrar for the Scheme. The Registrar is registered with SEBI under registration No: INR000002813. AsRegistrar to the Scheme, CAMS will handle communications with investors, perform data entry services and dispatchAccount Statements. The AMC and the Trustee have satisfied themselves that the Registrar can provide the services requiredand has adequate 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 propose to enter into a Custodian Agreement with the Custodian and the salient features of the said Agreementwould be as under:

(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 thepart of 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 orproperty, except pursuant to instruction from the Trustee/AMC or under the express provisions of the CustodianAgreement.

The Custodian shall also not deal, on its own account, in securities purchased or sold by the Mutual Fund withoutmaking an adequate 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.


29

SECTION II

INVESTMENT OBJECTIVES & POLICIES

FUNDAMENTAL ATTRIBUTES OF THE SCHEME

a) Type of the Scheme

An open-ended Scheme comprising Study Plan and Gift Plan seeking to generate regular income and capital appreciationrespectively.

b) Investment Objectives

The Scheme has two Plans to offer:

Study Plan: The primary investment objective of the Study Plan is to seek generation of current income by creating aportfolio that is invested in debt, money market instruments and equity and equity related securities. However, there can beno assurance that the investment objectives of the Plan/s will be realized.

Gift Plan: The primary investment objective of the Gift Plan is to seek generation of capital appreciation by creating aportfolio that is invested in equity and equity related securities and debt and money market instruments. However, there canbe no assurance that the investment objectives of the Plan/s will be realized.

c) Investment Pattern

The corpus of each of the Plans will be invested in debt, money market instruments and equity and equity related instrumentsdepending on the Investment Objective of the Plan. Subject to the Regulations, the corpus of each of the Plan of the Schemecan be invested in any (but not exclusively) of the following securities:

1) Equity and equity related securities including convertible bonds and debentures and warrants carrying the right toobtain equity shares.

2) Securities created and issued by the Central and State Governments and/or repos/reverse repos in such GovernmentSecurities as may be permitted by RBI (including but not limited to coupon bearing bonds, zero coupon bonds andtreasury bills)

3) Securities guaranteed by the Central and State Governments (including but not limited to coupon bearing bonds, zerocoupon bonds and treasury bills)

4) Debt obligations of domestic Government agencies and statutory bodies, which may or may not carry a Central/StateGovernment guarantee

5) Corporate debt (of both public and private sector undertakings)

6) Securities issued by banks (both public and private sector) as permitted by SEBI from time to time and developmentfinancial institutions

7) Money market instruments permitted by SEBI/RBI, having maturities of up to one year, in call money market or inalternative investment for the call money market as may be provided by the RBI to meet the liquidity requirements.

8) Certificate of Deposits (CDs)

9) Commercial Paper (CPs)

10) Securitised Debt

11) The non-convertible part of convertible securities

12) Any other domestic fixed income securities

13) ADRs/GDRs issued by Indian Companies, subject to the guidelines issued by Reserve Bank of India and Securities andExchange Board of India.

14) Derivative instruments like Interest Rate Swaps, Forward Rate Agreements, Stock Index Futures, Interest Rate Derivativesand such other derivative instruments permitted by SEBI/RBI.

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

The Scheme/Plans may also enter into repurchase and reverse repurchase obligations in all securities held by it as perthe guidelines and regulations applicable to such transactions. Further the Plan/s intend/s to participate in securitieslending as permitted under the Regulations.

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

Study Plan:

Sr. No. Type of Security Indicative allocation Risk Profile(% of corpus) under

normal circumstances

1 Equities & Equity related securities 0 - 15% High

2 Debt securities, Money Market instruments,securitised debt & Cash (including – money at call ) 85-100% Low to medium

Gift Plan:

Sr. No. Type of Security Indicative allocation Risk Profile(% of corpus) under

normal circumstances

1 Equities & Equity related securities 51 - 60% High

2 Debt securities, Money Market instruments,securitised debt & Cash (including – money at call ) 40- 49% Low to medium

Note: If either of the Plans decides to invest in securitised debt, it is the intention of the Investment Manager thatsuch investments will not, normally, exceed 30% of the corpus of that Plan. The investments in central and stategovernment guaranteed securities will be in normal circumstances limited to 50% of the net assets of a Plan.

Investors may note that securities, which provide higher returns, typically, display higher volatility. Accordingly, the investmentportfolio of the Plans 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 the interestsof the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations.

Provided further and subject to the above, any change in the asset allocation affecting the investment profile of the Plansshall be effected only in accordance with the provisions of sub regulation (15A) of Regulation 18 of the Regulations, asdetailed later in this document.

e) Terms of the Scheme – Fundamental Attributes

1. LiquidityOn an ongoing 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.1000 or more. Redemption can also be madefor the total number of Units standing to the credit of Unitholder at the time of closure of account, even thoughsuch redemption is for less than Rs.1000.

b) Redemption PriceThe redemption will be at Applicable NAV based prices subject to the exit load. Please refer to “Redemption Price”on page 50.

c) Payment of ProceedsAll redemption requests received prior to the cut-off time (please refer to “Payment of Proceeds” on Page 51) onany Business Day at the Official Points of Acceptance of Transactions will be considered accepted on that BusinessDay, subject to the redemption requests being complete in all respects, and will be priced on the basis ofRedemption Price for that day. Requests received after the cut-off time will be treated as though they wereaccepted on the next Business Day. Please refer to (Page 52) “Right to Limit Redemptions” and (page 53)“Suspension of Sale and Redemption of Units”.As per the Regulations, the Fund shall dispatch redemption proceeds within 10 Business Days (working days) ofreceiving the redemption request. However, under normal circumstances, the Fund will endeavour to dispatch theredemption proceeds within 2 Business Days of acceptance of the redemption request in case of Gift Plan andwithin 1 Business day of acceptance of the redemption request in case Study Plan. This service standard will applyonly at the centers where RBI handles clearing directly and is able to transfer funds from Mumbai on a same-day-value basis. In respect of all non-RBI centers, for redemption payments, AMC will take additional day(s) – notexceeding 3 Business Days- that would essentially be linked to the time taken by banks to clear funds at such Non-RBI centers.Trustees reserve the right to alter or modify the number of days taken for redemption of Units under the Fund aftertaking into consideration the actual settlement cycle, when announced, as also the changes in the settlementcycles that may be announced by the Principal Stock Exchanges from time to time.


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As per the guidelines issued by SEBI, in the event of failure to dispatch the redemption or repurchase proceedswithin 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.

If the Unitholder fails to provide the Bank mandate, the request for redemption would be considered as not validand the Fund retains the right to reject/withhold the redemption until a proper bank mandate is furnished by theUnitholder and the provision with respect of penal interest in such cases will not be applicable/ entertained.

Please refer to ‘Redemption of Units’ on Page 51 for details of Redemption.

2. Listing

Being an open ended Scheme, the Units of the Plans under the Scheme are not listed on any stock exchange. TheTrustee may, at its sole discretion, cause the Units of the Plans to be listed on one or more Stock Exchanges. Notificationof the same will be made through Customer Service Centres of the AMC and as may be required by the respective StockExchanges.

3. Fees and Expenses

i. New Fund Offer expenses;

The total New Fund Offer Expenses chargeable to the Plans as per the current Regulations are subject to amaximum of 6% of the amount collected during the New Fund Offer Period. The New Fund Offer expensescharged to the Scheme were limited to 2.50% for the Gift Plan and 1.50% under Study Plan of the amountmobilized under the Plans during the New Fund Offer Period under. The New Fund Offer expenses over and abovethe percentages stated above were borne by the AMC.

New Fund Offer expenses were estimated as under:

Category of Expenses % to target mobilisation

Gift Plan Study Plan

Commission to agents and brokers 1.00 1.00Advertisements 1.00 1.00Printing and mailing 0.85 1.28Registrar Expenses 0.15 0.15Bank Charges & other expenses 0.20 0.20Total 3.20 3.63

ii. Recurring Expenses

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

For Gift Plan:

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

2.50% 2.25% 2.00% 1.75%

For Study Plan:

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

2.25% 2.00% 1.75% 1.5%

Subject to Regulations, expenses over and above the prescribed limit shall be borne by the Asset ManagementCompany.

iii. Load

For the present, the Trustee, on an ongoing basis intends to charge an Entry and Exit loads as shown below:

Entry Load

Prudential ICICI Child Care Plan Entry Load

Study Plan 1.50%

Gift Plan 1.50%

Exit Load

Prudential ICICI Child Care Plan(Study Plan and Gift Plan) Exit Load

If the amount sought to be redeemed under any of the above Plans is not 1.00%invested for a period of 3 years.

If the amount sought to be redeemed under any of the above Plans is Nilinvested for a period of 3 years but redeemed before the Unitholder(the Beneficiary Child) attains the age of 18 years.

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Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and maydecide to introduce a differential load structure on the Units subscribed/redeemed on any Business Day.Such changes will be applicable for prospective investments. The Trustee shall arrange to display a noticein the Customer Service Centers of the AMC at least 10 days before the change of the then prevalent loadstructure. The addendum detailing the changes in load structure will be attached to offer documents andabridged offer documents. The addendum will also be circulated to all the distributors / brokers so thesame can be attached to all the offer documents and abridged offer documents in stock. This addendumwill also be sent along with the newsletter to the unitholders immediately after the changes. Changes inthe load structure may be stamped in the acknowledgement slip issued by the Fund after the changes inload structure. The load collected from the Unitholders under each Plan will be credited to a separateaccount in the respective Plan accounts and will be offset against distribution and marketing expenses.Surplus of load, if any, charged over planned marketing and distribution expenses to be defrayed will becredited to the respective Plans whenever felt appropriate by the AMC.

For investments by a Fund of Fund Scheme(s) in the Plans of the Scheme, if any, there would not be any entry load/exit load charged by the underlying Scheme.

f) Scholarships under Prudential ICICI Child Care Plan:

Scholarship Scheme for Meritorious Students under the aegis of Prudential ICICI Young Students Education Trust:

For the benefit of the Uniholders under the Plans of the Scheme, the AMC has instituted a Scholarship Scheme. For thispurpose, the AMC has set up a Trust under the aegis of the Prudential ICICI Young Students Education Trust (ScholarshipTrust) with an initial corpus of Rs 500,000 from out of the resources of the AMC. AMC contributes each year, commencingfrom the second year of setting up of the above Trust, from out of AMC’s profits an amount equivalent to 0.10% of averagenet assets of the Plans under this Scheme. The Scholarship Scheme is being administered by an eminent Board of Trustees(Trustees for Scholarship Scheme or Trustees). Under this Scholarship Scheme the eligible selected students will avail offinancial assistance to defray a part of the expenses to be incurred by them/their parents/lawful guardian, on tuition fees,cost of books, cost of hostel fees (in case of students residing in the hostels), cost of travel abroad (in case of studentssecuring admissions in accredited and recognized colleges/Universities abroad) and such other expenses which a student isrequired to bear as per the terms of admission applicable to the course/program to which he/she secured admission. It isproposed to make available the scholarships of not over Rs.100,000 each (to be paid in one installment or such othernumber of installments as the Trustees may decide) to such students who secured admission for pursuing graduate/postgraduate programs in the disciplines of Engineering/ Management/ Accounting/ Law/ Medicine/ Life/ Physical/ Biologicalsciences/ Mathematics/ Liberal Arts etc. and such other core disciplines which the Trustees for Scholarship Scheme feelappropriate. The Trustees for the above purpose will invite applications through an advertisement and by sending acommunication through newsletter to all the applicants under the Scheme. The advertisement/communication will clearlyspecify the eligibility criteria, including the minimum cut off marks required for the preliminary screening of the applications.Based on the shortlist prepared in the preliminary screening, the Trustees may conduct/hold a written test/interview (orboth) and prepare a final list of candidates for participating in the scholarship scheme. Scholarships will be awarded to theeligible selected students based on the criteria laid down by the Trustees of the above Trust for Scholarship Scheme.

The scholarships are being awarded commencing from one year after the date of the allotment of Units under PrudentialICICI Child Care Plan.

As the Scholarship Scheme is primarily meant for the benefit of the Unitholder, the Trustee (to Prudential ICICI MutualFund), in consultation the Trustees for Scholarship Scheme may impose such additional conditions, as deemed necessary, inregard to the term of investment holding of the Applicant in the Fund. Such additional terms and conditions if stipulatedwill only be applicable to the Unitholders who receive Scholarships under the Scholarship Scheme detailed above.

Contributions by AMC towards corpus of Scholarship Scheme:

As AMC intends to contribute each year out of its profits an amount equivalent to 0.10% of average net assets of the Plansunder this Scheme to the Scholarship Trust to institute a Scholarship Scheme for the benefit of the Unitholders under thePlans, certain disclosure are being provided herein below as prescribed by SEBI:

Details of Profit/(Loss) after Tax of AMC:

(in Rupees ‘000)

31st March 31st March 31st March 31st March 31st March 31st March2000 2001 2002 2003 2004 2005

Profit/(Loss) after Tax 41,235 83,530 114,289 121,454 272,785 171,679

In the future years, if the AMC makes a loss, then the contributions to the corpus of the Scholarship Trust will be made bythe AMC from it’s Share Capital and Free Reserves, after ensuring that the AMC complies with the net-worth requirementsin terms of the Regulations.

g) Personal Accident Insurance cover for the Resident Applicants :

The Fund has been providing Personal Accident Insurance cover to the Resident Applicants under the Scheme from the dateof allotment of Units. The AMC has negotiated with ICICI Lombard General Insurance Company Limited the provisions ofsuch a cover under a Group Insurance Policy. The following are the broad features of the insurance cover. The Applicants/Unitholders should note that complete details of insurance cover would be advised to them along with the first AccountStatement to be sent to them.


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Details of Personal Accident Insurance cover:

Parent/ Legal Guardian of Unitholder (as specified in the Application Form), resident in India, who has applied for the Unitsin the name of the Beneficiary Child will be entitled for Personal Accident Insurance cover, on allotment of the Units soapplied for. In case of Corporate / other non-individual legal entities and juridical persons who are the Applicants under theScheme, the insurance cover will be available to the Parent/Legal Guardian of the Beneficiary Child (Unitholder) whose nameis stated in the Application form. For this purpose, Group Insurance Policy has been obtained from ICICI Lombard GeneralInsurance Company Limited. The Group Policy, subject to its various terms and conditions, is extended to the Applicantsunder the Plans accident insurance cover for death by accident or Permanent Total Disability sustained due to accident. Thesaid insurance cover will become operative from the date of allotment of Units under the Plans till the Unit holder(Beneficiary Child) attains 18 years of age or the investment under the Plans is redeemed, which ever event occurs earlier. AnApplicant not resident in India (“Non-resident Applicant”) will not be covered under the accident insurance cover. Underthe above Policy, the insurance cover that will be available to the Applicant will, for the present, be equivalent to10 times the value of the Units (valued at the purchase price) outstanding against the name of the Unit holdersubject to a maximum limit of Rs. 5 lakhs per Unitholder. The said limit for the insurance cover may be changed by theTrustee by giving at least one month advance notice to all the Unitholders under the Scheme. Such notice will be given bysuitable display at the Customer Service Centres, communication through the newsletter of the AMC, providing addendumto the offer document and by a display on the website of AMC. The Unitholders will also be informed about the costimplication consequent to the change in the limit of the insurance cover. The insurance cost together with other recurringexpenses shall be within the overall limits prescribed under the Regulations as stated in Page 54. The changes in the limitfor the insurance cover as stated above will be applicable to all new claims to be received by ICICI Lombard GeneralInsurance Company Limited, after the date on which the revision in the maximum limit is effected.

The insurance premium in respect of this cover will be charged to the Scheme.

In the case of an accident resulting in death or permanent total disability of the Resident Applicant, the Applicant or his/herlegal representatives may file the claim directly with the designated branch of the ICICI Lombard General InsuranceCompany Limited supported by all relevant documents as required by the Insurer and the payment of the claim may bemade to the said Applicant/ legal representatives by the insurance company. All insurance claims will be settled in India andshall be payable in Indian Rupees only. Detailed guidelines/ procedure relating to Personal Accident Insurance will beadvised along with the Account Statement.

The Trustee, the AMC, the Mutual Fund or their Directors, or their employees shall not be liable for any claims(including but not limited to rejection of any claim, non settlement, delays etc.) arising out of the insurance coverprovided to the Applicant.

Subject to what has been stated above, the AMC reserves a right to modify / annul the said insurance cover on aprospective basis. The AMC also reserves the right to change the insurance company from time to time.

The cost of obtaining the insurance cover as indicated under the Recurring Expenses on page 54 is indicative andmay change from year to year.

Under the above Policy, the insurance cover that will be available to the Applicant will, for the present, be equivalent to 10times the value of the Units (valued at the purchase price) outstanding against the name of the Unit holder subject to amaximum limit of Rs.5 lakhs per Unitholder.

As stated earlier, the AMC has negotiated with ICICI Lombard General Insurance Company Limited the provisions of sucha cover under a Group Insurance Policy. ICICI Lombard General Insurance Company Limited has provided certain standardexclusions that would be applicable to the said insurance cover and the same are as follows:

(1) The Personal Accident Insurance Cover will not be available in case of natural death of an Applicant or due tointentional self-injury or illness, suicide or attempted suicide.

(2) The Personal Accident Insurance Cover will not be available for amounts relating to medical expenses

(3) Pregnancy Exclusion: The Personal Accident Insurance Cover shall not extend to cover death or disablement resultingdirectly or indirectly caused by, contributed to or aggravated or prolonged by childbirth or from pregnancy or inconsequence thereof.

(4) War Exclusion: The Personal Accident Insurance Cover shall not extend to cover death or disablement due to or arisingout of or directly or indirectly connected with or traceable to War, Invasion, Act of foreign enemy, Hostilities, civil war,Rebellion, Terrorism, Revolution, Insurrection, Mutiny, Military or Usurped Power Seizure, Capture, Arrests, Restraintsand Detainment of all.

(5) Nuclear Exclusion: The Personal Accident Insurance Cover shall not extend to cover death or disablement, injury ordisease directly or indirectly caused by or contributed to by or arising from ionising radiation or contamination byradioactivity from any nuclear fuel or from any nuclear waste from combustion of nuclear fuel including combustionresulting from any self-sustaining process of nuclear fission.

It may be noted that the complete details of insurance cover would be advised to Applicants/ Unitholders along with thefirst Account Statements to be sent to them.

The availability of the insurance cover per folio is explained by way of an illustration as follows:

For an Applicant who makes an initial investment of Rs. 20,000 the insurance cover available will be as follows:

The available insurance cover would be 10 times investment subject to a maximum of Rs. 5,00,000. In the presentillustration, the amount of cover would be Rs. 2,00,000 (Ten times the investment of Rs. 20000). Let us say that this

34


Applicant makes an additional investment of Rs. 50,000. The additional amount of insurance cover available to theApplicant will be Rs. 3,00,000, being the balance additional cover available, which taken with the then existing coveraggregates to Rs. 500,000.

Further, the insurance cover at any point will be valued based on the purchase price of the Units. For example, if A subscribedto the 1000 Units at NAV of Rs. 10 under folio X of the Plan on 1st January 2001, then the Personal Accident cover availableto A under folio X will be for Rs. 1,00,000. Subsequently, assuming that the NAV moved up to Rs. 15 and the said investorredeemed Rs. 12,000 worth of Units, the redemption translates to 800 Units, out of 1,000 Units originally subscribed to.The insurance cover to be cancelled works out to Rs. 80,000 (being 8/10th of Rs. 1,00,000) and the balance cover availableto A under folio X will be Rs. 20,000.

Note: Please note that the details mentioned in the above illustration are only to explain how the insurance cover iscalculated. The NAVs used in the above illustration are hypothetical.

h) Changes in Fundamental Attributes:

The Trustees shall ensure that no change in the fundamental attributes of the Scheme and the Plans thereunder or the trustor fee and expenses payable or any other change which would modify the Scheme and the Plans thereunder and affects theinterests of Unit holders is carried out unless:

� 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

� the Unitholders are given an option to exit at the prevailing Net Asset Value without any exit load.

i) Investment Strategy

Position of Debt Market in India:

The debt market in India is estimated at about Rs.900, 000 crores as of now. A bulk of the debt market consists ofGovernment Securities. Other instruments available currently include Corporate Debentures, Bonds issued by FinancialInstitutions, Commercial Paper, Certificates of Deposits and Securitized Debt. Securities in the Debt market typically varybased on their tenure and rating. Government Securities have tenures from one year to thirty years whereas the maturityperiods of the Corporate Debt varies from one year to ten years. Securities may be both listed and unlisted but this does notimpact liquidity of the instruments. Most of the transactions in the debt market are conducted over telephone and areentered on principal-to-principal basis. The yields and liquidity on various securities, currently, are as under:

Issuer Instrument Maturity Yields Liquidity

GOI Treasury Bill 91 days 5.25-5.30%* HighGOI Treasury Bill 364 days 5.55-5.60%* HighGOI Short Dated 1-3 Yrs 5.75-6.25%** HighGOI Medium Dated 3-5 Yrs 6.25-6.60%** HighGOI Long Dated 5-10 Yrs 6.60-6.90%** HighCorporates Taxable Bonds (AAA) 1-3 Yrs 6.00-6.60%*** MediumCorporates Taxable Bonds (AAA) 3-5 Yrs 6.60-7.10%*** Low to mediumCorporates CPs (P1+) 3 months 5.40-5.65%* Medium to HighCorporates CPs (P1+) 1 Yr 5.80-6.00%* Medium

*Money Market yield**Semi-annual yield***Annualised yield

ii) Fixed Income securities:

The AMC aims to identify securities, which offer superior levels of yield at lower levels of risks. With the aim ofcontrolling risks rigorous in depth credit evaluation of the securities proposed to be invested in will be carried out bythe investment team of the AMC. The credit evaluation includes a study of the operating environment of the issuer, thepast track record as well as the future prospects of the issuer, the short as well as longer-term financial health of theissuer. Rated debt instruments in which the Scheme invests will be of investment grade as rated by a credit ratingagency. The AMC will be guided by the ratings of Rating Agencies such as CRISIL, CARE, ICRA and Duff and PhelpsCredit Rating India Limited or any other agency approved by SEBI, for this purpose. In case a debt instrument is notrated, such investments shall be made by an internal committee constituted by AMC to approve the investment in un-rated debt securities in terms of the parameters approved by the Board of Trustees and the Board of Asset ManagementCompany.

In addition, the investment team of the AMC will study the macro economic conditions, including the political,economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attemptto predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same.

iii) Equities:

For the equity portion of the corpus, the AMC intends to invest in stocks, which are bought, typically with a one-yeartime horizon. Stock specific risk will be minimized by investing only in those companies that have been thoroughlyanalyzed by the Fund Management team at the AMC. The AMC will also monitor and control maximum exposure toany one stock or one sector.


35

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

The Scheme and the Plans thereunder may invest in other schemes managed by the AMC or in the schemes of any otherMutual Funds, provided it is in conformity with the investment objectives of the Scheme and the Plans thereunder and interms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for suchinvestments.

For the present, the Scheme and the Plans thereunder does not intend to enter into underwriting obligations. However, ifthe Scheme and the Plans thereunder does enter into an underwriting agreement, it would do so after complying with theRegulations and with the prior approval of the Board of the AMC/Trustee.

j) Portfolio Turnover

Portfolio turnover is defined as the aggregate of purchases and sales after reducing all subscriptions and redemptions andderivative transactions therefrom and calculated as a percentage of the average assets under management 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. TheAMC will endeavour to balance the increased cost on account of higher portfolio turnover with the benefits derivedtherefrom.

k) Procedure Followed for Investment Decisions:

a) 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.

b) 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 Chief InvestmentOfficer, where considered necessary. It is the ultimate responsibility of the Chief Investment Officer to ensure that theinvestments are made as per the internal/Regulatory guidelines, Scheme investment objectives and in the best interestof the unitholders of the respective schemes.

The AMC has a team comprising of ten Fund Managers. All of these are involved in preparation of research reports.

c) 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 Child Care Plan, the performance of its Study Plan is being benchmarked with CRISIL MIP BlendedIndex, whilst the performance of the Gift Plan is being benchmarked against CRISIL Balanced Fund Index.

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 the Trusteesthe details on Schemes’ performance vis-à-vis the benchmark returns.

d) 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 are made,will be placed before the Board of Directors of AMC for its review.

e) The AMC has been recording investment decisions since the receipt of instructions from SEBI, in terms of SEBI’s circularno. MFD/CIR/ 6 / 73 /2000 dated July 27, 2000.

l) Exposure to Derivatives

The Scheme may use derivatives instruments like Stock/ Index Futures, Interest Rate Swaps, Forward Rate Agreements orsuch other derivative instruments as may be introduced from time to time for the purpose of hedging and portfoliobalancing, within a permissible limit of 50% of portfolio, which may be increased as permitted under the Regulations andguidelines from time to time.

SEBI has issued guidelines for participation in Derivative trading by Equity schemes of Mutual Funds vide its circular datedFebruary 6, 2004, to determine permissible limits for participation in derivative trading by all equity schemes of the Fund.In accordance with the same following will be the Common Derivative Positions and Limits as approved by the Board ofDirectors of AMC:

Sr. Derivative Action Description LimitNo.

1 Index futures Buy Buy futures against cash to To the extent of cash / equivalents in theprotect against rising market portfolio. Max. limit (50%) of portfolio

2 Index futures Sell Hedging of portfolio against Up to (50%) of equity portion of the fundexpected market downturn

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Sr. Derivative Action Description LimitNo.

3 Index Options - Call Buy Buy index calls against cash To the extent of cash / equivalents in the(existing /expected) to protect portfolio. Max. limit (50%) of portfolioagainst rising market

4 Index Options - Call Sell Covered Call Sale- against Up to (50%) of equity portion of the fundexisting portfolio

5 Index Options - Put Buy Buy index puts to hedge Up to (50%) of equity portion of the fundexisting portfolio

6 Index Options - Put Sell Covered Put Sale- Possible top To the extent of cash / equivalents in thesell index puts against existing / portfolio. Max. limit (50%) of portfolioexpected cash

7 Stock futures Buy Buy against cash to protect To the extent of cash / equivalents in theagainst rising share prices portfolio. Max. limit (50%) of portfolio; per

scrip limit (100%)

8 Stock futures Sell Sell against existing stock – To the extent of the particular scrip holdingHedging against downside on in the portfolio; per scrip limit 100%)existing stock in the face ofexpected volatility in the stockprice

9 Stock options - Call Buy Buy against cash to protect To the extent of cash / equivalents in theagainst rising share prices portfolio. Max. limit (50%) of portfolio; per

scrip limit (100%)

10 Stock options - Call Sell Sell against existing stock To the extent of the particular scrip holdingin the portfolio; per scrip limit 100%)

11 Stock options - Put Buy Purchase against existing stock. To the extent of the particular scrip holdingHedging against downside on in the portfolio; per scrip limit 100%)existing stock in the face ofexpected volatility in the stockprice

12 Stock options - Put Sell Covered Put Sale against cash To the extent of cash / equivalents in theportfolio. Max. limit (50%) of portfolio; perscrip limit (100%)

The following information provides a basic idea as to the nature of the derivative instruments proposed to be used by theScheme 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:

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-term periodsfor liquidity purposes has its own risks. Investors can benefit if the Fund remains in call market for the liquidity and at thesame time take advantage of fixed rate by entering into a swap. It adds certainty to the returns without sacrificing liquidity.

The following is an illustration how derivatives work. :Basic Details: Fixed to floating swap

Notional Amount: Rs. 5 CroresBenchmark: NSE MIBORDeal Tenor: 3 months (say 91 days)Documentation: International Securities Dealers Association (ISDA).Let us assume the fixed rate decided was 5%At the end of three months, the following exchange will take place:Counter party 1 pays: compounded call rate for three months, say 4.90%Counter party 2 pays fixed rate: 5%


37

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 may varydepending 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. The pricingof an index future is the function of the underlying index and short-term interest rates.

Example:Assumptions:1 month BSE 30 FutureSpot Index: 4900Future Price on day 1: 4920Fund buys 10,000 futures

Date of settlementFuture price = Closing spot price = 4950Profits for the Fund = (4950-4920)*10000 = Rs 300,000Please 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 (ignoringmargins for the sake of simplicity). Thus, it is clear from the example that the profit or loss for the Fund will be the differenceof the closing price (which can be higher or lower than the purchase price) and the purchase price. The risks associated withindex futures are similar to the one with equity investments. Additional risks could be on account of illiquidity and hencemis-pricing of the future at the time of purchase.

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) of clause1 of the Eighth Schedule to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amendedfrom time to time.

b) The valuation of un-traded derivatives shall be done in accordance with the valuation method for un-traded 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.

m) Investment Restrictions for the Scheme

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

1) The New Fund Offer expenses in respect of any Scheme will not exceed 6% of the Funds raised under that Scheme.

2) 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 SEBI Act.Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board ofTrustees and the Board of Asset Management Company. Provided that, such limit shall not be applicable for investmentsin government securities and money market instruments. Provided further that investment within such limit can bemade in mortgage backed securitised debt, which are rated not below investment grade by a credit rating agency,registered with SEBI. With respect to investments in securitized debt (mortgage backed securities/asset backed securities),issuer would be considered to be the originator of underlying receivables of assets such as mortgage backed securities/ asset backed securities / collaterialised debt obligations etc. in which the scheme/plan has invested and not the Trust/SPV.

3) A mutual fund scheme shall not invest more than 10% of its NAV in un rated debt instruments issued by a single issuerand the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All such investmentsshall be made by an internal committee constituted by AMC to approve the investment in un-rated debt securities interms of the parameters approved by the Board of Trustees and the Board of Asset Management Company.

Debentures, irrespective of any residual maturity period (above or below one year), shall attract the investment restrictionsas 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); 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 in schemes

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under management of any other asset management company shall not exceed 5% of the Net Asset Value of the Fund.No investment management fees shall be charged for investing in other schemes of the Fund or in the schemes of anyother mutual 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 shall in all cases of purchases, take delivery of relativesecurities and in all cases of sale, deliver the securities and will not make any short sales or engage in carry forwardtransaction or badla finance. Provided that mutual funds shall enter into derivatives transactions in a recognised stockexchange for the purpose of hedging and portfolio balancing, in accordance with the guidelines issued by SEBI.

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) No mutual fund scheme shall make any investments in;

a) any unlisted security of an associate or group company of the sponsor; orb) any security issued by way of private placement by an associate or group company of the Sponsor; orc) the listed securities of group companies of the Sponsor which is in excess of 25% of the net assets of the scheme

of the Mutual Fund.13) No mutual fund scheme shall invest more than 10% of its NAV in equity shares of any one company.14) No open-ended mutual fund scheme shall invest more than 5% of its NAV in unlisted equity shares or equity related

instruments.15) The Fund shall not borrow except to meet temporary liquidity needs of the Fund for the purpose of repurchase/

redemption of units or payment of interest and dividend to the Unitholders. Such borrowings shall not exceed morethan 20% of the net assets of the individual scheme and the duration of the borrowing shall not exceed a period of 6months.

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 permitted bySEBI, 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 balance sheetdate, 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.

n) 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 ExchangeBoard of 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.

o) 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 normsare detailed 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 thelast quoted 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 atwhich it 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 maybe used 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 particularvaluation day, the value at which it was traded on the principal stock exchange or any other stock exchange, as thecase may be, on the earliest previous day may be used provided such date is not more than fifteen days prior tovaluation date. When a debt security (other than Government Securities) is purchased by way of private placement,the value at which it was bought 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:


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

In order to determine whether a security is thinly traded or not, the volumes traded in all recognised stockexchanges in 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 thevaluation date, there are no individual trades in that security in marketable lots (currently Rs 5 crore) on theprincipal stock exchange 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.

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 ofthe valuation 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 per shareof 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 independent valuershall 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 the beginningof the day plus the difference between the redemption value and the cost spread uniformly over the remainingmaturity period of the instruments) a similar process should be adopted for non-traded debt securities withresidual 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 interest tillthe beginning of the day) plus the difference between the redemption value (inclusive of interest) and cost spreaduniformly over the remaining maturity period of the instrument. In case of a debt security with maturity greaterthan 182 days at the time of purchase, the last valuation price plus accrued interest should be used instead ofpurchase cost. All other non traded Non Government debt instruments shall be valued using the method suggestedin (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 of 25%to the face value

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

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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 offor deferred revenue expenditure, intangible assets and accumulated losses] divided by {Number of Paid upShares plus Number of Shares that would be obtained on conversion/exercise of Outstanding Warrants andOptions}

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

(b) Average capitalisation rate (P/E ratio) for the industry based upon either BSE or NSE data (which shouldbe followed consistently and changes, if any, noted with proper justification thereof) shall be taken anddiscounted by 75% i.e. only 25% of the Industry average P/E shall be taken as capitalisation rate (P/Eratio). Earnings per share 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 beaveraged and 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 as mentionedabove 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 valued ata 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 finalmaturity and 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 andwould be 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, 2000then 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:


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(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.

(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-endedfund and 20% in the case of closed fund, the concessions of giving time period for reducing the illiquid securityto the prescribed limits would not be applicable and at all time the excess over 15% or 20% shall be assigned nilvalue.

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 – P

of)

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.

vi) Expenses and Incomes Accrued

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

vii) 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,the NAV 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 totime in conformity with changes made by SEBI.

viii) Valuation of Derivative Products :

(i) 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.

(ii) The valuation of untraded derivatives shall be done in accordance with the valuation method for untradedinvestments prescribed in sub clauses (i) and (ii) of clause 2 of the Eighth Schedule to the Securities and ExchangeBoard 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.

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p) 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 explainits transactions and to disclose at any point of time the financial position of the Scheme and, in particular, give a trueand fair view 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 inthe balance sheet at market value. However, since the unrealized gain arising out of appreciation on investmentscannot be distributed, 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 datethe share is quoted on an ex-dividend basis. For investments which are not quoted on the stock exchange, dividendincome would 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 betreated as 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”method shall 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 settlementdate, so that the effect of all investments traded during a financial year are recorded and reflected in the financialstatements for that year. Where investment transactions take place outside the stock market, for example, acquisitionthrough private placement or purchases or sales through private treaty, the transaction would be recorded, in the eventof a purchase, as of the date on which the Scheme obtains an enforceable obligation to pay the price or, in the eventof a sale, when the Scheme obtains an enforceable right to collect the proceeds of sale or an enforceable obligation todeliver the instruments sold.

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 shallbe recognized only when the original shares on which the right entitlement accrues are traded on the stock exchangeon an ex-right basis.

h) Where income receivable on investments has been accrued and has not been received for a period as specified in theRegulation/guidelines issued by SEBI, provision shall be made by debit to the revenue account for the income soaccrued in the manner specified by SEBI.

i) When units are sold in the Scheme, an appropriate part of the sale proceeds shall be credited to an EqualizationAccount and when units are repurchased an appropriate amount shall be debited to Equalization Account. The netbalance on this account shall be credited or debited to the Revenue Account. The balance on the Equalization Accountdebited or credited to the Revenue Account shall not decrease or increase the net income of the Fund but is only anadjustment to the distributable surplus. It shall therefore be reflected in the Revenue Account only after the net incomeof the Fund is determined.

j) When units are sold, after considering the equalization as above, the difference between the sale price and the facevalue of the Unit, if positive, shall be credited to reserves and if negative, shall be debited to reserve, the face valuebeing credited to Capital Account. Similarly, when the Units are repurchased, after considering the equalization asabove, the difference 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 offeredshall be reduced from the cost of the investment.

l) Underwriting commission shall be recognized as revenue only when there is no devolvement on the Scheme. Wherethere is devolvement on the Scheme, the full underwriting commission received and not merely the portion applicableto the devolvement 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 orremained outstanding for one quarter from the date such income/installment have fallen due and relevant guidelinesfor identification and 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 asper changes in the Regulations.

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 / installment has fallen due.

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

The definition of NPA may be applied after a quarter past due date of the interest. For e.g. if the due date for interestis 30.06.2002, it will be classified as NPA from 01.10.2002.


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(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 onthe asset i.e. if the due date for interest falls on 30.06.2002 and if the interest is not received, accrual will continue till30.09.2002 after which there will be no further accrual of income. In short, taking the above example, from thebeginning of 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 30.06.2002,accrual will continue till 30.09.2002 even if the income as on 30.06.2002 has not been received. Further, no accrual willbe done from 01.10.2002 onwards. Full provision will also be made for interest accrued and outstanding as on30.06.2002.

(D) Provision for NPAs – Debt Securities.

Both secured and unsecured investments once they are recognized as NPAs call for provisioning in the same mannerand where these are related to close ended scheme the phasing would be such that to ensure full provisioning priorto the closure 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 nothave discretion to extend the period of provisioning. The provisioning against the principal amount or instalmentsshould be made 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

form the 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

from the 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.9 months 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.12 months 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 theinterest i.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 prescribedvaluation method.

(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

over the 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% afterevery subsequent 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 infull and 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 theprincipal if 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 continuedas per the norms set at (D) above. Any excess provision will be written back.

Some of the investments made by mutual funds may become non-performing (NPAs) or illiquid at the time of maturity/closure of schemes. In due course of time, these NPAs and illiquid securities may be realised by the mutual funds i.e.after the winding up of the schemes.

Such amount would be distributed, if it is substantial and is realised within two years, to the old investors. In case theamount is not substantial or it is realised after two years, it may be transferred to the Investor Education Fundmaintained by each mutual fund as specified in SEBI circular MFD/CIR/9/120/2000 dated November 24, 2000. Thedecision as to the determination of substantial amount shall be taken by the trustees of mutual funds after consideringthe relevant factors.

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(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 canbe 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 theschedule of 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 becontinued and existing provisions should not be written back. This practice should be continued for two quartersof regular servicing of the debt. Thereafter, this be classified as ‘performing asset’ and the interest provided maybe written back.

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

(iii) If the Reschedulement is done for a second/third time or thereafter, the characteristic of NPA should be continuedfor eight quarters of regular servicing of the debt. The provision should be written back only after it is reclassifiedas ‘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 portfoliodisclosure.

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


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SECTION III

UNITS & THE NEW FUND OFFER

GENERAL INFORMATION

a) Minimum Subscription AmountDuring the New Fund Offer period of the Scheme, the total minimum subscription amount prescribed in terms of the earlieroffer document was Rs.1 crore.

b) Offer Price for On-going subscriptionsThe Units of the Plans under the Scheme are available for subscription at Applicable NAV based prices, subject to entry loadprovisions, if any.

c) Minimum Amount for Application

The minimum application amount for the Plans under the Scheme is:

Scheme Minimum Application Amount Additional amount in multiples of:

Prudential ICICI Child Care Plan Rs.5,000 per application and in Rs.1,000 per application and in(Study Plan and Gift Plan) multiples of Re. 1 thereafter multiples of Re. 1 thereafter

d) New Fund Offer Expenses

The New Fund Offer expenses charged to the Scheme were limited to 2.50% of the amount mobilized during the New FundOffer Period under Gift Plan and 1.50% under Study Plan. The New Fund Offer expenses over and above the percentagesstated above were borne by the AMC.

Under the Regulations, the Fund is entitled to charge New Fund Offer Expenses upto a maximum of 6% of the amountcollected during the New Fund Offer Period of the Plans.

New Fund Offer expenses estimated under the Scheme were as under:

Category of Expenses % to target mobilisation

Gift Plan Study PlanCommission to agents and brokers 1.00 1.00Advertisements 1.00 1.00Printing and mailing 0.85 1.28Registrar Expenses 0.15 0.15Bank Charges & other expenses 0.20 0.20Total 3.20 3.63

The above percentages were arrived at based on a target mobilisation of Rs. 1 crore. However, the amount charged tothe Scheme were limited to 2.50% of the amount mobilised during the New Fund Offer Period in case of Gift Planand 1.50% in of the amount mobilised during the New Fund Offer Period in case of Study Plan. Any New Fund Offerexpenses incurred during the New Fund Offer Period over and above the percentages stated above were borne by the AMC.

e) Options and Investment Plans offered under the Scheme

(i) Under the Child Care Plan – Gift Plan and Study Plan, for the present, the Trustee intends to offer only the CumulativeOption. Under this Option, the Plans will not declare any dividends. The income earned by the Plans will remaininvested in the Plans and will be reflected in the Net Asset Value. This option is suitable for investors who are notlooking for regular income. If Units under this option are redeemed after they have been held as a capital asset for aperiod of at least one year from the date of acquisition, Unitholders will get benefit of long-term capital gains tax.Please refer to page 70 on “Taxation”.

The Trustee may, in its sole discretion, introduce at a later date Dividend Option and Dividend Reinvestment Facilityunder the Plans. After the introduction of such Option, the Trustee may decide to declare dividends under the Plans ofthe Scheme. It should however, be noted that actual distribution of dividends and the frequency of distribution areindicative and will depend, inter-alia, on the availability of distributable surplus and will be entirely at the discretion ofthe Trustee.

The Unitholders should note that NAV of Dividend Option and Cumulative Option will be different after the declarationof first dividend as and when such option is introduced.

(ii) Dividend Reinvestment facility:

The Trustee may simultaneously with the introduction of Dividend Option, if it so decides, may offer thefacility of Dividend Reinvestment under the Plans.

Applicants opting for Dividend Option may choose to reinvest the dividend to be received by the Unitholders inadditional Units of the Plan. Under this provision, the dividend due and payable to the Unitholders will be compulsorilyand without any further act by the Unitholders reinvested in the Plan (at the first ex-dividend NAV). The dividends soreinvested shall be constructive payment of dividends to the Unitholders and constructive receipt of the same amountfrom each Unitholder for reinvestment in Units.

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On reinvestment of dividends, the number of units to the credit of Unitholder will increase to the extent of the dividendreinvested divided by the NAV applicable as explained above. There shall, however, be no entry load on the dividendsso reinvested.

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. TheSIP allows the investors to invest a fixed amount of Rupees (subject to minimum of Rs. 1,000/- p.m.) every month forpurchasing additional Units of the Scheme at NAV based prices. Investors can enroll themselves for SIP in the Scheme byticking appropriate box on the application form or by subsequently making a written request to that effect to the Registrar.

The Unitholders opting for SIP may begin their investment with minimum amount of Rs.1,000/- in the Scheme, subject tothe offering of the Units for Purchase after the New Fund Offer Period as stated in “Purchase of Units on an on-going basis”at page 47. The Unitholders who wish to opt for SIP can start his /her investments with a minimum of Rs.1,000 or multiplesthereof plus 5 post dated cheques for a minimum of Rs. 1000, for a block of 5 months in advance. The cheques should bedated 1st or 7th or 10th or 15th of the respective months. Investors can subscribe through SIP by using Auto Debit/StandingInstruction facilities offered by the Banks. No entry load will be charged on the SIP amount into the Scheme. However, theamount so invested into the Scheme will have an exit load equivalent to 2% if the units are redeemed before 365 days.Further, if any of the SIP Cheques bounces or the Fund fails to receive the subscription amount as agreed, the redemptionwill be subjected to a exit load of 2% of applicable NAV irrespective of redemption request being made after 365 days fromthe date of allotment of units.

The cheques/Standing Instructions should be in favour of “Prudential ICICI Child Care Plan – Study Plan”/ “PrudentialICICI Child Care Plan – Gift Plan” as the case may be and crossed “Account Payee Only”, and the cheques must bepayable at the centre where the applications are submitted to the Customer Service Centre. Units will be allotted for theamount net of the bank charges, if any. On receipt of the post-dated cheques, the Registrar/AMC will send a letter to theUnitholder confirming that his/her name has been included in the Systematic Investment Plan. The cheques will be presentedon the dates mentioned on the cheque and Units will be allotted accordingly. Within 3 Business Days of such allotment, afresh Account Statement / Transaction Confirmation will be mailed to the Unitholder, indicating the new balance to his/hercredit in the Account. An investor will have the right to discontinue the Systematic Investment Plan, subject to giving 14day(s) prior notice to the Registrar/AMC.

h) Systematic Withdrawal Plan (SWP)

Systematic Withdrawal Plan is subject to the provisions of Exit load, where applicable. Please see Page 54 for details of Exitload.

Unitholders / Parents / Legal Guardian of the Unitholders of the Plans, as the case may be have the benefit of enrollingthemselves in the Systematic Withdrawal Plan.

The minimum amount which the Unitholder / Parents / Legal Guardian of the Unitholders can withdraw is Rs.500 and inmultiples thereof. The Unitholder / Parents / Legal Guardian of the Unitholders may avail of this plan by sending a writtenrequest to the AMC.

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

Unitholders / Parents / Legal Guardian of the Unitholders may change the amount indicated in the SWP, subject to aminimum amount of Rs. 500 and in multiples thereof. The SWP may be terminated on a written notice by a Unitholder /Parents / Legal Guardian of the Unitholders of the Plans and it will terminate automatically if all Units are liquidated orwithdrawn from the account or upon the Funds’ receipt of notification of death or incapacity of the Unitholder.

i) Who can Invest?

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

The investments should be made on behalf of the minor child:

� Resident adult individuals 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 ofIncome-Tax Rules, 1962

� Partnership Firms


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� 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, as may be permitted by SEBI from time to time.

� Any other category of investor who may be notified by Trustees from time to time by display on the website of the AMC.

The age of the Unitholder (the Beneficiary Child) must be less than 18 years as on the date of investment by theApplicants. Subsequent purchases of Units may be made until the Beneficiary Child completes 18 years of age. Noproof of age is required. Declaration by the Applicant and the date of birth mentioned in the Application Form issufficient.

j) How to apply?

i. Purchase of Units on an on-going basis:

The Plans are open for fresh subscriptions on an on-going basis. Applications by new Applicants (i.e. other thanexisting Unitholders) must be for a minimum amount of Rs.5,000 and in multiples of Re.1 thereafter. Parents / LegalGuardian of the existing Unitholders of the Plans can, however, purchase additional Units for any amount, subject tothe minimum additional amount of Rs.1000 (plus in multiples of Re.1).

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/Plan’s Unit capital is not in the general interest of the Unitholders, or the Trusteefor any other reason believes it would be in the best interest of the Scheme and the Plans thereunder or its Unitholdersto accept/reject such an application.

ii. Purchase Price

The purchase price of the Units, on an ongoing basis, will be based on the Applicable NAV. For the present, the Trusteeintends to charge entry load as follows:


Study Plan 1.50%

Gift Plan 1.50%

However,the Trustee reserves the right to modify the entry load or a combination of entry and exit loads or differentialloads based on the tenor and the amount of investment with prospective effect under the Plans. The maximum load(entry/exit) under the Scheme and the Plans thereunder will not exceed the limits as prescribed under the Regulations.

Purchase Price per Unit will be calculated as under:

Purchase Price = Applicable NAV * (1+ Entry Load).

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 Unitsshall not exceed the permissible limit of 7% of the Purchase Price, as provided for under the Regulations.

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 to3.00 p.m. on that Business Day.

iii. How to Purchase the Units on an on-going basis?

The application forms for the purchase of Units of the Scheme and the Plans thereunder will be available at the officeof the AMC and the Customer Service Centres. New investors can purchase Units by completing an Application Form.Parents / Legal Guardian of the existing Unitholders of the Plans may use the transaction slip for additional purchasessent with the Account Statement or a new Application Form. Payment for purchase of Units will be accepted onlythrough a cheque or demand draft drawn payable at the centre where the application is lodged, drawn in favour of“Prudential ICICI Child Care Plan – Study Plan”/ “Prudential ICICI Child Care Plan – Gift Plan” as the case may be.All such cheques/drafts must be crossed “Account Payee Only”.

The cheque/demand draft should be payable at the Centre where the application is lodged. The cheque/demand draftshould be drawn on any Bank which is situated at and is a member/sub-member of the Bankers’ Clearing House.Cheques/demand drafts drawn on a Bank not participating in the Clearing House will not be accepted.

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

Investors residing in centres, where the Prudential ICICI Customer Service Centres are not located, are requested tomake payment by demand drafts payable at the Centre where the application is to be lodged. The DD charges will beborne by the Fund as per the table below:

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Amount of investment Rate of Charges of Demand Draft(s)Upto Rs. 10,000/- At actuals, however maximum Rs. 50/-Above Rs. 10,000/- Rs. 2/- per Rs. 1,000/-

The Fund will not reimburse Demand Draft charges where the demand draft amount exceeds Rs. 50,000/- for purchaseof units by investors residing at location where the Customer Service Centres/Collection Centres of the AMC arelocated.

In case of all purchase transactions including purchase requests under the Plans of the Scheme, the AMC reserves theright to reject/reverse the transaction, if an amount of Rs. 1 Lakh and above is received by way of MICR cheques at thecenters where high value clearing is available.

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 forany other reason believes it would be in the best interest of the Schemes or its Unitholders to accept/reject such anapplication.

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 request forredemption would be considered as not valid and the Fund retains the right to withhold the redemption until a properbank mandate is furnished by the Unit-holder and the provision with respect of penal interest in such cases will not beapplicable/ entertained.

iv) Issuance of Units/Account Statement

Under normal circumstances, an Account Statement/Transaction Confirmation will be mailed to the investor, indicatingthe number of Units purchased within 3 Business Days of the acceptance of a valid application for purchase of Units.

With the prior consent of the Unitholder, the account statement will be sent by e-mail only. In the event of non-realization of any cheque or other instrument remitted by the investor, the transaction of crediting the Unitholder’saccount will be reversed.

v) NRIs, FIIs:

NRIs:

In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May 3, 2000, RBI has granted general permission toNRIs to purchase, on a repatriation basis units of domestic mutual funds. Further, the general permission is alsogranted to NRIs to sell the units to the mutual funds for repurchase or for the payment of maturity proceeds, providedthat the units have 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-TaxAct 1961.

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

In case of NRI investments, the applications and the rupee draft have to be accompanied by the debit certificate fromthe bank on which cheque is drawn.

In case the debit certificate is not provided, the AMC reserves the right to reject the application of the NRI investors.

FIIs:

In terms of Schedule 5 of Notification no. FEMA 20/2000 dated May 3, 2000. RBI has granted general permission toa registered FII to purchase on a repatriation basis units of domestic mutual funds subject to the conditions set out inthe aforesaid 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 withthe 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-TaxAct 1961.

vi) Mode of Payment on Repatriation basis

FIIs may pay their subscription amounts either by way of inward remittance through normal banking channels or outof funds held in Foreign Currency Account or Non-resident Rupee Account maintained by the FII with a designatedbranch of an authorized dealer with the approval of the RBI subject to the terms and conditions set out in the aforesaidnotification.

In case Indian rupee drafts are purchased abroad or from Foreign Currency Accounts or Non-resident Rupee Accountsan account debit certificate from the Bank issuing the draft confirming the debit shall also be enclosed.

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.

All cheques/drafts should be made out in favour “Prudential ICICI Child Care Plan -Study Plan -NRI/FIISubscription”/ “Prudential ICICI Child Care Plan -Gift Plan -NRI /FII Subscription”/ and crossed “Account PayeeOnly”. In case Indian Rupee drafts are purchased abroad or from FCNR/NRE A/c. an account debit certificate from theBank issuing the draft confirming the debit shall also be enclosed.


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vii) Mode of payment on Non-Repatriation basis

In case of NRIs/PIOs/FIIs applying for Units on a non-repatriation basis, payments may be made by cheques/demanddrafts drawn out of Non-Resident Ordinary (NRO)/ Non Resident Special Rupee (NRSR) accounts and Non ResidentNon-Repatriable (NRNR) accounts payable at the city where the Application Form is accepted.

viii) Investments of the minor investor on attaining majority:Upon attaining majority, a minor has to write to the fund, giving his specimen signature duly authenticated by hisbanker as well his new bank mandate, PAN details, UIN details (if applicable as per prevalent SEBI Guidelines) in orderto facilitate the Fund to update its records and permit the erstwhile minor to operate the account in his own right. Incase the necessary details are not provided, then the prevalent provision of the SEBI Regulations shall apply.

ix) Application under Power of Attorney/ Body Corporate/ Registered Society/ Trust/ PartnershipEvery investor, depending on the category under which he/she/ it falls, is required to provide the relevant documentsalongwith the application form as may be prescribed by AMC.

In case of an application under the Power of Attorney or by a limited company, body corporate, registered society, trustor partnership etc., the relevant Power of Attorney or the relevant resolution or authority to make the application as thecase may be, or duly certified copy thereof, along with the memorandum and articles of association/bye-laws must belodged at the Registrar’s Office at the time of submission of application.

In case an investor has issued Power of Attorney (POA) for making investments, switches, redemptions etc. under hisfolio, both the signature of the investor and the POA holder have to be clearly captured in the POA document to beaccepted as a valid document. At the time of making redemption / switches the fund would not be in a position toprocess the transaction unless, POA holder’s signature is available in the POA or proof of identity alongwith signatureis produced along with the POA.

x) Joint ApplicantsIn 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 Unitholderswill have the power to make redemption requests, without it being necessary for all the Unitholders to sign. However,in all cases, the proceeds of the redemption will be paid to the first-named holder.

ix) Nomination FacilityThe AMC has provided this nomination facility as an additional feature. By provision of this facility the AMC is not inany way attempting to grant any rights other than those granted by law to the nominee. A nomination in respect of theUnits does 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 may be.

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

Before the Unitholder attains MajorityThe Parent / Legal Guardian of a Unitholder (Beneficiary Child) may name a nominee while making the application or suchnomination can be registered subsequently but before the Unit holder attains the Majority. Such nomination may be madein the manner and form prescribed by AMC in this behalf. The AMC shall not be liable to recognise any nominations thatdo not meet the requirements as may be specified by the AMC.In the event of unfortunate event of the death of the Unit holder and in the event that 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. In the event ofunfortunate death of the Unit holder during the tenor of the Scheme and where no nominee has been named, the value ofUnits at the credit of the deceased Unit holder will be paid by the Fund to the parent / legal guardian of the Unit holder asapplicable and where neither Parent is alive or no such guardian has been appointed by the Competent Court, to any otherGuardian of the Unitholder which shall be full and valid discharge of the AMC / Fund from all further liabilities in respectof the sums so paid. In the event of simultaneous death of the Unit holder and the nominee , the parent / legal guardian ofthe Unit holder alone shall have the right to claim the value of Units at the credit of the deceased Unit holder. Such paymentsmade by the AMC shall be full and valid discharge of the AMC / Fund from all further liabilities in respect of the sums sopaid.The AMC shall have the right to ask for any additional information / documentation as it may deem necessary to satisfy itselfas to the identity of the Guardian including but not limited to procuring an Indemnity Bond.After the Unitholder attains MajorityAnytime after attaining Majority, the Unitholder can write to the Customer Service Centre of the AMC requesting for aNomination Form in order to nominate any person to receive the Units upon his / her death, subject to completion ofnecessary formalities. Such nominations made by the Unit holders, shall override all prior nominations. Payment to such lastnamed nominee in the Register of AMC shall discharge the Mutual Fund of all liability towards the estate of the deceased

50


Unit holder and his/her successors / legal heirs. The nomination facility extended under the Scheme is subject to the thenexisting laws. Nomination Forms are available at any of the Customer Service Centre of the AMC

k) Account Statements

Under normal circumstances, an Account Statement will be mailed to the investor indicating the units purchased within 3business days of acceptance of a valid application for purchase of units and in case the investor has provided his/her e-mailaddress, the Account Statement will be sent by e-mail message only.

The Account Statements shall be non-transferable. If the Unitholder so desires, non-transferable unit certificates will beissued within six weeks of the receipt of request for the certificate.

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

l) Redemption of Units

The Units can be redeemed (i.e. sold back to the Fund) at the Applicable NAV (hereinafter defined) on an on-going basis,subject to levy of applicable Exit Load as specified in this offer document on page 54. Redemption requests can be made inamounts, with a minimum of Rs.1000 or 100 Units. Redemption can also be made for the total number of units standingto the credit of investor at the time of closure of account, even though such redemption is for less than Rs.1000.

Redemption requests can be made in amounts with a minimum of Rs.1000 or 100 Units.

The Units can be redeemed by the Parents/ Legal Guardian of the Unitholder (subject to provision of necessary documentaryevidence) before the Unitholder attains the age of Majority. On attaining majority, the Unitholder (Beneficiary Child) mayeither by himself/herself may request redemption of Units. Such redemption requests may be for a specified amount or aspecified number of Units. If only the redemption amount is specified by the Unitholder, the Fund will divide the redemptionamount so specified by the Applicable NAV based price to arrive at the number of Units.

In case Units have been purchased on more than one Business Day (either during the New Fund Offer Period, or throughsubsequent purchases), the Units purchased prior in time (i.e. those Units which have been held for the longest period oftime) will be deemed to have been redeemed first i.e. on a First-in-First-Out basis.

Unitholders / Parent/ Legal Guardian as the case may be, may also request for redemption of their entire holding and closethe account by indicating the same at the appropriate place in the Redemption Request Form.

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 requestfor redemption would be considered as not valid and the Fund retains the right to withhold the redemption untila proper bank mandate is furnished by the Unit-holder and the provision with respect of penal interest in suchcases will not be applicable/ entertained.

i) Redemption Price

The Redemption Price of the Units will be based on the Applicable NAV subject to the prevalent exit load provisions.The Redemption Price of the Units will be computed as follows:

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

Hence, if an investor redeems an amount of less than Rs. 5 Crores before the completion of 1 year from the date ofallotment of units and assuming that the applicable NAV of the Scheme is Rs. 12.00, the redemption price would be:

Rs. 12.00 – (1.00% * Applicable NAV) = Rs. 11.88

However, subject to the maximum load as permitted under the Regulations, the Trustee has a right to fix, from time totime, the exit load payable by the investors under the Scheme. Notice of the changes in the load structure shall be madeby a suitable display in the Customer Service Centres of the AMC and will be communicated to the intermediaries andinvestors in the matter prescribed by SEBI as outlined in Page 54.

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 Unitsshall not exceed the permissible limit of 7% of the Purchase Price, as provided for under the Regulations.

ii) Applicable NAV

(a) Purchases: In respect of valid applications received upto the cut-off time by the Mutual Fund alongwith a localcheque or a demand draft payable at par at the place where the application is received, the closing NAV of the dayon which application is received shall be applicable.

In respect of valid applications received after the cut-off time by the Mutual Fund alongwith a local cheque or ademand draft payable at par at the place where he application is received, the closing NAV of the next business dayshall be applicable.

However, in respect of valid applications with outstation cheques/demand drafts not payable at par at the placewhere the application is received, closing NAV of the day on which cheque/demand draft is credited shall beapplicable.

(b) Redemptions: In respect of valid applications received upto the cut-off time by the Mutual Fund, same day’sclosing NAV shall be applicable.

In respect of valid applications received after the cut-off time by the Mutual Fund, the closing NAV of the nextbusiness day shall be applicable.

(c) Cut-off time for Purchases & Redemptions: 3.00 p.m.


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iii) Cooling-off period for web based and InstaCall transactions:

For all web-based transactions under the schemes of Prudential ICICI Mutual Fund, entered through the website of thefund viz. www.pruicici.com or through the Call Centre of the Fund, there would be a cooling off period of 30 minutesbefore the respective cut-off times for purchase and sale transactions.

For purchase transactions through the website of the Fund, following rules will apply:

(a) Internet Banking: As stated above, provided the electronic bank confirmation is received simultaneously for web-based transactions using internet banking.

(b) Applications accompanied by physical cheques/ Demand Drafts: The units will be issued at par, on receipt ofphysical transaction request at the nearest official point of transaction of the AMC within 3 business days from thedate of transaction.

iv) How to Redeem?

The redemption requests can be made on the transaction slip for redemption available at the Customer ServiceCentres. The redemption request can be made at any of the Customer Service Centres as listed in this Offer Document.Procedure for redemptions of the Units will be as follows:

As stated above, the Parent/ Legal Guardian may sign such redemption requests till the Unitholder attains majority. Onattaining majority, the Unitholder or the Unitholders as the case may be may sign such redemption requests.

In case the Units are standing in the names of more than one Unitholder (in cases where the Unitholder after attainingmajority requests the Fund to include the name of another individual as the Joint Holder-Please see “Joint Applicants”on Page 49) redemption requests will need to be signed by all such Joint Holders. However, in cases of holdingspecified as ‘Anyone or Survivor’, any one of the Unitholders will have the power to make redemption requests,without it being necessary for all the Unitholders to sign. However, in all cases, the proceeds of the redemption will bepaid only to the first-named holder.

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

v) Payment of Proceeds

All redemption requests received prior to 3.00 p.m. on any Business Day will be considered accepted on that BusinessDay, subject to the redemption request being complete in all respects, and will be priced on the basis of the ApplicableNAV (subject to the applicable load) for that day. Where an application is received after the cut-off time, as above, therequest will be deemed to have been received on the next Business Day. Please see page 52 ‘Right to Limit Redemption’and page 53 ‘Suspension of Sale and Redemption of Units’.

As per the Regulations, the Fund shall despatch the redemption proceeds within 10 (ten) Business Days (working days)from the date of acceptance of redemption request at any of the Customer Service Centres or the office of the Registrar,in case of a Redemption request being sent by post.

Under normal circumstances, the Fund will endeavour to pay/dispatch the redemption proceeds within 3 Business Daysfrom the date of acceptance of the redemption request.

The default option for payment of redemption/dividend proceeds for all the investments would be Direct Credit intothe bank account in case the investor has provided his bank mandate as one of the banks participating in direct creditarrangement and if he fails to specify the mode of payment. If a specific written request is received from the unit holderfor change in method of payment/name of bank then the following mode of payment will be applicable (except for themode of payment all other provisions are applicable to all modes of payment):

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

In order to protect interest of the Unitholders from fraudulent encashment of cheques the current SEBIRegulations has made it mandatory for Applicants to mention their bank name and account numbers of theUnitholders in their applications for purchase or redemption of Units. The normal processing time may notapplicable in situations where such details are not provided by the Applicants/ Unitholders. The AMC will notbe responsible for any loss arising out of fraudulent encashment of cheques or any delay or loss in transit.

The proceeds of redemption will be paid by a cheque/warrant drawn in favor of the Unitholder and payable to the Bankaccount of the said Unitholder. The Applicants are therefore advised to furnish the details of the bank account of theUnitholder/ Beneficiary child along with the redemption application form.

On attaining majority, the Unitholders are advised to furnish their bank account details, if such details are not earlierfurnished to the Fund.

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 request forredemption would be considered as not valid and the Fund retains the right to withhold the redemption until a properbank mandate is furnished by the Unit-holder and the provision with respect of penal interest in such cases will not beapplicable/ entertained.

Redemption/ Repurchase of Units by the Parents / Legal Guardian of the Unitholders of the Plans before the Unit-

52


holder attains majority represents the income arising to the Unit-holder who is a minor. Under provisions of Section64(1A) of the Income-tax Act, 1961, all income which arises or accrues to the minor shall be clubbed to the income ofthat of parent of the minor whose total income (excluding the income included under section 64(1A) is greater.

A fresh Transaction Confirmation will be sent by the Registrar to the redeeming investors, indicating the new balanceto the credit in the Account. With the prior consent of the Unitholder, the account statement will be sent by e-mail only.

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

If a Unitholder/Parent / Legal Guardian makes a redemption request immediately after purchase of Units, the Fund shallhave a right to withhold the redemption request till sufficient time has elapsed to ensure that the amount remitted byhim (for purchase of Units) is realized and the proceeds have been credited to the Plan’s Account under Scheme.However, this is only applicable if the value of redemption is such that some or all of the freshly purchased Units mayhave to be redeemed to effect the full redemption.

vi) Non receipt of email communication by Investors:

When an investor has communicated his/her e-mail address and has provided consent for sending communicationonly through email, the Mutual Fund / Registrars are not responsible for email not reaching the investor and for allconsequences thereof.

The Investor shall from time to time intimate the Mutual Fund / its transfer agents about any changes in the emailaddress.

vii) Redemption by NRIs/FIIs

Credit balance in the account of an NRI/FII Unitholder may be redeemed by such Unitholder / Parents / Legal Guardianof the Unitholders as the case may be in accordance with the procedure described above and subject to any procedureslaid down by RBI.

Such redemption proceeds will be paid by means of a Rupee cheque payable to the NRI’s/ FIIs or by a foreign currencydraft drawn at the then current rates of exchange less bank charges thereof subject to RBI procedures and approvals.

In terms of the Schedule 5 of Notification no. FEMA 20/2000 dated May 3, 2000 issued under the Foreign ExchangeManagement Act, 1999 (FEMA) the RBI has granted general permission to NRIs and FIIS who have purchased unitsissued by mutual funds in accordance with the aforesaid notification to tender units to the mutual funds for repurchaseor for the payment of maturity proceeds.

For the purpose of this section, the term “Mutual Funds” is as referred to in Clause (23D) of Section 10 of Income-TaxAct 1961.

viii) Effect of Redemptions

The Unit Capital and Reserves of the Plans 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.

ix) Fractional Units

Since a request for redemption or purchase is generally made in Rupee amounts and not in terms of number of Unitsof the Scheme and the Plans thereunder, the Unitholder may be left with Fractional Units. Fractional Units will becomputed and accounted for up to three decimal places. However, Fractional Units will in no way affect the investor’sability to redeem the Units, either in part or in full standing to the Unitholder’s credit.

x) Signature mismatch cases

While processing the redemption / switch out request in case the AMC / Registrar come across a signature mismatch,then the AMC/ Registrar reserves the right to process the redemption only on the basis of supporting documentsconfirming the identity of the investors. List of such documents would be notified by AMC from time to time on itswebsite.

xi) Right to Limit Redemptions

After complying with the regulatory requirements, the Trustee and the Board of Directors of the AMC may, in thegeneral interest of the Unitholders of the Scheme offered under this Offer Document and keeping in view theunforeseen circumstances/unusual market conditions, limit the total number of Units which may be redeemed on anyBusiness Day to 5% of the total number of Units then in issue, 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 forwardfor Redemption to the next Business Day, in order of receipt. Redemptions so carried forward will be priced on the basisof the Applicable NAV (subject to the prevailing load) of the Business Day on which Redemption is made. Under suchcircumstances, to the extent multiple Redemption requests are received at the same time on a single Business Day,Redemptions will be made on pro-rata basis, based on the size of each Redemption request, the balance amount beingcarried forward for Redemption to the next Business Day(s).

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. After obtainingthe approval from the AMC Board and the Trustees, intimation would be sent to SEBI in advance providing details ofcircumstances and justification for the proposed action shall also be informed.


53

xii) 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 are 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 ofthe Unitholders of the Scheme.

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

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. After obtainingthe approval from the AMC Board and the Trustees, an intimation would be sent to SEBI in advance providing detailsof circumstances and justification for the proposed action shall also be informed.

xiii) Permanent Account Number (PAN)

If the application is for 50,000 or more, then the PAN and IT Circle/Ward/District (if available) of the applicant shouldbe mentioned and a copy of PAN Card/Form 60 should be attached with the application form. In case of any personwho does not have a permanent account number shall make a declaration in Form No.60. Any application formwithout these details will not be accepted by the fund.

xiv) Unique Identification Number (UIN)

As per the directives issued by SEBI, from time to time, it is mandatory for applicant who is termed as specified investorto quote UIN (Unique Identification Number) (allotted under SEBI MAPIN Regulation) in the application form. Anyapplication form without these details may not be accepted by the fund.

xv) Dormant Account Locking

Investment Folios under which there are no transactions for last 24 months shall be classified as dormant folios.Redemption, change of address and change of bank requests in such accounts will be put through only after secondarychecks and such additional safeguards that may be stipulated from time to time.

54


SECTION IV

LOAD STRUCTURE, FEES AND EXPENSES

a) LOAD STRUCTURE OF THE SCHEME

For the present, the Trustee, on an ongoing basis intends to charge an Entry and Exit loads as shown below:

Entry Load:


Study Plan 1.50%Gift Plan 1.50%

Exit Load

Prudential ICICI Child Care Plan Exit Load(Study Plan and Gift Plan)

If the amount sought to be redeemed under any of the above Plans is not invested 1.00%for a period of 3 years.

If the amount sought to be redeemed under any of the above Plans is invested Nilfor a period of 3 years but redeemed before the Unitholder (the Beneficiary Child)attains the age of 18 years.

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide to introduce adifferential load structure on the Units subscribed/redeemed on any Business Day. Such changes will be applicable forprospective investments. The Trustee shall arrange to display a notice in the Customer Service Centers of the AMC at least10 days before the change of the then prevalent load structure. The addendum detailing the changes in load structure willbe attached to offer documents and abridged offer documents. The addendum will also be circulated to all the distributors/ brokers so the same can be attached to all the offer documents and abridged offer documents in stock. This addendumwill also be sent along with the newsletter sent to the unitholders immediately after the changes. Changes in the loadstructure may be stamped in the acknowledgement slip issued by the Fund after the changes in load structure. The loadcollected from the Unitholders under each Plan will be credited to a separate account in the respective Plan accounts andwill be offset 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 the AMC.

For investments by a Fund of Fund Scheme(s) in the Plans of the Scheme, if any, there would not be any entry load/exit loadcharged by the underlying Scheme.

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 becharged to the Scheme and the Plans thereunder:

i) New Fund Offer Expenses

The total New Fund Offer Expenses chargeable to the Plans as per the current Regulations are subject to a maximum of6% of the amount collected during the New Fund Offer Period. The New Fund Offer expenses charged to the Schemewere limited to 2.50% of the amount mobilized during the New Fund Offer Period under Gift Plan and 1.50% underStudy Plan. The New Fund Offer expenses over and above the percentages stated above were borne by the AMC.

ii) Estimated Recurring Expenses

Description For Gift Plan For Study Plan(% per annum of (% per annum of

average net assets) average net assets)

Investment Management Fee 1.25 1.25Trustee Fee 0.05 0.01Custodian Fee 0.16 0.10Marketing & Selling 0.08 0.04Registrar & Transfer Agent 0.12 0.10Audit Costs 0.01 0.01Costs of Investor Communications 0.12 0.08Cost of Funds Transfer 0.10 0.10Costs for A/c Statements, Dividend etc. 0.11 0.11Cost of Statutory Advertisements 0.05 0.01Insurance Premium 0.40 0.40Other Expenses 0.05 0.04Total Recurring Expenses 2.50 2.25


55

The purpose of the above table is to assist the investor in understanding the various costs and expenses that aninvestor in the Scheme and the Plans thereunder will bear. These estimates are based on a corpus size of Rs.1 croreunder the Scheme and its Plans and would change to the extent assets are lower or higher. If the corpus size is in excessof Rs.1 crore, the above mentioned recurring expenses in the Scheme and the Plans thereunder would change. Theabove expenses are subject to inter-se change and may increase/decrease as per actual and/or any change in theRegulations.

These estimates have been made in good faith as per information available to the AMC and the total expenses may bemore than as specified in the table above. However, as per the Regulations, the total recurring expenses that can becharged to the Scheme and the Plans thereunder in terms of this Offer Document shall be subject to the applicableguidelines as indicated on page 54 under the head “Recurring Expenses”. Expenses over and above the permittedlimits will be borne by the AMC.

The total recurring expenses under the Plans will, however, be limited to the ceilings as prescribed under Regulation52(6) of the Regulations as stated on page 54 under the head “Recurring Expenses”.

C) NEW FUND OFFER EXPENSES OF EXISTING SCHEMES

(i) New Fund Offer Expenses

During the last one fiscal year, ICICI Mutual Fund launched Prudential ICICI Fixed Maturity Plan Series 6, PrudentialICICI Fixed Maturity Plan Series 25 – Quarterly Plan, Prudential ICICI Discovery Fund, Prudential ICICI Fixed Maturity PlanSeries 25 – 15 Months Plan, Prudential ICICI Fixed Maturity Plan – Series 26 – Quarterly Plan, Prudential ICICI FixedMaturity Plan – Series 25 – Yearly Plan, Prudential ICICI Long Term Floating Rate Plan, Prudential ICICI Emerging S.T.A.R.(Stock Targeted At Returns) Fund, Prudential ICICI Fixed Maturity Plan Series 12, Prudential ICICI Fixed Maturity PlanSeries 5 and Prudential ICICI Plan I (a close ended scheme) on, July 29, 2004, August 10, 2004, August 16, 2004,August 17, 2004, August 31, 2004, September 10, 2004, September 15, 2004, October 28, 2004, December 14,2004, December 31, 2004 and March 24, 2005 respectively.

New Fund Offer Expenses – Comparison Of Estimated To Actual

The New Fund Offer Expenses relating to Prudential ICICI Fixed Maturity Plan Series 6, Prudential ICICI Fixed MaturityPlan Series 25 – Quarterly Plan, Prudential ICICI Fixed Maturity Plan Series 25 – 15 Months Plan, Prudential ICICI FixedMaturity Plan – Series 26 – Quarterly Plan, Prudential ICICI Fixed Maturity Plan – Series 25 – Yearly Plan, Prudential ICICILong Term Floating Rate Plan Prudential ICICI Fixed Maturity Plan Series 12, Prudential ICICI Fixed Maturity Plan Series5 and Prudential ICICI Plan I were borne by the AMC.

Description Emerging S.T.A.R Long Term Floating Rate Discovery Plan I

Estimated - Actual -% to Estimated - Actual - % to Estimated - Actual - % to Estimated - Actual - % to% to Target Subscription % to Target Subscription % to Target Subscription % to Target Subscription

Amount Amount Amount Amount

Advertising, printing andother marketing expenses * 0.00 - 0.27 * 0.41 5.75 0.10Collection, Registrar andBank charges * 0.03 - 0.00 * 0.00 0.10 0.00Selling Commissions * 0.27 - 0.00 * 0.00 0.15 0.00

Total 3.75 0.30 6% 0.27% 3.75 0.41% 6% 0.10%

Target Amount/AmountMobilised Rs.1 Lakh Rs.198.38 Rs.1 Lakh Rs. 1,71.20 Rs.1 Lakh Rs. 1,34.72 Rs. 35 Rs. 1,82.74

Crores Crores Crores Crores

Note:

* The New Fund Offer expenses charged to the Scheme, as per Offer Document were limited to 3.75% of the amountmobilized under the New Fund Offer Period

56


(ii) Condensed Financial Information:

a. Condensed Financial Information for the period ended March 31, 2002.

Tax Plan Gilt Gilt Balanced Technology Monthly Gilt TreasuryTreasury Investment Fund Fund Income 1 Year Plus

Plan Plan

Historical Per Unit Statistics

Date of Allotment Aug. 19, Aug. 19, Aug. 19, Nov. 03, Mar. 3, Nov. 10, Apr. 30,1999 1999 1999 1999 2000 2000 2001

NAV at the beginning of the 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 3.30

Monthly 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 0.87

Dividends

Dividend Option - @1.2452 @2.5897 - - - @0.8321

Monthly option - - - - - @1.0230 -

Quarterly option - - - - - @1.0800 -

Half Yearly Option - - - - - @1.0965 -

Transfer to Reserves - - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 10.55% 12.23% 20.06% -3.01% -41.80% 12.44% 8.69%*

Benchmark Index Nifty N.A N.A Nifty ET Mindex N.A N.A

Return compared to Benchmark Index -6.45% N.A N.A -6.45% -51.05% N.A N.A

Net Assets end of period (Rs. Crore) 72.46 80.58 466.50 189.52 160.09 123.58 185.93

NAV at the end of the period

Growth 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 - 10.0213

Monthly Option - - - - - 10.1792 -

Quarterly Option - - - - - 10.2228 -

Half Yearly Option - - - - - 10.2187 -

Ratio of Recurring Exps to Net Assets 2.14% 1.08% 1.13% 2.30% 2.41% 2.00% 0.30%

Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed MaturityPlan - Plan – Half Plan –Yearly 1 Plan - Plan –

Quarterly 1 Yearly 1 Quarterly 2 Quarterly 3

Historical Per Unit StatisticsDate of Allotment December 20, December 20, December 20, January 22, February 20,

2000 2000 2000 2001 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(Based on NAVs of Growth Option) 9.34% 9.27% 9.77% 8.69% 9.49

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%


57

Fixed Maturity Fixed Maturity Fixed Maturity Fixed MaturityPlan - Half Yearly 2 Plan - Yearly 2 Plan – Yearly 3 Plan – Yearly 4


Date of Allotment March 22, March 22, June 21, September 20,2001 2001 2001 2001

NAV at the beginning of the year (Rs.)Growth Option 10.0093 10.0356 # #Dividend Option 10.0093 10.0356 # -Net Income per unit 0.5520 0.99 0.67 0.39Dividends @0.7765 @0.9231 - -Transfer to Reserves - - - -Compounded Annualised Returns(Based on NAVs of Growth Option) 8.15% 10.03% 6.75%* 4.38%*Benchmark Index N.A N.A N.A N.AReturn compared to Benchmark Index N.A N.A N.A N.ANet Assets end of period (Rs. Crore) 0.16 102.28 7.80 6.36NAV at the end of the periodGrowth Option 10.8363 11.0292 10.6753 10.4381Dividend Option 10.0388 10.0110 10.6753 10.4381Ratio of Recurring Exps to Net Assets 0.55% 0.60% 0.60% 0.60%

Child Care Plan- Child Care Plan- Short term Fixed MaturityGift option Study option Plan Plan – Yearly 5

Historical Per Unit StatisticsDate of Allotment August 31, 2001 August 31, 2001 October 25, 2001 March 22, 2002NAV at the beginning of the year (Rs.)Growth Option # # # #Dividend Option - - - -Net Income per unit 0.45 0.50 0.33 0.01Dividends - - 0.3430@ -Transfer to Reserves - - - -Compounded Annualised Returns(Based on NAVs of Growth Option) 11.60%* 8.90%* 3.92%* 0.35%*Benchmark Index Nifty N.A N.A N.AReturn compared to Benchmark Index 7.19 N.A N.A N.ANet Assets end of period (Rs. Crore) 7.38 7.85 418.32 85.40NAV at the end of the periodGrowth Option 11.16 10.89 10.3915 10.0354Dividend 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

Historical Per Unit StatisticsDate of Allotment February 26, 2002 March 28, 2002 March 6, 2002NAV at the beginning of the year (Rs.)Growth Option 10.0000 10.0000 10.0000Dividend Option - - -Net Income per unit 0.01 0.01 0.03Dividends - - -Transfer to Reserves - - -Compounded Annualised Returns(Based on NAVs of Growth Option) -4.80%* 0.10%* 0.52%*Benchmark Index Nifty N.A N.AReturn compared to Benchmark Index -5.03% N.A N.ANet Assets end of period (Rs. Crore) 7.73 50.05 5.31NAV at the end of the periodGrowth Option 9.52 10.0096 10.0520Dividend Option - - -Ratio of Recurring Exps to Net Assets 1.25% 0.80% 1.25%

58


Notes:

1) Returns since inception are for the growth plan in each case except for Prudential ICICI Gilt Fund – One Year Plus Plan inwhich Growth Option is not available.

2) 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.

3) 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 Child CarePlan – Gift Plan & Study Plan, Prudential ICICI Short Term Plan, Prudential ICICI Long Term Plan, Prudential ICICI Sweep Planand Prudential ICICI Index Fund have not completed one year since the date of their launch. Returns are computed inabsolute terms and for Growth Options only from the date of allotment. The NAV on the date of allotment is taken as Rs.10for computation of returns.

@ Including distribution tax.

b) Condensed Financial Information for the period ended March 31, 2003.

Monthly Fixed Fixed Fixed GiltIncome Maturity Maturity Maturity Treasury

Plan Plan - Qtly 1 Plan – Plan – 1 YearHalf Yearly 1 Yearly 1 Plus

Plan***


Date of Allotment November 10, December 20, December 20, December 20, April 30,2000 2000 2000 2000 2001


Growth Option 11.7643 11.2079 11.1988 11.2644 -

Dividend Option - 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 1.02 0.14 5.90 13.82 N.A.

Dividends - - - -

Monthly option 0.6692 - - - -

Quarterly option 0.6963 - - - -

Half-Yearly Option 0.7346 - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) 10.69% 7.99% 7.97% 8.27% -

Benchmark Index Crisil MIP $ $ $ -Blended

Index

Return compared to Benchmark Index 1.60% # # # -

Net Assets end of period (Rs. Crore) 275.36 34.98 0.51 0.43 -


Growth Option 12.7427 11.9131 11.9083 11.9840 -

Dividend Option - 10.6695 10.8855 10.8482 -

Monthly Option 10.3323 - - - -

Quarterly Option 10.3550 - - - -

Half Yearly Option 10.3177 - - - -

Institutional Option – Monthly Dividend 10.6701

Ratio of Recurring Exps to Net Assets 1.58% 0.55% 0.55% 0.60% 0.30%

Ratio of Recurring Exps to Net Assets-Institutional Plan-Annualised 0.25%


59

Fixed Fixed Fixed Fixed Fixed Fixed Child Child ShortMaturity Maturity Maturity Maturity Maturity Maturity Care Care Term

Plan - Plan - Plan-Half Plan- Plan - Plan - Plan- Plan- PlanQtrly 2 Qtrly 3 Yearly 2 Yearly 2 Yearly 3 Yearly 4 Gift Study

Option Option


Date of Allotment Jan. 22, Feb. 20, Mar. 22, Mar. 22, June 21, Sept 20, Aug. 31, Aug. 31, Oct. 25,2001 2001 2001 2001 2001 2001 2001 2001 2001

NAV at the beginning of the year (Rs.) 11.16 10.89

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 Returns(Based on NAVs of Growth Option) 7.68% 7.86% 6.84% 8.44% 8.22% 7.48% 4.16% 8.76% 8.47%

Benchmark Index $ $ $ $ $ $ Crisil Crisil CrisilBalanced MIP Composite

Fund Blended BondIndex Index Fund

Return compared to Benchmark Index $ $ $ $ $ $ -0.76% -1.88% -2.49%

Net Assets end of period (Rs. Crore) 0.92 5.51 0.04 10.51 20.41 0.01 10.72 12.36 1078.83

NAV at the end of the period 10.67 11.42

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 Growth - - - - - - - - 11.2345

Ratio of Recurring Exps to Net Assets 0.55% 0.55% 0.55% 0.60% 0.60% 0.60% 2.00% 1.50% 1.00%

Ratio of Recurring Exps to Net Assets-Institutional Plan-Annualised - - - - - - - - 0.80%

Fixed Index Fund Long term Sweep Plan Fixed FixedMaturity Plan Maturity Maturity

Plan – One Year One YearYearly 5 Plan – Plan –

Series 6 Series 7


Date of Allotment March 22, February 26, March 28, March 6, June 28, August, 19,2002 2002 2002 2002 2002 2002


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 - - - - - -

Transfer to Reserves - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 8.43% -15.45% 13.52% 5.15% 6.55%* 3.14%*

Benchmark Index $ Nifty Crisil Crisil Liquid $ $Composite Fund IndexBond Fund

Return compared to Benchmark Index # 0.89% 3.16% -1.10% # #

Net Assets end of period (Rs. Crore) 93.77 13.51 234.34 22.86 139.96 1.27

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 - - - - -

Ratio of Recurring Exps to Net Assets 0.60% 1.25% 0.60% 1.03% 0.60% 0.60%

Ratio of Recurring Exps to Net Assets-Institutional Plan-Annualised - - - - - -

60


Fixed Flexible Dynamic SPICE Fixed FloatingMaturity Income Plan Maturity Rate Plan

Plan – Plan Plan –Yearly 8*** Yearly 12


Date of Allotment Sept. 17, Sept. 27, Oct. 31, Jan. 10, Mar. 21, Mar. 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 - - - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) Nil 7.74%* 2.80%* -9.40%* 0.19%* 0.05%*

Benchmark Index $ I-Sec Nifty SENSEX $ CRISILSi-Bex Liquid

FundIndex

Return compared to Benchmark Index # 4.20% 0.14% -0.16% # @@

Net Assets end of period (Rs. Crore) 0.00 587.77 78.31 19.35 42.23 528.11

NAV at the end of the period - 10.7745 10.2799 30.4342 10.0046

Growth Option 10.0191

Dividend Option - - - - - -

Institutional Option Growth 10.0208

Ratio of Recurring Exps to Net Assets 0.60% 1.00% 2.00% 0.80% 0.75% 0.75%

Ratio of Recurring Exps to Net Assets-Institutional Plan-Annualised - - - 0.20% -

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 the periodof the respective condensed financial information whereas the returns compared to benchmark index are computed for thefinancial year.

* Fixed Maturity One Year Plan – Series 6, 7, 8, Fixed Maturity Plan – Yearly 12, Prudential ICICI Flexible Income Plan, PrudentialICICI Dynamic Plan, SENSEX Prudential ICICI Exchange Traded Fund and Prudential ICICI Floating Rate Plan have notcompleted one year since the date of their launch. Returns are computed in absolute terms and for Growth Options onlyfrom the date of allotment. The NAV on the date of allotment is taken as Rs.10 for computation of returns

*** 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

# These Schemes were launched during the year and these schemes were not in existence at the beginning of the year.

$ Appropriate benchmark index is not available.

@@ Since the units under Scheme were allotted on March 29, 2003 the return compared to Benchmark Index detail is notprovided.


61

c) Condensed Financial Information for the period ended March 31, 2004

Fixed Maturity Fixed Maturity Child Care Plan- Child Care Plan-Plan – Yearly 3^ Plan - Yearly 4^ Gift Option Study Option

Historical Per Unit StatisticsDate of Allotment June 21, 2001 Sept 20, 2001 August 31, 2001 August 31, 2001NAV at the beginning of the year (Rs.) 10.67 11.42Growth Option 11.5055 11.1635 - -Dividend Option - - - -@@ Net Income per unit N.A. N.A. 1.45 1.10Dividends 0.7908 - - -Transfer to Reserves - - - -Compounded Annualised Returns(Based on NAVs of Growth Option) N.A N.A. 29.52% 14.32%Benchmark Index $ $ Nifty Crisil MIP

Blended IndexReturn compared to Benchmark Index $ $ 1.81% 5.02%Net Assets end of period (Rs. Crore) N.A N.A. 25.10 21.87NAV at the end of the period - - 19.51 14.13Growth Option - - - -Dividend Option - - - -Ratio of Recurring Exps to Net Assets 0.60% 0.57% 2.00% 1.50%

Short Fixed Index Long Sweep Fixed FixedTerm Maturity Fund term Plan Maturity MaturityPlan Plan – Plan One Year One Year

Yearly 5 Plan – Plan –Series 6 @ Series 7^

Historical Per Unit StatisticsDate of Allotment Oct. 25, Mar. 22, Feb. 26, Mar. 28, Mar. 6, Jul. 21, Aug. 19,

2001 2002 2002 2002 2002 2003 2002NAV at the beginning of the year (Rs.) 8.3278 10.5508 10.6555 10.3140Growth Option 11.2323 10.8643 - 11.3634 - - -Dividend Option 10.7561 - - - - - -Institutional Option - Growth 11.2345 - - - - - -@@ Net Income per unit 1.1672 0.4563 1.9315 1.2781 0.2800 1,269.5603 NADividends 0.8039 - - - - - -Fortnightly Dividend Option 0.5644 - - - - - -Institutional Fortnightly Dividend Option 0.5995 - - - - - -Institutional Dividend Option 0.6027 - - - - - -Transfer to Reserves - - - - - - -Compounded Annualised Returns 7.58% 6.19% 22.07% 11.26% 4.53% 29.37%* NA(Based on NAVs of Growth Option)Benchmark Index Crisil $ Nifty Crisil Crisil $ $

Short Composite LiquidTerm Bond FundBond Fund IndexFund Index

Return compared to Benchmark Index 0.51% $ 1.13% 0.12% -0.45% $ $Net Assets end of period (Rs. Crore) 1,176.93 5.72 21.88 245.28 59.90 0.02 N.A.NAV at the end of the period - 11.2941 15.1811 12.3924 10.9616 12.9370 N.AGrowth Option 11.9441 - - - - - -Dividend Option 10.6050 - - - - - -Institutional Option Growth 11.9703 - - - - - -Institutional Option - Dividend 10.8415Institutional Fortnightly Option –Dividend 10.8443 - - - - - -Dividend (Fortnightly) 10.6052 - - - - - -Ratio of Recurring Exps to Net Assets 1.00% 0.60% 1.25% 0.60% 1.00% 0.60% 0.60%Ratio of Recurring Exps to Net Assets-

62


Flexible Flexible Dynamic SPICE Fixed Floating Fixed FixedIncome Income Plan Maturity Rate Plan Maturity Maturity

Plan Plus Plan – Plan – NRI Plan – Plan^ Yearly 12 Series 4 – NRI Series 4 –

Half Yearly Quarterly^


Date of Allotment Sept. 27, May 22, Oct. 31, Jan. 10, Mar. 17, Mar. 28, Oct. 21, Oct. 21,2002 2003 2002 2003 2003 2003 2003, 2003,

NAV at the beginning of theyear (Rs.) 10.7745 # 10.2799 30.4342 10.0046 # #Growth Option - - - - 10.0191 - - -Institutional Option - Growth - - - - 10.0208 - - -@@ Net Income per unit 1.4298 N.A. 8.6880 19.3355 0.6369 0.1441 0.2498 N.A.Dividends 0.1200 - - - - 0.0182 0.1090Dividend Option (Quarterly) 0.4000Divide4nd Option (fortnightly) - - -Transfer to Reserves - - - - - - - -Compounded Annualised Returns(Based on NAVs of Growth Option) 12.48% N.A. 55.75% 52.60% 5.97% *5.04% *2.50% N.A.Benchmark Index I-Sec N.A. Nifty BSE $ CRISIL $ $

Composite SENSEX Liquid Index Fund

Return compared toBenchmark Index -2.26% N.A. 1.06% 1.60% $ 0.66% $ $Net Assets end of period (Rs. Crore) 822.16 N.A. 109.35 15.67 44.90 512.71 65.10 N.A.NAV at the end of the period N.A. - 56.2998 - - 10.2498Growth Option 11.9432 18.7310 10.6156 10.5040Dividend Option 10.6894 - 8.0733 - - 10.0421 N.A.Quarterly Option 10.6894 - - - - - - -Institutional Option Growth - - - - 10.6762 - - -Ratio of Recurring Exps to Net Assets 1.00% 0.50% 2.08% 0.80% 0.75% 0.75% 0.10% 0.55%Ratio of Recurring Exps to Net Assets-Institutional Plan-Annualised - - - - 0.20% -

Fixed Gilt Fund Fixed Fixed Gilt Fund IncomeMaturity Investment Maturity Maturity Treasury Multiplier

Plan – NRI Plan - PF Plan – Plan – Plan - PF FundSeries 6 – Option NRI Series 8 – Series 23 Option

Quarterly^ Quarterly ̂

Historical Per Unit StatisticsDate of Allotment Nov. 21, Nov. 19, Dec. 17, Dec. 15, Feb. 11, Mar. 30,

2003 2003 2003 2003 2004 2004NAV at the beginning of the year (Rs.) # # # # # #@@ Net Income per unit NA 0.1975 NA 0.1635 0.0435 -0.0132Dividends 0.1103 - 0.1121 - - -Option A - - - 0.1375 - -Transfer to Reserves - - - - - -Compounded Annualised Returns(Based on NAVs of Growth Option) NA *2.91% NA *1.53% *1.63% *-0.76%Benchmark Index $ I-Sec Li Bex $ $ I-Sec Si Bex CRISIL

CompositeBond Fund

IndexReturn compared to Benchmark Index $ 0.36% $ $ 0.64% -0.80%Net Assets end of period (Rs. Crore) NA 111.14 NA 66.04 43.31 238.70NAV at the end of the period NA 10.2906 NA 10.1633 9.9240Option B - - - 10.1532 - -Option C - - - 10.1342 - -Option D - - - 10.1342 - -Option E - - - 10.1354 - -Option F - - - 10.1238 - -Option G - - - 10.1371 - -Option H - - - 10.1336 - -Ratio of Recurring Exps to Net Assets 0.56% 1.10% 0.55% 0.49% 1.50% 2.09%


63

Fixed Fixed Advisor Advisor Advisor Advisor AdvisorMaturity Plan – Maturity Series – Series – Series – Series – Series –

Series 24 – Plan – Aggressive Cautious Moderate Very VeryYearly Series 24 - Plan Plan Plan Aggressive Cautious

Quarterly Plan Plan


Date of Allotment Mar 20, Mar 20, Dec 18, Dec 18, Dec 18, Dec 18, Dec18,2004 2004 2003 2003 2003 2003 2003

NAV at the beginning of the year (Rs.) # # # # # # #

@@ Net Income per unit 0.0174 0.0163 0.0712 0.1110 0.0502 0.3141 0.2754

Dividends - - - - - - -

Transfer to Reserves - - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) *0.18% *0.17% *-0.02% *2.75% *1.64% *-1.41% *1.42%

Benchmark Index $ $ $$ $$ $$ $$ $$

Return compared to Benchmark Index $ $ -1.07% 1.53% 0.55% -2.34% 0.20%

Net Assets end of period (Rs. Crore) 71.09 91.95 30.12 130.00 49.39 28.41 25.24

NAV at the end of the period 10.0176 10.0169 9.9982 10.2753 10.1643 9.8586 10.1419

Dividend Plan – NRI Option - - 9.5898 9.9692 9.7985 - -

Ratio of Recurring Exps to Net Assets 0.20% 0.22% 0.53% 0.33% 0.43% 0.66% 0.19%

Notes:

1) Returns since inception are for the growth plan in each case except in case of Fixed Maturity Plan – NRI Series 4 – Half Yearlywhere there is no Growth Option. For Fixed Maturity Plan – Yearly Series 23 the returns have been calculated on the basisof the NAV of Option H.

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, 2004.


* Fixed Maturity One Year Plan – Series 6, Prudential ICICI Floating Rate Plan, Fixed Maturity Plan – NRI Series 4 – Half Yearly,Prudential ICICI Gilt Fund Investment Plan & Treasury Plan – PF Option, Fixed Maturity Plan – NRI Series 8 – Quarterly, FixedMaturity Plan – Yearly Series 23, Prudential ICICI Income Multiplier Fund, Fixed Maturity Plan – Series 24 – Quarterly andYearly and Prudential ICICI Advisor Series – Aggressive, Cautious, Moderate, Very Aggressive and Very Aggressive Plans havenot completed one year since the date of their launch. Returns are computed in absolute terms and for Growth Optionsonly from the date of allotment. The NAV on the date of allotment is taken as Rs.10 for computation of returns

** Un-audited.

# These Schemes were launched during the year and these schemes were not in existence at the beginning of the year.

$ Appropriate benchmark index is not available.

@ All the unitholders under Prudential ICICI Fixed Maturity Plan – One Year Plus Series – 6 have redeemed their units on July14, 2003 and there was fresh subscription on July 21, 2003 at Rs. 10.00, hence, simple absolute returns have beencalculated.

@@ The Net Income per unit mentioned has excluded Income equalisation & marked to market calculated on the basis of marketvalue of net assets of the Scheme on the valuation date, divided by the number of units outstanding on that date. It may benoted that, as it merely indicates the net income per unit on the valuation date calculated based upon outstanding units ofthe scheme on the given date, it is subject to vary from time to time and does not reflect any income / loss of the scheme.

^ All the unit holders under Prudential ICICI Fixed Maturity Yearly Plan Series 3, 4 & 7, Fixed Maturity Plan – NRI Series 4, 6 &8 –Quarterly Option and Prudential ICICI Flexible Income Plus Plan have redeemed their units and unit balance are nil as onthe date of this report.

$$ As provided in the offer document the Benchmark Indices for various Plans under Prudential ICICI Advisor Series are asgiven below:

Benchmark Aggressive Cautious Moderate Very VeryIndices Plan Plan Plan Aggressive Cautious

Plan Plan

Nifty 65 % 20% 50 % 90 % NA

Crisil Composite Bond Fund Index 30% 60 % 35 % NA 40%

Crisil Liquid Fund Index 5 % 20 % 15 % 10 % 60%

64


Condensed Financial Information for the period ended May 31, 2005**

Fixed Maturity Flexible Income Dynamic SPICEOne Year Plan – Plan Plan

Series 6 @


Date of Allotment 29-Jul-04 27-Sep-02 31-Oct-02 10-Jan-03


Growth Option 10.3433 12.171 26.8776 65.799

Dividend Option 10.4863 11.5918

Quarterly Option 10.4135

@@ Net Income per unit 0.08 0.10 0.24 0.21

Compounded Annualized Returns(Based on NAVs of Growth Option) 4.37% 7.95% 50.35% 34.45%

Benchmark Index $ CRISIL Nifty BSE SENSEXCompositeBond Fund

Return compared to Benchmark Index $ 0.14% 4.10% 0.14%

Net Assets end of period (Rs. Crore) 225.48 81.44 278.57 0.52


Growth Option / Plan A 10.4366 12.2727 28.681 68.1347

Dividend Option /Plan A 10.5739 12.3694


Ratio of Recurring Exps to Net Assets forRegular Plans/Plan A % 0.25 1.08 2.34 0.80

Transfer to Reserves Nil Nil Nil Nil

Gilt Fund Gilt Fund Income FixedInvestment Plan - Treasury Plan - Multiplier Maturity Plan –

PF Option PF Option Fund Series 24 –Yearly


Date of Allotment 19-Nov-03 11-Feb-04 30-Mar-04 20-Mar-04



@@ Net Income per unit 0.11 0.07 0.19 0.13

Compounded Annualized Returns(Based on NAVs of Growth Option) 3.36% 3.90% 8.75% 5.42%

Benchmark Index I-Sec Li Bex I-Sec Si Bex Crisil MIP $Blended

Index

Return compared to Benchmark Index 0.68% (0.37%) 0.13% $

Net Assets end of period (Rs. Crore) 101.65 96.09 148.35 73.05



Ratio of Recurring Exps to Net Assets forRegular Plans/Plan A % 1.10 1.50 2.17 0.20

Transfer to Reserves Nil Nil Nil Nil


65

Advisor Advisor Advisor Advisor AdvisorSeries - Series - Series - Series– Series – Very

Aggressive Cautious Moderate Very CautiousPlan Plan Plan Aggressive Plan

Plan


Date of Allotment 18-Dec-03 18-Dec-03 18-Dec-03 18-Dec-03 18-Dec-03


Growth Option / Plan A 11.8089 10.7587 11.1156 12.2955 10.6066

Dividend Option /Plan A 11.8089 10.7587 11.1156 12.2955 10.6066

@@ Net Income per unit 0.30 0.28 0.09 0.27 0.11

Compounded Annualised Returns(Based on NAVs of Growth Option) 14.73% 5.95% 9.58% 18.78% 4.77%

Benchmark Index $$ $$ $$ $$ $$

Return compared to Benchmark Index 0.88% 0.79% 0.81% 0.94% 0.75%

Net Assets end of period (Rs. Crore) 9.37 18.44 14.51 10.86 12.25


Growth Option / Plan A 12.2081 10.8749 11.4204 12.8384 10.7004

Dividend Option /Plan A 12.2081 10.8749 11.4204 12.8384 10.7004

Ratio of Recurring Exps to Net Assetsfor Regular Plans/Plan A % 0.55 0.35 0.45 0.70 0.20

Transfer to Reserves Nil Nil Nil Nil Nil

Discovery Plan @Fixed Maturity Fixed MaturityPlan-Series 25- Plan- Series 25

Quarterly 15months


Date of Allotment 16-Aug-04 14-Dec-04 17-Aug-04


Growth Option 13.33 10.3025

Dividend Option 13.33


Institutional Growth 10.3248

@@ Net Income per unit 0.50 0.13 0.13

Dividends (inclusive of distribution tax if, any) 1.00 0.1348

Compounded Annualized Returns(Based on NAVs of Growth Option) *48.3% *4.37% 3.90%

Benchmark Index S&P CNX Nifty $ $

Return compared to Benchmark Index 7.52% $ $

Net Assets end of period (Rs. Crore) 260.48 281.12 174.84


Growth Option / Plan A 14.83 10.1648 10.3897

Dividend Option /Plan A 13.75 10.0296

Quarterly Option

Institutional Growth / Plan B 10.4182

Institutional Dividend / Plan B

Ratio of Recurring Exps to Net Assets forRegular Plans/Plan A % 2.34 0.15 0.60

Transfer to Reserves Nil Nil Nil

66


Fixed @Fixed Emerging @Fixed @Fixed PrudentialMaturity Maturity S.T.A.R. Maturity Maturity ICICI

Plan - Plan - (Stocks Plan - Plan - Plan ISeries 25 - Series 26 - Targeted Series 5 Series 12

Yearly Quarterly AtPlan Returns)

Historical Per Unit StatisticsDate of Allotment 10-Sep-04 31-Dec-04 28-Oct-04 31-Dec-04 14-Dec-04 24-Mar-05NAV at the beginning of the year (Rs.)Growth Option / Plan A 10.2671 10.0493 11.82 10.1535 10.1549 10.0156Dividend Option /Plan A 10.0418 11.82 10.1535 10.0156Quarterly OptionInstitutional Growth / Plan B 10.1587 10.1653 10.016Institutional Dividend / Plan B 10.1587 10.016@@ Net Income per unit 0.13 0.09 0.46 0.13 0.12 0.10Compounded Annualized Returns(Based on NAVs of Growth Option) *3.60% *3.99% *34.7% 2.77% 2.63% *1.33%Benchmark Index $ $ CNX Nifty $ $ Crisil

Junior CompositBondFundIndex

Return compared to Benchmark Index $ $ 10.36% $ $ 0.31%Net Assets end of period (Rs. Crore) 34.86 280.91 135.54 128.70 408.35 183.51NAV at the end of the periodGrowth Option / Plan A 10.3598 10.1419 13.47 10.2772 10.2628 10.1331Dividend Option /Plan A 10.1344 13.47 10.2772 10.1331Institutional Growth / Plan B 10.2858 10.2793Institutional Dividend / Plan B 10.2858Ratio of Recurring Exps to Net Assetsfor Regular Plans/Plan A % 0.40 0.15 2.42 0.45 0.67 0.45Ratio of Recurring Exps to Net Assetsfor Institutional Plans/Plan B % 0.25 0.32 0.25Transfer to Reserves Nil Nil Nil Nil Nil Nil

Floating Rate Plan Long Term FloatingRate Plan


Date of Allotment March 28, 2003 15-Sep-04NAV at the beginning of the year (Rs.) #Growth Option – Plan A 10.3193 10.2649Dividend Option – Plan A 10.0069 10.0148Growth Option – Plan B 11.0208 10.2921Dividend Option – Plan B 10.0438 10.0105Growth Option – Plan C 10.3434 -Dividend Option – Plan C 10.0072 -Daily Dividend Option – Plan A 10.0012 -Daily Dividend Option – Plan B 10.0012 -Daily Dividend Option – Plan C 10.0013 -@@ Net Income per unit 0.09 0.10Dividend Option – Plan A 0.0682 -Dividend Option – Plan B 0.0718 -Dividend Option – Plan C 0.0727 -Daily Dividend Option – Plan A 0.0963 -Daily Dividend Option – Plan B 0.0918 -Daily Dividend Option – Plan C 0.0935 -Compounded Annualised Returns(Based on NAVs of Growth Option) 4.99% 3.53%*


67

Floating Rate Plan Long Term FloatingRate Plan

Benchmark Index CRISIL Liquid Fund CRISIL Liquid Fund IndexReturn compared to Benchmark Index 0.10% 0.14%Net Assets end of period (Rs. Crore) 2518.01 721.84NAV at the end of the period -Plan A - Growth 10.4072 10.3534Plan A- Dividend 10.0235 10.1013Plan B - Growth 11.1193 10.3881Plan B- Dividend 10.0613 10.104Plan C - Growth 10.4376 -Plan C- Dividend 10.0249 -Daily Dividend Option – Plan A 10.0012 -Daily Dividend Option – Plan B 10.0012 -Daily Dividend Option – Plan C 10.0013 -Ratio of Recurring Exps to Net Assets-Plan A 1.00% 1.25Ratio of Recurring Exps to Net Assets-Plan B 0.75% 0.82Ratio of Recurring Exps to Net Assets-Plan C 0.65% -Transfer to Reserves Nil Nil

Notes:

1) Returns since inception are for the growth plan in each case except under Fixed Maturity Plan – Quarterly Series 24, FixedMaturity Plan – Quarterly Series 25, Fixed Maturity Plan – Quarterly Series 26 for which returns have been calculated afteradjusting declaration of dividend.

2) The additional Plan viz. Plan A, Plan B & Plan C were introduced in Prudential ICICI Floating Rate Plan on July 29, 2004. Theexisting option was assigned as Plan B and returns for the scheme has been computed using Plan B - Growth Option.Similarly in case of Prudential ICICI Long Term Floating Rate Plan returns have been computed using Plan A - GrowthOption.

3) While arriving at Net Income per unit, Income Equalization Reserve and mark to market has not been considered and it iscalculated on the basis of closing units as of May 31, 2005.


5) The Growth & Dividend options were introduced under Fixed Maturity Plan – Quarterly Series 25, Fixed Maturity Plan –Quarterly Series 26 for the specified subscription period from March 3, 2005 & May 12, 2005 respectively.

* Prudential ICICI Discovery Fund, Prudential ICICI long Term Floating Rate Plan, Fixed Maturity Plan Series 25 – Quarterly,Yearly, 15 Months Plan, Fixed Maturity Plan Series 26 – Quarterly plan, Prudential ICICI Emerging S.T.A.R. (Stock Targeted AtReturn) Fund and Prudential ICICI Plan1 have not completed one year from the date of their launch. Returns are computedin absolute terms and for Growth Options only from the date of allotment. The NAV on the date of allotment is taken asRs.10 for computation of returns

** Un-audited.$ Appropriate benchmark index is not available.@ All the unitholders under Prudential ICICI Fixed Maturity Plan – One Year Plus Series – 6, Prudential ICICI Fixed Maturity Plan

–Series – 12, Prudential ICICI Fixed Maturity Plan –Series – 5, Prudential ICICI Fixed Maturity Plan - Quarterly Series – 25,Prudential ICICI Fixed Maturity Plan - Quarterly Series – 26 have redeemed their units on July 28, 2004 & September 21,2004, April 5, 2004 & April 21, 2004 respectively and there was fresh subscription on July 29, 2004, September 28, 2004,December 14, 2004 & December 31, 2004 at Rs. 10.00, hence, simple absolute returns have been calculated by consideringthe date of reopening of the plan, as a date of allotment.

@@ The Net Income per unit mentioned has excluded Income equalization & marked to market calculated on the basis of marketvalue of net assets of the Scheme on the valuation date, divided by the number of units outstanding on that date. It may benoted that, as it merely indicates the net income per unit on the valuation date calculated based upon outstanding units ofthe scheme on the given date, it is subject to vary from time to time and does not reflect any income / loss of the scheme.

$$ As provided in the offer document the Benchmark Indices for various Plans under Prudential ICICI Advisor Series are asgiven below:

Benchmark Indices Aggressive Cautious Moderate Very VeryPlan Plan Plan Aggressive Cautious

Plan Plan

Nifty 70 % 15% 40 % 90 % NA

Crisil Composite Bond Fund Index 25% 70 % 40 % NA 30%

Crisil Liquid Fund Index 5 % 15 % 20 % 10 % 70%

68


SECTION VI

UNITHOLDERS RIGHTS & SERVICES

a) Investor ServicesThe Fund believes in providing the investors with a superior service to make the investors’ experience in dealing with theFund an efficient and satisfactory one. In order to achieve these goals, the Fund will endeavour to continuously establishand upgrade systems to handle transactions efficiently and resolve any investor grievances promptly.

b) Ease of TransactionsThe 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 metrosThe AMC presently has Customer Service Centres in various cities. Over a period of time, the AMC may add furtherCustomer Service Centres and/or sales offices in other cities. Unitholders can go to these Service Centres / Sales Officesfor enquiries and transactions during business hours.

ii) Process transactions in a timely mannerUnder the Regulations, the Fund/ the Registrar / AMC shall despatch to the Unitholders the dividend warrants, if any,within thirty days of the date of declaration of dividend and the Redemption proceeds within ten Business Days fromthe date of acceptance / 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 T+2 Business Daysfrom 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 Business Days. Investors should note that completionof 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 the Regulations.

c) Problem ResolutionThe Fund will follow-up with Customer Service Centres and Registrar on complaints and enquiries received from investorsfor resolving them promptly.For this purpose, Mr. Mahesh Ranade has been appointed the Investor Relations Officer. He can be contacted at theCorporate Office of the AMC. The address and phone numbers are:503, 5th Floor, Peninsula TowerPeninsula Corporate ParkGanpatrao Kadam Marg,Off Senapati Bapat MargLower Parel Mumbai 400 013Phone: (91)(22) 24997000Fax : (91)(22) 24997029

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, andan abridged Scheme wise annual report shall be mailed to all Unitholders, not later than six months from March 31 of eachyear. 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 inthe 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 60 days from the close of each half year, in the prescribed format.

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 Scheme’s portfolio or if such statement is not sent to the Unitholders, it will bepublished by way of an advertisement in one English daily circulating in the whole of India and in a newspaper publishedin the language of 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 information on NAVmay be obtained by the Unitholders, on any day, by calling the office of the AMC or any of the Customer Service Centres oron the Website of the AMC www.pruicici.com. The Fund will use its best endeavour to publish NAVs daily, in at least twodaily newspapers. Further, the AMC shall endeavour to publish Purchase and Redemption prices of Units daily in anewspaper with all India circulation.

AMC shall update the NAVs on the website of Association of Mutual Funds in India - AMFI (www.amfiindia.com) by 8.00-p.m. every Business Day. 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 Fundshall issue a press release providing reasons and explaining when the Fund would be able to publish the NAVs.


69

f) Disclosure of information under the RegulationsThe Fund will, not later than six months after the close of each financial year (March 31), publish through an advertisement,an abridged Annual Report relating to the Scheme and mail to the Unitholders an abridged scheme wise annual report. Itis anticipated that the first such publication will be for the period ending March 31, 2004 after the roll-over of the schemeas an open ended fund. 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 be sent 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 circulating all India and in a newspaper published inthe 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 60 days from the close of each half year, in the prescribed format.

g) Rights of Unitholders of the Scheme:1. Unitholders of the Scheme have a proportionate right in the beneficial ownership of the assets of that Scheme.2. The Trustee is bound to make such disclosures to the Unitholders as are essential in order to keep them informed about

any information known to Trustee which may have an adverse bearing on their investments.3. The appointment of an AMC for the Fund can be terminated by majority of the Trustee or by 75% of the Unitholders

of the Scheme of the Fund and any change in the appointment of the AMC shall be subject to the prior approval of SEBIand the Unitholders of the Scheme.

4. The Trustee is obliged to convene a meeting on a requisition of 75% of the Unitholders of the Scheme.5. 75% of the Unitholders of a Scheme and the Plan thereunder can pass a resolution to wind up the Scheme.6. Unitholders have the right to inspect all the documents listed under “Documents Available for Inspection”.7. The Trustee shall obtain the consent of the Unitholders:

a) whenever required to do so by SEBI, in the interest of Unitholdersb) whenever required to do so on the requisition made by three-fourths of the Unitholders of the Scheme.

c) when the Trustee decides to wind up or prematurely redeem the units.8. The Trustees shall ensure that no change in the fundamental attributes of any scheme or the trust or fee and expenses

payable or any other change which would modify the scheme and affects the interests of unit holders is carried outunless:a) a written communication about the proposed change is sent to each Unitholder andb) an advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaper

published in the language of the region where the Head Office of the mutual fund is situated; andc) the Unitholders are given an option to exit at the prevailing Net Asset Value without any exit load.

9. 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. pruicici.com)Unitholders, if they so desire, may request for the annual report of the AMC.

h) Duration of the Scheme /Winding upThe duration of the Scheme is perpetual. The AMC, the Fund and the Trustee reserve the right to make such changes/alterations in the Scheme (including the charging of fees and expenses) offered under this Offer Document to the extentpermitted by the applicable Regulations. However, in terms of the Regulations, a Scheme may be wound up after repayingthe amount due to the Unitholders:On happening of any event, which in the opinion of the Trustee, requires the Scheme to be wound up, ORIf seventy five percent (75%) of the Unitholders of the Schemes pass a resolution that the Scheme be wound up, ORIf SEBI so directs in the interest of the Unitholders

4. In case of non-fulfillment of two conditions prescribed in terms of minimum number of investors and minimumholding by single investor vide SEBI circular No. SEBI/IMD/CIR No.10/22701/03 dated December 12, 2003.Where the Scheme is so wound up, the Trustee shall give notice of the circumstances leading to the winding up of theScheme to:

1. SEBI and,2. In two daily newspapers with 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 casemay 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 upThe Trustee shall call a meeting of the Unitholders of the Scheme to approve by simple majority of the Unitholders presentand voting at the meeting for authorizing the Trustee or any other person to take steps for the winding up of the Scheme.

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The Trustee or the person authorized above shall dispose of the assets of the Scheme in the best interest of the Unitholdersof the Scheme.

The proceeds of sale realized in pursuance of the above, shall be first utilized 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 paidto Unitholders in proportion to their respective interest in the assets of the Scheme, as on the date the decision for windingup was taken.On completion of the winding up, the Trustee shall forward to SEBI and the Unitholders a report on the winding up,detailing the circumstances leading to the winding up, the steps taken for disposal of the assets of the Scheme beforewinding up, net assets available for distribution to the Unitholders and a certificate from the auditors of the Fund.Notwithstanding anything contained herein 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 FundThe following information is provided only for general information purpose. In view of the individual nature of tax benefitseach 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. Please note that, when the child is minor, the provisions of Section 64(1A) of the IncomeTax Act, 1961 will be applicable in respect of clubbing of income.Based on the law in force and after considering the amendments made in the Income Tax Act, 1961 (“the Act”) by theFinance Act, 2005, the Scheme’s auditors, N. M. Raiji and Co. have confirmed that the following benefits may accrue to therespective assesses:

1. TO THE FUNDThe Income of the Fund registered under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulationsmade there under 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.As per section 115R, the Mutual Funds are liable to pay additional income tax on the income distributed by it.

Under the provisions of section 115R of the Act, additional income tax is payable at different rates on income distributedto different class of unitholders. The Mutual Funds will be liable to pay additional income tax at the rate of 12.50% plusapplicable surcharge on the income distributed by the Fund to Individuals and HUFs and at the rate of 20% plus applicablesurcharge on the income distributed to any other assessees. Levy of education cess at the rate of 2% is also applicable ontotal tax payable. However, in respect of open-ended equity oriented funds, no additional income tax is payable on incomedistributed by the Fund.

2. SECURITIES TRANSACTION TAX

Securities Transaction Tax (“STT”) is applicable on transactions of purchase or sale of units of Equity Oriented Fund enteredinto on a recognized stock exchange or sale of units of Equity Oriented Fund to the Mutual Fund.

The Finance Act, 2005 has revised the rates for levy of STT under Chapter VII of the Finance (No. 2) Act 2004 with effect fromJune 01, 2005.

The STT rates as applicable from June 1, 2005 are given in the following table:

Taxable Securities Transaction Rate Payable by

Purchase of a unit of an equity oriented fund, where -

� the transaction of such purchase is entered into in a recognised stock exchange; and 0.1% Purchaser� the contract for the purchase of such unit is settled by the actual

delivery or transfer of such unit.

Sale of a unit of an equity oriented fund, where -

� the transaction of such sale is entered into in a recognised stock exchange; and� the contract for the sale of such unit is settled by the actual delivery or

transfer of such unit. 0.1% Seller

Sale of a unit of an equity oriented fund, where -

� the transaction of such sale is entered into in a recognised stock exchange; and� the contract for the sale of such unit is settled otherwise than by the actual delivery 0.02% Seller

or transfer of such unit.

Sale of unit of an equity oriented fund to the Mutual Fund itself. 0.2% Seller

Mutual Fund is responsible for collecting the STT from every person who sells the unit to it at the rate of 0.2%.

The term “Equity Oriented Fund” for the purpose of STT, has been defined to mean a fund where the investible funds areinvested by way of equity shares in domestic companies to the extent of more than 50% of the total proceeds of such fundand which has been set up under a scheme of a Mutual Fund. Further, it is provided that the percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening andclosing figures.


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3. TO THE UNITHOLDERS

3.1 INCOME RECEIVED FROM MUTUAL FUNDAccording to section 10(35) of the Act, any income received in respect of units of Mutual Fund specified under section10(23D) will be exempt from income tax in the hands of the unit holders. Further, it has been clarified that incomearising from transfer of units of Mutual Fund shall not be exempt under section 10(35).

3.2 LONG TERM CAPITAL GAINS ON TRANSFER OF UNITSUnder Section 10(38), Long Term Capital Gain on sale of units of Equity Oriented Funds are exempt from Income Taxin the hands of unit holders, provided such transactions are entered into a recognised stock exchange or such units aresold to the Mutual Fund and are chargeable to STT.In respect of capital gains that are not exempted under section 10(38), the provisions for taxation of long-term capitalgains for different categories of assessees are explained hereunder:i) For Individuals and HUFs

Long-term Capital Gains in respect of Units of Mutual Fund held for a period of more than 12 months will bechargeable under section 112 of the Act, at a rate of 20% plus surcharge, as applicable and cess. Capital Gainswould be computed after taking into account cost of acquisition as adjusted by Cost Inflation Index notified bythe Central Government and expenditure incurred wholly and exclusively in connection with such transfer. In thecase where taxable income as reduced by long term capital gains is below the exemption limit, the long termcapital gains will be reduced to the extent of the shortfall and only the balance long term capital gains will becharged at the flat rate of 20% plus surcharge, as may be applicable and cess.

It is further provided that an assessee will have an option to apply concessional rate of 10% plus applicablesurcharge and cess, provided the long term capital gains are computed without substituting indexed cost in placeof cost of acquisition.

ii) For Partnership Firms, Non-Residents, Indian Companies/Foreign CompaniesLong-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 and cess. Capital gains would becomputed after taking into account cost of acquisition as adjusted by Cost Inflation Index notified by the CentralGovernment and expenditure incurred wholly and exclusively in connection with such transfer.It is further provided that an assessee will have an option to apply concessional rate of 10% plus applicablesurcharge and cess, provided the long term capital gains are computed without substituting indexed cost in placeof cost of acquisition.

iii) For Non-resident IndiansUnder 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 and cess. 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 and Foreign Institutional Investors fulfilling conditions laid downunder section 115AB (Offshore Fund)Under section 115AB of the Act, income by way of long-term capital gains in respect of units purchased in foreigncurrency held for a period of more than 12 months will be chargeable to tax at the rate of 10%, plus applicablesurcharge and cess. Such gains would be calculated without indexation of cost of acquisition.

3.3 SHORT TERM CAPITAL GAINS ON TRANSFER OF UNITS

Section 111A provides that short-term capital gains arising on sale of units of Equity Oriented Funds are chargeable toincome tax at a concessional rate of 10% plus applicable surcharge and cess, provided such transactions are enteredinto on a recognised stock exchange or such units are sold to the Mutual Funds and are chargeable to STT. Further,Section 48 provides that no deduction shall be allowed in respect of STT paid for the purpose of computing CapitalGains.In respect of capital gains not chargeable under section 111A, the provisions for taxation of short-term capital gainsfor different categories of assessees is explained hereunder:Short term Capital Gains in respect of Units held for a period of not more than 12 months is added to the total income.Total income including short-term capital gains is chargeable to tax as per the relevant slab rates.

Income Tax Rates

The maximum income tax rates for various categories of assessees for AY 2006-07 are as under:

Resident individuals and HUF 30% plus surcharge and cessPartnership Firms 30% plus surcharge and cessIndian companies 30% plus surcharge and cessNon Resident Indians 30% plus surcharge and cessForeign Companies 40% plus surcharge and cess

With regards to individuals and HUF having a total income exceeding Rs. 10,00,000, Partnership Firms and IndianCompanies, a surcharge of 10% on the income tax is applicable. Individuals and HUFs having total income less than Rs.

72


10,00,000 are not liable to surcharge. A surcharge of 2.5% on the income tax would be applicable in the case ofForeign Companies.

Further, education cess at the rate of 2% on the income tax (including applicable surcharge) would be applicable for allcategories of assessees.

3.4 CAPITAL LOSSESLosses under the head “Capital Gains” cannot be set off against income under any other head. Further within the head“Capital Gains”, losses arising from the transfer of long-term capital assets cannot be adjusted against gains arisingfrom the transfer of a short-term capital asset. However, losses arising from the transfer of short-term capital assets canbe adjusted against gains arising from the transfer of either a long-term or a short-term capital asset.Under Section 10(38), Long Term Capital Gains on sale of units of Equity Oriented Fund are exempt from Income Taxprovided certain conditions are fulfilled. Hence, losses arising from such type of transaction of sale of units of EquityOriented Fund would not be eligible for set-off against taxable capital gains.Unabsorbed long-term capital loss (other than that relating to sale of equity shares and units of Equity Oriented Fundas stated in para above) can be carried forward and set off against the long-term capital gains arising in any of thesubsequent eight assessment years.Unabsorbed short-term capital loss can be carried forward and set off against the income under the head Capital Gainsin any of the subsequent eight assessment years.According to section 94(7) of the Act, if any person buys or acquires units within a period of three months prior to therecord date fixed for declaration of dividend or distribution of income and sells or transfers the same within a periodof nine months from such record date, then losses arising from such sale to the extent of income received or receivableon such units, which are exempt under the Act, will be ignored for the purpose of computing his income chargeableto tax.Further, Sub-section (8) of Section 94 provides that, where additional units have been issued to any person without anypayment, on the basis of existing units held by such person then the loss on sale of original units shall be ignored forthe purpose of computing income chargeable to tax, if the original units were acquired within three months prior tothe record date fixed for receipt of additional units and sold within nine months from such record date. However, theloss so ignored shall be considered as cost of acquisition of such additional units held on the date of sale by suchperson.

3.5 Section 80C as introduced by the Finance Act, 2005, provides that from the total income of an individual and HUF,deduction for an amount paid or deposited in certain eligible schemes or investments would be available, subject toa maximum amount of Rs. 1,00,000.According to clause (xiii) and clause (xx) to sub-section 2, any subscription to any units of Mutual Fund notified underSection 10(23D) would qualify for deduction under the aforesaid section provided� the plan formulated in accordance with a scheme notified by the Central Government; or� approved by CBDT on an application made by the Mutual Fund and the amount of subscription to such units is

subscribed only in eligible issue of capital of any company.

4. TAX DEDUCTION AT SOURCE

4.1 For Income in respect of units:

No tax shall be deducted at source in respect of any income credited or paid in respect of units of the Fund as per theprovisions of section 10(35), section 194K and section 196A.

4.2 For 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 (under section194K) vide circular no. 715 dated August 8, 1995 issued by the Central Board for Direct Taxes (CBDT).

(ii) In respect of Non- Resident Unit holders:Under section 195 and section 196B of the Act, tax shall be deducted at source in respect of capital gains as under:a. In case of non resident other than a company -

� Long term capital gains1 20% plus surcharge and cess� Short term capital gains 30% plus surcharge and cess

b. In case of foreign company -� Long term capital gains1 20% plus surcharge and cess� Short term capital gains 40% plus surcharge and cess

c. In case of Offshore Fund as defined in 115AB –� Long term capital gains1 10% plus surcharge and cess

1 Except for gains arising from sale of unit of Equity Oriented Funds, which are exempt under section 10(38) of theAct.

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.


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5. EXEMPTION FROM TAX ON CAPITAL GAINS ARISING ON TRANSFER OF UNITS HELD FOR MORE THAN 12 MONTHSUnder section 54EC of the ActAs provided under section 54EC, and subject to the conditions specified therein, where an assessee has made capital gainsfrom the transfer 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 long term specifiedassets i.e., in bonds redeemable after 3 years issued by the National Bank for Agriculture and Rural Development, or by theNational Highways Authority of India or by the Rural Electrification Corporation Limited or by National Housing Bank or bythe Small Industries Development Bank of India, such capital gains shall be exempted from tax on capital gains undersection 54EC of the Income Tax Act, 1961. However, if the assessee has invested only a part of the capital gains, he will beeligible for the proportionate exemption.Section 54EC provides that where any investment has been allowed as a deduction under this section the same shall not beallowed as deduction in Section 80C.Under section 54ED of the ActUnder Section 54ED and subject to the conditions specified therein, capital gains arising from the transfer of units held inthe Mutual Fund Scheme for a period exceeding 12 months will be exempt, if the assessee has, any time within a period of6 months 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 the publicby a public company formed and registered in India.Section 54ED provides that where any investment has been allowed as a deduction under this section the same shall not beallowed as deduction in Section 80C.

6. INVESTMENTS BY CHARITABLE AND RELIGIOUS TRUSTSUnits of a Mutual fund Scheme referred to in clause 23D of section 10 of the Income Tax Act, 1961, constitute an eligibleavenue for investment by charitable or religious trusts per rule 17C of the Income Tax Rules, 1962, read with clause (xii) ofsub-section (5) of section 11 of the Income Tax Act, 1961.

7. WEALTH TAXUnits held under the Mutual Fund Scheme are not treated as assets within the meaning of section 2(ea) of the Wealth TaxAct, 1957 and are, therefore, not liable to Wealth-Tax.

k) Unclaimed redemption amountThe unclaimed Redemption amount may be deployed by the Mutual Fund in call money market or money market instrumentsonly and the investors who claim these amounts during a period of three years from the due date shall be paid at theprevailing Net Asset Value. After a period of three years, this amount will be transferred to a pool account and the investorscan claim the amount at NAV prevailing at the end of the third year. The income earned on such funds will be used for thepurpose of investor education. The AMC will make a continuous effort to remind the investors through letters to take theirunclaimed amounts. Further, the investment management fee charged by the AMC for managing unclaimed amounts shallnot exceed 50 basis points.Unclaimed Dividend / Redemptions in respect of the open ended funds normally represent thetime lag between funding of the respective accounts (with bank) by the AMC and the time taken for presentation ofredemption/dividend warrants by the investors. No significant delay in the process is noticed. Hence the details in respectof open-ended funds is not mentioned.Details in respect of Prudential ICICI Premier are given below -

As of March 31, 2005 As of May 31, 2005

Unclaimed Redemption Amount – Rs.5.74 crores of 26,249 Rs. 5.62 crores in respect of 25,823Premier Redeemed investors investors

Unclaimed Redemption Amount – Rs.3.42 crores of 5,212 Rs. 3.05 crores in respect of 5,086Premier Rolled Over Redeemed investors investors

Unclaimed Dividend Amount Rs. 0.03 crores Rs.0.03 crores

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SECTION VII

OTHER MATTERS

a) UNITHOLDER GRIEVANCES REDRESSAL MECHANISM

Investor grievances are normally received at AMC office or at the Customer Service Centres or directly by the Registrar. Allgrievances are forwarded to the Registrar for their necessary action. The complaints are closely followed up with theRegistrar to ensure timely redresses and prompt investor service. Given below is the complaint history for the last three fiscalyears:

ICICI Premier ICICI Power #

01/04/2002 to 31/03/2003Complaints/ Requests received during the period 700 Not applicableRedressed during the period 699 Not applicablePending as on March 31, 2003 5 Not applicable



01/04/2005 to 31/05/2005Complaints/ Requests received during the period 73 Not applicableRedressed during the period 75 Not applicablePending as on May 31, 2005 4 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. September27, 2001. Consequent to conversion its name is changed to Prudential ICICI Power. Further, ICICI Premier was rolled overfor a further period of 5 years in February 1999 and is open for repurchase w.e.f. February 7, 2001 and redeemed in February2005. The pending investor complaints / requests pertain to, inter-alia, Issue of duplicate certificates, non receipt ofcertificates, non receipt of redemption/dividend warrants, revalidation of dividend warrants, name correction, change ofaddress of the Unitholder, registration of death cases, registration of Power of Attorney, transfer/transmission of Units etc.All investor grievances are normally redressed within a period of 15 days of their receipt, subject to the informationfurnished by the Unitholder is complete and accurate. If such information is not provided/not available with the Registrarsto the above Schemes, the matter is further followed up with the investors. Investor complaints are continuously monitoredwith the Registrar to the Schemes.

Data relating to the period April 2002 to May 31, 2005

Scheme Complaints Complaints ComplaintsReceived redressed pending

Prudential ICICI Growth Plan 50 50 NilPrudential ICICI Income Plan 212 212 NilPrudential ICICI Liquid Plan 4 4 NilPrudential ICICI FMCG Fund 12 12 NilPrudential ICICI Tax Plan 55 55 NilPrudential ICICI Gilt Fund 29 29 NilPrudential ICICI Balanced Fund 40 40 NilPrudential ICICI Technology Fund 84 84 NilPrudential ICICI Monthly Income Plan 41 41 NilPrudential ICICI Fixed Monthly Plan 2 2 NilPrudential ICICI Child Care Plan 18 18 NilPrudential ICICI Power 91 91 NilPrudential ICICI Short Term Plan 3 3 NilPrudential ICICI Long Term Plan 1 1 NilPrudential ICICI Index Fund 4 4 NilPrudential ICICI Sweep Plan 0 0 Nil


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Prudential ICICI Flexible Income Plan 9 9 Nil

Prudential ICICI Dynamic Plan 14 14 NilSensex Prudential ICICI Exchange Traded Fund 1 1 NilPrudential ICICI Floating Rating Plan 3 3 NilPrudential ICICI Advisory Series 3 3 NilPrudential ICICI Income Multiplier Fund 7 7 NilPrudential ICICI Long Term Floating Rate Plan 0 0 Nil

Prudential ICICI Emerging Star 3 3 NilPrudential ICICI Discovery Fund 5 5 NilPrudential ICICI Plan I Year Plus 0 0 NilTotal 691 691

The details of investor complaints received from SEBI


Financial Year 2002-2003 17 15 5Financial Year 2003-2004 30 33 2Financial Year 2004-2005 48 45 5April 1, 2005 to June 17, 2005 9 13 1

b) ASSOCIATE TRANSACTIONS

Investment in Group Companies:

Details of investments made by the schemes in securities of Sponsor i.e. ICICI Bank Ltd. (erstwhile ICICI Ltd.) during theprevious three financial years are as follows:

Scheme name/Nature of investment

F.Y. 2002 -2003 F.Y 2003-2004 F.Y 2004-2005 April 1, 2005 toMay 31, 2005

Investment in Bonds of ICICI Bank Ltd.

Prudential ICICI Income Plan 818,794,702 15,00,00,000 -

Prudential ICICI Balanced Fund - - - 2,091,262

Prudential ICICI Liquid Plan 10,891,898 10,00,00,000 -

Prudential ICICI Short Term Plan 58,913,072 - -

Prudential ICICI FMPY 25 – 15 Months Option - - - 102,877,717

Prudential ICICI FMP Yearly Series 12 - - - 206,911,171

Investment in NSE Linked Mibor Deposits /Term Deposit of ICICI Bank Ltd

Prudential ICICI Blended Plan - Plan A - - - 1,312,000,000

Prudential ICICI Blended Plan - Plan B - - - 490,000,000

Prudential ICICI Child Care plan – Gift Plan - - - 20,000,000

Prudential ICICI Liquid Plan 200,000,000 13,250,000,000 1,680,000,000.00 1,890,000,000

Prudential ICICI Monthly Income Plan - - 500,000,000.00 465,000,000

Prudential ICICI Flexible Income Plan - - 100,000,000.00 -

Prudential ICICI Short Term Plan - 1,250,000,000 - -

Prudential ICICI Income Multiplier Plan - - 80,000,000.00 100,000,000

Prudential ICICI Child Care plan – Study Plan - - - 25,000,000

Prudential ICICI Long Term Floating Rate Plan - - 140,000,000.00 -

Prudential ICICI Fixed Maturity Plan –Yearly Series 23 5,000,000,000 16,000,000 - -

Prudential ICICI Fixed Maturity Plan –Yearly Series 12 50,000,000 21,700,000 - -

Prudential ICICI Fixed Maturity Plan –Yearly Series 6 - 200,000,000 - -

Prudential ICICI Fixed Maturity Plan –NRI Series 4 – Half Yearly - 127,000,000 - -

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Investment in equity shares of ICICI Bank Ltd


Prudential ICICI Index Fund 3,491,370 4,094,680 264,135 250,912SENSEX Prudential ICICI Exchange Traded Fund 6,327,798 4,144,321 - 410,084Prudential ICICI Power - - 35,328,722 138,864,110Prudential ICICI Monthly Income Plan - - 5,884,612 23,130,950Prudential ICICI Growth Plan - - 29,443,706 115,733,160Prudential ICICI Balanced Fund - - 4,418,418Prudential ICICI Dynamic Plan - - 5,885,017 23,130,950TOTAL 6,148,418,840 15,122,939,001 2,581,224,610 4,915,400,316

% to the net assets of the Mutual Fund 6.77% 10.55% 1.69% 2.85%

The above details are as of 31st of the month for each period

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)]

ICICI Securities Ltd. F.Y 2002-2003 F.Y 2003-2004 F.Y. 2004-2005(erstwhile ICICI Securities and Finance Co. Ltd.)

Prudential ICICI Power Nil *41,080,800 240,827,754Prudential ICICI Income Plan 200,000,000 Nil NilPrudential ICICI Liquid Plan Nil Nil 750,000,000Prudential ICICI Growth Plan Nil *47,483,650 161,791,526Prudential ICICI Tax Plan Nil *2,187,500 10,312,874Prudential ICICI Child Care Plan – Gift Plan Nil Nil 28,922,878Prudential ICICI Child Care Plan – Study Plan Nil Nil 5,704,228Prudential ICICI Monthly Income Plan Nil *21,828,505 430,256,768Prudential ICICI Balanced Fund Nil *12,968,855 75,974,024Prudential ICICI Dynamic Plan Nil *11,610,665 57,794,214Prudential ICICI Technology Fund Nil Nil 6,613,818Prudential ICICI Income Multiplier Fund Nil 3,932,175 126,604,402Prudential ICICI Discovery Fund Nil Nil 35,137,272Prudential ICICI Flexible Income Plan Nil Nil 250,000,000Prudential ICICI Floating Rate Plan Nil Nil 250,000,000Prudential ICICI Short Term Plan Nil Nil 250,000,000Prudential ICICI Long Term Plan Nil Nil 150,000,000 Prudential ICICI Emerging S.T.A.R. Fund Nil Nil 22,932,282

TOTAL 200,000,000 141,092,150 2,852,872,040

During the period April 1, 2004 to May 31, 2005 no subscription was made in issues lead managed by its Associates

* Includes Prudential ICICI Mutual Fund’s subscription to the issue of Maruti Udyog Ltd. through JM Morgan StanleySecurities Pvt. Ltd. This declaration has been made as a matter of disclosure to the investors.

Subscription in issues lead managed by ICICI Bank Limited(Amount in Rupees)

Name of the Scheme F.Y 2002-2003

Prudential ICICI Income Plan NilPrudential ICICI Liquid Plan 1,450,000,000Prudential ICICI Short Term Plan 603,220,568Prudential ICICI Monthly Income Plan 445,762,855Prudential ICICI Flexible Income Plan 300,000,000

Financial year 2003-2004 onwards no subscription was made in issues lead managed ICICI Bank Limited

The above investments were considered sound. Before making an investment, AMC evaluated the same on merits and on arms’length basis and in accordance with the objectives of the scheme.


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Transactions with Associate Companies:

(Amount in Rupees)


ICICI Bank Limited – Bank Charges

Prudential ICICI Monthly Income Plan 825,665 945,772 1,322,413.33 52,930Prudential ICICI Balanced Fund 825,500 935,260 815,320.88 133,260Prudential ICICI FMCG Fund 427,000 63,040 125,546.25 14,596Prudential ICICI Gilt Fund – Investment 889,297 811,421 563,502.79 23,989Prudential ICICI Gilt Fund – Treasury 825,762 185,029 343,961.51 5,894Prudential ICICI Growth Plan 827,049 958,392 796,978.96 110,325Prudential ICICI Income Plan 1,326,708 1,133,115 1,025,720.67Prudential ICICI Liquid Plan 889,394 688,562 1,797,358.07 565,760Prudential ICICI Power 15 958,588 1,136,605.09 218,714Prudential ICICI Tax Plan 1501 470,030 218,904.50 19,148Prudential ICICI Technology Fund 831,405 145,052 757,591.16 157,280Prudential ICICI Child Care Plan-Gift Plan 350 56,396 189,274.57 18,096Prudential ICICI Child Care Plan-Study Plan 730 15,689 54,234.48 14,298Prudential ICICI Short Term Plan 825,715 1,012,692 601,179.91 55,271Prudential ICICI Long Term Plan Nil 68,619 63,709.85Prudential ICICI Flexible Income Plan 398,750 933,012 664,748.93 76,694Prudential ICICI Dynamic Plan 112 770,817 596,182.19 113,403Prudential ICICI Floating Rating Plan Nil 333,309 778,929.20 223,623Prudential ICICI Gilt Fund – Investment - PF Option Nil 200 355,160.83 11,966Prudential ICICI Gilt Fund – Treasury - PF Option Nil Nil 351,541.67 10,725Prudential ICICI Income Multiplier Fund Nil Nil 391,109.02 59,225Prudential ICICI Income Dividend Plan Nil Nil Nil 80,767Prudential ICICI Discovery Fund Nil Nil 420,883.85 61,741Prudential ICICI Fixed Maturity –Quarterly Plan-Series 24 Nil Nil 14.00Prudential ICICI Long Term Floating Plan Nil Nil 52,070.35 12,064Prudential ICICI Emerging S.T.A.R. Fund Nil Nil 276,590.68 65,410Prudential ICICI Agressive Plan Nil Nil 15,367.90 NilPrudential ICICI Cautious Plan Nil Nil 30,164.02 NilPrudential ICICI Moderate Plan Nil Nil 44,826.81 NilPrudential ICICI Very Aggressive Plan Nil Nil 11,955.03 NilPrudential ICICI very Cautious Plan Nil Nil 20,906.92 NilICICI Premier Nil 38,341 Nil NilPrudential ICICI Index Fund Nil 73 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 2 50 Nil Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 1 Nil 82 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 3 661 Nil Nil NilPrudential ICICI Sweep Plan Nil 1,174 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 23 Nil 46 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 12 Nil Nil 23,902.59 25,353Prudential ICICI Fixed Maturity Plan – Yearly Series 24 Nil Nil 23,902.59 25,353Prudential ICICI Plan I Nil Nil 3,449.00 NilPrudential ICICI Fixed Maturity Plan –Quarterly Series 25 Nil Nil Nil 4,357

ICICI Bank Limited – Brokerage

Prudential ICICI Growth Plan 1287401 4,921,497 2,222,891.29 191,334Prudential ICICI FMCG Fund 36,865 342,403 67,475.31 30,886Prudential ICICI blended Plan – Plan A 32,003 8,962Prudential ICICI Balanced Fund 371,333 1,228,809 2,104,082.04 102,592Prudential ICICI Tax Plan 182,185 317,554 692,570.09 443,361Prudential ICICI Technology Fund 688,780 1,141,174 749,131.93 112,535Prudential ICICI Power 82,382 19,893,911 13,886,378.13 1,526,948Prudential ICICI Child Care Plan-Study Plan 240,792 331,695 365,272.39 56,674Prudential ICICI Child Care Plan-Gift Plan 368,251 440,987 740,634.98 168,776Prudential ICICI Dynamic Plan 1,402,785 3,995,832 2,647,414.31 820,106Prudential ICICI Discovery Fund Nil Nil 4,288,947.01 998,483

78


(Amount in Rupees)


Prudential ICICI Emerging S.T.A.R. (Stock TargetedAt Returns) Fund Nil Nil 10659160 1,358,917Prudential ICICI Income Plan 18,404,188 19,652,833 4,341,734 265,884Prudential ICICI Monthly Income Plan 2,178,352 3,794,594 3,974,498 273,031Prudential ICICI Income Multiplier Fund Nil 346,122 575,892 83,237Prudential ICICI Liquid Plan 13,452,007 14,253,329 5,385,319 2,352,623Prudential ICICI Short Term Plan 15,237,064 8,976,641 825,812 170,792Prudential ICICI Flexible Income Plan 2,512,861 6,755,437 2,125,857.63 67,896Prudential ICICI Long Term Plan 137 636 589 104,195Prudential ICICI Gilt Fund – Treasury 147,943 67,126 151,169 43,557Prudential ICICI Gilt Fund Treasury – PF Option Nil 157,604 209,973 20,110Prudential ICICI Gilt Fund – Investment 4,448,085 5,051,182 3,127,133 420,947Prudential ICICI Gilt Fund Investment Plan – PF Option Nil 1,893,378 623,790 97,190Prudential ICICI Liquid Plan – Institutional Option Nil Nil 10,862,559 NilPrudential ICICI Short Term Plan – Institutional Option Nil Nil 880,662 NilPrudential ICICI Income Plan – Institutional Option Nil Nil 110,819 NilPrudential ICICI Floating Rate Plan 995 349,724 4,664,522 1,051,456Prudential ICICI Long Term Floating Rate Plan Nil Nil 1,073,757 NilPrudential ICICI Fixed Maturity Plan – Series 24 –Quarterly Nil 4,781 65,716 NilPrudential ICICI Fixed Maturity Plan – Series 25 –15 Months Plan Nil Nil 54,933 NilPrudential ICICI Fixed Maturity Plan – Series 25 –Quarterly Plan Nil Nil 13,497 10,657Prudential ICICI Fixed Maturity Plan – Series 25 –Yearly Plan Nil Nil 21,300 NilPrudential ICICI Fixed Maturity Plan – Series 26 –Quarterly Plan Nil Nil 50,035 13,585Prudential ICICI Fixed Maturity Plan Yearly series 5 156,198 46,342 93,300 NilPrudential ICICI Fixed Maturity Plan Yearly series 6 378,438 Nil 21,506 8,682Prudential ICICI Fixed Maturity Plan Yearly series 6 –Institutional Option Nil Nil 12,610 NilPrudential ICICI Fixed Maturity Plan Yearly series 12 Nil Nil 468,993 NilPrudential ICICI Fixed Maturity Plan Yearly series 12 –Institutional Option Nil Nil 100,771 NilPrudential ICICI Very Cautious Plan Nil 285,110 239,660 25,955Prudential ICICI Cautious Plan Nil 345,285 637,190 16,616Prudential ICICI Moderate Plan Nil 1,189,032 150,881 8,623Prudential ICICI Agressive Plan Nil 1,283,833 191,735 7,321Prudential ICICI Very Aggressive Plan Nil 1,741,893 91,386 5,625Prudential ICICI Fixed Maturity Plan Half-Yearly series 1 39,558 809 Nil NilPrudential ICICI Fixed Maturity Plan Half-Yearly series 2 977 305 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 1 11,929 1,944 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 2 11,668 6,709 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 3 4676 270 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 2 8,611 809 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 3 98,754 145,555 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 4 88 66 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 7 600 Nil Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 1 109,263 1,262 24,300 NilPrudential ICICI Index Fund 29,945 33,828 Nil NilPrudential ICICI Fixed Maturity Plan – Deposit Plus NRISeries 4 – Quarterly Plan Nil 107,638 Nil NilPrudential ICICI Fixed Maturity Plan – Deposit Plus NRISeries 6 – Quarterly Plan Nil 46,897 Nil NilPrudential ICICI Fixed Maturity Plan – Deposit Plus NRISeries 8 – Quarterly Plan Nil 123,529 Nil NilPrudential ICICI Sweep Plan Nil 831,586 Nil NilPrudential ICICI Fixed Maturity Plan – Series 24 – Yearly Nil 26,250 Nil Nil


79

(Amount in Rupees)


ICICI Infotech Services Limited – Service Charges

ICICI Premier 1,597,609 1,030,481 Nil NilPrudential ICICI Balanced Fund Nil 202,835 94,838.66 NilPrudential ICICI Discovery Fund 2,270.82 NilPrudential ICICI Dynamic Plan Nil 426,905 202,725.69 NilPrudential ICICI Flexible Income Plan Nil 483,577 132,305.83 NilPrudential ICICI Floating Rate Plan Nil 8,765 113,464.72 NilPrudential ICICI FMCG Fund Nil 73,357 36,543.47 NilPrudential ICICI Child Care Plan – Gift Option Nil 67,493 100,344.93 NilPrudential ICICI Gilt fund – Investment Option Nil 112,830 50,661.05 NilPrudential ICICI Gilt Fund Investment Plan – PF Option Nil 12,916 9,356.83 NilPrudential ICICI Gilt Fund – Investment Plan -TreasuryOption Nil 11,584 11,885.67 NilPrudential ICICI Gilt Fund – Treasury Option–PF Option Nil 11,584 5,862.14 NilPrudential ICICI Growth Plan Nil 490,222 267,988.55 NilPrudential ICICI Income Multiplier Fund Nil Nil 162,342.54 NilPrudential ICICI Income Plan Nil Nil 947,307.36 NilPrudential ICICI Liquid Plan Nil 683,225 608,337.90 NilPrudential ICICI Long Term Plan Nil 523 2,746.06 NilPrudential ICICI Monthly Income Plan Nil 630,504 596,595.37 NilPrudential ICICI Power Nil 1,182,127 804,016.71 NilICICI Premier Redeemed 671,043 376,805 25,922.52 NilPrudential ICICI Short Term Plan Nil 233,911 74,132.94 NilPrudential ICICI Child Care Plan – Study Plan Nil 60,391 39,095.52 NilPrudential ICICI Tax Plan Nil 231,565 271,738.07 NilPrudential ICICI Technology Fund Nil 519,188 255,000.52 NilPrudential ICICI Fixed Maturity Plan – Half Yearly Nil 190 Nil NilPrudential ICICI Fixed Maturity Plan – Half Yearly 2 Nil 552 Nil NilPrudential ICICI Fixed Maturity Plan – Quarterly Nil 1,216 Nil NilPrudential ICICI Fixed Maturity Plan –Quarterly Series 2 Nil 281 Nil NilPrudential ICICI Fixed Maturity Plan –Quarterly Series 3 Nil 467 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 3 Nil 699 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 4 Nil 109 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 6 Nil 437 Nil NilPrudential ICICI Fixed Maturity Plan – Yearly Series 7 Nil 12 Nil NilPrudential ICICI Income Plan Nil 1,809,367 Nil NilPrudential ICICI Fixed Maturity Plan – Deposit PlusNRI Series 6 – Quarterly Plan Nil 110 Nil NilPrudential ICICI Flexible Income Plus Plan Nil 56 Nil NilPrudential ICICI Fixed Maturity Plan-Quarterly Series 24 Ni l Nil 618.83 NilPrudential ICICI Fixed Maturity Plan – Yearly Series 1 Nil 247 112.35 NilPrudential ICICI Fixed Maturity Plan – Yearly Series 12 Nil 3,946 151.86 NilPrudential ICICI Fixed Maturity Plan – Yearly Series 2 Nil 972 32.98 NilPrudential ICICI Fixed Maturity Plan-Yearly Series 24 Nil Nil 259.89 NilPrudential ICICI Fixed Maturity Plan – Yearly Series 5 Nil 2,199 48.60 NilPrudential ICICI Agressive Plan Ni l Nil 33,223.68 NilPrudential ICICI Cautious Plan 34,199.76 NilPrudential ICICI Moderate Plan Ni l Nil 34,421.13 NilPrudential ICICI Very Aggressive Plan Ni l Nil 187,383.70 NilPrudential ICICI Very Cautious Plan Ni l Nil 12,328.63 Nil

ICICI Capital Services Limited – Brokerage

Prudential ICICI Power 297 Nil Nil NilPrudential ICICI Income Plan 54,912 Nil Nil NilPrudential ICICI Liquid Plan Nil Nil Nil NilPrudential ICICI Growth Plan 89,950 Nil Nil NilPrudential ICICI FMCG Fund 508 Nil Nil NilPrudential ICICI Tax Plan 774 Nil Nil Nil

80


(Amount in Rupees)


Prudential ICICI Balanced Fund 1,281 Nil Nil NilPrudential ICICI Technology Fund 8,648 Nil Nil NilPrudential ICICI Monthly Income Plan 2,849 Nil Nil NilPrudential ICICI Child Care Plan – Gift Plan 1,656 Nil Nil NilPrudential ICICI Child Care Plan – Study Plan 2,176 Nil Nil Nil

ICICI Brokerage Service Limited – brokerage onsecondary market transactions

Prudential ICICI Balanced Plan 666,606 133,467 762,989 105,462Prudential ICICI Dynamic Plan 148,729 933,145 555,997 291,777Prudential ICICI FMCG Fund 181,297 90,180 74,022 NilPrudential ICICI Child Care Plan – Gift Plan 4736 42,294 163,412 13,305Prudential ICICI Growth Plan 958,939 800,418 725,906 304,404Prudential ICICI Income Multiplier Plan Nil Nil 46,684 7,705Prudential ICICI Monthly Income Plan 185,121 894,866 738,221 NilPrudential ICICI Power 188,388 1,199,499 1,282,221 334,506Prudential ICICI Child Care Plan – Study Plan 7,329 4,200 1,917 NilPrudential ICICI Technology Plan 70,270 131,250 387,399 NilPrudential ICICI Tax Plan 131,833 64,383 36,354 39,891Prudential ICICI Discovery Fund Nil Nil 678,319 501,112Prudential ICICI Emerging S.T.A.R. Nil Nil 304,02939,288Prudential ICICI Blended Plan A Nil Nil Nil 70,883

ICICI Securities Ltd. (erstwhile ICICI Securitiesand Finance Co. Ltd.)

Prudential ICICI Growth Plan 85,833 409 15 NilPrudential ICICI FMCG Fund 350,693 3,690 566 100Prudential ICICI Balanced Fund 1,047,772 80,076 72,177 55Prudential ICICI Tax Plan 38 48 25 5Prudential ICICI Technology Fund 10,196 13,811 23,338 4,613Prudential ICICI Power 386,599 Nil Nil NilPrudential ICICI Child Care Plan – Gift Plan Nil Nil 349 15Prudential ICICI Dynamic Plan Nil Nil 4 1Prudential ICICI Income Plan 5,013,417 489,647 378,844 3.24Prudential ICICI Monthly Income Plan 433 1,610 1,254 39Prudential ICICI Liquid Plan 61,087 14,792 30,197 30,614Prudential ICICI Gilt Fund – Investment 488,396 89,250 37,663 2234Prudential ICICI Short Term Plan 556,652 Nil Nil NilPrudential ICICI Flexible Income Plan 113,550 Nil Nil NilPrudential ICICI Gilt Fund Investment Plan– PF Nil 54,000 7,572 5,002Prudential ICICI Gilt Fund – Treasury 915,425 Nil Nil NilPrudential ICICI Liquid Plan – Institutional Option Nil Nil 98,801 NilPrudential ICICI Floating Rate Plan Nil Nil 21,583 19,530Prudential ICICI Fixed Maturity Plan – Series 25 –Quarterly Option Nil Nil 6,205 NilPrudential ICICI Fixed Maturity Plan Quarterly series 1 Nil Nil Nil Nil

ICICI Web Trade Ltd. Brokerage

Prudential ICICI Growth Plan 65,558 164,231 167,620 NilPrudential ICICI FMCG Fund 17,816 71,497 65,161 NilPrudential ICICI Balanced Fund 19,825 123,010 103,015 NilPrudential ICICI Tax Plan 18,649 54,802 205,137 NilPrudential ICICI Technology Plan 96,558 280,824 167,897 NilPrudential ICICI Power 34,638 389,141 199,823 NilPrudential ICICI Dynamic Plan 116,879 222,863 101292 NilPrudential ICICI Discovery Plan Nil Nil 393,245 NilPrudential ICICI Emerging S.T.A.R. Nil Nil 519,226 NilPrudential ICICI Income Plan 100,224 133,875 29,367 NilPrudential ICICI Monthly Income Plan 14,535 54,933 32,105 Nil


81

(Amount in Rupees)


Prudential ICICI Income Multiplier Fund Nil 9,905 13,158 NilPrudential ICICI Liquid Plan 30,358 54,016 99,228 NilPrudential ICICI Short Term Plan 6,981 12,152 12,816 NilPrudential ICICI Flexible Income Plan 7,878 19,992 12,243 NilPrudential ICICI Gilt Treasury 2,522 4,109 4004 NilPrudential ICICI Gilt Investment 19,178 24,084 7715 NilPrudential ICICI Liquid Plan – Institutional Option Nil Nil 40,105 NilPrudential ICICI Floating Rate Plan Nil Nil 27,972 NilPrudential ICICI Very Cautious Plan Nil 374 1,513 NilPrudential ICICI Cautious Plan Nil 3,126 6,944 NilPrudential ICICI Moderate Plan Nil 48,414 16,814 NilPrudential ICICI Agressive Plan Nil 107,480 31,686 NilPrudential ICICI Very Aggressive Plan Nil 153,655 69,192 Nil

Way2Wealth Securities Pvt. Ltd. - BrokeragePrudential ICICI Growth Plan 296,840 183,048 165,070.66 16,735Prudential ICICI FMCG Fund 1,168 4,412 7,165.93 2,557Prudential ICICI Blended Plan – Plan A Nil Nil Nil 94Prudential ICICI Blended Plan – Plan B Nil Nil Nil 3Prudential ICICI Balanced Fund 21,361 53,462 157,922.82 11,856Prudential ICICI Tax Plan 19,215 31,402 57,441.66 37,629Prudential ICICI Technology Plan 310,26 73,652 140,888.74 10,323Prudential ICICI Power 13,190 1,653,262 639,208.35 35,653Prudential ICICI Child Care Plan – Study Plan 38,778 31,800 34,364 4,395Prudential ICICI Child Care Plan – Gift Plan 46,186 33,307 45,117.25 13,577Prudential ICICI Dynamic Plan 39,621 186,391 235,528.31 54,923Prudential ICICI Discovery Plan Nil Nil 648.988.55 114,214Prudential ICICI Emerging Star Nil Nil 435,476.06 22,358Prudential ICICI Income Plan 2,179,850 1,115,698 316,944.95 27,735Prudential ICICI Monthly Income Plan 870,075 433,742 272,730.29 21,296Prudential ICICI Income Multiplier Fund Nil 142,919 62,779.49 14,173Prudential ICICI Liquid Plan 334,862 256,382 123,567.98 10,135Prudential ICICI Short Term Plan 931,228 14,21,883 102,356.72 14,447Prudential ICICI Flexible Income Plan 38,849 930,438 109,029.52 1,316Prudential ICICI Gilt Treasury 7730 8,058 5030.14 814Prudential ICICI Gilt Fund Treasury Plan – PF Option Nil 7,075 38.86 2,377Prudential ICICI Gilt Investment 273,439 449,987 400,147.41 58,027Prudential ICICI Gilt Investment – PF Nil Nil 4,670.32 681Prudential ICICI Liquid Plan – Institutional Option Nil Nil 33,188.02 658Prudential ICICI Short Term Plan – Institutional Option Nil Nil 31,585.07 NilPrudential ICICI Floating Rate Plan Nil 64,734 224,269.33 5,314Prudential ICICI Long Term Floating Rate Plan Nil Nil 9,650 529Prudential ICICI Fixed Maturity Plan – Series 24 –Quarterly Plan Nil Nil 125.12 NilPrudential ICICI Fixed Maturity Plan – Yearly Series 12 Nil Nil 2515.82 NilPrudential ICICI Very Cautious Plan Nil 39,866 19,731.76 175Prudential ICICI Cautious Plan Nil 44,693 90,796.75 1,828Prudential ICICI Moderate Plan Nil 129,366 29,562.67 1,733Prudential ICICI Agressive Plan Nil 68,075 16,786.39 888Prudential ICICI Very Agressive Plan Nil 18,578 5,875.57 330Prudential ICICI Fixed Maturity Plan – Yearly series 6 Nil Nil 400.00 NilPrudential ICICI Fixed Maturity Plan – Quarterly I (14,409) 1,611 Nil NilPrudential ICICI Fixed Maturity Plan – Quarterly II 51 21 Nil NilPrudential ICICI Fixed Maturity Plan – Quarterly III 29 Nil Nil NilPrudential ICICI Index Fund 9,167 1,161 Nil Nil

The percentage of brokerage paid to ICICI Brokerage Services Limited (IBSL) was @0.26% and for ICICI Web Trade Ltd. @0.15%of transaction value and the same was in line with the norms relating to brokerage payments for secondary market transactionsof the Fund. The total business given to IBSL amounted to Rs.14.098 lakhs, Rs.12,927.72 lakhs, Rs. 15,603.41 lakhs and Rs.31,943 lakhs during the year 2002-2003, 2003-2004 and 2004-2005 respectively. From the period April 1, 2005 to May 31,2005 the total business given to IBSL amounted to Rs.10072 lakhs. Further, IBSL was paid a sum of Rs. 307,712 in connectionwith the rollover of ICICI Premier scheme towards service charges, in the year 1998-99.

82


During the period from April 1, 2000 to May 31, 2005, total business given to ICICI Web Trade Ltd. and ICICI Securities Limitedamounted 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, subsidiariesof its Sponsors/ associate companies of AMC. Such entities as on the date of this document include ICICI Bank, a scheduledcommercial bank, ICICI Infotech Services Limited, a registrar and transfer agent; ICICI Brokerage Services Limited, a brokeragehouse, ICICI Venture Funds Management Company Limited, a venture funds management company, ICICI Securities and FinanceCompany Limited (I Sec), an investment bank, ICICI Prudential Life Insurance Company Limited carrying out insurance business,ICICI Web Trade Limited an online brokerage firm and Way2Wealth Securities Private Limited. The AMC may utilize the servicesof these group companies and any other subsidiary or associate company of the Sponsors/AMC established or to be establishedat a later date in case such an associate company is in a position to provide the requisite services to the AMC. The AMC willconduct its business with the aforesaid companies on commercial terms and on an arm’s length basis and at the then prevailingmarket rates to the extent permitted under the applicable laws including the Regulations, after an evaluation of thecompetitiveness of the pricing offered by the associate companies and the services to be provided by them.

Associate transactions, if any carried out, will be as per the Regulations and the limits prescribed there under. 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; or2. any security issued by way of private placement by an associate or group company of the Sponsor; or3. 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 the groupcompanies of the sponsor, evaluate such investments, the criteria for the evaluation being the same as is applied to other similarinvestments to be made under the Scheme. Investments under the Scheme in the securities of the group companies will besubject to the limits under the Regulations.

C) Details of investments in companies that hold more than 5% of NAV of Schemes managed by the AMC, as on May31, 2005.

Amara Raja Batteries Limited

Name of Scheme Quantity Amount (Rs.) % of NAV

Equity

Prudential ICICI Tax Plan 80,341 9,231,181 1.28

Bharati Televentures Ltd.


Equity

Prudential ICICI Index Fund 1625 363,919 2.27Prudential ICICI Spice Fund 921 206,350 3.61

Grasim Industries Limited


Equity

Prudential ICICI Spice Fund 104 117,400 2.06Prudential ICICI Index Fund 79 89,136 0.55Prudential ICICI Blended Plan – Plan A 44,625 50,350,388 0.52Prudential ICICI Blended Plan – Plan B 24,150 27,248,445 0.75Debt – Debentures / BondsPrudential ICICI Income Dividend Plan 20 201,080,675 5.32Prudential ICICI Income Multiplier 100 103,621,109 7.83Prudential ICICI – MIP 20 98,973,270 1.93Prudential ICICI Liquid Plan 10 50,036,244 0.08Prudential ICICI Short Term Plan 100 103,621,109 1.12

Gokaldas Exports Ltd.

Name of Scheme Quantity Amount (Rs.) % of NAVEquityPrudential ICICI Child Care Plan – Gift Plan 639 411,931 0.09Prudential ICICI Dynamic Plan 3765 2,427,107 0.08

Prudential ICICI Income Multiplier 2002 1,290,589 0.10


83

HDFC Bank Limited


EquityPrudential ICICI Spice Fund 330 178,217 3.12Prudential ICICI Index Fund 270 145,679 0.91Debt – Debentures / BondsPrudential ICICI Liquid Plan 602 4,823,859,398 7.82Prudential ICICI Plan I 37 367,824,113 19.91Prudential ICICI FMP –Quarterly Series 26 13 136,647,258 5.90Prudential ICICI Floating Rate Plan 385 3,078,229,236 11.00Prudential ICICI Blended Plan – Plan A 27 268,412,191 2.78Prudential ICICI FMP – Yearly Series 24 11 109,353,115 14.87Prudential ICICI Long Term Floating Rate Plan 45 447,676,847 6.09

Hero Honda Limited


EquityPrudential ICICI Index Fund 173 95,652 0.60Prudential ICICI Spice Fund 142 78,526 1.37

Hindustan Zinc Limited


EquityPrudential ICICI Tax Plan 81022 12,137,096 1.68Prudential ICICI Dynamic Plan 262052 39,255,390 1.25

Hindalco Industries Limited


EquityPrudential ICICI Balanced Fund 25,000 28,228,750 1.79Prudential ICICI Blended Plan – Plan B 18,000 20,324,700 0.56Prudential ICICI Blended Plan – Plan A 169,950 191,899,043 1.99Prudential ICICI Power 97,496 110,087,608 2.03Prudential ICICI Monthly Income Plan 18,000 20,324,700 0.40Prudential ICICI Income Multiplier 5,000 5,645,750 0.43Prudential ICICI Spice Fund 99 111,910 1.96Prudential ICICI Index Fund 80 90,332 0.56Debt - Debentures / BondsPrudential ICICI Short Term Plan 65 661,877,127 7.16Prudential ICICI Balanced Fund 5 49,915,662 3.17Prudential ICICI Income Dividend P1 25 249,578,312 6.61Prudential ICICI Blended Plan – Plan A 3,500,000 361,847,850 3.75Prudential ICICI Floating Rate Plan 5 50,091,150 0.19Prudential ICICI Long Term Floating Rate Plan 10 104,053,941 1.42Prudential ICICI Child Care Plan – Study Plan 2 19,966,265 7.53Prudential ICICI Child Care Plan – Gift Plan 3 29,949,397 6.53

HCL Technologies Limited


EquityPrudential ICICI Balanced Fund 60,000 22,098,000 1.40Prudential ICICI Emerging STAR 17,563 6,468,423 0.40Prudential ICICI Discovery Fund 101,637 37,432,907 1.06Prudential ICICI Technology Fund 190,106 70,016,040 5.21Prudential ICICI Index Fund 276 101,651 0.63

84


ITC Limited


EquityPrudential ICICI Child Care Plan – Gift Plan 9518 15,221,662 3.32Prudential ICICI Dynamic Plan 78,328 125,266,054 4.00Prudential ICICI SPICE Fund 247 395,101 6.92Prudential ICICI Monthly Income Plan 15,000 23,988,750 0.47Prudential ICICI FMCG Fund 18,500 29,586,125 7.54Prudential ICICI Index Fund 217 347,037 2.16

ICICI Bank Ltd.


EquityPrudential ICICI Power 354,200 138,864,110 2.56Prudential ICICI Monthly Income Plan 59,000 23,130,950 0.45Prudential ICICI Spice Fund 1,046 410,084 7.18Prudential ICICI Index Fund 640 250,912 1.56Prudential ICICI Growth Plan 295,200 115,733,160 4.71Prudential ICICI Balanced Fund 44,300 17,367,815 1.10Prudential ICICI Dynamic Fund 59,000 23,130,950 0.74Debt - Debentures / BondsPrudential ICICI FMPY 25 – 15 Months Option 20,000 102,877,717 5.86Prudential ICICI Yearly 12 29,600 154,753,403 3.77Prudential ICICI Balanced Fund 400 2,091,262 0.13Term DepositsPrudential ICICI Liquid Plan 18,900,000 1,890,000,000 3.06Prudential ICICI Monthly Income Plan 4,650,000 465,000,000 9.05Prudential ICICI Income Multiplier Plan 1,000,000 100,000,000 7.55Prudential ICICI Child Care Plan – Study Plan 250,000 25,000,000 9.43Prudential ICICI Child Care Plan – Gift Plan 200,000 20,000,000 4.36Prudential ICICI Blended Plan – Plan B 4,900,000 490,000,000 13.41Prudential ICICI Blended Plan – Plan A 13,120,000 1,312,000,000 13.60

Motor Industries Co. Limited


Debt - Debentures / Bonds

Prudential ICICI Discovery Fund 22,344 43,312,515 2.11

Maruti Udyog Limited


EquityPrudential ICICI Index Fund 251 116,828 0.73Prudential ICICI Income Multiplier Fund 16,200 7,540,290 0.57Prudential ICICI Power 245,782 114,399,232 2.11Prudential ICICI Monthly Income Plan 36,000 16,756,200 0.33Prudential ICICI Dynamic Plan 100,000 46,545,000 1.48Prudential ICICI Spice Fund 123 57,349 1.00

Raymond India Limited


Equity

Prudential ICICI Tax Plan 76,577 26,510,957 3.67


85

Tata Motors Ltd.


Equity

Prudential ICICI Blended Plan – Plan A 122,100 52,875,405 0.55Prudential ICICI Index Fund 314 135,978 0.85Prudential ICICI Spice Fund 334 144,605 2.53DebtPrudential ICICI Liquid Plan 235 2,129,809,238 3.45

Tata Sons Limited


Debt - Debentures / Bonds

Prudential ICICI Fixed Maturity Plan – Yearly series 5 10 100,449,496 7.76

Tata Consultancy Services Limited


EquityPrudential ICICI Balanced Fund 16,006 21,356,006 1.36Prudential ICICI Index Fund 416 555,048 3.46Prudential ICICI Child Care Plan –Gift Plan 6,191 8,260,342 1.80Prudential ICICI Dynamic Plan 8,872 11,837,466 0.38Prudential ICICI Income Multiplier Fund 12,00 16,011,000 1.21Prudential ICICI Power 89,829 119,854,343 2.21Prudential ICICI Technology Fund 50,975 68,013,394 5.06Prudential ICICI Growth Plan 40,000 53,370,000 2.17

Thermax Limited


EquityPrudential ICICI Dynamic Plan 23,420 15,210,119 0.49Prudential ICICI Emerging S.T.A.R. Fund 31,854 20,687,580 1.27Prudential ICICI Power 197,446 128,231,341 2.97Prudential ICICI Child Care Plan – Gift Plan 20,000 12,989,000 2.83Prudential ICICI Discovery Fund 51,115 33,196,637 0.94Prudential ICICI Monthly Income Plan 35,745 23,214,590 0.45

Videsh Sanchar Nigam Limited


Equity

Prudential ICICI Index Fund 247 51,043 0.32

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D) PENALTIES & PENDING LITIGATIONS

I. CASES OF PENALTIES AWARDED BY SEBI UNDER THE SEBI ACT OR ANY OF ITS REGULATIONS OR ANY OTHER REGULATORYBODY AGAINST THE SPONSOR OF THE MUTUAL FUND OR ANY COMPANY ASSOCIATED WITH THE SPONSOR IN ANYCAPACITY SUCH AS THE ASSET MANAGEMENT COMPANY, TRUSTEE COMPANY/BOARD OF TRUSTEES, OR ANY OF THEDIRECTORS OR KEY PERSONNEL OF THE ASSET MANAGEMENT COMPANY AND TRUSTEE COMPANY:

ICICI Bank: Nil

Prudential Plc. & its associates:

Date Company Description of Sanction

27 January 1997 Prudential Personal PPEPL was reprimanded and fined £75,000 by IMRO for breaches ofEquity Plans Limited (PPEPL) IMRO rules relating to its PEP business:

- failed to carry out reconciliations and corrections of PEP client moneyaccounts- failed to notify IMRO that these had not been done- failed to have adequate compliance arrangements in specific areasof its business.

April 1999 M&G Financial Services Limited Following a regular Inland Revenue PEP audit, M&GFSL have reached(M&GFSL) agreement to pay the following:

- missing application forms - £550- incorrect handling of void PEPs - £3,250- accepting “paid for” as well as “free” shares during the take-on ofNorwich Union windfall shares - £600 plus repayment of any wronglyclaimed tax credits.

29 October 2001 The Prudential Assurance PAC was fined £650,000 by PIA for failures in its pensions reviewCompany Limited (PAC) procedures relating specifically to delays in making payments of redress

to supplement pension policy benefits of those who had retired andbeneficiaries of those who had died; and its record-keeping.

6 March 2003 Scottish Amicable Life plc (SAL) SAL was fined £750,000 by the FSA in respect of sales of mortgageendowments by its tied agents in 2000. Advisers did not placeappropriate emphasis on identifying whether customers wereprepared to take the risk that the endowment might not perform wellenough to pay off the mortgage.

NB: Some fines and cost orders of $1000 and below made by State Insurance Departments in the US are excluded from the above

Associates of ICICI Bank

ICICI Securities Limited (ICICI Securities)

1. ICICI Securities was awarded two penalty points by SEBI for non-submission of the Letter of Offer in the Rights issues ofSiroplast Limited and Thane Electricity Company Limited during 1995 and one penalty point for non-submission of post-issue report in the public issue for Shree Rajasthan Texchem Limited.

2. Two warning letters were issued by SEBI on October 2, 1998 in the public issue of Hindustan Motors Limited and on July 11,2000 in the public issue of Cadilla Healthcare Limited respectively.

ICICI Brokerage Services Limited (ICICI brokerage)

1. The NSE had, in its letter dated November 26, 2002 reference no NSE/INSP/ACT/2001-02/31487, reprimanded ICICIBrokerage and levied a penalty of Rs. 30,000/- subsequent to an inspection done by it. The penalty was with respect to thepurported violations of short sales (three instances on March 9, 2001 and one instance on March 12, 2001) and the transferof client shares to own account (12 instances during February-March 2001). However, ICICI Brokerage had made arepresentation to NSE requesting a waiver of the penalties, since these arose from genuine technical difficulties in theinternet trading systems of ICICI Web Trade Limited, which had been using ICICI Brokerage to execute the trades on NSE.ICICI Brokerage had therefore requested NSE for a review of the penalty and submitted all necessary documents in supportof this. NSE accepted ICICI Brokerage’s representation and waived the above penalty.

2. SEBI had issued a show cause notice to ICICI Brokerage with regard to the agency business done on behalf of one of itsclients in the shares of Global Trust Bank. ICICI Brokerage replied to the show cause notice denying the allegations andfindings of SEBI. Thereafter, SEBI granted a personal hearing on November 24, 2003. Subsequent to the hearing, SEBI videits letter dated February 5, 2004 issued a show cause notice to ICICI Brokerage as to why the penalty of suspension ofregistration of ICICI Brokerage Services Limited for a period of four months as recommended by the enquiry officer shouldnot be imposed. ICICI Brokerage had vide its letter dated February 23, 2004 submitted its reply to the said show causenotice denying all the allegations and the findings of the enquiry officer and that the charges against ICICI Brokerage statedin the show cause notice of February 5, 2004 be accordingly withdrawn. Further, ICICI Brokerage was granted a personalhearing before the Chairman, SEBI on March 18, 2004 wherein ICICI Brokerage was represented by its legal counsels. ICICIBrokerage re-iterated that it denied the allegations and findings of SEBI as stated in their show cause notice and also thatthe findings of SEBI were based merely on inferences and surmises without any proof of guilt or market manipulation partof ICICI Brokerage. A written submission of the arguments presented at the personal hearing was also forwarded to SEBI.The Chairman, SEBI vide order dated September 9, 2004 discharged ICICI Brokerage from the proceedings in the saidmatter.


87

3. As per normal practise, the BSE/NSE and SEBI from time to time conduct inspections of its member/registered brokers.Accordingly, a regular inspection was conducted by SEBI of ICICI Brokerage’s books for the period April, 2001 to March,2003. The inspection report had brought out certain irregularities such as difference of trade details in under separateaccounts maintained by us; PAN not being quoted on contract notes in some cases and non-segregation of clients and ourown funds. In this regard SEBI has vide its letter dated March 23, 2004 advised ICICI Brokerage to rectify the irregularitiesand warned it not to repeat the same in future.

4. The NSE levied a penalty of Rs. 1,22,500/- on ICICI Brokerage for delayed submission of the ‘WDM segment’ AnnualCompliance Report for 2002-2003. Whilst the fine has been debited, ICICI Brokerage has replied to the NSE stating itsfactual position and requested a reversal of the above penalty. The NSE thereafter placed the matter before its DisciplinaryAction Committee, which has reduced the penalty to Rs. 1 lakh. ICICI Brokerage has sought a review of the said penalty.Upon review, NSE vide letter dated February 15, 2005 has absolved ICICI Brokerage of the iregularity and has waived thepenalty.

ICICI venture Funds Management Company Limited (ICICI Venture)1. ICICI Equity Fund (the “Fund”), a fund managed by the ICICI Venture was originally registered with the SEBI as a Venture

Capital Fund under the SEBI (Venture Capital Funds) Regulations, 1996 (hereinafter the “Regulations”). The Fund de-registered from SEBI in the year 2002. In this process, the Fund first amended its Private Placement Memorandum (PPM) andpursued investment objectives permitted under the amended PPM before completing the de-registration formalities.During the course of its investment activity, the Fund invested in certain securities, which were in excess of the limitationsand restrictions imposed by the then prevailing Regulations. SEBI was of the view that the Fund should have completed thede-registration formalities before pursuing investments in the aforesaid securities. The Fund suo moto communicatedthese developments to SEBI and initiated a dialogue to conclude and regularize this matter. Upon consideration of thevoluntary disclosures and representations made by ICICI Venture, SEBI vide its letter dated January 9, 2003 communicatedthat the above procedural lapse had been viewed seriously and advised ICICI Venture to take due care in future and improveits compliance mechanisms and standards to avoid recurrence of such incidents.

2. SEBI, Madras had issued a show cause notice dated May 31, 2002 to ICICI Venture alleging contravention of sub-Regulation1 and sub-regulation 3 of Regulation 6 (for the year 1997) and sub-regulation 1 and sub-regulation 2 of Regulation 8 (forthe years 1998, 1999, 2000 and 2001) of the Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulation, 1997 for failure/delay in making the disclosure of its shareholding in Vimta Labs Limited. Adjudicationproceedings were held. Based on the submissions made by ICICI Venture, SEBI vide order dated November 1, 2002exonerated ICICI Venture from liability.

ICICI Investment Management Company Limited (ICICI Investment Management)

1. ICICI Investment Management is the asset management company of “ICICI Securities Fund”, a mutual fund registered withthe SEBI. SEBI had issued on May 22, 2000, a warning letter to ICICI Investment Management Limited for the lack of duediligence while submitting the offer document for ICICI CBO Fund.

AMC: Nil

The Trustee: Nil

II. ANY PENDING MATERIAL LITIGATION PROCEEDINGS INCIDENTAL TO THE BUSINESS OF THE MUTUAL FUND TO WHICH THESPONSOR 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 IS A PARTY. ANY PENDINGCRIMINAL CASES OR ECONOMIC OFFENCE CASES AGAINST THE SPONSOR OR ANY COMPANY ASSOCIATED WITH THESPONSOR IN ANY CAPACITY SUCH AS AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEYPERSONNEL.

Criminal Cases Against ICICI Bank and / or its Directors1. A criminal complaint (614 of 2001) was filed before the 4th Additional Chief Metropolitan Magistrate, Bangalore against

ICICI Bank by Pelicorp Limited upon termination of the Direct Selling Agent Agreement between itself and ICICI Bankpursuant to certain RBI guidelines. ICICI Bank filed a criminal petition for quashing the complaint in the Karnataka HighCourt, which has granted interim stay in the matter. The matter is pending disposal.

2. A criminal complaint (1648 of 2001) was filed against ICICI Bank by Rajiv Aggarwal before the Chief Judicial Magistrate,Jaipur for wrongful dishonour of cheques. ICICI Bank has filed a revision petition in the High Court at Jaipur for quashingthe order passed by the lower court. The High Court has stayed the proceedings of the lower court. Final arguments in therevision are yet to take place.

3. A criminal complaint (353 of 2003) was filed before the Additional Chief Metropolitan Magistrate, New Delhi by Mr. AnoopG. Chaudhury against ICICI Bank’s Managing Director & Chief Executive Officer Shri K.V.Kamath, for sale of a vehicle, whichhad been involved in an accident. The investigation officer has filed the investigation report in the Court. The matter ispending hearing.

4. A criminal complaint (64 of 2002) was filed against 36 individuals including Mr. K. V. Kamath M.D. and CEO before theCourt of the Chief Metropolitan Magistrate, Patiala House, New Delhi by Mr. M. M. Sehgal, the promoter of Sehgal PapersLimited (SPL). ICICI as part of a consortium of lenders led with IFCI Limited as lead institution had extended financialassistance to SPL. No summons has been issued to ICICI so far. Only a copy of the complaint filed by the Complainant hasbeen served on ICICI.

5. Five criminal complaints (9419/S/2002 to 9423/S/2002) were filed against ICICI Bank before the 39th Court of PresidencyMetropolitan Magistrate at Mumbai by the Municipal Corporation of Greater Mumbai (BMC) for violation of Section 471of the BMC Act read with Section 328-A thereof on grounds of non-payment of licence fees for the illuminated signboardsat its ATM centres. ICICI Bank filed a writ petition (2377 of 2002) in the Bombay High Court challenging the applicability of

88


the provisions of Sections 328 & 328-A of the BMC Act in respect of the ATM centres. The writ petition was dismissed. Inappeal, ICICI Bank filed an SLP (24215 of 2002) in the Supreme Court. The Supreme Court has granted a stay against allprosecutions and proceedings by BMC in this regard. The Metropolitan Magistrate stayed the proceedings before it till thefinal disposal of SLP.Further, the BMC has also filed two similar complaints (88/M/2003 and 89/M/2003) before the 27th Court of PresidencyMetropolitan Magistrate at Mumbai, against ICICI Bank. ICICI Bank submitted a copy of the Supreme Court’s order to theMagistrate. The matter is pending disposal.

6. A criminal complaint (1472/ of 2002) was filed against ICICI Home Finance Company Limited (ICICI HFC) and also againstsome of ICICI Bank’s Directors before the Metropolitan Magistrate’s 26th Court at Borivli, Mumbai, by Ms. Dipali Gopani foralleged wrongful recovery of Rs. 3,150/- and non-return of title deeds. The complaint has been subsequently withdrawnagainst certain directors and is now pending against Ms. Lalita D. Gupte, Ms. Kalpana Morparia. An application fordischarge of the Directors has been filed in the trial court, which is pending disposal.

7. A complaint (752 of 1997) was filed against 3i Infotech Services Ltd (erstwhile ICICI Infotech Services Limited) in theConsumer Redressal Forum, Hyderabad District, by a shareholder of ICICI, Shri. M.P.Jain regarding transfer of five sharesinspite of a stop transfer request having been made by him which has since been disposed off. A crime number 152 of 2001was also filed against ICICI and 3i Infotech Ltd (erstwhile ICICI Infotech Limited) before the XI Metropolitan Magistrate,Secunderabad by the shareholder. The Magistrate has referred the matter to Marredpally Police Station, Secunderabad forinvestigation. ICICI filed a petition in the Andhra Pradesh High Court for quashing the criminal complaint filed before theXI Metropolitan Magistrate, Secunderabad and the High Court has granted a stay on the investigations being undertakenby the police department till further orders.

8. A criminal complaint was filed before the Judicial Magistrate First Class, Bhiwandi by Shri Sheikh Mohd. Khalid Munnavara car insurance policy holder, for the alleged non-cognizable offences of criminal intimidation etc., against three officers ofICICI Lombard General Insurance Company Limited. Shri K V Kamath, MD & CEO of ICICI Bank Limited has also been namedas accused in the complaint though no specific allegations are made against him except describing him as one of theofficers of ICICI Lombard, and making an allegation that all four officers conspired in committing the offences. Shri K.VKamath is a Non Executive Director on the board of ICICI Lombard. A writ petition was filed before the High Court, Mumbaiseeking quashing of the criminal complaint on the grounds, inter alia, that it is false and baseless and the facts arecontradictory. The High Court passed an Order, staying the proceedings before the Judicial Magistrate First Class, Bhiwandi.Thus, the proceedings in Criminal Complaint No. 2887 of 2002 filed against Shri K.V. Kamath and others are stayed.

9. Vijay Shankar Prasad the complainant – one of the debenture holder of Lloyds Finance & Investment Company Limited(LFICL) had filed a criminal complaint (Case No. - 2064(C) of 2000) for non receipt of interest and redemption amount fromthe aforesaid company, in the Court of Chief Judicial Magistrate, Patna (CJM). As ICICI Bank Ltd is acting as Trustees he hasinter alia, impleaded Mr. K.V.Kamath, Managing Director, ICICI Ltd. The CJM court had taken cognizance of the offence andissued summons for appearance of the accused. Aggrieved by such direction, a criminal revision application was filedbefore the Sessions Judge, Patna. Upon hearing, the revision application was admitted and directions were issued stayingthe proceedings before CJM court and records were also called from the lower Court. The matter is fixed for hearing onApril 29, 2005

10. Shri Madan Gopal,. the complainant - one of debenture holder of Modern Denim Limited (MDL) had filed a criminalcomplaint (Case No. - 2175(C) of 2001) for non receipt of interest and redemption amount from the aforesaid company, inthe Court of Chief Judicial Magistrate, Patna (CJM). As ICICI Bank Ltd is acting as Trustees he has inter alia, impleaded ShriNarayan Vaghul, Chairman ICICI Ltd. The CJM court had taken cognizance of the offence and issued summons for appearanceof the accused. Aggrieved by such direction, a criminal revision application was filed before the Sessions Judge, Patna. Uponhearing, the revision application was admitted and directions were issued for staying the proceedings before CJM courtand records were also called from the lower Court. The mater is fixed for hearing on April 29, 2005. However, the companyhas since paid the outstanding dues of the debenture holder and to this effect a Memorandum of Understanding (MOU)has also been executed between the complainant and the Company

11. The Enforcement Officer (Central) had filed a criminal complaint (Case No. - C/3606/03) before the Chief MetropolitanMagistrate, Kolkata (CMM) impleading Shri Prafulla Ranjan, Branch Manager and Shri K V Kamath, CEO & MD for violationof the provisions of Equal Remuneration Act 1976. ICICI Bank has already taken up the matter and replied to LaborEnforcement Officer (Central), Kolkata (LEO) and the Chief Labor Commissioner (Central), Ministry of Labor, Government ofIndia, New Delhi for withdrawal of the complaint upon compliance of all the observations made by the LEO. Criminalrevision application has been filed before High Court, Calcutta and the proceedings before CMM Court has been stayed tillfurther order

12. Seema Mungale has filed a criminal complaint (1876 of 2003) against ICICI Bank & all its Directors alleging that ICICI Bankhas filed a false criminal complaint under section 138 of The Negotiable Instruments Act , against her by making falsestatements. ICICI Bank filed a writ petition in the Bombay High Court for quashing the complaint against the Directors andan interim order has been passed staying the criminal proceedings in the Magistrate’s court at Pune against elevenDirectors. A separate writ petition for quashing of the complaint has been filed in The Bombay High Court. The criminal casebefore the Magistrate at Pune and Writ Petitions filed at High Court, Bombay are pending disposal.

13. Shri Deobrat Prasad has filed a criminal Complaint no. 153/04 before the Judicial Magistrate at Jamshedpur for takingforcible possession of his vehicle. In the complaint he has also inpleaded Shri K V Kamath, MD & CEO of ICICI Bank.Summons were issued in this regard. An application had been filed before the High Court of Jharkhand at Ranchi forquashing the proceedings in the said criminal complaint. The Ranchi High Court has passed an order staying furtherproceedings in the matter. Pursuant to such directionsthe Judicial Magistrate, Jamshedpur has also stayed further proceedingsin the matter

14. Three criminal complaints (2412/S/2003, 2413/S/2003 and 2414/S/2003) were filed by Inspectors, Security Guards Board,


89

Greater Bombay & Thane District, in the year 2000 against erstwhile ICICI Limited (Since merged into ICICI Bank) (“ICICI”)and Shri K.V.Kamath, M.D. & CEO, before the Metropolitan Magistrate, Mumbai, under the Maharashtra Private SecurityGuards Act, 1981 on the grounds that security guards were engaged from exempted security agencies even though ICICIwas registered with the Security Guards’ Board. The earlier notices in this regard were replied to stating that registration isonly in respect of residential quarters for employees and not in respect of other establishments. ICICI Bank has filed a writpetition in the Bombay High Court for quashing of the complaint, which is pending disposal.

15. Two criminal complaints (2415/S/2003 and 2416/S/2003) were filed by Inspectors, Security Guards Board, Greater Bombay& Thane District, in the year 2000 against ICICI Bank before the Metropolitan Magistrate, Mumbai, under the MaharashtraPrivate Security Guards Act, 1981, on the grounds that security guards have been engaged from unexempted securityagencies. ICICI Bank has taken a stand that the exemption of security agencies continued on account of a previous HighCourt Order in the writ petition filed by certain security agencies. The complaints are pending disposal.

16. Two criminal complaints (2347/S/2003 and 2349/S/2003) were filed by Inspectors, Security Guards Board, Greater Bombay& Thane District, in the year 2001 against ICICI Bank before the Metropolitan Magistrate, Mumbai, under the MaharashtraPrivate Security Guards Act, 1981 on the grounds that security guards have been engaged from unexempted securityagencies. ICICI Bank has replied stating that the Security Guards were deployed on trial basis and are being replaced byArmed Guards. The complaints are pending disposal.

17. Dinesh Kumar Singh an advocate has filed Criminal Contempt Proceedings against Directors of ICICI Bank Ltd in theHon’ble High Court of Allahabad. The complainant alleges that his car was repossessed enroute his journey to court andhence he was prevented from attending the court. The matter is pending disposal.

Criminal Cases against associates of ICICI Bank

ICICI Home Finance Company Limited (ICICI Home Finance)

1. A criminal complaint (1472/ of 2002) was filed against ICICI Home Finance Company Limited (ICICI HFC) and also againstsome of ICICI Bank’s Directors before the Metropolitan Magistrate’s 26th Court at Borivli, Mumbai, by Ms. Dipali Gopani foralleged wrongful recovery of Rs. 3,150/- and non-return of title deeds. The complaint has been subsequently withdrawnagainst certain directors and is now pending against Ms. Lalita D. Gupte, Ms. Kalpana Morparia. An application fordischarge of the Directors has been filed in the trial court, which is pending disposal. There is a stay on this matter by theBombay High Court hence no next date is given

AMC

1. One of the Investors under Prudential ICICI Growth Plan had made investment to the tune of Rs. 50,00,000 under section54EB of the Income Tax Act, 1961. In accordance with the legal opinion of the counsel of the Fund, the Fund is of the viewthat 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 directionof the Court for premature redemption of units. SEBI vide its order dated September 4, 2000, rejected the petitioner’s claimfor premature 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 waslisted before Hon’ble Delhi High court for final arguments in the regular hearing list.

The Trustee : Nil

III. 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.

ICICI Bank & Its associates: Nil

Prudential plc. & Its associates


1995 Prudential Corporation plc (PC) PC was publicly criticised by the London Stock Exchange for the mannerin which it dealt with authorisation of a dealing in Prudential sharesby its then Chief Executive.

December 1997 The Prudential Assurance The FSA issued a section 60 notice and a public statement criticisingCompany Limited (PAC) PAC’s compliance arrangements with respect to its direct sales force.

AMC: Nil

The Trustee: Nil

IV. 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 ASTHE AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEY PERSONNEL OF THE AMC:

ICICI Bank & Its Associates: Nil

90


Prudential Corporation plc & its associates:


April 1994/ The Prudential Assurance In relation to The Prudential Assurance Company Limited (PAC).March 1995 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 rulesfor the future. Prudential agreed to co-operate. LAUTRO subsequentlyexpressed various concerns about the Prudential’s approach to pensiontransfers. The review was placed on a formal footing in March 1995.Following further discussions with LAUTRO, LAUTRO agreed not totake any disciplinary action and no charges were brought.

1995-1997 The Prudential Assurance A number of writs were issued by SIB from 1995 to 1997 in connectionCompany Limited (PAC) with the mis-selling of personal pensions, mainly where a personal

pension was taken out in preference to occupational schememembership but in some cases where an occupational scheme benefitwas transferred to a personal pension. Some were for protectivepurposes pending review of the sale under the SIB guidance; othersproceeded and many have reached settlement via consent orders onthe basis of payment of full compensation but without an admissionof liability.

November/ Pru Banking ITC Advertising Complaints Reports. Complaints were received fromDecember 1997 3 viewers. An advertisement for a Prudential 60 Day Notice Account

offered a rate of 7.5% gross per annum on £10,000 and included thestatement “you won’t find a better rate of interest for £10,000.” Twoviewers objected that a “better rate” of 7.6% could be obtained on£10,000 in a Legal & General 60 Day Notice Account. The third viewerobjected that the rate of 7.5% in fact including a 1% loyalty bonuswhich only applied after £10,000 had been held in the account for 12months.Assessment: Following a complaint on 17 October 1997, the ITCdrew Teletext’s attention to a higher rate of interest that was apparentlybeing paid on a Legal & General account comparable to the Prudential’s.Teletext immediately removed the Prudential advertisement from airpending investigations. These revealed that whilst Legal & Generalhad introduced a rate of 7.6% on 10 October 1997, Prudential hadnot matched this rate until 17 October 1997. In addition, whilstPrudential’s advertising agency had on 15 October 1997 requestedTeletext to amend the rate to 7.6% from 20 October 1997, pressadvertising for the Prudential account had reflected the higher rateon 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 still open after12 months and only two withdrawals had been made. They agreedthat this was a significant condition which should have been madeclear and instructed that subsequent advertising for this Prudentialaccount should include details.The ITC agreed that the advertising had been misleading during theperiod that Legal & General had been offeringa higher rate than Prudential and considered that the omission ofdetails about the 1% loyalty bonus had also rendered theadvertisement misleading.Teletex had already removed the advertisement from air and wouldnot permit it to return until the relevant amendments were made.Decision: Complaints upheld.

August 1998 The Prudential Assurance Following an article in The Guardian concerning possible pensionsCompany Limited (PAC) mis-selling, the PIA will be investigating 2 cases.

1998 The Prudential Assurance An objection was received via the Trading Standards Department to aCompany Limited (PAC) leaflet that claimed “Save around £100 on home insurance”. The

complainant, who was given a quote for £16 more than his existingpolicy, challenged whether the savings were generally attainable.Adjudication: The complaint was upheld. The advertisers submitted asummary of their research which showed that nine-tenths of customerswho had switched their home insurance to Prudential had saved anaverage of £97.99. They argued that the claim was neither a pricepromise nor a guarantee that Prudential would always be the cheapest.The Authority noted that the leaflet stated elsewhere that “You could


91

save money ...”. It considered, however, that the claim implied thatswitching to the advertisers’ household insurance policies alwayssaved customers money. Because that was not true, the Authorityasked the advertisers not to use the claim again.

1998 The Prudential Assurance 2 Complaints about advertisements in the national press:Company Limited (PAC) 1. An objection to a national press advertisement that was

headlined “Prudential announce a rate change of great interestto savers” and featured a table of interest rates for the advertisers’60 Day Notice Account . One column of the table was headed“Monthly Rates (inc loyalty bonus)” and quoted annual interestrates for those who have their interest paid monthly. A footnotestated “The rates include a loyalty bonus of 1% gross pa (0.8%net pa) calculated daily and paid annually on the anniversarydate. This is paid provided the account is still open and in thepreceding 12 months no more than two withdrawals have beenmade and the balance has not been less than £2,000.” Thecomplainant objected that the advertisement was misleadingbecause the loyalty bonus was not paid until the anniversarydate.Adjudication: Complaint upheld. The advertisers said theybelieved the footnote explained that monthly interest wascalculated excluding the loyalty bonus but accepted that thepresentation of the advertisement could be confusing. TheAuthority considered that the advertisement was misleading andit welcomed the advertisers’ intention to amend futureadvertisements to state monthly interest rates without the loyaltybonus, which they will show separately.

2. An objection to a national press advertisement that was headlined“Why you’ll be better off with Prudential because we’re No. 1 inour field”. The complainant challenged the claim.Adjudication: Complaint upheld. The advertisers submittedevidence that showed they were number one in some but not allthe aspects of their pension and life insurance business. TheAuthority accepted that the advertisers claim was acceptable inrelation to pensions and life insurance but considered that theirinformation did not adequately substantiate the general claimthat the advertisers were “No. 1” in their field. The Authorityasked the advertisers to specify in future the sectors in which theycould show they were “No. 1”.

May 2001 National Planning Corporation State of Florida (Division of Securities & Finance) fined NPC $10,000(NPC) for failing to register two branch offices. NPC were also required to

sign a Stipulation and Consent Agreement.

December 2001 National Planning Corporation NPC have established a $6m claimants’ fund after agreement with(NPC) New York Attorney General (NYAG). This follows HYAG investigation

into sale of payphones and leaseback arrangements of ETS payphonesby representatives of NPC. NYAG allege that the sale constituted anunregistered securities offering.

January 2002 Prudential Nominees Limited PNL was fined £5,000 by OPRA following a determination regarding(PNL) the Ledo Limited Pension Plan (a SSAS) for which PNL is pensioner

trustee. The fine is in respect of failing to appoint an auditor andother procedural failures.

January 2002 Jackson National Life (JNL) JNL have reached a settlement of Haggan case and the Andrews,Dunn and Gales cases linked to it for a sum of $10m. Finalised inJanuary 2002, the terms of the settlement are confidential and shouldnot be disclosed to third parties.- Despite the Haggan settlement above, further litigation regardingUltimate interest sensitive policies continues in Michigan, Illinois,Mississippi and Louisiana. JNL continue to try and resolve Ultimate‘vanishing premium’ complaints on a fair and reasonable basis inorder to avoid litigation where possible.

AMC: Nil

The Trustee: Nil


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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 timeand applicable to similar borrowings. The security for such borrowings, if required, will be as determined by the Trustee.Such borrowings, if raised, 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, ata negotiated compensation. The securities lent will be returned by the borrower on expiry of the stipulated period. Pleasesee page 8 on risks attached with stock lending. Each Plan, under normal circumstances, shall not have exposure of morethan 50% of its net assets in stock lending. The Plan may also not lend more than 50% of its net assets to any oneintermediary to whom securities will be lent. The AMC shall report to the Trustee on a quarterly basis as to the level oflending in terms of value, volume and the names of the intermediaries and the earnings/losses arising out of the transactions,the value of collateral security offered etc. The Trustees shall offer their comments on the above aspect in the report filedwith 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, 2003have allowed the mutual funds to make investments in equity of listed overseas companies which have a shareholding ofat least 10% in an Indian company listed on a recognised stock exchange in India (as on January 31 of the year ofinvestment).

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 beenobtained. 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 appropriatein terms of the overall investment objectives of the Scheme and the Plans thereunder. Since the Scheme and the Plansthereunder would invest only partially in ADRs/GDRs/overseas securities, there may not be readily available and widelyaccepted benchmarks to measure performance of the Scheme and the Plans thereunder. To manage risks associated withforeign currency and interest rate exposure, the Fund may use derivatives for efficient portfolio management includinghedging and in accordance with 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 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 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 onthe closing prices of the Principal Stock Exchange and in conformity with Regulations. In case of securities which are nottraded on the Principal Stock Exchange / any other exchange, the inter-Scheme transfers will be affected based on fairvaluation to be arrived at by the AMC with the approval of the Trustee.

I) 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 thepurpose of giving effect to the Scheme with power to the AMC to add to, alter or amend all or any of the terms andrules that may be framed from time to time.

� Power to remove Difficulties

If any difficulties arise in giving effect to the provisions of the Scheme, the Trustee may, subject to the Regulations, doanything not inconsistent with such provisions, which appears to it to be necessary, desirable or expedient, for thepurpose of removing such difficulty.


93

� 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 featuresof investment plans and terms of the Scheme after obtaining the prior permission of SEBI and 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.

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/ Plans under this Offer Document was approved by the Directors of Prudential ICICI Trust Limited bycirculation on February 2, 2001.

For and on behalf of the Board of Directors of

Prudential ICICI Asset Management Company Limited

Sd/-

Pankaj RazdanManaging Director

Place : MumbaiDate : June 27, 2005

Official Points of acceptance of transactions under all the schemes of Prudential ICICI Mutual Fund

Branches of Prudential ICICI Asset Management Company Ltd. located at:• Ahmedabad: 401, Sears Towers, Nr. Panchawati,

Gulbai Tekra, Ahmedabad 380 006. Tel: (079) 26421095/96, 26408960 / 9029

• Bangalore: 15/16, Vayudooth Chambers, Ground Floor, Trinity Circle, M. G. Road, Bangalore 560 001. Tel: (080) 25323789, 25323675/76, 25323680

• Baroda: 203 Dwarkesh Complex, RC Dutt Road, Baroda 390 007. Tel: (0265) 2322283 / 84

• Bhubaneswar: 2nd Foor, Epari Plaza, Plot No. C-653, Unit-3, Janpath, Bhubaneswar, Orissa. Tel: (0674) 2535805, 2535806

• Chandigarh: SCO 137-138 Ist Floor, Sector 9-C, Chandigarh 160 017. Tel: (0172) 2745302/3/2746195

• Chennai: No. 22/4, Aashika Chambers, Chamiers Road, Teynampet, Chennai 600018. Tel: (044) 2433 8228/9

• Coimbatore: Old No:58, New No.126, 1st floor, TV Swamy Road (West), R.S. Puram, Coimbatore 641 002. Tel: (0422) 2543380/2543382/2543384

• Durgapur: Mezzanine Floor, Lokenath Mansion, Sahid Khudiram Sarani, City Centre, Durgapur, Dist: Burdwan, West Bengal - 713216. Tel: (0343) 2544682. Fax: (0343) 2544683

• Goa: Shop No. 7, Ground Floor, Kamat Chambers, Opp. Hotel Neptune, Menezes Braganza Road, Panjim 403 001. Tel: (0832) 2424520/11

• Guwahati: Jadavbora Complex, M. Dewan Path, Ullubari, Guwahati 781007. Mobile: 9864025593

• Hyderabad: L.B. Bhavan, 6-3-550 Somajiguda, (Opp. Medinova), Hyderabad 500082. Tel: (040) 55510099/100

• Indore: 213-A City Center, 570 M.G. Road, Indore-452 001. Tel: (0731) 5043003 / 5043004

• Jaipur: 305, 3rd floor, Ganpati Plaza, M.I. Road, Jaipur 302 001. Tel: (0141) 2388724, 2362257, 5106161

• Kanpur: 516-518, Krishna Tower, 15/63 Civil Lines, Opp. U.P. Stock Exchange, Kanpur-208001. Tel: (0512) 2303505/ 2303520

• Kochi: No. 6, 3rd floor, Emgee Square, M.G. Road, Kochi 682 035. Tel: (0484) 2353 199/2371 809 & 3097 458

• Kolkata: 124, Lords, 1st Floor, 7/1 Lord Sinha Road, Kolkata 700 071. Tel: (033) 2282 4077/82

• Lucknow: Office No.6, Ground Floor, Saran Chambers-I, 5 Park Road, Lucknow 226 001. Tel: (0522) 237923/717/711

• Ludhiana: SCO 147, 4th Floor, Feroze Gandhi Market, Ludhiana 141 001. Tel: (0161) 2413101/2/4

• Mangalore: 1st Floor, S. L. Chambers, Near Bunt’s Hostel Road, Karangalpady, Mangalore 575003. Tel: (0824) 2492179, 2491666

• Mumbai-Corporate Office: Peninsula Tower, 5th Floor, 503, Peninsula Corporate Park, Ganpatrao Kadam Marg, Off. Senapati Bapat Marg, Lower Parel, Mumbai-400 013. Telephone No.: 022-24999777 Fax No.: 022-2499 7029

• Mumbai - Branch Office (Fort): Yeshwant Chambers, Shop No. 6, Ground Floor, 14/18, Burjoji Bharuch Marg, Kalaghoda, Fort, Mumbai-400 023. Tel: (022) 22679676/22697989

• Mumbai - Branch Office (Bandra): 101, Deccan House, Off Turner Road, Behind Copper Chimney, Near Bandra Station, Bandra (W), Mumbai-400 050. Tel: (022) 26404065/66

• New Delhi: 206, Ashoka Estate, 2nd floor, 24, Barakhamba Road, New Delhi 110 001. Tel: (011) 23752515/16/17/18

• Patna: 306, Ashiana Harnivas, Dak Bungalow Road, Patna 800 001. Tel: (0612) 2230 483, 2213632, 2204164

• Pune: 1184/4, 3& 4 Ground Foor, Gokul Nagar, Dyaneshwar Paduka Chowk, Fergusson college Road, Pune 411005. Tel:(020) 56028844, 56023909

• Rajkot: 103, Star Plaza, Phul Chaab Chowk, Rajkot 360 001. Tel: (0281) 2294299

• Ranchi: C/o. Bytes Care, I / 103, Sainik Market, Main Road, Ranchi-834 001. Mobile: 9835039770

• Surat: 419, Lalbhai Contractor Complex, Nanpura, Surat 395001, Gujarat. Tel. (0261) 2460362, 9824272250

• Vijayawada: 40-1-52/5,Ground Floor, Sai Nag Complex, Near Benz Circle, M.G.Road, Vijayawada 520 010. Tel: (0866) 5518882, 5516662, 9848050868

• Visakhapatanam: G-8, Rams Plaza, Diamond Park Lane, Dwarkanagar, Visakhapatanam 530 016. Tel: (0891) 5566 333, 5566 318, 2762 660, 9848194249

Branches of Computer Age Management Services Pvt. Ltd. (CAMS) located at:• Agra: CAMS Transaction Point, F-39/203, Sky Tower,

Sanjay Place, Agra 282 002. Tel: 0562-252 1812• Allahabad: CAMS Transaction Point, 1st Floor, Chandra

Shekhar Azad Complex (Near Indira Bhawan), 5, S.P. Marg, Civil Lines, Allahabad 211 001. Tel: 0532-260 1602

• Amaravati: Cams Transaction Point, 81, Gulsham Tower, Near Panchsheel, Amaravati 444 601

• Amritsar: CAMS Transaction Point, 378-Majithia Complex, 1st Floor, M. M. Malviya Road, Amritsar 143 001. Tel: 0183-221 1194

• Aurangabad: CAMS Transaction Point, Office No. 1, 1st Floor, Amodi Complex, Juna Bazar, Aurangabad 431 001. Tel: 0240-2363 664

• Belgaum: CAMS Transaction Point, No. 21, Ground Floor, Arvind Complex, 1552 Maruti Galli, Belgaum 590 002. Tel: 0831-2425 305

• Bhilai: CAMS Transaction Point, 209 , Khichariya Complex, Opp IDBI Bank, Nehru Nagar Square, Bhilai 490 020. Tel: 0788-505 0568

• Bhopal: CAMS Transaction Point, C-12, 1st Floor, Above Life Line Hospital, Zone-I, M.P.Nagar, Bhopal 462011 (M.P.). Tel: 0755-528 5266

• Calicut: Cams Transaction Point, 17/28 H 1st Floor, Manama Towers, Marvoor Road, Calicut 673 001. Tel: 0495-272 3173

• Dehradun: CAMS Transaction Point, 81, Chakrata Road, Dehradun 248 001. Tel: 0135-271 3233

• Guntur: CAMS Transaction Point, Shyamsunder Golden Towers, Ground Floor, 3rd Lane, Brodipet, Adjacent to Over-bridge, Guntur 522 002. Tel: 0863-5580 838

• Hubli: CAMS Transaction Point, No. 208, ‘A’ Block, 1st Floor, Kundagol Complex, Opp. Court, Club Road, Hubli 580 029.

• Jalandhar: CAMS Transaction Point, 367/8, Central Town, Opp. Gurudwara Diwan Asthan, Jalandhar 144 001. Tel: 0181-2456336

• Jamnagar: CAMS Transaction Point, 207/209, K.P. Shah House I, K.V. Road, Jamnagar 361 001. Tel: 0288-255 8467/ 3111909

• Jamshedpur: CAMS Transaction Point, Panch Bhawan, ‘R’ Road, Bistupur, Gr. Floor, (Near Rajasthan Bhawan), Jamshedpur 831 001. Tel: 0657-310 5930

• Jodhpur: Cams Transaction Point, 1/5 Nirmal Tower, 1st Chopasani Road, Jodhpur 342003. Tel: 0291-309 2892 / 262 8039

• Madurai: CAMS Transaction Point, 86/71A, Tamilsangam Road, Madurai 625 001.

• Manipal: CAMS Transaction Point, Academy Annex, First Floor, Opposite Corporation Bank, Upendra Nagar, Manipal 576 104. Tel: 0820-257 3333, 529 2033

• Meerut: CAMS Transaction Point, 108, 1st Floor, Shivam Plaza, Opposite Eves Cinema, Hapur Road, Meerut 250 002. Tel: 0121-2400 700

• Mysore: CAMS Transaction Point, No.3, 1st Floor, CH.26 7th Main, 5th Cross (Above Trishakthi Medicals), Saraswati Puram, Mysore 570 009. Tel: 0821-309 1244 / 234 2182

• Nagpur: CAMS Investor Service Centre, 145 Lendra Park, Behind Shabari, New Ramdaspeth, Nagpur 440 010. Tel: (0712) 253 2447, 253 7321

• Nasik: CAMS Investor Service Centre, “Varsha Bungalow”, 1st Floor, Near Rungtha High School, 493, Ashok Stambh, Nasik 422 001.

• Patiala: CAMS Transaction Point, 3, Ajit Nagar, Patiala 147 001.

• Pondicherry: CAMS Transaction Point, 25, First Floor, Jawaharlal Nehru Street, Pondicherry 605 001. Tel: 0413-222 0575 / 233 5722

• Raipur: CAMS Transaction Point, C-23, Sector 1, Devendra Nagar, Raipur 492004. Tel: 0771-309 0830

• Rajahmundry: CAMS Transaction Point, D.No 7-27-4 Krishna Complex, Baruvari Street, T Nagar, Rajahmundry 533 101. Tel: 0883-5565531

• Rourkela: Cams Transaction Point, 1st Floor, Mangal Bhawan, Phase II, Power House Road, Rourkela - 769 001.

• Salem: CAMS Transaction Point, 28, I Floor, Advytha Ashram Road, Salem 636 004. Tel: 0427-244 6338

• Siliguri: CAMS Transaction Point, No 8, Swamiji Sarani, Ground Floor, Hakimpara, Siliguri 734 401. Tel: 0353-221 6065

• Thiruvananthapuram: CAMS Transaction Point, 15/2012, Sheelatha Building, Womens' College Lane, Vazuthacadu, Trivandrum 695014. Tel: 0471-3950 414

• Trichur: CAMS Transaction Point, VIII/350/15, O K John Memorial Building, Ekkanda Warrier Road, Trichur 686 001. Tel: 0487-242 0646

• Trichy: CAMS Transaction Point, No 8, I Floor, 8th Cross West Extn., Thillainagar, Trichy 620 018. Tel: 0431-274 1717

• Udaipur: CAMS Transaction Point, 32, Ahinsapuri, Fatehpura Circle, Udaipur 313 004. Tel: 0294-3091722

• Valsad: C/o. CAD House, Suddhivinayak Complex, F-1, First Floor, Avenue Building, Near R. J. J. School, Tithal Road, Valsad 396 001.

• Varanasi: CAMS Transacation Point, C 27/249 - 22A, Vivekanand Nagar Colony, Maldhaiya, Varanasi 221 002. Tel: 0542-220 8546/ 311 3810.