FROM Prudential ICICI Mutual Fund - Kotak Mahindra Bank · FROM Prudential ICICI Mutual Fund ......

AN OPEN-ENDED FUNDFROM

Prudential ICICI Mutual FundIssue of Units of Rs.10/- per Unit for Cash at NAV based prices.

Offer open for on-going purchases and sale

Offer Document

The particulars of Prudential ICICI Index Fund, 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.

Sponsors: Prudential plc (formerly known as Prudential Corporation plc) (through its wholly owned subsidiary, Prudential Corporation Holdings Limited), Laurence Pountney Hill, London EC4R 0HH, United Kingdom, and

ICICI Bank Limited: Registered Office: Landmark, Race Course Circle, Vadodara 390 007, India

Investment Manager: Prudential ICICI Asset Management Company Limited Regd. Office: 206 Ashoka Estate, 2nd Floor, 24 Barakhamba Road,

New Delhi 110 001. Corp. Office: Contractor Building, 3rd Floor, 41, R. Kamani Marg,

Ballard Estate, Mumbai 400 038.

Trustee: Prudential ICICI Trust Limited Regd. Office: 206 Ashoka Estate, 2nd Floor, 24 Barakhamba Road,

New Delhi 110 001.

Making your money work harder for you

Prudential ICICI Mutual Fund

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IMPORTANT NOTICEInvesting in mutual fund schemes involves certain risks and considerations associated generally with making investments insecurities. The value of the Plan’s investments may be affected generally by factors affecting financial markets, such as price andvolume, 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 and the Plans thereunder offered in this Offer Document would achieve the stated objectives.The NAV of the Units of the Plans may fluctuate and can go up or down. Past performance of the schemes managed by theSponsors or their affiliates or the Asset Management Company is not indicative of the future performance of the Scheme nor willthe performance of the Scheme, following the commencement of the operations, be indicative of the Scheme’s future performance.

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

The Prudential ICICI Mutual Fund (the Fund) and the Prudential ICICI Asset Management Company Limited (the AMC), 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 Plans. Prospective investors are accordingly advised not to rely upon anyinformation or representations not incorporated in this Offer Document. Any subscription, purchase or sale made by any personon the basis of statements or representations which are not contained in this Offer Document or which are inconsistent with theinformation contained herein shall be solely at the risk of the investor.

The current Regulations impose certain restrictions and conditions on the AMC for entering into transactions with 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 shall not exceed an average of 5% of theaggregate purchases and sale of securities made by the Fund in all its Schemes. The limit of 5% shall apply for a block ofany three months.

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

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

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

b) 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.48.00 and UK£ and Indian Rupee at 1£=Rs.75.00. This Offer Document is dated January 24, 2004.

Prudential ICICI Index Fund

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TABLE OF CONTENTSS.N. Particulars Page1 Highlights ................................................................................................................................................ 5

2. Risk Factors ................................................................................................................................................ 73. Due Diligence Certificate ......................................................................................................................... 114. Definitions ................................................................................................................................................ 125. Summary – Prudential ICICI Index Fund ................................................................................................... 146. Constitution of the Mutual Fund .............................................................................................................. 15

A. The Sponsors .................................................................................................................................... 15B. The Trustee Company ........................................................................................................................ 16

i) Directors .................................................................................................................................. 16ii) Rights and Obligations of the Trustee ...................................................................................... 18iii) Trusteeship Fees ....................................................................................................................... 19

C. Management of Asset Management Company ................................................................................. 20i) Board of Directors of the AMC ................................................................................................ 20ii) Powers, Duties & Responsibilities of the AMC ......................................................................... 22iii) Key Employees of AMC & relevant experience .......................................................................... 23iv) Fund Manager ......................................................................................................................... 26v) Compliance Officer .................................................................................................................. 26vi) Investor Relations Officer ......................................................................................................... 26

D. Auditors ............................................................................................................................................ 26E. Registrar ............................................................................................................................................ 26F. Custodian ......................................................................................................................................... 26

7. Investment Objectives & Policies - Prudential ICICI Index Fund .............................................................. 27Fundamental Attributes of the Scheme ....................................................................................................... 27a) Type of the Scheme ........................................................................................................................... 27b) Investment Objective ......................................................................................................................... 27c) Investment Pattern ............................................................................................................................ 27d) Change in Investment Pattern ........................................................................................................... 27e) Tracking Error .................................................................................................................................... 28f) Trading in Derivatives ........................................................................................................................ 28g) Terms of the Scheme ......................................................................................................................... 29

1. Liquidity ................................................................................................................................... 292. Fees and Expenses ................................................................................................................... 303. Load ........................................................................................................................................ 30

h) Change in Fundamental Attributes ................................................................................................... 30i) Investment Strategy ........................................................................................................................... 31

i) Equities .................................................................................................................................... 31ii) Fixed Income securities ............................................................................................................ 31

j) Portfolio Turnover .............................................................................................................................. 31k) Procedure followed for investment decisions .................................................................................... 31l) Risk Factors And Special Considerations ............................................................................................ 32m) Investment Restrictions for the Scheme ............................................................................................. 34n) Underwriting by the Fund .................................................................................................................. 35o) Computation of Net Asset Value ....................................................................................................... 35p) Accounting Policies & Standards ....................................................................................................... 38

8. Units & The Initial Offer ........................................................................................................................... 40General Information ................................................................................................................................... 40a) Minimum Subscription Amount ........................................................................................................ 40b) Offer Price for on-going subscriptions ............................................................................................... 40c) Minimum Amount for Application .................................................................................................... 40d) Initial Issue Expenses ......................................................................................................................... 40e) Pledge of Units for Loans .................................................................................................................. 42f) Systematic Investment Plan ................................................................................................................ 42g) Systematic Withdrawal Plan ............................................................................................................... 43h) Who can Invest .................................................................................................................................. 43

i) How to apply? ......................................................................................................................... 43i. Purchase of units after the Initial Offer Period .......................................................................... 43ii. Purchase Price .......................................................................................................................... 43iii. How to Purchase? .................................................................................................................... 44iv. Purchase by NRIs/FIIs ................................................................................................................ 44v. Mode of Payment on Repatriation basis .................................................................................. 44vi. Mode of payment on Non-Repatriation basis .......................................................................... 44vii. Application under Power of Attorney/ Body Corporate/Registered Society/ Trust/ Partnership .. 45viii. Applicable NAV ........................................................................................................................ 45ix. Joint Applicants ....................................................................................................................... 45


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x. Nomination Facility .................................................................................................................. 45j) Issuance of Units/Account Statements ............................................................................................... 45k) Redemption of Units ......................................................................................................................... 46

i) Redemption Price ..................................................................................................................... 46ii) Applicable NAV ........................................................................................................................ 46iii) How to Redeem? ..................................................................................................................... 46iv) Payment of Proceeds ................................................................................................................ 47v) Redemption by NRIs /FIIs .......................................................................................................... 47vi) Effect of Redemptions ............................................................................................................. 47vii) Fractional Units ........................................................................................................................ 47viii) Right to Limit Redemptions ..................................................................................................... 48ix) Suspension of Sale and Redemption of Units .......................................................................... 48

9) Load Structure, Fees and Expenses ......................................................................................................... 49A) Load Structure of the Scheme ............................................................................................................ 49B) Fees and Expenses of the existing Scheme ......................................................................................... 49

i) Initial Issue Expenses ............................................................................................................... 49ii) Estimated Recurring Expenses .................................................................................................. 49

C) Fees and Expenses of the Existing Scheme ......................................................................................... 50i. Initial Issue Expenses ............................................................................................................... 50ii. Annual Scheme Recurring Expenses ......................................................................................... 52iii. Condensed Financial Information ............................................................................................ 59

10) Unitholders Rights and Services ............................................................................................................... 73a) Investor Services ................................................................................................................................ 73b) Ease of Transactions .......................................................................................................................... 73

i) Customer Service Centres in major metros ............................................................................... 73ii) Process transactions in a timely manner ................................................................................... 73

c) Problem Resolution ........................................................................................................................... 73d) Information about the Scheme .......................................................................................................... 73e) NAV Information ............................................................................................................................... 73f) Disclosure of information under the Regulations .............................................................................. 74g) Rights of Unitholders of the Scheme and the Plans thereunder ......................................................... 74h) Duration of the Scheme and the Plans thereunder /winding up. ........................................................ 74i) Procedure and manner of Winding up .............................................................................................. 75j) Tax Benefits ....................................................................................................................................... 75

a) To the Mutual Fund ................................................................................................................. 75b) To the Unit holders .................................................................................................................. 75i) Income received from Mutual fund .......................................................................................... 75ii) Long Term Capital Gains on transfer of units ........................................................................... 76� For Individuals and HUFs .......................................................................................................... 76� For Partnership Firms, Non-Residents and Indian/Foreign Companies ...................................... 76� For Non-resident Indians ......................................................................................................... 76� For OFO/FII ............................................................................................................................... 76

iii) Short Term Capital Gains ................................................................................................................... 76iv) Short Term Capital Losses .................................................................................................................. 76v) Tax Deduction at source ..................................................................................................................... 76

� For income in respect of units .................................................................................................. 76� For Capital Gains (Resident and Non-resident) ......................................................................... 76� Exemption from tax on capital gains arising on transfer of units held for more than 12 months

(Sec.54EC and Sec. 54ED) ......................................................................................................... 77vi) Investment by Charitable and religious trusts in the plan .................................................................. 77vii) Wealth Tax ......................................................................................................................................... 77k) Unclaimed redemption amount ......................................................................................................... 77

11) Other Matters ........................................................................................................................................... 78A) Unitholders Grievances Redressal Mechanism ................................................................................... 78B) Associate Transactions ....................................................................................................................... 79C) Details of Investment in Companies that hold more than 5% of NAV of Schemes managed by

the AMC ........................................................................................................................................... 84D) Penalties and Pending Litigations ...................................................................................................... 86E) Borrowing by the Mutual Fund ......................................................................................................... 92F) Stock Lending by the Mutual Fund .................................................................................................... 92G) Policy on offshore investments by underlying schemes of Prudential ICICI Mutual Fund ................... 93H) Inter-Scheme Transfers ....................................................................................................................... 93I) General Information .......................................................................................................................... 93

� Power to make Rules ............................................................................................................... 93� Power to remove Difficulties .................................................................................................... 93� Scheme to be binding on the Unitholders ............................................................................... 93

J) Documents available for inspection ................................................................................................... 94


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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 31 December 2002, overGBP155 billion of funds under management, more than 12 million customers and over 15,000 employees, worldwide.

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

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

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

Fund Management expertise – Prudential plc is a leading international financial services group providing retail financialproducts and services and fund management to many millions of customers worldwide. As a group Prudential plc has, asof 31 December 2002, over GBP155 billion of funds under management, more than 12 million customers and over15,000 employees, worldwide.

Prudential ICICI Asset Management Company Limited, the Investment Manager to the Prudential ICICI Mutual Fund,manages assets over Rs. 16,000 crores as of December 31, 2003 through 17 schemes. It is one of the largest assetmanagement companies in the country.

� Prudential ICICI Index Fund is an open-ended index linked growth scheme seeking to track the returns of the S&P CNXNifty through investment in a basket of stocks drawn from the constituents of the Nifty. Please refer to section on“Investment Objectives and Investment Pattern” under the Scheme on page 27.

� Performance of the S&P CNX Nifty indices will have a direct bearing on the performance of the Scheme. In the event theS&P CNX Nifty is dissolved or withdrawn, the Trustee reserves a right to modify the Scheme so as to track a different andsuitable index/indices and appropriate intimation will be sent to the unitholders of the Scheme.

� Tracking errors are inherent in any indexed fund and such errors may cause the Scheme to generate returns which arenot in line with the performance of the Nifty or one or more securities covered by / included in the Nifty. Under normalcircumstances, such tracking errors are not expected to exceed 2% per annum. However, this may vary whenthe markets are very volatile.

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

� High Liquidity - Being an open ended Scheme, Units may be purchased or redeemed on every Business Day at NAVbased prices, subject to applicable load provisions. For the present, the Trustee does not intend to charge any entry load.Please refer to page 30 for exit load. The Fund will, under normal circumstances, endeavour to dispatch redemptioncheques within 5 Business Days. It may be noted that this provision is based on the proposed settlement cycle of thePrincipal Stock Exchange(s), which is on T+2 days. Trustees reserve the right to alter or modify the number of days takenfor redemption of Units under the Fund after taking into consideration the actual settlement cycle, when announced, asalso the changes in the settlement cycles that may be announced by the Principal Stock Exchanges from time to time.Please refer to Page 46 for details of Redemption.

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

� The initial issue expenses under the Scheme were limited to 1.50% of the initial corpus mobilized under the Scheme.

� The Scheme does not propose to declare dividends.

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

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

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

� As provided under section 54EC of the Income Tax Act, 1961, where an assessee has made capital gains from the transferof units held in the Mutual Fund Scheme for a period exceeding 12 months and the assessee has at any time within a


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period of 6 months after the date of such transfer, invested such capital gains in the long term specified assets, suchcapital gains shall be exempted from tax on capital gains under section 54EC of the Income Tax Act 1961.

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

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

� Investors are advised to consult their Legal /Tax and other Professional Advisors in regard to tax/legal implicationsrelating to their investments in the Scheme and before making decision to invest in the Scheme or redeem theUnits 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 the

objectives of the Scheme will be achieved.

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

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

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

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

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

� In the event of receipt of inordinately large number of redemption requests or of a restructuring of the Scheme’s portfolio,there may be delays in the redemption of Units. As per the guidelines issued by SEBI, in the event of failure to dispatchthe redemption 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 notvalid and the Fund retains the right to withhold the redemption until a proper bank mandate is furnished by the Unit-holder and the provision with respect of penal interest in such cases will not be applicable/ entertained.

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

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 Plans’ 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,and the value of the Plans’ 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 Plan’sunits. There can be no assurance that the Plans’investment objectives will be achieved.

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

� From time to time and subject to the Regulations, the Sponsors, the mutual funds and investment companies managedby them, their affiliates, their associate companies, subsidiaries of the sponsors and the AMC may invest either directly orindirectly in the Scheme. The funds managed by these affiliates, associates, the Sponsors, subsidiaries of the Sponsorsand/or the AMC may acquire a substantial portion of the Scheme’s Units and collectively constitute a major investor inthe Scheme. Accordingly, redemption of Units held by such funds, affiliates/associates and Sponsors may have an adverseimpact on the Units of the Scheme because the timing of such redemption may impact the ability of the other Unitholdersto redeem their Units.Changes in Government policy in general and changes in tax benefits applicable to mutual fundsmay impact the returns to investors in the Scheme.

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

� As per SEBI circular dated December 12, 2003 ref SEBI/IMD/CIR No. 10/22701/03, each scheme and individual plan(s)under the schemes should have a minimum of 20 investors and no single investor should account for more than 25% ofthe corpus of such scheme/plan(s). In case of non-fulfillment with either of the above two conditions in a three monthstime period or the end of succeeding calendar quarter, whichever is earlier, from the close of the Initial Public Offering(IPO) of open ended schemes or on an ongoing basis for each calendar quarter, the schemes /plans shall be wound up byfollowing the guidelines prescribed by SEBI and the investor’s money would be redeemed at applicable NAV.

� The Fund may use derivative instruments like Stock Index Futures, stock options, stock futures, option contracts, warrants,convertible securities, swap agreements or other derivative instruments for the purpose of hedging and portfolio balancing,as permitted under the Regulations and guidelines. Usage of derivatives will expose the Scheme to certain risks inherentto such derivatives. Please see for the relevant Risk factors.

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


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� The Scheme may also invest in ADRs / GDRs as permitted by Reserve Bank of India and Securities and Exchange Board ofIndia. To the extent that some part of the assets of the Plans may be invested in securities denominated in foreigncurrencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by thechanges in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital also may behampered by changes in regulations concerning exchange controls or political circumstances as well as the applicationto it of other restrictions on investment. For further details, please refer page 44.

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

� Risks attached with the use of derivatives:

As and when the Scheme trades in the derivatives market there are risk factors and issues concerning the use of derivativesthat investors should understand. Derivative products are specialized instruments that require investment techniquesand risk analyses different from those associated with stocks and bonds. The use of a derivative requires an understandingnot only of the underlying instrument but of the derivative itself. Derivatives require the maintenance of adequate controlsto monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and theability to forecast price or interest rate movements correctly. There could be an element of settlement risk. This settlementrisk in case of derivatives is minimised since the Exchange acts as the Clearing Corporation and the Counterparty as isthe practice in the developed markets. However there is the risk attached to the liquidity and the depth of the indexfutures market as it is relatively new market.

Other risks in using derivatives include the risk of mis-pricing or improper valuation of derivatives and the inability ofderivatives to correlate perfectly with underlying assets, rates and indices. Derivatives are highly leveraged instruments.Even a small price movement in the underlying security could have a large impact on their value. Also, the market forderivative instruments is nascent in India.

� 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 thiscase the approved intermediary, to comply with the terms of agreement entered into between the lender of securities i.e.the Scheme and the approved intermediary. Such failure to comply can result in the possible loss of rights in the collateralput up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited bythe lender and the possible loss of any corporate benefits accruing to the lender from the securities deposited with theapproved intermediary.

Scheme Specific Risk Factors

� Performance of the S&P CNX Nifty will have a direct bearing on the performance of the Scheme. In the event the S&P CNXNifty index is dissolved or is withdrawn, the Trustee reserves a right to modify the Scheme so as to track a different andsuitable index and appropriate intimation will be sent to the unitholders of the Scheme.

� Tracking errors are inherent in any indexed fund and such errors may cause the Scheme to generate returnswhich are not in line with the performance of the Nifty or one or more securities covered by / included in theNifty/. Under normal circumstances, such tracking errors are not expected to exceed 2% per annum. However, this mayvary when the markets are very volatile.

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

� In the event the S&P CNX Nifty index as the case may be, is dissolved or is withdrawn by India Index Services&ProductsLimited (IISL or is not published due to any reason whatsoever, the Trustee reserves the right to modify the Scheme so astrack a different and suitable index or to suspend tracking the Nifty till such time it is dissolved/ withdrawn or not publishedand appropriate intimation will be sent to the Unitholders of the Scheme. In such a case, the investment pattern will bemodified suitably to match the composition of the securities that are included in the new index to be tracked and theScheme will be subject to tracking errors during the intervening period.


� Investors are advised to consult their Legal /Tax and other Professional Advisors in regard to tax/legal implicationsrelating to their investments in the Scheme and before making decision to invest in the Scheme or redeem theUnits in the Scheme.


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IMPORTANT NOTE“Standard & Poor’s ®”and “S&P®” are trademarks of the McGraw-Hill Companies, Inc. and have been licensed for use by IndiaIndex Services & Products Limited (IISL), which has sublicensed such marks to the Prudential ICICI Asset Management CompanyLimited (AMC). The S&P CNX Nifty is not compiled, calculated or distributed by Standard & Poor’s and Standard & Poor’s makesno representation regarding the advisability of investing in products that utilise any such index as a component, or such similarlanguage as may be approved in advance by S&P, it being understood that such notice need only refer to the specific S&P Marksreferred to in the Information Materials.

Prudential ICICI Index Fund (the Scheme) is not sponsored, endorsed, sold or promoted by India Index Services & ProductsLimited (IISL) or Standard & Poor’s, a division of the McGraw-Hill Companies Inc. (S&P). Neither IISL nor S&P makes any representationor warranty, express or implied to the Unitholders of the Scheme or any members of the public regarding the advisability ofinvesting in securities generally or in the Scheme particularly or the ability of the S&P CNX Nifty to track general stock marketperformance in India. The relationship of S&P and IISL to the AMC is only in respect of the licensing of certain trademarks andtradenames of their index, which is determined, composed and calculated by IISL without regard to the AMC or the Scheme.Neither IISL nor S&P has any obligation to take the needs of the AMC or the Unitholders of the Scheme into consideration indetermining, composing or calculating the S&P CNX Nifty Index. Neither IISL nor S&P is responsible for or has participated in thedetermination of the timing of, prices at, or quantities of the Scheme to be issued or in the determination or calculation of theequation by which the Scheme is to be converted into cash. Neither S&P nor IISL has any obligation or liability in connection withthe administration or marketing or trading of the Scheme.

S&P and IISL do not guarantee the accuracy and/or the completeness of the S&P CNX Nifty or any data included therein and theyshall have no liability for any errors, omissions or interruptions therein. Neither IISL nor S&P makes any warranty, express orimplied, as to the results to be obtained by the AMC, Unitholders of the Scheme, or any other person or entity from the use ofthe S&P CNX Nifty or any data included therein. IISL and S&P makes no express or implied warranties and expressly disclaim allwarranties of merchantability or fitness for a particular purpose or use with respect to the index or any data included therein.Without limiting any of the foregoing, in no event shall IISL or S&P have any liability for any special, punitive, indirect orconsequential damages (including lost profits), even if notified of the possibility of such damages.


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SponsorsPrudential plcLaurence Pountney Hill,London EC4R DHH,United KingdomICICI Bank LimitedLandmark,Race Course Circle,Vadodara 390 007,IndiaAsset Management CompanyPrudential ICICI Asset Management Company LimitedRegistered Office206 Ashoka Estate, 2

nd Floor,

24 Barakhamba Road,New Delhi – 110 001Corporate Office3

rd Floor, Contractor Building.

41, R. Kamani MargBallard EstateMumbai 400 038.TrusteePrudential ICICI Trust Limited206 Ashoka Estate, 2

nd Floor,

24 Barakhamba Road,New Delhi – 110 001RegistrarCitibank N.A.Ramnord House1st & 2

nd Floor,

77, Dr. Annie Besant Road,Worli, Mumbai 400 018Auditors to the SchemeN. M. Raiji & CompanyUniversal Insurance BuildingSir Phiroze Shah Mehta RoadMumbai 400 001CustodianDeutsche Bank AG Custodial Services222 Kodak House, D.N.RoadMumbai-400 023.Legal Advisors:A.R.A. LAWAgra Building,1st Floor,121, M.G. Road,Fort, Mumbai - 400 023


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SECTION I

DUE DILIGENCE CERTIFICATEIt is confirmed that:

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

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

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

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

Place : Mumbai Abhaya JoglekarDate : January 24, 2004. Asst. Company Secretary

& Compliance Officer

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 ICICIAMC or Investment Manager Asset Management Company Limited), the Asset Management Company

incorporated under the Companies Act, 1956, and registered with SEBIto act as an Investment Manager for the schemes of Prudential ICICIMutual Fund

Applicable NAV The NAV applicable for purchases/ redemptions, based on the time of theBusiness Day on which the application is accepted.

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

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

Custodian Deutsche Bank AG Custodial Services Mumbai, acting as Custodian tothe Scheme, or any other custodian who is approved by the Trustee.

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 ManagementCompany Limited) as amended from time to time.

S & P CNX Nifty or Nifty The Index comprising of, at present, fifty equity securities, the compositionand the criteria of which are determined by the India Index Services Ltd.from time to time.

NAV Net Asset Value of the Units of the Scheme and the Plans and Optionstherein, calculated on every Business Day in the manner provided in thisOffer Document or as may be prescribed by Regulations from time totime.

NRI Non-Resident Indian.

Offer Document This document issued by Prudential ICICI Mutual Fund, offering Units ofPrudential ICICI Index Fund.

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.

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.

Prudential ICICI Index Fund Prudential ICICI Index Fund and options offered thereunder. S&P CNXThe Index Fund / The Scheme Nifty as comprised in this document is construed as a distinct scheme

under the Regulations. Accordingly, the words “the Scheme” and “thePlan” unless repugnant to the context shall mean the same and are interchangeable.


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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 inname to 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.

Tracking Error The extent to which the NAV of the Scheme moves in a manner inconsistentwith the movements of the Nifty on any given day or over any givenperiod of time arising from any cause or reason whatsoever including butnot limited to differences in the weightage of the investments in thesecurities and the weightage to such securities in the Nifty and the timelags in deployment or realisation of funds under the Scheme as comparedto the movement of or within the Nifty. Tracking error will also be influencedby the market liquidity, cost of trading, management and other expensesetc.

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

Unitholder A holder of Units in the Scheme of Prudential ICICI Index Fund and Optionsoffered under the Fund, as contained in this Offer Document.


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SUMMARY – PRUDENTIAL ICICI INDEX FUND

Name of the Scheme Prudential ICICI Index Fund

Structure Open-ended Index fund.

Offer Price for on-going subscriptions Based on the Applicable NAV of the Scheme, subject to entry loadprovisions, if any.

Features / Investment Objectives An open-ended index linked growth scheme seeking to track the returnsof the S&P CNX Nifty through investments in a basket of stocks drawnfrom the constituents of the above index.

Application Amount Minimum Rs. 5,000 per application and additional amounts in multiplesof Rs.1,000 thereafter.

Initial Issue Expenses The Initial Issue Expenses under the Scheme were limited to 1.50% of theinitial corpus mobilised under the Scheme.

Liquidity On an on-going basis, an investor can purchase and redeem Units onevery Business Day at NAV based prices, subject to the prevailing loadstructure. For the present, the Trustee does not intend to charge any entryload. (Please refer to page 49 for Exit Load, page 46 for Redemption Priceand page 43 for Purchase Price).

The Units of the Scheme will not be listed on any exchange.

The Fund will, under normal circumstances, endeavor to dispatch theredemption cheques within 5 Business Days from the date of acceptanceof the redemption request at any of the Customer Service Centers. It maybe noted that this provision is based on the proposed settlement cycle ofthe Principal Stock Exchange(s) which is on T+2 days. Trustees reserve theright to alter or modify the number of days taken for redemption of Unitsunder the Fund after taking into consideration the actual settlementcycle, when announced, as also the changes in the settlement cycles thatmay be announced by the Principal Stock Exchanges from time to time.Please refer to Page 46 for details of Redemption.

Transparency NAV will be determined on every Business Day, except in specialcircumstances described on page 45. NAV of the Scheme 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 updatedon AMC’s website (www.pruicici.com).

AMC shall update the NAVs on the website of Association of MutualFunds in India - AMFI (www.amfiindia.com) by 8.00-p.m. everyday. In caseof any delay, the reasons for such delay would be explained to AMFI andSEBI 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 Fundwould be able to publish the NAVs.

The Mutual Fund shall disclose the full portfolio of the Scheme every halfyear.

Repatriation facility NRIs and FIIs may invest in the Scheme on a full repatriation basis as perRBI notification no.FERA/195/99-RB dated March 30, 1999 and NoFERA.212/99-RB dated October 18,1999. For the purpose of therepatriation on redemption would be applicable only to NRIs/ PIOs.

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.


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

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

A) SPONSORS

Prudential plc (formerly known as Prudential Corporation plc)

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

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

(Rs. crores)

Description 2003 2002 2001 2000

(Half year (Year ended (Year ended (Year endedended June 30) December 31) December 31) December 31)

Unaudited

Total Income 135,815 264,179 197,062 138,988

Profit Before Tax 1,498 3,718 2,958 7,275

Profit After Tax 1,068 3,449 2,988 5,093

Shareholders’ Funds 28,169 28,177 30,343 30,881

Earnings per share (Rs.) 4.84 12.14 17.90 23.20

Equity Capital (5 Pence per share) 768 768 768 761

Free Reserves 27,401 27,409 29,575 30,121

Net-worth 28,169 28,177 30,343 30,881

Book Value per share (Rs.) 140.85 140.89 151.72 154.41

Percentage of dividend per share 106% 520% 508% 490%

Dividend per share (in Pence) 5.3P 26.00P 25.4P 24.5P(Interim Only)

ICICI Bank Limited

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

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

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


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

Description Year ended Year ended *Year ended Half Year endedMarch 31, March 31, March 31, September 30,

2001 2002 2003 2003

Total Income 1462.13 2726.59 12,526.88 5,950.58Profit After Tax 161.09 258.3 1,206.18 741.60Free Reserves @ 1092.26 5632.41 6,320.65 7,069.31Net Worth 1302.43 6244.96 6933.31 7,682.67Earnings per Share (Rs.) (diluted) 8.13 11.61 19.65 12.05Book Value per Share (Rs.) 59.11 101.95 113.10 125.20Dividend 20% 20% 75% NilPaid Up Capital (Equity) $ 220.36 612.55 612.66 613.36(Preference) # 0 350 350 350

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

@ Excludes revaluation reserve$ Includes in 2002, Rs. 392.67 crores for shares to be issued to shareholders of ICICI Limited on amalgamation, further,

during the year ended March 31, 2003, the Bank allotted 3,000 shares pursuant to exercise of employee stock options.# Represents in 2002, face value of 350 preference shares to be issued to shareholders of ICICI Ltd on amalgamation,

redeemable at par on April 20, 2018. As per the notification received from Ministry of Finance, the restriction of section12(1) of the Banking Regulation Act, 1949, prohibiting banks established after 1944 from holding preference shares, isnot applicable to the Bank for a specified period.

Prudential plc of UK, through its wholly owned subsidiary, Prudential Corporation Holdings Limited, has been issued andallotted shares aggregating 55% stake in the share capital of Prudential ICICI Asset Management Company Limited (AMC),whereas the balance 45% shareholding in the AMC is being held ICICI Group. Out of the total 45% of the paid-up capital of theAMC 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. ICICIVenture Funds Management Company Limited, in order to ensure adherence with the provisions of Section 19(2) of the BankingRegulation Act, 1949.

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

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

i) The Directors of the Trustee Company are:

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

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


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

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

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

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

Mr. Nagesh D. Pinge* Nominee Director (on behalf of(S/o. Dinkar Shripad Pinge) ICICI Bank Limited)8.i. D-408/1, Viman Darshan Jindal Vijaynagar Steel Co. Ltd.28-29 Swami Nityanand Marg Jindal Thermal Power Co. Ltd.Andheri (East) SWIL LimitedMumbai 400069 Videocon International Ltd.General Manager –Risk, Compliance and The India Cements LimitedAudit 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 ServicesMumbai 400 056 Pvt. Ltd.Consultant ICICI Prudential Life Insurance Company Ltd.

Prudential Process Management Services Pvt. Ltd.

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


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

Pursuant to the Deed of Trust dated August 25, 1993 constituting the Mutual Fund and in terms of the Regulations therights and 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 and submitted to the Trustee their bio-datawhich shall contain the educational qualifications, past experience in the securities market within fifteen days oftheir appointment;

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

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 and designed internal control mechanisms including internal audit systems and

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 dealtwith any of the associates of the AMC in any manner detrimental to the interests of the Unitholders.

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

6. The Trustee is required to ensure that the AMC has been managing the Scheme independently of other activities and hastaken adequate steps to ensure that the interest of Investors under the Scheme are not compromised with those of anyother Scheme or of other activities of the AMC.

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

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

9. Each Director of the Trustee is required to file with the Trust the details of his securities transactions 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 of the Schemeand to hold the same in trust for the benefit of the Unitholders in accordance with the Regulations and the provisions ofthe Trust Deed.

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

viii. Principal underwriting contracts and renewals

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

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

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

During the period from April 1, 2002 to December 31, 2003, nine meetings of the Directors of the Trustee were held.The Trustee’s supervisory role is discharged by reviewing the information and the operations of the Fund based on reportssubmitted at the Board Meetings of the Trustee, by reviewing the reports being submitted by the Internal Auditor andthe bi-monthly, quarterly and half-yearly compliance reports. The Trustee also conducts a detailed review of the half-yearly and annual accounts of the schemes of the Fund and discusses the matters arising there from with the StatutoryAuditors of the Fund.

iii) Trusteeship Fees

Pursuant to the Deed of Trust constituting the Fund, the Fund is authorised to pay the Trustee a fee for its services insuch capacity of a sum, presently computed at the rate of up to 0.05% of the amount, being the aggregate of the TrustFund and Unit Capital of all the schemes put together on April 1 of each year or a sum of Rs.5 lacs, whichever is higher.The Trustee may charge further fees as permitted from time to time under the Trust Deed and the Regulations.

SEBI has, in terms of its letter No.MFD/LV/059/00 dated January 31, 2000 approved an amendment to Trust Deed. Theamendment authorizes the Trustee to decide upon the Trusteeship Fee to be charged from the Mutual Fund at the


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beginning of each financial year (April 1 to March 31), subject to the maximum limit of 0.05% to be arrived at as indicatedabove. The amendment does not in any way, adversely impact or alter the interests of Unitholders under the existingschemes of the Fund.

c) MANAGEMENT OF ASSET MANAGEMENT COMPANY (AMC)

ICICI Asset Management Company Limited (I-AMC), a company registered under the Companies Act, 1956, was establishedby ICICI (now ICICI Bank Ltd) as its wholly owned subsidiary, to act as the Investment Manager of the ICICI Mutual Fundvide the Investment Management Agreement dated September 3, 1993. Consequent to a review of long-term businessstrategy of the AMC, it was decided to further strengthen commitment to the individual investor segment. As a part ofthis plan, Prudential plc. (formerly known as Prudential Corporation plc.) of the UK (Prudential) was inducted as the newjoint 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 of the AMC held by the ICICI Group, 30% is held by ICICI Bank and the balance 15% is held by a subsidiaryof ICICI Bank Ltd. viz. ICICI Venture Funds Management Company Limited, in order to ensure adherence with the provisionsof Section 19(2) of the Banking Regulation Act, 1949.

I-AMC was approved by SEBI to act as the Investment Manager of ICICI Mutual Fund vide its letter No.IIMARP/MF/22356dated October 12, 1993. Consequent to the restructuring of shareholding pattern as stated above, SEBI vide its letterNo.IIMARP\631\98 dated March 11, 1998 accorded its approval for the induction of Prudential plc (through its whollyown subsidiary, Prudential Corporation Holdings Limited) as a shareholder of the AMC. The AMC has applied and securedapproval from the Registrar of Companies, Delhi and Haryana, for its change of name to Prudential ICICI Asset ManagementCompany Limited, vide letter No.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 accordancewith the provisions of Investment Management Agreement, the Trust Deed, the Regulations and the objectives of eachof the schemes.

AMC has obtained registration from SEBI vide Registration No.INP000000373 dated February 29, 2000 read with arenewed certificate 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 itsno objection for the AMC undertaking PMS activities subject to the AMC complying with the requirements as envisagedin Regulation 24(2) of SEBI (Mutual Funds) Regulations, 1996. The AMC has commenced the Portfolio Managementactivities, after complying with the regulatory requirements.

i) Board of Directors of the AMC

Mr. Ajay SrinivasanPrudential Corporation Asia, Suites 2910-14, Two Pacific Place, 88, Queensway, Hongkong.

Mr. Srinivasan is the Managing Director of Prudential Corporation Asia responsible for its mutual funds business in Asia effectivefirst week of January 2001. 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 and itsday-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 several projectsin various sectors.

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

Mr. Ananda Mukerji301, Radhika Apartments, Off. Sayani Road, Prabhadevi, Mumbai 400 025

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


21

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.

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, 1

st Floor, Shiv Shanti Bhuvan, 146 M Karve Road, (opp. The Oval Maidan), 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, 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 was responsiblefor managing LIC’s portfolio comprising a variety of investments. Subsequent to his retirement, till May 1999, he functioned asthe 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&FSEducation & Technology Service Ltd., an initiative of IL&FS.

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

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.


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Mr. Shailendra BhandariQuest End, 3rd Floor, 47, Cuffe Parade, Mumbai - 400 005

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

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

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

ii) Powers, Duties and Responsibilities of the AMC

The duties and responsibilities of the AMC shall be governed by the Regulations and the Investment 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, unquoted debt instruments, securitised debtsand other forms of variable securities 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 and demandsof the Trust;

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

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

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

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

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

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

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 thesame services.

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 investmentmanagement fee at 1.25% per annum of the average net assets for a corpus up to Rs.100 crores and at 1.00% perannum for the corpus amount in excess of Rs.100 crores.


23

ii) Key Employees of the AMC and relevant experience

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

& Nature of Experience

Mr. Shailendra Bhandari 44 Managing Director Post Graduate Diploma Over 22 years of Managing Directorin Management, Indian experience in the areas Prudential ICICI AMC –Institute of Management, of Treasury, Risk from December 2000Ahmedabad, Bachelor of Management, Operations, till date.Arts- Economics, Technology, and BusinessSt. Stephen’s College, Development December 1999 to NovemberUniversity of Delhi, 2000 IT Consultancy in the

field of Finance & Banking atAuckland, New Zealand.

September 1994 - Nov.1999- Treasurer & ExecutiveDirector - Head Of CapitalMarkets of HDFC Bank Ltd.,Mumbai, India

May 1992 - Aug 1994: ChiefExecutive of Citicorp Securities& Investments Ltd. in Mumbai

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

Prudential ICICI AMC - 2000onwards.

Vice President - West & NorthZone Prudential ICICI AMC -1999 – 2000.

Head -Distribution -KarvySecurities Limited - 1997 –1998.

Marketing Manager - HMGFinancial Services Limited -1992 – 1993.

Graduate Engineer Trainee /Design Engineer – Nelco Ltd.1992.

Mr. Dileep Madgavkar 40 Chief Investment Associate of Institute Over 15 years of Chief Investment Officer –Officer of Chartered experience in treasury Prudential ICICI AMC - 1998

Accountants of India, and fund management. to date.B.Com (Hons.)

Financial Analyst & Consultant- 1993 to 1998.

Manager Equities & PMS –ANZ Grindlays Bank -1989 – 1993.

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

Management) Resources Management Resources Prudential ICICIAMC - 2000 to date.General Manager - HumanResources - Owens CornningIndia Limited - 1998 – 2000.General Manager HumanResources – DCW HomeProducts - 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.


24

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

Information Technology AMC June 2001 onwards.Birla Global – Assistant VicePresident from Feb’97 to April,2001.DGP Windsor India Ltd. –Manager from Sept ’94 toJan’97.Universal Luggage Mfg. Co.Ltd. - Asst. Manager fromNov’90 to Sept’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 38 Vice President – Associate - Institute Over 14 yrs of Vice President – Finance,Finance Legal, of Company Secretaries experience in Compliance Legal, Compliance andCompliance and of India. and Company Secretarial Company Secretary,Company Secretary Bachelors Degree functions Prudential ICICI AMC Jan 14,

(General Laws), PGDCP 02 onwards.

Head CorporateCommunication and CompanySecretary - IDBI Bank June1997 to 12

th Jan 2002

Chief Manager MerchantBanking and CompanySecretary - Karnataka BankLtd. from 1992-97Company Secretary LakshmiMotor Credit (Now TVSFinance) 1989-92

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

B. Tech. (Electrical) AMC Limitedfrom IIT, Powai April 2001 - May 2002

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

Mr. R. Murali Krishnan 42 Fund Manager ACS, CAIIB, PGDPM & Over 10 years of Fund Manager – PrudentialIR, B.Com. experience in Investment ICICI AMC - 1998 to date.

Management Sr. Research Analyst ICICIAMC 1995 – 1998.Research Analyst ICICI AMC1993 - 1995.Research Analyst – CanbankMutual Fund 1991 –1993.


25

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

Management AMC - 1999 to date.Manager – Investments -Prudential ICICI AMC - 1999.Dealer - Prudential ICICI AMC- 1998 – 1999.Assistant Manager - ICICI AMC- 1993 – 1998.Manager Sound CraftMarketing - 1992 – 1993.Dealer – Treasury Tata FinanceLimited - 1992.Executive – GrowmoreResearch & Assets - 1990 –1992.

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

Vice President – Equity Sales -Dresdner Klienwort BensonIndia - 1997 – 1999.Research Analyst – UTISecurities Exchange Limited -1995 – 1997.Executive Infar India Limited -1993 – 1995.

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

Limited - 1997 – 2000.

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

MS (University of to date.Southern California), Manager – Rating (BusinessB. Tech. (IIT Madras). Development & Marketing)

Crisil - 1995 – 2001Marketing Executive -VikramIspat - 1994 – 1995.

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

Mr. Chaitanya Pande 31 Fund Manager PGDM from IMI, 7 yrs 5 Months Sept 16th 2002 till date – FundNew Delhi, Manager - Fund Manager – Prudential ICICIBSc from St. Stephens Management AMC LimitedCollege, New Delhi Jan 2000 to Sep 2002

Manager – Fund ManagementJF Asset Management (India)Pvt. LimitedMay 1995 to Jan 2000Investment AnalystJF Asset Management (India)Pvt. Limited

Mr. Chandresh Nigam 35 Senior Fund Manager B TECH, PGDM, 12 Yrs. – Fund Prudential ICICI AssetAISSCE Management Management From July 2003

till date Senior Fund ManagerZurich Asset managementApril 1993-June 2003 SeniorFund Manager/Fund MangerSBI Capital Markets LimitedMay 1991-April 1993Dy. Manager

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

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


26

vi) Fund Manager :

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

Scheme Name Fund Manager Qualification Experience

Prudential ICICI Index Fund Mr. Dileep Madgavkar Associate of Institute of Over 15 years of experience inChartered Accountants treasury and fund management.B.Com (Hons.) (Cal. Univ.)

v) Compliance Officer

The Compliance Officer for the Fund is:Mr. Ranganath Athreya - Vice President Legal, Compliance and Company SecretaryPrudential ICICI Asset Management Company Ltd.Contractor Building, 3

rd Floor

41, R.Kamani Marg,Mumbai 400 038

vi) Investor Relations Officer

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

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

Citibank N.A., Ramnord House, 1st & 2

nd floor, 77 Dr. Annie Besant Road, Worli, Mumbai 400 018 (Citibank N.A.) have

been appointed as Registrar for the Scheme. The Registrar is registered with SEBI under registration No: INR000003852.As Registrar to the Scheme, Citibank N.A., will handle communications with investors, perform data entry services anddispatch Account Statements. The AMC and the Trustee have satisfied themselves that the Registrar can provide theservices required and have adequate facilities and the system capabilities.

f) Custodian

Deutsche Bank AG, Custodial Services, Mumbai has been appointed as Custodian for the Scheme mentioned in the OfferDocument. The Custodian has been registered with SEBI and has been awarded registration No.IN/CUS/003 dated March20, 1998. The Trustees have entered into a Custodian Agreement with the Custodian and the salient features of the saidAgreement would 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.

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

(h) 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.


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SECTION II

INVESTMENT OBJECTIVES & POLICIES

FUNDAMENTAL ATTRIBUTES OF THE SCHEME

a) Type of the Scheme

An open-ended index linked growth scheme seeking to track the returns of the S&P CNX Nifty index through investmentin a basket of stocks drawn from the constituents of the Nifty.

b) Investment Objective

Presently, the Scheme has one plan viz. the Nifty Plan.

The Nifty Plan:

The objective of the Plan is to invest in companies whose securities are included in Nifty and subject to tracking errors, toendeavor to achieve the returns of the above index as closely as possible. This would be done by investing in almost allthe stocks comprising the S&P CNX Nifty in approximately the same weightage that they represent in S&P CNX Nifty. ThePlan will not seek to outperform the S&P CNX Nifty or to under perform it. The objective is that the performance of theNAV of the Plan should closely track the performance of the S&P CNX Nifty over the same period.

c) Investment Pattern

The Nifty Plan:

The corpus of the Plan will be invested predominantly in stocks constituting the S&P CNX Nifty and in exchange tradedderivatives on the S&P CNX and subject to tracking errors and endeavouring to attain returns comparable with S&P CNXNifty Index. This would be done by investing in almost all the stocks comprising the S&P CNX Nifty in approximately inthe same weightage that they represent in the S&P CNX Nifty index. A very small portion of the fund will be kept liquidand will be invested in:

1) Liquid money market instruments permitted by SEBI/RBI, having maturities of up to one year, in call money market orin alternative investment for the call money market as may be provided by the RBI to meet the liquidity requirements

2) Certificate of Deposits (CDs)

3) Commercial Paper (CPs)

4) Any other domestic fixed income securities

The Plan may also enter into repurchase and reverse repurchases obligations in all securities held by it as per the guidelinesand regulations applicable to such transactions. Further the Plan intends to participate in securities lending as permittedunder the Regulations.

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

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

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

The Nifty Plan:

Sr. Type of Security Approximate Maximum Minimum Risk ProfileNo. Allocation (% of Allocation Allocation

Corpus) undernormalcircumstances.

1 Equity Stocks drawn from the 99.75% 100% 90% Highcomponents of the S&P CNXNifty and the exchange-tradedderivatives on the S&P CNX Nifty

2 Money market instruments 0.25% 10% 0% Medium to high

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

d) Change in Investment Pattern

As an index linked scheme, the policy is passive management. However, as elsewhere stated in this offer document theinvestment pattern is indicative and may change for short duration. In the event the S&P CNX Nifty, as the case may be, is


28

dissolved or is withdrawn by IISL, respectively or is not published due to any reason whatsoever, the Trustee reserves theright to modify the Scheme so as track a different and suitable index or to suspend tracking the Nifty and appropriateintimation will be sent to the Unitholders of the Scheme. In such a case, the investment pattern will be modified suitablyto match the composition of the securities that are included in the new index to be tracked and the Scheme will besubject to tracking errors during the intervening period.

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 substantiallywithin the maximum and minimum allocation limits, depending upon the perception of the Investment Manager, theintention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment patternwill 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 theScheme shall be effected only in accordance with the provisions of sub regulation (15A) of Regulation 18 of the Regulations,as detailed later in this document.

e) Tracking Error

The performance of the Scheme may not be commensurate with the performance of the Nifty on any given day or overany given period. Such variations are commonly referred to as the tracking error. Tracking errors as defined elsewhere inthis offer document may result from a variety of factors including but not limited to :

� any delay experienced in the purchase or sale of shares due to illiquidity of the market, settlement and realisation ofsale proceeds and the registration of any securities transferred and any delays in receiving cash and scrip dividendsand resulting delays in reinvesting them.

� the Nifty reflect the prices of securities at close of business hours. However, the Fund may buy or sell the securities atdifferent points of time during the trading session at the then prevailing prices which may not correspond to theclosing prices on the NSE.

� IISL in case of the Nifty undertake the periodical review of the scrips that comprise the Nifty respectively and mayeither drop or include new securities. In such an event, the Fund will endeavour to reallocate its portfolio but theavailable investment/ disinvestment opportunities may not permit precise mirroring of the Nifty immediately.

� the potential for trades to fail which may result in the Scheme not having acquired shares at a price necessary totrack the index.

� the holding of a cash position and accrued income prior to distribution and accrued expenses.

� Disinvestments to meet redemptions, recurring expenses, dividend payouts etc.

Under normal circumstances, such tracking errors are not expected to exceed 2% per annum. However, thismay vary when the markets are very volatile.

f) Trading in Derivatives

The Scheme may use derivatives instruments like Stock Index Futures, stock options, stock futures, option contracts,warrants, convertible securities, swap agreements or such other derivative instruments as may be introduced from timeto time for the purpose of hedging and portfolio balancing and as may be permitted under the Regulations and guidelines,and such investments shall be in accordance with the investment objectives of the Scheme.

The Scheme shall under normal circumstances have exposure upto 99.75% of the corpus of the Scheme in the EquityStocks drawn from the components of the S&P CNX Nifty and the exchange-traded derivatives of the S&P CNX Nifty.

Index futures are meant to be an efficient way of buying / selling an index compared to buying/selling a portfolio ofphysical shares representing an index for ease of execution and settlement. Index futures can be an efficient way ofachieving the Scheme’s investment objectives. Notwithstanding the pricing, they can help in reducing the tracking errorin the Scheme. Index futures may avoid the need for trading in individual components of the Index, which may not bepossible at times in keeping in mind the circuit filter system (currently in existence) and the liquidity in some of the scrips.Index futures can also be helpful in reducing the transaction cost and the processing cost on account of ease of executionof one trade compared to several trades of shares of Nifty and will be easy to settle compared to physical portfolio ofshares representing an Index. Based on the future Regulations, the Trustee may allow the Scheme to put 100% of theScheme’s assets in the Index futures keeping in mind the liquidity risks and the settlement risk.

In case of investments in Index futures the risk/ reward would be the same as investments portfolio of shares representingan Index. However there is a cost attached to buying an Index future. There could be an element of settlement risk. Thissettlement risk in case of derivatives is minimised since the Exchange acts as the Clearing Corporation and the Counterpartyas is the practice in the developed markets. However there is the risk attached to the liquidity and the depth of the indexfutures market as it is relatively new market.

Advantages of Derivatives:

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


29

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.

Basic Structure of a Stock Index Future

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

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

On Date of settlementFuture price = Closing spot price = 4950

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

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

The net impact for the Fund will be in terms of the difference between the closing price of the index and cost price(ignoring margins for the sake of simplicity). Thus, it is clear from the example that the profit or loss for the Fund will be thedifference of the closing price (which can be higher or lower than the purchase price) and the purchase price. The risks associatedwith index 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.

Risks attached with the use of derivatives:

As and when the Scheme trades in the derivatives market there are risk factors and issues concerning the use of derivatives thatinvestors should understand. Derivative products are specialized instruments that require investment techniques and risk analysesdifferent from those associated with stocks and bonds. The use of a derivative requires an understanding not only of theunderlying instrument but of the derivative itself. Derivatives require the maintenance of adequate controls to monitor thetransactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price orinterest rate movements correctly. There could be an element of settlement risk. This settlement risk in case of derivatives isminimised since the Exchange acts as the Clearing Corporation and the Counterparty as is the practice in the developed markets.However there is the risk attached to the liquidity and the depth of the index futures market as it is relatively new market.

Other risks in using derivatives include the risk of mis-pricing or improper valuation of derivatives and the inability of derivativesto correlate perfectly with underlying assets, rates and indices. Derivatives are highly leveraged instruments. Even a small pricemovement in the underlying security could have a large impact on their value. Also, the market for derivative instruments isnascent in India.

g) Terms of the Scheme :

1. Liquidity

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

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 investor at the time of closure of account, even though suchredemption is for less than Rs.1000.

b) Redemption Price

The redemption will be at Applicable NAV based prices. Please refer to “Redemption Price” on page 46.

c) Payment of Proceeds

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

As per the Regulations, the Fund shall despatch redemption proceeds within 10 Business Days (working days) of receivingthe redemption request. However, under normal circumstances, the Fund will endeavour to despatch the redemptionproceeds within 5 Business Days of acceptance of the redemption request. Investors should note that it is the intention


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of the Fund to dispatch the redemption proceeds within 5 Business (working) Days and the Fund / AMC do not guaranteethe same. It may be noted that this provision is based on the settlement cycle of the Principal Stock Exchange(s) which ison T+2 days. Trustees reserve the right to alter or modify the number of days taken for redemption of Units under theFund after taking 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. Please refer to page 71 for details ofRedemption.

As per the guidelines issued by SEBI, in the event of failure to dispatch the redemption or repurchase proceeds within 10working days, the AMC is liable to pay interest to the Unit holders @ 15% p.a. SEBI has further advised the mutual fundsthat in the event of payment of interest to the Unit holders, such Unit holders should be informed about the rate andthe amount of interest paid to them.

Listing

Being an open ended Scheme, the Units of the Scheme will not be listed on any stock exchange. The Trustee may, at itssole discretion, cause the Units under the Scheme listed on one or more Stock Exchanges. Notification of the same willbe made through Customer Service Centres of the AMC and as may be required by the respective Stock Exchanges.

2. Fees and Expenses

a. Initial issue expenses

The Initial Issue Expenses to be charged under the Scheme were limited to 1.50% of the initial corpus mobilisedunder the Scheme. Under the Regulations, the Fund is entitled to charge Initial Issue Expenses up to a maximum of6% of initial resources raised under the Scheme.

b. Recurring Expenses

The details of recurring expenses, on an annual basis, have been stated on Page 49. As per the Regulations, themaximum recurring expenses that can be charged to the Scheme shall be subject to a percentage limit of weekly netassets as in the table below:

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

2.50% p.a. 2.25% p.a. 2.00% p.a. 1.75% p.a.

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

3. Load

Entry Load

For the present, the Trustee does not intend to charge any entry load.

Exit Load

Unitholder will, however, pay an exit load depending on the period of their investment in the scheme as follows:

1) For investments of Rs.5,00,000 and less: Exit load of 0.50% of applicable NAV in case the amount sought to beredeemed is not being invested under the Nifty Plan for a minimum period of 1 year.

2) For investments of over Rs. 5,00,000: Exit load is Nil.

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decide tointroduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changes willbe applicable for prospective investments. The Trustee shall arrange to display a notice in the Customer ServiceCenters of the AMC at least 10 days before the change of the then prevalent load structure. The addendumdetailing the changes in load structure will be attached to offer documents and abridged offer documents. Theaddendum will also be circulated to all the distributors / brokers so the same can be attached to all the offerdocuments and abridged offer documents in stock. This addendum will also be sent along with the newsletterto the unitholders immediately after the changes. Changes in the load structure may be stamped in theacknowledgement slip issued by the Fund and may also be disclosed in the statement of accounts issued afterthe changes in load structure. The load collected from the Unitholders under each Plans will be credited to aseparate account in the respective Plans 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 be creditedto the respective Plans whenever felt appropriate by the AMC.

h) Changes in Fundamental Attributes:

The Trustees shall ensure that no change in the fundamental attributes of any scheme or the trust or fee and expensespayable or any other change which would modify the scheme and affects the interests of unit holders is carried outunless:

� a written communication about the proposed change is sent to each unitholder and an advertisement is given inone English daily newspaper having nationwide circulation as well as in a newspaper published in the language ofthe 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.


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i) Investment Strategy

a) Equities:

The corpus of the Scheme will be invested predominantly in stocks constituting the S&P CNX Nifty and in exchangetraded derivatives on the S&P CNX Nifty Index. A very small portion of the fund will be kept liquid.

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

The Plans may invest in other index funds managed by the AMC or in the index schemes of any other Mutual Funds,provided it is in 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.

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

b) Fixed Income securities:

The AMC aims to identify securities that offer superior levels of yield at lower levels of risks. With the aim of controllingrisks, rigorous in depth credit evaluation of the securities proposed to be invested in will be carried out by theinvestment 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.

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 thesame.

j) Portfolio Turnover

As this Scheme will follow a passive investment strategy, the endeavour will be to minimise portfolio turnover subject tothe exigencies and needs of the Scheme. Generally, turnover will be confined to rebalancing of portfolio on account ofnew subscriptions, redemptions and change in the composition of S&P CNX Nifty.

The portfolio turnover is defined as the lesser of assets purchased or sold divided by the Fund’s net assets.

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 thatthe investments are made as per the internal/Regulatory guidelines, Scheme investment objectives and in the bestinterest of the unitholders of the respective schemes.

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

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 appropriatebenchmarks as also the performance of the schemes of the competition.

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

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

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 aremade, 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’scircular no. MFD/CIR/ 6 / 73 /2000 dated July 27, 2000.

F. The Chief Executive Officer of the AMC shall ensure that the mutual fund complies with all the provisions of SEBI


32

(Mutual Fund) Regulations, 1996, as amended from time to time, including all guidelines, circulars issued in relationthereto from time to time and that the investments made by the fund managers are in the interest of the unitholders and shall also be responsible for the overall risk management function of the mutual fund.

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

l) Risk Factors and special considerations:

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

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

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

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

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

� The NAVs of Prudential ICICI Index Fund may be affected by changes in the general market conditions, factors andforces affecting capital market in particular, level of interest rates, various market related factors and trading volumes,settlement periods and transfer procedures.

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

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

Investing in the Plans involves certain risks and considerations associated generally with making investments insecurities. There can be no assurance that the Plans will achieve their objectives. The value of the Plans’ investmentsmay be affected by factors affecting capital market generally, such as price and volume volatility in the fixed incomeand stock markets, interest rates, currency exchange rates, foreign investment, changes in government policy, taxation,political, economic or other developments and closure of the stock exchanges. Consequently, the Net Asset Value ofthe Plans may fluctuate, and the value of the Plans’ Units may go up or down. Past performance of mutual fundsmanaged by the Sponsor and its affiliates is not necessarily indicative of future performance of the Plan’sunits. Therecan be no assurance that the Plans’ investment objectives will be achieved.


� From time to time and subject to the Regulations, the Sponsors, the mutual funds and investment companiesmanaged by them, their affiliates, their associate companies, subsidiaries of the sponsors and the AMC may investeither directly or indirectly in the Scheme. The funds managed by these affiliates, associates, the Sponsors, subsidiariesof the Sponsors and/or the AMC may acquire a substantial portion of the Scheme’s Units and collectively constitutea major investor in the Scheme. Accordingly, redemption of Units held by such funds, affiliates/associates and Sponsorsmay have an adverse impact on the Units of the Scheme because the timing of such redemption may impact theability of the other Unitholders to redeem their Units.Changes in Government policy in general and changes in taxbenefits applicable to mutual funds may impact the returns to investors in the Scheme.

The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds,provided it is in 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.

� As per SEBI circular dated December 12, 2003 ref SEBI/IMD/CIR No. 10/22701/03, each scheme and individual plan(s)under the schemes should have a minimum of 20 investors and no single investor should account for more than25% of the corpus of such scheme/plan(s). In case of non-fulfillment with either of the above two conditions in athree months time period or the end of succeeding calendar quarter, whichever is earlier, from the close of the InitialPublic Offering (IPO) of open ended schemes or on an ongoing basis for each calendar quarter, the schemes /plansshall be wound up by following the guidelines prescribed by SEBI and the investor’s money would be redeemed atapplicable NAV.

� The Fund may use derivative instruments like Stock Index Futures, stock options, stock futures, option contracts,warrants, convertible securities, swap agreements or other derivative instruments for the purpose of hedging and


33

portfolio balancing, as permitted under the Regulations and guidelines. Usage of derivatives will expose the Schemeto certain risks inherent to such derivatives. Please see Page 7 for the relevant Risk factors.

� The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, inthis case the approved intermediary, to comply with the terms of agreement entered into between the lender ofsecurities i.e. the Scheme and the approved intermediary. Such failure to comply can result in the possible loss ofrights in the collateral put up by the borrower of the securities, the inability of the approved intermediary to returnthe securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender fromthe securities deposited with the approved intermediary.

� The Scheme may also invest in ADRs / GDRs as permitted by Reserve Bank of India and Securities and ExchangeBoard of India. To the extent that some part of the assets of the Plans may be invested in securities denominated inforeign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affectedby the changes in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital alsomay be hampered by changes in regulations concerning exchange controls or political circumstances as well as theapplication to it of other restrictions on investment. For further details, please refer page 44.

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

� Risks attached with the use of derivatives:

As and when the Scheme trades in the derivatives market there are risk factors and issues concerning the use ofderivatives that investors should understand. Derivative products are specialized instruments that require investmenttechniques and risk analyses different from those associated with stocks and bonds. The use of a derivative requiresan understanding not only of the underlying instrument but of the derivative itself. Derivatives require the maintenanceof adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds tothe portfolio and the ability to forecast price or interest rate movements correctly. There could be an element ofsettlement risk. This settlement risk in case of derivatives is minimised since the Exchange acts as the ClearingCorporation and the Counterparty as is the practice in the developed markets. However there is the risk attached tothe liquidity and the depth of the index futures market as it is relatively new market.

Other risks in using derivatives include the risk of mis-pricing or improper valuation of derivatives and the inabilityof derivatives to correlate perfectly with underlying assets, rates and indices. Derivatives are highly leveragedinstruments. Even a small price movement in the underlying security could have a large impact on their value. Also,the market for derivative instruments is nascent in India.

� Risks associated with stock lending :

The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, inthis case the approved intermediary, to comply with the terms of agreement entered into between the lender ofsecurities i.e. the Scheme and the approved intermediary. Such failure to comply can result in the possible loss ofrights in the collateral put up by the borrower of the securities, the inability of the approved intermediary to returnthe securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender fromthe securities deposited with the approved intermediary.

Scheme Specific Risk Factors

� Performance of the S&P CNX Nifty will have a direct bearing on the performance of the Scheme. In the event the S&PCNX Nifty index is dissolved or is withdrawn, the Trustee reserves a right to modify the Scheme so as to track adifferent and suitable index and appropriate intimation will be sent to the unitholders of the Scheme.

� Tracking errors are inherent in any indexed fund and such errors may cause the Scheme to generate returns whichare not in line with the performance of the Nifty or one or more securities covered by / included in the Nifty/. Undernormal circumstances, such tracking errors are not expected to exceed 2% per annum. However, this mayvary when the markets are very volatile.

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

In the event the S&P CNX Nifty index as the case may be, is dissolved or is withdrawn by India Index Services&ProductsLimited (IISL or is not published due to any reason whatsoever, the Trustee reserves the right to modify the Schemeso as track a different and suitable index or to suspend tracking the Nifty till such time it is dissolved/ withdrawn ornot published and appropriate intimation will be sent to the Unitholders of the Scheme. In such a case, the investmentpattern will be modified suitably to match the composition of the securities that are included in the new index to betracked and the Scheme will be subject to tracking errors during the intervening period.

The Trustees have the right in their sole discretion, to limit redemptions under certain circumstances see Right to LimitRedemption on page 48.


34

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

The liquidity of the Scheme’s/Plans’ debt investments may be restricted by trading volumes. The inability to sell the moneymarket or debt securities held in the Scheme’s/Plans’ portfolio due to the absence of a well developed and liquid secondarymarket for such securities may result, at times, in losses to the Scheme, in case of a subsequent decline in the value ofsuch securities.

m) Investment Restrictions for the Scheme

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

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

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

3) 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 shallhave the 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.

4) 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 schemesunder management of any other asset management company shall not exceed 5% of the Net Asset Value of theFund.

5) 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.

6) The Fund may buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery ofrelative securities and in all cases of sale, deliver the securities and will not make any short sales or engage in carryforward transaction or badla finance. Provided that mutual funds shall enter into derivatives transactions in arecognised stock exchange for the purpose of hedging and portfolio balancing, in accordance with the guidelinesissued by SEBI.

7) 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 securitized debt.

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

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

10) No mutual fund scheme shall make any investments in ;

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

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

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

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

12) 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. Such borrowings shall not exceed more than 20% of the net assets ofthe individual scheme and the duration of the borrowing shall not exceed a period of 6 months.

13) Investments by index funds shall be in accordance with the weightage of the scrips in the specific index.

14) Pending deployment of funds of a scheme in securities in terms of investment objectives of the Scheme, the AMCcan invest the funds of the Scheme in short term deposits of scheduled commercial banks or in call deposits.

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

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

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


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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 valuationnorms are 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 atthe last 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,the value at which it was traded on the selected stock exchange, as the case may be, on the earliest previous daymay be 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:

“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 athinly traded 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 thinlytraded. Also if the volume traded is 40,000, but the value of trades is Rs. 600,000, the share does not qualify asthinly traded.

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 daysprior to 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 of thevaluation principles laid down below:

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

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

(b) Net Worth per share = [share capital + reserves (excluding revaluation reserves) – Misc. expenditure and Debit Balancein 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 be followedconsistently and changes, if any noted with proper justification thereof) shall be taken and discounted by 75% i.e.only 25% of the Industry average P/E shall be taken as capitalisation rate (P/E ratio). Earnings per share of the latestaudited annual accounts will be considered for this purpose.


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(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 the year,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 beginning ofthe day plus the difference between the redemption value and the cost spread uniformly over the remaining maturityperiod of the instruments) a similar process should be adopted for non-traded debt securities with residual maturity ofupto 182 days, in the absence of any other standard benchmarks in the market. Debt securities purchased with residualmaturity of upto 182 days are to be valued at cost (including accrued interest till the beginning of the day) plus thedifference between the redemption value (inclusive of interest) and cost spread uniformly over the remaining maturityperiod of the instrument. In case of a debt security with maturity greater than 182 days at the time of purchase, the lastvaluation price plus accrued interest should be used instead of purchase cost. All other non traded Non Governmentdebt instruments shall be valued using the method suggested in (ii)(b).

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

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

� All Non Government investment grade debt securities, classified as not traded, shall be valued on yield to maturitybasis 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 theface value

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

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] dividedby 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 off ordeferred revenue expenditure, intangible assets and accumulated losses] divided by {Number of Paid up Sharesplus Number of Shares that would be obtained on conversion/exercise of Outstanding Warrants and Options}

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

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

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

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

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

ii. In case where the latest balance sheet of the company is not available within nine months from the close of theyear, 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.


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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 more than5% 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 at aprice 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% ofthe 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 the prescribedlimit of 15% in the following time frame:

(i) all the illiquid securities above 20% of total assets of the scheme shall be assigned zero value on September 30,2001.

(ii) All the illiquid securities above 15% of total assets of the scheme shall be assigned zero value on September 30,2002.

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

(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% and20% applicable to open-ended funds should be increased to 20% and 25% respectively.

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

v) Value of “Rights” entitlement

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

Vr = n/m x (Pex – P

of)

whereVr = Value of rightsn = no. of rights Offeredm = no. of original shares heldP

ex= Ex-Rights price

Pof

= Rights Offer price


38

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 this purpose,major expenses like management fees and other periodic expenses would be accrued on a day-to-day basis. The minorexpenses and income will be accrued on a periodic basis, provided the non daily accrual does not affect the NAVcalculations by more than 1%.

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 to timein 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 untraded investmentsprescribed in sub clauses (i) and (ii) of clause 2 of the Eighth Schedule to the Securities and Exchange Board of India(Mutual Funds) Regulations, 1996.

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

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

- Current Liabilities and ProvisionNAV (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.

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 toexplain its transactions and to disclose at any point of time the financial position of the Scheme and, in particular,give a true and 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 investmentsin the 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 thedate the share is quoted on an ex-dividend basis. For investments which are not quoted on the stock exchange,dividend income 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 theevent of a purchase, as of the date on which the Scheme obtains an enforceable obligation to pay the price or, inthe event of a sale, when the Scheme obtains an enforceable right to collect the proceeds of sale or an enforceableobligation to deliver 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


39

shall be recognized only when the original shares on which the right entitlement accrues are traded on the stockexchange on an ex-right basis.

h) Where income receivable on investments has been accrued and has not been received for a period of 12 monthsbeyond the due date, provision shall be made by debit to the revenue account for the income so accrued and nofurther accrual of income shall be made in respect of such investments.

i) When units are sold in the Scheme, an appropriate part of the sale proceeds shall be credited to an 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 netincome of 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 reservesand, 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.

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


40

SECTION III

UNITS & THE INITIAL OFFER

GENERAL INFORMATION

a) Minimum Subscription Amount

During the Initial Offer Period of Prudential ICICI Index Fund, minimum subscription amount prescribed in terms of theearlier offer document was Rs.1 crore and for details of the actual amount of collections during the initial offer periodplease refer page 40. There is no maximum amount in respect of the size of the Plans either during the Initial OfferPeriod or on ongoing basis.

b) Offer Price for on-going subscriptions:

The units of the Scheme are available for subscription at Applicable NAV based prices, subject to entry load provisions.

c) Minimum Amount for Application

The minimum application amount for the Scheme is:

Scheme Minimum Application Amount Additional amount in multiples of:

Prudential ICICI Index Fund Rs.5,000 Rs.1,000

d) Initial Issue Expenses

i) The initial issue expenses charged to the Scheme were limited to 1.50% of the initial corpus mobilised under theScheme during the Initial Offer Period. Expenses over and above this limit were borne by the AMC.

Category of expenses % to target mobilization

Advertisement, Marketing, Printing, Distributionexpenses and selling commission 1.25Collection and Registrar 0.10Bank charges & other expenses 0.15Total 1.50

The above percentages have been arrived at based on a target mobilization of Rs. 1 crore. The above estimates aresubject to change as per actuals.

(ii) Past Schemes

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

Name of the Scheme Date of launch Initial Issue Expensescharged to the Scheme

(as per the disclosuremade in the Offer

Documents)

Prudential ICICI Income Plan June 4, 1998 NilPrudential ICICI Growth Plan June 4, 1998 NilPrudential ICICI Liquid Plan June 4, 1998 NilPrudential ICICI FMCG Fund February 15, 1999 1%Prudential ICICI Tax Plan July 9, 1999 1%Prudential ICICI Gilt Fund July 21, 1999 NilPrudential ICICI Balanced Fund September 20, 1999 1%Prudential ICICI Technology Fund January 7, 2000 1.75%Prudential ICICI Monthly Income Plan September 28, 2000 NilPrudential ICICI Fixed Maturity Plan December 20, 2000 NilPrudential ICICI Gilt Treasury - 1 Year Plus Plan April 26, 2001 NilPrudential ICICI Child Care Plan July 16, 2001 Gift Plan : 2.50%

Study Plan: 1.50%Prudential ICICI Short Term Plan October 18, 2001 NilPrudential ICICI Index Fund February 15, 2002 1.50%Prudential ICICI Sweep Plan February 27, 2002 NilPrudential ICICI FMP Yearly- Series 5 March 22, 2002 Nil

Prudential ICICI Long Term Plan March 26, 2002 Nil

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


41

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

Prudential ICICI FMP One Year Plus Plan – Series 8 September 16, 2002 Nil

Prudential ICICI Flexible Income Plan September 16, 2002 Nil

Prudential ICICI Dynamic Plan October 7, 2002 2.50%*

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

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

Prudential ICICI Floating Rate Fund March 28, 2003 Nil

Prudential ICICI Flexible Income Plus Plan May 22, 2003 Nil

Prudential ICICI Deposit Plus NRI Series October 3, 2003 Nil

Prudential ICICI Gilt Fund Investment Plan – PF Option November 3, 2003 Nil

Prudential ICICI Advisor Series November 10, 2003 2.40%

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

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

(% of amount mobilized)

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

and GrowthPlans**

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

Marketing, promotion and advertisement 1.80 1.40 0.33 0.15 0.45 0.27

Brokerage and commission 0.09 0.93 1.06 0.02 1.01 1.49

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

Total 1.94 2.45 1.43 0.18 1.47 1.80


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

Plus Plan

Collections During

IPO

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

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

Brokerage and commission 0.08 - - 1.42 0.15 - 1.33

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

Total 1.82 0.005 0.006 13.91* 0.20 - 1.33


Category of Expenses Index Sweep Fixed Long Fixed FixedFund Plan** Maturity Term Maturity – Maturity –

Plan Plan** One Year One YearYearly Plus Plan Plus Plan

Series 5** Series 6** Series 7**

Collections During IPO(Rs in crores) 7.86 0.10 4.19 50.001 132.73 0.01

Marketing, promotion and advertisement 0.15 Nil Nil Nil Nil Nil

Brokerage and commission 0.13 Nil Nil Nil 0.23 Nil

Registrar, bank and professional charges 0.32 0.5 0.01 0.01 0.01 Nil

Total 0.6 0.5 0.01 0.01 0.24 Nil

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


42

Category of Expenses Fixed SPIcE** FMP Floating FlexibleMaturity One Year Rate Income

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

Series 8**

Collections During IPO (Rs in crores) 0.01 21.28 0.01 51.05 35Marketing, promotion and advertisement Nil Nil Nil Nil NilBrokerage and commission Nil Nil Nil Nil NilRegistrar, bank and professional charges Nil Nil Nil Nil NilTotal Nil Nil Nil Nil Nil

Category of Expenses Deposit Plus Deposit Plus Deposit Plus Gilt Fund AdvisorNRI Series 4- NRI Series 4- NRI Series 6 – Investment Series

Quarterly Half yearly Quarterly Plan –PF Option

Collections During IPO (Rs in crores) 8.86 63.52 7.32 57.86 310.62Marketing, promotion and advertisement Nil Nil Nil Nil 0.17Brokerage and commission Nil Nil Nil Nil 0.58Registrar, bank and professional charges Nil Nil Nil Nil 0.04Total Nil Nil Nil Nil 0.79

** Borne by the AMC.

e) 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.

f) Systematic Investment Plan (SIP)

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

The Unitholders opting for SIP may begin their investment with an amount of Rs.5,000 in the Scheme.

The Unitholders who wish to invest on a monthly basis can invest a minimum of Rs.1,000 or multiples thereof on amonthly basis by providing the Registrar with at least six post-dated cheques, for a block of 6 months in advance. Thecheques should be dated 7

th or the 10

th of the respective months.

The Unitholders wishing to invest on a quarterly basis must provide the Registrar or the Customer Service Centre with atleast 4 post-dated cheques dated 31

st March, 30

th June, 30

th September and 31

st December, for a minimum of Rs. 1,500

per cheque for a block of twelve months.

The cheques should be drawn in favour of “Prudential ICICI Index Fund” and crossed “Account Payee Only” and mustbe payable at the centre where the applications are submitted to the Customer Service Centre. Further, investors shouldnote that for cheques payable at places other than the locations where the Customer Service Centers of AMC are located,bank charges will have to be borne by the investor and Units will be allotted for the amount net of the bank charges. Onreceipt of the post-dated cheques, the Registrar will send a letter to the Unitholder confirming that his/her name hasbeen included in the Systematic Investment Plan. The cheques will be presented on the dates mentioned on the chequeand subject to realization, Units will be allotted at the Purchase Price on the date of receipt of advice about the netrealization amount of the cheque. Within 5 Business Days of such allotment, a fresh Account Statement will be mailed tothe Unitholder, indicating the new balance to his/her credit in the Account. An investor will have the right to discontinuethe Systematic Investment Plan, subject to giving 14 days prior notice to the Registrar.

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

Suppose an investor would like to invest Rs.1,000 under the Systematic Investment Plan on a quarterly basis, i.e. a totalamount of Rs.9,000 (alongwith an initial investment of Rs. 5,000) through four post-dated cheques dated 31

st March,

30th June, 30

th September and 31

st December.

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

Initial Investment 5,000 11 454.54I 1,000 12 83.33II 1,000 15 66.67III 1,000 11 90.91IV 1,000 13 76.92TOTAL 9,000 - 772.37

Average cost per Unit = Rs.11.65. (i.e. Rs.9000/772.37 Units)


43

g) Systematic Withdrawal Plan (SWP)

Unitholders of the Scheme have the benefit of enrolling themselves in the Systematic Withdrawal Plan. The SWP allowsthe Unitholder to withdraw a specified sum of money each month from his investments in the Scheme. SWP is ideal forinvestors seeking a regular inflow of funds for their needs. It is also ideally suited to retirees or individuals who wish toinvest lump sum and withdraw from the investment over a period of time.

The minimum amount which the Unitholder can withdraw is Rs.1000 and in multiples of Rs.1000 thereof. The Unitholdermay avail of this plan by sending a written request to the Registrar.

The amount thus withdrawn by redemption will be converted into Units at Applicable NAV based prices and the numberof Units 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 within30 days, after a written intimation in this regard is sent to the Unitholder.

Unitholders may change the amount indicated in the SWP, subject to a minimum amount of Rs.1,000 and in multiplesthereof. The SWP may be terminated on a written notice by a Unitholder of the Scheme and it will terminate automaticallyif all Units are liquidated or withdrawn from the account or upon the Funds’ receipt of notification of death or incapacityof the Unitholder.

h) Who can Invest?

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

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

� Minor through parent/lawful guardian

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

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

� Partnership Firms

� Karta of Hindu Undivided Family (HUF)

� Banks & Financial Institutions

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

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

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

� Scientific and Industrial Research Organizations

� Mutual fund schemes

i) How to apply?

i) Purchase of Units after the Initial Offer Period

The Schemes are open for fresh subscriptions on an on-going basis. Applications by new investors (i.e. other thanexisting Unitholders) must be for a minimum amount of Rs. 5,000 and in multiples of Re.1,000 thereafter. An existingUnitholder can, however, purchase additional Units for any amount, subject to the minimum additional amount ofRs.1,000.

The Trustee shall, have absolute discretion to accept/reject any application for purchase of Units, if in the opinion ofthe Trustee, increasing the size of Scheme’s Unit capital is not in the general interest of the Unitholders, or theTrustee for any other reason believes it would be in the best interest of the Scheme or its Unitholders to accept/rejectsuch an application.

Suspension or restriction of repurchase facility under any scheme of the mutual fund shall be subject to procedureprescribed by SEBI in this regard.

ii) Purchase Price

The purchase price of the Units, on an ongoing basis, will be based on the Applicable NAV, subject to applicableEntry Load. For the present, the Trustee does not intend to charge any entry load. However, the Trustee reserves theright to charge the entry load or a combination of entry and exit loads with prospective effect under the Scheme.The maximum load (entry/exit) under the Scheme will not exceed the limits as prescribed under the Regulations.

The Fund shall ensure that the Redemption Price is not lower than 93% of the NAV and the Purchase Price is nothigher than 107% of the NAV, provided that the difference between the Redemption Price and Purchase Price of the


44

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

iii) How to Purchase?

The application forms for the purchase of Units of the Scheme will be available at the office of the AMC and theCustomer Service Centres. New investors can purchase Units by completing an Application Form. Existing Unitholdersmay use the transaction slip for additional purchases sent with the Account Statement or a new Application Form.Payment for purchase of Units will be accepted only through a cheque or demand draft drawn payable at the centrewhere the application is lodged, drawn in favour of “Prudential ICICI Index Fund”. Investors at places other thanwhere the Customer Service Centres are located are requested to make the payment without deducting the demanddraft charges. The Fund will not entertain any requests for reimbursement of demand draft charges.

Outstation cheques and cash will not be accepted under any circumstances.

Investors should complete the Application Form and deliver the same along with the cheque/draft at any of theCustomer Service Centres of the AMC, listed on the last page of this Offer Document.

Under normal circumstances, an Account Statement will be mailed to the investor, indicating the number of Unitspurchased within 5 Business Days of the acceptance of a valid application for purchase of Units.

In the event of non-realization of any cheque or other instrument remitted by the investor, the transaction of creditingthe Unitholder’s account will be reversed.

As per the directives issued by SEBI, it is mandatory for applicants to mention their bank account numbersin their applications for purchase or redemption of Units. If the Unit-holder fails to provide the Bank mandate,the request for redemption would be considered as not valid and the Fund retains the right to withhold theredemption until a proper bank mandate is furnished by the Unit-holder and the provision with respect ofpenal interest in such cases will not be applicable/ entertained.

iv) NRIs, FIIs

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-Tax Act 1961.

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

FIIs :

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

For the purpose of this section, the term “mutual funds” is as referred to in Clause (23D) of Section 10 of Income-Tax Act 1961.

v) 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 theaforesaid notification.

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 purchasedout of funds held in NRE Accounts / FCNR Accounts.

All cheques/drafts should be made out in favour “Prudential ICICI FMCG Fund “ and crossed “Account PayeeOnly”. In case Indian Rupee drafts are purchased abroad or from FCNR/NRE A/c. an account debit certificate fromthe Bank issuing the draft confirming the debit shall also be enclosed.

vi) Mode of payment on Non-Repatriation basis

In case of NRIs/persons of Indian origin/ FIIs applying for Units on a non-repatriation basis, payments may be madeby cheques/demand drafts drawn out of Non-Resident Ordinary (NRO)/ Non Resident Special Rupee (NRSR) accountsand Non Resident Non-Repatriable (NRNR) accounts payable at the city where the Application Form is accepted.


45

vii) Application under Power of Attorney/ Body corporate/Registered society/ Trust/ Partnership

In case of an application under Power of Attorney or by a limited company, body corporate, registered society, trustor partnership, etc., the relevant Power of Attorney or the relevant resolution or authority to make the application asthe case may be, or duly certified copy thereof, along with the memorandum and articles of association/bye-lawsmust be lodged at the Customer Service Centres alongwith the Application form.

viii )Applicable NAV

Applicable NAV is the Net Asset Value per Unit at the close of the Business Day on which the application for subscriptionis accepted. An application for subscription will be considered accepted on that day, subject to it being complete inall respects and received prior to 12.00 noon on that Business Day.

ix) Joint Applicants

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

Applicants can specify the ‘mode of holding’ in the application form as ‘Jointly’ or ‘Anyone or Survivor’. In the caseof holding specified as ‘Jointly’, redemptions and all other requests relating to monetary transactions would have tobe signed by all joint holders. However, in cases of holding specified as ‘Anyone or Survivor’, any one of the Unitholders will have the power to make redemption requests, without it being necessary for all the Unit holders tosign. However, in all cases, the proceeds of the redemption will be paid to the first-named holder.

In case of death / insolvency of any one or more of the persons named in the Register of Unit holders as the jointholders of any Units, the AMC, shall not be bound to recognise any person(s) other than the remaining holders. Inall such cases, the proceeds of the Redemption will be paid to the first-named of such remaining Unit holders.

x) Nomination Facility

The AMC has provided this nomination facility as an additional feature. By provision of this facility the AMC is notin any way attempting to grant any rights other than those granted by law to the nominee. A nomination in respectof the Units 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 casemay 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.

In the event of unfortunate event of the death of the Unit holder and in the event that a nominee has been named,the nominee shall stand transposed in respect of the Units held by the Unit holder. Such nominee (new Unit holder)will hold the Units in trust for and on behalf of the estate of the original Unit holder and his / her legal heirs. Suchpayments made by the AMC shall be full and valid discharge of the AMC / Fund from all further liabilities in respectof the sums so paid.

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

Where the units are held by more than one person jointly, the joint unitholders may together nominate a person inwhom all the rights in the units shall vest in the event of death of all the joint unit holders.

j) Account Statements

Under normal circumstances, an Account Statement/Transaction Confirmation will be mailed to the investor, indicatingthe number of Units purchased / alloted within 5 Business Days of the acceptance of a valid application for purchase ofUnits under the Scheme. Where the prior consent of the Unitholder is obtained, 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 ofcrediting the Unitholder’s account will be reversed.

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.

Any addition/ deletion of name from the folio of the unitholder is deemed as transfer of units. But the Units of theScheme are not transferable.

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

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

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

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


46

k) Redemption of Units

The Units can be redeemed (i.e., sold back to the Fund), at the Applicable NAV (hereinafter defined) on an on-goingbasis. Redemption requests can be made in amounts with a minimum of Rs.1,000 or in multiples thereof.

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

In case an investor has purchased Units on more than one Business Day (either during the Initial 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 may also request for redemption of their entire holding and close the account by indicating the same at theappropriate place in the Redemption Request Form.

As per the directives issued by SEBI, it is mandatory for applicants to mention their bank account numbers intheir applications for purchase or redemption of Units. If the Unit-holder fails to provide the Bank mandate, therequest for redemption would be considered as not valid and the Fund retains the right to withhold theredemption until a proper bank mandate is furnished by the Unit-holder and the provision with respect of penalinterest in such cases will not be applicable/ entertained.

i) Redemption Price

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

For the present, the Unitholder will, however, pay an exit load depending on the period of their investment in thescheme as follows:1. For investments of Rs.5,00,000 and less: Exit load of 0.50% of applicable NAV in case the amount sought to be

redeemed is not being invested under the Nifty Plan for a minimum period of 1 year.2. For investments of over Rs. 5,00,000: Exit load is Nil.

Redemption Price can be calculated using the following formula:Redemption Price = Applicable NAV * (1-Exit Load, if any).

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decideto introduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changeswill be applicable for prospective investments. The Trustee shall arrange to display a notice in the CustomerService Centers of the AMC before the change of the then prevalent load structure. The addendum detailingthe changes in load structure will be attached to offer documents and abridged offer documents. Theaddendum will also be circulated to all the distributors / brokers so that the same can be attached to all theoffer documents and abridged offer documents in stock. This addendum will also be sent along with thenewsletter to the unitholders immediately after the changes. Changes in the load structure may be stampedin the acknowledgement slip issued by the Fund after the changes in load structure. The load collected fromthe Unitholders 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 plannedmarketing and distribution expenses to be defrayed will be credited to the respective Plans whenever feltappropriate by the AMC.

Investors may note that the Trustee has a right to prescribe or modify the load structure with prospective effect andto introduce an entry load or a combination of entry and exit loads or a differential load structure based on thetenor and the amount of investment, subject to the Regulations. Please refer to the section titled “Load” on page30 for further details.

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

ii) Applicable NAV

Applicable NAV is the Net Asset Value per Unit at the close of the Business Day on which the application is accepted.An application will be considered accepted on that day, subject to it being complete in all respects and receivedprior to 12.00 noon on that Business Day.

iii) 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.

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


47

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

iv) Payment of Proceeds

All redemption requests received prior to 12:00 noon on any Business Day will be considered accepted on thatBusiness Day, subject to the redemption request being complete in all respects, and will be priced on the basis ofthe Applicable NAV (subject to the applicable load) for that day. Where an application is received after the cut-offtime, as above, the request will be deemed to have been received on the next Business Day. Please see page 48‘Right to Limit Redemption’ and ‘Suspension of Sale’ and page 46 for Redemption of Units.

As per the Regulations, the Fund shall despatch the redemption proceeds within 10 (ten) Business Days(workingdays)from the date of acceptance of redemption request at any of the Customer Service Centres or the office of theRegistrar, in case of a redemption request being sent by post. As per the guidelines issued by SEBI, in the event offailure to dispatch the redemption or repurchase proceeds with in 10 working days, the AMC is liable to pay interestto the Unit holders @ 15% p.a. SEBI has further advised the mutual funds that in the event of payment of interest tothe Unit holders, such Unit holders should be informed about the rate and the amount of interest paid to them.

Under normal circumstances, the Fund will endeavour to dispatch the redemption cheques within 5 Business Daysfrom the date of acceptance of the redemption request.

The redemption cheque will be issued in favour of the sole/first Unitholder’s registered name and bank accountnumber and will be sent to the registered address of the sole/first holder as indicated in the original ApplicationForm. The redemption cheque will be payable at par at all the places where the Customer Service Centres are located.The bank 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 Unitholders to mention their bank name and account numbers ofthe Unitholders in their applications for purchase or redemption of Units. The normal processing time maynot applicable in situations where such details are not provided by the Applicants/ Unitholders. The AMCwill not be responsible for any loss arising out of fraudulent encashment of cheques or any delay or loss intransit.

If the Unit-holder fails to provide the Bank mandate, the request for redemption would be considered asnot valid and the Fund retains the right to withhold the redemption until a proper bank mandate is furnishedby the Unit-holder and the provision with respect of penal interest in such cases will not be applicable/entertained.

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-mailonly.

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

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

v) Redemption by NRIs/FIIs

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

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

vi) Effect of Redemptions

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

vii) Fractional Units

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


48

viii) Right to Limit Redemptions

The Trustee and Board of Directors of AMC may, in the general interest of the Unitholders of the Scheme offeredunder this Offer Document and keeping in view the unforeseen circumstances/unusual market conditions, limit thetotal number of Units which may be redeemed on any Business Day to 5% of the total number of Units then inissue or such other percentage as the Trustee may determine.

Any Units, which by virtue of these limitations are not redeemed on a particular Business Day, will be carried forwardfor redemption to the next Business Day, in order of receipt. Redemptions so carried forward will be priced on thebasis of the Applicable NAV (subject to the prevailing load) of the Business Day on which redemption is made.Under such circumstances, to the extent multiple redemption requests are received at the same time on a singleBusiness Day, redemptions will be made on pro-rata basis, based on the size of each redemption request, the balanceamount being carried 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 detailsof circumstances and justification for the proposed action shall also be informed.

ix) Suspension of Sale and Redemption of Units

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

1. When one or more stock exchanges or markets, which provide basis for valuation for a substantial portion ofthe assets 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 theTrustee and the AMC, the disposal of the assets of the Scheme is not reasonable, or would not reasonably bepracticable without 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 interestsof the 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.


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SECTION IV

LOAD STRUCTURE, FEES AND EXPENSES

a) LOAD STRUCTURE OF THE SCHEME

Entry Load

For the present, the Trustee does not intend to charge any entry load.

Exit Load

Unitholder will, however, pay an exit load depending on the period of their investment in the scheme as follows:

1) For investments of Rs.5,00,000 and less: Exit load of 0.50% of applicable NAV in case the amount sought to beredeemed is not being invested under the Nifty Plan for a minimum period of 1 year.

2) For investments of over Rs. 5,00,000: Exit load is Nil.

Subject to the Regulations, the Trustee reserves the right to modify/alter the load structure and may decideto introduce a differential load structure on the Units subscribed/redeemed on any Business Day. Such changeswill be applicable for prospective investments. The Trustee shall arrange to display a notice in the CustomerService Centers of the AMC at least 10 days before the change of the then prevalent load structure. Theaddendum detailing the changes in load structure will be attached to offer documents and abridged offerdocuments. The addendum will also be circulated to all the distributors / brokers so the same can be attachedto all the offer documents and abridged offer documents in stock. This addendum will also be sent alongwith the newsletter to the unitholders immediately after the changes. Changes in the load structure maybe stamped in the acknowledgement slip issued by the Fund and may also be disclosed in the statement ofaccounts issued after the changes in load structure. The load collected from the Unitholders under eachPlans will be credited to a separate account in the respective Plans accounts and will be offset againstdistribution and marketing expenses. Surplus of load, if any, charged over planned marketing and distributionexpenses to be defrayed will be credited to the respective Plans whenever felt appropriate by the AMC.

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:

i) Initial Issue Expenses

The total Initial Issue Expenses chargeable to the Scheme as per the current Regulations are subject to a maximumof 6% of the amount collected during the Initial Offer Period. However, the Initial Issue Expenses charged to theScheme were limited to 1.50% of the initial corpus mobilised under each of the Plans of the Scheme.

ii) Estimated Recurring Expenses

Description (% per annum ofaverage net assets)

Investment Management Fee 0.70Additional Fees -Trustee Fee 0.05Custodian Fee 0.10Marketing & Selling, Costs of Investor Communications,Costs for A/c Statements, Dividend etc, Cost of StatutoryAdvertisements 0.15Registrar & Transfer Agent 0.10Audit Costs 0.05Cost of Funds Transfer 0.05Other Expenses 0.05Total Recurring Expenses 1.25

The purpose of the above table is to assist the investor in understanding the various costs and expenses that aninvestor in the Scheme will bear. These estimates are based on a corpus size of Rs.1 crore under the Scheme, andwould change, to the extent assets are lower or higher. If the corpus size is in excess of Rs.1 crore, the above mentionedrecurring expenses in the Scheme would change. The above expenses are subject to inter-se change and may increase/decrease as per actual and/or any change in the Regulations.

These estimates have been made in good faith as per information available to the AMC and the total expenses maybe more than as specified in the table above. However, as per the Regulations, the total recurring expenses that canbe charged to the Scheme in this Offer Document shall be subject to the applicable guidelines. Expenses over andabove the permitted limits will be borne by the AMC.


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c) FEES AND EXPENSES OF THE EXISTING SCHEMES

ICICI Mutual Fund, prior to the joint venture with Prudential, had launched two closed ended growth schemes, ICICIPremier, launched on November 30, 1993 and ICICI Power, launched on August 24, 1994 (since converted into an open-ended scheme). Subsequent to the joint venture with Prudential, the Fund launched three open-ended schemes (PrudentialICICI Growth Plan, Prudential ICICI Income Plan and Prudential ICICI Liquid Plan) on June 4, 1998 and one open endedscheme (Prudential ICICI FMCG Fund) on February 15, 1999. The Fund also launched Prudential ICICI Tax Plan, PrudentialICICI Gilt Fund, Prudential ICICI Balanced Fund, Prudential ICICI Technology Fund, Prudential ICICI Monthly Income Plan,Prudential ICICI Fixed Maturity Plan Prudential ICICI Child Care Plan, Prudential ICICI Index Fund, Prudential ICICI DynamicPlan and SENSEX Prudential ICICI Exchange Traded Fund, Prudential ICICI Advisor Series on July 9,1999, July 21, 1999,September 20,1999, January 7, 2000, September 28, 2000, December 20, 2000, July 16, 2001, February 15, 2002,October 7, 2002, January 6, 2003 and November 10, 2003 respectively. The following are the additional Plans under theexisting Schemes of the Fund:

Sr. No. Additional Plan Existing Scheme Launch date

1 Prudential ICICI Gilt Fund - One Year Plus Plan Prudential ICICI Gilt Fund April 26, 20012 Prudential ICICI Short Term Plan Prudential ICICI Income Plan October 18, 20013 Prudential ICICI Long Term Plan Prudential ICICI Income Plan March 26, 20024 Prudential ICICI Sweep Plan Prudential ICICI Liquid Plan February 27, 20025 Prudential ICICI Fixed maturity Plan – Yearly 5 Prudential ICICI Fixed Maturity Plan March 22, 20026 Prudential ICICI Fixed Maturity Plan –

One Year Plus Plan Prudential ICICI Fixed Maturity Plan June 27, 20027. Prudential ICICI FMP Yearly- Series 7 Prudential ICICI Fixed Maturity Plan August 19, 20028. Prudential ICICI Fixed Maturity Plan –

One Year Plus Plan - Series 8 Prudential ICICI Fixed Maturity Plan September 16, 20029. Prudential ICICI Flexible Income Plan Prudential ICICI Income Plan September 16, 2002

10. Prudential ICICI Fixed Maturity Plan –One Year Plus Plan - Series 12 Prudential ICICI Fixed Maturity Plan March 17, 2003

11. Prudential ICICI Floating Rate Plan Prudential ICICI Income Plan March 28, 200312. Prudential ICICI Flexible Income Plus Plan Prudential ICICI Income Plan May 22, 200313 Prudential ICICI Deposit Plus NRI Series Prudential ICICI Fixed Maturity Plan October 3, 200314 Prudential ICICI Gilt Fund Investment Plan – Prudential ICICI Gilt Fund

PF Option Investment Plan November 3, 2003

Given below are the details of estimated and actual Initial Public Issue expenses in respect of the above schemes:

INITIAL ISSUE EXPENSES – COMPARISON OF ESTIMATED TO ACTUALS

Description ICICI Premier ICICI Power#

Estimated - % Actuals - % to Estimated - % to Actuals - % toto Target Amount Subscription Target Amount Subscription

Advertising Expenses 1.75 1.48 1.50 1.61

Commission to agents & brokers 2.00 1.36 1.75 2.53

Registrar Expenses 0.75 0.10 1.25 0.07

Printing & Mailing 1.00 0.24 1.00 0.42

Miscellaneous 0.50 0.36 0.50 0.40

Total 6.00 3.54 6.00 5.03

Target Amount/ Amount Mobilised Rs.100 crore Rs.159 crore Rs.50 crore Rs.90.28 crore

# For close-ended scheme

The Initial Issue Expenses relating to Liquid Plan, Income Plan, Growth Plan, Gilt Plan, Monthly Income Plan, Fixed Maturity Plan,Gilt Treasury- 1 Year Plus Plan, Short Term Plan, Sweep Plan, Long Term Plan, Fixed Maturity Plan- Yearly 5, Fixed Maturity Plan –One Year Plus Plan – Series 6, 7, 8 & 12, Prudential ICICI Flexible Income Plan, SENSEX Prudential ICICI Exchange Traded Fund,Prudential ICICI Floating Rate Fund and Prudential ICICI Flexible Income Plus Plan were borne by the AMC and the details thereofare furnished on page 50.

Initial Issue Expenses - Prudential ICICI FMCG Fund, Prudential ICICI Tax Plan, Prudential ICICI Balanced Fund, Prudential ICICITechnology Fund, Prudential ICICI Child Care Plan, Prudential ICICI Index Fund and Prudential ICICI Dynamic Plan, PrudentialICICI Advisor Series.

The Initial Issue Expenses charged to the Investors under Prudential ICICI FMCG Fund, Prudential ICICI Tax Plan, and PrudentialICICI Balanced Fund were limited to 1% of the amount mobilized during the Initial Offer Period. The initial issue expenses


51

charged to Investors under Prudential ICICI Technology Fund were limited to 1.75% of the corpus mobilized under the InitialOffer Period. In respect of Prudential ICICI Child Care Plan, initial issue expenses to be charged to the Scheme are limited to2.50% of the amount mobilised during the initial offer period under Gift Plan and 1.50% under Study Plan. Under PrudentialICICI Index Fund, the initial issue expenses to be charged to the Scheme is limited to 1.50% of the amount mobilized during theinitial offer period. Under Prudential ICICI Dynamic Plan, the initial issue expenses to be charged to the Scheme is limited to2.50% of the amount mobilized during the initial offer period (as mentioned in the offer document), whereas the actual initialissue expenses charged to the scheme were limited to 1.33%. Under Prudential ICICI Advisor Series, the initial issue expenses tobe charged to the Scheme is limited to 2.40% of the amount mobilized during the initial offer period (as mentioned in the offerdocument), whereas the actual initial issue expenses charged to the scheme were limited to 0.79%

The details of estimated Vs actual expenses are as under:

Description FMCG Fund Tax Plan Gilt Fund Balanced Fund Technology Fund

Estimated - Actual - % Estimated - Actual - % Estimated - Actual - % Estimated - Actual - % Estimated - Actual - %% to to % to to % to to % to to % to toTarget Subscription Target Subscription Target Subscription Target Subscription Target SubscriptionAmount Amount Amount Amount Amount

Advertising, 0.50 1.40 0.90 0.33 1.00 0.15 0.65 0.45 0.75 0.27printing andother marketingexpenses

Collection, 0.25 0.12 0.60 0.04 0.25 0.01 0.25 0.01 0.25 0.04Registrar andBank charges

Selling 1.00 0.93 1.00 1.06 - 0.02 1.00 1.01 1.00 1.49 Commissions

Total 1.75 2.45 2.50 1.43 1.25 0.18 1.90 1.47 2.00 1.80

Target Amount/ Rs. 1.00 Rs. 1.59 Rs. 10.00 Rs. 50.76 Rs. 1.00 Rs. 150.01 Rs. 1.00 Rs. 197.58 Rs. 1.00 Rs. 509Amount crore crore lacs crores crore crore crore crores crores crores

Mobilised

Description Child Care Child Care Child Care Index Fund Dynamic Plan Advisor SeriesPlan - Plan - Plan - Gift &

Gift Plan Study Plan Study Plan

Estimated - Estimated - Actual - Estimated - Actual - Estimated - Actual - Estimated - Actual -% to Target % to Target % to sub- % to Target % to sub- % to Target % to sub- % to Target % to sub-

Amount Amount scription Amount scription Amount scription Amount scription

Advertising, printing andother marketing expenses 1.85 2.28 11.86 1.25 Nil 0.75 Nil 1.05 0.17

(includesSelling

Commission)

Collection, Registrar and 0.35 0.35 0.63 0.25 Nil 0.25 Nil 1.00 0.04Bank charges

Selling Commissions 1.00 1.00 1.42 - Nil 1.50 1.33 035 0.58

Total 3.20 3.63 13.91 1.50 Nil 2.50 1.33 2.40 0.79

Target Amount/Amount Rs. 1.00 Rs. 1.00 Rs.10.62 Rs.1.00 Rs. 7.86 Rs. 7.86 Rs. 17.64 Rs.5 Rs.310.62Mobilised crore crore crore Crore crores crores crores Lakhs crores

Note:

1. The Initial Issue Expenses under FMCG Fund were more due to higher advertisement costs.

2. As disclosed in the offer document of Child Care plan, expenses to the extent or 3.63% for Study Plan and 3.20% forGift Plan have been charged to the Scheme and the balance expenses have been borne by the AMC.


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II) ANNUAL SCHEME RECURRING EXPENSES:

As a % of Average weekly Net Assets

ICICI Premier (closed-ended Scheme) ICICI Power+

Description *2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till (till

31.12.03) 31.12.03)

Investment management 1.25 1.25 1.25 1.25 1.07 1.23 1.25 1.24& Advisory feesAdditional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Trustee Fees 0.01 0.01 0.01 0.01 0.00 0.01 0.01 0.01Audit Fees 0.06 0.04 0.02 0.04 0.00 0.05 0.04 0.06Custodian Fees 0.01 0.01 0.04 0.14 0.02 0.04 0.09 0.22Registrar & Transfer 0.95 0.34 0.11 0.15 0.11 0.16 0.25 0.07Agent FeesListing fees 0.03 0.06 0.03 0.03 0.00 0.00 0.05 0.05Bank charges 0.02 0.06 0.00 0.03 0.05 0.04 0.01 0.01Postal & Mailing 0.00 0.22 0.23 0.23 0.01 0.07 0.23 0.31ExpensesBrokerages 0.00 0.00 - - 0.56 0.23 - -Advertising / 0.03 0.47 0.54 0.32 0.23 0.64 0.54 0.29Marketing /Printing ExpensesCost related to 0.00 0.02 - 0.17 0.00 0.00 - 0.08investorcommunicationOther Expenses 0.14 0.02 0.27 0.11 0.22 0.00 0.03 0.16Total Annual 2.50 2.50 2.50 2.50 2.27 2.47 2.50 2.50Recurring Expenses

+ Renamed as Prudential ICICI Power consequent to its conversion into open-ended fund effective from September 27, 2001.

** Unaudited.

ESTIMATED RECURRING EXPENSES-OPEN ENDED SCHEMES

As per the Offer Document for the Liquid Plan, Income Plan, Growth Plan, FMCG Fund, Tax Plan, Gilt Fund, Balanced Fund,Technology Fund, Monthly Income Plan, Gilt Treasury 1 Year Plus Plan, Fixed Maturity Plan, Short Term Plan, Child Care Plan, IndexFund, Power, Long Term Plan, Sweep Plan, Flexible Income Plan, Dynamic Plan, SPIcE, Floating Rate Plan, Flexible Income Plus Planand Prudential ICICI Advisor series, the following were the estimated recurring expenses.

(% per annum of average net assets)

Description Growth Income Liquid FMCG Tax Gilt Fund BalancedPlan Plan Plan Fund Plan Treasury Investment Fund

Option Option

Investment management &Advisory fees 1.25 1.25 0.70 1.25 1.25 0.75 0.75 1.25Additional Fees (if any) - - - - - - - -Trustee Fees 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05Custodian Fees 0.30 0.15 0.08 0.30 0.30 0.04 0.04 0.15Advertising, Marketing &Selling Expenses 0.50 0.25 0.03 0.50 0.50 0.02 0.02 0.20Registrar & Transfer Agents Fees 0.10 0.10 0.10 0.10 0.10 0.04 0.04 0.10Transaction Costs 0.05 0.05 0.02 0.05 0.05 - - 0.05Audit Fees 0.01 0.01 0.01 0.01 0.01 - - 0.01Cost related to Investorcommunications 0.04 0.04 0.01 0.04 0.04 0.02 0.02 0.03Cost of funds transfer 0.05 0.025 0.00 0.05 0.05 - - 0.05Cost of providing AccountStatements, dividenddistributions, etc. 0.05 0.025 0.00 0.05 0.05 0.05 0.05 0.03Cost of statutory advertisements 0.05 0.025 0.00 0.05 0.05 0.01 0.01 0.04Other Expenses 0.05 0.025 0.00 0.05 0.05 0.02 0.02 0.04

Total Annual Recurring Expenses 2.50 2.00 1.00 2.50 2.50 1.00 1.00 2.00


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Description Technology Monthly Gilt-Treasury Fixed Maturity Short Term Child Care Plan IndexFund Income 1 Year Plus Plan Plan Fund

Plan Plan

Gift Plan Study Plan

Investment management & Advisory fees 1.25 1.25 0.75 0.70 0.75 1.25 1.25 0.70Additional Fees (if any) - - - - - - - -Trustee Fees 0.05 0.05 0.04 0.05 0.05 0.05 0.01 0.05Custodian Fees 0.30 0.20 0.04 0.05 0.04 0.16 0.10 0.10Advertising, Marketing & Selling Expenses 0.47 0.20 0.02 0.03 0.02 0.08 0.04 0.15 **Registrar & Transfer Agents Fees 0.08 0.12 0.04 0.08 0.05 0.12 0.10 0.10Transaction Costs 0.05 - - - - - - -Audit Fees 0.01 0.01 - 0.01 0.01 0.01 0.01 0.05Cost related to Investor communications 0.08 0.12 0.02 0.01 0.02 0.12 0.08 -Cost of funds transfer 0.05 0.14 - 0.01 - 0.10 0.10 0.05Cost of providing Account Statements, 0.08 0.11 0.05 0.02 0.04 0.11 0.11 -dividend distributions, etc.Cost of statutory advertisements 0.04 0.01 0.01 0.02 0.01 0.05 0.01 -Other Expenses 0.04 0.04 0.02 0.02 0.01 0.45* 0.44* 0.05Total Annual Recurring Expenses 2.50 2.25 1.00 1.00 1.00 2.50 2.25 1.25

*Includes insurance premium payable under Child Care Plan.**Includes Cost related to investor communication, A/c. Statement, dividend distribution and Statutory advertisement.


Description Prudential Long Sweep Flexible Dynamic SPIcE Floating Flexible AdvisorICICI Term Plan Income Plan Rate Income Series

Power Plan Plan Plan Plus Plan

Investment management & Advisory fees 1.25 1.25 0.75 1.00 1.00 0.60 0.45 0.50 0.50

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.05 0.05 0.05 0.05 0.02 0.01 0.05 0.05 0.01

Custodian Fees 0.20 0.15 0.04 0.02 0.15 0.05 0.02 0.02 0.01

Advertising, Marketing & Selling Expenses 0.47 0.25 0.02 0.30 0.45 0.17 0.07 0.30 0.15

Registrar & Transfer Agents Fees 0.10 0.10 0.04 0.06 0.08 0.10 0.06 0.06 0.02

Transaction Costs 0.00 0.05 0.00 0.00 0.05 0.00 0.00 0.00 0.00

Audit Fees 0.01 0.01 0.00 0.01 0.01 0.01 0.01 0.01 0.01

Cost related to Investor communications 0.12 0.04 0.05 0.06 0.05 0.03 0.03 0.06 0.01

Cost of funds transfer 0.14 0.025 0.00 0.00 0.05 0.00 0.00 0.00 0.01

Cost of providing Account Statements, 0.11 0.025 0.08 0.00 0.05 0.03 0.00 0.00 0.01dividend distributions, etc.

Cost of statutory advertisements 0.01 0.025 0.02 0.00 0.05 - 0.00 0.00 0.01

Other Expenses 0.04 0.025 0.20 0.00 0.04 0.03 0.06 0.00 0.01

Total Annual Recurring Expenses 2.50 2.00 1.25 1.50 2.00 1.00 0.75 1.00 0.75

Actual Recurring Expenses as on December 31, 2003 are as under:

(% Per annum of average net assets)

Description Growth Plan Income Plan

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 @ 2001-2002 2000-2001 (till (till

31.12.03) 31.12.03) @

Investment management & Advisory fees 1.07 1.07 1.08 1.06 0.57 0.73 1.00 1.01Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Trustee Fees 0.00 0.00 0.01 0.01 0.00 0.00 0.00 0.01Audit Fees 0.00 0.01 0.00 - 0.00 - - -Custodian Fees 0.02 0.04 0.10 0.19 0.00 0.01 0.02 0.03Registrar & Transfer Agent Fees 0.10 0.11 0.11 0.11 0.06 0.07 0.07 0.08Bank Charges 0.03 0.04 - - 0.01 0.01Postal and Mailing Expenses 0.01 0.01 0.01 0.01 0.00 - - -Brokerage 0.60 0.61 0.16 - 0.40 0.57 0.33 0.23Advertisement/ Marketing / Printing expenses 0.30 0.43 0.76 0.87 0.13 0.17 0.15 0.26Other Expenses (including expenses as 0.18 0.01 0.10 0.02 0.33 0.03 0.03 0.02permitted under the Regulations)Total Annual Recurring Expenses 2.31 2.33 2.33 2.27 1.50 1.59 1.60 1.64

* Unaudited

@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan for theperiod ended March 31, 2003 is 1.59% and 1.02% respectively and for the period ended December 31, 2003 is 1.59% and1.10% respectively.


54


Description Liquid Plan FMCG Fund

*2003-2004 2002-2003@ 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001 (till (till

31.12.03)@ 31.12.03)

Investment management & Advisory fees 0.44 0.53 0.70 0.70 1.25 1.25 1.25 1.25

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.00 0.00 0.00 - 0.01 0.01 0.01 0.01

Audit Fees 0.00 0.00 - - 0.04 0.03 0.02 0.04

Custodian Fees 0.00 0.01 0.02 0.03 0.02 0.04 0.12 0.19

Registrar & Transfer Agent Fees 0.05 0.06 0.07 0.08 0.11 0.10 0.10 0.12

Bank Charges 0.00 0.01 - - 0.00 0.10 - -

Postal and Mailing Expenses 0.00 0.00 - 0.01 0.01 0.04 0.04 0.05

Brokerage 0.09 0.31 0.16 0.12 0.24 0.24 0.22 0.16

Advertisement/ Marketing / 0.03 0.04 0.02 0.03 0.24 0.24 0.12 0.08Printing expenses

Other Expenses (including expenses as 0.09 0.02 0.02 0.01 0.16 0.00 0.16 0.10 permitted under the Regulations)


* Unaudited.

@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan forthe period ended March 31, 2003 is 0.99% and 0.75% respectively and the ratio for recurring expenses for Normal Plan,Institutional Plan and Institutional Plus Plan for the period ended December 31, 2003 is 0.86%, 0.64% and 0.60%respectively.

Note: 1) Prudential ICICI Income Plan, Prudential ICICI Growth Plan and Prudential ICICI Liquid Plan were launched in June1998.

2) Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


Description Tax Plan Gilt Fund - Treasury Plan Gilt Fund - Investment Plan

*2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000-2004 2003 2002 2001 2004 2003 2002 2001 2004 2001 2002 2001

(till (till (till31.12.03) 31.12.03) 31.12.03)

Investment management & 1.25 1.25 1.25 1.25 0.45 0.56 0.75 0.75 0.40 0.52 0.75 0.75Advisory fees

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.01

Audit Fees 0.04 0.03 0.02 0.04 0.04 0.03 0.01 0.02 0.00 0.00 - 0.01

Custodian Fees 0.02 0.04 0.16 0.26 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Registrar & Transfer Agent Fees 0.17 0.11 0.11 0.13 0.07 0.06 0.06 0.07 0.05 0.06 0.06 0.07

Bank Charges 0.16 0.01 - - 0.03 0.15 - - 0.02 0.03 - -

Posting & Mailing 0.05 0.04 0.08 0.06 0.00 0.01 0.01 0.03 0.00 0.00 - 0.02

Brokerages 0.18 0.15 0.12 0.01 0.25 0.09 0.12 0.01 0.30 0.39 0.24 0.04

Advertisement/ Marketing / 0.08 0.51 0.27 0.12 0.08 0.18 0.02 0.05 0.01 0.10 0.05 0.06Printing expenses

Other Expenses (including 0.20 0.00 0.12 0.12 0.17 0.01 0.10 0.06 0.37 0.05 0.03 0.04expenses as permitted underthe Regulations)

Total Annual Recurring Expenses 2.15 2.15 2.14 2.00 1.10 1.10 1.08 1.00 1.15 1.15 1.13 1.00

* Unaudited


55


Description Gilt Treasury Balanced Fund Technology FundOne Year Plus

Plan

2002- 2001- *2003- 2002- 2001- 2000- *2003- *2002- 2001 2000-2003 2002 2004 2003 2002 2001 2004 2003 2002 -2001

(till (till31.12.03) 31.12.03)

Investment management &Advisory fees 0.25 0.25 1.16 1.14 1.12 1.07 1.19 1.17 1.16 1.08

Additional Fees (if any) - - 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.02 - 0.01 0.01 0.01 0.01 0.02 0.02 0.03 0.02

Audit Fees - - 0.01 0.01 0.01 - 0.01 0.01 0.01 -

Custodian Fees - - 0.01 0.03 0.09 0.14 0.02 0.04 0.11 0.19

Registrar & Transfer Agent Fees 0.03 0.02 0.10 0.10 0.10 0.10 0.13 0.11 0.11 0.11

Bank Charges - - 0.06 0.05 - - 0.05 0.08 - -

Posting & Mailing - 0.01 0.01 0.02 0.03 0.01 0.00 0.11 0.09 0.01

Brokerages - - 0.42 0.59 0.45 0.26 0.51 0.49 0.37 0.08

Advertisement/ Marketing / Printing expenses - 0.02 0.06 0.39 0.46 0.61 0.17 0.38 0.48 0.80

Other Expenses (including expenses aspermitted under the Regulations) - - 0.52 0.00 0.03 0.05 0.34 0.01 0.06 0.03

Total Annual Recurring Expenses 0.30 0.30 2.36 2.34 2.30 2.25 2.44 2.42 2.41 2.32

* Unaudited

Note: Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


Description Monthly Income Plan Fixed Maturity Plan Quarterly Series 1

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003@ 2001-2002 2000-2001(till 31.12.03) (till 31.12.03) @

Investment management & Advisory fees 0.60 1.00 1.20 1.25 0.20 0.20 0.20 0.20


Trustee Fees 0.00 0.00 0.00 0.00 0.02 0.00 0.01 0.00

Audit Fees 0.00 0.00 0.01 0.01 0.02 0.02 0.00 0.00

Custodian Fees 0.01 0.01 0.03 0.03 0.01 0.00 0.02 0.02


Bank Charges 0.02 0.06 0.00 0.00 0.00 0.00 0.00 0.00

Posting & Mailing Exp. 0.00 0.00 0.01 0.00 0.00 0.01 0.01 0.00

Brokerages 0.47 0.17 0.34 0.38 0.00 0.09 0.21 0.13

Advertisement/ Marketing / Printingexpenses 0.09 0.19 0.18 0.03 0.00 0.17 0.03 0.10

Other Expenses (including expensesas permitted under the Regulations) 0.33 0.02 0.10 0.12 0.06 0.02 0.00 0.02


* Unaudited.

@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan forthe period ended March 31, 2003 is 0.55% and 0.25% respectively and for the period ended December 31, 2003 is0.55% and 0.25% respectively.


56


Description Fixed Maturity Plan Half yearly Series 1 Fixed Maturity Plan Yearly Series 1*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001

(till 31.12.03) (till 31.12.03)

Investment management &Advisory fees 0.25 0.20 0.24 0.14 0.30 0.26 0.27 0.27


Trustee Fees 0.02 0.01 0.01 0.00 0.02 0.01 0.01 0.00

Audit Fees 0.17 0.02 0.01 0.07 0.12 0.01 0.01 0.02

Custodian Fees 0.00 0.01 0.02 0.01 0.00 0.01 0.01 0.01


Bank Charges 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00

Posting & Mailing Exp. 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00

Brokerages 0.01 0.17 0.14 0.09 0.00 0.19 0.19 0.09

Advertisement/ Marketing /Printing expenses 0.00 0.09 0.09 0.17 0.00 0.09 0.04 0.15

Other Expenses (including expensesas permitted under the Regulations) 0.02 0.00 0.00 0.00 0.03 0.00 0.00 0.02


* Unaudited(% Per annum of average net assets)

Description Fixed Maturity Plan Quarterly Series 2 Fixed Maturity Plan Quarterly Series 3

*2003-2004 2002-2003 2001-2002 2000-2001 *2003-2004 2002-2003 2001-2002 2000-2001(till 31.12.03) (till 31.12.03)

Investment management &Advisory fees 0.20 0.20 0.20 0.20 0.20 0.15 0.17 0.20Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Trustee Fees 0.01 0.03 0.00 0.00 0.01 0.01 0.02 0.00Audit Fees 0.03 0.02 0.00 0.03 0.01 0.01 0.00 0.01Custodian Fees 0.00 0.01 0.02 0.02 0.00 0.01 0.02 0.02Registrar & Transfer Agent Fees 0.08 0.05 0.05 0.05 0.05 0.03 0.05 0.04Bank Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Posting & Mailing Exp. 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00Brokerages 0.19 0.16 0.23 0.10 0.25 0.08 0.16 0.19Advertisement/ Marketing /Printing expenses 0.00 0.08 0.04 0.07 0.00 0.26 0.08 0.04Other Expenses (including expensesas permitted under the Regulations) 0.04 0.00 0.00 0.03 0.03 0.00 0.00 0.00


* Unaudited

First series of each Plan of Prudential ICICI Fixed Maturity Plan was launched on December 20, 2000Note: Other expenses for the year 2003-2004 represent accrual of expenses as permitted under the Regulations.


Description Fixed Maturity Plan- Fixed Maturity Plan- Fixed Maturity Plan-Half Yearly Series 2 Yearly Series 2 Yearly Series 3

*2003- 2002- 2001- 2000- *2003- 2002- 2001- 2000- *2003- 2003 2001-2004 2003 2002 2001 2004 2003 2002 2001 2004 -2002 2002(till (till (till

31.12.03) 31.12.03) 31.12.03)

Investment management &Advisory fees 0.22 0.26 0.25 0.25 0.30 0.30 0.30 0.30 0.18 0.16 0.10Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Trustee Fees 0.01 0.01 0.00 0.00 0.01 0.05 0.01 0.00 0.01 0.00 0.00Audit Fees 0.00 0.07 0.01 0.25** 0.02 0.01 0.01 0.04 0.01 0.00 0.01Custodian Fees 0.00 0.00 0.01 0.00 0.00 0.01 0.01 0.00 0.01 0.01 0.01Registrar & Transfer Agent Fees 0.17 0.07 0.04 0.00 0.04 0.03 0.04 0.14 0.05 0.02 0.05Bank Charges 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Posting & Mailing Exp. 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.14Brokerages 0.10 0.13 0.21 0.01 0.10 0.17 0.22 0.12 0.13 0.09 0.08Advertisement/ Marketing /Printing expenses 0.00 0.01 0.03 0.04 0.00 0.02 0.01 0.00 0.00 0.18 0.21Other Expenses (includingexpenses as permitted under

the Regulations) 0.02 0.00 0.00 0.00 0.13 0.01 0.00 0.00 0.21 0.02 0.00

Total Annual Recurring Expenses 0.55 0.55 0.55 0.55 0.60 0.60 0.60 0.60 0.60 0.60 0.60

** Units for Series 2 of Fixed Maturity Plan-Half Yearly Option was allotted on March 22, 2001 and actual amount of auditfee paid in the financial year 2000-2001 was Rs.735.00.

* Unaudited


57


Description Fixed Maturity Plan- Child Care Plan – Child Care Plan –Yearly Series 4 Gift Plan Study Plan

*2003- 2002- 2001- *2003- 2002- 2001- *2003- 2003 2001-2004 2003 2002 2004 2003 2002 2004 -2002 2002(till (till (till

31.12.03) 31.12.03) 31.12.03)

Investment management & Advisory fees 0.33 0.30 0.30 1.25 1.25 1.25 1.25 1.25 1.25

Additional Fees (if any) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Trustee Fees 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Audit Fees 0.00 0.02 0.03 0.03 0.03 0.07 0.03 0.02 0.07

Custodian Fees 0.00 0.00 0.00 0.01 0.02 0.09 0.00 0.01 0.02

Registrar & Transfer Agent Fees 0.07 0.03 0.05 0.13 0.10 0.11 0.13 0.10 0.08

Bank Charges 0.00 0.00 0.00 0.04 0.01 0.00 0.01 0.01 0.00

Posting & Mailing Exp. 0.03 0.00 0.00 0.04 0.05 0.05 0.00 0.00 0.00

Brokerages 0.00 0.14 0.19 0.16 0.15 0.11 0.01 0.03 0.00

Advertisement/ Marketing / Printing expenses 0.00 0.10 0.03 0.21 0.39 0.29 0.02 0.07 0.02

Other Expenses (including expenses aspermitted under the Regulations) 0.16 0.00 0.00 0.13 0.00 0.03 0.05 0.01 0.06

Total Annual Recurring Expenses 0.60 0.60 0.60 2.00 2.00 2.00 1.50 1.50 1.50

* Unaudited


Description Short Term Plan FMP Yearly 5 Long Term Plan Sweep Plan

*2003- 2002- 2001- *2003- 2002- 2001- *2003- 2002 2001- *2003- 2003 2001-2004 2003@ 2002 2004 2003 2002 2004 -2003 2002 2004 -2002 2002

(till (till (till (till31.12.03)@ 31.12.03) 31.12.03) 31.12.03)

Investment management &Advisory fees 0.39 0.45 0.74 0.30 0.30 0.30 0.45 0.44 0.70 0.45 0.48 0.74


Trustee Fees 0.00 0.00 0.00 0.07 0.01 0.00 0.01 0.00 0.00 0.00 0.00 0.00

Audit Fees 0.00 0.00 0.01 0.02 0.00 0.07 0.00 0.00 0.09 0.02 0.11 0.19

Custodian Fees 0.01 0.01 0.01 0.01 0.01 0.00 0.01 0.01 0.00 0.00 0.00 0.00


Bank Charges 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Posting & Mailing Exp. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00

Brokerages 0.20 0.40 0.13 0.02 0.24 0.18 0.07 0.09 0.00 0.00 0.00 0.00

Advertisement/ Marketing /Printing expenses 0.01 0.08 0.05 0.00 0.02 0.05 0.00 0.03 0.01 0.00 0.43 0.32

Other Expenses (including expensesas permitted under the Regulations) 0.23 0.01 0.02 0.13 0.00 0.00 0.04 0.01 0.00 0.53 0.01 0.00


* Unaudited

@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan forthe period ended March 31, 2003 is 1.00% and 0.80% respectively and for the period ended December 31, 2003 is1.00% and 0.80% respectively.


58


Description Index Plan FMP Yearly 6 FMP Yearly 7 Flexible Income Dynamic Plan FMPPlan Yearly 8

*2003- 2002- 2001- *2003- 2002- *2003- 2002- *2003- 2002- *2003- 2002- 2002-2004 2003 2002 2004 2003 2004 2003 2004 2003 2004 2003 2003(till (till (till (till (till

31.12.03) 31.12.03) 31.12.03) 31.12.03) 31.12.03)

Investment management &Advisory fees 0.40 0.49 0.70 0.25 0.25 0.25 0.25 0.40 0.40 1.00 1.00 -


Trustee Fees 0.01 0.01 - 0.02 - 0.01 - 0.00 - 0.00 - -

Audit Fees 0.05 0.02 0.07 0.00 - 0.05 0.10 0.00 - 0.00 0.01 -

Custodian Fees 0.11 0.05 - 0.01 0.01 0.00 - 0.00 - 0.02 0.02 -


Bank Charges 0.02 0.01 0.00 - 0.00 - 0.01 0.02 0.11 0.04 -

Posting & Mailing Exp. 0.00 - - 0.00 - 0.00 - 0.00 - 0.01 - -

Brokerages 0.19 0.19 - 0.00 0.30 0.00 0.10 0.32 0.38 0.36 0.59 -

Advertisement/ Marketing /Selling expenses 0.13 0.15 0.41 0.00 0.02 0.00 0.13 0.02 0.18 0.22 0.18 0.49

Other Expenses (including expensesas permitted under the Regulations) 0.08 0.01 - 0.27 - 0.19 - 0.21 0.01 0.15 0.01 0.01


*Unaudited(% Per annum of average net assets)

Description Floating Rate Plan FMP Yearly - 12 SPIcE FlexibleIncome

Plus Plan

*2003-2004 2002-2003 *2003-2004 2002-2003@ *2003-2004 2002-2003 *2003-2004(till 31.12.03) (till 31.12.03)@ (till 31.12.03) (till 31.12.03)

Investment management &Advisory fees 0.34 0.45 0.22 0.19 0.40 0.40 0.40

Additional Fees (if any) 0.00 - 0.00 - 0.00 - 0.00

Trustee Fees 0.05 - 0.01 - 0.00 - 0.00

Audit Fees 0.01 0.02 0.00 0.11 0.05 0.04 0.03

Custodian Fees 0.00 - 0.01 - 0.02 0.02 0.00

Registrar & Transfer Agent Fees 0.06 0.10 0.02 0.01 0.13 0.23 0.03

Bank Charges 0.03 - 0.00 - 0.00 - 0.00

Posting & Mailing Exp. 0.00 - 0.00 - 0.00 - 0.00

Brokerages 0.09 0.01 0.03 0.10 0.00 - 0.00

Advertisement/ Marketing /Printing expenses 0.03 0.16 0.00 - 0.06 0.08 0.00

Other Expenses (including expensesas permitted under the Regulations) 0.14 - 0.27 - 0.14 0.03 0.04

Total Annual Recurring Expenses 0.75 0.74 0.56 0.41 0.80 0.80 0.50

*Unaudited@ This is the expenses ratio for the Scheme. The ratio for recurring expenses for Normal Plan and for Institutional Plan for theperiod ended March 31, 2003 is 0.75% and 0.20% respectively and for the period ended December 31, 2003 is 0.75% and0.20% respectively.


Description FMP NRI Series 4 – FMP NRI Series 4 – FMP NRI Series 6 – Gilt Fund InvestmentQuarterly Half Yearly Quarterly Plan – PF Option

*2003-2004 *2003-2004 *2003-2004 *2003-2004(till 31.12.03) (till 31.12.03) (till 31.12.03) (till 31.12.03)

Investment management & Advisory fees 0.20 0.05 0.20 0.68

Additional Fees (if any) - - - -

Trustee Fees - - - -

Audit Fees - - - -

Custodian Fees - - - -

Registrar & Transfer Agent Fees 0.02 0.02 - -

Bank Charges - - - -

Posting & Mailing Exp. - - - -

Brokerages 0.13 - 0.03 0.13

Advertisement/ Marketing / Printing expenses - - - 0.04

Other Expenses (including expensesas permitted under the Regulations) 0.20 0.03 0.32 0.25

Total Annual Recurring Expenses 0.55 0.10 0.55 1.10

*Unaudited


59

iii) Condensed Financial Information:

a. Condensed Financial Information for the period ended March 31, 2001.

Premier Power Growth Income Liquid FMCG

Historical Per Unit Statistics

Date of Allotment February 7, October 1, July 9, July 9, June 24, March 31,1994 1994 1998 1998 1998 1999

NAV at the beginning of the year (Rs.)

Growth Option 11.93 20.48 31.14 12.54 11.7855 11.28

Dividend Option - - 18.10 10.26 11.7855 10.29

Net Income per unit (0.53) (7.28) (5.72) 1.18 0.99 (1.04)

Dividends - - 1.20 1.1358@ 1.0278@ -

Transfer to Reserves - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 1.32% 0.34% 23.19% 12.68% 9.71% -4.83%

Benchmark Index Nifty Nifty Nifty N.A N.A CNX FMCG

Benchmark Index Returns # # # # # # 6.74% N.A N.A -8.80%

Net Assets end of period (Rs.crore) 56.58 34.34 327.62 2078.18 956.84 61.37

NAV at the end of the period 10.10## 10.22

Growth Option - - 17.67 13.85 12.9252 9.06

Dividend Option - - 9.27 10.21 11.8316 8.30

Ratio of Recurring Exps to Net Assets 2.50% 2.50% 2.27% 1.64% 0.98% 2.00%

Tax Plan Gilt Gilt Balanced Technology Monthly

Treasury Investment Fund Fund Income Plan


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


Growth Option 20.10 10.9598 11.1684 12.92 8.74 #

Dividend Option 14.61 10.3667 10.4637 11.98 8.74 #

Net Income per unit (4.22) 1.70 1.24 (2.83) (5.18) 0.39

Dividends - 1.0173@ 1.1370@ - - 0.4520@


Compounded Annualised Returns(Based on NAVs of Growth Option) 2.03% 12.28% 14.84% -12.21% -64.27% 5.50%*

Benchmark Index Nifty N.A N.A Nifty E.T Mindex N.A

Benchmark Index Returns -9.34% N.A N.A -9.76% -74.84% N.A

Net Assets end of period (Rs. Crore) 55.14 90.46 190.63 237.35 178.94 72.78

NAV at the end of the period

Growth Option 10.33 12.0590 12.5063 8.32 3.30 10.5504

Dividend Option 7.54 10.3315 10.5267 7.69 3.30

Monthly Option 10.0910

Quarterly Option 10.1817

Half Yearly Option 10.1823



60

Fixed Fixed Fixed Fixed Fixed Fixed FixedMonthly Monthly Monthly Monthly Monthly Monthly Monthly

Plan - Plan – Plan – Plan – Plan – Plan – Plan –Quarterly Half Yearly Yearly Quarterly Quarterly Half Yearly Yearly

Series 1 Series 1 Series 1 Series 2 Series 3 Series 2 Series 2

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

2000 2000 2000 2001 2001 2001 2001


Growth Option # # # # # # #

Dividend Option # # # # # # #

Net Income per unit 0.1746 0.23 0.28 0.17 0.09 0.01 0.02

Dividends 0.6053@ 0.3666@ - - - - -

Transfer to Reserves - - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 3.05%* 2.80%* 3.35%* 1.81%* 1.02%* 0.09%* 0.36%*

Benchmark Index N.A N.A N.A N.A N.A N.A N.A

Benchmark Index Returns N.A N.A N.A N.A N.A N.A N.A

Net Assets end of period (Rs. Crore) 130.74 2.51 10.06 9.75 80.94 3.26 95.08


Growth Option 10.3045 10.2803 10.3352 10.1812 10.1020 10.0093 10.0356

Dividend Option 10.0643 10.2803 10.3352 10.1812 10.1020 10.0093 10.0356

Ratio of Recurring Exps to Net Assets 0.50% 0.55% 0.60% 0.50% 0.50% 0.55% 0.60%

Notes:

The figures for Prudential ICICI Monthly Income Plan and Prudential ICICI Fixed Maturity Plan are for the period from the date ofopening of the scheme.

Returns since inception are for the growth plan in each case.

In the absence of appropriate benchmarks for the schemes having debt as well as equity components, Nifty has been used as thebenchmark index for the time being.

While arriving at Net Income per unit, Income Equalisation Reserve has not been considered and it is calculated on the basis ofclosing units.

* Prudential ICICI Fixed Maturity Plan and Prudential ICICI Monthly Income Plan have not completed one year since thedate of their launch. Returns are computed in absolute terms and for Growth Options only from the date of allotment.The NAV on the date of allotment is taken as Rs.10 for computation of returns.

@ Including distribution tax.

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

## Dividend was declared under ICICI Premier for all the unitholders as on July 25, 1995 @Rs. 0.80 per unit. For computationof returns NAV of ICICI Premier has been considered after adjusting the dividend declaration.

### As these schemes were launched before the launch of Nifty, benchmark index returns are not provided.


61

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

Premier Power Growth Income Liquid FMCG


Date of Allotment February 7, October 1, July 9, July 9, June 24, March 31,1994 1994 1998 1998 1998 1999


Growth Option 10.10 10.22 17.67 13.85 12.9252 9.06

Dividend Option - - 9.27 10.21 11.8316 8.30

Net Income per unit 0.82 (2.37) (1.91) 1.85 1.06 (2.15)

Dividends - - 0.80 @1.5428 @0.8994 -


Compounded Annualised Returns(Based on NAVs of Growth Option) 2.82% 2.39% 20.40% 13.83% 9.21% -4.24%

Benchmark Index Nifty Nifty Nifty N.A N.A CNX FMCG

Return compared to Benchmark Index # # # # # # 4.43% N.A N.A -7.43%

Net Assets end of period (Rs.crore) 51.08 29.87 350.22 2711.89 1372.62 53.60


Growth Option ##11.54 11.94 19.98 16.21 13.9383 8.78

Dividend Option - - 9.71 10.33 11.8273 8.05


Tax Plan Gilt Treasury Gilt Balanced Technology Monthly Gilt Investment Fund Fund Income Treasury

Plan 1 YearPlusPlan


Date of Allotment August 19, August 19, August 19, November 03, March 3, November 10, April 30, 1999 1999 1999 1999 2000 2000. 2001.


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 -


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


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 -



62

Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed MaturityPlan - Quarterly 1 Plan –Half Yearly 1 Plan –Yearly 1 Plan - Quarterly 2 Plan – Quarterly 3


Date of Allotment December 20. 2000 December 20, 2000 December 20, 2000 January 22, 2001 February 20, 2001


Growth Option 10.3045 10.2803 10.3352 10.1812 10.1020

Dividend Option 10.0643 10.2803 10.3352 10.1812 10.1020

Net Income per unit 32.49 2.48 1.05 4.17 2.05

Dividends @0.8781 @0.9015 @1.0473 @0.8543 @0.9234

Transfer to Reserves - - - - -

Compounded Annualised Returns(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%

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

Historical Per Unit Statistics March 22, March 22, June 21, September 20,

Date of Allotment 2001 2001 2001 2001


Growth Option 10.0093 10.0356 # #

Dividend Option 10.0093 10.0356 # -

Net Income per unit 0.5520 0.99 0.67 0.39

Dividends @0.7765 @0.9231 - -

Transfer to Reserves - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 8.15% 10.03% 6.75%* 4.38%*

Benchmark Index N.A N.A N.A N.A

Return compared to Benchmark Index N.A N.A N.A N.A

Net Assets end of period (Rs. Crore) 0.16 102.28 7.80 6.36


Growth Option 10.8363 11.0292 10.6753 10.4381

Dividend Option 10.0388 10.0110 10.6753 10.4381

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

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


Date of Allotment August 31, 2001 August 31, 2001 October 25, 2001 March 22, 2002


Growth Option # # # #

Dividend Option - - - -

Net Income per unit 0.45 0.50 0.33 0.01

Dividends - - 0.3430@ -


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.A

Return compared to Benchmark Index 7.19 N.A N.A N.A



Growth Option 11.16 10.89 10.3915 10.0354

Dividend Option - - 10.0433 -



63

Index Fund Long term Plan Sweep Plan


Date of Allotment February 26, 2002 March 28, 2002 March 6, 2002


Growth Option 10.0000 10.0000 10.0000

Dividend Option - - -

Net Income per unit 0.01 0.01 0.03

Dividends - - -

Transfer to Reserves - - -

Compounded Annualised Returns (Based on NAVs of Growth Option) -4.80%* 0.10%* 0.52%*

Benchmark Index Nifty N.A N.A

Return compared to Benchmark Index -5.03% N.A N.A

Net Assets end of period (Rs. Crore) 7.73 50.05 5.31


Growth Option 9.52 10.0096 10.0520

Dividend Option - - -

Ratio of Recurring Exps to Net Assets 1.25% 0.80% 1.25%

Notes:

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 theperiod of the respective condensed financial information whereas the returns compared to benchmark index are computedfor the financial year.

* Prudential ICICI Fixed Maturity Plan- Yearly 3,4 &5, Prudential ICICI Gilt Treasury 1 Year Plus Plan, Prudential ICICI ChildCare Plan – Gift Plan & Study Plan, Prudential ICICI Short Term Plan, Prudential ICICI Long Term Plan, Prudential ICICISweep Plan and Prudential ICICI Index Fund have not completed one year since the date of their launch. Returns arecomputed in absolute terms and for Growth Options only from the date of allotment. The NAV on the date of allotmentis taken as Rs.10 for computation of returns.

@ Including distribution tax.

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


# # # As these schemes were launched before the launch of Nifty, Benchmark index returns are not provided.


64

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

Premier Power Growth Income Liquid FMCG Tax Plan Gilt Treasury


Date of Allotment February 7, October 1, July 9, July 9, June 24, March 31, August 19, August 19,1994 1994 1998 1998 1998 1999 1999 1999

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

NAV at the beginning of the year (Rs.) 11.54 11.94

Growth Option 19.98 16.21 13.9383 8.78 13.00 13.5238

Dividend Option - - 9.71 10.33 11.8273 8.05 9.48 10.2799

Net Income per unit 1.70 1.22 (0.30) 1.56 0.87 0.25 0.83 1.46

Dividends - 2.70 - 0.45 0.7558 - - 0.1910

Transfer to Reserves - - - - - - - -

Compounded Annualised Returns(Based on NAVs of Growth Option) 3.41% 2.96% 13.26% 13.28% 8.68% -8.04% 3.79% 10.51%

Benchmark Index Crisil Nifty Nifty Crisil Crisil CNXFMCG Nifty I-SecBalanced Composite Liquid Si-Bex

fund Index Bond fund fund IndexReturn compared to Benchmark Index @ @ 3.30% 0.44% 0. 64% 5.60% 1.56% -1.60%

Net Assets end of period (Rs.crore) 15.70 31.68 275.91 3173.49 1544.91 33.47 24.14 34.50

NAV at the end of the period (Rs.) 12.50 - - - - - - -

Growth Option - 12.81 18.02 18.0347 14.8729 7.15 11.44 14.3534

Dividend Option - 10.28 8.76 11.0188 11.8419 6.56 8.34 10.7122

Monthly Option - - - - 11.8699 - - -

Institutional Option Growth - - - 18.0374 14.8760 - - -

Institutional Option Dividend - - - 11.0196 11.8419 - - -

Ratio of Recurring Exps to Net Assets -Regular Plan -Annualised 2.50% 2.47% 2.33% 1.59% 0.99% 2.05% 2.15% 1.10%

Ratio of Recurring Exps to Net Assets-Institutional Plan- Annualised - 1.10% 0.75%

Gilt Balanced Technology Monthly Fixed Fixed Fixed GiltInvestment Fund Fund Income Plan Maturity Maturity Maturity Treasury

Plan - Qtly 1 Plan – Plan –Yearly 1 1 Year PlusHalf Yearly 1 Plan***


Date of Allotment August 19, November 03, March 3, November 10, December 20, December 20, December 20, April 30,1999 1999 2000 2000 2000 2000 2000 2001

NAV at the beginning ofthe year (Rs.)

Growth Option 16.1344 9.29 3.25 11.7643 11.2079 11.1988 11.2644 -

Dividend Option 10.8319 8.58 3.25 - 10.0378 10.2373 10.1970 10.0213

Monthly Option - - - 10.1792 - - -

Quarterly Option - - - 10.2228 - - - -

Half Yearly Option - - - 10.2187 - - - -

Net Income per unit 1.88 0.68 (0.35) 1.02 0.14 5.90 13.82 N.A.

Dividends 0.4320 - - - - - -

Monthly option - - - 0.6692 - - - -

Quarterly option - - - 0.6963 - - - -

Half-Yearly Option - - - 0.7346 - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) 17.56% -1.90% -34.50% 10.69% 7.99% 7.97% 8.27% -

Benchmark Index I –Sec Crisil ET Crisil MIPSi-Bex Balanced MINDEX Blended

Fund Index Index $ $ $ —

Return compared to Benchmark Index 2.65% 4.95% 6.58% 1.60% # # # —

Net Assets end of period (Rs. Crore) 457.20 153.86 111.25 275.36 34.98 0.51 0.43 -


Growth Option 17.9508 9.37 2.72 12.7427 11.9131 11.9083 11.9840 -

Dividend Option 11.5832 8.65 2.72 - 10.6695 10.8855 10.8482 -

Monthly Option - - - 10.3323 - - - -

Quarterly Option - - - 10.3550 - - - -

Half Yearly Option - - - 10.3177 - - - -

Institutional Option – Monthly Dividend 10.6701

Ratio of Recurring Exps to Net Assets 1.15% 2.34% 2.42% 1.58% 0.55% 0.55% 0.60% 0.30%

Ratio of Recurring Exps to Net Assets-

Institutional Plan- Annualised 0.25%


65

Fixed Fixed Fixed Fixed Fixed Fixed Child Care Child Care Short TermMaturity Maturity Maturity Maturity Maturity Maturity Plan-Gift Plan-Study Plan

Plan - Plan – Plan – Half Plan – Plan – Plan - Option OptionQuarterly 2 Quarterly 3 Yearly 2 Yearly 2 Yearly 3 Yearly 4


Date of Allotment January February March March June Sept August August October22, 2001 20, 2001 22, 2001 22, 2001 21, 2001 20, 2001 31, 2001 31, 2001 25, 2001

NAV at the beginning ofthe 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 MIP CrisilBalanced Blended Composite

Fund Index Index Bond 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 Maturity Index Fund Long term Sweep Plan Fixed Maturity Fixed MaturityPlan – Yearly 5 Plan One Year Plan – One Year 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

NAV at the beginning of the year (Rs.) 9.5200 10.0520 # #

Growth Option 10.0354 10.0096

Dividend Option - - - - - -

Net Income per unit 0.85 (0.44) 0.79 0.20 0.66 0.32

Dividends - - - - - -


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

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

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


NAV at the end of the period 8.3278 11.3634 10.5508 10.6555 10.3140

Growth Option 10.8643 - - - - -

Dividend Option 10.8643 - - - - -


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


66

Fixed Flexible Dynamic Plan SPICE Fixed FloatingMaturity Plan – Income Plan Maturity Plan – Rate Plan

Yearly 8*** Yearly 12


Date of Allotment September 17, September 27, October 31, January 10, March 21, March 29,2002 2002 2002 2003 2003 2003

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

Net Income per unit NA 0.73 (0.15) (0.04) 0.01 0.004

Dividends - - - - - -

Transfer to Reserves - - - - -

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

Benchmark Index $ I-Sec Si-Bex Nifty SENSEX $ CRISILLiquid Fund

Index

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


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

Growth Option 10.0191


Institutional Option Growth 10.0208


Ratio of Recurring Exps to Net Assets-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 theperiod of the respective condensed financial information whereas the returns compared to benchmark index are computedfor the financial year.

* Fixed Maturity One Year Plan – Series 6, 7, 8, Fixed Maturity Plan – Yearly 12, Prudential ICICI Flexible Income Plan, 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



$ Appropriate benchmark index is not available.

@ As these schemes were launched before the launch of the respective benchmarks, Benchmark indices returns are notprovided

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


67

d) Condensed Financial Information for the period ended December 31, 2003**Premier Power Growth Income Liquid FMCG Tax Plan Gilt Treasury


Date of Allotment February 7, October 1, July 9, July 9, June 24, March 31, August 19, August 19,1994 1994 1998 1998 1998 1999 1999 1999

NAV at the beginning of the year (Rs.) 12.50 - - - - - - -

Growth Option - 12.80 18.02 18.0347 14.8729 7.15 11.44 14.3534

Dividend Option - 10.28 8.76 11.0188 11.8419 6.56 8.34 10.7122

Monthly Option - - - - - - -

Quarterly Option - - - - - - - -

Half Yearly Option - - - - - - - -

Institutional Option - Growth - - - 18.0374 14.8760 - - -

Institutional Monthly Option – Div. - - - - 11.8699 - - -

Institutional Option - Dividend - - - 11.0196 11.8419 - - -

@@@ Net Income per unit 1.11 1.78 7.90 1.3832 0.3260 0.53 13.14 1.5245

Dividends - 8.00 3.30 - - - 1.20 1.0800

Dividend Option (weekly) - - - - 0.4367 - - -

Institutional Dividend (Weekly) - - - - 0.4498 - - -

Institutional Plus Dividend (Weekly) 0.1393

Monthly Option - - - - 0.4212 - - -

Quarterly Option - - - 0.7056 4.5125 - - -

Quarterly Option -Institutional 0.7436 4.5125

Half yearly Option - - - 1.1936 - - - -

Half yearly Option - Institutional - - - 1.2177 - - - -

Fortnightly Dividend Option - - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - - -

Institutional Monthly Dividend Option - - - - 0.3635 - - -

Institutional Plus Daily Dividend Option 0.1440

Institutional Daily Dividend Option - 0.4431 - -

Dividend Option Daily - 0.4195 - -

Institutional Plus Monthly Dividend Option 0.0916


Compounded Annualised Returns(Based on NAVs of Growth Option) 4.36% 12.69% 27.93% 12.97% 8.16% 5.41% 30.37% 10.53

Benchmark Index Crisil Nifty Nifty Crisil Crisil CNX FMCG Nifty I-SecBalanced Composite Liquid fund Si-Bex

fund Index Bond fund IndexIndex

Return compared to Benchmark Index @ @ 21.24% -0.05% 0.36% 29.11% 86.40% 0.84%

Net Assets end of period (Rs.crore) 12.01 805.80 509.41 3,236.31 4,667.54 43.13 37.22 22.03

NAV at the end of the period ##14.04 - - - - - - -

Growth Option - 30.21 38.58 19.5172 15.4201 12.85 31.87 15.4868

Dividend Option - 13.96 14.45 10.6829 11.8330 11.78 21.03 10.4441

Dividend Option (Daily) - - - - 11.8514 - - -

Dividend (Fortnightly) - - - - - - - -

Dividend (Monthly Option) - - - - 11.8770 - - -

Dividend (Quarterly Option) - - - 11.2040 10.8538 - - -

Dividend Half yearly Option - - - - - - - -

Institutional Option Growth - - - 19.5924 15.4539 - - -

Institutional Plus Option Growth - 15.4619

Institutional Fortnightly Option –Dividend - - - - - - - -

Institutional Monthly Option – Dividend - - - - 11.9595 - - -

Institutional Plus Monthly Option – Dividend - 11.9648

Institutional Option Dividend – Daily - - - - 11.8502 - - -

Institutional Plus Option Dividend – Daily - 11.8515

Institutional Option Dividend – Quarterly - - - 11.2090 10.8840 - - -

Institutional Option Dividend - - - 10.7000 11.8435 - - -

Institutional Plus Option Dividend - - - - 11.8562

Ratio of Recurring Exps to Net Assets -Regular Plan -Annualised 2.50% 2.27% 2.31% 1.59% 0.86% 2.05% 2.15% 1.10%

Ratio of Recurring Exps to Net Assets-Institutional Plan- Annualised - - - 1.10% 0.64% - - -


Institutional Plus Plan- Annualised - - - - 0.60% - - -

** Un-audited


68

Gilt Balanced Technology Monthly Fixed Maturity Fixed Maturity Fixed MaturityInvestment Fund Fund Income Plan Plan - Qtly 1^ Plan – Half Plan –Yearly 1

Yearly 1^


Date of Allotment August 19, November 03, March 3, November 10, December 20, December 20, December 20,1999 1999 2000 2000 2000 2000 2000


Growth Option 17.9508 9.37 2.72 12.7427 11.9131 11.9083 11.9840

Dividend Option 11.5832 8.65 - - 10.6695 10.8855 10.8482

Monthly Option - - - 10.3323 - - -

Quarterly Option - - - 10.3550 - - -

Half Yearly Option - - - 10.3177 - - -

Institutional Option - Growth - - - - - - -

Institutional Monthly Option – Div. - - - - - - -

Institutional Option - Dividend - - - - 10.6701 - -

@@@ Net Income per unit 2.1547 4.51 0.49 0.4778 N.A. N.A. 1.3092

Dividends 1.8700 2.00 - - - 0.9947 -

Institutional Dividend - - - - 0.1692 - -

Dividend Option (weekly) - - - - - - -

Institutional Dividend (Weekly) - - - - - - -

Monthly Option - - - 0.5720 - - -


Half yearly Option - - - 0.4000 - - -

Half yearly Option - Institutional - - - - - - -

Fortnightly Dividend Option - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - -

Institutional Monthly Dividend Option - - - - - - -

Institutional Daily Dividend Option - - - - - - -

Dividend Option Daily - - - - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) 17.08% 12.85% -13.96% 12.67% N.A. N.A. 7.36%

Benchmark Index I –Sec Crisil ET Crisil MIP $ $ $Li-Bex Balanced MINDEX Blended

Fund Index Index

Return compared to Benchmark Index -3.22% 23.13% 46.85% -3.11% $ $ $

Net Assets end of period (Rs. Crore) 461.59 179.31 181.84 1,132.48 N.A. N.A. 0.0370

NAV at the end of the period 5.62

Growth Option 19.9213 16.54 14.5425 - - 12.4003

Dividend Option 10.9151 12.95 - - 11.2241

Dividend Option (Daily) - - - - - - -

Dividend (Fortnightly) - - - - - - -

Monthly Option - - - 11.1746 - - -


Half yearly Option - - - 11.3509 - - -

Institutional Option Growth - - - - - - -

Institutional Fortnightly Option –Dividend - - - - - - -

Institutional Monthly Option – Dividend - - - - - - -

Institutional Option Dividend – Daily - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - -

Institutional Option Dividend - - - - - - -

Ratio of Recurring Exps to Net Assets -Regular Plan - Annualised 1.15% 2.36% 2.44% 1.63% 0.55% 0.55% 0.60%


Institutional Plan- Annualised - - - - 0.25% - -


69

Fixed Fixed Fixed Fixed Fixed Fixed Child Care Child Care Maturity Maturity Maturity Maturity Maturity Maturity Plan-Gift Plan-Study

Plan - Plan – Plan – Half Plan – Plan – Plan - Option OptionQuarterly 2^ Quarterly 3^ Yearly 2^ Yearly 2 Yearly 3^ Yearly 4^


Date of Allotment January 22, February 20, March 22, March 22, June 21, Sept 20, August 31, August 31,2001 2001 2001 2001 2001 2001 2001 2001

NAV at the beginning of the year (Rs.) 10.67 11.42

Growth Option 11.7551 11.7293 11.4328 11.7817 11.5055 11.1635 - -

Dividend Option 10.6074 10.5122 10.5916 10.6939 - - - -

Monthly Option - - - - - - - -


Half Yearly Option - - - - - - - -

Institutional Option - Growth - - - - - - - -

Institutional Monthly Option – Div. - - - - - - - -

Institutional Option - Dividend - - - - - - - -

@@@ Net Income per unit N.A. N.A. NA 0.4176 N.A. N.A. 1.51 0.96

Dividends 0.0975 0.1051 0.8216 - 0.7908 - - -

Dividend Option (weekly) - - - - - - - -

Institutional Dividend (Weekly) - - - - - - - -



Half yearly Option - - - - - - - -

Half yearly Option - Institutional - - - - - - - -

Fortnightly Dividend Option - - - - - - - -

Institutional Fortnightly Dividend Option - - - - - - - -

Institutional Monthly Dividend Option - - - - - - - -

Institutional Daily Dividend Option - - - - - - - -

Dividend Option Daily - - - - - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) N.A. N.A. NA 7.24% N.A N.A. 33.91% 15.72%

Benchmark Index $ $ $ $ $ $ Nifty Crisil MIPBlended

Index

Return compared to Benchmark Index $ $ $ $ $ $ -6.72% 5.13%

Net Assets end of period (Rs. Crore) N.A. N.A. N.A. 4.1989 N.A N.A. 24.29 20.31

NAV at the end of the period - - 19.77 14.06

Growth Option - - - 12.1435 - - - -

Dividend Option - - - 11.0218 - - - -

Dividend Option (Daily) - - - - - - - -

Dividend (Fortnightly) - - - - - - - -



Half yearly Option - - - - - - - -

Institutional Option Growth - - - - - - - -

Institutional Fortnightly Option –Dividend - - - - - - - -

Institutional Monthly Option – Dividend - - - - - - - -

Institutional Option Dividend – Daily - - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - - -

Institutional Option Dividend - - - - - - - -

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


Institutional Plan- Annualised - - - - - - - -


70

Short Term Fixed Index Fund Long term Sweep Fixed FixedPlan Maturity Plan– Plan Plan Maturity One Maturity

Yearly 5 Year Plan – One Year Series 6 @@ Plan –

Series 7^


Date of Allotment October 25, March 22, February 26, March 28, March 6, July 21, August, 19,2001 2002 2002 2002 2002 2003 2002

NAV at the beginning of the year (Rs.) 8.3278 10.5508 10.6555 10.3140

Growth Option 11.2323 10.8643 - 11.3634 - - -

Dividend Option 10.7561 - - - - - -


Quarterly Option - - - - - - -

Half Yearly Option - - - - - - -

Institutional Option - Growth 11.2345 - - - - - -

Institutional Monthly Option – Div. - - - - - - -

Institutional Option - Dividend - - - - - - -

@@@ Net Income per unit 0.5987 0.3516 0.8349 0.9302 0.3119 1,268.6557 NA

Dividends - - - - - - -

Dividend Option (weekly) - - - - - - -

Institutional Dividend (Weekly) - - - - - - -

Monthly Option 0.6265 - - - - - -


Half yearly Option - - - - - - -

Half yearly Option - Institutional - - - - - - -

Fortnightly Dividend Option 0.4400 - - - - - -

Institutional Fortnightly Dividend Option 0.4670 - - - - - -

Institutional Monthly Dividend Option 0.4115 - - - - - -

Institutional Daily Dividend Option - - - - - - -

Dividend Option Daily - - - - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) 7.93% 6.53% 29.93% 12.34% 4.69% 20.32%* NA

Benchmark Index Crisil $ Nifty Crisil Crisil $ $Short term Composite Liquid FundBond Fund Bond Fund Index

Index

Return compared to Benchmark Index 0.44% $ 2.39% 0.08% -0.29% $ $

Net Assets end of period (Rs. Crore) 2030.20 5.67 18.97 253.20 37.65 0.02 N.A.

NAV at the end of the period - 11.1896 16.2054 12.2744 10.8700 12.0323 N.A

Growth Option 11.8142 - - - - - -

Dividend Option 10.6668 - - - - - -

Dividend Option (Daily) - - - - - - -

Dividend (Fortnightly) 10.6137 - - - - - -



Half yearly Option - - - - - - -

Institutional Option Growth 11.8344 - - - - - -

Institutional Monthly Option Dividend 10.9088 - - - - - -

Institutional Fortnightly Option –Dividend 10.8531 - - - - - -

Institutional Option Dividend – Daily - - - - - - -

Institutional Option Dividend – Quarterly - - - - - - -



Institutional Plan- Annualised 0.80% - - - - - -


71

Flexible lexible Dynamic Plan SPICE Fixed Maturity FloatingIncome Plan FIncome Plan – Rate Plan

Plus Plan^ Yearly 12


Date of Allotment September 27, May 22, October 31, January 10, March 17, March 28, 2002 2003 2002 2003 2003 2003

NAV at the beginning of the year (Rs.) 10.7745 # 10.2799 30.4342 10.0046

Growth Option - - - - 10.0191 -


Monthly Option - - - - - -

Quarterly Option - - - - - -

Half Yearly Option - - - - - -

Institutional Option - Growth - - - - 10.0208 -

Institutional Monthly Option – Div. - - - - - -

Institutional Option - Dividend - - - - - -

@@@ Net Income per unit 0.7280 N.A. 6.7924 18.7269 0.5092 0.1325

Dividends - - - - - 0.3000

Dividend Option (weekly) - - - - - -

Dividend Option (Quarterly) 0.4000

Institutional Dividend (Weekly) - - - - - -



Half yearly Option - - - - - -

Half yearly Option - Institutional 0.4000 - - - - -

Fortnightly Dividend Option - - - - - -

Institutional Fortnightly Dividend Option - - - - - -

Institutional Monthly Dividend Option - - - - - -

Institutional Daily Dividend Option - - - - - -

Dividend Option Daily - - - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) 14.56% N.A. 101.59% *75.16% *4.96% *3.85%

Benchmark Index I-Sec N.A. Nifty BSE SENSEX $ CRISILComposite Liquid Fund

Index

Return compared to Benchmark Index -1.26% N.A. 28.14% 1.79% $ 0.50%

Net Assets end of period (Rs. Crore) 1425.85 N.A. 173.77 16.53 44.56 209.54

NAV at the end of the period N.A. 22.6651 58.8359 -

Growth Option 11.8680 10.4962 10.3855

Dividend Option 10.6222 - - - - 10.0843

Dividend Option (Daily) - - - - - -

Dividend (Fortnightly) - - - - - -



Half yearly Option - - - - - -

Institutional Option Growth - - - - 10.5416 -

Institutional Fortnightly Option –Dividend - - - - - -

Institutional Monthly Option – Dividend - - - - - -

Institutional Option Dividend – Daily - - - - - -

Institutional Option Dividend – Quarterly - - - - - -

Institutional Option Dividend - - - - - -



Institutional Plan- Annualised - - - - 0.20% -


72

Fixed Maturity Plan – Fixed Maturity Plan – Fixed Maturity Plan – Gilt FundNRI Series 4 – NRI Series 4 – NRI Series 6 – Investment Plan -

Half Yearly Quarterly Quarterly PF Option


Date of Allotment October 21, 2003, October 21, 2003, November 21, 2003, November 19, 2003

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

Growth Option

Dividend Option

@@@ Net Income per unit 0.1031 0.0848 0.0442 0.0999

Dividends - - - -


Compounded Annualised Returns(Based on NAVs of Growth Option) *1.16% *0.87% *0.49% *1.12%

Benchmark Index $ $ $ I-Sec Li Bex

Return compared to Benchmark Index $ $ $ 0.15%


NAV at the end of the period 10.1122

Growth Option

Dividend Option 10.1159 10.0867 10.0485


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 December 31, 2003.

3) The Compounded annualized returns of each scheme are computed from inception of the Scheme till the end of theperiod of the respective condensed financial information whereas the returns compared to benchmark index are computedfor the financial year.

* Fixed Maturity One Year Plan – Series 6, Fixed Maturity Plan – Yearly 12, SENSEX Prudential ICICI Exchange Traded Fund,Prudential ICICI Floating Rate Plan, Fixed Maturity Plan – NRI Series 4 – Half Yearly and Quarterly Options, Fixed MaturityPlan – NRI Series 6 –Quarterly Option and Prudential ICICI Gilt Fund Investment Plan – PF Option have not completedone year since the date of their launch. Returns are computed in absolute terms and for Growth Options only from thedate of allotment. The NAV on the date of allotment is taken as Rs.10 for computation of returns

** Un-audited.



$ Appropriate benchmark index is not available.

@ As these schemes were launched before the launch of the respective benchmarks, Benchmark indices returns are notprovided

@@ All the unitholders under Prudential ICICI Fixed Maturity Plan – One Year Plus Series – 6 have redeemed their units onJuly 14, 2003 and there was fresh subscription on July 21, 2003 at Rs. 10.00, hence, simple absolute returns have beencalculated for the period of 10 days.

@@@ The Net Income per unit mentioned has excluded Income equalisation & marked to market calculated on the basis ofmarket value of net assets of the Scheme on the valuation date, divided by the number of units outstanding on thatdate. It may be noted that, as it merely indicates the net income per unit on the valuation date calculated based uponprevailing market value of the investment of the scheme on the given date, it is subject to vary from time to time anddoes not reflect any income / loss of the scheme.

^ All the unit holders under Prudential ICICI Fixed Maturity Quarterly Plan Series 1, 2 & 3, Half Yearly Plan Series 1 and 2,Yearly Plan Series 3, 4 & 7 and Prudential ICICI Flexible Income Plus Plan have redeemed their units and unit balance arenil as on the date of this report


73

SECTION VI

UNITHOLDERS RIGHTS & SERVICESa) Investor Services

The Fund believes in providing the investors with a superior service to make the investors’ experience in dealing with 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 Transactions

The Fund intends to make every transaction for the investor a simple and convenient one. The Fund plans to provide thefollowing services: -

i) Customer Service Centres in major metros

The AMC presently has Customer Service Centres in 5 main cities and various other cities. Over a period of time, theAMC will endeavour to add further Customer Service Centres and/or sales offices in other cities. Unitholders can goto these Service Centres / Sales Offices for enquiries and transactions during business hours.

ii) Process transactions in a timely manner

Under the Regulations, the Fund/ the Registrar / AMC shall despatch to the Unitholders the dividend warrants withinthirty days of the date of declaration of dividend and the redemption proceeds within ten Business Days from thedate 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 five Business Daysfrom the date of acceptance of a transaction request.

Ordinarily, non-monetary transactions or requests will be processed, (with the exception of issue of Unit certificates)within 7 (seven) Business Days. Investors should note that completion of monetary/ non-monetary transactions within 5 /7 Business Days as indicated above would be done on “best efforts” basis and completion of all such transactions aresubject to the time limits as prescribed under the Regulations.

c) Problem Resolution

The Fund will follow-up with Customer Service Centres and Registrar on complaints and enquiries received from investorsfor resolving them promptly.

For this purpose, Mr. Gautam Guha has been appointed the Investor Relations Officer. He can be contacted at the CorporateOffice of the AMC. The address and phone numbers are:

Contractor Building 3rd Floor

41, R. Kamani MargBallard Estate, Mumbai 400 038Phone: (91)(22) 22679676/ 22697989/ 22692929Fax: (91)(22) 22679677e-mail: [email protected]

d) Information about the Scheme

The Fund will publish an abridged summary of an audited annual report of the Scheme as on March 31 of each year, andan abridged Scheme wise annual report shall be mailed to all Unitholders, not later than six months from March 31 ofeach year. The abridged annual report shall contain such details as are required under the Regulations.

The Fund shall before the expiry of one month from the close of each half year, that is as on March 31 and September30, publish its unaudited financial results in one English daily newspaper circulating all India and in a newspaper publishedin the language of the region where the Head Office of the Fund is situated and update the same on AMC’s website atwww.pruicici.com within 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 30

th September) send to

the Unitholders 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.

The AMC can send the annual report, portfolio statement, account statements and other correspondence using e-mailas an alternate mode of communication, with the consent of the unit holders.

e) NAV Information

The NAV of the Scheme will be calculated daily and announced by the Fund on each Business Day. The information onNAV may be obtained by the Unitholders, on any day, by calling the office of the AMC or any of the Investor ServiceCentres or on the website of the AMC www.pruicici.com. The Fund will use its best endeavour to publish NAVs daily, inat least two daily newspapers. Further, the AMC shall endeavour to publish the Purchase & Redemption prices of Unitsdaily in a newspaper with all India circulation.


74

AMC shall update the NAVs on the website of Association of Mutual Funds in India - AMFI (www.amfiindia.com) by8.00-p.m. everyday. In case of any delay, the reasons for such delay would be explained to AMFI and SEBI by the next day.If the NAVs are not available before commencement of business hours on the following day due to any reason, the Fundshall issue a press release providing reasons and explaining when the Fund would be able to publish the NAVs.

f) Disclosure of information under the Regulations

The Fund will, not later than six months after the close of each financial year (March 31), publish through an advertisement,an abridged Annual Report relating to the Scheme and mail to the Unitholders an abridged scheme wise annual report.Further, the full text of the Annual Report will be available for inspection at the office of the Fund. A copy of the AnnualReport 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 September30, publish its unaudited financial results in one English daily newspaper having all India circulation and in a newspaperpublished in the language of the region where the Head Office of the Fund is situated and update the same on AMC’swebsite at www.pruicici.com within 30 days and 60 days in two different formats prescribed in terms of SEBI’s circulardated April 20, 2001 and on AMFI’s website at www.amfiindia.com within 30 days from the close of each half year, inthe prescribed formats.

g) Rights of Unitholders of the Scheme and the Plans thereunder

1. Unitholders of a Plan have a proportionate right in the beneficial ownership of the assets of that Plan.

2. When the Fund declares a dividend under the Scheme, the Fund shall dispatch the dividend warrants to the Unitholderswithin 30 days from the date of declaration of dividend.

3. The Trustee is bound to make such disclosures to the Unitholders as are essential in order to keep them informedabout any information known to Trustee which may have an adverse bearing on their investments.

4. The appointment of an AMC for the Fund can be terminated by majority of the Trustee or by 75% of the Unitholdersof the Scheme of the Fund and any change in the appointment of the AMC shall be subject to the prior approval ofSEBI and the Unitholders of the Scheme and the Plans thereunder.

5. The Trustee is obliged to convene a meeting on a requisition of 75% of the Unitholders of the Scheme and thePlans thereunder.

6. 75% of the Unitholders of a Scheme and the Plan thereunder can pass a resolution to wind up the Scheme and thePlans thereunder.

7. Unitholders have the right to inspect all the documents listed under “Documents Available for Inspection”.

8. The Trustee shall obtain the consent of the Unitholders:

a) whenever required to do so by SEBI, in the interest of Unitholders

b) whenever required to do so on the requisition made by three-fourths of the Unitholders of the Scheme and theplans thereunder.

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

9. The Trustees shall ensure that no change in the fundamental attributes of any scheme or the trust or fee and expensespayable or any other change which would modify the scheme and affects the interests of unit holders is carried outunless:

– a written communication about the proposed change is sent to each Unitholder and

– an advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaperpublished in the language of the region where the Head Office of the mutual fund is situated; and theUnitholders 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 Plans will beobtained through voting, by mail. Detailed modalities of the same, including the principles for entitlement of votesfor each Unitholder will be finalized in consultation with and after obtaining the approval of SEBI and the Trustee.

10. Annual report containing accounts of the AMC would be displayed on the websites of the Fund (i.e. www.pruicici.com)Unitholders, if they so desire, may request for the annual report of the AMC.

h) Duration of the Scheme and the Plans thereunder/Winding up

The duration of the Scheme and the Plans thereunder is perpetual. The AMC, the Fund and the Trustee reserve the rightto make such changes/alterations in the Scheme and the Plans thereunder (including the charging of fees and expenses)offered under this Offer Document to the extent permitted by the applicable Regulations. However, in terms of theRegulations, a Scheme and the Plans thereunder may be wound up after repaying the amount due to the Unitholders:

1. On happening of any event, which in the opinion of the Trustee, requires the Scheme and the Plans thereunder tobe wound up, OR

2. If seventy five percent (75%) of the Unitholders of the Schemes and the Plans thereunder pass a resolution that theScheme or any of its Plans be wound up, OR


75

3. If 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 or any of its Plans are so wound up, the Trustee shall give notice of the circumstances leading to thewinding up of the Scheme or any of its Plans 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 or any of its Plans so wound up;

2. Cease to create or cancel Units in the Scheme or any of its Plans;

3. Cease to issue or redeem Units in the Scheme or any of its Plans.

i) Procedure and manner of Winding up

The Trustee shall call a meeting of the Unitholders of the relevant Plan / Scheme to approve by simple majority of theUnitholders present and voting at the meeting for authorizing the Trustee or any other person to take steps for thewinding up of the Scheme or any of its Plans.

The Trustee or the person authorized above shall dispose of the assets of the Scheme or any of its Plans concerned in thebest interest of the Unitholders of the Scheme or any of its Plans.

The proceeds of sale realized in pursuance of the above, shall be first utilized towards discharge of such liabilities as aredue and payable under the Scheme or any of its Plans as the case may be, and after meeting the expenses connectedwith such winding up, the balance shall be paid to Unitholders in proportion to their respective interest in the assets ofthe Scheme or any of its Plans, as on the date the decision for winding up 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 or any ofits Plans before winding up, net assets available for distribution to the Unitholders and a certificate from the auditors ofthe Fund.

Notwithstanding anything contained herein above, the provisions of the Regulations in respect of disclosures of half-yearly reports and annual reports shall continue to be applicable until winding up is completed or the Scheme ceases toexist.

After the receipt of the report referred to above, if SEBI is satisfied that all measures for winding up of the Scheme or anyof its Plans have been complied with, the Scheme or any of its Plans shall cease to exist.

j) Tax benefits of investing in the Mutual Fund

The following information is provided only for general information purposes. In view of the individual nature of taxbenefits, each investor is advised to consult with his or her own tax consultant with respect to the specific tax implicationsarising out of their participation in the scheme.

The Scheme’s auditors, N. M. Raiji and Co. have confirmed that based on the law in force, the following benefits mayaccrue to the respective assesses:

1.1.1 a. TO THE FUND

The Income of the Fund registered under Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulationsmade thereunder will be exempt from income tax in accordance with the provisions of section 10(23D) of the Act. Theincome received by the Fund is not liable for deduction of tax at source.

The Finance Act 2003 has amended the provisions of section 115R of the Act, whereby the Mutual Fund will be liable topay additional income tax at the rate of 12.5% plus applicable surcharge, on the income distributed by the Fund.

In view of the above amendment made by the Finance Act 2003, the Fund not being an open-ended equity orientedfund would be liable to pay additional tax on the income distributed by it on or after April 1, 2003.

1.1.2. b. TO THE UNITHOLDERS

i) INCOME RECEIVED FROM MUTUTAL FUND

Finance Act 2003 has inserted section 10(35), whereby any income received in respect of units of Mutual Fundspecified under clause (23D) of section 10, in respect of Assessment Year 2004-2005 will be exempt from incometax in the hands of the unit holders. Further, it has been clarified that income arising from transfer of units ofMutual Fund shall not be exempt under section 10(35).

In view of the amendment, no tax would be payable by unit holders in respect of income distributed by the Fundand no tax needs to be deducted at source thereon by the Fund.


76

ii) LONG TERM CAPITAL GAINS ON TRANSFER OF UNITS

� For Individuals and HUFs

Long-term Capital Gains in respect of Units held for a period of more than 12 months will be chargeable undersection 112 of the Act, at a rate of 20% plus surcharge, asif applicable. Capital gains would be computed aftertaking into account cost of acquisition as adjusted by Cost Inflation Index notified by the Central Governmentand expenditure incurred wholly and exclusively in connection with such transfer.

In the case, where taxable income as reduced by long term capital gains is below the exemption limit, the longterm capital gains will be reduced to the extent of the shortfall and only the balance long term capital gains willbe charged at the flat rate of 20% plus surcharge, as may be applicable.

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

� 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. Capital gains would be computedafter taking into account cost of acquisition as adjusted by Cost Inflation Index notified by the Central Governmentand expenditure incurred wholly and exclusively in connection with such transfer.

It is further provided that an assessee will have an option to seek concessional rate of 10%, plus surcharge, asapplicable, to long term capital gains computed without adjusting for cost for indexation.

� For Non-resident Indians

Under section 115E of the Act for non-resident Indians, income by way of long-term capital gains in respect ofUnits is chargeable at the rate of 20% plus applicable surcharge. Such long-term capital gains would be calculatedwithout indexation of cost of acquisition.

Non-resident Indians may opt for computation of long term capital gains as per section 112, which is morebeneficial.

� For Overseas Financial Organisations, including Foreign Institutional Investors fulfilling conditions laiddown under section 115AB (Offshore Fund)

Under section 115AB of the Act, income by way of long term capital gains in respect of units purchased inforeign currency held for a period of more than 12 months will be chargeable to tax at the rate of 10%, plussurcharge, as may be applicable. Such gains would be calculated without indexation of cost of acquisition.

iii) SHORT TERM CAPITAL GAINS

Short term Capital Gains in respect of Units held for a period of not more than 12 months is added to the totalincome. Total income including short-term capital gains is chargeable to tax as per the relevant slab rates.

Income Tax Rates

The maximum tax rates applicable to different categories of assessees are as follows:

Resident individuals and HUF 30% plus surchargePartnership Firms 35% plus surchargeIndian companies 35% plus surchargeNon Resident Indians 30% plus surchargeForeign Companies 40% plus surcharge

As per the Finance Act 2003, a surcharge of 2.5% on the income tax would be applicable for all categories ofassesses except in the case of individuals and HUF. With regards to individuals and HUF having a total income exceedingRs. 850,000, a surcharge of 10% has been levied by the Finance Act 2003.

iv) SHORT TERM CAPITAL LOSSES

According to sub-section (7) of section 94, if any person buys or acquires units within a period of three monthsprior to the record date fixed for declaration of dividend or distribution of income and sells or transfers the samewithin a period of three months from such record date, then capital losses arising from such sale to the extent ofdividend or income received or receivable on such units, which are exempt under the Act, will be ignored for thepurpose of computing his income chargeable to tax.

v) TAX DEDUCTION AT SOURCE

� For Income in respect of units:

In view of the amendments made by the Finance Act 2003 in section 10(35), section 194K and section 196A,no tax shall be deducted in respect of any income credited or paid on or after April 1, 2003 in respect of unitsof the Fund.

� 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 (undersection 194K) vide circular no.715 dated August 8, 1995 issued by the Central Board for Direct Taxes (CBDT).


77

(ii) In respect of Non- Resident Unit holders:

Under section 195 of the Income Tax Act, 1961, tax shall be deducted at source in respect of capital gainsas under:

a. In case of non resident other than a company any other person -� Long term capital gains 20% plus surcharge� Short term capital gains 30% plus surcharge

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

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

As per circular no. 728 dated October 1995 by CBDT, in the case of a remittance to a country with which aDouble Taxation Avoidance Agreement (DTAA) is in force, the tax should be deducted at the rate providedin the Finance Act of the relevant year or at the rate provided in DTAA whichever is more beneficial to theassessee.

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

Under section 54EC of the Act

As provided under section 54EC of the Income Tax Act, 1961, where an assessee has made capital gains fromthe transfer of units held in Mutual Fund Scheme for a period exceeding 12 months and the assessee has anytime within a period of 6 months after the date of such transfer, invested the whole of the capital gains in thelong term specified assets i.e., in bonds redeemable after 3 years issued by the National Bank for Agricultureand Rural Development, or by the National Highways Authority of India or by the Rural Electrification CorporationLimited or by National Housing Bank or by the Small Industries Development Bank of India, such capital gainsshall be exempted from tax on capital gains under section 54EC of the Income Tax Act 1961. However, if theassessee has invested only a part of the capital gains, he will be eligible for the proportionate exemption.

Under section 54ED of the Act

Under Section 54ED, capital gains arising from the transfer of units held in the Mutual Fund Scheme for aperiod exceeding 12 months will be exempt, if the assessee has, any time within a period of 6 months after thedate of such transfer, invested the whole of the capital gains in acquiring equity shares forming part of aneligible issue of capital. However, if the assessee has invested only a part of the capital gains, he will be eligiblefor the proportionate exemption. An eligible issue of capital means an issue of equity shares offered forsubscription to the public by a public company formed and registered in India.

vi) INVESTMENTS BY CHARITABLE AND RELIGIOUS TRUSTS IN THE PLAN

Units of a Mutual fund Scheme referred to in clause 23D of section 10 of the Income Tax Act, 1961, constitute aneligible avenue for investment by charitable or religious trusts per rule 17C of the Income Tax Rules, 1962, read withclause (xii) of sub-section (5) of section 11 of the Income Tax Act, 1961.

vii) WEALTH TAX

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

k. UNCLAIMED REDEMPTION / DIVIDEND AMOUNT

The unclaimed Redemption amount may be deployed by the Mutual Fund in call money market or money marketinstruments only and the investors who claim these amounts during a period of three years from the due date shall bepaid at the prevailing Net Asset Value. After a period of three years, this amount will be transferred to a pool accountand the investors can claim the amount at NAV prevailing at the end of the third year. The income earned on such fundswill be used for the purpose of investor education. The AMC will make a continuous efforts to remind the investorsthrough letters to take their unclaimed amounts. Further, the investment management fee charged by the AMC formanaging unclaimed amounts shall not exceed 50 basis points.

Unclaimed Dividend / Redemptions in respect of the open ended funds normally represent the time lag between fundingof the respective accounts (with bank) by the AMC and the time taken for presentation of redemption/dividend warrantsby the investors. No significant delay in the process is noticed. Hence the details in respect of open-ended funds is notmentioned.

Details in respect of ICICI Premier are given below -

As of March 31, 2003 As of December 31, 2003

Unclaimed Redemption Amount Rs. 8.28 Crores in respect of Rs. 7.14 Crores in respect of36,632 investors 32,120 investors

Unclaimed Dividend Amount Rs.0.03 Crores Rs. 0.03 Crores


78

SECTION VII

OTHER MATTERS

a) UNITHOLDER GRIEVANCES REDRESSAL MECHANISM

Investor grievances/ correspondences are normally received at AMC office or at the Customer Service Centres or directlyby the Registrar. All grievances/ correspondence/ requests are forwarded to the Registrar for necessary action. Thecomplaints/ correspondence is closely followed up with the Registrar to ensure timely redressal and prompt investorservice. Given below is the complaint history for the last three fiscal years:

ICICI Premier ICICI Power #

01/04/2000 to 31/03/2001

Complaints/ Requests received during the period 4549 2491

Redressed during the period 4545 2485

Pending 4 6

01/04/2001 to 31/03/2002

Complaints/ Requests received during the period 1011 1209#

Redressed during the period 1011 1215#

Pending as on March 31, 2002 4 Nil

01/04/2002 to 31/03/2003

Complaints/ Requests received during the period 700 Not applicable

Redressed during the period 699 Not applicable

Pending as on March 31, 2003 5 Not applicable

01/04/2003 to 31/12/2003

Complaints/ Requests received during the period 413 Not applicable

Redressed during the period 409 Not applicable

Pending as on December 31, 2003 9 Not applicable

#Status reported till the Record Date of Conversion. Name changed to Prudential ICICI Power with effect fromSeptember 27, 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. The pending investorcomplaints / requests pertain to, inter-alia, Issue of duplicate certificates, non receipt of certificates, non receipt ofredemption/dividend warrants, revalidation of dividend warrants, name correction, change of address of the Unitholder,registration of death cases, registration of Power of Attorney, transfer/transmission of Units etc. All investor grievancesare normally redressed within a period of 15 days of their receipt, subject to the information furnished by the Unitholderis complete and accurate. If such information is not provided/not available with the Registrars to the above Schemes, thematter is further followed up with the investors. Investor complaints are continuously monitored with the Registrar tothe Schemes.

The details relating to the ten open ended schemes launched by the Fund are as under:

Data relating to the period July 1998 to December 31, 2003

Scheme Complaints Complaints ComplaintsReceived redressed pending

Prudential ICICI Growth Plan 500 500 Nil

Prudential ICICI Income Plan 1006 1006 Nil

Prudential ICICI Liquid Plan 148 148 Nil

Prudential ICICI FMCG Fund 403 403 Nil

Prudential ICICI Tax Plan 397 397 Nil

Prudential ICICI Gilt Fund 130 130 Nil

Prudential ICICI Balanced Fund 478 478 Nil

Prudential ICICI Technology Fund 1986 1986 Nil

Prudential ICICI Monthly Income Plan 111 111 Nil

Prudential ICICI Fixed Monthly Plan 17 17 Nil


79

Prudential ICICI Child Care Plan 173 173 Nil

Prudential ICICI Power 130 130 Nil

Prudential ICICI Short Term Plan 3 3 Nil

Prudential ICICI Long Term Plan NIL NIL Nil

Prudential ICICI Sweep Plan NIL NIL Nil

Prudential ICICI Flexible Income Plan 7 7 Nil

Prudential ICICI Dynamic Plan 10 10 Nil

Prudential ICICI Floating Rating Plan 0 0 Nil

Prudential ICICI Index Fund-S&P CNX Nifty Plan 8 8 Nil

Sensex Prudential ICICI Exchange Traded Fund NIL NIL Nil

Prudential ICICI Flexible Income Plus Plan NIL NIL Nil

Total 5507 5507 Nil

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:

(Amount in Rupees)

Scheme name/Nature of investment April 1, 2003 to F.Y 2002- F.Y. 2001- F.Y. 2000-December 31, 2003 2003 2002 2001

Amount Amount Amount

Investment in Bonds of ICICI Bank Ltd.

ICICI Premier - - - 10,154,285

Prudential ICICI Income Plan 147,503,400 818,794,702 1,027,466,435 526,108,245

Prudential ICICI Balanced Fund - - 17,991,012 18,873,656

Prudential ICICI Flexible Income Plan 98,335,600 - - -

Prudential ICICI Liquid Plan - 10,891,898 39,359,762 186,921,910

Prudential ICICI Short Term Plan 58,281,500 58,913,072 61,800,122 -

Prudential ICICI Monthly Income Plan - - - 50,771,423

Investment in Debenture/Bonds/CommercialPaper of Erstwhile ICICI Ltd

Prudential ICICI Income Plan 703,115,958

Prudential ICICI Fixed Maturity Plan Series 23 - Half yearly(of erstwhile ICICI Ltd.) 11,892,242

Investment in NSE Linked Mibor Deposits /TermDeposit of ICICI Bank Ltd

Prudential ICICI Liquid Plan - 200,000,000 1,500,000,000 -

Prudential ICICI Short Term Plan - - - -

Prudential ICICI Power - - 20,000,000 -

ICICI Premier - - 20,000,000 -

Prudential ICICI Balanced Fund - - 80,000,000 -

Prudential ICICI Floating Rate Fund - 5,000,000,000

Prudential ICICI Flexible Income Plan - 50,000,000

Investment in equity shares of Erstwhile ICICI Ltd

Prudential ICICI Index Fund Nil Nil 1,031,715 Nil

Investment in equity shares of ICICI Bank Ltd

Prudential ICICI Index Fund 5,366,258 3,491,370 592,862 Nil

Sensex Prudential ICICI Exchange Traded Fund 9,500,841 6,327,798 Nil Nil

TOTAL 1,033,995,799 6,148,418,840 2,768,241,908 792,829,519

% to the net assets of the Mutual Fund 0.64% 6.77% 4.19% 1.69%

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 itsassociate companies.


80

Subscription in issues lead managed by ICICI Securities Ltd. [erstwhile ICICI Securities & Finance Company Limited(I-Sec)]

(Amount in Rupees)

Name of the Scheme F.Y. 2000-2001 F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toDecember 31, 2003

ICICI Premier Nil Nil Nil Nil

Prudential ICICI Power Nil Nil Nil *6,675,000

Prudential ICICI Income Plan 700,000,000 50,000,000 200,000,000 Nil

Prudential ICICI Liquid Plan 600,000,000 250,000,000 Nil Nil

Prudential ICICI Growth Plan Nil Nil Nil *21,925,000

Prudential ICICI Tax Plan Nil Nil Nil *2,187,500

Prudential ICICI Monthly Income Plan Nil Nil Nil *6,100,000

Prudential ICICI Balanced Fund 50,000,000 Nil Nil *6,087,500

Prudential ICICI Dynamic Plan Nil Nil Nil *5,712,500

TOTAL 1,350,000,000 300,000,000 200,000,000 Nil

* ICICI Securities Ltd. [erstwhile ICICI Securities & Finance Company Limited (I-Sec)] was a lead manager to the publicissue of Maruti Udyog Ltd. along with other lead managers. It may be noted that, Prudential ICICI Mutual Fund hassubscribed to the said issue through JM Morgan Stanley Securities Pvt. Ltd. This declaration has been made as a matterof disclosure to the investors.

Subscription in issues lead managed by ICICI Bank Limited

(Amount in Rupees)

Name of the Scheme F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toDecember 31, 2003

Prudential ICICI Income Plan 72,728,496 Nil Nil

Prudential ICICI Liquid Plan 23,142,034 1,450,000,000 Nil

Prudential ICICI Short Term Plan Nil 603,220,568 Nil

Prudential ICICI Monthly Income Plan 36,628,268 445,762,855 Nil

Prudential ICICI Flexible Income Plan Nil 300,000,000 Nil

Subscription in issues lead managed by ICICI Capital Services Limited

(Amount in Rupees)

Name of the Scheme F.Y. 2001-2002 F.Y 2002-2003 April 1, 2003 toDecember 31, 2003

Prudential ICICI Income Plan 540,000,000 Nil Nil

Prudential ICICI Short Term Plan 10,000,000 Nil Nil

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


81

Transactions with Associate Companies:

(Amount in Rupees)

F.Y. 2000-2001 F.Y. 2001-2002 F.Y. 2002-2003 April 1, 2003 to December 31,

2003

ICICI Bank Limited – Bank ChargesICICI Premier Nil 470 Nil NilPrudential ICICI Power Nil 3345 15 622,387Prudential ICICI Income Plan 556,012 1,724,925 1,326,708 758,625Prudential ICICI Liquid Plan 890,864 1,839,595 889,394 355,529Prudential ICICI Growth Plan 873,445 755,177 827,049 616,407Prudential ICICI FMCG Fund 729,701 674,607 427,000 544Prudential ICICI Tax Plan 773,856 620,145 1501 401,274Prudential ICICI Gilt Fund – Treasury 378,505 901,716 825,762 55,579Prudential ICICI Gilt Fund – Investment 748,544 949,692 889,297 475,944Prudential ICICI Gilt Fund –1 Year plus Nil 150 Nil NilPrudential ICICI Balanced Fund 763,247 724479 825,500 601262Prudential ICICI Technology Fund 815,647 879,799 831,405 74,091Prudential ICICI Monthly Income Plan 243,150 901065 825,665 605,689Prudential ICICI Fixed Maturity Plan Quarterly series 1 50,000 37,707 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 2 Nil 4,979 50 NilPrudential ICICI Fixed Maturity Plan Quarterly series 3 Nil 15,748 Nil NilPrudential ICICI Fixed Maturity Plan Half-Yearly series 1 Nil 150 Nil NilPrudential ICICI Fixed Maturity Plan Half-Yearly series 2 Nil 150 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 1 Nil 150 Nil 82Prudential ICICI Fixed Maturity Plan Yearly series 2 Nil 150 Nil NilPrudential ICICI Fixed Maturity Plan Yearly series 3 Nil 200 661 NilPrudential ICICI Fixed Maturity Plan Yearly series 5 Nil 248 Nil NilPrudential ICICI Child Care Plan-Gift Plan Nil 3,644 350 3,670Prudential ICICI Child Care Plan-Study Plan Nil 12,681 730 1,874Prudential ICICI Short Term Plan Nil 423,699 825,715 676,245Prudential ICICI Flexible Income Plan Nil Nil 398,750 599,463Prudential ICICI Dynamic Plan Nil Nil 112 628,237Prudential ICICI Floating Rating Plan Nil Nil Nil 135,050Prudential ICICI Long Term Plan Nil Nil Nil 55,589ICICI Bank Limited – BrokeragePrudential ICICI Balanced Fund 69,119 64,065 371,333 821,211Prudential ICICI Child Care Plan-Gift Plan Nil 93,326 368,251 274,780Prudential ICICI Child Care Plan-Study Plan Nil 49,857 240,792 222,522Prudential ICICI Dynamic Plan Nil Nil 1,402,785 2,967,076Prudential ICICI Flexible Income Plan Nil Nil 2,512,861 4,492,835Prudential ICICI Floating Rate Plan Nil Nil 995 102,638Prudential ICICI FMCG Fund 9,654 9,095 36,865 164,972Prudential ICICI Fixed Maturity Plan Half-Yearly series 1 Nil 15,815 39,558 809Prudential ICICI Fixed Maturity Plan Half-Yearly series 2 Nil 949 977 305Prudential ICICI Fixed Maturity Plan Quarterly series 1 Nil 11,171 11,929 1,944Prudential ICICI Fixed Maturity Plan Quarterly series 2 117,707 1,308 11,668 6,709Prudential ICICI Fixed Maturity Plan Quarterly series 3 Nil 139,294 4676 270Prudential ICICI Fixed Maturity Plan Yearly series 2 Nil Nil 8,611 809Prudential ICICI Fixed Maturity Plan Yearly series 3 Nil Nil 98,754 145,555Prudential ICICI Fixed Maturity Plan Yearly series 4 Nil 33 88 66Prudential ICICI Fixed Maturity Plan Yearly series 6 Nil Nil 378,438 -Prudential ICICI Fixed Maturity Plan Yearly series 7 Nil Nil 600 -Prudential ICICI Fixed Maturity Plan Yearly series 1 Nil 239 109,263 1,262Prudential ICICI Fixed Maturity Plan Yearly series 5 Nil 1,719 156,198 46,342Prudential ICICI Gilt Fund – Investment 688 145,086 4,448,085 3,456,785Prudential ICICI Gilt Fund – Treasury 353 26,546 147,943 36,019Prudential ICICI Gilt Fund – PF Nil Nil Nil 869,721Prudential ICICI Growth Plan 74,949 945,779 1287401 2,764,681Prudential ICICI Income Plan 8,816 1,396,509 18,404,188 14,508,826Prudential ICICI Index Fund Nil Nil 29,945 20,174Prudential ICICI Liquid Plan 23,058 3,530,911 13,452,007 9,379,662Prudential ICICI Long Term Plan Nil Nil 137 420Prudential ICICI Monthly Income Plan 2,269 119,431 2,178,352 1,227,358Prudential ICICI Power Nil 360 82,382 9,296,547Prudential ICICI Short Term Plan Nil Nil 15,237,064 6,900,384Prudential ICICI Tax Plan 5,536 104,654 182,185 158,297Prudential ICICI Technology Fund 74,429 103,779 688,780 526,685


82

(Amount in Rupees)


2003

Prudential ICICI Fixed Maturity Plan – Deposit PlusNRI Series 4 – Quarterly Plan Nil Nil Nil 48,035Prudential ICICI Fixed Maturity Plan – Deposit PlusNRI Series 6 – Quarterly Plan Nil Nil Nil 5,018ICICI Infotech Services Limited – Service ChargesICICI Premier 751,000 583,330 1,597,609 918,944ICICI Premier Redeemed Nil 19,930 671,043 325,760Prudential ICICI Balanced Fund - - - 148,136Prudential ICICI Dynamic Plan - - - 327,311Prudential ICICI Flexible Income Plan - - - 371,697Prudential ICICI Floating Rate Plan - - - 3,637Prudential ICICI Flexible Income Plus Plan - - - 56Prudential ICICI FMCG Fund - - - 49,823Prudential ICICI Fixed Maturity Plan – Half Yearly - - - 190Prudential ICICI Fixed Maturity Plan – Half Yearly 2 - - - 552Prudential ICICI Fixed Maturity Plan – Quarterly - - - 1,156Prudential ICICI Fixed Maturity Plan – Quarterly Series 2 - - - 281Prudential ICICI Fixed Maturity Plan – Quarterly Series 3 - - - 467Prudential ICICI Fixed Maturity Plan – Yearly Series 1 - - - 150Prudential ICICI Fixed Maturity Plan – Yearly Series 12 - - - 3,824Prudential ICICI Fixed Maturity Plan – Yearly Series 2 - - - 899Prudential ICICI Fixed Maturity Plan – Yearly Series 3 - - - 699Prudential ICICI Fixed Maturity Plan – Yearly Series 4 36Prudential ICICI Fixed Maturity Plan – Yearly Series 5 - - - 2,114Prudential ICICI Fixed Maturity Plan – Yearly Series 6 - - - 413Prudential ICICI Child Care Plan – Gift Option - - - 43,254Prudential ICICI Gilt fund – Investment Option - - - 86,525Prudential ICICI Gilt Fund – Treasury Option - - - 8,765Prudential ICICI Gilt Fund Investment Plan –PF Option 11,956Prudential ICICI Growth Plan - - - 303,319Prudential ICICI Income Plan - - - 1,479,935Prudential ICICI Liquid Plan - - - 509,351Prudential ICICI Long Term Plan - - - 401Prudential ICICI Monthly Income Plan - - - 452,050Prudential ICICI Power - - - 635,328Prudential ICICI Short Term Plan - - - 190,346Prudential ICICI Child Care Plan – Study Plan - - - 42,287Prudential ICICI Tax Plan - - - 139,808Prudential ICICI Technology Fund - - - 342,381Prudential ICICI Fixed Maturity Plan – Deposit PlusNRI Series 6 – Quarterly Plan - - - 61ICICI Capital Services Limited – BrokeragePrudential ICICI Power Nil 93 297 NilPrudential ICICI Income Plan 8,949487 13,376,665 54,912 NilPrudential ICICI Liquid Plan 2,959812 6,894,164 Nil NilPrudential ICICI Growth Plan 1,471,248 775,807 89,950 NilPrudential ICICI FMCG Fund 87,149 53,229 508 NilPrudential ICICI Tax Plan 118,162 75,314 774 NilPrudential ICICI Gilt Fund – Treasury 365,289 538,777 Nil NilPrudential ICICI Gilt Fund – Investment 683,334 2,248,509 Nil NilPrudential ICICI Balanced Fund 800,532 407,530 1,281 NilPrudential ICICI Technology Fund 1,804,955 1,954,540 8,648 NilPrudential ICICI Monthly Income Plan 448,893 1,350,164 2,849 NilPrudential ICICI Fixed Maturity Plan Quarterly series 1 14,589 282,228 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 2 Nil 280,957 Nil NilPrudential ICICI Fixed Maturity Plan Quarterly series 3 Nil 97,344 Nil NilPrudential ICICI Fixed Maturity Plan Half-Yearly series 1 Nil 263,080 Nil NilPrudential ICICI Fixed Maturity Plan Half-Yearly series 2 Nil 40,312 Nil NilPrudential ICICI Child Care Plan – Gift Plan Nil Nil 1,656 NilPrudential ICICI Child Care Plan – Study Plan Nil Nil 2,176 NilICICI Brokerage Service Limited – brokerage onsecondary market transactionsPrudential ICICI Premier 3,425 Nil Nil NilPrudential ICICI Balanced Plan Nil 9,000 666,606 133,467Prudential ICICI Growth Plan Nil 191,000 958,939 604,659


83

(Amount in Rupees)


2003

Prudential ICICI Power Nil 2,000 188,388 862,137Prudential ICICI FMCG Fund Nil Nil 181,297 84,328Prudential ICICI Tax Plan Nil 2,000 131,833 64,383Prudential ICICI Technology Plan Nil 72,000 70,270 131,250Prudential ICICI Monthly Income Plan Nil Nil 185,121 787,264Prudential ICICI Child Care Plan – Gift Plan Nil Nil 4736 42,294Prudential ICICI Child Care Plan – Study Plan Nil Nil 7,329 4,200Prudential ICICI Dynamic Plan Nil Nil 148,729 888,233ICICI Securities Ltd. (erstwhile ICICI Securities andFinance Co. Ltd.) brokerage on secondary markettransactionsPrudential ICICI Dynamic Plan Nil Nil 5,940 NilICICI Securities Ltd. (erstwhile ICICI Securities andFinance Co. Ltd.) BrokeragePrudential ICICI Income Plan 11,073,162 11,843,754 5,013,417 297,899Prudential ICICI Liquid Plan 199,485 4,791,362 61,087 7,989Prudential ICICI Growth Plan 18,051,819 1,365,584 85,833 396Prudential ICICI FMCG Fund 398,987 278,856 350,693 1,536Prudential ICICI Gilt Fund – Treasury 652,634 310,339 915,425 NilPrudential ICICI Gilt Fund – Investment 739,749 808,124 488,396 65,169Prudential ICICI Gilt Fund – PF Nil Nil Nil 21,150Prudential ICICI Balanced Fund 8,177,865 2,195,439 1,047,772 57,405Prudential ICICI Technology Fund 4,194,879 396,549 10,196 6,668Prudential ICICI Tax Plan Nil 155 38 38Prudential ICICI Monthly Income Plan Nil 1,278 433 617Prudential ICICI Fixed Maturity Plan Quarterly series 1 Nil 274 Nil NilPrudential ICICI Short Term Plan Nil Nil 556,652 NilPrudential ICICI Flexible Income Plan Nil Nil 113,550 NilPrudential ICICI Power Nil Nil 386,599 NilICICI Web Trade Ltd. BrokeragePrudential ICICI Balanced Fund Nil 301 19,825 63,822Prudential ICICI Dynamic Plan Nil Nil 116,879 128759Prudential ICICI Flexible Income Plan Nil Nil 7,878 8,570Prudential ICICI FMCG Fund Nil 921 17,816 40,133Prudential ICICI Gilt Investment Nil Nil 19,178 12,661Prudential ICICI Gilt Treasury Nil Nil 2,522 1,404Prudential ICICI Growth Plan Nil 190188 65,558 94516Prudential ICICI Income Plan Nil 1,549 100,224 89,935Prudential ICICI Liquid Plan Nil Nil 30,358 24,252Prudential ICICI Monthly Income Plan Nil Nil 14,535 17,679Prudential ICICI Power Nil Nil 34,638 205288Prudential ICICI Short Term Plan Nil Nil 6,981 4,717Prudential ICICI Tax Plan Nil 1,182 18,649 24,414Prudential ICICI Technology Plan Nil 6,140 96,558 169675ICICI Web Trade Limited – brokerage onsecondary market transactionsPrudential ICICI Growth Plan Nil Nil 4,582 NilWay2Wealth Securities Pvt. Ltd.Prudential ICICI Balanced Fund Nil Nil 21,361 23,870Prudential ICICI Child Care Plan – Gift Plan Nil Nil 46,186 19,685Prudential ICICI Child Care Plan – Study Plan Nil Nil 38,778 20,151Prudential ICICI Dynamic Plan Nil Nil 39,621 146,669Prudential ICICI Flexible Income Plan Nil Nil 38,849 478,408Prudential ICICI FMCG Fund Nil Nil 1,168 1,513Prudential ICICI Fixed Maturity Plan – Quarterly I Nil Nil (14,409) 1,611Prudential ICICI Fixed Maturity Plan – Quarterly II Nil Nil 51 21Prudential ICICI Fixed Maturity Plan – Quarterly III Nil Nil 29 NilPrudential ICICI Gilt Investment Nil Nil 273,439 270,252Prudential ICICI Gilt Treasury Nil Nil 7730 5016Prudential ICICI Gilt - PF Nil Nil Nil 2850Prudential ICICI Growth Plan Nil Nil 296,840 94,991Prudential ICICI Income Plan Nil Nil 2,179,850 801,734Prudential ICICI Index Fund Nil Nil 9,167 1,161Prudential ICICI Liquid Plan Nil Nil 334,862 189,991Prudential ICICI Monthly Income Plan Nil Nil 870,075 249,483Prudential ICICI Power Nil Nil 13,190 1,164,821Prudential ICICI Short Term Plan Nil Nil 931,228 1,170,506Prudential ICICI Tax Plan Nil Nil 19,215 14,611Prudential ICICI Technology Plan Nil Nil 310,26 47,178


84

The percentage of brokerage paid to ICICI Brokerage Services Limited (IBSL) was @0.26% and for ICICI Web Trade [email protected]% of transaction value and the same was in line with the norms relating to brokerage payments for secondarymarket transactions of the Fund. The total business given to IBSL amounted to Rs.14.098 lakhs, Rs.1,391.54 lakhs,Rs.8,106.27 lakhs and 12,927.72 lakhs during the year 1999-2000, 2000-2001, 2001-2002 and 2002-2003 respectively.Further, during the period from April 1, 2003 to December 31, 2003, total business given to IBSL amounted to Rs.13833.88 lakhs. Further, IBSL was paid a sum of Rs. 305,650 in connection with the rollover of ICICI Premier schemetowards service charges, in the year 1998-99.

During the period from April 1, 2000 to December 31, 2003, total business given to ICICI Web Trade Ltd. and ICICISecurities Limited amounted to Rs. 449.52 lakhs and 30.05 lakhs respectively.

Dealings with Associate Companies

The AMC may, from time to time, for the purpose of conducting its normal business, use the services of the Sponsor,subsidiaries of its Sponsors/ associate companies of AMC. Such entities as on the date of this document include ICICIBank, a scheduled commercial bank, ICICI Infotech Services Limited, a registrar and transfer agent; ICICI Brokerage ServicesLimited, a brokerage house, ICICI Venture Funds Management Company Limited, a venture funds management company,ICICI Securities and Finance Company Limited (I Sec), an investment bank, ICICI Prudential Life Insurance Company Limitedcarrying out insurance business, ICICI Web Trade Limited an online brokerage firm and Way2Wealth Securities PrivateLimited. The AMC may utilize the services of these group companies and any other subsidiary or associate company ofthe Sponsors/AMC established or to be established at a later date in case such an associate company is in a position toprovide the requisite services to the AMC. The AMC will conduct its business with the aforesaid companies on commercialterms and on an arm’s length basis and at the then prevailing market rates to the extent permitted under the applicablelaws including the Regulations, after an evaluation of the competitiveness of the pricing offered by the associate companiesand the services to be provided by them.

Associate transactions, if any carried out, will be as per the Regulations and the limits prescribed thereunder. TheRegulations currently prescribe the following limits:

The mutual fund scheme shall not make any investment in;

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

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

3. the listed securities of group companies of the Sponsor which is in excess of 25% of the net assets of such scheme.

The above restrictions and limits are also applicable to this Scheme. The AMC will, before investing in the securities ofthe group companies of the sponsor, evaluate such investments, the criteria for the evaluation being the same as isapplied to other similar investments to be made under the Scheme. Investments under the Scheme in the securities ofthe group companies will be subject 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 onDecember 31, 2003:

Hero Honda Limited

Name of Scheme Quantity Amount (Rs.) % of NAV

Equity

Prudential ICICI Dynamic Plan 110,491 49,544,164 2.90

Prudential ICICI Growth Plan 375,015 168,156,726 3.28

Prudential ICICI Index Plan 5,932 2,659,909 1.40

Prudential ICICI Monthly Income Plan 232,019 104,037,320 0.93

Sensex Prudential ICICI Exchange Traded Fund 4,700 2,109,595 1.28

HCL Technologies Limited


Equity

Prudential ICICI Index Fund 8,573 2,618,623 1.38

Prudential ICICI Dynamic Plan 284,992 87,050,806 5.10

Prudential ICICI Technology Fund 549,502 167,845,386 9.25

Prudential ICICI Power 1,289,291 393,813,936 4.91

Prudential ICICI Monthly Income Plan 379,738 115,990,972 1.04


85

Wipro Limited


Equity

Prudential ICICI Balanced Fund 35,000 60,761,750 3.54

Prudential ICICI Growth Plan 50,000 86,802,500 1.69




Prudential ICICI Child Care Plan – Gift Plan 2,200 3,819,310 1.58

Bank of Baroda


Debenture/Bonds/Commercial Paper

ICICI Premier 300 35,062,740 29.13

Prudential ICICI Income Plan 100 11,687,580 0.04

Prudential ICICI Long Term Plan 400 46,750,320 1.85

Maruti Udyog Limited


Equity

Prudential ICICI Power 623,000 233,749,600 2.92

ICICI Bank Ltd.


Debentures / Bonds

Prudential ICICI Income Plan (of erstwhile ICICI Ltd.) 127,700 703,115,958 2.17

Prudential ICICI Short Term Plan 10,000 58,281,500 0.29

Prudential ICICI Flexible Income Plan 20,000 98,335,600 0.69

Prudential ICICI Fixed Maturity Plan Series 23 -Half yearly (of erstwhile ICICI Ltd.) 2,300 11,892,242 11.35

Prudential ICICI Income Plan 30,000 147,503,400 0.45

Equity



Bharati Televentures Limited


Equity



Punjab National Bank


Equity

Prudential ICICI Child Care Plan – Gift Plan 27,000 6,516,450 2.69


86

d) PENALTIES & PENDING LITIGATIONS

Cases of penalties awarded by SEBI under the SEBI act or any of its regulations or any other regulatory bodyagainst the sponsor of the mutual fund or any company associated with the sponsor in any capacity such as theasset management company, trustee company/board of trustees, or any of the directors or key personnel ofthe asset management company and trustee company:

ICICI Bank: Nil.

ICICI : Nil

AMC: Nil

Prudential Plc.

Financial Services Authority (FSA)

In October 2001, following a visit in early 1999, the Personal Investment Authority fined the Company £650,000. Thisrelated to delays in paying redress to supplement the pensions of those who had retired and the benefits of the beneficiariesof those who had died, and to its record keeping.

M&G

Following a regular Inland Revenue Personal Equity Plans(PEP) audit, M&G have reached agreement to pay the following:

- missing application forms - £550

- incorrect handling of void PEPs - £3205

- accepting “paid for” as well as “free” shares during the take-on of Norwich Union windfall shares - £600 + repaymentof any wrongly claimed tax credits

1.1.3. Investment Management Regulatory Organisation (IMRO)

In December 1996, Prudential Personal Equity Plans Limited underwent an IMRO disciplinary procedure.

In January 1997, the IMRO fined Prudential Personal Equity Plans Limited £70,000 for breaches of the Client MoneyRegulations and related breaches which had occurred several years before.

The breaches were caused through the inability of systems to cope automatically with crediting individual investors’accounts with dividends declared in respect of the underlying investments in personal equity plans. The dividends werehandled manually, were not credited in time and mistakes arose, requiring insignificant amounts of compensation to bepaid to investors.

ANY PENDING MATERIAL LITIGATION PROCEEDINGS, OTHER THAN ORDINARY ROUTINE LITIGATION INCIDENTAL TO THEBUSINESS OF THE MUTUAL FUND TO WHICH THE SPONSOR OF THE MUTUAL FUND OR ANY COMPANY ASSOCIATEDWITH THE SPONSOR IN ANY CAPACITY SUCH AS THE AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THEDIRECTORS OR KEY PERSONNEL IS A PARTY. ANY PENDING CRIMINAL CASES OR ECONOMIC OFFENCE CASES AGAINSTTHE SPONSOR OR ANY COMPANY ASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH AS AMC, BOARD OFTRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEY PERSONNEL.

AMC: One of the Investors under Prudential ICICI Growth Plan had made investment to the tune of Rs. 50,00,000 undersection 54EB of the Income Tax Act, 1961. In accordance with the legal opinion of the counsel of the Fund, the Fund isof the view that investments under section 54EB of the Income Tax Act, 1961 read with CBDT notification no. 10247dated December 19, 1996 and the Offer Document of Prudential ICICI Growth Plan, the units had to be locked-in for aperiod of seven years from the date of investment. However, the Investor had disputed this stand and had filed a petitionagainst Prudential ICICI Asset Management Company Limited as one of the respondents in the Honourable Delhi Highcourt seeking the direction of the Court for premature redemption of units. SEBI vide its order dated September 4, 2000,rejected the petitioner’s claim for premature redemption of units.

The Petitioner has subsequently approached the Securities Appellate Tribunal seeking release of money due uponredemption of units and payment of interest there on. The matter has been heard by the Tribunal and the Tribunaldismissed the petition of the investor.

The investor has, once again, filed a writ in the High Court of Delhi challenging the order of the Tribunal. This matterwas listed before Hon’ble Delhi High court for final arguments in the regular hearing list.

Mr. K S Mehta – A Director of AMC:

Mr. K S Mehta has been made party in some of the cases relating to dishonour of cheques issued Ms/. PaamPharmaceuticals Ltd, Delhi, in which he was a Director. The dishonour of cheques took place after he had resigned fromthe Board. He has never held any shares in the above company nor he was involved in any day-to-day affairs of thecompany. The matters are sub-judice.

ICICI Bank Ltd.:

There are no litigations whose likely outcome will have a material adverse effect on the operations of the Company.However, following are the pending litigation/disputes/defaults etc. against ICICI Bank as on December 16, 2002, listing


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out criminal prosecutions launched against ICICI Bank and/or its working Directors and Suits filed against ICICI Bankinvolving a claim amount of Rs. 10 lacs and more. (Claims involving an amount of less than Rs. 10 lacs are produced inthe table below).

1. Three criminal complaints have been filed against ICICI Limited (since merged with ICICI Bank Limited) before theMetropolitan Magistrate, Mumbai, under the Maharashtra Private Security Guards Act, 1981 on technical groundsthat security guards have been engaged from exempted security agencies even though ICICI Bank Ltd is registeredwith the Security Guards’ Board. ICICI Bank Ltd has earlier replied to the notices stating that registration is only inrespect of ICICI Bank’s residential quarters at Andheri and not in respect of other establishments of ICICI Bank Ltd.

2. Two criminal complaints have been filed against ICICI Bank Limited before the Metropolitan Magistrate, Mumbai,under the Maharashtra Private Security Guards Act, 1981, on technical grounds that security guards have beenengaged from unexempted security agencies. ICICI Bank Ltd has taken a stand that the exemption of security agenciescontinued on account of High Court Order.

3. One case was filed by the Union of Security Guards at Bandra Kurla Complex against ICICI Limited (since mergedwith ICICI Bank Limited) in the Industrial Court claiming difference in wages on the ground that ICICI Bank Ltd isengaging security guards, which is not correct. ICICI Bank Ltd has filed a detailed reply inter alia pointing out thatthe engagement of security guards was for temporary period, which came to an end on September 30,2000. TheUnion had filed a writ petition in the Bombay High Court against the Order of the Industrial Court vacating theearlier status quo order, which has been dismissed. The appeal filed by the Union in the Bombay High Court (DivisionBench) has been dismissed. The Union has withdrawn the case from the Industrial Court. The Union has raised anindustrial dispute and thereafter has filed another writ petition in Bombay High Court inter alia seeking directionfor reference of the industrial dispute to Industrial Tribunal and restraining ICICI Bank Ltd from terminating thesecurity guards. No stay has been granted and the earlier order for maintaining status quo has expired. The saidindustrial dispute has been referred to the Industrial Tribunal.

4. Walsons Industries Products Inc. has filed in the Mumbai High Court a suit against ICICI Limited (since merged withICICI Bank Limited) for recovery of US$653,000 alleging that three bills should be paid by ICICI Bank Ltd in terms ofa letter of credit as done in the case of five previous bills since they formed part of the same transaction. ICICI BankLtd has put up a defence stating that all documents received through Bank of Nova Scotia are on collection basis,each one of them being an independent transaction by itself without any supporting commitment from ICICI BankLtd through the letter of credit. The court has granted us unconditional leave to defend the case.

5. Municipal Corporation of Greater Mumbai (BMC) has filed 5 cases against ICICI Bank for violating of Section 471 ofthe BMC Act read with Sec. 328-A on ground of non-payment of license fees for the illuminated sign boards atICICI Bank’s ATM centres. ICICI Bank filed a Writ Petition challenging the applicability of the provisions of Sec. 328 &328-A of BMC Act in respect of the ATM Centres. The Writ Petition stood dismissed. As against the dismissal order,ICICI Bank filed a Special Leave Petition on November 14, 2002 in the Supreme Court.

6. A suit has been filed by M.B. Industries Limited a with the High Court at Kolkata claiming a decree of Rs.10.25crores from ICICI Limited (since merged with ICICI Bank Limited), IDBI and IFCI in 1997. ICICI Bank’s share of thetotal claim amount is approximately Rs. 2 crores. The Kolkata High Court has not granted any relief to the company.However leave was granted to ICICI Bank, IDBI and IFCI to file recovery suits against the company. IDBI as the lead,has filed joint suit with ICICI Bank and IFCI before DRT, Kolkata, against the company. ICICI Bank’s claim in the suit isRs. 191 lakhs. IDBI as the lead, has filed application u/s 22 (1) of SICA before the BIFR for permission to continuewith legal proceedings against the company. The BIFR has recently granted permission to continue with legalproceedings against the company. The BIFR has recently granted permission to continue with legal proceedingsagainst the company. The suit is adjourned to January 17, 2003.

7. Shri Vijay Shankar Prasad one of the debenture holder of Lloyds Finance & Investment Co. Ltd. had filed a Criminalcomplaint against the company its officials and has also impleaded Shri K V Kamath, MD & CEO of ICICI Bank Ltd.Summons were issued for personal appearance of Shri Kamath against which we have filed an application underSection 205 of CRPC before the Magistrate Court and the same has been allowed. We have also filed criminalrevision petition before the Sessions Judge and the Hon’ble Judge has admitted the revision application, called forthe records from the Magistrate Court and hence the proceedings before the Magistrate Court has been stayed. Thematter is posted on January 3, 2003.

8. A criminal complaint has been filed before the Metropolitan Magistrate at Ahmedabad by a Debenture holder ofWestern India Shipyards Limited, against the Company, its Directors and against us as Debenture Trustees. The basiccomplaint arises out of forfeiture of amounts paid by the Debenture holder for Partly Convertible Debentures allottedto her since call money has not been paid. This is a civil matter and the complaint is likely to be dismissed. ICICIBank Ltd has filed a petition in the Hon’ble High Court of Gujarat for quashing of the criminal complaint. TheHon’ble High Court of Gujarat has stayed the criminal proceedings qua ICICI Bank Ltd and its Nominee Director.

9. The Peerless General Finance & Invest. Co. Ltd., one of the debenture holder of Essar Oil Ltd. (in which ICICI Ltd.which has been merged with ICICI Bank Ltd. (ICICI Bank) is acting as trustees) has filed a suit against Essar Oil Ltd.and others before the City Civil Court, Calcutta for non-receipt of redemption amount and interest. ICICI Bank hasbeen impleaded as Defendants. We have filed our Written Statement before the City Civil Court, Kolkata.


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10. A suit was filed by Anagram Finance Limited in November 1998 for recovery of a sum of Rs.6.83 crores from EZYSlide Fasterners Limited. Summonses have been served on the EZY Slide Fasterners Limited. They have not filedappearance and ICICI Bank is going to pray for a decree. EZY Slide Fasteners Limited filed a separate suit for recoveryof Rest 7.18 cores, being the loss allegedly suffered by them on account of breach by Anagram of SubscriptionAgreement dated April 4,1995 for subscribing to 420,000 Zero Interest Fully Convertible Debentures. The matterhas not come up for arguments till date.

11. The Union of contract labourers has raised an industrial dispute and thereafter filed a writ petition in the BombayHigh Court inter alia seeking direction for reference of the industrial dispute to the Industrial Tribunal and forcontinuation of arrangement of payment of wages in the meantime beyond December 31, 2001. However, the Highcourt has not extended the date of the said arrangement. The said industrial dispute has been referred to theIndustrial Tribunal.

12. A complaint was filed against Wipro Limited and all its Directors including Mr. K.V. Kamath, in his capacity as NomineeDirector on the Board Wipro Limited before the Court of Judicial Magistrate, Bhavanagar by the Gujarat PollutionControl Board alleging that effluents were being discharged without proper treatment. Shri K. V. Kamath is ManagingDirector and CEO of ICICI Bank Limited. Shri K.V. Kamath was not a director of Wipro Limited as on the date ofalleged offence. Special Leave Petition on behalf of the directors is filed before the Supreme Court challenging theorder of the High Court of Gujarat dismissing the application for quashing the said complaint. The Special LeavePetition has been admitted and the criminal complaint has been stayed.

13. A shareholder of erstwhile ICICI since merged with ICICI Bank Ltd. had filed a complaint before the ConsumerRedressal Forum, Hyderabad District against ICICI Infotech Services Limited regarding transfer of five shares in spiteof stop transfer request by him. The District Forum dismissed his complaint. The shareholder appealed against theOrder of the District Forum and the appeal was admitted by the A.P State Consumer Disputes Redresal Commissionand directed ICICI Bank Ltd to pay compensation and costs. An amount of Rs. 12,500/- was accordingly paid to thecomplainant . However, the shareholder also has filed a criminal complaint against ICICI Bank Ltd and ICICI InfotechServices Ltd, before the XI Metropolitan Magistrate, Secunderabad and the The Hon’ble magistrate has referred thematter to Marredpally Police Station, Secunderabad for investigation. We have filed a quash petition before theHon’ble High Court of Andhra Pradesh (APHC) for quashing the criminal complaint filed before the XI MetropolitanMagistrate, Secunderabad and APHC has granted stay on the investigations being undertaken by the policedepartment till further orders.

14. ICICI Bank Ltd has filed a joint suit together with other banks and financial institutions in DRT Delhi against EsslonSynthetics Ltd. and its Managing Director (in his capacity as guarantor) for recovery of dues, The guarantor has fileda counter claim for an amount of Rs. 100 crore against ICICI Bank Ltd and other parties to the suit who weresignatories to the hiving off arrangement of the Company’s Fibres Division and LML Limited (Scooters Division) intoseparate companies.

15. A joint suit was filed by all lenders with IFCI as the lead against Best Boards Limited for recovery of dues in DRT,Delhi. The Company has filed a counter claim of Rs. 600 lacs against all lenders (including ICICI Bank Ltd) on theground that IFCI, as the lead institution, refused to give its consent for sale of the plant & machinery and has allegedthat there were prospective buyers who were willing to pay a sum of Rs. 600 lacs thereby causing loss to the Company.

16. Pelicorp Limited has filed a criminal complaint against ICICI Bank Limited and Mr. H.N.Sinor, Joint Managing Directorof ICICI Bank Limited and the writ petition has been filed for quashing the said complaint and high court hasgranted interim stay on the criminal complaint.

17. A complaint was filed against Wipro Limited and all its director including Mr. Nachiket Mor, in his capacity as NomineeDirector on the Board of Wipro Limited before the Court of Judicial Magistrate, Jalgaon by the Food Inspector, Foodand Drug Administration alleging that the Vanaspati produced did not contain the specified requirements. Mr. NachiketMor is Executive Director of ICICI Bank Limited. Special Leave Petition on behalf of the Directors is filed before theSupreme Court Challenging the order of the High Court of Maharashtra dismissing the application for quashingthe said complaint, the same is admitted and the criminal complaint has been stayed.

18. A Criminal Complaint has been filed against ICICI Bank Limited and Mr. H.N. Sinor, Joint Managing Director of ICICIBank Limited before the Chief Judicial Magistrate, Jaipur for offense for wrongful dishonor of cheques. We havefiled revision before the High Court at Jaipur. The Hon’ble Court was pleased to admit the revision and stay theproceedings pending before the Chief Judicial Magistrate.

19. Shri Madan Gopal one of the debenture holders of Modern Denim Ltd. has filed a criminal complaint against thecompany its officials and has also impleaded Shri N Vaghul, Chairman of ICICI Bank Ltd. Summons were issued forpersonal appearance of Shri Vaghul against which ICICI Bank has filed an application under Section 205 of CrPCbefore the Magistrate Court (enclosing a medical certificate) and the same has been allowed. We have also filed acriminal revision petition before the Sessions Judge and the Hon’ble Judge has admitted the revision application,called for the records from the Magistrate Court and hence the proceedings before the Magistrate Court have beenstayed. The matter is posted on January 02, 2003.

20. A Criminal Complaint has been filed before the Metropolitan Magistrate’s 26th Court at Borivli, Mumbai by Ms

Dipali Gopani against ICICI Home Finance Company Limited, Shri K V Kamath, Shri Vaghul, Smt Gupte, Shri S Mukherji,


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Smt Morparia, and certain other Directors of erstwhile ICICI Limited. A Criminal Application has been filed on behalfof the said five Directors and all other Directors in the Bombay High Court for quashing the complaint and in theinterim for stay of the complaint against the Directors. The High Court has disposed of the said Criminal Applicationon December 13, 2002, after recording the statement of the Complainant that she would be withdrawing theComplaint against all Directors except those who are Directors of ICICI Home Finance Company Limited.

21. On April 12, 1999 ICICI had filed a suit before Hon’ble Bombay High Court (being Suit no 2203 of 1999) againstMardia Chemicals Limited [MCL] for recovery of outstanding amount of Rs 135 crores (approx). Thereafter on July16, 2002 ICICI issued a notice under the Securitisation And Restructuring Of Financial Assets & Enforcement ofSecurity Interest Ordinance, 2002 demanding payment of outstanding amount of Rs 293.49 crores. Thereafter onAugust 30, 2002 MCL has filed a suit in the City Civil Court at Ahmedabad against ICICI Bank Limited, Shri K VKamath & Smt Lalita D Gupte for purported amount of Rs.56,31,44,00,000/-. We have been advised that the suitfiled is not tenable, bad in law and motivated steps being adopted by MCL to thwart our recovery proceedings. Wehave filed an application under Order 7 Rule 11 of the Code of Civil Procedure for the dismissal of the suit on thegrounds of limitation, jurisdiction and no cause of action against ICICI Bank Limited, Shri Kamath and Smt Gupte.We have been granted time to file our written statement till December 17, 200. The matter is coming up for hearingon December 11, 2002.

22. On October 30, 2002, Shin-etsu Chemicals Private Limited [Shin-etsu] filed a suit before Supreme Court of New York(being Complaint no. 603711of 2002) against ICICI Bank Limited [ICICI Bank] for compensatory damages of US$1,000,000 plus interest for the alleged dishonouring by ICICI Bank of the letter of credit issued by ICICI Bank infavour of Shin-etsu. ICICI Bank has not agreed to make payments under the Letter of Credit as one of the terms ofthe Letter of Credit has not been complied with. We have on record a legal opinion from our Solicitors confirmingthat ICICI Bank was well within their rights not to make payments under the Letter of Credit. The reply to the complainthas been drafted by our counsel which is being filed.

23. A criminal complaint has been filed by the Inspector of Legal Metrology at Andheri, Mumbai Court for violation ofRule 8(1)(a) and (b) of Weights and Measures (Packaged Commodities) Rules, 1977 against Godrej Consumer ProductsLimited and all its directors including Mr. Anupam Puri, a non-whole-time director of ICICI Bank, for not keeping thearea surrounding the quantity declaration on a pack of Shaving Cream free from printed information. The offence iscompoundable under the provisions of the Weights and Measures (Packaged Commodities) Rules, 1977 and thesaid Company has applied for the same.”

a. In April 2001, a suit has been filed against Vision Organics Limited for recovery of Rs. 31.27 crores before DRT,Ahmedabad. In the said suit the Company has filed a counter claim against the Bank for Rs 23 Crores andrecently paid Court Fees after the Bank raised the objection.

(Rs. in crores)

Sr. No. Nature of claim Cases with Monetary Cases with noClaim specific

monetaryclaim

Number Amount Number

1. Suits/legal proceedings filed by shareholders/bond holders of ICICI Bank Limited 214 0.28 232

2. Suits/legal proceedings filed by debenture holdersagainst ICICI Bank Limited as Debenture Trustees. 12 11.29 190

3. Suits filed by lessees/hirers seeking injunctionagainst ICICI Bank Limited taking possession ofvehicles pursuant to lease/hire purchase agreementsand other suits filed by retail customers. 139

4. Miscellaneous suits/ legal proceedings in thecourse of business. 63 0.53 50

ANY DEFICIENCIES IN THE SYSTEMS AND OPERATIONS OF THE SPONSOR OF THE MUTUAL FUND OR ANY COMPANYASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH AS THE AMC OR THE TRUSTEE COMPANY WHICH SEBI HASSPECIFICALLY ADVISED TO BE DISCLOSED IN THE OFFER DOCUMENT, OR WHICH HAS BEEN NOTIFIED BY ANY OTHERREGULATORY AGENCY.

Capital Markets : ICICI Bank acts as bankers to the market offerings of companies on account of raising of equity ordebt, buy back of equity and for acquisition of equity on account of takeovers. These companies are required to maintainthe subscription funds with the bankers to the offering until the allotment of shares/buy back of shares and the refundof excess subscription is completed. This process generally takes about 15 to 30 days, resulting in short-term depositswith ICICI Bank.

SEBI had issued a notice in the matter of North Star Gems (India) Ltd to show cause as to why Bhadra, Ahmedabadbranch of the erstwhile Bank of Madura should not be suspended from conducting merchant banking activities for a


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period of 6 months. ICICI Bank filed its detailed reply with SEBI. SEBI in terms of their Order dated October 16,2002 tooknote of the fact that RBI had not indicated any malafide actions on the part of bank officials and also the fact that theBank had taken disciplinary action against the concerned employees and issued a warning to Bhadra Branch of ICICIBank with further direction to that Branch to act with due skill, care and diligence while acting as Banker to an Issue.

Debenture Trusteeship: The erstwhile ICICI Limited had provided debenture trusteeship services since 1983, and actedas trustee for the holders of convertible and non-convertible debentures issued in the public and private markets. DuringSEBI’s inspection of the Debenture Trustee operations of the erstwhile ICICI Limited, observations on certain shortcomingswere made by SEBI in its inspection report. The erstwhile ICICI Limited had initiated suitable action based on SEBI reportand had submitted a detailed reply to SEBI. The matter is being examined by SEBI. The erstwhile ICICI Limited hadsubsequently, with a view to exit this business, been divesting the portfolio of debenture trusteeship in favour of otherdebenture trustees. ICICI Bank continues to act as a debenture trustee for the remaining companies for which the erstwhileICICI Limited were debenture trustees. ICICI Bank has been permitted by SEBI to act as a debenture trustee.

SUBSIDIARIES

1. ICICI Securities and Finance Company Limited (ICICI Securities): ICICI Securities was set up in February 1993 toprovide investment-banking services to investors. ICICI Securities has three main business lines

� Corporate advisory and Mergers and Acquisitions

� Fixed income; and

� Equities

With the merger of erstwhile ICICI Limited with ICICI bank becoming effective, ICICI Bank holds 99.92% of the sharecapital of ICICI Securities. ICICI Securities is a Merchant Banker, Underwriter and Portfolio Manager registered with SEBI.Also ICICI Securities is a Primary Dealer registered with RBI engaged in acquisition and trading of Government Securities.

Currently ICICI Securities provides services such as issue management underwriting, placement of debt and equity,corporate advisory services including mergers, amalgamations and spin offs, capital structuring, valuations and fairnessopinion reports and as a Primary Dealer actively involved in money market operations, and trading in securities. It alsoprovides specialised services in the areas of private equity syndication and privatisation of government entities. In addition,ICICI Securities has a research team, which identifies investment opportunities and provides timely investment advice toclients. ICICI Securities is amongst the largest arranger of funds in Debt and Equity segments and also amongst theleading advisors in Mergers and Acquisitions. It is also amongst the highest capitalized Investment Banks in India withnet worth of Rs.3,191.80 million as on March 31, 2002.

ICICI Securities was awarded two penalty points by SEBI for non-submission of Letter of Offer in the Rights issues ofSiroplast Limited and Thane Electricity Supply Co. Ltd. during 1995 and one penalty point for non-submission of post-issue report in the Public Issue for Shree Rajasthan Texchem Ltd. Further, warning letters were issued by SEBI on October2, 1998 for lack of due diligence in the issue of Hindustan Motors Ltd. and on July 11, 2000 in connection withdissemination of information to investors in the issue of Cadila Healthcare Limited.

ICICI Securities was issued a warning letter by RBI on May 30, 2001 on the bouncing of SGL form on a governmentsecurities transaction on May 4, 2001. Before this, RBI had issued four such letters on January 9, 1997, February 23,1999, June 13, 2000 and January 18, 2001. However penal action is initiated by RBI only in case of three consecutiveinstances of bouncing in the period of six months i.e. April-Sept. and /or October-March. Hence no penal action wastaken in above instances.

RBI reduced the liquidity support limit for ICICI Securities by Rs.25 crore for a period of three months from October 7,2002 until January 6, 2003, for delayed submission of bid in the treasury bill auction conducted on September 25,2002. Earlier, a reduction in the liquidity support limit by Rs.1.50 crore was imposed for shortfall in bidding commitmenton April 7, 2000, which was reset to original level with effect from October 9, 2000.

2. ICICI Investment Management Company Limited: ICICI Investment Management Company Limited (“ICICI InvestmentManagement”) had been incorporated on March 9, 2000 as a 100% subsidiary of erstwhile ICICI Limited (ICICI) andobtained certificate of commencement of business on March 14, 2000. The authorised share capital of ICICI InvestmentManagement is Rs.25 crore and the paid-up share capital is Rs.10,00,07,000. Consequent to the amalgamation of ICICIwith ICICI Bank becoming effective on May 3, 2002, ICICI Investment Management has become a 100% subsidiary ofICICI Bank.

The main object of ICICI Investment Management is to carry on the business activities in respect of the management ofmutual funds, unit trusts, offshore funds, pension funds, provident funds, venture capital funds, insurance funds, and toact as managers, consultants, advisors, administrators, attorneys, agents, or representatives of or for mutual funds, unittrusts, offshore funds, pension funds, provident funds, venture capital funds or insurance funds formed or establishedin India or elsewhere by ICICI Investment Management or any other person (whether incorporated or not) or by anygovernment, state, local authority, association, institution (whether incorporated or not) or any other agency or organisationand to act as Financial Advisors and Investment Advisors, and to render such financial management, financial consultancyand advisory services to individuals, companies, corporations, trusts and other entities as supplemental activities of ICICIInvestment Management and as do not conflict with the fund management activities.


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ICICI Investment Management is the asset management company of “ICICI Securities Fund”, a Mutual Fund registeredwith the Securities and Exchange Board of India.

SEBI had issued a warning letter on May 22, 2000 to ICICI Investment Management for lack of due diligence whilesubmitting the offer document for ICICI CBO Fund-I.

Prudential plc.

Financial Services Authority (FSA)– Scottish Amicable

Following a visit in January 2001 the FSA raised concerns about the implementation by Scottish Amicable Life ofrequirements issued by the Personal Investment Authority in December 1999 concerning the sales of mortgage endowmentpolicies.

The Company agreed to review policies sold since that date; the matter has not been concluded.

1.1.4 FSA - Prudential

The Prudential Assurance Company Limited has twice been criticised for failing to meet its pension mis-selling reviewdeadlines. The first occasion was by the FSA in 1997.

In December 1997, the FSA issued a section 60 notice and a public statement criticising the Company’s compliancearrangements with respect to its direct sales force.

1.1.5 London Stock Exchange

Prudential Corporation plc was publicly criticised by the London Stock Exchange in 1995 for the manner in which it dealtwith authorisation of a dealing by its then chief executive in Prudential shares.

ANY ENQUIRY/ADJUDICATION PROCEEDINGS UNDER THE SEBI ACT AND THE REGULATIONS MADE THERE UNDER, AGAINSTTHE SPONSOR OF THE MUTUAL FUND OR ANY COMPANY ASSOCIATED WITH THE SPONSOR IN ANY CAPACITY SUCH ASTHE AMC, BOARD OF TRUSTEES/TRUSTEE COMPANY OR ANY OF THE DIRECTORS OR KEY PERSONNEL OF THE AMC:

1.1.6 Prudential Corporation plc

PIA investigations:

Prudential Assurance Company Limited: Following an article in “The Guardian” in August 1998 concerning possiblepensions mis-selling, the PIA will be investigating 2 cases.

SIB cases

Prudential Assurance Company Limited: A number of writs were issued from 1995 to 1997 in connection with themis-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 benefit was transferred to a personal pension.

Some were for protective purposes pending review of the sale under the SIB guidance; others proceeded, and many havereached settlement via consent orders on the basis of payment of full compensation but without an admission of liability.

ITC Advertising Complaints Reports

(Pru Banking): Complaints were received in November/December 1997 from 3 viewers. An advertisement for a Prudential60 Day Notice Account offered a rate of 7.5% gross per annum on £10,000 and included the statement “you won’t finda better rate of interest for £10,000”.

Two viewers objected that a “better rate” of 7.6% could be obtained on £10,000 in a Legal and General 60 day NoticeAccount. The third viewer objected that the rate of 7.5% in fact included a 1% loyalty bonus, which only applied after£10,000 had been held in the account for 12 months.

Assessment: Following a complaint on 17 October 1997, the ITC drew the Teletext’s attention that a higher rate ofinterest was apparently being paid on a Legal and General account comparable to the Prudential’s. Teletext immediatelyremoved the Prudential advertisement from air pending investigations. These revealed that whilst Legal and General hadintroduced a rate of 7.6% on 10 October 1997, Prudential had not matched this rate until 17 October 1997. In addition,whilst Prudential’s advertising agency had, on 15 October 1997, requested Teletext to amend the rate to 7.6% from 20October 1997, press advertising for the Prudential account had reflected the higher rate on 17 October 1997.

Teletext confirmed that the headline rate was stated gross of a 1% loyalty bonus, which was only paid if the account wasstill open after 12 months and only two withdrawals had been made. They agreed that this was a significant conditionwhich should have been made clear and instructed that subsequent advertising for this Prudential account should includedetails.

The ITC agreed that the advertising had been misleading during the period the Legal and General had been offering ahigher rate than Prudential and considered that the omission of details about the 1% loyalty bonus had also renderedthe advertising misleading.

Teletext had already removed the advertisement from air and would not permit it to return until the relevant amendmentswere made.


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The complaints were upheld.

Complaint via Trading Standards Department

The Prudential Assurance Company Limited: An objection (in 1998) was received via the Trading Standards Departmentto a leaflet that claimed “Save around £100 on home insurance”. The complainant, who was given a quote for £16more than his existing policy, challenged whether the savings were generally attainable.

Adjudication: The complaint was upheld. The advertisers submitted a summary of their research, which showed that ninetenths of customers who had switched their home insurance to Prudential had saved an average of £97.99. They arguedthat the claim was neither a price promise nor a guarantee that Prudential would always be the cheapest. The Authoritynoted that the leaflet stated elsewhere that “You could save money …..” It considered, however, that the claim impliedthat switching to the advertisers’ household insurance policies always saved customers money. Because that was nottrue, the Authority asked the advertisers not to use the claim again.

Complaints about advertisements in the national press

1 The Prudential Assurance Company Limited: An objection (in 1998) to a national press advertisement that washeadlined “Prudential announce a rate change of great interest to savers” and featured a table of interest rates forthe advertisers’ 60-Day Notice Account. One column of the table was headed “Monthly Rates (inc loyalty bonus)*”and quoted annual interest rates for those who have their interest paid monthly. A footnote stated “The rates includea loyalty bonus of 1% gross pa (0.8% net pa) calculated daily and paid annually on the anniversary date. This is paidprovided the account is still open and in the preceding 12 months no more than two withdrawals have been madeand the balance has not been less than £2,000.” The complainant objected that the advertisement was misleadingbecause the loyalty bonus was not paid until the anniversary date.

Adjudication: Complaint upheld. The advertisers said they believed the footnote explained that monthly interestwas calculated excluding the loyalty bonus but accepted that the presentation of the advertisement could be confusing.The Authority considered that the advertisement was misleading and it welcomed the advertisers’ intention to amendfuture advertisements to state monthly interest rates without the loyalty bonus, which they will show separately.

2 The Prudential Assurance Company Limited: An objection (in 1998) to a national press advertisement that washeadlined “Why you’ll be better off with Prudential because we’re No. 1 in our field”. The complainant challengedthe claim.

Adjudication: Complaint upheld. The advertisers submitted evidence that showed they were number one in somebut not all the aspects of their pension and life insurance business. The Authority accepted that the advertisers claimwas acceptable in relation to pensions and life insurance but considered that their information did not adequatelysubstantiate the general claim that the advertisers were “No. 1” in their field. The Authority asked the advertisers tospecify in future the sectors in which they could show they were “No. 1”.

The Prudential Assurance Company Limited (PAC): LAUTRO approached PAC in April 1994 with a request for itsco-operation in an informal review to validate LAUTRO’s pension rules for the future. Prudential agreed to co-operate.LAUTRO subsequently expressed various concerns about the Prudential’s approach to pension transfers. The reviewwas 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.

State of Florida (Division of Securities & Finance) fined National Planning Corporation (NPC) $10,000 for failing toregister two branch offices. NPC were also required to sign a Stipulation and Consent Agreement.

OPRA fined Prudential Nominees Ltd (PNL) £5000 following a determination regarding the Ledo Limited PensionPlan (a SSAS) for which PNL is pensioneer trustee. The fine is in respect of failing to appoint an auditor and otherprocedural failures. We have asked for reconsideration at OPRA Council meeting in March 2002.

National Planning Corporation (NPC) have established a $6m claimants funds after agreement with New York AttorneyGeneral (NYAG). This follows NYAG investigation into sale of payphones and leaseback arrangements of ETS payphonesby representatives of NPC. NYAG allege that the sale constituted an unregistered securities offering.

Jackson National Life (JNL) have reached a settlement of Haggan case and the Andrews Dunn and Gales cases linkedto it for a sum of $10m. Finalised in January 2002 - the terms of the settlement are confidential and should not bedisclosed to third parties.

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 purposeof repurchase, redemption of units or payment of interest or dividend to the Unitholders. Further, as per the Regulations,the Fund shall not borrow more than 20% of the Net Assets of the Scheme and the duration of such borrowing shallnot exceed a period of six months. The Fund may raise such borrowings after approval by the Trustee from any of itsSponsors/Associate/Group Companies/Commercial Banks in India or any other entity at market related rates prevailing atthe time and applicable to similar borrowings. The security for such borrowings, if required, will be as determined by theTrustee. 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

Although, the Scheme per se will make investments in underlying schemes of the mutual fund, the policy in respect of


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such underlying schemes of Prudential ICICI Mutual Fund that may consider engaging in the stock lending is laid downas under:

Subject to the Regulations and the applicable guidelines, the Scheme and the Plans thereunder may, if the Trustee permits,engage in stock lending. Stock lending means the lending of stock to another person or entity for a fixed period of time,at a negotiated compensation. The securities lent will be returned by the borrower on expiry of the stipulated period.Please see Page 10 on risks attached with stock lending. Each Plan, under normal circumstances, shall not have exposureof more than 50% of its net assets in stock lending. The Plan may al so not lend more than 50% of its net assets to anyone intermediary to whom securities will be lent. The AMC shall report to the Trustee on a quarterly basis as to the levelof lending in terms of value, volume and the names of the intermediaries and the earnings/losses arising out of thetransactions, the value of collateral security offered etc.

g) POLICY ON OFFSHORE INVESTMENTS BY underlying schemes of Prudential ICICI Mutual Fund

Although, the Scheme per se will make investments in underlying schemes of the mutual fund, the policy in respect ofsuch underlying schemes of Prudential ICICI Mutual Fund that may consider investments in ADRs/ GDRs issued by Indiancompanies is laid down as under:

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 ofthe assets 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 entailadditional risks. Such investment opportunities may be pursued by the Investment Manager provided they are consideredappropriate in terms of the overall investment objectives of the Scheme and the Plans thereunder. Since the Scheme andthe Plans thereunder would invest only partially in ADRs/GDRs/overseas securities, there may not be readily available andwidely accepted benchmarks to measure performance of the Scheme and the Plans thereunder. To manage risks associatedwith foreign 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.The appointment 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 regulatorycosts.

H) INTER-SCHEME TRANSFERS

The Fund may undertake inter-Scheme transfers under the Scheme. If inter-scheme transfers are done, they will be affectedbased on the closing prices of the Principal Stock Exchange and in conformity with Regulations. In case of securitieswhich are not traded on the Principal Stock Exchange / any other exchange, the inter-scheme transfers will be effectedbased on fair valuation 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 the purposeof giving effect to the Scheme and the Plans thereunder with power to the AMC to add to, alter or amend all or any ofthe terms and rules that may be framed from time to time, with the prior approval of the Trustees.

Power to remove Difficulties

If any difficulty arises in giving effect to the provisions of the Scheme and the Plans thereunder, the Trustee may, subjectto the Regulations, take any action not inconsistent with such provisions, which appears to it to be necessary, desirableor expedient, for the purpose of removing such difficulty.

Scheme to be binding on the Unitholders

Subject to the Regulations, the Trustee may, from time to time, add or otherwise vary or alter all or any of the features ofinvestment plans and terms of the Scheme after obtaining the prior permission of SEBI and the Unitholders (wherenecessary), and the same shall be binding on all the Unitholders of the Scheme and the Plans thereunder and any personor persons claiming through or under them as if each Unitholder or such person expressly had agreed that such featuresand terms shall be so binding.


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J) DOCUMENTS AVAILABLE FOR INSPECTION

1. Memorandum and Articles of Association of the Trustee Company and the AMC

2. Custodian Agreement between Trustee and Deutsche Bank AG.3. Investment Management Agreement

4. Trust Deed and amendments thereto

5. Mutual Fund Registration Certificate

6. Consent of Registrar to act in the said capacity

7. Consent of Auditors to act in the said capacity

8. Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereof from time totime.

9. Indian Trust Act, 1882

10. Letter Ref. No. EC CO OID. MF/19.16.151/99-2000 dated May 26, 2000 issued by Reserve bank of India as amendedfrom time to time; granting approval for investment in ADRs/ GDRs by the schemes of Prudential ICICI Mutual Fund.

11. Offer Documents / addendums of all the schemes of the mutual fund in which this Fund of Funds scheme proposesto make investments.

Notwithstanding anything contained in the offer document the provisions of the SEBI (Mutual Funds) Regulations, 1996and 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 May 22, 2001.

For and on behalf of the Board of Directors of

Prudential ICICI Asset Management Company Limited

Shailendra BhandariManaging Director

Place : MumbaiDate : January 24, 2004

FROM Prudential ICICI Mutual Fund - Kotak Mahindra Bank · FROM Prudential ICICI Mutual Fund ......

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