prudential icici mutual fund

2

Prudential ICICI Mutual Fund

IMPORTANT NOTICE

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

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

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

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

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

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

a) Purchase or sale of securities through any broker associated with the Sponsors or through a firm which is an associate of theSponsor(s) shall not exceed an average of 5% of the aggregate purchases and sale of securities made by the Fund in all itsSchemes in a block of any three months.

b) Utilization of the services of the Sponsors or any of their associates, for the purpose of any securities transactions anddistribution and sale of securities shall be made only if a disclosure to this effect is made in the Offer Document and thebrokerage or commission paid is also disclosed in the half yearly annual accounts of the mutual fund.

c) The Mutual Fund Scheme shall not make any investment in:

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

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

3. the listed securities of group companies of the Sponsor which is in excess of 25% of its net assets.

In this Offer Document, all references to $ are to United States of America Dollars, to Pound Sterling of United Kingdomand Rs. to Indian Rupees. The Reference Exchange Rate between the United States Dollar and the Indian Rupee has beentaken at $1 = Rs.44.38 and UK and Indian Rupee at 1=Rs.78.35.

This Offer Document is dated January 20, 2006.


3

TABLE OF CONTENTS

1. Highlights .............................................................................................................................................. 5

2. Risk Factors .............................................................................................................................................. 8

3. Due Diligence Certificate ........................................................................................................................ 15

4. Definitions .............................................................................................................................................. 16

5. Summary Prudential ICICI Fusion Fund ................................................................................................ 18

6. Constitution of the Mutual Fund ............................................................................................................ 20

a) The Sponsors ................................................................................................................................... 20

b) The Trustee Company ...................................................................................................................... 21

i. Directors ................................................................................................................................ 21

ii. Rights and Obligations of the Trustee .................................................................................... 22

iii. Trusteeship Fees ..................................................................................................................... 24

c) Management of Asset Management Company (AMC) ..................................................................... 24

i. Board of Directors of the AMC .............................................................................................. 24

ii. Powers, Duties & Responsibilities of the AMC ....................................................................... 27

iii. Key Employees of AMC & relevant experience ........................................................................ 28

iv. Fund Manager ....................................................................................................................... 33

v. Compliance Officer ................................................................................................................ 33

vi. Investor Relations Officer ....................................................................................................... 33

d) Auditors .......................................................................................................................................... 34

e) Registrar .......................................................................................................................................... 34

f) Custodian ........................................................................................................................................ 34

7. Investment Objectives & Policies ........................................................................................................... 35

Fundamental Attributes of the Scheme ..................................................................................................... 35

a) Type of the Scheme .......................................................................................................................... 35

b) Investment Objective ....................................................................................................................... 35

c) Investment Pattern and Investment Policies ...................................................................................... 35

d) Change in Investment Pattern .......................................................................................................... 36

e) Terms of the Scheme ........................................................................................................................ 36

f) Change in Fundamental Attributes .................................................................................................. 38

g) Investment Strategy ......................................................................................................................... 38

h) Portfolio Turnover ............................................................................................................................ 40

i) Procedure followed for investment decisions ................................................................................... 41

j) Exposure to Derivatives .................................................................................................................... 41

k) Investment Restrictions for the Scheme ............................................................................................ 42

l) Underwriting by the Fund ................................................................................................................ 43

m) Computation of Net Asset Value ...................................................................................................... 43

n) Accounting Policies & Standards ...................................................................................................... 47

8. Units & The New Fund Offer .................................................................................................................. 50

General Information .................................................................................................................................. 50

a) Minimum Subscription Amount ...................................................................................................... 50

b) Offer Price ........................................................................................................................................ 50

c) Minimum Amount for Application .................................................................................................. 50

d) New Fund Offer Issue Expenses ........................................................................................................ 50

e) Options and Investment plans offered under the Scheme ................................................................ 50

i. Growth Option For Capital Appreciation ............................................................................ 50

ii. Dividend Option For Regular Income .................................................................................. 50

4


f) Pledge of Units for Loans ................................................................................................................. 50

g) How to Switch ................................................................................................................................. 51

h) Who can Invest? .............................................................................................................................. 51

i) How to Apply? ................................................................................................................................. 51

i. New Fund Offer ..................................................................................................................... 51

ii. Resident Investors - Mode of Payment ................................................................................... 52

iii. NRIs & FIIs .............................................................................................................................. 52

iv. Mode of Payment on Repatriation Basis ................................................................................ 52

v. Mode of Payment on Non-Repatriation Basis ......................................................................... 52

vi. Investments of the minor investors on attaining majority ....................................................... 52

vii. Application under Power of Attorney/Body Corporate/Registered / Society/ Trust/Partnership 52

viii. Joint Applicants ..................................................................................................................... 53

ix. Nomination Facility ................................................................................................................ 53

j) Issuance of Units/Refund ................................................................................................................. 53

k) Account Statements ......................................................................................................................... 53

l) Refunds ........................................................................................................................................... 53

m) Redemption of Units ....................................................................................................................... 53

i. Redemption Price ................................................................................................................... 54

ii. Applicable NAV ...................................................................................................................... 54

iii. How to Redeem? ................................................................................................................... 54

iv. Redemption on Maturity ....................................................................................................... 54

v. Payment of Maturity Proceeds ................................................................................................ 54

vi. Payment of Maturity Proceeds to NRIs/FIIs .............................................................................. 55

vii. Non receipt of email communication by Investors .................................................................. 55

viii. Effect of Redemptions ........................................................................................................... 55

ix. Fractional Units ...................................................................................................................... 55

x. Signature mismatch cases ...................................................................................................... 55

xi. Right to Limit Redemptions ................................................................................................... 55

xii. Suspension of Sale and Redemption of Units ........................................................................ 56

xiii. Permanent Account Number (PAN) ......................................................................................... 56

xiv. Unique Identification Number (UIN) ....................................................................................... 56

xv. Dormant Account Locking ..................................................................................................... 56

9. Load Structure, Fees and Expenses ........................................................................................................ 57

a) Load Structure of the Scheme .......................................................................................................... 57

b) Fees and Expenses of the Scheme .................................................................................................... 57

i. New Fund Offer Expenses ...................................................................................................... 57

ii. Estimated Recurring Expenses ................................................................................................ 58

c) Fees and Expenses of the Existing Scheme ....................................................................................... 58

i. New Fund Offer Expenses ...................................................................................................... 58

ii. Condensed Financial Information .......................................................................................... 59

10. Unitholders Rights and Services ............................................................................................................. 71

a) Investors Services ............................................................................................................................. 71

b) Ease of Transactions ......................................................................................................................... 71

i. Customer Service Centers in major metros ............................................................................. 71

ii. Process transactions in a timely manner ................................................................................. 71

c) Problem Resolution ......................................................................................................................... 71

d) Information about the Scheme ........................................................................................................ 71


5

e) NAV Information .............................................................................................................................. 71

f) Disclosure of information under the Regulations ............................................................................. 72

g) Rights of Unitholders of the Scheme ............................................................................................... 72

h) Duration of the Scheme/Winding up ............................................................................................... 72

i) Procedure and manner of Winding up ............................................................................................. 73

j) Tax Benefits ...................................................................................................................................... 73

i) To the Mutual Fund ............................................................................................................... 73

ii) To the Unitholders ................................................................................................................. 74

A. Income received from mutual fund ........................................................................................ 74

B. Long term capital gains on transfer of units ........................................................................... 74

i. For Individuals and HUFs ............................................................................................... 74

ii. For Partnership Firms, Non-Residents, Indian Companies/Foreign Companies .............. 74

iii. For Non-resident Indians .............................................................................................. 74

iv. For Overseas Financial Organisations and Foreign Institutional Investors ...................... 75fulfilling conditions laid down under section 115AB (Offshore Fund

C. Short term capital gains ......................................................................................................... 75

D. Capital Losses ........................................................................................................................ 75

E. Tax deduction for individual & HUF under Sec. 80C ................................................................ 75

D. Tax deduction at source ......................................................................................................... 76

E. Exemption from tax on capital gains arising on transfer of units held for more than 12 months 76

F. Investments by charitable and religious trusts in the plan ...................................................... 76

G. Wealth Tax Sec. 2 (ea) ............................................................................................................. 77

k) Unclaimed redemption amount ....................................................................................................... 77

11. Other Matters

a) Unitholders Grievances Redressal Mechanism ................................................................................. 78

b) Associate Transactions ..................................................................................................................... 80

c) Details of Investment in Companies that hold more than 5% of NAV of Schemes ........................... 87managed by the AMC

d) Penalties and Pending Litigations .................................................................................................... 91

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

f) Stock Lending by the Mutual Fund .................................................................................................. 98

g) Policy on Offshore Investments by the Scheme ................................................................................ 98

h) Inter-Scheme Transfers ..................................................................................................................... 98

i) General Information ........................................................................................................................ 99

Power to make Rules ....................................................................................................................... 99

Power to remove Difficulties ............................................................................................................ 99

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

Documents available for Inspection ................................................................................................. 99

6


HIGHLIGHTS

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

Prudential plc is a leading international financial services group providing retail financial products and services and fundmanagement to many millions of customers worldwide. As a group Prudential plc has, as of December 31, 2004, over GBP187billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as of December 31,2003.

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

ICICI Bank is Indias second-largest bank with total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax ofRs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 573branches and extension counters and over 2,000 ATMs. ICICI Bank offers a wide range of banking products and financialservices to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries andaffiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank setup its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domesticbanking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada andRussia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates,Bangladesh and South Africa. (Source: Overview at www.icicibank.com).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly owned subsidiary.ICICIs shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equityoffering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank of Madura Limited in an all-stockamalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002.

Pursuant to the Scheme of Amalgamation effective March 30, 2002, among ICICI, ICICI Personal Financial Services, ICICI CapitalServices and ICICI Bank, sanctioned by the High Court of Gujarat and the High Court of Judicature at Bombay and approved bythe Reserve Bank of India, ICICI, ICICI Personal Financial Services and ICICI Capital Services were merged with ICICI Bank in an all-stock merger. ICICI Bank is the surviving legal entity in the amalgamation.

Fund Management expertise

Prudential plc is a leading international financial services group providing retail financial products and services and fundmanagement to many millions of customers worldwide. As a group Prudential plc has, as of December 31, 2004, overGBP187 billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as ofDecember 31, 2003.

Prudential ICICI Asset Management Company Limited, the Investment Manager to the Prudential ICICI Mutual Fund,manages assets over Rs. 21,992 crores as of December 31, 2005 through 24 schemes. It is one of the largest assetmanagement companies in the country.

Investment Objectives

Prudential ICICI Fusion Fund is a close-ended diversified equity Scheme, with a maturity period of 5 years, that seeks togenerate long-term capital appreciation by investing predominantly in equity and equity related instruments of companiesacross large, mid and small market capitalization.

However, there can be no assurance that the investment objective of the Scheme will be realized.

Transparency The AMC will calculate and disclose the first NAV not later than 30 days from the closure of the New FundOffer. Subsequently, the NAV will be calculated and disclosed at the close of every Business Day. In addition, the AMC willdisclose details of the portfolio at least on a half-yearly basis.

Load

Entry Load

The Trustees for the present do not intent to charge any entry load on the investments made.

Exit Load

For the redemptions made before the Maturity Date of the Scheme, i.e. redemptions made during the repurchasefacility period, the following exit load structure will be applicable:


7

Sr. No. Investment Period Exit Load

1 If the amount sought to be redeemed is invested for a period of one yearor less than one year from the date of allotment. 5.00%

2 If the amount sought to be redeemed is invested for a period more thanone year but less than or equal to two years from the date of allotment. 4.00%

3 If the amount sought to be redeemed is invested for a period of more thantwo years but less than or equal to three years from the date of allotment. 3.00%

4 If the amount sought to be redeemed is invested for a period of more thanthree years but less than or equal to four years from the date of allotment. 2.00%

5 If the amount sought to be redeemed is invested for a period of more thanfour years from the date of allotment but redeemed before the date ofmaturity of the Scheme. 1.00%

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

Liquidity - To provide liquidity to investors, the Fund proposes to provide repurchase facility at Quarterly intervals (fordetails, please refer to page no.36. The investors may redeem the units on the stipulated dates for redemption as mentionedin this offer document on page no.36 at NAV based prices, subject to the prevalent exit load provisions. The Fund will, undernormal circumstances, endeavour to dispatch redemption cheques within T+3 Business Day from the date of acceptance ofthe redemption request at any of the official point(s) of transaction(s). This service standard will apply only at the centerswhere RBI handles clearing directly and is able to transfer funds from Mumbai on the same-day-value basis. In respect of allnon-RBI centers, for redemption payments, AMC will take additional day(s) not exceeding 3 Business Days- that wouldessentially be linked to the time taken by banks to clear funds at such Non-RBI centers.

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

New Fund Offer Expenses - The New Fund Offer expenses charged to the Scheme in this Offer Document will be limitedto 3.75% of the amount mobilised under the new fund offer. Under the Regulations, the Fund is entitled to charge newfund offer expenses up to a maximum of 6% of initial resources raised under the Scheme. The new fund offer expensescharged to the Scheme may be amortised over a period not exceeding five years and would be included in the NAV.

Investment Options - Investors under the Prudential ICICI Fusion Fund have the choice of a Growth Option or a DividendOption. Both the Options under the Scheme will have the same portfolio. The Trustees may at their discretion add one ormore additional options under the Scheme.

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

For details on tax update, please refer page 73 of this document.

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

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

8


RISK FACTORS AND SPECIAL CONSIDERATIONS

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

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

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

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 Fusion 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 the Scheme may be affected by changes in the general market conditions, factors and forces affecting capitalmarket, in particular, level of interest rates, various market related factors and trading volumes, settlement periods andtransfer procedures.

In the event of receipt of inordinately large number of redemption requests or of a restructuring of the schemes portfolio,there may be delays in the redemption of units. Please see page 8 for Risk factors and special consideration and page 55for Right to limt Redemption in this Offer Document.

The liquidity of the Schemes investments is inherently restricted by trading volumes in the securities in which it invests.

The Scheme may use various derivatives and hedging products from time to time, as would be available and permitted bySEBI, in an attempt to protect the value of the portfolio and enhance Unitholders interest. In case the Scheme utilizes anyderivatives under the Regulations, the Scheme may, in certain situations, be exposed to risks associated with the use ofderivatives.

Investors in the Scheme are not offered any guaranteed returns.

Mutual Funds being vehicles of securities investments are subject to market and other risks and there can be no guaranteeagainst loss resulting from investing in schemes. The various factors which impact the value of scheme investments includebut are not limited to fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political andeconomic environment, changes in government policy, factors specific to the issuer of securities, tax laws, liquidity of theunderlying instruments, settlements periods, trading volumes etc. and securities investments are subject to market risksand there is no assurance or guarantee that the objectives of the Scheme will be achieved.

As the liquidity of the Schemes investments could at times, be restricted by trading volumes and settlement periods, thetime taken by the Fund for redemption of units may be significant in the event of an inordinately large number ofredemption requests or of a restructuring of the Schemes portfolio. In view of this the Trustee has the right, at their solediscretion to limit redemptions (including suspending redemption) under certain circumstances, as described under thesection titled Right to limit Repurchases.

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

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

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

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

It may be noted that no prior intimation/indication would be given to investors when the composition/asset allocationpattern under the scheme undergo changes within the permitted band from 70% to 100% for equity and equity relatedsecurities and from 0% to 30% for debt, money market instruments & call money. The investors/unitholders can ascertaindetails of asset allocation of the scheme as on the last date of each month on AMCs website at www.pruicici.com.

In terms of SEBI circular dated December 12, 2003 and June 14, 2005 having ref SEBI/IMD/CIR No. 10/22701/03 and SEBI/IMD/CIR No. 1/42529/05 respectively and AMFIs communication having ref. No.35/MEM-COR/55/04-05 dated December31, 2004, each scheme should have a minimum of 20 investors at the time of allotment, in case Scheme fails to assembleminimum 20 investors at the time of allotment, the scheme shall be wound up, by following the guidelines prescribed bySEBI and the investors application money would be refunded. Further, at the time of allotment, no single investor shouldaccount for more than 25% of the corpus of such scheme (i.e. at the portfolio level), accordingly Fund is constrained toreject the application by a single unitholder having exposure of more than 25% at the time of allotment, hence, suchunitholder could be allotted limited units to such extent.


9

Different types of securities in which the scheme would invest as given in the offer document carry different levels and typesof risk. Accordingly the schemes risk may increase or decrease depending upon its investment pattern. E.g. corporate bondscarry a higher amount of risk than Government securities. Further even among corporate bonds, bonds which are AAArated are comparatively less risky than bonds which are AA rated.

Scheme Specific Risk Factors

1. Funds available for distribution on maturity date as well as upon winding up of the scheme before maturity will be limitedto the collection proceeds and the balance standing to the credit of Distribution Reserve Account. The Scheme will have noassets other than the scheme assets described herein and any distributions on the units shall be made only out of theScheme Assets.

The ability of the scheme to meet redemptions on the maturity date and payment of distributions to the holders of the Unitswill ultimately depend on the realization of the underlying cash flows from the Scheme Assets. Accordingly, there is noassurance or guarantee that the scheme will necessarily meet the redemption on maturity date.

The units are limited-recourse obligations of the Fund. No redemption or other distribution will be made on the units otherthan as expressly provided herein. The Trustee, the Custodian, the AMC or the Registrar and paying agent or any of theiraffiliates or any of their respective security holders, members, officers, directors, managers or incorporators or any otherperson or entity will not be obligated to make distributions in respect of the Units. Consequently, the Unit holders must relysolely on amounts received on the Scheme assets for distributions on the units. There can be no assurance that amountsreceived with respect to the Scheme assets will be sufficient to make distributions on any class of units. The Funds ability tomake distributions on units will be constrained by the Priority of Distributions. If amounts received on the Scheme assets areinsufficient to make distributions on the units, no other assets will be available for payment of deficiency and followingliquidation of all the Scheme assets, the Fund will have no further obligations in respect of the units.

2. Being a close-ended Scheme, the Scheme offers repurchase facility on a quarterly basis, subject to exit load prescribed by theTrustees from time to time, if any, to that extent scheme has limited liquidity exposure.

3. Investors may note that AMC/Fund Mangers investment decisions may not be always profitable. The Scheme proposes toinvest substantially in equity and equity related securities. The Scheme will, to a lesser extent, also invest in debt, cash andmoney market instruments. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of theseinvestments. Different segments of the Indian financial markets have different settlement periods and such periods may beextended significantly by unforeseen circumstances. The inability of the Scheme to make intended securities purchases dueto settlement problems could cause the Scheme to miss certain investment opportunities. By the same rationale, theinability to sell securities held in the Schemes portfolio due to the absence of a well developed and liquid secondary marketfor debt securities would result, at times, in potential losses to the Scheme, in case of a subsequent decline in the value ofsecurities held in the Schemes portfolio.

4. The scheme is also vulnerable to movements in the prices of securities invested by the scheme, which again could have amaterial bearing on the overall returns from the scheme. These stocks, at times, may be relatively less liquid as compared togrowth stocks.

5. The liquidity of the Schemes investments is inherently restricted by trading volumes in the securities in which it invests.

6. The value of the Schemes investments, may be affected generally by factors affecting securities markets, such as price andvolume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government,taxation laws or any other appropriate authority policies and other political and economic developments which may havean adverse bearing on individual securities, a specific sector or all sectors including equity and debt markets. Consequently,the NAV of the Units of the Scheme may fluctuate and can go up or down.

7. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by theScheme. Different segments of the Indian financial markets have different settlement periods and such periods may beextended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. The NAVof the Scheme can go up and down because of various factors that affect the capital markets in general.

8. The NAV of the Scheme to the extent invested in Debt and Money market securities, are likely to be affected by changes inthe prevailing rates of interest.

9. Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount ofliquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor,including a put option. Within the Regulatory limits, the AMC may choose to invest in unlisted securities that offer attractiveyields. This may however increase the risk of the portfolio.

10. While securities that are listed on the stock exchange carry lower liquidity risk, the ability to sell these investments is limitedby the overall trading volume on the stock exchanges. Money market securities, while fairly liquid, lack a well-developedsecondary market, which may restrict the selling ability of the Scheme(s) and may lead to the Scheme(s) incurring losses tillthe security is finally sold.

11. Investment decisions made by the AMC may not always be profitable, as actual market movements may be at variance withanticipated trends.

12. The Scheme may use various derivative products as permitted by the Regulations. Use of derivatives requires an understandingof not only the underlying instrument but also of the derivative itself. Other risks include, the risk of mispricing or impropervaluation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. The Scheme may usederivatives instruments like Stock Index Futures, Interest Rate Swaps, Forward Rate Agreements or other derivative instrumentsfor the purpose of hedging and portfolio balancing, as permitted under the Regulations and guidelines. Usage of derivativeswill expose the Scheme to certain risks inherent to such derivatives. Please refer page 41 for details.

10


13. Different segments of the Indian financial markets have different settlement periods and such periods may be extendedsignificantly by unforeseen circumstances. The inability of the Scheme to make intended securities purchases due tosettlement problems could cause the Scheme to miss certain investment opportunities. By the same rationale, the inabilityto sell securities held in the Schemes portfolio due to the absence of a well developed and liquid secondary market for debtsecurities would result, at times, in potential losses to the Scheme, in case of a subsequent decline in the value of securitiesheld in the Schemes portfolio.

14. 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 Schemes may be invested in securities denominated in foreigncurrencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by thechanges in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital also may behampered by changes in regulations concerning exchange controls or political circumstances as well as the application toit of other restrictions on investment. For further details, please refer page 98.

15. The performance of the scheme will be affected in case of unforeseen circumstances like political crisis, natural calamities,and changes in currency exchange rates or interest rates.

16. Fund manager tries to generate returns based on certain past statistical trend. The performance of the scheme may getaffected if there is a change in the said trend. There can be no assurance that such historical trends will continue.

17. The Schemes NAV will react to the stock market movements. The Investor could lose money over short periods due tofluctuation in the Schemes NAV in response to factors such as economic and political developments, changes in interestrates and perceived trends in stock prices market movements, and over longer periods during market downturns.

Redemption Risk: Investors may note that, this is a Close-ended scheme; accordingly units under the Scheme can beredeemed on Maturity date without charging any load. To provide liquidity to investors, the Fund proposes to providerepurchase facility at Quarterly intervals (for details, please refer to page no.36. The investors may redeem the units on thestipulated dates for redemption as mentioned in this offer document on page no.36 at NAV based prices, subject to theprevalent exit load provisions.

Liquidity risk

In case of abnormal circumstances it will be difficult to complete the square off transaction due to liquidity being poor instock futures/spot market. However fund will aim at taking exposure only into liquid stocks where there will be minimal riskto square off the transaction.

Fixed Income Securities

Interest Rate Risk: As with all debt securities, changes in interest rates may affect the Schemes Net Asset Value as theprices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices oflong-term securities generally fluctuate more in response to interest rate changes than do short-term securities. Indiandebt markets can be volatile leading to the possibility of price movements up or down in fixed income securities andthereby to possible movements in the NAV.

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

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

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

Money Market Securities are subject to the risk of an issuers inability to meet interest and principal payments on itsobligations and market perception of the creditworthiness of the issuer

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

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

Also please refer to Page 41 for example on Derivatives.


11

Risk Analysis on underlying asset classes in Securitisation:

Generally available Asset Classes for securitisation in IndiaCommercial VehiclesAuto and Two wheeler poolsMortgage pools (residential housing loans)Personal Loan, credit card and other retail loansCorporate loans/receivables

In terms of specific risks attached to securitisation, each asset class would have different underlying risks, however, residentialmortgages are supposed to be having lower default rates as an asset class. On the other hand, repossession and subsequentrecovery of commercial vehicles and other auto assets is fairly easier and better compared to mortgages. Some of the assetclasses such as personal loans, credit card receivables etc., being unsecured credits in nature, may witness higher default rates.As regards corporate loans/receivables, depending upon the nature of the underlying security for the loan or the nature of thereceivable the risks would correspondingly fluctuate. However, the credit enhancement stipulated by rating agencies for suchasset class pools is typically much higher and hence their overall risks are comparable to other AAA rated asset classes.

The rating agencies have an elaborate system of stipulating margins, over collateralisation and guarantees to bring risk limits inline with the other AAA rated securities.

It is relevant to note here that predominantly the scheme intends to invest in only AAA rated securitised debt. This comparesfavourably with a portfolio which is constructed on the basis of AA rated securitised debt.

Some of the factors, which are typically analyzed for any pool are as follows:

Size of the loan: generally indicates the kind of assets financed with loans. Also indicates whether there is excessive reliance onvery small ticket size, which may result in difficult and costly recoveries. To illustrate, the ticket size of housing loans is generallyhigher than that of personal loans. Hence in the construction of a housing loan asset pool for say Rs.1,00,00,000/- it may beeasier to construct a pool with just 10 housing loans of Rs.10,00,000 each rather than to construct a pool of personal loans asthe ticket size of personal loans may rarely exceed Rs.5,00,000/- per individual. Also to amplify this illustration further, if onewere to construct a pool of Rs.1,00,00,000/- consisting of personal loans of Rs.1,00,000/- each, the larger number of contracts(100as against one of 10 housing loans of Rs.10 lakh each) automatically diversifies the risk profile of the pool as compared to ahousing loan based asset pool.

Average original maturity of the pool: indicates the original repayment period and whether the loan tenors are in line withindustry averages and borrowers repayment capacity. To illustrate, in a car pool consisting of 60 month contracts, the originalmaturity and the residual maturity of the pool viz. number of remaining installments to be paid gives a better idea of the risk ofdefault of the pool itself. If in a pool of 100 car loans having original maturity of 60 months, if more than 70% of the contractshave paid more than 50% of the installments and if no default has been observed in such contracts, this is a far superiorportfolio than a similar car loan pool where 80% of the contracts have not even crossed 5 installments.

Loan to Value Ratio: Indicates how much % value of the asset is financed by borrowers own equity. The lower LTV, the better itis. This Ratio stems from the principle that where the borrowers own contribution of the asset cost is high, the chances of defaultare lower. To illustrate for a Truck costing Rs.20 lakhs, if the borrower has himself contributed Rs.10 lakh and has taken onlyRs.10 lakh as a loan, he is going to have lesser propensity to default as he would lose an asset worth Rs.20 lakhs if he defaultsin repaying an installment. This is as against a borrower who may meet only Rs.2 lakh out of his own equity for a truck costingRs.20 lakh. Between the two scenarios given above, the latter would have higher risk of default than the former.

Average seasoning of the pool: indicates whether borrowers have already displayed repayment discipline. To illustrate, in thecase of a personal loan, if a pool of assets consist of those who have already repaid 80% of the installments without default, thiscertainly is a superior asset pool than one where only 10% of installments have been paid. In the former case, the portfolio hasalready demonstrated that the repayment discipline is far higher.

Default rate distribution: Indicates how much % of the pool and overall portfolio of the originator is current, how much is in 0-30 DPD (days past due), 30-60 DPD, 60-90 DPD and so on. The rationale here is very obvious, as against 0-30 DPD, the 60-90 DPDis certainly a higher risk category.

Unlike in plain vanilla instruments, in securitisation transactions it is possible to work towards a target credit rating, which couldbe much higher than the originators own credit rating. This is possible through a mechanism called Credit enhancement. Thepurpose of credit enhancement is to ensure timely payment to the investors, if the actual collection from the pool of receivablesfor a given period are short of the contractual payouts on securitisation. Securitisation are normally non-recourse instrumentsand therefore, the repayment on securitisation would have to come from the underlying assets and the credit enhancement.Therefore, the rating criteria centrally focus on the quality of the underlying assets.

World over, the quality of credit ratings is measured by default rates and stability. An analysis of rating transition and defaultrates, witnessed in both international and domestic arena, clearly reveals that structured finance ratings have been characterizedby far lower default and transition rates than that of plain vanilla debt ratings. Further, internationally, in case of structuredfinance ratings, not only are the default rates low but post default recovery is also high.

In the Indian scenario, also, more than 95% of issuances have been AAA rated issuances indicating the strength of theunderlying assets as well as adequacy of credit enhancement.

Investment exposure of the Fund with reference to Securitised Debt

The Scheme will predominantly invest only in those securitisation issuances which have AAA rating indicating the highest levelof safety from credit risk point of view at the time of making an investment. The Scheme will not invest in foreign securitiseddebt.

12


The fund may invest in various type of securitisation issuances, including but not limited to Asset Backed Securitisation,Mortgage Backed Securitisation, Personal Loan Backed Securitisation, Collateralized Loan Obligation / Collateralized BondObligation and so on.

The fund does not propose to limit its exposure to only one asset class or to have asset class based sub-limits as it will primarilylook towards the AAA rating of the offering.

The fund will conduct an independent due diligence on the cash margins, collateralisation, guarantees and other creditenhancements and the portfolio characteristic of the securitisation to ensure that the issuance fits in to the overall objective ofthe investment in high investment grade offerings irrespective of underlying asset class.

Risk Factors specific to investments in Securitised Papers

Types of Securitised Debt vary and carry different levels and types of risks. Credit Risk on Securitised Bonds depends upon theOriginator and varies depending on whether they are issued with Recourse to Originator or otherwise.

Even within securitised debt, AAA rated securitised debt offers lesser risk of default than AA rated securitised debt. A structurewith Recourse will have a lower Credit Risk than a structure without Recourse.

Underlying assets in Securitised Debt may assume different forms and the general types of receivables include Auto Finance,Credit Cards, Home Loans or any such receipts, Credit risks relating to these types of receivables depend upon various factorsincluding macro economic factors of these industries and economies. Specific factors like nature and adequacy of propertymortgaged against these borrowings, nature of loan agreement/ mortgage deed in case of Home Loan, adequacy ofdocumentation in case of Auto Finance and Home Loans, capacity of borrower to meet its obligation on borrowings in case ofCredit Cards and intentions of the borrower influence the risks relating to the asset borrowings underlying the securitised debt.

Holders of the securitised assets may have low credit risk with diversified retail base on underlying assets especially whensecuritised assets are created by high credit rated tranches, risk profiles of Planned Amortisation Class tranches (PAC), PrincipalOnly Class Tranches (PO) and Interest Only class tranches (IO) will differ depending upon the interest rate movement and speedof prepayment.

Unlike in plain vanilla instruments, in securitisation transactions, it is possible to work towards a target credit rating, which couldbe much higher than the originators own credit rating. This is possible through a mechanism called Credit enhancement. Theprocess of Credit enhancement is fulfilled by filtering the underlying asset classes and applying selection criteria, which furtherdiminishes the risks inherent for a particular asset class. The purpose of credit enhancement is to ensure timely payment to theinvestors, if the actual collection from the pool of receivables for a given period is short of the contractual payout on securitisation.Securitisation is normally non-recourse instruments and therefore, the repayment on securitisation would have to come fromthe underlying assets and the credit enhancement. Therefore the rating criteria centrally focus on the quality of the underlyingassets.

The change in market interest rates prepayments may not change the absolute amount of receivables for the investors, but mayhave an impact on the re-investment of the periodic cash flows that the investor receives in the securitised paper.

Limited Liquidity & Price risk

Presently, secondary market for securitised papers is not very liquid. There is no assurance that a deep secondary market willdevelop for such securities. This could limit the ability of the investor to resell them. Even if a secondary market develops andsales were to take place, these secondary transactions may be at a discount to the initial issue price due to changes in the interestrate structure.

Limited Recourse, Delinquency and Credit Risk

Securitised transactions are normally backed by pool of receivables and credit enhancement as stipulated by the rating agency,which differ from issue to issue. The Credit Enhancement stipulated represents a limited loss cover to the Investors. TheseCertificates represent an undivided beneficial interest in the underlying receivables and there is no obligation of either the Issueror the Seller or the originator, or the parent or any affiliate of the Seller, Issuer and Originator. No financial recourse is availableto the Certificate Holders against the Investors Representative. Delinquencies and credit losses may cause depletion of theamount available under the Credit Enhancement and thereby the Investor Payouts may get affected if the amount available inthe Credit Enhancement facility is not enough to cover the shortfall. On persistent default of a Obligor to repay his obligation,the Servicer may repossess and sell the underlying Asset. However many factors may affect, delay or prevent the repossession ofsuch Asset or the length of time required to realize the sale proceeds on such sales. In addition, the price at which such Asset maybe sold may be lower than the amount due from that Obligor.

Risks due to possible prepayments: Weighted Tenor / Yield

Asset securitisation is a process whereby commercial or consumer credits are packaged and sold in the form of financialinstruments Full prepayment of underlying loan contract may arise under any of the following circumstances;

Obligor pays the Receivable due from him at any time prior to the scheduled maturity date of that Receivable; or

Receivable is required to be repurchased by the Seller consequent to its inability to rectify a material misrepresentation withrespect to that Receivable; or

The Servicer recognizing a contract as a defaulted contract and hence repossessing the underlying Asset and selling thesame

In the event of prepayments, investors may be exposed to changes in tenor and yield.


13

Bankruptcy of the Originator or Seller

If originator becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that the salefrom originator to Trust was not a sale then an Investor could experience losses or delays in the payments due. All possible careis generally taken in structuring the transaction so as to minimize the risk of the sale to Trust not being construed as a TrueSale. Legal opinion is normally obtained to the effect that the assignment of Receivables to Trust in trust for and for the benefitof the Investors, as envisaged herein, would constitute a true sale.

Bankruptcy of the Investors Agent

If Investors agent, becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that therecourse of Investors Agent to the assets/receivables is not in its capacity as agent/Trustee but in its personal capacity, then anInvestor could experience losses or delays in the payments due under the swap agreement. All possible care is normally taken instructuring the transaction and drafting the underlying documents so as to provide that the assets/receivables if and when heldby Investors Agent is held as agent and in Trust for the Investors and shall not form part of the personal assets of InvestorsAgent. Legal opinion is normally obtained to the effect that the Investors Agents recourse to assets/receivables is restricted in itscapacity as agent and trustee and not in its personal capacity.

Credit Rating of the Transaction / Certificate

The credit rating is not a recommendation to purchase, hold or sell the Certificate in as much as the ratings do not comment onthe market price of the Certificate or its suitability to a particular investor. There is no assurance by the rating agency either thatthe rating will remain at the same level for any given period of time or that the rating will not be lowered or withdrawn entirelyby the rating agency.

Risk of Co-mingling

The Servicers normally deposit all payments received from the Obligors into the Collection Account. However, there could be atime gap between collection by a Servicer and depositing the same into the Collection account especially considering that someof the collections may be in the form of cash. In this interim period, collections from the Loan Agreements may not be segregatedfrom other funds of the Servicer. If the Servicer fails to remit such funds due to Investors, the Investors may be exposed to apotential loss.

Due care is normally taken to ensure that the Servicer enjoys highest credit rating on stand alone basis to minimize Co-mingling risk.

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

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.

14


Sponsors

Prudential plcLaurence Pountney Hill,London EC4R DHH,United Kingdom

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

Asset Management Company

Prudential ICICI Asset Management Company Limited

Registered Office206 Ashoka Estate, 2nd Floor,24 Barakhamba Road,New Delhi 110 001Telephone: 022 - 24997000Fax : 022 - 24997029

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

Trustee

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

Registrar

Computer Age Management Services Private LimitedUnit : Prudential ICICI Mutual FundA&B Lakshmi Bhavan609 Anna SalaiChennai 600 006

Auditors to the Scheme

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

Custodian

HDFC Bank LimitedSandoz HouseDr. Annie Besant RoadWorliMumbai 400 018

Legal Advisors

A.R.A. LAW1st Floor,Agra Building,121, M.G. Road,Fort, Mumbai - 400 023


15

SECTION I

DUE DILIGENCE CERTIFICATE

It is confirmed that:

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

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

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

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

Ranganth Athreya

Sr. Vice President Legal, ComplianceAnd Company Secretary

Place : Mumbai

Date : August 16, 2005.

Note: The Due Diligence Certificate as stated above was submitted to SEBI on August 16, 2005.

16


DEFINITIONS

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

Asset Management Company or AMC or Prudential ICICI Asset Management Company Ltd. (formerly ICICI Asset

Investment Manager Management Company Limited), the Asset Management Companyincorporated under the Companies Act, 1956, and registered withSEBI to act as an Investment Manager for the schemes of PrudentialICICI Mutual Fund

Applicable NAV for purchase Being a Close-ended Scheme, units can be purchased at FaceValueduring New Fund Offer period only.In respect of valid applicationsreceived upto closure of banking hours of the last day of New FundOffer Period the cut-off time by the Mutual Fund alongwith a localcheque or a demand draft payable at par at the place where theapplication is received, the units will be issued at par. No applicationsreceived after the closure of banking hours will be accepted.

Applicable NAV for redemption In respect of valid applications received upto the cut-off time on thebusiness day on which repurchase facility is provided as prescribed onpage no. 36 by the Mutual Fund, same days closing NAV shall beapplicable.No applications will be accepted after the cut-off time onthe business day on which repurchase facility is provided by the MutualFund, as stated above.

Business Day A day other than (1) Saturday and Sunday or (2) a day on which theStock Exchange, Mumbai and National Stock Exchange are closedwhether or not the Banks in Mumbai are open. (3) a day on which theSale and Redemption of Units is suspended by the Trustee/AMC.However, the AMC reserves the right to declare any day as a non-business day at any of its locations at its sole-discretion.

Call Option An agreement that gives an investor the right (but not the obligation)to buy a stock/bond at a specified price within a specific time period.Call Option gives you the right to call in (buy) an asset. An investorgets profit on a call when the underlying asset increases in price.Theseller of the option undertakes to buy the underlying in exchange.

Money Market Instruments Commercial papers, commercial bills, treasury bills, Governmentsecurities having an unexpired maturity upto one year, call or noticemoney, certificate of deposit, usance bill and any other like instrumentsas specified by the - Reserve Bank of India from time to time includingmibor linked securities, call products having unexpired maturity uptoone year.

Custodian HDFC Bank Limited, Mumbai, acting as Custodian to the Scheme, orany other custodian who is approved by the Trustee.

FII Foreign Institutional Investors registered with SEBI under Securitiesand Exchange 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 betweenPrudential ICICI Trust Limited (formerly ICICI Trust Limited) andPrudential ICICI Asset Management Company Limited (formerly ICICIAsset Management Company Limited) as amended from time to time.

NAV Net Asset Value of the Units of the Scheme /Plans and Options therein,calculated on every Business Day in the manner provided in this OfferDocument or as may be prescribed by Regulations from time to time.

NRI Non-Resident Indian.

Offer Document This document issued by Prudential ICICI Mutual Fund, offering Unitsof Fusion Fund

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


17

Prudential ICICI Fusion Fund Prudential ICICI Fusion Fund and the options and investment plans, ifany, offered there under.

Put Option Put option is a financial contract between two parties, the buyer andthe seller of the option. The put allows the buyer the right (but not theobligation) to sell a financial instrument (the underlying instrument)to the seller of the option at a certain time for a certain price (the strikeprice). The seller assumes the corresponding obligations.The seller ofthe option undertakes to buy the underlying in exchange.

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 Securitiesand Exchange Board of India Act, 1992, as amended from time totime.

The Fund or The Mutual Fund Prudential ICICI Mutual Fund (formerly ICICI Mutual Fund), a trust setup under the provisions of the Indian Trusts Act, 1882. The Fund isregistered with SEBI vide Registration No.MF00393/6 dated October13, 1993 as ICICI Mutual Fund and has obtained approval from SEBIfor change in name to Prudential ICICI Mutual Fund vide SEBIs letterdated April 16, 1998.

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

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

Source scheme Source scheme means the scheme from which the investor is seekingto switch-out his investments to enable switch-in under the Scheme(Prudential ICICI Fusion Fund) during the New Fund Offer.

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

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

Unit The interest of an investor, which consists of one undivided share inthe Net Assets of the Scheme.

Unit holder A holder of Unit(s) in the scheme of Prudential ICICI Fusion Fund ascontained in this Offer Document.

18


SUMMARY PRUDENTIAL ICICI FUSION FUND

Name of the Scheme Prudential ICICI Fusion Fund

Structure Closed-ended equity scheme

Features Prudential ICICI Fusion Fund is a close-ended diversified equity Scheme,with a maturity period of 5 years, that seeks to generate long-termcapital appreciation by investing predominantly in equity and equityrelated instruments of companies across large, mid and small marketcapitalization.

Minimum Application Amount Rs 5000/- per application (plus in multiples of Re.1)

Duration of New Fund Offer The Scheme will open for subscription from February 1, 2006 to February27, 2006 during the New Fund Offer. The Trustee reserves the right toextend the closing date for the New Fund Offer subject to the conditionthat the New Fund Offer shall not be kept open for more than 30 days.

Target Amount The AMC seeks to raise a minimum subscription amount of Rs.1 lakhduring the New Fund Offer of the Scheme.

New Fund Offer Expenses The new fund offer expenses charged to the Scheme in this OfferDocument will be limited to 3.75% of the amount mobilised underthe New Fund Offer. Under the Regulations, the Fund is entitled tocharge new fund offer expenses up to a maximum of 6% of initialresources raised under the Scheme. The new fund offer expensescharged to the Scheme may be amortised over a period not exceedingfive years and would be included in the NAV.

Liquidity Purchase of Units:Being a close-ended Scheme, investors can subscribeto the Units of the Scheme during the New Fund Offer Period only. Toprovide liquidity to investors, the Fund proposes to provide repurchasefacility at Quarterly intervals. The investors may redeem the units onthe stipulated dates for redemption as mentioned in this offerdocument on page no.36, at NAV based prices, subject to the prevalentexit load provisions.The Units of the Scheme will not be listed on anyexchange, for the present.The Fund will, under normal circumstances,endeavour to dispatch redemption cheques within T+3 Business Daysfrom the date of acceptance of the redemption request at any of theofficial point(s) of transaction(s). This service standard will apply only atthe centers where RBI handles clearing directly and is able to transferfunds from Mumbai on the same-day-value basis. In respect of all non-RBI centers, for redemption payments, AMC will take additional day(s) not exceeding 3 Business Days- that would essentially be linked tothe time taken by banks to clear funds at such Non-RBI centers.

Transparency NAV will be determined on every Business Day, except in specialcircumstances described on page 56. NAV of the Scheme shall bemade available at all Customer Service Centers of the AMC. The AMCshall also endeavor to have the NAV published in a daily newspaperand updated on AMCs website (www.pruicici.com). AMC shall updatethe NAVs on the website of Association of Mutual Funds in India -AMFI (www.amfiindia.com) by 8.00 -p.m. every Business Day. In case ofany 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 Fundshall issue a press release providing reasons and explaining when theFund would be able to publish the NAVs.The Mutual Fund shallendeavour to disclose the full portfolio of the Scheme at least on ahalf-yearly basis.

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

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


19

Options available under the Scheme Investors under the Prudential ICICI Fusion Fund have the choice of aGrowth Option or a Dividend Option at present. The Growth and theDividend Option will have common portfolio. The Dividend option willbe the default option and hence if an investor fails to specify theoption applied for, he will be allotted units under the Dividend optionof the Scheme. The Trustees reserve right to introduce any other option(s)under the Scheme at a later date, by providing a notice to the investorson the AMCs website and by issuing a press release, prior tointroduction of such option(s).

Growth Option

Under this option the Scheme will not declare any dividends. Theincome earned by the Scheme will remain invested in the Scheme andwill be reflected in the Net Asset Value.

Dividend Option

This option is suited for investors seeking regular income throughdividends declared by the Scheme The Trustee may at their discretionand subject to availability of distributable surplus, approve thedistribution of dividends by the AMC out of the net surplus of theScheme. To the extent the net surplus is not distributed, the same willremain invested in the Scheme and be reflected. The dividends declared,if any, will be paid-out to the investors.

Maturity The scheme shall be fully redeemed at the end of the maturity periodi.e. 5 years from the date of allotment, unless rolled over as per SEBIguidelines. The Fund will, under normal circumstances, endeavour todispatch redemption cheques within T+3 Business Days from the dateof acceptance of the redemption request at any of the official point(s)of transaction(s). This service standard will apply only at the centerswhere RBI handles clearing directly and is able to transfer funds fromMumbai on the same-day-value basis. In respect of all non-RBI centers,for redemption payments, AMC will take additional day(s) notexceeding 3 Business Days- that would essentially be linked to thetime taken by banks to clear funds at such Non-RBI centers.

Roll Over Facility At the time of maturity, if it is perceived that the market outlook for thesimilar securities/ instruments is positive and investment in the similarkind of instruments would likely to fetch better returns for the investors,then in the interest of the Investor, the Trustees may decide to rolloverthe scheme. This would be based on demand/ request of the investorsfor the same. All other material details of the scheme/plans includingthe likely composition of assets immediately before the roll over, thenet assets and net asset value of the scheme, will be disclosed to theunitholders and a copy of the same filed with the SEBI. Such rolloverwill always be permitted only in case of those unitholders who expresstheir consent in writing.

Conversion of Close ended Scheme to Subject to the Regulations, the Trustee may choose to convert theOpen ended Scheme scheme to an open ended Scheme for the benefit of providing investors

the facililty of daily purchase and redemptions.

20


CONSTITUTION OF THE MUTUAL FUND

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

ICICI Mutual Fund was established by erstwhile ICICI Ltd. (Since merged with ICICI Bank Ltd), by execution of a Trust Deed datedAugust 25, 1993 by contributing Rs. 10 lacs. Prudential plc, through its wholly owned subsidiary, Prudential CorporationHoldings Limited (PCHL), has contributed an amount of Rs.12.2 lacs to the corpus of the Fund and has received permission forsuch contribution from the RBI vide letter No: CO.FID (I) 4940/10/I.07.02.200 (221) 97-98 dated April 25, 1998. SEBI hasapproved the change in name of the Fund to Prudential ICICI Mutual Fund vide its letter IIMARP / 88 / 98 dated April 16, 1998.A deed of amendment to the Trust Deed dated August 25, 1993 was executed and registered.

a) Sponsors

Prudential plc (formerly known as Prudential Corporation plc)

Prudential plc is a leading international financial services group providing retail financial products and services and fundmanagement to many millions of customers worldwide. As a group Prudential plc has, as of December 31, 2004, over GBP187billion of funds under management, more than 16 million customers and over 22,500 employees worldwide as of December 31,2003.

Given below is a brief summary of Prudentials financials:

(Rs. crores)

Year ended December 31

Year ended December 31 (Rs. crores)Description 2004 2003 2002

Total Income 291,760 246,466 269,446Profit Before Tax 5,093 2,742 3,792Profit After Tax 3,353 1,630 3,518Shareholders' Funds 33,542 25,683 28,739Earnings per share (Rs.) 15.75 8.47 18.41Equity Capital (5 Pence per share) 932.37 783.50 783.50Free Reserves 32,609 24,900 27,955Net-worth 33,542 25,683 28,739Book Value per share (Rs.) 140.93 128.42 143.69Percentage of dividend per share 316.80% 320% 520%Dividend per share (in Pence) 15.84P 16.00P 26.00P

ICICI Bank Limited

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

ICICI Bank is Indias second-largest bank with total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax ofRs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 573branches and extension counters and over 2,000 ATMs. ICICI Bank offers a wide range of banking products and financialservices to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries andaffiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank setup its international banking group in fiscal 2002 to cater to the cross-border needs of clients and leverage on its domesticbanking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada andRussia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates,Bangladesh and South Africa. (Source: Overview at www.icicibank.com).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary.ICICIs shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equityoffering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank of Madura Limited in an all-stockamalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002.

Pursuant to the Scheme of Amalgamation effective March 30, 2002, among ICICI, ICICI Personal Financial Services, ICICI CapitalServices and ICICI Bank, sanctioned by the High Court of Gujarat and the High Court of Judicature at Bombay and approved bythe Reserve Bank of India, ICICI, ICICI Personal Financial Services and ICICI Capital Services were merged with ICICI Bank in an all-stock merger. ICICI Bank is the surviving legal entity in the amalgamation.


21

Given below is a brief summary of ICICI Banks financials

(Rs. in crores)

*Year ended *Year ended *Year ended * Year ended

March 31, 2002 March 31, 2003 March 31,2004 March 31, 2005

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

* The results include the result of erstwhile ICICI Limited and its subsidiaries, ICICI Personal Financial Services Limited and ICICICapital Services Limited, amalgamated with the Bank w.e.f. March 30, 2002. The financials for the current periods are notcomparable 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, duringthe 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, redeemableat par on April 20, 2018. As per the notification received from Ministry of Finance, the restriction of section 12(1) of the BankingRegulation Act, 1949, prohibiting banks established after 1944 from holding preference shares, is not applicable to the Bankfor a specified period.

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

Prudential plc of UK, through its wholly owned subsidiary, Prudential Corporation Holdings Limited, has been issued andallotted shares aggregating 55% stake in the share capital of Prudential ICICI Asset Management Company Limited (AMC),whereas the balance 45% shareholding in the AMC is being held by ICICI Group. Out of the total 45% of the paid-up capitalof the AMC held by the ICICI Group, 30% is held by ICICI Bank and the balance 15% is held by a subsidiary of ICICI Bank Ltd.viz. ICICI Venture Funds Management Company Limited.

b) The Trustee Company (The Trustee) - Prudential ICICI Trust 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. of UK, through its wholly owned subsidiary, PrudentialCorporation Holdings Limited, has been issued and allotted shares aggregating 55% stake in the share capital of PrudentialICICI Trust Limited, whereas the balance 45% shareholding in the Prudential ICICI Trust Limited is being held by IC

prudential icici mutual fund - kotak mahindra bank prudential icici mutual fund (the fund) and the...

Documents

ICICI Prudential Mutual Fund · ICICI Prudential Mutual Fund 2 • Key Scheme Features..... 3 - 8 • Scheme performance snapshot..... 9 - 13

ICICI Prudential Indo Asia Equity Fund

ICICI PRUDENTIAL VALUE FUND – SERIES 13

ICICI Prudential Growth Fund - Series 2 (Presentation)

Prudential ICICI Gilt Fund - Kotak Mahindra Bank · Prudential ICICI Gilt Fund The particulars of the Prudential ICICI Gilt Fund, the mutual fund Scheme offered under this Offer Document,

Dynamic Plan - ICICI Prudential Mutual Fund

ICICI PRUDENTIAL VALUE FUND – SERIES 15 ASSET … · 2019. 9. 25. · ICICI Prudential Asset Management Company Limited Name of the Mutual Fund: ICICI Prudential Mutual Fund KEY

ICICI Prudential Mutual Fundarihantitrade.com/odin/odin/link1/Categorisation and... · 2018. 4. 27. · ICICI Prudential Balanced Fund ICICI Prudential Equity & Debt FundAggressive

ICICI Prudential Mutual Fund Form Download

ICICI PRUDENTIAL MUTUAL FUND APPLICATION FORM

Fund Factsheet - ICICI Prudential Mutual Fund | Mutual

ICICI Prudential Global Stable Equity Fund presentation

Invest in ICICI Prudential ESG Fund

September 2016 - ICICI Prudential Mutual Fund

ICICI Prudential Capital Protection Oriented Fund - … · - 1 - Name of the Asset Management Company: ICICI Prudential Asset Management Company Limited Name of the Mutual Fund: ICICI

Letter to Investors - ICICI Prudential Mutual Fund

Healthcare ETF PPT - ICICI Prudential Mutual Fund

ICICI Prudential Multiple Yield Fund - Series 5 -

Product Insight - ICICI Prudential Growth Fund – Series 7ifan.co.in/images/pdf/product-insight-icici.pdf · Managed by him are ICICI Prudential Banking and Financial Services Fund,ICICI

ICICI Prudential Multiple Yield Fund Plan-A

ICICI Prudential Asset Management Company Limited ICICI ... · PDF fileICICI Prudential Asset Management Company Limited ICICI Prudential Mutual Fund ... change in outlook of rating

ICICI Prudential Value Fund - Money Control

Prudential ICICI Mutual Fund - Kotak Mahindra Bank Prudential ICICI Mutual Fund ... life and non-life insurance, ... Asset Management Company Prudential ICICI Asset Management Company

SENSEX Prudential ICICI Exchange Traded Fund

Letter to Investors - ICICI Prudential Value Fund Date

Smallcap Fund PPT - ICICI Prudential Mutual Fund | Mutual

7. Big 127-174 - ICICI Prudential Mutual Fund

Annual Report Group - ICICI Prudential Mutual Fund

ICICI Prudential Dividend Yield Equity Fund Presentation

ICICI Prudential Growth Fund - Series 1 (Presentation)

ICICI Prudential Infrastructure Debt Fund - SID 16102012ICICI PRUDENTIAL MUTUAL FUND ICICI PRUDENTIAL MUTUAL FUND Offer of Units of Rs. 10 lakhs each during the New Fund Offer period

ICICI Prudential Asset Allocator Fund (PPT) - Investor Version

(BROWN) other derivative stcontent.icicidirect.com/MFSIDpdf/ICICI PRUDENTIAL... · Scheme Information Document ICICI Prudential Equity Income Fund 1 SCHEME INFORMATION DOCUMENT ICICI

SCHEME INFORMATION DOCUMENT ICICI Prudential India ...content.icicidirect.com/MFSIDpdf/ICICI PRUDENTIAL... · Scheme Information Document ICICI Prudential India Recovery Fund –