OFFER DOCUMENT

Prudential ICICI Balanced Fund
e) Options and Investment Plans offered under the Scheme
Under the Scheme, Investors may choose either the Growth Option or the Dividend Option. Please refer to page_________
“Dividends”
(i) Growth Option
The Scheme will not declare any dividends under this option. The income earned by the Scheme will remain reinvested
in the Scheme and will be reflected in the Net Asset Value. This option is suitable for investors who are not looking
for regular income. If Units under this option are redeemed after they have been held as a capital asset for a period
of at least one year from the date of acquisition, Unitholders will get benefit of long term capital gains tax. Please
refer to page 127 on “Taxation”
(ii) Dividend Option
This option is suitable for investors seeking income through dividend declared by the Scheme. The Trustee may
approve the distribution of dividend by AMC out of the net surplus under this Option. The remaining net surplus
after considering the dividend and tax, if any, payable there on will be ploughed back in the Scheme and be reflected
in the NAV.
It is the intention of the Trustee to distribute the dividends either half yearly or annually. It should, however, be
noted that actual distribution of dividends and the frequency of distribution as indicated above are provisional and
will be entirely at the discretion of the Trustee.
For tax benefits, please refer page 127.
(iii) Dividend Reinvestment facility :
The investors opting for Dividend Option may choose to reinvest the dividend to be received by them in additional
Units of the Scheme. Under this provision, the dividend due and payable to the Unitholders will be compulsorily and
without any further act by the Unitholders reinvested in the Scheme (under the Dividend Option, at the first exdividend
NAV). The dividends so reinvested shall be constructive payment of dividends to the Unitholders and
constructive receipt of the same amount from each Unitholder for reinvestment in Units.
On reinvestment of dividends, the number of units to the credit of Unitholder will increase to the extent of the
dividend reinvested divided by the NAV applicable as explained above. There shall, however, be no entry load on
the dividends so reinvested.
The AMC has been advised by the Statutory Auditors to the Fund that such dividends, which are reinvested, will be
tax exempt in the hands of the Unitholders.
f) Section 54EA and 54EB Investment Plans.
As per the amendments to the tax laws, as the provisions of section 54EA and 54EB are no more applicable, for fresh
subscriptions. But investments already made by the existing unitholders under the above plans will continue as per the
following provisions as follows::
Sections 54EA and 54EB of the Income-tax Act, 1961, were introduced by the Finance (No. 2) Act, 1996, with effect from
October 1, 1996 and consequently applicable to the transfer of long-term capital assets on or after that date. Sections
54EA and 54EB of the Income-tax Act, 1961 dealt with exemption from capital gains tax on the transfer of a long-term
capital asset, if within six months from the date of transfer, the net consideration / capital gains amount was invested in
the acquisition of Units of Mutual Fund referred to in clause (23D) of Section 10 of the Income-tax Act, 1961.
(i) 54EA Investment Plan.
Unitholders who chose this Plan have invested the whole or part of the net consideration arising from the transfer
of a long-term capital asset in the Units of the Scheme. The tax exemption would be proportionate to sale proceeds
invested to total proceeds. However, investors should note that the amount so invested would have to be
locked-in for a period of three years and the Units so allotted cannot be redeemed or switched to another
scheme/ option, during the lock-in period of three years. This is subject to any change that may be effected
in the Income-tax Act, 1961 or any guidelines / amendments / rules / clarifications issued by the Central
Board of Direct Taxes from time to time.
(ii) 54EB Investment Plan.
Unitholders who chose this Plan have invested the whole or part of the capital gains arising from the transfer of a
long-term capital asset in the Units of the Scheme. The tax exemption would be proportionate to sale proceeds
invested to total proceeds. However, investors should note that the amount so invested would have to be
locked-in for a period of seven years and the Units so allotted cannot be redeemed or switched to another
scheme/ option, during the lock-in period of seven years. This is subject to any change that may be effected
in the Income-tax Act, 1961 or any guidelines / amendments / rules / clarifications issued by the Central
Board of Direct Taxes from time to time.
After the prescribed lock-in period has elapsed, the Unitholders may redeem their Units at the Applicable NAV based
prices consistent with the redemption procedure stated in ‘Redemption of Units’. The difference between the amount
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