OFFER DOCUMENT

Prudential ICICI Balanced Fund
Adjudication: Complaint upheld. The advertisers submitted evidence that showed they were number one in some but
not all the aspects of their pension and life insurance business. The Authority accepted that the advertisers claim was
acceptable in relation to pensions and life insurance but considered that their information did not adequately substantiate
the general claim that the advertisers were “No. 1” in their field. The Authority asked the advertisers to specify in future
the sectors in which they could show they were “No. 1”.
The Prudential Assurance Company Limited (PAC): LAUTRO approached PAC in April 1994 with a request for its cooperation
in an informal review to validate LAUTRO’s pension rules for the future. Prudential agreed to co-operate. LAUTRO
subsequently expressed various concerns about the Prudential’s approach to pension transfers. The review was placed on
a formal footing in March 1995. Following further discussions with LAUTRO, LAUTRO agreed not to take any disciplinary
action and no charges were brought.
State of Florida (Division of Securities & Finance) fined National Planning Corporation (NPC) $10,000 for failing to register
two branch offices. NPC were also required to sign a Stipulation and Consent Agreement.
OPRA fined Prudential Nominees Ltd (PNL) £5000 following a determination regarding the Ledo Limited Pension Plan (a
SSAS) for which PNL is pensioneer trustee. The fine is in respect of failing to appoint an auditor and other procedural
failures. We have asked for reconsideration at OPRA Council meeting in March 2002.
National Planning Corporation (NPC) have established a $6m claimants funds after agreement with New York Attorney
General (NYAG). This follows NYAG investigation into sale of payphones and leaseback arrangements of ETS payphones
by representatives of NPC. NYAG allege that the sale constituted an unregistered securities offering.
Jackson National Life (JNL) have reached a settlement of Haggan case and the Andrews Dunn and Gales cases linked to it
for a sum of $10m. Finalised in January 2002 - the terms of the settlement are confidential and should not be disclosed
to third parties.
e) BORROWING BY THE MUTUAL FUND
Under the Regulations, the Fund is allowed to borrow to meet its temporary liquidity needs of the Fund for the purpose
of repurchase, redemption of units or payment of interest or dividend to the Unitholders. Further, as per the Regulations,
the Fund shall not borrow more than 20% of the Net Assets of the Scheme and the duration of such borrowing shall
not exceed a period of six months. The Fund may raise such borrowings after approval by the Trustee from any of its
Sponsors/Associate/Group Companies/Commercial Banks in India or any other entity at market related rates prevailing at
the time and applicable to similar borrowings. The security for such borrowings, if required, will be as determined by the
Trustee. Such borrowings, if raised, may result in a cost, which would be dealt with in consultation with the Trustees.
No borrowings have been raised under any of the Schemes of the Fund, as of the date of this Offer Document.
f) STOCK LENDING BY THE MUTUAL FUND
Subject to the Regulations and the applicable guidelines, the Scheme and the Plans thereunder may, if the Trustee permits,
engage in stock lending. Stock lending means the lending of stock to another person or entity for a fixed period of time,
at a negotiated compensation. The securities lent will be returned by the borrower on expiry of the stipulated period.
Please see page 50 on risks attached with stock lending. Each Plan, under normal circumstances, shall not have exposure
of more than 50% of its net assets in stock lending. The Plan may also not lend more than 50% of its net assets to any
one intermediary to whom securities will be lent. The AMC shall report to the Trustee on a quarterly basis as to the level
of lending in terms of value, volume and the names of the intermediaries and the earnings/losses arising out of the
transactions, the value of collateral security offered etc. The Trustees shall offer their comments on the above aspect in
the report filed with SEBI under sub-regulation 23(a) of Regulation 18.
G) POLICY ON OFFSHORE INVESTMENTS BY THE SCHEME
SEBI Regulations currently permit mutual funds to invest in ADRs/GDRs issued by Indian companies and notified foreign
securities subject to certain prescribed limits. SEBI vide its circular no. SEBI/MFD/CIR No.02 /6855/ 03 dated April 4, 2003
have allowed the mutual funds to make investments in equity of listed overseas companies which have a shareholding of
at least 10% in an Indian company listed on a recognised stock exchange in India (as on January 31 of the year of
investment).
Accordingly, SEBI has permitted each mutual fund to invest up to 10% of their net assets as on January 31, 2003 for
investment in foreign securities, subject to a maximum of US$ 50 million for each mutual fund irrespective of the size of
the assets as specified in SEBI circular MFD/CIR/18/21826/2002 dated November 7, 2002 remains unchanged.
In terms of Annual Monetary and Credit Policy for the year 2003-2004, RBI has decided to accord general permission to
mutual funds for their overseas investments within the overall cap - US $ 1.0 billion, once SEBI’s approval has been
obtained. This general permission will be available until further notice.
It is the Investment Manager’s belief that investment in ADRs/GDRs/ overseas securities offer new investment and portfolio
diversification opportunities into multi-market and multi-currency products. However, such investments also entail
additional risks. Such investment opportunities may be pursued by the Investment Manager provided they are considered
appropriate in terms of the overall investment objectives of the Scheme and the Plans thereunder. Since the Scheme and
the Plans thereunder would invest only partially in ADRs/GDRs/overseas securities, there may not be readily available and
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