ABRIDGED ANNUAL REPORT FOR F. Y

Transcription

1 ABRIDGED ANNUAL REPORT FOR F. Y Sponsors: ICICI Bank Limited Regd. Office: Landmark, Race Course Circle, Vadodara , India; and Prudential plc, Laurence Pountney Hill, London EC4ROHH, UK. Investment Manager: ICICI Prudential Asset Management Company Limited Corporate Office: 3rd Floor, Hallmark Business Plaza, Sant Dyaneshwar Marg, Bandra (East), Mumbai , Tel: (022) , Fax: (022) Central Service Office: 2nd Floor, Block B-2, Nirlon Knowledge Park, Western Express Highway, Goregaon (East), Mumbai Tel.: , Fax No.: Registered Office: 12th Floor, Narain Manzil, 23 Barakhamba Road, New Delhi Trustee: ICICI Prudential Trust Limited Registered Office: 12th Floor, Narain Manzil, 23 Barakhamba Road, New Delhi Registrars: Computer Age Management Services Pvt. Ltd. (CAMS) Registered Office: New No 10. Old No. 178, Opp. to Hotel Palm Grove, MGR Salai (K.H.Road), Chennai ICICI Prudential Banking & PSU Debt Fund ICICI Prudential Blended Plan - Plan A ICICI Prudential Blended Plan - Plan B ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Floating Rate Plan) ICICI Prudential Long Term Plan ICICI Prudential Medium Term Plan ICICI Prudential MIP - 5 (Monthly income is not assured and is subject to availability of distributable surplus) ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan) ICICI Prudential Ultra Short Term Plan ICICI Prudential Income Opportunities Fund ICICI Prudential R.I.G.H.T. (Rewards of Investing & Generation of Healthy Tax-savings) Fund ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited Mr. M. N. Gopinath Independent Ms. Chanda Kochhar Nominee ICICI Bank Ltd. Mr. M. S. Parthasarathy Independent Mr. Barry Lee Stowe Nominee Prudential plc Mr. Vinod Dhall Independent Mr. N. S. Kannan Mr. Vijay Thacker Mr. C. R. Muralidharan Nominee ICICI Bank Ltd. Independent Independent Mr. Keki Bomi Dadiseth Mr. Sandeep Batra Nominee Prudential plc Nominee ICICI Bank Ltd. Mr. Dileep Choksi Independent Mr. Suresh Kumar Independent Mr. Nimesh Shah Managing

2 Auditors Report The Board of Trustees ICICI Prudential Mutual Fund We have audited the attached Balance Sheet as at March 31, 2012 and the Revenue Account for the year ended on that date annexed thereto ICICI Prudential Banking & PSU Debt Fund,, ICICI Prudential Blended Plan - Plan A, ICICI Prudential Blended Plan - Plan B, ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Float Plan), ICICI Prudential Long Term Plan, ICICI Prudential Medium Term Plan, ICICI Prudential MIP - 5 (Monthly income is not assured and is subject to availability of distributable surplus), ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan), ICICI Prudential Ultra Short Term Plan, ICICI Prudential Income Opportunities Fund and ICICI Prudential R.I.G.H.T. (Rewards of Investing & Generation of Healthy Tax-savings) Fund These financial statements are prepared in accordance with the SEBI (Mutual Fund) Regulations, 1996 (the Regulations) and are the responsibility of the Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Standards on Auditing issued by the Institute of Chartered Accountants of India. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that: 1. We have obtained all information and explanations, which, to the best of our knowledge and belief were necessary for the purpose of our audit. 2. The Balance Sheet and the Revenue Account are in agreement with the books of account of the Scheme. 3. The accounts have been prepared in accordance with the accounting policies adopted by the trustee of the Fund and as specified in the Ninth Schedule to the Regulations. 4. In our opinion, valuation methods for Non Traded Securities if any, adopted by the scheme are fair and reasonable and are in accordance with the guidelines for valuation issued by SEBI and approved by the Trustee. 5. Without qualifying our opinion, we draw attention to note no. 1 in Schedule A of the Audited financial statements whereby the management has not provided the Cash Flow Statement and Segment Reporting for the reasons mentioned therein. 6. In our opinion and to the best of our information and according to the explanations given to us, the financial statements read with the accounting policies and notes to accounts attached thereto, give the information required as per the Regulations and give a true and fair view in accordance with the generally accepted accounting principles in India: a. In the case of Balance Sheet, of the state of affairs of ICICI Prudential Banking & PSU Debt Fund,, ICICI Prudential Blended Plan - Plan A, ICICI Prudential Blended Plan - Plan B, ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Float Plan), ICICI Prudential Long Term Plan, ICICI Prudential Medium Term Plan, ICICI Prudential MIP - 5 (Monthly income is not assured and is subject to availability of distributable surplus), ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan), ICICI Prudential Ultra Short Term Plan, ICICI Prudential Income Opportunities Fund and ICICI Prudential R.I.G.H.T. (Rewards of Investing & Generation of Healthy Tax-savings) Fund as at March 31, 2012; and b. In the case of Revenue Account of the Surplus of ICICI Prudential Banking & PSU Debt Fund,, ICICI Prudential Blended Plan - Plan A, ICICI Prudential Blended Plan - Plan B, ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Float Plan), ICICI Prudential Long Term Plan, ICICI Prudential Medium Term Plan, ICICI Prudential MIP - 5 (Monthly income is not assured and is subject to availability of distributable surplus), ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan), ICICI Prudential Ultra Short Term Plan, ICICI Prudential Income Opportunities Fund and ICICI Prudential R.I.G.H.T. (Rewards of Investing & Generation of Healthy Tax-savings) Fund, for the year ended on that date. For N M Raiji & Co. Chartered Accountants Firm Reg. No : W J. M. Gandhi Partner Membership No Place: Mumbai, Dated : June 23,

3 TRUSTEES REPORT by ICICI PRUDENTIAL TRUST LIMITED Dear Unitholder, We have pleasure in presenting the 19 th Annual Report on the Schemes of ICICI Prudential Mutual Fund ( the Mutual Fund or the Fund ) for the year ended March 31, 2012, along with the audited financial statements of the Schemes. I. SCHEME PERFORMANCE, FUTURE OUTLOOK AND OPERATIONS OF THE SCHEMES A. Performance of the Schemes and Investment Folios 1. Performance of the Schemes ICICI Prudential Trust Limited ( the Company/Trustee ) is acting as the Trustee to all the Schemes/Plans of the Fund. The net asset values (NAVs) and other pertinent details of the various Schemes are given below: Scheme Date of Allotment Quarterly AAUM for the period ended March 31, 2012 (Rs. in lakh) Quarterly AAUM for the period ended March 31, 2011 (Rs. in lakh) Net Asset Value per unit at March 30, 2012 (Rs.) Returns as on March 31, 2012 Last 1 year return Since inception returns Category ICICI Prudential Banking & PSU Debt Fund 01-Jan-10 58, , % 7.82% Open Ended Debt Fund CRISIL Short Term Bond Fund Index 8.28% 6.48% ICICI Prudential Blended Plan - Plan A 31-May-05 3, , % 7.35% Open Ended Fund CRISIL Liquid Fund Index 8.44% 6.59% ICICI Prudential Blended Plan - Plan B 31-May-05 75, , % 7.11% Open Ended Fund CRISIL Short Term Bond Fund Index 8.28% 6.80% ICICI Prudential Corporate Bond Fund 15-Sep-04 7, , % 7.12% Open Ended Debt Fund CRISIL Short Term Bond Fund Index 8.28% 6.60% ICICI Prudential Long Term Plan 28-Mar-02 8, , % 8.32% Open Ended Debt Fund CRISIL Composite Bond Fund Index ICICI Prudential Medium Term Plan 12-Jun-09 15, , % 6.14% Open Ended Debt Fund CRISIL Short Term Bond Fund Index 8.28% 6.19% ICICI Prudential MIP 5 (Monthly income is 03-May-11 3, ** 6.03% Open Ended Debt Fund not assured and is subject to availability of distributable surplus) CRISIL MIP Blended Index ** 6.23% ICICI Prudential Money Market Fund 06-Mar , % 5.42% Open Ended Money Market CRISIL Liquid Fund Index Fund ICICI Prudential Ultra Short Term Plan 12-Jun-09 19, , % 6.17% Open Ended Debt Fund CRISIL Short Term Bond Fund Index 8.28% 6.19% ICICI Prudential Income Opportunities Fund 18-Aug-08 8, , % 10.57% Open Ended Debt Fund CRISIL Composite Bond Fund Index 7.68% 7.30% ICICI Prudential R.I.G.H.T(Rewards of investing & generation of healthy tax savings) Fund 26-Sep-09 10, , % 11.29% Close Ended Equity Linked Savings Scheme S&P CNX Nifty -9.23% 2.26% AAUM - Average Assets Under Management Past performance may or may not be sustained in the future. NAV of growth option is considered for computation of returns without considering load. Returns are calculated on the basis of CAGR. For computation of returns, the allotment NAV has been taken as Rs.10. (Rs. 100 in case of ICICI Prudential Money Market Fund). The benchmark of ICICI Prudential Blended Plan - Plan A was changed with effect from July 21, ** Since the Scheme has not completed one year from the allotment, one return is not calculated. Since inception returns from the date of allotment is shown on an absolute As these schemes were launched before the launch of the appropriate benchmark index, benchmark returns since inception are not provided. Performance figures have been computed based on the last declared NAV. 2. Investment Folios The total number of live folios as at March 31, 2012 were lakh. B. Market Review and Outlook 1. Market Review FY12 1 Stock markets across the globe fell in 2011, and the domestic indices were no exception. As investors appeared to be putting behind the memories of the 2008 financial crisis with an upturn, 2011 showed what volatility can do to one s portfolio. A series of global and domestic events together rocked the investor confidence and markets over FY12. 1 FY represents a financial year from April 1 to March 31 of the following year; FY12 represents the financial year ended in

4 The year was ruled by a number of global factors ranging from the Euro-zone debt crisis and major sovereign downgrades to signs of economic slowdown in the U.S. and China. A worsening Euro crisis led to a flight to safety as investors bought gold. Brent crude prices remained high on account of supply concerns owing to geo-political tensions in Middle East oil producing countries which added to the increased volatility in equity markets. As the year progressed, strong household consumption and relatively healthier US banks led to a smart recovery in US equities. During the financial year, global turmoil and disappointing domestic economic data did not bode well for the Indian markets. Weak industrial output, slowing economic growth, and higher inflation were the key concerns for the year. The ongoing global economic turmoil coupled with rising interest rates back home impacted domestic economic growth. The GDP data released indicated a continuous slowdown in the overall economic growth for the year. Exports slowed down as demand weakened from European and US markets, owing to the uncertainty prevailing in both the markets. As imports grew faster, the trade deficit widened. The rupee declined against the US dollar owing to weak local equities, weakness in the euro and dollar demand from banks and importers. The headline inflation surged over 9% raising concerns, even as the central bank s efforts to curb rising prices did not achieve the expected efficacy. The Reserve Bank of India (RBI) hiked rates seven times in calendar 2011, with key rates rising by 225 bps in total. In January and March 2012 policy announcements, RBI cut Cash Reserve Ratio (CRR) by 75 and 50 bps respectively, to ease liquidity which had become structurally very high and took a pause with respect to repo rates indicating a change in its stance. Besides, the 2G spectrum-sale issue, widespread perception of lack of progress in economic reforms, corporate governance concerns, and disappointing corporate earnings did not help equities either. During the year, rising inflation, continual hikes in interests rates (in calendar 2011), liquidity crunch and huge government borrowing had a negative impact on government bond prices. The economic slowdown, however, raised hopes of a pause in rate-hikes by the RBI towards the end of the financial year, which in turn pushed up bond prices. The surge in yields was steeper at the shorter-end of the yield curve, primarily on account of the liquidity crunch that the markets witnessed from time to time during the year, thereby putting pressure on shorter duration bonds. 2. Key Statistics Domestic Indices 30-Mar-12 % change BSE Sensex 17,404 19, CNX Nifty 5,296 5, BSE Midcap 6,346 6, BSE Smallcap 6,629 8, Cash Vol (NSE) Rs.Cr. 12,053 19, F&O Vol (NSE) Rs.Cr. 88, , International Indices 30-Mar-12 % change DJIA 13,212 12, Nasdaq 3,092 2, FTSE 5,769 5, Nikkei 10,084 9, Hang Seng 20,556 23, SSE Composite 2,263 2, Strait Times 3,010 3, Institutional Flows (Equity) Fixed Income Sales (Rs. Pur (Rs.Cr.) Net (Rs.Cr.) YTD (Rs.Cr.) 30-Mar-12 % change Cr.) FII Flows # 3,948 5,248-1,299 44,038 Call Rate MF Flows # , Days T-Bill # As on 30 th March Days T-Bill Sectoral Performance (YOY on %) CBLO BSE METAL BSE CG BSE Realty BSE Power Index BSE Oil & Gas BSE PSU BSE Bankex BSE Teck BSE IT BSE CD BSE AUTO BSE HC BSE FMCG Repo Reverse Repo Yr Gsec Yr CD G-sec Vol (Rs.Cr) 8,434 4, US 10 Yr Bond

5 Currency Movement Commodity Price Movement 30-Mar-12 % change 30-Mar-12 % change INR/USD Brent ($/bbl) INR/GBP Gold ($/ounce) INR/EUR Silver ($/ounce) INR/Yen Sources: Reuters, Bloomberg, RBI. 3. Is FY13 likely to be different from FY12? RBI is expected to balance the twin objectives of controlling inflation with that of reviving economic growth. Global uncertainties present challenges to economic growth, but the current problems are more indigenous than global. With India s record of having resorted to reforms in periods of crisis, there is hope that the current problems will be countered with a sense of urgency. Equity Market Outlook The worsening fiscal deficit may press the government towards a diesel price hike. Given the current global economic conditions, policy makers are expected to favour fresh stimulus measures. Support from the European Central Bank to ailing European banks may improve the situation in Europe. Also all eyes are on the US Federal Reserve on what actions it will take. Commodities, especially Brent crude, have corrected during recent months. In the context of the steep depreciation of the rupee in recent months, official moves have sought to stabilize the exchange rate. While the triggers are more positive now than sometime back, investor sentiment continues to be negative towards equities. Domestic investors have generally been underweight in equities in the last four years, as macro-economic indicators and volatility of markets have weakened investors confidence. Going forward, investors may consider maintaining their equity allocation, using systematic investment plans (SIPs) to counter volatility and derive the benefit of equity investing over the long term. Fixed Income Market Outlook Reduced official subsidies and higher prices of various types of oil products could help the government achieve fiscal consolidation, apart from signaling its commitment to continue with the reform agenda. Such measures would however need the backing of strong political will. In the absence of such moves, the growing fiscal deficit could result in higherthan-budgeted government borrowing. Large revenues from telecom spectrum auction and the targeted divestment of government equity holdings of about Rs. 30,000 crore, would, however, help contain the deficit. The longer end of the yield curve will continue to be influenced by demand-supply equation of government securities. News of further monetary easing, fiscal adjustment, and RBI s open market operations are expected to trigger trading rallies. Absence of such steps would depress prices and widen yields. C. Operations of the Schemes 1. Average Assets under Management (AAUM) The AAUM of the Mutual Fund for the quarter ended March 31, 2012 stood at Rs. 68, crore, while for the quarter ended March 31, 2011, the AAUM of the Mutual Fund was Rs. 73, crore. As of March 31, 2012, the Fund comprised 43 open-ended schemes, 2 exchange traded funds, 17 interval fund plans, 2 fund of funds schemes (of which one has five sub-plans) and 93 plans under close ended schemes. During the year under review the Fund launched one fund of funds scheme; one open ended debt scheme, and 71 plans under close ended debt schemes. 2. Operations and Consumer Service With a view to rendering timely and efficient customer service, the Investment Manager of the Fund, viz., ICICI Prudential Asset Management Company Ltd. ( the AMC ) has been effectively leveraging on its 126 branches, including 36 functioning as official points of acceptance of transactions, effectively servicing the large client base. Additionally a dedicated contact center has been effective in providing investor support and redressing their grievances. The AMC s focus has been on technological innovation for facilitating investors convenience. 3. Scheme-wise commentary ICICI Prudential Banking & PSU Debt Fund ICICI Prudential Banking & PSU Debt Fund is an open-ended Debt Scheme, seeking for relatively steady returns by investing in money market securities issued by Banks & Public Sector Undertaking (PSU). The Scheme returns in FY12 for various plans are as follows: Regular Growth: 8.54% Premium Plus Growth: 9.33% The benchmark CRISIL Short Term Bond Fund Index posted a return of 8.28% for the year. 5

6 The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Blended Plan Plan A ICICI Prudential Blended Plan Plan A focuses on generating returns using arbitrage opportunities and other derivative strategies. The scheme posted a return of 7.80% in FY12. The benchmark CRISIL Liquid Fund Index posted a return of 8.44% during the year. The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Blended Plan - Plan B ICICI Prudential Blended Plan - Plan B is an open-ended Debt Scheme, seeking to provide capital appreciation and income distribution to unitholders by investing predominantly in debt securities and the balance portion in equity & equity related securities including derivatives. The Scheme returns in FY12 for various plans are as follows: I: 8.88% II: 9.81% The benchmark CRISIL Short Term Bond Fund Index posted a return of 8.28% for the year. The AAUM of the scheme during the last quarter of FY12 was Rs crore ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Floating Rate Plan) ICICI Prudential Corporate Bond Fund is a debt fund which aims to invest in corporate bonds of 3 to 7 years tenure; the endeavor of the fund is to focus on high accruals corporate papers of medium-to-long time period. The Scheme returns in FY12 for various plans are as follows: Plan A: 8.06% Plan B: 8.15% The benchmark CRISIL Short Term Bond Fund Index posted a return of 8.28% for the year. The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Long Term Plan ICICI Prudential Long Term Plan is an open-ended income fund that seeks to generate income through investments in a range of debt and money market instruments with a view to maximizing income while maintaining an optimum balance of yield, safety and liquidity. The Scheme returns in FY12 for various plans are as follows: Regular Growth: 8.49% Premium Growth: 9.06% Premium Plus Growth: 9.27% The benchmark CRISIL Composite Bond Fund Index posted a return of 7.68 % for the year The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Medium Term Plan ICICI Prudential Medium Term Plan is a medium term income fund which aims to invest in fixed income securities of highest credit quality; the portfolio seeks to invest in securities which offer returns commensurate with low levels of risk. The Scheme returns in FY12 for various plans are as follows: Regular Growth: 8.53% Premium Plus Growth: 8.91% The benchmark CRISIL Short Term Bond Fund Index posted a return of 8.28% for the year The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential MIP 5 (An open ended fund. Monthly income is not assured and is subject to availability of distributable surplus) ICICI Prudential MIP 5 seeks to generate regular income through investments in fixed income securities so as to make regular dividend distribution to unitholders seeking the Dividend. The secondary objective of the Scheme is to generate long-term capital appreciation by investing a portion of the Scheme s assets in equity and equity related instruments (up to 10% of the net assets of the scheme). The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan) ICICI Prudential Money Market Fund is an open-ended money market fund with an objective to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through investments made primarily in money market and debt securities. The aim is to optimize returns while providing liquidity. 6

7 The Scheme returns in FY12 for various plans are as follows: Regular Growth: 8.32% Cash Growth: 9.11% The benchmark CRISIL Liquid Fund Index posted a return of 8.44% for the year. The AAUM of the scheme during the last quarter of FY12 was Rs. 1, crore. ICICI Prudential Ultra Short Term Plan ICICI Prudential Ultra Short Term Plan is an open-ended ultra short term fund that intends to generate regular income through investments in a basket of debt and money market instruments of very short maturities with a view to providing reasonable returns, while maintaining an optimum balance of safety, liquidity and yield. The Scheme returns in FY12 for various plans are as follows: Regular Growth: 8.29% Premium Growth: 8.39% Super Premium Growth: 9.08% The benchmark CRISIL Short Term Bond Fund Index posted a return of 8.28% for the year. The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Income Opportunities Fund ICICI Prudential Income Opportunities Fund is an open-ended debt fund, which invests in both short and long-term debt securities of Government and Corporate sector. Government securities provide safety to the portfolio while investment in corporate debt securities seek to give that extra return on the credit spread over gilts. The Scheme returns in FY12 for various plans are as follows: Retail Growth: 6.87% Institutional Plan Growth: 7.22% The benchmark CRISIL Composite Bond Fund Index posted a return of 7.68% for the year. The AAUM of the scheme during the last quarter of FY12 was Rs crore. ICICI Prudential Rewards of Investing & Generation of Healthy Tax Savings (RIGHT) Fund ICICI Prudential Rewards of Investing & Generation of Healthy Tax Savings (RIGHT) Fund is a ten year close-ended equity linked savings scheme that seeks to generate long-term capital appreciation to unitholders from a portfolio that is invested predominantly in equity and equity related securities of large capitalization companies and emerging mid cap companies along with income tax benefit. The scheme posted a return of 6.43% in FY12, better than the -9.23% posted by the benchmark S&P CNX Nifty Index. The AAUM of the scheme during the last quarter of FY12 was Rs crore. II. BRIEF BACKGROUND OF SPONSORS, TRUST, TRUSTEE AND THE AMC A. Sponsors 1. ICICI Bank Limited ICICI Bank is India s second-largest bank with profit after tax Rs billion for the year ended March 31, It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a presence in 18 other countries, too. The Bank has subsidiaries in Canada, Russia and United Kingdom (UK), branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The UK subsidiary of the Bank has established branches in Belgium and Germany. ICICI Bank s equity shares are listed in India on the Bombay Stock Exchange Limited (BSE Limited) and National Stock Exchange of India Limited (NSE) and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). 2. Prudential plc Prudential plc is an international financial services group with significant operations in Asia, US and UK. The group serves over 2.6 crore customers and manages 351 billion of assets (as of 31 December 2011). Prudential is one of the best capitalised insurers in the world with an Insurance Groups Directive (IGD) capital surplus estimated at 4.0 billion (as of 31 December 2011 before final dividend). Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America. The Group is structured around four main business units: a. Prudential Corporation Asia Prudential Corporation Asia comprises the life insurance, asset management and consumer finance operations 7

8 of Prudential plc in Asia. Prudential has operations in 13 markets and is a leading life insurer in Asia, providing a comprehensive range of savings, protection and investment products. Prudential s asset management business in Asia, Eastspring Investments, is one of the region s leading fund managers and the largest onshore provider of mutual funds. b. Jackson National Life Insurance Company Jackson is one of the largest life insurance companies in the US, providing retirement savings and income solutions to holders of more than 29 lakh policies and contracts in force. Jackson is also one of the top three providers of variable annuities in the US. Founded 50 years ago, Jackson has a long and successful record of providing advisers with the products, tools and support to design effective retirement solutions for their clients. c. Prudential UK & Europe Prudential UK is a leading life and pensions provider to approximately 70 lakh customers in the United Kingdom. It has a number of major competitive advantages including significant longevity experience, risk-management and multi-asset investment capabilities, a highly respected brand and financial strength. Prudential UK continues to pursue a value-driven strategy built around its core strengths in with-profits and annuities. d. M&G M&G is Prudential s UK and European fund management business with total assets under management of 201 billion (as of 31 December 2011). M&G has been investing money for individual and institutional clients for 80 years. Today it is one of Europe s largest active investment managers, as well as being a powerhouse in fixed income. B. ICICI Prudential Mutual Fund ICICI Prudential Mutual Fund ( the Mutual Fund or the Fund ) was set up as a Trust in accordance with the provisions of the Indian Trusts Act, 1882 under a Trust Deed dated August 25, 1993 (since amended from time to time). The Fund is sponsored by Prudential plc (through its wholly owned subsidiary Prudential Corporation Holdings Ltd) and ICICI Bank Ltd. ICICI Bank Ltd. contributed Rs. 10 lakh and Prudential plc, with the approval of Reserve Bank of India, Rs lakh to the corpus of the Fund. C. Trustee Company ICICI Prudential Trust Limited ( the Company/Trustee ) is the Trustee of the Fund (including its schemes). It was incorporated under the Companies Act, 1956, in terms of a Trust Deed executed on August 25, The Trust Deed is registered under the Indian Registration Act, The Trustee is the exclusive owner of the Fund and holds the Fund in trust for the benefit of the unitholders. The Trustee has been discharging its duties and carrying out the responsibilities as provided in Securities and Exchange Board of India (Mutual Fund) Regulations, 1996 (the Regulations ) and the Trust Deed. The Trustee seeks to ensure that the Fund and the schemes floated thereunder are managed by the AMC in accordance with the Trust Deed, the Regulations, and the directions and guidelines issued by the Securities & Exchange Board of India (SEBI), the stock exchanges concerned, the Association of Mutual Funds in India and other Regulatory agencies. 1. Share Capital ICICI Bank Ltd. holds 51% of the share capital of the Trustee; Prudential plc, through its wholly owned subsidiary, Prudential Corporation Holdings Ltd., holds the remaining 49%. 2. Board of s As of March 31, 2012, the Board comprised: Sr. No. Name of the Status 1. Mr. M. N. Gopinath Independent (Chairman) 2. Mr. M. S. Parthasarathy Independent 3. Mr. Vinod Dhall Independent 4. Mr. Keki Bomi Dadiseth Nominee Prudential plc 5. Mr. Sandeep Batra Nominee ICICI Bank Ltd. Mr. Sandeep Batra was appointed to the Board with effect from August 4, 2011, in place of Ms. Madhabi Puri-Buch, an ICICI Bank nominee, who had resigned from the Board effective April 12, D. ICICI Prudential Asset Management Company Limited ICICI Prudential Asset Management Company Limited ( the AMC ), a company registered on June 22, 1993 under the Companies Act, 1956, was registered with SEBI on October 13, 1993 to act as the Investment Manager to all the Schemes of ICICI Prudential Mutual Fund. The Trustee has entered into an Investment Management Agreement dated September 3, 1993 with the AMC to function as the Investment Manager for all the schemes of the Fund. The AMC has been providing portfolio management services (PMS) since October 2000, with the requisite approvals/ permissions from SEBI/Trustee as envisaged under Regulation 24(b) of the Regulations. Further, the AMC is rendering Advisory Services to SEBI-registered foreign institutional investors (FIIs) and their sub-accounts, in accordance with the terms of the license granted for the purpose. 8

9 The AMC ensures that there are no conflicts of interest inter se its functions as the Investment Manager of the Fund, Portfolio Manager and Advisor. The AMC has secured a leading position in the Indian mutual fund industry with quarterly AAUM of Rs. 68, crore for the quarter ended March 31, The AMC manages a comprehensive range of Schemes to meet the varying investment needs of its investors spread across various cities through 248 Official Points of Transactions (including 212 branches operated through the Registrar of the Mutual Fund) in the country as on March 31, Share Capital ICICI Bank Ltd. holds 51% of the share capital of the AMC; Prudential plc, through its wholly owned subsidiary, Prudential Corporation Holdings Ltd., holds the remaining 49%. 2. Board of s As on March 31, 2012, the Board comprised Sr. No. Name of the Status 1 Ms. Chanda Kochhar Nominee ICICI Bank Ltd. (Chairperson) 2 Mr. Barry Lee Stowe Nominee Prudential plc 3 Mr. N. S. Kannan Nominee ICICI Bank Ltd. 4 Mr. Vijay Thacker Independent 5 Mr. C. R. Muralidharan Independent 6 Mr. Dileep Choksi Independent 7 Mr. Suresh Kumar Independent 8 Mr. Nimesh Shah Managing Mr. Suresh Kumar was appointed to the Board effective April 21, Dr. (Ms.) Swati A Piramal resigned from the Board effective July 8, III. INVESTMENT OBJECTIVES OF THE SCHEMES ICICI Prudential Banking and PSU Debt Fund To seek to generate regular income through investments in a basket of debt and money-market instruments consisting predominantly of securities issued by entities such as banks and public sector undertakings (PSUs) with a view to provide reasonable returns, while maintaining an optimum balance among safety, liquidity and yield. However, there can be no assurance that the investment objective of the Scheme will be realized. ICICI Prudential Blended Plan - Plan A To provide capital appreciation and income distribution to unitholders by investing in equity and equity-related securities, including derivatives, and the balance portion in debt securities. However, there is no assurance that the investment objective of the Scheme will be realized. ICICI Prudential Blended Plan - Plan B To provide capital appreciation and income distribution to unitholders by investing predominantly in debt securities and the balance in equity and equity-related securities, including derivatives. However, there can be no assurance that the investment objective of the Plan will be realized. ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long term Floating Rate Plan) To generate income through investments in a range of debt and money-market instruments of various maturities with a view to maximizing income while maintaining the optimum balance among yield, safety, and liquidity. However there is no assurance or guarantee that the objectives of the Scheme will be achieved. ICICI Prudential Long Term Plan To generate income through investments in a range of debt and money-market instruments of various maturities with a view to maximizing income while maintaining the optimum balance among yield, safety, and liquidity. However, there can be no assurance that the investment objectives of the Scheme will be realized. ICICI Prudential Medium Term Plan To seek to generate regular income through investments in debt and money-market instruments with a view to provide regular dividend payments and secondarily to achieve growth of capital. However, there can be no assurance that the investment objective of the Scheme will be realized. ICICI Prudential MIP 5 (An open ended fund. Monthly income is not assured and is subject to availability of distributable surplus) The Scheme seeks to generate regular income through investments in fixed income securities so as to make regular dividend distribution to unitholders seeking the Dividend. The secondary objective of the Scheme is to generate long term capital appreciation by investing a portion of the Scheme s assets in equity and equity related instruments. However, there 9

10 can be no assurance that the investment objectives of the Scheme will be realized. ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan) The Scheme seeks to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through investments made in money market securities. However, there is no assurance or guarantee that the objectives of the Schemes will be achieved. ICICI Prudential Ultra Short Term Fund To seek to generate regular income through investments in a basket of debt and money-market instruments of very short maturities to provide reasonable returns, while maintaining the optimum balance among safety, liquidity, and yield. However, there can be no assurance that the investment objective of the Scheme will be realized. ICICI Prudential Income Opportunities Fund To generate income through investments in a range of debt and money-market instruments of various credit ratings and maturities with a view to maximizing income while maintaining the optimum balance among yield, safety and liquidity. However, there can be no assurance that the investment objective of the Scheme will be realized. ICICI Prudential R.I.G.H.T Fund (Rewards of Investing and Generation of Healthy Tax Savings) ICICI Prudential R.I.G.H.T. Fund (Rewards of Investing and Generation of Healthy Tax Savings) is a ten year close-ended equity linked savings scheme that seeks to generate long-term capital appreciation to unit-holders from a portfolio that is invested predominantly in equity and equity related securities of large capitalization companies and emerging mid cap companies along with income tax benefit. The investment policies shall be framed in accordance with SEBI (Mutual Funds) Regulations, 1996 and rules and guidelines for Equity Linked savings Scheme (ELSS), 2005 (and modifications to them). However, there can be no assurance that the investment objective of the Scheme will be realized IV. SIGNIFICANT ACCOUNTING/ VALUATION POLICIES Accounting policies are in accordance with Securities and Exchange Board of India (Mutual Fund) Regulations, The changes in the accounting/valuation policies are stated in the notes to the financial statements of the Schemes. V. UNCLAIMED DIVIDEND AND REDEMPTION Details of unclaimed dividends and redemptions under the various Schemes are given as below: Unclaimed Dividend/ Redemption normally represent the time lag between funding of the respective accounts (with bank) by the AMC and the time taken for presentation of redemption/ dividend warrant by the investors. Unclaimed Dividend/ Redemption amount as on March 31, 2012 is as follows: Name of the Scheme Dividend Redemption Amount (Rs.) No. of investors Amount (Rs.) No. of investors ICICI Prudential Blended Plan - Plan A 260, , ICICI Prudential Blended Plan - Plan B 19, ICICI Prudential Corporate Bond Fund 9, ICICI Prudential Income Opportunities Fund 16, , Total 277, ,

11 VI. DISCLOSURE OF INVESTOR COMPLAINTS The disclosure regarding investors complaints is as under: Redressal of Complaints received against ICICI Prudential Mutual Funds during April 2011 to March 2012 Name of the Mutual Fund ICICI Prudential Mutual Fund Total number of folios 2,837,480 Complaint Type of complaint# (a) No. of (b) No of Action on (a) and (b) code complaints complaints Resolved Non pending received Within Beyond Actionable* 0-3 at the beginning of the year during the period 30 days days days 180 days months I A I B I C I D II A II B II C III A III B III C III D III E Non receipt of Dividend on Units Interest on delayed payment of Dividend Non receipt of Redemption Proceeds (Refer ** below) Interest on delayed payment of Redemption Non receipt of Statement of Account/Unit Certificate Discrepancy in Statement of Account Non receipt of Annual Report/ Abridged Summary Wrong switch between Schemes Unauthorized switch between Schemes Deviation from Scheme attributes Wrong or excess charges/ load Non updation of changes viz. address, PAN, bank details, nomination, etc months Pending 6-9 months IV Others TOTAL months # including against its authorized persons/ distributors/ employees. etc. ** -Owing to reclassification of complaints in accordance with AMFI guidelines, closing no. of complaints, reported as 0 as at March 31, 2011, was revised and reported as 1, being opening balance of complaints as at April 1, *Non actionable means the complaint that are incomplete / outside the scope of the mutual fund VII. STATUTORY INFORMATION A. The Sponsors are not responsible or liable for any loss resulting from the operation of the schemes of the Fund beyond their initial contribution to the extent contributed of Rs lakh for setting up the Fund and accretions/additions thereto. B. The price and redemption value of the units, and income from them, can go up as well as down with fluctuations in the market values of the underlying investments. C. The full Annual Report shall be put on the website ( and shall be available for inspection at the Central Service Office of the AMC. An existing or a prospective unitholder can contact the Central Service Office of the AMC to obtain a copy of the trust deed and the full Annual Report of the Fund/AMC. The AMC/ Fund reserve the right to charge fees for providing copy of these documents. VIII. RISK MANAGEMENT SYSTEM IX. As mandated by a SEBI circular dated September 30, 2002, and in line with the policies of the sponsors of the Fund, the AMC has adopted a full-fledged risk-management framework. In the opinion of the Trustee, on the basis of the data presented and reviewed at meetings of its Board of s, the system serves its objectives adequately. LIABILITY AND RESPONSIBILITY OF THE TRUSTEE AND THE SPONSORS The Trustee s primary responsibility is to safeguard the interests of the unitholders and, inter alia, ensure that the AMC functions in the interests of investors and in accordance with the Regulations, the provisions of the Trust Deed, and the Scheme Information Documents of the Schemes of the Fund. From the information provided to the Trustee at meetings of its Board and Committee, and reviews the Trustee has undertaken through its Board of s at such meetings, the Trustee are of the opinion that the AMC has operated in the interests of the unitholders and functioned in compliance with the Regulations.

12 X. ACKNOWLEDGEMENT The Trustee expresses its gratitude to the unitholders for their continued support, SEBI, RBI, the registrars, bankers, the custodian of the Fund, the stock exchanges where the units of various Schemes are listed, ICICI Bank and Prudential plc. and the employees of the AMC for their continued support and assistance during the year. For and on behalf of ICICI Prudential Trust Ltd. M. N. Gopinath Chairman Place: Mumbai Date: July 17,

13 ICICI Prudential Mutual Fund Address:2nd Floor, Block B-2, Nirlon Knowledge Park, Western Express Highway, Goregaon, Mumbai Abridged Balance Sheet as at March 31, 2012 (figures as per Audited Balance Sheet) (As per format prescribed for Abridged schemewise Annual Report- SEBI/Md/CIR No.8/132968/2008 dt 24/07/08) ICICI Prudential Banking & PSU ICICI Prudential Blended Plan ICICI Prudential Blended Plan Debt Fund - Plan A - Plan B (` in Lakhs) ICICI Prudential Income Opportunities Fund LIABILITIES 1 Unit Capital 55, , , , , , , , Reserves & Surplus 2.1 Unit Premium Reserve (194.91) (321.89) Unrealised Appreciation Reserve 2.3 Other Reserves 4, , , , , , , Loans & Borrowings 4 Current Liabilities & Provisions 4.1 Provision for doubtful Income / deposits 4.2 Other Current Liabilities & Provisions TOTAL 60, , , , , , , , ASSETS 1 Investments 1.1 Listed Securities a Equity Shares - - 2, , b Indian Depository Receipts c Warrants Preference Shares Equity Linked debentures Other debentures & Bonds , , Securitised debt Securities 1.2 Securities Awaited Listing Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds Securitised debt Securities 1.3 Unlisted Securities Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds , Securitised debt Securities 1.4 Government Securities , Treasury Bills 1.6 Commercial Papers , Certificate of Deposits 31, , , , , Bill Rediscounting 1.9 Units of Domestic Mutual Fund 1.10 Foreign Securities 1.11 Gold Investments 31, , , , , , , , Deposits , , Other Current Assets 3.1 Cash & Bank Balance CBLO/ Reverse Repo Lending 29, , , Others Deferred Revenue Expenditure (To the Extent not written off) TOTAL 60, , , , , , , , Fund Manager Chaitanya Pande Kayzad Eghlim Equity - Kayzad Eghlim Debt -Devang Shah Avnish Jain Refer to our Report dated June 23, 2012 in respect of complete Financial Statements For ICICI Prudential Asset Management Company Ltd. For and on behalf of ICICI Prudential Trust Ltd. For N.M. Raiji & Co. Chartered Accountants Membership No W J.M. Gandhi Partner Membership No Mumbai. Date : June 23, 2012 Nimesh Shah Managing Chaitanya Pande Fund Manager Dileep Choksi Kayzad Eghlim Fund Manager Devang Shah Fund Manager Avnish Jain Fund Manager M. N. Gopinath M S Parthasarathy Vinod Dhall 13

14 ICICI Prudential Mutual Fund Address:2nd Floor, Block B-2, Nirlon Knowledge Park, Western Express Highway, Goregaon, Mumbai Abridged Balance Sheet as at March 31, 2012 (figures as per Audited Balance Sheet) (As per format prescribed for Abridged schemewise Annual Report- SEBI/Md/CIR No.8/132968/2008 dt 24/07/08) ICICI Prudential Corporate Bond Fund (Formerly ICICI Prudential Long Term Float Plan) ICICI Prudential Long Term Plan ICICI Prudential Medium Term Plan (` in Lakhs) ICICI Prudential MIP - 5 (Monthly income is not assured and is subject to availability of distributable surplus)* LIABILITIES 1 Unit Capital 4, , , , , , , Reserves & Surplus 2.1 Unit Premium Reserve 0.90 (0.14) (7.37) (0.95) Unrealised Appreciation Reserve Other Reserves 1, , , , , Loans & Borrowings Current Liabilities & Provisions 4.1 Provision for doubtful Income / deposits 4.2 Other Current Liabilities & Provisions TOTAL 6, , , , , , , ASSETS 1 Investments 1.1 Listed Securities a Equity Shares b Indian Depository Receipts c Warrants Preference Shares Equity Linked debentures Other debentures & Bonds , , , Securitised debt Securities Securities Awaited Listing Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds Securitised debt Securities Unlisted Securities Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds , , Securitised debt Securities , Government Securities Treasury Bills Commercial Papers Certificate of Deposits 3, , , Bill Rediscounting Units of Domestic Mutual Fund Foreign Securities Gold Investments 4, , , , , , Deposits Other Current Assets 3.1 Cash & Bank Balance CBLO/ Reverse Repo Lending 1, , , Others Deferred Revenue Expenditure (To the Extent not written off) TOTAL 6, , , , , , , Fund Manager Chaitanya Pande Chaitanya Pande Chaitanya Pande Chaitanya Pande Refer to our Report dated June 23, 2012 in respect of complete Financial Statements For ICICI Prudential Asset Management Company Ltd. For and on behalf of ICICI Prudential Trust Ltd. For N.M. Raiji & Co. Chartered Accountants Membership No W J.M. Gandhi Partner Membership No Mumbai. Date : June 23, 2012 Nimesh Shah Managing Chaitanya Pande Fund Manager Dileep Choksi M. N. Gopinath M S Parthasarathy Vinod Dhall 14

15 ICICI Prudential Mutual Fund Address:2nd Floor, Block B-2, Nirlon Knowledge Park, Western Express Highway, Goregaon, Mumbai Abridged Balance Sheet as at March 31, 2012 (figures as per Audited Balance Sheet) (As per format prescribed for Abridged schemewise Annual Report- SEBI/Md/CIR No.8/132968/2008 dt 24/07/08) ICICI Prudential R.I.G.H.T. (Rewards of Investing & Generation of Healthy Taxsavings) Fund ICICI Prudential Money Market Fund (Formerly ICICI Prudential Sweep Plan) (` in Lakhs) ICICI Prudential Ultra Short Term Plan LIABILITIES 1 Unit Capital 8, , , , , , Reserves & Surplus 2.1 Unit Premium Reserve (1.57) (0.06) (40.04) (119.86) 2.2 Unrealised Appreciation Reserve 1, , Other Reserves 1, , , Loans & Borrowings , Current Liabilities & Provisions 4.1 Provision for doubtful Income / deposits 4.2 Other Current Liabilities & Provisions TOTAL 11, , , , , , ASSETS 1 Investments 1.1 Listed Securities a Equity Shares 10, , b Indian Depository Receipts c Warrants Preference Shares Equity Linked debentures Other debentures & Bonds - - 5, , , Securitised debt Securities Securities Awaited Listing Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds Securitised debt Securities Unlisted Securities Equity Shares Preference Shares Equity Linked debentures Other debentures & Bonds , Securitised debt Securities Government Securities Treasury Bills Commercial Papers - - 4, , Certificate of Deposits , , , , Bill Rediscounting , Units of Domestic Mutual Fund Foreign Securities Gold Investments 10, , , , , , Deposits , , Other Current Assets 3.1 Cash & Bank Balance CBLO/ Reverse Repo Lending Others Deferred Revenue Expenditure (To the Extent not written off) TOTAL 11, , , , , , Fund Manager Manish Gunwani Devang Shah Chaitanya Pande Refer to our Report dated June 23, 2012 in respect of complete Financial Statements For ICICI Prudential Asset Management Company Ltd. For and on behalf of ICICI Prudential Trust Ltd. For N.M. Raiji & Co. Chartered Accountants Membership No W J.M. Gandhi Partner Membership No Mumbai. Date : June 23, 2012 Nimesh Shah Managing Manish Gunwani Fund Manager Dileep Choksi Devang Shah Fund Manager Chaitanya Pande Fund Manager M. N. Gopinath M S Parthasarathy Vinod Dhall 15