First time in the history of Indian Mutual Fund Industry. Complete portfolio disclosure of securitisation & PTCs disclosed in Annexure I.

Transcription

1 First time in the history of Indian Mutual Fund Industry. Complete portfolio disclosure of securitisation & PTCs disclosed in Annexure I. Assets Under Management - Rs. 54, Crore (As on June 30, 2008) Average Assets Under Management for the month ended June 30, Rs. 59, Crore

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3 From the Managing Director s Desk Nimesh Shah Managing Director & Chief Executive Officer Arriving at one point is the starting point to other That has been the ICICI Prudential AMC's integral philosophy, which drives us to deliver consistent performance across all parameters. Be it Product performance, corporate governance, customer engagement and employee engagement, ICICI Prudential is consistently surpassing its service standards. In fact as an additional feather in its cap, and to present greater transparency to our investors, ICICI Prudential AMC has started disclosing securitisation and PTC details across all its fixed income assets in its factsheet. This not only informs investors about where his funds are invested but also showcases the credit quality of the investment. This is the unique initiative undertaken by any AMC in India and is a living example of our claim to transparency. These consistent efforts made towards protecting the interest of our investors has led to increased investor appreciation and trust, evident in the various awards received by us like the Readers Digest "Most trusted brand of the year Award " and "the Loyalty Award ", by India Times Mindscape along with Savile Row for Customer & Brand Loyalty in the Mutual Fund Sector. Our openness and consistent performance has also helped us beat the market trend. In June 2008 while all leading fund houses registered erosion in their average asset under management, ICICI Prudential AMC registered a gain. The investor confidence bestowed on us especially during such turbulent market conditions adds substantially to our confidence and recharges us to achieve another milestone. On the markets front, last few months have been volatile making investors apprehensive of investing. However, while inflation, interest rates and oil prices are at high levels the reprise comes from the fact that Indian fundamentals are still intact. Going by advance tax collections for Q1FY09 and good monsoon, we believe that corporate earnings will be in line with expectations and all these will provide positive cue to the markets. In such volatile times, I would suggest to our investors that do not play blind. Investing in markets through tips or no research is the biggest financial sin. You must plan your finances for various stages of your life through an efficient strategy. This strategy should be arrived at with the help of a professional. The financial planner will carry out your detailed financial check up and will arrive at an ideal asset allocation strategy for you post analyzing your risk appetite, investment objective, investment horizon and investible corpus. A well laid out plan coupled with systematic investments plan and systematic transfer plan will aid in wealth creation and growth. At ICICI Prudential AMC, we aim to provide our investors optimum returns coupled with best of services. Under current market conditions, I would recommend that investors should look at equity mutual funds with large cap bias like ICICI Prudential Focused Equity Fund. Post sharp corrections, its large cap stocks who lead the recovery and hence being invested in them through mutual funds can act as an optimum mode. On the debt front, I would recommend Fixed Maturity Plans (FMPs) in the current high yield scenario. I would like to share with you our new product offering the ICICI Prudential Banking and Financial Services Fund. The fund is an open-ended equity scheme that aims to maximize longterm capital appreciation by investing in companies engaged in banking and financial services. During the recent downfall of equity markets, banking and financial services have corrected sharply and are currently trading at attractive valuations. In our opinion, it is an opportune time to participate in this sector and hence have developed a product for our investors. We recommend investment into ICICI Prudential Banking and Financial Services Fund, through Systematic Investment Plan. Finally, this year also marks the completion of 10 years of ICICI Prudential AMC, during which through garnering the unstinted support of our investors we have achieved preeminence in the mutual fund industry. I must mention that support tendered by each of you has contributed towards this rewarding journey and I look forward for your continuous support and volition. Happy Investing!

4 The Market Equity Market Snapshot Technicals Investments by Institutions Qtr 1' Qtr 2' in the cash market (Rs. Cr.) FIIs (Net Purchases / Sales) MFs (Net Purchases / Sales) Avg Daily Open Interest (Rs. Cr.) Index Futures (Rs.Crs.) Stock Futures (Rs.Crs.) Index Options (Rs.Crs.) Stock Options (Rs.Crs.) Total ,336 Avg Daily Volumes (Rs. Cr.) CASH Segment BSE NSE Total Derivative Segment NSE Total Avg Advance Decline Ratio BSE Ratio NSE Ratio Nilesh Shah Deputy Managing Director Chief Investment Officer Fundamentals Growth of industrial production rebounded to 7% in April '08 (11.3% in April '07), after sagging to a low of 3.9% in March. Growth of capital goods touched a robust 14.2% in Apr'08, suggesting sustained investment growth and continuing its recovery, after having slumped to 2.3% in Jan'08, turning in growth rates of 10.4% in February and 11% in March. The Consumer Goods activity also seems to have picked up, suggesting that the economy is on track to achieve 7-7.5% growth for FY09, factoring in the 75bps repo rate hike and 125bps CRR hike since the start of this year. However, further monetary tightening may be on cards till some remission in inflation is seen. Inflation at elevated levels coupled with rising crude prices has caught both the government as well as RBI by surprise. India's trade deficit rose to a record $10.76bn in May '08 after slowest export growth of 13% YoY as against 27% rise in imports. Oil imports rose 50% YoY while non-oil imports rose 17% YoY, reflecting the sharp rise in crude oil prices. Valuation Ratios Qtr 1 08 Qtr2 08 P/E ratio- Sensex P/E ratio- Nifty Price/Book Value Ratio-Sensex Price/Book Value Ratio-Nifty Dividend Yield-Sensex Dividend Yield-Nifty Indices Movement % change % change Jan-Mar 08 Apr-June 08 Sensex Nifty BSE Realty BSE Capital Goods BSE PSU Bankex BSE Auto BSE Mid Cap BSE Small Cap BSE Teck Index BSE Consumer Durables BSE Oil & Gas BSE FMCG BSE Metals BSE Healthcare Market Sentiments It has been a difficult month for the equity markets with both the global as well as domestic markets registering a decline on the back of a combination of global as well as local factors, which have raised concerns on the growth prospects of the Indian/global economy in the short to medium term. Indian markets corrected, with Sensex losing 17% for the month of June '08, in a broad based correction which has been significantly higher in case of mid & small cap stocks in comparison to large cap stocks. Markets have corrected significantly since Jan '08, first on the subprime and global growth concerns and now wrestling with concerns regarding record high oil prices, resulting in a higher trade deficit, rupee depreciation, mounting fiscal deficit and restricted policy responses from the government mainly due to proximity of elections. While global concerns regarding subprime and economic growth slowdown remain to a certain extent, but the fight against inflation seems to be taking a priority. The current market sentiment has turned negative. In the short term, besides the interest rate scenario, the political uncertainty arising from the crucial decision on saving the Nuclear Deal with the US also seems to be causing concern. While MFs have been supporting the market and buying at every fall to gain from attractive valuations, FIIs have been selling ($2.5bn for June '08) on the back of concerns over high fiscal deficit, slowing growth and monetary tightening by the RBI. Global Events: The world economy is currently facing increased inflationary pressures driven by an incessant rise in the prices of commodities like fuel, base metals, food grain etc. Central bankers have got to decide whether they want to sacrifice growth or live with inflation. Analysts are of the view that as Central banks continue to push for tighter monetary policy while the economy is on the skids, you could see a markets' re-rating with downward earnings' revision and adverse impact on profitability. Economies both developed (Euro-region, UK, Australia, New Zealand) as well as developing (India, China, Japan, Malaysia, Indonesia, South Korea etc.) have been all hiking rates, while the equity markets have been tumbling on fears of stagflation- when economic growth slows but inflation remains continues to rise. While keeping interest rates unchanged, the US Fed said "upside risks to inflation and inflation expectations have increased." FOMC acknowledged the economy was still under "considerable stress" even as growth risks had "diminished somewhat". Inflation is a double-edged sword as the Fed referred to it as a drag on the economy plus a threat to inflation. US Consumer price index was up 4.2% YoY in May'08 compared with an average of 2.7% over the past decade. Stocks declined on the back of crude oil rally to record $145 a barrel, the downgrades in financial sector and the resurgence of credit concerns. DJIA hit the lows of 21-months levels after the ~7% selloff during June '08. Outlook and Recommendation Structurally the strings of the Indian economy both domestically and external front remain intact and there is nothing to suggest that any of the growth drivers- whether its in terms of the demographics, whether it is in terms of the consumption pattern, whether it is in terms of infrastructure- will be affected by inflation. Certainly, some slowdown in earnings growth of corporates cannot be ruled out, given the inflation and monetary tightening effects, and therefore the growth will go down to 7-7.5% for FY09. But then, the current market situation is more sentiment driven with high emphasis on global oil prices. Hence in the near term a lot will depend on direction in which oil prices will move. Most of the event risk in terms of high inflation, high oil prices are being factored in, however sentiments are still weighing higher than fundamentals resulting in downward move of the Sensex. The markets will likely be news driven as Q1FY09 results, crude prices and inflation numbers come. The growth is not gone but it is slowed down and there has been derating of the equity markets, reflecting the same. Analysts seem to have woken up to this post facto rather than pre facto. But the good thing is that markets seem to have priced in the same to a large extent. We think Q1FY09 results will surprise the market positively, if the advance tax collection is any indication. There are enough opportunities to be tapped, with valuations having corrected significantly in select good quality stocks/sectors. So markets are seen moving towards "stock-pickers" market. We think that the growth will moderate closer to 7-7.5% which is still pretty impressive in the peer group. As long as risk factors such as oil prices and politics do not play havoc, the economy should rebound in the medium term. While in the short term it is difficult to predict where the markets will settle, it makes sense to be overweight equity at current level. We recommend investors to look at large cap funds 4 O v e r v i e w like ICICI Pru Growth Plan, ICICI Pru Focused Equity Fund and blend of large/mid caps like ICICI Pru Power. We recommend ICICI Pru Dynamic Fund for the conservative investors. Do not let the uncertainty deter you, as you will never be able to time the market to perfection. Hence, we recommend our investors to follow asset allocation and stagger investments through systematic investment. Asset Allocation Guide: This asset allocation guide helps you to determine the suggested equity exposure at different valuations levels based on the Sensex Jan Mar Jun-06 STRETCHED 23x plus FAIR VALUE PLUS 20x -23x FAIR 16x -19x 4-Sep Nov-06 CHEAP 8x -10x Suggested Equity Allocation (Assuming 50% equity allocation as neutral) Fixed Income Market Snapshot 15-Feb-07 8-May-07 ATTRACTIVE 11x -15x 29-Jul Oct-07 Fundamentals: Neutral Sentiment Index: Negative Liquidity Index: Neutral Impact on Interest Rates FACTORS Short Term Medium Term (1-3 Months) (3-6 Months) Inflation NEGATIVE NEGATIVE WPI based inflation quickly surged to record 11.42% rise as on June 14, 2008, calling for some strong monetary tightening measures by the RBI. Analysts suggest that inflation is likely to remain in double digits for most of This has been led by the rise in the prices of fuel as well as basic metals. The govt banned export of corn after restricting sales of food items including wheat, rice, cooking oils and pulses. India had earlier banned cement exports and imposed a tax on outgoing shipments of steel products. Money Supply NEUTRAL NEUTRAL The RBI's M3 growth target of % for FY09 versus the current growth rate at 20.7% as on June 20, 2008 seems to have been one of the drivers prompting RBI's move to hike interest rates. The RBI has indicated that it would ideally like to further tighten leash on the money supply growth. Liquidity in the banking system was contained to a certain extent due to the RBI's recent CRR hikes coming into effect and the Q1FY09 advance tax payments. Liquidity management seems to be the preferred tool for RBI in order to contain inflationary expectations and CRR hike has been hiked by 125bps since April 2008 aimed at sucking out liquidity to the tune of Rs.425bn. Credit Demand NEUTRAL NEUTRAL Higher credit growth of 26% YoY (as on June 20, 2008) as against 20% target for FY09 seems to have prompted RBI to hike interest rates, signalling banks to hike their lending rates. Banks have taken the cue and have since been hiking their PLRs in order to contain credit growth. Government Borrowings NEGATIVE NEGATIVE There are fears that government is likely to overshoot its borrowing programme given the persistent rise in crude oil prices. The incomplete passthrough of higher crude prices is likely to lead to a high fiscal deficit. Foreign Exchange Market NEUTRAL NEUTRAL Rising crude oil prices implies that the trade/current account deficit rises, which is negative for the Indian rupee. The rupee has been depreciating (2% during June '08) given the rise in importer demand for dollars and consistent selling by FIIs in the equity markets. INR had slipped to $43 a dollar before RBI intervened to support the Rupee. The forex reserves though robust at $312bn for the week ending June 20, 2008, have fallen $2bn from the last month level on account of higher dollar outgo. RBI Policy NEUTRAL NEUTRAL The Reserve Bank of India (RBI) increased the Repo rate (the rate at which the banks can borrow from the Reserve Bank) and Cash Reserve Ratio (ratio of the customer's deposit which is required to be maintained with the Reserve Bank) on June 24, While the hikes were expected, the quantum has been larger than anticipated. Repo rate has been increased by 50bps to 8.5% with immediate effect and CRR by 50bps to 8.75% in two tranches (July 5 and July 19, 2008). The higher-than-anticipated hikes have been explained by the fact that petro product prices are not being passed through into the economy on a continuous basis in India. The RBI also highlighted certain demand pressures that appear to be in evidence, especially with regard to fiscal pressures, high money supply (21% as against % target), high deposits and non-food credit growth (23% and 26% respectively against the target 17% and 20% respectively). Market Sentiment NEUTRAL NEUTRAL Though a rate hike was expected on the back of govt statement that monetary policy tightening would be the first line of defense to counter inflation, but the 10-year yields spiked sharply after the larger than expected hike. The RBI had signalled that monetary policy action to rein in inflation would be 'calibrated' and gradual. However, the combination of 50bps rate hikes plus the high oil prices and fresh bond supplies caused the yields to rise to 7-year high levels of close to 9% mark. OUTLOOK Inflation is constraining the central banks as they realize that economic growth may have to weaken in order to control inflation. Even the developed economies which are struggling with serious growth issues are likely to refrain from cutting rates further (something that they have been resorting to in order to support financial markets and stimulate growth), while there are already talks of rate hikes on the back of persistently uptrend inflation, as the European Central Bank has hiked interest rates by 25bps on the back of the recent "inflation shock" while the US Fed has also highlighted "upside risks" to inflationary pressures. The RBI signalled "heightened vigil" and reiterated that it would play its part in moderating and managing demand and may have to "build on actions it has already taken to battle price pressures", indicating that the latest interest rate hike may not be the last. This is a fight with inflation and clearly inflation has taken an upper hand in the fight currently. The market sentiment going forward is likely to stay negative on the back of inflationary pressures, higher fiscal deficit and high oil prices. Further monetary action cannot be completely ruled out in the July Monetary Policy Review, as inflation continues to maintain an upward trend. We recommend investors to look at investing in FMPs in the coming months for their portfolios to benefit from the prevailing high yields. 9-Jan Mar Jun-08 Valuation levels of the Sensex based on FY09 earnings estimate of Rs.960

5 ICICI Prudential Dynamic Plan Open Ended Diversified Equity Fund Style Box Fund Manager^ : Sankaran Naren (Managing this fund since Sept., 2006 & total 17 yrs of experience in fund management, equity research, operation etc.) Indicative Investment Horizon: 3 yrs & more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs Institutional Option-I : Rs **Expense Ratio : Retail option : 1.96% Institutional option-i : 1.00% (Please refer to page no. 60 for Additional Information & page no. 51 for dividend history) Rs invested at inception: Dynamic Plan Vs S&P CNX Nifty 1,009, , , ,665 Rs , , , , ,665 Rs ,665 9,665 CAGR Dynamic Plan: 39.02%; Benchmark: 29.06% Past performance may or may not be sustained in future. Performance Record *- Cumulative Option Oct-02 Feb-03 Jun-03 Oct-03 Feb-04 Jun-04 Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Dynamic Plan -6.40% -8.44% % % Last 6 Last 1 Last 3 Months year years Dynamic Plan S&P CNX Nifty 30.15% 38.18% 39.02% 22.06% 28.89% 29.06% Last 5 Since years Inception S&P CNX Nifty *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Avg. Monthly Returns in Various Market Conditions (Absolute) Medium term investment of funds for capital appreciation by managing cash and equity portfolio Company/Issuer Mkt Value (Rs. Lakh) % to NAV Reliance Industries Ltd 17, % Nifty Futures 7, % Infosys Technologies Ltd 6, % Federal Bank Ltd 5, % Bharati Airtel Ltd 4, % Satyam Computer Services Ltd 4, % Oil & Natural Gas Company Ltd 4, % Deccan Chronicle Holdings Ltd 4, % Bharat Heavy Electricals Ltd 4, % Texmaco Ltd 4, % ICICI Bank Ltd 3, % Mahindra & Mahindra Ltd 3, % Cadila Healthcare Ltd 3, % Tata Tea Ltd 3, % Zee Entertainment Enterprises Ltd 3, % Coromandel Fertilisers Ltd 2, % Larsen & Toubro Ltd 2, % Tata Consultancy Services Ltd 2, % Bombay Dyeing & Manufacturing Co. Ltd 2, % Marico Industries Ltd 2, % Aditya Birla Nuvo Ltd 2, % Orient Paper & Industries Ltd 2, % Alembic Ltd 2, % Sterlite Optical Technologies Ltd 2, % Patel Engineering Ltd 2, % United Phosphorus Ltd 1, % Apollo Tyres Ltd 1, % Voltas Ltd 1, % AIA Engineering Ltd 1, % Greaves Cotton Limited 1, % Mukand Ltd 1, % Indian Hotels Company Ltd 1, % Kalyani Steels Ltd % ITC Limited % Bajaj Auto Ltd % Steel Authority of India Ltd % Sterlite Industries India Ltd % Punjab National Bank Ltd % Subex Azure Ltd % Max India Ltd % ING Vysya Bank Ltd % Wabco TVS (India) Ltd % Sundaram Clayton Ltd % Tata Power Company Ltd % Hindalco Industries Ltd % Private Corporate Securities 5, % Mahindra & Mahindra Financial Services Ltd 5, % CPs, CDs and Term Deposits 9, % ICICI Bank Ltd 8, % Kotak Mahindra Bank Ltd 1, % Cash, CBLO & Reverse Repo 13, % Other Current Assets (8,891.30) -6.28% Total Net Assets 141, Top Ten Holdings Sector Allocation* 8.00% 6.00% % -8.00% 7.10% 6.16% When the Benchmark is up Dynamic Plan Since inception data. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Quantitative Indicators: Average P/E : 14.8 Average P/BV : 2.56 Average Dividend Yield : 1.38 Annual Turnover Ratio : 2.12 times -5.42% -5.88% When the Benchmark is down S&P CNX Nifty Std Dev : 7.74% Sharpe Ratio^ : 0.23 Beta : 0.90 R squared : 0.79 turnover has been computed as the ratio of the lower value of average purchase and average sales, to the average net assets in the past one year (since inception for schemes that have not completed a year). The figures are not netted for derivative transactions. ^ Risk-free rate based on the last 3 month T-Bill cut-off of 8.73%. Fund Manager's Comment The fund's average equity exposure is at 85% on the back of volatility and cautious sentiment in the market, with a 5% allocation to Nifty Futures. It continues to be overweight Capital Goods and has increased exposure to Software and Banks. The fund continues to remain underweight Telecom, Oil & Gas, Realty and Utilities. Power Non-Ferrous Metals Hotels Consumer Durables Pesticides Auto Ancillaries Construction Cement Fertilizers Ferrous Metals Oil Auto Telecom Services Textiles - Products Industrial Products Pharmaceuticals Consumer Non-Durable Media & Entertainment Banks Industrial Capital Goods Software Petroleum Products 0.05% 0.52% 0.74% 1.14% 1.16% 1.39% 1.45% 1.61% 2.06% 2.12% 3.00% 3.23% 3.28% 3.53% 3.76% 4.14% 4.95% 5.11% 7.48% 7.63% 10.15% 12.57% 8.00% % *Pertains to the equity investments only. SIP Returns: As on 30-Jun-2008 Period SIP Start Date Total Amount Total No. Market Value SIP Invested of Units Returns 1 Year SIP 31-Jul-07 12, , % 3 Year SIP 29-Jul-05 36, , % 5 Year SIP 31-Jul-03 60, , , % Since Inception 31-Oct-02 69, , , % Past performance may or may not be sustained in future. Assume Rs invested every month. The high level of returns come from the sharp appreciation in market, in the year 2002 & ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only. 5

6 ICICI Prudential Fusion Fund-Series II Close-ended Diversified Equity Scheme Style Box Fund Manager^ : Deven Sangoi Style (Managing this fund since April, 2008 & overall 11 yrs Value Blend Growth Size of equity market experience & 5 yrs of fund Large management experience) Indicative Investment Horizon: 3 yrs and more Mid Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Small Growth option : Rs Dividend option : Rs Institutional Growth Option : Rs **Expense Ratio : Retail option : 2.12% Institutional option-i : 1.22% (Please refer to page no. 60 for Additional Information & page no. 51 for dividend history) Rs invested at inception: Fusion Fund-Series II Vs S&P CNX Nifty 189, , , , ,602 89,602 69,602 49,602 29,602 9,602 CAGR Fusion Fund-Series II : -2.24%; Benchmark : 4.55% Past performance may or may not be sustained in future. Performance Record *- Growth Option % -5.00% % % % % % % *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nfty Index. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Avg. Monthly Returns in Various Market Conditions (Absolute) 8.00% 6.00% % -8.00% -1 Since inception data. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Quantitative Indicators: Average P/E : Average P/BV : 2.38 Average Dividend Yield: 0.86 Annual Turnover Ratio: 0.98 times -5.18% % -2.24% 4.55% Last 6 Months Last 1 year Since Inception Fusion Fund - Series II Rs Rs Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun % Fusion Fund - Series II 5.58% When the Benchmark is up Fusion Fund-Series II S&P CNX Nifty S&P CNX Nifty -7.20% -7.60% When the Benchmark is down S&P CNX Nifty Std Dev : 8.39% Sharpe Ratio^ : Beta : 0.83 R squared : 0.80 turnover has been computed as the ratio of the lower value of average purchase and average sales, to the average net assets in the past one year (since inception for schemes that have not completed a year). The figures are not netted for derivative transactions. ^ Risk-free rate based on the last 3 month T-Bill cut-off of 8.73%. 6 Exploit the long-term investment potential in small & mid-cap segment Company/Issuer Mkt Value (Rs. Lakh) % to NAV Subhiksha Trading Services Pvt Ltd 4, % Nifty Futures 4, % Allied Digital Services Ltd 4, % Dishman Pharmaceuticals & Chemicals Ltd 3, % Time Technoplast Ltd 2, % Entertainment Network India Ltd 2, % Gujarat NRE Coke Ltd 2, % Cadila Healthcare Ltd 2, % Coromandel Fertilisers Ltd 2, % SREI Infrastructure Finance Ltd 2, % Sterlite Industries India Ltd 2, % AIA Engineering Ltd 2, % ABG Heavy Industries Ltd 2, % Reliance Industries Ltd 1, % Usha Martin Ltd 1, % Federal Bank Ltd 1, % Zee Entertainment Enterprises Ltd 1, i Infotech Ltd 1, % Electrosteel Castings Ltd 1, % Shree Renuka Sugars Ltd 1, % Punjab National Bank Ltd 1, % Ratnamani Metals & Tubes Ltd 1, % Kaveri Seed Company Ltd 1, % IVRCL Infrastructure & Projects Ltd 1, % Tata Consultancy Services Ltd 1, % Max India Ltd 1, % Elecon Engneering Co Ltd 1, % Kirloskar Oil Engines Ltd 1, % Kalyani Steels Ltd 1, % ICICI Bank Ltd 1, % Pantaloon Retail (India) Ltd 1, % Monnet Ispat Ltd 1, % Glenmark Pharmaceuticals Ltd % Deccan Chronicle Holdings Ltd % Prime Focus Ltd % Ceat Ltd % Nagarjuna Construction Company Ltd % Advanta India Ltd % Arshiya International Ltd % ION Exchange India Ltd % PTC India Ltd % Voltas Ltd % Vimta Labs Ltd % Carborandum Universal Ltd % CHI Investments Ltd % Nicholas Research & Development Ltd % Treasury Bills 4, % 364 Day T Bill (MD 24/10/2008) 4, % CPs, CDs and Term Deposits 1, % ICICI Bank Ltd 1, % Cash, CBLO & Reverse Repo 5, % Other Current Assets (1,867.14) -2.22% Total Net Assets 84, Top Ten Holdings Sector Allocation* Healthcare Services 0.53% Consumer Durables 0.63% Power 0.64% Agri Inputs 0.80% Auto Ancillaries 0.89% Consumer Non-Durable 1.84% Industrial Capital Goods 2.06% Petroleum Products 2.29% Construction 2.39% Non-Ferrous Metals 2.59% Finance 2.96% Transportation 3.17% Minerals/Mining 3.24% Chemicals 3.54% Fertilizers 4.60% Banks 5.14% Ferrous Metals 6.30% Media & Entertainment 7.17% Retailing 7.19% Industrial Products 7.49% Pharmaceuticals 8.66% Software 8.66% 8.00% 1 *Pertains to the equity investments only. ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only.

7 ICICI Prudential Power Open Ended Diversified Equity Fund Style Box Fund Manager^ : Prashant Kothari (Managing this fund since April, 2008 & over 3 yrs of experience as equity analyst & fund manager) Indicative Investment Horizon: 5 yrs & more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs Institutional option-i : Rs **Expense Ratio : Retail option : 2.22% Diversified Institutional option- I : 1.00% (Please refer to page no. 60 for Additional Information & page no. 51 for dividend history) Rs invested at inception: Power Plan Vs S&P CNX Nifty 1,406,000 1,206,000 1,006, , , , ,000 6,000 Power S&P CNX Nifty CAGR Power: 15.54%; Benchmark: 8.65% Past performance may or may not be sustained in future. Performance Record* - Growth Option % % Last 6 Months 34.12% 28.89% 22.57% 22.06% 15.54% 8.65% -6.40% % Last 1 year Rs Last 3 years Rs Oct-94 Jun-95 Feb-96 Oct-96 Jun-97 Feb-98 Oct-98 Jun-99 Feb-00 Oct-00 Jun-01 Feb-02 Oct-02 Jun-03 Feb-04 Oct-04 Jun-05 Feb-06 Oct-06 Jun-07 Jun-08 Last 5 years Since Inception Power S&P CNX Nifty *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Long term investment of funds for capital appreciation in a blend of large and midcap portfolio Company/Issuer Mkt Value (Rs. Lakh) % to NAV Reliance Industries Ltd 6, % Bharati Airtel Ltd 4, % Infosys Technologies Ltd 4, % Bharat Heavy Electricals Ltd 3, % Larsen & Toubro Ltd 3, % Tata Consultancy Services Ltd 3, % ICICI Bank Ltd 2, % Aditya Birla Nuvo Ltd 2, % Tata Steel Ltd 2, % ITC Limited 2, % Cadila Healthcare Ltd 2, % Sterlite Industries India Ltd 2, % Sun Pharmaceutical Industries Ltd 2, % AIA Engineering Ltd 1, % National Thermal Power Corporation Ltd 1, % Grasim Industries Ltd 1, % Hindalco Industries Ltd 1, % Patel Engineering Ltd 1, % IVRCL Infrastructure & Projects Ltd 1, % Oil & Natural Gas Company Ltd 1, % Jaiprakash Associates Ltd 1, % Steel Authority of India Ltd 1, % SREI Infrastructure Finance Ltd 1, % Deccan Chronicle Holdings Ltd 1, % Kotak Mahindra Bank Ltd 1, % Mahindra & Mahindra Ltd 1, % Industrial Development Finance Corporation Ltd 1, % Satyam Computer Services Ltd 1, % Punjab National Bank Ltd 1, % Kalyani Steels Ltd 1, % Union Bank of India Ltd % Reliance Energy Ltd % Indiabulls Real Estate Ltd % Asian Paints Ltd % Reliance Petroleum Ltd % Television Eighteen India Ltd % CPs, CDs and Term Deposits 3, % HDFC Ltd 2, % ICICI Bank Ltd 1, % Cash, CBLO & Reverse Repo 1, % Other Current Assets (377.70) -0.51% Total Net Assets 73, Top Ten Holdings Avg. Monthly Returns in Various Market Conditions (Absolute) 8.00% 7.28% 6.85% 6.00% % -8.00% When the Benchmark is up Power S&P CNX Nifty Since inception data. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Quantitative Indicators: Average P/E : Average P/BV : 3.04 Average Dividend Yield : 1.23 Annual Turnover Ratio : 1.66 times -4.86% -5.55% When the Benchmark is down Std Dev : 8.03% Sharpe Ratio^ : 0.16 Beta : 0.98 R squared : 0.87 turnover has been computed as the ratio of the lower value of average purchase and average sales, to the average net assets in the past one year (since inception for schemes that have not completed a year). The figures are not netted for derivative transactions. ^ Risk-free rate based on the last 3 month T-Bill cut-off of 8.73%. Fund Manager's Comment The fund maintained an average equity exposure of ~95% during the month. The exposure to Media & Entertainment sector has been further trimmed. The fund has further added exposure to FMCG on account of defensive considerations and Utilities on the back of reasonable valuations. The fund has started increasing exposure to PSU Banks on account of attractive valuations after the recent steep correction in the segment. Sector Allocation* SIP Returns: As on 30-Jun-2008 Period SIP Start Date Total Amount Total No. Market Value SIP Invested of Units Returns 1 Year SIP 31-Jul-07 12, , Year SIP 29-Jul-05 36, , % 5 Year SIP 31-Jul-03 60, , , % Since Inception 1-Oct , , , % Past performance may or may not be sustained in future. Assume Rs invested every month. ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only. 7 Auto Media & Entertainment Oil Cement Industrial Products Pow er Finance Consumer Non-Durable Textiles - Products Non-Ferrous Metals Pharmaceuticals Telecom Services Construction Ferrous Metals Banks Petroleum Products Industrial Capital Softw are 1.69% 1.77% 2.10% 2.35% 2.68% 3.29% 3.39% 3.79% 3.82% 5.13% 6.01% 6.20% 6.84% 7.04% 8.32% 8.63% 9.53% 11.25% 8.00% 1 *Pertains to the equity investments only.

8 ICICI Prudential Tax Plan Open Ended Diversified Equity Fund Style Box Fund Manager^ : Sankaran Naren (Managing this fund since Oct., 2005 & over 17 yrs of experience in fund management, equity research, operation etc.) Indicative Investment Horizon: 3 yrs & more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs **Expense Ratio : 2.17% (Please refer to page no. 60 for Additional Information & page no. 51 for dividend history) Rs invested at inception: Tax Plan Vs S&P CNX Nifty 1,406,301 1,206,301 1,006, , , , ,301 6,301 CAGR Tax Plan: 27.05%; Benchmark : 13.20% Past performance may or may not be sustained in future. Performance Record *- Growth Option % % Last 6 Last 1 Months year Tax Plan S&P CNX Nifty *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Avg. Monthly Returns in Various Market Conditions (Absolute) % 6.00% % -8.00% PruICICI Tax Plan S&P CNX Nifty Since inception data. Benchmark is S&P CNX Nifty. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. 30-Jun-07 was a non business day. Quantitative Indicators: Average P/E : 13.4 Average P/BV : 2.24 Average Dividend Yield : 1.44 Annual Turnover Ratio : 2.74 times turnover has been computed as the ratio of the lower value of average purchase and average sales, to the average net assets in the past one year (since inception for schemes that have not completed a year). The figures are not netted for derivative transactions. ^ Risk-free rate based on the last 3 month T-Bill cut-off of 8.73%. Fund Manager s Comment 38.38% 28.89% 27.05% 22.06% 15.94% 13.20% -6.40% % Last 3 years Rs Rs Aug-99 Dec-99 Apr-00 Aug-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Jun % Tax Plan 6.15% When the Benchmark is up S&P CNX Nifty Last 5 years Since Inception -5.95% -5.78% When the Benchmark is down Std Dev : 8.74% Sharpe Ratio^ : 0.10 Beta : 0.93 R squared : 0.66 From the earlier positioning of primarily a small and mid-cap fund, the ICICI Prudential Tax Plan has transitioned into a blend of large and mid/small cap fund, with the objective of being able to provide steady returns. The fund has been gradually increasing exposure to large caps as it aims to gradually get to the ratio of 50% large caps. The fund is overweight defensive sectors such as Consumer Non-durables and Pharma, in addition to high exposure to Industrial Capital Goods and Software. 8 Medium term investment of funds with tax benefits for capital appreciation Company/Issuer Mkt Value (Rs. Lakh) % to NAV Reliance Industries Ltd 4, % Cadila Healthcare Ltd 3, % Bharat Electonics Ltd 3, % Bharat Heavy Electricals Ltd 2, % Larsen & Toubro Ltd 2, % Tata Tea Ltd 2, % Bharati Airtel Ltd 2, % 3i Infotech Ltd 2, % ING Vysya Bank Ltd 1, % ICICI Bank Ltd 1, % Sadbhav Engineering Ltd 1, % Corporation Bank Ltd 1, % Vishal Retail Ltd 1, % Gillette India Ltd 1, % Mahindra Gesco Developers Ltd 1, % Mahindra & Mahindra Ltd 1, % Zuari Industries Ltd 1, % Zee Entertainment Enterprises Ltd 1, % Pantaloon Retail (India) Ltd 1, % Numeric Power Systems Ltd 1, % Tata Consultancy Services Ltd 1, % Kesoram Industries Ltd 1, % Bombay Dyeing & Manufacturing Co. Ltd 1, % Kirloskar Brothers Ltd 1, % Oil & Natural Gas Company Ltd 1, % Satyam Computer Services Ltd 1, % Orient Paper & Industries Ltd 1, % Poleplex Corporation Ltd 1, % Kalpataru Power Transmission Ltd 1, % Kalyani Steels Ltd % Megasoft Ltd % Wabco TVS (India) Ltd % Sun Pharma Advanced Research Co. Ltd % Steel Authority of India Ltd % Kotak Mahindra Bank Ltd % Pidilite Industries Ltd % Gujarat NRE Coke Ltd % Hindustan Dorr-Oliver Ltd % Zee News Ltd % Ceat Ltd % Deccan Chronicle Holdings Ltd % FDC Ltd % Paper Products Ltd % Cords Cable Industries Ltd % Clariant Chemicals (India) Ltd % UTI Bank Ltd % Infosys Technologies Ltd % Hindustan Sanitaryware & Industries Ltd % Indian Hotels Company Ltd % Venky's (India) Ltd % Rane Madras Ltd % Sundaram Clayton Ltd % Hindalco Industries Ltd % Containers Corporation of India Ltd % VST Tillers Tractors Ltd % Bharat Forge Ltd % MM Forgings Ltd % Vakrangee Software Ltd % Sundaram Brake Linings Ltd % Precot Mills Ltd % Bank of Baroda Ltd % CHI Investments Ltd % Subhash Projects & Marketing Ltd % Cash, CBLO & Reverse Repo 3, % Other Current Assets 1, % Total Net Assets 71, Top Ten Holdings Sector Allocation* Finance Textiles - Cotton Transportation Non-Ferrous Metals Hotels Chemicals Minerals/Mining Cement Oil Textiles - Products Fertilizers Ferrous Metals Auto Telecom Services Media & Entertainment Retailing Construction Auto Ancillaries Industrial Products Petroleum Products Pharmaceuticals Consumer Non-Durable Softw are Banks Industrial Capital Goods 0.05% 0.17% 0.40% 0.49% 0.55% 0.63% 0.88% 1.43% 1.53% 1.62% 1.95% 2.12% 2.41% 3.01% 3.60% 4.21% 4.69% 4.86% 4.99% 5.83% 6.34% 7.55% 8.07% 9.69% *Pertains to the equity investments only. SIP Returns: As on 30-Jun-2008 Period SIP Start Date Total Amount Total No. Market Value SIP Invested of Units Returns 1 Year SIP 31-Jul-07 12, , Year SIP 29-Jul-05 36, , % 5 Year SIP 31-Jul-03 60, , , % Since Inception 19-Aug , , , % Past performance may or may not be sustained in future. Assume Rs invested every month. The high level of returns come from the sharp appreciation in market, in the year ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only % 5.00% % 2

9 ICICI Prudential Indo Asia Equity Fund Open Ended Diversified Equity Fund Style Box Fund Managers : Sankaran Naren (Managing this fund since inception & over 17 yrs of experience in fund management, equity research, operation etc.) Amit Mehta (Managing this fund since inception & experience of 2.13 yrs in engineering & banking) Indicative Investment Horizon: 3 yrs & more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs Institutional Growth Option : Rs **Expense Ratio : Retail option : 2.21% Institutional option-i : 2.21% (Please refer to page no. 60 for Additional Information) Performance Record *- Growth Option -5.00% % % % % Last 6 Months Indo Asia Equity Fund % % Since Inception Benchmark *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is 65% of S&P CNX Nifty + 35% of MSCI AC Far East Free ex-japan Index. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. Long term capital appreciation by investing in blend of Indian & Asian Equities Company/Issuer Mkt Value (Rs. Lakh) % to NAV IOF Asia Equity Fund % Reliance Industries Ltd 3, % Oil & Natural Gas Company Ltd 2, % ICICI Bank Ltd 2, % Bharat Electonics Ltd 2, % Bharat Heavy Electricals Ltd 1, % Bharati Airtel Ltd 1, % Infosys Technologies Ltd 1, % Larsen & Toubro Ltd 1, % Mahindra & Mahindra Ltd 1, % Sterlite Industries India Ltd 1, % Steel Authority of India Ltd 1, % Grasim Industries Ltd 1, % Satyam Computer Services Ltd 1, % Tata Consultancy Services Ltd 1, % Federal Bank Ltd 1, % Hindalco Industries Ltd 1, % Zee Entertainment Enterprises Ltd 1, % Tata Steel Ltd 1, % ING Vysya Bank Ltd 1, % ITC Limited % Bajaj Auto Ltd % National Thermal Power Corporation Ltd % Tata Tea Ltd % Cummins India Ltd % Texmaco Ltd % Ahluwalia Contractors Ltd % Voltas Ltd % Karur Vysya Bank Ltd % Bombay Dyeing & Manufacturing Co. Ltd % Deccan Chronicle Holdings Ltd % PSU/PFI Bonds % Union Bank of India Ltd % Cash, CBLO & Reverse Repo 1, % Other Current Assets (806.77) -1.27% Total Net Assets 60, Top Ten Holdings Quantitative Indicators: Annual Turnover Ratio : 1.60 times turnover has been computed as the ratio of the lower value of average purchase and average sales, to the average net assets in the past one year (since inception for schemes that have not completed a year). The figures are not netted for derivative transactions. Sector Allocation* Textiles - Products 0.97% Consumer Durables 1.03% Construction 1.04% Industrial Products 1.15% Pow er 1.26% Cement 2.30% Media & Entertainment 2.51% Consumer Non-Durable 2.73% Telecom Services 2.99% Oil 4.10% Auto 4.11% Ferrous Metals 4.12% Non-Ferrous Metals 4.33% Petroleum Products 6.08% Softw are 7.19% Banks 8.80% Industrial Capital Goods 10.42% 8.00% 1 *Pertains to the Indian equity investments only. 9

10 ICICI Prudential Fusion Fund-Series III Close-ended Diversified Equity Scheme Fund Manager^ : Deven Sangoi (Managing this fund since inception & overall 11 yrs of equity market experience & 5 yrs of fund management experience) Indicative Investment Horizon: 3 yrs and more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs Institutional Growth Option : Rs **Expense Ratio : Retail option : 2.24% Institutional option-i : 1.20% (Please refer to page no. 60 for Additional Information) Performance Record *- Growth Option % -8.00% % Since Inception % Fusion Fund - Series III % Style Box Style Value Blend S&P CNX Nifty Growth Size Large *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nfty Index. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. Mid Small Potential capital appreciation in the long term by investing in a fusion of high growth sectors Company/Issuer Mkt Value (Rs. Lakh) % to NAV Nifty Futures 11, % Reliance Industries Ltd 3, % Infosys Technologies Ltd 2, % Sintex Industries Ltd 2, % Bharati Airtel Ltd 1, % I-Flex Solutions Ltd 1, % HDFC Ltd 1, % ICICI Bank Ltd 1, % Bharat Heavy Electricals Ltd 1, % Tata Steel Ltd 1, % IVRCL Infrastructure & Projects Ltd 1, % PTC India Ltd 1, % UTI Bank Ltd 1, % Dishman Pharmaceuticals & Chemicals Ltd 1, % Pantaloon Retail (India) Ltd % Sadbhav Engineering Ltd % Aban Lloyd Chiles Offshore Ltd % Zee Entertainment Enterprises Ltd % Century Textiles & Industries Ltd % Bosch Chassis Systems India Ltd % Mahindra & Mahindra Ltd % Steel Authority of India Ltd % Mahindra Gesco Developers Ltd % Satyam Computer Services Ltd % HCL Infosystems Ltd % SREI Infrastructure Finance Ltd % Sterlite Industries India Ltd % Divis Laboratories Ltd % Reliance Energy Ltd % Voltas Ltd % Crompton Greaves Ltd % Usha Martin Ltd % Kirloskar Brothers Ltd % Bharat Electonics Ltd % Elecon Engneering Co Ltd % Kotak Mahindra Bank Ltd % Jubilant Organosys Ltd % Punjab National Bank Ltd % AIA Engineering Ltd % CMC Ltd % Allied Digital Services Ltd % Vishal Retail Ltd % Jain Irrigation Systems Ltd % Kirloskar Ferrous Industries Ltd % PSU/PFI Bonds 5, % Indian Oil Corporation Ltd 5, % CPs, CDs and Term Deposits 5, % HDFC Ltd 2, % ICICI Bank Ltd 2, % Citibank % Cash, CBLO & Reverse Repo 5, % Other Current Assets (8,612.04) % Total Net Assets 58, Top Ten Holdings Sector Allocation* Consumer Durables 1.12% Non-Ferrous Metals 1.18% Auto 1.43% Auto Ancillaries 1.43% Cement 1.45% Media & 1.50% Hardw are 1.89% Retailing 2.30% Pow er 3.03% Telecom Services 3.23% Pharmaceuticals 3.67% Finance 3.69% Ferrous Metals 4.52% Construction 4.87% Industrial Products 5.51% Petroleum Products 5.53% Banks 5.71% Industrial Capital 6.63% Softw are 9.03% 8.00% 1 *Pertains to the equity investments only. ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only. 10

11 ICICI Prudential Focused Equity Fund Open Ended Diversified Equity Scheme Fund Manager^ : Prashant Kothari (Managing this fund since inception & over 3 yrs of experience as equity analyst & fund manager) Indicative Investment Horizon: 3 yrs & more Inception date: Fund Size: Rs crores NAV (As on 30-Jun-2008): Growth option : Rs Dividend option : Rs Institutional Option -I : Rs **Expense Ratio : Retail option : 2.26% Institutional option : 1.20% (Please refer to page no. 60 for Additional Information) Performance Record *- Growth Option % -8.00% % % % Focused Equity Fund Since Inception % S&P CNX Nifty Style Box *Returns < 1Year : Absolute, > = 1Year : CAGR. Benchmark is S&P CNX Nfty Index. For computation of returns the allotment NAV has been taken as Rs Past performance may or may not be sustained in future. To maximize long-term total return by investing in equity and equity related securities of about 20 large-cap companies Company/Issuer Mkt Value (Rs. Lakh) % to NAV Nifty Futures 6, % Reliance Industries Limited 4, % Bharati Airtel Ltd. 3, % Larsen & Toubro Limited 3, % Infosys Technologies Limited 2, % Bharat Heavy Electricals Ltd 2, % ICICI Bank Limited 2, % National Thermal Power Corporation 1, % Tata Steel Limited 1, % Hindalco Industries Limited 1, % ITC Limited 1, % Housing Development Finance Corpn Ltd. 1, % Tata Power Company Limited 1, % Tata Consultancy Services Limited 1, % Mahindra & Mahindra Limited % Oil & Natural Gas Company Ltd % Asian Paints Limited % PSU/PFI Bonds 7, % Indian Oil Corporation Limited 7, % CPs, CDs and Term Deposits 11, % Housing Development Finance Corpn Ltd. 4, % Dsp Merrill Lynch Capital Limited 4, % ICICI Bank Ltd 2, % Cash, CBLO & Reverse Repo 2, % Other Current Assets (6,415.31) % Total Net Assets 52, Top Ten Holdings Sector Allocation* Oil Auto Finance Non-Ferrous Metals Consumer Non-Durable Ferrous Metals Banks Power Telecom Services Software Petroleum Products Industrial Capital Goods 0.77% 1.78% 2.78% 2.94% 3.38% 3.51% 4.16% 6.42% 6.49% 7.30% 7.91% 11.13% 8.00% 1 *Pertains to the Indian equity investments only. ^ In addition to the fund manager managing this fund, the ADR/GDR exposure is managed by Mr. Amit Mehta to extent of ADR/GDR exposure only. 11